Execution Copy
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ASSET PURCHASE AGREEMENT
DATED AS OF JULY 31, 2003
BY AND AMONG
RACAL INSTRUMENTS GROUP LIMITED
AND
AEROFLEX INCORPORATED
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS.........................................................2
SECTION 1.1. Certain Definitions....................................2
SECTION 1.2. Index of Other Defined Terms...........................7
ARTICLE 2 TRANSFER OF ASSETS..................................................8
SECTION 2.1. Transfer of Assets.....................................8
SECTION 2.2. Excluded Assets.......................................10
SECTION 2.3. Assumption of Liabilities.............................11
SECTION 2.4. Excluded Liabilities..................................11
SECTION 2.5. Assignment of Contracts and Rights....................13
SECTION 2.6. Closing...............................................13
SECTION 2.7. Total Purchase Price Allocation.......................14
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER...........................14
SECTION 3.1. Organization and Qualification........................14
SECTION 3.2. Authority Relative to this Agreement..................15
SECTION 3.3. Subsidiaries..........................................15
SECTION 3.4. Financial Statements..................................15
SECTION 3.5. Consents and Approvals; No Violations.................16
SECTION 3.6. Litigation............................................16
SECTION 3.7. Compliance with Applicable Law........................16
SECTION 3.8. Labor Matters.........................................17
SECTION 3.9. Intellectual Property and Information Technology......17
SECTION 3.10. Brokers...............................................18
SECTION 3.11. Material Contracts....................................18
SECTION 3.12. Title to Assets and Continued Operation...............20
SECTION 3.13. Insurance.............................................20
SECTION 3.14. Inventory and Receivables.............................20
SECTION 3.15. Equipment.............................................21
SECTION 3.16. Absence of Changes....................................21
SECTION 3.17. Product Warranties, Defects and Liabilities...........22
SECTION 3.18. Affiliate Transactions................................22
SECTION 3.19. Distributors, Customers and Suppliers.................22
SECTION 3.20. Illegal Payments......................................23
SECTION 3.21. Books and Records.....................................23
SECTION 3.22. Disclosure............................................23
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER............................23
SECTION 4.1. Organization..........................................23
SECTION 4.2. Authority Relative to this Agreement..................24
SECTION 4.3. Consents and Approvals: No Violations................24
SECTION 4.4. Litigation............................................24
(i)
SECTION 4.5. Illegal Payments......................................25
SECTION 4.6. Brokers...............................................25
SECTION 4.7. Disclosure............................................25
ARTICLE 5 COVENANTS..........................................................25
SECTION 5.1. Additional Agreements; Reasonable Best Efforts........25
SECTION 5.2. Public Announcements..................................25
SECTION 5.3. Removal of Transferred Assets.........................26
SECTION 5.4. Signage and Labels....................................26
SECTION 5.5. Expenses..............................................26
SECTION 5.6. Certain Other Covenants...............................26
SECTION 5.7. Damages...............................................27
ARTICLE 6 TAX MATTERS........................................................27
SECTION 6.1. Taxes.................................................27
SECTION 6.2. Cooperation...........................................27
SECTION 6.3. Allocation of Taxes...................................27
ARTICLE 7 MISCELLANEOUS......................................................28
SECTION 7.1. Entire Agreement; Assignment; Amendments and Waivers..28
SECTION 7.2. Validity..............................................28
SECTION 7.3. Notices...............................................29
SECTION 7.4. Governing Law, Forum Selection, Jurisdiction..........30
SECTION 7.5. WAIVER OF JURY TRIAL..................................30
SECTION 7.6. Descriptive Headings..................................31
SECTION 7.7. Parties in Interest...................................31
SECTION 7.8. Personal Liability....................................31
SECTION 7.9. Specific Performance..................................31
SECTION 7.10. Disclosure Generally.................................31
SECTION 7.11. Counterparts.........................................31
SCHEDULE 1 Knowledge of Seller
SCHEDULE 2 Xxxxxx Xxxx of Sale
SCHEDULE 3 German Xxxx of Sale
SCHEDULE 4 Italian Bills of Sale
(ii)
TABLE OF CONTENTS
TO
EU DISCLOSURE SCHEDULE
Section 3.4(a) Financial Statements
Section 3.5(a) Government Filings and Consents
Section 3.7 Compliance with Laws
Section 3.8(a) Collective Bargaining Agreements
Section 3.8(b) Employee Notices
Section 3.10 Brokers
Section 3.11 Material Contracts
Section 3.16 Absence of Changes
Section 3.17 Product Warranties
Section 3.18 Affiliate Transactions
Section 3.19(a) Distributors, Customers and Suppliers
Section 3.19(b) Exclusive Agreements
(iii)
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT"), dated as of July 31,
2003, by and among Racal Instruments Group Limited, a company incorporated in
England and Wales with registered number 04279438 ("SELLER") and Aeroflex
Incorporated, a Delaware corporation ("BUYER") (each a "PARTY" and together the
"PARTIES").
