Execution Copy
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ASSET PURCHASE AGREEMENT
DATED AS OF JULY 31, 2003
BY AND BETWEEN
RACAL INSTRUMENTS INC.
AND
AEROFLEX INCORPORATED
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS..........................................................2
SECTION 1.1. Certain Definitions.....................................2
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SECTION 1.2. Index of Other Defined Terms............................6
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ARTICLE 2 TRANSFER OF ASSETS...................................................7
SECTION 2.1. Transfer of Assets by Seller............................7
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SECTION 2.2. Excluded Assets.........................................9
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SECTION 2.3. Assumption of Liabilities...............................9
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SECTION 2.4. Excluded Liabilities...................................10
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SECTION 2.5. Assignment of Contracts and Rights.....................11
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SECTION 2.6. Closing................................................12
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SECTION 2.7. Bookings Indemnity Amount..............................12
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SECTION 2.8. Post-Closing Purchase Price Adjustments................13
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SECTION 2.9. Total Purchase Price Allocation........................14
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ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER............................15
SECTION 3.1. Organization and Qualification.........................15
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SECTION 3.2. Authority Relative to this Agreement...................15
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SECTION 3.3. Subsidiaries...........................................15
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SECTION 3.4. Financial Statements...................................15
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SECTION 3.5. Consents and Approvals; No Violations.................16
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SECTION 3.6. Litigation.............................................16
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SECTION 3.7. Compliance with Applicable Law.........................16
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SECTION 3.8. Labor Matters..........................................17
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SECTION 3.9. Intellectual Property and Information Technology.......17
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SECTION 3.10. Brokers...............................................18
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SECTION 3.11. Material Contracts....................................18
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SECTION 3.12. Title to Assets and Continued Operation...............19
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SECTION 3.13. Insurance.............................................20
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SECTION 3.14. Inventory and Receivables.............................20
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SECTION 3.15. Equipment.............................................20
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SECTION 3.16. Absence of Changes....................................20
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SECTION 3.17. Product Warranties, Defects and Liabilities...........22
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SECTION 3.18. Affiliate Transactions................................22
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SECTION 3.19. Distributors, Customers and Suppliers.................22
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SECTION 3.20. Illegal Payments......................................22
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SECTION 3.21. Books and Records.....................................23
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SECTION 3.22. Intentionally Omitted.................................23
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SECTION 3.23. Disclosure............................................23
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SECTION 3.24. Future Bookings.......................................23
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ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER.............................23
SECTION 4.1. Organization...........................................23
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(i)
SECTION 4.2. Capitalization.........................................24
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SECTION 4.3. Authority Relative to this Agreement...................24
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SECTION 4.4. Consents and Approvals: No Violations.................25
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SECTION 4.5. SEC Reports; Financial Statements......................25
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SECTION 4.6. Litigation.............................................26
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SECTION 4.7. Absence of Undisclosed Liabilities.....................26
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SECTION 4.8. Illegal Payments.......................................26
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SECTION 4.9. Brokers................................................26
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SECTION 4.10. Disclosure............................................26
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ARTICLE 5 COVENANTS...........................................................27
SECTION 5.1. Additional Agreements; Reasonable Best Efforts.........27
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SECTION 5.2. Public Announcements...................................27
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SECTION 5.3. Employee Benefits......................................27
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SECTION 5.4. Intentionally Omitted...................................28
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SECTION 5.5. Signage and Labels.....................................28
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SECTION 5.6. Use of Confidential Information; Noncompetition........29
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SECTION 5.7. No Solicitation........................................30
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SECTION 5.8. Expenses...............................................30
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SECTION 5.9. Certain Other Covenants................................30
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SECTION 5.10. Intentionally Omitted.................................31
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SECTION 5.11. Damages...............................................31
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SECTION 5.12. Covenants with Respect to Bookings; Conduct of the
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Business..............................................31
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SECTION 5.13. Compensation of WSG Employees.........................32
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ARTICLE 6 TAX MATTERS.........................................................32
SECTION 6.1. Taxes..................................................32
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SECTION 6.2. Cooperation............................................32
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SECTION 6.3. Allocation of Taxes....................................33
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ARTICLE 7 MISCELLANEOUS.......................................................33
SECTION 7.1. Entire Agreement; Assignment; Amendments and Waivers...33
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SECTION 7.2. Validity...............................................34
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SECTION 7.3. Notices................................................34
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SECTION 7.4. Governing Law, Forum Selection, Jurisdiction...........35
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SECTION 7.5. WAIVER OF JURY TRIAL...................................35
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SECTION 7.6. Descriptive Headings...................................36
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SECTION 7.7. Parties in Interest....................................36
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SECTION 7.8. Personal Liability.....................................36
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SECTION 7.9. Specific Performance...................................36
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SECTION 7.10. Bulk Transfer Laws....................................36
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SECTION 7.11. WARN Act..............................................36
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SECTION 7.12. Disclosure Generally..................................36
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SECTION 7.13. Counterparts..........................................37
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(ii)
TABLE OF CONTENTS
TO
SELLER DISCLOSURE SCHEDULE
Section 1(a) Knowledge of Seller
Section 2.1(a) Equipment
Section 2.1(d) Assumed Contracts
Section 3.4(a) Financial Statements
Section 3.5(b) Other Consents; Violations
Section 3.8(b) Employee Notices
Section 3.10 Brokers
Section 3.11 Material Contracts
Section 3.13 Insurance
Section 3.16 Absence of Changes
Section 3.17(i) Standard Terms of Product Warranties
Section 3.17(ii) Additional Product Warranties
Section 3.19(a) Distributors, Customers and Suppliers
Section 3.19(b) Exclusive Agreements
Section 5.13 Bookings Payments
SCHEDULES TO AGREEMENT
Schedule 3.12 Excluded Services
(iii)
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of July 31, 2003 (this
"AGREEMENT"), by and between RACAL INSTRUMENTS INC., a Delaware corporation
("SELLER"), and AEROFLEX INCORPORATED, a Delaware corporation ("BUYER").
RECITALS
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WHEREAS, Seller is an Affiliate (as defined below) of Racal Instruments
Group Limited, a company registered in England and Wales ("RIG"), and Racal
Instruments Limited, a company registered in England ("RIL");
WHEREAS, RIL is engaged in the design, development, manufacture,
production and sale of digital wireless test and measurement solutions (the
"WIRELESS MANUFACTURING BUSINESS");
WHEREAS, Seller is engaged, among other things, in the sale and service
of digital wireless test and measurement solutions (the "US WIRELESS SALES
BUSINESS") and in the development and manufacture of certain products relating
to the defense industry and of certain functional test products (the "DEFENSE
BUSINESS");
WHEREAS, Seller is an Affiliate (as defined below) of each of Racal
Instruments SAS, a corporation organized under the laws of France ("RISAS"),
Racal Instruments GmbH, a corporation organized under the laws of Germany ("RIG
GERMANY") and Racal Instruments srl, a corporation organized under the laws of
Italy ("RSES"; and, together with RISAS and RIG Germany, the "OTHER SALES
COMPANIES" and, together with Seller, the "SALES Companies"), which are engaged,
among other things, in the sale and service of digital wireless test and
measurement solutions (together with the US Wireless Sales Business, the
"WIRELESS SALES BUSINESS");
WHEREAS, Buyer desires to acquire the Wireless Manufacturing Business
and Wireless Sales Business (the "WIRELESS SOLUTIONS GROUP");
WHEREAS, concurrently with the execution of this Agreement, (i) Buyer,
Acquisition Sub, a company organized under the laws of England and Wales and a
wholly-owned subsidiary of Buyer ("ACQUISITION SUB"), and RIG have entered into
a Stock Purchase Agreement of even date herewith (the "STOCK PURCHASE
AGREEMENT"), pursuant to which Acquisition Sub will purchase from RIG all of the
share capital of RIL (the "STOCK SALE") and (ii) Buyer has entered into an Asset
Purchase Agreement, of even date herewith, with RIG (the "OTHER ASSET PURCHASE
Agreement"), pursuant to which the European Buyers (as defined in the Other
Asset Purchase Agreement) will purchase from the Other Sales Companies
substantially all of the assets of the Wireless Sales Business owned by such
Other Sales Companies (the "OTHER ASSET SALES");
WHEREAS, Buyer has agreed to acquire the Wireless Solutions Group for a
total purchase price (the "TOTAL PURCHASE PRICE") consisting of the Stock
Purchase Price (as defined in the Stock Purchase Agreement), the EU Asset
Purchase Price (as defined in the Other Asset Purchase Agreement) and the US
Asset Purchase Price (as defined herein);
1
WHEREAS, concurrently with the consummation of the transactions
contemplated by this Agreement, Buyer, Acquisition Sub, RIG, Seller, the Other
Sales Companies and RIG Holdings, L.P., a Delaware limited partnership ("RIG
LP"), have entered into a Master Indemnification Agreement (the "MASTER
INDEMNIFICATION AGREEMENT"), pursuant to which, Buyer and Acquisition Sub, on
the one hand, and RIG, Seller and the Other Sales Companies, on the other hand,
have agreed to indemnify each other with respect to certain matters relating to
this Agreement, the Stock Purchase Agreement, the Tax Deed and the Other Asset
Purchase Agreement;
WHEREAS, concurrently with the consummation of the transactions
contemplated by this Agreement, Acquisition Sub, Buyer, RIG, RIL, Seller, the
Other Sales Companies and the European Buyers shall enter into a Transition
Services Agreements (the "TRANSITION SERVICES AGREEMENT"), pursuant to which,
following the Closing (as defined below) Acquisition Sub and Buyer will provide,
or cause RIL or one or more of their Affiliates to provide, RIG, RII and the
Other Sales Companies with certain services provided by RIL and/or the Sales
Companies prior to consummation of the transactions contemplated hereby and RIG,
Seller and/or the Other Sales Companies will provide Acquisition Sub, Buyer, its
Affiliates and RIL with certain services provided by RIG, RII and the Other
Sales Companies prior to the consummation of the transactions contemplated
hereby, in each case, on the terms and subject to the conditions set forth
therein; and
WHEREAS, Seller desires to sell to Buyer substantially all of the
assets of the US Wireless Sales Business (other than the Excluded Assets, as
defined below) in consideration of Buyer's obligations hereunder, including
Buyer's agreement to assume certain of the liabilities of Seller relating to the
US Wireless Sales Business (other than the Excluded Liabilities, as defined
below), all on the terms set forth herein.
AGREEMENT
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NOW THEREFORE in consideration of the premises and the representations,
warranties, covenants and agreements herein contained and intending to be
legally bound hereby, Seller and Buyer hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Certain Definitions. The following terms, as used herein,
have the following meanings:
"Affiliate" means, in respect of any Person, a Person that, directly or
indirectly, through one or more intermediaries controls, is controlled by or is
under common control with the first-mentioned Person.
"Applicable Law" means, with respect to any Person, any domestic or
foreign, federal, state or local statute, law, ordinance, policy, guidance,
rule, administrative interpretation, regulation, order, writ, injunction,
directive, judgment, decree or other requirement of any Governmental Authority
applicable to such Person or any of its Affiliates or any of their respective
properties, assets, officers, directors, employees, consultants or agents (in
connection
2
with such officer's, director's, employee's, consultant's or agent's activities
on behalf of such Person or any of its Affiliates).
"Bookings Cut-off Date" shall have the meaning ascribed to such term in
the Stock Purchase Agreement.
"Bookings Warranty Period" shall have the meaning ascribed to such term
in the Stock Purchase Agreement.
"Business Day" means any day that is not a Saturday, Sunday or a day on
which the banks in New York, New York are required or permitted to be closed.
"Closing Balance Sheet" has the meaning ascribed to such term in the
Stock Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contracts" means all contracts, agreements, options, leases, licenses,
sales and accepted purchase orders, commitments and other instruments of any
kind, whether written or oral, which relate to the US Wireless Sales Business
and to which Seller is a party or is otherwise bound by on the Closing Date,
including the Material Contracts.
