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Exhibit 10.30
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AGREEMENT OF PURCHASE AND SALE
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between
AGNEM HOLDINGS, INC.
and
TRW INC.
Dated as of August 5, 1986
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TABLE OF CONTENTS
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Page
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Preamble...........................................................................................................
Recitals ..........................................................................................................
ARTICLE 1 - General Provisions
1.l Definitions......................................................................................
1.2 Other Definitions and Meanings; Interpretation...................................................
1.3 TRW's Knowledge..................................................................................
ARTICLE II - Purchase and Sale
2.1 Transaction......................................................................................
2.2 Acquired Assets..................................................................................
2.3 Excluded Assets..................................................................................
2.4 Assumed Liabilities..............................................................................
2.5 Excluded Liabilities.............................................................................
2.6 Purchase Price...................................................................................
2.7 Adjustment.......................................................................................
(a) Closing Audit...........................................................................
(b) Review by Purchaser.....................................................................
(c) Accounting Principles...................................................................
(d) Base-Line Net Book Value................................................................
(e) Determination of Closing Net Book Value.................................................
(f) Amount of Adjustment....................................................................
2.8 Payment of Purchase Price...............................................................
2.9 Refund of Purchase Price.........................................................................
2.10 Method of Payment................................................................................
ARTICLE III - Representations and Warranties
3.1 TRW's General Representations and Warranties.....................................................
(a) Organization and Existence..............................................................
(b) Power and Authority.....................................................................
(c) Authorization...........................................................................
(d) Binding Effect..........................................................................
(e) No Default..............................................................................
(f) Finders.................................................................................
(g) Representations and Warranties True and Complete........................................
3.2 TRW's Representations and Warranties Concerning the Disclosure Package...........................
(a) Financial Statements....................................................................
(b) Investments.............................................................................
(c) Receivables.............................................................................
(d) Inventories.............................................................................
(e) Real Estate.............................................................................
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(f) Personal Property.......................................................................
(g) Liabilities.............................................................................
(h) Litigation..............................................................................
(i) Contracts...............................................................................
(j) Intellectual Property...................................................................
(k) Employee Benefits.......................................................................
(l) Permits and Approvals...................................................................
(m) Compliance with Laws....................................................................
(n) Payment of Taxes; Tax Liens.............................................................
(o) No Material Events......................................................................
(p) Additional Information..................................................................
(q) Undisclosed Liabilities.................................................................
3.3 Purchaser's Representations and Warranties.......................................................
(a) Organization and Existence..............................................................
(b) Power and Authority.....................................................................
(c) Authorization...........................................................................
(d) Binding Effect..........................................................................
(e) No Default..............................................................................
(f) Finders.................................................................................
(g) Purchaser's Financing Plan..............................................................
(h) Representations and Warranties True and Complete........................................
3.4 Disclaimer.......................................................................................
3.5 Survival.........................................................................................
ARTICLE IV - Actions Before Closing
4.1 Access to Records................................................................................
4.2 Interim Conduct of the Business..................................................................
4.3 Purchaser's Approval of Certain Transactions.....................................................
4.4 Negotiation of Other Agreements..................................................................
4.5 Consents to Assignment...........................................................................
4.6 Novation of Government Contracts.................................................................
4.7 Government Approvals.............................................................................
4.8 Review of Disclosure Package; Right to Reject....................................................
4.9 Purchaser's Financing............................................................................
4.10 Labor Relations..................................................................................
4.11 Special Receivables..............................................................................
ARTICLE V - Conditions
5.1 Conditions to Purchaser's Obligations............................................................
5.2 Conditions to TRW's Obligations..................................................................
ARTICLE VI - Closing
6.1 The Closing......................................................................................
6.2 Time, Date, and Place of Closing.................................................................
6.3 Purchaser's Obligations..........................................................................
6.4 TRW's Obligations................................................................................
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6.5 Real Estate Conveyance...........................................................................
(a) Title Insurance Commitment..............................................................
(b) Warranty Deeds..........................................................................
(c) Instructions............................................................................
(d) Confirmation............................................................................
6.6 Leasehold Interests in Real Estate...............................................................
ARTICLE VII - Actions After Closing
7.1 Further Conveyances..............................................................................
7.2 Further Consents to Assignment...................................................................
7.3 Resale of Inventories............................................................................
7.4 Access to Former Business Records................................................................
7.5 Access to Former Employees.......................................................................
7.6 Access to Business Records.......................................................................
7.7 Access to Employees..............................................................................
7.8 Trade Receivables................................................................................
7.9 Environmental Claims ............................................................................
7.10 Environmental Remediation........................................................................
ARTICLE VIII - Employees and Employee Benefits
8.1 Employment.......................................................................................
8.2 Pension Plans....................................................................................
8.3 401(k) Plan .....................................................................................
8.4 Medical Benefits.................................................................................
8.5 Life Insurance...................................................................................
8.6 Accrued Vacation ................................................................................
8.7 Workers' Compensation............................................................................
8.8 Severance Payments...............................................................................
8.9 Unemployment Insurance...........................................................................
8.10 Other Employee Benefits..........................................................................
8.11 Termination or Layoff of Certain Employees.......................................................
ARTICLE IX - Indemnification
9.1 Indemnification of TRW...........................................................................
9.2 Indemnification of Purchaser.....................................................................
9.3 Claims...........................................................................................
(a) Notice..................................................................................
(b) Responsibility for Defense .............................................................
(c) Right to Participate....................................................................
(d) Settlement ............................................................................
9.4 Limitation on Indemnification....................................................................
ARTICLE X - Amendment, Waiver, and Termination
10.1 Amendment........................................................................................
10.2 Waiver...........................................................................................
10.3 Termination ....................................................................................
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10.4 Unilateral Right of Cancellation.................................................................
ARTICLE XI - Miscellaneous
11.1 Cooperation......................................................................................
11.2 Confidentiality .................................................................................
11.3 Severability.....................................................................................
11.4 Expenses.........................................................................................
11.5 Transfer of Taxes................................................................................
11.6 Bulk Sales.......................................................................................
11.7 Notices..........................................................................................
11.8 Assignment.......................................................................................
11.9 No Third Parties.................................................................................
11.10 Incorporation by Reference.......................................................................
11.11 Governing Law....................................................................................
11.12 Counterparts.....................................................................................
11.13 Complete Agreement...............................................................................
APPENDICES
Appendix A - Certain Definitions
Appendix B - Due Diligence Plan and Certifications
Appendix C - Contents of the PAD Disclosure Package
Appendix D - Documents To Be Delivered by TRW at the Closing
Appendix E - Documents To Be Delivered by Purchaser at the Closing
Appendix F - Form of Shared Assets Agreement
Appendix G - Form of Shared Liabilities Agreement
Appendix H - Form of Unconditional Guarantee
Appendix I - Form of Opinion of the General Counsel of TRW
Appendix J - Form of Opinion of Counsel of Purchaser
Appendix K - List of TAPCO Agreements
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AGREEMENT OF PURCHASE AND SALE
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This AGREEMENT OF PURCHASE AND SALE (this "Agreement") is dated as of
August 5, 1986, and is between AGNEM HOLDINGS, INC. ("Purchaser"), a Delaware
corporation, and TRW INC. ("TRW"), an Ohio corporation.
Recitals
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A. Through the Power Accessories Division (the "Division") of TRW
Aircraft Components Group (the "Group"), TRW is engaged in the business (the
"Business") of designing, developing, manufacturing, assembling, selling, and
servicing aircraft engine fuel pumps, underwater propulsion systems, and
components for nuclear propulsion systems (the "'Products").
B. As part of a major program to restructure TRW, TRW has decided to
sell the Business.
C. Purchaser desires to purchase from TRW, and TRW desires to sell to
Purchaser, the Business on and subject to the terms and conditions contained in
this Agreement.
Terms And Conditions
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NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, and intending to be legally bound hereby, Purchaser and
TRW hereby agree as follows:
ARTICLE 1
General Provisions
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1.l DEFINITIONS: Appendix A to this Agreement sets forth the
definitions of certain terms used in this Agreement. Those terms shall have the
meanings set forth on Appendix A where used herein and identified with initial
capital letters.
1.2 OTHER DEFINITIONS AND MEANINGS; INTERPRETATION: For purposes of
this Agreement, the term "parties" means (except where the context otherwise
requires) Purchaser and TRW; the term "person" includes any natural person,
firm, association, partnership, corporation, government or political subdivision
thereof, governmental agency or other entity other than the parties; and the
words "hereof", "herein", "hereby" and other words of similar import refer to
this Agreement as a whole. The table of contents and the headings of the
Articles and Sections of this Agreement have been included herein for
convenience of reference only and shall not be deemed to affect the meaning of
the operative provisions of this Agreement. All dollar amounts referred to
herein are in United States Dollars.
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1.3 TRW'S KNOWLEDGE: Where a statement contained in this Agreement is
said to be to "TRW's knowledge" (or words of similar import) such expression
means that, after having conducted a due diligence review and in reliance on due
diligence certifications, both as described in Appendix B here to, the
management of TRW believes the statement to be true, accurate, and complete in
all material respects.
ARTICLE II
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Purchase And Sale
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2.1 TRANSACTION: On and subject to the terms and conditions of this
Agreement, and subject only to the Other Agreements, (a) at the Closing,
Purchaser will purchase from TRW, and TRW will sell, transfer, and assign to
Purchaser, or cause to be sold, transferred, and assigned to Purchaser, all of
the Acquired Assets; (b) at the Closing, Purchaser will assume and become
directly and solely responsible for the payment or discharge of all of the
Assumed Liabilities; and (c) Purchaser will pay to TRW (or its subsidiaries) the
Purchase Price as herein provided. Notwithstanding such transaction, TRW will
retain the Excluded Assets and the Excluded Liabilities.
2.2 ACQUIRED ASSETS: Subject only to the provisions of the Other
Agreements, for purposes hereof the term "Acquired Assets" means all assets,
properties, and rights held by TRW as of the Closing Time which relate primarily
to TRW's conduct of the Business, including all assets reflected on the balance
sheet of the Business as of the Closing Time, but excluding the Excluded Assets.
Without limiting the generality of the foregoing, the Acquired Assets will
include all of TRW'S rights, title, and interest in and to the following assets
(other than Excluded Assets) which are used by TRW primarily in its conduct of
the Business as of the Closing Time:
(a) All notes, accounts, and trade acceptances receivable;
(b) All prepaid and similar items, including, without
limitation, all prepaid expenses, deferred charges, advance payments,
and other prepaid items;
(c) All inventories, wherever located, including, without
limitation, inventories of raw materials, components, assemblies,
subassemblies, work-in-process, finished goods, replacement parts,
spare parts, operating supplies, and packaging;
(d) All real property (whether as owner, lessor, lessee, or
otherwise) including, without limitation, all land, buildings,
improvements, fixtures, and appurtenances thereto, and all such items
under construction;
(e) To the extent assignable, all personal property (whether
as owner, lessor, lessee, or otherwise), including, without limitation,
all machinery, equipment, tooling, dies, molds, jigs, patterns, gauges,
materials handling equipment, furniture, office equipment, cars,
trucks, and other vehicles;
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(f) To the extent assignable, all orders, contracts, and
commitments for the purchase of goods and/or services, including,
without limitation, all such items relating to the purchase of capital,
tooling, products, supplies, and services;
(g) To the extent assignable, all orders, contracts, and
commitments for the sale of the Products, including, without
limitation, all such items relating to distribution, dealership, and
similar arrangements;
(h) To the extent assignable, all other orders, contracts, and
commitments, including, without limitation, all leases, licenses,
causes of action, rights of action, and warranty and product liability
claims against other persons;
(i) To the extent assignable, all Intellectual Property
(whether as owner, inventor, employer of an inventor, licensor,
licensee or otherwise), including, without limitation, all patents,
trademarks, trade names, copyrights, trade secrets, technical
information, manufacturing processes and techniques, designs, drawings,
and other know-how;
(j) To the extent assignable, all permits, approvals,
qualifications, and the like and issued by any government or
governmental unit, agency, board, body, or instrumentality, whether
federal, state or local, and all applications therefor;
(k) Subject to the provisions of Section 7.4 hereof, all
nonprivileged business books and records which relate primarily to the
Business, including, without limitation, all nonprivileged financial,
operating, inventory, legal, personnel, payroll, and customer records
and all sales and promotional literature, correspondence, and files;
(l) Subject to the provisions of the Library Agreements, all
books, furniture, equipment, and other materials in the Group technical
library; and
(m) Subject to the provisions of the Equipment Sharing
Agreements, the electron spectrometer and related equipment at MMTC and
all other assets of MMTC identified in a written document signed or
initialed by the parties prior to the Closing.
2.3 EXCLUDED ASSETS: Subject only to the provisions of the Other
Agreements, for purposes hereof the term "Excluded Assets" means the following
rights, properties, and assets as the same shall exist as of the Closing Time:
(a) All cash and cash equivalent items held by TRW as of the
Closing Time, including, without limitation, certificates of deposit,
time deposits, marketable securities, and the proceeds of accounts
receivable paid on or prior to the Closing Time;
(b) All rights, properties, and assets of TRW used by TRW
primarily in a business other than the Business, including, without
limitation, (i) rights, properties, and assets of the Group used
primarily in businesses other than those conducted by the Division and
(ii) rights, properties, and assets of TRW used primarily in the
conduct of
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TRW's coal combustion project, PROVIDED that the Excluded Assets
described in this paragraph (b) shall not include the real property and
fixtures at the TAPCO Facility;
(c) All rights, properties, and assets of the Business which
shall have been transferred or disposed of by TRW prior to the Closing
Time in transactions conducted in the ordinary course of business and
not in breach of this Agreement;
(d) The name and trademark "TRW" and related trademarks,
corporate names, and trade names incorporating "TRW" or the stylized
"TRW" logo which is used by TRW as part of any trademark or trade name;
(e) All assets held by TRW, whether in trust or otherwise, in
respect of employee benefit plans pertaining to employees of the
Business, including, without limitation, such plans which are retained
by TRW pursuant to Article VIII hereof; and
(f) All assets, whether or not used by TRW primarily in its
conduct of the Business, which are identified on Annex A-7 to Part A of
the Disclosure Package.
