Exhibit 99.1

 

EXECUTION VERSION

 

AGREEMENT OF PURCHASE AND SALE

 

BETWEEN

 

TECTROL INC. as

Seller

 

– and –

 

CUI-CANADA, INC.

as Buyer

 

FEBRUARY 23, 2015

 

 

Agreement of Purchase and Sale

 

AGREEMENT OF PURCHASE AND SALE

 

THIS AGREEMENT is dated as of February 23, 2015

 

B E T W E E N:

 

TECTROL INC., a corporation existing under the laws of the Province of Ontario

 

(the “Seller”)

 

- and -

 

CUI-CANADA, INC., a corporation existing under the laws of the Province of Nova Scotia (“CUI Canada”)

 

(the “Buyer”)

 

WHEREAS:

 

A.

On November 6, 2014, the Seller commenced insolvency proceedings by filing a Notice of

 

Intention to Make a Proposal (“NOI”) pursuant to the Bankruptcy and Insolvency Act (Canada) (the “BIA”). Duff & Phelps Canada Restructuring Inc. was appointed as the trustee in re the proposal of Tectrol Inc. (the “Proposal Trustee”) under the NOI.

 

B.

Subsequent to filing the NOI, the Seller, in consultation with the Proposal Trustee, solicited asset purchase offers in respect of the Seller’s Business (as defined herein) and assets on a going concern or other basis (the “Sale Process”).

 

C.

The Seller wishes to sell and the Buyer wishes to purchase the Purchased Assets (as defined below) upon and subject to the terms and conditions hereof.

 

THEREFORE, in consideration of the promises, mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties (as defined below), each of the Parties hereto agree as follows:

 

Article 1

INTERPRETATION

 

1.1

Definitions

 

In this Agreement the following terms have the following meanings:

 

Agreement of Purchase and Sale

 

 

1.1.1

“Accounts Receivable” means all accounts receivables, bills receivable, trade accounts, trade debts and book debts and insurance claims due or accruing due in connection with the Business, including any refunds and rebates receivable relating to the Business or the Purchased Assets and the full benefit of all security (including cash deposits), guarantees and other collateral held by the Seller, or a related party to the Seller, relating to the Business and all bank accounts;

 

1.1.2

“Accounts Receivable Records” has the meaning set out in Section 1.1.25.2;

 

1.1.3

“Agreement” means this agreement of purchase and sale, including all Schedules and Exhibits attached hereto, as it may be supplemented, amended, restated or replaced from time to time by written agreement between the Parties;

 

1.1.4

“Applicable Law” means, at any time, with respect to any Person, property, transaction or event, all applicable laws, statutes, regulations, treaties, judgments and decrees and (whether or not having the force of law) all applicable official directives, rules, consents, approvals, by-laws, permits, authorizations, guidelines, order and policies of any Governmental Authority having authority over that Person, property, transaction or event;

 

1.1.5

“Approval and Vesting Order” has the meaning given in Section 5.3.1;

 

1.1.6

“Assumed Contracts” means the agreements and licenses listed in Schedule “1” hereto being assumed by the Buyer on the Closing Date, including, but not limited to, the CBA and the SAP software program;

 

1.1.7

“Assumed Obligations” has the meaning given in Section 2.3;

 

1.1.8

“BIA” has the meaning set out in Recital A;

 

1.1.9

“Books and Records” means all information in any form relating to the Business, including books of account, financial and accounting information and records, personnel records, tax records, sales and purchase records, customer and supplier lists, list of potential customers, referral sources, research and development reports and records, production reports and records, business reports, laboratory reports and logs, plans and projections, marketing and advertising materials and all other documents, files, correspondence and other information (whether in written, printed, electronic or computer printout form, or stored on computer discs or other data and software storage and media devices, including, without limitation, with respect to the SAP and accounting software), other than the Accounts Receivable Records;

 

1.1.10

“Business” means the business of the Seller operated out of the Premises, including the manufacturing and distribution of power supply units for electronic devices;

 

1.1.11

“Business Day” means any day excluding a Saturday, Sunday or statutory holiday in the Province of Ontario, and also excluding any day on which the principal chartered banks located in the City of Toronto are not open for business during normal banking hours;

 

Agreement of Purchase and Sale

 

 

1.1.12

“Closing” means the successful completion of the Transaction;

 

1.1.13

“Closing Adjustments” shall mean the following adjustments to the Purchase Price as at the Time of Closing or otherwise set out herein:

 

1.1.13.1

a post-Closing Inventory adjustment to be applied by the Seller and the Buyer within thirty (30) days of Closing, in the event that the final book value of the Inventory decreases, or increases, in an amount equal to $50,000 or more as at February 28, 2015, compared to the book value as at November 30, 2014, based solely on the Inventory Valuation Methodology;

 

1.1.13.2

an amount equal to the aggregate sum of the key employment retention plan (the “KERP”) set up by the Seller and offered to certain of its employees, and which the Buyer shall continue to pay from the Time of Closing in accordance with the details described in the attached Schedule “11” hereto, which amount shall be converted from CAD to the USD Equivalent for the purpose of Closing. The Buyer shall incorporate the KERP terms, as described in Schedule “11” hereto, into a new payment arrangement with those employees entitled to the KERP (the “KERP Employees”), which arrangement shall include a release in favour of the Seller to be executed by each of the KERP Employees releasing the Seller of all obligations relating to the KERP payments arising after Closing. In the event that any of the KERP Employees resign or are terminated for cause prior to, or not paid in accordance with, a scheduled KERP payment, the Buyer shall reimburse the Seller an amount equal to the payment(s) that would otherwise be payable to such KERP Employee(s) within seven (7) Business Days of such resignation or termination being effective;

 

1.1.13.3

an amount equal to any and all liabilities or obligations arising or accruing from the use of the Purchased Assets in the ordinary course of business, other than liabilities arising from an accident or negligence, from March 1, 2015 to the Closing Date shall be reimbursed by the Buyer to the Seller, which amount shall be finalized by the Parties within thirty (30) days of Closing and converted from CAD to the USD Equivalent; provided that the Seller shall reimburse the Buyer for any amounts paid by the Buyer in respect of liabilities relating to the use of the Purchased Assets in the ordinary course of business arising prior to March 1, 2015; and

 

1.1.13.4

an amount equal to the Employee Liabilities for the Hired Employees and the Union Employees for the period from March 1, 2015 to the Closing Date shall be reimbursed by the Buyer to the Seller, which amount shall be finalized by the Parties within thirty (30) days of Closing and converted from CAD to the USD Equivalent; unless such Employee Liabilities are paid directly by the Buyer;

 

Agreement of Purchase and Sale

 

 

1.1.14

“Closing Date” means the second Business Day following the date on which the Approval and Vesting Order is granted, or such later date as agreed upon by the Parties in writing;

 

1.1.15

“Communication” means any notice, demand, request, consent, approval or other communication which is required or permitted by this Agreement to be given or made by a Party hereto;

 

1.1.16

“Confidentiality Agreement” means the confidentiality agreement entered into between FOCUS Investment Banking LLC, the Seller and CUI Global Inc. dated as of November 11, 2014, as same may be amended, restated, amended and restated, modified, supplemented or replaced from time to time;

 

1.1.17

“Confidential Information” has the meaning given to that term in the Confidentiality Agreement;

 

1.1.18

“Court” means the Ontario Superior Court of Justice (Commercial List);

 

1.1.19

“CUI Proposal” means the proposal regarding asset purchase of Tectrol Inc. executed and delivered by CUI Global Inc. to the Seller, and acknowledged by the Seller, on January 23, 2015, a copy of which is attached as Schedule “7” hereto;

  

1.1.20

“Deposit” has the meaning given in Section 2.6.1;

 

1.1.21

“Employees” means all individuals employed or retained by the Seller on a full-time, part-time or temporary basis in connection with the Business, excluding Union Employees;

 

1.1.22

“Employee Liabilities” means any liability imposed upon the Seller or the Buyer pursuant to any federal or provincial legislation pursuant to which such party is deemed to be a successor employer, related employer or otherwise responsible for or liable or payment of any amounts owing to any of the current or former Employees (including, but not limited to, the Hired Employees), whether pursuant to the Employment Standards Act, 2000, S.O. 200, c. 41, the Pay Equity Act, R.S.O. 1990, c. P.7, or the Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sch. A. Without limiting the foregoing, Employee Liabilities shall include:

 

1.1.22.1

all salaries, wages, bonuses, commissions and other compensation (including accrued unpaid vacation pay and any retroactive pay) and all liabilities under employee pension and benefit plans relating to employment of the current or former Employees;

 

1.1.22.2

all severance payments, damages for wrongful dismissal and all related costs in respect of the termination by the Seller of the current or former Employees; and

 

Agreement of Purchase and Sale

 

 

1.1.22.3

all liabilities for claims for injury, disability, death or workers’ compensation arising from or relating to employment in the Business;

 

1.1.23

“Equipment” means the equipment and tools of the Seller described in Schedule “2” hereto;

 

1.1.24

“ETA” means the Excise Tax Act (Canada);

 

1.1.25

“Excluded Assets” means any and all assets of the Seller other than the Purchased Assets, as the Buyer may advise prior to Closing, including, but not limited to, the following:

 

1.1.25.1

Cash and Accounts Receivable – all cash on hand, cash equivalents, bank deposits of the Seller and Accounts Receivable;

 

1.1.25.2

Accounts Receivable Records – ownership and title, but for greater certainty not possession, of all books of account, financial and accounting information and sales purchase records (whether in written, printed, electronic or computer printout form, or stored on computer discs or other data and software storage and media devices) necessary for the collection of the Accounts Receivable, Tax Refunds and Prepaid Expenses (collectively, the “Accounts Receivable Records”) until the earlier of (i) the date upon which the Seller receives all amounts in satisfaction of the Accounts Receivable, Prepaid Expenses and Tax Refunds, if any, and (ii) the date which is twelve (12) months following the Closing Date;

 

1.1.25.3

Prepaid Expenses – the full benefit of prepaid expenses of the Business by the Seller, or any related party on behalf of the Seller, and any and all deposits, including with any public utility, suppliers, lessor under any personal or real property lease or Governmental Authority (collectively, the “Prepaid Expenses”) including, but not limited to, the Prepaid Expenses listed in Schedule “9” hereto. For the purpose of Closing, the Parties agree and acknowledge that: (i) Schedule “9” shall be in draft form as at the Time of Closing; and (ii) the Parties shall reconcile and finalize a list of Prepaid Expenses to be included in Schedule “9” hereto within thirty (30) days of the Time of Closing; and

 

1.1.25.4

Tax Refunds – the benefit of any and all refundable Taxes or paid by the Seller net of any amounts withheld by any taxing authority, and any claim or right of the Seller to any refund, rebate Taxes, including, but not limited to, any SR&ED refunds or credits;

 

1.1.26

“Excluded Liabilities” has the meaning given in Section 2.4;

 

Agreement of Purchase and Sale

 

 

1.1.27

“Governmental Authority” means any federal, provincial, state, local, municipal, regional, territorial, aboriginal, or other government, governmental or public department, branch, ministry, or court, domestic or foreign, including any district, agency, commission, board, arbitration panel or authority and any subdivision of the foregoing exercising or entitled or purporting to exercise any administrative, executive, judicial, ministerial, prerogative, legislative, regulatory or taxing authority or power of any nature; or any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing;

 

1.1.28

“HST” means all harmonized sales taxes payable under the ETA;

 

1.1.29

“Hired Employees” has the meaning set out in Section 3.1;

 

1.1.30

“Intellectual Property” means any and all trademarks, copyrights, patents, patent applications, industrial designs, engineering drawings, trade secrets, trade dress, trade styles or other logos owned by the Seller and all licenses related to the foregoing, any applications of and/or registrations by the Seller (whether domestic or foreign) in respect thereof, all software, know-how, hardware, servers and computers containing the foregoing, including, without limitation, the Intellectual Property described in Schedule “4” hereto;

 

1.1.31

“Inventory” means the inventory described in Schedule “3” hereto;

 

1.1.32

“Inventory Valuation Methodology” means the November 30, 2014 methodology agreed to by the Parties for valuing the Inventory as set out in Schedule “8” hereto;

 

1.1.33

“NOI” has the meaning set out in Recital A;

 

1.1.34

“Parties” means the Seller and the Buyer;

 

1.1.35

“Person” means an individual, body corporate, sole proprietorship, partnership or trust or unincorporated association, unincorporated syndicate, unincorporated organization, or another entity, and a natural person, acting in his or her individual capacity or in his or her capacity as executor, trustee, administrator or legal representative, and any Governmental Authority;

 

1.1.36

“Premises” means the premises leased by the Seller and municipally known as 39 Kodiak Crescent, Toronto, Ontario;

 

1.1.37

“Proposal Trustee” has the meaning set out in Recital A, and shall also include Duff & Phelps Canada Restructuring Inc. in such capacity as trustee in bankruptcy or receiver or court-appointed monitor in any future insolvency proceedings involving the Seller under the BIA or Companies’ Creditors Arrangement Act (Canada), as the case may be;

 

Agreement of Purchase and Sale

 

 

1.1.38

“Purchased Assets” means the right, title and interest of the Seller in and to the Assumed Contracts, Intellectual Property, goodwill of the Business, Inventory and Equipment;

 

1.1.39

“Purchase Price” means $5,500,000.00, with payment of the Purchase Price to be made in accordance with Section 2.6 and allocation of the Purchase Price to be made in accordance with Section 2.7;

 

1.1.40

“Required Consents” means the consents listed in Schedule “5” hereto to the extent required under the applicable Assumed Contract and obtained by the Seller, using commercially reasonable efforts, with respect to the assignment of such Assumed Contract by the Seller to the Buyer;

 

1.1.41

“Seller’s Solicitors” means Borden Ladner Gervais LLP;

 

1.1.42

“Time of Closing” means 10:00 a.m. (Toronto Time) on the Closing Date or such other time on the Closing Date as the Parties may mutually agree;

 

1.1.43

“Transaction” means the transaction of purchase and sale contemplated by this Agreement;

 

1.1.44

“Union Employees” means individuals currently or formerly employed by the Seller in the Business of the Seller and governed by the Collective Bargaining Agreement (the “CBA”) with the International Brotherhood of Electrical Workers (the “Union”) entered into between the Seller and the Union effective from January 1, 2013 to December 31, 2015, which is listed as an Assumed Contract in Schedule “1” hereto;

  

1.1.45

“U.S. Dollars” or “US $” each means the currency of the United States which, as at the time of payment or determination, is legal tender in the United States for the payment or determination of public or private debts; and

  

1.1.46

“USD Equivalent” means, on any Business Day, in relation to an amount denominated in Canadian Dollars (“CAD”), the amount expressed in US $ into which such CAD amount can be converted using the applicable Bank of Canada rate as at close of business on the day that is one Business Day prior to Closing.

 

Agreement of Purchase and Sale

 

 

1.2

Entire Agreement

 

This Agreement, together with the agreements and other documents to be delivered pursuant to this Agreement, constitutes the entire agreement between the Parties pertaining to the subject matter of this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties, other than the provisions of the Confidentiality Agreement, and there are no representations, warranties or other agreements between the Parties in connection with the subject matter of this Agreement except as specifically set out in this Agreement or the other agreements and documents delivered pursuant to this Agreement. This Agreement may not be amended or modified in any respect, except by written instrument signed by the Parties.

 

1.3

Time of Day

 

Unless otherwise specified, references to time of day or date mean the local time or date in the City of Toronto, Province of Ontario.

 

1.4

Business Day

 

Whenever any payment to be made or action to be taken under this Agreement is required to be made or taken on a day other than a Business Day, the payment is to be made or action taken on the next Business Day following.

 

1.5

Consent

 

Whenever a provision of this Agreement requires an approval or consent and such approval or consent is not delivered within the applicable time limit, then, unless otherwise specified, the Party whose consent or approval is required shall be conclusively deemed to have withheld its approval or consent.

 

1.6

Governing Law

 

This Agreement is governed by, and is to be construed and interpreted in accordance with, the laws of the Province of Ontario and the laws of Canada applicable in that Province.

 

1.7

Certain Rules of Interpretation

 

1.7.1

In this Agreement, words signifying the singular number include the plural and vice versa, and words signifying gender include all genders. Every use of the word “including” in this Agreement is to be construed as meaning “including, without limitation”.

  

1.7.2

The division of this Agreement into Articles and Sections, the insertion of headings and the provision of a table of contents are for convenience of reference only and do not affect the construction or interpretation of this Agreement.

 

1.7.3

eferences in this Agreement to an Article, Section, Schedule or Exhibit are to be construed as references to an Article, Section, Schedule or Exhibit of or to this Agreement unless the context requires otherwise.

 

Agreement of Purchase and Sale

 

 

1.7.4

Unless otherwise specified in this Agreement, time periods within which or following which any payment is to be made or act is to be done will be calculated by excluding the day on which the period commences and including the day on which the period ends. If the last day of a time period is not a Business Day, the time period will end on the next Business Day.

 

1.7.5

Unless otherwise specified, any reference in this Agreement to any statute includes all regulations made under or in connection with that statute, and is to be construed as a reference to that statute as amended, supplemented or replaced.

 

1.7.6

Whenever an amount of money is referred to in this Agreement, that amount will, unless otherwise expressly stated, be in U.S. Dollars.