"Damages" means all demands, claims, actions or causes of action,
assessments, losses, damages, costs, expenses, liabilities, judgments, awards,
fines, sanctions, penalties, charges and amounts paid in settlement, including
reasonable costs, fees and expenses of attorneys, accountants, consultants and
other agents or independent contractors incurred in investigating, preparing for
and defending any thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" means The Bank of New York.
"Escrow Agreement" means the Escrow Agreement, dated as of the date
hereof, by and among Seller, RIG, the Other Sales Companies, RIG LP, Buyer,
Acquisition Sub and the Escrow Agent pursuant to which the Buyer Parties (as
defined therein) have recourse for their indemnification claims against RIG,
Seller and the Other Sales Companies under the Master Indemnification Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United
States as in effect from time to time and applied consistently throughout the
periods involved.
"Governmental Authority" means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.
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"Indebtedness" of any Person means all obligations of such Person (a)
for borrowed money, (b) evidenced by notes, bonds, debentures or similar
instruments and (c) in the nature of guarantees of the obligations described in
clauses (a) through (b) above of any other Person.
"Information Technology" means all computer hardware, software,
networks, microprocessors, firmware and other information technology and
communications equipment used in the operation of the IT systems of the US
Wireless Sales Business.
"Intellectual Property" means any patent, patent application (or
renewal) and docketed invention, trademark, trade name, trademark or trade name
registration or application (or renewal), copyright or copyright registration or
application (or renewal) for copyright registration, servicemark, brand xxxx or
brand name or any pending application (or renewal) related thereto, or any trade
secret, proprietary know-how, programs or processes or any similar rights
relating to the US Wireless Sales Business, and each license or licensing
agreement for any of the foregoing.
"Knowledge of Seller" means the actual (and not constructive or
imputed) knowledge of the individuals set forth on Section 1(a) of the Seller
Disclosure Schedule, and shall be deemed to include a representation that such
individuals have made all usual and reasonable inquiries and all inquiries that
would be reasonable in light of such individuals' knowledge.
"Liability" means, with respect to any Person, any liability or
obligation of such Person of any kind, character or description, whether known
or unknown, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise.
"Lien" means, with respect to any asset, any mortgage, title defect or
objection, lien, pledge, charge, security interest, hypothecation, restriction,
encumbrance or charge of any kind in respect of such asset.
"Monthly Exchange Ratio" means, with respect to any foreign currency
and any calendar month, (a) the sum of the daily closing exchange ratio for
conversion of such currency into U.S. Dollars (as reported on x-xxxxx.xxx (or if
unavailable, as reported by Bloomberg, L.P.)) for each day during such calendar
month in which the currency markets are open for trading, divided by (b) the
number of days in such calendar month in which such currency markets are open
for trading.
"Past Practices" means with the Seller's practices with respect to the
operation of the US Wireless Sales Business since November 2, 2001.
"Permitted Liens" means (i) Liens for Taxes or governmental
assessments, charges or claims the payment of which is not yet due, or for Taxes
the validity of which are being contested in good faith by appropriate
proceedings and for which adequate reserves are maintained on the Financial
Statements in accordance with GAAP; (ii) statutory Liens of landlords and Liens
of carriers, warehousemen, mechanics, materialmen and other similar Persons and
other Liens imposed by Applicable Law incurred in the ordinary course of
business for sums not yet delinquent or being contested in good faith and for
which adequate reserves are maintained on the Financial Statements in accordance
with GAAP; (iii) Liens relating to deposits
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made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security or to
secure the performance of leases, trade contracts or other similar agreements;
and (iv) Liens securing executory obligations under any Lease that constitutes
an "operating lease" under GAAP.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization or other
legal entity.
"Qualified Bookings" shall have the meaning ascribed to such term in
the Stock Purchase Agreement.
"Qualified Bookings Amount" shall have the meaning ascribed to such
term in the Stock Purchase Agreement.
"Qualified Defense Buyer" shall have the meaning ascribed to such term
in the Escrow Agreement.
"Related Agreements" means the Stock Purchase Agreement, the Other
Asset Purchase Agreement, the Escrow Agreement, the Master Indemnification
Agreement, the Transition Services Agreement, the Sublease, the Sublicense
Agreement, the Security Agreements, the Tax Deed (as defined in the Stock
Purchase Agreement) and all other agreements, instruments or documents executed
in connection herewith and therewith.
"SEC" means the Securities and Exchange Commission.
"Security Agreements" shall have the meaning ascribed to such term in
the Master Indemnification Agreement.
"Seller Disclosure Schedule" means the disclosure schedule with respect
to this Agreement concurrently delivered by Seller to Buyer.
"Sublease" means the Sublease, dated as of the date hereof, between
Seller and Buyer.
"Sublicense Agreement" means the Sublicense Agreement between RIG LP
and RIL.
"Sublicensed Names" means the names sublicensed to RIL under the
Sublicense Agreement.
"Subsidiary" means, with respect to any Person, (i) any corporation as
to which more than 10% of the outstanding stock having ordinary voting rights or
power (and excluding stock having voting rights only upon the occurrence of a
contingency unless and until such contingency occurs and such rights may be
exercised) is owned or controlled, directly or indirectly, by such Person and/or
by one or more of such Person's Subsidiaries and (ii) any partnership, joint
venture or other similar relationship between such Person (or any Subsidiary
thereof) and any other Person (whether pursuant to a written agreement or
otherwise).
"Tax" means all taxes imposed of any nature including federal, state,
local or foreign net income tax, alternative or add-on minimum tax, profits or
excess profits tax, franchise tax, gross
5
income, adjusted gross income or gross receipts tax, employment related tax
(including employee withholding or employer payroll tax, FICA or FUTA), real or
personal property tax or ad valorem tax, sales or use tax, excise tax, stamp tax
or duty, any withholding or back up withholding tax, value added tax, severance
tax, prohibited transaction tax, premiums tax, environmental tax, intangibles
tax or occupation tax, together with any interest or any penalty, addition to
tax or additional amount imposed by any Governmental Authority (domestic or
foreign) responsible for the imposition of any such tax.
"Tax Return" means all returns, reports, forms or other information
required to be filed with respect to any Tax.
"Thales Purchase Agreement" means that certain Sale and Purchase
Agreement, dated November 2, 2001, by and among Thales, RIG LP, RIG Merger Sub,
Inc. and RIG, pursuant to which RIG and Seller acquired the Wireless
Manufacturing Business and Wireless Sales Business, respectively.
"WARN Act" means the Worker Adjustment Retraining and Notification Act
of 1988.
"WSG Product" shall have the meaning ascribed to such term in the Stock
Purchase Agreement.
SECTION 1.2. Index of Other Defined Terms. In addition to those terms
defined above, the following terms shall have the respective meanings given
thereto in the sections indicated below:
DEFINED TERM SECTION
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"Accounts Payable" 2.3(a)
"Accrued Expenses" 2.3(d)
"Acquisition Sub" Recitals
"Adjusted US Asset Purchase Price" 2.8
"Agreement" Preamble
"ARX Common Stock" 2.7(b)
"Assumed Contracts" 2.1(d)
"Assumed Liabilities" 2.3
"Assumed Warranties" 2.3(e)
"Bookings Asset Indemnity Amount" 2.7(a)
"Buyer" Preamble
"Buyer Material Adverse Effect" 4.1
"Buyer SEC Filings" 4.5(a)
"Cash Component" 2.6(b)
"Closing" 2.6(a)
"Closing Date" 2.6(a)
"COBRA" 5.3(d)
"Confidential Defense Information" 5.6(a)
"Defense Business" Recitals
"Deferred Asset Consideration Amount" 2.6(c)
"Deferred Asset Payment" 2.7(b)
"Deferred Deposit Amount" 2.7(b)
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"Equipment" 2.1(a)
"Excluded Assets" 2.2
"Excluded Liabilities" 2.4
"Financial Statements" 3.4(a)
"Inventory" 2.1(c)
"Master Indemnification Agreement" Recitals
"Material Contracts" 3.11(a)
"Other Asset Purchase Agreement" Recitals
"Other Asset Sales" Recitals
"Other Sales Companies" Recitals
"Price Allocation" 2.9(a)
"Post-Closing Tax Period" 6.3
"Pre-Closing Tax Period" 6.3
"Receivables" 2.1(b)
"RIG" Recitals
"RIG Germany" Recitals
"RIG LP" Recitals
"RIL" Recitals
"RISAS" Recitals
"RSES" Recitals
"Sales Companies" Recitals
"Securities Act" 2.7(c)
"Seller" Preamble
"Seller Material Adverse Effect" 3.1
"Stock Purchase Agreement" Recitals
"Stock Sale" Recitals
"Stock Value" 2.7(b)
"Total Purchase Price" Recitals
"Transferred Assets" 2.1
"Transferred Employees" 5.3(a)
"Transition Services Agreement" Recitals
"US Asset Purchase Price" 2.6(c)
"US Wireless Sales Business" Recitals
"Wireless Manufacturing Business" Recitals
"Wireless Sales Business" Recitals
"Wireless Solutions Group" Recitals
"WSG Balance Sheet" 3.4(a)
ARTICLE 2
TRANSFER OF ASSETS
SECTION 2.1. Transfer of Assets by Seller. Upon the terms and subject
to the conditions of this Agreement and in reliance upon the representations,
warranties and agreements herein set forth, Buyer agrees to purchase from Seller
and Seller agrees to sell or cause to be sold to Buyer at the Closing, free and
clear of all Liens, other than Permitted Liens, all the assets, properties,
rights, licenses, permits, contracts, causes of action, claims and operations of
Seller described below, wherever located, whether tangible or intangible, real,
personal or mixed, that
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are owned by, leased by or in the possession or control of Seller or any of RIG,
RIL or the Other Sales Companies (the collective assets, properties, rights,
licenses, permits, contracts, causes of action, claims, operations and
businesses to be transferred to Buyer by Seller pursuant hereto are referred to
collectively herein as the "TRANSFERRED ASSETS"):
(a) all machinery, equipment, furniture, office equipment, computer
equipment (including all hardware, software and software codes and other
Information Technology), communications equipment, vehicles, spare and
replacement parts and other tangible property (and interests in any of the
foregoing) of Seller used in the US Wireless Sales Business as described in
Section 2.1(a) of the Seller Disclosure Schedule (collectively, the
"EQUIPMENT"), together with all warranties and licenses issued to Seller in
connection with the Equipment, and any claims, credits and rights of recovery
with respect to the Equipment;
(b) all accounts receivable and notes receivable, together with any
unpaid interest or fees accrued thereon or other amounts due with respect
thereto, of Seller relating to, or arising in respect of, the US Wireless Sales
Business existing on the Closing Date to the extent reflected in the Closing
Balance Sheet and any security or collateral therefor, including recoverable
advances and deposits (collectively, the "RECEIVABLES");
(c) all items of inventory owned or maintained by Seller primarily for
the US Wireless Sales Business, including all supplies, containers, packaging
materials, raw materials, work-in-process, finished goods and samples existing
on the Closing Date to the extent reflected in the Closing Balance Sheet
(collectively, the "INVENTORY"), and any claims, credits and rights of recovery
with respect to the Inventory;
(d) all of the Contracts to which Seller is a party (and Seller's
rights thereunder) relating primarily to the US Wireless Sales Business that (i)
are described in Section 2.1(d) of the Seller Disclosure Schedule or (ii)
entered into by RII after June 27, 2003 in the ordinary course of the US
Wireless Sales Business (collectively, the "ASSUMED CONTRACTS");
(e) all prepaid charges and expenses of Seller relating exclusively to
the US Wireless Sales Business existing on the Closing Date to the extent
reflected in the Closing Balance Sheet, including any such charges and expenses
with respect to leases and rentals;
(f) all rights of Seller to insurance proceeds with respect to claims
for Damages to the Transferred Assets, unless such proceeds reimburse Seller for
the previously completed repair or restoration of such Transferred Assets;
(g) all of Seller's rights, claims, credits, causes of action or rights
of set-off against third parties relating to, or arising in connection with, the
US Wireless Sales Business or the Transferred Assets (other than those relating
exclusively to Excluded Liabilities), whether liquidated or unliquidated, fixed
or contingent, including claims pursuant to all warranties, representations and
guarantees made by suppliers, manufacturers, contractors and other third parties
in connection with products or services purchased by or furnished to Seller for
use exclusively in the US Wireless Sales Business or affecting any of the
Transferred Assets;
(h) to the extent available and in the possession or control of Seller
or any Affiliate of Seller, all books, records, files and papers of the US
Wireless Sales Business, whether in hard
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copy or computer format, including invoices, engineering information, sales and
promotional literature, manuals and data, sales and purchase correspondence,
lists of present and former suppliers, and documentation developed or used for
accounting, marketing, engineering, manufacturing or any other purpose related
primarily to the conduct of the US Wireless Sales Business at any time prior to
the Closing;
(i) to the extent available and in the possession or control of Seller
or any Affiliate of Seller, all lists of present, former and prospective
customers, distributors and suppliers of the US Wireless Sales Business;
(j) all goodwill associated primarily with the US Wireless Sales
Business or the Transferred Assets; and
(k) to the extent not covered (or excluded) by the foregoing, all
assets of Seller shown on the WSG Balance Sheet and not disposed of in the
ordinary course of business since December 31, 2002 and all assets and
properties thereafter acquired by Seller in the ordinary course of business for
use exclusively in the US Wireless Sales Business and held on the Closing Date,
except for the Excluded Assets.
