AMENDMENT TO ASSET PURCHASE AGREEMENT
AMENDMENT ("Amendment") made as of October 3, 1997 to the Asset Purchase
Agreement ("Purchase Agreement") made as of August 27, 1997 by and between
AlliedSignal Inc., a Delaware corporation ("AlliedSignal"), Breed Technologies,
Inc., a Delaware corporation ("Breed"), and the other parties thereto.
AlliedSignal, Breed and the other parties to the Purchase Agreement desire
to amend the Purchase Agreement on the terms set forth herein. Accordingly, this
Amendment shall be deemed to be part of the Purchase Agreement and all
references in the Purchase Agreement to this Agreement(or similar terminology)
shall be deemed to refer to the Purchase Agreement after giving effect to the
amendments set forth in this Amendment. All capitalized terms used herein,
unless otherwise defined herein, are used as defined in the Purchase Agreement.
In consideration of the mutual covenants and agreements contained in the
Purchase Agreement and in this Amendment, and notwithstanding anything in the
Purchase Agreement or any Ancillary Agreement to the contrary, Sellers and
Purchasers agree as follows:
1. Closing. The Closing shall take place at 10:00 a.m. local time on
November 7, 1997 (or such earlier date as Breed and AlliedSignal may mutually
agree in writing), at the locations in New York and London, respectively, set
forth in Section 1.1 of the Purchase Agreement, and shall be effective on such
date as set forth in Section 1.2 of the Purchase Agreement; provided, however,
that, if on November 7, 1997 the condition set forth in the first sentence of
Section 9.1 or Section 10.1 (the "Injunction Condition") shall not be satisfied,
the Closing Date shall be the second business day after the date on which the
Injunction Condition is satisfied; provided, further, however, that if the
Injunction Condition has not been satisfied by December 29, 1997 the Purchase
Agreement may be terminated by either party on the basis set forth in Section
11.2 of the Purchase Agreement without giving effect to the proviso in the first
sentence thereof. All references in the Purchase Agreement to the "Closing Date"
shall be deemed to refer to the date determined in accordance with the previous
sentence.
2. Certain Conditions
(a) Article 9. Without limiting Purchasers' rights under the provision of
Article 15 of the Purchase Agreement, Purchasers hereby acknowledge and agree
that (i) all of the conditions to the performance of their respective
obligations at the Closing are set forth in Article 9 of the Purchase Agreement,
(ii) the conditions set forth in Sections 9.1 (subject to clause (iii)
immediately following), 9.2, 9.3, 9.4, 9.5 and 9.6 of the Purchase Agreement are
deemed to have been satisfied and to remain satisfied through and as of the
Closing (such conditions are referred to herein collectively as the "Article 9
Satisfied Conditions"), and (iii) except for the condition set forth in the
first sentence of Section 9.1 of the Purchase Agreement, Purchasers waive any
right to assert, and may not assert, either before or at the Closing, that any
Article 9 Satisfied Condition entitles Purchasers to refrain from consummating
the transactions contemplated by the Purchase Agreement on the Closing Date.
(b) Article 10. Sellers hereby acknowledge and agree that (i) all of the
conditions (b) Article 10. Sellers hereby acknowledge and agree that (i) all of
the conditions to the performance of their respective obligations at the Closing
are set forth in Article 10 of the Purchase Agreement, (ii) the conditions set
forth in Sections 10.1 (subject to clause (iii) immediately following), 10.2,
10.3, 10.4 (subject to clause (x) in Section 3 below) and 10.5 of the Purchase
Agreement are deemed to have been satisfied and to remain satisfied through and
as of the Closing (such conditions are referred to herein collectively as the
"Article 10 Satisfied Conditions"), and (iii) except for the condition set forth
in the first sentence of Section 10.1 of the Purchase Agreement and except as
provided in Section 3 below, Sellers waive any right to assert, and may not
assert, either before or at the Closing, that any Article 10 Satisfied Condition
entitles Sellers to refrain from consummating the transactions contemplated by
the Purchase Agreement on the Closing Date.
(c) Sections 9.4 and 10.4. Sections 9.4 and 10.4 of the Purchase Agreement
are hereby amended by deleting the last sentence of each such Section. At the
Closing, AlliedSignal shall deliver to Breed a certificate executed by a senior
executive officer of AlliedSignal to the effect that (x) each representation and
warranty of Sellers contained in the Purchase Agreement is true and correct as
of the Closing Date on the basis set forth in the first sentence of Section 9.4
of the Purchase Agreement except to the extent set forth in such certificate,
and (y) each covenant and agreement of Sellers required by the Purchase
Agreement to be performed by them at or prior to the closing has been performed
and complied with on the basis set forth in the second sentence of such Section
9.4 except to the extent set forth in such certificate; provided, however, that
the form and substance of such certificate (including, without limitation, the
accuracy thereof and the inclusion of any such exception) or any other claim
relating to such certificate shall not entitle Purchasers (i) to refrain from
consummating the transactions contemplated by the Purchase Agreement on the
Closing Date or (ii) to assert any rights at or after the Closing other than any
applicable indemnification rights pursuant to the terms of Article 15 of the
Purchase Agreement (as amended hereby).
