Exhibit 2.2
AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
This Amended and Asset Purchase Agreement (this "Agreement"), dated as
of April 18, 2002, is by and between Aerovox Incorporated, a Delaware
corporation, as debtor-in-possession (the "Seller") and Parallax Power
Components, LLC, a Delaware limited liability company (the "Buyer").
W I T N E S S E T H:
WHEREAS, the Seller is operating as a debtor-in-possession under
Chapter 11 of the United States Bankruptcy Code, as amended, in Case No.
01-14680 - JNF (the "Bankruptcy Case") pending in the United States Bankruptcy
Court for the District of Massachusetts (the "Bankruptcy Court");
WHEREAS, the Seller is engaged in the development, manufacture, sale
and distribution of film capacitors and electromagnetic interference filters and
related products (the "Business") ; and
WHEREAS, Seller desires to sell, and the Buyer desires to purchase, the
Acquired Assets (as defined below), subject to the terms and conditions of this
Agreement; and
WHEREAS, the Acquired Assets will be sold pursuant to the terms of an
order of the Bankruptcy Court approving and authorizing such sale under Section
363 of the Bankruptcy Code pursuant to the Sale Approval Order (as defined
below);
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and promises contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1. (a) Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Aerovox Mexico" has the meaning set forth in Section 2.2(a).
"Acquired Assets" has the meaning set forth in Section 2.1.
"Affiliate" has the meaning set forth in Rule 12b-2 promulgated
under the Exchange Act by the Securities and Exchange Commission as in effect on
the date hereof.
"Allocation Statement" has the meaning set forth in Section 2.8.
"APA Document Approval Date" has the meaning set forth in Section
6.18.
"Assignment and Assumption Agreement" means one or more assignment
and assumption agreements entered into on the date hereof between Seller and
Buyer in substantially the form attached hereto as Schedule 1.1(a).
"Assumed Contracts" has the meaning set forth in Section 2.1(d).
"Auction" means the auction scheduled to occur for the sale of the
Acquired Assets, pursuant to the Bidding Procedures Order.
"Bankruptcy Case" has the meaning set forth in the recitals
hereto.
"Bankruptcy Code" means 11 U.S.C.ss.101 et seq, as amended.
"Bankruptcy Court" has the meaning set forth in the recitals
hereto.
"BHC Aerovox" has the meaning set forth in Section 2.2(a).
"Bidding Procedures" has the meaning set forth in Section 9.1(a).
"Bidding Procedures Order" has the meaning set forth in Section
6.10(a)(i).
"▇▇▇▇ of Sale" means such document in substantially the form
attached hereto as Schedule 1.1(b).
"Business" has the meaning set forth in the recitals hereto.
"Business Day" means a day other than a Saturday or a Sunday or
other day on which commercial banks in New York are authorized or required by
law to close.
"Business Employee" means any individual who on the Closing Date,
is actively employed by Seller exclusively as an employee of the Business at the
New Bedford Facility only (but not including any other employees or former
employees of Seller and/or its Affiliates, whether or not relating to the
Business), including any employee who is on approved leave of absence as of the
Closing Date (all such employees on approved leave of absence shall be deemed to
be "Business Employees" as of the date they return to active employment in the
Business), but shall exclude: (i) any other inactive or former employee
including any individual who is on unauthorized leave of absence or who has
terminated his or her employment or retired before the Closing Date; and (ii)
any employee set forth in Schedule 6.8(a) annexed hereto .
"Buyer" has the meaning set forth in the preamble hereto.
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" has the meaning set forth in Section 3.1.
"Competing Bid" has the meaning set forth in Section 9.1(a)(i).
"Deposit" has the meaning set forth in Section 2.5(a).
"Employee Benefit Plan" means any employment, collective
bargaining agreement, consulting, severance or other similar contract,
arrangement or policy and each plan, arrangement, program, agreement or
commitment (including any multi-employer plan) providing for pension,
supplemental pension, fringe benefits, vacation benefits, retirement benefits,
life, health, sickness, disability or accident benefits or other welfare
benefits or for deferred compensation, profit-sharing, bonuses, stock options,
restricted stock, stock appreciation rights, stock purchase, severance or
separation, deferred compensation, supplemental executive compensation, other
forms of incentive compensation or other employee benefit plan, agreement,
policy or arrangement, whether written or oral, maintained or contributed to by
Seller and/or Affiliates in respect of any Business Employee (but not including
any plans or arrangements providing benefits to any employee and/or former
employee of Seller and/or its Affiliates who is not a Business Employee) or
under which Seller and/or Affiliates have any liability including without
limitation, any such plans that are: (i) "employee benefit plans" as such term
is defined under Section 3(3) of ERISA; (ii) "employee pension benefit plans" as
such term is defined under Section 3(2) of ERISA; and (iii) "employee welfare
benefit plans" as such term is defined under Section 3(1) of ERISA.
"Encumbrance" means any mortgage, pledge, lien, claim, cause of
action, charge, security interest, conditional sales agreement, Tax, and
monetary encumbrance (statutory or otherwise) and charge of any kind or nature.
"ERISA" means the Employment Retirement Income Security Act of
1974, as amended from time to time.
"Escrow Agent" has the meaning set forth in Section 2.5(b).
"Escrow Agreement" has the meaning set forth in Section 2.5(b).
"Estimated Closing Inventory Value" has the meaning set forth in
Section 2.6(b).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Excluded Assets" has the meaning set forth in Section 2.2.
"Excluded Belleville Avenue Property" has the meaning set forth in
Section 2.2(b).
"Excluded Liabilities" has the meaning set forth in Section 2.4.
"Filed Plan" has the meaning set forth in Section 9.1(a).
"Final Closing Statement" has the meaning set forth in Section
2.7(a).
"Final Inventory Value" has the meaning set forth in Section
2.7(a).
"Final Purchase Price" has the meaning set forth in Section
2.7(b).
"GAAP" means generally accepted accounting principles in the
United States of America.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, including any regulatory authority,
department, agency or body, or any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Information Technology Access Agreement" means the agreement
attached as Schedule 1.1(c).
"Initial Closing Statement" has the meaning set forth in Section
2.6(b).
"Initial Inventory Value" means the aggregate book value of the
Inventory as of February 23, 2002, as set forth on Schedule 2.6.
"Initial Purchase Price Adjustment" has the meaning set forth in
Section 2.6(c).
"Intellectual Property" has the meaning set forth in Section
2.6(c).
"Inventory" has the meaning set forth in Section 2.1(b).
"▇▇▇▇▇▇ Equipment" has the meaning set forth in Section 6.7
"▇▇▇▇▇▇ Inventory" has the meaning set forth in Section 6.7.
"Loeb" has the meaning set forth in Section 4.8.
"Lease Consents" has the meaning set forth in Section 6.6.
"Motion" has the meaning set forth in Section 6.10(a).
"New Bedford Facility" means the Seller's facility located at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
"New Bedford Facility Property" means the real property, land,
building and improvements at the New Bedford Facility.
"New Bedford Facility Sublease" has the meaning set forth in
Section 6.6.
"New Bedford Master Lease" means the Agreement of Lease, dated as
of December 22, 1999, between the City of New Bedford, as Lessor, and the New
Bedford Redevelopment Authority, as Lessee, in respect of the New Bedford
Facility Property.
"New Bedford NBRA Sublease" means the Agreement of Sublease, dated
as of January 4, 2000, between the New Bedford Redevelopment Authority, as
Sub-Lessor, and Seller, as Sub-Lessee, in respect of the New Bedford Facility
Property.
"NGM" has the meaning set forth in Section 6.3.
"Non-Competition Agreement" has the meaning set forth in Section
6.3.
"Ordinary Course" means the ordinary course of the Business in the
same manner as now conducted and consistent with past custom and practice since
commencement of the Bankruptcy Case
"Permits" has the meaning set forth in Section 4.13.
"Person" means an individual, partnership, limited partnership,
corporation, limited liability company, business trust, joint stock company,
trust, unincorporated association, syndicate, group, joint venture, Governmental
Authority or other entity of whatever nature.
"Post Closing Employee" has the meaning set forth in Section
6.8(a).
"Pre-Closing Period" has the meaning set forth in 6.1(a).
"Purchase Price" has the meaning set forth in Section 2.5(a).
"Realty Fixtures" means all items attached to or incorporated into
real property as provided under Massachusetts Law; provided, however, such term
shall not include any machinery or equipment included as part of the Acquired
Assets and listed on Schedule 2.1(a).
"Requirement of Law" means, as to any Person, the Certificate or
Articles of Incorporation and By-Laws or other organization or governing
documents of such Person, and any foreign or domestic law, statute, treaty,
rule, regulation, ordinance, judgment, order, decree, consent decree or similar
instrument or determination or award of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Sale Approval Order" has the meaning set forth in Section
6.10(a)(ii).
"▇▇▇▇▇▇▇" has the meaning set forth in Section 6.3.
"Seller" has the meaning set forth in the preamble hereto.
"Seller's Knowledge" means the knowledge, after reasonable
inquiry, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President and F. ▇▇▇▇▇▇ ▇▇▇▇, Chief Financial
Officer of Seller.
"Tax" or "Taxes" means with respect to any Person (a) all federal,
state, local, foreign or other taxes, including, without limitation, net income,
gross income, unitary, gross receipts, sales, use, intangible, ad valorem,
franchise, profits, license, withholding, payroll, social security, employment,
excise, severance, stamp, transfer, gains, occupation, premium, property,
recording, documentary, value added, environmental or windfall profit tax,
custom, duty or other tax, governmental fee (similar to a tax) or other like
assessment or charge of any kind whatsoever, whether computed on a separate or
consolidated, or unitary or combined basis or in any other manner, together with
any interest or penalty or additional tax imposed by any jurisdiction or any
federal, state, local or foreign taxing authority or any other Governmental
Authority on such Person, and (b) any transferee or secondary liability of such
Person for a Tax and any Tax liability assumed by agreement or arising as a
result of being (or ceasing to be) a member of any affiliated group, or being
included or required to be included in any Tax Return relating thereto.
