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UNITED STATES
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) January 31, 1997
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APPLIED CELLULAR TECHNOLOGY, INC.
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(Exact name of registrant as specified in its charter)
Missouri 33-79678 43-1641533
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(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Highway 160 & CC, Suite 5, Nixa, Missouri 65714
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(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code: 417-725-9888
Page 1
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Item 1. Changes in Control of Registrant
Item 2. Acquisition or Disposition of Assets.
On January 31, 1997, Applied Cellular Technologies, Inc. (the
"Company") purchased 100% of the 4,828,571 issued and outstanding
common shares, $0 par value, and 100% of the 1,931,429 issued and
outstanding $0 par value preferred convertible shares of MVAK
Technologies, Inc. ("MVAK") which, at closing, will be converted to
common stock at a 1 for 1 ratio of the issued and outstanding common
stock of MVAK. As consideration, the Company issued 389,296 of it's
restricted common shares at $4.9375 per share to the three
shareholders of the common stock and the one shareholder of the
preferred convertible shares.
Item 3. Bankruptcy or Receivership. None.
Item 4. Changes in Registrant's Certifying Accountant. No.
Item 5. Other Events. None.
Item 6. Resignation of Registrant's Directors. None.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired. It is impractical to
provide the required (if any) financial statements for MVAK at the
time this Form 8-K is filed. The registrant shall file the required
(if any) financial statements under cover of Form 8-K on or before
April 16, 1997.
(b) Pro forma financial information. To be provided (if required) on or
before April 16, 1997.
(c) Exhibits. Agreement of Sale.
See attached.
Item 8. Change in fiscal year. None.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
APPLIED CELLULAR TECHNOLOGY, INC.
(Registrant)
Date: February 19, 1997 /s/ Garrett A. Sullivan
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President
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AGREEMENT OF SALE
BY AND BETWEEN
APPLIED CELLULAR TECHNOLOGY, INC.
AS BUYER
AND
RONALD M. KAPLAN
FRANK J. GIACONA
ALAN S. KAPLAN
EDELSON TECHNOLOGY PARTNERS
AS SELLERS
MVAK TECHNOLOGIES, INC.
AS ACQUIREE
DATED AS OF JANUARY 31, 1997
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AGREEMENT OF SALE
This Agreement is entered as of the 31st day of January, 1997 by
and between Applied Cellular Technology, Inc., a Missouri
corporation ("Buyer"), Ronald M. Kaplan of 104 Fairway Avenue,
Verona, New Jersey 07044, Frank J. Giacona of 904 Windstream
Terrace, Orlando, Florida 32818, Alan S. Kaplan of 178 Boulevard,
Mountain Lakes, New Jersey and Edelson Technology Partners,
Whiteweld Centre, 3000 Tice Boulevard, Woodcliff Lake, New Jersey
07675 (hereinafter referred to collectively as "Sellers"), and MVAK
Technologies, Inc., a New Jersey corporation ("Acquiree").
WHEREAS, Ronald M. Kaplan owns two million eighty thousand
(2,080,000) shares, $-0- par value and Alan S. Kaplan owns two
million eighty thousand (2,080,000) shares, $-0- par value and
Frank J. Giacona owns six hundred sixty-eight thousand five hundred
seventy-one (668,571) shares, $-0- par value and Edelson Technology
Partners owns one million nine hundred thirty-one thousand four
hundred twenty-nine thousand (1,931,429) shares, $-0- par value of
preferred convertible stock which at Closing Date will be converted
to common stock at 1 for 1 ratio (the "Acquiree Shares") of the
issued and outstanding common stock of Acquiree; and
WHEREAS, Sellers desire to sell and Buyer desires to acquire one
hundred percent (100%) of the issued and outstanding shares of
Acquiree (the "Sales Shares").
NOW, THEREFORE, for the mutual consideration set out herein, the
parties agree as follows:
1. PURCHASE AND SALE OF ACQUIREE SHARES
1.1 Sellers shall sell to Buyer and Buyer shall purchase from
Sellers the Sale Shares at a closing of such sale (the "Closing")
to be held at the place and on the date hereinafter provided (the
"Closing Date").
1.2 The purchase price (the "Price") shall be two million one
hundred thousand dollars ($2,100,000.00) in the form of restricted
common shares of Buyer with demand registration rights. Buyer
shall assume the outstanding Bank debt of Acquiree of one hundred
seventy-seven thousand eight hundred fifty-one dollars
($177,851.00), the amount of the loans assumed hereunder shall
reduce the above price in equal amounts.
The value of the shares shall be equal to one million
nine hundred twenty-two thousand one hundred forty-nine dollars
($1,922,149.00). The market value of the above shares is the lower
of the market closing prices during the average of the last two (2)
days prior to the Closing Date as reflected on the NASDAQ bid price
published in the "Wall Street Journal" or five and 50/100ths
dollars ($5.50) per share.
a. Buyer agrees that it will prepare and file
with the Securities and Exchange Commission (the "Commission") a
registration statement with respect to the three hundred eighty-
nine thousand two hundred ninety-six (389,296) shares of Buyer's
common stock issuable to Sellers pursuant to Section 1.2 hereof
(the "Registration Statement") on or before March 31, 1997. Buyer
shall use its best efforts to cause the Registration Statement to
become effective as soon as practicable but not later than by
August 31, 1997. Buyer shall prepare and file with the Commission
such amendments and supplements to the Registration Statement,
including post-effective amendments and the prospectus used in
connection therewith that may be necessary to
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AGREEMENT OF SALE
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keep such Registration Statement effective for a period of not less than nine
(9) months and to comply with the provisions of the Securities Act of 1933, as
amended, and the regulations promulgated pursuant thereto (the "Act").
b. Buyer shall use its reasonable efforts to cause all
securities registered pursuant to the Registration Statement to be
listed on the NASDAQ National Market System by the above date.
c. In the event of the issuance of any stop order
suspending the effectiveness of the Registration Statement, or any
order suspending or preventing the use of any related prospectus or
suspending the qualification of any common stock included in the
Registration Statement, the Buyer will use its reasonable best
efforts to promptly obtain the withdrawal of such order.
d. Buyer shall bear all costs, fees and expenses
involved in the preparation and filing of Registration Statement,
including, without limitation, accounting and auditing fees and
expenses, expenses in connection with the state qualifications
specified above, filing fees, legal counsel fees and expenses and
printing expenses. Sellers, however, shall pay all applicable
transfer taxes and brokerage commissions as a result of any sale by
Sellers.
e. In the event that any of the shares of common
stock of Buyer delivered hereunder are issued by means of the
Registration Statement, Buyer agrees to indemnify and hold harmless
Sellers and their heirs, executors, representatives and assigns (an
"Indemnified Person") from and against any and all claims, demands,
actions, causes of action, losses, costs, damages, liabilities and
expenses, including, without limitation, reasonable legal fees
(hereinafter referred to in the singular as a "claim" and in the
plural as "claims") based upon, arising out of or resulting from
any untrue statement of a material fact contained in the
Registration Statement or any omission to state therein a material
fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not
misleading, except insofar as such claim is based upon, arises out
of or results from information furnished to Buyer in writing by
Sellers for use in connection with the Registration Statement.
Also, in that connection, Sellers agree to indemnify and hold
harmless Buyer, each of its officers and directors (Buyer, its
officers and directors and any such other persons being referred to
collectively as "Indemnified Person") from and against any and all
claims based upon, arising out of or resulting from any untrue
statement of a material fact contained in the Registration
Statement or any failure to state therein a material fact necessary
in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading to the
extent that such claim is based upon, arises out of or results from
information furnished to Buyer in writing by Sellers for use in
connection with the Registration Statement. The indemnification
set forth herein shall be in addition to any liability which Buyer
or Sellers, respectively, may otherwise have to the Indemnified
Person.
f. Within five (5) days after receiving written
notice of any claim in respect of which an Indemnified Person may seek
indemnification under subsection 1.2(e) above, such Indemnified
Person shall submit notice thereof to Buyer or Seller, as the case
may be (sometimes referred to as an "Indemnifying Person"). The
failure of the Indemnified Person so to notify the Indemnifying
Person of any such claim shall not relieve the Indemnifying Person
from any
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AGREEMENT OF SALE
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liability it may have hereunder except to the extent that
(i) such liability was caused or increased by such omission, or
(ii) the ability of the Indemnifying Person to reduce such
liability was adversely affected by such omission. The Indemnified
Person and the Indemnifying Person shall cooperate with, and
assist, one another in the defense of any claim and any action,
suit or proceeding arising in connection therewith; provided,
however, that the Indemnifying Person shall have the right to
investigate and defend any claim and the Indemnified Person shall
have the right to employ separate counsel and to participate in the
defense of any claim, but the fees and expenses of such counsel
shall not be at the expense of the Indemnifying Person. No
settlement of any claim for indemnification under this Section
shall be made without the consent of the Indemnifying Person.
g. In the event that Buyer is unable to complete the
Registration Statement and list the stock on NASDAQ by the above
date, Sellers may, at their sole option, require Buyer to convey
back to Sellers their respective shares in MVAK in exchange for the
shares in Buyer. In the event that Buyer fails to immediately
return or convey such shares after receipt of Sellers' demand,
Sellers may obtain injunctive relief on a summary basis or elect to
seek monetary damages. The parties agree that such damages shall
be liquidated in the amount of one million nine hundred twenty-two
thousand one hundred forty-nine dollars (1,922,149.00).
h. Restrictions on Buyer. From and after the date
hereof, and continuing through such date when the Registration
Statement has been completed, Buyer shall comply with the following
covenants and restrictions:
i. Buyer shall not sell, transfer, mortgage,
pledge or otherwise dispose of the Acquiree stock or otherwise
subject the Acquiree stock to any lien or other encumbrance.
ii. Buyer shall not cause or permit Acquiree to
sell, transfer, mortgage, pledge or otherwise dispose of any assets
of Acquiree or otherwise subject any of Acquiree's assets to any
lien or other encumbrance other than in the ordinary course of
business.
iii. Buyer shall cause or permit Acquiree to operate
its business in the ordinary course in accordance with past
business practices and in accordance with all applicable laws,
rules and regulations.
iv. Buyer shall not cause or permit Acquiree to
issue any additional shares of its capital stock.
v. Buyer shall not cause or permit Acquiree to
incur any indebtedness other than in the ordinary course of
business or as reasonably necessary.
vi. Buyer shall not cause or permit Acquiree to
issue any dividends, profit distributions, salary bonuses or other
compensation to Buyer or any principal, officer, director, employee
or agent of Buyer.
vii. Buyer shall not cause or permit Acquiree to
expend, utilize or dissipate any of its cash assets other than in
the ordinary course of business.
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AGREEMENT OF SALE
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viii. Buyer shall not cause or permit Acquiree to
terminate the employment of any facility manager other than for
good cause.
ix. Buyer shall not terminate or replace any member
of the Board of Directors other than for good cause.
x. Buyer shall not cause or permit the Board of
Directors to engage anyone other than Debra S. Bogart as corporate
president other than for good cause.
1.3 At the Closing Date, Sellers will deliver a certificate
representing the Sale Shares duly endorsed so as to make Buyer the
sole holder thereof, free and clear of all claims and encumbrances.
The Sale Shares are not registered under the Securities Act of 1933
as amended (the "Act"). The Sale Shares will be subject to a usual
and appropriate stop transfer order on the books and records of
Acquiree's transfer agent pertaining to securities not registered
under the Act. The certificate for the Sale Shares delivered shall
bear on its face the following restrictive legend:
"No sale, offer to sell or transfer of the shares
represented by this certificate shall be made unless a
registration statement under the Securities Act of 1993,
as amended, with respect to such shares is then in effect
or an exemption from the registration requirements of
such Act is then, in fact, applicable to such shares".
2. LOAN GUARANTEES
Ronald M. Kaplan has personally guaranteed certain loans as
described in Exhibit 2. Buyer hereby agrees to use reasonable
efforts to have said guarantees released on or prior to August 31,
1997. If the appropriate lending institutions do not agree to
release any or all of the personal guarantees, Buyer hereby agrees
to indemnify, and cause MVAK to indemnify, Ronald M. Kaplan in the
event of a default on any of the obligations created by the loans.
2.1 Buyer agrees to indemnify and hold harmless Ronald M.
Kaplan and his heirs, executors, representatives and assigns (an
"Indemnified Person") from and against any and all claims, demands,
actions, causes of action, losses, costs, damages, liabilities and
expenses, including, without limitation, reasonable legal fees
(hereinafter referred to in the singular as a "claim" and in the
plural as "claims") based upon, arising out of or resulting from
any default of the certain loans. The indemnification set forth
herein shall be in addition to any liability which Buyer may
otherwise have to the Indemnified Person.
2.2 Within five (5) days after receiving written notice of
any claim in respect of which an Indemnified Person may seek
indemnification under subsection 2.1 above, such Indemnified Person
shall submit notice thereof to Ronald M. Kaplan, as the case may be
(sometimes referred to as an "Indemnifying Person"). The failure
of the Indemnified Person so to notify the Indemnifying Person of
any such claim shall not relieve the Indemnifying Person from any
liability it may have hereunder except to the extent that (i) such
liability was caused or increased by such omission, or (ii) the
ability of the Indemnifying Person to reduce such liability was
adversely affected by such omission. The Indemnified Person and
the Indemnifying Person shall cooperate with, and assist, one
another in the defense of any claim and any action, suit or
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AGREEMENT OF SALE
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proceeding arising in connection therewith; provided, however, that
the Indemnifying Person shall have the right to investigate and
defend any claim as the Indemnified Person shall have the right to
employ separate counsel and to participate in the defense of any
claim, but the fees and expenses of such counsel shall not be at
the expense of the Indemnifying Person. No settlement of any claim
for indemnification under this Section 2 shall be made without the
consent of the Indemnifying Person.
3. REPRESENTATIONS OF SELLERS AND ACQUIREE
Sellers hereby represent and warrant, to the extent of the
facts known to Sellers and Acquiree, that, effective this date and
the Closing Date, the representations listed below are true and
correct.
3.1 Sellers are the sole owners of four million eight hundred
twenty-eight thousand five hundred and seventy-one (4,828,571) of
the common shares issued and outstanding Shares of Acquiree and one
million nine hundred thirty-one thousand four hundred twenty-nine
(1,931,429) of preferred convertible shares issued and outstanding;
such Acquiree Shares are free from claims, liens or other
encumbrances; and Sellers has the unqualified right to transfer and
dispose of such shares. Each Seller makes this representation only
with respect to the Acquiree shares owned by the applicable Seller.
The Acquiree is the owner of the remaining authorized but unissued
sharer.
3.2 The Sale Shares constitute validly issued shares of
Acquiree fully-paid and nonassessable.
3.3 Annexed hereto as Exhibit 3.3 is the unaudited financial
statements dated March 31, 1995 and March 31, 1996 of the Acquiree
and the unaudited financial statements for the nine (9) months
ended December 31, 1996. The financial statements in Exhibit 3.3
are substantially correct and complete and have been prepared in
conformity with generally accepted accounting principles applied on
a consistent basis. The financial statements present fairly the
financial condition of Acquiree of the respective dates of said
balance sheets and the results of operations for the respective
periods indicated in said statements of income and retained
earnings and, in the case of each such interim statement, is
subject to year-end adjustments consistent with past practice.
3.4 Acquiree has applied for and received from the State of
New Jersey a Determination of Non-Applicability. Such letter is
attached hereto as Exhibit 3.4.
3.5 To the best of Sellers' knowledge, there are no actions,
suits, proceedings or investigations (whether or not purportedly on
behalf of Acquiree) pending or threatened against or affecting
Acquiree, at law, or in equity or admiralty, or before or by any
federal, state, municipal or other governmental department,
commission, board, bureau agency or instrumentality, domestic or
foreign, which involve the likelihood of any adverse judgment of
liability, not fully covered by insurance, in excess of five
thousand dollars ($5,000.00) in any one case or ten thousand
dollars ($10,000.00) in the aggregate, or which may result in any
material adverse change aside from the monetary adverse judgment or
liability) in the business, operations, properties or assets or in
the condition, financial or otherwise, of Acquiree, except
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AGREEMENT OF SALE
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in each as listed and described in Exhibit 3.5 annexed hereto. To the best
of Sellers' knowledge, Acquiree is not in default with respect to any order,
writ, injunction or decree of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign.
3.6 Acquiree has, to its best knowledge, complied in all
material respects with all laws, regulations and judicial or
administrative tribunal orders applicable to its business of which
it is aware except as described in Exhibit 3.6.
3.7 All federal, state and local tax returns required to be
filed by Acquiree have been duly filed. Federal income tax returns
of Acquiree have been submitted to the Internal Revenue Service
("IRS") for all past fiscal years through the calendar year ended
in 1996. All deficiencies by any taxing authority have either been
paid or settled or are included in the amounts for accrued taxes
shown on the respective balance sheet (part of Exhibit 3.3 annexed
hereto). Acquiree has satisfied the obligation underlying the tax
lien which has been filed by the IRS. A copy of the Release of
Lien is attached hereto as Exhibit 3.7.
3.8 Acquiree and Seller agree that any and all tax
deficiencies disclosed on the balance sheet will be paid in the
normal course of business.
3.9 Since the date of the balance sheet, there has not
occurred:
a. any material and adverse change in the financial
condition or operations of Acquiree;
b. any damage, destruction or loss to or of any of the
material assets or properties owned or leased by Acquiree;
c. the creation or attachment of any lien against any
of the currently issued and distributed common stock of Acquiree
(each Seller makes this representation only with respect to the
Acquiree shares owned by the applicable Seller);
d. any waiver, release, discharge, transfer or
cancellation by Acquiree of any rights or claims of material value;
e. any issuance by Acquiree of any securities or any
merger or consolidation of Acquiree with any other person or any
acquisition by Acquiree of the business of any other person;
f. any incurrence, assumption or guarantee by Acquiree
of any indebtedness or liability other than in the ordinary course
of business;
g. any declaration, setting aside or payment by
Acquiree of any dividends on, or any other distribution with
respect to, any capital stock of Acquiree or any repurchase,
redemption or other acquisition of any capital stock of Acquiree;
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AGREEMENT OF SALE
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h. (i) any payment of any bonus, profit sharing,
pension or similar payment or arrangement or special compensation
to any employee of Acquiree, except in the ordinary course of the
business of Acquiree, (ii) any increase in the compensation payable
or to become payable to any employee of Acquiree; or
3.10 Except as set forth in the documents listed or referred
to in Exhibits hereto, the execution and carrying out of this
Agreement will not conflict with, or result in any breach of any of
the terms, or create a charge or encumbrance upon any of the
properties or assets, or outstanding stock of Acquiree pursuant to
any corporate charter, bylaw, indenture, mortgage or lease to which
Acquiree or any of its stockholders is a party or by which it is
bound. Each Seller makes this representation only with respect to
the Acquiree shares owned by the applicable Seller and such facts
which pertain to the applicable Seller. The execution and carrying
out of this Agreement will not violate any provision of law.
3.11 To the best knowledge of the Sellers and Acquiree, none
of the written information and documents which have been or will be
furnished by Acquiree or by any representatives of Acquiree to
Buyer or any of the representatives of Buyer in connection with the
transaction contemplated by this Agreement contains or will
contain, as the case may be, any untrue statement of a material
fact, or omits or will omit to state a material fact necessary in
order to make the statements therein not misleading in light of the
circumstances in which made. To the knowledge of Acquiree,
Acquiree has disclosed to Buyer as the purchaser of the Sale Shares
all material information relating to Acquiree and its activities as
currently conducted.
3.12 The representations and warranties made hereinabove in
this Section 3 will be correct in all material respects on and as
of the Closing Date with the same force and effect as though such
representations and warranties had been made on the Closing Date.
3.13 The Acquiree is authorized to issue ten million
(10,000,000) shares of common stock, $-0- par value, of which four
million eight hundred twenty-eight thousand five hundred seventy-
one (4,828,571) shares are issued and outstanding and five million
(5,000,000) shares of preferred convertible of $-0- par value of
which one million nine hundred thirty-one thousand four hundred
twenty-nine (1,931,429) are issued and outstanding. Acquiree has
two classes of capital stock duly authorized, validly issued and
are fully paid and nonassessable with no personal liability
attaching to the ownership thereof. There are not outstanding
convertible securities, warrants, options or commitments of any
nature which may cause authorized but unissued shares to be issued
to any person.
3.14 Organization of Acquiree. Acquiree is a corporation duly
organized, validly existing and in good standing under the laws of
the State of New Jersey, with all requisite power and authority to
own its properties and to carry on its business as now conducted.
3.15 Officers and Directors. The present officers and
directors of Acquiree are as follows:
Officers: President Ronald M. Kaplan
Vice President Frank J. Giacona
Vice President Alan S. Kaplan
Secretary Michelle A. Metropolis
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AGREEMENT OF SALE
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Directors: Ronald M. Kaplan
Frank J. Giacona
Alan S. Kaplan
John E. Fox, Edelson Technology Partners
Harry Edelson, Edelson Technology Partners
3.16 Other Agreements. Acquiree is a party to no material
agreement (written or verbal) except (i) as disclosed in this
Agreement, (ii) orders of merchandise in normal quantities for use
in Acquiree's business, (iii) Buyer shall cause Acquiree to pay
those legal expenses incurred on behalf of Frank J. Giacona,
individually, and MVAK in conjunction with the negotiation and
execution of the Employment Agreement and this Agreement
specifically, and (iv) as set forth in attached Exhibit 3.16.
3.17 Insurance Policies. Acquiree has delivered to Buyer
true, correct and complete copies of all policies of fire,
liability and other forms of insurance now in force with respect to
Acquiree and its assets, as listed in Exhibit 3.17. All premiums
shall have been paid in the ordinary course of business and all
such policies are in effect and will remain in effect through the
Closing Date.
3.18 Relationship with Competitors. Seller does not own or
have a material beneficial interest and has not owned or had a
beneficial interest within the past three (3) years, directly or
indirectly, in any corporation, firm, association, partnership or
proprietorship that (i) is similar to or a competitor of Acquiree,
(ii) is a customer or supplier of Acquiree, or (iii) has any
existing contractual relationship with Acquiree.
3.19 Employees. Exhibit 3.19 lists all employees of Acquiree
and states the current rate of compensation payable to each.
Acquiree is not a party to any union contract, pension or profit-
sharing plan or any other agreement providing employee benefits
except health insurance plans as listed.
3.20 Licenses. No license or permit is required to operate
Acquiree's business.
3.21 Warranty. Acquiree represents and warrants to the best
of its knowledge that, as of the Closing Date, there are no pending
or outstanding material warranty claims associated with the sale of
products.
4. REPRESENTATIONS BY BUYER
Buyer warrants and represents, to the extent of the facts
known to Buyer, that, effective this date and the Closing Date, the
representations listed below are true and correct.
4.1 Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Missouri.
4.2 The Board of Directors of Buyer have duly approved this
Agreement.
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AGREEMENT OF SALE
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4.3 The Buyer's restricted common shares deliverable pursuant
to this Agreement shall be validly issued and outstanding, fully
paid and nonassessable.
4.4 The authorized capital stock of Buyer consists of twenty
million (20,000,000) shares of Common Stock, $.001 par value, five
million seven hundred ninety-nine thousand four hundred sixty-nine
(5,799,469) of which have been validly issued and are outstanding
and five million three hundred ninety-one thousand three hundred
thirty-eight (5,391,338) of those are freely tradable without
restriction or further registration under the Securities Act of
1933 and listed on the NASDAQ National Market System.
4.5 Annexed hereto as Exhibit 4.5 is the unaudited financial
statements dated September 30, 1996. The financial statements in
Exhibit 4.5 are substantially correct and complete and have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis. The financial statements
present fairly the financial condition of Buyer as of the
respective dates of said balance sheets and the results of
operations for the respective periods indicated in said statements
of income and retained earnings and, in the case of each such
interim statement, is subject to year-end adjustments consistent
with past practice.
4.6 To the best of Buyer's knowledge, there are no actions,
suits, proceedings or investigations (whether or not purportedly on
behalf of Buyer) pending or threatened against or affecting Buyer
at law or in equity or admiralty or before or by any federal,
state, municipal or other governmental department, commission,
board, bureau agency or instrumentality, domestic or foreign, which
involve the likelihood of any adverse judgment of liability, not
fully covered by insurance, in excess of five thousand dollars
($5,000.00) in any one case or ten thousand dollars ($10,000.00) in
the aggregate, or which may result in any material adverse change
aside from the monetary adverse judgment or liability, in the
business, operations, properties or assets or in the condition,
financial or otherwise, of Buyer, except in each as listed and
described in Exhibit 4.6 annexed hereto. To the best of Buyer's
knowledge, Buyer is not in default with respect to any order, writ,
injunction or decree of any court or federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.
4.7 Buyer has complied in all material respects with all
laws, regulations and judicial or administrative tribunal orders
applicable to its business of which it is aware.
4.8 All federal, state and local tax returns required to be
filed by Buyer have been duly filed. Federal income tax returns of
Buyer have been submitted to the IRS for all past fiscal years
through the fiscal year ended in 1995. All deficiencies proposed
by any taxing authority have either been paid or settled or are
included in the amounts for accrued taxes shown on the respective
balance (part of Exhibit 4.5 annexed hereto).
4.9 Since the date of the balance sheet, there has not
occurred:
a. any material and adverse change in the financial
condition or operations of Buyer;
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AGREEMENT OF SALE
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b. any damage, destruction or loss to or of any of the
material assets or properties owned or leased by Buyer;
c. the creation or attachment of any lien against any
of the currently issued and distributed common stock of Buyer;
d. any waiver, release, discharge, transfer or
cancellation by Buyer of any rights or claims of material value;
e. any issuance by Buyer of any securities or any
merger or consolidation of Buyer with any other person or any
acquisition by Buyer of the business of any other person;
f. any incurrence, assumption or guarantee by Buyer of
any indebtedness or liability other than in the ordinary course of
business;
g. any declaration, setting aside or payment by Buyer
of any dividends on, or any other distribution with respect to, any
capital stock of Buyer or any repurchase, redemption or other
acquisition of any capital stock of Buyer;
h. (i) any payment of any bonus, profit sharing,
pension or similar payment or arrangement or special compensation
to any employee of Buyer, except in the ordinary course of the
administration of Buyer, (ii) any increase in the compensation
payable or to become payable to any employee of Buyer; or
4.10 Except as set forth in the documents listed or referred
to in Exhibits hereto, the execution and carrying out of this
Agreement will not conflict with, or result in any breach of any of
the terms, or create a charge or encumbrance upon any of the
properties or assets, or outstanding stock of Buyer pursuant to any
corporate charter, bylaw, indenture, mortgage or lease to which
Buyer or any of its stockholders is a party or by which it is
bound. The execution and carrying out of this Agreement will not
violate any provision of law.
4.11 None of the written information and documents which have
been or will be furnished by Buyer or any representatives of Buyer
to Sellers or any of the representatives of Buyer in connection
with the transactions contemplated by this Agreement contains or
will contain, as the case may be, any untrue statement of a
material fact, or omits or will omit to state a material fact
necessary in order to make the statements therein not misleading in
light of the circumstances in which made. To the knowledge of
Buyer, Buyer has disclosed to Sellers as the purchaser of the
common stock of Buyer all material information relating to Buyer
and its activities as currently conducted.
4.12 The representations and warranties made hereinabove in
this Section 4 will be correct in all material respects on and as
of the Closing Date with the same force and effect as though such
representations and warranties had been made on the Closing Date.
4.13 Buyer is fully aware of the condition and prospects,
financial and otherwise, of the Acquiree, having been supplied with
such financial and other data relating to the Acquiree
<PAGE> 12
AGREEMENT OF SALE
Page 11
as Buyer considered necessary and advisable to enable it to form a decision
concerning the purchase herein provided.
4.14 Buyer is fully aware that the Sale Shares, when
delivered, will not have been registered under the Act; that
accordingly no sale, offer to sell or transfer of the Sale Shares
shall be made unless a registration statement under the Act with
respect to the Sale Shares is then in effect or an exemption from
the registration requirements of the Act is then, in fact,
applicable to the Sale Shares or, in the opinion of Acquiree's
counsel, registration is not required.
4.15 Buyer has been fully advised by the Sellers that the
Sellers will sell the Sale Shares to Buyer without registration
under the Act on the basis of the statutory exemption in Section
4(2) of the Act relating to transactions not involving a public
offering and that Sellers' reliance upon the statutory exemption is
based in large part upon Buyer's representations made in this
Agreement.
4.16 Buyer is acquiring the Sale Shares for investment for its
own account and not with a view to resell or otherwise distribute
the Sale Shares. In making the foregoing representations, Buyer
understand that, in the view of the Securities and Exchange
Commission, the statutory exemption under Section 4(2) would not be
available if, notwithstanding Buyer's representations, it had in
mind merely acquiring the Sale Shares for resale upon the
occurrence or nonoccurrence of some predetermined event.
4.17 Buyer has the full right, power and authority to purchase
the Sale Shares in accordance with the terms of this Agreement and
otherwise to consummate and close the transaction provided for in
this Agreement in the manner and upon the terms herein specified.
4.18 Buyer is acquiring the Sale Shares for the purpose of
controlling Acquiree.
4.19 Buyer represents that copies of all documents filed with
the Securities and Exchange Commission for the past one (1) year
period have been provided to Sellers and that all representations
contained therein remain true and complete.
5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES INDEMNIFICATION/OPPORTUNITY
TO DEFEND
5.1 The parties shall be entitled to rely upon the
representations and warranties set forth in this Agreement and the
obligations of the parties with respect thereto shall survive the
Closing whether or not either party relied on the representations
and warranties or will have knowledge, acquired after the date
hereof, from its own investigation or otherwise of any fact at
variance with or any breach of any such representation or warranty.
a. The Sellers will indemnify and hold harmless the
Buyer against and in respect of any damages (including, without
limitation, reasonable attorney's fees) sustained by the Buyer
based upon, arising out of or resulting from a breach of the
representations and warranties in paragraph 3 of this Agreement.
<PAGE> 13
AGREEMENT OF SALE
Page 12
b. The Buyer shall indemnify and hold harmless the
Sellers against and in respect of any damages (including, without
limitation, reasonable attorney's fees) sustained by the Sellers
based upon, arising out of or resulting from a breach of the
representations and warranties in paragraph 4 of this Agreement.
6. CLOSING DATE
The Closing Date herein referred to shall be upon such date as
the parties hereto may mutually agree upon with all transactions
being deemed effective as of January 31, 1997. At the Closing,
Buyer will be provided with and accept delivery of the Sale Shares,
and in connection therewith, and will make payment of all sums due
to Seller. Certain closing documents may be delivered subsequent
to the Closing Date upon the mutual agreement of the parties
hereto.
7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLERS
All obligations of the Sellers under this Agreement are
subject to the fulfillment, prior to or as of the Closing Date, of
each of the following conditions:
7.1 The representations and warranties by Buyer contained in
this Agreement or in any certificate or document delivered to
Seller pursuant to the provisions hereof shall be true in all
material respects at and as of the time of Closing as though such
representations and warranties were made at and as of such time.