3. Termination. Section 11.1 of the Purchase Agreement is hereby amended to
delete Section 11.1(b) and (c) thereof and the final two sentences of such
Section 11.1. Purchasers acknowledge and agree that if, on the Closing Date
established pursuant to Section 1 above:
(i) the conditions set forth in the first sentence of Sections 9.1 and
10.1, respectively, of the Purchase Agreement have been satisfied; and
(ii) Purchasers fail to pay the Initial Purchase Price in full in
accordance with Sections 3.1 and 13 of the Purchase Agreement, then, (x) such
failure by Purchasers shall constitute a breach of Purchasers' representation
and warranty set forth in Section 7.6 of the Purchase Agreement and a failure of
the condition in Section 10.4 of the Purchase Agreement, (y) Breed shall pay to
AlliedSignal as liquidated damages for the loss of a bargain and not as a
penalty the amount of $100,000,000 in cash by wire transfer of funds by no later
than 10:00 a.m., Eastern Time, on the first business day following the Closing
Date, and (z) Sellers shall have the right, on and after the first business day
after the Closing Date, to terminate the Purchase Agreement. Purchasers and
Sellers acknowledge and agree that (i) the damages that Sellers would sustain as
a result of a breach by Breed of its obligations to consummate the transactions
contemplated by the Purchase Agreement on the Closing Date (including,
without limitation, the payment in full of the Initial Purchase Price in
accordance with Sections 3.1 and 13 of the Purchase Agreement) would be very
substantial but would be difficult or impossible to measure, (ii) the amount
provided in clause (y) above is a reasonable estimate of the damages to be
sustained by Seller as a result of such breach and is intended only to
compensate for the anticipated harm likely to be suffered thereby and (iii)
Seller's sole remedy for such breach shall be the payment provided for in clause
(y) above. Upon receipt of such $100,000,000 payment by AlliedSignal,
AlliedSignal shall have no further claim against Breed for such breach, the
Purchase Agreement shall terminate and become null and void and of no further
force and effect, and none of the parties to the Purchase Agreement (nor their
respective Affiliates, directors, shareholders, officers, employees, agents,
consultants, attorney-in-fact or other representatives) shall have any liability
in respect of such termination. The obligation of Breed to make payment of
$100,000,000 to AlliedSignal pursuant to clause (y) above is absolute and
unconditional and Breed hereby waives, and agrees not to assert, any defense of
any kind in any action, suit or proceeding to enforce such payment obligation by
AlliedSignal. If Breed fails to make the payment required by clause (y) above
when due, Sellers shall have the right to pursue all rights in equity or law
arising as a result of Breed's breach of its obligation to make such payment
required by clause (y) above. This Section 3 shall survive any termination of
the Purchase Agreement.
4. Indemnification. Section 15.4 of the Purchase Agreement is hereby
amended by adding a new clause (h) thereto at the end thereof as follows:
"(h) No claim may be made by Purchasers for indemnification pursuant to
Section 15.1, 15.6, 15.7 or 15.8 to the extent that the Losses for which
Purchasers seek such indemnification (i) arise out of or result from events or
conditions that occur after 12:01 a.m. Eastern Time, September 30, 1997 (except
to the extent arising out of a breach of any covenant or agreement on the part
of a Seller in this Agreement or the Ancillary Agreements (other than the
Commercial Agreement)) and (ii) are a result of the failure of the parties
hereto to consummate the Closing on September 30, 1997 (including, without
limitation, any deterioration in, or diminution in value of, the Business or the
Assets)."
5. Closing Documents
(a) Purchasers shall execute and deliver at the Closing an Assumption
Agreement in the form of Attachment A hereto. Purchasers acknowledge and agree
that any breach of the covenant in the preceding sentence may give rise to
irreparable harm for which money damages would not be an adequate remedy and
agree that, in addition to other remedies, Sellers will be entitled to enforce
such covenant by a decree of specific performance without the necessity of
proving the inadequacy of money damages.