2.4 ASSUMED LIABILITIES: Subject only to the provisions of the Other
Agreements, for purposes hereof the term "Assumed Liabilities" means all
liabilities and obligations of TRW as of the Closing Time arising primarily out
of TRW's conduct of the Business, including, without limitation, all liabilities
reflected on the balance sheet of the Business as of the Closing Time, but
excluding the Excluded Liabilities. Without limiting the generality of the
foregoing, the Assumed Liabilities will include the following liabilities and
obligations (other than Excluded Liabilities) which arise or have arisen
primarily out of TRW's conduct of the Business at or prior to the Closing Time
(including, without limitation, any claim, action, litigation, or proceeding,
whether or not pending at the Closing Time, relating thereto):
(a) All liabilities and obligations incurred by TRW in its
conduct of the Business which are accrued on the books of the Business
and all obligations which have been incurred in the ordinary course of
the Business and are due and payable after the Closing Time;
(b) All liabilities and obligations of TRW under orders,
contracts, and other commitments included in the Acquired Assets,
including, without limitation, all liabilities and obligations of TRW
under the TAPCO Agreements;
(c) All liabilities and obligations arising out of, resulting
from, or relating to claims which have not been resolved or settled
prior to the Closing Time seeking return, replacement, and/or repair of
Products pursuant either to express product warranties extended by TRW
prior to the Closing Time or product warranties or obligations implied
or provided by law;
(d) All liabilities and obligations arising out of, resulting
from, or relating to claims, whether founded upon negligence, breach of
warranty, strict liability in tort, and/or other similar legal theory,
seeking compensation or recovery for or relating to
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injury to person or damage to property occurring after the Closing
Time and arising out of (i) a defect or alleged defect of a Product
manufactured by TRW before the Closing Time or by Purchaser after the
Closing Time or (ii) the use of the Acquired Assets by Purchaser after
the Closing Time or the conduct of the Business by Purchaser after the
Closing Time;
(e) All liabilities and obligations arising out of, resulting
from, or relating to any violation of any statute, ordinance,
regulation, or other governmental requirement in connection with the
use and ownership of the Acquired Assets by Purchaser after the Closing
Time or the conduct of the Business by Purchaser after the Closing
Time;
(f) In the case of contracts (at any tier) with the United
States Government for which Purchaser provides the Certificate of Cost
and Pricing Data after the Closing Time, all liabilities and
obligations arising out of, resulting from, or relating to claims that
cost or pricing information provided by Purchaser after the Closing
Time to the United States Government or a higher-tier contractor or
subcontractor of the United States Government with respect to such
contract is or was defective;
(g) All liabilities and obligations arising out of, resulting
from, or relating to claims of infringement or other misappropriation
of the Intellectual Property rights of other persons with respect to
the use of the Acquired Assets by Purchaser after the Closing Time or
the conduct of the Business by Purchaser after the Closing Time;
(h) All Assumed Environmental Obligations;
(i) All Shared Environmental Obligations involving an
aggregate liability of Fifty Thousand Dollars ($50,000) or less;
(j) A fraction of the aggregate liability for Shared
Environmental Obligations (other than those described in Section 2.4(i)
hereof), the numerator of which fraction will be the period of time
after the Closing during which the Environmental Activity occurred
giving rise to the Shared Environmental Obligation and the denominator
of which fraction will be the total period of time before and after the
Closing during which the Environmental Activity occurred giving rise to
the Shared Environmental Obligation;
(k) All liabilities and obligations arising out of Purchaser's
obligations under Article VIII hereof; and
(l) All liabilities and obligations of MMTC reflected in the
Closing Date Net Book Value and all other obligations of MMTC
identified in a written document signed or initialed by the parties
prior to the Closing.
2.5 EXCLUDED LIABILITIES: Subject only to the provisions of the Other
Agreements, for the purposes hereof the term "Excluded Liabilities" means the
following liabilities and obligations (including, without limitation, any claim,
action, litigation, or proceeding, whether or not pending at the Closing Time,
relating thereto):
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(a) All liabilities and obligations incurred by TRW in
connection with the conduct of its businesses other than the Business;
(b) All liabilities and obligations of the Business which have
been fully discharged or satisfied by TRW prior to the Closing Time;
(c) All liabilities and obligations arising out of, resulting
from, or relating to claims which have been resolved or settled prior
to the Closing Time seeking return, replacement, and/or repair of
Products pursuant either to express product warranties extended by TRW
prior to the Closing Time or product warranties or obligations implied
or provided by law;
(d) All liabilities and obligations arising out of, resulting
from, or relating to claims, whether founded upon negligence, breach of
warranty, strict liability in tort, and/or other similar legal theory,
seeking compensation or recovery for or relating to injury to person or
damage to property occurring before the Closing Time and arising out of
(i) a defect or alleged defect of a Product manufactured by TRW before
the Closing Time or (ii) the use of the Acquired Assets by TRW before
the Closing Time or the conduct of the Business by TRW before the
Closing Time;
(e) All liabilities and obligations arising out of, resulting
from, or relating to any violation of any statute, ordinance,
regulation or other governmental requirement in connection with the use
and ownership of the Acquired Assets by TRW before the Closing Time or
conduct of the Business by TRW before the Closing Time;
(f) In the case of contracts (at any tier) with the United
States Government for which TRW provides the Certificate of Cost and
Pricing Data before the Closing Time, all liabilities and obligations
arising out of, resulting from, or relating to claims that cost or
pricing information provided by TRW before the Closing Time to the
United States Government or a higher-tier contractor or subcontractor
of the United States Government with respect to such contract is or was
defective;
(g) All liabilities and obligations arising out of, resulting
from or relating to a breach or default by TRW under any contract,
lease or agreement assigned to Purchaser hereunder, but only if and to
the extent that such breach or default is disclosed by TRW to Purchaser
in writing at or before the Closing Time, PROVIDED that nothing
contained in this Section 2.5(g) shall be deemed to modify TRW's
representations and warranties pursuant to Section 3.2 hereof;
(h) All liabilities and obligations arising out of, resulting
from, or relating to claims of infringement or other misappropriation
of the Intellectual Property rights of other persons with respect to
the use of the Acquired Assets by TRW before the Closing Time or the
conduct of the Business by TRW before the Closing Time;
(i) All liabilities and obligations arising out of TRW's
obligations under Article VIII hereof and, except as otherwise
expressly provided in said Article VIII, all
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liabilities and obligations arising out of, resulting from or
relating to claims, actions, litigation or proceedings, whether or not
pending as of the Closing Time, of employees or former employees of
TRW as a result of TRW's actions or omissions prior to the Closing
Time;
(j) All liabilities and obligations of TRW for income,
franchise and other "doing business" type taxes and all liabilities and
obligations of TRW for other taxes to the extent the same are not
reflected on the Closing Net Book Value;
(k) All Excluded Environmental Obligations;
(l) A fraction of the aggregate liability for Shared
Environmental Obligations (other than those described in Section 2.4(i)
hereof), the numerator of which fraction will be the period of time
before the Closing during which the Environmental Activity occurred
giving rise to the Shared Environmental Obligation and the denominator
of which will be the total period of time before and after the Closing
during which the Environmental Activity occurred giving rise to the
Shared Environmental Obligation;
(m) Liabilities and obligations, whether or not arising
primarily out of TRW's conduct of the Business, which are identified on
Annex A-8 to Part A of the Disclosure Package;
(n) All liabilities and obligations arising out of, resulting
from, or relating to claims, actions, litigation, or proceedings
pending or threatened against TRW as of the Closing Time; and
(o) All liabilities and obligations not otherwise provided for
in paragraphs (a) through (n) of this Section 2.5 which (i) are not
disclosed in the Disclosure Package or reflected or reserved against in
the Closing Net Book Value AND (ii) do not arise out of the use of the
Acquired Assets by Purchaser after the Closing or the conduct of the
Business by Purchaser after the Closing AND (iii) are in excess of
$1,000,000 per liability or obligation AND (iv) are identified and
fully described in a written notice from Purchaser to TRW on or before
5:00 p.m. (Eastern Time) on the date which is the first anniversary of
the Closing Date, BUT EXCEPTING any obligations incurred in the
ordinary course of the Business and not in violation of the terms of
this Agreement between the data hereof and the Closing Time.
2.6 PURCHASE PRICE: For purposes hereof, the term "Purchase Price"
means One Hundred and Forty Two Million Five Hundred Thousand Dollars
($142,500,000) PLUS OR MINUS the amount of the Adjustment.
2.7 ADJUSTMENT: The Adjustment will be determined as follows:
(a) CLOSING AUDIT: Promptly after the Closing, TRW will cause
Messrs. Ernst & Whinney (the "Auditors"), independent certified public
accountants, to conduct an audit of the Acquired Assets and the Assumed
Liabilities. Within sixty (60) days after
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the Closing or as soon thereafter as reasonably possible, the Auditors
will deliver to Purchaser and TRW a report (the "Auditors' Report")
based on the audit stating the aggregate book value of assets included
in the Acquired Assets and the aggregate book amount of liabilities
included in the Assumed Liabilities, as the same were (or should have
been) reflected on the books of TRW as of the Closing Time in
accordance with the accounting principles described in Section 2.7(c).
Purchaser, if it so elects, shall have the right to have its own
independent certified public accounts or internal auditors observe the
audit to be conducted by the Auditors and to inspect the work papers
generated by the Auditors resulting therefrom.
(b) REVIEW BY PURCHASER: Following receipt of the Auditors'
Report, Purchaser will be afforded a period of thirty (30) days to
review the Auditors' Report. At or before the end of that period,
Purchaser will either (i) accept the Auditors' Report in its entirety,
in which case the aggregate book value of assets included in the
Acquired Assets and the aggregate book amount of liabilities included
in the Assumed Liabilities will be deemed to be as set forth on the
Auditors' Report, or (ii) deliver to TRW and the Auditors written
notice and a detailed written explanation of those items in the
Auditors' Report which Purchaser disputes, in which case the aggregate
book value of the Acquired Assets and the aggregate book amount of the
Assumed Liabilities not affected by the disputed items will be deemed
to be as set forth on the Auditors' Report. Within a further period of
thirty (30) days from the end of the aforementioned review period, the
parties will attempt to resolve in good faith any disputed items.
Failing such resolution, the unresolved disputed items will be referred
for final binding resolution to another nationally-recognized firm of
certified public accountants mutually acceptable to TRW and Purchaser.
The aggregate book value of Acquired Assets and aggregate book amount
of Assumed Liabilities affected by such unresolved disputed items (if
any) will be deemed to be as determined by such firm in accordance with
the accounting principles described in Section 2.7(c) within thirty
(30) days of such reference.
(c) ACCOUNTING PRINCIPLES: The aggregate book value of the
Acquired Assets and the aggregate book amount of the Assumed
Liabilities will be determined in accordance with the standard
procedures and instructions set forth in TRW's Standard Practice
Instructions heretofore supplied to Purchaser and the supplemental
accounting principles described on Annex A-6 to Part A of the
Disclosure Package, which standard procedures and instructions and
supplemental accounting principles will be the same as those used to
determine the Base-Line Net Book Value. Only assets and liabilities
reflected on the balance sheet of the Business in accordance with such
principles will be taken into account for purposes of determining the
Closing Net Book Value. Notwithstanding the foregoing, (i) the Closing
Net Book Value will reflect an additional reserve for trade accounts
receivable in the amount of Five Hundred Thousand Dollars ($500,000)
(the "Supplemental Receivables Reserve") and (ii) the Closing Net Book
Value will be calculated in accordance with the provisions of Sections
4.11 and 8.10 hereof.
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(d) BASE-LINE NET BOOK VALUE: The Base-Line Net Book Value
will be an amount equal to Seventy-Two Million Three hundred
Ninety-One Thousand Dollars ($72,391,000).
(e) DETERMINATION OF CLOSING NET BOOK VALUE: The Closing Net
Book Value will be an amount equal to the aggregate book value of
assets included in the Acquired Assets MINUS the aggregate book amount
of liabilities included in the Assumed Liabilities as of the Closing
Time, both as determined under Section 2.7(b).
(f) AMOUNT OF ADJUSTMENT: If the Closing Net Book Value is
equal to the Base-Line Net Book Value, then the Adjustment will equal
zero. If the Closing Net Book Value is more than the Base-Line Net Book
Value, then the Adjustment will be a positive amount equal to the
amount by which the Closing Net Book Value is more than the Base- Line
Net Book Value. If the Closing Net Book Value is less than the
Base-Line Net Book Value, then the Adjustment will be a negative amount
equal to the amount by which the Closing Net Book Value is less than
the Base-Line Net Book Value. The Purchase Price will finally be
determined on the date the amount of the Adjustment is finally
determined.
2.8 PAYMENT OF PURCHASE PRICE: Purchaser will pay the Purchase Price as
follows:
(a) At the Closing, Purchaser will pay TRW One Hundred
Forty-Two Million Five Hundred Thousand Dollars ($142,500,000); and
(b) If the Adjustment is a positive amount, then Purchaser
will pay TRW the amount of the Adjustment within ten (10) business days
after the final determination of the Purchase Price pursuant to Section
2.7(f).