"Tax Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Tax Returns" means all returns or reports or forms required to be
filed with any taxing authority or other Governmental Authority with respect to
Taxes.
"Temporary License" has the meaning set forth in Section 6.9.
"Temporary License Period" has the meaning set forth in Section
6.9.
"Termination Fee" has the meaning set forth in Section 9.1(b).
"WARN Act" means the Worker Adjustment and Retraining Act of 1988,
as amended from time to time.
(b) Other Definitional Provisions.
(i) Terms defined in this Agreement in sections other than
Section 1.1(a) shall have the meanings as so defined when used in this
Agreement.
(ii) Unless express reference is made to Business Days,
references to days shall be to calendar days.
ARTICLE II
PURCHASE AND SALE OF ASSETS BY THE BUYER, ASSUMPTION OF
LIABILITIES AND PURCHASE PRICE
2.1 Purchase and Sale of Acquired Assets. Upon the terms and subject
to the conditions and provisions contained herein, at the Closing, the Seller
shall sell, convey, transfer, assign and deliver to the Buyer, and the Buyer
shall purchase, acquire and accept from the Seller,
free and clear of any and all Encumbrances of any kind or nature whatsoever, all
right, title and interest of the Seller in and to the following properties and
assets owned by the Seller (but not its subsidiaries) and used in, relating to
the Business, whether tangible or intangible, whether real, personal or mixed,
whether owned or leased, and wherever located (collectively, the "Acquired
Assets"):
(a) all tangible personal property used in connection with the
Business, including, without limitation, fixtures, furnishings, furniture,
office equipment and supplies, computer and telecommunication equipment,
vehicles, rolling stock, tools, tooling and dies, machinery and equipment,
including those set forth in Schedule 2.1(a);
(b) all inventories of the Business, including without limitation, raw
materials, work-in-process, finished goods, packaging materials, spare parts and
supplies ("Inventory");
(c) all intangible properties and rights used in connection with the
Business, including, without limitation, those intangible properties and rights
set forth on Schedule 2.1(c), including all United States and foreign patents
and patent applications, trade names (including without limitation, the
exclusive right to use the names "Aerovox," "Aeromet", "Supermet" and "Blue
▇▇▇▇" and all simulations and variations thereof (except "CGE Aerovox"), subject
only to the Seller's right to grant the Temporary License to certain third party
purchasers of other assets of the Seller and/or its Affiliates pursuant to
Section 6.9 hereof) trademark and service ▇▇▇▇ registrations and applications,
common law trademarks and copyright registrations, and all other intellectual
property and rights, proprietary information, know-how, trade secrets,
inventions, processes, formulas, specifications, technical data, engineering and
production designs, mask work, computer discs and tapes, spreadsheets, plans,
diagrams and schematics, and any unregistered intellectual property used in
connection with the Business, and Seller's proprietary computer programs and
other software and firmware, including Seller's data bases, websites, accounting
and reporting formats, systems and procedures used in connection with the
Business, together with the licenses with respect thereto and all common law
rights and goodwill appurtenant thereto (the "Intellectual Property");
(d) all rights under any of any contracts, agreements, leases and
licenses to which the Seller is a party that relate to the Business and
constitute the Assumed Contracts as set forth in Schedule 2.3 hereto;
(e) all business licenses and permits of the Seller (including any
certifications or approvals of Underwriters Laboratories or other substantially
similar organization in the United States, Canada, Mexico or any other
applicable jurisdiction) used in connection with the Business, including,
without limitation, those licenses and permits listed on Schedule 2.1(e);
(f) all books, records, files and papers, whether in hard copy or
computer format, including, without limitation, plans and specifications,
surveys, customer lists, credit information, supplier lists, purchase and sale
orders, cost and pricing information, employment and personnel records and
files, sales and promotional materials and other operating data and information,
wherever located, relating to the Acquired Assets and the Business;
(g) all claims and rights of the Seller against third parties under
contracts, warranties and guaranties received from vendors, suppliers or
manufacturers in respect of the Business and/or Acquired Assets; and
(h) all goodwill appurtenant to the foregoing Acquired Assets, and the
right to represent to third parties that Buyer is the successor to the Business,
excluding, however, the Excluded Assets set forth in Section 2.2 hereof and the
Excluded Liabilities.
2.2 Excluded Assets. Notwithstanding anything to the contrary
contained in this Agreement, the Acquired Assets shall not include any assets of
the Seller other than those specified in Section 2.1 hereof, whether tangible or
intangible, and shall not include any of the following assets and properties of
the Seller, which shall be retained by the Seller following the Closing (the
"Excluded Assets"):
(a) the assets owned by, and the issued and outstanding capital stock
of, all subsidiaries of the Seller, including but not limited to, Aerovox de
Mexico, S.A. de C.V., a subsidiary of the Seller organized under the laws of
Mexico ("Aerovox Mexico") and BHC Aerovox Ltd., a wholly owned subsidiary of the
Seller organized under the laws of the United Kingdom ("BHC Aerovox");
(b) all real property, land, buildings, Realty Fixtures, improvements,
leasehold interests owned, leased, operated and, or used by Seller and/or its
subsidiaries and Affiliates, including without limitation, the facilities
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, (but such
reservation as an Excluded Asset hereunder shall not in any manner whatsoever
impair Buyer's rights as Tenant under the New Bedford Facility Sublease); and in
Huntsville Alabama; ▇▇▇▇▇▇, Mexico; Mexico City, Mexico; Weymouth, United
Kingdom, and the Seller's prior facility located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, at which the Seller has ceased business operations (the
"Excluded Belleville Avenue Property ");
(c) all assets owned by Seller which are at its facility located in
Mexico City, Mexico (provided, however, that, during the Pre-Closing Period,
such assets will be sold, transferred or relocated from , or acquired or moved
to, such Mexico City, Mexico facility only in the Ordinary Course pursuant to
Section 6.1 hereof);
(d) all assets owned by Seller which are not used in connection with
the Business;
(e) all accounts or notes receivable, cash and cash equivalents and
prepaid expenses;
(f) all intercompany accounts receivable or notes receivable, which
obligations shall be deemed cancelled as of the Closing Date;
(g) all contracts, agreements, leases or licenses of the Seller
relating to the Business which do not constitute Assumed Contracts hereunder;
(h) all rights to or claims for refunds or rebates of Taxes for any
period ending on or prior to the Closing Date, and the benefit of net operating
loss carryforwards, carrybacks or other credits of the Seller relating to any
such period;
(i) all causes of action, judgments, claims, demands, rights of
recovery or setoff of whatever nature and condemnation awards, including without
limitation, bankruptcy claims and causes of action under Sections 544 through
551 of the Bankruptcy Code;
(j) all insurance policies of the Seller relating to the Business;
(k) all documents relating to the organization, maintenance and
corporate existence of the Seller, Aerovox Mexico and BHC Aerovox; and
(l) Non-symmetric Capacitor Patent, U.S. Patent No. 6,208,502.
2.3 Assumed Contracts. Buyer shall assume, as of the Closing Date,
and pay, perform and discharge, all obligations for future performance solely
from and after the Closing Date only under those contracts, agreements, leases
and licenses entered into by the Seller in connection with the Business and
expressly set forth in Schedule 2.3 annexed hereto (the "Assumed Contracts").
The parties hereby acknowledge and agree that Buyer shall not assume or be
responsible for any cure amounts of any kind or nature whatsoever in respect of
any Assumed Contract for any period prior to the Closing Date.
2.4 Excluded Liabilities. Notwithstanding anything to the contrary
contained in this Agreement, except as expressly provided in respect of any
Assumed Contract pursuant to Section 2.3 hereof and those obligations of the
Buyer set forth in Section 6.8(e) and Section 6.8(g) hereof, the Buyer shall not
be liable for or assume, and shall be expressly discharged from any
responsibility for, any pre-petition or post-petition debts, liabilities,
obligations or commitments of the Seller or any other party of any kind or
nature whatsoever with respect to the Business or Acquired Assets or otherwise
(the "Excluded Liabilities").
2.5 Purchase Price; Payment.
(a) The purchase price to be paid by the Buyer to the Seller for
the Acquired Assets hereunder shall be EIGHT MILLION FIVE HUNDRED THOUSAND
DOLLARS (U.S. $8,500,000.00) in the aggregate (the "Purchase Price"), subject to
adjustment as set forth in Sections 2.6 and 2.7 hereof, respectively. The
Purchase Price shall be paid in cash in United States dollars by the Buyer to
the Seller as follows: (i) concurrently with the execution and delivery hereof,
a deposit in the amount of $340,000.00 (the "Deposit") shall be deposited into
escrow by the Buyer pursuant to the terms of the Escrow Agreement (as defined
below); and (ii) at the Closing, the sum of $8,160,000.00, but less an amount
equal to all interest earned on the Deposit, by wire transfer to an account or
accounts designated by the Seller.
(b) The Deposit shall be held in escrow pursuant to the terms
and provisions of the Escrow Agreement, dated as of the date hereof (the "Escrow
Agreement"), among the
Seller, the Buyer and ▇▇▇▇▇▇ & King, P.C., counsel to the Seller, as Escrow
Agent (the "Escrow Agent"). Pursuant to the Escrow Agreement, among other
matters, at the Closing hereunder, the Escrow Agent shall deliver all funds held
in escrow, i.e., the entire Deposit ($340,000.00) plus all interest thereon, to
the Seller to be credited as payment of part of the Purchase Price hereunder.
2.6 Initial Purchase Price Adjustment.
(a) The parties hereby acknowledge and agree that, no later than
three (3) Business Days prior to the Closing, duly authorized representatives of
the Seller and Buyer shall jointly conduct and complete a physical count of the
Inventory.
(b) By no later than 5:00 p.m., Eastern Time, on the second
(2nd) Business Day prior to the Closing Date, the Seller shall prepare and
deliver to the Buyer an unaudited pro forma statement of the Inventory as of the
Closing Date ("Estimated Closing Inventory Value"), prepared in a manner
consistent with the methods employed by the Seller in the preparation of the
Initial Inventory Value as set forth on Schedule 2.6("Initial Closing
Statement").