7.2 Buyer shall have performed and complied with all
covenants, agreements and conditions required by this Agreement to
be performed or complied with by him prior to or at the Closing
including the payment of the Price in accordance with the terms
hereof.
7.3 Sellers shall have obtained the resignations of all
present officers and directors of, and shall appoint such new
officers and directors, of Acquiree as Buyer shall direct, subject,
however, to the requirement that the resignations of such present
officers and directors shall take effect, and such new officers and
directors shall take office, only at such time following the
Closing, as such taking of office shall be lawful and proper
following compliance by Acquiree of all requirements therefor under
the Securities Exchange Act of 1934.
7.4 All instruments and documents delivered to Sellers
pursuant to the provisions hereof shall be reasonably satisfactory
to legal counsel for Sellers.
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
All obligations of Buyer under this Agreement are subject to
the fulfillment, prior to the, or at the Closing on, the Closing
Date, of each of the following conditions:
8.1 A financial review of Acquiree's books and records to
confirm that two (2) years of audited financials can be obtained.
<PAGE> 14
AGREEMENT OF SALE
Page 13
8.2 The representations and warranties by Sellers contained
in this Agreement or in any certificate or document delivered to
Buyer pursuant to the provisions hereof shall be true at and as of
the time of Closing as though such representations and warranties
were made at and as of such time.
8.3 Acquiree and Sellers shall have performed and complied
with all other covenants, agreement and conditions required by this
Agreement to be performed or complied with by them prior to or at
the Closing.
9. DOCUMENTS AT CLOSING
At the Closing, the following transactions shall occur, all of
such transactions being deemed to occur simultaneously:
9.1 Sellers and Acquiree, as the case may be, will deliver,
or cause to be delivered, to Buyer the following:
a. stock certificates for the Sale Shares, duly
endorsed in blank with appropriate signature guarantees;
b. all records of Acquiree, including, without
limitation, such books and records, charter documents, certificates
of good standing from each state in which Acquiree is currently
operating, as may reasonably be available to Sellers and requested
by Buyer;
c. certified copies of resolutions by Sellers' and
Acquiree's boards of directors of executive committees thereof,
thereunto duly authorized, authorizing this transaction;
d. resignations of the present officers and directors
of Acquiree to take effect;
e. current financial statements prepared by Acquiree as
of December 31, 1996, in addition to those provided by Exhibit 3.3
of Acquiree showing no assets or debts of any substance not
otherwise disclosed, except for such sums as may be owed to
Acquiree's transfer agent and certain nominal state taxes;
f. such other instruments, documents and certificates,
if any, as are required to be delivered pursuant to the provisions
of this Agreement or which may be reasonably requested in
furtherance of the provisions of this Agreement.
g. an opinion of counsel, to Buyer, as to the matters
set forth in sections 4.1, 4.2, 4.3 and 4.4 of this Agreement.
9.2 Buyer will deliver or cause to be delivered to Seller
such other instruments and documents as are required to be
delivered pursuant to the provisions of this Agreement or which may
be reasonably requested in furtherance of the provisions of this
Agreement.
10. MISCELLANEOUS
<PAGE> 15
AGREEMENT OF SALE
Page 14
10.1 The negotiation and execution of an Employment Agreements
with Debra S. Bogart and Frank J. Giacona on terms and conditions
agreeable to the parties thereto providing for a base salary,
benefits and mutually agreed incentive compensation based on
performance measures. Said Employment Agreements are attached as
Exhibit 10.1.
10.2 The negotiation and execution of a Consulting Agreement
with Ronald M. Kaplan on terms and conditions agreeable to the
parties thereto providing for a base salary, benefits and mutually
agreed incentive compensation based on performance measures. Said
Consulting Agreement is attached as Exhibit 10.2.
10.3 Unless otherwise expressly provided herein, the
respective representations of Sellers and Buyer contained herein or
in any certificates delivered prior to or at Closing shall survive
for a period of twelve (12) months from the Closing Date.
10.4 Broker's Accomplishment Fee. Buyer shall be solely
responsible for the payment in shares of ACT with a value of
ninety-three thousand dollars ($93,000.00) as accomplishment fees
due Maple Business Consultants, Inc. The parties represent that
they have not dealt with any broker other than Maple Business
Consultants, Inc. and shall indemnify and hold the other party
harmless in the event of a breach of the foregoing representation.
Such representation shall survive the Closing and, further, shall
not be subject to the time limitation set forth in Section 10.3
hereinabove.
10.5 Further Assurances. At any time, and from time to time,
after the effective date, each party will execute such additional
instruments and take such action as may be reasonably requested by
the other party to confirm or perfect title to any property
transferred hereunder or otherwise to carry out the intent and
purposes of this Agreement.
10.6 Waiver. Any failure on the part of any party hereto to
comply with any of its obligations, agreements or conditions
hereunder may be waived only in writing by the party to whom such
compliance is owed.
10.7 Arbitration. Any and all disputes and differences
between or among the parties with respect to the construction or
performance of the terms of this Agreement which cannot be resolved
amicably shall be resolved by arbitration before the American
Arbitration Association in accordance with its rule then obtaining
sitting in New Jersey.
10.8 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given if
delivered in person or if sent by prepaid first class registered or
certified mail, return receipt requested, fax or recognized courier
then upon receipt thereof to the following addresses:
To Sellers: Ronald M. Kaplan
104 Fairway Avenue
Verona, NJ 07044
Frank J. Giacona
6904 Windstream Terrace
<PAGE> 16
AGREEMENT OF SALE
Page 15
Orlando, FL 32818
Alan S. Kaplan
178 Boulevard
Mountain Lake, NJ 07046
John E. Fox
Edelson Technology Partners
Whiteweld Centre
300 Tice Boulevard
Woodcliff Lake, NJ 07675
with copies to: Stephen Urbinato, Esquire
200 Executive Drive
Suite 200
West Orange, NJ 07052
(Counsel to Acquiree)
To Acquiree: MVAK Technologies, Inc.
299-A Ridgedale Avenue
East Hanover, NJ 07936
To Buyer: Applied Cellular Technology, Inc.
Nixa Professional Center
Highway 160 & CC, Suite 3
Nixa, MO 65714
with copies to: Merra, Kanakis, Creme & Mellor, P.C.
60 Main Street
Nashua, NH 03060
10.8 Headings. The section and subsection headings in this
Agreement are inserted for convenience only and shall not affect in
any way the meaning or interpretation of this Agreement.
10.9 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument.
10.10 Governing Law. This Agreement shall be governed by
the laws of the State of New Jersey.
10.11 Binding Effect. This Agreement shall be binding
upon the parties hereto and inure to the benefit of the parties,
their respective heirs, administrators, executors, successors and
assigns.
<PAGE> 17
AGREEMENT OF SALE
Page 16
10.12 Entire Agreement. This Agreement is the entire
agreement of the parties covering everything agreed upon or
understood in the transaction. There are no oral promises,
conditions, representations, understandings, interpretations or
terms of any kind as conditions or inducements to the execution
hereof.
10.13 Severability. If any part of this Agreement is
deemed to be unenforceable the balance of this Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement the
day and year first above written.
SELLERS:
------------------------------------
Ronald M. Kaplan
------------------------------------
Frank J. Giacona
------------------------------------
Alan S. Kaplan
Edelson Technology Partners
By:---------------------------------
Its duly authorized -------------
ACQUIREE:
MVAK Technologies, Inc.
By:---------------------------------
Its duly authorized ------------
BUYER:
Applied Cellular Technology, Inc.
By:---------------------------------
Its duly authorized ------------
<PAGE> 18
EXHIBIT 2
Loan Guarantees
Attached
<PAGE> 19
Thomas J. Powell
Vice President
Fleet
Fleet Bank
10 Exchange Place
Jersey City, NJ 07302
201-547-2624
Fax 201-547-2620
February 6, 1997
Mr. Ronald Kaplan
MVAK Technologies
299-4 Ridgedale Avenue
East Hanover, NJ 07936
RE: Loan #0112301
Dear Ron:
Pursuant to your request, the following represents the balance due on your
company's above referenced loan.
<TABLE>
<S> <C>
Principal Balance $22,914.89
Interest through 2/14/97 58.90
----------
Total $22,973.79
Per Diem $5.89
</TABLE>
If anything further is needed contact me at your convenience.
Very truly yours,
/s/ Thomas J. Powell
Thomas J. Powell
Vice President
<PAGE> 20
[LOGO] PENN FEDERAL
SAVINGS BANK
522 Eagle Rock Avenue, West Orange, New Jersey 07052-2989 (201) 669-7366
LOAN PAYOFF QUOTE
February 6, 1997 CORRECTED COPY
Ronald and Sandra Kaplan
106 Fairway Avenue
Verone, NJ 07044
REF LOAN #11451808988 MORTGAGOR: KAPLAN
PROPERTY ADDRESS:
Below please find the payoff quote for payment in full of the above loan:
<TABLE>
<S> <C>
PRINCIPAL BALANCE AS OF LAST PAYMENT $ 153,222.25
ACCRUED INTEREST THROUGH 02/10/97 1,430.42
FAX FEE 10.00
TOTAL AMOUNT REQUIRED $ 154,662.67
- ---------------------------------------------------------------------------------------
Add $47.65 per day for the $ --------- added per diem
number of days between 02/10/97
through the day funds are
received by Penn Federal.
$ --------- Total amount
FOR REMITTER USE ONLY
- ---------------------------------------------------------------------------------------
</TABLE>
This quote expires 30 days from issued date. All updated requests must be in
writing at least 48 hrs. in advance.
Currently the account was due for 1/20/97. The last payment received was
1/16/97. If Penn Federal is to receive payment after the 16TH of the month
and that month's payment was not made, please add a late charge of $27.00
to the total payoff amount.
PLEASE DO NOT ADVISE YOUR CLIENT OF AN ESCROW REFUND. ANY POSITIVE BALANCE
IS AUTOMATICALLY DEDUCTED FROM THE PRINCIPAL BALANCE.
NOTE: The above balance is subject to change for advances, uncollected items
- -----
and re-audit of account to date of repayment.
Please read carefully and follow the important information and payoff
- ---------------------------------------------------------------------
instructions which are attached hereto.
- ---------------------------------------
Sincerely,
Ana Moura
Mortgage Payoff Dept.
Organized 1941
FDIC
INSURED
<PAGE> 21
EXHIBIT 3.3
Financial Statements
Acquiree
Attached
<PAGE> 22
<TABLE>
MVAK TECHNOLOGIES, INC. Page 1
Balance Sheet
FINAL
December 31, 1996
<S> <C> <C>
ASSETS:
Current Assets:
CASH $15,978.75
CASH ON HAND 950.00
ACCOUNTS RECEIVABLE 396,793.79
EMPLOYEE RECEIVABLES 1,566.53
OTHER RECEIVABLES 18,649.67
INVENTORY-PARTS 258,849.76
INVENTORY FLUIDS 14,187.29
INVENTORY SUPPLIES 12,879.15
INVENTORY-DRY PUMPS 17,848.67
WORK IN PROCESS 245,245.75
PREPAID INSURANCE 8,981.50
OTHER PREPAID EXPENSES 2,858.86
DEPOSITS 18,412.18
-------------
TOTAL Current Assets $1,013,201.90
Fixed Assets:
LEASEHOLD IMPROVEMENTS 7,986.05
MACHINERY & EQUIPMENT 144,279.62
FURNITURE & FIXTURES 25,451.95
VEHICLES 66,789.69
COMPUTERS 25,049.53
ACCUMULATED DEPRECIATION (193,408.37)
-------------
TOTAL Fixed Assets 76,148.47
---------------
TOTAL ASSETS $1,089,350.37
===============
LIABILITIES:
Current Liabilities:
ACCOUNTS PAYABLE $337,002.78
SALES TAX PAYABLE 489.77
SALARIES PAYABLE 13,953.68
TAXES PAYABLE 4,434.03
SHORT TERM DEBT 34,762.39
S/T LOAN PAYABLE-FLEET BANK 12,500.04
-------------
TOTAL Current Liabilities $403,142.69
Long-Term Liabilities:
LONG TERM DEBT
L/T LOAN-ASSOC COM (TRUCK) 151,480.86
10,676.34
-------------
TOTAL Long-Term Liabilities 162,157.20
Other Liabilities:
DUE (TO)/FROM NEW JERSEY 77,759.69
DUE (TO)/FROM FLORIDA (7,891.42)
DUE (TO)/FROM MASS 121,147.16
DUE To\(FROM) CORP. (191,015.43)
-------------
<PAGE> 23
<CAPTION>
MVAK TECHNOLOGIES, INC. Page 2
Balance Sheet
FINAL
December 31, 1996
<S> <C> <C>
TOTAL Other Liabilities 0.00
---------------
TOTAL LIABILITIES 565,299.89
CAPITAL:
COMMON STOCK 7,000.00
PREFERRED STOCK 800,000.00
CONTRIBUTIONS 250,922.33
RETAINED EARNINGS (586,705.22)
Year-to-Date Earnings 52,833.37
-------------
TOTAL CAPITAL 524,050.48
---------------
TOTAL LIABILITIES & CAPITAL $1,089,350.37
===============
</TABLE>
<PAGE> 24
<TABLE>
MVAK TECHNOLOGIES, INC. Page 1
Income Statement
FINAL
<CAPTION>
9 Months Ended
December 31, 1996
================= ===%===
<S> <C> <C>
Income
SALES EQUIPMENT REBUILDS $1,453,898.00 64.0%
SALES FLUIDS 164,246.58 7.2%
HAZARDOUS WASTE REMOVAL FEE 813.00 0.0%
SALES NEW EQUIPMENT 185,321.20 8.2%
SALES USED EQUIPMENT 314,338.00 13.8%
SALES PARTS 92,467.20 4.1%
SALES RECLAIM 13,135.62 0.6%
SALES FIELD SERVICE 26,769.70 1.2%
SALES VALVES/FILTERS 22,056.59 1.0%
SALES RENTALS 3,453.00 0.2%
FREIGHT COLLECTED 12,739.04 0.6%
------------
TOTAL Income 2,289,237.93 100.8%
------------
Adjustments
SALES ADJUSTMENTS (1,905.16) -0.1%
SALES DISCOUNTS (15,232.34) -0.7%
------------
TOTAL Adjustments (17,137.50) -0.8%
------------
NET INCOME 2,272,100.43 100.0%
------------
Cost of Goods Sold
PARTS REBUILD PURCHASES 467,892.28 20.6%
PARTS REBUILD PURCHASES-I/C'S (8,082.41) -0.4%
FLUID PURCHASES 95,284.08 4.2%
RECLAIM PURCHASES 424.50 0.0%
PARTS RESALE PURCHASES 63,078.13 2.8%
NEW EQUIPMENT RES. PURCHASES 148,001.11 6.5%
USED EQUIPMENT RESALE 134,761.76 5.9%
FIELD SERVICE EXPENSE 2,026.06 0.1%
FOMBLIN RECLAIM EXPENSES 1,353.07 0.1%
VALVE/FILTER PURCHASES 13,079.35 0.6%
INVENTORY INCR/DECR (27,983.24) -1.2%
WORK IN PROCESS INCR/DECR 2,812.44 0.1%
SHOP REPAIR & MAINTENANCE 162.30 0.0%
RENTAL EQUIPMENT EXPENSE 302.47 0.0%
TRUCK EXPENSE 26,532.85 1.2%
SHOP MILEAGE 438.23 0.0%
SHOP PAYROLL 333,810.65 14.7%
SHOP PAYROLL TAXES 34,832.68 1.5%
SHOP EMPLOYEE BENEFITS 16,706.62 0.7%
SHOP WORKMEN'S COMP INSURANCE 9,034.21 0.4%
SHOP SUPPLIES 37,207.08 1.6%
SHOP TOOLS 3,504.51 0.2%
SHOP OTHER EXPENSES 9,263.45 0.4%
SHOP WASTE DISPOSAL 6,539.39 0.3%
FREIGHT EXPENSE CORP 58,775.37 2.6%
PURCHASES DISCOUNTS (4,718.04) -0.2%
------------
<PAGE> 25
<CAPTION>
MVAK TECHNOLOGIES, INC. Page 2
Income Statement
FINAL
9 Months Ended
December 31, 1996
================= ===%===
<S> <C> <C>
TOTAL Cost of Goods Sold 1,425,038.90 62.7%
------------
GROSS PROFIT 847,061.53 37.3%
------------
Expenses
SELLING EXPENSES
SALES PAYROLL 105,116.20 4.6%
SALES COMMISSIONS 27,333.33 1.2%
SALES P/R TAXES 12,621.06 0.6%
SALES EMPLOYEE BENEFITS 7,705.44 0.3%
SALES WORKER'S COMP INSURANCE 884.98 0.0%
SALES TRADE SHOW EXPENSE 8,416.88 0.4%
SALES ADVERTISING 6,114.06 0.3%
SALES AUTO 25.00 0.0%
SALES MILEAGE 1,666.82 0.1%
SALES TRAVEL 673.39 0.0%
SALES MEALS & ENTERTAINMENT 100.25 0.0%
SALES OTHER EXPENSES 3,228.13 0.1%
------------
TOTAL SELLING EXPENSES 173,885.54 7.7%
------------
GENERAL & ADMINISTRATIVE
OFFICE PAYROLL 212,439.56 9.3%
OFFICE PAYROLL TAXES 17,751.90 0.8%
OFFICE EMPLOYEE BENEFITS 28,951.40 1.3%
OFFICE WORKER'S COMP INSUR 1,163.54 0.1%
CORPORATE EXP. 77,200.00 3.4%
RENT 79,382.82 3.5%
UTILITIES 28,131.64 1.2%
TRASH DISPOSAL 2,746.58 0.1%
REPAIRS & MAINTENANCE 7,773.27 0.3%
OFFICE EXPENSES 8,246.70 0.4%
OFFICE AUTO 14,491.34 0.6%
OFFICE MILEAGE 405.50 0.0%
OFFICE TRAVEL 1,868.26 0.1%
OFFICE MEALS & ENTERTAINMENT 978.15 0.0%
DUES & SUBSCRIPTIONS 135.75 0.0%
COMPUTER EXPENSE 2,393.58 0.1%
POSTAGE EXPENSE 3,021.29 0.1%
TELEPHONE EXPENSE 23,517.01 1.0%
INSURANCE SMP 5,951.59 0.3%
INSURANCE VEHICLE 6,781.14 0.3%
INSURANCE OTHER 2,548.64 0.1%
PROFESSIONAL FEES 995.00 0.0%
LEGAL EXPENSE 2,500.00 0.1%
ACCOUNTING EXPENSE 1,125.00 0.0%
PROPERTY TAXES 1,067.60 0.0%
BAD DEBT 21.98 0.0%
BANK CHARGES 2,830.37 0.1%
OFFICE OTHER EXPENSES 4,177.58 0.2%
RESEARCH AND DEVELOPMENT 5,320.49 0.2%
<PAGE> 26
<CAPTION>
MVAK TECHNOLOGIES, INC. Page 3
Income Statement
FINAL
9 Months Ended
December 31, 1996
================= ===%===
<S> <C> <C>
SALES TAX DISCOUNTS (213.36) -0.0%
INTEREST EXPENSE 34,717.64 1.5%
DEPRECIATION EXPENSE 22,509.34 1.0%
STATE\FED. REPORT FEES 150.00 0.0%
FEDERAL TAX PENALTY 42,415.76 1.9%
STATE TAX PENALTY 1,211.15 0.1%
------------
TOTAL GENERAL & ADMINISTRATIVE 644,708.21 28.4%
------------
TOTAL Expenses 818,593.75 36.0%
------------
OPERATING PROFIT 28,467.78 1.3%
------------
Other Income & Expenses
MISCELLANEOUS INCOME/EXPENSE 25,396.59 1.1%
STATE CORPORATE TAXES (1,031.00) -0.0%
------------
TOTAL Other Income & Expenses 24,365.59 1.1%
------------
PROFIT BEFORE TAXES 52,833.37 2.3%
------------
NET PROFIT $52,833.37 2.3%
============
</TABLE>
<PAGE> 27
<TABLE>
MVAK TECHNOLOGIES, INC. Page 1
Balance Sheet
FINAL
March 31, 1996
<S> <C> <C>
ASSETS:
Current Assets:
CASH $923.57
CASH ON HAND 900.00
ACCOUNTS RECEIVABLE 371,892.40
EMPLOYEE RECEIVABLES 1,818.24
INVENTORY-PARTS 266,146.00
INVENTORY FLUIDS 10,954.69
INVENTORY SUPPLIES 10,683.31
WORK IN PROCESS 219,581.26
PREPAID INSURANCE 4,103.65
OTHER PREPAID EXPENSES 1,070.73
DEPOSITS 17,214.18
-------------
TOTAL Current Assets $905,288.03
Fixed Assets:
LEASEHOLD IMPROVEMENTS 7,986.05
MACHINERY & EQUIPMENT 143,729.04
FURNITURE & FIXTURES 25,276.97
VEHICLES 62,865.29
COMPUTERS 21,039.38
ACCUMULATED DEPRECIATION (212,238.86)
-------------
TOTAL Fixed Assets 48,657.87
-------------
TOTAL ASSETS $953,945.90
=============
LIABILITIES:
Current Liabilities:
ACCOUNTS PAYABLE $249,365.08
ACCRUED EXPENSES 2,892.88
SALES TAX PAYABLE 3,588.69
SALARIES PAYABLE 19,153.68
TAXES PAYABLE 12,485.16
SHORT TERM DEBT 406,614.64
S/T LOAN PAYABLE-FLEET BANK 12,500.04
-------------
TOTAL Current Liabilities $706,600.17
Long-Term Liabilities:
LONG TERM DEBT 27,050.95
-------------
TOTAL Long-Term Liabilities 27,050.95
Other Liabilities:
DUE (TO)/FROM NEW JERSEY 461,964.82
DUE (TO)/FROM FLORIDA (170,598.67)
DUE (TO)/FROM MASS 465,777.27
DUE To\(FROM) CORP. (757,143.42)
-------------
TOTAL Other Liabilities 0.00
-------------
<PAGE> 28
<CAPTION>
MVAK TECHNOLOGIES, INC. Page 2
Balance Sheet
FINAL
March 31, 1996
<S> <C> <C>
TOTAL LIABILITIES 733,651.12
CAPITAL:
COMMON STOCK 7,000.00
PREFERRED STOCK 800,000.00
RETAINED EARNINGS (790,962.93)
Year-to-Date Earnings 204,257.71
-------------
TOTAL CAPITAL 220,294.78
-------------
TOTAL LIABILITIES & CAPITAL $953,945.90
=============
</TABLE>
<PAGE> 29
<TABLE>
MVAK TECHNOLOGIES, INC. Page 1
Income Statement
FINAL
<CAPTION>
12 Months Ended
March 31, 1996
================= ===%===
<S> <C> <C>
Income
SALES EQUIPMENT REBUILDS $1,806,582.16 68.3%
SALES FLUIDS 189,508.72 7.2%
HAZARDOUS WASTE REMOVAL FEE 10.00 0.0%
SALES NEW EQUIPMENT 334,782.36 12.7%
SALES USED EQUIPMENT 184,731.50 7.0%
SALES PARTS 93,996.36 3.6%
SALES RECLAIM 34,876.08 1.3%
SALES FIELD SERVICE 20,127.20 0.8%
SALES VALVES/FILTERS 1,087.05 0.0%
SALES RENTALS 15,785.40 0.6%
FREIGHT COLLECTED 12,206.56 0.5%
------------
TOTAL Income 2,693,693.39 101.8%
------------
Adjustments
SALES ADJUSTMENTS (16,583.43) -0.6%
SALES DISCOUNTS (31,203.02) -1.2%
------------
TOTAL Adjustments (47,786.45) -1.8%
------------
NET INCOME 2,645,906.94 100.0%
------------
Cost of Goods Sold
PARTS REBUILD PURCHASES 511,801.30 19.3%
FLUID PURCHASES 91,838.19 3.5%
RECLAIM PURCHASES 1,535.00 0.1%
PARTS RESALE PURCHASES 51,927.51 2.0%
NEW EQUIPMENT RES. PURCHASES 165,018.29 6.2%
USED EQUIPMENT RESALE 101,747.15 3.8%
FIELD SERVICE EXPENSE 2,184.81 0.1%
FOMBLIN RECLAIM EXPENSES 3,380.45 0.1%
VALVE/FILTER PURCHASES 2,340.00 0.1%
INVENTORY INCR/DECR (53,725.95) -2.0%
WORK IN PROCESS INCR/DECR (45,060.68) -1.7%
SHOP REPAIR & MAINTENANCE 3,178.00 0.1%
RENTAL EQUIPMENT EXPENSE (635.57) -0.0%
TRUCK EXPENSE 23,572.12 0.9%
SHOP MILEAGE 980.02 0.0%
SHOP PAYROLL 355,172.12 13.4%
SHOP PAYROLL TAXES 40,085.75 1.5%
SHOP EMPLOYEE BENEFITS 19,952.56 0.8%
SHOP WORKMEN'S COMP INSURANCE 6,989.00 0.3%
SHOP SUPPLIES 41,991.19 1.6%
SHOP TOOLS 5,175.46 0.2%
SHOP OTHER EXPENSES 9,582.72 0.4%
SHOP WASTE DISPOSAL 11,168.81 0.4%
FREIGHT EXPENSE CORP 59,526.71 2.2%
PURCHASES DISCOUNTS (8,523.43) -0.3%
------------
TOTAL Cost of Goods Sold 1,401,201.53 53.0%
------------
<PAGE> 30
<CAPTION>
MVAK TECHNOLOGIES, INC. Page 2
Income Statement
FINAL
12 Months Ended
March 31, 1996
================= ===%===
<S> <C> <C>
GROSS PROFIT 1,244,705.41 47.0%
------------
Expenses
SELLING EXPENSES
SALES PAYROLL 107,670.62 4.1%
SALES COMMISSIONS 37,735.20 1.4%
SALES P/R TAXES 15,006.99 0.6%
SALES EMPLOYEE BENEFITS 6,775.15 0.3%
SALES WORKER'S COMP INSURANCE 931.64 0.0%
SALES TRADE SHOW EXPENSE 9,494.32 0.4%
SALES ADVERTISING 3,814.44 0.1%
SALES AUTO 650.00 0.0%
SALES MILEAGE 2,033.37 0.1%
SALES TRAVEL 2,774.96 0.1%
SALES MEALS & ENTERTAINMENT 844.69 0.0%
SALES OTHER EXPENSES 4,532.77 0.2%
------------
TOTAL SELLING EXPENSES 192,264.15 7.3%
------------
GENERAL & ADMINISTRATIVE
OFFICE PAYROLL 243,372.70 9.2%
OFFICE PAYROLL TAXES 22,690.17 0.9%
OFFICE EMPLOYEE BENEFITS 35,056.42 1.3%
OFFICE WORKER'S COMP INSUR 1,214.31 0.0%
CORPORATE EXP. 247,315.45 9.3%
RENT 102,283.66 3.9%
UTILITIES 38,049.37 1.4%
TRASH DISPOSAL 3,493.51 0.1%
REPAIRS & MAINTENANCE 4,764.52 0.2%
OFFICE EXPENSES 13,522.03 0.5%
OFFICE AUTO 18,891.53 0.7%
OFFICE MILEAGE 305.38 0.0%
OFFICE TRAVEL 3,925.18 0.1%
OFFICE MEALS & ENTERTAINMENT 1,395.92 0.1%
DUES & SUBSCRIPTIONS 407.00 0.0%
COMPUTER EXPENSE 4,974.05 0.2%
POSTAGE EXPENSE 4,473.85 0.2%
TELEPHONE EXPENSE 34,630.26 1.3%
INSURANCE SMP 9,198.63 0.3%
INSURANCE VEHICLE 8,937.78 0.3%
INSURANCE OTHER 3,787.09 0.1%
LEGAL EXPENSE 16,367.84 0.6%
ACCOUNTING EXPENSE (5,233.75) -0.2%
PROPERTY TAXES 1,228.03 0.0%
BANK CHARGES 6,435.54 0.2%
OFFICE OTHER EXPENSES 4,904.77 0.2%
RESEARCH AND DEVELOPMENT 475.00 0.0%
SALES TAX DISCOUNTS (228.73) -0.0%
INTEREST EXPENSE 24,993.95 0.9%
DEPRECIATION EXPENSE 33,013.08 1.2%
STATE\FED. REPORT FEES 25.00 0.0%
<PAGE> 31
<CAPTION>
MVAK TECHNOLOGIES, INC. Page 3
Income Statement
FINAL
12 Months Ended
March 31, 1996
================= ===%===
<S> <C> <C>
FEDERAL TAX PENALTY 21,040.57 0.8%
STATE TAX PENALTY 3,821.71 0.1%
------------
TOTAL GENERAL & ADMINISTRATIVE 909,531.82 34.4%
------------
TOTAL Expenses 1,101,795.97 41.6%
------------
OPERATING PROFIT 142,909.44 5.4%
------------
Other Income & Expenses
MISCELLANEOUS INCOME/EXPENSE 62,048.82 2.3%
MISCELLANEOUS EXPENSE (120.55) -0.0%
STATE CORPORATE TAX (124.00) -0.0%
STATE CORPORATE TAXES (456.00) -0.0%
------------
TOTAL Other Income & Expenses 61,348.27 2.3%
------------
PROFIT BEFORE TAXES 204,257.71 7.7%
------------
NET PROFIT $204,257.71 7.7%
============
</TABLE>
<PAGE> 32
EXHIBIT 3.7
TAX RETURNS
ACQUIREE
Attached
<PAGE> 33
[U.S. FORM 1120]
U.S. Corporation Income Tax Return
1995
MVAK Technologies, Inc.
299-4 Ridgedale Ave.
