ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") made and entered into as of
this 6th day of December, 1996, by and between TRANSISTOR DEVICES INC., a New
Jersey corporation with a principal place of business at 00 Xxxxxxxxx Xxxx,
Xxxxx Xxxxxx, XX 00000 (the "Seller") and ST KELTEC CORPORATION, a Delaware
corporation with a principal place of business at 00 Xxxx Xxxxxx, Xxxx Xxxxxx
Xxxxx, Xxxxxxx 00000 (the "Buyer").
WITNESSETH:
WHEREAS, Seller has conducted and currently conducts a business called
the "Military Power Systems Division" which designs, develops, manufactures,
markets and services electronic products, including but not limited to Low
Voltage Linear Power Supplies, for military applications (the "Business"); and
WHEREAS, Seller desires to sell and Buyer desires to purchase certain
rights, properties and assets of Seller pertaining to the Business as described
in this Agreement in consideration of the payment of the Purchase Price (as
defined in Section 2.1 hereof), the assumption and performance of certain
liabilities of such Business, and the performance of certain other obligations,
all on the terms and subject to the conditions contained in this Agreement; and
WHEREAS, Buyer is a wholly-owned subsidiary of Signal Technology
Corporation ("STC");
NOW, THEREFORE, in consideration of the mutual covenants and subject to
the terms and conditions herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
I. Purchase and Sale of Assets; Assumption of Liability.
1.1 On the "Closing Date" (as defined in Section 3.1
hereof) and subject to the terms and conditions set forth in this Agreement,
Seller shall convey, sell, assign, transfer, and deliver to Buyer, and Buyer
shall purchase from Seller, those assets and properties, consisting of
Inventory, Machinery, Drawings and rights related thereto, all as described on
Schedule 1.1 (the "Assets"), and shall assign to Buyer each and all of the
"Material Contracts" (as defined in Section 8.9 below).
1.2 On the Closing Date and subject to the terms and
conditions set forth in this Agreement, Buyer shall assume the liabilities
described on Schedule 1.2 (the "Assumed Liabilities"). Except for the Assumed
Liabilities, Buyer does not assume, and shall have no responsibility whatsoever
for, any
other liabilities or obligations of Seller, whether known, unknown, liquidated,
unliquidated, contingent or otherwise.
II. Purchase Price.
2.1 The total purchase price to be paid by Buyer to Seller for
the Assets shall be the sum of the prices of each of "Machinery and Equipment",
the "Drawings" and the exclusive right with respect thereto and the "Total
Inventory", as set forth on Schedule 1.1 hereof, as the same may be adjusted, by
way of increase or decrease, as described hereinafter (the "Purchase Price").
The Purchase Price shall be paid by Buyer to Seller as follows:
a) One Million Dollars ($1,000,000) (the "Down
Payment") shall be paid at the "Closing" (as defined in Section 3.1) by wire
transfer or by certified or bank check.
b) The total price set forth in Schedule 1.1 for all
items of Machinery and Equipment shall be paid by wire transfer or by certified
or bank check on that date thirty (30) days after the completion of the
relocation of the machinery that is being purchased as a part of the Assets,
which relocation shall be at Buyer's sole expense and shall occur at a time
selected by Buyer, but in no event later than one hundred eighty (180) days
after the Closing;
c) The balance of the Purchase Price, subject to
adjustment as aforesaid, shall be paid in two installments, the first on the
sixth month anniversary of the Closing Date (the "First Payment Date"), in an
amount equal to Buyer's reasonable estimate of one half of such balance, and the
second on the first anniversary of the Closing Date (the "Second Payment Date"),
in an amount equal to the then unpaid balance, by wire transfer or by certified
or bank check, together with interest at the rate per annum announced to the
public and charged by Bank of Boston as its prime commercial lending rate on the
Closing Date at Boston, Massachusetts, for loans to prime commercial borrowers,
computed from the Closing Date to the date of payment thereof;
2.2 a) "Work in Process Inventory" shall mean
i) products the manufacture of which has not been
completed and the raw material of which has been issued out of stock and are in
the manufacturing process on the Closing Date and
ii) all of the products in and for a "Backlog Job"
(as hereinafter defined) the manufacture of which has been completed and which
products
[A] have not been shipped to the respective
customers as of the Closing Date, and
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[B] are listed on Schedule 2.2a) attached
hereto and made a part hereof ("Backlog Finished Goods Inventory"),
and shall be "Assets" hereunder. "Backlog Job" shall mean products to be
manufactured and shipped pursuant to a contract or purchase order in effect on
the Closing Date.
