EXHIBIT 2.3
Westinghouse Electric Corporation
Westinghouse Building
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
February 29, 1996
Northrop Grumman Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Asset Purchase Agreement dated as of
January 3, 1996 (the "Asset Purchase Agreement") between Westinghouse Electric
Corporation ("Seller") and Northrop Grumman Corporation ("Purchaser").
Capitalized terms used herein without definition shall have the respective
meanings set forth in the Asset Purchase Agreement. Each of the undersigned
hereby agree to the following with respect to the Asset Purchase Agreement:
1. Determinations. The determinations pursuant to Section 2.3(a)
---------------
of the Asset Purchase Agreement of the Closing Balance Sheet, the Closing
Statement of Working Capital, the Restructuring Amount and the Norden
Amount shall each be as of 11:59 p.m. on February 29, 1996, rather than the
close of business on the Closing Date. References to the Closing Date in
Sections 2.3(d) and (e) of the Asset Purchase Agreement shall be deemed to
be references to 11:59 p.m. on February 29, 1996. Seller agrees that
pursuant to Section 1.2(a) of the Asset Purchase Agreement all assets set
forth on the Closing Balance Sheet shall be Acquired Assets, including any
proceeds of such assets received between 11:59 p.m. on February 29, 1996
and the Closing.
2. Allocations. The Allocation Statement referenced in Section
------------
4.14(a) of the Asset Purchase Agreement shall be agreed upon between
Purchaser and Seller within 60 days following the Closing.
3. Shared Claims; Insurance Administration. (a) To the extent
----------------------------------------
necessary or advisable following the Closing, Purchaser and Seller shall
negotiate in good faith and enter into one or more agreements governing
defense of Shared Claims on the terms set forth in Section 7.10(b) of the
Asset Purchase Agreement and such additional terms as shall be mutually
agreeable.
(b) Purchaser and Seller have agreed to waive the provisions of
Section 4.19 of the Asset Purchase Agreement to the extent relating to
entering into an Insurance Administration Agreement prior to Closing, it
being agreed that the remainder of the purposes and intent of such Section
4.19 shall remain in full force and effect.
4.1 Delayed Transfer. (a) Notwithstanding the provisions of
-----------------
Articles I and II of the Asset Purchase Agreement, the Acquired Assets
located at or constituting the Premises set forth on Schedule A attached
hereto (such Premises, the "Delayed Premises" and such Acquired Assets, the
"Delayed Assets") shall not be sold, assigned, transferred, conveyed or
delivered to Purchaser on the Closing Date. The Delayed Assets shall be
sold, assigned, transferred, conveyed and delivered to Purchaser (or its
designee(s)) on such date or dates as shall be no earlier than 30 days from
the date of written notice from Purchaser to Seller that Purchaser (or
its designee) is legally able, under applicable law,
1
to accept Sellers' right, title and interest in, to and under the
Delayed Assets (any such date, a "Delayed Asset Transfer Date"). Purchaser
shall be entitled to deliver separate notices for each of the locations
listed on Schedule A in which event there shall be a separate Delayed Asset
Transfer Date for each such location. Purchaser agrees to deliver any and
all such notices no later than 120 days following the Closing Date. In the
event that Purchaser shall fail to deliver any such notice within such time
period, Sellers shall have no further obligations to Purchaser in respect
of the Delayed Assets which are the subject of such failure and Sellers
shall be entitled to dispose of any such Delayed Assets in any manner
whatsoever.
(b) Notwithstanding the provisions of Section 4.5 of the Asset
Purchase Agreement to the contrary, Division Employees whose principal
place of employment is at one of the Delayed Premises ("Delayed Transferred
Employees") will continue on Seller's (or a Subsidiary's) payroll and will
continue to participate in each of Seller's (or the applicable
Subsidiary's) employee benefit plans in which they are currently
participating until the applicable Delayed Asset Transfer Date. Purchaser
will offer employment with comparable wages and benefits on the applicable
Delayed Asset Transfer Date to each such Delayed Transferred Employee then
in employment with Sellers, and on and as of the applicable Delayed Asset
Transfer Date each such Delayed Transferred Employee will become a
Transferred Employee for all purposes of the Asset Purchase Agreement.
Purchaser will promptly reimburse Seller for 100% of the payroll, benefits
(including statutory benefits, severance and other termination benefits)
and other costs and expenses directly or indirectly relating to Delayed
Transferred Employees within 30 days following receipt of each written
notification from Seller of such payroll, benefits and other costs and
expenses.
(c) Notwithstanding the provisions of Articles I and II of the Asset
Purchase Agreement, the Acquired Assets constituting the Investments of
Sellers in Westinghouse Gulf, West*Quest Limited Partnership and West*Quest
II Limited Partnership (such Acquired Assets, the "Delayed Investments")
shall not be sold, assigned, transferred, conveyed or delivered to
Purchaser on the Closing Date. The Delayed Investments shall be sold,
assigned, transferred, conveyed and delivered to Purchaser (or its
designee(s)) upon receipt of any consents necessary as a condition to such
sale, assignment, transfer, conveyance or delivery.
