EXHIBIT 2(a)
EXECUTION COPY
STOCK PURCHASE AGREEMENT
by and among
RAYTECH CORPORATION,
ALLOMATIC PRODUCTS COMPANY
and
RAYMARK INDUSTRIES, INC.
BY ITS CHAPTER 11 TRUSTEE
dated as of
January 18, 2005
Table of Contents
-----------------
ARTICLE I PURCHASE AND SALE OF SHARES
Section 1.1 Purchase and Sale of Shares.....................................1
Section 1.2 The Purchase Price..............................................1
ARTICLE II THE CLOSING
Section 2.1 The Closing.....................................................1
Section 2.2 Deliveries by the Seller........................................1
Section 2.3 Deliveries by Purchaser.........................................2
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER
Section 3.1 Authorization...................................................2
Section 3.2 Title...........................................................2
Section 3.3 Sole Representations and Warranties.............................2
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 4.1 Organization; Authorization.....................................3
Section 4.2 Validity of Agreement...........................................3
Section 4.3 Consents and Approvals; No Violations............................
Section 4.4 Sole Representations and Warranties.............................3
ARTICLE V REPRESENTATIONS AND WARRANTIES OF RAYTECH
Section 5.1 Organization; Authorization.....................................4
Section 5.2 Validity of Agreement...........................................4
Section 5.3 Consents and Approvals; No Violations............................
Section 5.4 Sole Representations and Warranties.............................5
ARTICLE VI COVENANTS
Section 6.1 Submission for Court Approval...................................5
Section 6.2 Pledge of Shares................................................5
Section 6.3 Best Efforts....................................................5
Section 6.4 Further Assurances..............................................5
Section 6.5 Raytech Obligation..............................................6
ARTICLE VII CONDITIONS
Section 7.1 Conditions to Each Party's Obligation to Effect the Closing.....6
Section 7.2 Conditions to Obligations of Purchaser to Effect the Closing....6
Section 7.3 Conditions to Obligations of the Seller to Effect the Closing...7
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ARTICLE VIII TERMINATION
Section 8.1 Termination.....................................................7
Section 8.2 Effect of Termination...........................................8
ARTICLE IX DEFINITIONS AND INTERPRETATION
Section 9.1 Definitions.....................................................8
Section 9.2 Interpretation.................................................10
ARTICLE X MISCELLANEOUS
Section 10.1 Fees and Expenses..............................................10
Section 10.2 Amendment and Modification.....................................11
Section 10.3 Notices........................................................11
Section 10.4 Post-Closing Cooperation.......................................12
Section 10.5 Chapter 11 Trustee Capacity....................................12
Section 10.6 Counterparts...................................................12
Section 10.7 Entire Agreement; No Third Party Beneficiaries.................12
Section 10.8 Severability...................................................13
Section 10.9 Governing Law..................................................13
Section 10.10 Enforcement; Venue.............................................13
Section 10.11 Extension; Waiver..............................................13
Section 10.12 Assignment.....................................................13
SCHEDULE 6.1 Hearing and Bid Procedures
EXHIBIT A Form of Unsecured Subordinated Note
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STOCK PURCHASE AGREEMENT
Stock Purchase Agreement (this "Agreement"), dated as of January 18,
2005, by and among Allomatic Products Company, a Delaware corporation
("Purchaser"), Raytech Corporation, a Delaware corporation ("Raytech"), and
Raymark Industries, Inc., by its Chapter 11 Trustee (the "Seller"). Certain
capitalized terms used in this Agreement have the meanings assigned to them in
Article IX of this Agreement.
WHEREAS, the Seller currently beneficially owns a total of 41,904
shares of common stock, par value $1.00 per share, of the Purchaser, which
shares are issued in the name of its Chapter 11 Trustee (the "Shares"), which
Shares are represented by Stock Certificate No. 000115 of the Purchaser (the
"Stock Certificate"); and
WHEREAS, the Seller desires to sell to the Purchaser, and the Purchaser
desires to purchase from the Seller, the Shares on the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein,
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
Section 1.1 Purchase and Sale of Shares. On the terms and subject to
the conditions provided in this Agreement, in consideration of the payment of
the purchase price set forth in Section 1.2, at the Closing, the Seller shall
sell, convey, assign, transfer and deliver to Purchaser the Shares, free and
clear of all Encumbrances.
Section 1.2 The Purchase Price. On the terms and subject to the
conditions provided in this Agreement, in consideration of the aforesaid sale,
conveyance, assignment, transfer and delivery to Purchaser of the Shares,
Purchaser shall deliver to the Seller at the Closing the Note in the principal
amount of $7,200,000.
ARTICLE II
THE CLOSING
Section 2.1 The Closing. The sale and transfer of the Shares by the
Seller to Purchaser at the Closing shall take place at the offices of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP in New York, New York at 10:00 a.m. Eastern
Standard Time, two Business Days following the satisfaction and/or waiver of all
conditions to close set forth in Article VI (other than conditions which can be
satisfied only at the Closing) unless another date or place is agreed in writing
by each of the parties to this Agreement.
Section 2.2 Deliveries by the Seller(a) . At the Closing,
simultaneously with the Purchaser's deliveries under Section 2.3 of this
Agreement, the Seller shall deliver or cause to be delivered to Purchaser the
Stock Certificate in a form suitable for transfer together with all necessary
stock transfer stamps affixed thereto at the expense of the Sellers and
accompanied by a separate stock power duly endorsed in blank and duly and
validly executed by Xxxxxxx Xxxx, Trustee of Raymark Industries, Inc., the
record holder of the Shares, and otherwise sufficient to vest in Purchaser good
and marketable title to such Shares.
Section 2.3 Deliveries by Purchaser. At the Closing, simultaneously
with the Seller's deliveries under Section 2.2 of this Agreement, Purchaser
shall deliver to the Seller the Note in the principal amount of $7,200,000,
dated as of the Closing Date.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF THE SELLER
The Seller represents and warrants to Purchaser and Raytech as of the
date of this Agreement and as of the Closing Date that:
Section 3.1 Authorization. The Chapter 11 Trustee, acting in her
capacity as such, has the requisite authority to execute and deliver this
Agreement. This Agreement has been validly executed and delivered by the Seller
and, assuming due and valid authorization, execution and delivery hereof by
Purchaser and Raytech, constitutes a legal, valid and binding obligation of
Seller and is enforceable against Seller in accordance with its terms.
Section 3.2 Title. The Seller is the sole lawful beneficial owner of
the Shares, which ownership is free and clear of all Encumbrances. The Seller
does not own or have the right to acquire any stock, stock options, rights,
indebtedness or securities of Purchaser, other than the Shares. All of the
Shares owned by the Seller are represented by the Stock Certificate. The Seller
has the sole right to and, subject to the entry of the Final Order, at the
Closing shall convey to the Purchaser good and valid title to the Shares free
and clear of all Encumbrances.
Section 3.3 Registration of Note; Further Negotiation. The Seller
understands that the offering and sale of the Note to the Seller has not been,
and will not be, registered under the Securities Act. The Seller represents that
it may determine to transfer the Note to a liquidating trust or similar entity
under the terms of a plan of reorganization or pursuant to an order of the
Bankruptcy Court, which transfer will not be in violation of the Securities Act
or any similar state statute.
Section 3.4 Sole Representations and Warranties. The representations
and warranties made by the Seller in this Agreement are the sole and exclusive
representations and warranties made by the Seller, and the Seller hereby
disclaims any other express or implied representations and warranties. The
Seller acknowledges and agrees that the express representations and warranties
made by Purchaser in Article IV and by Raytech in Article V are the sole
representations and warranties being made by or on behalf of each such party,
and that Seller is not relying on any representations or warranties, or other
information, other than those representations and warranties expressly set forth
in Article IV or Article V.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser represents and warrants to the Seller as of the date of this
Agreement and as of the Closing Date that:
Section 4.1 Organization; Authorization. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Purchaser has full corporate power and authority to execute
and deliver this Agreement and the Note and to consummate the Transaction. The
execution, delivery and performance by Purchaser of this Agreement and the Note
and the consummation of the Transaction have been duly authorized by the Board
of Directors of Purchaser, and no other corporate action on the part of
Purchaser is necessary to authorize the execution and delivery by Purchaser of
this Agreement and the Note or the consummation of the Transaction. No vote of,
or consent by, the holders of any class or series of stock or indebtedness
issued by Purchaser is necessary to authorize the execution and delivery by
Purchaser of this Agreement and the Note or the consummation by it of the
Transaction.
Section 4.2 Validity of Agreement. This Agreement has been duly
executed and delivered by Purchaser, and, assuming due and valid authorization,
execution and delivery hereof by the Seller and Raytech, is a valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms.