(c) At Closing, the Purchase Price will be increased or
decreased (as the case may be) on a preliminary basis (the "Initial Purchase
Price Adjustment") as follows:
(i) if the Estimated Closing Inventory Value reflected on the
Initial Closing Statement is greater than the Initial Inventory
Value, then the Purchase Price paid at the Closing shall be
increased on a dollar for dollar basis by an amount equal to such
excess and paid to the Seller; or
(ii) if the Estimated Closing Inventory Value reflected on
the Initial Closing Statement is less than the Initial
Inventory Value, then the Purchase Price paid at the
Closing shall be decreased on a dollar for dollar basis by
an amount equal to such deficiency.
2.7 Final Purchase Price Adjustment.
(a) Within ten (10) Business Days after the Closing Date (which
period may be reasonably extended by the Seller for a period not exceeding an
additional ten (10) Business Days by providing written notice thereof to the
Buyer), the Seller shall prepare and deliver to the Buyer unaudited final
statements of the Inventory as of 12:01 a.m. on the Closing Date ("Final
Inventory Value"), prepared in a manner consistent with the methods employed by
the Seller in the preparation of each of the Initial Inventory Value and the
Estimated Closing Inventory Value ("Final Closing Statement"). During such
period and any objection period, the Buyer shall provide the Seller with
reasonable access to the books and records of the Seller as may be necessary to
complete the Final Closing Statement. The Buyer shall have fifteen (15)
Business Days following delivery of the Final Closing Statement to (y) review
the Final Closing Statement and the business records with respect thereto, and
(z) deliver written objections, if any, in reasonable detail to the Seller. If
no written objections are delivered by or on behalf of the Buyer to the Seller
within said time period, the Final Closing Statement shall be considered final
and binding on the parties for all purposes. If, however, written objections are
so timely delivered by the Buyer, then the parties shall, for a period of
fifteen (15) Business Days (unless mutually extended by the parties) following
delivery of the Buyer's written objections, attempt in good faith to resolve
their differences with respect to such objections. Any resolution of such
objections by the parties shall be in writing and shall be final and binding on
the parties for all purposes. If, however, the parties are unable to resolve any
objections within such time period or to mutually agree to extend the time
allowed, or to resolve such objections within any extended period of time, then
the matter will be submitted to the Bankruptcy Court for final and binding
resolution.
(b) When the Final Closing Statement becomes final and binding
on the parties, then the Purchase Price hereunder shall be re-calculated based
upon the Final Inventory Value to determine the "Final Purchase Price" as
follows:
(i) if the Final Purchase Price based upon the Final Inventory
Value as reflected in such Final Closing Statement is greater than
the Purchase Price calculated and paid at Closing ( based upon the
Initial Purchase Price Adjustment set forth in Section 2.6(c)
above), then the Buyer shall pay to the Seller an amount equal to
the difference between the Final Purchase Price and the Purchase
Price calculated and paid at Closing; or
(ii) if the Final Purchase Price based upon the Final Inventory
Value as reflected in the Final Closing Statement is less than the
Purchase Price calculated and paid at Closing (based upon the
Initial Purchase Price Adjustment set forth in Section 2.6(c)
above), then the Seller shall pay to the Buyer an amount equal to
the difference between the Final Purchase Price and the Purchase
Price calculated and paid at Closing.
(c) Any amount due pursuant to this Section 2.7 shall be paid promptly
by the appropriate paying party to the other party in immediately available
funds, but in no event later than ten (10) days after the Final Closing
Statement becomes final and binding on the parties.
(d) The Purchase Price shall also be adjusted following the Closing on
account of the proration as of 12:01 a.m. on the Closing Date of real property
and other Taxes, insurance and utilities with respect to the Acquired Assets.
2.8 Allocation of the Purchase Price. The parties have agreed,
following arm's length negotiations, to allocate the Purchase Price among the
Acquired Assets on the basis set forth in Schedule 2.8 annexed hereto (the
"Allocation Statement"). Seller and the Buyer hereby agree to report an
allocation of such Purchase Price among the Acquired Assets in a manner entirely
consistent with the Allocation Statement, and agree to act in accordance with
such Allocation
Statement in connection with the preparation of financial statements and filing
of all Tax Returns, and in the course of any Tax audit, Tax review or Tax
litigation relating thereto.
ARTICLE III
THE CLOSING
3.1 Closing. The consummation of the transactions contemplated hereby
(the "Closing") shall occur at the offices of ▇▇▇▇▇▇ & ▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on June 18, 2002; provided, however, that
such date of Closing may be extended (a) for an additional period of ten (10)
days to June 28, 2002, upon written notice from Seller to Buyer to the effect
thereof, provided that (i) the Sale Approval Order shall not have been entered
by the Bankruptcy Court as of June 18, 2002 and (ii) all other conditions to
closing set forth in Article VIII shall have been satisfied; or (b) to a date no
later than June 25, 2002, at the sole option of Buyer, upon written notice from
Buyer to Seller to effect thereof by no later than Noon on June 13, 2002, and,
in each case, all other conditions to Closing set forth in Article VII and
Article VIII shall have been satisfied or waived (the "Closing Date"), or at
such other time and place as shall be mutually agreed to between the parties.
3.2 Conveyances at Closing.
(a) At the Closing, and in connection with effecting and
consummating the transactions contemplated hereby, the Seller shall deliver the
following to the Buyer:
(i) an executed ▇▇▇▇ of Sale;
(ii) an executed counterpart of the Assignment and
Assumption Agreement;
(iii) an executed counterpart of the New Bedford Facility
Sublease;
(iv) an executed counterpart of the Non-Competition
Agreement (as executed by all parties thereto);
(v) a certified copy of the Sale Approval Order (and
provided no court of competent jurisdiction shall have entered an
order staying such Sale Approval Order pending appeal);
(vi) the Lease Consents to the extent required pursuant to
the terms of Section 6.6;
(vii) the Information Technology Access Agreement, as
executed by NGM;
(viii) the certificate required in Section 8.10; and
(ix) such other instruments of conveyance, assignment and
transfer which shall be necessary or appropriate to convey, transfer
and assign and to vest in the Buyer good, valid and marketable title,
free and clear of all Encumbrances, in a form reasonably satisfactory
to Buyer and its counsel.
(b) At the Closing, and in connection with effectuating and
consummating the transactions contemplated hereby, the Buyer shall deliver the
following to the Seller:
(i) an amount equal to the Purchase Price, as adjusted, by
wire transfer of immediately available funds;
(ii) an executed counterpart of the Assignment and Assumption
Agreement;
(iii) an executed counterpart of the New Bedford Facility
Sublease ;and
(iv) an executed counterpart of the Information Technology
Access Agreement (as executed by all parties thereto).
3.3 Transaction Expenses. Except for the Termination Fee (as defined in
Section 9.1(b)) and as otherwise expressly provided herein, each party shall
bear its own costs and expenses, including attorney, accountant and other
consultant fees, in connection with the execution and negotiation of this
Agreement and the consummation of the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As a material inducement to the Buyer to enter into this Agreement, the
Seller hereby makes the following representations and warranties to the Buyer,
but none of which shall survive the Closing of the transactions contemplated
hereby for any reason:
4.1 Authorization of the Seller. Subject to the approval and entry of the Sale
Approval Order, the Seller has all necessary right, power, capacity and
authority to execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to perform its obligations hereunder.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of the Seller, and no other corporate proceedings on the part of
Seller are necessary to authorize the execution, delivery and performance of
the Agreement and consummation of
the transactions contemplated hereby. This Agreement has been duly executed
and delivered by the Seller and, subject to the approval and entry of the
Sale Approval Order, is a valid and binding obligation of the Seller
enforceable against the Seller in accordance with its terms.
4.2 Organization. Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to operate its properties and to
carry on its business as it is now being conducted or presently proposed to
be conducted.
4.3 Title to Assets; Absence of Liens and Encumbrances, etc. Except as set forth
in Schedule 4.3, Seller owns outright, and has good, valid and marketable
title to, all of the assets, properties and businesses constituting the
Acquired Assets, free and clear of all Encumbrances of any kind or nature
whatsoever. At the Closing, the Seller will, by virtue of the Sale Approval
Order, transfer all right, title and interest in and to the Acquired Assets
to the Buyer, free and clear of any and all Encumbrances.
4.4 Disclosure. No representation or warranty by the Seller contained in this
Article IV contains, or will contain as of the date such representation or
warranty is made or affirmed, any untrue statement of a material fact, or
omits, or will omit to state as of the date such representation or warranty
is made or affirmed any material fact that is necessary to make the
statements contained herein or therein not misleading.
4.5 New Bedford NBRA Sublease. The New Bedford NBRA Sublease, and to
the Seller's Knowledge, the New Bedford Master Lease, is in full force and
effect and has not been assigned, modified, supplemented or amended. Neither the
Seller nor the landlord thereunder is in default under the New Bedford NBRA
Sublease and/or, to the Seller's Knowledge, New Bedford Master Lease, including
without limitation, in respect of non-payment of any rent and otherwise,and no
circumstances or state of facts presently exists which would permit such
landlord to terminate the New Bedford NBRA Sublease and/or, to Seller's
Knowledge, the New Bedford Master Lease. Seller has the right to quiet enjoyment
of all of the New Bedford Facility Property for the full term of the New Bedford
NBRA Sublease, and except as set forth in Schedule 4.5, the leasehold or other
interest of Seller in the New Bedford Facility Property is not subject or
subordinate to any security interest, lien or mortgage or any other leasehold
interest.
4.6 Employee and Labor Relations.
(a) Except as set forth in Schedule 4.6:
(i) there is no labor strike or work stoppage or lockout
pending, or to the Seller's Knowledge, threatened, against the Seller by any
Business Employees, and there has been no such labor difficulties with respect
to the Business during the prior three (3) years;
(ii) other than IBEW Local 1499, which represents 15
Business Employees, no Business Employee has ever been represented by any labor
or trade union and no
movement to designate a collective bargaining unit to represent any of the other
Business Employees exists or, to the Seller's Knowledge, is threatened;
(iii) there is no pending or to Seller's Knowledge,
threatened, unfair labor practice charge or complaint against the Seller in
respect of any Business Employee before the National Labor Relations Board;
(iv) there is no pending collective bargaining grievance
in respect of any Business Employee; and
(v) no charges with respect to or relating to any
Business Employee are pending before the Equal Employment Opportunity Commission
or any other Governmental Authority responsible for the prevention of unlawful
employment practices.
