Exhibit 99.01
ASSET PURCHASE AGREEMENT
By and Between
▇▇▇▇▇▇▇▇ High Voltage Electronics Corporation, as Buyer,
and
Del Global Technologies Corp., as Seller
Dated as of October 1, 2004
TABLE OF CONTENTS
ARTICLE I
ASSETS TO BE PURCHASED AND ASSUMPTION OF OBLIGATIONS...........................1
Section 1.1 (a) Description of Assets....................................1
Section 1.2 Assumption of Certain Liabilities.............................3
Section 1.3 Non-Assignment of Certain Property............................4
Section 1.4 Liabilities Not Assumed.......................................4
ARTICLE II
PURCHASE PRICE.................................................................4
Section 2.1 Consideration.................................................4
ARTICLE III
CLOSING........................................................................5
Section 3.1 Closing.......................................................5
ARTICLE IV
REPRESENTATIONS AND WARRANTIES.................................................5
Section 4.1 Representations and Warranties of Buyer.......................5
Section 4.2 Representations and Warranties of Seller......................7
ARTICLE V.....................................................................15
COVENANTS.....................................................................15
Section 5.1 Preservation of Books and Records............................15
Section 5.2 Additional Covenants.........................................16
Section 5.3 Sales and Transfer Taxes.....................................16
Section 5.4 Transferred Employees........................................16
Section 5.5 Valhalla Lease Assignment....................................17
Section 5.6 Noncompete...................................................17
ARTICLE VI
DELIVERIES AT CLOSING.........................................................17
Section 6.1 Buyer Deliveries.............................................17
Section 6.2 Seller Deliveries............................................18
ARTICLE VII
INDEMNIFICATION...............................................................18
Section 7.1 Survival of Representations, Warranties and Agreement........18
Section 7.2 Indemnification by Buyer.....................................19
Section 7.3 Indemnification by Seller....................................19
Section 7.4 Claims.......................................................19
Section 7.5 Third Party Claims...........................................20
ARTICLE VIII
MISCELLANEOUS.................................................................20
Section 8.1 Expenses.....................................................20
Section 8.2 Notices......................................................20
Section 8.3 Entire Agreement.............................................21
Section 8.4 Binding Effect, Benefits, Assignments........................21
Section 8.5 Applicable Law...............................................22
Section 8.6 Jurisdiction.................................................22
Section 8.7 Further Assurances...........................................22
Section 8.8 Counterparts.................................................22
Section 8.9 Headings.....................................................22
Section 8.10 Severability................................................22
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") dated as of October 1,
2004 by and between ▇▇▇▇▇▇▇▇ High Voltage Electronics Corporation, a New York
corporation ("Buyer"), and Del Global Technologies Corp., a New York corporation
("Seller").
W I T N E S S E T H:
WHEREAS, Del High Voltage, a division of Seller, is engaged in the
design, manufacture, marketing and sales of high voltage power conversion
systems (the "Business"); and
WHEREAS, Buyer desires to purchase and Seller desires to sell
substantially all of the assets used in the Business, upon the terms and subject
to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained, the parties hereto agree as follows:
ARTICLE I
ASSETS TO BE PURCHASED AND ASSUMPTION OF OBLIGATIONS
SECTION 1.1 (a) DESCRIPTION OF ASSETS. Upon the terms and subject to
the conditions set forth in this Agreement, at the Closing (as hereinafter
defined), Seller shall sell, convey, transfer, assign and deliver to Buyer, and
Buyer shall purchase, acquire and take assignment and delivery from Seller, all
of Seller's right and title to and interest in and to the business assets,
properties, rights (contractual or otherwise) and claims exclusively used in
connection with the Business (other than the Excluded Assets specified in
Section 1.1(b)) (the "Property"). Nothing contained herein shall require the
physical delivery of the Property. The Property shall include, without
limitation, all of Seller's right, title and interest in and to the following:
(i) All inventory, raw materials, packaging materials, machinery,
equipment, tooling, parts, furniture, supplies, vehicles, office equipment and
other tangible personal property used in conducting the Business (the "Personal
Property"), including, without limitation, the Personal Property listed on
SCHEDULE 1.1(a)(i) hereto;
(ii) All industrial and intellectual property rights used in
conducting the Business, including, without limitation, patents, patent rights,
patent applications, inventions, trade secrets, processes, formulas, customer
lists, engineers' drawings, proprietary rights, proprietary knowledge, computer
software, websites, URLs, domain names, trademarks, names, service marks, brand
marks, brand names, trade names, source or object code, copyrights, trade
secrets relating to or arising from any proprietary process, symbols and logos
related to the Business and all applications therefore, registrations thereof
and licenses and sublicenses or agreements in respect thereof, solely related to
the Business, which Seller owns or has the right to use in connection with the
Business or to which Seller is a party on behalf of the Business and all
filings, registrations or issuances of any of the foregoing with or by any
federal, state, local or foreign regulatory, administrative or governmental
office (PROVIDED, HOWEVER, that, to the extent that any of the foregoing
utilizes or incorporates any other proprietary rights owned or licensed by or
from Seller and not related to the Business, all of such other proprietary
rights shall remain the property of Seller and Buyer shall acquire no rights
therein) listed on SCHEDULE 1.1(a)(ii) (collectively, the "Proprietary Rights");
(iii) All leases of equipment, machinery or other tangible
personal property used in conducting the Business as listed on Schedule
1.1(a)(iii) hereto (the "Personal Property Leases");
(iv) All contracts, agreements, contract rights, license
agreements, customer contracts, distribution agreements, franchise rights and
agreements, purchase and sales orders, quotations and executory commitments,
instruments, royalty agreements, third party guaranties, indemnifications,
arrangements and understandings, whether oral or written, related to the
Business to which Seller is a party (whether or not legally bound thereby) and
used in conducting the Business as listed on SCHEDULE 1.1(a)(iv) hereto (the
"Contracts");
(v) All franchises, licenses, permits, consents, authorizations,
approvals and certificates of any regulatory, administrative or other
Governmental Authority (as defined herein) used in conducting the Business (to
the extent the same are transferable by Seller to Buyer) as listed on SCHEDULE
1.1(a)(v) hereto (the "Permits");
(vi) All accounts receivable relating to or arising out of the
operation of the Business as listed on SCHEDULE 1.1(a)(vi) (the "Receivables");
(vii) All causes of action, judgments, claims or demands of
whatever kind or description relating to the Business which Seller has or may
have against any other person or entity as listed on SCHEDULE 1.1(a)(vii) hereto
(the "Causes of Action");
(viii) Seller's marketing and sales materials relating solely to
the Business;
(ix) Seller's backlog relating to the Business;
(x) All customer or client lists, files, documentation, records
and related documentation used in connection with the Business as listed on
SCHEDULE 1.1(a)(x) hereto;
(xi) All security deposits (other than the security deposit
related to the lease of the Company's Valhalla, New York facility), prepaid
expenses, certificates of deposit, commercial paper, marketable securities and
other miscellaneous assets of the Business as listed on SCHEDULE 1.1(a)(xi)
hereto;
(xii) All goodwill relating to the Business; and
(xiii) All other tangible and intangible assets used exclusively
in connection with the Business, other than the Excluded Assets.
