Document:

ex10_17.htm

    
      

    

    Exhibit
      10.17

     

    SUPPLEMENTAL
      SEPARATION AGREEMENT

     

    This
      Supplemental Separation Agreement ("Agreement") between APA ENTERPRISES, INC.
      ("APA") and ANIL K. JAIN ("AKJ") supplements the Amended and Restated Agreement
      Regarding Employment/Compensation Upon Change In Control dated September 15,
      2005 (the "2005 Agreement") between APA and AKJ.

     

    1.           AKJ
      hereby resigns as an employee and as Chief Executive Officer and Chief Financial
      Officer effective June 28, 2007, at the request of the Board of Directors of
      APA.

     

    2.           Termination
      of AKJ's employment and resignation as Chief Executive Officer and Chief
      Financial Officer of APA is agreed by AKJ and APA to be "involuntary" on the
      part of AKJ and not due to a Change in Control or for Cause as those terms
      are
      defined in the 2005 Agreement.  Thus, AKJ is entitled to the
      separation benefits listed in Section 6 of the 2005 Agreement and no benefits
      under any other section of the 2005 Agreement.

     

    3.           Pursuant
      to Section 6 of the 2005 Agreement, APA shall make the following payments to
      AKJ:

     

    
      	
              Type
                of Payment

            	 	
              Amount

            	 	
              When
                Paid

            
	 	 	 	 	 
	
              Accrued
                planned time off (PTO)

            	 	
              $67,561.74

            	 	
              One
                lump sum payment on or before July 13, 2007

            
	 	 	 	 	 
	
              Accrued
                Bonus

            	 	
              $0

            	 	
              N/A

            
	 	 	 	 	 
	
              Continuation
                of Salary

            	 	
              Continued
                at rate in effect as of June 30, 2007.  Accrued for three month
                periods

            	 	
              Each
                three month accrual paid on the Company's second payroll date in
                the third
                month of each calendar quarter with the 1st
                payment on
                9/21/07, except that the last payment (which shall be a full three
                month
                accrual) shall be paid on 6/12/09.

            

    

    

    4.           During
      the term of payment of separation pay under Section 6 of the 2005 Agreement,
      AKJ
      will not be provided any benefits at APA's expense.  However, AKJ may
      participate in any standard health benefit provided by APA by electing to so
      participate and by providing for a deduction from his separation pay for the
      cost of the benefit or reimbursing APA for the full amount of expenses incurred
      by APA in providing the designated benefits.

     

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
              /s/
                Anil K. Jain

            	 	
              APA
                ENTERPRISES, INC.

            
	
              Anil
                K. Jain, Ph.D

            	 	 	 
	 	 	 	 
	 	 	
              By:

            	
              /s/
                Ronald G. Roth

            
	 	 	
              Its

            	
              Chairman
                of the Board

            

    

     

     

    -2-ex10_18.htm

    
      

    

    Exhibit
      10.18

    

    STOCK
      PURCHASE AGREEMENT

    

    

    THIS
      STOCK PURCHASE AGREEMENT (this “Agreement”) is entered
      into as of June 28, 2007 by and between APA Enterprises, Inc., a Minnesota
      corporation (the ”Seller”) and
      Photonics International, Inc., a Minnesota corporation (the
“Purchaser”), with reference to the following
      facts:

     

    A.           The
      Seller owns 10,000 equity shares (collectively, the
“Shares”), of APA Optronics (India), Private Limited,
      a corporation formed under the laws of India, The Companies Act, 1956 (the
      “Company”).

     

    B.           Seller
      desires to sell to Purchaser, and Purchaser desires to buy from the Seller,
      all
      of the Shares owned by Seller (the “Sale Shares”) upon
      the terms set forth herein.

