Document:

Exhibit 10.1

 

AMENDMENT TO ASSET PURCHASE AGREEMENT

 

THIS AMENDMENT (this “Amendment”) to the Asset Purchase Agreement (as may be amended, supplemented or modified from time to time, the “Purchase Agreement”), dated as of December 11, 2012, by and among A123 Systems, Inc., a Delaware corporation (“A123 Systems”), the subsidiaries of A123 Systems set forth on Exhibit A to the Purchase Agreement (collectively with A123 Systems, the “Sellers”) and Navitas Advanced Solutions Group, LLC, a Michigan limited liability company (successor by assignment from Navitas Systems LLC, an Illinois limited liability company) (the “Purchaser”), is made as of January 29, 2013.  Capitalized terms used herein and not otherwise defined herein have the meanings ascribed to them in the Purchase Agreement.

 

W I T N E S S E T H :

 

WHEREAS, pursuant to the Purchase Agreement, the Sellers have agreed to sell and transfer to the Purchaser, and the Purchaser has agreed to purchase from the Sellers, certain of the assets of the Sellers used in or related to the Sellers’ USG Business; and

 

WHEREAS, the parties desire to amend the Purchase Agreement on the terms and conditions set forth in this Amendment.

 

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, and intending to be legally bound hereby, subject to the conditions and other terms herein set forth, the Sellers and the Purchaser hereby agree as follows:

 

1.             Amendment.  The Purchase Agreement is hereby amended as follows:

 

(a)           Section 2.1(a) of the Purchase Agreement is hereby amended by adding a new subsection (xvii) as follows:

 

“(xvii) all personal computers primarily used by the Transferred Employees.”

 

(b)           Section 2.2(a) of the Purchase Agreement is hereby amended by adding a new subsection (xiv) as follows:

 

“(xiv)      any backup tapes of Sellers’ electronic Books and Records or other information, or any other archival computer system back-up maintained in the ordinary course of the USG Business or the Excluded Business (collectively, the “Backup Tapes”), provided however that any embodiments of or materials related to the Purchased IP (excluding, for the avoidance of doubt, any Intellectual Property Rights excluded from the Purchased Assets pursuant to Section 2.1(b) of the Purchase Agreement) that are stored on the Backup Tapes shall constitute Purchased Assets and the Purchaser shall be entitled to request and receive any files from the Backup Tapes pursuant to reasonable requests to the Sellers or permitted transferees thereof detailing the files sought.”

 

 

(c)           Section 2.4 of the Purchase Agreement is hereby amended by deleting “$2,250,000” therein and replacing it with “$2,000,000.”

 

(d)           The second sentence of Section 5.6(c) of the Purchase Agreement is hereby amended and restated in its entirety as follows:

 

“The Purchaser shall assume and shall indemnify Sellers and their Affiliates against all liabilities and obligations to provide any payments, including, without limitation, severance and payment-in lieu of notice, or benefits to (i) any Specified Employee who does not become a Transferred Employee and who is not also a Designated Specified Employee and (ii) any Transferred Employee whose employment is terminated by the Purchaser following the Closing Date.”

 

(e)           Section 5.7 of the Purchase Agreement is hereby amended and restated in its entirety as follows:

 

“Section 5.7          Non-Solicitation.  From the date hereof until the fifth (5th) anniversary of the Closing Date, the Purchaser and its Affiliates shall not offer employment to or hire any Excluded Personnel other than the Excluded Personnel set forth on Schedule 5.7 hereto.”

 

(f)            Article V to the Purchase Agreement is hereby amended by adding thereto a new Section 5.11 as follows:

 

“Section 5.11  Back-up Tapes.

 

(a)           From and after the Closing, the Sellers shall not, and shall not instruct, cause or permit any third party to, at any time after the Closing: (1) disclose the contents of any of the Backup Tapes to any third party without the prior written consent of the Purchaser (except that Sellers may disclose to the Excluded Assets Purchaser or its Affiliates data from such Backup Tapes (other than files that relate exclusively to the Excluded Business (as defined in the Excluded Assets Purchase Agreement) or are ITAR-Controlled Assets)), except that if required by applicable Laws, Sellers may disclose the contents of such Backup Tapes, provided that Sellers notify the Purchaser of such required disclosure promptly and in writing and cooperate with the Purchaser in any lawful action to contest or limit the scope of such required disclosure, (2) transfer any of the Backup Tapes or any copy thereof to any third party without the prior written consent of the Purchaser except as provided otherwise in Section 5.11(b) in connection with direction given by the Excluded Assets Purchaser or the Purchaser (it being acknowledged and agreed by the Parties that the Backup Tapes will be stored offsite with Iron Mountain under the Sellers’ control and direction immediately after the Closing), or (3) except as provided otherwise in Section 5.11(d), delete any portion of or destroy any of the Backup Tapes without the prior written consent of the Purchaser.