SECTION 2.2. Excluded Assets. Notwithstanding anything herein to the
contrary, Seller will retain and not transfer, convey, assign or deliver to
Buyer, and neither Buyer nor any of Buyer's Affiliates will acquire any right,
title or interest in or to any of the following assets (collectively, the
"EXCLUDED ASSETS"):
(a) all cash and cash equivalents in respect of the US Wireless Sales
Business on hand on the Closing Date;
(b) all life insurance policies covering officers and other employees
of Seller and all other insurance policies relating to the operation of the US
Wireless Sales Business;
(c) all refunds or credits, if any, of Taxes due to Seller by reason of
its ownership of the Transferred Assets or operation of the US Wireless Sales
Business to the extent attributable to any time or period ending at or prior to
the Closing Date;
(d) all rights (including indemnification) and claims and recoveries
under litigation of Seller against third parties (other than rights, claims and
recoveries acquired by Buyer pursuant to Sections 2.1(a), (d) and (g)), arising
out of or relating to events prior to the Closing Date in connection with the
Transferred Assets or the US Wireless Sales Business;
(e) the trade names "Racal," "RIG" and "Racal Instruments," together
with all related goodwill; and
(f) Seller's rights under this Agreement.
SECTION 2.3. Assumption of Liabilities. Upon the terms and subject to
the conditions of this Agreement and in reliance upon the representations,
warranties and agreements herein set forth, Buyer agrees, effective at the time
of Closing, to assume, perform and discharge all of the
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following Liabilities with respect to the US Wireless Sales Business and the
Transferred Assets (collectively, the "ASSUMED LIABILITIES"):
(a) all obligations of Seller with respect to accounts payable of the
US Wireless Sales Business (including accounts payable owed to RIL) existing on
the Closing Date to the extent reflected in the Closing Balance Sheet ("ACCOUNTS
PAYABLE");
(b) all obligations of Seller under, or arising out of, the Assumed
Contracts to the extent accrued on the Closing Balance Sheet or arising after
the Closing Date;
(c) all obligations of Seller with respect to any capital lease
relating to any Transferred Asset existing on the Closing Date to the extent
reflected in the Closing Balance Sheet.
(d) all obligations of Seller with respect to accrued expenses of the
US Wireless Sales Business existing on the Closing Date to the extent reflected
in the Closing Balance Sheet ("ACCRUED EXPENSES");
(e) all obligations of Seller with respect to product warranties and
service contracts related to the Assumed Contracts, including, without
limitation, with respect to replacement of, or refund for, damaged, defective or
returned goods and claims of product liability existing on the Closing Date (to
the extent reflected in the Closing Balance Sheet) or arising after the Closing
Date (collectively, the "ASSUMED WARRANTIES");
(f) all obligations of Seller with respect to the Transferred
Employees, including, without limitation, compensation, benefit, severance and
workers compensation claims, (i) existing on the Closing Date and reflected in
the Closing Balance Sheet or (ii) arising on or after the Closing Date or
resulting from the consummation of the transactions contemplated hereby (other
than with respect to any Excluded Liability described in Section 2.4(i) below);
and
(g) all Liabilities of the US Wireless Sales Business or relating to
the Transferred Assets (other than Excluded Liabilities) to the extent resulting
from events or conditions occurring, or arising on or after, the Closing Date.
SECTION 2.4. Excluded Liabilities. Notwithstanding the provisions of
Section 2.3 of this Agreement, other than the Assumed Liabilities, Buyer does
not assume, agree to perform or discharge, indemnify Seller against, or
otherwise have any responsibility for any Liabilities of Seller, whether fixed
or contingent, and whether arising prior to, on or after the Closing Date (the
"EXCLUDED LIABILITIES"), including, without limitation, any of the following
Liabilities:
(a) all Indebtedness (other than current accounts payable or accrued
expenses of Seller with respect to the US Wireless Sales Business incurred or
accrued in the ordinary course of business, but only to the extent that the
accrual for such payables and expenses has been properly reflected on the
Closing Balance Sheet and other than to the extent arising following the Closing
Date under Assumed Contracts that constitute Transferred Assets);
(b) any Liability for Taxes relating to the US Wireless Sales Business
or the Transferred Assets attributable to any period prior to the Closing Date
including any Liability of
10
the Seller for such periods for the unpaid taxes of any Person as a transferee
or successor, by contract or otherwise;
(c) any Liability of the Seller arising under or relating to the Thales
Purchase Agreement;
(d) any Liability of the Seller to indemnify any Person by reason of
the fact that such Person was a director, officer, employee or agent of the
Seller (other than pursuant to and to the extent provided under the Master
Indemnification Agreement);
(e) other than the Assumed Warranties, any Liability relating to, or
arising out of any product manufactured or sold or services rendered by Seller;
(f) any Liability of the Seller to any stockholder or Affiliate of the
Seller or such stockholder other than pursuant to any Assumed Contract or
Accounts Payable;
(g) any Liability pertaining to Seller or its business and arising out
of or resulting from non-compliance prior to the Closing with any Applicable
Law;
(h) any Liability of Seller for making payments or providing payments
or benefits of any kind to any current or former employees (other than the
Transferred Employees to the extent reflected on the Closing Balance Sheet or
arising after the Closing Date), including, without limitation, (A) any
Liability to provide any such employees COBRA coverage, (B) any Liability in
respect of medical and other benefits for existing and future retirees and (C)
any Liability in respect of work related employee injuries or workmen's
compensation claims;
(i) any Liability of Seller with respect to any severance obligations
owed to employees of Seller resulting from any termination initiated by Seller
on or before the Closing Date or in connection with the consummation of the
transactions contemplated hereby;
(j) any Liability, whether presently existing or hereafter arising,
which is attributable solely to an Excluded Asset; and
(k) any Liability arising from Seller's failure to comply with the bulk
transfer laws of any applicable jurisdiction with respect to the consummation of
the transactions contemplated hereby.
To the extent, if any, that any Liability might be partly an Assumed
Liability and partly an Excluded Liability, the apportionment of such Liability
shall be determined pursuant to applicable accounting principles. Nothing set
forth in the foregoing sentence shall be deemed to affect, amend, modify,
supplement or otherwise change the definitions of Assumed Liabilities and
Excluded Liabilities.
SECTION 2.5. Assignment of Contracts and Rights.
With respect to any Assumed Contract as to which the terms thereof
require the consent of a third party for the assignment of such Assumed Contract
to Buyer and such consent has not been obtained on or before the Closing Date:
11
(a) promptly after the date hereof, to the extent requested by Buyer,
Seller will use its commercially reasonable best efforts to obtain the written
consent of the other parties to any such Assumed Contract for the assignment of
such Contract to Buyer; and
(b) Seller and Buyer shall cooperate in an arrangement reasonably
satisfactory to Buyer and Seller under which Buyer would obtain, to the extent
practicable, the claims, rights and benefits and assume the corresponding
obligations thereunder in accordance with this Agreement, including
subcontracting, sub-licensing or sub-leasing to Buyer, or under which Seller
would enforce for the benefit of Buyer, with Buyer assuming Seller's
obligations, any and all claims, rights and benefits of Seller against a third
party thereto. Seller will promptly pay to Buyer all monies received by Seller
under any such Assumed Contract or any claim, right or benefit arising
thereunder until the transfer thereof to Buyer pursuant to this Section 2.5.
SECTION 2.6. Closing.
(a) The closing (the "CLOSING") of the transactions contemplated by
this Agreement shall take place at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP,
New York, New York, on the date of this Agreement (the "CLOSING DATE").
(b) In consideration for Transferred Assets, on the Closing Date, Buyer
shall pay to Seller the sum of $5,273,469 by wire transfer to a bank account
designated by Seller prior to Closing in immediately available funds (the "CASH
COMPONENT").
(c) Subject to the terms and conditions set forth in Section 2.7, as
additional consideration for the Transferred Assets sold hereunder, Buyer shall
pay to Seller an amount equal to $2,326,531 (the "DEFERRED ASSET CONSIDERATION
AMOUNT", and, together with the Cash Component, the "US ASSET PURCHASE PRICE").
(d) At the Closing, Buyer or its designated subsidiary shall deliver to
Seller such customary instruments of assumption as may be reasonably requested
by Seller to evidence the assumption of the Assumed Liabilities; provided,
however, that no such document shall expand in any way any of Buyer's
obligations to assume anything other than the Assumed Liabilities.
(e) At the Closing, Seller shall deliver to Buyer or its designated
subsidiary such bills of sale, certificates of title, endorsements, consents,
assignments and other good and sufficient instruments of conveyance and
assignment of such rights as the parties and their respective counsel shall deem
reasonably necessary or appropriate to vest in Buyer or any such designated
Subsidiary all of Seller's right, title and interest in, to and under the
Transferred Assets.
SECTION 2.7. Bookings Indemnity Amount.
(a) In the event that the Final Bookings Amount (as determined pursuant
to Section 2.8 of the Stock Purchase Agreement) is less than $60,000,000, as
Buyer's sole and exclusive remedy with respect to the breach of Seller's
representation and warranty set forth in Section 3.24, Buyer shall be entitled
to receive from Seller an amount of liquidated damages determined as follows
(the "BOOKINGS ASSET INDEMNITY AMOUNT"), which liquidated damages shall be
payable solely by means of an set-off against the Deferred Asset Consideration
Amount:
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(i) if the Final Bookings Amount is less than
$55,000,000, then the Bookings Asset Indemnity Amount shall be
$2,326,531; and
(ii) if the Final Bookings Amount is equal to or more
than $55,000,000, but less than $60,000,000, then the Bookings Asset
Indemnity Amount shall be an amount equal to the product of (A)
$60,000,000 less the Final Bookings Amount multiplied by (B) 0.2326531.
