ASSET PURCHASE AGREEMENT
between
MOTOROLA, INC.,
a Delaware corporation,
and
GENERAL DYNAMICS CORPORATION,
a Delaware corporation.
Dated as of August 6, 2001
ASSET PURCHASE AGREEMENT.....................................................................1
ASSUMPTION OF LIABILITIES....................................................................1
1.1 Acquired Assets...............................................................1
1.2 Excluded Assets...............................................................3
1.3 Assumed Liabilities...........................................................5
1.4 Excluded Liabilities..........................................................6
PURCHASE PRICE...............................................................................6
2.1 Purchase Price................................................................6
2.2 Allocation....................................................................7
2.3 Transaction Taxes.............................................................7
REPRESENTATIONS AND WARRANTIES OF SELLER.....................................................7
3.1 Organization, Qualification...................................................7
3.2 Due Execution.................................................................8
3.3 No Violations.................................................................8
3.4 Taxes.........................................................................9
3.5 Litigation....................................................................9
3.6 Acquired Assets..............................................................10
3.7 Real Property................................................................10
3.8 Compliance with Laws.........................................................11
3.9 Material Contracts...........................................................11
3.10 Government Contracts.........................................................13
3.11 Permits......................................................................14
3.12 Clearances...................................................................14
3.13 Financial Statements.........................................................14
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3.14 Absence of Undisclosed Liabilities...........................................14
3.15 Absence of Certain Changes or Events.........................................15
3.16 Brokers......................................................................15
3.17 Warranty Disclaimer..........................................................15
REPRESENTATIONS AND WARRANTIES OF BUYER.....................................................16
4.1 Organization; Qualification..................................................16
4.2 Due Execution................................................................16
4.3 No Violations................................................................16
4.4 Litigation...................................................................17
4.5 Financing....................................................................17
4.6 Eligibility..................................................................17
4.7 Foreign Ownership............................................................17
4.8 Brokers......................................................................17
CLOSING.....................................................................................17
5.1 Closing......................................................................17
5.2 Deliveries by Seller.........................................................18
5.3 Deliveries by Buyer..........................................................18
5.4 Consummation of Transactions.................................................19
CONDITIONS PRECEDENT TO OBLIGATIONS TO CLOSE................................................19
6.1 Conditions Precedent to Buyer's Obligations..................................19
6.2 Conditions Precedent to Seller's Obligations.................................20
INDEMNIFICATION.............................................................................21
7.1 Indemnification by Seller....................................................21
7.2 Indemnification by Buyer.....................................................21
7.3 Limitation on Indemnification Obligation.....................................21
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7.4 Survival.....................................................................22
7.5 Procedures for Indemnification...............................................22
7.6 Ancillary Agreements.........................................................23
COVENANTS...................................................................................23
8.1 Operation of the Business....................................................23
8.2 Access.......................................................................25
8.3 Cooperation; Records and Documents...........................................25
8.4 Novation of Government Contracts.............................................27
8.5 Assignment of Contracts......................................................28
8.6 Confidentiality..............................................................29
8.7 Filings and Authorizations...................................................30
8.8 Notification of Breach.......................................................30
8.9 Post-Closing Refunds.........................................................31
8.10 Noncompetition Agreement.....................................................31
8.11 Real Property Matters........................................................33
8.12 Settlement of Indirect Expense Rates.........................................34
8.13 Additional Discounts.........................................................35
TERMINATION.................................................................................35
9.1 Termination of Agreement.....................................................35
9.2 Effect of Termination........................................................35
GENERAL PROVISIONS..........................................................................35
10.1 Expenses.....................................................................35
10.2 Risk of Loss.................................................................36
10.3 Notices......................................................................36
10.4 Nondisclosure................................................................37
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10.5 Dispute Resolution...........................................................37
10.6 Limitation of Liability......................................................37
10.7 Bulk Sales Laws..............................................................37
10.8 Provisions in Ancillary Agreements to Govern.................................38
10.9 Miscellaneous................................................................38
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement"), made as of August 6,
2001, between Motorola, Inc. ("Seller"), a Delaware corporation, and General
Dynamics Corporation ("Buyer"), a Delaware corporation.
WITNESSETH:
WHEREAS, Seller, designs, develops, manufactures, produces, provides,
integrates and sells secure communication and information products, systems and
services, including integrated command, control, communication, computer,
intelligence, surveillance, and reconnaissance systems; software-defined radio
systems; high-assurance security and encryption products and services;
integrated communications systems; and specialized restricted space payloads,
for government and military enterprises in domestic and international markets
through its Integrated Information Systems Group (the "Group"); and
WHEREAS, Buyer desires to acquire substantially all of the assets,
business and operations of the Group and is willing to assume certain specified
liabilities of the Group, and Seller is willing to convey and assign the same
all on the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements set forth below, the
parties agree with legal and binding effect as follows:
DEFINITIONS
As used in this Agreement, capitalized terms shall have the meanings set
forth or referenced in Exhibit A or elsewhere herein.
ARTICLE I
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
1.1 Acquired Assets. Upon the terms and subject to the conditions of
this Agreement, Seller hereby agrees to sell, assign (but only to the extent
assignable), transfer, convey and deliver (or, where applicable, will cause its
Affiliates to sell, assign (but only to the extent assignable), transfer, convey
and deliver) to Buyer, and Buyer hereby agrees to purchase, acquire and accept
from Seller or Seller's Affiliates on the Closing Date the assets, properties,
rights, contracts and claims of Seller or its Affiliates used or held for use
exclusively in the business and operation of the Group or otherwise listed or
described in clauses (a) through (o) below (but not the Excluded Assets), free
and clear of all Liens, except for Permitted Liens (collectively, the "Acquired
Assets"):
(a) Contracts. Except as set forth on Schedule 1.2(n), all
contracts, subcontracts, bailment and teaming agreements or arrangements, joint
venture agreements, basic ordering agreements, multiple award schedule
contracts, pricing agreements, letter contracts,
purchase or delivery orders, change orders, non-disclosure agreements, other
contractual agreements, "other transactions" with the United States Government,
and all other contracts, agreements, commitments, leases and licenses to which
Seller or any of its Affiliates is a party entered into by or through the Group
or any of its divisions or which is listed in the Group's contracts database,
the Group's Eclipse database for radio and secure products or the Group's Oracle
database for test equipment (collectively, the "Contracts"), including without
limitation (i) the Government Contracts and (ii) the Material Contracts;
(b) Personal Property Leases and Software Licenses. Except as
set forth on Schedule 1.2(n), (i) all leases with respect to Tangible Personal
Property to which Seller or any of its Affiliates is a party entered into by or
through the Group or any of its divisions or which is listed in the Group's
contracts database, the Group's Eclipse database for radio and secure products
or the Group's Oracle database for test equipment (the "Personal Property
Leases") and (ii) the third party software licenses and programs listed on
Schedule 1.1(b) (the "Software Licenses");
(c) Tangible Personal Property. All tangible personal property
(including machinery, equipment, computers, laboratory and test equipment and
apparatus, furniture, furnishings, tools, dies and vehicles) owned by Seller or
any of Seller's Affiliates and set forth in the fixed asset ledger maintained by
the Group (as the same will be adjusted as indicated on Schedule 1.1(c)), in the
case of capital assets, or otherwise used or held for use primarily in relation
to the business or operation of the Group with respect to non-capital assets,
including without limitation those items listed on Schedule 1.1(c) (the
"Tangible Personal Property"), including any purchases and less any retirements
or dispositions of Tangible Personal Property made between the Balance Sheet
Date and the Closing Date in the ordinary course of business, consistent with
past practices of Seller;
(d) Inventory. All inventory, wherever located, including raw
and recycled materials, work-in-progress and finished goods inventories,
supplies and spare parts and used or held for use primarily in relation to the
Acquired Assets or the business or operation of the Group ("Inventory"), except
any sales, retirements or dispositions of Inventory made between the Balance
Sheet Date and the Closing Date in the ordinary course of business, consistent
with past practices of Seller;
(e) Real Property. (i) All real property and interests in real
property owned by Seller in Scottsdale, Arizona, used primarily in connection
with the business or operation of the Group and listed or described on Schedule
1.1(e), including all buildings, fixtures, structures and other improvements of
any kind or nature situated thereon, together with all easements, appurtenances,
leases, tenancies, options, rights-of-way and other real property rights and
interests relating thereto (the "Owned Premises"), (ii) the real property leases
listed or described on Schedule 1.1(e) (the "Assumed Real Property Leases") and
(iii) the Motorola Credit Union Ground Lease and Seller's residual interest, if
any, in the building, fixtures, structures and other improvements on the land
relating thereto;
(f) Receivables. All accounts and notes receivable and
unbilled revenues to the extent arising from the sale of goods or materials and
the rendering of services in connection
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with the business or operation of the Group, including related deposits,
security and collateral therefor and including any of the same that are payable
by other groups, sectors or Affiliates of Seller (the "Accounts Receivable"),
together with all unpaid interest accrued thereon, if any, as the same exist on
the Closing Date;
(g) Business Records. All books and records of Seller or
Seller's Affiliates to the extent relating to the Acquired Assets or the
business or operation of the Group including, without limitation, all manuals,
data, sales and advertising materials, customer and supplier lists and reports,
sales, distribution and purchase correspondence, engineering drawings, notebooks
and logbooks, and all original and duplicate copies of the foregoing (the "Books
and Records");
(h) Intellectual Property. The rights of Seller and Seller's
Affiliates transferred to Buyer pursuant to the Intellectual Property Agreement;
(i) Permits. To the extent assignable to Buyer and not
required for the ownership or operation of a business or assets to be retained
by Seller or Seller's Affiliates, the Permits;
(j) Prepaid Charges. All deferred and prepaid charges,
recoverable deposits, advances, expenses, sums and fees of Seller and Seller's
Affiliates to the extent related to the Group or the Assumed Liabilities arising
from payments made prior to the Closing Date for goods or services where such
goods or services have not been received as of the Closing Date;
(k) Claims. Except for those claims of Seller relating to the
sale of bomb fuzes to the United States Government under FMU-140, all rights,
claims or causes of action of Seller or any of Seller's Affiliates against Third
Parties to the extent arising out of the business or operation of the Group, the
Acquired Assets or the Assumed Liabilities;
(l) Employee Benefits. Those assets under the employee
benefit plans of Seller to be transferred to Buyer pursuant to the Employee
Matters Agreement;
(m) Telephone Numbers. All of Seller's interests in the
telephone numbers listed on Schedule 1.1(m); and
(n) Goodwill. The goodwill of the Group.
1.2 Excluded Assets. Notwithstanding the foregoing, Seller does not
hereby sell, assign, transfer or convey, and Buyer does not hereby accept or
purchase any of the assets, properties, rights, contracts and claims of Seller
or its Affiliates except for the Acquired Assets, and, without limiting the
generality of the foregoing, the following assets, properties, rights, contracts
and claims of Seller or its Affiliates shall not be sold, assigned, transferred
or conveyed to Buyer.
(a) Cash. Cash and cash equivalents (including any marketable
securities or certificates of deposit);
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(b) Affiliate Transactions. Except for Accounts Receivable as
set forth in Section 1.1(f), any agreements, transactions, accounts, contracts,
commitments or arrangements with other groups, sectors, or Affiliates of Seller;
(c) Claims. Any rights, claims or causes of action of Seller
and Seller's Affiliates against Third Parties to the extent arising in
connection with the Excluded Assets or the Excluded Liabilities including,
without limitation, those claims of Seller relating to the sale of bomb fuzes to
the United States Government under FMU-140;
(d) Employee Benefits. The assets and rights under the
employee benefit plans of Seller other than the assets to be transferred to
Buyer pursuant to the Employee Matters Agreement;
(e) Insurance. Policies of insurance and any proceeds or
return of premiums thereunder;
(f) Tax Refunds. All claims, rights and interests of Seller
and Seller's Affiliates in and to any refunds for Taxes relating to the Group,
the Owned Premises, the Assumed Real Property Leases or the other Acquired
Assets for periods ending on or prior to the Closing Date;
(g) Corporate Documents. Seller's corporate charter, seal,
minute books, stock record books, and other similar documents relating to the
organization, maintenance and existence of Seller or any of Seller's Affiliates;
(h) Transaction Records. Any records prepared in connection
with the transfer of the Acquired Assets, including bids received from others
and analyses relating to the Group and the Acquired Assets prepared in
connection with the transfer of the Acquired Assets;
(i) Company Name. Any trade name, trademark, service mark or
logo using or incorporating the name "Motorola" or any derivations thereof;
(j) Agreement Rights. Any rights of Seller under or pursuant
to this Agreement, the Ancillary Agreements and any other instrument between
Seller and Buyer or their respective Affiliates entered into pursuant to this
Agreement or the transactions contemplated hereby;
(k) Records and Documents. All records and documents to the
extent relating to the Excluded Assets or the Excluded Liabilities, including
without limitation any Books and Records (including Books and Records relating
to the Iridium Claims), to the extent such Books and Records relate to Excluded
Assets or Excluded Liabilities and are covered by the attorney-client privilege,
the work product doctrine, or any other judicially recognized privilege,
protection or immunity from disclosure (collectively, "Protected Materials"), it
being expressly understood and agreed (i) that Seller does not intend to waive
any such privilege, protection or immunity but rather intends to preserve all
such privileges, protections and/or immunities and (ii) that Buyer shall
promptly notify Seller in the event that, after the Closing Date, Buyer
discovers
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any Books and Records which Buyer reasonably believes constitute
Protected Materials which have been inadvertently transferred from Seller to
Buyer;
(l) Ownership Interests. The Certicom Investment;
(m) Scheduled Excluded Assets. Any of the assets listed on
Schedule 1.2(m); and
(n) Scheduled Excluded Contracts. Any of the contracts listed
on Schedule 1.2(n).
1.3 Assumed Liabilities. Upon the terms and subject to the conditions
of this Agreement, Buyer hereby agrees to assume, perform, pay and discharge, in
accordance with the respective terms and subject to the respective conditions
thereof, the following liabilities and obligations of Seller relating to or
arising out of the business or operation of the Group or the Acquired Assets,
excluding the Excluded Liabilities (the "Assumed Liabilities"):
(a) Liabilities. All liabilities, debts, obligations,
judgments, fines, penalties, claims and Proceedings relating to the business or
operation of the Group or the Acquired Assets, whether accrued, liquidated,
contingent, matured or unmatured, arising out of events occurring after the
Closing Date;
(b) Accounts Payable. All accounts payable and accrued payment
obligations of Seller to the extent relating to or arising out of the business
or operation of the Group, including any of the same that are payable to other
groups, sectors or Affiliates of Seller (the "Accounts Payable"), existing as of
the Closing Date (whether arising prior to or on the Closing Date);
(c) Contracts. All liabilities, obligations and Proceedings
arising under the Contracts, including without limitation the Government
Contracts, the Material Contracts, the Personal Property Leases, the Software
Licenses and the Assumed Real Property Leases, whether incurred or arising prior
to, on or after the Closing Date, but excluding (i) any liability or obligation
relating to or involving the sale by the Group of bomb fuzes to the United
States Government under FMU-140 or (ii) any other liability or obligation
arising out of criminal conduct or civil fraud occurring on or prior to the
Closing Date;
(d) Warranty Claims. Any and all claims and Proceedings
relating to warranty obligations or services or claims of manufacturing or
design defects with respect to any product or service sold or provided by the
Group whether prior to, on, or after the Closing Date, whether or not such
claims or Proceedings were accrued, liquidated, contingent, or known or unknown
to Seller at or prior to the Closing Date;
(e) Employment. Any liability or obligation to the extent
provided in the Employee Matters Agreement with respect to the subject matters
covered thereby;
(f) Environmental. Any liability or obligation to the extent
provided in the Environmental Matters Agreement with respect to the subject
matters covered thereby; and
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(g) Intellectual Property. Any liability or obligation to the
extent provided in the Intellectual Property Agreement with respect to the
subject matters covered thereby.
1.4 Excluded Liabilities. Notwithstanding anything to the contrary in
this Agreement or the Ancillary Agreements, Buyer shall not assume or be
obligated to pay, perform or otherwise assume or discharge any liabilities or
obligations of Seller or any of its Affiliates, whether direct or indirect,
known or unknown, or absolute or contingent, except for the Assumed Liabilities
(all of such liabilities and obligations not so assumed being referred to herein
as the "Excluded Liabilities"), and, without limiting the generality of the
foregoing, the following obligations and liabilities relating to the Group or
the Acquired Assets shall not be assumed by Buyer and shall be retained by
Seller:
(a) Certain Claims. Any liability or obligation in respect of
the Proceedings described on Schedule 1.4(a);
(b) Taxes. Any Taxes relating to the Group, the Owned
Premises, the Assumed Real Property Leases or the other Acquired Assets owed for
periods ending on or prior to the Closing Date;
(c) Indebtedness. Any liability or obligation of Seller in
respect of indebtedness for borrowed money;
(d) Excluded Assets. Any liability or obligation relating to
the Excluded Assets;
(e) Employees. Any liability or obligation not expressly
assumed by Buyer pursuant to the Employee Matters Agreement with respect to the
subject matters covered thereby;
(f) Environmental. Any liability or obligation not expressly
assumed by Buyer pursuant to the Environmental Matters Agreement with respect to
the subject matters covered thereby;
(g) Intellectual Property. Any liability or obligation not
expressly assumed by Buyer pursuant to the Intellectual Property Agreement with
respect to the subject matters covered thereby; and
(h) Scheduled Excluded Liabilities. All of the liabilities
and obligations set forth on Schedule 1.4(h).
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. At the Closing, in consideration of the sale,
transfer, assignment, conveyance and delivery by Seller of the Acquired Assets
to Buyer, Buyer shall assume the Assumed Liabilities and cause to be delivered
the sum of $825,000,000 (the "Purchase Price") to
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Seller by bank wire transfer in immediately available funds to an account which
shall be designated in writing by Seller at least two Business Days prior to the
Closing Date.
2.2 Allocation
(a) Within 120 days after the Closing, Buyer will deliver to
Seller a statement (the "Allocation Statement") prepared in accordance with
Section 2.2(b), setting forth its calculation of the amount of the total
consideration allocable to the Acquired Assets acquired at the Closing. Seller
will review the Allocation Statement and, to the extent Seller disagrees in good
faith with the content of the Allocation Statement, Seller will inform Buyer of
such disagreement within 30 days after receipt of the Allocation Statement.
Seller and Buyer will attempt to resolve any such disagreement. If Seller and
Buyer are unable to reach a good faith agreement on the content of the
Allocation Statement within 180 days of the Closing Date, Seller and Buyer shall
each use its own allocation statement.
(b) The Allocation Statement will be prepared in accordance
with Section 1060 of the Code and the rules and regulations promulgated
thereunder.
(c) If Buyer and Seller agree on the Allocation Statement,
Buyer and Seller shall report the allocation of the total consideration among
the Acquired Assets in a manner consistent with the Allocation Statement and
shall act in accordance with the Allocation Statement in the preparation and
filing of all Tax returns (including filing Form 8594 with their respective
Federal income tax returns for the taxable year that includes the Closing Date
and any other forms or statements required by the Code, Treasury regulations,
the Internal Revenue Service or any applicable state or local taxing authority).
(d) Buyer and Seller will promptly inform one another of any
challenge by any taxing authority to any allocation made pursuant to this
Section 2.2 and agree to consult with and keep one another informed with respect
to the status of, and any discussion, proposal or submission with respect to,
such challenge.
2.3 Transaction Taxes. All sales, use, transfer, recording, value
added, and any other transaction taxes and charges, if any, arising out of the
transfer of the Acquired Assets to Buyer will be shared equally by Buyer and
Seller. Buyer and Seller agree to cooperate in obtaining any sales or transfer
tax exemptions.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer, as of the date hereof,
and as of the Closing Date, as follows:
3.1 Organization, Qualification. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. Seller has the requisite corporate power to own its properties and
carry on the business and operations of the Group as now conducted by Seller.
Seller is duly licensed or qualified to do business and is in good
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standing in each jurisdiction in which it is required to be licensed or
qualified to do business and in which the failure to be so licensed or qualified
or in good standing would have a Material Adverse Effect or a material adverse
effect on the ability of Seller to perform its obligations under this Agreement
and the Ancillary Agreements. Neither Seller nor any of its Affiliates owns or
holds the right to acquire any shares of stock or any other investment or equity
interest in any other corporation, partnership, joint venture or other entity to
which Buyer would become the successor as a result of the consummation of the
transactions contemplated by this Agreement and the Ancillary Agreements.
3.2 Due Execution. All corporate acts required to be taken by Seller
to authorize the execution and delivery of this Agreement, the Ancillary
Agreements and all instruments and transactions contemplated hereby have been
duly and properly taken. This Agreement has been, and the Ancillary Agreements,
documents and instruments to be delivered by Seller at Closing will be, duly and
validly executed and delivered by Seller and constitute the valid and legally
binding obligations of Seller enforceable against it in accordance with their
respective terms, except in each case as such enforceability may be limited by
bankruptcy, moratorium, insolvency, reorganization or other similar laws
affecting or limiting the enforcement of creditors rights generally and except
as such enforceability is subject to general principles of equity.
3.3 No Violations.
(a) The execution, delivery and performance of this Agreement
and the Ancillary Agreements by Seller and the consummation of the transactions
contemplated hereby and thereby do not and will not: (i) conflict with or result
in a breach or violation of any provision of Seller's certificate of
incorporation or by-laws or of any statute, rule, regulation or ordinance
applicable to Seller, (ii) conflict with or violate or result in a breach of or
constitute a default (or an event that is reasonably expected, upon the passage
of time or the giving of notice, or both, to constitute a default) under any
provision of, result in the acceleration or cancellation of any obligation
under, or give rise to a right by any party to terminate or amend its
obligations under, any mortgage, deed of trust, note, loan, indenture, lien,
lease, agreement, instrument, order, judgment, decree or other arrangement or
commitment to which Seller is a party or by which it or its assets or properties
are bound, or (iii) conflict with or violate any order, judgment, decree, rule
or regulation of any court or any Governmental Authority having jurisdiction
over Seller or any of the Acquired Assets, except in each case for (A) such
conflicts, breaches, violations or defaults as are not reasonably expected to
result in a Material Adverse Effect; or (B) the need to obtain the consents,
approvals and filings set forth on Schedule 3.3.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Person is required by Seller in
connection with the execution and delivery of this Agreement and the Ancillary
Agreements or the consummation of the transactions contemplated hereby or
thereby, except for (i) any of the same the failure of which to obtain or make
is not reasonably expected to result in a Material Adverse Effect, (ii) any
filings required to be made under the HSR Act, and (iii) consents, approvals or
other actions of Third Parties identified on Schedule 3.3 which are required to
transfer or assign to Buyer any Acquired Assets or assign the benefits of or
delegate performance with regard thereto.
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3.4 Taxes.
(a) Except as set forth on Schedule 3.4, with respect to the
business or operation of the Group and the Acquired Assets: (i) Seller has filed
or will file all federal, state, local and foreign tax returns when and as
Seller has been or is required by law to file for periods ending on or before
the Closing Date; (ii) Seller has paid, and will pay for all periods ending on
or before the Closing Date, all taxes (whether or not shown on any such tax
return) when and as the same shall be due and payable by Seller, including
without limitation all foreign or domestic income, excise, unemployment, social
security, occupation, franchise, real and personal property, ad valorem, sales
and use taxes and all penalties and interest in respect thereof ("Taxes") and
all Taxes not yet due and payable are and shall be properly accrued for in the
financial records of the Group; and (iii) Seller has withheld and paid over, and
will withhold and pay over for all periods ending on or before the Closing Date,
all federal, state, local and foreign withholdings in respect of Taxes required
by law.
(b) Except as disclosed on Schedule 3.4, none of the Acquired
Assets: (i) secures any debt the interest on which is tax-exempt under Code
Section 103(a); (ii) is "tax exempt use property" within the meaning of Code
Section 168(h); (iii) is used predominantly outside of the United States within
the meaning of U.S. Proposed Treasury Regulation Section 1.168-2(g)(5); (iv) is
"tax exempt bond financed property" within the meaning of Code Section
168(g)(5); (v) is "limited use property" within the meaning of Revenue Procedure
76-30 as modified by Revenue Procedure 81-71; or (vi) will be treated as owned
by another Person pursuant to the provisions of Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended and in effect prior to the enactment
of the Tax Equity and Fiscal Responsibility Act of 1982.
(c) The transactions contemplated by this Agreement are not
subject to Tax withholding pursuant to the provisions of Code Section 3406 or
Subchapter A of Chapter 3 of the Code. Seller is a United States Person within
the meaning of the Code. Seller has never been a United States real property
holding corporation within the meaning of Code Section 897(c)(2).
(d) There is no contract, agreement, plan or arrangement
covering any employee of the Group that, individually or collectively, provides
for the payment prior to or in connection with this transaction by Buyer of any
amount: (i) that is not deductible under Section 162(a)(1) or 404 of the Code;
or (ii) that is an "excess parachute payment" under Code Section 280G.
(e) There are no Liens for Taxes of any kind on any of the
Acquired Assets, except for Taxes not yet due and payable.
3.5 Litigation. Except as set forth on Schedule 3.5, there are no
Proceedings that (i) contain a claim for money damages of $500,000 or more, (ii)
seek injunctive or other equitable relief which if granted would be reasonably
expected to result in a Material Adverse Effect or (iii) relate to this
Agreement or the transactions contemplated hereby, in each case pending or, to
Seller's Knowledge, threatened against Seller relating to the business or
operation of the Group, the Acquired Assets, the Assumed Liabilities or Seller's
ability or authority to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements.
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3.6 Acquired Assets.
(a) Seller, or its Affiliates, as applicable, has good and
marketable title to, or a valid license to or leasehold interest in, all
Acquired Assets free and clear of any Lien, except for Permitted Liens. The
items of personal property included in the Acquired Assets and currently used in
the business or operation of the Group are in normal operating condition,
subject to normal wear and tear, and are suitable for the purposes for which
they are currently being used.
(b) Except as set forth on Schedule 3.6(b), all assets,
properties and rights owned or used by Seller and its Affiliates in connection
with the current operation or business of the Group shall be owned or available
for use by Buyer on substantially similar terms and conditions immediately after
giving effect to the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements, except for the failure of such of the
foregoing as is not reasonably expected to have a Material Adverse Effect.
3.7 Real Property.
(a) Schedule 3.7 contains a complete and accurate list and
legal description of all Owned Premises (including addresses) and a complete and
accurate list of all Leased Premises (including addresses, the name of each
landlord and the date of each lease). Except as set forth on Schedule 3.7, the
Premises constitute all of the real property and interests in real property
owned, leased, used or held for use by Seller or its Affiliates in relation to
the business or operation of the Group. Seller has good and marketable fee
simple title to the Owned Premises designated as the "Fee Simple Owned Property"
on Schedule 1.1(e), free and clear of all mortgages, liens, security interests,
easements, covenants, restrictions, rights-of-way and other liens, claims and
similar encumbrances and restrictions of any nature whatsoever, except for the
Permitted Liens. Except as described or provided in the Environmental Matters
Agreement, the Permitted Liens do not, individually or in the aggregate,
materially and adversely affect the use, value or operation of the Premises or
any parcel or component thereof.
(b) Except as set forth on Schedule 3.7 and for any of the
following the failure of which to be true and correct is not reasonably expected
to result in a Material Adverse Effect, (i) to Seller's Knowledge, all
improvements located on each parcel of the Premises are in good operating
condition and in a good state of maintenance and repair (normal wear and tear
excepted), have been regularly and appropriately maintained, are adequate for
their current use in the business or operation of the Group and are free from
structural defect, except for scheduled maintenance, repairs and replacements to
be performed in the ordinary course of the operation of the Premises, (ii) to
Seller's Knowledge, there is not now pending any condemnation or eminent domain
proceeding affecting any of the Premises or any portion thereof or any lawsuits
or administrative actions relating to any of the Premises that is reasonably
expected to have a material adverse effect on the current use, occupancy or
value of such Premises, nor is any such proceeding threatened by any
Governmental Authority or other party, (iii) all Permits necessary for the
operation and current use of the Premises have been issued and are in full force
and effect, (iv) each of the Premises is served by all necessary water, sewer,
gas, electric, telephone, drainage facilities and other utilities or services
necessary for the current operation thereof (collectively, "Utilities") and, to
Seller's Knowledge, no fact or condition exists that is
10
reasonably expected to result in the discontinuation of any of the Utilities,
(v) to Seller's Knowledge, each of the Premises has been operated and maintained
in compliance with all applicable Laws, including, without limitation, all
applicable building codes, zoning, subdivision and land use laws, (vi) Seller
has not received written notice that the use or occupancy of any of the Premises
violates any covenants, conditions or restrictions that encumber the Premises,
and (vii) there are no leases, subleases, licenses, concessions or other
agreements, written or oral, granting to any other person or entity the right of
use or occupancy of any portion of any of the Premises, except for the Permitted
Liens, the Motorola Credit Union Ground Lease and any third party antenna
agreements.
(c) Seller has heretofore delivered to Buyer a true, correct
and complete copy of each Real Property Lease together with all amendments,
modifications, alterations and other changes thereto. All of the Assumed Real
Property Leases are valid, binding and enforceable against Seller and, to
Seller's Knowledge, against the other parties thereto, and there exists no
breach or default, or state of facts which, with the passage of time, notice, or
both, is reasonably expected to result in a breach or default on the part of
Seller or, to Seller's Knowledge, the other party or parties to any Real
Property Lease. None of the leasehold estates in the Leased Premises subject to
the Assumed Real Property Leases is subject to any mortgage, lien, security
interest or other Lien created or caused by Seller that would survive the
Closing and the assignment of the Assumed Real Property Leases. The Real
Property Lease with respect to each of the Leased Premises constitutes the
entire agreement to which Seller is a party with respect to the Leased Premises
leased thereunder.
3.8 Compliance with Laws. Except as set forth on Schedule 3.8, Seller
has complied with all Laws applicable to the business and operation of the
Group, except where the failure to so comply is not reasonably expected to have
a Material Adverse Effect.