 

1.8

Schedules and Exhibits

 

The following is a list of Schedules and Exhibits:

 

Schedule	Subject Matter	Section Reference
Schedule 1	Assumed Contracts	1.1.6
Schedule 2	Equipment	1.1.23
Schedule 3	Inventory	1.1.31
Schedule 4	Intellectual Property	1.1.30
Schedule 5	Required Consents	1.1.40
Schedule 6	Allocation of Purchase Price	2.7
Schedule 7	CUI Proposal	1.1.19
Schedule 8	Inventory Valuation Methodology	1.1.32
Schedule 9	Prepaid Expenses	1.1.25.3
Schedule 10	List of Royalty Payment Customers	2.6.2.3
Schedule 11	KERP Payments	1.1.13.2
Exhibit	Subject Matter	Section Reference
Exhibit A	Form of Approval and Vesting Order	5.3.1
Exhibit B	Form of Bill of Sale	6.2.2/6.3.1

 

Agreement of Purchase and Sale

 

 

Article 2

SALE AND PURCHASE AND ASSIGNMENT

 

2.1

Sale and Purchase of Purchased Assets

 

Subject to the terms and conditions of this Agreement, and relying upon the representations and warranties herein, the Seller hereby agrees to sell, assign, convey and transfer to the Buyer and the Buyer hereby agrees to purchase all right, title and interest of the Seller in and to the Purchased Assets on the Closing Date. The Buyer acknowledges that it is not purchasing any other assets, property or undertaking of the Seller other than the Purchased Assets.

 

2.2

Assignment and Assumption of Contracts

 

Subject to the conditions and terms of this Agreement, the Seller will use commercially reasonable efforts to assign to the Buyer, as set out herein, all of the Seller’s rights, benefits and interests in and to the Assumed Contracts, and will use commercially reasonable efforts to obtain the Required Consents prior to Closing. This Agreement and any document delivered under this Agreement will not constitute an assignment or an attempted assignment of any Assumed Contract contemplated to be assigned to the Buyer under this Agreement which is not assignable without the consent of a third party if that consent has not been obtained and that assignment or attempted assignment would constitute a breach of such Assumed Contract or, in the alternative, if an order of the Court authorizing and approving the assignment of the Assumed Contracts to the Buyer has not been obtained.

 

2.3

Assumed Obligations

 

From and after the Closing Date, the Buyer shall assume and be liable for the Assumed Obligations. The Assumed Obligations shall consist of the following:

 

a)

all Employee Liabilities payable to or related to any Hired Employees arising from and after the Closing Date;

 

b)

all KERP payments payable to or related to the KERP Employees described in the attached Schedule “11” hereto from and after the Closing Date pursuant to new payment arrangements to be entered into between the KERP Employees and the Buyer;

 

c)

the Seller’s liabilities and obligations under any of the Assumed Contacts, as applicable; and

 

d)

all liabilities arising or accruing from the use of the Purchased Assets from and after the Closing Date.

 

Agreement of Purchase and Sale

 

 

Each of the Buyer and CUI Global Inc. shall indemnify the Seller from any and all claims or liabilities relating to any Assumed Obligations, including, but not limited to, the KERP payments and the Royalty Payment (as defined below), incurred from and after the Closing Date. The Buyer shall reimburse the Seller through the Closing Adjustments or otherwise provided for herein, for (i) all Employee Liabilities payable or related to the Hired Employees and the Union Employees for the period of March 1, 2015 to the Closing Date; and (ii) all liabilities and obligations arising or accruing from the use of the Purchased Assets in the ordinary course of business, other than liabilities arising from an accident or negligence, for the period of March 1, 2015 to the Closing Date.

 

2.4

Excluded Liabilities

 

Other than the Assumed Obligations, and the Assumed Contracts as described herein and set forth in Schedule “1” hereto, the Buyer shall not assume and shall not be liable for any other liabilities or obligations of any nature which are related in any way to the Seller (collectively, the “Excluded Liabilities”). For greater certainty, the Excluded Liabilities shall include, but not be limited to, the following:

 

a)

Except as otherwise agreed in this Agreement, all taxes payable by the Seller referable to the period up to the Closing Date, including present and future federal and provincial income taxes, municipal business taxes, realty taxes and school taxes; and

 

b)

all Employee Liabilities with respect to any former or current Employees as of the Closing Date; provided that the Buyer shall reimburse the Seller for all Employee Liabilities with respect to the Hired Employees and the Union Employees arising from and after March 1, 2015 to the Closing Date; unless such Employee Liabilities are paid directly by the Buyer.

 

2.5

“As is, Where is”

 

The Buyer acknowledges that the Seller is selling the Purchased Assets on an “as is, where is” basis as they exist on the Closing Date, and that as of the Closing Date, the Seller will have no further liability to the Buyer, other than those specifically set forth herein. The Buyer further acknowledges that it has entered into this Agreement on the basis that the Seller does not guarantee title to the Purchased Assets and that the Buyer has conducted such inspections of the condition of and title to the Purchased Assets that it deemed appropriate, and has satisfied itself with regard to these matters. No representation, warranty or condition is expressed or can be implied as to title, encumbrances, description, fitness for purpose, merchantability, condition, quantity or quality, assignability or in respect of any other matter or thing concerning the Purchased Assets or the right of the Seller to sell or assign them, save as expressly represented or warranted in this Agreement. Without limiting the generality of the foregoing, any and all conditions, warranties or representations expressed or implied pursuant to the Sale of Goods Act (Ontario) or similar legislation do not apply to this transaction of purchase and sale and have been waived by the Buyer. The description of the Purchased Assets contained in the Schedules hereto is for purposes of identification only. No representation, warranty or condition has or will be given by the Seller concerning the completeness or accuracy of those descriptions.

 

Agreement of Purchase and Sale

 

 

2.6

Payment of the Purchase Price

 

The Buyer shall pay the Purchase Price to the Proposal Trustee as follows:

 

2.6.1

the sum of $550,000.00, representing 10% of the Purchase Price, the receipt of which the Proposal Trustee acknowledges, will be paid by the Buyer upon execution of this Agreement as a deposit (the “Deposit”) to be held by the Proposal Trustee in trust until the Closing and will be credited toward the Purchase Price upon Closing; and

 

2.6.2

the balance of the Purchase Price, after crediting the Deposit, will be paid as set forth in the CUI Proposal and as follows:

 

2.6.2.1

the sum of $3,450,000.00, to be paid to the Proposal Trustee upon Closing. Such amount shall be subject to the Closing Adjustments. For the purposes of Closing, the Inventory adjustment shall be based upon the book value of the Inventory as at February 28, 2015, compared to the book value as at November 30, 2014, based solely on the Inventory Valuation Methodology. Any amounts to be added to or deducted from the Purchase Price in respect of any Closing Adjustments, as the case may be, shall be added to or deducted from the Escrow Amount, as the case may be. In the event that (i) any amounts are to be added to the Escrow Amount in respect of the Closing Adjustments, such amounts shall be included and/or form part of the first Escrow Payment; and (ii) any amounts are to be deducted from the Escrow Amount in respect of the Closing Adjustments, such amounts shall be deducted from the last Escrow Payment and, to the extent that such Escrow Payment is insufficient, from the second last Escrow Payment and so forth;

 

2.6.2.2

the sum of $1,200,000 (the “Escrow Amount”), to be paid to the Seller’s Solicitors (the “Escrow Agent”), which funds shall be placed into an interest bearing escrow account. The Escrow Amount shall be paid by the Escrow Agent to the Proposal Trustee in twelve (12) monthly installments of $100,000 on the last day of each month, commencing on March 31, 2015, until such time as the Escrow Amount is indefeasibly paid in full (the “Escrow Payments” and each, an “Escrow Payment”); and

 

2.6.2.3

a royalty rate payment equal to two percent (2%) of the gross sales over a period of three (3) years from the Closing Date, to be measured annually, related to specific customers of the Seller set forth in Schedule “10” hereto. Up to an amount of $300,000 (the “Royalty Payment”) shall be paid by the Buyer to the Proposal Trustee within 90 days of each calendar year end, and shall be accompanied by a letter from the Buyer’s auditor confirming the gross sales relating to the Royalty Payment for the applicable year end.

 

Agreement of Purchase and Sale

 

 

The Proposal Trustee agrees to cause the Deposit to be placed into an interest bearing account or certificate of deposit, with all interest earned or accrued to be paid or credited to the Buyer at the Time of Closing, unless the Buyer forfeits the Deposit as provided below, in which event the interest will be paid to the Seller. Unless otherwise agreed, all amounts payable to the Proposal Trustee either by way of Deposit or at the Time of Closing will be paid to the Proposal Trustee by cheque certified by, or bank draft of, a major Canadian bank listed in Schedule I to the Bank Act (Canada) or by wire transfer in accordance with wire transfer instructions provided in writing by the Proposal Trustee to the Buyer. The Buyer acknowledges and agrees that the Deposit is non-refundable except as provided under Section 6.8.

 

2.7

Allocation of Purchase Price

 

The Purchase Price will be allocated among the Purchased Assets in accordance with Schedule “6” hereto. The Parties agree to report the sale and purchase of the Purchased Assets for all federal, provincial and local tax purposes in a manner consistent with such allocation.

 

2.8

Taxes

 

2.8.1

The Buyer will pay upon Closing, in addition to the Purchase Price, all applicable federal and provincial taxes eligible in connection with the purchase and sale of the Purchased Assets, including, without limitation, HST and any other provincial sales tax, and shall provide the Seller with proof of payment of such taxes. Alternatively, where applicable, the Buyer will have the option to furnish the Seller with appropriate exemption certificates.

 

2.8.2

Alternatively, if applicable, the Buyer and the Seller shall jointly make the election provided for under subsection 167(1.1) of the ETA such that no HST will be payable in respect of the Transaction. The Buyer and the Seller shall jointly complete the election form in respect of such election and the Buyer hereby irrevocably appoints the Seller (or its authorized representatives) as its agent to file the said election form no later than the due date for the Buyer’s HST returns for the first reporting period in which HST, as applicable, would, in the absence of such election, become payable in connection with the Transaction contemplated herein.

 

2.8.3

The Buyer agrees to indemnify and save the Seller harmless from and against all claims and demands for payment of all applicable taxes in connection with this Agreement and the Transaction, including penalties and interest and any liability or costs incurred as a result of any failure to pay those taxes when due.

 

Agreement of Purchase and Sale

 

 

Article 3

EMPLOYEE MATTERS

 

3.1

Offers to Employees

 

No later than two (2) Business Days prior to the Closing Date, the Buyer shall offer employment, on terms and conditions which are substantially similar in the aggregate to the current terms provided, commencing on the Closing Date (or such later date on which those Employees who are on leave return to active service) to those Employees that the Buyer, in its sole discretion, desires to hire. The Employees who accept the Buyer’s offer of employment are collectively referred to herein as the “Hired Employees”. For greater certainty, the Buyer shall not be obligated to offer employment to any Employee.

 

3.2

Employee Remuneration, Benefits and Deductions

 

The Buyer shall be liable for the payment for all legal obligations relating to the employment on and after the Closing Date and all Hired Employees and, for greater certainty, all Union Employees (other than accrued vacation and unpaid payroll accruing up to February 28, 2015 and subject to the Closing Adjustments). The Buyer shall not be responsible for any wages, statutory deductions, vacation pay, remittances, assessments, bonuses, notice of termination, termination pay, severance pay, sick leave or other remuneration, benefits or deductions in respect of the Employees prior to March 1, 2015. Except as required by statute or common law, the Buyer shall have no obligation to recognize the service of Hired Employees pursuant to Section 3.1 herein. All items in respect of the Hired Employees and Union Employees, including Employee Liabilities, which are payable to, receivable by or accrued in favour of the Hired Employees and the Union Employees up to and including the Closing Date, even if not then due, shall be the responsibility of the Seller; provided that the Buyer shall reimburse the Seller for such items in accordance with the Closing Adjustments.

 

3.3

Union Employees

 

The provisions of this Article 3 insofar as they relate to Union Employees shall be subject and subordinate to the provisions of the CBA and the Buyer shall be bound as a successor employer to such CBA to the extent required by statute or common law and the terms of this Agreement.

 

Article 4

REPRESENTATIONS AND WARRANTIES

 

4.1

Buyer’s Representations and Warranties

 

The Buyer represents and warrants to the Seller and the Proposal Trustee that:

 

4.1.1

the Buyer is a corporation duly incorporated, organized and subsisting under the laws of the Province of Nova Scotia;

 

Agreement of Purchase and Sale

 

 

4.1.2

the Buyer has all necessary corporate power, authority and capacity to enter into this Agreement and to perform its obligations and the execution and delivery of this Agreement and the consummation of the Transaction have been duly authorized by all necessary corporate action on the part of the Buyer;

 

4.1.3

the Buyer is not a party to, bound or affected by or subject to any indenture, agreement, instrument, charter or by-law provision, order, judgment or decree which would be violated, contravened or breached by the execution and delivery by it of this Agreement or the performance by it of any of the terms contained in this Agreement;

 

4.1.4

to the best of the Buyer’s knowledge, no actions or proceedings are pending or have been threatened to restrain or prohibit the completion of the Transaction;

 

4.1.5

this Agreement and each of the other documents contemplated under this Agreement to which the Buyer is or will be a Party have been or will be, as at the Time of Closing, duly and validly executed and delivered by the Buyer and constitutes or will, as at the Time of Closing, constitute legal, valid and binding obligations of the Buyer, as the case may be, enforceable in accordance with their terms;

 

4.1.6

the Buyer is not a non-Canadian person as defined in the Investment Canada Act; and

 

4.1.7

the Buyer is or will be registered under Part IX of the Excise Tax Act (Canada) on or before the Time of Closing.

 

4.2

Seller’s Representations and Warranties

 

The Seller represents and warrants to the Buyer that:

 

4.2.1

the Seller has the right to enter into this Agreement and complete the Transaction;

 

4.2.2

the Seller is not a non-resident of Canada within the meaning of that term as used in the Income Tax Act (Canada);

 

4.2.3

the Seller has done no act to encumber the Purchased Assets since the filing of the NOI;

 

4.2.4

the Seller has not previously sold the Purchased Assets; and

 

4.2.5

to the best of the Seller’s knowledge, no actions or proceedings are pending and none have been threatened to restrain or prohibit the completion of the Transaction.

 

Agreement of Purchase and Sale

 

 

Article 5

CONDITIONS

 

5.1

Conditions in favour of the Buyer

 

The obligation of the Buyer to complete the Transaction is subject and conditional to the satisfaction of the following conditions on or prior to the Time of Closing:

 

5.1.1

all representations and warranties of the Seller contained in this Agreement will be true as of the Closing Date with the same effect as though made on and as of that date;

 

5.1.2

no action or proceedings will be pending or threatened to restrain or prohibit the completion of the Transaction contemplated by this Agreement;

 

5.1.3

the Buyer obtaining confirmation in writing, in a form satisfactory to the Buyer, from 454675 Ontario Limited (the “Landlord”) that all maintenance and upkeep relating to the Premises, as well as all taxes and other fees due and payable under the lease dated February 1, 1987 (the “Lease”) are current;

  

5.1.4

the Buyer obtaining confirmation in writing from the Landlord that the Buyer and the Landlord have entered into a new lease arrangement (the “CUI Lease”) in connection with the Premises effective as at the Closing Date in form satisfactory to the Buyer and the Landlord, which CUI Lease shall be a triple net lease at market rate and on market terms, as determined by an independent consultant, and guaranteed by CUI Global Inc.;

 

5.1.5

the Seller will have performed each of its obligations set out under this Agreement and the CUI Proposal to the extent required to be performed on or before the Closing Date; and

 

5.1.6

no material loss or damage to the Purchased Assets will have occurred on or before the Closing Date.

 

The foregoing conditions are for the exclusive benefit of the Buyer. Any condition may be waived by the Buyer in whole or in part. Any such waiver will be binding on the Buyer only if made in writing.

 

5.2

Conditions in favour of the Seller

 

The obligation of the Seller to complete the Transaction is subject and conditional to the satisfaction of the following conditions on or prior to the Time of Closing:

 

5.2.1

all representations and warranties of the Buyer contained in this Agreement will be true as of the Closing Date with the same effect as though made on and as of that date;

 

Agreement of Purchase and Sale

 

 

5.2.2

no action or proceedings will be pending or threatened to restrain or prohibit the completion of the Transaction contemplated by this Agreement;

 

5.2.3

the Buyer will have performed each of its obligations set out under this Agreement and the CUI Proposal to the extent required to be performed on or before the Closing Date;

 

5.2.4

the Seller obtaining confirmation in writing from the Landlord, in a form satisfactory to the Seller, confirming that the Buyer and the Landlord have entered into the CUI Lease; and

 

5.2.5

no material loss or damage to the Purchased Assets will have occurred on or before the Closing Date.

 

The foregoing conditions are for the exclusive benefit of the Seller. Any condition may be waived by the Seller in whole or in part. Any such waiver will be binding on the Seller only if made in writing.

 

5.3

Conditions—Approval and Vesting Order

 

The obligations of the Seller and the Buyer to complete the Transaction are subject to the following conditions being fulfilled or performed at or prior to the Time of Closing:

 

5.3.1

an order will have been made by the Court on or before March 3, 2015 approving this Agreement and the Transaction and vesting in the Buyer all the right, title and interest of the Seller in the Purchased Assets free and clear of all liens, security interests and other encumbrances, that order to be substantially in the form of the order attached as Exhibit A hereto (the “Approval and Vesting Order”); and

 

5.3.2

the Approval and Vesting Order will not have been stayed, varied or vacated and no order will have been issued and no action or proceeding will be pending to restrain or prohibit the completion of the Transaction.

 

The Parties hereto acknowledge that the foregoing conditions are for the mutual benefit of the Seller and the Buyer.

 

5.4

Non-Satisfaction of Conditions

 

If any condition set out in this Article is not satisfied or performed prior to the time specified therefor, a Party for whose benefit the condition is inserted may in writing:

 

5.4.1

waive compliance with the condition in whole or in part in its sole discretion by written notice to the other Party and without prejudice to any of its rights of termination in the event of non-fulfilment of any other condition in whole or in part; or

 

5.4.2

elect on written notice to the other Party to terminate this Agreement before Closing.

 

Agreement of Purchase and Sale

 

 

Article 6

CLOSING

 

6.1

Closing

 

The completion of the Transaction will take place at the offices in Toronto, Ontario of Borden Ladner Gervais LLP, on the Closing Date at the Time of Closing or as otherwise determined by mutual agreement of the Parties in writing.

