Exhibit 2.3
STOCK PURCHASE AGREEMENT
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This Stock Purchase Agreement (this "Agreement"), dated as of April 27, 2002, is
by and between Evox Rifa AB, a Swedish corporation, as buyer (the "Buyer") and
Aerovox Incorporated, a Delaware corporation, as debtor-in-possession (the
"Seller").
WITNESSETH
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WHEREAS, Seller is operating as a debtor-in-possession under Chapter 11 of the
United States Bankruptcy Code, as amended, in Case No. 01-14680 - JNF (the
"Bankruptcy Case") pending in the United States Bankruptcy Court for the
District of Massachusetts (the "Bankruptcy Court"); and
WHEREAS, Seller owns all of issued and outstanding shares in the capital of BHC
Aerovox Limited, a limited liability company incorporated under the laws of
England and Wales and registered under number 2775957 (the "Acquired
Subsidiary"); and
WHEREAS, the Acquired Subsidiary is engaged in the design, development,
manufacture, sale and distribution of aluminum electrolytic (the "Business") at
its facility and registered office at 00-00 Xxxxxxxxxx Xxxxx, Xxxxxx Industrial
Estate, Xxxxxxxx, XX0 0XX, Xxxxxx Xxxxxxx; and
WHEREAS, the Buyer desires to purchase from the Seller, and the Seller desires
to sell to the Buyer, the Stock (as defined below) subject to the terms and
conditions of this Agreement; and
WHEREAS, the Stock will be sold pursuant to the terms of this Agreement and an
order of the Bankruptcy Court approving and authorising such sale under Section
363 of the Bankruptcy Code pursuant to a Sale Approval Order (as defined below).
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
promises contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
ARTICLE I
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DEFINITIONS
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1.1 Defined Terms. In addition to terms which are used and otherwise defined in
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this Agreement, the terms below shall have the following meanings:
"Act" means the Great Britain Companies Xxx 0000, as amended.
"Agreed Rate" means the U.S. Dollar to Pound Sterling ("Sterling" or
"(pound)") exchange rate of 1.44 : 1 (respectively).
"Auction" shall mean the auction scheduled to take place for the sale of
the Stock pursuant to a motion filed by the Seller with the Bankruptcy
Court.
Exhibit 2.3
"Balance Sheet Date" means 31 December, 2001.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, 11
U.S.C. (S) 101 et seq., as amended.
"Books and Records" shall mean all books and records of the Acquired
Subsidiary of any and every kind, including, without limitation, lists,
ledgers, files, reports, plans, drawings and operating records of every
kind, held or maintained by the Acquired Subsidiary.
"Business Day" shall mean any day excluding Saturday, Sunday and any day
that is a legal holiday within the meaning of Rule 9006(a) of the Federal
Rules of Bankruptcy Procedure.
"Business IP" means all Intellectual Property owned by the Acquired
Subsidiary and used solely in the operation of the Business as it is now
being conducted.
"Connected Person" means a person connected with the Seller, the Acquired
Subsidiary or any of the directors (or any former director of the Acquired
Subsidiary) within the meaning of section 000, Xxxxxx Xxxxxxx Xxxxx Xxx
0000.
"Encumbrance" shall mean any interest of any person (including any right or
option to acquire or right of pre-emption) or any mortgage, assignment,
judgment, lien, pledge, charge, security interest or title retention
whether voluntarily incurred or arising by operation of law.
"Escrow Amount" means, subject to Section 3.3(b), Six Hundred Thousand U.S.
Dollars ($600,000).
"Event" means the existence of any state of affairs and any payment,
transaction, act, omission or occurrence of whatever nature whether or not
the Acquired Subsidiary or the Buyer is a party thereto and which includes
the execution of this Agreement and completion of the sale of the Stock to
the Buyer and references to an Event occurring on or before Closing shall
include an Event deemed, pursuant to any Taxation Statute, to occur or
which is otherwise treated or regarded as occurring on or before Closing.
"Governmental Authority" shall mean any government, any governmental
entity, department, commission, board, agency or instrumentality, and any
court, tribunal or judicial body, whether federal, state, local, foreign or
supranational.
"Harm or Damage" means harm or damage to or other interference with the
Environment.
"Hazardous Matter" any means and all matters (whether alone or in
combination with other matter) which may or is liable to cause Harm or
Damage.
Exhibit 2.3
"Intellectual Property" means all patents, copyrights, database rights,
topography rights, design rights, Know-How, trade secrets and all other
intellectual property rights and rights or forms of protection of the same
or of a similar or equivalent nature or effect which may subsist anywhere
in the world whether or not registered or capable of registration and
together with all applications for registration of and rights to apply for
any of the foregoing.
"Intercompany Payables" means any and all amounts due and owing (or
purported to be due and owing) or to become due at any time (or purported
to become due at any time) on whatever grounds or for whatever reason
(including rights (purported or otherwise) of set-off against Intercompany
Receivables or otherwise) by the Acquired Subsidiary to any of the Seller,
its affiliates, Connected Persons, companies in the Seller's group of
companies or their respective assigns, transferees, novatees, successors in
title, custodians (as defined in the Bankruptcy Code), rehabilitators,
receivers, trustees, conservators, liquidators or persons having similar or
analagous powers pursuant to applicable laws.
"Intercompany Receivables" means any and all amounts due and owing to or to
become due and owing at any time on whatever grounds or for whatever reason
by the Seller, its affiliates, Connected Persons, companies in the Seller's
group of companies, or their respective assigns, transferees, novatees,
successors in title, custodians (as defined in the Bankruptcy Code),
rehabilitators, receivers, trustees, conservators, liquidators or persons
having similar or analagous powers pursuant to applicable laws to the
Acquired Subsidiary, calculated in accordance with Section 6.7(a).
"Interest-Bearing Indebtedness" means the aggregate amount due at Closing
from the Acquired Subsidiary to Lloyd's TSB Bank Plc, Lloyds Bowmaker
Limited and Barclays Mercantile Finance Limited, including any refinancing
of such indebtedness, and any similar arrangements, or any other
interest-bearing indebtedness pursuant to any loans, hire purchase
agreements, letters of credit, mortgages, debentures and guarantees.
"Inventory" means all the stock-in-trade, raw materials, components,
work-in-progress and finished Products and packaging and promotional
material of the Business as at Closing.
"Know-How" means all information, data and methodology not at present in
the public domain and all financial, commercial, trade and business secrets
of whatever nature and in whatever form, including, without limitation,
that comprised in, derived from or relating to any Materials.
"Liability for Taxation" means any liability of the Acquired Subsidiary to
make a payment of or in respect of Taxation whether or not the same is
primarily payable by the Acquired Subsidiary and whether or not the
Acquired Subsidiary has or may have any right of reimbursement against any
other person or persons and shall also include:
(a) the Loss of any Relief where such Relief has been taken into account
in computing and so reducing or eliminating any provision for deferred
Tax which appears in the accounts of the Acquired Subsidiary (or which
but for such Relief
Exhibit 2.3
would have appeared in the accounts of the Acquired Subsidiary) or
where such Relief was treated as an asset which appears in the
accounts of the Acquired Subsidiary in which case the amount of the
Liability for Taxation shall be the amount of Taxation which would (on
the basis of tax rates current at the date of such Loss) have been
saved but for such Loss assuming for this purpose that the Acquired
Subsidiary had sufficient profits or was otherwise in a position to
use the Relief;
(b) the Loss of any right to repayment of Taxation (including any
repayment supplement) which was treated as an asset in the accounts of
the Acquired Subsidiary in which case the amount of the Liability for
Taxation shall be the amount of the right to repayment and any related
repayment supplement; and
(c) the set-off or use against income, profits or gain earned, accrued or
received or against any Tax chargeable in respect of an Event
occurring on or before Closing of any Relief or right to repayment of
Taxation (including any repayment supplement) arises after Closing in
circumstances where, but for such set-off or use, the Acquired
Subsidiary would have had a liability to make a payment of or in
respect of Taxation for which the Buyer would have been able to make a
claim against the Sellers under this Agreement in which case the
amount of the Liability for Taxation shall be the amount of Taxation
saved by the Acquired Subsidiary as a result of such set-off or use.
"Litigation Proceedings" means any and all claims (including pursuant to
arbitration) howsoever arising pending, actual or, to the Seller's
Knowledge, threatened or contingent to which the Acquired Subsidiary is (or
may be) a party.
"Loss" means all losses, damages, liabilities, claims, costs and expenses
(including fines, penalties, clean-up costs, legal and other professional
fees) and any reduction, modification, loss, counterclaim, nullification,
utilisation, disallowance or clawback for whatever reason.
"Materials" means all drawings, diagrams, illustrations, data,
specifications, lists, computer programs (including object code and source
code), formulae, instructions, manuals, descriptions, plans, models,
reports, calculations and all other documents, recorded information and
data whatsoever and howsoever stored.
