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EXHIBIT 2.01
ASSET PURCHASE AGREEMENT
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TABLE OF CONTENTS
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ARTICLE 1
INTERPRETATION...................................................
1
1.1 Defined
Terms...................................................
1
1.2
Currency........................................................
12
1.3 Sections and
Headings........................................... 12
1.4 Number, Gender
and Persons...................................... 12
1.5 Accounting
Principles........................................... 12
1.6 Knowledge of
Vendor............................................. 13
1.7 Entire
Agreement................................................
13
1.8 Offering
Memorandum.............................................
14
1.9 Time of
Essence.................................................
14
1.10 Applicable
Law.................................................. 14
1.11 Successors and
Assigns.......................................... 14
1.12 Amendments and
Waivers.......................................... 14
1.13 Schedules and
Exhibits.......................................... 15
ARTICLE 2 PURCHASE AND SALE OF PURCHASED
ASSETS............................ 17
2.1 Purchased
Assets................................................ 17
2.2 Excluded
Assets.................................................
19
2.3 Non
Transferability.............................................
20
2.4 Purchasers'
Post-Closing Assistance............................. 21
2.5 Access to
Purchased Assets...................................... 21
2.6 Supplier
Claims.................................................
22
2.7 E-mail and
Website Query Forwarding During Transition Period.... 22
ARTICLE 3 PURCHASE
PRICE...................................................
22
3.1 Purchase
Price..................................................
22
3.2 Payment of
Purchase Price....................................... 22
3.3 Determination of
Closing Net Receivables........................ 23
3.4 Adjustment of
Closing Date Payment.............................. 25
3.5 Allocation of
Purchase Price.................................... 25
3.6 ETA
Election....................................................
26
3.7 Transfer Taxes,
etc............................................. 26
3.8 Accounts
Receivable Election....................................
26
3.9 Deferred Revenue
Obligations.................................... 27
3.10 Non-Competition
Agreements...................................... 27
ARTICLE 4 ASSUMPTION OF
LIABILITIES........................................ 27
4.1 Assumption of
Certain Liabilities by the Purchasers............. 27
4.2 Retained
Liabilities............................................
29
4.3 Product
Liability and Warranty Obligations......................
29
4.4 Payment for
Reimbursement of Certain Liabilities................ 31
4.5 Bulk Sales
Legislation.......................................... 32
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ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF
THE VENDOR..................... 33
5.1
Organization....................................................
33
5.2
Authorization...................................................
33
5.3 No Other
Agreements to Purchase.................................
33
5.4 No
Violation....................................................
33
5.5 Sufficiency of
Purchased Assets................................. 34
5.6 Title to
Personal and Movable Properly..........................
34
5.7 Real and
Immovable Property.....................................
35
5.8
Idem............................................................
35
5.9 Leased
Property.................................................
35
5.10 Inventories and
Machinery, Equipment............................ 36
5.11 Accounts
Receivable.............................................
36
5.12 Intellectual Property
Rights.................................... 36
5.13
Insurance.......................................................
38
5.14 No
Expropriation................................................
38
5.15
Contracts.......................................................
38
5.16 Compliance with Laws;
Governmental Authorization; Government
Programs........................................................
40
5.17 Consents and
Approvals.......................................... 40
5.18 Financial
Statements............................................ 41
5.19 Books and
Records............................................... 41
5.20 Absence of
Changes.............................................. 41
5.21 Non Arm's Length
Transactions................................... 42
5.22
Taxes...........................................................
43
5.23
Litigation......................................................
43
5.24
Residency.......................................................
43
5.25 GST/QST
Registration............................................
43
5.26
Environmental...................................................
44
5.27 Customers and
Suppliers......................................... 45
5.28 Employee
Plans..................................................
45
5.29 Collective
Agreements........................................... 46
5.30
Employees.......................................................
46
5.31 Employee
Accruals...............................................
46
5.32 Computer Systems,
Etc........................................... 47
5.33 Costs to Complete,
Etc.......................................... 47
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF
THE PARENT..................... 47
6.1
Organization....................................................
48
6.2
Authorization...................................................
48
6.3 No
Violation....................................................
48
6.4 Consents and
Approvals.......................................... 48
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF
THE PURCHASERS................. 48
7.1
Organization....................................................
49
7.2
Authorization...................................................
49
7.3 No
Violation....................................................
49
7.4 Consents and
Approvals.......................................... 49
7.5 Investment
Canada............................................... 49
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7.6 GST/QST
Registration............................................
50
ARTICLE 8 REPRESENTATIONS AND WARRANTIES OF
MDA............................ 50
8.1
Organization....................................................
50
8.2
Authorization...................................................
50
8.3 No
Violation....................................................
50
8.4 Consents and
Approvals.......................................... 51
ARTICLE 9 SURVIVAL OF COVENANTS,
REPRESENTATIONS AND WARRANTIES............ 51
9.1 Survival of
Covenants, Representations and Warranties........... 51
ARTICLE 10
COVENANTS.......................................................
52
10.1 Access to Purchased
Businesses and Purchased Assets............. 52
10.2 Delivery of Books and
Records................................... 53
10.3 Conduct of Purchased
Businesses and Other Matters Prior to
Closing.........................................................
53
10.4 Delivery of
Conveyancing Documents.............................. 55
10.5 Delivery of Vendor's
Closing Documentation...................... 55
10.6 Delivery of
Purchasers' Closing Documentation................... 55
10.7
Employees.......................................................
55
10.8 Employee
Plans..................................................
56
10.9 Non-Pension Benefit
Plans....................................... 57
10.10 Pension
Plans...................................................
58
10.11 Post Closing
Receipts........................................... 62
10.12 EMS
Name........................................................
62
10.13 Vendor Credit
Support........................................... 62
10.14 MDA
Guarantee...................................................
63
10.15 Parent
Guarantee................................................
63
10.16
Non-Solicitation................................................
63
ARTICLE 11 CONDITIONS OF
CLOSING........................................... 64
11.1 Conditions of Closing
in Favour of the Purchasers............... 64
11.2 Conditions of Closing
in Favour of the Vendor................... 66
11.3 Extension of Closing
Date....................................... 68
ARTICLE 12 CLOSING DATE AND TRANSFER OF
POSSESSION......................... 68
12.1
Transfer........................................................
68
12.2 Place of
Closing................................................
68
12.3 Further
Assurances..............................................
69
12.4 Risk of
Loss....................................................
69
ARTICLE 13
INDEMNIFICATION.................................................
69
13.1 Indemnification by the
Vendor................................... 69
13.2 Indemnification by the
Purchasers............................... 70
13.3 Threshold and
Limitations....................................... 70
13.4 Notice of
Claim................................................. 72
13.5 Direct
Claims...................................................
72
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13.6 Third Party
Claims.............................................. 72
13.7 Settlement of Third
Party Claims................................ 73
13.8
Co-operation....................................................
73
13.9
Exclusivity.....................................................
74
ARTICLE 14
MISCELLANEOUS...................................................
74
14.1
Notices.........................................................
74
14.2 Commissions,
etc................................................ 75
14.3
Consultation....................................................
76
14.4
Disclosure......................................................
76
14.5
Confidentiality.................................................
76
14.6 Assignment by
Purchaser......................................... 76
14.7 Reasonable Best
Efforts......................................... 77
14.8
Counterparts....................................................
