exv10w2





Exhibit 10.2



OPTION AGREEMENT




     This Option Agreement (“Agreement”) is made and entered into effective May 1, 2010 (“Effective
Date”) by and between 9621 Coors LLC, a New Mexico limited liability company whose address is 9621
Coors NW, Albuquerque, New Mexico 87114 (“Purchaser”) and Sparton Technology, Inc., a New Mexico
corporation whose address is 425 N. Martingale Road, Schaumberg, Illinois 60173 (“Seller”).



     RECITALS



     A. Seller is the owner of the real property consisting of the Non-Use Area depicted on
attached Exhibit “A-1”, a .23 acre parcel (the “Off Site Parcel”) and a .3034 acre parcel (“Tract
B-2”) located at or near Coors Blvd. NW, the Off Site Parcel and Tract B-2 being more specifically
described on Exhibit “A” hereto, together with any interest of Seller in all appurtenances thereto
(the “Property”). The Non-Use Area, the Off Site Parcel and Tract B-2 are sometimes referred to
collectively as the “Parcels” or individually as a “Parcel.”



     B. Purchaser wishes to obtain an option to purchase some or all of the Parcels from Seller,
and Seller wishes to grant to Purchaser an option to purchase some or all of the Parcels pursuant
to the terms of this Agreement.



     C. Albuquerque Motor Company, Inc., a New Mexico corporation (“Guarantor”) wishes to guarantee
Purchaser’s obligations under the Agreement.



     D. Seller and Guarantor are parties to a Lease dated October 13, 1999, (“Initial Lease”) as
amended by First Amendment to Lease dated July 12, 2005 (“First Amendment”). Seller and Purchaser
have extended the Lease and First Amendment pursuant to that certain Lease Extension and Amendment
Agreement (“Lease Extension”) dated effective May 1, 2010. Together the Lease, First Amendment and
Lease Extension are referred to as the “Lease.” The Lease pertains to the 12 acre parcel depicted
on Exhibit “A-1”, the Off Site Parcel and Tract B-2 (“Premises”).



     AGREEMENT



     1. Incorporation of Recitals. The foregoing recitals are incorporated by reference
and made a part of this Agreement.



     2. Grant of Option; Option Term.



          2.1 Grant of Purchase Option. Seller grants to Purchaser the exclusive option
to purchase the Property or any Parcel of the Property during the Option Term as defined in
Section 2.3 below subject to the conditions and terms of this Agreement (the “Purchase
Option”).







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          2.2 Consideration for Purchase Option. On the Effective Date, Purchaser shall
deliver to Seller One Dollar ($1.00) representing the consideration for the Purchase
Option, which consideration shall be non-refundable.




          2.3 Option Term. The Option Term shall commence on the date of full payment
of all rent obligations set forth in § 3.1 of the Lease Extension and shall expire at the
same time that the Lease expires or terminates (“Option Term”).




          2.4 Conditions Precedent to Exercise of Purchase Option. Purchaser shall have
the right to exercise the Purchase Option if the following conditions precedent have been
fulfilled on or before such exercise:





     2.4.1 Purchaser provides to Seller a written notice(s) of exercise of the
Purchase Option as to any or all Parcels (“Notice of Exercise”) no less that sixty
(60) days prior to expiration of the Option Term;




     2.4.2 Purchaser is not in default of any of the terms of this Agreement or the
Lease, and all rent obligations set forth under § 3.1 of the Lease Extension have
been paid in full.



          Upon Purchaser’s proper exercise of the Purchase Option, the parties shall proceed to
the Closing as described in Section 2.6 below (“Closing”).




          2.5 Purchase Price of Property. The purchase price (“Purchase Price”) for
the Property to be paid at the Closing shall be One Dollar ($1.00) for each Parcel of the
Property.




          The Purchase Price shall be increased or decreased for Closing adjustments in
accordance with the Agreement.