 

6.2

Buyer’s Deliveries on Closing

 

At or before the Time of Closing, the Buyer will execute and/or deliver to the Seller and the Proposal Trustee the following, each of which will be in form and substance satisfactory to the Seller and the Proposal Trustee, acting reasonably:

 

6.2.1

payment of the balance of the Purchase Price as contemplated in Section 2.6.2;

 

6.2.2

a bill of sale substantially in the form of Exhibit B attached hereto in connection with the Purchased Assets;

 

6.2.3

a bring down certificate dated the Closing Date, confirming that all of the representations and warranties of the Buyer contained in this Agreement are true as of the Closing Date, with the same effect as though made on and as of the Closing Date;

 

6.2.4

an acknowledgment dated the Closing Date, confirming that each of the conditions precedent in Section 5.1 of this Agreement and the CUI Proposal have been fulfilled, performed or waived as of the Closing Date;

 

6.2.5

if necessary, payment or evidence of payment of applicable taxes or, if applicable, appropriate tax exemption certificates in accordance with Section 2.8;

 

6.2.6

if necessary, an assignment and assumption agreement as contemplated by Sections 2.2 and 1.1.6; and

 

6.2.7

any other documentation as is referred in this Agreement or as the Seller or the Proposal Trustee may reasonably require to give effect to this Agreement or required by Applicable Law or any Governmental Authority.

 

6.3

Seller’s Deliveries on Closing

 

At or before the Time of Closing, the Seller will execute and deliver to the Buyer the following, each of which will be in form and substance satisfactory to the Buyer, acting reasonably:

 

Agreement of Purchase and Sale

 

 

6.3.1

a bill of sale substantially in the form of Exhibit B attached hereto in connection with the Purchased Assets;

 

6.3.2

a bring down certificate dated the Closing Date confirming that all of the representations and warranties of the Seller contained in this Agreement are true as of the Closing Date, with the same effect as though made on and as of the Closing Date;

 

6.3.3

an acknowledgment dated the Closing Date confirming that each of the conditions precedent in Section 5.2 of this Agreement and the CUI Proposal have been fulfilled, performed or waived as of the Closing Date;

 

6.3.4

a copy of the issued and entered Approval and Vesting Order and the vesting certificate; and

 

6.3.5

any other documentation as is referred in this Agreement or as the Buyer may reasonably require to give effect to this Agreement.

 

6.4

Buyer’s Acknowledgment

 

The Buyer acknowledges that the Seller is selling its rights, benefits and interests in and to the Purchased Assets as authorized by the Approval and Vesting Order. The Buyer agrees to purchase and accept the rights, benefits and interests of the Seller in and to the Purchased Assets pursuant to and in accordance with the terms of this Agreement, the bill of sale and the Approval and Vesting Order.

 

6.5

Possession of Purchased Assets

 

The Seller shall remain in possession of the Purchased Assets until the Time of Closing. On Closing, the Buyer will take possession of the Purchased Assets where situate at the Time of Closing. The Buyer acknowledges that the Seller has no obligation to deliver physical possession of the Purchased Assets to the Buyer. In no event will the Purchased Assets be sold, assigned, transferred or set over to the Buyer until the Buyer has satisfied all delivery requirements outlined in Section 6.2.

 

6.6

Access to and Removal of Purchased Assets

 

6.6.1

The Buyer may have reasonable access to the Purchased Assets located at the Premises during normal business hours prior to the Time of Closing for the purpose of enabling the Buyer to conduct any inspections of the Purchased Assets as it deems appropriate. Those inspections will only be conducted in the presence of a representative of the Seller or the Proposal Trustee if so required at the discretion of the Seller.

 

Agreement of Purchase and Sale

 

 

6.6.2

Each of the Buyer and CUI Global Inc. agrees to indemnify and save the Seller and the Proposal Trustee harmless from and against all claims, demands, losses, damages, actions and costs incurred or arising from or in any way directly related to the inspection of the Purchased Assets or the attendance of the Buyer, their respective employees, contractors or agents.

 

6.7

Risk

 

The Purchased Assets will be and remain at the risk of the Seller until Closing and at the risk of the Buyer from and after Closing. If, prior to Closing, the Purchased Assets are substantially damaged or destroyed by fire or other casualty, then, at its option, the Buyer may decline to complete the Transaction. This option will be exercised by way of written notification, in accordance with Section 8.6, within ten (10) days after notification to the Buyer by the Seller and the Proposal Trustee of the occurrence of damage or destruction (or prior to the Closing Date if such occurrence takes place within fifteen (15) days of the Closing Date) in which event this Agreement will be terminated automatically and the Buyer will be entitled only to a return of the Deposit paid under Section 2.6.1 but without any other compensation. If the Buyer does not exercise this option, it will complete the Transaction and will be entitled to an assignment of the proceeds of insurance referable to such damage or destruction. Where any damage or destruction is not substantial, as determined by the Seller in its sole opinion, acting reasonably, the Buyer will complete the Transaction and will be entitled to an assignment of the proceeds of insurance referable to such damage or destruction provided that such damage or destruction is insured or, otherwise, to an agreed abatement.

 

6.8

Termination

 

If either the Seller or the Buyer validly terminates this Agreement under the provisions of Sections 5.4 or 6.7:

 

6.8.1

all the obligations of both the Seller and Buyer under this Agreement will be at an end;

 

6.8.2

the Buyer shall be entitled to have the Deposit and all the monies paid hereunder to the Proposal Trustee returned; and

 

6.8.3

neither Party will have any right to specific performance or other remedy against, or any right to recover damages or expenses from, the other.

 

For certainty, in the event that the Seller or the Buyer terminates this Agreement under Section 5.4, the Buyer will not be entitled to have the Deposit returned and the Deposit and any interest thereon will be forfeited to the Seller, unless that termination results from the failure to satisfy the conditions under Sections 5.1 or 5.3.

 

Agreement of Purchase and Sale

 

 

6.9

Breach by Buyer

 

If the Buyer fails to comply with the terms of this Agreement, the Seller may by notice to the Buyer elect to treat this Agreement as having been repudiated by the Buyer. In that event, the Deposit and any other payments made by the Buyer will be forfeited to the Seller on account of its liquidated damages, and the Purchased Assets may be resold by the Seller. In addition, the Buyer will pay to the Seller, on demand, the deficiency, if any, arising upon such resale (after deducting the Deposit, the Interest on the Deposit and the expenses of resale) together with interest and all other damages or charges occasioned by or resulting from the default by the Buyer.

 

Article 7

POST-CLOSING MATTERS

 

7.1

Reimbursement of Prepaid Expenses, Tax Refunds and Accounts Receivable

 

7.1.1

After the Time of Closing, if the Buyer receives any payments or amounts in respect of Accounts Receivable, Tax Refunds, Prepaid Expenses or accounts or monetary obligations owing to the Seller or a related party to the Seller, including any security for payments and all related agreements (whether or not such amounts are included in one of the attached Schedules hereto), arising prior to March 1, 2015, such payments and amounts shall be deemed to be held in trust on behalf of the Seller or related party to the Seller, as the case may be, and shall not form part of the Purchased Assets, and the Buyer shall immediately, or in any event no later than five (5) Business Days from receipt of such payments or amounts, endorse such payments or amounts to the Proposal Trustee.

 

7.1.2

After the Closing Date, the Buyer agrees to use all commercially reasonable efforts to collect, without remuneration or compensation, on behalf of the Seller or related party to the Seller any and all Accounts Receivable, and shall carry on the Business in the ordinary course for a period of at least twelve (12) months beginning after the Closing Date (the “Collection Period”). For greater certainty, the Buyer agrees that it will not take any actions or otherwise regarding the operations of the Business that would disrupt ordinary operations or negatively impact the ability of the Buyer to recover any amounts owing in respect of the Accounts Receivable, Tax Refunds, Prepaid Expenses or accounts or monetary obligations owing to the Seller or a related party to the Seller on behalf of the Seller. The Buyer shall not compromise any Accounts Receivable or Prepaid Expenses without the written consent of the Seller or the Proposal Trustee.

 

Agreement of Purchase and Sale

 

 

7.1.3

The Buyer agrees that any payments received by the Buyer from customers from and after the Closing Date shall be applied first to satisfy and retire the Accounts Receivable. For greater certainty, until such time as the Accounts Receivable are paid in full, any and all payments received after the Closing Date by the Buyer from a customer shall be applied first to pay down the Account Receivable regardless of any agreement or arrangement as between the Buyer and the customer that would provide otherwise. The only exception to this provision is under circumstances wherein the customer has a commercially reasonable defense to payment of the Account Receivable(s). In that event, the Buyer agrees to consult with the Seller in order to determine the best course of action prior to taking any steps with respect to such Account Receivable(s), and the Seller shall be free to take whatever step are necessary to enforce such Account Receivable(s); provided that the Buyer, having consulted with the Seller, shall have no obligation to apply any further payments from said customer to the disputed amount unless and until such dispute is resolved.

 

7.1.4

After the Closing Date, the Buyer agrees to use all commercially reasonable efforts to utilize the benefit of any and all Prepaid Expenses relating to any and all goods ordered or shipped prior to March 1, 2015, and shall reimburse the Seller or a related party to the Seller, as applicable, by remitting payment to the Proposal Trustee in an amount equal to any such Prepaid Expenses within two (2) Business Days from the date the Buyer receives the benefit of such Prepaid Expenses; regardless of any arrangement or agreement as between the Buyer and the recipient and/or holder of such Prepaid Expenses.

 

7.1.5

After the Closing Date, the Buyer shall use all commercially reasonable efforts to provide to the Seller or the Proposal Trustee a statement, including copies of cheques, paper records, and other accompanying documents received from the account debtor or Governmental Authority, on a monthly basis, for a period of twelve (12) months beginning 30 days after the Closing Date, setting out any Accounts Receivable, Prepaid Expenses and Tax Refunds arising prior to March 1, 2015 that were collected or utilized, as the case may be, during each month for receipt by the Proposal Trustee no

 

later than the 15^th day of each month end, net of any deductions agreed to by the Parties in writing.

 

7.1.6

The Buyer agrees to use all commercially reasonable efforts to support and assist the Seller and/or any related party to the Seller, as necessary, with any of its post-Closing filings and/or audits related to or required by any Governmental Authority, including, but not limited to, making available to the Seller and/or any related party to the Seller, as the case may be, the requisite accounting records (whether in paper record form or otherwise) and Hired Employees to facilitate such efforts.

 

7.1.7

The Parties acknowledge that the Accounts Receivable have not been and are not being assigned to the Buyer, but the Buyer is acting as agent for the Seller in the collection of the Accounts Receivable.

 

Agreement of Purchase and Sale

 

 

7.1.8

In the event that the Buyer fails or refuses to collect or remit, as the case may be, any Accounts Receivable, Tax Refunds, Prepaid Expenses or accounts or monetary obligations owing to the Seller in accordance with the terms herein, and such accounts are 60 days overdue or more, the Buyer agrees that the Seller and/or the Proposal Trustee shall be permitted to pursue such account debts on their own accord, and shall be entitled to collect such Accounts Receivable in the name of “Tectrol Inc.” until such time as the Accounts Receivable have been paid in full or otherwise agreed to in writing by the Seller.

 

7.2

Books and Records

 

The Buyer shall preserve and keep the Books and Records, including, but not limited to, any books and records relating to any affiliate, associate or related corporation to Seller, which relate to the Purchased Assets, the Excluded Assets or otherwise for a period of seven (7) years from the Closing Date or for any longer period as may be required by any applicable law or Governmental Authority; unless the Parties otherwise mutually agree in writing to purge or destroy any of the Books and Records or Confidential Information. Upon reasonable advance notice, after the Closing Date, the Buyer will grant the Seller and the Proposal Trustee, if necessary, and, in the event the Seller is adjudged bankrupt, any trustee of the estate of the Seller, reasonable access during normal business hours, and licence free of charge, to use the books, records and documentation included in the Purchased Assets up to the Closing Date, including, without limitation, any employment records, paper records, accounting records of the Business, the Hired Employees and the Union Employees relating to the period up to the Closing Date and any Employees engaged by the Seller at or in respect of the Purchased Assets up to and including the Closing Date, and computer systems, tapes, disks, records, paper records and software (including the SAP and accounting software programs) acquired as part of the Purchased Assets.

 

The Buyer agrees to notify the Seller and/or its representatives upon the discovery of any books and records, paper records, electronic records, financial and accounting information and records, personnel records, tax records or otherwise relating to any Person that is not the Seller, and to treat such information as Confidential Information. Upon a written request from the Seller, the Buyer agrees to provide any and all originals or copies of such information, as applicable, within two (2) Business Days of receipt by the Buyer of such request.

 

7.3

Hired Employees

 

Following the Time of Closing, the Buyer shall make available to the Seller and/or the Proposal Trustee, on a reasonable basis and during normal business hours, the Hired Employees as may be reasonably requested by the Seller or the Proposal Trustee from time to time as is needed to administer their respective duties in the Seller’s proceedings under the BIA provided that the provision of the Hired Employees as aforesaid does not cause unreasonable disruption to the Business operations of the Buyer.

 

The Buyer also agrees that it shall assist the Seller by designating or directing certain Hired Employees, as required, to assist with the collection, compiling and processing of the Accounts Receivable and Tax Refunds during the pendency of the Collection Period.

 

Agreement of Purchase and Sale

 

 

7.4

Seller’s Name

 

Forthwith following Closing of the Transaction, the Seller shall discontinue use of the name “Tectrol Inc.”, except where legally required to identify the Seller until its name has been changed to another name or as contemplated in Subsection 7.1.8 herein. The Seller shall as soon as practical change the corporate name of the Seller to the numbered company name of the corporation comprising the Seller.

 

Article 8

GENERAL

 

8.1

Paramountcy

 

In the event of any conflict or inconsistency between the provisions of this Agreement, and any other agreement, document or instrument executed or delivered by the Seller in connection with this Transaction or this Agreement, the provisions of this Agreement will prevail to the extent of that conflict or inconsistency.

 

8.2

Commission

 

The Buyer acknowledges that there are no agent or broker fees or other commissions payable by the Seller on the Purchase Price or otherwise in connection with the Transaction, and the Buyer agrees to indemnify the Seller against any claim for compensation or commission by any third party or agent retained by the Buyer in connection with, or in contemplation of, the Transaction.

 

8.3

Confidentiality

 

All information exchanged between the Seller and the Buyer in connection with the Transaction will be considered Confidential Information. For certainty, the Confidentiality Agreement will continue to be in effect until Closing, except for such Confidential Information or other information relating to the Transaction that is required to be disclosed to obtain the Approval and Vesting Order. Any publicity relating to the Transaction and the manner of releasing any information regarding the Transaction will be mutually agreed upon by the Seller and the Buyer, both Parties acting reasonably.

 

8.4

Costs and Expenses

 

Except as otherwise specified in this Agreement, all costs and expenses (including the fees and disbursements of accountants, legal counsel and other professional advisers) incurred in connection with this Agreement and the completion of the Transaction are to be paid by the Party incurring those costs and expenses.

 

Agreement of Purchase and Sale

 

 

8.5

Time of Essence

 

Time is of the essence in all respects of this Agreement.

 

8.6

Notices

 

Any Communication must be in writing and either:

 

8.6.1

personally delivered;

 

8.6.2

sent by prepaid registered mail; or

 

8.6.3

sent by facsimile, email or functionally equivalent electronic means of communication, charges (if any) prepaid.

 

Any Communication must be sent to the intended recipient at its address as follows:

 

to the Seller at:

 

Tectrol Inc.

550 Eglinton Ave. W. P.O. Box 23030

Toronto, Ontario

M5N 1B0

 

Attention:

Richard Gelb

Email:

Tectrol.richardgelb@gmail.com

 

with a copy to:

 

Borden Ladner Gervais LLP

Scotia Plaza Tower

40 King St. W, 44^th Floor

Toronto, Ontario

M5H 3Y4

 

Attention:

Edmond Lamek Email:

elamek@blg.com

 

to the Buyer at:

 

CUI-Canada, Inc. c/o CUI, Inc.

20050 SW 112^th Avenue

Tualatin, Oregon 97062

USA

 

Agreement of Purchase and Sale

 

 

Attention:

Matt McKenzie Email:

mmckenzie@cui.com

 

And to:

 

CUI Global Inc.

20050 SW 112^th Avenue

Tualatin, Oregon 97062

USA

 

 

Attention:

William J. Clough, Esq Email:

wclough@cuiglobal.com

 

with copy to:

 

Aird & Berlis LLP

Brookfield Place

181 Bay Street

Toronto ON M5J 2T9

Canada

 

Attention:

Harry Fogul

Email:

hfogul@airdberlis.com

 

to the Proposal Trustee at:

 

Duff & Phelps Canada Restructuring Inc.

333 Bay Street, 14^th Floor

Toronto, Ontario

 M5H 2R2

 

Attention:

Mitch Vininsky

Email:

mitch.vininsky@duffandphelps.com

 

or at any other address that any Party may from time to time advise the other by Communication given in accordance with this Section 8.6. Any Communication delivered to the Party to whom it is addressed will be deemed to have been given and received on the day it is delivered at that Party’s address, provided that if that day is not a Business Day then the Communication will be deemed to have been given and received on the next Business Day. Any Communication transmitted by facsimile, PDF or other form of electronic communication will be deemed to have been given and received on the day on which it was transmitted (but if the Communication is transmitted on a day which is not a Business Day or after 3:00 p.m. (local time in the City of Toronto, Province of Ontario), the Communication will be deemed to have been received on the next Business Day). Any Communication given by registered mail will be deemed to have been received on the fifth (5^th) Business Day after which it is so mailed. If a strike or lockout of postal employees is then in effect, or generally known to be impending, every Communication must be effected by personal delivery or by facsimile transmission, PDF or other form of electronic communication.