 

 

(b)           Prior to the entry of a final decree closing the Sellers’ bankruptcy cases (the “Bankruptcy Closing”), the Purchaser acknowledges that the Excluded Assets Purchaser has a right to direct the Sellers to, and upon such instruction the Sellers shall, deliver the Backup Tapes to a third party designated by the Excluded Assets Purchaser.  The Sellers agree that they shall not deliver the Backup Tapes to such third party designated by the Excluded Assets Purchaser without the prior written consent of the Purchaser, such consent not to be unreasonably withheld, conditioned or delayed. Thereafter, the Purchaser shall be entitled to request and receive files from the Backup Tapes pursuant to procedures instituted with such third party that Purchaser requires for the USG Business and is entitled to access pursuant to any written agreement between the Purchaser and the Excluded Asset Purchaser, or that constitute Purchased Assets.

 

(c)           If prior to the Bankruptcy Closing the Excluded Assets Purchaser has not directed Sellers to transfer the Backup Tapes to a third party as set forth in this Section 5.11, then the Sellers shall provide at least ten (10) Business Days’ advance written notice (the “Destruction Notice”) to the Purchaser of their intention to destroy the Backup Tapes and the Purchaser shall have a right to direct the Sellers to, and upon such instruction the Sellers shall, deliver the Backup Tapes to a third party designated by the Purchaser until such date that is not later than the fifth (5th) anniversary of the date hereof, subject to the prior written consent of the Excluded Assets Purchaser, such consent not to be unreasonably withheld, conditioned or delayed.  Thereafter, the Purchaser shall only be entitled to request and receive files from the Backup Tapes pursuant to procedures instituted with such third party that Purchaser requires for the USG Business and is entitled to access pursuant to any written agreement between the Purchaser and the Excluded Asset Purchaser, or that constitute Purchased Assets.

 

(d)           If the Purchaser has not directed Sellers to transfer the Backup Tapes to a third party as set forth in the preceding sentence on or before the tenth (10th) Business Day following the Purchaser’s receipt of the Destruction Notice, then the Sellers may destroy the Backup Tapes at the Bankruptcy Closing without any further action or consent from the Purchaser.

 

(e)           All costs and expenses related to the Backup Tapes after the Closing and prior to the Bankruptcy Closing, including without limitation maintenance, storage, access, recovery work, and hosting, up to a maximum of $53,000, shall be paid by the Sellers; any additional costs and expenses will be reimbursed by the Purchaser subject to reasonable advance written notice being provided to, and prior consent to incur such costs and expenses obtained from, Purchaser.”

 

 

(g)           Schedule 1.2(a) to the Purchase Agreement is hereby amended by removing therefrom the following Contract:

 

	
Contract Number
    	
 
    	
Customer
    	
 
    	
Period of
   Performance
    	
 
    	
Contract Value
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
W56HZV-10-C-0013
    	
 
    	
TARDEC
    	
 
    	
01/28/2010-01/31/2013
    	
 
    	
$
    	
8,997,000
    	
 
    
									

 

(h)           Schedule 2.1(a)(v) to the Purchase Agreement is hereby amended by adding thereto that Equipment set forth on Schedule 1(a)(i) hereto and removing therefrom that Equipment set forth on Schedule 1(a)(ii) hereto to the extent previously included on Schedule 2.1(a)(v) to the Purchase Agreement.

 

(i)            Schedule 5.6(a) to the Purchase Agreement is hereby amended by removing therefrom the following Persons:

 

Vinit Rege

 

Quongyu Wang

 

(j)            The attached Schedule 5.7 shall be added to the Purchase Agreement as Schedule 5.7 thereto.

 

2.             No Implied Amendments.  Except as specifically amended by this Amendment, the Purchase Agreement shall remain in full force and effect in accordance with its terms and is hereby ratified and confirmed.

 

3.             Effectiveness of Amendment.  This Amendment shall be deemed to be a modification to the Purchase Agreement in accordance with Section 10.2 of the Purchase Agreement.

