ASSET PURCHASE AGREEMENT
by and among
Banner Aerospace, Inc.,
▇▇ ▇▇▇▇▇▇▇ Aerospace, Inc.,
Banner Aerospace Services, Inc.
and
AlliedSignal Inc.
and
AS BAR PBH LLC
dated as of December 8, 1997
_______________________________________________
TABLE OF CONTENTS
Page
ARTICLE I
The Transaction
1.1 Purchase and Sale
1.2Acquisition of Assets
1.3Assumption of Assumed Liabilities
1.4Initial Purchase Price
1.5Escrow of Shares
1.6Closing
1.7Deliveries and Proceedings at the Closing
1.8Stock Legend
ARTICLE II
Representations And Warranties Of Parent And Sellers
2.1Qualification
2.2Ownership of the Sellers
2.3Authorization and Enforceability
2.4No Violation of Laws or Agreements
2.5Consents
2.6Financial Statements
2.7No Changes
2.8Contracts
2.9Permits and Compliance With Laws Generally
2.10Environmental Matters
2.11Transactions with Affiliates
2.12Title
2.13Acquired Real Property
2.14Taxes
2.15Intellectual Property and Technology
2.16Brokerage
2.17Product Warranties and Guarantees
2.18Products Liability
2.19Labor Matters
2.20Employee Benefits
2.21No Pending Litigation or Proceedings
2.22Insurance
2.23Customers; Suppliers
2.24Condition of Assets
2.25All Assets
2.26[Intentionally omitted.]
2.27Securities Matters
2.28 SEC Filings
2.29 [Intentionally omitted.]
2.30 Business Conduct
ARTICLE III
Representations And Warranties Of AlliedSignal and Buyer
3.1Organization and Good Standing
3.2Authorization and Enforceability
3.3No Violation of Laws or Agreements
3.4Consents
3.5AlliedSignal Common Stock
3.6SEC Filings
3.7Financial Statements
3.8Brokerage
ARTICLE IV
Additional Covenants
4.1Conduct of Business
4.2Mutual Covenants
4.3Filings and Authorizations
4.4Public Announcement
4.5Investigation
4.6Taxes
4.7Certain Deliveries
4.8Consents
4.9Releases
4.10 Real Property
4.11 Environmental
4.12 Ancillary Agreements
4.13 Reasonable Best Efforts
4.14 Negotiations
4.15 U.S. Government Contracts
4.16 NYSE Listing
4.17 [Intentionally omitted.]
4.18 Seller Debt
4.19 [Intentionally omitted.]
4.20 Product Liability Insurance
4.21 United Kingdom Assets
ARTICLE V
Conditions Precedent
5.1Conditions Precedent to Obligations of AlliedSignal
and Buyer
5.2Conditions Precedent to Obligations of Parent and
Sellers
ARTICLE VI
Certain Additional Covenants
6.1Expenses
6.2Maintenance of Books and Records
6.3[Intentionally omitted.]
6.4Non-Competition/Non-Solicitation
6.5Confidential Information
ARTICLE VII
Survival
7.1Survival
ARTICLE VIII
Employees And Employee Benefits
8.1Scope of Article
8.2U.S. Employees
ARTICLE IX
Termination; Miscellaneous
9.1Termination
9.2Further Assurances
9.3Entire Agreement; Amendments; Waivers
9.4Benefit; Assignment
9.5No Presumption
9.6Notices
9.7Terms Generally
9.8Counterparts; Headings
9.9Severability
9.10 No Reliance
9.11 Governing Law
9.12 Submission to
Jurisdiction; Waivers
9.13 Bulk Transfer
9.14 Use of Names
9.15 Relationship with Aerospace Agreement
9.16 Schedules
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of December 8, 1997,
by and among Banner Aerospace, Inc., a Delaware corporation
("Parent"), ▇▇ ▇▇▇▇▇▇▇ Aerospace, Inc., a Missouri corporation
("▇▇▇▇▇▇▇"), Banner Aerospace Services, Inc., an Ohio corporation
("BAS") (▇▇▇▇▇▇▇ and BAS each individually, a "Seller" and,
collectively, "Sellers"), AlliedSignal Inc., a Delaware
corporation ("AlliedSignal") and AS BAR PBH LLC, a Delaware
limited liability company ("Buyer").
▇▇▇▇▇▇▇ is engaged in, among other things, the business
of supplying to the aerospace industry (i) aircraft hardware
(including bearings, nuts, bolts, screws, rivets and other types
of fasteners) and (ii) related support services (including
Inventory management services) and the BTG of BAS is engaged in,
among other things, the business of management information
systems (collectively, the "Business").
Buyer desires to purchase, and AlliedSignal desires to
cause the purchase of, substantially all of the Assets of ▇▇▇▇▇▇▇
and all of the Assets of the BTG of BAS described on Schedule
2.6(a) (the "BTG Assets") relating to the Business, and Sellers
desire to sell and transfer, and Parent desires to cause the sale
and transfer of, such Assets to Buyer, all on the terms and
subject to the conditions set forth in this Agreement.
Except as otherwise expressly provided herein,
capitalized terms used herein without definition shall have the
meanings assigned to them in Annex A hereto, which is hereby
incorporated into this Agreement as if set forth in full herein.
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements contained
herein and intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE I
The Transaction
1.1 Purchase and Sale. Upon the terms and subject to
the conditions set forth in this Agreement, at the Closing, (i)
Sellers shall, and Parent shall cause Sellers to, sell, transfer,
convey, assign and deliver to Buyer, and Buyer shall purchase,
acquire and accept from the Sellers, all of Sellers' right, title
and interest in and to the Purchased Assets, and (ii) Buyer shall
pay to Sellers the Initial Purchase Price and Buyer shall assume,
and agree to thereafter pay, perform and discharge when due, the
Assumed Liabilities.
1.2 Acquisition of Assets.
(a) Subject to Section 1.2(b), "Purchased Assets"
means all of the Assets of Sellers owned, used or held for use in
connection with, or that are otherwise related to or required for
the conduct of, the Business, including, without limitation, all
of the Assets set forth below:
(i) all Owned Real Property;
(ii) all Equipment;
(iii) all Inventory;
(iv) all Accounts Receivable;
(v) all credits, prepaid expenses, deferred
charges, advance payments, security deposits and deposits
owned, used or held for use by either Seller with respect to
the Business ("Prepaid Expenses") to the extent that such
items will accrue to the benefit of Buyer immediately
following the Closing;
(vi) all Intellectual Property;
(vii) all Technology;
(viii) all Contracts;
(ix) all Permits;
(x) all books, records, ledgers, files, documents
(including originally executed copies of written Contracts,
customer and supplier lists (past, present or future),
correspondence, memoranda, forms, lists, plats,
architectural plans, drawings and specifications, copies of
documents evidencing Intellectual Property or Technology,
new product development materials, creative materials,
advertising and promotional materials, studies, reports,
sales and purchase correspondence, books of account and
records relating to the employees of the Business,
photographs, records of plant operations and materials used,
quality control records and procedures, equipment
maintenance records, manuals and warranty information,
research and development files, data and laboratory books,
inspection processes, in each case, whether in hard copy or
magnetic format, in each instance, to the extent used or
held for use with respect to the Business or the employees
of the Business;
(xi) all rights or choses in action arising out of
occurrences before or after the Closing Date and related to
any portion of the Business, including third party
warranties and guarantees and all related claims, credits,
rights of recovery and set-off and other similar contractual
rights, as to third parties held by or in favor of Sellers
and arising out of, resulting from or relating to the
Business or the Purchased Assets (collectively, "Third Party
Rights");
(xii) all rights to insurance and condemnation
proceeds relating to the damage, destruction, taking or
other impairment of the Purchased Assets which damage,
destruction, taking or other impairment occurs on or prior
to the Closing Date, except to the extent Buyer receives a
credit against the Initial Purchase Price pursuant to
Section 1.2(d)(i)(y) or 1.2(d)(ii)(y);
(xiii) all Assets that (A) are reflected on the
Balance Sheet (other than Assets reflected on the Balance
Sheet that are disposed of prior to the Closing Date in
accordance with this Agreement) or (B) have been or are
acquired by the Sellers after the date of the Balance Sheet
and would be reflected on a balance sheet for the Business
prepared on a basis consistent with that on which the
Balance Sheet was prepared (other than any such Assets that
are disposed of prior to the Closing Date in accordance with
this Agreement); and
(xiv) the Business and the goodwill thereof.
(b) Notwithstanding anything to the contrary contained
herein, Purchased Assets shall not include any Excluded Assets.
"Excluded Assets" means:
(i) cash and cash equivalents on hand or in bank
accounts;
(ii) all accounts owing between and among each
Seller and its Affiliates (including the Sellers under the
Aerospace Agreement) other than trade receivables;
(iii) except as otherwise set forth herein,
Assets attributable or related to any Plan;
(iv) all rights of Parent and each Seller under
this Agreement;
(v) all stock and minute books and similar
records of the Sellers;
(vi) all Third Party Rights arising out of Non-
Assumed Liabilities or Excluded Assets;
(vii) all Prepaid Expenses to the extent that
such items will not accrue to the benefit of Buyer
immediately following the Closing;
(viii) all Contracts pursuant to which any
business included in the Business or either Seller was
purchased (other than the DA Agreement);
(ix) all Plans of Sellers (including, without
limitation, those referenced on Schedule 2.20(a)(ii));
(x) all Contracts referenced on Schedule
2.8(a)(i) other than (i) the purchase orders described
thereon and (ii) distribution agreements with ▇▇▇▇▇▇▇▇▇
Fasteners that are terminable by the Sellers on not more
than 60 days notice without any penalty;
(xi) the Note for $226,000 payable to ▇▇▇▇▇▇▇
listed on Schedule 2.11(b); and
(xii) all rights of any Seller under the
Second Amended and Restated Credit Agreement dated as of
December 12, 1996, among Parent, Burbank Aircraft Supply,
Inc. and other Subsidiaries of Parent, Citicorp USA, Inc.
(as Administrative Agent and Arranger), NationsBank, N.A.
(as Co-Arranger) and the Institution as Lenders and Issuing
Banks thereunder.
(c) Nonassignable Rights. Anything in this Agreement
to the contrary notwithstanding, but subject to AlliedSignal's
and Buyer's rights under Section 7.2 of the Aerospace Agreement,
this Agreement shall not constitute an agreement to assign any of
the Contracts, Intellectual Property, Technology or Permits or
any claim or right or any benefit arising thereunder or resulting
therefrom if an attempted assignment thereof, without the consent
of a third Person thereto, would constitute a breach or other
contravention thereof or in any way adversely affect the rights
of Buyer thereunder. (Any Asset that, but for this Section
1.2(c) would be sold and assigned at the Closing shall remain a
"Purchased Asset" for purposes of this Agreement.) Parent and
Sellers will use all reasonable best efforts to obtain the
consent of the other parties to any such Contract or Permit for
the assignment thereof to Buyer and Buyer shall reasonably
cooperate with such efforts. If such consent is not obtained
prior to the Closing, or if an attempted assignment thereof would
be ineffective or would adversely affect the rights of Parent and
Sellers thereunder so that Buyer would not in fact receive all
such rights, subject to Section 5.1(d), the Closing shall
nevertheless take place and, thereafter, Parent, Sellers and
Buyer will cooperate in a mutually agreeable arrangement under
which Buyer would obtain the benefits and assume the obligations
thereunder (but only to the extent such obligations would have
constituted Assumed Liabilities if such assignment occurred on
the Closing Date) from and after the Closing Date in accordance
with this Agreement, including subcontracting, sublicensing or
subleasing to Buyer, or under which Parent and each Seller would
enforce for the benefit of Buyer, with Buyer assuming each
Seller's obligations to the same extent as if it would have
constituted an Assumed Liability and any and all rights of Parent
or any Seller against a third Person thereto. Parent and each
Seller will pay promptly to Buyer when received all monies
received by Parent or any Seller after the Closing Date under any
of the Contracts or any claim or right or any benefit arising
thereunder to the extent that Buyer would be entitled thereto
pursuant hereto. The provisions of this Section 1.2 shall in no
way limit the Closing condition set forth in Section 5.1(d).
(d) Damage; Condemnation.
(i) If, prior to the Closing, any Acquired Real
Property is damaged by fire, vandalism, acts of God, or
other casualty or cause (and such damage is not repaired by
the Closing), Buyer shall have the option of (x) accepting
such property as it is together with the insurance proceeds,
if any, and the right to receive the same, in which case no
adjustment shall be made in respect of the decreased value
of such Asset pursuant to Section 1.4(b), or (y) excluding
such Acquired Real Property from the Purchased Assets and
receiving a credit against the Initial Purchase Price equal
to the fair market value thereof, in which case no
adjustment shall be made in respect of the decreased value
of such Asset pursuant to Section 1.4(b) other than such
credit against the Initial Purchase Price. If Buyer elects
option (x) above, Parent hereby agrees to cooperate with
Buyer in any loss adjustment negotiations, legal actions and
agreements with the insurance company, and to assign
(pursuant to a writing in form satisfactory to Buyer,) to
Buyer at Closing its rights to such insurance proceeds (and
pay over to Buyer any such proceeds already received), and
Parent will not settle any insurance claims or legal actions
relating thereto without Buyer's prior written consent.
(ii) If, prior to the Closing, all or any portion
of any Acquired Real Property is taken by eminent domain,
Buyer shall have the option of (x) proceeding with the
Closing and accepting the property as affected by such
taking, together with all compensation and damages awarded,
if any, and the right to receive the same, in which case, no
adjustment shall be made in respect of the decreased value
of such Asset pursuant to Section 1.4(b), or (y) excluding
such Acquired Real Property from the Purchased Assets and
receiving credit against the Initial Purchase Price equal to
the fair market value thereof, in which case no adjustment
shall be made in respect of the decreased value of such
Asset pursuant to Section 1.4(b) other than such credit
against the Initial Purchase Price. If Buyer elects option
(x) above, Parent hereby agrees to assign to Buyer at
Closing its rights to such compensation and damages (and pay
over to Buyer any such compensation and damages already
received), and will not settle any proceedings relating to
such taking without Buyer's prior written consent.
(iii) Parent shall promptly notify
AlliedSignal of any material casualty or any actual or
threatened condemnation affecting all or any portion of any
Acquired Real Property. Any such notice relating to
casualty shall be accompanied by Parent's selection of an
architect or engineer to determine the cost of repair and/or
replacement.
(iv) Nothing in this Section 1.2(d) limits the
condition to Closing set forth in Section 5.1(a).
1.3 Assumption of Assumed Liabilities.
(a) "Assumed Liabilities" shall mean (i) all
Liabilities of the Business (including bank overdrafts, if any)
to the extent included on the Closing Date Balance Sheet, (ii)
Liabilities under the Contracts, Permits, Intellectual Property
or Technology to the extent (but not only to the extent) arising
from, and accruing with respect to, the operation of the Business
after the Closing, (iii) Liabilities relating to the employees of
the Business expressly assumed pursuant to Article VIII and (iv)
Liabilities under the DA Agreement.
(b) Notwithstanding anything to the contrary contained
herein, neither Buyer nor AlliedSignal shall assume or be bound
by, or be obligated or responsible for, any Non-Assumed
Liabilities. "Non-Assumed Liabilities" shall mean (x) all
Liabilities of Sellers relating to the Purchased Assets or the
Business and any claims in respect thereof, other than the
Assumed Liabilities, and (y) any Liabilities or claims which may
be asserted against or imposed upon Buyer by reason of its being
a successor or transferee of Sellers or as an acquiror of the
Purchased Assets or the Business or otherwise as a matter of law.
Without limitation of the foregoing, all of the following shall
be Non-Assumed Liabilities for the purposes of this Agreement:
(i) any product Liability, or Liability relating
to any toxic tort or similar claim for injury to person or
property, regardless of when made or asserted that arises
out of or is based upon any express or implied
representation, warranty, agreement or guarantee made by
either Seller or any of its Affiliates, or alleged to have
been made by any of such Persons, or that it is imposed or
asserted to be imposed by operation of law, in connection
with any service performed or product manufactured,
distributed or sold by or on behalf of either Seller or any
of its Affiliates or which arises out of any condition
existing as of the Closing, including any claim relating to
any product delivered, manufactured or distributed by either
Seller or any of its Affiliates and any claim seeking
recovery for consequential damages, lost revenue or income;
(ii) except for Assumed Tax Liabilities, any
Liability of Parent, DA or either Seller (including under
any Contract) for Taxes, including without limitation, any
(1) Tax payable (A) with respect to the Business, Assets or
operations of Parent or Sellers, (B) by any member of any
consolidated, affiliated or unitary group of which Parent or
either Seller is a member, or (C) by any other person for
whose Tax Parent or either Seller may be liable under
Contract or otherwise, and (2) Tax incident to or arising as
a consequence of the negotiation or consummation by Parent
or any Seller or any member of any affiliate group of which
Parent or Sellers is a member of this Agreement and the
transactions contemplated hereby;
(iii) except as expressly provided in clause
(iii) of the definition of Assumed Liabilities, any
Liability with respect to compensation or employee benefits
of any nature owed to any employees, agents or independent
contractors of either Seller or any of its Affiliates,
whether or not employed by Buyer after the Closing, or any
of their beneficiaries, heirs or assigns, that arises out of
or relates to events or conditions to the extent occurring
before the Closing, including, but not limited to,
Liabilities for supplemental unemployment benefits, vacation
pay, sick pay, severance benefits, Liabilities under any
Plan whether arising prior to, on or after the Closing Date,
Liabilities to provide any retiree benefits to former hourly
and/or salaried employees of the Business or any retiree
benefits to be provided to current hourly and/or salaried
employees of the Business, and any other benefits,
withholding tax Liabilities, workers compensation or
unemployment compensation premiums, hospitalization or
medical claims, occupational injury, disease or disability
claims or claims for discrimination, unfair labor practices,
violations of the collective bargaining agreements or
wrongful discharge;
(iv) Liabilities relating to the operation of the
Business prior to the Closing arising by operation of law
under any common law or statutory doctrine (including
successor Liability or de facto merger);
(v) any Liability with respect to or arising out
of any Contract (A) that is not capable of being assigned to
Buyer at the Closing (except to the extent provided in
Section 1.2(c)) (B) to the extent arising out of any breach
or default thereof by Parent or either Seller on or prior to
the Closing Date (including any event occurring on or prior
to the Closing Date that, with the passing of time or the
giving of notice, or both, would become a breach or default)
under any Contract, or (C) required by the terms thereof to
be discharged on or prior to the Closing Date;
(vi) any Liability of Parent or any of the Sellers
or any of their predecessors (including under any Contract)
with respect to any claim, action, suit or proceeding made
or threatened (whether prior to, at or after the Closing
Date) which asserts Losses arising from (x) the presence, at
any time prior to the Closing Date, of asbestos at the
Acquired Real Property, any other real property owned or
leased at any time by Parent, Sellers or any of their past,
present or future Subsidiaries or any other third-party
location or (y) the presence of asbestos in any product at
any time prior to the Closing Date manufactured, used, sold
or serviced by Parent, Sellers or any of their past, present
or future Subsidiaries, or which otherwise asserts any
asbestos-related personal injury or property damage.