Section 4.3 Consents and Approvals; No Violations. Except for the
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Securities Act and state
securities or blue sky laws, none of the execution, delivery or performance of
this Agreement and the Note by Purchaser or the consummation by Purchaser of the
Transaction will (i) conflict with or result in any breach of any provision of
the certificate of incorporation or by-laws of Purchaser, (ii) require any
filing with, or permit, authorization, consent or approval of, any Governmental
Entity, (iii) require any consent, approval or notice under, result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of modification, termination,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any contract, instrument or obligation to which Purchaser is a party or by
which it or any of its properties or assets may be bound, or (iv) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Purchaser or any of its properties or assets; except with respect to clauses
(ii), (iii) or (iv), such filings, permits, authorizations, consents, approvals,
notices, violations, breaches or defaults that would not, individually or in the
aggregate, reasonably be expected to prevent or materially delay the performance
by the Purchaser of its obligations under this Agreement.
Section 4.4 Sole Representations and Warranties. The representations
and warranties made by Purchaser in this Agreement are the sole and exclusive
representations and warranties made by Purchaser, and Purchaser hereby disclaims
any other express or implied representations and warranties. Purchaser
acknowledges and agrees that the express representations and warranties made by
the Seller in Article III are the sole representations and warranties being made
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by or on behalf Seller, and that Purchaser is not relying on representations or
warranties, or other information, other than those representations and
warranties expressly set forth in Article III.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF RAYTECH
Raytech represents and warrants to the Seller as of the date of this
Agreement and as of the Closing Date that:
Section 5.1 Organization; Authorization. Raytech is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Raytech has full corporate power and authority to execute and deliver
this Agreement and to consummate the Transaction. The execution, delivery and
performance by Raytech of this Agreement and the consummation of the Transaction
have been duly authorized by the Board of Directors of Raytech, and no other
corporate action on the part of Raytech is necessary to authorize the execution
and delivery by Raytech of this Agreement or the consummation of the
Transaction. No vote of, or consent by, the holders of any class or series of
stock or indebtedness issued by Raytech is necessary to authorize the execution
and delivery by Raytech of this Agreement or the consummation by it of the
Transaction.
Section 5.2 Validity of Agreement. This Agreement has been duly
executed and delivered by Raytech, and, assuming due and valid authorization,
execution and delivery hereof by the Seller and Purchaser, is a valid and
binding obligation of Raytech, enforceable against Raytech in accordance with
its terms.
Section 5.3 Consents and Approvals; No Violations. Except for the
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Securities Act and state
securities or blue sky laws, none of the execution, delivery or performance of
this Agreement by Raytech or the consummation by Raytech of the Transaction will
(i) conflict with or result in any breach of any provision of the certificate of
incorporation or by-laws of Raytech, (ii) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity, (iii) require
any consent, approval or notice under, result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of modification, termination, cancellation or
acceleration) under, any of the terms, conditions or provisions of any contract,
instrument or obligation to which Raytech or any of its Subsidiaries is a party
or by which any of them or any of their respective properties or assets may be
bound, or (iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Raytech, any of its Subsidiaries or any of their
properties or assets; except with respect to clauses (ii), (iii) or (iv), such
filings, permits, authorizations, consents, approvals, notices, violations,
breaches, defaults that would not, individually or in the aggregate, reasonably
be expected to prevent or materially delay the performance by Raytech of its
obligations under this Agreement.
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Section 5.4 Sole Representations and Warranties. The representations
and warranties made by Raytech in this Agreement are the sole and exclusive
representations and warranties made by Raytech, and Raytech hereby disclaims any
other express or implied representations and warranties. Raytech acknowledges
and agrees that the express representations and warranties made by Seller in
Article III and by Purchaser in Article IV of this Agreement are the sole
representations and warranties being made by the Seller and Purchaser,
respectively, and that Raytech is not relying on any representations or
warranties, or other information, other than those representations and
warranties expressly set forth in Article III or Article IV of this Agreement.
ARTICLE VI
COVENANTS
Section 6.1 Submission for Court Approval. (a)Within seven Business
Days of the date of this Agreement, the Seller shall file a motion (the "Sale
Motion") with the Bankruptcy Court seeking entry of (a) at a first hearing, the
First Order and (b) at a second hearing, the Final Order. The Seller shall use
its best efforts to obtain the entry of First Order and obtain the entry of the
Final Order, in each case, as promptly as possible subject to the schedule of
the Bankruptcy Court and any order of the Bankruptcy Court related to the
hearing on the First Order or the Final Order entered after the date of this
Agreement. The Seller shall deliver to Purchaser copies of pleadings, motions,
notices, statements, schedules, applications, reports and other papers to be
filed with the Bankruptcy Court.
(b) The Seller shall provide notice of the Sale Motion to
every Person required to receive notice in accordance with the notice provisions
of the Bankruptcy Code and orders in the Bankruptcy Cases, including, without
limitation, any applicable state taxing authority. The Seller shall advise
Purchaser of any written objections filed with the Bankruptcy Court to this
Agreement and timely provide Purchaser's counsel with a copy of any such written
objection and any subsequent pleadings, responses, statements or other papers
filed related to such objection.
Section 6.2 Pledge of Shares. The Seller shall retain the Shares in its
possession at all times prior to the Closing and shall not sell, assign,
transfer, pledge, hypothecate or otherwise transfer the Shares other than to
Purchaser.
Section 6.3 Best Efforts. Between the date of this Agreement and the
Closing Date, each of the Seller and Purchaser agrees to use its best efforts
and without further consideration to execute and deliver such other instruments
and to take, or cause to be taken, all actions, and to do, or cause to be done,
to assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate the Transaction in the most expeditious manner
practicable, including using its best efforts to cause the conditions precedent
set forth in Article VII to be satisfied.
Section 6.4 Further Assurances. From and after the Closing Date, the
Seller shall execute and deliver any deeds, bills of sale, assignments or
assurances and take and do any other actions and things to vest, perfect or
confirm of record or otherwise in Purchaser any and all right, title and
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interest in the Shares consistent with the Final Order or which may be
consistent with the duties of the Chapter 11 Trustee.
Section 6.5 Raytech Obligation. Raytech shall take such actions as may
reasonably be necessary to cause Purchaser to perform its obligations under this
Agreement.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party's Obligation to Effect the
Closing. The respective obligations of each party to effect the Closing shall be
subject to the satisfaction at or prior to the Closing Date of each of the
following conditions:
(a) Statutes; Court Orders. No statute, rule or regulation
shall have been enacted or promulgated by any Governmental Entity which
prohibits the consummation of the Transaction; and there shall be no order or
injunction of a court of competent jurisdiction in effect precluding
consummation of the Transaction;
(b) Bankruptcy Court Approval. The Bankruptcy Court shall have
entered a Final Order and any applicable appeal period has expired without the
filing of an appeal from the Final Order;
(c) No Litigation. There shall not have been commenced any
material action, suit, inquiry, proceeding or investigation by or before any
Governmental Entity against or involving Purchaser or the Shares; and
(d) Material Adverse Effect. There shall not have occurred
since the date of this Agreement any change, event or occurrence that would
reasonably be expected to have a material adverse effect on the financial
condition, operations or assets of Purchaser.
Section 7.2 Conditions to Obligations of Purchaser and Raytech to
Effect the Closing. The obligations of Purchaser and Raytech to consummate the
Closing shall be subject to the satisfaction on or prior to the Closing Date of
the following conditions:
(a) Representations and Warranties. All of the representations
and warranties of the Seller set forth in this Agreement shall be true and
correct in all material respects, in each case as of the date of this Agreement
and as of the Closing Date; and
(b) Seller Breach. The Seller shall have complied in all
material respects with any agreement or covenant to be performed or complied
with by the Seller under this Agreement.
The foregoing conditions are for the sole benefit of Purchaser and Raytech, may
be waived by both Raytech and Purchaser, in whole or in part, at any time and
from time to time in the sole discretion of both Raytech and Purchaser. The
failure by either of Raytech or Purchaser at any time to exercise any of the
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foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time.
Section 7.3 Conditions to Obligations of the Seller to Effect the
Closing. The obligations of the Seller to consummate the Closing shall be
subject to the satisfaction on or prior to the Closing Date of the following
conditions:
(a) Representations and Warranties. All of the representations
and warranties of each of Raytech and Purchaser set forth in this Agreement
shall be true and correct in all material respects, in each case as of the date
of this Agreement and as of the Closing Date; and
(b) Purchaser Breach. Purchaser shall have complied in all
material respects with any agreement or covenant to be performed or complied
with by Purchaser under this Agreement.
(c) Raytech Breach. Raytech shall have complied in all
material respects with any agreement or covenant to be performed or complied
with by Raytech under this Agreement.
