Asset Sale and Purchase Agreement - Orbital Sciences Corp. and Smiths Industries Aerospace & Defense Systems Inc.
EXECUTION COPY
ASSET SALE AND PURCHASE AGREEMENT
BY AND BETWEEN
ORBITAL SCIENCES CORPORATION,
SIJAG ACQUISITION INC.,
A SUBSIDIARY OF SMITHS INDUSTRIES AEROSPACE & DEFENSE SYSTEMS INC.
AND
SMITHS INDUSTRIES AEROSPACE & DEFENSE SYSTEMS INC.
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TABLE OF CONTENTS
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1. SALE AND PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES................1
1.1. Agreement to Sell and Purchase.................................1
1.2. Purchased Assets...............................................1
1.3. Excluded Assets................................................3
1.4. Assumption of Liabilities......................................3
2. CLOSING; DELIVERIES...................................................4
2.1. Closing........................................................4
2.2. Deliveries at the Closing......................................4
3. PURCHASE PRICE........................................................5
3.1. Purchase Price.................................................5
3.2. Payment of Purchase Price......................................5
3.3. Risk of Loss...................................................5
3.4. Closing Date Working Capital Adjustment........................5
3.5. Post-Closing Adjustment........................................6
4. REPRESENTATIONS AND WARRANTIES OF SELLER..............................7
4.1. Organization...................................................7
4.2. Corporate Authority............................................7
4.3. No Conflict....................................................8
4.4. Consents.......................................................8
4.5. Financial Statements...........................................8
4.6. Taxes..........................................................9
4.7. Absence of Changes.............................................9
4.8. Litigation; Disputes..........................................10
4.9. Legal Compliance; Governmental Approvals and Consents.........11
4.10. Assets........................................................11
4.11. Seller Contracts..............................................11
4.12. Government Contracts..........................................13
4.13. Inventories...................................................14
4.14. Product Warranties............................................14
4.15. Intellectual Property.........................................14
4.16. Environmental Matters.........................................15
4.17. Employees.....................................................16
4.18. Pension and Benefit Plans.....................................16
4.19. Transactions with Related Parties.............................17
4.20. No Broker.....................................................17
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4.21. Disclaimer....................................................18
4.22. Notes and Accounts Receivable.................................18
4.23. Insurance.....................................................18
4.24. Customers and Suppliers.......................................18
5. REPRESENTATIONS AND WARRANTIES OF BUYER..............................18
5.1. Organization..................................................18
5.2. Corporate Authority...........................................19
5.3. No Conflict...................................................19
5.4. Consents......................................................19
5.5. Litigation....................................................19
5.6. Brokers.......................................................19
5.7. Solvency......................................................20
5.8. Inspections; Limitations on Seller's Warranties...............20
5.9. Financing.....................................................20
5.10. Disclaimer....................................................20
6. COVENANTS OF SELLER PENDING CLOSING..................................20
6.1. Conduct of Business...........................................20
6.2. Forbearances..................................................21
6.3. Updates.......................................................21
7. ADDITIONAL COVENANTS AND AGREEMENTS..................................21
7.1. Access and Confidential Information...........................21
7.2. Consents; Satisfaction of Closing Conditions..................22
7.3. Assignment of Contracts and Rights............................22
7.4. Letters of Credit; Surety Bonds...............................23
7.5. Employment; Employee Benefits.................................24
7.6. Tax Returns...................................................26
7.7. Liability for Transfer Taxes..................................26
7.8. Orbital Name..................................................27
7.9. Post Closing Receipts; Cooperation............................27
7.10. Books and Records.............................................28
7.11. Noncompetition................................................28
8. MUTUAL CONDITIONS PRECEDENT TO OBLIGATIONS TO CLOSE..................29
8.1. Absence of Litigation.........................................29
8.2. Statutory Requirements........................................29
9. CONDITIONS TO BUYER'S OBLIGATION TO CLOSE............................29
9.1. Representations and Warranties................................29
9.2. Performance...................................................29
9.3. Seller Consents...............................................29
9.4. No Material Adverse Effect....................................29
9.5. Sublease......................................................30
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9.6. Services Agreement and Manufacturing Agreement................30
9.7. Assignment and Assumption of Leases...........................30
9.8. Seller's Closing Documents....................................30
10. CONDITIONS TO SELLER'S OBLIGATIONS TO CLOSE..........................30
10.1. Representations and Warranties................................30
10.2. Performance...................................................31
10.3. Sublease......................................................31
10.4. Services Agreement and Manufacturing Agreement................31
10.5. Assignment and Assumption of Leases...........................31
10.6. Buyer's Closing Documents.....................................31
11. ACTION TO BE TAKEN AT CLOSING........................................31
11.1. Action to be Taken by Seller..................................31
11.2. Action to be Taken by Buyer...................................32
11.3. Payment of Purchase Price.....................................32
11.4. Effective Time................................................32
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES...........................32
13. INDEMNIFICATION......................................................33
13.1. Indemnification of Buyer......................................33
13.2. Indemnification of Seller.....................................33
13.3. Matters Involving Third Parties...............................34
13.4. Limitation of Liability.......................................34
13.5. Exclusive Remedy..............................................35
13.6. Treatment of Indemnification Payments.........................35
14. TERMINATION..........................................................35
14.1. Termination...................................................35
14.2. Effect of Termination.........................................36
15. MISCELLANEOUS........................................................36
15.1. Certain Definitions...........................................36
15.2. Written Agreement to Govern...................................43
15.3. Severability..................................................43
15.4. Notices and Other Communications..............................43
15.5. Counterparts..................................................44
15.6. Law to Govern.................................................44
15.7. Successors and Assigns........................................44
15.8. Interpretation................................................44
15.9. Schedules and Exhibits........................................45
15.10. Publicity.....................................................45
15.11. Modification..................................................45
15.12. Waiver of Provisions..........................................45
15.13. Expenses......................................................45
15.14. Further Assurances............................................45
15.15. Bulk Transfer Laws............................................46
15.16. Parent Guarantee..............................................46
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SCHEDULES AND EXHIBITS
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SCHEDULE 1.2(a) Tangible Property
SCHEDULE 1.2(d) Real Property
SCHEDULE 1.2(h) Software
SCHEDULE 1.2(i) Licenses
SCHEDULE 1.3(d) Excluded Software and Intellectual Property
SCHEDULE 1.3(f) Excluded Seller Contracts
SCHEDULE 1.3(i) Miscellaneous Excluded Assets
SCHEDULE 1.4 Intercompany Accounts Payable
SCHEDULE 4.3 Conflicting Agreements
SCHEDULE 4.4 Consents
SCHEDULE 4.5 Financial Statements
SCHEDULE 4.6(a) Contested Taxes
SCHEDULE 4.6(c) Taxes Under Audit
SCHEDULE 4.7 Absence of Changes
SCHEDULE 4.8 Litigation
SCHEDULE 4.9(b) Governmental Approvals
SCHEDULE 4.10(a) Assets - Title
SCHEDULE 4.10(b) Assets - Operation of Business
SCHEDULE 4.10(c) Assets - Condition
SCHEDULE 4.11(a) Seller Contracts
SCHEDULE 4.11(b) Pending Seller Contracts
SCHEDULE 4.12(a) Government Contracts
SCHEDULE 4.12(b) Pending Government Contracts
SCHEDULE 4.12(e) Claims
SCHEDULE 4.12(f) Loss Bids
SCHEDULE 4.14 Product Warranties
SCHEDULE 4.15(a) Intellectual Property
SCHEDULE 4.15(b) Intellectual Property Consents
SCHEDULE 4.15(c) Intellectual Property Claims
SCHEDULE 4.16 Environmental Matters
SCHEDULE 4.17(a) Existing Employees
SCHEDULE 4.18(a) Plans and Other Arrangements
SCHEDULE 4.19 Transactions with Related Parties
SCHEDULE 4.23 Insurance Policies
SCHEDULE 7.4 Letters of Credit and Surety Bonds
SCHEDULE 7.5(f) Retention Plans
EXHIBIT A Form of Assumption Agreement
EXHIBIT B Form of Bill of Sale
EXHIBIT C Form of Sublease
EXHIBIT D Form of Services Agreement
EXHIBIT E Form of Assignment and Assumption of Lease
EXHIBIT F Form of Manufacturing Agreement
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ASSET SALE AND PURCHASE AGREEMENT
THIS ASSET SALE AND PURCHASE AGREEMENT (this "AGREEMENT") is
entered into as of this 26th day of September, 2000 by and between ORBITAL
SCIENCES CORPORATION, a Delaware corporation ("ORBITAL" or "SELLER"), SIJAG
ACQUISITION INC., a Delaware corporation ("BUYER") and wholly owned subsidiary
of Smiths Industries Aerospace & Defense Systems Inc., and SMITHS INDUSTRIES
AEROSPACE & DEFENSE SYSTEMS INC. ("PARENT").
RECITALS
WHEREAS, Seller, among other things, conducts a business through
its Fairchild Defense division pursuant to which it designs, produces and
integrates sophisticated electronics, avionics and mission management systems in
Germantown, Maryland for use in military aircraft, helicopters and land vehicles
(the "DIVISION");
WHEREAS, Buyer desires to purchase from Seller, and Seller desires
to sell to Buyer, all of the properties, assets, business operations,
liabilities and goodwill of Seller used in the Division, except for the Excluded
Assets and Excluded Liabilities (as defined in SECTIONS 1.3 and 1.4,
respectively) (the "BUSINESS"); and
WHEREAS, defined terms used in this Agreement have the meanings
ascribed to them by definition in SECTION 15.1, except as otherwise expressly
provided.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties hereto hereby
agree as follows:
1. SALE AND PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES
1.1. AGREEMENT TO SELL AND PURCHASE.
Subject to the terms and conditions hereof and in reliance upon
the representations, warranties, covenants and agreements contained herein, at
the Closing, Seller shall sell, assign, transfer, convey and deliver to Buyer,
and Buyer shall purchase from Seller, the Purchased Assets.
1.2. PURCHASED ASSETS.
For purposes of this Agreement, "PURCHASED ASSETS" means all
right, title, benefit and interest of Seller, relating primarily to the
Division, to the extent set forth below, subject to SECTION 1.3, wherever
situated and as the same exists on the Closing Date (as defined in ARTICLE 2),
including, without limitation:
(a) all the furniture, fixtures, furnishings, machinery,
computers, equipment (mobile or otherwise), inventory, office materials and
other tangible property of every kind and description used primarily in the
Business, including, without limitation, those described in SCHEDULE 1.2(a);
(b) (i) all Contracts relating primarily to the Business,
including, without limitation, those described in SCHEDULES 4.11(a) and 4.12(a);
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(ii) all accounts receivable, notes receivable, prepaid
expenses, and deposits from customers of the Business, all purchase orders
placed by customers for services or products of the Business to the extent the
same remain unfulfilled on the Closing Date and all orders for materials and
supplies which were placed by Seller for the Business with suppliers and which
remain unfulfilled on the Closing Date;
(iii) Seller's rights under all pending written bids for
all contracts relating primarily to the Business, including, without limitation,
those described in SCHEDULE 4.11(a) (collectively, "BIDS");
(c) all know-how, formulas, technical information, engineering
and technical data, trade secrets, working knowledge, unpatented inventions,
research and development data, designs, techniques, technologies and procedures
used primarily in the Business (the "KNOW-HOW") and all Seller's rights under
Contracts with any present or past employees, independent contractors or
consultants with respect to (i) the non-disclosure of Know-How, or (ii) the
assignment to Seller of such Person's rights to any Know-How;
(d) all the real property used in the Business, including the
Fairchild Leases, leaseholds, leases, subleases, easements and other interests
of every kind and description in real property, buildings, structures, fixtures,
appurtenances (including appurtenant rights in and to all streets, roads and
public places, open or proposed), towers and antennae, and other improvements
thereon, as set forth in SCHEDULE 1.2(d) (collectively, the "REAL PROPERTY");
(e) all rights and claims of Seller related primarily to the
Business, whether known or unknown, absolute or contingent, matured or
unmatured, or otherwise, against third parties, whether in tort, contract, or
otherwise, including, without limitation, causes of action, unliquidated rights
and claims under or pursuant to all warranties, representations and guarantees
made by manufacturers, suppliers or vendors;
(f) to the maximum extent permitted by Applicable Law, permits,
approvals, orders, authorizations, consents, licenses, certificates, franchises,
exemptions of, or filings or registrations with, any Governmental Authority in
any jurisdiction, which have been issued or granted to or are owned or used by
Seller primarily in connection with the Business and all pending applications
therefor as described in SCHEDULE 4.9(b);
(g) goodwill and going concern value and all client and
supplier lists related primarily to the Business;
(h) all computer software, other than COTS, used primarily in
connection with the Business, wherever situated and as the same exists on the
Closing Date, including the computer software described and set forth in
SCHEDULE 1.2(h), including all databases, software codes (both source and
object), functional and design documentation, maintenance documentation, all
programmers' notes with respect thereto, all automated test software code, and
all training manuals and other information relating thereto and all licenses of
computer software held by Seller, including without limitation, those described
and set forth in SCHEDULE 1.2(h) (the "SOFTWARE"); and
(i) all Intellectual Property relating primarily to the
Business, including, without limitation, all rights of Seller to the Fairchild
Defense name and all Intellectual Property described in
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SCHEDULE 4.15(a), subject to rights held by the U.S. Government and any other
third parties that have been licensed by Seller prior to the Closing Date.
1.3. EXCLUDED ASSETS.
Notwithstanding SECTION 1.2 or anything to the contrary in this
Agreement, the following assets of Seller related to the Division (collectively,
the "EXCLUDED ASSETS") shall be excluded from the definition of Purchased Assets
and retained by Seller to the extent in existence at 12:01 a.m. (Eastern
Standard Time) on the Closing Date:
(a) all claims for refunds of any Taxes for all periods ending
on or prior to the Closing Date;
(b) the articles of incorporation, by-laws, minute books, stock
transfer records and other corporate records of Seller;
(c) all insurance policies and any unearned premiums thereunder
or other rights to refunds thereunder;
(d) all Orbital Name Rights (as defined in SECTION 7.8) and the
computer software and Intellectual Property set forth on SCHEDULE 1.3(d);
(e) all COTS;
(f) the Seller Contracts and Government Contracts (or portions
thereof) set forth on SCHEDULE 1.3(f);
(g) cash, cash equivalents and marketable securities;
(h) all books, records, accounts, checks, payment records,
personnel files, Tax records (including payroll, unemployment, real estate and
other Tax records) and other similar books, records and information of Seller;
and
(i) the assets set forth on SCHEDULE 1.3(i).
1.4. ASSUMPTION OF LIABILITIES.
(a) Subject to the terms and conditions set forth herein, at
the Closing, Buyer shall assume and shall agree to pay, honor and discharge when
due those liabilities relating to the Division and existing at or arising on or
after 12:01 a.m. (Eastern Standard Time) on the Closing Date set forth below
(collectively, the "ASSUMED LIABILITIES"):
(i) any and all liabilities, obligations and commitments
relating to the Business or the Purchased Assets that are (i) reflected on the
Interim Balance Sheet or (ii) incurred after the Interim Balance Sheet Date (as
defined in SECTION 4.5) in the ordinary course of business, consistent with past
practice and in accordance with the terms of this Agreement;
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(ii) any and all liabilities, obligations and commitments
arising out of the Fairchild Leases, the Sublease, Seller Contracts and
Government Contracts included as part of the Purchased Assets; and
(iii) liabilities for Transferred Employees to the extent
accrued on the Financial Statements or specifically assumed by Buyer pursuant to
SECTION 7.5, including, without limitation, retention bonuses for senior
management in the amount of $726,846.