(vii) any Liability to the extent the
existence of such Liability constitutes a breach of any
representation or warranty of Parent or any Seller contained
in or made pursuant to this Agreement;
(viii) any Environmental Liability, including,
without limitation, any Environmental Claim that relates to
or arises in connection with the Business, the Purchased
Assets, or any other Assets (including, but not limited to
facilities used for the off-site disposal of waste) formerly
owned, leased, operated or used by any of the Sellers or any
predecessors-in-interest to any of the Sellers, if the
Environmental Claim is based on any act or omission of the
Business or any of the Sellers on or prior to the Closing
Date;
(ix) any Liability in respect of the Excluded
Assets;
(x) any Debt or other amounts (except to the
extent reflected on the Closing Date Balance Sheet) owing by
the Sellers to Parent or any of Parent's Affiliates (other
than the Sellers) including, without limitation, any
negative balances in intercompany accounts, but excluding
any trade payables incurred in the ordinary course of
business consistent with past practice;
(xi) any Liability that arises out of or relates
to the employment or termination of employment of any
employees, agents or independent contractors by Parent,
Sellers or any of their Affiliates, except any such
Liability caused by Buyer's failure to perform its
obligations under Article VIII;
(xii) any Liability to past, present or future
stockholders of Parent or Sellers;
(xiii) any Liability that arises out of or
relates to any claim, action, suit, proceeding or
investigation, whether civil or criminal, pending or
threatened as of the Closing Date, relating to the conduct
or activities of the Business, or the ownership, use or
possession of the Acquired Assets, on or prior to the
Closing Date;
(xiv) any Liability relating to any broker's
or finder's fee or commission incurred by Parent, either
Seller or any of their Affiliates as a result of the
transactions contemplated hereunder;
(xv) any Liability arising under, resulting from
or relating to the matters referred to on
Schedule 2.20(a)(iii), including, without limitation, the
Plans described thereon;
(xvi) any Liability arising under, resulting
from, or relating to matters set forth on Schedule 2.8(a)(i)
(other than with respect to the purchase orders described
thereon and distributorship agreements with ▇▇▇▇▇▇▇▇▇
Fasteners that are terminable on not more than 60 days
notice without any penalty) including, without limitation,
the agreement with Shared Technologies ▇▇▇▇▇▇▇▇▇, Inc. and
the tax sharing agreement described thereon, except to the
extent reflected on the Closing Date Balance Sheet; and
(xvii) except for the Assumed Liabilities, any
Liability arising out of or relating to the conduct or
activities of the Business (including any predecessor
operations) or the ownership, use or possession of the
Purchased Assets on or prior to the Closing Date, any
Liabilities or claims arising out of or relating to events,
circumstances or conditions occurring on or before the
Closing Date, and any Liability associated with any other
business of Parent, Sellers and their Affiliates.
Parent and each Seller hereby irrevocably waives and releases,
and has caused the Parent Subsidiaries to waive and release,
AlliedSignal and Buyer from all Non-Assumed Liabilities,
including any Liabilities created or which arise by statute or
common law.
1.4 Initial Purchase Price. The initial purchase
price for the Purchased Assets to be paid at the Closing (the
"Initial Purchase Price") shall consist of a number of shares of
AlliedSignal Common Stock (the "Closing Date Shares") equal to
the number (rounded to the nearest whole share) (the "Estimated
Share Number") obtained by dividing (A) an amount equal to Twenty
Two Million Seven Hundred Seventy-Four Thousand Dollars
($22,774,000) plus (x) the ▇▇▇▇▇▇▇ Adjustment Amount if the
▇▇▇▇▇▇▇ Adjustment Amount is a positive number and minus (y) the
▇▇▇▇▇▇▇ Adjustment Amount if the ▇▇▇▇▇▇▇ Adjustment Amount is a
negative number, by (B) the Average Trading Price as of the
Closing Date, to be issued by Buyer to Sellers in the proportions
set forth on Annex 1.4 hereto. The Initial Purchase Price shall
be adjusted as provided in Section 1.6(f) and Section 9.15 of the
Aerospace Agreement.
1.5 Escrow of Shares. At the Closing, AlliedSignal
shall issue and deliver to the Escrow Agent (i) the Purchase
Price Escrow Shares, to be held in an escrow account pursuant to
the terms of the Escrow Agreement until released from escrow
pursuant to the terms of Section 1.6(f) of the Aerospace
Agreement, and (ii) the Indemnification Escrow Shares, to be held
in an escrow account pursuant to the terms of the Escrow
Agreement until released as set forth in Section 1.5(b) or (d) of
the Aerospace Agreement.
1.6 Closing.
(a) Closing Date. The closing of the transactions
contemplated under this Agreement (the "Closing") shall take
place at 10:00 a.m. Eastern Time at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& ▇▇▇▇ LLP, One Battery Park Plaza, New York, New York, on the
fifth Business Day after all conditions to the obligations of the
parties under Article V and under Article V of the Aerospace
Agreement shall have been satisfied or waived (other than those
requiring a delivery of a certificate or other document, or the
taking of other action, at the Closing and the conditions set
forth in Sections 5.1(g) and 5.2 (g) and in Sections 5.1(j) and
5.2(g) of the Aerospace Agreement), or at such other place and on
such other date as the parties may mutually agree in writing
(such date on which the Closing occurs hereinafter is referred to
as the "Closing Date"). Each of the parties acknowledges that,
with respect to the Closing Date, time is of the essence.
(b) Effectiveness. The consummation of the
transactions contemplated by this Agreement and the Closing shall
be deemed to take place at 11:59 p.m., Eastern Time, on the
Closing Date and no transaction shall be deemed to have been
completed and no document or certificate shall be deemed to have
been delivered until all transactions are completed and all
documents are delivered.
1.7 Deliveries and Proceedings at the Closing.
Subject to the terms and conditions of this Agreement, at the
Closing:
(a) Deliveries to AlliedSignal and Buyer. Parent and
Sellers shall deliver to AlliedSignal and Buyer:
(i) bills of sale and instruments of assignment,
in forms reasonably satisfactory to Buyer, to evidence the
transfer to Buyer of the Purchased Assets (other than the
Owned Real Property) in accordance herewith, duly executed
by Sellers;
(ii) any consents to transfer of all transferable
or assignable Contracts and Permits obtained by Parent and
the Sellers as of Closing and all consents referred to in
Section 5.1(d);
(iii) title certificates to any motor vehicles
included in the Purchased Assets, duly executed by each
Seller with any interest therein (together with any other
transfer forms necessary to transfer title to such
vehicles);
(iv) one or more deeds of conveyance to Buyer of
the Owned Real Property, in forms reasonably satisfactory to
Buyer, sufficient to transfer to Buyer good and marketable,
and insurable, fee simple title to the Owned Real Property
included in the Purchased Assets in accordance herewith,
duly executed and acknowledged by each Seller with any
interest therein and in recordable form;
(v) one or more title insurance policies, in
form, substance and amount, and issued by title insurance
Sellers reasonably acceptable to Buyer, and containing such
endorsements and affirmative coverage as Buyer shall
reasonably request, insuring Buyer's fee simple title to the
Owned Real Property subject only to the Permitted Liens, the
cost of which shall be paid 50% by Parent and Sellers and
50% by AlliedSignal and Buyer;
(vi) U.C.C. termination statements in recordable
form and other appropriate releases, in form and substance
reasonably satisfactory to Buyer, with respect to all
recorded Liens in the Purchased Assets;
(vii) the Foreign Investment in Real Property
Tax Act Certification and Affidavit for each parcel of Owned
Real Property, in form reasonably satisfactory to Buyer,
duly executed by each Seller transferring Owned Real
Property (the "FIRPTA Affidavit");
(viii) the certificates and other documents
required to be delivered by Parent and Sellers pursuant to
Section 5.1 and certified resolutions evidencing the
authority of Parent and Sellers as set forth in Section 2.3;
(ix) all such other documents and instruments of
conveyance as shall, in the reasonable opinion of Buyer, be
necessary to transfer to Buyer the Purchased Assets in
accordance herewith and, where necessary or desirable, in
recordable form.
(b) Deliveries to Parent and Sellers. AlliedSignal
and Buyer will deliver to Parent and Sellers, as applicable:
(i) the Closing Date Shares, issued and delivered
to Sellers in the proportions set forth in Annex 1.4 hereto;
(ii) an assumption agreement, in form reasonably
satisfactory to Parent, to evidence the assumption by Buyer
of the Assumed Liabilities in accordance with Section 1.3,
duly executed by Buyer;
(iii) the certificates and other documents
required to be delivered by AlliedSignal and Buyer pursuant
to Section 5.2 and certified resolutions evidencing the
authority of AlliedSignal and Buyer as set forth in
Section 3.2; and
(iv) all such other documents and instruments of
assumption as shall, in the reasonable opinion of Parent, be
necessary for Buyer to assume the Assumed Liabilities in
accordance herewith.
1.8 Stock Legend. Each certificate representing the
shares of AlliedSignal Common Stock issued to Sellers at the
Closing shall be endorsed with a legend in substantially the
following form:
THE SECURITIES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT
COVERING SUCH SECURITIES, THE TRANSFER IS
MADE IN COMPLIANCE WITH RULE 144
PROMULGATED UNDER SUCH ACT OR THE
CORPORATION RECEIVES AN OPINION OF COUNSEL
FOR THE HOLDERS OF THESE SECURITIES
REASONABLY SATISFACTORY TO THE CORPORATION
STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENT OF SUCH ACT.
ARTICLE II
Representations And Warranties Of Parent And Sellers
Parent and each Seller hereby jointly and severally
represent and warrant to AlliedSignal and Buyer as follows:
2.1 Qualification. Parent is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware. Each Seller is a corporation duly
organized, validly existing and in good standing under the laws
of the jurisdiction set forth next to such Seller's name on
Annex B, and has all requisite corporate power and authority to
own and lease its Assets and to conduct its Business as presently
being conducted. Each Seller is qualified to do business and is
in good standing as a foreign corporation in all jurisdictions
wherein the nature of its Business or such Seller's ownership or
use of its Assets make such qualification necessary, except such
failures to be qualified or to be in good standing, if any, which
when taken together with all such other failures of such Seller
would not have a Material Adverse Effect on such Seller. Neither
of the Sellers is currently insolvent, has suspended payments, is
subject to any judicial receivership or liquidation proceedings
or is in bankruptcy, nor has any such similar proceedings been
commenced with respect to either of them.
2.2 Ownership of the Sellers.
(a) All of the outstanding shares of capital stock of
(or other ownership interests in) ▇▇▇▇▇▇▇ are owned of record and
beneficially solely by DA and all of the outstanding shares of
capital stock of (or other ownership interests in) BAS are owned
of record and beneficially solely by Parent, in each case, free
and clear of any Liens. There are no options, warrants, calls,
rights or agreements to which Parent, DA or either Seller is a
party obligating any of them to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares of capital
stock of (or other ownership interests in) either Seller or
obligating Parent, DA or either Seller to grant, extend or enter
into any such option, warrant, call, right or agreement.
(b) Except as set forth on Schedule 2.2, neither of
the Sellers owns any shares of capital stock of (or other
ownership interests in) any other Person, including any joint
venture.
2.3 Authorization and Enforceability. With respect to
each of Parent and the Sellers: (a) such entity has full
corporate power and authority to execute, deliver and perform
this Agreement and all other agreements, instruments and
documents to be executed in connection herewith (such other
agreements and instruments being hereinafter referred to
collectively as the "Transaction Documents") to which such entity
is a party, (b) the execution, delivery and performance by such
entity of this Agreement and the Transaction Documents to which
such entity is a party have been duly authorized by all necessary
corporate action on the part of such entity and no approval by
the holders of any security issued by Parent is required in
connection therewith, (c) this Agreement has been duly executed
and delivered by such entity, and, as of the Closing Date, the
other Transaction Documents to which any such entity is a party
will be duly executed and delivered by such entity, (d) this
Agreement is a legal, valid and binding obligation of such
entity, enforceable against such entity in accordance with its
terms, and (e) as of the Closing Date, each of the other
Transaction Documents to which such entity is a party will
constitute the legal, valid and binding obligations of such
entity, enforceable against such entity in accordance with its
terms.
2.4 No Violation of Laws or Agreements. The
execution, delivery, and performance by Parent and each Seller of
this Agreement and the Transaction Documents to which such
entities (as applicable) are parties do not, and the consummation
by Parent and each Seller (as applicable) of the transactions
contemplated hereby and thereby, will not, (a) contravene any
provision of the charter, bylaws or any other organizational
documents of Parent or either Seller, or (b) except as set forth
on Schedule 2.4 and subject, in the case of clause (i) below, to
such exceptions as would not in the aggregate have a Material
Adverse Effect, violate, conflict with, result in a breach of, or
constitute a default (or an event which would, with the passage
of time or the giving of notice or both, constitute a default)
under, or result in or permit the termination, modification,
acceleration, or cancellation of, or result in the creation or
imposition of any Lien of any nature whatsoever upon any of the
Purchased Assets or give to others any interests or rights
therein under, (i) any personal property lease with payments in
excess of $50,000 per year, lease of Real Property, indenture,
mortgage, loan or credit agreement, license, instrument,
contract, plan, permit or other agreement or commitment, oral or
written, to which Parent or either Seller is a party, other than
such agreements or commitments involving any customer or supplier
of the Business (including any supplier of Intellectual
Property), or by which the Business or any of the Purchased
Assets may be bound or affected (including without limitation any
agreement or instrument pertaining to Debt), or (ii) any
judgment, injunction, writ, award, decree, restriction, ruling,
or order of any arbitrator or Governmental Entity or any
applicable Law to which Parent, either Seller or the Purchased
Assets is subject.
2.5 Consents. Except (i) as set forth on Schedule 2.5
or (ii) for agreements or commitments involving any customer or
supplier of the Business (including any supplier of Intellectual
Property), no consent, approval or authorization of, or
registration or filing with, any Person (governmental or private)
is required in connection with the execution, delivery and
performance by Parent or either Seller of this Agreement, the
other Transaction Documents to which Parent or either Seller is a
party, or the consummation by Parent and each Seller (as
applicable) of the transactions contemplated hereby or thereby,
including without limitation in connection with the assignment of
the Contracts and Permits contemplated hereby, except as required
by the HSR Act and except for any required consent, approval or
authorization of, or registration or filing with a foreign
governmental authority.
2.6 Financial Statements.
(a) Schedule 2.6(a) sets forth (i) an unaudited
combined pro forma balance sheet of the Combined Business as of
September 30, 1997 (the "Balance Sheet") and related unaudited
combined pro forma statement of income of the Combined Business
for the six months ended September 30, 1997 (together with the
Balance Sheet, the "Financial Statements"). The Excluded Assets,
the Aerospace Excluded Assets, the Non-Assumed Liabilities and
the Aerospace Non-Assumed Liabilities are excluded from the
Balance Sheet. The Financial Statements are in accordance with
the books and records of the Sellers and the Sellers under the
Aerospace Agreement and except for the Excluded Assets, the
Aerospace Excluded Assets, the Non-Assumed Liabilities, the
Aerospace Non-Assumed Liabilities and as set forth in Schedule
2.6(a) fairly present the financial position and results of
operations of the Combined Business on a stand-alone basis as of
the date and for the period indicated, in conformity with GAAP
throughout the period specified and in accordance with the
procedures and criteria set forth on Schedule 1.6(a), except as
expressly set forth therein and except that the Financial
Statements may omit notes and are subject to normal year-end
adjustments which are not, in the aggregate, material. Except as
described on Schedule 2.6(a), all fees, charges, costs and
expenses associated with the ownership, leasing, operation,
maintenance and management of the Combined Business and the
Assets owned, used or held for use by the Combined Business have
been fully and properly reflected and charged on the Financial
Statements in accordance with GAAP (to the extent such items are
required to be so reflected and charged in accordance with GAAP).
All Purchased Assets, Assumed Liabilities, Aerospace Acquired
Assets and Aerospace Assumed Liabilities are disclosed on or
reflected in the Balance Sheet except (i) as disclosed on
Schedule 2.6(a), and (ii) as disposed of or transferred between
September 30, 1997 and the Closing Date in the ordinary course of
business consistent with past practice and in accordance with
this Agreement.
(b) The future tax benefits set forth in the Balance
Sheet as of the date hereof represent future tax benefits as of
March 31, 1997. No later than 30 days after the date hereof,
Parent shall deliver written notice to AlliedSignal of the amount
of future tax benefits as of September 30, 1997, and the Balance
Sheet shall be adjusted accordingly.
2.7 No Changes. Since September 30, 1997, the Sellers
have conducted the Business only in the ordinary course of
business consistent with past practice and, except as set forth
on Schedule 2.7, there has not been:
(a) any Material Adverse Effect;
(b) any change in the salaries or other
compensation payable or to become payable to, or any advance
(excluding advances for ordinary business expenses) or loan
to, any employee of the Business, or material change or
material addition to, or material modification of, other
benefits (including any bonus, profit-sharing, pension or
other plan in which any of the employees of the Business
participate) to which any of the employees of the Business
may be entitled, other than in the ordinary course of the
Business consistent with past practice;
(c) any material change or modification in any
manner of the Sellers' existing Inventory management and
collection and payment policies, procedures and practices
with respect to Inventory and accounts receivable and
accounts payable, respectively, of the Business,
acceleration of payment of payables or failure to pay or
delay in payment of payables and any change in the Sellers'
existing policies, procedures and practices, with respect to
the provision of discounts, rebates or allowances insofar as
they relate to the Business;
(d) any cancellation or waiver by either Seller
of any right material to the Business or any cancellation or
waiver of any material Debts of or claims of the Business
against Parent or any other Affiliate of any Seller or any
disposition of or failure to keep in effect any rights in,
to or for the use of any Permit material to the Business;
(e) any damage, destruction or loss, or eminent
domain or other condemnation proceeding affecting the
Business which individually or in the aggregate has had a
Material Adverse Effect, whether or not covered by
insurance;
(f) any change by either Seller in its method of
accounting or keeping its books of account or accounting
practices with respect to the Business except as required by
GAAP;
(g) any acquisition, sale, transfer or other
disposition of any material Assets of the Business other
than the disposition of (i) Inventory in the ordinary course
of the Business consistent with past practice or (ii) Assets
not used or useful in the Business;
(h) any commencement or termination of any line
of business;
(i) any action that would be prohibited to be
taken after the date of this Agreement under Section 4.1(c);
or
(j) any agreement in writing or otherwise to take
any of the foregoing actions.
2.8 Contracts.
(a) As of the date of this Agreement, Schedule 2.8(a)
contains a true, correct and complete list of (i) all Contracts
(other than any guarantee of either Seller that does not directly
or indirectly support or benefit the Business) to which Parent or
any of its Affiliates (other than the Sellers) is a party or
which benefit Parent or any of its Affiliates (other than the
Sellers); (ii) all Contracts under which either Seller is a
licensee or licensor of Intellectual Property or Technology which
are material to the Business; (iii) all Contracts under which
either Seller is a lessee or lessor of (or has an obligation to
lease) Real Property; (iv) all Contracts providing for the
formation or operation of a partnership or other joint venture;
(v) all material Contracts which afford customers any right to
return Inventories at the option of the customer; (vi) all
Government Contracts with a backlog in excess of $100,000;
(vii) all Contracts requiring forward stocking locations; and
(viii) except for agreements or commitments involving any
customer or supplier of the Business (including any supplier of
Intellectual Property), all other Contracts (other than with
respect to which the Business' total annual Liability or expense
is less than $1,000,000 per such non-listed Contract). Parent
and Sellers have made available to AlliedSignal a correct and
complete copy of each written agreement.
(b) Except as set forth on Part A of Schedule 2.8(b),
with respect to each Contract described in Schedule 2.8(a),
neither Seller nor, to the best of Parent's and each Seller's
knowledge, any other party thereto, is in material breach or
default and no event has occurred which with notice or lapse of
time would constitute a material breach or default, or permit
termination, modification, or acceleration, under such Contract.
Except as set forth on Part B of Schedule 2.8(b), there are no
disputes pending or, to the best of Parent's and each Seller's
knowledge, threatened, under or in respect of any of the
Contracts described in Schedule 2.8(a) and no counterparty to any
such Contract has given notice to either Seller or any Affiliate
thereof with respect to any material breach or default hereunder.
Each of the Contracts described in Schedule 2.8(a) is in full
force and effect and constitutes the legal and binding obligation
of, and is legally enforceable against, such Seller as the
Contracts relate, and, to the best of Parent's and each Seller's
knowledge, any other party thereto, in accordance with its terms.