(b) To the Seller's Knowledge, no Business Employees has, prior
to the date hereof, indicated to the Seller a desire to terminate employment, or
any intention to terminate employment, upon a sale of the Business.
(c) Schedule 4.6 sets forth: (i) a true and complete list of
each Business Employee (including position and length of service) and (ii) a
list of the names and current base salary rates of all Business Employees whose
annual salaries exceed $25,000.00. Seller does not have any liabilities for
compensation to any former employee of the Business.
4.7 No Breach. Upon entry of the Sale Approval Order, neither the
execution and delivery of this Agreement nor compliance by the Seller with any
of the provisions hereof nor consummation of the transactions contemplated
hereby, will:
(a) violate or conflict with any provision of the Articles of
Incorporation or By-Laws of Seller;
(b) violate or, alone or with notice or the passage of time, result in
the material breach or termination of, or otherwise give any
contracting party the right to terminate, or declare a default
under, the terms of any agreement, lease, note, mortgage,
instrument or other document or undertaking, oral or written,
relating to the Acquired Assets or the Business to which the
Seller is a party or by which it may be bound (except for such
violations, conflicts, breaches or defaults as to which required
waivers or consents by other parties have been, or will, prior to
the Closing, be obtained or discharged pursuant to the Sale
Approval Order);
(c) result in the creation of any lien upon any of the
Acquired Assets;
(d) violate any judgment, order, injunction, decree or award
against, or binding upon, the Seller, any of the Acquired Assets
or the Business; or
(e) violate any Requirement of Law of any jurisdiction
relating to the
Seller, the Acquired Assets or the Business.
4.8 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on directly with the Buyer by
the Seller without the intervention of any broker, finder, investment banker or
other third party other than Loeb Partners Corporation ("Loeb"). Except for
Loeb, the Seller has not engaged, consented to, or authorized any broker,
finder, investment banker or other third party to act on its behalf, directly or
indirectly, as a broker or finder in connection with the transactions
contemplated by this Agreement. Seller shall be solely and exclusively
responsible for all fees and other compensation payable to Loeb. Seller hereby
agrees to indemnify the Buyer, and to hold he Buyer harmless, from and against
any claim for brokerage, finders fee or similar commission or other compensation
which may be made against the Buyer by Loeb or any other third party in
connection with any of the transactions contemplated hereby, which claim shall
be based upon any action by or on behalf of the Seller.
4.9 Subsidiaries. Seller does not conduct the Business through any
foreign or domestic subsidiaries and/or Affiliates, other than Aerovox Mexico.
No subsidiary or Affiliate of the Seller or any Person other than the Seller
owns any of the Acquired Assets or has any interest therein (other than security
interests set forth on Schedule 4.3) and the Sale Approval Order shall so
provide.
4.10 No Consents. There are no consents and approvals of any foreign
or domestic Governmental Authorities (other than Bankruptcy Court orders) and of
other third parties which are required to be obtained by or on behalf of Seller
in order to enable such party to enter into and carry out this Agreement in all
material respects.
4.11 Compliance with Laws. To Seller's Knowledge, except as set forth
in Schedule 4.11, the operation of the Business and the Acquired Assets has been
conducted in material compliance with all applicable Requirements of Law of all
federal, state, municipal and other political subdivisions and any Governmental
Authorities having jurisdiction over Seller, the Business and/or Acquired
Assets.
4.12 Inventory. All Inventory is owned by Seller and is valued at an
amount determined in accordance with GAAP consistently applied and has been
priced at the lower of cost or market on a first-in, first-out basis. Schedule
4.12 also set forth the locations where all Inventory is held or stored. Except
as set forth in Schedule 4.12, no Inventory is subject to any consignment, ▇▇▇▇
and hold or other similar arrangements.
4.13 Permits. Schedule 4.13 sets forth all material permits, licenses,
orders, franchises and approvals (collectively, the "Permits") from all
Governmental Authorities obtained by Seller relating to the Acquired Assets and
the conduct of the Business, and all such Permits are transferable to Buyer
pursuant to the term hereof. To Seller's Knowledge, Seller is in material
compliance with all applicable Requirements of Law of the Governmental
Authorities which have issued such Permits.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER
As an inducement to the Seller to enter into this Agreement, the Buyer
hereby makes the following representations and warranties as of the date hereof
to the Seller, but none of which shall survive the Closing of the transactions
contemplated hereby for any reason:
5.1 Authorization. The Buyer has all necessary corporate power and authority to
enter into this Agreement and has taken all corporate action necessary to
execute and deliver this Agreement, to consummate the transactions
contemplated hereby and to perform its obligations hereunder, and no other
corporate proceedings on the part of the Buyer are necessary to authorize
the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Buyer and is a valid and binding
obligation of the Buyer, enforceable against it in accordance with its
terms.
5.2 Organization of the Buyer. The Buyer is a limited liability company duly
formed, validly existing and in good standing under the laws of the State of
Delaware, and has the limited liability company power and authority to
operate its properties and to carry on its business as it is now being
conducted or presently proposed to be conducted.
5.3 Brokers. No Person is entitled to any brokerage, financial advisory,
finder's or similar fee or commission payable by the Buyer in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Buyer.
ARTICLE VI
COVENANTS
Seller and the Buyer hereby covenant and agree as follows:
6.1 Conduct of Business.
(a) Except as otherwise required by the Bankruptcy Court and/or
Bankruptcy Code, during the period from and after the date hereof to the Closing
Date (the "Pre-Closing Period"), Seller shall conduct the Business only in the
Ordinary Course, and make no material change in any of its policies without the
prior written consent of Buyer. Seller shall not, without the prior written
consent of Buyer (except as otherwise expressly set forth in this Agreement):
(i) enter into any contract or agreement or make any commitment with respect to
the Business or Acquired Assets other than in the Ordinary Course; (ii) sell,
assign, transfer or otherwise dispose of any of the Acquired Assets or any
rights with respect to the Business other than in the Ordinary Course; (iii)
create, incur, assume or suffer to exist, any Encumbrance upon the Acquired
Assets; or (iv) assign, modify or cancel any Assumed Contract.
(b) During the Pre-Closing Period, Seller shall use its reasonable
efforts, subject to the requirement of the Bankruptcy Court and Bankruptcy Code,
to preserve the Business intact (except as Buyer may otherwise approve) and to
preserve its good will and business relationships with customers, suppliers,
employees and others.
(c) During the Pre-Closing Period, Seller shall use its best efforts
to (i) file the Motion at the earliest possible date and (ii) obtain approval
and entry by the Bankruptcy Court at the earliest possible date of the Bidding
Procedures Order, Sale Approval Order and other applicable orders.
(d) During the Pre-Closing Period, Seller shall provide Buyer with
such monthly reports and financial statements relating to the Business prepared
in connection with the Bankruptcy Case and such other information as Buyer may
from time to time reasonably request.
(e) Seller shall deliver to Buyer from time to time during the
Pre-Closing Period amendments and changes to the Schedules under Article IV of
this Agreement, disclosing therein all matters arising or discovered after the
date hereof which, if existing or occurring or known as of the date hereof,
would have been required to be set forth or described in such Schedules. No
supplement or amendment of the Schedules made pursuant to this Section 6.1 (e)
shall be deemed to cure any breach of any representation or warranty made by
Seller hereunder.
6.2 Access.
(a) During the Pre-Closing Period, the Buyer and its representatives
shall, during regular business hours, have free and full access to business
records, personnel, facilities and operations of the Seller relating to the
Business and/or Acquired Assets.
(b) During the Pre-Closing Period, the Buyer, at its sole cost and
expense, shall have the right to retain an environmental consultant to undertake
an environmental assessment of the Seller's New Bedford Facility, including,
without limitation, a Phase I assessment and, if recommended by the
environmental consultant, a Phase II assessment which may involve, among other
things, intrusive sampling and testing of the soil and groundwater, integrity
testing of any underground storage tanks, an asbestos survey and radon testing.
Seller shall provide or cause to be provided free and full access to the Buyer
and its consultants for the conduct of all such environmental assessments and
reports, and shall provide to the environmental consultant all known and
available information and documentation concerning any environmental matters
pertaining to the Business and/or Acquired Assets, including the New Bedford
Facility. Buyer shall repair all damage to the New Bedford Facility caused
directly by any such environmental testing conducted by or behalf of the Buyer.
6.3 Non-Competition Agreement. Buyer, Seller, Aerovox Mexico, Neuva Generacion
Manufacturas, S.A. de C.V. ("NGM"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ("▇▇▇▇▇▇▇") shall
enter into the Non-Competition Agreement on or prior to the Closing Date in
the form annexed hereto as Schedule 6.3 (the "Non-Competition Agreement").
6.4 Assumed Contracts. During the Pre-Closing Period, the Seller shall use
reasonable efforts to obtain a Bankruptcy Court order approving
assignment of the Assumed Contracts, and providing that Seller shall be
solely responsible for any cure obligations thereunder, and the Buyer
will reasonably cooperate with the Seller in obtaining such approvals.
6.5 Cooperation. During the Pre-Closing Period, the Seller and the Buyer
(i) shall promptly inform each other of any communication from any
governmental authority relating to this Agreement, the transactions
contemplated hereby and any related filing, notification or request for
approval and (ii) shall permit the other party to review in advance any
proposed written communication or information submitted to any such
governmental authority in response thereto.