"Person" shall mean any individual, corporation, partnership, limited
liability company, trust, association, joint venture or other entity of any
kind whatsoever.
"Products" means aluminium electrolytic capacitors.
"Properties" means the real properties occupied by the Acquired Subsidiary
and the expression "Property" shall mean, where the context so admits, any
one or more of such properties and any part or parts thereof.
Exhibit 2.3
"Purchase Price" means the aggregate of (A) the Deposit, (B) the First
Payment and (C) the Escrow Amount.
"Relevant Company" means any company other than the Acquired Subsidiary,
the Buyer and any company that may be treated for the purposes of the form
of Taxation that has given rise to the Liability for Taxation under Section
6.6 as being a member of the same group of companies as the Buyer or as
being associated with the Buyer.
"Relevant Services" means any services supplied by the Acquired Subsidiary
pursuant to the Business at any time during the period of one year ending
on the Closing Date.
"Relevant Customer" means any client, person, firm, company or organisation
to whom at any time within the period of one year ending on the Closing
Date the Acquired Subsidiary supplied Relevant Services.
"Relief" means any loss, relief, allowance, credit, exemption or set-off in
respect of Taxation or any deduction in computing income, profits or gains
for the purposes of Taxation.
"Representative" shall mean any attorney, accountant, agent, consultant or
other representative.
"Restricted Business" means the design, development, manufacture, sale and
distribution of DC electrolytic aluminium capacitors.
"Sale Approval Order" shall mean an order of the Bankruptcy Court, naming
Buyer as the winning bidder at the Auction and approving consummation of
the transactions contemplated hereby by Buyer and Seller, certified by the
clerk of the Bankruptcy Court as a true and correct copy of such order,
reasonably satisfactory in form and substance to the Buyer, the Seller and
their respective counsel, entered after a hearing conducted on adequate
notice given in the Bankruptcy Court.
"Seller's Knowledge" means the actual or constructive knowledge of Xxxxxx
Xxxxxxx and F. Xxxxxx Xxxx including, without limitation, facts which
should have been known to such individuals in their capacity as directors
of the Acquired Subsidiary and having regard to the duties such individuals
owed to the Acquired Subsidiary as a result of such directorships.
"Stock" shall mean two (2) ordinary shares in the capital of the Acquired
Subsidiary.
"Tax" or "Taxation" means:
(a) all forms of taxation including and without any limitation any charge,
tax, duty, levy, impost, withholding or liability wherever chargeable
imposed for support of national, state, federal, municipal or local
government and whether of the United Kingdom or any other
jurisdiction; and
Exhibit 2.3
(b) any penalty, fine, surcharge, interest, charges or costs payable
in connection with any Taxation within (a) above.
"Tax Claim" means any assessment, notice, demand, letter or other
document issued or action taken by or on behalf of any Taxation
Authority from which it appears that the Acquired Subsidiary or the
Buyer is or may be subject to a Liability for Taxation.
"Taxation Authority" means the Inland Revenue, Customs & Excise,
Department of Social Security and any other governmental or other
authority whatsoever competent to impose any Taxation whether in the
United Kingdom or elsewhere.
"Taxation Statute" means any directive, statute, enactment, law or
regulation wheresoever enacted or issued, coming into force or entered
into providing for or imposing any Taxation and shall include orders,
regulations, instruments, by-laws or other subordinate legislation made
under the relevant statute or statutory provision and any directive,
statute, enactment, law, order, regulation or provision which amends,
extends, consolidates or replaces the same or which has been amended,
extended, consolidated or replaced by the same.
"Workers" means the employees, directors, officers, workers and
self-employed contractors of the Acquired Subsidiary.
ARTICLE II
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PURCHASE AND SALE OF STOCK
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2.1 Sale and Transfer of Stock. Upon the terms and subject to the
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conditions and provisions contained herein, at the Closing, the Seller
shall sell to the Buyer, and the Buyer shall acquire from the Seller
the Stock with full title guarantee, free and clear of any and all
Encumbrances in consideration of the Purchase Price.
2.2 Deposit; First Payment.
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(a) Deposit. Buyer has deposited into escrow a good faith deposit equal to
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TWO HUNDRED FIFTY THOUSAND U.S. Dollars ($250,000) in immediately
available funds (the "Deposit") with Xxxxxx & Xxxx P.C., counsel to the
Seller, as escrow agent, with such amount to be held in escrow in an
interest bearing escrow account.
(b) First Payment. At Closing, Buyer shall pay to Seller in immediately
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available funds the sum of Three Million, Nine Hundred and Fifty
Thousand U.S. Dollars ($3,950,000) (the "First Payment") and comply
with its obligations under Section 3.3.
(c) Escrow Amount. At Closing, Buyer shall deposit the Escrow Amount in
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accordance with Section 3.3.
ARTICLE III
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Exhibit 2.3
CLOSING
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3.1 Closing. The consummation of the transactions contemplated hereby (the
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"Closing") shall occur at the offices of Xxxxxx & King, P.C., Xxx
Xxxxxxx Xxxxxx Xxxxxx, XX 00000, on a Business Day no later than eleven
(11) days after the date of entry of the Sale Approval Order, provided
no court of competent jurisdiction shall have entered an order staying
such Sale Approval Order pending appeal, and all other conditions to
Closing set forth in Article VII and Article VIII shall have been
satisfied or waived, unless such date is extended by agreement of the
parties hereto or as governed by Section 9.1 (c) hereof (the "Closing
Date").
3.2 Conveyances at Closing. At the Closing, and in connection with
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effecting and consummating the Closing, including, without limitation,
the sale and purchase of the Stock and the delivery of the First
Payment, the Seller shall, on the Closing Date, deliver the following:
(a) a certified copy of (i) a sole shareholder's decision of the
Acquired Subsidiary authorising the transfer of the Stock to
the Buyer in accordance with the articles of association of
the Acquired Subsidiary; and (ii) the minutes of a duly called
and quorate meeting of the board of directors of the Acquired
Subsidiary approving the transfer of the Stock to the Buyer
(subject only to due stamping of the stock transfer form),
accepting the resignations as directors of the Acquired
Subsidiary in a form satisfactory to the Buyer of Xxxxxx
Xxxxxx, Xxxxx Xxxxxx Xxxx, Xxxx Xxxxxxx and Xxxxxx Xxxxx and
appointing Xxxxx Xxxxxxxx, Pekka Lopperi and Xxxx-Xxxxx
Xxxxxxxxx as directors of the Acquired Subsidiary, all
effective immediately upon the Closing;
(b) a true original of the certificate of the Stock issued to
Seller, accompanied by a duly authorised and executedstock
transfer form relating to the Stock;
(c) all consents, orders and approvals of the Bankruptcy Court
(including, without limitation, a certified copy of the Sale
Approval Order or a third party sale approval order naming
Buyer as the second highest bidder (in either case in form and
substance reasonably satisfactory to the Buyer and its
counsel)) and all necessary creditors and other parties to the
Bankruptcy Case and all other third parties, if any, necessary
to effectuate the transfer of the Stock and to consummate the
transactions contemplated hereby;
(d) such other instruments as shall be reasonably requested by the
Buyer to vest in the Buyer title in and to the Stock in
accordance with the provisions hereof;
(e) evidence satisfactory to the Buyer that (i) Lloyds TSB Bank
Plc, Lloyds Bowmaker Limited and Barclays Mercantile Finance
Limited each consent to the transactions contemplated under
this Agreement and (ii) there are no interest-bearing loans,
hire purchase agreements, letters of credit, mortgages,
debentures and guarantees other than the Interest-Bearing
Indebtedness to which the Acquired Subsidiary is a party;
Exhibit 2.3
(f) irrevocable powers of attorney in the agreed terms executed by
each of the Seller in favour of the Buyer or its nominee(s) to
enable the beneficiary (pending registration of the transfers
of the Stock to the Buyer by the Acquired Subsidiary) to
exercise all voting and other rights attaching to the Stock
and to appoint proxies for this purpose;
(g) the statutory registers and minute books (properly written up
to the time immediately prior to Closing), the common seal,
the certificate of incorporation and (if applicable) any
certification of incorporation on change of name of the
Acquired Subsidiary and any other Books and Records (including
those of the Seller which relate directly or indirectly to the
Business);
(h) the documents of title to the Properties;
(i) copies of the annual accounts and the related directors'
reports of the Acquired Subsidiary for the years ended 31
December, 2000 and the Balance Sheet Date, together with the
unsigned or signed audit reports of KPMG that must be without
any qualifications or explanatory paragraphs (as defined in UK
generally accepted auditing standards) other than an
explanatory paragraph or disclaimer of opinion, in a form
acceptable to the Buyer in its reasonable discretion, in
respect of the going concern basis of the Acquired Subsidiary,
which arises solely and exclusively from the financial
condition of the Seller,
and the Buyer shall, on the Closing Date deliver the First Payment in
immediately available funds in accordance with Section 2.2 and
irrevocably authorise the immediate release of the Deposit to the
Seller.