3.9 Material Contracts. Schedule 3.9 contains a list of each of the
following Contracts (each of which shall be deemed a "Material Contract") to
which Seller or any of its Affiliates is a party with respect to the business or
operation of the Group or the Acquired Assets:
(a) any Contract that obligates Seller or any of its
Affiliates to pay an amount in excess of $5,000,000 after the date hereof;
(b) any Contract for the sale of products or systems or the
provision of services that involves the anticipated accrual or receipt of
revenues of more than $5,000,000 after the date hereof;
(c) any Contract, lease or similar agreement relating to the
purchase, sale or use of real property;
(d) any material agreement or arrangement that relates to the
provision of goods or services to or by the Group by or to Seller or any other
group, sector or Affiliate of Seller;
11
(e) any confidentiality agreement that restricts in any
material way the business or operation of the Group or the use of any of the
Acquired Assets or any non-competition agreement that restricts in any way the
business or operation of the Group or the use of any of the Acquired Assets;
(f) any collective bargaining agreements with any labor union
or representative of employees relating to or affecting the Group or the
Acquired Assets;
(g) any partnership, joint venture, teaming, co-production or
profit sharing Contracts;
(h) any employment agreement with any Employee other than
Seller's standard form letter agreement;
(i) any agreement committing Seller or any of its Affiliates
to purchase or sell any property or asset in respect of the business or
operation of the Group outside the ordinary course of business;
(j) any Contract constituting a material distribution or
sales agency agreement;
(k) any material Software Licenses;
(l) any restricted contract; or
(m) any contract involving the handling, treatment, storage,
transportation, recycling, reclamation or disposal of waste or hazardous
substances generated by or used by the Group, which has not been entered into in
the ordinary course of business.
Except as prohibited by law, by the terms of such Material Contract, or
under any confidentiality agreement, or as specifically set forth on Schedule
3.9, Seller has made available to Buyer copies of all Material Contracts, which
copies are complete and accurate in all material respects. Except as described
on Schedule 3.9 or Schedule 3.10(a), each Material Contract is valid and binding
and is in full force and effect as to Seller, and, to Seller's Knowledge,
represents the legal, valid and binding obligation of the other party or parties
thereto, enforceable against such party or parties in accordance with its terms.
Except as disclosed on Schedule 3.9 or with respect to the Government Contracts,
which are the subject of Section 3.10 and therefore not covered by this
sentence, Seller or the applicable Affiliate of Seller has performed all
obligations required to be performed by it under each Material Contract through
the date this representation is made, except where the failure to perform is not
reasonably expected to result in a Material Adverse Effect, and is not (with or
without the lapse of time or the giving of notice, or both) in material breach
or material default thereunder and, to Seller's Knowledge, no other party
thereto is (with or without the lapse of time or the giving of notice, or both)
in material default under any Material Contract.
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3.10 Government Contracts.
(a) Compliance. Except as set forth on Schedule 3.10(a), with
respect to each and every Government Contract or Government Proposal and for all
periods from and after January 1, 1998 (i) Seller has complied with all terms
and conditions of such Government Contract or Government Proposal except where
the failure to comply is not reasonably expected to result in a Material Adverse
Effect; (ii) Seller has complied with all requirements of all Laws or agreements
pertaining to such Government Contract or Government Proposal except where the
failure to comply is not reasonably expected to result in a Material Adverse
Effect; (iii) all representations and certifications executed, acknowledged or
set forth in or pertaining to such Government Contract or Government Proposal
were, to Seller's Knowledge, complete and correct as of their effective dates
and, to Seller's Knowledge, Seller has complied with all such representations
and certifications; (iv) neither the United States Government nor any prime
contractor, subcontractor or other person has notified Seller in writing that
Seller has breached or violated any statute, regulation, certification,
representation, clause, provision or requirement pertaining to such Government
Contract or Government Proposal; (v) no termination for convenience, termination
for default, cure notice or show cause notice is currently in effect; (vi) with
respect to any Government Contract, the United States Government has not
questioned or disallowed costs exceeding $1,000,000 per contract; (vii) no money
due to Seller pertaining to such Government Contract or Government Proposal has
been withheld or set off, nor has any claim been made to withhold or set off
money, and, to Seller's Knowledge Seller is entitled to all progress payments
received with respect thereto; and (viii) each Government Contract is valid and
subsisting.
(b) Investigations. Except as set forth on Schedule 3.10(b),
with respect to the business and operation of the Group: (i) none of Seller, the
Group nor any employee or consultant of Seller or the Group is, or during the
last three years has been, under, to Seller's Knowledge, administrative, civil
or criminal investigation by the United States Government or under any internal
audit by Seller or the Group with respect to any alleged irregularity,
misstatement or omission arising under or relating to any Government Contract or
Government Proposal; (ii) during the last three years, Seller has not conducted
or initiated any material internal investigation or made a voluntary disclosure
to the United States Government with respect to any alleged irregularity,
misstatement or omission arising under or relating to a Government Contract or
Government Proposal, and (iii) during the last three years, none of the Seller,
the Group nor any employee or consultant of Seller or the Group has been
suspended or disbarred from doing business with the United States Government or
has been the subject of a finding of nonresponsibility on a Government Proposal
nor has any debarment or suspension proceeding been initiated against Seller or
the Group. To Seller's Knowledge, there exist no facts or circumstances that
would warrant the institution of suspension or debarment proceedings or the
finding of nonresponsibility on the part of Seller or the Group or any of their
respective directors, officers or employees. No payment has been made by or on
behalf of Seller or the Group in connection with any Government Contract or
Government Proposal in violation of applicable procurement laws, rules and
regulations or in violation of, or requiring disclosure pursuant to, the Foreign
Corrupt Practices Act of 1977, as amended.
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(c) Absence of Claims. Except as set forth on Schedule
3.10(c), with respect to the Group, there exist: (i) to Seller's Knowledge, no
outstanding material claims against Seller either by the United States
Government or by any prime contractor, subcontractor, vendor or other third
party, arising under or relating to any Government Contract or Government
Proposal; and (ii) no material disputes between Seller and the United States
Government under the Contract Disputes Act or between Seller and any prime
contractor, subcontractor or vendor arising under or relating to any Government
Contract or Government Proposal.
(d) Cost Accounting Systems. Except as set forth on Schedule
3.10(d), the cost accounting and contractor purchasing systems maintained by
Seller in connection with the conduct of the business and operations of the
Group with respect to Government Contracts are in compliance with all applicable
Laws (including all applicable cost accounting standards) in all material
respects.
3.11 Permits. Seller currently has all Permits from all federal,
state, local and foreign authorities as are necessary for the conduct of the
business or operation of the Group as currently conducted as of the date hereof,
except where the failure to have any Permit is not reasonably expected to result
in a Material Adverse Effect.
3.12 Clearances. Except to the extent prohibited by Law, Schedule 3.12
sets forth with respect to the Acquired Assets or business or operation of the
Group, all material facility security clearances held by Seller (the
"Clearances").
3.13 Financial Statements. Seller has provided to Buyer a copy of the
Balance Sheet as of the Balance Sheet Date, the Pro Forma Balance Sheet as of
the Balance Sheet Date and the income statement for the Group for the six (6)
month period ending on the Balance Sheet Date (collectively, the "Financial
Statements"), true copies of which are attached to this Agreement as Exhibit H.
The Financial Statements (a) are in accordance with the Books and Records of
Seller; (b) have been prepared in accordance with GAAP in all material respects,
except as disclosed on Exhibit H; and (c) present fairly and accurately the
financial condition and results of operations for the periods indicated. The
Financial Statements have not been prepared, reviewed or audited by an outside
accounting firm. The reserves in the Financial Statements for Contracts,
warranties, customer claims, and other liabilities have been determined based on
Seller's historical experiences and represent Seller's reasonable good faith
estimate of the expected liabilities to which they relate and are reflected in
the Financial Statements in accordance with GAAP.
3.14 Absence of Undisclosed Liabilities. Except as disclosed or
reserved against on the Balance Sheet, or as specifically set forth on Schedule
3.14, and except for the Excluded Liabilities, Seller does not have, with
respect to the business or operation of the Group, any debts, liabilities, or
obligations of any nature, whether accrued, absolute, contingent or otherwise,
other than: (i) liabilities incurred in the ordinary and usual course of
business since the Balance Sheet Date, (ii) other debts, liabilities or
obligations which are not, in the aggregate, in excess of $1,000,000, and (iii)
liabilities not required by GAAP to be included or disclosed on a balance sheet
prepared in accordance with GAAP or any notes thereto.
14
3.15 Absence of Certain Changes or Events. Except as disclosed on
Schedule 3.15, since the Balance Sheet Date:
(a) Seller has conducted the business and operations of the
Group in the ordinary and usual course of business, and there has not been any
event or series of events that has had or is reasonably expected to have a
Material Adverse Effect; provided, however, any effect resulting from any change
that is generally applicable to the United States economy or securities markets
as a whole or to industries in which the Group operates generally, in each case
where such change does not adversely affect the business or operation of the
Group or the value of the Acquired Assets disproportionately, shall not
constitute a Material Adverse Effect under this Section 3.15(a);
(b) there has been no change in the condition, financial or
otherwise, of the Group, the Acquired Assets or the Assumed Liabilities, other
than any such changes in the ordinary course of business, none of which changes,
individually or in the aggregate, are reasonably expected to be material to the
Group, the Acquired Assets or the Assumed Liabilities;
(c) except to the extent required by GAAP, applicable Law, or
the United States Government, there has been no change in the method of
accounting or keeping of books of account or accounting practices with respect
to the Acquired Assets, the Assumed Liabilities or the business or operation of
the Group;
(d) Seller has not accelerated, delayed or postponed payment
of Accounts Payable or the collection of Accounts Receivable outside the
ordinary course of business consistent with past practices;
(e) Seller has not made any capital expenditure or commitment
in excess of the amounts set forth in the Capital Acquisition Report;
(f) Seller has not canceled, compromised, waived or released
any right or claim material to the business or operations of the Group that is
reasonably expected to result in a Material Adverse Effect; and
(g) Seller has not committed or agreed to do any of the
foregoing.
3.16 Brokers. No broker, investment banker, financial advisor or other
Person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based on arrangements made by or on behalf of Seller, except
pursuant to arrangements with those investment banks listed on Schedule 3.16,
for which Seller is solely responsible.
3.17 Warranty Disclaimer The representations and warranties set forth
in this Agreement and in the Ancillary Agreements and other instruments
contemplated hereby and thereby are the only representations and warranties made
by Seller with respect to the Group and the Acquired Assets. Except as
specifically set forth herein, Seller is selling the Acquired Assets to Buyer
"AS IS" and "WHERE IS" and with all faults. EXCEPT AS SPECIFICALLY SET FORTH IN
THIS AGREEMENT, SELLER MAKES NO WARRANTY, EXPRESS OR
15
IMPLIED, AS TO ANY MATTER WHATSOEVER RELATING TO THE ACQUIRED ASSETS, INCLUDING
THE CONDITION OF THE ACQUIRED ASSETS, THEIR MERCHANTABILITY OR THEIR FITNESS FOR
ANY PARTICULAR PURPOSE. SELLER FURTHER SPECIFICALLY DISCLAIMS ANY WARRANTY
REGARDING THE PROFITABILITY OF THE GROUP OR THE STATUS, OUTCOME OR LIKELIHOOD OF
SUCCESS OF ANY LITIGATION REFERENCED HEREIN.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller, as of the date hereof,
and as of the Closing Date, as follows:
4.1 Organization; Qualification. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. Buyer has the requisite corporate power to own its properties and
carry on its business as now conducted. Buyer is duly licensed or qualified to
do business and is in good standing in each jurisdiction in which it is required
to be licensed or qualified to do business and in which the failure to be so
licensed or qualified or in good standing would have a material adverse effect
on the ability of Buyer to perform its obligations under this Agreement and the
Ancillary Agreements.
4.2 Due Execution. All corporate acts required to be taken by Buyer
to authorize the execution and delivery of this Agreement, the Ancillary
Agreements and all instruments and transactions contemplated hereby have been
duly and properly taken. This Agreement has been, and the Ancillary Agreements,
documents and instruments to be delivered by Buyer at Closing will be, duly and
validly executed and delivered by Buyer and constitute the valid and legally
binding obligations of Buyer enforceable against it in accordance with their
respective terms, except in each case as such enforceability may be limited by
bankruptcy, moratorium, insolvency, reorganization or other similar laws
affecting or limiting the enforcement of creditors rights generally and except
as such enforceability is subject to general principles of equity.
4.3 No Violations.
(a) The execution, delivery and performance of this Agreement
and the Ancillary Agreements by Buyer and the consummation by Buyer of the
transactions contemplated hereby and thereby do not and will not (i) conflict
with or result in a breach or violation of any provision of Buyer's certificate
of incorporation or by-laws or of any statute, rule, regulation or ordinance
applicable to Buyer, (ii) conflict with or violate or result in a breach of or
constitute a default (or an event that is reasonably expected, upon the passage
of time or the giving of notice, or both, to constitute a default) under any
provision of, result in the acceleration or cancellation of any obligation
under, or give rise to a right by any party to terminate or amend its
obligations under, any mortgage, deed of trust, note, loan, indenture, lien,
lease, agreement, instrument, order, judgment, decree or other arrangement or
commitment to which Buyer is a party or by which it or its assets or properties
are bound, or (iii) conflict with or violate any order, judgment, decree, rule
or regulation of any court or any Governmental Authority having jurisdiction
over Buyer, except in each case for such conflicts, breaches, violations or
defaults as
16
are not reasonably expected to result in a material adverse effect on the
ability of Buyer to consummate the transactions contemplated by this Agreement
and the Ancillary Agreements.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Person is required by Buyer in
connection with the execution and delivery of this Agreement and the Ancillary
Agreements or the consummation of the transactions contemplated hereby or
thereby, except for (i) any of the same the failure of which to obtain or make
is not reasonably expected to result in a material adverse effect on the ability
of Buyer to consummate the transactions contemplated by this Agreement and the
Ancillary Agreements, (ii) any filings required to be made under the HSR Act and
(iii) such consents, approvals, orders, authorizations, registrations,
declarations or filings the failure of which to obtain would not, individually
or in the aggregate, have a material adverse effect on Buyer's ability to
consummate the transactions contemplated hereby and thereby.
4.4 Litigation. There are no Proceedings pending or, to Buyer's
Knowledge, threatened against Buyer relating to the Group, the Acquired Assets,
the Assumed Liabilities or Buyer's ability or authority to consummate the
transactions contemplated by this Agreement and the Ancillary Agreements where
the outcome is reasonably expected to result in a material adverse effect on the
ability of Buyer to consummate the transactions contemplated by this Agreement
and the Ancillary Agreements.
4.5 Financing. Buyer has the capability or sufficient funds or
financing in place as of the date hereof to fund the consideration to be paid at
Closing to Seller for the Acquired Assets.
4.6 Eligibility. During the last three years, neither Buyer nor any
director or executive officer of Buyer has been debarred, suspended, proposed
for debarment, or found to be nonresponsible by the United States or any United
States government entity. To Buyer's Knowledge, there exist no facts or
circumstances that would warrant the institution of debarment or suspension
proceedings or the finding of nonresponsibility on the part of Buyer or any
director or executive officer of Buyer.
4.7 Foreign Ownership. Buyer is not under "foreign ownership, control
or influence," as such term is defined in the U.S. Department of Defense
Industrial Security Manual for Safeguarding Classified Information.
4.8 Brokers. No broker, investment banker, financial advisor or other
Person is entitled to any broker's, finder's financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based on arrangements made by or on behalf of Buyer.
ARTICLE V
CLOSING
5.1 Closing. The closing ("Closing") of the sale and purchase of the
Acquired Assets and the assignment and assumption of the Assumed Liabilities
shall take place at the offices of Jenner & Block, LLC, One IBM Plaza, Chicago,
Illinois at 10:00 a.m. Central Time on the first
17
business day after satisfaction or waiver of the conditions set forth in
Sections 6.1 and 6.2 herein, or at such place, date and time as the parties may
agree (the "Closing Date"), but in any event no later than December 31, 2001.
All acts and transactions to be taken or effected at the Closing shall be deemed
to have been taken simultaneously and shall be deemed to be effective as of
12:01 a.m. Central Time on the Closing Date.
5.2 Deliveries by Seller. At the Closing, Seller shall deliver or
cause to be delivered to Buyer all instruments, duly executed, which are
required by the terms hereof to be delivered at the Closing, including:
(a) the Assignment and Assumption Agreement;
(b) the Bill of Sale;
(c) the Intellectual Property Agreement;
(d) the Employee Matters Agreement;
(e) the Environmental Matters Agreement
(f) the Transition Services Agreements;
(g) the Lease;
(h) the Strategic Alliance Agreement;
(i) the Commercial Agreements;
(j) a certificate of Seller, dated as of the Closing Date,
certifying to the fulfillment of the conditions specified in Section 6.1(a) of
this Agreement;
(k) an affidavit pursuant to Section 1445(b)(2) of the Code
stating under penalty of perjury Seller's federal employer identification number
and that Seller is not a foreign person and such other certificates and
affidavits relating to Tax matters as may reasonably be requested by Buyer; and
(l) all such other bills of sale, special or limited warranty
deeds, assignments and other instruments of assignment, transfer or conveyance
as Buyer may reasonably request or as may be otherwise necessary to evidence and
effect the sale, transfer, assignment, conveyance and delivery of the Acquired
Assets to Buyer and to put Buyer in actual possession or control of the Acquired
Assets.
5.3 Deliveries by Buyer At the Closing, Buyer shall deliver or cause
to be delivered to Seller all instruments, duly executed, which are required by
the terms hereof to be delivered at the Closing, including:
(a) an amount equal to the Purchase Price by wire transfer of
immediately available funds in U.S. dollars;
18
(b) the Assignment and Assumption Agreement;
(c) the Intellectual Property Agreement;
(d) the Employee Matters Agreement;
(e) the Environmental Matters Agreement;
(f) the Transition Services Agreements;
(g) the Lease;
(h) the Strategic Alliance Agreement;
(i) the Commercial Agreements; and
(j) a certificate of Buyer dated as of the Closing Date,
certifying to the fulfillment of the conditions specified in Section 6.2(a) of
this Agreement.
5.4 Consummation of Transactions. Each of the parties hereto agrees
to use all commercially reasonable efforts to consummate all of the transactions
contemplated herein and to be performed by it hereunder.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS TO CLOSE
6.1 Conditions Precedent to Buyer's Obligations. All obligations of
Buyer hereunder are subject to the fulfillment on or before the Closing Date of
each of the following conditions:
(a) No Misrepresentation or Breach of Covenants and
Warranties. There shall have been no material breach by Seller in the
performance of any of its covenants and agreements contained herein or in the
Primary Ancillary Agreements; each of the representations and warranties of
Seller contained or referred to in this Agreement and the Primary Ancillary
Agreements that are qualified as to materiality shall be true and correct and
the other representations and warranties of Seller contained or referred to in
this Agreement and the Primary Ancillary Agreements shall be true and correct in
all material respects, in each case on the Closing Date as though made on the
Closing Date, unless such representations and warranties are made only as of an
earlier date, in which case they shall be true and correct, or true and correct
in all material respects, as the case may be, as of such earlier date, and
Seller shall have delivered a certificate confirming the matters set forth in
this Section 6.1(a).
(b) No Injunction. No order of any court or administrative
agency shall be in effect that enjoins, restrains, conditions or prohibits
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements.
(c) HSR Act. Any applicable waiting period under the HSR Act
relating to the transactions contemplated by this Agreement shall have expired
or been terminated.
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(d) Consents. Seller shall have obtained and delivered to
Buyer the written consents specified on Schedule 6.1(d).
(e) Title Policy. The Title Company shall be prepared to issue
to Buyer a title policy in the amount of the fair market value of the Owned
Premises as reasonably determined by Buyer, naming Buyer as the insured party
thereunder, insuring good and marketable fee simple title to the Owned Premises,
subject only to the Permitted Liens and containing such endorsements as Buyer
shall reasonably require including, without limitation, the following
endorsements: (i) extended coverage, (ii) zoning, with parking (or its
equivalent), (iii) access and (iv) contiguity (the "Title Policies"). The Title
Policies also shall provide affirmative insurance with respect to all easements
benefiting the Owned Premises. All title insurance premiums and charges payable
in connection with the issuance of the Title Policies shall be shared equally by
Buyer and Seller.
(f) No Material Adverse Effect. Since the Balance Sheet Date
there shall have been no change in the business or operation or the assets,
liabilities or condition (financial or otherwise) of the Group, which is
reasonably expected to result in a Material Adverse Effect, excluding any such
change that is generally applicable to the United States economy or securities
markets as a whole or to industries in which the Group operates generally, in
each case where such change does not adversely affect the business or operation
of the Group or the value of the Acquired Assets disproportionately.
(g) Delivery of Documents. Seller shall have delivered the
documents, instruments and certificates identified in Section 5.2.
6.2 Conditions Precedent to Seller's Obligations. All obligations of
Seller hereunder are subject to the fulfillment on or before the Closing Date of
each of the following conditions:
(a) No Misrepresentation or Breach of Covenants and
Warranties. There shall have been no material breach by Buyer in the performance
of any of its covenants and agreements contained herein or in the Primary
Ancillary Agreements; each of the representations and warranties of Buyer
contained or referred to in this Agreement and the Primary Ancillary Agreements
that are qualified as to materiality shall be true and correct and the other
representations and warranties of Buyer contained or referred to in this
Agreement and the Primary Ancillary Agreements shall be true and correct in all
material respects, in each case on the Closing Date as though made on the
Closing Date, unless such representations and warranties are made only as of an
earlier date, in which case they shall be true and correct, or true and correct
in all material respects, as the case may be, as of such earlier date, and Buyer
shall have delivered a certificate confirming the matters set forth in this
Section 6.2(a).
(b) No Injunction. No order of any court or administrative
agency shall be in effect that enjoins, restrains, conditions or prohibits
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements.
(c) HSR Act. Any applicable waiting period under the HSR Act
relating to the transactions contemplated by this Agreement shall have expired
or been terminated.
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(d) Delivery of Documents. Buyer shall have delivered the
documents, instruments and certificates identified in Section 5.3.
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification by Seller. Subject to the limitations set forth
in this Article VII, Seller hereby agrees to indemnify and hold harmless Buyer
or any of its Affiliates or any of their respective directors, officers,
employees or agents (collectively the "Buyer Parties") against any and all
Damages incurred by Buyer in connection with or arising or resulting from:
(a) any breach by Seller of, or any other failure of Seller to
perform, any of its covenants, agreements or obligations in this Agreement or in
any Primary Ancillary Agreement;
(b) the failure of any representation or warranty of Seller
contained or referred to in this Agreement, any Primary Ancillary Agreement, or
any certificate delivered by or on behalf of Seller pursuant hereto or thereto
to have been true in all respects when made and as of the Closing Date unless
such representations and warranties are made only as of an earlier date, in
which case they shall be true and correct as of such earlier date; and
(c) the Excluded Liabilities.
7.2 Indemnification by Buyer. Subject to the limitations set forth in
this Article VII, Buyer hereby agrees to indemnify and hold harmless Seller or
any of its Affiliates or any of their respective directors, officers, employees
or agents (collectively the "Seller Parties") against any and all Damages
incurred by Seller in connection with or arising or resulting from:
(a) any breach by Buyer of, or any other failure of Buyer to
perform, any of its covenants, agreements or obligations in this Agreement or in
any Primary Ancillary Agreement;
(b) the failure of any representation or warranty of Buyer
contained or referred to in this Agreement, any Primary Ancillary Agreement, or
any certificate delivered by or on behalf of Buyer pursuant hereto or thereto to
have been true in all respects when made and as of the Closing Date unless such
representations and warranties are made only as of an earlier date, in which
case they shall be true and correct as of such earlier date; and
(c) the Assumed Liabilities.
7.3 Limitation on Indemnification Obligation. Notwithstanding the
foregoing, Seller shall not be required to indemnify the Buyer Parties under
Section 7.1(b) and Buyer shall not be required to indemnify the Seller Parties
under Section 7.2(b), in each case until, and then only to the extent that, the
aggregate amount of such Damages exceeds $10,000,000 and provided that the
aggregate amount of Damages that either party shall be required to indemnify and
hold harmless pursuant to Section 7.1(b) or Section 7.2(b), as the case may be,
shall not exceed $82,500,000.
21
7.4 Survival. The representations and warranties of Buyer and Seller
contained in this Agreement or any Primary Ancillary Agreement shall survive for
a period of two years following the Closing Date, except (a) for the
representations and warranties contained in the first sentence of Section
3.6(a), in Section 3.16 and in Section 4.8, which shall survive indefinitely,
(b) for the representations and warranties contained in Section 3.4, which shall
survive until the expiration of the applicable statute of limitations, and (c)
as specifically provided in the Primary Ancillary Agreements. Neither Seller nor
Buyer shall have any liability whatsoever with respect to any such
representations or warranties after the survival period for such representation
or warranty expires, except for claims then pending or theretofore asserted in
writing by a party in accordance with the terms and conditions of this
Agreement.
7.5 Procedures for Indemnification. The indemnified party shall give
prompt written notice to the indemnifying party of any Claim by any Third Party
in respect of which indemnity may be sought, but a failure to give such notice
or delaying such notice shall not affect the indemnified party's right to
indemnification and the indemnifying party's obligation to indemnify as set
forth in this Agreement, except to the extent the indemnifying party's ability
to remedy, contest, defend or settle with respect to such Claim is actually
prejudiced thereby. The obligations and liabilities of the parties with respect
to any such Claim shall be subject to the following additional terms and
conditions:
(a) The indemnifying party shall have the right to undertake,
by counsel or other representatives of its own choosing, the defense or
opposition to such Claim.
(b) In the event that the indemnifying party shall elect not
to undertake such defense or opposition, or, within thirty (30) days after
written notice (which shall include sufficient description of background
information explaining the basis for such Claim) of any such Claim from the
indemnified party, the indemnifying party shall fail to undertake to defend or
oppose such Claim, the indemnified party (upon further written notice to the
indemnifying party) shall have the right to undertake the defense, opposition,
compromise or settlement, subject to clause (c) below, of such Claim, by counsel
or other representatives of its own choosing, on behalf of and for the account
and risk of the indemnifying party (subject to the right of the indemnifying
party to assume defense of or opposition to such Claim at any time prior to
settlement, compromise or final determination thereof).
(c) Anything herein to the contrary notwithstanding: (i) in
the event that the indemnifying party undertakes defense of or opposition to any
Claim, (A) the indemnified party shall have the right, at its own cost and
expense, to participate in the defense, opposition, compromise or settlement of
the Claim and the indemnifying party and the indemnified party and their
respective counsel or other representatives shall cooperate in good faith with
respect to such Claim; and (B) the indemnifying party shall not, without the
indemnified party's written consent (which consent shall not be unreasonably
withheld), settle or compromise any Claim or consent to entry of any judgment in
respect of such Claim; and (ii) in the event that the indemnified party
undertakes defense of or opposition to any Claim, (A) the indemnifying party
shall have the right, at its own cost and expense, to participate in the
defense, opposition, compromise or settlement of the Claim and the indemnifying
party and the indemnified party and their respective counsel or other
representatives shall cooperate in good faith with respect to such
22
Claim; and (B) the indemnified party shall not, without the indemnifying party's
written consent (which consent shall not be unreasonably withheld), settle or
compromise any Claim or consent to entry of any judgment in respect of such
Claim.
(d) All Claims not disputed shall be paid by the indemnifying
party within thirty (30) days after receiving notice of the Claim. In the event
there is a Disputed Claim with respect to any Damages, the indemnifying party
shall be required to pay the indemnified party the amount of such Damages for
which the indemnifying party has, pursuant to a final determination, been found
liable within ten (10) days after there is a final determination with respect to
such Disputed Claim. A final determination of a Disputed Claim shall be (i) a
judgment of any court of competent jurisdiction determining the validity of a
Disputed Claim, if no appeal is pending from such judgment and if the time to
appeal therefrom has elapsed; (ii) an award of any arbitration determining the
validity of such disputed claim, if there is not pending any motion to set aside
such award and if the time within which to move to set aside such award has
elapsed; (iii) a written termination of the dispute with respect to such claim
signed by the parties thereto or their attorneys; (iv) a written acknowledgment
of the indemnifying party that it no longer disputes the validity of such claim;
or (v) such other evidence of final determination of a disputed claim as shall
be acceptable to the parties. No undertaking of defense or opposition to a Claim
shall be construed as an acknowledgment by such party that it is liable to the
party claiming indemnification with respect to the Claim at issue or other
similar Claims.
(e) Any amounts payable under this Article VII by the
indemnifying party to or on behalf of the indemnified party in respect of any
Damages shall be reduced to the extent that the indemnified party receives any
insurance proceeds with respect to a Claim. If the amount of any Claim, at any
time subsequent to the making of an indemnity payment in respect thereof, is
reduced by recovery, settlement or otherwise under or pursuant to any insurance
coverage, or pursuant to any claim, recovery, settlement or payment by or
against any Third Party, the amount of such reduction, less any costs, expenses
or premiums incurred in connection therewith, will promptly be repaid by the
indemnified party to the indemnifying party with respect to such Claim.
7.6 Ancillary Agreements. The provisions of this Article VII shall be
without limitation of the parties' rights to indemnification under or other
remedies specifically provided for under the Ancillary Agreements.