(c) Except as identified with an asterisk on
Schedule 2.8(a), each of the Contracts listed thereon is fully
assignable to Buyer without the consent, approval or waiver of
any other Person. None of such Contracts contains any provision
which, after the Closing, will restrict Buyer from conducting any
portion of the Business in any jurisdiction, except such
Contracts which may be terminated by Buyer without penalty or
Liability on no more than 30 days' notice. With respect to those
Contracts that were assigned, novated or subleased to either
Seller by a third party, all necessary consents to such
assignments, novations or subleases have been obtained.
(d) Subject to such exceptions as would not in the
aggregate have a Material Adverse Effect, with respect to each
and every Government Contract that has a backlog in excess of
$100,000 or binding or non-binding bid for such a Government
Contract ("Bid") to which either Seller is a party: (i) such
Seller has fully complied with all material terms and conditions
of such Government Contract or Bid, including all clauses,
provisions and requirements incorporated expressly, by reference
or by operation of law therein; (ii) such Seller has fully
complied with all requirements of Law applicable to such
Government Contract or Bid and no Government Contract is subject
to any adjustment in price as a result of a claim by the U.S.
Government or U.S. Government prime contractor or subcontractor
on the basis of (w) defective pricing pursuant to FAR 52.215-22,
FAR 52.215-23, FAR 52.215-24, FAR 52.215-25, (x) CAS violations
pursuant to FAR 52.230-2, (y) any submission for progress
payments of invoices or (z) any claims arising out of or related
to the Government Contracts occurring on or before the Closing
Date; (iii) all representations and certifications executed,
acknowledged or set forth in or pertaining to such Government
Contract or bid for a Government Contract were current, accurate
and complete as of their effective date, and such Seller has
fully complied with all such representations and certifications;
(iv) neither the U.S. Government nor any prime contractor,
subcontractor or other Person has notified such Seller, either
orally or in writing, that such Seller has breached or violated
any Law, certification, representation, clause, provision or
requirement, (v) no termination for convenience, termination for
default, cure notice or show cause notice has been issued;
(vi) no cost incurred by such Seller has been questioned or
disallowed; and (vii) no money due to such Seller has been (or
has attempted to be) withheld or set off.
2.9 Permits and Compliance With Laws Generally.
(a) Subject to such exceptions as would not in the
aggregate have a Material Adverse Effect, (i) except as set forth
on Part A of Schedule 2.9(a), the Sellers possess and are in
compliance with all Permits required to operate the Business as
presently operated and to own, lease or otherwise hold the
Purchased Assets under all applicable Laws and (ii) except as set
forth on Part B of Schedule 2.9(a), to the best of Parent's and
each Seller's knowledge, the Business is conducted by the Sellers
in compliance with, and the use, construction and operation of
all Real Property constituting any part of the Purchased Assets
conforms to, all applicable Laws (including the Occupational
Safety and Health Act and the rules and regulations thereunder
("OSHA") and other similar Laws, and zoning, building and other
similar Laws) and all restrictions and conditions affecting
title. All material Permits of the Sellers are in full force and
effect. There are no proceedings pending or, to the best of
Parent's and each Seller's knowledge, threatened that seek the
revocation, cancellation, suspension or any adverse modification
of any material Permits presently possessed by the Sellers.
Parent and Sellers are aware of no facts, conditions or
circumstances reasonably likely to result in the revocation,
cancellation, suspension, or adverse modification of any material
Permit. Except as set forth on Part C of Schedule 2.9(a), all
material Permits of the Sellers are assignable to and at the
Closing will be assigned to Buyer and no approvals or consents
are required for such assignment (or continued possession) and
the sale of the Business or Purchased Assets hereunder will not
result in a default under or termination of any such material
Permit.
(b) Except as set forth on Schedule 2.9(b), no
outstanding notice, citation, summons or order has been issued,
no outstanding complaint has been filed, no outstanding penalty
has been assessed and no investigation or review is pending or,
to the best of Parent's and each Seller's knowledge, threatened,
by any Governmental Entity or other Person with respect to any
alleged (i) violation by either Seller relating to the Business
or the Purchased Assets of any Law or (ii) failure by either
Seller to have any Permit required in connection with the conduct
of the Business or otherwise applicable to the Business
(including the Purchased Assets) except in such cases as would
not in the aggregate have a Material Adverse Effect.
2.10 Environmental Matters. As of the Closing Date,
except as set forth on Schedule 2.10,
(a) There are no reports in Parent's, the Sellers' or
any of their respective Affiliates' possession or control of
environmental site assessments or audits of the Business, the
Purchased Assets or any other Assets (including but not limited
to facilities used for the off-site disposal of waste) formerly
owned, leased, operated or used by the Sellers, or any
predecessor-in-interest to the Sellers.
(b) The Sellers possess and are in compliance with all
Environmental Permits required to operate the Business as
presently operated and to own, lease or otherwise hold the
Purchased Assets under all Environmental Laws. The operations of
the Business and Purchased Assets (including the use,
construction and operation of all Real Property constituting any
part of the Purchased Assets) are in compliance with all
Environmental Laws and are conducted in a manner that does not
pose a risk to the safety or health of workers or other
individuals or to the environment. All Environmental Permits of
the Sellers relating to the operation of the Business are in full
force and effect. There are no proceedings pending or, to the
best of Parent's and each Seller's knowledge, threatened that
seek the revocation, cancellation, suspension or any adverse
modification of any such Environmental Permits presently
possessed by the Sellers. Parent and Sellers are aware of no
facts, conditions or circumstances reasonably likely to result in
the revocation, cancellation, suspension or adverse modification
of any Environmental Permits.
(c) There are no environmental conditions with respect
to the Business, Purchased Assets or any other Assets (including
but not limited to facilities used for the off-site disposal of
waste) formerly owned, leased, operated or used by either of the
Sellers, or any predecessor-in-interest to either of the Sellers
that (i) pose a risk to human health or the environment, or (ii)
are otherwise required to be remediated under applicable
Environmental Laws due to evidence of soil or groundwater
contamination on, under or migrating onto or from the Business,
Purchased Assets or any such other Assets.
(d) There are no Environmental Claims currently
pending nor has Parent, either of the Sellers or any of their
respective Affiliates received any notice of an Environmental
Claim with respect to the Business, the Purchased Assets, or any
other Assets (including, but not limited to, facilities used for
the off-site disposal of waste) formerly owned, leased, operated
or used by the Sellers or any predecessors-in-interest to the
Sellers that a Hazardous Material has been (i) disposed,
released, or discharged or (ii) produced, stored, handled, used
or emitted onto, under, or from the Business, Purchased Assets or
any such other Assets.
(e) Neither the Business nor the Purchased Assets are
subject to the requirements of any Laws that condition, restrict,
prohibit or require notification or disclosure upon the transfer,
sale, lease or closure of certain property for environmental
reasons.
(f) No outstanding notice, citation, summons or order
has been issued, no outstanding complaint has been filed, no
outstanding penalty has been assessed and no investigation or
review is pending or, to the best of Parent's and each Seller's
knowledge, threatened, by any Governmental Entity or other Person
with respect to any alleged (i) violation by either of the
Sellers or any of its Affiliates relating to the Business or the
Purchased Assets of any Environmental Law or (ii) failure by
either of the Sellers or any of its Affiliates to have any
Environmental Permit required in connection with the conduct of
the Business or otherwise applicable to the Business (including
the Purchased Assets).
2.11 Transactions with Affiliates
(a) Set forth on Schedule 2.11(a) is a true, correct
and complete list and description of (a) all services and other
support provided to the Business by Parent and its Affiliates
(other than the Sellers) since April 1, 1996, (b) all other
overhead charges allocated to the Sellers since April 1, 1996,
and (c) all other transactions between one or more Sellers, on
the one hand, and Parent or any of its Affiliates (other than the
Sellers), on the other hand, since April 1, 1996 (other than
payment of compensation or other benefits to employees).
(b) To the best of Parent's and each Seller's
knowledge, except as set forth on Schedule 2.11(b), (i) as of the
Closing, no employee, officer or director (or any member of his
or her immediate family) of Parent or of either Seller or any of
their Affiliates will be indebted to either Seller, nor is either
Seller indebted (or committed to make loans or extend or
guarantee credit) to any of such individuals, (ii) no such
individual, except ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and any such
individual whose position is with ▇▇▇▇▇▇▇▇▇ or any of its
Affiliates (other than Parent or either of the Sellers) has any
direct or indirect ownership interest in any Person with which
either Seller has a business relationship, or any Person that
competes with either Seller and (iii) no member of the immediate
family of any officer or director of either Seller is an
interested party with respect to any Contract.
2.12 Title. The Sellers have, and at the Closing will
transfer to the Buyer, good and marketable title to all personal
property owned by them respectively, good and marketable title to
all Owned Real Property, valid and enforceable leasehold
interests in Leased Real Property and personal property leased by
them, and good and valid title to or rights to use, all
intangible properties and rights used by them, in each case free
and clear of all Liens, except Permitted Liens.
2.13 Acquired Real Property.
(a) Part A of Schedule 2.13(a) sets forth a true,
correct and complete list and legal descriptions of all Real
Property owned (beneficially or of record) by either of the
Sellers in the conduct of the Business, and Part B of
Schedule 2.13(a) sets forth a true, correct and complete list of
all Real Property leased by either of the Sellers in the conduct
of the Business, and in each case identifies the street address
thereof.
(b) Except in such cases as would not in the aggregate
have a Material Adverse Effect, all structures and other
improvements on such properties are within the lot lines and do
not encroach on the properties of any other Person (and
improvements on adjacent Real Property do not encroach on any of
the Real Property constituting any part of the Purchased Assets),
and the use, construction and operation of all Real Property
constituting any part of the Purchased Assets or otherwise owned
or leased by the Sellers in the conduct of the Business conform
to all applicable building, zoning, safety, environmental and
other Laws, permits, licenses and certificates and all
restrictions and conditions affecting title.
(c) Other than as set forth on of Schedule 2.13(c),
there are no leases, subleases, options or other agreements,
written or oral, granting to any Person (other than the Sellers)
the right to purchase, use or occupy the Acquired Real Property
or any portion thereof. None of Parent, the Sellers and any of
their respective Affiliates has received any written or oral
notice or order by any Governmental Entity, any insurance company
which has issued a policy with respect to any of such properties
or any board of fire underwriters or other body exercising
similar functions which (i) relates to violations of building,
safety, fire or other ordinances or regulations, (ii) claims any
defect or deficiency with respect to any of such properties or
(iii) requests the performance of any repairs, alterations or
other work to or in any of such properties or in the streets
bounding the same, except such as would not individually or in
the aggregate have a Material Adverse Effect. Parent and Sellers
have made available to Buyer true, correct and complete copies of
all leases and financing documents affecting all or any portion
of the Acquired Real Property.
(d) None of Parent, the Sellers and any of their
respective Affiliates has received any written or oral notice for
assessments for public improvements against the Acquired Real
Property which remains unpaid, and, to the best of Parent's and
each Seller's knowledge, no such assessment has been proposed.
Except as set forth on Schedule 2.13(d), there is no pending
condemnation, expropriation, eminent domain or similar proceeding
affecting all or any portion of any of the Acquired Real Property
and, to the best of Parent's and each Seller's knowledge, no such
proceeding is threatened.
(e) Except as set forth on Schedule 2.13(e), no Person
other than a Seller is in possession of (or has any right,
absolute or contingent, to possess which is superior to such
Seller's right to possess) all or any portion of the Acquired
Real Property.
(f) Except as set forth on Schedule 2.13(f), all
Acquired Real Property has direct and unrestricted access over
currently utilized facilities and land to such public roads,
owned roads and driveways presently in use, and such utilities
and other services, as are necessary for the uses thereof and the
conduct of the Business, and neither Seller nor any other Person
has applied for any change in the zoning or land use
classification of any such Real Property.
(g) Except as set forth on Part A of Schedule 2.13(g),
the Acquired Real Property has adequate arrangements for supplies
of water, electricity, gas and/or oil for all operations at the
1996 or current operating levels, whichever is greater. Except
as set forth on Part B of Schedule 2.13(g), there are no actions
or proceedings pending or, to the best of Parent's and each
Seller's knowledge, threatened that would adversely affect the
supply of water, electricity, gas and/or oil to the Acquired Real
Property except for those which individually and in the aggregate
would not have a Material Adverse Effect.
2.14 Taxes.
(a) Parent and each Seller has (i) timely filed all
returns and reports for Taxes, including information returns,
that are required to have been filed in connection with, relating
to, or arising out of the Business or the Purchased Assets, (ii)
paid to the appropriate Tax Authority all Taxes that are shown to
have come due pursuant to such returns or reports and (iii) paid
to the appropriate Tax Authority all other Taxes not required to
be reported on returns in connection with, relating to, or
arising out of, or imposed on the property of the Business for
which a notice of assessment or demand for payment has been
received or which have otherwise become due except for Taxes
being properly contested in good faith.
(b) All such returns or reports were complete and
accurate in all material respects at the time of filing and such
returns which have not been audited do not contain a disclosure
statement under Code Section 6662 (or any predecessor provision
or comparable provision of any Law).
(c) There are no unpaid Taxes with respect to any
period ending on or before the Closing Date which are or could
give rise to a lien on the Purchased Assets or the Business,
except for current Taxes not yet due and payable.
(d) Except as set forth on Schedule 2.14(d), (i) there
are no pending audits or, to the best of Parent's and each
Seller's knowledge, threatened audits or assessments relating to
Taxes with respect to the Business or the Purchased Assets and
(ii) there is no unassessed Tax deficiency proposed or to the
best of Parent and each Seller's knowledge threatened against
Parent or any Seller relating to or affecting the Purchased
Assets or the Business, nor is any action or proceeding pending,
or to the best of Parent's and each Seller's knowledge,
threatened by any Governmental Entity for assessment,
reassessment or collection of Taxes.
(e) Except as set forth on Schedule 2.14(e), none of
the Purchased Assets (i) is property that is required to be
treated as owned by another Person pursuant to the "safe harbor
lease" provisions of former Section 168(f)(8) of the Code, (ii)
is "tax-exempt use property" within the meaning of Code Section
168(h) or (iii) directly or indirectly secures any Debt the
interest on which is tax-exempt under Code Section 103(a).
(f) Except as set forth on Schedule 2.14(f), neither
Seller has agreed to make, or is required to make, any adjustment
under Code Section 263A or 481(a) or any comparable provision of
state or foreign Tax Laws by reason of a change in accounting
method or otherwise and neither Seller has changed a method of
accounting or Inventory method, made or changed a tax election,
or otherwise taken any action which is not in accordance with
past practice that could accelerate a tax deduction from a period
after the Closing Date to a period before the Closing Date or
defer income from a period before the Closing Date to a period
after the Closing Date.
(g) Except as set forth on Schedule 2.14(g), neither
Seller is a party to any agreement, contract, arrangement or plan
that has resulted or would or could result, separately or in the
aggregate, in connection with this Agreement or any change of
control of the Seller, in the payment of any "excess parachute
payment" within the meaning of Code Section 280G.
(h) The amount of the reserves for value-added Taxes,
real property Taxes, property Taxes and payroll Taxes reflected
on the Closing Date Balance Sheet will be adequate to pay all
Assumed Tax Liabilities.
2.15 Intellectual Property and Technology.
(a) Schedule 2.15(a) contains a true, correct and
complete list of all patents, trademarks, trade names, service
marks and applications for the foregoing owned, used or held for
use by either Seller with respect to the Business, except for
matters listed on Schedule 2.15(b).
(b) Schedule 2.15(b) contains a true, correct and
complete list of all Intellectual Property which has been
registered in, filed in or issued by the PTO, the United States
Copyright Office, any state trademark offices and the patent,
trademark, copyright and other corresponding offices of foreign
jurisdictions. All such registrations have been duly filed,
registered and issued and are in full force and effect.
(c) Except as set forth on Schedule 2.15(c), Section 8
and 15 declarations and applications for renewal with respect to
all U.S. registered trademarks and service marks listed in
Schedule 2.15(b) were timely filed in and accepted by the PTO.
No trademarks or service marks listed in Schedule 2.15(b) have
been abandoned.
(d) Schedule 2.15(d) sets forth all licenses or other
agreements from or with third Persons under which either Seller
uses or exercises any rights with respect to any of the
Intellectual Property or Technology other than such licenses or
other agreements that involve payments of no more than $25,000
per year ("Small Licenses"). At the Closing, Sellers will
transfer to Buyer all Intellectual Property and Technology
without payment of royalties, free and clear of any Liens.
(e) Except (i) as set forth on Schedule 2.15(e) or
(ii) with respect to Small Licenses, the Sellers (as applicable)
are the sole and exclusive owners of the Intellectual Property
and Technology, free and clear of any Liens.
(f) Except as set forth on Schedule 2.15(f), neither
Seller has received (and Parent and Sellers have no knowledge of)
any written notice from any other Person pertaining to or
challenging the right of either Seller (or any other Person) to
use any of the Intellectual Property or any Technology, and there
is no interference, opposition, cancellation, reexamination or
other contest proceeding, administrative or judicial, pending or
threatened with respect to any Intellectual Property or
Technology.
(g) Except as set forth on Schedule 2.15(g), no
licenses have been granted by either Seller and neither Seller
has any obligation to grant licenses with respect to any
Intellectual Property or Technology. No written claims have been
made by either Seller of any violation or infringement by others
of rights with respect to any Intellectual Property or
Technology, and neither Parent nor Sellers know of any basis for
the making of any such claim. Except in such cases as would not
in the aggregate have a Material Adverse Effect, the use by each
Seller of the Intellectual Property and Technology (past and
present) has not violated or infringed any rights of other
Persons, or constituted a breach of any Contract (or other
agreement or commitment).
(h) The Intellectual Property and Technology includes
all such rights necessary to conduct the Business as now
conducted and, except (i) as set forth on Schedule 2.15(d) or
(ii) with respect to Small Licenses, such rights will not be
adversely affected by the execution and delivery of this
Agreement or the consummation of the transactions contemplated
hereby.
(i) There are no licenses or service, maintenance or
other agreements or obligations of any nature whatsoever
regarding the Intellectual Property or Technology between or
among a Seller, on the one hand, and any Affiliate(s) of such
Seller, on the other hand. All statements and representations
made by each Seller or any of its Affiliates in any pending
patent, copyright and trademark applications with respect to the
Intellectual Property were true in all material respects as of
the time they were made.
2.16 Brokerage. Neither Parent nor either Seller nor
any of their respective Affiliates has made any agreement or
taken any other action which might cause AlliedSignal or Buyer to
become liable for a broker's or finder's fee or commission as a
result of the transactions contemplated hereunder.
2.17 Product Warranties and Guarantees. Parent and
each Seller has provided Buyer with true and correct copies of
all written product and service warranties and guarantees in
connection with Contracts listed on Schedule 2.8(a).
2.18 Products Liability. There are no Liabilities of
either Seller, fixed or contingent, asserted or, to the best of
Parent's and each Seller's knowledge, unasserted, (a) with
respect to any product Liability or any similar claim that
relates to any product sold by either of the Sellers to others
prior to the Closing, or (b) with respect to any claim for the
breach of any express or implied product warranty or any other
similar claim with respect to any product sold by either of the
Sellers to others prior to the Closing, other than standard
warranty obligations (to replace, repair or refund) made by a
Seller in the ordinary course of the conduct of the Business to
buyers of the respective products, and except in the case of the
preceding clauses (a) and (b) where such Liabilities would not
exceed $500,000 in the aggregate for the Combined Business.