 

Agreement of Purchase and Sale

 

 

8.7

Further Assurances

 

Each Party will, at the requesting Party’s cost, execute and deliver all further agreements and documents and provide all further assurances as may be reasonably required by the other Party to give effect to this Agreement and, without limiting the generality of the foregoing, will do or cause to be done all acts and things, execute and deliver or cause to be executed and delivered all agreements and documents and provide all assurances, undertakings and information as may be required from time to time by all regulatory or governmental bodies.

 

8.8

Amendment and Waiver

 

No supplement, modification, amendment, waiver, discharge or termination of this Agreement is binding unless it is executed in writing by the Party to be bound. No waiver of, failure to exercise or delay in exercising, any provision of this Agreement constitutes a waiver of any other provision (whether or not similar) nor does such waiver constitute a continuing waiver unless otherwise expressly provided.

 

8.9

Submission to Jurisdiction

 

Without prejudice to the ability of any Party to enforce this Agreement in any other proper jurisdiction, each of the Parties irrevocably submits and attorns to the non-exclusive jurisdiction of the courts of the Province of Ontario to determine all issues, whether at law or in equity arising from this Agreement. To the extent permitted by applicable law, each of the Parties irrevocably waives any objection (including any claim of inconvenient forum) that it may now or hereafter have to the venue of any legal proceeding arising out of or relating to this Agreement in the courts of that Province or that the subject matter of this Agreement may not be enforced in the courts and irrevocably agrees not to seek, and waives any right to, judicial review by any court which may be called upon to enforce the judgment of the courts referred to in this Section 8.9, of the substantive merits of any such suit, action or proceeding. To the extent a Party has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, that Party irrevocably waives that immunity in respect of its obligations under this Agreement.

 

Agreement of Purchase and Sale

 

 

8.10

Assignment and Enurement

 

Neither this Agreement nor any right or obligation under this Agreement may be assigned by either Party without the prior consent of the other Party. This Agreement enures to the benefit of and is binding upon the Parties and their respective successors and permitted assigns.

 

8.11

Severability

 

Each provision of this Agreement is distinct and severable. If any provision of this Agreement, in whole or in part, is or becomes illegal, invalid or unenforceable in any jurisdiction by a court of competent jurisdiction, the illegality, invalidity or unenforceability of that provision will not affect: the legality, validity or enforceability of the remaining provisions of this Agreement; or the legality, validity or enforceability of that provision in any other jurisdiction.

 

8.12

Counterparts

 

This Agreement may be executed and delivered by the Parties in one or more counterparts, each of which will be an original, and each of which may be delivered by facsimile, e-mail or other functionally equivalent electronic means of transmission, and those counterparts will together constitute one and the same instrument.

 

[SIGNATURE PAGES FOLLOW]

 

Each of the Parties has executed and delivered this Agreement, as of the date noted at the beginning of the Agreement.

 

	TECTROL INC.
	Per
		Name: Richard Gelb
		Title: President
	CUI-CANADA, INC.
	Per
		Name: William J. Clough Title:
		CEO

 

Agreement of Purchase and Sale

 

 

CUI GLOBAL INC. hereby acknowledges and accepts the foregoing terms and conditions as set out in this Agreement the at this 23^rd day of February, 2015.

 

	CUI GLOBAL INC.
	Per
		Name: William J. Clough
		Title:  President & CEO

 

Agreement of Purchase and Sale

 

 

SCHEDULE 1

 

ASSUMED CONTRACTS [SECTION 1.1.6]

 

Schedule 1

Assumed Contracts

Customers

 

Customer	Agreement
	Power Supply Assembly Purchased Agreement, Effective
22Cisco Systems International B.V.
	Oct-2009
Enterasys Networks, Inc.	Independent Contractor Agreement, 11th April 2005
(Extreme Networks)
Harmonic Inc.	Supply Agreement, 6th June 2008
Lucent Technologies Inc.	OEM Purchase Agreement, Effective 1st October 2004
(Alcatel-Lucent)
Nautel Limited	Sales Agreement, Effective 5th December 2011
Nautel Limited	Indemnity Agreement, 27th June 2014
Philips and Neusoft Medical Systems Co. Ltd.	Purchase Contract,  May 22nd 2012
Pitney Bowes	Memorandum of Understanding, Effective January 9, 2002
Pyxis Corporation	Long Term Corporate Agreement, Effective March 2, 1999
(Pyxis to Cardinal Health, Effective 1/20/03)
(Cardinal Health to CareFusion Corporation, Effective July 1, 2009)
	CareFusion Kanban Terms (Tectrol P/N 1326C), 30-August2010
	Long Term Corporate Services Agreement bew Tectrol Inc.
Sun Microsystems / MaxStrat	and MaxStrat Corporation,
	Effective 24th September 1998
	Amendment #1 to LTC Services Agreement betw Sun Microsystems, Inc. and Tectrol Inc., Effective April 18, 2000.
Zoll Medical Corporation	Zoll Medical / Tectrol Sales Agreement, Effective July 15, 2003

 

Agreement of Purchase and Sale

 

  

Schedule 1

Assumed Contracts

Suppliers

 

Supplier	Agreement
Avnet Electronics Marketing	Vendor Managed Inventory Agreement, last signed Nov. 8, 2005
Elytone Electronics Co. Ltd.	Safety Stock Program Agreement, Effective 28th Jan 2013
Fe-Tronic Manufacturing Co. Ltd.	Safety Stock Program Agreement, 1-Jan-2013
Future Electronics Inc.	Bonded Inventory Management Program - Memorandum of Understanding
MicroMex, Inc.	Product Manufacturing Agreement, 6th August 2012
Arrow Electronic Canada Ltd.	Business Requirement Detail, Feb 14, 2007 (unsigned)

  

 

SCHEDULE 2

 

EQUIPMENT [SECTION 1.1.23]

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
		SMT Line #1
1	1	Exerra Precision Printing Board Stencil Printer  Model EP-33, s/n 07G4-1068
2	1	Panasonic Model Panasert HDP3XL/2666 Glue Inserter, s/n 88D019688
3	1	Panasonic Model Panasert MV2FXL/2559MB  Pick & Palce Inserter, s/n 992X08561 c/w 150/300 Cartridge Loader (1999)
4	1	Crown Simplimatic Model 8010 Board Feeder,  Right to Left, s/n M016390
5	1	Pyramax BTU International Reflow Oven Model 100A, Right to Left, s/n TTOC-1C (2012)
6	1	Pneumatic Inserter, Palm Controller
7	315	Panasonic Cartridges Q-Type Inserter Feeders, 8MM-24MM Capacity
		SMT Line #2
8	1	Nutek Board Feeder Model NTM 220DSXL (2005)
9	1	Speedline MPM SP Exel Model AP/Excel Printer, s/n 10600 (2005)
10	1	Panasonic Glue Inserter Model HDP-V/NM-DAOSA, s/n 016D07709
11	3	Simplimatic 24" Transfer Conveyors
12	1	Panasonic Panasert Model MV2FXL/NM-2559NB, Pick & Place Inserter, s/n 89H00461 120 Cartridge Capacity (1989)
13	1	Panasonic Pick & Place Inserter Model IDBM133 NM-EJM7A - CM 602, s/n 72EV0055 160  Cartridge Capacity (2006)
14	1	Vitronics Model Unitherm SMR-800 Reflow Oven

 

Tectrol Inc. | August 2014

 

Agreement of Purchase and Sale

 

  

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
15	146	Hoover/Panasonic Feeder Cartridges 8MM-24MM Capacity
16	15	ASC International Cyber Optics Model LSM-LG Laser Microscope, s/n 10164
		Through Hole Line
17	1	Universal Sequencer Pick & Place Model Radial 88 Triple Span, s/n 48903189/10165316 c/w (60) Feeder Sequencor (2012) (2) Board Load & Unload s/n 48592707/1015276 & 48592707/10158730 (2011)
18	1	Universal Sequencer Pick & Place Model Raidal 5 2.5/5.0, s/n 6360D00428541624907, 40 Cartridge Sequencor (1995)
19	1	Universal LX Inserter, Dual Station, s/n 6295-27275-CDH1499
20	1	Universal X/4 Programmer Satellite Controller,  s/n 6893-27180-CME-1242
21	1	Sciencescope Model EM-BDT3, s/n S981369
22	2	Madell Model 8500 Heat Gun
23	2	Hako FM-202 Solder Station
24	1	Crown Simplimatic Board Feeder Loader Model 8130, s/n M015290
26	1	Panasonic Panasert AVK Inserter Model NM-2013, s/n 77A01368 (60) Cartridge Feeder 27
	20	Panasonic 4 Ribbon Capacity Feeders
28	1	Crown Simplimatic Model 8070 60" Board conveyor, s/n M01530
29	1	Panasonic Model Panasert RH Inserter, 62 Slot Capacity, s/n 2870100605
30	1	Contents of Stencil Racks, Aluminum Frames Work Boards, etc. c/w Storage Racks

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
31	4	Metal 2 Dual Storage Cabinet w/Contents
32	65	Aluminum 4 Wheel Tray Board Storage Racks
33	1	Universal Sequencer Model 2596R-21900-CESH-1376
34	1	Autosplile F-Pin Inserter, s/n 000275
35	1	Denison Multipress Press Y-21E, s/n 5917
36	1	Denison Multipress Press, s/n 895241
37	1	AMP Pneumatic Inserter Model #453973-3-AM s/n 26512
38	1	Zierick Electronic Connection Faston Inserter Model 7000 #007-070
39	1	AMP Pneumatic Inserter Model 817017-4-A, s/n 130863
40	1	AMP Pneumatic Inserter Model 806992-1-D,  s/n 130757
41	1	Pneumatic Press w/Palm Controls
42	Lot	Remaining Contents of Auto Insertion Area Tables, Chairs, Maintenance Equipment, etc.
		Warehouse Storage Parts Area
43	12	Sections Easy-Up Parts Shelving 10"w x 16' L
44	6	Cari-All 4 Wheel Chrome Board Tray Transfer Carts
45	21	Sections Easy Up Shelving 24" x 48" x 5 Shelf
46	53	Section Industrial Redi Pallet Racking 36" D x 9'W x 4 Shelf High c/w Mesh Decking
47	5	BT Hyd Pallet Trucks
48	1	BT Prime-Mover Side Loader Electric Forklift Model TRT-1000E  2000 lb Capacity, 216" Mast, 4534 Hrs, s/n 184151
49	165	Sections Easy-Up Shelving 18"W x 4' Long

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
50	1	Blue Giant Walk Behind Forklift Model P-150-25, 2200 lb, 150" Mast/Lift c/w Cargo Lift, s/n 9520143
51	1	Blue Giant Walk Behind Forklift Model P-150-20 , 2000 lb, 150" Mast/Lift c/w Cargo Lift,  s/n 932004
51A	10	Metal 4 Wheel Inventory Carts
52	1	Progar Manufacutring Caraboard Compactor
53	Lot	Remaining Contents in Warehouse Area, Ladders, Tooling, Misc Equipment, etc.
		Solder Area 54
	500	Green Tray Storage Bins
55	1000	Back Tray Storage Bins
56	270	4 Wheel Tray Storage Racks, 8 Shelf Capacity
57	1	AMP Terminating Machine Model K, s/n 117907
58	1	AMP Terminating Press Model 565-435-5, s/n 29430
59	1	Molex Terminal Press Model 638008300, s/n 1038 (2000)
60	1	Variable Speed Rolling Press, 5" Cap.
61	1	Hughes Model HRW-250B, 250W Second Weld Power Supply c/w Hughes Spot Welder
62	1	Unitek Model 1-133-02 Second Weld Power Supply c/w Hughes Spot Welder
63	2	Groman Model 920A Toroid Windewr c/w DRO
64	1	Schleuniger Model PF2000 Feeder Uncoiler, Schleuniger Model Eco-Strip 9300, s/n 2754-2084
65	1	Schleuniger Model UC-3750 Cut To Length s/n 134

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
66	1	Groman Simplex Bobbin Winder c/w DRO
67	1	General Pneumatics Air Dryer Model TKF325A-E6X #00BTKF011 (2000) c/w Storage Tank
68	1	Atlas Copco Air Dryer Model FD-80, s/n 950176
69	1	Atlas Copco Air Compressor Model GA-53, 75 HP, s/n AP1509680 (2006)
70	1	Atlas Copco Air Dryer Model GA37
71	1	Atlas Copco Air Dryer Model GA37 (1988), s/n ABP714866
72	1	Beko Water Separator
73	1	General Production Model CF-8 Component  Former, s/n 89411
74	1	General Production Model CF-10 Component Former, s/n N/A
75	1	General Production Model CF-9 Component Former, s/n 84010
76	1	General Production Model CF-9 Component Former, s/n 84010
77	2	Pneumatic Component Forming Presses
78	3	Pneumatic GDP Trim Formers Model TF-5150
79	3	Pneumatic Trim Formers
80	4	Pneumatic Up-Acting Rivet Inserter
81	3	Adams-Maxwell Model 1200-2C2 Winders w/Counting Head
82	26	Hako Solder Stations Model FM-202
83	13	Hios Model CLT-50 Power Supply Source

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
84	4	Electric Precision Drills
85	8	Nasco 1kg Capacity Tool Drops
86	16	Metal Work Stations
87	1	Gen Rad Precision LC Digi Bridge w/Controller
88	1	Gen Rad 1689M RLC Digi Bridge, s/n 1689-9750-01
89	1	Hiptronics Model HD100 Hipot Tester, s/n 859-059
90	3	Hustler Pneumatic Winders
91	2	A & A Metal Products 2 Drawer Flammable Storage Cabinets
92	1	Blakeslee Single Station Wash Unit
93	1	Stationary Hot Melt Solder Pot
94	1	Everett Charles SMT Superkit c/w Fairchild Inspection Station
95	3	Cab Model Hector 2 Trim Station
96	1	Cab Model Maestro 2M Board Cutter, s/n 471
97	1	CTI Systems Circuit Board Router, Single Head Fujinon CST Camera (2011)
98	3	Hakko Solder Stations Model 472D 99      1
		Hakko Solder Stations Model 470B
100	7	Accum Solder Stations w/Vacuum Pump
101	1	Pemserter Model Series LT/4
102	1	Seho Powerwave Solder Flow Oven Model 8440-4.0F, s/n 10051272130 (2010)
103	1	Electrovert Solder Flow Oven Model Econopak Plus 400/F, s/n M096115092 (1996)

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
104	1	Usi Ultra Sonic System Model Performa, s/n NA
105	3	Double Sided 50' Manual Board Insertion Line c/w Cabinets & Seating Stations
106	1	Nobles Floor Washer Model Speed Scrub Echo
		Impregnation Area
107	1	Blue M Oven c/w Stabletherm Controller POM586C, s/n NA
108	1	Blue M Oven c/w Stabletherm Controller POM586C, s/n P23-1385
109	4	Pressure Pots, Pneumatic Environment Testing
110	1	Bink Model 83-5307, 5 Gal Paint Pot
111	5	Waggo Model Inf-120P Solder Melt Pots w/Exhaust Pump
112	1	Wenesco Model Concept 1 Solder Melt Pot
113	19	Arbour Bench Type Press Unit Model 8
114	1	Wire Insertion/Trimmer Model A075
115	3	Chrome Rolling Metro/Carry All Racks
116	6	Asst Work Benches and Remaining Contents
	117	3     Chrome Rolling Metro/Carry All Racks
118	Lot	Asst Work Benches and Remaining Contents
		Machine Shop
119	1	DI-Acro #2 Corner Tab Knotcher, s/n 2191
120	1	Di-Acro #2 Punch, s/n 3046
121	1	Strands Gear Head Dark Press Model S68, s/n 79840
122	1	Colchester Model Student 6" Engine Lathe 12" x 24" Bed

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
123	1	Topwell Bridgeport Type Mill Model 3VK, 3 HP, s/n 781838 (1989)
124	1	Rockwell Model IS-601 Floor Type Drill Press #G3412 c/w Tapping Head
125	1	Almec 12" Disc Grinder, s/n 89154
126	1	Baldor 1/4 HP Buffer/Grinder
127	1	Freeport Model SGS 618B Surface Grinder, s/n 88H2B164 (1988)
128	1	ELU Cold Cut Metal Saw
129	1	DI-Arco Model 24 Box & Pan Brake, 24" Cap, s/n 5731

130	1	Calmec Model CBS-6 6" Belt Sander, s/n 88-02-4
131	1	Buffalo Model 18 Floor Type Drill Press
132	1	Single Bag Dust Collection System 1.6/1250
133	1	Edwards Model 1.6/1250MM Mini-shear 16 GA Capacity, s/n 787830482
134	1	Furo Metal Cutting Bandsaw Model BBS16 c/w Welder, s/n 160005
135	Lot	Remaining Contents of Manintenance Shop, Tooling, Cabinets, Work Benches, Hand Tools, Aluminum Inventory, Racking etc.
		Assembly & Test Area
136	17	Hakko Solder Stations Model FM-202
137	9	HIOS Power Supply Model CLT-50
138	5	Hakko Solder Station Model 472D
139	2	Hakko Solder Station Model 470B
140	5	HP Model 6012A DC Powser Supply

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

 

 

Ref #	Qty.	Description
141	14	Variable Speed Electric Drills
142	11	Powerstat Type 3 Power Supply
143	2	Nasco 1kg Tool Drop
144	12	GW/Instek Model PS-30 Lab Scope
145	2	HP Model 54600B Oscilloscope
146	25	Tectrol Dual Solid State Load Model TE-039B
147	1	Superior Electric Model 116C Variable Transformer
148	2	Kikusui Model PAO 55-35L DC Power Supply
149	2	Tektronicx Model TDS-2014B 4 Channel Slop
150	2	Tektronix Model TDS-3012B 2 Channel Color Slope
151	1	Xantrex Model XHR60-10 DC Power Supply
152	1	Xantrex Model XHR300-3.5 DC Power Supply
153	1	Phillips Model HDII Ult Sound Station, s/n US90530932
154	1	Phillips Model HDII Ult Sound Station, s/n  RDNO5HIPI
155	1	Phillips Model HDII Ult Sound Station, s/n NA
156	6	Renfrew Model Load-X Voltage Tasters
157	1	Xantrex Model XFR-6046 DC Power Supply
158	1	Harrison Model 6438B DC Power Supply
159	1	Gold Star Model DM-333 Tester/Meter
160	4	Agilent Multimeter Model U1242B
161	1	Quadtech Model Sentry 20/AC/DC Tester
162	2	Quadtech Model Sentry 30/AC/DC Tester
163	2	Quadtech Model Sentry 50+ Ground Band

