EXECUTION COPY
ASSET PURCHASE AND SALE
AGREEMENT
DATED JANUARY 7, 2000
BY AND BETWEEN:
L-3 COMMUNICATIONS CORPORATION
("BUYER")
AND
RAYTHEON COMPANY
("SELLER")
EXECUTION COPY
i
INDEX OF PROVISIONS
Page
Article I.........................................................................................................1
Article II.......................................................................................................12
Section 2.1. Purchase and Sale; Assumption of Liabilities......................................12
Section 2.2. Closing Documents.................................................................12
Section 2.3. Time and Place of Closing.........................................................12
Section 2.4. Allocation of Asset Purchase Consideration........................................13
Section 2.5. Purchase Price Adjustment.........................................................13
Section 2.6. Nonassignable Contracts...........................................................15
Section 2.7. Intercompany Accounts; Distributions..............................................15
Article III......................................................................................................15
Section 3.1. Incorporation; Authorization; Conflicts; Etc......................................16
Section 3.2. Financial Statements..............................................................17
Section 3.3. Undisclosed Liabilities...........................................................17
Section 3.4. Absence of Certain Changes........................................................17
Section 3.5. Properties; Title to Assets.......................................................17
Section 3.6. Real Estate.......................................................................18
Section 3.7. Litigation; Orders................................................................19
Section 3.8. Material Contracts................................................................19
Section 3.9. Licenses, Approvals, Other Authorizations, Reports, Etc...........................20
Section 3.10. Labor Matters....................................................................20
Section 3.11. Executive Management and Employees...............................................20
Section 3.12. Compliance with Laws.............................................................21
Section 3.13. Environmental Matters............................................................21
Section 3.14. Employee Benefit Plans and Related Matters.......................................21
Section 3.15. Disclaimer Regarding Assets......................................................23
Section 3.16. Brokers, Finders.................................................................24
Section 3.17. No Implied Representation........................................................24
Section 3.18. Prohibited Transactions..........................................................24
Section 3.19. Insurance........................................................................24
Section 3.20. Year 2000........................................................................25
Section 3.21. Government Contracts.............................................................25
Section 3.22. Government Furnished Equipment...................................................26
Section 3.23. Absence of Changes...............................................................26
Section 3.24. Schedules........................................................................27
Article IV.......................................................................................................27
Section 4.1. Incorporation; Authorization; Etc.................................................27
Section 4.2. Brokers, Finders, Etc.............................................................27
Section 4.3. Consents, Approvals, Other Authorizations.........................................27
i
EXECUTION COPY
Section 4.4. Acquisition of Subject Assets and Operation of the Businesses
for Investment....................................................................28
Section 4.5. Financial Capability..............................................................28
Section 4.6. No Financing Contingency..........................................................28
Article V........................................................................................................28
Section 5.1. Investigation of Business; Access to Properties, Records..........................28
Section 5.2. Best Efforts; Obtaining Consents..................................................29
Section 5.3. Conduct of the Businesses.........................................................30
Section 5.4. Preservation of Business..........................................................32
Section 5.5. Further Assurances................................................................32
Section 5.6. Public Announcements..............................................................32
Section 5.7. Services..........................................................................32
Section 5.8. Other Offers......................................................................33
Section 5.9. Non-Compete and Non-Solicitation..................................................33
Section 5.10. Notices of Certain Events........................................................33
Section 5.11. No Inconsistent Action...........................................................34
Section 5.12. Post-Closing Confidentiality.....................................................34
Section 5.13. Government Contract Novation.....................................................34
Section 5.14. Binghamton Facility..............................................................35
Section 5.15. Buyer's SEC Financial Reporting..................................................35
Section 5.15. Sharing of Retention Commitments Amounts.........................................36
Section 5.17. Payments.........................................................................36
Section 5.18. Insurance........................................................................36
Section 5.19. Supply Contracts.................................................................36
Section 5.20. Research and Experimental Expenses...............................................36
Section 5.21. W-2 Issues.......................................................................37
Article VI.......................................................................................................37
Section 6.1. Employment of Employees of the Business...........................................37
Section 6.2. Welfare and Fringe Benefit Plans..................................................37
Section 6.3. Access to Books and Records.......................................................37
Section 6.4. Defined Benefit Plan..............................................................38
Section 6.5 Retiree Medical Benefits..........................................................40
Section 6.6 WARN Act..........................................................................40
Section 6.7 Represented Employees.............................................................40
Article VII......................................................................................................41
Section 7.1. Taxes and Refunds.................................................................41
Section 7.2. Allocation of Transfer and Property Taxes.........................................41
Section 7.3. Allowable Taxes...................................................................42
Section 7.4. Cooperation.......................................................................42
Article VIII.....................................................................................................43
Section 8.1. Representations, Warranties and Covenants of Seller...............................43
Section 8.2. Filings; Consents; Waiting Periods................................................43
Section 8.3. No Actions........................................................................43
ii
EXECUTION COPY
Section 8.4. Intellectual Property Agreement, Etc..............................................43
Section 8.5. Adverse Changes...................................................................44
Section 8.6. Binghamton Facility...............................................................44
Section 8.7. Certain Transfer Documents........................................................44
Section 8.8 Title Policies....................................................................44
Section 8.9. FIRPTA Certificate................................................................44
Article IX.......................................................................................................44
Section 9.1. Representations, Warranties and Covenants of Buyer................................44
Section 9.2. Filings: Consents: Waiting Periods................................................45
Section 9.3. No Actions........................................................................45
Section 9.4. Intellectual Property Agreement, Etc..............................................45
Section 9.6. Binghamton Facility...............................................................45
Article X........................................................................................................46
Section 10.1. Survival Periods.................................................................46
Section 10.2. Indemnification by Seller........................................................46
Section 10.3. Indemnification by Buyer.........................................................47
Section 10.4. Indemnification Procedures.......................................................47
Section 10.5. Certain Limitations..............................................................48
Section 10.6. Exclusive Remedy.................................................................49
Section 10.7. Set-Off..........................................................................49
Article XI.......................................................................................................49
Section 11.1. Termination......................................................................49
Section 11.2. Procedure and Effect of Termination..............................................50
Article XII......................................................................................................50
Section 12.1. Counterparts.....................................................................50
Section 12.2. Governing Law; Consent to Jurisdiction...........................................50
Section 12.3. Entire Agreement.................................................................50
Section 12.4. Expenses.........................................................................51
Section 12.5. Notices..........................................................................51
Section 12.6. Successors and Assigns...........................................................52
Section 12.7. Headings: Definitions............................................................52
Section 12.8. Amendment........................................................................52
Section 12.9. Waiver; Effect of Waiver.........................................................52
Section 12.10. Interpretation; Absence of Presumption..........................................52
Section 12.11. Specific Performance............................................................53
Section 12.12. Remedies Cumulative.............................................................53
Section 12.13. Severability....................................................................53
Section 12.14. Bulk Sales......................................................................53
Section 12.15. No Third Party Beneficiaries....................................................53
Section 12.16. Seller Acknowledgement..........................................................53
APPENDICES
Appendix I: Provisions and Procedures for Accounting Neutral......................................... 55
iii
EXECUTION COPY
Appendix II: Preliminary and Target Net Working Capital Calculations................................. 57
Appendix III: Summary of Transition Services Agreement............................................... 61
EXHIBITS
Exhibit A: Bill of Sale and Assignment............................................................... 64
Exhibit B: Intellectual Property Agreement........................................................... 66
Exhibit C: Form of Environmental Access Agreement for the Binghamton Facility....................... 108
SCHEDULES
Schedule 1(a): Excluded Assets
Schedule 1(b): Encumbrances
Schedule 1(c): Subject Assets
Schedule 2.7: Retained Receivables
Schedule 3.1(e): Certain Approvals and Consents
Schedule 3.2: Financial Statements
Schedule 3.3: Liabilities
Schedule 3.6(a): Transferred Real Estate
Schedule 3.6(b): Retained Real Estate
Schedule 3.7: Litigation and Orders
Schedule 3.8: Material Contracts
Schedule 3.9(a): Unobtained Licenses or Approvals
Schedule 3.9(b): Governmental Approvals
Schedule 3.10: Labor Matters
Schedule 3.11(a): Executive Management
Schedule 3.11(b): Absent Employees
Schedule 3.12: Compliance With Laws
Schedule 3.13: Environmental Matters
Schedule 3.14(a): Employee Benefits
Schedule 3.14(c): Multiple Employer Plans
Schedule 3.14(e): Nonqualified Plans
Schedule 3.14(f): Non-certified Plans
Schedule 3.14(g): Events under Employee Benefit Plan
Schedule 3.14(h): Withdrawal Liability
Schedule 3.14(j): Funding of Employee Benefit Plans
Schedule 3.14(l): Retiree Medical or Life Insurance Plans not Required by Law
Schedule 3.19: Insurance
Schedule 3.21(a): Government Contracts and Certain Disclosures
Schedule 3.21(b): Government Contract Claims and Disputes
Schedule 3.21(c): Government Contract Sanctions - Business Irregularities
Schedule 3.21(e): Government Contract Rate Matters
Schedule 3.22: Government Furnished Equipment
Schedule 3.23: Material Changes
Schedule 5.3: Conduct of Business
iv
EXECUTION COPY
Schedule 6.1: Employees
Schedule 6.4: Actuarial Assumptions and Methods.
Schedule 8.2: Filings, Consents and Waiting Periods Applicable to Buyer
Schedule 9.2: Filings, Consents and Waiting Periods Applicable to Seller
Schedule 10.2: Buyer Representatives with Actual Knowledge
v
ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT (the "Agreement"), dated as of
January 7, 2000 by and between Raytheon Company, a Delaware corporation
("Seller"), and L-3 Communications Corporation, a Delaware corporation
("Buyer").
WHEREAS, Seller, through its two separate, but interrelated Training
Devices Business and its Training Services Business designs, develops, and
manufactures advanced simulation and training products characterized by
high-fidelity representations of cockpits, operator stations, and aircraft and
vehicle simulation, and provides a broad range of training and logistics
services and training device support for military training systems and
principally for sale to governmental (non-commercial) customers (both of the
Training Devices Business and the Training Services Business, currently managed
and coordinated out of headquarters for the Training Devices and Training
Services units (excluding the Raytheon commercial training unit and the NASA and
MOD SIM operations), located in Arlington, Texas being herein collectively the
"Businesses"); and
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, the Businesses and substantially all of the assets of Seller used
in connection with the Businesses and Seller desires to assign to Buyer, and
Buyer desires to assume from Seller, various, herein-described obligations and
liabilities relating to the Businesses, all on the terms and conditions
hereinafter set forth (collectively, the "Asset Purchase");
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
Article I.
Certain Definitions
As used herein, unless the context otherwise requires, the following terms (or
any variant in the form thereof) have the following respective meanings. Terms
defined in the singular shall have a comparable meaning when used in the plural,
and vice versa, and the reference to any gender shall be deemed to include all
genders. Unless otherwise defined or the context otherwise clearly requires,
terms for which meanings are provided herein shall have such meanings when used
in any Schedule hereto and each Collateral Document (hereinafter defined) and
certificate executed or required to be executed pursuant hereto or thereto or
otherwise delivered, from time to time, pursuant hereto or thereto.
"Access Agreement" means the Environmental Access Agreement attached as
Exhibit C.
"Acquisition Proposal" has the meaning set forth in Section 5.8.
"Action" means any action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.
1
"Additional Purchase Price" has the meaning set forth in Section
2.5(a).
"Adverse" or "Adversely" when used in conjunction with "Affect,"
"Change" and "Effect" shall mean, with respect to Seller or Buyer, whichever is
the obligor in the context to which such term applies, any event which has or
could reasonably be expected to, in a material respect, or to a material degree,
(a) adversely affect the enforceability of this Agreement by the obligee, (b)
adversely affect the business, properties, operation, assets, financial
condition or results of operation of the Subject Assets or the Businesses taken
as a whole, (c) impair the obligor's ability to fulfill its obligations under
the terms of this Agreement or (d) adversely affect the aggregate rights and
remedies of the obligee under this Agreement.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly through one or more intermediaries controlling,
controlled by or under common control with, such Person, with "control" for such
purpose meaning the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities or voting interests, by contract or
otherwise.
"Agreement" means this Asset Purchase and Sale Agreement, dated as of
the date first written herein above (together with the Appendices and Schedules
hereto), as may from time to time be amended, modified, supplemented or waived.
"Allocation" has the meaning set forth in Section 2.4(a).
"Allowable Tax" has the meaning set forth in Section 7.3.
"Antitrust Division" means the Antitrust Division of the United States
Department of Justice.
"Apportioned Obligations" has the meaning set forth in Section 7.2(b).
"Asset Purchase" has the meaning set forth in the recitals to this
Agreement.
"Assumed Liabilities" means all Contracts, debts, claims, commitments,
liabilities and obligations of Seller or any Affiliate of Seller exclusively or
primarily arising out of, or in connection with, or relating to, the Businesses
(including, without limitation, any assets, operations or activities as it
relates to the Businesses as conducted by any predecessor of Seller) or the
Subject Assets, whether or not disclosed in this Agreement, the Schedules
hereto, or any Collateral Document, including without limitation, (i) any
liability based on negligence, gross negligence, strict liability or any other
theory of liability, whether in law (whether common or statutory) or equity,
(ii) any and all Actions outstanding on the date hereof, or on or following the
Closing Date exclusively or primarily arising out of or in connection with, or
relating to, the Businesses or the Subject Assets, (iii) any liabilities or
obligations arising under any Environmental Law and relating to events occurring
in connection with the ownership or operation of the Businesses after the
Closing Date, including, but not limited to: (A) liabilities for off-site
treatment, transportation, or disposal after the Closing Date of Hazardous
Substances; (B) increased liabilities and obligations with respect to any
environmental
2
conditions existing as of the Closing Date on the Subject Assets to the extent
that such increased liabilities result from actions taken by Buyer after the
Closing Date which exacerbate the environmental condition giving rise thereto;
and (C) new or increased environmental liabilities and obligations related to
the Binghamton Facility and arising from Buyer's failure to comply with or to
fulfill its obligations to Seller relating to the Binghamton Facility in this
Agreement or any of the Collateral Documents; and (iv) any and all escrow,
offset or warranty obligations or commitments for or incurred in connection with
the sale of the Seller's (or any such predecessor's) products or services,
manufactured or sold as part of the Businesses (whether shipped or rendered
prior to or after the Closing).
"Bill of Sale and Assignment" has the meaning set forth in Section
2.2(a) hereto.
"Binghamton Facility" refers to Seller's leased facility on Colesville
Road in Kirkwood, New York.
"Businesses" has the meaning set forth in the recitals of this
Agreement.
"Buyer" has the meaning set forth in the first paragraph of this
Agreement.
"Buyer Indemnified Parties" has the meaning set forth in Section 10.2.
"Buyer Pension Plan" has the meaning set forth in Section 6.4.
"Closing" means the consummation of the transactions contemplated by
Section 2.1 of this Agreement.
"Closing Date" means the date which is three (3) business days after
the date on which the last of each of the conditions set forth in Articles VIII
and IX shall have been satisfied or waived, or if Seller and Buyer shall
mutually agree on a different date for the Closing, the date upon which they
shall have mutually agreed.
"Closing Documents" has the meaning set forth in Section 2.2(c).
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
"Collateral Documents" means the Bill of Sale and Assignment,
Intellectual Property Agreement, the Transition Services Agreement, the Access
Agreement on the Binghamton Facility and any other agreements entered into in
connection with the Closing, and identified as such jointly by the parties. The
Collateral Documents are not part of this Agreement, for all purposes hereof.
"Consideration" has the meaning set forth in Section 2.4(a).
3
"Contract" means any note, bond, mortgage, indenture, lease, contract,
instrument, License, agreement, sales order, purchase order, open bid or other
obligation, arrangement, undertaking, or commitment, oral or written, and all
rights therein.
"Covered Employees" has the meaning set forth in Section 6.4(a).
"Covered Liabilities" has the meaning set forth in Section 10.2.
"Disclosing Party" has the meaning set forth in Section 5.12.
"Dispute Notice" has the meaning ascribed to such term in Section
2.5(c).
"Employees" means the employees of the Businesses employed on the
Closing Date including those on pregnancy or sick leave, temporary lay-off or
short-term or long-term disability.
"Employee Benefit Plans" has the meaning set forth in Section 3.14.
"Entity" means any Person other than a natural Person.
"Environmental Laws" means all applicable federal, state, municipal and
local laws, statutes, ordinances, by-laws, codes, orders, policies, guidelines,
decrees, judgements or injunctions, principles of common law and regulations and
other directives and decisions rendered in any ministry, department or
administrative or regulatory agency relating to environmental health and safety,
pollution or protection of the environment or the presence, manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Substances.
"Environmental Permits" has the meaning set forth in Section 3.13(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any entity which is a member of (i) a
controlled group of corporations (as defined in Section 414(b) of the Code),
(ii) a group of trades or businesses under common control (as defined in Section
414(c) of the Code) or (iii) any affiliated service group (as defined in Section
414(m) of the Code), any of which includes Seller.
"Excluded Assets" means the following:
(a) all cash, cash equivalents, bank accounts and certificates of
deposit held by Seller (whether or not related to the
Businesses);
(b) all insurance policies of Seller and its Affiliates (whether
or not relating to the Subject Assets);
(c) all Income Tax installments paid by Seller and the right to
receive any refund of Taxes paid by Seller, as provided in
Section 7.1;
4
(d) all refunds on Allowable Taxes as provided in Section 7.3;
(e) any receivables to be eliminated in accordance with Section
2.7;
(f) any asset listed or indicated to be retained by Seller in
Schedule 1(a), Schedule 2.7, or Schedule 3.6(b);
(g) any employee benefit plans or plan assets, except as expressly
provided by this Agreement;
(h) any other asset of Seller or its Affiliates that is identified
by this Agreement, the Schedules or Collateral Documents as
not part of the Subject Assets; and
(i) any distributor representative or sales representative
agreements.
"Executive Management" refers to the persons identified on Schedule
3.11(a), together with Robert M. Hansen, Art Fisher and Stephen J. Gluck.
"FAR" means the Federal Acquisition Regulation, 48 CFR Chapter 1.
"FCPA" means the Foreign Corrupt Practices Act of 1977, as amended.
"Final Determination" means (a) with respect to federal Income Taxes, a
"determination" as defined in Section 1313(a) of the Code or execution of an
Internal Revenue Service Form 870AD and, with respect to Taxes other than
federal Income Taxes, any final determination of liability in respect of a Tax
that, under applicable law, is not subject to further appeal, review or
modification through proceedings or otherwise (including the expiration of a
statute of limitations or a period for the filing of claims for refunds, amended
returns or appeals from adverse determinations), or (b) the payment of Tax by
Seller, Buyer or any of their Affiliates, whichever is responsible for payment
of such Tax liability under applicable law, with respect to any item disallowed
or adjusted by a Taxing Authority, provided that such responsible party
determines that no action should be taken to recoup such payment and the
indemnifying party, if any, agrees.
"Financial Statements" has the meaning set forth in Section 3.2.
"FTC" means the United States Federal Trade Commission.
"GAAP" means generally accepted accounting principles in the United
States.
"Government Bid" means any bid, proposal or offer made by Seller or any
of its Affiliates in respect to the Businesses prior to the Closing Date which,
if accepted, would result or may result in a Government Contract.
5
"Government Contract" means any prime contract, subcontract, teaming
agreement or arrangement, joint venture, basic ordering agreement, pricing
agreement, letter contract, purchase order, delivery order, change order or
other Contract of any kind between the Seller or any of its Affiliates in
respect of the Businesses and (i) any Governmental Authority, (ii) any prime
contractor of any Governmental Authority in its capacity as a prime contractor
or (iii) any subcontractor with respect to any Contract of a type described in
clauses (i) or (ii) above.
"Government Disclosure" means any certification, representation,
warranty or statement by Seller or any of its Affiliates in that capacity, or
any agent or instrumentality thereof, which in any way relates to the operation
of the Businesses or the Subject Assets.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any federal, state, local or foreign Entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including any government authority,
agency, department, board, commission, court, or instrumentality of the United
States, any State of the United States or political subdivision thereof, and any
tribunal or arbitral authority of competent jurisdiction, and any
self-regulatory organization.
"Hazardous Substances" means each and every element, compound, chemical
mixture, contaminant, pollutant material, waste or other substance which is
defined, determined or identified as hazardous or toxic under any Environmental
Law or the Release of which is prohibited or restricted under any Environmental
Law. Without limiting the generality of the foregoing, the term shall mean and
include:
(a) "hazardous substances" as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
("CERCLA") (codified in scattered sections of 26 U.S.C., 33
U.S.C., 42 U.S.C., and 42 U.S.C. ss.9601 et seq.), or the
Superfund Amendments and Reauthorization Act of 1986 ("SARA")
(codified in scattered sections of 10 U.S.C., 29 U.S.C., 33
U.S.C., and 42 U.S.C.), each as amended, and regulations
promulgated thereunder;
(b) "hazardous waste" as defined in the Resource Conservation and
Recovery Act ("RCRA") (42 U.S.C. ss.69011 et seq.), as
amended, and regulations promulgated thereunder;
(c) "hazardous materials" as defined in the Hazardous Materials
Transportation Act, (49 U.S.C. ss.1801 et seq.), as amended,
and regulations promulgated thereunder; and
(d) "chemical substance or mixture" as defined in the Toxic
Substances Control Act ("TSCA") (15 U.S.C. ss.2601 et seq.),
as amended, and regulations promulgated thereunder.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
6
"Income Tax" means any federal, state, provincial, local, or foreign
income tax, including any interest, penalty, or addition thereto, whether
disputed or not.
"Income Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Income Taxes, including
any schedule or attachment thereto, and including any amendment thereof.
"Indebtedness" means, as of any date of determination, without
duplication, (a) any indebtedness for borrowed money or issued in substitution
for or exchange of indebtedness for borrowed money, (b) any indebtedness
evidenced by any note, bond, debenture or other debt security, and (c) any
indebtedness for the deferred purchase price of property or services with
respect to which a Person is liable, contingently or otherwise, as obligor or
otherwise (other than trade payables and other current liabilities incurred in
the ordinary course of business).
"Indemnity Period" has the meaning set forth in Section 10.1.
"Initial Transfer Amount" has the meaning set forth in Section 6.4(c).
"Initial Transfer Date" has the meaning set forth in Section 6.4(c).
"IRS" means the Internal Revenue Service.
"Intellectual Property" shall have the meaning assigned thereto under
the terms of the Intellectual Property Agreement.
"Intellectual Property Agreement" shall mean the Intellectual Property
Agreement, substantially in the form attached hereto as Exhibit B, entered into
between Buyer and Seller on the date hereof to become effective upon and in
connection with the Closing, which shall control in the event of any conflict
between the terms and provisions hereof and thereof, to the extent that said
terms and provisions relate to Intellectual Property.
"Knowledge" (including the term "to the knowledge of" or "to the
Seller's knowledge") means the actual knowledge of the Executive Management,
after due inquiry as shall be evidenced in Seller's case by obtaining
appropriate certificates from Executive Management.
"Laws" means (i) all constitutions, treaties, statutes, regulations,
ordinances, rules, orders, codes, findings and other laws (including the common
law) or authoritative pronouncements promulgated by a Governmental Authority,
(ii) Governmental Approvals and (iii) orders, decisions, injunctions, judgement
awards and decrees of, or other directives rendered by, or agreements with any
Governmental Authority, all to the extent published or publicly available.
"Leased Transferred Real Estate" has the meaning set forth in Section
3.6(a).
"Licenses" means licenses, permits, registrations, approvals,
franchises or other authorizations (other than any such license, permit,
registration, approval, franchise or other
7
authorization relating to any Intellectual Property), and means, when used as a
verb, the act of granting a License.
"Lien" means a restriction on voting or transfer or a pledge, lien,
mortgage, hypothecation, collateral assignment, purchase option, charge,
encumbrance, easement, covenant, restriction, title defect, encroachment or
security interest of any kind.
"Net Working Capital" shall mean, except as provided below, as
calculated in accordance with and subject to Appendix II, as of any date, the
sum of (a) billed accounts receivable (including any reserves for doubtful
accounts), (b) unbilled accounts receivable including related progress payments
and customer advances (but excluding contract loss reserves), (c) inventory
(including all related valuation reserves), and (d) current prepaid expenses;
reduced by the sum of (e) accounts payable, (f) accrued payroll and related
payroll taxes, and (g) accrued vacation. Net Working Capital shall be calculated
in accordance with Appendix II hereto (the "Net Working Capital Calculation")
"NLRA" means the National Labor Relations Act, as amended.
"Novation Agreement" has the meaning set forth in Section 5.13.
"Orders" means judgments, orders, injunctions, decrees, stipulations or
awards (whether rendered by a court, administrative agency, arbitrator or other
tribunal) and whether imposed or entered by consent.
"Owned Transferred Real Estate" has the meaning set forth in Section
3.6(a).
"Pension Plans" has the meaning set forth in Section 3.14(e).
"Permitted Liens" means:
(a) Liens for Taxes, assessments and governmental charges due and
being contested in good faith and diligently by appropriate
proceedings and for which adequate reserves have been
established;
(b) servitudes, easements, restrictions, rights-of-way,
encroachments and other similar rights in real property or any
interest therein, provided the same are not of such nature
alone or together as to Adversely interfere with or Adversely
Affect the current use of the property subject thereto or
Adversely Affect its value;
(c) Liens for Taxes either not due and payable or due but for
which notice of assessment has not been given;
(d) Liens that are not material to the Businesses and constitute
mechanics', carriers', workers' or like liens incurred in the
ordinary course of business for sums not yet due and payable
or for sums being contested in good faith;
8
(e) assignments of insurance provided to landlords (or their
mortgagees) pursuant to the terms of any lease, and Liens or
rights reserved in any lease for rent or for compliance with
the terms of such lease;
(f) security given to any public utility, municipality or
government or to any statutory or public authority in
connection with the operations of the Businesses, other than
security for borrowed money;
(g) the financing encumbrances described in Schedule 1(b), and any
other liens, exceptions or encumbrances which do not,
individually or in the aggregate, Adversely Affect the use or
the enjoyment of the benefits of ownership of such property.
"Person" means an individual, a corporation, a limited liability
company, a partnership, a joint venture, association, a trust or any other
entity or organization, including a government or political subdivision or any
agency or instrumentality thereof.
"Post-Closing Tax Period" has the meaning set forth in Section 7.2(b).
"Pre-Closing Tax Period" has the meaning set forth in Section 7.2(b).
"Preliminary Closing Balance Sheet" has the meaning set forth in
Section 2.5(a).
"Preliminary Net Working Capital Calculation" has the meaning set forth
in Section 2.5(a).
"Purchase Price" means One Hundred Sixty Million U.S. Dollars (U.S.
$160,000,000), representing the aggregate cash consideration to be paid by Buyer
to Seller at Closing pursuant hereto, as adjusted in accordance with Section
2.5.
"PWC Report" has the meaning set forth in Section 2.5.
"Release" means any releasing, disposing, discharging, injecting,
spilling, leaking, leaching, pumping, dumping, emitting, escaping, emptying,
seeping, dispersal, migration, transporting, placing and the like, including the
moving of any materials through, into or upon, any land, soil, surface water,
ground water or air, or otherwise entering into the environment.
"Represented Employees" has the meaning set forth in Section 6.7.
"Resolution Period" has the meaning ascribed to such term in Section
2.5(c).
"Retained Liabilities" means those contracts, debts, claims,
commitments, obligations and liabilities of Seller and its Affiliates that are
not Assumed Liabilities. Notwithstanding the foregoing or any other provision
hereof, the following are Retained Liabilities:
9
(a) any liabilities and obligations arising under any
Environmental Law and relating to events occurring in
connection with the ownership or operation of the Businesses
prior to the Closing Date, including, but not limited to, any
liability for the off-site treatment, transportation or
disposal prior to the Closing Date of Hazardous Substances;
(b) any liabilities and obligations arising from any Action
affecting the rates and rate schedules submitted to the U.S.
Government with respect to the Government Contracts included
in the Subject Assets, for years 1996, 1997, 1998, and 1999;
(c) any payables to be eliminated in accordance with Section 2.7;
(d) any amounts payable by Seller with respect to Taxes and for
which Seller is responsible under Article 7;
(e) any liabilities and obligations relating to the Excluded
Assets; and
(f) those items indicated on the Schedules as being Retained
Liabilities.
"Retained Receivables" has the meaning set forth in Section 2.7.
"Returns" means returns, reports and forms required to be filed with
any Governmental Authority.
"Schedule" or "Schedules" means any Schedule hereto or of or pertaining
to any such Schedule. The Schedules and all Appendices hereto are part of this
Agreement, for all purposes hereof.
"Section 4044 Amount" has the meaning set forth in Section 6.4(d).
"Seller" has the meaning set forth in the first paragraph of this
Agreement.
"Seller Indemnified Parties" has the meaning set forth in Section 10.3.
"Seller Pension Plan" has the meaning set forth in Section 6.4(a).
"Seller's Agents" has the meaning set forth in Section 5.8.
"Separate Counsel" has the meaning set forth in Section 10.4(b).
10
"Subject Assets" means all of the property and assets exclusively or
primarily used in connection with the Businesses (other than the Excluded
Assets, and other than the Intellectual Property, as to which the Intellectual
Property Agreement shall control) including Transferred Real Estate and rights
of every nature, kind and description, tangible and intangible (including
goodwill) whether real, personal or mixed, whether accrued, contingent or
otherwise and whether now existing or hereinafter acquired, including the
Subject Assets set forth in Schedule 1(c).
"Subsidiary" means, with respect to any Person, any Entity a majority
of the capital stock ordinarily entitled to vote for the election of directors
of which, or if no such voting stock is outstanding, a majority of the equity
interests of which, is owned directly or indirectly, legally or beneficially, by
such Person or any other Person controlled by such Person.
"Supply Contracts" has the meaning set forth in Section 5.19.
"Survey" has the meaning set forth in Section 8.8.
"Target Net Working Capital" means $90,724,000.
"Taxes" means all taxes (whether federal, state, provincial, local or
foreign) based upon or measured by income and any other tax whatsoever,
including, but not limited to, gross receipts, profits, capital, business,
sales, use, occupation, goods and services, value added, ad valorem, transfer,
franchise, withholding, payroll, employment, excise or property taxes, together
with any interest or penalties imposed with respect thereto.
"Third Party Claim" means any Action by or before any Governmental
Authority asserted by a Person other than any party hereto or their respective
Affiliates which gives rise to a right of indemnification hereunder.
"Title Company" refers to First American Title Insurance Company.
"Title Policy" has the meaning set forth in Section 8.8.
"Transfer Taxes" has the meaning set forth in Section 7.2(a).
"Transferred Employees" has the meaning set forth in Section 6.1.
"Transferred Real Estate" means the land, buildings and improvements
constituting the facilities identified and described on Schedule 3.6(a) hereto.
"True-Up Date" has the meaning set forth in Section 6.4(c).
"WARN Act" means the Worker Adjustment and Retraining Notification Act,
29 U.S.C. ss.ss. 2101-2109, as amended.
11
Article II.
Sale of Assets: Closing
Section 2.1. Purchase and Sale; Assumption of Liabilities.
(a) On the basis of and subject to the representations, warranties,
covenants and agreements and subject to the satisfaction or waiver of the
conditions set forth herein, (x) Buyer hereby agrees to purchase from Seller and
in consideration of the Purchase Price Seller hereby agrees to sell, convey,
transfer, assign and deliver (or cause to be delivered) to Buyer, at the
Closing, free and clear of all Liens (other than Permitted Liens), all of
Seller's right title and interest (including any such interest held by an
Affiliate of Seller on the date hereof) in and to the Subject Assets, and (y)
effective upon the Closing, Seller hereby agrees to assign and Buyer hereby
agrees to unconditionally assume and agrees to pay, satisfy, discharge, perform
and fulfill when due in accordance with their terms, any and all Assumed
Liabilities. All transactions at the Closing shall be deemed to be effective as
of 5:00 p.m. on the Closing Date (Dallas Time), and events taking place and
periods ending thereafter shall be deemed to have taken place or ended after the
Closing Date.