(b) Subject to the terms and conditions set forth in the Master
Indemnification Agreement, the Deferred Asset Consideration Amount less the
Bookings Asset Indemnity Amount, if any, (collectively, the "DEFERRED ASSET
PAYMENT"), shall be paid to Seller within ten (10) days after the Bookings
Determination Date (as defined in the Stock Purchase Agreement) and shall be
paid in immediately available funds by wire transfer to a bank account or bank
accounts designated in writing by Seller prior to such date; provided, however,
that:
(i) If at the time of the Deferred Asset Payment,
Buyer's common stock ("ARX COMMON STOCK") is listed for trading on a
national securities exchange or traded on The NASDAQ Stock Market,
Buyer may elect to pay any portion of the Deferred Asset Payment (other
than any portion of the Deferred Asset Payment that, pursuant to the
terms of the Master Indemnification Agreement, is deposited directly by
Buyer into the Escrow Fund (the "DEFERRED DEPOSIT AMOUNT")) by
delivering to Seller duly and validly issued certificates representing
a number of shares of ARX Common Stock computed as follows: an amount
equal to (A) the remainder of (x) the Deferred Asset Payment minus (y)
the Deferred Deposit Amount minus (z) the portion of the Deferred Asset
Payment paid in cash to Seller (such remainder, the "STOCK VALUE"),
divided by (B) the intraday volume weighted average trading price (as
reported in writing by UBS Xxxxx Xxxxxx to each of Seller and Buyer) of
one share of ARX Common Stock traded on NASDAQ over the twenty
consecutive Business Days on which ARX Common Stock was actually traded
immediately preceding, but not including, the Bookings Determination
Date; provided, however, that notwithstanding any election by Buyer to
make the Deferred Stock Payment in ARX Common Stock, the Deferred
Deposit Amount shall be paid in cash in immediately available funds to
the Escrow Agent; and
(ii) in the event that Buyer elects to issue any ARX
Common Stock as provided in clause (i) above, Seller agrees that RIG
may direct Buyer to issue any ARX Common Stock otherwise payable to RIG
directly to Seller, in satisfaction of an amount of indebtedness of RIG
owing to Seller equal to the Stock Value as determined under the Stock
Purchase Agreement.
(c) Buyer hereby covenants and agrees that any shares of ARX Common
Stock issued to Seller pursuant this Section 2.7 shall have been registered by
Buyer under the Securities Act of 1933, as amended (THE "SECURITIES ACT") prior
to their delivery to Seller.
SECTION 2.8. Post-Closing Purchase Price Adjustments.
With respect to any Closing Net Working Capital Shortfall, Closing Net
Working Capital Surplus or Restatement Payment (each as defined in the Stock
Purchase Agreement) determined
13
in accordance with Section 2.7 of the Stock Purchase Agreement, Buyer and Seller
hereby agree that a portion of such Closing Net Working Capital Shortfall,
Closing Net Working Capital Surplus and/or Restatement Payment shall be
allocated to the consideration paid by Buyer under this Agreement in the manner
set forth in Section 2.9 of the Stock Purchase Agreement. To the extent that any
portion of any such Closing Net Working Capital Shortfall, Closing Net Working
Capital Surplus or Restatement Payment is allocated to the consideration paid by
Buyer under this Agreement pursuant to Section 2.7 of the Stock Purchase
Agreement, the US Asset Purchase Price shall be adjusted upward with respect to
any allocated portion of Closing Net Working Capital Surplus or Restatement
Payment received by Seller or downward with respect to any allocated portion of
a Closing Net Working Capital Shortfall or Restatement Payment paid to Buyer by
Seller and such adjusted purchase price is referred to herein as the "ADJUSTED
US ASSET PURCHASE PRICE."
SECTION 2.9. Total Purchase Price Allocation.
(a) For all Tax purposes, the Adjusted US Asset Purchase Price (or, in
the event that the adjustments under Section 2.7 of the Stock Purchase Agreement
have not been finally determined at the time of the due date of either party's
Tax Return, the US Asset Purchase Price) increased by the portion of the Assumed
Liabilities that is treated as consideration for the Transferred Assets for
federal income tax purposes shall be allocated to the Transferred Assets in
accordance with Section 1060 of the Code and the Treasury regulations
promulgated thereunder ("PRICE ALLOCATION"). The Price Allocation shall be
determined in a manner mutually agreed upon by the parties prior the date hereof
and reflected on Schedule 1 to the Stock Purchase Agreement, and each party
hereto shall adopt and utilize the Price Allocation for purposes of all Tax
Returns filed by them and shall not voluntarily take any position inconsistent
with the foregoing in connection with any examination of any Tax Return, any
refund claim, any litigation proceeding or otherwise, except that Buyer's cost
for the Transferred Assets may differ from the amount so allocated to the extent
necessary to reflect Buyer's capitalized acquisition costs other than the amount
realized by Seller. In the event that the Price Allocation is disputed by any
taxing authority, the party receiving notice of the dispute shall promptly
notify the other parties hereto of such dispute and the parties hereto shall
cooperate in good faith in responding to such dispute in order to preserve the
effectiveness of the Price Allocation.
(b) Each party agrees to timely file an IRS Form 8594 reflecting the
Price Allocation for the taxable year that includes the Closing Date and to make
any timely filings required by applicable state or local laws.
(c) Any adjustment to the US Asset Purchase Price under Section 2.8 of
this Agreement and any indemnification payment treated as an adjustment to the
US Asset Purchase Price of the Transferred Assets under the Master
Indemnification Agreement or Section 2.7 above shall be treated as an adjustment
to the US Asset Purchase Price paid for the Transferred Assets for tax purposes.
Such adjustment shall be reflected as an adjustment to the price allocated to a
specific asset, if any, giving rise to the adjustment. If any such adjustment
does not relate to a specific asset, such adjustment shall be allocated among
the Transferred Assets in accordance with the Price Allocation method provided
in Section 2.9(a) above.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer:
SECTION 3.1. Organization and Qualification. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all corporate power and authority to own, lease and
operate the Transferred Assets and to carry on the US Wireless Sales Business as
now being conducted. Seller is duly qualified or licensed and in good standing
in each jurisdiction where the nature of the activities conducted by US Wireless
Sales Business or the character of the property or assets owned, leased or
operated, by US Wireless Sales Business makes such qualification or licensing
necessary, except in jurisdictions where the failure to be so duly qualified or
licensed and in good standing has not had and would not have a Seller Material
Adverse Effect (as defined below). The term "SELLER MATERIAL ADVERSE EFFECT"
means any circumstance, change or effect that, individually or when taken
together with all other such circumstances, changes or effects, is materially
adverse to the US Wireless Sales Business or the Transferred Assets taken as a
whole; provided, however, that the foregoing definition excludes the effects of
changes that are generally applicable to (i) the industries and markets in which
the US Wireless Sales Business operates, (ii) the United States economy or
securities markets or (iii) the world economy or international securities
markets or result from the outbreak of war, other hostilities or terrorist
activities.
SECTION 3.2. Authority Relative to this Agreement. The execution,
delivery and performance by Seller of this Agreement and the consummation by
Seller of the transactions contemplated hereby are within Seller's corporate
powers and have been duly authorized by all requisite action on the part of
Seller. This Agreement has been duly and validly executed and delivered by
Seller and constitutes a legal, valid and binding agreement of Seller
enforceable against Seller in accordance with its terms.
SECTION 3.3. Subsidiaries. Seller has no Subsidiaries.
SECTION 3.4. Financial Statements.
(a) Copies of (i) the unaudited consolidating balance sheet of the
Wireless Solutions Group as of December 31, 2002 (the "WSG BALANCE SHEET") and
(ii) the unaudited consolidating income statements for the Wireless Solutions
Group for the year ended December 31, 2002 have been provided to Buyer and are
set forth in Section 3.4(a) of the Seller Disclosure Schedule (together with the
WSG Balance Sheet, the "FINANCIAL Statements").
(b) The Financial Statements have been prepared based upon the
management accounts of Seller, RIL and its Subsidiaries and each of the Other
Sales Companies in accordance with their respective normal accounting practices.
The Financial Statements, including any notes thereto, are complete, true and
correct in all material respects and have been prepared in accordance with GAAP
applied on a consistent basis (except as may be indicated in the notes to the
Financial Statements as set forth in Section 3.4(a) of the Seller Disclosure
Schedule) and present fairly, in all material respects, the consolidated and
consolidating financial position and results of operations of the Wireless
Solutions Group (presented as a consolidated
15
business segment of RIL, Seller and the Other Sales Companies) as of the date
thereof and for the periods then ended.
SECTION 3.5. Consents and Approvals; No Violations.
(a) Except for filings, permits, authorizations, consents and approvals
as may be required under applicable requirements of the Exchange, state
securities or "blue sky" laws, or applicable competition legislation or
regulations of any foreign jurisdictions, no filing with or notice to and no
permit, authorization, consent or approval of any Governmental Authority is
necessary for the execution and delivery by Seller of this Agreement or the
consummation by Seller of the transactions contemplated hereby, except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings or give such notice would not have a Seller Material Adverse
Effect.
(b) Neither the execution, delivery and performance of this Agreement
by Seller nor the consummation by Seller of the transactions contemplated hereby
will (i) conflict with or result in any breach of any provision of the
Certificate of Incorporation or Bylaws of Seller, (ii) except as set forth in
Section 3.5(b) of the Seller Disclosure Schedule, result in a violation or
breach of or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration or Lien) under any of the terms, conditions or provisions of any
Contract relating to the US Wireless Sales Business or the Transferred Assets to
which Seller is a party or by which Seller or any of the Transferred Assets may
be bound or (iii) violate any Applicable Law binding on or applicable to Seller
or any of the Transferred Assets except, in the case of (ii) or (iii), for
violations, breaches or defaults which would not have a Seller Material Adverse
Effect or a material adverse effect on the ability of Seller to enter into and
perform its obligations under this Agreement or any of the Related Agreements.
SECTION 3.6. Litigation. There is no suit, claim, action, proceeding or
investigation pending or, to the Knowledge of Seller, threatened by or against
Seller with respect to the US Wireless Sales Business or against any the
Transferred Assets before any Governmental Authority, in each case, (i) that
individually or in the aggregate, could (A) have a Seller Material Adverse
Effect, (B) prevent, hinder or delay the execution and performance of this
Agreement or the consummation of the transactions contemplated hereby or (C)
result in this Agreement being declared unlawful or cause the rescission of any
of the transactions contemplated hereby or (ii) in which the amount of damages
asserted exceeds $50,000.
SECTION 3.7. Compliance with Applicable Law. Seller holds all permits,
licenses, variances, exemptions, orders and approvals of all Governmental
Authorities necessary for the lawful conduct of the US Wireless Sales Business
in the same manner and extent to which it is currently conducted, except for
failures to hold such permits, licenses, variances, exemptions, orders and
approvals which would not, individually or in the aggregate, have a Seller
Material Adverse Effect. Since November 2, 2001 and, to the Knowledge of Seller,
prior to such date, (a) Seller has not been charged with or received notice of
any material violation of any Applicable Law relating to it, or the operation of
the US Wireless Sales Business, nor, to the Knowledge of Seller, is there any
threatened claim of such violation (including any investigation) or any basis
16
therefor and (b) the US Wireless Sales Business has been conducted in compliance
in all material respects with all Applicable Laws.
SECTION 3.8. Labor Matters. (a)..There are no pending or, to the
Knowledge of the Seller, threatened charges, complaints, petitions or written
grievances before any Government Authority relating to or predicated upon a
violation of Applicable Law regarding employment, employment practices and terms
and conditions of employment, including charges of unfair labor practices,
unlawful discharge, discrimination, harassment or hostile work environment with
respect to any of the employees of the US Wireless Sales Business, which
charges, complaints, petitions or grievances have had or could have,
individually or in the aggregate, a Seller Material Adverse Effect, nor to the
Knowledge of Seller, is there any basis for any such charges, complaints,
petitions or grievances. Seller is not a party to any collective bargaining
agreement or other labor union contract applicable to persons employed by Seller
with respect to the US Wireless Sales Business. To the Knowledge of Seller, no
activities or proceedings of any labor union to organize any employees of US
Wireless Sales Business have occurred. No strikes, slowdowns, work stoppages,
lockouts have occurred since November 2, 2001 or to the Knowledge of Seller,
prior to such date, nor, to the Knowledge of Seller, have any threats thereof by
or with respect to any employees of US Wireless Sales Business occurred.