ARTICLE VIII
COVENANTS
8.1 Operation of the Business. Seller covenants and agrees that
during the period from the date of this Agreement to the Closing (except as
Buyer otherwise has consented in writing, which consent will not be unreasonably
withheld), the business and operation of the Group and the Premises will be
conducted only in the ordinary course of business, consistent with past
practices, and Seller shall use commercially reasonable efforts to preserve the
business and operations of the Group intact, and to preserve the goodwill of
customers and suppliers of the Group. During the period from the date of this
Agreement through the Closing, Seller shall
23
not, with respect to the Acquired Assets, the Assumed Liabilities or the Group,
without the prior written consent of Buyer, which consent will not be
unreasonably withheld:
(a) cancel or waive, or agree to cancel or waive, any debt, claim or
right (absolute or contingent), having a value or potential value
(individually or in the aggregate) in excess of $500,000;
(b) make any capital expenditure, capital commitment, additions to
property, plant or equipment in excess of the amounts set forth in
the Capital Acquisition Report attached hereto as Schedule 8.1(b);
(c) take any action which individually or in the aggregate is
reasonably expected to have a Material Adverse Effect on the
Group's business relationship with any major customer or supplier;
(d) sell, lease, license or otherwise dispose of, or agree to sell,
lease, license or otherwise dispose of, any interest in any of the
Acquired Assets, except for (i) sales of Inventory in the ordinary
course of business and (ii) the sale or disposal of excess and
obsolete assets in the ordinary course of business in compliance
with Group policies and practices and in an amount not to exceed
$100,000 per month;
(e) increase in any manner the compensation of, or enter into any new
bonus or incentive agreements or arrangements with, or establish
any new employee benefit plans or programs for, or increase the
benefits under any existing employee benefit plan or program for,
any employees of the Group other than in connection with a
promotion, in the ordinary course of business (including any such
changes that are not related to the transactions contemplated by
this Agreement and that are generally applicable to all similarly
situated Seller or Seller Affiliate employees), or as expressly
provided for in the Employee Matters Agreement or any agreements
forming a part thereof;
(f) enter into a lease of real property with respect to the business or
operations of the Group having annual lease payments in excess of
$500,000;
(g) change with respect to the business or operation of the Group its
accounting methods, principles or policies in any material respect
except to the extent required by GAAP, applicable Law, or the
United States Government;
(h) make any Tax election that could carry over to Buyer and have a
Material Adverse Effect after the Closing;
(i) make any change to the revenue recognition procedures as used in
the preparation of the Financial Statements;
(j) amend in any material adverse respect any Contract except with
respect to the settlement of a debt, claim or right in accordance
with Section 8.1(a);
24
(k) pay, distribute, loan or advance any amount received in connection
with or related to advance payments or deposits on Contracts to any
stockholder, officer, employee, director or Affiliate, except as
otherwise contemplated by this Agreement or the Ancillary
Agreements;
(l) (i) delay or postpone payment on, or otherwise alter the payment
terms of, Accounts Payable other than consistent with past
practices, (ii) factor, discount or otherwise accept less than full
payment with regard to, or accelerate the collection of, Accounts
Receivable or other amounts due other than in the ordinary course
of business, (iii) offer or extend any special discounts or terms
on the sale of Inventory, except in the ordinary course of
business, or (iv) sell any Inventory at less than fair market value
or make any bulk sale of Inventory other than in the ordinary
course of business;
(m) incur or assume any indebtedness or other liabilities (whether
absolute, accrued, contingent or otherwise) or guarantee any such
indebtedness or commitments for the same, except liabilities (other
than indebtedness or guarantees of indebtedness) in the ordinary
course of business, and in amounts and on terms consistent with
past practice;
(n) take any other action which individually or in the aggregate
materially affects the Financial Statements outside the ordinary
course of business consistent with past practice; or
(o) commit or agree to do any of the foregoing.
8.2 Access.. From the date hereof through the Closing Date, Seller
shall give Buyer and its representatives access during normal business hours and
under reasonable circumstances to all properties and records of the Group,
subject to the terms and conditions as may be required by the landlords under
the Assumed Real Property Leases. Seller shall furnish Buyer with all financial
and other information in its possession relating to the Group, the Acquired
Assets and the Assumed Liabilities as Buyer may from time to time reasonably
request. At the request of Buyer and after the public announcement of the
transactions contemplated hereby in accordance with this Agreement, Seller shall
arrange joint visits to significant customers and suppliers of the Group. Buyer
shall not communicate with any employee customer, supplier, landlord or tenant
of the Group without the prior consent (written or oral) of Seller's Senior Vice
President/Director of Finance (Bob Kell), Seller's Corporate Vice
President/General Manager (Bob McCall), Ralph Smith or Michelle Warner. All
rights of access to information and documents granted under this Section 8.2 are
subject to restrictions on access to classified facilities and information
imposed by Governmental Authorities.
8.3 Cooperation; Records and Documents.
(a) In the event and for so long as either party is actively
contesting or defending against any Proceeding in connection with (i) any
transaction contemplated under this Agreement or the Ancillary Agreements or
(ii) any fact, situation, circumstance, status, condition, activity, practice,
plan, occurrence, event, incident, action, failure to act or transaction on or
prior to the Closing Date involving the Group, the other party shall cooperate
with the
25
contesting or defending party and its counsel in the contest or defense, make
available its personnel and provide such testimony and access to its books and
records as may be necessary in connection with the contest or defense, at the
sole cost and expense of the contesting or defending party (unless the
contesting or defending party is entitled to indemnification therefor under
Article VII or such costs and expenses are allocated differently under Sections
8.3(c)-(e)). The provisions of this Section 8.3(a) shall not be applicable in
the case of any Proceeding by one party to this Agreement against the other.
(b) Following the Closing Date, Seller shall grant to Buyer
and its representatives, at Buyer's reasonable request (subject to any
limitations that are reasonably required to preserve any applicable privilege or
Third Party confidentiality obligation), reasonable access during normal
business hours and under reasonable circumstances to, and the right to make
copies at Buyer's sole expense of, those records and documents in Seller's
possession related to the Group, the Acquired Assets or the Assumed Liabilities
as may be reasonably necessary for Buyer's operation of the Group after the
Closing. Following the Closing Date, Buyer shall grant to Seller and its
representatives, at Seller's reasonable request (subject to any limitations that
are reasonably required to preserve any applicable privilege or Third Party
confidentiality obligation), access during normal business hours and under
reasonable circumstances to, and the right to make copies at Seller's sole
expense of, those records and documents covering any period prior to the Closing
related to the Group or the Acquired Assets as may be reasonably necessary for
litigation, preparation of financial statements, tax returns and audits or other
valid business purposes. If Buyer elects to dispose of any of such records
within six (6) years after the Closing Date, Buyer shall first give Seller sixty
(60) days' written notice, during which period Seller shall have the right to
take such records without payment of consideration. All rights of access to
information and documents granted under this Section 8.3 are subject to
restrictions on access to classified facilities and information imposed by
Governmental Authorities.
(c) In addition to the provisions of Sections 8.3(a) and (b),
Buyer and Seller shall fully cooperate in connection with (i) Seller's defense
of the ongoing investigation relating to the FMU-140 contract, (ii) Seller's
defense in any other Proceedings involving allegations of pre-Closing criminal
conduct or civil fraud, (iii) Seller's actions in connection with any other
Proceeding for which Seller has retained liability under this Agreement, the
Ancillary Agreements or any other agreement referenced or contemplated hereby or
thereby and (iv) Seller's prosecution of affirmative claims relating to the
FMU-140 contract; provided that such cooperation shall not be applicable in the
case of any Proceeding by a party to this Agreement against the other party. It
is understood and agreed by Buyer and Seller that (y) Buyer's cooperation
hereunder is predicated on Seller's performance under this Agreement and the
Ancillary Agreements of its obligations to Buyer in respect of the Excluded
Liabilities and nothing contained in this Section 8.3(c) shall be construed to
limit Buyer's rights in the event of Seller's non-performance and (z) Buyer's
cooperation under this Section 8.3(c) is not intended to require it to engage in
activities where Buyer, in the exercise of its reasonable judgment, would be
required to engage outside counsel or other professionals.
(d) In connection with the cooperation specified in Section
8(c), each of Buyer and Seller shall (i) designate (A) a senior management point
of contact who shall be responsible
26
for oversight of such party's cooperation obligations hereunder and (B) an
operational level point of contact who shall be responsible for day-to-day
coordination in connection with Seller's investigation or prosecution
activities, (ii) enter into joint defense agreements where appropriate in form
and substance mutually acceptable to Buyer and Seller and (iii) otherwise fully
cooperate to the extent necessary to permit Seller to vigorously defend itself
and, to the extent applicable, Buyer in such Proceedings. In addition, Buyer
shall (x) provide appropriate on-site working space as necessary for Seller's
investigative and legal personnel equipped with or with access to appropriate
communications and copying equipment, (y) ensure the retention of documents
relevant to Seller's investigation in accordance with the provisions of Section
8.3(b), subject to the cost provisions of Section 8.3(e), and (z) make
reasonably available to Seller such employees of Buyer as have relevant
knowledge or expertise to assist Seller in resolving those matters referred to
in Sections 8.3(c)(i)-(iv). Seller shall not settle any Proceeding described in
Section 8.3(c) that is initiated by a Governmental Authority without the express
written consent of Buyer, which consent shall not be unreasonably withheld, if
such settlement requires Buyer to take, or prohibits Buyer from taking, any
action.
(e) With respect to the costs of any Proceeding described in
Sections 8.3(c)(i)-(iv), (1) Seller shall bear all of its own costs and shall
reimburse Buyer for all of its reasonable out-of-pocket expenses related to the
Proceeding (which shall not include the fees and expenses of Buyer's counsel
unless otherwise agreed to by Seller) and (2) Buyer shall bear all of its own
internal costs of cooperation.
(f) Seller's February 16, 1996 Advance Agreement with the
United States Government Regarding Environmental Litigation Costs and May 13,
1998 Advance Agreement with the United States Government for Environmental
Remediation Costs (the "Advance Agreements") are scheduled Excluded Liabilities.
To the extent the United States Government asserts any rights or claims it may
have under the Advance Agreements by issuance of a contracting officer's final
decision under a contract novated or to be novated pursuant to this Agreement,
Buyer agrees to enter into a sponsorship agreement or other similar arrangement
under which Seller will have the right to appeal in the name of Buyer the final
decision to a final resolution. Any such appeals will be at Seller's risk and
expense, and the parties will cooperate as contemplated in Sections 8(a) and (b)
in connection with any appeals.
8.4 Novation of Government Contracts. Promptly following the Closing,
Seller shall, in accordance with, and to the extent required by, the Federal
Acquisition Regulation Part 42, Subpart 42.12, submit in writing to each
responsible contracting officer a request for the United States Government to:
(a) recognize Buyer as the successor in interest to all of the Government
Contracts; and (b) enter into a novation agreement (the "Novation Agreement")
substantially in the form contemplated by such regulations. Seller shall use
reasonable commercial efforts to obtain all consents, approvals and waivers
required for the purpose of processing, entering into and completing the
Novation Agreements with regard to the Government Contracts, including
responding promptly to any request for information by the United States
Government with regard to such Novation Agreements. Following the Closing,
Buyer, who is likely to be in the better position to respond to inquiries from
the United States Government concerning such Novation Agreements, shall use
reasonable commercial efforts to provide all information and take all other
actions necessary to execute and consummate such Novation Agreements, including
responding
27
promptly to any request for information by the United States Government with
regard to such Novation Agreements. Such Government information requests may
include, without limitation: (i) a list of all affected contracts between Seller
and the Government in accordance with FAR 42.1204(e)(2); (ii) evidence of the
Buyer's capability to perform; (iii) balance sheets of the Buyer as of the dates
immediately before and after the transfer of assets, audited by independent
accountants; (iv) evidence that any security clearance requirements have been
met; (v) the consent of sureties, if any, of all contracts listed under
subparagraph (i) above; and (vi) information, if any, identifying and evaluating
any potentially significant Organizational Conflicts of Interest as contemplated
under FAR 42.1204(d).
8.5 Assignment of Contracts.
(a) Anything in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an agreement to assign or
otherwise sell, convey or transfer any Contract, or any claim, right or benefit
arising thereunder or resulting therefrom, or to enter into any other agreement
or arrangement with respect thereto, if an attempted assignment, sale,
conveyance or transfer thereof, or entering into any such agreement or
arrangement, without the consent of a Third Party, would constitute a breach
thereof, or other contravention thereunder, be ineffective with respect to any
party thereto or in any way adversely affect the rights of Seller or Buyer
thereunder; provided, however, that at such time, if any such Contract may be so
assigned, sold, conveyed or transferred without having any of the foregoing
consequences, such Contract shall be so assigned, sold, conveyed and
transferred. With respect to any such Contract as to which the consent of a
Third Party is necessary, or any claim, right or benefit arising thereunder or
resulting therefrom, promptly after the date hereof, Seller and Buyer will use
commercially reasonable efforts, which shall not require the expenditure of any
money by Seller or Buyer, to obtain the written consent of other parties to any
such Contract for the sale, transfer or assignment thereof to Buyer, or written
confirmation from such parties reasonably satisfactory in form and substance to
Seller and Buyer confirming that such consent is not required.
(b) Until such consent is obtained with respect to any such
Contract, Seller and Buyer will cooperate to establish an arrangement (including
through a subcontracting, subleasing, sublicensing or similar arrangement to the
extent not prohibited under such Contract) effective as of the Closing Date
reasonably satisfactory to Buyer and Seller under which Buyer would obtain, to
the maximum extent possible, the claims, rights and benefits of Seller under
such Contract, with reasonable costs and expenses of Seller and its Affiliates
related thereto to be promptly reimbursed by Buyer. Seller will enforce, at the
reasonable request of and for the benefit of Buyer, any and all claims, rights
and benefits of Seller against any Third Party thereto arising from any such
Contract (including the right to elect to terminate such Contract in accordance
with the terms thereof upon the request of Buyer). To the extent permitted by
applicable Law and the terms of any Contract not assigned pursuant to this
Section 8.5, Buyer will use its commercially reasonable efforts to perform the
obligations under each such Contract for the benefit of Seller and the other
party or parties thereto in accordance with the arrangement established with
Seller and will indemnify and hold Seller and its Affiliates harmless from any
Damages relating to, resulting from or arising out of any failure by Buyer so to
perform or pay.
28
(c) Seller will promptly pay to Buyer, when received, all
monies received by Seller under any Contract or any claim, right or benefit
arising under any such Contract not assigned pursuant to Section 8.5(a), less
any actual out-of-pocket costs or expenses incurred by Seller as a result of
receiving such monies.
(d) At the request of Seller, Buyer shall use commercially
reasonable efforts to assist Seller in seeking the unconditional release of
Seller from any and all obligations or liabilities under or in respect of any
Contract, Assumed Lease or Government Proposal constituting an Acquired Asset.
(e) The obligations of Buyer and Seller with respect to
Contracts the assignment of which requires the consent of a Third Party shall be
subject to the further provisions set forth on Schedule 8.5(e).
8.6 Confidentiality.
(a) Each party hereby agrees that, except as required by
applicable Law, it will not disclose, nor will it permit any of its employees,
agents or representatives to disclose, to any Third Party any confidential
information obtained from the other party in connection with the transactions
contemplated hereby, this Agreement, the Ancillary Agreements, or the fact that
discussions regarding such transactions are taking place or that this Agreement
has been executed without the prior consent of the other party. If this
Agreement is terminated without consummation of the transactions contemplated
hereunder, promptly after termination, each party shall destroy or return to the
other party all such confidential information, including any copies, extracts or
other reproductions in whole or in part. Such return or destruction shall be
certified in writing to each party by an authorized officer of the other party.
The provisions of this Section 8.6(a) shall survive any termination of this
Agreement.
(b) Seller agrees that from and after the Closing Date it
shall, and shall cause its directors, officers, employees, advisors and
Affiliates to, keep the Group Confidential Information (as defined below)
confidential for a period of five (5) years from the Closing Date, except that
any Group Confidential Information may be disclosed if such disclosure is (i)
required by law or any regulatory body; provided however that Seller shall first
have given notice to Buyer and reasonably cooperated with Buyer with respect to
Buyer's efforts to obtain a protective order with respect to the Group
Confidential Information required to be disclosed; or (ii) necessary to
establish rights under this Agreement. For purposes hereof, the term "Group
Confidential Information" means all information that relates to the Acquired
Assets or the Assumed Liabilities, other than any such information that (i) is
available to the public on the Closing Date, or thereafter becomes available to
the public other than as a result of a breach of this Section 8.6; (ii) is
disclosed by Buyer to a Third Party without an obligation of confidence; (iii)
can be shown by Seller to have been developed by it completely independently of
the Group; or (iv) can be shown by Seller to have been rightfully received
completely independently from a third party without any obligation of
confidence.
(c) Buyer agrees that from and after the Closing Date it
shall, and shall cause its directors, officers, employees, advisors and
Affiliates to, keep the Seller Confidential Information (as defined below)
confidential for a period of five (5) years from the Closing Date,
29
except that any Seller Confidential Information may be disclosed if such
disclosure is (i) required by law or any regulatory body; provided however that
Buyer shall first have given notice to Seller and reasonably cooperated with
Seller with respect to Seller's efforts to obtain a protective order with
respect to Seller Confidential Information required to be disclosed; or (ii)
necessary to establish rights under this Agreement. For purposes hereof, the
term "Seller Confidential Information" means all information of Seller and its
Affiliates that relates to the Excluded Assets or the Excluded Liabilities and
provided to Buyer in connection with the transactions contemplated by this
Agreement or otherwise in Buyer's (including the Group's) possession from and
after the Closing, other than any such information that (i) is available to the
public on the Closing Date, or thereafter becomes available to the public other
than as a result of a breach of this Section 8.6; (ii) is disclosed by Seller to
a Third Party without an obligation of confidence; (iii) can be shown by Buyer
to have been developed by it completely independently of Seller; or (iv) can be
shown by Buyer to have been rightfully received completely independently from a
third party without any obligation of confidence.
(d) Each party shall notify the other party promptly upon
discovery of any unauthorized use or disclosure of the other party's
Confidential Information, and will cooperate with the other party in every
reasonable way to help the other party regain possession of such Confidential
Information and to prevent its further unauthorized use. For these purposes,
"Confidential Information" shall mean Group Confidential Information or Seller
Confidential Information, as applicable.
8.7 Filings and Authorizations. Seller and Buyer shall, as promptly
as practicable after the date hereof, file or supply, or cause to be filed or
supplied, or will make, or cause to be made, the following:
(a) All notifications and information required to be filed
or supplied pursuant to the HSR Act (including any request for additional
information or production of personnel for administrative interviews made
pursuant to the HSR Act) and all information or interviews reasonably requested
by state officials in connection with the sale and transfer of the Acquired
Assets; and
(b) All such other filings and submissions under Laws
applicable to it as may be required for it to consummate the transactions
contemplated by this Agreement.
(c) Each of Buyer and Seller shall immediately inform the
other party of any communication from any governmental authority in connection
with the filings made by the parties and any review of such filings and the
transactions contemplated by this Agreement conducted by such authority pursuant
to the HSR Act or such other similar foreign Law.
8.8 Notification of Breach. Each party shall promptly notify the
other party in writing of (i) the occurrence, or failure to occur, of any event
where such occurrence or failure is reasonably expected to cause any of such
party's representations or warranties contained in this Agreement to be untrue
or inaccurate in any material respect or (ii) any material failure of such party
to comply with or satisfy any of its covenants, conditions or agreements to be
complied with or satisfied by it under this Agreement; provided, however, that
such disclosure shall not be
30
deemed to cure any breach of a representation, warranty, covenant or agreement
or to satisfy any condition.
8.9 Post-Closing Refunds. If Seller receives any refund (including
without limitation any refund for Taxes) relating to the business or operations
of the Group for periods prior to the Closing Date and the liability to which
such refund relates was included as a cost in a cost-reimbursement or
fixed-price incentive (cost-redeterminable) Government Contract, then Seller
shall cooperate with Buyer to determine the appropriate portion of such refund
due to any Governmental Authority as if Buyer had pursued and obtained an
identical refund. Once the appropriate portion due any Governmental Authority is
determined, Seller shall promptly remit to Buyer such amount to be paid to such
Governmental Authority in an appropriate manner to be determined by Buyer. If
Buyer is liable for any Taxes (net of any Tax benefit to Buyer in making payment
to the Governmental Authority) as a result of such reimbursement by Seller,
Seller shall also pay to Buyer such additional amounts required to pay such
Taxes including any Tax on such payment.
8.10 Noncompetition Agreement.
(a) Seller agrees that, during the five-year period
commencing on the Closing Date, it shall not and shall not cause or permit any
of its Affiliates to, directly or indirectly, engage in any activities which
compete with the business or operation of the Group, anywhere in the world, for:
(i) the programs for which the Group has been awarded a Contract as of the
Closing Date, or for which the Group has submitted a bid or proposal as of the
date of this Agreement (which has not expired, been withdrawn or awarded to a
third-party); (ii) any extensions of such programs or follow-ons directly
derived from such programs; (iii) any contract subject to Cost Accounting
Standards ("CAS") coverage; (iv) any U.S. governmental military, defense or NASA
program; and (v) any program to provide space-borne equipment to a Governmental
Authority. The foregoing activities are referred to in this Agreement
collectively as "Seller Competitive Activities."
(b) Notwithstanding the foregoing, the provisions of Section
8.10(a) shall not prohibit Seller or any of its subsidiaries from:
(i) providing components, products or services under any
contract (other than any Government Contract) with (A)
the United States Government (acting on its own behalf
or on behalf of another country or international
organization), (B) any prime contractor performing under
a prime contract with the United States Government, (C)
any subcontractor performing under a prime contract with
the United States Government, or (D) any foreign
government (a "Non-IISG Government Contract") to which
Seller or any of its subsidiaries is a party as of the
date of this Agreement or under any bid or proposal with
respect to any Non-IISG Government Contract that was
submitted as of the date of this Agreement (which has
not expired, been withdrawn or awarded to a third party)
and any extensions or follow-ons directly derived from
programs to which such Non-IISG Government Contracts
relate; or
31
(ii) selling or otherwise providing commercial items (as
defined in FAR 2.101 as of January 1, 2001) or services
related solely to Seller commercial items ("Related
Services") (including, without limitation, the following
products that meet the definition of commercial item
and/or Related Services: wireline or wireless telephony,
two-way radios, infrastructure equipment, network
management, paging, equipment maintenance, systems
integration services, data systems, voice processing or
commercial items or Related Services premised upon
packet switching or cell-based technologies (including
Internet protocols and security services)), including,
without limitation, those commercial items and Related
Services offered by Seller's Commercial, Government,
Industrial Solutions Sector, which delivers integrated
communication and information solutions for work teams
in business and government; or
(iii) engaging in the business of designing, manufacturing or
selling semiconductor components; or
(iv) engaging in business conducted by a business unit
currently within the Motorola Corporate Technology
Office and currently subject to modified CAS coverage,
provided such business does not exceed $50,000,000.00 in
revenue in any Seller fiscal year; or
(v) competing for awards and providing components, products
or services under any order issued under the Army's Base
Radio Systems contract; or
(vi) competing for awards and providing components, products
or services under any law enforcement or public safety
contracts subject to CAS coverage, provided that such
contracts are not with the U.S. Department of Defense,
or a component thereof.
(c) Notwithstanding the provisions of Section 8.10(a), the
acquisition (by asset purchase, stock purchase, merger, consolidation or
otherwise) by Seller or any of its Affiliates of the stock, business or assets
of any Person that at the time of such acquisition is engaged in Seller
Competitive Activities, and the continuation of such Seller Competitive
Activities following such acquisition, shall not be in breach of the terms of
this Section 8.10 if: (i) the portion of the revenues of such Person and its
subsidiaries on a consolidated basis for the fiscal year ending prior to the
date of such acquisition that is attributable to Seller Competitive Activities
by such Person and its subsidiaries ("Seller Competitive Revenues") account for
less than 20 percent of the revenues of such Person and its subsidiaries on a
consolidated basis for such fiscal year; or (ii) in the event the foregoing
condition is not satisfied, Seller offers, or cause its Affiliates to offer the
portion of such business or assets that represents Seller Competitive Activities
to Buyer and negotiates in good faith with Buyer as to the terms and conditions
of Buyer's purchase of such business and assets, provided that (A) if Buyer
notifies Seller in writing that it is unwilling to purchase such business or
assets, or (B) if following such good faith negotiations, the parties are unable
to reach agreements on the terms of such a purchase, Seller
32
promptly uses its reasonable efforts to sell such business or assets, including,
without limitation, by actively marketing the business or assets on commercially
reasonable terms.
(d) Nothing in this Section 8.10 will restrict or prevent
Seller or any of its subsidiaries from maintaining and/or undertaking passive
investments in Persons primarily engaged in the Seller Competitive Activities so
long as the aggregate interest represented by such investments does not exceed
(i) 5% of any class of the outstanding debt or equity securities of any such
Person, in the case of a Person whose shares are listed on a national securities
exchange or the NASDAQ National Market System or equivalent foreign exchange or
quotation system or (ii) 5% of any class of the outstanding equity or debt
securities in the case of any other Person;
(e) If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 8.10 is invalid
or unenforceable, the parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration or area of the term or provision, to delete specific words or phrases
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision and this Agreement
shall be enforceable as so modified. Seller acknowledges that Buyer would not
have an adequate remedy at law in the event of the violation of this Section
8.10 and that the scope, duration and area restrictions on Seller's activities
provided by this Section 8.10 are fair and reasonably required for the
protection of Buyer and its Affiliates. Therefore, in addition to any other
remedies which Buyer may have under this Agreement or otherwise, Buyer shall be
entitled to apply to any court of competent jurisdiction for an injunction
restraining Seller from committing or continuing any violation of this Section
8.10 without the requirement of posting any bond or other indemnity.
8.11 Real Property Matters
(a) From and after the date hereof, Seller agrees to
cooperate with Buyer and to provide Buyer's employees, agents and
representatives with access to the Premises for purposes of performing such
inspections, tests and surveys of the Premises as Buyer reasonably determines
are necessary in connection with the transactions contemplated by this
Agreement. Prior to performing any such inspections, tests and surveys of the
Premises, Buyer shall obtain Seller's consent to each such procedure. Such
inspections, tests and surveys of the Leased Premises shall be conducted only
after Seller obtains the consent of Seller and Seller obtains the consent of the
respective landlords of the Leased Premises.
(b) Seller has delivered to Buyer a current title commitment
(the "Title Commitment") from a title insurance company reasonably acceptable to
Buyer (the "Title Company") with respect to the Owned Premises. If the Title
Commitment discloses any Lien other than a Permitted Lien (each, an "Unpermitted
Lien"), Seller shall remove, or cause to be removed, all Unpermitted Liens or,
in the alternative, obtain title insurance in a form reasonably satisfactory to
Buyer insuring over all of such Unpermitted Liens.
(c) Within fourteen (14) days after the execution and
delivery of this Agreement, Seller will deliver to Buyer a current survey (the
"Survey") of the Owned Premises certified to Buyer and the Title Company,
prepared by a licensed surveyor and conforming to the
33
current ALTA/ACSM Minimum Standard Detail Requirements for Land Title Surveys,
disclosing the location of all improvements, easements, roadways, utility lines
and other matters customarily shown on such surveys (including such Table A
items as Buyer may reasonably request). The Survey shall affirmatively show that
the Owned Premises has access to publicly dedicated streets and shall otherwise
be reasonably acceptable to Buyer. The costs and expenses incurred in connection
with the Survey will be shared equally by Seller and Buyer.
(d) On or before the Closing, Seller shall use commercially
reasonable efforts to obtain an estoppel agreement in form and substance
reasonably satisfactory to Buyer from the landlords under the Assumed Real
Property Leases for the Leased Premises designated on Schedule 8.11(d). Buyer
acknowledges that certain of the Assumed Real Property Leases do not contain
clauses requiring the respective landlords to provide such estoppel agreements.
8.12 Settlement of Indirect Expense Rates. Schedule 8.12 sets forth
(1) the indirect expense billing rates by cost pool that have been or are being
used by Seller for the novated flexibly-priced contracts of the Group for the
contractor's fiscal years not yet settled with the United States Government
("Open Years"); (2) for each of such Open Years, the allocation base for novated
flexibly-priced contracts to which indirect expense billing rates were or are
being applied (the "Allocation Base"); and (3) for each Open Year the reserves
established by the Group for final indirect expense billing rate adjustments.
(a) With respect to Seller's corporate office expenses or
other indirect costs of Seller allocated to the Group ("Seller's Corporate
Allocation") for Open Years (through the Closing Date), Seller will be
responsible for the resolution of all matters relating to the allowability or
allocation of Seller's Corporate Allocation and the negotiation and settlement
of final allowable expenses with the United States Government. Seller shall seek
such settlements diligently and in good faith, and Seller shall not settle any
such Seller's Corporate Allocation matter without the consent of Buyer, which
consent shall not be unreasonably withheld.
(b) With respect to the indirect expenses of the Group and
its divisions ("Group Indirect Expenses") for Open Years, Buyer will be
responsible for the resolution of all matters relating to the allowability or
allocation of Group Indirect Expenses and the negotiation and settlement of
final allowable expenses with the United States Government. Buyer shall seek
such settlements diligently and in good faith, and Buyer shall not settle any
such Group Indirect Expense matter without the consent of Seller, which consent
shall not be unreasonably withheld.
(c) Buyer and Seller recognize and agree that, as to those
flexibly-priced contracts that are novated to Buyer, Buyer shall be responsible,
as a result of any final adjustments to provisional billing rates for Open Years
for Seller's Corporate Allocation and Group Indirect Expenses, for refunding to
the United States Government (or higher tier contractor) any amounts due, or
rendering an invoice to the United States Government (or higher tier contractor)
for any additional billings. In the event the final rates negotiated with the
United States Government are lower than the rates set forth in Schedule 8.12,
Seller shall promptly reimburse Buyer for the difference, but only to the extent
that such difference exceeds the reserves for regular rate negotiations
established by the Group as of the Closing Date to address such differences. In
the event the final rates negotiated with the United States Government are
34
higher than the rates set forth in Schedule 8.12, Buyer shall diligently pursue
recovery of and promptly reimburse Seller for the difference, assuming the
additional billings are within the funded value of the contract and Buyer is
actually able to recover such additional costs. For purposes of this clause (c),
the dollar amount of the difference between provisional and final billing rates
for each Open Year will be determined, for each billing rate identified in
Schedule 8.12, (1) by the application of the difference between provisional and
final billing rates to the respective allocation base identified in Schedule
8.12 and (2) by the allocation of such product to individual contracts. An
underrun of one rate may be used to offset an overrun of another rate within the
same year.
8.13 Additional Discounts. Seller will extend an additional 8%
discount on non-GSA schedule products sold to Buyer under the Joint Pursuit
Teaming Agreement (U.S. Coast Guard).
ARTICLE IX
TERMINATION
9.1 Termination of Agreement. Notwithstanding anything contained in
this Agreement to the contrary, this Agreement may be terminated and abandoned
at any time prior to the Closing:
(a) by the mutual written consent of Seller and Buyer;
(b) by Seller or Buyer if any court of competent
jurisdiction or governmental body, authority or agency having jurisdiction shall
have issued an order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement and such order, decree, ruling or other action shall have become final
and nonappealable; and
(c) by either party if the Closing shall not have occurred
on or before December 31, 2001; provided that the terminating party is not
otherwise in material default or breach of this Agreement.
9.2 Effect of Termination. If any party terminates this Agreement
pursuant to Section 9.1 above, all obligations of the parties hereunder shall
terminate without any liability of any party to such other party; provided that
nothing herein shall relieve any party from any liability for any breach of this
Agreement.
ARTICLE X
GENERAL PROVISIONS
10.1 Expenses. Except as expressly provided herein, all of the
expenses incurred by Seller in connection with the preparation, execution and
consummation of this Agreement and with the transactions contemplated herein
shall be paid by Seller; and all such expenses of Buyer shall be paid by Buyer.
