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Pepper Hamilton IIPAitomeyi it L»w
3000 Two Login SquareEighteenth and Arch StreetsPhiladelphia, PA 19103-2799
PFax .. , . -. [email protected]
May?, 1998
HAND DELIVERYJoan A. Johnson, EsquireAssistant Regional CounselU.S. Environmental Protection AgencyRegion in841 Chestnut BuildingPhiladelphia, PA 19107
Re: Malvem TCE Superfund Site (Chemclene Corporation)258 N. Phoenixville Pike. Chester County. Malvern. PA
Dear Ms. Johnson:
I am writing as counsel for the Lavelle Company, which was mistakenly sent anApril 30,1998 letter from you addressed to Lavelle Aircraft Company. As you will note frommy enclosed June 30, 1997 letter to Benjamin Fields, Lavelle Company and Lavelle AircraftCompany are separate and distinct companies, and Lavelle Company is not a successor to LavelleAircraft. In the future, please communicate with Lavelle Aircraft via its bankruptcy attorney,Leslie Baskin, at Spector, Gadon & Rosen, P.C., Seven Penn Center, 1635 Market Street, 7thFloor, Philadelphia, Pennsylvania 19103.
Please telephone me if you have any questions about this matter.
Philip J. Katauskas
PJK/mjmEnclosure
cc: Leslie Baskin, Esquire - w/encl. (via hand delivery)
Waihington, D.C, Detroit. Michigan New York, New York Pimburgh, Pennsylvania
Wilmington, Delaware Harriiburg, Penniylrinii Berwyn, Penniylvini* Cherry Hill, New Jtncy
HROOI962
PEPPER, HAMILTON & SCHEETZ LLPATTOR.NEYS AT LAW
WASHINGTON, D.C. 3QOO LOQAN SQUARE W.LM.NGTON. DELAWARE
DETROIT, MICHIGAN EIGHTEENTH AND ARCH STREETS BERWYN. PENNSYLVANIANEW YORK, NEW YORK PHILADELPHIA. PENNSYLVANIA I9IO3-2799 CHERRY HILL. NEW JERSEY
PITTSBURGH. PENNSYLVANIA (1IB) •et-*°°° LONDON. ENGLAND
HARRISBURG. PENNSYLVANIA ' MOSCOW. RUSSIA
WRITER'S DIRECT NUMBER
(215)981-4314
I June 30,1997
Via Hand Delivery
Benjamin Fields, EsquireU.S. Environmental Protection AgencyRegion IH841 Chestnut BuildingPhiladelphia, PA 19107
Re: Malvern TCE Superfund Site (Chemclene Corporation)258 N. Phoenixville Pike. ' 'Hester County. Malvern. PA
Dear Mr. Fields:
I am writing on behalf of this firm's client, the Lavelle Company, which receiveda General Notice Letter from Abraham Ferdas, Associate Division Director for SuperfundPrograms, Hazardous Waste Management Division, dated November 14,1996, about theMalvern TCE Superfund Site (Chemclene Corporation), at 258 Phoenixville Pike, ChesterCounty, Malvern, PA ("the Site"). I know that you have had communications from the LavelleCompany and discussions with my associate, Lia Silva Grassi, about this General Notice Letter.I am writing to follow up on those communications and to provide you with additionalinformation establishing that the Lavelle Company and Lavelle Aircraft Company are separateand distinct companies and that the Lavelle Company is not a successor to Lavelle Aircraft.
We understand that the United States Environmental Protection Agency ("EPA")listed the Site on the National Priorities List in September 1983 and is currently in the process ofconducting a Remedial Investigation and Feasibility Study. The EPA has also prepared a DraftVolumetric Ranking Summary. The Lavelle Company is not identified on that Summary,although Lavelle Aircraft is listed as a generator. Lavelle Aircraft, a Pennsylvania corporation,filed for protection under Chapter 11 of the United States Bankruptcy Code on November 14,1994. A copy of the Bankruptcy Court Order dated January 12,1996, approving Lavelle
AROOI963
PEPPER, HAMILTON & SCHEETZ LU>
Benjamin Fields, EsquireJune 30, 1997Page 2
Aircraft's Sixth Amended Plan of Reorganization (the "Confirmation Order*') is attached heretoas Exhibit "A.1' It appears that Lavelle Aircraft has emerged from bankruptcy and is still inexistence, with offices in Philadelphia, Pennsylvania.
This firm's client, the Lavelle Company, is a Delaware Corporation, which wasincorporated on February 14, 1996. The Lavelle Company is in the business of manufacturingsheet metal components for the defense and civilian/commercial aerospace industries. TheLavelle Company is wholly owned by the Eastwind Corp. and was formed in order to purchasecertain of the assets of the Lavelle Aircraft Company pursuant to a Bankruptcy Court approvedAsset Purchase Agreement (the "Agreement"). A copy of the Agreement is attached as Exhibit"B." The Agreement, which was approved as part of the Confirmation Order, specificallyconveyed the assets "free and clear of all mortgages, liens, pledges, charges .... or otherencumbrances or rights of others." Sfifi Section 4.5 of the Agreement. Under the Agreement, theLavelle Company did not purchase Lavelle Aircraft's cash, accounts receivable, real property orcertain litigation assets. SfiC Section 1.3(a) of the Agreement. Moreover, except for certainlimited contractual obligations, the Lavelle Company did not expressly or impliedly assume anyof Lavelle Aircraft's liabilities. Sec Section 3.2 of the Agreement. In addition, the Agreement,states that "Buyer shall not be deemed a successor to Seller." IsL.
The directors of Lavelle Company are Albert Bailey, Ken Mone, Mike Schluppand John Thatch, and the officers are Albert Bailey, President and Chief Executive Officer andKen Mone, Vice President and Chief Financial Officer. With the exception of Mr. Thatch, noneof the directors or officers of the Lavelle Company were directors or officers of Lavelle Aircraft.Although the Lavelle Company hired many of the employees of Lavelle Aircraft because of theirindustry expertise, approximately 42% of the Lavelle Company's current employees are notformer Lavelle Aircraft employees.
Since the Lavelle Company is not a successor to Lavelle Aircraft, it would not beappropriate for the Lavelle Company to participate in any negotiations regarding this Site. Pleasetelephone me if you need additional information or if I can be of any further assistance.
truly yours.
Enclosures
cc: Albert C. Bailey, President, Lavelle Company (w/enc.)Robert D. Lane, Jr., Esquire (w/enc.)
A R O O I 9 6 U
IN THE UNITED STATES BANKRUPTCY COURTFOR THE EASTERN DISTRICT OF PENNSYLVANIA
IN RE: : CHAPTER 11•
LAVELLE AIRCRAFT COMPANY : BANKRUPTCY NO. 94-17496
Debtor :
ORDER CONFIRMING DEBTOR'S SIXTH AMENDEDPLAN OF REORGANIZATION. AS MODIFIED
IAND NOW, this| day of January, 1996, upon consideration of Debtor's
request for confirmation of its Sixth Amended Plan of Reorganization, As Modified as
filed on November 21, 1995 ("Plan") and the Affidavit of Paul DeJuliis filed in support
thereof, and
It having been determined after hearing and notice that:
A. On November 21, 1995, after a hearing and notice to all creditors, this
Court entered an Order Approving Sixth Amended Disclosure Statement, Voting
Materials, Plan Voting Procedures and Notice;
B. The November 21, 1995 Order was served on all creditors and interest
holders along with copies of the Plan, Disclosure Statement and Ballots for accepting the
Plan;
C. The Plan has been accepted or is deemed accepted in accordance with
Section 1126 of the Bankruptcy Code by all classes of claims whose acceptance is
required by law;
(i) Debtor's Report of Plan Voting having been filed with the Court on
December 28, 1995 which states that all classes of claims and interest have either voted
in favor of the Plan or are not impaired; and
AROOI965
(ii) the Court further finding that such acceptances were solicited after**
disclosure to holders of claims and interests in the Disclosure Statement; and
(iii) any objection filed being overruled by the Court;
(iv) the Court finds that notice of the Confirmation Hearing was noticed
and sufficient pursuant to F.R.B.P. 2002.£. _____ - —— ————————————————— ——— - _______
It is hereby ORDERED that:
1. Debtor's Plan is CONFIRMED pursuant to 11 U.S.C. Section 1129(t);
2; —— The iVsset Purcha<« Agraemint datsd Pocombcf 39r-t995-
U f— UOTvDu JafTOaTj _ , tyyo tat iicTcDy
The Asset Purchase Agreement dated December 29, 1995 was a result of
\ arms length negotiations and is a good faith transactionJand the pur eh AMI ilieiKumler
m afforded under 11 U.S.C* §3oJ(ia).