          2.6 Closing; Payment of Purchase Price and Closing Costs. The Closing shall
occur within sixty (60) days of the date the Notice of Exercise was provided to Seller in
accordance with the terms of this Agreement at a time and place determined by agreement of
the parties. In the absence of agreement, the Closing shall occur on the 60th
day after the Notice of Exercise at 10:00 a.m. at the offices of the Title Company. The
Purchase Price for each Parcel being closed shall be paid in full at Closing. Seller will
pay the cost of a basic Title Policy for the Property pursuant to the Title Commitment
described in Section 3.3 below in the minimum amount of Ten Thousand Dollars ($10,000)
subject to the matters described in Section 3.3 below. Closing costs are further described
in Section 3.4 below.




          2.7 Termination. Upon expiration or termination of the Lease for any reason
or in the event Purchaser fails to properly provide Notice of Exercise of the Purchase
Option or fails to close on the Purchase Option within the time required, Purchaser’s right
to purchase the Property shall terminate automatically, and Seller shall retain all amounts
received by Seller under this Agreement free and




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clear of any claim or interest of Purchaser. Notwithstanding such termination,
Purchaser’s indemnification and related obligations as contained herein shall survive the
termination, and upon Seller’s request, Purchaser shall deliver to Seller copies of all
reports or documents in Purchaser’s possession pertaining to the Property.





3. Due Diligence and Property Condition.



     3.1 AS IS Sale. Purchaser acknowledges that all or a portion of the Property
is subject to an EPA Consent Decree, Case No. CIV 97 0206 dated March 3, 2000, as it may be
modified from time to time (“EPA Consent Decree”), and that to the extent activity under
the EPA Consent Decree continues at the Property or any portion of the Premises, Seller and
its agents, contractors and employees and applicable governmental authorities shall have
free and unencumbered access to the Property and Premises at all times for all purposes
related to the EPA Consent Decree and any clean up related thereto. Purchaser acknowledges
that it is familiar with the Property and at closing, will be accepting the Property “AS
IS”, “WHERE IS” and “WITH ALL FAULTS”, subject only to any ongoing obligations of Seller
related to the EPA Consent Decree, and that the Surviving Agreements described in the Lease
Extension shall continue in full force and effect to the extent that activity under the EPA
Consent Decree continues.




     3.2 Purchaser’s Investigation. Subject to the confidentiality provisions set
forth below, Seller shall provide to Purchaser and its agents on the Effective Date, copies
of any plans, blueprints, books and records in Seller’s possession concerning the physical
condition of the Property, and access to conduct physical inspections of the Property.
Provided, such inspections shall not disturb or adversely affect the EPA clean up
activities described above, and Purchaser shall promptly restore the Property to the same
condition existing before such inspections. Purchaser shall defend, indemnify and hold
Seller harmless from any and all liability arising out of any activities of Purchaser or
its agents at the Property, before or after closing, including any further environmental
contamination of the Property or damage to monitoring wells or damage to the environmental
condition of the Property caused or exacerbated by Purchaser or its agents, contractors,
employees, customers, guests, transferees, successors or assigns. Purchaser shall not
conduct soil borings at the Property without the prior written consent of Seller and
applicable governmental authorities.




     3.3 Title Commitment. Seller has provided Purchaser with a title commitment
for the Property from Stewart Title Company (“Title Company”) with standard exceptions
(except Seller will provide a standard title affidavit at Closing describing any matters
known to Seller) (“Title Commitment”). Purchaser acknowledges that Purchaser is satisfied
with the condition of title to the Property and that Seller is responsible for nothing in
the state of title as disclosed in the Title Commitment and thereafter, except those liens,
encumbrances or restrictions caused or created by Seller or Seller’s agents without
Purchaser’s consent, approval or




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permission. Purchaser will accept title to the Property subject to (a) those matters
set forth in the Title Commitment, (b) taxes, assessments and other obligations that are
Purchaser’s responsibility under the Lease, (c) the EPA Consent Decree, (d) the Surviving
Agreements described in the Lease, (e) acts or omissions of persons other than Seller or
Seller’s agents arising after the date of the Title Commitment. Purchaser shall be
responsible for compliance with all Title Policy requirements pertaining to Purchaser as
Grantee and any requirements of Purchaser’s lender, if any.




