ASSET PURCHASE AGREEMENT
among
ORBIT INTERNATIONAL CORP.,
CABOT COURT, INC.,
ASTROSYSTEMS, INC.
and
▇▇▇▇▇▇▇ ELECTRONICS, INC.
As of January 11, 1996
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT made as of the 11th day of
January, 1996 by and among Astrosystems, Inc., a Delaware
corporation ("Astrosystems"), ▇▇▇▇▇▇▇ Electronics, Inc., a
New York corporation and wholly-owned subsidiary of
Astrosystems ("▇▇▇▇▇▇▇" and collectively with Astrosystems,
the "Sellers"), Orbit International Corp. ("Orbit"), a
Delaware corporation, and Cabot Court, Inc., a Delaware
corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Sellers are engaged, among other things, in
the manufacture of power supplies, AC power sources,
frequency converters, UPS and associated analytical
equipment and other electronic equipment;
WHEREAS, upon the terms and conditions set forth
herein, Sellers desire to sell and Buyer desires to purchase
certain of the assets, and to assume certain of the
liabilities, of each of the Sellers, as specified herein;
and
WHEREAS, Orbit has agreed to guarantee Buyer's
obligations.
NOW, THEREFORE, in consideration of the mutual
promises, covenants and agreements contained herein and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto do hereby agree as follows:
1. Certain Definitions. The following terms, as used
herein, have the following meanings:
"Affiliate" means any individual, corporation,
partnership or other entity directly or indirectly
controlling, controlled by or under common control with a
party.
"Business Day" means any day excluding Saturday,
Sunday and any day which is a legal holiday under the laws
of the State of New York on which banking institutions
located in such state are closed.
"Closing Date" shall have the meaning set forth in
Section 5 hereof.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Contract" means all executory contracts,
commitments, agreements or arrangements, leases, licenses,
notes, purchase orders, letters of credit, instruments,
obligations, commitments, purchase and sales orders, options
and quotations (whether any of the foregoing shall be
written or oral, express or implied) relating primarily to
the Acquired Businesses (as hereinafter defined), to which
either Seller is a party and pursuant to which any of the
Assets (as hereinafter defined) is bound.
"ERISA" means the Employee Retirement and Income
Security Act of 1974, as amended.
"Governmental Authority" means administrative
agency, bureau, board, commission, office, authority,
department or other governmental body or agency.
"Liens" means any mortgage, pledge, security
interest, title defect or objection, lien, charge or
encumbrance of any kind, including, without limitation, any
lease, license or other right of occupancy, possession or
use, or any conditional sales contract or other title or
interest retention arrangement.
"Permits" means all permits, licenses, franchises,
approvals, consents or orders of, filings with, or
notifications to, all governmental authority, whether
federal, state, local or foreign or any other person
relating primarily to the Acquired Businesses.
"Permitted Liens" means Liens for current Taxes
(as hereinafter defined) not yet due.
"Required Consents" means (i) the Shareholder
Approval (as defined in Section 6.3 hereof), and (ii) the
consent to the assignment of such Contracts, if any, as are
listed on the "Required Consents" section of Schedule 6.3
hereof.
2. Purchase and Sale of Assets.
2.1 Purchase and Sale of Assets. Upon the terms and
subject to the conditions set forth in this Agreement, at
the closing (the "Closing") of the transactions contemplated
hereby on the Closing Date:
(a) Astrosystems shall sell, transfer, convey,
assign and deliver to Buyer, and Buyer shall purchase and
acquire from Astrosystems, free and clear of any and all
Liens (other than Permitted Liens), certain of the assets of
Astrosystems relating to its Military division (the
"Military Division"), as set forth below as the same shall
exist on the Closing Date (collectively, the "Military
Assets"). The Military Assets shall include all of
Astrosystems' right, title and interest in and to the
following items to the extent that such items primarily
relate to, or are primarily used or held in connection with,
the business of the Military Division:
(i) Fixtures, Furniture, Equipment, etc.
All fixtures, furniture, furnishings, machinery,
accessories, computers and peripheral devices, testing
equipment and office and other equipment, whether fully or
partially depreciated, appliances, vehicles and any
replacement and spare parts for any such assets, other than
any of the foregoing identified on Schedule 2.2 hereof
(collectively, "Military Fixed Assets");
(ii) Inventory and Supplies. All (A) raw
materials, work in process and finished products, (B) stock
in trade, goods, supplies and other products, (C) office
supplies and similar materials, and (D) wrapping, supply and
packaging items, promotional materials and similar items,
wherever located (collectively, "Military Inventory");
(iii) Permits. All of Astrosystems'
rights under all Permits, including, without limitation, the
Permits listed on Schedule 6.12 hereof (to the extent
transfer is permitted by law and by the terms of such
Permits);
(iv) Contracts and Agreements, etc. The
Contracts entered into by Astrosystems which primarily
relate to the Military Division which are set forth on
Schedule 2.1(a)(iv) attached hereto.
(v) Claims Against Third Parties. All
claims against third parties for inventory sold on or after
the Closing Date under any manufacturer's or vendor's
warranties and insurance claims and proceeds;
(vi) Goodwill. All of the goodwill and going
concern value relating to the Military Division or any of
the Military Assets;
(vii) Copyrights, Patents and Trademarks.
All Intellectual Property (as defined in Section 6.15
hereof) relating to the Military Division;
(viii) Drawings. All drawings ("Military
Drawings") and bills of material ("Military Bills of
Material") relating to products manufactured by the Military
Division; and
(ix) Other Assets. All other intangible and
tangible assets of Astrosystems primarily relating to the
Military Division and relevant to Buyer's continued
operation of the Military Division following the Closing
(other than the Excluded Assets, as hereinafter defined),
including, without limitation, all computer software and
software codes and electronic data; all supplier
information; all customer lists and customer correspondence;
all sales records; all research, statistical, production,
marketing and promotional materials, records, files, reports
and other documents and data; all distribution records; all
business post office boxes and business telephone listings;
all research results and other know-how; and all other
materials, records, files and data, in whatever form
contained.
(b) ▇▇▇▇▇▇▇ shall sell, transfer, convey, assign
and deliver to Buyer, and Buyer shall purchase and acquire
from ▇▇▇▇▇▇▇, free and clear of any and all Liens, other
than Permitted Liens, certain of its assets as set forth
below, as the same shall exist on the Closing Date
(collectively, the "▇▇▇▇▇▇▇ Assets" and together with the
Military Assets, the "Assets"). The ▇▇▇▇▇▇▇ Assets shall
include all of ▇▇▇▇▇▇▇'▇ right, title and interest in and to
the following:
(i) Fixtures, Furniture, Equipment, etc.
All fixtures, furniture, furnishings, machinery,
accessories, computers and peripheral devices, testing
equipment and office and other equipment, whether fully or
partially depreciated, appliances, vehicles and any
replacement and spare parts for any such assets, other than
any of the foregoing identified on Schedule 2.2 hereof
(collectively, the "▇▇▇▇▇▇▇ Fixed Assets", and together with
the Military Fixed Assets, the "Fixed Assets");
(ii) Inventory and Supplies. All (A) raw
materials, work in process and finished products, (B) stock
in trade, goods, supplies and other products, (C) office
supplies and similar materials, and (D) wrapping, supply and
packaging items, promotional materials and similar items,
wherever located (collectively, the "▇▇▇▇▇▇▇ Inventory", and
together with the Military Inventory, the "Inventory");
(iii) Permits. All of ▇▇▇▇▇▇▇'▇ rights
under all Permits, including, without limitation, the
Permits listed on Schedule 6.12 hereof (to the extent
transfer is permitted by law and by the terms of such
Permits);
(iv) Contracts and Agreements, etc. The
Contracts entered into by ▇▇▇▇▇▇▇ which are set forth on
Schedule 2.1(a)(iv) attached hereto.
(v) Claims Against Third Parties. All
claims against third parties for inventory sold on or after
the Closing Date under any manufacturer's or vendor's
warranties and insurance claims and proceeds;
(vi) Name. The name "▇▇▇▇▇▇▇", and any
rights relating thereto;
(vii) Goodwill. All of the goodwill and
going concern value relating to the business of ▇▇▇▇▇▇▇ or
any of the ▇▇▇▇▇▇▇ Assets;
(viii) Copyrights, Patents and Trademarks.
All Intellectual Property (as defined in Section 6.15
hereof) relating to ▇▇▇▇▇▇▇; and
(ix) Drawings. All drawings (together with
the Military Drawings, the "Drawings") and bills of material
(together with the Military Bills of Material, the "Bills of
Material") relating to products manufactured by ▇▇▇▇▇▇▇; and
(x) Other Assets. All other intangible and
tangible assets relevant to Buyer's continued operation of
the business of ▇▇▇▇▇▇▇ following the Closing, including,
without limitation, all computer software and software codes
and electronic data; all supplier information; all customer
lists and customer correspondence; all sales records; all
research, statistical, production, marketing and promotional
materials, records, files, reports and other documents and
data; all distribution records; all business post office
boxes and business telephone listings; all research results
and other know-how; and all other materials, records, files
and data, in whatever form contained.
2.2 Excluded Assets. Notwithstanding any other
provision of this Agreement, Sellers shall not sell, assign
or transfer to Buyer, and Buyer shall not purchase from
Sellers, any of the following assets (collectively, the
"Excluded Assets"):
(a) This Agreement. All rights of Sellers under
this Agreement and any documents delivered or received in
connection herewith;
(b) Corporate Records. (i) All books, records
and other assets of Sellers relating primarily to corporate
level activities, including, without limitation, those
relating to filings with the SEC and the IRS and those
relating to accounting and tax functions, (ii) any corporate
minute books, stock ledgers and other corporate books and
records of either Seller, (iii) all books and records
relating to the Industrial Products Division of
Astrosystems, and (iv) all books and records not relating to
the Assets or the Assumed Liabilities;
(c) Name. The name "Astrosystems", and any
rights thereto, including, without limitation, any trademark
registrations, subject to the provisions of Section 8.16
hereof;
(d) Third Party Claims. All claims against third
parties for inventory sold prior to the Closing, including,
without limitation, rights under any manufacturer's or
vendor's warranties and insurance claims and proceeds with
respect to such inventory, and all other claims against
third parties arising from or in connection with the
Acquired Businesses or the Assets prior to the Closing Date;
(e) Cash, Accounts Receivable, and Cash
Equivalents All of the cash, funds on deposit with
financial institutions and in checking accounts, marketable
and other securities, accounts receivable and other cash
equivalents of either Seller;
(f) Tax Refunds. All federal, state and local
income tax refunds due either Seller;
(g) Real Property. Title to any real property
owned by Sellers and all buildings and other structures
located on such real property, and leasehold interests in
and to any real property;
(h) Security Deposits and Bonds. Sellers' right
in and to all security deposits with third parties and all
security bonds;
(i) Prepaid Expenses, etc. All prepaid expenses
and rentals;
(j) Equipment. Sellers' right, title and
interest in and to certain furniture, fixtures and equipment
identified on Schedule 2.2 hereof;
(k) Industrial Products Division. Astrosystems'
right, title and interest in and to all of its intangible
and tangible assets that primarily relate to, or are
primarily used or held in connection with, the business of
its Industrial Products Division;
(l) AstroPower. Astrosystems' right, title and
interest in and to all intangible and tangible assets that
primarily relate to AstroPower, Inc., including, without
limitation, its shares of Common Stock therein and its
right, title and interest in and to a certain License
Agreement with the University of Delaware and a certain
Sublicense Agreement with AstroPower, Inc.
3. Assumption of Liabilities.
3.1 Assumption of Liabilities by Buyer. At the
Closing, Buyer shall assume and thereafter pay, perform,
satisfy and discharge only the following obligations and
liabilities of Sellers (collectively, the "Assumed
Liabilities"):
(a) Obligations Under Certain Agreements. The
liabilities and obligations of Sellers under (i) the
Contracts and Permits that are listed on Schedules
2.1(a)(iv) and 6.12 hereof, and (ii) the Contracts and
Permits that are entered into in the ordinary course of the
business of the Military Division and the business of
▇▇▇▇▇▇▇ (such businesses, collectively, the "Acquired
Businesses") in accordance with past practice or not
required to be so listed on the aforesaid Schedules, to the
extent that such Contracts are wholly or partially executory
on the Closing Date ((i) and (ii) collectively referred to
herein as the "Assumed Contracts");
(b) Employee Obligations. The liabilities and
obligations assumed by Buyer pursuant to Section 8.11
hereof; and
(c) Liabilities After Closing. All liabilities
and obligations arising from or in connection with the
Acquired Businesses or the Assets on or after the Closing
Date as a result of the conduct of the business of the
Acquired Businesses after such date. Buyer will develop and
implement a procedure for marking or otherwise identifying
(e.g., by serial number) products to facilitate
identification of such products as sold on or after the
Closing Date.
(d) Warranty Obligations. All after-sale and
warranty obligations with respect to products manufactured
and sold by the Acquired Businesses prior to the Closing
Date.
3.2 Excluded Liabilities. Buyer is not assuming or
agreeing to pay, perform, assume or discharge, or otherwise
be responsible for, any liabilities of Sellers, fixed or
contingent, known or unknown, accrued or unaccrued other
than the Assumed Liabilities, whether arising before or
after the Closing Date (collectively, the "Excluded
Liabilities").