(b) Notwithstanding anything to the contrary herein, Seller shall
retain all rights under and liabilities with respect to the Excluded Assets and
the Retained Liabilities and Buyer shall have no rights under and no liabilities
with respect to the Excluded Assets or the Retained Liabilities.
Section 2.2. Closing Documents. At the Closing:
(a) Seller shall deliver to Buyer: (i) a General Assignment, Assumption
and Bill of Sale in substantially the form attached hereto as Exhibit A (the
"Bill of Sale and Assignment"), duly executed by Seller and Buyer, (ii) a
special warranty deed in a form suitable for registration transferring the fee
interest included in Owned Transferred Real Estate from Seller to Buyer, (iii)
assignments of Seller's leasehold estates in the Leased Transferred Real Estate,
and (iv) all such other good and sufficient instruments of conveyance,
assignment and transfer, and such affidavits and other deeds, bills of sale,
endorsements, consents, assignments, instruments, as shall be effective to
transfer to and vest in Buyer all right, title and interest of Seller and its
Affiliates, in and to the Subject Assets.
(b) Buyer shall deliver to Seller (i) such good and sufficient
instruments of assumption, as shall be effective to cause Buyer to assume the
Assumed Liabilities; and (ii) pay by wire transfer the Purchase Price in
immediately available funds to the account specified by Seller at least two (2)
business days before the Closing.
(c) Seller and Buyer shall deliver the certificates and other documents
required to be delivered under Articles VIII and IX (together with the other
documents otherwise referred to in this Section 2.2, the "Closing Documents").
Section 2.3. Time and Place of Closing. The Closing shall take place on
the Closing Date at 10:00 A.M., local time, at the offices of BakerBotts,
L.L.P., in New York, New York, or such other place or time as the parties may
agree.
12
Section 2.4. Allocation of Asset Purchase Consideration. (a) The
Purchase Price and the Assumed Liabilities and all other capitalizable costs
(hereinafter, the "Consideration"), to the extent properly taken into account
under applicable provisions of the Code, shall be allocated among each of the
Subject Assets in accordance with an allocation schedule to be agreed upon
between Buyer and Seller within 120 days following the Closing Date (the
"Allocation"); provided, however, any allocation schedule agreed between Buyer
and Seller shall not allocate more than $133 million of the Purchase Price to
assets of Classes I, II, III, and IV as described in U.S. Department of Treasury
Regulation ss.1.1060-1T, promulgated pursuant to the Code. Buyer and Seller
agree to act in accordance with the allocations contained in the Allocation in
any relevant Returns or similar filings. Any dispute regarding the Allocation
not resolved within 120 days following the Closing Date, by agreement of the
parties shall be resolved by the procedures set forth in Appendix I hereto.
(b) Except as required by a Final Determination, Seller and Buyer agree
to (i) be bound by the Allocation, (ii) act in accordance with the Allocation in
the preparation of financial statements and filing of all Returns under the Code
and in the course of any Tax audit, Tax review or Tax litigation relating
thereto, and (iii) take no position and cause their Affiliates to take no
position inconsistent with the Allocation for federal, state or provincial
Income Tax purposes.
Section 2.5. Purchase Price Adjustment. (a) As soon as practicable and
in any event within 30 days following the Closing, Seller shall deliver to Buyer
a preliminary, unaudited balance sheet (the "Preliminary Closing Balance Sheet")
relating to the Businesses and a worksheet reflecting the calculation of the Net
Working Capital of the Businesses as of the Closing Date (the "Preliminary Net
Working Capital Calculation"). Simultaneously with the delivery to Buyer of the
Preliminary Closing Balance Sheet and the Preliminary Net Working Capital
Calculation, Seller shall either (i) transfer to Buyer (via wire transfer in
accordance with instructions to be provided by Buyer) the amount by which Target
Net Working Capital exceeds the Net Working Capital shown on the Preliminary Net
Working Capital Calculation, or (ii) invoice Buyer for the amount ("Additional
Purchase Price") by which the Net Working Capital on the Preliminary Net Working
Capital Calculation exceeds the Target Net Working Capital. Buyer shall transfer
to Seller the amount of any Additional Purchase Price (via wire transfer in
accordance with instructions to be provided by Seller) within seven (7) days of
the delivery of such invoice.
(b) Upon completion of the Preliminary Net Working Capital Calculation,
Seller shall engage Pricewaterhouse Coopers LLP ("PWC"), independent auditors
for Seller, to perform an audit of the Preliminary Net Working Capital
Calculation in accordance with the principles and procedures set forth in
Appendix II hereto. PWC will be instructed to report on the Preliminary Net
Working Capital Calculation (the "PWC Report"). The PWC Report and accompanying
calculation of Net Working Capital ("Closing Date Net Working Capital") as of
the Closing Date (the "Closing Date Net Working Capital Calculation") shall be
delivered to Buyer within sixty (60) days following the Closing. During the
preparation of the PWC Report and the period of any dispute within the
contemplation of this Section 2.5, Buyer shall (i) provide Seller and Seller's
authorized representatives with reasonable access to the Subject Assets and the
Executive Management who accept employment with Buyer, (ii) provide Seller
within fifteen (15) business days after the Closing Date with normal month-end
closing financial information for the period ending on the Closing Date,
13
and (iii) reasonably cooperate with Seller and Seller's authorized
representatives, including the provision on a timely basis of all information
reasonably necessary to enable Seller to prepare the PWC Report.
(c) Seller shall deliver a copy of the PWC Report to Buyer promptly
after it has been prepared. After receipt of the PWC Report, Buyer shall have
thirty (30) days to conduct its review thereof and during such time shall have
access to the work papers used in preparation thereof. Buyer and its authorized
representatives shall have reasonable access to all relevant books and records
and employees of Seller to the extent required to complete their review of the
PWC Report. Buyer may dispute only those items reflected on the PWC Report which
relate to Closing Date Net Working Capital and only on the basis that such
amounts were not arrived at in accordance with Appendix II. Buyer shall only be
entitled to dispute the PWC Report if Buyer's good faith estimate of the Closing
Date Net Working Capital differs from the Closing Date Net Working Capital as
shown on the PWC Report by an amount in excess of $500,000, after taking account
of any prior payment of Additional Purchase Price or remittance under Section
2.5(a). Unless Buyer delivers written notice to Seller on or prior to the 30th
day after Buyer's receipt of the PWC Report specifying in reasonable detail all
disputed items and the basis therefor (a "Dispute Notice") and the amount in
dispute is in excess of $500,000, after taking account of any prior payment of
Additional Purchase Price or remittance under Section 2.5(a), Buyer shall be
deemed to have accepted and agreed to the PWC Report. If Buyer so notifies
Seller of its objection to the PWC Report, Buyer and Seller shall, within thirty
(30) days following such Dispute Notice (the "Resolution Period"), attempt to
resolve their differences and any resolution by them as to any disputed amounts
shall be final, binding, conclusive and non-appealable.
For purposes hereof, "Final Closing Date Net Working Capital" shall
mean the Closing Date Net Working Capital as agreed on by Buyer and Seller or
determined pursuant to the procedures of Appendix II. If following resolution of
any disputed amounts by agreement on or determination of Final Closing Date Net
Working Capital, there do not remain in dispute amounts the aggregate net effect
of which exceeds $500,000, then all amounts remaining in dispute shall be
allocated 50% to Seller and 50% to Buyer.
(d) If at the conclusion of the Resolution Period the aggregate net
effect of all amounts remaining in dispute exceeds $500,000, then all amounts
remaining in dispute shall be submitted to binding resolution in accordance with
the provision and procedures of Appendix I hereto, which provisions and
procedures are hereby incorporated by reference for all applicable purposes.
(e) The Purchase Price shall be (i) increased dollar for dollar to the
extent the Final Closing Date Net Working Capital exceeds Net Working Capital
reflected in the Preliminary Closing Balance Sheet, subject to and after taking
into account any payments made to Buyer or Seller under Section 2.5(a), above or
(ii) decreased dollar for dollar to the extent the Final Closing Date Net
Working Capital is less than Net Working Capital reflected in the Preliminary
Closing Balance Sheet, subject to and after taking into account any payments
made to Buyer or Seller under Section 2.5(a). Any adjustments to the Purchase
Price made pursuant to this Section 2.5 shall bear interest from the Closing
Date through the date of payment at the annual rate of 8.5%. Any adjustments to
the Purchase Price made pursuant to this Section 2.5 shall be paid by wire
transfer in immediately
14
available funds to the account specified by the party to whom such payment is
owed within five (5) business days after the Final Closing Date Net Working
Capital is agreed to by Buyer and Seller or any remaining disputed items are
ultimately determined by the Accounting Neutral pursuant to subsection (d),
above.
Section 2.6. Nonassignable Contracts. Anything in this Agreement to the
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any Contract, or any claim, contractual obligation or authorization of a
Governmental Authority, lease, commitment, sales, service or purchase order, or
any claim, right or benefit arising thereunder or resulting therefrom, if the
Asset Purchase would be deemed an attempted assignment thereof without the
required consent, approval or novation of a third party thereto and would
constitute a breach thereof, or in any way Adversely Affect the rights of Seller
or Buyer thereunder. Buyer acknowledges that the ability of the parties to
obtain the consents contemplated hereunder may be affected by a change in the
dynamics of the relevant market resulting from the Asset Purchase by the Buyer.
Notwithstanding the foregoing, if such consent, approval or novation is not
obtained, or if the consummation of the Asset Purchase would Adversely Affect
the rights of Seller thereunder so that Buyer would not in fact receive the
benefit of all such rights, Seller shall cooperate with Buyer in any arrangement
designed to provide for the benefits thereof to Buyer, including without
limitation subcontracting, sublicensing or subleasing to Buyer or enforcement
for the benefit of Buyer of any and all rights of Seller against a third party
thereto arising out of the breach or cancellation by such third party or
otherwise; and any assumption by Buyer of obligations thereunder in connection
with the Asset Purchase which shall require the consent, approval or novation of
any third party shall be made subject to such consent, approval or novation
being obtained. Any third party cost (other than Contracts with customers of the
Businesses) in connection with obtaining any such consent, approval or novation
shall be borne 50% by Buyer and 50% by Seller. Nothing in this Section 2.6
should be deemed a waiver by Buyer of its rights to receive an effective
assignment of all the Subject Assets.
Section 2.7. Intercompany Accounts. As of the close of business on the
day immediately preceding the Closing Date: (i) the Third-Party accounts
receivable identified on Schedule 2.7 as being retained by Seller ("Retained
Receivables") will be assigned to Seller or otherwise settled to Seller's
satisfaction, and (ii) all intercompany receivables or payables and loans then
existing, except for receivables and payables relating to materials sold or
services rendered under Government Contracts and other Third-party Contracts (in
each case to the extent reflected in the Final Closing Date Net Working Capital
Calculation) between Seller (as it relates to the Businesses), on the one hand,
and any other division or Affiliate of Seller, on the other hand, shall be
settled to Seller's satisfaction in the case of each of (i) and (ii), by way of
capital contribution (with respect to intercompany payables or loans due to any
other division or Affiliate of Seller) or by way of dividend in kind (with
respect to Retained Receivables).
Article III.
Representations and Warranties of Seller
Seller hereby represents and warrants to Buyer as follows:
15
Section 3.1. Incorporation; Authorization; Conflicts; Etc. (a) Seller
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and is duly qualified to transact business in each
jurisdiction in which the nature of property owned or leased on behalf of Seller
or the conduct of Seller requires it to be so qualified and has the requisite
power and authority to own, lease and operate the Subject Assets and to conduct
the Businesses, except where the failure to be in good standing or to be duly
qualified to transact business, would not, individually or in the aggregate,
reasonably be expected to have an Adverse Effect on the Businesses or Seller.
(b) Seller has all requisite corporate power and authority to own the
properties and assets employed by Seller, to carry on Seller's business as it is
now being conducted (including, without limitation, the Businesses), to execute
and deliver this Agreement and the Collateral Documents and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Collateral Documents and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate proceedings on the part of Seller. This Agreement has been,
and upon Closing the Collateral Documents will be, duly executed and delivered
by Seller, and, assuming the due execution hereof and thereof by Buyer, this
Agreement constitutes, and the Collateral Documents will constitute, the legal,
valid and binding obligations of Seller, enforceable against Seller in
accordance with its respective terms. The execution, delivery and performance of
this Agreement and the Collateral Documents and the consummation of the
transactions contemplated hereby and thereby will not (i) conflict with or
violate any provision of the organizational documents of Seller or any of its
Affiliates, (ii) conflict with or violate any provision of, or be an event that
is (or with the passage of time will result in) a violation or default of, or
result in the acceleration of or entitle any Person to accelerate (whether after
the giving of notice or lapse of time or both) any obligation under, or result
in the imposition of any Lien upon or the loss of any benefits of any of the
Subject Assets pursuant to any material Contract or Order to which Seller or any
of its Affiliates is a party or by which any of them is bound, or (iii) conflict
with or violate any other material restriction of any kind or character to which
Seller or any of its Affiliates or any of their Properties is subject, that, in
the case of either of clauses (ii) or (iii), would, individually or in the
aggregate, reasonably be expected to Adversely Affect the Businesses.
(c) No person other than Buyer has any Contract to purchase or acquire
from Seller any of the Subject Assets, other than (i) the sale of inventory in
the ordinary course of the Businesses, or (ii) any such Contracts as a result of
which Seller will not receive aggregate proceeds of greater than $1,000,000.
(d) Subject to Section 2.6 of this Agreement, at the Closing, Seller
will deliver to Buyer good and valid title to the Subject Assets free and clear
of all Liens, except Permitted Liens.
(e) Schedule 3.1(e) indicates all Contracts (other than Leases, which
are separately scheduled) of the Businesses for which a Third Party's consent or
approval is required for assignment or novation, except for Contracts for which
the failure to obtain such consent or approval would not have an Adverse Effect.
16
Section 3.2. Financial Statements. Attached hereto as Schedule 3.2 are
copies of unaudited balance sheet and unaudited statements of income of the
Businesses as of and for the ten months ended October 31, 1999 (collectively,
the "Financial Statements"). The Financial Statements have been prepared for the
internal business planning purposes of Seller in the conduct of the Businesses,
and do not contain the adjustments necessary to conform with GAAP. All material
intercompany receivables, payables or loans have been eliminated from the
Financial Statements.
Section 3.3. Undisclosed Liabilities. Except as described in Schedule
3.3 or the other Schedules hereto, and except as reflected, reserved against or
otherwise disclosed in the Financial Statements, (i) on October 31, 1999, to the
Seller's Knowledge there were no material liabilities or obligations relating to
the Businesses and (ii) since October 31, 1999 Seller has not incurred any
obligations or liabilities relating to the Businesses, other than obligations
and liabilities incurred in the ordinary course of business consistent with past
practice of the Businesses, except for such liabilities or obligations under
clause (ii) above as would not reasonably be expected to have an Adverse Effect
on the Businesses.
Section 3.4. Absence of Certain Changes. Since October 31, 1999, Seller
has carried on the Businesses and conducted its operations and affairs only in
the ordinary and normal course consistent with past practice and there has not
been any (i) Adverse Change in the financial condition, assets, liabilities or
operations of the Businesses (except for any change resulting from general
economic, financial or market conditions, or conditions or circumstances
generally affecting the industry in which the Businesses is conducted), (ii)
material damage, destruction or loss (whether or not covered by insurance)
affecting the Subject Assets, (iii) action taken by Seller which, if taken
between the date hereof and Closing, would be prohibited by Section 5.3 hereof;
or (iv) waiver of rights where such waiver would have an Adverse Change on the
Businesses.
Section 3.5. Properties; Title to Assets. (a) Seller has (or will have
prior to the Closing Date) good and valid title to, or holds by valid and
existing lease or License, all real and tangible personal property constituting
the Subject Assets, free and clear of all Liens except Permitted Liens.
(b) The Subject Assets will, at the Closing Date, include all right,
title and interest in and to all real and personal property, tangible and
intangible, and exclusively or primarily used by Seller in the operation of the
Businesses as conducted on the date hereof, other than (i) the Excluded Assets,
(ii) the Intellectual Property, for which the Intellectual Property Agreement
will be applicable, (iii) goodwill related to Seller's trademarks, service marks
and trade names, including the Trademarks as such term is defined under the
Intellectual Property Agreement, and (iv) Seller's goodwill not associated with
the Businesses.
(c) The Subject Assets that are insurable are, in the reasonable
judgment of Seller, adequately insured by financially sound and reputable
insurers, except to the extent Seller self-insures on the date hereof, against
all risks usually insured against by Persons owning or operating similar assets.
All the Subject Assets have been adequately maintained and repaired for their
continued operation and are in good working condition, subject to normal wear
and tear, except where the failure to maintain and repair would not have an
Adverse Effect on the Businesses.
17
Section 3.6. Real Estate. (a) Schedule 3.6(a) sets forth the legal
description of the Transferred Real Estate, which Seller represents (and the
Title Policy, and Survey shall confirm) includes the land, buildings and
improvements utilized by Seller in the operation of the Businesses at that
location. Seller has the exclusive right to possess, use and occupy (other than
any Person's right to use or occupy the Transferred Real Estate as a result of a
Permitted Lien), subject to the terms on any leases of Leased Transferred Real
Estate. Seller has good and valid title in fee simple indefeasible to all
Transferred Real Estate listed on Schedule 3.6(a) as owned by Seller ("Owned
Transferred Real Estate") free and clear of all Liens of any kind other than
Permitted Liens. Seller has good and valid leasehold title to all Transferred
Real Estate listed on Schedule 3.6(a) as leased by Seller ("Leased Transferred
Real Estate"). Seller has such utilities and such rights of ingress and egress
to and from the Transferred Real Estate which are adequate for the operation of
the Businesses in the ordinary course. Seller represents (and Buyer's Title
Policy shall, to the extent available in Texas, affirmatively insure) that, to
the Seller's Knowledge: (i) the easement and development standards set forth in
exhibits B and C attached to the deeds to the Owned Transferred Real Estate are
not violated in any material respect by the existing uses and improvements; and
(ii) the grantor repurchase option in exhibit D to such deeds is no longer
effective. Schedule 3.6(b) describes any real property interests to be retained
by Seller ("Retained Real Estate").
(b) To Seller's Knowledge, Seller enjoys (and as of the Closing Date,
Buyer will enjoy) peaceful and quiet possession of the Leased Transferred Real
Estate. Buyer has been provided with a true and complete copy of each lease and
all amendments thereto pertaining to any Leased Transferred Real Estate. The
rental amounts set forth in each lease represent the actual rental being paid,
and there are no separate agreements or understanding amending or modifying such
rental amounts.
(c) To Seller's Knowledge, there are no condemnation proceedings or
eminent domain proceedings of any kind pending against the Transferred Real
Estate or any portion thereof, and no notice of any threatened condemnation
proceedings or eminent domain proceedings of any kind against the Transferred
Real Estate Assets or any portion thereof has been received by Seller.
(d) To Seller's Knowledge, all improvements comprising part of the
Owned Transferred Real Estate and the present use and conditions thereof do not
violate: (i) any applicable deed restrictions or applicable covenants,
restrictions or other similar agreements; (ii) any existing site plan approvals,
zoning or subdivision regulations; or (iii) any urban redevelopment plans, as
modified by any duly issued variances.
(e) No permits, licenses or certificates pertaining to the ownership or
operation of all improvements comprising part of the Transferred Real Estate,
other than those that will be transferred with the Transferred Real Estate, are
required by any Governmental Authority having jurisdiction over the Transferred
Real Estate. All improvements located on any parcel of land comprising part of
the Owned Transferred Real Estate are wholly within the lot limits of such
parcel and do not encroach on any adjoining premises, and there are no
encroachments on such parcel by any improvements located on any adjoining
premises.
18
Section 3.7. Litigation; Orders. Except as disclosed in Schedule 3.7,
no Action is pending or, to the best of Seller's Knowledge, threatened against
Seller, in respect of the Subject Assets or the Businesses, seeking unspecified
damages, damages in excess of $100,000 or injunctive relief. Except as described
in Schedule 3.7, as of the date hereof, there are no Orders against Seller or
its properties or business that would, individually or in the aggregate,
reasonably be expected to have an Adverse Effect on the Businesses.
Section 3.8. Material Contracts. Except as described in Schedule 3.8,
the Subject Assets do not include any (a) employment or consulting agreement
requiring payments of base compensation in excess of $100,000 per year, (b)
distributor or manufacturer's representative Contract which is not terminable on
90 days (or less) notice, (c) partnership, joint venture or similar Contract,
(d) note, mortgage, indenture, other obligation, agreement or other instrument
for or relating to any Indebtedness of $500,000 or more, (e) Contracts for the
purchase by Seller or, after giving effect to the Asset Purchase, Buyer of goods
and/or services involving an estimated total future payment or payments in
excess of $500,000, (f) Contracts for the sale by Seller, or, after giving
effect to the Asset Purchase, Buyer of goods and/or services relating to the
Businesses and involving an estimated total future payment or payments in excess
of $500,000, (g) other Contracts entered into other than in the ordinary course
of business, involving an estimated total future payment or payments in excess
of $500,000 (except as to Intellectual Property, as to which the Intellectual
Property Agreement shall control), (h) teaming agreements, proprietary
information, non-disclosure and non-competition covenants that would be binding
on Buyer after the Closing, (i) material leases, licenses, permits, franchises
and Governmental Approvals (except for any relating to Environmental Laws, for
which Section 3.13 is applicable, and except as may relate to Transferred Real
Estate, to which Section 3.6 applies) concerning or relating to the real
property used in the Businesses and the loss of which would have an Adverse
Effect on the Businesses, (j) collective bargaining agreements, except as
terminable on not more than 30 days' notice without penalty or premium, and
other material agreements and arrangements relating to or for the benefit of
sales representatives, distributors, dealers, agents or other independent
contractors except as terminable on not more than 30 days' notice, (k) asset
purchase agreements, stock purchase agreements and other acquisition or
divestiture agreements, including any agreements relating to the sale, lease or
disposal of any assets of the Businesses for consideration in excess of $250,000
(other than sales of inventory in the ordinary course of business), (l)
agreements or arrangements with respect to the representation of the Businesses
in foreign countries except for Seller representatives as to whom such
arrangements are not included in the Businesses, (m) contracts with an
Affiliate, (n) any guarantee of the payment or performance of any Person or any
agreement to indemnify any Person, or act as a surety, or other agreement to be
contingently or secondarily liable for the obligations of any Person other than
(A) the endorsement of checks in the ordinary course of business, and (B)
guarantees or agreements which individually do not exceed $50,000 or in the
aggregate do not exceed $100,000; (o) any outstanding offer to sell goods and
services involving an amount in excess of $1,000,000, or (p) any other material
Contract, in each case, as to which Seller is the obligor or by which the
Subject Assets or the Businesses may be bound.
With respect to all such Contracts, except as described in Schedule
3.8, (i) Seller is not, and to Seller's Knowledge, no other party to any such
Contract is in material breach thereof or material default thereunder; and (ii)
there does not exist under any provision thereof any event that, with the
19
giving of notice or the lapse of time or both, would constitute such a breach or
default, except for such breaches, defaults and events as to which requisite
waivers or consents have been obtained or which would not, individually or in
the aggregate, reasonably be expected to have an Adverse Effect on the
Businesses. Each Contract set forth on Schedule 3.8 is in full force and effect.
Except as set forth on Schedule 3.8, to Seller's Knowledge no outstanding
Government Bid or proposal (or series of related Government Bids and proposals)
was bid, such that if accepted such Government Bid or proposal would reasonably
be expected to generate a net loss to Seller in the performance thereof. Buyer
has been furnished with access to all written Contracts included in the Subject
Assets, together with all amendments, modifications or waivers thereto, with
accurate summaries of oral Contracts.
Section 3.9. Licenses, Approvals, Other Authorizations, Reports, Etc.
(a) Except as described in Schedule 3.9(a), Seller has all Licenses (except for
Licenses under Environmental Laws for which Section 3.13 is applicable, and for
Intellectual Property, as to which the Intellectual Property Agreement shall
control) that are required in order to permit Seller to carry on the Businesses
as it is presently conducted, except where the failure to have such Licenses
would not, individually or in the aggregate, reasonably be expected to have an
Adverse Effect on the Businesses or the Subject Assets. All such Licenses are in
full force and effect, and Seller is in compliance with the terms of such
Licenses, except where the failure of such Licenses to be in full force and
effect, or of Seller to be in compliance with such Licenses would not,
individually or in the aggregate, reasonably be expected to have an Adverse
Effect on the Businesses or the Subject Assets.
(b) Except for the filings, notifications, licenses, permits,
certificates, registrations, consents and approvals described in Schedule 3.9(b)
or which relate solely to the identity of Buyer or the nature of any business
carried on by Buyer, Seller is not required to make any filing with, give any
notice to or to obtain any License of any Governmental Authority as a condition
to the lawful consummation of the transactions contemplated by this Agreement.
Section 3.10. Labor Matters. Except as described in Schedule 3.10,
Seller is not a party to any collective bargaining agreement or other Contract
with any labor union or employee association nor made any written commitments to
or conducted any negotiations with any labor union or employee association with
respect to any future agreements and to Seller's Knowledge there are no current
attempts to organize or establish any labor union or employee association with
respect to any employees of Seller or of any contractor or agency with which
Seller has a contract for the provision to the Businesses of personnel or the
services of personnel, nor is there any certification of any such union with
regard to a bargaining unit. Except as described in Schedule 3.10, since January
1, 1998, (i) there has not occurred or, to the Knowledge of Seller, been
threatened any material strike, slowdown, picketing, work stoppage, concerted
refusal to work overtime or other similar labor activity with respect to any
Employees; and (ii) there are no material grievances currently subject to any
grievance procedure, arbitration or litigation and there is no representation
petition pending or, to the Knowledge of Seller, threatened with respect to any
Employee.
Section 3.11. Executive Management and Employees. Schedule 3.11(a)
lists all Executive Management of each of the Businesses. Seller has provided
Buyer a complete and accurate list of the names of all Employees as of October
31, 1999. Schedule 3.11(b) lists all Employees who have been
20
absent continually from work for a period in excess of one month, as well as the
reason for their absence.
Section 3.12. Compliance with Laws. Except as described in Schedule
3.12, the conduct of the Businesses by Seller complies in all material respects
with all Laws and Orders applicable thereto. The various projects for which the
Businesses are contractors for the U.S. Government and its agencies are
conducted, to the Knowledge of Executive Management, in accordance with the
laws, rules and regulations applicable to government contractors, except for
such violations or failures to comply, if any, as would not reasonably be
expected to have an Adverse Effect on the Businesses. Neither the Executive
Management of the Businesses nor to their Knowledge any agent or representative
of Seller or the Businesses has offered, paid, promised to pay or authorized the
payments of any money, or offer, gift, promise to give or authorization of the
giving of anything of value to any person, nor does the Seller know of any such
act by the Businesses, in violation of the FCPA.
Section 3.13. Environmental Matters. Except as set forth on Schedule
3.13:
(a) Seller, in its operation of the Businesses, to the Knowledge of
Executive Management, is in compliance with all applicable Environmental Laws
except where the failure to be in compliance would not, individually or in the
aggregate, reasonably be expected to have an Adverse Effect on the Subject
Assets.
(b) Seller has or has applied for all Licenses required under
Environmental Laws for the operation of the Businesses as presently conducted
(the "Environmental Permits") and there are no violations, and no pending, or,
to the Knowledge of Seller, threatened, investigations or proceedings with
respect to such Environmental Permits except where the failure to have such
Environmental Permits or where the violation, investigation or proceeding
relating thereto would not, individually or in the aggregate, reasonably be
expected to have an Adverse Effect on the Businesses.
(c) Since December, 1997, no written notice, notification, demand,
request for information, citation, summons, complaint or Order has been received
by, is pending, or, to the Knowledge of Seller, threatened, by any Person
against Seller in connection with the Businesses nor has any material penalty
been assessed against Seller for any alleged violation of any Environmental Law
or liability thereunder, other than where such notice, notification, demand,
request for information, citation, summons, complaint or Order has been fully
resolved, or where resolution would not, individually or in the aggregate,
reasonably be expected to have an Adverse Effect on the Businesses or the
Subject Assets.
Section 3.14. Employee Benefit Plans and Related Matters.
(a) Schedule 3.14(a) lists each material pension, retirement,
profit-sharing, deferred compensation, bonus, phantom stock, restricted stock
plan, stock option plan, stock purchase plan, deferred compensation arrangement,
other incentive plan, severance pay plan or policy, supplemental executive
retirement plan or policy, or other employee benefit program, arrangement,
agreement or understanding, or medical, vision, dental or other health plan, or
life insurance or disability plan, or
21
any other employee benefit plan, including any "employee benefit plan" as
defined in Section 3(3) of ERISA, in which Seller contributes or is a party or
is bound and under which it may have liability and under which employees or
former employees of the Assets of the business being purchased by Buyer (or
their beneficiaries) are eligible to participate or derive a benefit ("Employee
Benefit Plans"). Seller has made available to Buyer true, correct and complete
copies of all documents, summary plan descriptions, insurance contracts, third
party administration contracts and all other documentation created to embody all
Employee Benefit Plans, plus descriptions of any Employee Benefit Plans that
have not been reduced to writing;
(b) No material liability has been or is expected to be incurred by
Seller under or pursuant to the Code or Title I or IV of ERISA or the penalty,
excise tax or joint and several liability provisions of the code or ERISA
relating to Employee Benefit Plans which could have any adverse impact upon
Buyer;
(c) Except as disclosed on Schedule 3.14(c) no Employee Benefit Plan is
a "multiple employer plan" within the meaning of Section 413(c) of the Code, or
a defined benefit plan within the meaning of Section 3(35) of ERISA;
(d) Each of the Employee Benefit Plans listed in Schedule 3.14(a) is
and has at all times been in compliance in all material respects with all
applicable provisions of ERISA, the Code and other applicable Law;
(e) Except as disclosed on Schedule 3.14(e), each Employee Benefit Plan
that is an "employee pension benefit plan" as defined in Section 3(2) of ERISA
(each a "Pension Plan") which is intended to meet the requirements of Section
401(a) of the Code now meet and since their inception have met, the requirements
for qualification under Section 401(a) of the Code and nothing has occurred
which would adversely affect the qualified status of any such Pension Plan other
than such occurrences as may be corrected without resulting in an Adverse
effect. Except as disclosed on Schedule 3.14(e), the IRS has issued a favorable
determination letter with respect to the qualification under the Code of each
Pension Plan and the IRS has not taken any action to revoke any such letter.