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(b) Notwithstanding the foregoing, the following assets relating to
the Business are being retained by Seller, are expressly excluded from the
purchase and sale contemplated hereby, and, as such, are not included in the
Property (the "Excluded Assets"):
(i) All property and assets of Seller that are not related to the
Business;
(ii) All insurance policies, including, without limitation, all
rights to receive proceeds of insurance policies and all rights of offset,
counterclaims and insurance coverage thereunder;
(iii) All cash, bank accounts, certificates of deposit,
commercial paper, annuities, treasury notes and bills and other marketable
securities not related to the Business;
(iv) The assets related to the monoblock business;
(v) Any and all income tax credits and refunds;
(vi) Subject to Section 5.4, all severance, pension, retirement
and other employee benefit plans;
(vii) All rights of Seller with respect to the claims, refunds,
causes of action, rights of recovery, rights of set-off and all other rights and
assets of every kind and nature related to the Excluded Liabilities (as defined
below);
(viii) All monies to be received by Seller and all other rights
of Seller under this Agreement, including, without limitations the Purchase
Price (as defined herein) and the other agreements, documents, and instruments
executed or delivered in connection with this Agreement; and
(ix) The right to receive mail and other communications addressed
to Seller relating to any of the assets described in the foregoing clauses (i)
through (viii) or the Excluded Liabilities.
SECTION 1.2 ASSUMPTION OF CERTAIN LIABILITIES. On the Closing Date (as
hereinafter defined), Buyer shall, subject to Section 1.4 hereof, assume and
hereby agrees to pay, perform and discharge when due, only those debts,
liabilities, obligations and commitments of Seller which are set forth below:
(a) all trade accounts payable as listed on SCHEDULE 1.2(a) hereof
(the "Trade Accounts Payable");
(b) debts, liabilities, obligations and commitments arising under the
Permits, Personal Property Leases and Contracts transferred to Buyer;
(c) all warranty obligations;
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(d) all deferred revenues and accrued commissions that have been
earned by the three continuing sales agents but that are not yet payable as of
the Closing Date, as listed on SCHEDULE 1.2(d) hereof; and
(e) Seller's liability under that certain Non-Compete Agreement by and
among Seller, Del Acquisition Corp. and ▇▇▇▇▇▇ ▇▇▇▇▇▇, and dated as of April 1,
1994, (the "Non-Compete Agreement") listed on SCHEDULE 1.2(e) hereof.
The liabilities of Seller being assumed by Buyer are hereinafter
collectively referred to as the "Assumed Liabilities."
SECTION 1.3 NON-ASSIGNMENT OF CERTAIN PROPERTY. To the extent that the
assignment hereunder of any of the Permits, Personal Property Leases or
Contracts shall require the consent of any other party (or in the event that any
of the same shall be nonassignable) (each, a "Consent Contract"), neither this
Agreement nor any action taken pursuant to its provisions shall constitute an
assignment or an agreement to assign if such assignment or attempted assignment
would constitute a breach thereof; PROVIDED, HOWEVER, that in each such case,
Seller shall use its good faith efforts to obtain the consents of such other
party to an assignment to Buyer without being obligated to pay any fees or to
make any other payments to any party to obtain any such consents. If such
consent is not obtained, (i) such Consent Contract shall not be deemed assigned
at Closing, (ii) Buyer shall act as Seller's agent to perform Seller's
obligations thereunder and shall so perform, and (iii) Seller, at Buyer's
expense, shall cooperate with Buyer in any reasonable arrangement designed to
provide for Buyer the full benefits of any such Consent Contract including,
without limitation, enforcement, for the account and benefit of Buyer, of any
and all rights of Seller against any other person with respect to any such
Consent Contract. When such consents to the transfer, conveyance and assignment
of a Consent Contract have been obtained, if ever, such Consent Contract shall
thereupon automatically be transferred, conveyed and assigned to Buyer, and the
obligations and liabilities of Seller under such Consent Contract shall
automatically cease to be excluded from the Assumption Agreement (as hereinafter
defined) by reason of this Section 1.3, without the payment of any additional
consideration.
SECTION 1.4 LIABILITIES NOT ASSUMED. With the exception of the Assumed
Liabilities, Buyer shall not, by execution and performance of this Agreement or
otherwise, assume or otherwise be responsible for any debt, liability,
obligation or commitment of any nature of Seller, whether relating to the
Business, any of Seller's other assets, operations, businesses or activities, or
claims of such liability or obligation, matured or unmatured, liquidated or
unliquidated, fixed or contingent, or known or unknown, whether arising out of
occurrences prior to, at or after the Closing Date. (the "Excluded
Liabilities").
ARTICLE II
PURCHASE PRICE
SECTION 2.1 CONSIDERATION. Upon the terms and subject to the conditions set
forth in this Agreement, in consideration for the sale, assignment and transfer
of the Property, Buyer shall:
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(a) assume the Assumed Liabilities as provided in Section 1.2 hereof
pursuant to a ▇▇▇▇ of sale, assignment and assumption agreement in the form of
Exhibit A hereto (the "▇▇▇▇ of Sale"); and
(b) pay to Seller in cash by wire transfer of immediately available
funds in accordance with Seller's written instructions to Buyer, the sum of
THREE MILLION FIVE HUNDRED THOUSAND DOLLARS ($3,500,000) reduced by the dollar
amount of the liability assumed by Buyer under the Non-Compete Agreement
pursuant to Section 1.2(e) hereof and decreased by the difference between (a) an
amount equal to accounts receivable less accounts payable as set forth on the
balance sheet of the Business as of July 31, 2004 prepared by Seller's
accountants and (b) an amount equal to accounts receivable less accounts payable
as set for on the balance sheet of the Business as of the Closing Date prepared
by Seller's accountants (the "Purchase Price").
ARTICLE III
CLOSING
SECTION 3.1 CLOSING. The consummation of the transactions contemplated by
this Agreement (the "Closing") shall take place simultaneously with the
execution and delivery of this Agreement, at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Frome ▇▇▇▇▇▇▇▇▇▇ & Wolosky LLP, Park Avenue Tower, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the date on which such closing occurs being herein
referred to as the "Closing Date").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby
represents and warrants to Seller as of the date hereof that:
(a) CORPORATE ORGANIZATION; REQUISITE AUTHORITY. Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York and has all requisite power and authority to carry on
its business as now being conducted and as contemplated to be conducted
immediately following the Closing. Complete and correct copies of the
Certificate of Incorporation of Buyer and all amendments thereto, certified by
the Secretary of State of the State of New York, and the Bylaws of Buyer and all
amendments thereto have been previously delivered to Seller.
(b) AUTHORIZATION; VALIDITY. Buyer has all requisite corporate power
and authority to execute, deliver and perform its obligations under this
Agreement, the ▇▇▇▇ of Sale, the Assignment, the Release, the Lease Assignment,
the Solvency Certificate (as such terms are defined herein), and all other
agreements, documents and instruments required to be executed by Buyer pursuant
hereto (collectively, the "Buyer Agreements") and to consummate the transactions
contemplated hereby and thereby. All necessary corporate action has been taken
by Buyer with respect to the execution, delivery and performance by Buyer of
this Agreement and the Buyer Agreements and the consummation of the transactions
contemplated hereby and thereby, and no further corporate authorization will be
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necessary to authorize the execution and delivery by Buyer of, and the
performance of its obligations under, this Agreement or the Buyer Agreements.
Buyer has delivered to Seller a copy of the resolutions of its Board of
Directors approving the execution and delivery of this Agreement and the Buyer
Agreements and the consummation of all of the transactions contemplated hereby
and thereby, duly certified by an authorized officer of Buyer.