The foregoing conditions are for the sole benefit of the Seller and may be
waived in writing by the Seller, in whole or in part, at any time and from time
to time in the sole discretion of the Seller. The failure by the Seller at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. The Transaction may be terminated or abandoned
at any time prior to the Closing Date:
(a) By the mutual written consent of each of the parties to
this Agreement;
(b) By any party, if any Governmental Entity shall have issued
an order, decree or ruling or taken any other action (which order, decree,
ruling or other action the parties hereto shall use their reasonable efforts to
lift), which permanently restrains, enjoins or otherwise prohibits the
Transaction and such order, decree, ruling or other action shall have become
final and non-appealable.
(c) By either Raytech or Purchaser, if a material breach of
any provision of this Agreement has been committed by the Seller and such
material breach cannot be cured, or (if and to the extent such breach is capable
of being cured by the Seller) has not been cured within 10 Business Days after
Raytech or Purchaser, has notified the Seller in writing of its intention to
terminate this Agreement pursuant to this clause (c);
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(d) By the Seller, if a material breach of any provision of
this Agreement has been committed by either Raytech or Purchaser and such
material breach cannot be cured, or (if and to the extent such breach is capable
of being cured by Raytech or Purchaser, as appropriate) has not been cured
within 10 Business Days after the Seller has notified Raytech and Purchaser in
writing of the Seller's intention to terminate this Agreement pursuant to this
clause (d);
(e) By either Raytech or Purchaser, if after the date of this
Agreement and prior to the Closing, the Seller sells, transfers or otherwise
disposes of, or agrees to sell, transfer or otherwise dispose of, any of the
Shares or any rights in the Shares to any Person other than Purchaser;
(f) By either Raytech or Purchaser, if (i) the Sale Motion has
not been filed within seven Business Days following the date of this Agreement,
(ii) the First Order shall not have been entered and become non-appealable
within 50 days following the date of this Agreement, or the service of the Sale
Motion and notice is not made within five Business Days after the entry of the
First Order or (iii) the Final Order shall not have been entered and become
non-appealable within 120 days following the date of this Agreement; and
(g) By either Raytech or Purchaser, upon the entry of an order
by the Bankruptcy Court authorizing the sale of the Shares or any portion
thereof to a Person or Persons other than Purchaser.
Section 8.2 Effect of Termination. In the event of the termination or
abandonment of the Transaction by any party hereto pursuant to the terms of this
Agreement, written notice thereof shall forthwith be given to the other parties
specifying the provision hereof pursuant to which such termination or
abandonment of the Transaction is made, and there shall be no liability or
obligation thereafter on the part of Raytech, Purchaser or the Seller except for
fraud or for willful breach of this Agreement prior to such termination or
abandonment of the Transaction or pursuant to Section 10.1.
ARTICLE IX
DEFINITIONS AND INTERPRETATION
Section 9.1 Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context clearly requires otherwise:
"Agreement" or "this Agreement" shall have the meaning set forth in the
recitals hereto.
"Bankruptcy Code" shall mean Title 11, U.S. Code, Sections 101 et seq.
"Bankruptcy Court" shall mean the United States Bankruptcy Court for
the District of Connecticut.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in New York City are required or authorized to be
closed.
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"Chapter 11 Trustee" shall mean Xxxxxxx X. Xxxx, solely in her capacity
as Chapter 11 Trustee for Raymark Industries, Inc. in Case No. 98-51532 in the
United States Bankruptcy Court for the District of Connecticut.
"Closing" shall mean the closing referred to in Section 2.1.
"Closing Date" shall mean the date on which the Closing occurs.
"Encumbrances" shall mean any and all liens, charges, security
interests, options, claims, mortgages, pledges, proxies, voting trusts or
agreements, rights or claims of third parties or other restrictions on title or
transfer of any nature whatsoever.
"Expense Reimbursement Amount" shall have the meaning set forth in
Section 10.1.
"First Order" shall mean an order of the Bankruptcy Court approving the
Expense Reimbursement Amount and approving the Hearing and Bid Procedures set
forth on Schedule 6.1 of this Agreement.
"Final Order" shall mean the order of the Bankruptcy Court pursuant to
Title 11 of the United States Code, among other matters, approving the sale of
the Shares by the Seller to the Purchaser, free and clear of all Encumbrances,
pursuant to the terms and subject to the conditions of this Agreement, and
finding that as of the Closing Date this Agreement effects a legal, valid,
enforceable and effective sale and transfer of the Shares to Purchaser and shall
vest Purchaser with title to the Shares free of any Encumbrances.
"Governmental Entity" shall mean a court, arbitral tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency.
"Note" shall mean a promissory note in the form of Exhibit A to this
Agreement.
"Purchaser" shall have the meaning set forth in the recitals hereto.
"Raytech" shall mean Raytech Corporation, a Delaware corporation.
"Sale Motion" shall have the meaning set forth in Section 6.1.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"SEC" shall mean the United States Securities and Exchange Commission.
"Seller" shall have the meaning set forth in the recitals hereto.
"Shares" shall have the meaning set forth in the recitals hereto.
"Stock Certificate" shall have the meaning set forth in the recitals
hereto.
"Subsidiary" shall mean, with respect to any Person, any corporation or
other organization, whether incorporated or unincorporated, of which (a) at
least a majority of the securities or other interests having by their terms
9
ordinary voting power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such Person or by
any one or more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries or (b) such Person or any other Subsidiary of such Person is a
general partner (excluding any such partnership where such Person or any
Subsidiary of such party does not have a majority of the voting interest in such
partnership).
"Transaction" shall mean all the transactions provided for or
contemplated by this Agreement.
Section 9.2 Interpretation. (a) When a reference is made in this
Agreement to a section or article, such reference shall be to a section or
article of this Agreement unless otherwise clearly indicated to the contrary.
(b) Whenever the words "include", "includes" or "including"
are used in this Agreement they shall be deemed to be followed by the words
"without limitation."
(c) The words "hereof", "herein" and "herewith" and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
article, section, paragraph, exhibit and schedule references are to the
articles, sections, paragraphs, exhibits and schedules of this Agreement unless
otherwise specified.
(d) The meaning assigned to each term defined herein shall be
equally applicable to both the singular and the plural forms of such term, and
words denoting any gender shall include all genders. Where a word or phrase is
defined herein, each of its other grammatical forms shall have a corresponding
meaning.
(e) A reference to any party to this Agreement or any other
agreement or document shall include such party's successors and permitted
assigns.
(f) A reference to any legislation or to any provision of any
legislation shall include any amendment to, and any modification or re-enactment
thereof, any legislative provision substituted therefor and all regulations and
statutory instruments issued thereunder or pursuant thereto.
ARTICLE X
MISCELLANEOUS
Section 10.1 Fees and Expenses. All costs and expenses incurred in
connection with this Agreement and the consummation of the Transaction shall be
paid by the party incurring such expenses; provided, however, that if after the
date of this Agreement and prior to the Closing, either Raytech or Purchaser
terminates this Agreement pursuant to Sections 8.1(e) or 8.1(g), then the Seller
shall pay to Raytech, within five Business Days of the sale or transfer of all
or any portion of the Shares or any rights therein to a Person other than
Purchaser, all documented out-of-pocket costs and expenses incurred by Raytech
or the Purchaser in connection with this Agreement and the consummation of the
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Transaction up to a maximum of $50,000 (the "Expense Reimbursement Amount"),
such payment to be made by wire transfer of immediately available funds to an
account designated by Raytech.
Section 10.2 Amendment and Modification. This Agreement may be amended,
modified and supplemented in any and all respects, but only by a written
instrument signed by all of the parties hereto expressly stating that such
instrument is intended to amend, modify or supplement this Agreement.
Section 10.3 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given when mailed, delivered personally,
telecopied (which is confirmed) or sent by a recognized overnight courier
service, such as Federal Express, to the parties at the following addresses (or
at such other address for a party as shall be specified by such party by like
notice):
if to Raytech, to:
Raytech Corporation
Xxxxx 000, Xxxx Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to Purchaser, to:
Allomatic Products Company
X.X. Xxx 000
Xxxxxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
11
and
if to the Seller, to:
Raymark Industries, Inc.
Xxxxxxx X. Xxxx
Chapter 11 Trustee, Raymark Industries, Inc.
FTI Consulting, Inc.
0 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxx Xxxxxx, Esquire
Pepe & Hazard LLP
Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Section 10.4 Post-Closing Cooperation. In case at any time after the
Closing Date any further action is necessary, proper or advisable to carry out
the purposes of this Agreement, as soon as reasonably practicable, each party
hereto shall take, or cause its proper officers or directors to take, all such
necessary, proper or advisable actions, subject to the terms of the Final Order
and the power and authority of a Chapter 11 Trustee to take such action.
