REORGANIZATION AGREEMENT
This Reorganization Agreement (this "Agreement") is effective as of
December 4, 1997 (the "Effective Date") by and between The Titan Corporation, a
Delaware corporation (hereinafter called "Titan"), and Linkabit Wireless, Inc.,
a Delaware corporation and wholly-owned subsidiary of Titan, formerly known as
Titan Information Systems Corporation (hereinafter called "LW").
WHEREAS, Titan and LW desire to restructure their current business
operations to combine the commercial and defense satellite communications
businesses.
WHEREAS, on September 30, 1997, the Board of Directors of Titan approved
the contribution to the capital of LW of all of the assets and liabilities of
the Linkabit Division of Titan and the contribution to the capital of LW of net
intercompany indebtedness of LW to Titan as of September 30, 1997.
WHEREAS, on September 30, 1997, the Board of Directors of LW (which was
then named Titan Information Systems Corporation) approved the transfer to Titan
of all of the assets of the Broadband Division, the Client/Server Division and
the Gamma Satcom Division of LW, subject to Titan's assumption of all of the
liabilities of such divisions, in exchange for the pay-off of certain
intercompany indebtedness.
WHEREAS, Titan hereby intends to effect the contribution to LW of all of
the assets of the Linkabit Division ("Linkabit Assets"), subject to the
assumption by LW of all of the liabilities of the Linkabit Division, in
accordance with Section 351 of the Internal Revenue Code of 1986, as amended
(the "Code"), and to effect the contribution to capital of certain net
intercompany indebtedness.
WHEREAS, LW hereby intends to effect the transfer to Titan of all of the
assets of the Broadband Division, the Client/Server Division and the Gamma
Satcom Division of LW to Titan, subject to the assumption by Titan of all of the
liabilities of such transferred divisions.
NOW, THEREFORE, for and in consideration of the mutual agreements set forth
herein, and subject to the terms and provisions set forth herein, the parties
hereto mutually agree as follows:
ARTICLE 1
THE TRANSACTION
1.1 CONTRIBUTION OF LINKABIT ASSETS. Pursuant to Section 351 of the Code,
Titan hereby assigns, transfers and conveys to LW, without recourse to Titan and
in "AS
1.
IS" condition without any representations and warranties of any kind, all of
Titan's right, title and interest in and to all of assets, claims, rights,
privileges and interests of any kind and nature of the Linkabit Division,
including, without limitation, the Linkabit Assets described on Exhibit A
attached hereto and incorporated herein to this Agreement by this reference
("Linkabit Assets"), but excluding the assets described on Exhibit A as excluded
assets, in exchange for 10,000,000 newly issued shares of Class B Common Stock
of LW.
1.2 CONTRIBUTION TO CAPITAL. Titan hereby contributes to the capital of
LW $32,617,000 through the pay-off of the principal and interest of net
intercompany indebtedness of LW accrued as of September 30, 1997; provided,
however, that in the event that the appraised values of the Broadband Assets (as
defined below) or the Client/Server Assets (as defined below), net of
liabilities, exceed the fair market value determined by LW and used to calculate
the transfer prices set forth in Sections 1.3 and 1.4 below, then the amount of
the contribution to capital shall be reduced by the amount of such excess and
the amount of net intercompany indebtedness used to purchase the Broadband
Assets and/or Client/Server Assets shall be increased by such amount.
Notwithstanding anything herein to the contrary, in no event shall the total net
intercompany indebtedness contributed to capital or paid off in exchange for the
Broadband Assets and the Client/Server Assets exceed $36,617,000.
1.3 TRANSFER OF BROADBAND ASSETS. LW hereby assigns, transfers, conveys
and sells to Titan, without recourse to LW and in AS IS condition without any
representations and warranties of any kind, all of LW's right, title and
interest in and to the assets, claims, rights, privileges and interests of any
kind and nature of the Broadband Division, including, without limitation, the
Broadband Assets as described on Exhibit B attached hereto and incorporated
herein to this Agreement by this reference ("Broadband Assets") in exchange for
the pay-off of $3,000,000 in principal and interest of intercompany indebtedness
of LW to Titan and the assumption by Titan of liabilities of the Broadband
Division; provided, however, that in the event that the appraised value of the
Broadband Assets, net of liabilities, exceeds $3,000,000 (which is the fair
market value as determined in good faith by Titan and LW), then the amount of
paid-off intercompany indebtedness shall increase by the amount of such excess.