     3.4 Allocation of Closing Responsibilities. To the extent the current legal
description of a Parcel is required to be modified at the time of conveyance by virtue of
applicable law, regulations or ordinances, Seller shall bear the cost of such modifications
and provide a survey of such Parcel. The parties shall cooperate in any subdivision
required by applicable law or ordinance and shall share equally the cost of any required
subdivision. There shall be no proration of taxes or utilities as Purchaser is responsible
for such costs under the Lease. Purchaser shall be responsible for all other closing costs
involved in the conveyance, including but not limited to Purchaser’s attorney fees,
recording fees, documentary stamps, title company closing fees and other closing costs
typically required under then current law and practice. Notwithstanding the foregoing,
Seller shall pay, and Purchaser shall not be responsible for Seller’s attorney’s fees, the
cost of the basic Title Policy, the survey and legal description required for subdivision
of a Parcel, and half the cost of any required subdivision. The parties shall execute all
other documents reasonably required to effect the conveyance, including any disclosure,
certificate, resolution, transfer or other documents required by then applicable law or
practice.




     3.5 End of Investigation Period. Purchaser will have thirty (30) days after
the Effective Date in which to investigate all matters affecting the Property, including
records, property title matters, environmental conditions, soils conditions, engineering
matters, zoning, and survey matters. If any of these matters are not acceptable to
Purchaser and Purchaser so notifies Seller in writing prior to the end of the thirty (30)
day period, this Agreement will terminate and the parties will have no further obligations
to each other, except for Purchaser’s indemnification obligations described above. If
Purchaser does not so notify Seller, all such objections shall be deemed to be waived.




     4. Escrow of Special Warranty Deeds. At the time of full execution of this
Agreement,, Seller shall deliver to the Escrow Agent a Special Warranty Deed (“Deed”) for each
Parcel to be held by the Escrow Agent according to the following terms:



     (a) If Purchaser properly exercises its Purchase Option as to a Parcel, the Escrow
Agent shall deliver the Deed to Purchaser at Closing upon payment of the Purchase Price and
all other amounts due from Purchaser and receipt of all Seller and Purchaser closing
documents.







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          (b) If this Agreement or the Lease is terminated, all Special Warranty Deeds then
remaining in escrow shall be returned to Seller.




     5. Representations. Both parties hereby represent their authority to execute the
Option Agreement. Seller makes no representations or warranties concerning the condition of the
Property.



     6. No Broker. Each party represents to the other that it has not engaged a real
estate broker with respect to this transaction. Each party agrees to indemnify and hold harmless
the other party from and against any and all claims, losses, damages, costs or expenses of any kind
of character arising out of or resulting from any agreement, arrangement or understanding alleged
to have been made by such party or on its behalf with any broker or finder in connection with this
Agreement or the transaction contemplated hereby.



     7. Confidentiality. In connection with this Agreement, the Seller may furnish to
Purchaser certain information, including, without limitation, certain financial and environmental
information. Purchaser hereby agrees to treat confidentially such information, and any other
information concerning the financial or environmental condition of the Property, whether furnished
before or after the date of this letter (collectively, the “Material”), not to disclose the
Material to any person except as specifically permitted in this Letter and to cause any of its
officers, employees, representatives and agents who may be given access to the Material to keep
such information confidential. For purposes hereof, the Purchaser and any person on behalf of
Purchaser who receives or reviews the Material is hereinafter referred to as the “Recipient” and
the Seller and any person who provides the Material to the Recipient is hereinafter referred to as
the “Provider”.



     The term “Material” will also include any notes, analyses, compilations, studies and other
materials prepared by the Recipient and its representatives, containing or based in whole or in
part on any information furnished by the Provider. The term “Material” does not include
information that (i) is or becomes generally available to the public other than as a result of a
disclosure by the Recipient or its representatives, (ii) was available to the Recipient on a
non-confidential basis prior to its disclosure to the Recipient by the Provider or its
representatives, or (iii) becomes available to the Recipient on a non-confidential basis from a
source other than from the Provider or its representatives; provided, however, that such source is
not known by the Recipient to be bound by a confidentiality agreement with the Provider or its
representatives or otherwise prohibited from transmitting the information to the party by a
contractual, legal or fiduciary obligation.