East Hanover, NJ 07936
1a 2697225
1b 47786
1c 2649439
2 1401201
3 1248238
4
5
6
7
8
9 (6856)
10 55000
11 1296382
12 129360
13 298779
14 4765
15
16 102284
17 1604
18 24994
19
20 5300
21a
21b 5300
22
23 3814
24
25 43978
26 430501
27 1045379
28 251003
29a 421051
29b
29c 421051
30 (170048)
31 None
32a
32b
32c
32d
32e
32f
32g
32h None
33 None
34 None
35 None
36 None
<PAGE> 34
MVAK Technologies, Inc. 22-2416696
SCHEDULE A
1 409644
2 967165
3 422199
4
5 109558
6 1908566
7 507365
8 1401201
9a (i)
(ii) X
(iii)
b
c
d
e No
f No
SCHEDULE C
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
SCHEDULE E
1 Ronald Kaplan ###-##-#### 50 30.8 39360
Frank Giacona ###-##-#### 50 9.9 55000
Michele Metroplis ###-##-#### 100 35000
2 129360
3
4 129360
<PAGE> 35
SCHEDULE K
Yes No
1a
b X
c
2a 7600
b Sales & Repair
c Vacuum Pumps
3 X
4 X
5 X
6 X
7 X
8 X
9 X
10 X
a
b
c
11
12 NONE
13 4
14 X
15 $421051
<PAGE> 36
SCHEDULE L
<TABLE>
<S> <C> <C> <C> <C>
1 900 2328
2a 348445 371388
b 348445 371388
3 409644 507365
4
5
6 5283 6993
7 48787
8
9
10a 301386 260896
b (229348) 72038 (212239) 48657
11a
b
12
13a
b
14 18882 17214
15 903979 953945
16 486823 249365
17 289142 257404
18 95370 38120
19 161710
20 16605 27051
21
22a 800000 800000
b 7000 807000 7000 807000
23
24 (790961) (586705)
25
26
27 903979 953945
</TABLE>
SCHEDULE M-1
<TABLE>
<S> <C>
1 204256
2
3
4
5
a 27714
b
c 1120
24865
2088 55787
6 260043
7
8
a
b 9040
9 9040
10 251003
</TABLE>
SCHEDULE M-2
1 (790961)
2 204256
3
4 (586705)
5
6
7
8 (586705)
<PAGE> 37
<TABLE>
MVAK TECHNOLOGIES, INC. Page 1
Balance Sheet
FINAL
March 31, 1995
<S> <C> <C>
ASSETS:
Current Assets:
CASH ON HAND $900.00
ACCOUNTS RECEIVABLE 348,444.73
EMPLOYEE RECEIVABLES 2,510.00
INVENTORY-PARTS 207,273.64
INVENTORY FLUIDS 16,719.55
INVENTORY SUPPLIES 11,130.00
WORK IN PROCESS 174,520.58
PREPAID INSURANCE 2,344.00
OTHER PREPAID EXPENSES 428.78
DEPOSITS 18,882.35
-------------
TOTAL Current Assets $783,153.63
Fixed Assets:
LEASEHOLD IMPROVEMENTS 18,880.45
MACHINERY & EQUIPMENT 151,071.59
FURNITURE & FIXTURES 52,348.40
VEHICLES 52,900.28
COMPUTERS 21,509.39
ACCUMULATED DEPRECIATION (229,115.08)
-------------
TOTAL Fixed Assets 67,595.03
-------------
Other Assets
OFFICER LOAN RECEIVABLE 48,787.33
-------------
TOTAL Other Assets 48,787.33
-------------
TOTAL ASSETS $899,535.99
=============
LIABILITIES:
Current Liabilities:
ACCOUNTS PAYABLE $486,822.66
ACCRUED EXPENSES 2,452.25
CUSTOMER DEPOSITS 158.00
SALES TAX PAYABLE 4,165.70
SALARIES PAYABLE 19,024.20
TAXES PAYABLE 69,570.52
SHORT TERM DEBT 261,997.59
S/T LOAN PAYABLE-FLEET BANK 12,500.04
-------------
TOTAL Current Liabilities $856,690.96
Long-Term Liabilities:
LONG TERM DEBT 31,249.94
-------------
TOTAL Long-Term Liabilities 31,249.94
Other Liabilities:
DUE (TO)/FROM NEW JERSEY 350,750.22
DUE (TO)/FROM FLORIDA (69,262.51)
DUE (TO)/FROM MASS 254,377.99
<PAGE> 38
<CAPTION>
MVAK TECHNOLOGIES, INC. Page 2
Balance Sheet
FINAL
March 31, 1995
<S> <C> <C>
DUE To\(FROM) CORP. (535,865.70)
-------------
TOTAL Other Liabilities 0.00
-------------
TOTAL LIABILITIES 887,940.90
CAPITAL:
COMMON STOCK 7,000.00
PREFERRED STOCK 800,000.00
RETAINED EARNINGS (780,436.12)
Year-to-Date Earnings (14,968.79)
-------------
TOTAL CAPITAL 11,595.09
-------------
TOTAL LIABILITIES & CAPITAL $899,535.99
=============
</TABLE>
<PAGE> 39
<TABLE>
Jan 30, 1997 MVAK TECHNOLOGIES, INC. Page 1
2:52 pm Income Statement
FINAL
<CAPTION>
12 Months Ended
March 31, 1995
============ ===%===
<S> <C> <C>
Income
SALES EQUIPMENT REBUILDS $1,800,842.47 77.5%
SALES FLUIDS 181,452.07 7.8%
SALES NEW EQUIPMENT 134,126.75 5.8%
SALES USED EQUIPMENT 68,082.35 2.9%
SALES PARTS 78,221.09 3.4%
SALES RECLAIM 32,796.48 1.4%
SALES FIELD SERVICE 30,434.72 1.3%
SALES VALVES/FILTERS 2,199.86 0.1%
SALES RENTALS 38,280.62 1.6%
FREIGHT COLLECTED 8,745.57 0.4%
------------
TOTAL Income 2,375,181.98 102.2%
------------
Adjustments
SALES ADJUSTMENTS (11,398.81) -0.5%
SALES DISCOUNTS (39,606.23) -1.7%
------------
TOTAL Adjustments (51,005.04) -2.2%
------------
NET INCOME 2,324,176.94 100.0%
------------
Cost of Goods Sold
PARTS REBUILD PURCHASES 598,586.42 25.8%
FLUID PURCHASES 81,587.24 3.5%
RECLAIM PURCHASES 4,282.72 0.2%
PARTS RESALE PURCHASES 55,745.90 2.4%
NEW EQUIPMENT RES. PURCHASES 51,813.72 2.2%
USED EQUIPMENT RESALE 17,702.55 0.8%
FIELD SERVICE EXPENSE 3,782.71 0.2%
FOMBLIN RECLAIM EXPENSES 3,391.37 0.1%
VALVE/FILTER PURCHASES 1,350.00 0.1%
INVENTORY INCR/DECR (2,370.68) -0.1%
WORK IN PROCESS INCR/DECR (15,247.25) -0.7%
RENTAL EQUIPMENT EXPENSE 6,466.65 0.3%
TRUCK EXPENSE 20,830.29 0.9%
SHOP MILEAGE 1,201.73 0.1%
SHOP PAYROLL 370,273.71 15.9%
SHOP PAYROLL TAXES 43,107.69 1.9%
SHOP EMPLOYEE BENEFITS 18,337.67 0.8%
SHOP WORKMEN'S COMP INSURANCE 5,841.41 0.3%
SHOP SUPPLIES 47,111.15 2.0%
SHOP TOOLS 11,410.07 0.5%
SHOP OTHER EXPENSES 7,612.55 0.3%
SHOP WASTE DISPOSAL 6,836.89 0.3%
FREIGHT EXPENSE CORP 50,242.10 2.2%
PURCHASES DISCOUNTS (29,709.29) -1.3%
------------
TOTAL Cost of Goods Sold 1,360,187.32 58.5%
------------
GROSS PROFIT 963,989.62 41.5%
------------
<PAGE> 40
<CAPTION>
Jan 30, 1997 MVAK TECHNOLOGIES, INC. Page 2
2:52 pm Income Statement
FINAL
12 Months Ended
March 31, 1995
============ ===%===
<S> <C> <C>
Expenses
SELLING EXPENSES
SALES PAYROLL 130,832.93 5.6%
SALES COMMISSIONS 21,206.84 0.9%
SALES P/R TAXES 15,380.03 0.7%
SALES EMPLOYEE BENEFITS 7,207.84 0.3%
SALES WORKER'S COMP INSURANCE 1,081.49 0.0%
SALES TRADE SHOW EXPENSE 11,218.46 0.5%
SALES ADVERTISING 6,094.35 0.3%
SALES AUTO 2,750.00 0.1%
SALES MILEAGE 2,760.31 0.1%
SALES TRAVEL 3,042.09 0.1%
SALES MEALS & ENTERTAINMENT 1,254.04 0.1%
SALES OTHER EXPENSES 1,759.37 0.1%
------------
TOTAL SELLING EXPENSES 204,587.75 8.8%
------------
GENERAL & ADMINISTRATIVE
OFFICE PAYROLL 218,833.44 9.4%
OFFICE PAYROLL TAXES 22,385.61 1.0%
OFFICE EMPLOYEE BENEFITS 30,637.97 1.3%
OFFICE WORKER'S COMP INSUR 2,002.34 0.1%
CORPORATE EXP. 157,360.12 6.8%
RENT 121,105.24 5.2%
UTILITIES 35,129.57 1.5%
TRASH DISPOSAL 3,504.85 0.2%
REPAIRS & MAINTENANCE 8,686.43 0.4%
OFFICE EXPENSES 16,159.92 0.7%
OFFICE AUTO 16,734.38 0.7%
OFFICE MILEAGE 1,000.30 0.0%
OFFICE TRAVEL 5,585.95 0.2%
OFFICE MEALS & ENTERTAINMENT 1,667.15 0.1%
DUES & SUBSCRIPTIONS 1,014.00 0.0%
COMPUTER EXPENSE 5,505.52 0.2%
POSTAGE EXPENSE 3,708.56 0.2%
TELEPHONE EXPENSE 32,693.64 1.4%
INSURANCE SMP 5,926.81 0.3%
INSURANCE VEHICLE 7,904.92 0.3%
INSURANCE OTHER 3,584.72 0.2%
LEGAL EXPENSE 22,957.80 1.0%
ACCOUNTING EXPENSE 2,292.50 0.1%
PROPERTY TAXES 2,879.73 0.1%
BANK CHARGES 7,150.93 0.3%
OFFICE OTHER EXPENSES 2,449.49 0.1%
RESEARCH AND DEVELOPMENT 1,879.30 0.1%
INTEREST EXPENSE 22,526.79 1.0%
DEPRECIATION EXPENSE 34,059.03 1.5%
FEDERAL TAX PENALTY 39.70 0.0%
STATE TAX PENALTY 3,102.24 0.1%
------------
<PAGE> 41
<CAPTION>
Jan 30, 1997 MVAK TECHNOLOGIES, INC. Page 3
2:52 pm Income Statement
FINAL
12 Months Ended
March 31, 1995
============ ===%===
<S> <C> <C>
TOTAL GENERAL & ADMINISTRATIVE
800,468.95 34.4%
------------
TOTAL Expenses 1,005,056.70 43.2%
------------
OPERATING PROFIT (41,067.08) -1.8%
------------
Other Income & Expenses
MISCELLANEOUS INCOME/EXPENSE 27,225.83 1.2%
MISCELLANEOUS EXPENSE 46.84 0.0%
STATE CORPORATE TAX (25.00) -0.0%
STATE CORPORATE TAXES (1,149.38) -0.0%
------------
TOTAL Other Income & Expenses 26,098.29 1.1%
------------
PROFIT BEFORE TAXES (14,968.79) -0.6%
------------
NET PROFIT ($14,968.79) -0.6%
============
</TABLE>
<PAGE> 42
FORM 1120 U.S. Corporation Income Tax Return
1994
MVAK Technologies, Inc.
299-4 Ridgedale Ave.
East Hanover, NJ 97936
<TABLE>
<S> <C>
B 22 2416696
C 6/12/82
D $903979
1a 2376408
b 51005
c 2325403
2 1359193
3 966210
4
5
6
7
8 26000
9 5865
10
11 998075
12 121360
13 288873
14 8686
15
16 121105
17 4054
18 22527
19
20 35116
21a
21b 35116
22
23 6094
24
25 40929
26 351806
27 1000550
28 (2475)
29a 418576
29b
29c 418576
30 (421051)
31 NONE
32a
32b
32c
32d
32e
32f
32g
32h NONE
33 NONE
34 NONE
35 NONE
36 NONE
<PAGE> 43
Page 2
<CAPTION>
SCHEDULE A
<S> <C>
1 390331
2 843965
3 437561
4
5 95980
6 1768837
7 409644
8 1359193
9a Lower of cost or market as described in Regulations section 1.471-4
9b
9c
9d No
9e No
<CAPTION>
SCHEDULE C
<S> <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
<CAPTION>
SCHEDULE E
<S> <C>
1a Ronald Kaplan
Frank Giacona
Michelle Tangarie
1b ###-##-####
###-##-####
###-##-####
1c 50%
50%
100%
1d 30.8%
9.9%
1e
1f 39360
52000
30000
2
3
4
</TABLE>
<PAGE> 44
Page 3
<TABLE>
SCHEDULE K
<S> <C>
1a
1b X
1c
2a 7600
2b Sales & Repair
2c Vacuum Pumps
3 No
4 No
5 No
6 No
7 No
8 No
9 No
10 No
11
12 None
13 4
14 X
15 $418576
</TABLE>
<PAGE> 45
Page 4
<TABLE>
<CAPTION>
SCHEDULE L Balance Sheets Beginning of tax year End of tax year
(a) (b) (c) (d)
<S> <C> <C> <C> <C>
1 849 900
2a 247500 348445
2b 348445
3 390331 409644
4
5
6 1762 5283
7 52678 48787
8
9
10a 279584 301386
b 204410 75174 229348 72038
11a
b
12
13a
b 20600 18882
14
15 788894 903970
16 266562 486823
17 64421 289142
18 418965 95370
19
20 12382 16603
21
22a
22b
23 807000 807000
24 (780436) (790961)
25
26
27 788894 90397
</TABLE>
SCHEDULE M-1
1 (10525)
2 -0-
3
4 Capital Gains 2183
5a
b
c 1461
Penalties 3142
Officer Life Insurance 2088 6691
6 (1651)
7
8a $ 824
b
824
9 824
10 (2475)
<PAGE> 46
EXHIBIT 3.4
DETERMINATION OF NON-APPLICABILITY
Sellers represent to the Buyer that, to the best of their knowledge,
MVAK Technologies, Inc. has no known environmental violations, citations,
assessments, penalties or any threatened actions concerning environmental
issues.
Sellers represent that, to the best of their knowledge, they comply with
all federal, state and local regulations concerning filing and disposal
of any hazardous waste.
Letter of Non-Applicability - See attached.
<PAGE> 47
[letterhead of Governor of New Jersey]
RECEIVED
DEC 12 1995
MR. RONALD M. KAPLAN
MVAK TECHNOLOGIES, INC.
299-4 RIDGEDALE AVE.
EAST HANOVER, NJ 07936
RE: MVAK TECHNOLOGIES, INC.
299-4 RIDGEDALE AVE.
LOT 3, BLOCK 96
EAST HANOVER TWP, MORRIS COUNTY
N953735
Dear MR. KAPLAN:
This is in response to your application received 12/01/1995, concerning the
applicability of the Industrial Site Recovery Act (ISRA) to the sale of the
above referenced premises. On the basis of the sworn statements set forth
in your affidavit, the Department finds that this transaction is not subject
to the provisions of ISRA.
This decision is made in light of the absence of an industrial establishment
as defined within the Standard Industrial Classification numbers covered by
the Act. Any inaccuracies in the affidavit or subsequent changes in the facts
as stated therein could alter the Department's determination.
The inapplicability of the Industrial Site Recovery Act (ISRA) to this
transaction does not relieve the above referenced of any responsibilities
under any other environmental statutes, regulations or permits. In addition,
this determination of ISRA nonapplicability does not constitute any finding
by the New Jersey Department of Environmental Protection as to the current
site condition or existence or nonexistence of any hazards to the environment
at this location.
Should you have any further questions regarding this matter, please contact
me at (609) 777-0899.
Sincerely,
/s/ James J. Bono
James J. Bono, Supervisor
Bureau of Applicability and
Compliance
RECEIVED
DEC 11 1995
<PAGE> 48
EXHIBIT 3.5
JUDGMENTS
ACQUIREE
None
<PAGE> 49
EXHIBIT 3.6
ADMINISTRATIVE ORDER
ACQUIREE
None
<PAGE> 50
Form 668(Z) Certificate of Release of Federal Tax Lien
District New Jersey
Serial Number 229512453
I certify that as to the following named taxpayer, the requirements of
section 6325(a) of the Internal Revenue Code have been satisfied for
the taxes listed below and for all statutory additions. Therefore, the
lien provided by Code section 6321 for these taxes and additions has been
released. The proper officer in the office where the notice of internal
revenue tax lien was filed on May 15, 1995, is authorized to note the
------ --
books to show the release of this lien for these taxes and additions.
Name of Taxpayer MVAK Technologies, Inc.
Residence 299 East Ridgedale Ave.
East Hanover, N.J.
07936
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Period Date of Last Day for Unpaid Balance
Kind of Tax Ended Identifying Number Assessment Refiling of Assessment
(a) (b) (c) (d) (e) (f)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
941 12-31-94 22-2416696 03-27-95 04-26-05 13912.35
940 12-31-94 22-2416696 04-17-95 05-17-05 2469.44
- ------------------------------------------------------------------------------------------------------------------------------------
Place of Filing
Morris County Court House Total $16,381.79
Morris County
Morristown, N.J. 07960
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
This certificate was prepared and signed at Parsippany, N.J., on the 4th day
---------------- ---
of February, 1997.
-------- --
Signature Title
S. Clark /s/ D R ??? R.O.
<PAGE> 51
EXHIBIT 3.16
Sellers represent there are no known contracts with either vendors or
customers for any fixed purchases or any fixed sale of any dollar amount.
Any verbal contracts would deal with the ordinary day-to-day operations
and not reflect any significant purchase and/or sale.
Real estate leases for each facility.
Equipments leases, copies attached.
Pending attorney expenses to Stephen R. Urbinato, Esquire, in an amount
not to exceed ten thousand dollars ($10,000).
Pending reimbursement obligation to Frank Giacona for attorney's fees
incurred with regard to negotiation and review of Employment Agreement.
<PAGE> 52
The MASTER
Republic LEASE AGREEMENT
Group, LLC [logo] ML NO. F5376
----------
- -------------------------------------------------------------------------------
Lessee City State Country Zip
MVAK Technologies, Inc. East Hanover NJ USA 07936
- -------------------------------------------------------------------------------
Street Name and Title
299-4 Ridgedale Avenue Ronald M. Kaplan - President
- -------------------------------------------------------------------------------
TERMS AND CONDITIONS OF LEASE
1. LEASE PROPERTY: Subject to the following terms and conditions, The Republic
Group, LLC ("Lessor"), hereby leases to and/or grants to lessee the right to
use certain Equipment as described on the attached Lease Schedule(s) annexed
hereto and made a part hereof (thereafter "Leased Property"). Lessee agrees to
hire and and agrees to accept the right to use that certain Leased
Property, and such other Leased Property described on supplemental Schedule(s)
that the parties from time to time may annex to this Lease.
2. TERM. Each Schedule(s) shall become effective upon acceptance by Lessor by
signing and dating each Schedule(s) and the term for any Schedule(s) shall
commence on the day that the leased property has been delivered to and is
usable by Lessee ("Commencement Date"). Lessee shall at its sole discretion
select the type, quantity and supplier of each item of Equipment. Lessor shall
not be liable to Lessee for any failure or delay in obtaining delivery of any
Equipment. Upon delivery of any Equipment to Lessee, Lessee shall forthwith
inspect such Equipment and within ten (10) days of delivery of the Equipment,
Lessee shall execute and deliver to Lessor a Delivery and Acceptance
Certificate, in form and substance satisfactory to Lessor. Lessee's
execution and delivery of a Delivery and Acceptance Certificate covering any
Equipment shall conclusively establish, as between Lessor and Lessee, that
such Equipment has been unconditionally accepted by Lessee for all purposes
of this Lease.
With respect to each Lease, if for any reason the Equipment has not been
delivered, installed and accepted by Lessee within sixty (60) days after it
is ordered by Lessor, or if Lessee fails to accept the Equipment and execute
a Delivery and Acceptance Certificate within (10) days following
delivery of the Equipment. Lessor may at Lessee's request terminate Lessor's
obligations under such Lease and Lessee shall on demand of Lessor, pay Lessor
all amounts paid or owing by Lessor in respect to the purchase of such
Equipment and indemnify and hold Lessor harmless from any and all liabilities,
claims, costs and expenses to the manufacturer or supplier of the Equipment
or any other part, arising out of or relating to the Equipment or the Lease.
Upon payment of such amounts, Lessor shall release, remise and quit claim such
Equipment to Lessee. AS IS WHERE IS, AND WITHOUT WARRANTY EXPRESSED OR IMPLIED
BY LESSOR AS TO ANY MATTER WHATSOEVER. Lessee shall upon such payment be
subrogated to Lessor's claim, if any, against the manufacturer or supplier of
such Equipment.
Lessee agrees that its remedies, should it find fault with any of the
Equipment, shall be and are solely against the Manufacturer Vendor. The base
term of each Lease shall commence on the first day of the month following
the Commencement Date and terminate upon the expiration of the number of
months specified in each Schedule. The Lease may be terminated by Lessee at
the end of the base term if one hundred eighty (180) days prior to the end of
the base term, written notice of such termination is delivered to Lessor
(by certified mail). Each Lease may be terminated by Lessor at the end of the
base term if at least thirty (30) days prior to the end of the base term,
written notice of such termination is delivered to Lessee (by certified mail).
Otherwise the term of each Lease automatically shall be extended for a
successive one year period the end of the initial base term at the rent
stated on the respective Schedule(s). During this extension period, Lessor,
at is sole option, may terminate each Lease agreement (60) days prior
written notice to Lessee (by certified mail). After the extension period,
each Lease may be terminated by either Lessor or Lessee at the end of any
calendar month, provided one hundred twenty (120) days prior written notice
of such termination is delivered to the other party (by certified mail).
3. RENTALS: The monthly rent payable with respect to any Schedule(s) shall
be the amount shown on such Schedule(s). Lessee shall pay to Lessor the
monthly rental of each Schedule, in advance, for each month or any part
thereof that each Lease is in effect. The first such payment, with respect
to any schedule shall be made on the first day of the month following the
Commencement Date. A prorata portion of the rental charges based on a daily
rental of one thirtieth (1/30) of the monthly rental calculated from the
Commencement Date to the end of the month shall be due and payable at the
Commencement Date. Installments of rent which are not paid within five (5)
days of the due date shall be subject to a late charge equal to up to
fifteen (15) percent of each installment of rent. All rent shall be paid at
the place of business of Lessor shown above or such other place as Lessor may
designate by written notice to Lessee.
Except as otherwise provided in this Lease, Lessee's obligation to pay rent
shall be absolute and unconditional under all circumstances, notwithstanding
to any actual counterclaim, recoupment, defense or other right which Lessee
may have against Lessor for any reason whatsoever; (ii) any defect in the
title, right to use, condition, operation, fitness for use, damage or
destruction of or to the Leased Property or any interruptions or cessations in
use or possession thereof for any reason whatsoever; bankruptcy,
reorganization or similar proceedings instituted by or against Lessee.
Unless otherwise delineated on the Lease Schedule(s), any Deposit shall be
returned to Lessee if Lessor does not accept the transaction less reasonable
expenses. Otherwise upon acceptance by Lessor, any Deposit shall be treated
as a transaction fee to be retained by Lessor and is not to be applied to
rental or other payments due and owing under the Lease. Lessee hereby waives,
to the extent permitted by applicable law, any and all right which it may now,
or at any time hereafter have to cancel, terminate, or surrender this Lease
except in accordance with the express terms hereof.
4. ADDITIONS AND MODIFICATIONS: Without the prior consent of Lessor, which
consent shall be conditioned upon delivery of documentation of a form and
substance required by Lessor, Lessee shall make no addition, modification,
alteration, or attachment with respect to any of the Leased Property. All
additions, modifications, alterations and attachments placed upon the
Leased Property shall become part of the Leased Property and shall be the
property of Lessor. If not purchased, leased or financed by Lessor, Lessee
shall, upon written consent of Lessor and at Lessee's sole expense, have the
Equipment Manufacturer remove said items and restore the Equipment to its
original condition. Lessor, at its sole option, may provide financing for any
Additions and Modifications to Leased Property required by Lessee during the
Lease term subject to the then prevailing interest rates and the Lessee's
credit standing. Lessee shall not move the Leased Property from the location
set forth in the Schedule(s) without Lessor's prior written approval and
then only to another location within the continental United States and upon
such terms and conditions as Lessor may then stipulate.
5. NO WARRANTIES: Lessor not being the manufacturer, developer, publisher,
distributor or licensor of the Leased Property, MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE FITNESS, QUALITY,
DESIGN, CONDITION, CAPACITY, SUITABILITY, MERCHANTABILITY OR PERFORMANCE
OF THE LEASED PROPERTY OR OF THE MATERIAL OR WORKMANSHIP THEREOF. IT BEING
AGREED THAT THE LEASED PROPERTY IS LEASED "AS IS" AND THAT ALL SUCH RISKS, AS
BETWEEN LESSOR AND LESSEE ARE TO BE BORNE BY LESSEE AT ITS SOLE RISK AND
EXPENSE. LESSEE REPRESENTS THAT ALL OF THE LEASED PROPERTY ARE OF A SIZE,
DESIGN, AND CAPACITY SELECTED BY IT, AND THAT IT IS SATISFIED THAT THE SAME
IS SUITABLE FOR LESSEE'S PURPOSES. This provision shall survive termination
of the respective Lease Term and of this Lease, Lessor, at its sole option,
may supply items of Leased Property, either new or used, that meet the
specifications of items of Leased Property delineated on the Schedule(s).
Lessor appoints Lessee as Lessor's attorney-in-fact for the purpose of
enforcing any warranty. Any enforcement by Lessee shall be at the expense
of the Lessee and shall in no way render Lessor responsible to Lessee for
the performance of any of the warranties.
6. UNIFORM COMMERCIAL CODE FINANCING STATEMENT: Lessee agrees and acknowledges
that it is the intent of both parties to this Lease that it qualify as a
Statutory Finance Lease under Article 2A of the Uniform Commercial Code.
Lessee acknowledges and agrees that Lessee has selected both (1) the Equipment
and (2) the
<PAGE> 53
Supplier from whom Lessor is to purchase the Equipment. Lessee acknowledges
that Lessor has not participated in any way in Lessee's selection of the
Equipment or of the Supplier, and Lessor has not selected, manufactured,
or supplied the Equipment.
LESSEE IS ADVISED THAT IT MAY HAVE RIGHTS UNDER THE CONTRACT EVIDENCING THE
LESSOR'S PURCHASE OF THE EQUIPMENT FROM THE SUPPLIER CHOSEN BY LESSEE AND
THAT LESSEE SHOULD CONTACT THE SUPPLIER OF THE EQUIPMENT FOR A DESCRIPTION
OF ANY SUCH RIGHTS.
7. NET LEASE; NO OFFSET: THIS IS A NET LEASE, AND ALL RENT AND ALL OTHER SUMS
PAYABLE BY LESSEE HEREUNDER SHALL BE PAID UNCONDITIONALLY WHEN DUE, WITHOUT
ABATEMENT, DEDUCTION, COUNTERCLAIM OR SETOFF OF ANY NATURE, INCLUDING
WITHOUT LIMITATION ANY COUNTERCLAIM OR SETOFF ARISING OUT OF ANY PRESENT
OR FUTURE CLAIM LESSEE MAY HAVE AGAINST LESSOR, OR ANY ASSIGNEE OF LESSOR
OR THE MANUFACTURER OR SUPPLIER OF THE EQUIPMENT, OR ANY OTHER PARTY. In no
event as otherwise expressly provided herein, shall this Lease terminate or
shall any of the Lessee's obligations be affected by reason of any defect in
or damage to or loss or destruction of all or any part of the Equipment, from
any cause whatsoever, or any interference with Lessee's use of the Equipment
by any person or for any other cause whatsoever.
8. COMMERCIAL RISK: Lessee bears all risk that the Equipment may become
unusable for any reason, including without limitation, loss, theft, damage,
destruction, defect, GOVERNMENTAL REGULATION, PROHIBITION, IMPRACTICABILITY
OF USE, OBSOLESCENCE OR COMMERCIAL FRUSTRATION. No inability to use the
Equipment shall result in the termination of any Lease or relieve Lessee
from any of its obligations under any Lease.
9. USE, OPERATION AND MAINTENANCE: Lessee, at its expense will provide a
suitable place for the installation, operation and maintenance of all
Leased Property with all such facilities fully complying with the
installation and operational specifications outlined in pertinent
Manufacturer's/Vendor Licensor's manuals. Lessee, without expense to
Lessor, will enter into and keep in force during the entire term of
this Lease the best standard Manufacturer's/Vendor's/Licensor's
Maintenance Agreement in form and substance approved by Lessor which
will cause Manufacturer(s)/Vendor(s)/Licensor(s) to make all the
necessary repairs, adjustments, and replacements in accordance with
such Agreement and entitle Lessee (through Lessor, if necessary) to
obtain enhancements, updates, and changes available under the License or
Maintenance Agreement. Lessee will provide full free access to the Leased
Property for maintenance purposes. Lessee shall not do anything, or fail
to do anything to impair the Manufacturer's/Vendor's/Licensor's warranty
with respect to any Leased Property such as (but not limited to) using a
version of software, other than the version specified by the License to be
used, making unauthorized modifications of the Leased Property, failing to
follow Manufacturer's/Vendor's/Licensor's operations or maintenance
instructions, or abusing, misusing, or allowing negligent acts to be caused
by Lessee or those to whom Lessee gives access to the Leased Property.
Lessee will comply with all laws, rules, regulations or orders of any
governmental agency with respect to the Leased Property or to the use,
operation, maintenance or storage thereof. Notwithstanding the aforesaid
Lessee will indemnify and hold Lessor harmless from any and all liabilities,
fines, forfeitures, or penalties for violations of any statute, law ordinance,
rule or regulation of any duly constituted public authority.
10. LOSS AND DAMAGE: Lessee shall bear the entire risk of loss, theft, damage
or destruction of the Equipment from any cause whatsoever, and no loss, theft,
damage or destruction of the Equipment shall relieve Lessee of the obligation
to pay rent or to comply with any other obligation under this Lease.
In the event of damage to any item of Equipment, Lessee shall immediately
place the same in good repair at lessee's expense. If Lessor determines
that any item of Equipment is lost, stolen, destroyed or damaged beyond
repair, Lessee shall at Lessee's option do one of the following: (a) Replace
the same with like Equipment in good repair acceptable to Lessor; or (b) Pay
Lessor in cash the following: (i) all amounts due by Lessee to Lessor with
respect to all affected Schedules up to the date of the loss; (ii) the unpaid
balance of the total rent for the remaining term of the affected Schedules
attributable to said item, reduced to present value at a discount rate of 6%
as of the date of the loss; and (iii) the Lessor's estimate as of the time
this Lease was entered into of Lessor's residual interest in the Equipment,
discounted to present value at a discount rate of 6% as of the date of the loss.
Upon Lessor's receipt of payment as set forth above, Lessee shall be entitled
to the Equipment, without any warranties. If insurance proceeds are used to
fully comply with this subparagraph, the balance of any such proceeds shall
go to Lessee to compensate for loss of use of the Equipment for the remaining
term of the Lease.
