10.20 ASSET PURCHASE AND SALE AGREEMENT, DATED NOVEMBER 25, 1996 AMONG AMP
INCORPORATED, THE ▇▇▇▇▇▇▇▇ CORPORATION AND REGISTRANT
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ASSET PURCHASE AND SALE AGREEMENT
DATED AS OF
NOVEMBER 25, 1996
AMONG
AMP INCORPORATED,
THE ▇▇▇▇▇▇▇▇ CORPORATION
AND
▇▇▇▇▇▇▇ AIRCRAFT HOLDINGS, INC.
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ASSET PURCHASE AND SALE AGREEMENT
ACQUISITION OF ASSETS OF MANUFACTURING ACTIVITIES OF AMP INCORPORATED
COMMONLY REFERRED TO AS QUALITRONIX
BY
▇▇▇▇▇▇▇ AIRCRAFT HOLDINGS, INC.
This Asset Purchase and Sale Agreement ("Agreement") is made and entered
into by and among AMP Incorporated ("AMP"); The ▇▇▇▇▇▇▇▇ Corporation
("▇▇▇▇▇▇▇▇") only with respect to certain specific provisions of this
Agreement pertaining to proprietary rights and intellectual property; and
▇▇▇▇▇▇▇ Aircraft Holdings, Inc. ("DAH"), based on the following facts:
AMP is the owner of and desires to sell all of the assets as relate to
its cold heading and contact fabrication operations (the "Contact Products")
conducted at its facility located at ▇▇-▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇-▇▇▇▇ (the "Irvine Facility") and as necessary to build and manufacture
such Contact Products and operate the Irvine Facility as it is currently
being operated, all of which is commonly referred to as the QUALITRONIX
activities. (Hereinafter for purposes of convenience referred to as
"Qualitronix"). ▇▇▇▇▇▇▇▇ is the owner of certain proprietary rights and
intellectual property with respect to Qualitronix. Wherever the context shall
require, reference to Qualitronix shall mean "AMP with respect to the
manufacturing activities commonly identified as Qualitronix and the Assets to
be acquired pursuant to this Agreement", or its equivalent as appropriate).
Wherever the context requires a covenant, agreement or warranty and
representation is made or required by ▇▇▇▇▇▇▇▇, such shall also mean AMP
shall cause ▇▇▇▇▇▇▇▇ to perform such covenant or agreement and make such
warranty and representation, whether or not specifically stated.
DAH desires to purchase the assets, proprietary rights and intellectual
property of Qualitronix;
The parties desire to enter into certain supply contracts whereby (i)
AMP shall agree to purchase from DAH and DAH shall agree to sell to AMP all
of AMP's 1997 requirements for Contact Products to be used in kits and
internal assemblies for cylindrical connectors ("Cylindrical Supply
Contract") and (ii) AMP shall agree to purchase from DAH and DAH shall agree
to sell to AMP all of AMP'S 1997 and 1998 requirements for Contact Products
to be used for non-cylindrical connectors (which AMP either resells or uses
in its internal assembly as part of other products) (the "Non-Cylindrical
Supply Contract") according to the terms and conditions set forth therein,
(the "Cylindrical Supply Contract" and "Non-Cylindrical Supply Contract" may
sometimes collectively be referred to as the "Supply Contracts"). For the
purposes of provisions relating only to the Supply Contracts, AMP shall mean
the Aerospace Government Systems Sector of AMP.
Terms set forth herein with quotation marks " " are defined terms and
shall have the meaning set forth wherever located.
The term "Agreement" shall mean this Asset Purchase and Sale Agreement
and any schedules, exhibits or other documents, including the Supply
Contracts, referred to herein as being a part of the agreements among the
parties.
References herein to "financial statements", "balance sheet", "income
statement" or "books and records" shall mean and refer to one or more
schedules prepared by AMP, containing the
information specified, prepared to the extent reasonably possible, in such a
manner as if Qualitronix were a stand alone, separate entity for which
separate books, records and accounts were maintained in accordance with the
customary practices of AMP consistently applied.
The preamble, definitions and references hereinabove shall be deemed an
integral part of the Agreement.
Based on the foregoing preamble, facts and circumstances, the parties
hereby agree as follows
1. ASSETS TO BE PURCHASED AND SOLD.
1.1 THE QUALITRONIX ASSETS. On the Closing Date, subject to any exclusions
provided for in Section 1.3, AMP and ▇▇▇▇▇▇▇▇ shall transfer to DAH all of the
assets, properties, rights (contractual or otherwise) used in the activities of,
by or in connection with Qualitronix, wherever located, in each case whether in
the nature of real, personal, or mixed property and whether tangible or
intangible and known or unknown, whether or not set forth with particularity in
this Agreement (collectively, the "Assets"). Without limiting the generality of
the foregoing, the assets of Qualitronix to be transferred include:
1.1.1 REAL PROPERTY. Any and all real property (the "Real Property") which
shall relate solely to Qualitronix, including that listed on Schedule 1.1.1;
1.1.2 REAL PROPERTY LEASES. Any and all rights under leases of real
property and improvements (the "Real Property Leases"), relating to the Irvine
Facility and any others, all as listed on Schedule 1.1.2;
1.1.3 PERSONAL PROPERTY.
(a) All machinery and equipment (the "Machinery and Equipment"), including
that listed on Schedule 1.1.3(a);
(b) All tooling (the "Tooling"), including that listed on Schedule
1.1.3(b);
(c) All furnishings, fixtures, computers and related equipment and
furniture ("Furnishings & Fixtures"), including that listed on Schedule
1.1.3 (c);
(d) All rights under leases of equipment or other tangible personal
property ("Personal Property Leases"), including that listed on Schedule
1.1.3(d);
1.1.4 INVENTORY AND BACKLOG.
(a) All raw materials, supplies, component parts, work-in-process and
finished goods inventory, and other inventory (collectively the
"Inventory"), including that listed on Schedule 1.1.4(a);
(b) All backlogs of unfilled orders as of the date of this Agreement (the
"Backlog") as listed on Schedule 1.1.4(b) (the "Opening Backlog
Schedule"), which schedule shall set forth in detail; dates of orders,
quantity, price, customer information, shipping dates and such other
information as shall be deemed relevant to a determination of the
scope, extent and accuracy of the Backlog. Schedule 1.1.4(b) shall
also set forth the Backlog which AMP projects will exist at the
Closing (the "Projected Backlog").
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1.1.5 RESERVED.
1.1.6 PERMITS. All material licenses, permits, consents, authorizations,
approvals, certificates and franchises of any regulatory,
administrative or other agency or body, issued to or held by AMP
with respect to the Assets or the activities of Qualitronix
(collectively, the "Permits"), as listed in Schedule 1.1.6;
1.1.7 PROPRIETARY RIGHTS AND INTELLECTUAL PROPERTY
(a) All rights in patents, patent applications, inventions, invention
disclosures copyrights, mask sets, computer programs, trade secrets,
know-how, techniques, designs and other forms of intellectual property
identified in Schedule 1.1.7(a);
(b) All trademarks, names, service marks, trade names, marks, symbols and
logos owned by AMP or ▇▇▇▇▇▇▇▇ and used in connection with Qualitronix
which are not otherwise used in any other business or activity of AMP.
Without regard to any other use, the name "Qualitronix" or any
derivative thereof, shall be transferred without restriction, all as
shown in Schedule 1.1.7(b); (The interests set forth in Sections
1.1.7(a) and 1.1.7(b) shall collectively be referred to as the
"Proprietary Rights")
1.1.8 CONTRACTS.
(a) All rights under Material Contracts, (as defined and
described in Section 3.2.22) not otherwise described in this Section
1.1, to the extent assignable, as listed on Schedule 1.1.8(a);
(b) A separate list of those contracts which are Material
Contracts, but which are not assignable shall be set forth as
Schedule 1.1.8(b).
1.1.9 RESERVED.
1.1.10 RESERVED.
1.1.11 DEPOSITS AND PREPAID EXPENSES. All of the deposits and prepaid
expenses, other than tax refunds, of AMP as relates to the Assets (respectively,
the "Deposits" and the "Prepaid Expenses") as set forth in Schedule 1.1.11.
1.1.12 RESERVED.
1.1.13 RESERVED.
1.1.14 CUSTOMER LISTS. A complete listing of all customers and
distributors, setting forth the names and addresses, all as set forth on
Schedule 1.1.14.
1.1.15 BOOKS AND RECORDS. All books of account, files, papers and records
maintained by AMP with respect to Qualitronix;
1.1.16 TELEPHONE NUMBERS. All telephone, fax, e-mail and other numbers used
by Qualitronix, including those numbers listed on Schedule 1.1.16;
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1.2 NON-ASSIGNMENT OF ASSETS. To the extent that any asset described in
Section 1.1 may not be assigned to DAH, or may only be assigned to DAH with
the consent of a third party (collectively "Non-assignable Assets"), then
NOTWITHSTANDING anything to the contrary in this Agreement, neither this
Agreement nor any action taken shall constitute an assignment or an agreement
to assign; PROVIDED, HOWEVER, that in such case the parties shall act in
accordance with the provisions of Section 1.4 below. A complete list of such
Non-assignable Assets shall, be set forth in Schedule 1.2.
1.3 EXCLUDED ASSETS.
1.3.1 Notwithstanding Section 1.1, the assets (if any) listed on
Schedules 1.3 and 1.1.8(b) shall be excluded from the "Assets" for all purposes.
1.3.2 Such exclusions shall include that portion of the management
information systems utilized by AMP in connection with the activities of
Qualitronix, which reside on the management information systems of AMP (the "AMP
System") and which cannot be segregated without impairing the integrity of the
data or systems of AMP or disclosing to DAH confidential or proprietary
information of AMP which is not applicable to Qualitronix or the Assets.
However, any data which is currently recorded or stored on the AMP System,
applicable to the activities of Qualitronix and which is capable of being
segregated, shall be included in the Books and Records set forth in Schedule
1.1.15.
1.3.3 Such exclusions shall include the "routers" used in connection
with the local area network server.
1.3.4 Such exclusions shall include the plating lines located at the
facility in Ontario, California.
1.4 THIRD PARTY CONSENTS
1.4.1 AMP shall use all reasonable efforts to obtain the consents to
the assignment of the Material Contracts and Permits, which consents shall be
referred to as the "Material Consents". AMP shall not agree to make any
unreasonable financial accommodations to obtain such Material Consents.
1.4.2 In the event that any Permit which is to be assigned to DAH is
not assignable, and DAH needs such permit in order to operate the business of
Qualitronix, AMP and DAH shall use their best efforts and make every good
further attempt to obtain such Permit.
1.4.3 Promptly following the execution and delivery of this
Agreement, DAH and AMP shall cooperate with each other in obtaining consents to
the sale of the Assets, and the consummation of the other transactions
contemplated by this Agreement. The forms of consent shall be mutually
acceptable to AMP and DAH.