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
164	7	Tectrol Model TECTTEST 5 Automatic P/S Tester TE-808
165	1	Fluke Model PM3380A Auto Range Combiscope
166	1	Transistor Devise Model DLP 130-15-750A Tester
167	4	ECT/Fairchild Super Kit SMT Tester Model FT303S
168	9	ROHS Hand Scanners c/w Charge Station,
		Model  M7225-2600-10HD
169	5	Checksum Automated Electronic Test System
		c/w H&M Board Tester
170	1	Rod-L 25 Amp Ground Tester
171	1	Croma Model 63201 DC Electronice Load Tester
172	1	Croma Model 63203 DC Electronic Load Tester
173	1	Madell Solder Station Model 850D
174	2	Powerstat Superior Variable Auto Transformer
175	1	HP Model 54600B Oscilloscope
176	1	Agilent Model 34401A Digi Multi Meter
177	2	NH Research Model Power Test 8105i System, s/n 5536
178	1	Chroma Model 63106 DC Electric Load Tester #631-431-28
179	95	Metal Base Work Tables, Insulated top 5/8' W x 3'D
180	60	Metro Chrome 2 Shelf Rolling Racks
181	76	Metro Chrome Multi Shelf Rolling Racks

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
182	50	Adjustable Steno Static Chairs
183	1	Vision Engineering Stereo Scope Model TS4 c/w
184	1	Stanford Model SR-720 LCR Motor
185	1	Valhalla Scientific Model 4300B Digital Micro Meter
186	1	Fluke Calibrator Model 5100B
187	1	OMAX Stereo Scope c/w Camera
188	1	Mitutoyo Digital Height Gauge 0" - 18" Capacity c/w Surface Block
189	2	2 Door Metal Cabinets c/w Contents, Measuring Precision Testing etc.
190	2	Xantrex Model XXFR 600-2 DC Power Supply
191	1	NHR Test System Model 5600 c/w Power Scope 4700 Load Testers, 5100 AC/DC Source & Keyboards, s/n S7669
192	1	Veltech Power Analyzer Model PM100
193	2	Tec Test Model 6A Testers
194	1	Vibco Vibration Test Table
195	1	ROD-L 25 Amp Ground Tester
196	1	Powerpak Compactor Model UB3624, s/n U2-1-9-12
197	1	Tenco Cardboard Compactor Model 5440
198	1	Pedestal Drill, Hood, Vacuum, Ladders, Misc.
199	1	Universal Handling Compactor Model UP2000, s/n 10-6-5-01
200	1	Custom Test Station c/w Keithloy Multimeter, Voltech Power Analyzer c/w Power Source

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
201	1	Weigh-Tronix 2000 lb Digital Platform Scale
202	1	Contents of Mezzazine Area Including: Metal Shelving Racks, Misc Test Equipment, etc.
203	1	HI-Jacker 500 lb Telescoping Work Platform Electric Powered
204	13	Asst Metal Storage Cabinets c/w Asst Test Equipment & Fixtures
205	1	EZ Life Pallet Mover, Electric Power
206	1	Banding Strapping Machine c/w Crimper
207	1	Raymond Model 20R30TT, 3000 lb Reach Forklift, s/n #20-8024-S
208	22	PSC Power Scan Portable Scanners
209	1	5' Portable Warehouse Ladder
210	1	Instasheeter High Speed Bubble Wrap Converting System
		Maintenance Area
211	Lot	Contents of Shop Area Including: Tool Chests, Repair Area, Bench Grinders, Shop Parts & Repair Parts, etc.
212	Lot	Cafeteria Area Contents Including Tables, Chairs, (6) Microwave Ovens, Asst Metro Racks, etc.
213	1	DI-Acro Finger Brake, Model 3.6" s/n FB-7433
214	1	DI-Acro Angle Knotcher, s/n AB2921
215	1	Buffalo 15" Bench Drill
216	8	Sections EZ Rect Parts Shelving
217	1	600 lb Portable Scissor Lift
218	Lot	Test Area Remaining Contents Including: Metal Storage Cabinets, Test Equipment & Test Fixtures etc.

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
219	Lot	Assembly & Test Area Remaining Contents Including: Test Fixtures, Tooling, Asst Cabinets, Computers, & Monitors, Test Benches, Power Cable, etc.
		Engineering Departments (Upper Floor)
220	7	Fluke Model Hydra Data Bucket/Scanner
221	1	Wavetek Model 171 Synthesizer/Function Generator
222	1	ES Stereo Microscope
223	15	Superior Powerstate Variable Speed Controller
224	6	Voltech Model PM 1000/300 Phase Power Analyzer
225	23	GW Instek Model PC3030 Dual Tracking Voltage Meter
226	7	Tektronix Model TDS3034B/3014 B 4 Channel Color Scopes
227	9	Transistor Devices Model DLP-130-15-750A/50-60 -1000
228	2	Xnatrex Model XFR60-40 DC Power Supply
229	40	Fluke Multi Meter Model 77/73 III
230	4	Chroma Model 63204/63203 D/C Electronic Load Tester, s/n 632040000323,  NA/632030001224, AKG00000068
231	30	Hakko Model FM202 Solder Station
232	22	Tectrol Model TL-039B Dual Load Tester
233	1	Keisoku Giken Model PT301B Power Supply Tester
234	2	Renfrew Power Supply Units
235	2	Elgar Model SW5550A High Power AC Source

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
236	1	Kikisui Model PL2 664WA Electronic Load Tester
237	2	HP Model 6012A DC Power Supply
238	1	Instek Model PS2225 D/C Power Supply
239	8	Agilent Model 34970A Data Switch Unit
240	3	Chroma Model 63207 DC Electronic Load Tester
241	1	Xantrax Model XRF6040 DC Power Supply
242	2	Chroma Model 6314 DC Load Tester, 4 Cell & Main Frame, s/n 6314-2793, s/n 6314-2790
243	2	Superior Variable Auto Transformer
244	4	Tektronix Model TDS 3074 4 Channel Scope
245	5	HP Model 6050 Electronic Load Tester
246	1	Xantrax Model 6046 DC Power Supply
247	1	Wilde Model M3Z Stereo Microview Scope, Model MV-3271
248	1	Power Design Model TW6050A Dual DC Power Supply
249	1	Tenney Model T-JR Oven, s/n 11722-122
250	1	HP Model 6010A Electronic Load Tester
251	2	Scientific Atlanta Power VU-D9850 Program Receiver
252	2	Tektronix Model TDS2024B 4 Channel Color Scope
253	2	Xantrex Model XHR 300-3.5 Power Supply
254	2	Anritsu Model MS420K Spectrum Analyzer
255	1	Tecktronix Model TDS 754D 4 Channel Scope w/Cart

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
256	1	Genrad Model 1659 RLL Digi-Bridge Test Unit
257	1	Sony-Tektronix Model 371 Hi-Power Curve Tracer w/Test Fixture
258	1	Hipotronics Model HD100 Hipot Tester
259	1	Fluke Model 8840A Multi-Meter
260	1	Omega Chart Recorder Model CT-485
261	4	Transistor Devices Model Dynaload DLVP/50-300-3000 Load Tester
262	1	Fluke Model 41B Power Analyzer
263	1	Venable Instruments Model 3120 Frequency Response Analyzer, s/n N/A
264	5	Superior Power Stat Variable Transformer
265	26	Work Station Units c/w Pedestal Drawer & Overhead Shelf Unit
266	Lot	Contents of 2 Door Storage Locker Units Including: Asst Test Equipment, Jigs, Fixtures, etc.
267	1	HP Model 8560 Spectrum Analyzer
268	1	Line Impedance Stabilization Network
269	1	Transistor Dyna Load Model SEL Tester
270	8	Fluke Model PM3380A Auto Ranging Combi-Scope
271	1	Ling Model DCS8000 Vibration Controller
272	1	Dispatch Oven Model LBD1-34-43B-1
273	1	MB Model C10 Vibration Tester Type E, s/n 319 c/w Surface Block
274	1	Dynamotion Gas Detector Model 1001, s/n 432
275	1	Thermotron Model SM-16-3800 Test Chamber Oven, s/n 37094

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
276	1	Transistor Devices Model DLP-5-2500A Load Tester
277	1	Screening Systems Model QRS-410T Screening System
278	1	Thermotron Model SM-8 Chamber Oven, s/n 32844
279	1	Tenney Test Chamber Model Versa-Tenn III Vibration Pads
280	1	Koytek Model EMC Chrome Advanced EMC Test Immunity System
281	1	General Pneumatics Airline Dryer
282	1	Stanley/Vidmar Multi Drawer Storage Cabinet
283	11	Chrome Metro Multi-Shore Rolling Racks
284	6	Speed Rail Multi-Shelf Parts Units
285	2	Hako FX-301 Hot Melt Pot w/Exhaust Head
286	1	Pneumatic Rivet Station L/Foot Operated Control
287	1	Aro Pneumatic Cutter
288	3	Adams-Maxwell Model 1200-JST Electric Winders w/Food Operated Control
289	1	Technology Model-875 Hot Strip
290	1	Heinrich Company Model 5 C-Press Units
291	3	Heinrich Company Model 0 C-Press Unit
292	31	Metal Base Work Tables w/Fitted Storage & Insulated Tops
293	1	Chamber Burn-In Area Contents
294	1	Chroma Model 6512 AC Programmable Source

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
295	1	California Instruments AC Power Source Model 500lix
296	1	Test Equity Model 1027C Temperature Chamber, s/n 50549
297	2	Automatic P/S Test Modules Model TE-0888 Controller
298	1	TDK Lambada Power Source
299	2	HP Model 34401  Multi-Meter Tester
300	1	Kikusui Regulated DC Power Supply
301	1	Quad Tech Sentry 20 AC/DC Hipot Tester
302	1	Voltech Model PM100 Single Phase Power Analyzer
303	1	Fancort Industries Buaro Cutter Model NTG-4, s/n 1399R
303A	Lot	Remainig Contents of Engineering Area Including: Tooling, Electronic Test Equipment, Magna Lights, Shelving Units, Etc.
		Machine Shop Area (Upstairs)
304	1	Forward Machining Centre, Power Feed
305	1	Rockwell Model 5-30 Floor Type Drill Press, s/n 83G81501
306	1	Rockwell Model 15-240 Floor Type Drill Press, s/n 23047
307	1	DI-Arco Model 36 Metal Hand Shear, s/n EE-1443
308	1	Baldor Bench Grinder
309	1	Mini-Perf Pnematic Powered Punch
310	1	Starrett 12" x 20" Granite Surface Plate
311	1	Darbert 12" x 36" C.C. Engine Lathe (3JC)

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
312	1	Mitutoyo 24" DRO Height Gauge
313	1	24" x 36" Granite Surface Plate
314	1	Lista 9 Drawer Storage Cabinet c/w Contents
315	1	LWH Pneumatic Powered Bench Press
316	1	Dake #1 Arbour Press
317	1	DI-Arco #1 Hand Punch, s/n  BA-2887
318	1	Beverly #B-2 Hand Metal Shear
319	1	HES Pneumatic Bench Type Punch
320	1	Rockwell 15-085 Floor Type Drill Press, s/n 203455
321	1	Jet Model VBS-2800 Metal Cutting Bandsaw
322	1	Dake Model Y Arbour Press
323	1	Brown Boggs Model 162-B Box & Pan Brake, s/n 81395
324	1	DI-Arco Model #1 Hand Corner Knotcher, s/n A6746
325	1	Baldor 4" Wide Vertical Belt Sander
326	1	Rimac Hand Tester
327	1	Remaining Contents of Machine Ship, Benches, Small Tooling etc.
328	1	Contents of Upstairs Office Area Furnishings
329	1	Unitdesign Model MDS-200 Frame Vacuum
330	Lot	Contents of Room Including: Older Test Equipment & Storage Racks
331	1	Superior Variable Speed Power Unit
332	1	Voltech Model PM100 AC Power Analyzer

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
333	2	HP 3585A Spectrum Analyzers
334	1	Hako Model 202 Solder Station
335	1	Instek Model PS-3030 DC Power Supply 336
	1	HP Model 6010A DC Power Supply
337	4	Workstations c/w Insulated Work Surface
338	1	Hammond 45 KVA Transformer
339	2	Metro Carts on Wheels
340	1	KLN Sonic Machine
341	1	Emhart Arcotronics Foil Machine c/w Controls Model PM-195, s/n 596A
342	1	Transistar Model DLVP 50-30-3000 Dynaload

343	1	HP Model 6012A DC Power Supply
344	1	HP Model 6814B AC Power Supply
345	1	HP Designjet 500 Printer
		Server Room
346	3	Dell Poweredge Model T710 Servers
347	5	ARC 1500 UPS
348	1	Remaining Contents in Server Room etc.
349	1	Xerox Model 3050 Wide Format Printer
350	1	Ricoh Aficio MP5001 Copier
351	10	Blue Print Storage Cabinet
352	1	ADP Time Clock
353	1	Ricoh Atico Model MP500088
354	1	Ricoh Aficio Model MP7001
355	1	Ricoh Aficio Model MP800 Copier

 

Tectrol Inc. | August 2014

 

 

 

Exhibit "A"

 

Tectrol Inc., 39 Kodiak Crescent, Toronto, Ontario

 

Ref #	Qty.	Description
356	1	Ricoh Aficio Model MP3001 Copier

357	1	Upstairs Boardroom c/w Benq Overhead Projector
358	1	Contents of Office Furnishings Located on Main Floor Office Area
360	Lot	Assorted Scanners, Printers and Office Machines

 

Tectrol Inc. | August 2014

   

 

SCHEDULE 3

 

INVENTORY [SECTION 1.1.31]

 

Schedule 3

Inventory

Forecast February 28th balance using January roll forward

 

Opening - Jan 23							3,881
Purchases							596
Feb Sales			2,300
COS			42.0	%
Usage							975
Closing - Feb 28							3,502
Closing - Feb 28							3,502
Less: obsolete *1							(897	)
Subtotal							2,605
Adjustments *2			8.9	%			232
Goods in transit *3							63
							2,900
November 30th "book value"							3,350
Closing Adjustment - increase (decrease)							(450	)

 

NOTES:

1

Obsolete as at Feb 15, 2015 determined using 24 historical sales + forecast

2

Adjusted based on percentage from November 30th methodology

3

Estimate

  

Agreement of Purchase and Sale

 

 

SCHEDULE 4

 

INTELLECTUAL PROPERTY [SECTION 1.1.30]

 

Schedule 4

Intellectual Property

 

Any documentation, information or material related to the Design and Manufacture of Switch Mode power supplies including, but not limited to: parts list, schematics, documents, drawings, and other knowhow

 

Phone Numbers

(416) 630-8108

 

Website Domains

tectrol-inc.ca	6/14/2021	DNS.INTERNIC.CA
tectrol-inc.com	6/15/2020	DNS.INTERNIC.CA
tectrol-inc.info	7/28/2020	DNS.INTERNIC.CA
tectrol-inc.net	6/15/2024	DNS.INTERNIC.CA
tectrol-inc.org	6/15/2022	DNS.INTERNIC.CA
tectrol-inc.us	3/25/2019	DNS.INTERNIC.CA
tectrol.biz	3/27/2021	DNS.INTERNIC.CA
tectrol.ca	12/21/2020	toroondcnszs04.srvr.bell.ca
tectrol.net	10/28/2022	DNS.INTERNIC.CA
tectrol.org	10/29/2021	DNS.INTERNIC.CA
tectrol.us	1/21/2021	DNS.INTERNIC.CA
tectrolinc.ca	6/14/2021	DNS.INTERNIC.CA
tectrolinc.com	6/15/2021	DNS.INTERNIC.CA
tectrolinc.info	7/13/2019	sp1.domainpeople.com
tectrolinc.net	6/15/2021	DNS.INTERNIC.CA
tectrolinc.org	6/15/2022	DNS.INTERNIC.CA
tectrolinc.us	3/25/2019	DNS.INTERNIC.CA
total-power-solutions.ca	6/14/2024	SEC1.DNS.CA.TELUS.COM
total-power-solutions.cn	3/27/2019	SEC1.DNS.CA.TELUS.COM
total-power-solutions.com	6/15/2020	toroondcnszs04.srvr.bell.ca
total-power-solutions.info	7/28/2021	DNS.INTERNIC.CA
total-power-solutions.net	6/15/2020	DNS.INTERNIC.CA
total-power-solutions.org	6/15/2021	DNS.INTERNIC.CA
total-power-solutions.us	3/25/2019	SEC1.DNS.CA.TELUS.COM
totalpowersolution.biz	10/3/2020	DNS.INTERNIC.CA
totalpowersolution.net	10/4/2020	DNS.INTERNIC.CA
totalpowersolution.org	10/4/2020	DNS.INTERNIC.CA
totalpowersolutions.ca	6/14/2022	DNS.INTERNIC.CA
totalpowersolutions.cn	3/27/2019	SEC1.DNS.CA.TELUS.COM
totalpowersolutions.com	4/7/2021	SEC1.DNS.CA.TELUS.COM
totalpowersolutions.info	7/28/2021	DNS.INTERNIC.CA
totalpowersolutions.net	6/15/2021	DNS.INTERNIC.CA
totalpowersolutions.org	6/15/2022	DNS.INTERNIC.CA
totalpowersolutions.us	1/21/2022	SEC1.DNS.CA.TELUS.COM
tectrol.asia	14/09/2015	ns1.eurodns.com
tectrol.sg	7/9/2017	ns1.eurodns.com
tectrol.hk	14/09/2016	ns1.eurodns.com
tectrol.be	14/09/2017	ns1.eurodns.com
tectrol.co.in	9/9/2016	ns1.eurodns.com
tectrol.net.cn	18/08/2020	ns1.eurodns.com
tectrol.mobi	16/09/2018	ns1.eurodns.com
totalpowersolutions.de	15/09/2016	ns1.eurodns.com
totalpowersolutions.tw	7/9/2017	ns1.eurodns.com
totalpowersolutions.be	15/09/2017	ns1.eurodns.com
totalpowersolutions.com.cn	18/08/2020	ns1.eurodns.com
totalpowersolutions.asia	17/09/2021	ns1.eurodns.com