11. INDEMNITY AND INSURANCE: Lessor shall have no responsibility or liability
to Lessee, its successors or assigns, or to any other person, with respect to
any or all liabilities, and Lessee hereby assumes liability for, and hereby
agrees, at its own cost and expense, to indemnify, protect, defend, save and
keep harmless Lessor, its agents, employees, officers, directors, successors
and assigns, from and against, any and all liabilities, obligations, losses,
damages, injuries, claims (including, without limitation, claims based upon
strict liability), demands, penalties, actions, costs and expenses, including
legal expenses, of every kind or nature arising out of the use, condition
(including but not limited to, latent and other defects, whether or not
discoverable by Lessee or Lessor), operation, ownership, selection, delivery,
leasing or return of any item of Leased Property (including, without limitation,
any claim for patent, trademark or copyright infringement), regardless of
where, how and by whom operated, or any failure on the part of Lessee to
perform or comply with any conditions of this Lease or for any interruption
of service, loss of business or consequential damages. The indemnities and
assumptions of liabilities and obligations herein provided for shall continue
in full force and effect notwithstanding the expiration or other termination
of this Lease. Lessee, at its expense, shall procure and maintain in full
force and effect at all times that this Lease is in force and effect such
public liability (including, without limitation, contractual liability
insurance), property damage liability, fire and extended coverage, theft
and other insurance in such form and amounts and with such companies as
shall be satisfactory to Lessor. Lessor shall be named as an additional
insured and loss payee on all policies which shall provide that no
cancellation thereof shall be effective without thirty (30) days prior
written notice to Lessor and shall not be invalidated as to Lessor by any
act, omission or neglect of Lessee.
12. OWNERSHIP, PERSONALTY: The Equipment is and shall remain the property
of Lessor, and Lessee shall have no right, title or interest therein or
thereto except as expressly set forth in this Lease. This agreement
constitutes a lease and not a sale or the creation of a security interest.
The Equipment shall remain personal property even though installed in or
attached to real property. Lessee will at all times protect and defend,
at its own cost and expense, the title from and against all claims, liens
and legal processes and keep all leased property free and clear from all
such claims, liens and processes. Upon the expiration or termination of
this lease with respect to a particular schedule(s), the Lessee at its
expense shall return said items of leased property unemcumbered to Lessor
at such place within the continental limits of the United States as Lessor
shall designate, unless otherwise delineated on a separate purchase option
with respect to such Lease. At the termination of this lease, provided
Lessee is not in default, Lessee shall be entitled to, on written notice to
Lessor, at least thirty (30) days prior to the end of initial term or any
renewal term, if extended, to purchase equipment from Lessor at the fair
market value as determined by Lessor. All transportation, rigging and
drayage charges on delivery or redelivery of the Leased Property to and
from Lessee shall be paid by Lessee. All installation and deinstallation
charges including packing materials and any fees and charges for maintenance
certification or recertification shall be paid by Lessee. Immediately upon
expiration or termination of each and every Lease Term as defined under this
Lease, Lessee shall discontinue its use of the Leased Property. TERMINATION
OF ANY LEASE TERM (FOR WHATEVER CAUSE) SHALL NOT ABSOLVE USER FROM PAYMENT OF
ACCRUED PERIODIC PAYMENTS OR FROM COMPLIANCE WITH THE USE AND DISCLOSURE
RESTRICTIONS OF THIS LEASE OR FROM ITS OBLIGATIONS TO INDEMNIFY LESSOR. All
representations and warranties contained in this Lease, or in any document
or certificate delivered pursuant hereto or in connection herewith, shall
survive the expiration or other termination of the respective Lease Term and
of this Lease.
13. ENCUMBRANCES AND TAXES. Lessee shall keep the Equipment free and clear of
all levies, liens and encumbrances, and shall pay promptly when due, and shall
indemnify and hold Lessor harmless from all license fees, import duties,
assessments, charges and taxes (municipal, state, federal or other) which may
now or hereafter be imposed upon the ownership, leasing, renting, sale,
possession or use of the Equipment, (whether the same be assessed to Lessor or
Lessee), together with any penalties or interest in connection therewith,
excluding, however, all taxes on or measured by Lessor's net income. If any
such fee, assessment, duty, charge or tax is, or is to be, assessed or billed
to Lessor, Lessee upon the request of Lessor and at the expense of Lessee
shall do any and all things required to be done by Lessor in connection with
the levy, assessment, billing and payment thereof. Upon Lessor's request,
Lessee shall, on any property tax returns required to be filed with respect
to the Equipment, including the property covered by this Lease and any
substitutions or additions thereto as property owned by Lessee for purposes
of tax assessments, shall cause all billings of such fees, assessments,
duties, charges or taxes to be addressed to Lessor in care of Lessee, and
shall submit to Lessor written evidence of payment of the same. Alternatively,
Lessee shall at the request of Lessor, forthwith pay Lessor the amount
(estimated or otherwise) of any such fees, assessments, duties, charges
and taxes, and Lessor shall apply the same to the payment thereof.
Lessee shall also pay all taxes arising out of Lessee's exercise of any
purchase option relating to any Lease (including sales tax).
<PAGE> 54
14. RIGHT OF INSPECTION: In addition to rights to entry and inspection stated
elsewhere in this Lease, Lessor may from time to time during reasonable
business hours, enter upon any premises where any of the Leased Property may
be located for the purpose of confirming the existence, conditions, and
proper maintenance of the Leased Property.
15. EVENTS OF DEFAULT: The term "Event of Default" shall mean any one or more
of the following: (a) Lessee shall fail to make any Lease Payment (or any
other payment) as it becomes due and such failure is not cured within 10 days;
or (b) Lessee shall fail to perform or observe any or all covenants set forth
in Paragraph 10, or (c) Lessee shall fail to perform or observe any other
covenant, condition or agreement to be performed or observed by it thereunder
or in any Lease and such failure is not cured within 30 days after the
earlier of (i) the date on which Lessee obtains, or should have obtained,
knowledge of such failure or (ii) the date of notice thereof by Lessor or
Lessee or (d) Lessee shall enter into any transaction of merger or
consolidation in which it is not surviving entity or sell, transfer or
otherwise dispose of all or substantially all of its assets ("Assets")
unless the surviving entity or the entity acquiring such Assets assumes
all the duties and obligations of Lessee hereunder and which merger,
consolidation, sale or transfer must be approved in writing by Lessor;
or (e) (i) Lessee or any guarantor of Lessee's obligations shall commence
any action (A) for relief under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, or (B) seeking appointment of a
receiver, custodian or other similar official for it or for its Assets or making
a general assignment for the benefit of its creditors; or (ii) there shall
be commenced against Lessee any action (A) of a nature referred to in
clause (i) which (I) results in the entry of an order for relief or any
such other relief and (II) remains undismissed or undischarges for a period
of 30 days, or (B) seeking attachment, execution or similar process
against its assets which results in the entry of an order for any such
relief which shall not be vacated to discharged within 30 days from the
entry thereof; or (iii) Lessee shall generally not, or be unable to, pay
its debts as they come due; or (f) Lessee shall die or (if an entity)
liquidate or dissolve itself or be liquidated or terminated; or (g) Any
representation or warranty made by Lessee herein or otherwise furnished
Lessor in connection with this Agreement or any Lease hereunder shall prove
at any time to have been untrue or misleading in any material respect;
(h) Lessee wrongfully or otherwise rejects or revokes acceptance of the
leased equipment or repudiates with respect to a part or the whole of the
lease contract.
16. REMEDIES: Upon the occurrence of any Event of Default, Lessor may declare
this Agreement or any Lease hereunder to be in default and exercise any one
or more of the following remedies: (a) Declare the entire unpaid balance of
Lease Payments for the unexpired term of the Lease hereunder immediately
due and payable and similarly accelerate the balances due under any other
Leases between Lessor and Lessee without notice of demand, (b) Sue for and
recover all Lease Payments and other monies due and to become due under the
Lease hereunder, plus the estimated fair market value of the Equipment at the
end of the originally scheduled Lease Term or the agreed upon Purchase Option,
all of which shall be discounted to the date of default at six percent (6%)
per annum, but only to the extent permitted by law, (c) Charge Lessee interest
on all monies due Lessor at the rate of eighteen percent (18%) per annum from
the date of default until paid but in no event more than the maximum rate
permitted by law. (d) Charge Lessee a returned-check or non-sufficient funds
charge ("NSF Charge") to reimburse Lessor for the time and expense incurred
with respect to a check that is returned for any reason including
non-sufficient or uncollected funds, such NSF Charge is stipulated and
liquidated at $25.00; (e) Require Lessee to assemble all equipment at Lessee's
expense, at a place reasonably designated by Lessor, (f) Remove any physical
obstructions for removal of the Equipment from the place where the Equipment
is located and take possession of any or all items of Equipment, without
demand or notice, wherever same may be located, disconnecting and
separating all such Equipment from any other property, with or without
any court order or pre-taking hearing or other process or law, it being
understood that facility of repossession in the event of default is a
basis for the financial accommodation reflected by this Agreement or any Lease
hereunder. Lessee hereby waives any and all damages occasioned by such
retaking. Lessor may at its option, use, ship, store or repair all Equipment so
removed and shall sell, lease or otherwise dispose of any such Equipment at a
private or public sale. Lessor may ? Equipment and resell or lease the
Equipment at Lessee's premises at reasonable business hours without being
required to remove the Equipment. In the event Lessor disposes of the
Equipment, Lessor shall give Lessee credit for any sums received by Lessor from
the sale or lease of the Equipment after deduction of the expenses of sale or
lease. (The credit for any sums to be received by Lessor from such lease shall
be discounted to the date of the Lease at six percent (6%) per annum). Lessee
shall also be liable for and shall pay to Lessor (i) all expenses incurred by
Lessor in connection with the enforcement of any of Lessor's remedies,
including all expenses of repossessing, storing, shipping, repairing and
selling the Equipment, and (ii) Lessor's reasonable attorney's fees. Lessor and
Lessee acknowledge the difficulty in establishing a value for the unexpired
Lease Term and owing to such difficulty agree that the provisions of this
paragraph represent an agreed measure of damages and are not to be deemed a ?
or penalty. (g) The entire amount paid as a deposit by Lessee shall constitute
a transaction fee and shall be retained by Lessor regardless whether delivery
of equipment in part or whole has taken place.
Whenever any payment is not made by Lessee when due hereunder, Lessee agrees
to pay to Lessor, not later than one month thereafter, an amount calculated
at the rate of fifteen cents per one dollar for each such delayed payment as
compensation for Lessor's internal operating expenses arising as a result of
such delayed payment, but only to the extent permitted by law. Such amount
shall be payable in addition to all amounts payable by Lessee as a result of
exercise of any of the remedies herein provided. All remedies of Lessor
hereunder are cumulative, are in addition to any other remedies provided for
by law, and may, to the extent permitted by law, be exercised concurrently
or separately. The exercise of any one remedy shall not be deemed to be an
election of such remedy or to preclude the exercise of any other remedy. No
failure on the part of the Lessor to exercise and no delay in exercising any
right or remedy shall operate as a waiver thereof or modify the terms of this
Agreement or any Lease hereunder. A waiver of default shall not be a waiver
of any other or subsequent default. Lessor's recovery hereunder shall in no
event exceed the maximum recover permitted by law.
17. TIME OF ESSENCE: Time is of the essence of this Lease and of each and all
of its provisions.
18. QUIET ENJOYMENT: The Lessor covenants that if, and so long as, the Lessee
keeps and performs each and every covenant, condition and agreement to be
performed or observed by it hereunder, the Lessee shall quietly enjoy the
Leased Property hereunder without hindrance or molestation by the Lessor or
any other person lawfully claiming the same.
19. PERFORMANCE OF LESSEE'S OBLIGATION BY LESSOR: In case of failure of Lessee
to procure or maintain proper insurance or to pay such fees, duties,
assessments, charges and taxes or to keep any item of Equipment free and
clear of all liens, levies and encumbrances or in good repair, condition and
working order, all as herein before provided, Lessor shall have the right,
but not the obligation, without notice to or demand upon Lessee, and without
releasing Lessee from any obligation herein before specified, to effect and
pay for such insurance or to pay such fees, assessments, duties, charges and
taxes or to keep such Equipment in good repair, condition and working order,
as the case may be, and to pay, purchase, contest or compromise any
encumbrance, charge or lien which in the sole judgment of Lessor appears to
to affect such Equipment, and in exercising any such right, to incur any
liability and expend whatever amounts in its absolute discretion it may
deem necessary therefor. All sums incurred or expended by Lessor shall
immediately become due and payable to Lessee upon payment by Lessor and
shall thereafter bear interest at the rate of 18% per annum.
20. FURTHER ASSURANCES; OFFER AND ACCEPTANCE; LESSEE'S FINANCIAL INFORMATION:
Lessee's signing of this document shall constitute an offer to Lessor to enter
into the Lease. In consideration of Lessor's time and effort in reviewing
and acting on the offer, Lessee agrees that its offer shall be irrevocable
for a period of thirty (30) business days after the date it is submitted to
Lessor. Lessor's signing of this Lease shall constitute acceptance of Lessee's
offer to enter into the Lease. Upon acceptance by Lessor, Lessee shall execute
and deliver such instruments and assurances including, but not limited to,
personal assurance, spouse's assurance and of assurance of any persons having
more than twenty (20%) percent interest in legal persona should Lessee be a
legal persona as Lessor deems necessary from time to time or ? for
confirmation, assignment and assurance of performance by Lessee of its
obligation hereunder or for perfection of this Lease, including but not
limited to the filing of this Lease or the filing of Uniform Commercial Code
Financing Statements (which Lessee agrees may be executed by Lessor on Lessee's
behalf). Lessee further authorizes Lessor to insert in each Lease Schedule
and in other appropriate documentation the serial number(s) and other
identifying data of the Leased Property, and to insert applicable lease dates
and assignment dates as necessary to complete such supplemental documentation.
Lessee shall also provide Lessor with all credit information reasonably
requested by Lessor, including but not limited to comparative audited
financial statements for the most current year and interim reporting period.
Lessee's failure to provide such information to Lessor shall be an event of
default under Section 15 of this Lease. Lessor shall have the right at its
sole discretion for any reason whatsoever for a reasonable period of time
as solely determined by Lessor, after such financial information has been
submitted to Lessor, to terminate this Lease by giving written notice of
such termination to Lessee. In the event of such termination, all
obligations of Lessor set forth herein shall be canceled, otherwise,
Lessor shall confirm its acceptance in writing to Lessee.
<PAGE> 55
21. NOTICES: Unless otherwise specifically provided herein, all notices to
Lessor shall be delivered in person to an ? of the Lessor, or shall be sent
certified mail return receipt requested to Lessor at its address or at any
later address last known to the sender. All notices to Lessee shall be in
writing and shall be delivered by mail at its address shown herein or at any
later address last known to the sender.
22. SEVERABILITY: This Lease is intended to constitute a valid and enforceable
legal instrument. In the event any provision hereof is declared invalid, such
provision will be deemed severable from the remaining provisions of this
Lease, all of which will remain in full force and effect.
23. MULTIPLE LESSEES: Lessee and each of them are jointly and severally
responsible and liable to Lessor under this Lease. Lessor may with the
consent of any one of the Lessees hereunder, modify, extend or change any
of the terms, hereof without consent or knowledge of the others, without
in any way releasing, waiving or impairing any right granted to Lessor
against the others.
24. EXPENSE OF ENFORCEMENT: In the event of any legal action with respect to
this Lease, the prevailing party in any such action shall be entitled to
reasonable attorney fees, including attorney fees incurred at the trial
level, including action in bankruptcy, court of appeal or review, or incurred
without action, suits or proceedings, together with all costs and expenses
incurred in pursuit thereof. The Lessee agrees that all litigation arising
out of this lease or any breach thereof shall be filed and conducted in the
California Superior Court for the County of Orange, unless the Lessor or its
Assignee selects an alternative venue for litigation.
25. AGREEMENTS: This is the complete agreement by and between the parties
hereto. NO ORAL OR WRITTEN AGREEMENT, GUARANTY, PROMISE, CONDITION,
REPRESENTATION, OR WARRANTY SHALL BE BINDING UNLESS MADE A PART OF THIS
LEASE BY DULY EXECUTED ADDENDUM. All agreements, representations and
warranties contained in this Lease, or in any document or certificate
delivered pursuant hereto or in connection herewith, shall survive the
expiration or other termination of this Lease. Any provision of this
Lease which may be determined by competent authority to be prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction. To the extent permitted by applicable law,
Lessee hereby waives any provision of law which renders any provision
hereof prohibited or unenforceable in any respect. THIS LEASE SHALL BE
CONSTRUED IN ACCORDANCE WITH AND SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF CALIFORNIA.
26. ASSIGNMENT: WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, LESSEE SHALL
NOT ASSIGN THIS LEASE OR ITS INTEREST HEREUNDER IN ANY FORM OR MANNER
INCLUDING; BUT NOT LIMITED TO, AN ASSIGNMENT DUE TO A SALE, MERGER,
LIQUIDATION, SUB-LEASE, LEVERAGED BUYOUT, CHANGE OF OWNERSHIP OR
CHANGE-IN-CONTROL. THE LESSOR MAY SELL AND ASSIGN ITS RIGHT, TITLE,
INTEREST, OR ANY OTHER RIGHTS IT MAY HAVE AS AN OWNER AND LESSOR OF
THE LEASED PROPERTY TO AN ASSIGNEE ("ASSIGNEE"). LESSEE HEREBY CONSENTS
TO SUCH ASSIGNMENT AND FURTHER AGREES AS FOLLOWS: (1) THAT ASSIGNEE DOES
NOT ASSUME ANY OF THE OBLIGATIONS OF LESSOR HEREUNDER; (2) TO PAY ALL
MONIES UNDER THE LEASE DIRECTLY TO ASSIGNEE, UNCONDITIONALLY WITHOUT
OFFSET AND LESSEE FURTHER AGREES THAT SUCH MONIES SHALL BE PAYABLE
NOTWITHSTANDING ANY DEFENSE OR COUNTERCLAIM WHATSOEVER, WHETHER BY
REASON OF BREACH OF THE LEASE, THE EXERCISE OF ANY RIGHT HEREUNDER, OR
OTHERWISE, WHICH IT MAY OR MIGHT NOW OR HEREAFTER HAVE AS AGAINST THE
LESSOR (THE LESSEE RESERVING ITS RIGHT TO HAVE RECOURSE DIRECTLY AGAINST
LESSOR ON ACCOUNT OF ANY SUCH DEFENSE OR COUNTERCLAIM); AND (3) THAT
SUBJECT TO AND WITHOUT IMPAIRMENT OF THE LESSEE'S LEASEHOLD RIGHTS IN
AND TO THE LEASED PROPERTY COVERED HEREUNDER, LESSEE SHALL HOLD SAID
LEASED PROPERTY AND THE POSSESSION THEREOF FOR THE ASSIGNEE TO THE
EXTENT OF THE ASSIGNEE'S RIGHTS THEREIN.
27. MISCELLANEOUS: (1) LESSEE HEREBY ACKNOWLEDGES THAT THIS LEASE IS
NONCANCELABLE FOR THE ORIGINAL RENTAL TERM SET FORTH IN EACH SCHEDULE.
(2) LESSEE UNDERSTANDS AND ACKNOWLEDGES THAT NO BROKER OR SUPPLIER NOR
ANY SALESMAN, BROKER OR AGENT OF ANY BROKER OR SUPPLIER IS AN AGENT OF
LESSOR. NO BROKER OR SUPPLIER, NOR ANY SALESMAN, BROKER OR AGENT OF ANY
BROKER OR SUPPLIER IS AUTHORIZED TO WAIVE OR ALTER ANY TERM OR CONDITION
OF THIS LEASE, AND NO REPRESENTATION AS TO THE EQUIPMENT OR ANY OTHER
MATTER BY A BROKER OR SUPPLIER OR ANY SALESMAN, BROKER OR AGENT OF ANY
BROKER OR SUPPLIER SHALL IN ANY WAY AFFECT LESSEE'S DUTY TO PAY THE
RENTALS AND TO PERFORM LESSEE'S OBLIGATIONS SET FORTH IN THIS LEASE.
28. ENTIRE AGREEMENT; WAIVER: This instrument and the Schedules executed by
Lessor and Lessee constitute the entire agreement between Lessor and Lessee
with respect to the Equipment and the subject matter of this Lease. No
provision of this Lease shall be modified unless in writing signed by an
authorized representative of Lessor. Waiver by Lessor of any provision
hereof in one instance shall not constitute a waiver of any other instance.
LESSEE SIGNATURE ACCEPTED BY LESSOR
THE LESSEE AGREES TO ALL OF THE TERMS THIS AGREEMENT AND EACH INDIVIDUAL
AND CONDITIONS CONTAINED IN THIS LEASE SHALL NOT BE BINDING UPON
AGREEMENT. THE LESSEE ALSO LESSOR OR BECOME EFFECTIVE UNTIL
ACKNOWLEDGES TO HAVE READ AND AGREED AND UNLESS LESSOR ACCEPTS THE SAME
TO ALL THE TERMS AND CONDITIONS. IN WRITING. THE UNDERSIGNED AGREES
LESSEE FURTHER ACKNOWLEDGES THAT THE TO ALL OF THE TERMS AND CONDITIONS
LEASED EQUIPMENT IS: / / NEW / / USED CONTAINED IN THIS AGREEMENT, ON
EACH SCHEDULE AND IN ANY OTHER
ATTACHMENTS HERETO ALL OF WHICH
ARE INCORPORATED HEREIN BY
Signature X /s/ Ronald M. Kaplan REFERENCE AND MADE A PART OF THIS
-------------------- AGREEMENT AND ALL OF WHICH THE
Date 6/10/96 UNDERSIGNED ACKNOWLEDGES TO HAVE
------- READ AND AGREED TO. EACH LEASE
(Lease must be signed by authorized HEREUNDER IS A NONCANCELABLE NET
Corporate Officer, Partner or Proprietor) LEASE FOR THE FULL TERM.
Print Name Ronald M. Kaplan Signature X /s/ J. Raeder
---------------- -----------------------
Title President J. Raeder
------------
For MVAK Technologies, Inc. Title President Date 7/11/96
------------------------------------- ---------- -------------
Legal Name of Corporation or Partnership For THE REPUBLIC GROUP, LLC Legal
Name of Corporation
<PAGE> 56
EXHIBIT A
===============================================================================
Item No. Qty Description
- -------------------------------------------------------------------------------
VENDOR
ROTO-JET OF AMERICA COMPANY, INC.
2819 SAN FERNANDO BOULEVARD
BURBANK, CALIFORNIA 91504
1 1 RJ-2 Parts Washer, 7.5HP/220VAC/3PH/60Hz
28" x 28" x 35" x 1000lb. wash capacity, thermal
insulation, chip basket, chain drive, full instrumn.
2 1 12" Dia. Stainless Steel Wheel Oil skimmer w/GFCI
3 1 External Filter System
4 1 Gas Heat Forced Draft 250,000 BTU w/Std. Controls
===============================================================================
This Exhibit is hereby verified as Exhibit attached to and made part
correct by the undersigned LESSEE of that Lease No. F5376 dated the
and constitutes all the equipment 11th day of July 1996 between
covered by the referenced lease. LESSEE and THE REPUBLIC GROUP, LLC
LESSEE: MVAK Technologies, Inc.
BY: /s/ Ronald M. Kaplan President BY: /s/ J. Raeder President
------------------------------- -------------------------------
Title J. Raeder Title
DATE: 6/10/96
-----------------------------
Page 1 of 1 of this Exhibit
<PAGE> 57
The
Republic ADDENDUM "A"
Group, LLC [LOGO]
TO
MASTER LEASE AGREEMENT NO:
----------------------
LEASE SCHEDULE NO:
----------------------
Reference is made to the above-referenced Master Lease Agreement ("Lease")
dated the day of , 1996 by and between
----------- -----------------
MVAK Technologies, Inc. as Lessee, and THE REPUBLIC GROUP, LLC as Lessor.
Notwithstanding the terms and conditions contained in the Lease and to the
limited extent hereof, the parties hereto agree as follows:
"AFTER THE FINAL BASE LEASE PAYMENT HAS BEEN MADE, PLUS ALL
ACCRUED BUT UNPAID LATE CHARGES, INTEREST, TAXES, PENALTIES
AND/OR ANY OTHER SUMS DUE AND OWING UNDER THE MASTER LEASE
AGREEMENT, AND NO EVENT OF DEFAULT, AS THE SAME IS MORE
FULLY DESCRIBED IN SAID LEASE, HAS OCCURRED OR IS CONTINUING,
(AS TO LEASE SCHEDULE --- TO SAID LEASE) LESSEE SHALL HAVE
THE OPTION TO PURCHASE SAID EQUIPMENT FROM LESSOR, OR
LESSOR'S ASSIGNEE, FOR ONE FINAL PAYMENT OF ONE ($1.00)
U.S. DOLLAR, FOR WHICH TITLE SHALL PASS FROM LESSOR TO
LESSEE, PROVIDED WRITTEN NOTICE OF INTENT TO PURCHASE
IS DELIVERED TO LESSOR (BY CERTIFIED MAIL) ONE HUNDRED
AND EIGHTY (180) DAYS PRIOR TO THE END OF THE BASE TERM."
In all other respects, the terms and conditions of the Lease, as originally
set forth, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto, by their authorized signatories, have
executed this Addendum "A" at the date set forth below their respective
signatures.
LESSEE: LESSOR:
MVAK Technologies, Inc. THE REPUBLIC GROUP, LLC
BY: /s/ Ronald M. Kaplan BY:
------------------------------- ----------------------------------
NAME: Ronald M. Kaplan NAME:
----------------------------- ------------------------------
TITLE: President TITLE:
---------------------------- -----------------------------
DATE: 6/10/96 DATE:
----------------------------- ------------------------------
<PAGE> 58
THE
REPUBLIC
GROUP, LLC [LOGO]
ADDENDUM "A"
TO
MASTER LEASE AGREEMENT NO: ------------
LEASE SCHEDULE NO: ------------
Reference is made to the above-referenced Master Lease Agreement ("Lease")
dated the ------- day of ----------, 1996 by and between M.V.A.K. Technologies,
Inc. as Lessee, and THE REPUBLIC GROUP, LLC as Lessor.
Notwithstanding the terms and conditions contained in the Lease and to the
limited extent hereof, the parties hereto agree as follows:
"AFTER THE FINAL BASE LEASE PAYMENT HAS BEEN MADE, PLUS ALL ACCRUED BUT
UNPAID LATE CHARGES, INTEREST, TAXES, PENALTIES AND/OR ANY OTHER SUMS DUE
AND OWING UNDER THE MASTER LEASE AGREEMENT, AND NO EVENT OF DEFAULT, AS
THE SAME IS MORE FULLY DESCRIBED IN SAID LEASE, HAS OCCURRED OR IS
CONTINUING, (AS TO LEASE SCHEDULE --- TO SAID LEASE) LESSEE SHALL HAVE THE
OPTION TO PURCHASE SAID EQUIPMENT FROM LESSOR, OR LESSOR'S ASSIGNEE, FOR
ONE FINAL PAYMENT OF ONE ($1.00) U.S. DOLLAR, FOR WHICH TITLE SHALL PASS
FROM LESSOR TO LESSEE, PROVIDED WRITTEN NOTICE OF INTENT TO PURCHASE IS
DELIVERED TO LESSOR (BY CERTIFIED MAIL) THIRTY (30) DAYS PRIOR TO THE
END OF THE BASE TERM."
In all other respects, the terms and conditions of the Lease, as originally
set forth, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto, by their authorized signatories, have
executed this Addendum "A" at the date set forth below their respective
signatures.
LESSEE: LESSOR:
M.V.A.K. Technologies, Inc. THE REPUBLIC GROUP, LLC
BY: /S/ Ronald M. Kaplan BY:---------------------
NAME: Ronald M. Kaplan NAME:-------------------
TITLE: President TITLE:------------------
DATE: 5/20/96 DATE:-------------------
<PAGE> 59
<TABLE>
ACCT. NO. --------------- NEW JERSEY VEHICLE DATE 12/19/91
RETAIL INSTALMENT CONTRACT ----------------
16489
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
Buyer (and Co-Buyer) Name and Address (Include County and Zip Code) CREDITOR (Seller Name and Address)
<S> <C>
MVAK TECHNOLOGIES INC. & RONALD KAPLAN PARK PONTIAC
299-4 RIDGEDALE AVE COMMUNIPAW AVE.
EAST HANOVER NJ 07936 JERSEY CITY NJ 07304
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
You, the Buyer (and Co-Buyer, if any), may buy the vehicle described below for
cash or on credit. The cash price is shown below as "Cash Price". The credit
price is shown below as "Total Sale Price". By signing this contract, you
choose to buy the vehicle on credit under the agreements on the front and back
of this contract.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
If Truck
New or Body No. Ton Vehicle Use For Which
Used Year and Make Series Style Cyl. Capacity Identification Number Purchased
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NEW 1991 GMC VANDURA G3500 1GTGG35K5M7517488 Personal
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
INCLUDING:
<S> <C> <C> <C> <C> <C>
Air Automatic Power
/ / Radio / /Conditioner / /Transmission / /Steering / /-------------- / /----------------
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
TRADE-IN: $ N/A $ N/A
------------------------ ------------------ -----------------
Year and make Gross Allowance Amount Owing
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
ITEMIZATION OF AMOUNT FINANCED
<S> <C> <C>
(1) Cash Price (including $1124.76 sales tax)....................................................$17,192.76(1)
(2) Total Downpayment = Net Trade-in $ N/A + Cash
Downpayment $3,255.76........................................................................$ 3,255.76(2)
----------
(3) Unpaid Balance of Cash Price (1 minus 2).....................................................$13,937.00(3)
----------
(4) Amounts Paid on Your Behalf
To Public Officials (i) for official fees (license, title
& registration fees $25.00,
and for filing fees $ N/A );
(ii) for taxes (not in Cash Price) $ N/A ....................................$25.00
To Insurance Companies for
Vehicle Insurance......................................................... N/A
Credit Life Insurance..................................................... N/A
Credit Disability Insurance............................................... N/A
-------------------------................................................. N/A
To -------------------- for ---------------------- ............................ N/A
To -------------------- for ---------------------- ............................ N/A
To -------------------- for ---------------------- ............................ N/A
Total.................................................................... $ 25.00(4)
----------
(5) Amount Financed (3 plus 4)..................................................... $13,962.00(5)
----------
- ----------------------------------------------------------------------------------------------------------------------
Amount Financed (The amount of credit provided to you or on your behalf).........................$13,962.00
----------
FINANCE CHARGE (The dollar amount the credit will cost you)......................................$ 3,522.00
----------
ANNUAL PERCENTAGE RATE (The cost of your credit as a yearly rate).................. 11.50%
-----
Total of Payments (The amount you will have paid when you have made all scheduled payments)......$17,484.00
----------
<CAPTION>
Payment Schedule - Your payment schedule will be:
<S> <C> <C>
/ / Number of Amount of Each When Payments
Payments Payment are Due
47 $364.25 monthly starting
1 Final $364.25 Jan. 18, 1992
/ /
<CAPTION>
<S> <C>
Total Sale Price (The total price of your purchase on credit, including your downpayment of $3,255.76) $20,739.76
</TABLE>
Prepayment: You may be entitled to a refund of part of the Finance Charge if you
pay off your debt early.