1.4.4 Notwithstanding any provision to the contrary contained herein,
AMP shall not be obligated to assign to DAH any contract, license, purchase
order, sales order, lease, claim or right or any benefit therefrom, or other
instrument which provides that it may not be assigned without the consent of the
other party thereto and for which such consent is not obtained, other than
Material Consents, or which is subject to a preferential right held by the other
party, but in any such event, AMP shall cooperate with DAH in all reasonable
respects for a period of one (1) year from the Closing Date in any reasonable
arrangement designed to provide the benefits thereof to DAH.
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2. PAYMENT OF PURCHASE PRICE ASSUMPTION OF CERTAIN LIABILITIES: CLOSING.
2.1 THE PURCHASE PRICE In consideration for the transfer and assignment by
AMP of the Assets, the entry into the Supply Contracts and in consideration of
the representations, warranties and covenants of AMP and ▇▇▇▇▇▇▇▇ herein, DAH
agrees to pay at the Closing:
2.1.1 An amount equal to the lesser of (i) Six million five hundred
thousand dollars ($6,500,000) or (ii) the sum of:
(a) The net book value of the tangible fixed assets as
currently used to build the Contact Products located at the Irvine Facility
or at any other location, such as at the facility of a Distributor, and as
necessary and currently utilized to operate said facility, including the
leasehold improvements as of September 30, 1996, all as set forth in Schedule
2.1.1(a) (the "Tangible Fixed Assets") multiplied by a factor of 1.5 (the
"Tangible Asset Purchase Price") and
(b) The value of the Inventory as determined in accordance
with the provisions of Section 2.5 as of October 31, 1996, (the "Initial
Inventory Value"), but excluding the value of any excess (meaning any
inventory exceeding the usage in the past 12 months) or obsolete inventory
(meaning any inventory with zero usage in the past 12 months) (collectively
"Excess and Obsolete Inventory") as of the Inventory Date, multiplied by a
factor of 1.5 (the "Initial Inventory Purchase Price") For the purposes of
the determination of Excess and Obsolete Inventory, AMP shall set forth on
Schedule 2.1.1(b) the quantity, total value, and Excess and Obsolete value by
part number and the activity by part number. The activity for such
calculations will be as defined in AMP Inventory Valuation Policy 09.04.02,
revised 04/94. Upon receipt and review by DAH of the calculations used by AMP
to determine the Excess and Obsolete Inventory, DAH will determine whether an
adjustment can be made, taking into consideration DAH's then existing
requirements for inventory classified as excess or obsolete. To the extent
that DAH determines that its usage history indicates that it can use any
portion of the Excess and Obsolete Inventory, DAH shall notify AMP that it
may exclude such portion from the Excess and Obsolete Inventory calculation.
Upon inquiry by AMP, DAH shall provide to AMP its data supporting its
determinations pursuant to this paragraph.
(c) less any obligations for accrual items or other prorations
as provided for in Sections 2.6.2 and 3.2.2, which shall be subtracted from
the Purchase Price if not previously discharged by AMP. If any such item is
or would be included in the Inventory or Tangible Fixed Assets as to which
the Tangible Asset Purchase Price or Inventory Purchase Price has been
determined, then such reduction shall be multiplied by a factor of 1.5.
2.1.2 RESERVED.
2.1.3 There shall be withheld from the Purchase Price payable at the
Closing an amount equal to ten percent (10%) of the Initial Inventory Value (the
"Holdback Amount"), subject to the provisions of Section 2.5.2.
2.1.4 The Purchase Price shall be decreased by an amount equal to
three percent (3%) of the total value of contact inventory held by Distributors
on November 15, 1996.
2.2 THE CLOSING The closing of the purchase and sale of the Assets by AMP
and ▇▇▇▇▇▇▇▇ to DAH (the "Closing") shall take place at 11:00 AM, local time on
December 13, 1996, but not later than December 27, 1997, or such other time
and/or place as the parties hereto shall agree upon in writing (the "Closing
Date"). The time set forth for Closing shall be extended as set forth in Section
5.2.9. The parties
Page 5
need not be physically present in the same location in order to accomplish
the Closing. The exchange of signed documents by facsimile transmission shall
be deemed to be the exchange of the original signed documents, provided that
the actual original documents are exchanged by appropriate means within three
business days following the Closing.
2.3 RESERVED
2.4 RESERVED
2.5 INVENTORIES AND POST CLOSING ADJUSTMENT
2.5.1 For the purpose of determining the amount to be paid pursuant
to Section 2.1.1(b) hereof (the "Initial Inventory Purchase Price), the value
of the inventory (the "Initial Inventory Value") shall be determined from the
Inventory schedule to be provided by AMP based upon its books and records
maintained for Qualitronix as of October 31, 1996 (the "Initial Inventory
Date") utilizing costs at the lower of "standard cost" or market value.
2.5.2 Within three (3) days following the Closing (the "Final
Inventory Date"), the parties shall make a joint physical count and
determination of the value of the Inventories for the purpose of determining
the actual amount payable with respect to the Inventory pursuant to Section
2.1 (the "Final Inventory Value"). The Final Inventory Purchase Price shall
be the amount determined by multiplying the Final Inventory Value by a factor
of 1.5. In the event the Final Inventory Purchase Price shall be greater than
the Initial Inventory Purchase Price, DAH shall within 10 days from such
determination pay to AMP such differential and the Holdback Amount. In no
event shall the amount so paid result in a total Purchase Price exceeding
$6,500,000.
2.5.3 In the event that the Final Inventory Purchase Price shall be
less than the Initial Inventory Purchase Price, but such differential is less
the Holdback Amount, then DAH shall, within 10 days from such determination
pay to AMP such portion of the Holdback Amount remaining.
2.5.4 In the event that the Final Inventory Purchase Price shall be
less than the Initial Inventory Purchase Price by an amount exceeding the
Holdback Amount, then AMP shall, within ten days from such determination pay
to DAH such differential.
2.5.5 In the event of a dispute between the parties pertaining to
any aspect of the determination of the Final Inventory Value or Final
Inventory Purchase Price, such dispute shall be resolved by submission to and
determination by a mutually agreed upon "Big Six" or "National" accounting
firm with the costs of such determination borne equally by the parties.
2.6 ASSUMPTION OF CERTAIN LIABILITIES: NO ASSUMPTION OF OTHER LIABILITIES
On the Closing Date, DAH will assume
2.6.1 RESERVED.
2.6.2 ACCRUED EMPLOYEE EXPENSES. All accrued employee expenses in
the ordinary course which are (i) reflected as a liability as set forth on
the books and records of Qualitronix and shown on Schedule 2.6.2, (the
"October 31, 1996 Schedule of Liabilities") or (ii) if incurred after October
31, 1996, are (x) completely and accurately reflected in all material
respects on the schedules required by Section 3.2.21 and to be delivered to
DAH on the Closing Date and (y) are of the kind expressly permitted by the
affirmative covenants, and not prohibited by the negative covenants, set
forth in Section 4 hereof.
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2.6.3 REAL PROPERTY LEASES: PERSONAL PROPERTY LEASES. The
obligations of Qualitronix or AMP arising under the Real Property Leases
listed on Schedule 1.1.2 and the Personal Property Leases listed on Schedule
1.1.3(c).
2.6.4 DISTRIBUTOR RETURNS OBLIGATIONS The obligation to accept any
return of Contact Products from any Distributor, pursuant to any return
provisions, including contractual Distributor inventory adjustments with
respect to Distributor inventory of Contact Products as of the Closing Date,
except for returns made for a period of three (3) months from the Closing
Date pursuant to termination provisions in such Distributor Agreements, as to
which AMP shall reimburse DAH an amount equal to the credit required to be
given to the Distributor pursuant to the termination provisions of such
Distributor Agreement. In the event that DAH shall notify AMP within such
three month period that it has received any form of indication from a
Distributor that it intends to terminate its Distributor Agreement, such
three month period shall be extended for an additional three (3) months,
provided that DAH demonstrates it is making a good faith effort to continue
the trial period with the Distributor.
2.6.5 RESERVED
2.6.6 ROYALTIES AND LICENSE FEES. The royalties and license fees
owing by Qualitronix, but ONLY TO the extent specified in Schedule 2.6.6.
2.6.7 CONTRACT OBLIGATIONS: Liabilities and obligations under any
unfilled purchase order, sales order, lease, agreement or commitment of any
kind by which AMP is bound on the Closing Date and which are assigned to DAH
pursuant to this Agreement, and which were entered into in the ordinary
course or are set forth in Schedule 1.1.8;
2.6.8 PERMIT OBLIGATIONS: Liabilities and obligations under permits,
registrations,licenses, governmental approvals, orders and directives which
are assigned to DAH pursuant to this Agreement and which were obtained or
entered into in the ordinary course or are set forth on Schedule 1.1.6;
2.6.9 PRODUCT LIABILITIES Product liabilities of every kind and
nature, relating to products constituting finished goods inventory of
Qualitronix as of the Closing Date.
2.7 LIABILITIES NOT ASSUMED.
2.7.1 With the exception of the liabilities assumed pursuant to
Section 2.6, DAH shall not by the execution or performance of this Agreement,
or otherwise, assume or otherwise be responsible for any liability or other
obligation of Qualitronix or AMP of any kind, nature or description, whether
such liability or obligation is mature or not, liquidated or unliquidated,
fixed or contingent, known or unknown, whether arising out of occurrences
prior to, at or after the date of this Agreement, including those rising from
breach of contract, breach of any warranty, except as specifically set forth,
infringement, fraud, violation of any law, rule or regulation, or out of any
charge, complaint, action, suit, proceeding, hearing, investigation, claim or
other demand.
2.7.2 AMP shall be solely responsible for warranty claims made with
respect to Contact Products shipped on or prior to the Closing Date and DAH
shall be solely responsible for warranty claims made with respect to Contact
Products shipped by Qualitronix subsequent to the Closing Date
2.7.3. Without limiting the foregoing, DAH shall not assume any
other obligations of Qualitronix or AMP except to the extent set forth in
Schedule 2.7.3 and reflected as a reduction to the Purchase Price.
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3. REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES BY DAH. DAH hereby represents and
warrants to AMP that, except as set forth on Schedule 3.1, the
representations and warranties of DAH contained in this Agreement, including
those contained in this Section 3.1, are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date.
DAH hereby represents and warrants to AMP the following:
3.1.1 ORGANIZATION. DAH is a corporation duly organized, validly
existing and in good standing under the laws of the State of Ohio, and has
all requisite corporate power and authority to own, lease and operate its
properties and conduct its businesses as now being conducted. DAH is duly
qualified, or will be duly qualified prior to the Closing Date, to do
business and is in good standing in each jurisdiction in which the nature of
its business or of its properties makes such qualification necessary
3.1.2 RESERVED.
3.1.3 AUTHORIZATION. DAH has all requisite corporate power and
authority to enter into this Agreement and the Supply Contracts, perform its
obligations hereunder and thereunder and consummate the transactions
contemplated hereby and thereby. All necessary corporate action has been
taken by DAH with respect to the execution and delivery of this Agreement,
and the Supply Contracts, and this Agreement and the Supply Contracts
constitute valid and binding obligations of DAH, enforceable against DAH, in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and moratorium laws and
other laws of general application affecting the enforcement of creditors'
rights generally.