     Purchaser agrees that the Material will be used by it only in connection with evaluating the
transaction. Purchaser further agrees that the Material will be kept confidential by it and its
officers, employees, representatives and agents; provided, however, that (i) the Material may be
disclosed solely to Purchaser’s officers, employees, representatives and agents who are analyzing
the information contained in the Material for the purpose of evaluating the transaction (it being
understood that such officers, employees, representatives and agents shall treat such information
as confidential), and (ii) any



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disclosure of the Material may be made to which the Provider
consents in writing. Purchaser shall be responsible for any breach of this Section 7 by any person
to whom Purchaser furnishes the Material. Any persons to whom Purchaser may furnish the Material shall be
advised of this confidentiality agreement and shall agree in writing to be bound by the terms
hereof.




     Upon request, Purchaser will promptly deliver to Seller all Material and any information
relating thereto, without retaining any copies thereof.



     8. Survival. The representations, indemnifications and agreements of the parties
contained in this Agreement shall survive the Option Closing or termination of this Agreement.



     9. Time. TIME IS OF THE ESSENCE IN ALL UNDERTAKINGS, OBLIGATIONS, DUTIES, OPTIONS OR
AGREEMENTS OF THE PARTIES TO THE AGREEMENT.



     10. Notices. Any notice to be given or served upon any party to this Agreement must
be in writing and shall be deemed to have been given: (i) upon receipt in the event of personal
service by actual delivery (including by delivery service but excluding electronic communications);
(ii) the first business day after posting if deposited in the United States mail with proper
postage and dispatched by certified mail, return receipt requested or by recognized overnight
delivery service. All notices shall be given to the parties at the following addresses:



	 	 	 	 	 

	 

	 	If to Seller:
	 	Sparton Technology Inc.
	 

	 	 	 	425 N. Martingale Road
	 

	 	 	 	Schaumberg, Illinois 60173
	 

	 	 	 	Attention: Steve Korwin
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Sandra Sorini Elser
	 

	 	 	 	Bodman LLP
	 

	 	 	 	201 S. Division, Suite 400
	 

	 	 	 	Ann Arbor, Michigan 48104
	 
	 	 	 	 
	 

	 	If to Purchaser:
	 	9621 Coors LLC
	 

	 	 	 	9621 Coors NW
	 

	 	 	 	Albuquerque, New Mexico 87114
	 

	 	 	 	Attention: Bill Melloy
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Terry D. Farmer
	 

	 	 	 	Moses, Dunn, Farmer and Tuthill
	 

	 	 	 	612 First Street, N.W.
	 

	 	 	 	P.O. Box 27047
	 

	 	 	 	Albuquerque, New Mexico 87125-7047







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     Any party to this Agreement may at any time change the address for notices to that party
by giving notice in this manner.



     11. Purchaser’s Default. In the event Purchaser defaults in the performance of this
Agreement, and such default continues for ten (10) days after written notice and opportunity to
cure, then Seller shall have the right to terminate this Agreement, retain all funds paid by
Purchaser and pursue other remedies available at law or in equity.



     12. Seller’s Default. In the event that Seller defaults in the performance of this
Agreement, and such default continues for ten (10) days after written notice and opportunity to
cure, then Purchaser shall have the right to terminate this Agreement and pursue remedies available
at law or in equity.



     13. Days. Whenever this Agreement requires that something be done within a specified
period of days, that period shall (i) not include the day from which the period commences, (ii)
include the day upon which the period expires, (iii) expire at 5:00 p.m. local time on the day upon
which the period expires, and (iv) be construed to mean calendar days; provided, that if the final
day of the period falls on a Saturday, Sunday or legal holiday, the period shall extend to the
first business day thereafter.



     14. No Joint Venture. Neither party is the agent, partner or joint venture partner of
the other; neither party has any obligation to the other except as specified in this Agreement.