The Assumed Liabilities shall be assumed at the Closing by Buyer's execution and
delivery of a document of assumption in the form attached hereto as EXHIBIT A.
(b) Except as specifically provided in this SECTION 1.4, Buyer
shall not assume or be responsible for any liabilities or obligations of Seller,
including, without limitation, any liability or obligation (A) for Taxes
relating to, arising out of, occurring, or with respect to any period on or
prior to the Closing Date, (B) relating to employees or employee benefit plans
except to the extent accrued on the Financial Statements or specifically assumed
by Buyer pursuant hereto, (C) for intercompany accounts payable which do not
represent trade accounts payable and are set forth on SCHEDULE 1.4, (D) whether
known or unknown, arising out of or relating to any Hazardous Substance, any
violation of any Environmental Law or any Environmental Permit or any other
environmental matter, in each case, to the extent existing prior to the Closing,
except with respect to the Fairchild Leases, (E) for any of the matters required
by SECTION 4.8 to be disclosed on SCHEDULE 4.8, except that Buyer shall have the
benefit of any settlement with respect to the matter described on such schedule
involving Lemelson Medical, Education & Research Foundation, Limited Partnership
and (F) for any indebtedness related to the Business other than trade
indebtedness incurred in the ordinary course of business and the long term
capital lease obligations described on the Interim Balance Sheet (collectively,
the "EXCLUDED LIABILITIES").
2. CLOSING; DELIVERIES
2.1. CLOSING.
The consummation of the transactions contemplated in ARTICLE 1
(the "CLOSING") shall take place at 10:00 a.m. on the date three business days
following the satisfaction or waiver of the conditions set forth in ARTICLE 8,
ARTICLE 9, ARTICLE 10 and ARTICLE 11 (or at such other time and date as the
parties hereafter agree in writing) (the "CLOSING DATE"). The parties hereto
shall use commercially reasonable efforts to cause the Closing Date to occur not
later than the close of business on October 30, 2000. The Closing shall be
effective as of 12:01 a.m. on the Closing Date.
2.2. DELIVERIES AT THE CLOSING.
At the Closing, (i) Seller will deliver to Buyer the various
certificates, instruments, and documents referred to in SECTION 11.1, (ii) Buyer
will deliver to Seller the various certificates, instruments, and documents
referred to in SECTION 11.2, and (iii) Buyer will deliver to Seller the
consideration specified in SECTION 3.1 in accordance with SECTION 3.2.
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3. PURCHASE PRICE
3.1. PURCHASE PRICE.
For and in consideration of the conveyances and assignments
described herein and in addition to the assumption of Assumed Liabilities as
provided in SECTION 1.4 hereof, Buyer agrees to pay to Seller, and Seller agrees
to accept from Buyer, an aggregate cash purchase price equal to One Hundred
Million U.S. Dollars (U.S. $100,000,000) (as such purchase price may be adjusted
pursuant to SECTIONS 3.3, 3.4 and/or 3.5 the "PURCHASE PRICE").
3.2. PAYMENT OF PURCHASE PRICE.
Buyer agrees to pay to Seller the Purchase Price by bank draft,
certified check or by wire transfer or delivery of immediately available U.S.
funds to a bank account designated by Seller at the Closing; provided, however,
that Buyer shall retain $2,000,000 of the Purchase Price (the "RETENTION") until
a final determination of the Final Net Working Capital Amount. Seller agrees to
provide to Buyer wire transfer instructions for payment of the Purchase Price
not less than five (5) business days prior to the Closing Date.
3.3. RISK OF LOSS.
The risk of loss or damage by fire or other casualty or cause to
the Purchased Assets or the Business until the Closing Date shall be upon
Seller. In the event of such loss or damage prior to the Closing Date, Seller
shall promptly give Buyer notice thereof and Buyer will have the option:
(a) to reduce the Purchase Price by an amount equal to the cost
of repair or, if appropriated, expropriated, seized, destroyed or damaged beyond
repair, by an amount equal to the replacement cost of such assets and to
complete the purchase, in which event, Seller shall be entitled to all proceeds
of insurance and all proceeds and claims relating to the applicable event;
(b) to reduce the Purchase Price by an amount equal to the
deductible amounts of the relevant insurance policies and to complete the
purchase, in which event, all proceeds of insurance paid to Seller and all right
and claims of Seller to any such amounts not paid by the Closing Date shall be
assigned to Buyer; or
(c) to terminate the Agreement if there is a Material Adverse
Effect on the Business.
3.4. CLOSING DATE WORKING CAPITAL ADJUSTMENT.
No later than five business days prior to the Closing Date, Seller
shall deliver to Buyer a good faith estimate of the Net Working Capital of the
Business as of the Closing Date (the "ESTIMATED NET WORKING CAPITAL AMOUNT"),
together with documentation to support the numbers proposed. In the event that
the Estimated Net Working Capital Amount exceeds, or is less than, the Target
Working Capital, then the Purchase Price payable on the Closing Date shall be
increased or reduced, as applicable, by the amount the Estimated Net Working
Capital Amount exceeds or is less than the Target Working Capital.
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3.5. POST-CLOSING ADJUSTMENT.
(a) Within ninety (90) days after the Closing Date, Seller will
prepare (with the assistance of its independent certified public accountants if
Seller so elects ("SELLER'S AUDITORS")) and present to Buyer a calculation of
the Net Working Capital of the Business as of the Closing Date (the "PROPOSED
NET WORKING CAPITAL AMOUNT"), which shall be prepared consistent with the Target
Working Capital so that it presents fairly the Net Working Capital of the
Business as of the Closing Date using accounting methods, practices and
procedures as used in the preparation of the Target Working Capital. Buyer and,
if Buyer elects, a firm of independent certified public accountants selected by
Buyer (the "BUYER'S AUDITORS"), shall be given, together with the Proposed Net
Working Capital Amount, the workpapers and access to the books, records and
personnel of Seller and, if applicable, Seller's Auditors (the "WORKPAPERS"),
utilized in preparing the Proposed Net Working Capital Amount for purposes of
verifying the accuracy thereof. The Proposed Net Working Capital Amount shall be
binding upon the parties to this Agreement unless Buyer gives written notice of
disagreement with any of the values or amounts contained therein to Seller
within thirty (30) days after its receipt of the Proposed Net Working Capital
Amount and the Workpapers specifying in reasonable detail the nature and extent
of such disagreement. If Seller and Buyer mutually agree upon the Proposed Net
Working Capital Amount within thirty (30) days after Buyer's delivery of such
notice of disagreement, such agreement shall be binding upon the parties hereto
for purposes of this Agreement. If Seller and Buyer are unable to resolve any
such disagreement within such period, the disagreement shall be referred for
final determination to Ernst & Young L.L.P. (the "FIRST CHOICE") or, if such
firm is not available, such other independent accounting firm of national
reputation selected by the mutual agreement of Seller and Buyer (the "SELECTED
FIRM") and the resolution of the disagreement by the First Choice or the
Selected Firm, as the case may be, shall be final and binding upon the parties
hereto for purposes of this Agreement. If Seller and Buyer cannot agree on the
Selected Firm, it shall be chosen by the First Choice and shall be a nationally
recognized firm other than any accounting firm that has audited or been engaged
to audit the financial statements of Buyer or Seller within the two years
preceding the date of this Agreement. The Proposed Net Working Capital Amount as
finally determined is referred to herein as the "FINAL NET WORKING CAPITAL
AMOUNT." The fees and disbursements, if any, of Buyer's Auditors incurred in the
preparation of the Proposed Net Working Capital Calculation shall be paid by
Buyer. Seller shall pay the fees and disbursements, if any, of the Seller's
Auditors. The fees and disbursements, if any, of the First Choice or the
Selected Firm, as the case may be, shall be paid by Buyer and Seller, as the
First Choice or the Selected Firm, as the case may be, shall determine based
upon its assessment of the relative merits of the positions taken by each in any
disagreement presented to such firm.
(b) In the event the Final Net Working Capital Amount exceeds
the Estimated Working Capital Amount by more than $250,000, then within five (5)
business days after the final determination of the Final Net Working Capital
Amount, Buyer shall pay to Seller the difference between the Final Net Working
Capital Amount and the Estimated Net Working Capital Amount plus the Retention
(together with interest thereon at a rate of interest of three-month LIBOR as in
effect on the Closing Date from the Closing Date until the date of such
reimbursement) in immediately available funds by wire transfer to a bank account
designated in writing by Seller prior to the due date thereof.
(c) In the event the Estimated Net Working Capital Amount
exceeds the Final Net Working Capital Amount by more than $250,000, then within
five (5) business days after the final determination of the Final Net Working
Capital Amount, (i) Seller shall pay to Buyer the difference between the
Estimated Working Capital Amount and the Final Net Working Capital Amount and
(ii) Buyer shall pay to Seller the Retention (in the case of clauses (i) and
(ii) above, together with interest thereon at a rate of interest of three-month
LIBOR as in effect on the Closing Date from the Closing Date
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until the date of such reimbursement), in immediately available funds by wire
transfer to a bank account designated in writing by Buyer prior to the due date
thereof.
3.6. PURCHASE PRICE ALLOCATION.
(a) Buyer and Seller shall agree upon an allocation of the
Purchase Price among the Purchased Assets consistent with Section 1060 of the
Code and the Treasury Regulations thereunder within 30 days after the Closing
Date. If Buyer and Seller cannot agree on any such allocation, such dispute
shall be resolved in accordance with SECTION 3.5(b). The allocation required by
this SECTION 3.6 shall be revised based on any adjustment to the Purchase Price
pursuant to SECTION 3.6 within ten days after the final determination of the
Final Net Working Capital Amount. Each of Buyer and Seller agrees to file Form
8594 as required by Section 1060 of the Code, and all federal, state, local and
foreign Tax Returns, in accordance with any such agreed allocation as adjusted
as provided herein. Each of Buyer and Seller shall report the transactions
contemplated by this Agreement for federal Tax and all other Tax purposes in a
manner consistent with any such allocation determined pursuant to this SECTION
3.6. Each of Buyer and Seller agrees to provide the other promptly with any
information required to complete the Form 8594. Buyer and Seller shall notify
and provide the other with reasonable assistance in the event of an examination,
audit or other proceeding regarding any allocation of the Purchase Price
determined pursuant to this SECTION 3.6. Buyer and Seller shall not take any
position in any Tax Return, Tax proceeding or audit that is inconsistent with
such allocation.
(b) In the event that a dispute arises between Seller and Buyer
as to any allocation of Purchase Price under SECTION 3.6(a), Buyer and Seller
shall attempt in good faith to resolve such dispute. If such dispute is not
resolved within 30 days thereafter, Buyer and Seller shall submit the dispute to
the First Choice or the Selected Firm, as the case may be, for resolution with
each party presenting its position, which resolution shall be final, conclusive
and binding on Buyer and Seller. Notwithstanding anything in this Agreement to
the contrary, the fees and expenses of the First Choice or the Selected Firm, as
the case may be, in resolving the dispute shall be borne equally by Buyer and
Seller.
4. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer, on the date hereof and on
the Closing Date, as follows:
4.1. ORGANIZATION.
Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Seller has all necessary
corporate power and authority to own its properties and to carry on its business
and to enter into and perform its obligations under this Agreement, the other
Seller Documents and the transactions contemplated hereby and thereby.
4.2. CORPORATE AUTHORITY.
The execution, delivery and performance by Seller of this
Agreement and the other Seller Documents and the consummation by Seller of the
transactions contemplated hereby and thereby have been or will be duly
authorized by all requisite corporate action on the part of Seller. This
Agreement has been duly executed and delivered by Seller and constitutes, and
upon execution and
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delivery of each of the other Seller Documents, such other Seller Documents will
constitute, the legal, valid and binding obligation of Seller enforceable in
accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and subject to general principles of
equity.
4.3. NO CONFLICT.
Except as set forth in SCHEDULE 4.3, neither the execution and
delivery by Seller of this Agreement or the other Seller Documents nor the
consummation of the transactions contemplated hereby or thereby will (a)
conflict with, result in a breach of any of the provisions of, or constitute a
default under, the Certificate of Incorporation or by-laws of Seller as amended
to date, or (b) result in a breach of any of the provisions of, or constitute a
default under any Contract to which Seller or any of the Purchased Assets is
bound, which individually or in the aggregate would cause a Material Adverse
Effect, (c) result in the violation of any Applicable Law to which Seller or any
of the Purchased Assets is subject, or (d) result in or require the creation or
imposition of or result in the acceleration of any material indebtedness or of
any Lien of any nature upon, or with respect to, any of the Purchased Assets.
4.4. CONSENTS.
Except as disclosed in SCHEDULE 4.3 or SCHEDULE 4.4, no consent,
approval or authorization of, or declaration or filing with, any Governmental
Authority is required in connection with the execution, delivery or performance
of this Agreement or the other Seller Documents by Seller. Except as disclosed
in SCHEDULE 4.3 or SCHEDULE 4.4, no approval, consent or authorization of any
customer, supplier, lender, lessor, bondholder or other person or entity is
required in order for Seller to consummate the transactions contemplated hereby
or by the other Seller Documents except for any such consents, approvals or
authorizations the failure of which to obtain would not have a Material Adverse
Effect.
4.5. FINANCIAL STATEMENTS.
The (i) unaudited financial statements of the Division (including
the balance sheet and statement of revenue less direct and allocated expenses
before income taxes) for the fiscal year ended December 31, 1999 (the "YEAR END
FINANCIAL STATEMENTS") and (ii) the unaudited balance sheet of the Division as
of July 30, 2000 (the "INTERIM BALANCE SHEET") and the unaudited statement of
revenue less direct and allocated expenses before income taxes for the
seven-month period then ended (collectively, the "INTERIM FINANCIAL STATEMENTS")
(the Year End Financial Statements and the Interim Financial Statements, being
collectively referred to herein as the "FINANCIAL STATEMENTS" and the date of
the Interim Balance Sheet being referred to herein as the "INTERIM BALANCE SHEET
DATE"), true and complete copies of each of which are attached hereto as
SCHEDULE 4.5, in each case, except as disclosed on SCHEDULE 4.5, (w) are
complete and correct in all material respects, (x) have been prepared in
accordance with the books and records of the Business, (y) present fairly the
financial position of the Division and the results of operations before income
taxes as of and for the respective dates and time periods in accordance with
GAAP and allocated all costs between Seller and the Division consistent with
past practice, and (z) fairly reflect the costs to complete of Contracts
existing as of such dates in the aggregate.
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4.6. TAXES.
(a) Taxes Accruing Prior to Closing. All Tax Returns relating
to the Division ("COVERED RETURNS") required to be filed on or before the
Closing Date have been (or will be as of the Closing Date) duly and timely
filed. All Covered Returns are true and correct in all material respects. All
Taxes relating to the Division for periods through the Closing Date have been
(or, in the case of Taxes not yet due, will be) paid, except for any such Taxes
that are currently being contested in good faith and are listed on SCHEDULE
4.6(a). All Taxes required to be withheld in connection with amounts paid or
owing to any employee, independent contractor, creditor or other party with
respect to the Division ("WITHHOLDING TAXES") have been withheld, and such
Withholding Taxes have either been duly and timely paid to the proper
Governmental Authority or set aside in accounts for such purpose, except for any
such Taxes that are currently being contested in good faith and are listed on
SCHEDULE 4.6(a). There are no Liens on any of the Purchased Assets that arose in
connection with any failure or alleged failure to pay any Taxes.
(b) Extensions and Waivers. No agreement or other document
extending, or having the effect of extending, the period of assessment or
collection of any Taxes due on or before the Closing Date or any Taxes relating
to the Division for periods through the Closing Date which are not due until
after the Closing Date ("COVERED TAXES") or Withholding Taxes, and no power of
attorney with respect to any such Taxes, has been filed with the Internal
Revenue Service or any other Governmental Authority.