Except as disclosed on Schedule 3.14(e), nothing has occurred since the date of
the most recent IRS favorable determination letter which would reasonably be
expected to cause the loss of such qualification or the imposition of any
material liability or penalty under the Code;
(f) Each fiduciary and every plan official of each Employee Benefit
Plan is bonded to the extent required by Section 412 of ERISA. Except as
disclosed on Schedule 3.14(f), those sections of all annual reports heretofore
filed with the IRS, the Department of Labor and the Pension Benefit Guaranty
Corporation by or on behalf of every Employee Benefit Plan which were required
to be certified were only certified without qualification by the accountants or
actuaries of such Employee Benefit Plan;
(g) Except as specifically set forth in Schedule 3.14(g), the execution
and performance of the transactions contemplated by this Agreement will not
(either alone or upon the occurrence of any additional or subsequent event)
constitute an event under any Employee Benefit Plan or individual agreement that
will or may result in any payment (whether of severance pay or otherwise),
22
acceleration, vesting or increase in material benefits with respect to any
employee, former employee, consultant, agent or director of Seller. No payment
will be made by Seller to any employee, former employee, director, consultant or
agent of Seller which will or could be characterized as an "excess parachute
payment" within the meaning of Section 280G(b)(1) of the Code;
(h) Except as disclosed on Schedule 3.14(h), at no time has Seller or
any ERISA Affiliate contributed to, been required to contribute to, or incurred
any withdrawal liability (within the meaning of Section 4201 of ERISA) with
respect to any Employee Benefit Plan which is a multi-employer plan as defined
in Section 3(37) of ERISA;
(i) Each Employee Benefit Plan that is a "group health plan" (within
the meaning of Section 4980B of the Code) maintained by Seller or any ERISA
Affiliate has been administered in material compliance with the coverage
continuation requirements contained in the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended and as provided under Section 4980B of
the Code and any regulations promulgated or proposed under the Code;
(j) With respect to all Employee Benefit Plans which are funded, or are
required by applicable Law to be funded, except as disclosed on Schedule
3.14(j), the present value of all accrued benefits (vested and non vested) of
each such Employee Benefit Plan as of the Closing Date, will not exceed the fair
market value of the assets of each such Employee Benefit Plan as of the Closing
Date;
(k) Seller and ERISA Affiliate have made all contributions required to
be made to each Employee Benefit Plan under the terms of the plan and applicable
Law. No prohibited transaction (as defined in Section 4975 of the Code or
Section 406 of ERISA) has occurred with respect to any Employee Benefit Plan
listed, which could subject any Employee Benefit Plan or any related trust,
Seller, Buyer, any ERISA Affiliate, or any director or employee of any of them
to any material tax or penalty imposed under Section 4975 of the Code or Section
502(i) or 502(1) of ERISA, either directly or indirectly, and whether by way of
indemnity or otherwise; and
(l) Except as disclosed on Schedule 3.14(l), Seller does not maintain,
sponsor or contribute to any plan or program providing retiree medical or life
insurance benefits, except to the extent required by applicable Law.
Section 3.15. Disclaimer Regarding Assets. Except as otherwise
expressly provided in this Agreement or any Collateral Document, Buyer
acknowledges that Seller has not made, and Seller hereby expressly disclaims and
negates, any representation or warranty, express or implied, relating to the
condition of any immovable property, movable property, equipment, inventory,
machinery, fixtures and personal property constituting part of the Subject
Assets (including, without limitation, (i) any implied or express warranty of
merchantability, (ii) any implied or express warranty of fitness for a
particular purpose, (iii) any implied or express warranty of conformity to
models or samples of materials, (iv) any rights of Buyer under appropriate
statutes to claim diminution of consideration or return of the Purchase Price,
(v) any implied or express warranty of freedom from vices or defects, whether
known or unknown, (vi) any implied or express warranty of freedom from patent or
trademark infringement, (vii) any and all implied warranties existing under
applicable law now or
23
hereafter in effect, and (viii) any implied or express warranty regarding
environmental condition) it being the express intention of Buyer and Seller that
(except to the extent expressly provided herein) the immovable property, movable
property, equipment, inventory, machinery, fixtures and personal property shall
be acquired by or conveyed to Buyer as is and in their present condition and
state of repair and Buyer represents to Seller that Buyer has made or caused to
be made such inspections with respect to the immovable property, movable
property, equipment, inventory, machinery, fixtures and personal property as
Buyer deems appropriate (including, without limitation, the environmental
condition thereof) and (except to the extent provided to the contrary herein)
Buyer will accept the immovable property, movable property, equipment,
inventory, machinery, fixtures and personal property as is, in their present
condition and state of repair.
Section 3.16. Brokers, Finders. Other than First Union Securities, Inc.
(and the Bowles Hollowell Conner division of First Union Capital Markets Corp.),
the fees and expenses of which will be paid by Seller, Seller has not employed
nor is it subject to any valid claim of, any broker, finder, consultant or other
intermediary in connection with the Asset Purchase who might be entitled to a
fee or commission from Buyer in connection therewith.
Section 3.17. No Implied Representation. Notwithstanding anything
contained in this Agreement, it is the explicit intent of each party hereto that
Seller is making no representation or warranty whatsoever, express or implied,
beyond those expressly given in this Agreement or the Collateral Documents,
including any implied warranty or representation as to condition,
merchantability, or suitability as to any of the Subject Assets and it is
understood that, except as expressly warranted in this Agreement or the
Collateral Documents, Buyer takes the Subject Assets as is and where is. It is
understood that any cost estimates, projections or other predictions contained
or referred to in the Schedules or in the offering materials that have been
provided to Buyer are not and shall not be deemed to be representations or
warranties of Seller.
Section 3.18. Prohibited Transactions. To the Knowledge of Seller, none
of Seller, its Affiliates or any of their respective employees, officers or
other representatives has offered, paid, or agreed to pay any Person, including
any Governmental Authority, directly or indirectly, any money or any other thing
of value for the purpose of, or with the intent of obtaining or retaining any
business included in the Businesses, other than pursuant to the Contracts
included in the Subject Assets.
Section 3.19. Insurance. Seller has insured the Subject Assets against
loss or damage in the amount, scope and coverage usually and customarily
obtained in the industry in which the Businesses operates, and such insurance
coverage will be continued in full force and effect to and including the Closing
Date. Schedule 3.19 sets out all insurance policies (specifying the insurer, the
amount of coverage, the type of insurance, the policy number and any pending
claims thereunder) maintained by Seller on the Subject Assets as of the date
hereof. Seller is not in default in any material respect with regard to any of
the provisions contained in any such insurance policy and has not failed to give
any notice or present any claim under any such insurance policy in a due and
timely fashion.
24
Section 3.20. Year 2000. Seller has adopted and implemented a
commercially reasonable plan to investigate and correct any "year 2000 problems"
associated with (i) the operation of the Businesses; and (ii) the products
manufactured and distributed by the Businesses. Seller, however, does not
represent or warrant that this plan will find and correct all "year 2000
problems" which may arise in connection with the operation of the Businesses or
the products manufactured thereby. Each of the computer-based systems of Seller
used in connection with the Businesses, including its information data bases,
accounting systems and data processing systems, as well as all other computer
software or hardware owned or used by Seller in connection with the Businesses
and each of the Subject Assets which are computer based, if properly operated
and maintained, (a) records, stores, processes, calculates, presents and, where
appropriate, inserts correctly entered and formatted time and accurate dates and
calculations for calendar dates falling on or after (and if applicable, spans of
time including) January 1, 2000, and records, stores, processes, calculates and
presents correctly entered and formatted information or data dependent on or
relating to such dates with the same functionality, data integrity and
performance, as such item records, stores, processes, calculates and presents
calendar dates on or before December 31, 1999, and in such fashion as to respond
to two-digit date input in a way that eliminates all ambiguities as to the
century of concern, and treats the year 2000 as a leap-year and correctly and
accurately records and processes data and information with respect thereto; (b)
loses no functionality with respect to the introduction of records, including
back-up and archived information or data, containing dates falling on or after
January 1, 2000; and (c) is interoperable with other software and hardware that
may deliver records to such computer-based systems of Seller and computer-based
Subject Assets or receive records from such computer-based systems of Seller and
computer-based Subject Assets, or interact with such computer-based systems of
Seller and computer-based Subject Assets, provided that such other software or
hardware complies with the foregoing clauses (a) and (b) and is otherwise
functional. Seller has made inquiries of each of its material suppliers used in
connection with the Businesses regarding the Year 2000 readiness of all
computer-based systems, software and hardware supplied to it by such suppliers,
and has not received any notice that such systems, software and hardware will
not be Year 2000 ready.
Section 3.21. Government Contracts.
(a) To the Knowledge of Executive Management, except as set forth in
Schedule 3.21(a), (i) none of the Employees, consultants or agents with respect
to the Businesses is or during the last three (3) years has been (except as to
routine security investigations) under administrative, civil or criminal
investigation, indictment or information by any Governmental Authority, (ii)
there is not any pending audit or investigation of the Businesses or any of
their respective Employees or representatives with respect to the Businesses
resulting in any Adverse finding with respect to any alleged irregularity,
misstatement or omission arising under or relating to a Government Contract or
Government Bid; and (iii) during the last three years, none of the Businesses
has made a Government Disclosure with respect to any alleged irregularity,
misstatement or omission arising under or relating to a Government Contract or
Government Bid included in the Subject Assets or relating to the Businesses, in
each case of (i) through (iii), above other than routine inquiries, audits and
reconciliations such as do not constitute an Adverse Change. Except as set forth
in Schedule 3.21(a), to the Knowledge of Executive Management, neither the
Businesses or their Employees has made misstatements or omissions (other than
may have been innocent and immaterial) arising under or
25
relating to any Government Disclosure that has led or is expected to lead,
either before or after the Closing Date, to any of the consequences set forth in
clause (i) or (ii) of the immediately preceding sentence or any other material
damage, penalty assessment, recoupment of payment or disallowance of cost.
(b) Except as set forth in Schedule 3.21(b), to the Knowledge of
Executive Management, there are (i) no outstanding claims against either by the
U.S. Government or by any non-U.S. government or by any prime contractor,
subcontractor or vendor arising under or relating to any Government Contract or
Government Bid included in the Subject Assets or relating to the Businesses and
(ii) no disputes between the Businesses and the U.S. Government or any non-U.S.
Government under the Contract Disputes Act or any other federal statute or
between the Businesses and any prime contractor, subcontractor or vendor arising
under or relating to any such Government Contract or Government Bid included in
the Subject Assets or relating to the Businesses, except such as in each case
are not reasonably expected to have an Adverse Effect on the Businesses.
(c) Except as set forth in Schedule 3.21(c), neither the Businesses nor
any of their respective Employees, consultants or agents is (or during the last
three years has been) suspended or debarred from doing business with the U.S.
Government or any non-U.S. government or is (or during such period was) the
subject of a finding of non-responsibility or ineligibility for U.S. Government
or non-U.S. government contracting.
(d) To Seller's Knowledge, no misstatement contained in schedules of
Government-furnished equipment, provided to a Governmental Authority under any
Government Contract, are reasonably expected to have an Adverse Effect.
(e) Except as set forth on Schedule 3.21(e), the rates and rate
schedules submitted to the U.S. Government with respect to the Government
Contracts included in the Subject Assets have been closed for all years prior to
1996.
Section 3.22. Government Furnished Equipment. Schedule 3.22
incorporates by reference to their location the most recent schedules delivered
to the U.S. Government or any non-U.S. government which identifies by
description or by inventory number certain equipment and fixtures loaned, bailed
or otherwise furnished to or held by the Businesses by or on behalf of the U.S.
Government or any non-U.S. government. Such schedules are maintained in the
files of the respective projects and were accurate and complete and, as of the
Closing Date, would contain only those additions and omit only those deletions
of equipment and fixtures that have occurred in the ordinary course of business,
except for such inaccuracies that could not reasonably be expected to Adversely
Affect the Businesses, any of the Subject Assets, or Seller.
Section 3.23. Absence of Changes. Except as set forth in Schedule 3.23,
or the other Schedules hereto, since October 31, 1999, Seller has not:
(a) suffered any material Adverse Effect in respect of the Subject
Assets or the Business; and
26
(b) operated the Businesses other than in the ordinary course.
Section 3.24. Schedules. The inclusion of any item on any Schedule to
this Agreement shall not be construed as an indication that such item is
material in any respect.
Article IV.
Representations and Warranties of Buyer
Buyer hereby represents and warrants to Seller as follows:
Section 4.1. Incorporation; Authorization; Etc. Buyer is a corporation
duly incorporated, validly existing and in good standing under the laws of
Delaware. Buyer has full corporate power to execute and deliver this Agreement
and the Collateral Documents, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and the Collateral Documents, the
performance of Buyer's obligations hereunder and thereunder and the consummation
of the transactions contemplated hereby and thereby have been duly and validly
authorized by the Board of Directors of Buyer and no other corporate proceedings
or actions on the part of Buyer, its Board of Directors or stockholders are
necessary therefor. The execution, delivery and performance of this Agreement
and the Collateral Documents will not (i) violate any provision of the charter
or bylaws or similar organizational instrument of Buyer or any of its
Subsidiaries, (ii) violate any provision of, or be an event that is (or with the
passage of time will result in) a violation of, or result in the acceleration of
or entitle any party to accelerate (whether after the giving of notice or lapse
of time or both) any obligation under, or result in the imposition of any lien
upon or the creation of a security interest in any of Buyer's or any of its
Subsidiaries' assets or properties pursuant to any Contract or Order to which
Buyer or any of its Subsidiaries is a party or by which Buyer or any of its
Subsidiaries is bound, or (iii) violate or conflict with any other material
restriction of any kind or character to which Buyer or any of its Subsidiaries
is subject, that, in the case of either of clauses (ii) or (iii), would,
individually or in the aggregate, reasonably be expected to have an Adverse
Effect on Buyer or Buyer and its subsidiaries, taken as a whole. This Agreement
has been, and upon Closing the Collateral Documents will be, duly executed and
delivered by Buyer, and, assuming the due execution hereof and thereof by
Seller, this Agreement constitutes, and the Collateral Documents will
constitute, the legal, valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its respective terms.
Section 4.2. Brokers, Finders, Etc. Buyer has not employed, and is not
subject to the valid claim of, any broker, finder, consultant or other
intermediary in connection with the transactions contemplated by this Agreement
who might be entitled to a fee or commission from Seller in connection with such
transactions.
Section 4.3. Consents, Approvals, Other Authorizations. Other than
filings under the HSR Act, no filing, notice to or authorization, consent or
approval of, any Governmental Authority is required to be made, filed, given or
obtained by Buyer or any of its Affiliates, in connection with the consummation
of the Asset Purchase except for (i) those that become applicable solely as a
result of the specific regulatory status of Seller, or (ii) the failure to make,
file, give or obtain which would not, individually or in the aggregate,
reasonably be expected to have an Adverse Effect on Buyer.
27
Section 4.4. Acquisition of Subject Assets and Operation of the
Businesses for Investment. Buyer has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of
its purchase of the Businesses and the Subject Assets, its assumption of the
Assumed Liabilities and its operation of the Businesses.
Section 4.5. Financial Capability. Buyer has all requisite financial
capacity, and without limitation has, or has received firm written commitments
from financially responsible third parties to obtain, all funds necessary to
consummate the Asset Purchase and to pay related fees and expenses.
Section 4.6. No Financing Contingency. Buyer's financial condition is
fairly reflected in its most recent Report on Form 10-Q, and Buyer's obligations
under this Agreement are not subject to any contingency of financing.
Article V.
Covenants of Seller and Buyer
Section 5.1. Investigation of Business; Access to Properties, Records.
(a) Seller shall afford to representatives of Buyer reasonable access to the
offices, plants, properties, books and records, employees and other
representatives of Seller during normal business hours, in order that Buyer may
have full opportunity to make such investigations as it desires of the affairs
of Seller to the extent such affairs relate to the Businesses, the Subject
Assets and the Assumed Liabilities; provided, however, that such investigation
shall not unreasonably disrupt the personnel and operations of Seller. At
Buyer's request and expense, Seller shall cooperate with Buyer in arranging any
meetings as Buyer may reasonably request with (i) Employees; (ii) customers,
suppliers, distributors or others who have a business relationship with Seller
in respect of the Businesses; and (iii) auditors and accountants engaged to
provide services to Seller who have knowledge of matters relating to the
Businesses or the Subject Assets. Seller shall furnish, or cause to be
furnished, to Buyer and its representatives financial and operating data and
other information that is available or can be compiled without reasonable
disruption of Seller's business relating to the Businesses as Buyer shall from
time to time reasonably request. If, in the course of any investigation pursuant
to this Section 5.1, any of Buyer's representatives listed on Schedule 10.2
hereof has actual knowledge of any material breach of any representation or
warranty contained in this Agreement or any circumstances or conditions that
upon Closing would constitute such a breach, Buyer covenants that it will inform
Seller. Any failure of Buyer to inform Seller pursuant to the next preceding
sentence will not affect any indemnification claim of Buyer except to the extent
provided in Section 10.2(b).
(b) Any information provided to Buyer or its representatives pursuant
to this Agreement shall be held by Buyer and its representatives in accordance
with, and shall be subject to the terms of, the Confidentiality Agreement dated
October 1, 1999 by and between Seller and Buyer, which is hereby incorporated in
this Agreement as though fully set forth herein. Upon the Closing, such
Confidentiality Agreement shall terminate automatically without further action
by the parties.
(c) Buyer agrees to (i) maintain the books and records of the
Businesses, consistent with past practice, and not to destroy or dispose of any
thereof for a period of six (6) years from the Closing
28
Date or such longer time as may be required by Law, and (ii) following the
Closing Date to afford Seller, its accountants and counsel, during normal
business hours, upon reasonable request, reasonable access to such books,
records and other data and to the Transferred Employees to the extent that such
access may be requested for responding to Governmental Authorities, defending or
prosecuting litigation and preparation of Income Tax Returns and other tax
filings (in case of (ii) Seller will reimburse Buyer's actual, out-of-pocket
cost). Buyer shall have the same rights, and Seller the same obligations, as are
set forth above in this Section 5.1(c), with respect to any books, records and
other data or personnel of Seller pertaining to the Businesses, the Subject
Assets or to the Assumed Liabilities that are retained by Seller, with the
exception of Returns relating to Taxes that are not the responsibility of Buyer.
Section 5.2. Commercially Reasonable Efforts; Obtaining Consents. (a)
Subject to the terms and conditions herein provided, each of Seller and Buyer
agrees to use commercially reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective as promptly as practicable, the
transactions contemplated by this Agreement and to cooperate with the other in
connection with the foregoing, including commercially reasonable efforts (i) to
obtain all necessary waivers, consents and approvals from other parties to
material Contracts and Licenses, (ii) to obtain all consents, approvals and
authorizations that are required to be obtained under any Law including without
limitation those under the HSR Act, (iii) to lift or rescind any Order adversely
affecting the ability of the parties hereto to consummate the Asset Purchase,
(iv) to effect all necessary registrations and filings including filings under
the HSR Act and submissions of information requested by Governmental Authorities
(it being understood by the parties that the filings required of such party or
any of its subsidiaries or Affiliates under the HSR Act with respect to the
transactions contemplated by this Agreement shall be filed promptly following
the date of this Agreement), and (v) to fulfill all conditions to this Agreement
(it being understood that such efforts shall not include any requirement of
either party to expend material sums of money, divest any assets or businesses,
or grant any material financial or other accommodation). Seller and Buyer shall
furnish to each other such information and assistance as the other may
reasonably request in connection with their preparation of any such required
filings or submissions. Seller and Buyer further covenant and agree, with
respect to a threatened or pending Order or Law that would adversely affect the
ability of the parties hereto to consummate the Asset Purchase, to use their
respective commercially reasonable efforts to prevent the entry, enactment or
promulgation thereof, as the case may be (it being understood that such efforts
shall not include any requirement of Seller to expend material sums of money,
divest any assets or businesses, or grant any material financial or other
accommodation).
(b) Seller and Buyer shall cooperate to obtain third party consents to
the assignment or novation of Contracts, including the software licenses listed
on Schedule 3.1(e), using commercially reasonable efforts to minimize the costs
to both Buyer and Seller.
(c) Buyer agrees to use commercially reasonable efforts to resolve such
objections, if any, as the Antitrust Division, the FTC or any other Governmental
Authority may assert with respect to the Asset Purchase under any applicable law
or regulation prior to the expiration of any applicable waiting periods under
the HSR Act; provided, however, that Buyer shall not be required (i) to divest
assets or businesses; or (ii) to provide any undertakings or comply with any
condition that, in its
29
good faith judgment, would diminish Buyer's rights under this Agreement, or
would materially alter the benefits to Buyer contemplated by this Agreement.
(d) In case at any time after the Closing any further action is
reasonably necessary or desirable to carry out the purposes of this Section 5.2,
the proper officers and/or directors of Buyer or Seller, as the case may be,
including, to the extent applicable, any Entity designated to hold the Subject
Assets, shall take all such necessary action.
(e) Either party hereto shall promptly inform the other of any material
communication from the Antitrust Division, the FTC or any other Governmental
Authority regarding any of the transactions contemplated hereby. If either party
or any Affiliate thereof receives a request for additional information or
documentary material from any such Governmental Authority with respect to the
transactions contemplated hereby, then such party will endeavor in good faith to
make, or cause to be made, as soon as reasonably practicable and after
consultation with the other party, an appropriate response in compliance with
such request. Buyer will advise Seller promptly in respect of any
understandings, undertakings or agreements (oral or written) which Buyer
proposes to make or enter into with the Antitrust Division, the FTC or any other
Governmental Authority in connection with the transactions contemplated hereby.
Section 5.3. Conduct of the Businesses. From the date hereof through
the Closing, except as described in Schedule 5.3 or as otherwise expressly
provided for in this Agreement and, except as consented to or approved by Buyer
in writing, Seller covenants and agrees that, with respect to the Businesses:
(a) Seller shall conduct the Businesses in the ordinary and usual
course in all material respects in accordance with past practices;
(b) except as otherwise provided for in this Agreement, Seller shall
not (i) assume, issue, incur or guarantee any obligation for Indebtedness, any
debt securities or warrants or rights to acquire any debt securities, enter into
any "keep well" or other arrangement to maintain the financial statement
condition of any Person or enter into any Contract having the economic effect on
the Businesses of any of the foregoing, in any case, which would constitute, or
increase Buyer's obligation respecting, an Assumed Liability, (ii) cancel or
compromise, except in the ordinary course of business consistent with past
practice, any debts owed to it that would constitute, or decrease the value of
Buyer's right respecting, a Subject Asset or (iii) waive or release any rights
of material value relating to the Subject Assets or (iv) make any Tax election,
make or change any method of accounting with respect to Taxes, or settle or
compromise any proceeding relating to any material Tax regarding the Businesses;
(c) except in the ordinary course of business and consistent with past
practice, Seller shall not (i) sell, transfer, distribute as a dividend in kind
or otherwise dispose of any Subject Assets (other than inventory in the ordinary
course of business consistent with past practice), (ii) create or permit to
exist any new Lien on any Subject Asset (other than a Permitted Lien), or (iii)
enter into any joint venture, partnership or other similar arrangement or form
any other new material arrangement for the conduct of the Businesses;
30
(d) except for increases in the base compensation for employees who are
not officers of the Businesses or performing the duties of officers, in the
ordinary course of business or as required by Law, Contract or the terms of any
Plan existing on the date hereof, Seller shall not hereafter (i) increase the
base compensation of, or enter into any new bonus or incentive agreement or
arrangement not consistent with Seller's policies respecting such agreements
with, any of the Employees; (ii) pay or agree to pay any pension, retirement
allowance or other employee benefit to any Employee, whether past or present not
otherwise required by Contract or under any Plan in effect on the date hereof;
(iii) enter into any new, or amend any existing, employment, severance,
consulting or other compensation agreement with any Employee; or (iv) commit
itself to any pension, profit sharing, deferred compensation, group insurance,
severance pay, retirement or other Plan, fund or similar arrangement in addition
to those in effect on the date hereof and intended exclusively for the
Employees, or amend or commit itself to amend any of such Plans or similar plans
intended for the benefit of Seller's employees generally if the effect thereof
would exclusively benefit the Employees; provided, however, that retention
agreements, bonuses, severance payments or other incentives committed to or to
be committed to in connection with or in contemplation of the Asset Purchase or
a similar transaction as described in Schedule 5.3 may be paid by Seller at or
prior to Closing;
(e) Seller shall maintain its books, accounts and records relating to
the Businesses in the usual, regular and ordinary manner, on a basis consistent
with past practice, and comply with and perform in all material respects all
Laws and Contracts and other obligations applicable to it or the Businesses;
(f) Seller shall maintain in full force and effect insurance with
respect to the Subject Assets, the Employees and the Business consistent with
past practices;
(g) Seller shall not enter into any single, new Contract which is not
terminable without penalty by Seller following Closing which involves
consideration in excess of $2,000,000.00;
(h) Seller shall not (i) make any prepayment or other payment on or in
respect of indebtedness unless required by the terms thereof on the date of this
Agreement or (ii) enter into or engage in any transaction with any Affiliate
except as is required by an existing agreement and such additional arrangements
as shall occur in the ordinary course of business, all as set forth or
summarized in Schedule 5.3;
(i) Seller shall not acquire or agree to acquire in any manner any
business or any Entity;
(j) Seller shall not acquire or agree to acquire any assets that are
material, individually or in the aggregate, to the Businesses, or make or agree
to make any capital expenditures except as may be necessary to maintain and
protect that Subject Assets and which under GAAP are treated as capital
expenditures; (provided that the aggregate amount of capital expenditures
permitted by this exception shall not exceed $50,000 for any individual
expenditure and $250,000 in the aggregate) other than as indicated on Schedule
5.3;
31
(k) Seller shall not pay, discharge or satisfy any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), except for the payment, discharge or satisfaction, of liabilities or
obligations in the ordinary course of business consistent with past practice or
in accordance with their terms as in effect on the date hereof, or transfer any
rights of material value or modify or change in any document, other than in the
ordinary course of business consistent with past practice;
(l) Seller shall not change any material accounting principle;
(m) Seller shall not make any changes in Seller's methods, practices or
procedures relating to accounts receivable, accounts payable or credit policies
(including without limitation extending its trade receivables or making any
changes to its receivables write-off policies or changing its payables cycle
policies); and
(n) Seller shall not, and shall not permit any of its Affiliates to,
authorize any of, or commit or agree to take any of the foregoing actions in
Sections 5.3(b)-(m).
Section 5.4. Preservation of Business. From the date hereof to the
Closing Date, subject to the terms and conditions of this Agreement, Seller
shall use commercially reasonable efforts (i) to preserve the Subject Assets and
the Businesses intact, (ii) to keep available to Buyer the services of the
Employees, and (iii) to preserve the good will of customers and others having
business relations with Seller to the extent such business relations relate to
the Subject Assets.
Section 5.5. Further Assurances. Seller and Buyer agree that, from time
to time, whether before, at or after the Closing Date, each of them will execute
and deliver such further instruments of conveyance and transfer and take such
other action as may be reasonably required or desirable to carry out the
purposes and intent of this Agreement, including (i) allocating rights and
obligations under Contracts and other arrangements, if any, relating to business
of Seller and its Affiliates (other than the Businesses), on the one hand, and
relating to the Businesses on the other, and (ii) allocating rights and
obligations under Contracts and other arrangements, if any, relating to the
Assumed Liabilities. In case at any time after the Closing Date, any further
action is reasonably necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party to this Agreement
shall take all such necessary or desirable action.
Section 5.6. Public Announcements. Seller and Buyer will consult with
each other before issuing, or permitting any agent or Affiliate to issue, any
press releases or otherwise making or permitting any agent or Affiliate to make,
any public statements with respect to this Agreement and the transactions
contemplated hereby, except as may be required by applicable Law or any listing
agreement with any securities exchange.
Section 5.7. Services. Buyer and Seller shall negotiate in good faith
on a "Transition Services Agreement" providing for the provision of the services
summarized on Appendix III hereto or otherwise reasonably agreed to by Buyer and
Seller as necessary for the continued operation of the Businesses, at Seller's
cost (including general and administrative overhead allocation).
32
Section 5.8. Other Offers. From the date hereof until the termination
of this Agreement in accordance with Article XI hereof, Seller will not, and
will take reasonable actions to the end that its Affiliates will not, and will
not authorize or permit any of their respective officers, directors or employees
or any investment bankers, financial advisors, attorneys, accountants or other
representatives (collectively, "Seller's Agents") to, directly or indirectly,
(i) take any action to solicit, initiate or encourage or take any other action
to facilitate (including by way of furnishing information or assistance) any
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to any Acquisition Proposal (as hereinafter defined), (ii)
enter into discussions or negotiate with any person or entity in furtherance of
such inquiries or to obtain an Acquisition Proposal or (iii) authorize or permit
any of the Seller's Agents to take any of the foregoing prohibited actions. The
term "Acquisition Proposal" means any offer or proposal for, or any indication
of interest in, the acquisition of any material portion of the Subject Assets or
the Businesses, other than the transactions contemplated by this Agreement.
Seller will not enter into any negotiations with respect to any Acquisition
Proposal by any Person other than the Buyer.
Section 5.9. Non-Compete and Non-Solicitation. (a) Prior to January 1,
2004, Seller will not, and will cause its Affiliates not to, directly or
indirectly, develop, manufacture, sell, distribute, support or provide products
and services that compete with the types of products and services developed,
manufactured, sold, distributed, supported or serviced by the Businesses
(including their predecessors) on or prior to the Closing Date; provided,
however, that this provision will not restrict or prevent other units of Seller
from selling the types of products or providing services which they sell or
provide on the date hereof.
(b) Seller agrees that for a period of twenty-four (24) months from and
after the date hereof it shall not, and it shall cause each of its Affiliates
not to, without Buyer's prior written consent, employ or solicit for employment
any Person that it or they know to be employed by Buyer, (or any of its
Affiliates) in the Businesses (at that time) and in connection with the
Businesses, unless such Person's employment with Buyer or its Affiliates was
terminated by Buyer or its Affiliates prior to such action by Seller, or any of
its Affiliates; provided nothing herein shall apply to general advertisements or
solicitation not directed at the Employees.
Section 5.10. Notices of Certain Events. Each of Seller and Buyer shall
promptly notify the other of:
(a) any notice or other communication of which either party has
knowledge from any Person alleging that the consent of such Person is or may be
required in connection with the transactions contemplated by this Agreement;
(b) any Actions commenced, or to the knowledge of either party,
threatened against, relating to, involving or otherwise affecting, the Subject
Assets or the Businesses (including the Transferred Real Estate) which, if
pending on the date of this Agreement, would have been required to have been
disclosed pursuant to Articles III, IV or V or which relate to the consummation
of the transactions contemplated by this Agreement; and
33
(c) any Adverse Change in the business, assets, condition (financial
otherwise), operations of the Businesses or the Subject Assets or of any event
that would materially impair Seller's ability to perform its obligations under
this Agreement.
Section 5.11. No Inconsistent Action. The parties hereto shall not take
any action inconsistent with their obligations under this Agreement or which
could materially hinder or delay the consummation of the transactions
contemplated by this Agreement. None of the parties hereto shall take or omit to
take any action that could result in any of their respective representations and
warranties not being true in all material respects on the Closing Date.
Section 5.12. Post-Closing Confidentiality. The parties agree that, for
a period of ten (10) years following the Closing Date: (a) Seller will not, and
will cause its Affiliates not to, disclose, give, use, or otherwise divulge any
Buyer's confidential or secret information, including with respect to the
Businesses or the Subject Assets, and (b) Buyer will not, and will cause its
Affiliates not to, disclose, give, use or otherwise divulge any of Seller's
confidential information not related to the Businesses or the Subject Assets,
including in each case but not limited to any technology, process, trade
secrets, know-how, other intellectual property rights, strategies, financial
statements or other financial information not otherwise publicly available,
forecasts, operations, business plans, prices, discounts, products, product
specifications, designs, plans, data or ideas). Notwithstanding the foregoing, a
party may disclose such information (i) if compelled to disclose the same by
judicial or administrative process or by other requirements of applicable Law or
of any national securities exchange (but subject to the following provisions of
this Section), (ii) if the same currently is, or hereafter is, in the public
domain through no fault of such party, (iii) if the same is later acquired by
such party from another source and such party is not aware that such source is
under an obligation to another Person to keep such information confidential, or
(iv) if the same is independently developed by Affiliates of such party without
any knowledge thereof. If such party or any of its Affiliates (the "Disclosing
Party") is requested or required (by oral questions, interrogatories, requests
for information or documents in legal proceedings, subpoena, civil investigative
demand or other similar process) to disclose any such information, the
Disclosing Party shall provide the other party with prompt written notice of any
such request or requirement so that the other party may seek, at its expense, a
protective order or other appropriate remedy and/or waive compliance with the
provisions of this Section. If, in the absence of a protective order or other
remedy or the receipt of a waiver by the other party, the Disclosing Party
nonetheless, based on the advice of counsel, is required to disclose such
information to any tribunal, the Disclosing Party, without liability hereunder,
may disclose that portion of such information which such counsel advises the
Disclosing Party it is legally required to disclose. The parties agree to give
reasonable notice to its employees of the ongoing requirements of this Section.