2.19 Labor Matters.
(a) To the best of Parent's and each Seller's
knowledge, there have been no union organizing efforts with
respect to either Seller conducted within the last three years
and there are none now being conducted with respect to either
Seller. The Sellers have not at any time during the three years
prior to the date of this Agreement had, nor, to the best of
Parent's and each Seller's knowledge, is there now threatened, a
strike, work stoppage, work slowdown or other material labor
dispute with respect to or affecting the Business. Except as set
forth on Schedule 2.19, (i) no employee of either Seller is
represented by any union or other labor organization; (ii) there
is no charge or complaint, including any unfair labor practice
charge or any claim of discrimination, which is pending with any
Governmental Entity or, to the best of Parent's and each Seller's
knowledge, threatened against either Seller relating to any of
its employees; and (iii) there is no commitment or agreement to
increase wages or modify the terms and conditions of employment
of employees of either Seller other than ordinary course of the
Business consistent with past practice. Parent and Sellers have
provided Buyer with copies of any collective bargaining agreement
or other agreement with any union or other labor organization
representing employees of either Seller.
(b) Within six months prior to the date hereof,
(i) neither Seller has effectuated (x) a "plant closing" (as
defined in the WARN Act) affecting any site of employment or one
or more facilities or operating units within any site of
employment or facility of the Business or (y) a "mass layoff" (as
defined in the WARN Act) affecting any site of employment or one
or more facilities or operating units within any site of
employment or facility of the Business, (ii) neither Seller has
been affected by any transaction or engaged in layoffs or
employment terminations with respect to the Business sufficient
in number to trigger application of any similar foreign, state or
local law, and (iii) neither of the Sellers' employees has
suffered an "employment loss" (as defined in the WARN Act).
2.20 Employee Benefits.
(a) Set forth on Schedule 2.20(a) is a true, correct
and complete list of the following:
(i) Separately by location, the names, job titles
and current salary or wage rates of all employees of each
Seller and their hourly or yearly salary, together with a
summary of all bonus, incentive compensation or other
additional compensation or similar benefits paid to such
persons for the 1997 fiscal year and estimated for the 1998
fiscal year;
(ii) Separately by location, the names, job titles
and current salary or wage rates of all independent
contractors, including any consultants, and leased employees
who perform services for a Seller; and
(iii) All of (x) the employee benefit plans,
arrangements or policies (whether or not written, whether
U.S. or foreign, and whether or not subject to ERISA),
including, without limitation, any stock option, stock
purchase, stock award, retirement, pension, deferred
compensation, profit sharing, savings, incentive, bonus,
health, dental, hearing, vision, drug, life insurance,
cafeteria, flexible spending, dependent care, fringe
benefit, vacation pay, holiday pay, disability, sick pay,
workers compensation, unemployment, severance pay, employee
loan, educational assistance plan, policy or arrangement,
and (y) any employment, indemnification, consulting or
severance agreement, under which any employee or former
employee of a Seller has any present or future right to
benefits or under which a Seller has any present or future
Liability (collectively, the "Plans"). Schedule 2.20(a)
indicates which Plans are maintained for employees employed
in the United States (collectively, "U.S. Plans") and which
Plans are maintained for employees employed outside of the
United States (collectively, "Foreign Plans").
(b) Parent or Sellers have made available to Buyer a
complete and correct copy of each Plan document or a written
description of any unwritten plan; the most recent summary plan
description or similar booklet for any Plan; and any employee
handbook applicable to employees of a Seller.
(c) Except (i) as set forth on Schedule 2.20(c) or
(ii) in such cases as would not in the aggregate have a Material
Adverse Effect:
(i) Neither Parent nor either Seller nor any of
their Affiliates has communicated to present or former
employees of a Seller, or formally adopted or authorized,
any additional Plan or any change in or termination of any
existing Plan.
(ii) Each Plan has been operated and administered
in accordance with its terms, the terms of any applicable
collective bargaining agreement, and all applicable Laws.
(iii) Each U.S. Plan which is a "group health
plan" subject to the continuation coverage requirements of
Section 4980B of the Code and Part 6 of Title I of ERISA
("COBRA") which is maintained by a Seller or any of its
Affiliates has been operated and administered, in all
material respects, in accordance with such requirements.
(d) Schedule 2.20(d) identifies each U.S. Plan which
provides health, life insurance or other welfare benefits to
retired or other terminated employees of a Seller other than
continuation coverage required by COBRA and the Sellers have the
ability to amend or terminate any such Plan.
(e) Except in such cases as would not in the aggregate
have a Material Adverse Effect, with respect to any Plan, no
actions, suits, claims or proceedings (other than routine claims
for benefits) are pending or, to the best of Parent's and each
Seller's knowledge, threatened, and no facts or circumstances
exist which could be reasonably expected to give rise to any such
actions, suits, claims or proceedings.
(f) Except in such cases as would not in the aggregate
have a Material Adverse Effect, no Plan is currently under
governmental investigation or audit, and to the best of Parent's
and each Seller's knowledge, no such investigation or audit is
contemplated or under consideration.
(g) Except in such cases as would not in the aggregate
have a Material Adverse Effect, no event has occurred and no
condition exists that could be reasonably expected to subject
AlliedSignal or Buyer, directly or indirectly, to any tax, fine,
penalty or other Liability arising under, or with respect to, any
employee benefit plan currently or previously maintained by
either Seller or any Person that is or was a member of a
controlled group with, under common control with, or otherwise
required to be aggregated with, either Seller under Section
414(b), (c), (m) or (o) of the Code.
(h) No lien has arisen or is expected to arise under
the Code or ERISA on the Purchased Assets.
(i) No U.S. Plan is a "multiemployer plan" within the
meaning of Section 3(37)(A) of ERISA, and neither Seller has any
outstanding Liability with respect to any such plan (contingent
or otherwise).
(j) Except (i) as set forth on Schedule 2.20(j) or
(ii) in such cases as would not in the aggregate have a Material
Adverse Effect, neither the execution of this Agreement nor the
consummation of the transactions contemplated by this Agreement,
will (x) increase the amounts of benefits otherwise payable under
any Plan, (y) result in the acceleration of the time of payment,
exercisability, funding or vesting of any such benefits, or (z)
result in any payment (whether severance pay or otherwise)
becoming due to, or with respect to, any employee or director of
a Seller.
(k) No employee of any Seller is employed outside of
the United States and Sellers have no Foreign Plans.
2.21 No Pending Litigation or Proceedings. Except as
set forth on Part A of Schedule 2.21, there are no actions,
suits, investigations or proceedings pending against or
affecting, or, to the best of Parent's and each Seller's
knowledge, threatened against, Parent, either Seller, the
Business or any of the Purchased Assets before any arbitrator or
Governmental Entity (including the United States Environmental
Protection Agency, the United States Equal Employment Opportunity
Commission or any similar Governmental Entity) that would
materially and adversely affect their ability to perform their
obligations under this Agreement. Except as set forth on Part B
of Schedule 2.21, there are no outstanding judgments, decrees,
writs, injunctions or orders of any arbitrator or Governmental
Entity against Parent or either Seller which relate to or arise
out of the conduct of the Business or the ownership, condition or
operation of the Business or the Purchased Assets except in such
cases as would not in the aggregate have a Material Adverse
Effect.
2.22 Insurance. Schedule 2.22 lists each Seller's
policies and contracts in effect as of the date hereof for
insurance covering the Purchased Assets or Assumed Liabilities
and the operation of the facilities constituting the Business
owned or held by the Sellers, together with the risks insured
against, coverage limits and deductible amounts. Sellers have
made available to Buyer complete and correct copies of all such
policies together with all riders and amendments thereto. Such
policies are in full force and effect and all premiums due
thereon have been paid. Each of the Sellers has complied in all
material respects with the terms and conditions of such policies.
The Sellers have made available to Buyer all books and records
relating to workers compensation claims and all claims made by
the Sellers under any policy of insurance during the five years
prior to the date hereof with respect to the Business other than
employee claims under health or medical insurance policies or
coverage.
2.23 Customers; Suppliers. As of the date of this
Agreement, Part A of Schedule 2.23 contains a true, correct and
complete list of (i) all Contracts to which any Major Customer is
a party and (ii) all Major Suppliers, together with an estimate
of all purchases from each Major Supplier for the last 12 months.
Except as identified with an asterisk on Part A of Schedule 2.23,
each of the Contracts listed thereon is fully assignable to Buyer
without the consent, approval or waiver of any other Person.
Except as set forth on Part B of Schedule 2.23, as of the date of
this Agreement, neither Parent nor either Seller has received
written notice within the preceding 12 months of any development
(a) which could reasonably be expected to result in a Material
Adverse Effect or (b) which indicates that a Major Customer will
not purchase products of the Combined Business from Buyer during
the 1998 fiscal year in amounts substantially equivalent (on a
pro rata basis) to such purchases from such Seller in the 1997
fiscal year. Except as set forth on Part C of Schedule 2.23, as
of the date hereof, no supplier of the Business (including any
supplier of Intellectual Property) has threatened to refuse to
sell its products or services to the Business except in such
cases as would not in the aggregate have a Material Adverse
Effect.
2.24 Condition of Assets. Except as set forth on
Schedule 2.24, the buildings, machinery, equipment, tools,
furniture, improvements, sewers, pipes, transportation equipment
and other fixed tangible Assets of the Business (a) included in
the Purchased Assets or (b) subject to any Contract included in
the Purchased Assets are in sufficiently good operating condition
and repair to conduct the Business as presently conducted,
reasonable wear and tear excepted.
2.25 All Assets. Except as set forth on Schedule 2.25
and for the Excluded Assets, the Purchased Assets (including any
Assets, properties and rights subject to any Contract included in
the Purchased Assets) constitute all the assets, properties and
rights owned, used, or held for use in connection with, or that
are otherwise related to or required for the conduct of, the
Business as currently conducted by the Sellers on the date of
this Agreement. Except as set forth on Schedule 2.25, none of
the Purchased Assets are owned, in whole or in part, by any
Person other than the Sellers.
2.26 [Intentionally omitted.].
2.27 Securities Matters. Except as set forth on
Schedule 2.27, Sellers are acquiring the AlliedSignal Common
Stock for their own account and without a present view to any
distribution thereof or any present intention of distributing or
selling the AlliedSignal Common Stock in violation of the federal
securities laws. Each Seller is an "accredited investor" as such
term is defined in Regulation D promulgated under the Securities
Act. In evaluating the suitability of an investment in the
AlliedSignal Common Stock, each Seller has relied solely upon the
representations, warranties, covenants and agreements made by
AlliedSignal herein and has not relied upon any other
representations or other information (whether oral or written and
including any estimates, projections or supplemental data) made
or supplied by or on behalf of AlliedSignal or any Affiliate,
employee, agent or other representative of AlliedSignal. Each
Seller understands and agrees that it may not sell or dispose of
any of the AlliedSignal Common Stock other than pursuant to a
registered offering or in a transaction exempt from the
registration requirements of the Securities Act.
2.28 SEC Filings. Parent has heretofore delivered to
Buyer, and Buyer acknowledges receipt of, the following documents
(the "Parent Reports"): (a) Parent's Annual Report on Form 10-K
for the fiscal year ended ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) Parent's Quarterly
Reports on Form 10-Q for the fiscal quarters ended June 30, and
September 30, 1997, (c) Parent's proxy statement relating to its
1997 Annual Meeting of Stockholders, (d) Parent's Annual Report
to Stockholders for 1997, and (e) any other report filed during
1997, and prior to the date of this Agreement, with the
Securities and Exchange Commission under the Securities Act or
the Exchange Act. Each Parent Report, as of its filing date,
insofar as it relates to the Business, did not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of
circumstances under which they were made, not misleading.
2.29 [Intentionally omitted.].
2.30 Business Conduct. Except as discussed between
Parent and Buyer on December 7, 1997, to the best of Parent's and
each Seller's knowledge, during the past three years neither
Seller, nor any director, officer, employee or third party acting
on behalf thereof, has, in violation of any Law: (i) made any
bribes, kickbacks or other payments, directly or indirectly, to
any Person or any representative thereof, to obtain favorable
treatment in securing business or otherwise to obtain special
concessions for either Seller; (ii) made any bribes, kickbacks or
other payments, directly or indirectly, to or for the benefit of
any Governmental Entity or any official, employee or agent
thereof, for the purpose of affecting his or her action or the
action of the Governmental Entity that he or she represents to
obtain favorable treatment in securing business or to obtain
special concessions for the Seller; (iii) made any unlawful
political contributions on behalf of either Seller; or
(iv) otherwise used corporate funds of either Seller for any
illegal purpose, including without limitation, any violation of
the Foreign Corrupt Practices Act.
ARTICLE III
Representations And Warranties Of AlliedSignal and Buyer
AlliedSignal and Buyer hereby jointly and severally
represent and warrant to Parent and Sellers as follows:
3.1 Organization and Good Standing. (a) AlliedSignal
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws
of the State of Delaware. AlliedSignal is the sole member of
Buyer. AlliedSignal owns all of the outstanding equity and
profit interests in Buyer, free and clear of all Liens. Buyer is
disregarded as an entity separate from AlliedSignal for federal
tax purposes.
3.2 Authorization and Enforceability. With respect to
each of AlliedSignal and Buyer: (a) such entity has full power
and authority to execute, deliver and perform this Agreement and
the Transaction Documents to which such entity is a party,
(b) the execution, delivery and performance by such entity of
this Agreement and the Transaction Documents to which such entity
is a party have been duly authorized by all necessary action on
the part of such entity, (c) this Agreement has been duly
executed and delivered by such entity, and, as of the Closing
Date, the other Transaction Documents to which either entity is a
party will be duly executed and delivered by such entity,
(d) this Agreement is a legal, valid and binding obligation of
such entity, enforceable against such entity in accordance with
its terms, and (e) as of the Closing Date, each of the other
Transaction Documents to which such entity is a party will
constitute the legal, valid and binding obligations of such
entity, enforceable against such entity in accordance with its
terms.
3.3 No Violation of Laws or Agreements. The
execution, delivery, and performance by AlliedSignal and Buyer of
this Agreement and the Transaction Documents to which such
entities (as applicable) are parties do not, and the consummation
by AlliedSignal and Buyer (as applicable) of the transactions
contemplated hereby and thereby, will not, (a) contravene any
provision of the Certificate of Incorporation or Bylaws of
AlliedSignal nor the Certificate of Formation or Limited
Liability Company Agreement of Buyer, or (b) except as set forth
on Schedule 3.3, violate, conflict with, result in a breach of,
or constitute a default (or an event which would, with the
passage of time or the giving of notice or both, constitute a
default) under, or result in or permit the termination,
modification, acceleration, or cancellation of, (i) any
indenture, mortgage, loan or credit agreement, license,
instrument, lease, contract, plan, permit or other agreement or
commitment, oral or written, to which either AlliedSignal or
Buyer is a party, or by which any of either entity's Assets may
be bound or affected, or (ii) any judgment, injunction, writ,
award, decree, restriction, ruling, or order of any arbitrator or
Governmental Entity or any applicable Law to which AlliedSignal
or Buyer is subject.
3.4 Consents. No consent, approval or authorization
of, or registration or filing with, any Person (governmental or
private) is required in connection with the execution, delivery
and performance by AlliedSignal or Buyer of this Agreement, the
other Transaction Documents to which AlliedSignal or Buyer is a
party, or the consummation by AlliedSignal or Buyer of the
transactions contemplated hereby or thereby except (a) as
required by the HSR Act, (b) as required by the NYSE to list
AlliedSignal Common Stock and (c) any required consent, approval
or authorization of, or registration or filing with, any foreign
governmental authority.
3.5 AlliedSignal Common Stock. As of the date hereof,
1,000,000,000 shares of AlliedSignal Common Stock are authorized
for issuance. As of November 30, 1997, 562,554,971 shares of
AlliedSignal Common Stock were issued and outstanding and
153,902,513 shares of AlliedSignal Common Stock were held in the
treasury of AlliedSignal or owned by any Subsidiary of
AlliedSignal. AlliedSignal has a sufficient number of unreserved
shares of AlliedSignal Common Stock to perform the transactions
contemplated hereby. All shares of AlliedSignal Common Stock to
be issued at the Closing, when so issued, will be duly
authorized, validly issued, fully paid and non-assessable, free
of preemptive rights and all Liens and will be issued in
compliance with all applicable Laws. Parent acknowledges that
AlliedSignal has disclosed to Parent that AlliedSignal will be
making open market and/or block purchases of AlliedSignal Common
Stock during the period between the date hereof and the Closing
Date. All such purchases shall comply with Rule 10b-18 under the
Exchange Act.
3.6 SEC Filings. AlliedSignal has heretofore
delivered to Parent, and Parent acknowledges receipt of, the
following documents (the "AlliedSignal Reports"):
(a) AlliedSignal's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, (b) AlliedSignal's Quarterly Reports on
Form 10-Q for the fiscal quarters ended March 31, 1997, June 30,
1997 and September 30, 1997, (c) AlliedSignal's proxy statement
relating to its 1997 Annual Meeting of Stockholders,
(d) AlliedSignal's Annual Report to Stockholders for 1996, and
(e) any other report filed during 1997, and prior to the date of
this Agreement, with the Securities and Exchange Commission under
the Securities Act or the Exchange Act. As of their respective
dates, each of the AlliedSignal Reports complied in all material
respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and none contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. Since January 1, 1996, AlliedSignal has
timely filed all reports, registration statements and made all
filings required to be filed with the SEC under the rules and
regulations of the SEC.
3.7 Financial Statements. The audited consolidated
financial statements and unaudited consolidated interim financial
statements of AlliedSignal and its consolidated Subsidiaries
included in or incorporated by reference into the AlliedSignal
Reports (including any related notes and schedules) have been
prepared in accordance with GAAP (except as may be indicated in
the notes thereto or as permitted by the Securities Act or the
Exchange Act in the case of unaudited financial statements
included in or incorporated by reference into the AlliedSignal
Reports) and fairly present the consolidated financial position
of AlliedSignal and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations for the
periods then ended, subject, in the case of the unaudited
consolidated interim financial statements, to normal year-end
adjustments and any other adjustments described therein.
3.8 Brokerage. Neither AlliedSignal, Buyer nor any of
their respective Affiliates has made any agreement or taken any
other action which might cause Parent or either Seller to become
liable for a broker's or finder's fee or commission as a result
of the transactions contemplated hereunder.
ARTICLE IV
Additional Covenants
4.1 Conduct of Business. Except (i) as otherwise
specifically permitted by this Agreement or (ii) with the prior
written consent of Buyer, from and after the date of this
Agreement and until the Closing Date, Parent and Sellers agree
that:
(a) Sellers shall:
(i) conduct the Business as presently
conducted and only in the ordinary course of business
consistent with past practice; and
(ii) use their reasonable best efforts to
preserve the business organization of the Business
substantially intact, to keep available to Buyer the
services of their respective employees, and to preserve
for Buyer the goodwill of the suppliers, distributors,
customers and others having business relationships with
the Business.