b) "Stock Inventory" shall mean items which are held
by Seller in stock on the Closing Date. Such items are not included in the
Assets, but will be accepted by Buyer on consignment and will be used by Buyer
from time to time at Buyer's sole option, except as hereinafter otherwise
provided. All Stock Inventory not used by Buyer will remain inventory of Seller.
With respect to each item of Stock Inventory used by Buyer, Buyer shall pay
Seller on the First Payment Date an amount equal to the sum of the cost to
Seller of such item plus ten percent (10%) of such cost (the "Stock Inventory
Price") for those items so used by Buyer after the Closing Date but before the
First Payment Date and shall pay Seller on the Second Payment Date an amount
equal to the Stock Inventory Price for those items so used by Buyer after the
First Payment Date but before the Second Payment Date. Seller shall have the
right to use those items of Stock Inventory that are in excess of then current
requirements to fulfill the Buyer's then production and delivery schedules, and
Buyer shall purchase those items of Stock Inventory that are required to fulfi11
production and delivery schedules of Backlog Jobs.
c) "Non-Backlog Finished Goods Inventory" shall mean
all of the products for each Non-Backlog Job (as defined in Section 2.7) below)
the manufacture of which has been completed and which products i) have been
returned to and are included in stores as of the Closing Date, and ii) are
listed on Schedule 2.2c) attached hereto and made a part hereof, and such items
are not included in the Assets, but will be accepted by Buyer on consignment and
will be acquired by Buyer from time to time as Buyer receives orders for such
items.
2.3 With respect to each item of Non-Backlog Finished Goods
Inventory listed on Schedule 2.2c), Buyer shall pay Seller on the First Payment
Date the amount of the price listed on Schedule 2.2c) for each item thereof that
has been so acquired by Buyer after the Closing Date but before the First
Payment Date and on the Second Payment Date the amount of the price listed on
Schedule 2.2c) for each item thereof that has been so acquired by Buyer after
the First Payment Date but before the Second Payment Date; provided that, with
respect to such items that have not been sold by Buyer prior to the Second
Payment Date, Buyer shall have the right thereafter to sell the same at any
price and shall thereafter remit to Seller Seventy-Five Percent (75%) of the
price actually received by Buyer for each sale thereof thereafter made.
2.4 Items received after the Closing Date that were under open
purchase orders from Seller to vendors as of the Closing Date are Stock
Inventory as the same are received.
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III. Closing.
3.1 Subject to the conditions precedent to closing set forth
herein, the consummation of the sale and purchase of Assets for which this
Agreement provides (the "Closing") shall take place at the offices of ST Keltec
Corporation on or about 6 December 1996 or at and on such other place, time, and
date as may be mutually agreed to by Seller and Buyer (the "Closing Date"), and
shall be deemed to occur as of the close of business on the Closing Date. If the
Closing has not occurred prior to 15 January 1997, then at any time thereafter a
party that is not in breach of this Agreement shall have the unilateral right to
terminate this Agreement without liability on its part.
3.2 At the Closing the following shall take place:
a) the receipt of the Down Payment shall be confirmed
to Buyer by Seller;
b) Seller shall deliver to Buyer a xxxx of sale in
the form attached hereto as Exhibit A and hereby made a part hereof;
c) At the close of business on the Closing Date,
Buyer shall take delivery of all of the Assets at the Seller's premises at 00
Xxxx Xxxxxx, Xxxx Xxxxxx Xxxxx, Xxxxxxx 00000 (the "Plant"). Buyer shall remove
all Assets from the Plant within one hundred eighty (180) days after the
Closing.
IV. Conditions Precedent to Seller's Obligations. The obligations of
Seller hereunder are subject to the fulfillment to the reasonable satisfaction
of Seller and its counsel, at or prior to the Closing Date, of the following
conditions, unless otherwise waived by Buyer in writing:
4.1 All representations and warranties of Buyer made herein
shall be true and accurate in all material respects as of the Closing Date with
the same effect as though such representations and warranties had been made on
the Closing Date.