Notwithstanding the foregoing, neither party shall be liable for damages for any
inadvertent disclosure of any confidential or secret information of the other
party where (a) the appropriate degree of care has been exercised and (b) such
inadvertent disclosure does not Adversely Affect such party; provided that upon
notice of such inadvertent disclosure it shall have been endeavored to correct
the effects thereof and to prevent any further inadvertent disclosure.
Section 5.13. Government Contract Novation. As soon as is reasonably
practicable following the Closing, Seller shall, in accordance with FAR Part 42,
Section 42.12, submit in writing to each Responsible Contracting Officer (as
such term is defined in FAR Part 42, Section 42.102(a)),
34
a request for the U.S. Government to (i) recognize Buyer as the successor
interest to all of the Government Contracts being sold, assigned, transferred
and conveyed to Buyer in accordance with this Agreement, and (ii) enter into a
novation agreement (the "Novation Agreement") substantially in the form
contemplated by such regulations. Seller shall use commercially reasonable
efforts to obtain all consents, approvals and waivers required for the purpose
of processing, entering into and completing the Novation Agreement with regard
to any of the Government Contracts, including responding to any reasonable
requests for information by the U.S. Government with regard to such Novation
Agreement. Buyer shall provide to Seller and each Responsible Contracting
Officer all information reasonably necessary to obtain the consent of the U.S.
Government to recognize Buyer as the successor in interest to all of the
Government Contracts being sold, assigned, transferred and conveyed to Buyer in
accordance with this Agreement. Buyer shall use commercially reasonable efforts
to obtain all consents, approvals and waivers required for the purpose of
processing, entering into and completing the Novation Agreement with regard to
any of the Government Contracts including responding to any requests for
information by the U.S. Government with regard to such Novation Agreement.
Section 5.14. Binghamton Facility. (a) Prior to the Closing Date,
Seller will use commercially reasonable efforts to assist Buyer in maintaining
the operations of the Businesses at the Binghamton Facility by providing access
to the Employees at the Binghamton Facility to allow Buyer to solicit those
Employees to stay in the employ of the Businesses.
(b) Buyer will use reasonable commercial efforts to obtain as promptly
as practicable from the owner/landlord of the Binghamton Facility a lease for
the continued occupancy and use of such premises in the Businesses, subject to
Seller's rights under the Access Agreement, attached as Exhibit C hereto. In the
event Buyer has not obtained its own lease concerning the Binghamton Facility on
or before February 1, 2000, then Seller shall have a period of sixty (60) days
commencing February 1, 2000 to conclude a prime lease that would permit
continued use of the Binghamton Facility in the Businesses upon terms generally
consistent with Seller's existing Lease for the Binghamton Facility, in which
case Buyer shall enter into a sublease with Seller for such purpose, subject to
the Access Agreement. In the event Seller is unable to conclude such lease
within such 60-day period, then either party hereto may terminate this Agreement
on notice to the other.
(c) Notwithstanding anything to the contrary herein or any Collateral
Document, Buyer shall not be obligated to vacate the Binghamton Facility on or
before December 31, 2001, and Buyer shall not lose the benefit of any
indemnification for environmental matters solely by reason of Buyer's remaining
in the Binghamton Facility on or after December 31, 2001.
Section 5.15. Buyer's SEC Financial Reporting. The Seller shall accord
Buyer and its independent auditors full access to the books and records of the
Businesses, to enable Buyer to prepare the following: (i) audited historical
financial statements for the Businesses for the fiscal year ending December 31,
1999, including unaudited quarterly income statements, and (ii) unaudited
historical financial statements for the Businesses for any interim period after
December 31, 1999 but before the Closing Date as required, in accordance with
the rules and regulations of the U.S. Securities and Exchange Commission
("SEC"), for purposes of Buyer's preparation of its SEC filings or any other
filings which must or may be undertaken by the Buyer in connection with the
35
consummation of transactions contemplated herein or subsequent financing
transactions related thereto.
Section 5.16. Sharing of Retention Commitments Amounts. Seller will
reimburse Buyer for: (i) 100% of any amounts paid by Buyer to Employees at the
Binghamton Facility, and to other, non-Binghamton Employees of the Businesses
for those retention payments becoming due within 30 days following the Closing;
and (ii) 50% of all other such amounts paid by Buyer to non-Binghamton
Employees, in each case pursuant to Seller's retention agreements and
commitments to Employees, as such payments are made by Buyer; provided, however,
that Seller's obligation relates only to payments under Seller's original
commitments prior to Closing, and not to any subsequent increase of benefits to
the Employee. Seller shall pay interest at the rate of 8.5% per annum from the
date that Buyer provides Seller with an invoice for such amounts if such
invoices are not paid within 15 days.
Section 5.17. Payments. Each party promptly shall deliver to the other
any cash, checks or other instruments of payment to which the other is entitled
and shall hold the same in trust for the other until such delivery.
Section 5.18. Insurance. Seller shall cooperate with Buyer in order to
afford Buyer the full benefit of all insurance policies and all rights
thereunder (including rights to causes of action, lawsuits, claims and demands,
rights of recovery and set-off) covering the Businesses and the Subject Assets,
and proceeds under or with respect to such insurance policies, for periods prior
to the Closing to the extent claims thereunder relate to any of the Subject
Assets or the Assumed Liabilities; provided that Buyer shall be responsible for
the increased out-of-pocket costs to Seller of affording such benefits to Buyer,
if any.
Section 5.19. Supply Contracts. In the case of each Contract (including
any intercompany work order or similar support arrangement) in effect on the
Closing Date under which either of the Businesses supplies any products to
Seller or any of its Affiliates, or Seller or any of its Affiliates supplies any
products to either of the Businesses (each such Contract being referred to
hereinafter as a "Supply Contract"), Buyer and Seller shall honor, and cause
their respective Affiliates to honor, all the terms (including, without
limitation, pricing) of such Supply Contract for the current term of such Supply
Contract. The aforesaid obligation shall also apply to the terms set forth in
any written and mutually agreed proposal for the supply of products by or to the
Businesses pending on the Closing Date, in the event that Seller or any of
Affiliates, on the one hand, and Buyer or any of its Affiliates, on the other
hand, enter into a Supply Contract relating to such proposal after the Closing.
In the case of any new Supply Contract with respect to the Businesses entered
into by Seller or any of its Affiliates, on the one hand, and Buyer or any of
its Affiliates on the other hand, after the Closing (and for which a written
proposal is not pending on the Closing Date), Buyer and Seller agree that the
terms thereof shall be the best commercial terms (including, without limitation,
pricing) available to similarly situated buyers under similar, market-based
facts and circumstances.
Section 5.20. Research and Experimental Expenses. Seller will use
reasonably efforts to furnish to the Buyer as reasonably practicable, but in no
event more than 180 days after Closing, a letter, on Seller's letterhead,
setting forth all information reasonably requested relating to the base period
research expenses and any other information to allow Buyer to claim research and
36
experimental credits in accordance with the relevant sections of the Code and
Treasury Regulations promulgated thereunder. If all of the requested or required
information is not in Seller's possession, then Seller will use its reasonable
efforts to obtain the same.
Section 5.21. W-2 Issues. Seller and Buyer shall mutually agree
promptly after the Closing to address W-2 issues; e.g., successor method or
alternative method.
Article VI.
Employees and Employee Benefit Plans
Section 6.1. Employment of Employees of the Business. Buyer shall offer
employment, effective as of the Closing Date, to each of the Employees listed on
Schedule 6.1 attached hereto and who is employed by Seller (and who is not on
long-term disability, and if on short-term disability only upon a return to
work), on the Closing Date, and at wages substantially comparable to his or her
then current wage or salary level; provided, however, that each such Employee
consents to the transfer of his or her personnel records to Buyer. Those
Employees who accept such offers of employment and become employees of Buyer
shall be referred to herein as the "Transferred Employees." Buyer and Seller
shall cooperate and use commercially reasonable efforts to minimize all costs of
severance pay and benefits, if any, to which an Employee is entitled that are
incurred with respect to any such Employee who fails to become a Transferred
Employee, including any refusal of such Employee to accept an offer of
employment or otherwise, and Buyer and Seller shall bear equally all such costs
of severance pay and benefits.
Section 6.2. Certain Benefit Plan Matters.
(a) Following the Closing Date and through December 31, 2000, Buyer
shall provide Transferred Employees with defined benefit, defined contribution,
life insurance, medical coverage and other employee welfare benefit plans
(within the meaning of Section 3(1) of ERISA), on a basis substantially
comparable in the aggregate to those provided Transferred Employees on the date
hereof; provided however, that Buyer shall not be required to provide any of the
Transferred Employees with any stock-based plans relating to equity securities
(or their equivalent, such as phantom stock plans or SARs) or incentive plans
based on the achievement of financial targets. Nothing herein shall preclude
Seller from continuing to administer stock-based and incentive plans for service
with Seller through the Closing Date.
(b) For purposes of vesting and any period of service requirements or
commencement of participation with respect to any employee benefit plan of
Buyer, each Transferred Employee shall receive credit of his or her term of
service with Seller.
Section 6.3. Access to Books and Records. As soon as practicable after
the Closing Date, Buyer shall receive from Seller (a) such information
concerning each Transferred Employee's period of employment with Seller as Buyer
may reasonably require to determine service for eligibility, vesting and benefit
accrual purposes and (b) such information concerning the terms of Seller's
Employee Benefit Plans and concerning each Transferred Employee's benefit
utilization under welfare benefit plans as Buyer may reasonably require to
comply with Section 6.2 of this Agreement.
37
Section 6.4. Defined Benefit Plan.
(a) Buyer shall, effective as of the Closing Date, establish or cause
to be established a defined benefit pension plan (the "Buyer Pension Plan") for
the benefit of the Transferred Employees who as of the closing Date are covered
by a Seller defined benefit pension plan (each a "Seller Pension Plan" and
collectively, the "Seller Pension Plans") (the "Covered Employees"; the names of
all Covered Employees shall be set forth on a schedule to be furnished by Buyer
to Seller within 30 days after the Closing Date).
(b) The Buyer Pension Plan shall provide benefits for each Covered
Employee as follows:
As of the Closing Date, Seller shall fully vest each such Covered
Employee in his or her accrued benefit under the applicable Seller Pension Plan,
with respect to employment prior to the Closing Date, and subject to the
provisions of Section 6.4(c) and (d) hereof, the Buyer Pension Plan shall, in
the aggregate, provide benefit levels reasonably comparable to the applicable
Seller Pension Plan. The Buyer Pension Plan shall recognize for all purposes
under such Plan, including eligibility, vesting and benefit accrual, all service
and compensation recognized by the Seller Pension Plan on the Closing Date with
respect to Transferred Employees, provided, that Seller shall have supplied
Buyer with such information within a reasonable period of time, not to exceed
six (6) months, after the Closing Date; and with respect to those Covered
Employees who were participants in the contributory portion of the Seller's
Non-Bargaining Retirement Plan as of the Closing Date, the benefit formula,
employee contribution, early retirement subsidy and cost of living adjustment
provisions therein will be continued under Buyer's Pension Plan through December
31, 2002.
(c) Transfers of assets and liabilities from a Seller Pension Plan to
Buyer Pension Plan shall be made in accordance with the provisions of this
Section 6.4(c). Within 120 days of the Closing Date ("Initial Transfer Date"),
Seller shall cause its appropriate pension trusts to make an initial transfer of
assets in cash, equal to 85% of the amount estimated by Seller in good faith to
be equal to the Final Transfer Amount (as defined below) with respect to each
Seller Pension Plan (using the same assumptions and methodologies consistent
with Section 6.4(d) ("Initial Transfer Amount")). In addition, prior to the
Initial Transfer Date, Seller shall provide Buyer with evidence reasonably
satisfactory to Buyer that the appropriate Seller Pension Plans remain qualified
under Section 401(a) of the Code. As soon as practicable after the final
determination of the amounts to be transferred ("True-Up Date"), Seller shall
cause a second transfer to be made in cash of the True-Up Amount. The "True-Up
Amount" shall be equal to the Final Transfer Amount minus Initial Transfer
Amount, reduced by benefit payments after the Closing Date and then, adjusting
for Earnings attributable to the assets transferred, where the Final Transfer
Amount is calculated in accordance with Section 6.4(d). Earnings applied to the
Final Transfer Amount shall be calculated on the basis of the earnings of all
assets in Seller's trust for the period after the Closing Date through the date
of the Final Transfer Amount, as offset by the Initial Transfer Amount, and with
earnings of all assets in Seller's trust pro rated for the time period from the
date of the Initial Transfer to the Final Transfer Date. If the Initial Transfer
Amount exceeds the Final Transfer Amount with respect to any plan, as soon as
practicable following such determination by Seller and after notice by Seller to
Buyer, Buyer shall cause a transfer to be made to the respective Seller Pension
Plan equal to the excess of the Initial Transfer Amount over the Final Transfer
Amount, adjusted to reflect a pro rata portion of Earnings in Buyer's trust from
the last day of the month in which the Closing occurs. The True-Up
38
Amount shall be transferred in cash. Unless the parties agree otherwise, all
transfers will occur on the last business day of a month. Notwithstanding
anything contained herein to the contrary, the transfers contemplated by this
Section 6.4(c) shall be determined in accordance with Section 414(l) of the Code
and Treasury Regulation 1.414(l)-1.
(d) The Final Transfer Amount ("Final Transfer Amount") is the
Actuarial Accrued Liability for the Transferred Employees, as determined under
CAS412, as of the Closing Date but in no event will the amount transferred be
less than the amount required to satisfy Section 414(1) of the Code. If the
Actuarial Accrued Liability of all participants in the respective plan is equal
to or more than the fair market value of the assets in that plan, then Seller
shall instead cause its actuary to determine the Final Transfer Amount as equal
to the amount of assets allocable to the liabilities of Covered Employees
participating in that plan based on Section 4044 of ERISA ("Section 4044
Amount"). The Actuarial Accrued Liability shall be determined using the interest
and mortality rate assumption described in the next sentence and for all other
demographics (e.g., retirement, turnover, disability) those actuarial
assumptions and methods used in the most recent actuarial valuation of the
Seller Pension Plan, as specified in Schedule 6.4. The interest rate assumption
shall be the rates promulgated by the PBGC for the valuation of plans that
terminate in the month in which the Closing Date occurs (the "Interest Rate");
and the mortality rates shall be those specified in the 1983 Group Annuity
Mortality Table (without margins). For purposes of these calculations all
employees are 100% vested and any termination benefits shall be assumed to be
payable in accordance with the rates referred to above.
(e) While the transfer of the Transferred Assets is pending, Seller
agrees to cause the trustee of the Seller Pension Plans to continue to pay
current benefits to Covered Employees as they become due.
(f) Buyer shall have the right to appoint an independent actuary
("Buyer's Actuary") for the purpose of verifying whether the calculation of the
Actuarial Accrued Liability by Seller's Actuary under Section 6.4(c) and of the
amount of Transferred Assets is correct (based on the method and assumptions set
forth in Section 6.4(d)). Such amount as certified by Seller's Actuary shall be
final, conclusive and binding on Seller and Buyer unless, within 30 days after
the delivery of such certification by Seller's Actuary to Buyer's Actuary,
together with such supporting information as Buyer's Actuary may reasonably
request, Buyer's Actuary shall notify Seller's Actuary of its disagreement with
such amount. If any such disagreement is not resolved to the satisfaction of
Seller and Buyer within 60 days of Seller's receipt of such notification (or
within such longer period as Seller and Buyer shall mutually agree), either
Seller or Buyer may elect to have the calculation submitted for resolution to a
third independent actuary appointed mutually by Seller and Buyer, whose
determination shall be made in 30 days and shall be conclusive, final and
binding. The expenses of Buyer's Actuary shall be borne by Buyer; the expenses
of Seller's Actuary shall be borne by Seller; and the expenses of any third
actuary shall be borne equally by Buyer and Seller.
(g) Buyer agrees that upon the initial transfer of the Transferred
Assets from the Seller Pension Plan to the Buyer Pension Plan, the Buyer Pension
Plan shall assume all liability of the Seller Pension Plan for the accrued
benefits of Covered Employees, and that such transfer shall be in full discharge
of all obligations of the Seller Pension Plan for such benefits with respect to
such Covered Employees. Seller agrees to indemnify the Buyer Pension Plan and
Buyer, their trustees and
39
other fiduciaries and affiliates and each of their shareholders, officers,
directors, employees, agents and attorneys and save each such person harmless
against any and all liabilities, claims, damages, costs and expenses (including
any and all expenses reasonably incurred in investigating, preparing or
defending against litigation commenced or threatened or in settlement of any
such claim), relating to or incurred in defending against (i) a claim that any
of the transactions contemplated by Section 6.4 of this Agreement are not in
accordance with the terms of the Seller Pension Plan or applicable law, (ii) any
error in the data concerning any Covered Employee disclosed by Seller to Buyer
pursuant to this Section 6.4, or (iii) any inaccuracy in the certification
furnished pursuant to Section 6.4(c). Buyer agrees to indemnify the Seller
Pension Plan and Seller, their trustees and other fiduciaries and affiliates and
each of their officers, directors, employees, agents and attorneys and save each
such person harmless against any and all liabilities, claims, damages, costs and
expenses (including any and all expenses reasonably incurred in investigating,
preparing or defending against litigation commenced or threatened or in
settlement of any such claim) relating to or incurred in defending against any
claim arising out of the failure of the Buyer Pension Plan to pay as
contemplated by this Section 6.4.
Section 6.5 Retiree Medical Benefits. Buyer shall provide retiree
medical coverage for those Transferred Employees who, as of the Closing Date,
were covered by an Employee Benefit Plan of Seller providing for such benefits.
With respect to (x) those Transferred Employees who, as of the Closing Date,
were participants in the contributory portion of the Raytheon Non-Bargaining
Retirement Plan, and (y) those Transferred Employees who were given company-paid
retiree medical benefits by contract, including but not limited to former
employees of MESC Holdings, Inc., The Perkin-Elmer Corporation and Honeywell,
Inc. (and their respective qualified dependents), all as required by Section
(8)(d)(iv) of the Employee Matters Agreements in the Raytheon Hughes merger.
Buyer will provide company-paid retiree medical benefits substantially
comparable in value to such benefits as of the Closing Date for a period at
least from the Closing Date through December 31, 2002, and thereafter will
continue such company-paid retiree medical benefits that are substantially
comparable to and for as long as retiree medical benefits are provided generally
to other employees of Buyer, its successors and its subsidiaries. Subsequent to
the Closing Date, Seller shall retain no liability for provision of retiree
medical benefits to the Transferred Employees, all of such liability, if any,
having been assumed by Buyer.
Section 6.6 WARN Act. The Buyer agrees that, for a period of 60 days
after the Closing Date, it will not cause any of the Transferred Employees to
suffer "employment loss" for purposes of the WARN Act, and related regulations
if such employment loss could create any WARN-related liability for the Seller,
unless the Buyer delivers notices under the WARN Act in such a manner and at
such a time that Seller bears no liability with respect thereto.
Section 6.7 Represented Employees. On and after the Closing Date, the
Buyer shall provide benefits to Transferred Employees in units represented for
collective bargaining, works council or other collective representation purposes
("Represented Employees") in compliance with the applicable collective
bargaining agreement and the requirements of applicable laws, including the
NLRA. Without limitation, Buyer will honor and perform any obligation as a
successor employer either through Seller's collective bargaining agreements or
by operation of applicable law. Any changes in the benefits for Transferred
Employees will be made only after notice to and consultation
40
with the recognized collective bargaining, works council or other applicable
representative, as and to the extent required by the NLRA and any other
applicable labor law.
Article VII.
Tax Matters
Seller covenants for the benefit of Buyer, and Buyer covenants for the
benefit of Seller, as follows:
Section 7.1. Taxes and Refunds.
(a) Seller shall be responsible for and shall pay all Taxes with
respect to taxable periods (or portions thereof) ending on or before the Closing
Date with respect to the Businesses or the use of the Subject Assets, and Seller
shall be entitled to any refunds or credits of Taxes attributable to or arising
in taxable periods ending on or before the Closing Date.
(b) Buyer shall be responsible for and shall pay all Taxes with respect
to taxable periods (or portions thereof) commencing on the first day after the
Closing Date with respect to the Businesses or the use of the Subject Assets,
and Buyer shall be entitled to any refunds or credits of Taxes attributable to
or arising in taxable periods commencing on the first day after the Closing
Date.
Section 7.2. Allocation of Transfer and Property Taxes.
(a) All excise, sales, use, value added, registration, stamp,
recording, documentary, conveyancing, franchise, property, transfer, gains and
similar Taxes, levies, charges and fees including any deficiencies, interest,
penalties, additions to tax or additional amounts excluding any Income Taxes
(collectively, "Transfer Taxes") incurred in connection with the Asset Purchase
(including Transfer Taxes incurred by transactions pursuant to transfers under
the Intellectual Property Agreement or other Collateral Documents) shall be
borne by Seller. Buyer and Seller shall use reasonable efforts to minimize the
amount of all Transfer Taxes and shall cooperate in providing each other with
any appropriate resale exemption certifications and other similar documentation.
The party that is required by applicable law to make the filings, reports, or
returns and to handle any audits or controversies with respect to any applicable
Transfer Taxes shall do so, and the other party shall cooperate with respect
thereto as necessary.
(b) All real property taxes, personal property taxes and similar ad
valorem obligations levied with respect to the Subject Assets for a taxable
period which includes (but does not end on) the Closing Date (collectively, the
"Apportioned Obligations") shall be apportioned between Seller and Buyer based
on the number of days of such taxable period which fall on or before the Closing
Date (this and any other tax period which includes one or more days falling on
or before the Closing Date, a "Pre-Closing Tax Period") and the number of days
of such taxable period after the Closing Date (a "Post-Closing Tax Period").
Seller shall be liable for the proportionate amount of such taxes that
is attributable to the Pre-Closing Tax Period, and Buyer shall be liable for the
proportionate amount of such taxes that is attributable to the Post-Closing Tax
Period. Upon receipt of any bill for real or personal property taxes relating to
the Subject Assets, each of Seller and Buyer shall present a
41
statement to the other setting forth the amount of reimbursement to which each
is entitled under this Section together with such supporting evidence as is
reasonably necessary to calculate the proration amount. The proration amount
shall be paid by the party owing it to the other within 30 days after delivery
of such statement. In the event that either Seller or Buyer shall make any
payment for which it is entitled to reimbursement under this Section, the other
party shall make such reimbursement promptly but in no event later than ten (10)
days after the presentation of a statement setting forth the amount or
reimbursement to which the presenting party is entitled along with such
supporting evidence as is reasonably necessary to calculate the amount of
reimbursement.
Section 7.3. Allowable Taxes. (a) For purposes of this Section,
"Allowable Tax" shall mean the allocable share of any Tax of Seller or any of
its Affiliates which is an allowable cost under FAR and associated regulations
and agreements between Seller and any U.S. governmental entity, allocated based
on the Seller's existing finance policy (as it is in effect on the date hereof).
(b) If Seller has paid (or reimbursed Buyer for) any Allowable Tax
which is attributable to a Pre-Closing Tax Period, Buyer agrees to repay to
Seller promptly upon receipt any portion of such Allowable Tax that Buyer or any
of its Affiliates is ultimately able to recover from the United States
government.
(c) If Buyer or any of its Affiliates receives a refund with respect to
an Allowable Tax that is attributable to a Pre-Closing Tax Period, Buyer shall
pay to Seller the amount of such refund reduced by the amount, if any, that
Buyer will be required to pay to the United States government or suffer by
reason of offset in accordance with FAR and associated regulations and
agreements between Seller and any U.S. governmental entity. If Seller receives a
refund after the Closing Date with respect to an Allowable Tax that is
attributable to a Pre-Closing Tax Period, Seller will pay to Buyer the amount,
if any, which Buyer will be required to pay to the U.S. government, or suffers
by reason of an offset, in accordance with the foregoing regulations.
(d) Seller and Buyer agree to cooperate with respect to the calculation
of any amounts payable pursuant to this Section and to give each other written
notice of events reasonably likely to result in the increase or decrease of any
Allowable Tax attributable to a Pre-Closing Tax Period.
Section 7.4. Cooperation. Buyer and Seller agree to furnish or cause to
be furnished to each other, (with the requesting party reimbursing the
furnishing party for the actual out-of-pocket cost of the furnishing party),
upon request, as promptly as practicable, such information and assistance
relating to the Subject Assets (including, without limitation, access to books
and records) as is reasonably necessary for the filing of all Tax Returns, the
making of any election relating to Taxes, the preparation for any audit by any
taxing authority, and the prosecution or defense of any claim, suit or
proceeding relating to any Tax. Buyer and Seller shall retain, consistent with
past practice, all books and records with respect to Taxes pertaining to the
Subject Assets for a period of at least six (6) years following the Closing
Date. At the end of such period, each party shall provide the other with at
least sixty (60) days prior written notice before destroying any such books and
records, during which period the party receiving such notice can elect to take
possession, at its own expense, of such books and records. Seller and Buyer
shall cooperate with each other in the conduct of any audit or other proceeding
relating to Taxes involving the Subject Assets. If either party becomes aware of
42
any pending or threatened assessment, official inquiry, examination or
proceeding that could result in an official determination with respect to Taxes
due or payable the responsibility for which rests with the other party hereto,
such party shall promptly so notify the other party in writing.
Article VIII.
Conditions of Buyer's Obligation to Close
Buyer's obligation to consummate the Asset Purchase shall be subject to
the satisfaction on or prior to the Closing Date of all of the following
conditions:
Section 8.1. Representations, Warranties and Covenants of Seller. (a)
The representations and warranties of Seller contained in this Agreement and
under the Collateral Documents that are qualified by materiality (including
pursuant to the definition of "Adverse") shall be true and correct, and those
that are not so qualified shall be true and correct in all material respects, in
each case, on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date (except for
representations and warranties that speak as of a specific date or time, which
need only be true and correct as of such date or time).
(b) Seller shall have performed in all material respects each
obligation and agreement and shall have complied in all material respects with
each covenant to be performed and complied with by it hereunder and under the
Collateral Documents at or prior to the Closing (other than Seller's obligations
under Section 2.2(a) and (c) with respect to delivery of documents of transfer
of the Subject Assets at the Closing, which shall be performed in all respects).
(c) Buyer shall receive at or prior to the Closing an appropriate
certificate of an authorized officer of Seller, which may rely on attached
certificates of the Executive Management of the Businesses, as to the matters
set forth in Sections 8.1(a) and (b), dated the Closing Date.
Section 8.2. Filings; Consents; Waiting Periods. All waiting periods
applicable under the HSR Act shall have expired or been terminated or the
required rulings, certificates or orders received and all registrations,
filings, applications, notices, consents, approvals, orders, qualifications and
waivers listed in Schedule 8.2 shall have been filed, made or obtained.
Section 8.3. No Actions. No Action shall be pending or threatened by
any Person to enjoin, restrict or prohibit the purchase and sale of the Subject
Assets contemplated hereby; and there shall be no Law or Order in effect that
restrains or prohibits consummation of the transactions contemplated hereby.
Section 8.4. Intellectual Property Agreement, Etc. On or before the
Closing Date, Seller shall enter into the Intellectual Property Agreement.
Notwithstanding anything contained herein, the conveyance or licensing of, and
any and all representations and warranties relating to, any and all Intellectual
Property shall be in the manner and to the extent set forth under the
Intellectual Property Agreement. On or before the Closing Date, Seller shall
also enter into the Transition Services Agreement.
43
Section 8.5. Adverse Changes. Since October 31, 1999, there shall have
been no Adverse Change in the Subject Assets or in the financial condition or
results of operation of the Businesses.
Section 8.6. Binghamton Facility. The Buyer will have the opportunity
to enter into a lease or sublease of the Binghamton Facility to allow the Buyer
to occupy the Binghamton Facility, subject to the Access Agreement set forth in
Exhibit C, on terms generally consistent with Seller's existing lease.
Section 8.7. Certain Transfer Documents. Seller shall have delivered to
Buyer at the Closing all documents, certificates and agreements necessary to
transfer to Buyer title to the Subject Assets, free and clear of any and all
Liens thereon, other than Permitted Liens, including:
(i) executed special warranty deed for the Owned Transferred
Real Estate and a bill of sale, assignment and general conveyance with
respect to the Subject Assets, each dated the Closing Date; and
(ii) assignments of all Contracts, Intellectual Property,
leases, and any other agreements and instruments constituting Subject
Assets, dated the Closing Date, assigning to Buyer all of Seller's
right, title and interest therein and thereto.
Section 8.8. Title Policies. Prior to or at Closing, Buyer shall
acquire from the Title Company an owner's policy of title insurance (the "Title
Policy") issued to Buyer with respect to the Owned Transferred Real Estate, in
the amount of the Purchase Price allocated thereto, insuring Buyer and issued as
of the Closing Date by the Title Company, showing the Owned Transferred Real
Estate and improvements thereon, showing no Liens or restrictions (other than
Permitted Liens and standard printed exceptions). Buyer shall have received a
survey (the "Survey") of the Owned Transferred Real Estate, in form and
substance reasonably satisfactory to Buyer, performed by a surveyor reasonably
acceptable to Buyer which shall not reflect any state of facts inconsistent in
any material respect with the requirements of this Agreement and which shall be
in form and substance customary for the transfer of real estate of this kind in
this location.
Section 8.9. FIRPTA Certificate. Buyer shall have received a
certificate of Seller setting forth the name, address and federal tax
identification of Seller and stating that Seller is not a "foreign person"
within the meaning of Section 1445 of the Code, such certificate to be in the
form set forth in the Treasury Regulations thereunder.
Article IX.
Conditions to Seller's Obligation to Close
Seller's obligation to consummate the Asset Purchase is subject to the
satisfaction on or prior to the Closing Date of all of the following conditions:
Section 9.1. Representations, Warranties and Covenants of Buyer. (a)
The representations and warranties of Buyer contained in this Agreement and
under the Collateral Documents that are qualified by materiality (including
pursuant to the definition of "Adverse") shall be true and correct,
44
and those that are not so qualified shall be true and correct in all material
respects, in each case on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of such date
(except for representations and warranties that speak as of a specific date or
time, which need only be true and correct as of such date or time).
(b) Buyer shall have performed in all material respects each obligation
and agreement and shall have complied in all material respects with each
covenant to be performed and complied with by it hereunder and under the
Collateral Documents at or prior to the Closing (other than Buyer's obligations
under Section 2.2(a), (b), and (c) with respect to delivery of the Purchase
Price and documents reflecting Buyer's assumption of the Assumed Liabilities at
the Closing, which shall be performed in all respects).
(c) Seller shall receive at or prior to the Closing an appropriate
certificate of an authorized officer of Buyer, as to the matters set forth in
Sections 9.1(a) and (b), dated the Closing Date.