(b) Except as described in Section 3.8(b) of the Seller
Disclosure Schedule no key employee, or group of employees or any executive of
US Wireless Sales Business (A) has given written notice of his or her intention
to resign prior to the Closing Date or within 12 months after the Closing Date
or, to the Knowledge of Seller, is intending to do so; or (B) would become
entitled to any rights (including as to compensation) as a result of the entry
into, or the consummation of the transactions contemplated by this Agreement.
SECTION 3.9. Intellectual Property and Information Technology.
(a) Other than with respect to Seller's use of the Sublicensed Names,
Seller does not own or possess any licenses or other rights for the use of any
Intellectual Property in connection with the US Wireless Sales Business.
(b) To the Knowledge of Seller, the conduct of the US Wireless Sales
Business as now conducted does not infringe any valid Intellectual Property of
others.
(c) All Information Technology used by Seller in the conduct of the US
Wireless Sales Business and all material agreements or arrangements relating to
the maintenance and support, security, disaster recovery management and
utilization (including facilities management and computer bureau services
agreements) of the Information Technology owned or used by Seller in the conduct
of the US Wireless Sales Business have been disclosed to Buyer under the Stock
Purchase Agreement.
(d) All Information Technology currently used by or required to carry
on the business of Seller and fulfill the Assumed Contracts and commitments is
either owned by or validly leased or licensed to Seller or RIL.
17
(e) The Information Technology owned or used by Seller in the conduct
of the US Wireless Sales Business has the capacity and performance necessary to
fulfill the requirements it currently performs.
SECTION 3.10. Brokers. Except for the fees described in Section 3.10 of
the Seller Disclosure Schedule, which fees shall be paid by Seller, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Seller.
SECTION 3.11. Material Contracts.
(a) Section 3.11 of the Seller Disclosure Schedule lists all Contracts
described in clauses (i) through (xiii) below that relate primarily to the US
Wireless Sales Business to which the Seller is a party or pursuant to which the
Transferred Assets are otherwise bound and which have not, as of the date
hereof, been terminated or fully performed ("MATERIAL CONTRACTS"). A true,
correct and complete copy of each such Material Contract has been made available
to Buyer.
(i) any Contracts providing for a commitment of employment or
consultation services requiring payments in any one year in excess of
$100,000;
(ii) any Contracts with any Person containing any provision or
covenant prohibiting or materially limiting the ability of Seller to
engage in any business activity or compete with any Person;
(iii) any Contracts pursuant to which any Lien (other than
Permitted Liens) has been imposed on any Transferred Assets;
(iv) any Contracts (other than this Agreement) providing for
(i) the future disposition or acquisition of any of the Transferred
Assets, other than dispositions or acquisitions in the ordinary course
of business of Inventory or of assets having a fair market value of
$50,000 or less, and (ii) any merger or other business combination
involving the US Wireless Sales Business;
(v) any Contract the terms of which include express provisions
regarding confidentiality;
(vi) any Contract for the lease of personal property or
Equipment constituting a Transferred Asset to or from any Person which
provides for lease payments in excess of $100,000 per year;
(vii) any Contract that limits or contains restrictions on the
ability of Seller to incur or suffer to exist any Lien, to purchase or
sell any assets, to change the lines of business in which it
participates or engages or to engage in any merger or other business
combination and which are included as Assumed Liabilities;
(viii) any other Contracts (excluding outstanding warranty
obligations of the Seller) that (A) involve the payment, pursuant to
the terms of any such Contract, (1) by
18
Seller of more than $50,000 annually or (2) to Seller of more than
$200,000 annually and (B) cannot be terminated within ninety (90) days
after giving notice of termination without resulting in any material
cost or penalty to Seller;
(ix) any Contract concerning the issuance of a permit,
franchise or license which is material to the US Wireless Sales
Business requiring an annual payment of $100,000 or more in fees,
royalties or otherwise by Seller;
(x) any Contract the particulars of which are required to be
furnished to any competition or regulatory authority and any
undertaking that has been given or order made pursuant to any
competition legislation or in response to any request for information
or statement of objection from any Governmental Authority;
(xi) any bid, tender, proposal or offer which, if accepted,
will result in Seller becoming a party to any agreement or arrangement
in which the aggregate payments to be received or paid by Seller would
exceed $500,000;
(xii) any Contract not otherwise described in any of clauses
(i) through (xi) above under which the consequences of a default or
termination could reasonably be expected to have Seller Material
Adverse Effect;
(xiii) any material amendment to any of the Contracts
described in this Section 3.11.
(b) Each Material Contract is legal, valid, binding and enforceable by
and against Seller in accordance with its terms, except to the extent such
enforceability may be limited by applicable bankruptcy or other laws affecting
creditors' rights, or by general equity principles, and is in full force and
effect on the date hereof. Such Material Contracts are fully performable by
Seller in accordance with their terms. Seller has performed all material
obligations required to be performed by it to date under each such Material
Contract, and is not in material default under any such Material Contract. No
event has occurred which, with due notice or lapse of time or both, would
constitute a material default under any such Material Contract. To the Knowledge
of Seller, no other party to any such Material Contract is in material default
of any Material Contract and no event has occurred which, with due notice of
lapse of time or both, would constitute such a default, and otherwise there are
no grounds for the termination or cancellation of such Material Contract by
Seller.
SECTION 3.12. Title to Assets and Continued Operation.
(a) Upon consummation of the transactions contemplated by this
Agreement, Seller will have sold, assigned, transferred and conveyed to Buyer,
and Buyer will have acquired from Seller, good and marketable title to all of
the Transferred Assets owned by Seller, free and clear of all Liens, other than
Permitted Liens.
(b) All of the property, assets, and rights included in the Transferred
Assets, together with the rights provided under the Transition Services
Agreement and the services listed on Schedule 3.12 attached hereto, are
sufficient for Buyer to continue to operate the US Wireless Sales Business in
the same manner as it is conducted currently (except with respect to Seller's
19
use of the Sublicensed Names) and to perform the services of the US Wireless
Sales Business, including in accordance with all of the requirements of the
Assumed Contracts in effect on the Closing Date.
(c) Maintenance contracts are in force for each Transferred Asset which
it is normal to have maintained by independent or specialist contractors and for
each asset which the US Wireless Sales Business is obliged to maintain or repair
under a leasing or similar agreement, except as would not have a Seller Material
Adverse Effect. Those assets have been regularly maintained in accordance with
safety regulations required to be observed in relation to them and the
provisions of any applicable agreement.
SECTION 3.13. Insurance. As of immediately prior to the Closing, the
assets, properties and operations of Seller are insured under various policies
of insurance. Seller has heretofore delivered to Buyer complete and correct
copies of such insurance policies and a schedule that details for each policy
the risks insured against, coverage limits currently applicable and deductible
amounts. All such policies are in full force and effect, no notice of
cancellation has been received, and there is no existing material default, or
event which with the giving of notice or lapse of time or both, would constitute
a material default, by any insured hereunder. To the Knowledge of Seller, there
currently is no basis for an insurance claim by Seller under any of such
policies.
SECTION 3.14. Inventory and Receivables.
(a) The Inventory to be included in the Closing Balance Sheet will be
in good condition, of a quantity and quality usable in the ordinary course of
the US Wireless Sales Business and will be adequate and appropriate for the US
Wireless Sales Business as conducted on the Closing Date. Obsolete,
discontinued, returned, overage or off-quality goods will not constitute a
material part of the Inventory and will be reflected on the Closing Balance
Sheet at realizable market value.
(b) The Receivables to be included in the Closing Balance Sheet will
have been generated in the ordinary course of business and will reflect bona
fide obligations for the payment of products sold by Seller in connection with
the US Wireless Sales Business and, to the Knowledge of Seller, will be
collectible, net of any reserves. The reserves with respect to the Receivables
shown in the Closing Balance Sheet will be adequate and will have been
established consistent with Past Practices.
SECTION 3.15. Equipment.
The Equipment is in good operating condition, ordinary wear and tear
excepted, has been and is being used in the US Wireless Sales Business in
compliance in Applicable Law and is capable of being used for the purposes for
which such Equipment is now used by the US Wireless Sales Business.
SECTION 3.16. Absence of Changes. Except as set forth in Section 3.16
of the Seller Disclosure Schedule or as otherwise disclosed in this Agreement,
since December 31, 2002, the US Wireless Sales Business has been conducted in
the ordinary course consistent with Past Practices and with respect to the US
Wireless Sales Business there has not been:
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(a) any sale, lease, transfer, or assignment of any of the tangible or
intangible assets of the US Wireless Sales Business, other than sales of
Inventory or services for a fair consideration in the ordinary course of
business;
(b) any Contract entered into other than in the ordinary course of
business;
(c) any acceleration, termination, modification, or cancellation of any
Material Contract or other Contract;
(d) any Lien other than a Permitted Lien created or imposed upon any of
the Transferred Assets;
(e) any cancellation, compromise, waiver, or release of any right or
claim (or series of related rights and claims) included as Transferred Assets;
(f) any material damage, destruction, or loss (whether or not covered
by insurance) to the property of the US Wireless Sales Business, including the
Transferred Assets;
(g) any modification or change in the employment terms for any
Transferred Employee;
(h) any payment of any amount to any Person outside the ordinary cause
of business with respect to any Liability (excluding any costs and expenses
incurred or which may be incurred in connection with this Agreement and the
transactions contemplated hereby) which would constitute an Assumed Liability if
in existence as of the Closing;
(i) any change by Seller in its accounting principles, methods or
practices or in the manner it keeps its books and records or any change by
Seller of current practices with regard to sales, expenses, assets and
liabilities;
(j) any material change in the practices of pricing or discounting for
sales of finished goods, ordering supplies and raw materials, shipping finished
goods, accepting returns or honoring warranties, invoicing customers and
collecting debts;
(k) any deliveries or performance of services by Seller in connection
with its backlog of orders other than in the ordinary course or as otherwise
provided under the terms of any Assumed Contract with respect to such backlog;
(l) any threat or notification, orally or in writing, by one or more of
the distributors, customers or suppliers who, individually or in the aggregate,
are material to the US Wireless Sales Business of an intention to terminate or
materially alter their respective business relationships or Assumed Contracts,
nor has any such termination or material alteration of such relationships or
Assumed Contracts occurred; or
(m) any Contract by Seller with respect to any of the foregoing.
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SECTION 3.17. Product Warranties, Defects and Liabilities.
There exists no pending or, to the Knowledge of Seller, threatened
action, suit, inquiry, proceeding or investigation by or before any Governmental
Authority relating to any product alleged to have been manufactured, distributed
or sold by the US Wireless Sales Business to others, and alleged to have been
defective or improperly designed or manufactured or in breach of any express or
implied product warranty and there exists no latent defect in the design or
manufacture of any of the products of the US Wireless Sales Business designed or
manufactured since November 2, 2001 or, to the Knowledge of Seller, prior to
such date. There exists no pending or, to the Knowledge of Seller, threatened
product liability or warranty claims relating to the US Wireless Sales Business,
except to the extent to be reserved for on the face of the Closing Balance
Sheet, and to Knowledge of Seller, there is no reasonable basis for any such
suit, inquiry, action, proceeding, investigation or claim. Section 3.17(i) of
the Seller Disclosure Schedule includes copies of the standard terms and
conditions of sale or lease of the products and services of the US Wireless
Sales Business (containing applicable guaranty, warranty, and indemnity
provisions). Except as set forth in Section 3.17(ii) of the Seller Disclosure
Schedule, there are no express product or service warranties relating to the US
Wireless Sales Business.
SECTION 3.18. Affiliate Transactions.
With regard to the US Wireless Sales Business, Seller is not a party
to, or bound by, any Contract with any of its Affiliates, other than on
arms-length terms which are no less favorable to Seller than those which could
be obtained with a third party which is not an Affiliate and no Affiliate of
Seller owns or otherwise has any rights to or interests in any asset, tangible
or intangible, which is a Transferred Asset.