3.1.4 LITIGATION. There is no claim, litigation, action, suit,
proceeding, investigation or inquiry, administrative or judicial, pending or,
to the knowledge of DAH, threatened against DAH, at law or in equity, before
any federal, state or local court or regulatory agency, or other governmental
authority, which might have an adverse effect on their ability to perform any
of their obligations under this agreement or upon the consummation of the
transactions contemplated by this Agreement.
3.1.5 BROKERS. FINDERS. Except as disclosed in Schedule 3.1.5, the
transactions contemplated herein were not submitted to DAH by any broker or
other person entitled to a commission or finder's fee thereon, and were not
with the consent of DAH submitted to DAH by any such broker or other person.
Neither DAH nor any of its officers, directors or employees has engaged any
broker or finder or incurred or taken any action which may give rise to any
liability against itself or the Assets for any brokerage fees, commissions,
finders fees or similar fees or expenses and no broker or finder has acted
directly or indirectly for DAH in connection with this Agreement or the
transactions contemplated hereby. No investment banking, financial advisory
or similar fees have been incurred or are or will be payable by DAH in
connection with this Agreement or the transactions contemplated hereby. DAH
shall be solely responsible for the fees so incurred.
3.1.6 NO CONFLICT OR DEFAULT Except as pertains to the requirement
of DAH to obtain the approval of its senior and subordinated lender as set
forth in Section 5.2.9, neither the execution and delivery of this Agreement,
nor compliance with the terms and provisions hereof, including the
consummation of the transactions contemplated hereby and thereby, will (a)
violate in any material respect any statute, regulation or ordinance of any
governmental authority, or (b) conflict with or result in the breach of any
term, condition or provision of the articles of incorporation or bylaws of
DAH or of any agreement, deed, contract, mortgage, indenture, writ, order,
decree, legal obligation or instrument to which DAH is a
Page 8
party or by which DAH maybe bound, or (c) constitute a material default (or an
event which with the lapse of time or the giving of notice, or both, would
constitute a material default) thereunder.
3.2 REPRESENTATION AND WARRANTIES BY AMP. AMP hereby represents and
warrants to DAH that, except as set forth on Schedule 3.2, the
representations and warranties of AMP contained in this Agreement, including
those contained in this Section 3.2, are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date. As
used in this Section 3.2,(i)unless stated to the contrary, all
representations and warranties which are made to the "Knowledge of AMP" or
similar terms, relate only to Qualitronix, its activities, assets and
liabilities; (ii) except with respect to Environmental Matters as set forth
in Section 3.2.16, all representations and warranties relate only to the
period from the time that AMP acquired Qualitronix to the date of this
Agreement when Qualitronix, its activities, assets and liabilities were owned
by AMP and (iii) when reference is made to Qualitronix as if it were a legal
entity, the representation is meant to be with respect to the activities of
AMP, as to which the term "Qualitronix" has been applied merely for
convenience, as if Qualitronix were a separate legal entity, although the
parties specifically agree and understand that Qualitronix is not such a
separate legal entity, nor is it a specific defined line of business on a
stand alone basis. AMP hereby represents and warrants to DAH the following:
3.2.1 CORPORATE ORGANIZATION.
(a) AMP is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Pennsylvania, and has
all requisite corporate power and authority to own, lease and operate its
properties and conduct its business as now being conducted. AMP is duly
qualified to do business and in good standing in each jurisdiction wherein
the activities of Qualitronix would require such qualification as listed on
Schedule 3.2.1. Except as set forth on Schedule 3.2.1, AMP has not received
any written notice or assertion within the last three years from any
governmental official of any jurisdiction to the effect that AMP, solely as
it pertains to the activities conducted as Qualitronix, is required to be
qualified or otherwise authorized to do business therein, in which AMP has
not qualified or obtained such authorization.
(b) ▇▇▇▇▇▇▇▇ is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has all
requisite corporate power and authority to own, lease and operate its
properties and conduct its business as now being conducted. ▇▇▇▇▇▇▇▇ is duly
qualified to do business and in good standing in each jurisdiction wherein
the activities of ▇▇▇▇▇▇▇▇ would require such qualification as listed on
Schedule 3.2.1. Except as set forth on Schedule 3.2.1, ▇▇▇▇▇▇▇▇ has not
received any written notice or assertion within the last three years from any
governmental official of any jurisdiction to the effect that ▇▇▇▇▇▇▇▇ is
required to be qualified or otherwise authorized to do business therein, in
which ▇▇▇▇▇▇▇▇ has not qualified or obtained such authorization.
3.22 RESERVED.
3.23 AUTHORIZATION OF AMP . AMP or ▇▇▇▇▇▇▇▇, as the case may be, has
full corporate power and authority to enter into this Agreement, and the
Supply Contracts to which it is a party, perform its obligations hereunder
and thereunder and consummate the transactions contemplated hereby and
thereby. All necessary and appropriate corporate action has been taken by AMP
and ▇▇▇▇▇▇▇▇, as the case may be, with respect to the execution and delivery
of this Agreement, and the Supply Contracts to which it, is a party. This
Agreement constitutes, and the Supply Contracts to which AMP is a party, when
executed, and delivered by AMP will constitute, valid and binding obligations
of AMP or ▇▇▇▇▇▇▇▇, as the case may be, enforceable against AMP or ▇▇▇▇▇▇▇▇
in accordance with their respective terms, subject to applicable
Page 9
bankruptcy, insolvency, reorganization, fraudulent conveyance and moratorium
laws and other laws of general application affecting the enforcement of
creditors' rights generally.
3.2.4 HISTORIC PERFORMANCE. Schedule 3.2.4 sets forth in full detail
the historic volume of Contact Products produced by Qualitronix and/or
consumed by AMP in the Cylindrical and Non-Cylindrical product, for the, nine
months ended September 30, 1996, including all sales direct to customers of
AMP and delivery of Contact Products manufactures by Qualitronix to AMP for
resale or inclusion as a component in or portion of a higher tier product or
assembly, except that direct sales volume on all Cylindrical Product shall
also include 1995. Such schedule shall specify the part number, quantity
delivered by part number, sales price, customer name for all Cylindrical
Products and the part numbers, quantity and purchase price for all
Non-Cylindrical Products and Inventory totals only for 1995 and the first
nine months of 1996 shall be provided. Such Inventory schedule shall also
show the Activity determined in the manner set forth in Section 2.1.1(b).
3.2.5 RESERVED.
3.2.6 ABSENCE OF CERTAIN CHANGES IN EVENTS. Except as set forth on
Schedule 3.2.6, since October 31, 1996, there has not been:
(a) Any material adverse change in the operations (as now
conducted or as presently proposed to be conducted), assets,
properties or rights, condition (financial or otherwise) or to the
best knowledge of AMP prospects, including, but not limited to any
indication by any customer or distributor of a material reduction
in anticipated volumes of Contact Products to be acquired, of AMP as
it pertains to the activities of Qualitronix or, any occurrence,
circumstance, or combination thereof which reasonably could be
expected to result in any such material adverse change (a "Material
Adverse Effect");
(b) Any material increase in amounts payable by AMP for the
benefit of, or committed to be paid by Qualitronix to or for the
benefit of any person listed on Schedule 3.2.6(b) (each a "Key
Employee") or in any benefits granted under any bonus, stock option,
profit sharing, pension, retirement, deferred compensation, insurance,
or other direct or indirect benefit plan, payment or arrangement made
to, for the benefit of any Key Employee;
(c) Any material transaction entered into or carried out by
AMP with respect to the activities of Qualitronix other than in the
ordinary and usual course;
(d) Any borrowing or agreement to borrow funds; any incurring
of any other obligation or liability, contingent or otherwise except
current liabilities incurred in the usual and ordinary course of
business not exceeding at any one time outstanding $10,000; or any
endorsement, assumption or guarantee of payment or performance of any
loan or obligation of any other individual, firm, corporation or other
entity by AMP with respect to Qualitronix;
(e) Any material change made by AMP in the methods of doing
business with respect to Qualitronix;
(f) Any mortgage, pledge, lien, security interest,
hypothecation, charge or other encumbrance imposed or agreed to be
imposed on or with respect to the Assets;
(g) Any current liabilities incurred or obligations under
contracts entered into after such date other than in the usual and
ordinary course of business;
Page 10
(h) Any sale, lease or other disposition of or any agreement
to sell, lease or otherwise dispose of any material portion of the
Assets, other than sales of finished goods in the usual and ordinary
course at the regularly scheduled prices;.
(i) Any purchase of or any agreement to purchase capital
assets for an amount in excess of $5,000 for any one such purchase or
$20,000 for all such purchases made by AMP with respect to Qualitronix
or any lease or any agreement to lease, as lessee, any capital assets
with payments over the term thereof to be made by AMP with respect
to Qualitronix exceeding an aggregate of $10,000;
(j) Reserved;
(k) Any modification, waiver, change, amendment, release,
rescission or termination of, or accord and satisfaction with respect
to, any material term, condition or provision of any material
contract, agreement, license or other instrument to which AMP is a
party as pertains to the Assets, other than any satisfaction by
performance in accordance with the terms thereof in the usual and
ordinary course of business;
(l) Any labor disputes or disturbances materially adversely
affecting the business or financial prospects of AMP as it pertains
to the activities of Qualitronix including the filing of any petition
or charge of unfair labor practices with the National Labor Relations
Board or efforts to effect a union representation election, actual or
threatened employee strikes, work stoppages or slow downs;
(m) Any delay or postponement (beyond normal practice) by AMP
with respect to Qualitronix of the payment of any accounts payable or
other liabilities of Qualitronix;
(n) To the best of the knowledge of AMP, any other event or
condition of any character which has had a Material Adverse Effect or
may reasonably be expected to result in a Material Adverse Effect; or
(o) To the best of the knowledge of AMP, there have been no
adverse events pertaining to environmental matters.
3.2.7 UNDISCLOSED LIABILITIES. To the best knowledge of AMP, except as
disclosed on Schedule 3.2.7, AMP has no liability or obligation of any nature
(whether liquidated, unliquidated, accrued, absolute, contingent or otherwise
and whether due or to become due) with respect to the Assets, except those
arising under agreements or other commitments expressly identified in any
Schedule hereto; and
3.2.8 TAXES. Except as set forth on Schedule 3.2.8, AMP has filed all
applicable Federal, State and local tax returns relating to the Assets and with
respect to the activities of Qualitronix.
3.2.9 COMPLIANCE WITH LAW.
(a) Subject to the provisions of Section 3.2.16, AMP is in
compliance in all material respects (with respect to the activities
of Qualitronix) with all applicable laws, statutes, orders, rules,
regulations, policies or guidelines promulgated, or judgments,
decisions or orders entered, by any federal, state, local or foreign
court or governmental authority or instrumentality with respect to the
activities of Qualitronix or relating to any of the Assets.