35
10.2 Risk of Loss. Any risk of loss or damage to the Acquired Assets
shall be borne by Seller until the Closing.
10.3 Notices. All notices, requests, demands and other communications
hereunder shall be in writing, addressed as follows:
If to Seller: Motorola, Inc.
1301 E. Algonquin Road
Schaumburg, Illinois 60196
Facsimile No.: (847) 538-2491
Attn: Bob McCall
and Motorola, Inc.
Law Department
1303 E. Algonquin Road
Schaumburg, Illinois 60196
Facsimile No.: (847) 576-3628
Attn: General Counsel
with a copy (which shall not constitute notice) to:
Wiley, Rein & Fielding
1776 K Street, N.W.
Washington, D.C. 20006
Facsimile No.: (202) 719-7049
Attn: Kay Tatum
If to Buyer: General Dynamics Corporation
3190 Fairview Park Drive
Falls Church, VA 22042
Facsimile No.: (703) 876-3554
Attn: David A. Savner
with a copy (which shall not constitute notice) to:
Jenner & Block, LLC
One IBM Plaza
Chicago, Illinois 60606
Facsimile No.: (312) 840-8711
Attn: Thomas A. Monson
or to such other address as Buyer or Seller may designate by written notice to
the other party hereto. Any such notices, requests, demands or other
communications shall be deemed to have been duly given when received if
delivered personally or, if mailed, on the date five (5) days after the date so
deposited in the mails, postage prepaid, return receipt requested or on the day
following the day sent if sent by prepaid overnight delivery service. Notices,
requests, demands and other communications hereunder may be delivered by
facsimile transmission if confirmation
36
by sender is made within three (3) business days thereafter. All periods of
notice will be measured from the date of deemed delivery thereof.
10.4 Nondisclosure. Neither Buyer nor Seller shall issue any press
release or make any other public disclosure (including disclosure to public
officials) with respect to this Agreement, the Ancillary Agreements or the
transactions contemplated by this Agreement or the Ancillary Agreements, except
as required by law, without the prior approval of the other party, which
approval shall not be unreasonably withheld; provided, that either party may, if
considered necessary by its counsel to fulfill its obligations as a publicly
traded corporation, respond to inquiries and issue such releases as it considers
necessary and appropriate, if it notifies the other party in advance of the
substance of such proposed response or proposed release and gives such party
reasonable opportunity for comment prior to such response or release.
10.5 Dispute Resolution
(a) Seller and Buyer mutually desire that friendly
collaboration be maintained between themselves. Accordingly, they shall try to
resolve in a friendly manner all disagreements and misunderstandings connected
with their respective rights and obligations under this Agreement, including any
amendments hereof.
(b) To the extent that any misunderstanding or dispute
cannot be resolved agreeably in a friendly manner, the dispute may be mediated
by such mutually-acceptable mediator as may be chosen by Seller and Buyer within
forty-five (45) days after written notice by the party seeking mediation. The
parties may also agree to attempt some other form of ADR in lieu of mediation,
including by way of example and without limitation neutral fact-finding or a
mini-trial.
(c) Nothing in this Section 10.5 will prevent either party
from resorting to judicial proceedings.
(d) Each of Buyer and Seller shall bear its costs of
mediation or ADR, but Buyer and Seller agree to share equally the costs of the
arbitrator, mediator or other person or forum to whom or to which the parties
jointly appeal for assistance in resolving a dispute.
10.6 Limitation of Liability. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL,
INCIDENTAL, INDIRECT, COLLATERAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR LOST
PROFITS IN CONNECTION WITH ANY CLAIMS, LOSSES, DAMAGES, OR INJURIES ARISING OUT
OF THE CONDUCT OF SUCH PARTY PURSUANT TO THIS AGREEMENT.
10.7 Bulk Sales Laws. Buyer hereby waives any right or claim against
Seller (whether by direct suit or action or pursuant to the indemnification
provisions set forth in Article VII hereof) for any claims made by creditors or
other third parties, or any Damages suffered by Buyer, with respect to
compliance with any Law relating to bulk sales or transfers.
37
10.8 Provisions in Ancillary Agreements to Govern Notwithstanding any
provision to the contrary contained in this Agreement or in any of the Ancillary
Agreements, the parties acknowledge that employee matters, intellectual
property, environmental matters and transition services are governed by the
respective Ancillary Agreements, and if and to the extent that there is any
conflict between this Agreement and an Ancillary Agreement with respect to the
subject matter covered by the Ancillary Agreement, the terms and conditions of
the Ancillary Agreement shall govern.
10.9 Miscellaneous
(a) Governing Law; Jurisdiction. This Agreement shall be
governed and construed under the internal laws (but not the principles of
conflicts of laws) of the State of Illinois. Each of Seller and Buyer consents
to the exclusive jurisdiction of the federal courts of Illinois for any
Proceeding in connection with this Agreement or the transactions contemplated
hereby and agrees that any such Proceeding may be brought only in such courts.
Each of Seller and Buyer further waives any objection to the laying of venue for
any Proceeding in such courts. Each party agrees to accept and acknowledge
service of any and all process that may be served in any Proceeding. Each party
agrees that any service of process upon it mailed by registered or certified
mail, return receipt requested to such party at the address provided in Section
10.3 above will be deemed in every respect effective service of process upon
such party in any such Proceeding. Each party agrees to waive any right it might
have to a trial by jury in any such Proceeding.
(b) Entire Agreement. This Agreement, together with all
exhibits and schedules hereto, and other documents contemplated hereby to be
delivered by the parties including, but not limited to, the Ancillary
Agreements, cover the entire understanding of the parties hereto, superseding
all prior agreements or understandings relating to any of the subject matters
hereof, and no modification or amendment of the terms and conditions shall be
effective unless in writing and signed by the parties or their respective duly
authorized agents.
(c) Further Assurances. Each party hereto shall, both prior
and subsequent to the Closing Date, upon the request of the other party and
without further consideration, execute and deliver such other instruments of
conveyance, assignment, transfer and assumption, and take such other actions,
including making relevant employees available for consultation and assistance,
as such other party may reasonably request to more effectively and efficiently
carry out the covenants and agreements of the parties set forth herein and
consummate the transactions contemplated by this Agreement.
(d) Successors and Assigns. This Agreement inures to the
benefit of, and is binding upon, the successors, permitted assigns, and personal
representatives of the parties hereto. Neither party may assign its rights or
obligations under this Agreement without the express written consent of the
other party, except that Buyer may, without the prior written consent of Seller,
assign its rights under this Agreement to any of its direct or indirect wholly
owned subsidiaries, provided that Buyer shall remain liable for all of its
obligations under this Agreement.
38
(e) Headings. This Agreement shall not be interpreted by
reference to any of the titles or headings to the sections or paragraphs of this
Agreement, which have been inserted for convenience purposes only and are not
deemed a part hereof.
(f) Schedules; Exhibits. This Agreement is deemed to include
all of the schedules and exhibits hereto, which are made a part hereof by this
reference thereto.
(g) Counterparts. This Agreement may be executed in
counterparts, both of which together shall be deemed to constitute one and the
same instrument.
(h) Severability. This Agreement shall be fully enforceable
and effective as to the parties hereto as to its remaining provisions in the
event any provision is held to be invalid, illegal or unenforceable.
(i) No Third Party Beneficiaries. This Agreement shall not
confer any rights or remedies on any person other than the parties hereto and
their respective successors and permitted assigns.
(j) No Waiver. Any failure or delay on the part of either
party in the exercise of any right or privilege hereunder shall not operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
privilege preclude other or further exercise thereof or any other right or
privilege.
[SIGNATURE PAGE FOLLOWS]
39
SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement with legal and binding effect as of the date and year first above
written.
SELLER: MOTOROLA, INC.
By: /s/Keith Bane
-------------------------------
Name: Keith Bane
Title: Executive Vice President
BUYER: GENERAL DYNAMICS CORPORATION
By: /s/Ken Dahlberg
-------------------------------
Name: K. C. Dahlberg
Title: Executive Vice President
Exhibits (omitted except as indicated below)
A - Definitions (attached)
A-1 - Knowledge
B - Intellectual Property Agreement (attached)
C - Employee Matters Agreement (attached)
D - Environmental Matters Agreement (attached)
E-1 - Transition Services Agreement - Motorola Services
E-2 - Transition Services Agreement - IISG Services
F - Bill of Sale
G - Assignment and Assumption Agreement
H - Financial Statements
I - Lease
J - Strategic Alliance Agreement
K - IISG/Motorola Labs Technology Cooperation Agreement
L - IISG/SPS Technology Cooperation Agreement
M - IISG/PCS Technology Cooperation Agreement
N - IISG/PCS Joint Development Agreement
O - Manufacturer Representative and Supply Agreement
P - International Manufacturer Representative Agreement
Q - Intellectual Property Agreement for Test Equipment
R - Iridium Subscriber Handset Agreement
S - Joint Pursuit Teaming Agreement (U.S. Coast Guard)
Schedules (omitted)
1.1(b) - Software Licenses
1.1(c) - Tangible Personal Property
1.1(e) - Real Property
1.1(m) - Telephone Numbers
1.2(m) - Excluded Assets
1.2(n) - Excluded Contracts
1.4(a) - Excluded Claims
1.4(h) - Excluded Liabilities
3.3 - Conflicts
3.4 - Taxes
3.5 - Litigation
3.6(b) - Ownership of Assets
3.7 - Real Property
3.8 - Compliance with Laws
3.9 - Material Contracts
3.10(a)- Government Contract Compliance
3.10(b)- Government Contract Investigations
3.10(c)- Government Contract Absence of Claims
3.10(d)- Cost Accounting Systems
3.12 - Clearances
3.14 - Disclosed Liabilities
3.15 - Absence of Change
3.16 - Brokers
6.1(d) - Required Consents
8.1(b) - Capital Acquisition Report
8.5(e) - Third Party Consent Provisions
8.11(d)- Leased Premises for Estoppel Agreements
8.12 - Indirect Expense Rates
EXHIBIT A
DEFINITIONS
"Accounts Payable" shall have the meaning referenced in Section 1.3(b).
"Accounts Receivable" shall have the meaning referenced in Section
1.1(f).
"Acquired Assets" shall have the meaning referenced in Section 1.1.
"ADR" shall mean alternative dispute resolution.
"Affiliate" shall mean, with respect to any specified entity or
organization, an entity or organization that directly, or indirectly through one
or more intermediaries, controls, is controlled by, or is under common control
with, such specified entity or organization.
"Allocation Base" shall have the meaning referenced in Section 8.12.
"Allocation Statement" shall have the meaning referenced in Section
2.2(a).
"Ancillary Agreements" shall mean, collectively, the Employee Matters
Agreement, the Intellectual Property Agreement, the Environmental Matters
Agreement, the Transition Services Agreements, the Strategic Alliance Agreement
and the Commercial Agreements.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form attached hereto as Exhibit G.
"Assumed Real Property Leases" shall have the meaning referenced in
Section 1.1(e).
"Assumed Liabilities" shall have the meaning referenced in Section 1.3.
"Balance Sheet" shall mean the balance sheet for the Group as of the
Balance Sheet Date.
"Balance Sheet Date" shall mean June 30, 2001.
"Bill of Sale" shall mean the Bill of Sale substantially in the form
attached hereto as Exhibit F.
"Books and Records" shall have the meaning referenced in Section 1.1(h).
"Business Day" shall mean any day other than a Saturday, Sunday or legal
holiday that banks are open in Chicago, Illinois.
"Buyer Parties" shall have the meaning referenced in Section 7.1.
"Capital Acquisition Report" shall mean the financial report of Seller
containing the actual and budgeted capital expenditures of Seller with respect
to the Group in the form attached hereto as Schedule 8.1(b).
"Certicom Investment" shall mean the shares of common stock and other
equity rights held by Seller and its Affiliates in Certicom Corporation.
"Claim" shall mean a demand, suit, claim or assertion of liability by
third parties or other circumstances that could give rise to an indemnification
obligation arising under Article VII of this Agreement.
"Clearances" shall have the meaning referenced in Section 3.12.
"Closing" shall have the meaning referenced in Section 5.1.
"Closing Date" shall have the meaning referenced in Section 5.1.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commercial Agreements" shall mean collectively the IISG/Motorola Labs
Technology Cooperation Agreement, the IISG/SPS Technology Cooperation Agreement,
the IISG/PCS Technology Cooperation Agreement, the IISG/PCS Joint Development
Agreement, the Manufacturer Representative and Supply Agreement, the
International Manufacturer Representative Agreement, the Intellectual Property
Agreement for Test Equipment, the Iridium Subscriber Handset Agreement and the
Joint Pursuit Teaming Agreement (U.S. Coast Guard).
"Contracts" shall have the meaning referenced in Section 1.1(a).
"Damages" shall mean losses, costs, claims, actions, suits, proceedings,
demands, damages, liabilities, obligations, amounts paid in settlement, interest
and expenses (including reasonable attorneys' fees, court costs and other
out-of-pocket expenses incurred in investigating, preparing or defending the
foregoing).
"Disputed Claims" shall mean claims for Damages by an indemnified party
which the indemnifying party objects to in writing within thirty (30) days after
receiving notice of the Claim.
"Employee Matters Agreement" shall mean the Employee Matters Agreement
substantially in the form attached hereto as Exhibit C, including the Motorola
General Dynamics Pension Transfer Agreement and the Motorola General Dynamics
401(h) Transfer Agreement.
"Environmental Matters Agreement" shall mean the Environmental Matters
Agreement substantially in the form attached hereto as Exhibit D.
"Excluded Assets" shall mean all assets, properties, rights, contracts
and claims of Seller or its Affiliates except for the Acquired Assets, including
without limitation, the assets, properties, rights, contracts and claims listed
in Sections 1.2(a) through (n).
"Excluded Liabilities" shall have the meaning referenced in Section 1.4.
"Financial Statements" shall have the meaning referenced in Section
3.13.
"GAAP" shall mean United States generally accepted accounting
principles.
"Governmental Authority" shall mean any legislative, executive or
judicial unit of any governmental entity (foreign, federal, state or local) or
any department, commission, board, agency, bureau, official or other regulatory,
administrative or judicial authority thereof, foreign or domestic.
"Government Contracts" shall mean those Contracts with (i) the United
States Government (acting on its own behalf or on behalf of another country or
international organization), (ii) any prime contractor performing under a prime
contract with the United States Government, (iii) any subcontractor performing
under a prime contract with the United States Government, or (iv) any foreign
government.
"Government Proposal" shall mean all bids or proposals in respect of the
Group which, if accepted, would result in a Government Contract.
"Group Confidential Information" shall have the meaning referenced in
Section 8.6(b).
"Group Indirect Expenses" shall have the meaning referenced in Section
8.12.
"HSR Act" shall mean Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"IISG/Motorola Labs Technology Cooperation Agreement" shall mean the
IISG/Motorola Labs Technology Cooperation Agreement substantially in the form
attached hereto as Exhibit K.
"IISG/PCS Joint Development Agreement" shall mean the IISG/PCS Joint
Development Agreement substantially in the form attached hereto as Exhibit N.
"IISG/PCS Technology Cooperation Agreement" shall mean the IISG/PCS
Technology Cooperation Agreement substantially in the form attached hereto as
Exhibit M.
"IISG/SPS Technology Cooperation Agreement" shall mean the IISG/SPS
Technology Cooperation Agreement substantially in the form attached hereto as
Exhibit L.
"Intellectual Property Agreement" shall mean the Intellectual Property
Agreement substantially in the form attached hereto as Exhibit B.
"Intellectual Property Agreement for Test Equipment" shall mean the
Intellectual Property Agreement for Test Equipment substantially in the form
attached hereto as Exhibit Q.
"International Manufacturer Representative Agreement" shall mean the
International Manufacturer Representative Agreement substantially in the form
attached hereto as Exhibit P.
"Inventory" shall have the meaning referenced in Section 1.1(d).
"Iridium Claims" shall mean any liability or obligation in respect of
Proceedings relating to the Iridium satellite communications business, including
with limitation Freeland v. Iridium World Communications, Inc., et al., The
Chase Manhattan Bank v. Motorola, Inc., The Chase Manhattan Bank v. Iridium
Africa Corp. and Statutory Committee of Unsecured Creditors v. Motorola, Inc.
"Iridium Subscriber Handset Agreement" shall mean the Iridium Subscriber
Handset Agreement substantially in the form attached hereto as Exhibit R.
"Joint Pursuit Teaming Agreement (U.S. Coast Guard)" shall mean the
Joint Pursuit Teaming Agreement (U.S. Coast Guard) substantially in the form
attached hereto as Exhibit S.
"Knowledge" shall mean actual knowledge of a particular fact or other
matter after due inquiry. For purposes of this Agreement, Seller's Knowledge and
Buyer's Knowledge shall, respectively, be limited to the actual knowledge of
those persons listed under such party's name on Exhibit A-1.
"Laws" shall mean laws, statutes, ordinances, regulations, rules,
decrees, orders, judgments, permits and licenses of or from Governmental
Authorities.
"Lease" shall mean the Lease substantially in the form attached hereto
as Exhibit I.
"Leased Premises" shall mean the real property that is leased or
subleased by Seller as lessee from Third Parties or Affiliates of Seller, is
used or held for use in connection with the business or operations of the Group,
and is identified on Schedule 3.7.
"Liens" shall mean liens, claims, charges, security interests,
restrictions and other encumbrances of any kind or nature.
"Manufacturer Representative and Supply Agreement" shall mean the
Manufacturer Representative and Supply Agreement substantially in the form
attached hereto as Exhibit O.
"Material Adverse Effect" shall mean any effect that is reasonably
expected to be materially adverse to the business, condition (financial or
otherwise), operations or results of operations of the Group when taken as a
whole or to the value of the Acquired Assets when taken as a whole.
"Material Contract" shall have the meaning referenced in Section 3.9.
"Material Proceeding" shall have the meaning referenced in Section 3.5.
"Motorola Credit Union Ground Lease" shall mean the Lease dated May 7,
1982 between Seller and the Motorola Credit Union of Arizona.
"Novation Agreement" shall have the meaning referenced in Section 8.4.
"Open Years" shall have the meaning referenced in Section 8.12.
"Owned Premises" shall have the meaning referenced in Section 1.1(e).
"Permits" shall mean all permits, consents, approvals, franchises,
certificates of inspection or authority, authorizations and orders, and any
waiver of the foregoing, issued by any Governmental Authority and used or held
for use in relation to the business or operation of the Group or the Acquired
Assets, but not including Clearances.
"Permitted Liens" shall mean (i) Liens which will be discharged upon
payment by Buyer of the associated Assumed Liabilities, (ii) easements, rights
of way, restrictions, encumbrances, covenants, conditions, encroachments or any
other matters affecting title to any parcel of the Owned Premises or any of the
other Acquired Assets which do not individually or in the aggregate materially
detract from the value or interfere materially with the present use of the
affected parcel or the Owned Premises or the Acquired Assets, and (iii) Liens
for Taxes, materialmen's, mechanics', carriers', workmen's, repairmen's and
other like Liens arising in the ordinary course of business of the Group and not
yet due and payable and for which reserves have been established in accordance
with GAAP.
"Person" shall mean any individual, corporation, partnership, firm,
association, joint venture, joint stock company, trust, unincorporated
organization or other entity, or any government or regulatory, administrative or
political subdivision or agency, department or instrumentality thereof.
"Personal Property Leases" shall have the meaning referenced in Section
1.1(b).
"Premises" shall mean the Owned Premises and the Leased Premises.
"Primary Ancillary Agreements" shall mean the Ancillary Agreements other
than the Strategic Alliance Agreement and the Commercial Agreements.
"Proceeding" shall mean a matter of governmental, judicial or
adversarial proceedings (public or private), litigation, arbitration, disputes,
claims, causes of action or investigations.
"Pro Forma Balance Sheet" shall mean the balance sheet for the Group as
of the Balance Sheet Date which reflects the Acquired Assets and the Assumed
Liabilities.
"Purchase Price" shall have the meaning referenced in Section 2.1.
"Seller Parties" shall have the meaning referenced in Section 7.2.
"Seller's Corporate Allocation" shall have the meaning referenced in
Section 8.12.
"Software Licenses" shall have the meaning referenced in Section 1.1(b).
"Strategic Alliance Agreement" shall mean the Strategic Alliance
Agreement substantially in the form attached hereto as Exhibit J.
"Survey" shall have the meaning referenced in Section 8.11(c).
"Tangible Personal Property" shall have the meaning referenced in
Section 1.1(c).
"Taxes" shall have the meaning referenced in Section 3.4.
"Third Party" shall mean any Person not an Affiliate of the other
referenced Person or Persons.
"Title Commitment" shall have the meaning referenced in Section 8.11(b).
"Title Company" shall have the meaning referenced in Section 8.11(b).
"Title Policies" shall have the meaning referenced in Section 6.1(e).
"Transition Services Agreements" shall mean the Transition Services
Agreements substantially in the form attached hereto as Exhibit E-1 and Exhibit
E-2.
"United States Government" shall mean the federal government of the
United States of America and any agencies, instrumentalities and departments
thereof.
"Unpermitted Lien" shall have the meaning referenced in Section 8.11(b).
EXHIBIT B
INTELLECTUAL PROPERTY AGREEMENT
between
MOTOROLA, INC.,
a Delaware corporation
and
GENERAL DYNAMICS CORPORATION,
a Delaware Corporation
Dated as of August 6, 2001
INTELLECTUAL PROPERTY AGREEMENT
This Intellectual Property Agreement (this "IP Agreement"), made as of
August 6, 2001, between Motorola, Inc. ("Seller"), a Delaware corporation, and
General Dynamics Corporation ("Buyer"), a Delaware corporation.
WITNESSETH:
WHEREAS, Seller designs, develops, manufactures, produces, provides,
integrates and sells secure communication and information products, systems and
services, including integrated command, control, communication, computer,
intelligence, surveillance and reconnaissance systems; software-defined radio
systems; high-assurance security and encryption products and services;
integrated communications systems; and specialized restricted space payloads,
for government and military enterprises in domestic and international markets
through its Integrated Information Systems Group (the "Group"); and
WHEREAS, Buyer desires to acquire substantially all of the assets,
business and operation of the Group and is willing to assume certain specified
liabilities of the Group, and Seller is willing to convey and assign the same
all on the terms and conditions set forth in the Asset Purchase Agreement
("Asset Purchase Agreement"); and
WHEREAS, certain Seller assets used by the Group constitute intellectual
property assets ("IP Assets"), including (but not limited to): U.S. and foreign
patents and pending patent applications, invention disclosures and innovations
(whether or not patentable and whether or not reduced to practice); U.S. and
foreign registered and unregistered trademarks, service marks, brand names,
trade dress, internet domain names, trade names and other indications of origin,
the goodwill associated with the foregoing, and applications to register the
foregoing, including any extension, modification, or renewal of any such
registration or application; U.S. and foreign registered and unregistered
copyrights; software; non-public and confidential information, know-how and
trade secrets; mask works; other intellectual property protectable by rights
under state law or common law; and any claims or causes of action arising out of
or related to any infringement or misappropriation of any of the foregoing
occurring before, on, or after the Closing Date; and
WHEREAS, as part of Buyer's acquisition of the Group, Seller intends to
transfer certain IP Assets to the Buyer and license Buyer to use and have
certain intellectual property rights in certain other IP Assets; and
WHEREAS, Buyer intends to license Seller to use and have certain
intellectual property rights in certain of such transferred IP Assets, as
further herein defined.
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements set forth below and in the
Asset Purchase Agreement, the parties agree with legal and binding effect as
follows:
ARTICLE I
DEFINITIONS
As used in this IP Agreement, capitalized terms not otherwise defined
herein shall have the meanings as set forth on Exhibit A to the Asset Purchase
Agreement.
1.1 "Assigned Copyrightable Materials" means Seller and Seller
Subsidiary owned technical manuals, application notes, promotional materials and
other printed, written or computer-stored materials used exclusively by the
Group in connection with the business or operation of the Group as of the
Closing Date.
1.2 "Assigned Copyrights" means the copyright registrations and
registration applications set forth on Schedule 1.2 hereto.
1.3 "Assigned Invention Disclosures" means the invention disclosures
set forth on Schedule 1.3 hereto.
1.4 "Assigned Know-How" means confidential and proprietary
information owned by Seller and its Subsidiaries, including without limitation
technical product specifications, technical product plans, reports, data,
drawings, documents, algorithms, methods of manufacture, methods of use,
business methods, process flow sheets and other information that is used
exclusively by the Group in connection with the business or operation of the
Group as of the Closing Date. In no event shall the term Assigned Know-How
include or encompass any Celestri Know-How, Iridium Know-How, Teledesic Know-How
or any other Seller Know-How. "Celestri Know-How" means all confidential and
proprietary information owned or licensable by Seller that relates to: (i)
system concepts or designs developed by Seller for any combined GEO/LEO
satellite broadband data transmission system, concepts, together with any
systems, concepts, studies, or research from any predecessor programs to such
combined GEO/LEO satellite broadband data transmission system; and (ii) the
number and arrangement of satellites, capacity enhancement strategies, network
transport protocols, network topologies, network routing and operation concepts,
network control, system control, and methods of hand-off. Celestri Know-How
shall not include specific hardware or software implementations of any
components such as, but not limited to, satellites, satellite payload, and
subcomponents thereof. "Iridium Know-How" means all confidential and proprietary
information owned or licensable by Seller that relates to: (i) system concepts
or designs developed by Seller for any primarily voice, narrowband
satellite-based telecommunications system, concepts, or studies; and (ii) the
number and arrangement of satellites, capacity enhancement strategies, network
transport
protocols, network topologies, network routing and operation concepts, network
control, system control and methods of hand-off. Iridium Know-How does not
include specific hardware or software implementations of any components such as,
but not limited to, satellites, satellite payload, and subcomponents thereof, or
those system concepts or designs developed by Seller that are incorporated into
the Celestri Know-How or Teledesic Know-How. "Teledesic Know-How" means all
confidential and proprietary information owned or licensable by Seller that
relates to: (i) system concepts or designs developed by Seller for a
satellite-based broadband system for the transmission of communications and
data, such system including satellites; ground-based sites, equipment, and
facilities to operate and manage the satellites and the communications links of
the system; one or more network control systems; and ground-based equipment and
software which is used by subscribers for sending and receiving communications
through the system; and (ii) the number and arrangement of satellites, capacity
enhancement strategies, network transport protocols, network topologies, network
routing and operation concepts, network control, system control, and methods of
hand-off. Teledesic Know-How does not include specific hardware or software
implementations of any components such as, but not limited to, satellites,
satellite payload, and subcomponents thereof.
1.5 "Assigned Patents" means the U.S. and foreign patents and patent
applications set forth on Schedule 1.5 hereto.
1.6 "Assigned Software" means software owned by Seller and its
Subsidiaries and used exclusively by the Group in connection with the business
or operation of the Group as of the Closing Date. Assigned Software does not
include third party software used under license by Seller ("Third Party
Software").
1.7 "Assigned Trademarks" means the trademarks, service marks, brand
names, trade dress, trade names, and other indications of origin, the goodwill
associated with the foregoing, and U.S. and foreign registrations and
applications for the foregoing (the "Marks") used exclusively by the Group in
connection with the business or operation of the Group as of the Closing Date,
including but not limited to the Marks set forth on Schedule 1.7 hereto.
1.8 "Confidential Information" means the information of each party
referenced in Section 5.5 below.
1.9 "Excluded IP Assets" means any and all Seller Intellectual
Property, including Licensed Patents, not specifically identified herein as
Transferred IP Assets. Excluded IP Assets expressly includes Seller's technology
described in Section 2.2.8.
1.10 "Fuze Patents" means those patents set forth on Schedule 1.10
hereto.
1.11 "Group Customers" means (i) the United States Government or any
foreign government, and any legislative, executive or judicial unit, any
military enterprise, or any department, administration, agency, bureau, board,
commission, court, department, official, political subdivision, tribunal, or
other regulatory, administrative or judicial authority of the United States
Government or any foreign government or any international governmental
organization (such as NATO or the United Nations) (collectively, "Governmental
Entities"); (ii) any United States state or local governmental entity in
connection with the business or operation of an aviation facility, including
commercial airports; (iii) any business entity to the limited extent such
business entity is acting under a prime contract, or subcontract to a prime
contract, with a Governmental Entity, and then only in connection with said
prime contract or subcontract, or is conducting independent research and
development ("IRAD") of products, systems or services for the general purpose of
selling such products, systems or services to Governmental Entities; (iv) any
business entity in connection with space-borne equipment, high-assurance
information security products and services, network security services or
command, control, communication, computer, intelligence, surveillance and
reconnaissance systems; and (v) any other customer to whom the Group has sold
products or services or submitted a bid or proposal (which has not expired, been
withdrawn or awarded to a third party) within the two (2) years preceding the
date of this IP Agreement. Group Customers do not include United States state
and local governmental entities except as identified in (ii) above.
1.12 "Group Products" means products, systems and services designed,
developed, manufactured, produced, provided, integrated or sold by the Group or
the subject of any outstanding bid or proposal of the Group as of the Closing
Date.
1.13 "Licensed Copyrightable Materials" means Seller and Seller
Subsidiary owned technical manuals, application notes, promotional materials and
other printed, written or computer-stored materials used, but not exclusively,
by the Group in connection with the business or operation of the Group as of the
Closing Date, as well as the training materials identified in Schedule 1.13.
1.14 "Licensed Know-How" means any Seller Know-How (excluding
Assigned Know-How) that is specifically used by the Group in connection with the
business or operation of the Group as of the Closing Date. In no event shall
Licensed Know-How include any know-how developed or acquired by Seller after the
Closing Date.
1.15 "Licensed IP Assets" means the Licensed Copyrightable Materials,
the Licensed Know-How, the Licensed Software, and the Licensed Patents.
1.16 "Licensed Patents" means those patents and patent applications
set forth on Schedule 1.16 hereto and all classes or types of U.S. and foreign
patents or patent applications owned by Seller and its Subsidiaries, that are
filed or granted on or before the Closing Date, to the extent Seller has the
right to grant licenses without the payment of royalties or other consideration
to third persons, and have claims that read on technology developed or in
development by the Group as of the Closing Date or on technology that is the
subject of any outstanding written bid or proposal of the Group as of the
Closing Date.