4.2 No action or proceeding shall be then pending or
threatened before a court or other governmental body or by any public authority
to restrict or prohibit the acquisition by Buyer of the Assets.
V. Conditions Precedent to Buyer's Obligations. The obligations of
Buyer hereunder are subject to the fulfillment to the reasonable satisfaction of
Buyer and its counsel, at or prior to the Closing Date, of the following
conditions, unless otherwise waived by Buyer in writing:
5.1 All representations and warranties of Seller made herein
shall be true and accurate in all material respects as of the Closing Date with
the
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same effect as though such representations and warranties had been made on the
Closing Date.
5.2 No action or proceeding shall be then pending or
threatened before a court or other governmental body or by any public authority
to restrict or prohibit the sale by Seller or the acquisition by Buyer of the
Assets, or which could terminate or cancel any of the contracts, the work
pursuant to which was then part of a Backlog Job.
VI. Seller's Continuing Obligations.
6.1 Seller shall authorize Buyer to use and occupy the Plant,
during the period from the Closing Date until the date upon which Buyer has
removed all of the Assets therefrom (the "Move Date"), all in accordance with
the provisions of Section 7.4 hereof.
6.2 Upon Buyer's request at any time during a period of one
(1) year following the Closing Date, Seller shall execute and deliver to Buyer
any documents not delivered to Buyer on the Closing Date that Buyer reasonably
requests from Seller for perfecting the transfer of the Assets to Buyer
contemplated by this Agreement.
6.3 a) For a period of five (5) years after the Closing,
Seller shall not, directly or indirectly, in any capacity whatsoever, propose to
design or manufacture, or design or manufacture any products listed in Schedule
6.3, or any products substantially similar to such products, or conduct or
assist others in conducting or be involved or interested in any manner in any
business which is in competition with the developing, manufacturing, production,
distribution, marketing or selling of any such products;
b) For a period of two (2) years after the Closing,
Seller shall not, directly or indirectly, in any capacity whatsoever:
i) propose to design or manufacture, or
design or manufacture any 1power supplies or DC to DC converters used or similar
to those used in the programs listed in Schedule 6.3, or conduct or assist
others in conducting or be involved or interested in any manner in any business
which is in competition with the developing, manufacturing, production,
distribution, marketing or selling of any such products used or similar to those
used in any of such programs; and
ii) recruit or solicit, or assist any other
person or party in recruiting or soliciting any "Employee" (as hereinafter
defined), or induce or attempt to induce or assist any other person or entity in
inducing or attempting to induce any Employee to terminate or alter his
relationship with Buyer (collectively "Recruiting Activity"). For the purposes
of this Section 6.3c), the term "Employee" shall mean any person who is, on the
Closing Date, an
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employee or consultant of Seller and who was engaged in any work in connection
with the Military Power Systems Division of Seller and whose employment or
consulting arrangement had not been terminated by Buyer as of the date of any
such Recruiting Activity.
6.4 Seller acknowledges that the business of Buyer is
international in scope, and that geographical limitations on the covenants set
forth in this Article VI are therefore not appropriate. Seller acknowledges that
the scope of each of the covenants contained in Section 6.3 is reasonable as to
time, area and persons and is necessary to protect the legitimate business
interests of Buyer. Furthermore, such covenants will be regarded as divisible
and if any such covenant is found by any court of competent jurisdiction to be
unenforceable because it extends for too long a period of time or over too great
a range of activities or persons or in too broad a geographic area, it shall be
interpreted to extend over the maximum period of time, range of activities or
persons, or geographic area as to which it may be enforceable. The provisions of
this Article VI shall survive the Closing and the termination of the Agreement.
6.5 All commissions incurred by Seller and which are, or are
to become, due to third-party sales representatives of Seller shall be the
responsibility of Seller, except as specifically otherwise provided in Section
7.6 below.