(b) [Reserved]
Page 11
(c) Schedule 1.1.6 contains a complete and accurate list of the
"Permits". Each of the Permits is currently valid and in full force
and effect. The Permits constitute all franchises, licenses, permits,
consents, authorization, approvals, and certificates of any
regulatory, administrative or other agency or body necessary for the
conduct of the activities of Qualitronix. AMP is not in material
violation of any of the Permits and there is not now pending nor, to
the best knowledge of AMP, any threatened proceeding which could
result in the revocation, cancellation or inability of AMP to renew
or transfer any Permit with respect to the activities of Qualitronix.
(d) To the best knowledge of AMP, except as set forth in
Schedule 3.2.9, AMP is not under investigation (with respect to the
activities of Qualitronix) with respect to, or has been charged with
or given notice of any violation of, any applicable law with respect
to the activities of Qualitronix or any of the Assets.
3.2.10 PROPRIETARY RIGHTS.
(a) AMP or ▇▇▇▇▇▇▇▇ owns, free from encumbrances, the patents
and trademarks issued by the United States Patent and Trademark Office
and applications therefor, as well as any other Proprietary Rights set
forth in Schedules 1.1.7(a) and 1.1.7(b). No proceeding has been
filed, of which AMP or ▇▇▇▇▇▇▇▇ has been notified, or to the best
knowledge of AMP or ▇▇▇▇▇▇▇▇ is threatened to be filed, charging AMP
or ▇▇▇▇▇▇▇▇, with respect to the activities of Qualitronix as the same
is currently conducted, with infringement of any patent, trademark,
copyright, copyright registration or any other type of intellectual
property right or other proprietary rights of a third party.
(b) Schedules 1.1.7(a) and 1.1.17(b) set forth all of the
Proprietary Rights in respect thereof. Other than those Proprietary
Rights listed on Schedules 1.1.7(a) and 1.1.7(b), to the best of the
knowledge of AMP or ▇▇▇▇▇▇▇▇, no other Proprietary Rights are
necessary for the operation of the activities of Qualitronix as the
same is currently conducted and all such Proprietary Rights have been
reduced to writing. If Proprietary Rights other than as listed are
required for the operation of the activities of Qualitronix as the
same is currently conducted, AMP or ▇▇▇▇▇▇▇▇ shall grant to DAH, a
royalty free license to the worldwide use of all such Proprietary
Rights currently used by Qualitronix and necessary to carry on the
operation of the activities of Qualitronix as the same is currently
conducted. Such license may not be sublicensed by DAH, except on an
intra-company basis nor may it be transferred except pursuant to a
merger, consolidation or transfer of substantially all of the Assets
of Qualitronix.
3.2.11 RESTRICTIVE DOCUMENTS OR LAWS. With the exception of the
matters listed on Schedule 3.2.11, AMP (with respect solely to the activities
of Qualitronix) is not a party to or bound under any and, to the best
knowledge of AMP, there is no pending, proposed or threatened regulation,
certificate, mortgage, lien, lease, agreement, contract, instrument, law,
vote, order, judgment or decree, or any similar restriction not of general
application which materially adversely affects, or reasonably could be
expected to materially adversely affect (i) the condition, financial or
otherwise, of the Assets or properties which are the subject of this
Agreement; (ii) the continued operation by DAH of the activities of
Qualitronix after the Closing Date on substantially the same basis as
said activities were theretofore operated; or (iii) the consummation of the
transactions contemplated in this Agreement.
3.2.12 INSURANCE. To the best of the knowledge of AMP, the
activities of Qualitronix and the Assets to be transferred herein are insured
with respect to such property and the conduct of such activities in such
amounts and against such risks as are sufficient for compliance with law, and
for compliance with the terms of each of its contractual commitments
(including under each of the Real Property Leases, Personal Property Leases
and Contracts). Schedule 3.2.12 is a true, correct and complete list of all
insurance policies and bonds
Page 12
in force in which AMP or Qualitronix is named as an insured party, in respect
of the activities of Qualitronix, or for which Qualitronix has been charged
or has paid any premiums. Except as disclosed in Schedule 3.2.12, all such
policies or bonds are currently in full force and effect. Neither AMP nor
Qualitronix has received any notice from any such insurer with respect to the
cancellation of any such insurance. AMP will continue all of such insurance
in full force and effect up to and including the Closing Date. All premiums
due and payable on such policies have been paid.
3.2.13 RESERVED
3.2.14 REAL PROPERTY. Except as set forth in Schedule 1.1.1, and except
with respect to real property leased pursuant to the Real Property Leases listed
on Schedule 1.1.2, Qualitronix has no real property. The real property leased
pursuant to the Real Property Leases constitutes all of the real property now
used in and necessary for the conduct of the activities of Qualitronix as
presently conducted. All such Real Property Leases are held free and clear of
all, pledges, liens, security interests, encumbrances and restrictions of any
nature whatsoever, except as listed on Schedule 3.2.14. Schedules 1.1.1 and
1.1.2 set forth a complete and accurate legal description of each parcel of real
property owned by AMP and used in connection with activities of Qualitronix.
Except as set forth in Schedule 3.2.14, all real property,
buildings and structures owned or used by AMP in connection with the
activities of Qualitronix and material to such activities is suitable for the
purpose or purposes for which it is being used, and to the best of the
knowledge of AMP is in such condition and repair as to permit the continued
operation of said activities. To the best of the knowledge of AMP, and except
as set forth in Schedule 3.2.14, none of such real property, buildings or
structures is in need of maintenance or repairs except for ordinary; routine
maintenance and repairs. To the best of AMP's knowledge, and except as set
forth in Schedule 3.2.14, there are no material structural defects in the
exterior walls or the interior bearing walls, the foundation or the roof of
any plant, building, garage or other such structure owned, leased or used by
AMP, and except as set forth in Schedule 3.2.14, in connection with the
activities of Qualitronix and the electrical, plumbing and heating systems,
and the air conditioning system, if any, of any such plant, building, garage
or structure are in reasonable operating condition in light of their age and
prior use. To the best of the knowledge of AMP, and except as set forth in
Schedule 3.2.14, the utilities servicing the real property owned, leased or
used in connection therewith are adequate to permit the continued activities
of Qualitronix and there are no pending or threatened zoning, condemnation or
eminent domain proceedings, building, utility or other moratoria, or
injunctions or court orders which would materially effect such continued
operation. Schedule 3.2.14 lists, and AMP has furnished or made available to
DAH copies of, all engineering, geologic and environmental reports prepared
by or for either AMP or Qualitronix with respect to the Real Property and the
real property leased pursuant to the Real Property Leases.
3.2.15 PERSONAL PROPERTY. The schedules provided for under Section
1.1.3 contain complete and accurate descriptions of the Personal Property.
Except as set forth in Schedule 3.2.15, and except with respect to personal
property leased pursuant to the material Personal Property Leases, AMP has
good, valid and marketable title to all of the Personal Property. Schedule
3.2.22 contains a complete and accurate description of all Personal Property
Leases to which AMP is a party and which are used in connection with the
activities of Qualitronix. Such portion of the Assets which is personal
property constitutes all of the personal property now used in or necessary
for the conduct of the activities of Qualitronix as presently conducted,
wherever located, and is held free and clear of all mortgages, pledges,
liens, security interests, encumbrances and restrictions of any nature
whatsoever, except as listed on Schedule 3.2.15.
Page 13
To the best knowledge of AMP, none of the Machinery or Equipment or
Tooling is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs.
3.2.16 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 3.2.16
and described in the reports listed on Schedule 3.2.14, to AMP's knowledge the
operations of Qualitronix is in compliance in all material respects with all
occupational health and safety acts and all environmental laws and regulations
of all federal, state and local governmental or regulatory bodies having
jurisdiction over AMP with respect to the activities of Qualitronix. Without
limiting the generality of the foregoing, and by way of example only, except as
set forth on Schedule 3.2.16, all as to AMP's knowledge:
(a) There has not been, and is not now occurring, any Release
of any Hazardous Substance on any real property owned, operated, leased or
used by AMP in connection with the activities of Qualitronix. For purposes
of this Agreement, the terms "Release" and "Hazardous Substance" shall
have the same meanings as those terms are given in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601 ET SEQ. ("CERCLA"), except that for purposes of this
Agreement petroleum (including crude oil or any fraction thereof) shall be
deemed a Hazardous Substance.
(b) With respect to the activities of Qualitronix, AMP has
never sent a Hazardous Substance to a site which, pursuant to CERCLA or
any similar state law, (A) has been placed, or is proposed to be placed,
or, to the best knowledge of AMP, may in the future be placed, on the
"National Priorities List" of hazardous waste sites or on any similar list
of any federal, state or local governmental agency, including the
Comprehensive Environmental Response, Compensation and Liability System
list for potential hazardous waste sites, or (B) is subject to a claim, an
administrative order or other request to take "removal" or "remedial"
action (as defined under CERCLA) or to pay for any costs relating to
such site.
(c) With respect to the activities of Qualitronix, AMP has
never been nor is currently in violation of any provision of the Toxic
Substances Control Act or the regulations promulgated thereunder.
(d) With respect to the activities of Qualitronix, AMP is not
involved in any suit or has received notice of any claim relating to
personal injuries from exposure to Hazardous Substances.
3.2.17 BROKERS. FINDERS. The transactions contemplated herein were
not submitted to AMP by any broker or other person entitled to a commission
or finder's fee thereon, and were not with the consent of AMP submitted to
DAH by any such broker or other person. Neither AMP nor any of its officers,
directors or employees has engaged any broker or finder or incurred or taken
any action which may give rise to any liability against itself or the Assets
for any brokerage fees, commissions, finders fees or similar fees or expenses
and no broker or finder has acted directly or indirectly for AMP in
connection with this Agreement or the transactions contemplated hereby. No
investment banking, financial advisory or similar fees have been incurred or
are or will be payable by AMP in connection with this Agreement or the
transactions contemplated hereby.
3.2.18 LEGAL PROCEEDINGS. ETC. Except as set forth on Schedule
3.2.18, there is no claim, litigation, action, suit or proceeding,
administrative or judicial, filed, pending or to the best knowledge of AMP,
threatened against AMP, (with respect solely to the activities of
Qualitronix), or involving the Assets, this Agreement or the transactions
contemplated hereby, at law or in equity, before any federal, state or local
court or regulatory agency, or other governmental authority, including any
unfair labor practice or grievance,
Page 14
proceedings or claim which could have a Material Adverse Effect upon
Qualitronix Except as disclosed in Schedules 1.1.6 and 3.2.18, AMP (with
respect to the activities of Qualitronix) is not subject to any judgment,
order or decree, or, to the best knowledge of AMP, any governmental
restriction applicable to AMP (with respect to the activities of Qualitronix)
which has a reasonable probability of having a Material Adverse Effect, or
which materially adversely affects the ability of AMP to continue the
activities of Qualitronix as currently being conducted, or of DAH to continue
the activities of Qualitronix as presently conducted.