To the extent that a form of any document to be delivered hereunder is
not attached as an Exhibit hereto, such documents shall be in form and
substance, and shall be executed and delivered in a manner, reasonably
satisfactory to the Buyer and the Seller.
3.3 Escrow Amount.
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(a) The Buyer undertakes that it will deposit the Escrow Amount in
a designated interest-bearing account agreed in writing
between the Seller and the Buyer upon Closing.
(b) The parties agree and undertake that:
(i) subject to Section 3.3(d), the Buyer may deduct from the
Escrow Amount (but not any interest accrued or accruing
thereon), to the extent there are sufficient funds to do so,
all amounts to satisfy any of the following:
(A) the amount of the Interest-Bearing Indebtedness determined
in accordance with Section 3.4 exceeding Two Million, Four
Hundred Thousand U.S. Dollars ($2,400,000);
Exhibit 2.3
(B) claims by the Buyer under Article IV;
(C) any amounts payable pursuant to Section 6.6
(Indemnities);
(D) any Loss or other liability (including any purported
right of set-off against the Acquired Subsidiary) of
the Acquired Subsidiary pursuant to a breach of
Section 6.5;
(E) any shortfall in the amount of the Intercompany
Receivables (other than any properly set off against
Intercompany Payables pursuant to Section 6.7)
received within two (2) months of the Closing Date;
(F) any subsisting or current loans, hire purchase
agreements, letters of credit, mortgages, debentures
and guarantees (A) which are not included in the
Interest-Bearing Indebtedness and/or (B) which have
not been the subject of consent as set out in Section
3.2(e);
(G) any Loss relating to the difference in Liability for
Taxation between (A) any amounts of Taxation payable
after the Balance Sheet Date (including any related
penalties and interest) in respect of all Taxation
years ended on or before the Balance Sheet Date and
(B) the provision for Liability for Taxation in the
management accounts as at the Balance Sheet Date,
and any deductions from the Escrow Amount pursuant to this
Section 3.3 shall reduce, pro tanto, the Purchase Price;
(ii) to the extent that the Interest-Bearing Indebtedness is less
than Two Million, four Hundred Thousand U.S. Dollars
($2,400,000), the Buyer will make an immediate deposit to the
Escrow Amount an amount equal to the difference between the
actual amount of the Interest-Bearing Indebtedness and Two
Million, Four Hundred Thousand U.S. Dollars ($2,400,000);
(iii) the Purchase Price has been converted from Sterling to U.S.
Dollars at the Agreed Rate and that should the Agreed Rate
have changed by a percentage of greater than or equal to +/-
2.78% calculated at Closing using the U.S. Dollar to Sterling
exchange rate published by the European Central Bank for the
last Business Day immediately prior to the Closing Date (the
"Closing Rate"), then the Escrow Amount shall be increased or
reduced (as appropriate) by 50% of the product of (A) the
difference between the Sterling equivalent of the Escrow
Amount at the Agreed Rate and at the Closing Rate and (B) the
Agreed Rate.
(c) The Buyer shall transfer in immediately available funds to the
Seller's designated account, the Escrow Amount (but not any
interest accrued thereon) minus such part of the Escrow Amount
used by the Seller in satisfaction of its rights pursuant to
Section 3.3(a) at such times and in such amounts as the Buyer
may decide in its sole discretion, provided that the latest
such transfer shall take place no later than the date: (A) the
Acquired Subsidiary is in receipt of agreement from the UK
Exhibit 2.3
Inland Revenue in respect of the Acquired Subsidiary's corporation tax
return for the year ended 31 December, 1999, and all Taxation assessed
payable as a result of such agreement has been so paid; (B) filing of
the annual accounts for the year ended on the Balance Sheet Date with
Companies House in England and Wales, without any change whatsoever
together with the signed audit reports of KPMG that must be without any
qualifications or explanatory paragraphs (as defined in UK generally
accepted auditing standards other than any going concern issues
relating to the solvency or otherwise of the Seller), provided that the
Buyer hereby undertakes to use its reasonable endeavours to procure
such filing as soon as practicable after Closing; and (C) the
Intercompany Receivables and Intercompany Payables have been finalised
to the Buyer's satisfaction in accordance with this Agreement, has been
completed, provided that such latest date shall be no later than 12
months following closing.
(d) Claims Process.
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(i) In the event that the Buyer wishes to deduct funds from the Escrow
Amount in accordance with clause 3.3(b), the Buyer shall deliver
written notice to the Seller, promptly following such event,
specifying the amount of the proposed deduction, describing the
claim of Loss with particularity and supplying appropriate
supporting information (the "Buyer's Notice").
(ii) The Seller shall have until 5:00 p.m. Eastern Time on the fifth
(5th) Business Day following delivery of Buyer's Notice to deliver
to the Buyer written objections, if any, to the claim described in
Buyer's Notice describing Seller's objections in reasonable detail
(the "Seller Objection"). If a Seller Objection is not delivered
to the Buyer within said time period, the Buyer shall be entitled
to deduct the funds set out in the Buyer's Notice. If a Seller
Objection is so delivered by the Seller, the Buyer and the Seller
shall, for a period of fifteen (15) Business Days following
delivery of the Seller Objection, attempt in good faith to resolve
their differences with respect to the Buyer's Notice. The Buyer
shall provide, and shall cause the Acquired Subsidiary to provide,
access to the offices and Books and Records of the Acquired
Subsidiary and to all information reasonably requested by Seller
in connection with the evaluation and resolution of the Buyer's
Notice. Any resolution by the parties shall be in writing and
shall be final and binding on the parties for all purposes. If the
parties are unable to resolve any objections within such time
period, the matter will be submitted to the Bankruptcy Court for
final and binding resolution.
(e) The Buyer agrees and acknowledges that, if the Escrow Amount is
insufficient for the purposes of Section 3.3, then the Buyer will have
a claim against the Seller's bankruptcy estate for the amount of such
insufficiency up to and including an amount equal to the product of (i)
the difference between the Escrow Amount and the Purchase Price, and
(ii) 0.5, which claim shall constitute an allowed, general,
Exhibit 2.3
unsecured claim.
(f) Interest-Bearing Indebtedness. Within ten (10) Business Days after the
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Closing Date, the Seller shall obtain a certificate (in a form
acceptable to the Buyer in its absolute discretion) of the amounts of
the Interest-Bearing Indebtedness at the Closing Date from each of the
counterparties to the Interest-Bearing Indebtedness.
3.4 Transaction Expenses. Except as expressly provided herein, each party shall
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bear its own costs and expenses, including attorney, accountant and other
consultant fees, in connection with the execution and negotiation of this
Agreement and the consummation of the transactions contemplated hereby.
3.5 Licence; Assignment. From the Closing, (a) the Seller hereby grants on
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behalf of itself and its affiliates to the Acquired Subsidiary, a
non-exclusive, royalty-free, perpetual, irrevocable, world-wide,
transferable licence to use, have used and to grant sub-licences to use any
Intellectual Property owned by the Seller or any of its affiliates, in
relation to the Business and (b) the Acquired Subsidiary hereby grants on
behalf of itself and its affiliates to the Seller and its affiliates,
successors and assigns, a non-exclusive, royalty- free, perpetual,
irrevocable, transferable world-wide, licence to use any Intellectual
Property owned by the Acquired Subsidiary, that is required for continuance
of the business of the parties, save that such licence shall not include
the right to use any such Intellectual Property in connection with the
Restricted Business.
3.6 Other Closing Matters. Each of the parties shall use their reasonable
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efforts to take such other actions required hereby to be performed by it
prior to or on the Closing Date.
ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF SELLER
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As an inducement to the Buyer to enter into this Agreement, the Seller hereby
makes, as of the date hereof and separately at the Closing Date, the following
representations and warranties to the Buyer and acknowledges that the Buyer is
entering into this Agreement in reliance thereon other than matters actually
known to the Buyer at the date of this Agreement and at Closing:
4.1 Authorisation of Seller. Subject to entry of the Sale Approval Order,
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Seller has all necessary right, power, capacity and authority to execute
and deliver this Agreement, to consummate the transactions contemplated
hereby and to perform its obligations hereunder, and no other proceedings
on the part of the Seller are necessary to authorise the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Seller and, subject to entry of the Sale Approval Order,
is a valid and binding obligation of the Seller enforceable against the
Seller in accordance with its terms.
4.2 Organisation. Each of the Seller and the Acquired Subsidiary is a
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corporation duly organised, validly existing and, where applicable, in good
standing under the laws of the
Exhibit 2.3
jurisdiction of its incorporation and has the corporate power and authority
to operate its properties and to carry on the Business as it is now being
conducted or presently proposed to be conducted.
4.3 Intellectual Property.
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(a) Ownership and right.
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(i) The Acquired Subsidiary is the legal and beneficial owner of all
Business IP.
(ii) There are no Encumbrances over any of the Business IP.