Section 9.2. Filings: Consents: Waiting Periods. All waiting periods
applicable under the HSR Act shall have expired or been terminated or the
required rulings, certificates or orders received and all registrations,
filings, applications, notices, consents, approvals, orders, qualifications and
waivers listed on Schedule 9.2 shall have been filed, made or obtained.
Section 9.3. No Actions. No Action shall be pending or threatened by
any Person to enjoin, restrict or prohibit the purchase and sale of the Subject
Assets contemplated hereby; and there shall be no Law or Order in effect that
restrains or prohibits consummation of the transactions contemplated hereby.
Section 9.4. Intellectual Property Agreement, Etc. On or before the
Closing Date, Buyer shall enter into the Intellectual Property Agreement.
Notwithstanding anything contained herein, the conveyance or licensing of, and
any and all representations and warranties relating to, any and all Intellectual
Property shall be in the manner and to the extent set forth under the
Intellectual Property Agreement. On or before the Closing Date, Buyer shall also
enter into the Transition Services Agreement.
Section 9.5. Binghamton Facility. The Buyer will have entered into a
lease or sublease of the Binghamton Facility, subject to the Access Agreement
set forth in Exhibit C, on terms generally consistent with Seller's existing
Lease.
45
Article X.
Survival: Indemnification
Section 10.1. Survival Periods. All representations and warranties
contained or made in this Agreement or any Collateral Document shall survive for
a period of eighteen (18) months following the Closing; provided that the
representations and warranties of Section 3.13 (Environmental Matters), and
Section 3.14 (Employee Benefits) shall survive the Closing for a period of
twenty-four (24) months, and Sections 3.1(d) and 3.5(a) (Title to Assets) shall
survive indefinitely (as applicable, the "Indemnity Period"). No claim for
indemnification for breach of any representation or warranty may be asserted
after the expiration of the Indemnity Period. Notwithstanding anything herein to
the contrary, any representation or warranty which is the subject of a claim
which is asserted in writing prior to the expiration of the Indemnity Period
shall survive with respect to such claim or any dispute with respect thereto
until the final resolution thereof. All covenants and agreements contained or
made in, or in connection with, this Agreement or any Collateral Document shall
survive the Closing.
Section 10.2. Indemnification by Seller. (a) From and after the Closing
Date, Seller shall indemnify and hold harmless Buyer, its Affiliates, each of
their respective directors, officers, shareholders, employees and agents, and
each of the heirs, executors, successors and assigns of any of the foregoing
(collectively, the "Buyer Indemnified Parties") from and against any and all
damages, claims, losses, expenses, costs, taxes, interest, penalties, fines,
obligations and liabilities, including without limitation liabilities for all
reasonable attorneys', accountants', and experts' fees and expenses including
those incurred to enforce the terms of this Agreement (collectively, "Covered
Liabilities"), suffered, directly or indirectly, by, or asserted against, any of
the Buyer Indemnified Parties by reason of, in connection with, relating to or
arising out of (i) any of the Excluded Assets or the Retained Liabilities,
including any Retained Liability based on negligence, gross negligence, strict
liability or any other theory of liability, whether in law (whether common or
statutory) or equity, (ii) any breach by Seller of, or any inaccuracy in, any
representation or warranty of Seller contained in this Agreement or in any
Collateral Document, or (iii) any breach or non-performance by Seller of any
covenant or obligation to be performed by it which is contained in this
Agreement, any Collateral Agreement, or in any agreement, certificate or other
document delivered pursuant hereto or thereto; provided, however, that in no
event shall Seller be required to pay or otherwise be liable for any Covered
Liabilities with respect to claims made under or relating to Section 10.2(a)(ii)
hereof (other than a breach of representation contained in Section 3.5(a)
hereof) unless and until the aggregate amount of all such costs and expenses
hereunder exceeds 1.5% of the Purchase Price, in which case Seller shall be
liable for all such amounts in excess of 1.5% thereof up to a maximum of 15% of
the Purchase Price.
(b) Anything in this Section to the contrary notwithstanding, in the
event one of Buyer's representatives listed on Schedule 10.2 hereof has actual
knowledge on or prior to the Closing Date (i) of any non-material breach,
incompleteness or inaccuracy of, or non-material error in, any representation
and warranty of Seller, which Seller could have cured had Buyer notified Seller
as required by Section 5.2 hereof, or (ii) of any material breach,
incompleteness or inaccuracy of, or material error in, any representations or
warranty of Seller, then, in either such event, Buyer shall be
46
deemed to have waived any right thereafter to assert any claim for
indemnification or otherwise with respect to any such material breach,
incompleteness or inaccuracy or material error so known.
Section 10.3. Indemnification by Buyer. From and after the Closing
Date, Buyer shall indemnify and hold harmless Seller, its Affiliates, each of
their respective directors, officers, employees and agents, and each of the
heirs, executors, successors and assigns of any of the foregoing (collectively,
the "Seller Indemnified Parties") from and against, any and all Covered
Liabilities suffered, directly or indirectly, by or asserted against any of the
Seller Indemnified Parties by reason of, in connection with, relating to or
arising out of (i) any Assumed Liability including any Assumed Liability based
on negligence, gross negligence, strict liability or any other theory of
liability, whether in law (whether common or statutory) or equity, (ii) any
breach by Buyer of, or any inaccuracy in, any representation or warranty of
Buyer contained herein or in any Collateral Document, or (iii) any breach or
non-performance by Buyer of any covenant or obligation to be performed by it
which is contained in this Agreement, any Collateral Documents or in any
agreement, certificate or document delivered pursuant hereto or thereto;
provided, however, that in no event shall Buyer be required to pay or otherwise
be liable for any Covered Liabilities with respect to claims made under or
relating to clause (ii) of this Section 10.3 unless and until the aggregate
amount of all such costs and expenses hereunder exceeds 1.5% of the Purchase
Price, in which case Buyer shall be liable for all such amounts in excess of
1.5% thereof up to a maximum of 15% of the Purchase Price.
Section 10.4. Indemnification Procedures. (a) If any indemnified party
receives notice of the assertion of any Third Party Claim with respect to which
an indemnifying party is obligated under this Agreement to provide
indemnification, such indemnified party shall give such indemnifying party
written notice thereof (together with a copy of such Third Party Claim, process
or other legal pleading) promptly after becoming aware of such Third Party
Claim; provided, however, that the failure of any indemnified party to give
notice as provided in this Section 10.4 shall not relieve any indemnifying party
of its obligations under this Section 10.4, except to the extent that such
indemnifying party is actually prejudiced by such failure to give prompt notice.
Such notice shall describe such Third Party Claim in reasonable detail.
(b) An indemnifying party, at such indemnifying party's own expense and
through counsel chosen by such indemnifying party (which counsel shall be
reasonably acceptable to the indemnified party), may elect to defend any Third
Party Claim. If an indemnifying party elects to defend a Third Party Claim,
then, within ten (10) business days after receiving notice of such Third Party
Claim (or sooner, if the nature of such Third Party Claim so requires), such
indemnifying party shall notify the indemnified party of its intent to do so,
and such indemnified party shall reasonably cooperate in the defense of such
Third Party Claim (and pending such notice and assumption of defense, an
indemnified party may take such steps to defend against such Third Party Claim
as, in such indemnified party's good-faith judgment, are appropriate to protect
its interests). Such indemnifying party shall pay such indemnified party's
reasonable out-of-pocket expenses incurred in connection with such cooperation
and defense. Such indemnifying party shall keep the indemnified party reasonably
informed as to the status of the defense of such Third Party Claim. After notice
from an indemnifying party to an indemnified party of its election to assume the
defense of a Third Party Claim, such indemnifying party shall not be liable to
such indemnified party under this Section 10.4
47
for any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than those expenses referred to in
the preceding sentence; provided, however, that such indemnified party shall
have the right to employ one law firm as counsel, together with a separate local
law firm in each applicable jurisdiction ("Separate Counsel"), to represent such
indemnified party in any action or group of related actions (which firm or firms
shall be reasonably acceptable to the indemnifying party) if, in such
indemnified party's reasonable judgment at any time, either a conflict of
interest between such indemnified party and such indemnifying party exists in
respect of such claim, or there may be defenses available to such indemnified
party which are different from or in addition to those available to such
indemnifying party and the representation of both parties by the same counsel
would be inappropriate, and in that event (i) the reasonable fees and expenses
of such Separate Counsel and local counsel shall be paid by such indemnifying
party (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one Separate Counsel (and local counsel)
with respect to any Third Party Claim (even if against multiple indemnified
parties)), and (ii) each of such indemnifying party and such indemnified party
shall have the right to conduct its own defense in respect of such claim. If an
indemnifying party elects not to defend against a Third Party Claim, or fails to
notify an indemnified party of its election as provided in this Section 10.4
within the period of ten (10) business days described above, the indemnified
party may defend, compromise, and settle such Third Party Claim and shall be
entitled to indemnification hereunder (to the extent permitted hereunder).
Notwithstanding the foregoing, the indemnifying party shall not, without the
prior written consent of the indemnified party, settle or compromise any Third
Party Claim or consent to the entry of any judgment which (i) does not include
as an unconditional term thereof the delivery by each claimant or plaintiff to
the indemnified party of a written release of the indemnified party from all
liability in respect of such Third Party Claim, (ii) provides for injunctive or
other non-monetary relief affecting the indemnified party or the Businesses,
(iii) provides for an amount in excess of the maximum liability of the
indemnifying party set forth in the proviso to Section 10.2 or 10.3, or (iv)
settles or compromises any Third Party Claim in any manner that would reasonably
be expected to have a material adverse effect on the indemnified party.
(c) The indemnifying party, following receipt of any notice from the
indemnified party requesting reimbursement or payment for a Covered Liability
(which notice shall specify in reasonable detail the amount and nature of the
Covered Liability), shall promptly and in case within 30 days of receipt of such
notice provide such reimbursement or payment.
(d) Environmental Actions. If the Seller or Seller's agent elects or is
required to perform any environmental investigation or remediation activities at
the Binghamton Facility after the Closing Date, such activities shall be
conducted pursuant to the terms of the Access Agreement set forth in Exhibit C.
Section 10.5. Certain Limitations. (a) The amount of any Covered
Liabilities for which indemnification is provided under this Agreement shall be
net of any amounts actually recovered by the indemnified party from third
parties (including amounts actually recovered under insurance policies) with
respect to such Covered Liabilities. Any netting of insurance proceeds may be
satisfied by the indemnified party assigning any potential insurance claims to
the indemnifying party and, in any event, the potential availability of
insurance proceeds shall not permit delay by the
48
indemnifying party in the performance of its duties under this Article X. Any
indemnifying party hereunder shall be subrogated to the rights of the
indemnified party as against any relevant insurer upon payment in full of the
amount of the relevant indemnifiable loss. If any indemnified party recovers an
amount from a third party in respect of an indemnifiable loss for which
indemnification is provided in this Agreement after the full amount of such
indemnifiable loss has been paid by an indemnifying party or after an
indemnifying party has made a partial payment of such indemnifiable loss and the
amount received from the third party exceeds the remaining unpaid balance of
such indemnifiable loss, then the indemnified party shall promptly remit to the
indemnifying party the excess of (i) the sum of the amount theretofore paid by
such indemnifying party in respect of such indemnifiable loss plus the amount
received from the third party in respect thereof, less (ii) the full amount of
such Covered Liabilities.
(b) The amount of any other liability for which indemnification is
provided under this Agreement shall be treated by Buyer and Seller as an
adjustment to the Purchase Price, and Seller and Buyer agree not to take any
position inconsistent therewith for any purpose.
(c) No remedy under this Agreement or at law or in equity shall
include, provide for or permit the payment of multiple, exemplary, punitive or
consequential damages or any equitable equivalent thereof or substitute therefor
("Special Damages"); provided, however, that Special Damages shall be
indemnifiable to the extent owed by Buyer or Seller, as the case may be, to a
third party.
Section 10.6. Exclusive Remedy. Except as otherwise provided in this
Article, absent fraud, intentional misrepresentations or misconduct, or criminal
activity, the indemnification provided in this Article shall be the sole and
exclusive post-Closing remedy available to the Parties hereto for any claim
under this Agreement (other than equitable relief if available).
Section 10.7. Set-Off. If an indemnifying party shall be obligated to
indemnify an indemnified party pursuant to this Article X, such indemnified
party shall be entitled, in addition to any other right or remedy it may have,
to exercise rights of set-off against any amounts then due and payable to such
indemnifying party hereunder or that may thereafter become due and payable to
the indemnifying party hereunder.
Article XI.
Termination
Section 11.1. Termination. This Agreement may be terminated at any time
prior to the Closing by:
(a) The mutual written consent of Seller and Buyer; or
(b) Either Seller or Buyer if the Closing has not occurred by the close
of business on April 5, 2000, and if the failure to consummate the Asset
Purchase on or before such date did not result from the failure by the party
seeking termination of this Agreement to fulfill any undertaking or commitment
provided for herein that is required to be fulfilled prior to Closing; or
49
(c) Seller, provided it is not then in breach of any of its obligations
hereunder, if Buyer fails to perform in any material respect any covenant or
obligation under this Agreement when performance thereof is due or Buyer shall
have breached in any material respect any of the representations or warranties
contained in this Agreement and does not cure the failure or breach within
thirty (30) business days after Seller delivers written notice thereof; or
(d) Buyer, provided it is not then in breach of any of its obligations
hereunder, if Seller fails to perform in any material respect any covenant or
obligation under this Agreement when performance thereof is due or Seller shall
have breached in any material respect any of the representations and warranties
contained in this Agreement and does not cure the failure or breach within
thirty (30) business days after Buyer delivers written notice thereof.
Section 11.2. Procedure and Effect of Termination. In the event of
termination of this Agreement by either or both of Seller and Buyer pursuant to
Section 11.1, written notice thereof shall forthwith be given by the terminating
party to the other party hereto, and this Agreement shall thereupon terminate
and become void and have no effect, and the transactions contemplated hereby
shall be abandoned without further action by the parties hereto, except that the
provisions of Sections 5.l(b) and Articles X and XII shall survive the
termination of this Agreement; provided, however, that such termination shall
not relieve any party hereto of any liability for any breach of this Agreement.
If this Agreement is terminated as provided herein, all filings, applications
and other submissions made pursuant to Section 4.3 shall, to the extent
practicable, be withdrawn from the agency or other persons to which they were
made.
Article XII.
Miscellaneous
Section 12.1. Counterparts. This Agreement may be executed in multiple
original counterparts, all of which shall be considered one and the same
agreement, and shall become effective as of the date first written hereinabove
upon execution and delivery hereof by both parties or upon execution of
counterparts by each of the parties and delivery thereof to the other party.
Section 12.2. Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware without reference to the choice of law principles thereof. Buyer and
Seller consent to and hereby submit to the jurisdiction of any state or federal
court located in the State of Delaware in connection with any action, suit or
proceeding arising out of or relating to this Agreement, and each of the parties
hereto irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
Section 12.3. Entire Agreement. This Agreement (including the Schedules
and Appendices hereto), together with the Collateral Documents, contain the
entire agreement between the parties with respect to the subject matter hereof
and there are no agreements, understandings, representations or warranties
between the parties other than those set forth or referred to herein.
50
Section 12.4. Expenses. Except as set forth in this Agreement, whether
the Asset Purchase is or is not consummated, all legal and other costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses; provided that Seller shall pay all fees and Taxes relating to the
transfer of the Subject Assets and the Assumed Liabilities.
Section 12.5. Notices. All notices and other communications hereunder
shall be sufficiently given for all purposes hereunder if in writing and
delivered personally, sent by documented overnight delivery service or, to the
extent receipt is confirmed, telecopy, telefax or other electronic transmission
service to the appropriate address or number as set forth below. Notices to
Seller shall be addressed to:
Raytheon Company
141 Spring Street
Lexington, Massachusetts 02173
Attention: General Counsel
Telecopy No: (781) 860-2924
with a copy (which shall not constitute notice) to:
Baker Botts L.L.P.
1299 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
Attention: James R. Doty, Esq.
Telecopy No: (202) 639-7890
or at such other address and to the attention of such other Person as
Seller may designate by written notice to Buyer. Notices to Buyer shall be
addressed to:
L-3 Communications Corporation
600 Third Avenue
New York, NY 10016
Attention: Christopher C. Cambria, Esq.
Telecopy No.: (212) 805-5494
with a copy (which shall not constitute notice) to:
Whitman Breed Abbott & Morgan LLP
200 Park Avenue
New York, NY 10166
Attention: James P. Gerkis, Esq.
Telecopy No.: (212) 351-3131
51
or at such other address and to the attention of such other Person as
Buyer may designate by written notice to Seller. Notices or other communications
shall be deemed effective on receipt or refusal of receipt.
Section 12.6. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that no party hereto will assign its
rights or delegate its obligations under this Agreement without the express
prior written consent of each other party hereto (it being agreed that no such
assignment by a party shall relieve the assigning party of any of its
obligations hereunder). Notwithstanding the foregoing, Buyer may assign this
Agreement after Closing.
Section 12.7. Headings: Definitions. The section and article headings
contained in this Agreement are inserted for convenience of reference only and
will not affect the meaning or interpretation of this Agreement. All references
to Sections or Articles contained herein mean Sections or Articles of this
Agreement unless otherwise stated.
Section 12.8. Amendment. This Agreement may not be amended, modified,
superseded, canceled, renewed or extended except by a written instrument signed
by the party to be charged therewith.
Section 12.9. Waiver; Effect of Waiver. No provision of this Agreement
may be waived except by a written instrument signed by the party waiving
compliance. No waiver by any party hereto of any of the requirements hereof or
of any of such party's rights hereunder shall release the other parties from
full performance of their remaining obligations stated herein. No failure to
exercise or delay in exercising on the part of any party hereto any right, power
or privilege of such party shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege by such party.
Section 12.10. Interpretation; Absence of Presumption. (a) For the
purposes hereof, (i) words in the singular shall be held to include the plural
and vice versa and words of one gender shall be held to include the other gender
as the context requires, (ii) the terms "hereof," "herein," and "herewith" and
words of similar import shall, unless otherwise stated, be construed to refer to
this Agreement as a whole (including all of the Schedules hereto) and not to any
particular provision of this Agreement, and Article, Section, paragraph and
Schedule references are to the Articles, Sections, paragraphs and Schedules to
this Agreement unless otherwise specified, (iii) the word "including" and words
of similar import when used in this Agreement means "including, without
limitation," unless the context otherwise requires or unless otherwise
specified, (iv) the word "or" shall not be exclusive, (v) provisions shall
apply, when appropriate, to successive events and transactions, and (vi) unless
the context otherwise requires, all references to any period of days shall be
deemed to be to the relevant number of calendar days.
(b) This Agreement shall be construed without regard to any presumption
or rule requiring construction or interpretation against the party drafting or
causing any instrument to be drafted.
52
Section 12.11. Specific Performance. The parties hereto each
acknowledge that, in view of the uniqueness of the subject matter hereof, the
parties hereto would not have an adequate remedy at law for money damages in the
event that this Agreement were not performed in accordance with its terms, and
therefore agree that the parties hereto shall be entitled to specific
enforcement of the terms hereof in addition to any other remedy to which the
parties hereto may be entitled at law or in equity.
Section 12.12. Remedies Cumulative. Except as otherwise provided in
Article X, all rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise or beginning of the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
Section 12.13. Severability. If any provision of this Agreement,
including any phrase, sentence, clause, Section or subsection is inoperative or
unenforceable for any reason, such circumstances shall not have the effect of
rendering the provision in question inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision or provisions herein
contained invalid, inoperative, or unenforceable to any extent whatsoever.
Section 12.14. Bulk Sales. The parties hereby waive compliance with the
provisions of the bulk sales laws of any jurisdiction. Seller will indemnify and
hold harmless Buyer and the other Buyer Indemnified Parties from and against any
and all Covered Liabilities resulting from or arising out of any noncompliance
or alleged noncompliance by Buyer or Seller with such bulk sales laws.
Section 12.15. No Third Party Beneficiaries. Except as provided in
Article X with respect to indemnification of the indemnified parties hereunder,
nothing in this Agreement shall confer any rights upon any Person other than the
parties hereto and their respective successors and permitted assigns.
Section 12.16. Seller Acknowledgement. Seller acknowledges that the
representations and warranties contained in this Agreement and in any document
or instrument delivered to Buyer pursuant hereto or in connection herewith shall
not be deemed waived by any investigation by Buyer, its officers, directors,
employees, counsel, accountants, advisors, representatives and agents.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered, as an instrument under seal, in their names and on their
behalf by their respective officers, thereunto duly authorized, on and as of the
date first set forth above.
53
SELLER: RAYTHEON COMPANY
By:
------------------------------
Franklyn A. Caine
Senior Vice President
BUYER: L-3 COMMUNICATIONS CORPORATION
By:
------------------------------
Christopher C. Cambria
Vice President
54
APPENDIX I
PROVISIONS AND PROCEDURES FOR
ACCOUNTING NEUTRAL
Section C-1. Dispute Resolution. Subject to Sections C-2, through C-3,
in the event any controversy, claim, dispute, difference, or misunderstanding (a
"dispute") arises under Sections 2.4 and 2.5 of this Agreement, and the Parties
have been unable to negotiate in good faith to amicably resolve such dispute in
writing (i) within 120 days following the Closing Date in the case of an
allocation under Section 2.4, or (ii) during the Resolution Period provided for
in Section 2.5, then, in either case, each Party will, within five (5) Business
Days after the expiration of such period, prepare a written position statement
that summarizes the unresolved issues and such Party's proposed resolution. Such
position statement must be delivered within such five (5) Business Days, or such
other time period as may be mutually agreed to by the Parties. If the Parties
continue to be unable to resolve the dispute, such dispute shall, within
forty-five (45) days after expiration of the fifth (5th) Business Day (or last
day of any other period agreed to by the Parties) referred to in the immediately
preceding sentence, be submitted to an Accounting Neutral under Section C-2.
Section C-2. Accounting Neutral.
Section C-2.1. Disputes Covered. Disputes concerning (i) the correct
Allocation under Section 2.4, or (ii) whether any adjustment of the Purchase
Price is required pursuant to Section 2.5, are to be resolved solely by the
Accounting Neutral.
Section C-2.2. Selection. The Accounting Neutral shall be a senior
audit partner of a major accounting firm, which individual and which firm shall
not have been engaged on behalf of Buyer or Seller during the previous five (5)
years, as shall be certified to the parties by the Accounting Neutral. The
possible Accounting Neutrals will be listed prior to closing as an Addendum 1
hereto (as amended from time to time), and the Parties shall for each
appropriate dispute approach them in the order listed with a request to serve as
the Accounting Neutral. If none of the listed possible Accounting Neutrals is
available or if none accepts the assignment and the Parties cannot otherwise
mutually agree to another Accounting Neutral, an experienced audit partner of a
major accounting firm, not engaged by or behalf of Buyer or Seller during the
past five (5) years, will be chosen by the then Chairman of the American
Institute of Certified Public Accountants ("AICPA") or his designee, to serve as
the Accounting Neutral for the purposes of resolving the dispute. Unless
otherwise mutually agreed by the Parties, any Person who is an officer or
employee, agent, or subcontractor of, or a technical consultant to, either Party
or its Affiliates will be automatically ineligible to be the Accounting Neutral.
The costs of utilizing the Accounting Neutral will be shared equally by the
Parties.
Section C-2.3. Methodology and Decision. The Accounting Neutral shall
make his decision by applying the methodology for the preparation of the PWC
Report as provided in Appendix II. The Accounting Neutral will issue a written
decision containing an explanation of how and why the decision was reached. The
Accounting Neutral's decision will be final, binding and non-appealable
55
Section C-3. Other Remedies. Notwithstanding anything to the contrary
herein contained, each Party will be entitled to pursue any equitable rights and
remedies that are available at law or in equity without complying with Sections
C-1 or C-2 in connection with seeking a temporary restraining order in a court
having jurisdiction to preserve the status quo while such proceedings are in
progress.
Section C-4. Continuity of Services and Performance. Unless otherwise
agreed in writing or expressly provided in this Agreement, the Parties will
continue to provide service and honor all other commitments under this Agreement
during the course of dispute resolution pursuant to the provisions hereof with
respect to all matters not subject to or dependent upon resolution of such
dispute.
56
APPENDIX II
NET WORKING CAPITAL CALCULATIONS
Buyer and Seller shall observe and apply the following procedures and principles
in the determination of Net Working Capital as that term applies in the
Agreement:
The difference, if any, between the Target Net Working Capital and the
Preliminary Net Working Capital Calculation will be the basis for any payment to
be made by Buyer or Seller as provided in Section 2.5(a).
The Preliminary Net Working Capital Calculation, the Closing Date Net Working
Capital Calculation and the Final Closing Date Net Working Capital Calculation
will be made in the same manner as that utilized in the calculation of Target
Net Working Capital, except as modified hereby. The foregoing calculations shall
be at the close of business on the Closing Date determined on a pro forma basis
as if Seller and Buyer had not consummated the transactions contemplated by the
Agreements .
As defined in the Agreement, Closing Date Net Working Capital and Final Closing
Date Net Working Capital shall be more specifically determined by excluding the
Excluded Assets and the following items from its scope: a) cash and cash
equivalents, b) all fixed assets and related amortization and depreciation
including but not limited to land and land improvements, buildings and related
improvements, leasehold improvements, automotive, machinery and equipment,
furniture and fixtures, construction in process, and equipment leased to others,
c) all long term assets including but not limited to investments, patents,
licenses and trademarks and their related amortization, goodwill and related
amortization and deferred charges, d) all current and long term accrued expense
other than those items specifically identified in items accounts payable,
accrued payroll and related payroll taxes and accrued vacation, e) all loss and
operating reserves including warranty reserves, f) all accounts or notes payable
from or to Raytheon except for receivables and payables relating to materials
sold or services rendered, g) any reserve, liability or asset resulting from
pension benefits, retirement benefits or other post employment benefits, h) all
accrued liabilities or benefits for current or deferred federal or state income
taxes, and i) all equity related accounts including but not limited to common
stock, additional paid in capital and retained earnings.
It is further understood that the Seller shall apply the following procedures
during the preparation of the Preliminary Net Working Capital Calculation, the
Closing Date Net Working Capital Calculation and the Final Closing Date Net
Working Capital Calculation.
(i) Costs incurred on all Contracts in a loss position by the
Businesses between fiscal month ended October 1999 and the Closing Date are to
be recorded against loss reserves to the extent such loss reserves exist
according to the "Loss Ratios" (as defined below), such that the portion of the
costs incurred, determined by multiplying the costs incurred by the Loss Ratios
is not recorded to Unbilled Accounts Receivable. "Contract EAC Profit (Loss)
Rates" are calculated on an individual Contract (job number) basis by dividing
the baseline estimate at completion (EAC) profit
57
(loss) by the baseline sell price or EAC contract value. The Contract EAC Profit
(Loss) Rates are based on the rates utilized in the calculation of Target
Working Capital. "Loss Ratios" are calculated from the Contract EAC Profit
(Loss) Rates on an individual Contract basis by dividing the baseline total EAC
loss divided by the baseline total EAC cost. Loss Ratios only apply to Contracts
that are in a loss position.
(ii) The Contract EAC Profit (Loss) Rates for the Businesses used to
prepare the calculation of Target Net Working Capital shall be the same rates
used to prepare the Preliminary Net Working Capital Calculation, Closing Date
Net Working Capital Calculation and Final Closing Date Net Working Capital
Calculation, even if facts and circumstances occurring on or before the Closing
Date would require changes to the Contract EAC Profit (Loss) Rates.
The overhead rates for the Business used to prepare the calculation of
Target Net Working Capital shall be used to prepare the Preliminary Net Working
Capital Calculation, Closing Date Net Working Capital Calculation and Final
Closing Date Net Working Capital Calculation, even if facts and circumstances
occurring on or before the Closing Date would require changes to the overhead
rates.
(iii) There shall be no increases to (A) the Contract EAC Profit (Loss)
Rates, (B) incurred costs for each Contract, or (C) Closing Date Net Working
Capital or Final Closing Date Net Working Capital, arising from an increase in
Consolidated Corporate Allocations for the Fiscal Years 1999 through 2003 from
Raytheon to the Businesses.
(iv) The following valuation reserves and doubtful account reserves are
specifically agreed to and valued in the calculation of Target Net Working
Capital, the Preliminary Net Working Capital Calculation, Closing Date Net
Working Capital Calculation and Final Net Working Capital Calculation.
With respect to the Training Services Business, Preliminary Net Working
Capital, Closing Date Net Working Capital Calculations and Final Closing Date
Net Working Capital will reflect the following adjustments:
(a) Billed Accounts Receivable. The allowance for
doubtful accounts reserve will be increased by
$1,500,000 pertaining to amounts past due greater
than 180 days.
(b) Unbilled Accounts Receivable. $3,500,000 of
unabsorbed overhead will be written off.
(c) Inventory. A reserve for unrecoverable inventoried
costs in the amount of $4,000,000 will be established
pertaining to Contracts (job numbers) which are
inactive and/or closed-out.
With respect to the Training Devices Business, Preliminary Net Working
Capital, Closing Date Net Working Capital and Final Closing Date Net Working
Capital Calculations will reflect the following adjustments:
58
(a) Billed Accounts Receivables. An additional reserve of
$1,500,000 for past due accounts will be established
and added to the current $1,000,000 allowance for
doubtful accounts.
(b) Unbilled Accounts Receivables. A reserve of
$4,960,000 will be established for (A) $2,160,000 for
unrecoverable amounts pertaining to final overhead
rates that have not been settled with the Government
for years 1991 through 1999, and (B) $2,800,000 for
CAS settlement related to the Binghamton restructure.
59
ADDENDUM 1
POSSIBLE ACCOUNTING NEUTRALS
[TO BE AGREED ON PRIOR TO CLOSING]
60
APPENDIX III
SUMMARY OF TRANSITION SERVICES AGREEMENT
NEED FROM RAYTHEON
o *Network Services
o Payroll
o PC Pricing (HAC Owned?)
o Medical Plan Coverage
o SD&G
o Retirement Plan Administration
o Benefits Administration and Coverage
o ERISA Compliance
o *RLI Training Data Base
o Travel, Agent Services, Cell Phones, Car Rental etc., for a period not to
exceed 30 days
o *HAC Universal Property System for fixed asset management
o Right and license to continue to use the version as of the Closing of the
Raytheon Integrated Development Process (IDP) and Software Tool Set (STS)
for a phase out period of nine (9) months from Closing.
PROVIDE TO RAYTHEON
o Network Services
o Commercial Training
o Arlington
o Troy
o Romulus
o Germany
o Italy
o Singapore
o NASA
*We may be able to transition away with 30 days notice prior to close. These are
fairly straightforward items.
61
NEED FROM RAYTHEON
o ProE licenses (RSC El Sequndo) (Software Sublicense for duration of
task)
o Currently borrowing 2 (res. for use on work for AIS (WACO).
SUPPLY CONTRACTS BETWEEN RAYTHEON AND THE BUSINESSES: to be memorialized between
Buyer and Seller (as contemplated by and in accordance with Section 5.19 of the
Agreement):
(a) Buyer Prime
1/2 1. WEB CITIS FOR AVCATT (tsc Mass)
3. 2. Training Classes From RLI
3 3. SE CORE Work for AVCATT
1/2 4. TIGERS product for use on Wolverine/Grizzly
1/2 5. Comm Plus (RSC ATC) product for use on AVCATT
1 6. Data for F-16 VAE RECCE pod for use on F-16 VAE simulator
program; should be no cost (RSC Danbury).
1,2,3, 6A. EZ Segunda I/F optics and radar
(b) SELLER PRIME
3 1. ASTT Program Work
3 2. BCT/HFT Program Work
3 3. DD21 Program Work
1/2 4. HRB ECE S/W
3 5. GIDEP (currently free; I doubt we will get this)
6. RC135 S/C with AIS
(c) Buyer Prime
1/2 7. F-18 A/C date: No cost usage lic.