^ Debtor is hereby directed to , acute such documents and do such things as
may be necessary and appropriate to effectuate the provisions of the Plan;
£ The sale of the Premises (as defined in the Plan) under the Plan shall be
deemed for all purposes as a transfer occurring under and pursuant to the Plan and
shall be exempt from transfer, recording and similar taxes pursuant to Section 1146(c)
of the Bankruptcy Code. In order to effectuate Section 1146(c), each Recorder of Deeds
or similar official for any County or governmental unit in which deeds for the transfer
of the Premises are to be recorded shall not refuse to accept such deed for recording by
reason of non-payment of any transfer, recording or similar taxes;
All executory contracts and unexpired leases listed on Debtor's Schedules
not previously rejected by Order of this Court or by the Plan, shall be deemed assumed
A Th'S v*"y c pure it eft pu,* s**** £ * pf&n r). rtt* $&*"?$-f 3t3(w) l»&p/Uit-**4.~
RROOI966
and no adequate assurance of future performance other than the promise to perform*•shall be required;
£/ All requests for approval of payment and administrative expenses,
including fees and expenses shall be filed within 45 days of the date of the entry of the
Ordertiu tluill It fniUU MiretfffgBrastlling AUlu iequal fiuui UIL Cjtatu——
Pursuant to Rule 3002(c)(4), claims if any, arising out of the rejection of
any executory contract must be filed within forty-five (45) days of the date hereof;
Debtor may file with the Court within sixty (60) days from the date hereof
any objection to allowance of any claim of a creditor or any requests for payment of
administrative claims not heretofore objected to, and in the event of the failure of
Debtor to do so, any objections to allowance of claims shall be deemed waived; provided
however, that such time period may be extended by the Court upon proper application
made prior to the expiration of Such sixty day period;
10. —— TTpnn tha Plnn Fiffrftirr Pntr Pilifni ih
permitted by Section 1141(d)(l) of the Bankruptey-CodeT from any debt that arose prior
to Confirmation and ny-tffSTof any kind specified hi Section 502(g), 502(h) or 502(i) of
Code;
14* —— Pnrnmnt tit Frrtfan HJ?(r} nf thi "•" r'r'try r™1ffr uoo" the Plan
Effective Date, except for the encumbrances which secure the Midlantic Banjg f r
Secured Claim, PIDA Secured Claim and PIDC-LDC Secured Talra or as otherwise
provided in the Plan, the property deaUwjtfc-bythe Plan will be free and clear of all
claims and interests tcrethTors (and/or their successors or assigns), equity security
all guch entities shall be enjoined pursuant to Section 524(a)(2) from
AROOI967
hinder or delay the scheduling and holding of the sale and
provided for in the Plan), employing processjjc-airtfcTto collect or recover from or
offset any debt as ap softflMTaEiiity of the Debtor, whether or not discharge of such
The Court shall retain subject matter jurisdiction of Post-Confirmation
disputes only to the extent allowed by Federal Bankruptcy Law, any language in the
Plan notwithstanding;
Debtor shall send notice of this Order as required by Federal Rule of
Bankruptcy Procedure 2002(0(7).A ;J Ar^ -.v.vW A-fMint* TOE COURT:
/KPI**-
LJ.&DIANE W SIGMUND
Copies to Interested Parties:
Joseph F. Minni, EsquireOffice of the U.S. Trustee601 Walnut StreetCurtis Center - Suite 950 WestPhiladelphia, PA 19106
Alan R. Gordon* EsquireSAUL, EWING, REMICK & SAUL3800 Centre Square WestPhiladelphia, PA 19102
Notices nailed on
Deputy
AROOI968
Joel C. Shapiro, EsquireBLANK ROME COMISKY & McCAULEYFour Perm Center PlazaPhiladelphia, PA 19103
Louis Lipsky, EsquireLipsky & Brandt2920 PSFS BuildingPhiladelphia, PA 19107
John G. Narkin, EsquireCommonwealth of PennsylvaniaDepartment of CommerceOffice of Chief Counsel416 Forum BuildingHarrisburg, PA 17120
Scott R. Hatz, EsquireBond, Schoeneck & King, LLPOne Lincoln CenterSyracuse, NY 13202-1355
Eric Frank, EsquireMILLER & MILLER1640 PSFS Building12 S. 12th StreetPhiladelphia, PA 19107
Laveile Aircraft Company275 Geiger RoadPhiladelphia, PA 19115
F:\Cwn\Zambrano\UvelIe\Conflrm.Ord January 4, 1996
AROOI969
ASSET PURCHASE AGREEMENT
DATED AS OF DECEMBER 29, 1995
BY AND BETWEEN
LAVELLE COMPANY (BUYER)
AND
LAVELLE AIRCRAFT COMPANY (SELLER)
EXHIBIT "G"
AROOI970
TABLE OF CONTENTSPage
SECTION i Assets to be Acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.1 Description of Assets . . . . . . . . . . . . . . . . . . . . . . . . . 21.2 Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.3 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.4 Special Provisions Regarding Executory Contracts . . . . . . . 4
SECTION 2 The Purchase Price and Related Matters . . . . . . . . . . . . . . . . . . 52.1 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.2 Adjustment to Purchase Price . . . . . . . . . . . . . . . . . . . . 6
SECTION 3 Assumption of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 4 Representations and Warranties of Seller . ................. 84.1 Organization and Good Standing .................. 84.2 Authority ................................ 94.3 No Violation .............................. 94.4 Consents and Approvals of Governmental Authorities *
and Others ............................... 9 '4.5 Title to Assets ............................. 104.6 Litigation; Compliance with Laws ................. 104.7 Certain Fees .... ......................... 114.8 Assets ......... ......................... 114.9 Licenses ................................. 114.10 Insurance ................................ 124.11 Absence of Sensitive Payments ................... 124.12 Taxes .................................. 134.13 Employment Matters .......................... 134.14 Disclosure ............................... 14
SECTION 5 Representations and Warranties of Buyer ................. 155.1 Organization .............................. 155.2 Execution and Delivery ....................... 155.3 Certain Fees .............................. 15
SECTION 6 Further Agreements and Assurances .................... 166.1 Contact with Employees ....................... 166.2 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166.3 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 166.4 Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166.5 Bankruptcy Coun Approval . . . . . . . . . . . . . . . . . . . . . 176.6 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . 17
A R O O I 9 7 I
SECTION 7 The Closing ................................... is
SECTION 8 Conditions Precedent to the Obligations of Buyer . . . . . . . . . . . . is8.1 Government Approvals . . . . . . . . . . . . . . . . . . . . . . . . 198.2 Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . 198.3 Representations and Warranties . . . . . . . . . . . . . . . . . . . 198.4 Performance of Obligations ..................... 198.5 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198.6 Instruments of Conveyance, Etc. . . . . . . . . . . . . . . . . . . 198.7 Collective Bargaining Agreements . . . . . . . . . . . . . . . . . 208.8 Due Diligence ............................. 208.9 Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208.10 Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208.11 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . 208.12 Financing ................................ 218.13 Other Conditions of Buyer Related to Bankruptcy ........ 21
SECTION 9 Conditions Precedent to the Obligations of Seller . . . . . . . . . . . . 219.1 Representations and Warranties ................... 219.2 Execution and Delivery ....................... 229.3 Lease .................................. 259.4 Payment ................................. 22