1.4 TRANSFER OF CLIENT/SERVER ASSETS. LW hereby assigns, transfers,
conveys and sells to Titan, without recourse to LW and in AS IS condition
without any representations and warranties of any kind, all of LW's right, title
and interest in and to the assets, claims, rights, privileges and interests of
any kind and nature of the Client/Server Division, including, without
limitation, the Client/Server Assets as defined on Exhibit C attached hereto and
incorporated herein to this Agreement by this reference ("Client/Server
Assets"), in exchange for the pay-off of $1,000,000 in principal and interest of
intercompany indebtedness of LW to Titan and the assumption by Titan of
2.
liabilities of the Client/Server Division; provided, however, that in the event
that the appraised value of the Client/Server Assets, net of liabilities,
exceeds $1,000,000 (which is the fair market value as determined in good faith
by Titan and LW), then the amount of paid-off intercompany indebtedness shall
increase by the amount of such excess.
1.5 TRANSFER OF GAMMA SATCOM ASSETS. LW hereby assigns, transfers and
conveys to Titan, without recourse to LW and in AS IS condition without any
representations and warranties of any kind, all of LW's right, title and
interest in and to all of assets, claims, rights, privileges and interests of
any kind and nature of the Gamma Satcom Division, including, without limitation,
the Gamma Satcom Assets as defined on Exhibit D attached hereto and incorporated
herein to this Agreement by this reference ("Gamma Satcom Assets") in exchange
for the assumption by Titan of all liabilities of the Gamma Satcom Division.
1.6 TITAN'S ASSUMPTION OF LIABILITIES. Titan hereby assumes all of the
liabilities of the Broadband Division, the Client/Server Division and the Gamma
Satcom Division of LW ("Titan's Assumed Liabilities"), whether known or unknown,
contingent or noncontingent, including, without limitation, all accounts
payable, accrued compensation and employee claims, accrued warranties, any
judgments, arbitration awards or liabilities, including, without limitation,
judgments, awards or liabilities, arising under the NSN Network Services Ltd.
mediation settlement or otherwise and all contracts included in the Broadband
Assets, the Client/Server Assets and the Gamma Satcom Assets, including, without
limitation, those specific contracts of LW listed on Exhibit E attached hereto
(collectively, "Titan's Assumed Contracts").
1.7 LW'S ASSUMPTION OF LIABILITIES. LW hereby assumes all of the
liabilities of the Linkabit Division of Titan ("LW's Assumed Liabilities"),
whether known or unknown, contingent or noncontingent, including, without
limitation, all accounts payable, accrued compensation and employee claims,
accrued warranties, and all contracts included in the Linkabit Assets,
including, without limitation, those specific contracts of Titan listed on
Exhibit F attached hereto ("LW's Assumed Contracts").
1.8 THIRD PARTY CONSENTS AND NOVATIONS. Titan hereby covenants and agrees
to use its reasonable best efforts to obtain all third party consents and
government contract novations required to be obtained by Titan for the transfer
of the Linkabit Assets. If any third party consent or novation is denied as to
any contract included in the Linkabit Assets, then Titan shall compensate LW for
the value of any asset on the LW balance sheet as of September 30, 1997,
specifically arising from the contract that was not assigned or novated.
1.9 LW'S FURTHER DOCUMENTS. LW will execute, acknowledge, and deliver any
further deeds, assignments, conveyances, and other assurances, documents, and
3.
instruments of transfer, reasonably requested by Titan and will take any other
action consistent with the terms of this Agreement that may reasonably be
requested by Titan for the purpose of assigning, transferring, granting,
conveying, and confirming to Titan, or reducing to possession, any of the
Broadband Assets, Client/Server Assets and Gamma Satcom Assets and Titan's
Assumed Liabilities to be conveyed and Transferred by this Agreement.