1/2 8. Generic - No Cost usage ITC for RSC data for existing contacts.
62
3 8A. Future S/C with HRB for ELE and El Segundo for HUDS for F-22
program.
2 9. Air Traffic Control - uses Displays and Rightview technology
1 10. BCT - uses Rightview and Trueguide technology
2 11. Malibu Research Lab
2 12. NASA - uses Rightview technology
1 13. FT - ubyne Radio install and support on soacms (SBUD VIII Radio
ECP)
14. Shared Services for TD and TS
15. Use of Raytheon logo and letterhead for some time frame
16. ISO Certification transaction support
The foregoing is not an exclusive, complete or required list.
63
EXHIBIT A
BILL OF SALE
THIS BILL OF SALE is made, executed and delivered as of _________,
2000, by Raytheon Company, a Delaware corporation ("Seller"), to L-3
Communications Corporation, a Delaware corporation ("Buyer").
WITNESSETH:
WHEREAS, Seller and Buyer have entered into that certain Asset Purchase
and Sale Agreement dated as of January __, 2000 (the "Purchase Agreement"),
pursuant to which Buyer has agreed to acquire the entire right, title and
interest in and to the Subject Assets (as defined in Article I of the Purchase
Agreement) for the consideration and on the terms and conditions set forth
therein; and
WHEREAS, pursuant to the Purchase Agreement, Seller has agreed to
execute instruments as may be necessary or desirable to confirm said acquisition
of the Subject Assets by Buyer, including without limitation this Bill of Sale;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged:
Capitalized terms used herein but not defined herein shall have the
meanings set forth in the Purchase Agreement.
Effective as of 5:00 p.m., Dallas Time, on the date hereof, Seller, for
itself and its successors and assigns, does hereby irrevocably sell, set over,
convey, grant, transfer, assign and deliver unto Buyer, its successors and
assigns, forever, all of its right, title and interest in and to all of the
Subject Assets, including, without limitation, all right under all Contracts
included in the Subject Assets.
This Bill of Sale shall not apply to any of the Excluded Assets.
If any instrument, contract, lease, permit or other agreement or
arrangement included in the Subject Assets contains provisions requiring the
consent, approval or novation of a third party to its assignment or transfer and
if such consent, approval or novation has not been obtained on or before the
date hereof (each a "Required Consent Asset"), then this Bill of Sale shall not
constitute an agreement to assign and transfer such Required Consent Asset and
the assignment and transfer shall not be deemed effective with respect to such
Required Consent Asset until such time as the consent, approval or novation of
such third party to the assignment and transfer of such Required Consent Asset
to Buyer shall have been obtained, whereupon (a) this Bill of Sale and the
Purchase Agreement shall then constitute an agreement to assign and transfer
such Required Consent Asset, (b) such assignment and transfer will be deemed
effective without any further action of Seller or Buyer, and (c) this Bill of
Sale shall apply to such Required Consent Asset without any further action of
Seller or Buyer.
This Bill of Sale and the covenants and agreements contained herein
shall be binding upon
64
Seller, it successors and assigns and shall inure to the benefit of Buyer, its
successors and assigns.
This Bill of Sale does not amend or otherwise modify or limit any of
the provisions of the Purchase Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS BILL
OF SALE, ANY PROVISION OF THE PURCHASE AGREEMENT OR ANY COLLATERAL DOCUMENT, IT
IS THE EXPLICIT INTENT OF EACH PARTY HERETO THAT SELLER IS NOT MAKING ANY
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, BEYOND THOSE
EXPRESSLY GIVEN IN THE PURCHASE AGREEMENT OR ANY COLLATERAL DOCUMENT, INCLUDING
BUT NOT LIMITED TO ANY IMPLIED WARRANTY OR REPRESENTATION AS TO CONDITION,
MERCHANTABILITY OR SUITABILITY AS TO ANY OF THE SUBJECT ASSETS. EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED IN THE PURCHASE AGREEMENT OR ANY COLLATERAL
DOCUMENT, THE SUBJECT ASSETS ARE BEING SOLD ON AN "AS IS, WHERE IS" BASIS.
THE BILL OF SALE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO THE CHOICE OF LAW
PRINCIPLES THEREOF.
IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be executed
and delivered by a duly authorized officer as of the date first above written.
RAYTHEON COMPANY
By:
----------------------------
Name:
-----------------------
Title:
----------------------
65
EXHIBIT B
INTELLECTUAL PROPERTY AGREEMENT
This Intellectual Property Agreement (the "IP Agreement") is dated this
7th day of January 2000, by and between Raytheon Company, a Delaware corporation
and L-3 Communications Corporation, a Delaware corporation, and shall be and
become effective on and as of the Effective Date hereinafter defined.
WITNESSETH
WHEREAS, Seller and Buyer have entered into an Asset Purchase and Sale
Agreement dated as of January 7th, 2000, (the "Asset Purchase and Sale
Agreement"), wherein the parties have agreed to the mutual transfer of certain
intellectual property rights;
WHEREAS, Seller owns various intellectual property rights, including
patents, patent applications, trademarks, copyrights, invention disclosures, and
know-how, in various countries of the world, many of which, pursuant to the
Asset Purchase and Sale Agreement, Seller wishes to assign to Buyer or to
license to Buyer for use within the Businesses (as defined below) and Buyer
wishes to be assigned or licensed such rights from Seller;
WHEREAS, Buyer wishes to license Seller back certain intellectual
property rights and Seller wishes to be licensed back such rights;
WHEREAS, Seller and Buyer wish to provide the above-referenced
assignments and licenses under the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, all capitalized terms (or any variant
in the form thereof) shall have the respective meanings set forth below or
defined elsewhere in this Agreement. Terms defined in the singular shall have a
comparable meaning when used in the plural, and vice versa, and the reference to
any gender shall be deemed to include all genders. Unless otherwise defined or
the context otherwise clearly requires, terms for which meanings are provided
herein shall have such meanings when used in any Schedule hereto and each
Collateral Document (hereinafter defined) and certificate executed or required
to be executed pursuant hereto or thereto or otherwise delivered, from time to
time, pursuant hereto or thereto. Unless otherwise specified, references to
Sections refer to Sections of this Agreement.
66
1.1 "Affiliate" has the meaning set forth in the Asset Purchase and
Sale Agreement.
1.2 "Adverse" or "Adversely" has the meaning set forth in the Asset
Purchase and Sale Agreement.
1.3 "Assumed Liabilities" has the meaning set forth in the Asset
Purchase and Sale Agreement, and further includes the meaning set forth in
Article 9.
1.4 "ASTOR Contract" means the Airborne Surveillance Tracking and
Observation Radar (ASTOR) contract that Seller has entered into with the United
Kingdom.
1.5 "Businesses" has the meaning set forth in the Asset Purchase and
Sale Agreement.
1.6 "Buyer" has the meaning set forth in the Asset Purchase and Sale
Agreement.
1.7 "Contract" has the meaning set forth in the Asset Purchase and Sale
Agreement.
1.8 "Closing" has the meaning set forth in the Asset Purchase and Sale
Agreement.
1.9 "Copyrights" means all of the rights in copyrightable works in
existence at the Closing, including any renewals and extensions of any copyright
registrations, for the United States of America and all other countries foreign
thereto (and including the right to apply for copyright registrations in all
countries of the world), and including all copyright registrations which have
been or may be granted on any of the foregoing.
1.10 "Effective Date" shall refer to the date of the Closing.
1.11 "Field of Businesses" means the fields of activity of the
Businesses on or before Closing.
1.12 "Governmental Authority" has the meaning set forth in the Asset
Purchase and Sale Agreement.
1.13 "Intellectual Property" means Patents, Copyrights, Trademarks,
Know-How, and any other proprietary rights.
1.14 "IP Agreement" means this IP Agreement (including the Schedules)
as may from time to time be amended, modified, supplemented, or waived.
1.15 "Know-How" means all know-how, show-how, data, databases,
technology, inventions (whether patentable or not), improvements, enhancements,
invention disclosures, trade secrets, technical information, Software, Source
Code, documentation, abandoned patent applications, notebooks and drawings that
are not Patents and that are in existence at the Closing.
1.16 "Knowledge" has the meaning set forth in the Asset Purchase and
Sale Agreement.
1.17 "Patents" means all patents, utility models, and patent
applications (whether
67
provisional or otherwise) that are in existence at the Closing, including any
and all divisions, continuations, continuations-in-part, reissues,
re-examinations and extensions thereof, for the United States of America and all
other countries foreign thereto (and including the right to apply for Letters
Patent in all countries of the world), and including all patents which have been
or may be granted on any of the foregoing.
1.18 "Person" has the meaning set forth in the Asset Purchase and Sale
Agreement.
1.19 "Raytheon Integrated Development Process (IDP) and Software Tool
Set (STS)" means the products developed by the Raytheon Interactive Technologies
Support Center located in Pensacola, Florida.
1.20 "Retained Liabilities" has the meaning set forth in the Asset
Purchase and Sale Agreement, and further includes the meaning set forth in
Article 9.
1.21 "Seller's Retained Businesses" means all businesses owned by
Seller, on or before Closing, that are not the Businesses.
1.22 "Seller's Retained Copyrights" means all Copyrights owned by
Seller that in any way relate to both the Businesses and Seller's Retained
Businesses, including, without limitation, those on the Retained Copyright
Schedule attached hereto.
1.23 "Seller's Retained Know-How" means all Know-How owned by Seller
that in anyway relates to both the Businesses and Seller's Retained Businesses,
including, without limitation, Seller's Retained Software, but excludes the
items on the Know-How Schedule attached hereto, Seller's Training Software, and
Seller's Training Updated Software.
1.24 "Seller's Retained Patents" means the Patents listed in the
Retained Patents Schedule attached hereto.
1.25 "Seller's Retained Software" means all Software owned by Seller
that in anyway relates to both the Businesses and Seller's Retained Businesses,
including, without limitation, the Software listed in the Retained Software
Schedule attached hereto, but excludes Seller's Training Software and Seller's
Training Updated Software.
1.26 "Seller's Trademarks" means all Trademarks owned by Seller, but
excludes Seller's Training Trademarks.
1.27 "Seller's Training Copyrights" means all Copyrights owned by
Seller and relates exclusively to the Businesses, but excludes Seller's Retained
Copyrights.
1.28 "Seller's Training Intellectual Property" means Seller's Training
Patents,
Seller's Training Copyrights, Seller's Training Know-How, and Seller's Training
Trademarks.
1.29 "Seller's Training Know-How" means all Know-How owned by Seller
and relates exclusively to the Businesses, including, without limitation, the
items on the Know-How Schedule attached hereto, Seller's Training Software, and
Seller's Training Updated Software, but excludes Seller's Retained Software.
68
1.30 "Seller's Training Patents" means those Patents listed in the
Training Patent Schedule attached hereto, but excludes Seller's Retained
Patents.
1.31 "Seller's Training Software" means the Software listed in the
Training Software Schedule attached hereto.
1.32 "Seller's Training Trademarks" means those Trademarks listed in
the Training Trademark Schedule attached hereto, and further includes any trade
dress in any of the Subject Assets that relates exclusively to the Businesses,
but excludes the word "RAYTHEON," and use of the word "RAYTHEON" in any
Trademarks.
1.33 "Seller's Training Updated Software" means the Software listed in
the Training Updated Software Schedule attached hereto.
1.34 "Seller" has the meaning set forth in the Asset Purchase and Sale
Agreement.
1.35 "Software" means: (i) a computer program or software, in the form
of executable code, consisting of a set of logical instructions and tables of
information that guide the functioning of a central processing unit, including
hardwired logic instructions that manipulate data in central processors, control
input-output operations, and error diagnostic and recovery routines or
instruction sequences in machine-readable code furnished hereunder that control
call processing, peripheral equipment, and administration and maintenance
functions; and (ii) any documentation furnished for use and maintenance of any
Software, in each case whether contained on a magnetic or optical storage
medium, in a semiconductor device, in another memory device or system memory, or
in any other medium whatsoever.
1.36 "Source Code" means software in human-readable form and all
documentation, such as flow charts, schematics, and annotations, that comprise
the preceding detailed design specifications (which constitutes the "embodiment
of the intellectual property" of the software, as such concept is referenced in
Section 365(n) of the United States Bankruptcy Code, as amended), that is
necessary to enable maintenance and modification of the software or any other
version of software incorporating high-level or assembly language that generally
is not directly executable by a processor.
1.37 "Subject Assets" has the meaning set forth in the Asset Purchase
and Sale Agreement.
1.38 "Taxes" has the meaning set forth in the Asset Purchase and Sale
Agreement.
1.39 "Trademarks" means all registered and unregistered trademarks,
trade dress, service marks, certification marks, collective marks, trade names,
icons and logos and registrations in existence at the Closing, including any
applications therefor, including, without limitation, intent-to-use
applications, and including any and all renewals and extensions thereof, for the
United States of America and all other countries foreign thereto (and including
the right to apply for trademarks in all countries of the world), and including
all registrations which have
69
been or may be granted on any of the foregoing, and further including the
goodwill of the businesses associated therewith.
ARTICLE 2
ASSIGNMENTS
Seller hereby assigns, transfers, conveys, delivers and grants to
Buyer, its successors and assigns, all of the right, title and interest which
Seller owns in and to the Seller's Training Intellectual Property, including
Seller's Training Trademarks and the goodwill of the business associated
therewith, and including any rights to sue or recover for, and obtain
injunctions against, any and all past, present and future infringement or
misappropriation of the Seller's Training Intellectual Property to be held and
enjoyed as fully and exclusively as such rights would have been by Seller had
this assignment and transfer not been made. For recording purposes, Seller shall
execute at Closing an assignment of Patents which is substantially identical to
the form attached as IP Schedule 2A, and an assignment of Trademarks which is
substantially identical to the form attached hereto as IP Schedule 2B.
ARTICLE 3
GRANTS OF LICENSES
3.1 Except for the provisions of Sections 3.7 and 3.8, Seller hereby
grants to Buyer, for use solely in the Field of the Businesses, a perpetual,
royalty-free, exclusive, sublicensable, world-wide right and license in and to
the Seller's Retained Patents, subject to any licenses stated in the Third Party
License Schedule attached hereto.
3.2 (a) Except for the provisions of Sections 3.7 and 3.8, Seller
hereby grants to Buyer, for use solely in the Field of the Businesses, a
perpetual, royalty-free, non-exclusive, sublicensable, world-wide right and
license in and to the Seller's Retained Know-How and the Seller's Retained
Copyrights, subject to any licenses stated in the Third Party License Schedule
attached hereto.
(b) Except for the provisions of Sections 3.7 and 3.8, Seller
hereby grants to Buyer, for use solely in commercial applications of the
Businesses as conducted at or before Closing (i.e. sale of the products or
provision of the services of the Businesses to commercial (non-governmental)
customers), a perpetual, royalty-free, non-exclusive, sublicensable, world-wide
right and license in and to Seller's Retained Patents, Seller's Retained
Know-How and the Seller's Retained Copyrights, subject to any licenses stated in
the Third Party License Schedule attached hereto.
3.3 Buyer hereby grants back to Seller a perpetual, royalty-free,
sublicensable, non-exclusive, world-wide right and license in and to the
Seller's Training Patents, Seller's Training Know-How, and Seller's Training
Copyrights, for use solely in Seller's Retained Businesses outside the Field of
the Businesses.
3.4 Buyer hereby grants back to Seller a perpetual, royalty-free,
sublicensable, non-
70
exclusive, world-wide right and license in and to the Seller's Training
Software, for use solely in Seller's Retained Businesses outside the Field of
the Businesses.
3.5 Buyer hereby grants back to Seller a perpetual, royalty-free,
sublicensable, non-exclusive, world-wide right and license in and to the
Seller's Training Updated Software and all improvements, updates, and/or fixes
to Seller's Training Updated Software, for use solely in Seller's Retained
Businesses outside the Field of the Businesses.
3.6 Notwithstanding Section 5.9 of the Asset Purchase and Sale
Agreement, Buyer hereby grants back to Seller a perpetual, royalty-free,
sublicensable, non-exclusive, world-wide right and license in and to Seller's
Training Intellectual Property necessary for Seller to perform its obligations
under the ASTOR Contract, but only to the extent such rights are necessary to
perform Seller's obligations under the ASTOR Contract. Buyer further agrees that
Seller may use Seller's Retained Patents, Seller's Retained Know-How and
Seller's Retained Copyrights to the extent necessary to perform Seller's
obligations under the ASTOR Contract.
3.7 Notwithstanding anything in this IP Agreement (including the
schedules and exhibits attached hereto) to the contrary, this IP Agreement shall
not interfere with, shall not result in any transfer of, and shall not otherwise
affect any Intellectual Property rights relating to any aspect of the Raytheon
Integrated Development Process (IDP) and Software Tool Set (STS).
3.8 Notwithstanding anything in this IP Agreement (including the
schedules and exhibits attached hereto) to the contrary, Seller does not intend
to transfer, assign, or license to Buyer any Intellectual Property where such
transfer, assignment, or license is specifically prohibited by an agreement
between Seller and a third party (including, without limitation, where said
third party is Hughes Electronics Corporation, Telecom, and Texas Instruments
Incorporated). Any purported transfer, assignment or license to Buyer in this IP
Agreement that is prohibited by such an agreement between Seller and a third
party, is to be given no effect.
3.9 (a) Upon Closing, and thereafter, Buyer will attach labels or such
other notifications to packaging, documents, inventory, products,
works-in-progress, brochures, Software, Know-How, or any other products, printed
materials or publications, to cover and/or remove any of Seller's Trademarks, as
may be commercially reasonable, practical, necessary, or required by law, to
reflect that Buyer is the manufacturer and/or source of such products and/or
documents; provided however, that Buyer may, for a reasonable transitional
period not to exceed two (2) months, continue to use stationery and printed
materials on hand in the Businesses that bears Seller's Trademarks subject to
the requirement that Buyer includes on all such stationery and printed materials
a clear and prominent statement that Seller is no longer affiliated with the
Businesses (e.g., by use of an appropriate sticker).
(b) Buyer shall indemnify Seller and its Affiliates, and their
respective employees, officers and directors, and hold them harmless from and
against any claims, damages, judgments, losses, costs and expenses, including
reasonable attorney's fees, that arise out of any claim, threat of litigation or
litigation relating to or arising from Buyer's use of Seller's Trademarks,
whether alone or in combination with other words or designs, under Section
3.9(a)
71
of this IP Agreement. The indemnity under this Section 3.9(b) does not cover
liability for any consequential or punitive damages.
(c) Except for such permitted uses authorized under Section
3.9(a) of this IP Agreement, no rights or licenses are granted to Buyer with
respect to the Seller's Trademarks, whether alone or in combination with other
words or designs.
(d) Buyer acknowledges that: (i) Seller is the owner of all
right, title and interest in and to the Seller's Trademarks, whether alone or in
combination with other words or designs, and Buyer shall not use the Seller's
Trademarks except as expressly authorized by this Agreement; and (ii) after
Closing, Buyer will not and will not permit its Affiliates to (1) take any
action which would interfere with Seller's registration and/or use of the
Seller's Trademarks throughout the world; (2) take any action which would
diminish or dilute the distinctiveness or validity of the Seller's Trademarks;
(3) challenge Seller's ownership of the Seller's Trademarks and/or registrations
thereof; or (4) attempt to register the Seller's Trademarks or any mark
confusingly similar thereto, alone or in combination with other words or
designs, as a Trademark in its own name anywhere in the world.
3.10 (a) Up until Closing, and ten (10) years thereafter, if Buyer or
Seller identifies Intellectual Property that is owned by Seller, transferable,
and relates to the Field of the Businesses, as reasonably confirmed by Seller,
but is not expressly identified as being licensed or assigned under this IP
Agreement, the parties agree to amend this IP Agreement such that: (a) if said
Intellectual Property relates exclusively to the Field of the Businesses, said
Intellectual Property is assigned to Buyer pursuant to Article 2 and is included
under the appropriate defined term and/or schedule such that said Intellectual
Property is subject (if applicable) to the appropriate license back to Seller
under Article 3; and (b) if said Intellectual Property in any way relates to
both the Field of the Businesses and Seller's Retained Businesses, such
Intellectual Property is licensed to Buyer pursuant to Article 3 and is included
under the appropriate defined term and/or schedule.
(b) To the extent that Seller or any of its Affiliates has any
right of a contractual or equitable nature to any Intellectual Property relating
exclusively to the Field of the Businesses, which right has not been perfected
to confer title in the Intellectual Property to Seller, Seller shall cooperate
with Buyer to cause said title to be conveyed to and perfected in Buyer. Buyer
and Seller shall bear equally the out of pocket expenses of conveying and
perfecting title in Buyer, provided however, that Seller's obligations under
this Section 3.10(b) shall not exceed, in the aggregate, two-hundred and fifty
thousand ($250,000) dollars.
3.11 Any license granted in this IP Agreement shall expire when the
subject rights in the relevant Intellectual Property expires or is abandoned,
whichever is earlier; provided however that if either party elects at any time
to abandon, or permit to expire or lapse, any Patents that are the subject of
this IP Agreement, then said party owning said Patents shall first notify the
party being licensed said Patents in writing of this fact, and said party being
licensed said Patents shall have the right to be assigned the aforesaid Patents
without cost.
72
3.12 (a) Subject to the provisions of Section 3.12(b) and (c) below,
Buyer shall be solely responsible for, and bear all costs associated with and
retain all recoveries obtained from, but not be obligated to, the enforcement of
the Intellectual Property licensed to Buyer under this IP Agreement in the Field
of the Business using counsel selected by Buyer and reasonably acceptable to
Seller. Seller shall be solely responsible for, and bear all costs associated
with and retain all recoveries obtained from, but not be obligated to, the
enforcement of the Intellectual Property licensed to Buyer under this IP
Agreement outside the Field of the Business.
(b) Each party shall cooperate with the other in the
enforcement and defense of the Intellectual Property licensed in the present IP
Agreement. Each agrees to give the other notice of any claims, suits or
proceedings challenging the validity or enforceability of any of the
Intellectual Property licensed under this IP Agreement.
(c) Each party shall permit itself to be named, at the sole
expense of the other party, as an additional plaintiff in any suit or proceeding
brought by the other party hereto pursuant to 3.12(a) hereof, against a third
party asserting infringement of any of the Intellectual Property licensed under
this Agreement, if doing so is necessary in order to bring or maintain such
suit. Such other party shall give the party being named at least thirty (30)
days prior written notice before naming it as an additional plaintiff and shall
indemnify and hold such named party harmless against costs, damages, penalties
or expenses incurred by or awarded against it (including reasonable attorneys'
fees, expert fees and costs) as a result of such suit or proceeding. Buyer and
Seller agree to obtain the other party's prior written consent of any settlement
of any suit in which settlement would be adverse to the other party's interest
in the Intellectual Property licensed under this Agreement.
(d) If Buyer receives any recovery, including without
limitation damages, settlement, fees, or license payments, from a third party
based on infringement of any of the Seller's Training Intellectual Property, and
to the extent that such recovery relates to the activities of the Businesses
prior to Closing, after deducting reasonable applicable expenses in obtaining
such recovery, such recovery shall be paid to Seller. Nothing in this Section
3.12(d) shall obligate Seller to be joined or participate in any action seeking
such recovery.
ARTICLE 4
THIRD PARTY INTELLECTUAL PROPERTY
4.1 Anything in this IP Agreement to the contrary notwithstanding, this
IP Agreement shall not constitute an agreement to assign any Contract, or any
claim, contractual obligation or authorization of a Governmental Authority,
lease, commitment, sales, service or purchase order, or any claim, right or
benefit arising thereunder or resulting therefrom, if this IP Agreement would be
deemed an attempted assignment thereof without the required consent, approval or
novation of a third party thereto and would constitute a breach thereof, or in
any way Adversely Affect the rights of Seller or Buyer thereunder. Buyer
acknowledges that the ability of the parties to obtain the consents contemplated
hereunder may be affected by a change in the dynamics of the relevant market
resulting from the IP Agreement or the Asset Purchase and Sale Agreement.
Notwithstanding the foregoing, if such consent, approval or novation is not
obtained, or if the consummation of this IP Agreement would Adversely Affect the
rights of Seller thereunder so that Buyer would not in fact receive the benefit
of all such rights, Seller shall cooperate with Buyer in any arrangement
designed to provide for the benefits thereof to Buyer, including
73
without limitation subcontracting, sublicensing or subleasing to Buyer or
enforcement for the benefit of Buyer of any and all rights of Seller against a
third party thereto arising out of the breach or cancellation by such third
party or otherwise; and any assumption by Buyer of obligations thereunder in
connection with this IP Agreement which shall require the consent, approval or
novation of any third party shall be made subject to such consent, approval or
novation being obtained.
4.2 To the extent that costs are incurred to effect the transfer(s)
contemplated in Section 4.1 and pursuant to Sections 2.6 and 5.2(b) of the Asset
Purchase and Sale Agreement, such costs shall be borne equally by Buyer and
Seller. To Seller's Knowledge, such Intellectual Property rights of third
parties that are nontransferable or require a third party's consent to transfer
said rights includes the items listed in Schedule 3.1(e) of the Asset Purchase
and Sale Agreement.
ARTICLE 5
PATENT PROSECUTION
5.1 Buyer shall reasonably cooperate with Seller, exclusively at
Seller's cost, in the filing, prosecution, maintenance or other attempts to
protect the Seller's Retained Patents, including, without limitation, by
executing those documents as Seller may reasonably require from time to time to
ensure that all right, title and interest in Seller's Retained Patents continues
to reside with Seller.
5.2 Seller shall reasonably cooperate with Buyer, exclusively at
Buyer's cost, in the filing, prosecution, maintenance or other attempts to
protect the Seller's Training Patents, including, without limitation, by
executing those documents as Buyer may reasonably require from time to time to
ensure that all right, title and interest in Seller's Training Patents continues
to reside with Buyer.
ARTICLE 6
ASSIGNABILITY
Neither party may assign this IP Agreement without the consent of the
other party, and such consent shall not be unreasonably withheld, conditioned or
delayed. This IP Agreement may be assigned without the consent of the other
party in the following circumstances: (a) a change in name or legal status of
either party hereto, which change does not affect the nature of the respective
business activities; or (b) the sale by a party hereto of substantially all the
assets of the Businesses to which the licensed rights relate or the sale of a
separable business unit related to a portion of the licensed rights.
ARTICLE 7
CLASSIFIED INFORMATION AND EXPORT CONTROLS
7.1 Buyer acknowledges that Know-How and other Intellectual Property to
be disclosed, transferred, assigned, or licensed to Buyer pursuant to this IP
Agreement and/or the
74
Asset Purchase and Sale Agreement may be considered as "classified information"
by the United States Government, including information that may be classified as
"technical data" under the Arms Control Export Act, and nothing in this IP
Agreement or in the Asset Purchase and Sale Agreement shall require Seller to
disclose such "classified information" to Buyer until such time as Buyer has
received necessary clearances from the United States Government to receive same.
7.2 It is understood that Seller and certain of the Subject Patents,
Copyrights and Know-How are subject to United States laws and regulations
controlling the export of technical data, computer software, laboratory
prototypes and other commodities (including the Arms Export Control Act, as
amended, and the Export Administration Act of 1979), and that Seller's
obligations hereunder are contingent on compliance with applicable United States
export laws and regulations. The transfer of certain technical data and
commodities may require a license from the cognizant agency of the United States
Government and/or written assurances by Buyer that Buyer shall not export data
or commodities to certain foreign countries without prior approval of such
agency. Seller neither represents that a license shall not be required nor that,
if required, it shall be issued.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
8.1 Except as noted in Sections 3.7 and 3.8 of this IP Agreement,
Seller represents and warrants that: (a) to Seller's Knowledge, Seller owns the
entire right, title and interest in and to all Seller's Training Intellectual
Property for use in the Field of the Businesses; (b) to Seller's Knowledge,
except as noted on the Third Party License Schedule attached hereto, Seller has
not granted any license or other rights to Seller's Training Intellectual
Property to any other Person; (c) to Seller's Knowledge, except as noted on the
Third Party License Schedule attached hereto, Seller has not granted any license
or other rights to Seller's Retained Patents, Seller's Retained Copyrights, or
Seller's Retained Know-How to any other Person for use in the Field of the
Businesses; and (d) to Seller's Knowledge, all transferable Intellectual
Property actually used by Seller to conduct the Businesses as conducted at
Closing is being assigned or licensed to Buyer under this IP Agreement.
8.2 EXCEPT AS OTHERWISE PROVIDED IN THIS IP AGREEMENT, SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES: (A) THAT THE INTELLECTUAL PROPERTY ASSIGNED OR
LICENSED UNDER THIS IP AGREEMENT IS SUFFICIENT TO PERMIT BUYER TO OPERATE THE
BUSINESSES AS CONDUCTED AT CLOSING; (B) THAT BUYER'S OPERATION OF THE BUSINESSES
AFTER CLOSING WILL NOT INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF ANY OTHER
PERSON; (C) THAT ANY MANUFACTURE, SALE, OFFER TO SELL, LEASE, IMPORT, USE OR
OTHER DISPOSITION OF PRODUCTS OR SERVICES AFTER THE CLOSING MADE PURSUANT TO THE
INTELLECTUAL PROPERTY RIGHTS ASSIGNED OR LICENSED HEREUNDER WILL BE FREE FROM
INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES; (D) THAT NO OTHER
PERSON IS NOT CURRENTLY INFRINGING THE INTELLECTUAL PROPERTY RIGHTS ASSIGNED OR
LICENSED UNDER THIS IP AGREEMENT; (E) THAT ANY OF THE INTELLECTUAL PROPERTY
75
ASSIGNED OR LICENSED UNDER THIS IP AGREEMENT IS VALID OR ENFORCEABLE OR HAS ANY
PARTICULAR SCOPE OF COVERAGE; OR (F) THAT ANY OR ALL OF THE RIGHTS OF THIRD
PARTIES RECITED IN ARTICLE 4 HEREOF ARE TRANSFERABLE OR SUBLICENSABLE, OR THAT
SELLER HAS OBTAINED OR CAN OBTAIN PERMISSION OR CONSENT TO ANY TRANSFERS OR
SUBLICENSES CONTEMPLATED BY ARTICLE 4.
8.3 Seller hereby represents and warrants that: (a) to Seller's
Knowledge, no Person has charged in writing that any aspect of the Businesses,
at or before Closing, infringes any Intellectual Property of a third party,
except for the items identified in IP Schedule 8.3(a); (b) to Seller's
Knowledge, no aspect of the Businesses, at or before Closing, infringes any
Intellectual Property rights of any third party, with the exception of the items
identified in IP Schedule 8.3(a) (without admitting that the items identified in
IP Schedule 8.3(a) constitute infringement); and (c) to Seller's Knowledge, no
other Person is currently infringing the Intellectual Property rights assigned
or licensed under this IP Agreement.
ARTICLE 9
INFRINGEMENT LIABILITY
9.1 Any and all liabilities, obligations or damages for infringement of
Intellectual Property rights of another Person arising from the operation of the
Businesses before the Closing shall be deemed a Retained Liability under the
Asset Purchase and Sale Agreement for all applicable purposes of the Asset
Purchase and Sale Agreement.
9.2 Any and all liabilities, obligations or damages for infringement of
Intellectual Property rights of another Person arising from the operation of the
Businesses after the Closing shall be deemed an Assumed Liability under the
Asset Purchase and Sale Agreement for all applicable purposes of the Asset
Purchase and Sale Agreement.
ARTICLE 10
TERMINATION
Prior to Closing, this IP Agreement may be terminated: (i) by the
express written consent of both parties; or (ii) automatically upon termination
of the Asset Purchase and Sale Agreement.