SECTION 10 Bankruptcy Court Approval ......................... 22
SECTION 11 Conduct of Business Prior to Closing .................... 23
SECTION 12 Representations and Warranties Do Survive ................ 25
SECTION 13 Competition ................................... 25
SECTION 14 Termination: Modification or Waiver .................... 2514.1 Termination .............................. 2514.2 Modification .............................. 2614.3 Waiver ................................. 26
SECTION 15 Costs Incident to Preparation of Agreement ................ 27
SECTION 16 Parties in Interest and Assignment ..................... 27
SECTION 17 Investigation by Buyer ............................ 27
SECTION 18 Risk of Loss; Damage Prior to Closing .................. 28
ui
AROOI972
SECTION 19 Best Efforts ................................... 29
SECTION 20 Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 21 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 22 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
IV
AROOI973
GLOSSARY OF TERMS
Defined Term
Agreement HeadingAssets 1-2Bankruptcy Code PreambleBankruptcy Court PreambleBanks 6.6Business PreambleBuyer HeadingClosing 7Closing Date 7Code 2-2Deposit 2-°ERISA 4-13<a>Final Bankruptcy Order 10-1Motion 6*6Plan I0*1Purchase Price 2.1Seller Headin*
ARQOI971*
EXHIBITS
Exhibit A Plan of Reorganization of Seller
Exhibit B Lease of Premises at 275 Geiger Road. Philadelphia. PA
SCHEDULES
1. l(a) Fixtures and Equipment1.1 (c) Personal Property1.1 (e) Contracts. Agreements and Leases1.1 (j) Other Assets Owned by Seller4.4 Consents4.6 Litigation4.10 Insurance4.12 Taxes4.13(a) Employee Information4.13(b) Employment Agreements in Force4.13 (c) Union Contracts
VI
AROOI975
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated this day of , 1995
("Agreement") by and between LAVELLE COMPANY, a Delaware corporation to be formed
("Buyer") and LAVELLE AIRCRAFT COMPANY, a Pennsylvania corporation, as debtor and
Debtor-in-Possession ("Seller").
WITNESSETH:
WHEREAS. Seller is a contract manufacturer of sheetmetal parts for aircraft jet
engines, missiles and commercL. products (the "Business");
WHEREAS, Seller filed a voluntary petition under Chapter 11 of the Bankruptcy
Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Eastern District
of Pennsylvania on November 14. 1994 (the "Bankruptcy Court") such matter being designated
as No. 94-17496-DWS (the "Proceedings"); and
WHEREAS, Seller desires to sell, and Buyer desires to acquire, certain of the
assets of Seller used in the Business as more fully described below, together with all other
licenses, permits or authorizations issued by any regulatory agency in connection therewith, free
and clear of ail liabilities, claims, liens and encumbrances with approval of the Bankruptcy Court
as pan of a plan of reorganization of Seller (the "Plan"), ail upon the terms and conditions set
forth herein:
NOW THEREFORE, in consideration of the premises and mutual covenants,
agreements, representations and warranties set forth herein, and intending to be legally bound,
the panies hereto agree as follows:
AROOI976
SECTION 1. ASSETS TO BE ACQUIRED
1.1 Description of Assets. Subject to the terms and conditions of this
Agreement, and in reliance on the representations, warranties and covenants contained herein.
on and as of the Closing Date (capitalized terms shall be used as defined in the Sections
mentioned in the Glossary of Terms to this Agreement) Seller will sell, convey, assign, transfer
and deliver to Buyer, and Buyer will purchase and acquire, all subject to Bankruptcy Court
approval, the following assets:
(a) all fixtures, tooling, machines and equipment set forth on Schedule
1. l(a) or used in connection with and for the operation of the Business and all trademarks, trade
names including the name "Lavelle", "Lavelle Aircraft Company" or any derivative thereof.
service marks, jingles, slogans, copyrights, patents and applications therefor (if any), trade!
secrets and know-how used or useful in the operation of the Business and the goodwill of Seller
associated with the Business;
(b) all inventory, raw materials, components, supplies and work-in-
process owned by the Seller on the Closing Date;
(c) ail of the personal pioperry used or useful in the operation of the
Business in the normal course of Business as listed on Schedule l.l(c), and any additions
thereto or substitutions therefor,
(d) rights to ail pending and current private and government contracts,
together with the right to use government equipment loaned to Seller in connection with any
government contracts:
FJanuarv :. 1446
flROOI977
(e) the licenses, certifications, contracts, agreements, permits and
leases, other than for employment or other personal services, listed and described on Schedule
I. l(e)f which are in effect on the date hereof, together with any similar agreements entered into
in the ordinary course cf Seller's Business berween the date of this Agreement and the Closing
Date, all as consented to by Buyer such consent not to be unreasonably withheld or delayed; and
provided, however, that Buyer shall not be required to assume any contracts that require consent
by a third party to the assignment thereof without Buyer's consent (except as expressly provided
below) unless such consent shall have been obtained prior to the Closing Date or any collective
bargaining agreements or any contracts that would require Buyer to pay any amounts owed by
Seller;
(f) Note receivable from DIM Holding, Inc. (later changed to DT\f
Aerospace, Inc.) to Seller in the original principal amount of 5300,000.00, since reduced by
payments on account to $145,637.00; and,
(g) in particular, and without limiting the generality of the foregoing.
the Assets include:
(i) all other licenses, permits or authorizations issued by anygovernmental agency which are used or useful in theoperation of the Business;
(ii) all Business records relating solely to the operation of theBusiness, including without limitation, advertising lists.procedures m**?"1*. customer lists (including files),metallurgical data, promotional materials and publications,surveys, certain financial records, supplier lists and filesand research data;
(iii) engineering data, blueprints, computers and computersoftware programs; and.
FJanuarv 2. 1996
AROOI978
(iv) all other assets owned by Seller, which are described onSchedule l.l(g).
1.2 Definition. The assets to be sold by Seller to Buyer pursuant to Section
l.l hereof are hereinafter collectively referred to as the "Assets."
1.3 Excluded Assets.
(a) The Assets do not include cash, real property, accounts receivable.
a certain claim and cause of action against Richard Ludwig filed with the Bankruptcy Court on
May 15, 1995, Adversary Proceeding No. 95-0284. corporate records or any other assets of
Seller not used or useful in the operation of the Business (collectively the "Excluded Assets").
(b) With regard to certain of the Excluded Assets, Buyer undertakes
to: •
i. use its best efforts to collect the accounts receivableoutstanding on the Closing Date as agent for the benefit ofSeller and/or Midlantic Bank, N.A.;
ii. finance the adversary proceeding referred to in Section1.3(a), above, in an amount up to 550,000 to allow Sellerto pursue Seller's cause of action against Richard Ludwig;and,
iii. lease from Seller the real property owned by Seller andused in die Business known as 275 Geiger Road,Philadelphia, PA 19115, which lease is attached hereto asExhibit B and made a pan hereof, which terms areconsistent with Seller's Plan of Reorganization.