VII. Buyer's Continuing Obligations.
7.1 After the Closing Date, Buyer shall make available to
Seller any books of account, financial records, original bills of sale,
contracts, or other written instruments or records delivered to Buyer by Seller
pursuant to this Agreement at any reasonable time during business hours for any
proper purpose (including, but not limited to, performing all necessary
accounting functions in order for Seller to prepare year-end financial
statements).
7.2 Buyer shall honor Seller's warranty policy described on
Schedule 7.2 with respect to products of Seller shipped to customers within
twelve (12) months prior to the Closing in the ordinary course of business;
provided that Buyer shall have no such obligations with respect to any cost or
expense of any kind arising out of any design defect, whether patent or latent,
in any product shipped by Seller at any time, and all of such costs and expenses
shall be borne by Seller, but if any of such costs are borne by Buyer they may
be recovered by Buyer in any manner, including, without limitation, offset
against the unpaid balance of the Purchase Price. In any case of design defect
hereunder that comes to the attention of Buyer, Buyer shall give notice thereof
to Seller, and if, in any such case, in Buyer's reasonable opinion a cost of at
least Five Thousand Dollars ($5,000) will be involved, Seller shall have the
option promptly upon receipt of such notice either to elect to pay the cost
thereof as soon as the same is reasonably determined or to perform the services
required to
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remedy the matter, and in any such event, Seller shall deal directly with Buyer,
and Buyer shall deal with the customer involved therein
7.3 Buyer shall have the right granted by Seller in the nature
of a license (the "License") to use and occupy the Plant and to use in the
ordinary course of business all of Seller's equipment and other personalty
located therein, during the period from the Closing Date until the Move Date
(which Move Date shall, as hereinabove stated, be within One Hundred Eighty
(180) days from the date hereof) in order that Buyer may use the Assets in the
optimal manner, in its discretion, from and after the Closing. For such license
Buyer shall pay to Seller Eight Hundred Dollars ($800) per day (the "License
Fee") commencing on 1 March 1997 and ending on the Move Date. In addition to the
payment of the License Fee, during the License period, Buyer shall perform
normal maintenance of the Plant, pay the cost of utilities, and shall provide
liability insurance, in the amounts shown on Schedule 7.3, insuring both Buyer
and Seller. All other costs of ownership and use of the Plant shall be borne by
Seller. On the Move Date, the License shall terminate and Buyer shall leave the
Plant "broom clean", and shall leave the said equipment in the same condition as
at the Closing Date, reasonable wear and tear and damage by casualty excepted.
Buyer shall indemnify Seller from and against all loss, cost, damage and expense
caused by or arising from any act or omission to act of Buyer, its agents,
employees and invitees with respect to such licensed use of the Plant and the
equipment.
7.4 a) As of the Closing Date, Seller shall terminate each and
all of the employees employed in the Business, and shown on the list set forth
as part of Schedule 7.4 attached hereto and made a part hereof ("Employees of
the Business"), and Buyer shall thereupon, without interruption, employ the
Employees of the Business.
b) All costs of any type or amount, arising in any
way from the employment of employees by Seller prior to Closing shall be the
responsibility of Seller, and Buyer shall have no responsibility therefor.
c) Any employee of Seller who is absent from work
and who is receiving workmen's compensation, or who is on leave of absence, and
whose name is not on, or expressly excluded form the list set forth on Schedule
7.4 shall not be one of the Employees of the Business.
d) During the period from the Closing Date until the
Move Date or that date which is thirty (30) days after the Closing Date
(whichever first occurs) (hereinafter called the "Transition Period") Buyer
shall continue to employ, and to maintain the payroll with respect to, all of
the Employees of the Business.
e) Effective at the end of the Transition Period,
Buyer shall have the right to terminate Employees of the Business; provided,
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however, that Buyer shall retain in its employ thereafter for such period of
time as Buyer shall determine at least thirty (30) of the Employees of the
Business. Seller shall thereupon assume and be responsible for all costs of
severance pay, vacation pay, health insurance until 31 December 1996,
unemployment insurance and costs related thereto, worker's compensation arising
from incidents that occurred on or prior to the Closing Date, of each and every
of the Employees of the Business so terminated by Buyer ("Termination Costs"),
and Buyer will have no liability therefor.
g) If any of such Termination Costs are borne by
Buyer, Seller shall indemnify Buyer with respect thereto in accordance with the
provisions of Article XIII hereof.