     

    NOW,
      THEREFORE, IN CONSIDERATION OF the foregoing facts and the mutual promises
      set
      forth herein, the parties agree as follows:

     

    1.           Purchase
      and Sale.  Subject to the terms and conditions hereof,
      Seller agrees to sell, and Purchaser agrees to purchase, the Sale Shares owned
      by Seller for an aggregate purchase price (the “Purchase
      Price computed as described on Schedule A
      hereto.  The Purchase Price shall be paid to Seller by delivery of
      Seller's promissory note in form satisfactory to Seller (the
      "Note").  The face amount of the Note delivered at Closing (as defined
      in Section 5) shall be adjusted post-Closing, but not later than July 20, 2007,
      to reflect a Purchase Price computed in accordance with Schedule A using data
      as
      of June 28, 2007.  The Note shall be secured by the security
      agreements listed on Schedule B hereto (collectively, the "Security
      Agreements).  In addition, Purchaser, Anil K. Jain and the Company
      shall enter into a Non-Compete Agreement with the Seller, in form and substance
      acceptable to Seller.

     

    2.           Representations
      and Warranties of Seller.  Seller represents and warrants
      that:

     

    (a)           Binding
      Obligations.  This Agreement and all other agreements executed by
      Seller in connection herewith constitute the legal, valid and binding
      obligations of Seller and are enforceable against Seller in accordance with
      their respective terms except as such enforcement may be limited by applicable
      bankruptcy, insolvency or other similar laws of general application affecting
      the enforcement of creditors’ rights generally or by judicial discretion as to
      the availability of equitable remedies or legal or equitable
      principles.

     

    (b)           Ownership
      of Sale Shares.  Seller (i) is the sole owner of the Sale Shares
      to be transferred hereunder, and such sole ownership is free and clear of any
      liens, security interests or other encumbrances, (ii) has not granted any other
      option or rights to the Sale Shares or any interest therein
      and (iii) has not pledged, collaterally assigned or
      otherwise hypothecated any interest therein.  Seller’s transfer,
      assignment and sale of the Sale Shares to Purchaser pursuant hereto will convey
      good and valid title to the Sale Shares to Purchaser, free and clear of any
      liens, security interests or other encumbrances.

     

    
      
            

        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    3.           Representations
      and Warranties of Purchaser. Purchaser represents and warrants
      that:

     

    (a)           Authorization.  Purchaser
      has all requisite power and authority to enter into this Agreement and to carry
      out the provisions hereof.  All organizational acts and proceedings
      required for the authorization, execution, delivery and performance of this
      Agreement have, or prior to the Closing will have, been taken.

     

    (b)           Binding
      Obligations.  This Agreement and all other agreements executed by
      Purchaser in connection herewith constitute the legal, valid and binding
      obligations of Purchaser and are enforceable against Purchaser in accordance
      with their respective terms except as such enforcement may be limited by
      bankruptcy, insolvency or other similar laws affecting the enforcement of
      creditors’ rights generally.

     

    (c)           Investment
      Intent.  The Purchaser is purchasing the Sale Shares for
      investment for its own account only and not with a view to, or for resale in
      connection with, any “distribution” thereof within the meaning of the Securities
      Act of 1933 (the ”Securities
      Act”).  The Purchaser understands that the Sale Shares
      have not been registered under the Securities Act or other securities laws
      in
      reliance on specific exemptions therefrom, which exemptions depend upon, among
      other things, the bona fide nature of the Purchaser’s investment intent as
      expressed herein.

     

    (d)           The
      Purchaser is a resident of the state indicated in the Preamble hereof, is
      legally competent to execute this Agreement, and:

    

    (i)           if
      the Purchaser is an individual, has his or her principal residence in such
      state;

    

    (ii)           if
      the Purchaser is a corporation, partnership, trust, limited liability company
      or
      other form of business organization, has its principal office in such state;
      or

    

    (iii)           if
      the Purchaser is a corporation, partnership, trust, limited liability company
      or
      other form of business organization, the Purchaser has not been organized for
      the specific purpose of acquiring the Sale Shares.

    

    (e)           The
      Purchaser has not been offered the Sale Shares by any form of general
      solicitation or general advertising, including but not limited to any
      advertisement, article, notice or other communication published in any
      newspaper, magazine, or similar media or broadcast over television or radio,
      or
      any seminar or meeting whose attendees have been invited by any general
      solicitation or general advertising.

    

    (f)           The
      Purchaser understands that there are substantial restrictions on the
      transferability of the Sale Shares and, accordingly, the Purchaser will need
      to
      bear the economic risk of the investment in the Sale Shares for an indefinite
      period of time and will not be readily able to liquidate the investment in
      case
      of an emergency.

