EXHIBIT 10.55
SIDE AGREEMENT REGARDING PROLINE AUDIO VISUAL RENTALS, INC.
This Side Agreement regarding Proline Audio Visual Rentals, Inc. (the "Side
Agreement") is entered this 8th day of December 1998 (the "Effective Date") and
is by and among Intellisys Group, Inc. ("IGI"), a Delaware corporation, and
Proline Industries, Inc. ("Proline") on the one hand, and Xxxx Xxxx and Xxxxx
Xxxx, each of whom is a resident of the State of Washington, and Proline Audio
Visual Rentals, Inc., a Washington corporation ("PAV"), on the other hand. IGI
and Proline are sometimes referred to herein as the "IGI Parties," and Messrs.
Xxxx and Xxxx and PAV are sometimes referred to herein as the "PAV Parties."
RECITALS
A. Pursuant to the terms of a Stock Purchase Agreement dated as of
December 8, 1998, by and among IGI as "Buyer", Proline as the "Company" and
Messrs. Xxxx and Xxxx as the "Sellers" (the "Stock Purchase Agreement"), IGI is
acquiring all of the issued and outstanding stock of Proline from Messrs. Xxxx
and Xxxx (the "Acquisition").
B. During their tenure as owners of Proline, Messrs. Xxxx and Xxxx
extended loans to Proline with the principal balance and accrued interest owing
to each as of the Effective Date in the amount of $146,956.34 and $143,17.02,
respectively (the "Stockholder Loans").
C. As part of the Acquisition, IGI has agreed to repay the Stockholder
Loans concurrently with the consummation of the Acquisition.
D. Messrs. Xxxx and Xxxx are also the sole owners of PAV. PAV has offices
in, among other locations, San Xxxx and Sacramento, California (the "California
Facilities").
E. In deciding to acquire Proline from Messrs. Xxxx and Xxxx, IGI
believed that the real property leases for the California Facilities were the
obligation of PAV, not Proline. In the course of completing its due diligence on
the acquisition of Proline, however, IGI determined that Proline was the lessee
of the California Facilities, not PAV.
F. In an effort to resolve this miscommunication between IGI, Proline and
the Sellers regarding the responsibility for the California Facilities, the IGI
Parties and the PAV Parties have agreed to allocate financial responsibility
among them for the California Facilities as set forth in this Side Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein, the parties hereto hereby agree as follows:
ARTICLE I.
REPAYMENT OF STOCKHOLDER LOANS
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1.1 On the Effective Date, Proline shall repay the Stockholder Loans
in the amount of $146,956.34 to Xx. Xxxx and $143,177.02 to Xx. Xxxx. These
payments shall be made by wire transfer or other immediately available funds.
1.2 Messrs. Xxxx and Xxxx acknowledge and agree that Proline's
payment of the amounts set forth in Section 1.1 above shall constitute full and
final payment of their Stockholder Loans.
1.3 On the Effective Date and as a condition to the repayment of the
Stockholder Loans, Messrs. Xxxx and Xxxx shall deliver to Proline the originals
of the promissory notes evidencing their Stockholder Loans marked "Paid in
Full."
ARTICLE II.
RESPONSIBILITY FOR THE CALIFORNIA FACILITY LEASES
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2.1 Upon the execution of the Stock Purchase Agreement and completion
of IGI's acquisition of Proline and assuming the respective landlords consent to
Proline's continuing as a tenant of the respective California Facilities:
(i) Proline agrees to remain solely responsible for the San Xxxx
lease and to be fully and completely responsible for all payments due
thereunder; and
(ii) Proline agrees to remain as the lessee under the Sacramento
lease for the space located at 0000 Xxxxxxx Xxxx, Xxxxx X, Xxxxxxxxxx,
Xxxxxxxxxx 00000, but PAV agrees to reimburse Proline for one-half the monthly
rent through June 30, 2000, the date on which the lease expires or such earlier
termination of the lease.
2.2 Sacramento PAV shall pay its portion of the rent for the
Sacramento lease directly to Proline no later than the first business day of the
month for which the rental payment for the Sacramento lease is due.
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ARTICLE III.
MISCELLANEOUS
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3.1 The parties incorporate herein by this reference the following
provisions from the Stock Purchase Agreement as though fully set forth herein:
Sections 8(d), 8(f)-(m) and the dispute resolution mechanism described in
Section 9.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed on the date first above written.
INTELLISYS GROUP, INC. PROLINE INDUSTRIES, INC.
By: /s/ XXXXXX X. XXXXXX By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
Title: Chairman of the Board Title: Chief Executive Officer
XXXX XXXX PROLINE AUDIO VISUAL RENTALS. INC.
/s/ Xxxx Xxxx By: /s/ Xxxx Xxxx
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Xxxx Xxxx Name: Xxxx Xxxx
Title: ____________________________
XXXXX XXXX
/s/ Xxxxx Xxxx
_________________________________
Xxxxx Xxxx
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