3.2.19 NO CONFLICT OR DEFAULT. Neither the execution and delivery of
this Agreement, nor compliance with the terms and provisions hereof, including
the consummation of the transactions contemplated hereby and thereby, will (a)
violate in any material respect any statute, regulation or ordinance of any
governmental authority, or (b) conflict with or result in the breach of any
term, condition or provision of the articles of incorporation or bylaws of AMP
or of any agreement, deed, contract, mortgage, indenture, writ, order, decree,
legal obligation or instrument (with respect to the activities of Qualitronix)
to which AMP is a party or by which AMP or any part of the Assets is or may be
bound, or (c) constitute a material default (or an event which with the lapse of
time or the giving of notice, or both, would constitute a material default)
thereunder, or (d) result in the creation or imposition of any lien, charge or
encumbrance, or restriction of any nature whatsoever with respect to any part of
the Assets, or (e) except as set forth on Schedule 3.2.19, give to others any
interest or rights, including rights of termination, acceleration or
cancellation in or with respect to any part of the Assets or the activities of
Qualitronix
3.2.20 LABOR RELATIONS. Schedule 3.2.20 sets forth all collective
bargaining or other labor agreements to which AMP is bound and which covers
employees engaged in the activities of Qualitronix. There is no labor strike,
dispute, slowdown or stoppage, or any union organizing campaign, or petition for
certification actually pending or, to the best knowledge of AMP, threatened
against or involving the activities related to Qualitronix. Schedule 3.2.20 sets
forth all pending grievances and arbitration proceedings against AMP as relates
to the activities of Qualitronix arising out of or under a collective bargaining
or other labor agreement No collective bargaining or other labor agreement is
currently being negotiated by AMP which would affect employees engaged in the
activities of Qualitronix. AMP has not experienced any work stoppage or other
material labor difficulty over the past three years with respect to the
activities of Qualitronix. No agreement which is binding on AMP as pertains to
the activities of Qualitronix restricts it from relocating or closing any or all
of its operations.
3.2.21 EMPLOYEE BENEFIT PLANS.
(a) To the best of the knowledge of AMP, except as set forth in
Schedule 3.2.21, AMP does not currently sponsor, maintain or contribute
to, and has not, within the past 3 years, sponsored, maintained or
contributed to, any pension, retirement, profit-sharing, deferred
compensation, bonus, stock option or other incentive plan, or any other
employee benefit program, arrangement, agreement or understanding, or
medical, vision, dental or other health plan, or life insurance or
disability plan, or any other employee benefit plan as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), whether or not any such employee benefit plan is otherwise
exempt from the provisions of ERISA, and whether or not formal
or informal, written or oral, and whether or not legally binding all as
pertains to the activities of Qualitronix. (All such plans, funds or
programs sponsored, maintained or contributed to by AMP currently or within
the past 3 years, whether or not listed on Schedule 3.2.21, are hereinafter
referred to as the "Employee Benefit Plans"). For the purpose of this
Section 3.2.21, the term "AMP" shall include all "entities" of AMP, whether
or not incorporated, with which it would be treated as a single employer
for purposes of Sections 414(b), (c) or (m) of the Internal Revenue Code
(the "Code");
Page 15
(b) Qualitronix maintains, sponsors or contributes only to those
employee pension benefit plans (as defined in Section 3(2) of ERISA, whether or
not excluded from coverage under specific Titles or Subtitles of ERISA) for the
benefit of employees or former employees of AMP which are described in Schedule
3.2.21, none of which is a multiemployer plan (within the meaning of Section
3(37) of ERISA);
(c) Qualitronix maintains, sponsors or contributes only to those
employee welfare benefit plans (as defined in Section 3(1) of ERISA, whether or
not excluded from coverage under specific Titles or Subtitles of ERISA) for the
benefit of employees or former employees of AMP which are described in Schedule
3.2.21, none of which is a multiemployer plan (within the meaning of Section
3(37) of ERISA);
(d) Except as set forth on Schedule 3.2.21, each Employee Benefit
Plan is in compliance in all material respects with, and has been administered
in all material respects in compliance with, the applicable provisions of ERISA,
the Code and any other federal or state law. On the Closing Date, AMP will have
no liabilities on account of or in connection with any Employee Benefit Plan.
AMP has adequately accrued for liabilities to meet current contributions or
benefit payments which remain unfunded as of the Closing Date as set forth in
Schedule 3.2.21 (d) and which accrued amount shall be reflected as a reduction
in the Purchase Price as set forth in Section 2 to the extent that such unfunded
amount is assumed by DAH at the Closing.
3.2.22 CONTRACTS AND COMMITMENTS.
(a) The Schedules submitted in connection with Section 1.1 contain
a list of all of the contracts or agreements of any kind and type to which AMP
is a party with respect to the activities of Qualitronix and the Assets which
involve the payment by or to AMP with respect to the activities of Qualitronix
in the aggregate of $10,000 or more during any year (collectively the "Material
Contracts"), and AMP shall deliver to DAH correct and complete copies of each
such Material Contract. The Material Contracts so listed, taken together,
constitute all of the contracts, real estate leases, personal property leases,
agreements, contract rights, leases, license agreements, franchise rights and
agreements, policies, purchase and sales orders, quotations and executory
commitments, instruments, guaranties, indemnifications, arrangements,
obligations and understandings (written or oral), involving the payment by or to
AMP with respect to the activities of Qualitronix, in the aggregate of $10,000
or more during any year, necessary to the conduct of the
activities of Qualitronix as conducted by AMP.
(b) [Reserved]
(c) All of the Material Contracts are valid and binding, in full
force and effect and enforceable against AMP in accordance with their respective
provisions. AMP has not assigned, mortgaged, pledged, encumbered, or otherwise
hypothecated any of its right, title or interest under any Material Contract. To
the best knowledge of AMP, AMP is not in violation of, in default in respect of,
nor has there occurred an event or condition which, with the passage of time of
giving of notice (or both) would constitute a violation or default of, any
Material Contract; and, to the best knowledge of AMP, there are no facts or
circumstances which would reasonably indicate that AMP (or any other party) will
be or may be in violation of or in default in respect of any Material Contract,
subsequent to the date hereof. No notice has been received by AMP claiming any
such default or indicating the desire or intention of any other party thereto to
amend, modify, rescind or terminate the same.
Page 16
3.2.23 RESERVED.
3.2.24 INVENTORIES. Schedule 1.1.4(a) completely and accurately lists all
of the Inventory owned by AMP with respect to the activities of Qualitronix, and
the value thereof as of the date thereof. Except as set forth in Schedule
3.2.24, in all material respects all of the Inventory consists of a quality
usable and saleable in the ordinary and usual course of business. All Inventory
not written off has been priced at the lower of "standard cost" or market on a
LIFO basis. The quantities of each type of Inventory (whether raw materials,
work-in-process, or finished goods) are reasonable and warranted in the present
circumstances of Qualitronix. To the best knowledge of AMP and based upon its
compliance with quality specifications AMP Specifications: 102-55010 Rev. E;
102-55015 Rev.A and 102-55033 Rev. D, all work-in-process and finished goods
Inventory is free of any defect or other deficiency.
3.2.25 BACKLOG. All unfilled orders to purchase goods of AMP as it relates
to the activities of Qualitronix are set forth in Schedule 1.1.4(b) and are firm
and binding commitments having delivery schedule commitments (subject to
cancellation rights set forth therein) of the respective purchasers (assuming
that such purchaser has properly authorized by all requisite corporate or, if
not a corporation, by all other requisite action and has properly executed and
delivered such purchase order, which, to the best knowledge of AMP is the case)
to purchase the goods indicated at the prices specified.
3.2.26 PERSONNEL RECORDS. The Personnel Records submitted pursuant to
Section 1.1.15 constitute the full and complete personnel records with respect
to all Employees employed by AMP who will be employed by DAH subsequent to the
Closing. Such Personnel Records were kept in accordance with all applicable laws
and regulations and the personnel practices of AMP in the ordinary course.
3.2.27 MANAGERS, EMPLOYEES AND COMPENSATION.
(a) Schedule 3.2.27 sets forth the name of all managers of AMP with
respect to the activities of Qualitronix, their respective terms of office,
the total salary, bonus payments, fringe benefits and perquisites each
received in each of the last 3 fiscal years ended December 31, 1995, and
changes to the foregoing which have occurred since December 31, 1995; such
Schedule also lists and describes the current base salary, bonus payments,
fringe benefits and perquisites of any other employee, agent or
representative of AMP with respect to the activities of Qualitronix whose
total current salary, bonus or other compensation exceeds $50,000 annually
during any of the last 3 fiscal years ended December 31, 1995, and changes
to the foregoing since December 31, 1995. There are no other material forms
of compensation paid to any such manager or employee of AMP with respect to
the activities of Qualitronix. The provisions for wages and salaries
accrued and set forth on the October 31, 1996 Schedule of Liabilities are
adequate for salaries and wages, including accrued vacation pay, for the
period up through the date thereof, and such schedule sets forth all
obligations for wages and salaries and other compensation to its employees,
including, but not limited to, vacation pay and sick pay, and all
commissions and other fees payable to agents, salesmen and representatives.
AMP has filed any and all payroll tax returns, and paid all payroll taxes
due for any and all employees engaged in the activities of Qualitronix, due
through the Closing Date ("Payroll Expenses"). To the extent that there
shall be any unpaid Payroll Expenses as of the Closing, such amount shall
be a reduction in the purchase price as set forth in Section 2.
(b) To the best knowledge of AMP, no Key Employee has a present
intention to leave the employ of Qualitronix or has taken any action
directed towards leaving the employ of Qualitronix.
Page 17
3.2.28 CREDIT TERMS: PRODUCT WARRANTIES. Schedule 3.2.28 sets forth all the
terms and conditions of credit and discounts given by AMP to its customers in
the usual and ordinary course of its business with respect to the activities of
Qualitronix and a list of all transactions pending where there is a material
departure therefrom. Also set forth on such Schedule are the terms and
conditions of the standard product or service warranties and guarantees given by
AMP in the usual and ordinary course of its business with respect to the
activities of Qualitronix and a list of all transactions pending as to which
there is a material departure therefrom. Except as set forth on such Schedule,
AMP has conducted all qualification inspections and quality conformance
inspections required by the specifications for Contact Products of Qualitronix
included on qualified products lists in accordance with the requirements of such
specifications, and all Contact Products shipped have been in conformance with
such specifications.
3.2.29 RESERVED.
3.2.30 GOVERNMENT CONTRACTS.
(a) For purposes of this Section 3.2.30, the term "Government"
means any agency, division, subdivision, audit group, or procuring office
of the federal government, including the employees or agents thereof; the
term "Transferor" means AMP solely with respect to the activities of
Qualitronix; the term "Government Contract" means any prime contract,
subcontract, basic ordering agreement, letter contract, purchase order or
delivery order of any kind, including all amendments, modifications and
options thereunder or relating thereto, between the Transferor and any of
the Government, any prime contractor of the Government, any subcontractor
of such a prime contractor or any subcontractor of another subcontractor,
however far removed from the prime contractor such subcontractor may be,
(A) currently in force; (B) which, within the three years preceding the
date of this Agreement, expired or were terminated; or (C) for which final
payment was received within the three years preceding the date of this
Agreement; and the term "Bid" means any outstanding quotation, bid or
proposal submitted by Transferor to the Government, any proposed prime
contractor of the Government, or any proposed subcontractor.
(b) Schedule 3.2.30 contains a true and complete list of all
Bids which involve or can be expected to involve aggregate consideration in
excess of $100,000.