 

4.             Benefit of the Agreement.  This Amendment shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.

 

5.             Headings.  The headings used in this Amendment are for reference purposes only and shall not affect in any way the meaning or interpretation of this Amendment.

 

6.             Governing Law.  This Amendment shall be governed and construed in accordance with federal bankruptcy law, to the extent applicable, and, where state law is implicated, the internal laws of the State of New York, without giving effect to any principles of conflicts of law.

 

7.             Counterparts.  This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same agreement, it being understood that all of the parties need not sign the same counterpart.  Delivery of an executed counterpart of a signature page to this Amendment by

 

 

facsimile or electronic mail shall be as effective as delivery of a manually executed counterpart of this Amendment.

 

8.             References to Agreement.  On and after the date hereof, each reference in the Purchase Agreement to “this Agreement,” “hereunder,” “hereof” or words of like import referring to the Purchase Agreement shall mean the Purchase Agreement as amended by this Amendment.

 

[signatures on next page]

 

 

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed as of the day and year first above written.

 

 

	
 
    	
PURCHASER:
    
	
 
    	
 
    
	
 
    	
NAVITAS   ADVANCED SOLUTIONS GROUP, LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Nancie ElShafei
    
	
 
    	
Name:   Nancie ElShafei
    
	
 
    	
Title:   Chief Executive Officer
    

 

[signatures continued on next page]

 

[signature page to Amendment to Asset Purchase Agreement]

 

 

	
 
    	
SELLERS:
    
	
 
    	
 
    
	
 
    	
A123   SYSTEMS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   David Prystash
    
	
 
    	
Name:   David Prystash
    
	
 
    	
Title:   Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
A123   SECURITIES CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   David Prystash
    
	
 
    	
Name:   David Prystash
    
	
 
    	
Title:   Treasurer and Secretary
    
	
 
    	
 
    
	
 
    	
GRID   STORAGE HOLDINGS LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   David Prystash
    
	
 
    	
Name:   David Prystash
    
	
 
    	
Title:   Member Representative
    
	
 
    	
 
    
	
 
    	
A123   SYSTEMS KOREA CO., LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   David Prystash
    
	
 
    	
Name:   David Prystash
    
	
 
    	
Title:   Director
    

 

[signature page to Amendment to Asset Purchase Agreement]Exhibit 10.2

 

 

A123 SYSTEMS, INC.

 

CONSULTING AGREEMENT

 

THIS CONSULTING AGREEMENT (“Agreement”), made as of January 29th, 2013 (the “Effective Date”), sets forth the terms and conditions under which Eric Pyenson (“Contractor”) will provide consulting services to A123 Systems, Inc. (“A123”) with a principal office at 200 West Street, Waltham, MA 02451.

 

In consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties hereto, the parties agree as follows:

 

1.                                      Scope of Contractor’s Services.  The services to be performed by Contractor are described and identified in the Statement of Work form attached to this Agreement as Appendix A (the “Services”).

 

2.                                      Consulting Fees and Expenses.  Contractor’s fees and entitlements for the full and proper performance of this Agreement shall be as set forth in Appendix A, and fees shall be payable in installments as more fully described in Appendix A.  Contractor shall be reimbursed for all travel and other expenses incurred by Contractor in connection with or related to the performance of the Services subject to A123’s expense policies.

 

(a)                                 Independent Contractor.  It is the express intention of the parties to this Agreement that Contractor is an independent contractor and not an employee, agent, joint venturer or partner of A123 for any purposes whatsoever.  Contractor shall not be entitled to any benefits.  Contractor shall be solely responsible for all state and federal income taxes, unemployment insurance and social security taxes and for maintaining adequate workers’ compensation insurance coverage for him/herself.

 

(b)                                 Performance of Services.  Contractor shall have the right to control and determine the time, place, methods, manner and means of performing the Services.  In performing the Services, the amount of time devoted by Contractor on any given day will be entirely within Contractor’s control, and A123 will rely on Contractor to put in the necessary amount of time as is necessary to fulfill the requirements of the Agreement.

 

(c)                                  Final Results.  In the performance of the Services, Contractor has the authority to control and direct the performance of the details of the Services, A123 being interested only in the results obtained.  However, the Services contemplated herein must meet A123’s standards and approval and shall be subject to the Company’s general right of inspection and supervision to secure their satisfactory completion.