Section 10.5 Capacity. The Chapter 11 Trustee is executing this
Agreement on behalf of the Seller solely in her capacity as Chapter 11 Trustee
of the Seller in the Bankruptcy Case and not in her individual capacity, and
shall not be liable hereunder in her individual capacity, and the Chapter 11
Trustee's attorneys shall not be liable hereunder, to Raytech or Purchaser or
any other person. The representatives of Raytech and Purchaser executing this
Agreement are executing this Agreement on behalf of Raytech or Purchaser, as
applicable, solely in their capacities as officers of Raytech or Purchaser, as
applicable, and not in their individual capacities and shall not be liable
hereunder in their individual capacities, and Raytech's and Purchaser's
attorneys shall not be liable hereunder, to the Seller or any other person.
Section 10.6 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties.
Section 10.7 Entire Agreement; No Third Party Beneficiaries. This
Agreement (a) constitutes the entire agreement and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and thereof and (b) is not intended to
confer any rights or remedies upon any Person other than the parties hereto.
12
Section 10.8 Severability. Any term or provision of this Agreement that
is held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction or other authority declares that any term or provision
hereof is invalid, void or unenforceable, the parties agree that the court
making such determination shall have the power to reduce the scope, duration,
area or applicability of the term or provision, to delete specific words or
phrases, or to replace any invalid, void or unenforceable term or provision with
a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision.
Section 10.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the principles of conflicts of law thereof.
Section 10.10 Enforcement; Venue. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to enforce specifically the terms and provisions of
this Agreement after the entry of the Final Order in any court of the United
States located in the State of New York or in New York state court, this being
in addition to any other remedy to which they are entitled at law or in equity.
In addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any Federal court located in the State of New York or
any New York state court in the event any dispute arises out of this Agreement
or any of the Transaction, (b) agrees that it shall not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court and (c) agrees that it shall not bring any action relating to this
Agreement or the Transaction in any court other than a Federal or state court
sitting in the State of New York.
Section 10.11 Extension; Waiver. At any time prior to the Closing Date,
the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) waive
compliance by the other parties with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of those rights.
Section 10.12 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
content of the other parties. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
13
IN WITNESS WHEREOF, Raytech, Purchaser and Seller have executed this
Agreement or caused this Agreement to be executed as of the date first written
above.
RAYTECH CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
ALLOMATIC PRODUCTS COMPANY
By: /s/ Xxxx X. Xxxx
--------------------------
Name: Xxxx X. Xxxx
Title: President
RAYMARK INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chapter 11 Trustee
14
EXHIBIT A
FORM OF UNSECURED SUBORDINATED NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN EXEMPTION THEREFROM UNDER SUCH ACT.
THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATED
TO THE PRIOR PAYMENT OF OBLIGATIONS OF THE OBLIGOR TO THE HOLDERS OF SENIOR
INDEBTEDNESS (AS DEFINED HEREIN) OF THE OBLIGOR.
ALLOMATIC PRODUCTS COMPANY
UNSECURED SUBORDINATED NOTE DUE _______ __, 2015
$7,200,000 INITIAL PRINCIPAL AMOUNT _______ __, 2005
FOR VALUE RECEIVED, the undersigned, Allomatic Products Company, a Delaware
corporation ("Allomatic" or the "Company"), hereby promises to pay to the order
of Raymark Industries, Inc. or other registered holders of this Note (such
original holder or any successor or assignee holder in accordance with Section
5.1, from time to time, the "Noteholder"), by wire transfer to the account for
payment specified in Section 8.1, or at such other account in the United States
as the Noteholder shall from time to time have designated to Allomatic in
writing, the unpaid principal balance under the Note as follows: (1) on each of
[insert anniversary date of Note], 2011, [insert anniversary date of Note],
2012, [insert anniversary date of Note], 2013 and [insert anniversary date of
Note], 2014, 3.0% of the then outstanding unpaid principal amount of this Note
on each such date shall be payable; and (2) on [insert anniversary date of
Note], 2015 (the "Final Maturity Date"), the balance of the unpaid principal
amount of this Note and any accrued and unpaid interest thereon shall be
payable.
1. THE NOTE
This Note (together with any note issued in exchange for it, the "Note") is
issued pursuant to and in accordance with Section 1.2 of the Stock Purchase
Agreement, dated as of January 18, 2005, by and among the Company, Raytech
Corporation, a Delaware corporation ("Raytech"), and Raymark Industries, Inc. by
its Chapter 11 Trustee as defined in the Stock Purchase Agreement. Capitalized
terms used in this Note shall have the meanings ascribed herein or in Schedule A
attached hereto.
2. INTEREST PROVISIONS
The Note shall bear interest at an annual rate equal to 8.0%. Interest on this
Note will be computed on the average daily outstanding principal amount
(including any PIK Amount) of this Note, based on a 360 day year consisting of
twelve 30-day months for the actual number of days which have elapsed, and
accrued interest shall be payable quarterly in arrears on each of March 31, June
30, September 30 and December 31, commencing on the first such date which occurs
after the date this Note is executed and on the Final Maturity Date (each such
date an "Interest Payment Date"; provided that if an Interest Payment Date
occurs on a day that is not a Business Day, the next Business Day shall be
deemed to be the Interest Payment Date). On each Interest Payment Date,
Allomatic shall pay (i) one-half of the accrued and unpaid interest on the Note
in cash and (ii) one-half of such accrued and unpaid interest shall be paid, at
the option of Allomatic, in cash or by increasing the outstanding principal
amount of the Note by such amount (the "PIK Amount"). Any such amount so
capitalized will thereafter accrue interest at the rate provided for above in
this Section 2. If Allomatic elects to pay in cash the one-half of the accrued
and unpaid interest on this Note described in clause (ii) of the third sentence
of this Section 2, then Allomatic shall provide the Noteholder with written
notice of such election at least fifteen (15) days prior to the Interest Payment
Date to which such payment relates.
Notwithstanding any provisions of this Note, in no event shall the amount of
interest paid or agreed to be paid by Allomatic exceed an amount computed at the
highest rate of interest permissible under applicable law.
3. OPTIONAL REDEMPTION; PROHIBITION ON PAYMENT.
3.1. Optional Redemption. Allomatic may at any time and from time to
time redeem the Note, in whole or in part, without premium or penalty, together
with all accrued and unpaid interest thereon.
3.2. Notice of Optional Redemption. Notice of each optional redemption
of the Note pursuant to Section 3.1 shall be given in accordance with Section
8.1 not fewer than three Business Days before the redemption date, in each case
by mailing to the Noteholder a notice of intention to redeem, which notice shall
specify the date of redemption and the aggregate principal amount of the Note to
be redeemed on such date.
3.3. Payment and Interest Cut-Off. Upon each optional redemption of the
Note, in whole or in part, Allomatic will pay to the Noteholder the amount of
the Note to be redeemed, as set forth in the notice delivered pursuant to
Section 3.2 hereof (the "Redemption Price") and no additional interest shall
accrue on the portion of the principal amount of the Note so redeemed, provided
that all accrued interest through the date of the payment of the Redemption
Price is paid in full. On the redemption date, if requested by Allomatic, the
Noteholder will deliver the Note to Allomatic for notation thereon of the amount
of principal so redeemed, and in consideration therefore, Allomatic shall
deliver the Redemption Price to the Noteholder, which will be payable by wire
transfer of immediately available funds to an account designated with reasonable
advance notice by such Noteholder.
3.4. Prohibition on Payment of Principal or Interest. No payment of
interest or principal shall be made at any time when the payment thereof is
prohibited by the provisions of Section 7, except that on any Interest Payment
Date when the payment of interest is prohibited under Section 7, the amount of
interest otherwise payable on that Interest Payment Date shall be added to the
outstanding principal amount of this Note and shall thereafter bear interest as
provided in Section 2.
2
4. DEFAULTS
4.1. Event of Default. An "Event of Default" shall exist if any of the
following conditions or events shall occur and be continuing:
4.1.1. Allomatic defaults in the payment of any interest on
the Note when the same becomes due and payable, and such default is not remedied
within ten (10) days; or
4.1.2. Allomatic fails to comply with the covenants contained
in Sections 6.1, 6.5 or 6.6; or
4.1.3. Allomatic fails to comply with the covenants contained
in Sections 6.2 or 6.3; or
4.1.4. Allomatic fails to comply with the covenants contained
in Section 6.4 and such default is not remedied within thirty (30) days after
Allomatic has received written notice of such default from the Noteholder; or
4.1.5. Allomatic defaults under the terms of any Indebtedness
for borrowed money (excluding Indebtedness evidenced by the Note) having an
outstanding principal amount of $1,000,000 or more, (i) if such default results
from the failure to pay any principal or interest amount prior to the expiration
of any grace period therefor provided under such indenture, or (ii) if such
default results from terms of any Indebtedness other than failure to pay any
principal or interest amount and results in the acceleration of such
Indebtedness prior to its express maturity; or
4.1.6. A proceeding under Title 11 of the U.S. Code or similar
federal or state laws for the relief of debtors shall be institued by, or
involuntarily instituted against, Allomatic and not dismissed within 60 calendar
days; or
4.1.7. Raytech or its successors shall cease to own directly
or indirectly a majority of the outstanding Capital Stock of Allomatic or its
successors.