1.4 Special Provisions Regarding Executory Contracts. To the extent any
of the Assets constitute unassumed executory contracts within the meaning of §365 of the
Bankruptcy Code. Seller shall either forthwith file with the Bankruptcy Court a motion seeking
to assume and assign such contracts (subject to closing hereunder) or shall assume and assign
F FILES-IT114-CPFDOCS'. ASSETPUR. 32Janwrv I. 19M6
AROOI979
such contracts to Buyer in accordance with the Plan. If Seller determines to reject any executory
contract, Seller shall give Buyer prior written notice of Seller's intention to reject each such
contract and Seller's reason for such rejection and shall furnish a copy of each such contract to
Buyer (if not already so furnished). Nothing herein shall (a) prevent Seller from rejecting any
executory contract; (b) obligate Buyer to assume any liabilities for damages or otherwise with
respect to any rejected contract; or (c) obligate Buyer to purchase the Assets under this
Agreement if Buyer, in its sole discretion, determines such rejected contract or contracts are
material to. or required for. Buyer's operation of the Business; provided, however, that Buyer
shall have five Business days following receipt of the notice and ail other material required by
the immediately preceding sentence to object in writing to Seller's proposed action. The absence
of a response from Buyer within the time set forth above shall be deemed a consent by Buyer
to Seller's proposed action, and Seller's engaging in such action on the terms described in the
notice will not excuse Buyer from performing under this Agreement. If Buyer objects to such
proposed action and Seller thereafter engages in the proposed action. Buyer may terminate this
Agreement upon written notice to Seller.
SECTION 2. THE PURCHASE PRICE AND RELATED MATTERS
2.1 Purchase Price.
(a) In consideration of the sale, conveyance, assignment, transfer and
delivery of the Assets, Buyer agrees to pay and deliver to Seller (the "Purchase Price") equal
to the following:
F,'anuap-1 I. I
flROOI980
(i) $1,224,500.00 in cash, in federal funds, in an account
designated by the Bankruptcy Court;
(ii) by credit, by Buyer assuming certain existing tax liabilities
of Seller, consistent with the terms of the Plan, and
classified as Class 2 Claims of Seller's Plan of
Reorganization, in an amount up to a total of THREE
HUNDRED THOUSAND DOLLARS (5300,000.00).
(b) The cash portion Purchase Price will be used to purchase the Assets
and fund the Plan payments which are required to be paid on the Effective Date of the Plan of
Reorganization. The Purchase Price shall be paid by (i) Buyer depositing the sum of TEN
THOUSAND (510,000.00) Dollars in escrow in an interest bearing account, pending
consummation or termination of this Agreement (the deposit, together with all interest earned
thereon, being herein referred to as the "Deposit"), and (ii) the balance on the Closing Date in
cash by wire transfer in immediately available funds to an account designated by order of the
Bankruptcy Court.
2.2 A4iustmeot to Purchase Price. Operation of the Business and the
collected income and expenses attributable thereto up to 12:01 a.m. on the Closing Date shall
be for the account of Seller and thereafter for the account of Buyer. Expenses, including, but
not limited to. such items as power and utilities charges, personal property taxes, insurance
premiums, rents and sales commissions, shall be prorated between Seller and Buyer at or as of
the Closing Date. This proration shall be made and paid, insofar as feasible, on the Closing
Date, by either adding to or subtracting from the amount to be paid at Closing under Section
FJjnuarv :, IWft
A R O O I 9 8
2.1. Notwithstanding anything in this Agreement to the contrary, after entry of the Confirmation
Order, no adjustment to the Purchase Price will be made on account of any breach of any
representation, warranty or covenant; nor shall such breach create any offset or claim in favor
of Buyer; provided that Buyer may elect, on account of any such breach, to terminate its
obligations hereunder in accordance with Section 14 hereof. Nothing herein shall be interpreted
to require Seller's lenders to accept any distribution other than that set forth in the Plan.
SECTION 3. ASSUMPTION OF LIABILITIES
3.1 Effective upon the Closing Date, Buyer will assume and pay or discharge
all of Seller's obligations accruing from and after the Closing Date under the leases, contracts
and other agreements described in Schedule l.l(e) and transferred hereunder at the Closing:
Date.
3.2 Except as set forth in Section 3.1 and 2.1(a), Buyer shall assume no
obligations or liabilities, contingent or otherwise, of Seller of any nature, whether arising in
contract, ton or otherwise, whether now existing or hereafter arising, related to, arising from
or connected with the Assets or the Business, including, but not limited to, any liability for
property damage, death or personal injury (whether suffered prior to or after the Closing) or
arising with respect to services rendered by Seller, and Seller shall convey no such obligations
or liabilities, contingent or otherwise, to Buyer, it being the itttenrym of the Buyer and Seller
that Buver shall not be deemed a successor to Seller.
F FILET:-lU.CPFDOCS\ASSrr?UR.3:January;. :•*»
AROOI982
3.3 Without limiting the generality of the foregoing provision, all claims and
obligations under, pursuant to or in connection with any welfare, medical, insurance, disability
or other benefit plans of Seller incurred on or before the Closing Date or resulting or arising
from events or occurrences occurring or commencing on or prior to the Closing Date shall
remain the responsibility of Seller. Seller shall terminate all employees on the Closing Date,
other than employees under contracts assumed by Buyer. Buyer shall have and assume no
obligation or liability under or in connection with any such plan and shall assume no obligation
with respect to any preexisting conditions of any employee of Seller which is hired as an
employee of Buyer. Buyer shall have no obligations to any of Seller's employees for accrued
benefits, severance or deferred pay or any other payments or benefits, which may be or become
due to such employees from Seller, including without limitation any liabilities to employees of-
Seller pursuant to the Worker Adjustment Retraining and Notification Act. Buyer shall not
assume any collective bargaining agreemen. ? which Seller is a party or which is applicable to
any of Seller's employees.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer on the date hereof and on the Closing
Date that:
4.1 Organization and Good Standing. Seller is a Pennsylvania corporation
validly existing in good standing under the laws of the Commonwealth of Pennsylvania, with full
power and authority to carry on its Business as presently conducted by it.
F FILES\:T:U>C?FDOCS-.ASSETPUR.J:January :. i«%
A R O O I 9 8 3
4.2 Authority. Subject to approval by the Bankruptcy Court, Seller has full
power and authority to execute and deliver this Agreement and the instruments of transfer and
other documents delivered or to be delivered pursuant hereto and to consummate the transactions
contemplated hereby and thereby. This Agreement and all instruments of transfer and other
documents delivered or to be delivered by Seller in connection with this Agreement have been
duly authorized and approved by all necessary and proper corporate action of Seller and
constitute, and will constitute, the valid and binding obligations of Seller enforceable in
accordance with their respective terms.
4.3 No Violation. Neither the execution and delivery of this Agreement by
Seller and the performance by Seller hereunder, nor the consummation of the transactions
contemplated hereby, will violate, conflict with, result in the breach of or accelerate the-
performance required by any of the terms, conditions or provisions of the certificate of
incorporation or bylaws of Seller or any covenant, agreement or understanding to which Seller
is a party or any order, ruling, decree, judgment, arbitration award or stipulation to which Seller
is subject, or constitute a default thereunder or result in the creation or imposition of any lien,
charge or encumbrance thereunder upon any of the Assets, or allow any person or entity to
accelerate any debt secured by any Asset, or allow any person or entity to interfere with Buyer's
full use and enjoyment of any of the Assets.
4.4 Consents and Approvals of Governmental Authorities and Others.
Except for the approval of the Bankruptcy Court and the approval of the federal government to
the assignment of any government contracts, receipt of which approvals are conditions precedent
to the obligations of Buyer and Seller as more fully set forth in Section 10, no approval or
r FILES-rU-r.CPrTX)CS\A$SEm'R.3:
AROOI981*
authorization of, filing or registration with, or notification to, any governmental or regulatory
authority is required in connection with the execution and delivery of this Agreement by Seller
or the performance of its obligations hereunder or the consummation of the transactions
contemplated hereby. Except as disclosed in Schedule 4.4. no consent, approval or authorization
of any person is required in connection with the execution or delivery of this Agreement by
Seller, the transfer to Buyer of the Assets or the performance by Seller of any other obligation
under this Agreement.