 

Agreement of Purchase and Sale

 

 

Schedule 4

Intellectual Property

totalpowersolutions.in	10/9/2016	ns1.eurodns.com
totalpowersolutions.hk	17/09/2017	ns1.eurodns.com
tectrol.org.cn	6/7/2020	ns1.eurodns.com
total-power-solutions.co.uk	26/03/2017	ns1.eurodns.com
tectrol-inc.biz	11/18/2019	Under Construction Page
tectrol-inc.bz	1/30/2022	Under Construction Page
tectrol-inc.ws	1/30/2022	Under Construction Page
tectrol-inc.xyz	6/30/2015	ADNS Services
tectrol.bz	1/30/2022	Under Construction Page
tectrol.cn	3/14/2021	Under Construction Page
tectrol.cn.com	9/11/2018	Under Construction Page
tectrol.co	3/23/2016	Under Construction Page
tectrol.co.uk	3/14/2022	Under Construction Page
tectrol.com.cn	3/14/2021	Under Construction Page
tectrol.com.co	4/6/2021	Under Construction Page
tectrol.com.tw	3/14/2019	Under Construction Page
tectrol.eu	1/23/2017	sec1.dns.ca.telus.com|sec2.dns.ca.telus.com
tectrol.eu.com	10/31/2020	Under Construction Page
tectrol.in	9/11/2018	Under Construction Page
tectrol.info	1/23/2019	sec1.dns.ca.telus.com|sec2.dns.ca.telus.com
tectrol.jpn.com	3/31/2016	Under Construction Page
tectrol.kr.com	3/31/2020	Under Construction Page
tectrol.tw	3/14/2019	Under Construction Page
tectrol.uk.com	3/31/2016	Under Construction Page
tectrol.us.com	9/11/2018	Under Construction Page
tectrol.ws	1/30/2022	Under Construction Page
tectrolinc.biz	11/18/2019	Under Construction Page
tectrolinc.bz	1/30/2022	Under Construction Page
tectrolinc.co	4/6/2016	Under Construction Page
tectrolinc.ws	1/30/2022	Under Construction Page
tectrolinc.xxx	12/6/2017	Under Construction Page
total-power-solutions.asia	3/23/2021	Under Construction Page
total-power-solutions.biz	11/18/2021	sec1.dns.ca.telus.com|sec2.dns.ca.telus.com
total-power-solutions.bz	1/30/2022	Under Construction Page
total-power-solutions.co	3/23/2016	Under Construction Page
total-power-solutions.us.com	4/6/2021	Under Construction Page
total-power-solutions.ws	1/30/2022	Under Construction Page
totalpowersolutions.biz	11/18/2021	sec1.dns.ca.telus.com|sec2.dns.ca.telus.com
totalpowersolutions.bz	1/30/2022	Under Construction Page
totalpowersolutions.cn.com	8/12/2019	Under Construction Page
totalpowersolutions.co	3/23/2016	Under Construction Page
totalpowersolutions.co.uk	4/6/2021	Under Construction Page
totalpowersolutions.eu.com	8/12/2019	Under Construction Page
totalpowersolutions.net.cn	8/12/2017	Under Construction Page
totalpowersolutions.org.cn	8/12/2017	Under Construction Page
totalpowersolutions.uk.com	8/12/2017	Under Construction Page
totalpowersolutions.us.com	8/12/2019	Under Construction Page
totalpowersolutions.ws	1/30/2018	Under Construction Page
totalpowersolutions.xxx	12/6/2019	Under Construction Page

 

 

Schedule 4

Intellectual Property

Trade Marks

Trade-mark	Country	Registraton No.	Registration Date	Renewal Date
"TOTAL POWER SOLUTIONS"	U.S. trade-mark	3,074,995		4-Apr-16
"TOTAL POWER SOLUTIONS"	U.S. trade-mark	3,081,069	18-Apr-06	18-Apr-16
"TECTROL INC. & Design" - old logo	U.S. Trade-Mark	3,033,314	27-Dec-05	27-Dec-15
Tectrol Design	China	5198271	28-Oct-10	27-Oct-20
"TECTROL Design"	China	5198272	7-Sep-09	6-Sep-19
"T TECTROL TOTAL POWER SOLUTIONS & Design"	U.S.A.	3,350,000	4-Dec-07	4-Dec-17
"TECTROL"	Canada	TMA 530,983	10-Aug-00	Reg for 15 years
"TECTROL Design"	Taiwan	1248330	16-Jan-07	15-Jan-17
"TECTROL Design"	Hong Kong	300 584 550	20-Feb-06	19-Feb-16
"T & Design"	Canada	TMA 622,816	19-Oct-04	18-Oct-19
"TOTAL POWER SOLUTIONS"	Canada	TMA 593,439	29-Oct-03	28-Oct-18
"TECTROL & Design"	Canada	TMA 577,229	11-Mar-03	11-Mar-18
"TECTROL & Design"	Canada	TMA 579,842	28-Apr-03	27-Apr-18
"TECTROL INC. Design" - old logo	Canada	TMA 538,187	4-Dec-00	4-Dec-15
"TECTROL"	European Union	256 6933	8-Jul-03	4-Feb-12
"TECTROL & Device"	European Union	256 6941	6-Jun-03	4-Feb-12

   

 

SCHEDULE 5

 

REQUIRED CONSENTS [SECTION 1.1.40]

 

 

Schedule 5

Required Consents

 

Not Applicable

  

Agreement of Purchase and Sale

 

 

SCHEDULE 6

 

ALLOCATION OF PURCHASE PRICE [SECTION 2.7]

  

SCHEDULE 6

 

PURCHASE PRICE ALLOCATION

 

Total Purchase Price:
Purchase Price Adjustments:
Net Purchase Price:
Allocation
Inventory:
Fixed Assets:
SAP:
Intangibles:
Other Assets:

 

 

SCHEDULE 7

COPY OF EXECUTED CUI PROPOSAL [SECTION 1.1.19]

 

 

 

January 23, 2015

 

Richard Gelb
TECTROL INC.

39 Kodiak Crescent
North York, ON Canada
MJ3 3E5

 

RE:

PROPOSAL REGARDING ASSET PURCHASE OF TECTROL INC.

 

Dear Richard:

 

This Proposal ("PROPOSAL"), once executed, will serve to confirm the intent of CUI Global Inc., a Colorado Corporation with its principal place of business at 20050 SW 1 121 Avenue, Tualatin, OR 97209 (hereinafter: "CUI"), to purchase the assets of Tectrol Inc. (hereinafter: "Tectrol ") under the following terms and conditions and upon completion of the necessary conditions precedent. It is the intent of the Parties to complete and execute a formal, written Asset Purchase Agreement(s) to memorialize the relationship once an agreement-to-terms is reached. That being said, the proposed conditions and terms are as follows:

 

WHEREAS Tectrol is currently insolvent as that term is used in Canadian law and has filed a Notice of Intention to Make a Proposal ("NOI") on November 6, 2014 under Section 50.4 (I ) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended;

 

WHEREAS pursuant to the terms of that NOI, Tectrol's principals and creditor(s) wish to sell Tectrol's assets and CUI wishes to purchase those assets;

 

WHEREAS CUI is prepared and able to provide funds (all amounts of which are in US dollars) and other consideration for the purchase of Tectrol's assets under the terms of this PROPOSAL , without a "financing contingency," if accepted, once the described conditions precedent are fulfilled or waived;

 

CUI Hereby sets forth its offer as follows

 

I)

CUI shall pay as consideration the total amount of FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS ($5,500,000.00) to be paid as follows:

 

a)

A deposit of FIVE HUNDRED AND FIFTY THOUSAND DOLLARS ($550,000.00) as set out in paragraph 2(a) herein;

 

b)

CUI shall pay on closing the sum of THREE MILLION FOUR HUNDRED AND FIFTY THOUSAND DOLLARS ($3,450,000.00) for the purchase of Tectrol 's inventory, fixed assets (including SAP), goodwill and intangible assets, and like material;

 

i)

The above sum to be adjusted in good faith by the Parties according to the final value of the non-obsolete inventory if said inventory's value moves (whether up or down) more than $50,000;

 

20050 SW 112th Avenue ·Tualatin, Oregon 97062

 

  

 

c)

CUI shall place an additional ONE MILLION TWO HUNDRED THOUSAND DOLLARS ($1,200,000.00) to be adequately secured or placed in an escrow with the Trustee to be paid, without conditions, over the course of twelve (12) consecutive months in twelve (12) equal installments of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) on the first of each month following the close of the transaction;

 

d)

CUI shall pay a Royalty Rate of two percent (2%) of the gross sales related to specific Tectrol customers (to be mutual ly agreed by the Parties hereto), up to a total of an additional THREE HUNDRED THOUSAND DOLLARS ($300,000.00).

 

i)

In addition, CUI is prepared to enter into a five (5) year commercial lease agreement for the facility located at 39 Kodiak Crescent at reasonable market rates for comparable property similarly situated;

 

ii)

Said market rate shall be set by an independent appraisal conducted by a mutually agreeable appraiser.

 

2)

"Good Faith" Deposit:

 

a)

A deposit of FIVE HUNDRED AND FIFTY THOUSAND DOLLARS ($550,000.00) or 10% of the proposed purchase price shall be forwarded to the Trustee as a "good faith deposit." It is specifically understood that acceptance and retention of this deposit is conditioned on completion and/or waiver of each and every one of the below Conditions Precedent, including, but not limited to CUI obtaining approval of the transaction from its Board of Directors. Should any of those Conditions Precedent be breached; in the unlikely event that CUI is unable to obtain approval from its Board of Directors; or should Tectrol accept a competitive bid or otherwise fail to consummate the transaction for any reason, this deposit shall be promptly and fully returned to CUI. The deposit (together with interest earned thereon) will be held by the Trustee in trust and will be credited to the purchase price on closing.

 

3)

Conditions Precedent:

 

a)

In order to consummate the transaction , the following events and/or acts must be completed:

 

i)

CUI must be given the information and opportunity to conduct due diligence to confirm that the Customer List provided by Tectrol is accurate and still viable. For its part, CUI shall make such inquiry as soon as practical, but in no event more than thirty (30) days after acceptance of this PROPOSAL;

 

ii)

) Tectrol shall promptly provide CUI with all relevant corporate financial data in Tectrol's possession, including without limitation, the most recent three (3) years' audited (under Canadian GAAP) financial statements (the "Tectrol Financial Statements"). Tectrol shall begin working with an accounting firm (the "Firm") to be selected by CUI: (i) to commence the process having the Tectrol Financial Statements converted from Canadian GAAP to US GAAP, and to (ii) to provide the Firm with the information (to the extent available up to the Business Day before the Closing Date) necessary for the Purchaser to report on the current year and/or period ending at the Closing Date in accordance with US GAAP (i and ii collectively, "US GAAP Reporting"). CUI shall bear the cost of all US GAAP Reporting. It is specifically understood that the US GAAP Reporting process is unlikely to be completed prior to the Closing Date, and its completion is NOT a condition precedent to Closing.

 

20050 SW 112th Avenue ·Tualatin, Oregon 97062

 

 

 

iii)

A full physical inventory shall be conducted as of the close of business prior to the closing of the transaction, to be observed by representatives appointed by CUI and basic audit procedures to substantiate the accuracy of inventory values shall be conducted;

 

iv)

Tectrol shall provide confirmation that the fixed assets listing is accurate and the assets contained therein are in its possession, in good working order, and free and clear of any encumbrances;

 

v)

CUI shall attempt to acquire assurances from "key employees" of their intent to remain with the company and Tectrol shall assist in those efforts, by both identifying and providing access to those "key employees";

 

vi)

The SAP software program and licenses shall be transferred to Tectrol and included in the purchase;

 

vii)

The lease of the facility at 401 Magnetic Drive shall be terminated by Tectrol i n advance of the purchase by CUI and all costs therein bourn by Tectrol;

 

viii)

Tectrol shall certify that, in accordance with the terms and conditions of the 39 Kodiak Crescent lease, that maintenance and upkeep of the facility, as well as all taxes and other fees have been appropriately kept current by Tectrol;

 

ix)

Acquisition shall become effective on or before March 1, 2015, subject to completion of due diligence;

 

x)

The Parties shall enter into a five (5) year commercially reasonable , market rate lease for the property located at 39 Kodiak Crescent and currently used by Tectrol to conduct its business;

 

xi)

The Trustee shall obtain an Order from the Ontario Superior Court of Justice (Commercial List) approving the transaction and vesting all right, title and interest of the purchased assets to CUI free and clear of all encumbrances.

 

4)

Miscellaneous

 

a)

Independent Contractor Status - The relationship between the Parties will at all times be and remain that of independent contractors and nothing herein nor in the performance of this PROPOSAL will be deemed to create any partnership, joint venture, agency, fiduciary or employment relationship between the Parties.

 

b)

Governing Law - This PROPOSAL is governed by, and is to be construed and interpreted in accordance with, the laws of the Province of Ontario and the laws of Canada applicable in that Province.

 

c)

Partial Invalidity

 

i)

Nothing contained in this PROPOSAL will be construed to require the commission of any act contrary to law, and wherever there is any conflict between any provision of this PROPOSAL and any statute, law, ordinance, order, or regulation, the latter will prevail, but in such an event, any provision of this PROPOSAL so affected will be curtailed and limited on ly to the extent necessary to bring it within the legal requirements.

 

ii)

In the event any portion of the terms and conditions contained within this PROPOSAL will be held to be invalid or unenforceable in a court of law or equity; l) the Parties agree to negotiate in good faith an acceptable alternative provision which reflects as closely as possible the intent of the unenforceable provision, and 2) the validity, legality and enforceability of the remaining provisions of the PROPOSAL will not in any way be affected or impaired by such holding, and will remain in full force and effect.

 

20050 SW 112th Avenue ·Tualatin, Oregon 97062

 

 

  

d)

No Waiver - The failure of a performing party to insist upon the other party's performance of any representation , warranty, covenant or obligations hereunder will not be construed as a waiver by the performing party of such performance or other obligation due by the other party hereunder , or of any subsequent breach by such other party . The failure of either party to exercise any right or remedy which it may have hereunder or under law will not be construed as a waiver of any other right or remedy which the party may have hereunder or under law.

 

e)

Cumulative Remedies - Each right and remedy conferred upon either party by this Agreement or under law will be deemed cumulative and not exclusive of one another, and the exercise by either party of any such right or remedy will not preclude the party exercising the right or remedy from exercising or enforcing any other right or remedy it may have hereunder or under law.

 

f)

Legal Fees - In the event of any suit or other proceeding between the parties arising out of the performance, breach, default, termination or other subject matter of this Agreement, the prevailing party will, in addition to such other relief as the court may order or award, be entitled to recover actual legal fees, expenses and costs (including, but not limited to, court costs and costs of investigation) all as actually incurred.

 

g)

Entire Agreement - This PROPOSAL contains the entire understanding of the Parties with respect to the subject matter dealt with herein and will supersede and replace in their entirety any and all prior understandings of the parties hereto relating to such subject matters. This PROPOSAL may not be modified, nor may any provision hereof be waived, except by a writing signed by both parties.

 

h)

Headings - Paragraph headings used herein are for convenience only and will not be used in any way to interpret the provisions of this PROPOSAL.

 

i)

The Parties shall work towards the execution of an Agreement of Purchase and Sale on or before January 29, 201 5.

 

Signature Page Follows

 

20050 SW 112th Avenue ·Tualatin, Oregon 97062

 

 

 

This document consists of five (5) pages [including signature page]. If the foregoing reflects the PROPOSAL and proposed agreements between CUI and Tectrol, please sign the two (2) originals provided and return one to me by messenger or overnight mail.

 

Very truly yours,
William J. Clough, Esq.
President & CEO
CUI Global Inc.

 

AGREED TO AND ACCEPTED:
Richard Gelb and Tectrol, Inc.
By:	Richard Gelb
Title:	President & CEO
Date:

 

20050 SW 112th Avenue · Tualatin, Oregon 97062

 

 

SCHEDULE 8

INVENTORY VALUATION METHODOLOGY [SECTION 1.1.32]

 

Schedule 8

 

Inventory Valuation Methodology

  

						Adjustments
		Notes				Balance Nov 30, 2014				PPV (1)				Duty & Freight (2)				Overhead %%% (3)				Overhead $$$ (3)				Total Adj				Estimated Inventory at Cost
Semi Finished Goods - Buy							366,298
Obsolete Inventory							(900,000	)
NET			1,2				1,852,688
Raw Materials											1.2	%			5.0	%
Raw Materials							2,386,390
											22,232				92,634												114,867				1,967,555
WIP
Semi Finished Goods - Make (WIP)			1,2,3				329,103				3,949				16,455				3.0	%			9,873				30,278				359,381
Work In Progress			1,2,3				251,714				3,021				12,586				6.0	%			15,103				30,709				282,423
Inventory - Finished Goods			1,2,3				641,523				7,698				32,076				9.0	%			57,737				97,511				739,034
Goods In Transit																															TBD
							3,075,028				36,900				153,751								82,713				273,365				3,348,393
																											8.9	%

 

NOTES:

 

Inventory Valuation - Active Items

 

Analysis to be performed on closing Inventory to determine Active and Inactive Inventory (same as analysis on November 21, 2014) Active Inventory to be defined as inventory related to items which have sold over the past 24 months or have future orders on hand. Inactive Inventory (Approx. $900K on November 21, 2014) will not be valued.