4.2. Acceleration. Subject to Section 7.4, upon the occurrence and
during the continuance of any Event of Default, upon written notice to
Allomatic, the Noteholder may declare all principal and accrued interest then
outstanding under the Note to be due and payable immediately; provided, however,
that if the Event of Default referred to above in this Section 4.2 is an Event
of Default under Section 4.1.3, then the Noteholder may not declare the
principal and accrued interest then outstanding under the Note to be due and
payable until 15 days following the notice referred to above in this Section
4.2.
4.3. Waiver. Compliance with any covenant under this Agreement and any
Event of Default may be waived by the Noteholder. In addition, any waiver of
compliance by any holder of Senior Indebtedness of a covenant requiring
maintenance of the specified net worth ratio or maintenance of a specified
current ratio (or waiver of an event of default based on a default under any
such covenant) contained in Senior Indebtedness shall be deemed to constitute a
waiver with respect to any failure to comply with Sections 6.2 or 6.3 of this
3
Agreement, as the case may be, to the same extent and for the same duration as
the waiver under such Senior Indebtedness.
5. EXCHANGE AND SUBSTITUTION OF NOTE
5.1. Transfers of Note. The Noteholder may sell, transfer, negotiate or
assign the Note in whole but not in part. Upon receipt by Allomatic of (1) the
written, notarized instruction of the Noteholder stating in reasonably
acceptable form: (i) that the Note has been transferred, (ii) the identity of
the transferee and the address thereof for purposes of Section 8.1, (iii) that
the transfer is not in violation of any law, regulation or order applicable to
the Noteholder, (iv) evidence that the transferee is not treated as a foreign
person for United States tax purposes, and (v) a Form W-9 including a taxpayer
identification number for the transferee and such other information necessary to
comply with applicable law, and (2) the transferee's written acknowledgment of
the transfer and acceptance of the terms of this Note, and the transferee's wire
transfer instruction for where in the United States payment is to be wired,
Allomatic shall thereafter treat the transferee as the record holder of the
Note, and such transferee shall thereafter be the Noteholder. Allomatic shall
have no liability for any payment made to the last record owner if the foregoing
sentence has not been complied with by the Noteholder, and may treat the
Noteholder (including any transferee Noteholder pursuant to this Section 5.1) as
the owner of the Note for all purposes.
5.2. Replacement of Note. Upon receipt by Allomatic of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of the Note, and:
(i) in the case of loss, theft or destruction,
if required by Allomatic, the posting by such Person
of a bond, in such reasonable amount as Allomatic may
direct as indemnity, or
(ii) in the case of mutilation, upon surrender
and cancellation thereof,
Allomatic shall, at the Noteholder's expense, execute and deliver, in lieu
thereof, a new Note, dated and bearing interest from the date to which interest
shall have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest shall
have been paid thereon.
6. COVENANTS OF ALLOMATIC
Allomatic covenants and agrees that so long as the Note is outstanding:
6.1. Existence. Allomatic shall maintain and preserve its corporate
existence; provided that this Section 6.1 shall not be deemed to restrict the
ability of Allomatic to engage in a merger or consolidation in compliance with
Section 6.5.
6.2. Net Worth. The ratio of Allomatic's Net Worth to the aggregate
amount of principal then outstanding under the Note shall not be less than
0.5:1.0.
4
6.3 Current Ratio. Allomatic's Current Ratio shall not be less than
2.0:1.0; provided, however, that (i) the Current Ratio required to be maintained
by Allomatic pursuant to this Section 6.3 shall be reduced to equal any lower
current ratio required to be maintained after the date of this Agreement under
Allomatic's bank credit agreement, (ii) the Current Ratio covenant in this Note
shall be suspended at any time that Allomatic's bank credit agreement does not
contain a Current Ratio and (iii) if Allomatic no longer has a bank credit
agreement, then Allomatic shall be required to maintain a Current Ratio of
2.0:1.0 under this Section 6.3.
6.4 Financial Reporting. Allomatic shall deliver to the Noteholder
copies of each financial statement submitted by Allomatic to any holder of
Senior Indebtedness and if there is no requirement of providing financial
statements to any such holder of Senior Indebtedness then Allomatic shall
provide the Noteholder in a timely fashion with the following financial
information:
(a) Financial statements (including a balance sheet, profit and
loss statement and statement of cash flows) of Raytech audited
by an independent certified public accountant within one
hundred twenty (120) days of Raytech's fiscal year-end
together with supporting consolidating schedules and an
unaudited balance sheet, profit and loss statement and
statement of cash flows of Allomatic reflecting the financial
position of Allomatic and consolidating statement for the
entire "after market business" of Raytech reflecting the
financial position of the after market business of Raytech.
(b) Unaudited management prepared quarterly financial statements
(including a balance sheet, profit and loss statement and
statement of cash flows) of Raytech within 60 days of the end
of each fiscal quarter for the first three fiscal quarters of
the fiscal year of Raytech together with supporting
consolidating schedules and an unaudited balance sheet, profit
and loss statement and statement of cash flows of Allomatic
reflecting the financial position of Allomatic and
consolidating statement for the entire "after market business"
of Raytech reflecting the financial position of the after
market business of Raytech.
(e) Quarterly report of management with respect to Allomatic's
compliance with all covenants under Section 6 of this Note in
substantially the form attached as Exhibit A hereto (the
"Covenant Compliance Certificate").
6.5 Merger. Allomatic shall not consolidate with or merge with or into
any other Person unless, (i) Allomatic shall be the surviving corporation, or
(ii) the Person (if other than Allomatic) formed by such consolidation or into
which Allomatic is merged shall be a corporation organized and existing under
the laws of the United States or any State thereof or the District of Columbia
and shall expressly assume in writing all the obligations of Allomatic under
this Note.
6.6 Asset Sale. Within 210 days following the consummation of any Asset
Sale by Allomatic or any of its Subsidiaries in any fiscal year pursuant to
which Allomatic receives consideration which exceeds $1,000,000, when taken
together with the aggregate consideration received by Allomatic from all other
Asset Sales consummated during such fiscal year, Allomatic shall apply the Net
5
Available Cash from such Asset Sale in the following priority: (i) first, by
either (A) making capital expenditures or acquiring assets or entities in order
to invest in Allomatic's business or (B) paying the principal or accrued
interest outstanding under any Senior Indebtedness; or (ii) second, redeeming
the Note pursuant to Section 3.1 to the extent of such Net Available Cash. The
Net Available Cash from any such Asset Sale shall be maintained by Allomatic in
restricted cash or cash equivalents until applied in accordance with clauses (i)
and/or (ii) of the preceding sentence.
7. SUBORDINATION
7.1. Subordination. The indebtedness evidenced by this Note is hereby
expressly subordinated, to the extent and in the manner hereinafter set forth,
in right of payment to the prior payment in full of all the Company's existing
and future Senior Indebtedness (as defined hereinafter).
7.2. Indebtedness. As used in this Note, the term "Senior Indebtedness"
shall mean any and all Indebtedness of the Company to any Person, including,
without limitation, principal and interest (whenever accrued) and all other sums
due, and costs of collecting the same, for which the Company is liable under all
Indebtedness of the Company to banks, commercial finance lenders, insurance
companies or other financial institutions, or other Persons, and any
Indebtedness issued in exchange for or to refinance Senior Indebtedness (in
whole or in part), or arising from the satisfaction of Senior Indebtedness by a
guarantor.
7.3. Bankruptcy; Liquidation; Dissolution. If there should occur any
receivership, insolvency, assignment for the benefit of creditors, bankruptcy,
reorganization or arrangements with creditors (whether or not pursuant to
bankruptcy or other insolvency laws), sale of all or substantially all of the
assets, dissolution, liquidation or any other marshaling of the assets and
liabilities of the Company, or if this Note shall be declared due and payable
upon the occurrence of an event of default with respect to any Senior
Indebtedness, then (i) no amount shall be paid by the Company in respect of the
principal of or interest on this Note at the time outstanding, unless and until
the principal of and interest on the Senior Indebtedness then outstanding shall
be paid in full and (ii) no claim or proof of claim shall be filed with the
Company by or on behalf of the Noteholder that shall assert any right to receive
any payments in respect of the principal of or interest on this Note, except
subject to the payment in full of the principal of and interest on all of the
Senior Indebtedness then outstanding.