Late Payment: You must pay a late charge on each payment made more than 10
days late. If the Cash Sale Price is $10,000 or less the charge
is 5 percent of the late payment or $5.00, whichever is less.
Otherwise the charge is 7.5 percent of the late payment or
$50.00, whichever is less.
Security Interest: You are giving a security interest in the vehicle being
purchased.
Contract: Please see this contract for additional information on security
interest, nonpayment, default, the right to require repayment of
your debt in full before the scheduled date and prepayment refund.
- -------------------------------------------------------------------------------
<PAGE> 60
COMMERCIAL OR AGRICULTURAL USE CONTRACTS: The charge shown in the above box
for late payment is applicable to personal, family or household use contracts
only. If you purchased the vehicle for commercial or agricultural use, you
must pay a late charge on each payment made more than 10 days late of 7.5 per
cent of the late payment or $50.00, whichever is less.
INSURANCE
A. VEHICLE INSURANCE:
You are required to insure the vehicle. If a charge is shown below, the
Creditor will try to buy the coverages checked for the term shown. Coverages
will be based on the cash value of the vehicle at the time of loss but not
more than the limits of the policy.
<TABLE>
<S> <C> <C>
/ / Comprehensive / / Fire-Theft-Combined / / Term ----- Months (Estimate)
Additional Coverage
/ / $------- deductible / / Towing and Labor Premium $ N/A
collision
</TABLE>
THIS DOES NOT INCLUDE INSURANCE ON YOUR LIABILITY FOR BODILY INJURY OR
PROPERTY DAMAGE. WITHOUT SUCH INSURANCE, YOU MAY NOT OPERATE THIS
VEHICLE ON PUBLIC HIGHWAYS.
VEHICLE INSURANCE MAY BE OBTAINED FROM A PERSON OF YOUR CHOICE
B. CREDIT AND OTHER OPTIONAL INSURANCE:
CREDIT LIFE, CREDIT DISABILITY AND OTHER OPTIONAL INSURANCE ARE NOT
REQUIRED TO OBTAIN CREDIT AND WILL NOT BE PROVIDED UNLESS YOU SIGN AND
AGREE TO PAY THE PREMIUM
<TABLE>
<S> <C>
/ / Credit Life ----------------------- ---------------------- $ N/A -------------------
Insurer Insured(s) Premium Signature
/ / Credit ----------------------- ---------------------- $ N/A -------------------
Disability Insurer Insured(s) Premium Signature
</TABLE>
Credit Life and Credit Disability insurance are for the term of the
contract. The amount and coverages are shown in a notice or agreement
given to you on this date.
<TABLE>
<S> <C>
/ / ----------------------- ---------------------- -------- $ N/A -------------------
Type of Insurance Insurer Term Premium Signature
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTICE TO RETAIL BUYER
DO NOT SIGN THIS CONTRACT IN BLANK.
YOU ARE ENTITLED TO A COPY OF THE CONTRACT AT THE TIME YOU SIGN.
KEEP IT TO PROTECT YOUR LEGAL RIGHTS.
BUYER ACKNOWLEDGES RECEIPT OF A TRUE AND COMPLETELY FILLED IN COPY OF THIS
CONTRACT AT THE TIME OF SIGNING.
BUYER /S/ Ronald M. Kaplan Pres. (CO)BUYER /s/ Ronald M. Kaplan
SIGNS -------------------------------- SIGNS --------------------------
SEE BACK FOR ADDITIONAL AGREEMENTS
By signing below, the Seller accepts this contract.
SELLER PARK PONTIAC By Title
---------------------- ---------------- -------------------
- -------------------------------------------------------------------------------
ASSIGNMENT: If no other Assignee is named in a separate assignment attached
to this contract the Seller assigns it to Ford Motor Credit Company under the
Assignment on the back of this contract.
SELLER PARK PONTIAC By Title
---------------------- ---------------- -------------------
- ------------------------------------------------------------------------------
C 17629 APR 91 Previous editions may NOT be used.
FOR SELLER'S USE ONLY KEY-I KEY-G 91-002 ORIGINAL
ADDITIONAL AGREEMENTS
A. Payments: You must make all payments when they are due. You may prepay
your debt at any time. If you prepay in full, you will get a refund of part
of the Finance Charge. If the vehicle is purchased for personal, family or
household use and the cash price is $10,000 or less, the refund will be
figured by the actuarial method. Otherwise the refund will be figured by the
sum of the digits method after first substracting $50.00 from the Finance
Charge.
The Creditor is not liable though if he cannot do so. If these coverages
cost more than the amount shown for insurance, the Creditor may buy them
for a shorter term or he may give you credit for the amount shown. If he
cannot buy any insurance, he will give you credit for the amount shown.
The credit will be made to the next payments due, if allowed by law.
E. Late Charge: You will have to pay a late charge on each payment
<PAGE> 61
EXHIBIT 3.17
INSURANCE POLICIES
Certificates of Insurance Attached
<PAGE> 62
<TABLE>
THE HANOVER INSURANCE COMPANIES
BUSINESS AUTO POLICY
RENEWAL DECLARATIONS
RENEWAL OF POLICY
ADY 5023232
- ----------------------------------------------------------------------------------------------------------------------
POLICY PERIOD
POLICY NUMBER FROM TO COVERAGE IS PROVIDED IN THE AGENCY CODE
- ----------------------------------------------------------------------------------------------------------------------
ADY 5023232 02 11/24/96 11/24/97 MASSACHUSETTS BAY INSURANCE CO. 410720400
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
NAMED INSURED AND ADDRESS AGENT
- ----------------------------------------------------------------------------------------------------------------------
<S> <C>
ITEM ONE TELEPHONE: 201-887-5200
MVAK TECHNOLOGIES, INC. THORNTON AGENCY, INC.
P.O. BOX 296 SUITE 200
299-4 RIDGEDALE AVE 333 LITTLETON ROAD
EAST HANOVER, NJ 07936 PARSIPPANY, NJ 07054
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
POLICY PERIOD - 12:01 AM STANDARD TIME AT THE NAMED INSUREDS ADDRESS STATED
ABOVE. FORM OF NAMED INSUREDS BUSINESS - CORPORATION
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
ITEM TWO - SCHEDULE OF COVERAGES AND COVERED AUTOS
EACH OF THESE COVERAGES WILL APPLY ONLY TO THOSE AUTOS SHOWN AS COVERED AUTOS.
AUTOS ARE SHOWN AS COVERED AUTOS FOR A PARTICULAR COVERAGE BY THE ENTRY OF ONE
OR MORE OF THE SYMBOLS FROM THE COVERED AUTOS SECTION OF THE BUSINESS AUTO
COVERAGE FORM CA 0001.
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
COVERED LIMIT - THE MOST WE WILL PAY FOR
COVERAGES AUTOS ANY ONE ACCIDENT OR LOSS PREMIUM
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LIABILITY INSURANCE 01 $500,000 COMBINED SINGLE LIMIT $1,233
- ----------------------------------------------------------------------------------------------------------------------
AUTO MED. PAY. INS. 02 $10,000 $ 116
- ----------------------------------------------------------------------------------------------------------------------
UNINSURED MOTORISTS<F*> 02 $500,000 $ 107
- ----------------------------------------------------------------------------------------------------------------------
PERS. INJURY PROT 05 SEE ITEM THREE FOR PIP COVERAGE $ 1
- ----------------------------------------------------------------------------------------------------------------------
PHYSICAL DAMAGE INS. ACTUAL CASH VALUE OR COST OF REPAIR,
WHICHEVER IS LESS, MINUS DEDUCTIBLE
- ----------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE 07 SEE ITEM THREE FOR DEDUCTIBLE FOR EACH $ 105
COVERED AUTO FOR ALL LOSS. NO DEDUCTIBLE
APPLIES TO LOSS BY FIRE OR LIGHTNING. SEE
ITEM FOUR FOR HIRED OR BORROWED "AUTOS".
- ----------------------------------------------------------------------------------------------------------------------
COLLISION 07 SEE ITEM THREE FOR DEDUCTIBLE FOR EACH $ 189
COVERED AUTO. SEE ITEM FOUR FOR HIRED OR
BORROWED "AUTOS".
- ----------------------------------------------------------------------------------------------------------------------
<FN>
<F*> FOR THE FOLLOWING STATES UNDERINSURED MOTORIST COVERAGE IS INCLUDED FOR
THOSE COMMERCIAL AUTOS (VEHICLES #010-999) DESCRIBED IN ITEM THREE FOR
WHICH A PREMIUM CHARGE IS SHOWN: NJ
- ----------------------------------------------------------------------------------------------------------------------
FORMS AND ENDORSEMENTS CONTAINED IN THE POLICY AT ITS INCEPTION-
CA0001 1293+, CAO184 0995+, IL0208 0689+, CA0188 0995+, CA0187 0995+,
CA9903 1293+, CA2230 0995+, CA2114 0995+.
- ----------------------------------------------------------------------------------------------------------------------
ESTIMATED TOTAL (ANNUAL) PREMIUM $ 1751.00
------------------------------------------------------------------------------
N.J. PROPERTY-LIABILITY GUARANTEE ASSOC. CHARGE $ 5.25
ESTIMATED TOTAL PREMIUM INCLUDING GUARANTEE ASSOC. CHG. $1,756.25
</TABLE>
COUNTERSIGNED THIS 9TH DAY OF OCTOBER, 1996 /S/
------------------------------
AUTHORIZED REPRESENTATIVE
THESE DECLARATIONS TOGETHER WITH THE BUSINESS AUTO POLICY PROVISIONS AND
ENDORSEMENTS, IF ANY, ISSUED TO FORM A PART THEREOF, COMPLETE THE ABOVE
NUMBERED POLICY.
- -------------------------------------------------------------------------------
PAGE 1 DIRECT BILL
7 INSURED ISSUE DATE 09/20/96
<PAGE> 63
<TABLE>
THE HANOVER INSURANCE COMPANIES
BUSINESS AUTO POLICY
RENEWAL DECLARATIONS
RENEWAL OF POLICY
ADY 5023232
- ----------------------------------------------------------------------------------------------------------------------
POLICY PERIOD
POLICY NUMBER FROM TO COVERAGE IS PROVIDED IN THE AGENCY CODE
- ----------------------------------------------------------------------------------------------------------------------
ADY 5023232 02 11/24/96 11/24/97 MASSACHUSETTS BAY INSURANCE CO. 410720400
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
NAMED INSURED AND ADDRESS AGENT
- ----------------------------------------------------------------------------------------------------------------------
<S> <C>
ITEM ONE TELEPHONE: 201-887-5200
MVAK TECHNOLOGIES, INC. THORNTON AGENCY, INC.
P.O. BOX 296 SUITE 200
299-4 RIDGEDALE AVE 333 LITTLETON ROAD
EAST HANOVER, NJ 07936 PARSIPPANY, NJ 07054
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
ITEM THREE- SCHEDULE OF COVERED AUTOS YOU OWN
CHG
COST/ STATED EFF
AUTO ST TER YR DESCRIPTION SERIAL NUMBER SYMBOL CLASS AMOUNT DATE
10 NJ 025 95 GMC VANDURA 1GTGG39K6SF506626 20,000 01199 11/24
- ----------------------------------------------------------------------------------------------------------------------
MED PAY
AUTO LIMITS UNINSURED/UNDERINSURED MOTORIST LIMITS
<S> <C> <C>
10 $10,000 $500,000
- ----------------------------------------------------------------------------------------------------------------------
AUTO PERSONAL INJURY PROTECTION
10 PEDESTRIAN COV
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
PHYS DAM COVERAGE & DEDUCTIBLES OTHER COVERAGES
AUTO COMP COLL
<S> <C> <C>
10 $500 $500
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
PREMIUMS-- ADDED MED UM/ COMP/SPEC TOW & OBEL/ TOTAL
AUTO SL PIP PIP PAY UND PERILS COLLISION LABOR OTHER PREMIUM
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10 $1070 $1 $116 $107 $105 $189 $1,588
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
PAGE 2 DIRECT BILL
8 INSURED ISSUE DATE 09/20/96
<PAGE> 64
<TABLE>
THE HANOVER INSURANCE COMPANIES
BUSINESS AUTO POLICY
RENEWAL DECLARATIONS
RENEWAL OF POLICY
ADY 5023232
- ----------------------------------------------------------------------------------------------------------------------
POLICY PERIOD
POLICY NUMBER FROM TO COVERAGE IS PROVIDED IN THE AGENCY CODE
- ----------------------------------------------------------------------------------------------------------------------
ADY 5023232 02 11/24/96 11/24/97 MASSACHUSETTS BAY INSURANCE CO. 410720400
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
NAMED INSURED AND ADDRESS AGENT
- ----------------------------------------------------------------------------------------------------------------------
<S> <C>
ITEM ONE TELEPHONE: 201-887-5200
MVAK TECHNOLOGIES, INC. THORNTON AGENCY, INC.
P.O. BOX 296 SUITE 200
299-4 RIDGEDALE AVE 333 LITTLETON ROAD
EAST HANOVER, NJ 07936 PARSIPPANY, NJ 07054
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
ITEM FOUR- SCHEDULE OF HIRED OR BORROWED COVERED AUTOMOBILE COVERAGE
LIABILITY INSURANCE - RATING BASIS, COST OF HIRE - CLASS 6611
ESTIMATED RATE PER $100 LIABILITY
STATE COST OF HIRE COST OF HIRE PREMIUM
<S> <C> <C> <C>
NJ IF ANY 3.415 $92
TOTAL PREMIUM $92
</TABLE>
COST OF HIRE MEANS THE TOTAL AMOUNT YOU INCUR FOR THE HIRE OF AUTOS YOU DO NOT
OWN (NOT INCLUDING AUTOS YOU BORROW OR RENT FROM YOUR EMPLOYEES OR THEIR FAMILY
MEMBERS). COST OF HIRE DOES NOT INCLUDE CHARGES FOR SERVICES PERFORMED BY MOTOR
CARRIERS OF PROPERTY OR PASSENGERS.
ITEM FIVE- SCHEDULE FOR EMPLOYERS NON-OWNERSHIP LIABILITY
COVERED AUTOS BORROWED FROM YOUR EMPLOYEES OR MEMBERS OF THEIR
HOUSEHOLD-RATING BASIS, NUMBER OF EMPLOYEES
CLASS ESTIMATED NUMBER LIABILITY
STATE CODE OF EMPLOYEES PREMIUM
NJ 6601 IF ANY $71
TOTAL $71
IF THE BILL FOR YOUR POLICY IS NOT ENCLOSED, IT WILL BE SENT TO YOU SEPARATELY.
PAGE 3 DIRECT BILL
9 INSURED ISSUE DATE 09/20/96
- --------------------------------------------------------------------------------
<PAGE> 65
81 (Policy Provisions: WC 00 00 00 (NM ONLY), WC 00 00 00 A)
54
CZ INFORMATION PAGE - AR
WZ WORKERS COMPENSATION AND EMPLOYERS LIABILITY POLICY
INSURER: HARTFORD UNDERWRITERS INSURANCE COMPANY
HARTFORD PLAZA, HARTFORD, CONNECTICUT 06116
NCCI Company Number: 10456 [ITT HARTFORD LOGO]
Company Code: 6
Suffix
LARS RENEWAL
POLICY NUMBER: 77 WZ CZ5481 00
Previous Policy Number: 77 WZ NB4743
1. Named Insured and Mailing Address: MVAK TECHNOLOGIES INC.
(No., Street, Town, State, Zip Code) PO BOX 296
EAST HANOVER, NJ 07936
FEIN Number: 222416696
State Identification Number(s): NJ 268354
The Named Insured Is: CORPORATION
Business of Named Insured: REPAIR OF VACUUM PUMPS
Other Workplaces Not Shown Above: 2994 RIDGEDALE AVE E. HANOVER NJ
2. Policy Period: From 04/22/96 To 04/05/97 SHORT TERM
12:01 a.m., Standard time at the insured's mailing address.
Producer's Name: NEW JERSEY REINS POOL
THORNTON AGENCY INC
333 LITTLETON RD
PARSIPPANY, NJ 07054
Producers Code: 653474
Issuing Office: ITT HARTFORD
P.O. BOX 659511
SAN ANTONIO TX 78265
(800) 852-7991
- -------------------------------------------------------------------------------
Total Estimated Annual Premium: $2,572
Deposit Premium:
Policy Minimum Premium: $ 280 NJ
- -------------------------------------------------------------------------------
Audit Period: ANNUAL Installment Term:
The policy is not binding unless countersigned by our authorized
representative.
/s/ Jerry Marbach
Authorized Representative
Form WC 00 00 01 A Printed in U.S.A. Page 1 (Continued on next page)
Process Date: 04/30/96 Policy Expiration Date: 04/05/97
ORIGINAL
<PAGE> 66
INFORMATION PAGE (Continued) Policy Number: 77 WZ CZ5481
3.A. Workers Compensation Insurance: Part one of the policy applies to the
Workers Compensation Law of the states listed here: NJ
B. Employers Liability Insurance: Part Two of the policy applies to work
in each state listed in Item 3.A. The limits of our liability under
Part Two are:
Bodily injury by Accident $100,000 each accident
Bodily injury by Disease $500,000 policy limit
Bodily injury by Disease $100,000 each employee
C. Other States Insurance: Part Three of the policy applies to the states,
if any, listed here:
ALL STATES EXCEPT NV, ND, OH, WA, WV, WY, TX, ME, RI, MN, LA, FL, CA, NY,
MA, WI, MS, CO, MD, MT, OK, PA, UT, AK, HI, NM, MO, KY AND STATES
DESIGNATED IN ITEM 3.A. OF THE INFORMATION PAGE
D. This policy includes these endorsements and schedule:
WC 29 03 01
4. The premium for this policy will be determined by our Manuals of Rules,
Classifications, Rates and Rating Plans. All information required
below is subject to verification and change by audit.
<TABLE>
- ------------------------------------------------------------------------------------------
<CAPTION>
Premium Basis
Classifications Total Estimated Rates Per Estimated
Code Number and Annual $100 of Annual
Description Remuneration Remuneration Premium
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
3685 88,531 1.68 1,487
INSTRUMENT MFG NOC
8742 31,291 .64 200
SALESMEN OUTSIDE
8810 138,807 .37 514
CLERICAL OFFICE EMPLOYEES NOC
</TABLE>
<TABLE>
<S> <C>
TOTAL PREMIUM SUBJECT TO EXPERIENCE MODIFICATION 2,201
NJ - INTRA EXPERIENCE MODIFICATION 1.016
PREMIUM ADJUSTED BY APPLICATION OF EXPERIENCE MODIFICATION 2,236
TOTAL ESTIMATED ANNUAL STANDARD PREMIUM 2,236
EXPENSE CONSTANT 0900 153
NJ ESTIMATED 2ND INJURY FUND SURCHARGE 8.030 PERCENT 180
NJ ESTIMATED UNINSURED EMPLOYERS FUND SURCHARGE 0.150 PERCENT 3
TOTAL ESTIMATED ANNUAL PREMIUM 2,572
- ------------------------------------------------------------------------------------------
</TABLE>
Total Estimated Annual Premium: $2,572
Deposit Premium:
Policy Minimum Premium: $280 NJ
- -------------------------------------------------------------------------------
Interstate/Intrastate Identification Number:
Labor Contractors Policy Number: SIC:
Form WC 00 00 01 A (1) Printed in U.S.A. Page 2
Process Date: 04/30/96 Policy Expiration Date: 04/05/97
<PAGE> 67
MVAK TECHNOLOGIES, INC.
POLICY SUMMARY
DECEMBER 3, 1996
- ------------------------------------------------------------------------------
IMPORTANT COMMENTS
This summary provides only a brief description of some of the coverages and
protection you have purchased. It schedules all of the policies issued
through this office but does not fully describe any contract. The summary
does not go into detail as respects policy conditions, limitations,
extensions and restrictions, definitions or exclusions. Do not use this
summary as a substitute for reading and understanding your actual policies
since it is only meant to highlight some parts of each one. Only the language
of the actual policy determines the scope and extent of your insurance
protection. If there are any discrepancies between your policies and this
summary, THE PROVISIONS OF THE POLICY SHALL PREVAIL. If you note any
------------------------------------------
inconsistencies between the policy summary and the insurance contracts or
any letter written to you by this office, please contact me immediately.
- ------------------------------------------------------------------------------
I POLICY FORM -COMMERCIAL LINES POLICY
-----------------------
SCHEDULED - 299-4 Ridgedale Ave., East Hanover, NJ
PREMISES
POLICY COVERAGE
COMMERCIAL PROPERTY SECTION
---------------------------
Building and Personal Property Form (Form CP 00 10 10/91) - This form
-----------------------------------
outlines your covered property (building and/or business personal
property); property not covered (read this section very carefully);
additional coverages; coverage extensions; limits of insurance
(i.e., signs limited to $1,000 attached to the building); loss
conditions; additional conditions; optional coverages (agreed value
inflation guard and replacement cost) and definitions (read this
section very carefully).
Optional coverages under this form (agreed value, inflation guard and
replacement cost) do not apply unless shown below or in the policy
limits section of this summary.
1. Replacement cost
Cause of Loss-Special Form (Form CP 10 30 10/91) - "Risks of direct
--------------------------
physical loss" are covered losses unless excluded or limited by the form.
Not all causes of loss are covered. It is imperative you carefully read
this form to understand the company's intent of coverage before a loss
occurs.
NOTE: The following are examples of only some of the items that are not
covered, covered for only limited perils and/or values or
excluded:
Property Not Covered
--------------------
1. Money
2. Walks or paved surfaces
3. Foundations
4. Retaining walls not part of the building
5. Underground pipes
Page 1 of 7
THORNTON AGENCY
INSURANCE
<PAGE> 68
MVAK TECHNOLOGIES, INC.
POLICY SUMMARY
DECEMBER 3, 1996
- ------------------------------------------------------------------------------
I POLICY COVERAGE
COMMERCIAL PROPERTY SECTION (continued)
---------------------------
Limited Perils and/or Values Apply
----------------------------------
1. Newly acquired or constructed property
2. Personal effects of employees and property of others
3. Valuable papers
4. Property off premises or more than 100 feet from the building
5. Fences, trees, shrubs, antennas and signs
6. Vacancy more than sixty (60) consecutive days
7. Glass
8. Theft of jewelry, furs, patterns, dies, molds, forms, stamps
9. Debris removal
Exclusions (Partial Listing)
----------
1. Earth movement
2. Building ordinance or law
3. Nuclear hazard
4. Power failure (limited coverage applies if failure occurs on
--
premises - no coverage at all if failure occurs off
---
premises)
5. Flood, surface water, tidal water, back up of sewers, water
under the ground
6. Explosion of steam boilers
7. Continuous or repeated seepage of water
8. Employee dishonesty
9. Optional coverages mentioned above unless purchased
Coinsurance Clause - This policy contains a coinsurance clause. The effect
------------------
of the clause is the same whether called Coinsurance, Contribution or
Average. The clause grants you a reduction in rate for your acceptance
of a condition that you maintain insurance at the specified percentage
of the true value of the property covered. You become a co-insurer or
contributor in a partial loss if you fail to maintain the insurance at
the required level. The clause is not effective in the event of a total
loss. The coinsurance clause always applies to the present value of
insured property regardless of its value at the time insurance was made
effective. It is extremely important that the insurance be maintained in
accordance with present replacement values and the coinsurance
requirement.
Replacement Cost Endorsement - This optional coverage extends protection
----------------------------
to cover the difference between the actual cash value and the actual cost
of repairs or replacement without deduction for depreciation. The coverage
applies subject to limitations stated in the endorsement.
Page 2 of 7
THORNTON AGENCY
INSURANCE
<PAGE> 69
MVAK TECHNOLOGIES, INC.
POLICY SUMMARY
DECEMBER 3, 1996
- ------------------------------------------------------------------------------
I POLICY COVERAGE (continued)
COMMERCIAL GENERAL LIABILITY SECTION
------------------------------------
Commercial General Liability Form (Form CG 00 01 10/93) - This form
---------------------------------
outlines your coverage for business liability (bodily injury,
property damage, personal injury, advertising injury and medical
payments). Each coverage section is followed by exclusions - remember
not all losses are covered. It is critical you know and understand
the company's intent of coverage before a loss occurs. The contract
also describes supplementary payments, who is an insured, limits of
insurance (read this section carefully - AGGREGATE LIMITS APPLY)
conditions and definitions (read this section very carefully).
Additional Coverage Endorsements - None
--------------------------------
NOTE: The following are examples of some of the exclusions
applicable to liability coverages:
1. Assumed liability in a contract or agreement unless
it is an "insured contract"
2. Liquor liability if you are in the business of
manufacturing, distributing, selling, servicing or
furnishing alcoholic beverages
3. Pollutants - actual, alleged or threatened
4. Rendering or failure to render professional
services
5. Damage to property in your care, custody or
control; you are working on; or impaired property
COMMERCIAL INLAND MARINE SECTION
--------------------------------
Package Broadening Form - See form for full explanation of coverages.
-----------------------
a. Accounts Receivable
b. Valuable Papers
c. Extra Expense
d. Property Off Premises (including transportation)
e. Property of Others
f. Fine Arts
g. Commercial Tools & Small Equipment
h. Signs
I. Glass (Limited)
j. Money & Securities
k. Employee Dishonesty
l. Refrigerated Goods Spoilage
POLICY LIMITS
COMMERCIAL PROPERTY SECTION
---------------------------
Not Covered - Building
$ 263,920 - Business Personal Property (owned) - Replacement Cost -
80% coinsurance clause applies
$500 DEDUCTIBLE APPLIES TO ABOVE LIMITS
Page 3 of 7
THORNTON AGENCY
INSURANCE
<PAGE> 70
MVAK TECHNOLOGIES, INC.
POLICY SUMMARY
DECEMBER 3, 1996
- ------------------------------------------------------------------------------
I POLICY LIMITS (continued)
COMMERCIAL GENERAL LIABILITY SECTION
------------------------------------
$ 2,000,000 General Aggregate Limit
NOT COVERED Products - Completed Operations
$ 1,000,000 Personal and Advertising Injury Limit
$ 1,000,000 Each Occurrence Limit
$ 50,000 Fire Damage Limit - any one fire (This is liability
coverage for property of others. Damage to your
property is not included.)
$ 5,000 Medical Expense Limit - any one person
COMMERCIAL INLAND MARINE SECTION
--------------------------------
Package Broadening Form
-----------------------
$25,000 Accounts Receivable
$10,000 Valuable Papers on premises - $1,000 off premises
$10,000 Property off premises (including transportation)
$50,000 Extra Expense
$50,000 Property of Others
$ 5,000 Fine Arts
$10,000 Commercial Tools and Small Equipment
$ 2,500 Signs
$ 1,000 Glass ($250 per plate)
$ 2,000 Money and Securities
$ 5,000 Employee Dishonesty
$ 2,500 Refrigerated Goods Spoilage
$250 DEDUCTIBLE APPLIES TO BROADENING FORM
------------------------------------------
LIABILITY -$900,000 Gross Sales
RATING BASIS
MORTGAGEES -NONE
LOSS PAYEES -Commerce Security Bank
POLICY DATES -November 24, 1996 to November 24, 1997
PREMIUM -$2,183.00 Subject to Final Audit on General Liability
II POLICY FORM -BUSINESS AUTOMOBILE POLICY
--------------------------
POLICY COVERAGE - Liability Insurance (Lawsuit Threshold Applies)
Page 4 of 7
THORNTON AGENCY
INSURANCE
<PAGE> 71
MVAK TECHNOLOGIES, INC.
POLICY SUMMARY
DECEMBER 3, 1996
- ------------------------------------------------------------------------------
II POLICY COVERAGE (continued)
Pedestrian PIP
Uninsured/Underinsured Motorists
Comprehensive
Collison
Hired or Borrowed Auto Coverage - included. This is
-------
liability coverage only - does not include
------------------------------------------
comprehensive or collison coverages.
------------------------------------
Nonownership Liability - included. This is liability
-----------------
coverage only - does not include comprehensive or
------------------------------------------------
collision coverages.
--------------------
VEHICLES - 1. 1995 GMC Vandura
LOSS PAYEES AND - None
ADDITIONAL
INSUREDS
POLICY LIMITS - Liability Insurance - $500,000
Uninsured/Underinsured Motorists - $500,000
Comprehensive - $500 deductible
Collision - $500 deductible
POLICY DATES - November 24, 1996 to November 24, 1997
PREMIUM - $1,751.00 + $5.25 NJ Surcharge
III POLICY FORM - WORKERS COMPENSATION
--------------------
POLICY COVERAGE - Insures loss due to statutory liability as a result
of personal injury or death suffered by employees in
the course of their employment.
ESTIMATED - Instrument Manufacturing - NOC - $127,359
PAYROLLS - Clerical Office Employees - NOC - $143,005
Salesmen - Outside - If any
EXPERIENCE - 1996 - 0.929
MODIFICATION - 1995 - 1.016
1994 - 1.070
POLICY LIMITS - Statutory compensation in amounts prescribed by
law Employer's Liability
Page 5 of 7
THORNTON AGENCY
INSURANCE
<PAGE> 72
MVAK TECHNOLOGIES, INC.
POLICY SUMMARY
DECEMBER 3, 1996
- ------------------------------------------------------------------------------
III POLICY LIMITS (Continued)
Bodily Injury by Accident - $100,000 each accident
Bodily Injury by Disease - $100,000 each employee
Bodily Injury by Disease - $500,000 policy limit
POLICY DATES - April 22, 1996 to April 5, 1997
PREMIUM - $2,836.00 - Subject to final audit
FINAL NOTES
-----------
Again, this summary is only a brief description of the coverages and protection
you have purchased. It does not go into detail as respects policy conditions,
limitations, extensions and restrictions, definitions or exclusions. It can't
be used as a substitute for reading and understanding the actual policies since
it is only meant to highlight some parts of the policies. Be certain to read
your policies carefully so that you have a thorough understanding of your
coverages. Only the provisions of the actual policies determine the scope
and extent of your insurance protection. If you find additional coverage
is required or desired after reading these policies, contact my office at
once as it can generally be purchased at extra cost. An important thing
to remember is almost everything is insurable, but the chance of loss,
assumption of risk and self-insurance are important considerations in
purchasing insurance and containment of costs. Some examples of uninsured
or underinsured exposures which may or may not be present are:
<TABLE>
<S> <C>
Property
--------
Accidental Breakdown Installation Floater
Accounts Receivable Leasehold Interest
Agreed Value Money & Securities
Bailee's Customers Goods Floater Off Premises Coverage
Boiler & Machinery/Air Conditioning Ordinance or Law
Burglary & Theft Personal Property of Others
Business Interruption Pollution Cleanup & Removal
Computers/Electronic Equipment Processing Floater
Contingent Business Interruption Selling Price Endorsement
Contingent Extra Expense Signs
Debris Removal Tool & Equipment Floater
Demolition Insurance Transportation Floater
Earthquake Utility Services
Employees' Personal Effects Valuable Papers
Extra Expense Value Added
Fire Department Service Charge Water Damage (sewers & drains)
Flood Other optional coverages shown above
Improvements & Betterments
Page 6 of 7
THORNTON AGENCY
INSURANCE
<PAGE> 73
MVAK TECHNOLOGIES, INC.