(iii) The Acquired Subsidiary does not require any Intellectual
Property other than the Business IP in relation to the
development, manufacture, marketing or sale of its products or
services or in relation to any of the processes employed in the
Business.
(iv) The Seller has fully and accurately disclosed prior to the date
of this Agreement all patents, registered designs, registered
trade marks and service marks and any other similar registered
intellectual property rights or applications for the same used
in or relating to the Products or the Business together with all
arrangements (whether written or oral) into which it has entered
in relation to Intellectual Property (including the Business IP)
in particular, but without limitation, with the Seller and any
affiliate of the Seller.
(b) Infringement.
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(i) The Acquired Subsidiary has not infringed and does not infringe
any Intellectual Property of a third party as a result of the
Acquired Subsidiary's use or exploitation of any Intellectual
Property (including the Business IP) nor will such use or
exploitation give rise to any infringement dispute, claims or
proceedings against the Acquired Subsidiary.
(ii) There are not and have not been any disputes, claims or
proceedings threatened or in existence in any court of tribunal
in respect of any Intellectual Property, as such or in respect
of any use or exploitation thereof by the Acquired Subsidiary.
(iii) There has not been and is no current or anticipated infringement
by any third party of any Business IP.
4.4 Warranties. Separately and in addition to the warranties contained in this
----------
Article IV, the Seller warrants and represents to the Buyer that each of
the warranties contained in schedule 1 is true, accurate and not misleading
at the Closing Date.
Exhibit 2.3
4.5 Separate Warranties. Each of the warranties contained in this Article IV
-------------------
and schedule 1 shall be construed as separate and independent warranties
and shall not be limited or restricted by reference to or inference from
any other warranty.
4.6 Brokers. Except Loeb Partners Corporation, no Person is entitled to any
-------
brokerage, financial advisory, finder's or similar fee or commission
payable by the Seller in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Seller.
ARTICLE V
---------
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
As an inducement to the Seller to enter into this Agreement, the Buyer hereby
makes the following representations and warranties as of the date hereof to the
Seller:
5.1 Authorisation. The Buyer has all necessary corporate power and authority to
-------------
enter into this Agreement and has taken all corporate action necessary to
execute and deliver this Agreement, to consummate the transactions
contemplated hereby and to perform its obligations hereunder, and no other
corporate proceedings on the part of the Buyer are necessary to authorise
the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Buyer and is a valid and binding
obligation of the Buyer, enforceable against it in accordance with its
terms.
5.2 Organisation of Buyer. The Buyer is duly organised and validly existing
---------------------
under the laws of the jurisdiction of its incorporation and has the
corporate power and authority to operate its properties and to carry on its
business as it is now being conducted or presently proposed to be
conducted.
5.3 Financing. On the Closing Date, the Buyer will have cash on hand or shall
---------
have consummated a financing transaction which shall provide sufficient
funds to deliver the Purchase Price to the Seller, but the closing of such
financing and receipt of proceeds therefrom shall not be a condition to
Closing.
ARTICLE VI
----------
COVENANTS OF SELLER AND BUYER
-----------------------------
The Seller and the Buyer covenant and agree as follows:
Exhibit 2.3
6.1 Acquired Subsidiary Business Prior to Closing. Between the date hereof and
---------------------------------------------
the Closing Date, the Seller shall procure that the Acquired Subsidiary
shall operate the Business in the ordinary course, consistent with best
past practice, and shall not take any action inconsistent therewith or with
the consummation of the transactions contemplated hereby, including but not
limited to:
(a) amending, adding to or otherwise varying the unaudited management
accounts for the year ended on the Balance Sheet Date;
(b) issuing, granting, allotting or entering into any agreement (oral or
written) to issue, grant or allot any Stock or other securities in the
capital of the Acquired Subsidiary;
(c) the payment or declaration of any dividends whatsoever;
(d) entering into any capital expenditure obligation of greater
than(pound)10,000 for whatever reason;
(e) selling, disposing or entering into an agreement for the sale or
disposal of any part of the Business (save in the ordinary course of
trading);
(f) creating, issuing or entering into an agreement to create or issue any
Encumbrance upon any of the assets of the Business.
(g) otherwise than in the ordinary course of business, dismissing, making
redundant, entering into or continuing (so far as applicable laws
permit) negotiations (written or oral) in relation to redundancy or
changing the remuneration or terms of remuneration or employment of
any of the Workers (including without limitation pension
contributions, bonuses, commission and benefits in kind);
(h) assuming or incurring or entering into an agreement to assume or
incur, any liability, expenditure or obligation otherwise than in the
ordinary and usual course of the Business;
(i) entering into any long term, onerous or unusual agreement, arrangement
or obligation;
(j) amending or terminating any material (in relation to the conduct of
the Business) agreement or arrangement to which it is a party;
(k) giving or entering into an agreement to give, any guarantee, indemnity
or other agreement to secure an obligation of a third party;
(l) instituting any civil, criminal, arbitration or other Legal
Proceedings;
(m) entering into any agreement or arrangement (whether legally
enforceable or not)
Exhibit 2.3
which any director or former director of the Seller or any associate
of any of them or any Connected Person is interested in any way
whatsoever; and
(n) making any payment out of any bank or deposit account except where the
payment is in the ordinary and usual course of the Business and the
aggregate amount of the payments does not exceed (pound)10,000.
6.2 Access. Between the date hereof and the Closing Date, the Buyer and its
------
Representatives shall, during regular business hours and upon reasonable
notice, have reasonable access to business and operations of the Acquired
Subsidiary and the Books and Records of the Acquired Subsidiary.
6.3 Further Assurances. In addition to the provisions of this Agreement, from
------------------
time to time after the Closing Date, the Seller and the Buyer will use all
commercially reasonable efforts to execute and deliver or procure the
execution and delivery of such other instruments of conveyance, transfer or
assumption, as the case may be, and take such other actions as may be
reasonably requested to implement more effectively, the conveyance and
transfer of the Stock.
6.4 Name. As soon as reasonably practicable after the Closing Date and in any
----
event no later than the date falling three (3) months from the Closing
Date, the Buyer shall register a change of name of the Acquired Subsidiary
for the purposes of removing from its name any reference to "Aerovox".
6.5 Non-compete.
-----------
(a) Subject to Sections 6.5(b) and 6.5(c), for a period of two (2) years
from the date of this Agreement, neither the Seller nor any of its
affiliates shall directly or indirectly:
(i) engage in the Restricted Business anywhere in the world,
including at its operations in Mexico and Huntsville , Alabama,
provided however, this provision shall not prevent such parties
from (A) owning up to 3% of any class of securities of a company
involved in the Restricted Business, which securities are traded
on a public stock exchange, or (B) engaging in a sale of stock or
assets transaction or transactions with third parties that are
engaged in the Restricted Business prior to the completion of
such transaction, or (C) continuing to wind-down the portion of
the Restricted Business operated by the Seller at Juarez, Mexico
(up to but not later than 31 December, 2002), or (iv) engaging in
the purchase and/or sale of (but not development or manufacture)
of capacitors specifically related to applications for external
defibcillators;
(ii) induce or attempt to induce any supplier of the Acquired
Subsidiary to cease to supply, or to restrict or vary in any
material respect the terms of
Exhibit 2.3
supply, to the Acquired Subsidiary; provided that this Section
6.5(a)(ii) shall not in any way require, or be deemed to
require, the Seller or any of its affiliates to supply
products or services to the Acquired Subsidiary;
(iii) use, or allow to be used by any of its affiliates, any
Business IP other than the name "Aerovox";
(iv) canvass or solicit orders from any Relevant Customer for any
Relevant Services; or
(v) solicit or entice or endeavour to solicit or entice away from
the service of the Acquired Subsidiary any senior employee of
the Acquired Subsidiary who is in the service of the Acquired
Subsidiary at the date hereof whether or not such senior
employee would commit a breach of his contract of employment
by reason of leaving the service of the Acquired Subsidiary.