Note: Foreign Exchange not accounted for as this amount is not material to the reconciliation

 

Accounting Adjustments:

 

1

PPV to be based on YTD PPV (i.e. 10 months March to December 31). Currently estimated at 1.2%, but will be analyzed to confirm this rate.

2

Duty & Freight - Tectrol has historically used 5% to reflect the cost of these charges. Applied 100% to RM and Semi-Finished goods purchased; and to the material portion of WIP & FG

3

Overhead - Tectrol applies an overhead factor to the labour component of WIP and FG. These percentages pertain to the O/H rate for November 30th.

 

 

SCHEDULE 9

PREPAID EXPENSES [SECTION 1.1.25.3]

 

Schedule 9
Prepaid Expenses
Supplier Payments - CAD
	Total CDN	6,449

 

Vendor				Clearing				Wire Payment										Open
No		Vendor Name		Document				Amount				Currenc		Cleared				balance
10012		ADTOOL CORPORATION			1500001516				175			CAD			48				127
10021		AIM METALS			1500001795				1,394			CAD			1,394				-
10191		IMPULSE TECHNOLOGIES LTD.			1500001748				2,592			CAD			2,592				-
10550		RUSH PALLETS			1500001774				445			CAD			445				-
10345		TRADEPORT ELECTRONICS GR			1500001793				3,112			CAD							3,112
10345		TRADEPORT ELECTRONICS GR			1500001649				2,718			CAD			2,537				181
10550		RUSH PALLETS			1500001844				347			CAD							347
10482		ELECTRONIC COATING			1500001845				2,682			CAD							2,682
																			-
																			-
																			-

 

 

Schedule 9
Prepaid Expenses
Supplier Payments - USD
	Total USD	860,973

 

								Wire
Vendor				Clearing				Payment
No		Vendor Name		Document				Amount				Currency				Cleared				Open balance				Locale
20004		ACE TECH CORPORATION			1500001686				8,371				USD								8,371			NA
20010		ALEX CONNECTOR CO., LTD.			1500001741				5,908				USD								5,908			CN
20021		ARROW ELECTRONICS CANADA			1500001805				524				USD								524			NA
20021		ARROW ELECTRONICS CANADA			1500001810				2,559				USD								2,559			NA
20021		ARROW ELECTRONICS CANADA			1500001829				27				USD								27			NA
20021		ARROW ELECTRONICS CANADA			1500001841				540				USD								540			NA
20021		ARROW ELECTRONICS CANADA			1500001543				9,560				USD				9,135				425			NA
20021		ARROW ELECTRONICS CANADA			1500001558				10,426				USD				10,361				65			NA
20021		ARROW ELECTRONICS CANADA			1500001598				5,052				USD				5,028				24			NA
20021		ARROW ELECTRONICS CANADA			1500001622				10,523				USD				10,187				336			NA
20021		ARROW ELECTRONICS CANADA			1500001733				799				USD								799			NA
20021		ARROW ELECTRONICS CANADA			1500001846				317				USD								317			NA
20028		AVC AMERICA, INC			1500001782				2,385				USD								2,385			CN
20028		AVC AMERICA, INC			1500001623				5,247				USD								5,247			CN
20029		AVNET ELECTRONICS			1500001714				12,032				USD								12,032			NA
20029		AVNET ELECTRONICS			1500001749				10,868				USD								10,868			NA
20042		BROADLAKE CO., LTD.			1500001839				20,775				USD								20,775			CN
20042		BROADLAKE CO., LTD.			1500001796				17,236				USD								17,236			CN
20042		BROADLAKE CO., LTD.			1500001814				10,930				USD								10,930			CN
20042		BROADLAKE CO., LTD.			1500001483				7,045				USD				2,488				4,557			CN
20042		BROADLAKE CO., LTD.			1500001578				16,360				USD				10,889				5,471			CN
20042		BROADLAKE CO., LTD.			1500001752				12,966				USD				352				12,614			CN
20042		BROADLAKE CO., LTD.			1500001766				1,600				USD								1,600			CN
20047		CARLI ELECTRONICS CO. LTD			1500001588				1,079				USD								1,079			CN
20047		CARLI ELECTRONICS CO. LTD			1500001687				1,079				USD								1,079			CN
20055		CIT RELAY & SWITCH			1500001832				409				USD								409			NA
20055		CIT RELAY & SWITCH			1500001755				2,500				USD				1,000				1,500			NA
20063		CREATIVE CIRCUITS			1500001783				3,172				USD				3,172				-			NA
20063		CREATIVE CIRCUITS			1500001817				1,777				USD				1,504				273			NA
20070		DIGI-KEY CORPORATION			1500001691				3,495				USD				2,971				524			NA
20070		DIGI-KEY CORPORATION			1500001707				260				USD				130				130			NA
20430		Digital Printed Circuit Board Co.,L			1500001828				29,535				USD								29,535			CN
20430		Digital Printed Circuit Board Co.,L			1500001695				26,924				USD								26,924			CN
20071		DIVERSE ELECTRONICS INC.			1500001819				5,189				USD								5,189			NA
20071		DIVERSE ELECTRONICS INC.			1500001621				14,455				USD				13,359				1,096			NA
20071		DIVERSE ELECTRONICS INC.			1500001712				2,811				USD				1,070				1,741			NA
20071		DIVERSE ELECTRONICS INC.			1500001762				2,418				USD				1,131				1,287			NA
20078		ELECTRI-CORD MANUFACTURIN			1500001735				540				USD				540				-			NA
20082		ELNA AMERICA INC.			1500001842				312				USD								312			NA
20082		ELNA AMERICA INC.			1500001754				3,492				USD								3,492			NA
20083		ELNA MAGNETICS			1500001639				1,259				USD								1,259			NA
20084		ELYTONE ELECTRONICS			1500001807				2,850				USD								2,850			CN
20084		ELYTONE ELECTRONICS			1500001490				20,305				USD				7,108				13,197			CN
20084		ELYTONE ELECTRONICS			1500001525				525				USD				125				400			CN
20084		ELYTONE ELECTRONICS			1500001607				5,078				USD				188				4,890			CN
20084		ELYTONE ELECTRONICS			1500001640				264				USD								264			CN
20084		ELYTONE ELECTRONICS			1500001694				46,232				USD								46,232			CN
20084		ELYTONE ELECTRONICS			1500001751				29,215				USD								29,215			CN
20084		ELYTONE ELECTRONICS			1500001761				1,301				USD				188				1,113			CN
20097		FE-TRONIC MANUFACTURING			1500001590				8,364				USD				8,364				-			CN
20097		FE-TRONIC MANUFACTURING			1500001739				10,288				USD				447				9,841			CN
20097		FE-TRONIC MANUFACTURING			1500001826				25,626				USD								25,626			CN
20103		FUTURE ELECTRONICS (CDA), LTD			1500001792				542				USD				542				-			NA
20103		FUTURE ELECTRONICS (CDA), LTD			1500001804				271				USD				271				-			NA
20103		FUTURE ELECTRONICS (CDA), LTD			1500001813				4,715				USD				4,502				NA
20103		FUTURE ELECTRONICS (CDA), LTD			1500001823				721				USD								NA
20103		FUTURE ELECTRONICS (CDA), LTD			1500001681				4,469				USD				3,966				NA

 

 

Schedule 9
Prepaid Expenses
Supplier Payments - USD
	Total USD	860,973

 

								Wire
Vendor				Clearing				Payment
No		Vendor Name		Document				Amount				Currency		Cleared				Open balance				Locale
20103		FUTURE ELECTRONICS (CDA), LTD			1500001688				655			USD			601				55			NA
20103		FUTURE ELECTRONICS (CDA), LTD			1500001699				4,440			USD			3,223				1,217			NA
20103		FUTURE ELECTRONICS (CDA), LTD			1500001724				3,133			USD			3,133				-			NA
20103		FUTURE ELECTRONICS (CDA), LTD			1500001729				17,472			USD			10,844				6,628			NA
20103		FUTURE ELECTRONICS (CDA), LTD			1500001770				1,280			USD			1,280				-			NA
20103		FUTURE ELECTRONICS (CDA), LTD			1500001848				1,341			USD							1,341			NA
20501		Grandway Metal Manufacturing LTD.			1500001808				2,970			USD							2,970			CN
20501		Grandway Metal Manufacturing LTD.			1500001811				2,770			USD							2,770			CN
20501		Grandway Metal Manufacturing LTD.			1500001608				17,943			USD							17,943			CN
20501		Grandway Metal Manufacturing LTD.			1500001654				5,664			USD							5,664			CN
20501		Grandway Metal Manufacturing LTD.			1500001750				1,056			USD							1,056			CN
20072		HENGDIAN GROUP DMEGC			1500001647				650			USD			650				-			CN
20122		HITACHI CHEMICAL			1500001786				12,896			USD			12,896				-			NA
20122		HITACHI CHEMICAL			1500001809				2,400			USD							2,400			NA
20137		JIANGMEN GLORY FAITH PCB CO.			1500001736				2,167			USD			2,167				-			CN
20432		KAIMEI ELECTRONIC CORP.			1500001641				574			USD							574			CN
20432		KAIMEI ELECTRONIC CORP.			1500001683				1,148			USD							1,148			CN
20432		KAIMEI ELECTRONIC CORP.			1500001760				122			USD							122			CN
20159		MARIAN (SUZHOU) CO. LTD.			1500001779				270			USD							270			CN
20159		MARIAN (SUZHOU) CO. LTD.			1500001798				1,640			USD							1,640			CN
20159		MARIAN (SUZHOU) CO. LTD.			1500001818				1,156			USD							1,156			CN
20159		MARIAN (SUZHOU) CO. LTD.			1500001827				1,875			USD							1,875			CN
20159		MARIAN (SUZHOU) CO. LTD.			1500001764				153			USD							153			CN
20163		MECTECH COMPONENTS			1500001791				15,090			USD							15,090			NA
20163		MECTECH COMPONENTS			1500001803				5,933			USD							5,933			NA
20163		MECTECH COMPONENTS			1500001606				10,068			USD							10,068			NA
20163		MECTECH COMPONENTS			1500001642				7,000			USD							7,000			NA
20163		MECTECH COMPONENTS			1500001705				5,594			USD							5,594			NA
20173		MICROCHIP TECHNOLOGY INC.			1500001802				4,332			USD							4,332			NA
20173		MICROCHIP TECHNOLOGY INC.			1500001771				4,352			USD							4,352			NA
20174		MICROMEX, INCORPORATED			1500001790				1,643			USD			1,643				-			NA
20174		MICROMEX, INCORPORATED			1500001615				2,419			USD			2,419				-			NA
20174		MICROMEX, INCORPORATED			1500001631				579			USD							579			NA
20178		MOUSER ELECTRONICS, INC.			1500001789				306			USD			152				154			NA
20178		MOUSER ELECTRONICS, INC.			1500001646				269			USD			185				85			NA
20178		MOUSER ELECTRONICS, INC.			1500001738				436			USD			436				-			NA
20178		MOUSER ELECTRONICS, INC.			1500001768				65			USD			65				-			NA
20178		MOUSER ELECTRONICS, INC.			1500001847				818			USD							818			NA
20197		PANASONIC CANADA INC			1500001723				6,255			USD							6,255			NA
20205		POSITRONICS			1500001815				12,555			USD							12,555			NA
20206		POSITRONICS			1500001824				12,600			USD			12,600				-			FR
20390		SAGER ELECTRONICS			1500001788				23,702			USD							23,702			NA
20234		SAMXON ELECTRONIC COMPONEN			1500001812				3,372			USD							3,372			CN
20234		SAMXON ELECTRONIC COMPONEN			1500001545				7,828			USD			1,846				5,982			CN
20236		SANYO DENKI AMERICA, INC.			1500001822				5,840			USD							5,840			NA
20236		SANYO DENKI AMERICA, INC.			1500001730				2,920			USD							2,920			NA
20241		SEASON COMPONENTS CO. LTD			1500001799				79,814			USD							79,814			CN
20241		SEASON COMPONENTS CO. LTD			1500001511				2,544			USD							2,544			CN
20241		SEASON COMPONENTS CO. LTD			1500001528				7,633			USD							7,633			CN
20241		SEASON COMPONENTS CO. LTD			1500001679				3,000			USD							3,000			CN
20241		SEASON COMPONENTS CO. LTD			1500001697				312			USD							312			CN
20241		SEASON COMPONENTS CO. LTD			1500001740				6,383			USD			1,609				4,774			CN
20245		SEMICON ELECTRONICS LTD.			1500001617				1,302			USD							1,302			NA
20245		SEMICON ELECTRONICS LTD.			1500001716				1,302			USD							1,302			NA
20248		SHIN MUN CO LTD			1500001773				8,393			USD							8,393			CN
20248		SHIN MUN CO LTD			1500001797				18,074			USD							18,074			CN
20248		SHIN MUN CO LTD			1500001530				311			USD							311			CN

  

 

Schedule 9
Prepaid Expenses
Supplier Payments - USD
	Total USD	860,973

 

								Wire
Vendor				Clearing				Payment
No		Vendor Name		Document				Amount				Currency		Cleared				Open balance				Locale
20248		SHIN MUN CO LTD			1500001542				9,113			USD							9,113			CN
20248		SHIN MUN CO LTD			1500001571				1,370			USD							1,370			CN
20248		SHIN MUN CO LTD			1500001601				15,482			USD							15,482			CN
20248		SHIN MUN CO LTD			1500001611				16,922			USD							16,922			CN
20248		SHIN MUN CO LTD			1500001643				3,470			USD							3,470			CN
20248		SHIN MUN CO LTD			1500001650				6,635			USD							6,635			CN
20248		SHIN MUN CO LTD			1500001680				11,397			USD							11,397			CN
20248		SHIN MUN CO LTD			1500001685				406			USD							406			CN
20248		SHIN MUN CO LTD			1500001709				5,354			USD							5,354			CN
20248		SHIN MUN CO LTD			1500001715				4,134			USD							4,134			CN
20248		SHIN MUN CO LTD			1500001726				4,134			USD							4,134			CN
20248		SHIN MUN CO LTD			1500001765				17,242			USD							17,242			CN
20259		SHINY SPACE ENTERPRISE CO., LT			1500001734				684			USD			684				-			CN
20258		SP INTERNATIONAL			1500001800				1,284			USD							1,284			NA
20271		TECH-ETCH INC			1500001655				630			USD							630			NA
20278		TESTCO INC			1500001628				2,754			USD			2,275				479			NA
20278		TESTCO INC			1500001704				107			USD							107			NA
20036		THE BERGQUIST COMPANY			1500001837				312			USD							312			NA
20036		THE BERGQUIST COMPANY			1500001626				2,052			USD			1,904				148			NA
20036		THE BERGQUIST COMPANY			1500001710				463			USD							463			NA
20036		THE BERGQUIST COMPANY			1500001711				463			USD							463			NA
20286		TRI-POWER ENGINEERING CO.LTD			1500001604				2,523			USD							2,523			CN
20288		TTI,INC.			1500001777				178			USD			178				-			NA
20288		TTI,INC.			1500001657				5,629			USD			5,629				-			NA
20288		TTI,INC.			1500001719				653			USD							653			NA
20288		TTI,INC.			1500001732				2,292			USD			2,265				27			NA
20288		TTI,INC.			1500001753				397			USD			397				-			NA
20288		TTI,INC.			1500001759				9,971			USD			819				9,151			NA
20296		UNIROYAL ELECTRONICS			1500001652				347			USD			147				200			CN
20293		UNITED CHEMI-CON, INC.			1500001785				4,249			USD							4,249			NA
20293		UNITED CHEMI-CON, INC.			1500001821				1,240			USD							1,240			NA
20293		UNITED CHEMI-CON, INC.			1500001536				9,436			USD			8,116				1,320			NA
20293		UNITED CHEMI-CON, INC.			1500001693				10,972			USD			2,555				8,417			NA
20305		VISHAY AMERICAS, INC.,			1500001801				4,794			USD							4,794			NA
20305		VISHAY AMERICAS, INC.,			1500001843				693			USD							693			NA
20305		VISHAY AMERICAS, INC.,			1500001524				2,460			USD							2,460			NA
20305		VISHAY AMERICAS, INC.,			1500001572				790			USD							790			NA
20305		VISHAY AMERICAS, INC.,			1500001619				4,365			USD							4,365			NA
20305		VISHAY AMERICAS, INC.,			1500001629				13,101			USD							13,101			NA
20305		VISHAY AMERICAS, INC.,			1500001674				449			USD							449			NA
20305		VISHAY AMERICAS, INC.,			1500001689				804			USD							804			NA
20305		VISHAY AMERICAS, INC.,			1500001696				11,862			USD							11,862			NA
20305		VISHAY AMERICAS, INC.,			1500001727				1,356			USD							1,356			NA
20305		VISHAY AMERICAS, INC.,			1500001767				954			USD							954			NA
20305		VISHAY AMERICAS, INC.,			1500001849				1,880			USD							1,880			NA
20308		WATT SHENZHEN ELECTRONICS			1500001737				47,190			USD							47,190			CN
20309		WEAL LAM PARTS & TOOLS LTD.			1500001644				2,460			USD							2,460			CN
20319		WURTH ELECTRONICS MIDCOM			1500001630				3,091			USD			141				2,950			NA
20451		YS Tech USA			1500001731				11,970			USD							11,970			NA

 

 

Schedule 9

Prepaid Expenses

Supplier Deposits

 