1.17 "Licensed Products" means (i) any Group Products, as well as
future generations derived from such Group Products; (ii) defense products and
systems (consisting of integrated command, control, communication, computer,
intelligence, surveillance, and/or reconnaissance systems); (iii)
software-defined radio systems other than commercial applications; (iv)
high-
assurance security and encryption products and services; and (v) specialized
restricted space payloads. A component, product, system or service provided to,
supplied to or otherwise obtained by the Group from Seller, Seller Subsidiaries
or third parties and integrated in or with a Licensed Product is not considered
and does not constitute, by itself, a Licensed Product. For purposes hereof,
commercial applications shall include without limitation commercial cellular
telephony, commercial land mobile two-way radios and commercial paging and
messaging.
1.18 "Licensed Software" means software owned by Seller and its
Subsidiaries and used or intended to be used, but not exclusively, by the Group
in connection with the business or operation of the Group as of the Closing
Date. In no event shall Licensed Software include any software developed or
acquired by Seller after the Closing Date. Further, Licensed Software does not
include Third Party Software.
1.19 "Residual Information" means that information and knowledge of
the Excluded IP Assets retained in the minds of the Transferred Employees
without rote memorization, or reference to confidential information of Seller
and/or a third party, either being in written, computer-stored or another
tangible form.
1.20 "Seller Intellectual Property" (or "Seller IP") means any and
all IP Assets owned by Seller prior to the Closing Date, including Seller
Know-How.
1.21 "Seller Know-How" means all confidential and proprietary
information owned or licensable by Seller (excluding Assigned Know-How) that
relates to two-way radios and systems, satellite, short messaging service,
wireless telephony and systems, wireless modems, personal communication devices
and systems, local or wide area networks and other communications products
currently made by or on behalf of Seller or any Subsidiary of Seller and future
versions thereof, or any semiconductor device, material, circuit, or the process
or method involved in the manufacture thereof.
1.22 "Subsidiary" means a corporation, company, or other entity more
than fifty percent (50%) of whose outstanding shares or securities (representing
the right to vote for election of directors or other managing authority) are now
or hereafter owned or controlled, directly or indirectly, by a party hereto, but
such corporation, company or other entity shall be deemed to be a Subsidiary
only so long as such ownership of control exists.
1.23 "Transferred Employees" means those Seller employees that upon
Closing become Buyer employees.
1.24 "Transferred IP Assets" means the Assigned Patents, Assigned
Invention Disclosures, Assigned Trademarks, Assigned Copyrightable Materials,
Assigned Copyrights, Assigned Know-How and Assigned Software.
ARTICLE II
ASSIGNMENT AND LICENSE OF IP ASSETS
2.1 Transferred IP. Upon the terms and subject to the conditions of
this IP Agreement, Seller hereby agrees to sell, assign (to the extent legally
assignable), transfer, convey and deliver (or, where applicable, cause its
Subsidiaries to sell, assign (to the extent legally assignable), transfer,
convey and deliver) to Buyer, and Buyer hereby agrees to purchase, acquire and
accept from Seller (or Seller's Subsidiaries) the Transferred IP Assets (but not
the Excluded IP Assets), free and clear of all Liens, except for Permitted
Liens, and Buyer agrees to grant back to Seller a license to such Transferred IP
Assets and Seller agrees to accept such license, as more specifically set forth
as follows:
2.1.1 Assignment to Buyer of Transferred IP. Effective upon the
Closing Date:
(a) Patents: Seller hereby assigns to Buyer all its right,
title and interest, subject to existing third party licenses, in and to
the Assigned Patents, and acknowledges that Seller shall, on the Closing
Date, execute a Patent Assignment Agreement of the general form as that
attached as Exhibit 2.1.1(a) to this IP Agreement.
(b) Invention Disclosures: Seller hereby grants to Buyer the
right to file any type of patent application in any country of the world
for the Assigned Invention Disclosures. Seller further assigns to Buyer
all right, title and interest, subject to existing third party licenses,
in such Assigned Invention Disclosures, including without limitation any
patent rights therein, and agrees to execute any additional
documentation that Buyer may reasonably request to reflect this
assignment. Seller makes no representation or warranty and Buyer
acknowledges that Seller makes no representation or warranty regarding
the patentability of the subject matter of the Assigned Invention
Disclosures.
(c) Trademarks: Seller hereby assigns to Buyer all its
right, title and interest, subject to existing third party licenses, in
the Assigned Trademarks together with the goodwill of the Group
associated therewith, and acknowledges that Seller shall, on the Closing
Date, execute a Trademark Assignment Agreement in the general form as
that attached as Exhibit 2.1.1(c) to this IP Agreement. Notwithstanding
the foregoing, Buyer acknowledges that Seller currently uses the marks,
Access and Access Point, in relation to radio equipment and plans to use
the marks, Access and Access Point, in relation to wireless LAN
applications. Buyer acknowledges and agrees that, as between Buyer and
Seller, there will be no confusion between Buyer's use (or that of its
Subsidiaries) of the mark, Access Point, on switches as defined in U.S.
trademark application Serial No. 75/651259 and Seller's current and
proposed use (or that of its Subsidiaries) of the marks, Access and
Access Point.
(d) Copyrights: Seller hereby assigns to Buyer all its
right, title and interest, subject to existing third party licenses, in
the Assigned Copyrights and acknowledges that Seller shall, on the
Closing Date, execute a Copyright Assignment Agreement in the
general form as that attached as Exhibit 2.1.1(d) to this IP Agreement.
(e) Copyrightable Materials: Seller hereby assigns to Buyer
all its right, title and interest, subject to existing third party
licenses, in the Assigned Copyrightable Materials.
(f) Know-How: Seller hereby assigns to Buyer all its right,
title and interest, subject to existing third party licenses, in the
Assigned Know-How.
(g) Software. Seller hereby assigns to Buyer all its right,
title and interest, subject to existing third party licenses, in the
Assigned Software.
2.1.2 Grant Back to Seller of Transferred IP.
(a) Patents. Buyer hereby grants to Seller, for the life of
the last to expire of the Assigned Patents, a fully paid-up,
royalty-free, worldwide, non-exclusive, nontransferable license (except
to the extent expressly set forth herein), without the right to grant
sublicenses (except to the extent expressly set forth herein), under the
Assigned Patents to use, make and have made products, systems and
services and to lease, sell, offer for sale, import and otherwise
dispose of products, systems and services so made. Subject to the above
limitations, such license shall include the right of Seller to extend
sublicenses to its Subsidiaries.
(b) Invention Disclosures. Buyer hereby grants to Seller a
fully paid-up, royalty-free, worldwide, non-exclusive license, without
the right to grant sublicenses (except to the extent expressly set forth
herein), under any rights arising out of or relating to the Assigned
Invention Disclosures to use, make and have made products, systems and
services and to lease, sell, offer for sale, import and otherwise
dispose of products, systems and services so made. The license of this
Section 2.1.2(b) shall be perpetual and, subject to the limitations
above, shall include the right of Seller to extend sublicenses to its
Subsidiaries.
2.1.3 Transferability. The licenses granted to Seller in accordance
with Section 2.1.2 shall be transferable and/or divisible by Seller in
connection with the sale, transfer or disposal of one or more Seller
businesses or product lines, or substantially all of the assets thereof,
using such licenses; provided, however, that such transferred and/or
divided license rights shall be limited to the operation of the divested
business or product line. Further provided, however, that to the extent
such business or product line includes or encompasses any product,
system or service of the same or similar type as a Licensed Product,
Seller shall not for a period of five (5) years from the Closing Date
transfer or divide the licenses to any of the entities identified on
Schedule 2.1.3, except with the prior written consent of Buyer.
2.2 Licenses to Buyer. Buyer acknowledges that all Seller
Intellectual Property, including Licensed Patents and Licensed Know-How, that is
not specifically identified as a Transferred IP Asset is an Excluded IP Asset,
in which Buyer shall have no right, title or interest except as expressly
provided for within this IP Agreement. Effective as of the Closing Date:
2.2.1 Patents.
(a) Seller hereby grants to Buyer, for the life of the last
to expire of the Licensed Patents, a fully paid-up, royalty-free,
worldwide, non-exclusive, non-transferable (except and to the extent
expressly set forth herein) license, without the right to grant
sublicenses (except to the extent expressly set forth herein), under
such Licensed Patents to use, make and have made Licensed Products and
to lease, sell, offer for sale, import and otherwise dispose of Licensed
Products so made to Group Customers. The parties agree that solely with
respect to the subset of Group Customers defined in Section 1.11(iv),
this license applies only to the extent the collective sales to such
subset of Group Customers does not exceed $50,000,000 in revenue in any
Buyer fiscal year.
(b) Sublicensing. Subject to the limitations of the license,
the license granted to Buyer in accordance with this Section 2.2.1 shall
include the right of Buyer to extend sublicenses to its Subsidiaries.
The extension of a sublicense pursuant to this Section is subject to the
sublicensee assuming the same obligations as Buyer hereunder as if such
entity were named in the place of Buyer.
(c) Transferability. The license granted to Buyer in
accordance with this Section 2.2.1 shall be transferable and/or
divisible by Buyer in connection with the sale, transfer or disposal of
one or more Buyer businesses or product lines, or substantially all of
the assets thereof, using such licenses; provided, however, that such
transferred and/or divided license rights shall be limited to the
operation of the divested business or product line.
(d) Seller Restriction. Except as otherwise permitted by the
Asset Purchase Agreement or the Ancillary Agreements, for a period of
five (5) years from the Closing Date, Seller shall not assign or
license, to the extent such assignment or license includes or
encompasses any product, system or service of the same or similar type
as any Licensed Product, those Licensed Patents set forth on Schedule
2.2.1(d) to any of the entities identified on Schedule 2.1.3, except
with the prior written consent of Buyer which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, the parties agree
that the restrictions of this Section 2.2.1(d) shall not be construed to
prevent Seller from assigning or licensing the Licensed Patents set
forth on Schedule 2.2.1(d) to third parties: (i) for the purpose of
resolving patent disputes or settlement of litigation; or (ii) pursuant
to contractual obligations existing as of the Closing Date; or (iii) as
required by judicial order.
2.2.2 Fuze Patents. Seller hereby grants to Buyer, for the life of the
last to expire of the Fuze Patents, a fully paid-up, royalty-free,
worldwide, non-exclusive, nontransferable license under the Fuze
Patents, without right to grant sublicenses, to use make and have made,
sell, offer for sale, lease, import, and otherwise dispose of products
within the missile fuze business, which the parties acknowledge and
agree excludes the conventional fuze business.
2.2.3 Subject to the limitations of the license, the license granted
to Buyer in accordance with Section 2.2.1 shall include the right of
Buyer to extend sublicenses under the Licensed Patents set forth on
Schedule 2.2.1(d) to third parties who have entered into a teaming,
partnership or joint venture type agreement with Buyer to jointly
develop and lease, sell or otherwise dispose of Licensed Products to
Group Customers ("Buyer Permitted Activity"). Provided however, such
right to extend sublicenses is limited to the Buyer Permitted Activity
and any such sublicense shall terminate immediately (i) upon termination
of such agreement; or (ii) if such third party files a lawsuit or
commences an arbitration or other formal proceeding that asserts an
intellectual property claim against Seller.
2.2.4 Know-How. Seller hereby grants to Buyer a perpetual, fully
paid-up, royalty-free, worldwide, non-exclusive license (i) to use the
Licensed Know-How in the business and operation of the Group and (ii) to
use the Licensed Know-How to make, have made, use, lease, sell, offer
for sale, import, design, assemble, have assembled, test or otherwise
dispose of Licensed Products to Group Customers.
2.2.5 Copyright. Seller hereby grants to Buyer a perpetual, fully
paid-up, royalty-free, worldwide, nonexclusive license to use,
reproduce, prepare derivative works of, and distribute Licensed
Copyrightable Materials in conjunction with the marketing or sale of
Licensed Products to Group Customers; provided that, all trademarks and
trade names of Seller shall be removed, except as otherwise provided in
Section 2.4.5, from any Licensed Copyrightable Materials before any
distribution thereof.
2.2.6 Software.
(a) Seller hereby grants to Buyer a perpetual, fully
paid-up, royalty-free, worldwide, non-exclusive license,
without the right to grant sublicenses (except as
expressly set forth herein), to use, reproduce and
prepare derivative works of the Licensed Software and to
otherwise use the Licensed Software in the manufacture,
sale, design, and support of the Licensed Products to
Group Customers.
(b) Seller hereby grants to Buyer a perpetual, fully
paid-up, royalty-free, worldwide, non-exclusive license
to distribute or sublicense the Licensed Software (in
object code form only) to Subsidiaries, customers or
suppliers in
conjunction with the design, manufacture or sale of
Licensed Products to Group Customers.
(c) Seller hereby grants Buyer a perpetual, fully paid-up,
royalty free, worldwide, non-exclusive license to
disclose the source code and design documentation for
Seller authored Licensed Software to a Governmental
Entity for the sole purposes of security certification
and independent validation and verification of
information assurance and mission-critical software.
Buyer agrees that any such disclosure shall be made
subject to non-disclosure and confidentiality
restrictions.
2.2.7 Residual Information. Seller agrees that Buyer shall be free to
use Residual Information to make, have made, use, lease, offer for sale,
import and otherwise dispose of Licensed Products to Group Customers,
provided such use is subject to Seller's rights in patents and
copyrights, the license of this Section 2, and Buyer's confidentiality
obligations set forth herein. Buyer acknowledges that the foregoing is
not a grant or extension of patent rights.
2.2.8 Excluded Technology. Buyer acknowledges that the rights granted
to Buyer in this IP Agreement do not grant to Buyer any rights in
Seller's technology related to: (i) semiconductor materials (other than
semiconductor materials specified by the Group to its semiconductor chip
manufacturers for the purpose of radiation hardening semiconductor chips
being made by such manufacturers for the Group), semiconductor
structures or semiconductor manufacturing processes; and (ii) commercial
wireless telephony and systems, commercial two way radios and systems,
commercial short messaging and paging services and products, commercial
wireless modems, commercial personal communication devices and systems,
and commercial local or wide area networks (other than technology
embodied in Group Products).
2.3 Documentation. On or promptly after the Closing Date, Seller agrees
to provide to Buyer copies of all available file histories of pending patent
applications comprising Assigned Patents, marks and pending trademark and
service mark applications comprising Assigned Trademarks, as well as copies of
other documents in Seller's possession that relate to the maintenance of an
Assigned Patent or the registration or registration renewal of an Assigned
Trademark or an Assigned Copyright. Upon transfer of such files and
documentation to Buyer, Buyer assumes all responsibility for the prosecution and
payment of fees and all other such activities associated therewith. Buyer shall
prepare all paperwork that is necessary to perfect and record the assignments of
Transferred IP Assets in the various jurisdictions, and Buyer shall be
responsible for all expenses, including recordation expenses, associated
therewith. Seller agrees to execute such paperwork as needed for perfection.
2.4 General Intellectual Property Provisions
2.4.1 Buyer Right to Abandoned Licensed Patents. In the event that,
during the two (2) year period following the Closing Date, Seller elects
to abandon, or otherwise to no
longer maintain (other than through failure to maintain due to
negligence) any United States Licensed Patents identified on Schedule
2.2.1(d), Seller shall notify Buyer of such and shall grant Buyer the
right to take ownership of such Licensed Patent free of charge, except
for costs associated with perfecting and recording Buyer's ownership
interest which shall be the sole responsibility of Buyer. Seller shall
use reasonable efforts to notify Buyer sufficiently before lapse,
abandonment, or loss of right of any Licensed Patent to provide Buyer
time to assess the costs and benefits of transferring ownership to Buyer
and to provide Buyer time to perfect transfer of ownership prior to any
lapse, abandonment, or loss of right if Buyer so elects. The parties
agree that in the event Seller fails to notify Buyer prior to
abandonment of any United States Licensed Patents identified on Schedule
2.2.1(d) (hereinafter referred to as an "Abandoned Patent"), Seller
agrees to petition the United States Patent and Trademark Office for
revival of the Abandoned Patent, upon discovery of such abandonment.
Buyer's sole and exclusive remedy for any failure by Seller to maintain
any Licensed Patent identified on Schedule 2.2.1(d) shall be the filing
by Seller of a petition for revival of such Abandoned Patent as set
forth herein. In the event Buyer elects to have ownership of same
Licensed Patent transferred to Buyer, Seller agrees to cooperate and
assist Buyer to the extent reasonably necessary to affect such transfer.
This obligation to notify Buyer, and Buyer's right to take over
ownership, shall also be binding upon any successor in interest of any
or all of the Licensed Patents identified on Schedule 2.2.1(d).
2.4.2 No Implied Rights. Buyer acknowledges and agrees that except as
otherwise specifically permitted by this IP Agreement, Buyer is not
obtaining any rights in, or to use, any of Seller's Intellectual
Property.
2.4.3 Disclaimer. Nothing in this IP Agreement shall be construed as
requiring the securing or maintaining in force of any intellectual
property of either party, except as set forth in paragraph 2.4.1.
2.4.4 Seller Trademarks, Logos and Trade Names. Buyer acknowledges and
agrees that, except for the Transferred IP Assets and except as set
forth in paragraph 2.4.5, Buyer shall not use any trademark, logo or
trade name of Seller, other than those constituting Transferred IP
Assets, or any trademarks, logos or trade names that are confusingly
similar thereto or that are a translation or transliteration thereof
into any language or alphabet.
2.4.5 Transitional Use of Seller Trademarks. As soon as practicable
following the Closing Date, but not later than one hundred twenty (120)
days after the Closing Date, Buyer shall remove and change signage,
change and substitute promotional or advertising material in whatever
medium, and not later than ninety (90) days after the Closing Date
change stationery and packaging and take all other steps as may be
required or appropriate to cease use of all such intellectual property
or materials bearing intellectual property not owned by Buyer or
otherwise constituting a Transferred IP Asset, provided, however, that
Buyer shall not be deemed to have violated this provision by reason of
(i) its use after the Closing Date of any inventory constituting
Transferred IP Assets or (ii)
the appearance of any trademarks, logos or trade names of Seller in or
on any tools, dies, equipment, engineering/manufacturing drawings,
manuals, work sheets, operating procedures, other written materials or
other Transferred IP Assets that are used for internal purposes only in
connection with the Group, provided that Buyer endeavors to remove such
trademarks, logos or trade names in the ordinary course of operation of
the Group business.
2.5 For the avoidance of doubt, nothing contained in this IP
Agreement shall be construed as in any way expanding or broadening the scope or
duration of Section 8.10, Noncompetition Agreement, of the Asset Purchase
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER; INDEMNIFICATION
3.1 Subject to any rights or licenses granted by Seller prior to the
Closing Date, Seller has the right, title or interest necessary to grant to
Buyer the assignments and licenses granted herein.
3.2 Except as set forth on Schedule 3.2, the Transferred IP Assets
are free and clear of any Lien except for Permitted Liens.
3.3 Except as set forth in Schedule 3.3: (i) to Seller's Knowledge,
there are no material third party licenses to the Transferred IP Assets; (ii) to
Seller's Knowledge, no third party has rights in, or otherwise has the right to
restrict Buyer's use of the Transferred IP Assets; and (iii) there are no
pending, or to Seller's Knowledge, threatened, actions or proceedings
challenging the validity of the Transferred IP Assets.
3.4 Except as set forth on Schedule 3.4: (a) the Group Products in
existence as of the date hereof and as of the Closing Date do not, to Seller's
Knowledge, infringe upon or misappropriate any patent, trademark, copyright,
trade secret, or other intellectual property or proprietary right of any third
party; and (b) there has been no abandonment of the registered trademarks
comprising the Assigned Trademarks from their dates of first use to the Closing
Date.
3.5 To Seller's Knowledge, there is not any material defect, virus,
timer, clock, counter, back door, time bomb, or other limiting features
incorporated into the Assigned Software or the Licensed Software that would
erase data or programming, create a likelihood for a breach of security or
confidentiality, or otherwise inhibit the proper operation of the Assigned
Software and the Licensed Software and Buyer's ability to exercise the rights
granted to it herein.
3.6 Indemnification. This IP Agreement is an integral part of the
Asset Purchase Agreement and Seller shall indemnify Buyer for any breach of a
representation, warranty or
covenant in this IP Agreement in accordance with Article VII of the Asset
Purchase Agreement.
3.7 Survival. The applicable survival provision of Article VII of
the Asset Purchase Agreement is incorporated herein by reference and made a part
of this IP Agreement.
3.8 Except as expressly set forth in this IP Agreement, nothing
within this IP Agreement shall be construed as (i) a warranty or representation
by Seller as to the validity and/or scope of any Transferred IP Asset or
Licensed IP Asset; (ii) conferring upon Buyer any license or any other right, by
implication, estoppel or otherwise, under any IP Asset, except as expressly
granted herein; (iii) imposing on Seller any obligation to institute any suit or
action for infringement of any IP Asset, or to defend any suit or action brought
by a third party that challenges or concerns the validity of any other IP Asset;
(iv) a warranty or representation by Seller that any manufacture, use, sale,
lease, or other disposition of Licensed Products will be free from infringement
of any patent or other intellectual property right; or (v) imposing on Seller
any obligation to file any patent application or secure any patent or maintain
in force any patent.
ARTICLE IV
TERMINATION
4.1 The applicable termination provisions of Article IX of the Asset
Purchase Agreement are incorporated herein by reference and made a part of this
IP Agreement.
4.2 Termination of Agreement. This IP Agreement shall terminate
automatically and without need for further action by either party in the event
that the Asset Purchase Agreement is terminated.
4.3 Effect of Termination. If this IP Agreement terminates pursuant
to Sections 4.1 or 4.2 above, all obligations of the parties hereunder shall
terminate without any liability of any party to such other party; provided that
nothing herein shall relieve any party from any liability for any breach of this
IP Agreement.
ARTICLE V
GENERAL PROVISIONS
5.1 Notices. All notices, requests, demands and other communications
hereunder
shall be in writing, addressed as follows:
If to Seller: Motorola, Inc.
1301 E. Algonquin Road
Schaumburg, Illinois 60196
Facsimile No.: (847) 538-2491
Attn: Bob McCall
and
Motorola, Inc.
Law Department
1303 E. Algonquin Road
Schaumburg, Illinois 60196
Facsimile No.: (847) 576-3750
Attn: Asst. General Counsel
V.P. Intellectual Property
with a copy (which shall not constitute notice) to:
Wiley, Rein & Fielding
1776 K Street, N.W.
Washington, D.C. 20006
Facsimile No.: (202) 719-7049
Attn: Rand Allen
If to Buyer: General Dynamics Corporation
3190 Fairview Park Drive
Falls Church, VA 22042
Facsimile No.: (703) 876-3554
Attn: David A. Savner
with a copy (which shall not constitute notice) to:
Jenner & Block, LLC
One IBM Plaza
Chicago, IL 60611
Facsimile No.: (312) 840-8711
Attn: Thomas A. Monson
or to such other address as Buyer or Seller may designate by written notice to
the other party hereto. Any such notices, requests, demands or other
communications shall be deemed to have
been duly given when received if delivered personally or, if mailed, on the date
five (5) days after the date so deposited in the mails, postage prepaid, return
receipt requested or on the day following the day sent if sent by prepaid
overnight delivery service. Notices, requests, demands and other communications
hereunder may be delivered by facsimile transmission if confirmation by sender
is made within three (3) business days thereafter. All periods of notice will be
measured from the date of deemed delivery thereof.
5.2 Nondisclosure. Neither Buyer nor Seller shall issue any press
release or make any other public disclosure (including disclosure to public
officials) with respect to this IP Agreement or the transactions contemplated by
this IP Agreement, except as required by law, without the prior written approval
of the other party, which approval shall not be unreasonably withheld; provided,
that either party may, if considered necessary by its counsel to fulfill its
obligations as a publicly traded corporation, respond to inquiries and issue
such releases as it considers necessary and appropriate, if it notifies the
other party in advance of the substance of such proposed response or proposed
release and gives such party reasonable opportunity for comment prior to such
response or release.
5.3 Dispute Resolution. Section 10.5, Dispute Resolution, of the
Asset Purchase Agreement is incorporated herein by reference and is made a part
of this IP Agreement.
5.4 Limitation of Liability. Section 10.6, Limitation of Liability,
of the Asset Purchase Agreement is incorporated herein by reference and made a
part of this Agreement.
5.5 Confidentiality.
5.5.1 Notwithstanding, and in addition to, the terms of Section 8.6 of
the Asset Purchase Agreement, Buyer and Seller hereby agree to the
confidentiality provisions set forth in this Section 5.5. The Seller
Licensed Know-How, the pending patent applications constituting part of
the Licensed Patents, the Licensed Software and any information
designated as "Motorola Confidential Proprietary" or similar legend is
the Confidential Information of Seller or its licensor. The Assigned
Invention Disclosures, the pending patent applications constituting part
of the Assigned Patents, the Assigned Know-How, and the Assigned
Software are the Confidential Information of Buyer. For a period of five
(5) years from the Closing Date, each party agrees to use the same care
and discretion, but at least reasonable care and discretion, to avoid
disclosure, publication, or dissemination of the other party's
Confidential Information as each party employs with similar information
of its own which it does not desire to publish, disclose or disseminate,
unless it is in connection with that party's business and provided that
the third party executes a confidentiality agreement having
substantially the same obligations as these confidentiality provisions.
5.5.2 Each party shall notify the other party immediately upon
discovery of any unauthorized use or disclosure of the other party's
Confidential Information, and will cooperate with the other party in
every reasonable way to help the other party regain possession of such
Confidential Information and to prevent its further unauthorized use.
Each party agrees that the Confidential Information of the other party
shall not be exported directly or indirectly to any restricted country
without the prior written consent of the Office of Export Control for
the USA Department of Commerce.
5.5.3 Notwithstanding the other provisions of this IP Agreement, the
non-disclosure obligations specified in Section 5.5 shall not apply to
information that:
(a) is available to the public on the Closing Date, or
thereafter becomes available to the public other than as
a result of a breach of this Section 5.5;
(b) is disclosed by the party owning the Confidential
Information to a third party without an obligation of
confidence;
(c) can be shown by the receiving party to have been
developed by it independently of this IP Agreement; or
(d) can be shown by the receiving party to have been
rightfully received completely independently from a
third party without any obligation of confidence.
5.5.4 Disclosure of Confidential Information shall not be precluded,
if such disclosure is:
(a) in response to a valid order of a court or other
official governmental body; provided, however, that the party subject to the
valid order shall first have given notice to the party owning the Confidential
Information and made a reasonable effort to obtain a protective order requiring
that the information and/or documents so disclosed be used only for the purposes
for which the order was issued;
(b) required by any law or any regulatory body; or
(c) necessary to establish rights under this IP Agreement.
5.5.5 Subject to the need to know in relation to the purpose for which
a party has provided the other party its Confidential Information, a
party may disclose Confidential Information to its Subsidiaries,
Affiliates or third party licensees; provided however, that such
Subsidiaries, Affiliates or third party licensees undertake to be bound
by the terms of this Section 5.5 as if named herein in place of the
respective party.
5.6 Miscellaneous. Section 10.9, Miscellaneous, of the Asset
Purchase Agreement is incorporated by reference and is made a part of this IP
Agreement except as set forth below:
Successors and Assigns. This IP Agreement inures to the benefit
of, and is binding upon, the successors, permitted assigns, and personal
representatives of the parties hereto. Neither party may assign its
rights or obligations under this IP Agreement without the express
written consent of the other party, except that Buyer may, without the
prior written consent of Seller, assign its rights under this IP
Agreement to any Buyer Subsidiary, provided that Buyer shall remain
liable for all of its obligations under this IP Agreement. In the event
of an assignment, the assignee Subsidiary, pursuant to Section 2.2.1(b),
shall only have the right to sublicense to entities that satisfy the
definition of a Buyer Subsidiary under this IP Agreement.
[SIGNATURE PAGE FOLLOWS]
SIGNATURE PAGE TO INTELLECTUAL PROPERTY AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
IP Agreement with legal and binding effect as of the date and year first above
written.
SELLER: MOTOROLA, INC.
By: /s/Keith Bane
---------------------------------
Name: Keith Bane
-------------------------------
Title: Executive Vice President
------------------------------
BUYER: GENERAL DYNAMICS CORPORATION
By: /s/Ken Dahlberg
---------------------------------
Name: K. C. Dahlberg
-------------------------------
Title: Executive Vice President
------------------------------
EXHIBIT C
EMPLOYEE MATTERS AGREEMENT
(Amended and Restated as of September 24, 2001)
This Employee Matters Agreement ("Agreement"), originally made as of
August 6, 2001 by and between MOTOROLA, INC., a Delaware corporation ("Seller"),
and GENERAL DYNAMICS CORPORATION, a Delaware corporation ("Buyer" and together
with Seller, the "Parties"), is hereby amended and restated as of this 24th day
of September 2001.
WITNESSETH:
WHEREAS, the Parties have entered into the Asset Purchase Agreement
dated August 6, 2001 (the "Purchase Agreement") providing for, among other
things, the sale and assignment by Seller to Buyer of certain assets and the
assumption by Buyer from Seller of certain liabilities, used in the business and
operation of the Group (as defined in the Purchase Agreement); and
WHEREAS, certain persons who work in or are assigned to the Group and
are directly employed by Seller or its Affiliates shall become employees of
Buyer or its Affiliates pursuant to this Agreement or pursuant to the operation
of local laws; and
WHEREAS, the Parties hereto wish to set forth their agreement as to
certain matters regarding the treatment of, and the compensation and employee
benefits provided to those employees of Seller who become employees of Buyer as
described above;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and conditions contained herein and in
the Purchase Agreement and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Parties hereby agree
with legal and binding effect as follows:
I DEFINITIONS
Except as otherwise expressly provided herein, all capitalized terms
used herein shall have the respective meanings assigned to them in the Purchase
Agreement or in the preceding portions of this Agreement. In addition, the
following terms, as used herein, shall have the following meanings:
1.1. "Buyer Non-U.S. Plans" shall mean Employee Benefit Plans
and programs established by Buyer to provide those benefits for Non-U.S.
Transferred Employees required under this Agreement.
1.2. "Buyer U.S. Plans" shall mean Employee Benefit Plans and
programs established by Buyer to provide those benefits for U.S. Hired Employees
required under this Agreement.
1.3. "Cause" shall mean poor performance or any misconduct
identified as a ground for termination in Buyer's human resources policies, code
of business conduct or other written policies, practices or procedures.
1.4. "Closing Date" shall have the meaning ascribed to it in the
Purchase Agreement, and for purposes of this Agreement all acts and transactions
to be taken or effected at the Closing shall be deemed to be effective as of
10:00 a.m. Central Standard Time on that date.
1.5. "Controlled Group Member" means, as to Seller or Buyer, any
other entity which either is part of a controlled group of corporations which
includes that Party or is a trade or business under common control with that
Party, as defined in Sections 414(b) and (c) of the Code.