RECITALS
WHEREAS, Racal France, Racal Germany and Racal Italy (all as defined
below and together the "EUROPEAN SELLERS" and "EUROPEAN SELLER" means all or any
of them) and RIL are all wholly owned subsidiaries of Seller;
WHEREAS, the European Sellers are engaged, among other things, in the
sale and service of digital wireless test and measurement solutions in Europe
(the "EU 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, the European Sellers are Affiliates (as defined below) of
Racal Instruments Limited, a company incorporated in England with registered
number 00501054 ("RIL"), and Racal Instruments Inc., a Delaware corporation
("RII");
WHEREAS, RIL is engaged in the design, development, manufacture,
production and sale of digital wireless test and measurement solutions (the
"WIRELESS MANUFACTURING BUSINESS");
WHEREAS, RII is engaged, among other things, in the sale and service of
digital wireless test and measurement solutions in the United States (the "US
WIRELESS SALES BUSINESS," and, together with the EU 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,
IFR Systems Limited, a company incorporated in England and Wales with registered
number 03491978 and a wholly owned subsidiary of Buyer ("ACQUISITION SUB"), and
Seller have entered into a Stock Purchase Agreement of even date herewith (the
"STOCK PURCHASE AGREEMENT"), pursuant to which Acquisition Sub will purchase
from Seller 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 RII
(the "US ASSET PURCHASE AGREEMENT"), pursuant to which Buyer will procure the
purchase from RII of substantially all of the assets of the US Wireless Sales
Business (the "US ASSET SALE");
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 US Asset
Purchase Price (as defined in the US Asset Purchase Agreement) and the EU Asset
Purchase Price (as defined below);
1
WHEREAS, concurrently with the consummation of the transactions
contemplated by this Agreement, Buyer, Acquisition Sub, Seller, RII, the
European Sellers 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 Seller, RII and the European Sellers on the other hand, have
agreed to indemnify each other with respect to certain matters relating to this
Agreement, the Local Bills of Sale (as defined below) the Stock Purchase
Agreement and the US Asset Purchase Agreement;
WHEREAS, concurrently with the consummation of the transactions
contemplated by this Agreement, Buyer, IFR Americas, Inc., a Delaware
corporation and wholly owned subsidiary of Buyer ("IFR"), the European Buyers
(as defined below), RII and the European Sellers shall enter into a Transition
Services Agreement (the "TRANSITION SERVICES AGREEMENT"), pursuant to which, on
the terms and subject to the conditions set forth therein, following the Closing
(as defined below) (a) Buyer, IFR or the relevant European Buyer will provide
the European Sellers and RII with certain services provided by the Wireless
Sales Business prior to consummation of the transactions contemplated hereby and
(b) the European Sellers and RII will provide Buyer or the relevant European
Buyer with certain services provided by the European Sellers and RII to the
Wireless Sales Business prior to the consummation of the transactions
contemplated hereby; and
WHEREAS, Seller desires to procure the sale by the European Sellers to
the European Buyers of substantially all of the assets of the EU Wireless Sales
Business as set out in Section 2.1 below, comprising the French Transferred
Assets, the German Transferred Assets and the Italian Transferred Assets (all as
defined below) in consideration of Buyer's obligations hereunder, including
Buyer's agreement to procure that the European Buyers assume certain of the
liabilities of the European Sellers relating to the EU Wireless Sales Business
as set out in Section 2.3 below, all on the terms set forth herein.
AGREEMENT
---------
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:
"Aeroflex Italy" means Aeroflex Milan Srl, a company incorporated in
Italy and an Affiliate of Buyer.
"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.
2
"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 with such officer's, director's, employee's, consultant's or agent's
activities on behalf of such Person or any of its Affiliates).
"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 of the contracts, agreements, options, leases,
licenses, sales and accepted purchase orders, commitments and other instruments
of any kind, whether written or oral, made by or on behalf of a European Seller
in the course of carrying on the EU Wireless Sales Business and to which any
European Seller is a party and is bound by on the Closing Date.
"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.
"Employee Agreements" means the French Employee Agreements and the
German Employee Agreements.
"Escrow Agent" means The Bank of New York.
"Escrow Agreement" means the Escrow Agreement, dated as of the date
hereof, pursuant to which, inter alia, the Buyer and the European Buyers have
recourse for their indemnification claims against Seller and the European
Sellers under the Master Indemnification Agreement.
"EU Disclosure Schedule" means the disclosure schedule with respect to
this Agreement concurrently delivered by Seller to Buyer.
"European Buyers" means IFR Germany, IFR France and Aeroflex Italy, and
"European Buyer" means all or any of them.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Xxxxxx Xxxx of Sale" means the contrat de Cession de fonds de commerce
substantially in the form set out in Schedule 2 hereto to be entered into
between Racal France (as transferor) and IFR France (as transferee) concurrently
with the execution of this Agreement pursuant to which the transfer of the
French Transferred Assets shall be effected.
3
"French Employee Agreements" means the tripartite agreements by and
amongst IFR France, Racal France and the relevant French Employee, all or any of
them.
"French Employees" means Xxxxxx Richebon, Xxxx-Xxxxxxxx Xxxxxx and
Xxxxxxx Xxxxxxx, all or any of them.
"GAAP" means generally accepted accounting principles in the United
States as in effect from time to time and applied consistently throughout the
periods involved.
"German Xxxx of Sale" means the xxxx of sale substantially in the form
set out at Schedule 3 hereto to be entered into between Racal Germany (as
transferor) and IFR Germany (as transferee) concurrently with the execution of
this Agreement, pursuant to which the transfer of the German Transferred Assets
shall be effected.
"German Employee Agreements" means the tripartite agreements by and
amongst IFR Germany, Racal Germany and the relevant German Employee, all or any
of them.
"German Employees" means X. Xxxxxxxxxxxx and/or X. Xxxxx.
"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.
"IFR France" means IFR International SA, a societe anonyme incorporated
in France, an Affiliate of Buyer.
"IFR Germany" means IFR GmbH, a company incorporated in Germany, an
Affiliate of Buyer.
"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 EU 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 EU Wireless Sales Business, and each license or licensing
agreement for any of the foregoing.
4
"Italian Bills of Sale" means the Italian Accounts Payable Xxxx of
Sale, the Italian Contracts Xxxx of Sale and the Italian Receivables Xxxx of
Sale.
"Italian Accounts Payable Xxxx of Sale" means the xxxx of sale
substantially in the form set out at Schedule 4A hereto to be entered into
between Racal Italy (as transferor) and Aeroflex Italy (as transferee)
concurrently with the execution of this Agreement, pursuant to which the
transfer of the Assumed Contracts of Racal Italy shall be effected.
"Italian Contracts Xxxx of Sale" means the xxxx of sale substantially
in the form set out at Schedule 4B hereto to be entered into between Racal Italy
(as transferor) and Aeroflex Italy (as transferee) concurrently with the
execution of this Agreement, pursuant to which the assignment of the Assumed
Contracts of Racal Italy shall be effected.
"Italian Receivables Xxxx of Sale" means the xxxx of sale substantially
in the form set out at Schedule 4C hereto to be entered into between Racal Italy
(as transferor) and Aeroflex Italy (as transferee) concurrently with the
execution of this Agreement, pursuant to which the transfer of the Accounts
Payable of Racal Italy shall be effected.