     15. Third Party Rights. No party other than Seller and Purchaser and their successors
and assigns, shall have any right to enforce or rely upon this Agreement, which is binding upon and
made solely for the benefit of Seller and Purchaser, and their respective successors or assigns,
and not for the benefit of any other party.



     16. Severability. If one or more of the provisions contained in this Agreement shall
for any reason be held to be invalid, illegal or unenforceable in any respect, that invalidity,
illegality or unenforceability shall not affect any other provision of this Agreement, and this
Agreement shall be construed as if the invalid, illegal or unenforceable provision had never been
contained within the body of this Agreement.



     17. Entire Agreement. This Agreement embodies the entire understanding between the
parties with respect to the transaction contemplated herein. All prior or contemporaneous
Agreements, understandings, representations, warranties and statements, oral or written, are
superseded by and merged into this Agreement. Neither this Agreement nor any of its provisions may
be waived, modified or amended except by an instrument in writing signed by the party against which
enforcement is sought, and then only to the extent set forth in that instrument.



     18. Governing Law. This Agreement shall be governed by and construed in accordance
with the provisions of the laws of the State of New Mexico.



     19. Assignment; Successors and Assigns. Seller shall have the right to assign this
Agreement or Seller’s interest in the Property. Purchaser shall not sell, transfer or



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assign this Agreement or any interest in the Property without Seller’s prior written consent. Except as
provided in the preceding sentences, this Agreement shall be binding upon, and its benefits shall
inure to, the parties hereto and their respective successors and assigns.




     20. Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and all of which shall constitute one Option Agreement. The
signature of any party to any counterpart shall be deemed to be a signature to, and may be appended
to, any other counterpart.



     21. Limits on Indemnification. Notwithstanding any other term or condition of the
Agreement, including as it has been or may be from time to time amended, or any related documents,
to the extent, if at all, that any provision requiring one party to indemnify, hold harmless,
insure or defend another party (including such other party’s employees or agents) contained in the
Agreement is found to be within the scope of NMSA 1978, § 56-7-1 (2005), as amended from time to
time, or in any way subject to, or conditioned upon consistency with, the provisions of NMSA (1978)
§ 56-7-1 (2005), as amended from time to time, for its enforceability, then such provision,
regardless of whether it makes reference to this or any other limitation provision, shall not
extend to liability, claims, damages, losses or expenses, including attorney fees, arising out of
bodily injury to persons or damage to property caused by or resulting from, in whole or in part,
the negligence, act or omission of the indemnitee or additional insured, as the case may be, its
officers, employees or agents, and shall be further modified, if required by the provisions of NMSA
1978, § 56-7-1(B) (2005), as amended from time to time. Further, notwithstanding any other term or
condition of this Agreement, to the extent, if at all, that any agreement, covenant or promise to
indemnify another party (including such party’s employees or agents) contained in the Agreement or
in any related documents is found to be within the scope of NMSA 1978, § 56-7-2 (2003), as amended
from time to time, or in any way subject to, or conditioned upon consistency with, the provisions
of NMSA 1978, §56-7-2 (2003), as amended from time to time, for its enforceability, then regardless
of whether it makes reference to this or any other limitation provision, such agreement, covenant
or promise is not intended to, and it does not, indemnify such indemnitee against loss or liability
for damages arising from:




     (a) the sole or concurrent negligence of such indemnitee or the agents or employees of
such indemnitee;




     (b) the sole or concurrent negligence of an independent contractor who is directly
responsible to such indemnitee; or




     (c) an accident that occurs in operations carried on at the direction or under the
supervision of such indemnitee, an employee or representative of such indemnitee, or in
accordance with methods and means specified by such indemnitee or the employees or
representatives of such indemnitee.



     22. Guarantor. By signing this Agreement, Guarantor guarantees to Seller the full,
prompt and complete performance of this Agreement by Purchaser including without



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limit those
obligations that survive closing in accordance with the Guaranty attached as Exhibit B.




     This Agreement is signed and effective as of the date first set forth above.