(c) Except as set forth in Schedule 3.2.30, with respect to any
Government Contract or Bid, to the best of the knowledge of AMP, the
Transferor has complied with and expects to comply with all material terms
thereof, all certifications and representations of Transferor with respect
thereto, and all statutes and regulations applicable thereto.
(d) Except as set forth in Schedule 3.2.30, (A) no show cause
notices, cure notices, or terminations have been issued against the
Transferor with respect to any Government Contract; (B) no negative
determinations of responsibility have been issued against the Transferor
with respect to any Bid and (C) none of the Government, any prime
contractor nor any subcontractor has notified the Transferor, either orally
or in writing, that it is in breach or violation of any provision of any
Government Contract, any certification or any QPL or representations with
respect thereto or any statutes and regulations applicable thereto.
(e) The Transferor possesses all necessary security
clearances and permits for the execution of its obligations under any
Government Contracts and Bids. To the best knowledge of AMP, none of the
Key Employees and other employees currently employed by the Transferor
have ever been denied a security clearance.
Page 18
(f) The Transferor is not undergoing and has not undergone
any audit, other than in the ordinary course of such business, the
results of which Audit did not have a Material Adverse Effect, and has
no knowledge or reason to know of any basis for impending audits in the
future, arising under or relating to any Government Contract except as
set forth in Schedule 3.2.30.
(g) The Transferor has entered into no financing
arrangements with respect to the performance of any current
Government Contract except as set forth in Schedule 3.2.30.
3.2.31 SOLVENCY. The total assets of AMP exceeds its total liabilities; and
AMP is able to perform its financial obligations as performance thereof becomes
due.
3.2.32 ALLOCATIONS. Those costs which, during the period January 1, 1995
through September 30, 1996, have been allocated by AMP to the activities of
Qualitronix, as set forth in Schedule 3.2.32, equal or exceed the true cost to
AMP, and all such identifiable costs have been allocated to Qualitronix.
Schedule 3.2.32 sets forth such allocations for 1995, and for the 9 months ended
September 30,1996.
3.2.33 COMPLETE DISCLOSURE. To the best knowledge of AMP, no representation
or warranty made by AMP in this Agreement, and no exhibit, schedule, statement,
certificate or other writing furnished to DAH by or on behalf of AMP pursuant to
this Agreement or in connection with the transactions contemplated hereby or
thereby, contains or will contain, any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
contained herein and therein not misleading.
3.2.34 REPETITIVE DISCLOSURE. To the extent that DAH, AMP or ▇▇▇▇▇▇▇▇ have
made any disclosure on any schedule to this Agreement, such disclosure shall be
considered to be made for purposes of this Agreement notwithstanding that such
disclosure is not made on all applicable schedules.
3.2.35 NO REPRESENTATION REGARDING FUTURE BUSINESS. Notwithstanding any
other provision in this Agreement to the contrary, including any express or
implied representation contained herein, AMP makes no representation regarding
its present or future intent to continue in the business of manufacturing,
distributing or selling cylindrical or non-cylindrical connectors.
3.3 RESERVED.
3.4 CLAIMS BASED ON REPRESENTATIONS AND WARRANTIES. The recourse by DAH
against AMP or ▇▇▇▇▇▇▇▇ or by AMP or ▇▇▇▇▇▇▇▇ against DAH for any breach of the
representations and warranties set forth in Sections 3.1 and 3.2 shall be
limited to a two (2) year period from the Closing Date, except for matters as to
which notification of a potential claim has been given prior to the expiration
of the two (2) year period, in which instance the period in which to assert such
claim shall be extended for six months.
3.5 DUE DILIGENCE. The due diligence conducted by DAH will not affect,
qualify, or modify (i) any of the representations or warranties of AMP or (ii)
any indemnification or similar obligations of AMP.
4. COVENANTS.
4.1 COVENANTS OF DAH.
4.1.1 PAYMENT AND PERFORMANCE OF ASSUMED LIABILITIES. From and after
the Closing Date, DAH shall pay and perform the liabilities assumed pursuant to
Section 2.1 in the ordinary course of its business in accordance with DAH's
standard business practices.
Page 19
4.1.2 RESERVED.
4.1.3 USE OF NAME. After the Closing Date, DAH shall not use the name
"AMP" in connection with the activities of Qualitronix.
4.1.4 COVENANT AGAINST DISCLOSURE. Except to the extent provided by
Section 4.2.8, DAH agrees not to (a) disclose to any person, association, firm,
corporation or other entity (other than AMP or those designated in writing by
AMP) in any manner, directly or indirectly, any information or data relevant to
the business of AMP (other than Qualitronix), whether of a technical or
commercial nature, or (b) by use, or permit or assist, by acquiescence or
otherwise, any person, association, firm corporation or other entity (other than
AMP or those designated in writing by AMP) to use, in any manner, directly or
indirectly, any such information or data, excepting only use of such data or
information as is at the time generally known to the public other than by any
breach of any provision of this Section 4.1.4.
4.1.5 RESERVED.
4.1.6 HOLD HARMLESS. For a period of two years from the Closing, DAH
agrees to indemnify and hold harmless AMP (the "DAH Indemnification") from any
claims, costs or liabilities, which exceeds $10,000 for each claim of DAH
Indemnification arising from the breach of any of the warranties or
representations of DAH herein (the "AMP Claims"). AMP Claims relating to matters
of like or similar kind shall be aggregated and each shall not be considered a
separate claim. In connection therewith, DAH shall undertake to defend AMP with
respect to any such AMP Claims asserted at its sole cost and expense upon
receipt of notice of such AMP Claims.
4.1.7 COVENANT AGAINST HIRING. DAH agrees that it shall not
purposefully take any action which would induce any employee or representative
of AMP not to continue as an employee or representative of AMP. Without limiting
the generality of the foregoing, DAH shall not, either directly or indirectly
through its Tri-Star subsidiary, for a three (3) year period from the Closing
Date solicit to employ (whether as an employee, officer, director, agent,
consultant or independent contractor), or enter into any partnership, joint
venture or other business association with, any person who was at the Closing
Date an employee, partner, representative, or manager of the Aerospace and
Government Systems Sector of AMP.
4.1.8 EMPLOYEES. Except as set forth on Schedule 4.1.8, which shall be
delivered not later than three days preceding the Closing, from and after the
Closing Date, DAH shall employ all of the current employees of AMP engaged in
the activities of Qualitronix, subject to normal management prerogatives to
adjust the work force, review performance and terminate employment as DAH shall
deem necessary or appropriate. DAH shall compensate such employees at
substantially the same level of compensation in effect for such employees
immediately prior to the Closing Date. DAH will provide fringe benefits for such
employees which are consistent with fringe benefits provided to employees of the
TriStar subsidiary of DAH.
4.2 COVENANTS OF AMP.
4.2.1 CHANGE OF NAME: USE OF NAME. AMP or ▇▇▇▇▇▇▇▇ shall ▇▇▇▇▇ any
consents and take any other and further action, all at its own expense,
requested by DAH to enable DAH to use, reserve or register the name
"Qualitronix" and any other trademark or trade style or name presently used by
Qualitronix, for the exclusive use of DAH. After the Closing Date, AMP shall
discontinue use of the names "Qualitronix".
Page 20
4.2.2 COVENANT AGAINST DISCLOSURE. Except to the extent provided in
Section 4.2.8, AMP agrees not to (a) disclose to any person, association, firm,
corporation or other entity (other than DAH or those designated in writing by
DAH) in any manner, directly or indirectly, any information or data relevant to
the activities of Qualitronix, or whether of a technical or commercial nature,
or (b) by use, or permit or assist, by acquiescence or otherwise, any person,
association, firm corporation or other entity (other than DAH or those
designated in writing by DAH) to use, in any manner, directly or indirectly, any
such information or data, excepting only use of such data or information as is
at the time generally known to the public other than by any breach of any
provision of this Section 4.2.2.
4.2.3 COVENANT AGAINST HIRING. AMP understands that it is essential to
the successful operation of the activities of Qualitronix to be acquired
hereunder that DAH retain substantially unimpaired Qualitronix's personnel. AMP
agrees that it shall not purposefully take any action which would induce any
employee or representative of AMP not to become or continue as an employee or
representative of DAH. Without limiting the generality of the foregoing, AMP,
solely as to its Aerospace and Government Systems Sector, shall not, for a three
(3) year period from the Closing Date solicit to employ (whether as an employee,
officer, director, agent, consultant or independent contractor), or enter into
any partnership, joint venture or other business association with, any person
who was at the Closing Date an employee, partner, representative, or manager of
AMP engaged in the activities of Qualitronix. Similarly for such three year
Period, AMP, solely as to its Aerospace and Government Systems Sector, shall not
solicit to employ any person who is then employed by DAH or any of its
affiliates or subsidiaries.
4.2.4 INJUNCTIVE RELIEF. AMP acknowledges and agrees that DAH's remedy
at law for any breach of any of AMP's obligations under Subsections 4.2.2, 4.2.3
or 4.2.9 hereof would be inadequate, and agrees and consents that temporary and
permanent injunctive relief may be granted in a proceeding which may be brought
to enforce any provision of Subsections 4.2.2, 4.2.3 or 4.2.9 without the
necessity of proof of actual damage. The rights and remedies conferred upon DAH
under this Section 4.2.4, elsewhere in this Agreement, or by any instrument or
law shall be cumulative and may be exercised singularly or concurrently.
4.2.5 CONDUCT OF BUSINESS OF AMP PRIOR TO CLOSING DATE. AMP agrees
that on and after the date hereof and prior to the Closing Date:
(a) The operations, practices and activities related to Qualitronix
shall be conducted only in the ordinary course of business and consistent
with past practice;
(b) Reserved;
(c) Reserved;
(d) Reserved
(e) Reserved
(f) Except as set forth in Schedule 4.2.5(f), AMP, shall not, with
respect to the activities of Qualitronix or any of the Assets:
(i) incur, become subject to, or suffer, or agree to incur,
become subject to or suffer, any obligation or liability (absolute or
contingent) except current liabilities incurred, and obligations under
contracts entered into, in the ordinary course of business;
Page 21
(ii) discharge or satisfy any lien or encumbrance or pay any
obligation or liability (absolute or contingent) other than liabilities
payable in the ordinary course of business;
(iii) mortgage, pledge or subject to lien, charge or any other
encumbrance, any of the Assets or agree so to do;
(iv) sell or transfer or agree to sell or transfer any of its
assets, or cancel or agree to cancel any debt or claim, except in each case
in the ordinary course of business;
(v) consent or agree to a waiver of any right of substantial
value;
(vi) enter into any transaction other than in the ordinary
course of its business;
(vii) without the express written consent of DAH, increase the
rate of compensation payable or to become payable by it to any Key Employee
over the rate being paid to such Key Employee at October 31, 1996;
(viii) Reserved;
(ix) terminate any contract, agreement, license or other
instrument to which it is a party;
(x) through negotiation or otherwise, make any commitment or
incur any liability or obligation to any labor organization;
(xi) without the express written consent of DAH, make or
agree to make any accrual or arrangement for or payment of bonuses or special
compensation of any kind to any Employee;
(xii) Reserved;
(xiii) without the express written consent of DAH, directly or
indirectly pay or make a commitment to pay any severance or termination pay
to any Employee;
(xiv) Reserved;
(xv) introduce any new method of management, operation or
accounting with respect to its business or any of the assets, properties or
rights applicable thereto;
(xvi) offer or extend more favorable prices, discounts or
allowances than were offered or extended regularly on and prior to November 7,
1996, other than in the ordinary course of business;
(xvii) make capital expenditures or commitments therefor
without the express written consent of DAH; and
(xviii) hire any employee earning a wage or salary of more than
$30,000 per year.