SECTION 3.19. Distributors, Customers and Suppliers.
(a) Section 3.19(a) of the Seller Disclosure Schedule sets forth a
complete and accurate list (with dollar volumes included) of (i) the ten largest
distributors (by dollar volume) of the products and services of the US Wireless
Sales Business during the twelve (12) month period ended December 31, 2002; (ii)
the ten largest customers (by dollar volume) of the products of the US Wireless
Sales Business during the twelve (12) month period ended December 31, 2002; and
(iii) the ten largest suppliers (by dollar volume) of materials or services to
the US Wireless Sales Business during the twelve (12) month period ended
December 31, 2002.
(b) Except as described in Section 3.19(b) of the Seller Disclosure
Schedule, there are no Contracts relating to the US Wireless Sales Business to
which the Seller is a party under the terms of which (i) Seller is obligated to
purchase any product or services from, or sell any product or services to, any
other Person on an exclusive basis with respect to any geographic area or group
of potential customers; or (ii) any other Person may be similarly obligated to
Seller.
SECTION 3.20. Illegal Payments.
Neither Seller nor any of its directors, officers, employees or agents,
has (a) directly or indirectly given or agreed to give any illegal gift,
contribution, payment or similar benefit to any
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supplier, customer, governmental official or employee or other person to assist
in connection with any actual or proposed transaction or made or agreed to make
any illegal contribution, or reimbursed any illegal political gift or
contribution made by any other person, to any candidate for federal, state,
local or foreign public office (i) which violates any Applicable Law, including
but not limited to, the Foreign Corrupt Practices Act of 1977, as amended, or
might subject the Buyer Parties to any Damages or penalties in any civil,
criminal or governmental litigation or proceeding or (ii) the non-continuation
of which has had or might have a Seller Material Adverse Effect or (b)
established or maintained any unrecorded fund or asset or made any false entries
on any books or records for any purpose.
SECTION 3.21. Books and Records.
The books and all corporate (including minute books and stock records
books) and financial records of US Wireless Sales Business are complete and
correct in all material respects and have been maintained in accordance with
sound business practices and Applicable Law and other requirements and no notice
has been received or allegation made that a register or book is incorrect or
should be rectified.
SECTION 3.22. Intentionally Omitted.
SECTION 3.23. Disclosure.
The representations and warranties contained in this Article 3
(including the Seller Disclosure Schedule and any other schedules and exhibits
required to be delivered by Seller to Buyer pursuant to this Agreement) and any
certificate furnished or to be furnished by Seller to Buyer pursuant to this
Agreement do not contain and will not contain any untrue statement of a material
fact or omit to state any material fact necessary, in light of the circumstances
in which they were made and taking into account the express limitations set
forth in each such representation and warranty, in order to make such
representations and warranties not misleading.
SECTION 3.24. Future Bookings.
The Final Bookings Amount (as defined in the Stock Purchase Agreement)
for the Bookings Warranty Period shall be equal to or exceed $60,000,000.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
SECTION 4.1. Organization.
(a) Buyer is duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has all requisite power
and authority to own, lease and operate its properties and to carry on its
businesses as now being conducted. Buyer is duly qualified or licensed and in
good standing to do business in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such
23
qualification or licensing necessary, except in such jurisdictions where the
failure to be so duly qualified or licensed and in good standing would not have
a Buyer Material Adverse Effect (as defined below). The term "BUYER MATERIAL
ADVERSE EFFECT" means any circumstance, change or effect that, individually or
when taken together with all other such circumstances, changes or effects, is
materially adverse to the business, operations or financial condition of Buyer
and its Subsidiaries taken as a whole or would materially impair the ability of
Buyer to consummate the transactions contemplated hereby or any Related
Agreement; provided, however, that the foregoing definition excludes the effects
of changes that are generally applicable to (i) the United States economy or
securities markets or (ii) the world economy or international securities markets
or result from the outbreak of war, other hostilities or terrorist activities.
SECTION 4.2. Capitalization.
(a) The authorized capital stock of Buyer consists of (i) 110,000,000
shares of ARX Common Stock, of which, as of June 30, 2003, 60,117,175 shares and
were issued and outstanding, excluding 4,388 shares held in Buyer's treasury and
(ii) 1,000,000 shares of preferred stock, none of which are issued and
outstanding. All of the outstanding shares of ARX Common Stock have been validly
issued and are fully paid, nonassessable and free of preemptive rights. As of
June 30, 2003, 18,569,220 shares of ARX Common Stock were reserved for issuance
and issuable upon or otherwise deliverable in connection with the exercise of
options outstanding or available for grant under Buyer's stock option plans.
Except as described above or in the Buyer SEC Filings, as of the date hereof, no
subscription, warrant, option, convertible security, stock appreciation or other
right (contingent or other) to purchase or acquire, or any securities
convertible into or exchangeable or exercisable for, any shares of or other
interest in any class of capital stock of Buyer is authorized or outstanding.
Except in connection with the transactions contemplated by this Agreement and
the Stock Purchase Agreement or as set forth in Schedule 2 to the Stock Purchase
Agreement or the Buyer SEC Filings there is not any commitment of Buyer to
issue, or register under the Securities Act, any shares, warrants, options or
other such rights or to distribute to holders of any class of its capital stock
any evidences of indebtedness or assets. Buyer does not have any obligation
(contingent or other) to purchase, redeem or otherwise acquire any shares of its
capital stock or any interest therein or to pay any dividend or make any other
distribution in respect thereof. Buyer is not party to or aware of any agreement
relating to the voting or transfer of any shares of ARX Common Stock.
(b) The shares of registered ARX Common Stock, if any, to be issued to
Seller pursuant to Section 2.7 of this Agreement have been duly authorized and
when issued, will be validly issued, fully paid and nonassessable, are free and
clear of all Liens.
SECTION 4.3. Authority Relative to this Agreement. Buyer has all
necessary corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by the board of directors of Buyer
and no other corporate proceedings on the part of Buyer are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Buyer and
constitutes a valid, legal and binding agreement of Buyer enforceable against
Buyer in accordance with its terms.
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SECTION 4.4. Consents and Approvals: No Violations.
(a) Except for filings, permits, authorizations, consents and approvals
as may be required under applicable requirements of the Exchange Act, state
securities or "blue sky" laws, or applicable competition legislation or
regulations of any foreign jurisdictions, no filing with or notice to, and no
permit, authorization, consent or approval of, any Governmental Authority is
necessary for the execution and delivery by Buyer of this Agreement or the
consummation by Buyer of the transactions contemplated hereby, except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings or give such notice would not have a Buyer Material Adverse Effect.
(b) Neither the execution, delivery and performance of this Agreement
by Buyer nor the consummation by Buyer of the transactions contemplated hereby
will (i) conflict with or result in any breach of any provision of the
Certificate of Incorporation or Bylaws of Buyer, (ii) result in a violation or
breach of or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration or Lien) under any of the terms conditions or provisions of any
Contract to which Buyer is a party or by which Buyer or any of its properties or
assets may be bound or (iii) violate any Applicable Law binding on or applicable
to Buyer or any of its properties or assets except, in the case of (ii) or
(iii), for violations, breaches or defaults which would not have a Buyer
Material Adverse Effect.
SECTION 4.5. SEC Reports; Financial Statements.
(a) Buyer has filed all required forms, reports and documents with the
SEC since June 30, 2001, each of which, as amended, has complied in all material
respects with all applicable requirements of the Securities Act and the Exchange
Act, each as in effect on the dates such forms, reports and documents were
filed. Buyer has heretofore delivered or made available to Seller, in the form
filed with the SEC (including any amendments thereto but excluding any
exhibits), (i) its Annual Reports on Form 10-K for the fiscal years ended June
30, 2002, June 30, 2001, and June 30, 2000, (ii) all definitive proxy statements
relating to Buyer's meetings of stockholders (whether annual or special) held
since June 30, 2001, and (iii) all other reports or registration statements
(other than registration statements filed on Form S-8) filed by Buyer with the
SEC since June 30, 2001 (all of the foregoing, collectively, the "BUYER SEC
FILINGS"). None of such Buyer SEC Filings, including, without limitation, any
financial statements or schedules included or incorporated by reference therein,
contained, when filed, any untrue statement of a material fact or omitted to
state a material fact required to be stated or incorporated by reference therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements of Buyer included in the Buyer SEC Filings (as
amended by any amendments filed with respect thereto) fairly present, in
conformity with generally accepted accounting principles applied on a consistent
basis (except as may be indicated in the notes thereto), the consolidated
financial position of Buyer and its consolidated Subsidiaries as of the dates
thereof and their consolidated results of operations and changes in financial
position for the periods then ended, subject, in the case of unaudited interim
financial statements, to year-end adjustments (which consist of normal recurring
accruals) and the absence of certain footnote disclosures.
25
(b) Buyer has heretofore made available or promptly will make available
to Seller a complete and correct copy of any amendments or modifications, which
are required to be filed with the SEC but have not yet been filed with the SEC,
to agreements, documents or other instruments which previously have been filed
by Buyer with the SEC pursuant to the Exchange Act.
SECTION 4.6. Litigation. There are no judicial or administrative
actions, proceedings or investigations pending or, to Buyer's knowledge,
threatened that question the validity of this Agreement or any Related
Agreements or any action to be taken by Buyer in connection with this Agreement
or any such Related Agreements or that if adversely determined, would have a
Buyer Material Adverse Effect.
SECTION 4.7. Absence of Undisclosed Liabilities.
Except as disclosed in the Buyer SEC Filings, neither Buyer nor any of
its Subsidiaries has any Liability of any nature, whether or not accrued,
contingent or otherwise, that would be required by GAAP to be reflected on a
consolidated balance sheet of Buyer and its consolidated Subsidiaries (including
the notes thereto) other than Liabilities that have accrued in the ordinary
course of business since March 31, 2003 and would not have, individually or in
the aggregate, a Buyer Material Adverse Effect.
SECTION 4.8. Illegal Payments.
Neither Buyer nor any of its directors, officers, employees or agents,
has (a) directly or indirectly given or agreed to give any illegal gift,
contribution, payment or similar benefit to any supplier, customer, governmental
official or employee or other person to assist in connection with any actual or
proposed transaction or made or agreed to make any illegal contribution, or
reimbursed any illegal political gift or contribution made by any other person,
to any candidate for federal, state, local or foreign public office (i) which
violates any Applicable Law, including but not limited to, the Foreign Corrupt
Practices Act of 1977, as amended, or might subject Seller to any Damages or
penalties in any civil, criminal or governmental litigation or proceeding or
(ii) the non-continuation of which has had or might have a Buyer Material
Adverse Effect or (b) established or maintained any unrecorded fund or asset or
made any false entries on any books or records for any purpose.
SECTION 4.9. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finders or other fee or commission from Buyer in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Buyer or any of its Affiliates.
SECTION 4.10. Disclosure.
The representations and warranties contained in this Article 4
(including any schedules and exhibits required to be delivered by Buyer to
Seller pursuant to this Agreement) and any certificate furnished or to be
furnished by Buyer to Seller pursuant to this Agreement do not contain and will
not contain any untrue statement of a material fact or omit to state any
material fact necessary, in light of the circumstances in which they were made
and taking into account the
26
express limitations set forth in each such representation and warranty, in order
to make such representations and warranties not misleading.
ARTICLE 5
COVENANTS
SECTION 5.1. Additional Agreements; Reasonable Best Efforts.
Subject to the terms and conditions herein provided, each of the
parties hereto agrees to use its commercially reasonable best efforts to take or
cause to be taken all action and to do or cause to be done all things reasonably
necessary, proper or advisable under Applicable Law to consummate and make
effective the transactions contemplated by this Agreement, including, without
limitation, (a) contesting any legal proceeding challenging the transactions
contemplated hereby, and (b) executing any additional instruments necessary to
consummate the transactions contemplated hereby and thereby. If at any time
after the Closing Date any further action is necessary to carry out the purposes
of this Agreement, the proper officers and directors of each party hereto shall
take all such necessary action.