(c) EXECUTION AND DELIVERY. This Agreement and the Buyer Agreements
have been duly executed and delivered by Buyer and constitute legal, valid and
binding obligations of Buyer, enforceable against Buyer in accordance with their
respective terms, except (i) as such enforceability may be limited by or subject
to any bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, (ii) as such obligations are subject to
general principles of equity and (iii) as rights to indemnity may be limited by
federal or state securities laws or by public policy.
(d) GOVERNMENTAL CONSENTS. No action, waiver or consent by any
federal, state, municipal or other governmental department, commission or agency
("Governmental Authority") is necessary to make this Agreement and the Buyer
Agreements, as appropriate, valid instruments binding upon Buyer in accordance
with their respective terms. Buyer is not required to submit any notice, report
or other filing with any Governmental Authority in connection with the
execution, delivery or performance of this Agreement or any of the Buyer
Agreements.
(e) NO CONFLICTS; ABSENCE OF DEFAULT. Neither the execution, delivery
and performance of this Agreement or any of the Buyer Agreements by Buyer, nor
the consummation by Buyer of the transactions contemplated hereby and thereby,
nor compliance by Buyer with the provisions hereof and thereof will (i) conflict
with or violate Buyer's Certificate of Incorporation or Bylaws or (ii) conflict
with or violate any law, administrative regulation or rule or court order, writ
judgment or decree (a "Law") applicable to Buyer except for any such conflict or
violation which would not reasonably be expected to have a material adverse
effect on Buyer's business operations (as now conducted), the assets,
properties, rights, prospects or condition (financial or otherwise) of Buyer, or
combination thereof (a "Buyer Material Adverse Effect") or (iii) breach,
conflict with, violate or cause a default under any material contract, license
or agreement, permit, instrument or obligation to which Buyer or any of its
assets is or may be bound, except for any such breach, conflict, violation or
default which would not reasonably be expected to cause a Buyer Material Adverse
Effect. Neither the execution and delivery of this Agreement and the Buyer
Agreements, nor the consummation of the transactions contemplated hereby and
thereby, will require any consent, waiver, approval, exemption, registration,
declaration, license, authorization or permit of, or filing with or notification
to, any other person or entity. Except as set forth on SCHEDULE 4.1(e) hereto,
there are no corporate, contractual, statutory or other restrictions of any kind
upon the power and authority of Buyer to execute and deliver this Agreement and
the Buyer Agreements and to consummate the transactions contemplated hereunder
and thereunder.
(f) BROKER. No broker, finder or investment banker is entitled to any
brokerage or finder's fee or other commission from Buyer in connection with the
transactions contemplated hereby based upon the arrangements made by or on
behalf of Buyer.
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(g) LITIGATION. There is no suit, action or administrative or other
legal proceeding, nor any order, decree or judgment in progress, pending or in
effect, or to the knowledge of Buyer, threatened against Buyer in connection
with or relating to the transactions contemplated by this Agreement, or any
other agreement to be executed by Buyer pursuant hereto, and Buyer does not know
or have any reason to be aware of any basis for the same.
(h) SOLVENCY. Buyer is Solvent (as defined below). Buyer will not fail
to be Solvent as a result of the execution and delivery of this Agreement or any
of the other agreements, documents, or instruments to which it is a party or as
a result of the transactions contemplated hereunder.
"Solvent" shall mean, when used with respect to any person or entity, that
at the time of determination:
(i) it is then able and expects to be able to pay its debts as
they mature; and
(ii) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
(i) NO DEFAULT. Buyer is not in default with respect to any
indebtedness, note, indenture, loan agreement, mortgage, lease, deed, or other
agreement to which Buyer is a party or by which it is bound and Buyer has not
received any notice or demands with respect to the same, which default or demand
would cause a Buyer Material Adverse Effect.
SECTION 4.2 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants to Buyer as of the date hereof that:
(a) CORPORATE ORGANIZATION; REQUISITE AUTHORITY TO CONDUCT BUSINESS.
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of New York and has all requisite power and
authority to own, operate or lease the Property and to carry on the Business as
now being conducted. Complete and correct copies of the Certificate of
Incorporation of Seller and all amendments thereto, certified by the Secretary
of State of the State of New York, and the Bylaws of Seller and all amendments
thereto have been previously delivered to Buyer. Seller is duly qualified or
licensed to do business and is in good standing as a foreign corporation in each
jurisdiction in which the ownership or leasing of the Property or the
transaction of business by the Business requires it to be so qualified or
licensed, except where the failure to be so qualified or licensed would not in
the aggregate reasonably be expected to have a material adverse effect on the
operations of the Business (as now conducted), or the assets, properties,
rights, prospects or condition (financial or otherwise) of the Business, or
combination thereof (a "Seller Material Adverse Effect").
(b) AUTHORIZATION; VALIDITY. Seller has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement,
the ▇▇▇▇ of Sale, the Assignment, the IP Assignment (as such term is defined
herein), the Lease Assignment and all other agreements, documents and
instruments required to be executed by Seller pursuant hereto (collectively, the
"Seller Agreements"), and to consummate the transactions contemplated hereby and
thereby. All necessary corporate action has been taken by Seller with respect to
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the execution, delivery and performance by Seller of this Agreement and the
Seller Agreements and the consummation of the transactions contemplated hereby
and thereby, and no further corporate authorization will be necessary to
authorize the execution and delivery by Seller and the performance of its
obligations under this Agreement or the Seller Agreements.
(c) EXECUTION AND DELIVERY. This Agreement and the Seller Agreements
have been duly executed and delivered by Seller and constitute legal, valid and
binding obligations of Seller, enforceable against Seller in accordance with
their respective terms, except (i) as such enforceability may be limited by or
subject to any bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally, (ii) as such obligations are
subject to general principles of equity and (iii) as rights to indemnity may be
limited by federal or state securities laws or by public policy.
(d) GOVERNMENTAL CONSENTS; PERMITS. Except as set forth on SCHEDULE
4.2(e), no action, waiver or consent by any Governmental Authority is necessary
to make this Agreement and the Seller Agreements, as appropriate, valid
instruments binding upon Seller in accordance with their respective terms.
Except as set forth on SCHEDULE 4.2(e), Seller is not required to submit any
notice, report or other filing with any Governmental Authority in connection
with the execution, delivery or performance of this Agreement or any of the
Seller Agreements, except where the failure to do so would have a Seller
Material Adverse Effect. The Permits listed on SCHEDULE 1.1(a)(v) are all of the
permits necessary to sell the products of the Business being sold as of the date
hereof.