(c) Disputes and Audits. Except as set forth on SCHEDULE
4.6(c), no Covered Taxes and no Withholding Taxes are currently under audit by
any Governmental Authority. Neither the Internal Revenue Service nor any other
Governmental Authority is now asserting or, to the knowledge of Seller,
threatening to assert against Seller any deficiency or claim for additional
Covered Taxes or any adjustment of Covered Taxes that would, if paid by Buyer,
have a Material Adverse Effect, and there is no reasonable basis for any such
assertion.
(d) Tax Agreements. The Seller is not party to any Tax
allocation or sharing agreement that would affect Taxes attributable to the
Division.
4.7. ABSENCE OF CHANGES.
Except as set forth in SCHEDULE 4.7, since the Interim Balance
Sheet Date, Seller has conducted the Business only in the ordinary course
consistent with prior practice and has not, on behalf of, in connection with or
relating primarily to the Business or the Purchased Assets:
(a) suffered any Material Adverse Effect;
(b) incurred any obligation, commitment or liability, except
current liabilities for trade or business obligations incurred in connection
with the purchase of goods or services in the ordinary course of business
consistent with prior practice, none of which obligations, commitments or
liabilities, individually or in the aggregate, has had a Material Adverse
Effect;
(c) discharged or satisfied any Lien other than those then
required to be discharged or satisfied, or paid any obligation, commitment or
liability, known or unknown, absolute or contingent, matured or unmatured, or
otherwise, whether due or to become due, other than current liabilities shown on
the Interim Balance Sheet and current liabilities incurred since the date
thereof in the ordinary course
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<PAGE> 15
of business consistent with prior practice or failed to pay or discharge when
due any material obligation, commitment or liability;
(d) mortgaged, pledged or subjected to any Lien (other than
Permitted Liens), any of the Purchased Assets other than in the ordinary course
of business consistent with prior practice;
(e) sold, transferred, leased to others or otherwise disposed
of any of the Purchased Assets, except for inventory sold in the ordinary course
of business, or canceled or compromised any debt or claim relating to the
Business, or waived or released any right of substantial value;
(f) received any show cause notice or any notice of termination
(whether by default or otherwise) of any material Contract or group of
Contracts;
(g) suffered any damage, destruction or loss (whether or not
covered by insurance) which, individually or in the aggregate, has had a
Material Adverse Effect;
(h) transferred or granted any rights under, or entered into
any settlement regarding the breach or infringement of, any Intellectual
Property, or modified any existing rights with respect thereto, except for
complying with its obligations under the Seller Contracts and the Government
Contracts;
(i) failed to replenish inventories and supplies in a normal
and customary manner consistent with prior practice;
(j) made any capital expenditure or capital addition or
improvement which individually involves an amount in excess of $50,000;
(k) instituted, settled or agreed to settle any litigation,
action or proceeding before any Governmental Authority other than in the
ordinary course of business consistent with past practice but not in any case
involving amounts in excess of an aggregate of $10,000;
(l) made any change in any accounting procedures or practices
other than as required by GAAP or Applicable Law; or
(m) taken any action or omitted to take any action that would
result in the occurrence of any of the foregoing.
4.8. LITIGATION; DISPUTES.
Except as set forth in SCHEDULE 4.8, there is no action, claim,
demand, suit, proceeding, arbitration, grievance, citation, summons, subpoena,
inquiry or investigation of any nature, civil, criminal, regulatory or
otherwise, in law or in equity, pending or, to the knowledge of Seller,
threatened against or relating to Seller in connection with the Purchased Assets
or the Business or against or relating to the transactions contemplated by this
Agreement. The Business is not operating under, subject to or in default with
respect to any order, award, writ, injunction, decree or judgment of any
Governmental Authority.
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<PAGE> 16
4.9. LEGAL COMPLIANCE; GOVERNMENTAL APPROVALS AND CONSENTS.
(a) Compliance with Laws. Seller has complied in all material
respects with all Applicable Laws related to the Business and the Purchased
Assets and Seller is not in violation of any such Applicable Law, other than
bulk sales or similar laws, nor has Seller received any notice alleging any
material conflict with, violation of, breach of or default under any such
Applicable Law.
(b) Governmental Approvals. Except as set forth in SCHEDULE
4.9(b), all material Governmental Approvals and other material consents
necessary for the conduct of the Business have been duly obtained and are in
full force and effect, and Seller is in compliance with each of such material
Governmental Approvals and other material consents held by it with respect to
the Purchased Assets and the Business.
4.10. ASSETS.
(a) Title. Except as disclosed in SCHEDULE 4.10(a), Seller is
the sole and exclusive legal and equitable owner of, and has good title to or a
valid leasehold in, all the Purchased Assets, free and clear of any and all
Liens other than Permitted Liens. On the Closing Date, Buyer will acquire good
title to, or a valid leasehold interest in, as applicable, and all right, title
and interest in, the Purchased Assets, free and clear of any and all Liens other
than Permitted Liens.
(b) Sufficiency to Conduct of Business. Except for use and
occupancy services provided pursuant to the Sublease, administrative and support
services provided pursuant to the Services Agreement or as disclosed on SCHEDULE
4.10(b), the Purchased Assets comprise all assets required for the conduct of
the business of the Division as now being conducted by Seller. Except for use
and occupancy services provided pursuant to the Sublease, administrative and
support services provided pursuant to the Services Agreement or as disclosed on
SCHEDULE 4.10(b), the Purchased Assets constitute all the properties and assets
relating to or used or held for use in connection with the business of the
Division as of the date of the Interim Financial Statements (except inventory
sold, cash disposed of, accounts receivable collected, prepaid expenses
realized, Contracts fully performed, properties or assets replaced by equivalent
or superior properties or assets or otherwise disposed of, in each case, in the
ordinary course of business).
(c) Condition. The Purchased Assets are in reasonably good
repair and operating condition (subject to normal wear and tear) and, to the
knowledge of Seller, except as disclosed on SCHEDULE 4.10(c), there are no facts
or conditions affecting the Purchased Assets, which could, individually or in
the aggregate, interfere in any material respect with the use, occupancy or
operation thereof as currently used, occupied or operated.
4.11. SELLER CONTRACTS.
(a) Disclosure. Except for Government Contracts, SCHEDULE
4.11(a) contains a complete and correct list of all Contracts to which Seller is
party as of the date of this Agreement primarily in connection with the Business
of the types described below (the "SELLER CONTRACTS"):
(i) leases, licenses, permits, franchises, insurance
policies, Governmental Approvals and other Contracts concerning or
relating to any real property used by the Business;
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<PAGE> 17
(ii) employment, consulting, agency, collective
bargaining or other similar Contracts relating to or for the benefit of
current, future or former employees, officers, directors, sales
representatives, distributors, dealers, agents, independent contractors
or consultants, the performance of which will extend over a period of
more than one year or involve consideration in excess of $50,000;
(iii) loan agreements, indentures, letters of credit,
mortgages, security agreements, pledge agreements, deeds of trust, bonds,
notes, guarantees, and other Contracts relating to the borrowing of money
or obtaining of or extension of credit, or under which it has granted a
security interest on any of its assets;
(iv) licenses, licensing arrangements and other Contracts
providing in whole or in part for the use of, or limiting the use of, any
Intellectual Property;
(v) brokerage or finder's Contracts;
(vi) joint venture, partnership and similar Contracts;
(vii) orders and other Contracts for the purchase or sale
of materials, supplies, products or services, each of which involves open
commitments in excess of $10,000;
(viii) Contracts with respect to which the aggregate amount
that could reasonably be expected to be paid or received thereunder in
the future exceeds $50,000 per annum or Contracts that are otherwise
material to the Business;
(ix) sales agency, manufacturer's representative,
installation, maintenance, marketing or distributorship Contracts;
(x) Contracts with respect to the representation of the
Business in foreign countries;
(xi) lease Contracts providing for the leasing of
personal property primarily used in, or held for use primarily in
connection with, the Business;
(xii) Contracts with any employee, director, officer,
stockholder or Affiliate involved in the Business;
(xiii) any Contract concerning confidentiality,
noncompetition or otherwise limiting the conduct of the Business;
(xiv) any profit sharing, stock option, stock purchase,
stock appreciation, deferred compensation, severance or other plan or
arrangement for the benefit of current or former directors, officers,
employees or consultants; and
(xv) written bids, with respect to potential Government
Contracts in excess of $500,000.
(b) Inspection. Seller has made available to Buyer current and
complete and correct copies of all written Seller Contracts, together with all
amendments thereto, except for the UAE Offset
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<PAGE> 18
Agreement. Except as set forth on SCHEDULE 4.11(b), there are no current or
pending negotiations with respect to the renewal or repudiation or cancellation
of, or material amendment to, any Seller Contract.
(c) Validity. All Seller Contracts are valid and binding and in
full force and effect against Seller. Except as set forth on SCHEDULE 4.11(b),
Seller has not, nor to Seller's knowledge has any other party, violated any
provision of or committed or failed to perform any act which with notice, lapse
of time or both would constitute a material default under any Seller Contract.
4.12. GOVERNMENT CONTRACTS.
(a) Disclosure. SCHEDULE 4.12(a) sets forth all Contracts with
Governmental Authorities of the United States and subcontracts (at any tier)
under prime contracts with Governmental Authorities of the United States to
which Seller is party primarily in connection with the Business and having
contract value in excess of $100,000 (collectively, "GOVERNMENT CONTRACTS").
(b) Inspection. Seller has delivered to Buyer or provided to
Buyer access to current and complete and correct copies of all of Government
Contracts, together with all amendments thereto. Except as set forth in SCHEDULE
4.12(b), there are no current or pending negotiations with respect to the
renewal or repudiation or cancellation of any Government Contract.
(c) Validity; Compliance. All Government Contracts are valid
and binding and in full force and effect against Seller. Except as set forth on
SCHEDULE 4.12(b), Seller has not violated any provision of or committed or
failed to perform any act which with notice, lapse of time or both would
constitute a material default under any Government Contract. Neither Seller nor,
to the knowledge of Seller, any other party, has terminated, canceled or waived
any term of any such Government Contract. Seller is in compliance in all
material respects with all national security obligations, including, without
limitation, those specified in the National Industrial Security Program
Operating Manual, DOD 5220.22-M (January 1995).
(d) Federal Government Actions. Seller has not received any
notice or other written communication from the federal government within the
last three (3) years regarding any actual or threatened disqualification,
suspension or debarment of Seller or any of its officers or principals (as
defined in FAR 52.209-5) with respect to contracting with or receiving financial
assistance from any Governmental Authority and, to the knowledge of Seller, no
such action is threatened.
(e) Claims. To the knowledge of Seller, there is no: (i)
pending investigation for fraud relating to any Government Contracts; (ii) other
than in the ordinary course of business, existing or proposed cost disallowance
or pricing adjustment relating to any Government Contract; or (iii) except as
disclosed on SCHEDULE 4.12(e), termination for default, cure notice or show
cause notice currently in effect, relating to any Government Contract.
(f) Bids. Except as disclosed to Buyer by written notice or as
disclosed on SCHEDULE 4.11(a), Seller has not submitted any Bid in excess of
$500,000 relating to the Business which remains outstanding. Except as disclosed
on SCHEDULE 4.12(f), in the reasonable judgment of the senior management of
Seller based upon existing facts and Seller's current standards and practices,
no Bids currently outstanding are expected to be completed at a loss.
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<PAGE> 19
(g) FAR. Seller's accounting system meets the requirements of
FAR and Federal Cost Accounting Standards in all material respects. To the
knowledge of Seller, there are no written reports resulting from financial
contract audits or other investigations by the U.S. Government of any Government
Contract (past or present) that conclude that Seller engaged in overcharging or
other defective pricing practices or in other practices in violation of the FAR
which, if established, could result in fines, penalties or other sanctions which
would materially and adversely affect the business or financial condition of the
Business. To the knowledge of Seller, there are no financial contract audits or
other investigations by U.S. Government officials of any Government Contract
(past or present) which are either ongoing or have been completed but the report
of which has not yet been issued (and is expected to be issued) and which are
expected to recommend fines, penalties or other sanctions which would materially
and adversely affect the Business.
(h) Assignment. Seller has not assigned or otherwise conveyed
or transferred, or agreed to assign, to any Person, any Government Contracts to
which it is a party, or any account receivable relating thereto, whether as a
security interest or otherwise.
4.13. INVENTORIES.
All inventories included in the Purchased Assets are of good,
usable and merchantable quality and fit for the purpose for which they were
procured or manufactured and do not include obsolete or discontinued items,
subject to the reserve for residual material included in the Interim Balance
Sheet.
4.14. PRODUCT WARRANTIES.
Except as set forth in SCHEDULE 4.14, there are no pending or, to
the knowledge of Seller, threatened claims with respect to any breach of product
or service warranty extended by Seller and currently in effect with respect to
the Business, and Seller is not aware of any liability with respect to any such
warranty, except for claims which, individually or in the aggregate, may not
reasonably be expected to have a Material Adverse Effect.
4.15. INTELLECTUAL PROPERTY.
(a) Title. SCHEDULE 4.15(a) contains a complete and correct
list of all registered Intellectual Property and all material unregistered
Intellectual Property that is owned, licensed or used by Seller exclusively for
the conduct of the Business (the "INTELLECTUAL PROPERTY ASSETS"). Except as set
forth on SCHEDULE 4.15(a), Seller owns or has sufficient rights to make, sell
and use all Intellectual Property Assets, free from any Liens (other than
Permitted Liens).
(b) Transfer. Except as set forth in SCHEDULE 4.15(b),
immediately after the Closing, Buyer will own all of the Intellectual Property
Assets owned by Seller and will have sufficient rights to make, sell and use the
other Intellectual Property Assets, free from any Liens (other than Permitted
Liens) on the same terms and conditions as in effect prior to the Closing.
Except as set forth in SCHEDULE 4.15(b), no consent on the part of any other
Person is required to transfer the Intellectual Property Assets to Buyer.
(c) No Infringement. Except as set forth on SCHEDULE 4.15(c),
(i) the products, services and conduct of the Business do not infringe or
misappropriate any rights of any Person in the United States or, to the
knowledge of Seller, elsewhere in respect of any Intellectual Property, and (ii)
to
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<PAGE> 20
the knowledge of Seller, none of the Intellectual Property Assets is being
infringed or is otherwise used or available for use, by any other Person.
(d) Confidentiality. Seller has taken all commercially
reasonable steps that are required to protect Seller's rights in confidential
information and trade secrets of Seller or provided by any other Person to
Seller with respect to the Business.
4.16. ENVIRONMENTAL MATTERS.
(a) Permits. Seller has been duly issued, and currently has and
will maintain through the Closing Date all Environmental Permits. Seller has not
been notified by any relevant Governmental Authority that any Environmental
Permit will be modified, suspended, canceled or revoked, or cannot be renewed in
the ordinary course of business.
(b) No Violations or Liabilities. In connection with the
Business, Seller has complied and is in ompliance in all respects with all
Environmental Permits and all applicable Environmental Laws, except for such
non-compliance as would not reasonably be expected to cause a Material Adverse
Effect.
(c) No Actions. There are no pending or, to the knowledge of
Seller, threatened actions, suits, orders, claims, legal proceedings or other
proceedings, based on, and neither Seller nor any officer or director thereof
has directly or indirectly received any written notice of any complaint, order,
directive, citation, notice of violation, notice of responsibility, notice of
potential responsibility, or information request or any other written
communication from any Governmental Authority or any other Person arising out of
or attributable to: (i) the current or past presence, Release, or threatened
Release of Hazardous Substances at or from any part of any real property
currently or formerly owned, leased or operated in connection with the Business
or the Purchased Assets; (ii) the off-site disposal or treatment of Hazardous
Substances originating on or from such properties or the Business or the
Purchased Assets; or (iii) any violation of Environmental Laws or Environmental
Permits in connection with the Business or the Purchased Assets.