(b) Parent and Sellers shall promptly inform
AlliedSignal in writing of any specific event or
circumstance (including, without limitation, any consecutive
two week period in which any Major Customer fails to place
orders with the Seller or Sellers with which it transacts
business) of which any of them is aware, or of which any of
them receives written or oral notice, that (i) has or is
likely to have, individually or in the aggregate, taken
together with other events or circumstances, a Material
Adverse Effect, (ii) indicates that any Major Customer is
terminating or intends to terminate any Contract (excluding
termination upon expiration of the term of any Contract so
long as such customer continues to purchase goods from the
Combined Business) and/or indicates that any such customer
intends to reduce its purchases from either Seller or (iii)
indicates that any Major Supplier is terminating or intends
to terminate any Contract (excluding termination upon
expiration of the term of any Contract so long as such
supplier continues to sell goods to the Combined Business)
and/or indicates that any such Major Supplier intends to
reduce its sales to either Seller, provided that any such
oral notice reportable under this Section 4.1(b) shall be
directed to a responsible Person at Parent or either Seller;
and
(c) Sellers shall not:
(i) change or modify in any material
respect existing Inventory management or credit and
collection policies, procedures and practices with
respect to accounts receivable in any case relating to
the Business;
(ii) enter into any Contracts, waive any
rights or enter into any other transactions which
individually or in the aggregate would have a Material
Adverse Effect;
(iii) mortgage, pledge or subject to any
Lien (other than Permitted Liens) any of the Purchased
Assets;
(iv) change any compensation or benefits or
grant any material new compensation or benefits payable
to or in respect of any employee of the Business
(except, for regularly scheduled merit increases in the
ordinary course of business consistent with past
practice);
(v) sell, lease or otherwise transfer any
Assets, except Inventory in the ordinary course of the
Business, necessary, or otherwise material to the
conduct of, the Business which would constitute
Purchased Assets;
(vi) change either Seller's method of
accounting or keeping its books of account or
accounting practices with respect to the Business,
except as required by GAAP;
(vii) take or omit to take any action
which if taken or omitted prior to the date hereof
would constitute or result in a breach of any
representations or warranties of Parent or Sellers set
forth herein;
(viii) enter into any Contract (except
sales contracts with customers in the ordinary course
of the Business and except for such Contracts which may
be terminated by Buyer without penalty or Liability on
no more than 30 days' notice) that would create a
Liability for the Business in excess of $200,000 per
year without obtaining AlliedSignal's prior written
consent, such consent not to be unreasonably withheld;
(ix) create, incur or assume any Debt not
currently outstanding, other than current Liabilities
incurred in the ordinary course of business;
(x) amend their charters, bylaws or other
organizational documents;
(xi) authorize, issue, sell or otherwise
dispose of any capital stock of either Seller or amend
the terms thereof;
(xii) declare, set aside or pay any
dividend or other distribution (whether in cash, stock
or property or any combination thereof) in respect of
the capital stock of either of the Sellers, or redeem
or otherwise acquire any of the capital stock of either
of the Sellers;
(xiii) make any loans, advances or capital
contributions to, or investments in, any Person;
(xiv) acquire, sell, lease or dispose of
any Assets used or held for use in the Business, other
than (x) sales of Inventory in the ordinary and usual
course of business consistent with past practice or (y)
purchases of goods for use in the Business in the
ordinary and usual course of business consistent with
past practice;
(xv) with respect to the Business, pay,
discharge or satisfy any claims, Liabilities (absolute,
accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or
satisfaction in the ordinary course of business of
Liabilities reflected or reserved against in, or
contemplated by, the Balance Sheet or incurred in the
ordinary course of business consistent with past
practice;
(xvi) disclose to any third party or
enter into any Technology license or agreement to
disclose to any third party any Intellectual Property,
except in the ordinary and usual course of business and
pursuant to written confidentiality agreements;
(xvii) enter into any labor agreement;
(xviii) sell or dispose of any significant
amount of old or obsolete Inventory; or
(xix) make capital expenditures in excess
of $50,000 individually or $250,000 in the aggregate
for the Combined Business;
(xx) agree in writing or otherwise to take
any of the foregoing actions.
4.2 Mutual Covenants. The parties hereto mutually
covenant from the date of this Agreement to the Closing Date (and
subject to the other terms of this Agreement):
(a) to cooperate with each other in determining
whether filings are required to be made or consents required
to be obtained in any jurisdiction in connection with the
consummation of the transactions contemplated by this
Agreement and in making or causing to be made any such
filings promptly and in seeking to obtain timely any such
consents (each party hereto shall furnish to the other and
to the other's counsel all such information as may be
reasonably required in order to effectuate the foregoing
action); and
(b) to advise the other parties promptly if such
party determines that any condition precedent to its
obligations hereunder will not be satisfied in a timely
manner.
4.3 Filings and Authorizations. The parties hereto
will, as promptly as practicable, and in the case of filings
under the HSR Act no later than five Business Days after the date
of this Agreement, make or cause to be made all such filings and
submissions under Laws applicable to them or their Affiliates as
may be required to consummate the terms of this Agreement,
including all notifications and information to be filed or
supplied pursuant to the HSR Act. The parties hereto shall also
provide as promptly as possible full responses to any requests
for additional information made of them under the HSR Act. Any
such filings, including any supplemental information and requests
for additional information under the HSR Act, will be in
substantial compliance with the requirements of the applicable
Law. Each of AlliedSignal and Buyer, on the one hand, and Parent
and Sellers, on the other hand, shall furnish to the other such
necessary information and reasonable assistance as the other may
request in connection with its preparation of any filing or
submission which is necessary under the HSR Act. Parent,
Sellers, AlliedSignal and Buyer shall keep each other apprised of
the status of any communications with, and inquiries or requests
for additional information from, any Governmental Entity,
including the FTC and the Antitrust Division, and shall comply
promptly with any such inquiry or request. Each of Parent and
AlliedSignal shall use its reasonable efforts to obtain any
clearance required under the HSR Act for the purchase and sale of
the Purchased Assets in accordance with the terms and conditions
hereof. Nothing contained in this Agreement, including under
this Section 4.3 and Sections 4.8 and 4.13, will require or
obligate (a) Parent, the Sellers, AlliedSignal, Buyer or their
respective Affiliates to initiate, pursue or defend any
litigation to which any Governmental Entity (including the
Antitrust Division and the FTC) is a party or (b) AlliedSignal,
Buyer or their respective Affiliates (i) to agree or otherwise
become subject to any limitations on (x) the right of
AlliedSignal, Buyer or their respective Affiliates effectively to
control or operate the Business, (y) the right of AlliedSignal,
Buyer or their respective Affiliates to acquire or hold the
Business, or (z) the right of AlliedSignal or Buyer to exercise
full rights of ownership of the Business or all or any portion of
the Purchased Assets, or (ii) to agree or otherwise be required
to sell or otherwise dispose of, hold separate (through the
establishment of a trust or otherwise), or divest itself of all
or any portion of the business, Assets or operations of
AlliedSignal, Buyer, any Affiliate of AlliedSignal or Buyer or
the Business. The parties agree that no representation, warranty
or covenant of Parent, Sellers, AlliedSignal or Buyer contained
in this Agreement shall be breached or deemed breached as a
result of the failure by any party hereto or any of its
Affiliates to take any of the actions specified in the preceding
sentence.
4.4 Public Announcement. No party hereto shall make
or issue, or cause to be made or issued, any public announcement
or written statement concerning this Agreement or the
transactions contemplated hereby without the prior written
consent of the other party hereto (which will not be unreasonably
withheld or delayed), unless counsel to such party advises that
such announcement or statement is required by law or the rules of
any securities exchange on which securities of any Affiliate of
Parent are traded (in which case the parties hereto shall make
reasonable efforts to consult with each other prior to such
required announcement).
4.5 Investigation. Sellers shall give AlliedSignal
and its representatives (including AlliedSignal's accountants,
consultants, counsel and employees), upon reasonable notice and
during normal business hours, reasonable access to the properties
(including any Equipment and any Acquired Real Property),
Contracts, employees, books, records and affairs of the Sellers
to the extent relating to the Business and the Purchased Assets
(provided that such access does not unreasonably disrupt the
conduct of the Business), and shall cause their respective
officers, employees, agents and representatives to furnish to
AlliedSignal all documents, records and information (and copies
thereof), to the extent relating to the Business and the
Purchased Assets, as AlliedSignal may reasonably request. Parent
and Sellers may reasonably limit the number of representatives of
AlliedSignal provided access hereby. No investigation or receipt
of information by AlliedSignal pursuant to, or in connection
with, this Agreement, shall diminish or obviate any of the
representations, warranties, covenants or agreements of Parent or
Sellers under this Agreement or the conditions to the obligations
of Buyer under this Agreement. All information provided to
AlliedSignal or Buyer under this Agreement shall be held subject
to the terms and conditions of the Confidentiality Agreement.
4.6 Taxes.
(a) Parent and each Seller shall jointly and severally
be responsible for and shall pay any and all Taxes arising or
resulting from the conduct of the Business or the ownership of
the Purchased Assets on or prior to the Closing Date, which
Liability shall be a Non-Assumed Liability (including, without
limitation, the sale of the Business and the Purchased Assets on
the Closing Date pursuant to this Agreement).
(b) Buyer shall be responsible for and shall pay any
and all Taxes arising or resulting from the conduct of the
Business or the ownership of the Purchased Assets after the
Closing Date (excluding without limitation, the sale of the
Business and the Purchased Assets or the Closing Date pursuant to
this Agreement), which Liability shall be an Assumed Liability.
(c) Each Seller hereby acknowledges that for FICA and
FUTA purposes, Buyer qualifies as a successor employer with
respect to the retained employees. In connection with the
foregoing, the parties agree to follow the "Alternative
Procedures" set forth in Section 5 of the Revenue Procedure 96-
60, 1996-2C.B.399. Each affected Seller and Buyer understands
that Buyer shall assume the affected Seller's entire obligation
to furnish a Form W-2, Wage and Tax Statement to the employees of
the Business for calendar year ending December 31, 1998.
(d) In addition to all personnel files and records
relating to employees of the Business that each Seller shall
deliver to the Buyer when their employment commences with Buyer
as otherwise required by this Agreement, each Seller shall timely
provide Buyer with any and all other information it needs to
properly comply with the requirements of the final sentence of
Section 4.6(c).
(e) Each Seller acknowledges that for state
unemployment Tax purposes, each Seller will permit Buyer to apply
for a transfer of such Seller's rating account with respect to
its Business. Each Seller shall deliver to Buyer within a
reasonable time after request therefor, with respect to its
Business, copies of such Seller's (i) Form 940, Employer's Annual
Federal Unemployment Tax Returns for 1995 and 1996, (ii) state
unemployment tax rate notices for 1995 and 1996, and (iii)
benefit change statements that itemize claims charged against the
state account of such Seller in each state in which the Business
is operated for the four most recent calendar quarters.
(f) Parent, Sellers and Buyer shall each, and Parent
shall cause DA to (i) provide the other with such assistance as
may reasonably be requested by any of them in connection with the
preparation of any Tax return, any audit or other examination by
any Taxing Authority or any judicial or administrative proceeding
with respect to Taxes, (ii) retain and provide to the other any
records or other information which may be relevant to such
return, audit examination or proceeding, and (iii) provide to the
other any final determination of any such audit or examination,
proceeding or determination that affects any amount required to
be shown on any Tax return of the other for any period (which
shall be maintained confidentially). Without limiting the
generality of the foregoing, Buyer, Sellers and Parent shall, and
Parent shall cause DA to, retain, until the applicable statutes
of limitations (including all extensions) have expired, copies of
all Tax returns, supporting workpapers, and other books and
records or information which may be relevant to such returns for
all Tax periods or portions thereof ending before or including
the Closing Date, and shall not destroy or dispose of such
records or information without first providing the other party
with a reasonable opportunity to review and copy the same.
(g) Parent agrees that neither Seller will be
liquidated and that Sellers in the aggregate will retain assets
of at least $1,000,000. Buyer, Parent and each Seller intend
that Buyer's acquisition of the Business and Purchased Assets
from the Sellers pursuant to this Agreement shall be a taxable
transaction and, assuming compliance by Parent with the covenant
set forth in the immediately preceding sentence, each of the
parties agrees to treat such acquisition in such manner for all
tax purposes, including, without limitation, for all purposes on
any federal or state income or franchise tax return filed by any
party after the Closing Date. Parent, Sellers and Buyer mutually
agree to the allocation of the Initial Purchase Price among such
Purchased Assets, in accordance with Code Section 1060. In the
event of an adjustment to the Initial Purchase Price as provided
in Section 1.6(f) and Section 9.15 of the Aerospace Agreement,
any such adjustment due to a change in a particular class of
Purchased Assets shall be allocated on a dollar for dollar basis
to the applicable class. The parties shall mutually agree to the
allocation of the adjustment within thirty (30) days after the
determination of such adjusted Initial Purchase Price. Each of
the parties agrees to report this transaction for tax purposes in
accordance with such allocation of the Initial Purchase Price or
the adjusted Initial Purchase Price, including, without
limitation, for all purposes on any federal or state income or
franchise tax return filed by any party after the Closing Date.
(h) Neither Parent nor either Seller shall, and Parent
shall cause DA not to, make a new or change any existing Tax
election, change a method of accounting or Inventory method, file
any amended Tax return, enter into any closing agreement, settle
any Tax claim or assessment, or take or omit to take any other
action not consistent with past practice, if any such action or
omission would have the effect of increasing the Tax Liability of
AlliedSignal or Buyer with respect to the Business and Purchased
Assets for any period after the Closing Date.
(i) AlliedSignal and Buyer, on the one hand, and
Parent and Sellers, on the other hand, shall equally bear all
Transfer Taxes. Parent, Sellers and Buyer shall, and Parent
shall cause DA to, cooperate in timely making and filing all Tax
Returns as may be required to comply with the provisions of any
Transfer Tax laws. To the extent legally able to do so, Buyer
shall deliver to Parent and Sellers exemption certificates
satisfactory in form and substance to Parent and Sellers with
respect to Transfer Taxes if such delivery would reduce the
amount of Transfer Taxes that would otherwise be imposed.
(j) [Intentionally omitted.]
(k) [Intentionally omitted.]
(l) [Intentionally omitted.]
4.7 Certain Deliveries.
(a) Within thirty (30) days after the end of each
month ending after the date of this Agreement and prior to the
Closing Date, Parent and Sellers shall prepare and furnish to or
cause to be furnished to AlliedSignal a copy of the monthly
financial reports for the Combined Business prepared after
September 30, 1997 (including unaudited balance sheet and income
statements) for each such month and the fiscal year to the end of
such month). All of the foregoing financial statements shall
comply with the requirements concerning unaudited financial
statements set forth in Section 2.6. In addition, Parent and
Sellers shall furnish AlliedSignal, upon request, with copies of
regular management reports, if any, concerning the operation of
the Business within ten (10) days after such reports are
prepared.
(b) Each Seller shall provide AlliedSignal, within
five days of the execution or the date of receipt thereof, a copy
of each Contract entered into by either Seller after the date
hereof and prior to the Closing Date which, if entered into prior
to the date hereof would have been required to be disclosed on
Part A of Schedule 2.8(a).
(c) Within five days after the date of filing thereof,
AlliedSignal or Parent, as the case may be, shall furnish to the
other a copy of each report filed by AlliedSignal or Parent, as
the case may be, after the date of this Agreement and prior to
the Closing Date under the Securities Act or the Exchange Act.
4.8 Consents. Prior to the Closing, Parent and
Sellers shall give any notices and obtain all waivers, licenses,
agreements, permits, consents, approvals or authorizations of any
Governmental Authority that are required to be obtained by either
Seller pursuant to any Contract or Permit or otherwise in order
to consummate the transactions contemplated hereunder, and all of
such shall be in a written form agreeable to AlliedSignal and in
full force and effect and without conditions or limitations that
restrict the ability of the parties hereto to carry out the
transactions contemplated hereby.
4.9 Releases. At the Closing, all intercompany Debt
(other than receivables and payables arising from ordinary course
commercial transactions) between the Sellers, on the one hand,
and the Parent and its Subsidiaries other than the Sellers, on
the other hand, shall be canceled and all such amounts shall be
deemed to be capital contributions to the entity owing such Debt.
4.10 Real Property. Within thirty (30) days after the
date hereof, Parent and Sellers shall deliver or cause to be
delivered to Buyer current, as-built ALTA surveys of the Owned
Real Property (the cost of which shall be borne 50% by Parent and
50% by Buyer); such surveys to be dated within thirty (30) days
of the date hereof and to be reasonably acceptable to Buyer.
Such surveys shall be performed by licensed surveyors designated
by Buyer and shall be certified to Buyer, Buyer's title insurance
companies and others as Buyer shall request. The surveys shall
be in form sufficient to cause Buyer's title insurance companies
to insure such surveys, and shall be an ALTA/ACSM Land Title
Survey, prepared in accordance with the "Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys as adopted by
American Land Title Association and American Congress on
Surveying & Mapping", and shall meet the currently effective
Accuracy Standards for an Urban Survey adopted by said
organizations and shall include such optional survey
responsibilities and specifications as Buyer reasonably shall
select.
4.11 Environmental. At or prior to Closing, Parent and
Sellers shall deliver or cause to be delivered all such necessary
applications, approvals or consents required to transfer all
Permits required for the continued operation of the Business and
the Purchased Assets after the Closing Date in compliance with
Environmental Laws. Within thirty (30) days after execution of
this Agreement, Sellers shall identify to Buyer any of the
Purchased Assets that are subject to the requirements of any Laws
that condition, restrict, prohibit or require notification or
disclosure for environmental reasons upon the transfer, sale,
lease or closure of certain property; and Sellers shall deliver
on or prior to the Closing Date, all necessary applications,
approvals, or consents required by such Laws.
4.12 Ancillary Agreements. At or prior to the Closing,
the applicable parties shall enter into each of the Ancillary
Agreements.
4.13 Reasonable Best Efforts. Without limiting the
specific obligations of any party hereto under any covenant or
agreement hereunder, each party hereto shall use reasonable best
efforts to take all action and do all things necessary in order
to promptly consummate the transactions contemplated hereby,
including, without limitation, satisfaction, but not waiver, of
the Closing conditions set forth in Article V.
4.14 Negotiations. From the date hereof until the
termination of this Agreement in accordance with its terms,
Parent and Sellers, on behalf of themselves and their Affiliates,
agree that, except as permitted under the Aerospace Agreement,
Parent, Sellers and their Affiliates will deal exclusively and in
good faith with AlliedSignal and Buyer with respect to any
transaction involving the sale, transfer or other disposition of
the Purchased Assets or the Business; and neither Parent,
Sellers, their Affiliates nor any of their officers, directors,
employees, lenders, investment banking firms, advisors or other
agents, or any Person acting on their behalf, will solicit any
inquiries or proposals by, or engage in any discussions or
negotiations with, or furnish any nonpublic information to or
enter into any agreement with, any Person other than AlliedSignal
or Buyer concerning the sale or other disposition of the
Purchased Assets or the Business or the merger, consolidation,
sale of securities or other transaction involving Parent or
either of the Sellers, if such merger, consolidation, sale or
other transaction would be inconsistent, in any respect, with the
transactions contemplated by this Agreement, and will promptly
notify AlliedSignal of the substance of any inquiry or proposal
concerning any such transaction that may be received by Parent,
Sellers or their Affiliates.
4.15 U.S. Government Contracts. As soon as practicable
following the date of this Agreement and only after Buyer's
written request, with respect to each Government Contract,
AlliedSignal and Buyer shall assist Parent and Sellers to either
obtain written confirmation reasonably satisfactory in form and
substance to Buyer that novation of such Government Contract is
not required, or, if not received prior to the Closing Date,
submit to the cognizant responsible contracting officer, as soon
as practicable after the Closing Date (i) a written request that
the U.S. Government enter into a novation agreement contemplated
by FAR 42.1204 (a "Novation Agreement") with Buyer with respect
to each Government Contract and (ii) a Novation Agreement
executed by the Seller party thereto for each Government
Contract. Parent, Sellers, AlliedSignal and Buyer shall
coordinate their efforts to facilitate the actions required by
this Section 4.15 and Parent agrees to take all necessary action
to assist Sellers prior to and after the Closing in connection
therewith, including without limitation, upon Buyer's written
request, obtaining such consents after the Closing, informing the
appropriate governmental personnel of the pending transaction and
of the planned novation.
4.16 NYSE Listing. AlliedSignal shall take all
reasonable action required to obtain from the NYSE, prior to the
Closing Date to have duly approved for listing, subject to
official notice of issuance, the shares of AlliedSignal Common
Stock to be issued hereunder at the Closing.
4.17 [Intentionally omitted.]
4.18 Seller Debt. Prior to the Closing, Parent shall
cause all remaining payments on all capitalized leases to be paid
and use its reasonable best efforts to cause all cash accounts of
the Sellers to be reduced to zero with no negative or positive
balances. Buyer acknowledges that the funding of negative
balances will increase Closing Date Net Worth.