"Knowledge of Seller" means the actual (and not constructive or
imputed) knowledge of the individuals set forth in Schedule 1 hereto, 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.
"Local Bills of Sale" means the Xxxxxx Xxxx of Sale, the German Xxxx of
Sale and the Italian Bills of Sale and "Local Xxxx of Sale" means all or any of
them.
"Local GAAP" means, with respect to each of the European Sellers,
generally accepted accounting principles in the country in which such European
Seller is incorporated as in effect from time to time and applied consistently
throughout the periods involved.
"Past Practices" means the European Sellers' respective practices with
respect to the operation of the EU 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 Local 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
5
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
Local GAAP; (iii) Liens relating to deposits 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 Local
GAAP.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization or other
legal entity.
"Qualified Defense Buyer" shall have the meaning ascribed to such term
in the Master Indemnification Agreement.
"Racal France" means Racal Instruments SAS, a societe par actions
simplifiee incorporated in France, and a wholly-owned subsidiary of Seller.
"Racal Germany" means Racal Instruments GmbH, a company incorporated in
Germany, and a wholly-owned subsidiary of Seller.
"Racal Italy" means Racal Instruments Srl, a company incorporated in
Italy, and a wholly-owned subsidiary of Seller.
"Related Agreements" means the Stock Purchase Agreement, the US Asset
Purchase Agreement, the Local Bills of Sale, the Escrow Agreement, the Master
Indemnification Agreement, the Transition Services Agreement, the Sublicense
Agreement, the Tax Deed (as defined in the Stock Purchase Agreement), the
Security Agreements (as defined in the Master Indemnification Agreement) and all
other agreements, instruments or documents executed in connection herewith and
therewith.
"SEC" means the Securities and Exchange Commission.
"Sublicense Agreement" means a Sublicense Agreement between RIG LP and
RIL dated June 28, 2003.
"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 income, adjusted gross income or gross
receipts tax, employment related tax (including
6
employee withholding or employer payroll tax), 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 Seller, pursuant to which Seller and RII acquired the Wireless
Manufacturing Business and Wireless Sales Business, respectively.
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
------------ -------
"Accounts Payable" 2.3(a)
"Accrued Expenses" 2.3(d)
"Acquisition Sub" Recitals
"Adjusted European Asset Purchase Price" 2.7
"Agreement" Preamble
"Assumed Contracts" 2.1(d)
"Assumed Liabilities" 2.3
"Assumed Warranties" 2.3(e)
"Buyer" Preamble
"Buyer Closing Deliveries" 2.6(c)(i)
"Buyer Material Adverse Effect" 4.1
"Closing" 2.6(a)
"Closing Date" 2.6(a)
"Confidential Defense Information" 5.6(a)
"Confidentiality Agreement" 5.2(c)
"Defense Business" Recitals
"Equipment" 2.1(a)
"EU Asset Purchase Price" 2.6(b)(iii)
"EU Seller Counterparty" 2.3(a)
"EU Wireless Sales Business" Recitals
"European Seller Counterparty" 2.3(a)
"European Sellers" Recitals
"Excluded Assets" 2.2
"Excluded Liabilities" 2.4
"Financial Statements" 3.4(a)
"French Asset Purchase Price" 2.6(b)(i)
"French Transferred Assets" 2.1
7
"German Asset Purchase Price" 2.6(b)(ii)
"German Transferred Assets" 2.1
"IFR" Recitals
"Inventory" 2.1(c)
"Italian Asset Purchase Price" 2.6(b)(iii)
"Italian Transferred Assets" 2.1
"Master Indemnification Agreement" Recitals
"Material Contracts" 3.11
"Party" Preamble
"Post-Closing Tax Period" 6.3
"Pre-Closing Tax Period" 6.3
"Receivables" 2.1(b)
"RIG LP" Recitals
"RIL" Recitals
"RII" Recitals
"Seller" Preamble
"Seller Closing Deliveries" 2.6(c)(ii)
"Seller Material Adverse Effect" 3.1
"Seller Permits" 3.7
"Stock Purchase Agreement" Recitals
"Stock Sale" Recitals
"Total Purchase Price" Recitals
"Transferred Assets" 2.1
"Transition Services Agreement" Recitals
"US Asset Sale" Recitals
"US Asset Purchase Agreement" Recitals
"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. 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 procure that each of
the European Buyers shall purchase, and Seller agrees to procure that each of
the European Sellers shall sell, by means of the Local Bills of Sale at Closing,
free and clear of all Liens other than Permitted Liens, all the assets,
properties, rights, contracts, causes of action, claims and operations of such
European Seller described below, wherever located, whether tangible or
intangible, real, personal or mixed, that are owned by, leased by or in the
possession or control of any of the European Sellers wherever located (such
collective assets, properties, rights, contracts, causes of action, claims,
operations and businesses to be transferred to the European Buyers by the
European Sellers pursuant to the relevant Local Xxxx of Sale to be referred to
as the "FRENCH TRANSFERRED ASSETS," the "GERMAN TRANSFERRED
8
ASSETS" and "ITALIAN TRANSFERRED ASSETS" as appropriate and, collectively, 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 such European Seller used in the EU Wireless Sales Business and
listed or referred to in Schedule 1 of the relevant Local Xxxx of Sale, other
than any Italian Xxxx of Sale (collectively, the "EQUIPMENT"), together with all
warranties and licenses issued to such European 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 such European Seller relating to, or arising in respect of, the EU
Wireless Sales Business and listed or referred to in Schedule 2 of the relevant
Local Xxxx of Sale (or, in the case of Racal Italy, Schedule 1 to the Italian
Receivables Xxxx of Sale) or arising after May 31, 2003, in each case, 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 such European Seller
for the EU Wireless Sales Business, including all supplies, containers,
packaging materials, raw materials, work-in-process, finished goods and samples
listed or referred to in Schedule 3 of the relevant Local Xxxx of Sale, other
than any Italian Xxxx of Sale, or acquired by such European Seller after May 31,
2003, in each case, 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 such European Seller is a party (and
such European Seller's rights thereunder) relating to the EU Wireless Sales
Business and listed in Schedule 4 of the relevant Local Xxxx of Sale (or, in the
case of Racal Italy, Schedule 1 to the Italian Contracts Xxxx of Sale)
(collectively, the "ASSUMED CONTRACTS");
(e) all prepaid charges and expenses of such European Seller relating
to the EU Wireless Sales Business and listed or referred to in Schedule 5 of the
relevant Local Xxxx of Sale, other than any Italian Xxxx of Sale, or arising
after May 31, 2003, in each case, to the extent reflected in the Closing Balance
Sheet;
(f) all rights of such European Seller to insurance proceeds with
respect to claims for Damages to the Transferred Assets, unless such proceeds
reimburse such European Seller for the previously completed repair or
restoration of such Transferred Assets;
(g) all of such European Seller's rights, claims, credits, causes of
action or rights of set-off against third parties relating to, or arising in
connection with, the EU Wireless Sales Business or the Transferred Assets (other
than those relating exclusively to Excluded Liabilities), whether liquidated or
unliquidated, fixed or contingent, including without limitation 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
9
furnished to such European Seller for use in the EU 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 of its Affiliates, all books, records, files and papers of the EU
Wireless Sales Business, whether in hard 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 EU
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 of its Affiliates, all lists of and data relating to present, former and
prospective customers, distributors and suppliers of the EU Wireless Sales
Business to be handed over in printed form and, if and to the extent possible,
in electronic format at the Closing;
(j) all goodwill associated with the EU Wireless Sales Business or the
Transferred Assets; and
(k) to the extent not already specified above, all other assets of such
European Sellers of whatever nature exclusively used in or for the purposes of
the EU Wireless Sales Business and all rights arising from any of those assets.