2.9 REFUND OF PURCHASE PRICE: If the Adjustment is a negative amount,
then TRW will refund to Purchaser the amount of the Adjustment within ten (10)
business days after the final determination of the Purchase Price pursuant to
Section 2.7(f).
2.10 METHOD OF PAYMENT: All payments hereunder shall be made by
delivery to the payee--
(a) upon the prior request of the payee, by depositing, by
bank wire transfer, the required amount (in immediately available
funds) in an account of the payee, which account shall be designated by
the payee for such purpose at least five (5) business days prior to the
date of the required payment; or
(b) in all other cases, of one or more bank cashiers checks
(in immediately available funds) drawn on a bank or banks acceptable to
the payee and payable to the order of the payee.
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ARTICLE III
Representations And Warranties
------------------------------
3.1 TRW'S GENERAL REPRESENTATIONS AND WARRANTIES: TRW hereby represents
and warrants to Purchaser the following:
(a) ORGANIZATION AND EXISTENCE: TRW is a corporation duly
organized, validly existing, and in good standing under the laws of the
State of Ohio.
(b) POWER AND AUTHORITY: TRW has full power and authority
under its Amended Articles of Incorporation and Regulations and the
laws of the State of Ohio to execute, deliver, and perform this
Agreement and each of the Other Agreements.
(c) AUTHORIZATION: The execution, delivery, and performance of
this Agreement and each of the Other Agreements by TRW has been duly
authorized by all requisite corporate action on the part of TRW.
(d) BINDING EFFECT: This Agreement is a valid, binding, and
legal obligation of TRW and, upon due execution and delivery by TRW and
Purchaser, each of the Other Agreements will be a valid, legal and
binding obligation of TRW.
(e) NO DEFAULT: Neither the execution and delivery of this
Agreement nor TRW's full performance of its obligations hereunder will
violate or breach, or otherwise constitute or give rise to a Default
under, the terms or provisions of TRW's Amended Articles of
Incorporation or Regulations or any order, arbitration award, judgment,
decree or other instrument, law, rule, or regulation to which TRW is a
party or by which the Acquired Assets are bound or any material
contract, commitment, or other obligation to which TRW is a party or by
which the Acquired Assets are bound.
(f) FINDERS: TRW has not engaged and is not directly or
indirectly obligated to anyone acting as a broker, finder, or in any
other similar capacity in connection with TRW's sale of the Business,
except ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and Salomon Brothers Inc.
(g) REPRESENTATIONS AND WARRANTIES TRUE AND COMPLETE: All
representations and warranties of TRW in this agreement are true,
accurate, and complete in all material respects as of the date hereof
and will be true, accurate, and complete in all material respects as of
the Closing (as if such representations and warranties were made anew
as of the Closing, except with respect to the effect of transactions
contemplated or permitted by this Agreement and except that any
statements made as of a specified date are made only as of that date).
3.2 TRW'S REPRESENTATIONS AND WARRANTIES CONCERNING THE DISCLOSURE
PACKAGE: Within sixteen (16) days after the execution and delivery of this
Agreement, TRW will deliver the PAD Disclosure Package (the "Disclosure
Package") to Purchaser with copies to ▇. ▇. ▇▇▇▇▇▇ & Co., LeBoeuf, Lamb, ▇▇▇▇▇ &
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ and Prudential Capital Markets Group. The
Disclosure Package will consist of sixteen (16) Parts, consecutively lettered
A-P,
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inclusive. TRW hereby represents and warrants to Purchaser that the Disclosure
Package will contain the information required by Appendix C hereto. In addition,
TRW hereby represents and warrants to Purchaser the following with respect to
the Disclosure Package:
(a) FINANCIAL STATEMENTS: The financial statements contained
in Part A are true and correct in all material respects and fairly
present, in accordance with TRW's Standard Practice Instructions
heretofore delivered to Purchaser and the supplemental accounting
principles described on Annex A-6 to Part A (applied on a consistent
basis except as described in any footnotes thereto) , the financial
position and results of operations of the Business as of the dates and
for the periods therein set forth, subject only to normal year-end
adjustments in the case of those statements which relate to interim
periods. The Base- Line Balance Sheet constitutes a pro forma
restatement of the Business Balance Sheet giving effect to the division
of assets and liabilities between TRW and Purchaser as contemplated in
Article II hereof and the supplemental accounting principles described
on Annex A-6 to Part A.
(b) INVESTMENTS: Except as otherwise disclosed on Part B and
subject to investments arising out of the temporary investment of short
term cash and of TRW employee benefit plans, TRW does not own or hold
any material equity interest, directly or indirectly, in any
corporation, partnership, joint venture, business, firm or other entity
which, to TRW'S knowledge, engages in competition with the Business and
TRW is a party to no commitment or agreement to acquire any such
interest.
(c) RECEIVABLES: Except as otherwise disclosed on Part C, (l)
TRW has Ownership of all notes receivable, accounts receivable, and
trade acceptances receivable listed on Annexes C-l, C-2, C-3, and C-4
to Part C; (2) none of such receivables are owing to the Business by
any subsidiary or affiliate of TRW; and (3) all of such trade
receivables (less the amount of any reserves therefor in excess of the
Supplemental Receivables Reserve) are good and collectible in the
ordinary course of business without setoff or counterclaim.
(d) INVENTORIES: Except as otherwise disclosed on Part D, (l)
TRW has Ownership of all inventories described on Part D; (2) except
for inventory reserves reflected on the balance sheet of the Business,
all such inventories, whether of raw materials, components, assemblies,
subassemblies, work-in-process, or finished goods, are of a quality
usable and salable in the ordinary course of business in accordance
with standard practices and procedures used by TRW in valuing
inventories; (3) all such inventories have been valued on the Business
Balance Sheet using the "last in-first out" method of accounting; and
(4) all such inventories have been restated on the Base-Line Balance
Sheet using the "first in-first out" method of accounting.
(e) REAL ESTATE: Except as otherwise disclosed on Part E, (l)
TRW has Ownership in fee simple to all of the real properties and
improvements thereon listed as "owned" on Annex E-l to Part E; (2) in
all material respects, TRW has the right under valid and subsisting
leases to occupy and control as a lessee (subject to the terms of such
leases and to the possible effect of the Bankruptcy Code in the event
of a lessor's
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bankruptcy or the effect of a condemnation or confiscation of the
leased premises) all of the real property listed as "leased" on Annex
E-2 to Part E; (3) all of the real estate improvements included in the
Acquired Assets are in reasonably good condition and repair, ordinary
wear and tear excepted, given the purpose for which the same are used
in the conduct of the Business; and (4) TRW is not in Default under
any such lease, which Default gives the lessor the right to terminate
the lease or is likely to have a material and adverse effect on the
usefulness of the leased property to the Business.
(f) PERSONAL PROPERTY: Except as otherwise disclosed on Part
F, (l) TRW has Ownership of all tangible personal property listed as
"owned" on Annexes ▇-▇, ▇-▇, and F-3 to Part F; (2) in all material
respects, TRW has the right under valid and subsisting leases to
possess and control as lessee all of the tangible personal property
listed as "leased" on Annexes ▇-▇, ▇-▇, and F-3 to Part F (subject to
the terms of such leases and to the possible effect of the Bankruptcy
Code in the event of a lessor's bankruptcy or the effect of a
condemnation or confiscation of the leased property); (3) all items of
personal property included in the Acquired Assets are in reasonably
good condition and repair, ordinary wear and tear excepted, given the
purposes for which the same are used in the conduct of the Business;
and (4) TRW is not in Default under any such leases, which Defaults are
in the aggregate likely to have a material and adverse effect on the
Business.
(g) LIABILITIES: Except as otherwise disclosed on Part G, TRW
is not in Default under any note, bond, debenture, mortgage, indenture,
security agreement, guaranty, or other instrument of indebtedness,
which Default is likely to have a material and adverse effect on the
Business.
(h) LITIGATION: Except as otherwise disclosed on Part H, (l)
there presently exists no litigation, proceedings, actions, claims, or
investigations at law or in equity pending or threatened which would,
in the aggregate, have a material and adverse effect on the Business;
and (2) TRW is subject to no notice, writ, injunction, order, or decree
of any court, agency, or other governmental authority which would
materially and adversely affect the Business.
(i) CONTRACTS: Except as otherwise disclosed on Part I , (l)
to TRW's knowledge, each of the contracts, commitments, and other
obligations listed on Part 1 is a valid and binding obligation of TRW
and the other party or parties thereto; (2) neither TRW nor, to TRW's
knowledge, any other party thereto has terminated, canceled, or
substantially modified any material contract, commitment, or other
obligation; (3) the other party or parties thereto have not advised TRW
of an intent to cancel or otherwise terminate any material contract,
commitment, or other obligation; and (4) neither TRW, nor, to TRW's
knowledge, any other party thereto is in Default under any contract,
commitment, or other obligation identified in Part I, which Default is
likely to have a material and adverse effect on the Business.
(j) INTELLECTUAL PROPERTY: Except as otherwise disclosed on
Part J, (l) TRW has Ownership of the Intellectual Property listed as
"owned" on Annexes ▇-▇, J-2, J-3, and J-4 to Part J; (2) TRW has the
right under valid and subsisting license, technology, or
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similar agreements referred to on Annex J-5 to Part J to employ the
intellectual Property listed as licensed on said Annex J-5 to Part J
in its conduct of the Business subject only to the terms of any such
agreements referred to in Annex J-5 to Part J; (3) TRW is not in
Default under any such agreement referred to in Annex J-5 to Part J,
which Default is likely to have a material and adverse effect on the
Business; (4) except as disclosed in Annex J-6, TRW has granted no
rights or interest to any person in connection with any of the
intellectual Property described in Annexes ▇-▇, J-2, J-3, and J-4 to
Part J; and (5) to TRW's knowledge, TRW is not obligated to pay any
amount, whether as a royalty, license, fee, or other payment to any
person in order to use any of the Intellectual Property used by TRW in
its conduct of the Business, which obligation or payment would
adversely and materially affect the Business.
(k) EMPLOYEE BENEFITS: Except as otherwise disclosed on Part
K, TRW has no pension, retirement, profit-sharing, employee stock
option or stock purchase, bonus, deferred compensation, incentive
compensation, life insurance, health insurance, disability insurance,
fringe benefit, or other material employee benefit plan relating and
applicable to the Business or its employees.
(l) PERMITS AND APPROVALS: Except as otherwise disclosed on
Part L, insofar as the Business is concerned, (l) TRW is not in Default
under any material permit, approval, or qualification listed on Annex
L-l to Part L, which Default is likely to have a material and adverse
effect on the Business; and (2) to TRW's knowledge, no other permit,
approval, or qualification of any government or governmental unit,
agency, board, body, or instrumentality, whether federal, state, or
local, is necessary, in a material and substantial sense, for the
conduct of the Business as the same has been and is being conducted.
(m) COMPLIANCE WITH LAWS: Except as otherwise disclosed on
Part M, to TRW's knowledge, TRW is in compliance with all laws,
ordinances, codes, restrictions, regulations, and other legal
requirements (including, without limitation, (i) laws, regulations and
other requirements imposed by action of, permits from, or agreement
with any governmental agency or authority relating to the generation,
management, handling, transportation, treatment, storage, disposal,
delivery, discharge, release or emission of any waste, pollutant or
toxic, hazardous or other substance or other action, omission or
condition affecting the environment, air and water pollution, ground
water contamination, the handling, storage or release into the
environment of hazardous materials or hazardous substances, or the
transportation of hazardous substances, or the transportation of
hazardous materials and (ii) regulations promulgated by the
Occupational Safety and Health Administration) applicable to TRW's
conduct of the Business the noncompliance with which would have a
material and adverse effect on the Business or the Acquired Assets.
(n) PAYMENT OF TAXES; TAX LIENS: Except as otherwise disclosed
in Part N, (1) all tax returns required to be filed by TRW with respect
to the Business (including the assets thereof) have been or will be
filed on or before the Closing Date; (2) all taxes indicated as due and
payable on such returns have been or will be paid when required by
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law; and (3) the Acquired Assets are not encumbered by any liens
arising out of unpaid taxes which are due and payable.
(o) NO MATERIAL EVENTS: Except as otherwise disclosed in Part
O, the Business has been conducted only in the ordinary and usual
course since December 31, 1985, and no Material Events have occurred
since December 31, 1985 and June 27, 1986.
(p) ADDITIONAL INFORMATION: Except as otherwise disclosed on
Part P, the factual information set forth in those written documents
furnished by TRW to Purchaser and its representatives from and after
April 10, 1986, (excluding, however, the information set forth in the
Offering Memorandum dated February, 1986, prepared by TRW and its
financial advisors and furnished by TRW or such advisors to Purchaser
or its representatives on or before April 10, 1986) which is identified
in a list of documents to be provided by Purchaser to TRW not later
than five (5) days after the date of this Agreement and which is
included in Part P was, as of the date stated thereon (or, if no such
date was stated thereon, then the date originally delivered to
Purchaser or its representatives) true, accurate, and complete in all
material respects.
(q) UNDISCLOSED LIABILITIES: Except as and to the extent
reflected or reserved against in the Closing Net Book Value or
disclosed in the Disclosure Package, and except for any obligations
incurred in the ordinary course of the Business and not in violation of
the terms of this Agreement between the date hereof and the Closing
Time, (i) there are no liabilities or obligations, whether accrued,
known or unknown, or contingent, including without limitation any
product, patent, trademark, criminal or civil liabilities, pertaining
to or affecting the Business or the Acquired Assets, and (ii) to TRW's
knowledge, there is no basis for the assertion of any such liabilities
or obligations against the Business or the Acquired Assets which would
have a material and adverse effect on the Business or the Acquired
Assets.