    
      
            

        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (g)           The
      Purchaser understands that the Company has a limited financial or operating
      history, the Sale Shares are a speculative investment which involve a high
      degree of financial risk, and there is no assurance of any economic, income
      or
      tax benefit from such investment.

    

    (h)           In  making
      this investment, the Purchaser is relying solely upon the advice of the
      Purchaser’s personal tax advisors, and not the Seller, the Company or its
      advisers and counsel, with respect to the tax aspects of an investment in the
      Sale Shares.

    

    (i)           If
      the Purchaser is a corporation, partnership, trust, limited liability company,
      employee benefit plan or other entity, the Purchaser is authorized and qualified
      to become a stockholder of the Company and the person signing
      this  Agreement on behalf of such entity has been duly authorized by
      such entity to do so.

    

    (j)           No
      representations or warranties have been made to the Purchaser by the Seller
      or
      the Company or any officer, employee, agent or affiliate of the Seller or the
      Company, and the Purchaser’s investment decision has been based solely upon the
      Purchaser’s independent evaluation and due diligence, if any, of the
      Company.

    

    (k)           The
      Purchaser is experienced in business matters and regards himself, herself or
      itself as a sophisticated investor able to evaluate investment and financial
      information and to choose independent professional advisors to assist in such
      evaluation and, either alone or with such advisers, has such knowledge and
      experience in financial and business matters that the Purchaser is capable
      of
      evaluating the merits and risks of an investment in the Sale Shares and has
      the
      capacity to protect the Purchaser’s own interests in connection with the
      Purchaser’s proposed investment in the Sale Shares.

    

    (l)           The
      Purchaser is an “accredited investor” as that term is defined in Rule 501 of
      Regulation D under the Securities Act.

    

    (m)           Registration
      or Exemption Requirements.  The Purchaser acknowledges and
      understands that the Sale Shares must be held indefinitely unless they are
      subsequently registered under the Securities Act or an exemption from such
      registration is available.  The Purchaser understands that any
      certificate(s) evidencing the Sale Shares will be imprinted with a legend that
      prohibits the transfer of the Sale Shares unless they are registered or such
      registration is not required.

     

    4.           Pre-Emptive
      Rights and Other Transfer Restriction.  Purchaser
      warrants and represents that:

     

    (a)
      the
      Board of Directors of the Company (consisting of Anil K. Jain and Kul Bhushan
      Jain, who are brothers) has waived any transfer fee which could be assessed
      with
      respect to the sale contemplated by this Agreement in accordance with Section
      20
      of the Articles of Association of the Company (the "Articles"); and

     

    
      
        
        

        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (b)
      Anil
      K. Jain, who owns one equity share in the Company has received notice of, and
      has irrevocably waived, all pre-emptive right to purchase the Sale Shares under
      Section 21 of the Articles.

     

    5.           Closing.  The
      closing of the transactions contemplated herein
      (the ”Closing”) shall take place on or before
      July 2, 2007 (the “Closing Date”) and shall be
      consummated by mail in accordance with arrangements reasonably acceptable to
      counsel for the Seller and the Purchaser.

     

    (a)           Documents
      to be Delivered by Seller.  At the Closing, the Seller shall
      deliver to Purchaser:

     

    (1)           stock
      powers with respect to the Sale Shares; and

     

    (2)           the
      original share certificate or evidence of the Seller’s ownership of the Sale
      Shares.

     

    The
      Seller shall execute, acknowledge and deliver any further deeds, assignments,
      conveyances and other assurances, documents and instruments of transfer
      reasonably requested by the Purchaser and shall take such further action as
      reasonably requested by the Purchaser to effectuate the transactions
      contemplated by this Agreement.

     

    (b)           Documents
      to be Delivered by Purchaser. At the Closing, Purchaser shall deliver to the
      Seller the Note, the Security Agreements, and the Non-Compete
      Agreement.

     

    (c)           Name
      Change and Use of Name Pending Change.  Not later than March 31,
      2008, Purchaser shall change the name of the Company to a name which does not
      include "APA" and shall not thereafter use any name that includes
      "APA".  Purchaser shall deliver proof of such name change to
      Seller.  Failure to timely change the name or give notice of the
      change shall result in a penalty of $500 per day of delay, which shall be added
      to the principal of the Note.  In addition, following Closing and
      prior to March 31, 2008, Purchaser shall use its best efforts to adopt and
      do
      business under a name which does not include "APA."