4.19 [Intentionally omitted.]
4.20 Product Liability Insurance. At Parent's request,
AlliedSignal shall use reasonable commercial efforts to procure,
to the extent available, at Parent's expense, product liability
insurance covering products manufactured or distributed by the
Sellers prior to the Closing Date. Upon receipt of any premium
notice relating to such insurance, AlliedSignal shall notify
Parent and Parent shall promptly pay to AlliedSignal the amount
of the premium due. Parent acknowledges and agrees that
AlliedSignal is free to ascribe any adverse claim experience, to
the extent reasonably identifiable to products manufactured or
distributed by the Sellers prior to the Closing Date, to such
policy, so that (to such extent) such adverse claim experience
does not adversely affect other product liability premiums being
paid by AlliedSignal.
4.21 United Kingdom Assets. Parent shall cause the
transfer to Buyer or its designee of the Assets located in the
United Kingdom related to the Combined Business.
ARTICLE V
Conditions Precedent
5.1 Conditions Precedent to Obligations of
AlliedSignal and Buyer. The obligations of Buyer to purchase
(and of AlliedSignal to cause Buyer to purchase) the Purchased
Assets and assume (and of AlliedSignal to cause Buyer to assume)
the Assumed Liabilities and to consummate the other transactions
contemplated hereby are subject to the satisfaction, on or prior
to the Closing Date, of each of the following conditions (any one
or more of which may be waived in writing in whole or in part by
Buyer in its sole discretion):
(a) Representations, Warranties and Covenants. Each
of the representations and warranties of Parent and Sellers
contained in this Agreement or in any Transaction Document
delivered in connection herewith shall be true and correct in all
material respects on and as of the date of this Agreement and at
and as of the Closing with the same effect as though such
representations and warranties had been made at and as of the
Closing, except for representations and warranties that speak as
of a specific date or time other than the Closing (which need
only be true and correct in all material respects as of such date
or time); provided, however, that if any such representation or
warranty is already qualified by materiality, for purposes of
determining whether this condition has been satisfied, such
representation or warranty as so qualified shall be true and
correct in all respects. Parent and Sellers shall have performed
and complied in all material respects with each covenant and
agreement required by this Agreement to be performed or complied
with by them at or prior to the Closing. Parent and each Seller
shall furnish AlliedSignal and Buyer with a certificate of such
company dated the Closing Date and signed by a senior executive
officer of Parent or such Seller, as the case may be, to the
effect that the conditions set forth in this Section 5.1(a) have
been satisfied.
(b) HSR Act. The applicable waiting period under the
HSR Act (including any extensions thereof) with respect to the
transactions contemplated hereby shall have expired or been
terminated.
(c) Stock Exchange Listing. The NYSE shall have duly
approved for listing, subject to official notice of issuance, the
shares of AlliedSignal Common Stock to be issued hereunder at the
Closing.
(d) Required Consents. Parent and the Sellers shall
have obtained all statutory and regulatory consents and approvals
which are required under any applicable Laws in order to
consummate the transactions contemplated hereby and to permit
Buyer to conduct the Business as conducted as of the date of this
Agreement and all other necessary consents and approvals of third
parties (other than any customer or supplier of the Business) to
the transactions contemplated hereby, other than those the
failure of which to obtain, individually and in the aggregate,
would not have a Material Adverse Effect.
(e) Injunction; Litigation; Legislation. (i) Parent,
the Sellers, AlliedSignal and Buyer shall not be subject to any
order or injunction by any Governmental Entity restraining or
prohibiting the consummation of the transactions contemplated
hereby, (ii) no action or proceeding shall have been instituted
before any Governmental Entity to restrain or prohibit, or to
obtain substantial damages in respect of, the consummation of the
transactions contemplated hereby, (iii) none of the parties
hereto shall have received written notice from any Governmental
Entity of (x) its intention to institute any action or proceeding
to restrain, enjoin or nullify this Agreement or the transactions
contemplated hereby, or to commence any investigation (other than
a routine letter of inquiry, including a routine civil
investigative demand) into the consummation of the transactions
contemplated hereby or (y) the actual commencement of such
investigation, (iv) there shall not be any pending or threatened
litigation, suit, action or proceeding by any party which would
reasonably be expected to limit or materially adversely affect
Buyer's ownership of the Purchased Assets or the Buyer under the
Aerospace Agreement's ownership of the Aerospace Purchased Assets
and (v) no Law shall have been promulgated or enacted by any
Governmental Entity, which would prevent or make illegal the
consummation of the transactions contemplated hereby.
(f) Documents. Parent and the Sellers shall have
delivered to Buyer at the Closing such other documents and
instruments as shall be reasonably necessary to transfer to Buyer
the Purchased Assets as contemplated by this Agreement. Parent
and Sellers shall have delivered all the certificates,
instruments, contracts and other documents specified to be
delivered by each of them hereunder.
(g) Aerospace Closing. (i) All conditions to the
Closing (as defined in the Aerospace Agreement) shall have been
satisfied or waived and (ii) the Closing (as defined in the
Aerospace Agreement) shall be consummated simultaneously with the
consummation of the Closing hereunder.
(h) Escrow Agreement. Parent and the Escrow Agent
shall have executed and delivered to AlliedSignal the Escrow
Agreement.
5.2 Conditions Precedent to Obligations of Parent and
Sellers. The obligations of Sellers to sell, and Parent to cause
to be sold, the Purchased Assets and to consummate the other
transactions contemplated hereby are subject to the satisfaction,
on or prior to the Closing Date, of each of the following
conditions (any one or more of which may be waived in writing in
whole or in part by Parent (acting on its own behalf and on
behalf of Sellers) in its sole discretion):
(a) Representations, Warranties and Covenants. Each
of the representations and warranties of AlliedSignal and Buyer
contained in this Agreement and in any Transaction Document
delivered in connection herewith shall be true and correct in all
material respects on and as of the date of this Agreement and at
and as of the Closing with the same effect as though such
representations and warranties had been made at and as of the
Closing, except for representations and warranties that speak as
of a specific date or time other than the Closing (which need
only be true and correct in all material respects as of such date
or time); provided, however, that if any such representation or
warranty is already qualified by materiality, for purposes of
determining whether this condition has been satisfied, such
representation or warranty as so qualified shall be true and
correct in all respects. AlliedSignal and Buyer shall have
performed or complied in all material respects with each covenant
and agreement required by this Agreement to be performed or
complied with by it at or prior to the Closing. AlliedSignal or
Buyer, as the case may be, shall furnish Sellers with a
certificate dated the Closing Date and signed by a senior
executive officer of Buyer to the effect that the conditions set
forth in this Section 5.2(a) have been satisfied.
(b) HSR Act. The applicable waiting period under the
HSR Act (including any extensions thereof) with respect to the
transactions contemplated hereby shall have expired or been
terminated.
(c) Stock Exchange Listing. The NYSE shall have duly
approved for listing, subject to official notice of issuance, the
shares of AlliedSignal Common Stock to be issued hereunder at the
Closing.
(d) Injunction; Litigation; Legislation. (i) Parent,
the Sellers, AlliedSignal and Buyer shall not be subject to any
order or injunction by any Governmental Entity restraining or
prohibiting the consummation of the transactions contemplated
hereby, (ii) no action or proceeding shall have been instituted
before any Governmental Entity to restrain or prohibit, or to
obtain substantial damages in respect of, the consummation of the
transactions contemplated hereby, (iii) none of the parties
hereto shall have received written notice from any Governmental
Entity of (x) its intention to institute any action or proceeding
to restrain, enjoin or nullify this Agreement or the transactions
contemplated hereby, or to commence any investigation (other than
a routine letter of inquiry, including a routine civil
investigative demand) into the consummation of the transactions
contemplated hereby or (y) the actual commencement of such
investigation and (iv) no Law shall have been promulgated or
enacted by any Governmental Entity, which would prevent or make
illegal the consummation of the transactions contemplated hereby.
(f) Documents. AlliedSignal and Buyer shall have
delivered to Sellers at the Closing such other documents and
instruments as shall be reasonably necessary for the assumption
by Buyer of the Assumed Liabilities as contemplated by this
Agreement. AlliedSignal and Buyer shall have delivered all the
certificates, instruments, contracts and other documents
specified to be delivered by it hereunder.
(g) Aerospace Closing. (i) All conditions to the
Closing (as defined in the Aerospace Agreement) shall have been
satisfied or waived and (ii) the Closing (as defined in the
Aerospace Agreement) shall be consummated simultaneously with the
consummation of the Closing hereunder.
(h) Registration Rights Agreement. AlliedSignal shall
have executed and delivered to Parent a registration rights
agreement substantially in the form of Exhibit 1.9(b)(vi) of the
Aerospace Agreement with such changes as may reasonably be
requested by Citicorp USA, Inc. provided that such changes shall
not provide for (i) more than a single demand registration right,
(ii) a period of longer than 180 days during which the
Registration Statement must be kept in effect or (iii) the
payment of expenses by a party other than Citicorp USA, Inc. or
Parent.
(i) Escrow Agreement. AlliedSignal and the Escrow
Agent shall have executed and delivered to Parent the Escrow
Agreement.
ARTICLE VI
Certain Additional Covenants
6.1 Expenses. Except as otherwise expressly provided
in this Agreement, each of the parties hereto shall each bear its
respective accounting, legal and other expenses incurred in
connection with the transactions contemplated by this Agreement.
6.2 Maintenance of Books and Records. Parent, Sellers
and Buyer shall cooperate fully with each other after the Closing
so that (subject to any limitations that are reasonably required
to preserve any applicable attorney-client privilege) each party
hereto has access to the business records, contracts and other
information existing at the Closing Date and relating in any
manner to the Purchased Assets, the Assumed Liabilities or the
conduct of the Business (whether in the possession of Parent,
Sellers or Buyer). No files, books or records existing at the
Closing Date and relating in any manner to the Purchased Assets
or the conduct of the Business prior to the Closing Date shall be
destroyed by any party hereto for a period of six years after the
Closing Date without giving the other party at least 30 days'
prior written notice, during which time such other party shall
have the right (subject to the provisions hereof) to examine and
to remove any such files, books and records prior to their
destruction. The access to files, books and records contemplated
by this Section 6.2 shall be during normal business hours and
upon not less than two business days' prior written request,
shall be subject to such reasonable limitations as the party
having custody or control thereof may impose to preserve the
confidentiality of information contained therein, and shall not
extend to material subject to a claim of privilege unless
expressly waived by the party entitled to claim the same.
6.3 [Intentionally omitted.]
6.4 Non-Competition/Non-Solicitation.
(a) Parent and each Seller covenants and agrees that,
if the Closing is consummated, for a period of three years after
the Closing Date, it will not, and will cause Parent Subsidiaries
not to, engage in the business of supplying to the aerospace
industry aircraft hardware, chemicals or related support services
(or any portion thereof) anywhere in the world (the "Competitive
Activities"), except for (i) the sale of any Inventory of such
hardware or chemicals owned by such Person or consigned to such
Person as of the date hereof, the value of which Inventory is
estimated to be approximately $5,000,000 or (ii) the sale of any
Inventory of such hardware or chemicals hereafter acquired by
such Person as part of a bulk purchase or hereafter consigned to
such person as part of a bulk consignment, but only after such
Person has offered to sell such hardware or chemicals to Buyer at
commercially reasonable prices for such quantities as would be
charged to distributors of such products; provided, however, that
nothing herein shall be construed to prevent Parent, Sellers,
and/or any of their respective Affiliates from owning, in the
aggregate, up to 10% of the stock or equity interest in any
Person that engages in such business or any portion thereof. It
is the desire and intent of the parties hereto that the
provisions of this Section 6.4 shall be enforced to the fullest
extent permitted under the laws and public policies of each
jurisdiction in which enforcement is sought. If any court
determines that any provision of this Section 6.4 is
unenforceable, such court shall have the power to reduce the
duration or scope of such provision, as the case may be, or
terminate such provision and, in reduced form, such provision
shall be enforceable; it is the intention of the parties that the
foregoing restrictions shall not be terminated, unless so
terminated by a court, but shall be deemed amended to the extent
required to render them valid and enforceable, such amendment to
only apply with respect to the operation of this Section 6.4 in
the jurisdiction of the court that has made the adjudication.
Notwithstanding the foregoing, nothing in this Section 6.4(a)
shall prohibit Parent, any Seller or any of their respective
Affiliates from acquiring any Person or business that engages in
Competitive Activities provided that (x) such activities do not
constitute the principal activities of the Person or business to
be acquired (based on the sales of such business during the
preceding four (4) full calendar quarters) and (y) if Competitive
Activities constitute in excess of fifteen percent (15%) of the
revenues of the Person or business acquired, Sellers use their
reasonable efforts to divest that portion of such Person or
business that engages in Competitive Activities within twelve
(12) months after the acquisition thereof.
(b) Each of Parent and each Seller covenants and
agrees that, if the Closing is consummated, for a period of one
year after the Closing Date, it will not, and will cause Parent
Subsidiaries not to, directly or indirectly, solicit for
employment, either as an employee or a consultant, any employee
or independent contractor of AlliedSignal, Buyer or any of their
respective Affiliates who is engaged in the Business and was an
employee or independent contractor of either Seller engaged in
the Business as of the Closing Date to become an employee or
consultant or otherwise provide services to Parent, such Seller
or any Parent Subsidiary, except for persons whose employment is
solicited or procured through general media advertisements.
(c) The parties acknowledge and agree that the
restrictions contained in Sections 6.4(a) and 6.4(b) are a
reasonable and necessary protection of the immediate interests of
AlliedSignal and Buyer, and any violation of these restrictions
would cause substantial injury to AlliedSignal or Buyer, as the
case may be and that AlliedSignal and Buyer would not have
entered into this Agreement without receiving the additional
consideration offered by Parent and each Seller in binding itself
to these restrictions. In the event of a breach or a threatened
breach by Parent, any Seller or any Parent Subsidiary of these
restrictions, AlliedSignal and Buyer shall be entitled to apply
to any court of competent jurisdiction for an injunction
restraining such Person from such breach or threatened breach
(without the necessity of proving the inadequacy of money damages
as a remedy); provided, however, that the right to apply for
injunctive relief shall not be construed as prohibiting
AlliedSignal or Buyer, as the case may be, from pursuing any
other available remedies for such breach or threatened breach.
(d) Each of AlliedSignal and Buyer covenant and agree
that, if the Closing is consummated, for a period of one year
after the Closing Date, and if not consummated for a period of
one year from the date of termination of this Agreement, it will
not, and will cause its Affiliates not to, directly or
indirectly, solicit for employment, either as an employee or a
consultant, any employee or independent contractor of Parent or
any Parent Subsidiary (other than any employee or independent
contractor of any of the Sellers) to become an employee or
consultant or otherwise provide services to AlliedSignal, Buyer
or any of their respective Affiliates, except for persons whose
employment is solicited or procured through general media
advertisements.
(e) The parties acknowledge and agree that the
restrictions contained in Section 6.4(d) are a reasonable and
necessary protection of the immediate interests of Parent and
Sellers, and any violation of these restrictions would cause
substantial injury to Parent or Sellers, as the case may be, and
that Parent and Sellers would not have entered into this
Agreement without receiving the additional consideration offered
by AlliedSignal and Buyer in binding itself to these
restrictions. In the event of a breach or a threatened breach by
AlliedSignal, Buyer or any of their respective Affiliates of
these restrictions, Parent and any such Seller shall be entitled
to apply to any court of competent jurisdiction for an injunction
restraining such Person from such breach or threatened breach
(without the necessity of proving inadequacy of money damages as
a remedy); provided, however, that the right to apply for
injunctive relief shall not be construed as prohibiting Parent or
such Seller from pursuing any other available remedies for such
breach or threatened breach.
6.5 Confidential Information. Parent and Sellers
shall, and shall cause Parent Subsidiaries to, maintain the
confidentiality of, and shall not use, and shall cause Parent
Subsidiaries not to use, for the benefit of itself or others, any
confidential information concerning the Business or the Purchased
Assets, including any information with respect to the
Intellectual Property or Technology (the "Confidential
Information"); provided, however, that this Section 6.5 shall not
restrict (a) any disclosure by any such Person of any
Confidential Information required by applicable Law, securities
exchange or any court of competent jurisdiction; provided, that
AlliedSignal and Buyer are given notice and an adequate
opportunity to contest such disclosure, (b) any disclosure on a
confidential basis to any such Person's attorneys, accountants,
lenders and investment bankers and (c) any disclosure of
information (i) which is available publicly as of the date of
this Agreement, (ii) which, after the date of this Agreement,
becomes available publicly through no fault of the disclosing
party or any of its Affiliates or (iii) which is received by such
Person from a third party not, to the best of such Person's
knowledge, subject to any obligation of confidentiality with
respect thereto.
ARTICLE VII
Survival
7.1 Survival. All representations, warranties,
covenants and agreements contained in this Agreement or the
Transaction Documents shall survive (and not be affected in any
respect by) the Closing, any investigation conducted by any party
hereto and any information which any party may receive.
Notwithstanding the foregoing, the representations and warranties
contained in or made pursuant to this Agreement and the related
indemnity obligations set forth in Sections 7.2(a)(i) and
7.3(a)(i) of the Aerospace Agreement shall terminate on, and no
claim or action with respect thereto may be brought after, the
date three years after the Closing Date, except that (a) the
representations and warranties contained in Sections 2.3 and 2.12
and the related indemnity obligations contained in Section 7.2 of
the Aerospace Agreement shall survive indefinitely and (b) the
representations and warranties contained in Sections 2.10, 2.14
and 2.20 and the related indemnity obligations contained in
Section 7.2 of the Aerospace Agreement shall survive until 30
days after the expiration of the applicable statute of
limitations (or extensions or waivers thereof). The
representations and warranties which terminate on the date three
years after the Closing Date and the representations and
warranties referred to in the foregoing clause (b), and the
Liability of any party hereto with respect thereto pursuant to
Article VII of the Aerospace Agreement, shall not terminate with
respect to any claim, whether or not fixed as to Liability or
liquidated as to amount, with respect to which the Indemnifying
Party has been given written notice prior to the date three years
after the Closing Date or such 30th day after the expiration of
the applicable statute of limitations (or extensions or waivers
thereof), as the case may be. Sellers hereby confirm their joint
and several obligations under Section 7.2 of the Aerospace
Agreement.
ARTICLE VIII
Employees And Employee Benefits
8.1 Scope of Article. This Article VIII contains the
covenants and agreements of the parties with respect to (a) the
status of employment of the employees of Sellers employed in the
Business ("Employees") upon the sale of the Business to Buyer,
and (b) the employee benefits and employee benefit plans provided
or covering such Employees and former employees of Sellers who
terminated employment with the Sellers while employed in the
Business or who retired from the Business ("Former Employees").
Nothing herein expressed or implied confers upon any Employee or
Former Employee of Sellers any rights or remedies of any nature
or kind whatsoever.
8.2 U.S. Employees. This Section 8.2 applies only to
Employees and Former Employees employed or previously employed by
Sellers in the United States.
(a) Employment. Buyer shall offer employment
effective as of the Closing Date to each Employee of a Seller who
is employed in the United States (a "U.S. Employee") and is
actively at work immediately prior to the Closing Date or is not
actively at work immediately prior to the Closing Date due solely
to vacation, holiday or jury duty. Such initial offer of
employment shall be for a position and for base salary or wages
which are comparable to that which such Employee had with Sellers
immediately prior to the Closing and shall include employee
benefits which are comparable in the aggregate to that which such
Employee had with Sellers immediately prior to the Closing;
provided, however, that no such employment shall be offered to
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. Buyer shall
offer employment to each other U.S. Employee who is not actively
at work immediately prior to the Closing Date (including, but not
limited to, any such employee who is not actively at work due to
medical leave, sick leave, short-term disability, long-term
disability, layoff or leave of absence) (an "Inactive Employee")
who is willing and able to return to work within 90 days after
the Closing Date or such later date as may be required by law,
with such employment with Buyer to commence on the date the
Inactive Employee first commences active employment with Buyer.