6.6 Sublease of New Bedford Facility. At Closing, the Buyer and the Seller
or other designated entity shall enter into a sublease or other
agreement granting to the Buyer the right to use and occupy the entire
New Bedford Facility Property for a term of one (1) year as set forth
in the form of sublease annexed hereto as Schedule 6.6 (the "New
Bedford Facility Sublease"). On or prior to the Closing Date, the
Seller shall deliver either (a) a provision in the Sale Approval Order
in a form acceptable to Buyer in its sole discretion which makes
unneccessary the obtaining of any Lease Consents (as defined below) or
(b) a non-disturbance and subordination agreement and an estoppel
certificate and consent duly executed by each of Key Bank N.A., as
Seller's secured lender, and the New Bedford Redevelopment Authority
and the City of New Bedford, in the form acceptable to the Buyer in its
sole discretion(the "Lease Consents").
6.7 Relocation of Juarez Assets.
(a) On or prior to the Closing Date, Seller shall relocate all
finished goods, raw materials and work in process inventory items constituting
part of the Acquired Assets and presently located at the Seller's facility in
▇▇▇▇▇▇, Mexico (the "Juarez Inventory ") from such facility in Juarez, Mexico to
the Seller's facility in El Paso, Texas, except for those inventory items
required to satisfy the then current production requirements at the Juarez,
Mexico facility. Buyer shall be solely and exclusively responsible to pay all
costs and expenses relating to such relocation of the Juarez Inventory,
including without limitation, shipping, freight and insurance and taxes.
(b) Following delivery of written notice to Seller after the Closing,
Seller shall use good faith and its best efforts to relocate certain equipment
presently located in Juarez, Mexico and being acquired by Buyer as set forth on
Schedule 6.7(b) annexed hereto (to be agreed by Seller and Buyer prior to
Closing) (the "Juarez Equipment") to the New Bedford Facility within fourteen
(14) days after delivery of such notice, at the Seller's sole expense and, to
the extent that, after utilizing such good faith and best efforts, Seller is not
successful in relocating the Juarez Equipment as provided herein, then Buyer
shall not be entitled to any form of relief or purchase price adjustment
relating to the Juarez Equipment.
(c) Buyer may, at its sole option, designate the Seller to act as
contract manufacturer following the Closing in respect of the business at the
Juarez facility upon such terms and conditions as shall be mutually acceptable
to Buyer and Seller.
6.8 Employment Matters.
(a) Employment. Buyer shall offer employment in respect
of the period following the Closing Date to those
Business Employees who are actively employed in the
Business on the Closing Date exclusively at the New
Bedford Facility, except for those employees listed
on Schedule 6.8(a), who shall not be deemed to
constitute Business Employees hereunder (which
Schedule 6.8(a) may be amended from time to time
prior to the Closing Date provided, however, that the
exclusion of the number of employees listed on
Schedule 6.8(a) from Business Employees hereunder
shall not, by itself, trigger the notification
requirements under the WARN Act). Buyer shall not
offer or be deemed in any manner whatsoever to offer
employment to any other employee or former employee
of the Seller (whether or not employed by the
Business) at the New Bedford Facility or any other
facility of the Seller. The offer of employment
described above shall be solely and exclusively upon
such terms and conditions as shall be determined by
the Buyer in its sole and absolute discretion. The
employment by the Buyer of any Business Employee at
the New Bedford Facility who accepts the terms and
conditions of employment offered by the Buyer shall
commence on the Closing Date (or at such later date
specified by the Buyer). For purposes hereof,
Business Employees who accept employment with the
Buyer as of the Closing Date (or at such later date
specified by the Buyer) are hereinafter referred to
as "Post-Closing Employees".
(b) Employees. Prior to the Closing, the Seller shall use
reasonable efforts to retain the services of the
Business Employees at the New Bedford Facility, but
shall not be required to expend any additional funds
outside the Ordinary Course. Seller agrees to
cooperate with the Buyer by providing the Buyer
during the Pre-Closing Period with reasonable access
to meet with the Business Employees and to distribute
to such Business Employees such forms and other
documents relating to employment by the Buyer after
the Closing Date as the Buyer shall reasonably
request. Nothing in this Agreement shall be deemed to
require the Buyer to retain any of the Post-Closing
Employees for any period of time or at any particular
compensation rate or in any particular position or
prevent the Buyer from being able to continue, modify
or establish
such benefits and conditions of employment as the
Buyer shall determine in its sole discretion.
(c) No Assumption of Employee Benefits or Liabilities.
Buyer shall not assume any of the Employee Benefit
Plans (including any multi-employer plans), or any
rights, duties, obligations or liabilities of any
kind or nature thereunder, nor shall it become a
successor employer or be responsible in any manner
whatsoever for any obligations or responsibilities of
the Seller and/or its subsidiaries and Affiliates
with respect to the participation of any such party
in any Employee Benefit Plan or any other benefit
plan or arrangement of such entities, nor shall the
Buyer be obligated by this Agreement to make any
provision with respect to employee benefits of any
kind or nature whatsoever after the Closing Date. The
Buyer shall not assume any obligation, duty, right or
liability to any employee of the Business (whether or
not a Business Employee) in connection with such
employee's employment (including, without limitation,
with respect to any employment or similar agreement
or arrangement) with the Seller and/or its
subsidiaries or Affiliates in respect of any period
prior to the Closing Date or arising out of the
transactions contemplated by this Agreement. The
Buyer shall not be responsible in respect of any
payroll, employee benefits (including pension,
health, welfare, vacation, sick pay, severance and
insurance benefits) and/or other compensation of any
kind or nature whatsoever payable or accrued in
respect of any employee and/or former employee of the
Business relating to any period prior to the Closing
or arising out of the transactions contemplated by
this Agreement, whether an employee of the Seller
and/or any of its subsidiaries or Affiliates, whether
or not such employee is a Business Employee or
Post-Closing Employee, and whether or not pursuant to
any Employee Benefit Plan, except only as expressly
set forth in Section 6.8(e) below in respect of
accrued vacation, personal time and sick pay only for
Post-Closing Employees. Notwithstanding the
foregoing, following the Closing Date, Buyer shall be
responsible for the obligations for future
performance solely from and after the Closing Date in
respect of Post-Closing Employees only under any
collective bargaining agreement which shall be listed
as an Assumed Contract in Schedule 2.3 hereto.
(d) Vesting. The Seller shall take such actions as are
necessary to fully vest, as of the Closing Date, the
accrued benefits of each Post-Closing Employee under
each Employee Benefit Plan which is employee pension
benefit plan (within the meaning of Section 3(2) of
ERISA).
(e) Vacation, Personal Time and Sick Pay. Buyer shall be
responsible for any accrued but unused vacation,
personal time and sick pay entitlements of any
Post-Closing Employee only as set forth in Schedule
6.8(e) (which Schedule 6.8(e) may be amended from
time to time prior to the Closing Date). Seller shall
be responsible of any such accrued vacation, personal
time and sick pay entitlements of any other employee
or former employee of the Business.
(f) Severance Plans. Seller shall be solely and
exclusively responsible for any severance
obligations, if any, of any kind or nature
whatsoever, including severance obligations arising
out of the transactions contemplated by this
Agreement, in respect of any Business Employees
(whether or not a Post-Closing Employee, except that
Seller shall not be responsible for severance
obligations relating to Post-Closing Employees in
respect of any severance occurring following the
Closing Date) and any other employees or former
employee of the Business pursuant to any stay and pay
agreement, employment retention, severance bonus or
any other severance plan or arrangement of the
Seller, if any, including without limitation, those
severance plans set forth in Schedule 6.8(f).
(g) WARN Act. Subject to the provisions set forth herein,
the Buyer shall be responsible for the obligations
and liabilities under the Worker Adjustment and
Retraining Notification Act, as amended ("WARN"),
occurring following the Closing Date with respect to
Post-Closing Employees and arising out of the
transactions contemplated hereby. During the
Pre-Closing Period, the Seller shall not cause any
plant closing or reduction in force that would be
considered an employment loss (as defined under the
state or federal WARN Act) even if such employment
loss does not immediately trigger a notice obligation
under the state or federal WARN Act.
(h) Third Party Beneficiaries. No provision of this Section 6.8 shall
create any third-party beneficiary rights in any Business Employee or former
employee of the Business (including any beneficiary or dependent thereof),
including, without limitation, any right to continued employment or employment
in any particular position with the Buyer for any specified period of time after
the Closing Date.
6.9 Grant of
Temporary License. For a period of one (1) year following the Closing
(the
"Temporary License Period"), the Seller shall have the right to grant
temporary non-exclusive licenses to use the name "Aerovox" and related
domain name for manufacturing purposes in the ordinary course of the
applicable business being purchased (the "Temporary License") only to
unaffiliated third parties (except for ▇▇▇▇▇▇▇) who shall purchase or
acquire assets or capital stock of a subsidiary which are not Acquired
Assets from the Seller and/or its Affiliates. Any Temporary License
granted by the Seller to such unaffiliated third party purchasers shall
(i) not relate in any manner to the Business or any products thereof
and the applicable business being acquired shall not compete directly
or indirectly with the Business; (ii) provide for a term not exceeding
one (1) year; and (iii) and otherwise be subject to the approval of,
and upon terms and provisions satisfactory to, the Buyer. The Buyer
agrees to take appropriate action to effectuate such licenses in the
event that such third party transactions occur during the Temporary
License Period.
6.10 Submission for Bankruptcy Court Approval.
(a) In connection with the transactions contemplated by this
Agreement, the Seller shall, on or prior to April 26, 2002, file with the
Bankruptcy Court a motion or motions (the "Motion") seeking entry of each of the
following orders:
(i) Bidding Procedures Order. An order (the "Bidding Procedures
Order") in the form of Schedule 6.10A, providing for the Bidding Procedures and
payment of the Termination Fee as set forth in Section 9.1 hereof, which Bidding
Procedures Order shall be in form and substance satisfactory to the Buyer and
its counsel in their sole discretion.