 

 

3.                                      Non-Disclosure.

 

(a)                                 In the course of providing the Services and at all times thereafter, Contractor will maintain as strictly confidential all Confidential Information (as defined below) which Contractor may access, create, or obtain in the course of providing the Services, and Contractor will not (nor will Contractor assist any other person or entity to), directly or indirectly: (i) reveal, report, publish or disclose such Confidential Information to any person or entity for any reason (other than in the course of performing the Services, as expressly authorized by A123); or (ii) use such Confidential Information, except as reasonably required by Consultant’s performance of the Services or otherwise authorized in writing by A123.  The foregoing will not apply to the extent Contractor is required to disclose any Confidential Information by applicable law or legal process so long as Contractor promptly notifies A123 of such pending disclosure and consults with A123 prior to such disclosure concerning the advisability of seeking a protective order or other means of preserving the confidentiality of the Confidential Information.

 

(b)                                 “Confidential Information” shall mean all trade secrets or confidential or proprietary information designated as such in writing by A123, whether by letter or by the use of an appropriate proprietary stamp or legend, prior to or at the time any such trade secret or confidential or proprietary information is disclosed by A123 to Contractor.  Notwithstanding the foregoing, information which is orally or visually disclosed to Contractor by A123, or is disclosed in writing without an appropriate letter, proprietary stamp or legend, shall constitute Confidential Information if (i) it would be apparent to a reasonable person, familiar with A123’s business and the industry in which it operates, that such information is of a confidential or proprietary nature the maintenance of which is important to A123 or if (ii) A123, within 30 days after such disclosure, delivers to Contractor a written document or documents describing such Confidential Information and referencing the place and date of such oral, visual or written disclosure and the names of the representatives of Contractor to whom such disclosure was made.  In addition, the term “Confidential Information” shall be deemed to include:  (a) any notes, analyses, compilations, studies, interpretations, memoranda or other documents prepared by Contractor or Contractor’s representatives which contain, reflect or are based upon, in whole or in part, any Confidential Information furnished to Contractor or its representatives pursuant hereto; and (b) the existence or status of, and any information concerning, the discussions between the parties concerning the possible establishment of a business relationship.

 

Contractor also acknowledges that clients and vendors of A123 furnish to A123 information concerning their respective business affairs, finances, properties, methods of operation or other data which are not public and which are proprietary or confidential.  Accordingly, Confidential Information also includes any information described above which A123 obtains from another party and which A123 treats and/or has an obligation to treat as confidential or designates as Confidential Information, whether or not owned or developed by A123.  Except for Confidential Information disclosed to Contractor by A123, Contractor agrees not to use the confidential information of any third party in the performance of Services hereunder.

 

The provisions of this Section 3 are necessary for the protection of the business and goodwill of A123 and are considered by Contractor to be reasonable for such purpose.  Contractor agrees that any breach will cause A123 substantial and irreparable injury and,

 

 

therefore, in the event of any such breach, in addition to other remedies which may be available, A123 shall have the right to specific performance and other injunctive and equitable relief.

 

4.                                      Term of Agreement.

 

(a)                                 This Agreement shall become effective as of the Effective Date and shall remain in effect for a period of 12 months, unless terminated by either party as set forth below.

 

(b)                                 This Agreement may be terminated at any time (i) upon the mutual written consent of the parties hereto or (ii) by either party, for any reason, upon fifteen (15) days written notice; provided, however, that A123 shall not be entitled to terminate under this subsection (b)(ii) until after April 30, 2013, unless such termination is for cause.

 

(c)                                  Following the termination or expiration of this Agreement, no further Services shall be provided hereunder.  Contractor shall be entitled only to payment for Services performed prior to the effective date of termination, and such payment shall constitute full settlement of any and all claims of Contractor of every description against A123 under this Agreement. All other provisions of this Agreement shall remain in full force and effect.

 

5.                                      Evidence of Federal Tax Return Filing.  Contractor agrees to furnish to A123, by no later than May 15 of the year after the calendar year in which fees hereunder are paid, evidence that the income received from A123 for independent contractor services was reported consistent with the reporting requirements of an independent contractor.  A123 shall file Form 1099 to report the fees paid to Contractor.

 

6.                                      General.

 

(a)                                 This Agreement is the entire agreement of the parties, on the subject hereof, and supersedes all previous communications.  No waiver or modification of its provisions shall be effective without a writing signed by the party against whom such waiver or modification is sought to be enforced.