SECTION 2.2. Excluded Assets. Notwithstanding anything herein to the
contrary, the European Sellers will retain and not transfer, convey, assign or
deliver to the European Buyers, and neither Buyer nor any of European Buyers
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 EU Wireless Sales
Business on hand as of the close of business on the Closing Date;
(b) all life insurance policies covering officers and other employees
of any European Seller and all other insurance policies relating to the
operation of the EU Wireless Sales Business;
(c) all refunds or credits, if any, of Taxes due to any European Seller
by reason of its ownership of the Transferred Assets or operation of the EU
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 any European Seller against third parties (other than
rights, claims and recoveries acquired by Buyer and/or any European Buyers
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 EU
Wireless Sales Business; and
(e) Seller's rights under this Agreement and the European Seller's
rights under the Local Bills of Sale.
10
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 procure that the relevant European Buyer shall assume, perform
and discharge the following Liabilities as relevant with respect to the EU
Wireless Sales Business and the Transferred Assets (collectively, the "ASSUMED
LIABILITIES"):
(a) all obligations of the European Seller that is the counterparty to
such European Buyer ("EUROPEAN SELLER COUNTERPARTY") with respect to accounts
payable of the EU Wireless Sales Business (including accounts payable owed to
RIL) listed in Schedule 6 of the relevant Local Xxxx of Sale (or, in the case of
Racal Italy, Schedule 1 to the Italian Accounts Payable Xxxx of Sale) or arising
after May 31, 2003, in each case, to the extent reflected in the Closing Balance
Sheet ("ACCOUNTS PAYABLE");
(b) all obligations of its European Seller Counterparty under, or
arising out of, the Assumed Contracts under the relevant Local Xxxx of Sale to
the extent accrued on the Closing Balance Sheet or arising after the Closing
Date;
(c) all obligations of its European Seller Counterparty with respect to
any capital lease and outstanding at the Closing Date relating to any
Transferred Asset listed in Schedule 7 of the relevant Local Xxxx of Sale, other
than any Italian Xxxx of Sale, or arising after May 31, 2003, in each case, to
the extent reflected in the Closing Balance Sheet;
(d) all obligations of its European Seller Counterparty with respect to
accrued expenses of the EU Wireless Sales Business referred to in Schedule 8 of
the relevant Local Xxxx of Sale, other than any Italian Xxxx of Sale, or arising
after May 31, 2003, in each case, to the extent reflected in the Closing Balance
Sheet ("ACCRUED EXPENSES");
(e) all obligations of its European Seller Counterparty with respect to
product warranties and service contracts relating 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"); and
(f) all Liabilities of the EU 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 any provision of
Section 2.3 of this Agreement to the contrary, other than the Assumed
Liabilities, neither Buyer nor any European Buyer shall assume, agree to perform
or discharge, indemnify any European Seller against, or procure the same or
otherwise have any responsibility for any Liabilities of any European 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) any Indebtedness (other than current accounts payable or accrued
expenses with respect to the EU 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
11
on the Closing Balance Sheet and other than to the extent arising following the
Closing Date under Assumed Contracts);
(b) any Liability for Taxes relating to the EU Wireless Sales Business
or the Transferred Assets attributable to any period prior to the Closing Date
including any Liability of any European Seller for such periods for the unpaid
taxes of any Person as a transferee or successor, by contract or otherwise;
(c) any Liability of Seller or any European Seller arising under or
relating to the Thales Purchase Agreement;
(d) any Liability of any European Seller to indemnify any Person by
reason of the fact that such Person was a director, officer, employee or agent
of such European 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 any
European Seller;
(f) any Liability of any European Seller to any stockholder or
Affiliate of such European Seller or such stockholder, other than RIL pursuant
to any Assumed Contract or Accounts Payable;
(g) any Liability pertaining to any European Seller or its business and
arising out of or resulting from non-compliance prior to Closing with any
Applicable Law;
(h) any Liability of any European Seller for making payments or
providing payments or benefits of any kind to any current or former employees of
such European Seller (other than the French Employees or the German Employees to
the extent reflected on the Closing Balance Sheet or arising after the Closing
Date) including, without limitation, (A) any Liability in respect of medical and
other benefits for existing and future retirees; (B) any Liability in respect of
work related employee injuries or workmen's compensation claims; and (C) any
payment in respect of taxes, social security contributions or insurance;
(i) any Liability of any European Seller with respect to any severance
obligations required by Applicable Law, contract or otherwise, owed to employees
of such European Seller resulting from any termination initiated by such
European Seller on or before the Closing Date or in connection with the
consummation of the transactions contemplated hereby including without
limitation any Liability of any European Seller with respect to any claim of
persons currently employed by any European Seller, which relate to or arise out
of the transactions contemplated by this Agreement; and
(j) any Liability, whether presently existing or hereafter arising,
which is attributable to an Excluded Asset.