1.6. "Employee Benefit Plan" shall mean:
(a) any plan, fund, or program which provides health, medical,
surgical, hospital or dental care or other welfare benefits, post-retirement
medical or life insurance, life insurance, other insurance plan, benefits in the
event of sickness, accident, disability or death, apprenticeship or other
training programs, or day care centers, scholarship funds, or prepaid legal
services,
(b) any plan, fund, or program which provides pensions,
profit-sharing, or retirement income to employees or results in a deferral of
income by employees for periods extending to the termination of covered
employment or beyond,
(c) any plan, fund, agreement or program relating to employment,
non-competition or changes-in-control or which provides severance, unemployment,
supplemental unemployment, vacation or fringe benefits (including dependent and
health care accounts),
(d) any incentive compensation plan, bonus plan or arrangement,
deferred compensation plan, excess benefit plan, stock ownership, stock option
or stock-based incentive or compensation plan, or stock purchase plan, and
(e) any other benefit plan, program, agreement, fund or
arrangement for the benefit of employees and former employees (including without
limitation, any funding or insurance arrangement related to any such program or
plan described herein), whether written or unwritten, qualified or
non-qualified, funded or unfunded.
1.7. "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended, and the regulations thereunder.
1.8. "Hired Employee" shall mean any U.S. Hired Employee and any
Non-U.S. Transferred Employee.
1.9. "Non-U.S. Transferred Employee" shall mean each person who
(i) immediately prior to the Closing Date is an employee of Seller or its
Affiliates assigned to (or, to the extent identified as such in Schedule 1.9, in
support of) the Group on a non-U.S. payroll, and (ii) is transferred to
employment with Buyer or a Buyer Affiliate effective as of the Closing Date.
Each such person shall be listed on Schedule 1.9 to be completed at the Closing
Date.
1.10. "Seller Non-U.S. Plans" shall mean Seller's Employee
Benefit Plans in which the Non-U.S. Transferred Employees have been eligible to
participate prior to the Closing Date which are set forth and identified as such
on Schedule 1.10.
1.11. "Seller Pension Plan Participants" shall mean active
participants in the Seller Pension Plan described in Section 2.8 below as of the
Closing Date who are also U.S. Hired Employees.
1.12. "Seller U.S. Employee" shall mean each person who
immediately prior to the Closing Date is an active employee of Seller or its
Affiliates assigned to (or, to the extent identified as such in Schedule 1.12,
in support of) the Group on a U.S. payroll and who is listed on Schedule 1.12,
except that the term "Seller U.S. Employee" shall not include any employee of
Seller who is on inactive or long-term disability status as of the Closing Date
other than those employees who are on routine vacation, leave under the Family
and Medical Leave Act, military leave, or short-term disability on the Closing
Date and who are identified as such on Schedule 1.12. Schedule 1.12 shall
separately list any Group employee as of the Closing Date who is not a Seller
U.S. Employee by reason of his or her inactive or long-term disability status.
1.13. "Seller U.S. Plans" shall mean Seller's Employee Benefit
Plans in which the U.S. Hired Employees have been eligible to participate
immediately prior to the Closing Date and which are set forth and identified as
such on Schedule 1.13.
II U.S. HIRED EMPLOYEE MATTERS
2.1. U.S. Hired Employees.
(a) Prior to the Closing Date, Buyer will have extended or
caused its Affiliates to extend an offer of employment to each Seller U.S.
Employee that is substantially comparable to the position held by such Seller
U.S. Employees immediately prior to the Closing Date. All offers of employment
will be conditioned on Seller U.S. Employees executing confidentiality and
non-competition agreements that are substantially similar to those required by
Seller. Such Seller U.S. Employees who accept Buyer's offer of employment
effective as of the Closing Date shall be known as "U.S. Hired Employees". Each
U.S. Hired Employee shall be listed on Schedule 2.1 which shall be completed by
Seller on the Closing Date. Notwithstanding anything to
the contrary, if any U.S. Hired Employee who is on short-term disability status
as of the Closing Date goes onto long-term disability status within one year of
the Closing Date, then such individuals shall cease to be treated as U.S. Hired
Employees as of the commencement date of their long-term disability status and
Seller shall retain full responsibility and liability for any such persons as of
such commencement date. If any persons who are not Seller U.S. Employees by
reason of being on inactive or long-term disability status as described in
Section 1.12 return to active work status within one year of the Closing Date,
Buyer shall extend offers of employment to such persons and such persons shall
be treated as U.S. Hired Employees effective as of their date of hire for all
purposes under this Agreement, including, without limitation, pension and
retiree medical asset and liability transfers. Seller shall retain full
responsibility and liability for any such persons on inactive or long-term
disability status unless and until they are hired by Buyer in accordance with
the immediately preceding sentence.
(b) On the Closing Date, Buyer will hire each Seller U.S.
Employee listed on Schedule 2.1. In connection therewith, Seller (i) shall not
interfere with Buyer's solicitation of such employees of the Group, (ii) shall
not cause or permit the hiring (or engagement as an independent contractor or
leased employee) of any Seller U.S. Employee by or on behalf of any other
division, unit or Affiliate of Seller during the period between the date of this
Agreement and the Closing Date (except as permitted in writing by Buyer), nor
cause or permit the Group to hire (or engage as independent contractor or leased
employee) any employee of Seller, or of any Affiliate of Seller, who is employed
or engaged by any division, unit or Affiliate of Seller other than the Group,
during the period between the date of this Agreement and the Closing Date
(except as permitted in writing by Buyer), and (iii) shall provide such
assistance as Buyer may reasonably request in connection with such solicitation,
provided that Buyer shall reimburse Seller for any reasonable out-of-pocket
expenses incurred by Seller in connection with such assistance. Notwithstanding
the foregoing, for a period of one year following the Closing Date, neither
Buyer nor any of its Affiliates will employ (or engage as an independent
contractor) any Seller U.S. Employee who refuses the offer of employment
extended by Buyer or its Affiliates pursuant to this Section 2.1, or any
individual whose employment with the Group terminated between the dates of this
Agreement and the Closing Date.
2.2. Compensation and Benefits. Buyer will compensate each U.S.
Hired Employee (while employed by Buyer) for the period beginning as of the
Closing Date and ending as of December 31, 2002 as follows:
(a) at a base wage or base salary rate which shall not be less
than that provided by Seller or its Affiliates, as applicable immediately prior
to the Closing Date (subject to and including increases in base wage and salary
rates resulting from Seller's scheduled October 2001 merit review targeting an
average 4.5% average increase therein, and any other routine pay increases),
(b) with cash incentive and other cash-based variable pay
programs which shall be substantially comparable in the aggregate to those
available to that employee from Seller or its Affiliates (and identified on
Schedule 2.2(b)), as applicable immediately prior to the Closing Date, and
(c) with employee benefit programs that are substantially
comparable in the aggregate on an economic basis (such benefits need not be
identical to those Seller U.S. Plans in effect immediately prior to the Closing
Date) to the benefits provided under the Seller U.S. Plans in effect immediately
prior to the Closing Date, except that such covenant shall not apply to:
(i) any equity-based compensation plan or program; provided,
that Buyer will apply to the Group an equity-based compensation program
substantially comparable to the equity-based compensation program
offered at other business units of Buyer; or
(ii) the Motorola Elected Officers Supplementary Retirement
Plan.
Except as otherwise agreed to in writing by the Parties, to the extent
that benefit programs covering U.S. Hired Employees are being
administered by Seller on or after the Closing Date in accordance with
Sections 2.2(c) and 2.9, such programs will be amended to reflect in
whole any applicable changes in the Seller U.S. Plans as provided to
similarly situated Seller employees or retirees (including without
limitation changes in vendors, services, providers, co-payments,
deductibles, lifetime maximums, types of coverage, etc.).
Notwithstanding the foregoing, in the event that Seller increases its
retiree medical cost caps for 2002, Seller agrees to administer Buyer's
retiree medical plan using cost caps referred to in Section 5.2(q)
herein, provided that Buyer's plan is identical to Seller's plan in all
other respects and that Buyer reimburses Seller for increased costs due
to such administration. To the extent that Buyer is administering the
Buyer U.S. Plans during 2002, Buyer may reduce benefit levels provided
in Section 2.2(c) above to the extent that Seller reduces benefit levels
of similar programs for similarly situated employees.
Notwithstanding the foregoing provisions of this Section 2.2, to the extent
accrued through the Closing Date, Buyer shall be solely responsible for any
incentive compensation payments to Hired Employees with respect to services
rendered during the entire 2001 plan year, including those payments they would
have received under Seller's scheduled incentive compensation programs with
respect to the portion of the 2001 plan year prior to Closing, had they
continued to be employed by Seller throughout that year.
2.3. Severance. Without limiting anything in Section 2.2 herein
and consistent therewith, through the period ending on December 31, 2002, if any
U.S. Hired Employee is terminated by Buyer (other than for Cause) Buyer will
provide such employee with a severance benefit under a Buyer U.S. Plan that is
substantially
comparable to the benefit provided under the Motorola, Inc. Involuntary
Severance Plan then in effect but not to exceed the benefit levels in effect as
of the Closing Date, a copy of which is attached hereto as Exhibit 2.3, provided
that Buyer may require a release of claims for any and all benefits provided
under this Section 2.3.
2.4. Vacation.
(a) Until the Closing Date, the vacation policy of Seller shall
continue to apply to all U.S. Hired Employees. Thereafter Buyer shall assume and
fulfill, in a timely manner, all Seller's obligations and liabilities related to
the U.S. Hired Employees under Seller's vacation policy, including allowing U.S.
Hired Employees to use and be paid for their accrued but unused vacation time
from their prior employment with the Seller, as recognized and available under
Seller's vacation policy, even after the Closing Date, provided that, after said
Date, any new entitlement to vacation time will be accrued and used only in
accordance with Buyer's own vacation policy.
(b) Until the Closing Date, the "Attendance Bonus Plan" of
Seller shall continue to apply to all U.S. Hired Employees. Thereafter Buyer
shall assume and fulfill, in a timely manner, all Seller's obligations and
liabilities related to the U.S. Hired Employees under Seller's Attendance Bonus
Plan, including allowing U.S. Hired Employees to be paid their accrued but
unpaid attendance bonus under Seller's Attendance Bonus Plan, even after the
Closing Date, subject to any customary withholding for federal, state and local
taxes, provided that, after said Closing Date, any new entitlement to an
attendance bonus or its equivalent will be accrued and payable only in
accordance with Buyer's own attendance bonus plan or comparable program.
2.5. Responsibility for Employees.
(a) Except as otherwise provided for in this Agreement, for U.S.
Hired Employees, Buyer shall assume and thereafter pay, perform and discharge
any and all employment, compensation and employee benefit liabilities,
responsibilities and obligations of Seller and any of its Affiliates including,
without limitation, any and all claims of employment discrimination under any
local, state, or federal law or ordinance, including, without limitation, Title
VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991;
the Americans with Disabilities Act of 1990; the Age Discrimination in
Employment Act of 1967, as amended by the Older Workers Benefit Protection Act
of 1990; Section 510 of ERISA and the Arizona Civil Rights Act, which
liabilities, responsibilities and obligations are incurred as the result of
incidents occurring after the Closing. In the event that Seller or an Affiliate
of Seller or any Employee Benefit Plan maintained by Seller or any of its
Affiliates directly or indirectly incurs any costs, liabilities, obligations or
legal expenses related to any such incidents occurring after the Closing, Buyer
shall reimburse and indemnify Seller and its Affiliates for any and all such
costs, liabilities, obligations and expenses immediately upon the demand of
Seller.
(b) Except as otherwise provided for in this Agreement, Seller
shall remain liable and shall pay, perform and discharge any and all employment,
compensation and employee benefit liabilities, responsibilities and obligations
of Seller and any of its Affiliates including, without limitation, any and all
claims of employment discrimination under any local, state, or federal law or
ordinance, including, without limitation, Title VII of the Civil Rights Act of
1964, as amended; the Civil Rights Act of 1991; the Americans with Disabilities
Act of 1990; the Age Discrimination in Employment Act of 1967, as amended by the
Older Workers Benefit Protection Act of 1990; Section 510 of ERISA and the
Arizona Civil Rights Act, which liabilities, responsibilities and obligations
are incurred as the result of incidents occurring prior to the Closing,
regardless of whether claims are made or reported prior to the Closing. In the
event that Buyer or an Affiliate of Buyer or any Employee Benefit Plan
maintained by Buyer or any of its Affiliates directly or indirectly incurs any
costs, liabilities, obligations or legal expenses related to any such incidents
occurring prior to the Closing, Seller shall reimburse and indemnify Buyer and
its Affiliates for any and all such costs, liabilities, obligations and expenses
immediately upon the demand of Buyer.
2.6. Service Credit. Buyer shall, and shall cause its Affiliates
to, provide each U.S. Hired Employee with full credit under the Buyer U.S.
Plans, for pre-Closing (i) service with Seller and its Affiliates and Controlled
Group Members, and (ii) service other than with Seller and its Affiliates and
Controlled Group members, to the same extent as such employee was entitled,
before the Closing Date, to credit for such service under any similar Seller
U.S. Plan, provided that such credit does not result in any duplication of
benefits.
2.7. 401(k) Plan.
(a) Effective as of the Closing Date, the U.S. Hired Employees
shall cease to participate in the Motorola, Inc. 401(k) Profit Sharing Plan (the
"Seller 401(k) Plan"), and shall be eligible to commence participation in a
defined contribution retirement plan permitting deferrals under Section 401(k)
of the Code that is sponsored by the Buyer (the "Buyer 401(k) Plan") as soon as
administratively practicable following the Closing Date. Any minimum age or
service requirements contained in the Buyer 401(k) Plan with respect to
eligibility to participate generally or eligibility to share in any employer
contributions thereunder shall be waived for U.S. Hired Employees who
immediately prior to the Closing Date were eligible to participate or share in
employer contributions, respectively, under the Seller 401(k) Plan. If for any
period after the Closing Date the plan administrator of the Buyer 401(k) Plan
relies upon compensation reduction elections and investment directions made by
U.S. Hired Employees under the Seller 401(k) Plan prior to the Closing Date,
Buyer agrees to defend and indemnify Seller for all liabilities, damages, costs
or expenses incurred by Seller as a result of claims arising from such reliance.
(b) All matching contributions with respect to the U.S. Hired
Employees' contributions to the Seller 401(k) Plan shall be contributed to the
Seller 401(k) plan in accordance with the Seller's usual practices. Further, the
Seller shall cause all U.S. Hired Employees to be fully vested in 100% of their
account balances (including any amounts contributed under Section 2.7(d) below).
(c) Seller will permit each U.S. Hired Employee to elect a
distribution of his or her account balance in the Seller 401(k) Plan, pursuant
to the provisions of Sections 401(k)(2)(B)(i)(II) and 401(k)(10)(A)(ii) of the
Code, until the end of the second calendar year after the year in which the
Closing Date occurs (or such longer period of time as permitted under the Code).
Buyer will cause the Buyer 401(k) Plan to accept a direct rollover of, or an
eligible rollover distribution of, all or a portion of the taxable portion of a
distribution of a U.S. Hired Employee's account balance from the Seller 401(k)
Plan, including any outstanding loans and related promissory notes. Seller shall
cause the Seller 401(k) Plan to permit repayment by payroll withholding for
2001, and by coupon repayment thereafter, of any outstanding loan from an
account balance in the Seller 401(k) Plan from which a U.S. Hired Employee does
not take a distribution that includes that outstanding loan. The Parties shall
cooperate to effect the purpose of this previous sentence.
(d) If, following the end of the 2001 Plan Year, Seller
determines that a "Profit Sharing Contribution" (as defined in the Seller 401(k)
Plan) is payable to the Seller 401(k) Plan pursuant to the terms of the Seller
401(k) Plan, then subject to all legal or other applicable limits, Seller shall
make such Profit Sharing Contribution to the Seller 401(k) Plan in accordance
with the terms of the Seller 401(k) Plan, and the pro rata share of such
contribution attributable to the U.S. Hired Employees determined under Section
10.4(e) of the Seller 401(k) Plan shall be allocated to the accounts of such
U.S. Hired Employees.
2.8. Seller Pension Plan and Buyer Pension Plan. The Parties
shall enter into the "Pension Transfer Agreement" which shall be executed by the
Parties and attached to this Agreement as Exhibit 2.8 thereto upon execution of
this Agreement.
2.9. Health and Welfare Plans.
(a) In accordance with, and toward the satisfaction of, the
requirements of Section 2.2(c) herein, the U.S. Hired Employees shall continue
to participate, without interruption, in those Seller U.S. Plans set forth in
Schedule 2.9 (the "Transitional Welfare Plans") through December 31, 2001 (such
schedule to be provided by Buyer within 15 days of execution of this Agreement).
Thereafter, Buyer shall establish Employee Benefit Plans to provide benefits
required under Section 2.2(c) of this Agreement and the following provisions of
this Section 2.9. At the request of Buyer, and to the extent that Buyer
establishes plans identical to the Transitional Welfare Plans, Seller agrees to
administer such plans through the period ending December 31, 2002 (including any
applicable run-out). Any new Group employee hired during the
period after Closing during which the U.S. Hired Employees remain covered under
the Transitional Welfare Plans shall be allowed to participate in the
Transitional Welfare Plans in accordance with the respective terms. However, if
Buyer elects to administer its own benefit plans and programs on or after
January 1, 2002 to satisfy the requirements of Section 2.2(c) hereof, then the
U.S. Hired Employees and any new Group employees shall participate instead in
such Buyer plans and programs on and after that date. Buyer shall reimburse
Seller for its costs incurred fulfilling its obligations described in this
Section 2.9(a) in accordance with the reimbursement methods described in the
Transition Services Agreement.
(b) With respect to medical, dental and other health and welfare
benefit plans maintained by Buyer covering U.S. Hired Employees as required
under Section 2.2.(c), Buyer shall waive any waiting period, pre-existing
condition, evidence of insurability, continuing-course-of-treatment, and
actively-at-work requirements to the same extent that such period, conditions
and/or requirements were not applicable to or had been satisfied by such U.S.
Hired Employees immediately prior to the Closing Date under applicable Seller
U.S. Plans.
2.10. Retiree Medical Coverage. The Parties shall enter into the
"401(h) Transfer Agreement" which shall be executed by the Parties and attached
to this Agreement as Exhibit 2.10 thereto upon execution of this Agreement.
2.11. Nonqualified Plans. Buyer will assume Seller's
obligations, duties and liabilities to all U.S. Hired Employees with respect to
their participation in the Motorola Supplemental Pension Plan ("MSPP") as of the
Closing Date. Seller will transfer from its rabbi trust related to the MSPP to
Buyer's applicable rabbi trust cash in an amount which bears the same proportion
to the fair market value of all of the assets of Seller's rabbi trust as of the
Closing Date, as the CAS actuarial accrued liability for U.S. Hired Employees
participating in the Motorola Supplemental Pension Plan determined as of the
Closing Date (based on assumptions used by Seller for CAS cost purposes for the
year ended December 31, 2001) bears to the total such liability for all
participants in the MSPP, plus interest on such amount from the Closing Date
through the date of transfer, at an annual rate equal to the 30-year U.S.
Treasury bond rate as of the Closing Date.
2.12. Workers' Compensation. Responsibility for workers'
compensation claims in respect of the Group arising out of conditions having a
date of injury (or, in the case of a claim relating to occupational illness or
disease, the last significant exposure) prior to the Closing Date shall remain
with Seller. Buyer shall have responsibility for workers' compensation claims in
respect of the Group arising out of conditions having a date of injury (or, in
the case of a claim relating to occupational illness or disease, the last
significant exposure) on or after the Closing Date.
2.13. WARN Act Compliance. Buyer shall retain full
responsibility for any violation of the Worker's Adjustment and Retraining
Notification Act of 1988, as
amended, arising from Buyer's failure to comply with Section 2.1 or its
operation of the Group after the Closing, and shall indemnify Seller for any
liability, expense and cost related thereto, including reasonable attorneys'
fees related thereto. Seller will provide Buyer on or prior to the Closing Date
with a written list of all employees of the Group whose employment has been
terminated or whose work hours have been reduced within 90 calendar days
preceding the Closing Date. Such list will indicate the total number of
employees affected, the employee's site of employment, and date of employment
loss.
2.14. Payroll Matters. The Seller and Buyer agree that they will
cooperate in the transition of payroll tax withholding and reporting and will
seek to accomplish such transition in a manner that will minimize the tax
effects on the U.S. Transferred Employees, to the extent administratively
practicable.
III NON-U.S. TRANSFERRED EMPLOYEE MATTERS
3.1. Non-U.S. Transferred Employees. Wherever legally
permissible, on the Closing Date, the Non-U.S. Transferred Employees shall
become employees of the applicable Buyer Affiliate by operation of applicable
local law and/or pursuant to the terms of any necessary transfer agreement
relating to that jurisdiction. Where such transfer is not possible in the manner
described in the previous sentence, the applicable Buyer Affiliate shall offer
Non-U.S. Transferred Employees employment in accordance with the procedures
required by applicable local law to effectuate their employment with the
appropriate Buyer Affiliate commencing on the Closing Date. Seller shall not
interfere with Buyer's solicitation of such employees of the Group, and Seller
shall provide such assistance as Buyer may reasonably request in connection with
such solicitation, provided that Buyer shall reimburse Seller for any reasonable
out-of-pocket expenses incurred by Seller in connection with such assistance. To
the extent any notification or consultation requirements are imposed by
applicable law with regard to the transaction contemplated by this Agreement and
as regards Non-U.S. Transferred Employees, Buyer or applicable Buyer Affiliates
agree to cooperate fully with Seller or its Affiliates to ensure that such
notification or consultation requirements are carried out. Notwithstanding the
foregoing, but subject to any requirements of applicable local law, for a period
of one year following the Closing Date, neither Buyer nor its Affiliates will
employ (or engage as an independent contractor) any Non-U.S. Transferred
Employee who refuses the offer of employment extended by Buyer or its Affiliate
pursuant to this Section 3.1, or any individual whose employment with the Group
terminated between the date of this Agreement and the Closing Date.
3.2. Compensation.
(a) Schedule 3.2 sets forth certain terms and conditions of
employment and material employee benefit plans for the Non-U.S. Transferred
Employees in effect immediately prior to the Closing Date.
(b) In jurisdictions where applicable law would require any of
Buyer's Affiliates to offer continued employment as of the Closing Date to
Non-U.S. Transferred Employees on specific terms and conditions that are
determined by comparison to the terms and conditions provided by the applicable
Seller Affiliate to such Non-U.S. Transferred Employees immediately prior to the
Closing Date in order to avoid liability for severance or other termination
compensation or damages, and under applicable law such Non-U.S. Transferred
Employee is or becomes entitled to severance, other termination compensation or
benefits on or after the Closing Date for which Seller is held liable or Seller
or its Affiliates is or are subject to damages as a result of the failure of the
terms of such offer of employment to comply with applicable law, the applicable
Buyer Affiliate will be responsible for, and will indemnify Seller and its
Affiliates from and against any and all claims for severance compensation,
benefits, damages or compensation for unfair or wrongful dismissal, together
with all costs and expenses arising from such claims by such Non-U.S.
Transferred Employees.
(c) In those jurisdictions where Seller's Affiliates have
historically followed a practice of paying non-incentive salary bonuses to their
employees or such bonuses are required by applicable law, Seller shall cause its
applicable Affiliates to pay to each of their respective Non-U.S. Transferred
Employees the pro rata portion of all such bonuses (if any) to which such
Non-U.S. Transferred Employee is entitled, for the period beginning on the first
day of the applicable accrual period and ending on the day immediately prior to
the Closing Date, which payment shall be made within a reasonable period of time
following payment of such amounts to employees of the applicable Seller
Affiliate. For purposes of this Agreement, non-incentive salary bonuses for
Non-U.S. Transferred Employees shall include any payments made to such employees
in cash (other than for salary) during each calendar year including, but not
limited to the following: Christmas bonus; 13th month payment bonus; vacation
premium bonus; savings fund bonus; and profit sharing bonus.
3.3. Severance. Without limiting anything in Section 3.2 herein
and consistent therewith, if any Non-U.S. Transferred Employee is terminated by
any Buyer Affiliate (other than for Cause or under applicable law) prior to
December 31, 2002, Buyer shall cause the applicable Affiliate to provide such
employee with a severance payment consistent with legal requirements, relevant
policies and practices and industry standards; provided that, as permitted by
local law, Buyer may require a release of claims for any and all benefits
provided under this Section 3.3. Buyer shall cause its Affiliates to recognize
service with Seller or any of its Affiliates based on Seller's service club
dates for purposes of calculating such severance payment.
3.4. Vacation. Buyer shall cause its Affiliates to assume and on
a timely basis perform, satisfy and discharge all obligations and liabilities
related to the Non-U.S. Transferred Employees under their applicable vacation
policies or programs. Buyer shall cause its Affiliates to continue to apply the
vacation policy of the applicable Seller Affiliate that is in effect immediately
prior to the Closing Date. Thereafter, each Non-U.S. Transferred Employee shall
enjoy the same vacation entitlements as he or
she enjoyed under the vacation policy of the applicable Seller Affiliate
applicable immediately prior to the Closing Date. Buyer shall cause its
Affiliates to recognize service with the applicable Seller Affiliate for
purposes of determining an individual's entitlement to vacation. Seller and its
Affiliates shall not, as the result of entering into this Agreement, be required
to pay out accrued vacation to any Non-U.S. Transferred Employee, except as
required by applicable law, nor be required to reimburse Buyer for any such
payment.
3.5. Sponsorship of Non-U.S. Employee Benefit Plans.
(a) Buyer shall cause its Affiliates to establish or maintain
Buyer Non-U.S. Plans in accordance with the terms of this Agreement and
applicable law, in order to provide employee benefits for Non-U.S. Transferred
Employees as required by Section 3.2.
(b) Immediately prior to the Closing Date, Seller and/or its
Affiliates shall cease all responsibility or liability with respect to coverage
for any Non-U.S. Transferred Employee under any pension, retirement, medical,
dental, disability, severance, life insurance, accident insurance or other
retirement or health or welfare benefit plan, program or policy which is
maintained by Motorola or any of its Affiliates. To the extent such coverages
are permitted to cease under applicable law, they shall do so immediately prior
to the Closing Date. To the extent such coverages continue under applicable law,
Buyer shall indemnify Seller and its Affiliates and reimburse them for any and
all expenses incurred under said plans in respect of the period of employment on
or after the Closing Date in accordance with the reimbursement provisions of the
Transition Services Agreement.
3.6. Service Credit. Buyer shall cause its Affiliates to provide
each Non-U.S. Transferred Employee with full credit under the Buyer Non-U.S.
Plans, for pre-Closing (i) service with Seller and its Affiliates and (ii)
service other than with Seller and its Affiliates, to the same extent as such
employee was entitled, before the Closing Date, to credit for such service under
any similar Seller Non-U.S. Plan, provided that such credit does not result in
any duplication of benefits or any pension benefit accruals for service prior to
Closing.
3.7. Buyer Guaranty. Buyer shall take all action necessary to
cause the applicable Buyer Affiliates to fulfill the terms of this Agreement.
3.8. Responsibility for Employees.
(a) Except as otherwise provided for in this Agreement, for
Non-U.S. Transferred Employees, Buyer shall cause its Affiliates to assume and
thereafter pay, perform and discharge any and all employment, compensation and
employee benefit liabilities, responsibilities and obligations of the applicable
Seller Affiliate including, without limitation, any and all claims under
applicable law, including breach of any contract of service or claim for
compensation or redress for wrongful or unfair dismissal
or discrimination or failure to comply with an order for reinstatement or
re-engagement or failure to comply with any provisions of all or any existing
laws, which liabilities, responsibilities and obligations which relate to the
period of employment (or its termination) after the Closing. In the event that
Seller or an Affiliate of Seller or any Employee Benefit Plan maintained by
Seller or any of its Affiliates directly or indirectly incurs any costs,
liabilities, obligations or legal expenses in respect to the period of
employment (or its termination) after the Closing, Buyer shall reimburse and
indemnify Seller and its Affiliates for any and all such costs, liabilities,
obligations and expenses immediately upon the demand of Seller.
(b) Except as otherwise provided for in this Agreement, Seller
shall remain liable for and shall (or shall cause its appropriate Affiliate to)
pay, perform and discharge any and all employment, compensation and employee
benefit liabilities, responsibilities and obligations of Seller (or such
Affiliate) including, without limitation, any and all claims under applicable
law, including breach of any contract of service or claim for compensation or
redress for wrongful or unfair dismissal or discrimination or failure to comply
with an order for reinstatement or re-engagement or failure to comply with any
provisions of all or any existing laws which liabilities, responsibilities and
obligations which relate to the period of employment (or its termination) prior
to the Closing, regardless of whether claims are made or reported as of the
Closing. In the event that Buyer or an Affiliate of Buyer or any Employee
Benefit Plan maintained by Buyer or any of its Affiliates directly or indirectly
incurs any costs, liabilities, obligations or legal expenses related to the
period of employment (or its termination) prior to the Closing, Seller shall
reimburse and indemnify Buyer and its Affiliates for any and all such costs,
liabilities, obligations and expenses immediately upon the demand of Buyer.
3.9. Fulfillment by Buyer of International Obligations. Buyer
agrees that it will take all steps necessary to employ Non-U.S. Transferred
Employees as of the day after the Closing Date in compliance with applicable
law, including, where necessary; establishing appropriate branch offices or
subsidiaries; registering with appropriate government entities; preparing and
providing to employees employment contracts and/or offer letters; obtaining
necessary licenses and consents; and entering into insurance contracts for the
provision of employment benefits or establishing plans to provide such benefits
(collectively, such activities shall be referred to as the "Transition
Activities"). Seller agrees that it will use its reasonable best efforts to
assist Buyer with the Transition Activities and cooperate with any reasonable
request for information and access to facilities and employees. Buyer agrees
that it will use its best efforts to complete such Transition Activities as soon
as practicable after the date of this Agreement. Buyer further agrees to provide
Seller in a timely manner, whether before or after the Closing Date, with such
information and, when appropriate, documentation, as Seller may reasonably
request about the Transition Activities, so that Seller may fulfill its own
legal obligations to employees, comply with its obligations under this
Agreement, and confirm Buyer's compliance with, or readiness to fulfill, Buyer's
obligations under this Section 3.9. Buyer will be responsible for and will
indemnify
Seller or its Affiliates from and against any wage, salary, benefit costs,
administration costs, severance, termination compensation, or other damages
attributable to Buyer's failure to fulfill its obligations under this Section
3.9 and relevant laws pertaining to the transfer of undertaking, unless that
failure is attributable to Seller's actions or unreasonable delay by Seller in
performing its obligations under this Agreement. The remedies specified in the
preceding sentence shall be in addition to, and not in lieu of, any other rights
or remedies to which Seller may be entitled by law or this Agreement.