(e) CONFLICTS; ABSENCE OF DEFAULT. Neither the execution, delivery or
performance of this Agreement or any of the Seller Agreements by Seller nor the
consummation by Seller of the transactions contemplated hereby and thereby, nor
compliance by Seller with any of the provisions hereof and thereof will (i)
conflict with or violate Seller's Certificate of Incorporation or Bylaws; (ii)
conflict with or violate any Law applicable to the Business or any of the
Property, which would have a Seller Material Adverse Effect; or (iii) breach,
conflict with, violate or cause a default under any material contract, license
or agreement, permit, instrument, or obligation (the "Seller Contracts") to
which Seller or any of its assets is or may be bound, except for any such
breach, conflict, violation or default which would not reasonably be expected to
cause a Seller Material Adverse Effect. Neither the execution and delivery of
this Agreement and the Seller Agreements nor the consummation of the
transactions contemplated hereby and thereby will require any consent, waiver,
approval, exemption, registration, declaration, license, authorization or permit
of, or filing with or notification to, any other person or entity, except for
such consents, waivers, approvals, exemptions, registrations, declarations,
licenses authorizations, permits, filings or notifications which have been
obtained and are listed on SCHEDULE 4.2(e), or which, if not obtained or made,
will not allow for the termination, cancellation or acceleration of any
obligation to repay under, any of the terms, conditions or provisions of any
Contract or obligation. Neither the execution, delivery or performance of this
Agreement or any of the Seller Agreements, nor the consummation by Seller of the
transactions contemplated hereby or thereby, nor compliance by Seller with any
of the provisions hereof and thereof will constitute a default (in and of itself
or with the giving of notice, passage of time or both) under the Seller
Contracts, or result in the creation or imposition of any encumbrance upon, or
giving to any other party or parties any claim, interest or right including
rights of termination or cancellation in, or with respect to, the Business or
Property, which would have a Seller Material Adverse Effect; or result in the
loss of any license, franchise, legal privilege possessed by Seller or give a
right of termination to any party to any agreement or other instrument to which
Seller is a party or by which any of the Property or the Business is bound,
which would have a Seller Material Adverse Effect. Except as set forth on
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SCHEDULE 4.2(e), there are no corporate, contractual, statutory or other
restrictions of any kind upon the power and authority of Seller to execute and
deliver this Agreement and the Seller Agreements and to consummate the
transactions contemplated hereunder and thereunder.
(f) ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE 4.2(f),
none of which would constitute a Seller Material Adverse Effect, (A) the
Property and the Business are in compliance with all applicable Environmental
Laws, except where failure to be in compliance would not have a Seller Material
Adverse Effect; (B) there is no Environmental Claim pending against the Seller
with regard to the Property or the Business; (C) Seller has obtained all
material permits, approvals, identification numbers, licenses or other
authorizations required under any applicable Environmental Laws with regard to
the Property or the Business (the "Environmental Permits") and is and has been
in compliance with their requirements; (D) there are no underground or
aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps
or lagoons in which Hazardous Materials are being or have been treated, stored
or disposed of on any real property currently owned or leased by Seller for the
Business other than in compliance with Environmental Laws; (E) the Seller has
not undertaken or completed any investigation or assessment or remedial or
response action relating to any such release, discharge or disposal of or
contamination with Hazardous Materials at any site, location or operation of the
Business, either voluntarily or pursuant to the order of any Governmental Entity
or the requirements of any Environmental Law; and (F) except as set forth on
Schedule 4.2(f), there have been no actions, suits, demands, demand letters,
claims, liens, notices of non-compliance or violation, notices of liability or
potential liability, investigations, proceedings, consent orders or consent
agreements relating in any way to Environmental Laws, any Environmental Permits
or any Hazardous Materials (the "Environmental Claims") against the Seller with
regard to the Business.
(i) For purposes of this Section 4.2(f):
(A) "ENVIRONMENTAL CLAIM" shall mean any claim, action, demand,
order, or notice by or on behalf of, any Governmental Authority or person
alleging potential liability arising out of, based on or resulting from the
violation of any Environmental Law or permit or relating to any Hazardous
Materials.
(B) "ENVIRONMENTAL LAWS" shall mean all Laws that are applicable
to the Business or the Property relating to Releases or threatened Releases of
Hazardous Materials or otherwise relating to pollution or protection of the
environment, health, safety or natural resources, including, without limitation,
those relating to (A) the Releases or threatened releases of Hazardous Materials
or materials containing Hazardous Materials or (B) the manufacture, generation,
handling, treatment, storage, transport, disposal or handling of Hazardous
Materials or materials containing Hazardous Materials.
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(C) "HAZARDOUS MATERIALS" means all substances, matters and other
particles defined or listed as "hazardous" or "toxic" under Environmental Laws
or are otherwise subject to or regulated by Environmental Laws.
(D) "RELEASE" shall mean any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or outdoor
environment, including the movement of Hazardous Materials through the air,
soil, surface water or groundwater.
(g) ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth on
SCHEDULE 4.2(g), since July 27, 2004, there has not been with respect to the
Business:
(i) Any Seller Material Adverse Effect;
(ii) Other than in the usual and ordinary course of business, any
increase in amounts payable by Seller to or for the benefit of or committed to
be paid by Seller to or for the benefit of any officer, consultant, agent or
employee of the Business, in any capacity, whether in the form of salary, bonus,
consulting fee, directors fee or otherwise, or in any benefits granted under any
bonus, stock option, profit sharing, pension, retirement, deferred compensation,
insurance, or other direct or indirect benefit plan with respect to any such
person;
(iii) Any transaction entered into or carried out by Seller with
respect to the Business or the Property other than in the ordinary and usual
course of its business resulting in the incurrence of liabilities or obligations
of Seller;
(iv) Any material change made with respect to the Business in the
methods of doing business or in the accounting principles or practices or the
method of application of such principles or practices;
(v) Any mortgage, pledge, lien, security interest, hypothecation,
charge or other encumbrance imposed or agreed to be imposed on or with respect
to the Property which will not be discharged prior to the Closing, except for
Permitted Liens (as hereinafter defined);
(vi) Any sale, lease or other disposition of, or any agreement to
sell, lease or otherwise dispose of any Property, individually in excess of
$1,000, or in the aggregate in excess of $5,000, excluding sales of inventory
held for sale in the ordinary course of business;
(vii) Any purchase of or any agreement to purchase capital assets
or any lease or any agreement to lease, as lessee, any capital assets of the
Business individually in excess of $1,000 or in the aggregate in excess of
$5,000;
(viii) Any modification, waiver, change, amendment, release,
rescission or termination of, or accord and satisfaction with respect to, any
term, condition or provision of any contract, agreement, license or other
instrument with respect to the Property or the Business to which Seller is a
party, which would have a Seller Material Adverse Effect, other than any
satisfaction by performance in accordance with the terms thereof in the usual
and ordinary course of its business;
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(ix) Any damage, destruction or similar loss, whether or not
covered by insurance, adversely affecting the Business in excess of $1,000
individually, or $5,000 in the aggregate;
(x) Any strike, picketing, work slowdown or labor disturbance
with respect to the Business; or
(xi) To Seller's knowledge, any change in any Law applicable to
or binding upon the Business or the Property, which would have a Seller Material
Adverse Effect.
(h) TAXES AND TAX RETURNS. (i) For purposes of this Agreement, (A) the
term "Taxes" shall mean all taxes, charges, fees, levies or other assessments,
including, without limitation, income, gross receipts, excise, property, use,
sales, license, payroll and franchise taxes, imposed by the United States, or
any state, local or foreign government or subdivision or agency thereof whether
computed on a unitary, combined or any other basis; and such term shall include
any interest and penalties or additions to tax; and (B) the term "Tax Return"
shall mean any report, return or other information required to be filed with,
supplied to or otherwise made available to a taxing authority in connection with
Taxes.