(d) Listings. None of the real property currently or formerly
owned, leased, or operated by Seller in connection with the Business is listed
or proposed to be listed on the National Priorities List or CERCLIS or on any
equivalent state or local database or list of properties that require cleanup
under Environmental Laws.
(e) Environmental Information. Seller has made available to
Buyer all information, including without limitation all audits, studies,
analyses and test results, in the possession, custody or control of Seller
relating to (i) the environmental conditions on, under or about any real
property owned, leased or used by Seller in connection with the Business, and
(ii) Hazardous Substances used, managed, handled, transported, treated,
generated, stored or Released by in connection with the Business.
(f) Underground Storage Tanks, etc. Except as disclosed on
SCHEDULE 4.16 to the knowledge of Seller, there are no (i) underground storage
tanks, active or abandoned, (ii) polychlorinated biphenyl-containing equipment
or (iii) asbestos-containing material, at any property currently owned, leased
or operated in connection with the Business or the Purchased Assets.
(g) Releases. Except as disclosed on SCHEDULE 4.16, no Releases
of Hazardous Substances have occurred at, from, in, to, on or under any property
currently owned, leased or operated in
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connection with the Business or the Purchased Assets, except in accordance with
Environmental Laws and except as would not have a Material Adverse Effect.
(h) Other Representations.
(i) Seller has conducted no activity or operations with
respect to the property subject to the Fairchild Leases and Seller has provided
a true and complete copy of the Phase I Environmental Report prepared for Seller
with respect to the properties subject to the Fairchild Leases.
(ii) Notwithstanding anything to the contrary in this
SECTION 4, (A) this SECTION 4.16 contains the sole and exclusive representation
and warranty of Seller with respect to environmental matters and (B) none of the
representations set forth in this SECTION 4.16 (other than in this SECTION
4.16(h)) are being made with respect to the Fairchild Leases.
4.17. EMPLOYEES.
(a) Existing Employees. SCHEDULE 4.17(a) lists the name of each
employee of Seller that devotes substantially all of his or her time to the
Business (an "EXISTING EMPLOYEE"). Substantially all of Existing Employees
devote all of their time to the Business. With respect to each such Existing
Employee, Seller has provided to Buyer such Existing Employee's position with
Seller, initial employment date and such Existing Employee's fiscal year 2000
and current salary or hourly wage, bonus or incentive compensation, total
taxable compensation, accrued vacation and other employment benefits. Except as
disclosed in SCHEDULE 4.17(a), no oral understandings currently exist between
any executive officer or other representative of Seller authorized to enter into
such understandings on behalf of Seller and any Existing Employee regarding
changes in compensation, promotion or any other change in status.
(b) Labor Relations. Seller is not party to any collective
bargaining or similar agreement with respect to the employees involved in the
Business. There is no strike, labor, dispute, slowdown, stoppage or other
material interference with or impairment by labor of the Business actually
pending or, to Seller's knowledge, threatened against Seller with respect to the
Business. Seller has complied in all material respects with all Applicable Laws
relating to employment or the workplace, including, without limitation,
provisions relating to wages, hours, collective bargaining, safety and health,
work authorization, equal employment opportunity, immigration, withholding,
unemployment compensation, workers compensation, employee privacy and right to
know.
4.18. PENSION AND BENEFIT PLANS.
(a) Plans and Other Arrangements. Except as set forth in
SCHEDULE 4.18(a), Seller (i) neither maintains nor has ever maintained any Plan
or Other Arrangement relating to the Existing Employees, (ii) neither is nor has
ever been a party to any Plan or Other Arrangement relating to the Existing
Employees and (iii) has no obligations under any Plan or Other Arrangement
relating to the Existing Employees.
(b) Disclosure. Seller has furnished to Buyer true and complete
copies of each of the following documents for each Plan relating to the Existing
Employees: (i) the documents setting forth the terms of each Plan, including but
not limited to plan documents, amendments, summary plan descriptions; (ii) all
related trust agreements for each Plan; (iii) for the three most recent plan
years, all
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<PAGE> 22
annual reports (Form 5500 series) on Plans that have been filed with any
Governmental Authority; (iv) all DOL opinions on any Plan and all correspondence
relating to the request for and receipt of each opinion; and (v) all Internal
Revenue Service determination letters, rulings, opinions or technical advice
relating to any Plan and all correspondence relating to the request for and
receipt of each ruling, opinion or technical advice.
(c) Excluded Plan Types. Except for the Retirement Plan for
Employees of the Fairchild Space and Defense Corporation, which is not being
transferred to Buyer, no Plan is a Multiemployer Plan, an ESOP, a Defined
Benefit Plan or a funded Welfare Plan.
(d) Legal Compliance. With respect to the Existing Employees,
Seller has complied in all material respects with all applicable provisions of
the Code, ERISA, the National Labor Relations Act, Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act, the Fair Labor Standards
Act, the Securities Act, the Exchange Act, and all other Applicable Laws
pertaining to the Plans, Other Arrangements and other employee or employment
related benefits, and all premiums and assessments relating to all Plans or
Other Arrangements. Seller has no material liability for any delinquent
contributions within the meaning of Section 515 of ERISA (including, without
limitation, related attorneys' fees, costs, liquidated damages and interest) or
for any arrearages of wages with respect to the Existing Employees. Seller has
no material pending unfair labor practice charges, contract grievances under any
collective bargaining agreement, other administrative charges, claims,
grievances, lawsuits, applications for remedial relief or other proceedings of
any kind before any Governmental Authority arising under any applicable law
governing any Plan with respect to the Existing Employees, and, to the knowledge
of Seller, there exist no facts that could give rise to such a claim.
(e) 401k Plan. Seller's 401(k) plan (referenced in SECTION
7.5(g) below) is a Qualified Plan and has been administered at all times in
material compliance with its terms and Applicable Law, including but not limited
to requirements for the timely remittance of employee and employer
contributions. There are no claims, suits or proceedings by an Existing Employee
for benefits from Seller's 401(k) plan.
(f) Liens. No Purchased Asset is subject to any lien under Code
section 401(a)(29), ERISA section 4068, ERISA section 302(f) or Code section
412(n). Neither Seller nor any trade or business (whether or not incorporated)
which is a member of a controlled group with Seller or which is under common
control with Seller within the meaning of Code section 414 has incurred any
liability which could subject the Purchased Assets to liability under sections
4062, 4063, 4064 or 4069 of ERISA.
4.19. TRANSACTIONS WITH RELATED PARTIES.
Except as set forth in SCHEDULE 4.19, neither any present or
former officer, director, stockholder or Affiliate of Seller, nor any Affiliate
thereof, is currently a party to any transaction or Contract with Seller
relating to the Business, including, without limitation, any Contract providing
for the employment of, furnishing of services by, rental of the Purchased Assets
from or to, or otherwise requiring payments to, any such officer, director,
stockholder or Affiliate.
4.20. NO BROKER.
Except for the fees of First Union Securities, Inc., which are the
responsibility of Seller, Seller has no liability or obligation to pay any
broker or finder or investment banker entitled to any
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brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Seller for which Buyer could become liable or obligated.
4.21. DISCLAIMER.
Notwithstanding anything to the contrary contained in this ARTICLE
4 or any other provision of this Agreement or a Seller Document, Buyer
acknowledges that Seller is making no representation or warranty whatsoever,
express or implied, beyond those expressly given in this Agreement or any Seller
Document, including but not limited to any implied warranty or representation as
to condition, merchantability, fitness or suitability for a particular purpose
as to any of the Purchased Assets. Except as otherwise specifically provided in
this Agreement, the Purchased Assets are being sold on an "as is" basis.
4.22. NOTES AND ACCOUNTS RECEIVABLE.
All notes and accounts receivable of the Division which are
reflected on the Interim Financial Statements have arisen only from bona fide
transactions in the ordinary course of business. Seller has no knowledge of any
facts or circumstances (other than general economic conditions) which would
result in any material increase in the uncollectability of such receivables in
excess of the reserves therefor set forth on the Interim Financial Statements.
The entries shown on the Interim Financial Statements have been computed in a
manner consistent with past practice.
4.23. INSURANCE.
SCHEDULE 4.23 is a list of all insurance policies (specifying the
insurer, the amount of coverage, the type of insurance and the annual premium)
maintained by Seller with respect to the Business. Such policies are owned
solely by Seller and will be outstanding and in effect until the Closing.
4.24. CUSTOMERS AND SUPPLIERS.
Seller has used its reasonable business efforts to maintain and,
to the knowledge of Seller, currently maintains good working relationships with
all of its customers and suppliers with respect to the Business.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
Each of Buyer and Parent, as applicable, hereby represents and
warrants to Seller, on the date hereof and on the Closing Date, as follows:
5.1. ORGANIZATION.
Each of Buyer and Parent is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware.
Each of Buyer and Parent has all necessary corporate power, authority, and
capacity to own its property, to carry on its business, and to enter into and
perform
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its obligations under this Agreement and the other Buyer Documents and to carry
out the transactions contemplated hereby and thereby.
5.2. CORPORATE AUTHORITY.
The execution, delivery and performance by each of Buyer and
Parent of this Agreement and the other Buyer Documents to which it is a party
and the consummation by Buyer and Parent of the transactions contemplated hereby
or thereby have been duly authorized by all requisite corporate action on the
part of Buyer and Parent, as applicable. This Agreement has been duly executed
and delivered by each of Buyer and Parent and constitutes, and upon execution
and delivery by each of Buyer and Parent of each of the other Buyer Documents to
which it is a party, such Buyer Documents will constitute, the legal, valid and
binding obligation of Buyer and Parent, as applicable, enforceable against Buyer
and Parent in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and subject to
general principles of equity.
5.3. NO CONFLICT.
Neither the execution or delivery by Buyer or Parent of this
Agreement or the other Buyer Documents to which it is a party, nor the
consummation of the transactions contemplated hereby or thereby will (a)
conflict with or result in a breach of any of the provisions of, or constitute a
default under, the charter, by-laws, or other organizational document of Buyer
or Parent, as amended to date, (b) result in a breach of any of the provisions
of, or constitute a default under any material contract to which Buyer or Parent
is bound, or (c) result in a violation of any Applicable Law to which Buyer or
Parent or its property is subject.
5.4. CONSENTS.
Except for the consents contemplated by SECTION 8.2, no consent,
approval or authorization of, or declaration or filing with, any Governmental
Authority is required in connection with the execution, delivery or performance
by Buyer or Parent of this Agreement or the other Buyer Documents to which it is
a party. No approval, consent or authorization of any lender, lessor or other
person is required in order for Buyer to consummate the transactions
contemplated hereby or thereby.
5.5. LITIGATION.
There is no action, claim, demand, suit, proceeding, arbitration,
grievance, citation, summons, subpoena, inquiry or investigation of any nature,
civil, criminal, regulatory or otherwise, in law or in equity, pending or, to
the knowledge of Buyer, threatened against or relating to Buyer which seeks to
enjoin or rescind the transactions contemplated by this Agreement or otherwise
prevent Buyer from complying with the terms and provisions of this Agreement.
5.6. BROKERS.
No broker or finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Buyer or Parent for which Seller could become liable or obligated.
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5.7. SOLVENCY.
Parent currently is, and following the Closing, Parent will
continue to be able to pay its debts and fulfill its obligations as the same
come due.
5.8. INSPECTIONS; LIMITATIONS ON SELLER'S WARRANTIES.
Buyer is an informed and sophisticated participant in the
transactions contemplated by this Agreement. Buyer acknowledges that no
representation or warranty, express or implied, of Seller or any of its
advisors, including, without limitation, First Union Securities, Inc., or any of
their respective Affiliates or representatives, with respect to the Business,
including, without limitation, (i) the information set forth in the Fairchild
Confidential Information Memorandum provided in July 2000, (ii) any other
information provided to Buyer pursuant to the Confidentiality Agreement, dated
July 11, 2000, between Buyer and Seller or SECTION 7.1 or (iii) any financial
projection or forecast delivered to Buyer with respect to the revenues or
profitability which may arise from the operation of the Business either before
or after the Closing Date, shall (except as otherwise expressly represented to
in this Agreement) form the basis of any claim against Seller or any of its
advisors including, without limitation, First Union Securities, Inc. or any of
their respective Affiliates with respect thereto or with respect to any related
matter. Nothing contained in this SECTION 5.8 will be construed as a waiver of
or defense to claims for fraud. With respect to any projection or forecast
delivered by or on behalf of Seller to Buyer, Buyer acknowledges that (i) there
are uncertainties inherent in attempting to make such projections and forecasts
and (ii) it is familiar with such uncertainties.
5.9. FINANCING.
Buyer will have on the Closing Date sufficient cash to pay the
Purchase Price and to make all other payments necessary in connection with the
transactions contemplated by this Agreement.
5.10. DISCLAIMER.
Notwithstanding anything to the contrary contained in ARTICLE 5 or
any other provision of this Agreement or any Buyer Document, Seller hereby
acknowledges that each of Buyer and Parent is making no representation or
warranty whatsoever, express or implied, beyond those expressly given in this
Agreement or any other Buyer Document.
6. COVENANTS OF SELLER PENDING CLOSING
6.1. CONDUCT OF BUSINESS.
Except as otherwise contemplated by this Agreement, during the
period from the date hereof through the Closing Date, Seller will conduct the
operations of the Business in the ordinary and usual course, consistent with
past and current practices, to keep the Business and the Purchased Assets
substantially intact, including its present operations, physical facilities,
working conditions, and relationships with lessors, licensors, suppliers,
customers and employees, all to the extent the officers, directors and
management employees of Seller reasonably determine such actions to be in the
best interests (including the future prospects) of the Business. Seller shall
maintain in full force and effect all
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existing casualty, liability and other insurance through the day following the
Closing Date in amounts not less than those in effect on the date hereof, except
for changes in such insurance that are made in the ordinary course of business
consistent with past practice.
6.2. FORBEARANCES.
Except as contemplated by this Agreement or consented to by Buyer
in writing (which consent shall not be unreasonably withheld), with respect to
the Business during the period from the date hereof through the Closing Date
Seller shall not engage in any practice, take any action, or enter into any
transaction outside of the ordinary course of business. Without limiting the
generality of the foregoing, Seller will not (i) take any action, or enter into
any transaction with respect to the Purchased Assets or Assumed Liabilities
outside the ordinary course of business, the primary purpose or effect of which
is to generate or preserve cash, (ii) otherwise engage in any practice, take any
action or enter into any transaction which would cause the representations set
forth in SECTION 4.7 to be untrue on the Closing Date; or (iii) take any action
or fail to take any action that would cause any of the other representations,
warranties or covenants contained herein to be untrue or incorrect or incapable
of being performed or satisfied on the Closing Date.
6.3. UPDATES.
Seller shall promptly notify Buyer of the occurrence after the
date of this Agreement and prior to the Closing Date of any fact or condition
that would, as of the time of such occurrence, constitute a breach of any
representation or warranty had such representation or warranty been made as of
the time of occurrence or discovery of such fact or condition.