3.10. Argentina Employee. Notwithstanding anything to the
contrary contained herein, the Parties agree that the Seller Affiliate employee
in Argentina shall be leased to the Buyer or a Buyer Affiliate for a period not
to exceed one year following the Closing Date, upon terms mutually agreed to the
by the Parties under the Transition Services Agreement. The Parties agree that
such lease is a convenience to facilitate the transition process and that the
Parties shall act as soon as practicable to end such lease and transfer
employment to Buyer. Buyer is responsible for all costs related to such lease,
including any costs related to its termination. Costs will be determined
according to the Transition Services Agreement.
IV EXECUTIVE MATTERS
4.1. Retention Payments. Seller shall be responsible for the
costs, obligations and liabilities with respect to retention agreements entered
into with any U.S. Hired Employees prior to the Closing Date. At the request of
Seller, Buyer shall make (and otherwise administer) the cash retention payments
under the foregoing retention agreements to the extent that Seller has wire
transferred to a Buyer account funds sufficient to make such retention payments
(including without limitation any applicable payroll taxes).
4.2. Automobiles. To the extent that Seller automobiles used by Group
employees are transferred to Buyer, Buyer, with respect to U.S. Hired Employees
who participated in the Motorola Executive Vehicle Program as of the date of the
Closing, will either (i) continue to provide for the use of such automobiles
through the period ending on December 31, 2002, on the same terms and conditions
as in effect before the Closing (except that no automobiles will be replaced
during such period and participation in the program by the participant related
to such automobile will cease), or (ii) Buyer will gift such automobiles to
their respective users who are U.S. Hired Employees.
V SELLER'S U.S. REPRESENTATIONS AND WARRANTIES
5.1. Labor Matters. Schedule 2.1 lists all U.S. Hired Employees.
With respect to each U.S. Hired Employee, Schedule 2.1 also reflects base pay,
the most recent bonus amount, date of hire, date of rehire, service club date,
vacation service date, and vesting service date immediately prior to the Closing
Date. Except as set forth in Schedule 5.1, Seller hereby represents and warrants
that:
(a) there are no charges, complaints or controversies pending
or, to Seller's Knowledge, threatened, between the Group and any of its
respective current or former employees, which charges, complaints or
controversies have had, or would have, a Material Adverse Effect on the Group;
(b) the Group is not a party to any collective bargaining
agreement or other labor union contract applicable to U.S. Hired Employees and
the Seller has not entered into any material agreement or material negotiation
with any labor union or other collective bargaining representative of any
employee of Seller or its affiliates assigned to the Group, nor, to Seller's
Knowledge, are there any activities or proceedings of any labor union to
organize any such employees;
(c) to Seller's Knowledge, there are no labor disputes, strikes,
slowdowns, work stoppages, lockouts, or threats thereof, by or with respect to
any of the Group's employees;
(d) there are no written employment agreements (or contracts
with independent contractors that have not been disclosed) which cannot be
terminated by Seller at the Closing Date;
(e) neither Seller nor any of its Affiliates is a party or
otherwise subject to any conciliation agreement or similar agreement or
commitment with the Office of Federal Contract Compliance Programs;
(f) to Seller's Knowledge, Seller has complied in all material
respects with all applicable laws pertaining to the employment or termination of
employment of employees, and the retention, categorization or termination of
other service providers, relating to the Group, including, without limitation,
all such laws relating to labor relations, equal employment opportunities, fair
employment practices, prohibited discrimination or distinction or other similar
employment activities, except for any failures to comply that, individually or
in the aggregate, would not have or result in a Material Adverse Effect on the
Group; and
(g) Seller has not made or promised to make any increases in any
salaries, rates of pay or other compensation or benefits of any employee of the
Group or its affiliates assigned to the Group, except for customary periodic
increases made in the ordinary course of business such as described in Section
2.2(a) of this Agreement.
5.2. Representations and Warranties for Seller U.S. Plans.
(a) Schedule 1.13 lists all Seller U.S. Plans on the Closing
Date. The representations and warranties in this Section 5.2 relate
solely to Seller U.S. Plans.
(b) Where applicable, with respect to each of the Seller U.S.
Plans, true and complete copies of (i) all plan documents (including all
amendments and
modifications thereof) or, if none, a summary thereof, and all related
trust agreements, insurance contracts and other funding arrangements;
(ii) (only with respect to any Seller U.S. Plan from which a Buyer U.S.
Plan shall receive a transfer of assets and liabilities under this
Agreement, including without limitation those plans involved in the
Pension Transfer Agreement and the 401(h) Transfer Agreement) the most
recently filed Annual Return/Report (United States Department of Labor
Form 5500 series) and all schedules thereto, as applicable; (iii) the
current summary plan descriptions and all summaries of material
modifications thereto as applicable; and (iv) the most recent Internal
Revenue Service determination letter issued with respect to each Seller
U.S. Plan, have been delivered or made available to Buyer as of the
Closing Date.
(c) Except as disclosed on Schedule 5.2, each Seller U.S. Plan
has been maintained, operated and administered in material compliance
with its terms and the applicable provisions of ERISA, the Code, or
other applicable law.
(d) Except as disclosed on Schedule 5.2, each Seller U.S. Plan
which is intended to meet the qualification requirements of Section
401(a) of the Code has received a favorable determination letter from
the IRS and would, subject to adoption (within any applicable required
time period) of amendments required by the IRS in the ordinary course
pursuant to an application for a determination letter, receive an
updated favorable determination letter from the IRS, and no amendment
has been made or no event has occurred with respect to any such Seller
U.S. Plans which would reasonably be expected to cause the loss or
denial of such qualification under Code Section 401(a).
(e) Except as disclosed on Schedule 5.2, there are no pending,
or to the Knowledge of Seller, threatened audits or investigations by
any governmental agency involving any Seller U.S. Plan from which a
Buyer U.S. Plan shall receive a transfer of assets and liabilities under
this Agreement (including those plans involved in the Pension Transfer
Agreement and the 401(h) Transfer Agreement), and to the Knowledge of
Seller, there are no threatened or pending claims (except for routine
claims for benefits payable in the ordinary operation of the Seller U.S.
Plan), suits, or proceedings involving any such Seller U.S. Plan, that
would have a Material Adverse Effect on the Group.
(f) Except as disclosed on Schedule 5.2, with respect to any
Seller U.S. Plan that is a "group health plan" within the meaning of
Section 607 of ERISA and that is subject to Section 4980B of the Code,
Seller has and will comply in all material respects with the
continuation coverage requirements of the Code and ERISA with respect to
U.S. Hired Employees (and their eligible dependents).
(g) No Seller U.S. Plan for the benefit of U.S. Hired Employees
is a "multiemployer pension plan" as defined in Section 3(37) of ERISA.
(h) Schedule 5.2 includes a workers' compensation paid loss
summary through the Closing Date on an accident year basis. Schedule 5.2
additionally includes a recent listing of all open workers compensation claims
showing claimant name, claim number, description, paid loss and case reserve.
(i) The Seller has never been nor is a party to or otherwise
bound by any advance agreement or similar arrangement with any Governmental
Authority or regulatory body relating to the allowability, allocation or
reimbursement of benefit costs or other matters in connection with any Seller
U.S. Plan.
(j) Except as disclosed on Schedule 5.2, no Seller U.S. Plan
contains any provision that would prohibit the transactions contemplated by this
Agreement or that would give rise to any severance, termination or other
payments solely (or in connection with some other reasonable foreseeable related
event) as a result of the transactions contemplated by this Agreement.
(k) The funding method used in connection with each Seller U.S.
Plan that is an Employee Pension Benefit Plan (as defined in ERISA) which is
subject to the minimum funding requirements of ERISA is acceptable under law,
and the actuarial assumptions used in connection with funding each such plan are
reasonable. The valuation summaries provided by Seller to Buyer reasonably
represent the assets and liabilities attributable to the Seller U.S. Plans
calculated in accordance with the past practices of the Seller.
(l) Any Seller U.S. Plan (or liability related thereto) assumed
by Buyer is by its terms able to be amended or terminated.
(m) With respect to each Seller U.S. Plan, and to the extent
that any of the circumstances or events described in (i) through (ii) below
would have a Material Adverse Effect:
(i) no such Seller U.S. Plan that is an Employee Pension Benefit
Plan (other than any multiemployer plan) has any liability under Title
IV of ERISA, other than routine PBGC premiums;
(ii) there have been no Prohibited Transactions with respect to
such Seller U.S. Plans; no fiduciary, to the Knowledge of Seller, has
any liability for breach of fiduciary duty or any other failure to act
or comply in connection with the administration or investment of the
assets of such Seller U.S. Plans, and no action, suit, proceeding,
hearing or investigation with respect to the administration or the
investment of the assets of such Seller U.S. Plans (other than routine
claims for benefits) is pending or (to the Knowledge of Seller)
threatened; and
(iii) other than routine claims for benefits, none of the Seller
or any of its Affiliates or Subsidiaries has incurred, and the Seller
has no reason to expect
that the Seller or any of its Affiliates or Subsidiaries will incur as a
result of circumstances or events prior to the Closing Date, any
liability to the PBGC (other than PBGC premium payments which have been
made when due) or otherwise under Title IV of ERISA (including any
withdrawal liability) or under the Code with respect to any Seller U.S.
Plan that is an Employee Pension Benefit Plan.
(n) Except as disclosed on Schedule 5.2, to the Knowledge of
Seller, the Seller has not communicated to any employee (excluding internal
memoranda to management) any plan or commitment, whether or not legally binding,
to create any additional material plan or materially modify or change any Seller
U.S. Plan that would affect any employee or terminated employee of the Seller or
any of the Affiliates or Subsidiaries in a material manner.
(o) To the Knowledge of Seller, no individual classified as a
non-employee for purposes of receiving employee benefits (such as an independent
contractor, leased employee, consultant or special consultant), regardless of
treatment for other purposes, is eligible to participate in or receive benefits
under any Seller U.S. Plan which does not specifically provide for their
participation, in any respects which in the aggregate would have a Material
Adverse Effect.
(p) All liabilities related to Seller's vacation policy and
Seller's Attendance Bonus Plan and assumed by Buyer under Section 2.4 have been
properly accrued on the Balance Sheet or incurred since the Balance Sheet Date
by Seller in the ordinary course of business.
(q) The GDC Retiree Plan (as defined in the 401(h) Transfer
Agreement) contains employer contribution cost limits of 2 times 1992
employer cost levels, which such cost levels are set forth in Schedule
5.2(q) (to be provided as soon as practicable following execution of
this Agreement).
VI BUYER U.S. REPRESENTATIONS AND WARRANTIES
6.1. Labor Matters. Buyer represents and warrants that it is not
a party to any collective bargaining agreement, side letter, or other
arrangement with any local, national, or international union that would (i)
require it to recognize any union as the collective bargaining representative of
U.S. Hired Employees without an election having been conducted by the National
Labor Relations Board ("NLRB"); (ii) require any U.S. Hired Employees to be
included in or made a part of any existing collective bargaining unit,
arrangement, or agreement; or (iii) require Buyer to maintain neutrality during
any attempt to organize or represent U.S. Hired Employees.
6.2. Representations and Warranties for Buyer U.S. Plans.
(a) With respect to the Buyer 401(k) Plan, true and complete
copies of (i) all plan documents (including all amendments and
modifications thereof); (ii) the
current summary plan descriptions and all summaries of material
modifications thereto; and (iv) the most recent Internal Revenue Service
determination letter issued with respect to that plan, have been
delivered or made available to Seller as of the Closing Date.
(b) Except as disclosed in Schedule 6.2, the Buyer 401(k) Plan
has received a favorable determination letter from the IRS or such
letter has been timely applied for, and such plan has not been amended
since the date of its most recent determination letter (or said
application thereof) in any respect which would materially jeopardize
the continuing validity of that determination letter.
VII SELLER'S NON-U.S. REPRESENTATIONS AND WARRANTIES
7.1. Labor Matters. Schedule 1.9 lists all Non-U.S. Transferred
Employees. With respect to each Non-U.S. Transferred Employee, Schedule 1.9 also
reflects base pay, date of hire, date of rehire, service club date, vacation
service date, and vesting service date immediately prior to the Closing Date (to
the extent such dates are applicable). Except as set forth in Schedule 7.1,
Seller hereby represents and warrants that:
(a) there are no legal or administrative claims pending or, to
Seller's Knowledge, threatened, between the Group and any of its
respective current or former Non-U.S. Transferred Employees, which
claims have had, or would have, a Material Adverse Effect on the Group;
(b) except to the extent all employers or all employers in an
industry may be required under applicable law to consult, inform, meet
with, or gain the approval of a trade union committee, worker council,
or similar organization, or such committee, council, or organization may
have the right under applicable law to set or establish certain terms
and conditions of employment for all employers or all employers in an
industry, the Group is not a party to any collective bargaining
agreement or other labor union contract applicable to Non-U.S.
Transferred Employees and the Seller has not entered into any material
agreement or material negotiation with any labor union or other
collective bargaining representative of any employee of Seller or its
affiliates assigned to the Group, nor, to Seller's Knowledge, are there
any activities or proceedings of any labor union to organize any such
employees;
(c) to Seller's Knowledge, there are no labor disputes, strikes,
slowdowns, work stoppages, lockouts, or threats thereof, by or with
respect to any of the Group' Non-U.S. Transferred Employees;
(d) other than agreements applicable to multiple employees at a
single location or in a particular country (which Buyer has been
provided or been given an opportunity to review), Seller has no written
employment agreements with any Non-U.S. Transferred Employees;
(e) to Seller's Knowledge, Seller has complied in all material
respects with all applicable laws pertaining to the employment or
termination of employment of Non-U.S. Transferred Employees, and the
retention, categorization or termination of other non-U.S. service
providers relating to the Group, including, without limitation, all such
laws relating to labor relations, equal employment opportunities, fair
employment practices, prohibited discrimination or distinction or other
similar employment activities, except for any failures to comply that,
individually or in the aggregate, would not have or result in a Material
Adverse Effect on the Group; and
(f) Seller has not made or promised to make any increases in any
salaries, rates of pay or other compensation or benefits of any employee
of the Group or its affiliates assigned to the Group, except for
customary periodic increases made in the ordinary course of business
(including the merit increase planned for October 2001).
7.2. Representations and Warranties for Seller Non-U.S. Plans.
(a) Schedule 1.10 lists all Seller Non-U.S. Plans. The
representations and warranties in this Section 7.2 relate solely to the
Seller Non-U.S. Plans.
(b) Where applicable, with respect to each of the Seller
Non-U.S. Plans, true and complete copies of (i) all plan documents
(including all amendments and modifications thereof) or, if none, a
summary thereof, and all related trust agreements, insurance contracts
and other funding arrangements; and (ii) the current summary plan
description distributed to participants therein, have been delivered or
made available to Buyer as of the Closing Date.
(c) Except as disclosed on Schedule 7.2 each Seller Non-U.S.
Plan has been maintained, operated and administered in compliance with
its terms and the provisions of applicable law, except for noncompliance
which would not result in a Material Adverse Effect.
(d) Except as disclosed on Schedule 7.2, each Seller Non-U.S.
Plan which must be registered or qualified with a Non-U.S. Governmental
Authority in the country in which it is maintained has received or
timely applied for such registration or qualification, and such Plan has
not been amended since the date of its most recent registration or
qualification (or application therefor) in any respect which would
result in a Material Adverse Effect.
(e) Except as disclosed on Schedule 7.2, there are no pending,
or to Seller's Knowledge, threatened audits or investigations by any
governmental agency involving any Seller Non-U.S. Plan from which Buyer
or its Affiliates or any Buyer Non-U.S. Plan shall receive a transfer of
assets and liabilities under Article III, and to Seller's Knowledge,
there are no threatened or pending claims (except for routine claims for
benefits payable in the ordinary operation of the
Seller Non-U.S. Plan), suits, or proceedings involving any such Seller
Non-U.S. Plan that would have a Material Adverse Effect.
(f) Except as disclosed on Schedule 7.2, with respect to any
Seller Non-U.S. Plan from which Buyer or its Affiliates or any Buyer
Non-U.S. Plan shall receive a transfer of assets and liabilities
pursuant to Article III, all contributions, premiums, expenses and other
payments required to be made by Seller or its Affiliates by the Closing
Date have been made.
(g) All liabilities related to Seller's vacation policy and
assumed by Buyer under Section 3.4 have been properly accrued on the
Balance Sheet or incurred since the Balance Sheet Date by Seller in the
ordinary course of business.
VIII BUYER NON-U.S. REPRESENTATIONS AND WARRANTIES
8.1. Representations and Warranties for Buyer Non-U.S. Plans.
(a) Schedule 1.1, to be provided as soon as practicable
following execution of this Agreement, lists all Buyer Non-U.S. Plans in
effect as of the Closing Date.
(b) With respect to each Buyer Non-U.S. Plan to which a Seller
Non-U.S. Plan shall make a transfer of assets and liabilities under this
Agreement, true and complete copies of (i) all plan documents (including
all amendments and modifications thereof) and all related trust
agreements, insurance contracts and other funding arrangements; and (ii)
the most recent written evidence (if any) of any required registration
or qualification with a local Governmental Authority issued with respect
to each Buyer Non-U.S. Plan, have been delivered or made available to
Seller as of the Closing Date or, in the case of a Buyer Non-U.S. Plan
not yet adopted or in effect at the Closing Date, as soon as practicable
after it becomes available.
(c) With respect to each Buyer Non-U.S. Plan not described in
(b) above, true and complete copies of (i) the current summary plan
description distributed to participants therein (which accurately and
completely describes the substantive provisions of the related Buyer
Non-U.S. Plan in all material respects) has been delivered or made
available to Seller as of the Closing Date or, in the case of a Buyer
Non-U.S. Plan not yet adopted or in effect at the Closing Date, as soon
as practicable after it becomes available.
(d) Except as disclosed on Schedule 8.1, each Buyer Non-U.S.
Plan adopted and in effect at the Closing Date has been maintained,
operated and administered in material compliance with its terms and
applicable law.
IX MISCELLANEOUS
9.1. Entire Agreement. This Agreement is an integral part of, is
subject to, and is to be interpreted consistently with, the Purchase Agreement;
in all other respects this Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
written and oral and all contemporaneous oral agreements and understandings with
respect to the subject matter hereof.
9.2. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois (except to the
extent superseded by ERISA), but regardless of any other laws that might
otherwise govern under principles of conflicts of laws applicable thereto.
9.3. Cooperation. Seller and Buyer agree to, and to cause their
Affiliates to, cooperate and use reasonable efforts to promptly (i) comply with
all requirements of this Agreement, ERISA, the Code and other law and
regulations which may be applicable to the matters addressed herein, and (ii)
provide each other with such information reasonably requested by the other party
to assist the other party in administering its Employee Benefit Plans and
complying with applicable law and regulations and the terms of this Agreement.
9.4. No Assumption of Seller Employee Benefit Plans. The Parties
agree that, except as may be otherwise expressly provided herein, Buyer does not
and shall not assume the sponsorship of, or the responsibility for contributions
to, or any liability in connection with any Employee Benefit Plan directly
maintained by Seller, its successors and its Affiliates. In addition, with
respect to U.S. Hired Employees, the parties agree that Seller shall offer and
be liable for any continuation health coverage (including any penalties, excise
taxes or interest resulting from the failure to provide continuation coverage)
required by Section 4980B of the Code due to qualifying events which occur on or
before the Closing Date.
9.5. No Third Party Beneficiaries. This Agreement shall not
confer third-party beneficiary rights upon any Hired Employee or any other
person or entity. Nothing in this Agreement shall be construed as giving to any
Hired Employee or other person any legal or equitable right against Seller,
Buyer, or any of their respective Affiliates or Employee Benefit Plans. This
Agreement shall not constitute a contract of employment and will not give any
Hired Employee a right to be retained in the employ of either Seller or Buyer or
any of their Affiliates. Notwithstanding anything to the contrary, all
employment made pursuant to this Agreement shall be employment at will.
9.6. Benefit Plan Expenses. Each Party shall bear all of its own
costs and expenses, including but not limited to legal and actuarial fees
incurred in the design, drafting and implementation of its plans and
compensation structures and the amendment of its existing plans or compensation
structures.
9.7. Plan Participation Records. The Parties agree that upon the
request of Buyer after the Closing Date, Seller or its Affiliates, as
applicable, shall deliver to Buyer or its Affiliates, as applicable, copies of
all records for the Hired Employees necessary for the administration of the
benefit programs to be provided to the Hired Employees as contemplated in this
Agreement, including, but not limited to, all hire and termination records,
compensation data, pension data, Employee Benefit Plan participation records,
and other information as Buyer may reasonably request related to the
administration of any Employee Benefit Plan, including any paper, electronic,
magnetic or imaged data or records. The Parties agree to share equally in any
and all costs associated with effecting the purposes and deliveries described in
the previous sentence. Buyer agrees to defend and indemnify Seller for any
liabilities arising from the transfer of such employment records and related
information provided pursuant to the foregoing provisions of this Section.
9.8. Employment Records. The Parties agree that upon the request
of Buyer after the Closing Date, Seller or its Affiliates, as applicable, shall
deliver to Buyer or its Affiliates, as applicable, copies of all employment
records for the U.S. Hired Employees and the Non-U.S. Transferred Employees
required to be kept under applicable law or necessary for the conduct of the
Group, including any paper, electronic, magnetic or imaged data or records. The
Parties agree to share equally in any and all costs associated with effecting
the purposes and deliveries described in the previous sentence. Buyer agrees to
defend and indemnify Seller for any liabilities arising from the transfer of
such employment records and related information provided pursuant to the
foregoing provisions of this Section.
9.9. Independent Contractors. To the extent requested by Buyer
in its sole discretion, on the Closing Date, Seller shall use its reasonable
efforts to cause all contracts or agreements with the employees and any
independent contractors to be assigned to Buyer or its Affiliates, as
applicable.
9.10. Restrictions on Movement. Unless the Parties otherwise
mutually agree in writing, for the three-year period beginning on the Closing
Date, neither Party will, nor will permit its Affiliates to, specifically
solicit or entice away any employee of the other Party or any of its Affiliates.
The Parties agree that neither Party shall be deemed to have violated the
foregoing covenant as a result of the placement of any job advertisement or
other general solicitation of employment not specifically directed to any
employee of the other Party. Notwithstanding anything to the contrary, for the 5
year period following the Closing Date, neither Seller nor any Seller Affiliate
may hire (or engage as an independent contractor or leased employee) any
individual who is listed on Schedule 9.10 hereto; further, for the period
beginning with the date this Agreement is executed and through the Closing Date,
neither Seller nor any Seller Affiliate may cause or permit the solicitation or
hiring (or engagement as an independent contractor or leased employee) of any
individual listed on Schedule 9.10 by or on behalf of any other division, unit
or Affiliate of Seller, without the express written consent of Buyer. Buyer
shall determine in its sole discretion the names to be
listed on Schedule 9.10, and shall provide such schedule to Buyer within 30 days
of the execution of this Agreement.
9.11. Notices. All notices and other communications hereunder
shall be in writing, and shall be deemed to have been duly given if delivered by
overnight courier, sent by mail to the respective parties or personally
delivered addressed as follows:
If to Seller: Motorola, Inc.
1301 E. Algonquin Road
Schaumburg, IL 60196
Facsimile No.: (847) 538-2491
Attn: Bob McCall
With a copy to: Motorola, Inc.
Law Department
1303 E. Algonquin Road
Schaumburg, IL 60196
Facsimile No.: (847) 576-3628
Attn: General Counsel
With a copy (which shall McDermott, Will & Emery
not constitute notice) to 227 West Monroe Street
Chicago, Illinois 60606
Facsimile No.: (312) 984-7700
Attn: Stephen R. Miller
If to Buyer: General Dynamics Corporation
3190 Fairview Park Drive
Falls Church, Virginia 22042-4523
Facsimile No.: (703) 876-3125
Attn: David A. Savner
With a copy (which shall Jenner & Block
not constitute notice) to: 1 IBM Plaza
Chicago, Illinois 60611
Facsimile No.: (312) 527-0484
Attn: Thomas A. Monson
or to such other address as Buyer or Seller may designate by written notice to
the other parties hereto. Any such notices, requests, demands or other
communications shall be deemed to have been duly given when received if
delivered personally or, if mailed, on the date five (5) days after the date so
deposited in the mails, postage prepaid, return receipt requested or on the day
following the day sent if sent by prepaid overnight delivery service. Notices,
requests and other communications hereunder may be
delivered by electronic facsimile transmission (fax) if confirmation by sender
is made within one (1) business day by prepaid overnight delivery service or
personal delivery. All periods of notice shall be measured from the date of
deemed delivery thereof.
9.12. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and their legal
representatives and successors and each Affiliate of the parties hereto, and
nothing in this Agreement, express or implied, is intended to confer upon any
other person any rights or remedies of any nature whatsoever under or by reason
of this Agreement.
9.13. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.
9.14. Assignment. Neither Party may assign its rights or
obligations under this Agreement without the express written consent of the
other Party, except that Buyer may, without the prior written consent of Seller,
assign its rights under this Agreement to any of its direct or indirect wholly
owned subsidiaries, provided that Buyer shall remain liable for all of its
obligations under this Agreement.
9.15. Dispute Resolution. Any disputes which arise under this
Employee Matters Agreement shall be resolved in accordance with the dispute
procedures set forth in the Purchase Agreement.
9.16. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the fullest
extent possible.
9.17. Amendment. No changes, amendment or waiver will be made to
this Agreement except by an instrument in writing signed on behalf of each of
the parties to this Agreement.
9.18. Plan Amendment and Interpretation. Except as required to
provide the benefits as described in Sections 2.2 and 3.2 hereof, Buyer and
Seller expressly reserve the right to alter, amend, modify, or terminate any of
their Employee Benefit Plans, including, but not limited to, any plan or program
established or required by this Agreement, at any time and for any reason. Buyer
and Seller expressly reserve the right to interpret the provisions of any of
their Employee Benefit Plans, including, but not
limited to, any plan or program established or required by this Agreement, with
respect to all of their current or former employees.
9.19. Authority. Each of the parties hereto represents to the
other that (a) it has the corporate or other requisite power and authority to
execute, deliver and perform this Agreement, (b) the execution, delivery and
performance of this Agreement by it have been duly authorized by all necessary
corporate or other action, (c) it has duly and validly executed and delivered
this Agreement, and (d) this Agreement is a legal, valid and binding obligation,
enforceable against it in accordance with its terms subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equity principles.
9.20. Interpretation. The headings contained in this Agreement,
in any Schedule hereto and in the table or contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any capitalized term used in any Schedule but
not otherwise defined therein, shall have the meaning assigned to such term in
this Agreement. When a reference is made in this Agreement to an Article or a
Section or a Schedule, such reference shall be to an Article or Section of, or a
Schedule to, this Agreement unless otherwise indicated. The Schedules attached
hereto or referred to herein are an integral part of this Agreement and are
hereby incorporated into this Agreement and made a part hereof as if set forth
in full herein. On and after the Closing Date, the Group shall be deemed to be
the Group of Buyer and the Buyer Affiliates, and all references made herein to
Buyer as a party which operate as of a time on or after the Closing Date, shall
be deemed to refer to Buyer and the Buyer Affiliates as a single party.
9.21. Breaches, Indemnification and Termination. Except as
provided in Sections 2.5 and 3.8, the sole and exclusive remedy for any breach
of a representation or warranty set forth herein shall be as set forth in
Article VII of the Purchase Agreement. All representations and warranties set
forth herein shall terminate in accordance with Section 7.4 of the Purchase
Agreement. This Agreement shall terminate automatically and without need for
further action by either Party in the event that the Purchase Agreement is
terminated, except that Sections 2.5 and 3.8 herein shall survive the
termination of this Agreement. The following Sections of the Purchase Agreement
are incorporated herein by reference and are made a part of this Agreement: 10.5
(Dispute Resolution), 10.6 (Limitation of Liability) and 10.9 (Miscellaneous).
9.22. Employee Communications. The Parties shall cooperate with
respect to any employee communications regarding any matters provided for
herein, provided that Buyer shall retain the sole and absolute discretion to
approve of, in advance, any written employee communications relating to any
benefits to be provided by it under this Agreement. The Parties further agree to
coordinate in advance any
formal meetings or presentations between Group employees and Buyer
representatives and any Buyer written employee communications.
* * *
IN WITNESS WHEREOF, this Employee Matters Agreement has been executed by
the Parties as of the date set forth above.
MOTOROLA, INC.
By: /s/Robert J. McCall
---------------------------------
Name: Robert J. McCall
-------------------------------
Title: Vice President
------------------------------
GENERAL DYNAMICS CORPORATION
By: /s/Kenneth C. Dahlberg
---------------------------------
Kenneth C. Dahlberg
Its Executive Vice President
EXHIBIT C
ENVIRONMENTAL MATTERS AGREEMENT
THIS ENVIRONMENTAL MATTERS AGREEMENT (this "Agreement"), made as
of August 6, 2001, between Motorola, Inc. ("Seller"), a Delaware corporation,
and General Dynamics ("Buyer"), a Delaware corporation,
WITNESSETH:
WHEREAS, pursuant to an Asset Purchase Agreement dated the date hereof,
by and among Buyer and Seller (the "Asset Purchase Agreement"), Buyer is
purchasing certain assets and assuming certain liabilities of Seller's
Integrated Information Systems Group (the "Group");
WHEREAS, pursuant to Section 1.4 of the Asset Purchase Agreement, any
liability or obligation to be retained by Seller pursuant to this Agreement
shall not be assumed by Buyer and shall be retained by Seller (as an "Excluded
Liability" under the Asset Purchase Agreement); and
WHEREAS, the general subject matter of this Agreement are the
parties' respective obligations for Environmental Liabilities related to the
purchased assets, including (i) the Owned Premises and the operations conducted
thereon; (ii) the Leased Premises and the operations conducted thereon; and
(iii) the North Indian Bend Wash Site which is a subset of the Indian Bend Wash
Superfund Site listed by the United States Environmental Protection Agency
("EPA") on the CERCLA National Priorities List in September 1983.