(ii) Sale Approval Order. An order or orders (the "Sale Approval
Order") in the form of Schedule 6.10B, which Sale Approval Order shall be in
form and substance satisfactory to the Buyer and its counsel in their sole
discretion, pursuant to Sections 105, 363, 365 and 1146(c) and other applicable
provisions of the Bankruptcy Code, among other things: (A) authorizing and
approving the sale of the Acquired Assets to the Buyer pursuant to this
Agreement free and clear of all Encumbrances whatsoever, and approving the terms
of this Agreement; (B) finding that the Buyer is acting in good faith, and is
entitled to the protections of a buyer under Section 363(m) of the Bankruptcy
Code pursuant to the transactions contemplated by this Agreement; (C) finding
that the transfer to the Buyer and the transactions contemplated by this
Agreement will be free and exempt from all federal, state municipal and other
laws imposing a transfer, stamp, excise, recording or other similar Tax; (D)
containing such other findings and provisions as may be reasonably requested by
the Buyer (including a finding that notice of the transactions contemplated by
this Agreement, including notice to all parties to the Assumed Contracts, has
been properly given) to assure that: (1) title to the Acquired Assets will be
transferred to the Buyer free and clear of all Encumbrances of any kind or
nature whatsoever; (2) the Seller will be duly authorized to execute and deliver
such documents and instruments as the Seller is required to execute and deliver
pursuant to the terms of this Agreement; and (3) the Seller, upon assuming and
assigning to the Buyer of each of the Assumed Contracts, will have properly
assumed and assigned the same, and there will be no defaults thereunder as of
the Closing Date and the assignment to Buyer shall not constitute a default
thereunder or constitute a
violation of any Requirement of Law; (4) the Buyer shall not be liable for or
assume any pre-petition or post-petition debts, liabilities, obligations or
commitments of the Seller or any other party of any kind or nature whatsoever in
respect of the Business or Acquired Assets or otherwise, except for the
post-closing obligations under any Assumed Contracts and the obligations of
Buyer under Section 6.8(e) and Section 6.8(g); (5) approving the New Bedford
Facility Sublease in the form annexed hereto as Exhibit 6.6 and without the
necessity of obtaining any Lease Consents thereto (and providing for the
execution and delivery by KeyBank, N.A., Seller's secured lender, of a
non-disturbance agreement in form reasonably acceptable to the Buyer, Buyer's
lender and Key Bank); (E) finding that the Buyer will have no liabilities or
obligations of any kind or nature whatsoever in respect of the Excluded
Belleville Avenue Property and/or any judgments, orders, awards or decrees
entered into by the Seller or any other Person relating thereto; (F) finding
that any customers of Buyer following the Closing Date shall not have a right of
set-off against Buyer arising out of any claims, contracts and other dealings
with Seller; (G) finding that no Person, including any Affiliate of Seller, owns
any Acquired Assets or any interest therein (other than security interests as
set forth in Schedule 4.3); and (H) no consents or approvals of any other
Governmental Authorities or any third parties are required to be obtained in
connection with the transaction contemplated hereby.
(iii) Approval of Bidding and Sale Approval Orders.
Notwithstanding Buyer's approval rights with respect to the Bidding Procedures
Order and the Sale Approval Order, Buyer shall not require that any such order
include any provision which is in direct contravention of the express provisions
of this Agreement.
(b) Seller shall obtain the Bankruptcy Court's approval of: (i) the
Bidding Procedures Order no later than May 1, 2002; (ii) the Sale Approval Order
no later than June 28, 2002; and (iii) any other order of the Bankruptcy Court
relating to this Agreement or the transactions contemplated hereby, no later
than fifteen (15) days following the date of filing of a motion for approval
thereof, which periods may be extended by the Buyer in its reasonable
discretion. Seller and the Buyer shall inform one another regarding pleadings
which any of them intend to file, or positions any of them intend to take, with
the Bankruptcy Court in connection with or which might reasonably affect, the
Bankruptcy Court's approval of the Bidding Procedures Order and Sale Approval
Order or any other such order. Neither the Seller nor the Buyer will file any
pleadings or take any position inconsistent with obtaining the Bankruptcy
Court's approval of the Bidding Procedures Order or the Sale Approval Order or
any such other order subject to Seller's fiduciary obligations. Seller shall
promptly (and, in any event, within one (1) Business Day after the receipt of
any written request) provide the Buyer and its counsel with copies of all
notices, filings and orders of the Bankruptcy Court (and other courts)
pertaining to the motion for approval of the Bidding Procedures Order, Sale
Approval Order or any other order relating to any of the transactions
contemplated by this Agreement.
(c) If the Bidding Procedures Order, Sale Approval Order or any other
orders of the Bankruptcy Court relating to this Agreement or the transactions
contemplated hereby shall be appealed by any Person other than the Buyer (or if
any petition for certiorari or motion for reconsideration, amendment,
clarification, modification, vacation, stay, rehearing or reargument
shall be filed with respect to the Bidding Procedures Order, Sale Approval Order
or other such order), then if and to the extent required by Buyer, Seller shall,
at Buyer's sole cost and expense, take all steps to diligently to prosecute such
appeal, petition or motion and Seller shall use its reasonable efforts to obtain
an expedited resolution of any such appeal, petition or motion.
6.11 Bulk Sales Compliance or Transfer Laws. Based on the protections to be
afforded to the Buyer under the Sale Approval Order, the Buyer hereby
waives compliance by the Seller with the provisions of the bulk sales
or transfer laws of all applicable jurisdictions.
6.12 Access to Information; Maintenance of Records.
(a) Following the Closing, for a period of the later of (i) six
(6) years after the Closing Date and (ii) the date of entry of an order of the
Bankruptcy Court closing the Bankruptcy Case, or if converted to a case under
Chapter 7 of the Bankruptcy Code, an order of the Bankruptcy Court closing such
case, each party and its representatives shall have reasonable access to all of
the books and records compiled with respect to the period prior to the Closing
Date relating to the Business or the Acquired Assets, including all information
pertaining to the Assumed Contracts, all employee records or other personnel and
medical records required by law, legal process or subpoena, in the possession of
the other party to the extent that such access may reasonably be required by
such party in connection with the Assumed Contracts or Excluded Liabilities, or
other matters relating to or affected by the operation of the Business and the
Acquired Assets.
(b) Such access shall be afforded by the party in possession of
such books and records upon receipt of reasonable advance notice and during
normal business hours; provided, however, that: (i) any such access shall be
conducted in such a manner as not to interfere unreasonably with the operation
of the business of any party; (ii) no party shall be required to take any action
which would constitute a waiver of the attorney-client privilege; (iii) no party
shall be required to take any action which would reveal confidential or
proprietary information, except that any information relating to the Business
prior to the Closing shall not be deemed to be deemed confidential or
proprietary information; and (iv) no party shall be required to supply the other
party with any information which such party is under a legal obligation not to
so supply. The applicable party exercising this right of access shall be solely
responsible for any costs or expenses incurred by it hereunder.
(c) If the party in possession of such books and records shall
desire to dispose of any such books and records prior to the expiration of such
period, such party shall, prior to such disposition, give the other party a
reasonable opportunity at such other party's expense, to segregate and remove
such books and records as such other party may select.
6.13 Condition of Acquired Assets. Buyer agrees and acknowledges that (a)
the Buyer's decision to proceed with the transactions contemplated by
this Agreement is based upon the Buyer's own inspection and
investigation of the Acquired Assets and the Business; and (b) the
Buyer is familiar with the Acquired Assets and the Business and has
been afforded the full opportunity, to the extent it desired to do so,
to inspect and review (i) the
books and records of the Seller and (ii) such other operational and
financial information as the Buyer has found appropriate including,
without limitation, any survey, appraisal, environmental, engineering,
sales, production or employment matters. The sale and purchase of the
Acquired Assets hereunder shall be without representation or warranty
of any kind, express or implied, except as provided in this Agreement.
Nothing contained herein shall be deemed to limit or restrict the right
of Buyer to conduct due diligence investigations or examinations in
respect of the Business and/or Acquired Assets during the entire
Pre-Closing Period through the Closing Date; provided, however that the
results of any such investigations or examinations shall not constitute
a condition to Closing hereunder.
6.14 Further Assurances. Subject to the terms and conditions of this
Agreement and the requirements of the Bankruptcy Court or Bankruptcy Code, each
of the parties hereto shall use its reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things reasonably
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the sale of the Acquired Assets in accordance with
this Agreement, including using best efforts to ensure timely satisfaction of
the conditions precedent to each party's obligations hereunder. From time to
time on or after the Closing Date, Seller shall, at its own expense, execute and
deliver such documents to the Buyer as the Buyer may reasonably request in order
to further evidence Buyer's title to the Acquired Assets. From time to time
after the date hereof, each party at its own expense, shall execute and deliver
such documents to the other party as such other party may reasonably request in
order to more effectively consummate the sale of the Acquired Assets and the
assumption and assignment of the Assumed Contracts in accordance with this
Agreement.
6.15 Exclusivity. From and after the date hereof to the date of entry
of the Bidding Procedures Order by the Bankruptcy Court (the "Exclusive
Period"), neither Seller nor any of its Affiliates or any of their respective
officers, directors, shareholders or agents shall, directly or indirectly,
through any representative or otherwise, enter into any agreement, discussion or
negotiation with, or provide any information to, or solicit, encourage,
entertain or consider any inquiries or proposals from, any person or entity
(other than Buyer) with respect to any sale or possible sale of the Acquired
Assets or any significant portion thereof, or any stock purchase, merger or
other business combination involving the Business.
6.16 Use of Seller's Names or Intellectual Property. Seller agrees
that, on or prior to the Closing Date, Seller shall take all actions reasonably
deemed necessary or appropriate by Buyer to (i) cause the names of Seller and
its subsidiaries which currently utilize the names "Aerovox", "Aeromet",
"Supermet" and "Blue ▇▇▇▇" to be changed to names that does not include the
names "Aerovox", "Aeromet", "Supermet" and "Blue ▇▇▇▇" or contain any references
thereto, including without limitation, changing the name of the caption of the
Bankruptcy Case, (ii) not advertise or hold themselves out as Seller or an
Affiliate thereof, (iii) not to use any of the Intellectual Property of Seller
which are part of the Acquired Assets, and (iv) take all actions as may be
reasonably requested by Buyer to vest in Buyer or its designees all right, title
and interest in the names "Aerovox ", "Aeromet", "Supermet" and "Blue ▇▇▇▇"
(including, but not limited to, an assignment of all Seller's right, title and
interest in any trademarks or servicemarks registered anywhere in the world, or
trademark or servicemark applications or renewal filings pending anywhere in the
world, using the names "Aerovox", "Aeromet", "Supermet", and "Blue ▇▇▇▇"), and
other Intellectual Property that are part of the Acquired Assets, and any
reasonable costs and expenses relating thereto shall be paid by the Buyer. The
provisions of this Section 6.16 shall be subject to the right of Seller to grant
the Temporary License to certain third party purchasers of other assets pursuant
to Section 6.9 hereof.