4.5 Title to Assets. Seller has good and marketable title to the Assets and
upon confirmation of the Plan of Reorganization by the Bankruptcy Court and entry of a final
and non-appealable order of the Bankruptcy Court confirming the Plan of Reorganization,
assignment and transfer of the Assets free and clear of claims, liens and encumbrances of
whatever nature, whether known or unknown, pursuant to 11 U.S.C Sections 363 and 365, will
transfer and convey the Assets to Buyer free and clear of all mortgages, liens, pledges, charges.
title retention or security agreements, claims, restrictions, leases, options, rights of first offer
or first refusal, confidentiality or secrecy agreements, noncompetition agreements, defects of title
or other encumbrances or rights of others.
4.6 Litigation; Compliance with Laws. Except for the adversary proceeding
against Richard Ludwig in which Seller is Plaintiff and except as disclosed in Schedule 4.6,
Seller is not engaged in, or a parry to. or threatened with, any legal action, suit, investigation
or other proceeding arising with respect to the Business or the Assets, by or before any court.
arbitrator or administrative agency, and after diligent inquiry. Seller does not know of any basis
tor any such action, investigation or proceeding. There are no outstanding orders, rulings.
F FlLES\riU'-CPFOOCS\ASSETFUR.3:J-uiuarv :. IVWt 10
AROOI985
decrees, judgments or stipulations or proceedings relating to or arising in connection with the
Business or the Assets to which Seller is a party or by which Seller is bound, by or with any
court, arbitrator or administrative agency, other than orders issued by the Bankruptcy Court.
Seller is operating the Business in compliance with the requirements of all federal, state and
local laws, regulations, judgments, injunctions, decrees, court orders and administrative orders
regarding such operations, including, without limitation, operating the Business in compliance
with the requirements of all federal, state and local laws, regulations and administrative orders
of the Navy, including, but not limited to conducting all necessary proofs of performance.
4.7 Certain Fees. Neither Seller nor any of its officers, directors, employees
or other affiliates has agreed to pay or has incurred any claims for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated hereby. *
4.8 Assets. The Assets include all tangible and intangible personal property
which are necessary or related to the operation of the Business. The Assets being transferred
are sufficient to operate the Business. All technical equipment, including without limitation, the
equipment listed on Schedule 1,1 (a) is in accordance with standard engineering practices in the
industry. Seller is selling, and Buyer is purchasing, the Assets "AS IS" and "WITH ALL
FAULTS", and without representation or warranty, express or implied, of any nature
whatsoever, including any representation or warranty of title, merchantability or fitness for any
particular purpose, except as specifically stated herein.
4.9 Licenses. Seller currently holds all franchises, agreements, licenses and
grants of authority as are necessary or advisable in connection with the conduct by it of its
Business as now conducted and as presently proposed to be conducted. Except as disclosed on
11
AROOI986
Schedule 4.9, no complaint has been filed respecting the Business and no such complaint which
has been filed has any merit; there is no pending or threatened governmental investigation or
inquiry into the Business. All of such other franchises, agreements, licenses and grants of
authority were duly and validly issued by the respective governmental authorities or agencies,
are in full force and effect and are valid and enforceable in accordance with their terms. There
exists no fact or circumstance which constitutes or which, with the passage of time or the giving
of notice, or both, would constitute, a default under any such other franchises, agreements.
licenses or grants of authority or would permit the grantor thereof to cancel or terminate the
rights thereunder, except upon the expiration of the full term thereof. Seller has given Buyer
true and correct copies of all such other franchises, agreements, licenses and grants of authority
including all amendments thereto. *
4.10 Insurance. Set forth on Schedule 4.10 is a list of ail insurance policies
held by or on behalf of Seller as of the date hereof and of all public liability insurance policies
held by or on behalf of Seller for the past five years, copies of which have been supplied to
Buyer. Seller maintains such types and amounts of insurance against such risks and losses as
are required by law or the terms of any contract and as-are customary for companies similarly
situated in the Business in which Seller is engaged and at the locations where Seller conducts
such Business, and except as set forth on Schedule 4.10, Seller has not received any notice of
actual or proposed cancellation or of reduction in coverage of, or of any increase in premium
under, such policies of insurance.
4.11 Absence of Sensitive Payments. Seller has not made any contributions.
payments or gifts to or for the private use of any governmental official, governmental employee
F F1LES\:?IU'.C?FDOC$\A$SET7U*.3:L9% 12
AROOI987
or governmental agent in any amount where either the payment or the purpose in making such
contribution, payment or gift is illegal under the laws of the United States or any other
jurisdiction and in the case of the laws of any jurisdiction other than the United States could
subject the Business Assets to any liability; Seller has not established or maintained any
unrecorded fund or asset for any purpose or made any false or artificial entries on its books; and
Seller has not made any payments to any person with the intention or understanding that any part
of such payment was to be used for any purpose other than that described in the document
supporting the payment.
4.12 Taxes. Except as described on Schedule 4.12, and except as provided in
the Plan, Seller has duly and timely filed all tax returns required to be filed by it or for which
it may be held responsible, and has paid all taxes, interest, penalties, duties, assessments and
deficiencies due and payable by it.
4.13 Employment Matters.
(a) Schedule 4.13(a) contains a true and complete list of names and
positions of all employees of the Business, including current hourly wages or monthly salary and
other compensation amounts. Seller has complied in ail respects with all applicable laws relating
to the employment of labor, including, without limitation, the Employee Retirement Income
Securiry Act of 1974, as amended ("ERISA"), Continuation Coverage Requirements of Group
Health Plans, Department of Defense Procurement Regulations and those relating to wages,
hours, collective bargaining, unemployment insurance, worker's compensation, equal
employment opportunity, age and handicapped discrimination, immigration control and the
payment and withholding of taxes.
AROOI988
(b) Except as set forth on Schedule 4.13(b), Seller has no employment
agreements, either written or oral, with any person which would require Buyer to employ any
person after the Closing Date. From and after the Closing Date, Buyer may. but shall have no
obligation to. offer employment to any of the current employees of Seller as Buyer may desire
on terms acceptable to Buyer.
(c) Schedule 4.13(c) contains a true and complete list of all contracts
with labor organizations to which Seller is a parry. Other than those contained on the Schedule
4.13(c), Seller is not a party to any contract with any tabor organization, and neither has Seller
agreed to recognize any union or other collective bargaining unit, nor has any union or other
collective bargaining unit been certified as representing any of its employees, nor has Seller
received any requests from any party for recognition as a representative or employees for
collective bargaining purposes.
(d) Buyer is not quired to continue any defined benefit, defined
contribution or other employee benefit plan subject to the jurisdiction of ERISA to which Seller
is. or may currently be, a parry.
4.14 Disclosure. No representations or warranties made by Seller in this
Agreement and no statements made by Seller in any certificate, schedule, exhibit or other writing
delivered by Seller or referred to in or pursuant to this Agreement contain, or at the date of its
delivery will contain, any untrue statement of material fact or omit or will omit any statement
of a material fact necessary to make complete, accurate and not misleading every representation.
warranty and statement of Seller set forth in this Agreement or any such certificate, schedule.
exhibit or other wriiina.
F FILES1.:"! U CPFDOCSvASSETWRj:Jovian I. 199« 14
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SECTION 5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
5.1 Organization. Buyer is a corporation to be formed under the laws of the
State of Delaware and at the Closing Date will be duly incorporated, existing and in good
standing under the laws of the State of Delaware and will be duly qualified to do business in
Pennsylvania and will have full corporate power to execute this Agreement and the other
documents delivered or to be delivered pursuant hereto and to consummate the transactions
contemplated hereby and thereby.