3.3 Novation. Buyer shall use its reasonable efforts
in cooperating with Sellers to cause all third parties to
those Contracts set forth on Schedule 2.1(a)(iv) to enter
into novation or similar agreements pursuant to which
Sellers will be relieved from all liability thereunder.
4. Consideration for Transfer of the Assets.
4.1 Purchase Price. In consideration for the sale and
transfer of the Assets and Sellers' covenant not to compete
set forth in Section 8.14(a) hereof, on the terms and
subject to the conditions set forth in this Agreement, Buyer
agrees to (i) pay in cash to Sellers by wire transfer of
immediately available funds, at Closing, the sum of
$3,706,700 subject to adjustment pursuant to Section 8.24
hereof (the "Purchase Price") and (ii) assume the Assumed
Liabilities. A portion of the Purchase Price equal to
$1,000,000 (the "Escrowed Amount") shall be delivered by
Sellers to the Escrow Agent (as hereinafter defined)
pursuant to Section 4.2 hereof.
4.2 Escrow. At the Closing, Sellers shall deliver the
Escrowed Amount to Squadron, Ellenoff, Plesent & ▇▇▇▇▇▇▇▇▇,
LLP, as escrow agent (the "Escrow Agent") pursuant to an
Escrow Agreement (the "Escrow Agreement"), in form and
substance reasonably satisfactory to the parties. Upon the
first anniversary of the Closing Date, the Escrow Agent,
pursuant to the terms of the Escrow Agreement, shall release
to Sellers $500,000 (subject to the terms of the Escrow
Agreement). The remainder of the Escrowed Amount shall be
released to Sellers on the second anniversary of the Closing
Date (subject to the terms of the Escrow Agreement). The
Escrowed Amount shall be held by the Escrow Agent pursuant
to the terms of the Escrow Agreement. The fees of the
Escrow Agent shall be borne equally by Sellers, on the one
hand, and Buyer and Orbit, on the other hand.
4.3 Closing Adjustment. On the day immediately prior
to the Closing Date, a physical inventory of the Inventory
shall be taken by the employees of Sellers in accordance
with past practices and mutually agreed upon procedures,
subject to the supervision of Sellers and Buyer and their
respective accountants. A final statement (the "Final
Statement") shall be prepared by Sellers and Sellers'
accountants based upon and from the results of such physical
inventory and the books and records of Sellers as of 11:59
p.m., New York time, on the day prior to the Closing Date.
Such Final Statement shall set forth (a) the net book value
of (i) the Fixed Assets (the "Final Fixed Assets
Valuation"), and (ii) the Inventory ("Final Inventory
Valuation Amount" and, together with the Final Fixed Assets
Valuation and the "Goodwill Valuation" (as hereinafter
defined), the "Final Valuation Amount") as of 11:59 p.m.,
New York time, on the day prior to the Closing Date and (b)
the location of each item of Inventory as of such time. The
Final Statement shall be prepared in accordance with
generally accepted accounting principles applied on a basis
consistent with the Financial Statements (as hereinafter
defined) heretofore delivered to Buyer and Sellers' past
practices. The reserves for damaged, obsolescent and excess
inventory set forth on the Final Statement shall be
determined consistent with past practices utilized in
connection with the preparation of such Financial
Statements. Sellers and Buyer hereby acknowledge that the
"Goodwill Valuation" is $1,031,700. Sellers shall deliver
to Buyer the Final Statement not later than thirty (30) days
after the Closing Date. In the event of a dispute between
Buyer and Sellers as to the proper treatment or reporting of
any matters set forth in the Final Statement, within five
Business Days following delivery of such Final Statement to
Buyer, such dispute shall be referred for determination in
New York, New York by a third party nationally recognized
firm of independent public accountants mutually acceptable
to Buyer and Sellers. In connection with its review, such
third party accounting firm shall have the right to
undertake such auditing procedures as it may deem
appropriate and to examine all work papers utilized in
connection with the accounting and preparation of the Final
Statement. Upon delivery to Buyer and Sellers of a
statement in writing setting forth the conclusions of the
third party accounting firm's opinion of the disputed item
or items and the effect of such conclusions on the Final
Statement, such determinations (in the absence of manifest
error) shall be final and binding upon Buyer and Sellers
without any further right of appeal. Costs and fees of such
third party accounting firm shall be borne equally by Buyer,
on the one hand, and Sellers, on the other hand.
When the Final Valuation Amount is finally determined
pursuant to this Section 4.3, the Purchase Price shall be
adjusted in the following manner:
(i) If the Final Valuation Amount is greater
than the Purchase Price, Buyer shall pay an amount equal to
such excess to Sellers in accordance with Section 4.4
hereof;
(ii) If the Final Valuation Amount is less
than the Purchase Price, Sellers shall pay an amount equal
to the difference to Buyer in accordance with Section 4.4
hereof.
For purposes of this Agreement, the "Adjusted
Purchase Price" shall mean the Purchase Price minus any
shortfall amount paid by Sellers to Buyer or plus any excess
amount paid by Buyer to Sellers, as the case may be.
4.4 Adjustment Payments.
Amounts to be paid by Sellers to Buyer or Buyer to
Sellers, as the case may be, pursuant to Section 4.3 hereof
(the "Adjustment Payment") shall be paid by delivery of a
certified or official bank check or wire transfer of
immediately available funds within 15 days of delivery to
Buyer of the Final Statement or settlement of any disputes
with regard to the Final Statement. Any Adjustment Payment
not made within such period shall bear interest at the rate
of two percent (2%) above the prime rate as reported from
time to time in The Wall Street Journal (the "Default
Rate"); provided, however, that in the event that there is
a dispute with regard to the Final Statement which is
resolved in accordance with Section 4.3 hereof, the
Adjustment Payment shall bear interest at the rate of six
percent (6%) from the date of the Final Statement until the
15th day following the resolution of the dispute and
thereafter at the Default Rate.
4.5 Allocation of Purchase Price. The parties to this
Agreement agree to allocate the Purchase Price and the
Adjusted Purchase Price in accordance with the rules under
Section 1060 of the Code, and the Treasury Regulations
promulgated thereunder, and in accordance with the Final
Statement (as adjusted pursuant to the provisions of Section
4.3 hereof) and no party shall take a position inconsistent
therewith.
5. Closing. Upon the terms and conditions set forth
herein, the Closing shall take place at the offices of
Squadron, Ellenoff, Plesent & ▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. local time
on the Business Day following the day on which all
conditions to each party's obligation to close hereunder
shall have been satisfied or waived or such later date as
mutually agreed to by the parties. The parties agree that
time is of the essence and will take all actions reasonably
necessary to effectuate the Closing at the earliest
practicable date. The date upon which the Closing occurs is
referred to herein as the "Closing Date."
6. Representations and Warranties of Sellers. Sellers
hereby jointly and severally represent and warrant to Buyer
and Orbit as follows:
6.1 Sellers' Organization and Authority. Each Seller
is a corporation duly organized, validly existing and in
good standing under the laws of the state of its
incorporation and has all requisite corporate power and
lawful authority to carry on its business as it is currently
being conducted and all necessary licenses and permits
material to its business as it is currently being conducted,
and to own, operate and lease the Assets. Each Seller is
duly qualified or licensed to do business as a foreign
corporation and is in good standing as a foreign corporation
in each jurisdiction in which the ownership, operation or
lease of the Assets or the conduct of its business or
location of its properties requires qualification or
licensing to do business as a foreign corporation and in
which the failure so to qualify could have a material
adverse effect on either Seller or the Assets.
6.2 Authorization. Each Seller has all requisite
corporate power and authority to execute and deliver this
Agreement, to consummate the transactions contemplated
hereby and to perform fully its obligations hereunder except
for the approval of the Plan of Complete Liquidation and
Dissolution of Astrosystems (the "Plan") and this Agreement
by the holders of a majority of all outstanding shares of
Astrosystems entitled to vote thereon ("Shareholder
Approval"). The execution, delivery and performance of this
Agreement by each Seller and the consummation by each Seller
of the transactions contemplated hereby have been duly
authorized by all necessary corporate action of each Seller
except for the Shareholder Approval, and no other board of
directors, shareholder or other corporate proceeding by or
on behalf of either Seller is necessary to authorize the
execution, delivery or performance of this Agreement, or the
consummation of the transactions contemplated hereby. This
Agreement constitutes, and each document and instrument
contemplated by this Agreement to be executed by either
Seller, when executed and delivered in accordance with the
provisions hereof, shall constitute, the valid and legally
binding obligations of Sellers, enforceable against each of
them in accordance with its terms, subject to (i)
bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting
creditors' rights generally; (ii) general principles of
equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity); and (iii)
the Shareholder Approval.
6.3 Freedom to Contract. Subject to receipt of the
consents and approvals described in Schedule 6.3 hereto, the
execution, delivery and performance of this Agreement by
each Seller and the consummation by each Seller of the
transactions contemplated hereby will not: (i) violate or
conflict with any provision of the certificate of
incorporation or by-laws of either Seller, (ii) violate any
of the terms, conditions or provisions of any law, rule,
statute, regulation, order, writ, injunction, judgment or
decree of any court, governmental authority or regulatory
agency, or (iii) conflict with or result in a violation or
breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right
of termination, cancellation or acceleration) under, any of
the terms, conditions or provisions of any note, bond,
indenture, debenture, security agreement, trust agreement,
Lien, mortgage, lease, agreement, license, franchise,
permit, guaranty, joint venture agreement or other
agreement, instrument or obligation, oral or written, to
which either Seller is a party (whether as an original party
or as an assignee or successor) or by which it or any of its
properties is bound. Except as set forth on Schedule 6.3
hereto, no authorization, approval, order, license, permit,
franchise or consent, and no registration, declaration or
filing with any court or Governmental Authority, is required
in connection with either Seller's execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated hereby.
6.4 Financial Statements.
(a) The consolidated balance sheets of Sellers as
at June 30, 1993, 1994 and 1995, and the related
consolidated statements of operations, stockholders' equity
and cash flows for the years ended June 30, 1993, 1994, and
1995, including the footnotes thereto, certified by ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ & Co., independent certified public accountants to
Sellers, which have been delivered to Buyer (the "Financial
Statements") have been prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a
consistent basis, and fairly present in all material
respects the financial condition, results of operations and
cash flows of Sellers as of the dates thereof and for the
periods presented.
(b) The accounting and financial records of
Sellers have been prepared and maintained in accordance with
sound bookkeeping practices. Sellers maintain systems of
internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in
accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity
with GAAP and to maintain asset accountability by division,
(iii) access to assets is permitted only in accordance with
management's general or specific authorization, and (iv) the
recorded accountability by division for assets is compared
with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
6.5 Absence of Undisclosed Liabilities. Neither
Seller has any direct or indirect material indebtedness,
liability, claim, loss, damage, deficiency, obligation or
responsibility, known or unknown, fixed or unfixed, ▇▇▇▇▇▇
or inchoate, liquidated or unliquidated, secured or
unsecured, accrued or unaccrued, absolute, contingent or
otherwise, relating to the Acquired Businesses, including,
without limitation, liabilities on account of Taxes, other
governmental charges or lawsuits brought, whether or not of
a kind required by GAAP to be set forth on a financial
statement ("Liabilities"), other than Liabilities that (i)
were fully and adequately reflected on the Financial
Statements or (ii) were incurred since June 30, 1995 in the
ordinary course of business. Neither Seller has any
knowledge of any circumstances, conditions, events or
arrangements which may hereafter give rise to any
Liabilities of either Seller or any successor to the
Acquired Businesses except in the ordinary course of the
Acquired Businesses, which may affect the Acquired
Businesses following the Closing.
6.6 No Material Adverse Change. Since June 30, 1995,
except as described in the SEC Documents (as hereinafter
defined), there has been no material adverse change in the
assets, properties, business or condition, financial or
otherwise, of either the Military Division or ▇▇▇▇▇▇▇, and
neither Seller knows of any such change which is threatened,
nor has there been any damage, destruction or loss
materially affecting the assets, properties, business or
condition of either the Military Division or ▇▇▇▇▇▇▇ whether
or not covered by insurance.
6.7 Title to and Condition of Assets; Encumbrances,
etc. Sellers have good title to all of the Assets, free and
clear of all Liens, except for Permitted Liens. The
instruments of transfer required to be executed and
delivered by Sellers at the Closing pursuant to Section 9.1
hereof will be effective to vest in Buyer good title to the
Assets, free and clear of any and all Liens, other than
Permitted Liens. Schedule 6.7(b) hereto sets forth a true
and complete listing of each of the Assets, other than
Inventory and Intellectual Property, owned by (a)
Astrosystems and used in its Military Division and (b)
▇▇▇▇▇▇▇, having a net book value as of June 30, 1995 in
excess of $1,000. Schedule 6.7(c) sets forth, as of a
recent date, the locations where Inventory is located and
the approximate amount at each such location. All such
Assets are the property of Sellers, except as disclosed on
Schedule 6.7(c). No third party has any rights to purchase
any of the Assets, or any interest therein or portion
thereof, including rights of first offer or first refusal.