7.4. Default on Senior Indebtedness. If there occurs an event of
default that has been declared in writing with respect to any Senior
Indebtedness, or there exists an event of default under the terms of the
instrument pursuant to which any Senior Indebtedness is outstanding, permitting
the holder of such Senior Indebtedness to accelerate the maturity thereof, then,
unless and until such event of default shall have been cured or waived or shall
have ceased to exist, or all Senior Indebtedness shall have been paid in full,
no payment shall be made in respect of the principal of or interest on this
Note, and no acceleration of this Note shall be permitted, unless within one
hundred eighty (180) days (as may be extended pursuant to the next sentence)
after the happening of such event of default the maturity of such Senior
Indebtedness shall not have been accelerated. If during any such 180-day period
one or more additional events of default under the Senior Indebtedness shall
occur after the 151st day of such period, such 180-day period shall be extended
6
for 30 additional days and no payment on or acceleration of this Note shall be
permitted during the period as so extended; provided that no such period shall
exceed an aggregate of 210 days. If a 180-day (as extended) period as described
in the two preceding sentences shall have occurred, then no additional 180-day
period may begin with respect to any event of default under Senior Indebtedness
until there shall have been declared or exist an event of default arising
following the prior 180-day (as extended) period. Upon the cure, waiver or
cessation of existence of an event of default under Senior Indebtedness, or
termination of the 180-day (as extended) period, referred to in the first
sentence of this Section 7.4, this Note shall not be subject to acceleration in
respect of any Event of Default that is not then continuing, and this Note may
be accelerated only if there shall then exist an Event of Default which permits
the Noteholder to accelerate this Note pursuant to Section 4.2. Allomatic shall
provide the Noteholder notice of any event of default that has been declared in
writing with respect to any Senior Indebtedness promptly after receipt by
Allomatic of such written notice of default from its lenders under such Senior
Indebtedness.
7.5. Effect of Subordination. If any payment shall be received by the
Noteholder in contravention hereof and before the Senior Indebtedness shall have
been paid in full, such payment shall be received in trust for the benefit of,
and upon written notice from the Company or any holder of Senior Indebtedness
that such payment was in contravention hereof shall be paid over or delivered
and transferred to, the holders of the Senior Indebtedness to the extent
necessary to pay all such Senior Indebtedness in full. Subject to the terms of
this Section 7, including the restrictions set forth herein on payments or
acceleration under this Note and the rights, if any, of the holders of Senior
Indebtedness under this Section 7 to receive cash, securities or other
properties otherwise payable or deliverable to the Noteholder, nothing contained
in this Section 7 shall impair, as between the Company and the Noteholder, the
obligation of the Company, subject to the terms and conditions hereof, to pay to
the Noteholder the principal hereof and interest hereon as and when the same
become due and payable, or the Noteholder's rights, powers and remedies upon
default hereunder as provided under this Note and applicable law.
8. MISCELLANEOUS
8.1. Notices.
All notices and other communications hereunder shall be in writing and shall be
deemed given when mailed, delivered personally, telecopied (which is confirmed)
or sent by an overnight courier service, such as Federal Express, to the parties
at the following addresses (or at such other address for a party as shall be
specified by such party by like notice):
if to Allomatic, to:
Allomatic Products Company
X.X. Xxx 000
Xxxxxxxx, XX 00000
Attention: President
Telephone: (812) 268-032
7
and
if to the Noteholder, to:
Raymark Industries, Inc.
c/o Xxxxxxx X. Xxxx
Chapter 11 Trustee, Raymark Industries, Inc.
FTI Consulting, Inc.
0 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxx Xxxxxx, Esquire
Pepe & Hazard LLP
Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Payments shall be made to:
[INSERT PAYMENT INSTRUCTIONS]
8.2. Jurisdiction. Each of the parties to this Agreement hereby (i)
irrevocably submits to the exclusive jurisdiction of the state courts of the
State of New York or the United States District Court located in the Southern
District of New York for the purpose of any Action between the parties arising
in whole or in part under or in connection with this Note, (ii) waives to the
extent not prohibited by applicable law, and agrees not to assert, by way of
motion, as a defense or otherwise, in any such Action, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that any such Action
brought in one of the above-named courts should be dismissed on grounds of forum
non conveniens, should be transferred or removed to any court other than one of
the above-named courts, or should be stayed by reason of the pendency of some
other proceeding in any other court other than one of the above-named courts, or
that this Note or the subject matter hereof may not be enforced in or by such
court and (iii) agrees not to commence any such Action other than before one of
the above-named courts. Notwithstanding the previous sentence a party may
commence any Action in a court other than the above-named courts solely for the
purpose of enforcing a Governmental Order issued by one of the above-named
courts.
8.3. Service of Process. Each party hereby (i) consents to service of
process in any Action between the parties arising in whole or in part under or
in connection with this Note in any manner permitted by New York law, (ii)
agrees that service of process made in accordance with clause (i) above or made
by registered or certified mail, return receipt requested, at its address
8
specified pursuant to Section 8.1 hereof, will constitute good and valid service
of process in any such Action and (iii) waives and agrees not to assert (by way
of motion, as a defense, or otherwise) in any such Action any claim that service
of process made in accordance with clause (i) or (ii) above does not constitute
good and valid service of process.
8.4. Governing Law. This Note and all Actions arising in whole or in
part under or in connection herewith will be governed by and construed in
accordance with the domestic substantive laws of the State of New York, without
giving effect to any conflict of law provision or rule that would cause the
application of the laws of any other jurisdiction.
8.5. Amendment. This Note may be amended, and the observance of this
Note may be waived (either retroactively or prospectively), with (and only with)
the written consent of Allomatic and the Noteholder.
8.6. Payments Due on Non-Business Days. Anything in this Note to the
contrary notwithstanding, any payment of principal of, or interest on, any Note
that is due on a date other than a Business Day shall be made on the next
succeeding Business Day, including the additional days elapsed in the
computation of the interest payable on such next succeeding Business Day.
8.7. Severability. Any provision of this Note that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
8.8. Waiver of Jury Trial. ALLOMATIC AND THE HOLDER (BY ITS ACCEPTANCE
OF THIS NOTE) HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS NOTE (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.8
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
9
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed
by a duly authorized officer as of the date first written above.
ALLOMATIC PRODUCTS COMPANY
By: _____________________________
Name:
Title:
NOTEHOLDER:
RAYMARK INDUSTRIES, INC.
By: _______________________________
Name: Xxxxxxx X. Xxxx
Title: Chapter 11 Trustee
10
SCHEDULE A
DEFINED TERMS
As used herein, the following terms have the respective meanings set forth
below:
"ACTION" means any claim, action, cause of action or suit, litigation,
controversy, assessment, arbitration, investigation, hearing, charge, complaint,
demand, notice or proceeding to, from, by or before any Governmental Authority.
"AFFILIATE" means, with respect to any specified Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, such specified Person.
"ASSET SALE" means a sale, transfer or other disposition of assets of Allomatic
or its Subsidiaries, excluding any sales, transfers or other dispositions of
inventory or obsolete equipment in the ordinary course of business.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on which
commercial banks in New York City are required or authorized to be closed.
"CAPITAL STOCK" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the Exchange Act).
"CURRENT ASSETS" shall mean all assets which are so classified as current assets
in accordance with GAAP.
"CURRENT LIABILITIES" shall mean all liabilities which are so classified as
current liabilities in accordance with GAAP.
"CURRENT RATIO" shall mean the ratio of Current Assets of Allomatic to Current
Liabilities of Allomatic.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
"GAAP" means generally accepted accounting principles as in effect from time to
time in the United States of America and consistently applied across the periods
involved.
"GOVERNMENTAL AUTHORITY" means
(i) the government of the United States of America or any State or
other political subdivision thereof; or
11
(ii) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any
such government, or any arbitrator or arbitral body.
"GOVERNMENTAL ORDER" means any order, writ, judgment, injunction, decree,
stipulation, ruling, determination or award entered by or with any Governmental
Authority.
"GUARANTEE" means, with respect to any Person, (i) any guarantee of the payment
or performance of, or any contingent obligation in respect of, any Indebtedness
or other Liability of any other Person, (ii) any other arrangement whereby
credit is extended to any obligor (other than such Person) on the basis of any
promise or undertaking of such Person (a) to pay the Indebtedness or other
Liability of such obligor, (b) to purchase any obligation owed by such obligor,
(c) to purchase or lease assets under circumstances that are primarily designed
to enable such obligor to discharge one or more of its obligations or (d) to
maintain the capital, working capital, solvency or general financial condition
of such obligor and (iii) any Liability as a general partner of a partnership or
as a venturer in a joint venture in respect of Indebtedness or other obligations
of such partnership or venture.