7. ADDITIONAL COVENANTS AND AGREEMENTS
7.1. ACCESS AND CONFIDENTIAL INFORMATION.
Seller shall afford to Buyer and its representatives reasonable
access during normal business hours beginning on the date hereof to the books,
records, offices, Contracts, officers, employees, consultants and contractors of
the Business and to such other information relating to the Business as Buyer
shall reasonably request. If the Closing shall not occur, Buyer shall return to
Seller all written material containing or reflecting any such information, and
Buyer shall not retain any copies, extracts or other reproductions in whole or
in part of such written material and shall destroy all documents, memoranda,
notes and other writings (or portions of any such writings, if applicable)
prepared by Buyer or any of its advisors based on such information and upon
written request provide a certification to Seller that such destruction has
occurred. All information furnished or to be furnished by Seller or its agents
to Buyer shall be kept confidential (notwithstanding any termination of this
Agreement); provided, however, that such confidentiality obligation shall not
apply to (a) disclosure to the extent necessary to meet the requirements of
Applicable Law (subject to giving Seller notice as promptly as possible of the
intention to make such disclosure and providing Seller the opportunity to seek a
protective order), or (b) any information which (i) was already in Buyer's
possession from a source other than Seller and without an obligation of
confidentiality prior to the disclosure thereof by Seller or its agents, (ii)
was generally known to the public prior to the disclosure thereof, (iii) became
known to the public through no fault of Buyer, or (iv) was disclosed to Buyer by
a third party not known by Buyer to be bound by an obligation of
confidentiality.
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7.2. CONSENTS; SATISFACTION OF CLOSING CONDITIONS.
(a) Prior to Closing. Except as provided in SECTION 7.3(b),
Seller shall use all reasonable efforts to obtain, with the cooperation of the
Buyer, prior to Closing, all consents, waivers and other approvals which shall
be required in order to effectuate the transactions contemplated hereby,
including, without limitation, those consents set forth in SCHEDULE 4.3 and 4.4.
Seller and Buyer shall use all reasonable efforts to satisfy promptly the
conditions to the Closing specified in this Agreement. Seller and Buyer shall
furnish to each other and to each other's counsel all such information as may be
reasonably required in order to effectuate the foregoing actions.
(b) Hart-Scott Rodino and Exon-Florio Filings. As promptly as
practicable following the execution of this Agreement, Seller and Buyer shall
file with the CFIUS pursuant to the Exon-Florio Provision all requisite
documents and notifications, if any, which are required in connection with this
Agreement and the transactions contemplated hereby, and Seller and Buyer shall
complete any filing required pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR ACT"), or shall mutually agree
that no such filing is required. Buyer shall be responsible for all filing fees
owing to any Governmental Authority in connection with filings contemplated by
this SECTION 7.2(b). Seller and Buyer shall diligently take, or fully cooperate
in the taking of, all necessary and proper steps, and provide any additional
information reasonably requested in order to comply with, the requirements under
the Exon-Florio Provision and the HSR Act.
(c) Subsequent to Closing. From and after the Closing Date,
Seller shall cooperate with Buyer to obtain any consents, waivers and other
approvals which shall not have been obtained prior to the Closing Date. In the
event Seller is unable to obtain as of the Closing any consent, waiver or
approval that is required in order to transfer or assign any Purchased Asset,
including any Contract included in the Purchased Assets, the parties shall enter
into such mutually acceptable arrangement as is necessary to provide Buyer with
the benefits thereof and, with respect to any such Contracts, Buyer shall pay
and perform all obligations of Seller thereunder after the Closing Date.
7.3. ASSIGNMENT OF CONTRACTS AND RIGHTS.
(a) Noncontravention. Anything in this Agreement to the
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any Contract or any claim, right or benefit arising thereunder or
resulting therefrom if an attempted assignment thereof, without the consent of a
third party thereto, would constitute a breach or other contravention thereof,
be ineffective with respect to any party thereto or in any way adversely affect
the rights of Buyer or Seller thereunder.
(b) Government Contract Assignments and Novations. With respect
to any Government Contract and any claim, right or benefit arising thereunder or
resulting therefrom, Seller and Buyer will use reasonable good faith efforts to
obtain as expeditiously as possible, if required, the written consent of the
other parties to such Government Contract for the assignment or, if required,
novation thereof to Buyer or, alternatively, written confirmation from such
parties reasonably satisfactory in form and substance to Buyer and Seller that
such consent is not required. In furtherance of the foregoing, (i) with respect
to the Prime Government Contracts to which Seller is a party, as soon as
practicable following the Closing, Buyer and Seller shall submit to the relevant
Responsible Contracting Officer a written request that the relevant Governmental
Authority enter into a Government Contract Novation with Buyer with respect to
such Prime Government Contracts; and (ii) with respect to each Government
Contract that is not a Prime Government Contract, Buyer and Seller shall, as
soon as practicable
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following the date hereof, submit to the other party or parties thereto
documentation seeking the written waiver or approval of such other contracting
party or parties thereto to the transfer and assignment of all of Seller's
claims, rights, benefits and liabilities thereunder to Buyer. In this regard,
Seller and Buyer shall take all actions required or customary under any FAR
provision (or applicable equivalent regulation).
(c) Buyer Responsibility. Notwithstanding any other provision
of this Agreement, the failure by the parties to obtain any required Government
Contract Novation, or any similar consent, waiver, confirmation, novation or
approval with respect to any Government Contract, shall not relieve either party
from its obligation to consummate at the Closing the transactions contemplated
by this Agreement. Buyer acknowledges that (i) a substantial portion of the
Government Contracts will require the consent or, in the case of Prime
Government Contracts, Government Contract Novation, of the other party or
parties thereto by virtue of the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby and (ii) with respect to
any Bids submitted by Seller before the Closing, the responsible contracting
office might not, after the Closing, award a contract to Buyer based on such Bid
until such responsible contracting officer determines that Buyer, as a result of
its purchase of the Business, is Seller's successor in interest to such Bid.
Buyer agrees and acknowledges that it shall be the obligation of Buyer (and not
Seller) to obtain the consents and authorizations described in this SECTION
7.3(c). Seller will, however, use commercially reasonable efforts to assist
Buyer in obtaining such consents.
(d) Subcontract and Other Arrangements. If any Government
Contract Novation or any consent, waiver, confirmation, novation or approval
described in this SECTION 7.3 is not obtained with respect to any Contract, then
Seller and Buyer will cooperate to establish an arrangement reasonably
satisfactory to Buyer and Seller under which Buyer would obtain, to the extent
practicable, the claims, rights and benefits and assume the corresponding
liabilities and obligations thereunder in accordance with this Agreement
(including by means of any subcontracting, sublicensing or subleasing
arrangement) or under which Seller would enforce for the benefit of Buyer, with
Buyer assuming and agreeing to pay Seller's obligations, any and all claims,
rights and benefits of Seller against a third party thereto.
7.4. LETTERS OF CREDIT; SURETY BONDS.
On or prior to the Closing Date, Buyer and Seller will use
commercially reasonable efforts to ensure that Seller and its Affiliates are
released from all obligations under all letters of credit, surety and
performance bonds, guarantees and other financial support arrangements relating
to the Business that either (a) are set forth in SCHEDULE 7.4 or (b) are
provided or otherwise become effective after the date of this Agreement and not
in contravention of the terms of this Agreement (the "LETTERS OF CREDIT"). If
Buyer is unable to obtain any such release from any such arrangement by the
Closing, at and after the Closing Date, Buyer and Seller will continue to use
commercially reasonable efforts to ensure that Seller and its Affiliates are
released from such arrangements. In the event such release is not obtained
within 90 days after the Closing Date, Buyer shall provide replacement
irrevocable letters of credit from a bank reasonably acceptable to Seller (and
Parent shall guarantee such letters of credit, if necessary) and containing
terms and conditions reasonably acceptable to Seller pursuant to which the
beneficiaries thereof are indemnified against all of their respective
obligations under any such arrangement from which such beneficiary is not so
released on the Closing Date.
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7.5. EMPLOYMENT; EMPLOYEE BENEFITS.
(a) Existing Employees. Prior to the Closing, Buyer shall
extend an offer of employment to each Existing Employee for a comparable
position at the same salary or hourly wage as in effect with respect to such
employee on the Closing Date. (For purposes of this Agreement, any such Existing
Employee who accepts an offer of employment is referred to as a "TRANSFERRED
EMPLOYEE.") Subject to the other provisions of this SECTION 7.5, the Transferred
Employees shall be employed after the Closing in accordance with, and subject
to, Buyer's usual terms, conditions and policies of employment.
(b) Transferred Employee Benefit Plans.
(i) Except as otherwise set forth in this SECTION
7.5(b), immediately following the Closing Date, the Transferred Employees,
during such time as their employment with Buyer is continued, shall be eligible
to participate in Buyer's employee benefit plans ("BUYER BENEFIT PLANS") on the
same terms and conditions as similarly situated employees of Buyer are eligible
to participate therein. Specifically, Buyer shall make available to each of the
full-time Transferred Employees (i) life, accidental death and dismemberment,
long-term disability and short-term disability insurance benefit plans to become
effective on the Closing Date and (ii) medical, dental and vision insurance
benefit plans to become effective not later than December 31, 2000. Buyer shall
cause the Buyer Benefit Plans to recognize prior service of Transferred
Employees under corresponding Seller's benefit plans prior to the Closing as
service with Buyer and its Affiliates for purposes of (i) any Buyer Benefit Plan
that is not a Pension Plan for purposes of any waiting period and eligibility
requirements and (ii) any Buyer Benefit Plan that is a Pension Plan, for
purposes of eligibility (including eligibility for early retirement benefits)
and vesting (but not benefit accrual) thereunder. Seller shall continue to
provide benefit coverage to all Transferred Employees under Seller's benefit
plans until the Closing. Buyer shall assume the liabilities specifically
reflected on the Interim Balance Sheet that are attributable to the Transferred
Employees. Except as otherwise set forth in this SECTION 7.5(b), Buyer shall
assume all liabilities, responsibilities and obligations under the Buyer Benefit
Plans with respect to the Transferred Employees for the provision of any
benefits otherwise available under such plans, including, without limitation,
comprehensive health, dental or drug welfare benefits otherwise payable with
respect to any covered health, dental, and/or covered services and/or materials
and/or supplies and/or expenses, which were provided to or are incurred after
the Closing.
(ii) Seller shall provide continued health and medical
coverage to the extent required under Section 4980B of the Code, Part 6 of Title
I of ERISA or any other applicable federal, state or local law or ordinance
("COBRA COVERAGE") to all Transferred Employees (including their eligible
dependents and beneficiaries) with respect to whom a "qualifying event" (as such
term is defined under Sections 4980B(f)(3) of the Code or 603 of ERISA) or other
triggering event described under the applicable federal, state or local laws or
ordinances occurs on or before the Closing; provided that Buyer shall pay Seller
all premiums in respect of COBRA Coverage for the Transferred Employees as such
premiums become due. In addition to such premiums, Buyer shall promptly
reimburse Seller for (i) any claims paid by Seller under Seller's dental or
medical benefit plans to Transferred Employees for claims incurred by
Transferred Employees (including their eligible dependents and beneficiaries)
during the period beginning on the Closing Date and ending on and including the
last day of the calendar month in which the Closing occurs and (ii) all
out-of-pocket expenses associated with Seller's provision of COBRA Coverage to
the Transferred Employees (including their eligible dependents and
beneficiaries) for the period commencing on the Closing Date and ending on
December 31, 2000.
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(c) Other Buyer and Seller Responsibilities. Seller agrees that
on and after the Closing, Buyer shall assume no liability, obligation or
commitment with respect to Seller's benefit plan or any benefits or other
amounts payable or provided under any Seller's benefit plan or any notice
(including, but not limited to, notice required by the WARN Act (except with
respect to Transferred Employees or COBRA)), or any Contract relating to
employment or termination of employment between Seller and any of its employees
or former employees, including the Transferred Employees, except with respect to
any contracts arising between Buyer and any Transferred Employee. Buyer agrees
that on and after the Closing, Seller shall assume no liability, obligation or
commitment with respect to any benefit plan of Buyer or any benefits or other
amounts payable or provided under any Buyer's benefit plan or any contract
relating to employment or termination of employment between Buyer and any of its
Affiliates and any of their employees or former employees, including the
Transferred Employees.
(d) Further Assurances. Seller and Buyer shall take such
further action (before, at or after the Closing Date), if any, as reasonably may
be necessary or convenient to implement the intent of their agreements contained
in this SECTION 7.5. Seller shall make available to Buyer such information as
Buyer may reasonably request to enable Buyer to determine such matters relating
to employment and salary histories for purposes of the Buyer Benefit Plans.
(e) No Third Party Beneficiary. No provision of this SECTION
7.5 shall create any third party beneficiary rights in any employee or former
employee (including any beneficiary or dependent thereof) in respect of
continued employment (or resumed employment) or any other matters and no
provision of this SECTION 7.5 shall create any such rights in any such persons
in respect of any benefit plan or arrangement.
(f) Retention Plans. Set forth on SCHEDULE 7.5(f) is a
description of Seller's employee retention plans (the "RETENTION PLANS").
Effective upon the Closing, Buyer shall assume and continue to maintain the
Retention Plans for those employees of Seller (and former employees of Seller)
covered thereby at the Closing Date who are Existing Employees and pay all
amounts to which any such individuals may become entitled thereunder after the
Closing Date.
(g) 401(k) Plan. As soon as administratively practicable after
the Closing Date, Seller shall cause the trustee of Seller's 401(k) plan to
transfer to the trustee of Buyer's 401(k) Plan, in a trustee-to-trustee
transfer, cash, securities, outstanding loan balances, or a combination thereof
equal to the account balances of all Transferred Employees. Buyer shall cause
the trustee of its 401(k) plan to accept the transfer from the trustee of
Seller's 401(k) plan, and Buyer shall credit the accounts for the Transferred
Employees under its 401(k) Plan with the amounts on a fully vested basis, if
any, transferred on their behalf. The transfers required by this SECTION 7.5(g)
shall comply with Section 414(l) of the Internal Revenue Code and the
requirements of ERISA and the regulations promulgated thereunder.
(h) Spending Accounts. This Section shall apply if Buyer shall
maintain a plan or plans under Section 125 and Section 129 of the Internal
Revenue Code in which Transferred Employees are eligible to participate during
the 2000 calendar year ("BUYER'S SECTION 125 PLAN") and such Transferred
Employees also participated in the corresponding plans of the Seller (the
"SELLER'S SECTION 125 PLAN") during the 2000 calendar year. At the end of the
2000 year, the following adjustments shall be made between Buyer and Seller:
(i) If the aggregate amount contributed by Transferred
Employees for 2000 to the Transferred Employees' spending accounts under
Seller's Section 125 Plan exceeds the aggregate claims paid by Seller for 2000
with respect to the Transferred Employees' spending accounts, Seller shall
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pay Buyer an amount in cash equal to such excess to the extent that the
aggregate amount contributed by Transferred employees for 2000 to their spending
accounts under Buyer's Section 125 Plan is less than the aggregate claims paid
by Buyer for 2000 with respect to the Transferred Employees' spending accounts.
(ii) If the aggregate amount contributed by Transferred
Employees for 2000 to their spending accounts under Seller's Section 125 Plan is
less than the aggregate claims paid by Seller for 2000 with respect to the
Transferred Employees' spending accounts, Buyer shall pay Seller an amount in
cash equal to such deficit, to the extent that the aggregate amount contributed
by Transferred Employees for 2000 to the Transferred Employees' spending
accounts under Buyer's Section 125 Plan exceeds the aggregate claims paid by
Buyer for 2000 with respect to the Transferred Employees' spending accounts.
(iii) The foregoing payments shall be made as soon as
practicable after all claims have been paid for the 2000 year.
7.6. TAX RETURNS.
(a) Seller Returns Prior to Closing. Seller shall prepare or
cause to be prepared and file all Tax Returns and pay all Taxes with respect to
Taxes constituting Excluded Liabilities for all taxable periods beginning on or
prior to the Closing Date and ending on or after the Closing Date when such Tax
Returns or Taxes are due, even though such Tax Returns or Taxes are not due
until after the Closing Date. Such Tax Returns shall be prepared and filed in a
manner consistent with prior returns.