6.17 Tax Matters.
(a) Buyer and Seller agree to furnish or cause to be furnished
to each other, upon request, as promptly as practicable, such information and
assistance relating to the Business and/or Acquired Assets (including reasonable
access to books and records) as is reasonably necessary for the preparation and
filing of all Tax Returns in connection with matters relating to or affected by
the operations of Seller prior to the Closing, including the making of any
election relating to Taxes, the preparation for any audit by any taxing
authority, and the prosecution or defense of any claim, suit or proceeding
relating to any Tax. Seller and Buyer shall cooperate with each other in the
conduct of any audit or other proceeding relating to Taxes involving the
Business and/or Acquired Assets.
(b) Seller shall be solely and exclusively responsible to fully
pay and satisfy in a prompt and timely manner all Taxes, whenever arising,
either prior to or at any time following the Closing, relating to any period
prior to the Closing Date in respect of the operation of the Business and/or
Acquired Assets.
(c) Seller shall seek to include in the Sale Approval Order a
decretal paragraph which provides that, in accordance with Section 1146(c) of
the Bankruptcy Code, the transactions contemplated hereby are steps in the
formulation, or anticipation of the formulation, of a Chapter 11 plan for Seller
and, as such, the making or delivery of any instrument of transfer to effectuate
the transactions contemplated hereby shall be exempt from all Taxes. Following
the Closing Date, Buyer shall file any necessary Tax Returns and other
documentation with respect to the transfer of the Acquired Assets and Seller
shall fully cooperate and join in the execution of any Tax Returns and other
documentation at Buyer's request.
6.18 APA Documents Approval. The parties hereby acknowledge that none
of the APA Documents (as defined below) have been annexed to this Agreement as
of the date of execution and delivery of this Agreement (April 18, 2002). On or
prior to April 26, 2002 (the "APA Document Approval Date"), Buyer and its
counsel shall have approved in their sole discretion the form and substance of
each of the APA Documents (as defined below) and all of the APA Documents in
such approved form shall have been annexed (or deemed to be annexed) to this
Agreement in a manner acceptable to Buyer. For purposes hereof, the "APA
Documents"
shall mean all documents, instruments, schedules and exhibits referenced in this
Agreement, including without limitation, the following: (i) Bidding Procedures
Order; (ii) Sale Approval Order; (iii) New Bedford Facility Sublease; (iv)
Non-Competition Agreement; (v) ▇▇▇▇ of Sale, Assignment and Assumption Agreement
and other instruments relating to the transfer and conveyance of the Acquired
Assets; (vi) all schedules and exhibits to Article IV hereof setting forth the
representations and warranties of the Seller; and (vii) all other schedules and
exhibits to this Agreement.
6.19 Product Shipments. During the period from and after the
completion of the physical count of the Inventory as set forth in Section 2.6(a)
to the Closing Date, Seller shall not ship any product or other orders to
customers.
ARTICLE VII
CONDITIONS TO THE SELLER'S OBLIGATIONS
The obligations of the Seller to consummate the transactions
contemplated hereby and complete the Closing are subject, to the satisfaction,
on or prior to the Closing Date, of each of the following conditions, any of
which may be waived by the Seller :
7.1 Entry of Sale Approval Order. The Sale Approval Order shall have
been entered by the Bankruptcy Court and no court of competent jurisdiction
shall have entered an order staying such Sale Approval Order pending appeal.
7.2 Instruments of Conveyance. The Buyer shall have executed and
delivered to the Seller at the Closing all of the documents provided for in
Section 3.2(b) hereof.
7.3 Absence of Litigation. No court action or proceeding shall have
been commenced to restrain or prohibit the transactions contemplated by this
Agreement, or the acquisition by the Buyer of the Acquired Assets following the
Closing.
7.4 Payment of the Purchase Price. The Buyer shall have paid the
Purchase Price (as adjusted) in immediately available funds.
ARTICLE VIII
CONDITIONS TO THE BUYER'S OBLIGATIONS
The obligations of the Buyer to consummate the transactions
contemplated hereby and complete the Closing are subject to the satisfaction, on
or prior to the Closing Date, of each of the following conditions, any of which
may be waived by the Buyer:
8.1 No Encumbrances. All of the Acquired Assets shall be sold and
transferred to the Buyer at the Closing with good, valid and marketable title,
free and clear of all Encumbrances, - as provided in the Sale Approval Order.
8.2 Filing of Motion. On or prior to April 26, 2002, the Seller shall
have filed the Motion with the Bankruptcy Court, in form and substance
reasonably acceptable to the Buyer as set forth in Section 6.10 hereof.
8.3 Entry of Bidding Procedures Order and Sale Approval Order. (i) On
or prior to May 1, 2002, the Bidding Procedures Order shall have been entered by
the Bankruptcy Court, in form and substance acceptable to the Buyer and its
counsel in their sole discretion, and (ii) on or prior to June 28, 2002, the
Auction shall have occurred and the Sale Approval Order, in form and substance
acceptable to the Buyer and its counsel in their sole discretion, shall have
been entered by the Bankruptcy Court and no court of competent jurisdiction
shall have entered an order staying such Sale Approval Order pending appeal.
8.4 No Material Adverse Change. During the Pre-Closing Period, there
shall have been no material adverse change in the Business and/or Acquired
Assets or the operations or financial condition or future prospects thereof;
provided, however, that the facts and circumstances resulting in any adjustment
to the Purchase Price shall not constitute a material adverse change.
8.5 Excluded Belleville Avenue Property. The Sale Approval Order shall
include a provision, in form acceptable to the Buyer and its counsel, in their
sole discretion , to the effect that the Buyer will have no liabilities or
obligations of any kind or nature whatsoever relating to environmental
protection or any other matter in respect of the Excluded Belleville Avenue
Property and/or any judgments, orders, awards or decrees entered into by or
against the Seller or any other Person relating thereto.
8.6 Instruments of Conveyance. Seller shall have executed and
delivered to the Buyer at the Closing the ▇▇▇▇ of Sale, Assignment and
Assumption Agreement and all of the other documents and instruments provided for
in Section 3.2(a) hereof.
8.7 Absence of Litigation. Other than the Bankruptcy Case, no action,
suit, proceeding or investigation shall have been instituted, and be continuing
before a court or before or by any Governmental Authority, or shall have been
threatened and be unresolved, to restrain or to prevent or to obtain damages in
respect of, the carrying out of the transactions contemplated hereby, or which
would, if adversely determined, materially affect the right of Buyer to own or
operate the Business and/or the Acquired Assets following the Closing Date.
8.8 Representations and Warranties. All representations and warranties
of the Seller contained in this Agreement and in any schedule or exhibit shall
be true and correct in all material respects as of the Closing Date, as if made
at the Closing and as of the Closing Date.
8.9 Performance of Agreements. Seller shall have performed and
complied in all material respects with all covenants and agreements required by
this Agreement to be performed or complied with by the Seller prior to or at the
Closing.
8.10 Certificates. Buyer shall have received a certificate, dated as
of the Closing Date, duly executed by the Chief Executive Officer of the Seller,
as to the satisfaction of the conditions contained in Sections 8.8 and 8.9
hereof.
8.11 New Bedford Facility Sublease. Buyer and Seller shall have
executed and entered into the New Bedford Facility Sublease, and shall have
obtained all of the Lease Consents, if and to the extent required by Section
6.6, each in form and substance satisfactory to the Buyer.
8.12 Relocation of Assets. The ▇▇▇▇▇▇ Inventory shall have been
relocated pursuant to Section 6.7 hereof and in a manner reasonably satisfactory
to Buyer.
8.13 Non-Competition Agreement. Buyer, Seller, Aerovox Mexico, NGM and
▇▇▇▇▇▇▇ shall have entered into and executed the Non-Competition Agreement
pursuant to Section 6.3 hereof in form and substance satisfactory to the Buyer.
ARTICLE IX
BIDDING PROCEDURES; TERMINATION
9.1 Bidding Procedures; Termination Fee
(a) Bidding Procedures. As set forth in Section 8.3, the
Bankruptcy Court shall enter the Bidding Procedures Order, on or prior to the
date specified in therein, expressly approving the following bidding procedures
(collectively, the "Bidding Procedures"):
(i) Any competing bid, offer, plan of reorganization
or other arrangement shall be deemed to qualify as a competing
bid (a "Competing Bid") only if made upon terms and provisions
substantially similar to those set forth in this Agreement and in
respect of the sale and purchase of substantially all of the
Acquired Assets and for an aggregate purchase price in a net cash
amount of at least % in excess of the Purchase Price hereunder;
(ii) Any competing bidder pursuant to subsection (i) above shall be
required to deliver a cash deposit to the Seller in an amount equal to four
percent (%) of the amount of such competing bid at the time of submission of
such bid;
(iii) Any incremental Competing Bid made subsequent to the initial
overbid shall be at least $50,000 greater than the most recent bid; and
(iv) Any plan of reorganization, liquidation or other
arrangement filed or
submitted following the date hereof by Seller with the Bankruptcy
Court shall include, as part of such plan or arrangement, the
purchase of the Acquired Assets by the Buyer upon the terms and
provisions set forth in this Agreement, or which terms and
provisions hereof may be incorporated by reference in such plan or
arrangement. In addition, Seller shall not seek confirmation of
its plan of reorganization filed with the Bankruptcy Court on or
about April 15, 2002 (the "Filed Plan"), insofar as such Filed
Plan is inconsistent with the terms and provisions hereof.
(b) Termination Fee.
(i) Upon entry of the Bidding Procedures Order, the
termination fee provisions set forth in the Order of the
Bankruptcy Court entered on November 15, 2001 shall be deemed
terminated in respect of this Agreement.