"INDEBTEDNESS" means, with respect to any Person, without duplication, all
obligations (including in respect of principal, accrued interest, penalties,
fees and premiums) of such Person (i) for borrowed money (including overdraft
facilities to the extent drawn on), (ii) evidenced by notes, bonds, debentures
or other similar instruments (other than performance, surety and appeal bonds
arising in the ordinary course of business in respect of which such Person's
Liability remains contingent), (iii) for the deferred purchase price of
property, goods or services (other than trade payables or accruals and deferred
compensation items incurred in the ordinary course of business), (iv) in respect
of letters of credit and bankers' acceptances (other than unfunded letters of
credit and bankers' acceptances arising in the ordinary course of business in
respect of which such Person's Liability remains contingent), (v) in respect of
capital lease obligations, (vi) Indebtedness of others secured by a lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person), (vii) all payment obligations of such Person under any
interest rate protection agreement (including, without limitation, any interest
rate swaps, caps, floors, collars and similar agreements) and currency or
commodity hedging, swap and similar agreements and (viii) in the nature of
Guarantees of the obligations described in clauses (i) through (vii) above of
any other Person.
"LIABILITY" means, with respect to any Person, any liability or obligation of
such Person whether known or unknown, whether asserted or unasserted, whether
determined, determinable or otherwise, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated and whether due or to
become due.
"NET AVAILABLE CASH" means the cash payments received by the Company or a
Subsidiary in connection with an asset sale (including any cash received by way
of deferred payment of principal pursuant to a note or installment receivable or
otherwise, but only as and when received) net of all legal, title and recording
tax expenses, commissions and other fees and expenses incurred, and all federal,
state, local and foreign taxes paid or required to be accrued as a liability
under GAAP, as a consequence of such asset sale, and in each case net of all
payments made on any Indebtedness, together with premium or penalty, if any and
accruing interest thereon, which is secured by a Lien on any assets subject to
such asset sale, in accordance with the terms of any lien upon or other security
agreement of any kind with respect to such assets, or which must by its terms,
12
or in order to obtain a necessary consent to such asset sale, or by applicable
law be repaid out of the proceeds from such asset sale, net of all distributions
and other payments required to be made to minority interest holders in
Subsidiaries as a result of such asset sale, and net of any reserve for
post-closing adjustments relating to such asset sale.
"NET WORTH" means total assets minus total liabilities, each as set forth on the
balance sheet of Allomatic.
"PERSON" means any individual or corporation, association, partnership, limited
liability company, joint venture, joint stock or other company, business trust,
trust, organization, Governmental Authority or other entity of any kind.
"SENIOR INDEBTEDNESS" shall have the meaning provided in Section 7.2 hereof.
"SUBSIDIARY" means, with respect to any specified Person, any other Person of
which (or in which) such specified Person, at the time, directly or indirectly
through one or more Subsidiaries, (i) owns at least 50% of the outstanding
capital stock (or other shares of beneficial interest) having ordinary voting
power to elect a majority of the board of directors or other similar governing
body (irrespective of whether at the time capital stock (or other shares of
beneficial interest) of any other class or classes of such Person shall or might
have voting power upon the occurrence of any contingency), or (ii) is a general
partner (in the case of a partnership) or a managing member (in the case of a
limited liability company).
13
EXHIBIT A
FORM OF COVENANT COMPLIANCE CERTIFICATE
ALLOMATIC PRODUCTS COMPANY - COVENANT CALCULATION TEMPLATE
In Accordance with Exhibit A to the "Stock Purchase Agreement" dated January 18,
2005
In accordance with the Stock Purchase Agreement dated January 18, 2005 by and
among Raytech Corporation, Allomatic Products Company ("Allomatic") and Raymark
Industries, Inc., Allomatic must maintain compliance with certain covenants as
set out in Section 6 of Exhibit A - Form of Unsecured Subordinated Note to the
Stock Purchase Agreement.
These covenants include 6.1 Existence and Conduct of Operations, 6.2 Net Worth,
6.3 Current Ratio, 6.4 Financial Reporting, 6.5 Merger and 6.6 Asset Sale.
See attached calculation as of the quarter ended XXX of covenants 6.2 Net Worth
and 6.3 Current Ratio, noting compliance.
Management of Allomatic hereby declares and certifies that it is in compliance
with all of the covenants as set out in Section 6 of the Unsecured Subordinated
Note of Allomatic due ________, 2015 as of the quarter ended XXX.
------------------------ --------------------
Officer of the Company Date
6.2 NET WORTH TO PRINCIPAL OUTSTANDING
------------------------------------------------------------------------------
IQUARTER ENDED
------------------------------------------------------------------------------
A
Total Assets B
Total Liabilities
------------------------------------------------
Net Worth C=A-B
------------------------------------------------
Principal Outstanding of Subordinated Note - D
------------------------------------------------
Net Worth to Principal Outstanding
------------------------------------------------------------------------------
=C/D 0.5:1.0 YES / NO
------------------------------------------------------------------------------
A - Total Assets - From the "Total Assets" line item on the balance sheet.
B - Total Liabilities - From the "Total Liabilities" line item on the balance
sheet.
D - Principal Outstanding of Subordinated Note - This is the amount of principal
outstanding at the end of the quarter of the "Unsecured Subordinated Note Due
[ ] XX, 2015" as defined in Exhibit A to the "Stock Purchase Agreement"
between Raytech Corporation, Allomatic Products Company and Raymark Industries,
Inc.
6.3 CURRENT RATIO
-------------------------------------------- ----------------------
(QUARTER ENDED________________I
Current Assets A
Current Liabilities B
Current Ratio =A/B
2.00:1.00 I Yes | No I
A - Current Assets - From the "Current Assets" line item on the balance sheet.
B - Current Liabilities - From the "Current Liabilities" line item on the
balance sheet.
SCHEDULE 6.1
HEARING AND BID PROCEDURES
The following sets forth the hearing and bidding procedures (the
"Hearing and Bid Procedures") pursuant to which Raymark Industries, Inc., by its
Chapter 11 Trustee, Xxxxxxx X. Xxxx (the "Seller"), will solicit bids and seek
authority to sell the Shares.
The Seller has entered into a Stock Purchase Agreement (the
"Agreement") with Raytech Corporation, a Delaware corporation ("Raytech"), and
Allomatic Products Company, a Delaware corporation ("Purchaser"), for the sale
of the Shares in exchange for a Note of principal amount $7,200,000 (the
"Purchase Price").
Capitalized terms used herein and not otherwise defined have the
meanings ascribed to such terms in the Agreement.
SUBMISSION OF BIDS
1. Bids must be submitted for all (and not less than all) of the
Shares.
2. Any Person (other than Purchaser) that would like to purchase the
Shares must submit a bid (a "Competing Bid") prior to 5:00 p.m., Eastern Time
within 30 days after the entry of the First Order (the "Competing Bid Deadline")
by the Bankruptcy Court.
3. To be a qualified bid which the Seller may consider (a "Qualified
Bid"), a Competing Bid shall remain open and irrevocable until the earlier to
occur of (i) the closing of the relevant transaction pursuant to the Accepted
Offer (as defined below) or (ii) 45 days after entry of the Final Order by the
Bankruptcy Court, and shall:
a) be made by a Person (i) demonstrating reasonable evidence
of committed financing or other ability to consummate the proposed transaction
in a time period acceptable to the Seller and (ii) delivering an offer that the
Seller in good faith believes is reasonably likely to lead to a Accepted Offer
(as defined below) (a "Qualified Bidder");
b) be submitted in a writing signed by the Qualified Bidder
stating that the Qualified Bidder offers to consummate a transaction pursuant to
an enclosed agreement which shall be the Agreement, marked to identify any and
all proposed changes to the Agreement, and identifying (i) the bidder and any
investor group, (ii) the consideration offered in such Competing Bid, (iii)
financial information regarding the bidder and its ability to consummate the
proposed transaction, including audited financial statements for the bidder's
most recently completed fiscal year and unaudited quarterly financial statements
for each quarterly period following such fiscal year and (iv) all terms and
conditions of the Competing Bid;
c) represent that the Qualified Bidder has obtained all
necessary approvals for the purchase of the Shares;
d) be a higher or better offer for the Shares, and such offer
shall not be considered a higher or better offer than is provided in the
Agreement, unless (i) at a minimum, such Competing Bid provides for aggregate
consideration (including cash and non-cash consideration) to the Seller in an
amount equal to or greater than the sum of $300,000 plus the Purchase Price (the
"Alternative Minimum Purchase Price") and (ii) it is not subject to (A) a
condition based on the outcome of due diligence, or similar review, or corporate
approval, (B) any condition or contingency regarding the procurement or funding
of financing or equity investments to fund the transaction or (C) conditions,
representations or terms unacceptable to the Seller in its sole and absolute
discretion; provided, however, that the Seller, in its sole and absolute
discretion, may add additional requirements by announcement prior to the Overbid
Hearing (defined below);
e) be submitted accompanied by a bank check made payable to
the Chapter 11 Trustee in the amount of $55,000 (the "Initial Deposit"), which
shall be refunded to the competing bidder if the transaction is consummated with
any other bidder or the competing bidder; provided that if such competing bidder
is the successful bidder or is required to close during the period that its
offer is held to be outstanding and fails to close, the Initial Deposit will be
forfeited in its entirety by the competing bidder; and the Chapter 11 Trustee
shall apply the Initial Deposit to costs and expenses incurred by the Chapter 11
Trustee and other applicable parties related to the sale of the Shares; and
f) be submitted on or before the Competing Bid Deadline by
delivering the complete Competing Bid to Xxxxxxx X. Xxxxxx, Esq., Counsel to the
Trustee, Pepe & Hazard LLP, 00 Xxxxxxx Xxxx, Xxxxxxxxx Xxxxxxxxxxx 00000-0000.