Page 22
(xix) except as may be specifically requested, ship any
Contact Products other than pursuant to the delivery schedule set forth
in any purchase order or contract, nor build up inventory inconsistent
with past practices
(g) AMP shall use its best efforts to preserve Qualitronix's
activities intact, to keep available to Qualitronix its present
employees, and to preserve the good will of its suppliers, customers and
others with whom business relationship exist; and
(h) AMP shall not take, agree to take or permit to be taken any
action or do or permit to be done anything in the conduct of the
Qualitronix' activities, or otherwise, which would be contrary to or in
breach of any of the terms or provisions of this Agreement or which would
cause any of the representations or warranties of AMP contained herein to
be or become untrue in any material respect.
4.2.6 INSPECTION OF BOOKS AND RECORDS. From the date of this Agreement
until the Closing Date, upon reasonable request by DAH, AMP shall make or cause
to be made available to DAH for examination those documents, records and
information as set forth in Section 1.1 including, but not limited to those
related to the Assets and other materials such as books of account, contracts,
agreements, commitments, records and its documents directly to subject matter of
this Agreement and shall permit DAH and its representatives, attorneys,
accountants and agents to have access to and to copy the same at all reasonable
times. In addition, AMP shall make, or cause to be made, available to DAH and
its representatives, attorneys, accountants and agents the Assets and all of the
above described records for any environmental compliance audit, any
environmental site assessment (including soil, groundwater and/or other testing)
and any other physical inspection which DAH may elect to conduct at its own
expense.
4.2.7 FURTHER ASSURANCES. On and after the Closing Date, AMP shall
prepare, execute and deliver, at their expense, such further instruments of
conveyance, sale, assignment or transfer, and shall take or cause to be taken
such other or further action as DAH shall reasonably request at any time or from
time to time in order to perfect, confirm or evidence in DAH title to all or any
part of the Assets or to consummate, in any other manner, the terms and
conditions of this Agreement.
4.2.8 PRESS RELEASES, ANNOUNCEMENTS AND INTRODUCTIONS.
(a) Neither AMP nor DAH shall issue any press release or
announcement, including announcements to employees, relating to the
subject matter of this Agreement without the prior written approval of
the other parties hereto; PROVIDED, HOWEVER that any party may make any
public disclosure it believes in good faith is required by law (in
which case it will advise the other parties hereto prior to making the
disclosure). On the Closing Date, AMP and DAH will issue mutual public
announcements and/or press releases announcing the transaction contemplated
by this Agreement.
(b) At a mutually agreeable time prior to the Closing, but not
earlier than one week prior to the Closing, AMP shall introduce
representatives of DAH to Customers, Distributors and Key Employees of
Qualitronix for the purpose of facilitating transition or otherwise assist
DAH in accomplishing such transition.
Page 23
4.2.9 COVENANT NOT TO COMPETE AMP shall enter into and observe,
according to its terms that Covenant Not to Compete as set forth in EXHIBIT B
hereto, pursuant to which AMP shall agree to not, directly or indirectly,
engage, anywhere in the United States in the business of manufacturing,
distributing or selling Contact Products for Cylindrical Connectors for military
and aerospace applications for a period of four years following the Closing
Date.
4.2.10 DELIVERY OF HISTORIC PERFORMANCE SCHEDULES. AMP shall deliver
the Historic Performance Schedule required by Section 3.2.4 not later than five
days following the execution of this Agreement for review by DAH.
4.2.11 PAYMENT OF SEVERANCE In the event that DAH shall terminate any
employee of AMP employed by DAH pursuant to Section 4.1.8(a) at any time during
the sixty (60) days following the Closing Date, AMP shall pay to any such
terminated employee such severance benefits as would have been paid had such
employee still been employed by AMP. DAH shall promptly notify AMP of its intent
to make such termination and AMP shall thereupon pay such severance benefits in
accordance with its policies and procedures.
4.2.12 RESERVED..
4.2.13 INDEMNITY REGARDING BULK SALES, ETC. AMP hereby agrees to
indemnify and hold harmless DAH from any claims, costs or liabilities incurred
as a result of the failure of AMP to comply with any and all requirements of
sales tax and bulk sales laws and regulations arising under Pennsylvania,
California and any other jurisdiction in connection with the transactions
contemplated herein, including all pre-closing notice, payment and receipt
requirements in connection with the transactions contemplated by this Agreement.
4.2.14 DISTRIBUTOR TERMINATIONS AFTER CLOSING DATE. AMP shall
indemnify and save DAH harmless from any and all costs or expenses related to
returns of Contract Products from any Distributor as set forth in Section 2.6.4.
4.2.15 USE OF NAME. After the Closing Date, DAH shall not use the name
"AMP" in connection with the activities of Qualitronix.
4.2.16 HOLD HARMLESS. Except for the assumed liabilities set forth in
Section 2.6, for a period of two years from the Closing Date, AMP agrees to
indemnify and hold harmless DAH (the "AMP Indemnification") from any claims,
costs or liabilities, which in exceeds $10,000 for each claim of
Indemnification, arising from a breach of any of the warranties and
representations of AMP set forth herein (the "DAH Claims"). DAH Claims relating
to matters of like or similar kind shall be aggregated and each shall not be
considered a separate claim. In connection therewith, AMP shall undertake to
defend DAH with respect to any such DAH Claims asserted at its sole cost and
expense upon receipt of notice of such DAH Claims.
4.2.17 ACCESS TO AMP SYSTEM-TRANSITION For such period as DAH shall
deem reasonably necessary, but not to exceed one year from the Closing Date, AMP
shall provide to DAH access to the AMP System for the purposes of facilitating a
transition by DAH from the AMP System to its own management information system.
Included in such access shall be utilization of the installed routers connecting
the Local Area Network to the main AMP System. The parties shall establish such
systems and procedures to assure that neither party shall have access to any
confidential or proprietary information of the other during this transition
period. DAH shall use its best efforts to conclude this transition as quickly as
Page 24
possible. For the first 120 days following the Closing Date, such access shall
be without charge. Thereafter DAH shall pay a monthly fee of $8,500 for such
access.
4.2.18 RESERVED
5. CONDITIONS PRECEDENT TO CLOSING.
5.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF DAH AND AMP The Parties shall
have entered into the Supply Contracts, which Supply Contracts shall be
effective as of the Closing Date.
5.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF DAH. The obligation of DAH to
close the transactions contemplated by this Agreement is subject to the
fulfillment of all of the following conditions precedent on or prior to the
Closing Date:
5.2.1 Except for such breaches as would not have a Material Adverse
Effect, each and every representation and warranty made by AMP or ▇▇▇▇▇▇▇▇ in
this Agreement shall be true in all respects when made and shall be true in all
material respects as if originally made on and as of the Closing Date.
5.2.2 All obligations and covenants of AMP to be performed under this
Agreement through, and including on, the Closing Date (including, without
limitation, all obligations which AMP would be required to perform at the
Closing if the transactions contemplated by this Agreement were consummated),
including obtaining the Material Consents pertaining to the matters set forth in
Section 1.1.8(a), shall have been performed in all material respects.
5.2.3 No injunction shall have been entered by a court of competent
jurisdiction and remain in effect which would restrain or prohibit the
transactions contemplated by this Agreement.
5.2.4 Reserved.
5.2.5 DAH's Board of Directors shall have approved the transactions
contemplated by this Agreement.
5.2.6 Since the date of this Agreement, there shall have been no
change in the financial condition, business or operations of Qualitronix and
there shall have been no damage or loss having, or reasonably expected to have a
Material Adverse Effect on the Assets.
5.2.7 AMP or ▇▇▇▇▇▇▇▇, as the case may be, shall have delivered, to
DAH each of the following, in each case duly and properly executed (if
appropriate) and in form and substance reasonably satisfactory to DAH:
(a) A good and sufficient General Conveyance, Assignment and ▇▇▇▇ of
Sale, conveying, selling, transferring and assigning to DAH title to
all of the Assets free and clear of all security interests, liens,
charges, encumbrances or equities whatsoever, except those listed on
Schedules 3.2.14 and 3.2.15.
(b) The books and records described in Section 1.1.15; and
certificates of each policy of insurance described in Section 3.2.12,
together with evidence that such policies are in force on the Closing
Date.
(c) The covenant not to compete as provided in Section 4.2.9
Page 25
(d) The Historic Performance Schedule described in Section 3.2.4.
(e) Resolutions of the directors of AMP and ▇▇▇▇▇▇▇▇ authorizing
the execution and delivery of this Agreement by AMP and ▇▇▇▇▇▇▇▇
and the performance of its obligations hereunder, certified by the
Corporate Secretary of AMP and ▇▇▇▇▇▇▇▇ or an opinion of counsel
to AMP, that such is not required.
(f) AMP shall have delivered to DAH, in form suitable for filing,
such certificates, consents and other documents as are necessary
or desirable to effect the transfer of the registration of any
name conveyed to DAH pursuant to this Agreement, in Pennsylvania,
California, Delaware and in each other state where AMP or ▇▇▇▇▇▇▇▇
is qualified to do business with respect to the activities of
Qualitronix or has registered any such name under a "trade name" or
"fictitious name" statute or similar law or has taken any other
action in order to obtain or protect rights in such name.
(g) A favorable opinion of counsel for AMP, addressed to DAH and
dated the Closing Date, substantially in the form of EXHIBIT C
attached hereto.
(h) A certificate of the Pennsylvania, California and Delaware
Secretaries of State, each dated as of a date not earlier than ten
days prior to the Closing Date, as to the good standing of AMP or
▇▇▇▇▇▇▇▇ in such States, as applicable.
(i) Such other separate instruments of sale, assignment or
transfer that DAH may reasonably deem necessary or appropriate in
order to perfect, confirm or evidence title to all or any part of
the Assets.
5.2.8 DAH shall have approved, in writing, the Due Diligence as
set forth in Schedule 5.2.8 on or before 5:30 pm Pacific Time of the 10th
business day following receipt by DAH of all of the schedules and related
information to be furnished pursuant to Schedules 3.2.4 and 5.2.8 (the
"Diligence Schedules").
5.2.9 DAH shall use its best efforts to obtain the consent of its
senior lender and of its subordinated lender of the transaction to the
Closing of this Agreement on or before 5:30pm Pacific Time of the 7th day
following receipt by DAH of the Diligence Schedules. Such time for consent
shall be continued day to day until the time scheduled for Closing. In the
event that such consent has not been obtained by the Closing Date, the
Closing Date shall be extended day to day until December 27, 1996.