3.3 PURCHASER'S REPRESENTATIONS AND WARRANTIES: Purchaser hereby
represents and warrants to TRW the following:
(a) ORGANIZATION AND EXISTENCE: Purchaser is a corporation
duly organized, validly existing, and in good standing under the laws
of Delaware.
(b) POWER AND AUTHORITY: Purchaser has full corporate power
and authority under its Certificate of Incorporation and By-laws and
under the laws of Delaware to execute, deliver, and perform this
Agreement and each of the Other Agreements.
(c) AUTHORIZATION: The execution, delivery, and performance of
this Agreement and each of the Other Agreements have been duly
authorized by all requisite corporate actions on the part of Purchaser.
(d) BINDING EFFECT: This Agreement is a valid, binding, and
legal obligation of Purchaser and, upon due execution and delivery by
TRW and Purchaser, each of the Other Agreements will be a valid, legal
and binding obligation of Purchaser.
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(e) NO DEFAULT: Neither the execution and delivery of this
Agreement nor Purchasers's full performance of its obligations
hereunder will violate or breach, or otherwise constitute or give rise
to a Default under, the terms or provisions of Purchaser's Certificate
of Incorporation and By-laws or any order, arbitration award, judgment,
decree or other instrument, law, rule or regulation to which Purchaser
is a party or any material contract, commitment, or other obligation to
which Purchaser is a party.
(f) FINDERS: Purchaser has not engaged and is not directly or
indirectly obligated to anyone acting as a broker, finder, or in any
other similar capacity in connection with Purchaser's purchase of the
Business, except Corporate Growth Resources.
(g) PURCHASER'S FINANCING PLAN: Simultaneously with the
execution and delivery of this Agreement, Purchaser has delivered to
TRW a true, accurate, and complete copy of the plan ("Purchaser's
Financing Plan") by which Purchaser anticipates obtaining for Purchaser
sufficient funds to enable Purchaser to pay the Purchase Price as
herein contemplated and which identifies all representations,
warranties, indemnities, and agreements which Purchaser's lenders will
request or require of TRW before, at, or after the Closing as a
condition to providing Purchaser with all or part of such funds.
(h) REPRESENTATIONS AND WARRANTIES TRUE AND COMPLETE: All
representations and warranties of Purchaser in this Agreement are true,
accurate, and complete in all material respects as of the date hereof
and will be true, accurate, and complete in all material respects as of
the Closing (as if such representations and warranties were made anew
as of the Closing except with respect to the effect of the transactions
contemplated or permitted by this Agreement).
3.4 DISCLAIMER: Except as set forth in Article III of this Agreement,
neither party has made any further representation or warranty, either express or
implied, concerning the subject matter of this Agreement and neither party has
relied on any such further representation or warranty. This Agreement shall not
be governed by the warranties provided by Article 2 of the Uniform Commercial
Code as adopted in any jurisdiction.
3.5 SURVIVAL: The parties' respective covenants, representations, and
warranties contained in this Agreement will survive the execution and delivery
of this Agreement and the Closing. Neither party will, however, have any
liability to the other arising out of a breach of any representation, warranty,
or covenant contained in Article III of this Agreement, and any cause of action
based thereupon shall expire and terminate, unless the party claiming that such
breach occurred delivers to the other party written notice and a full
explanation of the alleged breach on or before 5:00 p.m. (Eastern Time) on the
date which is the first anniversary of the Closing Date.
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ARTICLE IV
Actions Before Closing
----------------------
4.1 ACCESS TO RECORDS: TRW hereby covenants to Purchaser that, between
the date hereof and the Closing and subject to the obligation of confidentiality
imposed by Section 11.2 hereof, TRW will afford duly authorized representatives
of Purchaser, displaying appropriate credentials and requisite security
clearances, free and full access during normal business hours to all of the
assets, properties, books, and nonprivileged records of the Business and will
permit such representatives to make abstracts from, or take copies of, such
books, records or other documentation, or to obtain temporary possession of any
thereof as may be reasonably required by Purchaser and TRW will furnish to
Purchaser such information concerning the Business and its assets, liabilities,
or condition as Purchaser may request.
4.2 INTERIM CONDUCT OF THE BUSINESS: TRW hereby covenants to Purchaser
that, from the date hereof to the Closing, TRW will conduct the Business only in
the ordinary and usual course, subject to Purchaser's approval of certain
transactions pursuant to Section 4.3 hereof below. Without limiting the
generality of the foregoing, TRW hereby covenants to Purchaser that, insofar as
the Business is concerned, TRW will use its best efforts to:
(a) preserve substantially intact the Business' relationships
with suppliers, customers, employees, creditors, and others having
business dealings with the Business;
(b) maintain in full force and effect its existing policies of
insurance which materially affect the Business;
(c) maintain all Intellectual Property to be included as part
of the Acquired Assets in substantially the same standing as exist on
the date hereof and continue the prosecution of all applications
therefor; and
(d) continue performance in the ordinary course of its
obligations under contracts, commitments, or other obligations to be
included as part of the Acquired Assets.
4.3 PURCHASER'S APPROVAL OF CERTAIN TRANSACTIONS: TRW hereby covenants
to Purchaser that, except as may otherwise be required under this Agreement,
from the date hereof to the Closing, insofar as the Business is concerned TRW
will not do any of the following without the prior approval with written
confirmation of Purchaser, which approval shall not be unreasonably withheld:
(a) incur or permit the incurrence of any debt for borrowed
money or incur any obligation or other liability which would constitute
an Assumed Liability, except in the ordinary course of business;
(b) purchase or dispose of any real property or real property
interest to be included as part of the Acquired Assets;
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(c) enter into any lease of real or personal property or any
renewals thereof involving a term of more than one (1) year or rental
obligation exceeding One Hundred Thousand Dollars ($100,000) per annum
in any single case;
(d) voluntarily permit to be incurred any Encumbrances on any
of the Acquired Assets except in the ordinary course of business;
(e) except for normal merit or cost-of-living increases in
accordance with TRW's past practices, increase the rate of compensation
for any of the employees of the Business or otherwise enter into or
alter any employment, consulting, or managerial services agreement
primarily affecting the Business;
(f) commence, enter into, or alter any pension, retirement,
profit-sharing, employee stock option or stock purchase, bonus,
deferred compensation, incentive compensation, life insurance, health
Insurance, disability insurance, severance pay, fringe benefit, or
other employee benefit plan or arrangement affecting employees of the
Business who are to become employees of Purchaser at the Closing
(except that this covenant shall not apply to any such plan or
arrangement generally applicable to all hourly or all salaried
employees of TRW);
(g) make any new commitments or increase any previous
commitments for capital expenditures in an aggregate amount exceeding
Five Hundred Thousand Dollars ($500,000);
(h) accelerate or delay the shipment or sale of Products
except as may be necessary in the ordinary course of business;
(i) enter into any transaction, contract or commitment outside
of the ordinary course of business, sell any of the assets (other than
inventory sold pursuant to contracts or commitments in effect on the
date hereof with third parties not affiliated with TRW) of the Business
for less than fair market value, waive any right of substantial value,
cancel any debt or claim except in the ordinary course of business or
voluntarily suffer any extraordinary loss; or
(j) sell, assign, transfer, license, or convey any of the
Intellectual Property to be included as part of the Acquired Assets.
4.4 NEGOTIATION OF OTHER AGREEMENTS: TRW hereby covenants to Purchaser,
and Purchaser hereby covenants to TRW, that between the date hereof and the
Closing the parties will negotiate in good faith such other and further
agreements as they may deem appropriate for the orderly transfer of the Business
from TRW to Purchaser. Without limiting the generality of the foregoing,
Purchaser and TRW will negotiate assets and liabilities to be included on
Appendix A-7 and Appendix A-8 of the Disclosure Package and the substantive
portions of the Other Agreements.
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4.5 CONSENTS TO ASSIGNMENT: TRW hereby covenants to Purchaser that,
between the date hereof and the Closing TRW will obtain the written consents or
approvals (or effective waivers thereof) of assignment of all open purchase
orders between TRW and the following customers of the Business: General Electric
Company; Honeywell Inc.; ▇▇▇▇▇▇▇▇▇ International, Inc.; ▇▇▇▇▇ & Whitney Aircraft
Group, United Technologies Corporation; Societe Nationale D'Etude et De
Construction De Moteurs D'Aviation (SNECMA); Westinghouse Electric Corporation;
General Dynamics Corporation; ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corporation; ▇▇▇▇▇▇▇ Gas Turbine
Division, General Motors Corporation; The Boeing Company; Rockwell
international; Lockheed Corporation; and Aviall, Inc. TRW further covenants to
Purchaser that, between the date hereof and the Closing, TRW will use its best
efforts to obtain the consents or approvals (or effective waivers thereof) of
all other persons whose consents or approvals are required for the assignment of
TRW's rights under other contracts, leases, licenses, permits, approvals, and
other similar items constituting part of the Acquired Assets. Failure of TRW to
obtain, after good faith attempt, the consents or approvals described in this
Section 4.5 shall not give rise to monetary damages against TRW.
4.6 NOVATION OF GOVERNMENT CONTRACTS: From the date hereof to the
Closing, the parties will cooperate and use their best efforts to obtain, as and
to the extent legally required, the novation of all government contracts and
subcontracts included as part of Acquired Assets.
4.7 GOVERNMENT APPROVALS: TRW hereby covenants to Purchaser, and
Purchaser hereby covenants to TRW, that from the date hereof to the Closing the
parties will use their best efforts to obtain any government approvals or
authorizations which are necessary to consummate the transactions contemplated
by this Agreement.
4.8 REVIEW OF DISCLOSURE PACKAGE; RIGHT TO REJECT: Purchaser hereby
covenants to TRW that Purchaser will use its good faith best efforts to review
the Disclosure Package promptly upon delivery of the Disclosure Package to
Purchaser by TRW. At any time during the twenty-eight (28) day period after TRW
delivers the Disclosure Package to Purchaser, Purchaser will have the right, if
it so elects and upon notice to TRW, to reject the Disclosure Package. If
Purchaser does not reject the Disclosure package within said period, Purchaser
will be deemed to have accepted the Disclosure Package.
4.9 PURCHASER'S FINANCING: Purchaser hereby covenants to TRW that
Purchaser will use its prompt good faith best efforts to implement Purchaser's
Financing Plan with a view toward enabling purchaser to pay the Purchase Price
as herein contemplated. Without limiting the generality of the foregoing,
Purchaser hereby covenants to TRW that --
(a) Purchaser will provide TRW on a current and updated basis
such reports as to Purchaser's progress toward implementing Purchaser's
Financing Plan as TRW may from time to time request;
(b) Purchaser will promptly notify TRW of any material changes
which hereafter occur with respect to Purchaser's Financing Plan; and
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(c) Purchaser will immediately notify TRW when and if
Purchaser has or develops any reason to believe that Purchaser's
Financing Plan cannot or will not be implemented or that Purchaser will
not or may not have sufficient funds to pay the Purchase Price as
herein contemplated.
4.10 LABOR RELATIONS: Purchaser hereby covenants to TRW that Purchaser
will use its prompt good faith best efforts to satisfy the conditions set forth
in Sections 5.1(h) and 5.2(g) hereof.
4.11 SPECIAL RECEIVABLES: TRW hereby covenants to Purchaser that (i)
TRW will use its prompt good faith best efforts to determine whether or not TRW
will ▇▇▇▇ the Special Receivables prior to the Closing and (ii) TRW will advise
Purchaser as promptly as reasonably possible prior to the Closing of TRW's
decision concerning the billing of the Special Receivables. In the event that
for any reason TRW does not ▇▇▇▇ all or any portion of the Special Receivables
prior to the Closing (such Special Receivables which are unbilled as of the
Closing being hereinafter referred to as the "unbilled Special Receivables"),
TRW and Purchaser will negotiate in good faith prior to the Closing to
effectuate an arrangement reasonably satisfactory to TRW and Purchaser pursuant
to which (i) TRW will identify in a written schedule all contracts which include
Unbilled Special Receivables and the amount of the Unbilled Special Receivables
under each such contract as of the most recent practicable date, (ii) the
accounting principles described in Section 2.7(c) hereof, which the parties have
agreed will be used to determine the Closing Net Book Value, will reflect an
additional reserve in the amount of the Unbilled Special Receivables as of the
Closing Time, (iii) Purchaser will agree that from and after the Closing,
Purchaser will cooperate with TRW in all reasonable respects in connection with
the billing and collection of the Unbilled Special Receivables in accordance
with procedures and at the time or times designated by TRW, (iv) TRW will agree
that it will not request that Purchaser ▇▇▇▇ any of the Unbilled Special
Receivables unless TRW has reached an understanding with the U.S. Government
with respect to the billing of such receivables, and (v) Purchaser will agree to
remit to TRW any and all amounts which it collects in respect of any Unbilled
Special Receivables not later than two (2) business days after its receipt of
such amounts.