(ii) The Bidding Procedures Order shall provide for the
right of the Buyer to receive a termination fee equal to two (2%)
percent of the entire Purchase Price ($170,000.00) (the
"Termination Fee") promptly upon termination of this Agreement as
a result of (except for a termination as a result of the Buyer's
willful and material breach) the following events: (i) approval by
the Bankruptcy Court, or any court of competent jurisdiction, of
any Competing Bid; (ii) the determination by the Seller or any
Chapter 11 or 7 trustee of Seller not to proceed with the
transactions under this Agreement; (iii) the sale of all or
substantially all of the assets or outstanding capital stock of or
business combination involving the Seller and a party other than
the Buyer; (iv) the conversion of the Bankruptcy Case into a case
under Chapter 7 of the Bankruptcy Code; (v) the filing by Seller
of a liquidating chapter 11 plan without acceptance of any asset
purchase; or (vi) the failure to satisfy any of the conditions set
forth in Article VIII hereof after entry of the Bidding Procedures
Order (unless such failure results directly from the action of
Buyer). Notwithstanding the foregoing, the failure to satisfy the
condition in Section 8.8 hereof only (but not any other condition
to Closing) shall not entitle Buyer to the Termination Fee unless
such failure shall have a material adverse effect on the operation
of the Business. The Termination Fee shall be paid directly out of
the cash proceeds of the purchase price paid by any competing
bidder or person or entity funding any plan, or otherwise out of
the estate of the Seller as a super priority administrative claim.
9.2 Termination.
(a) Termination. This Agreement may be terminated and the
transactions provided for herein abandoned at any time prior to the Closing Date
by:
(i) the mutual written consent of the Seller and the
Buyer; or
(ii) Buyer, if any of the conditions set forth in Article
VIII hereof shall not have been fulfilled on or prior June
18, 2002 (as may be extended for a
10-day period to June 28, 2002 pursuant to Section 3.1
hereof) or shall become incapable of fulfillment and shall
not have been waived, except if such condition shall have
become incapable of fulfillment due to the material and
willful breach of the Buyer; or
(iii) Seller, if any of the conditions set forth in Article
VII hereof shall not have been fulfilled on or prior to June
18, 2002 (as may be extended for a 10-day period to June 28,
2002 pursuant to Section 3.1 hereof ) or shall become
incapable of fulfillment and shall not have been waived,
except if such condition shall have been incapable of
fulfillment due to the material and willful breach of the
Seller; or
(iv) Buyer, if the Bidding Procedures Order has not been
entered by the Bankruptcy Court on or prior to May 1, 2002; or
(v) Buyer, if the Sale Approval Order has not been
entered by the Bankruptcy Court on or before June 28, 2002; or
(vi) Buyer, in the event that all of the APA Documents
shall not be approved by the Buyer on or before April 26, 2002
pursuant to Section 6.18 hereof; or
(vii) Seller, if Buyer is not the winning bidder at the
Auction.
(b) Procedure and Effect of Termination. In the event of
termination of this Agreement and abandonment of the transactions contemplated
hereby by either or both of the parties pursuant to Section 9.2(a) above,
written notice thereof shall forthwith be given by the terminating party to the
other party, and this Agreement shall thereupon terminate and the transaction
contemplated hereby shall be abandoned without further action on the part of any
of the parties hereto. If this Agreement is terminated as provided in this
Section 9.2:
(i) all of the terms and provisions of this Agreement
shall thereupon be immediately void and without further force or
effect, except for the provisions set forth in this Section 9.2
and in Sections 9.1(b) (Termination Fee), 3.3 (expenses), 10.13
(confidentiality) and 10.14 (remedies), respectively;
(ii) all filings, applications and other submissions made
pursuant to this Agreement, to the extent practicable, shall be
withdrawn from the Governmental Authority to which they were made;
(iii) all Confidential Information from the Seller shall be
returned to the Seller, and all Confidential Information from the
Buyer shall be returned to the Buyer;
(iv) Buyer shall be entitled to the Termination Fee from
the Seller, if and to the extent provided in Section 9.1(b)(ii)
hereof and the Bidding Procedures Order; and
(v) the Deposit and any interest earned thereon shall
promptly be delivered by Escrow Agent in accordance with the terms
of the Escrow Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Publicity. Each party shall consult with the other prior to
issuing any press release or otherwise making any public statements with respect
to the transactions contemplated hereby, and no party shall issue any such press
release or make any such public statements or comments relating to such
transactions without the prior written consent of the other (which shall not be
unreasonably withheld), except as may be required by an applicable law.
10.2 No Third-Party Beneficiaries. Nothing in this Agreement shall be
construed as giving any Person other than the parties hereto any legal or
equitable right, remedy or claim under or with respect to this Agreement.
10.3 Entire Agreement; Amendments and Waivers. This Agreement, together
with all exhibits and schedules hereto, constitutes the entire agreement among
the parties pertaining to the subject matter hereof, and merges and supersedes
all prior agreements, understandings, negotiations and discussions, whether oral
or written, of the parties with respect thereto. No amendment, supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by on or behalf of the party to be bound thereby. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
10.4 Assignment; Successors. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
(including any trustee appointed in the Bankruptcy Case) and permitted assigns
of the parties hereto. No assignment of any rights or delegation of any
obligations provided for herein may be made by any party hereto without the
express written consent of the other party. Notwithstanding the foregoing, the
Buyer may at any time assign all or any portion of its right, title and interest
under this Agreement to any of its Affiliates without the consent or approval of
the Seller.
10.5 Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when received, if personally delivered;
upon receipt of telephonic confirmation, if transmitted by telecopy or
facsimile; the day after it is sent, if sent for next day delivery to a
domestic address by recognized overnight delivery service (including Federal
Express); and three (3) days after mailing, if sent by certified or registered
mail, return receipt requested. In each case, notice shall be sent to:
If to the Seller, addressed to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Aerovox Incorporated
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & King, P.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Buyer, addressed to: Parallax Power Components, LLC
▇▇▇ ▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Shiboleth, Yisraeli, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
10.6 Choice of Law. This Agreement shall be construed and interpreted,
and the rights of the parties determined in accordance with, the laws of the
Commonwealth of Massachusetts (without regard to its conflicts of laws
principles). Each party irrevocably consents to the service of any and all
process in any action or proceeding arising out of or relating to this Agreement
by the transmitting of copies of such process to each party at its address
specified in Section 10.5 and in a manner provided for in Section 10.5. The
parties hereto irrevocably submit to the exclusive jurisdiction of the
Bankruptcy Court (or any court exercising appellate jurisdiction over the
Bankruptcy Court) over any dispute arising out of or relating to this Agreement
and any other agreement or instrument contemplated hereby or entered into in
connection herewith, or any of the transactions contemplated hereby or thereby
and any such dispute shall be deemed to
have arisen in the Commonwealth of Massachusetts. Each party hereby irrevocably
agrees that all claims in respect of such dispute or proceeding may be heard and
determined in such courts. The parties hereby irrevocably waive, to the fullest
extent permitted by applicable law, any objection which they may now or
hereafter have to the laying of venue of any such dispute brought in such court
or any defense of inconvenient forum in connection therewith.
10.7 Construction. The headings and captions of the various Articles
and Sections of this Agreement have been inserted solely for purposes of
convenience, are not part of this Agreement, and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Agreement. All Exhibits and Schedules attached are made a part hereof. Wherever
in this Agreement the singular number is used, the same shall include the
plural, and the masculine gender shall include the feminine and neuter genders,
and vice versa, as the context shall require.
10.8 No Waiver. The failure of either party hereto to seek redress for
any breach, or to insist upon the strict performance, of any covenant or
condition of the Agreement by the other shall not be, or be deemed to be, a
waiver of the breach or failure to perform nor prevent a subsequent act or
omission in violation of, or not strictly complying with, the terms hereof from
constituting a default hereunder.
10.9 Multiple Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.10 Invalidity. In the event that any one or more of the provisions,
or any portion thereof, contained in this Agreement or in any other instrument
referred to herein, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, then such provision shall remain valid and
enforceable to the maximum extent permitted by law. Such invalidity, illegality
or unenforceability shall not affect any other provision, or any portion
thereof, of this Agreement or any other such instrument.
10.11 Cumulative Remedies. All rights and remedies of either party
hereto are cumulative of each other and of every other right or remedy such
party may otherwise have at law or in equity, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies.
10.12 Representation by Counsel; Mutual Negotiation. Each party has
been represented by counsel of its choice in negotiating this Agreement. This
Agreement shall therefore be deemed to have been negotiated and prepared at the
joint request, direction and construction of the parties, at arm's-length with
the advice and participation of counsel, and will be interpreted in accordance
with its terms without favor to any party.
10.13 Confidential Information. Each party hereby agrees that such
party and its representatives will hold in strict confidence all information and
documents received from the other parties (the "Confidential Information") and,
if the transactions herein contemplated shall not be
consummated, each party will continue to hold the Confidential Information in
strict confidence and will return to such other parties all such documents
(including the exhibits and schedules hereto) then in such receiving party's
possession without retaining copies thereof; provided, however, that each
party's obligations under this Section 10.13 to maintain such confidentiality
shall not apply to any information or documents that are in the public domain at
the time furnished by the others or that become in the public domain thereafter
through any means other than as a result of any act of the receiving party or of
its agents, officers, directors or stockholders, as the case may be, which
constitutes a breach of this Agreement, or that are required by the Bankruptcy
Court or Bankruptcy Code or other applicable Requirement of Law to be disclosed.
10.14 Remedies. Seller and Buyer hereby acknowledge and agree that
money damages may not be an adequate remedy for any breach or threatened breach
of any of the provisions of this Agreement and that, in such event, Seller or
its successors or assigns, or Buyer or its successors or assigns, as the case
may be, may, in addition to any other rights and remedies existing in their
favor, apply to any court of competent jurisdiction for specific performance,
injunctive and/or other relief in order to enforce or prevent any violations of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal on their respective behalf, by their respective duly
authorized officers, all as of the day and year first above written.
Aerovox Incorporated
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
Parallax Power Components, LLC
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Person