(b) Cooperation After Closing. After the Closing Date, Seller
and Buyer shall, as may be reasonably requested by Buyer, on the one hand, or
Seller, on the other hand:
(i) assist the other party in preparing any Tax Returns
or reports which such other party or parties is or are responsible for preparing
and filing with respect to the Business;
(ii) cooperate fully in preparing for any audits of, or
any disputes with taxing authorities regarding, any Tax Returns of or including
the Business; and
(iii) retain and make available to the other party and to
any taxing authority all information, records and documents reasonably requested
relating to Taxes of the Business.
7.7. LIABILITY FOR TRANSFER TAXES.
Buyer shall be responsible for the timely payment of, and shall
indemnify and hold harmless Seller and its Affiliates against, all sales
(including, without limitation, bulk sales), use, value added, documentary,
stamp, gross receipts, registration, transfer, conveyance, excise, recording,
license and other similar Taxes and fees ("TRANSFER TAXES") arising out of or in
connection with or attributable to the transactions affected pursuant to this
Agreement. Buyer shall prepare and timely file all Tax Returns required to be
filed in respect of Transfer Taxes. Buyer's preparation of any such Tax Returns
shall be subject to Seller's approval, which approval shall not be withheld
unreasonably. Seller shall file all required sales tax notifications as promptly
as practicable following the date hereof and shall provide to Buyer copies of
any such filings. Seller and Buyer shall use all reasonable efforts to minimize
the amount of all Transfer Taxes and cooperate in providing each other with the
information necessary to prepare and review such Tax Returns.
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7.8. ORBITAL NAME.
Within 90 days after the Closing Date, Buyer shall remove all
references to the names "Orbital Sciences Corporation" and "Orbital" or any
derivation of a name, mark, trade name or trademark incorporating such names or
any derivation therefrom or any corporate symbols or logos incorporating such
names either alone or in combinations (collectively, the "ORBITAL NAME RIGHTS")
from any advertisements, web sites, mail addresses, domain name services,
datalinks or other property used by the Business, other than internal
workpapers, drawings, memoranda or similar property that is not released to
third parties in the ordinary course. During the 180 day period following the
Closing, Seller and Buyer shall clearly identify to third parties after the
Closing that the Purchased Assets and the Business are owned and operated by
Buyer.
7.9. POST CLOSING RECEIPTS; COOPERATION.
(a) Administration of Accounts. If at any time following the
Closing, Seller or Buyer receives, or comes into possession of, any of the
Purchased Assets or Excluded Assets or any receipts, proceeds, checks,
securities or other property of any kind comprising, arising out of or derived
from the Purchased Assets or the Business or Excluded Assets (including any
check, notes or cash in payment of any account receivable or other intangible
constituting part of the Purchased Assets or Excluded Assets), Seller or Buyer,
as applicable, shall immediately deliver the same to the appropriate party, with
such endorsements, transfers or assignments as may be necessary or desirable to
ensure that such party receives the immediate and full benefit thereof.
(b) Shared Assets. Without limiting the definition of the
Purchased Assets or Buyer's rights to the Purchased Assets hereunder, Seller and
Buyer shall cooperate in good faith to resolve any disputes as to whether any
specific assets owned by Seller, other than the Purchased Assets, that relate to
the Business and another business of Seller are used in or relate to the
Business. Further, without limiting the foregoing, with respect to any asset
presently used in connection with the Business that is also used by Seller in
connection with a business of Seller other than the Business, (i) the parties
shall cooperate in good faith to determine which business predominantly uses
such asset, (ii) if appropriate, the parties shall agree to transfer title to
that asset to the party that owns the business that predominantly uses such
asset, (iii) without limiting Seller's continued use, if appropriate, the
parties shall otherwise coordinate the nonexclusive use of the asset by Buyer,
and (iv) with respect to any proprietary Know-How and Intellectual Property
(other than the Excluded Assets) used by Seller in the Business but not included
in the Purchased Assets, Seller hereby grants Buyer a nonexclusive perpetual,
nonassignable (other than to Smiths Industries plc or subsidiaries thereof)
royalty-free license to use such Know-How and Intellectual Property on an as is
basis. With respect to any Contract applicable to both the Business and such
other business of Seller, Seller and Buyer shall cooperate to structure
contractual arrangements to such agreement providing both Seller and Buyer with
appropriate rights and obligations for shared use. Such contractual arrangements
may take the form of a subcontract, sublicense or two separate agreements.
(c) Audits. Following the Closing Date, Seller and Buyer shall
cooperate reasonably with each other in connection with any audit or review by
any Governmental Authority or other party with respect to the Business. Upon
reasonable request, at the expense of the party requesting assistance, each
party will make available appropriate personnel and provide pertinent records to
enable the other party to assist in any such audit or review.
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(d) Other Cooperation. The parties shall cooperate from and
after the Closing Date, and take all reasonable steps to provide for a smooth
and orderly transition of the Business to Buyer, including, without limitation,
the transition of the employees, payroll, management information systems,
e-mail, computer systems, customers and Contracts, and other assets.
7.10. BOOKS AND RECORDS.
On or prior to the Closing Date, Seller shall provide copies of
the books, records and files of Seller retained by Seller and described in
SECTION 1.3(h). Following the Closing Date, Seller shall make such records
available to Buyer as may be reasonably requested by Buyer for purposes of
compliance with Applicable Laws; provided, however, that Seller shall not be
liable to Buyer in the event of any destruction of such records unless Seller
fails to maintain such records with the same degree of care with which Seller
maintains other similar records.
7.11. NONCOMPETITION.
(a) Nonsolicitation. Seller agrees that it will not, and will
cause its subsidiaries not to, at any time during the period of two (2) years
following the Closing Date, directly or indirectly, solicit for employment or
retention of, in any capacity, any Transferred Employee; provided that this
covenant shall not apply to the general advertisement of employment
opportunities. Buyer and Parent agree that they will not, and will cause their
subsidiaries not to, at any time during the period of two (2) years following
the Closing Date, directly or indirectly, solicit for employment or retention
of, in any capacity, any employee of Seller; provided that this covenant shall
not apply to the general advertisement of employment opportunities.
(b) Noncompetition. Seller will not, and will cause its
subsidiaries not to, for a period of three (3) years following the Closing Date,
directly or indirectly, engage in the design or production of sophisticated
electronics, avionics and mission management systems for use in military
aircraft, helicopters and land vehicles of the type currently designed or
produced in or by the Business (a "COMPETING BUSINESS"); provided that this
SECTION 7.11 shall not (i) prevent Seller or any of any of its subsidiaries from
engaging in any activities that Seller or any of its subsidiaries is engaged in
outside of the Business immediately before the Closing Date, (ii) prohibit the
acquisition (by merger or otherwise) of the securities or assets of a business
where the gross revenues of such business attributable to a Competing Business
constitute less than twenty percent (20%) of the total gross revenue of such
business or (iii) prevent MacDonald, Dettwiler and Associates Ltd. from engaging
in any business.
(c) Enforceability. Seller and Buyer acknowledge and agree that
in view of the nature of the Business and the business objectives of Buyer and
Seller in the transactions contemplated by this Agreement, the foregoing
limitation is reasonable and properly required for the adequate protection of
Buyer and Seller and that in the event that such limitation is deemed to be
unreasonable, then such limitations shall be automatically reduced to the
maximum extent permitted by a court of competent jurisdiction and, as reduced,
the limitation shall be enforced.
(d) Equitable Remedies. Seller and Buyer acknowledge that a
violation of this SECTION 7.11 may cause irreparable injury to the non-breaching
party and that the non-breaching party shall be entitled, in addition to any
other rights and remedies it may have, to injunctive relief without being
required to prove actual damages or post bond.
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8. MUTUAL CONDITIONS PRECEDENT TO OBLIGATIONS TO CLOSE
Unless waived by Seller and Buyer, the obligations of the parties
hereto to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions:
8.1. ABSENCE OF LITIGATION.
No order, injunction, judgment or decree by any Governmental
Authority shall be in effect which enjoins, restrains or prohibits the
consummation of the transactions contemplated by this Agreement.
8.2. STATUTORY REQUIREMENTS.
All applicable waiting periods, if any, under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have
expired or been terminated and any review and investigation by CFIUS under the
Exon-Florio Provision shall have been completed.
9. CONDITIONS TO BUYER'S OBLIGATION TO CLOSE
The obligations of Buyer to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, on or before the
Closing Date, of each of the following conditions, unless otherwise waived in
writing by Buyer:
9.1. REPRESENTATIONS AND WARRANTIES.
The representations and warranties of Seller contained herein or
in any Seller Document shall be true and correct as of the date hereof and on
and as of the Closing Date in all material respects.
9.2. PERFORMANCE.
Seller shall have duly performed or complied in all material
respects with all of the covenants, acts and obligations to be performed or
complied with by Seller hereunder at or prior to the Closing.
9.3. SELLER CONSENTS.
Except for the consents described in SECTION 7.3, Seller shall
have obtained, and shall have delivered evidence thereof to Buyer, all material
consents, waivers and other approvals set forth on SCHEDULES 4.3 AND 4.4.
9.4. NO MATERIAL ADVERSE EFFECT.
No event, occurrence, fact, condition, change, development or
effect shall have occurred, exist or come to exist since the Interim Balance
Sheet Date that, individually or in the aggregate, has
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constituted or resulted in, or could reasonably be expected to constitute or
result in, a Material Adverse Effect.
9.5. SUBLEASE.
Seller shall have entered into a Sublease Agreement with respect
to certain premises in Germantown, Maryland, such sublease to have payment terms
consistent with current cost allocations to the Business and space usage
consistent with the usage by the Business prior to the Closing, including an
allocation of common spaces, but with reconfiguration to segregate the
operations of Seller and Buyer to the extent practicable, substantially in the
form of EXHIBIT C (the "SUBLEASE").
9.6. SERVICES AGREEMENT AND MANUFACTURING AGREEMENT.
Seller shall have entered into (a) a Services Agreement for (i)
services such as information systems, security, facilities management, human
resources, duplication, graphics and metrology to be provided on a cost-no-fee
basis and (ii) engineering services and hardware manufacturing and testing, to
be provided at prices based on Seller's current cost/pricing methodology, but
with a 10% fee on labor, in each case, for a period of one year following the
Closing, substantially in the form of EXHIBIT D (the "SERVICES AGREEMENT") and
(b) a Manufacturing Agreement substantially in the form of EXHIBIT F (the
"MANUFACTURING AGREEMENT").
9.7. ASSIGNMENT AND ASSUMPTION OF LEASES.
Seller shall have entered into an Assignment and Assumption of
Lease with respect to each of the Fairchild Leases, which shall include an
unconditional release of Seller as tenant under the Fairchild Leases,
substantially in the form of EXHIBIT E (collectively, the "ASSIGNMENT AND
ASSUMPTION OF LEASES").
9.8. SELLER'S CLOSING DOCUMENTS.
Seller shall have delivered all other Contracts and documents
required to be delivered by Seller at the Closing, including without limitation,
those described in SECTION 11.1.
10. CONDITIONS TO SELLER'S OBLIGATIONS TO CLOSE
The obligations of Seller to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, on or before the
Closing Date, of each of the following conditions, unless otherwise waived in
writing by Seller.
10.1. REPRESENTATIONS AND WARRANTIES.
The representations and warranties of Buyer contained herein or in
any document delivered pursuant hereto shall be true and correct as of the date
hereof and on and as of the Closing Date in all material respects.
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10.2. PERFORMANCE.
Buyer shall have performed or complied in all material respects
with all covenants, acts and obligations to be performed or complied with by
Buyer hereunder at or prior to the Closing.
10.3. SUBLEASE.
Buyer shall have entered into the Sublease.
10.4. SERVICES AGREEMENT AND MANUFACTURING AGREEMENT.
Buyer shall have entered into (i) the Services Agreement and (ii)
the Manufacturing Agreement.
10.5. ASSIGNMENT AND ASSUMPTION OF LEASES.
Buyer shall have entered into the Assignment and Assumption of
Leases and all letter of credit obligations of Seller relating to the Fairchild
Leases shall have been released.
10.6. BUYER'S CLOSING DOCUMENTS.
Buyer shall have delivered all other Contracts and documents
required to be delivered by it at the Closing, including without limitation,
those described in SECTION 11.2.
11. ACTION TO BE TAKEN AT CLOSING
11.1. ACTION TO BE TAKEN BY SELLER.
At the Closing, Seller shall deliver to Buyer the following:
(a) executed documents of assumption, dated the Closing Date,
transferring the Assumed Liabilities, substantially in the form attached hereto
as EXHIBIT A;
(b) an executed bill of sale and assignment, dated as of the
Closing Date, conveying all of the Purchased Assets substantially in the form
attached hereto as EXHIBIT B;
(c) all such other general instruments of transfer, assignment
and conveyance, assignments, evidences of consent, waiver or other approval, and
other instruments or documents in form and substance satisfactory to Buyer, as
shall be necessary to evidence or perfect the sale, assignment, transfer and
conveyance of the Purchased Assets to Buyer and effectively vest in Buyer all
right, title and interest in the Purchased Assets free and clear of any and all
Liens (other than Permitted Liens), together with possession (or constructive
possession, in the case of intangibles) thereof, all in accordance with the
terms and conditions of this Agreement;
(d) a certificate of an executive officer of Seller, dated the
Closing Date, certifying that (i) the representations and warranties of Seller
contained herein or in any certificate or other Seller
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Document are true and correct on and as of the Closing Date as if made again on
and as of such date and (ii) all covenants, acts and obligations to be performed
or complied with by such Seller hereunder at or prior to the Closing, including
the covenants contained in ARTICLE 9, have been duly performed and complied with
by such Seller;
(e) a certified copy of the resolutions adopted by the Board of
Directors of Seller authorizing or ratifying this Agreement and authorizing the
consummation by Seller of the transactions contemplated hereby and by the other
Seller Documents;
(f) evidence of the release of the liens described on SCHEDULE
4.10(a); and
(g) such other certificates, instruments, opinions or documents
as Buyer may reasonably request in order to effect and document the transactions
contemplated hereby.
11.2. ACTION TO BE TAKEN BY BUYER.
At the Closing, Buyer shall deliver to Seller the following:
(a) executed documents of assumption, dated the Closing Date,
assuming the Assumed Liabilities, substantially in the form attached hereto as
EXHIBIT A;
(b) a certified copy of the resolutions duly adopted by Board
of Directors of Buyer authorizing or ratifying this Agreement and authorizing
the consummation by such Buyer of the transactions contemplated hereby and by
the other Buyer Documents; and
(c) a certificate by an executive officer of Buyer, dated the
Closing Date, certifying that (i) the representations and warranties of Buyer
contained herein or in any certificate or other writing delivered pursuant
hereto or in connection herewith are true and correct on and as of the Closing
Date as if made again on and as of such date and (ii) all covenants, acts and
obligations to be performed or complied with by Buyer hereunder at or prior to
the Closing have been duly performed and complied with by Buyer.
11.3. PAYMENT OF PURCHASE PRICE.
Upon delivery of the documents pursuant to SECTIONS 11.1 and 11.2,
Buyer shall pay the Purchase Price to Seller in accordance with SECTION 3.2.
11.4. EFFECTIVE TIME.
The effective time of the Closing shall be the close of business
on the Closing Date or as otherwise agreed by the parties.
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
(a) Survival Period. The representations and warranties
contained in this Agreement shall survive the Closing and continue in full force
and effect for a period of 12 months following the Closing Date; provided,
however, that (a) any claim that is based on fraud shall survive until the date
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ninety days following the expiration date of the statute of limitations
applicable to any indemnified liability with respect thereto and any extensions
or waivers thereof, (b) the representations and warranties set forth in SECTION
4.16 shall survive for a period of three (3) years, (c) all representations and
warranties set forth in SECTIONS 4.6 and 4.18 survive the Closing for the period
of the applicable statute of limitations plus any extensions or waivers thereof,
and (d) all representations and warranties set forth in SECTIONS 4.2 and 5.2
shall survive the Closing without limitation.