ARTICLE V
Conditions
----------
5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS: The obligation of Purchaser
to consummate the transactions contemplated by this Agreement is subject to the
satisfaction of the following conditions at or before the Closing:
(a) The representations and warranties of TRW contained in
this Agreement shall be true, accurate, and complete in all material
respects as of the date hereof and as of the Closing (as if such
representations and warranties had been made anew as of the Closing,
except with respect to the effect of transactions contemplated or
permitted by this Agreement and except that any statements made as of a
specified date are made only as of that date);
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(b) TRW shall have performed and complied with all agreements
and conditions required by this Agreement to be performed or satisfied
by TRW, and TRW shall have delivered to Purchaser all documents,
certificates, and instruments required to be delivered by TRW under the
terms of this Agreement, including, without limitation, the documents
referred to on Appendix D hereto;
(c) All corporate and other proceedings or actions to be taken
by TRW in connection with the transactions contemplated by this
Agreement, and all documents incidental thereto, shall be satisfactory
in form and substance to Purchaser;
(d) TRW shall have obtained all of the consents and approvals,
or effective waivers thereof, which TRW is required to obtain under
Section 4.5 hereof;
(e) All requisite governmental approvals and authorizations
necessary for consummation of the transactions contemplated hereby
shall have been duly issued or granted;
(f) There shall not have been issued and in effect any
injunction or similar legal order prohibiting or restraining
consummation of any of the transactions herein contemplated and no
legal action or governmental investigation which might reasonably be
expected to result in any such injunction or order shall be pending;
(g) TRW and Purchaser shall each have executed and delivered
to the other the Other Agreements;
(h) Purchaser shall not have delivered to TRW, on or before
the date which is twenty one (21) days after the date on which both
parties shall have executed this Agreement, written notice to the
effect that, in Purchaser's best good faith judgment, labor relations
of the Business are unacceptable to Purchaser; and
(i) Purchaser shall not have delivered to TRW, on or before
the date which is seven (7) days following TRW's delivery of a copy of
any of the executed TAPCO Agreements to Purchaser, written notice to
the effect that, in Purchaser's best good faith judgment, such
agreement has been so revised from the draft of such agreement included
in Appendix K hereto as to constitute a material and adverse change in
such agreement.
5.2 CONDITIONS TO TRW'S OBLIGATIONS: The obligation of TRW to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction of the following conditions at or before the Closing:
(a) The representations and warranties of Purchaser contained
in this Agreement shall be true, accurate, and complete in all material
respects as of the date hereof and as of the Closing (as if such
representations and warranties have been made anew as of the Closing,
except with respect to the effect of transactions contemplated or
permitted by this Agreement);
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(b) Purchaser shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or
satisfied by Purchaser, and Purchaser shall have delivered all
documents, certificates, and instruments required to be
delivered by Purchaser under the terms of this Agreement, including,
without limitation, the documents referred to on Appendix E hereto;
(c) Purchaser shall have taken all corporate and other
proceedings to be taken by it in connection with the transactions
contemplated by this Agreement;
(d) All requisite governmental approvals and authorizations
necessary for consummation of the transactions contemplated hereby
shall have been duly issued or granted;
(e) There shall not have been issued and in effect any
injunction or similar legal order prohibiting or restraining
consummation of any of the transactions herein contemplated and no
legal action or governmental investigation which might reasonably be
expected to result in any such injunction or order shall be pending;
(f) TRW and Purchaser shall each have executed and delivered
to the other the Other Agreements; and
(g) Purchaser shall not have delivered to TRW on or before the
date which is twenty one days after the date on which both parties
shall have executed this Agreement, written notice to the effect that,
in Purchaser's best good faith judgment, labor relations of the
Business are unacceptable to Purchaser.
ARTICLE VI
Closing
-------
6.1 THE CLOSING: For purposes hereof, the term "Closing" means the time
at which the transactions contemplated hereby will be consummated after
satisfaction or waiver of the conditions set forth in Article V of this
Agreement.
6.2 TIME, DATE, AND PLACE OF CLOSING: The Closing will occur at 10:00
a.m. (Eastern Time) on Friday, September 5, 1986, or such other date as the
parties may agree in writing (the "Closing Date"). The Closing will take place
at the offices of TRW at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇, or at such
other place as the parties may agree in writing.
6.3 PURCHASER'S OBLIGATIONS: At the Closing, Purchaser will deliver to
TRW the following:
(a) the documents, certificates, and other items referred to
in Section 5.2(b) hereof;
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(b) the amount specified in Section 2.8(a) hereof; and
(c) an executed and notarized instrument satisfactory in form
and substance to TRW pursuant to which Purchaser assumes the Assumed
Liabilities as of the Closing.
6.4 TRW'S OBLIGATIONS: At the Closing, TRW will deliver to Purchaser
the following:
(a) the documents, certificates, and other items referred to
in Section 5.1(b) hereof;
(b) Ownership to the Acquired Assets as herein contemplated;
and
(c) executed and notarized deeds, bills of sale, and such
other instruments reasonably satisfactory in form and substance to
Purchaser pursuant to which TRW conveys the Acquired Assets to
Purchaser.
6.5 REAL ESTATE CONVEYANCE: TRW's conveyance of real estate owned by
TRW and included as part of the Acquired Assets will be carried out as follows:
(a) TITLE INSURANCE COMMITMENT: Prior to the Closing, TRW will
obtain a commitment from a nationally-recognized title insurance
company (the "Title Company"), with a copy to Purchaser, that the Title
Company will issue to Purchaser at the Closing an Owner's Policy of
Title Insurance (i) in an amount equal to or in excess of the fair
market value of the insured real estate (as determined by an appraisal
to be obtained by Purchaser from a nationally-recognized appraisal
company not later than ten (10) days prior to the Closing Date), (ii)
in form approved by the American Land Title Association and (iii) in
substance satisfactory to Purchaser, insuring fee simple title to such
real estate to be in Purchaser subject only to applicable zoning and
building laws and regulations, the lien of real estate taxes and
assessments not yet due and payable and such other Encumbrances as are
consented to by Purchaser (the "Exceptions") and the standard
reservations of the Title Company (excluding, however, unfiled
mechanics' and rnaterialmen's liens). TRW will use its best efforts to
obtain from the Title Company a commitment that such Owner's Policy of
Title Insurance will include an endorsement to the effect that the
current use of the real estate in the conduct of the Business complies
with applicable zoning requirements.
(b) WARRANTY DEEDS: No later than seven (7) days before the
Closing Date, TRW will execute and deliver to the Title Company for
safekeeping general or corporate warranty deeds conveying and
warranting title to such real estate to Purchaser, subject only to the
Exceptions, together with such affidavits, certificates, and other
instruments as are ordinarily delivered to a purchaser of real estate
or filed in the public records of the community where such real estate
is located.
(c) INSTRUCTIONS: At the time TRW delivers such warranty deeds
to the Title Company, TRW and Purchaser will deliver to the Title
Company a joint letter instructing the Title Company to hold such
warranty deeds until the Closing and, at the Closing,
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(i) if the Title Company is then prepared to issue to
Purchaser the Title Company's Owner's Policy of Title
Insurance in the form set forth in the commitment described in
Section 6.5(a), and upon joint telephonic instructions from
TRW and Purchaser, to file the warranty deeds for record in
appropriate public records, or
(ii) otherwise, to return such warranty deeds to TRW.
(d) CONFIRMATION: If the Title Company is instructed to file
the warranty deeds for record, then such warranty deeds will be deemed
to have been filed as of the close of business on the Closing Date.
6.6 LEASEHOLD INTERESTS IN REAL ESTATE: At the Closing, TRW will
deliver to Purchaser true and complete originals of all leases to which TRW is a
party in respect of real estate which is included as part of the Acquired
Assets. At the Closing, TRW will deliver to Purchaser an instrument or
instruments with respect to each such lease, reasonably satisfactory in form and
substance to Purchaser, pursuant to which (i) TRW assigns and conveys TRW's
leasehold interest to Purchaser and (ii) the lessor under such lease consents to
the assignment of such leasehold interest to Purchaser.
ARTICLE VII
Actions After Closing
---------------------
7.1 FURTHER CONVEYANCES: After the Closing, TRW will, without further
cost or expense to Purchaser, execute and deliver to Purchaser (or cause to be
executed and delivered to purchaser), such additional instruments of conveyance,
and TRW shall take such other and further actions as Purchaser may reasonably
request and which are ordinarily provided by a seller, more completely to sell,
transfer, and assign to Purchaser and vest in Purchaser Ownership to the
Acquired Assets.
7.2 FURTHER CONSENTS TO ASSIGNMENT: As and to the extent TRW shall have
failed to obtain prior to Closing the consent or approval (or an effective
waiver thereof) of any person or persons in respect of any item described in
Section 4.5 hereof or the parties shall have failed to obtain the novation of
any government contract or subcontract as provided in Section 4.6 hereof, after
the Closing--
(a) the parties will use their best efforts to obtain from
such person or persons the consents, approvals, or novations (or
effective waivers thereof); and
(b) if the parties are unable to obtain any such consent,
approval, novation, or waiver, then (l) this Agreement shall not
constitute or be deemed to be a contract to assign the same if an
attempted assignment without such consent, approval, novation, or
waiver would constitute a breach of such item or create in any party
thereto the right or power to cancel or terminate such item and (2) TRW
will cooperate with Purchaser in any
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reasonable arrangement designed to provide Purchaser with the benefit
of TRW's rights under such item, including enforcement (at Purchaser's
expense) of any and all rights of TRW against such person as Purchaser
may reasonably request.
In use of its best efforts under subsection (b) above, TRW
will not be obligated to pay any additional consideration in order to
obtain any consent, approval, novation, or waiver. TRW will cooperate
with Purchaser in obtaining a reasonable and economic solution with
such person PROVIDED that Purchaser pays or reimburses TRW for all
amounts necessary in order to obtain such consent, approval, novation,
or waiver.
7.3 RESALE OF INVENTORIES: Notwithstanding the provisions of Section
2.3(d) hereof, Purchaser will have the right to resell any and all of the
inventories and utilize any sales and Promotional materials constituting part of
the Acquired Assets. Within thirty (30) days after the Closing, however,
Purchaser will, to the extent practicable and acceptable to customers, institute
a procedure whereby a stamp or other indelible identifying ▇▇▇▇ is affixed to
Products finally inspected by Purchaser after the Closing in order to
distinguish such Products from Products finally inspected by TRW prior to the
Closing.
7.4 ACCESS TO FORMER BUSINESS RECORDS: For a period of ten (10) years
following the Closing, Purchaser will retain all business records constituting
part of the Acquired Assets. During such period, Purchaser will afford duly
authorized representatives of TRW displaying appropriate credentials and
requisite security clearances free and full access to all of such records and
will permit such representatives to make abstracts from or to take copies of any
of such records, or to obtain temporary possession of any thereof as may be
reasonably required by TRW. During such period, Purchaser will, without any
expense to TRW except as and to the extent otherwise provided in Section 7.5
hereof, cooperate with TRW, and cause employees of the Business to cooperate
with TRW, in furnishing information, evidence, testimony, and other assistance
in connection with any action, proceeding, or investigation relating to TRW's
conduct of the Business prior to the Closing. Without limiting the generality of
the foregoing, Purchaser will make available to TRW any such records TRW may
reasonably need in order to defend or prosecute any legal or administrative
action to which TRW is a party. If any such records are needed by TRW to respond
to legal process, then Purchaser will permit TRW to remove business records and
technical data temporarily from Purchaser's premises for purposes of responding
to such legal process.
7.5 ACCESS TO FORMER EMPLOYEES: After the Closing, Purchaser will make
available to TRW former employees of TRW employed by Purchaser whom TRW may
reasonably need in order to defend or prosecute any legal or administrative
action to which TRW is a party. TRW will pay or reimburse Purchaser for all
expenses which may be incurred by such employees in connection therewith,
including, without limitation, all travel, lodging, and meal expenses, and TRW
will compensate Purchaser for the number of whole business days spent by each
such employee in providing such services at the rate of one hundred thirty
percent (130%) of the average daily gross pay per business day (excluding the
value of employee benefits) of such employee during the calendar month in which
such services are performed.
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7.6 ACCESS TO BUSINESS RECORDS: For a period of six (6) years after the
Closing Date, TRW will retain all records in its possession on the Closing Date
which relate primarily to the Business. During such period, Purchaser will
afford duly authorized representatives of Purchaser displaying appropriate
credentials and requisite security clearances free and full access to all of
such records and will permit such representatives to make abstracts from or to
take copies of any of such records, or to obtain temporary possession of any
thereof as may be reasonably required by purchaser. During such period, TRW
will, without any expense to Purchaser except as and to the extent otherwise
provided in Section 7.7 hereof, cooperate with Purchaser, and cause its
employees to cooperate with Purchaser, in furnishing information, evidence,
testimony, and other assistance in connection with any action, proceeding, or
investigation relating to the conduct of the Business prior to the Closing.
Without limiting the generality of the foregoing, TRW will make available to
Purchaser any such records Purchaser may reasonably need in order to defend or
prosecute any legal or administrative action to which Purchaser is a party. If
any such records are needed by Purchaser to respond to legal process, then TRW
will permit Purchaser to remove business records and technical data temporarily
from TRW's premises for purposes of responding to such legal process.
7.7 ACCESS TO EMPLOYEES: After the Closing, TRW will make available to
Purchaser employees of TRW whom Purchaser may reasonably need in order to defend
or prosecute any legal or administrative action to which Purchaser is a party
and which relates to the conduct of the Business prior to the Closing. Purchaser
will pay or reimburse TRW for all expenses which may be incurred by such
employees in connection therewith, including, without limitation, all travel,
lodging, and meal expenses, and Purchaser will compensate TRW for the number of
whole business days spent by each such employee in providing such services at
the rate of one hundred thirty percent (130%) of the average daily gross pay per
business day (excluding the value of employee benefits) of such employee during
the calendar month in which such services are performed.