5.2 Execution and Delivery. The execution and delivery of this Agreement
by Buyer and consummation by Buyer of the transactions contemplated hereby will have been
duly authorized by all necessary corporate action of Buyer, and will constitute the valid and;
binding obligation of Buyer, enforceable in accordance with its terms, except as such
enforceabiliry may be limited by bankruptcy, insolvency, reorganization or similar laws relating
to or affecting the enforcement of creators' rights generally and by general equity principles.
regardless of whether such enforceabiliry is considered in a proceeding in equity or at law.
5.3 Certain Fees. Neither Buyer nor any of its officers, directors, employees
or other affiliates has agreed to pay or has incurred any claims for any brokerage fees,
commissions or finders* fees in connection with the transactions contemplated hereby.
AROOI990
SECTION 6. FURTHER AGREEMENTS AND ASSURANCE
6.1 Contact with Employees. Seller shall permit Buyer to discuss the
possibility of employment with current employees of the Business and shall not interfere with
or impede, directly or indirectly, this right.
6.2 Taxes. Seller agrees that it will pay all sales, use and transfer taxes, if
any, arising from the sale of the Assets, consistent with 11 U.S.C. §1146(c).
6.3 Employee Matters.
(a) Seller agrees to assume ail responsibility for maintenance and/or
distribution of benefits accrued under any qualified plans maintained by Seller pursuant to the
plan provisions of all such plans sponsored by Seller. Buyer will assume neither any liability
for any such accrued benefits nor any fiduciary or administrative responsibility to account for
or dispose of any such accrued benefits maintained under any qualified plans sponsored by
Seller.
(b) Seller shall comply with all required provisions of the Worker
Adjustment Retraining and Notification Act.
6.4 Operations. From and after the date hereof until the Closing Date;
(a) Seller shall (i) give to Buyer's counsel, accountants and other
representatives full access during normal business hours to all the Assets; (ii) not make any
capital investment over Five Thousand and 00/100 (S5.000.00) Dollars except in the ordinary
course of business without consulting Buyer; (iii) continue to have between the date hereof and
the Closing Date, insurance coverage on the Assets and public liability insurance in substantially
the same amounts and coverage as presently existing: (iv) operate the Business in the normal and
F FILES•.::tU\C7FDOCS'>AS5STPUR.3:Jjcuan 2. iWft 16
AROOI99
usual manner in accordance with standard engineering and operating practices and in compliance
with all rules and regulations, and in the ordinary course; and (v) use its best efforts to preserve
for the Business its present customers and present business reputation.
(b) Buyer and Seller shall use their respective best efforts to join in
applications to be filed with the government, if any, requesting its written consent to the
assignment of any government contracts from Seller to Buyer.
(c) Seller agrees that prior to the Closing Date, if it becomes aware of
any violation of governmental rules and regulations, it will correct or remove all such violations
or be responsible for the costs of removing such violations, including the payment of any fines
that may be assessed for any such violation.
6.5 Bankruptcy Court Approval. Seller, at its option, shall either file with
the Bankruptcy Court a motion (the "Motion") or have as part of its Order confirming its Plan
of Reorganization a request seeking (a) approval of the form of this Agreement and (b) authority
for Seller to comply with the terms and conditions of this Agreement pending the sale of the
Assets to Buyer or to such other entity as may be the ultimately approved purchaser of the
Assets as determined by the Bankruptcy Court in accordance with the Bankruptcy Code and the
terms of the Plan. The Bankruptcy Court's approval of the form of this Agreement and Seller's
limited obligations to comply with the terms of this Agreement shall be deemed terminated if
Seller is authorized by the Bankruptcy Coun to execute and deliver an agreement for the sale
of Assets to another entity.
6.6 Further Assurances. From time to time after the Closing, at Buyer's or
Seller's request and without further consideration. Seller or Buyer will execute and deliver such
F FILES :-IU.CPFDOCS.ASSETPLTl.::I. 19*6 17
AROOI992
other and further instruments of conveyance, assignment and transfer, and take such other
action, as Buyer or Seller may reasonably request for the more effective conveyance and transfer
of the Assets to Buyer.
SECTION?. THE CLOSING
The closing of the sale and purchase of the Assets (the "Closing") shall take place
at the offices of SPECTOR GADON & ROSEN, P.C., 1700 Market Street. 29th Floor.
Philadelphia, Pennsylvania, at 10:00 a.m. local time on a date mutually agreed upon by Buyer
and Seller within twenty (20) days following satisfaction of all conditions precedent to the
obligations of buyer and Seller set forth in Sections 3, 9 and 10 hereof (such date being herein
sometimes referred to as the "Closing Date"); provided however, that in the event that as of
February 1, 1996, the Confirmation Order has not been entered, this Agreement shall
immediately and automatically terminate unless the parties have elected to extend such deadline
in writing and neither Midlantic Bank, N.A., nor the PIDA or PIDC-LDC (the "Banks") or any
other party to the proceedings have objected to such extension.
SECTION 8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
The obligation of Buyer to acquire the Assets and pay the Purchase Price is
subject to the satisfaction, or waiver in writing by Buyer, on or prior to the Closing Date of the
conditions set forth in Section 10 hereof and each of the following conditions:
18
AROOI993
8.1 Government Approvals. The government's assent to the assignment of
the government contracts to Buyer shall have become final without any conditions unacceptable
to Buyer.
8.2 Corporate Action. All corporate and other actions necessary to authorize
and effecmate the consummation of the transactions contemplated hereby by Seller and/or Buyer
shall have been duty taken prior to the Closing, and Seller shall have delivered to Buyer a
certificate of a duly authorized officer of Seller to that effect, together with a certified copy of
the Seller's Certificate of Incorporation and Bylaws as in effect on the Closing Date.
8.3 Representations and Warranties. The representations and warranties of
Seller set forth in this Agreement shall be true and correct in all material respects on and as of
the Closing Date with the same effect as though all such representations and warranties have
been made on and as of such date and there shall have been delivered to Buyer a certificate to
that effect, dated the Closing Date, signed by a duly authorized officer of Seller.
8.4 Performance of Obligations. Each and all of the covenants and
agreements of Seller to be performed or complied with pursuant to this Agreement on or prior
to the Closing Date shall have been duly performed and complied with or duly waived and there
shall have been delivered to Buyer a certificate to that effect, dated the Closing Date, signed by
a duly authorized officer of the Seller.
8.5 Approvals. The final approvals or orders of the Bankruptcy Court and
the government required to be obtained pursuant to Section 10 shall be in full force and effect.
8.6 Instruments of Conveyance, Etc. Seller shall have delivered to Buyer
such bills of sale, assignments and instruments of transfer and conveyance and certificates of title
19
AROOI99I4
as shall be reasonably required by Buyer for the transfer to Buyer of all of Seller's right, title
and interest to and in the Assets.
8.7 Collective Bargaining Agreements. Any collective bargaining agreement
with a union representing any employees of the Business shall not contain a clause making such
agreement binding on successors and assigns, nor shall the Buyer have any duty to recognize
such union nor to bargain with such union regarding any employee of the Business under
applicable law or provision of such collective bargaining agreement.
8.8 Due Diligence. Buyer shall be satisfied with the results of its due
diligence investigation of Seller, and shall so notify Seller by February 8. 1996.
8.9 Delivery. On the Closing Date. Seller shall deliver physical possession
of all tangible personal property included in the Assets at 275 Geiger Road. Philadelphia;
Pennsylvania 19115 or to such other premises as Buyer shall advise Seller in writing prior to the
Closing.
8.10 Lease. On the Closing Date, Seller shall execute the lease for the real
property at 275 Geiger Road, Philadelphia, Pennsylvania, in substantially the form attached as
Exhibit B. As long as Buyer is not in default under the terms of the Lease, no party shall
dispossess Buyer of its use of the real property.
8.11 No Material Adverse Change. Prior to the Cosing Date, there shall have
been no material adverse change in the Business, nor in any of the assets used in the Business,
nor in any of the relationships between Seller and the suppliers, customers and employees of the
Business, nor in the prospects of the continuation of the Business with comparable revenues and
margins to those which previously applied.