(b) Effect of Expiration. Notwithstanding the foregoing, if
written notice of a claim for indemnification has been given during the
applicable survival period under this SECTION 12, all relevant representations,
and warranties and the obligation to indemnify therefor shall survive for the
purposes of such claim until such claim has been finally resolved.
13. INDEMNIFICATION
13.1. INDEMNIFICATION OF BUYER.
Seller shall defend, and hold Buyer and its Affiliates and their
respective officers, directors, employees, agents, advisors and representatives
(collectively, the "BUYER INDEMNITEES") harmless from and against any and all
costs, expenses, losses, damages, fines or liabilities (including, without
limitation, reasonable attorneys' fees and expenses) ("BUYER DAMAGES") suffered,
sustained, incurred or paid by any Buyer Indemnitee in connection with,
resulting from, or arising out of:
(a) a breach or violation of any of the representations or
warranties of Seller contained in this Agreement or in any Seller Document
delivered pursuant hereto;
(b) a breach or violation of any of the covenants or agreements
of Seller contained in this Agreement or any Seller Document delivered pursuant
hereto;
(c) any liability or obligation arising out of or related to
the Excluded Assets or the Excluded Liabilities;
(d) any failure of Seller to comply with applicable bulk sales
laws or similar laws relating to notices to creditors; or
(e) any liability or obligation asserted against Buyer arising
out of any violation of any Environmental Law or Environmental Permit or arising
out of any other environmental matter, in each case to the extent existing prior
to the Closing in respect of the Business, other than with respect to the
property subject to the Fairchild Leases.
13.2. INDEMNIFICATION OF SELLER.
Buyer shall indemnify, defend and hold Seller and its Affiliates
and their respective officers, directors, employees, agents, advisors and
representatives (collectively, the "SELLER INDEMNITEES") harmless from and
against any and all costs, expenses, losses, damages, or liabilities (including,
without limitation, reasonable attorneys' fees and expenses) ("SELLER DAMAGES")
suffered, sustained, incurred or paid by any Seller Indemnitee in connection
with, resulting from, or arising out of:
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(a) a breach or violation of any of the representations or
warranties of Buyer contained in this Agreement or in any Buyer Document
delivered pursuant hereto;
(b) a breach or violation of any of the covenants or agreements
of Buyer contained in this Agreement or in any Buyer Document delivered pursuant
hereto;
(c) any liability or obligation arising out of the Assumed
Liabilities;
(d) except to the extent that any such Seller Damages relate to
a pre-Closing matter for which Buyer would be entitled to indemnification from
Seller pursuant to SECTION 13.1, the operation of the Business by Buyer, or
Buyer's ownership, use or operation (or failure to operate) of the Purchased
Assets after the Closing Date; or
(e) any liabilities arising out of events occurring after the
Closing relating to any Transferred Employees other than those expressly
retained herein by Seller; or
(f) any liability or obligation arising out of any Letters of
Credit after the Closing.
13.3. MATTERS INVOLVING THIRD PARTIES.
Upon obtaining knowledge of the institution of any action,
proceeding, or other event which could give rise to a claim of indemnity against
any party (the "INDEMNIFYING PARTY") hereunder, the party seeking
indemnification (the "INDEMNIFIED PARTY") shall promptly notify the Indemnifying
Party thereof; provided that the failure to give such notice shall not affect
the rights of the Indemnified Party hereunder except to the extent that the
Indemnifying Party shall have suffered actual damage by reason of such failure.
If such claim or demand relates to a claim or demand asserted by a third party
(a "THIRD PARTY CLAIM"), the Indemnifying Party shall have the right to employ
counsel of its choice reasonably satisfactory to the Indemnified Party to defend
such Third Party Claim; provided that the Indemnified Party may retain separate
co-counsel at its sole cost and expense and participate in the defense of the
claim. If the Indemnifying Party elects not to assume the defense of such Third
Party Claim or within a reasonable time after notice of such claim, fails to
defend such claim, the Indemnified Party shall (upon further notice) have the
right to undertake the defense thereof by counsel or other representatives
designated by it, such representation (including the compromise or settlement of
such Third Party Claim) to be undertaken on behalf of and for the account and
risk of the Indemnifying Party.
13.4. LIMITATION OF LIABILITY.
(a) Seller Liability. No liability for indemnification shall
arise on the part of Seller under this ARTICLE 13 with respect to any claim for
indemnification based upon clause (a) of SECTION 13.1 until the aggregate amount
of Buyer Damages for which indemnification is available under such clause (a)
exceeds $500,000 (the "BUYER THRESHOLD"), whereupon Buyer Indemnitees shall be
entitled to seek indemnification for the amount of such Buyer Damages (including
without limitation those included in the Buyer Threshold); provided, however,
that such limitation shall not apply to any liability for indemnification with
respect to any claim for indemnification based upon (i) fraud, (ii) any
misrepresentation or breach of a warranty which was actually known to be untrue
by Seller when made, or (iii) any misrepresentation or breach of a warranty
contained in SECTION 4.6 (Taxes). Notwithstanding the foregoing, in no event
shall the aggregate liability of Seller under this ARTICLE 13 with respect to
any
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claim for indemnification based upon clause (a) or clause (b) of SECTION 13.1
exceed fifteen percent (15%) of the Purchase Price.
(b) Buyer Liability. No liability for indemnification shall
arise on the part of Buyer under this ARTICLE 13 with respect to any claim for
indemnification based upon clause (a) of SECTION 13.2 until the aggregate amount
of Seller Damages for which indemnification is available under such clause (a)
exceeds $500,000 (the "SELLER THRESHOLD"), whereupon Seller Indemnitees shall be
entitled to seek indemnification for the amount of such Seller Damages
(including without limitation those included in the Seller Threshold); provided,
however, that such limitation shall not apply to any liability for
indemnification with respect to any claim for indemnification based upon (i)
fraud, or (ii) any misrepresentation or breach of a warranty which was actually
known to be untrue by Buyer when made. Notwithstanding the foregoing, in no
event shall the aggregate liability of Buyer under this ARTICLE 13 with respect
to any claim for indemnification based upon clause (a) or clause (b) of SECTION
13.2 exceed fifteen percent (15%) of the Purchase Price; provided that such 15%
limit shall not apply to (and in determining if such cap has been met, shall not
take into account) any claim based on the failure of Buyer to comply with its
obligations to (A) pay the Purchase Price pursuant to Section 3, or (B) pay
Transfer Taxes pursuant to SECTION 7.7.
13.5. EXCLUSIVE REMEDY.
The parties acknowledge that, except in the case of fraud, their
sole remedy after the Closing for any breach of any representation or warranty
contained in this Agreement shall be the indemnification provisions set forth in
this ARTICLE 13. Without limiting the generality of the foregoing, Buyer and
Seller hereby waive any statutory, equitable or common law rights relating to
any Environmental Liabilities and Costs.
13.6. TREATMENT OF INDEMNIFICATION PAYMENTS.
All indemnification payments made pursuant to this ARTICLE 13
shall be treated as an adjustment to the Purchase Price.
14. TERMINATION
14.1. TERMINATION.
Subject to the provisions of SECTION 14.2, this Agreement may be
terminated at any time before the Closing under any one or more of the following
circumstances:
(a) by mutual consent of Seller and Buyer;
(b) by Buyer, upon written notice to Seller, if there has been
a breach by Seller of any material representation, warranty, covenant or
agreement contained herein, or any such representation or warranty shall have
become untrue, and such breach has not been cured within thirty (30) days
following receipt by Seller of written notice of such breach;
(c) by Seller, upon written notice to Buyer, if there has been
a breach by Buyer of any representation, warranty, covenant or agreement
contained herein, or any such representation or
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warranty shall have become untrue, and such breach or condition has not been
promptly cured within thirty (30) days following receipt by Buyer of written
notice of such breach;
(d) by Buyer, upon written notice to Seller, if Seller shall
have failed to obtain all material consents required to be obtained by Seller in
order to permit the consummation of the transactions contemplated in this
Agreement, including, without limitation, any consent required in accordance
with SECTION 7.2 of this Agreement;
(e) by Seller, upon written notice to Buyer, if Buyer has
failed to obtain all material consents required to be obtained by Buyer in order
to permit the consummation of the transactions contemplated in this Agreement;
or
(f) by Seller or Buyer, if the Closing has not occurred on or
before November 15, 2000, by reason of the failure of any condition precedent
under ARTICLES 8, 9 or 10 through no fault of the terminating party, except that
if the Closing is delayed as a result of a second request for information
pursuant to the HSR Act, such date shall be extended to the date which is 60
days after the date of such second request.
14.2. EFFECT OF TERMINATION.
In the event of termination of this Agreement, as provided above,
this Agreement shall forthwith become void and there shall be no liability
hereunder on the part of Seller or Buyer, except for any party's liability
resulting from such party's breach of any representation, warranty, covenant or
agreement in this Agreement and except that the agreements with respect to
confidentiality contained in SECTION 7.1 and the agreement respecting expenses
contained in SECTION 15.13 shall survive the termination hereof.
15. MISCELLANEOUS
15.1. CERTAIN DEFINITIONS.
As used herein, the following terms have the meanings set forth
below:
"AFFILIATE" shall mean a Person that directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first Person. "Control" (including the terms
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
policies of a person, whether through the ownership of voting securities, by
contract or credit arrangement, as trustee or executor, or otherwise.
"APPLICABLE LAW" shall mean all applicable provisions of all (i)
constitutions, treaties, statutes, laws (including the common law), rules,
regulations, ordinances, codes or orders of any Governmental Authority, (ii)
Governmental Approvals and (iii) orders, decisions, injunctions, judgments,
awards and decrees of or agreements with any Governmental Authority.
"ASSIGNMENT AND ASSUMPTION OF LEASES" has the meaning given to it
in SECTION 9.7.
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"ASSUMED LIABILITIES" has the meaning given to it in SECTION 1.4.
"BID" has the meaning given to it in SECTION 1.2(b).
"BUSINESS" has the meaning given to it in the Recitals.
"BUYER BENEFIT PLANS" has the meaning given to it in SECTION
7.5(b).
"BUYER DOCUMENTS" shall mean, collectively, this Agreement, the
Assumption Agreement, the Sublease, the Assignment and Assumption of Leases, the
Manufacturing Agreement, the Services Agreement and all exhibits and schedules
attached hereto or thereto.
"BUYER DAMAGES" has the meaning given to it in SECTION 13.1.
"BUYER INDEMNITEES" has the meaning given to it in SECTION 13.1.
"CERCLA" the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, 42 U.S.C. Section 9601 et. seq.
"CFIUS" shall mean the Committee on Foreign Investment in the
United States under the Exon-Florio Provision.
"CLOSING" has the meaning given to it in SECTION 2.1.
"CLOSING DATE" has the meaning given to it in SECTION 2.1.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act
of 1985, P.L. 99-272, as amended.
"CODE" means the Internal Revenue Code of 1986, as amended, and
all laws and regulations promulgated pursuant thereto or in connection
therewith.
"CONTRACTS" means all agreements, contracts, leases, commitments,
understandings and other instruments and arrangements by which any of the
Purchased Assets are bound or to which Seller is a party or by which Seller is
bound primarily in connection with the Business or the Purchased Assets.
"COPYRIGHTS" has the meaning given to it in the definition of
Intellectual Property.
"COTS" means commercial off-the-shelf software licenses and
related services that are commercially available.
"COVERED RETURNS" has the meaning given to it in SECTION 4.6(a).
"DEFINED BENEFIT PLAN" means a Plan that is or was a "defined
benefit plan" as such term is defined in Section 3(35) of ERISA.
"DIVISION" has the meaning given to it in the Recitals.
"DOL" means the Department of Labor or its successors.
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"ENVIRONMENTAL LAWS" means all Applicable Laws relating to the
protection of the environment, to human and worker health and safety, or to any
emission, discharge, generation, processing, generation, treatment, storage,
abatement, remediation, manufacture, distribution, disposal, Release, threatened
Release or transportation of any Hazardous Substances, including, without
limitation, CERCLA, the Resource Conservation and Recovery Act, and similar
state laws,
"ENVIRONMENTAL PERMITS" means any federal, state and local permit,
license, registration, consent, order, administrative consent order,
certificate, approval or other authorization with respect to Seller necessary
for the conduct of the Business as currently conducted under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and all Applicable Laws promulgated pursuant thereto or in
connection therewith.
"ESOP" means any "employee stock ownership plan" as such term is
defined in Section 407(d)(6) of ERISA or Section 4975(e)(7) of the Code.
"ESTIMATED NET WORKING CAPITAL AMOUNT" has the meaning given to it
in SECTION 3.4.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and all Applicable Laws promulgated pursuant thereto or in connection
therewith.
"EXCLUDED ASSETS" has the meaning given to it in SECTION 1.3.
"EXCLUDED LIABILITIES" has the meaning given to it in SECTION 1.4.
"EXISTING EMPLOYEE" has the meaning given to it in SECTION
4.17(a).
"EXON-FLORIO PROVISION" shall mean the Exon-Florio provisions of
the Omnibus Trade and Competitiveness Act of 1988 as amended by the Defense
Authorization Act for Fiscal Year 1993, as amended.
"FAIRCHILD LEASES" means, collectively, (i) the Lease Agreement,
dated June 2, 2000, between Seller and Westphalia Center II Limited Partnership,
relating to an office building in the Seneca Meadows Corporate Center in
Montgomery County, Maryland and (ii) the Lease Agreement, dated June 2, 2000,
between Seller and Westphalia Center II Limited Partnership, relating to a
manufacturing building in the Seneca Meadows Corporate Center in Montgomery
County, Maryland.
"FAR" means the Federal Acquisition Regulation, Title 48, Chapter
1 of the Code of Federal Regulations.
"FINANCIAL STATEMENTS" has the meaning given to it in SECTION 4.5.
"FIRST CHOICE" has the meaning given to it in SECTION 3.5(a).
"GAAP" means generally accepted accounting principles in the
United States applied on a basis consistent with past practice.
"GOVERNMENT CONTRACT" has the meaning given to it in SECTION 4.12.
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<PAGE> 44
"GOVERNMENT CONTRACT NOVATION" means a legal instrument executed
by Seller, Buyer, and a Governmental Authority or the holder of a Government
Contract, by which, among other things, Seller guarantees performance of a
Government Contract, Buyer assumes all obligations under the Government
Contract, and the Governmental Authority or the holder of the Government
Contract recognizes the transfer of the Government Contract and related assets.
"GOVERNMENTAL APPROVAL" means any permit, approval, order,
consent, license, certificate, franchise, exemption or other authorization of,
with or to any Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state
or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including, without limitation, any government authority, agency,
department, board, commission or instrumentality of the United States, any State
of the United States or any political subdivision thereof, and any tribunal or
arbitrator(s) of competent jurisdiction, and any self-regulatory organization.
"HAZARDOUS SUBSTANCES" means any hazardous or toxic wastes,
substances, radiation, or materials (whether solids, liquids or gases) which are
listed or regulated under any Environmental Law, including but not limited to
asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls,
petroleum or petroleum-derived substances or wastes, radon gas or related
materials.
"HSR ACT" has the meaning given to it in SECTION 7.2.
"INDEMNIFIED PARTY" has the meaning given to it in SECTION 13.3.
"INDEMNIFYING PARTY" has the meaning given to it in SECTION 13.3.