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
12
affect, amend, modify, supplement or otherwise change the definitions of Assumed
Liabilities and Excluded Liabilities set out in this Agreement.
SECTION 2.5. Assignment of Contracts and Rights. With respect to any
Assumed Contract as to which the terms thereof or Applicable Law require the
consent of a third party for the assignment of such Assumed Contract to the
relevant European Buyer and such consent has not been obtained on or before the
Closing Date:
(a) promptly after the date hereof, to the extent requested by Buyer or
any European Buyer, Seller shall, and will procure that the European Sellers
shall, use its and their 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 the relevant European Buyer; and
(b) Seller shall, and shall procure that the European Sellers shall,
cooperate with the Buyer and the European Buyers in an arrangement reasonably
satisfactory to Buyer and Seller under which the relevant European Buyer would
obtain, to the extent practicable, the claims, rights and benefits and assume
the corresponding obligations thereunder in accordance with this Agreement and
the Local Bills of Sale, including subcontracting, sub-licensing or sub-leasing
to the relevant European Buyer, or under which Seller and/or the European
Sellers would enforce for the benefit of the relevant European Buyer, with the
relevant European Buyer assuming the applicable obligations, any and all claims,
rights and benefits of such Seller and/or the relevant European Seller against a
third party thereto. Seller will, and will procure that the European Sellers
will, promptly pay to Buyer or such European Buyer as the Buyer may direct all
monies received by Seller and/or any European 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 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"). The closing of each of the Local Bills of
Sale shall take place at the location provided for in such Local Xxxx of Sale.
(b) On the Closing Date, as consideration for the sale of the
Transferred Assets, Buyer, on behalf of the relevant European Buyer, shall pay
to Seller, on behalf of each European Seller, the EU Asset Purchase Price (as
defined below) to be allocated amongst the European Sellers as follows:
(i) Racal France the sum of $250,000.00 (the "FRENCH ASSET PURCHASE
PRICE");
(ii) Racal Germany the sum of $250,000.00 (the "GERMAN ASSET PURCHASE
PRICE"); and
(iii) Racal Italy the sum of $100,000.00 (the "ITALIAN ASSET PURCHASE
PRICE" and, together with the French Asset Purchase Price and German Asset
Purchase Price, the "EU ASSET PURCHASE PRICE"), in each case, by wire transfer
to the bank account of Seller referred to in Section 2.2 of the Stock Purchase
Agreement in immediately available funds.
(c) At Closing:
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(i) Buyer shall deliver to Seller the Xxxxxx Xxxx of Sale, the Italian
Bills of Sale, the German Xxxx of Sale, the French Employee Agreements and the
German Employee Agreements ("BUYER CLOSING DELIVERIES") duly executed by the
appropriate European Buyer; and
(ii) Seller shall deliver to Buyer the Xxxxxx Xxxx of Sale, the Italian
Bills of Sale, the German Xxxx of Sale, the French Employee Agreements and the
German Employee Agreements ("SELLER CLOSING DELIVERIES") duly executed by the
appropriate European Seller, French Employee or German Employee as the case may
be;
provided, however, that no such document shall expand in any way any of Buyer's
or a European Buyer's obligations to assume anything other than the Assumed
Liabilities.
SECTION 2.7. Total Purchase Price Allocation.
(a) For all Tax purposes, each of the EU Asset Purchase Prices
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 the manner mutually agreed upon by the
parties prior the date hereof, and each party hereto shall adopt and utilize
such 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 the relevant European Buyer's cost for the
relevant European Transferred Assets may differ from the amount so allocated to
the extent necessary to reflect the relevant European Buyer's capitalized
acquisition costs other than the amount realized by the relevant European
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 such price allocation.
(b) Each party agrees to make any timely filing required by Applicable
Law.
(c) To the extent required by Applicable Law, any indemnification
payment treated as an adjustment to any of the French Asset Purchase Price,
German Asset Purchase Price or Italian Asset Purchase Price of the Transferred
Assets under the Master Indemnification Agreement shall be treated as an
adjustment to the French Asset Purchase Price, German Asset Purchase Price or
Italian Asset Purchase Price, as applicable, 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 2.7(a) above.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer:
SECTION 3.1. Organization and Qualification. Each of the European
Sellers is a corporation duly organized, validly existing and in good standing
under the laws of the
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jurisdiction of its incorporation or formation and has all power and authority
to own, lease and operate its Transferred Assets and to carry on its portion of
the EU Wireless Sales Business as now being conducted. Each of the European
Sellers is duly qualified or licensed and in good standing in each jurisdiction
where the nature of the activities conducted by such European Seller in
connection with the EU Wireless Sales Business or the character of the property
or assets owned, leased or operated by it in connection with the EU 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
EU Wireless Sales Business or the Transferred Assets; provided, however, that
the foregoing definition excludes the effects of changes that are generally
applicable to (i) the industries and markets in which the EU Wireless Sales
Business operates, (ii) the European 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, the execution, delivery
and performance by the European Sellers of the relevant Local Xxxx of Sale, the
French Employee Agreements and the German Employee Agreements, and the
consummation of the transactions contemplated hereby and thereby, are within the
corporate powers of Seller and such European Seller (as the case may be) and
have been duly authorized by all requisite corporate action. 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. Each Local Xxxx of Sale has been duly and validly executed and
delivered by the relevant European Seller and constitutes a legal, valid and
binding agreement of such European Seller in accordance with its terms.
SECTION 3.3. Subsidiaries. None of the European Sellers has any
Subsidiaries. Each European Seller is a wholly owned subsidiary of Seller.
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 EU Disclosure Schedule (together with the WSG
Balance Sheet, the "FINANCIAL STATEMENTS").
(b) The Financial Statements have been prepared based upon the
management accounts of RIL and its Subsidiaries, RII and each of the European
Sellers 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 EU Disclosure
Schedule) and present fairly, in all material respects, the consolidated and
consolidating financial position and
15
results of operations of the Wireless Solutions Group (presented as a
consolidated business segment of RIL, RII and the European Sellers) as of the
date thereof and for the periods then ended.