77
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THIS AGREEMENT made the 28th day of
October, 2005,
BETWEEN:
MACDONALD, DETTWILER AND ASSOCIATES LTD., a corporation existing
under
the laws of Canada,
(hereinafter called "MDA"),
6457258 CANADA LTD., a corporation existing under the laws of
Canada,
(hereinafter called the "Real Estate Purchaser")
MDA SPACE INC., a corporation incorporated under the laws of
Canada,
(hereinafter called "Space Purchaser")
6457266 CANADA LTD., a corporation incorporated under the laws
of
Canada,
(hereinafter called "Electronics Purchaser")
EMS TECHNOLOGIES CANADA, LTD., a corporation existing under the
laws
of Canada,
(hereinafter called the "Vendor")
- and -
EMS TECHNOLOGIES, INC., a corporation existing under the laws of
the
State of Georgia,
(hereinafter called "Parent")
THIS AGREEMENT WITNESSES THAT in
consideration of the respective covenants,
representations, warranties and indemnities
of the parties herein contained and
for other good and valuable consideration
(the receipt and sufficiency of which
are acknowledged by each party), the
parties agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Defined Terms
For the purposes of this Agreement, unless
the context otherwise requires, the
following terms shall have the respective
meanings specified or referred to
below and grammatical variations of such
terms shall have corresponding
meanings:
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2
(a) "Act" means the Canada Business
Corporations Act as in effect on the
date hereof;
(b) "Affiliate" has the meaning given
to that term in the Act;
(c) "Agreement" means this Asset
Purchase Agreement including all
Schedules, Exhibits and Appendices to this Asset Purchase
Agreement
and all amendments made in writing by the parties hereto, "herein"
and
similar expressions mean and refer to this Agreement and not to
any
particular Article, Section, subsection, Schedule, Exhibit or
Appendix;
(d) "Annual Financial Statements"
means the unconsolidated unaudited
financial statements of the Purchased Businesses as at and for
the
financial year ended December 31, 2004, a copy of which is
annexed
hereto as Schedule 1;
(e) "APBO" means the estimated
accumulated post retirement benefit
obligations under the Retirement Plan;
(f) "Applicable Law" means:
(i) any domestic or
foreign statute, law (including common and civil
law), code, ordinance or regulation;
(ii) any judgment, order, writ, injunction, decision, ruling,
decree
or award; or
(iii) any Licence;
(iv) of any Governmental Authority, to the extent only that the
same
is legally binding on the person referred to in the context in
which the term is used, and for greater certainty includes the
Tax Act in respect of the Employee Plans that purport to be
qualified for a particular type of plan thereunder;
(g) "Associate" has the meaning given
to that term in the Act;
(h) "Assumed Contracts" means all
Contracts, other than Completed
Contracts, relating to the Purchased Businesses including
Operating
Contracts, leases of personal and immovable property, orders or
contracts for the provision of goods and services, distribution
and
agency agreements, employment agreements for the Employees,
Collective
Agreements to the extent provided hereunder;
(i) "Assumed Liabilities" has the
meaning set out in Section 4.1;
(j) "Benefit Plans" has the meaning
given to that term in Section 10.9;
(k) "Broadband Satellite Access
Technology" means the Technology used in
the Space Business with respect to space-based applications and
used
in the
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Vendor's Satellite Networks Division with respect to
terrestrial
applications, which is further described in and is the subject of
the
BSAT License
Agreement, which agreement is one of the Other
Agreements;
(l) "BSAT License Agreement" means the
agreement respecting the Vendor's
license to MDA of the Broadband Satellite Access Technology, which
is
attached hereto as Exhibit V;
(m) "Business Day" means any day,
other than a Saturday or a Sunday or
statutory holiday in any of Toronto, Ontario, Montreal, Quebec
or
Vancouver, B.C.;
(n) "Cash on Hand" means cash on hand
or in banks or other depositories,
term or time deposits and similar cash items including all
accrued
interest thereon;
(o) "Claim" means any claim, action,
suit or other proceeding, whether at
law or in equity, before or by any federal, provincial, state,
municipal or other governmental department, court, commission,
board,
bureau, agency or instrumentality, domestic or foreign, or before
or
by any arbitrator, arbitration board or mediator;
(p) "Closing" means the completion of
the purchase and sale of the
Purchased Assets contemplated by this Agreement which Closing shall
be
effective as of the opening of business on the Closing Date;
(q) "Closing Date" means, subject to
Section 11.3, the later of (i) two
Business Days following the satisfaction of the closing
conditions
identified in Sections 11.1(c), (d), (e) and (j) and 11.2(c), (d),
(e)
and (h); (ii) the Termination Date; or, (iii) such other date as
the
Vendor and MDA may mutually determine in writing;
(r) "Closing Date Payment" has the
meaning set out in Section 3.2;
(s) "Closing Net Receivables" has the
meaning set out in subsection
3.3(c);
(t) "Closing Net Receivables
Calculation Statement" has the meaning set
out in subsection 3.3(a);
(u) "Collective Agreements" means the
collective bargaining agreements
binding the Vendor in connection with employees of the
Purchased
Businesses all as listed and described in Schedule 8;
(v) "ComDev" means COMDEV
International Ltd., a company incorporated under
the laws of Canada;
(w) "Completed Contracts" means any
customer Contract of the Purchased
Businesses under which as at Closing all delivery and service
obligations (other than warranty obligations) of the Vendor have
been
satisfied or completed;
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(x) "Computer Systems Software" has
the meaning set forth in Section 5.32;
(y) "Computer Systems Hardware" has
the meaning as set forth in Section
5.32;
(z) "Contract" means any agreement,
indenture, contract, lease, deed of
trust, licence,
option, instrument or other commitment, whether
written or oral and shall include any open invoice, tender, bid,
quote
or order which has been accepted or which remains open for
acceptance
but for greater certainty does not include any Employee Plans;
(aa) "Credit
Support" has the meaning set out in Section 10.13;
(bb)
"Customer-Owned Assets" has the meaning set forth in Section
5.5;
(cc) "Division
Date" has the meaning given that term in Section
10.10(a)(i);
(dd)
"Electronics Business" means the Space Science and Optics
business
presently carried on by the Vendor at the Ottawa Premises and
managed
from the Ste-Anne Premises and the Search and Rescue
Transponder
product line presently developed or manufactured by the Vendor at
the
Ste-Anne Premises;
(ee)
"Electronics Employees" mean those Employees of the Vendor
currently
employed by the Electronics Business and those other Employees of
the
Vendor, if any, to be employed by Electronics Purchaser, as agreed
to
by ComDev and MDA written notice of which will be given to the
Vendor,
prior to the Closing Date;
(ff) "Employee
Plans" has the meaning set out in Section 5.28;
(gg) "Employees"
means all of those non unionized and unionized employees
of the Vendor who are employed in the Purchased Businesses
immediately
prior to the Time of Closing, excluding the Excluded Employees,
but
including part time and occasional employees, unionized employees
who
are laid off or are on disability, the LTD Employees (as defined
in
Section 10.7), employees receiving short-term disability payments
or
benefits and
employees on sick leave, maternity leave or parental
leave on the Closing Date, whether they have a right to return to
work
under Contract or Applicable Law;
(hh) "EMS IP"
means the Intellectual Property Rights and the Technology
owned by the Vendor, and currently or previously used in or
necessary
for the operation of, the Purchased Businesses immediately prior
to
the Closing Date (other than Intellectual Property Rights not
currently used in or necessary for the Purchased Businesses which
is
currently used in other businesses of the Vendor);
(ii)
"Encumbrance" means any encumbrance, lien, charge, hypothec,
priority,
pledge, mortgage, title retention agreement, security interest of
any
nature, adverse claim, exception, reservation, easement, right
of
occupation, any matter capable of registration against title or
any
Contract to create any of the foregoing
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5
but does not include contractual or legal restrictions to
transfer
assets (including contractual rights) without the consent of a
third
party or Governmental Authority;
(jj)
"Environmental Laws" has the meaning set out in subsection
5.26(a);
(kk) "ETA" means
Part IX of the Excise Tax Act (Canada), as amended from
time to time;
(ll) "Excluded
Assets" has the meaning set out in Section 2.2;
(mm) "Excluded
Employees" means Alan L. Haase and up to 6 Employees to be
designated by MDA in writing to the Vendor not less than 2
Business
Days prior to the Closing Date and for the greater certainty
any
SatNet Employees;
(nn) "Excluded
Liabilities" has the meaning set out in Section 4.2;
(oo) "Expert"
has the meaning set out in subsection 3.3(d);
(pp) "Export
Laws" has the meaning set out in Section 5.16;
(qq) "Financial
Statements" means the Annual Financial Statements and the
Interim Financial Statements;
(rr)
"Governmental Authority" means any domestic or foreign
government,
whether federal, provincial, state, territorial, local,
regional,
municipal, or other political jurisdiction, and any agency,
authority,
instrumentality, court, tribunal, board, commission, bureau,
arbitrator, arbitration tribunal or other tribunal, or any
quasi
governmental or other entity, insofar as it exercises a
legislative,
judicial, regulatory, administrative, expropriation or taxing power
or
function of or pertaining to government;
(ss) "Grievance
Claim" means those grievances identified in Section 1.1(ss)
of Schedule 31;
(tt) "Grievance
Claim Liabilities" has the meaning set out in Section
4.1(h);
(uu) "GST" means
all taxes payable under the ETA or under any provincial
legislation similar to the ETA, and any reference to a specific
provision of the ETA or any such provincial legislation shall refer
to
any successor provision thereto of like or similar effect;
(vv) "Hazardous
Substances" has the meaning set out in subsection
5.26(a)(i);
(ww) "Holdings"
means EMS Investment Holdings, Inc., a company incorporated
under the laws of the State of Georgia;
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(xx) "Holdings
Shares" means the 110 shares of common stock and 990
preferred shares of Holdings that are issued and outstanding;
(yy)
"Indemnified Party" has the meaning set out in Section 13.4;
(zz)
"Indemnifying Party" has the meaning set out in Section 13.4;
(aaa)
"Intellectual Property Rights" means any and all rights,
whether
registered or unregistered, existing from time to time in any
jurisdiction throughout the world under patent law, copyright
law,
moral rights law, trade-secret law, semiconductor chip protection
law,
trademark law, unfair competition law, or other similar laws or
rights
throughout the world in, to, or arising out of, or associated with
any
of the following: (i) trade secrets, proprietary information, Know
How
and Technology, including ideas, research and development,
formulas,
compositions, manufacturing and production processes and
techniques,
technical data, designs, drawings, drawing family trees, source
control documents and other documentation, specifications, pricing
and
cost information, and business and marketing plans and proposals
that
constitute trade secrets under Applicable Law (collectively,
"Trade
Secrets"); (ii) works of authorship, copyrights, mask works,
copyright
and mask work registrations and applications (collectively,
"Copyrights"); (iii) industrial designs and any registrations
and
applications therefor (collectively, "Industrial Designs"); (iv)
trade
names, logos, trademarks and service marks; trademark and service
mark
registrations and applications (collectively, "Trademarks");
(v)
patents, applications for patents wherever registered (the
"Patents")
(vi) Computer Software, databases and data collections
(including
knowledge databases, customer lists and customer databases)
(collectively, "Software"); and (vii) translations,
adaptations,
derivative works, and combinations thereof;
(bbb) "Interim
Financial Statements" means the unconsolidated unaudited
financial statements of the Purchased Businesses as at and for the
8
month period ended July 2, 2005, a copy of which is annexed hereto
as
Schedule 2;
(ccc)
"Inventory" has the meaning set out in subsection 2.1(d);
(ddd) "Know-How"
means technical knowledge, engineering knowledge,
unpatentable inventions, trade secrets, manufacturing secrets,
secret
processes, formulae, manufacturing procedures, methods, data
and
current and accumulated experience resulting from scientific
research,
practical experience and otherwise that are not fixed in any
tangible
medium of expression;
(eee) "Labour
Code" means the Labour Code R.S.Q, chapter C-27, as amended
from time to time;
(fff) "Leased
Property" has the meaning set out in Section 5.7;