7.5 Buyer shall pay commissions due with respect to products
shipped by Buyer in any Backlog Job in the amounts and to the third-party sales
representatives of Seller listed on Schedule 7.5 attached hereto.
VIII. Representations and Warranties of Seller. Seller hereby
represents and warrants to Buyer as follows:
8.1 a) Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey and is
duly qualified to conduct business as a foreign corporation in the State of
Florida.
b) Seller has corporate power and authority to sell
the Assets, and to execute, deliver and perform this Agreement. The execution,
delivery and performance of this Agreement have been duly authorized by all
necessary corporate action on the part of Seller, including that of its Board of
Directors and its Shareholders, and no further approval of the Board of
Directors of Seller (or any committee thereof) or of the Shareholders is
necessary for the consummation of the transactions contemplated hereby.
c) The execution and delivery of this Agreement by
Seller and the consummation by Seller of the transactions contemplated hereby
are not prohibited by and do not violate any provision of the organic documents
of incorporation of Seller, or violate any provision of law, or violate any
provision, or result in the breach, of, or accelerate or permit the acceleration
of the performance required by, any term of any contract, agreement, indenture,
mortgage, note, bond, commitment, license or other instrument to which Seller is
a party or by which any of the Assets is bound, and has not resulted and will
not result in the creation or imposition of any lien on any of the Assets.
d) Seller has not filed, or had filed against it, a
petition in bankruptcy or a petition to take advantage of any other insolvency
act; admitted in writing its inability to pay its debts generally; made an
assignment for the benefit of creditors; consented to the appointment of a
receiver for itself or any
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substantial part of its property; or generally committed any act of insolvency
(including the failure to pay obligations as they become due) or bankruptcy.
8.2 All necessary tax returns of Seller for all of the
jurisdictions in which returns are due have been filed, and payment has been
made of all such taxes indicated as due on such returns (insofar as such taxes
are due and payable at the date hereof).
8.3 Seller has the power to sell all of the Assets being sold
and transferred hereunder, and will do so, free and clear of all liens, charges,
security interests, and encumbrances, and all of such Assets are listed on
Schedule 1.1.
8.4 This Agreement has been duly authorized, executed, and
delivered on behalf of Seller and is a valid obligation of Seller enforceable in
accordance with its terms.
8.5 a) There exists no default in the performance of any
of the contracts listed in Schedule 8.9;
b) There are no design defects in any products in any
Backlog Job;
c) All units manufactured or partially manufactured
by Seller have been so manufactured in a good and workmanlike manner and are in
compliance with the specifications under which they were to have been
manufactured.
8.6 Except as listed on Schedule 8.6 attached hereto, as of
the date hereof there are no actions, suits or proceedings pending or threatened
which involve transactions of or otherwise relate to Seller or the Assets or the
transactions contemplated by this Agreement, at law or in equity, or before any
arbitrator of any kind, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or other
instrumentality, domestic or foreign.
8.7 There are no outstanding orders, writs, injunctions,
decrees, judgments, awards, determinations or directions, which involve
transactions of or otherwise relate to Seller or the Assets, of any courts or
arbitrators or under any outstanding order, regulation or demand of any federal,
state, municipal or other governmental instrumentality, domestic or foreign,
except those listed on Schedule 8.7.
8.8 Seller's ownership and use of the Assets, and the conduct
of the Business do not conflict with the rights of any other person, firm or
corporation or violate, or with or without the giving of notice or the passage
of time, or both, will violate, conflict with or result in a default, right to
accelerate or loss of rights under, any terms or provisions of any lien,
encumbrance,
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mortgage, deed of trust, lease, license, agreement, understanding law,
ordinance, rule or regulation, or any order, judgment or decree to which Seller
is a party or by which it may be bound or affected.
8.9 a) Schedule 8.9 hereto contains a complete and correct
list of all agreements, contracts and commitments, whether written or oral
relating to the Business (the "Material Contracts") by which Seller or any of
the Assets is bound.
b) Complete and correct copies or originals of all
written Material Contracts, together with all amendments thereto have been
delivered to Buyer. All Material Contracts are in full force and effect and
there is no default thereunder by any party thereto.