7.8 TRADE RECEIVABLES: After the Closing, Purchaser will use its best
good faith efforts to collect promptly all trade accounts receivable included in
the Acquired Assets. In addition, without TRW's express consent, Purchaser will
refrain from taking any action which would render uncollectible or compromise
any such receivables or settle any such receivables for less than full face
value. Subject to Purchaser's satisfaction of its obligations under this Section
7.8:
(a) In the event that any such receivables (less the amount of
any reserves therefor reflected in the Closing Net Book Value net of
the Supplemental Receivables Reserve) are not collected in full by
Purchaser within one hundred twenty (120) days after the Closing (the
"First Date"), TRW will pay to Purchaser on the Second Date (as
hereinafter defined) interest at the Prime Rate on the amount thereof
from time to time outstanding during the period commencing on the First
Date and continuing through and including the date on which such
receivables are collected in full (less the amount of any such reserves
net of the Supplemental Receivables Reserve) or the one hundred and
eightieth (180th) day after the Closing (the "Second Date"), whichever
shall first occur.
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(b) In the event that any such receivables are not collected
in full by Purchaser on or before the Second Date, TRW will repurchase
such receivables from Purchaser
promptly after the Second Date for an amount equal to the full amount
outstanding with respect to such receivables (less the amount of any
such reserves net of the Supplemental Receivables Reserve) on the
Second Date and Purchaser will transfer and assign such receivables to
TRW free and clear of any Encumbrance (except for any Encumbrance which
constituted an Encumbrance in respect of such receivables as of the
Closing Time).
7.9 ENVIRONMENTAL CLAIMS: After the Closing, each party will provide
the other with prompt written notice of any actual or threatened Environmental
Claim of which such party becomes aware and for which such other party will or
may have any responsibility hereunder. Neither party will take any action to
solicit, promote, or encourage the making of any Environmental Claim by any
person unless such action is, in the opinion of counsel to such party, legally
required or is necessary in order to eliminate, reduce, or minimize the
aggregate liability of the parties therefor.
7.10 ENVIRONMENTAL REMEDIATION: If, within two (2) years after the
Closing, Purchaser determines that the Business or any operation of the Business
or any condition of the Acquired Assets failed to comply with applicable
environmental laws or regulations as of the Closing (such alleged failure being
hereinafter called an "Environmental Condition") which requires remediation,
then Purchaser will promptly deliver to TRW written notice of such
determination, together with a detailed description of such Environmental
Condition and the basis for such determination.
Upon delivery of such notice to TRW, the following shall apply:
(a) Within sixty (60) days after delivery of such notice to
TRW, TRW will provide Purchaser with written notice of whether TRW
agrees, agrees in part, or disagrees with Purchaser's determination
that the Environmental Condition requires remediation. If TRW's notice
indicates that TRW agrees or agrees in part with Purchaser's
determination, then TRW will proceed with the preparation of an
Environmental Plan as provided in Section 7.10(b) hereof with respect
to remediation TRW agrees is required. If TRW's notice indicates that
TRW disagrees or disagrees in part that remediation is required, then
the disagreed portion of Purchaser's determination will be deemed to be
a "Questioned Environmental Condition" hereunder and will be resolved
as provided in Section 7.10(d) hereof.
(b) If TRW's notice indicates that TRW agrees or agrees in
part with Purchaser's determination, TRW will promptly and at TRW's
expense prepare and deliver to Purchaser a plan (an "Environmental
Plan") outlining the remedial actions TRW proposes to take to eliminate
or correct such Environmental Condition (other than that portion, if
any, of the Environmental Condition which is a Questioned Environmental
Condition), PROVIDED that such Environmental Plan will (i) constitute,
in TRW's best good faith judgment, a reasonably prudent and reasonably
cost effective method of eliminating or correcting such Environmental
Condition and (ii) be reasonably calculated to minimize the disruption
of Purchaser's operation of the Business and use of the Acquired
Assets.
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(c) Within sixty (60) days after TRW delivers an Environmental
Plan to Purchaser, Purchaser will provide TRW with written notice of
whether Purchaser agrees, agrees in part, or disagrees with such
Environmental Plan. If Purchaser's notice indicates that Purchaser
agrees or agrees in part with such Environmental Plan, then TRW will
proceed promptly with the agreed portions of such Environmental Plan.
If Purchaser's notice indicates that Purchaser disagrees or disagrees
in part with such Environmental Plan, then the disagreed portion of
such Environmental Plan shall be deemed to be a "Questioned
Environmental Remediation" hereunder and will be resolved as provided
in Section 7.10(d) hereof.
(d) With respect to any Questioned Environmental Condition or
any Questioned Environmental Remediation, the parties will resolve any
disagreement through use of a binding "mini-trial" tribunal; PROVIDED,
HOWEVER, that either party shall have the right to seek resolution in a
court of law if the parties cannot, after reasonable good faith
efforts, agree on the rules and procedures to be followed by such
mini-trial tribunal.
(e) In connection with TRW's preparation and implementation of
an Environmental Plan, (i) TRW will use its best good faith efforts to
prepare and implement the Environmental Plan expeditiously; (ii) TRW
will have the sole right and authority to implement the Environmental
Plan and such implementation will be at TRW's sole cost and expense;
(iii) the parties will cooperate in the implementation of such
Environmental Plan to minimize the cost thereof, maximize the
effectiveness thereof, and minimize the disruption of Purchaser's
conduct of Business or use of the Acquired Assets; (iv) Purchaser will
afford TRW and its authorized representatives full and free access to
the real properties, buildings, machinery, equipment, utilities, and
other assets of the Business as may reasonably be required to prepare
or implement the Environmental Plan; and (v) Purchaser will have the
right of reasonable concurrence with respect to the implementation of
any such Environmental Plan.
(f) Any remediation undertaken by TRW pursuant to this Section
7.10 shall be deemed to be an "Environmental Remediation" hereunder.
ARTICLE VIII
Employees and Employee Benefits
-------------------------------
8.1 EMPLOYMENT: Effective as of the Closing Time, each employee of the
Business (excepting only (i) any employees listed on Annex K-7 to Part K of the
Disclosure Package up to a maximum of five (5) such employees, PROVIDED that
such employees will not be members of the general management or manufacturing or
design engineering departments of the Business and that the retention of such
employees by TRW will not impair Purchaser's ability to conduct the Business (or
any material part of the Business) in the normal course after the Closing, (ii)
any employees of MMTC in excess of seventy-five (75) employees, such
seventy-five (75) employees to be designated in writing by Purchaser prior to
the Closing and reasonably
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satisfactory to TRW, and (iii) any employees of the Group's Central Human
Resources Division in excess of eighteen (18) employees, such eighteen (18)
employees to be designated in writing by Purchaser prior to the Closing and
reasonably satisfactory to TRW) will cease to be an employee of TRW and will
become an employee of Purchaser. TRW will neither employ nor offer employment to
any of such employee during the twelve (12) month period following the Closing
without the prior written consent of Purchaser. During such period, Purchaser
will not, without the prior written consent of TRW, employ or offer employment
to any former employee of the Business who retired from or voluntarily
terminated employment with TRW during the six (6) month period preceding the
Closing.
8.2 PENSION PLANS: TRW currently maintains the following pension plans
covering employees of the Business: the TRW Salaried Pension Plan (the "Salaried
Plan") covering salaried employees of TRW, including salaried employees of the
Business, and the TRW-AWA Retirement Plan (the "AWA Plan") covering hourly
employees of the Business. (For purposes hereof, the Salaried Plan and the AWA
Plan are referred to collectively as the "Pension Plans".) With respect to the
Pension Plans, the following shall apply:
(a) Purchaser will not become a sponsor of either of the
Pension Plans and no assets or liabilities of either such plan will be
transferred to or assumed by Purchaser or any plan or trust maintained
by Purchaser.
(b) Within sixty (60) days after the Closing, TRW will cause
the Pension Plans to be amended (as and to the extent necessary)
effective as of the Closing Time to provide that each employee of the
Business who is a participant in any of the Pension Plans and who
becomes an employee of Purchaser at the Closing Time (i) will be
entitled to payment of any and all benefits vested as of the Closing
Time under the Salaried Plan or the AWA Plan, as the case may be, when
such employee has terminated employment with Purchaser after the
Closing Time and (ii) will receive full credit for such employee's
service with Purchaser after the Closing Time for purposes of vesting
under the Salaried Plan or the AWA Plan, as the case may be.
(c) Within sixty (60) days after the Closing, Purchaser will
cause pension plans maintained by Purchaser to be amended (as and to
the extent necessary) effective as of the Closing Time to provide that
each employee of the Business who is a participant in the Salaried Plan
or the AWA Plan and who becomes an employee of Purchaser at the Closing
Time will receive full credit for such employee's service with TRW
prior to the Closing Time for purposes of participation (if Purchaser's
plan has an eligibility requirement) and vesting under the applicable
pension plan of Purchaser.
8.3 401(K) PLAN: TRW currently maintains The TRW Stock Savings Plan
(the "401(k) Plan") for its eligible employees, including eligible employees of
the Business. Purchaser will not become a sponsor of the 401(k) Plan and no
assets or liabilities of the 401(k) Plan will be transferred to or assumed by
Purchaser or any plan or trust maintained by Purchaser. Within sixty (60) days
after the Closing, TRW will cause the 401(k) Plan to be amended (as and to the
extent necessary) effective as of the Closing Time to provide that each employee
of the Business who becomes an employee of Purchaser at the Closing Time will be
entitled to receive
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amounts held in such employee's "pre-tax" accounts only when such employee's
employment with Purchaser is terminated, subject only to existing generally
applicable provisions of the 401(k) Plan as to withdrawal of "pre-tax" accounts.
8.4 MEDICAL BENEFITS: TRW will provide former employees of the Business
who have retired prior to the Closing Time with medical benefit coverage as
provided under TRW retiree medical benefit plans. As of the Closing Time,
Purchaser will provide employees of the Business who become employees of
Purchaser at the Closing Time with medical benefit coverage under medical
benefit plans comparable to the medical benefit plans for such employees
maintained by Purchaser immediately prior to the Closing Time. Each party
reserves the right to change its employee medical benefits plans in the future
when and as it deems appropriate.
8.5 LIFE INSURANCE: TRW will provide former employees of the Business
who have retired prior to the Closing Time with life insurance coverage under
TRW retiree life insurance benefit plans. As of the Closing Time, Purchaser will
provide employees of the Business who become employees of Purchaser at the
Closing Time with coverage under life insurance benefit plans comparable to the
life insurance benefit plans for such employees maintained by Purchaser
immediately prior to the Closing Time. Each party reserves the right to change
its employee life insurance plans in the future when and as it deems
appropriate.
8.6 ACCRUED VACATION: As of the Closing Time, Purchaser will assume all
obligations of TRW to employees of the Business who become employees of
Purchaser at the Closing Time for accrued vacation to the extent the same is
reflected in the Closing Net Book Value. TRW will have no obligation to make any
payment to employees after the date of the Closing Time with respect to any such
vacation pay entitlement.
8.7 WORKERS' COMPENSATION: TRW will bear the entire cost and expense of
all workers' compensation claims arising out of injuries identifiably sustained
by employees of the Business on or before the Closing Time. Purchaser will bear
the entire cost and expense of all workers' compensation claims arising out of
injuries identifiably sustained by employees of the Business after the Closing
Time. TRW will bear the entire cost and expense of all workers' compensation
claims arising out of injuries without an identifiable date of occurrence and
which are alleged to have arisen either before or before and after the Closing
Time which are filed within thirty (30) days after the Closing Date.
Notwithstanding the foregoing, TRW's liability for total workers' compensation
liability claims with respect to the Business at the TAPCO Facility shall not
exceed one hundred fifty percent (150%) of the average annual workers'
compensation premium allocated to the Business at such facility for the fiscal
year ended December 31, 1985, and Purchaser will bear all other costs and
expenses arising out of workers' compensation claims of employees of the
Business.
8.8 SEVERANCE PAYMENTS: TRW will bear the entire cost and expense of
severance payments payable to employees of the Business whose employment with
the Business is terminated by TRW before the Closing Time. Purchaser will bear
the entire cost and expense of severance payments payable to employees of the
Business whose employment with the Business is terminated by purchaser at or
after the Closing Time.
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8.9 UNEMPLOYMENT INSURANCE: The parties will use their mutual best
efforts before and after the Closing Time to cause the transfer of a pro rata
portion of TRW's unemployment insurance experience ratings to Purchaser in the
State of Ohio.
8.10 OTHER EMPLOYEE BENEFITS: Between the date hereof and the Closing,
the parties will negotiate in good faith their respective obligations to
employees of the Business under other employee benefit plans maintained by TRW
and by Purchaser; PROVIDED, HOWEVER, that (i) any and all obligations of TRW
under the Memorandum of Understanding will be the sole responsibility of TRW and
(ii) the accounting principles described in Section 2.7(c) hereof will reflect
the fact that any and all such obligations will be Excluded Liabilities for
purpose of determining the Closing Net Book Value, EXCEPT that notwithstanding
the foregoing provisions of this Section 8.10, Purchaser will be responsible for
any and all severance and related benefits payable to employees who are entitled
to severance payments pursuant to Article VII. B. of the Memorandum of
Understanding.
8.11 TERMINATION OR LAYOFF OF CERTAIN EMPLOYEES:
(a) In the event that the employment of any Support Employee
with Purchaser is involuntarily terminated, except for just cause,
during the Termination Period solely as a result of a Termination
Event, TRW will reimburse Purchaser, promptly upon notice from
Purchaser, for the entire cost and expense of severance payments made
by Purchaser to such employee under Purchaser's severance programs as
in effect on the date of termination; PROVIDED, HOWEVER, that the
aggregate amount which TRW shall be so obligated to reimburse Purchaser
in respect of each such employee shall not exceed the aggregate amount
of severance payments which would have been payable to such employee
had TRW's severance program as in effect on the Closing Date
immediately prior to the Closing continued in effect with respect to
such employee through the date of such employee's termination; and
PROVIDED FURTHER that TRW shall not have any obligation to any Support
Employee arising from the termination of employment of such employee or
any amounts payable to such employee in connection therewith.