(ggg) "Leases"
has the meaning set out in Section 5.9;
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(hhh) "Licences"
has the meaning set out in Section 5.16;
(iii) "Licensed
IP" means the Intellectual Property Rights currently
licensed to the Vendor from third parties, and currently or
previously
used in or necessary for, (other than Intellectual Property Rights
not
currently used in or necessary for the Purchased Businesses which
is
currently used in other businesses of the Vendor) the operation of
the
Purchased Businesses immediately prior to the Closing Date;
(jjj) "Losses"
means, in respect of any matter, all claims, demands,
proceedings, losses, damages, liabilities, deficiencies, costs
and
expenses (including, without limitation, all third party related
costs
including but not limited to consulting, transportation, handling
and
all legal and other professional fees and disbursements,
interest,
penalties and amounts paid in settlement) arising directly as a
consequence of such matter less in all cases any insurance received
or
receivable in respect thereof;
(kkk) "Material
Adverse Effect" means any change or effect that is
materially adverse to the financial condition, properties,
assets,
operations, or business of the Purchased Businesses taken as a
whole
which could reasonably be expected to reduce the fair market value
of
the Purchased Businesses by $400,000 or more, but excluding (i)
changes or effects affecting the satellite systems industry as a
whole
or resulting from general economic and market conditions, (ii)
any
delay, failure or inability by the Vendor to acquire new customers
or
prospective orders, including, without limiting the generality of
the
foregoing, the failure or inability to execute contracts and
agreements currently under discussion or negotiation, or (iii)
any
loss of customers due to a pre-existing competitive
relationship
between the customer and MDA or a Purchaser;
(lll) "Material
Contracts" has the meaning set out in Section 5.15;
(mmm) "ORST"
means all taxes payable under the Retail Sales Tax Act Ontario
and any reference to any specific provision of the Retail Sales
Tax
Act Ontario shall refer to any successor provision thereto of like
or
similar effect;
(nnn) "Operating
Contracts" mean any customer Contract of the Purchased
Businesses under which all delivery and service obligations have
not
been completed or satisfied;
(ooo) "Other
Agreements" means the Release, the Non-Competition Agreement,
the Confidentiality Agreement referred to in Section 14.5, the
Amendment to the Radarsat-2 Territorial License Agreement and
Sub-License Agreement, the Amendment to the Radarsat-2
Subcontract,
the Ottawa Premises Sublease and all documents, certificates
and
instruments delivered by any of the parties at Closing;
(ppp) "Other IP"
means the Intellectual Property Rights and Technology
(other than EMS IP and Licensed IP) developed by the Vendor for
any
third party or for the
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8
Purchased Businesses and which may be used by the Vendor in the
Purchased Businesses;
(qqq) "Ottawa
Premises" means the portion of the premises located on the
2nd floor at 1725 Woodward Drive, Ottawa, Ontario as demised and
set
out in the Ottawa Premises Sublease;
(rrr) "Ottawa
Premises Sublease" means the sub-lease by the Vendor to the
Electronics Purchaser for the Ottawa Premises substantially upon
the
terms set out in Exhibit IV;
(sss) "Pension
Plans" means the following pension plans of the Vendor: (1)
EMS Technologies Canada, Ltd. Pension Plan for Employees
Represented
by C.A.W. Local 188; (2) EMS Technologies Canada, Ltd. Pension
Plan
for Employees Represented by C.E.P. Local 508; (3) EMS
Technologies
Canada, Ltd. Pension Plan for Quebec Non-Represented Employees;
and
(4) EMS Technologies Canada, Ltd. Pension Plan for Employees
Represented by the Space Systems Engineers and Scientists
Association;
(ttt) "Pension
Regulator" means each Governmental Authority with
jurisdiction over the applicable Pension Plan;
(uuu) "Permitted
Encumbrances" means:
(i) servitudes,
easements, restrictions, rights of way and other
similar rights in real property or any interest therein,
provided
the same are not of such nature as to materially adversely
affect
the use of the property subject thereto;
(ii) undetermined or inchoate liens, charges and privileges
incidental
to current construction or current operations for amounts which
are not due or delinquent;
(iii) statutory liens, charges, adverse claims, security interests
or
encumbrances of any nature whatsoever claimed or held by any
governmental authority that have not at the time been filed or
registered against the title to the asset or served upon the
Vendor pursuant to law or that relate to obligations not due or
delinquent;
(iv) assignments of insurance provided to landlords (or their
mortgagees) pursuant to the terms of any lease, and liens or
rights reserved in any lease for rent or for compliance with
the
terms of such lease;
(v) security given in
the ordinary course of the Purchased Businesses
to any public utility, municipality or government or to any
statutory or public authority in connection with the operations
of the Purchased Businesses, other than security for borrowed
money;
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9
(vi) the reservations in any original grants from the Crown of
any
real property or interest therein and statutory exceptions to
title, which do not materially detract from the value of the
real
property concerned or materially impair its use in the
operation
of the Purchased Business; and
(vii) the Encumbrances described in Schedule 13;
(vvv) "PIPEDA"
means the Personal Information Protection and Electronics
Document Act (Canada);
(www) "Prime
Rate" means the annual variable rate of interest quoted or
published from time to time by Royal Bank of Canada (Main Branch)
at
its main branch in Toronto, Ontario as the "prime rate" of
interest
charged by it for Canadian dollar commercial loans made in Canada
and
for the purposes of this Agreement the "Prime Rate" shall vary,
upwards or downwards, as the case may be, at the same time and in
the
same amount as the said "prime rate" so varies;
(xxx) "Pro Forma
Net Receivables Statement" has the meaning set out in
Section 3.3(a);
(yyy) "Purchase
Price" has the meaning set out in Section 3.1;
(zzz) "Purchased
Businesses" means the Space Business and the Electronics
Business taken together and "Purchased Business" means any of the
two
separately;
(aaaa)
"Purchased Assets" has the meaning set out in Section 2.1;
(bbbb)
"Purchasers" means Real Estate Purchaser, Electronics Purchaser
and
Space Purchaser, collectively and "Purchaser" means any one of
them;
(cccc) "PWGCS"
means Public Works Government Services Canada;
(dddd) "QST"
means all taxes payable under the Act respecting the Quebec
Sales Tax and any reference to any specific provision of the
Act
respecting the Quebec Sales Tax shall refer to any successor
provision
thereto of like or similar effect;
(eeee)
"Radarsat-2 Subcontract" means the Radarsat-2 SAR Payload
Subcontract agreement #SC28682RC dated September 1, 1998, as
amended;
(ffff)
"Radarsat-2 Subcontract In-Orbit Incentive" means those
payments
specified in paragraph 6.7.1.1 of the Radarsat-2 Subcontract;
(gggg)
"Radarsat-2 Territorial License Agreement" means the Radarsat-2
territorial license agreement dated May 2, 2002 between the Vendor
and
MDA;
(hhhh)
"Radarsat-2 Territorial Sub-License Agreement" means the
Radarsat-2
territorial sublicense agreement dated May 2, 2002 between EMS,
RADARSAT International Inc. and MDA;
<PAGE>
10
(iiii)
"Radarsat-2 Warranties" means the obligations of the Vendor
pursuant
to (i) Section 12.4 of the Radarsat-2 Subcontract; and (ii)
pursuant
to Section 12.5(d) of the Radarsat-2 Subcontract to the extent as
set
out in Section 12.4 of the Radarsat-2 Subcontract with respect to
work
performed or acts or omissions taken by or on behalf of the
Vendor
prior to Closing;
(jjjj) "Real
Property" means the Ste-Anne Premises, the legal description
of which is set forth on Schedule 3;
(kkkk)
"Receivables" means all current trade receivables, current
unbilled
receivables and deferred revenue of the Purchased Businesses as at
the
Closing Date but for greater certainty excluding any long-term
accounts receivables or long-term unbilled receivables;
(llll)
"Retirement Plan" means the Post-Retirement Benefits Plan
pursuant
to which the Vendor provides employees with post retirement
benefits;
(mmmm)
"Retirement Plan Participants" means all persons who are entitled
to
receive benefits, whether now or in the future, under the
Retirement
Plan including Employees, Excluded Employees and persons who
were
formerly employees of the Purchased Businesses but excluding
any
SatNet Employees and SatNet Former Employees;
(nnnn) "SatNet
Employees" means the active and disabled employees of the
Satellite Networks Division of the Vendor, including employees
on
lay-off with recall rights under collective agreements applicable
to
such employees, as at the Division Date;
(oooo) "SatNet Former
Employees" means, as at the Division Date, the former
employees of the Satellite Networks Division of the Vendor,
including
retirees, and, if applicable, surviving spouses of such employees,
who
terminated employment with the Vendor on or after April 11, 2004
and
who immediately prior to the Division Date continued to have
rights
under the Pension Plans;
(pppp)
"SkyBridge" means SkyBridge Limited Partnership, a limited
partnership formed
under the laws of the State of Delaware;
(qqqq)
"SkyBridge LPA" means the Third Amended and Restated Agreement
of
Limited Partnership of SkyBridge dated December 20, 1999 as the
same
may be amended, replaced or restated from time to time;
(rrrr)
"SkyBridge Units" means the units in SkyBridge owned by
Holdings;
(ssss) "Space
Business" means the business presently carried on by the
Vendor through its Space & Technology/Montreal division,
which
business is carried on at or from the Vendor's Ste-Anne Premises
and
consisting primarily of the design, manufacture and supply of
space
systems, antennas and electronic
<PAGE>
11
products including, components for civil, commercial and
defence
satellites other than the Electronics Business;
(tttt)
"Statutory Plans" means statutory benefit plans which the Vendor
is
required to participate in or comply with, including the Canada
and
Quebec Pension Plans and plans administered pursuant to
applicable
health tax, workplace safety insurance and employment insurance
legislation;
(uuuu) "Ste-Anne
Premises" means the real property and buildings known
municipally as 21025 Trans Canada Highway, Montreal, Quebec, H9X
3R2;
(vvvv) "Supplier
Claims" has the meaning set out in Section 2.2(i);
(wwww) "Tax Act"
or any reference to a specific provision thereof means the
Income Tax Act (Canada);
(xxxx) "Taxes"
means taxes, duties, fees, premiums, assessments, imposts,
levies and other charges of any kind whatsoever imposed by any
Governmental Authority, including all interest, penalties,
fines,
additions to tax or other additional amounts imposed in respect
thereof (including those levied on, or measured by, or referred to
as,
income, gross receipts, profits, capital, transfer, land
transfer,
sales, goods and services, harmonized sales, use, valued added,
excise, stamp, withholding, premium, business, franchising,
property,
employer health, payroll, employment, health, social services,
education and social security taxes, surtaxes, customs duties
and
import and export taxes, licence, franchise and registration fees
and
employment insurance, health insurance and Canada, Quebec, Ontario
and
other government pension plan premiums or contributions), and
"Tax"
has a corresponding meaning;
(yyyy) "Tax
Return" means all returns, declarations, designations, forms,
schedules, reports and other documents of every nature
whatsoever
required to be filed with any Governmental Authority with respect
to
any Taxes;
(zzzz)
"Technology" means all tangible embodiments of Intellectual
Property
Rights, technical information, business information and
software,
systems, source control documents, files, records, databases,
data,
drawings, artwork, designs, displays, audio-visual works,
devices,
hardware, apparatuses, documentation, manuals, specifications,
flow
charts, hardware models, dedicated test systems, supplier
lists,
equipment lists, electronic and other data, and other tangible
embodiments of, or materials describing or disclosing, technical
or
business data, concepts, recipes, formulas, operating
procedures,
Know-How, show-how, techniques, Trade Secrets, inventions
(whether
patentable or unpatentable), algorithms, formulae, processes,
routines, databases, works of authorship and the like;
(aaaaa)
"Termination Date" means December 31, 2005;
<PAGE>
12
(bbbbb) "Time of
Closing" means 10:00 a.m. (Toronto time) on the Closing
Date, or such other time on the Closing Date as the Vendor and MDA
may
mutually determine in writing;
(ccccc) "Trade
Payables" means all current accounts payable and current
accrued expenses for the Purchased Businesses as at the Closing
Date
but for greater certainty excluding any long-term payables and
any
payables with respect to any Excluded Liabilities;
(ddddd)
"Transferred Employees" has the meaning set out in Section
10.7(a);
and
(eeeee) "Vendor
Group" has the meaning set out in Section 10.13.