8.10 Seller has received no unliquidated advanced, milestone
or progress payments from or on behalf of its customers under or with respect to
any of the open Material Contracts, and there are no other funds due to
customers (i) on products to be shipped by Buyer in any Backlog Job or (ii) on
any products heretofore shipped by Seller.
8.11 No representation or warranty by Seller in this
Agreement, nor any statement or certificate furnished or to be furnished to
Buyer pursuant hereto or in connection with the transactions contemplated
hereby, contains or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact necessary to make the statements
contained therein not misleading.
IX. Representation and Warranties of Buyer. Buyer hereby represents and
warrants to Seller as follows:
9.1 Buyer is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware.
9.2 The execution and delivery of this Agreement and the
performance by Buyer of all of its obligations to be performed hereunder have
been duly authorized by all necessary corporate action.
9.3 This Agreement and all obligations of Buyer contained
herein are legally binding on Buyer and enforceable in accordance with their
terms.
9.4 The execution and delivery of this Agreement by Buyer and
the consummation by Buyer of the transactions contemplated hereby are not
prohibited by and do not violate any provision of the organic documents of
incorporation of Buyer, or violate any provision of law, or violate any
provision, or result in the breach, of, or accelerate or permit the acceleration
of the performance required by, any term of any contract, agreement, indenture,
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mortgage, note, bond, commitment, license or other instrument to which Buyer is
a party.
9.5 No representation or warranty by Buyer in this Agreement,
nor any statement or certificate furnished or to be furnished to Seller pursuant
hereto or in connection with the transactions contemplated hereby, contain or
will contain any untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make the statements contained therein not
misleading.
X. Access and Information. Seller will give to Buyer and its agents
full access during normal business hours, throughout the period prior to the
Closing, to such of the properties, books, contracts, commitments and other
records of Seller related to the Military Power Systems Division of Seller as
Buyer reasonably may request. If the Closing does not take place, Buyer will
return to Seller all written material received from Seller pursuant to such
access.
XI. Conduct of Business Pending Closing.
11.1 Prior to the Closing Seller shall:
a) conduct its business only in the ordinary course
and in compliance with applicable laws, and in furtherance of the foregoing
shall not engage in any transaction or make any contract or commitment except
for full value;
b) insure the items of tangible personal property
included within the Assets against damage or destruction for not less than their
fair market value;
11.2 To the extent that the assignment by Seller and the
assumption by Buyer of any Material Contract, or other contract, lease, license,
permit or approval shall require the consent or approval of any third party,
this Agreement shall not constitute an assignment, sublease, subcontract or
assumption thereof if such attempted assignment, sublease or assumption would
constitute a breach thereof.
11.3 Until any novation agreements legally required with
respect to any Material Contracts, or the required consents, approvals,
novations or waivers of third parties with respect to any other contract,
lease, license, permit or approval, have been executed, Buyer shall perform or
discharge all of such liabilities, responsibilities, obligations and commitments
thereunder, and shall enjoy all of the rights, benefits and entitlements, of
Seller under same. Pending any novation agreements required by law, Seller and
Buyer shall take all reasonable action to have Buyer recognized by the
respective Government
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agencies that are parties to each such Material Contract as the subcontractor
Seller.
XII. Bulk Sale.
12.1 Seller shall indemnify and save and hold Buyer harmless
from any liabilities arising from the failure of Buyer or Seller to comply with
any bulk sales or similar law applicable to the transactions contemplated by
this Agreement.