6.8 Absence of Certain Changes. Except as set forth
on Schedule 6.8 hereto, since June 30, 1995:
(a) Astrosystems has operated the business of the
Military Division and ▇▇▇▇▇▇▇ has operated its business in
the ordinary course consistent with past practice;
(b) Neither Seller has entered into any
transaction, commitment, contract or agreement relating to
the Acquired Businesses except in the ordinary course of
business consistent with past practice;
(c) Neither Seller has been engaged in a dispute
with (i) any third party with regard to any Contract or (ii)
a material customer.
(d) There has not been any event that would
materially impair Sellers' ability to perform their
respective obligations under this Agreement;
(e) Neither Seller has entered into any
transaction affecting the Acquired Businesses with any
director, officer or 5% shareholder of either Seller or with
any Affiliate.
(f) Neither Seller has sold, assigned, leased or
transferred any Assets, other than the sale of inventory in
the ordinary course of business consistent with past
practice;
(g) Neither Seller has (i) incurred any severance
or termination pay liability to any employee of the Military
Division or ▇▇▇▇▇▇▇ except as set forth in Schedule 6.8
hereof; (ii) entered into any employment, deferred
compensation or other similar agreement (or any amendment to
any such existing agreement) with any employee of the
Military Division or ▇▇▇▇▇▇▇ or (iii) granted any increase
in compensation, bonus or other benefits payable to any
employee of the Military Division or ▇▇▇▇▇▇▇;
(h) There has not been any material damage,
destruction or other casualty loss (whether or not covered
by insurance) affecting the Acquired Businesses or the
Assets;
(i) Neither Seller has written down the value of
any tangible assets of the Acquired Businesses or made any
other write-downs or write-offs with respect to the Acquired
Businesses, except write-downs and write-offs in the
ordinary course of business in accordance with GAAP and
consistent with past practice, as reflected on the Financial
Statements, or made any change in its accounting methods or
practices with respect to the Acquired Businesses, or made
any change in depreciation or amortization policies or rates
adopted by it;
(j) Neither Seller has cancelled, waived or
released any right or claim relating to the Acquired
Businesses;
(k) Neither Seller has mortgaged, pledged or
encumbered any Asset;
(l) Neither Seller has materially changed any of
its business policies with respect to the Acquired
Businesses, including, without limitation, advertising,
marketing, pricing, purchasing, personnel, sales, returns or
product acquisition policies; and
(m) Neither Seller has agreed to do any of the
foregoing.
6.9 Contracts, etc.
(a) Schedule 6.9 hereto contains a complete and
accurate list of the following Contracts, in each case, to
which either Astrosystems, on behalf of the Military
Division, or ▇▇▇▇▇▇▇ is a party and which primarily relate
to the Acquired Businesses:
(i) Contracts for the purchase or sale of
goods or other personal or intangible property, or for the
furnishing or receipt of services, involving in any
individual Contract or a group of related Contracts more
than $10,000 in connection with the purchase or sale of
Inventory and $5,000 for any other goods or services;
(ii) Contracts for the lease of any personal
property involving in any individual Contract or a group of
related Contracts rental obligations in excess of $1,000 per
month;
(iii) Contracts involving a license with
third parties;
(iv) Contracts directly or indirectly
restricting the ability of Seller to compete in any line of
business with any person or entity;
(v) Contracts with distributors, agents,
salesmen and sales representatives or involving the payment
of commissions or other consideration or discounts with
respect to the sale of Sellers' products;
(vi) Contracts with any Governmental
Authority;
(vii) Contracts with an advertising or public
relations agency, as well as any Contracts relating to
marketing or co-marketing or tie-ins with other products or
services;
(viii) Contracts containing any exclusive
arrangements which (A) are in favor of either Seller, or (B)
restricting either Seller;
(ix) Contracts containing secrecy, non-
competition or similar arrangements between either Seller
and any of its current or former employees or consultants;
(x) Contracts between either Seller and any
Affiliate thereof;
(xi) Contracts with importers, customs or
other brokers, warehouse operators, designers and
manufacturers; and
(xii) Contracts not entered into the ordinary
course of the Acquired Businesses in accordance with past
practice.
Sellers have heretofore delivered or made available to
Buyer true and complete copies of all written Contracts
listed on Schedule 6.9, and a summary of the material terms
of each oral Contract listed on such Schedule.
(b) Each Seller has complied with and performed
in all material respects all of its obligations required to
be performed under all of the Contracts listed on Schedule
6.9 hereof to which it is a party, and is not in default in
any material respect under any of them; and no event has
occurred which, with or without the giving of notice, lapse
of time or both, would constitute a default thereunder in
any material respect. Neither Seller has received written
notice cancelling, terminating or repudiating or exercising
any option under any Contract to which it is a party and has
no knowledge that any party has failed to comply with or
perform all of its obligations required to be performed
under any such Contract or that an event has occurred which,
with or without the giving of notice, lapse of time or both,
would constitute a default by such party thereunder, in any
case which would have a material adverse effect on the
Acquired Businesses. Neither Seller has any knowledge that
the award or validity of any Contract is being contested by
a third party. In addition, neither Seller has any
knowledge (i) that the products and services called for by
an unfinished contract having material value cannot be
supplied by or to the Seller who is a party to such Contract
in accordance with the time specifications of such Contract
and (ii) of any facts or circumstances which make a default
by any party to any such Contract likely to occur subsequent
to the date hereof.
(c) Except to the extent that third-party
consents are required for the assignment of any Contract to
Buyer, as disclosed on Schedule 6.3 hereto, all Contracts
listed on Schedule 6.9 hereof are currently enforceable and
shall be enforceable after the Closing by Buyer in
accordance with their respective terms, subject to (i)
bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting
creditors' rights generally; and (ii) general principles of
equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
6.10 Employee Matters.
(a) Except as set forth on Schedule 6.10(a)
hereto, neither Seller currently, or has within the last two
years, for the benefit of current or former employees of the
Military Division or ▇▇▇▇▇▇▇, maintains, administers or
contributes to any: (i) "employee benefit plans" ("Benefit
Plans") within the meaning of Section 3(3) of ERISA; (ii)
employment contracts (and any related agreements); (iii)
severance arrangements, (iv) bonus or other incentive
compensation arrangements; (v) fringe benefit or perquisite
plans or arrangements; (vi) deferred compensation
arrangements; (vii) non-competition arrangements; and (viii)
other material remunerative arrangements, and Seller has
provided Buyer copies or descriptions of such plans,
contracts and arrangements. All Benefit Plans set forth on
Schedule 6.10(a) are and have been maintained in full
compliance with their terms and all requirements of
applicable law.
(b) There are no collective bargaining or other
agreements between either Seller and any union or other
employee organizations relating to employees of the Military
Division or ▇▇▇▇▇▇▇ (collectively, the "Companies").
(c) Except as set forth in Schedule 6.10(c)
hereof, neither Seller nor any member of Sellers' Group has,
within the preceding six years, contributed to, or had an
obligation to contribute to, any "employee pension benefit
plan" within the meaning of Section 3(2) of ERISA which is
subject to Title IV of ERISA. As used in the preceding
sentence, "Sellers' Group" includes any person who is, or
was at the relevant time, a member of the same "controlled
group of corporations" as either Seller (within the meaning
of Section 414(b) of the Code), or under "common control"
with either Seller (within the meaning of Section 414(c) of
the Code). Neither Seller has, within the preceding six
years, maintained or contributed to a multiemployer pension
plan, as defined in Section 3(37) of ERISA, is not liable
for any withdrawal or partial withdrawal liability with
respect to any multiemployer or pension plan and neither
Seller nor Buyer will become liable therefor as a result of
the transactions contemplated by this Agreement.
(d) (i) Each Seller is in compliance in all
material respects with all applicable laws relating to the
employment practices, terms and conditions of employment and
wages and hours with respect to the current employees of
each of the Military Division and ▇▇▇▇▇▇▇ (the "Employees");
(ii) there are no material controversies pending or, to
Seller's knowledge, threatened, between either Seller and
any employees, prospective employees, former employees or
retirees of the Military Division or ▇▇▇▇▇▇▇, except as set
forth on Schedule 6.10(d) hereto; (iii) no unfair labor
practice complaints have been filed against either Seller or
with the National Labor Relations Board (the "NLRB")
relating to Employees, and neither Seller has received any
notice or communication reflecting an intention or a threat
to file any such complaint; (iv) there is no labor strike,
dispute, slow-down or stoppage pending or, to Sellers'
knowledge, threatened against either Seller relating to
Employees; (v) no representation petition is pending or
threatened with the NLRB against either Seller relating to
Employees; (vi) except as disclosed on Schedule 6.10(d)
attached hereto, each Seller has paid in full to all
Employees all wages, salaries, commissions, bonuses,
benefits and other compensation due and payable to such
employees, including those arising under any policy,
practice, agreement, program, statute or other law; and
(vii) except as set forth on Schedule 6.10(d) hereto,
neither Seller has closed any facility, effectuated any
layoffs of employees or implemented any early retirement,
separation or window program within its past three fiscal
years, in each case with respect to Employees, nor has
either Seller planned or announced any such action or
program for the future.
(e) Schedule 6.10(e) hereto contains a correct
and complete list of (i) the names and current annual salary
rates of all Employees; (ii) the names and amounts, if any,
paid, accrued or to be paid to Employees under any bonus,
incentive or similar plans on and after January 1, 1995; and
(iii) all vacation and sick pay accrued or anticipated to be
accrued in respect of obligations of Sellers to Employees up
to and including the Closing Date. Except as disclosed on
Schedule 6.10(e) hereto no Employee will be entitled to any
severance or other payments under any plan, agreement or
arrangement maintained, administered or contributed to by
Sellers solely as a result of the transactions contemplated
hereby.
6.11 Litigation. Except as set forth in Schedule 6.11
hereto, there is no action, suit, inquiry, litigation or
proceeding by or before any referee, mediator or arbitrator,
or any court or governmental or other regulatory or
administrative agency or commission, pending or, to either
Seller's knowledge, threatened, nor, to either Seller's
knowledge, is any investigation pending by or before any
such Governmental Authority, against either Seller or
relating to the Assets or the Acquired Businesses nor, to
either Seller's knowledge, are there any facts which would
provide a basis for any such action, suit, inquiry,
litigation, proceeding or investigation, which, in each case
if adversely determined, could have a material adverse
effect on the Acquired Businesses or the Assets or which in
any manner challenges or seeks injunctive or other non-
monetary relief or seeks to prevent, enjoin, alter or delay
any of the transactions contemplated hereby. Neither Seller
is subject to any judgment, order or decree entered in any
lawsuit or proceeding that might adversely affect Buyer's
ability to conduct the business of the Acquired Businesses
or Buyer's rights in the Assets after the Closing Date.
Except as set forth on Schedule 6.11 attached hereto,
neither Seller has any knowledge that a third party is
contesting any Contract to which either Seller is a party
nor is either Seller contesting the award of a contract to
a third party.
6.12 Permits. Schedule 6.12 hereto lists all Permits
necessary or required in connection with the Acquired
Businesses as presently conducted and the ownership by
Sellers of the Assets. Sellers have obtained each such
Permit and each such Permit is in full force and effect.
Neither Seller has received notice that revocation is being
considered with respect to any such Permit. Each Seller has
made all filings with, or notifications to, all Governmental
Authorities necessary or required in connection with the
Acquired Businesses as presently conducted and the ownership
by Sellers of the Assets.
6.13 Compliance with Law. To the best knowledge of
Sellers, neither Seller is in violation, with respect to the
Acquired Businesses, of any applicable federal, state, local
or foreign law, rule, regulation, or ordinance, or any
judgment, writ, decree, injunction, order or any other
requirement of any court, Governmental Authority or arbitral
or other dispute resolution body or agency, in each case
which would have a material adverse effect on the Acquired
Businesses, and no notice has been received by either Seller
alleging any such violation.
6.14 SEC Filings. Securities and Exchange Commission
Documents. Astrosystems has furnished to Buyer a true and
complete copy of each statement, report and registration
statement filed by Astrosystems with the Securities and
Exchange Commission ("SEC") since January 1, 1994 (the "SEC
Documents"), which are all of the documents (other than
preliminary material) that Astrosystems was required to file
with the SEC during such period. As of their respective
filing dates, with respect to the Acquired Businesses, none
of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances
under which they were made, not misleading in any material
respect, except to the extent corrected by a subsequently
filed SEC Document.
6.15 Intellectual Property. Schedule 6.15 hereto lists
or describes, with respect to the Acquired Businesses: (a)
all unexpired United States and foreign copyright
registrations and pending applications; (b) all unexpired
United States and foreign patents and patent applications;
(c) all United States and foreign trademarks, service marks,
imprints, logos, trade dress, corporate, trade, assumed and
other names, including those at common law and all
registrations or applications to register the foregoing; and
(d) all know-how, processes or trade secrets susceptible of
legal protection; which (with respect to (a) through (d)
above) (A) are owned by either Seller; or (B) are licensed
to or by either Seller (collectively, the "Intellectual
Property"). Except as set forth on Schedule 6.15 hereto,
Sellers own or, in the case of any licenses, Sellers possess
adequate, enforceable and assignable licenses or other
rights to use all of the Intellectual Property, and all
Drawings, including all part numbers designated by the
United States government, free and clear of all Liens,
without any conflict with the rights of others. Except as
set forth on Schedule 6.15, all registrations for the
Intellectual Property are valid and subsisting and in full
force and effect. There are no existing or, to either
Seller's knowledge, threatened, claims of any third party
for infringement of the copyrights, patents or trademarks of
others by either Seller, or unfair competition based on the
use by, or challenging the ownership of or the right to use
by, either Seller of any of the Intellectual Property. None
of the Intellectual Property has been abandoned by Sellers
or is subject to any outstanding order, decree, judgment,
stipulation, injunction, written restriction or agreement
restricting the scope or use thereof. To the Sellers'
knowledge, there are no material infringing or diluting uses
of the Intellectual Property.