POLICY SUMMARY
DECEMBER 3, 1996
- ------------------------------------------------------------------------------
FINAL NOTES
-----------
(Continued)
General Liability
- -----------------
Additional Insureds Fire Damage Liability
Care, Custody & Control Exclusion Liquor Law Liability
Contractual Liability Pollution and/or Contamination Liability
Employee Benefit Liability Products Liability
Fiduciary Liability Umbrella Liability
Fideltiy
- --------
Credit Card Forgery Employee Dishonesty
Depositors Forgery Pension Bonds (ERISA)
Automobile
- ----------
Car Telephones Stereo Tapes & CD's
Customizing Equipment Transmitting & Receiving Radio Equipment
Rental Reimbursement
Miscellaneous
- -------------
Bonds Extortion/Kidnap Coverage
Business Legal Expense Hired & Non-owned Auto Physical Damage
Computer Fraud Sexual Harassment Defense
Directors' & Officers' Liability Travel Accident Insurance
Discrimination Defense Workers Compensation
Employee vs. Employee Exclusion Wrongful Termination Defense
</TABLE>
Page 7 of 7
THORNTON AGENCY
INSURANCE
<PAGE> 74
MVAK TECHNOLOGIES, INC.
POLICY SUMMARY
DECEMBER 3, 1996
- ------------------------------------------------------------------------------
IMPORTANT COMMENTS
This summary provides only a brief description of some of the coverages and
protection you have purchased. It schedules all of the policies issued
through this office but does not fully describe any contract. The summary
does not go into detail as respects policy conditions, limitations,
extensions and restrictions, definitions or exclusions. Do not use this
summary as a substitute for reading and understanding your actual policies
since it is only meant to highlight some parts of each one. Only the language
of the actual policy determines the scope and extent of your insurance
protection. If there are any discrepancies between your policies and this
summary, THE PROVISIONS OF THE POLICY SHALL PREVAIL. If you note any
------------------------------------------
inconsistencies between the policy summary and the insurance contracts or
any letter written to you by this office, please contact me immediately.
- ------------------------------------------------------------------------------
I POLICY FORM -COMMERCIAL LINES POLICY
-----------------------
SCHEDULED - 299-4 Ridgedale Ave., East Hanover, NJ
PREMISES
POLICY COVERAGE
COMMERCIAL PROPERTY SECTION
---------------------------
Building and Personal Property Form (Form CP 00 10 10/91) - This form
-----------------------------------
outlines your covered property (building and/or business personal
property); property not covered (read this section very carefully);
additional coverages; coverage extensions; limits of insurance
(i.e., signs limited to $1,000 attached to the building); loss
conditions; additional conditions; optional coverages (agreed value
inflation guard and replacement cost) and definitions (read this
section very carefully).
Optional coverages under this form (agreed value, inflation guard and
replacement cost) do not apply unless shown below or in the policy
limits section of this summary.
1. Replacement cost
Cause of Loss-Special Form (Form CP 10 30 10/91) - "Risks of direct
--------------------------
physical loss" are covered losses unless excluded or limited by the form.
Not all causes of loss are covered. It is imperative you carefully read
this form to understand the company's intent of coverage before a loss
occurs.
NOTE: The following are examples of only some of the items that are not
covered, covered for only limited perils and/or values or
excluded:
Property Not Covered
--------------------
1. Money
2. Walks or paved surfaces
3. Foundations
4. Retaining walls not part of the building
5. Underground pipes
Page 1 of 7
THORNTON AGENCY
INSURANCE
<PAGE> 75
[letterhead of Thornton Agency, Inc. Insurance]
December 4, 1996
Mr. Michael Metropolis
MVAK Technologies
299-4 Ridgedale Avenue
East Hanover, NJ 07936
RE: COMMERCIAL POLICY SUMMARY
Dear Mike:
Enclosed is a copy of a policy summary for your commercial insurance
program.
The summary highlights the major coverages for your insurance program. Please
take time to review the summary, but be careful not to use it as a substitute
for reading the actual contracts.
Your workers compensation coverage continues uninterrupted through April 1997.
Both the commercial package and business automobile policies were renewed with
coverages identical to the expiring terms.
The only change in the commercial package was a small increase in the proeprty
limit to accommodate for the affects of inflation.
If you have any concerns or questions regarding your summary, please don't
hesitate to contact me.
Best wishes for a happy and healthy holiday season to you and everyone in
your office.
Regards,
/s/ Peter K. Thornton
Peter K. Thornton
PKT:kg
Enclosure
<PAGE> 76
- ------------------------------------------------------------------------------
NATIONWIDE MASSACHUSETTS BUSINESS AUTO
INSURANCE COVERAGE FORM DECLARATIONS
HOME OFFICE . COLUMBUS, OHIO NAMED INSURED INFORMATION PAGE
- ------------------------------------------------------------------------------
ISSUED BY: NATIONWIDE MUTUAL INSURANCE COMPANY
-----------------------
Policy Number:
51GA-868-078-0001M
-----------------------
Names Insured MVAK Technologies, Inc.
Mailing Address 29 Cook Street
Billerica, MA 01821
POLICY PERIOD:
Policy covers FROM April 1, 1996 TO April 1, 1997
---------------------- --------------------
12:01 A.M. Standard Time at the Named Insured's
Address stated above.
FORM OF NAMED INSURED'S BUSINESS:
/X/ CORPORATION; / / PARTNERSHIP; / /INDIVIDUAL, OR
/ / OTHER:----------------------------------------------------------------
NAMED INSURED'S BUSINESS:------------------------------------------------------
IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS
POLICY, WE AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATED IN THIS POLICY.
Date of Issue: April 1, 1996 Issuing Office: Columbus, Ohio
------------------ ----------------------
Countersignature Date: 8-6-96/pk Agency At: Chelmsford, MA
-------------- ---------------------------
Auto 9020 Agent: J. Colangelo #0023099-20
<PAGE> 77
- ------------------------------------------------------------------------------
NATIONWIDE MASSACHUSETTS BUSINESS AUTO
INSURANCE COVERAGE FORM DECLARATIONS
HOME OFFICE . COLUMBUS, OHIO NAMED INSURED INFORMATION PAGE
- ------------------------------------------------------------------------------
ISSUED BY: NATIONWIDE MUTUAL INSURANCE COMPANY
-----------------------
Policy Number:
51GA-868-078-0001M
-----------------------
ITEM ONE
POLICY PERIOD:
Policy covers FROM April 1, 1996 TO April 1, 1997
---------------------- --------------------
12:01 A.M. Standard Time at the Named Insured's
Address stated above.
ITEM TWO SCHEDULE OF COVERAGES AND COVERED AUTOS
This policy provides only those coverages where a charge is shown in the
premium column below. Each of these coverages will apply only to those
"autos" shown as covered "autos." "Autos" are shown as covered "autos" for
a particular coverage by the entry of one or more of the symbols from the
COVERED AUTO Section of the Business Auto Coverage Form next to the name
of the coverage.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
COVERED AUTOS
(Entry of one or more of the
symbols from the COVERED AUTOS
Section of the Business Auto LIMIT
Coverage Form shows which autos THE MOST WE WILL PAY FOR ANY ONE
COVERAGES are covered autos) ACCIDENT OR LOSS PREMIUM
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$20,000 EACH PERSON
COMPULSORY BODILY INJURY 7, 8, 9 $40,000 EACH ACCIDENT $ 265.00
- -----------------------------------------------------------------------------------------------------------------------------
PERSONAL INJURY PROTECTION 5 $8,000 EACH PERSON $ 13.00
- -----------------------------------------------------------------------------------------------------------------------------
LIABILITY INSURANCE
- -----------------------------------------------------------------------------------------------------------------------------
$250,000 EACH PERSON
OPTIONAL BODILY INJURY 7 $500,000 EACH ACCIDENT $ 527.00
- -----------------------------------------------------------------------------------------------------------------------------
PROPERTY DAMAGE
(COMPULSORY LIMIT $5,000) 7 $100,000 EACH ACCIDENT $ 313.00
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
AUTO MEDICAL PAYMENTS 7 $5,000 EACH PERSON $ 7.00
- -----------------------------------------------------------------------------------------------------------------------------
UNINSURED MOTORISTS $100,000 EACH PERSON
(COMPULSORY LIMIT) 6 $300,000 EACH ACCIDENT $ 119.00
- -----------------------------------------------------------------------------------------------------------------------------
$ EACH PERSON
UNDERINSURED MOTORISTS $ EACH ACCIDENT $
- -----------------------------------------------------------------------------------------------------------------------------
PHYSICAL DAMAGE INSURANCE
- ------------------------------------------------------------------------------------------------------------------------------
ACTUAL
COMPREHENSIVE COVERAGE 7 CASH
VALUE $500 Deductible FOR EACH COVERED AUTO $ 82.00
- ---------------------------------------------------------------OR COST ------------------------------------------------------
SPECIFIED CAUSES OF OF
LOSS COVERAGE REPAIR, $ Deductible FOR EACH COVERED AUTO $
- ---------------------------------------------------------------WHICH- ------------------------------------------------------
COLLISION COVERAGE 7 EVER IS $500 Deductible FOR EACH COVERED AUTO $ 138.00
- ---------------------------------------------------------------LESS-----------------------------------------------------------
LIMITED COLLISION $ Deductible FOR EACH COVERED AUTO $
- ------------------------------------------------------------------------------------------------------------------------------
TOWING AND LABOR for each disablement of a private
"auto" $
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
FORMS AND ENDORSEMENTS CONTAINED IN THIS POLICY AT ITS INCEPTION
--------------------------------------------------------------------------
<S> <C>
SEE AUTO 9019-1 FOR ENDORSEMENTS PREMIUM FOR ENDORSEMENTS $ 198.00
--------------------------------------------------------------------------
ESTIMATED TOTAL PREMIUM $1,662.00
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
MM 00 97 09 91 Includes copyrighted material of Insurance Services Office
Auto 9019 with its permission. Copyright, Insurance Services
Office, Inc., 1990 (Part 1)
<PAGE> 78
FORMS ATTACHED TO THIS POLICY: IL 00 21 11 85 - Broad Form Nuclear Exclusion
(Not Applicable in New York)
Cas 3686(10-87), MM 99 11(9-91), Auto 9019, Auto 9019-1, Auto 9020,
CA 00 01(12-90), IL 00 17(11-85), IL 00 21(11-85), MM 99 54(9-91),
MM 99 13(-91), MM 99 17(9-91), MM 99 17(9-91), Auto 6755(1-78),
MM 99 22(9-91),
VEHICLE INFORMATION
1985 International Van #1HTLDUXM8FHA21647
ITEM THREE SCHEDULE OF COVERED AUTOS YOU OWN (See Attached Auto Schedule)
<TABLE>
ITEM FOUR SCHEDULE OF HIRED OR BORROWED COVERED AUTO COVERAGE AND PREMIUM
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
LIABILITY COVERAGE -- RATING BASIS, COST OF HIRE
- -----------------------------------------------------------------------------------------------------------------------------
ESTIMATED COST OF HIRE RATE PER EACH $100
STATE FOR EACH STATE COST OF HIRE PREMIUM
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MASSACHUSETTS $ IF ANY $92.00
- -----------------------------------------------------------------------------------------------------------------------------
Cost of hire means the total amount you incur for the hire of "autos" you don't own (not including "autos"
you borrow or rent from your partners or employees or their family members). Cost of hire does not
include charges for services performed by motor carriers of property or passengers.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
ITEM FIVE SCHEDULE FOR NON-OWNERSHIP LIABILITY
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Named Insured's Business Rating Basis Number Premium
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Other than a Number of Employees 12 $92.00
-------------------------------------------------------------------------------
Social Service Number of Partners $
- -----------------------------------------------------------------------------------------------------------------------------
Number of Employees $
Social Service Agency -------------------------------------------------------------------------------
Number of Volunteers $
- -----------------------------------------------------------------------------------------------------------------------------
$92.00
-------------
</TABLE>
MM 00 97 09 91 Includes copyrighted material of Insurance Services Office,
Auto 9019-1 with its permission.
Copyright, Insurance Services Office, Inc., 1990 (Part 2)
<PAGE> 79
CA 598
(9-91)
THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY.
MM 99 22 09 91
DRIVE OTHER CAR COVERAGE
BROADENED COVERAGE FOR NAMED INDIVIDUALS - MASSACHUSETTS
This endorsement modifies insurance provided under the following:
BUSINESS AUTO COVERAGE FORM
TRUCKERS COVERAGE FORM
This endorsement changes the policy on the inception date of the policy or as
of the date indicated below.
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Endorsement effective Policy No.
April 1, 1996 12:01 A.M. standard time 51GA-868-078-0001M
- -----------------------------------------------------------------------------------------------------------------------------
Named "insured" Countersigned by
MVAK Technologies, Inc. J. Colangelo #0023099-20
- -----------------------------------------------------------------------------------------------------------------------------
(Authorized Representative)
</TABLE>
This endorsement changes only those coverages listed below for which a charge
is shown below. Each of those coverages is changed as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Premium
---------------------------------------------------------------------------
Name of Individual BI PD MED. UM UIM COMP. COLL.
<S> <C> <C> <C> <C> <C> <C> <C>
$ Ded $ Ded
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C>
Michael Metropolis SEE AUTO COVERAGE FORM (Auto 9019)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
A. CHANGES IN LIABILITY INSURANCE
1. Any "auto" you hire, borrow or don't own is a covered "auto" for
LIABILITY COVERAGE while being used by any individual named in
this endorsement or by his or her spouse while a resident of the
same household except:
a. Any "auto" owned by that individual or by any "family
members".
b. Any "auto" used by that individual or his or her spouse while
working in a business of selling, servicing, repairing or parking
"autos".
2. The following is added to WHO IS INSURED:
Any individual named in this endorsement and his or her spouse, while
a resident of the same household, are "insureds" while using any
covered auto described in paragraph B.1. of this endorsement.
B. CHANGES IN AUTO MEDICAL PAYMENTS
The following is added to WHO IS INSURED:
Any individual named in this endorsement and his or her "family members"
are "insureds" while "occupying" or while a pedestrian when being struck
by any "auto" you hire, borrow or don't own except:
Any "auto" owned by that individual or by any "family member".
C. CHANGES IN PHYSICAL DAMAGE INSURANCE
Any private passenger type "auto" you hire, borrow or don't own is a
covered "auto" while in the care, custody or control of any individual
named in this endorsement or his or her spouse while a resident of the
same household except:
1. Any "auto" owned by that individual or by any "family member".
2. Any "auto" used by that individual or his or her spouse while working
in a business of selling, servicing, repairing or parking"autos".
(over)
Copyright, Automobile Insurers Bureau, 1991
<PAGE> 80
BLANKET PROTECTOR
COMMON DECLARATIONS [LOGO] NATIONWIDE
INSURANCE
Nationwide is on your side
ONE NATIONWIDE PLAZA . COLUMBUS, OHIO 43215-2220
ISSUED BY NATIONWIDE MUTUAL INSURANCE COMPANY
POLICY NUMBER 51PRO28672-0001M
NAMED INSURED MVAK TECHNOLOGIES INC
MAILING ADDRESS 29 COOK STREET
SUITE 1
BILLERICA MA 01821
POLICY PERIOD FROM 04/05/96 TO 04/05/97 AT
12:01 A.M. STANDARD TIME AT YOUR MAILING ADDRESS.
FORM OF BUSINESS CORPORATION
DESCRIPTION OF BUSINESS MACH EQUIPT INSTALL SERVICE REP IN RETURN FOR THE
PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THE POLICY, WE AGREE
TO PROVIDE YOU WITH THE INSURANCE AS STATED IN THIS POLICY.
THIS POLICY CONSISTS OF THE COVERAGES INDICATED AS INCLUDED. THE PREMIUM
MAY BE SUBJECT TO ADJUSTMENT.
<TABLE>
<CAPTION>
NOT
INCLUDED INCLUDED
<S> <C> <C>
COMMERCIAL PROPERTY COVERAGE X
COMMERCIAL GENERAL LIABILITY COVERAGE X
COMMERCIAL CRIME COVERAGE X
MECHANICAL, ELECTRICAL AND PRESSURE EQUIPMENT COVERAGE X
COMMERCIAL INLAND MARINE COVERAGE X
COMMERCIAL AUTO COVERAGE X
GARAGE COVERAGE X
TOTAL ADVANCE PREMIUM $ 2,353.00
PREMIUM PAYABLE AT INCEPTION $ 2,353.00
</TABLE>
IN THE EVENT OF CANCELLATION BY YOU, WE SHALL RECEIVE AND RETAIN NOT
LESS THAN $100 AS THE MINIMUM PREMIUM.
FORMS IN COMMON TO ALL COVERAGES
IL 00 17-1185 CAS 3228 IL 00 03-1185
CAS 3687 A-0194
ISSUED AT 200 E. CAMPUS VIEW BLVD.
COLUMBUS, OH 43235
COUNTERSIGNED AT COLUMBUS, OH BY JK COLANGELO 0023099 20
03/19/96 PAGE 001
267/000
CAS. 3200-A (01-87) R
00027
<PAGE> 81
BLANKET PROTECTOR
COMMERCIAL PROPERTY [LOGO] NATIONWIDE
COVERAGE PART DECLARATIONS INSURANCE
Nationwide is on your side
ONE NATIONWIDE PLAZA . COLUMBUS, OHIO 43215-2220
ISSUED BY NATIONWIDE MUTUAL INSURANCE COMPANY
POLICY NUMBER 51PRO28672-0001M
POLICY PERIOD FROM 04/05/96 TO 04/05/97 AT
12:01 A.M. STANDARD TIME AT YOUR MAILING ADDRESS.
- -------------------------------------------------------------------------------
DESCRIPTION OF PREMISES
LOC BLDG LOCATION, CONSTRUCTION AND OCCUPANCY
001 01 29 COOK STREET FRAME
SUITE 1 SERVICE REP
BILLERICA MA 01821 009
- -------------------------------------------------------------------------------
COVERAGES PROVIDED
(INSURANCE AT THE DESCRIBED PREMISES APPLIES ONLY FOR COVERAGES FOR WHICH A
LIMIT OF INSURANCE IS SHOWN)
<TABLE>
<CAPTION>
LIMIT OF COVERED CAUSES COINSURANCE
LOC BLDG COVERAGE INSURANCE OF LOSS
<C> <C> <S> <C> <C> <C>
001 01 PERSONAL PROPERTY $ 200,000 SPECIAL 90
001 01 PERSONAL PROPERTY $ 100,000 SPECIAL 90
OF OTHERS
</TABLE>
- -------------------------------------------------------------------------------
OPTIONAL COVERAGES
(APPLICABLE ONLY WHEN ENTRIES ARE MADE IN THE SCHEDULE BELOW)
REPLACEMENT COST (X)
LOC BLDG BUILDING PERSONAL PROPERTY INCLUDING "STOCK"
001 01 X X
PERS PROP OF OTHERS IMPROVMNTS/BETTRMNTS INCLUDING "STOCK"
X
- -------------------------------------------------------------------------------
DEDUCTIBLE
$ 500 PER OCCURRENCE
- -------------------------------------------------------------------------------
COMMERCIAL PROPERTY PREMIUM $ 1,199
- -------------------------------------------------------------------------------
FORMS APPLICABLE TO COMMERCIAL PROPERTY COVERAGE PART
FORMS APPLICABLE TO ALL LOCATIONS/COVERAGES
CP 00 90-0788 CP 01 09-0788
FORMS APPLICABLE TO SPECIFIC LOCATIONS/COVERAGES
FORM NUMBER LOC BLDG COVERAGE
CP 00 10-1090 001 01 PERSONAL PROPERTY
001 01 PERSONAL PROPERTY OF OTHERS
CP 10 30-1090 001 01 PERSONAL PROPERTY
001 01 PERSONAL PROPERTY OF OTHERS
PAGE 002
03/19/96
267/000
CAS. 3204-A (09-87)
00027
<PAGE> 82
BLANKET PROTECTOR
COMMERCIAL GENERAL LIABILITY [LOGO] NATIONWIDE
COVERAGE PART DECLARATIONS INSURANCE
Nationwide is on your side
ONE NATIONWIDE PLAZA . COLUMBUS, OHIO 43215-2220
ISSUED BY NATIONWIDE MUTUAL INSURANCE COMPANY
POLICY NUMBER 51PRO28672-0001M
POLICY PERIOD FROM 04/05/96 TO 04/05/97 AT
12:01 A.M. STANDARD TIME AT YOUR MAILING ADDRESS.
LIMITS OF INSURANCE
<TABLE>
<S> <C>
GENERAL AGGREGATE LIMIT $ 2,000,000
PRODUCTS - COMPLETED OPERATIONS AGGREGATE LIMIT $ 1,000,000
EACH OCCURRENCE LIMIT $ 1,000,000
PERSONAL & ADVERTISING INJURY LIMIT $ 1,000,000
ANY ONE PERSON OR ORGANIZATION
MEDICAL EXPENSE LIMIT $ 5,000
ANY ONE PERSON
FIRE DAMAGE LIMIT $ 50,000
ANY ONE FIRE
</TABLE>
- -------------------------------------------------------------------------------
LOCATION OF ALL PREMISES YOU OWN, RENT OR OCCUPY
LOC BLDG ADDRESS
001 01 29 COOK STREET
SUITE 1
BILLERICA MA 01821 009
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASSIFICATION CODE PREMIUM PRODS/COMP OPS ALL OTHER
NO. BASIS ADV PREM ADV PREM
<S> <C> <C> <C> <C>
MACHINERY OR EQUIPMENT - 97223 63,500 INCLUDED INCLUDED
INSTALLATION, SERVICING PAYROLL
OR REPAIR - NOC
</TABLE>
- -------------------------------------------------------------------------------
COMMERCIAL GENERAL LIABILITY ADVANCE PREMIUM $ 1,154
- -------------------------------------------------------------------------------
FORMS APPLICABLE TO COMMERCIAL GENERAL LIABILITY COVERAGE PART
CG 21 51-0989 CAS 4833-0395 CAS 2527 B-0794
CG 00 01-1093 IL 00 21-1194 CAS 2527 A-0288
CAS 3880-0788 CG 21 49-1093
PAGE 003
03/19/96
267-000
00027
<PAGE> 83
Eastern Casualty Insurance Company
WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY
INFORMATION PAGE
NCCI Carrier 16942 Risk I.D. # 389552R
Policy No. WC P 1000730 A Federal I.D. # 222416696
1. The Insured/Mailing address: / / Individual / / Partnership
M.V.A.K. TECHNOLOGIES INC. /X/ Corporation or -------------
29 COOK STREET, SUITE #1
BILLERICA, MA 01821 --------------------------------
Other workplaces not shown above:
2. Policy Period: The policy period is from 04/05/96 to 04/05/97
12:01 A.M. Standard Time, at the insured's mailing address.
3. Coverage:
A. Worker's Compensation Insurance: Part One of the policy applies to the
Workers Compensation Law of the states listed here: Massachusetts
B. Employers Liability Insurance: Part Two of the policy applies to work in
each state listed in item 3.A. The limits of our liability under Part Two
are: Bodily Injury by Accident 100,000 each accident
Bodily Injury by Disease 500,000 policy limit
Bodily Injury by Disease 100,000 each employee
C. Other States Insurance: Part Three of the policy applies to the states,
if any, listed here: See Endorsement WC 20 03 06A.
D. This policy includes these endorsements and schedules: WC242, WC332,
WC350, WC367, WC441. See Information Page III for other applicable
endorsements.
Total Estimated Annual Premium $ 4,173
Pro Rata Premium (if Applicable) $
ANNUAL
Countersigned JAMES COLANGELO COLANGELO INSU
289 CHELMSFORD STREET
CHELMSFORD, MA 01824
Date 04-09-96 By /s/
ARC: 231.96 ----------------------------
ARC: 231.96 Authorized Representative
THIS INFORMATION PAGE WITH THE WORKERS COMPENSATION AND EMPLOYERS LIABILITY
INSURANCE POLICY AND ENDORSEMENTS, IF ANY, ISSUED TO FORM A PART THEREOF,
COMPLETES THE ABOVE NUMBERED POLICY.
<PAGE> 84
Eastern Casualty Insurance Company
WC 174
(Ed. 4-84)
WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY
EXTENSION OF INFORMATION PAGE
Policy Number: WCP 1000730 A M.V.A.K.
4. Premium: The premium for this policy will be determined by our Manuals of
Rules, Classifications, Rates and Rating Plans. All information required
below is subject to verification and change by audit.
<TABLE>
<CAPTION>
Classifications Code Premium Basis Rate Per
No. Total Estimated $100 of Estimated Annual
Annual Remuneration Remuneration Premiums
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ENGINE/PUMP MFG. 3612 63,500 5.31 3,372
SALESMEN COLLCTRS MSSRGS 8742 58,000 0.63 365
CLERICAL OFFICE EMPLOYEES 8810 110,900 0.30 333
COVERAGE B-EMPLOYERS LIABILITY 9845 0
MERIT RATING -0.05% -204
STANDARD PREMIUM SUBJECT TO DIA 3,866
EXPENSE CONSTANT 0900 160
DIA ASSESSMENT 3.8% OF STANDARD PREMIUM 147
- ----------------------------------------------------------------------------------------------------------------------
Minimum Premium $ 346 Total Estimated Annual Premium: $ 4,173
Pro-Rata Premium (if applicable): $
ANNUAL
</TABLE>
<PAGE> 85
Eastern Casualty Insurance Company
INFORMATION PAGE III POLICY NO. WCP 1000730 A
These endorsements apply only if so indicated by an "X" in the box below.
/ / WC100 Defense Base Act Endorsement
/ / WC103 Federal Employers' Liability Act Endorsement
/ / WC111 Voluntary Compensation Maritime Coverage Endorsement
/ / WC113 Designated Workplaces Exclusion Endorsement
/ / WC124 Waiver of Our Right to Recover from Others Endorsement
/ / WC127 Anniversary Rating Date Endorsement
/ / WC128 Experience Rating Modification Factor Endorsement
/ / WC129 Pending Rate Change Endorsement
/ / WC131 Premium Discount Endorsement
/ / WC132 Rate Change Endorsement
/ / WC133 Retrospective Premium Endorsement (I, II, III, IV-One Year)
/ / WC137 Retrospective Premium Endorsement
Rating Option V -- One Year Plan
/ / WC236 Domestic and Agricultural Workers Exclusion Endorsement
/ / WC269 Alternate Employer Endorsement
/ / WC331 Aircraft Premium Endorsement
/ / WC418 Massachusetts Qualified Loss Management Program Endorsement
/ / WC419 Longshore & Harborworkers Act Endorsement
/ / WC421 Outer Continental Shelf Lands Act Coverage Endorsement
/ / WC422 Maritime Coverage Endorsement
/ / WC443 MA Exclusion of Coverage for Leased Employers Endorsement
/ / WC444a Massachusetts Employee Leasing Endorsement
/ / WC474 Massachusetts Benefits Deductible Endorsement
/X/ WC369 Notification of Change in Ownership Endorsement
/X/ WC546A Massachusetts Limited Other States Insurance
<PAGE> 86
Eastern Casualty Insurance Company
WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY
WC 129
(Ed. 4-84)
WC 00 04 04
PENDING RATE CHANGE ENDORSEMENT
This endorsement changes the policy to which it is attached effective on the
inception date of the policy unless a different date is indicated below.
(The following "attaching clause" need be completed only when this endorsement
is issued subsequent to preparation of the policy.)
This endorsement, effective on 04/05/96 at 12:01 A.M. standard time, forms a
(Date)
part of Policy No. WCP 1000730 A of the Eastern Casualty Insurance Company
(Name of Insurance Company)
issued to M.V.A.K. TECHNOLOGIES INC.
Premium $ 4,026.00 ---------------------------------------
Authorized Representative
A rate change filing is being considered by the proper regulatory authority.
The filing may result in rates different from the rates shown on the policy.
If it does, we will issue an endorsement to show the new rates and their
effective date.
If only one state is shown in Item 3.A of the Information Page, this
endorsement applies to that state. If more than one state is shown there,
this endorsement applies only in the state shown in the Schedule.
Schedule
State
MASSACHUSETTS
Copyright 1983
National Council on Compensation Insurance.
<PAGE> 87
Eastern Casualty Insurance Company
WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY
WC 546A
WC 20 03 06A
MASSACHUSETTS LIMITED OTHER STATES INSURANCE
This endorsement changes the policy to which it is attached effective on the
inception date of the policy unless a different date is indicated below.
(The following "attaching clause" need be completed only when this endorsement
is issued subsequent to preparation of the policy.)
This endorsement, effective on 04/05/96 at 12:01 A.M. standard time, forms a
(Date)
part of Policy No. WCP 1000730 A of the Eastern Casualty Insurance Company
(Name of Insurance Company)
issued to M.V.A.K. TECHNOLOGIES INC.
Premium $ 4,026.00 ---------------------------------------
Authorized Representative
"PART THREE - OTHER STATES INSURANCE" is amended to read:
A. How This Insurance Applies:
1. We will pay promptly, when due, the benefits required of you by
the workers' compensation law of any state other than
Massachusetts, but only if the claim for such benefits involves
work performed by a Massachusetts employee.
2. If we are not permitted to pay the benefits directly to persons
entitled to them under circumstances described in item 1 above,
we will reimburse you for the benefits required to be paid.
IMPORTANT NOTICE!
If you hire any employees outside Massachusetts or begin operations in any
state other than Massachusetts, you must obtain insurance coverage in that
state and do whatever else may be required under that state's law, as
this endorsement does not satisfy the requirements of that state's workers'
compensation law.
Copyright 1994
National Council on Compensation Insurance.
<PAGE> 88
Eastern Casualty Insurance Company
WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY
WC 369
(7-90)
WC 00 04 14
NOTIFICATION OF CHANGE IN OWNERSHIP
This endorsement changes the policy to which it is attached effective on the
inception date of the policy unless a different date is indicated below.
(The following "attaching clause" need be completed only when this endorsement
is issued subsequent to preparation of the policy.)
This endorsement, effective on 04/05/96 at 12:01 A.M. standard time, forms a
(Date)
part of Policy No. WCP 1000730 A of the Eastern Casualty Insurance Company
(Name of Insurance Company)
issued to M.V.A.K. TECHNOLOGIES INC.