BID PROTECTION
4. Raytech shall be entitled, at the time provided and subject to the
terms and conditions set forth in the Agreement, to all documented out-of-pocket
costs and expenses incurred by Raytech or Purchaser in connection with the
Agreement and the consummation of the Transactions up to a maximum of $50,000
(the "Expense Reimbursement Amount").
5. Seller shall pay the Expense Reimbursement Amount by wire transfer
of immediately available funds within five (5) Business Days of a sale or
transfer of all or any portion of the Shares or any rights therein to any Person
(other than Purchaser), to such account as Raytech may designate in writing.
THE OVERBID HEARING
6. If Qualified Bids have been received by the Competing Bid Deadline,
then commencing within approximately seven (7) Business Days after the Competing
Bid Deadline, at 10:00 a.m. Eastern Time, the Seller shall hold an Overbid
Hearing (as defined below). The Overbid Hearing shall be organized and conducted
by the Seller at the United States Bankruptcy Court, District of Connecticut,
Bridgeport Division, 000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxxxx (or such
other place selected by the Seller), on invitation to Purchaser and each
Qualified Bidder (the "Overbid Hearing"). At least three Business Days prior to
the Overbid Hearing, the Seller shall deliver copies of all Qualified Bids
(including all documents described in Section 4) to Purchaser and each other
Qualified Bidder. Bids will be received at the Overbid Hearing for the Shares.
Subsequent overbids in excess of the Alternative Minimum Purchase Price shall be
in an amount of at least $250,000 in excess of the prior bid. Purchaser shall be
permitted to include as a credit (without duplication) the amount of the Expense
Reimbursement Amount as part of any overbid it makes. Nothing in the foregoing
shall make the Seller liable for the payment of the Expense Reimbursement Amount
if Purchaser is ultimately the winning bidder. The Expense Reimbursement Amount
shall be taken into account in determining the highest or best bid in each round
of bidding. The only Persons who will be permitted to bid at the Overbid Hearing
are authorized representatives of Purchaser and each Qualified Bidder, in each
case that are physically present at the Overbid Hearing. Each bid submitted at
the Overbid Hearing must comply with the procedures set forth herein for
Qualified Bids and copies of each bid must be provided to Purchaser and each
other Qualified Bidder at the Overbid Hearing. All bids shall be made in the
physical presence of the Seller, Purchaser and all other Qualified Bidders. Such
bidding procedures shall be subject to, and in conformity with, the procedures
of the Bankruptcy Court and any directives issued by the Bankruptcy Court.
7. The Seller shall not be deemed to have accepted any offer unless and
until such offer and bid and the Seller's acceptance thereof have been
subsequently authorized by separate order of the Bankruptcy Court, District of
Connecticut (the "Bankruptcy Court").
8. The Seller is authorized to conduct the Overbid Hearing in
accordance with such additional procedures and requirements as the Seller shall
from time to time announce, consistent with these Hearing and Bid Procedures.
9. At the Overbid Hearing, after the conclusion of bidding, the Seller
shall select the offer that the Seller determines in its reasonable discretion
reflects the highest or best value for the Shares (such offer, the "Accepted
Offer"), taking into account all factors the Seller deems relevant, including,
but not limited to, the terms and conditions of the proposed purchase agreement,
the scope of the proposed transaction, the form and market value of any non-cash
consideration offered, and the likelihood and timing of closing on such proposed
transaction.
10. At the Overbid Hearing, after the conclusion of bidding, the Seller
shall notify the Person submitting an Accepted Offer (the "Successful Offeror")
that such Person's offer has been determined by the Seller to be an Accepted
Offer.
11. The Court will then determine whether to confirm the sale. If it is
determined that the sale to the Successful Offeror should be confirmed, the
Closing shall occur within 15 calendar days following the entry of the Sale
Order or, if Purchaser is the Successful Offeror, as provided in Section 2.1 of
the Agreement.
12. If for any reason a Person submitting an Accepted Offer fails to
consummate the acquisition of the Shares, the offeror of the next highest or
best bid for the Shares, will automatically be deemed to have submitted an
Accepted Offer, and the Seller is authorized to effect the sale of the Shares to
such offeror as soon as is commercially reasonable without further order of the
Bankruptcy Court.
13. Each bidder will be responsible for, and will indemnify the Trustee
and her authorized agents against any and all claims for consultant's, broker's
and auctioneer's commissions, where the basis of the claim by such other
consultant, broker and/or auctioneer is its asserted dealings with such bidder.
14. The Hearing and Bid Procedures are solely for the benefit of the
Seller and Purchaser, and nothing contained in the First Order shall create any
rights in any other Person or bidder.
15. The Bankruptcy Court shall retain jurisdiction to hear and
determine all matters arising from or relating to the implementation of the
First Order.
NOTICE OF HEARING AND BID PROCEDURES, SALE MOTION AND SALE HEARING
16. Within five (5) Business Days after the entry of the First Order,
the Seller shall serve via first-class mail a notice of the Hearing and Bid
Procedures, the Sale Motion and the Overbid and Sale Hearing (defined below), in
such form as the Bankruptcy Court shall approve (the "Sale Notice"), on the
following entities: (i) all prospective offerors who have contacted the Chapter
11 Trustee; (ii) all parties who have filed a written notice of appearance and
request for service in the case; and (iii) all Persons pursuant to Bankruptcy
Rules 6004(c) and 9014. Service pursuant to Bankruptcy Rules 6004(c) and 9014
shall be by first-class mail. In addition, the Seller shall publish the Sale
Notice (in summary form) in The Wall Street Journal (National Edition) or
another national publication. Pursuant to Bankruptcy Rule 2002, this service and
publication of the Sale Notice shall constitute good and sufficient notice of
the Hearing and Bid Procedures, the Overbid Hearing, the First Order, the Sale
Motion and the Sale Hearing (and any proceedings to be held thereon) on all
known and unknown creditors and parties-in-interest.
17. Objections, if any, to the Sale Motion shall be in writing, shall
conform to the Bankruptcy Rules and local rules and orders of the Bankruptcy
Court, shall set forth (i) the nature of the objector's claims against or
interests in the Debtors' estate; (ii) the basis for the objection; (iii) the
specific grounds therefor; and (iv) all evidence in support of said objection,
and shall be filed and served so as to be received on or before ___________
Eastern Time on Xxxxxxx X. Xxxxxx, Esq., Pepe & Hazard LLP, 00 Xxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxxxx 00000-0000 and counsel for Raytech (Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, Four Times Square, Xxx Xxxx, XX 00000, Attention: Xxxxxxx X.
Xxxxxx). Any Person objecting to the Sale Motion that has not complied with the
requirements of this paragraph shall not be heard at the Sale Hearing. If
Purchaser or any other Qualified Bidder objects to the Seller's determination of
a Qualified Bid as a higher or better bid for the Shares, the sole and exclusive
remedy of such Qualified Bidder shall be to bid under protest at the Overbid
Hearing and, upon compliance with this paragraph, have standing at the Sale
Hearing to contest the Seller's determination.
18. Except as set forth above, nothing otherwise contained in the First
Order shall be deemed to deprive any Person of the right to object timely to the
Sale Motion, all of which rights will be expressly reserved by the First Order.
SALE HEARING
19. The Sale Hearing to consider the relief requested in the Sale
Motion and to consider whether to approve the Accepted Offer (the "Sale
Hearing") shall be held before the Bankruptcy Court immediately following the
Overbid Hearing on _________________, 2005 at __________ Eastern Time, or at
such other time as the Bankruptcy Court may determine.