(b) In the event that any Hourly Support Employee is laid off
during the Termination Period solely as a result of a Termination
Event, TRW will reimburse Purchaser, promptly upon notice from
Purchaser, for any and all costs and expenses which are incurred by
Purchaser as a result of such layoff and which would have been incurred
by TRW if such Hourly Support Employee had been laid off under the TRW
labor contract applicable to such employee as in effect on the Closing
Date; PROVIDED, HOWEVER, that TRW shall not have any obligation to any
Hourly Support Employee arising from the layoff of such employee or any
amounts payable to such employee in connection therewith.
(c) During the twelve (12) month period following the
termination of any Support Employee or Hourly Support Employee,
Purchaser will not, without the prior written consent of TRW, employ or
offer employment to such employee.
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ARTICLE IX
Indemnification
---------------
9.1 INDEMNIFICATION OF TRW: Purchaser will indemnify, defend, and hold
TRW harmless from and against any and all liabilities (regardless of legal
theory, including, without limitation, strict liability), damages, losses,
claims, costs (including, without limitation, the costs of cleanup and
corrective measures), and expenses (including attorneys' fees) arising out of or
resulting from (a) any misrepresentation or breach of warranty by Purchaser for
which notice is given by TRW within the period specified in Section 3.5 hereof;
(b) Purchaser's failure or alleged failure to pay or cause to be paid when due
and payable or to satisfy or cause to be satisfied any of the Assumed
Liabilities, including, without limitation, the Assumed Environmental
Obligations and Purchaser's share of the Shared Environmental Obligations and
any claim, action, litigation or proceeding in respect of any Assumed Liability;
(c) nonperformance of any covenant or other obligation, including, without
limitation, Purchaser's obligations with respect to Environmental Remediation,
to be performed on the part of Purchaser under this Agreement; and (d) the
termination of any Support Employee or the layoff of any Hourly Support Employee
as provided in Section 8.11 (excluding, however, any severance payments and any
costs and expenses of layoff for which TRW has agreed to reimburse Purchaser as
and to the extent provided in Section 8.11).
9.2 INDEMNIFICATION OF PURCHASER: Subject to the limitation set forth
in Section 9.4 hereof, TRW will indemnify, defend, and hold Purchaser harmless
from and against any and all liabilities (regardless of legal theory, including,
without limitation, strict liability), damages, losses, claims, costs
(including, without limitation, the costs of cleanup and corrective measures),
and expenses (including attorneys' fees) arising out of or resulting from (a)
any misrepresentation or breach of warranty by TRW for which notice is given by
Purchaser within the period specified in Section 3.5 hereof; (b) TRW's failure
or alleged failure fully to pay or cause to be paid when due and payable or to
satisfy or cause to be satisfied any of the Excluded Liabilities, including,
without limitation, the Excluded Environmental Obligations and TRW's share of
the Shared Environmental Obligations, and any claim, action, litigation or
proceeding in respect of any Excluded Liability; (c) nonperformance of any
covenant or other obligation, including, without limitation, TRW's obligations
with respect to Environmental Remediation, to be performed on the part of TRW
under this Agreement; and (d) debarment or suspension of the Business as a
contractor or subcontractor to the United States Government arising out of TRW's
conduct of the Business prior to the Closing.
9.3 CLAIMS: If either party desires to make a claim against the other
under Section 9.1 or 9.2 hereof which does not involve a claim by any person
other than the parties, then such party shall make such claim by promptly
delivering written notice to the other. If either Purchaser or TRW (the
"claimant") desires to make a claim against the other (the "indemnitor") under
Section 9.1 or 9.2 hereof which involves a claim by a person other than the
parties, then such claim will be made in the following manner and be subject to
the following terms and conditions:
(a) NOTICE: The claimant will give prompt notice to the
indemnitor of any demand, claim, or threat of litigation or the actual
institution of any action, suit, or
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proceeding (collectively, a "claim") at any time served on or
instituted against the claimant with respect to which the claimant
believes it would have a right of indemnification under Section 9.1 or
9.2 hereof. In providing such notice, the claimant shall only state the
existence of such claim and shall not admit or deny the validity of the
facts or circumstances out of which such claim arose. Solely for
purposes of determining whether the claimant is entitled to
indemnification under Section 9.1 or 9.2 hereof, the alleged facts or
circumstances on which such claim is based shall be deemed to be true.
(b) RESPONSIBILITY FOR DEFENSE: Within thirty (30) days after
receipt of any such notice, but not less than five (5) working days
prior to the time the claimant is required to respond to a claim, the
indemnitor will, by giving written notice to the claimant, have the
right to assume responsibility for the defense of the claim in the name
of the claimant or otherwise as the indemnitor may elect, PROVIDED that
the indemnitor also agrees that it would have responsibility to
indemnify the claimant with respect to such claim. Otherwise, the
claimant will have responsibility for the defense of the claim. Subject
to the provisions of subsections (c) and (d) below, the party having
responsibility for defense of a claim (the "defending party") will have
the full authority to defend, cure, adjust, compromise, or settle such
claim or appeal any judgment or ruling of a court or other tribunal in
connection with such claim in its own name and/or in the name of the
other party.
(c) RIGHT TO PARTICIPATE: Notwithstanding a defending party's
responsibility for the defense of a claim, the other party shall have
the right to participate, at its own expense and with its own counsel,
in the defense of a claim and the defending party will consult with the
other party from time to time on matters relating to the defense of
such claim. The defending party will provide the other party with
copies of all pleadings and material correspondence relating to such
claim.
(d) SETTLEMENT: A defending party will provide the other party
with timely written notice of any proposed adjustment, compromise, or
other settlement of a claim which the defending party intends to
propose or accept. If the other party fails to provide the defending
party with timely written notice of objection to such settlement, then
the defending party shall have the authority to propose or accept such
settlement and enter into any agreement, in its own name and/or in the
name of the other party, giving legal effect to such settlement. If the
other party objects to such settlement, then the defending party may,
if it so elects, tender the defense to the other party by paying to the
other the amount of money proposed to be paid in settlement of the
claim, in which case the defending party shall have no further
liability to the other party hereunder with respect to such claim and
the other party shall have full authority for the future defense of
such claim and full responsibility for any and all liabilities,
obligations, costs, and expenses resulting therefrom.
9.4 LIMITATION ON INDEMNIFICATION: Notwithstanding the provisions of
Section 9.2(a) hereof, TRW will not be obligated to indemnify, defend, or hold
Purchaser harmless from or against any liability, damage, loss, claim, cost, or
expense (including attorneys' fees) described in such Section 9.2(a) and not in
Sections 9.2 (b), (c) or (d) hereof unless a given claim exceeds
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One Hundred Fifty Thousand Dollars ($150,000). In no event will TRW's total
obligation to Purchaser under Section 9.2(a) hereof exceed, in the aggregate,
Thirty-Five Million Dollars ($35,000,000).
ARTICLE X
Amendment, Waiver, And Termination
----------------------------------
10.1 AMENDMENT: This Agreement may be amended at any time prior to the
Closing but only by written instrument executed by both of the parties hereto.
10.2 WAIVER: Either party may at any time waive compliance by the other
with any covenants or conditions contained in this Agreement but only by written
instrument executed by the party waiving such compliance. No such waiver,
however, shall be deemed to constitute the waiver of any such covenant or
condition in any other circumstance or the waiver of any other covenant or
condition.
10.3 TERMINATION: This Agreement may be terminated at any time prior to
the Closing, but only by written instrument signed by both parties. This
Agreement shall terminate automatically, and without further action by the
parties hereto, if (i) Purchaser rejects the Disclosure Package (as provided in
Section 4.8 hereof) or (ii) the Closing shall not have occurred by the date
which is forty-five (45) days after the date on which both parties shall have
executed this Agreement or such other date as the parties may agree in writing
as a result of negotiations conducted in good faith.
10.4 UNILATERAL RIGHT OF CANCELLATION: In addition to its rights under
Section 10.3 hereof, TRW will have the unilateral right to cancel this Agreement
by delivering written cancellation notice to Purchaser at any time prior to
Closing, if --
(a) TRW has or develops, whether as a result of a notice from
Purchaser pursuant to Section 4.9 hereof or otherwise, reasonable
grounds for believing that Purchaser will not or may not have available
at the Closing sufficient funds to pay the Purchase Price as herein
contemplated; and
(b) TRW delivers to Purchaser a written demand that Purchaser
provide TRW with written assurance of Purchaser's ability to pay the
Purchase Price as herein contemplated; and
(c) Purchaser fails to deliver to TRW, within five (5) days
after delivery of TRW's demand pursuant to Section 10.4(b) hereof,
written assurance, adequate to TRW in the exercise of TRW's reasonable
good faith discretion and taking into account Purchaser's Financing
Plan, of Purchaser's ability to pay the Purchase Price as herein
contemplated.
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Upon delivery of written cancellation notice as provided in this Section 10.4,
this Agreement will be deemed to be canceled as of the date of such notice
without prejudice to any rights or remedies TRW may have at law or in equity
against Purchaser for any misrepresentation or breach of warranty or covenant by
purchaser hereunder.
ARTICLE XI
Miscellaneous
-------------
11.1 COOPERATION: Each of Purchaser and TRW will cooperate with the
other party, at the other party's request and expense, in furnishing
information, testimony, and other assistance in connection with any actions,
proceedings, arrangements, and disputes with other persons or governmental
inquiries or investigations involving TRW's conduct of the Business or the
transactions contemplated hereby.
11.2 CONFIDENTIALITY: Reference is made to the Confidentiality
Agreement (the "Confidentiality Agreement") dated the date hereof and the
Supplemental Confidentiality Agreement (the "Supplemental Confidentiality
Agreement") dated the date hereof between TRW and Purchaser. TRW and Purchaser
agree to abide by the terms and conditions of the Confidentiality Agreement and
the Supplemental Confidentiality Agreement through the Closing. After the
Closing, TRW will hold the Confidential Information (as defined in the
Supplemental Confidentiality Agreement) in strictest confidence and will use
neither the Confidential Information nor other information concerning the
Business TRW may retain after the Closing for any purpose which might be
competitively disadvantageous to Purchaser or the Business. After the Closing,
both TRW and Purchaser will have the right jointly or severally to enforce any
other confidentiality agreements into which TRW may have entered with other
prospective purchasers of the Business.
11.3 SEVERABILITY: If any provision of this Agreement shall finally be
determined to be unlawful, then such provision shall be deemed to be severed
from this Agreement and every other provision of this Agreement shall remain in
full force and effect.
11.4 EXPENSES: Except as otherwise provided in this Section 11.4 and
Section 11.5, each party will bear its own expenses incurred in connection with
this Agreement and the transactions contemplated hereby, whether or not such
transactions shall be consummated. Each party will bear one-half (1/2) of the
Title Company's fee or premium in respect of the Owner's Policy of Title
Insurance described in Section 6.5. Purchaser will be solely responsible for the
cost of the appraisal described in Section 6.5. Purchaser will be solely
responsible for payment of any fees of Corporate Growth Resources resulting from
or arising out of the transactions contemplated hereby. TRW will be solely
responsible for payment of any fees of the Auditors, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated, and Salomon Brothers Inc resulting from or arising out of the
transactions contemplated hereby. TRW and Purchaser will each pay one-half of
any fees charged by the firm of certified public accountants referred to in the
final two sentences of Section 2.7(b) hereof.
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11.5 TRANSFER TAXES: TRW and Purchaser will bear equally any transfer
taxes, if any, which may result from the transfer of the Acquired Assets from
TRW to Purchaser, other than sales or use taxes, if any, which shall be the sole
responsibility of Purchaser.
11.6 BULK SALES: Purchaser waives compliance by TRW with the provisions
of any so- called bulk sales law of any state.
11.7 NOTICES: All notices, requests and other communications hereunder
shall be in writing and shall be deemed to have been duly given at the time of
receipt if delivered by hand or communicated by electronic transmission, or, if
mailed, three (3) days after mailing registered or certified mail, return
receipt requested, with postage prepaid:
If to Purchaser, to: Agnem Holdings, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and to: Agnem Holdings, Inc.
c/o ▇. ▇. ▇▇▇▇▇▇ & Co.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: W. ▇▇▇ ▇▇▇▇▇
with a copy to: LeBoeuf, Lamb, ▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to TRW, to: TRW Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telex: 980227/TRWCLEV EUCD
Attention: Secretary
PROVIDED, HOWEVER, that if either party shall have designated a different
address by notice to the other given as provided above, then to the last address
so designated.
11.8 ASSIGNMENT: This Agreement shall be binding upon and inure to the
benefit of the successors of each of the parties hereto, but shall not be
assignable by either party without the prior written consent of the other;
PROVIDED, HOWEVER, that Purchaser may assign all of its rights and delegate all
of its duties under this Agreement to a wholly-owned subsidiary of Purchaser and
may change its name to any other name selected by Purchaser; and PROVIDED
FURTHER that in
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the case of any such assignment, Purchaser delivers written notice of such
assignment to TRW no later than ten (10) business days before the Closing,
together with Purchaser's unconditional guarantee of its assignee's performance
of this Agreement in the form of Appendix H hereto.
11.9 NO THIRD PARTIES: This Agreement is not intended to, and shall
not, create any rights in or confer any benefits upon any person other than the
parties hereto.
11.10 INCORPORATION BY REFERENCE: The Appendices to this Agreement and
the Disclosure Package constitute integral parts of this Agreement and are
hereby incorporated into this Agreement by this Reference.
11.11 GOVERNING LAW: This Agreement will be governed by and construed
in accordance with the internal substantive laws of the State of Ohio, except
where the substantive laws of another jurisdiction mandatorily apply.