6.16 Tax Matters.
(a) For purposes of this Agreement, (i) "Taxes"
shall mean all foreign, federal, state and local income,
profits, franchise, gross receipts, payroll, sales,
employment, use, property, transfer, excise, estimated,
stamp, alternative or add-on minimum, environmental,
withholding and any other taxes, duties, assessments,
governmental charges or levies, together with all interest,
penalties and other additions imposed with respect to such
amounts; and (ii) "Tax Return" shall mean any return,
declaration, report, claim for refund or information return
or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
(b) All Tax Returns required to be filed on or
before the Closing Date by either Seller or any member of an
affiliated group (within the meaning of Section 1504 of the
Code) or other combined group of which either Seller is, or
has been or will be a member on or before the Closing Date
(an "Affiliated Group Member") have been or shall be timely
filed (taking into account all properly granted extensions),
and all Taxes indicated as due on such returns have been or
shall be paid or accrued within the prescribed period or any
extension thereof.
(c) There are no Liens for taxes upon any
property of Seller except for Liens for current Taxes not
yet due. All amounts required to be withheld by Sellers
from employees for income taxes, social security and other
payroll Taxes have been collected and withheld, and paid to
the respective governmental agencies, or set aside in
accounts for such purpose or accrued, reserved against and
entered upon the books and records of the employer.
(d) Neither Seller nor any Affiliated Group
Member has executed or filed with any taxing authority any
agreement extending the period for the assessment or
collection of any Taxes, is a party to or has received any
notice with respect to any threatened or pending action by
any taxing authority for assessment or collection of Taxes,
or is a party to any dispute or threatened dispute, in which
an adverse determination would have a material adverse
effect upon the Assets of the Acquired Businesses, and no
such claim for assessment or collection of Taxes has been
made upon Sellers or any Affiliated Group Member.
6.17 Plant and Equipment. The Fixed Assets are
adequate and suitable for the uses to which they are being
put and constitute all of the fixed assets including,
without limitation, equipment, necessary for the operation
of the Acquired Businesses as they are currently being
operated. To either Seller's knowledge, no condition exists
with respect to any such Fixed Assets which would prevent,
or require repair or modification thereof as a prerequisite
to, Buyer's use thereof in the ordinary conduct of the
Acquired Businesses except with respect to ordinary wear and
tear and scheduled maintenance and repair that are not in
the aggregate material in nature or in cost.
6.18 Brokers. Except as set forth on Schedule 6.18,
Sellers have not, directly or indirectly, employed or
utilized the services of any investment banker, broker,
finder, consultant or other intermediary in connection with
this Agreement or the transactions contemplated hereby.
6.19 Insurance. Each Seller maintains insurance
coverage and performance bonds on its properties and assets
and with respect to the Employees and operations, covering
risks which are customarily insured against by businesses
similar to the Acquired Businesses. Schedule 6.19 hereto
contains a correct and complete description of all such
performance bonds, policies or binders of insurance with
respect to the Acquired Businesses held by or on behalf of
Sellers, or providing coverage for any of their respective
properties or assets (in each case specifying the insurer,
the amount of coverage, the type of insurance, the risks
insured, the expiration date, and the policy number). To
Sellers' knowledge, no state of fact exists and no event has
occurred which reasonably might form the basis of any claim
against either Seller or relating to the Acquired Business
which might substantially increase the insurance premiums
payable under or result in the cancellation or nonrenewal of
any of the policies or binders listed on Schedule 6.19
hereto.
6.20 Advertising, etc. To Sellers' knowledge, neither
the advertising nor the promotional material used at any
time by either Seller contained or contains any material
untrue or misleading statements or claims.
6.21 Transactions with Affiliates. Neither Seller nor
any of their Affiliates owns, directly or indirectly, or has
an interest, either of record or beneficially, in, any
business, corporate or otherwise, which is a party to any
agreement, business arrangement or course of dealing with
either Seller relating to the Acquired Businesses, or any
property or asset which is the subject of any agreement,
business arrangement or course of dealing with either Seller
relating to the Acquired Businesses.
6.22 Restrictions. Neither Seller nor any of their
Affiliates is party to any agreement, commitment or
arrangement which would, following the Closing, directly or
indirectly restrict Buyer from carrying on the Acquired
Businesses or any aspect thereof as is conducted immediately
prior to Closing anywhere in the world.
6.23 Full Disclosure. All documents and other papers
delivered by or on behalf of Sellers in connection with this
Agreement and the transactions contemplated hereby are true
and complete in all material respects and authentic. The
information furnished by or on behalf of Sellers to Buyer in
connection with this Agreement and the transactions
contemplated hereby does not contain any untrue statement of
a material fact and does not omit to state any material fact
necessary to make the statements made, in the context in
which made, not false or misleading. Except as described in
the SEC Documents, there is no fact which Sellers have not
disclosed to Buyer which adversely affects, or to the
knowledge of Sellers is likely to adversely affect, the
business or condition (financial or other) of the Acquired
Businesses or the ability of Sellers to perform this
Agreement.
6.24 Prohibited Payments. Neither Sellers nor any of
Sellers' respective officers, directors, employees, agents
or Affiliates has, directly or indirectly, (a) offered, paid
or given, or agreed to pay or to give, to any person or
entity, including any governmental official, employee, or
agent or solicited, received or agreed to receive from any
such person or entity, directly or indirectly, any money or
anything of value (however characterized) for the purpose of
or with the intent of obtaining or maintaining business or
otherwise affecting, or in any manner relating to, the
business, assets, condition (financial or otherwise),
operations or prospects of either Seller or (b) established
or maintained any unrecorded fund or asset for any purpose
or made any false entry on the books and records of Sellers
for any reason, made or agreed to make, a reimbursement of
any political gift or contribution made by any other person,
to any candidate for federal, state, local or foreign
office, which, with respect to both (a) and (b) above, is in
violation of any law, or any rule, regulation or ordinance
thereunder, of any federal, state local or foreign
jurisdiction or not properly and correctly recorded or
disclosed on the Financial Statements.
6.25 Environmental Matters.
(a) To the best knowledge of Sellers, each of
▇▇▇▇▇▇▇ and Astrosystems with respect to the Military
Division is in material compliance with all Environmental
Laws (as hereinafter defined). Neither Seller has received
any written communication from a governmental authority,
citizens' group, employee or otherwise, that alleges that
the Miliary Division or ▇▇▇▇▇▇▇ is not in such material
compliance, and to Sellers' knowledge, there are no
circumstances that are reasonably likely to prevent or
interfere with such material compliance in the future. All
material permits and other governmental authorizations
required pursuant to the Environmental Laws relating to any
property currently owned or operated by Sellers relating to
the Acquired Businesses ("Sellers' Facilities") have been
obtained and are currently in force, and all such material
permits and other governmental authorizations are identified
in Schedule 6.25.
(b) There are no Environmental Claims (as
hereinafter defined) relating to any of Sellers' Facilities
pending or, to either Seller's knowledge, threatened against
or involving Sellers or, to either Seller's knowledge,
against any person or entity whose liability for any
Environmental Claim relating to any of Sellers' Facilities
either Seller has retained or assumed either contractually
or by operation of law.
(c) True and correct copies of the Environmental
Reports (as hereinafter defined) have been made available to
Buyer and a list of all such reports, audits and assessments
is set forth on Schedule 6.25.
(d) "Environmental Laws" shall mean all
applicable federal, state, district and local laws, all
rules or regulations promulgated thereunder, and all orders,
consent orders or judgments issued, promulgated or entered
pursuant thereto, relating to pollution or protection of the
environment (including, without limitation, ambient air,
surface water, ground water, land surface, or subsurface
strata), including, without limitation, (i) laws relating to
emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, industrial materials,
wastes or other hazardous or toxic substances into the
environment and (ii) laws relating to the identification,
generation, manufacture, processing, distribution, use,
treatment, storage, disposal, recovery, transport or other
handling of pollutants, contaminants, chemicals, industrial
materials, wastes or other hazardous or toxic substances.
(e) "Environmental Claims" shall mean all
accusations, allegations, notices of violation, Liens,
claims, demands, suits, or causes of action for any damage,
including, without limitation, personal injury, property
damage (including, without limitation, any depreciation or
diminution of property values), lost use of property or
consequential damages, based upon Environmental Laws or
principles of common law relating to pollution or exposure
to hazardous substances.
(f) "Environmental Reports" shall mean any and
all written analyses, summaries or explanations, in the
possession or control of Sellers, of (a) the condition of
the environment on or about Sellers' Facilities or (b) the
compliance by the Acquired Businesses with Environmental
Laws.
6.26 Accounts Receivable, etc. Schedule 6.26 hereto
accurately sets forth the aging of the accounts receivable
with respect to the Acquired Businesses as of November 30,
1995.
6.27 Suppliers and Customers.
(a) Schedule 6.27(a) hereto sets forth a list of
the ten largest customers of ▇▇▇▇▇▇▇ by dollar volume of
revenues and each customer of the Military Division who,
individually, constituted 10% or more of the Military
Division's revenues, for the fiscal years ended June 30,
1995, 1994 and 1993 and for the three months ended September
30, 1995. Schedule 6.27(a) also sets forth a list of the
ten largest suppliers of the Acquired Businesses by dollar
volume of purchases for the fiscal year ended June 30, 1995
and for the three months ended September 30, 1995. Except
as set forth on Schedule 6.27(b) attached hereto, since June
30, 1995, there has not been any material adverse change in
the business relationship of Seller with respect to any such
customer.
(b) Except as set forth on Schedule 6.27(b)
attached hereto, no single supplier or customer is of
material importance to the business of the Acquired
Businesses. Except as set forth on Schedule 6.27(b)
attached hereto, the relationships of Sellers with the
suppliers and customers of the Acquired Businesses are good
commercial working relationships and during the last 12
months no supplier or customer of the Acquired Businesses
has cancelled or otherwise terminated, or threatened in
writing to cancel or otherwise terminate, its relationship
with either Seller or has decreased materially, or
threatened to decrease or limit materially, its services,
supplies or materials to Sellers or its usage of Sellers'
services or products, as the case may be. Except as set
forth on Schedule 6.27(b) attached hereto, neither Seller
has any notice that any such supplier or customer intends to
cancel or otherwise modify its relationship with Sellers or
to decrease materially or limit its services, supplies or
materials to Sellers or its usage of the services or
products of Sellers, and the acquisition of the Acquired
Businesses by Buyer will not, to either Seller's knowledge,
adversely affect the relationship of Buyer with any such
supplier or customer.
6.28 Orders and Commitments. The backlog as at
November 30, 1995 for all accepted and unfulfilled orders of
the Acquired Businesses and anticipated delivery dates are
set forth in Schedule 6.28 annexed hereto. Except as set
forth on Schedule 6.28, there is no merchandise in the hands
of Sellers' customers under a specific understanding with
either Seller that such merchandise would be returnable.
6.29 Correspondence. Schedule 6.29 accurately set
forth a list of all correspondence since January 1, 1994
between either Seller and any federal, state or local
Governmental Authority or lobbyist which relates to the
Acquired Businesses (other than invoices and correspondence
with regard to Sellers' fulfillment of their respective
obligations under existing contracts with any federal, state
or local governmental Authority).
7. Representations and Warranties of Buyer and Orbit.
Buyer and Orbit, jointly and severally, represent and
warrant to, and covenant and agree with, Sellers as follows:
7.1 Organization and Authority. Each of Buyer and
Orbit is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and
has the full corporate power and lawful authority to execute
and deliver this Agreement, to consummate the transactions
contemplated hereby and to perform its obligations under
this Agreement.
7.2 Authorization of Agreement. The execution,
delivery and performance of this Agreement by each of Buyer
and Orbit and the consummation by Buyer and Orbit of the
transactions contemplated hereby have been duly authorized
by all necessary corporate action by or on behalf of Buyer
and Orbit, and no other board of directors, stockholder or
other corporate proceedings by or on behalf of Buyer or
Orbit is necessary to authorize the execution, delivery or
performance of this Agreement or the performance of the
transactions contemplated hereby. This Agreement
constitutes, and each document and instrument contemplated
by this Agreement to be executed by Buyer and Orbit, when
executed and delivered in accordance with the provisions
hereof shall be, the valid and legally binding obligations
of each of Buyer and Orbit, enforceable against each of
Buyer and Orbit in accordance with its terms, subject to (i)
bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting
creditors' rights generally; and (ii) general principles of
equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
7.3 Brokers. Neither Buyer nor Orbit has, directly or
indirectly, employed or utilized the services of any
investment banker, broker, finder, consultant or other
intermediary, in connection with this Agreement or the
transactions contemplated hereby.