ARTICLE 11
NOTICES AND OTHER COMMUNICATIONS
All notices hereunder shall be sufficiently given for all purposes
hereunder if in accordance with Section 12.5 of the Asset Purchase and Sale
Agreement.
ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1 In construing this IP Agreement, the following principles shall be
followed: (i) no
76
consideration shall be given to the captions of the articles, sections,
subsections or clauses, which are inserted for convenience in locating the
provisions of this IP Agreement and not as an aid in construction: (ii) no
consideration shall be given to the fact or presumption that any of the parties
had a greater or lesser hand in drafting this IP Agreement; (iii) examples shall
not be construed to limit, expressly or by implication, the matter they
illustrate; (iv) the word "includes" and its syntactic variants mean "includes,
but is not limited to" and corresponding syntactic variant expressions; (v) the
plural shall be deemed to include the singular, and vice versa; (vi) each gender
shall be deemed to include the other gender; and (vii) each exhibit, appendix,
attachment and schedule to this IP Agreement is a part of this IP Agreement.
12.2 Except as set forth in this IP Agreement, whether this IP
Agreement is or is not consummated, all legal and other costs and expenses
incurred in connection with this IP Agreement and the transactions contemplated
hereby shall be borne equally and shared between Buyer and Seller; provided,
however, that Seller shall pay all fees and Taxes relating to the transfer of or
recordation of transfer of Intellectual Property provided for under this IP
Agreement.
12.3 At and after Closing, each party hereto will execute and deliver
any deeds, bills of sale, assignments, licenses, or assurances, and take and do
any other actions reasonably necessary to vest, perfect or confirm of record or
otherwise, in the other party, any and all right, title and interest in, to and
under any of the rights or benefits acquired or to be acquired by the other
party as a result of, or in connection with, this IP Agreement.
12.4 Seller and Buyer further agree for themselves and for their
successors and assigns, to execute and deliver without further consideration any
further applications, assignments, licenses and other documents, and to perform
such other acts as may be deemed reasonably necessary by the other, its
successors, assigns, and nominees, fully to secure its interest in all of the
aforesaid assignments, licenses, and other grants of benefits by said parties.
12.5 The parties hereto agree that any products covered by Patents
licensed under this IP Agreement shall be marked in such a manner as to conform
with the patent laws and practice of the country of manufacture or sale.
12.6 The parties hereto agree to make its respective employees
reasonably available to the other party, at the other party's expense, to
reasonably assist and otherwise reasonably cooperate in the preparation and
prosecution of applications for Patents, Trademarks, and Copyrights, and to
execute any and all applications, assignments, affidavits and any other papers
in connection therewith necessary to perfect such rights.
12.7 In the event of a conflict between the terms and provisions of
this IP Agreement and the terms and provisions of the Asset Purchase and Sale
Agreement, the terms and provisions of the Asset Purchase and Sale Agreement
shall take precedence, unless and except if the terms and provisions in conflict
relate directly to Intellectual Property, in which case the terms and provisions
of this IP Agreement shall take precedence.
77
12.8 This IP Agreement shall be governed by and construed in accordance
with the contract law of the State of Delaware, excluding questions affecting
the construction and effect of any Patent, the latter of which shall be
determined by the law of the country in which the Patent was granted. Buyer and
Seller consent to and hereby submit to the jurisdiction of any state or federal
court located in the State of Delaware in connection with any action, suit or
proceeding arising out of or relating to this IP Agreement, and each of the
parties hereto irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
12.9 The parties hereto acknowledge that the Asset Purchase and Sale
Agreement and this IP Agreement, and the schedules and exhibits thereto, sets
forth the entire agreement and understanding of the parties hereto as to the
subject matter hereof, and shall not be subject to any change or modification
except by the execution of a written instrument subscribed to by the parties
hereto.
12.10 If any provision of this IP Agreement, including any phrase,
sentence, clause, Section or subsection is inoperative or unenforceable for any
reason, such circumstances shall not have the effect of rendering the provision
in question inoperative or unenforceable in any other case or circumstance, or
of rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatsoever.
12.11 No provision of this IP Agreement may be waived except by a
written instrument signed by the party waiving compliance. No waiver by any
party hereto of any of the requirements hereof or of any of such party's rights
hereunder shall release the other parties from full performance of their
remaining obligations stated herein. No failure to exercise or delay in
exercising on the part of any party hereto any right, power or privilege of such
party shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, power or privilege by such party.
12.12 Except as provided in Article 9 with respect to indemnification
of the indemnified parties hereunder, nothing in this IP Agreement shall confer
any rights upon any Person other than the parties hereto and their respective
successors and permitted assigns.
12.13 This IP Agreement may be executed in multiple original
counterparts, all of which shall be considered one and the same agreement.
12.14 Except as modified below, the confidentiality clause of Section
5.12 of the Asset Purchase and Sale Agreement shall apply to this IP Agreement
and herein be incorporated. For purposes of this Section, any confidential or
secret information that is being assigned to Buyer under this IP Agreement shall
be deemed the confidential or secret information of Buyer and any confidential
or secret information that is being licensed to Buyer under this IP Agreement
shall be deemed the confidential or secret information of Seller. Both sides may
use any confidential
78
or secret information (relating to Intellectual Property licensed under this IP
Agreement) of the other party during the reasonable course of conducting its
business (of which is licensed under this IP Agreement), provided however, that
any disclosures of such confidential or secret information made to third parties
include an obligation to keep such confidential or secret information
confidential.
12.15 In the event of a material breach or threatened material breach
by Buyer of the field of use restrictions imposed on Buyer in Sections 3.1 or
3.2 of this IP Agreement, Seller shall be entitled to seek an injunction
prohibiting any such breach or threatened breach without the posting of any bond
or other security. In addition to injunctive relief, the injured party shall
have all other rights and remedies afforded it by law.
12.16 The non-compete clause of Section 5.9 of the Asset Purchase and
Sale Agreement shall apply to this IP Agreement and herein be incorporated.
12.17. This IP Agreement shall become effective on the Effective Date
and if the Closing does not occur, this Agreement shall be null and void as if
this IP Agreement never existed.
79
IN WITNESS WHEREOF, the parties hereto have caused this IP Agreement to
be executed and delivered, as an instrument under seal, in their names and on
their behalf by their respective officers, thereunto duly authorized, on and as
of the date first set forth above, and to be and become effective on and as of
the Effective Date.
SELLER: RAYTHEON COMPANY
By:
--------------------------------------
Name: Franklyn A. Caine
Title: Senior Vice President
BUYER: L-3 COMMUNICATIONS CORPORATION
By:
--------------------------------------
Name: Christopher C. Cambria
Title: Vice President
80
TRAINING PATENTS SCHEDULE
- -----------------------------------------------------------------------------------------------------------------------------------
PD NO TITLE FILING PATENT ISSUE INVENTOR(S)
DATE NO DATE
- -----------------------------------------------------------------------------------------------------------------------------------
970012 Federated Input Circuit Card Assembly 06/18/97 5,933,656 08/03/99 DD Hansen
- -----------------------------------------------------------------------------------------------------------------------------------
C96011 Competing Opposing Stimulus Simulator 12/03/96 5,829,446 11/03/98 JR Tiffany
Sickness Reduction Technique
- -----------------------------------------------------------------------------------------------------------------------------------
95457 Calibration System and Method for Optical 12/10/96 5,803,570 09/08/98 DA Ansley, CW Chen, JD
System Zimmerman
- -----------------------------------------------------------------------------------------------------------------------------------
C95005 Preventive Maintenance and Diagnostic System 02/29/96 5,754,451 05/19/98 CR Williams
- -----------------------------------------------------------------------------------------------------------------------------------
094458 Catadioptric One-to-One Telecentric Image 03/26/96 5,748,365 05/05/98 CW Chen
Combining System
- -----------------------------------------------------------------------------------------------------------------------------------
C96007 Helmet/Head Mounted Projector System 10/07/96 5,726,671 03/10/98 DA Ansley, CW Chen
- -----------------------------------------------------------------------------------------------------------------------------------
C94003 Lenseless Helmet/Head Mounted Display 12/03/96 5,715,094 02/02/98 DA Ansley, CW Chen, RG Hegg
- -----------------------------------------------------------------------------------------------------------------------------------
C95003 Target Projector Automated Alignment System 06/24/96 5,707,128 01/13/98 JL Dugdale
- -----------------------------------------------------------------------------------------------------------------------------------
C92011 A Rendering and Warping Image Generation 11/27/95 5,684,935 11/04/97 KR Martin, JR Wright, KS
System and Method Herberger, NP Demesa III
- -----------------------------------------------------------------------------------------------------------------------------------
C92011A A Rendering and Warping Image Generation 02/25/93 5,684,935 11/04/97 KR Martin, JR Wright, KS
and System and Method Herberger, NP Demesa III
- -----------------------------------------------------------------------------------------------------------------------------------
095C03 Two Stage Projection System 03/28/96 5,677,788 10/14/97 DA Ansley, CW Chen, JD
Zimmerman
- -----------------------------------------------------------------------------------------------------------------------------------
C93006 Rear Project Screen for High Ambient Light 07/17/94 5,546,202 08/13/96 DA Ansley
Environments Having a Pinhole Area
Substantially Equal to Luminous Area.
- -----------------------------------------------------------------------------------------------------------------------------------
C94002 Uniform-Brightness, High-Gain Display 11/18/94 5,541,769 07/30/96 DA Ansley, AA Sisodia, JD
Structures and Methods Zimmerman
- -----------------------------------------------------------------------------------------------------------------------------------
C92007 A Method of Backscreen Fabrication Using 10/03/94 5,525,272 06/11/96 JL Dugdale
Pre-Coated Material
- -----------------------------------------------------------------------------------------------------------------------------------
81
- -----------------------------------------------------------------------------------------------------------------------------------
PD NO TITLE FILING PATENT ISSUE INVENTOR(S)
DATE NO DATE
- -----------------------------------------------------------------------------------------------------------------------------------
C92008 Method and Apparatus for Aligning Visual 03/01/93 5,424,839 06/13/95 R Lindly, JL Dugdale
Images with Visual Display Devices
- -----------------------------------------------------------------------------------------------------------------------------------
C91015 CGSI Pipeline Performance Improvement 02/22/94 5,420,940 05/30/95 DD Hansen, GG Sanford, MF
Sedlar
- -----------------------------------------------------------------------------------------------------------------------------------
C91015A CGSI Pipeline Performance Improvement 06/16/92 5,420,940 05/30/95 DD Hansen, GG Sanford, MF
Sedlar
- -----------------------------------------------------------------------------------------------------------------------------------
091092 Dynamic Distortion Correction Apparatus 09/12/91 5,414,521 05/09/95 DA Ansley
Method
- -----------------------------------------------------------------------------------------------------------------------------------
C92002 Portable Exploitation and Control System 07/21/94 5,386,371 01/31/95 M Mather, S Haumersen, RL
Eastey
- -----------------------------------------------------------------------------------------------------------------------------------
C92002A Portable Exploitation and Control System 03/24/94 5,386,371 01/31/95 M Mather, S Haumersen, RL
Eastey
- -----------------------------------------------------------------------------------------------------------------------------------
C92005 Terrain and Culture Generation System and 02/04/93 5,359,526 10/25/94 J Nguyen, JG Paffor, RC
Method Whittington
- -----------------------------------------------------------------------------------------------------------------------------------
C91009 Target Image Rendering With Color 04/08/93 5,351,097 09/27/94 KR Brooke
Transparencies
- -----------------------------------------------------------------------------------------------------------------------------------
C92006 Texture Method for Producing Fluid Effects in 09/16/92 5,325,480 06/26/94 JT Rice
Real-Time Simulation
- -----------------------------------------------------------------------------------------------------------------------------------
C92009 Interactive Aircraft Training System and 09/23/92 5,320,538 06/14/94 DR Baum
Method
- -----------------------------------------------------------------------------------------------------------------------------------
084077A Digital Visual and Sensor Simulation System 08/10/90 5,317,689 05/31/94 A Rosman, GN Landis, ML
for Generating Realistic Scenes Nack, NL Moise, RJ McMillen,
TO Ellis, C Yang
- -----------------------------------------------------------------------------------------------------------------------------------
C89010 Multiple Object Pipeline Display System 08/18/92 5,315,692 05/24/94 DD Hansen, JN Clay Jr, MD
Sedler
- -----------------------------------------------------------------------------------------------------------------------------------
C89010B Multiple Object Pipeline Display System 07/22/88 5,315,692 05/24/94 DD Hansen, JN Clay Jr., MD
Sedler
- -----------------------------------------------------------------------------------------------------------------------------------
82
- -----------------------------------------------------------------------------------------------------------------------------------
PD NO TITLE FILING PATENT ISSUE INVENTOR(S)
DATE NO DATE
- -----------------------------------------------------------------------------------------------------------------------------------
C89011 Multiple Object Pipeline Display System 12/03/90 5,315,692 05/24/94 DD Hansen, JN Clay Jr, MD
Sedler
- -----------------------------------------------------------------------------------------------------------------------------------
C90002 Method and System for Authoring, Editing, and 10/30/90 5,287,489 02/15/94 GA Nimmo, MH Johnson, P
Testing Instruction Materials for Use in Hedger
Simulated Training Systems
- -----------------------------------------------------------------------------------------------------------------------------------
C90001 Trainer Using Video Photographs and Overlays 12/22/92 5,286,202 02/15/94 VS Degyarfas, R Saunders
for Reconfigurable Hardware Simulation
- -----------------------------------------------------------------------------------------------------------------------------------
C90015 Tactical Navigation and Target Assessment 05/13/91 5,270,920 12/14/93 D Pearse, W Jones
System
- -----------------------------------------------------------------------------------------------------------------------------------
C91012 Method and Apparatus for Generating High 02/18/92 5,270,756 12/14/93 SN Busenberg
Resolution Vidicon Camera Images
- -----------------------------------------------------------------------------------------------------------------------------------
089387A Non-interfering viewing systems for use in 06/12/92 5,267,061 11/20/93 EC Hazeltine, DA Ansley
catadioptric projection systems
- -----------------------------------------------------------------------------------------------------------------------------------
C92001 Split Static Surround Display System 06/03/92 5,264,881 11/23/93 KR Brooke
- -----------------------------------------------------------------------------------------------------------------------------------
C91001 Digital Computer Graphics Processing Method 07/24/91 5,261,030 11/09/93 KR Brooke
and Apparatus
- -----------------------------------------------------------------------------------------------------------------------------------
C90010 Facsimile Encryption Device 02/07/91 5,259,037 11/02/93 GW Plunk
- -----------------------------------------------------------------------------------------------------------------------------------
C91011 Tunnel Vision Video Display System 02/24/92 5,253,049 10/12/93 KR Brooke
- -----------------------------------------------------------------------------------------------------------------------------------
C91013 Method and Apparatus for Generating High 02/18/92 5,251,037 10/05/93 SN Busenberg
Resolution CCD Camera Images
- -----------------------------------------------------------------------------------------------------------------------------------
C91005 Physically Reconfigurable Interactive Control 10/16/92 5,243,494 09/07/93 DW Miles, HJ Cotner, TG
System Halvorsen
- -----------------------------------------------------------------------------------------------------------------------------------
C91005 Physically Reconfigurable Interactive Control 06/25/91 5,243,494 09/07/93 DW Miles, HJ Cotner, TG
System Halvorsen
- -----------------------------------------------------------------------------------------------------------------------------------
C90017 Condition Monitor Request Processing System 07/15/91 5,240,419 08/31/93 V Degyarfas
- -----------------------------------------------------------------------------------------------------------------------------------
090350 Optics Approach to Low Side Compliance 02/11/91 5,228,856 07/20/93 DB Chang, I Shih
Simulation
- -----------------------------------------------------------------------------------------------------------------------------------
83
- -----------------------------------------------------------------------------------------------------------------------------------
PD NO TITLE FILING PATENT ISSUE INVENTOR(S)
DATE NO DATE
- -----------------------------------------------------------------------------------------------------------------------------------
C90004 Training Device Onboard Instruction Station 09/17/90 5,224,861 07/06/93 RT Obrien, A Plavnieks, CG
Smith III, GD Smith, RH Glass,
WT Tilghman
- -----------------------------------------------------------------------------------------------------------------------------------
C90016 Tactical Route Planning Method for Use in 06/12/91 5,187,667 02/16/93 LO Short
Simulated Tactical Engagements
- -----------------------------------------------------------------------------------------------------------------------------------
C91003 Near-Infinity Image Display System 07/16/91 5,157,503 10/20/92 JL Dugdale
- -----------------------------------------------------------------------------------------------------------------------------------
C89002 3-D Weather for Digital Radar Landmass 06/28/90 5,135,397 08/04/92 CS Yen
Simulation
- -----------------------------------------------------------------------------------------------------------------------------------
085259 Event Tagging Time Delay 02/16/90 5,033,066 07/16/91 DM DeVore
- -----------------------------------------------------------------------------------------------------------------------------------
095673L Method and Apparatus for Processing 07/18/89 4,918,625 04/17/90 JK Yan
Translucent Objects
- -----------------------------------------------------------------------------------------------------------------------------------
084260A Calligraphic Control for Image Superimposition 11/25/88 4,882,577 11/21/89 DM DeVore
- -----------------------------------------------------------------------------------------------------------------------------------
095669L Video Processor Architecture With Distance 12/05/84 4,748,572 05/31/88 RW Lath
Sorting Capability
- -----------------------------------------------------------------------------------------------------------------------------------
095668L Log Mixer Circuit 01/09/85 4,734,875 03/29/88 JK Florence, JW Lath, MA
Rohn
- -----------------------------------------------------------------------------------------------------------------------------------
096667L Video Processor for a Real Time Operation 12/05/84 4,703,439 10/27/87 RW Lotz
Without Overload in a Computer-Generated
Image System
- -----------------------------------------------------------------------------------------------------------------------------------
095666L High Performance Multi-Processor System 02/18/86 4,691,280 09/01/87 WS Bennett
- -----------------------------------------------------------------------------------------------------------------------------------
095665L Computer-Generated Image System to Display 04/30/84 4,679,040 07/07/87 JK Yan
Translucent Features With Anti-Aliasing
- -----------------------------------------------------------------------------------------------------------------------------------
095663L Digital Distortion-Correcting Circuit for 04/01/85 4,656,521 04/07/87 JA Turner, JR Trzeciak
Projecting A Flat Image on a Curved Screen
from a Digital Data Source For A. . .
- -----------------------------------------------------------------------------------------------------------------------------------
095661L Method and Apparatus for Texture Generation 08/02/83 4,615,013 09/30/86 JK Yan, JS Szabo, LY Chen
- -----------------------------------------------------------------------------------------------------------------------------------
84
- -----------------------------------------------------------------------------------------------------------------------------------
PD NO TITLE FILING PATENT ISSUE INVENTOR(S)
DATE NO DATE
- -----------------------------------------------------------------------------------------------------------------------------------
095660L Raster-Scan/Calligraphic Combined Display 07/18/83 4,614,941 09/30/86 KM Jarvis
system for High Speed Processing of Flight
Simulation Data
- -----------------------------------------------------------------------------------------------------------------------------------
095659L Signature Analyzer Card 03/19/84 4,608,691 08/26/86 J Lynch
- -----------------------------------------------------------------------------------------------------------------------------------
C89020 Input/Output System and Method for Digital 06/06/83 4,591,973 05/27/86 FO Ferris, HG Prival
Computers
- -----------------------------------------------------------------------------------------------------------------------------------
095658L Wide angle Area-OF-Interest Visual Image 01/16/84 4,588,382 051/3/86 DL Peters
Projection System
- -----------------------------------------------------------------------------------------------------------------------------------
095657L Data Word Normalization 12/13/82 4,586,154 04/29/86 DN Berry
- -----------------------------------------------------------------------------------------------------------------------------------
095656L Modular Digital Image Generator 07/01/82 4,570,233 02/11/86 JK Yan, JK Florence
- -----------------------------------------------------------------------------------------------------------------------------------
C89018 Programmable Integrated Circuit AC Resistor 01/21/83 4,551,705 11/05/85 RD Anderson
Network
- -----------------------------------------------------------------------------------------------------------------------------------
C89018 Programmable Integrated Circuit AC Resistor 01/21/83 4,551,705 11/05/85 RD Anderson
Network
- -----------------------------------------------------------------------------------------------------------------------------------
095652L Spherical Projection-Type Screen for Use in a 06/21/82 4,514,347 04/30/85 JT Reed
Vehicle Simulator
- -----------------------------------------------------------------------------------------------------------------------------------
095650L High Performance Control Loading System for 12/20/82 4,504,233 03/12/85 BE Sill, DM Galus
Manually-Operable Controls in a Vehicle
Simulator
- -----------------------------------------------------------------------------------------------------------------------------------
095646L Angle Visual System 03/03/81 4,479,784 10/30/84 DI Peters, KS Seity, RA
Mechlenbor, RB Mallinson
- -----------------------------------------------------------------------------------------------------------------------------------
095643L Electronic Compensator for an Electrohydraulic 12/07/81 4,451,769 05/29/84 CL Applegate, GE Minnich
Servovalve
- -----------------------------------------------------------------------------------------------------------------------------------
095641L Compensation Apparatus for an 12/07/81 4,439,716 03/27/84 GE Minnich
Electrohydraulic Servovalve
- -----------------------------------------------------------------------------------------------------------------------------------
095640L Video Projector Adjustable Support 12/29/80 4,433,824 02/28/84 M Koosha
- -----------------------------------------------------------------------------------------------------------------------------------
095639L Servo Control Circuit 11/09/81 4,423,365 12/27/83 JA Turner
- -----------------------------------------------------------------------------------------------------------------------------------
85
- -----------------------------------------------------------------------------------------------------------------------------------
PD NO TITLE FILING PATENT ISSUE INVENTOR(S)
DATE NO DATE
- -----------------------------------------------------------------------------------------------------------------------------------
C89017 Incandescent Lamp Driver Circuit 07/01/82 4,417,183 11/22/83 EE Popard, GW Davison, MF
Seldar
- -----------------------------------------------------------------------------------------------------------------------------------
095638L Ordering System for Pairing Feature 05/15/81 4,414,643 11/08/83 JW Meyer
Intersections on a Simulated Radar Sweepline
- -----------------------------------------------------------------------------------------------------------------------------------
095635L Landing Light Pattern Generator For Simulator 11/07/80 4,404,553 09/13/83 PRP Cuffia
with Selective Addressing for Memory
- -----------------------------------------------------------------------------------------------------------------------------------
095634L Digital Control Circuit for an Analog Servo 08/07/80 4,398,241 08/09/83 EB Baker, JA Turner
- -----------------------------------------------------------------------------------------------------------------------------------
095629L Servo Control System 09/02/80 4,369,400 01/18/83 JC Stubbart, JA Turner
- -----------------------------------------------------------------------------------------------------------------------------------
095627L Front Projection Screen with Precision Gain 03/23/81 4,354,738 10/19/82 FN Forehand, RA Mecklenbor
Control
- -----------------------------------------------------------------------------------------------------------------------------------
095626L Variable Gain Screen Permitting Off-Axis 09/29/80 4,354,737 10/19/82 DL Peters, M Kotskso, RE
Viewing With Image Brightness Remaining Kiemm
Constant
- -----------------------------------------------------------------------------------------------------------------------------------
095625L Circuit Board Connector Indexing Key 07/31/80 4,354,724 10/19/82 HJ Jarmy
- -----------------------------------------------------------------------------------------------------------------------------------
095624L Dome field of View Scene Extenders 12/05/80 4,350,489 09/21/82 DP Gdovin
- -----------------------------------------------------------------------------------------------------------------------------------
095623L Laser Spatial Stabilization Transmission System 01/07/80 4,349,732 09/14/82 CM Whitby
- -----------------------------------------------------------------------------------------------------------------------------------
095622L Aerial Image Visual Display 07/31/80 4,348,187 09/07/82 M Dotsko
- -----------------------------------------------------------------------------------------------------------------------------------
095621L Landing Light Pattern Generator for Digital 11/04/80 4,348,184 09/07/82 RW Moore
Image Systems
- -----------------------------------------------------------------------------------------------------------------------------------
095620L Simulator Structure 07/02/80 4,347,055 08/31/82 RJ Geiger
- -----------------------------------------------------------------------------------------------------------------------------------
095619L Wide Angle Display Device 06/02/80 4,345,817 08/24/82 EC Gwynn
- -----------------------------------------------------------------------------------------------------------------------------------
86
TRAINING PATENTS SCHEDULE (CONTINUED)
PENDING PATENTS
- -----------------------------------------------------------------------------------------------------------------------------------
PD NO TITLE FILING DATE SERIAL NO INVENTOR(S)
- -----------------------------------------------------------------------------------------------------------------------------------
C92003 Database Correlatable Chart Generation 09/08/92 07/941,466 S Nathman, RC Whittington
System and Method
- -----------------------------------------------------------------------------------------------------------------------------------
C96001 Avionic Computer Software Interpreter 05/14/96 08/645,988 JE Shibata
- -----------------------------------------------------------------------------------------------------------------------------------
C96002 Backscreen Edge Contouring for Off-Axis 05/31/96 08/656,674 JA Turner
Large Field of View Displays
- -----------------------------------------------------------------------------------------------------------------------------------
C94001 Multiple Participant Interactive Interface 10/15/96 08/731,354 JT Rice, LA Rosser
- -----------------------------------------------------------------------------------------------------------------------------------
C95004 Rotating Backscreen and/or Projectors for 10/30/96 08/741,064 JA Turner, JL Dugdale
LFF-Axis Large Field of View Display
- -----------------------------------------------------------------------------------------------------------------------------------
C96010 Automated Adaptive Interfaces for Training 06/05/98 09/092,107 RF Jones
Systems
- -----------------------------------------------------------------------------------------------------------------------------------
970364 Head Mounted Projector Using Tapered 07/17/97 09/119,923 AA Sisodia, RE Yaffe
Fiber Optic Relay and Image Combining
System
- -----------------------------------------------------------------------------------------------------------------------------------
970569 Automated Self Adaptive Multimodal User 02/11/97 09/249,224 JR Tiffany, JS Hartman, DJ Jennings
Interface
- -----------------------------------------------------------------------------------------------------------------------------------
970332 Illumination System Including an Angular 04/17/98 09/761,722 CW Chen, EC Fest
Radiation Converter
- -----------------------------------------------------------------------------------------------------------------------------------
87
TRAINING PATENTS SCHEDULE (CONTINUED)
FOREIGN PATENTS
- -----------------------------------------------------------------------------------------------------------------------------------
TITLE COUNTRY CORRESPONDING ISSUE FOREIGN PAT. PENDING STATES
U.S. DATE NUMBER
- -----------------------------------------------------------------------------------------------------------------------------------
System and Technique for Making Holographic Canada 5,151,799 08/25/98 2,058,802
Projection Screens
- -----------------------------------------------------------------------------------------------------------------------------------
System and Technique for Making Holographic Japan 5,151,799 04/16/96 2,510,370
Projection Screens
- -----------------------------------------------------------------------------------------------------------------------------------
System and Technique for Making Holographic Europe 5,151,799 04/09/97 499,372 FRA / GFR / GBT
Projection Screens
- -----------------------------------------------------------------------------------------------------------------------------------
Method and System for Authoring, Editing and Canada 5,287,489 01/25/97 2,052,147
Testing Instruction Materials for Use in
Simulated Training Systems
- -----------------------------------------------------------------------------------------------------------------------------------
Method and System for Authoring, Editing and Israel 5,287,489 08/31/94 99,590
Testing Instruction Materials for Use in
Simulated Training Systems
- -----------------------------------------------------------------------------------------------------------------------------------
Method and System for Authoring, Editing and Japan 5,287,489 03/13/96 2,502,861
Testing Instruction Materials for Use in
Simulated Training Systems
- -----------------------------------------------------------------------------------------------------------------------------------
Method and System for Authoring, Editing and South 5,287,489 10/17/95 90,380
Testing Instruction Materials for Use in Korea
Simulated Training Systems
- -----------------------------------------------------------------------------------------------------------------------------------
Method and System for Authoring, Editing and Taiwan 5,287,489 06/15/93 60,969
Testing Instruction Materials for Use in
Simulated Training Systems
- -----------------------------------------------------------------------------------------------------------------------------------
Method and System for Authoring, Editing and Europe 5,287,489 12/27/96 483,991 GFR / GBT
Testing Instruction Materials for Use in
Simulated Training Systems
- -----------------------------------------------------------------------------------------------------------------------------------
Helmet/Head Mounted Projector System Canada 5,726,671 (pending) (pending)
- -----------------------------------------------------------------------------------------------------------------------------------
Helmet/Head Mounted Projector System Europe 5,726,671 (pending) (pending)
- -----------------------------------------------------------------------------------------------------------------------------------
88
- -----------------------------------------------------------------------------------------------------------------------------------
TITLE COUNTRY CORRESPONDING ISSUE FOREIGN PAT. PENDING STATES
U.S. DATE NUMBER
- -----------------------------------------------------------------------------------------------------------------------------------
Avionic Computer Software Interpreter Canada 08/645,988 (pending) (pending)
- -----------------------------------------------------------------------------------------------------------------------------------
Software Interpreter for Aviation Electronics Japan 08/645,988 04/10/98 JP 10091598 A
Computer
- -----------------------------------------------------------------------------------------------------------------------------------
Avionic Computer Software Interpreter Israel 08/645,988 (pending) (pending)
- -----------------------------------------------------------------------------------------------------------------------------------
Avionic Computer Software Interpreter Europe 08/645,988 11/19/97 EP 807882A2 DE/FR/GB
- -----------------------------------------------------------------------------------------------------------------------------------
Device for Reducing Competing and Opposite Japan 5,829,446 12/8/98 JP1032668A
Stimulus Simulator Sickness
- -----------------------------------------------------------------------------------------------------------------------------------
Apparatus for Reducing Video Simulator Europe 5,829,446 11/03/98 EP84702742
Induced Sickness
- -----------------------------------------------------------------------------------------------------------------------------------
Avionic Computer Software Interpreter Europe (pending) 04/15/98 EP807862A3
- -----------------------------------------------------------------------------------------------------------------------------------
89
RETAINED PATENTS SCHEDULE
- -----------------------------------------------------------------------------------------------------------------------------------
PD NO TITLE FILING PATENT ISSUE INVENTOR(S)
DATE NO DATE
- -----------------------------------------------------------------------------------------------------------------------------------
C96008 Wide-FOV Simulator Heads-Up Display With 01/27/97 5,907,416 05/25/99 CW Chen, JE Gunther, DD
Selective Holographic Reflector Combiner Hansen, RG Hegg
- -----------------------------------------------------------------------------------------------------------------------------------
970333 Novel Anamorphic Projection Optical System 12/10/97 5,890,788 04/06/99 CW Chen, RG Hegg, JL
Dugdale, JW Schaefer
- -----------------------------------------------------------------------------------------------------------------------------------
095296 Chromatic Aberration Correction for Display 05/21/97 5,889,625 03/30/99 CW Chen, RE Yaffe, KE
Systems Bentley
- -----------------------------------------------------------------------------------------------------------------------------------
C96003A System and Method for Multimodal Interactive 04/09/96 5,885,083 03/23/99 JG Ferrell
Speech and Language Training
- -----------------------------------------------------------------------------------------------------------------------------------
093036 Distortion Corrected Display 01/10/95 5,748,264 05/05/98 RG Hegg
- -----------------------------------------------------------------------------------------------------------------------------------
092625 Modular Helmut-Mounted Display 01/10/95 5,677,795 10/14/97 RG Hegg
- -----------------------------------------------------------------------------------------------------------------------------------
C92017 A Color Helmet Mountable Display 04/22/96 5,612,708 03/18/97 DA Ansley, WS Beamon III
- -----------------------------------------------------------------------------------------------------------------------------------
095677L Head Mounted Visual Display 12/05/94 5,581,271 12/03/96 W. Kraemer
- -----------------------------------------------------------------------------------------------------------------------------------
C92015 LCD With Integral Light Confinement Having a 12/12/95 5,574,580 11/12/96 DA Ansley
Pair of Afocal Lenslets Positioned Between
Liquid Crystal Cells and Color Polarizers
- -----------------------------------------------------------------------------------------------------------------------------------
C93003 Fiber optic ribbon display 12/16/94 5,546,492 08/13/95 DA Ansley, AA Sisodia
- -----------------------------------------------------------------------------------------------------------------------------------
C92016 Ultra-Wide Field of View, Broad Spectral Band 10/01/93 5,499,139 03/13/96 CW Chen, KE Bentley
Helmet Visor Display Optical System
- -----------------------------------------------------------------------------------------------------------------------------------
C93003 Fiber optic ribbon subminiature display for 01/28/94 5,416,876 05/16/95 DA Ansley, AA Sisodia