Premium $ 4,026.00 ---------------------------------------
Authorized Representative
Experience rating is mandatory for all eligible insureds. The experience
rating modification factor, if any, applicable to this policy, may
change if there is a change in your ownership or in that of one or more
of the entities eligible to be combined with you for experience rating
purposes. Change in ownership includes sales, purchases, other transfers,
mergers, consolidations, dissolutions, formations of a new entity and other
changes provided for in the applicable experience rating plan manual.
You must report any change in ownership to us in writing within 90 days of
such change. Failure to report such changes within this period may result
in revision of the experience rating modification factor used to determine
your premium.
Copyright 1990
National Council on Compensation Insurance.
<PAGE> 89
WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY
- ------------------------------------------------------------------------------
INFORMATION PAGE
Insurer: FCCI MUTUAL INSURANCE COMPANY Carrier Number: 24570
2601 CATTLEMEN ROAD Policy Number: 001-WC96A-26895
SARASOTA, FL 34232-6249 Prior Policy Number:
Program Type: Compact Plan
1. The Insured: MVAK TECHNOLOGIES INC.
Mailing Address: 9777 SATELLITE BLVD. STE 120
ORLANDO, FL 32837
Business Status: Corporation
Risk ID Number: FEIN Number: 222416696
Other workplaces not shown above:
9777 SATELLITE BLVD. STE 120
ORLANDO, FL 32837
2. The policy period is from 1/01/96 12:01 AM to 1/01/97 12:01 AM at the
------- -------
Insured's Mailing Address.
3. A. Workers Compensation Insurance: Part One of the policy applies to
the Workers Compensation Law of the states listed here:
FLORIDA
B. Employers Liability Insurance: Part Two of the policy applies to
work in each state listed in Item 3.A. The limits of our liability
under Part Two are:
Bodily Injury by Accident $ 100,000 each accident
-----------
Bodily Injury by Disease $ 500,000 policy limit
-----------
Bodily Injury by Disease $ 100,000 each employee
-----------
C. Other States Insurance: Part Three of the policy applies to the
states, if any, listed here:
D. This policy includes these endorsements and schedules:
WC 00 00 00 A(4/92); WC 00 00 01 A(5/88);
4. The premium for this policy will be determined by our Manuals of Rules,
Classifications, Rates and Rating Plans. All information required below
is subject to verification and change by audit.
SEE EXTENSION OF INFORMATION PAGE
/s/ Ray Neff
Ray Neff
President
Total Estimated Policy Premium $1,741
Minimum Premium $250
Countersigned by: /s/ 12/28/95
-----------------------------
Authorized Representative
Agency Name: Baylis Ins Agency Inc #00554
Agency Location: Orlando, FL
Agency Phone Number: (407) 295-1000
WC 00 00 01 A(5/88)
Copyright 1987 National Council on Compensation Insurance
Page Number 1
<PAGE> 90
CA0003 1293 06/14/96 2 BI 3887898
RENEWAL OF POLICY BI 3887898
BUSINESS AUTO
Anthem RENEWAL DECLARATION * * EFFECTIVE 07/22/96
- ------
CASUALTY INSURANCE GROUP
ITEM ONE
- --------------------------------------------------------------------------------
POLICY NUMBER POLICY PERIOD COVERAGE IS PROVIDED IN AGENCY P
FROM TO
BI 3887898 07/22/96 07/22/97 INSURA PROPERTY AND CASUALTY
INSURANCE COMPANY 0095842
- --------------------------------------------------------------------------------
NAME INSURED AND ADDRESS AGENT
MVAK TECHNOLOGIES INC. BAYLIS INSURANCE AGENCY INC
7101 PRESIDENTS DR STE 110 4241 N JOHN YOUNG PKWY STE-600
ORLANDO, FL 32809-5649 P O BOX 607400
ORLANDO FL 32860-7400
- --------------------------------------------------------------------------------
POLICY PERIOD - 12:01 AM STANDARD TIME AT THE NAMED INSUREDS ADDRESS STATED
ABOVE.
FORM OF NAMED INSUREDS BUSINESS - CORPORATION
NAMED INSUREDS BUSINESS - REBUILDS PUMPS
IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS
POLICY, WE AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATED IN THIS POLICY.
ITEM TWO - SCHEDULE OF COVERAGES AND COVERED AUTOS: THIS POLICY PROVIDES ONLY
THOSE COVERAGES WHERE A CHARGE IS SHOWN IN THE PREMIUM COLUMN BELOW.
EACH OF THESE COVERAGES WILL APPLY ONLY TO THOSE AUTOS SHOWN AS
COVERED AUTOS. AUTOS ARE SHOWN AS COVERED AUTOS FOR A PARTICULAR
COVERAGE BY THE ENTRY OF ONE OR MORE OF THE SYMBOLS FROM THE
COVERED AUTO SECTION OF THE BUSINESS AUTO COVERAGE FORM NEXT TO THE
NAME OF THE COVERAGE.
<TABLE>
<CAPTION>
COVERAGES COVERED LIMIT - THE MOST WE WILL PAY FOR PREMIUM
AUTOS ANY ONE ACCIDENT OR LOSS
<S> <C> <C> <C>
LIABILITY 1 $500,000 EACH ACCIDENT $1174.00
PIP 5 $10,000 BASIC COVERAGE $20.00
$90,000 ADDITIONAL INCLUDING WORK LOS
MEDICAL PAYMENTS 2 $2,000 EACH PERSON $4.00
UNINSURED MOTORIST 2 $500,000 EACH ACCIDENT $77.00
COMPREHENSIVE 7 SEE ITEM THREE FOR LIMITS AND DEDUCTIBLES $65.00
COLLISION 7 SEE ITEM THREE FOR LIMITS AND DEDUCTIBLES $96.00
POLICY EXPENSE FEE $200.00
**NON-STACKED UNINSURED MOTORIST APPLIES**
</TABLE>
ENDORSEMENTS ATTACHED TO THIS POLICY
CA0001 1203 , CA0003 1202 , AU 200 0707 , CA0128 0594 , IL0017 1105 ,
IL0021 1194<F*>, CA0267 1094 , CA2210 1295<F*>, CA2211 0594 , CA2201 0187 ,
CA2250 0594 , CA9903 1293 , CA2172 0794 ,
REFER TO THE COVERAGE FORM FOR EXPLANATION OF ESTIMATED TOTAL PREMIUM $1638.00
ITEM THREE - SEE CA0001 1293 FOR DESCRIPTION OF COVERED AUTO DESIGNATION
SYMBOLS
/s/
-------------------------------------
AUTHORIZED REPRESENTATIVE
THESE DECLARATIONS TOGETHER WITH THE BUSINESS AUTO COVERAGE FORM AND
ENDORSEMENTS, IF ANY, ISSUED TO FORM A PART THEREOF, COM???? THE ABOVE
NUMBERED POLICY.
Includes copyrighted material of Insurance Services Office, Inc., with
its permission.
<PAGE> 91
CA0003 1293 06/14/96 1 BI 3887898
RENEWAL OF POLICY BI 3887898
BUSINESS AUTO
Anthem RENEWAL DECLARATION * * EFFECTIVE 07/22/96
- ------
CASUALTY INSURANCE GROUP
ITEM ONE
- --------------------------------------------------------------------------------
POLICY NUMBER POLICY PERIOD COVERAGE IS PROVIDED IN AGENCY P
FROM TO
BI 3887898 07/22/96 07/22/97 INSURA PROPERTY AND CASUALTY
INSURANCE COMPANY 0095842
- --------------------------------------------------------------------------------
NAME INSURED AND ADDRESS AGENT
MVAK TECHNOLOGIES INC. BAYLIS INSURANCE AGENCY INC
7101 PRESIDENTS DR STE 110 4241 N JOHN YOUNG PKWY STE-600
ORLANDO, FL 32809-5649 P O BOX 007400
ORLANDO FL 32860-7400
- ------------------------------------------------------------------------------
- ---STATEMENT OF ACCOUNT---
BAYLIS INSURANCE AGENCY INC
P O BOX 607400
ORLANDO FL 32860-7400
TOTAL PREMIUM DUE.................$1,638.00
WRITE YOUR POLICY NUMBER ON YOUR
CHECK AND RETURN WITH THIS STUB
AMOUNT DUE 07/22/96 $1,638.00
BI 3887898-51072;
MVAK TECHNOLOGIES INC
THANK YOU FOR LETTING US SERVE YOU
<PAGE> 92
Anthem INSURA PROPERTY AND CASUALTY COMPANY
- ------
CASUALTY INSURANCE GROUP
COMMON POLICY DECLARATIONS
POLICY NUMBER: MI 3887899 01 07 RENEWAL OP: MI 3887899
NAMED INSURED AND MAILING ADDRESS AGENCY NAME AND MAILING ADDRESS
MVAK TECHNOLOGIES, INC. BAYLIS INSURANCE
AGENCY, INC.
9777 SATELLITE BLVD, SUITE 120 P O BOX 680040
ORLANDO FL ORLANDO FL
32837 32868
AGENCY NUMBER: 0095842
POLICY PERIOD: FROM 07/22/96 TO 07/22/97 AT
12:01 A.M. Standard Time at your mailing address shown above.
TYPE OF BUSINESS: CORPORATION
BUSINESS DESCRIPTION: REBUILD PUMPS
IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF
THIS POLICY, WE AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATED IN THIS
POLICY.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THIS POLICY CONSISTS OF THE FOLLOWING COVERAGE PARTS
FOR WHICH A PREMIUM IS INDICATED. THIS PREMIUM MAY
BE SUBJECT TO ADJUSTMENT.
<S> <C>
BOILER AND MACHINERY COVERAGE PART $
COMMERCIAL AUTO COVERAGE PART $
COMMERCIAL CRIME COVERAGE PART $
COMMERCIAL GENERAL LIABILITY COVERAGE PART $ 1,190.00
COMMERCIAL INLAND MARINE COVERAGE PART $ 123.00
COMMERCIAL PROPERTY COVERAGE PART $ 775.00
FARM COVERAGE PART $
TOTAL $ 2,088.00
</TABLE>
AUDIT FREQUENCY: ANNUAL
Premium shown is payable: $ 2,088.00 at inception.
<TABLE>
- -------------------------------------------------------------------------------------------
<CAPTION>
FORMS APPLICABLE TO ALL COVERAGE PARTS:
<S> <C> <C> <C> <C> <C> <C> <C>
IL 0017 11/85 IL 0255 07/94 IL 0021<F*> 11/94 IL 0175 09/93
IL 0019SFL 02/96
</TABLE>
COUNTERSIGNED 7/20/96 BY /s/
----------------------- -----------------------------------
(DATE) (AUTHORIZED REPRESENTATIVE)
Form No. IL 0019 ???01-99
<PAGE> 93
EXHIBIT 3.19
Employees of Acquiree
Attached
<PAGE> 94
MVAK TECHNOLOGIES, INC.
EMPLOYEE LIST
<TABLE>
<CAPTION>
NAME SALARY/ MEDICAL INS
LAST FIRST RATE POSITION LOCATION CARRIER
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CAMPENOT JAMES 14.25 TECHNICIAN NEW JERSEY BLUE CROSS
- -----------------------------------------------------------------------------------------------------------------------------
DESMOND BRIAN 700.00 SHOP FOREMAN BLUE SHIELD
- -----------------------------------------------------------------------------------------------------------------------------
GABRIEL NANCY 10.00 P/T-ASST. TO ADMIN
- -----------------------------------------------------------------------------------------------------------------------------
JACOBS OLIVER 8.00 TECHNICIAN
- -----------------------------------------------------------------------------------------------------------------------------
KARSEBOOM ROBERT 12.00 TECHNICIAN
- -----------------------------------------------------------------------------------------------------------------------------
METROPOLIS MICHELE 670.00 BOOKKEEPER
- -----------------------------------------------------------------------------------------------------------------------------
MULLEN TERRENCE 500.00 SALES REP
- -----------------------------------------------------------------------------------------------------------------------------
WEINSTEIGER MARK 600.00 SALES MANAGER
- -----------------------------------------------------------------------------------------------------------------------------
WILLIAMS AMILCAR 8.00 DRIVER
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
ATCHUE EDWARD 13.00 TECHNICIAN MASSACHUSETTS TUFTS
- -----------------------------------------------------------------------------------------------------------------------------
BELCHER SEAN 9.50 TECHNICIAN
- -----------------------------------------------------------------------------------------------------------------------------
BOGERT RICHARD 900.00 SHOP FOREMAN
- -----------------------------------------------------------------------------------------------------------------------------
BOGERT DEBRA 1,200.00 GENERAL MANAGER
- -----------------------------------------------------------------------------------------------------------------------------
GILBERT DENNIS 9.25 TECHNICIAN
- -----------------------------------------------------------------------------------------------------------------------------
GOODWIN RAYMOND 9.00 P/T-SHOP FOREMAN ASSIT
- -----------------------------------------------------------------------------------------------------------------------------
KELLEY MARK 10.50 TECHNICIAN
- -----------------------------------------------------------------------------------------------------------------------------
O'BRIEN PATRICIA 500.00 BOOKKEEPER
- -----------------------------------------------------------------------------------------------------------------------------
OLSON FRANK 13.00 TECHNICIAN
- -----------------------------------------------------------------------------------------------------------------------------
POLLARD JOEL 11.50 PURCHASING AGENT
- -----------------------------------------------------------------------------------------------------------------------------
SPIDLE SCOTT 450.00 SALES REP
- -----------------------------------------------------------------------------------------------------------------------------
TELLO DAVID 9.00 DRIVER
- -----------------------------------------------------------------------------------------------------------------------------
TIMMINS THOMAS 13.00 TECHNICIAN
- -----------------------------------------------------------------------------------------------------------------------------
WAGNER NEIL 500.00 SALES MANAGER
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
GIACONA FRANK 1,400.00 GENERAL MANAGER FLORIDA UNITED HEALTH-
- -----------------------------------------------------------------------------------------------------------------------------
CASEY LINDA 9.75 BOOKKEEPER CARE
- -----------------------------------------------------------------------------------------------------------------------------
CONRAD DAVID 8.00 TECHNICIAN
- -----------------------------------------------------------------------------------------------------------------------------
LEWIS GARY 12.00 SHOP FOREMAN
- -----------------------------------------------------------------------------------------------------------------------------
PINNA DENISE 350.00 SALES REP/MARKETING
- -----------------------------------------------------------------------------------------------------------------------------
SINGH JAIGOBIN BY PUMP P/T-TECHNICIAN
- -----------------------------------------------------------------------------------------------------------------------------
WEBSTER DAVID 10.00 TECHNICIAN
- -----------------------------------------------------------------------------------------------------------------------------
ABRAHAM HEATHER 11.25 SALES REP
- -----------------------------------------------------------------------------------------------------------------------------
OWENS KEITH 8.00 PURCHASING/SHIPPING/
- -----------------------------------------------------------------------------------------------------------------------------
RECEIVING/SALES REP
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 95
EXHIBIT 4.5
FINANCIAL STATEMENTS
BUYER
Filed on Form 10Q, filed 11/13/96,
is incorporated herein by this reference.
<PAGE> 96
EXHIBIT 4.6
JUDGMENTS
BUYER
None
<PAGE> 97
[Letterhead of Merra, Kanakis, Creme & Mellor, P.C.]
EXHIBIT 9.1
OPINION OF COUNSEL
Re: Applied Cellular Technology, Inc. (the "Buyer")
Gentlemen:
We are familiar with Applied Cellular Technology, Inc., a corporation duly
organized and validly existing under the laws of the State of Missouri,
and in good standing under the laws of the State of Missouri.
The Board of Directors of Buyer have duly approved this Agreement.
The Buyer's restricted common shares deliverable pursuant to this Agreement
shall be validly issued and outstanding, fully paid and nonassessable.
The authorized capital stock of Buyer consists of twenty million (20,000,000)
shares of Common Stock, $.001 par value, five million seven hundred ninety-nine
thousand four hundred sixty-nine (5,799,469) of which have been validly
issued and are outstanding and five million three hundred ninety-one
thousand three hundred thirty-eight (5,391,338) of those are freely tradable
without restriction or further registration under the Securities Act of
1933 and listed on the NASDAQ National Market System.
In reaching our opinion, we have relied upon publicly available information
and information provided by Applied Cellular Technology, Inc. Except
as stated herein, we have not independently verified such information
concerning Applied Cellular or other data which we have considered in our
review. We have relied upon, but do not assume any responsibility for, the
accuracy and completeness of such information.
This opinion is limited to the above and may be relied upon only to
that extent.
Very truly yours,
/s/ Paul D. Creme
Paul D. Creme
PDC/gae
<PAGE> 98
EXHIBIT 10.1
EMPLOYMENT AND NON-COMPETE AGREEMENT
------------------------------------
This Employment and Non-Compete Agreement ("Agreement") is made this -----
day of ---------------, 1997 by and between MVAK Technologies, Inc., a
- ----------- corporation with its principal office located at 299-A Ridgedale
Avenue, East Hanover, New Jersey 07936 (the "Employer") and Debra S. Bogert
(the "Employee").
A. Employer is in the business of remanufacturing and refurnishing
industrial vacuum pumps for resale;
B. Employer desires to retain the services of the Employee; and
C. Employee is willing to be employed by the Employer.
Therefore, the parties agree as follows:
1. CAPACITY. Employee shall serve the Employer as its President
--------
and General Manager.
2. BEST EFFORTS OF EMPLOYEE. During her employment hereunder,
------------------------
the Employee shall, subject to the direction and supervision of the Chief
Executive Officer and Board of Directors, devote her full business time, best
efforts, business judgment, skill and knowledge to the advancement of the
Employer's interests and to the discharge of her duties and responsibilities
hereunder. Such duties shall be provided at Billerica, Massachusetts and
other such places as the needs, business or opportunities of the Employer may
require from time to time. She shall not engage in any other business
activity, except as may be approved by the Board of Directors; provided,
however, that nothing herein shall be construed as preventing the Employee
from:
a. investing her assets in a manner which shall not require
any material services on her part in the operations or affairs of the
companies or other entities in which such investments are made;
b. serving on the Board of Directors of any company, provided
she receives the approval in writing from the Chief Executive Officer and
Board of Directors, and provided that she shall not be required to render any
material services with respect to the operations or affairs of any such
company; or
c. engaging in religious, charitable or other community or
non-profit activities which does not impair her ability to fulfill her duties
and responsibilities under this Agreement.
3. COMPENSATION OF EMPLOYEE. As compensation for the services
------------------------
provided by Employee under this Agreement, Employer will pay Employee one
thousand five hundred dollars ($1,500.00) per week as base compensation in
accordance with the Employer's usual payroll
<PAGE> 99
EMPLOYMENT AND NON-COMPETE AGREEMENT
Page 2
procedures. Separate incentive and stock option plans will be developed by the
Employer, together with key management, and that these plans will reflect
company goals and performance objectives.
Employee shall, in addition to such base compensation, be
eligible to receive a bonus based upon the financial performance of Employer.
The bonus shall be paid as follows: Five percent (5%) of the pre-tax
profits, if profits are greater than $300,000.00 and less than $400,000.00.
In the event that profits exceed $400,000.00, Employee shall receive a bonus
of ten percent (10%) of the pre-tax profits. (By way of example, if company
achieves a pre-tax profit of $350,000.00, Employee shall receive a bonus of
five percent (5%) of $350,000.00 or $17,500.00. If company achieves a
pre-tax profit of $420,000.00, Employee shall receive a bonus of $42,000.00.)
The Employee shall also be entitled to participate in any and all
employee benefit plans, medical insurance plans, life insurance plans,
disability income plans and other benefit plans, from time to time, in effect
for executives of the Employer. Such participation shall be subject to the
terms of the applicable plan documents, generally applicable Corporation
policies and the discretion of the Board of Directors or any administrative
or other committee provided for in, or contemplated by, such plan. In
addition, the Employee shall be entitled to receive benefits which are the
same or substantially similar to those which are currently being provided to
the other Executives by the Employer.
4. TERMINATION OF EMPLOYMENT. Upon termination of the
-------------------------
Agreement, payments under this Agreement shall cease; provided, however, that
the Employee shall be entitled to payments for periods or partial periods
that occurred prior to the date of termination and for which the Employee has
not yet been paid.
5. REIMBURSEMENT FOR EXPENSES. In accordance with the
--------------------------
Employer's policy, the Employee will be reimbursed for all "out-of-pocket"
and other direct business expenses (exclusive of commuting costs).
6. CONFIDENTIALITY. Employee recognizes that the Employer has
---------------
and will have inventions, business affairs, products, future plans, trade
secrets, customer lists and other vital information (collectively
"Confidential Information") which are valuable, special and unique assets of
the Employer. The Employee agrees that she will not at any time or in any
manner, either directly or indirectly, divulge, disclose or communicate in
any manner any Confidential Information to any third party without the prior
written consent of the Employer. The Employee will protect the Confidential
Information and treat it as strictly confidential.
In the event of a breach, or threatened breach, by Employee of
her obligations under this Paragraph, the Employee hereby acknowledges and
stipulates that the Employer shall not have an adequate remedy at law, shall
suffer irreparable harm and, therefore, it is mutually agreed and stipulated
by the parties hereto that, in addition to any other remedies at law or in
<PAGE> 100
EMPLOYMENT AND NON-COMPETE AGREEMENT
Page 3
equity which Employer may have, the Employer shall be entitled to obtain in a
court of law and/or equity (i) a temporary and/or permanent injunction from
disclosing in whole or in part such Confidential Information or (ii) from
providing any services to any party to whom such Confidential Information has
been disclosed, or may be disclosed. Employer shall not be prohibited by
this Paragraph from pursuing other remedies, including a claim for losses and
damages.
7. VACATION. The Employee shall be entitled to three (3) weeks of
--------
paid vacation. Such vacation shall be taken at a time mutually convenient to
Employer and Employee. Unused vacation may be accumulated, if not used
within the year it is earned, up to a maximum of six (6) weeks.
8. SICK DAYS/PERSONAL BUSINESS. The Employee shall be entitled
---------------------------
to six (6) paid sick or personal days off due to illness or personal business
each year of employment beginning on the first day of the Employee's
employment.
9. HOLIDAYS. The Employee shall be entitled to the standard
--------
company holidays.
10. TERM. This Employment Agreement shall have an initial term of
----
three (3) years, beginning at the commencement date so indicated at the end
of this Agreement.
11. TERMINATION. Notwithstanding the provisions of Paragraph 10,
-----------
the Employee's employment hereunder shall terminate under the following
circumstances:
a. Death or Permanent Disability. In the event of the
-----------------------------
Employee's death during the Employee's employment hereunder, the Employee's
employment shall terminate on the date of her death or Permanent Disability
(as defined below).
Permanent Disability. For the purposes of this Agreement,
--------------------
the term "permanent disability" shall mean the Employee's inability to
perform her duties as prescribed in this Agreement, which, following a
written request by either the Employer or the Employee, shall be determined
by agreement between the parties and, if they cannot agree, by a panel of
three (3) physicians, one of whom will be selected by the Employer, one by
the Employee and the third by the first two so selected. Said panel shall
also fix the date of the occurrence of the permanent disability. Said
panel's determination shall be conclusive. Notwithstanding anything to the
contrary set forth herein, the Employee shall be presumed to be permanently
disabled as of the date she is receiving payments for permanent disability
under any disability insurance policies or under the Social Security Act.
b. Temporary Disability. If, due to physical or mental
---------------------
illness, disability or injury, the Employee shall be disabled so as to be
unable to perform substantially all of her duties and responsibilities
hereunder, the Board of Directors may designate another person to act in her
place during the period of such disability. Notwithstanding any such
designation, the
<PAGE> 101
EMPLOYMENT AND NON-COMPETE AGREEMENT
Page 4
Employee shall continue to receive her full salary and benefits under paragraph
3 of this Agreement until she becomes eligible for disability income under the
Employer disability income plan. In the absence of a disability income plan at
the time of such disability, the Employer shall pay the Employee benefits equal
to those the Employee would have received if the Employer's current disability
income plan were in effect at such time; provided however, that the Employer's
obligations hereunder shall cease twelve (12) months from the onset of such
disability.
c. Termination by the Employer for Cause. The Employee's
-------------------------------------
employment hereunder may be terminated for cause, without further liability
on the part of the Employer, by a majority vote of all of the members of the
Board of Directors. Termination for cause includes, but is not limited to:
(i) Deliberate dishonesty of the Employee with respect to
the Employer.
(ii) Conviction of the Employee of a crime involving moral
turpitude.
(iii) Gross and willful failure to perform a substantial
portion of her duties and responsibilities hereunder.
(iv) Employee's abandonment of her duties hereunder for a
period of more than ninety (90) days. Abandonment by the Employee of duties
hereunder shall be deemed to have occurred if: the Employee ceases to
function and perform duties hereunder, leaves the geographic area in which
the Employer engages in its business, or conducts herself with intentional
disregard of the Employer's interests and its business.
12. RESIGNATION AS OFFICER AND DIRECTOR. In the event that the
-----------------------------------
Employee's employment with the Employer is terminated for any reason
whatsoever, the Employee agrees to immediately resign as an Officer and
Director of the Employer.
13. NON-COMPETITION. In the event that the Employee elects to
---------------
leave the employment of the Employer during or at the end of this Agreement
or any extension thereto, or if the Employee is terminated for cause, the
Employee is not permitted to engage in direct competition with the Employer
for a further period of three (3) years. For purposes of definition, "direct
competition" is deemed to be a similar company engaged in the remanufacturing
and refurbishing of vacuum pumps within a twenty (20) mile radius of any of
the Employer's facilities.
14. RESTRICTION ON AUTHORITY OF EMPLOYEE. Notwithstanding
------------------------------------
anything set forth in this Agreement to the contrary, the Employee, in the
performance of her duties hereunder, shall not take any of the following
actions without the written consent of the Board of Directors:
a. Enter into negotiations or execute documents which would
effect the existing debt level and/or structure or alter, modify or change
any banking relations after such Closing Date.
<PAGE> 102
EMPLOYMENT AND NON-COMPETE AGREEMENT
Page 5
b.
15. REPRESENTATIONS AND WARRANTIES. The Employee hereby
------------------------------
represents and warrants that she is free to enter this Agreement and to
render her services pursuant hereto and that neither the execution and
delivery of this Agreement, nor the performance of her duties hereunder,
violates the provisions of any other agreement to which she is a party or by
which she is bound.
16. DATE OF COMMENCEMENT. This Employment Agreement is effective
--------------------
as of the -------------- day of ---------------, 1997.
17. NOTICES. All notices required or permitted under this Agreement
-------
shall be in writing and shall be deemed delivered when delivered in person or
deposited in the United States mail, postage paid, addressed as follows:
Employer: MVAK Technologies, Inc.
Attn: Garrett A. Sullivan
Chairman and Chief Executive Officer
Employee:
Such addresses may be changed from time to time by either party by providing
written notice in the manner set forth above.
18. ENTIRE AGREEMENT. This Agreement contains the entire
----------------
agreement of the parties and there are no other promises or conditions in any
other agreement, whether oral or written. This Agreement supersedes any
prior written or oral agreements between the parties.
19. AMENDMENT. This Agreement may be modified or amended, if the
---------
amendment is made in writing and is signed by both parties.
20. ASSIGNMENT ENFORCEABILITY. If any portion or provisions of
-------------------------
this Agreement shall, to any extent, be declared illegal or unenforceable by
a court of competent jurisdiction, then the remainder of this Agreement, or
the application of such portion or provision in circumstances other than
those as to which it is so declared illegal or unenforceable, shall not be
affected thereby and each portion and provision of this Agreement shall be
valid and enforceable to the fullest extent permitted by law.
<PAGE> 103
EMPLOYMENT AND NON-COMPETE AGREEMENT
Page 6
21. SEVERABILITY. If any provision of the Agreement shall be held
------------
to be invalid or unenforceable for any reason, the remaining provisions shall
continue to be valid and enforceable. If a court finds that any provision of
the Agreement is invalid or unenforceable, but that by limiting such
provision it would become valid and enforceable, then such provision shall be
deemed to be written, construed and enforced as so limited.
22. WAIVER OF CONTRACTUAL RIGHT. This failure of either party
---------------------------
to enforce any provision of this Agreement shall not be construed as a waiver
or limitation of that party's right to subsequently enforce and compel strict
compliance with every provision of this Agreement.
23. APPLICABLE LAW. This Agreement shall be governed by the laws
--------------
of the State of -----------------.
24. Agreed to this 7th day of February, 1997.
--- --------
MVAK TECHNOLOGIES, INC.
By: /s/ Garrett A. Sullivan
----------------------------
Its: Chairman
EMPLOYEE
By:
----------------------------
Debra S. Bogert
10,435/98337
<PAGE> 104
EMPLOYMENT AND NON-COMPETE AGREEMENT
------------------------------------
This Employment and Non-Compete Agreement ("Agreement") is made this -----
day of ---------------, 1997 by and between MVAK Technologies, Inc., a
- ----------- corporation with its principal office located at 299-A Ridgedale
Avenue, East Hanover, New Jersey 07936 (the "Employer") and Frank J. Giacona
(the "Employee").
A. Employer is in the business of remanufacturing and refurnishing
industrial vacuum pumps for resale;
B. Employer desires to retain the services of the Employee; and
C. Employee is willing to be employed by the Employer.
Therefore, the parties agree as follows:
1. CAPACITY. Employee shall serve the Employer as a Vice
--------
President and General Manager of the Employer's facility located in Orlando,
Florida.
2. BEST EFFORTS OF EMPLOYEE. During his employment hereunder,
------------------------
the Employee shall, subject to the direction and supervision of the
President, devote his full business time, best efforts, business judgment,
skill and knowledge to the advancement of the Employer's interests and to the
discharge of his duties and responsibilities hereunder. Such duties shall be
provided at Orlando, Florida and other such places as the needs, business or
opportunities of the Employer may require from time to time. In the event
that Employer requests that Employee transfer for the benefit of Employer,
that Employer extend to Employee the usual relocation benefits available to
executives of Employer. He shall not engage in any other business activity,
except as may be approved by the Board of Directors; provided, however, that
nothing herein shall be construed as preventing the Employee from:
a. investing his assets in a manner which shall not require
any material services on his part in the operations or affairs of the
companies or other entities in which such investments are made;
b. serving on the Board of Directors of any company, provided
he receives the approval in writing from the President, and provided that he
shall not be required to render any material services with respect to the
operations or affairs of any such company; or
c. engaging in religious, charitable or other community or
non-profit activities which does not impair his ability to fulfill his duties
and responsibilities under this Agreement.
3. COMPENSATION OF EMPLOYEE. As compensation for the services
------------------------
provided by Employee under this Agreement, Employer will pay Employee one
thousand four hundred dollars ($1,400.00) per week as base compensation
commencing on ----------------- and continuing
<PAGE> 105
EMPLOYMENT AND NON-COMPETE AGREEMENT
Page 2
thereafter on a weekly basis. Separate incentive and stock option plans will be
developed by the Employer, together with key management, and that these plans
will reflect company goals and performance objectives.