Sellers shall be responsible for any obligation to provide
employee benefits to an Inactive Employee prior to such
employee's date of hire by Buyer. U.S. Employees who accept
Buyer's offer of employment and become employees of Buyer shall
be referred to herein as "U.S. Transferred Employees."
Notwithstanding the foregoing, nothing herein shall be construed
to limit Buyer's ability thereafter to terminate the employment
of any Employee or to amend or terminate any employee benefit
plan or to otherwise change the terms and conditions of
employment of any Employee.
(b) Past Service Credit. Buyer shall credit the
service of all U.S. Transferred Employees with Sellers and their
Affiliates prior to the Closing Date for purposes of eligibility
and vesting under all employee benefit plans provided by Buyer
for U.S. Transferred Employees (but not for purposes of benefit
accrual). Buyer shall also: (i) cause to be waived any pre-
existing condition limitation under any Buyer medical plans
applicable to U.S. Transferred Employees or their dependents
(except to the extent that any such pre-existing condition
limitation would not have been waived under Sellers' medical
plans), and (ii) recognize (or cause to be recognized) the dollar
amount of all covered expenses incurred by U.S. Transferred
Employees and their dependents under Sellers' applicable medical
plans during the calendar year in which the Closing Date occurs
for purposes of satisfying such calendar year's deductibles and
co-payment limitations under any applicable Buyer medical plans;
provided, that the U.S. Transferred Employee enrolls in the
applicable Buyer medical plan at such time and in such manner as
is reasonably specified by Buyer.
(c) Severance; WARN Act. Sellers shall pay and be
solely liable for, and shall indemnify and hold AlliedSignal and
Buyer harmless against, any obligation, cost or expense for (i)
severance pay, termination indemnity pay, salary continuation,
special bonuses or like compensation under Sellers' plans,
policies or arrangements and (ii) liability under the WARN Act,
or any similar state or local law, arising from, relating to or
claimed by reason of the Closing or the transactions contemplated
by this Agreement or which result from or relate to actions taken
by Sellers on or before the Closing Date.
(d) Vacation. Buyer shall adopt and assume Sellers'
liability for accrued, unused vacation entitlement of U.S.
Transferred Employees as of the Closing to the extent listed on
the Balance Sheet.
(e) Workers Compensation. Sellers shall be
responsible for all workers compensation claims filed by or on
behalf of a U.S. Transferred Employee to the extent attributable
to events, occurrences or exposures prior to the Closing. Buyer
shall be responsible for all workers compensation claims filed by
or on behalf of a U.S. Transferred Employee to the extent
attributable to events, occurrences or exposures following the
Closing.
(f) Employment and Plan Liabilities. It is understood
and agreed that neither AlliedSignal nor Buyer is assuming any
obligations or liabilities arising under any Plan (except to the
extent provided in Section 8.2(d) above 8.2(g) below) or as a
result of any Employee's or Former Employee's employment with, or
termination of employment, from Sellers, and Sellers shall remain
responsible for any such obligations and liabilities.
(g) Employment Agreements. Buyer shall reimburse
Sellers any Liabilities incurred after the Closing Date under the
employee agreements listed under "Employee Agreement" on Schedule
2.20(a), other than the agreement relating to the employment of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
(h) Post-Closing Liability. AlliedSignal and Buyer
shall pay and be solely liable for, and shall indemnify and hold
Parent and Sellers harmless against, any obligation, cost or
expense for severance pay, termination pay, salary continuation,
special bonuses or like compensation under any Buyer plan, policy
or arrangement which result from, or relate to, actions taken by
AlliedSignal or Buyer or any Affiliate thereof after the Closing
Date.
(i) Cooperation. The parties agree to furnish each
other with such information concerning employees and employee
benefit plans, and to take all such other action, as is necessary
or appropriate to effect the transactions contemplated by this
Article VIII.
ARTICLE IX
Termination; Miscellaneous
9.1 Termination.
(a) This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time
prior to the Closing Date, as follows:
(i) by the mutual written agreement of Buyer and
Parent;
(ii) by Buyer or Parent if the Closing has not
occurred on or before September 30, 1998; provided,
however, that the right to terminate this Agreement
pursuant to this Section 9.1(a)(ii) shall be suspended
as to any party whose failure to fulfill any material
obligation under this Agreement shall have been the
cause of, or shall have resulted in, the failure of the
Closing to occur prior to such date until the fifth
Business Day after such failure has been cured; or
(iii) by Buyer or Parent in the event of the
issuance by any Governmental Entity of a final,
nonappealable order or injunction restraining or
prohibiting the consummation of the transactions
contemplated hereby.
(b) This Agreement shall terminate automatically upon
any termination of the Aerospace Agreement.
(c) Except for the obligations contained in
Section 6.1, the last sentence of Section 4.5 and this Article IX
(other than Sections 9.2, 9.13 and 9.14) and the representations
and warranties contained in Sections 2.16 and 3.8 (and the
related indemnity obligations under Sections 7.2(a)(i) and
7.3(a)(i) of the Aerospace Agreement, respectively), all of which
shall survive any termination of this Agreement, upon the
termination of this Agreement pursuant to Sections 9.1(a) or
(b), this Agreement shall forthwith become null and void, and no
party hereto or any of its officers, directors, employees,
agents, consultants, stockholders or principals shall have any
rights or Liabilities hereunder or with respect hereto, including
without limitation for any breach of warranty or representation;
provided, however, that nothing contained herein shall relieve
any party hereto from Liability for any willful failure to comply
with any covenant or agreement contained herein.
9.2 Further Assurances. From time to time after the
Closing, AlliedSignal, Buyer, Parent and Sellers shall execute
and deliver or cause to be executed and delivered such further
documents, certificates, instruments of conveyance, assignment
and transfer and take such further action as AlliedSignal, Buyer,
Parent or Sellers may reasonably request in order to more
effectively to sell, assign, convey, transfer, reduce to
possession and record title to any of the Purchased Assets to
Buyer or to better enable Buyer to complete, perform and
discharge any of the Assumed Liabilities. AlliedSignal, Buyer,
Parent and Sellers agree to cooperate with each other in all
reasonable respects to assure to Buyer the continued title to and
possession of the Purchased Assets in the condition and manner
contemplated by this Agreement. Each party hereto shall
cooperate and deliver such instruments and take such action as
may be reasonably requested by any other party hereto in order to
carry out the provisions and purposes of this Agreement and the
transactions contemplated hereby. AlliedSignal, Buyer, Parent
and Sellers shall cooperate and shall cause their respective
Affiliates, officers, employees, agents and representatives to
cooperate to ensure the orderly transition of the Business from
Sellers to Buyer and to minimize the disruption to the Business
resulting from the transactions contemplated hereby.
9.3 Entire Agreement; Amendments; Waivers. This
Agreement, the Confidentiality Agreement, and the documents
referred to herein and to be delivered pursuant hereto constitute
the entire agreement between the parties hereto pertaining to the
subject matter hereof, and supersede all prior and
contemporaneous agreements, understandings, negotiations and
discussions of the parties, whether oral or written. No
amendment, supplement, modification, waiver or termination of
this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of
any other provision or breach of this Agreement, whether or not
similar, unless otherwise expressly provided.
9.4 Benefit; Assignment. This Agreement shall be
binding upon and inure to the benefit of and shall be enforceable
by the parties hereto and their respective successors and
permitted assigns. This Agreement shall not be assigned by any
party hereto without the prior written consent of the other party
hereto; provided, however, that AlliedSignal or Buyer may assign
any or all of their respective rights hereunder to one or more
Affiliates of AlliedSignal or Buyer, as the case may be, without
the consent of Parent or Sellers provided that AlliedSignal or
Buyer, as the case may be, shall continue to be obligated to
perform all of its obligations hereunder.
9.5 No Presumption. AlliedSignal, Buyer, Parent and
Sellers have participated jointly in the negotiation and drafting
of this Agreement. In the event any ambiguity or question of
intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by AlliedSignal, Buyer, Parent
and Sellers, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of
any of the provisions of this Agreement.
9.6 Notices. Notices and other communications
provided for herein shall be in writing and shall be deemed given
only if delivered to the party personally or sent to the party by
telecopy, by registered or certified mail (return receipt
requested) with postage and registration or certification fees
thereon prepaid, or by any nationally recognized overnight
courier, addressed to the party at its address set forth below:
If to Parent or Banner Aerospace
Sellers:
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial
Officer
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
with copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to AlliedSignal or AlliedSignal Inc.
Buyer:
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as a party may from time to time
designate in writing in accordance with this section. All
notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed
to have been given on the date of receipt.
9.7 Terms Generally.
(a)(i) Words in the singular shall be held to
include the plural and vice versa and words of one gender shall
be held to include the other genders as the context requires,
(ii) the terms "hereof," "herein," and "herewith" and words of
similar import shall, unless otherwise stated, be construed to
refer to this Agreement as a whole (including all of the Annexes,
Schedules and Exhibits hereto) and not to any particular
provision of this Agreement, and Article, Section, paragraph,
Exhibit and Schedule references are to the Articles, Sections,
paragraphs, Exhibits and Schedules to this Agreement unless
otherwise specified, (iii) the word "including" and words of
similar import when used in this Agreement shall mean "including,
without limitation," unless otherwise specified, (iv) the word
"or" shall not be exclusive, and (v) provisions shall apply, when
appropriate, to successive events and transactions.
(b) Each reference in this Agreement (or in any other
document or instrument furnished to AlliedSignal or Buyer by
Parent or any Seller pursuant to this Agreement) to "the best of
Parent's and each Seller's knowledge", or words of similar import
referring to Parent and Sellers (including Parent and Sellers not
being aware of a particular event or other matter), means the
actual knowledge, after due inquiry, of each executive officer of
Parent and each of the Sellers.
9.8 Counterparts; Headings. This Agreement may be
executed in several counterparts, each of which shall be deemed
an original, but such counterparts shall together constitute but
one and the same Agreement. The Article and Section headings in
this Agreement are inserted for convenience of reference only and
shall not constitute a part hereof.
9.9 Severability. If any provision, clause or part of
this Agreement or the application thereof under certain
circumstances is held invalid or unenforceable, the remainder of
this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby.
9.10 No Reliance. Except for any assignees permitted
by Section 9.4 of this Agreement and the indemnified persons
pursuant to Sections 7.2 and 7.3 of the Aerospace Agreement: (i)
no third party is entitled to rely on any of the representations,
warranties or agreements of the parties hereto contained in this
Agreement; and (ii) the parties hereto assume no Liability to any
third party because of any reliance on the representations,
warranties or agreements of such parties contained in this
Agreement.
9.11 Governing Law. This Agreement shall be construed
and interpreted according to the laws of the State of New York,
without regard to the conflict of law principles thereof.
9.12 Submission to Jurisdiction; Waivers. The parties
hereto hereby irrevocably and unconditionally agree that:
(a) All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined in a New
York state or federal court sitting in the City of New York, and
the parties hereto hereby irrevocably submit to the exclusive
jurisdiction of such courts in any such action or proceedings and
irrevocably waive the defense of an inconvenient forum to the
maintenance of any such action or proceeding.
(b) Service of process in any such action or
proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form
of mail), postage prepaid, to such party at its address as
provided in Section 9.6.
9.13 Bulk Transfer. The parties hereto hereby waive
compliance with the provisions of any applicable bulk sales law
of any jurisdiction in connection with the transactions
contemplated hereby and no representation, warranty or covenant
contained in this Agreement shall be deemed to have been breached
as a result of such non-compliance. Parent and Sellers hereby
agree, jointly and severally, to indemnify, defend and hold
AlliedSignal and Buyer harmless from and against any and all
Losses arising out of or relating to claims which may be asserted
by third Persons, including Governmental Entities, against the
Purchased Assets or any Buyer Indemnified Parties (as defined in
the Aerospace Agreement) as a result of non-compliance with any
applicable bulk sales law. Nothing in this Agreement shall be
construed as an admission by any party as to the applicability of
any bulk sales laws.
9.14 Use of Names. During the first 180 days after the
Closing Date, Buyer shall have the right to use all of the logos,
trademarks and trade identification of Parent as are located at
the Acquired Real Property or on the Purchased Assets
(collectively, the "Trademarks"). Buyer's use of the Trademarks
shall be in accordance with such reasonable quality control
standards as shall be promulgated by Parent and provided to
Buyer. If Parent shall notify Buyer in writing of Buyer's
material failure to comply with such reasonable quality control
standards and Buyer continues to not comply with such reasonable
quality control standards for more than 20 days after receipt of
such notice, Parent shall have the right to terminate Buyer's
right under this Section 9.14 to use the Trademarks.
9.15 Relationship with Aerospace Agreement. The
parties acknowledge and agree that it is the intent of the
parties that, notwithstanding any other provision of this
Agreement or the Aerospace Agreement, the representations,
warranties and covenants contained in this Agreement and in the
Aerospace Agreement that (i) have substantially the same language
(without regard to the identity of the parties making such
representation and warranty or covenant) and (ii) contain either
the language "in the aggregate" or a similar combining concept or
a reference to a Material Adverse Effect (a "Collective
Representation" or a "Collective Covenant", as the case may be)
shall be deemed to be a single representation and warranty to be
a single covenant, as the case may be, for purposes of
determining whether such representation and warranty has been
breached or such covenant has been complied with and all relevant
facts relating to such Collective Representation or Collective
Covenant in both agreements shall be considered. As examples, if
there should be an issue regarding whether a Collective
Representation contained in this Agreement has been breached, the
parties would consider inaccuracies in such Collective
Representation as well as inaccuracies in the corresponding
Collective Representation in the Aerospace Agreement in
determining whether a breach of such Collective Representation
had occurred and in determining the materiality of any breach of
a Collective Representation relating to the Business, reference
shall be made to the Combined Business.
9.16 Schedules. All references herein to any Schedule
or to Annex 1.4 shall refer to the Schedule of the same title or
to Annex 1.4, as the case may be, which are attached to the
Aerospace Agreement, and such Schedule or Annex 1.4 shall be
considered a part of this Agreement as though attached hereto.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above written.
ALLIEDSIGNAL INC. BANNER AEROSPACE, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇▇ Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President Title: Senior Vice President
AS BAR PBH LLC ▇▇ ▇▇▇▇▇▇▇ AEROSPACE, INC.
By: ALLIEDSIGNAL INC. By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
BANNER AEROSPACE SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
ANNEX A
DEFINITIONS
The following terms shall have the respective meanings
ascribed to them in this Annex A. References to Sections
constitute references to Sections of the Agreement.
"Accounts Receivable" means all billed and unbilled accounts
receivable and all trade notes receivable relating to the
Combined Business whether recorded or unrecorded, including,
without limitation, all trade receivable from other divisions or
Affiliates of Parent and the Sellers.
"Acquired Real Property" means, collectively, the Leased
Real Property and Owned Real Property.
"Affiliate" of any Person means any Person directly or
indirectly controlling, controlled by or under common control
with such Person.
"Aerospace Agreement" means the Asset Purchase Agreement,
dated as of the date of this Agreement, by and among Parent,
Sellers listed in Annex A thereto, AlliedSignal and Buyer,
together with the Annexes, Schedules and Exhibits attached
thereto, as the same may be amended from time to time in
accordance with the terms thereof.
"Aerospace Acquired Assets" means the Acquired Assets as
defined in the Aerospace Agreement.
"Aerospace Assumed Liabilities" means the Assumed
Liabilities as defined in the Aerospace Agreement.
"Aerospace Excluded Assets" means the Excluded Assets as
defined in the Aerospace Agreement.
"Aerospace Non-Assumed Liabilities" means the Non-Assumed
Liabilities as defined in the Aerospace Agreement.
"Aerospace Purchased Assets" means the Purchased Assets as
defined in the Aerospace Agreement.
"Agreement" means the Asset Purchase Agreement, dated as of
December __, 1997, by and among Parent, BAS, ▇▇▇▇▇▇▇,
AlliedSignal and Buyer, together with the Annexes, Schedules and
Exhibits attached thereto, as the same may be amended from time
to time in accordance with the terms thereof.
"AlliedSignal" had the meaning set forth in the Preamble of
the Agreement.
"AlliedSignal Common Stock" means the common stock, par
value $1 per share, of AlliedSignal.
"AlliedSignal Reports" has the meaning set forth in Section
3.6.
"Antitrust Division" means the Antitrust Division of the
United States Department of Justice.
"Assets" means businesses, properties, assets, goodwill,
rights, interests and privileges of every kind, nature or
description, wherever located, whether real, personal or mixed,
tangible or intangible, and without regard to whether they have
value for accounting purposes or are carried on or reflected in
relevant books and records or financial statements.
"Assumed Liabilities" has the meaning set forth in Section
1.3(a).
"Assumed Tax Liabilities" means Tax liabilities for value-
added Taxes, real property Taxes, personal and intangible
property Taxes and payroll Taxes, in each case only to the extent
included on the Closing Balance Sheet.
"Average Trading Price" means, as of a specified date, the
average of the daily high and low closing prices of AlliedSignal
Common Stock as reported on the NYSE Composite Tape on each of
the twenty (20) consecutive trading days immediately preceding
(and not including) such date.
"BAS" has the meaning set forth in the Preamble to the
Agreement.
"Balance Sheet" has the meaning set forth in Section 2.6.
"Bid" has the meaning set forth in Section 2.8(d).
"BTG" means the Banner Technology Group.
"BTG Assets" has the meaning set forth in the Preamble to
the Agreement.
"Business" has the meaning set forth in the Recitals of the
Agreement.
"Business Day" or "business day" means any day other than a
Saturday, Sunday, or a day on which banking institutions in the
City of New York are authorized or obligated by law or executive
order to close.
"Buyer" has the meaning set forth in the Preamble of the
Agreement.
"Closing" has the meaning set forth in Section 1.6(a).
"Closing Date" has the meaning set forth in Section 1.6(a).
"Closing Date Balance Sheet" means the Closing Date Balance
Sheet as defined in the Aerospace Agreement.
"Closing Date Net Worth" means the Closing Date Net Worth as
defined in the Aerospace Agreement.
"Closing Date Shares" has the meaning set forth in Section
1.4.
"COBRA" has the meaning set forth in Section 2.20(c)(iii).
"Code" means the Internal Revenue Code of 1986, as amended.
"Combined Purchased Assets" means, collectively, the
Purchased Assets and the Purchased Assets as defined in the
Aerospace Agreement.
"Combined Business" means the Business and Business as
defined in the Aerospace Agreement.
"Competitive Activities" has the meaning set forth in
Section 6.4(a).
"Confidentiality Agreement" means that certain
confidentiality agreement dated June 27, 1997 between
AlliedSignal and Parent.
"Confidential Information" has the meaning set forth in
Section 6.5.
"Contracts" means (a) all written and oral contracts,
licenses, commitments, agreements and instruments, including all
customer contracts, operating contracts and distribution
contracts relating to the Business, (b) all sales and purchase
orders and supply agreements and other agreements relating to the
Business, (c) all leases of Equipment and Real Property relating
to the Business and (d) all other contracts, licenses, agreements
and instruments relating to the Business; provided, however, that
the term "Contract" shall not include any collective bargaining
agreement or any employment agreement or other Plan.
"DA" means Dallas Aerospace, Inc., a Texas corporation and a
wholly-owned Subsidiary of Parent.
"DA Agreement" shall mean the rights and obligations arising
under the contingent payment provisions set forth in the
Agreement dated January 16, 1997 relating to the acquisition of
▇▇▇▇▇▇▇.