	 	 	 	 	 
	 	PURCHASER:




9621 Coors LLC

a New Mexico limited liability company

 	 
	 	By:  	 	 
	 	 	William J. Melloy 	 
	 	 	Its: Manager 	 
	 
	 	GUARANTOR:





ALBUQUERQUE MOTOR COMPANY, INC.

a New Mexico corporation

 	 
	 	By:  	 	 
	 	 	Patrick C. Melloy 	 
	 	 	Its:      President 	 
	 



[signatures continue on the following page]






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	 	 	SELLER:	 	 
	 
	 	 	 	 	 	 
	 	 	SPARTON TECHNOLOGY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Its: 	 	 	 	 
	 

	 	 	 	 

	 	 






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EXHIBIT A TO OPTION AGREEMENT

LEGAL DESCRIPTION



PARCEL I (Off Site Parcel)



Lot numbered Nine (9) in Block numbered Twenty-six (26) of UNIT 2 OF THE KNOLLS OF PARADISE HILLS,,
a Subdivision within the Town of Alameda Grant, as the same is shown and designated on the Plat of
said Subdivision, filed in the office of the County Clerk of Bernalillo County, New Mexico, on May
22, 1962 in Plat Book D3, Folios 33 and 34.



PARCEL II (Tract B-2)



Tract B-2 ADOBE WELLS SUBDIVISION, a Subdivision of Bernalillo County, New Mexico, as the same is
shown and designated on the Plat thereof, filed in the office of the County Clerk of Bernalillo
County, New Mexico, on December 8, 1999, in Plat Book 99C, Page 329.









 









 








EXHIBIT A-1 TO OPTION AGREEMENT




Depiction of Non Use Area

(drawing from Lease Extension)














 









 








EXHIBIT B TO OPTION AGREEMENT

GUARANTY



Capitalized terms in this Guaranty not otherwise defined shall have the meanings ascribed to them
in the Option Agreement dated May 1, 2010 (the “Agreement”) between 9621 Coors L.L.C., a New Mexico
limited liability company, as purchaser (“Purchaser”), and Sparton Technology, Inc., a New Mexico
corporation, as seller (“Seller”).




     As a material inducement to Seller to enter into the Agreement, the undersigned Albuquerque
Motor Company, Inc. d/b/a Melloy Dodge (“Guarantor”) hereby unconditionally and irrevocably
guarantees the complete and timely performance of each obligation of Purchaser under the Agreement,
including those obligations that survive the closing and including full, prompt and timely payments
of all amounts owing under the Agreement by Purchaser. This Guaranty is an absolute, primary,
continuing, unconditional and general guaranty of payment and performance and is independent of
Purchaser’s obligations under the Agreement. Guarantor shall be primarily liable, jointly and
severally, with Purchaser. Guarantor waives any right to require Seller to (a) join Purchaser with
Guarantor in any suit arising under this Guaranty, (b) proceed against or exhaust any security
given to secure Purchaser’s obligations under the Agreement, or (c) pursue or exhaust any other
remedy in Seller’s power. Seller may, with notice but without demand and without affecting
Guarantor’s liability hereunder, from time to time, compromise, extend or otherwise modify any or
all of the terms of the Agreement. Guarantor hereby waives all demands for performance, notices of
performance, and notices of acceptance of this Guaranty. The liability of Guarantor under this
Guaranty will not be affected by (1) the release or discharge of Purchaser from, or impairment,
limitation or modification of, Purchaser’s obligations under the Agreement in any bankruptcy,
receivership, or other debtor relief proceeding, whether state or federal and whether voluntary or
involuntary; (2) the rejection or disaffirmance of the Agreement in any such proceeding; or (3) the
cessation from any cause whatsoever of the liability of Purchaser under the Agreement. Guarantor
shall pay to Seller all costs incurred by Seller in enforcing this Guaranty (including reasonable
attorneys’ fees and expenses).



	 	 	 	 	 	 	 

	 	 	GUARANTOR:	 	 
	 
	 	 	 	 	 	 
	 	 	ALBUQUERQUE MOTOR
COMPANY INC. d/b/a 
Melloy
Dodge	 	 
	 
	 	 	 	 	 	 
	 

	 	By: 	 	 	 	 
	 

	 	 
	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Its: