EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
DATED AS OF
NOVEMBER 29, 1999
BY AND BETWEEN
CH2M HILL COMPANIES, LTD.
AND
LOCKHEED XXXXXX CORPORATION
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS.............. ...................................... 1
SECTION 2 BASIC TRANSACTION......... ..................................... 9
2.1 Purchase and Sale of Company Shares.............................. 9
2.2 Purchase Price................................................... 9
2.3 Base Purchase Price.............................................. 9
2.4 Option Exercise Payments......................................... 9
2.5 Option Period Earn-Out Payments.................................. 10
2.6 Acknowledgement.................................................. 10
2.7 Additional Consideration......................................... 10
SECTION 3 CLOSING AND CLOSING DATE........................................ 11
3.1 Closing.......................................................... 11
3.2 Closing Date..................................................... 11
3.3 Deliveries at the Closing........................................ 12
SECTION 4 REPRESENTATIONS AND WARRANTIES BY SELLER........................ 12
4.1 Organization, Qualification and Corporate Power.................. 12
4.2 Authorization of Transaction; No Conflicts....................... 12
4.3 Capitalization................................................... 13
4.4 Financial Statements; Changes; Undisclosed Liabilities........... 13
4.5 Accounts Receivable.............................................. 14
4.6 Tax Matters...................................................... 14
4.7 Government Contracts............................................. 14
4.8 Property; Title and Related Matters.............................. 15
4.9 Intellectual Property............................................ 16
4.10 Legal Matters; Compliance with Laws.............................. 16
4.11 Employee Benefits................................................ 17
4.12 Labor Relations.................................................. 19
4.13 Permits; Security Clearance...................................... 19
4.14 Affiliate Agreements; Transactions............................... 19
4.15 Insurance........................................................ 20
4.16 Bank Accounts and Powers......................................... 20
4.17 Year 2000 Compliance............................................. 20
4.18 Operation in the Ordinary Course................................. 20
4.19 Brokers' Fees.................................................... 20
4.20 Absence of Questionable Payments................................. 20
4.21 Disclaimer of Additional Warranties; Acknowledgement............. 21
SECTION 5 REPRESENTATIONS AND WARRANTIES OF PURCHASER..................... 21
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TABLE OF CONTENTS
(continued)
Page
5.1 Organization and Related Matters................................. 21
5.2 Authorization; No Conflicts...................................... 21
5.3 Litigation....................................................... 21
5.4 Financing........................................................ 22
5.5 Investment Representation........................................ 22
5.6 Insurance Matters................................................ 22
5.7 Foreign Ownership................................................ 22
5.8 Investigation; Acknowledgment.................................... 22
5.9 Brokers' Fees.................................................... 22
SECTION 6. PRE-CLOSING COVENANTS.......................................... 22
6.1 Access........................................................... 23
6.2 Financial Information............................................ 23
6.3 Conduct of Business.............................................. 23
6.4 Reasonable Best Efforts; No Inconsistent Action.................. 24
6.5 Elimination of Intercompany and Affiliate Liabilities............ 25
6.6 Control of the Business of the Company........................... 26
6.7 Accuracy of Information.......................................... 26
6.8 Exclusivity...................................................... 26
6.9 Classified and Special Access Programs........................... 26
6.10 Certain Actions.................................................. 26
SECTION 7 POST-CLOSING COVENANTS.......................................... 26
7.1 General.......................................................... 26
7.2 Post-Closing Consents............................................ 26
7.3 Litigation Support............................................... 27
7.4 Agreements Regarding Tax Matters................................. 28
7.5 Confidential Information......................................... 32
7.6 Employees Matters; Benefits...................................... 32
7.7 Post-Closing Receipts............................................ 37
7.8 Non-Competition.................................................. 37
7.9 Use ofLockheed Xxxxxx Name....................................... 37
SECTION 8 CLOSING CONDITIONS.............................................. 38
8.1 General Obligations.............................................. 38
8.2 Conditions to Obligation of Purchaser............................ 38
8.3 Conditions to Obligation of Seller............................... 39
SECTION 9 TERMINATION OF OBLIGATIONS...................................... 40
9.1 Termination of Agreement......................................... 40
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TABLE OF CONTENTS
(continued)
Page
9.2 Effect of Termination......... .................................. 40
SECTION 10 INDEMNIFICATION; SURVIVAL...................................... 40
10.1 Obligations of Seller........................................... 41
10.2 Obligations of Purchaser........................................ 41
10.3 Procedure....................................................... 42
10.4 Survival........................................................ 43
10.5 Limitations on Indemnification.................................. 43
10.6 Treatment of Payments........................................... 43
10.7 Remedies Exclusive.............................................. 44
10.8 Mitigation...................................................... 44
SECTION 11 MISCELLANEOUS.................................................. 44
11.1 Press Releases and Announcements................................ 44
11.2 Expenses........................................................ 44
11.3 Further Assurances.............................................. 44
11.4 Remedies........................................................ 45
11.5 Consent to Amendments........................................... 45
11.6 Successors and Assigns.......................................... 45
11.7 Severability.................................................... 45
11.8 Counterparts.................................................... 45
11.9 Descriptive Headings............................................ 45
11.10 Notices......................................................... 46
11.11 No Third-Party Beneficiaries.................................... 47
11.12 Entire Agreement................................................ 47
11.13 Construction.................................................... 47
11.14 Representation by Counsel; Interpretation....................... 47
11.15 Incorporation of Exhibits and Schedules......................... 47
11.16 Governing Law................................................... 48
11.17 Resolution of Disputes.......................................... 48
11.18 No Consequential Damages........................................ 48
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Exhibits
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Exhibit 8.2(e) Form of Opinion of Seller
Exhibit 8.3(d) Form of Opinion of Purchaser
Schedules
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Schedule 1.1(a) Knowledge of Seller
Schedule 1.1(b) Knowledge of Purchaser
Schedule 4.2 Conflicts
Schedule 4.3 Capitalization
Schedule 4.4(a) Financial Statements
Schedule 4.4(b) Changes Effecting the Company
Schedule 4.6 Tax Matters
Schedule 4.7 Government Contracts
Schedule 4.8 Property; Title and Related Matters
Schedule 4.9 Intellectual Property
Schedule 4.10 Legal Matters; Compliance with Laws
Schedule 4.11 Employee Benefits
Schedule 4.12 Labor Relations
Schedule 4.13 Permits
Schedule 4.14 Affiliate Agreements; Transactions
Schedule 4.15 Insurance
Schedule 4.16 Bank Accounts and Powers
Schedule 4.18 Operation in the Ordinary Course
Schedule 6.3 Conduct of Business
Schedule 6.5 Elimination of Intercompany and Affiliate Liabilities
Schedule 7.6 Employee Matters
Schedule 8.1 Approvals.
-vi-
STOCK PURCHASE AGREEMENT
------------------------
STOCK PURCHASE AGREEMENT dated as of November 29, 1999 by and between
CH2M HILL Companies Ltd., an Oregon corporation (the "Purchaser"), and Lockheed
Xxxxxx Corporation, a Maryland corporation (the "Seller").
WITNESSETH:
WHEREAS, Lockheed Xxxxxx Xxxxxxx Corporation, a Delaware corporation
(the "Company") previously was party to Subcontract No. 80232764-9-K001, issued
by Fluor Xxxxxx Xxxxxxx, Inc., the primary management contractor to the United
States Department of Energy (the "Department") at the Department's Hanford Site
located in Richland, Washington (the "Hanford Site"), effective as of October 1,
1996 (the "DOE Subcontract");
WHEREAS, pursuant to Xxxxxxxx Xx. XX-XX00-00XX00000, issued by the
Department's Richland Operations Office to the Company, effective as of
September 30, 1999 (the "DOE Contract"), the Company has become a prime
contractor to the Department;
WHEREAS, pursuant to the DOE Contract the Company is responsible for
planning, managing, and executing the Tank Waste Remediation System at the
Hanford Site under the direction of the Department's Office of River Protection;
WHEREAS, Seller is the record holder and beneficial owner of all of
the issued and outstanding capital stock of the Company; and
WHEREAS, Seller desires to sell, and Purchaser desires to purchase,
all of the issued and outstanding capital stock of the Company on the terms and
subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and for other good and valuable consideration, the value, receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
Section 1. Definitions. For purposes of this Agreement, the following terms
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have the meanings set forth below:
"Action" means any action, complaint, petition, investigation,
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arbitration, suit, or other proceeding, whether civil or criminal, in law or in
equity, or before any arbitrator or Governmental Entity.
"Adjustment" has the meaning set forth in Section 7.4(d).
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"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
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promulgated under the Securities Exchange Act of 1934, as amended.
"Agreement" means this Stock Purchase Agreement, as the same may be
---------
amended from time to time in accordance with the terms hereof.
"Allocation Arbiter" has the meaning set forth in Section 7.4(k).
------------------
"Anti-Assignment Laws" means 41 X.X.X. (X)00, 00 X.X.X. (X)0000 and
--------------------
FAR Subpart 42.12 and any similar statutes, laws, rules and regulations.
"Approval" means any approval, authorization, consent, qualification
--------
or registration, or extension, modification, amendment or waiver of any of the
foregoing, required to be obtained from or any notice, statement or other
communication required to be filed with or delivered to, any Governmental
Entity.
"Base Purchase Price" has the meaning set forth in Section 2.3.
-------------------
"Business" means the business conducted by the Company.
--------
"Closing" has the meaning set forth in Section 3.1.
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"Closing Date" has the meaning set forth in Section 3.2.
------------
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Company" means Lockheed Xxxxxx Xxxxxxx Corporation, a Delaware
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corporation.
"Company Shares" means all of the issued and outstanding capital stock
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of the Company.
"Confidential Information" means any information, in whatever form or
------------------------
medium, concerning the Company or the operations or affairs of the Business,
excluding any such information which (a) as of the date of this Agreement is
generally known by the public, (b) becomes generally known by the public
following the date of this Agreement (other than as a result of the breach by
Seller or any of its Affiliates of the provisions of Section 7.5), (c) becomes
available to Seller and its Affiliates after the Closing Date on a
nonconfidential basis from a Person who is not bound by a confidentiality
agreement with the Company and who is not otherwise legally prohibited from
transmitting such information to Seller and its Affiliates or (d) Seller and its
Affiliates can demonstrate by clear and convincing evidence was developed or
discovered by Seller and its Affiliates independently of any information
concerning the Business.
"Confidentiality Agreement" means the Confidentiality Agreement dated
-------------------------
as of November 29, 1999 between Seller and Purchaser.
"Contracting Officer" has the meaning set forth in the DOE Contract.
-------------------
"Department" means the United States Department of Energy.
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2
"DOE Contract" has the meaning set forth in the Recitals hereto. For
------------
purposes of Sections 2.4, 2.4, and 2.6, the term DOE Contract shall include the
present DOE Contract or any other agreement pursuant to which the Company, the
Purchaser, or any Affiliate, assignee or transferee of the Purchaser is
responsible for planning, managing, and executing the Tank Waste Remediation
System at the Hanford Site prior to GFY 2007.
"DOE Subcontract" has the meaning set forth in the Recitals hereto.
---------------
"DOE Subcontract Fee" means the fee awarded to the Company with
-------------------
relation to the fiscal year ended September 30, 1999, as determined in
accordance with Part II, Section 9 of the DOE Subcontract, other than that
portion of the fee paid to the Company as a provisional fee prior to the date
hereof. Such DOE Subcontract Fee shall be comprised of any fees paid to the
Company from and after the date of this Agreement as a result of either (i)
satisfactory completion of responsibilities under PAs (as such term is defined
in the DOE Subcontract) or (ii) a determination that the Company is entitled to
receive a portion of the Subjective Pool (as such term is defined in the DOE
Subcontract).
"DOE Subcontract Fee Adjustment" has the meaning set forth in Section
------------------------------
2.7.
"Election" has the meaning set forth in Section 7.4(j)(i).
--------
"Employee" has the meaning set forth in Section 4.11(a).
--------
"Encumbrance" means any claim, charge, easement, encumbrance, lease,
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security interest, lien, pledge, restriction (whether on voting, sale, transfer,
disposition or otherwise), except for any restrictions on transfer generally
arising under any applicable federal or state securities law.
"Environmental Law" means any Law with respect to the preservation of
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the environment or the promotion of worker health and safety, including any Law
relating to Hazardous Materials, drinking water, surface water, groundwater,
wetlands, landfills, open dumps, storage tanks, underground storage tanks, solid
waste, waste water, storm water run-off, noises, odors, air emissions, waste
emissions or xxxxx. Without limiting the generality of the foregoing, the term
will encompass each of the following statutes and the regulations promulgated
thereunder, and any similar applicable state, local or foreign Law, each as it
may be amended from time to time: (a) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980; (b) the Resource Conservation and
Recovery Act; (c) the Hazardous Materials Transportation Act; (d) the Toxic
Substances Control Act; (e) the Clean Water Act; (f) the Clean Air Act; (g) the
Safe Drinking Water Act; (h) the National Environmental Policy Act of 1969; (i)
the Emergency Planning and Community-Right-to-Know Act; (j) the Oil Pollution
Act; (k) the Federal Insecticide, Fungicide and Rodenticide Act; and (l) the
provisions of the Occupational Safety and Health Act of 1970, the Nuclear Waste
Policy Act, and the Atomic Energy Act relating to the handling of or exposure to
Hazardous Materials or similar substances.
"Environmental Permit" means any license, permit, franchise,
--------------------
certificate of authority or Order, or any extension, modification, amendment or
waiver of the foregoing, required to be obtained from any Governmental Entity
pursuant to any applicable Environmental Laws in connection with the conduct of
the Business.
3
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
"ERISA Plans" has the meaning set forth in Section 4.11(a).
-----------
"Fee Sharing Commitments" has the meaning set forth in Section 2.7.
-----------------------
"Financial Statements" has the meaning set forth in Section 4.5(a).
--------------------
"Government Contract" means the DOE Contract, the DOE Subcontract and
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any prime contract, subcontract, basic ordering agreement, letter contract,
purchase order, delivery order, task order, teaming agreement, or other legally
binding commitment thereunder or relating thereto, in connection with or
relating to any United States government procurement, in each case between (a)
Company and (b) any Governmental Entity or any other prime contractor or
subcontractor at any tier.
"Government Fiscal Year" or "GFY" means each period beginning on
---------------------- ---
October 1, of the preceding calendar year and ending on September 30, of the
calendar year identified following the term "GFY."
"Governmental Entity" means any government or any agency, bureau,
-------------------
board, commission, court, department, official, political subdivision, tribunal
or other instrumentality of any government, whether federal, state or local,
domestic or foreign.
"Hanford Site" has the meaning set forth in the Recitals hereto.
------------
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
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1976, as amended, and the related regulations and published interpretations
thereof.
"Hazardous Materials" means each and every element, compound, chemical
-------------------
mixture, contaminant, pollutant, material, waste, radionuclide or other
substance that is defined, determined or identified as hazardous or toxic under
any Environmental Law or the Release of which is prohibited or restricted under
any Environmental Law. Without limiting the generality of the foregoing, the
term will at least include: (a) "hazardous substances" as defined in the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
and regulations promulgated thereunder, each as amended; (b) "hazardous waste"
as defined in the Resource Conservation and Recovery Act and regulations
promulgated thereunder, each as amended; (c) "hazardous materials" as defined in
the Hazardous Materials Transportation Act and the regulations promulgated
thereunder, each as amended; (d) "chemical substance or mixture" as defined in
the Toxic Substances Control Act and regulation promulgated thereunder, each as
amended; (e) petroleum and petroleum products; and (f) asbestos; (g) radioactive
material of any kind, including source material, special nuclear material,
byproduct material, naturally occurring or accelerator-produced radioactive
material; and naturally occurring radioactive material; and (h) radioactive
wastes of any kind, including high-level waste, low-level waste, Class A, B, C
and Greater-Than-Class-C Wastes, transuranic waste, AEA wastes, NARM/NORM
wastes, and mixed wastes.
4
"Income Tax Return" means a Tax Return required to be supplied to a
-----------------
Governmental Entity with respect to Income Taxes including, where permitted or
required, combined or consolidated returns for any group of Persons that
includes the Company.
"Income Taxes" means all Taxes based on or measured by net income
------------
(including any interest and penalties and addition to tax (civil or criminal)
related thereto or to the nonpayment thereof), not including withholding or
tollgate taxes.
"Indemnifiable Claim" means any claim of an Indemnifiable Loss for or
-------------------
against which any party is entitled to indemnification under this Agreement.
"Indemnifiable Loss" means any cost, damage, disbursement, expense,
------------------
liability, loss, deficiency, penalty or settlement of any kind or nature,
including reasonable legal, accounting and other professional fees and expenses
and amounts paid in settlement, that are actually imposed on or otherwise
actually incurred or suffered by the specified Person.
"Indemnified Party" means (i) as to Seller, any Purchaser Indemnitee
-----------------
or (ii) as to Purchaser, any Seller Indemnitee.
"Indemnifying Party" means (i) as to any Purchaser Indemnitee, Seller
------------------
or (ii) as to any Seller Indemnitee, Purchaser.
"Initial Transfer Amount" has the meaning set forth in Section
-----------------------
7.6(b)(iii).
"Intellectual Property" means any patent, patent disclosure,
---------------------
trademark, service xxxx, trade dress, logo, trade name, copyright or mask work,
and any registration, application or associated good will for any of the
foregoing, and any computer software (including source and object codes),
computer program, computer data base or related documentation or materials,
data, documentation, manual, trade secret, confidential business information
(including ideas, formulas, compositions, inventions, know-how, manufacturing
and production processes and techniques, research and development information,
drawings, designs, plans, proposals and technical data, financial, marketing and
business data, and pricing and cost information) or other intellectual property
right (in whatever form or medium).
"Interim Balance Sheet" has the meaning set forth in Section
---------------------
4.4(a)(ii).
"Interim Financial Statements" has the meaning set forth in Section
----------------------------
4.4(a)(ii).
"IRS" means the Internal Revenue Service of the Department of the
---
Treasury.
"Knowledge" (a) as used with respect to Seller means the actual
---------
knowledge of any of the directors, officers or senior management personnel of
the Company and Seller identified on Schedule 1.1(a) and such knowledge as would
be imputed to such persons after reasonable investigation, and (b) as used with
respect to Purchaser, means the actual knowledge of any of the directors,
officers or senior management of Purchaser and Purchaser's Affiliates identified
on Schedule 1.1(b) and such knowledge as would be imputed to such persons after
reasonable investigation.
5
"LMSI" means Lockheed Xxxxxx Services, Inc., a Delaware corporation.
----
"LTD Recipient" has the meaning set forth in Section 7.6(a)(vi).
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"Law" means any constitutional provision, statute, law, rule,
---
regulation, executive order, Permit, decree, injunction, judgment, Order,
ruling, determination, finding or writ of any Governmental Entity.
"Material Adverse Circumstance" means any fact, circumstance or
-----------------------------
condition that would reasonably be expected to have a material adverse effect on
the Business, or on the operations, assets or financial condition of the
Company, but excluding (i) any event or change that generally affects companies
involved in the environmental remediation business or is generally applicable to
the United States economy or securities markets, (ii) any fact, circumstance or
condition that is specifically identified as a potential Material Adverse
Circumstance in a Schedule hereto or (iii) any fact, circumstance or condition
that results from the execution of this Agreement, the announcement of this
Agreement or the transactions contemplated hereby or the identity of Purchaser.
"Non-Site Plans" has the meaning set forth in Section 4.11(a).
--------------
"Option Exercise Payment" has the meaning set forth in Section 2.4.
-----------------------
"Option Period Earn-Out Payment" has the meaning set forth in Section
------------------------------
2.4.
"Option Year" has the meaning set forth in Section 2.4.
-----------
"Order" means any decree, injunction, judgment, order, ruling,
-----
assessment or writ.
"Other Participant" has the meaning set forth in Section
-----------------
7.6(b)(ii)(2).
"Permit" means any license, permit, franchise, certificate of
------
authority or Order, or any waiver of the foregoing, issued by any Governmental
Entity, including any Environmental Permit.
"Permitted Encumbrances" means such Encumbrances that (i) do not
----------------------
individually or in the aggregate with other Encumbrances materially detract from
the value of the property or materially detract from or interfere with the use
of the property in the ordinary course of the Business, (ii) are reflected or
disclosed in the Financial Statements or (iii) constitute statutory liens
arising in the ordinary course of business.
"Person" means an individual, a corporation, a partnership, a limited
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liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or a Governmental Entity.
"Plans" has the meaning set forth in Section 4.11(a).
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6
"Post-Closing Period" means, with respect to the Company, any Tax
-------------------
Period commencing after the Closing Date and the portion of any Straddle Period
commencing after the Closing Date.
"Pre-Closing Period" means, with respect to the Company, any Tax
------------------
Period ending on or before the Closing Date and the portion of any Straddle
Period ending on the Closing Date.
"Prior Month Provisional Fee Adjustment" has the meaning set forth in
--------------------------------------
Section 2.3.
"Purchase Price" has the meaning set forth in Section 2.2.
--------------
"Purchaser" means CH2M HILL Companies, Ltd., an Oregon corporation.
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"Purchaser Indemnitees" has the meaning set forth in Section 10.1.
---------------------
"Purchaser SERP" has the meaning set forth in Section 7.6(b)(i).
--------------
"Purchaser SERP Trust" has the meaning set forth in Section 7.6(b)(i).
--------------------
"Purchaser's Representatives" has the meaning set forth in Section
---------------------------
6.3.
"Release" means any spilling, leaking, pumping, pouring, emitting,
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emptying, discharging, injecting, storing, escaping, leaching, dumping,
discarding, burying, abandoning or disposing into the environment.
"Response Actions" means any sampling, investigation, testing,
----------------
monitoring, assessment, treatment, mitigation, restoration, clean-up, closure,
post-closure, corrective action, response action, removal action, remedial
action, operation and maintenance to address the actual or suspected presence,
migration or Release of Hazardous Materials.
"Securities Act" means the Securities Act of 1933, as amended.
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"Seller" means Lockheed Xxxxxx Corporation, a Maryland corporation.
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"Seller SERP" has the meaning set forth in Section 7.6(b)(ii)(1).
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"Seller SERP Trust" has the meaning set forth in Section 7.6(b)(iii).
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"Seller Indemnitees" has the meaning set forth in Section 10.2.
------------------
"Seller's Representatives" has the meaning set forth in Section 6.3.
------------------------
"SERP Benefit Payments" has the meaning set forth in Section
---------------------
7.6(b)(iv).
"Site Plans" has the meaning set forth in Section 4.11(a).
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"Straddle Period" means, with respect to the Company, any Tax Period
---------------
that begins before and ends after the Closing Date.
7
"Subsidiary" means, with respect to any Person, any Person in which
----------
such Person has a direct or indirect equity or ownership interest in excess of
50%.
"Tax" means any federal, state, local or foreign net income, gross
---
income, gross receipts, sales, use, ad valorem, transfer, franchise, profits,
license, lease, service, service use, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, windfall profits, customs,
duties or other tax, fee, assessment or charge, including any interest, penalty
or addition thereto and including any liability for the Taxes of any Person
under Treasury Regulation Section 1.1502-6 (or any similar provision of state,
local or foreign Law), and any liability in respect of any Tax as a transferee
or successor, by Law, contract or otherwise.
"Tax Period" means, with respect to any Tax, the period for which the
----------
Tax is reported as provided under applicable Tax Laws.
"Tax Return" means any return, declaration, report, claim for refund
----------
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and any amendment thereto or modification thereof.
"Total Sales" means the total fee awarded under the DOE Contract with
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respect to any relevant GFY.
"Transfer Date" has the meaning set forth in Section 7.6(b)(iv).
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"Transfer Liability" has the meaning set forth in Section 7.6(b)(iii).
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"Transferred Employees" has the meaning set forth in Section
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7.6(a)(i).
"Year-End Financial Statements" has the meaning set forth in Section
-----------------------------
4.4(a).
"Year 2000 Compliant" has the meaning set forth in Section 4.17.
-------------------
"Year 2000 Plan" has the meaning set forth in Section 4.17.
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8
Section 2. Basic Transaction.
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2.1 Purchase and Sale of Company Shares. Subject to the terms and
-----------------------------------
conditions of this Agreement, Seller agrees to sell the Company Shares, and to
deliver the certificates evidencing such Company Shares, to Purchaser, and
Purchaser agrees to purchase such Company Shares from Seller, for the
consideration hereinafter set forth. The certificates will be properly endorsed
for transfer to or accompanied by a duly executed stock power in favor of
Purchaser or its nominee as Purchaser may have directed at least two business
days prior to the Closing Date and otherwise in a form acceptable for transfer
on the books of the Company.
2.2 Purchase Price. The aggregate purchase price for the Company Shares
--------------
shall be an amount (the "Purchase Price") equal to:
(a) the Base Purchase Price (as defined in Section 2.3); plus
----
(b) any Option Exercise Payment(s) (as defined in Section 2.4); plus
----
(c) any Option Period Earn-Out Payment(s) (as defined in Section 2.5).
2.3 Base Purchase Price. On the terms and subject to the conditions set
-------------------
forth in this Agreement, at the Closing, Purchaser will deliver to Seller
$20,000,000 (the "Base Purchase Price"), adjusted as discussed below, by bank
wire transfer of immediately available funds to an account designated in writing
by Seller at least two business days prior to the Closing Date. The parties
acknowledge that Purchaser shall be entitled to the benefit of any provisional
fee authorized by the Contracting Officer under the DOE Contract with respect to
any period from and after October 1, 1999. The Base Purchase Price shall be
reduced by the amount of any provisional fee authorized by the Contracting
Officer under the DOE Contract and Seller shall cause the Company to pay all of
such amounts received prior to the Closing Date to Seller, whether by dividend,
loan or otherwise.
2.4 Option Exercise Payments. [REDACTED PURSUANT TO A REQUEST FOR
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CONFIDENTIAL TREATMENT UNDER RULE 24b-2 of THE GENERAL RULES AND REGULATIONS
UNDER THE SECURITIES EXCHANGE ACT. OMITTED INFORMATION HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION TOGETHER WITH SUCH REQUEST FOR CONFIDENTIAL
TREATMENT.]
2.5 Option Period Earn-Out Payments. [REDACTED PURSUANT TO A REQUEST
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FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 of THE GENERAL RULES AND REGULATIONS
UNDER THE SECURITIES EXCHANGE ACT. OMITTED INFORMATION HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION TOGETHER WITH SUCH REQUEST FOR CONFIDENTIAL
TREATMENT.]
2.6 Acknowledgement. [REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
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TREATMENT UNDER RULE 24b-2 of THE GENERAL RULES AND REGULATIONS UNDER THE
SECURITIES EXCHANGE ACT. OMITTED INFORMATION HAS BEEN FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION TOGETHER WITH SUCH REQUEST FOR CONFIDENTIAL TREATMENT.]
2.7 Additional Consideration. In addition to the Purchase Price, the
------------------------
parties acknowledge that Seller is entitled to receive an amount equal to (x)
the DOE Subcontract Fee less (y) the sum of remaining amounts, if any, to be
----
setoff pursuant to Part II, Section 11 and Part II, Section 12 of the DOE
Subcontract with relation to GFY 1999 (the "Fee Sharing Commitments") but that
the DOE Subcontract Fee has not been determined as of the date of this
Agreement. In the event that the DOE Subcontract Fee is determined prior to the
Closing Date,
9
Seller shall cause the Company to pay an amount equal to (x) such DOE
Subcontract Fee less (y) the sum of remaining amounts, if any, to be setoff
----
pursuant to the Fee Sharing Commitments to Seller, whether by dividend, loan or
otherwise. In the event that the DOE Subcontract Fee has not been determined
and paid to Seller prior to the Closing Date, the following provisions shall be
applicable:
(a) Purchaser shall cause the Company to, and the Company shall, (A)
conduct negotiations related to the determination of the DOE Subcontract Fee in
a diligent manner consistent with the past practices of the Company, (B)
reasonably inform Seller as to the status of the negotiations and (C) allow
Seller to advise the Company with regard to the negotiations. Purchaser and the
Company shall not be responsible for the outcome of the DOE Subcontract Fee
negotiation provided that they satisfy the obligations contained in the
preceding sentence.
(b) Within two (2) business days of the determination of the DOE
Subcontract Fee in accordance with Part III, Section 46 of the DOE Subcontract,
Purchaser shall notify Seller as to the results of such determination.
(c) Within five (5) business days, Seller may notify Purchaser that
Seller either (A) desires to dispute the amount of such DOE Subcontract Fee or
(B) accepts the determination of the DOE Subcontract Fee. In the event that
Seller notifies Purchaser that Seller does not accept the determination of the
DOE Subcontract Fee, the Company and Purchaser shall allow Seller, at Seller's
expense, to challenge such determination in the name of the Company and
Purchaser by any reasonable means. Purchaser and its Affiliates shall cooperate
with Seller, at Seller's expense, with relation to any such challenge and shall
provide Seller with reasonable access to, and assistance of, the Company's
management personnel as well as access to pertinent records, materials and
information in the possession of Purchaser or its Affiliates. Seller shall pay
for such assistance on a time and materials basis at the Company's prevailing
rates. As soon as practicable after (i) Seller accepts the determination of the
DOE Subcontract Fee or (ii) Seller's challenge to the determination of the DOE
Subcontract Fee is resolved, Purchaser shall cause the Company to use its
commercially reasonable efforts to receive the DOE Subcontract Fee and shall,
within two (2) business days of receipt of the DOE Subcontract Fee, pay to
Seller the amount of the DOE Subcontract Fee less the Fee Sharing Commitments by
bank wire transfer of immediately available funds to an account designated in
writing by Seller.
Section 3. Closing and Closing Date.
------------------------
3.1 Closing. Unless this Agreement has been terminated pursuant to
-------
Section 9.1, the consummation of the transactions contemplated by this Agreement
(the "Closing") will take place at the offices of O'Melveny & Xxxxx, 000 00xx
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000-0000, on the latter to occur of December
22, 1999, or the second business day after the satisfaction or waiver of all of
the closing conditions set forth in Sections 8.1, 8.2 and 8.3, or at such other
place or on such other date as Purchaser and Seller may agree.
3.2 Closing Date. The date on which the Closing actually takes
------------
place is referred to in this Agreement as the "Closing Date." The Closing will
be deemed for all
10
purposes under this Agreement to have occurred as of 12:01 A.M., Washington,
D.C. time, on the Closing Date.
3.3 Deliveries at the Closing. At the Closing, (a) Seller will
-------------------------
deliver to Purchaser the certificate referred to in Section 8.2(c) and the legal
opinion referred to in Section 8.2(e), (b) Purchaser will deliver to Seller the
certificate referred to in Section 8.3(c) and the legal opinion referred to in
Section 8.3(d), (c) Seller will deliver to Purchaser stock certificates
representing all of the Company Shares, which certificates will be properly
endorsed for transfer to or accompanied by a duly executed stock power in favor
of Purchaser or its nominee as Purchaser may have directed at least two business
days prior to the Closing Date and otherwise in a form acceptable for transfer
on the books of the Company, and (d) Purchaser will deliver to Seller the
Purchase Price.
Section 4. Representations and Warranties by Seller. Seller represents and
----------------------------------------
warrants to Purchaser that the statements contained in this Section 4 are
correct and complete as of the date of this Agreement. For purposes of this
Section 4, other than Section 4.11, any documents or information indicated as
having been made available to Purchaser will be deemed to have been so made
available if they have been delivered or made available to Purchaser or any of
its representatives or agents on or prior to November 22, 1999. For purposes of
Section 4.11, any documents or information indicated as having been made
available to Purchaser will be deemed to have been so made available if they
have been delivered or made available to Purchaser or any of its representatives
or agents on or prior to the date hereof.
4.1 Organization, Qualification and Corporate Power. Seller is a
-----------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Maryland. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite power and authority to own, lease and operate its properties and
to carry on its business as presently being conducted. The Company is duly
qualified to conduct business as a foreign corporation and is in good standing
under the laws of each jurisdiction where such qualification is required, except
where the failure to be so qualified is not a Material Adverse Circumstance.
4.2 Authorization of Transaction; No Conflicts. The execution,
------------------------------------------
delivery and performance of this Agreement by Seller has been duly and validly
authorized by all necessary corporate action on the part of Seller. This
Agreement constitutes a legally valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms except as may be limited
by bankruptcy, insolvency, reorganization, moratorium and other similar laws and
equitable principles relating to or limiting creditors' rights generally. Except
as set forth on Schedule 4.2, the execution, delivery and performance of this
Agreement by Seller will not (i) violate, or constitute a breach or default
(whether upon lapse of time and/or the occurrence of any act or event or
otherwise) under, the charter documents or by-laws of Seller, (ii) result in the
imposition of any Encumbrance against any material assets or properties of the
Company or (iii) violate any Law, except for any such violations, breaches,
defaults and impositions as would not in the aggregate reasonably be expected to
constitute a Material Adverse Circumstance. Except for (i) matters identified in
Schedule 4.2, (ii) any filings or Approvals required under the HSR Act, (iii)
any novations or consents required in connection with the DOE Contract, (iv) the
Anti-Assignment Laws and (v) Federal Acquisitions Regulations, the execution,
delivery and
11
performance of this Agreement by Seller will not require any Approvals to be
obtained except for any such Approvals the failure of which to receive would not
in the aggregate constitute a Material Adverse Circumstance or have a material
adverse effect on the ability of Seller to consummate the transactions
contemplated by this Agreement.
4.3 Capitalization. Schedule 4.3 sets forth for the Company (a) the
--------------
number of shares of authorized capital stock of its capital stock, (b) the
number of issued and outstanding shares of each class of its capital stock, (c)
the number of shares of its capital stock held in treasury and (d) the names of
its directors and elected officers. Seller has made available to Purchaser
correct and complete copies of the Certificate of Incorporation and bylaws of
the Company, each as amended to date. All of the issued and outstanding shares
of capital stock of the Company have been duly authorized and are validly
issued, fully paid and nonassessable. Seller holds of record and owns
beneficially all of the outstanding shares of the Company, free and clear of any
restrictions on transfer (other than restrictions under the Securities Act and
applicable state securities laws), Taxes, Encumbrances, options, warrants,
purchase rights, contracts, commitments, equities, claims or demands. There are
no outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights or other contracts or commitments
that could require Seller or the Company to sell, transfer or otherwise dispose
of any capital stock of the Company or that could require the Company to issue,
sell or otherwise cause to become outstanding any capital stock of the Company.
There are no outstanding stock appreciation, phantom stock, profit participation
or similar rights with respect to the Company. There are no voting trusts,
proxies or other agreements or understandings with respect to the voting of any
capital stock of the Company. The Board of Directors of the Company has not
declared any dividend or distribution with respect to the Company's outstanding
capital stock the record or payment date for which is on or after the date of
this Agreement. The minute books, stock certificate books and stock record books
of the Company are correct and complete in all material respects. The Company is
not in default under or in violation of any provision of its Certificate of
Incorporation or bylaws. The Company has no Subsidiaries and, except as set
forth on Schedule 4.3, the Company does not control directly or indirectly or
have any direct or indirect equity or other participation in any Person or any
right (contingent or otherwise) to acquire the same.
4.4 Financial Statements; Changes; Undisclosed Liabilities.
------------------------------------------------------
(a) Set forth as Schedule 4.4(a) are correct and complete copies
of:
(i) the unaudited balance sheet of the Company as of December
31, 1998 and the related statement of profit and loss (the "Year-End
Financial Statements"); and
(ii) the unaudited balance sheet of the Business as of
September 30, 1999 (the "Interim Balance Sheet") and the related statement
of profit and loss for the nine-month period then ended (the "Interim
Financial Statements").
The Year-End Financial Statements and the Interim Financial Statements are
referred to in this Agreement collectively as the "Financial Statements." The
Year-End Financial Statements were prepared in accordance with Seller's
historical practices and procedures, consistently applied.
12
The Interim Financial Statements were prepared in accordance with Seller's
historical practices and procedures, consistently applied (subject to the
exclusion of normal year-end adjustments that will not in the aggregate
constitute a Material Adverse Circumstance). The Financial Statements are
consistent in all material respects with the books and records of the Company,
which books and records are correct and complete in all material respects.
(b) Certain Changes. Except as set forth on Schedule 4.4(b), since
---------------
September 30, 1999 to the date hereof, there has not been, occurred or arisen
any change in or event affecting the Company that constitutes a Material Adverse
Circumstance.
(c) No Other Material Liabilities. As of the date hereof, the
-----------------------------
Company has not incurred any liabilities in excess of $50,000 that would, in
accordance with Seller's historical practices and procedures, be disclosed on
the Financial Statements except liabilities (i) that are reflected or disclosed
in the Financial Statements, (ii) that are disclosed in this Agreement or the
Schedules hereto, (iii) that were incurred after September 30, 1999 in
connection with performance under the DOE Contract or (iv) for Taxes.
4.5 Accounts Receivable. The accounts receivable associated with
-------------------
the Business reflected on the Interim Balance Sheet or in the accounting records
of the Company are bona fide receivables, accounted for in accordance with
Seller's historical practices and procedures applied on a basis consistent with
that used in the preparation of the Financial Statements, representing amounts
due with respect to sales actually made or services actually performed in the
ordinary course of the operation of the Business.
4.6 Tax Matters.
-----------
Except as disclosed on Schedule 4.6:
(a) all material Tax Returns required to be filed with respect to
the Company (including the consolidated Federal income tax return of Seller and
any other Tax return that includes the Company on a consolidated or combined
basis) have been timely filed;
(b) all Taxes required to be shown on such returns and reports or
otherwise due have been timely paid;
(c) no adjustment relating to such returns has been proposed
formally or informally by any Tax authority (insofar as either relates to
activities or income of the Company) and, to the Knowledge of Seller, no basis
exists for any such adjustment;
(d) there are no pending or, to the Knowledge of Seller, threatened
actions or proceedings for the assessment or collection of Taxes against the
Company; and
(e) from and after its incorporation, the Company has been and
continues to be a member of the affiliated group (within the meaning of Section
1504(a)(1) of the Code) for which Seller files a consolidated return as the
common parent, and has not been includible in any other consolidated return for
any taxable period for which the statute of limitations has not expired.
13
4.7 Government Contracts.
--------------------
(a) Except as reflected in Schedule 4.7 or with respect to matters
that have been resolved, with respect to the DOE Contract or the DOE
Subcontract, since October 1, 1996:
(i) neither the U.S. Government nor any prime contractor or
subcontractor to the Company has notified the Company in writing that the
Company has breached or violated any applicable Law in any material respect;
(ii) no termination for default, cure notice or show cause
notice has been issued;
(iii) the U.S. Government has not issued any written notices of
any material claims against the Company in respect of services under the DOE
Subcontract or the DOE Contract; and
(iv) the Company is in compliance in all material respects
with all terms of the DOE Contract and the DOE Subcontract.
(b) Except as listed on Schedule 4.7, as of the date hereof, no
Governmental Entity has provided the Company with written notice (other than
routine audits by the Inspector General of the Department or the DCAA)
challenging, questioning or disallowing any cost in excess of $100,000 incurred
by the Company pertaining to the DOE Contract or the DOE Subcontract.
(c) To the Knowledge of Seller, except as set forth in Schedule
4.7, neither the Company nor any of its directors, officers or employees is
under civil or criminal investigation by any Governmental Entity with respect to
any alleged irregularity, misstatement, omission or any other matter with
respect to any Government Contract.
(d) As of the date hereof, neither the Company nor any of its
directors, officers or principals (as defined in FAR 52.209-5) have been
suspended or debarred from United States Government procurement or assistance
programs in the past two years and no such actions are pending, and the Company
is not currently on the List of Parties Excluded from such procurement program.
4.8 Property; Title and Related Matters.
-----------------------------------
(a) The Company neither owns nor leases or subleases any real
property.
(b) Except as set forth on Schedule 4.8, the Company has good and
marketable title to all material assets and properties purported to be owned by
it, free and clear of all Encumbrances other than Permitted Encumbrances. All
material items of tangible personal property owned or leased by the Company are
in all material respects in good operating condition and repair, ordinary wear
and tear excepted, and are suitable for the purposes for which they are intended
to be used.
14
(c) The Company owns or has the right to use pursuant to valid
lease, sublease, agreement or permission (which will not terminate or be
breached as a result of the consummation of the transactions contemplated by
this Agreement) all material items of tangible personal property necessary or
used for the operation of the Business as presently conducted, it being
understood that substantially all tangible property and other assets used in the
conduct of the Business as currently conducted are the property of the
Department and are available pursuant to the DOE Contract. Except as set forth
on Schedule 4.8, each material item of tangible personal property owned or used
by the Company in connection with the operation of the Business as of the date
of this Agreement will be owned or available for use by the Company on
substantially identical terms and conditions after giving effect to the Closing.
4.9 Intellectual Property.
---------------------
(a) The Company's operation of the Business as currently conducted
does not interfere with, infringe upon, represent a misappropriation of or
otherwise come into conflict with any Intellectual Property rights of Seller or
Seller's Affiliates other than the Company and, except as set forth on Schedule
4.9, the Company does not hold the right to use any such Intellectual Property
pursuant to a license or other agreement with Seller or any such Affiliate.
(b) Except as set forth on Schedule 4.9, to Seller's Knowledge, the
Company has not interfered with, infringed upon, misappropriated or otherwise
come into conflict with any Intellectual Property rights of third parties.
Except as set forth on Schedule 4.9, since October 1, 1996, the Company has not
received any charge, complaint, claim, demand or notice alleging any such
interference, infringement, misappropriation or violation (including any claim
that the Company must license or refrain from using any Intellectual Property
rights of any third party). To Seller's Knowledge, no third party has interfered
with, infringed upon, misappropriated or otherwise come into conflict with any
Intellectual Property rights of the Company.
(c) The Company owns or has the right to use pursuant to valid
license, sublicense, agreement or permission all material items of Intellectual
Property necessary or used for the operation of the Business as presently
conducted.
4.10 Legal Matters; Compliance with Laws.
-----------------------------------
(a) Except as set forth on Schedule 4.10, there is no Order or
Action pending or, to the Knowledge of Seller, threatened in writing, against or
affecting the Company that (i) involves a claim or potential claim of liability
in excess of $100,000 against or affecting the Company or any of its tangible
properties or assets, (ii) enjoins or seeks to enjoin any activity by the
Company if such injunction constitutes, or if entered would constitute, a
Material Adverse Circumstance or (iii) individually or when aggregated with one
or more other Orders or Actions has had or would reasonably be expected to have
a material adverse effect on Seller's ability to perform this Agreement.
(b) Except as set forth on Schedule 4.10, the Company is in
compliance with all applicable Laws, including Environmental Laws, in connection
with the operation of the Business and no Action has been commenced against or,
to Seller's Knowledge, threatened against the Company except for any failures of
compliance or Actions alleging such a failure as,
15
in either case, could not reasonably be expected to result in a Material Adverse
Circumstance or a material adverse effect on Seller's ability to perform its
obligations under this Agreement. It is the intent of the parties that the
representations and warranties set forth in this Section 4.10(b) will not be not
applicable to Tax matters, Government Contract matters or employee benefit
matters, which are the subjects of the representations and warranties set forth
in Sections 4.6, 4.7, and 4.11, respectively.
4.11 Employee Benefits.
-----------------
(a) Schedule 4.11 lists as of the date hereof each "employee
pension benefit plan," as that term is defined in Section 3(2) of ERISA, each
"employee welfare benefit plan," as that term is defined in Section 3(1) of
ERISA (such plans being hereinafter referred to collectively as the "ERISA
Plans"), each other retirement, pension, profit-sharing, money purchase, stock
purchase, severance pay, plant closing benefit, unemployment benefit, sick
leave, vacation pay, salary continuation for disability, health, life or other
insurance, Code Section 125, fringe benefit, tuition reimbursement, scholarship
program, or other employee benefit plan, program, agreement, or arrangement,
including employment agreements, executive compensation arrangements, incentive
arrangements or programs, consulting or other compensation arrangements,
workers' compensation, deferred compensation, bonus, stock option, and any plans
providing benefits or payments in the event of a change in control, change in
ownership, or sale of a substantial portion of the assets of any business,
maintained or contributed to as of the date hereof by the Company or any ERISA
affiliate (as defined in ERISA section 4001) in respect of which the Seller or
Company may have any liability for, and for the benefit of, any present or
former employee, director, or agent of the Company (an "Employee")
(collectively, together with the ERISA Plans, referred to hereinafter as the
"Plans"). Those Plans sponsored or maintained by any entity other than Seller
shall be referred to as "Site Plans." Those Plans sponsored or maintained by
Seller shall be referred to "Non-Site Plans."
(b) Seller has delivered to Purchaser with respect to each Non-Site
Plan, and where available to the Company, any Site Plan, true and complete
copies of all plan documents and summary plan descriptions, the most recent
annual reports or returns (Forms 5500) and actuarial reports where applicable,
and the most recent IRS determination letters where applicable. For each Plan,
Seller has furnished to Buyer a true and complete copy of the actuarial
valuation reports available to Seller that were issued by the actuaries of that
Plan for the most recent year.
(c) All contributions with respect to each Non-Site Plan that the
Company or Seller is required to make, either under the terms of the Plan or
applicable Laws, prior to the Closing Date have been made or will be made prior
to that date. Seller has no Knowledge that any contribution with respect to each
Site Plan that the Company is required to make, either under the terms of the
Plan or applicable Laws, prior to the Closing Date has not been made or will not
be made prior to that date.
(d) With respect to the Non-Site Plans, neither the Company nor the
Seller or its Affiliates have engaged in any transaction as a result of which
the Company or any Plan would be subject to any liability pursuant to Sections
406 or 409 of ERISA or to either a civil penalty assessed pursuant to Section
502(i) or 502(l) of ERISA or a tax imposed pursuant to
16
Section 4975 of the Code. With respect to the Site Plans, Seller has no
Knowledge that the Company or its Affiliates have engaged in any transaction as
a result of which the Company or any Plan would be subject to any liability
pursuant to Sections 406 or 409 of ERISA or to either a civil penalty assessed
pursuant to Section 502(i) or 502(l) of ERISA or a tax imposed pursuant to
Section 4975 of the Code
(e) All Non-Site Plans are in compliance, and Seller has no
Knowledge that any Site Plan is not in compliance with all applicable law,
including, to the extent applicable, the Code and ERISA. To the Knowledge of
Seller and the Company, there are no circumstances likely to result in
revocation of any favorable determination letter issued by the IRS with respect
to a Site Plan or the imposition of any liability, lien, penalty, or tax under
ERISA or the Code. There is no pending or threatened litigation or Action
relating to the Non-Site Plans, and Seller has no Knowledge of any pending or
threatened litigation or Action relating to the Site Plans. All returns and
reports required under ERISA or the Code with respect to the Non-Site Plans have
been timely filed, and Seller has no Knowledge that all returns and reports
required under ERISA or the Code with respect to the Site Plan have not been
timely filed. Each Non-Site Plan has been maintained and operated in accordance
with the terms of its governing documents and Seller has no Knowledge that any
Site Plan has not been maintained and operated in accordance with the terms of
its governing documents. None of the Non-Site Plans is currently under audit or
examination by any Governmental Entity and Seller has no Knowledge that any Site
Plan is currently under audit or examination by any Governmental Entity. No
matters relating to any of the Non-Site Plans are currently pending before any
Governmental Entity under a voluntary compliance or correction program and
Seller has no Knowledge that any matters relating to any of the Site Plans are
currently pending before any Governmental Entity under a voluntary compliance or
correction program. Seller has no Knowledge that any Site Plan contains any
terms or provisions that would give rise to any vesting of benefits, severance,
termination, or other payments or liabilities as a result of the transactions
contemplated by this Agreement.
(f) As of the date hereof, no liability under Title IV of ERISA has
been incurred by the Company with respect to any ongoing, frozen or terminated
"single-employer plan," within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by it or an ERISA Affiliate and no actions have
been taken by the Company that could be expected to result in liability. The
Company has not incurred any withdrawal liability with respect to a
multiemployer plan under Title IV of ERISA and no actions have been taken by the
Company that could be expected to result in withdrawal liability. With respect
to Site Plans, Seller has no Knowledge that any notice of a "reportable event,"
within the meaning of Section 4043 of ERISA for which the 30-day reporting
requirement has not been waived, has been required to be filed for any Plan
within the 12-month period ending on the date hereof or will be required to be
filed in connection with the transactions contemplated by this Agreement. No
Plan is an ESOP (within the meaning of Section 4975(e)(7) of the Code) or
otherwise invests in employer securities (as such term is defined in Section
409(l) of the Code). Seller has no Knowledge that any Plan is a funded welfare
plan or a voluntary employee beneficiary association as defined in Section
501(c)(9) of the Code that provides benefits to current or former Company
employees or their beneficiaries.
(g) Seller has no Knowledge that, with respect to all Site Plans
that are group health plans of the Company, the Plans have not been operated in
compliance (including all
17
notice requirements) with the requirements of Sections 4980B and 5000 of the
Code and Part 7 of ERISA.
(h) Seller has no Knowledge of any underfunding or other liability
under Title IV of ERISA attributable to any Site Plans other than as disclosed
in the actuarial reports attached on Schedule 4.11.
(i) Except to such extent as would not constitute a Material
Adverse Circumstance, Company and Seller have classified all individuals
(including but not limited to independent contractors and leased employees)
appropriately under the Plans, ERISA and the Code; if any individuals have not
been appropriately classified, any such error in classification will not cause
Company or Purchaser or the affected Plans to incur any material liability, loss
or damage.
4.12 Labor Relations. Except as set forth on Schedule 4.12, there is
---------------
no labor organization that has been recognized as the collective bargaining
representative of any employees of the Company, there are no controversies
pending or, to Seller's Knowledge, threatened between the Company and any
current or former employee of the Business or any labor or other collective
bargaining unit representing any current or former employee of the Business that
could reasonably be expected to result in a labor strike, dispute, slow-down or
work stoppage or otherwise have a material adverse effect on the financial
condition of the Business. Seller is not aware of any organizational effort
presently being made or threatened by or on behalf of any labor union with
respect to employees of the Business. Except as disclosed in writing to
Purchaser on or prior to the date hereof, to Seller's Knowledge, no executive,
key employee or group of employees of the Business has any plan to terminate
employment with the Business.
4.13 Permits; Security Clearance. Set forth on Schedule 4.13 are all
---------------------------
material Permits, including all material Environmental Permits, necessary to
conduct the Business as presently conducted. No suspension, cancellation or
termination of any of such material Permit is pending or, to Seller's Knowledge,
threatened. The Company holds all material facility security clearances
necessary to permit it to conduct the Business as conducted on the date hereof.
4.14 Affiliate Agreements; Transactions.
----------------------------------
(a) Schedule 4.14 sets forth a list of all written contracts and
agreements outstanding as of the date of this Agreement, and a brief description
in reasonable detail of all oral agreements or arrangements, that relate to (a)
the provision of material products or services to the Business by any other
division, unit or Affiliate of Seller or (b) the provision of material products
or services by the Business to any other division, unit or Affiliate of Seller.
Seller has made available to Purchaser correct and complete copies of each such
written agreement, as amended to date.
(b) Except as set forth on Schedule 4.14, other than as
contemplated by Section 6.5, the consummation of the transactions contemplated
by this Agreement will not
18
(either alone, or upon the occurrence of any act or event, or with the lapse of
time, or both) result in any payment arising or becoming due from the Company to
Seller or any Affiliate of Seller.
4.15 Insurance. Schedule 4.15 contains a correct and complete list of all
---------
material policies of insurance (other than excess coverages) under which the
Company is insured. All such policies are in full force and effect, are
sufficient for compliance with all applicable requirements of Law and all
agreements to which the Company is a party or subject, and provide insurance
coverage of the assets, operations and employees of the Business generally
equivalent in type and amount to that which is customarily carried by other
corporations engaged in similar businesses.
4.16 Bank Accounts and Powers. Schedule 4.16 lists each bank, trust
------------------------
company, savings institution, brokerage firm, mutual fund or other financial
institution with which the Company has an account or safe deposit box relating
to the Business and the names and identification of all Persons authorized to
draw thereon or to have access thereto. Schedule 4.16 lists the names of each
Person holding powers of attorney or agency authority from the Company in
connection with the Business and a summary of the material terms thereof.
4.17 Year 2000 Compliance. Seller has used commercially reasonable efforts
--------------------
to assess both the internal and external systems of the Company to determine
whether they are Year 2000 Compliant. Seller has considered its assessment of
such systems in the development of a remediation plan or plans (the "Year 2000
Plan") for the Company, and, to date, has implemented the Year 2000 Plan in
accordance with its timetable in all material respects. The cost to the Company
of the actions contemplated by the Year 2000 Plan and any other actions
necessary to make such systems Year 2000 Compliant are not reasonably expected
to have a Material Adverse Circumstance on the Business of the Company. For
purposes of this Section 4.17, "Year 2000 Compliant" means that a system will
process dates prior to, on and after January 1, 2000, to the extent that other
systems used in combination with such system properly exchange dates with it.
4.18 Operation in the Ordinary Course. Except as set forth on Schedule
--------------------------------
4.18, since September 30, 1999, the Company has operated the Business in the
ordinary course and substantially in accordance with past practice other than
changes in general conditions in which the Business operates, in Law or
applicable regulations or the official interpretations thereof.
4.19 Brokers' Fees. Seller has no liability or obligation to pay any fees
-------------
or commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement for which Purchaser or any of its Affiliates
(including for this purpose the Company) could become liable or obligated.
4.20 Absence of Questionable Payments. Neither the Company nor, to the
--------------------------------
knowledge of Seller, any director, officer, agent, employee, or other person
acting on behalf of the Company has used any Company funds, assets, or other
properties for improper or unlawful contributions, payments, gifts, or
entertainment, or made any other improper or unlawful expenditures to others,
including, suppliers, customers, governmental officials, and persons or entities
engaged in political activity. Neither the Company nor, to the knowledge of
Seller, any director, officer, agent, employee, or other person acting on behalf
of the Company has accepted
19
or received any improper or unlawful contributions, payments, gifts, or
entertainment. The Company has adequate financial controls in place to prevent
the making or receiving of such improper or unlawful contributions, payments,
gifts, entertainment, or expenditures.
4.21 Disclaimer of Additional Warranties; Acknowledgement. EXCEPT AS
----------------------------------------------------
OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 4, THE SELLER MAKES NO ADDITIONAL
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, REGARDING THE COMPANY
SHARES, THE COMPANY OR THE BUSINESS, INCLUDING ANY WARRANTY AS TO
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ALL WARRANTIES OTHER THAN
THOSE EXPRESSLY PROVIDED IN THIS SECTION 4 ARE HEREBY EXPRESSLY DISCLAIMED AND
EXCLUDED. Except for the representations and warranties contained in this
Agreement or in any certificate delivered to Seller pursuant to this Agreement,
Seller acknowledges that neither Purchaser or any of its Affiliates nor any
other Person makes any other express or implied representation or warranty with
respect to Purchaser or any of its Affiliates.
Section 5. Representations and Warranties of Purchaser. Purchaser
-------------------------------------------
represents and warrants to Seller that the statements contained in this Section
5 are correct and complete as of the date of this Agreement.
5.1 Organization and Related Matters. Purchaser is a corporation
--------------------------------
duly organized, validly existing and in good standing under the laws of the
State of Oregon. Purchaser has full power and authority (including full
corporate power and authority) to execute and deliver this Agreement and to
perform its obligations hereunder.
5.2 Authorization; No Conflicts. The execution, delivery and
---------------------------
performance of this Agreement by Purchaser has been duly and validly authorized
by the Board of Directors of Purchaser and by all other necessary corporate
action on the part of Purchaser. This Agreement constitutes a legally valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms except as may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable principles
relating to or limiting creditors' rights generally. The execution, delivery and
performance of this Agreement by Purchaser, will not (i) violate or constitute a
breach or default (whether upon lapse of time and/or the occurrence of any act
or event or otherwise) under the charter documents or by-laws of Purchaser, (ii)
result in the imposition of any Encumbrance against any material assets or
properties of Purchaser except for such Encumbrances as would not in the
aggregate have a material adverse effect on the ability of Purchaser to
consummate the transactions contemplated by this Agreement or (iii) violate any
Law, except for any such violations, breaches, defaults and impositions as would
not reasonably be expected to have a material adverse effect on the business
operations, assets or financial condition of Purchaser. Except for any filings
or Approvals required under the HSR Act and Federal Acquisition Regulations, the
execution, delivery and performance of this Agreement by Purchaser will not
require any Approvals to be obtained except for any such Approvals the failure
of which to receive would not in the aggregate have a material adverse effect on
the ability of Purchaser to consummate the transactions contemplated by this
Agreement.
20
5.3 Litigation. There are no judicial or administrative actions,
----------
proceedings or investigations pending or, to Purchaser's Knowledge, threatened
that question the validity of this Agreement or any action taken or to be taken
by Purchaser in connection with this Agreement or that, if adversely determined,
would have a material adverse effect upon Purchaser's ability to enter into or
perform its obligations under this Agreement.
5.4 Financing. Purchaser currently has immediately available funds in cash
---------
or cash equivalents, and will at the Closing have immediately available funds in
cash, which are sufficient to pay the Purchase Price, to provide the Company
with sufficient working capital and to pay any other amounts payable pursuant to
this Agreement and to consummate the transactions contemplated by this
Agreement.
5.5 Investment Representation. Purchaser is aware that the Company Shares
-------------------------
are not registered under the Securities Act. Purchaser is an "accredited
investor" as defined under the Securities Act and possesses such knowledge and
experience in financial and business matters that it is capable of evaluating
the risks and merits of its investment in the Company Shares pursuant to this
Agreement. Purchaser is acquiring the Company Shares for its own account, for
investment purposes only and not with a view to the distribution thereof.
Purchaser acknowledges that the Company Shares may not be sold, transferred,
offered for sale, pledged, hypothecated or otherwise disposed of in any
transaction subject to Section 5 of the Securities Act without registration
under the Securities Act unless a valid exemption from registration under the
Securities Act is available in connection with any such transaction.
5.6 Insurance Matters. Purchaser acknowledges that those policies of
-----------------
insurance maintained by Seller or the Company on behalf of the Company which are
part of the corporate insurance program, will not be available or transferred to
Purchaser or the Company after the Closing Date. Purchaser acknowledges that,
from and after the Closing Date, Seller will be free at its discretion at any
time to cancel or not renew any of such policies.
5.7 Foreign Ownership. Purchaser is not under "foreign ownership, control
-----------------
or influence," as such term is defined in the United States Department of
Defense Industrial Security Manual for Safeguarding Classified Information.
5.8 Investigation; Acknowledgment. Purchaser has conducted a review and
-----------------------------
analysis of the business, operations, assets, liabilities, results of
operations, financial condition, software, technology and prospects of the
Company and acknowledges that Purchaser has been provided adequate access to the
personnel, properties, premises and records of the Company for such purpose.
Except for the representations and warranties contained in this Agreement,
Purchaser acknowledges that neither Seller, any of its Affiliates nor any other
Person makes any other express or implied representation or warranty with
respect to the Company Shares, the Company, the Business or otherwise or with
respect to any other information provided to Purchaser, whether on behalf of
Seller or such other Persons, including as to (a) merchantability or fitness for
any particular use or purpose, (b) the operation of the Business by Purchaser
after the Closing in any manner other than as used and operated by Seller or (c)
the probable success or profitability of the ownership, use or operation of the
Business by Purchaser after the Closing.
21
5.9 Brokers' Fees. Purchaser and its Affiliates have no liability or
-------------
obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement for which Seller or
any of its Affiliates could become liable or obligated.
Section 6. Pre-Closing Covenants. The parties agree as follows with
---------------------
respect to the period between the date of this Agreement and the Closing Date.
6.1 Access. Subject to Section 7.5, the Confidentiality Agreement,
------
applicable Laws (including national security regulations and restrictions and
regulations pertaining to classified information) and doctrines of attorney-
client privilege, Seller shall cause the Company to authorize and permit
Purchaser and its representatives (which term shall be deemed to include its
independent accountants and counsel) to have full access during normal business
hours, upon reasonable notice and in such manner as will not unreasonably
interfere with the conduct of the Business, to (i) the Company's properties,
books, records, operating instructions and procedures and all other information
with respect to the Business as Purchaser may from time to time reasonably
request, and (ii) the Company's officers and employees, in each case to the
extent necessary or appropriate for the purposes of obtaining any necessary
Approvals of or Permits for the transactions contemplated by this Agreement and
familiarizing Purchaser with the Business and developments relating to the
Business arising after the date hereof.
6.2 Financial Information. During the period from the date of this
---------------------
Agreement to the Closing Date, to the extent permitted by applicable Law, Seller
will make available to Purchaser within 20 business days after the end of each
month monthly unaudited balance sheets and income statements for the Company of
a type historically prepared by the Company. Each of the financial statements
delivered pursuant to this Section 6.2 shall be prepared in accordance with the
historical practices and procedures of the Company consistently applied.
6.3 Conduct of Business. During the period from the date of this
-------------------
Agreement to the Closing Date, except as set forth on Schedule 6.3, Seller
agrees that the Company shall not, without the prior consent of Purchaser, which
consent may not be unreasonably withheld:
(a) conduct the Business in any manner except in the ordinary
course;
(b) change or amend its charter documents or bylaws;
(c) except in the ordinary course of business or as required by
their terms, amend the DOE Contract or any contract in a manner that would
constitute a Material Adverse Circumstance;
(d) terminate or fail to use reasonable efforts to renew or preserve
any Permits except where the failure to hold any such Permit would not
constitute a Material Adverse Circumstance;
(e) except for liabilities and obligations (i) incurred as allowable
costs in the ordinary course of business pursuant to the DOE Contract or (ii)
for corporate overhead or insurance in an amount not to exceed $90,000 per
month, incur or agree to incur any obligations
22
or liabilities (absolute or contingent) that in the aggregate from the date
hereof to the Closing Date call for payment by the Company of more than
$100,000;
(f) make any loan, guaranty or other extension of credit, or enter into
any commitment to make any loan, guaranty or other extension of credit, to or
for the benefit of any director, officer, employee, stockholder or any of their
respective Affiliates, except for loans, guarantees, extensions of credit or
commitments therefor made to officers or employees for moving, relocation and
travel expenses consistent with past practice and not in excess of $50,000 in
the aggregate unless such costs are allowable costs under the DOE Contract;
(g) (i) grant any general or uniform increase in the rates of pay or
benefits to officers, directors or employees (or a class thereof), (ii) grant
any material increase in salary or benefits of any officer or director or pay
any special bonus to any person, (iii) enter into any new material employment,
collective bargaining or severance agreement, or (iv) adopt any new Non-Site
Plan or amend any existing Non-Site Plan to provide for increased benefits;
(h) sell, transfer, mortgage, encumber or otherwise dispose of any
material assets or liabilities, except (i) for dispositions of property in the
ordinary course of business not greater than $10,000 individually or $50,000 in
the aggregate or (ii) as contemplated by this Agreement;
(i) issue, sell, redeem or acquire for value, or agree to do so, any
equity securities of the Company;
(j) make any capital expenditures or commitments with respect thereto
greater than $100,000 in the aggregate, except in the ordinary course of
business;
(k) make any material investment in any other Person, except as required
by Section H.2 of the DOE Contract; or
(l) agree to or make any commitment to take any actions prohibited by this
Section 6.3.
Purchaser hereby designates the two officers of Purchaser or its Affiliates
listed on Schedule 6.3, or such other officers as Purchaser may designate upon
written notice to Seller (the "Purchaser's Representatives"), to be responsible
for determining whether consent to any action prohibited by this Section 6.3
shall be given by Purchaser. Seller hereby designates the two officers of
Seller listed on Schedule 6.3 or such other officers as Seller may designate
upon written notice to Purchaser (the "Seller's Representatives"), to contact
Purchaser's Representatives with any requests for consent to any action
prohibited by this Section 6.3. Purchaser's Representatives shall respond
promptly (in writing) to any request for consent (which must be written) to the
taking of any action under this Section 6.3. If Purchaser's Representatives do
not respond to any request within five business days of its receipt, such
consent will be deemed to have been given. Seller may rely on any consent given
in writing by either of Purchaser's Representatives. The time periods within
which Purchaser's Representatives must respond shall commence on the date on
which either of Purchaser's Representatives receives a written request for
consent.
6.4 Reasonable Best Efforts; No Inconsistent Action.
-----------------------------------------------
23
(a) Subject to the terms and conditions hereof, Purchaser and Seller shall
cooperate and use their commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement and to cause the conditions to each other's obligation to close
the transactions contemplated hereby as set forth in Section 8 to be satisfied.
In addition, each of Purchaser and Seller will be given notice of and a
reasonable opportunity to participate in contacts with any Governmental Entity
regarding antitrust or merger control matters. Purchaser and Seller shall
cooperate with each other to the extent reasonable in connection with the
foregoing.
(b) In furtherance and not in limitation of the foregoing, Purchaser and
Seller shall use their reasonable best efforts to file Notification and Report
Forms under the HSR Act and similar applications with any other applicable
Governmental Entity whose Approval is required in connection with the
consummation of the transactions contemplated by this Agreement as promptly as
practicable following the date hereof and in any event no later than 10 days
following the date hereof. Purchaser and Seller shall cooperate and use their
respective commercially reasonable efforts to obtain any Approvals required for
the Closing (including through compliance with the HSR Act and any applicable
foreign governmental reporting requirements), to respond to any requests for
information from a Governmental Entity, and to contest and resist any Action and
to have vacated, lifted, reversed or overturned any Order (whether temporary,
preliminary or permanent) that restricts, prevents or prohibits the consummation
of the transactions contemplated by this Agreement. To the extent permitted by
applicable Law, Purchaser and Seller shall provide the other the opportunity to
make copies of all material correspondence, filings or communications (or
memoranda setting forth the substance thereof) between such party or its
representatives, on the one hand, and any Governmental Entity, on the other
hand, with respect to this Agreement or the transactions contemplated hereby,
except for documents filed pursuant to Item 4(c) of the Xxxx-Xxxxx-Xxxxxx
Notification and Report Form or communications regarding the same or documents
or information submitted in response to any request for additional information
or documents pursuant to the HSR Act which reveal Seller's or Purchaser's
negotiating objectives or strategies or purchase price expectations. Purchaser
and Seller acknowledge that all such information provided pursuant to the
foregoing sentence shall be subject to the terms of the Confidentiality
Agreement.
(c) Purchaser and Seller shall notify and keep the other advised as to (i)
any material communication from the Department, the Federal Trade Commission,
the United States Department of Justice or any other Governmental Entity
regarding any of the transactions contemplated hereby and (ii) any Action
pending and known to such party or, to its knowledge, threatened, which
challenges the transactions contemplated hereby. Purchaser and Seller shall not
take any action inconsistent with their obligations under this Agreement which
would materially hinder or delay the consummation of the transactions
contemplated by this Agreement.
6.5 Elimination of Intercompany and Affiliate Liabilities. Prior to the
-----------------------------------------------------
Closing Date, Seller shall purchase, cause to be repaid or (with respect to
guarantees) assume liability for (a) any and all loans or other extensions of
credit made or guaranteed by the Company to or for the benefit of any director,
officer or employee of Seller who remains a director, officer or
24
employee of Seller after the Closing Date and (b) any and all loans, guarantees
or other extensions of credit of any amount made to or for the benefit of Seller
or any Affiliate of Seller, except in either case as set forth on Schedule 6.5.
Prior to the Closing Date, the principal amount of any intercompany loans
payable by the Company to Seller or by Seller to the Company shall be cancelled.
The provisions of this Section 6.5 shall not apply to (i) any intercompany trade
accounts payable or receivable or (ii) any reimbursements due for corporate
services, in each case, to the extent that such trade payables or receivables
and reimbursements either (A) represent allowable costs under the DOE Contract
(including, without limitation, amounts owed to LMSI) or (B) represent amounts
for corporate services not to exceed $90,000 on the Closing Date. Any such
payables, receivables or reimbursements due that exceed such amounts and do not
represent allowable costs under the DOE Contract shall be forgiven or
contributed to the capital of the Company, as applicable, as of the Closing
Date. Purchaser acknowledges that the intercompany obligation resulting from the
deposit of cash received in the ordinary course by the Company in accounts of
Seller or its Affiliates prior to the Closing will be subject to this Section
6.5.
6.6 Control of the Business of the Company. Nothing contained in this
--------------------------------------
Agreement shall give Purchaser, directly or indirectly, the right to control or
direct the Company's operations prior to the Closing Date.
6.7 Accuracy of Information. All documents required to be filed by any of
-----------------------
the parties or any of their respective Subsidiaries with any Governmental Entity
in connection with this Agreement or the transactions contemplated by this
Agreement will comply in all material respects with the provisions of applicable
Law.
6.8 Exclusivity. Seller will not, and will not cause or permit the Company
-----------
or any Affiliates of Seller or any of their respective directors, officers,
employees or representatives to, solicit, initiate or encourage the submission
of any proposal or offer from any Person, or negotiate any unsolicited offer or
proposal, relating to any (a) liquidation, dissolution or recapitalization, (b)
merger or consolidation, (c) acquisition or purchase of securities or assets or
(d) similar transaction or business combination involving all or any portion of
the Business. Seller will notify Purchaser promptly if any Person makes any
proposal, offer, inquiry or contact with respect to any of the foregoing.
6.9 Classified and Special Access Programs. Promptly after the date of
--------------------------------------
this Agreement, Seller and Purchaser will use their reasonable best efforts to
obtain any required security clearances to enable representatives of Purchaser
to conduct a review of all classified and special access programs of the
Business. Upon receiving such security clearances, Seller will permit
Purchaser's Representatives to conduct a review of such programs.
6.10 Certain Actions. From and after the date of this Agreement, Seller
---------------
will not, and will not cause or permit any of its Affiliates to, enter into any
contract, commitment or transaction, or take any other action, if such contract,
commitment, transaction or action would be prohibited under the provisions of
Section 7.6 if entered into, made, consummated or taken on or after the Closing
Date.
25
Section 7. Post-Closing Covenants. The parties agree as follows with
----------------------
respect to the period on and after the Closing Date.
7.1 General. In case at any time on or after the Closing Date any
-------
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the parties will take such further action (including the
execution and delivery of such further instruments and documents) as the other
party reasonably may request, at the sole cost and expense of the requesting
party (unless the requesting party is entitled to indemnification therefor under
Section 9).
7.2 Post-Closing Consents. Seller will use its commercially
---------------------
reasonable efforts and Purchaser will use its commercially reasonable efforts on
and after the Closing Date to obtain at Seller's expense all third party
consents, if any, that are not obtained prior to the Closing Date and that are
required in connection with the transactions contemplated by this Agreement.
7.3 Litigation Support.
------------------
(a) In the event and for so long as any party is actively contesting
or defending against any charge, complaint, action, audit, suit, proceeding,
hearing, investigation, claim or demand in connection with (i) any transaction
contemplated under this Agreement or (ii) any fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act or transaction on or prior to the Closing Date involving
the Business, the other party will cooperate with the contesting or defending
party and its counsel in the contest or defense, make available its personnel
and provide such testimony and access to its books and records as may be
necessary in connection with the contest or defense, at the sole cost and
expense of the contesting or defending party (unless the contesting or defending
party is entitled to indemnification therefor under Section 9). The provisions
of this 7.3(a) will not be applicable in the case of any claim, action or suit
by one party to this Agreement against the other.
(b) In addition to providing access to books, records, files and
other written materials that relate to the Business in connection with
litigation as described in Section 7.3(a), Seller agrees to provide Purchaser
with reasonable access to its and its Affiliate's books and records relating to
indirect corporate general and administrative expenses invoiced or allocated to
the Business prior to the Closing Date. Access to the foregoing books and
records will be provided only to the extent reasonably necessary to permit
Purchaser to contest or defend governmental audits or investigations, to
complete required government reports or contract closures relating to periods
prior to the Closing Date or as required by Law or legal process.
(c) Purchaser will cause the Company to maintain all original books,
records, files, documents, papers and agreements in their possession or control
pertaining to the operations of the Business as conducted prior to the Closing
Date for at least five years following the Closing Date or such longer period as
may be required by Law. Seller will maintain all original books, records, files,
documents, papers and agreements pertaining to the operations of the Business as
conducted prior to the Closing Date that are in the possession or control of
Seller and its Affiliates for at least five years following the Closing Date or
such longer period as may
26
be required by Law. Each of Seller and Purchaser agrees that, upon the receipt
of reasonable notice, it shall provide the other party hereto with reasonable
access to the original books, records, files, documents, papers and agreements
pertaining to the operations of the Business as conducted prior to the Closing
Date as such party shall maintain during the period required by this Section
7.3(c). Each of Seller and Purchaser agrees that before destroying or discarding
any materials required to be retained pursuant to this Section 7.3(c), it will
notify the other party in writing (which notice will include a description of
the materials to be destroyed or discarded) and such other party may, at its
expense, remove or make copies of such materials within 90 days following the
date of such written notice. In the event the other party has not removed such
materials within such 90-day period, the party desiring to destroy or discard
such materials may proceed with such action without any liability to the other
party.
(d) To the extent the Company may be entitled to any attorney-client, work
product and other legal privilege that may exist with respect to the Business,
other than any such privilege relating primarily to any liability for which
Seller has agreed to indemnify any Purchaser Indemnitee, Seller acknowledges and
agrees that such privilege will continue to be a privilege of the Company on and
after the Closing Date. Seller acknowledges that it and its Affiliates will have
no right or power from and after the Closing Date to assert or waive any such
privilege. Seller agrees that it will, and will cause its Affiliates to, take
any actions reasonably requested by Purchaser, at the sole cost and expense of
Purchaser unless Purchaser is entitled to indemnification therefor under the
provisions of Section 9, in order to permit the Company to preserve and assert
any such privilege.
(e) To the extent the Company may be entitled to any attorney-client, work
product and other legal privilege that may exist relating primarily to any
liability for which Seller has agreed to indemnify any Purchaser Indemnitee,
Purchaser acknowledges and agrees that the such privilege will be deemed to be a
privilege of Seller after the Closing Date. Purchaser acknowledges that it and
its Affiliates (including for this purpose the Company) will have no right or
power on or after the Closing Date to assert or waive any such privilege.
Purchaser agrees that it will, and will cause its Affiliates to, take any
actions reasonably requested by Seller, at the sole cost and expense of Seller
unless Seller is entitled to indemnification therefor under the provisions of
Section 9, in order to permit Seller to preserve and assert any such privilege.
7.4 Agreements Regarding Tax Matters.
--------------------------------
(a) Tax Returns.
-----------
(i) Seller shall file or cause to be filed with the appropriate
Governmental Entities having jurisdiction (A) all Tax Returns required to be
filed by the Company prior to the Closing Date, and (B) all Income Tax Returns
in which Seller shall include the taxable income of the Company (to the extent
required by law), including the applicable consolidated federal Income Tax
Return in which the income of the Company is included and in any consolidated or
combined Income Tax Return filed by Seller or an Affiliate thereof in which such
income can be included under applicable law, consistent with past custom and
practice.
27
(ii) Purchaser shall file or cause to be filed with the
appropriate Governmental Entities having jurisdiction all Tax Returns
relating to Taxes of the Company that are required to be filed on or after
the Closing Date (other than Income Tax Returns which include periods for
which a consolidated, unitary or combined Income Tax Return of Seller
includes the taxable income of the Company).
(b) Liability for Taxes.
-------------------
(i) Seller shall be liable for and shall hold Purchaser and
the Company harmless from and against (1) any and all Taxes due or payable
with respect to the Company for any taxable year or period (or portion
thereof) ending prior to the Closing Date (except to the extent such Taxes
are reimbursable by the U.S. Government pursuant to the DOE Contract or the
principles of Federal Acquisition Regulation Part 31, Contract Cost
Principles and Procedures); (2) Income Taxes that result from the Election
(as defined in Section 7.4(j)); and (3) Taxes imposed on any member of any
affiliated group with which the Company files or has filed a Tax Return on
a consolidated, combined or unitary basis for a taxable period ending
before, or that includes, the Closing Date. Purchaser shall prepare, and
permit Seller to audit, such analyses as are reasonably requested by Seller
to support any claim for indemnification under this Section 7.4(b)(i).
(ii) Purchaser shall be liable for and shall hold Seller
harmless from any and all Taxes that are allocable or attributable to the
Company (other than Taxes described in Section 7.4(b)(i)).
(c) Refunds. Any refunds or credits of Taxes for which the Seller is
-------
liable under Section 7.4(b)(i) shall be for the account of Seller. Purchaser
shall permit Seller to control (at Seller's expense) the prosecution of any such
refund or credit claimed, and when deemed appropriate by Seller, shall cause the
relevant entity to authorize by appropriate power of attorney such person as
Seller shall designate to represent such entity with respect to such refund
claimed. Purchaser shall, and shall cause the Company to, notify Seller of the
existence of any facts that Purchaser becomes aware of that would constitute a
reasonable basis for claiming a refund or credit of Taxes to which Seller is
entitled hereunder. Purchaser shall forward to Seller any such refund promptly
after the refund is received or any such credit is granted. Purchaser will not
carry back (nor permit the Company to carry back) to any period of the Company
ending on or before the day immediately preceding the Closing Date (treating for
this purpose such date as the end of a short taxable year) any losses,
deductions or credits giving rise to a refund of Taxes for such period.
(d) Adjustments Due to Audit, Etc. If an audit adjustment, amended
-----------------------------
return or amended assessment (an "Adjustment") after the date hereof shall both
increase a Tax liability which is allocated to Seller under Section 7.4(b) (or
reduce losses or credits otherwise available to Seller) for a period ending on
or before the day immediately preceding the Closing Date (treating such date as
the end of a short taxable year for this purpose) and decrease a Tax liability
of (or increase losses or credits otherwise available to) Purchaser or the
Company for a period ending on or after the Closing Date (treating such date as
the end of a short taxable year for this purpose), then Purchaser shall promptly
pay to Seller an amount equal to the present value amount of the Tax
attributable to such refund, reduction, credit or adjustment, which present
28
value amount shall be determined by using a discount rate equal to the mid-term
applicable federal rate in effect on the date on which the Adjustment is made.
Similarly, if an Adjustment shall both decrease a Tax liability which is
allocated to Seller under Section 7.4(b) (or increase losses or credits of
Seller) for a period ending on or before the day immediately preceding the
Closing Date and increase the Tax liability of Purchaser or the Company (or
reduce losses or credits otherwise available to any such corporation after
taking into account this Agreement) for a period ending on or after the Closing
Date (treating such date as the end of a short taxable year for this purpose),
then Seller shall promptly pay to Purchaser an amount equal to the present value
amount of the Tax attributable to such refund, reduction, credit or adjustment,
which present value amount shall be determined by using a discount rate equal to
the mid-term applicable federal rate in effect on the date on which the
Adjustment is made. This Section 7.4(d) shall be effective with respect to
increases and decreases in Tax liability as long as permitted under applicable
law to the extent that an individual increase or decrease exceeds $100,000.
(e) Contests. If an audit is commenced, an Adjustment is proposed or
--------
any other claim is made by any tax authority with respect to a Tax liability of
the Company which is allocated to Seller under Section 7.4(b), or if an
Adjustment is proposed that could give Seller the right to receive a payment
pursuant to Section 7.4(d), Purchaser shall promptly notify Seller of such audit
or such proposed Adjustment or such claim (unless Seller previously was notified
directly by the relevant tax authority). If Seller so requests and at Seller's
expense, Purchaser shall cause the relevant entity (Purchaser, the Company, or
any successor) to contest such claim on audit or by appropriate claim for refund
or credit of Taxes or in a related administrative or judicial proceeding which
Seller in its sole and absolute discretion, chooses to direct such entity to
pursue, and shall permit Seller, at its expense, to control the prosecution and
settlement of any such audit or refund claim or related administrative or
judicial proceeding with respect to those matters which could affect the Tax
liability of Seller, including any liability hereunder, or their right to
payment; and, where deemed necessary by Seller, Purchaser shall cause the
relevant entity to authorize by appropriate powers of attorney such persons as
Seller shall designate to represent such entity with respect to such audit or
refund claim or related administrative or judicial proceeding and to settle or
otherwise resolve any such proceeding. Purchaser shall further execute and
deliver, or cause to be executed and delivered, to Seller or its designee all
instruments and documents reasonably requested by Seller to implement the
provisions of this Section 7.4(e). Any refund of Taxes obtained by Purchaser or
the affected entity shall be paid promptly to Seller. Audit or refund claims
that are less than $10,000 shall be ignored for purposes of this Section 7.4(e).
(f) Information and Cooperation. Subject to the provisions of Section
---------------------------
7.5 and the Confidentiality Agreement, from and after the Closing Date,
Purchaser shall deliver to Seller or its designee (including for purposes of
this sentence any tax advisors to Seller), as soon as practicable after Seller's
request, such information and data that are reasonably available concerning the
pre-Closing Date operations of the Company and make available such knowledgeable
employees of Purchaser and the Company as Seller may reasonably request
(including employees having special or relevant knowledge or information
pertaining to particular Tax items), including providing the full and complete
information and data required by Seller's customary Tax and accounting
questionnaires to the extent reasonably available, in order to enable Seller
fully to complete and file all Tax Returns that they may be required to file
with
29
respect to the activities of the Company through the Closing Date, to respond to
and contest audits by any taxing authorities with respect to such activities, to
prosecute any claim for refund or credit to which Seller is or may be entitled
hereunder and to otherwise enable Seller fully to satisfy their accounting and
Tax requirements. From and after the Closing Date, Seller shall deliver to
Purchaser (including for purposes of this sentence, Purchaser's tax advisors),
as soon as practicable after Purchaser's request, such information and data that
are reasonably available concerning any Tax attributes that are allocated to the
Company or other information relating solely to the Company that is necessary in
order to enable Purchaser to complete and file all Tax Returns that it may be
required to file with respect to the activities of Purchaser or the Company,
from and after the Closing Date, to respond to and contest audits by any taxing
authorities with respect to such activities, to prosecute any claim for refund
or credit to which Purchaser or the Company is or may be entitled and to which
Seller is not entitled hereunder and to otherwise enable Purchaser and the
Company to satisfy their accounting and Tax requirements. Seller shall execute
and Purchaser shall execute (and shall cause the Company to execute) such
documents as may be necessary to file any Tax Returns, to respond to or contest
any audit, to prosecute any claim for refund or credit and to otherwise satisfy
any Tax requirements relating to the Company. Purchaser shall (and shall cause
the Company to) retain, and shall provide Seller with reasonable access to, the
books and records relating to the Company until the expiration of the applicable
statute of limitations (including extensions), and, in any event, Purchaser
shall provide Seller 60 days written notice before disposing of such books and
records, at which xxxx Xxxxxx can, at its own expense, take possession of such
books and records.
(g) Transfer Taxes. Notwithstanding anything herein to the contrary,
--------------
Purchaser shall be responsible for all sales, use, gross receipts, registration,
business and occupation, transfer, stamp duty, securities transactions, real
estate, and similar Taxes and notarial fees assessed or payable in connection
with the transfer of the Company Shares or other transactions contemplated
hereby, regardless of whether such Taxes become due or payable on or after the
Closing Date (including any such non-Income Taxes resulting from any election
with respect to the Company under Section 338 of the Code or any comparable
provision of state, local or foreign law) and shall be responsible for interest,
penalties and additions to Taxes related to such Taxes.
(h) Tax Sharing Agreements, Etc. All tax sharing agreements, policies,
---------------------------
arrangements and practices between Seller or an Affiliate of Seller and the
Company shall be terminated as of the Closing Date.
(i) Amendments to Tax Returns. Purchaser shall not, and shall not
-------------------------
permit the Company, to amend any Income Tax Return of the Company covering any
period ending on or before the Closing Date without the prior written consent of
Seller.
(j) Section 338(h)(10) Election.
---------------------------
(i) Purchaser and Seller shall join in making a timely election
with respect to the Company under Sections 338(g) and 338(h)(10) of the
Code (the "Election"). Purchaser and Seller shall report, in connection
with the determination of income, franchise or other taxes measured by net
income, the transactions being
30
undertaken pursuant to this Agreement in a manner consistent with the
Election unless required to do otherwise by law.
(ii) Purchaser shall be responsible for the initial preparation
of all forms and documents required in connection with making the Election,
and Purchaser and Seller shall timely execute and file all forms required
to be filed to make the Election. Seller shall execute and deliver to
Purchaser such documents or forms as are required by any tax laws to
complete the Election.
(iii) To the extent permitted by state and local laws, at the
election of Purchaser the principles and procedures of this Section 7.4(j)
shall also apply with respect to a Section 338(h)(10) election or
equivalent or comparable provision under state or local law. Seller and
Purchaser covenant and agree that to the extent an election similar to a
Section 338(h)(10) election under the Code is optional under any state or
local law, they shall so elect so as to treat the transactions contemplated
herein as a sale of assets for state and local income and franchise tax
purposes.
(k) Allocation of Purchase Price. Within 90 days after the Closing
----------------------------
Date, Purchaser shall provide to Seller for Seller's review a draft of the
exhibits proposed to be attached to the Form 8023 and a copy of the Internal
Revenue Service Form 8594 (if required by applicable Law) or other required
forms, if any, related to asset acquisitions and any required exhibits thereto.
Within 150 days of the Closing Date, Purchaser shall provide to Seller for
Seller's review finalized versions of the draft documents delivered by Purchaser
pursuant to the previous sentence, which finalized versions shall contain
entries that are identical to the draft documents except for those changes
resulting from changes in facts or circumstances not known or contemplated at
the time of the Closing. Within 30 days after receipt of such draft documents or
finalized versions thereof, Seller shall, in writing, either agree or state its
objections. Seller and Purchaser shall negotiate in good faith to attempt to
resolve any objections. If Seller and Purchaser are unable to resolve any
Purchase Price allocation differences within 30 days, then any remaining
disputed matters will be finally and conclusively determined by a nationally
known independent accounting firm (the "Allocation Arbiter") selected by
Purchaser and Seller, which firm shall not be the then regular auditors of
Purchaser or Seller. Promptly, but not later than 10 days after its acceptance
of its appointment, the Allocation Arbiter will determine (based solely on
presentations by Seller and Purchaser and not by independent review) only those
matters in dispute and will render a written report as to the disputed matters
and the resulting allocation of the Purchase Price, which report will be
conclusive and binding upon the parties. The fees and expenses, if any, of the
Allocation Arbiter shall be paid one-half by Seller and one-half by Purchaser.
Seller and Purchaser shall file the Form 8023 (and any other documents required
by law to make the Election) on or before the due date for making the Election.
Seller and Purchaser agree to follow said purchase price allocation (which shall
include any adjustments to said allocation resulting from purchase price
adjustments contemplated by Section 10.6 hereof) for purposes of all U.S.
federal and, where applicable, state and local income and franchise tax returns,
to the extent said values are relevant for such purposes.
7.5 Confidential Information. For a period of ten years after the
------------------------
Closing Date, Seller and its Affiliates will treat and hold as such, and will
not use for the benefit of themselves or others, any Confidential Information.
In the event Seller or any of its Affiliates is requested or
31
required (by oral request or written request for information or documents in any
legal proceeding, interrogatory, subpoena, civil investigative demand or similar
process) to disclose any Confidential Information, then Seller will notify
Purchaser promptly in writing of the request or requirement so that Purchaser
may seek an appropriate protective order or waive compliance with this Section
7.5. If, in the absence of a protective order or receipt of a waiver hereunder,
Seller or any of its Affiliates is, on the advice of outside counsel, compelled
to disclose any Confidential Information to any Governmental Entity or else
stand liable for contempt, then Seller or its Affiliate may disclose such
Confidential Information to such Governmental Entity, provided that Seller or
such Affiliate will use its reasonable best efforts to obtain at the request and
expense of Purchaser an Order or other assurance that confidential treatment
will be accorded to such Confidential Information.
7.6 Employees Matters; Benefits.
---------------------------
(a) Employee Matters.
----------------
(i) Purchaser shall cause all active employees of the Company,
employed in the Business on the day immediately prior to the Closing Date
(hereinafter collectively referred to as "Transferred Employees") to remain
employed by (or remain the responsibility of, as applicable) the Company as
of 12:01 a.m. on the Closing Date in the same or comparable positions, and
at the same or comparable total compensation (including base pay, short-
term bonuses and long-term bonuses), as were in effect on the day
immediately prior to the Closing Date, except as otherwise provided in this
Agreement; provided, however, that thereafter all matters with respect to
changes in the positions and compensation of such employees shall be and
remain in the control of Purchaser and the Company. For purposes of this
Section 7.6(a)(i), the term "active employees" shall include all full-time
and part-time employees, casual employees, employees on workers'
compensation, military leave, maternity leave, leave under the Family and
Medical Leave Act of 1993, leave governed by state law, short-term and
long-term disability (including a disability pension), non-occupational
disability, on layoff with recall rights, and employees on other approved
leaves of absence with a legal or contractual right to reinstatement.
(ii) On and after the Closing Date, except as otherwise provided
in this Agreement, Purchaser shall assume, or Purchaser shall cause one of
its Affiliates (including the Company) to assume, all obligations under and
be bound by the provisions of each offer of employment relating to the
Transferred Employees, each employment agreement, collective bargaining
agreement, or any other agreement by Seller relating to conditions of
employment, employment separation, severance, or employee benefits in
connection with Transferred Employees. Set forth on Schedule 7.6 is a list
of all obligations described in this Section assumed by and binding
Purchaser (or the Affiliate of Purchaser assuming such obligations). Set
forth on Schedule 7.6 is a list of all retention bonus agreements between
Seller and any Transferred Employee. Notwithstanding the first sentence of
this Section 7.6(a)(ii), Seller shall remain obligated and bound by all
retention bonus agreements except in the event that liability under any
such agreement results from actions of the Purchaser (or the Affiliate of
Purchaser assuming such obligations) from and after the Closing Date, in
which event Purchaser
32
shall indemnify and hold harmless Seller for any liability arising under
such retention bonus agreement. With respect to the agreements by Seller
listed on Schedule 7.6 to provide supplemental pension benefits to certain
employees of the Company, Seller will provide the supplemental pension
benefits that would have been due under the agreements if the employees had
terminated employment with the Company on the Closing Date taking into
account only service and compensation earned on or before the Closing Date
and Purchaser will provide supplemental pension benefits in accordance with
those agreements based upon service and compensation earned by such
employees while employed by the Company after the Closing Date.
(iii) On and after the Closing Date, Purchaser shall cause the
Company to recognize the service of each Transferred Employee for the
Company before the Closing Date for all employment-related purposes
(including, but not limited to, employee benefit plan purposes) determined
in accordance with the practices and procedures of the Company in effect on
the Closing Date.
(iv) Transferred Employees shall not accrue benefits under any
employee benefit policies, plans, arrangements, programs, practices, or
agreements of Seller or any of its Affiliates on or after the Closing Date.
(v) Nothing in this Agreement shall cause duplicate benefits
to be paid or provided to or with respect to a Transferred Employee under
any employee benefit policies, plans, arrangements, programs, practices, or
agreements (including any ERISA Plans). References herein to a benefit with
respect to a Transferred Employee or current retiree shall include, where
applicable, benefits with respect to any eligible dependents and
beneficiaries of such Transferred Employee or current retiree under the
same employee benefit policy, plan, arrangement, program, practice, or
agreement.
(vi) Each Transferred Employee who, as of the Closing Date,
either (i) is currently receiving long-term disability benefits under a
long-term disability plan of Seller or one of its Affiliates, (ii) has been
approved for receipt of long-term disability benefits under a long-term
disability plan of Seller or one of its Affiliates, or (iii) is receiving a
disability pension under an ERISA Plan, shall be identified by Seller on
Schedule 7.6 as an "LTD Recipient." LTD Recipients shall be treated as
Transferred Employees under this Agreement and, as such, shall be subject
to all of the provisions of this Agreement governing the benefits of
Transferred Employees.
(vii) Purchaser will cause the Company to continue the Company's
Management Incentive Compensation Plan without change or amendment for any
portion of calendar year 1999 remaining after the Closing Date and will
cause the Company to pay all benefits due under the Plan with respect to
calendar year 1999 on or before February 1, 2000. Seller or Company has
accrued for all benefits due under the Management Incentive Compensation
Plan for all periods up to and including the Closing Date.
(viii) Seller shall have no responsibility for the costs of
providing any benefits that are due after the Closing Date with respect to
employees of the Company
33
who terminated employment prior to the Closing Date or who are not actively
employed by the Company on the Closing Date, including but not limited to
any costs associated with the provision of disability benefits or
continuation coverage under Sections 601-607 of ERISA.
(b) Nonqualified Plan.
-----------------
(i) As of the Closing Date, Purchaser will establish a
nonqualified plan or create a separate structure within its existing
nonqualified plan (such new plan or separate structure, the "Purchaser
SERP") and will establish a rabbi trust or a separate structure within its
existing rabbi trust to fund Purchaser's obligations to pay benefits under
the Purchaser SERP (such trust or separate structure, the "Purchaser SERP
Trust").
(ii) (1) The Purchaser SERP will be the same in all material
respects as Seller's Lockheed Xxxxxx Corporation Deferred Management
Incentive Compensation Plan as in effect immediately before the
Closing Date (the "Seller SERP"). The Purchaser SERP Trust will
satisfy the requirements of IRS Revenue Procedure 92-64.
(2) The Purchaser SERP will be established for the benefit
of each Transferred Employee who participates in the Seller SERP
immediately before the Closing Date and each other person who was
employed by the Company, who has an accrued benefit (which remains
payable in whole or in part) under the Seller SERP immediately before
the Closing Date and who immediately before the Closing Date is no
longer actively employed by Seller or who is a beneficiary of an
individual who was employed by the Company and who has an accrued
benefit (which remains payable in whole or in part) under the Seller
SERP (an "Other Participant").
(iii) As soon as practicable following the Closing, Seller will
cause its actuary to calculate the SERP Liability (as defined in Section
7.6(b)(v)) of each participant in the Seller SERP who is a Transferred
Employee or Other Participant (the "Transfer Liability"). Seller thereafter
will transfer or, at Seller's option, will cause the rabbi trust
established by Seller to fund Seller's obligations to pay benefits under
the Seller SERP (the "Seller SERP Trust") to transfer to the Purchaser SERP
Trust cash or assets (or any combination of cash and assets as Seller shall
determine) equal to the Transfer Liability for the Seller SERP (the
"Initial Transfer Amount"). The transfer will be made in accordance with
Section 7.6(b)(iv). Upon such transfer to the Purchaser SERP Trust,
Purchaser will assume all liabilities and obligations of Seller and
Seller's Affiliates under the Seller SERP to provide benefits to each
Transferred Employee and each Other Participant and for any acts, omissions
and transactions related to such benefits under the Seller SERP, whether
arising prior to, on or after the Closing Date.
(iv) The transfers of cash or assets to the Purchaser SERP Trust
will be made in accordance with the provisions of this Section 7.6(b)(iv).
The transfer with respect to the Seller SERP will be made within 60 days
after the date Seller has final confirmation of the identity of each
Transferred Employee and each Other Participant
34
with respect to the Seller SERP, or if later, within 20 days following the
date on which Seller has been provided evidence reasonably satisfactory to
Seller that the Purchaser SERP Trust has been established and that the
assets transferred to such trust from the Seller and/or Seller SERP Trust
will be irrevocably dedicated to pay the liabilities and obligations of
Seller and Seller's Affiliates under the Seller SERP with respect to the
Transferred Employees and Other Participants (the "Transfer Date"). The
amount transferred on the Transfer Date will equal the Initial Transfer
Amount minus the benefit payments made by Seller or the Seller SERP Trust
for the Seller SERP on or after the Closing Date and before the Transfer
Date with respect to Transferred Employees and Other Participants (the
"SERP Benefit Payments"). However, if the SERP Benefit Payments exceed the
Initial Transfer Amount, Purchaser will promptly pay such excess to Seller.
(v) For purposes of this Section 7.6(b), the term "SERP
Liability" means the account balance of each Transferred Employee and each
Other Participant in the Seller SERP, determined as of the end of the
calendar month which includes the Closing Date.
(c) Employee Rights.
---------------
(i) Nothing expressed or implied in this Section 7.6 shall
confer upon any employee of Seller or its Affiliates or the Company, or
Purchaser or its Affiliates, or upon any legal representative of such
employee, any rights or remedies, including any right to employment or
continued employment for any specified period, of any nature or kind
whatsoever under or by reason of this Agreement.
(ii) Nothing in this Agreement shall be deemed to confer upon
any person (nor any beneficiary thereof) any rights under or with respect
to any plan, program, or arrangement described in or contemplated by this
Section 7.6, and each person (and any beneficiary thereof) shall be
entitled to look only to the express terms of any such plan, program, or
arrangement for his or her rights thereunder.
(iii) Nothing in this Agreement shall cause Purchaser or its
Affiliates or the Company or Seller or its Affiliates to have any
obligation to provide employment or any employee benefits to any individual
who is not a Transferred Employee or, except as otherwise provided in
Section 7.6(a)(ii) with respect to employment agreements, to continue to
employ any Transferred Employee for any period of time following the
Closing Date.
(d) WARN Act Requirements. On and after the Closing Date, Purchaser
---------------------
shall be responsible with respect to Transferred Employees and their
beneficiaries for compliance with The Worker Adjustment and Retraining
Notification Act of 1988, including any requirement to provide for and discharge
any and all notifications, benefits, and liabilities to Transferred Employees
and government agencies that might be imposed as a result of the consummation of
the transactions contemplated by this Agreement or otherwise.
35
(e) Non-Solicitation of Employees. Seller agrees that for a period of
-----------------------------
two years commencing on the Closing Date, neither it nor any of its Subsidiaries
will solicit the employment of any employee of the Company as an employee,
independent contractor or otherwise. Seller further agrees that for a period of
three years commencing on the Closing Date, neither it nor any of its
Subsidiaries will solicit the employment of any employee of the Company eligible
to participate in the Company's Management Incentive Compensation Plan as an
employee, independent contractor or otherwise. Seller and its Subsidiaries will
not be deemed to have violated the covenant set forth in this Section 7.6(e) as
a result of the placement of any job advertisement or other general solicitation
of employment not specifically directed to employees of the Company provided
that no employees eligible to participate in the Company's Management Incentive
Compensation Plan, as of the date hereof, so solicited are in fact employed by
Seller or any of its Subsidiaries.
(f) Successors and Assigns. In the event Purchaser or any of its
----------------------
successors and assigns (i) consolidates with or merges into any other Person and
shall not be the continuing or surviving corporation or entity in such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any Person, then, and in each case, Purchaser shall
cause proper provision to be made so that the successors and assigns of
Purchaser shall honor the obligations of Purchaser set forth in this Section
7.6.
7.7 Post-Closing Receipts. In the event that either party after the
---------------------
Closing receives any funds properly belonging to the other party in accordance
with the terms of this Agreement, the receiving party will promptly so advise
such other party, will segregate and hold such funds in trust for the benefit of
such other party and will promptly deliver such funds, together with any
interest earned thereon, to an account or accounts designated in writing by such
other party.
7.8 Non-Competition. Seller agrees that, for a period of seven years
---------------
after the Closing, Seller shall not, and shall cause its Affiliates not to, bid
for, engage or otherwise seek to engage in any business that provides services
related to management, operation or integration of the Hanford Site (other than
the provision of products or services to the Company, Purchaser, Purchaser's
Affiliates or their respective assignees, transferees or subcontractors);
provided, however, that nothing in this Section 7.8 shall be deemed to in any
way limit the ability of Seller and its Affiliates (including LMSI) to provide
information technology services, multimedia services or records and information
management services to (i) companies conducting business at the Hanford Site,
(ii) the Department or (iii) any other party.
7.9 Use of Lockheed Xxxxxx Name.
---------------------------
(a) As of the Closing Date, Purchaser shall cease and shall cause
the Company to cease any and all use of the designation "Lockheed Xxxxxx" in any
fashion or combination, including words and designs related to "Lockheed
Xxxxxx", as well as eliminate the use of any other designation indicating
affiliation with Seller or any of Seller's respective Subsidiaries, as soon as
practicable after the Closing Date. Within 10 business days after the Closing
Date, Purchaser shall notify or shall cause the Company to notify, in writing,
all suppliers and financial institutions having current business relationships
with the Company that the Company has been acquired from Seller by Purchaser.
36
(b) As of the Closing Date, Purchaser shall cause the Company to
change its name to a new name not including "Lockheed Xxxxxx" or any name
confusingly similar thereto and thereafter shall not use and shall cause the
Company not to use or include "Lockheed Xxxxxx" as or in their corporate,
popular, trade or domain names.
(c) As of the Closing Date, Purchaser shall cease and shall cause
the Company to cease offering any services or otherwise using any trademark,
service xxxx or other indication or origin including "Lockheed Xxxxxx" or any
xxxx or indication of origin confusingly similar thereto.
(d) Purchaser agrees not to use or seek to register any trade name,
service xxxx, trademark or domain name identical with or confusingly similar to
"Lockheed Xxxxxx." Purchaser agrees that it will never directly or indirectly
challenge, contest or call into question or raise any questions concerning the
validity or ownership of "Lockheed Xxxxxx" by Seller, any registration or
application for registration of "Lockheed Xxxxxx" or any domain name application
or registration containing "Lockheed Xxxxxx." Purchaser agrees that nothing
herein shall give Purchaser any right to or interest in "Lockheed Xxxxxx" except
the right to use the same in accordance with the terms of this Agreement, and
that all and any uses of "Lockheed Xxxxxx" by Purchaser shall inure to the
benefit of Seller.
Section 8. Closing Conditions.
------------------
8.1 General Obligations. The obligations of Purchaser and Seller to
-------------------
effect the Closing shall be subject to the following conditions, unless waived
in writing by the parties:
(a) No Orders; Legal Proceedings. At the Closing Date, (i) no
----------------------------
material Law or Order shall have been enacted, entered, issued, promulgated or
enforced by any Governmental Entity which prohibits or restrains the transfer of
the Company Shares and (ii) no material Action shall have been commenced by any
Governmental Entity which seeks to restrain or materially and adversely alter
the transactions contemplated hereby which in the reasonable good faith
determination of Seller or Purchaser would render it unlawful to consummate the
transactions contemplated by this Agreement.
(b) Approvals. On or prior to the Closing Date, (i) all Approvals
---------
required by applicable Law to be obtained from any Governmental Entity to effect
the transfer of the Company Shares which are identified on Schedule 8.1(b) shall
have been received or obtained and (ii) any applicable waiting period under the
HSR Act shall have expired or been terminated.
(c) LMSI Agreement. The Company and LMSI shall have entered into an
--------------
agreement, satisfactory in form and substance to Seller and Purchaser and on
commercially reasonable terms that (i) provides for LMSI to continue providing
substantially the same services as LMSI provides to the Company in connection
with its performance under the DOE Contract and (ii) formalizes the relationship
of the Company and LMSI (based on specific objective performance criteria) with
regard to the Company's economic transition and job creation obligations
pursuant to the DOE Contract (which relationship shall be in accordance with the
terms of the draft Lockheed Xxxxxx Xxxxxxx Corporation Economic Development
Plan, dated as of November 8, 1999).
37
(d) No DOE Objection. On or prior to the Closing Date, neither the
----------------
Manager of the Office of River Protection nor any other representative of the
Department with authority over the DOE Contract shall have presented Seller,
Purchaser or the Company with any objection to the transactions contemplated by
this Agreement unless such objection shall have been resolved to the
satisfaction of Seller and Purchaser.
8.2 Conditions to Obligation of Purchaser. The obligation of
-------------------------------------
Purchaser to effect the Closing shall be subject to satisfaction of the
following conditions, except to the extent waived in writing by Purchaser:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Seller set forth in Section 4 that are qualified as to materiality
shall be true and correct and the representations and warranties of Seller set
forth in Section 4 that are not so qualified shall be true and correct in all
material respects, in each case on the date of this Agreement and on the Closing
Date as though made on the Closing Date, unless such representations and
warranties by their terms speak as of an earlier date, in which case they shall
be true and correct, or true and correct in all material respects, as the case
may be, as of such date, except to the extent that the failure of such
representations and warranties to be true and correct, or true and correct in
all material respects, as the case may be, would not constitute a Material
Adverse Circumstance.
(b) Covenants of Seller. Seller will have performed and complied in
-------------------
all material respects with all of its covenants contained in this Agreement
required to be performed or complied with on or prior to the Closing Date;
(c) Officer's Certificate. Seller will have delivered to Purchaser a
---------------------
certificate to the effect that each of the conditions specified above in
Sections 8.2(a) and 8.2(b) are satisfied in all material respects;
(d) Director Resignations. Seller will have delivered to Purchaser
---------------------
written resignations, effective as of the Closing Date, executed by each of the
directors of the Company; and
(e) Legal Opinion. Seller will have delivered to Purchaser a legal
-------------
opinion, addressed to Purchaser and dated the Closing Date, substantially in the
form of Exhibit 8.2(e) hereto.
8.3 Conditions to Obligation of Seller. The obligation of Seller to
----------------------------------
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Purchaser set forth in Section 5 that are qualified as to
materiality shall be true and correct and the representations and warranties of
Purchaser set forth in Section 5 that are not so qualified shall be true and
correct in all material respects, in each case on the date of this Agreement and
on the Closing Date as though made on the Closing Date, unless such
representations and warranties by their terms speak as of an earlier date, in
which case they shall be true and correct, or true and correct in all material
respects, as the case may be, as of such date, except to the extent that the
failure of such representations and warranties to be true and correct, or true
and
38
correct in all material respects, as the case may be, would not have a material
adverse effect on Purchaser's ability to perform its obligations under this
Agreement.
(b) Covenants of Purchaser. Purchaser will have performed and
----------------------
complied in all material respects with all of its covenants contained in this
Agreement required to be performed or complied with on or prior to the Closing
Date;
(c) Officer's Certificate. Purchaser will have delivered to Seller
---------------------
a certificate to the effect that each of the conditions specified above is
satisfied in all respects; and
(d) Legal Opinion. Purchaser will have delivered to Seller a legal
-------------
opinion, addressed to Seller and dated the Closing Date, substantially in the
form of Exhibit 8.3(d) hereto.
Section 9. Termination of Obligations.
--------------------------
9.1 Termination of Agreement. Anything herein to the contrary
------------------------
notwithstanding, this Agreement may be terminated at any time before the Closing
as follows and in no other manner, provided that the terminating party is not in
material breach of its representations, warranties or covenants set forth
herein:
(a) Mutual Consent. By mutual consent in writing of Purchaser and
--------------
Seller.
(b) Closing Not Consummated by Earlier Date. By Seller or Purchaser
---------------------------------------
at any time after February 28, 2000 if the Closing shall not have occurred by
such date, unless extended by mutual consent in writing of Purchaser and Seller;
provided, that the right to terminate this Agreement under this Section 9.1(b)
shall not be available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the failure of the
Closing to occur by such date.
(c) Conditions to Purchaser's Performance Not Met. By Purchaser
---------------------------------------------
upon written notice to Seller if any event occurs or condition exists which
would render impossible the satisfaction of one or more conditions to the
obligations of Purchaser to consummate the Closing contemplated by this
Agreement as set forth in Section 8.
(d) Conditions to Seller's Performance Not Met. By Seller upon
------------------------------------------
written notice to Purchaser if any event occurs or condition exists which would
render impossible the satisfaction of one or more conditions to the obligation
of Seller to consummate the Closing contemplated by this Agreement as set forth
in Section 8.
(e) Unilateral Termination By Purchaser. By Purchaser upon written
-----------------------------------
notice to Seller not less than one business day prior to the Closing Date if
Purchaser shall become aware of any fact, circumstance or condition that was (i)
in existence on or prior to the date hereof and (ii) within the Knowledge of
Seller, and such fact, circumstance or condition (A) would reasonably be
expected to constitute a Material Adverse Circumstance and (B) was not disclosed
to Purchaser in this Agreement (including the Schedules and Exhibits hereto) or
the materials provided to or made available to Purchaser, or was not otherwise
known to Purchaser, prior to the date hereof.
39
9.2 Effect of Termination. In the event that this Agreement shall
---------------------
be terminated pursuant to Section 9.1, all future obligations of the parties
under this Agreement shall terminate without further liability of any party to
another; provided that the obligations of the parties contained in this Section
9.2, Sections 7.5, 11.1 and 11.2 and the Confidentiality Agreement shall survive
any such termination. A termination under Section 9.1 shall not relieve any
party of any liability for a breach of any covenant or agreement under this
Agreement, or be deemed to constitute a waiver of any available remedy
(including specific performance if available) for any such breach. In the event
of a termination under Section 9.1, no party shall have any liability under this
Agreement because of the failure of any representation or warranty made by such
party hereunder to be true and correct.
Section 10. Indemnification; Survival.
-------------------------
10.1 Obligations of Seller. Effective as of the Closing, Seller
---------------------
agrees to indemnify and hold harmless Purchaser, the Company, and their
respective directors, officers, employees, Affiliates, agents and assigns
("Purchaser Indemnitees") from and against any and all Indemnifiable Losses
based upon or arising from:
(a) any inaccuracy in any of the representations and warranties
made by Seller on the date hereof or on the Closing Date in or pursuant to this
Agreement;
(b) any material breach or nonperformance of any of the covenants
of Seller contained in this Agreement, including any matter as to which Seller
in other provisions of this Agreement (including Section 7.4(b)) expressly
agreed to indemnify Purchaser or (subsequent to Closing) the Company; or
(c) any claims, demands, or Actions made by any person (including
any Governmental Entity) under Environmental Law for: (i) Response Actions to
the extent arising from the presence, migration, Release, generation, handling,
treatment, transport, storage or disposal of any Hazardous Materials in
connection with the Business prior to the Closing Date; (ii) loss of life,
injury to persons or property, or damage to natural resources arising from the
presence, migration, generation, Release, handling, treatment, transport,
storage or disposal of any Hazardous Materials in connection with the Business
prior to the Closing Date (whether or not such loss, injury, or damage arises or
becomes manifest before, on, or after the Closing Date); (iii) any violation,
default, or non-compliance under Environmental Law or an Environmental Permit by
the Company that occurred prior to the Closing Date.
(d) any liability or obligation for compensation or for benefits
under any Plan that relates to a period prior to the Closing Date, except to the
extent that the Purchaser has agreed in this Agreement to assume responsibility
for such liability or payment.
The provisions of this Section 10.1 do not limit any rights that Seller may have
against any Purchaser Indemnitee that was a director, officer, employee,
Affiliate or agent of the Company prior to the Closing resulting from, based
upon or arising from actions or omissions of any such Person prior to the
Closing, and no indemnification will be available under this Section 10.1 for
any such Person as a result of any such actions or omissions.
40
10.2 Obligations of Purchaser. Effective as of the Closing,
------------------------
Purchaser agrees to indemnify and hold harmless Seller and its directors,
officers, employees, Affiliates, agents and assigns ("Seller Indemnitees") from
and against any and all Indemnifiable Losses based upon or arising from:
(a) any inaccuracy in any of the representations and warranties
made by Purchaser on the date hereof or on the Closing Date in or pursuant to
this Agreement;
(b) any material breach or nonperformance of any of the covenants
of Purchaser contained in this Agreement, including any matter as to which
Purchaser in other provisions of this Agreement (including Section 7.4(b)) has
expressly agreed to indemnify Seller;
(c) subject to Seller's indemnification obligation under Section
10.1(c), any liability or obligation arising from or under any Environmental Law
or Environmental Permit, or in connection with the presence, migration,
emission, handling, treatment, transport, storage or disposal of any Hazardous
Material, in connection with the Business, where the basis for such liability
occurred on or after the Closing Date; or
(d) the conduct of the Business after the Closing.
10.3 Procedure.
---------
(a) Notice of Third Party Claims. Any party seeking indemnification
----------------------------
of any Indemnifiable Loss or potential Indemnifiable Loss arising from a claim
asserted by a third party shall give written notice to the party from whom
indemnification is sought. Written notice to the Indemnifying Party of the
existence of a third-party claim shall be given by the Indemnified Party
promptly after its receipt of an assertion of liability from the third party;
provided, however, that no failure to provide such notice shall relieve the
Indemnifying Party of any liability hereunder except to the extent that such
Indemnifying Party is materially prejudiced thereby. In the event the provisions
of Section 7.4(b) conflict with the provisions of this Section 10.3, the
provisions of Section 7.4(b) shall govern.
(b) Defense. The Indemnifying Party may, at its option, control the
-------
defense of an Indemnifiable Claim. Notwithstanding the foregoing, the
Indemnified Party shall have the right to retain counsel of its choice at its
own expense and participate in the defense of the Indemnified Claim. If the
Indemnifying Party does not assume such defense or the Indemnifying Party
notifies the Indemnified Party within 30 days that it will not assume such
defense, the Indemnified Party may control the defense of such claim and may
settle the claim on behalf of and for the account and risk of the Indemnifying
Party, who shall be bound by the result. In all cases, the party without the
right to control the defense of the Indemnified Claim may participate in the
defense at its own expense.
(c) Settlement Limitations. Notwithstanding anything in this
----------------------
Section 10.3 to the contrary, neither the Indemnifying Party nor the Indemnified
Party shall, without the written consent of the other party, settle or
compromise any Indemnifiable Claim or permit a default or consent to entry of
any judgment, unless (i) such settlement or compromise includes a complete
release of the Indemnified Party with respect to liability related to such
Indemnifiable Claim and
41
(ii) such Indemnifiable Claim relates to, or the claim resulting in such
judgment would have given rise to, an Indemnifiable Claim under Section 10.2
(other than Section 10.2(d)). Notwithstanding clause (i) of the preceding
sentence, if a settlement offer solely for money damages is made by the
applicable third party claimant, and the Indemnifying Party notifies the
Indemnified Party in writing of the Indemnifying Party's willingness to accept
the settlement offer and pay the amount called for by such offer without
reservation of any rights or defenses against the Indemnified Party, the
Indemnified Party may continue to contest such claim, free of any participation
by the Indemnifying Party, and the amount of any ultimate liability with respect
to such Indemnifiable Claim that the Indemnifying Party has an obligation to pay
hereunder shall be limited to the lesser of (A) the amount of the settlement
offer that the Indemnified Party declined to accept plus the Indemnifiable
Losses of the Indemnified Party relating to such Indemnifiable Claim through the
date of its rejection of the settlement offer or (B) the aggregate Indemnifiable
Losses of the Indemnified Party with respect to such claim. If the Indemnifying
Party makes any payment on any claim, the Indemnifying Party shall be
subrogated, to the extent of such payment, to all rights and remedies of the
Indemnified Party to any insurance benefits or other claims of the Indemnified
Party with respect to such claim.
10.4 Survival. The representations and warranties contained in or
--------
made pursuant to this Agreement shall expire on the second anniversary of the
Closing Date except that the representations and warranties contained in
Sections 4.3, 4.19, 5.5 and 5.9 shall remain in full force and effect
indefinitely. This Section 10 shall survive the Closing and shall remain in
effect (a) with respect to Sections 10.1(a) and 10.2(a), so long as the relevant
representations and warranties survive, (b) with respect to Sections 10.1(b),
and 10.2(b), to the extent those Sections relate to the covenants set forth in
Section 7, other than Section 7.3 and Section 7.4, until the second anniversary
of the Closing Date, (c) with respect to Sections 7.3, 10.1(b) and 10.2(b) (to
the extent those Sections relate to covenants other than as set forth in Section
7), so long as the applicable covenant survives, (d) with respect to Section
10.1(c), until the seventh anniversary of the Closing Date and (e) with respect
to Section 7.4, claims relating to the Seller's obligation to provide the
supplemental pension benefit pursuant to Section 7.6(a)(ii), Section 10.2(c) and
Section 10.2(d), indefinitely. Any matter as to which a claim has been asserted
by notice to the other party that is pending or unresolved at the end of any
applicable limitation period shall continue to be covered by this Section 10
notwithstanding any applicable statute of limitations (which the parties hereby
waive) until such matter is finally terminated or otherwise resolved by the
parties under this Agreement or by a court of competent jurisdiction and any
amounts payable hereunder are finally determined and paid.
10.5 Limitations on Indemnification. Seller shall not be required to
------------------------------
indemnify any Person under Section 10.1 unless the aggregate of all amounts for
which indemnity would otherwise be payable by Seller exceeds $250,000, and in
such event, Seller shall be responsible for only the amount in excess of
$250,000, except that such limitation shall not apply to any claims arising out
of Section 4.3 or for claims relating to the Seller's obligation to provide the
supplemental pension benefit pursuant to Section 7.6(a)(ii), for which Seller
shall indemnify the Indemnified Party for the full amount of any Indemnifiable
Loss. In no event shall (i) the total indemnification to be paid by Seller under
Section 10.1(a) and Section 10.1(b) exceed $5,000,000 or (ii) the total
indemnification to be paid by Seller under Section 10.1 exceed $15,000,000. Any
Indemnifiable Claim with respect to any breach or nonperformance by either party
of a representation, warranty, covenant or agreement shall be limited to the
amount of
42
actual damages sustained by the Indemnified Party by reason of such breach or
nonperformance, net of any insurance proceeds and, with respect to the Company,
amounts that are recoverable costs under the DOE Contract or the DOE
Subcontract. Any amounts required to be paid by Seller pursuant to Section 7.4
of this Agreement shall not be deemed to be an indemnification payment for
purposes of this Section 10.5.
10.6 Treatment of Payments. All payments made pursuant to this
---------------------
Section 10 (other than a payment based on an obligation arising under Section
7.4(b)) shall be treated as adjustments to the Purchase Price. Notwithstanding
anything in this Agreement to the contrary, Purchaser shall not be indemnified
or reimbursed for any tax consequences arising from the receipt or accrual of an
indemnity payment hereunder, including, without limitation, any such
consequences arising from adjustments to the basis of any asset resulting from
an adjustment to the Purchase Price or any additional Taxes resulting from any
such basis adjustment.
10.7 Remedies Exclusive. The remedies provided for in this Section
------------------
10 shall constitute the sole and exclusive remedy for any claims arising after
the Closing (i) made for breach of this Agreement, (ii) otherwise in connection
with the transactions contemplated hereby or (iii) arising under any
Environmental Law or in connection with any Environmental Permit, except for (A)
claims arising out of any breach of the Confidentiality Agreement, Section 7.5,
or this Section 10, and (B) claims based upon fraud or willful misconduct. In no
event shall a breach of a representation or warranty be used as evidence of, or
be deemed to constitute, bad faith, misconduct or fraud, even in the event that
it is shown that any party or its Affiliates or any of their respective
directors, employees, officers, representatives, advisors or agents knew or
should have known of the existence of information which was inconsistent with
any of this representations and warranties made herein. Each party hereby waives
any provision of Law to the extent that it would limit or restrict the agreement
contained in this Section 10.7.
10.8 Mitigation. The parties shall cooperate with each other with
----------
respect to resolving any claim or liability with respect to which one party is
obligated to indemnify the other party hereunder, including by making
commercially reasonable efforts to mitigate or resolve any such claim or
liability. In the event that any party shall fail to make such commercially
reasonable efforts to mitigate or resolve any claim or liability, then
notwithstanding anything else to the contrary contained herein, the Indemnifying
Party shall not be required to indemnify any Person for any Indemnifiable Loss
to the extent that such Indemnifiable Loss could reasonably be expected to have
been avoided if such party, as the case may be, had made such efforts.
Section 11. Miscellaneous.
-------------
11.1 Press Releases and Announcements. No party will issue any press
--------------------------------
release or announcement relating to the subject matter of this Agreement prior
to the Closing Date without the prior approval of the other party; provided that
any party may make any public disclosure it believes in good faith is required
by Law or by the rules and regulations of any Governmental Entity, any stock
exchange on which the securities of such party are listed (in which case the
disclosing party will advise the other party prior to making such disclosure).
43
11.2 Expenses. Each of the parties hereto will bear all legal,
--------
accounting, investment banking and other expenses incurred by it or on its
behalf in connection with the transactions contemplated by this Agreement,
whether or not such transactions are consummated. All legal, accounting,
investment banking and other fees and expenses incurred by or on behalf of
Seller in connection with this Agreement will be borne by Seller and no such fee
or expense will be paid or payable by the Company.
11.3 Further Assurances. Each of Purchaser and Seller shall execute
------------------
and deliver both before and after the Closing such further certificates,
agreements and other documents and take such other actions as the other party
may reasonably request to consummate or implement the transactions contemplated
hereby or to evidence such events or matters. With respect to the securing of
any requisite Approvals after Closing, the parties shall timely and promptly
make all filings which may be required for the securing of such Approvals. In
furtherance and not in limitation of the foregoing, each of Purchaser and Seller
shall use commercially reasonable efforts to file notification and report forms
and similar applications with any applicable Governmental Entity whose Approval
may be required following the Closing Date. Purchaser and Seller shall cooperate
and use their respective commercially reasonable efforts to respond to any
requests for information by any Governmental Entity in connection with such
Approvals after the Closing.
11.4 Remedies. Subject to Section 10.7, any party having any rights
--------
under any provision of this Agreement will have all rights and remedies set
forth in this Agreement and all rights and remedies that such party may have
been granted at any time under any other agreement or contract and all of the
rights that such party may have under any Law. Any such party will be entitled
to enforce such rights specifically, without posting a bond or other security,
to recover damages by reason of any breach of any provision of this Agreement
and to exercise all other rights granted by Law.
11.5 Consent to Amendments. The provisions of this Agreement may be
---------------------
amended or waived only by a written agreement executed and delivered by Seller
and Purchaser. No other course of dealing between the parties to this Agreement
or any delay in exercising any rights hereunder will operate as a waiver of any
rights of such parties.
11.6 Successors and Assigns. No party hereto may assign or delegate
----------------------
any of such party's rights or obligations under or in connection with this
Agreement without the written consent of the other party; provided that
Purchaser may without the written consent of Seller assign its rights under this
Agreement to one or more Affiliates of Purchaser, it being understood that
Purchaser intends to assign its rights to purchase the Company Shares to CH2M
HILL Constructors, Inc., a Delaware corporation, at or prior to the Closing. No
assignment by Purchaser pursuant to the proviso of the preceding sentence will
release Purchaser of any of its obligations under this Agreement or waive or
release any right or remedy Seller may have against Purchaser hereunder or
thereunder. Except as otherwise expressly provided herein, all covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto or thereto will be binding upon and enforceable against the respective
successors and assigns of such party and will be enforceable by and will inure
to the benefit of the respective successors and permitted assigns of such party.
44
11.7 Severability. Whenever possible, each provision of this
------------
Agreement will be interpreted in such manner as to be effective and valid under
applicable Law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable Law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
11.8 Counterparts. This Agreement may be executed simultaneously in
------------
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same Agreement.
11.9 Descriptive Headings. The descriptive headings of this
--------------------
Agreement and the Schedules are inserted for convenience only and do not
constitute a part of this Agreement.
11.10 Notices. All notices, demands or other communications to be
-------
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given when delivered personally to
the recipient or when sent to the recipient by telecopy (receipt confirmed), one
business day after the date when sent to the recipient by reputable express
courier service (charges prepaid) or three business days after the date when
mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
will be sent to Purchaser and Seller at the addresses indicated below:
If to Purchaser: CH2M HILL Companies, Ltd.
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Telephone No. (000) 000-0000
Telecopy No: (000) 000-0000
Attention: Xxxxxxxxx Xxxxxx
Chief Financial Officer for the Industrials
and Environment Group
With a copy Xxxxx & Xxxxxxx LLP
(which will not 0000 Xxxxxxxxxxx Xxxxxx
constitute notice) Suite 1500
to: Xxxxxx, XX 00000
Telephone No: (000) 000-0000
Telecopy No: (000) 000-0000
Attention: Xxxxxxx Xxxxxx, Esq.
If to Seller: Lockheed Xxxxxx Corporation
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Xx.
Senior Vice President and General Counsel
45
With a copy (which O'Melveny & Xxxxx LLP
will not constitute 000 00xx Xxxxxx, X.X.
notice) to: Xxxxx 000 Xxxx
Xxxxxxxxxx, X.X. 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esq.
or to such other address or to the attention of such other party as the
recipient party has specified by prior written notice to the sending party.
11.11 No Third-Party Beneficiaries. This Agreement will not confer any
----------------------------
rights or remedies upon any Person other than Seller and Purchaser and their
respective successors and permitted assigns.
11.12 Entire Agreement. This Agreement (including the documents
----------------
referred to herein) constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements or representations by or among
the parties, written or oral, that may have related in any way to the subject
matter hereof. Notwithstanding the foregoing, the Confidentiality Agreement will
not be deemed to have been superseded by this Agreement unless and until the
Closing occurs, at which point the Confidentiality Agreement will be deemed to
have terminated in its entirety and will have no further force or effect.
11.13 Construction. All terms defined herein have the meanings
------------
assigned to them herein for all purposes, and such meanings are equally
applicable to both the singular and plural forms of the terms defined.
"Include", "includes" and "including" shall be deemed to be followed by "without
limitation" whether or not they are in fact followed by such words or words of
like import. "Writing", "written" and comparable terms refer to printing,
typing, lithography and other means of reproducing words in a visible form. Any
instrument or Law defined or referred to herein means such instrument or Law as
from time to time amended, modified or supplemented, including (in the case of
instruments) by waiver or consent and (in the case of any Law) by succession of
comparable successor Laws and includes (in the case of instruments) references
to all attachments thereto and instruments incorporated therein. References to a
Person are, unless the context otherwise requires, also to its successors and
assigns. Any term defined herein by reference to any instrument or Law has such
meaning whether or not such instrument or Law is in effect. "Shall" and "will"
have equal force and effect. "Hereof", "herein", "hereunder" and comparable
terms refer to the entire instrument in which such terms are used and not to any
particular article, section or other subdivision thereof or attachment thereto.
References to "the date of this Agreement," "the date hereof" or words of like
import shall mean November 29, 1999. References in an instrument to "Article",
"Section" or another subdivision or to an attachment are, unless the context
otherwise requires, to an article, section or subdivision of or an attachment to
such instrument. References to any gender include, unless the context otherwise
requires, references to all genders, and references to the singular include,
unless the context otherwise requires, references to the plural and vice versa.
All accounting terms not otherwise defined herein have the meaning assigned
under generally
46
accepted accounting principles in the United States which have effective dates
on or prior to September 30, 1999.
11.14 Representation by Counsel; Interpretation. Seller and Purchaser
-----------------------------------------
each acknowledge that each party to this Agreement has been represented by
counsel in connection with this Agreement and the transactions contemplated by
this Agreement. Accordingly, any rule of Law or any legal decision that would
require interpretation of any claimed ambiguities in this Agreement against the
party that drafted it has no application and is expressly waived. The provisions
of this Agreement shall be interpreted in a reasonable manner to effect the
intent of Purchaser and Seller.
11.15 Incorporation of Exhibits and Schedules. The Exhibits and
---------------------------------------
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
11.16 Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
-------------
VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE EXHIBITS AND SCHEDULES
HERETO WILL BE GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF
THE STATE OF COLORADO.
11.17 Resolution of Disputes. All litigation relating to or arising
----------------------
under or in connection with this Agreement shall be brought only in the federal
or state courts located in the State of Colorado, which shall have exclusive
jurisdiction to resolve any disputes with respect to this Agreement, with each
party irrevocably consenting to the jurisdiction thereof for any actions, suits
or proceedings arising out of or relating to this Agreement. The parties hereto
irrevocably waive trial by jury in any legal action or proceeding relating to
this Agreement or any other agreement entered into in connection therewith and
for any counterclaim with respect thereto. In the event of any breach of the
provisions of this Agreement, the non-breaching party shall be entitled to
equitable relief, including in the form of injunctions and Orders for specific
performance, where the applicable legal standards for such relief in such courts
are met, in addition to all other remedies available to the non-breaching party
with respect thereto at law or in equity.
11.18 No Consequential Damages. Notwithstanding anything to the
------------------------
contrary elsewhere in this Agreement, no party (or its Affiliates) shall, in any
event, be liable to the other party (or its Affiliates) for any consequential,
special or punitive damages, including, but not limited to, loss of future
revenue or income, or loss of business reputation or opportunity relating to the
breach or alleged breach of this Agreement.
[Remainder of Page Intentionally Left Blank]
47
IN WITNESS WHEREOF, the parties hereto have executed and deliver this
Agreement on the date first written above.
CH2M HILL COMPANIES, LTD.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President and Chief Financial Officer
LOCKHEED XXXXXX CORPORATION
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx
Title: Director - Business Ventures
48