F FlLES'.riU.CPFDOC$\ASSETPUR.::Januarv :. I99e 20
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8.12 Financing. Buyer shall have obtained adequate financing to consummate
the purchase on terms reasonably acceptable to it, including additional financing from the
issuance of convertible debt or convertible preferred stock with a private investor or investors
to supply a portion of the financing required for the purchase and for working capital purposes
with which to conduct the Business in amounts reasonably needed by the Buyer for such
purposes and on terms acceptable to it.
8.13 Other Conditions of Buyer Related to Bankruptcy. Notwithstanding
anything to the contrary in this Agreement. Buyer may but shall not be obligated to. perform
its obligations under this Agreement in the event:
a. A trustee is appointed pursuant to Title 11 of the United States
Code prior to the consummation of this Agreement; ;
b. Seller's Bankruptcy Proceeding commenced under Chapter 11 of
Title 11 of the United States Code is converted to Chapter 7 prior to the Closing of this
Agreement.
SECTION 9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
The obligation of Seller to sell or otherwise transfer the benefits of the Assets
hereunder is subject to the satisfaction, or waiver in writing by Seller, on or prior to the
Closing Date of the conditions set forth in Section 10 hereof and each of the following
conditions:
9.1 Representations and Warranties. The representations and warranties of
Buyer set forth in this Agreement shall be true and correct in all material respects on and as of
-I
flROOI996
the Closing Date with the same effect as though all such representations and warranties had been
made on and as of such date and there shall have been delivered to Seller a certificate to that
effect, dated the Closing Date, signed by a duly authorized officer of Buyer.
9:2 Execution and Delivery. The execution and delivery of this Agreement
by Buyer and consummation by Buyer of the transactions contemplated hereby shall have been
duly authorized by all necessary corporate action of Buyer, and, this Agreement and the other
documents delivered or to be delivered pursuant hereto shall constitute the valid and binding
obligations of Buyer, enforceable in accordance with their terms, except as such enforceabiliry
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws
or equitable principles from time to time in effect relating to or affecting the rights of creditors
generally; and there shall have been delivered to Seller a certificate of a duly authorized officer
of the Buyer to that effect.
9.3 Lease. On the Closing Date, Buyer will execute the lease for the real
property at 275 Geiger Road, Philadelphia, Pennsylvania, in substantially the form attached as
Exhibit B, and which is consistent with the terms of Debtor's Plan of Reorganization.
9.4 Payment. Buyer shall have paid the Purchase Price for the benefit of
Seller pursuant to the Plan subject to any further order of the Bankruptcy Court.
SECTION 10. BANKRUPTCY COURT APPROVAL
In addition to all other conditions precedent set forth herein, the obligations of
Buyer and Seller under this Agreement are conditioned upon the following:
Januarv :. 19%
flROOI997
10.1 Except as to the obligations set forth in Sections 6.1, 6.4. 11. and 14. i
hereof, (i) entry of a Final and Nonappealable Order of the Bankruptcy Court (the "Confirmation
Order"), in form and substance satisfactory to Buyer and Seller, (A) confirming a plan of
reorganization for the Seller in form and substance substantially the same as Exhibit A attached
hereto or with such changes as are agreeable to Buyer. Seller and the Banks (the "Plan") and
(B) providing that the sale of the Assets to Buyer pursuant to this Agreement is. to the fullest
extent permitted by the Bankruptcy Code, free and clear of all liens, claims, and encumbrances.
including, without limitation, any claims that might otherwise be assemble against Buyer on the
basis of any theory of successor or transferee liability, and (ii) satisfaction of each of the
conditions precedent to the effectiveness of the Plan, as set forth therein. Notwithstanding the
foregoing, nothing herein shall affect the right of any party to rely on the provisions of §363(mj
of the Bankruptcy Code and each such parry expressly reserves and preserves such right
hereunder.
SECTION 11. CONDUCT OF BUSINESS PRIOR TO CLOSING
From the date hereof to the Closing Date, and in addition to Seller's obligations
pursuant to other Sections of this Agreement. Seller will (a) conduct the Business in the ordinary
course and consistent with past practices: (b) preserve the Assets in good working order
consistent with good engineering practice: (c) consistent with efficient and economical
management, use reasonable efforts to retain the services of the present employees and agents
of the Business to the end that the goodwill of the Business will be retained and its Business
relationships with customers, suppliers and others will be preserved, and to maintain in effect
F:\F1LES-C71 U\CPFDOCS\ASSETPtTl.32Jaiitarv :. 19% 23
AROOI998
all existing qualifications. Business permits, licenses, registrations and authorizations relatinz
to the Business. From the date hereof. Seller shall not, without the prior written consent of
Buyer, (i) mortgage, pledge, sell, lease, lend or otherwise dispose of any of the Assets or
contract to do so except a sale of substantially all the Assets to a competing buyer pursuant to
an order of the Bankruptcy Coun: or (HI make or suffer to occur any material adverse change
in the Assets or any change in the usual and customary manner of conducting the Business
consistent with past practice. Prior to the Closing Date. Seller will not change its accounting
policies or procedures affecting the operation of the Business from those used in prior years.
To the extent Seller desires to enter into a transaction prohibited by this Section or to conduct
its Business otherwise than as required by this Section, Seller shall give Buyer prior written
notice describing the transaction or conduct in detail and Seller's reasons for deviation from the
requirements of this Section. Buyer shall have five Business days following receipt of both such
notice and any additional information reasonably requested by Buyer within three Business days
after receipt of the notice to accept or reject Seller's proposed action. The absence of a response
from Buyer within the time set forth above shall be deemed an acceptance of Seller's proposed
action, and Seller's engaging in such action on the express terms described in the notice will not
excuse Buyer from performing under this Agreement. If Buyer rejects such proposed action and
Seller thereafter engages in the proposed action, such action shall constitute a breach of this
Agreement, and Buyer, in its sole discretion, may terminate this Agreement, in which case
Buyer shall be entitled to a return of the Deposit.
24
flROOI999
SECTION 12. REPRESENTATIONS AND WARRANTIES DO SURVIVE
The representations and warranties made by Seller and Buyer shall survive the
Closing.
SECTION 13. COMPETITION
13.1 Seller for itself and its successors and assigns (but not for any employees
or managers) will not engage, directly or indirectly, in or become associated with any person
or entity that is engaged or intends to engage in any Business involving the fabrication of
sheetmetal components without the prior written consent of Buyer (except ownership of less than
five percent (5%) of the shares or securities of a publicly .traded corporation).
13.2 Seller agrees that if it commits or threatens to commit a breach of any of;
the covenants and agreements contained in Section 13.1, Buyer shall have the right to seek and
obtain appropriate injunctive and other equitable remedies therefor, in addition to any other
rights and remedies that may be available at law, it being acknowledged and agreed that any
such breach would cause irreparable injury to Buyer and that money damages would not provide
an adequate remedy therefor.
SECTION 14. TERMINATION: MODIFICATION OR WAIVER
14.1 Termination.
(a) This Agreement may be terminated at any time prior to the Closing:
(i) by mutual written agreement of Buyer and Seller:
25
AR002000
(ii) by Buyer or Seller, if an order is issued by the BankruptcyCourt to restrain, enjoin or prohibit the consummation o"fthe transactions contemplated by this Agreement, or in thereasonable opinion of counsel for Buyer or Seller, is likelyto occur: or
(iii) by Buyer or Seller if (A) Seller or Buyer, respectively,breaches any of its representations, warranties or covenantshereunder. (B) any condition of Seller's or Buyer's.respectively, performance hereunder fails, or (C) the Planis not confirmed or does not become effective.
(b) In the event of a termination of this Agreement other than by reason
of a breach by Buyer under Section 14.1(a)(iii) or Buyer's failure to close after all conditions
for its benefit have been satisfied, the Deposit shall be returned to Buyer; otherwise, the Deposit
shall be retained by Seller as its sole remedy for such breach or failure.