1.10 TITAN'S FURTHER DOCUMENTS. Titan will execute, acknowledge, and
deliver any further deeds, assignments, conveyances, and other assurances,
documents, and instruments of transfer, reasonably requested by LW and will take
any other action consistent with the terms of this Agreement that may reasonably
be requested by LW for the purpose of assigning, transferring, granting,
conveying, and confirming to LW, or reducing to possession, any of the Linkabit
Assets and LW's Assumed Liabilities to be conveyed and Transferred by this
Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF LW. LW hereby represents and
warrants as follows:
(a) CORPORATE ORGANIZATION. LW is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and has all requisite power and authority to enter into this Agreement and
perform its obligations hereunder.
(b) AUTHORITY RELATIVE TO AGREEMENTS. The execution, delivery and
performance by LW of this Agreement, and the consummation by LW of the
transactions contemplated hereby, have been duly authorized and approved by all
necessary corporate proceedings of LW.
2.2 REPRESENTATIONS AND WARRANTIES OF TITAN. Titan hereby represents and
warrants as follows:
(a) CORPORATE ORGANIZATION. Titan is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and has all requisite power and authority to enter into this Agreement and
perform its obligations hereunder.
(b) AUTHORITY RELATIVE TO AGREEMENTS. The execution, delivery and
performance by Titan of this Agreement, and the consummation by Titan of the
4.
transactions contemplated hereby, have been duly authorized and approved by all
necessary corporate proceedings of Titan.
ARTICLE 3
INDEMNIFICATION
3.1 INDEMNIFICATION BY TITAN. Titan hereby agrees to indemnify, defend
and hold LW, its directors, officers and employees harmless from and against all
losses, damages (including, without limitation consequential damages),
judgments, penalties, awards, settlements, costs and expenses (including,
without limitation, court costs, witness fees and attorneys' fees and
disbursements) asserted against, imposed upon or incurred by LW directly or
indirectly, by reason of, arising out of or resulting from (i) Titan's Assumed
Liabilities, (ii) Titan's ownership or operation of the Broadband Assets,
Client/Server Assets or Gamma Satcom Assets or such businesses from and after
the date hereof or (iii) Titan's performance or failure to perform any of
Titan's Assumed Contracts.
3.2 INDEMNIFICATION BY LW. LW hereby agrees to indemnify, defend and hold
Titan, its directors, officers and employees harmless from and against all
losses, damages (including, without limitation consequential damages),
judgments, penalties, awards, settlements, costs and expenses (including,
without limitation, court costs, witness fees and attorneys' fees and
disbursements) asserted against, imposed upon or incurred by Titan directly or
indirectly, by reason of, arising out of or resulting from (i) LW's Assumed
Liabilities, (ii) LW's ownership or operation of the Linkabit Assets or business
from and after the date hereof or (iii) LW's performance or failure to perform
any of the LW's Assumed Contracts..
ARTICLE 4
GENERAL PROVISIONS
4.1 EFFECT OF HEADINGS; EXHIBITS. The subject headings of the sections of
this Agreement are included for purposes of convenience only, and shall not
affect the construction or interpretation of any of its provisions. All
exhibits and schedules to this Agreement are incorporated herein in their
entirety.
4.2 ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement constitutes
the entire agreement between the parties pertaining to the subject matter
contained in it, and, except for any other agreements specifically referenced
herein, supersedes all prior agreements, representations, and understandings of
the parties. No supplement, modification, or amendment of this Agreement shall
be binding unless executed in writing by all the parties. No waiver of any of
the provisions of this Agreement shall be
5.
deemed, or shall constitute, a waiver of any other provisions, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.
4.3 ASSIGNMENT. This Agreement shall be binding on and shall inure to the
benefit of the parties to it and their respective heirs, legal representatives,
successors, and assigns; provided, however, that neither party may assign any of
its rights under it, except with the written consent of the other party.
4.4 SEVERABILITY. Each term, covenant, condition or provision of this
Agreement shall be viewed as separate and distinct, and in the event that any
such term, covenant, condition or provision shall be held by a court of
competent jurisdiction to be invalid, the remaining provisions shall continue in
full force and effect.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it as
of the date set forth above.
THE TITAN CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇
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Print Name: ▇▇▇▇ ▇. ▇▇▇
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Title: President and CEO
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LINKABIT WIRELESS, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. Judge
------------------------------------
Print Name: ▇▇▇▇▇▇▇▇ ▇. Judge
----------------------------
Title: President and CEO
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EXHIBIT F
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