7.4 Freedom to Contract. The execution, delivery and
performance of this Agreement by each of Buyer and Orbit and
the consummation by each of Buyer and Orbit of the
transactions contemplated hereby will not (i) violate or
conflict with any provisions of the certificate of
incorporation or by-laws, each as amended, of each of Buyer
and Orbit, (ii) violate any of the terms, conditions or
provisions of any law, rule, statute, regulation, order,
writ, injunction, judgment or decree of any court,
governmental authority or regulatory agency, or (iii)
conflict with or result in a violation or breach of, or
constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, indenture,
debenture, security agreement, trust agreement, Lien,
mortgage, lease, agreement, license, franchise, permit,
guaranty, joint venture agreement or other agreement,
instrument or obligation, oral or written, to which either
Buyer or Orbit is a party (whether as an original party or
as an assignee or successor) or by which it or any of its
properties is bound. No authorization, approval, order,
license, permit, franchise or consent, and no registration,
declaration or filing with any court or Governmental
Authority is required in connection with either Buyer's or
Orbit's execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated hereby.
8. Further Agreements of the Parties.
8.1 Conduct of Business Pending Closing. From the
date hereof until the Closing Date or earlier termination of
this Agreement, each Seller will:
(a) maintain its existence in good standing:
(b) maintain the general character of the
business of the Acquired Businesses and conduct such
business in the ordinary and usual manner;
(c) maintain proper business and accounting
records;
(d) maintain the properties used in the business
of the Acquired Businesses in good repair and condition,
subject to normal wear and use; and
(e) use its reasonable commercial efforts to
preserve the business of the Acquired Businesses intact, to
keep available to Sellers the services of their respective
present officers and employees and to preserve the goodwill
of their respective suppliers, customers and others having
business relations with the Acquired Businesses.
8.2 Prohibited Actions Pending Closing.
(a) Unless otherwise provided for herein or
approved by Buyer in writing, from the date hereof until the
Closing Date or earlier termination of this Agreement,
neither Seller will:
(i) amend or otherwise change its
certificate of incorporation, By-Laws or other governing
documents;
(ii) mortgage, pledge or subject to Lien any
of its material properties owned or used in connection with
the business of the Acquired Businesses, or agree to do so;
(iii) enter into or agree to enter into
any agreement, contract or commitment (other than purchase
and sale orders and other agreements, contracts and
commitments incurred in the ordinary course of business
which are consistent with historical business and pricing
practices and which have a value of less than $10,000) with
respect to the business of the Acquired Businesses;
(iv) increase, or agree to increase, the
compensation of any of its officers, directors or employees
primarily engaged in the business of the Acquired Businesses
by means of salary increase, bonus or otherwise (other than
annual cost of living increases consistent with past
practice);
(v) sell or otherwise dispose of, or agree
to sell or dispose of, any of its material assets or
properties with respect to the business of the Acquired
Businesses (other than purchase and sale orders incurred in
the ordinary course of business); or
(vi) amend or terminate any Contract to which
either Seller is a party (other than in the ordinary course
of business) or take action or fail to take any action,
constituting any event of default thereunder.
(b) From the date hereof through the Closing Date
or earlier termination of this Agreement, neither Seller nor
Buyer shall permit any of their respective officers,
directors or employees to make any public statement or issue
any press release with respect to (i) Sellers or their
operations with respect to the business of the Acquired
Businesses without the prior written approval of each party
hereto, or (ii) the transactions contemplated hereby,
unless such statement or release shall be jointly issued by
Sellers and Buyer or such statements are required by law,
rule or regulation (provided that the other party shall, to
the extent practicable, be given an opportunity to review
and consent to such statement or release).
8.3 Insurance. From the date hereof through the
Closing Date or earlier termination of this Agreement,
Sellers shall maintain in force (including necessary
renewals thereof) the insurance policies listed on any
Schedule hereto relating to the Acquired Businesses, except
to the extent that they may be replaced with equivalent
policies appropriate to insure the assets, properties and
business of Seller to the same extent as currently insured
at the same or lower rates or at rates approved by Buyer.
8.4 Continued Effectiveness of Representations and
Warranties of Sellers. From the date hereof through the
Closing Date or earlier termination of this Agreement, each
Seller shall conduct its business in such a manner so that
the representations and warranties contained in Section 6
shall continue to be true and correct on and as of the
Closing Date as if made on and as of the Closing Date, and
Buyer shall promptly be given notice of any event, condition
or circumstance occurring from the date hereof through the
Closing Date that would constitute a violation or breach of
this Agreement.
8.5 Authorization. Sellers will use their respective
best efforts to obtain, and shall deliver to Buyer at
Closing evidence satisfactory to Buyer as to, the
authorization of its shareholders (with respect to
Astrosystems) and Board of Directors with respect to the
execution, delivery and performance of this Agreement by
Sellers, including, without limitation, the transfer to
Buyer of the Assets upon the terms and conditions set forth
in this Agreement. In connection therewith, Astrosystems
shall, as soon as practicable following the execution of
this Agreement, prepare and file with the SEC any necessary
amended proxy materials in connection with a special or
annual meeting of the shareholders of Astrosystems to be
called to approve, among other matters, this Agreement and
the transactions contemplated hereby. Buyer acknowledges
receipt of the preliminary proxy materials of Astrosystems
filed with the SEC on January 3, 1996. Astrosystems shall
provide Buyer with a draft of any such further preliminary
versions of such amended proxy materials as promptly as
possible, but in no event later than the date of their
submission to the SEC and, with respect to the drafts of any
final amended versions thereof, not later than the Business
Day prior to their submission to the SEC. Such proxy
materials shall comply as to form in all material respects
with the Securities and Exchange Act of 1934, as amended,
and subject to the fiduciary duties of the Board of
Directors of Astrosystems, include a statement that (i) the
Board of Directors of Astrosystems recommends to its
shareholders approval of the transaction provided for by the
terms of this Agreement, and (ii) to Astrosystems'
knowledge, shares owned beneficially and of record by the
directors and executive officers of Astrosystems will be
voted for the proposal relating to the approval of this
Agreement and the transactions contemplated hereby.
Astrosystems shall diligently pursue clearance of such
preliminary proxy materials by the SEC and, as soon as
practicable after such clearance is obtained, hold such
shareholders' meeting.
8.6 Corporate Examinations and Investigations. Prior
to the Closing Date or earlier termination of this
Agreement, Buyer shall be entitled, through its employees
and representatives, including, without limitation,
Squadron, Ellenoff, Plesent & ▇▇▇▇▇▇▇▇▇, LLP and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ & Co. to make such investigation of the Assets,
properties, business and operations of Astrosystems and
▇▇▇▇▇▇▇, and such examination of the books, records and
financial condition of Sellers relating to the Acquired
Businesses as Buyer reasonably requests. Any such
investigation and examination shall be conducted at
reasonable times and under reasonable circumstances, and
Sellers shall cooperate fully therein. Buyer shall
reimburse Sellers for any reasonable professional (legal and
accounting) fees incurred by Sellers in connection with such
investigation; provided, however, that Buyer shall not be
responsible for fees and expenses of Sellers' internal legal
and accounting staff. No investigation by Buyer shall
diminish or obviate any of the representations, warranties,
covenants or agreements of Sellers under this Agreement. In
order that Buyer may have full opportunity to make such
business, accounting and legal review, examination or
investigation as it may wish of the business and affairs of
Sellers, Sellers shall furnish to the representatives of
Buyer during such period all such information and copies of
such documents concerning the affairs of the Acquired
Businesses as such representatives may reasonably request
and cause its officers, employees, consultants, agents,
accountants and attorneys to cooperate fully with such
representatives in connection with such review and
examination and to make full disclosure to Buyer of all
material facts affecting the financial condition and
business operations of the Acquired Businesses.
8.7 Consent to Jurisdiction and Service of Process.
Subject to the provisions of Section 12.10 hereof, any legal
action, suit or proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby may
be instituted in any state or federal court located in New
York County, State of New York, and each party agrees not to
assert, by way of motion, as a defense, or otherwise, in any
such action, suit or proceeding, any claim that it is not
subject personally to the jurisdiction of such courts, that
its property is exempt or immune from attachment or
execution, that the action, suit or proceeding is brought in
an inconvenient forum, that the venue of the action, suit or
proceeding is improper or that this Agreement or the subject
matter hereof may not be enforced in or by such court, and
hereby waives any offsets or counterclaims in any such
action, suit or proceeding. Each party further irrevocably
submits to the jurisdiction of any such court in any such
action, suit or proceeding. Any and all service of process
and any other notice in any such action, suit or proceeding
shall be effective against any party if given personally or
by registered or certified mail, return receipt requested,
or by any other means of mail that requires a signed
receipt, postage prepaid, mailed to such party as herein
provided, or by personal service on such party with a copy
of such process mailed to such party by first class mail or
registered or certified mail, return receipt requested,
postage prepaid. Nothing herein contained shall be deemed
to affect the right of any party to serve process in any
manner permitted by law or to commence legal proceedings or
otherwise proceed against any other party in any
jurisdiction other than New York in connection with actions
initiated by third parties in such other jurisdictions.
8.8 Expenses. The parties to this Agreement shall
bear their respective expenses incurred in connection with
the preparation, execution and performance of this Agreement
and the transactions contemplated hereby, including, without
limitation, all fees and expenses of agents,
representatives, counsel and accountants. Sellers shall
bear all fees and expenses of OEM Capital.
8.9 Indemnification for Fees of Brokers and Finders.
Buyer, on the one hand, and Sellers, on the other, agree to
indemnify and save the other harmless from any claim or
demand for commission or other compensation by any broker,
finder, agent or similar intermediary claiming to have been
employed by or on behalf of Buyer, on the one hand, or
Sellers, on the other, and to bear the cost of legal
expenses incurred in defending against any such claim.
8.10 Consents; Terminated Agreements.
(a) Sellers and Buyer shall use their respective
best efforts to obtain at the earliest practicable date, by
instruments in form and substance reasonably satisfactory to
Buyer, all consents and approvals referred to in Schedule
6.3 hereto (Buyer hereby acknowledging that the Shareholder
Approval process is provided for in Section 8.5 hereof). If
any consent is not obtained, Sellers shall, to the extent
reasonably possible, keep the agreement in effect and shall
give Buyer the benefit of the agreement to the same extent
as if Sellers had not been excluded from assigning such
agreement to Buyer, and Buyer shall perform the obligations
and assume the Liabilities under the agreement relating to
the benefit obtained by Buyer. Nothing in this Agreement
shall be construed as an attempt to assign any agreement or
other instrument that is by its terms not assignable without
the consent of the other party.
(b) Buyer hereby acknowledges and agrees that all
sales representative agreements and commission agreements
between either Seller, on the one hand, and third parties,
on the other hand, as such relate to the Acquired
Businesses, have been, or will be, terminated by Sellers
prior to or following the Closing.
8.11 Employment Matters.
(a) Between the date of this Agreement and the
Closing Date, Buyer shall offer employment, at base salaries
comparable to their present base salaries, to all persons
listed on Schedule 6.10(e) who are Employees on the Closing
Date none of whom are employees governed by a collective
bargaining agreement, except any such Employees who are on
lay-off, leave of absence (other than maternity or family
leave, sick leave or short-term disability) or long-term
disability ("Eligible Employees"). Such employment would
commence on the Closing Date, except with respect to any
such Employees on maternity or family leave, sick leave or
short-term disability, in which case the employment with
Buyer would commence on the date such person returns to
work. Those employees of Sellers accepting an offer and
commencing employment with Buyer are herein referred to as
"Transferred Employees."
(b) Sellers shall assume, retain responsibility
for and continue to pay, in accordance with the terms of the
applicable employer plans, any hospital, medical or other
health care, life insurance, short and long term disability,
travel accident or other plan benefits and expenses for each
employee or former employee of Sellers (including each
Transferred Employee) with respect to claims incurred by
such employee or his or her covered dependents prior to the
Closing Date or other costs in respect of any such plan
coverage for periods prior to the Closing Date (including,
without limitation, any residual deficits due Blue Cross,
Blue Shield or otherwise), and, with respect to such
employees who are not Transferred Employees (and their
covered dependents), claims incurred whether before, on or
after the Closing Date to the extent provided under the
terms of the applicable plans or by law. Buyer shall be
responsible for and pay, in accordance with the terms of any
applicable employer plan (to the extent, if any, Buyer
maintains any such plans after the Closing Date) any
hospital, medical or other health care, life insurance,
short and long term disability, travel accident or other
plan benefits and expenses for each Transferred Employee
with respect to claims incurred by such Transferred Employee
or his or her covered dependents on or after the Closing
Date. For purposes of this Section 8.11(b), any hospital,
medical or other health care or dental claim will be deemed
incurred when the services giving rise to the claim are
first performed and any other claim will be deemed incurred
when the event that is the basis of the claim first
occurred. With respect to any employee of Sellers or his or
her covered dependent who is on short or long term
disability or hospitalized on the Closing Date, Sellers
shall assume, retain responsibility for and pay, in
accordance with the terms of the applicable plan, all salary
continuation benefits and expenses of such person until the
end of any such disability and all benefits and expenses
incurred by such employee or covered dependent in connection
with such hospitalization, as the case may be.
Notwithstanding the foregoing provisions of this Section
8.11(b), Sellers shall cooperate upon Buyer's request to
provide for Buyer to assume any employer welfare benefit
plan (and any underlying insurance policy used to fund such
plan) applicable to Transferred Employees as in Buyer's sole
discretion it deems appropriate.