(ii) Seller has (A) filed with the appropriate taxing authorities
all Tax Returns relating to the Property or the Business required to be filed
for any period ending on or before the Closing Date (or are properly on
extension), and all such filed Tax Returns are true, correct and complete in all
material respects, and (B) paid in full all Taxes shown to be due on such Tax
Returns, together with any penalties or fines due in connection therewith. There
are no liens for Taxes upon the Property except for statutory liens for current
Taxes not yet due and payable. Seller will file appropriate Tax Returns for any
period ending on or before the Closing Date, and pay any Taxes for such periods
when due. Seller has not received any outstanding notice of audit or is
undergoing any audit of Tax Returns relating to the Property or the Business or
received any notice of deficiency or assessment from any taxing authority with
respect to liability for Taxes relating to the Property or the Business which
has not been fully paid or finally settled. There have been no waivers of
statutes of limitations by Seller with respect to any Tax Returns relating to
the Property or the Business. Seller has complied in all material respects with
all applicable laws, rules and regulations relating to the payment and
withholding of Taxes and has withheld all amounts required by law to be withheld
from the wages or salaries of employees and independent contractors of the
Business, and is not liable for any Taxes with respect to the employees and
independent contractors of the Business for failure to comply with such laws,
rules and regulations.
(i) EMPLOYMENT MATTERS; ERISA MATTERS. Except as set forth on SCHEDULE
4.2(i), there are no employment, consulting, severance or indemnification
contracts between the Seller and any of the employees of the Business. The
Seller is not a party to any union contract or collective bargaining agreement
relating to any aspect of the Business. SCHEDULE 4.2(i) identifies those
employees of the Seller who are deemed to be key employees to the operations of
the Business. Except as otherwise set forth in this Agreement, Seller has no
plans to terminate any key employee, and none of the key employees is expected
to terminate his employment with the Seller. All liabilities or obligations to
any employee of the Business resulting from Buyer's failure to offer employment
to any employee shall be and remain the sole responsibility and liability of the
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Seller. The Seller either has paid to date or will pay within the normal payroll
cycle after the Closing Date all accrued wages, salary, bonus, commissions,
vacation and sick pay accrued on or before the Closing Date for all of the
employees, agents and representatives of the Business, including payroll
overheads. The Seller is in compliance with Laws respecting employment and
employment practices, terms and conditions of employment and wages and hours.
The Seller shall be solely liable for all contributions, benefits and other
obligations with respect to all employee benefit plans of which the Seller is or
ever has been a party or by which it is or ever has been bound in connection
with the Business, including, without limitation, (i) any profit-sharing,
deferred compensation, bonus, stock option, phantom stock, stock purchase,
pension, retainer, consulting, retirement, severance, welfare or incentive plan,
agreement or arrangement (including, without limitation, all employee benefit
plans which are intended to be qualified under Section 401(a) of Internal
Revenue Code (including any "multiemployer" plans within the meaning of Section
3(37) of ERISA)), (ii) any plan, agreement or arrangement providing for "fringe
benefits" or perquisites to employees, officers, directors or agents, including,
but not limited to, benefits relating to automobiles, clubs, vacation, child
care, parenting, sabbatical, sick leave, medical, dental, hospitalization, life
insurance and other types of insurance of the Business, (iii) any employment
agreement, or (iv) any other "employee benefit plan" within the meaning of ERISA
(collectively, the "Plans"). The Seller has no responsibility for and has not
assumed any pension-related liability of any predecessor business or Person.
(j) TITLE TO PROPERTY. (i) Seller has good and marketable title, or
valid leasehold rights (in the case of leased property), to all of the Personal
Property, free and clear of all liens, claims and encumbrances of any nature,
other than as disclosed on SCHEDULE 4.2(j) (the "Permitted Liens"). On the
Closing Date, Seller will convey to Buyer good and marketable title to the
Property or, in the case of assets constituting Property which are leased or
licensed by Seller pursuant to Personal Property Leases or other Contracts,
valid leasehold interests or licenses to such Personal Property Leases or other
Contracts, free and clear of all liens, claims and encumbrances of any nature
other than Permitted Liens. Except for the Excluded Assets, (i) SCHEDULE
1.1(a)(i) sets forth a complete and accurate list of all the Personal Property
owned by Seller and used in connection with the Business, including without
limitation, all inventory, raw materials, packaging materials, machinery,
equipment, tooling, parts, furniture, supplies, vehicles, office equipment and
other tangible personal property used in conducting the Business, and (ii)
SCHEDULE 1.1(a)(iii) sets forth a complete and accurate list of all Personal
Property Leases owned by Seller and used in connection with the Business,
including, without limitation, all leases of equipment or other personal
property used in the conduct of the Business. All Property used in the conduct
of the Business is owned or leased by Seller and is held free and clear of all
mortgages, pledges, liens, security interests, claims, encumbrances and
restrictions of any nature whatsoever other than Permitted Liens. Except for
Permitted Liens, no financing statement under the Uniform Commercial Code or
similar law naming Seller as debtor has been filed, and not been terminated,
prior to the Closing Date in any jurisdiction in respect of the Property, and,
except as disclosed on SCHEDULE 4.2(j), Seller is not a party to or bound under
any agreement or legal obligation authorizing any party to file any such
financing statement.
(ii) SCHEDULE 1.1(a)(iii) sets forth, with respect to Personal
Property Leases, the commencement date, termination date, renewal options, if
any, and annual base rents. Except as disclosed on SCHEDULE 4.2(j) and in the
SEC Reports each such Personal Property Lease is valid and enforceable in
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accordance with its terms in all respects and is in full force and effect.
Neither Seller, nor to Seller's knowledge any other party to any Personal
Property Lease, is in default of its obligations thereunder, and Seller (or any
other party to any such Personal Property Lease) has not at any time delivered
or received any notice of default which remains uncured under any such Personal
Property Lease and no event has occurred which, with the giving of notice or the
passage of time, or both, would constitute a default under any such Lease.
(iii) Seller has valid leasehold rights to the real property that
is the subject of the Valhalla Lease (as hereinafter defined), free and clear of
all liens and encumbrances, except for Permitted Liens and except such as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by Seller. Seller is
not in default of its obligations under the Valhalla Lease, has not delivered or
received any notice of default that remains uncured under the Valhalla Lease,
and no event has occurred that, with the giving of notice or the passage of
time, or both, would constitute a default under the Valhalla Lease, where such
default, notice of default or event would be likely to cause a Seller Material
Adverse Effect.
(k) TRADEMARKS, PATENTS AND COPYRIGHTS. (i) Except as disclosed on
SCHEDULE 4.2(k), Seller owns or has the right to use, sell or license all
Proprietary Rights and such Proprietary Rights are sufficient for the conduct of
the Business of Seller as it is currently being conducted as of the date hereof.
SCHEDULE 1.1(a)(ii) hereto lists each patent, patent right, patent application,
tradename, trademark, trade name registration, trademark registration, trademark
application, copyright registration, copyright registration application, service
▇▇▇▇, brand ▇▇▇▇ and brand name, trade secret, formula, source and object code
owned or licensed by Seller and currently used in the conduct of the Business,
and any license for any of the foregoing in each case;
(ii) Except as disclosed on SCHEDULE 4.2(k), the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby will not constitute a breach of any instrument
or agreement governing any Proprietary Rights, will not cause the forfeiture or
termination or give rise to a right of forfeiture or termination of any
Proprietary Rights or impair the right of the Business to use, sell or license
any Proprietary Rights or any portion thereof;
(iii) Except as disclosed on SCHEDULE 4.2(k), neither the
manufacture, marketing, license, sale or intended use of any tangible product
currently sold by the Business violates any license or agreement between Seller
and any third party relating to such product or to Seller's knowledge infringes
any intellectual property right of any other party, and there is no pending
claim or litigation contesting the validity and Seller's ownership or right to
use, sell, license or dispose of any Proprietary Right nor has Seller received
any notice asserting that any Proprietary Right or the proposed use, sale,
license or disposition thereof conflicts or will conflict with the rights of any
other party, and Seller has neither licensed the use of the Proprietary Rights
to any third party nor permitted the use by any third party of the same in a
manner which would infringe the trademark rights of Seller; and
(iv) Except as disclosed on SCHEDULE 4.2(k), Seller has not
received any notice that, any current or prior members, officers, employees or
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consultants of Seller claim an ownership interest in any of the Proprietary
Rights as a result of having been involved in the development of such property
while employed by or consulting to the Business or otherwise.