XIII. Indemnification
13.1 Buyer shall defend, indemnify and hold harmless Seller,
its employees, officers, directors, agents and affiliates from and against any
and all claims, demands, causes of action, suits, judgments, debts, damages,
losses, liabilities and expenses (including without limitation, court costs and
attorneys' fees) (each a "Loss" and collectively "Losses"), and shall reimburse
Seller upon demand for any and all Losses suffered or incurred by Seller or its
affiliates resulting from or arising out of any of the following:
(a) any untrue representation, breach of warranty or
nonfulfillment of any covenant or agreement by Buyer contained herein or in any
certificate, document or instrument delivered to Seller pursuant to or in
connection herewith;
(b) any liabilities of Seller expressly assumed by
Buyer pursuant to this Agreement and listed on Schedule 1.2;
(c) incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
13.2 Seller shall defend, indemnify and hold harmless Buyer,
its employees, officers, directors, agents and affiliates from and against any
and all Losses, and shall reimburse Buyer upon demand for any and all Losses
suffered or incurred by Buyer or its affiliates resulting from or arising out of
any of the following:
(a) any untrue representation, breach of warranty or
nonfulfillment of any covenant by Seller contained herein or in any certificate,
document or instrument delivered to Buyer pursuant hereto or in connection
herewith;
b) any finder's fee or brokerage or other commission
arising by reason of any services alleged to have been rendered to or at the
instance of Seller with respect to this Agreement or any of the transactions
contemplated hereby;
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(c) the closing of the Plant or the termination by
Seller of its employees;
d) any claims of restitution or retribution by any
customer, or any fines or penalties arising or resulting from any proceeding
arising out of facts that arose on or prior to the Closing Date now pending or
hereafter imposed or levied by any competent entity whether the same is listed
on a Schedule attached hereto or not;
e) any costs, whether direct or indirect, of any kind
related to employees now employed by Seller who become employed by Buyer and are
thereafter debarred or otherwise prohibited by any entity other than Buyer from
working on government contracts, or whose employment is terminated by Buyer as a
result of demands by such an entity; provided, however, that with respect to
employees now employed by Seller who become employed by Buyer and who spend time
away from work for Buyer, whether in court or otherwise, in connection with any
legal proceedings related to Seller or its officers, shareholders, directors or
affiliates, Buyer shall not be indemnified for (i) the cost of the first two (2)
hours per week so spent away from work and (ii) a total of One Thousand Dollars
($1,000) of expenses incurred by such employees in that regard;
f) any curtailment, cancellation or other termination
of any Material Contract by any entity other than Buyer arising out of facts
that arose on or prior to the Closing Date; and
g) incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
13.3 The party seeking indemnification hereunder (the
"Indemnitee") shall give to the party from which indemnification is sought
hereunder (the "Indemnitor") written notice of any claim which is subject to the
indemnity obligations set forth in Section l3.1 or 13.2, as applicable, with
sufficient promptness so as not to prejudice the other party's interests in
respect of such claim and any obligation of indemnity arising therefrom. Such
notice shall set forth all facts and other information which the party giving
the notice has as to the claim. The failure to give prompt notice shall not
affect the rights of the Indemnitee to indemnity hereunder except to the extent
that such failure either shall have materially prejudiced the Indemnitor in the
defense of such claim or shall have increased the amount of the obligation of
the Indemnitor. The Indemnitor receiving such notice shall, within thirty days
of receipt of such notice, (a) deny in writing the claim, (b) pay the amount of
the claim if a monetary amount is involved, or (c) if a claim of a third party
is involved, have the right to assume the defense of such claim. The Indemnitor
shall have the exclusive right to conduct and control, through counsel of its
own choosing, the defense of any such claim or any action arising therefrom,
provided, that in
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conducting the defense of any such claim or action, the Indemnitor shall, and
shall cause its counsel to, consult with the Indemnitee and counsel, if any,
selected by it (the costs and fees of which counsel shall be borne by
Indemnitee), and shall keep such counsel, if any, and the Indemnitee fully
advised of the progress thereof. If the Indemnitor fails or refuses to assume
the conduct and control of the defense of any such claim or action, then the
Indemnitee shall conduct and control such defense; provided, however, that in so
conducting the defense of any such claim or action, the Indemnitee shall, and
shall cause its counsel to, consult with the Indemnitor and counsel, if any,
selected by it, and shall keep such counsel, if any, and the Indemnitor fully
advised of the progress thereof. No settlement of any claim for which
indemnification is sought hereunder shall be made without either (x) the prior
written consent of both the Indemnitor and the Indemnitee, which consent shall
not be unreasonably withheld or delayed, or (y) the release of the Indemnitee
from all liability relating to such claim, in form and substance reasonable
satisfactory to the Indemnitee and its counsel.