1.2 Currency
Unless otherwise indicated, all dollar
amounts in this Agreement are expressed
in Canadian funds.
1.3 Sections and Headings
The division of this Agreement into
Articles, Sections and subsections and the
insertion of headings are for convenience
of reference only and shall not affect
the interpretation of this Agreement.
Unless otherwise indicated, any reference
in this Agreement to an Article, Section,
subsection or Schedule or Exhibit
refers to the specified Article, Section or
subsection of or Schedule or Exhibit
to this Agreement.
1.4 Number, Gender and Persons
In this Agreement, words importing the
singular number only shall include the
plural and vice versa, words importing
gender shall include all genders and
words importing persons shall include
individuals, corporations, partnerships,
associations, trusts, unincorporated
organizations, governmental bodies and
other legal or business entities of any
kind whatsoever.
1.5 Accounting Principles
Any reference in this Agreement to
generally accepted accounting principles
refers to generally accepted accounting
principles that have been established in
the United States of America applied on a
basis consistent with those issued in
the Annual Financial Statements. It is
understood that the financial statements
of the Purchased Businesses have been
presented on the basis that the Purchased
Businesses are a "discontinued operation"
as defined under generally accepted
accounting principles that have been
established in the United States of America
and accordingly, among other things, (i)
depreciation and amortization are not
expensed; (ii) income tax expense, as
reported in the Annual Financial
Statements, represents only the Purchased
Businesses' estimated pro-rata share
of the Vendor's large corporation tax
(provincial and federal), which is based
on statutorily defined capital and not on
taxable income/(loss) and (iii) the
Annual Financial Statements do not include
the effect of any income tax expense
or benefit based on the taxable
income/(loss) of the Purchased Businesses,
because Vendor has retained all tax
benefits or liabilities of the Purchased
Businesses through the Closing Date.
<PAGE>
13
1.6 Knowledge of Vendor
Where any representation or warranty
contained in this Agreement is expressly
qualified by reference to the knowledge of
the Vendor or words to similar
effect, it shall be deemed to refer solely
to the actual knowledge of the
following individuals, in all cases after
such individuals have made due inquiry
of their files and their immediate
subordinates.
Alfred G. Hansen
Don T. Scartz
Gary B. Shell
William S. Jacobs
Phillipe Quenneville
Francois Bastien
Alan L. Haase
Richard Cox
Gareth Lewis
Marc Donato
Tony McDonach
Brian MacKay
Mike Symonds
1.7 Entire Agreement
This Agreement together with the Other
Agreements constitute the entire
agreement between the Parties pertaining to
the subject matter of this Agreement
and the Other Agreements and supersede all
prior correspondence, agreements,
negotiations, discussions and
understandings, written or oral except to the
extent that any of the Other Agreements is
an amendment to an existing
agreement. Except as specifically set out
in this Agreement or the Other
Agreements, there are no representations,
warranties, conditions or other
agreements or acknowledgements, whether
direct or collateral, express or
implied, written or oral, statutory or
otherwise (including without limitation
representations or warranties regarding
merchantability, suitability, fitness
for a particular purpose or absence of
defects, latent or patent), that form
part of or affect this Agreement or the
Other Agreements or which induced any
party to enter into this Agreement or the
Other Agreements.
No reliance is placed on any
representation, warranty, opinion, advice or
assertion of fact made either prior to,
concurrently with, or after entering
into, this Agreement or any Other
Agreement,
<PAGE>
14
or any amendment or supplement thereto, by
any party to this Agreement or any
Other Agreement or its representatives, to
any other party or its
representatives, except to the extent the
representation, warranty, opinion,
advice or assertion of fact has been
reduced to writing and included as a term
in this Agreement or that Other Agreement,
and none of the parties to this
Agreement or any Other Agreement has been
induced to enter into this Agreement
or any Other Agreement or any amendment or
supplement by reason of any such
representation, warranty, opinion, advice
or assertion of fact. There shall be
no liability, either in tort or in
contract, assessed in relation to the
representation, warranty, opinion, advice
or assertion of fact, except as
contemplated in this Agreement.
1.8 Offering Memorandum
The representations and warranties
contained in this Agreement supersede in its
entirety the Confidential Information
Memorandum (the "Memorandum") provided to
MDA by Needham & Company, Inc. The
Memorandum is not intended to be an "offering
memorandum" within the meaning of
Applicable Laws and neither MDA nor any
Purchaser shall have any remedy for any
misrepresentation or omission therein,
whether or not material, except to the
extent that the state of facts giving
rise to such misrepresentation or omission
also constitutes a breach of this
Agreement in which case MDA's and the
Purchasers' sole remedies against the
Vendor or the Parent shall be the remedies
available under this Agreement.
1.9 Time of Essence
Time shall be of the essence of this
Agreement.
1.10 Applicable Law
This Agreement shall be construed,
interpreted and enforced in accordance with,
and the respective rights and obligations
of the parties shall be governed by,
the laws of the Province of British
Columbia and the federal laws of Canada
applicable therein, and each party
irrevocably and unconditionally submits to
the non exclusive jurisdiction of the
courts of such province and all courts
competent to hear appeals therefrom.
1.11 Successors and Assigns
This Agreement shall enure to the benefit
of and shall be binding on and
enforceable by the parties and their
respective successors and permitted
assigns. Subject to Section 14.6, no party
may assign any of its rights or
obligations hereunder without the prior
written consent of in the case of the
Vendor or the Parent, MDA, and in the case
of the Purchasers or MDA, the Vendor,
except that the Electronics Purchaser and
MDA may assign their rights and their
obligations relating to the Electronics
Purchaser to ComDev.
1.12 Amendments and Waivers
No amendment or waiver of any provision of
this Agreement shall be binding on
any party unless consented to in writing by
such party. No waiver of any
provision of this Agreement shall
constitute a waiver of any other provision,
nor shall any waiver constitute a
continuing waiver unless otherwise provided.
<PAGE>
15
1.13 Schedules and Exhibits
The following Schedules and Exhibits are
attached to and form part of this
Agreement:
Schedule 1 - Annual Financial Statements
Schedule 2 - Interim Financial Statements -
July 2/05
Schedule 3 - Owned Real or Immoveable
Property
Schedule 4 - Machinery and Equipment
Schedule 5 - Vehicles
Schedule 6 - Customer Owned Assets
Schedule 7 - Certain Contract Defaults
Schedule 8 - Employee Matters
Schedule 9 - Licences and Permits
Schedule 10 - Intellectual Property
Rights
Schedule 11 - Allocation of Purchase
Price
Schedule 12 - Location of Assets
Schedule 13 - Permitted Encumbrances
Schedule 14 - Insurance Policies
Schedule 15 - Legal and Regulatory
Proceedings
Schedule 16 - Regulatory Consents
Schedule 17 - Third Party Consents
Schedule 18 - Environmental Matters
Schedule 19 - Major Customers, Suppliers
and Strategic Partners
Schedule 20 - Excluded Assets
Schedule 21 - Material Changes
Schedule 22 - Contract Consents
Schedule 23 - Exceptions to Generally
Accepted Accounting Principles
<PAGE>
16
Schedule 24 - Pro Forma Net Receivables
Statement
Schedule 25 - Credit Support
Schedule 26 - Exceptions to Compliance with
Laws
Schedule 27 - Non-Arm's Length
Contracts
Schedule 28 Purchasers Government
Consents
Schedule 29 - Vendor Government
Consents
Schedule 30 - Radarsat-2 - Payload Delivery
Matters
Schedule 31 - Grievance Claim Liabilities
(4.1(h)) - listing employees
Schedule 32 - Material Contracts
Schedule 33 - Employees
Schedule 34 - Computer Systems Hardware and
Software, Etc.