Vendor								Wire						Open
No		Vendor Name		Clearing Document				Payment				Currency		balance
20029		AVNET ELECTRONICS			1500001787			$	71,000			USD		$	71,000
20345		OTX LOGISTICS CANADA LIMITE			1500001660			$	5,000			USD		$	5,000
10271		PUROLATOR COURIER LTD.			1500001501			$	500			CAD		$	500
10380		YUSEN AIR & SEA SERVICE			1500001470			$	10,000			CAD		$	10,000
20029		AVNET ELECTRONICS			1500001566			$	15,000			USD		$	15,000
10450		FEDERAL EXPRESS CANADA			1500001463			$	15,000			USD		$	15,000
20043		SCHENKER			1500001460			$	5,000			USD		$	5,000
		Glen Corporation			Rent - 401 Magnetic Drive							CAD		$	8,690
		Enbridge										CAD		$	500
		UPS										CAD		$	1,500
		PUROLATOR COURIER LTD.										CAD		$	500

  

 

SCHEDULE 10

ROYALTY PAYMENT CUSTOMERS [SECTION 2.6.2.3]

 

 

SCHEDULE 10

ROYALTY PAYMENT CUSTOMERS

 

Customer Account		Account vs. Product		Product Number
NEW Products <1 year from Release
NAUTEL LTD		Account
EVERTZ MICROSYSTEMS		Account
SONUS NETWORKS, INC		Account
SONUS NETWORKS, INC		Account
ZOLL MEDICAL CORPORATION		Account
EVERTZ MICROSYSTEMS		Account
VERACITY UK LTD		Account
VERACITY UK LTD		Account
ALCATEL- LUCENT 1507/1508R		Product			1507, 1508R
RVR Electronica (Italy)		Account
Mellanox		Account
Design in / Submitted for Testing
KATHREIN-Werke KG		Account
Asis Pro		Account
NETSCOUT /ONPATH TECHNOLOGIES		Account
Comtel Electronics Israel		Account
Miranda/GV		Account
Extreme Networks		Product			1582
Extreme Networks		Product			1525
A-10		Account
Arris		Account

 

NOTES

Account - to include all revenue associated with the Corporate Account

Product - to include only revenue associated with the specific product (or a derivative of that product)

  

 

 

SCHEDULE 11

KERP PAYMENTS SCHEDULE [SECTION 1.1.13.2]

 

Schedule 11

KERP Payment Schedule

CAD

 

KERP PAYMENTS

 

Name		Jan 9, 2015 [paid by Tectrol]				Mar 27, 2015				May 29, 2015				Sept 30, 2015				Total				Post Closing Amount [paid by CUI]
Titto Mathew			2,000				2,000				4,000				7,000				15,000				13,000
Florian Tiganila			7,500				10,000				12,500				20,000				50,000				42,500
Abrahim Noorestani			3,000				4,000				5,000				8,000				20,000				17,000
Bella Lionti			5,250				7,000				8,750				14,000				35,000				29,750
Steve Mallinson			3,000				4,000				5,000				8,000				20,000				17,000
Rick Leung			3,750				5,000				6,250				10,000				25,000				21,250
Paul Ruggier			4,500				6,000				7,500				12,000				30,000				25,500
Murray Silverman			6,000				8,000				10,000				16,000				40,000				34,000
Chris Slemensky			2,250				3,000				3,750				6,000				15,000				12,750
			37,250				49,000				62,750				101,000				250,000				212,750

 

Estimated Withholding Taxes on Post-Closing KERP

 

		CPP			1			10,500
		EI			2			5,600
		EHT			3			4,100
		Subtotal						20,200
		Shared 50/50%			4			(10,100)
		Total Taxes						10,100
TOTAL KERP + SHARE OF TAXES		Total KERP + taxes						222,850

 

NOTES:

1	4.95% of payroll up to $53,600
2	2.632% of payroll up to $49,500
3	1.95% of payroll (no max)
4	CUI/Tectrol agreed to share these costs equally

  

  

EXHIBIT A

FORM OF APPROVAL AND VESTING ORDER

 

Court File No. 31-1929721
Estate File No. 31-1929721

 

ONTARIO

SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)
IN BANKRUPTCY AND INSOLVENCY

 

 

THE HONOURABLE	)	WEDNESDAY, THE 3RD DAY
	)
____ JUSTICE ___________________________________	)	OF MARCH, 2015

 

 

IN THE MATTER OF THE NOTICE OF INTENTION
TO MAKE A PROPOSAL OF TECTROL INC.

 

APPROVAL AND VESTING ORDER

 

THIS MOTION, made by Tectrol Inc. (the “Debtor”) for an order approving the sale transaction (the “Transaction”) contemplated by an agreement of purchase and sale (the “Sale Agreement”) between the Debtor and CUI-Canada, Inc. (the “Purchaser”) dated February 23, 2015 and appended to the Third Report of Duff & Phelps Canada Restructuring Inc., the trustee appointed in re the proposal of the Debtor (the “Proposal Trustee”), dated <*>, 2015 (the “Third Report”), and vesting in the Purchaser the Debtor’s right, title and interest in and to the assets described in the Sale Agreement (the “Purchased Assets”), was heard this day at 330 University Avenue, Toronto, Ontario.

 

ON READING the Third Report and the Affidavit of Richard Gelb sworn on February 24, 2015 (the “Gelb Affidavit”), and on hearing the submissions of counsel for the Debtor, the Proposal Trustee and the Purchaser, no one appearing for any other person on the service list, although properly served as appears from the affidavit of Kyle B. Plunkett sworn February 24, 2015, filed.

 

 

1.          THIS COURT ORDERS AND DECLARES that the Transaction is hereby approved, and the execution of the Sale Agreement by the Debtor is hereby authorized and approved, with such minor amendments as the Debtor may deem necessary. The Debtor is hereby authorized and directed to take such additional steps and execute such additional documents as may be necessary or desirable for the completion of the Transaction and for the conveyance of the Purchased Assets to the Purchaser.

 

2.          THIS COURT ORDERS AND DECLARES that upon the delivery of a Proposal Trustee’s certificate to the Purchaser substantially in the form attached as Schedule “A” hereto (the “Proposal Trustee’s Certificate”), all of the Debtor’s right, title and interest in and to the Purchased Assets described in the Sale Agreement and listed on Schedule “B” hereto shall vest absolutely in the Purchaser, free and clear of and from any and all security interests (whether contractual, statutory, or otherwise), hypothecs, mortgages, trusts or deemed trusts (whether contractual, statutory, or otherwise), liens, executions, levies, charges, or other financial or monetary claims, whether or not they have attached or been perfected, registered or filed and whether secured, unsecured or otherwise (collectively, the “Claims”) including, without limiting the generality of the foregoing: (i) all charges, security interests or claims evidenced by registrations pursuant to the Personal Property Security Act (Ontario) or any other personal property registry system; and (ii) those claims listed on Schedule “C” hereto (all of which are collectively referred to as the “Encumbrances”, which term shall not include the permitted encumbrances, easements and restrictive covenants listed on Schedule “D” hereto) and, for great certainty, this Court orders that all of the Encumbrances affecting or relating to the Purchased Assets are hereby expunged and discharged as against the Purchased Assets.

 

3.          THIS COURT ORDERS that for the purposes of determining the nature and priority of Claims, the net proceeds from the sale of the Purchased Assets shall stand in the place and stead of the Purchased Assets, and that from and after the delivery of the Proposal Trustee’s Certificate all Claims and Encumbrances shall attach to the net proceeds from the sale of the Purchased Assets with the same priority as they had with respect to the Purchased Assets immediately prior to the sale, as if the Purchased Assets had not been sold and remained in the possession or control of the person having that possession or control immediately prior to the sale.

 

  

4.          THIS COURT ORDERS AND DIRECTS the Proposal Trustee to file with the Court a copy of the Proposal Trustee’s Certificate, forthwith after delivery thereof.

 

5.          THIS COURT ORDERS that, pursuant to clause 7(3)(c) of the Canada Personal Information Protection and Electronic Documents Act, the Debtor is authorized and permitted to disclose and transfer to the Purchaser all human resources and payroll information in the Company’s records pertaining to the Debtor’s past and current employees. The Purchaser shall maintain and protect the privacy of such information and shall be entitled to use the personal information provided to it in a manner which is in all material respects identical to the prior use of such information by the Debtor.

 

6.          THIS COURT ORDERS that, notwithstanding:

 

(a)          the pendency of these proceedings;

 

(b)          any applications for a bankruptcy order now or hereafter issued pursuant to the Bankruptcy and Insolvency Act (Canada) in respect of the Debtor and any bankruptcy order issued pursuant to any such applications; and

 

(c)          any assignment in bankruptcy made in respect of the Debtor;

 

the vesting of the Purchased Assets in the Purchaser pursuant to this Order shall be binding on any trustee in bankruptcy that may be appointed in respect of the Debtor and shall not be void or voidable by creditors of the Debtor, nor shall it constitute nor be deemed to be a fraudulent preference, assignment, fraudulent conveyance, transfer at undervalue, or other reviewable transaction under the Bankruptcy and Insolvency Act (Canada) or any other applicable federal or provincial legislation, nor shall it constitute oppressive or unfairly prejudicial conduct pursuant to any applicable federal or provincial legislation.

 

7.          THIS COURT ORDERS AND DECLARES that the Transaction is exempt from the application of the Bulk Sales Act (Ontario).

 

  

8.          THIS COURT ORDERS that, notwithstanding the provisions of subsection 171(3) of the Business Corporations Act (Ontario) (the “OBCA”), the Debtor be and is hereby authorized and directed, upon filing of the Proposal Trustee’s Certificate, to complete, execute and file articles of amendment for the sole purpose of changing the corporate name of the Debtor to 252862 Ontario Inc. (and such amendment shall be deemed to have been duly authorized by Section 168 of the OBCA without any shareholder or director resolution approving such amendment being required), and if the Debtor fails to comply, to authorize and order the Proposal Trustee to do so (such articles of amendment to be deemed to have been signed by a director or an officer of the Debtor and executed in accordance with the OBCA when so signed by the Proposal Trustee as directed by this Court), and this Court hereby directs the Director (as defined in the OBCA) to endorse thereon a certificate of amendment upon receipt from the Debtor of two duplicate originals of such articles of amendment together with the prescribed fees and any other required documents under the OBCA (which the Proposal Trustee be and is hereby authorized and directed to complete, execute and file for and on behalf of the Debtor and any officer and director of the Debtor, if and as required) except for any such documents as have been dispensed or otherwise dealt with pursuant to the deeming provisions contained herein.

 

9.          THIS COURT ORDERS that the Purchaser shall be authorized to take all steps as may be necessary to effect the discharge of the Encumbrances.

 

10.         THIS COURT ORDERS that the Confidential Appendices ● and ● of the Third Report be kept confidential and under seal until the earlier of (a) Closing; or (b) further Order of this Court.

 

11.         THIS COURT ORDERS that Schedule “11” to the Sale Agreement shall be and is hereby sealed pending further Order of this Court.

 

12.         THIS COURT HEREBY REQUESTS the aid and recognition of any court, tribunal, regulatory or administrative body having jurisdiction in Canada or in the United States to give effect to this Order and to assist the Debtor and the Proposal Trustee and its agents in carrying out the terms of this Order. All courts, tribunals, regulatory and administrative bodies are hereby respectfully requested to make such orders and to provide such assistance to the Debtor and the Proposal Trustee, as an officer of this Court, as may be necessary or desirable to give effect to this Order or to assist the Debtor and the Proposal Trustee and its agents in carrying out the terms of this Order.

 

 

  

SCHEDULE A

 

FORM OF PROPOSAL TRUSTEE’S CERTIFICATE

 

Court File No. 31-1929721
Estate File No. 31-1929721

 

ONTARIO

SUPERIOR COURT OF JUSTICE

(COMMERCIAL LIST)
IN BANKRUPTCY AND INSOLVENCY

 

IN THE MATTER OF THE NOTICE OF INTENTION
TO MAKE A PROPOSAL OF TECTROL INC.

 

PROPOSAL TRUSTEE’S CERTIFICATE

 

RECITALS

 

A.       Pursuant to a Notice of Intention to Make a Proposal dated November 6, 2014, Duff & Phelps Canada Restructuring Inc. was appointed trustee in re the proposal of Tectrol Inc. (the “Proposal Trustee”).

 

B.        Pursuant to an Order of the Court dated March 3, 2015, the Court approved the agreement of purchase and sale made as of February 23, 2015 (the “Sale Agreement”) between the Debtor and CUI-Canada, Inc. (the “Purchaser”), and provided for the vesting in the Purchaser of the Debtor’s right, title and interest in and to the Purchased Assets, which vesting is to be effective with respect to the Purchased Assets upon the delivery by the Proposal Trustee to the Purchaser of a certificate confirming (i) the payment by the Purchaser of the Purchase Price for the Purchased Assets; (ii) that the conditions to Closing as set out in Article 5 of the Sale Agreement have been satisfied or waived by the Debtor and the Purchaser; and (iii) the Transaction has been completed to the satisfaction of the Debtor and the Proposal Trustee.

 

C.       Unless otherwise indicated herein, terms with initial capitals have the meanings set out in the Sale Agreement.

 

 

 

THE TRUSTEE CERTIFIES the following:

 

1.       The Purchaser has paid and the Debtor has received the Purchase Price for the Purchased Assets payable on the Closing Date pursuant to the Sale Agreement.

 

2.       The conditions to Closing as set out in Article 5 of the Sale Agreement have been satisfied or waived by the Debtor and the Purchaser.

 

3.       The Transaction has been completed to the satisfaction of the Debtor and the Proposal Trustee.

 

4.       This Certificate was delivered by the Proposal Trustee at <time> on March <*>, 2015.

 

 

 

	DUFF & PHELPS CANADA RESTRUCTURING INC., solely in its capacity as the Trustee acting in re the proposal of Tectrol Inc.
	Per:
		Name:
		Title:

 

 

SCHEDULE B
PURCHASED ASSETS

 

 

SCHEDULE C
ENCUMBRANCES

 

1.

General Security Agreement in favour of Tectrol Technology Inc. dated October 13, 1995 and registered pursuant to the Personal Property Security Act on November 2, 2005 as Instrument No. 2005 1102 1550 1862 8970.

 

2.

General Security Agreement in favour of the Royal Bank of Canada dated September 3, 2013 and registered pursuant to the Personal Property Security Act on January 2, 2008 as Instrument No. 2008 0102 1445 1530 6667 and assigned to Tectrol Technology Inc. on November 5, 2014 and registered on November 24, 2014 as Instrument No. 2014 1124 1439 1862 5691.

 

3.

Registration in favour of EZ Lift Toronto Ltd. registered pursuant to the Personal Property Security Act on November 14, 2014 as Instrument No. 2014 1114 1116 1793 0337.

 

 

SCHEDULE D
PERMITTED ENCUMBRANCES

 

(unaffected by the Vesting Order)

 

1.

Lease(s) in favour of Ricoh Toronto East registered pursuant to the Personal Property Security Act on March 26, 2012 as Instrument No. 2012 0326 1944 1531 2861.

  

 

EXHIBIT B

FORM OF BILL OF SALE RE PURCHASED ASSETS

 

 

BILL OF SALE

 

THIS INDENTURE made the _______ day of March, 2015.

 

BETWEEN:

 

TECTROL INC., a corporation incorporated under the laws of Ontario,
(the “Seller”)

 

- and -

 

CUI-CANADA, INC., a corporation incorporated under the laws of the Provence of Nova Scotia
(the “Buyer”)

 

WHEREAS:

 

A.

On November 6, 2014, the Seller commenced insolvency proceedings by filing a Notice of Intention to Make a Proposal (“NOI”) pursuant to the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, as amended. Duff & Phelps Canada Restructuring Inc. was appointed as the trustee in re the proposal of Tectrol Inc. (the “Proposal Trustee”) under the NOI.

 

B.

The Seller and the Buyer entered into an Asset Purchase Agreement dated February 23, 2015 (the “APA”), which provides for the sale by the Seller of the Purchased Assets (as defined in the APA) to the Buyer, subject to Court approval.

 

C.

By an Approval and Vesting Order dated March 3, 2015 of <*> Justice <*>, the terms and provisions of the APA have been approved, and vesting the Purchased Assets in the Buyer effective on Closing.

 

NOW THEREFORE THIS INDENTURE WITNESSES that in consideration of the sum of Five Million Five Hundred Thousand Dollars (USD$5,500,000.00) of lawful money of the United States of America, and other good and valuable consideration paid by the Buyer to the Seller, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

1.

Unless otherwise specifically defined in this Indenture, any capitalized terms used in this Indenture shall have the meanings given to them in the APA.

 

2.

The Seller hereby grants, bargains, conveys, sells, assigns, transfers and sets over to the Buyer all of the right, title, interest and benefit, if any, of the Seller in and to the Purchased Assets including as described in Schedule “A” hereto.

 

3.

Each of the parties hereto will, from time to time and at the reasonable request and expense of the party making such request, do or take or cause to be done or taken such acts or actions, and will execute and deliver to the other or cause to be executed and delivered to the other such further instruments, documents and assurances, as may be reasonably necessary to give effect to this Indenture.

 

 

4.

To the extent that there is a conflict between the terms and provisions of this Indenture and the terms and provisions of the APA, the terms and provisions of the APA shall govern. In the event of any conflict between the terms and provisions of this Indenture or the terms and provisions of the APA and the terms and provisions of the Approval and Vesting Order, the terms and provisions of the Approval and Vesting Order shall govern.

 

5.

This Indenture will be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.

 

6.

This Indenture and all of its provisions will enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

 

7.

This Indenture may be executed in counterparts, and acceptance of this Indenture may be provided by facsimile transmission or email transmission in PDF format and, upon such execution and transmission, this Indenture shall be binding on the parties hereto with the same force and effect as if originally executed.

 

IN WITNESS WHEREOF the parties have executed this Indenture on the date first above written.

 

	TECTROL INC.
	Per:		c/s
		Name:  Richard Gelb
		Title:   President
	CUI-CANADA, INC.
	Per:		c/s
		Name:  William J. Clough
		Title:   CEO

  

 

Schedule A

 

Equipment

Inventory

Assumed Contracts

Intellectual Property

Goodwill of the Business