(l) ACCOUNTS RECEIVABLE. The Receivables listed on SCHEDULE 1.1(a)(iv)
are or will be subsisting; arose or will arise in the ordinary and usual course
of business of the Business; are not and will not be subject to any
counterclaim, set-off or defense known to the Seller; and are not and will not
be subject to any lien or encumbrance, other than Permitted Liens.
(m) LEGAL PROCEEDINGS, CLAIMS, INVESTIGATIONS, ETC. Except as
disclosed on SCHEDULE 4.2(m), there is no legal, administrative, arbitration or
other action or proceeding or governmental investigation pending against Seller
related to the Business or, to Seller's knowledge, pending against any member,
officer or employee thereof relating to the Business. Except as disclosed on
SCHEDULE 4.2(m), Seller has not been informed of any violation of or default
under, any laws, ordinances, regulations, judgments, injunctions, orders or
decrees (including without limitation, any immigration laws or regulations) of
any court, governmental department, commission, agency, instrumentality or
arbitrator applicable to the Business. Except as disclosed in SCHEDULE 4.2(m),
the Business is not currently subject to any judgment, order, injunction or
decree of any court, arbitral authority, administrative agency or Governmental
Authority.
(n) CONTRACTS. SCHEDULE 1.1(a)(iv) sets forth complete and accurate
list as of the Closing Date hereof of all contracts or agreements to which
Seller is a party relating to the Business, involving either aggregate
consideration payable to or by Seller of $5,000 in a twelve month period or the
Property, and Seller has provided Buyer copies of all of the Contracts.
Each such Contract (i) is in full force and effect and is binding upon and
enforceable against Seller, and, to Seller's knowledge, all other parties
thereto in accordance with its terms, (ii) has not been otherwise materially
amended or modified by Seller except as specified in such Schedule and (iii) is
not in default due to the action of Seller or, to Seller's knowledge, any other
party thereto.
(o) CERTAIN TRANSACTIONS. No officer or employee of Seller, nor any
member of any such person's family is presently a party to any material
transaction with Seller relating to the Business, including without limitation,
any contract, agreement or other arrangement (i) providing for the furnishing of
services by, (ii) providing for the rental of real or personal property from, or
(iii) otherwise requiring payments to (other than for services as managers,
officers, directors or employees of the Business), any such person or any
corporation, partnership, trust or other entity in which any such person has a
substantial interest as a stockholder, officer, director, trustee or partner.
(p) BROKER. Other than Imperial Capital, LLC, no broker, finder or
investment banker is entitled to any brokerage or finder's fee or other
commission from Seller in connection with the transactions contemplated hereby
based on the arrangements made by or on behalf of Seller.
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(q) LICENSES. Seller is the holder of all state, federal and local
licenses, permits and approvals required to conduct the Business as it is
presently being conducted, except where the failure to hold the same would not
have a Seller Material Adverse Effect. Except as set forth on SCHEDULE 4.2(q),
all of the Permits are in good standing, valid and effective, and free and clear
of any liens, conditions or restrictions which might limit their full
utilization as authorized by any governmental authority. SCHEDULE 1.1(a)(v)
lists each Permit held by Seller with respect to the Business and its date of
expiration. SCHEDULE 4.2(q) sets forth those Permits issued by various
governmental authorities and used by Seller in the Business that are not
assignable. Seller's inability to assign such Permits to Buyer shall not
constitute a breach or default of any provision of this Agreement.
(r) COMPLIANCE WITH LAW. Except as set forth on Schedule 4.2(r),
Seller has complied in all material respects with all Laws, which are applicable
to or binding upon the Business or the Property.
(s) BOOKS OF ACCOUNT; RECORDS. The general ledgers, books of account
and other records of Seller in respect of the Business are complete and correct
in all respects and have been maintained in accordance with good business
practices and on a consistent basis from period to period reflected therein.
(t) CONDITION OF THE PROPERTY. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED,
HEREIN, ALL OF THE PROPERTY IS CONVEYED TO BUYER AS IS, WHERE IS AND SELLER
HEREBY DISCLAIMS ALL WARRANTIES WITH RESPECT THERETO, INCLUDING, WITHOUT
LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
(u) ACCOUNTS PAYABLE. All accounts payable of the Business have been
incurred in the ordinary course of business consistent with past practice.
(v) CUSTOMERS. Except as set forth on SCHEDULE 4.2(v), there are no
pending disputes between Seller and any of the vendors, suppliers, or customers
of the Business or other parties which in any way relate to Seller's operation
of the Business.
ARTICLE V
COVENANTS
SECTION 5.1 PRESERVATION OF BOOKS AND RECORDS. Seller will preserve and
maintain all books and records of the Business in its possession and not
otherwise transferred to Buyer pursuant to this Agreement until at least
December 31, 2004. Seller covenants to provide Buyer and its auditors, employees
and agents with full access to the records of Seller (other than Seller's
attorney-client communications and work product) upon reasonable notice during
normal business hours and shall allow Buyer and its auditors, employees and
agents, at Buyer's expense, to make copies of such documents, records and other
information pertaining to the Business as Buyer may reasonably request. If
Seller desires to dispose of any such books and records at the end of such
period or before the expiration of such period, Seller will first give written
notice thereof to Buyer and will, at Buyer's option and expense, appropriately
package and deliver such books and records to Buyer at such location as Buyer
shall designate. If upon receiving written notice of Seller's desire to dispose
15
of books and records, Buyer does not direct Seller to deliver such books and
records within 45 days, then Seller may dispose of such books and records
without violating the terms of this Agreement.
SECTION 5.2 ADDITIONAL COVENANTS. Seller and Buyer covenant and agree
subject to the conditions set forth herein, to proceed diligently and to use
reasonable efforts to take or cause to be taken all actions and to do or cause
to be done all things necessary, proper and advisable to consummate the
transactions contemplated by this Agreement and to prepare and execute such
additional documents and to take or cause to be taken such additional actions,
as either party may reasonably request pursuant to the terms and conditions of
this Agreement.
SECTION 5.3 SALES AND TRANSFER TAXES. All sales and transfer taxes,
recording taxes, and similar taxes and charges, incurred in connection with the
sale of the Property under this Agreement will be borne by Buyer.
SECTION 5.4 TRANSFERRED EMPLOYEES.
(a) OFFER OF EMPLOYMENT. Subject to and in accordance with the
provisions of this Section 5.4, Buyer shall, effective upon the Closing, offer
full-time employment to most of the employees who are employed by Seller as of
the Closing Date solely in connection with the Business and are listed on
SCHEDULE 5.4(a) hereof (the "Del High Voltage Employees") on terms and
conditions substantially equivalent to the terms and conditions of employment
and benefits for current employees of Buyer in similar job classifications and
grades. Buyer shall hire all of the Del High Voltage Employees who accept such
offer. Buyer will deliver to Seller a list of all of the Del High Voltage
Employees who have accepted an offer of employment from Buyer promptly after the
Closing. Each of the Del High Voltage Employees who actually becomes a full-time
employee of Buyer upon the Closing is hereinafter referred to as a "Transferred
Employee."