Schedule 35 - Pension Plan Funding
Position, etc.
Schedule 36 - Claims Excluded from Supplier
Claims
Schedule 37 - Estimated Cost to Complete
Report
(June 30/05 to September 30/05)
Schedule 38 - Permitted Encumbrances to be
Released
Exhibit I - Non-Competition
Agreement
Exhibit II - Release re Radarsat-2
Exhibit III - Assignment and Amendment
Agreements re
Radarsat-2
Territorial License
and Sub-Sublicense (3)
Exhibit IV - Terms of Ottawa Premises
Sublease
Exhibit V - BSAT License
Exhibit VI - Amendment to Radarsat-2
Subcontract
Disclosure of information on any Schedule
shall be deemed to be disclosure of
such information on all other relevant
Schedules provided such information
clearly identifies the nature of the
information in a manner that its relevance
to such other schedule(s) would be apparent
to a reader thereof. Inclusion of
specific information on any Schedule shall
not constitute or be
<PAGE>
17
deemed to constitute any admission that
such information is material or is
required to be so disclosed.
ARTICLE 2
PURCHASE AND SALE OF PURCHASED ASSETS
2.1 Purchased Assets
Subject to the provisions of this
Agreement, the Vendor agrees to sell, assign
and transfer to the Purchasers and the
Purchasers agree to purchase from the
Vendor, effective as of the Closing, all
right, title and interest of the Vendor
in and to all of the property and assets
used in connection with, and necessary
for, the Purchased Businesses (other than
the Excluded Assets), whether real or
personal, tangible or intangible, of every
kind and description and wheresoever
situated, as a going concern (collectively,
the "Purchased Assets"), including
without limitation:
(a) Real Property. All real or
immoveable property, together with the
buildings, structures, improvements and appurtenances situate
thereon
including, without limitation, the Real Property described in
Schedule
3;
(b) Buildings, Machinery and
Equipment. All buildings, structures,
machinery, equipment, fixtures, furniture, furnishings, parts,
tooling
moulds, dies, jigs or patterns and other fixed assets,
including,
without limitation, the machinery and equipment described in
Schedule
4;
(c) Vehicles. All trucks, cars and
other vehicles (owned or leased),
including, without limitation, the vehicles described in Schedule
5;
(d) Inventories. All inventories,
including, without limitation, raw
materials, work in process, finished goods and replacement
parts
(collectively, the "Inventory");
(e) Accounts Receivable. All accounts
receivable, trade accounts, notes
receivable, book debts and other debts due or accruing due to
the
Vendor and the benefit of all security for such accounts, notes
and
debts, including without limitation the Radarsat-2 Subcontract
In-Orbit Incentive and the receivable from MDA;
(f) Prepaid Expenses. All prepaid
expenses of the Purchased Businesses
(other than those related to the Excluded Assets);
(g) Contracts. All rights and benefits
under the Assumed Contracts and all
rights and benefits under all Completed Contracts;
(h) Licences and Permits. All Licences
used in the Purchased Businesses to
the extent that they may be transferred with or without consent to
the
extent provided hereunder, including to the extent so
transferable,
all export permits and licenses and those described in Schedule
9;
(i) Intellectual Property Rights. All
EMS IP and all other intellectual
property licensed from third parties or used in the Purchased
Businesses, immediately
<PAGE>
18
prior to the Closing Date (excluding the Broadband Satellite
Access
Technology, licensed to the Space Purchaser under the BSAT
License
Agreement) and all Other IP and Licensed IP to the extent of
the
Vendor's rights in such assets;
(j) Computer Systems Hardware and
Computer Software. All Computer Systems
Hardware, and Computer Software including all rights under
licences
and other agreements or instruments relating thereto, subject
to
Section 2.3(a);
(k) Books and Records. All books of
account, Tax records, personnel
records, sales and purchase records, inventory records, customer
and
supplier lists, lists of potential customers, referral sources,
research and development reports and records, price lists and
catalogues, sales literature and advertising material,
production
reports and records, manufacturing data, equipment logs,
operating
guidelines and manuals, employee manuals, business reports, plans
and
projections and all other documents, files, correspondence and
other
information (whether in writing, printed, electronic or computer
print
out form) used by the Purchased Businesses but excluding any
such
books, records and lists prepared in connection with this
transaction
or any other proposed sale of the Purchased Businesses;
(l) Attorney Work Product. All notes,
memoranda, correspondence or similar
material in the possession of the Vendor reflecting the legal
conclusions, recommendations or work product of lawyers for the
Vendor
or the Parent in respect of active files to the extent the same
relates to or arises out of the Purchased Assets, the Assumed
Liabilities or any Claims in respect thereof including any opinions
or
advice on any Intellectual Property Rights (other than attorney
work
produced and prepared in connection with this transaction or any
other
proposed sale of the Purchased Businesses or in connection with
disputes involving MDA);
(m) Pension Assets. All rights of the
Vendor, if any, to (i) amounts held
under any Pension Plans which are in excess of the amounts required
at
Closing for the beneficiaries under the Pension Plans and (ii)
all
surpluses under the Pension Plans except as provided in Section
10.10;
and
(n) Goodwill. All goodwill of the
Purchased Businesses, together with the
exclusive right for the Purchasers to represent themselves,
respecting
carrying on the applicable Purchased Business in succession to
the
Vendor and the right to use any words indicating that the
applicable
Purchased
Business is carried on (subject to Section 10.15 hereof).
Prior to the Closing, MDA and the Vendor
shall determine a division of the
Purchased Assets as set forth in (b), (c),
(d), (e), (f), (g), (h), (i), (j),
(k), (l), (m) and (n) above between those
to be purchased by Space Purchaser and
those to be purchased by Electronics
Purchaser. The Real Property and the items
described in (a) will be purchased by the
Real Property Purchaser. The Space
Purchaser will purchase the item in
(m).
<PAGE>
19
2.2 Excluded Assets
Notwithstanding Section 2.1, the Purchased
Assets shall not include any of the
following property and assets
(collectively, the "Excluded Assets"):
(a) all Cash on Hand;
(b) all liabilities and obligations
owing by any other division of the
Vendor or of any of its Affiliates to the Purchased Businesses
existing, accrued or accruing due at the Time of Closing for
borrowed
money;
(c) all Tax instalments paid by the
Vendor and the right to receive any
tax credit, rebate or any refund of Taxes paid by the Vendor
accrued
or paid in respect of any period preceding the Closing
including,
without limitation, any tax credit (including investment tax
credits
and Quebec labour tax credits) or any manufacturing and
processing
profits tax reduction or refund;
(d) all rights of the Vendor to use
the name "EMS" or "EMS Technologies"
or any word or name containing such phrases or words (including
without limitation, all logos, trade or brand names, business
names,
trade marks, trade mark registrations and applications, service
mark
registrations and applications and copyrights containing or in
respect
of such words or phrases) except to the extent set forth in
Section
10.15;
(e) subject to Section 12.4, insurance
policies of the Vendor relating to
the Purchased Business and the Purchased Assets and all rights
in
connection therewith, including, without limitation, any rights
to
outstanding claims thereunder or refunds of insurance premiums;
(f) all rights of the Vendor to any
refunds of workers' compensation
payments in respect of the period before the Closing Date;
(g) any employment agreement or
contract, whether written or oral, with
respect to the Excluded Employees;
(h) the Radarsat-2 Territorial License
Agreement and the Radarsat-2
Territorial Sub-License Agreement;
(i) except for the matters set forth
on Schedule 36, all Claims, including
but not limited to claims for late delivery penalties or
warranty
repair work conducted to the Closing Date, against suppliers to
the
Vendor under the Radarsat-2 Program in respect of any period
before
the Closing Date (the "Supplier Claims");
(j) the Holding Shares and the
Skybridge Units;
(k) rights to Uniform Resource
Locators other than the access as provided
in Section 2.7, Web site addresses and domain names;
<PAGE>
20
(l) the Technology licensed to MDA
Space under the BSAT License Agreement;
(m) all constating documents, minute
books and shareholder records of the
Vendor;
(n) all rights of the Vendor under
this Agreement and the Other
Agreements; and
(o) the assets and Contracts listed on
Schedule 20.
2.3 Non Transferability
(a) Subject to subsections 2.3(b) and
2.3(c), to the extent that any
Purchased Asset is not capable of being sold, assigned,
transferred,
delivered or subleased without the consent or waiver of any person,
or
if such sale, assignment, transfer, delivery or sublease, or
attempted
sale, assignment, delivery or sublease would constitute a
breach
thereof or a violation of any law, statute, ordinance,
regulation,
rule having the force of law, judgment, decree, order, writ,
injunction or award, this Agreement shall not constitute a
sale,
assignment, transfer, delivery or sublease thereof until such
consent
or waiver, if applicable, is received, but instead shall be dealt
with
as herein provided.