SECTION 5.2. Public Announcements.
The parties shall consult with each other before issuing any press
releases or otherwise making any public statements on the Closing Date with
respect to this Agreement or the transactions contemplated hereby, and none of
the parties shall issue any press release or make any public statement prior to
obtaining the other parties' written approval, which approval shall not be
unreasonably withheld, except that no such approval shall be necessary to the
extent disclosure may be required by Applicable Law or applicable stock exchange
rule or any listing agreement of any party hereto.
SECTION 5.3. Employee Benefits.
(a) Offer of Employment. The parties hereto intend that there shall be
continuity of employment with respect to the employees of the US Wireless Sales
Business. Buyer shall offer employment at will, commencing on the Closing Date,
to any employee of Seller who was employed by the US Wireless Sales Business
immediately prior to Closing, including those on vacation, leave of absence or
disability (collectively, the "TRANSFERRED EMPLOYEES"), and such offer
employment to the Transferred Employees will be on substantially the same terms
in the aggregate (including salary, fringe benefits, job responsibility and
location but excluding employee stock ownership, stock option and incentive
plans) as those provided to similar employees by Buyer (or its Affiliates)
immediately prior to Closing to the extent permitted under Applicable Law.
(b) Welfare Plans - Claims Incurred; Pre-Existing Conditions.
(i) Notwithstanding any provision of this Agreement to the
contrary, Seller shall retain responsibility for and continue to provide for
payments with respect to all medical, life insurance, disability and other
welfare plan expenses and benefits for each Transferred Employee with respect to
claims incurred by such Transferred Employees or their covered dependents prior
to the Closing Date. Notwithstanding any provision of this Agreement to the
27
contrary, expenses and benefits with respect to claims incurred by Transferred
Employees or their covered dependents on or after the Closing Date shall be the
responsibility of Buyer. For purposes of this paragraph, a claim is deemed
incurred when the services that are the subject of the claim are performed; in
the case of life insurance, when the death occurs, in the case of long-term
disability benefits, when the disability occurs and, in the case of a hospital
stay, when the employee first enters the hospital.
(ii) With respect to any welfare benefit plans (as defined in
Section 3(1) of ERISA) maintained by Buyer for the benefit of Transferred
Employees on and after the Closing Date, Buyer shall, to the extent permitted
under Buyer's plans, (A) use commercially reasonable efforts to cause there to
be waived any pre-existing condition limitations (other than those limitations
existing under Seller's welfare benefit plans) and (B) give effect, in
determining any deductible and maximum out-of-pocket limitations, to claims
incurred and amounts paid by, and amounts reimbursed to, such employees with
respect to similar plans maintained by Seller (and its Affiliates) for their
benefit immediately prior to the Closing Date.
(c) Service Credit. Buyer will use commercially reasonable efforts to
provide, for the purposes of eligibility and vesting (but not for benefit
accrual) each Transferred Employee hired by Buyer with credit for all service
with Buyer and its Affiliates to the extent possible under each employee benefit
plan, program, or arrangement of Buyer or its Affiliates in which such employee
is eligible to participate to the extent that the Transferred Employees are not
paid in respect of such benefits due to their termination by Seller and re-hire
by Buyer in accordance with the terms hereof; provided, however, that in no
event shall any employee be entitled to any credit to the extent that it would
result in a duplication of benefits with respect to the same period of service.
(d) COBRA Matters. For purposes of continuation coverage required by
Section 4980B of the Code and Sections 601 through 608 of ERISA ("COBRA"), the
Transferred Employees shall be considered to have undergone a termination of
employment with Seller. It is the understanding and intention of Seller and
Buyer that the health coverage to be afforded the Transferred Employees pursuant
to Section 5.3(b)(ii) shall be coverage that, pursuant to ERISA, terminates any
continuation coverage rights the Transferred Employees might otherwise have
under COBRA as a result of termination of employment with Seller.
SECTION 5.4. Intentionally Omitted
SECTION 5.5. Signage and Labels.
Buyer will remove the names "Racal," "RIG" or "Thales" (other than the
Sublicensed Names) from all Transferred Assets and other items related to the US
Wireless Sales Business as soon as practicable but in any event within three (3)
months after the Closing Date. Buyer may not use publicly any business records
without first removing or obliterating all portrayals or references to any of
the aforementioned names or any of Seller's trade names, trademarks or service
marks (other than the Sublicensed Names) unless Seller consents prior to such
usage.
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SECTION 5.6. Use of Confidential Information; Noncompetition.
(a) Buyer hereby covenants with Seller that from the Closing Date until
the date that is three (3) years following the Closing Date, neither Buyer nor
any of its Affiliates shall (except as otherwise specifically permitted herein),
(i) use or utilize any Confidential Defense Information in the conduct of their
respective businesses (other than as may be required under the Transition
Services Agreement) nor (ii) without the prior written consent of Seller,
disclose any Confidential Defense Information to any third party. As used
herein, "CONFIDENTIAL DEFENSE INFORMATION" shall mean any proprietary
information, technical data, trade secrets or know-how, including, but not
limited to, research, product plans, products, methods, strategies, services,
customer lists, prospective customer lists, customer records, telephone lists
and all other information with respect to customers (including, but not limited
to, customers of any of Seller, RIL or the Other Sales Companies), documents,
notes, working papers, records, systems, contracts, agreements, market data and
related information, software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering information, hardware configuration
information, marketing plans, finances, pricing and credit documents and
policies, service development techniques or plans, business acquisition plans,
new personnel acquisition plans or other business information presently owned or
at any time hereafter developed by Seller, RIL or the Other Sales Companies, or
any of their respective agents or consultants or used presently or at any time
hereafter other than in the course of the Wireless Manufacturing Business or
Wireless Sales Business; provided, however, that (i) Confidential Defense
Information does not include the following: (A) any information that was
available to Buyer on a non-confidential basis prior to Buyer's receipt of such
information from Seller; (B) any information that is obtained from any source
other than Seller or any of its Affiliates (or their respective directors,
officers, employees, agents, representatives or advisors), provided that such
source has not to Buyer's knowledge entered into a confidentiality agreement
with Seller or any of its Affiliates with respect to such information or
obtained the information from an entity or person party to a confidentiality
agreement with Seller or any of its Affiliates; or (C) any information that
becomes publicly available not as a result of a breach by Buyer or any of its
Affiliates of this Agreement and (ii) if Buyer or any party to whom Buyer has
provided Confidential Defense Information becomes legally compelled (by oral
question, deposition, interrogatory, request for documents, subpoena, civil
investigative demand or similar process) to disclose any Confidential Defense
Information, Buyer shall promptly notify Seller of such requirement and further
agrees that only that portion of the Confidential Defense Information that is
legally required to be disclosed (as advised by a written opinion of Buyer's
counsel) will be disclosed, and Buyer will exercise its commercially reasonable
best efforts to obtain assurance that the Confidential Defense Information will
be treated confidentially upon disclosure. Information shall be deemed "publicly
available" if it becomes a matter of public knowledge or is contained in
materials available to the public.
(b) Seller hereby covenants with Buyer that from the Closing Date until
the date that is three (3) years following the Closing Date, neither Seller nor
any of its Subsidiaries shall, directly or indirectly, for its own account, or
as a partner, member, advisor or agent of any partnership or joint venture, or
as a trustee, officer, director, shareholder, advisor or agent of any
corporation, trust, or other business organization or entity, own, manage, join,
participate in, encourage, support, finance, promote, be engaged in, have an
interest in, give financial assistance or advice to, or be concerned in any way
in the ownership, management, operation or control of
29
any Person that designs, manufactures or sells any of the items described in
clause (a), (b) or (c) of the definition of the term "WSG Products" in
commercial markets in any country in the world where the Wireless Solutions
Group conducts such business, including, without limitation, the United States,
the United Kingdom, France, Germany, Italy, Hong Kong and every other country in
the world in which the Wireless Solutions Group conducts its business as of the
date of this Agreement. The parties agree that no portion of the US Asset
Purchase Price or Adjusted US Asset Purchase Price shall be allocated to this
covenant.
(c) The parties hereto agree that the duration and area for which the
covenant not to compete set forth in this Section 5.6 is to be effective are
reasonable. In the event that any court determines that the time period or the
area or both of them, are unreasonable and that such covenant is to that extent
unenforceable, the parties hereto agree that the covenant shall remain in full
force and effect for the greatest time period and in the greatest area that
would not render it unenforceable. The parties intend that this covenant shall
be deemed to be series of separate covenants one for each and every county of
each and every state of the United States of America and each and every
political subdivision of each and every country outside of the United States of
America where this covenant is intended to be effective. The parties hereto
agree that damages are an inadequate remedy for any breach of this covenant and
that Buyer shall, whether or not it is pursuing any potential remedies at law,
be entitled to equitable relief in the form of preliminary or permanent
injunctions without bond or other security upon any actual or threatened breach
of this covenant.
SECTION 5.7. No Solicitation.
(a) For a period of two (2) years following the Closing Date, except as
expressly permitted or required pursuant to this Agreement or the Related
Agreements, Buyer shall refrain from, either alone or in conjunction with any
other Person, directly or indirectly, through its present or future Affiliates,
soliciting for hire any employee of Seller or its Affiliates engaged in the
Defense Business.
(b) For a period of two (2) years following the Closing Date, except as
expressly permitted or required pursuant to this Agreement or the Related
Agreements, Seller shall refrain from, either alone or in conjunction with any
other Person, directly or indirectly, through its present or future Affiliates,
soliciting for hire any employee of the Buyer, RIL or any of its Affiliates
following the Stock Sale.
SECTION 5.8. Expenses.
Each of Buyer and Seller shall bear its own expenses incurred in
connection with this Agreement and the transactions contemplated hereby and in
connection with all obligations required to be performed by such party under
this Agreement
SECTION 5.9. Certain Other Covenants.
If, following the Closing, it is necessary that Buyer or Seller obtain
additional information relating to the US Wireless Sales Business prior to the
Closing Date in order to properly prepare documents or reports required to be
filed with Governmental Authorities or financial statements, and such
information is within the other party's possession, Buyer or Seller,
30
as applicable, will (at the requesting party's sole reasonable cost and expense)
furnish or cause its representatives to furnish such information to the other
party. Such information shall include, without limitation, all agreements
between Seller and any Person relating to the US Wireless Sales Business.
SECTION 5.10. Intentionally Omitted.
SECTION 5.11. Damages.
Except as otherwise expressly provided in this Agreement, the parties
agree that remedies in the Master Indemnification Agreement shall be the
exclusive remedies of the parties with respect to any and all matters covered by
this Agreement.
SECTION 5.12. Covenants with Respect to Bookings; Conduct of the
Business.
(a) From and after the date of this Agreement through the end of the
Bookings Warranty Period, Buyer covenants and agrees that it shall, and shall
cause Acquisition Sub and RIL and their respective Affiliates to:
(i) continue to solicit and book sales orders with
respect to the WSG Products in the ordinary course of its business, to
the extent it is commercially reasonable to do so;
(ii) not alter the rate or terms of compensation
payable or to become payable to any member of the Wireless Solutions
Group sales team solely in connection with or relating to any payment
made, or obligated to be made, by Seller or any of its Affiliates to
such member of the Wireless Solutions Group sales team;
(iii) not willfully delay or hinder the receipt of
any sales order or otherwise take any action intended to reduce the
aggregate amount of Qualified Bookings received during the Bookings
Warranty Period.
The foregoing shall not be construed to restrict Buyer from determining, in its
sole discretion, (x) the acceptability of any orders, including without
limitation, the gross profit margin for the WSG Product sold, terms of payment,
delivery, amount and terms of any customer furnished inventory and
creditworthiness of any customer and (y) based on any change in the
creditworthiness of any customer, whether to cancel any previously accepted
order.