SECTION 3.5. Consents and Approvals; No Violations.
(a) Except as set forth in Section 3.5(a) of the EU Disclosure Schedule
or as may be required under and other 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 (x) Seller of this Agreement or (y)
any European Seller of the relevant Local Xxxx of Sale, or the consummation of
the transactions contemplated hereby and thereby, 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 (x) this
Agreement by Seller or (y) any European Seller of the relevant Local Xxxx of
Sale, nor (z) the consummation of the transactions contemplated hereby or
thereby will (i) conflict with or result in any breach of any provision of the
certificate of incorporation or bylaws (or similar governing documents) of such
Person, (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 relating to the EU Wireless
Sales Business or the Transferred Assets to which any European Seller is a party
or by which any European Seller or any of the Transferred Assets may be bound or
(iii) violate any Applicable Law binding on or applicable to Seller or any
European 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 or
any European Seller to enter into and perform its respective obligations under
this Agreement, any of the Related Agreements or the Local Bills of Sale.
SECTION 3.6. Litigation. There is no suit, claim, action, proceeding or
investigation pending or, to the Knowledge of Seller, threatened by or against
any European Seller with respect to the EU Wireless Sales Business or against
any of the Transferred Assets before any Governmental Authority (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 relevant Local Xxxx of Sale or the consummation of the
transactions contemplated hereby and thereby, (C) result in this Agreement or
the relevant Local Xxxx of Sale being declared unlawful or cause the rescission
of any of the transactions contemplated hereby thereby or (D) in which the
amount of damages asserted against Seller or any European Seller exceeds
$50,000.
SECTION 3.7. Compliance with Applicable Law. Except as set forth in
Section 3.7 of the EU Disclosure Schedule, the European Sellers hold all
permits, licenses, variances, exemptions, orders and approvals of all
Governmental Authorities necessary for the lawful conduct of the EU Wireless
Sales Business (the "SELLER Permits") in the same manner and extent to which it
is currently conducted, except for failures to hold such permits, licenses,
variances,
16
exemptions, orders and approvals which would not, individually or in the
aggregate, have a Seller Material Adverse Effect. Except as set forth in Section
3.7 of the EU Disclosure Schedule, since November 2, 2001 and, to the Knowledge
of Seller, prior to such date, no European Seller has been charged with or
received notice of any violation of any Applicable Law relating to it, or the
operation of EU Wireless Sales Business, nor, to the Knowledge of Seller, is
there any threatened claim of such violation (including any investigation) or
any basis therefor.
SECTION 3.8. Labor Matters.
(a) To the Knowledge of Seller, there are no 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 EU 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. Except as disclosed in
Section 3.8(a) of the EU Disclosure Schedule, none of the European Sellers is a
party to any collective bargaining agreement or other labor union contract
applicable to persons employed by such European Seller with respect to the EU
Wireless Sales Business. To the Knowledge of Seller, no activities or
proceedings of any labor union to organize any employees of the EU 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 the EU Wireless Sales Business occurred.
(b) Except as described in Section 3.8(b) of the EU Disclosure
Schedule no key employee, or group of employees or any executive of the EU
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 or the Local
Bills of Sale.
SECTION 3.9. Intellectual Property and Information Technology.
(a) Other than with respect to the European Sellers' use of the
Sublicensed Names (as defined in the Stock Purchase Agreement), none of the
European Sellers owns or possesses any license or other rights for the use of
any Intellectual Property in connection with the EU Wireless Sales Business.
(b) To the Knowledge of Seller, the conduct of the EU Wireless Sales
Business as now conducted does not infringe any valid Intellectual Property of
others.
(c) All Information Technology used by the European Sellers in the
conduct of the EU Wireless Sales Business and all material agreements or
arrangements relating to the maintenance and support, security, disaster
recovery management and utilization (including
17
facilities management and computer bureau services agreements) of the
Information Technology owned or used by the European Sellers in the conduct of
the EU Wireless Sales Business have been made available to Buyer pursuant to
Section 3.25 of the Stock Purchase Agreement.
(d) All Information Technology currently used by or required to carry
on EU Wireless Sales Business and fulfill the Assumed Contracts and commitments
is either owned by or validly leased or licensed to one of the European Sellers
or RIL.
(e) The Information Technology owned or used by the European Sellers in
the conduct of the EU 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 EU Disclosure Schedule, which fees shall be paid by Seller and/or the
European Sellers, 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 and the Local Bills of Sale based
upon arrangements made by or on behalf of any European Seller.
SECTION 3.11. Material Contracts.
(a) Section 3.11 of the EU Disclosure Schedule lists all Contracts
described in clauses (i) through (xiii) below that relate primarily to the EU
Wireless Sales Business to which any European 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"):
(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 any European
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 EU 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;
18
(vii) any Contract (other than this Agreement) that limits or
contains restrictions on the ability of any of the European Sellers 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 European Sellers) that (A) involve the payment,
pursuant to the terms of any such Contract, (1) by any European Seller
of more than $50,000 annually or (2) to any European 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 the applicable European Seller;
(ix) any Contract concerning the issuance of a permit,
franchise or license which is material to the EU Wireless Sales
Business requiring an annual payment of $100,000 or more in fees,
royalties or otherwise by any of the European Sellers;
(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 any of the European Sellers becoming a party to any
agreement or arrangement in which the aggregate payments to be received
by the relevant European 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.
Seller has delivered or made available to Buyer a true, correct and
complete copy of each such Material Contract.
(b) Each Material Contract is legal, valid, binding and enforceable by
and against the European Seller party thereto 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 each of the European Seller party thereto in accordance
with their terms. Each of the European Sellers party thereto 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,
19
would constitute such a default, and otherwise there are no grounds for the
termination or cancellation of such Material Contract by any of the European
Sellers party thereto.
SECTION 3.12. Title to Assets and Continued Operation.