(c) Sellers shall be liable for any amounts to
which any employee of Sellers becomes entitled under any
severance policy, plan, agreement, arrangement or program
(whether or not covered by ERISA) maintained by Sellers
which exists or arises or may be deemed to exist or arise
under the terms thereof or any applicable law in respect of
the period prior to and on the Closing Date. Buyer shall be
solely responsible for the payment of any severance amounts
due to Transferred Employees.
(d) Sellers shall assume, retain responsibility
for and shall make payments of any vacation or sick pay or
compensatory pay in respect of Employees for the period up
to and including the Closing Date, whether or not such
Employees are Transferred Employees. Specifically, all
payments for any accrued vacation time for the Transferred
Employees prior to the Closing Date shall be satisfied by
Sellers prior to the Closing.
(e) Nothing in this Agreement shall be construed
as creating an express or implied contract of employment or
a guarantee of employment with Buyer or any of its
affiliates for any period of time after the Closing Date,
nor shall anything in this Agreement confer upon any
Transferred Employee any right to continue in the employ of
Buyer or any of its affiliates after the Closing Date or
interfere with, or restrict in any way, the rights of Buyer,
which are hereby expressly reserved, to terminate the
employment of any employee at any time for any reason
whatsoever.
(f) Sellers shall be responsible for all
obligations and liabilities under the Workers Adjustment and
Retirement Notification Act of 1988, as amended, and each
similar state law ("WARN"), with respect to Employees by
reason of their severance or other termination of employment
prior to the Closing Date and Buyer shall be responsible for
all such obligations and liabilities under WARN with respect
to Employees by reason of their severance or other
termination of employment on or after the Closing Date.
(g) Buyer shall establish medical and dental
plans which will, or cause its existing medical and dental
plans to, (i) immediately, and without any waiting period,
be available to cover each Transferred Employee (and
dependents and beneficiaries thereof) as of the Closing
Date, and (ii) waive any limitation on coverage due to pre-
existing conditions for Transferred Employees (and
dependents and beneficiaries thereof) who previously
participated in Sellers' medical plan or any HMO offered by
Sellers.
(h) Sellers shall remain obligated to offer COBRA
continuation coverage to its covered employees (other than
the Transferred Employees), former employees and their
qualified beneficiaries to the extent required by applicable
law, and Sellers agree to jointly and severally indemnify
and hold Buyer harmless from any claims for COBRA
continuation coverage made by or on behalf of such employees
and their qualified beneficiaries who are (i) receiving
COBRA continuation coverage at the Closing, or (ii) with
respect to whom a qualifying event occurred prior to the
Closing and for which the applicable election period for
COBRA continuation coverage has not expired as of the
Closing Date or (iii) with respect to whom a qualifying
event occurs as a result of the Closing of the transaction
contemplated by this Agreement; in each case, other than
claims for COBRA continuation coverage under Buyer's group
health plans arising in connection with any termination of
a Transferred Employee's employment with Buyer or its
Affiliates after the Closing Date.
8.12 Further Assurances. The parties shall cooperate
and use reasonable efforts to cause all conditions to the
Closing hereunder to be satisfied as promptly as
practicable. From and after the Closing, Sellers, on the
one hand, and Buyer, on the other hand, agree to execute and
deliver such further documents and instruments and to do
such other acts and things as Buyer or Sellers, as the case
may be, may reasonably request in order to effectuate the
transactions contemplated by this Agreement. In the event
any party shall be involved in litigation, threatened
litigation or government inquiries with respect to a matter
involving either Seller, the other parties shall also make
available to such first party, at reasonable times and
subject to the reasonable requirements of its or his own
business, such of its or his personal information relevant
to the matters, provided such first party shall reimburse
the providing party for its or his reasonable costs for
employee time incurred in connection therewith if more than
one business day is required. Following the Closing, the
parties will cooperate with each other in connection with
tax audits and in the defense of any legal proceedings,
consistent with the other provisions for defense of claims
provided in Article 10 to the extent such cooperation does
not cause unreasonable expense, unless such expense is borne
by the requesting party.
8.13 Notices of Certain Events.
(a) Sellers and Buyer shall promptly notify the
other of:
(i) any notice or other communication of
which any party has knowledge from any person alleging that
the consent of such person is or may be required in
connection with this Agreement and the transactions
contemplated hereby;
(ii) any notice or other communication of
which any party has knowledge from any governmental or
regulatory agency or authority in connection with this
Agreement and the transactions contemplated hereby;
(iii) any actions, suits, charges,
complaints, claims, investigations or proceedings commenced
or, to any party's knowledge, threatened against, relating
to, involving or otherwise affecting, the Assets or the
business of the Acquired Businesses which, if pending on the
date of this Agreement, would have been required to be
disclosed pursuant to Section 6.13 hereof or which relate to
the consummation of the transactions contemplated hereby;
(iv) any material adverse change in the
Assets or the Acquired Businesses or of any event that would
materially impair either Seller's ability to perform its
obligations under this Agreement; and
(v) any notice of termination, voiding or
reduction of any insurance policy, as described in Section
8.3 hereof, or any written notice regarding any material
insurance claim.
(b) Sellers shall promptly notify Buyer of any
adverse change in order backlog or sales prospects of either
Seller.
8.14 Noncompetition; Nondisclosure.
(a) Noncompetition. Each of the Sellers and
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(collectively, the "Principal Stockholders") will not, for
a period of three years following the Closing (the
"Noncompetition Period"), (i) engage or participate in,
directly or indirectly (whether as a lender, investor,
shareholder, consultant or partner, or in any other manner
or capacity), or lend its name (or any part or variant
thereof) to, any business which is, or as a result of
Sellers' or Principal Stockholders' engagement or
participation would become, competitive with the business of
the Acquired Businesses as currently conducted by Sellers,
including, in any event, any business involving the
manufacture or sale of power supplies, AC power sources,
frequency converters, UPS and associated analytical
equipment or other electronic equipment which are the same
as or similar to those manufactured by the Acquired
Businesses; provided, however, that Astrosystems may
continue to engage in any business (other than the business
of the Acquired Businesses) conducted by Astrosystems prior
to the date hereof; (ii) solicit, interfere with or
endeavor to entice away from Buyer or otherwise deal,
directly or indirectly, in a competitive manner with any
customers doing business with Buyer as the successor to the
business of the Acquired Businesses; (iii) employ, hire,
solicit, be associated with or otherwise interfere with or
endeavor to entice away any officer, director, employee, or
agent of Buyer; (iv) engage in or participate in, directly
or indirectly, any business conducted under any name that
shall be the same as or similar to any trade name used by
Buyer (including the name "▇▇▇▇▇▇▇"); or (v) materially
interfere with the operation by Buyer of the Acquired
Businesses or engage in any act that would be injurious to
Buyer's business reputation or detract from the goodwill
acquired pursuant hereto. Notwithstanding the foregoing, it
is expressly understood and agreed that ownership for
investment of less than 5% of the outstanding shares of
capital stock of a corporation listed on a national
securities exchange or actively traded in the over-the-
counter market that would otherwise be prohibited by clause
(i) above shall not be deemed to constitute a breach of such
provision, provided that Seller shall not be in a control
position with regard to any corporation described in clause
(i) above. Sellers and Principal Stockholders are entering
into the foregoing covenant to assure Buyer of the transfer
of the goodwill of the business of the Acquired Businesses
and in order to induce Buyer to consummate the transactions
contemplated by this Agreement.
(b) Nondisclosure. Neither Sellers nor any of
their respective officers or directors shall, at any time
after the date of this Agreement, divulge, furnish or make
accessible to anyone the following information ("Proprietary
Information"): any confidential knowledge or information
with respect to confidential plans, ideas or know-how of the
Acquired Businesses or any other confidential or secret
aspects of the business of the Acquired Businesses
(including, without limitation, customer lists, lists of
suppliers, or any pricing or commission arrangements);
provided, however, that the foregoing provision shall not
apply to any information which is or becomes generally
available to the public through no breach of this Agreement
or which, in the opinion of counsel, is required by law,
rule or regulation to be disclosed. If at any time Sellers
or any of their respective officers, directors or employees
is requested or required (by oral questions,
interrogatories, requests for information or documents,
subpoenas or similar legal process) to disclose any
Proprietary Information, Sellers shall promptly notify Buyer
and shall refrain from making such disclosure so that Buyer
may, at its own expense, seek an appropriate protective
order in a prompt manner and/or waive compliance with the
provisions hereof. If, in the absence of a protective order
or the receipt of a waiver hereunder, in the reasonable
written opinion of counsel to Sellers, disclosure of
Proprietary Information to any tribunal or any governmental
agency is required to avoid liability for contempt or any
other penalty, then Sellers or their respective officers,
directors or employees, as applicable, may disclose such
Proprietary Information to such tribunal or agency without
liability hereunder; provided, however, that Buyer shall
promptly be notified of such decision. Sellers are aware
that material and irreparable injury would be done to Buyer
if either such party would divulge Proprietary Information
to competitors of Buyer. Sellers recognize and acknowledge
that the Proprietary Information constitutes a valuable,
special and unique asset of the business of the Acquired
Businesses.
(c) If either Seller breaches, or threatens to
commit a breach of, any of the provisions of Sections
8.14(a) or 8.14(b) (the "Restrictive Covenants"), Buyer
shall have the following rights and remedies, each of which
rights and remedies shall be independent of the others and
severally enforceable, and each of which is in addition to,
and not in lieu of, any other rights and remedies available
to Buyer under law or in equity:
(i) The right and remedy to have the
Restrictive Covenants specifically enforced by any court of
competent jurisdiction, it being agreed that any breach or
threatened breach of the Restrictive Covenants would cause
irreparable injury to Buyer and that money damages would not
provide an adequate remedy to Buyer.
(ii) The right and remedy to require Sellers
to account for and pay over to Buyer all compensation,
profits, monies, accruals, increments or other benefits
derived or received by Sellers as the result of any
transactions constituting a breach of the Restrictive
Covenants.
(d) Sellers acknowledge and agree that the
Restrictive Covenants are reasonable and valid in
geographical and temporal scope and in all other respects.
If any court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable,
the remainder of the Restrictive Covenants shall not thereby
be affected and shall be given full effect, without regard
to the invalid portions.
8.15 Access to Records. After the Closing Date, Buyer,
on the one hand, and Sellers, on the other hand, shall give,
or cause to be given, to the other party, during normal
business hours at their premises, reasonable access to the
personnel, properties, contracts, books, records, files and
documents of or relating to Sellers (with respect to the
Acquired Businesses), on the one hand, and the Acquired
Businesses, on the other hand, and shall allow the other
party (at the expense of the other party) to make copies of
all titles, contracts, books, records, files and documents,
as is reasonably necessary for the other party's legitimate
business purposes. No party will destroy any such
contracts, books, records, files or documents without first
notifying the other parties in writing and providing them
with the opportunity to take possession thereof.
8.16 Use of "Astrosystems" Name. Astrosystems hereby
grants to Buyer the personal, nontransferable, non-exclusive
right to use the name "Astrosystems" in connection with
Buyer's operation of the Acquired Businesses for a period of
one year following the Closing Date.
8.17 Bulk Sales Law. The transactions contemplated
hereby shall be consummated without compliance with Bulk
Sales Laws. If by reason of any applicable Bulk Sales Law,
any claims are asserted by creditors of Sellers, such claims
shall be the responsibility of Buyer in the case of claims
arising under any of the Assumed Liabilities, or the
responsibility of Sellers in the case of claims arising
under any other liabilities other than the Assumed
Liabilities.
8.18 SEC Filings. Prior to the Closing Date or earlier
termination of this Agreement, Astrosystems shall, to the
extent practicable, deliver to Buyer, not later than the
Business Day prior to the filing thereof, any document
proposed to be filed with the SEC.
8.19 Accounts Receivable. Following the Closing, Buyer
shall collect, on Sellers' behalf, all accounts receivable
of Sellers. Buyer shall remit to Sellers all such amounts
it collects on Sellers' behalf within 10 days following
receipt thereof. The foregoing shall not be construed to
limit Sellers' right to collect any and all accounts
receivable that are overdue; provided, however, that with
regard to any accounts receivable which are disputed, for a
period of one year following the date of the invoice related
to the disputed receivable, Sellers shall not turn over such
receivable to a collection agency without the consent of
Buyer. Buyer shall have the option, exercisable up to the
first anniversary of the date of the invoice relating to a
receivable, to purchase, on a dollar-for-dollar basis,
Sellers' then outstanding accounts receivable which relate
to the Acquired Businesses. Sellers and Buyer hereby agree
that with regard to invoices relating to the accounts
receivable which may be billed by Sellers between the date
hereof and the Closing Date, such accounts receivable shall
be for the account of Buyer if the inventory relating to
such receivable is not shipped prior to the Closing Date.
Sellers represent that, as of the date hereof, there are no
outstanding accounts receivable for which inventory has not
been shipped. In such event, if any such receivables are
collected prior to the Closing Date, the Purchase Price
shall be reduced dollar-for-dollar by an amount equal to
such collected receivables. If such accounts receivable are
collected following the Closing Date, Sellers shall promptly
remit any such amounts to Buyer.