(b) The Vendor shall diligently
attempt to obtain (and the Purchasers
shall diligently cooperate with the Vendor), on or before the
Closing
Date and thereafter as required, the consents and waivers referred
to
in subsection 2.3(a) and to resolve the impediments to the
sale,
assignment, transfer, delivery or sublease referred to in
subsection
2.3(a) and to obtain any other consents and waivers necessary
to
convey to the applicable Purchaser any of the Purchased Assets
provided that in no event shall the Vendor be required to incur
any
financial cost or burden (other than incidental costs) to obtain
such
consents or waivers or resolve such impediments. The Purchasers
shall
pay and be responsible for all costs charged by third parties
to
approve any such assignment or transfer including without
limitation,
fees for the transfer of Licenses held by third parties.
(c) The Vendor shall have no liability
to the Purchasers if any of the
consents and waivers referred to in subsection 2.3(a) are not
obtained
by Closing. To the extent that the consents and waivers referred to
in
subsection 2.3(a) are not obtained by the Vendor, or until the
impediments to the sale, assignment, transfer, delivery or
sublease
referred to therein are resolved, the applicable Purchaser shall,
for
and on behalf of the Vendor perform and satisfy all obligations
and
liabilities of the Vendor under or in respect of each of the
Purchased
Assets referred to in subsection 2.3(a) and the Vendor shall,
after
the Closing Date and, in the case of (iii) below, at the cost of
the
applicable Purchaser:
(i) hold the benefits
of any Purchased Asset referred to in
subsection 2.3(a) in trust for the applicable Purchaser in
accordance with the provisions of this subsection 2.3(c);
<PAGE>
21
(ii) cooperate in any reasonable and lawful arrangement, approved
by
MDA and the Vendor (it being understood that the Vendor shall
act
reasonably recognizing that the applicable Purchaser has
purchased the Purchased Assets hereinafter and is entitled to
the
full unencumbered benefit thereof), designed to provide such
benefits to the applicable Purchaser, without the Vendor
thereby
incurring any financial obligation to the applicable Purchaser;
and
(iii) enforce for the account of the applicable Purchaser and only
at
the request of the applicable Purchaser, any rights or
obligations of the Vendor arising from any Purchased Asset
referred to in subsection 2.3(a) against or in respect of any
person, including the right to elect to terminate in accordance
with the terms thereof upon the advice and request of the
applicable Purchaser.
This subsection 2.3(c) shall not constitute a waiver of any right
of
the applicable Purchaser or Vendor to require delivery of the
consents
and waivers on the Closing Date pursuant to Section 11.1 or
11.2.
2.4 Purchasers' Post-Closing
Assistance
If any Claim is asserted against the Vendor
in connection with any Excluded
Liability, the applicable Purchaser shall,
at the request of the Vendor,
cooperate in any reasonable and lawful
arrangement with the Vendor which assists
the Vendor in its defence of such Claim
(including providing the Vendor with
access to the relevant records of the
applicable Purchased Business and making
appropriate employees available as needed)
provided that such arrangement does
not adversely affect the applicable
Purchaser's right or ability to realize the
benefits from any of the Purchased Assets.
The Vendor shall pay to the
applicable Purchaser the reasonable costs
incurred by the applicable Purchaser
including the time incurred by any employee
of the applicable Purchaser in
complying with any such request at the then
current PWGSC rates applicable
thereto.
2.5 Access to Purchased Assets
Following Closing and for the eight years
thereafter (it being understood that
the applicable Purchaser has no obligation
to preserve books and records beyond
the time set forth in Section 10.2), the
applicable Purchaser shall permit the
Vendor reasonable access to the books and
records and Employees of the
applicable Purchased Business upon
reasonable request in writing during normal
business hours, for the purposes of
preparing tax and other governmental returns
and satisfying its obligations, and/or
collecting, enforcing or defending its
rights, under or pursuant to, or in respect
of, the Excluded Assets or the
Excluded Liabilities and shall, if
requested by the Vendor, use all reasonable
efforts to make available to the Vendor
those employees of the applicable
Purchaser whose assistance, testimony or
presence is considered beneficial by
the Vendor, acting reasonably, to assist
the Vendor in evaluating, defending or
prosecuting any claim or demand relating to
any Excluded Liability. The Vendor
shall pay to the applicable Purchaser the
reasonable costs incurred by the
applicable Purchaser in complying with any
such request at the then current
PWGSC rates applicable thereto.
<PAGE>
22
2.6 Supplier Claims
The Vendor shall not commence any claim
against a supplier in respect of a
Supplier Claim prior to the launch of the
Radarsat-2 satellite without the prior
written consent of MDA which consent may
not be unreasonably withheld or
delayed; provided that the Vendor may
commence a Claim against such a supplier
prior to the launch of the Radarsat-2
satellite without the consent of MDA if
the supplier has independently asserted a
Claim against the Vendor or the Parent
and the Vendor provides prior written
notice of the commencement of such Claim
to MDA.
2.7 E-mail and Website Query
Forwarding During Transition Period
During a transition period of three months
following the Closing Date, the
Vendor will forward to the Purchaser's, at
the E-mail addresses and Websites
specified in writing by the applicable
Purchaser, all e-mail messages addressed
to Transferred Employees and delivered to
the Vendors (excluding any e-mail
messages routinely filtered or quarantined
by the Vendor's e-mail security
systems) during such transition period and
all Internet-based queries to the
Websites and Uniform Resource Locators of
the Vendor dedicated to the Purchased
Businesses or otherwise clearly intended
for such Websites and Uniform Resource
Locators and received during such
transition period.
ARTICLE 3
PURCHASE PRICE
3.1 Purchase Price
The aggregate purchase price (the "Purchase
Price") payable by the Purchasers to
the Vendor for acquiring the Purchased
Assets shall be Twenty Seven Million,
Three Hundred Thousand United States
Dollars (US$27,300,000) as adjusted
pursuant to Section 3.4. In addition the
Purchasers shall assume and satisfy the
Assumed Liabilities in accordance with the
terms of this Agreement. The Purchase
Price shall be exclusive of all applicable
GST, QST, ORST and other sales and
transfer taxes.
3.2 Payment of Purchase Price
The Purchase Price shall be payable by the
Purchasers as follows:
(a) as to US$25,300,000 (the "Closing
Date Payment"), by way of wire
transfer of immediately available funds to such bank accounts as
the
Vendor may specify at least two Business Days prior to the
Closing
Date; and
(b) as to US$2,000,000, such amount
shall be payable as and to the extent
that the aggregate amounts payable under the terms of the
Radarsat-2
Subcontract In-Orbit Incentive (as such terms currently exist
without
amendment, modification or termination) exceed US$3,950,000. If
the
aggregate amounts payable under the terms of such Incentive
shall
exceed US$3,950,000 the Purchasers shall pay from time to time as
and
when such amounts are payable, such excess amounts to the Vendor to
a
maximum of US$2,000,000. For clarity, if the aggregate amount of
such
Radarsat-2 Subcontract In-Orbit Incentives do not exceed
<PAGE>
23
US$3,950,000 then there shall be no amount payable under this
subsection 3.2(b) and if, for example, the aggregate amount of
Radarsat-2 Subcontract In-Orbit Incentives is equal to
US$5,200,000
the Purchasers shall pay to the Vendor under this subsection 3.2(b)
a
total of US$1,250,000.
Notwithstanding the foregoing the
Purchasers may set off against the Purchase
Price and reduce the amount payable in
3.2(a) by an equivalent amount owing by
the Vendor under the Release set forth in
Exhibit II (the "Release").
3.3 Determination of Closing Net
Receivables
(a) During the ten (10) Business Days
period immediately following the
date of this Agreement, the Space Purchaser shall review any
changes
from June 30, 2005 on the costs incurred, estimated costs to
complete
and estimated costs at completion of the programs of the Space
Business as set forth on Schedule 37 to determine whether it is
in
agreement with such costs and the determination of the amounts
thereof. To the extent that the Space Purchaser is not in
agreement
with any of such costs the Vendor and the Space Purchaser will use
all
reasonable efforts to resolve such issues and amend Schedule 37
accordingly, failing which, such issues shall be referred to the
CEO's
of the Parent and MDA for resolution, which upon such
resolution,
shall be the "Agreed Schedule 37". If there are no changes to
Schedule
37 after such review and discussions, Schedule 37 shall be the
"Agreed
Schedule 37. If the Vendor and the Space Purchaser are unable to
agree
on any such issue, that issue will be resolved pursuant to
Section
3.3(f) and upon such resolution Schedule 37 as so resolved will be
the
"Agreed Schedule 37";
(b) Closing Net Receivables Statement.
Within sixty (60) days following
the Closing Date, the Vendor shall deliver to the Space Purchaser
an
unaudited statement of Closing Net Receivables (the "Closing
Net
Receivables Statement") of the Purchased Businesses as at the
opening
of business on the Closing Date, prepared using the same line
items
and in accordance with generally accepted accounting principles
applied on a consistent basis with those used in the preparation
of
the Pro Forma Net Receivables statement (the "Pro Forma Net
Receivables Statement"). For greater certainty the Closing Net
Receivables Statement shall be prepared (i) using accounting
methods,
policies, practices, procedures and classification and
estimation
methodologies identical to those used by the Vendor in preparation
of
the Pro Forma Net Receivables Statement and Agreed Schedule 37
and
(ii) there shall be no changes to any reserve or provision for
(or
estimates therein) or in respect of any Contracts (including
any
"estimates of costs at completion" and estimated costs of and times
to
completion for individual contracts) from the amounts reflected in
the
Pro Forma Net Receivables Statement and the Agreed Schedule 37
except
changes that are required to reflect changes in facts or events
occurring on or after October 1, 2005 and on or before the
Closing
Date or as resolved as part of the Agreed Schedule 37 pursuant
to
Section 3.3(f), if any (any such changes shall be effected in a
manner
consistent with the principles used in the
<PAGE>
24
preparation of the Pro Forma Net Receivables Statement and the
Agreed
Schedule 37). For the purpose of preparing the Closing Net
Receivables
Statement, the Purchasers agree to grant the Vendor's
authorized
representatives reasonable access during normal business hours
to
relevant records, facilities and personnel of the Purchasers.