     

    6.           Miscellaneous.

     

    (a)           Notices.  All
      notices hereunder shall be in writing and shall be deemed to have been duly
      given upon receipt, if personally delivered, or on the third business day
      following mailing, postage prepaid, addressed to the parties at the following
      addresses or at such other addresses as shall be specified in writing and in
      accordance with this Section:

     

    
      
        
        

        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
               
                

            	
              If
                to the Seller:

            	
              APA
                Enterprises, Inc.

            

      	 	 	Attn:  Cheri
              Podzimek

      	 	 	5480
              `Nathan Lane, Suite 120

      	 	 	Plymouth,
              MN  55442

    

     

    
      	
                
                

            	
              If
                to the Purchaser:

            	
              Photonics
                International, Inc.

            

      	 	 	Attn:  Anil
              K. Jain

      	 	 	4
              West Bay Lane

      	 	 	North
              Oaks, MN  55127

    

     

    (b)           Governing
      Law.  This agreement shall be governed by and construed in
      accordance with the laws of the State of Minnesota, without reference to
      conflicts of law principles.

     

    (c)           Survival.  All
      agreements, covenants and representations contained herein or made in writing
      by
      the Seller in connection with the transactions contemplated hereby shall survive
      the execution and delivery of this Agreement and the Closing Date.

     

    (d)           Severability.  Should
      any one or more of the provisions of this Agreement or of any agreement entered
      into pursuant to this Agreement be determined to be illegal or unenforceable,
      all other provisions of this Agreement and of each other agreement entered
      into
      pursuant to this Agreement shall be given effect separately from the provision
      or provisions determined to be illegal or unenforceable and shall not be
      affected thereby.

     

    (e)           Successors
      and Assigns.  All the terms and provisions of this agreement shall
      be binding upon, inure to the benefit of and be enforceable by the respective
      successors and assigns of the parties hereto, whether so expressed or
      not.

     

    (f)           Entire
      Agreement.  This Agreement and all schedules, certificates, lists,
      exhibits or other information furnished to Purchaser pursuant to this Agreement
      shall constitute the entire agreement of the parties.

     

    (g)           Counterparts.  This
      Agreement may be executed in two or more counterparts and by different parties
      hereto in separate counterparts, with the same effect as if all parties had
      signed the same document.  All such counterparts shall be deemed an
      original, shall be construed together and shall constitute one and the same
      instrument.

     

    (h)           Costs
      and Expenses.  Each of the Purchaser and the Seller shall bear
      their respective costs and expenses in connection with the negotiation,
      execution and performance of this Agreement and the transactions contemplated
      thereby.

     

    
      
        
        

        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties have executed this Stock Purchase Agreement as
      of
      the date first set forth above.

     

    

    
      	 	
              SELLER:

            
	 	 	 	 
	 	
              APA
                ENTERPRISES, INC.

            
	 	 	 	 
	 	
              By:

            	
              /s/
                Ronald G. Roth

            
	 	 	
              Its

            	
              Chairman

            
	 	 	 	 
	 	 	 	 
	 	
              PURCHASER:

            
	 	 	 	 
	 	
              PHOTONICS
                INTERNATIONAL, INC.

            
	 	 	 	 
	 	
              /s/
                Anil K. Jain

            
	 	 	 	 
	 	
              By:

            	
              Anil
                K Jain

            
	 	 	
              Its

            	
              President

            

    

     

    
      
        
        

        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A

    

    
      	
              Exchange
                Rate 6/12/07 except where noted (to be based on rate as of
                6/30/07)

            	 	
              40.73

            	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	
              As
                of approx 6/8/07

            	 
	 	 	
              US
                $    

            	
              Discount

            	
              Net    

            	 	
              RS             
                

            	
              Discount

            	
              Net             
                

            	
               

            
	
              Commitment
                to Bldg @ Exchange of 44.5

            	
              $385,000

            	
              0.0%

            	
              $385,000

            	 	
              INR
                17,132,500.00

            	
              0.0%

            	
              INR
                17,132,500.00

            	
              a

            
	 	 	 	 	 	 	 	 	 	 