The Employee shall also be entitled to participate in any and all
employee benefit plans, medical insurance plans, life insurance plans,
disability income plans and other benefit plans, from time to time, in effect
for executives of the Employer. Such participation shall be subject to the
terms of the applicable plan documents, generally applicable Corporation
policies and the discretion of the Board of Directors or any administrative
or other committee provided for in, or contemplated by, such plan. In
addition, the Employee shall be entitled to receive benefits which are the
same or substantially similar to those which are currently being provided to
the other Executives by the Employer.
4. TERMINATION OF EMPLOYMENT. Upon termination of the Agreement,
-------------------------
payments under this Agreement shall cease; provided, however, that the
Employee shall be entitled to payments for periods or partial periods
that occurred prior to the date of termination and for which the Employee
has not yet been paid, including payments for accrued vacations.
5. REIMBURSEMENT FOR EXPENSES. In accordance with the
--------------------------
Employer's policy, the Employee shall be reimbursed for all expenses incurred
by Employee in the performance of his duties hereunder. The Employer shall
reimburse such expenses, subject to reasonable requirements with respect to
substantiation and documentation as specified by Employer.
Employer shall also reimburse Employee, for the business use of
his automobile, such reimbursement shall not exceed four hundred dollars
($400.00) per month.
6. CONFIDENTIALITY. Employee recognizes that the Employer has
---------------
and will have inventions, business affairs, products, future plans, trade
secrets, customer lists and other vital information (collectively
"Confidential Information") which are valuable, special and unique assets of
the Employer. The Employee agrees that he will not at any time or in any
manner, either directly or indirectly, divulge, disclose or communicate in
any manner any Confidential Information to any third party, except in the
normal course of business, without the prior written consent of the Employer.
The Employee will protect the Confidential Information and treat it as
strictly confidential.
In the event of a breach, or threatened breach, by Employee of
his obligations under this Paragraph, the Employee hereby acknowledges and
stipulates that the Employer shall not have an adequate remedy at law, shall
suffer irreparable harm and, therefore, it is mutually agreed and stipulated
by the parties hereto that, in addition to any other remedies at law or in
equity which Employer may have, the Employer shall be entitled to obtain in a
court of law and/or equity (i) a temporary and/or permanent injunction from
disclosing in whole or in part such Confidential Information or (ii) from
providing any services to any party to whom such Confidential Information has
been disclosed, or may be disclosed. Employer shall not be
<PAGE> 106
EMPLOYMENT AND NON-COMPETE AGREEMENT
Page 3
prohibited by this Paragraph from pursuing other remedies, including a claim for
losses and damages.
7. VACATION. The Employee shall be entitled to three (3) weeks of
--------
paid vacation. Such vacation shall be taken at a time mutually convenient to
Employer and Employee. Unused vacation may be accumulated, if not used
within the year it is earned, up to a maximum of six (6) weeks.
8. SICK DAYS/PERSONAL BUSINESS. The Employee shall be entitled
---------------------------
to five (5) paid sick or personal days off due to illness or personal
business each year of employment beginning on the first day of the Employee's
employment.
9. HOLIDAYS. The Employee shall be entitled to the standard
--------
company holidays.
10. TERM. This Employment Agreement shall have an initial term of
----
three (3) years, beginning at the commencement date so indicated at the end
of this Agreement.
11. TERMINATION. Notwithstanding the provisions of Paragraph 10,
-----------
the Employee's employment hereunder shall terminate under the following
circumstances:
a. Death or Permanent Disability. In the event of the
-----------------------------
Employee's death during the Employee's employment hereunder, the Employee's
employment shall terminate on the date of his death or Permanent Disability
(as defined below).
Permanent Disability. For the purposes of this Agreement,
--------------------
the term "permanent disability" shall mean the Employee's inability to
perform his duties as prescribed in this Agreement, which, following a
written request by either the Employer or the Employee, shall be determined
by agreement between the parties and, if they cannot agree, by a panel of
three (3) physicians, one of whom will be selected by the Employer, one by
the Employee and the third by the first two so selected. Said panel shall
also fix the date of the occurrence of the permanent disability. Said
panel's determination shall be conclusive. Notwithstanding anything to the
contrary set forth herein, the Employee shall be presumed to be permanently
disabled as of the date he is receiving payments for permanent disability
under any disability insurance policies or under the Social Security Act.
b. Temporary Disability. If, due to physical or mental
--------------------
illness, disability or injury, the Employee shall be disabled so as to be
unable to perform substantially all of his duties and responsibilities
hereunder, the Board of Directors may designate another person to act in his
place during the period of such disability. Notwithstanding any such
designation, the Employee shall continue to receive his full salary and
benefits under Paragraph 3 of this Agreement until he becomes eligible for
disability income under the Employer disability income plan. In the absence
of a disability income plan at the time of such disability, the Employer
shall pay the Employee benefits equal to those the Employee would have
received if the Employer's
<PAGE> 107
EMPLOYMENT AND NON-COMPETE AGREEMENT
Page 4
current disability income plan were in effect at such time; provided however,
that the Employer's obligations hereunder shall cease twelve (12) months from
the onset of such disability.
c. Termination by the Employer for Cause. The Employee's
-------------------------------------
employment hereunder may be terminated for cause, without further liability
on the part of the Employer, by the President of the Corporation.
Termination for cause includes, but is not limited to:
(i) Deliberate dishonesty of the Employee with respect to
the Employer.
(ii) Conviction of the Employee of a crime involving moral
turpitude.
(iii) Gross and willful failure to perform a substantial
portion of his duties and responsibilities hereunder.
(iv) Employee's abandonment of his duties hereunder for a
period of more than ninety (90) days. Abandonment by the Employee of duties
hereunder shall be deemed to have occurred if: the Employee ceases to
function and perform duties hereunder, leaves the geographic area in which
the Employer engages in its business, or conducts himself with intentional
disregard of the Employer's interests and its business.
12. RESIGNATION AS DIRECTOR. In the event that the Employee's
-----------------------
employment with the Employer is terminated for any reason whatsoever, the
Employee agrees to immediately resign as a Director of the Employer.
13. NON-COMPETITION. In the event that the Employee elects to
---------------
leave the employment of the Employer during or at the end of this Agreement
or any extension thereto, or if the Employee is terminated for cause, the
Employee is not permitted to engage in direct competition with the Employer
for a further period of three (3) years. For purposes of definition, "direct
competition" is deemed to be a similar company engaged in the remanufacturing
and refurbishing of vacuum pumps within a twenty (20) mile radius of any of
the Employer's facilities.
14. REPRESENTATIONS AND WARRANTIES. The Employee hereby
------------------------------
represents and warrants that he is free to enter this Agreement and to render
his services pursuant hereto and that neither the execution and delivery of
this Agreement, nor the performance of his duties hereunder, violates the
provisions of any other agreement to which he is a party or by which he is
bound.
15. DATE OF COMMENCEMENT. This Employment Agreement is effective
--------------------
as of the -------------- day of ---------------, 1997.
16. NOTICES. All notices required or permitted under this Agreement
-------
shall be in writing and shall be deemed delivered when delivered in person or
deposited in the United States mail, postage paid, addressed as follows:
<PAGE> 108
EMPLOYMENT AND NON-COMPETE AGREEMENT
Page 5
Employer: MVAK Technologies, Inc.
Attn: Garrett A. Sullivan
Chairman and Chief Executive Officer
Employee:
Such addresses may be changed from time to time by either party by providing
written notice in the manner set forth above.
17. ATTORNEY'S FEES. In the event that a dispute arises out of
---------------
this Agreement, the prevailing party shall be entitled to an award of
reasonable attorney's fees plus costs, including any appeals associated
therewith.
18. ENTIRE AGREEMENT. This Agreement contains the entire
----------------
agreement of the parties and there are no other promises or conditions in any
other agreement, whether oral or written. This Agreement supersedes any
prior written or oral agreements between the parties.
19. AMENDMENT. This Agreement may be modified or amended, if the
---------
amendment is made in writing and is signed by both parties.
20. ASSIGNMENT ENFORCEABILITY. If any portion or provisions of
-------------------------
this Agreement shall, to any extent, be declared illegal or unenforceable by
a court of competent jurisdiction, then the remainder of this Agreement, or
the application of such portion or provision in circumstances other than
those as to which it is so declared illegal or unenforceable, shall not be
affected thereby and each portion and provision of this Agreement shall be
valid and enforceable to the fullest extent permitted by law.
21. SEVERABILITY. If any provision of the Agreement shall be held
------------
to be invalid or unenforceable for any reason, the remaining provisions shall
continue to be valid and enforceable. If a court finds that any provision of
the Agreement is invalid or unenforceable, but that by limiting such
provision it would become valid and enforceable, then such provision shall be
deemed to be written, construed and enforced as so limited.
22. WAIVER OF CONTRACTUAL RIGHT. This failure of either party
---------------------------
to enforce any provision of this Agreement shall not be construed as a waiver
or limitation of that party's right to subsequently enforce and compel strict
compliance with every provision of this Agreement.
23. GOVERNING LAW; FORUM. This Agreement and any transaction or
--------------------
controversy arising therefrom or relating thereto shall, in all respects, be
governed by and construed according to the laws of the State of Florida. All
actions or proceedings arising out of, or relating to, this
<PAGE> 109
EMPLOYMENT AND NON-COMPETE AGREEMENT
Page 6
Agreement, shall be instituted exclusively in the United States District Court
for Orlando, Florida. Should the Federal District Court of Florida decline
jurisdiction, the parties hereto agree to institute action in state court in
Orlando, Florida.
24. Agreed to this 7th day of February, 1997.
--- --------
MVAK TECHNOLOGIES, INC.
By: /s/ Garrett A. Sullivan
---------------------------
Its: Chairman
EMPLOYEE
By:
---------------------------
Frank J. Giacona
10,435/98519
<PAGE> 110
EXHIBIT 10.2
CONSULTANT AND NON-COMPETE AGREEMENT
------------------------------------
This Consultant and Non-Compete Agreement ("Agreement") is made this -----
day of ---------------, 1997 by and between MVAK Technologies, Inc., a
- ----------- corporation with its principal office located at 299-A Ridgedale
Avenue, East Hanover, New Jersey 07936 (the "Company"), and SDS Corp. (the
"Contractor").
A. Company is in the business of remanufacturing and refurnishing
vacuum pumps for resale; and
B. Contractor desires to act as a consultant for the express purpose
of presenting to the Company synergistic acquisitions within the vacuum
industry for it to acquire ("Services").
NOW, THEREFORE, the parties agree as follows:
1. NATURE OF WORK. Contractor shall be available approximately
--------------
three (3) work days per week to perform such Services on behalf of the
Company. Contractor's primary focus is to identify and assist in the
purchase by the Company of synergistic businesses within the vacuum industry.
Contractor shall be solely responsible for the delivery of such Services,
such responsibility to include the method and hours of performance. Company
shall in no way be responsible for the monitoring, directing or supervising
of Contractor to work the necessary amount of time to fulfill the spirit and
intent of this Agreement.
2. COMPENSATION. Contractor shall be paid a fee calculated using
------------
the "Lehman Scale" for each acquisition made by the Company as a result of
the Contractor's efforts. Compensation shall be paid upon Closing, without
taxes, either federal or state withheld with a deduction offset equal to the
amount of non-compete fees advanced under the Non-Compete Agreement attached
hereto and made a part of this Agreement. Contractor shall be reimbursed for
necessary business expenses, expended in the course of performing the
Services. Contractor shall be solely responsible for any and all taxes on
fees received from the Company.
3. TERM. This Agreement shall be effective upon execution and
----
shall remain in effect for a two (2) year period from such effective date
("Effective Date") unless terminated sooner in accordance with this
Agreement. Except as expressly provided herein, all rights, duties and
obligations shall expire with said termination.
4. TERMINATION. Notwithstanding the provisions of Paragraph 3,
-----------
this Agreement shall terminate in the event of Ronald M. Kaplan's death.
Upon the termination of this Agreement, payments under this Agreement shall
cease; provided, however, that the Contractor shall be entitled to payments
for periods or partial periods that occurred prior to the date of termination
and for which the Contractor has not yet been paid.
<PAGE> 111
CONSULTANT AND NON-COMPETE AGREEMENT
Page 2
5. INDEPENDENT CONTRACTOR. Contractor is an Independent
----------------------
Contractor and shall not act as Company's agent, nor shall the Contractor be
deemed to be an employee of Company for any purposes whatsoever. The
Contractor shall not enter into any agreements, or incur any obligations on
Company's behalf, or commit Company in any other manner, without Company's
prior written consent.
Contractor represents that he is free to act as a consultant for
Company and further represents that he has no conflicting commitments with
others which would impair his ability to perform in accordance with the
provisions of this Agreement. Contractor also agrees to indemnify Company
from any losses or damages which may result from a determination that
Contractor is not free to perform the Services anticipated hereunder.
6. CONFIDENTIALITY. Contractor recognizes that the Company has
---------------
and will have inventions, business affairs, products, future plans, trade
secrets, customer lists and other vital information (collectively
"Confidential Information") which are valuable, special and unique assets of
the Company. The Contractor agrees that he will not, at any time or in any
manner, either directly or indirectly, divulge, disclose or communicate in
any manner any Confidential Information to any third party without the prior
written consent of the Company. The Contractor will protect the Confidential
Information and treat it as strictly confidential.
In the event of a breach, or threatened breach, by Contractor of
his obligations under this Paragraph, the Contractor hereby acknowledges and
stipulates that the Company shall not have an adequate remedy at law, shall
suffer irreparable harm and, therefore, it is mutually agreed and stipulated
by the parties hereto that, in addition to any other remedies at law or in
equity which Company may have, the Company shall be entitled to obtain in a
court of law and/or equity (i) a temporary and/or permanent injunction from
disclosing in whole or in part such Confidential Information or (ii) from
providing any services to any party to whom such Confidential Information has
been disclosed, or may be disclosed. Company shall not be prohibited by this
Paragraph from pursuing other remedies, including a claim for losses and
damages.
7. NON-COMPETITION. The letter agreement of January 31, 1997
---------------
between the Company and SDS Corp. and/or Ronald M. Kaplan attached hereto,
together with "Appendix A", is hereby made a part of this Agreement as if it
were recited in its entirety.
8. REPRESENTATIONS AND WARRANTIES. The Contractor hereby
------------------------------
represents and warrants that he is free to enter this Agreement and to render
his services pursuant hereto and that neither the execution and delivery of
this Agreement, nor the performance of his duties hereunder, violates the
provisions of any other agreement to which he is a party or by which he is
bound.
9. DATE OF COMMENCEMENT. This Agreement is effective as of the
--------------------
- ------------ day of ---------------, 1997.
<PAGE> 112
CONSULTANT AND NON-COMPETE AGREEMENT
Page 3
10. NOTICES. All notices required or permitted under this Agreement
-------
shall be in writing and shall be deemed delivered when delivered in person or
deposited in the United States mail, postage paid, addressed as follows:
Company: MVAK Technologies, Inc.
Attn: Garrett A. Sullivan
Chairman and Chief Executive Officer
Contractor:
Such addresses may be changed from time to time by either party
by providing written notice in the manner set forth above.
11. ENTIRE AGREEMENT. This Agreement contains the entire
----------------
agreement of the parties and there are no other promises or conditions in any
other agreement, whether oral or written. This Agreement supersedes any
prior written or oral agreements between the parties.
12. AMENDMENT. This Agreement may be modified or amended, if the
---------
amendment is made in writing and is signed by both parties.
13. ASSIGNMENT ENFORCEABILITY. If any portion or provisions of
-------------------------
this Agreement shall, to any extent, be declared illegal or unenforceable by
a court of competent jurisdiction, then the remainder of this Agreement, or
the application of such portion or provision in circumstances other than
those as to which it is so declared illegal or unenforceable, shall not be
affected thereby and each portion and provision of this Agreement shall be
valid and enforceable to the fullest extent permitted by law.
14. SEVERABILITY. If any provision of the Agreement shall be held
------------
to be invalid or unenforceable for any reason, the remaining provisions shall
continue to be valid and enforceable. If a court finds that any provision of
the Agreement is invalid or unenforceable, but that by limiting such
provision it would become valid and enforceable, then such provision shall be
deemed to be written, construed and enforced as so limited.
15. WAIVER OF CONTRACTUAL RIGHT. This failure of either party
---------------------------
to enforce any provision of this Agreement shall not be construed as a waiver
or limitation of that party's right to subsequently enforce and compel strict
compliance with every provision of this Agreement.
16. APPLICABLE LAW. This Agreement shall be governed by the laws
--------------
of the State of New Jersey.
<PAGE> 113
CONSULTANT AND NON-COMPETE AGREEMENT
Page 4
17. Agreed to this 7th day of February, 1997.
--- --------
MVAK TECHNOLOGIES, INC. ("Company")
By: /s/ Garrett A. Sullivan
-----------------------------
Its Chairman
SDS Corp. ("Contractor")
By:
-----------------------------
Its
--------------------------------
Ronald M. Kaplan, Individually
10,435/98548
<PAGE> 114
February , 1997
----
Ronald M. Kaplan
SDS Corp.
299-4 Ridgedale Avenue
East Hanover, NJ 07936
Re: Letter Agreement - Non-Compete, Confidentiality
Dear Ron:
This letter agreement is between MVAK Technologies, Inc. ("MVAK") and SDS Corp.
and/or Ronald M. Kaplan. The purpose is to continue the "Non-Competition, Non-
Disclosure...Agreement" of May 21, 1990 as set forth and attached hereto as
"Appendix A".
SDS Corp. and Ronald M. Kaplan, in consideration of the payments and benefits
set forth herein, individually and collectively, agree not to compete with the
business of MVAK anywhere within the continental United States for a period of
four (4) years from the date of execution of this Agreement. Further, SDS Corp.
and Ronald M. Kaplan agree to be bound by all of the terms and conditions of
"Appendix A" as if it were set forth here in its entirety.
MVAK shall continue to make Non-Compete fee payments of One Thousand Eight
Hundred Dollars ($1,800.00) per week to SDS Corp. for the next twenty-four
(24) months. SDS Corp. shall provide, to Ronald M. Kaplan, life insurance
coverage and a Five Hundred Dollar ($500.00) per month car allowance for the
same period. SDS Corp. shall then invoice MVAK for the costs of the above
which shall be reimbursed monthly. MVAK shall continue to provide to Ronald
M. Kaplan family health insurance.
This contract shall terminate forty-eight (48) months from the date of
inception or upon the death of Ronald M. Kaplan.
Very truly yours, Agreed to:
Garrett Sullivan, President
-------------------------------
Ronald M. Kaplan, SDS Corp.
-------------------------------
Ronald M. Kaplan, Individually
10,435/98574
<PAGE> 115
"APPENDIX A"
------------
Non-Competition, Non-Disclosure, Proprietary Information
and Patent and Invention Assignment Agreement
--------------------------------------------------------
May 21, 1990
In consideration of my employment or continued employment, as the
case may be, with MVAK Technologies, Inc. (the "Company"), and the compensation
received by me from the Company from time to time, I hereby agree with the
Company as follows:
1. Proprietary Information and Inventions. I understand and
--------------------------------------
acknowledge that:
(a) The Company is engaged in a continuous program of
research, design, development, production, marketing and servicing with
respect to its business and that as part of my employment by the Company
I am (or may be) expected to make new contributions and inventions of
value to the Company.
(b) My employment creates a relationship of confidence and
trust between me and the Company with respect to certain information
applicable to the business of the Company or applicable to the business
of any client or customer of the Company, which may be made known to me
by the Company or by any client or customer of the Company, or learned by
me during the period of my employment.
(c) The Company possesses and will continue to possess
information that has been created, discovered or developed by, or
otherwise become known to, the Company (including, without limitation,
information created, discovered, developed or made known by me during the
period of or arising out of my employment by the Company, whether before
or after the date hereof) or in which property rights have been or may be
assigned or otherwise conveyed to the Company, which information has
commercial value in the business in which the Company is engaged and is
treated by the Company as confidential. All such information is
hereinafter called "Proprietary Information", which term, as used
herein, shall also include, but shall not be limited to, systems,
processes, formulae, data, functional specifications, computer programs,
blueprints, know-how, improvements, discoveries, developments, designs,
inventions, techniques, marketing plans, strategies, forecasts, new
products, unpublished financial statements, budgets, projections,
licenses,
<PAGE> 116
prices, costs, and customer and supplier lists; provided, however, that
-------- -------
the term "Proprietary Information" shall not include any of the foregoing
which is in the public domain.
(d) All existing lists of customers of the Company, and
all lists of customers of the Company developed during the course
of my employment by the Company, are and shall be the sole and exclusive
property of the Company, and that I neither have nor shall have any
right, title or interest therein; such lists of customers are and must
continue to be confidential; such lists of customers are not readily
accessible to competitors of the Company; and the Company's present and
future business relationship with its customers is and will continue to
be of a type which normally continues unless interfered with by others.
(e) As used herein, the period of my employment includes any
time during which I may be retained by the Company as a consultant.
2. Ownership of Proprietary Information. All Proprietary
------------------------------------
Information shall be the sole property of the Company and its assigns, and
the Company and its assigns shall be the sole owner of all patents, copyrights,
trademarks and other rights in connection therewith. I hereby assign to the
Company any rights I may have or acquire in such Proprietary Information.
I hereby acknowledge that all Proprietary Information is and must continue
to be confidential, and that the same is not readily accessible to competitors
of the Company. At all times, both during my employment by the Company and
after its termination, I will keep in strictest confidence and trust all
Proprietary Information and I will not use or disclose any Proprietary
Information without the written consent of the Company, except as may be
necessary in the ordinary course of performing my duties as an employee of
the Company.
3. Commitment to Company; Other Employment. During the period
---------------------------------------
of my employment by the Company I will devote substantially all of my time
for the Company and I will not, without the Company's prior written consent,
engage in any employment or business other than for the Company.
4. Documentation. In the event of the termination of my
-------------
employment for any reason, I will deliver to the Company all documents,
notes, drawings, blueprints, formulae, specifications, computer programs,
data and other materials of any nature pertaining to any Proprietary
Information or to my work with the Company, and will not take any of the
foregoing or any reproduc-
- 2 -
<PAGE> 117
tion of any of the foregoing that is embodied in a tangible medium of
expression.
5. Disclosure of Inventions. I will promptly disclose to the
------------------------
Company (or any persons designated by it) all discoveries, developments,
designs, improvements, inventions, blueprints, formulae, processes,
techniques, computer programs, strategies, know-how and data, whether or not
patentable or registrable under copyright or similar statutes, made or
conceived or reduced to practice or learned by me, either alone or jointly
with others, during the period of my employment that are related to the
business of the Company, result from tasks assigned to me by the Company or
result from the use of premises or property (including computer systems and
engineering facilities) owned, leased or contracted for by the Company (all
such discoveries, developments, designs, improvements, inventions, formulae,
processes, techniques, computer programs, strategies, blueprints, know-how
and data are hereinafter referred to as "Inventions"). I will also promptly
disclose to the Company, and the Company hereby agrees to receive all such
disclosures in confidence, all other discoveries, developments, designs,
improvements, inventions, formulae, processes, techniques, computer programs,
strategies, blueprints, know-how and data, whether or not patentable or
registrable under copyright or similar statutes, made or conceived or reduced
to practice or learned by me, either alone or jointly with others, during the
period of my employment for the purpose of determining whether they
constitute "Inventions", as defined above.
6. Ownership of Inventions. All Inventions shall be the sole
-----------------------
property of the Company and its assigns, and the Company and its assigns shall
be the sole owner of all patents, copyrights, trademarks and other rights in
connection therewith. I hereby assign to the Company any rights I may have or
acquire in such Inventions. I shall assist the Company in every proper way
as to all such Inventions (but at the Company's expense) to obtain, and from
time to time enforce, patents, copyrights, trademarks and other rights and
protections relating to said Inventions in any and all countries, and to that
end I will execute all documents for use in applying for and obtaining such
patents, copyrights, trademarks and other rights and protections on and
enforcing such Inventions, as the Company may desire, together with any
assignments thereof to the Company or persons designated by it. My obligation
to assist the Company in obtaining and enforcing patents, copyrights,
trademarks and other rights and protections relating to such Inventions in
any and all countries shall continue beyond the termination of my employment,
but the Company shall compensate me at a reasonable rate after my termination
for time actually spent by me at the Company's request on such assistance.
In the event the Company is unable, after reasonable effort, to secure my
signature on any document
- 3 -
<PAGE> 118
or documents needed to apply for or prosecute any patent, copyright, or other
right or protection relating to an Invention, for any reason whatsoever,
I hereby irrevocably designate and appoint the Company and its duly authorized
officers and agents as my agent and attorney-in-fact, to act for and on my
behalf to execute and file any such application or applications and to do
all other lawfully permitted acts to further the prosecution and issuance of
patents, copyrights or similar protections thereon with the same legal force
and effect as if executed by me and I hereby ratify, affirm and approve all
such lawfully permitted acts accordingly.
7. Other Agreements. I represent and warrant that my execution
----------------
and delivery of this Agreement and the performance of all the terms of this
Agreement does not and will not breach any agreement to keep in confidence
proprietary information acquired by me in confidence or trust. I have not
entered into and shall not enter into any agreement, either written or oral,
in conflict herewith.
8. Use of Confidential Information of Other Persons. I represent
------------------------------------------------
that I have not brought and will not bring with me to the Company or use at
the Company any materials or documents of an employer or a former employer
that are not generally available to the public, unless express written
authorization from such employer for their possession and use has been
obtained. I also understand that I am not to breach any obligation of
confidentiality that I have to any employer or former employer and agree to
fulfill all such obligations during the period of my affiliation with the
Company.
9. Restrictive Covenant. I hereby acknowledge and recognize
--------------------
my possession of Proprietary Information and the highly competitive nature
of the business of the Company and accordingly agree that, in consideration
of the premises contained herein, I will not, during the period of my
employment by the Company and in the event that my employment with the
Company is terminated for any reason whatsoever and whether such termination
be voluntary or involuntary, for a period of twelve months following such
termination, (i) directly or indirectly engage in any Competitive Business
(as hereinafter defined), whether such engagement shall be as an employer,
officer, director, owner, employee, partner or other participant, (ii) assist
others in engaging in any Competitive Business in the manner described in the
foregoing clause (i), or (iii) induce employees of the Company, its
affiliates or subsidiaries to terminate their employment with the Company or
such affiliate or subsidiary and/or engage in any Competitive Business. As
used in this Section 9 the term "Competitive Business" means and includes
any business located in the United States of America which is directly
competitive with the Company's business at the date of such termination.
- 4 -
<PAGE> 119
If my employment with the Company is terminated and the Company,
in its sole discretion, elects to pay me compensation equal to at least
50% of my annual salary as of the date of such termination, for the twelve
months following such termination, such compensation shall be accepted by me
and deemed to be sufficient consideration for my agreement contained in this
Section 9; provided, however, that the Company shall in no event be obligated
-------- -------
to pay me such compensation.
I understand that this Section 9 is not meant to prevent me from
earning a living or fostering my career. It does intend however to prevent
any Competitive Business from gaining any unfair advantage from my knowledge
of Proprietary Information. I understand that by making my new employer aware
of the provisions of this Section 9, they can take such action as to avoid
my breaching the provisions hereof and to indemnify me in the event of a
breach.
10. Agreement Not to Solicit Customers. During the course of my
----------------------------------
employment by the Company and for a period of two years following the
termination of such employment for any reason whatsoever and whether such
termination be voluntary or involuntary, I will not, directly or indirectly,
as owner, officer, director, stockholder, partner, associate, consultant,
manager, advisor, representative, employee, agent, creditor or otherwise,
attempt to solicit or in any other way disturb or service any person, firm
or corporation that has been a customer account of the Company at any time
or times within two years prior to the termination date of my employment,
whether or not I had direct account responsibility for a contact with such
customer account.
11. Remedies. I acknowledge that a remedy at law for any breach
--------
or threatened breach of the provisions of this Agreement would be inadequate
and therefore agree that the Company shall be entitled to injunctive relief
in addition to any other available rights and remedies in case of any such
breach or threatened breach; provided, however, that nothing contained
-------- -------
herein shall be construed as prohibiting the Company from pursuing any other
remedies available for any such breach or threatened breach.
12. Assignment. This Agreement and the rights and obligations of
----------
the parties hereto shall bind and inure to the benefit of any successor or
successors of the Company by reorganization, merger or consolidation or
otherwise and any assignee of all or substantially all of its business and
properties, except that neither this Agreement nor any rights or benefits
hereunder may be assigned by me.
13. Interpretation. It is the desire and intent of the parties
--------------
hereto that the provisions of this Agreement shall be enforced to the
fullest extent permissible under the laws and
- 5 -
<PAGE> 120
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement shall be adjudicated
to be invalid or unenforceable, such provision shall be deemed amended to
delete therefrom the portion thus adjudicated to be invalid or unenforceable,
such deletion to apply only with respect to the operation of such provision
in the particular jurisdiction in which such adjudication is made. In addition,
if any one or more of the provisions contained in this Agreement shall for any
reason be held to be excessively broad as to duration, geographical scope,
activity or subject, it shall be construed by limiting and reducing it so as
to be enforceable to the extent compatible with the applicable law as it
shall then appear.
14. Notices. Any notice which a party is required or may desire
-------
to give pursuant to this Agreement shall be given by personal delivery or
registered or certified mail, return receipt requested, addressed to the
Employee at the address of the Employee of record with the Company and
addressed to the Company at its principal office, or at such other place
as either party may from time to time designate in writing. The date of
personal delivery or the date of mailing any such notice shall be deemed
to be the date of delivery thereof.
15. Waivers. If either party shall waive any breach of any
-------
provision of this Agreement, he or it shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of
this Agreement.
16. Headings. The headings of the sections hereof are inserted for
--------
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning hereof.
17. Governing Law. This Agreement shall be governed by, and
-------------
construed and enforced in accordance with, the laws of the State of New Jersey
with respect to contracts made and to be performed wholly therein.
18. No Employment Agreement. I acknowledge that this Agreement
-----------------------
does not constitute an employment agreement and agree that this Agreement
shall be binding upon me regardless of whether or not my employment shall
continue for any length of time hereafter and whether or not my employment
is terminated for any reason whatsoever by either the Company or me or both.
19. Complete Agreement; Amendments; Prior Agreements. The
------------------------------------------------
foregoing is the entire agreement of the parties with respect
- 6 -
<PAGE> 121
to the subject matter hereof and may not be amended, supplemented,
cancelled or discharged except by written instrument executed by both
parties hereto. This Agreement supersedes any and all prior agreements
between the parties hereto with respect to the matters covered hereby.
/s/ Ronald M. Kaplen
--------------------------------
Employee
Accepted and agreed to as of
the date first above written by
MVAK TECHNOLOGIES, INC.
By: /s/
-----------------------------
- 7 -