8.20 Exclusivity. Prior to the earlier of termination
of this Agreement or February 15, 1996, neither Seller
shall, directly or indirectly, through any officer,
director, employee, agent or otherwise (including through
any investment banker, attorney or accountant retained by
any of the foregoing), solicit, initiate any discussions or
negotiations regarding, or furnish to any other person or
entity any information with respect to, or otherwise
cooperate in any way with, any proposal or offer from any
such person or entity (including any agents or
representatives thereof) relating to any acquisition of all
or a portion of the Acquired Businesses (including any
acquisition structured as a stock purchase, merger,
consolidation or share exchange).
8.21 Sales Taxes. Any sales taxes resulting from the
transactions contemplated hereby shall be borne by Buyer.
8.22 Shared Space Arrangement. Following the Closing
Date and through February 29, 1996 (the "Period"),
Astrosystems agrees that it shall permit Buyer to use the
premises located at ▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
(the "Premises") on the following terms and conditions:
(a) During the Period, Astrosystems agrees to:
(i) maintain telephone, heat, light and
janitorial services;
(ii) provide work space to all Transferred
Employees in a manner consistent with that currently
provided to them; and
(iii) use its best efforts to retain the
Astrosystems support staff employees listed on Schedule 8.22
attached hereto (the "Support Employees") (such best efforts
obligation not to include the granting of any additional
remuneration or other benefits).
The Support Employees shall perform such
services for the benefit of Buyer as are related to the
department in which they are a member, as set forth on
Schedule 8.22. Schedule 8.22 also reflects the weekly
salary for each Support Employee as well as the anticipated
percentage of time that each Support Employee shall perform
services for the benefit of Buyer. Astrosystems' best
efforts obligation as set forth above shall continue
throughout the Period with regard to each Support Employee
until such time as a particular Support Employee voluntarily
leaves Astrosystems' employment or Astrosystems is notified
by the Buyer that retention of the particular Support
Employee is no longer required.
(b) In consideration for the foregoing, if Buyer
elects to use the Premises, Buyer agrees as follows:
(i) Buyer promptly will pay to Astrosystems
the sum of $10,000 per week in advance for as long as any
Transferred Employee uses the Premises. A proportionate
amount thereof shall be due and payable for any partial week
of use.
(ii) Buyer promptly will reimburse
Astrosystems for all direct pay of Support Employees and
will, in addition, pay to Astrosystems a sum equal to 25% of
all direct pay due. The parties acknowledge and agree that
the percentages set forth on Schedule 8.22 are estimates
only and, accordingly, shall not be determinative of the
amount due from Buyer to Astrosystems hereunder. For the
purpose of determining the amount due from Buyer hereunder,
Astrosystems shall supply to Buyer on a weekly basis copies
of the time cards of the Support Employees for the preceding
week. Any time spent by Support Employees on matters not
relating to either of the Acquired Businesses will be
excluded from the calculation of amounts due.
(iii) Buyer will be liable for and will pay
all wages, payroll benefits, payroll taxes and other
employment costs and obligations attributable to the
employment of Transferred Employees.
(iv) Buyer will vacate the Premises promptly
upon expiration of the Period.
8.23 Maintenance of Existence. For a period of two
years following the Closing Date, Astrosystems shall
maintain its corporate existence in good standing. During
such period, Astrosystems shall also maintain a net worth
(computed on a non-liquidation basis) equal to no less than
the Adjusted Purchase Price (it being acknowledged and
agreed that, in calculating net worth, the Escrowed Amount,
together with interest thereon, shall be a part thereof).
8.24 Progress Payments. Set forth on Schedule 8.24
attached hereto are all progress payments heretofore
received by either Seller with respect to any Contract
assumed by Buyer pursuant to Section 3.1(a) hereof. Sellers
and Buyer hereby agree that the Purchase Price shall be
decreased, on a dollar-for-dollar basis, by the aggregate
amount of such progress payments.
8.25 Warranty Obligations. For a period of one year
following the Closing Date, with respect to the fulfillment
by Buyer of the warranty obligations being assumed by Buyer
pursuant to Section 3.1(d) hereof, Sellers shall reimburse
Buyer, within 10 business days following receipt of a
written invoice from Buyer, for any materials at cost and
for labor at the rate of $40 per hour, which are incurred by
Buyer in connection with such warranty obligations. Buyer
shall perform all warranty obligations in accordance with
generally accepted commercial warranty practice.
8.26 Orbit Guaranty. Subject to Orbit's right to
assert any defenses, counterclaims or setoffs which Buyer
may have against Sellers, Orbit hereby unconditionally,
absolutely and irrevocably guarantees to Sellers (the "Orbit
Guaranty"), and their successors and assigns, the full and
prompt payment, performance, satisfaction and discharge of
each agreement, indebtedness, liability and obligation of
Buyer (collectively, the "Buyer's Obligations") under this
Agreement and the Escrow Agreement, including, without
limitation, the following: (a) the payment of the Adjusted
Purchase Price; (b) the payment, performance, satisfaction
and discharge of Assumed Liabilities and any liabilities and
obligations arising out of the Assumed Contracts; (c) the
payment of any amounts due from Buyer to Astrosystems
pursuant to Section 8.22 and Section 11.4 hereof; and (d)
the payment of any amounts due from Buyer to Sellers as
indemnification under this Agreement.
Orbit guarantees that Buyer's Obligations will be
paid and performed strictly in accordance with the terms and
provisions of this Agreement. Nothing herein is intended to
create any obligation or liability on the part of Orbit if
no such obligation or liability exists on the part of Buyer.
Nothing herein shall be construed to eliminate or adversely
affect the availability to Orbit of any defenses,
counterclaims or setoffs which Buyer may have against
Sellers.
Sellers, in their sole discretion, may proceed
against Orbit in the first instance to collect or enforce
any or all of Buyer's Obligations, without first proceeding
against Buyer or resorting to any other remedies at the same
or at different times, provided that Sellers will consent to
the joinder of Buyer, at Orbit's or Buyer's request, in any
action brought to enforce its right under the Orbit
Guaranty. The liability of Orbit hereunder shall not be
affected by an acceptance by Sellers of any security for, or
other guarantees upon, any of Buyer's Obligations, or by an
act, delay or omission of Sellers in enforcing Buyer's
Obligations or right hereunder. This Orbit Guaranty is a
continuing guaranty which may be enforced before, after or
concurrently with proceeding against Buyer. This Orbit
Guaranty is a guaranty of payment and performance and not of
collectability and, except as herein provided, is in no way
conditioned or contingent.
Orbit hereby consents that Sellers, from time to
time, before or after any default by Buyer, with or without
any further notice to Orbit, may, without affecting the
liability of Orbit, and upon such terms and conditions as
Sellers may deem advisable: (1) extend in whole or in part
(by renewal or otherwise), modify, accelerate, change or
release any of Buyer's Obligations, or waive any default
with respect thereto; or (2) settle or compromise any claim
of Sellers against Buyer. Orbit hereby ratifies any such
action, agrees that the same shall be binding upon Orbit and
waives any defenses, counterclaims or offsets which Orbit
may have by reason thereof, except such defenses,
counterclaims and offsets as may be available to Buyer.
8.27 Bridge Financing. Between the date hereof and
the Closing Date, the parties agree to negotiate in good
faith the terms and conditions of a 90-day bridge loan (the
"Bridge Loan") of up to $500,000 from Astrosytems to Buyer,
which Bridge Loan, if successfully negotiated, will be
funded at the Closing. Any such Bridge Loan shall bear
interest and shall be fully secured by certain assets of
Orbit and Buyer. The rate of interest and the nature of the
collateral shall be negotiated in good faith by the parties.
9. Conditions to Closing.
9.1 Conditions Precedent to Obligations of Buyer and
Orbit. The obligations of Buyer and Orbit to consummate the
transactions contemplated hereby are subject to the
fulfillment, prior to or at the Closing, of each of the
following conditions (any or all of which may be waived by
Buyer or Orbit):
(a) all representations and warranties of Sellers
and contained herein or in any list, certificate, document
or statement furnished by Sellers to Buyer in connection
with the negotiation, execution or performance of this
Agreement shall, in each case, be true and correct in all
material respects at and as of the Closing Date with the
same effect as though those representations and warranties
had been made at and as of that time;
(b) Sellers shall have performed and complied
with, in all material respects, all obligations and
covenants required by this Agreement to be performed or
complied with by any such party prior to or at the Closing;
(c) Buyer shall have been furnished with a
certificate from each Seller (dated the Closing Date and in
form and substance reasonably satisfactory to Buyer)
executed by the Chairman of the Board of Directors, the
President or a Vice President of each Seller certifying to
the fulfillment of the conditions specified in Sections
9.1(a) and 9.1(b) hereof;
(d) Buyer shall have been furnished with an
opinion of Certilman Balin ▇▇▇▇▇ & ▇▇▇▇▇, LLP, counsel to
Sellers, in form and substance reasonably satisfactory to
Buyer;
(e) there shall be no judgment, decree,
injunction, rule or order of any court, governmental
department, commission, agency, instrumentality or
arbitrator outstanding which prohibits, restricts or delays
consummation of the transactions contemplated by this
Agreement; there shall be no pending lawsuit, claim or legal
action relating to the transactions contemplated hereby
which would materially adversely affect such transactions or
Buyer or Orbit;
(f) Buyer shall have received from Sellers copies
of all Required Consents or Sellers shall confirm their
agreement to act in accordance with Section 8.10 hereof;
(g) Buyer shall have received a copy of
resolutions adopted by the Board of Directors and, if
required, the shareholders, of each Seller authorizing the
execution, delivery and performance of this Agreement by
each such Seller, and a certificate of the Secretary or an
Assistant Secretary of each Seller, dated the Closing Date,
stating that such resolutions were duly adopted and are in
full force and effect at such date and setting forth the
incumbency of each person executing this Agreement or any
other document delivered pursuant to this Agreement on
behalf of each Seller;
(h) Sellers shall have executed and delivered to
Buyer a ▇▇▇▇ of Sale in form and substance reasonably
satisfactory to Buyer (the "▇▇▇▇ of Sale");
(i) each Seller shall have executed and delivered
to Buyer an Assignment of Intellectual Property in form and
substance reasonably satisfactory to Buyer (the "Assignments
of Intellectual Property");
(j) subject to the provisions of Section 8.10
hereof, each Seller shall have executed and delivered to
Buyer an Assignment of Contracts in form and substance
reasonably satisfactory to Buyer (the "Assignments of
Contracts");
(k) Sellers shall deliver to Buyer evidence
satisfactory to Buyer that all Liens (other than Permitted
Liens) on the Assets have been cancelled, terminated and
extinguished;
(l) this Agreement and the transactions
contemplated hereby as well as the Plan, shall have been
approved and adopted by the affirmative vote of holders of
the majority of all outstanding shares of Astrosystems
entitled to vote for the transactions contemplated by this
Agreement; and
(m) Sellers shall have executed and delivered to
Buyer and Orbit the Escrow Agreement.
9.2 Conditions Precedent to Obligations of Sellers.
The obligations of Sellers to consummate the transactions
contemplated by this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the
following conditions (any or all of which may be waived by
Sellers):
(a) all representations and warranties of Buyer
and Orbit to Sellers shall be true and correct in all
material respects at and as of the Closing Date with the
same effect as though those representations and warranties
had been made at and as of that time;
(b) Buyer and Orbit shall have performed, and
complied in all material respects with, all obligations and
covenants required by this Agreement to be performed or
complied with by them, respectively, prior to or at the
Closing;
(c) Sellers shall have been furnished with
certificates dated the Closing Date and in form and
substance reasonably satisfactory to the Sellers executed by
the Chairman of the Board of Directors, the President or a
Vice President of each of Buyer and Orbit and certifying to
the fulfillment of the conditions specified in Sections
9.2(a) and 9.2(b) hereof;
(d) Sellers shall have been furnished with an
opinion of Squadron, Ellenoff, Plesent & ▇▇▇▇▇▇▇▇▇, LLP,
counsel to Buyer and Orbit, in form and substance reasonably
satisfactory to Sellers:
(e) there shall be no judgment, decree,
injunction, rule or order of any court, governmental
department, commission, agency, instrumentality or
arbitrator outstanding which prohibits, restricts or delays
consummation of the transactions contemplated by this
Agreement; there shall be no pending lawsuit, claim or legal
action relating to the transactions contemplated by this
Agreement which would materially adversely affect such
transactions or Sellers;
(f) Sellers shall have received a copy of
resolutions adopted by the Board of Directors of each of
Buyer and Orbit authorizing the execution, delivery and
performance of this Agreement by each of Buyer and Orbit,
and a certificate of the Secretary or an Assistant Secretary
of Buyer, dated the Closing Date, stating that such
resolutions were duly adopted and are in full force and
effect at such date, and setting forth the incumbency of
each person executing this Agreement, or any other documents
delivered pursuant to this Agreement on behalf of each of
Buyer and Orbit;
(g) Buyer shall have executed and delivered to
Sellers an Assumption Agreement in form and substance
reasonably acceptable to Sellers (the "Assumption
Agreement");
(h) this Agreement and the transactions
contemplated hereby, as well as the Plan, shall have been
approved and adopted by the affirmative vote of holders of
a majority of all outstanding shares of Astrosystems
entitled to vote for the transactions contemplated hereby;
(i) the Required Consents shall have been
obtained; and
(j) Buyer and Orbit shall have executed and
delivered to Sellers the Escrow Agreement.