6.6 Indemnities.
------------
(a) The Seller hereby undertakes to indemnify and keep indemnified the
Buyer (contracting for itself and its officers, directors, agents and
employees and any successor in title to the Stock) and the Acquired
Subsidiary for amounts equal to:
(i) any Loss arising out of or related to Litigation Proceedings
instituted, filed or commenced prior to Closing, or relating
to any event, circumstance or occurrence (or series of events,
circumstances or occurrences) prior to Closing;
(ii) any Intercompany Payables;
(iii) any Liability for Taxation resulting from or by reference to
any Event occurring on or before the Closing or in respect of
any gross receipts, income, profits or gains earned, accrued
or received (including Intercompany Receivables) or payable or
purportedly payable (including Intercompany Payables) by the
Acquired Subsidiary on or before Closing;
(iv) any Liability for Taxation for which the Acquired Subsidiary
would not have been liable but for being treated as being or
having been a member of the same group as or associated with
any Relevant Company for the purposes of any Tax;
(v) all costs and expenses properly incurred and payable by the
Acquired Subsidiary or the Buyer in connection with any
actions taken to avoid, resist or settle any Tax Claim,
Liability for Taxation or any liability or Loss under Sections
6.6(a)(iii), 6.6(a)(iv), 6.6(a)(vi) and 6.6(a)(vii);
Exhibit 2.3
(vi) any liability of the Acquired Subsidiary to repay or the
loss of the right to receive in whole or in part any payment
for the surrender of group relief;
(vii) all liability for Taxation of the Acquired Subsidiary in
excess of which provision has been properly and clearly made
and noted in the financial statements and/or the unaudited
management accounts of the Acquired Subsidiary for all
financial years ended on or before the Balance Sheet Date;
(viii) all Loss relating to liabilities of the Acquired Subsidiary
arising out of or related to any period, or agreements or
undertakings (written or oral) entered into, prior to
Closing which have not been fully and accurately disclosed
prior to the date of this Agreement;
(ix) Section deleted at Sale Hearing
(x) all Loss relating to any criminal, illegal or unlawful act
connected with the Acquired Subsidiary prior to Closing; and
(xi) all liability arising from or related to amounts due to or a
shortfall in funds of any pension scheme maintained for or
on behalf of the Workers (from time to time).
(b) Any sum payable (or deemed payable) pursuant to this Section 6.6
shall be paid (or deemed paid) free and clear of any deduction or
withholding whatsoever.
6.7 Intercompany Receivables and Intercompany Payables.
---------------------------------------------------
(a) As soon as practicable (and in no event later than sixty (60) days
after the Closing Date), the Buyer shall prepare and deliver to the
Seller a proposed determination of the Intercompany Receivables as
of the Closing Date (the "Receivables Statement"). The Receivables
Statement shall be prepared using the foreign exchange rates
published by the European Central Bank for the last Business Day
immediately preceding the Closing Date. If the Seller does not
object to the Receivables Statement (in part or in whole) by
written notice of objection ("Notice of Objection") delivered to
the Buyer within seven (7) days after the Seller's receipt of the
Receivables Statement, such Receivables Statement and the
determination of the Intercompany Receivables therein shall be
deemed final and binding upon the parties hereto. If the Seller
delivers to the Buyer a Notice of Objection and the parties cannot
agree upon the determination thereof within fourteen (14) days of
delivery of such Notice of Objection, then each party shall within
seven (7) days submit its final proposal for the determination of
the disputed items of the Receivables Statement to the other party
and to PricewaterhouseCoopers acting as expert and not as
arbitrator for the parties (the "Closing Expert"). Within thirty
(30) days of the submission of any dispute concerning the
determination of any item in the Receivables Statement, the
Exhibit 2.3
Closing Expert shall render its decision determining such item in
the Receivables Statement and shall deliver a statement of reasons
deviating from the amounts reflected in the Purchase Price. The
decision of the Closing Expert shall be final and binding upon the
parties hereto. The fees and expenses of the Closing Expert for any
determination under this Section 6.7(a) shall be borne by the party
whose final proposal of the disputed item in the Receivables
Statement differs by the greater amount from the final
determination of such amount by the Closing Expert.
(b) The Buyer hereby irrevocably waives its right to receive the cash
amount (but does not otherwise waive) of all Intercompany
Receivables determined in accordance with Section 6.7(a) up to an
amount equal to the Intercompany Payables at Closing plus One
Million U.S. Dollars ($1,000,000) provided and contingent that the
Seller hereby irrevocably agrees and undertakes that (or that it
shall procure that) all Intercompany Payables shall be waived by
Seller, or if applicable, the company in the Seller's group of
companies entitled (or purportedly entitled) to receive them and
provides duly executed deeds of waiver or other, appropriate,
evidence of such waiver in a form acceptable to the Buyer in its
sole discretion, at or prior to Closing.
(c) The parties agree for themselves and their affiliates that any
waiver by the Buyer pursuant to Section 6.7(b) relates only to its
rights to receive the cash amount of such Intercompany Receiveables
and shall not prejudice any and all other rights it has in relation
thereto (including any rights of set-off).
(d) The Seller has complied with its obligations under Section 6.7(1)
below.
6.8 Exchange Rate. The parties agree and acknowledge that all sums or
-------------
calculations expressed in U.S. Dollars shall be at the Agreed Rate,
where the original sums or calculations are in Sterling.
ARTICLE VII
-----------
CONDITIONS TO SELLER'S OBLIGATIONS
----------------------------------
The obligation of the Seller to consummate the transactions contemplated hereby
is subject, in the discretion of the Seller, to the satisfaction, on or prior to
the Closing Date, of each of the following conditions any of which may be waived
(in whole or in part) by the Seller in accordance with Section 9.8 hereof:
7.1 Entry of Sale Approval Order. The Sale Approval Order shall have been
----------------------------
entered by the Bankruptcy Court (or shall be deemed to have been
entered pursuant to Section 9.1(c)) and no court of competent
jurisdiction shall have entered an order staying such Sale Approval
Order pending appeal; and
7.2 Payment of Purchase Price. The Buyer shall have complied with its
-------------------------
obligations pursuant to Section 2.2.
ARTICLE VIII
------------
CONDITIONS TO BUYER'S OBLIGATIONS
---------------------------------
The obligations of the Buyer to purchase the Stock and to consummate the
transactions contemplated hereby are subject, in the discretion of the Buyer, to
the satisfaction, on or prior to the Closing Date, of each of the following
conditions, any of which may be waived (in whole or in part) by the Buyer in
accordance with Section 9.8 hereof:
8.1 Instruments of Conveyance. The Seller shall have executed and
---------------------------
delivered to the Buyer at the Closing all of the documents provided
for in Section 3.2 hereof.
8.2 Bankruptcy Matters; Entry of Sale Approval Order. All necessary
------------------
authorisations, consents, orders and approvals of the Bankruptcy Court
necessary for the consummation of the transactions contemplated by this
Agreement shall have been obtained. The Sale Approval Order shall have
been entered by the Bankruptcy Court (or shall be deemed to have been
entered pursuant to Section 9.1(c)) and no court of competent
jurisdiction shall have entered an order staying such Sale Approval
Order pending appeal, modifying such Sale Approval Order, reversing
such Sale Approval Order or amending such Sale Approval Order in any
manner materially adverse to the Buyer and the Seller shall have
received from the Bankruptcy Court all other orders, approvals, and
consents required to transfer the Stock and to consummate the
transactions contemplated by this Agreement. Such Sale Approval Order
shall contain, among other provisions reasonably requested by Buyer,
the following provisions (it being understood that certain of such
provisions must constitute either findings of fact or conclusions of
law to be made by the U.S. Bankruptcy Court as part of the Sale
Approval Order):
(a) the transfer of the Stock by Seller to Buyer, (i) is or will
be a legal, valid and effective transfer of the Stock, (ii)
vests or will vest Buyer with all right, title and interest of
Seller in and to the Stock pursuant to Section 363(f) of the
Bankruptcy Code, free and clear of any and all Encumbrances
and claims (as defined in Section 101(5) of the Bankruptcy
Code) whatsoever, and (iii) constitutes a transfer for
reasonably equivalent value and fair consideration under the
Bankruptcy Code, the laws of the State of Massachusetts and
all other applicable state laws, including those relating to
fraudulent conveyances and fraudulent transfers;
Exhibit 2.3
(b) the transactions contemplated by this Agreement are undertaken
by Seller and Buyer at arm's length, without collusion and in
good faith within the meaning of Section 363(m) of the
Bankruptcy Code, and such parties are entitled to the
protection of Section 363(m) of the Bankruptcy Code;
(c) a determination that a sale of the Stock other than one free
and clear of any and all Encumbrances would be of
substantially less benefit to the state of Seller; and
(d) provides that any stay of orders authorising the use, sale or
lease of property, as provided for in Fed. R. Bankr. Proc.
6004(g) shall not apply to such Sale Approval Order and that
such Sale Approval Order is immediately effective and
enforceable.
8.3 No Government Action. No action (including any proceeding over which
--------------------
the U.S. Bankruptcy Court has jurisdiction under 28 U.S.C. (S) 157(b)
and (c)) shall be pending by or before any Governmental Authority or
pending by any other Person seeking to enjoin, restrain, prohibit or
obtain substantial damages in respect of or related to any of the
transactions contemplated by this Agreement, or that would be
reasonably likely to prevent or make illegal the consummation of any
transactions contemplated by this Agreement.
8.4 Warranties. The Buyer is satisfied, upon receipt of appropriate
----------
confirmation from the Seller, that the representations and warranties
of the Seller given pursuant to Article IV are subsisting and true,
accurate and not misleading in all respects.
8.5 Covenants. The Buyer is satisfied in its sole discretion that there
---------
have been no breaches of the covenants of the Seller contained in
Article VI.