"INTELLECTUAL PROPERTY" means any and all United States and
foreign: (i) patents and patent applications (including docketed patent
disclosures awaiting filing, reissues, reexaminations, renewals, provisionals,
divisions, continuations-in-part and extensions); (ii) trademarks, service
marks, trade names, trade dress, logos, business and product names, slogans, and
registrations and applications for registration thereof (the "TRADEMARKS");
(iii) copyrights (including software and data compilations) and registrations
thereof ("COPYRIGHTS"); and (iv) inventions, processes, designs, formulae,
computer software, trade secrets, know-how, industrial models, confidential and
technical information, manufacturing, engineering and technical drawings,
product specifications and confidential business information.
"INTELLECTUAL PROPERTY ASSETS" has the meaning given to it in
SECTION 4.15(a).
"INTERIM BALANCE SHEET" has the meaning given to it in SECTION
4.5.
"INTERIM BALANCE SHEET DATE" has the meaning given to it in
SECTION 4.5.
"INTERIM FINANCIAL STATEMENTS" has the meaning given to it in
SECTION 4.5.
"KNOW-HOW" has the meaning given to it in SECTION 1.2(c).
"KNOWLEDGE" will be deemed to be present with respect to Seller or
Buyer when the matter in question was brought to the attention of or, if due
diligence had been exercised, would have
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<PAGE> 45
been brought to the attention of, any executive officer of Seller, the Deputy
General Manager of the Division or the employees of Seller listed on SCHEDULE
7.5 on the one hand, or any executive officer of Buyer, on the other hand.
"LETTERS OF CREDIT" has the meaning given to it in SECTION 7.4.
"LIEN" means any mortgage, pledge, hypothecation, right of others,
claim, security interest, encumbrance, lease, sublease, license, occupancy
agreement, adverse claim or interest, easement, covenant, encroachment, burden,
title defect, title retention agreement, voting trust agreement, interest,
equity, option, lien, right of first refusal, charge or other restrictions or
limitations of any nature whatsoever, including but not limited to such as may
arise under any Seller Contracts or Government Contracts.
"MATERIAL ADVERSE EFFECT" means any event, occurrence, fact,
condition, change or effect that is materially adverse to the business,
operations, results of operations, financial condition, properties, assets or
liabilities of the Purchased Assets or the Business.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as such term is
defined in Section 3(37) of ERISA.
"NET WORKING CAPITAL" means, as of any date, the amount by which
(a) the current assets (excluding cash) of the Business on such date are greater
than (b) the sum of the long term capital lease obligation and the current
liabilities of the Business on such date, in each such case as determined using
accounting methods, practices and procedures as used in the preparation of the
Target Working Capital. If, as of any date, the amount referred to in clause (b)
of the first sentence of this paragraph is greater than the amount referred to
in clause (a) of such sentence, the amount of Net Working Capital as of such
date shall be a negative number.
"OTHER ARRANGEMENT" means a benefit program or practice providing
for bonuses, incentive compensation, vacation pay, severance pay, insurance,
restricted stock, stock options, employee discounts, company cars, tuition
reimbursement or any other perquisite or benefit (including, without limitation,
any fringe benefit under Section 132 of the Code) to employees, officers or
independent contractors of Seller that is not a Plan.
"MANUFACTURING AGREEMENT" has the meaning given to it in SECTION
9.6.
"PENSION PLAN" means an "employee pension benefit plan" as such
term is defined in Section 3(2) of ERISA.
"PERMITTED LIENS" means (i) Liens reserved against in the Interim
Balance Sheet, to the extent so reserved, except for Liens relating to, arising
out of or with respect to any Excluded Liabilities or Excluded Assets, (ii)
Liens for Taxes not yet due and payable or which are being contested in good
faith and by appropriate proceedings, (iii) liens created by, arising out of, or
specifically contemplated or permitted by this Agreement, or (iv) materialmen's,
mechanics', workmen's, repairmen's, employees' or other like liens arising in
the course of construction or in the ordinary course of operation or
maintenance, in each such case securing obligations which are not delinquent or
which are being contested in good faith and for which adequate reserves are
included in the Interim Balance Sheet or securing obligations which are bonded
in a reasonable manner.
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<PAGE> 46
"PERSON" means any natural person, firm, partnership, association,
corporation, company, trust, business trust, Governmental Authority or other
entity.
"PLAN" means any plan, program or arrangement, whether or not
written, that is or was an "employee benefit plan" as such term is defined in
Section 3(3) of ERISA and (a) which was or is established or maintained by
Seller; (b) to which Seller contributed or was obligated to contribute or to
fund or provide benefits; or (c) which provides or promises benefits to any
person who performs or who has performed services for Seller and because of
those services is or has been (i) a participant therein or (ii) entitled to
benefits thereunder.
"PRIME GOVERNMENT CONTRACTS" means a contract or contractual
action entered into by a Governmental Authority for the purpose of obtaining
supplies, materials, equipment, or services of any kind.
"PURCHASE PRICE" has the meaning given to it in SECTION 3.1.
"PURCHASED ASSETS" has the meaning given to it in SECTION 1.2, as
modified by SECTION 1.3.
"QUALIFIED PLAN" means a Pension Plan that satisfies the
requirements for Tax qualification described in Section 401 of the Code.
"REAL PROPERTY" has the meaning given to it in SECTION 1.2(d).
"RELEASE" means any releasing, disposing, discharging, injecting,
spilling, leaking, leaching, pumping, dumping, emitting, escaping, emptying,
seeping, dispersal, migration, transporting, placing and the like, including
without limitation, the moving of any materials through, into, or upon, any
land, soil, surface water, ground water or air, or otherwise entering into the
environment.
"REMEDIAL ACTION" means all actions to (i) clean up, remove,
treat, or in any other way remediate any Hazardous Substances; (ii) prevent or
mitigate the Release of Hazardous Substances; or (iii) sample, study,
investigate, or monitor any such Hazardous Substances.
"RESPONSIBLE CONTRACTING OFFICER" means, with respect to any Prime
Government Contract, the Person identified as such with respect thereto in FAR
Section 42.1202(a) or applicable equivalent provision.
"RETENTION" has the meaning given to it in SECTION 3.2.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
all Applicable Laws promulgated pursuant thereto or in connection therewith.
"SELECTED FIRM" has the meaning given to it in SECTION 3.5(a).
"SELLER CONTRACTS" has the meaning given to it in SECTION 4.11(a).
"SELLER DOCUMENTS" shall mean, collectively, this Agreement, the
Bill of Sale, the Assumption Agreement, the Sublease, the Assignment and
Assumption of Leases, the Manufacturing Agreement and the Services Agreement and
all exhibits and schedules attached hereto or thereto.
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<PAGE> 47
"SELLER DAMAGES" has the meaning given to it in SECTION 13.2.
"SELLER INDEMNITEES" has the meaning given to it in SECTION 13.2.
"SERVICES AGREEMENT" has the meaning given to it in SECTION 9.6.
"SOFTWARE" has the meaning given to it in SECTION 1.2(h).
"SUBLEASE" has the meaning given to it in SECTION 9.5.
"TARGET WORKING CAPITAL" means $22,625,000.
"TAX" any federal, state, provincial, local, foreign, or any other
income, alternative, minimum, accumulated earnings, personal holding company,
franchise, capital stock, net worth, capital, profits, windfall profits, gross
receipts, value added, sales, use, goods and services, excise, customs duties,
transfer, conveyance, mortgage, registration, stamp, documentary, recording,
premium, severance, environmental (including taxes under Section 59A of the
Code), real property, personal property, ad valorem, intangibles, rent,
occupancy, license, occupational, employment, unemployment insurance, social
security, disability, workers' compensation, payroll, health care, withholding,
estimated or other similar tax, duty or other governmental charge or assessment
or deficiencies thereof, (including all interest and penalties thereon and
additions thereto whether disputed or not).
"TAX RETURN" any return, report declaration, form, claim for
refund or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"THIRD PARTY CLAIM" has the meaning given to it in SECTION 13.3.
"TITLE I PLAN" means a Plan that is subject to Title I of ERISA.
"TRADEMARKS" has the meaning given to it in the definition of
Intellectual Property.
"TRANSFER TAXES" has the meaning given to it in SECTION 7.7.
"TRANSFERRED EMPLOYEE" has the meaning given to it in SECTION
7.5(a).
"U.S. GOVERNMENT" means the United States Government, including
any agencies, commissions, branches, instrumentalities and departments thereof.
"WARN ACT" means the Worker Adjustment and Retraining Notification
Act, and all Applicable Laws promulgated pursuant thereto or in connection
therewith.
"WELFARE PLAN" means an "employee welfare benefit plan" as such
term is defined in Section 3(1) of ERISA.
"WITHHOLDING TAXES" has the meaning given to it in SECTION 4.6(a).
"YEAR END FINANCIAL STATEMENTS" has the meaning given to it in
SECTION 4.5.
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<PAGE> 48
15.2. WRITTEN AGREEMENT TO GOVERN.
Except for the Confidentiality Agreement, dated July 11, 2000,
between Buyer and Seller, this Agreement (together with the Schedules and
Exhibits hereto and the other instruments and documents delivered pursuant
hereto) sets forth the entire understanding and supersedes all prior oral and
written agreements among the parties relating to the subject matter contained
herein, and merges all prior discussions among them.
15.3. SEVERABILITY.
The parties expressly agree that it is not their intention to
violate any public policy, statutory or common laws, rules, regulations,
treaties or decisions of any Governmental Authority. If any provision of this
Agreement is judicially or administratively interpreted or construed as being so
in violation, such provision shall be inoperative and the remainder this
Agreement shall remain binding upon the parties hereto.
15.4. NOTICES AND OTHER COMMUNICATIONS.
Any notice or other communication required, contemplated or
permitted by this Agreement by any party shall be in writing and shall be deemed
served (a) when personally delivered, (b) when transmitted via facsimile machine
to the party for whom it is intended at the number shown below, (c) on the next
business day after delivery to a reputable overnight courier for next business
day delivery, or (d) five business days after deposit in the mail, registered or
certified mail, return receipt requested, postage prepaid, addressed, in the
case of deliveries made pursuant to clause (c) or (d), as follows:
If to Buyer:
Smiths Industries plc
765 Finchley Road
London NW11 8DS, England
Attention: Alan Smith
Fax No.: 011-44-208-458-8412
With copies (which shall not constitute notice) to:
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, Pennsylvania 19103
Attention: Michael J. Pedrick
Fax No.: (215) 963-5299
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<PAGE> 49
If to Seller:
Orbital Sciences Corporation
21700 Atlantic Boulevard
Dulles, Virginia 20166
Attn: Legal Department
Fax No.: (703) 406-5572
With a copy (which shall not constitute notice) to:
Hogan & Hartson L.L.P.
555 Thirteenth Street, N.W.
Washington, D.C. 20004-1109
Attn: Eve N. Howard, Esq.
Fax No.: (202) 637-5910
or to such other address or addresses as any addressee may designate for itself
by written notice served in accordance herewith.
15.5. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, and
each counterpart shall constitute an original instrument, but all such separate
counterparts shall constitute one and the same agreement.
15.6. LAW TO GOVERN.
The validity, construction and enforceability of this Agreement
shall be governed in all respects by the laws of the State of New York, without
regard to its conflict of law rules.
15.7. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that no party may assign its rights and obligations hereunder
without the prior written consent of the other party hereto.
15.8. INTERPRETATION.
The masculine, feminine or neuter pronouns used herein shall be
interpreted without regard to gender, and the use of the singular or plural
shall be deemed to include the other whenever the context so requires. The
headings in this Agreement are inserted for convenience of reference only and
shall not be a part of or control or affect the meaning of this Agreement.
Unless otherwise expressly stated herein, all references herein to Articles,
Sections and paragraphs are to Articles, Sections and paragraphs in this
Agreement and all references herein to Schedules and Exhibits are to Schedules
and Exhibits to this Agreement. The phrase "including" shall mean "including,
without limiting the generality of the foregoing." The parties have each been
represented by counsel in connection with the negotiation of this Agreement. The
fact that any provision hereof may have been drafted by counsel for a given
party shall not be taken into consideration in interpreting such provision.
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<PAGE> 50
15.9. SCHEDULES AND EXHIBITS.
The Schedules and Exhibits referred to herein and attached to this
Agreement are incorporated herein by such reference as if fully set forth in the
text hereof.
15.10. PUBLICITY.
No party shall announce or disclose publicly the terms or
provisions of this Agreement or the transactions contemplated hereby without the
prior written approval of all other parties, except as such disclosure may be
required by Applicable Law (subject to giving the other parties notice as
promptly as possible of the intention to make such disclosure) and except that
this provision shall not prohibit any party from disclosing such terms or
provisions to its attorneys, accountants, lenders, bankers, financial advisors
or any other advisor or consultant.
15.11. MODIFICATION.
The parties to this Agreement may, by mutual written consent,
executed by the authorized officers of Buyer and Seller, modify or supplement
this Agreement in such manner as may be mutually agreed upon by them in writing.
15.12. WAIVER OF PROVISIONS.
The terms, covenants, representations, warranties and conditions
of this Agreement may be waived only by a written instrument executed by the
party waiving compliance. The failure of any party at any time to require
performance of any provisions hereof shall, in no manner, affect the right at a
later date to enforce the same. No waiver by any party of any condition, or
breach of any provision, term, covenant, representation or warranty contained in
this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be or construed as a further or continuing waiver of any such
condition or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
15.13. EXPENSES.
Except as otherwise provided in this Agreement, each party shall
bear its own expenses incident to this Agreement and the transactions
contemplated hereby, including without limitation, all fees of counsel,
accountants and consultants provided that, if any party breaches this Agreement
any non-breaching party shall be entitled to reimbursement from the breaching
party of its reasonable attorneys' fees incurred in connection with the
enforcement of its rights hereunder (whether or not judicial proceedings are
instituted).
15.14. FURTHER ASSURANCES.
At any time on or after the Closing, the parties hereto shall each
perform such acts, execute and deliver such instruments, assignments,
endorsements and other documents and do all such other things consistent with
the terms of this Agreement as may be reasonably necessary to accomplish the
transactions contemplated in this Agreement or otherwise carry out the purpose
of this Agreement and the other Buyer Documents and Seller Documents.
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<PAGE> 51
15.15. BULK TRANSFER LAWS.
Notwithstanding any other provision of this Agreement, Buyer
hereby waives compliance by Seller with the provisions of any so-called Bulk
Transfer Law of any jurisdiction in connection with the transactions
contemplated hereby.
15.16. PARENT GUARANTEE.
Smiths Industries Aerospace & Defense Systems Inc., the direct or
indirect holder of 100% of the capital stock of Buyer, hereby unconditionally
guarantees, irrevocably and continually, all the rights, duties and obligations
of Buyer hereunder and under the other Buyer Documents, and the financial
obligations under this Agreement and the other Buyer Documents shall be joint
and several obligations of Buyer and Smiths Industries Aerospace & Defense
Systems Inc.
(SIGNATURES APPEAR ON THE FOLLOWING PAGE)
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<PAGE> 52
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf by its officer thereunto duly authorized,
all on or as of the day and year first above written.
SELLER
ORBITAL SCIENCES CORPORATION
By: /s/ David W. Thompson
----------------------------------
Name: David W. Thompson
Title: Chairman of the Board and Chief
Financial Officer
BUYER
SIJAG ACQUISITION INC.,
a subsidiary of Smiths Industries Aerospace
& Defense Systems, Inc.
By: /s/ Robin J. Taunt
---------------------------------
Name: Robin J. Taunt
Title: Authorized Signatory
PARENT
SMITHS INDUSTRIES AEROSPACE & DEFENSE
SYSTEMS INC. (SOLELY WITH RESPECT TO THE
OBLIGATIONS SET FORTH IN SECTIONS 7.4, 7.11
AND 15.16 OF THIS AGREEMENT)
By: /s/ Robin J. Taunt
---------------------------------
Name: Robin J. Taunt
Title: Authorized Signatory