 

(b)                                 The invalidity of any provision of this Agreement shall not affect the validity of any other provision hereof.  In the event that the terms of any provision hereof are determined by a court of competent jurisdiction to be unenforceable, such provision shall be enforced to the extent that it is legally enforceable.

 

(c)                                  This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, USA.  The parties hereby agree that the courts located in the Commonwealth of Massachusetts, USA, shall constitute the sole and exclusive forum for the resolution of any and all disputes arising under, out of, or in connection with this Agreement and hereby consent to the jurisdiction of such courts and irrevocably waive any objections thereto, including, without limitation, on grounds of improper venue or forum non conveniens.

 

(d)                                 Contractor agrees that, upon the completion of the provision of Services to A123 or upon request by A123, Contractor will deliver promptly to A123 all property belonging

 

 

to, prepared by, purchased by, or held in the custody of A123, as well as all Confidential Information, and Consultant further agrees not to make, retain, or distribute copies thereof.

 

IN WITNESS WHEREOF, the parties have duly executed this Agreement under seal as of the date first set forth above.

 

	
CONTRACTOR
    	
 
    	
A123   SYSTEMS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Eric Pyenson
    	
 
    	
By:
    	
/s/   David Vieau
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
1/30/13
    	
 
    	
Date:
    	
1/30/13
    

 

 

APPENDIX A

STATEMENT OF WORK

 

This Statement of Work #1 is entered into between A123 Systems, Inc. (“A123”) and Contractor pursuant to the Consulting Agreement between A123 and Contractor dated January 29th, 2013 and shall be in all respects subject to the terms and conditions of said Consulting Agreement, which are incorporated herein by reference.  The terms and conditions below may be revised by mutual agreement in future Statements of Work.

 

DESCRIPTION OF SERVICES AND PROJECT MILESTONES

 

Contractor shall serve as A123 Systems, Inc.’s General Counsel and will perform such services as are necessary and normally associated with such position, in connection with the wind down, closing and liquidation of A123 Systems, Inc.’s estate in Chapter 11 bankruptcy (Case No. 12-12859), including, without limitation, (i) ensuring A123’s compliance with applicable law, (ii) continuing performance of A123’s duties as a debtor in possession, (iii) reviewing, reconciling and assisting with objections to proofs of claim filed against A123; (iv) assisting with any post-closing issues under the asset purchase agreements entered into by A123; (v) supporting the effort to file a disclosure statement and plan of liquidation, obtain approval of the disclosure statement and obtain confirmation of the plan, and (vi) supporting the effort to bring about the occurrence of the effective date of the confirmed plan (the “Services”).  The Services performed shall commence on January 30, 2013 and shall continue until April 30, 2013, unless otherwise extended by written agreement of the parties, including any mutually agreed terms and conditions (“Service Period”).

 

COMPENSATION

 

Contractor will be compensated for the performance of Services during the Service Period as follows:

 

Contractor shall provide 40 hours of services per calendar week and shall be paid a fixed rate of $30,600 per month in arrears for the consulting services (“Monthly Consulting Fee”). Contractor shall be paid 50% of the Monthly Consulting Fee on the 15th day of the month and 50% of the Monthly Consulting Fee on the last of the Month. Any partial month of services will be compensated on a pro-rata basis to be calculated by dividing the monthly rate by the number of week days in the applicable month to determine the applicable daily rate.

 

At all times during the Service Period A123 shall provide Contractor with directors and officers liability insurance (“D&O”) commensurate with the level of D&O insurance maintained by A123 on its officers on the date hereof, including, for the avoidance of doubt, the benefits of all “wind down” and “tail” endorsements being provided under such policies. Additionally, during the Service Period A123 will indemnify Contractor as an officer under its Bylaws and Articles of

 

 

Incorporation and Contractor will be entitled to indemnification to the fullest extent permitted under applicable Delaware law.

 

Contractor shall also be allowed to use his current laptop computer and Blackberry device as well as be provided with an office at A123’s Waltham, MA facility and all telephone, Internet, copying and other office amenities reasonably necessary to perform the Services.

 

Acknowledged and agreed:

 

	
CONTRACTOR
    	
 
    	
A123   SYSTEMS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Eric Pyenson
    	
 
    	
By:
    	
/s/   David Vieau
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
1/30/13
    	
 
    	
Date:
    	
1/30/13

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