13.4 In addition to Buyer's rights of offset against the
unpaid portion of the Purchase Price specifically set forth in other Sections of
this Agreement, Buyer has the right to set off against the unpaid portion of the
Purchase Price any judgment it may receive for indemnification hereunder in
addition to, and not in limitation of any other rights Buyer may have at law or
in equity.
13.5 The foregoing provisions of this Article XIII
notwithstanding, no claim for indemnification hereunder with respect to breaches
of any representation or warranty provided in Sections 8.1 through 8.4 and
Sections 8.6 through 8.11 and Article IX shall be valid unless such claim is
made by notice to the Indemnitor within two (2) years after the Closing Date.
Other claims for indemnification may be made at any time.
XIV Miscellaneous.
14.1 Seller and Buyer may amend this Agreement at any time,
but only by written instrument duly authorized and executed by each of them.
14.2 No waiver of any term, provision, or condition of this
Agreement, whether by conduct or otherwise, in any one of more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
term, provision, or condition or of any other term, provision, or condition of
this Agreement.
14.3 If any one or more of the provisions contained in this
Agreement is held for any reason to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any
other provision hereof and this Agreement shall be construed as if such invalid,
illegal, or unenforceable provision had never been contained herein.
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14.4 This Agreement, together with the Schedules and Exhibits
attached hereto, represents the entire agreement between the parties with
respect to the subject matter hereof.
14.5 All terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by and against the
respective successors and assigns of the parties hereto. Nothing in this
Agreement, expressed or implied, is intended to confer upon any person, other
than the parties hereto and their respective successors and assigns, any rights
or remedies under or by reason of this Agreement.
14.6 All notices to a party shall be addressed to such party
at the address set forth below or to such other place as may be designated by
written notice to the other party. Notice shall be sufficient when delivered by
hand; when sent by telecopy with the original thereof posted first-class mail,
postage prepaid, within two (2) business days thereafter; when posted certified
mail, postage prepaid, return receipt requested; or when delivered by a private
courier, requesting evidence of receipt as part of its service. Any such notice
shall be addressed to the party at its telecopy number or its address described
below, and shall be effective when first received. Unless otherwise notified in
writing, each party shall direct all sums payable to the other party at its
address for notice purposes. For purposes hereof, the addresses of the parties
shall be as follows:
Seller:
00 Xxxxxxxxx Xxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxx, III, President
Telecopier: 000-000-0000
With a copy to:
Xxxxxx X. Knee, Esquire
Rand, Algeier, Xxxxx & Xxxxxxxx
Xxxxxxxxxx Xxxxx
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telecopier: 000-000-0000
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Buyer:
ST Keltec Corporation
In care of Signal Technology Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxx, President
Telecopier: 000-000-0000
With a copy to:
Xxxxx X. Xxxxxx, Esquire
Xxxxxx & Hannah LLP
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Telecopier: 000-000-0000
14.7 This Agreement shall in all respects be construed, enforced, and
given effect according to the laws of the State of Delaware.
14.8 The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the interpretation of substantive
provisions of this Agreement.
14.9 This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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14.10 Each party represents and warrants to the other that (i) all
negotiations relative to this Agreement have been carried on by it directly with
the other, without the intervention of any person on behalf of the former, and
(ii) it will indemnify the other and hold it harmless against and in respect of
any claim for brokerage or other commissions relative to this Agreement, or to
the transactions contemplated hereby, in violation of the foregoing
representation and warranty.
IN WITNESS WHEREOF, the parties have executed this Agreement as a
sealed instrument on the date first above written.
TRANSISTOR DEVICES INC. ST KELTEC CORPORATION
/s/ Xxxxxx X. Xxxx, III /s/ Xxxxxxx X. Xxxxx
------------------------------- --------------------------------
By: Xxxxxx X. Xxxx, III By: Xxxxxxx X. Xxxxx
Title: President President
Military Power Systems & Division
The undersigned Signal Technology Corporation hereby unconditionally guaranties
the performance by ST Keltec Corporation of its obligations under and pursuant
to the foregoing Agreement.
SIGNAL TECHNOLOGY CORPORATION
/s/ Xxxx X. Xxxxxxxx
----------------------------------------
By: Xxxx X. Xxxxxxxx, Chairman of the
Board of Directors
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