(a) Upon consummation of the transactions contemplated by this
Agreement, subject to obtaining any required third party consents, the European
Sellers will have sold, assigned, transferred and conveyed to the relevant
European Buyer, and the relevant European Buyer will have acquired from the
relevant European Seller, good and marketable title to all of the Transferred
Assets owned by such European 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, are sufficient for the relevant European Buyer to continue to operate
the EU Wireless Sales Business in the same manner as it is currently conducted
(except with respect to the European Sellers' use of the Sublicensed Names in
their legal or trading name) and to perform the services of the EU 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 that
is normal to have maintained by independent or specialist contractors and for
each Transferred Asset which any of the European Sellers is obliged to maintain
or repair under a leasing or similar agreement, except as would not have a
Seller Material Adverse Effect. Such Transferred 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 Closing, the
assets, properties and operations of the European Sellers are insured under
various policies of insurance, all of which are described in Section 3.13 of the
Seller Disclosure Schedule relating to the US Asset Purchase Agreement, which
discloses 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 any
European Seller under any of such policies.
SECTION 3.14. Inventory and Receivables.
(a) The Inventory will be in good condition, of a quantity and quality
usable in the ordinary course of the EU Wireless Sales Business and will be
adequate and appropriate for the EU Wireless Sales Business as now conducted.
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 will have been generated in the ordinary course of
business and will reflect bona fide obligations for the payment of products sold
by the relevant European Seller in connection with the EU Wireless Sales
Business and, to the Knowledge of Seller, will
20
be collectible, net of any reserves. The reserves with respect to the
Receivables to be 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 EU 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 EU Wireless Sales
Business.
SECTION 3.16. Absence of Changes. Except as set forth in Section 3.16
of the EU Disclosure Schedule or as otherwise disclosed in this Agreement, since
December 31, 2002, the European Sellers have conducted the EU Wireless Sales
Business in the ordinary course consistent with Past Practices and, with respect
to the EU Wireless Sales Business, there has not been :
(a) any sale, lease, transfer, or assignment of any of the tangible or
intangible assets of the EU 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 EU Wireless Sales Business, including the
Transferred Assets;
(g) any modification or change in the employment terms of any French
Employee or German 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 any of the European Sellers in its accounting
principles, methods or practices or in the manner it keeps its books and records
or any change by any of the European Sellers 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;
21
(k) any deliveries or performance of services by any of the European
Sellers 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 EU 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 any of the European Sellers with respect to any of
the foregoing.
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 any of the
European Sellers to others in connection with the EU Wireless Sales Business,
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 products of the EU 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 EU
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(ii) of the EU Disclosure Schedule includes copies of the standard
terms and conditions of sale or lease of the products and services of the EU
Wireless Sales Business (containing applicable guaranty, warranty, and indemnity
provisions). Except as set forth in Section 3.17(iii) of the EU Disclosure
Schedule, none of the European Sellers has provided any express product or
service warranties relating to the EU Wireless Sales Business.
SECTION 3.18. Affiliate Transactions. Except as set forth in Section
3.18 of the EU Disclosure Schedule (a) with regard to the EU Wireless Sales
Business, none of the European Sellers is, or has been, 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 such European Seller than those which could be obtained
with a third party which is not an Affiliate and (b) no Affiliate of any of the
European Sellers 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 EU Disclosure Schedule sets forth a complete
and accurate list (with dollar volumes included) of each of the European
Sellers' (i) ten largest distributors (by dollar volume) of the products and
services of the EU Wireless Sales Business during the twelve (12) month period
ended December 31, 2002; (ii) ten largest customers (by dollar volume) of the
products of the EU Wireless Sales Business during the twelve (12) month period
ended December 31, 2002; and (iii) ten largest suppliers (by dollar volume) of
materials or services to the EU Wireless Sales Business during the twelve (12)
month period ended December 31, 2002.
22
(b) Except as described in Section 3.19(b) of the EU Disclosure
Schedule, there are no Contracts relating to the EU Wireless Sales Business to
which any European Seller is a party under the terms of which (i) any of the
European Sellers 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 any of the European Sellers.
SECTION 3.20. Illegal Payments. None of the European Sellers nor any of
their respective 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, or might subject the European Buyer 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 EU 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.
SECTION 3.22. Disclosure. The representations and warranties contained
in this Article 3 (including the EU Disclosure Schedule and any other schedules
and exhibits required to be delivered by Seller or the European Sellers to the
Buyer or the European Buyers pursuant to this Agreement or any relevant Local
Xxxx of Sale) and any certificate furnished or to be furnished by Seller or any
European Seller to Buyer or any European Buyer pursuant to this Agreement or the
Local Xxxx of Sale 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.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
SECTION 4.1. Organization. Each European 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.
Each European Buyer is duly qualified or licensed and in good standing to do
business in each jurisdiction in which any property owned, leased or operated by
it or the nature of the business conducted by it makes such 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
23
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 the
Buyer and the European Buyers (taken as a whole) or would materially impair the
ability of the Buyer to consummate or procure the consummation of 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 European 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. Authority Relative to this Agreement. The execution,
delivery and performance by the Buyer of this Agreement, the execution, delivery
and performance by the European Buyers of the relevant Local Xxxx of Sale and
relevant Employee Agreements, and the consummation of the transactions
contemplated hereby and thereby, are within the corporate powers of the Buyer
and such European Buyer (as the case may be) and have been duly authorized by
all requisite corporate action. This Agreement has been duly and validly
executed and delivered by Buyer and constitutes a legal, valid and binding
agreement of Buyer enforceable against Buyer in accordance with its terms. Each
Local Xxxx of Sale and each Employee Agreement has been duly and validly
executed and delivered by the relevant European Buyer and constitutes a legal
valid and binding agreement of such European Buyer in accordance with its terms.
SECTION 4.3. 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 (x) Buyer of this Agreement or (y)
any European Buyer of the relevant Local Xxxx of Sale 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 (x) this
Agreement by the Buyer or (y) any European Buyer of the relevant Local Xxxx of
Sale, nor (z) the consummation of the transactions contemplated hereby or
thereby will (i) conflict with or result in any breach of any provision of the
certificate of incorporation or bylaws (or similar governing documents) of such
Person, (ii) result in the violation or breach or constitute (with or without
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 terms or
conditions or provisions of any material Contract to which Buyer or any European
Buyer is a party or by which any of their respective properties or assets may be
bound or (iii) violate any Applicable Law binding on or applicable to Buyer or
any European Buyer or any of the Transferred Assets except, in the case of (ii)
or (iii), for violations, breaches or defaults which would not have a Buyer
Material Adverse Effect.