(b) Within twenty-one (21) days following the end of each calendar
month ending during the Bookings Warranty Period, Buyer shall deliver to Seller
a report setting forth (i) all Qualified Bookings that occurred during such
calendar month, including with respect to each Qualified Booking, the customer
name, amount, date of booking and name of salesperson credited for such booking,
(ii) the aggregate amount of Qualified Bookings received since the Closing Date,
(iii) all Qualified Bookings that were cancelled during such calendar month,
including with respect to all such cancelled Qualified Bookings, the customer
name, amount, date of booking, name of salesperson credited for such booking,
the date of cancellation and, if known, the reason for such cancellation, and
(iv) the aggregate amount of Qualified Bookings cancelled since the Closing
Date.
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(c) From the end of the Bookings Warranty Period through the Bookings
Determination Date, Buyer shall, and shall cause RIL and Acquisition Sub and
their respective Affiliates to, provide Seller and RIG (and their
representatives) with reasonable access to the sales personnel and sales
managers of the Wireless Solutions Group. In addition, Buyer shall, and shall
cause RIL and Acquisition Sub and their respective Affiliates to, cause the
sales personnel and sales managers of the Wireless Solutions Group to meet with
Seller and RIG (and their representatives), via conference call or at physical
meeting, for at least three (3) hours each month within ten (10) days following
delivery of the monthly report furnished to Seller pursuant to Section 5.12(b),
for purposes of reviewing such monthly report, and Buyer shall cause such
personnel to cooperate and assist Seller in such reviews.
(d) The Seller acknowledges and agrees that the Buyer shall be entitled
to conduct the WSG Business in accordance with its good faith business judgment
and, in connection therewith, shall have the right to make any decision that it
determines to be commercially reasonable, including, without limitation, the
implementation of the WSG Contingency Plan dated June 23, 2003, with such
modifications thereto as management of the Company determine to be advisable in
its sole discretion.
SECTION 5.13. Compensation of WSG Employees.
Seller agrees that it shall not grant to any current director,
executive officer or other employee of RIL any increase in compensation, bonus
or other benefits, except as disclosed in Section 5.13 of the Seller Disclosure
Schedule.
ARTICLE 6
TAX MATTERS
SECTION 6.1. Taxes. Buyer shall pay all transfer Taxes resulting from
the transactions contemplated by this Agreement.
SECTION 6.2. Cooperation. Buyer and Seller shall reasonably cooperate,
and shall cause their respective Affiliates, officers, employees, agents,
auditors and representatives reasonably to cooperate, in preparing and filing
all returns, reports and forms relating to Taxes, including maintaining and
making available to each other all records necessary in connection with Taxes
and in resolving all disputes and audits with respect to all Taxable periods
relating to Taxes. Each of Buyer and Seller recognizes that Buyer and Seller may
need access, from time to time, after the Closing Date, to certain accounting
and Tax records and information held by Seller or Buyer, respectively, to the
extent such records and information pertain to events occurring prior to the
Closing Date; therefore, Seller and Buyer each agrees, (a) to properly retain
and maintain such records until such time as Buyer and Seller agree in writing
that such retention and maintenance is no longer necessary and (b) to allow the
other party and its agents and representatives, at times and dates mutually
acceptable to the parties, to inspect, review and make copies of such records as
such party or its representatives may deem necessary or appropriate from time to
time, such activities to be conducted during normal business hours and at the
expense of the requesting party.
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SECTION 6.3. Allocation of Taxes.
All real and personal property taxes and similar ad valorem obligations
levied with respect to the Transferred Assets for a taxable period that includes
(but does not end on) the Closing Date shall be apportioned between Seller and
Buyer as of the Closing Date based on the number of days of such taxable period
included in the period on and prior to the Closing Date ("PRE-CLOSING TAX
PERIOD") and the number of days of such taxable period included in the period
commencing after the Closing Date (the "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. Within a
reasonable period after the Closing, Seller and Buyer shall present a statement
to the other setting forth the amount of reimbursement to which each is entitled
under this Section 6.3, 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 ten (10) days after delivery of such
statement. Thereafter, Seller shall notify Buyer upon receipt of any xxxx for
personal property taxes relating to the Transferred Assets, part or all of which
are attributable to the Post-Closing Tax Period, and shall promptly deliver such
xxxx to Buyer, and Buyer shall pay the same to the appropriate taxing authority,
provided that if such xxxx covers any part of the Pre-Closing Tax Period, Seller
shall also remit to Buyer prior to the due date of assessment payment for the
proportionate amount of such xxxx that is attributable to the Pre-Closing Tax
Period. In the event that Seller or Buyer shall thereafter make a payment for
which it is entitled to reimbursement under this Section 6.3, the other party
shall make such reimbursement promptly, but in no event later than thirty (30)
days after the presentation of a statement setting forth the amount of
reimbursement to which the presenting party is entitled along with such
supporting evidence as is reasonably necessary to calculate the amount of
reimbursement. Any payment required under this Section 6.3 and not made within
ten (10) days after delivery of the statement shall bear interest at the rate
per annum determined, from time to time, under the provisions of Section
6621(a)(2) of the Code for each day until paid.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1. Entire Agreement; Assignment; Amendments and Waivers. (a)
This Agreement (including the Seller Disclosure Schedule), and the Related
Agreements constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and thereof and supersede all other prior
agreements and understandings both written and oral between the parties with
respect to the subject matter hereof and thereof. No representation, warranty,
promise, inducement or statement of intention has been made by any party that is
not embodied in this Agreement or such other documents, and none of the parties
shall be bound by, or be liable for, any alleged representation, warranty,
promise, inducement or statement of intention not embodied herein or therein.
(b) This Agreement may not be assigned by operation of law or otherwise
without the written consent of the other party; provided, however, that Seller
may assign any or all of its rights and obligations under this Agreement to any
Qualified Defense Buyer and; provided, further, that Buyer may assign all of its
rights and obligations under this Agreement to any of its wholly-owned direct or
indirect subsidiaries.
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(c) This Agreement may not be amended or modified, and any of the
terms, covenants, representations, warranties, or conditions hereof may not be
waived, except by a written instrument executed by all of the parties hereto, or
in the case of a waiver, by the party waiving compliance. Any waiver by any
party of any condition, or of the breach of any provision, term, covenant,
representation, or warranty contained in this Agreement, in any one or more
instances, shall not be deemed to be nor construed as further or continuing
waiver of any such condition, or of the breach of any other provision, term,
covenant, representation, or warranty of this Agreement.
SECTION 7.2. Validity. If any provision of this Agreement or the
application thereof to any person or circumstance is held invalid or
unenforceable, then the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected thereby and to
such end the provisions of this Agreement are agreed to be severable.
SECTION 7.3. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by facsimile
or by registered or certified mail (postage prepaid, return receipt requested)
to each other party as follows:
if to Buyer: Aeroflex Incorporated
00 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx Xxxxx, President
with a copy to: Kramer, Coleman, Wactlar & Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxxxxxx
Xxxxxxx, Xxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq. or
Xxxxx X. Xxxxxxxxx, Esq.
if to Seller to: Racal Instruments Inc.
0 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx Xxxxxx
with copies to: X.X. Xxxxxx & Company
000 Xxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
Xxxxxx Xxxxxx Capital Partners
One Xxxxxxxxxx Street
Pacific Telesis Tower, 00xx Xxxxx
00
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
and
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx XX 00000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
SECTION 7.4. Governing Law, Forum Selection, Jurisdiction.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without regard or giving effect to the
principles of conflicts of law thereof.
(b) Each party agrees that any action, proceeding or claim it commences
against the other party pursuant to this Agreement or any Related Agreement
shall be brought in the United States District Court for the Southern District
of New York, in New York, New York (or if subject matter jurisdiction is lacking
in such court, the jurisdiction of the New York Supreme Court for the County of
New York). Each party irrevocably and unconditionally commits to the in personam
jurisdiction of such Court and waives, to the fullest extent permitted by law,
any objections which it may now or hereafter have to the laying of the venue of
any such suit, action or proceeding brought in such court, any claim that any
such suit, action or proceeding brought in such court has been brought in an
inconvenient forum and the right to object, with respect to any such suit,
action or proceeding brought in such court, that such court does not have
jurisdiction over the person of such party. In any suit, action or proceeding,
each party waives, to the fullest extent it may effectively do so, personal
service of any summons, complaint or other process and agrees that the service
thereof may be made by certified or registered mail, addressed to such party at
its address set forth in Section 7.3 hereof. Each party agrees that a final
non-appealable judgment in any such suit, action or proceeding brought in such a
court shall be conclusive and binding.
SECTION 7.5. WAIVER OF JURY TRIAL.
--------------------
TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED,
EACH OF THE PARTIES HERETO HEREBY WAIVES, AND COVENANTS
35
THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT
TO TRIAL BY JURY IN RESPECT OF ANY ISSUE OR ACTION ARISING OUT OF OR BASED UPON
THIS AGREEMENT OR ANY RELATED AGREEMENT OR THE SUBJECT MATTER HEREOF, OR THEREOF
OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS
CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. ANY
PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 7.5 WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF
ITS RIGHT TO TRIAL BY JURY.
SECTION 7.6. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
SECTION 7.7. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and its successors and
permitted assigns and nothing in this Agreement express or implied is intended
to or shall confer upon any other person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
SECTION 7.8. Personal Liability. This Agreement shall not create or be
deemed to create or permit any personal liability or obligation on the part of
any direct or indirect stockholder of Seller or Buyer or any officer, director,
employee, agent, representative or investor of any party hereto, except in the
event of actual fraud by such Person.
SECTION 7.9. Specific Performance. The parties hereby acknowledge and
agree that the failure of any party to perform its agreements and covenants
hereunder, including its failure to take all actions as are necessary on its
part to the consummation of the transactions contemplated hereby, will cause
irreparable injury to the other parties, for which damages, even if available,
will not be an adequate remedy. Accordingly, each party hereby consents to the
issuance of injunctive relief by any court of competent jurisdiction to compel
performance of such party's obligations and to the granting by any court of the
remedy of specific performance of its obligations hereunder (without the
requirement of posting a bond).
SECTION 7.10. Bulk Transfer Laws. Buyer acknowledges and agrees that
Seller will not comply with the provisions of any bulk transfer laws of any
jurisdiction in connection with the transactions contemplated by this Agreement.
SECTION 7.11. WARN Act. Buyer represents and warrants to Seller that
Buyer will continue to operate the US Wireless Sales Business for the period
immediately following the Closing Date.
SECTION 7.12. Disclosure Generally. If and to the extent any
information required to be furnished in any section of the Seller Disclosure
Schedule is contained in this Agreement or disclosed in any section of the
Seller Disclosure Schedule, such information shall be deemed to be included in
any other section of the Seller Disclosure Schedule to the extent that such
disclosure is specifically identified in such other section. The inclusion of
any information in
36
any section of the Seller Disclosure Schedule shall not be deemed to be an
admission or acknowledgement by Seller, in and of itself, that such information
is material to or outside the ordinary course of the business of Seller.
SECTION 7.13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which shall constitute one and the same agreement.
[signatures on following page]
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the day and year first above written.
RACAL INSTRUMENTS INC.
By: /s/C. Xxxxxxxxx Xxxxxx
------------------------------------------------
Name: C. Xxxxxxxxx Xxxxxx
Title: Vice President and Assistant Secretary
AEROFLEX INCORPORATED
By: /s/Xxxxxxx Xxxxx
------------------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
SIGNATURE PAGE TO US ASSET PURCHASE AGREEMENT
SCHEDULE 3.12
EXCLUDED SERVICES
Sales and marketing services performed by Seller in connection with the
US Wireless Sales Business, including distribution services and administrative
and other services relating to the processing of orders.
Schedule 3.12-1