10. Indemnification.
10.1 Indemnification by Sellers. Sellers shall jointly
and severally indemnify Buyer and hold it harmless at all
times from and after the Closing Date against and in respect
of any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, damages, losses, liabilities,
taxes and deficiencies and penalties and interest thereon
and costs and expenses, including reasonable attorneys' fees
(collectively, "Losses") resulting from (a) any
misrepresentation, breach of warranty, or nonfulfillment of
any covenant or agreement of either Seller in this
Agreement, or (b) the Excluded Liabilities.
10.2 Indemnification by Buyer.
(a) Buyer shall indemnify Sellers and hold each
of them harmless at all times from and after the Closing
Date against and in respect of any and all Losses resulting
from (i) any misrepresentation, breach of warranty or
nonfulfillment of any covenant (including the provisions of
Section 8.22 hereof) or agreement of Buyer in this
Agreement, (ii) the Assumed Liabilities; or (iii) any Losses
resulting from Buyer's actual use of the Premises during the
Period and which were not caused by either Seller.
(b) Orbit shall indemnify Sellers and hold each
of them harmless at all times from and after the Closing
Date against and in respect of any and all Losses resulting
from any misrepresentation or breach of warranty in this
Agreement.
10.3 Period of Indemnity. All representations and
warranties of the parties contained in this Agreement or in
any document delivered pursuant to this Agreement, shall
survive the execution and delivery of this Agreement and
shall continue in full force and effect for two years after
the Closing Date and thereafter shall terminate; provided,
however, that if at the expiration of the appropriate period
any claim for indemnification has been asserted but not
fully determined, such period will be extended as to such
claim until it is finally determined. All covenants or
agreements which by their terms are to be performed after
the Closing Date shall survive until fully discharged.
10.4 Limitations. No indemnity shall be payable to
the Buyer with respect to any claim under Section 10.1(a),
or to the Sellers with respect to any claim under Sections
10.2(a)(i) or 10.2(b), based upon, arising out of or
otherwise in respect of any inaccuracies in or any breach of
any representation or warranty (i) with respect to any Loss
of less than $2,500, and (ii) unless and until the aggregate
of all Losses due from Buyer and Orbit or Sellers, as the
case may be, exceed $50,000, at which point all Losses so
due shall be paid in full by Sellers or Buyer and Orbit, as
the case may be. In addition, the total indemnification to
which Buyer shall be entitled under this Agreement shall be
limited to an amount, in the aggregate, not to exceed the
Adjusted Purchase Price.
10.5 Notice to the Indemnitor. Promptly after the
assertion of any claim by a third party or occurrence of any
event which may give rise to a claim for indemnification
from an indemnitor (the "Indemnitor") under this Section, an
indemnified party (the "Indemnified Party") shall notify the
Indemnitor in writing of such claim (the "Claims Notice").
The Claims Notice shall describe the asserted liability in
reasonable detail, and shall indicate the amount (estimated,
if necessary and to the extent feasible) of the Loss that
has been or may be suffered by the Indemnified Party.
Failure by the Indemnified Party to give a Claims Notice to
the Indemnitor in accordance with the provisions of this
Section 10.5 shall not relieve the Indemnitor of its
obligations hereunder except to the extent that the
Indemnitor has been actually prejudiced by such failure.
10.6 Rights of Parties to Settle or Defend. The
Indemnitor may elect to compromise or defend, at its own
expense, by its own counsel and to the extent an election
with respect to such compromise or defense is available to
the Indemnified Party, any asserted liability. If the
Indemnitor elects to compromise or defend such asserted
liability, it shall within 30 calendar days (or sooner, if
the nature of the asserted liability so requires) notify the
Indemnified Party of its intent to do so, and the
Indemnified Party shall cooperate, at the expense of the
Indemnitor, in the compromise of, or defense against, such
asserted liability. If the Indemnitor elects to defend any
claim, the Indemnified Party shall make available to the
Indemnitor any books, records or other documents within its
control that are necessary or appropriate for such defense.
If the Indemnitor elects not to compromise or defend the
asserted liability, fails to notify the Indemnified Party of
its election as herein provided or contests its obligation
to indemnify under this Agreement, the Indemnified Party may
pay, compromise or defend (at the expense of the Indemnitor)
such asserted liability as the Indemnified Party considers
appropriate. The parties agree to cooperate fully with one
another in the defense, settlement or comprise of any
asserted liability. Notwithstanding the foregoing, neither
the Indemnitor nor the Indemnified Party may settle or
compromise any claim over the objection of the other;
provided that consent to settlement or compromise shall not
be unreasonably withheld. In any event, the Indemnified
Party and the Indemnitor may participate, at their own
expense, in the defense of such asserted liability.
10.7 Exclusive Remedies. The parties hereto
acknowledge that the indemnity rights set forth in Article
10 and in Section 8.9 hereof are intended to be their
exclusive monetary remedies in connection with this
Agreement and the transactions contemplated hereby; provided
that nothing in this Section 10.7 shall limit in any way the
availability of specific performance, injunctive relief or
other equitable remedies to which a party may otherwise be
entitled.
11. Termination.
11.1 Termination. This Agreement may be terminated and
the transactions contemplated herein may be abandoned (a) by
mutual consent of Sellers and Buyer; or (b) by Sellers or
Buyer by notice to the other parties if the Closing shall
not have occurred on or before April 30, 1996, or (c) by
Sellers if the conditions to the obligation of Buyer to
consummate the transactions contemplated hereby, as set
forth in Section 9.1, shall have been satisfied or waived
and Buyer shall be unable or unwilling to close on the terms
and conditions provided for in this Agreement on or before
February 15, 1996.
11.2 No Liabilities in Event of Termination. In the
event of any termination of this Agreement as provided in
Section 11.1 above, this Agreement shall forthwith become
wholly void and of no further force and effect, and, except
as provided in Sections 11.3 and 11.4 hereof, there shall be
no liability on the part of any of the parties hereto or
their respective affiliates, officers or directors by reason
of the execution hereof; provided that such termination
shall not preclude any party from suing another party for
material breach of any covenant or agreement contained in
the last sentence of Section 8.2 hereof or in Section 8.5
hereof or the willful failure to consummate the transactions
contemplated hereby.
11.3 Lack of Shareholder Approval. In the event that
the transactions contemplated hereby are not consummated due
to Astrosystems' failure to obtain Shareholder Approval,
Sellers shall reimburse Buyer for all legal, accounting and
other expenses incurred by Buyer in connection with the
preparation and negotiation of this Agreement and the
transactions contemplated hereby. Buyer shall use its
reasonable efforts to ensure that any such expenses are
commercially reasonable. The foregoing shall not be deemed
a limitation on the right of Buyer to recover damages for
the breach of any provision of this Agreement.
11.4 Failure of Buyer to Close. In the event that (a)
the conditions to the obligation of Buyer to consummate the
transactions contemplated hereby, as set forth in Section
9.1, shall have been satisfied or waived and (b) the Closing
shall not have occurred on or before April 10, 1996 due to
the inability or unwillingness of Buyer to close on the
terms and conditions provided for in this Agreement, Buyer
shall reimburse Sellers for all legal, accounting and other
expenses incurred by Sellers in connection with the
preparation and negotiation of this Agreement and the
transactions contemplated hereby. Sellers shall use its
reasonable efforts to ensure that any such expenses are
commercially reasonable. The foregoing shall not be deemed
a limitation on the right of Sellers to recover damages for
the breach of any provision of this Agreement.
12. Miscellaneous.
12.1 Entire Agreement. This Agreement (together with
the Schedules hereto) contains, and is intended as, a
complete statement of all of the terms of the arrangements
between the parties with respect to the matters provided
for, and supersedes any previous agreements and
understandings between the parties with respect to those
matters. Notwithstanding the foregoing, the provisions of
that certain confidentiality agreement, dated July 17, 1995,
between Astrosystems and Orbit shall continue in full force
and effect and all information and documents provided
pursuant to this Agreement shall be covered by the terms of
such confidentiality agreement.
12.2 Governing Law. This Agreement shall be governed
by, and construed and enforced in accordance with the laws
of the State of New York, without regard to its principles
of conflicts of law.
12.3 Headings. The section headings of this Agreement
are for reference purposes only and are to be given no
effect in the construction or interpretation of this
Agreement.
12.4 Notices. All notices and other communications
under this Agreement shall be in writing and shall be deemed
given when delivered personally, mailed by registered mail,
return receipt requested, sent by recognized overnight
delivery service or, to the extent receipt is confirmed, by
telecopy, telefax, or other electronic transmission service
to the parties at the following addresses (or to such other
address as a party may have specified by notice given to the
other party pursuant to this provision):
If to Buyer or to Orbit, to such party in care of
Orbit International Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ Sunshine
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Squadron, Ellenoff, Plesent & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Sellers, to:
Astrosystems, Inc.
▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy no.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation no.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Certilman Balin ▇▇▇▇▇ & ▇▇▇▇▇, LLP
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy no.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation no.: (▇▇▇) ▇▇▇-▇▇▇▇
12.5 Separability. If at any time any of the covenants
or the provisions contained herein shall be deemed invalid
or unenforceable by the laws of the jurisdiction wherein it
is to be enforced, by reason of being vague or unreasonable
as to duration, geographic scope, scope of activities
restricted or for any other reason, such covenants or
provisions shall be considered divisible as to such portion
and such covenants or provisions shall become and be
immediately amended and reformed to include only such
covenants or provisions as are enforceable by the court or
other body having jurisdiction of this Agreement; and the
parties agree that such covenants or provisions, as so
amended and reformed, shall be valid and binding as though
the invalid or unenforceable portion had not been included
herein.
12.6 Amendment; Waiver. No provision of this Agreement
may be amended or modified except by an instrument or
instruments in writing signed by the parties hereto. Any
party may waive compliance by another with any of the
provisions of this Agreement. No waiver of any provision
hereof shall be construed as a waiver of any other
provision. Any waiver must be in writing.
12.7 Assignment and Binding Effect. None of the
parties hereto may assign any of its or his rights or
delegate any of its or his duties under this Agreement
without the prior written consent of the others; provided,
that Buyer may assign any of its rights or delegate any of
its duties to any entity controlled by Buyer. Any such
delegation shall not relieve Buyer of its obligations under
this Agreement. All of the terms and provisions of this
Agreement shall be binding on, and shall inure to the
benefit of, the respective successors and permitted assigns
of the parties.
12.8 No Benefit to Others. The representations,
warranties, covenants and agreements contained in this
Agreement are for the sole benefit of the parties hereto and
their respective successors and assigns and they shall not
be construed as conferring and are not intended to confer
any rights on any other persons.
12.9 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an
original, and each party thereto may become a party hereto
by executing a counterpart hereof. This Agreement and any
counterpart so executed shall be deemed to be one and the
same instrument.
12.10 Arbitration.
(a) Except with regard to Section 4.2 hereof and
any other matters that are not a proper subject of
arbitration, all disputes between the parties hereto
concerning the performance, breach, construction or
interpretation of this Agreement or any portion thereof, or
in any manner arising out of this Agreement or the
performance thereof, shall be submitted to binding
arbitration, in accordance with the rules of the American
Arbitration Association, which arbitration shall be carried
out in the manner hereinafter set forth.
(b) Within twenty (20) days after written notice
by one party to the other of its demand for arbitration,
which demand shall set forth the name and address of its
arbiter, the other party shall select its arbiter and so
notify the demanding party. Within twenty (20) days
thereafter, the two arbiters so selected shall select the
third arbiter. The dispute shall be heard by the arbiters
within sixty (60) days after selection of the third arbiter.
The decision of the arbiters shall be rendered within thirty
(30) days after the hearing. The decision of any two (2)
arbiters shall be binding upon the parties. In default of
either side naming its arbiter as aforesaid or in default of
the selection of the said third arbiter as aforesaid, the
American Arbitration Association shall designate such
arbiter upon the application of either party. The
arbitration proceeding shall take place at a mutually
agreeable location.
(c) A party who files a notice of demand for
arbitration must assert in the demand all claims then known
to that party on which arbitration is permitted to be
demanded. When a party fails to include a claim through
oversight, inadvertence or excusable neglect, or when a
claim has matured or been acquired subsequently, the
arbiters may permit amendment. No demand for arbitration
shall be made after the date when institution of legal or
equitable proceedings based on such claim would be barred by
the applicable statute of limitations.
(d) The award rendered by the arbiters shall be
final, binding and conclusive, and judgment may be entered
upon it in accordance with applicable law in the appropriate
court in the State of New York.
(e) Each party shall pay its own expenses of
arbitration, and the expenses of the arbiters and the
arbitration proceeding shall be equally shared; provided,
however, that, if, in the opinion of a majority of the
arbiters, any claim or defense was unreasonable, the
arbiters may assess, as part of their award, all or any part
of the arbitration expenses of the other party (including
reasonable attorneys' fees) and of the arbiters and the
arbitration proceeding against the party raising such
unreasonable claim or defense.
12.11 Schedules. Any information, data or other
disclosure given or made pursuant to a particular schedule
to this Agreement shall be deemed given and made in each and
every other schedule to this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this
Asset Purchase Agreement as of the date first above written.
ASTROSYSTEMS, INC.
By:____________________
Name:
Title:
▇▇▇▇▇▇▇ ELECTRONICS, INC.
By:____________________
Name:
Title:
ORBIT INTERNATIONAL CORP.
By:____________________
Name:
Title:
CABOT COURT, INC.
By:____________________
Name:
Title:
For Purposes of Section 8.14
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