NOW THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements set forth below, the parties agree with
legal and binding effect as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, capitalized terms shall have the meanings set
forth or referenced in this Article I or elsewhere in this Agreement.
Capitalized terms used herein without definition shall have the meanings
assigned to such terms in the Asset Purchase Agreement.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601, et seq.), as amended, and all rules,
regulations, standards, guidelines, and publications issued thereunder where
they are promulgated as part of a
rulemaking.
"Condition" shall mean any condition which results in or otherwise
relates to any Environmental Liability.
"Environmental Claim" shall mean a demand, suit, claim, or assertion of
liability relating to any Environmental Liabilities that may give rise to a
claim for indemnification under this Agreement.
"Environmental Law or Laws" shall mean all current Laws which address, are
related to, or are otherwise concerned with environmental, worker safety, or
worker health issues.
"Environmental Liability or Liabilities" shall mean any obligations or
liabilities (including any notices, claims, complaints, suits, or other
assertions of obligations or liabilities) that are:
(a) related to environmental, health or safety issues (including
on-site or off-site contamination by Pollutants of surface or
subsurface soil, surface or subsurface water, and worker safety
and health); or
(b) based upon (i) any provision of current Environmental Law
(including CERCLA and RCRA), or (ii) any judgment, order, writ,
decree, permit or injunction imposed by any court,
administrative agency, or tribunal under any provision of
current Environmental Law.
The term "Environmental Liabilities" includes (without
limitation): (A) fines, penalties, judgments, awards, settlements, losses,
damages, costs, fees (including attorneys' and consultants' fees), expenses, and
disbursements; (B) defense and other responses to any administrative or judicial
action (including notices, claims, complaints, suits, and other assertions of
liability); or (C) financial responsibility for compliance costs, investigative
costs, cleanup costs, and injunctive relief, including any Remediation and
natural resource damages.
"Environmental Permit" shall mean any Permit that is authorized pursuant to any
Environmental Law.
"Laws" shall mean all current United States federal, state and local laws,
statutes, rules, regulations, ordinances, codes, requirements, rules of common
law, standards, guidelines, and the like, including any judicial and
administrative interpretations thereof, and all judicial and administrative
orders, consents, decrees, writs, injunctions, and judgments.
"Leased Premises" shall have the meaning set forth in the Asset Purchase
Agreement.
"Manage" and "Management" shall mean generation, production, handling,
distribution, processing, use, storage, treatment, operation, transportation,
recycling, reuse and/or disposal, as those terms are defined in CERCLA, RCRA and
other Environmental Laws (including as those
terms are further defined, construed, or otherwise used in rules, regulations,
standards, guidelines and publications issued pursuant to, or otherwise in
implementation of, such Environmental Laws).
"NIBW Site" shall mean the Indian Bend Wash Superfund Site listed on the
National Priorities List in September 1983, including the approximately ten
square mile area described in the EPA Public Comment Draft, North Indian Bend
Wash RI/FS, April 1991, and initially bound on the north by Chaparral Road, on
the south by the southern boundaries of Sections 11 and 12 of Township 1 North
Range 4 East, on the east by Pima Road, and on the west by Scottsdale Road,
including but not limited to the aquifers designated as Upper Alluvial Unit
("UAU"), Middle Alluvial Unit ("MAU"), and Lower Alluvial Unit ("LAU"), as shown
in the map attached as Schedule 1. The NIBW Site shall include adjacent areas
where hazardous substances have migrated and any additional areas designated by
EPA to be included in the NIBW Site. The Owned Premises are located within the
NIBW Site.
"Owned Premises" shall have the meaning set forth in the Asset Purchase
Agreement.
"Permit" shall mean any permit, license, certification, approval, registration,
consent, or other authorization issued pursuant to any Law.
"Pollutant" shall mean any "hazardous substance," "extremely hazardous
substance," or "pollutant or contaminant" as those terms are defined in CERCLA;
any "hazardous waste" as that term is defined in RCRA; any "hazardous material"
as that term is defined in the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801 et seq.) as amended; any "chemical substance or mixture" as that
term is defined in the Toxic Substances Control Act (15 U.S.C. . Section 2601,
et seq.) as amended (including as any of these above terms are further defined,
construed, or otherwise used in rules, regulations, standards, guidelines and
publications issued pursuant to, or otherwise in implementation of, said Laws),
and including without limitation any asbestos-containing material, petroleum,
radioactive, or explosive product or byproduct.
"Premises" shall mean the Owned Premises and the Leased Premises.
"RCRA" shall mean the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.), as amended, and all rules, regulations, standards, guidelines,
and publications issued thereunder where they are promulgated as part of a
rulemaking.
"Remediation" shall mean the types of investigative, "removal," "remedial," and
"response" activities covered by CERCLA, RCRA, and other Environmental Laws or
as required by any federal, state, or local government entity.
ARTICLE II
GENERAL PRINCIPLES
2.1 Division of Environmental Liabilities. Subject to Article V
below, the Agreement seeks to ensure that Seller retains responsibility for
Environmental Liabilities relating to the NIBW Site and to protect Buyer from
Environmental Claims relating to the NIBW Site. The Agreement further seeks to
ensure that, as between the parties, Seller has responsibility for offsite waste
disposal by Seller prior to the Closing Date, and Buyer has responsibility for
offsite waste disposal by Buyer after the Closing Date. In addition, the
Agreement addresses the parties' responsibilities for other Environmental
Liabilities and provides indemnification for certain Environmental Claims as
detailed in Article V.
2.2 Limitation on Article II. Nothing in this Article II is intended
to enlarge or restrict the terms stated elsewhere in this Agreement.
ARTICLE III
ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer, as of the date hereof
and as of the Closing Date, and with respect to the Owned Premises, the Leased
Premises, and the NIBW Site, but as to the NIBW Site only as set forth in
Sections 3.1, 3.5 and 3.6, as follows:
3.1 Environmental Liabilities. Except as set forth on Schedule 3.1,
Seller has not incurred any Environmental Liabilities, except Environmental
Liabilities that would not result in a Material Adverse Effect.
3.2 Permits. Seller has all applicable Environmental Permits.
Schedule 3.2 is a list of all Environmental Permits for the Owned Premises and
the Leased Premises.
3.3 Compliance with Laws. Except as set forth on Schedule 3.3, the
Owned Premises and the Leased Premises and Seller's conduct of business and
operations at the Owned Premises and the Leased Premises are in compliance with
Environmental Laws, except where the failure to so comply would not have a
Material Adverse Effect.
3.4 Liens. Except as set forth on Schedule 3.4, there are no Liens
based upon Environmental Laws.
3.5 Notice. Except as set forth on Schedule 3.5, since January 1,
1999, Seller has not received any written notice from any governmental authority
of any violation or alleged violation of, non-compliance or alleged
non-compliance with, or liability or alleged liability under, any Environmental
Law, relating to the Owned Premises, the Leased Premises, or the NIBW Site or
Seller's conduct of business, operation, or Remediation at the Owned Premises,
the Leased Premises, or the NIBW Site involving a Condition that may have a
Material Adverse Effect.
3.6 Current Obligations at Owned Premises.
(a) The scope of work and current Remediation obligations
that pertain to the Owned Premises, and that Seller is currently obligated to
perform, are summarized in Schedule 3.6(a).
(b) Seller, and those persons and entities acting at
Seller's direction, who enter the Owned Premises for purposes relating to
Seller's Remediation shall be qualified to perform Seller's Remediation.
(c) A summary of environmental conditions and past
Remediation work relating to the NIBW Site and conducted at the Owned Premises
is included in Schedule 3.6(c).
3.7 Underground Storage Tanks. To Seller's Knowledge, there are no
underground storage tanks owned or under the control of Seller located at the
Owned Premises or the Leased Premises.
3.8 Asbestos-Containing Material. All asbestos-containing materials
at the Owned Premises are in compliance with Environmental Laws, except where
the failure to so comply would not have a Material Adverse Effect.
ARTICLE IV
COVENANTS
4.1 Obligations of Seller Concerning the NIBW Site. As between the
parties, and without in any way affecting the parties' respective rights and
obligations under Article V of this Agreement, Seller, at its sole cost and
expense, will conduct Remediation at the NIBW Site as may be set forth in any
orders issued by EPA or any consent decrees entered between Seller and EPA. For
purposes of this provision, EPA shall include other federal or state agencies
with authority to require Remediation.
4.2 Access and Cooperation. The parties will take the following
measures in order to facilitate Seller's timely and cost-effective performance
of its obligations in Section 4.1:
(a) Seller, and those persons and entities acting at the
direction of Seller, may enter upon and use the Owned Premises, at reasonable
times and with reasonable notice, including use of all roads and driveways upon
the Owned Premises, for the purpose of complying with Seller's obligations under
this Agreement, including Seller's obligations under Section 4.1 of this
Agreement, subject to the following:
(i) Except as provided by 4.2(a)(ii), Seller shall
notify Buyer's Remediation Project Manager no later than 2 days prior to the
date Seller desires access to the Owned Premises;
(ii) Seller may enter upon and use the Owned Premises
for the purposes of complying with Seller's obligations under this Agreement,
including Seller's obligations under Section 4.1 of this Agreement, without
prior notice if necessary to respond to an upset condition or other emergency
related to its obligations under this Agreement; provided, however that Seller
shall nonetheless comply with subparagraphs (iii)-(v) of this paragraph;
(iii) Seller is subject to Buyer's reasonable
protocols for visitors to the Owned Premises, including sign-in procedures and
any procedure calling for Buyer's personnel to accompany Seller, and those
persons and entities acting at Seller's direction, while on the Owned Premises;
(iv) Seller shall provide proof of insurance, at or
prior to the Closing Date, for all employees and contractors entering the Owned
Premises for purposes relating to Remediation. Seller shall add Buyer as an
additional insured to any such insurance policy;
(v) All rights of access to information, documents,
and Owned Premises are subject to restrictions on access to classified
information and facilities imposed by Governmental Authorities; and
(vi) Sections 4.2(a)(i) through (v) listed above
shall also apply to Sections 4.2(b) and 4.2(k).
(b) Seller may undertake on the Owned Premises such
Remediation as Seller deems necessary and prudent for the purpose of complying
with Seller's obligations under this Agreement, including Seller's obligations
under Section 4.1 of this Agreement. Buyer reserves the right to request
information in Seller's possession or control relating to the performance of
Seller's obligations under Section 4.1 of this Agreement. Seller agrees that it
will provide such information to Buyer, except that: (i) it will not produce
privileged information the disclosure of which could constitute a waiver of any
privilege or doctrine; and (ii) it may redact from any documents pursuant to
this provision any trade secret or business proprietary information of Seller or
a third party. Except to the extent the information is otherwise publicly
available, Buyer agrees: (i) such information provided hereunder shall continue
to be Seller's property and shall be maintained confidentially by Buyer; and
(ii) any information provided hereunder shall not be provided to any third
parties, except third parties acting under the direction or control of Buyer,
unless expressly agreed to in writing by Seller. The provisions of this Section
4.2(b) shall also apply to information provided pursuant to Section 4.2(f).
(c) Seller will perform all actions under this Agreement,
including all Remediation at the Owned Premises, in compliance with
Environmental Laws (including future Environmental Laws if applicable) and in
such a manner as to minimize, to the extent
practicable, damage to the Owned Premises (and to the improvements, fixtures and
appurtenances thereon), and the disruption of or interference with the use of
the Owned Premises (and the improvements, fixtures and appurtenances thereon) by
Buyer.
(d) Except as limited by Environmental Laws, Seller will
obtain and maintain, at its sole cost and expense, all required Environmental
Permits to conduct its Remediation obligations under Section 4.1 of this
Agreement. Seller will be the named permitted entity on all such permits.
Schedule 4.2(d) is a list of all Environmental Permits for Remediation.
(i) Seller will obtain a new hazardous waste
identification number and will cause all documentation regarding the disposal of
wastes generated in connection with Seller's Remediation obligations under
Section 4.1 of this Agreement, including any waste manifests, to reflect Seller
as the generator thereof as of the Closing Date.
(ii) Seller will properly store and maintain any
hazardous waste generated pursuant to Seller's obligations set forth in Section
4.1 of this Agreement and will arrange for the proper disposal of such waste
within 24 hours of its generation.
(iii) Seller will obtain a new separate air permit, if
required under Environmental Laws, covering air emissions and operation of air
emission control equipment associated with Seller's Remediation obligations
under Section 4.1 of this Agreement, including the groundwater extraction and
treatment system. These permit conditions are contained currently in the
December 1998 revision to Permit No. 8602688 issued July 24, 1997.
(e) Seller and Buyer will coordinate on issues related to
Seller's Remediation at the NIBW Site, as follows:
(i) Seller and Buyer will each, at its sole cost and
expense, appoint a "Remediation Project Manager" as a contact person with
respect to the Seller's Remediation. The Remediation Project Managers will meet
onsite upon closing and once each quarter, or more frequently if necessary or as
otherwise agreed between them, to discuss matters relating to the coordination
of the Seller's Remediation, including scheduling, areas in which work will take
place at particular times, the manner in which work will be done, and other
issues or problems that may arise. The Seller's Remediation Project Manager will
maintain and update a schedule for the Seller's Remediation and will provide
updated schedules to the Buyer's Remediation Project Manager. To address any
issues that may arise relating to such coordination, the Remediation Project
Managers or their responsible designees will be available in person, by
telephone, or other reasonable means as the Project Managers agree, at all times
when Seller's employees, contractors, or agents are on the Owned Premises. The
responsible designees of the Remediation Project Manager may include an
appropriate person or persons retained as a contractor of Seller or Buyer. If
Buyer's Remediation Project Manager and Seller's Remediation Project Manager are
unable to reach mutual agreement on a coordination issue, the parties shall
inform Buyer's and Seller's legal counsel and schedule a meeting to resolve the
coordination issue.
(ii) Buyer will, to the extent reasonably requested
by Seller: (A) cooperate with Seller in all Remediation at the Owned Premises;
(B) make available appropriate personnel to meet on or off the Owned Premises
with Seller and its environmental consultants or other representatives on
matters relating to Remediation; (C) make available appropriate personnel to
meet with federal, state and local environmental regulatory officials when and
as requested by such officials or as reasonably requested by Seller; (D) provide
Seller reasonable access to or copies of such documents, records and other data
of Buyer as Seller may reasonably require in connection with the NIBW Site and
any third party claims related thereto; and (E) cooperate with Seller to
minimize Seller's Remediation costs.
(f) Seller will furnish to Buyer, from time to time and upon
request, copies of all material correspondence (including all status reports,
operational summaries, statements of work, analytical information, permits,
applications, or approvals) between the Seller or its environmental consultants
and contractors and EPA or any other federal, state, or local governmental
entity relating to Seller's Remediation at the Owned Premises. In the event the
Buyer receives any information relating to the Seller's Remediation, the Buyer
will provide this information to the Seller.
(g) Seller will be responsible for the cost of any
repairs, replacements or damages to Buyer's improvements, fixtures and
appurtenances within the Owned Premises to the extent caused by the act or
omission of Seller. Buyer will be responsible for the cost of any repairs,
replacements or damages to Seller's improvements, fixtures and appurtenances
within the Owned Premises, including without limitation Seller's remediation
equipment, to the extent caused by the act or omission of Buyer.
(h) Seller will retain ownership and responsibility
for the control, operation, and management of all equipment, including
monitoring and extraction well apparatus, pipelines, and treatment equipment,
used for Seller's Remediation at the Owned Premises. Seller will remove, in a
timely manner, all such equipment when EPA has determined that Seller has
completed its Remediation obligations at the Owned Premises. Schedule 4.2(h) is
a survey showing the location of all remediation equipment on the Owned
Premises.
(i) The Consent Decree between Seller and EPA dated August
11, 1993, Docket No. 92-2314-PHX PGR, provides that EPA shall be granted an
easement to the Owned Premises for access in connection with Seller's
obligations under Section 4.1 of this Agreement. In cooperation with Buyer,
Seller will prepare a proposed easement and negotiate an easement providing EPA
and Seller access to Seller's remediation equipment; provided however that the
easement shall not enlarge the access rights of Seller under this Agreement.
(j) Seller and Buyer will cooperate to obtain utility
service for Seller's Remediation within the Owned Premises, whether or not such
utility lines serve portions of the Owned Premises or other persons, in order to
provide water, electric, telephone, sanitary sewer, storm sewer and other
utility services to Seller in connection with Seller's Remediation;
provided:
(i) Seller, at its sole cost and expense, will
obtain all necessary utility approvals prior to making any such connections;
(ii) Seller will install a separate meter to measure
electricity usage related to Seller's Remediation and arrange for the local
electricity provider to bill Seller directly for this service;
(iii) Seller will reimburse Buyer for all reasonable
costs which Buyer incurs as a result of Seller's use of such utilities; and
(iv) Schedule 4.2(j) lists all utility services
currently required for Seller's Remediation at the Owned Premises.
(k) Seller shall use commercially reasonable efforts to
minimize adverse impacts to the Owned Premises in order to comply with Seller's
obligations under Section 4.1 of this Agreement. Seller, at its sole cost and
expense, may make such alterations, additions and improvements in and to the
Owned Premises as Seller reasonably deems necessary in order to comply with its
obligations under Section 4.1 of this Agreement, including the removal of water,
soil or subsoil from the Owned Premises, subject to the following:
(i) Buyer will cooperate with Seller in securing (at
Seller's sole cost and expense) any Permits required with respect to such
alterations; and
(ii) Seller may not conduct the above activities
unless Seller obtains prior written approval from Buyer, which shall not be
unreasonably withheld.
(l) Buyer agrees that it will use commercially reasonable
efforts to require any tenants or future buyers of the Owned Premises to agree
to the terms of this Section 4.2 with respect to access and Remediation
activities to allow Seller to comply with its Remediation obligations related to
the NIBW Site.
ARTICLE V
INDEMNIFICATION
5.1 Indemnification by Seller.
(a) Seller will indemnify and hold harmless Buyer against
any and all Damages incurred by Buyer in connection with or arising from:
(i) any breach by Seller of, or any other failure of
Seller to perform, any of its covenants, agreements, or obligations in this
Agreement; or
(ii) any breach of any warranty or the inaccuracy of
any representation of Seller contained in this Agreement.
(b) Seller will indemnify and hold harmless Buyer against
any and all Environmental Claims asserted, but only to the extent that such
Environmental Claims are based upon or otherwise relate to:
(i) subject to 5.2(b)(ii), Seller's performance of
its obligations under Section 4.1of this Agreement with respect to Remediation
of the NIBW Site; or
(ii) any third party claims, including but not
limited to claims for natural resource damage, relating to Seller's Remediation
of the NIBW Site; or
(iii) any Environmental Liability for the offsite
disposal of Hazardous Substances by Seller on or before the Closing Date; or
(iv) any Condition in, at, on, under, or emanating
from the Premises which Condition (A) exists at or prior to the Closing Date;
(B) was caused by Seller; and (C) either violates Environmental Law, requires
Remediation under Environmental Law, or involves onsite contamination at the
Owned Premises that Buyer otherwise needs to address; provided, however, that
this Section 5.1(b)(iv) shall not apply to Environmental Claims related to (i)
asbestos in buildings at the Owned Premises; or (ii) improvements or repairs to
the Owned Premises unless the Damages involved exceed $300,000.
(c) Seller's obligation to indemnify under Section 5.1 of
this Agreement shall be subject to the procedures for indemnification in Section
7.5 of the Asset Purchase Agreement.
5.2 Indemnification by Buyer.
(a) Buyer will indemnify and hold harmless Seller
against any and all Damages incurred by Seller in connection with or arising
from any breach by Buyer of, or any other failure of Buyer to perform, any of
its covenants, agreements, or obligations under this Agreement.
(b) Buyer will indemnify and hold harmless Seller against
any and all Environmental Claims asserted by a third party, but only to the
extent that such Environmental Claims are based upon or otherwise relate to:
(i) any Condition in, at, on, under, or emanating from
the Premises, which Condition (A) did not exist at or prior to the Closing Date;
(B) was caused by Buyer; and (C) either violates an Environmental Law or
requires Remediation under Environmental Law; or
(ii) any Condition or release of a Pollutant in, at, on,
under, or emanating from the Premises, including any related natural resource
damage claims, which Condition (A) did not exist at or prior to the Closing Date
and (B) was caused by Buyer that affects Remediation of the NIBW Site; or
(iii) any Environmental Liability for the offsite
disposal of Hazardous Substances by Buyer after the Closing Date.
(c) Buyer's obligation to indemnify under Section 5.2 of
this Agreement shall be subject to the procedures for indemnification in Section
7.5 of the Asset Purchase Agreement.
5.3 Limitation on Indemnification Obligation.
(a) There will be no dollar or time limitations
applicable to those indemnification obligations set forth in Sections 5.1(b)(i),
5.1(b)(ii), 5.1(b)(iii), 5.2(b)(ii), and 5.2(b)(iii).
(b) Subject to Section 5.3(a), the parties'
obligations to indemnify under Sections 5.1(a), 5.1(b)(iv), 5.2(a), and
5.2(b)(i) shall be subject to the threshold and cap limitations set forth in
Section 7.3 of the Asset Purchase Agreement.
(c) To the extent any obligation to indemnify is
covered by both Section 5.3(a) and Section 5.3(b), Section 5.3(a) shall govern.
(d) The indemnification obligation set forth in
Sections 5.1(b)(iv) and 5.2(b)(i) shall expire on the tenth (10th) anniversary
of the Closing Date (the "Environmental Termination Date"). Except as provided
in Section 5.3(a), neither party will be responsible as an indemnifying party
for any Environmental Claim first asserted after the Environmental Termination
Date.
(e) With respect to any claim pursuant to
subparagraph 5.1(b)(iv) or 5.2(b)(i), the parties agree that it will be
presumed, subject to rebuttal by a preponderance of the evidence, that any
Condition subject to a claim for indemnification within five (5) years from the
Closing Date existed at or prior to the Closing Date, and that any Condition
subject to a claim for indemnification after five (5) years from the Closing
Date did not exist at or prior to the Closing Date.
(f) All applicable statutes of limitations and defenses
based upon the passage of time will be tolled while the procedures specified in
this Section 5.3 are pending. The parties will take such actions, if any, that
are necessary in order to effectuate such tolling.
(g) Each party will continue to perform its obligations
under this Agreement pending final resolution of any dispute arising out of or
relating to this Agreement, except to the extent that such continued performance
will cause irreparable damage to such party.
(h) All deadlines specified in this Section 5.3: (i) may be
extended by mutual written agreement of the parties, and (ii) will automatically
be extended for a reasonable period of time in order to permit the diligent
pursuit of a cure of any dispute.
5.4 Survival. All representations and warranties contained herein
will remain operative and in full force and effect regardless of any
investigation made by or on behalf of Buyer or Seller and any amounts paid
hereunder, and shall expire four (4) years after the Closing Date.
ARTICLE VI
MISCELLANEOUS
6.1 All notices, requests, demands and other communications
hereunder shall be in writing, addressed as follows:
If to Seller: Motorola, Inc.
1301 E. Algonquin Road
Schaumburg, Illinois 60196
Facsimile No.: (847) 538-2491
Attn: Bob McCall
and Motorola, Inc.
Law Department
1303 E. Algonquin Road
Schaumburg, Illinois 60196
Facsimile No.: (847) 576-3628
Attn: General Counsel
with a copy (which shall not constitute notice) to:
Wiley, Rein & Fielding
1776 K Street, N.W.
Washington, D.C. 20006
Facsimile No.: (202) 719-7049
Attn: Kay Tatum
If to Buyer: General Dynamics Corporation
3190 Fairview Park Drive
Falls Church, VA 22042
Facsimile No.: (703) 876-3554
Attn: David A. Savner
with a copy (which shall not constitute notice) to:
Jenner & Block, LLC
One IBM Plaza
Chicago, Illinois 60611
Facsimile No.: (312) 840-8711
Attn: Thomas A. Monson
or to such other address as Buyer or Seller may designate by written notice to
the other parties hereto. Any such notices, requests, demands or other
communications shall be deemed to have been duly given when received if
delivered personally or, if mailed, on the date five (5) days after the date so
deposited in the mails, postage prepaid, return receipt requested or on the day
following the day sent if sent by prepaid overnight delivery service. Notices,
requests, demands and other communications hereunder may be delivered by
facsimile transmission if confirmation by sender is made within three (3)
business days thereafter. All periods of notice will be measured from the date
of deemed delivery thereof.
6.2 Nondisclosure. Neither Buyer nor Seller shall issue any press
release or make any other public disclosure (including disclosure to public
officials) with respect to this Agreement or the transactions contemplated by
this Agreement, except as required by law, without the prior approval of the
other party, which approval shall not be unreasonably withheld; provided, that
either party may, if considered necessary by its counsel to fulfill its
obligations as a publicly traded corporation, respond to inquiries and issue
such releases as it considers necessary and appropriate, if it notifies the
other party in advance of the substance of such proposed response or proposed
release and gives such party reasonable opportunity for comment prior to such
response or release.
6.3 Limitation of Liability. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL,
INCIDENTAL, INDIRECT, COLLATERAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR LOST
PROFITS IN CONNECTION WITH ANY CLAIMS, LOSSES, DAMAGES, OR INJURIES ARISING OUT
OF THE CONDUCT OF SUCH PARTY PURSUANT TO THIS AGREEMENT.
6.4 Governing Law; Jurisdiction. This Agreement will be governed and
construed under the internal laws (but not the principles of conflicts of laws)
of the State of Illinois. Each
of Seller and Buyer consents to the exclusive jurisdiction of the federal courts
of Illinois for any Proceeding in connection with this Agreement or the
transactions contemplated hereby and agrees that any such Proceeding may be
brought only in such courts. Each of Seller and Buyer further waives any
objection to the laying of venue for any Proceeding in such courts. Each party
will accept and acknowledge service of any and all process that may be served in
any Proceeding. Each party agrees that any service of process upon it mailed by
registered or certified mail, return receipt requested to such party at the
address provided in Section 6.1 above will be deemed in every respect effective
service of process upon such party in any such Proceeding. Each party will waive
any right it might have to a trial by jury in any such Proceeding.
6.5 Entire Agreement. Except as provided by Sections 5.1(c),
5.2(c), 5.3(b), and 6.18, this Agreement, together with all exhibits and
schedules hereto, cover the entire understanding of the parties hereto,
concerning environmental, worker safety and health issues related to the assets
and liabilities that are the subject of the Asset Purchase Agreement, and
supersede all prior agreements or understandings relating to any of the subject
matters hereof. In the event of conflict or other inconsistency between any
term(s) of this Agreement and any term(s) of the Asset Purchase Agreement, the
term(s) of this Agreement will take precedence and otherwise govern the parties'
rights and obligations. No modification or amendment of the terms and conditions
of this Agreement will be effective unless in writing and signed by the parties
or their respective duly authorized agents.
6.6 Successors and Assigns. This Agreement inures to the
benefit of, and is binding upon, the successors, permitted assigns, and personal
representatives of the parties hereto. Neither party may assign its rights or
obligations under this Agreement without the express written consent of the
other party, except that Buyer may, without the prior written consent of Seller,
assign its rights under this Agreement to any of its direct or indirect wholly
owned subsidiaries, provided, that Buyer shall remain liable for all of its
obligations under this Agreement.
6.7 Headings. This Agreement will not be interpreted by
reference to any of the titles or headings to the sections or paragraphs of this
Agreement, which have been inserted for convenience purposes only and are not
deemed a part hereof.
6.8 Schedules; Exhibits. This Agreement is deemed to include
all of the schedules and exhibits hereto, which are made a part hereof by this
reference thereto.
6.9 Counterparts. This Agreement may be executed in
counterparts, both of which together will be deemed to constitute one and the
same instrument.
6.10 Severability. If any provision of this Agreement is held
invalid or unenforceable by a court of competent jurisdiction, such provision
thereupon will be deemed modified only to the extent necessary to render that
provision either valid or excluded from this Agreement, as the situation may be
required; and this Agreement will be enforced and construed as if such provision
had been included herein as so modified, or had not been included herein, as the
case may be.
6.11 No Third Party Beneficiaries. This Agreement will not
confer any rights or remedies on any person other than the parties hereto and
their respective successors and permitted assigns.
6.12 No Waiver. Any failure or delay on the part of either
party in the exercise of any right or privilege hereunder will not operate as a
waiver thereof, nor will any single or partial exercise of any such right or
privilege preclude other or further exercise thereof or any other right or
privilege.
6.13 Termination. This Agreement will have no fixed
termination date.
6.14 Joint Litigation. If any Environmental Liability is
subject to a defense, indemnity and hold harmless obligation under this
Agreement, and if such Environmental Liability includes obligations or
liabilities which are not included within such defense, indemnity and hold
harmless obligation, the parties will cooperate in handling such Environmental
Liability (including all defense, negotiation and settlement discussions related
thereto), in order to resolve such Environmental Liability in a manner that is
consistent with the parties' respective rights and obligations under this
Agreement.
6.15 No Admissions. By signing this Agreement, the parties
neither admit nor deny any responsibility or liability concerning any alleged or
possible non-compliance with Laws, or otherwise admit or deny any facts or
conclusions of law. Further, neither this Agreement, nor any term or condition
of this Agreement, will constitute, or be considered as evidence of, any
violation of any Law.
6.16 Other Obligations. The parties' rights, responsibilities
and obligations under this Agreement are in addition to any and all legal
rights, responsibilities and obligations imposed upon or granted to- them, or
any of them, by any legal requirement.
6.17 Reservation of Rights. By signing this Agreement, and
except as specifically provided in this Agreement:
(a) Each party expressly reserves all claims,
counterclaims, causes of action, demands, defenses, and other legal rights and
remedies (whether in law or in equity) which that party possesses or may possess
against the other party, the government, and any other third party.
(b) Nothing in this Agreement will constitute, or be
construed as constituting, a waiver or release from any claim, counterclaim,
cause of action, demand, defense, or other legal right or remedy (whether in law
or in equity) which that party possesses or may possess against the other party,
the government, or any other third party.
6.18 Dispute Resolution. Any dispute related to this
Agreement shall be subject to the procedures for Dispute Resolution in Section
10.5 of the Asset Purchase Agreement, except as provided in Section 4.2(e)(i) of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement with legal and binding effect as of the date and year that it is
signed by the parties or their respective duly authorized agents..
SELLER: MOTOROLA, INC.
By: /s/Keith Bane
---------------------------------
Name: Keith Bane
Title: Executive Vice President
BUYER:
By: /s/Ken Dahlberg
---------------------------------
Name: K. C. Dahlberg
Title: Executive Vice President