5.2.10 In the event that DAH shall have failed to provide its Due
Diligence Approval as specified in Section 5.2.8 or has failed to obtain the
approvals required by Section 5.2.9 by the times specified therein, this
Agreement shall thereupon be deemed a nullity and VOID AB INITIO without
further action by any party without any further liability by any party hereto
to any other party.
5.2.11 No Key Employee shall have indicated an intention to
terminate such Key Employee's employment with DAH subsequent to the Closing
5.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF AMP OR ▇▇▇▇▇▇▇▇. Each and
every obligation of AMP or ▇▇▇▇▇▇▇▇, as the case may be, to be performed on
or before the Closing Date shall be subject to the satisfaction on or before
the Closing Date of each of the following conditions.
Page 26
5.3.1 Except for such breaches as would not have a Material Adverse
Effect, each and every representation and warranty made by DAH shall have been
true in all respects when made and shall be true in all material respects as if
originally made on and as of the Closing Date.
5.3.2 All obligations and covenants of DAH to be performed under this
Agreement through, and including on, the Closing Date (including, without
limitation, all obligations which DAH would be required to perform at the
Closing if the transactions contemplated by this Agreement were consummated)
shall have been performed in all material respects.
5.3.3 No injunction shall have been entered by a court of competent
jurisdiction and be in effect which would restrain or prohibit the consummation
of the transactions contemplated by this Agreement.
5.3.4 A certificate of the Ohio and California Secretaries of State,
each dated as of a date not earlier than ten days prior to the Closing Date, as
to the good standing of DAH in such States.
5.3.5 AMP's Board of Directors shall have approved the transactions
contemplated by this Agreement.
5.3.6 Payment of the Initial Purchase Price on the Closing Date, by
wire transfer of immediate available funds, as determined in accordance with
Section 2.
5.3.7 An opinion of counsel for DAH, addressed to AMP and dated the
Closing Date, in the form of EXHIBIT D attached hereto.
5.3.8 The Assumption Agreement with respect to the Assumed
Liabilities, in the form of EXHIBIT E attached hereto.
5.4 ALLOCATION. For purposes of income tax reporting, the parties shall,
within one year following the Closing, enter into an agreement setting forth
that portion of the total purchase price which shall be allocated to each
portion thereof and agree that they shall report such allocation for all
purposes including for federal and state taxing purposes.
6. RESERVED
7. MISCELLANEOUS PROVISIONS.
7.1 NOTICE. All notices and other communications required or permitted
under this Agreement shall be deemed to have been duly given and made, if in
writing, and (i) if served by personal delivery to the party for whom intended
(which shall include overnight delivery by Federal Express or similar service),
(ii) or 3 business days after being deposited, postage prepaid, certified or
registered mail, return receipt requested, in the United States mail bearing the
address shown in this Agreement for, or such other address as may be designated
by writing hereafter by, such party, or (iii) if sent by telecopier to the
number showing in this Agreement for, or such other number as may be designated
in writing hereafter by, such party and immediately confirmed by sending a copy
of such notice by either method described in clause (i) or (ii) above.
7.2 POST-CLOSING ACCESS. At the earlier of (i) such time as there shall
have been a change in control of DAH or (ii) the expiration of seven (7) years
commencing on the Closing Date, or for such longer period as may be required by
applicable law, DAH shall retain all books, records and other data delivered to
it relating to the activities of Qualitronix prior to the Closing Date. DAH
shall grant access to such books,
Page 27
records and other data to AMP and its representatives during regular business
hours upon reasonable prior notice to the extent that such access is required by
AMP in connection with tax, regulatory or contractual matters, or otherwise in
order to permit AMP to comply with applicable law, or in order to defend against
any claim brought against AMP.
7.3 ARBITRATION. Any dispute, claim or controversy arising out of or
relating to this Agreement or breach thereof shall be decided by Arbitration
conducted in Los Angeles, California before a single arbitrator chosen by mutual
agreement of the parties. In the event that the parties are unable to agree upon
a single arbitrator after three submissions of proposed arbitrators, each party
shall select an arbitrator and such arbitrators shall choose a third arbitrator
and the matter shall then be heard and resolved by a panel of three arbitrators.
The arbitration proceeding shall be otherwise conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association and which
arbitration provides for reasonable discovery, including depositions,
interrogatories and production of documents. The decision of the arbitrator(s)
shall be final and binding on the parties and such decision shall be enforceable
as a judgment in any court of competent jurisdiction. The cost of arbitration
shall be shared equally between the parties.
7.4 ENTIRE AGREEMENT. This Agreement, the Supply Contracts, the Exhibits
and Schedules hereto, and the documents referred to herein and therein embody
the entire agreement and understanding of the parties hereto with respect to the
subject matter hereof, and supersede all prior and contemporaneous agreements
and understandings, oral or written, relative to said subject matter.
7.5 BINDING EFFECT: ASSIGNMENT. This Agreement and the rights and
obligations arising hereunder shall inure to the benefit of and be binding upon
AMP or ▇▇▇▇▇▇▇▇, as the case may be, its successors and permitted assigns, and
DAH, its respective successors and permitted assigns. Neither this Agreement nor
any of the rights, interest or obligations hereunder shall be transferred or
assigned (by operation of law or otherwise) by any of the parties hereto without
the prior written consent of the other party or parties except that DAH shall
have the right to assign, in whole or in part, its rights hereunder to one or
more affiliates of DAH, which in each case shall be a wholly-owned subsidiary of
DAH. Any transfer or assignment of any of the rights, interests or obligations
hereunder in violation of the terms hereof shall be void and of no force or
effect.
7.6 CAPTIONS. This Agreement and Section headings of this Agreement are
inserted for convenience only and shall not constitute a part of this Agreement
in construing or interpreting any provision hereof.
7.7 WAIVER: CONSENT. This Agreement may not be changed, amended,
terminated, augmented, rescinded or discharged (other than by performance), in
whole or in part, except by a writing executed by the parties hereto, and no
waiver of any of the provisions or conditions of this Agreement or any of the
rights of a party hereto shall be effective or binding unless such waiver shall
be in writing and signed by the party claimed to have given or consented
thereto. Except to the extent that a party hereto may have otherwise agreed in
writing, no waiver by that party of any condition of this Agreement or breach by
the other party of any of its obligations or representations hereunder or
thereunder shall be deemed to be a waiver of any other condition or subsequent
or prior breach of the same or any other obligation or representation by the
other party, nor shall any forbearance by the first party to seek a remedy for
any noncompliance or breach by the other party be deemed to be a waiver by the
first party of its rights and remedies with respect to such noncompliance or
breach.
7.8 NO THIRD PARTY BENEFICIARIES. Subject to Section 7.3, nothing herein,
expressed or implied, is intended or shall be construed to confer upon or give
to any person, firm, corporation or legal entity, other than the parties hereto,
any rights, remedies or other benefits under or by reason of this Agreement.
Page 28
7.9 COUNTERPARTS. This Agreement may be executed simultaneously in multiple
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
7.10 SEVERABILITY. With respect to any provision of this Agreement finally
determined by a court of competent jurisdiction to be unenforceable, AMP,
▇▇▇▇▇▇▇▇ and DAH hereby agree that such court or arbitrator(s) shall have
jurisdiction to reform such provision so that it is enforceable to the maximum
extent permitted by law, and the parties agree to abide by such court's or
arbitrator(s)' determination. In the event that any such provision of this
Agreement cannot be reformed, such provision shall be deemed to be severed from
this Agreement, but every other provision of this Agreement shall remain in full
force and effect.
7.11 GOVERNING LAW. This Agreement shall in all respects be constructed in
accordance with and governed by the laws of the State of California.
7.12 CLOSING COSTS AND TRANSFER TAXES.
7.12.1 DAH shall be responsible for all sales, use or other taxes
imposed by reason of the transfers of the Assets provided hereunder and any
deficiency, interest or penalty asserted with respect thereto; provided however,
DAH shall not be responsible for any taxes imposed on income or capital gain
assessed as a result of the transactions contemplated by this Agreement.
7.12.2 DAH shall pay all the fees and costs of recording or filing
all applicable conveyancing instruments.
7.12.3 EXPENSES. Each party shall, except as otherwise expressly
provided herein, bear all of the costs and expenses of such party's execution,
delivery and performance of this Agreement.
AGREED and entered into as of the last date set forth below:
AMP INCORPORATED ▇▇▇▇▇▇▇ AIRCRAFT HOLDINGS, INC.
By: /s/ J. Emay By: /s/ R. ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------- ----------------------------
Title: Chairman of the Board Title: CEO
------------------------ ------------------------
Date: 11/27/96 Date: 11/24/96
------------------------ ------------------------
THE ▇▇▇▇▇▇▇▇ CORPORATION
SOLELY WITH RESPECT TO SECTIONS 1.1.7 AND
3.2.10 AND PROVISIONS RELATING TO ▇▇▇▇▇▇▇▇
By:
----------------------------
Title:-------------------------
Date:--------------------------
Page 29
7.9 COUNTERPARTS. This Agreement may be executed simultaneously in multiple
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
7.10 SEVERABILITY. With respect to any provision of this Agreement finally
determined by a court of competent jurisdiction to be unenforceable, AMP,
▇▇▇▇▇▇▇▇ and DAH hereby agree that such court or arbitrator(s) shall have
jurisdiction to reform such provision so that it is enforceable to the maximum
extent permitted by law, and the parties agree to abide by such court's or
arbitrator(s)' determination. In the event that any such provision of this
Agreement cannot be reformed, such provision shall be deemed to be severed from
this Agreement, but every other provision of this Agreement shall remain in full
force and effect.
7.11 GOVERNING LAW. This Agreement shall in all respects be constructed in
accordance with and governed by the laws of the State of California.
7.12 CLOSING COSTS AND TRANSFER TAXES.
7.12.1 DAH shall be responsible for all sales, use or other taxes
imposed by reason of the transfers of the Assets provided hereunder and any
deficiency, interest or penalty asserted with respect thereto; provided however,
DAH shall not be responsible for any taxes imposed on income or capital gain
assessed as a result of the transactions contemplated by this Agreement.
7.12.2 DAH shall pay all the fees and costs of recording or filing
all applicable conveyancing instruments.
7.12.3 EXPENSES. Each party shall, except as otherwise expressly
provided herein, bear all of the costs and expenses of such party's execution,
delivery and performance of this Agreement.
AGREED and entered into as of the last date set forth below:
AMP INCORPORATED ▇▇▇▇▇▇▇ AIRCRAFT HOLDINGS, INC.
By: By:
---------------------------- ----------------------------
Title: Title:
---------------------------- ----------------------------
Date: Date:
---------------------------- ----------------------------
THE ▇▇▇▇▇▇▇▇ CORPORATION
SOLELY WITH RESPECT TO SECTIONS 1.1.7 AND
3.2.10 AND PROVISIONS RELATING TO ▇▇▇▇▇▇▇▇
By: /s/ [illegible]
----------------------------
Title: President
-------------------------
Date: November 29, 1996
-------------------------
Page 29