(c) Closing Net Receivables
Calculation. At the time of delivery of the
Closing Net Receivables Statement, the Vendor shall also deliver
to
the Space Purchaser, a written statement setting forth the amount
by
which the Closing Net Receivables is greater than or less than
CDN$1,169,700.
(d) "Closing Net Receivables" is
defined herein as the amount by which the
aggregate book value as at the Closing Date of the Receivables
exceeds
the aggregate book value as at the Closing Date of the Trade
Payables,
all as set forth on the Closing Net Receivables Statement. For
greater
certainty, it is understood and agreed that no amount shall be
included in Net Receivables attributable to Milestones 52, 53, 54
and
55 under the Radarsat-2 Subcontract, and that with respect to
Milestones 46 through 51, inclusive, thereunder: (i)
anticipated
effort or costs related to such Milestones shall be included in
determining the total anticipated cost of the Radarsat-2
Subcontract;
(ii) efforts or costs related thereto shall not be included in
determining the percentage-of-completion actually achieved by
Vendor
as of the Closing Date except for not more than six months of
support
actually provided as of the Closing Date as contemplated under
Milestone 46 and (iii) the value of such Milestones shall be
included
in determining the total contract value of such Radarsat-2
Subcontract.
(e) Approval of Closing Net
Receivables Statement. The Space Purchaser
shall have a period (the "Review Period") of thirty days from the
date
it receives the Closing Net Receivables Statement in which to
review
the same. For the purpose of such review, the Vendor shall permit
the
Space Purchaser and its authorized representatives to examine
all
accounting documentation used or prepared by the Vendor in
preparing
the Closing Net Receivables Statement including the back-up
material
and ledgers. If no objection in writing to the Closing Net
Receivables
Statement is given to the Vendor by the Space Purchaser within
the
Review Period, the Closing Net Receivables Statement shall be
deemed
to have been approved as of the last day of such Review Period.
If the Space Purchaser objects to any item of the Closing Net
Receivables Statement, the Space Purchaser shall give written
notice
to the Vendor on or before the end of the Review Period, setting
out
in reasonable detail the nature of such objection and the
related
amount(s) in dispute and the parties shall attempt to resolve
the
matters in dispute within 30 days from the date the Space
Purchaser
gives such notice to the Vendor. Without limitation, the Space
Purchaser shall not be precluded from raising objections that
are
otherwise appropriate under the terms hereof solely because
under
generally accepted accounting principles, the amount involved
would
not be considered material for accounting purposes. If all matters
in
dispute are resolved by the parties, the
<PAGE>
25
Closing Net Receivables Statement shall be modified to the
extent
required to give effect to such resolution and shall be deemed to
have
been approved as of the date of such resolution.
(f) Dispute Resolution
If the
parties cannot resolve all matters in dispute pursuant to
Section 3.3(a) prior to the Closing Date or within such thirty
day
period with respect to disputes under Section 3.3(e), all such
unresolved matters shall be submitted to KPMG LLP or, if they
refuse
or are unable to act, a nationally recognized accounting firm
acceptable to the Space Purchaser and the Vendor (the "Expert")
for
resolution. The Expert shall use its reasonable efforts to render
its
written decision within 30 days of its appointment. The Expert
shall
be given access to all materials and information reasonably
requested
by it for such purpose. The rules and procedures to be followed
in
such proceeding shall be determined by the Expert in its
discretion.
The Expert's determination of all such matters shall be final
and
binding on both parties and shall not be subject to appeal by
either
party, absent manifest error. The fees and expenses of the
Expert
shall be borne by the parties in the manner determined by the
Expert
based on the relative success of each party in respect of such
disputes. The Purchase Price or the Closing Net Receivables, as
applicable, shall be modified to the extent required to give effect
to
the Expert's determination and shall be deemed to have been
approved
as of the date of such determination.
3.4 Adjustment of Closing Date
Payment
Within two
Business Days after the Review Period:
(a) if the Closing Net Receivables
exceeds CDN$1,169,700 (the "Excess"),
the Space Purchaser shall pay the Vendor an amount equal to the
Excess, together with interest thereon at an annual rate equal to
the
Prime Rate as adjusted from time to time plus 2% from and
including
the Closing Date to but excluding the date of payment; and
(b) if the Closing Net Receivables is
less than CDN$1,169,700 the Vendor
shall pay the Space Purchaser an amount equal to such deficit,
together with interest thereon at the Prime Rate as adjusted from
time
to time plus 2% from and including the Closing Date to but
excluding
the
date of payment,
provided that if the Space Purchaser has
objected to any part of the Closing Net
Receivables Statement in accordance with
Section 3.3 no payment shall be made in
respect of the amount in dispute until 2
Business Days after the same has been
finally resolved by the parties or pursuant
to Section 3.3.
3.5 Allocation of Purchase Price
The Vendor and the Purchasers agree to
allocate the Purchase Price among the
Purchasers and the Purchased Assets and the
Assumed Liabilities in accordance
with Schedule 11 and to report
<PAGE>
26
the sale and purchase of the respective
Purchased Assets for all federal,
provincial and local tax purposes in a
manner consistent with such allocation.
The Purchasers and the Vendor agree that if
any Tax authority does not agree
with any allocation of the applicable
Purchase Price agreed to between the
parties, the Vendor and the applicable
Purchaser shall use their best efforts
and good faith to agree upon a different
allocation acceptable to the relevant
authority and, if the parties are so able
to agree, they shall thereafter amend
the allocation and their relevant Tax
Returns accordingly; provided, however
that nothing contained herein shall be
construed so as to require any party to
commence or participate in any litigation
or administrative process challenging
the determination so made by any applicable
authority.
3.6 ETA Election
Each of the Electronics Purchaser and the
Space Purchaser and the Vendor shall
elect jointly under subsection 167(1) of
the ETA and Section 75 of an Act
respecting Quebec Sales Tax, in the form
prescribed for the purposes of those
provisions to elect that GST and QST not
apply in respect of the sale and
transfer of the Purchased Assets purchased
by such Purchaser hereunder and such
Purchaser shall file such election in its
GST and/or QST returns for the
reporting period that includes the Closing
Date. Each of the Electronics
Purchaser and the Space Purchaser shall
severally indemnify and save harmless
the Vendor from and against any GST, QST,
interest and penalties imposed on the
Vendor as a result of any failure by a tax
authority to accept any such election
in respect of such Purchased Assets.
Without limiting the generality of the
foregoing if the Vendor receives any
demand, assessment or request by the
appropriate Governmental Authority to remit
GST or QST in respect of all or any
part of this transaction, the Space
Purchaser and the Electronics Purchaser
shall immediately without any set-off,
deduction or other reduction whatsoever,
pay to the Vendor the amount of such
payment including any applicable interest
or penalties.
3.7 Transfer Taxes, etc.
The applicable Purchaser shall be liable
for and shall pay all federal and
provincial sales taxes (including any GST,
QST, ORST, retail sales taxes and
land transfer taxes) and all other taxes,
duties, fees or other like charges of
any jurisdiction properly payable in
connection with the transfer of the
applicable Purchased Assets by the Vendor
to the applicable Purchaser (but not
including income taxes payable by the
Vendor). The parties confirm that the
Electronics Purchaser and the Space
Purchaser shall be solely responsible for
self-assessing and remitting all ORST in
respect of its purchase of the
Electronics Business and the Space
Business, respectively and that the Real
Estate Purchaser shall be solely
responsible for self-assessing and remitting
all GST and QST in respect of its purchase
of the Real Property. The Space
Purchaser shall pay all filing fees in
connection with any filings or
notifications required to be made under the
pre-merger notification provisions
of the Competition Act (Canada) if any.
3.8 Accounts Receivable Election
Each of the Space Purchaser and the
Electronics Purchaser and the Vendor agree
to elect jointly in the prescribed form and
manner under Section 22 of the Tax
Act (and sections 184 and 185 of the
Taxation Act (Quebec)) as to the sale of
the accounts receivable and other assets
that are referred to in subsection
2.1(f) hereof and described in Section 22
of the Tax Act (and section
<PAGE>
27
184 of the Taxation Act (Quebec)) and to
designate in such elections an amount
equal to the portion of the Purchase Price
allocated to such assets pursuant to
Section 3.5 as the consideration paid by
the applicable Purchaser therefor.
3.9 Deferred Revenue Obligations
The Vendor and each of the Space Purchaser
and the Electronics Purchaser agree
to elect jointly pursuant to subsection
20(24) of the Tax Act and its equivalent
provisions under applicable provincial Tax
legislation (including section 157.10
of the Taxation Act (Quebec)) to have the
rules in subsection 20(24) of the Tax
Act (and the provincial equivalents
thereof) apply in respect of amounts
relating to obligations of the Vendor from
the applicable Purchased Business
that are described in paragraph 12(1)(a) of
the Tax Act and that the applicable
Purchaser assumes pursuant to this
Agreement. The Vendor and each of the Space
Purchaser and the Electronics Purchaser
acknowledge that at Closing the Vendor
will transfer to the applicable Purchaser,
applicable Purchased Assets having a
value equal to the amount of such
obligations as consideration for the
assumption thereof by that Purchaser.