SECTION 4.4. Litigation. There are no judicial or administrative
actions, proceedings or investigations pending or, to Buyer's knowledge,
threatened that question the validity of this
24
Agreement, the Local Xxxx of Sale, any Related Agreements or any action to be
taken by Buyer or the European Buyers in connection with such agreements or that
if adversely determined, would have a Buyer Material Adverse Effect.
SECTION 4.5. Illegal Payments. None of the European Buyers nor any of
their 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 or
might subject any European 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 4.6. 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 European Buyer.
SECTION 4.7. Disclosure. The representations and warranties contained
in this Article 4 (including any schedules or exhibits required to be delivered
by the Buyer or the European Buyers to Seller or the European Sellers pursuant
to this Agreement or the relevant Local Xxxx of Sale) and any certificate
furnished or to be furnished by the Buyer or any European Buyer to Seller or any
European Seller pursuant to this Agreement or the Local Xxxx of Sale 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.
ARTICLE 5
COVENANTS
SECTION 5.1. Additional Agreements; Reasonable Best Efforts. Subject to
the terms and conditions herein provided, each of the parties 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 Buyer and Seller shall consult
with each other before issuing any press releases or otherwise making any public
statements on the Closing
25
Date with respect to this Agreement or the transactions contemplated hereby, and
the Buyer shall procure that none of the European Buyers shall, and Seller shall
procure that none of the European Sellers 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, the
European Sellers or the European Buyers.
SECTION 5.3. Removal of Transferred Assets. The parties hereby agree
that, at the request of Buyer and at Buyer's sole cost and expense, Seller shall
be responsible for procuring the removal of all of the Transferred Assets from
each premises occupied or used by any of the European Sellers in connection with
the operation of the EU Wireless Sales Business. Notwithstanding the foregoing,
Seller's obligations shall be limited to the removal of the Transferred Assets
from such premises to the agreed point of delivery being the vehicles employed
by Buyer or the relevant European Buyer for the transportation of the
Transferred Assets from the relevant European Seller's premises to whatever
location or locations Buyer or the relevant European Buyer so chooses. Buyer
shall or shall procure, as promptly as practicable but in any event within 15
Business Days following the Closing Date, the foregoing requests are made, such
requests to indicate on which day(s) the aforementioned transportation vehicles
will be available for loading. Buyer shall fully reimburse Seller for any cost
or expense incurred by the European Sellers in connection with the removal and
delivery of the Transferred Assets, but shall have no other liability to Seller
with respect to the removal of the Transferred Assets from the European Seller's
premises.
SECTION 5.4. Signage and Labels. Buyer will remove or procure the
removal of the names "Racal," "RIG" or "Thales" (other than the Sublicensed
Names) from all Transferred Assets and other items related to the EU Wireless
Sales Business as soon as practicable but in any event within three (3) months
after the Closing Date. Neither Buyer nor any European Buyer may use publicly
any business records without first removing or obliterating all portrayals or
references to any of the aforementioned names or any of any of the European
Sellers' trade names, trademarks or service marks (other than the Sublicensed
Names) unless the applicable European Seller's consents prior to such usage.
SECTION 5.5. Expenses. Each of the parties shall bear its and its
Affiliates' own expenses incurred in connection with this Agreement, the Local
Bills of Sale and the transactions contemplated hereby and thereby and in
connection with all obligations required to be performed by such party under
this Agreement, the Local Bills of Sale and the Employee Agreements.
SECTION 5.6. Certain Other Covenants. If, following the Closing, it is
necessary that Buyer or any of Seller or the European Sellers obtain additional
information relating to the EU 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 any of the European Buyers, 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 any of the European Sellers and any Person relating to the EU Wireless
Sales Business.
26
SECTION 5.7. Damages. Except as otherwise expressly provided in this
Agreement or in the relevant Local Xxxx of Sale, 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.
ARTICLE 6
TAX MATTERS
SECTION 6.1. Taxes. Buyer shall pay or procure the payment of 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 any European Seller or European Buyer,
respectively, to the extent such records and information pertain to events
occurring prior to the Closing Date; therefore, Seller and Buyer agree to
procure that, (a) records are properly retained and maintained 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.
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
27
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 of
four percent (4%) per annum for each day until paid.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1. Entire Agreement; Assignment; Amendments and Waivers.
(a) This Agreement (including the EU Disclosure Schedule, the Local
Bills of Sale and the Employee Agreements together with schedules and exhibits
thereto), 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 and the Local Bills of Sale 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.
(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 the 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 a further or continuing
waiver of any such condition or of the breach of any other provision, term,
covenant, representation, or warranty of this Agreement.
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.
28
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 Group Limited
00/00 Xxxxxx Xxxx
Xxxxxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx BH217PF
Telecopier: x000000000000
Attention: Xxxx 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, 37th Floor
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.
29
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 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.
30
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.
SECTION 7.10. Disclosure Generally. If and to the extent any
information required to be furnished in any section of the EU Disclosure
Schedule is contained in this Agreement or disclosed in any section of the EU
Disclosure Schedule, such information shall be deemed to be included in any
other section of the EU Disclosure Schedule to the extent that such disclosure
is specifically identified in such other section. The inclusion of any
information in any section of the EU Disclosure Schedule shall not be deemed to
be an admission or acknowledgement by the European Sellers, in and of
themselves, that such information is material to or outside the ordinary course
of the business of the European Sellers.
SECTION 7.11. 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]
31
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 GROUP LIMITED
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 EU Asset Purchase Agreement
SCHEDULE 1
KNOWLEDGE OF SELLER
Xxxxx Xxxxxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxx Xxxx
Schedule 1-1
SCHEDULE 2
XXXXXX XXXX OF SALE
Schedule 2-1
SCHEDULE 3
GERMAN XXXX OF SALE
Schedule 3-1
SCHEDULE 4
ITALIAN BILLS OF SALE
Schedule 4-1