14.2 Modification. This Agreement may be amended, modified and
supplemented only by written agreement of the parties hereto.
14.3 Waiver. Any failu of Seller or Buyer to comply with any obligation,
covenant, agreement or condition contained herein may be expressly waived in writing by Buyer
in the case of any such failure by Seller or by Seller in the case of any such failure by Buyer,
but such waiver or failure to insist upon strict compliance shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires
or permits consent by or on behalf of any party hereto, such consent shall be given in writing
in a manner consistent with the requirements for a waiver of compliance as set forth in this
Section 14.3.
FJanuary :. 19% 26
flROOZOO
SECTION 15. COSTS INCIDENT TO PREPARATION OF AGREEMENT
Each of the panics hereto shall pay. without right of reimbursement from the
other, all costs incurred by it incident to the preparation, execution and delivery of this
Agreement and the performance of its obligations hereunder, whether or not the transactions
contemplated by this Agreement shall be consummated, including without limitation fees and
disbursements of legal counsel, accountants and consultants employed by the respective parties
hereto in connection with the transactions contemplated by this Agreement,
SECTION 16. PARTIES IN INTEREST AND ASSIGNMENT
16.1 This Agreement shall be binding upon, and inure to the benefit of, the
panics hereto and their respective successors and permitted assigns. This Agreement is noj
made for the benefit of any person, firm, corporation or other entity not a party hereto, and
nothing in this Agreement will be construed as giving any person, firm, corporation or other
entity, other than the parties hereto and their respective successors and permitted assigns, any
right, remedy or claim under or in respect of this Agreement, or any provision hereof.
16.2 Buyer may not assign this Agreement except to a corporation owning all
of the stock of Buyer. Seller shall not assign its rights and obligations under this Agreement
without the prior written consent of Buyer.
SECTION 17. INVESTIGATION BY BUYER
Buyer, through its agents and employees, will conduct an investigation of the
Assets and the operation of the Business. During the course of such investigation. Seller agrees
F F1LES 71U'.CPFDOCS\ASS6TPUR.3:Jonuarv :. !•*% 27
AR002002
to cause the facilities, operations, books, records, personnel and. on a best efforts basis.
accountants and attorneys of Seller to be made available for review (or interviews in the case
of personnel, accountants and attorneys) by such agents and employees and to cause to be
provided to Buyer such other information with respect to the Assets and the operation of the
Business as Buyer shall reasonably request. Seller will cooperate with Buyer to facilitate
Buyer's contacting customers and such other persons as Buyer and its representatives may
reasonably desire to contact in connection with Buyer's investigation of the operation of the
Business. Buyer must notify Seller that it has completed its due diligence investigation and is
satisfied with the results thereof no later than February 8, 1996.
SECTION 18. RISK OF LOSS; DAMAGE PRIOR TO CLOSING :
18.1 All risk of damage or loss of any son from any cause with respect to the
Assets shall remain with Seller until the Closing.
18.2 This Agreement as well as all obligations and liabilities of Seller and Buyer
hereunder shall terminate in the event of (i) a seizure by any governmental authority of all or
a material portion of the Assets, or (ii) material damage, destruction or other impairment of or
to all or a material portion of the Assets including, without limitation, damage, destruction or
other impairment caused by theft, fire, any casualty or the negligence of any person or entity
whatsoever, including Seller, if such seizure, damage, destruction or impairment shall not in
Buyer's sole opinion have been satisfactorily cured or remedied prior to the Closing Date:
F .FILES1-:? t U\CPFDOCS\ASSETPUIU:Januarv :. 19% 28
flR002003
provided, however, that nothing herein shall impose on Seller any obligation to rebuild, repair
or replace all or any portion of the Assets in the event of any such seizure, damage, destruction
or other impairment.
SECTION 19. BEST EFFORTS
Each of the panics covenants to use their best efforts to cause the satisfaction of
all conditions to Closing to be performed by them or satisfied on their pan at or prior to
Closing.
SECTION 20. CHOICE OF LAW
To the extent not covered by federal law, this Agreement shall be governed by,,
construed, interpreted and the rights of the panics determined in accordance with the laws of
the Commonwealth of Pennsylvania.
SECTION 21. WAIVER OF JURY TRIAL
Seller and Buyer hereby waive ail right to a trial by jury in any litigation relating
to this Agreement and the other documents executed in connection with the transactions
contemplated hereby.
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AR002001*
SECTION 22. MISCELLANEOUS
22.1 Any notice, request, consent, waiver or other communication required or
permitted to be given hereunder shall be effective only if in writing and shall be deemed
sufficiently given only if delivered in person or sent by telecopy, telegram, cable or by certified
or registered mail, postage prepaid, return receipt requested, addressed as follows:
If to Seller:
Lavelle Aircraft Company275 Geiger RoadPhiladelphia. PA 19115
With a copy to:
Leslie Bern Baskin. EsquireSpector, Gadon & Rosen. P.C.1700 Market Street. 29th Floor ;Philadelphia, PA 19103*3913
If to Buver:
Lavelle Company275 Geiger RoadPhiladelphia, PA 19115
With a coov to:
Peter O. Gauss, EsquireClark Ladner, Fortenbaugh & YoungOne Commerce Square2005 Market Street, 22nd FloorPhiladelphia, PA 19103
or to such other person or address as either such parry may have specified in a notice duly given
to the sender as provided herein. Such notice or communication shall be deemed to have been
given as of the date so delivered, telegraphed, cabled or mailed.
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AR002005
22.2 This Agreement (including the schedules and exhibits attached hereto) and
the document! referred to herein as having been entered into by any of the panics hereto or
delivered by a party hereto to another party hereto constitute the entire agreement and
understanding of the parties relating to the subject matter hereof and supersede all prior and
contemporaneous agreements and understandings, representations and warranties, whether oral
or written, relating to the subject matter hereof. The terms of this Agreement cannot be
changed, modified, released or discharged orally.
22.3 No delay or failure on the pan of any parry in exercising any rights
hereunder, and no partial or single exercise thereof, will constitute a waiver of such rights or
of any other rights hereunder. The rights and remedies provided in this Agreement are
cumulative and are not exclusive of any rights or remedies a party may otherwise have at law;
or in equity.
22.4 The unenforceability or invalidity of any Section or subsection or provision
of this Agreement shall not affect the enforceabiliry or validity of the balance of this Agreement.
22.5 The headings of the Sections and subsections contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning, interpretation,
enforceabiliry or validity of this Agreement.
22.6 This Agreement may be executed in any number of counterparts, each of
which so executed will be deemed to be an original, but all of which together will constitute one
and the same agreement.
22.7 Any facsimile signature of any parry hereto shall constitute a legal, valid
and binding execution hereof by such parry.
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AR002006
22.8 All covenants, agreements and other provisions contained herein or arising
out of this Agreement or otherwise in connection herewith shall survive the Cosing hereunder
and shall, except as otherwise specifically set forth in mis Agreement, continue in full force and
effect thereafter.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement co be
executed as of the date first above written.
LAVELLE COMPANY
LAVELLE AIRCRAFT COMPANY, aPennsylvania corporation
ByPresident
L tfN Jii
AR002007
22.8 All covenants, agreements and other provisions contained herein or arising
out of this Agreement or otherwise in connection herewith shall survive the Closing hereunder
and shall, except as otherwise specifically set forth in this Agreement, continue in full force and
effect thereafter.
IN WITNESS WHEREOF, the panics hereto have caused this Agreement to be
executed as of the date first above written.
LAVELLE COMPANY
By
F-nLESUTlUVCWDOCJVAttETPUlUZ:. 19%
President
LAVELLE AIRCRAFT COMPANY, aPennsylvania corporation
Bv
AR002008