"Debt" means, with respect to any Person, the following
Liabilities, whether incurred by such Person, directly or
indirectly, without duplication:
(i) its Liabilities for borrowed money;
(ii) its Liabilities for the deferred purchase
price of property acquired by it (excluding accounts
payable arising in the ordinary course of business but
including, without limitation, all liabilities created
or arising under any conditional sale or other title
retention agreement with respect to any such property);
(iii) the amount of the obligation of such
Person as the lessee under any Capital Lease that
would, in accordance with GAAP, appear as a Liability
on a balance sheet of such Person ("Capital Lease"
meaning, at any time, a lease with respect to which
such Person, as lessee, is required concurrently to
recognize the acquisition of an asset and the
incurrence of a Liability in accordance with GAAP);
(iv) amounts secured by any Lien with respect to
any property owned by such Person (whether or not it
has assumed or otherwise become liable for such
amounts);
(v) all of its Liabilities in respect of letters
of credit or instruments serving a similar function
issued or accepted for its account by banks and other
financial institutions (whether or not representing
obligations for borrowed money);
(vi) any Guarantee of such Person with respect to
Liabilities of any Person of the character described in
any of the clauses described in (i) through (vi) above
("Guarantee" meaning, with respect to any Person, any
obligation (except the endorsement in the ordinary
course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or
in effect guaranteeing any indebtedness, dividend or
other Debt or obligation of any other Person in any
manner, whether directly or indirectly, including
(without limitation) obligations incurred through an
agreement, contingent or otherwise, by such Person);
(vii) all Liabilities of any Subsidiary of
such Person of the character described in clauses (i)
through (vii) above; and
(viii) all Liabilities of the character
described in clauses (i) through (vii) above with
respect to which, and to the extent that, such Person
remains legally liable, notwithstanding that such
Liability or obligation is deemed extinguished under
GAAP.
"Employees" has the meaning set forth in Section 8.1.
"Environmental Claim" shall mean any third party or
governmental written claim, notice, request for information,
demand, investigation, lawsuit, proceeding, judgment, award,
penalty, order or other action that could expose Parent, the
Sellers, AlliedSignal or Buyer to Losses under any Environmental
Law or to Losses for personal injuries (including death) or
property damage relating to or arising from the presence of, or
exposure to, Hazardous Materials.
"Environmental Law" means all applicable Laws relating to
the protection of the environment (including, but not limited to,
natural resources) and human health and safety, including,
without limitation (a) all requirements pertaining to reporting,
licensing, permitting, investigation and remediation of
emissions, discharges, releases or threatened releases of
Hazardous Materials or other environmental conditions into the
air, surface water, groundwater or land or relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, and (b)
all requirements pertaining to the protection of the health and
safety of employees and other workers, and the protection of or
compensation to individuals from or related to exposures to
Hazardous Materials.
"Environmental Liability" means any Liability (existing at,
or arising after, the Closing) under Environmental Law, or any
remedial action (at or after the Closing), in connection with the
Purchased Assets or the Business to the extent arising from any
condition (including any Hazardous Materials condition) existing,
or any act or omission the Sellers or any of their predecessors
or any of their past, present or future Subsidiaries, at or prior
to the Closing Date, including claims, demands, assessments,
judgments, orders, causes of action (including toxic tort suits),
notices of actual or alleged violations or Liability (including
such notices regarding the disposal or release of Hazardous
Materials on the Acquired Real Property or elsewhere),
proceedings and any associated Losses.
"Environmental Permit" means any Permit issued under any
Environmental Law or issued by any Governmental Entity
responsible for environmental matters.
"Equipment" means all tangible assets and properties, except
Real Property, owned, used or held for use by either Seller,
including cars, trucks and other transportation equipment,
machinery and equipment, tools, spare parts, furniture, office
equipment, furnishings and fixtures and machinery and equipment
under order or construction.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Escrow Agent" means the escrow agent under the Escrow
Agreement.
"Escrow Agreement" means the Escrow Agreement as defined in
the Aerospace Agreement.
"Estimated Share Number" has the meaning set forth in
Section 1.4.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Assets" has the meaning set forth in Section
1.2(b).
"Fairchild" means The ▇▇▇▇▇▇▇▇▇ Corporation, a Delaware
corporation.
"FAA" means the Federal Aviation Administration.
"Financial Statements" has the meaning set forth in
Section 2.6.
"FIRPTA Affidavit" has the meaning set forth in Section
1.7(a)(vii).
"Former Employees" has the meaning set forth in Section 8.1.
"FTC" means the United States Federal Trade Commission.
"GAAP" means United States generally accepted accounting
principles, consistently applied.
"Government Contract" shall mean any written prime contract,
subcontract, grant or cooperative agreement with (i) the US
Government, (ii) any prime contractor of the US Government or
(iii) any subcontractor with respect to any contract described in
clauses (i) or (ii) above.
"Governmental Entity" means (a) any multinational, federal,
provincial, state, municipal, local or other governmental or
public department, court, commission, board, bureau, agency,
legislative or quasi-legislative body or instrumentality,
domestic or foreign; (b) any subdivision, agent, commission,
board, or department, authority, or similar body or
instrumentality of any of the foregoing; or (c) any quasi-
governmental or private body exercising any regulatory,
expropriation or taxing governmental authority under or for the
account of any of the foregoing.
"Hazardous Material" means any substance, material or waste
(a) the presence of which requires investigation or remediation
under any Environmental Law, (b) which is regulated by an
applicable Governmental Entity, which substance, material or
waste includes, without limitation, petroleum and its by-
products, friable asbestos, and any material or substance which
is defined as a "hazardous waste," "hazardous substance,"
"hazardous material," "restricted hazardous waste," "industrial
waste," "solid waste," "contaminant," "pollutant," "toxic waste"
or "toxic substance" under any provision of Environmental Law,
(c) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous, or
(d) the presence of which causes or threatens to cause a nuisance
or trespass to any property or poses or threatens to pose a
hazard to the health or safety of individuals on or about any
such property.
"▇▇▇▇▇▇▇" has the meaning set forth in the Preamble to this
Agreement.
"▇▇▇▇▇▇▇ Adjustment Amount" means the amount determined in
accordance with Section 1.4(b) of the Aerospace Agreement as
allocated to the Initial Purchase Price pursuant to Section 9.15
of the Aerospace Agreement.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
"Inactive Employee" has the meaning set forth in Section
8.2(a).
"Indemnification Escrow Shares" means (i) as of the Closing
Date, a number of shares of AlliedSignal Common Stock equal to
five percent (5%) of the Estimated Share Number and (ii)
thereafter, the initial number of Indemnification Escrow Shares
less any Indemnification Escrow Shares from time to time released
from escrow pursuant to Section 1.5(b) or (d) of the Aerospace
Agreement.
"Indemnifying Party" means the Indemnifying Party as defined
in the Aerospace Agreement.
"Initial Purchase Price" has the meaning set forth in
Section 1.4.
"Intellectual Property" means all foreign and domestic
patents (including all reissues, divisions, continuations and
extensions thereof), patent rights, service marks, trademarks and
tradenames, trade dress, all product names, all assumed or
fictitious names and the logos associated therewith, copyrights,
applications for the foregoing, licenses and other contractual
rights with respect to the foregoing and other such property and
intangible rights owned, used or held for use by either Seller,
including financial and marketing business data, pricing and cost
information, business and marketing plans and customer and
suppliers lists, together with the goodwill of the Business in
connection with which such trademarks, tradenames, product names
and service marks are used.
"Inventory" means all inventory of the Combined Business,
including finished goods, work-in-progress, raw materials,
operating chemical and catalysts, parts, accessories, packaging,
manufacturing, administrative and other supplies on hand, goods
held for sale or lease or to be furnished under Assumed
Contracts, and other inventory owned, used or held for use by
either Seller.
"IRS" means the United States Internal Revenue Service.
"Laws" means all laws, constitutions, statutes, codes,
ordinances, decrees, rules, regulations, municipal by-laws,
judicial or arbitral or administrative or ministerial or
departmental or regulatory judgments, orders, decisions, rulings
or awards, consent orders, consent decrees, policies, voluntary
restraints, guidelines, or any provisions or interpretations of
the foregoing, including general principles of common and civil
law and equity, binding on or affecting the Person referred to in
the context in which such word is used.
"Leased Real Property" means all leased Real Property
relating to the Business including, without limitation, all Real
Property listed on Part B of Schedule 2.13(a).
"Liabilities" means, as to any Person, all debts,
liabilities, obligations and responsibilities of any kind or
nature whatsoever of such Person, whether direct or indirect,
fixed or contingent, known or unknown, accrued, vested or
otherwise, whether in contract, tort, strict Liability or
otherwise, and whether or not actually reflected, or required by
GAAP to be reflected, in such Person's balance sheets or other
books and records.
"Lien" means any lien, charge, claim, pledge, security
interest, conditional sale agreement or other title retention
agreement, lease, mortgage, security agreement, right of first
refusal, option, restriction, tenancy, license, covenant, right
of way, easement or other encumbrance (including the filing of,
or agreement to give, any financing statement under the Uniform
Commercial Code or statute or law of any jurisdiction).
"Major Customer" means any customer of the Combined Business
that accounted for $500,000 or more in revenues of the Combined
Business in the 1997 fiscal year or could reasonably be expected
to account for more than $500,000 or more in revenues of the
Combined Business in the 1998 fiscal year.
"Major Supplier" means any supplier of the Combined Business
(including any supplier of Intellectual Property) that accounted
for $1,000,000 or more in sales to the Combined Business in the
1997 fiscal year or could reasonably be expected to account for
more than $1,000,000 or more in sales to the Combined Business in
the 1998 fiscal year.
"Material Adverse Effect" means (i) a material adverse
effect upon, or material adverse change in, the operations,
Assets, Liabilities, condition (financial or otherwise), or
results of operations of the Combined Business, taken as a whole
(ii) any event, condition, circumstance or change that is
reasonably likely to have a Material Adverse Effect referred to
in preceding clause (i), or (iii) a significant risk that Buyer
and the Buyer under the Aerospace Agreement, in any material
respect, will not be able after the Closing to operate the
Combined Business substantially as operated by, or to own,
possess and use the Purchased Assets and the Aerospace Acquired
Assets substantially as owned, possessed and used by, the Sellers
and the Sellers under the Aerospace Agreement, taken as a whole,
as of the date hereof; provided, however, that the loss of
business from customers and suppliers of the Combined Business
(including through termination of contracts or reduction of
purchases) shall not be deemed a Material Adverse Effect unless
the condition in Section 5.1(e) of the Aerospace Agreement has
not been satisfied.
"Non-Assumed Liabilities" has the meaning set forth in
Section 1.3(b).
"Novation Agreement" has the meaning set forth in Section
4.15.
"NYSE" means the New York Stock Exchange, Inc.
"OSHA" has the meaning set forth in Section 2.9(a) hereof.
"Owned Real Property" means all Real Property owned by
Sellers, including, without limitation, all Real Property listed
on Part A of Schedule 2.13(a).
"Parent" has the meaning set forth in the Preamble of the
Agreement.
"Parent Subsidiaries" means the direct or indirect
Subsidiaries of Parent or any other corporation or entity in
which Parent owns a majority of the capital stock or other equity
interest.
"Parent Reports" has the meaning set forth in Section 2.28.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permits" means all franchises, approvals, permits,
authorizations, licenses, orders, registrations, certificates,
variances, exemptions and other similar permits or rights
obtained from any Governmental Entity relating to the conduct of
the Business or the Acquired Real Properties and all pending
applications therefor.
"Permitted Liens" means (a) Liens securing Taxes,
assessments, governmental charges or levies, all of which are not
yet due and payable, (b) Liens (other than any Lien imposed by
ERISA) incurred or deposits made in the ordinary course of the
Business and on a basis consistent with past practice in
connection with worker's compensation, unemployment insurance or
other types of social security, (c) mechanics, materialman's,
carrier's, warehousemen's, landlords and other similar Liens
under state or common law or (d) such other Liens which,
individually and in the aggregate, do not and would not detract
from the value of or impair the use of any Purchased Asset; it
being understood that to the extent a Permitted Lien relates to
or arises from a Non-Assumed Liability, the applicable Seller
shall still be liable for such Non-Assumed Liability to the
extent set forth herein.
"Person" means an individual, a corporation, a partnership,
a limited liability company, an association, a firm, a
Governmental Entity, a trust or other entity or organization.
"Plans" has the meaning set forth in Section 2.20(a)(iii).
"PTO" means the United States Patent and Trademark Office.
"Purchase Price Escrow Shares" means a number of shares of
AlliedSignal Common Stock equal to one percent (1%) of the
Estimated Share Number.
"Purchased Assets" has the meaning set forth in
Section 1.2(a).
"Real Property" means all real property, together with all
fixtures, fittings, buildings, structures and other improvements
erected thereon, and easements, rights of way, water lines,
rights of use, licenses, hereditaments, tenements, privileges and
other appurtenances thereto (such as appurtenant rights in and to
public streets).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended.
"Seller" and "Sellers" have the respective meanings set
forth in the Preamble of the Agreement.
"Small Licenses" has the meaning set forth in
Section 2.15(d).
"Subsidiary" of any Person means any corporation,
partnership, joint venture, limited liability company, trust or
other entity with respect to which such Person directly or
indirectly owns or controls more than 50% of (i) the issued and
outstanding capital stock having ordinary voting power to elect a
majority of the board of directors or other governing body of
such corporation (irrespective of whether at the time capital
stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency),
(ii) the interest in the capital or profits of such partnership,
joint venture or limited liability company or (iii) the
beneficial interest in such trust.
"Tax" means any tax imposed under Subtitle A of the Code and
any net income, alternative or add-on minimum tax, gross income,
gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, license, lease, service, service use,
withholding on amounts paid to or by either Seller, payroll,
employment, excise, severance, stamp, capital stock, occupation,
property, environmental or windfall profits tax, premium, custom
duty or other tax, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest,
penalty, addition to tax or additional amount imposed by any
Governmental Entity responsible for the imposition of any such
tax (domestic or foreign) (a "Tax Authority").
"Tax Authority" has the meaning set forth in the definition
of "Tax".
"Technology" means all formulae, processes, procedures,
designs, ideas, research records, inventions (whether or not
patentable), records of inventions, test information, technical
information, engineering data, marketing know-how, proprietary
information, manufacturing information, know-how, and trade
secrets (and all related manuals, books, files, journals, models,
instructions, patterns, drawings, blueprints, plans, designs
specifications, equipment lists, parts lists, descriptions, data,
art work, software, computer programs and source code data
related thereto including all current and historical data bases)
owned, used or held for use by either Seller ( it being
understood that, to the extent any such technology is licensed to
a Seller, "Technology" shall mean any and all rights of such
Seller under such license).
"Third Party Rights" has the meaning set forth in Section
1.2(a)(xi).
"Trademarks" has the meaning set forth in Section 9.14.
"Transaction Documents" has the meaning set forth in
Section 2.3.
"Transfer Taxes" means all state, local and foreign sales,
use, transfer, real property transfer, documentary stamp,
recording and other similar taxes arising from and with respect
to the sale and purchase of the Purchased Assets.
"U.S. Employee" has the meaning set forth in Section 8.2(a).
"US Government" shall mean the United States Government and
any agencies, instrumentalities and departments thereof.
"U.S. Transferred Employees" has the meaning set forth in
Section 8.2(a).
"WARN Act" means the Worker Adjustment and Retraining
Notification Act, as codified at 29 U.S.C. 2101 - 2109, as
amended.
ANNEX B
Jurisdictions of Organization
Name of Entity Jurisdiction of Organization
▇▇ ▇▇▇▇▇▇▇ Aerospace, Inc. Missouri
Banner Aerospace Services, Inc. Ohio
AMENDMENT NO. 2 TO ASSET PURCHASE AGREEMENTS,
REGARDING ESCROW SHARES, DATED JANUARY 13, 1998
Reference is made to (1) that certain Asset Purchase Agreement,
dated December 8, 1997, as amended by Amendment No. 1 dated
January 13, 1998, among Banner Aerospace, Inc., AlliedSignal
Inc., AS BAR LLC, and the Sellers as defined in such agreement
(the "Banner Agreement"), and (2) that certain Asset Purchase
Agreement, dated December 8, 1997, as amended by Amendment No. 1
dated January 13, 1998, among Banner Aerospace, Inc., ▇▇ ▇▇▇▇▇▇▇
Aerospace, Inc., Banner Aerospace Services, Inc., AlliedSignal
Inc. and AS BAR PBH.(the "▇▇▇▇▇▇▇ Agreement"). The Banner
Agreement and the ▇▇▇▇▇▇▇ Agreement are referred to herein
collectively as the "Agreements" and each is individually
referred to as an "Agreement." Capitalized terms not otherwise
defined herein shall have the definitions ascribed to them in the
Agreements
.
Section 1.5 of each Agreement calls for the delivery to the
Escrow Agent of certain Purchase Price Escrow Shares and
Indemnification Escrow Shares (collectively, the "Escrow Shares")
to be held in escrow pursuant to an Escrow Agreement. The total
number of Escrow Shares is to be equal to six percent (6%) of the
Estimated Share Numbers under both Agreements.
Section 1.5 of the Banner Agreement calls for the release of
Escrow Shares, upon the occurrence of certain conditions, to
Parent. Notwithstanding any provision of either Agreement that
may prescribe or suggest otherwise, all parties to the Agreements
agree, for good and valuable consideration, that the Agreements
are hereby amended as follows and that all provisions of the
Agreements inconsistent with the following shall be interpreted
in a manner consistent with the following:
(a) notwithstanding the last clause of Section 1.4 of the
Agreements, Closing Date Shares to be delivered by Buyer to
Sellers (after provision for the Escrow Shares) shall be
delivered to Sellers as set forth on Exhibit 1 hereto;
(b) notwithstanding any other provision of the Escrow
Agreement and the Agreements, the Escrow Shares shall be
available to satisfy claims against Parent and all Sellers
against Purchase Price Escrow Shares and Indemnification Escrow
Shares as contemplated by the Agreements, to the extent of such
Escrow Shares and pursuant to the terms and conditions of the
Agreements and the Escrow Agreement, notwithstanding the fact
that the Escrow Shares shall be shares represented by
certificates in the names of Aircraft Bearing Corporation ("ABC")
and Aircraft Bearing Support, Inc. ("ABS") only and not in the
name of Parent or any other Seller;
(c) neither Parent nor any Seller will assert, as to any
claim or demand for the release of Escrow Shares to a Buyer that
is otherwise appropriate under the Agreements or the Escrow
Agreement, that any Escrow Shares are unavailable to satisfy any
such claim or demand due to the fact that such Escrow Shares are
shares represented by certificates in the names of ABC and ABS
and not in the name of Parent or any other Seller;
(d) any Escrow Shares to be released to Parent or any
Seller pursuant to the Agreements and the Escrow Agreement shall
be released pro rata to ABC and ABS in accordance with Annex A to
the Escrow Agreement;
(e) in the event that either Buyer shall owe Parent and
Sellers additional purchase consideration as a result of Section
1.6(f) of the Agreements, such additional consideration shall be
distributed to Parent and Sellers in the proportions set forth in
the "Distribution of Consideration" sections of Exhibit 1 hereto;
(f) nothing herein or contemplated hereby shall diminish in
any way any responsibility or obligation of Parent or any Seller
to AS or any Buyer.
This document constitutes an amendment to the Banner Agreement
and to the ▇▇▇▇▇▇▇ Agreement.
▇▇▇▇▇ Industries, Inc. Aerospace Bearing Support,
Inc.
By:___________________
By:___________________
Aircraft Bearing Banner AerospaceServices,
Corporation Inc.
By:___________________ By:___________________
Banner Distribution, Inc. Burbank Aircraft Supply,
Inc.
By:___________________
By:___________________
Harco, Inc. PacAero
By:___________________ By:___________________
▇▇ ▇▇▇▇▇▇▇ Aerospace, Inc. AlliedSignal Inc.
By:___________________ By:___________________
AS BAR LLC AS BAR PBH LLC
By:___________________ By:___________________