8.6 Intercompany Payables. The Seller satisfies its obligations under
---------------------
Section 6.7(c).
In the event that any of the foregoing conditions are not satisfied on or prior
to the Closing Date as a result of a breach or other default by Seller under the
terms of this Agreement, Seller shall be permitted to cure such breach within
ten (10) days following delivery by Buyer of written notice to Seller notifying
Seller of the nature of the breach or default.
ARTICLE IX
----------
MISCELLANEOUS
-------------
9.1 Termination.
-----------
(a) Termination. This Agreement may be terminated prior to the
Closing, without prejudice to any rights accruing priorto such
termination:
Exhibit 2.3
(i) by the mutual written consent of the Buyer and the Seller
(subject to the approval of the Bankruptcy Court) at any time,
in which case the Deposit (together with any interest thereon)
shall be returned immediately to the Buyer;
(ii) by the Buyer if (A) Buyer is not the winning bidder at the
Auction, or (B) one or more of the conditions set forth in
Article VIII are not satisfied on or before the Closing Date
(subject to Seller's right to cure as provided in Article VIII)
for any reason other than a breach of this Agreement by the
Buyer or (C) the Sale Approval Order is not entered by the
Bankruptcy Court on or before May 31, 2002 and in each such case
the Deposit (plus interest thereon) shall be immediately
returned to the Buyer; provided however, if Buyer is the second
highest bidder at the Auction, Buyer may not terminate this
Agreement pursuant to this Section 9.1(a)(ii), until the earlier
of (y) closing of a sale of the Stock with a party other than
Buyer; or (z) thirty-one (31) days following the date of entry
of a sale approval order naming a party other than Buyer as the
winning bidder at the Auction, except that if Seller fails to
notify Buyer, on or before the fifteenth day following entry of
a Sale Approval Order naming a party other than Buyer as the
winning bidder at the Auction, of Seller's intention to close
with Buyer, then Buyer may terminate this Agreement immediately
upon the conclusion of such fifteen (15) day period and in such
case the Deposit (plus any interest thereon) shall be returned
to Buyer immediately thereafter;
(iii) by the Seller (A) if Buyer is not the winning bidder at the
Auction, or (B) if the Sale Approval Order is not entered by the
Bankruptcy Court on or before May 31, 2002, and in each case the
Deposit (plus interest thereon) shall be immediately returned to
the Buyer;
(iv) by Seller if the condition set forth in Section 7.2 is not
satisfied on or before the Closing Date (for any reason other
than a breach of this Agreement by the Seller) a breach of this
Agreement by Buyer occurs, and in each case the Deposit shall be
immediately paid to Seller;
(v) by either Buyer or Seller (provided that such party is not then
in material breach of any provisions of this Agreement) (A) if a
Governmental Authority shall have issued an order, decree or
ruling or taken any other action (which order, decree or ruling
the parties hereto shall use their reasonable best efforts to
lift), in each case permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this
Agreement and such order, decree, ruling or other action shall
have become final and non-appealable; (B) if Seller enters into
and consummates a sale, transfer or other disposition either
directly or indirectly (whether in one or a series of
transactions) of all or substantially all of the Stock or all or
a majority of the assets of the Acquired
Exhibit 2.3
Subsidiary relating to the Business to a Person (or group
of Persons) other than Buyer or its affiliate; (C) if the
U.S. Bankruptcy Court confirms a plan of reorganisation
that does not include the transfer and assignment of the
Stock or all or a majority of the assets of the Acquired
Subsidiary to Buyer; or (D) if the Closing shall not have
occurred on or before 30 June, 2002.
(b) Event of Termination; Remedies. In the event of termination of this
------------------------------
Agreement pursuant to Section 9.1(a):
(i) each party shall return all documents, work papers and
other material of any other party, or those prepared by a
party from the review of such documents, work papers and
other material of the other party, relating to the
transactions contemplated hereby, whether obtained before
or after the execution hereof, to the party furnishing the
same;
(ii) no confidential information received by any party
with respect to the business of any other party or
its affiliates shall be used or disclosed to any
third party, unless required by law; and
(iii) the rights and obligations of the parties hereto
under this Agreement shall terminate (other than the
provisions of this Section 9.1 and the treatment of
the Deposit under Section 9.1(a)) and there shall be
no liability of any party hereto to any other party
hereunder and each party hereto shall bear its own
expenses incurred in connection with the negotiation,
preparation, execution and performance of this
Agreement; provided that the foregoing shall not
relieve any party of liability for damages actually
incurred by any other party as a result of any breach
of this Agreement resulting from act or omission of
the party permitting, causing or committing such
breach.
(c) Standby Obligation. Notwithstanding the approval of a sale
------------------
approval order naming a party other than Buyer as the winning
bidder at the Auction, Buyer shall, to the extent that Buyer is the
second highest bidder at the Auction, remain committed to
consummate the transactions contemplated hereby for a period of
thirty (30) days following entry of such order by the Bankruptcy
Court. If Seller, at its sole election, delivers notice to Buyer,
within fifteen (15) days after the date of entry of the third party
sale approval order, that the third party transaction will not be
consummated and that Seller intends to consummate the transactions
contemplated hereby, Buyer shall take all actions required in this
Agreement to complete the purchase of the Stock on a Business Day
within ten (10) days following such notification, as if Buyer had
been the winning bidder at the Auction and the Sale Approval Order
had been originally entered.
Exhibit 2.3
9.2 Bankruptcy Matters.
-------------------
(a) Appeals; Reconsiderations. In the event an appeal is taken, or a stay
-------------------------
pending appeal is requested or reconsideration is sought, from the Sale
Approval Order, the Seller will immediately notify the Buyer of such
appear or stay request and will provide to the Buyer, within two (2)
Business Days, a copy of the related notice of appeal or order of stay
or application for reconsideration. The Seller will also provide the
Buyer with a written notice and copies of any other or further notice
of appeal, motion or application filed in connection with any appeal
from, or application for reconsideration of, any of such orders and any
related briefs.
(b) Notices. Seller will notify, as is required by the Bankruptcy Code and
--------
reasonably requested by the Buyer, all parties entitled to notice of
all motions, notices and orders required to consummate the transactions
contemplated hereby, including, without limitation, the Sale Approval
Order, as modified by orders in respect of notice which may be issued
at any time and from time to time by the Bankruptcy Court.
9.3 Assignment; Successors. Neither this Agreement nor any of the rights or
-----------------------
obligations hereunder may be assigned by any party without the prior
written consent of all other parties to this Agreement. Subject to the
foregoing, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective representatives,
heirs, legatees, successors and permitted assigns, including without
limitation any Chapter 11 or Chapter 7 trustee appointed in the
Bankruptcy Case, and no other Person shall have any right, benefit or
obligation hereunder.
9.4 Notices. All notices, requests, demands and other communications which
--------
are required or may be given under this Agreement shall be in writing
and shall be deemed to have been duly given when received if personally
delivered; when transmitted if transmitted by telecopy, upon receipt of
telephonic confirmation; the day after it is sent, if sent for next day
delivery to a domestic address by recognised overnight delivery service
(including Federal Express); and upon receipt, if sent by certified or
registered mail, return receipt requested. In each case notice shall be
sent to:
If to Seller, addressed to: Xxxxxx Xxxxxxx, President
Aerovox Incorporated
000 Xxxx Xxxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000-0000
Phone: (000) 000-0000
Fax. (000) 000-0000
with a copy to: Xxxxxx X. Xxxxxx, Esq.
Xxxxxx & King, P.C.
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Exhibit 2.3
Phone: (000) 000-0000
Fax: (000) 000-0000
If to Buyer, addressed to: Xxxxx Xxxxxxxx, President
Evox Rifa Group Oyj
Stella Business Park
Lars Xxxxxxx xxxxx 00
XXX - 00000 Xxxxx
Xxxxxxx
Phone: (000) 0 0000 0000
Fax: (000) 0 0000 0000
with a copy to: Xxxxx Xxxxxx, Esq.
White & Case
0-00 Xxxxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Phone: x00 (0)00 0000 0000
Fax: x00 (0)00 0000 0000
or to such other place and with such other copies as either party may
designate as to itself by written notice to the others.
9.5 Choice of Law; Jurisdiction. This Agreement shall be construed and
----------------------------
interpreted, and the rights of the parties determined in accordance
with, the laws of the Commonwealth of Massachusetts (without regard to
its conflicts of laws principles). Each party irrevocably consents to
the service of any and all process in any action or proceeding arising
out of or relating to this Agreement by the transmitting of copies of
such process to each party at its address specified in Section 9.4 in a
manner provided for in Section 9.4. The parties hereto irrevocably
submit to the exclusive jurisdiction of the Bankruptcy Court (or any
court exercising appellate jurisdiction over the Bankruptcy Court) over
any dispute arising out of or relating to this Agreement and any other
agreement or instrument contemplated hereby or entered into in
connection herewith, or any of the transactions contemplated hereby or
thereby and any such dispute shall be deemed to have arisen in the
Commonwealth of Massachusetts. Each party hereby irrevocably agrees
that all claims in respect of such dispute or proceeding may be heard
and determined in such courts. The parties hereby irrevocably waive, to
the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of venue of any such
dispute brought in such court or any defense of inconvenient forum in
connection therewith.