head/helmet mounted display
- -----------------------------------------------------------------------------------------------------------------------------------
C93004 Computer-based data integration and 02/28/94 5,416,694 05/16/95 R Freundenbe, A Scsigulinsky,
management process for workforce planning EJ Parrish, R Cho
and occupational readjustment
- -----------------------------------------------------------------------------------------------------------------------------------
C92004 Helmet Mounted Display Including 09/16/92 5,319,490 06/07/94 DA Ansley
Synchronously Moving Tilted Mechanisms
- -----------------------------------------------------------------------------------------------------------------------------------
90
- -----------------------------------------------------------------------------------------------------------------------------------
PD NO TITLE FILING PATENT ISSUE INVENTOR(S)
DATE NO DATE
- -----------------------------------------------------------------------------------------------------------------------------------
C89007 Architecture for Utilizing Coprocessing Systems 02/19/93 5,283,828 02/01/94 R Saunders, EC Francisco
to Increase Performance in Security Adapted
Computer Systems
- -----------------------------------------------------------------------------------------------------------------------------------
C89006 System for Providing High Security for Personal 03/01/91 5,263,147 11/16/93 R Saunders, EC Francisco
Computers and Workstations
- -----------------------------------------------------------------------------------------------------------------------------------
091114 Non-Interfering Color Viewing System Using 09/23/91 5,260,729 11/09/93 DA Ansley
Spectral Multiplexing
- -----------------------------------------------------------------------------------------------------------------------------------
090180 System Techniques for Making Holographic 02/11/91 5,151,799 09/29/92 DA Ansley
Projection Screens
Graphical User Interface System for 5,740,037
Manportable Applications
- -----------------------------------------------------------------------------------------------------------------------------------
Foreign Patent
- -----------------------------------------------------------------------------------------------------------------------------------
TITLE COUNTRY CORRESPONDING ISSUE FOREIGN PAT. PENDING STATES
U.S. DATE NUMBER
- -----------------------------------------------------------------------------------------------------------------------------------
Graphical User Interface System for Europe 5,740,037 04/14/98 EP817994A1
- -----------------------------------------------------------------------------------------------------------------------------------
Manportable Applications
- -----------------------------------------------------------------------------------------------------------------------------------
91
RETAINED PATENTS SCHEDULE (CONTINUED)
PENDING PATENTS
- -----------------------------------------------------------------------------------------------------------------------------------
PD NO TITLE FILING DATE SERIAL NO INVENTOR(S)
- -----------------------------------------------------------------------------------------------------------------------------------
C92010A Interactive Computerized Witness 08/06/92 08/442,689 ME Stickney, WE Kemp Jr
Interrogation Recording Tool
- -----------------------------------------------------------------------------------------------------------------------------------
C96012 Computer-Based Data Integration and 03/21/97 08/823,292 CR Beck, DS Boyer, KH Roadman, PA Irvin,
Management Processing System and Method SS Arnold, WH Wetzel
for Producing Employee Development Plans
(Predictor TM)
- -----------------------------------------------------------------------------------------------------------------------------------
970271 Method and Apparatus for Modeling 06/01/98 09/088,171 JG Ferrell
Individual Learning Styles
- -----------------------------------------------------------------------------------------------------------------------------------
92
KNOW-HOW SCHEDULE
- -----------------------------------------------------------------------------------------------------------------------------------
PD NO TITLE DOCKETING SERIAL NUMBER (IF INVENTOR(S)
DATE AN ABANDONED
APPLICATION)
- -----------------------------------------------------------------------------------------------------------------------------------
970223 Keyboard Down Slope 06/03/98 09/089,633 TV Alsfeld
- -----------------------------------------------------------------------------------------------------------------------------------
970630 High Resolution Light Point Enhancement 11/19/97 JA Turner
- -----------------------------------------------------------------------------------------------------------------------------------
970631 Virtual Vignetting for Simulated head-up Displays 11/19/97 RG Hegg
- -----------------------------------------------------------------------------------------------------------------------------------
970504 Digital Light Processing Elements Used in Lieu of 09/23/97 VG Bonilla, DD Hansen
Multiple Function Displays for Simulators
- -----------------------------------------------------------------------------------------------------------------------------------
970383 The Weapons Director Visualization Trainer 07/31/97 P Russo, VG Bonilia
- -----------------------------------------------------------------------------------------------------------------------------------
C91007A Performance Support System to Aid Human 06/24/96 08/728,135 DB Cleland, HD Ryng, M Reakes
Resource Administrators
- -----------------------------------------------------------------------------------------------------------------------------------
C96005 Distributed Simulation Contact Anticipation 03/18/96 HJ Smith, J Policella
Algorithm
- -----------------------------------------------------------------------------------------------------------------------------------
C95012 Hyperbolic Visual Screens 12/15/95 RJ Gieger
- -----------------------------------------------------------------------------------------------------------------------------------
C95010 Software Emulation of An Aydin Display System 11/06/95 JA Lodden, KE Hurley, LH
Velasquez, R Patel, RP Addsen
- -----------------------------------------------------------------------------------------------------------------------------------
C95006 Sibiess Design 09/07/95 D Thorton, CM Cheatham, R
Horton
- -----------------------------------------------------------------------------------------------------------------------------------
C95007 Motion Base Test Approach 09/07/95 DC Gaines
- -----------------------------------------------------------------------------------------------------------------------------------
95676L Large Lightweight Curved Mirror Especially for 12/20/94 08/359,846 AC WU
Simulation
- -----------------------------------------------------------------------------------------------------------------------------------
C90009A Oblique Photographic Database Generation 08/09/93 08/106,770 GW Plunk
- -----------------------------------------------------------------------------------------------------------------------------------
C93005 Jobmap Software Tool 08/06/93 R Freundenbe, A Scsigulinsky,
EJ Parrish, R Cho
- -----------------------------------------------------------------------------------------------------------------------------------
C93002 Process for Generating Terrain Elevation Data from 06/28/93 JA Gipson, JT Rice
Synthetic Visual Environments
- -----------------------------------------------------------------------------------------------------------------------------------
C91004A Time-Division Multiplexed Image Generation 03/13/93 08/034,005 KR Brooke
- -----------------------------------------------------------------------------------------------------------------------------------
C92012 Enhanced Resolution for Visual Simulation 08/17/92 CH Waldhauer J
- -----------------------------------------------------------------------------------------------------------------------------------
93
- -----------------------------------------------------------------------------------------------------------------------------------
PD NO TITLE DOCKETING SERIAL NUMBER (IF INVENTOR(S)
DATE AN ABANDONED
APPLICATION)
- -----------------------------------------------------------------------------------------------------------------------------------
C91014A Improved Display System 06/30/92 07/907,770 KR Brooke
- -----------------------------------------------------------------------------------------------------------------------------------
91223 Virtual Image Entertainment 02/24/92 07/810,219 AF Harvard
- -----------------------------------------------------------------------------------------------------------------------------------
C91016 Remote Reset Circuitry 11/15/91 DS Stoica, EC Francisco
- -----------------------------------------------------------------------------------------------------------------------------------
C91010 Automated Industrial Process Simulator 10/23/91 07/781,795 RA Raone, RE Powers, VS
Degyarfas
- -----------------------------------------------------------------------------------------------------------------------------------
C90014 Expert System Scheduler and Scheduling Method 08/15/91 07/745,566 K Hamling
- -----------------------------------------------------------------------------------------------------------------------------------
C90018 Efficient Storage of Geographic Data for Visual 08/15/91 07/745,633 MH Johnson
Displays
- -----------------------------------------------------------------------------------------------------------------------------------
C90008 Image Enhancement System for Color Video 05/20/91 07/704,566 CH Waldhauer J., R Saunders
Display
- -----------------------------------------------------------------------------------------------------------------------------------
C91006 Universal Alignment Stand 04/11/91 DC Johnson, MS Freeman
- -----------------------------------------------------------------------------------------------------------------------------------
C91002 Real Time Interactive Entertainment Simulation 02/15/91 JW Dewey, RU Walzer
Center
- -----------------------------------------------------------------------------------------------------------------------------------
C90013 Expandable Microsphere Expansion Through 09/14/90 TA Krueger
Controlled Exotherm
- -----------------------------------------------------------------------------------------------------------------------------------
C90009A Oblique Photographic Database Generation 08/31/90 08/106,770 GW Plunk
- -----------------------------------------------------------------------------------------------------------------------------------
C90011 Rear Projection Faceted Dome 08/09/90 TA Krueger
- -----------------------------------------------------------------------------------------------------------------------------------
C90007 Technique for Simulating Radiated Energy 06/04/90 RJ Morrow
Reflection from Complex Surfaces
- -----------------------------------------------------------------------------------------------------------------------------------
C89009 * Abstract Visual Database Format 05/11/89 RB Adams II
- -----------------------------------------------------------------------------------------------------------------------------------
C89008 * Deaomm Hypercard Application 05/01/89 LD Roane
- -----------------------------------------------------------------------------------------------------------------------------------
C89001 Solid State Finger Tip Input Device 01/30/89 BW Yeager, GH Dewitz
- -----------------------------------------------------------------------------------------------------------------------------------
C89004 Scanned Image Stabilization System 01/30/89 CH Waldhauer Jr, HC Gallaher
- -----------------------------------------------------------------------------------------------------------------------------------
C89005 Relative Motion Detector for Camera Model 01/30/89 CH Waldhauer J, HC Callaher
Indexer
- -----------------------------------------------------------------------------------------------------------------------------------
* Confidential Information / Trade Secret
94
TRAINING TRADEMARK SCHEDULE
- -----------------------------------------------------------------------------------------------------------------------------------
MARK COUNTRY OF APPL. FILING DATE SERIAL NUMBER REGISTRATION DATE REG. NUMBER RENEWAL DATE
- -----------------------------------------------------------------------------------------------------------------------------------
LINK United States 04/10/1946 71-499955 05/04/1948 438,568 05/04/2008
- -----------------------------------------------------------------------------------------------------------------------------------
LINK United States 01/25/1965 72-210556 08/09/1966 812,505 08/09/2006
- -----------------------------------------------------------------------------------------------------------------------------------
LINK United States 01/19/1965 72-210204 05/20/1969 869,653 05/20/2009
- -----------------------------------------------------------------------------------------------------------------------------------
AST United States 11/02/1978 73-191791 11/03/1981 1,175,887 11/03/2001
- -----------------------------------------------------------------------------------------------------------------------------------
LINK (design) United States 12/10/1991 74-228994 11/30/1993 1,807,131 11/03/2003
- -----------------------------------------------------------------------------------------------------------------------------------
SIMUSPHERE(1) United States 05/21/1999 75-710965 (pending) (pending) (pending)
- -----------------------------------------------------------------------------------------------------------------------------------
CLEARVUE(2) United States 08/11/1998 75-533887 (pending) (pending) (pending)
- -----------------------------------------------------------------------------------------------------------------------------------
LINK Australia A329,527 03/01/2000
- -----------------------------------------------------------------------------------------------------------------------------------
LINK Denmark 0667/1968 03/08/2008
- -----------------------------------------------------------------------------------------------------------------------------------
LINK France 1,471,111 06/14/2008
- -----------------------------------------------------------------------------------------------------------------------------------
LINK Spain(3) 512,313 04/06/2008
- -----------------------------------------------------------------------------------------------------------------------------------
LINK United Kingdom 1,109,507 02/14/2000
- -----------------------------------------------------------------------------------------------------------------------------------
AMI Common Law
- -----------------------------------------------------------------------------------------------------------------------------------
ARTS Common Law
- -----------------------------------------------------------------------------------------------------------------------------------
BRITESTAR Common Law
- -----------------------------------------------------------------------------------------------------------------------------------
GEOMENTOR Common Law
- -----------------------------------------------------------------------------------------------------------------------------------
ITEMS Common Law
- -----------------------------------------------------------------------------------------------------------------------------------
pDRLMS Common Law
- -----------------------------------------------------------------------------------------------------------------------------------
SEMS Common Law
- -----------------------------------------------------------------------------------------------------------------------------------
TRUEGUIDE Common Law
- -----------------------------------------------------------------------------------------------------------------------------------
TRUELINK Common Law
- -----------------------------------------------------------------------------------------------------------------------------------
TRUESOUND Common Law
- -----------------------------------------------------------------------------------------------------------------------------------
- --------
(1) This application is pending under section 1(b)
(2) This application is pending under section 1(b)
(3) Payment of next tax is due on March 6, 2003
95
RETAINED SOFTWARE SCHEDULE
- -----------------------------------------------------------------------------------------------------------------------------------
PROGRAM ITEM DESCRIPTION VERSION/PART# TYPE
- -----------------------------------------------------------------------------------------------------------------------------------
F-22 PTD A2A Assembly to Ada software Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 UTD J2A Jovial to Ada Software
- -----------------------------------------------------------------------------------------------------------------------------------
96
TRAINING UPDATED SOFTWARE SCHEDULE
- -----------------------------------------------------------------------------------------------------------------------------------
PROGRAM ITEM DESCRIPTION VERSION/ PART # TYPE
- -----------------------------------------------------------------------------------------------------------------------------------
AH-1W SEMS Software Engineering Management System (SEMS) 6.1.4 Software
- -----------------------------------------------------------------------------------------------------------------------------------
ATC RightView Real-time and control software for radar simulation Software
- -----------------------------------------------------------------------------------------------------------------------------------
C-130 H2/3 TrueForce ECL operating system Software
- -----------------------------------------------------------------------------------------------------------------------------------
AH-1W TrueGuide TrueGuide IOS 2.1 Software
- -----------------------------------------------------------------------------------------------------------------------------------
97
SELLER'S TRAINING SOFTWARE SCHEDULE
- -----------------------------------------------------------------------------------------------------------------------------------
PROGRAM ITEM DESCRIPTION ERSION/ PART # TYPE
- -----------------------------------------------------------------------------------------------------------------------------------
F-18 Lrip Agr Database Air to Ground Radar Database Software
Database
- -----------------------------------------------------------------------------------------------------------------------------------
F-18 LRIP AGR RT SW Air to Ground Radar Real-time software Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-18 LRIP AGR Tools Air to Ground Radar Off-line Tools Software
- -----------------------------------------------------------------------------------------------------------------------------------
AH-1W Approach Map Common IOS approach Map Software 2.3 Software
- -----------------------------------------------------------------------------------------------------------------------------------
B-2 ARMS Advanced Radar Modeling Systems Software
- -----------------------------------------------------------------------------------------------------------------------------------
AH-1W ARTS Ada Real-Time Systems (ARTS) 2.1.4 Software
- -----------------------------------------------------------------------------------------------------------------------------------
C-130 H2/3 ARTS Ada Real-Time Systems (ARTS) 2.1 Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-117 ARTS Ada Real-Time Systems (ARTS) A1 Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 TAF ARTS Ada Real-Time Systems (ARTS) Software
- -----------------------------------------------------------------------------------------------------------------------------------
B-2 CMTK Common Map Toolkit Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-18 LRIP Common IOS IOS software Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-18 LRIP CompuScene to CompuScene format to RightView format Software
RightView
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 TAF DIS DIS libraries Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 TAF Engine Engine Simulator software Software
- -----------------------------------------------------------------------------------------------------------------------------------
AH-1W GCG Graphics code generator A1 Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 TAF GCG Graphics Translator Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 UTD GPI Generic Panel Interface software Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-18 LRIP IDB Internal Database Format Software
Database
- -----------------------------------------------------------------------------------------------------------------------------------
B-2 IMDB Interface Management Database Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-18 LRIP IOS Toolkit IOS toolkit Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 UTD JARM D/B Editor JARM database editor Software
Bahrain
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 UTD JARM D/B Editor JARM database editor Software
Korea
- -----------------------------------------------------------------------------------------------------------------------------------
98
- -----------------------------------------------------------------------------------------------------------------------------------
PROGRAM ITEM DESCRIPTION ERSION/ PART # TYPE
- -----------------------------------------------------------------------------------------------------------------------------------
F-18 LRIP MCE Mission Computer Emulator Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 TAF MSS MSS software Software
- -----------------------------------------------------------------------------------------------------------------------------------
C-130 H2/3 MST Microprocessor simulation technology motion equations Software
- -----------------------------------------------------------------------------------------------------------------------------------
C-130 H2/3 pDRLMS Real-time and control software for radar simulation Software
- -----------------------------------------------------------------------------------------------------------------------------------
E2C France pDRLMS Real-time and control software for radar simulation Software
- -----------------------------------------------------------------------------------------------------------------------------------
E2C Navy pDRLMS Real-time and control software for radar simulation Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 TAF pDRLMS Real-time and control software for radar simulation Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-18 LRIP RightTools Visual software tools Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 UTD RightView Real-time and control software for visual software Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 UTD RightView Real-time and control software for visual software Software
Bahrain
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 UTD RightView Real-time and control software for visual software Software
Egypt
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 UTD RightView Real-time and control software for visual software Software
Korea
- -----------------------------------------------------------------------------------------------------------------------------------
F-18 LRIP RightView Real-time and control software for visual software Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-22 PTD RightView Real-time and control software for visual software Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-18 LRIP RightView to RightView format to CompuScene format Software
CompuScene
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 UTD RWR Radar Warning Receiver (RWR) Software (items interface) Software
Bahrain
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 UTD RWR Radar Warning Receiver (RWR) Software (items interface) Software
Egypt
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 UTD RWR Radar Warning Receiver (RWR) Software (items interface) Software
Korea
- -----------------------------------------------------------------------------------------------------------------------------------
B-2 sDRLMS Soft DRLMS Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 UTD sDRLMS Soft DRLMS Software
Egypt
- -----------------------------------------------------------------------------------------------------------------------------------
AH-1W SEMS Software Engineering Management System (SEMS) for IOS 6.1.3 Software
- -----------------------------------------------------------------------------------------------------------------------------------
AH-1W SEMS Software Engineering Management System (SEMS) A1 Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 TAF SEMS Software Engineering Management System (SEMS) Software
- -----------------------------------------------------------------------------------------------------------------------------------
99
- -----------------------------------------------------------------------------------------------------------------------------------
PROGRAM ITEM DESCRIPTION ERSION/ PART # TYPE
- -----------------------------------------------------------------------------------------------------------------------------------
F-22 PTD Simulator HUD Simulator specific Optical HUD (Optical Barrel Assembly) 506582 Data
- -----------------------------------------------------------------------------------------------------------------------------------
MULTI SMARTS Software Management Activity Report Tracking System Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 TAF Symbol Dictionary FORTRAN Symbol Dictionary Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 UTD TCE Model Tactical Combat Environment models Software
Egypt
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 TAF TRACK Point Track software Software
- -----------------------------------------------------------------------------------------------------------------------------------
C-130 H2/3 TrueLink Signal conditioning equipment support software Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-16 TAF TrueLink Signal conditioning equipment support software Software
- -----------------------------------------------------------------------------------------------------------------------------------
F-22 PTD TrueLink Signal conditioning equipment support software Software
- -----------------------------------------------------------------------------------------------------------------------------------
C-130 H2/3 TrueSound Aural cue/communications programmable digital sound Software
generation software
- -----------------------------------------------------------------------------------------------------------------------------------
100
RETAINED COPYRIGHT SCHEDULE
All Copyrights in and to any Seller's Retained Software.
101
THIRD PARTY LICENSE SCHEDULE
- -----------------------------------------------------------------------------------------------------------------------------------
PD NO TITLE PATENT NO LICENSE OBLIGATION
- -----------------------------------------------------------------------------------------------------------------------------------
C93004 Computer-based data integration and management process for workforce 5,416,694 License to TRW
planning and occupational readjustment
- -----------------------------------------------------------------------------------------------------------------------------------
090180 System Techniques for Making Holographic Projection Screens 5,151,799 Pending license to a third party
- -----------------------------------------------------------------------------------------------------------------------------------
091114 Non-Interfering Color Viewing System Using Spectral Multiplexing 5,260,729 Pending license to a third party
- -----------------------------------------------------------------------------------------------------------------------------------
Each item of the Intellectual Property transferred under this IP agreement may
be subject to such rights, if any, as the United States Government has.
102
IP SCHEDULE 2A
ASSIGNMENT
WHEREAS, RAYTHEON COMPANY, a corporation organized and
existing under the laws of the State of Delaware (the "ASSIGNOR"), is the sole
and exclusive owner, by assignment, of certain United States Letters Patents,
Letters Patents of foreign countries, and United States and foreign patent
applications, listed in the attached Training Patents Schedule, and
WHEREAS, L-3 COMMUNICATIONS CORPORATION, a corporation
organized and existing under the laws of the State of Delaware (the "ASSIGNEE"),
is desirous of acquiring the entire right, title, and interest in and to such
United States Letters Patents, Letters Patents of foreign countries, and United
States and foreign patent applications;
NOW, THEREFORE, in consideration of the sum of One Dollar
($1.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the ASSIGNOR, the ASSIGNOR does hereby
assign, transfer, convey, deliver and grant unto the ASSIGNEE, all right, title,
and interest in and to the United States Letters Patents, Letters Patents of
foreign countries, and United States and foreign patent applications, listed in
the attached Training Patents Schedule, including the right to sue and recover
for all past, present and future infringement of any of said Patents;
And the ASSIGNOR hereby agrees to sign all lawful documents
and make all rightful oaths and declarations relating to the United States
Letter Patents, Letters Patents of foreign countries, and United States and
foreign patent applications, when reasonably requested to do so by the ASSIGNEE;
And the ASSIGNOR hereby authorizes and requests the
Commissioner of Patents and Trademarks or any other proper officer or agency of
any country to issue all the Letters Patent to the ASSIGNEE.
WHEREIN, the ASSIGNOR'S agent sets its hand and seal:
Date: RAYTHEON COMPANY
--------------------
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
103
NOTARY
State of _______________ )
) ss.
County of ______________ )
On this _____________ day of ____________, 2000, before me personally
came ____________________________, to me known to be __________________________
of RAYTHEON COMPANY, a corporation organized and existing under the laws of the
State of Delaware, the ASSIGNOR above-named, and acknowledged that he/she
executed the foregoing instrument named, and acknowledged that he/she executed
the foregoing instrument as his/her free act on behalf of the ASSIGNOR and
pursuant to authority duly received.
Notary Public
My Commission Expires
(SEAL)
104
IP SCHEDULE 2B
ASSIGNMENT
WHEREAS, RAYTHEON COMPANY, a corporation organized and
existing under the laws of the State of Delaware (the "ASSIGNOR"), has adopted
and is using the marks listed in the attached Training Trademark Schedule, which
are registered in the United States Patent and Trademark Office or has applied
for registration in the United States Patent and Trademark Office (including
applications under ss.1(b)) or has rights under common law;
WHEREAS, L-3 COMMUNICATIONS CORPORATION, a corporation
organized and existing under the laws of the State of Delaware (the "ASSIGNEE"),
is desirous of acquiring the marks and the associated applications,
registrations, and rights and the assets relating to the ongoing and existing
business of ASSIGNOR to which the marks pertain and the underlying goodwill of
the portion of the business associated with and symbolized by the marks;
NOW THEREFORE, in consideration of the sum of One Dollar
($1.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the ASSIGNOR, the ASSIGNOR does hereby
assign, transfer, convey, deliver and grant assign unto the ASSIGNEES, all
right, title, and interest in and to the marks and the associated applications,
registrations, and rights and the assets relating to the ongoing and existing
businesses of ASSIGNOR to which the marks pertain (the details of which are set
out in a separate instrument), and the underlying goodwill of the portion of the
business associated with and symbolized by the marks listed in the attached
Training Trademark Schedule;
And the ASSIGNOR hereby agrees to sign all lawful documents
and make all rightful oaths and declarations relating to the marks when
reasonably requested to do so by the ASSIGNEE.
WHEREIN, the ASSIGNOR'S agent sets its hand and seal:
Date: RAYTHEON COMPANY
--------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
105
NOTARY
State of _______________ )
) ss.
County of ______________ )
On this _____________ day of ____________, 2000, before me personally
came _______________________, to me known to be __________________________ of
RAYTHEON COMPANY, a corporation organized and existing under the laws of the
State of Delaware, the ASSIGNOR above-named, and acknowledged that he/she
executed the foregoing instrument named, and acknowledged that he/she executed
the foregoing instrument as his/her free act on behalf of the ASSIGNOR and
pursuant to authority duly received.
Notary Public
My Commission Expires
(SEAL)
106
IP SCHEDULE 8.3(A)
Letter from Levin & Hawes dated November 3, 1999, offering a license.
Letter from AVKM Company dated December 17, 1999, identifying U.S. Patent No.
5,999,232.
107
EXHIBIT C
FORM OF ENVIRONMENTAL ACCESS AGREEMENT
FOR THE BINGHAMTON FACILITY
THIS ENVIRONMENTAL ACCESS AGREEMENT (the "Access Agreement"), dated as
of ______, is by and between Raytheon Company, a Delaware corporation
("Raytheon"), L-3 Communications Corporation, a Delaware corporation ("L-3"),
and the Broome County Industrial Development Agency ("Broome County").
WHEREAS, Raytheon and L-3 have executed an Asset Purchase and Sale
Agreement dated ____ pursuant to which L-3 will acquire from Raytheon, among
other things, assets relating to the Businesses that are currently being
conducted by Raytheon at the land and building(s) included in a leased facility
in the Kirkwood Industrial Park on Colesville Road in Kirkwood, New York (the
"Facility") that is owned by Broome County; and
WHEREAS, Raytheon desires to conduct environmental investigations at
the Facility before and after the acquisition by L-3 that may result in Raytheon
(or third parties acting at Raytheon's request) undertaking additional
environmental investigations and environmental remediation activities at the
Facility;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be bound hereby, the parties hereto hereby
agree as follows:
Section 1. Raytheon shall have the right of access to and use of the
Facility in accordance with the terms and subject to the conditions described
herein for the purposes of:
(A) performing environmental inspections and investigations at
the Facility, including, but not limited to, the sampling of soil, soil vapor
and groundwater, in accordance with standard sampling and testing protocols, and
*
(B) performing environmental remediation activities at the
Facility, including, but not limited to, the installation and operation of soil
and groundwater remediation systems and associated monitoring activities.
Section 2. In the event that Raytheon performs sampling activities at
the Facility pursuant to Section 1(A) of this Access Agreement:
(A) Raytheon shall be obligated, upon the request of Broome
County, to provide Broome County with "matched" or "paired" samples, in
accordance with standard sampling and testing protocols, of any materials that
are obtained. Broome County shall have no obligation, however, to take any
action whatsoever with respect to such samples. Any waste materials that are
108
generated from on-site testing or sampling activities shall be promptly disposed
of off-site by Raytheon in accordance with applicable environmental
requirements, provided, however, that Broome County, as the owner of the
Facility, shall be designated on the manifests as the generator of such
materials and shall sign such manifests.
(B) Raytheon shall also promptly provide Broome County and L-3
with a copy of any final reports prepared by it or its consultants or agents,
including, if requested by Broome County, copies of field data, field reports,
laboratory analyses, logs, laboratory reports, and other environmental testing
material or information. In the event Raytheon becomes aware of any condition
posing a health and safety threat to L-3's employees, Raytheon shall immediately
inform L-3 of this finding.
Section 3. Raytheon shall obtain all required governmental licenses,
permits and approvals for any work or activities of Raytheon on the Facility.
Both Broome County and L-3 shall execute such other documents as reasonably may
be required for Raytheon to exercise its rights under this Access Agreement and
shall otherwise cooperate with Raytheon, as reasonably necessary, for Raytheon
to obtain such licenses, permits and approvals. L-3 shall not be required to
execute any document or consent that in any manner causes it to incur liability
for any environmental condition existing or events occurring prior to the date
of this Access Agreement that is not subject to indemnification by Raytheon
under the Asset Purchase and Sale Agreement.
Section 4. L-3 shall be entitled to make any use of the Facility that
is permitted by its lease with Broome County, but shall use commercially
reasonable efforts to avoid interfering in any material respect with the use of
the Facility by Raytheon for the purposes described above.
Section 5. Subject to United States government security requirements,
Raytheon's access under this Access Agreement after L-3's acquisition of the
business operations at the Facility shall be granted upon five (5) days prior
notice from Raytheon to Broome County and L-3 and at such times and in such
manner as is appropriate to reduce, so far as may be reasonable under the
circumstances, any disturbance to L-3's operations at the Facility.
Nevertheless, L-3 acknowledges and agrees that in Raytheon's exercise of its
environmental access rights, L-3's possession and operations may be disturbed
from time to time.
Section 6. In developing and implementing plans for environmental
investigations or environmental remediation activities, Raytheon shall keep both
Broome County and L-3 apprised of Raytheon's plans and any material changes or
developments therein and Raytheon shall consider in good faith any suggestions
proposed by Broome County or L-3 that do not materially and adversely impact the
ability of Raytheon to exercise its environmental access rights under this
Access Agreement.
Section 7: It is understood and agreed that, except where required
under applicable law, Raytheon, Broome County and L-3 shall maintain the
confidentiality of and shall not disclose or release any non-public
environmental information collected pursuant to this Access Agreement to any
third party without the prior written consent of the other parties to this
Access Agreement,
109
except, however, Raytheon may disclose any environmental information it collects
to CAE-LINK Corporation, CAE, Inc., any entity affiliated with either CAE-LINK
Corporation or CAE, Inc., and their authorized representatives without approval
from or prior notice to any other party. If disclosure is required by an
applicable law, the parties will provide one another with at least thirty (30)
days written notice prior to the disclosure, or if the disclosure is required
prior to expiration of such thirty day period, the parties will provide as much
written notice as is practicable under the circumstances. The enumerated
exceptions of clauses (i) through (iv) of Section 5.12 of the Asset Purchase and
Sale Agreement shall apply to any such disclosure.
Section 8: Raytheon hereby agrees to indemnify, release, and hold
harmless Broome County and its respective officers, directors, employees,
agents, successors and assigns from and against any and all claims, liabilities,
damages, losses, orders, penalties, fines, costs, charges and expenses
(including attorneys' fees and disbursements, and costs of experts and expert
witnesses) directly resulting from the entry of Raytheon or its environmental
consultant onto the Facility. Raytheon shall repair significant physical damage
to any improvements located on the Facility caused by its entry or activities
upon the Facility and shall restore such improvements to the extent reasonably
practicable to their previous condition prior to any such physical damage unless
the parties hereto agree otherwise.
Executed this ___ day of January, 2000.
RAYTHEON COMPANY
By:
------------------------
Name:
------------------------
Title:
------------------------
BROOME COUNTY INDUSTRIAL
DEVELOPMENT AGENCY
By:
------------------------
Name:
------------------------
Title:
------------------------
L-3 COMMUNICATIONS CORPORATION
By:
------------------------
Name:
------------------------
Title:
------------------------
110