(b) TRANSITION. The employment of each Transferred Employee by Seller
shall end effective as of the close of business on the day before the Closing
Date and the employment of the Transferred Employees by Buyer shall commence at
or after 12:01 a.m. on the day of the Closing Date.
(c) RETENTION OF EMPLOYEES PRIOR TO CLOSING. Seller shall expend its
reasonable efforts to assist Buyer in securing the employment on the Closing
Date of the Del High Voltage Employees; provided, however, that Seller shall not
be required to incur any financial obligation beyond continuing to pay for
current employee compensation and benefits prior to the Closing in connection
with the foregoing unless otherwise required by this Agreement.
(d) COMPENSATION AND BENEFITS OF TRANSFERRED EMPLOYEES. Coverage for
Transferred Employees under Buyer's benefit plans and programs shall commence as
of 12:01 a.m. on the Closing Date. Buyer shall give each Transferred Employee
credit for such Transferred Employee's years of most recent continuous service
(including time during approved leaves of absences of less than twenty-six (26
weeks)) with Seller for purpose of determining participation and benefit levels
under all of Buyer's vacation policies and benefit plans and programs, unless
otherwise prohibited by law or the terms of any of Buyer's benefit plans and
16
programs. Seller shall retain responsibility for all vacation time for
Transferred Employees accrued on or before the Closing Date and for any claims
under its health insurance policies made by Transferred Employees arising out of
insurable losses incurred or claims accrued on or prior to the Closing Date.
(e) EMPLOYEES OTHER THAN TRANSFERRED EMPLOYEES. Seller shall retain
responsibility only for employees of the Business listed on SCHEDULE 5.4(e).
SECTION 5.5 VALHALLA LEASE ASSIGNMENT. Buyer agrees to lease certain space
located at the Seller's Valhalla, New York facility, pursuant to the terms of
that certain Assignment, Assumption, Consent, Estoppel and Modification of Lease
for such premises substantially in the form of EXHIBIT C hereto (the "Lease
Assignment").
SECTION 5.6 NONCOMPETE. For a period of five (5) years from and after the
Closing Date, Seller shall not engage or compete, directly or indirectly, on its
own account or as an equity holder, agent, partner, joint venturer or
consultant, in or with any business entity that is engaged in the sale,
distribution, manufacture or provision of products or services heretofore sold,
distributed, manufactured or provided by the Business, or which is otherwise in
competition with the Business, other than business entities engaged in the sale,
distribution, manufacture or provision of monoblock power supplies that are used
in medical applications regulated by the United States Food and Drug
Administration.
ARTICLE VI
DELIVERIES AT CLOSING
SECTION 6.1 BUYER DELIVERIES. At or prior to Closing, Buyer shall deliver
to Seller:
(a) (i) a certificate, dated the Closing Date, executed by Buyer's
Secretary, to the effect that (A) the Certificate of Incorporation and By-laws
of Buyer shall have not been amended since the date upon which certified copies
of each had been delivered to Seller and remain in full force and effect and (B)
the officers executing the Agreement and all other agreements to be executed by
Buyer are duly elected and hold the offices set forth therein, with copies of
resolutions approved by the board of directors of Buyer attached as an exhibit
thereto;
(b) a duly executed copy of the ▇▇▇▇ of Sale and such deeds,
assignments, certificates of title and other instruments of transfer and
conveyance, conveying, selling, transferring and assigning to Buyer title to all
of the Property (subject to Section 1.3), free and clear of all security
interests, liens, charges or encumbrances whatsoever, except for Permitted Liens
and those liens assumed by Buyer pursuant to this Agreement or the ▇▇▇▇ of Sale;
together with the written consents of all parties necessary in order to duly
transfer such title to the extent obtained;
(c) the Purchase Price;
(d) a certificate dated the Closing Date, in substantially in the form
of EXHIBIT D, signed by the Chief Financial Officer of Buyer, certifying that
Buyer is Solvent on the Closing Date after giving effect to the transactions
contemplated hereby (the "Solvency Certificate");
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(e) (i) an executed copy of that certain assignment of the Non-Compete
Agreement and release substantially in the form of EXHIBIT E hereto (the
"Assignment");
(f) a duly executed copy of the of the Lease Assignment; and
(g) a copy of the consent of each Governmental Authority and each
other person whose consent is required for the consummation of the transactions
contemplated by this Agreement or for the assignment of any of the Property of
Seller to Buyer.
SECTION 6.2 SELLER DELIVERIES. At or prior to Closing, Seller shall deliver
to Buyer:
(a) a certificate, dated the Closing Date, executed by Seller's
secretary, to the effect that (A) the Certificate of Incorporation and Bylaws of
Seller shall have not been amended since the date upon which certified copies of
each had been delivered to Buyer and remain in full force and effect and (B) the
officers executing this Agreement and Seller's Documents on behalf of Seller are
duly elected and hold the offices set forth therein, with copies of resolutions
approved by the board of directors of Seller attached as an exhibit thereto;
(b) a duly executed copy of the ▇▇▇▇ of Sale and such deeds,
assignments, certificates of title and other instruments of transfer and
conveyance, conveying, selling, transferring and assigning to Buyer title to all
of the Property (subject to Section 1.3), free and clear of all security
interests, liens, charges or encumbrances whatsoever, except for Permitted Liens
and those liens assumed by Buyer pursuant to this Agreement or the ▇▇▇▇ of Sale;
together with the written consents of all parties necessary in order to duly
transfer such title to the extent obtained;
(c) the Assignment of Intellectual Property Rights in the form
attached hereto as EXHIBIT F (the "IP Assignment");
(d) a duly executed copy of the Assignment;
(e) a duly executed copy of the Lease Assignment;
(f) a copy of the consent of General Electric Capital Corporation
("GECC") under Seller's Loan and Security Agreement with GECC to the
transactions consummated hereby (the "Bank Consent"); and
(g) a copy of the consent of each Governmental Authority and each
other person whose consent is required for the consummation of the transactions
contemplated by this Agreement or for the assignment of any of the Property of
Seller to Buyer.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENT. Subject
to the limitations set forth in this Article VII and notwithstanding any
investigation conducted at any time with regard thereto by or on behalf of Buyer
or Seller, all representations, warranties, covenants and agreements of Buyer in
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this Agreement shall survive the consummation of the transactions contemplated
hereby and the payment of the Purchase Price for a period of sixty days after
the Closing Date. All representations, warranties, covenants and agreements of
Seller in this Agreement shall survive the consummation of the transactions
contemplated hereby for a period of sixty days after the Closing Date. Each
representation and warranty made by Seller or Buyer in this Agreement shall
expire on the last day, if any, that Claims (as such term is defined herein) for
breaches of such representation or warranty may be made pursuant to this
Section, except that any such representation or warranty that has been made the
subject of a Claim prior to such expiration date shall survive with respect to
such Claim until the final resolution of such Claim pursuant to Article VII
hereof.