(b) Sellers and Purchasers shall use reasonable efforts to agree prior to
the Closing Date on the final form of all documents required to be executed and
delivered at the Closing pursuant to Articles 5, 8, 12 and 13 of the Purchase
Agreement (the "Closing Documents"), which in the case of each Exhibit to the
Purchase Agreement shall be substantially in the form of
such Exhibit as of August 27, 1997. If Sellers and Purchasers agree as of
the Closing Date that a Closing Document is mutually satisfactory, such Closing
Document shall be executed and delivered at the Closing as provided in the
Purchase Agreement. If Sellers and Purchasers do not agree as of the Closing
Date that a Closing Document is mutually satisfactory, such Closing Document
shall not be delivered at the Closing (it being understood and agreed that such
non- delivery shall have no effect on the obligations of the parties to
consummate the Closing), the issue of the appropriate form of the Closing
Document shall be settled by arbitration pursuant to Section 16.9 of the
Purchase Agreement as promptly as practicable after the Closing, and the Closing
Document shall be executed and delivered by the appropriate parties in the form
so determined promptly after such determination, with retroactive effect to the
Closing Date. Pending such determination with respect to any Exhibit to the
Purchase Agreement, the party or parties to whom services are to be provided
thereunder shall receive the benefits thereof (and perform any corresponding
obligations) based on the form of such Exhibit as of August 27, 1997. Neither
Sellers nor Purchasers shall have any liability, under Article 15 of the
Purchase Agreement or otherwise, to the other for the failure to agree on the
form of a Closing Document by the Closing Date.
(c) Purchasers acknowledge and agree that, notwithstanding any provision to
the contrary in the Purchase Agreement (including, without limitation, any
requirement in the Purchase Agreement for the delivery to Purchasers at the
Closing of documents in a form reasonably satisfactory to Purchasers or mutually
satisfactory to Purchasers and Sellers), Purchasers may not assert that any
failure to receive at the Closing a Closing Document in a form reasonable
satisfactory or satisfactory to Purchasers or any failure of Purchasers and
Sellers to agree on the form of a Closing Document as contemplated by Section
5(b) of this Amendment entitle Purchasers to refrain form consummating the
transactions contemplated by the Purchase Agreement on the Closing Date
(including, without limitation, the payment in full of the Initial Purchase
Price in accordance with Sections 3 and 13 of the Purchase Agreement and the
execution and delivery of the Assumption Agreement in the form of Attachment A
hereto).
6. Allocation of Purchase Price.
(a) Section 3.3(a) of the Purchase Agreement is hereby amended by deleting
the second sentence thereof and inserting in place of such sentence the
following sentence:
"Sellers and Purchasers shall use reasonable efforts to agree on such
allocations by the Closing Date; provided, however, that neither Sellers nor
Purchasers shall have any liability, under Article 15 or otherwise, to the other
for the failure to agree on such allocations."
(b) Section 3.3(b) of the Purchase Agreement is hereby amended and restated
in its entirety as follows:
"(b) Sellers and Purchasers shall use reasonable efforts to agree before
the Closing Date as to the allocation of the Initial Purchase Price to each Real
Property (and real property subject to any Real Property Lease if any transfer
tax is due in connection with the assignment of such lease), and such allocation
shall be utilized for purposes of (i) calculating all real property
transfer taxes due in connection with the direct or indirect transfer of
the real property pursuant to the provisions of this Agreement and (ii)
determining the amount of title insurance to be purchased for any Real Property
for which title insurance is purchased. Neither Sellers nor Purchasers shall
have any liability, under Article 15 or otherwise, to the other for the failure
to agree on such allocation."
7. Representation. Section 6.4 of the Purchase Agreement is hereby amended
by adding the following sentence to the end thereof: "At the Closing, all open
purchase orders between BAG, S.p.A. and Sellers will be assignable to Purchasers
without the need to obtain any Consent thereunder."
8. Miscellaneous. In the event of any conflict or inconsistency between the
terms of this Amendment and the Purchase Agreement, the terms of this Amendment
shall govern. The provisions of Section 16.9 of the Purchase Agreement shall not
apply to the matters covered by this Amendment (other than as contemplated by
Section 4 and the third sentence of Section 5(b) of this Amendment).
9. Agreement by Parents. On the date hereof each of AlliedSignal and Breed
are executing and delivering this Amendment. Prior to the Closing Date,
AlliedSignal shall cause each other Seller to execute and deliver to Breed, and
Breed shall cause each other Purchaser to execute and deliver to AlliedSignal, a
counterpart of this Amendment.
IN WITNESS WHEREOF, the duly authorized officers or representative of the
parties hereto have duly executed this Amendment on the date first written
above.
BREED TECHNOLOGIES, INC. ALLIEDSIGNAL, INC.
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Title: Vice Chairman Title: Sr. VP, General
Counsel & Secretary