	
              Spent
                @ Exchange of 44.5

            	 	
              $256,183

            	
              0.0%

            	
              $256,183

            	
               

            	
              INR
                11,400,150.00

            	
              0.0%

            	
              INR
                11,400,150.00

            	
              b

            
	 	 	 	 	 	 	 	 	 	 
	
              Remaining
                Blding Investment (@ current exchange)

            	
              $140,740

            	 	
              140,740.24

            	 	
              INR
                5,732,350.00

            	 	
              INR
                5,732,350.00

            	
              c
                =
                a - b

            
	 	 	 	 	 	 	 	 	 	 
	
              Other
                Liabilities (non building)

            	 	
              $28,185

            	
              0.0%

            	
              $28,185

            	
               

            	
              INR
                1,147,984.00

            	
              0.0%

            	
              INR
                1,147,984.00

            	
              d

            
	 	 	 	 	 	 	 	 	 	 
	
              Total
                Commitments

            	 	
              $168,925

            	
               

            	
              $168,925

            	
               

            	
              INR
                6,880,334.00

            	
               

            	
              INR
                6,880,334.00

            	
              e
                =
                c + d

            
	 	 	 	 	 	 	 	 	 	 
	
              Assets

            	 	 	 	 	 	 	 	 	 
	
              Cash

            	 	
              $84,328

            	
              0.0%

            	
              $84,328

            	 	
              INR
                3,434,696.47

            	
              0.0%

            	
              INR
                3,434,696.47

            	
              f

            
	
              A/R

            	 	
              $72,119

            	
              10.0%

            	
              $64,907

            	 	
              INR
                2,937,417.75

            	
              10.0%

            	
              INR
                2,643,675.98

            	
              g

            
	
              FO
                Inv less than 6 Mo's Old

            	 	
              $11,798

            	
              0.0%

            	
              $11,798

            	 	
              INR
                480,540.00

            	
              0.0%

            	
              INR
                480,540.00

            	
              h

            
	
              All
                other inventory

            	 	
              $21,374

            	
              100.0%

            	
              $0

            	 	
              INR
                870,573.00

            	
              100.0%

            	
              INR
                0.00

            	
              i

            
	
              Advances

            	 	
              $3,879

            	
              25.0%

            	
              $2,909

            	 	
              INR
                158,000.00

            	
              25.0%

            	
              INR
                118,500.00

            	
              j

            
	
              Fixed
                Deposits

            	 	
              $56,884

            	
              25.0%

            	
              $42,663

            	
               

            	
              INR
                2,316,867.47

            	
              25.0%

            	
              INR
                1,737,650.60

            	
              k

            
	 	 	 	 	 	 	 	 	 	 
	
              Total
                Variable Assets

            	 	
              $250,383

            	
               

            	
              $206,606

            	
               

            	
              INR
                10,198,094.69

            	
               

            	
              INR
                8,415,063.05

            	
              l
                =
                sum(f - k)

            
	 	 	 	 	 	 	 	 	 	 
	
              Net
                Assets less Commitments

            	 	 	 	
              $37,681

            	 	 	 	
              INR
                1,534,729.05

            	
              m
                =
                l - e

            
	 	 	 	 	 	 	 	 	 	 
	
              Less
                Fees/penalties/taxes to exit Noida

            	 	
              $45,888

            	
              62.5%

            	
              $17,208

            	
               

            	
              INR
                1,869,000.00

            	
              62.5%

            	
              INR
                700,875.00

            	
              n

            
	 	 	 	 	 	 	 	 	 	 
	
              Net
                Addition (Reduction) to purchase price of $500,000

            	 	
              $20,473

            	 	 	 	
              INR
                833,854.05

            	
              o
                =
                m - n

            

    

    

    ***
      Final
      numbers to be determined by July 20, 2007 based on numbers as of June 30,
      2007

    
      
        
        

        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    SCHEDULE
      B

    

    Guaranty
      by Anil K. Jain

    Stock
      Pledge Agreement

    Separation
      Payments Pledge Agreement by Anil K. Jain

    Agreement
      to Provide Additional Collateral

     

     

    8

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