SECTION 7.2 INDEMNIFICATION BY BUYER. Subject to the limits set forth in
this Article VII, Buyer agrees to indemnify, defend and hold Seller and its
officers, directors, employees, independent consultants, affiliates, agents and
representatives (collectively, the "Seller Indemnified Parties") harmless from
and against any and all loss, liability, damage (net of insurance recovery or
other benefit), costs and expenses (including interest, penalties and reasonable
attorneys' fees) (collectively, "Losses") that any of Seller Indemnified Parties
may incur or become subject to arising out of or due to, directly or indirectly,
(a) any inaccuracy of any representation or the failure to perform or the breach
of any warranty, covenant or obligation of Buyer contained in this Agreement,
(b) any of the Assumed Liabilities arising on or after the Closing Date or (c)
the ownership of the Property or the conduct of the Business on or after the
Closing Date. Buyer will reimburse Seller Indemnified Parties for any legal or
other expenses reasonably incurred by them in connection with investigating,
defending or settling any such Loss, claim, liability, action or proceeding.
SECTION 7.3 INDEMNIFICATION BY SELLER. Subject to the limitations set forth
in this Article VII, Seller agrees to indemnify, defend and hold Buyer and its
officers, directors, employees, independent consultants, affiliates, agents and
representatives (collectively, the "Buyer Indemnified Parties") harmless from
and against any and all Losses that any of the Buyer Indemnified Parties may
incur or become subject to arising out of or due to, directly or indirectly, (a)
any inaccuracy of any representation or the failure to perform or the breach of
any warranty, covenant or obligation of Seller contained in this Agreement, (b)
any liability imposed upon Buyer as transferee of the Business or the Property,
or otherwise relating to the conduct of the Business in respect of any period
ending on or prior to the Closing Date, except to the extent such liability for
such period has been expressly assumed by Buyer as an Assumed Liability and (c)
any liability imposed upon Buyer and arising out of or relating to any of
Seller's other assets, operations, businesses or activities that are not part of
the Business; provided, that in the absence of fraud, Seller shall have no
liability under this Section 7.3 unless and until the aggregate amount of all
claims by Buyer Indemnified Parties arising out of one or more breaches of the
representations and warranties of Seller shall exceed, in the aggregate, an
amount equal to $10,000. The indemnification obligations of Seller for breach of
the representations and warranties contained herein, in the absence of fraud,
shall be limited to a maximum of $100,000 in the aggregate.
SECTION 7.4 CLAIMS. Any party seeking indemnification hereunder (the
"Indemnified Party") shall promptly notify the other party hereto (the
"Indemnifying Party") of any action, suit, proceeding, demand or breach (a
"Claim") with respect to which the Indemnified Party claims indemnification
19
hereunder, provided that failure of the Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations under this Section
7.4 except to the extent, if at all, that such Indemnifying Party shall have
been prejudiced thereby.
SECTION 7.5 THIRD PARTY CLAIMS. In order for an Indemnified Party to be
entitled to any indemnification provided for under this Agreement in respect of,
arising out of, or involving a claim or demand or written notice made by any
third party against the Indemnified Party (a "Third Party Claim") after the
Closing Date, such Indemnified Party must notify the Indemnifying Party in
writing of the Third Party Claim within 30 business days after receipt by such
Indemnified Party of written notice of the Third Party Claim; provided that the
failure of any Indemnified Party to give timely notice shall not affect his
right of indemnification hereunder except to the extent the indemnifying party
has actually been prejudiced or damaged thereby. If a Third Party Claim is made
against an Indemnified Party, within thirty (30) days after receipt of notice of
a particular matter by the Indemnified Party, the Indemnifying Party shall be
entitled, if it so chooses, to assume the defense thereof with counsel selected
by the Indemnifying Party (which counsel shall be reasonably satisfactory to the
Indemnified Party) in the event such Third Party Claim solely involves an action
for monetary damages and could not affect the Indemnified Party's business going
forward. If the Indemnifying Party assumes the defense of a Third Party Claim,
the Indemnified Party will cooperate in all reasonable respects with the
Indemnifying Party in connection with such defense, and shall have the right to
participate in such defense with counsel selected by it. The fees and
disbursements of such counsel, however, shall be at the expense of the
Indemnified Party; provided, however, that, in the case of any Third Party Claim
of which the Indemnifying Party has not employed counsel to assume the defense,
the fees and disbursements of such counsel shall be at the expense of the
Indemnifying Party. An Indemnifying Party shall not be liable hereunder to
indemnify the Indemnified Party for any settlement effected without its written
consent, to the extent it has assumed the defense of such claim, of any claim,
action or proceeding in respect of which indemnity may be sought hereunder.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 EXPENSES. Except as otherwise specifically provided in this
Agreement, all costs and expenses, including, without limitation attorney's
fees, incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses.
SECTION 8.2 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 (i) delivered
personally or by facsimile transmission (and a copy is mailed by regular mail
within 24 hours of such transmission), in either case with receipt acknowledged,
(ii) three business days after being sent by registered or certified mail,
return receipt requested, or (iii) one business day after being sent by prepaid
overnight carrier, with a record of receipt, to the parties at the following
addresses:
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(a) If to Buyer to:
▇▇▇▇▇▇▇▇ High Voltage Electronics Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(b) If to Seller to:
Del Global Technologies Corp.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Park Avenue Tower
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
or to such other address as any party shall have specified by notice in writing
to the other in compliance with this Section 8.2.
SECTION 8.3 ENTIRE AGREEMENT. This Agreement, the Schedules and Exhibits
attached hereto, the Buyer Agreements and the Seller Agreements constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements, representations and understandings
among the parties hereto including, without limitation, the Letter of Intent
dated July 27, 2004 between Buyer and Seller (the "Letter of Intent").
SECTION 8.4 BINDING EFFECT, BENEFITS, ASSIGNMENTS. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns; nothing in this Agreement, expressed or
implied, is intended to confer on any other person, other than the parties
hereto or their respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement. This Agreement
may not be assigned without the prior written consent of the other party hereto.
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SECTION 8.5 APPLICABLE LAW. This Agreement and the legal relations between
the parties hereto shall be governed by and construed in accordance with the
laws of the State of New York, without regard to conflicts of law rules of such
state.
SECTION 8.6 JURISDICTION. Each of the parties hereto hereby irrevocably
submits to the exclusive jurisdiction of any New York state court located in the
borough of Manhattan of the City of New York or federal court sitting in the
State of New York for the Southern District of New York over any action or
proceeding arising out of or relating to this Agreement and the transactions
contemplated hereby and each of the parties hereto hereby irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in such New York state or federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent legally possible, the defense
of an inconvenient forum to the maintenance of such action or proceeding. Each
of the parties hereto irrevocably consents to the service of any and all process
in any such action or proceeding by the mailing of copies of such process to
such party at its address set forth in this Agreement. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
SECTION 8.7 FURTHER ASSURANCES. At, and from time to time after the date
hereof, at the request and expense of Buyer but without further consideration,
Seller will execute and deliver such other instruments of conveyance,
assignment, transfer, and delivery and take such other action as Buyer
reasonably may request in order more effectively to convey, transfer, assign and
deliver to Buyer, and to place Buyer in possession and control of, any of the
rights, properties, assets and business constituting part of the Property, or to
assist in the collection or reduction to possession of any and all of such
rights, properties, and assets or to enable Buyer to exercise and enjoy all
rights and benefits of Seller with respect to the Property.
SECTION 8.8 COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
SECTION 8.9 HEADINGS. The headings used herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
SECTION 8.10. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by virtue of any
rule of law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the maximum extent possible.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year hereinabove first set forth.
BUYER:
▇▇▇▇▇▇▇▇ HIGH VOLTAGE ELECTRONICS CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
SELLER:
DEL GLOBAL TECHNOLOGIES CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
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