4.2 Operation of Delayed Assets. (a) With respect to the Delayed
----------------------------
Assets at each of the locations listed on Schedule A, until the applicable
Delayed Asset Transfer Date (or, the termination of Seller's obligations
pursuant to the last sentence of Section 4.1(a)), Seller or one or more of
its Subsidiaries shall continue to conduct the business of the Division at
the Delayed Premises as agent of, and on behalf of, and at the expense of,
Purchaser, pursuant to the Transitional Services Agreement referenced in
Section 4.16(a) of the Asset Purchase Agreement; provided, that the
--------
Delayed Transferred Employees shall be under the supervision and control of
Purchaser.
2
(b) Seller and its Subsidiaries and affiliates shall not be liable,
whether in contract, in tort (including, without limitation, negligence and
strict liability) or otherwise, for any direct, special, indirect,
incidental, consequential or other damages whatsoever which in any way
arise out of, relate to, or are a consequence of, its performance or
nonperformance hereunder, or the ownership or holding of the Delayed
Assets, the occupancy of the Delayed Premises, the employment of (and
severance and other termination benefit obligations in respect of) the
Delayed Transferred Employees or the operation of the business of the
Division at the Delayed Premises after the Closing, including, without
limitation, loss of profits, business interruptions and claims of
customers.
(c) Purchaser hereby releases Sellers, their affiliates and their
respective officers, directors, employees, stockholders, agents and
representatives (the "Seller Indemnitees") and agrees to indemnify the
Seller Indemnitees against and hold them harmless from, any loss,
liability, claim, damage or expense (including, without limitation,
reasonable legal fees and expenses) as incurred, arising from, relating to
or otherwise in respect of (A) the delayed transfer pursuant to Section 4.1
hereof and (B) the occupancy of the Delayed Premises, the employment of
(and severance and other termination benefit obligations in respect of) the
Delayed Transferred Employees and the operation of the business of the
Division at the Delayed Premises after the Closing pursuant to this Section
4.2 (including the acts or omissions of any employee at the Delayed
Premises).
5. Center Employees. Purchaser and Seller hereby agree that
----------------
Schedule B attached hereto sets forth the name of each Center Employee.
6. Limited Use of Westinghouse Name. Notwithstanding anything to
--------------------------------
the contrary in the Asset Purchase Agreement, from and after the Closing:
(a) Purchaser shall be permitted to use Seller's name and
logo (including, without limitation, on invoices and letterhead), as
reasonably necessary, with respect to any Contract included in the
Acquired Assets until such time as all novations, consents, approvals
or waivers contemplated by Section 4.4 of the Asset Purchase Agreement
have been obtained;
(b) Purchaser may use, or cause to be used, on business
stationary of the Division and business cards of employees of the
Division the phrase "... acquired from, and formerly known as, the
Westinghouse Electronic Systems Group," until December 31, 1996; and
(c) Seller hereby assigns to Purchaser those CAGE Codes
currently used by the Division.
7. Schedule 4.14. Purchaser and Seller hereby agree that a revised
-------------
Schedule 4.14 to the Asset Purchase Agreement, replacing the existing
Schedule 4.14, is attached hereto.
8. Clarification of Excluded Assets. Purchaser and Seller hereby
--------------------------------
agree that Micros Systems shall be an Excluded Asset and shall be
deemed included on Schedule 1.2(b) to the Asset Purchase Agreement.
9. Further Assurances. From time to time upon the request of either
-------------------
party, each of Purchaser and Seller shall, and shall cause their respective
Subsidiaries and affiliates to, execute, deliver and acknowledge any and
all such further documents and instruments and do such further acts and
things as the other party hereto may reasonably request to evidence or
effectuate more effectively the terms of and intent of the parties
contemplated by this Letter Agreement.
4
This Letter Agreement, which may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, shall
be governed by, and construed in accordance with, the laws of the State of New
York applicable to contracts made and to be performed entirely in the State of
New York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of law.
Please acknowledge your agreement with the foregoing by signing in the
space provided below.
Very truly yours,
WESTINGHOUSE ELECTRIC CORPORATION,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Acknowledged and agreed to
as of the date first above
written:
NORTHROP GRUMMAN CORPORATION,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Corporate Vice President
THE FOLLOWING SCHEDULES TO THE LETTER AGREEMENT DATED FEBRUARY 29, 1996 HAVE
BEEN OMITTED PURSUANT TO RULE 6.01(B)(2) OF REGULATION S-K. SUCH SCHEDULES ARE
DESCRIBED IN THE LETTER AGREEMENT.
SCHEDULES TO THE LETTER AGREEMENT
A Premises
B Personnel Included in Sale
4.14 Sold Assets