11.12 COUNTERPARTS: More than one counterpart of this Agreement may be
executed by the parties hereto, and each fully executed counterpart shall be
deemed an original without production of the others.
11.13 COMPLETE AGREEMENT: This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior letters of intent, agreements, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee, or representative of either party relating thereto, EXCEPT
that any confidentiality agreement in effect on the date hereof between TRW and
any officer, employee or representative of Purchaser shall continue in force and
effect through the Closing.
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IN WITNESS WHEREOF, AGNEM HOLDINGS, INC. and TRW INC. have each
caused this Agreement to be executed by their respective duly authorized
officers and have caused their respective corporate seals to be hereunto affixed
and attested, all as of the date first above written.
AGNEM HOLDINGS, INC.
(Corporate Seal) By: /s/ President
---------------------------------
Date: August 6, 1986
-------------------------------
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by his
Attorney-in-fact
---------------------------------
Vice President
Date: August 6, 1986
-------------------------------
Attest:
By: /s/ Assistant Secretary
--------------------------------
TRW INC.
(Corporate Seal) By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇
---------------------------------
Executive Vice President
Date: August 5, 1986
-------------------------------
Attest:
By: /s/ Assistant Secretary
-------------------------------
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Appendix A
----------
CERTAIN DEFINITIONS
-------------------
The following terms have the meanings set forth below where
used in the Agreement and identified with initial capital letters:
Acquired Assets As defined in Section 2.2 of the Agreement.
Adjustment As determined under Section 2.7 of the
Agreement.
Agreement As defined in the Preamble to the Agreement.
Assumed Environmental All liabilities and obligations for
Obligations Environmental Claims whenever made arising
out of, resulting from, or relating to
Environmental Activities conducted by
Purchaser in Purchaser's operation of the
TAPCO Facility or conduct of the Business or
use of the Acquired Assets which were not
conducted by TRW in TRW's operation of the
TAPCO Facility or conduct of the Business or
use of the Acquired Assets before the
Closing Time; all liabilities and
obligations for Environmental Claims made
twenty (20) years or more after the Closing
arising out of, resulting from, or relating
to Environmental Activities conducted both
by TRW in TRW's operation of the TAPCO
Facility or conduct of the Business or use
of the Acquired Assets before the Closing
Time and by Purchaser in Purchaser's
operation of the TAPCO Facility or conduct
of the Business or use of the Acquired
Assets after the Closing Time; and all of
Purchaser's obligations with respect to
Environmental Remediation set forth in
Section 7.10 of the Agreement.
Assumed Liabilities As defined in Section 2.4 of the Agreement.
Auditors As defined in Section 2.7(a) of the
Agreement.
Auditors' Report As defined in Section 2.7(a) of the
Agreement.
Base-Line Balance TRW's unaudited pro forma restated
Sheet balance sheet for the Sheet Business at
December 31, 1985, included as Annex A-2 to
Part A of the Disclosure Package.
Base-Line Net Book As defined in Section 2.7(d) of the
Value Agreement.
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Appendix A
----------
Bumped Employee Any hourly employee of the Business at the
TAPCO Facility who is laid off during the
Termination Period as a result of the
exercise of "bumping" or other contractual
rights by any other Hourly Support Employee,
but if and only if such other Hourly Support
Employee would have been laid off during the
Termination Period solely as a result of a
Termination Event but for the exercise of
such "bumping" or other contractual rights.
Business As defined in Recital A to the Agreement.
Business Balance TRW's unaudited consolidating balance sheet
Sheet for the Business at December 31, 1985,
included as Annex A-I to Part A of the
Disclosure Package.
Closing As defined in Section 6.1 of the Agreement.
Closing Date As defined in Section 6.2 of the Agreement.
Closing Net Book As defined in Section 2.7(e) of the
Value Agreement.
Closing Time 11:59 p.m. (Eastern Time) on the Closing
Date.
Default An occurrence which constitutes a breach or
default under a contract, order, or other
commitment, after the expiration of any
grace period provided without cure.
Disclosure As defined in Section 3.2 of the Agreement.
Package
Division As defined in Recital A to the Agreement
Encumbrance Any encumbrance or lien, including, without
limitation, any mortgage, judgment lien,
materialman's lien, mechanic's lien,
security interest, encroachment, easement,
or other restriction, in each case having a
material adverse effect on the thing or
right so encumbered.
Environmental Any action, omission, or maintenance of a
Activities condition adversely affecting the
environment arising out of the conduct of
the Business or the use of the Acquired
Assets or the operation of the TAPCO
Facility, including, without limitation,
generation, management, handling,
transportation, treatment, storage,
disposal, delivery, discharge, release, or
emission of any waste, pollutant, toxic, or
other hazardous substance.
2
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Appendix A
----------
Environmental Claim Any claim made or lawsuit filed or
threatened, and any investigation which
results in a claim made or lawsuit filed or
threatened, by a person other than the
parties with respect to Environmental
Activities.
Environmental As defined in Section 7.10 of the Agreement.
Condition
Environmental Plan As defined in Section 7.10(b) of the
Agreement
Environmental As described in Section 7.10(f) of the
Remediation Agreement.
Exceptions As defined in Section 6.5(a) of the
Agreement.
Excluded Assets As defined in Section 2.3 of the Agreement.
Excluded Environmental All liabilities and obligations for
Obligations Environmental Claims whenever made arising
out of, resulting from, or related to
Environmental Activities conducted by TRW in
TRW's operation of the TAPCO Facility or
conduct of the Business or use of the
Acquired Assets which are not conducted by
Purchaser in Purchaser's operation of the
TAPCO Facility or conduct of the Business or
use of the Acquired Assets after the Closing
Time; all liabilities and obligations for
Environmental Claims made within two (2)
years after the Closing arising out of,
resulting from, or relating to Environmental
Activities conducted both by TRW in TRW's
operation of the TAPCO Facility or conduct
of the Business or use of the Acquired
Assets before the Closing Time and by
Purchaser in Purchaser's operation of the
TAPCO Facility or conduct of the Business or
use of the Acquired Assets after the Closing
Time; and all of TRW's obligations with
respect to Environmental Remediation set
forth in Sections 7.10 of the Agreement.
Excluded Liabilities As defined in Section 2.5 of the Agreement.
First Date As defined in Section 7.8 of the Agreement.
40l(k) Plan As defined in Section 8.3 of the Agreement.
Group As defined in Recital A to the Agreement.
3
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Appendix A
----------
Hourly Support Any hourly employee of the Business as of
Employee the Closing who is engaged primarily in
activities in support of businesses at the
TAPCO Facility other than the Business and
whose job classification is one which is
designated in a written document signed or
initialed by Purchaser and TRW prior to the
Closing, and any hourly employee of the
Business hired by Purchaser after the
Closing to replace any such employee who
retires, is discharged for cause or
voluntarily terminates employment during the
Termination Period, and any Bumped Employee
in respect of such employee or replacement
employee, PROVIDED that the total number of
Hourly Support Employees shall not exceed
sixty-two (62).
Intellectual Rights consisting of, conferred by, or
Property otherwise relating to (i) patents and patent
applications (including all renewals,
extensions, or modifications thereof); (ii)
trade secrets, including without limitation,
know-how, inventions, computerized data and
information, computer programs, business
records, files and data, discoveries,
formulae, production outlines, product
designs, manufacturing information,
processes and techniques, testing and
quality control processes and techniques,
drawings and customer lists; (iii)
trademarks, service marks, and applications
therefor; (iv) copyrights; (v) trade names;
and (vi) other intellectual property.
IS Agreement An agreement to be dated the Closing Date
between Purchaser and TRW relating to
certain information systems services to be
provided by TRW to Purchaser from and after
the Closing.
Library Agreements One or more agreements to be
dated on or before the Closing Date between
Purchaser and TRW (or between TRW and the
owners of one or more of the other
businesses which have operations at the
TAPCO Facility) relating to the sharing of
materials maintained in the Group technical
library.
Material Event Any event, condition, circumstance, change,
or occurrence which has a material and
adverse effect on the Business or the
properties, assets, liabilities (fixed or
otherwise) or condition (financial or
otherwise) of the Business.
Memorandum of Memo of Understanding captioned "Severance
Understanding Policy for Non-Retained Employees Upon Sale
of TAPCO Facility" dated October 28, 1985
between TRW and the Aircraft Workers
Alliance Amalgamated, Inc.
4
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Appendix A
----------
MMTC The Group's Manufacturing and Material
Technology Center at the TAPCO Facility.
Other Agreements Collectively, the Shared Assets Agreement,
the Shared Liabilities Agreement, the
Transition Agreement, the IS Agreement, the
Shared Equipment Agreements, the Library
Agreements, and such other agreements as the
parties shall deem necessary or desirable to
effect the transactions contemplated by the
Agreement, all of which agreements shall be
reasonably satisfactory in form and
substance to TRW and Purchaser.
Ownership Such ownership as confers upon the person
having it good and marketable title to and
control over the thing or right owned, free
and clear of any and all Encumbrances except
Permitted Encumbrances.
Pension Plans As defined in Section 8.2 of the Agreement.
Permitted Encumbrances Encumbrances disclosed on Part
E of the Disclosure Package and the
Exceptions.
Prime Rate The rate of interest publicly announced
by National City Bank of Cleveland, Ohio,
from time to time as its prime or base rate
for U.S. Dollar loans.
Products As defined in Recital A to the Agreement.
Purchaser As defined in the Preamble to the Agreement.
Purchase Price As defined in Section 2.6 of the Agreement.
Purchaser's Financing As defined in Section 4.9 of the Agreement.
Plan
Questioned As described in Section 7.10(a) of the
Environmental Agreement.
Condition
Questioned As defined in Section 7.10(c) of the
Environmental Agreement.
Remediation
Salaried Plan As defined in Section 8.2 of the Agreement.
Second Date As defined in Section 7.8 of the Agreement.
5
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Appendix A
----------
Shared Assets An agreement to be dated the Closing Date
Agreement between Purchaser and TRW relating to the
sharing of certain assets, such agreement to
be in the form of Appendix F to the
Agreement.
Shared Equipment One or more agreements to be dated on or
Agreements before the Closing Date between Purchaser
and TRW (or between TRW and the owners of
one or more of the other businesses which
have operations at the TAPCO Facility)
relating to the sharing of certain equipment
used in the conduct of the Business (or the
activities of MMTC in support of the
Business) and in one or more other
businesses (or the activities of MMTC in
support of such other businesses).
Shared Environmental All liabilities and obligations for
Obligations Environmental Claims made two (2) years or
more after the Closing, but within twenty
(20) years after the Closing, arising out
of, resulting from, or relating to
Environmental Activities conducted both by
TRW in TRW's operation of the TAPCO Facility
or conduct of the Business or use of the
Acquired Assets before the Closing Time and
by Purchaser in Purchaser's operation of the
TAPCO Facility or conduct of the Business or
use of the Acquired Assets after the Closing
Time.
Shared Liabilities An agreement to be dated the Closing Date
Agreement between Purchaser and TRW relating to the
sharing of certain liabilities, such
agreement to be in the form of Appendix G to
the Agreement.
Special Receivables Receivables owing to TRW (estimated by TRW
on the date hereof to be in the amount of
approximately Five Million Dollars
($5,000,000)) in respect of certain
contracts between TRW and one or more
contractors or subcontractors of the U.S.
Government but which have not been billed as
of the date of the Agreement as a result of
or in connection with pending U.S.
Government investigations of certain cost
accounting irregularities at the Division.
Substitute Employee Any salaried employee of the Business who is
engaged primarily in activities in support
of business at the TAPCO Facility other than
the Business and who is designated by
Purchaser as a substitute for a Support
Employee as a result of Purchaser's good
faith determination upon the advice of
counsel that the layoff of the Support
Employee for whom such employee is
substituted would violate (or would create a
significant risk of violation of) any legal
obligation of Purchaser under applicable
equal employment opportunity or employment
discrimination law or regulation.
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49
Appendix A
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Supplemental As defined in Section 2.7(c) of the
Receivables Reserve Agreement.
Support Employee Any salaried employee of the Business as of
the Closing who is engaged primarily in
activities in support of businesses at the
TAPCO Facility other than the Business and
whose job classification is one which is
designated in a written document signed or
initialed by Purchaser and TRW prior to the
Closing, and any salaried employee of the
Business hired by Purchaser after the
Closing to replace any such employee who
retires, is discharged for cause or
voluntarily terminates employment during the
Termination Period, and any Substitute
Employee in respect of any such employee or
replacement employee, PROVIDED that the
total number of Support Employees
shall not exceed forty-nine (49).
TAPCO Agreements Collectively, the lease and
service agreements listed in Appendix K
hereto as such agreements shall be
negotiated and finalized by the parties
thereto on or before the Closing Date.
TAPCO Facility The facility on Euclid Avenue in
Cleveland, Ohio, owned by TRW and used by
the Group in the conduct of the Business and
other businesses.
Termination Event An event during the Termination Period which
reduces the number of Support Employees or
Hourly Support Employees reasonably required
by Purchaser in support of a business at the
TAPCO Facility other than the Business as a
result of (i) a decision by the owner of
such other business to discontinue, relocate
or downsize the operations of such other
businesses as conducted at the TAPCO
Facility or (ii) a decrease in the level of
services required from Purchaser by such
other businesses at the TAPCO Facility.
Termination Period The two (2) year period commencing at the
Closing Time and extending through and
including the second anniversary of the
Closing Date.
Title Company As defined in Section 6.5(a) of the
Agreement.
TRW As defined in the Preamble to the Agreement.
Transition Agreement An agreement to be dated the Closing Date
between Purchaser and TRW relating to
certain transitional matters.
Unbilled Special As defined in Section 4.11 of the Agreement.
Receivables
7