3.10 Non-Competition Agreements
Each of the Space Purchaser and the
Electronics Purchaser and the Vendor shall
jointly elect in the prescribed form and
manner, under proposed subsection
56.4(7) of the Tax Act (as released by the
Department of Finance on July 18,
2005) and any applicable provision or
proposed provision of the Taxation Act
(Quebec) or any successor provisions
thereto in respect of the Non-Competition
Agreements and the Vendor shall file such
elections and all required supporting
documents (including a copy of the
Non-Competition Agreements) with the
appropriate Tax authorities.
ARTICLE 4
ASSUMPTION OF LIABILITIES
4.1 Assumption of Certain Liabilities
by the Purchasers
The Purchasers severally agree to assume,
pay, satisfy, discharge, perform and
fulfil, from and after the Time of Closing,
all obligations and liabilities of
the Vendor relating to the Purchased
Businesses or the Purchased Assets
purchased by each of them, other than
Excluded Liabilities, existing, accrued or
accruing (whether direct, indirect or
contingent) as at the Time of Closing as
set forth below (the "Assumed
Liabilities"):
(a) all the liabilities and
obligations under or relating to the Assumed
Contracts;
(b) all liabilities and obligations
under all letters of credit, surety
bonds or performance bonds (including obligations to reimburse
the
issuer thereof for any payments made thereunder) issued to secure
or
ensure performance by the Vendor of its obligations or
liabilities
under any Assumed Contract comprising part of the Purchased Assets
to
the extent the same are set forth in the Schedules;
<PAGE>
28
(c) all licences, liabilities and
obligations under or relating to the
Licences comprising part of the Purchased Assets which are to
be
performed following the Closing to the extent that the Purchasers
have
the benefits of such Licenses (including pursuant to Section
2.3);
(d) all trade and other accounts
payable and other existing or accrued
liabilities arising in respect of, or in the ordinary course of
the
Purchased
Businesses (including, without limitation, trade payables
owing by the Purchased Businesses to Affiliates of the Vendor or
to
any other division of the Vendor, capital lease payments, if
any,
taxes respecting Real Property, liabilities in respect of
Permitted
Encumbrances and unpaid, accrued or accumulated vacation pay and
wages
for Transferred Employees) to the extent the same are reflected in
the
Closing Net Receivables Statement;
(e) all liabilities and obligations
under or relating to the Permitted
Encumbrances (other than the Permitted Encumbrances identified
in
Schedule 38) which are to be performed following the Closing;
(f) all liabilities for capital leases
for periods following the Closing
and any such pre-Closing liabilities to the extent reflected on
the
Closing Net Receivables Statement and all indebtedness to
Technologies
Partnerships Canada payable following Closing (whether or not
pre-Closing revenues or sales of the Vendor are used to
determine
whether amount are payable following Closing);
(g) all liabilities and obligations
arising out of or resulting from any
breach or violation of Environmental Laws by or in respect of
the
Purchased Businesses or the Purchased Assets prior to or after
Closing
whether known or unknown except to the extent the same constitutes
a
breach of the representation and warranty set forth in Section
5.26
hereof;
(h) all liabilities and obligations to
Employees or former employees of
the Purchased Business arising out of or relating to the
Grievance
Claim or any appeals therefrom or settlements thereof
(collectively
the "Grievance Claim Liabilities") which former employees are as
set
forth on Schedule 31;
(i) all liabilities and obligations of
the Vendor to Retirement Plan
Participants under or pursuant to the Retirement Plan, subject
as
herein provided;
(j) all liabilities and obligations of
the Vendor under the Pension Plans,
to Employees and former employees of the Vendor, including
Excluded
Employees, except SatNet Employees and SatNet Former Employees,
subject as herein provided; and
(k) all liabilities and obligations
that the Purchasers have expressly
assumed, or for which the Purchasers are expressly responsible,
under
this Agreement.
For greater certainty the liabilities in
(g) shall be assumed by the Real Estate
Purchaser and the liabilities in (h), (i)
and (j) shall be assumed by the Space
Purchaser.
<PAGE>
29
4.2 Retained Liabilities
The Vendor shall remain liable for and
shall pay, satisfy, discharge, perform
and fulfil, the obligations and liabilities
of the Vendor existing, accrued or
accruing (whether direct or indirect, known
or unknown) as at the Time of
Closing other than the Assumed Liabilities
(the "Excluded Liabilities")
including without limitation:
(a) any liability for Taxes payable,
collectible or remittable by the
Vendor in respect of the Purchased Businesses and the Purchased
Assets
in respect of
the period prior to the Closing Date;
(b) any liability owing to a lender of
the Vendor, including without
limitation, any bank overdrafts or bank indebtedness and any
indebtedness or liabilities owing under any trust indenture,
mortgage,
promissory note, loan agreement, guarantee or other Contract for
the
borrowing of money;
(c) all liability owing to Affiliates
of the Vendor for cash advances;
(d) the Radarsat 2 Warranties;
(e) any liability in respect of
product liability, product warranty and
other claims and obligations respecting products and services
for
which the Vendor is responsible pursuant to subsection 4.3(b) to
the
extent as provided in Section 4.3;
(f) all obligations and liabilities
whether before or after the Closing
with respect to the Excluded Employees, other than as contemplated
in
Sections 4.1(i) and (j) provided that the Vendor shall be
responsible
for all contributions to be made to such plans for the Excluded
Employees;
(g) all long-term liabilities, other
than capital leases and liabilities
to Technologies Partnerships Canada to the extent assumed by
the
Purchaser
under Section 4.1(f); and
(h) all obligations or liabilities
under Completed Contracts.
4.3 Product Liability and Warranty
Obligations
(a) The Space Purchaser shall not
assume and the Vendor shall be solely
responsible for the Radarsat Warranties, whether known or
unknown.
Notwithstanding anything contained herein to the contrary, the
Purchasers shall have no right to make any claim against the
Vendor
for a breach of any representation and warranty herein with respect
to
the Radarsat-2 Subcontract.
(b) Without in any way limiting
Section 4.1, the Purchasers shall not
assume, and the Vendor shall be solely responsible for and
shall
indemnify and hold harmless the applicable Purchaser to the extent
as
provided in Section 4.3(c) from and against any and all Losses
arising
out of or resulting from any product liability,
<PAGE>
30
product warranty and other claims, liabilities and obligations
respecting products delivered and/or services provided by the
Vendor
in connection with the Purchased Businesses up to Closing (other
than
in connection with the Radarsat-2 Subcontract (which is dealt
with
under Section 4.3(a)) whether such Losses arise before or after
the
Time of Closing and whether known or unknown as of the Time of
Closing, including under any Completed Contract.
(c) Notwithstanding anything contained
herein to the contrary, the
applicable Purchaser may if the applicable Purchaser, acting
reasonably, determines in good faith to do so for valid
business
reasons, and shall if requested to do so in writing by the
Vendor,
satisfy or perform any applicable product warranty obligation of
the
Vendor as set forth in (a) and (b), not assumed by the
applicable
Purchaser, including under the Radarsat-2 Warranties, provided
however
that, in either case, the applicable Purchaser shall first provide
the
Vendor with an opportunity to assess the claim and comment on
its
validity, the proposed response by the applicable Purchaser and
the
applicable
Purchaser's cost estimate for satisfying or performing such
warranty which cost shall be determined at the then applicable
PWGSC
rates. In any such case, provided such obligation was a valid
and
enforceable obligation or liability of the Vendor and the claim
in
respect thereof was valid, to the extent such amount is payable by
the
Vendor under Section 4.3(b) and to the extent that such amounts are
in
excess of CDN$116,970 (the "4.3 Threshold Amount"), the Vendor
shall
reimburse the applicable Purchaser forthwith following demand by
the
applicable Purchaser for costs incurred by the applicable Purchaser
in
satisfying such obligations or satisfying any warranty claim at
the
then applicable PWGSC rates. Any costs of materials or
equipment
required to be provided hereunder will be paid for at the direct
costs
of the applicable Purchaser without any mark-up. For greater
certainty
it is understood that the Purchaser will be responsible for the
cost
of all claims under Sections 4.3(b) up to a maximum of the 4.3
Threshold Amount and the costs of all such claims under Section 4.3
in
excess thereof shall be paid by the Vendor.
(d) Except as set forth in this
Section 4.3, the applicable Purchaser
shall assume, satisfy, discharge, perform and fulfill, at its
sole
cost, from and after the Time of Closing all product warranty
or
replacement claims against the Vendor or the applicable
Purchaser
under or in respect of all Operating Contracts acquired by such
Purchaser. Furthermore, the Vendor shall not be responsible for,
and
the applicable Purchaser shall be solely responsible for and
shall
indemnify and hold harmless the Vendor from and against any and
all
Losses arising out of or resulting from any product liability,
product
warranty and other claims and obligations respecting products
delivered and/or services provided by the applicable Purchaser
in
connection with Assumed Contracts after the opening of business on
the
Closing Date (including work performed or products produced
following
Closing to complete unfinished Inventory).
(e) Notwithstanding the foregoing but
subject to Section 4.3(a), nothing
contained in this Section 4.3 shall affect the rights of the
applicable Purchaser under
<PAGE>
31
Article 13 hereof in respect of any Losses suffered or incurred by
it
as a result of or arising out of any inaccuracy of any
representation
or warranty of the Vendor hereunder provided, however, that the
applicable Purchaser shall not be entitled to recover more than
the
amount of its Loss in respect of any one claim or circumstance.
(f) It is acknowledged that MDA is a
customer of the Vendor. For greater
certainty, references to Losses of the applicable Purchaser in
this
section 4.3 shall refer solely to Losses suffered by the Space
Purchaser as successor to the Space Business and not to any
Losses
suffered by MDA or the Space Purchaser as a customer of the
Vendor
unless the Vendor would otherwise have been responsible to the
Space