9.6 Entire Agreement; Amendments and Waivers. This Agreement, together with
-----------------------------------------
all exhibits hereto, constitutes the entire agreement among the parties
pertaining to the
Exhibit 2.3
subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written,
of the parties. No amendment, supplement, modification or waiver of
this Agreement shall be binding unless executed in writing by on or
behalf of the party to be bound thereby. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
9.7 Construction. The headings and captions of the various Articles and
-------------
Sections of this Agreement have been inserted solely for purposes of
convenience, are not part of this Agreement, and shall not be deemed in
any manner to modify, explain, expand or restrict any of the provisions
of this Agreement. All Exhibits and Schedules attached are made a part
hereof. All terms defined herein shall have the same meaning in the
exhibits, except as otherwise provided therein. The terms "hereby",
"hereof", "hereto", "hereunder" and any similar terms as used in this
Agreement, refer to this Agreement in its entirety and not only to the
particular portion of this Agreement where the term is used. Whenever
in this Agreement provision is made for the payment of attorneys' fees,
such provision shall be deemed to mean reasonable attorneys' fees and
paralegals' fees. The term "including" when used herein shall mean
"including, without limitation." Wherever in this Agreement the
singular number is used, the same shall include the plural, and the
masculine gender shall include the feminine and neuter genders, and
vice versa, as the context shall require.
9.8 Third Party Beneficiaries. No Person other than the parties hereto,
-------------------------
shall have any rights or claims under this Agreement.
9.9 No Waiver. The failure of either party hereto to seek redress for any
---------
breach, or to insist upon the strict performance, of any covenant or
condition of the Agreement by the other shall not be, or be deemed to
be, a waiver of the breach or failure to perform nor prevent a
subsequent act or omission in violation of, or not strictly complying
with, the terms hereof from constituting a default hereunder.
9.10 Multiple Counterparts. This Agreement may be executed in one or more
---------------------
counterparts, each of which shall be deemed anoriginal, but all of
which together shall constitute one and the same instrument.
9.11 Invalidity. In the event that any one or more of the provisions, or any
----------
portion thereof, contained in this Agreement or in any other instrument
referred to herein, shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, then such provision shall
remain valid and enforceable to the maximum extent permitted by law.
Such invalidity, illegality or unenforceability shall not affect any
other provision, or any portion thereof, of this Agreement or any other
such instrument.
9.12 Publicity. No party shall issue any press release or make any public
---------
statement regarding the transactions contemplated hereby, without the
prior approval of the other party; provided that nothing herein shall
be deemed to prohibit any party from making any
Exhibit 2.3
disclosure which its counsel deems necessary in order to fulfill such
Seller's disclosure or notice obligations imposed by law or rules of
any stock exchange on which such party's securities are listed and/or
traded.
9.13 Cumulative Remedies. All rights and remedies of either party hereto are
-------------------
cumulative of each other and of every other right or remedy such party
may otherwise have at law or in equity, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or
subsequent exercise of other rights or remedies.
9.14 Representation by Counsel; Mutual Negotiation. Each party has been
-------------------------
represented by counsel of its choice in negotiating this Agreement.
This Agreement shall therefore be deemed to have been negotiated and
prepared at the joint request, direction and construction of the
parties, at arm's-length with the advice and participation of counsel,
and will be interpreted in accordance with its terms without favor to
any party.
Exhibit 2.3
Schedule 1
Warranties
1. The Acquired Subsidiary
1.1 The particulars of the Acquired Subsidiary set out in the recitals to
this Agreement are true and complete.
1.2 Share capital
The Stock constitutes the whole of the issued share capital of the
Acquired Subsidiary. At the Closing Date, there will be no Encumbrance
or any form of agreement (including conversion rights and rights of
pre-emption) on, over or affecting the Stock or any unissued Stock,
debentures or other securities of the Acquired Subsidiary and there is
no agreement or commitment to give or create any of the foregoing. No
claim has been made by any person to be entitled to any of the
foregoing and no person has the right (exercisable now or in the future
and whether contingent or not) to call for the issue of any share or
loan capital of the Acquired Subsidiary under any of the foregoing.
2. Accounts
2.1 The unaudited financial statements for the year ended 31 December, 2000
and the management accounts for the year ended on the Balance Sheet
Date of the Acquired Subsidiary:
(a) were prepared in accordance with accountancy practices
generally accepted in the United Kingdom at the time they were
audited and commonly adopted by companies carrying on
businesses similar to those carried on by the Acquired
Subsidiary;
(b) are not affected by any unusual or non-recurring item;
(c) showed a true and fair view of the state of affairs of the
Acquired Subsidiary as at each accounting reference date.
2.2 At the Balance Sheet Date, the Acquired Subsidiary had no liability
(whether actual, contingent, unquantified or disputed) or outstanding
capital commitment which is not adequately disclosed or provided for in
the accounts of the Acquired Subsidiary.
2.3 The accounting records of the Acquired Subsidiary have been kept on a
proper and consistent basis (no change in the methods or bases of
valuation or accountancy treatment having been made since 31 December,
1999), are up-to-date and contain complete and accurate details of the
business activities of the Acquired Subsidiary concerned and of all
matters required by the Act to be entered in them.
Exhibit 2.3
3. Post-Balance Sheet Date events
3.1 Since the Balance Sheet Date the Acquired Subsidiary:
(a) has carried on the Business in the ordinary and usual course
and without entering into any transaction, assuming any
liability or making any payment not provided for in the
audited financial statements or management accounts of the
Acquired Subsidiary which is not in the ordinary course of
business and without any interruption or alteration in the
nature, scope or manner of its business and nothing has been
done which would be likely to prejudice the interests of the
Buyer as a prospective purchaser of the Stock;
(b) has not experienced any deterioration in its financial
position or prospects or turnover or suffered any diminution
of its assets by the wrongful act of any person or by any
abnormal factor not affecting similar businesses to a like
extent and there are no facts which are likely to give rise to
any such effects;
(c) has not acquired or disposed of or agreed to acquire or
dispose of any assets or assumed or incurred or agreed to
assume or incur any liabilities (actual or contingent)
otherwise than in the ordinary course of business;
(d) has not declared, made or paid any dividend, bonus or other
distribution of capital or income (whether a qualifying
distribution or otherwise) and (excluding fluctuations in
overdrawn current accounts with bankers) no loan or loan
capital of the Acquired Subsidiary has been repaid in whole or
in part or has become due or is liable to be declared due by
reason of either service of a notice or lapse of time or
otherwise howsoever;
(e) has not made any change to the remuneration, terms of
employment, emoluments or pension benefits of any present or
former director, officer or employee of the Acquired
Subsidiary who, on the Balance Sheet Date, was entitled to
remuneration in excess of (Pound)35,000 per annum and has not
appointed or employed any additional director, officer or
employee entitled as aforesaid;
(f) has not entered into contracts involving capital expenditure
in an amount exceeding (Pound)50,000 in the aggregate;
(g) has not become aware that any event has occurred which would
entitle any third party to terminate any material contract or
any benefit enjoyed by it or call in any money before the
normal due date therefor;
(h) has paid its creditors within the times agreed with such
creditors and does not have any debts outstanding which are
overdue for payment by more than four weeks; and
(i) (including any class of its members) has not passed any
resolution whether in general meeting or otherwise.
Exhibit 2.3
3.2 Options and Guarantees
(a) The Acquired Subsidiary is not responsible for the
indebtedness of any other person nor party to any option or
pre-emption right or any guarantee, suretyship or any other
obligation (whatever called) to pay, purchase or provide funds
(whether by the advance of money, the purchase of or
subscription for Stock or other securities or the purchase of
assets or services or otherwise) for the payment of, or as an
indemnity against the consequence of default in the payment
of, any indebtedness of any other person.
(b) No person other than the Acquired Subsidiary has given any
guarantee of or security for any overdraft, loan or loan
facility granted to the Acquired Subsidiary.
4. The Properties
4.1 Statutory compliance/environmental issues
(a) The Acquired Subsidiary is not in breach of and has not
received notice of and is not aware of any allegation of
breach of the requirements of:
the Shops Xxx 0000 and 1965
the Clean Air Xxx 0000
the Construction (Design and Management) Regulations 1995
the Radioactive Substances Xxx 0000
the Xxxxxxxxx Xxx 0000
the Offices Shops and Railway Premises Act 1963
the Fire Precautions Xxx 0000
the Health and Safety at Work etc Xxx 0000
the Control of Pollution Xxx 0000
the Food and Environmental Protection Xxx 0000
the Planning (Hazardous Substances) Xxx 0000
the Environmental Protection Xxx 0000
the Water Resources Xxx 0000
the Water Industry Xxx 0000 or
the Public Health Acts
or other legislation concerning health, safety or
environmental matters or any regulations, orders, notices or
directions made under any of such legislation which in any
such case affect any of the Properties or any property in the
vicinity thereof or anything due thereon.
(b) Where required a fire certificate has been issued in respect
of each of the Properties and each of the Properties complies
in all respects with current fire regulations and the current
requirements of the insurers of the Properties.
Exhibit 2.3
4.2 Condition and Repair
(a) There are (and there have been) no structural or other defects
in respect of the buildings and structures on or comprising
any of the Properties and all such buildings and structures
are in good and substantial repair and condition.
(b) So far as the Seller is aware, there are no latent or patent
defects in the buildings and structures on or comprising the
Properties and in the construction of the buildings and its
structures on or comprising the Properties or any alterations
thereto none of the following materials were used:
(i) high alumina cement in structural elements;
(ii) wood wool slabs in permanent formwork to concrete or
in structural elements;
(iii) calcium chloride in admixtures for use in reinforced
concrete;
(iv) asbestos or asbestos containing products as defined
in the Asbestos Regulations 1969 and 1987;
(v) naturally occurring aggregates for use in reinforced
concrete which do not comply with British Standard
Specification 882: 1983 and naturally occurring
aggregates for use in concrete which do not comply
with the provisions of British Standard Specification
8110: 1985;
(vi) urea formaldehyde foam or materials which may release
formaldehyde in quantities which may be hazardous
with reference to the limits set from time to time by
the Health and Safety Executive;
(vii) materials which are generally comprised of mineral
fibres either man-made or naturally occurring which
have a diameter of 3 microns or less or which contain
fibre not sealed or otherwise stabilised to ensure
that fibre migration is prevented; or
(viii) any other materials not in accordance with good
design standards and good building practice at the
time of construction of any such buildings.
5. Section deleted at Sale Hearing
6. Insurance
Particulars of all policies of insurance of the Acquired Subsidiary now
in force have been fully and accurately disclosed prior to the date of
this Agreement and such particulars are true and correct and all
premiums due on such policies have been duly paid and all such policies
are valid and in force. Save as fully and accurately disclosed prior to
the date of
Exhibit 2.3
this Agreement, there is no claim outstanding under any such policies
and there are no circumstances likely to give rise to a claim.
7. Trading
7.1 Delegation of powers
There are in force no powers of attorney given by the Acquired
Subsidiary other than to the holder of an encumbrance solely to
facilitate its enforcement nor any other authority (express, implied or
ostensible) given by the Acquired Subsidiary to any person to enter
into any contract or commitment or do anything on its behalf other than
any authority of employees to enter into routine trading contracts in
the normal course of their duties.
7.3 Guarantees and warranties
The Acquired Subsidiary has not given any guarantee or warranty or made
any representation in respect of articles of Inventory or Products,
sold or contracted to be sold by it, save for any warranty or guarantee
implied by law and (save as aforesaid) has not accepted any liability
or obligation to service, maintain, repair, take back or otherwise do
or not do anything in respect of any articles or Inventory or Products
that would apply after any such article or Inventory or Products has
been delivered by it.
8. Contracts
8.1 Onerous contracts
There are no long term contracts (i.e. contracts not terminable by the
Acquired Subsidiary without penalty on three months' notice or less) or
onerous or unusual or abnormal contracts (i.e. contracts for capital
commitments or contracts differing from those necessitated by the
ordinary course of business) binding upon the Acquired Subsidiary, nor
is the Acquired Subsidiary a party to any contract which contains any
onerous or other provision material for disclosure to an intending
Buyer of the Stock and no expenses or liabilities have been incurred
before the date of this Agreement by the Acquired Subsidiary otherwise
than for the purpose of the Business.
8.2 Material contracts
All contracts to which the Acquired Subsidiary is a party as are
necessary or desirable to the Business now being conducted have been
fully and accurately disclosed prior to the date of this Agreement and
the Acquired Subsidiary is not a party to or subject to any agreement,
transaction, obligation, commitment, understanding, arrangement or
liability which:
(a) is incapable of complete performance in accordance with its
terms within six months after the date on which it was entered into
or undertaken;
Exhibit 2.3
(b) is known by the Seller or by the Acquired Subsidiary to be
likely to result in a loss to the Acquired Subsidiary on
completion of performance;
(c) cannot readily be fulfilled or performed by the Acquired
Subsidiary on time and without undue or unusual expenditure of
money and effort;
(d) involves or is likely to involve obligations, restrictions,
expenditure or receipts of an unusual, onerous or exceptional
nature and not in the ordinary course of business;
(e) other than Intercompany Payables, requires an aggregate
consideration payable by the Acquired Subsidiary in excess
of(pound)50,000 per annum;
(f) involves or is likely to involve the supply of goods by or to
the Acquired Subsidiary the aggregate sales value of which
will represent in excess of 5% of the turnover of the Acquired
Subsidiary for the year ended on the Balance Sheet Date;
(g) is a contract for services (other than contracts for the
supply of electricity or normal office services);
(h) requires the Acquired Subsidiary to pay any commission,
finder's fee, royalty or the like; or
(i) is in any way otherwise than in the ordinary and proper course
of the Business.
9. Directors, Workers and Employees
9.1 Particulars of Workers
The particulars of all Workers have been fully and accurately disclosed
prior to the date of this Agreement.
9.2 Remuneration and Benefits
The particulars of all Workers have been fully and accurately disclosed
prior to the date of this Agreement show all remuneration and other
benefits:
(a) actually provided; or
(b) which the Acquired Subsidiary is bound to provide (whether
now or in the future)
to each Worker and are true and complete and include particulars of
(and details of) participation in all profit sharing, incentive, bonus,
commission, share option, medical, permanent health insurance,
directors' and officers' insurance, travel, car, redundancy and other
benefit schemes, arrangements and understandings operated for all or
any Workers or former Workers of the Acquired Subsidiary or their
dependants whether legally binding on the Acquired Subsidiary or not.
Exhibit 2.3
9.3 Terms and Conditions
(a) Copies of all the standard terms and conditions, staff
handbooks and policies which apply to Workers and identifies
which terms and conditions apply to each Worker have been
fully and accurately disclosed prior to the date of this
Agreement.
(b) There are no terms and conditions in any contract with any
Worker pursuant to which such person will be entitled to
receive any payment or benefit or such person's rights will
change as a direct consequence of the transaction contemplated
by this agreement.
9.4 Notice of Termination, Leave of Absence and Outstanding Offers
(a) No Worker earning a basic salary in excess of(pound)20,000
per annum has given or received notice to terminate his
employment or engagement.
(b) Save as fully and accurately disclosed prior to the date of
this Agreement there are no Workers who are on secondment,
maternity leave or absent on grounds of disability or other
leave of absence (other than normal holidays or absence of no
more than one week due to illness).
(c) There are no outstanding offers of employment or engagement by
the Acquired Subsidiary and no person has accepted such an
offer but not yet taken up the position accepted.
(d) Save as fully and accurately disclosed prior to the date of
this Agreement in relation to the seven Workers on long term
sick leave the Acquired Subsidiary is not due or liable to pay
these seven Workers any monies or other benefit.
9.5 Payment up to Completion
All salaries, wages and fees and other benefits of all Workers have, to
the extent due, been paid or discharged in full together with all
related payments to third party benefit providers or relevant
authorities.
9.6 Claims by Workers
No past or present Worker or any worker of a predecessor in business
has any claim or right of action against the Acquired Subsidiary
including any claim:
(a) in respect of any accident or injury which is not fully
covered by insurance; or
(b) for breach of any contract of services or for services; or
Exhibit 2.3
(c) for loss of office or arising out of or connected with the
termination of his office or employment and no event or
inaction has occurred which could or might give rise to any
such claim.
9.7 Redundancy and short time working
(a) Full and accurate details have been disclosed prior to the
date of this Agreement of any redundancy payment (whether
pursuant to a redundancy scheme or formula or policy or
otherwise whether contractual or discretionary) the Acquired
Subsidiary has made in excess of the statutory redundancy
entitlement to any Worker or former Worker in the last 5
years, and there is no provision in any occupational pension
scheme in which Workers participate which provides enhanced
benefits on redundancy.
(b) Full and accurate details have been disclosed prior to the
date of this Agreement of the short time working arrangements
in place at the Acquired Subsidiary.
Exhibit 2.3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed under seal on their respective behalf, by their respective duly
authorised officers, all as of the day and year first above written.
SELLER: BUYER:
Aerovox, Inc. Evox Rifa AB
a Delaware corporation a Swedish corporation
By:/S/ XXXXXX X. XXXXXXX By:/S/ XXXXX XXXXXXXX
------------------------ ---------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxx Xxxxxxxx
Title: President and CEO Title: President
Duly authorised: Duly authorised:
