EXHIBIT (10)(i)

ASSET PURCHASE AGREEMENT

BY AND BETWEEN

VOUGHT AIRCRAFT INDUSTRIES, INC.

AND

BCACSC, INC.

Dated as of July 6, 2009

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TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS

   1

Section 1.1

  Definitions    1

Section 1.2

  Construction    19

ARTICLE II PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF LIABILITIES

   20

Section 2.1

  Purchase of Assets and Assumption of Certain Liabilities    20

Section 2.2

  Purchased and Excluded Assets    20

Section 2.3

  Assumed and Excluded Liabilities    24

ARTICLE III AGGREGATE CONSIDERATION AND CLOSING

   26

Section 3.1

  Closing    26

Section 3.2

  Aggregate Consideration    26

Section 3.3

  Estimated Aggregate Consideration Adjustment    26

Section 3.4

  Aggregate Consideration Adjustment    27

Section 3.5

  Allocation of Aggregate Consideration    28

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER

   29

Section 4.1

  Organization and Qualification    29

Section 4.2

  Authorization; Enforceability    30

Section 4.3

  No Conflicts    30

Section 4.4

  Financial Information    31

Section 4.5

  Absence of Certain Developments    31

Section 4.6

  Absence of Undisclosed Liabilities    32

Section 4.7

  Title; Sufficiency and Condition of Assets    32

Section 4.8

  Inventory    33

Section 4.9

  Real Property    33

Section 4.10

  Intellectual Property    34

Section 4.11

  Contracts    36

Section 4.12

  Litigation    38

Section 4.13

  Permits; Compliance with Laws    39

Section 4.14

  Environmental, Health and Safety Laws    40

Section 4.15

  Tax Matters    42

Section 4.16

  Employee Benefit Plans; Employment Matters    43

Section 4.17

  Suppliers    45

Section 4.18

  Insurance    45

Section 4.19

  Certain Transactions    46

Section 4.20

  Broker’s Fees    46

Section 4.21

  Security Clearance    46

Section 4.22

  Site Development and Incentive Agreement; FILOT Agreement    46

ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER

   47

Section 5.1

  Organization and Qualification    47

Section 5.2

  Authority; Enforceability    47

Section 5.3

  No Conflicts    47

 

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Section 5.4

  Broker’s Fees    48

Section 5.5

  Litigation    48

ARTICLE VI COVENANTS

   48

Section 6.1

  Appropriate Actions; Further Assurances    48

Section 6.2

  Conduct of Business by Seller Until Closing    49

Section 6.3

  Consents and Governmental Authorizations    51

Section 6.4

  Access and Information    53

Section 6.5

  Exclusivity    54

Section 6.6

  Public Announcements    54

Section 6.7

  Transaction Expenses    54

Section 6.8

  Notices of Certain Matters    55

Section 6.9

  Confidentiality    55

Section 6.10

  Non-Solicitation    56

Section 6.11

  Intracompany Work Orders    57

Section 6.12

  Purchased Intellectual Property    57

Section 6.13

  Insurance    58

Section 6.14

  Litigation Support    58

Section 6.15

  Transfer of Governmental Authorizations    59

Section 6.16

  787 Supply Agreement    59

Section 6.17

  Delivery of Financial Information    59

Section 6.18

  Cash Management    59

Section 6.19

  Title Insurance    60

Section 6.20

  Letters of Credit; Surety Bond    60

Section 6.21

  Lender Waiver    60

ARTICLE VII TAX MATTERS

   61

Section 7.1

  Liability for Taxes    61

Section 7.2

  Tax Return Filing    62

Section 7.3

  Tax Contests; Audit Responsibilities    62

Section 7.4

  Cooperation    63

Section 7.5

  Transfer Taxes    64

ARTICLE VIII EMPLOYEE MATTERS

   64

Section 8.1

  Employment    64

Section 8.2

  Non-Union Employees    65

Section 8.3

  Union Employees    66

Section 8.4

  Workers’ Compensation Claims    67

Section 8.5

  WARN Act Notification    67

Section 8.6

  Employee Benefits    68

Section 8.7

  No Right to Employment    68

Section 8.8

  Code Section 409A    68

ARTICLE IX CONDITIONS PRECEDENT

   69

Section 9.1

  Conditions to Obligations of Buyer    69

Section 9.2

  Conditions to Obligations of Seller    71

 

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ARTICLE X TERMINATION

   73

Section 10.1

  Termination    73

Section 10.2

  Effect of Termination    74

ARTICLE XI INDEMNIFICATION

   74

Section 11.1

  Survival    74

Section 11.2

  Indemnification by Seller    75

Section 11.3

  Indemnification by Buyer    80

Section 11.4

  Third Party Claims    80

Section 11.5

  Limitations on Indemnification Liability    82

Section 11.6

  Treatment of Indemnification Payments    83

Section 11.7

  Exclusive Remedy    83

ARTICLE XII GENERAL PROVISIONS

   84

Section 12.1

  Notices    84

Section 12.2

  Severability; Specific Enforcement    85

Section 12.3

  Amendments    85

Section 12.4

  Assignment; Beneficiaries    86

Section 12.5

  Counterparts; Facsimiles    86

Section 12.6

  Descriptive Headings    86

Section 12.7

  Governing Law; Forum Selection    86

Section 12.8

  WAIVER OF JURY TRIAL    86

Section 12.9

  Entire Agreement    87

Section 12.10

  Waivers    87

Section 12.11

  NO ADDITIONAL REPRESENTATION OR WARRANTIES    87

Section 12.12

  Disclosure Schedules    87

Section 12.13

  No Recourse    88

 

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EXHIBITS

 

   Form of Termination and Mutual Release Agreement    Form of Bill of Sale,
Assignment and Assumption Agreement    Form of Intellectual Property Assignment
   Form of Intellectual Property License Agreement    Form of Engineering
Services Agreement

Exhibit F

   Form of Transition Services Agreement

Exhibit G

   Form of SOW Supply Agreement

Exhibit H

   Form of Facilities Bill of Sale, Assignment and Assumption Agreement

Exhibit I

   Form of North Charleston Sublease Assumption

Exhibit J

   Form of GA Sublease Assumption

Exhibit K

   Form of SOW Side Letter

Exhibit L

   Form of 747 Amendment

Exhibit M

   Form of 767 Amendment

Exhibit N

   Form of 777 Amendment

Exhibit O

   Form of SOW Warranty Agreement

Exhibit P

   Form of SOW Administrative Agreement

Appendix A

   Adjusted Net Investment Worksheet

 

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DISCLOSURE SCHEDULES

 

Schedule 1.1A

   Background Inventions of Seller

Schedule 1.1B

   Background Proprietary Information of Seller

Schedule 1.1C

   Outstanding Encumbrances

Schedule 1.1D

   Permitted Encumbrances

Schedule 1.1E

   Retained Employees

Schedule 2.2(a)(i)

   Purchased Contracts

Schedule 2.2(a)(ii)

   Tangible Personal Property

Schedule 2.2(b)(viii)

   Governmental Authorizations

Schedule 2.2(b)(xvii)

   Certain Real Property

Schedule 2.2(b)(xix)

   Excluded Tangible Property

Schedule 2.3(a)(ii)

   Assumed Employee Liabilities

Schedule 4.3(a)

   Required Consents

Schedule 4.3(b)

   No Conflicts

Schedule 4.4

   Financial Information

Schedule 4.5

   Absence of Certain Developments

Schedule 4.6

   Undisclosed Liabilities

Schedule 4.7

   Title, Sufficiency and Condition of Assets

Schedule 4.8

   Inventory

Schedule 4.10(a)

   Intellectual Property

Schedule 4.10(b)

   Inbound License Agreements

Schedule 4.10(c)

   Infringement

Schedule 4.10(d)

   Confidentiality and Assignment Agreements

Schedule 4.10(e)

   Software

Schedule 4.10(f)

   Information Technology Systems

Schedule 4.11(a)(i)

   Material Contracts

Schedule 4.11(a)(ii)

   Material Contracts

Schedule 4.11(a)(iii)

   Material Contracts

Schedule 4.11(a)(iv)

   Material Contracts

Schedule 4.11(a)(v)

   Material Contracts

Schedule 4.11(a)(vi)

   Material Contracts

Schedule 4.11(a)(vii)

   Material Contracts

Schedule 4.11(a)(viii)

   Material Contracts

Schedule 4.11(a)(ix)

   Material Contracts

Schedule 4.11(a)(x)

   Material Contracts

Schedule 4.11(a)(xi)

   Material Contracts

Schedule 4.11(a)(xii)

   Material Contracts

Schedule 4.11(b)

   Material Contracts

Schedule 4.11(c)

   Material Contracts

Schedule 4.11(e)

   Material Contracts

Schedule 4.12

   Litigation

Schedule 4.13

   Material Governmental Authorizations

Schedule 4.14(a)

   On-Site Waste Disposal Activities and Operations; On-Site Sale, Treatment,
Processing, Recycling or Disposal of Hazardous Waste

Schedule 4.14(b)

   Underground Storage Tanks, Sumps or Wells

 

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Schedule 4.14(c)

   Compliance with Environmental Laws

Schedule 4.14(d)

   Environmental Permits and Environmental Disclosure Reports

Schedule 4.14(e)

   Release or Threatened Release of Hazardous Material

Schedule 4.14(f)

   Hazardous Material Emanating from Property or Purchased Assets

Schedule 4.14(g)

   Environmental Claims

Schedule 4.14(h)

   Environmental Restrictions on the Use of Property

Schedule 4.15

   Tax Matters

Schedule 4.15(g)

   Partnership Interests

Schedule 4.16(a)

   Employee Benefit Plans

Schedule 4.16(c)

   Retiree Medical or Other Welfare Benefits

Schedule 4.16(d)

   Pension and Multiemployer Plans

Schedule 4.16(f)

   Employees on Leave

Schedule 4.16(h)

   Employee Controversies

Schedule 4.16(i)

   Collective Bargaining Agreements

Schedule 4.16(m)

   Participating Employees

Schedule 4.17

   Suppliers

Schedule 4.18

   Insurance

Schedule 4.19

   Affiliate Transactions

Schedule 4.20

   Broker’s Fees

Schedule 4.21

   Security Clearances

Schedule 5.3

   No Conflicts

Schedule 5.4

   Brokers’ Fees

Schedule 6.2(a)

   Conduct of Business

Schedule 6.2(b)(i)

   Exceptions to Conduct of Business

Schedule 6.2(b)(ii)

   Exceptions to Conduct of Business

Schedule 6.2(b)(iii)

   Exceptions to Conduct of Business

Schedule 6.2(b)(iv)

   Exceptions to Conduct of Business

Schedule 6.2(b)(v)

   Exceptions to Conduct of Business

Schedule 6.2(b)(vi)

   Exceptions to Conduct of Business

Schedule 6.2(b)(vii)

   Exceptions to Conduct of Business

Schedule 6.2(b)(viii)

   Exceptions to Conduct of Business

Schedule 6.2(b)(ix)

   Exceptions to Conduct of Business

Schedule 6.2(b)(x)

   Exceptions to Conduct of Business

Schedule 6.2(b)(xi)

   Exceptions to Conduct of Business

Schedule 6.2(b)(xii)

   Exceptions to Conduct of Business

Schedule 6.10(c)(i)

   Seller Engineering Employees

Schedule 6.10(c)(ii)

   Excluded Engineering Employees

Schedule 6.20

   Guarantees

Schedule 7.5

   Transfer Taxes

Schedule 8.1(a)(i)

   Employees of the Business

Schedule 8.1(a)(ii)

   Seller Employees Who Are No Longer Employees

Schedule 8.4

   Open Workers’ Compensation Claims

Schedule 11.4(e)

   Settlements

 

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ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT, dated as of July 6, 2009 (this “Agreement”), is
entered into by and between Vought Aircraft Industries, Inc., a Delaware
corporation (“Seller”), and BCACSC, Inc., a Delaware corporation (“Buyer”).

WHEREAS, Seller is engaged in the business (the “Business”) of designing
(including initial design, design related to build, certification, and testing),
manufacturing (including procurement, fabrication, and assembly (including
structures assembly, systems assembly, and integration)), and supporting aft
fuselage sections 47 and 48 and the aft 48 (in each case, including spare parts)
for the 787 program (the “787 Program”) of The Boeing Company, a Delaware
corporation and the parent corporation of Buyer (“Boeing”), pursuant to the
General Terms Agreement, BCA-65572-0026, and Special Business Provisions,
MS-65572-0030, between Seller and Boeing, dated as of July 7, 2005, as amended
by Amendment No. 1 dated as of November 15, 2006, as further amended by
Amendment No. 2 dated as of November 30, 2006, as further amended by Amendment
No. 3 dated as of June 24, 2009, as further amended by Amendment No. 4 dated as
of November 13, 2007, as further amended by Amendment No. 5 dated as of July 1,
2008, as further amended by Amendment No. 8 dated as of April 17, 2009, and as
otherwise further amended from time to time in accordance with its terms (the
“787 Supply Agreement”); and

WHEREAS, this Agreement contemplates a transaction in which (i) Buyer will
acquire all of the business, assets and operations used in the Business (other
than the Excluded Assets, as specified herein), and will assume the liabilities
of the Business (other than the Excluded Liabilities, as specified herein), all
on the terms and subject to the conditions set forth in this Agreement, and
(ii) pursuant to and on the terms set forth in the Termination and Mutual
Release Agreement, each of Boeing and Seller, on behalf of themselves and each
of their respective Subsidiaries, will terminate the 787 Supply Agreement and
release Claims and resolve any and all rights and obligations owed to each other
related to the 787 Supply Agreement as described therein.

NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the value, receipt and sufficiency of
which are acknowledged, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. For purposes of this Agreement, the following terms
have the meanings set forth below:

“401(k) Plan” is defined in Section 4.16(b) of this Agreement.

“747 Amendment” is defined in Section 9.1(e)(xiii) of this Agreement.

“767 Amendment” is defined in Section 9.1(e)(xiv) of this Agreement.

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“777 Amendment” is defined in Section 9.1(e)(xv) of this Agreement.

“787 Design Build Guide” is defined in the definition of Required by Boeing in
Section 1.1 of this Agreement.

“787 Program” is defined in the Recitals to this Agreement.

“787 Supply Agreement” is defined in the Recitals to this Agreement.

“Absent Employees” is defined in Section 8.2(b) of this Agreement.

“Accounts Receivable” is defined in Section 2.2(a)(v) of this Agreement.

“Acquisition Proposal” is defined in Section 6.5 of this Agreement.

“Additional Restricted Employees” means all Persons employed by the Business
after the Closing Date (other than any Transferred Employees).

“Adjusted Net Investment Amount” means, as of any date, (i)(A) the aggregate
amount (without duplication) of all investments made and expenses incurred or
accrued by Seller and its Subsidiaries in connection with the 787 Program at any
time as of such date, minus (B) the sum of, without duplication, (u) the
aggregate amount of payments and advances made on or prior to such date by Buyer
or its Affiliates to Seller pursuant to the 787 Supply Agreement, (v) grants
made to Seller by the State of South Carolina under the Site Development and
Incentive Agreement on or prior to such date, (w) the accounts payable of Seller
in respect of amounts referred to above in clause (i)(A) that constitute Assumed
Liabilities as of such date, (x) to the extent included in the amount in clause
(i)(A) above, the Milledgeville direct labor and Milledgeville capex line items
on Appendix A, (y) to the extent included in the amount in clause (i)(A) above,
the Dallas IT equipment line item on Appendix A, and (z) to the extent included
in the amount in clause (i)(A) above, the corporate G&A line item on Appendix A
through March 29, 2009, in the case of each of the foregoing clauses, determined
and calculated in accordance with the calculation of the Adjusted Net Investment
Amount estimated as of March 29, 2009, set forth on Appendix A, and determined
in accordance with the Agreed Methodology, plus (ii) fifty percent (50%) of the
amount of the G&A Costs properly allocable to the Business; provided, that in no
event shall the amount determined pursuant to the foregoing clause (ii) exceed
the G&A Cost Cap.

“Affiliate” means with respect to any Person, any other Person that directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or
is under common Control with such Person or entity.

“Aggregate Consideration” is defined in Section 3.2 of this Agreement.

“Agreed Methodology” means the practices, policies and methodologies set forth
on Annex I to Appendix A (including methodologies, consistently applied, in
allocating general and administrative and other indirect costs) that were used
by Seller in determining and calculating the estimated amount of the Adjusted
Net Investment Amount as of March 29, 2009, which estimate is reflected on
Appendix A (it being acknowledged that (i) the purpose of the

 

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adjustment to the Closing Payment Amount pursuant to Section 3.4 is to ensure an
accurate calculation of the Closing Adjusted Net Investment Amount, consistent
with the calculation of the estimated Adjusted Net Investment Amount as of
March 29, 2009, as reflected on Appendix A, rather than to change or challenge
the practices, policies or methodologies set forth on Annex I to
Appendix A, (ii) for purposes of calculating the Closing Adjusted Net Investment
Amount, indirect costs of the 787 Program for the period between March 29, 2009
and the Closing will be limited to the categories of indirect costs listed in or
reflected on Appendix A, which shall be allocated using the same practices,
policies and methodologies set forth on Annex I to Appendix A, and (iii) for the
avoidance of doubt, direct costs, expenses and investments reflected in the
Adjusted Net Investment Amount shall be limited to such costs, expenses and
investments made or incurred by Seller for the 787 Program).

“Agreement” is defined in the Preamble to this Agreement.

“Allocation Statement” is defined in Section 3.5(a) of this Agreement.

“Anti-Bribery Laws” is defined in Section 4.13(c) of this Agreement.

“Apportioned Tax” means any Tax relating to any Purchased Asset (including any
additional Tax determined subsequent to the Closing Date) that is due or becomes
due without acceleration for any Straddle Period; provided, however, that any
Tax that is an Assumed Liability will not be an Apportioned Tax.

“Apportioned Taxes Claim” is defined in Section 7.3(c) of this Agreement.

“Arbitrator” is defined in Section 11.5(b) of this Agreement.

“Assets” means all assets, properties and rights of every kind (whether tangible
or intangible), including real and personal property.

“Assumed Liabilities” is defined in Section 2.3(a) of this Agreement.

“Background Invention(s)” is defined in the 787 Supply Agreement and, with
respect to Seller, includes those inventions listed on Schedule 1.1A.

“Background Proprietary Information” is defined in the 787 Supply Agreement and,
with respect to Seller, includes that proprietary information listed on Schedule
1.1B.

“Base Adjusted Net Investment Amount” is Four Hundred Seventy-Six Million
Dollars ($476,000,000.00).

“BCA” is defined in Section 6.10(c) of this Agreement.

“Bill of Sale, Assignment and Assumption Agreement” is defined in
Section 9.1(e)(ii) of this Agreement.

“BIS” is defined in Section 6.3(c) of this Agreement.

 

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“Boeing” is defined in the Recitals to this Agreement.

“Boeing Guaranty” means that certain Guaranty, executed as of the date hereof,
by Boeing in favor of and for the benefit of Seller.

“Business” is defined in the Recitals to this Agreement.

“Business Books and Records” is defined in Section 2.2(a)(xi) of this Agreement.

“Business Day” means any day that is not a Saturday, Sunday or any other day on
which banks are required or authorized by Law to be closed in New York City, New
York.

“Buyer” is defined in the Preamble to this Agreement.

“Buyer Cure Period” is defined in Section 10.1(b)(ii) of this Agreement.

“Buyer 401(k) Plan” is defined in Section 8.6(b) of this Agreement.

“Buyer Indemnified Person” is defined in Section 11.2(a) of this Agreement.

“CERCLA” is defined in the definition of Environmental Laws in Section 1.1 of
this Agreement.

“Chosen Courts” is defined in Section 12.7 of this Agreement.

“Claims” means any and all claims (including any cross-claim or counterclaim),
causes of action, suits, charges, complaints, litigation, arbitration,
proceeding (including any civil, criminal, administrative, investigative or
appellate proceeding) and disputes, whenever or however arising.

“Closing” is defined in Section 3.1 of this Agreement.

“Closing Adjusted Net Investment Amount” is defined in Section 3.4(a) of this
Agreement.

“Closing Date” is defined in Section 3.1 of this Agreement.

“Closing Payment Amount” is defined in Section 3.2 of this Agreement.

“COBRA” is defined in Section 4.16(c) of this Agreement.

“Code” means the Internal Revenue Code of 1986, as amended, and all Laws
promulgated pursuant thereto or in connection therewith.

“Collective Bargaining Agreement” means any collective bargaining agreement or
labor agreement with the Union representing Transferred Employees, including any
amendments, supplements, letters and memoranda of understanding.

“Confidential Information” is defined in Section 6.9(a) of this Agreement.

 

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“Confidentiality and Assignment Agreements” is defined in Section 4.10(d) of
this Agreement.

“Consent” means any approval, consent, permission, waiver or authorization from
any Person other than a Governmental Entity.

“Contract” means any contract, agreement, commitment or undertaking (whether
written or oral).

“Control” (including the terms “Controlled by” and “under common Control with”)
means, as used with respect to any Person, possession of power or authority
(directly or indirectly or as a trustee or executor) to direct or cause the
direction of management or policies of such Person (whether through ownership of
voting securities, as trustee or executor, by Contract or otherwise).

“Copyrights” means any and all of the following, and all rights arising out of
or associated therewith, in each case, in any jurisdiction in the world:
original works of authorship (whether copyrightable or not); copyrights,
including unregistered and common law rights therein; moral or economic rights
of authors; copyright registrations; and applications to register copyrights.

“Covered Product” means any product that is the same type of product as a
Product that was designed, manufactured or sold by Seller or a supplier of
Seller pursuant to or in contemplation of the 787 Supply Agreement prior to the
Closing (a “Pre-Closing Product”) including (y) a product that was designed by
Seller or a supplier of Seller prior to the Closing pursuant to or in
contemplation of the 787 Supply Agreement and manufactured or sold after the
Closing, and (z) a product manufactured or sold after the Closing that uses a
method or process of design or manufacture that was created prior to the Closing
by Seller or a supplier of Seller pursuant to or in contemplation of the 787
Supply Agreement for the same type of product as a Pre-Closing Product, in each
case regardless of whether such product or type of product had been manufactured
or sold prior to the Closing; provided, however, that (i) any product designed
prior to the Closing will not constitute a Covered Product following any change
to the specifications or design of such product made following the Closing to
the extent (A) prior to the Closing, the manufacture, sale or use of such
product did not result in, or would not, if such product had been manufactured,
sold or used at such time, have resulted in, the infringement or unlawful use of
any Intellectual Property right and (B) the manufacture, sale or use of such
product following such change results in the infringement or unlawful use of any
Intellectual Property right and such infringement or unlawful use would not have
occurred but for such change, and (ii) any product manufactured prior to the
Closing will not, following any change made following the Closing to a method or
process used in connection with the manufacture of such product prior to the
Closing, constitute a Covered Product to the extent (A) prior to the Closing,
the manufacture, sale or use of such product did not result in, or would not, if
such product had been manufactured, sold or used at such time, have resulted in,
the infringement or unlawful use of any Intellectual Property right and (B) the
manufacture, sale or use of such product following such change results in the
infringement or unlawful use of any Intellectual Property right and such
infringement or unlawful use would not have occurred but for such change. For
the purpose of the foregoing, a product is the “same type of product as a
Pre-Closing Product” if

 

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such product is (i) manufactured, used and sold as, on or in connection with a
Program Aircraft and (ii) such product and any Pre-Closing Product have the same
specifications, design, form, fit and function; provided, however, that such
product shall continue to constitute the “same type of product as a Pre-Closing
Product” notwithstanding any post-Closing change to the specifications, design,
form, fit or function or method or process of manufacturing such product unless
(A) prior to the Closing, the manufacture, sale or use of such product did not
result in, or would not, if such product had been manufactured, sold or used at
such time, have resulted in, the infringement or unlawful use of any
Intellectual Property right and (B) the manufacture, sale or use of such product
following such change results in the infringement or unlawful use of any
Intellectual Property right and such infringement or unlawful use would not have
occurred but for such change.

“DOJ” means the United States Department of Justice.

“Dollars” and the symbol “$” each means the lawful currency of the United
States.

“Employee Benefit Plans” is defined in Section 4.16(a) of this Agreement.

“Employees” means those individuals employed by Seller in North Charleston,
South Carolina (as reflected in Seller’s payroll system for the North Charleston
Facility) who are employed primarily in connection with the Business as of the
Closing Date and are set forth on Schedule 8.1(a)(i) (as updated pursuant to
this Agreement), including individuals stationed with or assigned to
subcontractors of the Business (including field service, surveillance and
quality control personnel) or assigned to Buyer’s manufacturing facilities,
other than the Retained Employees. Employees shall also include the employees of
Seller set forth on Schedule 6.10(c)(ii) and any employees hired by Seller in
the normal course of business, in compliance with this Agreement, to serve in
North Charleston, South Carolina primarily in connection with the Business
during the period beginning on the date hereof and ending on the Closing Date.

“Encumbrance” means any mortgage, lien, pledge, encumbrance (including, in the
case of real property, easements, rights of way, covenants, leases, licenses,
zoning and setback requirements and other variances), security interest, deed of
trust, option, encroachment, order, decree, judgment lien, charge or other
third-party rights of any kind, including in the case of Intellectual Property,
license rights or ownership interests other than those arising pursuant to a
Purchased Contract.

“Engineering Services Agreement” is defined in Section 9.1(e)(v) of this
Agreement.

“Environmental Claim” means any Claim, or any written notice of violation,
citation or other similar written communication alleging a violation of or
Liability under any Environmental Law, any government-mandated investigative,
enforcement, cleanup, removal, containment, remedial, or other governmental or
regulatory action or proceeding threatened in writing, instituted or completed
pursuant to any applicable Environmental Law, against Seller and/or the Business
with respect to any condition, use or activity of the Purchased Assets or at the
North Charleston Real Property and/or the North Charleston Facility and any
Claim, or any written allegation, demand, suit, tender, recovery or contribution
action threatened or made by any person against Seller or against or with
respect to the Purchased Assets, including any condition,

 

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use or activity of the Purchased Assets or at the North Charleston Real Property
and/or the North Charleston Facility relating to Losses resulting from or in any
way arising in connection with any Hazardous Material or breach of Environmental
Law during Seller’s use or occupancy of the North Charleston Real Property
and/or the North Charleston Facility.

“Environmental Insurance Policy” is defined in Section 6.13(c) of this
Agreement.

“Environmental Laws” means any Law or Order that pertains to pollution control
or natural resource or environmental protection, including Laws and Orders
relating to (i) the manufacture, processing, use, distribution, treatment,
storage, disposal, generation or transportation of Hazardous Materials;
(ii) air, surface, ground, water or noise pollution; (iii) any Release; (iv) the
protection of wildlife, endangered species, wetlands or other natural resources;
and (v) the protection of the health and safety of employees; including the
following statutes and regulations adopted thereunder: (A) the Comprehensive
Environmental Response, Compensation and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. § 9601 et seq.
(“CERCLA”); (B) the Solid Waste Disposal Act, as amended by the Resource
Conservation Recovery Act and the Hazardous and Solid Waste Amendments of 1984,
42 U.S.C. § 6901 et seq. (“RCRA”); (C) the Federal Water Pollution Control Act,
as amended by the Clean Water Act of 1977, 33 U.S.C. § 1251 et seq.; (D) the
Clean Air Act, as amended, 42 U.S.C. § 7401 et seq.; (E) the Toxic Substances
Control Act, 15 U.S.C. § 2601 et seq. (“TSCA”); (F) the Safe Drinking Water Act,
42 U.S.C. §§ 300f through 300j; (G) the Hazardous Materials Transportation Act,
49 U.S.C. § 1801 et seq. (“HMTA”); (H) the Oil Pollution Act of 1990, 33 U.S.C.
§ 2701 et seq.; (I) the Emergency Planning and Community Right-to-Know Act, 42
U.S.C. § 11001 et seq.; and (J) the Occupational Safety and Health Act, 19
U.S.C. § 6251 et seq.

“Environmental Permit” is defined in Section 4.14(d) of this Agreement.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and all Laws promulgated pursuant thereto or in connection therewith.

“ERISA Affiliate” means any trade or business that is treated as a single
employer with Seller under Sections 414(b), (c) or (m) of the Code or that must
be aggregated with Seller under Section 414(o) of the Code.

“Estimated Adjusted Net Investment Amount” is defined in Section 3.3(a) of this
Agreement.

“Estimated Preliminary Statement” is defined in Section 3.3(a) of this
Agreement.

“Excluded Assets” is defined in Section 2.2(b) of this Agreement.

“Excluded Contracts” is defined in Section 2.2(b)(vi) of this Agreement.

“Excluded Liabilities” is defined in Section 2.3(b) of this Agreement.

“Facilities” means all plants, offices, manufacturing facilities, stores,
warehouses, administration buildings and related facilities and fixtures owned
or leased on the date hereof (and those owned or leased after the date hereof
but on or before the Closing) by Seller and

 

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located on the North Charleston Real Property; provided that the term
“Facilities” shall not include any plants, offices, manufacturing facilities,
stores, warehouses, administration buildings and related facilities and fixtures
located on the Pad Premises, as such term is defined in the GA Sublease and more
particularly described in Exhibit B of the GA Sublease.

“Facilities Bill of Sale, Assignment and Assumption Agreement” is defined in
Section 9.1(e)(ix) of this Agreement.

“FILOT Agreement” means that certain Fee Agreement by and among Charleston
County, South Carolina, Seller, GA and Boeing, which was authorized by Ordinance
of Charleston County, South Carolina passed and approved as of December 19,
2006.

“Final Statement” is defined in Section 3.4(c) of this Agreement.

“Financial Information” is defined in Section 4.4 of this Agreement.

“Force Majeure Event” is defined in the definition of Material Adverse Effect in
Section 1.1 of this Agreement.

“FTC” means the United States Federal Trade Commission.

“G&A Cost Cap” means two million five hundred thousand Dollars ($2,500,000.00)
plus an amount equal to (i) two million five hundred thousand Dollars
($2,500,000.00) multiplied by (ii) the number of days elapsed between June 28,
2009 and the Closing Date, divided by 92.

“G&A Costs” means the corporate general and administrative costs and costs
associated with shared services incurred by Seller and/or its Subsidiaries
during the period beginning on (and including) March 30, 2009 and ending on (and
including) the Closing Date and allocated to the Business conducted at the North
Charleston Facility, in each case in accordance with the Agreed Methodology.

“GA” means Global Aeronautica, LLC, a Delaware limited liability company.

“GAAP” means United States generally accepted accounting principles,
consistently applied.

“GA Sublease” means that certain Pad Sublease by and between Seller and GA,
effective as of August 25, 2006, pursuant to which GA subleases a portion of the
North Charleston Real Property from Seller, as more specifically defined and set
forth therein.

“GA Sublease Assumption” is defined in Section 9.1(e)(xi) of this Agreement.

“Governmental Authorization” means any permit, consent, license, certificate,
franchise, permission, variance, clearance, registration, qualification,
authorization or approval issued, granted, given or otherwise made available by
or under the authority of any Governmental Entity or pursuant to any Law,
including any Environmental Permit.

 

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“Governmental Entity” means the United States, any state or other political
subdivision thereof and any other foreign or domestic Person exercising or
having the authority to exercise executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including any
government authority, agency, department, board, commission or instrumentality
of the United States or any foreign Person, any state of the United States or
any other political subdivision of any of the foregoing.

“Ground Lease” means that certain Charleston International Airport Ground Lease
Agreement by and between the Charleston County Aviation Authority, as lessor,
and SCPR, as lessee, dated as of August 25, 2006.

“Guarantees” is defined in Section 6.20 of this Agreement.

“Hazardous Material” means each and every element, compound, chemical mixture,
contaminant, pollutant, material or other substance that is defined, determined
or identified as hazardous or toxic under any Environmental Law or the Release
of which is prohibited or regulated under any Environmental Law, including
(i) any “hazardous substance,” “extremely hazardous substance” or “pollutant or
contaminant” as those terms are defined in CERCLA; (ii) any “hazardous waste” as
that term is defined in RCRA; (iii) any “hazardous material” as that term is
defined in the HMTA; (iv) any “chemical substance or mixture” as that term is
defined in TSCA; (v) petroleum and petroleum products and byproducts;
(vi) asbestos; and (vii) radioactive or explosive materials.

“Hire Date” is defined in Section 8.2 of this Agreement.

“HMTA” is defined in the definition of Environmental Laws in Section 1.1 of this
Agreement.

“Inbound License Agreement” means each Purchased Contract (other than a Material
Contract) pursuant to which Seller receives a license to Intellectual Property.

“Income Tax” or “Income Taxes” means any income, alternative minimum,
accumulated earnings, personal holding company, franchise, capital, single
business, net worth, gross receipts or similar taxes, including any estimated
tax, interest, penalties or additions to tax or additional amounts in respect to
the foregoing, including any transferee or secondary liability for any such tax
and any Liability assumed by agreement or arising as a result of being or
ceasing to be a member of any affiliated group, or being included or required to
be included in any Income Tax Return relating thereto.

“Income Tax Return” means, with respect to any Income Tax, any information
return for such Income Tax, and any return, report, statement, declaration,
claim for refund or document filed or required to be filed under the Law for
such Income Tax.

“Indebtedness” means, with respect to a Person, all Liabilities and obligations
of such Person (i) for borrowed money (including all accrued and unpaid interest
and all prepayment penalties or premiums in respect thereof) or issued in
substitution for or exchange of indebtedness for borrowed money; (ii) for any
indebtedness evidenced by notes, debentures, bonds or other similar instruments
(including all accrued and unpaid interest and all prepayment

 

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penalties or premiums in respect thereof); (iii) under any conditional sale,
title retention or similar arrangement, or with respect to any deferred purchase
price of any Assets or services (but excluding trade accounts payable arising in
the ordinary course of business consistent with past practice); (iv) to
reimburse any obligor on any letter of credit or similar credit transaction
securing obligations of any Person, to the extent such letter of credit or
similar obligation has been drawn; (v) to pay rent or other amounts under any
lease of real or personal property that is required to be classified or
accounted for as a capital lease in accordance with GAAP; (vi) constituting a
guarantee of any Liabilities or obligations of any other Persons of the type
described in the foregoing clauses (i) through (v); and (vii) any liability or
obligation of the type described in the foregoing clauses (i) through (v) of any
other Person, secured by an Encumbrance on any of such Person’s Assets.

“Indemnified Persons” is defined in Section 11.3(a) of this Agreement.

“Indemnifying Person” is defined in Section 11.4(a) of this Agreement.

“Initial Restricted Employees” means the Transferred Employees.

“Intellectual Property” means any and all of the following, and all rights
arising out of or associated therewith, in each case in any jurisdiction in the
world: (i) Patents; (ii) Copyrights, (iii) Trademarks; (iv) Trade Secrets;
(v) Software; (vi) rights to use the names, likenesses and other personal
characteristics of any individual, including rights of privacy and publicity;
and (vii) all other intellectual property or industrial property rights.

“Intellectual Property Assignments” is defined in Section 9.1(e)(iii) of this
Agreement.

“Intellectual Property License Agreement” is defined in Section 9.1(e)(iv) of
this Agreement.

“Interim Financial Information” is defined in Section 6.17 of this Agreement.

“Inventory” is defined in Section 2.2(a)(iii) of this Agreement.

“IRS” means the U.S. Internal Revenue Service.

“Joint SBP Activity Invention(s)” is defined in the 787 Supply Agreement.

“Joint SBP Activity Proprietary Information” is defined in the 787 Supply
Agreement.

“Knowledge” means, with respect to Seller, the actual knowledge of (i) Kevin
McGlinchey, Keith Howe, Jeff McRae, Ron Muckley, Susie Kent, Joy Romero, Tom
Mann, Casey Litaker and Ron Vuz for all purposes hereunder; (ii) for purposes of
Section 4.10 only, Bryan Tutor, Seturah Foxx and Tom Stubbins; (iii) for
purposes of Section 4.9(c)(iii) only, Jerry Edmondson; (iv) for purposes of
Sections 4.9 and 4.11 only, Randy Smith, (v) for purposes of Section 4.11 only,
Pat Russell, George Briggs, Cliff Collier and Tom Stubbins; (vi) for purposes of
Section 4.12 only, Seturah Foxx; (vii) for purposes of Section 4.13 only, Jerry
Edmondson, (viii) for purposes of Section 4.14 only, Joanne Romano; (ix) for
purposes of Section 4.15 only, Bob Roofner; (x) for purposes of Sections
2.3(a)(ii), 2.3(b)(ii) and 4.16 only, Cliff Collier and

 

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Seturah Foxx; and (xi) for purposes of Section 4.18 only, Doug McLean, and, with
respect to Buyer, the actual knowledge of Bryan Gerard, Henry Knies, Anthony
Fisher, Joseph Lower and Edward Neveril.

“Laws” means all foreign, federal, state, regional, county and local
constitutions, statutes, laws (including common laws), ordinances, regulations,
rules, resolutions, Orders, tariffs, writs, injunctions, awards (including
awards of any arbitrator), judgments and decrees of any and all Governmental
Entities and the terms of any Governmental Authorizations.

“Legal Proceeding” means any Claim commenced, brought, conducted or heard by or
before, any court or other Governmental Entity or any arbitrator or arbitration
panel.

“Lender Waiver” is defined in Section 6.21 of this Agreement.

“Liability” means any and all debts, liabilities, guarantees, assurances,
commitments and obligations, whether asserted or unasserted, matured or
unmatured, liquidated or unliquidated, known or unknown, due or to become due.

“Licensed Intellectual Property” means Intellectual Property licensed to Seller
pursuant to a Purchased Contract.

“LOI” means that certain letter of intent dated as of April 17, 2009 by and
between Seller and Boeing.

“Losses” means any and all losses, Liabilities, Claims, damages (including
consequential, special, punitive, exemplary and incidental damages), penalties,
fines, amounts paid in settlement, taxes, liens, costs and expenses (including
interest, penalties, reasonable attorneys’ and accountants’ fees and
disbursements and all amounts paid in investigation, defense or settlement of
any of the foregoing) or diminution of value, of any nature whatsoever,
including any of the foregoing or portion thereof that may occur after the
Closing but relate to the period prior to the Closing.

“Material Adverse Effect” means any effect that (i) is, or is reasonably likely
to be, materially adverse to the operations, properties, assets, Liabilities,
financial condition or results of operations of the Business, taken as a whole,
or (ii) would be reasonably expected to materially impede or delay Seller’s
ability to consummate the transactions contemplated by this Agreement in
accordance with its terms and applicable Laws or otherwise to perform its
obligations hereunder; provided that, in the case of each of clause (i) and
(ii) above, any effect to the extent resulting from any of the following shall
not be taken into account in determining whether any Material Adverse Effect has
occurred or whether a Material Adverse Effect would be reasonably likely to
occur: (A) changes in economic, business, financial or political conditions that
affect the industries in which the Business operates so long as such changes do
not have a materially disproportionate effect on the Business, (B) acts of
terrorism or war, (C) any adverse effect, event, occurrence, development,
circumstance, change or condition to the extent relating to or arising out of
(I) the design, manufacture, production, sale, operation and support of the 787
aircraft program by any Person other than Seller, (II) any actual or alleged
breach of the 787 Supply Agreement or any Seller Supply Agreement (other than
those arising from bad faith or willful misconduct of Seller) or (III) any
customer, supplier, contractor or

 

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sub-contractor (in each case, other than Seller) or supplier contract,
subcontract agreement or raw materials relating to the 787 aircraft program or
(D) any Excluded Liability to the extent not impairing the Business from and
after the Closing. In connection with determining whether any Material Adverse
Effect has occurred or would be reasonably likely to occur as a result (in whole
or in part) of Seller or the Purchased Assets suffering a Force Majeure Event,
the effects resulting from such Force Majeure Event shall be taken into account
notwithstanding the limitations set forth in clause (C) above. For purposes of
this definition, “Force Majeure Event” means any act of God, flood, fire,
hurricane or other casualty, earthquake, or any other events or circumstances
not within the reasonable control of Seller that are substantially similar to
any of the foregoing (other than any matter described in clause (A) and (B)), in
each case occurring after the date of this Agreement.

“Material Contract” is defined in Section 4.11(a) of this Agreement.

“Minimum Terms and Conditions of Employment” is defined in Section 8.2(a) of
this Agreement.

“Multiemployer Plan” is defined in Section 4.16(d) of this Agreement.

“Neutral Auditor” is defined in Section 3.4(c) of this Agreement.

“New Seller Engineering Employees” means the engineering employees who are first
employed by Seller or any of its Subsidiaries in Seller’s Dallas, Texas
facilities after the Closing Date (other than Seller Engineering Employees).

“Non-Assigned Contract” is defined in Section 6.3(b) of this Agreement.

“Non-Disclosure Agreement” means that certain Non-Disclosure Agreement, dated as
of March 17, 2009, by and between Seller and Boeing.

“North Charleston Facility” means the Facilities in North Charleston, South
Carolina.

“North Charleston Real Property” means the parcel of real property which is
subject to the North Charleston Sublease.

“North Charleston Sublease” means that certain Ground Sublease by and between
Seller and South Carolina Public Railways (“SCPR”), dated as of August 25, 2006,
pursuant to which Seller subleases the parcel of real property on which the
North Charleston Facility is located.

“North Charleston Sublease Assumption” is defined in Section 9.1(e)(x) of this
Agreement.

“Objection Notice” is defined in Section 3.4(b) of this Agreement.

“Offer” is defined in Section 8.1(a) of this Agreement.

“Offer Consideration Period” is defined in Section 8.2(a) of this Agreement.

 

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“Open Source Software” means Software that is “open source” or “copyleft” as
those terms are commonly understood in the Software industry, including any
Software that is: (i) distributed pursuant to a license or other agreement that
requires licensees to disclose or otherwise make available the source code for
any software incorporating or using such licensed software or developed using
such licensed software, or to distribute or make available such software on
terms specified in such license or agreement; (ii) subject to the GNU General
Public License (GPL) or the GNU Lesser General Public License (LGPL) (in each
case any version thereof) or any license approved by the Open Source Initiative
(as of the date hereof set forth at http://opensource.org/licenses/index.html);
or (iii) listed in the Free Software Directory maintained by the Free Software
Foundation (in cooperation with the United Nations Education, Scientific and
Cultural Organization (UNESCO)) (as of the date hereof set forth at
http://directory.fsf.org/).

“Order” means any award, final decision, injunction, judgment, order, decree,
ruling or verdict entered, issued, made or rendered by any court, administrative
agency or other Governmental Entity, or by any arbitrator or arbitration panel.

“Outstanding Encumbrances” means those Encumbrances identified on Schedule 1.1C.

“Party” means, individually, either of Buyer or Seller, and “Parties” means all
of the foregoing collectively.

“Patents” means any and all of the following, and all rights arising out of or
associated therewith, in each case, in any jurisdiction in the world: patents
and patent applications (including reissues, re-examinations, divisions,
renewals, extensions, provisionals, continuations and continuations-in-part);
inventions (whether or not patentable and whether or not reduced to practice);
invention disclosures; inventor’s certificates; moral or economic rights of
inventors; industrial designs; and all registrations and applications thereof.

“Pay-off Amount” is defined in Section 9.1(d) of this Agreement.

“Pay-off Letter” is defined in Section 9.1(d) of this Agreement.

“Permitted Encumbrance” means (i) Encumbrances identified on Schedule 1.1D;
(ii) warehouse, mechanics’, materialmen’s and similar liens imposed by Law
arising in the ordinary course of business, with respect to amounts not yet due
and payable or amounts being contested in good faith through appropriate
proceedings initiated after the date hereof in compliance with this Agreement;
(iii) liens for Taxes not yet due and payable or being contested in good faith
through appropriate proceedings initiated after the date hereof in compliance
with this Agreement and for which adequate reserves have been established in
accordance with GAAP; (iv) with respect to the North Charleston Real Property,
(x) any easement, covenant, condition, restriction or Encumbrance of record,
which exceptions are identified on or attached to Schedule 1.1D, (y) any
conditions or defects that are shown on the survey prepared by HGBD Surveyors,
LLC dated May 18, 2009, and (z) such other Encumbrances that do not impair the
current use or occupancy of the assets subject thereto; and (v) orders and
decrees that do not impair the current use or occupancy of the assets subject
thereto.

 

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“Person” means an individual, corporation, partnership, limited liability
company, joint venture, trust, trustee, unincorporated organization or other
entity, including a Governmental Entity.

“Post-Closing Period” is defined in Section 7.1(a) of this Agreement.

“Preliminary Statement” is defined in Section 3.4(a) of this Agreement.

“Pre-Closing Period” is defined in Section 7.1(a) of this Agreement.

“Pre-Closing Product” is defined in the definition of Covered Product in
Section 1.1 of this Agreement.

“Product” is defined in the 787 Supply Agreement.

“Program Aircraft” means a (i) commercial transport aircraft having a current
model designation of 787 as of Closing and (ii) any derivative thereof, as such
term is commonly understood in the commercial aircraft industry.

“Purchased Assets” is defined in Section 2.2(a) of this Agreement.

“Purchased Contracts” is defined in Section 2.2(a)(i) of this Agreement.

“Purchased Intellectual Property” means: (i) all of the Intellectual Property
listed on Schedule 4.10(a) that is identified on Schedule 4.10(a) as Purchased
Intellectual Property; (ii) Seller’s rights in Joint SBP Activity Invention(s);
(iii) Seller’s rights in Joint SBP Activity Proprietary Information; (iv) Vought
SBP Activity Invention(s); (v) Vought SBP Activity Proprietary Information;
(vi) all other Intellectual Property owned by Seller, as of the date hereof or
any time prior to the Closing, that was developed (or is being developed) by or
for Seller primarily for the Business (including Seller’s engineering work and
engineering resources, certification work, design work and data of the Business
developed (or being developed) primarily for the Business); and (vii) all rights
associated with any of the foregoing, including the right to sue and collect for
past or future infringement, misappropriation or other unauthorized use thereof,
any and all corresponding rights that, now or hereafter, may be secured
throughout the world and all copies and tangible embodiments of any of the
foregoing, and all goodwill associated or arising in connection with any of the
foregoing, in each case, other than the Licensed Intellectual Property. Without
limiting the generality of the foregoing, “Purchased Intellectual Property”
shall also include all of the following due or payable at Closing or thereafter
(A) any income, royalties, credits, prepaid expenses, deferred charges, advance
payments, security deposits, prepaid items, deposits and claims for refunds or
reimbursements, in each case, relating to any of the Purchased Intellectual
Property, (B) all Claims, rights and remedies of Seller against any third
parties arising out of or relating to any of the Purchased Intellectual
Property, and (C) all rights under or pursuant to any warranties,
representations and guarantees made by suppliers, manufacturers, contractors or
other Persons under Purchased Contracts in connection with any products or
services provided to Seller with respect to any Purchased Intellectual Property.

 

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“Qualified Representations” means those representations and warranties set forth
in: the second sentence of Section 4.3(a); Section 4.3(b); Section 4.5(a);
clause (b) of Section 4.8; Section 4.11(a)(vi); Section 4.11(e); the first and
third sentences of Section 4.13(b); Section 4.13(c); the lead-in paragraph of
Section 4.14; Section 4.16(h); Section 4.16(l); clause (iii) of Section 4.17;
and the penultimate sentence of Section 4.18.

“RCRA” is defined in the definition of Environmental Laws in Section 1.1 of this
Agreement.

“Referenced Definition” is defined in Section 1.2(f) of this Agreement.

“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, discarding, depositing,
dispersing, migration, burying, abandoning or disposing into the environment of
any Hazardous Materials that is prohibited under any applicable Environmental
Law.

“Representative” means, with respect to a particular Person, any director,
manager, member, officer, employee, agent, consultant, advisor, Affiliate,
financing source or other representative of such Person, including legal
counsel, accountants and financial advisors.

“Required by Boeing” means, for the purposes of Section 11.2(c), any such
specification (subject to paragraph (F) of Section 11.2(c)), design, design or
specification change or method or process of design or manufacturing (or any
change thereto) that was (i) expressly set forth in (A) a written 787 loads,
methods and allowables document issued by Boeing or its Affiliates or (B) a
written 787 common architecture design guide (the “787 Design Build Guide”)
issued by Boeing or its Affiliates, in each case as revised prior to the Closing
by Boeing or its Affiliates pursuant to subsequently issued written versions of
any such document or design guide, (ii) expressly set forth in any written
change order initiated and issued by Boeing or its Affiliates, except to the
extent that (x) such change order is modified as a direct result of
collaboration with Seller and (y) the misappropriation, infringement or unlawful
use in question is attributable to the modification to such change order that
resulted from such collaboration, or (iii) developed or adopted by a design or
configuration team chaired by a Boeing employee and comprised of Boeing
employees and employees of Seller and/or other 787 team members and subsequently
either (x) approved by a Design Decision Board that included a Boeing employee,
which approval was documented in an issued written Program Design Decision
Memorandum, or (y) expressly set forth in any issued 787 Design Build Guide.

“Resolution Period” is defined in Section 3.4(b) of this Agreement.

“Restricted Period” in defined in Section 6.10(a) of this Agreement.

“Retained Employees” means those individuals set forth on Schedule 1.1E.

“Retained Intellectual Property” is defined in Section 2.2(b)(xi) of this
Agreement.

“Review Period” is defined in Section 3.4(b) of this Agreement.

 

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“SCPR” is defined in the definition of North Charleston Sublease in Section 1.1
of this Agreement.

“Seller” is defined in the Preamble to this Agreement.

“Seller Contract” means any Contract to which Seller is a party.

“Seller Cure Period” is defined in Section 10.1(b)(i) of this Agreement.

“Seller Engineering Employees” means the engineering employees who are employed
by Seller or any of its Subsidiaries in Seller’s Dallas, Texas facilities as of
the Closing Date and set forth on Schedule 6.10(c)(i) (which Schedule will be
updated at Closing to reflect new hires) excluding the engineering employees set
forth on Schedule 6.10(c)(ii).

“Seller 401(k) Plan” is defined in Section 8.6(b) of this Agreement.

“Seller Indemnified Persons” is defined in Section 11.3(a) of this Agreement.

“Seller Senior Credit Agreement” means that certain Credit Agreement, dated as
of December 22, 2004, among Seller, as borrower, the several lenders party
thereto, Lehman Commercial Paper Inc., as administrative agent, JPMorgan Chase
Bank, N.A., as syndication agent and Goldman Sachs Credit Partners L.P., as
documentation agent.

“Seller Supply Agreements” means the supplier and sub-contractor agreements
entered into by Seller in connection with the Business.

“Site Development and Incentive Agreement” means (i) that certain Project
Emerald Confidential Site Development and Incentive Agreement by and among
Seller, on behalf of Project Emerald, the South Carolina Department of Commerce,
SCPR, Charleston County, South Carolina and the Charleston County Airport
District and (ii) that certain Confidential Initial Site Development and
Incentive Agreement between Seller on behalf of itself and two other entities;
the South Carolina Department of Commerce; SCPR; Charleston County, South
Carolina and the Charleston County Airport District, dated November 29, 2004.

“Software” means any and all software of any type (including programs,
applications, middleware, utilities, tools, drivers, firmware, microcode,
scripts, batch files, JCL files, instruction sets and macros) and in any form
(including source code, object code and executable code), databases and
associated data and related documentation, and all rights arising out of or
associated with any of the foregoing, in each case in any jurisdiction in the
world.

“SOW Administrative Agreement” is defined in Section 9.1(e)(xvii) of this
Agreement.

“SOW Side Letter” is defined in Section 9.1(e)(xii) of this Agreement.

“SOW Supply Agreement” is defined in Section 9.1(e)(viii) of this Agreement.

“SOW Warranty Agreement” is defined in Section 9.1(e)(xvi) of this Agreement.

 

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“Special Initiatives Agreement” means that certain special initiatives letter
agreement dated as of April 17, 2009 by and between Seller and Boeing.

“Straddle Period” means any Tax year or period beginning on or before the
Closing Date and ending after the Closing Date.

“Subsidiary” or “Subsidiaries” means, with respect to any Person, any
corporation, limited liability company, partnership or other legal entity of
which such Person (either alone or through or together with any other
Subsidiary) owns, directly or indirectly, more than fifty percent (50%) of the
stock or other equity interests the holder of which is generally entitled to
vote for the election of the board of directors or other governing body of such
corporation, limited liability company, partnership or other legal entity.

“Supplied Product” is defined in Section 11.2(c) of this Agreement.

“Supplier Infringement Claim” is defined in Section 11.2(c) of this Agreement.

“Tangible Personal Property” is defined in Section 2.2(a)(ii) of this Agreement.

“Tax” or “Taxes” means a tax or taxes of any kind or nature, or however
denominated, including Liability for federal, state, local or foreign sales,
use, transfer, registration, ad valorem, business and occupation, value added,
excise, severance, natural resources, environmental, stamp, premium, windfall
profit, customs, duties, real property, personal property, capital stock, social
security, unemployment, disability, payroll, license, employee, fee in-lieu of a
Tax or other withholding, or other tax, of any kind whatsoever, whether disputed
or not, including any interest, penalties or additions to tax or additional
amounts in respect to the foregoing, including any transferee or secondary
Liability for a tax and any Liability assumed by agreement or arising as a
result of being or ceasing to be a member of any affiliated group, or being
included or required to be included in any tax return relating thereto;
provided, however, that “Tax” or “Taxes” shall not include any Income Taxes or
Transfer Taxes.

“Tax Authority” means any Governmental Entity having the power to regulate,
impose or collect Taxes, including the IRS and any state department of revenue.

“Tax Benefit” is defined in Section 11.5(b) of this Agreement.

“Tax Benefit Objection Notice” is defined in Section 11.5(b) of this Agreement.

“Tax Returns” means, with respect to any Tax, any information return for such
Tax, and any return, report, statement, declaration, claim for refund or
document filed or required to be filed under the Law for such Tax; provided,
however, that “Tax Returns” shall not include any “Income Tax Returns.”

“Terminating Buyer Breach” is defined in Section 10.1(b)(ii) of this Agreement.

“Terminating Seller Breach” is defined in Section 10.1(b)(i) of this Agreement.

 

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“Termination and Mutual Release Agreement” is defined in Section 6.16 of this
Agreement.

“Third Party Claim” is defined in Section 11.4(a) of this Agreement.

“Trademarks” means any and all of the following, and all rights arising out of
or associated therewith, in each case, in any jurisdiction in the world:
trademarks; service marks; certification marks; trade names; corporate names;
domain names; logos; trade dress; and other protectable indicia of source or
origin, including unregistered and common law rights in the foregoing; all
translations, adaptations, derivations and combinations of any of the foregoing;
all goodwill associated with each of the foregoing; and all registrations of and
applications to register any of the foregoing.

“Trade Secrets” means any and all of the following, and all rights associated
therewith, in each case, in any jurisdiction in the world: trade secrets;
know-how; and other confidential or proprietary information; in each case in any
form or medium, and which in each case may include research and development
plans or results, formulas, compositions, manufacturing and production processes
and techniques, manufacturing plans, setup methodologies, facilities and process
flow, technical data, designs, drawings, specifications, customer and supplier
lists, pricing and cost information, financial reports and information, and
business and marketing plans and proposals.

“Transaction Documents” means, collectively, this Agreement, including the
Schedules and Exhibits to this Agreement, the Bill of Sale, Assignment and
Assumption Agreement, the Intellectual Property Assignments, the Transition
Services Agreement, the Intellectual Property License Agreement, the Engineering
Services Agreement, the SOW Supply Agreement, the Termination and Mutual Release
Agreement, the North Charleston Sublease Assumption, the GA Sublease Assumption,
the Facilities Bill of Sale, Assignment and Assumption Agreement, the Boeing
Guaranty, the SOW Side Letter, the SOW Warranty Agreement, the SOW
Administrative Agreement, the 747 Amendment, the 767 Amendment, the 777
Amendment and every other Contract, certificate, instrument and document
executed and delivered at the Closing in accordance with Sections 9.1 and 9.2
hereof.

“Transaction Expenses” means, as to a Party, the fees, costs and expenses
incurred by such Party and its Affiliates in connection with the investigation,
diligence, negotiation, preparation, execution and delivery of this Agreement
and the Transaction Documents, and performance of the transactions contemplated
hereby and thereby, including accounting, legal, consulting and other
professional service fees, expenses and disbursements of consultants, advisors,
financing sources (including any cost, expense, fee, premium or penalty
associated with the Lender Waiver) and other Representatives, but excluding any
Transfer Taxes.

“Transfer Taxes” means all transfer, documentary, sales, use, stamp,
registration and other such similar Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement and the transactions
contemplated hereby; provided, however, that for the avoidance of doubt
“Transfer Taxes” shall not include any Income Taxes payable by reason of the
transactions contemplated by this Agreement.

 

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“Transferred Employees” is defined in Section 8.1 of this Agreement.

“Transferred Permits” is defined in Section 2.2(a)(vii) of this Agreement.

“Transition Services Agreement” is defined in Section 9.1(e)(vi) of this
Agreement.

“TSCA” is defined in the definition of Environmental Laws in Section 1.1 of this
Agreement.

“UE Offer” is defined in Section 8.3(c) of this Agreement.

“Union” means the District Lodge 96 of the International Association of
Machinists and Aerospace Workers.

“Union Employees” is defined in Section 8.2(f) of this Agreement.

“United States” and “U.S.” each means the United States of America.

“Vought SBP Activity Invention(s)” is defined in the 787 Supply Agreement.

“Vought SBP Activity Proprietary Information” is defined in the 787 Supply
Agreement.

“WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988,
as amended.

“Wetlands Permit” is defined in Section 6.3(d) of this Agreement.

Section 1.2 Construction. For purposes of this Agreement:

(a) Whenever the context requires, the singular number will include the plural,
and vice versa, the masculine gender will include the feminine and neuter
genders, the feminine gender will include the masculine and neuter genders, and
the neuter gender will include masculine and feminine genders.

(b) The words “include” and “including,” and variations thereof, will not be
deemed to be terms of limitation, but rather will be deemed to be followed by
the words “without limitation.”

(c) Except as otherwise indicated, all references in this Agreement to
“Schedules,” “Sections” and “Exhibits” are intended to refer to Schedules,
Sections and Exhibits to this Agreement.

(d) The terms “hereof,” “hereunder,” “herein” and words of similar import will
refer to this Agreement as a whole and not to any particular provision of this
Agreement.

(e) Each Party has participated in the drafting of this Agreement, which each
Party acknowledges is the result of extensive negotiations between the Parties,
and consequently, this Agreement will be interpreted without reference to any
rule or precept of Law to the effect that any ambiguity in a document be
construed against the drafter.

 

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(f) To the extent any definition provided in Section 1.1 refers to a definition
in the 787 Supply Agreement (each, a “Referenced Definition”) and the applicable
Referenced Definition has embedded in it other definitions from the 787 Supply
Agreement, then for purposes of interpreting the Referenced Definition such
embedded definitions shall have the meanings ascribed to such terms in the 787
Supply Agreement.

(g) For the avoidance of doubt, “representations and warranties” will not be
deemed to be “agreements” between the Parties for purposes of Sections 9.1(b),
9.2(b), 10.1(c), 11.2(a)(ii) and 11.3(a)(ii).

ARTICLE II

PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF LIABILITIES

Section 2.1 Purchase of Assets and Assumption of Certain Liabilities. Upon the
terms and subject to the conditions of this Agreement and the other Transaction
Documents, on the Closing Date:

(a) Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer
shall purchase and acquire from Seller, the Purchased Assets, free and clear of
all Encumbrances, other than Permitted Encumbrances; and

(b) Buyer shall assume, and agree to perform, pay and discharge, the Assumed
Liabilities.

Section 2.2 Purchased and Excluded Assets.

(a) The “Purchased Assets” shall mean all of Seller’s right, title and interest
in and to the Assets that are owned, leased, licensed, used or held for use by
Seller in connection with the Business (other than the Excluded Assets), in each
case wherever located, including the following:

(i) (A) the written Seller Contracts relating to the Business that are both
(1) in effect as of the date hereof and (2) set forth on Schedule 2.2(a)(i) and
(B) any written Contract primarily related to the Business entered into by
Seller between the date hereof and the Closing in compliance with this Agreement
(the “Purchased Contracts”);

(ii) all machinery, equipment, equipment subassemblies, tools, spare and
replacement parts, packaging materials, storage and shipping materials,
vehicles, computer hardware and other hardware (including servers, routers,
desktops, laptops, peripherals and mobile computing devices), trade fixtures,
furniture, furnishings, office equipment and supplies, telephone and
communications equipment and any other fixed assets or tangible personal
property used or held for use in connection with the Business, including in each
case those items listed on Schedule 2.2(a)(ii), and including all of the
foregoing located at the North Charleston Facility (the “Tangible Personal
Property”);

 

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(iii) all inventory, including raw materials, work-in-process and finished goods
inventories, tooling and supplies used or held for use in connection with the
Business and including any of the foregoing held in consignment, bailment, or
other similar arrangement by any third party or Affiliates of Seller in
connection with the Business (the “Inventory”), in each case as in existence on
the Closing Date;

(iv) the North Charleston Facility (including all buildings, structures and
improvements thereon and all fixtures attached thereto), but excluding the North
Charleston Real Property;

(v) all rights to payments arising out of Purchased Contracts and all accounts
and notes receivable of the Business (except to the extent arising under any
Excluded Contract), however arising, including, in each case, all rights, Claims
and remedies relating thereto and any related deposits, security and collateral
therefor (“Accounts Receivable”), in each case as in existence on the Closing
Date;

(vi) all of the Purchased Intellectual Property;

(vii) except as set forth on Schedule 2.2(b)(viii), all Governmental
Authorizations used or held for use by Seller in connection with the operation
of the Business at the North Charleston Facility and all pending applications
therefor or renewals thereof (the “Transferred Permits”);

(viii) all credits, prepaid expenses and other items, deferred charges, advance
payments, security (including with respect to any wetland permit) and other
deposits (including in respect of bonding obligations of the Business) and
claims for refunds or reimbursements, in each case, relating to the Business or
any of the Purchased Assets or Assumed Liabilities (except to the extent arising
under any Excluded Contract);

(ix) all Claims, rights and remedies of Seller against any third parties arising
out of or relating to any of the Purchased Assets or Assumed Liabilities;

(x) all rights under or pursuant to any warranties, representations and
guarantees made by suppliers, manufacturers, contractors or other Persons in
connection with any products or services provided to Seller in connection with
the Business or with respect to any Purchased Asset (except to the extent
arising under any Excluded Contract);

(xi) all books, records, ledgers, files, documents, correspondence, lists
(including supplier lists and records), files, plats, specifications, surveys,
drawings, advertising and promotional materials, reports (including
manufacturing, research and development and production reports and records),
testing results, certification materials, service and warranty records, quality
records related to Products delivered to Boeing prior to the Closing Date,
equipment logs, environmental, safety and health plans, policies and procedures,
copies of all personnel records related to Transferred Employees (subject to
Buyer obtaining any releases required by applicable Law from the Transferred
Employees), and other materials and information (in whatever medium) in each
case, to the extent relating exclusively to the Business or to any of the
Assumed Liabilities, Purchased Assets or Purchased Intellectual Property (the
“Business Books and Records”), in each case, as in existence as of the Closing
Date; provided that Seller may retain, subject to Section 6.9, copies of the
foregoing; and

 

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(xii) all goodwill associated or arising in connection with the Business or any
of the Purchased Assets, and to the extent assignable, IP addresses, telephone
and fax numbers and listings for the (789) prefix.

(b) Excluded Assets. Notwithstanding the foregoing, except to the extent of
rights expressly provided in the Transition Services Agreement, the Engineering
Services Agreement, the SOW Supply Agreement and the Intellectual Property
License Agreement, Seller will retain all right, title and interest in and to,
and the Purchased Assets will not consist of, all of Seller’s right, title and
interest in and to the following assets, rights or properties (the “Excluded
Assets”):

(i) except as set forth in Section 6.13, all cash or cash equivalents, including
all marketable securities, certificates of deposit and other similar liquid
Assets, at the time of the Closing;

(ii) all bank and other depository accounts and safe deposit boxes of Seller;

(iii) all refunds of and credits for Taxes, Income Taxes and other Tax assets
and Tax loss carry forwards relating to any period or portion thereof ending on
or prior to the Closing Date;

(iv) any Employee Benefit Plans (including any Multiemployer Plan) and Assets
(including any related insurance proceeds) of, or any rights of Seller in, the
Employee Benefit Plans and any Contracts that constitute (or provide for
services under) Employee Benefit Plans;

(v) any of Seller’s corporate charters, franchises, seals, minute books, equity
record books and other similar documents relating to the organization,
governance and existence of Seller or any of its Subsidiaries;

(vi) any Contract that is not a Purchased Contract, including any Collective
Bargaining Agreement, and all rights arising under such Contracts (collectively,
the “Excluded Contracts”);

(vii) except as set forth on Schedule 2.2(a)(ii) and other than Purchased
Intellectual Property, Seller’s business, assets and operations (including all
assets, properties and other rights used or held for use in connection with
engineering, design, supply management and business management activities)
located or conducted at its Milledgeville, Georgia and Dallas, Texas facilities;

(viii) the Governmental Authorizations, pending applications therefor or
renewals thereof, set forth on

Schedule 2.2(b)(viii);

(ix) all insurance policies of Seller related to the Business and, subject to
Section 6.13, any Claims or rights thereunder;

 

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(x) any intercompany Accounts Receivable between Seller and Seller’s Affiliates
(other than Wesco Holdings, Inc. and its Subsidiaries);

(xi) (a) all Intellectual Property owned by Seller (including Background
Proprietary Information of Seller and Background Invention(s) of Seller) other
than the Purchased Intellectual Property and (b) all other Intellectual Property
of Seller (including Background Proprietary Information of Seller and Background
Invention(s) of Seller) other than the Purchased Intellectual Property
(collectively, the “Retained Intellectual Property”);

(xii) all Tax and Income Tax books and records and all Income Tax Returns and
Tax Returns of Seller;

(xiii) any securities, shares of capital stock or equity or other ownership
interest of Seller in any other Person (including any Subsidiary);

(xiv) all books, records, ledgers, files, documents, correspondence, lists
(including supplier lists and records), files, plats, specifications, surveys,
drawings, advertising and promotional materials, reports (including
manufacturing, research and development and production reports and records),
testing results, certification materials, service and warranty records,
equipment logs, copies of all personnel records related to Transferred Employees
(for whom any release required by applicable Law has not been obtained), and
other materials and information (in whatever medium), other than the Business
Books and Records;

(xv) except as set forth on Schedule 2.2(a)(ii) and other than Purchased
Intellectual Property, Business Books and Records and Purchased Contracts, all
Assets, properties and other rights used or held for use in connection with the
provision of services and conduct or performance of support functions (and the
conduct or performance of functions and other activities relating to such
services and functions) provided to the North Charleston Facility and the
Business by the other facilities, businesses and operational or business units
of Seller, including information technology, human resources, supply chain
management, configuration management, benefits administration, payroll,
accounting, treasury, legal, management, and other general and administrative
services, as well as any other services to be provided pursuant to the
Transition Services Agreement or the Engineering Services Agreement;

(xvi) all rights and Claims in respect of, arising out of or relating to any
Excluded Liability;

(xvii) any interest in real property (other than the North Charleston Real
Property and any interest set forth on Schedule 2.2(b)(xvii));

(xviii) the Transaction Documents, the Non-Disclosure Agreement, the Special
Initiatives Agreement, and all rights or Claims of Seller arising under or
relating to the foregoing documents and agreements; and

(xix) the tangible property and other assets set forth in Schedule 2.2(b)(xix).

 

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Section 2.3 Assumed and Excluded Liabilities.

(a) The “Assumed Liabilities” shall consist of any and all Liabilities of Seller
to the extent arising out of, relating to or resulting from the Business (other
than the Excluded Liabilities and any and all Liabilities of Seller arising out
of or related to Seller’s provision of services or products to, or other
dealings with, the Business from and after the Closing), including:

(i) any and all Liabilities of Seller arising out of, relating to, or incurred
pursuant to, the Purchased Contracts (including any and all Seller Supply
Agreements that are Purchased Contracts);

(ii) any obligations of Seller set forth in Schedule 2.3(a)(ii) or assumed by
Buyer pursuant to Article VIII, in each case related to the employment of
Employees who become Transferred Employees, including any obligations of Seller
(A) for accrued salaries, wages and bonuses owed or payable to Transferred
Employees (and related withholdings and payroll Taxes); (B) for accrued but
unpaid or unused vacation of Transferred Employees; and (C) for reimbursable
business expenses of Transferred Employees incurred in the ordinary course of
business consistent with past practice (other than the Excluded Liabilities
described in Section 2.3(b)(ii)); and

(iii) South Carolina personal property Taxes.

(b) Excluded Liabilities. Notwithstanding anything to the contrary, Buyer shall
not assume or otherwise be obligated to pay, perform or discharge the following
Liabilities, except to the extent accrued in the categories listed in Appendix A
and in the Adjusted Net Investment Amount on the Final Statement (all of such
Liabilities not so assumed by Buyer being referred to herein as the “Excluded
Liabilities”):

(i) any and all Environmental Claims (whether asserted before or after the
Closing) arising out of, relating to or resulting from the conduct of the
Business prior to the Closing;

(ii) subject to Article VIII, any and all Claims by or for the benefit of any
current or former employee of the Business (whether asserted before or after the
Closing) and not disclosed on the Disclosure Schedules arising out of, relating
to or resulting from (A) any tort of which Seller has Knowledge committed by
Seller against any employee of Seller, or breach or default by Seller of any
Contract between Seller and any of its employees, of which Seller has Knowledge,
or violation of any Law by Seller relating to the employment of the current or
former employee asserting such Claim of which Seller has Knowledge or (B) any
actual or alleged discrimination by the Company, any of its Subsidiaries or
their respective supervisory employees against any such employee, in the case of
each of clause (A) and clause (B), to the extent such Claim is asserted prior to
the Closing or relates to conduct of Seller occurring before the Closing;

(iii) subject to Schedule 2.3(a)(ii) and Article VIII, any and all Claims
arising out of, relating to or resulting from a Collective Bargaining Agreement
between the Union and Seller other than any such Claims involving recall rights
of laid-off employees after the Closing;

 

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(iv) except for Liabilities under or pursuant to any Purchased Contracts and
except to the extent set forth in Schedule 2.3(a)(ii) or Article VIII or
pursuant to the Transition Services Agreement, any and all Liabilities arising
out of, relating to or resulting from any Employee Benefit Plan, any offer
letter or any employee-related program, policy, funding vehicle or Contract with
any employee of Seller maintained or implemented by Seller or any of its
Affiliates, whether such Liability arises prior to, on or after the Closing
Date;

(v) any and all Liabilities, whether such Liabilities arise prior to, on or
after the Closing Date, arising out of, relating to or resulting from (A) any
Multiemployer Plan of Seller or in which Seller participates (including any
withdrawal Liability or other Liability related to unfunded or under-funded
benefits), or (B) any obligation of Seller to provide or make available
post-retirement welfare benefits or welfare benefit coverage to any current or
former officer, director, stockholder or employee of the Business or Seller;

(vi) any and all Liabilities of Seller arising out of, relating to or resulting
from Taxes and Income Taxes allocable to Seller under Section 7.1 hereof (except
for Assumed Liabilities under Section 2.3(a)(ii) and Section 2.3(a)(iii));

(vii) any Indebtedness, including any Guarantees not listed on Schedule 6.20 or
otherwise permitted hereunder;

(viii) any and all Liabilities (other than Liabilities disclosed hereunder or in
the Disclosure Schedules hereto and other than Liabilities to the extent arising
out of, relating to or resulting from any infringement, misappropriation or
unlawful use of any Intellectual Property of any Person by Seller in the
operation of the Business prior to the Closing) arising out of, relating to or
resulting from any violation of Law by Seller prior to the Closing to the extent
that such Liabilities exceed, in the aggregate, $10,000,000;

(ix) any and all Liabilities not arising out of, relating to or resulting from
the Business;

(x) except to the extent set forth in Schedule 2.3(a)(ii) or Article VII or
pursuant to the Transition Services Agreement, any and all Liabilities of Seller
to the extent arising out of, relating to or resulting from the Excluded Assets
set forth in Sections 2.2(b)(i), (ii), (v), (vi), (vii), (ix), (x), (xi)(b),
(xiii), and (xviii) (other than Liabilities for which Buyer is expressly liable
pursuant to the Transition Services Agreement, the Engineering Services
Agreement, the Intellectual Property License Agreement, and with respect to
recall rights under the Collective Bargaining Agreement after the Closing); and

(xi) any and all Liabilities of Seller arising out of, relating to or resulting
from the Excluded Assets described in Sections 2.2(b)(viii), (xi)(a), (xv) and
(xvii) to the extent not related to the conduct of the Business prior to the
Closing.

 

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ARTICLE III

AGGREGATE CONSIDERATION AND CLOSING

Section 3.1 Closing. The closing of the transactions contemplated by this
Agreement (the “Closing”) will occur as promptly as practicable, but (subject to
the proviso below) in no event more than three (3) Business Days, following the
satisfaction or waiver of all conditions to the Closing set forth in Article IX
(other than any of such conditions that by its nature is to be satisfied at the
Closing, but subject to the satisfaction or waiver of such condition), at 10:00
a.m., local time, at the offices of Kirkland & Ellis LLP, 601 Lexington Avenue,
New York, New York 10022, or at such other place on such other date as the
Parties may agree in writing; provided that the Closing shall not occur prior to
the thirteenth (13th) Business Day following the date hereof, unless otherwise
agreed by the Parties in writing. The date on which the Closing actually occurs
will be referred to as the “Closing Date,” and the Closing will be deemed
effective as of 11:59 p.m., Eastern Daylight Time, on the Closing Date.

Section 3.2 Aggregate Consideration. Subject to the terms and conditions
contained in this Agreement and the Termination and Mutual Release Agreement, at
the Closing, Buyer shall pay to Seller an amount equal to Five Hundred
Ninety-Eight Million Dollars ($598,000,000.00) (the “Closing Payment Amount”),
which amount shall be subject to adjustment as provided in Section 3.3 below, by
wire transfer of immediately available funds to the account designated in
writing by Seller (the Closing Payment Amount, together with the aggregate
amount of the Assumed Liabilities, sometimes being referred to herein as the
“Aggregate Consideration”); provided, that, in the event that any Indebtedness
remains outstanding under the Seller Senior Credit Facility as of the Closing
Date, a portion of the Closing Payment Amount equal to the Pay-off Amount will
be paid by Buyer for the account of Seller to the agent under the Seller Senior
Credit Facility by wire transfer of immediately available funds to the account
designated in the Pay-off Letter and such payment shall be deemed to constitute
payment to Seller of a portion of the Closing Payment Amount equal to the
Pay-off Amount.

Section 3.3 Estimated Aggregate Consideration Adjustment.

(a) No later than five (5) Business Days prior to the Closing Date, Seller shall
deliver to Buyer a written statement (the “Estimated Preliminary Statement”),
prepared in good faith and in accordance with the Agreed Methodology, setting
forth an estimate of the Closing Adjusted Net Investment Amount (the “Estimated
Adjusted Net Investment Amount”) in the same detail as reflected on Appendix A
and including a reasonable explanation of any new line item categories not shown
on Appendix A.

(b) If the Estimated Adjusted Net Investment Amount exceeds the Base Adjusted
Net Investment Amount, the Closing Payment Amount shall be increased
dollar-for-dollar by the amount of such excess, and if the Estimated Adjusted
Net Investment Amount is less than the Base Adjusted Net Investment Amount, the
Closing Payment Amount shall be reduced dollar-for-dollar by the amount of such
shortfall.

 

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Section 3.4 Aggregate Consideration Adjustment.

(a) Buyer shall deliver, or cause to be delivered, to Seller as soon as
practicable, but in no event more than ninety (90) days after the Closing Date,
a preliminary written statement (the “Preliminary Statement”) setting forth the
Adjusted Net Investment Amount as of the Closing Date (the “Closing Adjusted Net
Investment Amount”), which amount shall be determined in accordance with the
Agreed Methodology.

(b) Seller shall have sixty (60) days to review the Preliminary Statement from
the date of its receipt thereof (the “Review Period”). During the Review Period,
Seller shall have reasonable access during normal business hours to the books
and records of the Business (and to the non-privileged work papers of Buyer
relating to the Business or the Purchased Assets that were used in preparing the
Preliminary Statement) to the extent required in connection with such review,
subject to Section 6.9. If Seller objects to any aspect of the Preliminary
Statement, Seller shall deliver a written notice of objection (the “Objection
Notice”) to Buyer at or prior to the expiration of the Review Period; provided
that Seller may so object to the Preliminary Statement based only on the
existence of mathematical errors therein, on the failure of the Preliminary
Statement (or the calculations contained therein and determinations made in
connection therewith) to be prepared or determined in accordance with the Agreed
Methodology, or any other failure of Buyer to have complied with this
Section 3.4, and on no other basis. The Objection Notice shall specify any
adjustment to the Preliminary Statement proposed by Seller and the basis
therefor, including in each case the specific items proposed to be adjusted (to
the extent determinable), the specific Dollar amount of each such adjustment and
an explanation of how such proposed adjustment was calculated. If Seller
delivers an Objection Notice to Buyer prior to the expiration of the Review
Period as provided in this Section 3.4(b), Buyer and Seller shall, for a period
of thirty (30) days thereafter (the “Resolution Period”), exchange reasonably
detailed explanations of any disagreement and attempt to resolve the matters
properly contained therein, and any written resolution, signed by each of Buyer
and Seller, as to any such matter shall be final, binding, conclusive and
non-appealable for purposes of this Section 3.4. Except to the extent properly
challenged in an Objection Notice as provided in this Section 3.4(b), or in the
event Seller does not deliver an Objection Notice to Buyer as provided in this
Section 3.4(b) prior to the expiration of the Review Period, Seller shall be
deemed to have agreed to the Preliminary Statement in its entirety, which
Preliminary Statement or undisputed portions thereof (as the case may be) shall
be final, binding, conclusive and non-appealable for purposes of this
Section 3.4.

(c) If, at the conclusion of the Resolution Period, Buyer and Seller have not
reached an agreement with respect to all disputed matters properly contained in
the Objection Notice, then within ten (10) Business Days thereafter, Buyer and
Seller shall submit for resolution those of such matters remaining in dispute to
PricewaterhouseCoopers LLC, or if such firm is unavailable or unwilling to so
serve, to a mutually acceptable nationally recognized independent accounting
firm (the “Neutral Auditor”). The Neutral Auditor shall resolve (based solely on
the written presentations of Buyer and Seller and not by independent review)
only those matters submitted to it in accordance with the first sentence of this
Section 3.4(c). The resolution of any such disputed matter by the Neutral
Auditor shall be limited (i) to whether the Preliminary Statement and the
calculations contained therein and determinations made in connection therewith
were prepared, calculated and determined with respect to such disputed

 

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matter in accordance with the Agreed Methodology and this Section 3.4; and
(ii) if the Preliminary Statement has not been so prepared or if necessary to
correct any mathematical error in computing the Adjusted Net Investment Amount,
to modifying the Preliminary Statement and the calculations of the Closing
Adjusted Net Investment only to the extent necessary to reflect the
recalculation of such disputed matter in accordance with such Agreed
Methodology. Buyer and Seller shall direct the Neutral Auditor to render a
resolution of all such disputed matters within thirty (30) days after its
engagement or such other period as is agreed upon in writing by Buyer and
Seller. With respect to each disputed item, Buyer and Seller shall instruct the
Neutral Auditor not to assign a value greater than the greatest value for such
item assigned by Buyer, on the one hand, or Seller, on the other hand, or less
than the smallest value for such item assigned by Buyer, on the one hand, or
Seller, on the other hand. The resolution of the Neutral Auditor shall be set
forth in a written statement delivered to each of the Parties and shall be
final, binding, conclusive and non-appealable for all purposes hereunder. The
Preliminary Statement, once modified and/or agreed to in accordance with
Section 3.4(b) or this Section 3.4(c), shall become the “Final Statement.”

(d) All fees and expenses relating to the work performed by the Neutral Auditor
shall be split equally between the Parties, and each of them shall promptly
advance to the Neutral Auditor such Party’s share of the expected fees and
expenses (including any initial engagement fee) of the Neutral Auditor (as
determined by the Neutral Auditor) upon the request of the Neutral Auditor.
Except as provided in the preceding sentence, all other costs and expenses
incurred by the Parties in connection with resolving any dispute hereunder
before the Neutral Auditor shall be borne by the Party incurring such cost and
expense.

(e) Amounts payable pursuant to the determination of the Closing Adjusted Net
Investment Amount on the Final Statement will be paid as follows:

(i) If the Closing Adjusted Net Investment Amount as stated on the Final
Statement is less than the Estimated Adjusted Net Investment Amount, then Seller
shall pay to Buyer the amount by which such Closing Adjusted Net Investment
Amount is less than the Estimated Adjusted Net Investment Amount, by wire
transfer of immediately available funds to the account designated by Buyer in
writing, within three (3) Business Days after the date on which the Preliminary
Statement becomes the Final Statement.

(ii) If the Closing Adjusted Net Investment Amount as stated on the Final
Statement is greater than the Estimated Adjusted Net Investment Amount, then
Buyer shall pay to Seller the amount by which such Closing Adjusted Net
Investment Amount is greater than the Estimated Adjusted Net Investment Amount,
by wire transfer of immediately available funds to the account designated by
Seller in writing, within three (3) Business Days after the date on which the
Preliminary Statement becomes the Final Statement.

Section 3.5 Allocation of Aggregate Consideration.

(a) Within one hundred and twenty (120) days after the Closing Date, Buyer will
provide to Seller its proposed allocation for tax purposes of the Aggregate
Consideration (and all other capitalizable costs). The Aggregate Consideration
shall be allocated among (i) the Purchased Assets, (ii) the termination of the
787 Supply Agreement and release of Claims and

 

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resolution of any and all rights and obligations owed to by each of Seller and
Boeing to the other related to the 787 Supply Agreement pursuant to the
Termination and Mutual Release Agreement, and (iii) the other rights granted by
or agreements of Seller pursuant to the other Transaction Documents. The amount
allocated to the Purchased Assets shall be set forth on IRS Form 8594 and any
required exhibits thereto, prepared in accordance with Section 1060 of the Code
(the “Allocation Statement”).

(b) Seller will review the Allocation Statement and, to the extent Seller in
good faith disagrees with the content of the Allocation Statement, Seller will,
within sixty (60) days after receipt of the Allocation Statement, provide
written notice to Buyer of such disagreement or will be deemed to have indicated
its concurrence therewith. Buyer and Seller will attempt in good faith to
resolve any such disagreement. If Buyer and Seller are unable to reach a good
faith agreement as to the content of the Allocation Statement within thirty
(30) days after Buyer’s receipt of Seller’s written notice of disagreement,
Buyer and Seller will each file its own IRS Form 8594 using its own allocation
statement consistent with its own allocation of the Aggregate Consideration.

(c) If Seller and Buyer agree on the Allocation Statement or any modification
thereof, Seller and Buyer will report the allocation of the total consideration
among the Purchased Assets in a manner consistent with such Allocation Statement
or modification and will act in accordance with such Allocation Statement in the
preparation and timely filing of all Income Tax Returns (including Form 8594
with their respective federal Income Tax Returns for the taxable year that
includes the Closing Date and any other forms or statements required by the
Code, the IRS or any applicable Tax Authority). Seller and Buyer agree to
promptly provide the other Party with any additional information and reasonable
assistance required to complete Form 8594 or compute Income Taxes arising in
connection with (or otherwise affected by) the transaction contemplated
hereunder.

(d) Buyer and Seller will promptly inform each other in writing of any challenge
by any Governmental Entity to any allocation made pursuant to this Section 3.5
and each agrees to consult with and keep the other informed with respect to the
status of, and any discussion, proposal or submission with respect to, any such
challenge.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants to Buyer as follows:

Section 4.1 Organization and Qualification. Seller is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Delaware. Seller has the requisite corporate power and authority to own, lease,
sublease or otherwise hold and operate the Purchased Assets and to carry on the
Business as presently conducted. Seller is duly qualified or licensed and is in
good standing to do business in each jurisdiction where Seller conducts its
business or where the character of the properties owned, leased, subleased or
operated by Seller or the nature of its business makes such qualification,
licensing or good standing necessary, except where the failure to be so
qualified, licensed or in good standing would not have and

 

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would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. Seller has made available to Buyer complete and correct
copies of the certificate of incorporation and bylaws of Seller.

Section 4.2 Authorization; Enforceability. Seller has the requisite corporate
power and authority to enter into, execute and deliver this Agreement and each
other Transaction Document to which it is a party, to perform all of the
obligations to be performed by it hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by
Seller of this Agreement and each other Transaction Document to which it is a
party, the performance of its obligations hereunder and thereunder and the
consummation by Seller of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action, and no other corporate
action or proceeding is necessary to authorize the execution and delivery of
this Agreement and each other Transaction Document to which Seller is a party,
the performance of its obligations hereunder and thereunder or the consummation
of the transactions contemplated hereby and thereby. This Agreement has been,
and each of the other Transaction Documents to which Seller is a party will have
been at the Closing, duly authorized, executed and delivered by Seller and,
assuming due authorization, execution and delivery by Buyer, this Agreement
constitutes, and each of the other Transaction Documents will constitute at
Closing, Seller’s valid and binding obligation, enforceable against it in
accordance with its respective terms, subject only to (i) applicable bankruptcy,
insolvency, reorganization and moratorium Laws and other Laws of general
application affecting enforcement of creditors’ rights generally and (ii) rules
or Laws governing specific performance, injunctive relief and other equitable
remedies.

Section 4.3 No Conflicts.

(a) Neither the execution and delivery of this Agreement or the other
Transaction Documents to which Seller is a party nor the performance by Seller
hereunder and thereunder conflicts or will conflict with or result in a material
breach or violation of any of the terms or provisions of its organizational
documents or result in the material breach or violation of any of the terms or
provisions of, or constitute a default under, or accelerate the performance
required by the terms of any Seller Contract, except as would not reasonably be
expected to prevent or materially delay the consummation of the transactions
contemplated hereby, nor will any such action result in any material violation
of the provisions of any material Law. The execution and delivery by Seller of
this Agreement and the other Transaction Documents to which Seller is a party
and the performance by Seller of its obligations hereunder and thereunder will
not require any additional consent or approval of, or any filing or registration
with, any creditor of Seller, any Governmental Entity or any party to any
Material Contract, except for the Consents and Governmental Authorizations set
forth on Schedule 4.3(a), and except as would not reasonably be expected to
prevent or materially delay the consummation of the transactions contemplated
hereby. Neither the execution and delivery by Seller of this Agreement and the
other Transaction Documents to which Seller is a party nor the performance by
Seller hereunder and thereunder require the Consent (either as a matter of law,
contractual obligation or otherwise) of any of Seller’s stockholders.

 

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(b) The consummation of the transactions contemplated by this Agreement and the
other Transaction Documents will not (i) conflict with, violate or result in a
breach of any term or provision of Seller’s organizational documents,
(ii) materially conflict with or violate any Law applicable to the Business, or
by which any Purchased Asset is bound or affected, (iii) result in the creation
of any material Encumbrance on the Business or any material Purchased Asset, or
(iv) except as provided on Schedule 4.3(b), require any Consent or approval
under, result in any material breach of or any loss of any material benefit
under, or modify, accelerate or terminate any rights or obligations under, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
vesting, amendment, acceleration or cancellation pursuant to, any Material
Contract or material Transferred Permit.

Section 4.4 Financial Information. The calculation of the Adjusted Net
Investment Amount as of March 29, 2009 attached hereto as Appendix A reflects
numbers used to prepare Seller’s GAAP financials and was prepared in accordance
with (a) the books and records of Seller and its Subsidiaries and (b) the
accounting practices, policies and methodologies used by Seller in preparing its
internal, unaudited financial statements. Schedule 4.4 sets forth copies of
internal, unaudited balance sheets of the Business as of December 31, 2007 and
2008 and the three (3)-month period ended March 29, 2009 and the related
statements of income and cash flows for the periods then ended and Seller’s
estimate of the Adjusted Net Investment Amount as of December 31, 2008 and 2007
(together with the internal, unaudited balance sheets of the Business as of
April 26, 2009 and May 31, 2009 and the related statements of income and cash
flows for the periods then ended, the “Financial Information”). The Financial
Information was prepared in the ordinary course of business in accordance with
(A) the books and records of Seller and its Subsidiaries and (B) the accounting
practices, policies and methodologies used by Seller in preparing its internal,
unaudited financial statements. Buyer acknowledges that the Financial
Information was not prepared in accordance with GAAP, does not include all of
the information required to be provided on a balance sheet or statement of
income or cash flow prepared in accordance with GAAP, includes estimates (which
were based upon assumptions that management believed to be reasonable at the
time made) and does not purport to present fairly the financial position,
results of operations or cash flows of the Business but does represent Seller’s
good faith estimate of the Adjusted Net Investment Amount as of March 29, 2009.

Section 4.5 Absence of Certain Developments. Except as set forth on
Schedule 4.5, from January 1, 2009 through the date of this Agreement:

(a) Seller has conducted the Business, in all material respects, in the ordinary
course of business consistent with past practice;

(b) none of the Purchased Assets has sustained or incurred any material loss or
damage (whether or not insured against) on account of fire, flood, accident or
other calamity;

(c) Seller has not moved any material tangible Assets or transferred or
relocated any employees of the Business or limited or transitioned any material
business activities utilized in satisfying its obligations under the 787 Supply
Agreement, in each case, from the North Charleston Facility to any other
location, except for such Assets, employees or business activities that have
been subsequently returned to the North Charleston Facility as of the date of
this Agreement;

 

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(d) Seller has not adopted, materially increased, terminated, materially amended
or otherwise materially modified any Employee Benefit Plan other than in the
ordinary course of business consistent with past practice or as required by
applicable Law;

(e) Seller has not changed any accounting methods or practices (including any
change in depreciation or amortization policies or rates);

(f) Seller has not entered into any Contracts or transactions or changed,
modified or amended any Contracts or transactions with any of Seller’s
Affiliates that are involved in the Business or any directors, managers,
officers or employees of the Business;

(g) Seller has not taken any action which, if taken after the date hereof, would
be a breach of Section 6.2(b) (other than Section 6.2(b)(viii)); and

(h) Seller has not committed to, or entered into any Contract to, do any of the
foregoing.

Section 4.6 Absence of Undisclosed Liabilities. As of December 31, 2008, Seller
had no material Liabilities that would be included in the Assumed Liabilities
and would be required to be reflected in balance sheets (including the notes
thereto) of the Business prepared in accordance with GAAP, other than such
Liabilities reflected on Schedule 4.6. Since December 31, 2008, Seller has not
incurred any material Liabilities that would be included in the Assumed
Liabilities and would be required to be reflected in balance sheets (including,
as of the date of this Agreement, the notes thereto) prepared in accordance with
GAAP, except (a) as disclosed on Schedule 4.6 or the other Schedules hereto,
(b) Liabilities incurred in the ordinary course of business since December 31,
2008 (to the Knowledge of Seller, as of the date of this Agreement, none of
which is a Liability for breach of warranty, tort or infringement), or
(c) Liabilities under the Transaction Documents.

Section 4.7 Title; Sufficiency and Condition of Assets. Except as disclosed on
Schedule 4.7, Seller owns all right, title and interest in and to all material
Assets owned, leased, licensed, used or held for use by Seller in connection
with the Business (other than any Intellectual Property or any Licensed
Intellectual Property, both of which are addressed in Section 4.10, and any
Excluded Assets), free and clear of all Encumbrances, except Permitted
Encumbrances and Outstanding Encumbrances. Upon delivery of the Purchased Assets
to Buyer and payment to Seller of the Closing Payment Amount, Buyer will acquire
good and valid title to such Purchased Assets (other than any Intellectual
Property or any Licensed Intellectual Property, both of which are addressed in
Section 4.10) free and clear of all Encumbrances, except Permitted Encumbrances
and Outstanding Encumbrances and Encumbrances created by Buyer. Except as
disclosed on Schedule 4.7, the Purchased Assets, together with the Assets used
to provide services under the Transaction Documents, and the rights granted to
Buyer under this Agreement and the other Transaction Documents, constitute all
material Assets (other than any Intellectual Property or any Licensed
Intellectual Property, both of which are addressed in Section 4.10, and any
Excluded Assets) necessary to conduct the Business substantially as conducted by
Seller as of the date of this Agreement. Except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
all Tangible Personal Property included in the Purchased Assets, taken as a
whole, is in reasonable operating condition and repair (after allowing for
ordinary wear and tear).

 

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Section 4.8 Inventory. Except as described on Schedule 4.8, all Inventory
(a) was acquired or produced in the ordinary course of business consistent with
past practice; (b) contains all appropriate forms of identification necessary to
be in material compliance with applicable Laws requiring configuration records
to be maintained with respect to such Inventory; and (c) is free and clear of
all Encumbrances, except for Permitted Encumbrances and Outstanding
Encumbrances.

Section 4.9 Real Property.

(a) Seller does not own fee simple title to, or hold any leasehold interest in,
any real property used or held for use by Seller in connection with the
Business, except as set forth in Schedule 4.11(a)(vii).

(b) North Charleston Sublease.

(i) Seller has a valid subleasehold interest in and to the North Charleston Real
Property free and clear of any Encumbrances, except for Permitted Encumbrances
and Outstanding Encumbrances.

(ii) Other than the interest granted to GA under the GA Sublease, Seller is in
full and complete possession of the North Charleston Real Property described in
the North Charleston Sublease and, other than the interest granted to GA under
the GA Sublease, Seller has neither assigned nor sublet any portion thereof.

(iii) Except pursuant to the Seller Senior Credit Agreement, Seller has not
assigned its interest as sub ground lessee (as defined in the North Charleston
Sublease) under the North Charleston Sublease to any other party.

(iv) To Seller’s Knowledge, there are no third parties with (A) rights of first
refusal to lease the North Charleston Real Property that have not either waived
or released such rights, or (B) other rights to lease the North Charleston Real
Property, that have not either waived or released such rights.

(c) Facilities. Other than with respect to Facilities contained within the area
subject to the GA Sublease:

(i) Except to the extent leased pursuant to a Material Contract, Seller owns the
Facilities free and clear of any Encumbrances except for Permitted Encumbrances
and Outstanding Encumbrances.

(ii) To Seller’s Knowledge, the Facilities are connected to and/or serviced by
water, sewage disposal, waste disposal, gas and electric service for the
Business’ operations therein.

 

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(d) GA Sublease. The GA Sublease (i) has been duly authorized, validly executed
and delivered by Seller and (ii) is valid and in full force and effect in
accordance with its terms against Seller. There is not any existing material
default or event of default (or event that with notice or lapse of time, or
both, would constitute a default) of the GA Sublease by Seller.

(e) Ground Lease.

(i) To Seller’s Knowledge, (A) the Ground Lease has been duly authorized,
validly executed and delivered by the parties thereto, (B) the Ground Lease is
valid and in full force and effect in accordance with its terms against the
parties thereto, and (C) there is not, under such Ground Lease, any existing
material default or event of default (or event that with notice or lapse of
time, or both, would constitute a default) by the parties to the Ground Lease.

(ii) To Seller’s Knowledge, as of the date of this Agreement, the Ground Lease
has not been modified, orally or in writing, since execution, and no
modifications are requested or pending in writing.

(iii) To Seller’s Knowledge, there is no dispute in writing between the
Charleston County Aviation Authority and SCPR concerning the Ground Lease.

(iv) Seller has completed, or caused the completion of, all construction
obligations of “Operator” under the Ground Lease, including those set forth in
Section 4.06(D) of the Ground Lease.

Section 4.10 Intellectual Property.

(a) Schedule 4.10(a) sets forth a complete and accurate list as of the date of
this Agreement of all of the following Intellectual Property that is included in
the Purchased Intellectual Property or the Intellectual Property licensed to
Buyer under the Intellectual Property License Agreement: (i) all patented or
registered Intellectual Property; (ii) all pending patent applications or other
applications for registration of Intellectual Property; and (iii) all material
Software (other than firmware). Schedule 4.10(a) also includes an indication of
whether each listed item constitutes Purchased Intellectual Property or Retained
Intellectual Property.

(b) Other than such right, title and interest that is owned or licensed by Buyer
and its Affiliates, Seller owns all right, title and interest in and to all of
the Purchased Intellectual Property and Intellectual Property licensed to Buyer
under the Intellectual Property License Agreement, including the Intellectual
Property set forth on Schedule 4.10(a), free and clear of (i) all security
interests, pledges or other consensual liens granted by Seller and (ii) to the
Knowledge of Seller, all other Encumbrances, except, in the case of the
foregoing clauses (i) and (ii), for Permitted Encumbrances and Outstanding
Encumbrances. To the Knowledge of Seller, Seller possesses a valid and
enforceable right to use the Licensed Intellectual Property. Except as set forth
on Schedule 4.10(b), each Inbound License Agreement constitutes a legal, valid,
binding and enforceable obligation of Seller and, to Seller’s Knowledge, of the
other party or parties thereto and is enforceable in accordance with its terms,
subject only to applicable bankruptcy, insolvency, reorganization and moratorium
Laws and other Laws of general

 

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application affecting enforcement of creditors’ rights generally. Except for the
Intellectual Property used by Seller to provide services pursuant to the
Transition Services Agreement, the Intellectual Property licensed to Buyer
pursuant to the Intellectual Property License Agreement and the Purchased
Intellectual Property, together with any Licensed Intellectual Property and the
other rights granted to Buyer under the Transaction Documents, includes all of
the material Intellectual Property necessary to the conduct of the Business as
currently conducted by Seller. None of Section 4.10(b) is intended to address
infringement or misappropriation of Intellectual Property of any Person because
those issues are addressed exclusively in Section 4.10(c).

(c) To the Knowledge of Seller in each case (i) Seller has not, in the operation
of the Business, in any material respect infringed, misappropriated or otherwise
made any unlawful or unauthorized use of any Intellectual Property of any
Person, (ii) the operation of the Business as currently conducted does not, in
any material respect infringe, misappropriate or otherwise make any unlawful or
unauthorized use of any Intellectual Property of any Person, and (iii) the
products sold and services performed by Seller in connection with the Business
do not, and the manufacture, use, or sale of such products or performance of
such services does not, in any material respect infringe, misappropriate or
otherwise make any unlawful or unauthorized use of any Intellectual Property of
any Person. To the Knowledge of Seller, Seller has not, as of the date of this
Agreement or in the past five (5) years immediately preceding the date of this
Agreement, received any written notices or other communications claiming,
alleging or suggesting infringement, misappropriation or other unlawful or
unauthorized usage of any Intellectual Property of any Person with respect to
the Business (including any demands or offers to license any Intellectual
Property from any Person). The Parties agree that Seller shall have no liability
for breaches of the two preceding sentences to the extent any infringement,
misappropriation or unlawful use of any Intellectual Property of any Person
would not have occurred if Seller had signed Contracts noted as unsigned on
Schedule 2.2(a)(i). To Seller’s Knowledge, no other Person is infringing,
misappropriating or otherwise making any unlawful or unauthorized use of any
Licensed Intellectual Property for which Seller has the right to enforce or any
Purchased Intellectual Property.

(d) Seller has used commercially reasonable efforts to protect the
confidentiality of any Purchased Intellectual Property of a confidential nature
(including Trade Secrets and source code). Without limiting the generality of
the foregoing, Seller has, and uses commercially reasonable efforts to enforce,
a policy requiring, each (i) employee, individual consultant and individual
contractor involved in design or development relating to the 787 Program to
execute a written agreement protecting the confidentiality of any information of
a confidential nature and requiring such Person to assign all Intellectual
Property related to the Business to Seller (“Confidentiality and Assignment
Agreements”) (the forms of which are set forth on Schedule 4.10(d)), and
(ii) employee, individual consultant of Seller working onsite at Seller’s
facility and individual contractor of Seller working onsite at Seller’s facility
that has access to material confidential information relating to the 787 Program
to execute a Confidentiality and Assignment Agreement. Without limiting the
generality of the foregoing, to the Knowledge of Seller, except as set forth on
Schedule 4.10(d), (A) all current and former employees, individual consultants
and individual contractors of Seller involved in design or development relating
to the 787 Program have executed agreements substantially the same in substance
as the Confidentiality and Assignment Agreements and (B) all current and former
employees of Seller, individual consultants of Seller working onsite at Seller’s
facility and

 

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individual contractors of Seller working onsite at Seller’s facility that have
access to material confidential information relating to the 787 Program have
executed agreements substantially the same in substance as the Confidentiality
and Assignment Agreements. None of the Purchased Intellectual Property has been
adjudged invalid or unenforceable, and to the Knowledge of Seller, all of the
Purchased Intellectual Property that is referred to in Section 4.10(a)(i) is
valid, enforceable and subsisting. Seller has not, as of the date of this
Agreement or during the five-year period immediately preceding the date of this
Agreement, received any written notice or other written communication claiming,
alleging or suggesting that any of the Purchased Intellectual Property is
invalid or unenforceable.

(e) Except as set forth on Schedule 4.10(e), none of the Software included in
the Purchased Intellectual Property incorporates or links to any Open Source
Software.

(f) Seller has all material information technology systems sufficient to operate
the Business as it is currently conducted.

Section 4.11 Contracts.

(a) For purposes of this Agreement, each of the following shall constitute a
“Material Contract”:

(i) each Purchased Contract relating to the employment (whether on a full-time,
part-time, consulting or other basis) of any Employee of the Business, and any
“stay pay,” termination, change of control or other Contract pursuant to which
Seller is or may become obligated to make any severance, termination or
relocation payment to any current or former Employee of the Business who earns
or earned an annual base salary of more than $60,000 or for which the cost of
such severance, termination or relocation payment would exceed $30,000;

(ii) except to the extent included elsewhere in this Section 4.11(a), each
Purchased Contract relating in a material manner or primarily to the
acquisition, use, transfer, development, ownership, sharing or license of any
Intellectual Property material to the conduct of the Business (other than
nondisclosure agreements);

(iii) each Purchased Contract creating or relating to any partnership, limited
liability company or joint venture or similar venture or arrangement;

(iv) each Purchased Contract with any customer or production supplier that
involves, or would reasonably be expected to involve (assuming delivery of
eighty-four (84) shipsets per year), the payment or expenditure in excess of
$2,000,000;

(v) each Purchased Contract not with customers or production suppliers that may
not be terminated (without penalty) by Seller within thirty (30) days after the
delivery of a termination notice by Seller and contemplating or involving, or
reasonably anticipated to involve, (A) the payment or delivery by or to the
Business of cash or other consideration in an amount or having a value in excess
of $250,000 in the aggregate in any calendar year; (B) the performance by or for
the Business of services in an amount or having a value in excess of $250,000 in
the aggregate in any calendar year; or (C) the sale, lease or other disposition
by or to the Business of goods, supplies, products and/or other Assets in an
amount or having a value in excess of $250,000 in the aggregate in any calendar
year;

 

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(vi) each Seller Contract imposing any material, explicit restriction on the
right or ability of (A) the Business to (1) compete with, or solicit the
services or employment of, any other Person; (2) sell any product or other
Asset, or perform any services anywhere in the world; (3) acquire any product or
other Asset or any services from any other Person, sell any product or other
Asset to or perform any services for any other Person, or transact business with
any other Person; or (4) develop, use, sell, enforce or license any Intellectual
Property material to the Business (other than nondisclosure agreements); or
(B) Buyer to own and operate the 787 Program as currently conducted;

(vii) each Purchased Contract under which Seller (A) leases or subleases any
real property or (B) leases or subleases any buildings, structures, improvements
or appurtenances, in whole or in part, from any other Person involving lease
payments or other consideration in excess of $100,000 per annum;

(viii) each Purchased Contract with (A) any Affiliate of Seller (other than any
employee of Seller) or (B) any of the Persons identified on
Schedule 4.11(a)(viii);

(ix) each note, debenture, bond, indenture, guarantee, loan, credit or financing
agreement, instrument or other evidence of, or Contract for, Indebtedness of
Seller secured by or providing Encumbrances on the Purchased Assets, and each
Purchased Contract for borrowed money (including for future loans, credit or
financing);

(x) any Contract, the primary subject matter of which is confidentiality,
nondisclosure or similar agreement with respect to confidentiality arrangements
executed by or on behalf of Seller with respect to the Business pursuant to
which any third party owes an obligation of confidentiality to Seller in
relation to the Business;

(xi) each Purchased Contract which creates, or may create, an Encumbrance on any
Purchased Asset in an amount or with a value in excess of $50,000; and

(xii) each Purchased Contract set forth on Schedule 4.11(a)(xii).

(b) Except as set forth on Schedule 4.11(b) and other than with respect to the
787 Supply Agreement: (i) each Material Contract is in full force and effect and
(ii) each Material Contract constitutes a legal, valid, binding and enforceable
obligation of Seller and, to Seller’s Knowledge, of the other party or parties
thereto and is enforceable in accordance with its terms, subject only to
applicable bankruptcy, insolvency, reorganization and moratorium Laws and other
Laws of general application affecting enforcement of creditors’ rights
generally.

(c) Except as set forth on Schedule 4.11(c) and other than with respect to the
787 Supply Agreement: (i) Seller has not violated or breached in any material
respect or committed any material default under, any Material Contract (in each
case, with or without notice or lapse of time or both), nor is it in receipt of
any written Claim of such default or breach; and (ii) to the Knowledge of
Seller, no other Person has violated or breached in any material respect, or
committed any material default under, any Material Contract (in each case, with
or without notice or lapse of time or both).

 

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(d) Other than under the 787 Supply Agreement, no event or development has
occurred, and no fact, circumstance or condition exists, that (with or without
notice or lapse of time or both) has (i) resulted in a material violation or
breach of any provision of any Material Contract by Seller; (ii) given any
Person the right to declare a material default or exercise any remedy for breach
under any Material Contract; (iii) given any Person the unilateral right to
accelerate the maturity of material obligations pursuant to any Material
Contract; or (iv) give any Person the right to cancel, terminate or modify, in
any material respect, any Material Contract.

(e) Schedule 4.11(e) provides a list of all written Material Contracts
(including all amendments thereto and excluding purchase orders issued pursuant
to Material Contracts otherwise disclosed on such schedule) and a summary
description of all material terms of any oral or unwritten Contract constituting
a Material Contract (including any oral or unwritten amendments thereto), in
each case as of the date of this Agreement. A true, correct and complete copy of
each such written Material Contract (including all amendments thereto) has been
made available to Buyer.

Section 4.12 Litigation.

(a) As of the date of this Agreement, (i) there is not pending or, to Seller’s
Knowledge, threatened in writing against Seller or the Business any Legal
Proceeding (other than any investigation by any Governmental Authority) at law
or in equity before any court, tribunal, governmental body, agency or official
or any arbitrator relating to the Business or the Purchased Assets (including
any such Legal Proceeding which would affect the North Charleston Real Property
or Seller’s right to occupy or utilize all or any portion of the North
Charleston Real Property in accordance with the North Charleston Sublease,
including any such proceeding under or in connection with the exercise or threat
of exercise of eminent domain power), and (ii) to the Knowledge of Seller, there
is no pending or threatened investigation of Seller by any Governmental
Authority relating to the Business, in each case that would reasonably be
expected to affect the legality, validity or enforceability against Seller of
this Agreement or Seller’s ability to perform its obligations hereunder, or that
is reasonably likely to result in Losses in excess of $50,000. As of the date of
this Agreement, there is no Legal Proceeding pending or, to Seller’s Knowledge,
threatened orally or in writing against Seller that would, if adversely
determined, reasonably be expected to prevent or materially delay consummation
of the transactions contemplated hereby.

(b) As of the date of this Agreement, (i) there is no Legal Proceeding, formal
Claim or formal written ethics complaint pending or, to Seller’s Knowledge,
threatened in writing against the Business, or for which the Business is
obligated to indemnify a third party pursuant to a written agreement; and
(ii) neither the Business nor the Purchased Assets is subject to any outstanding
Order, other than, for the purposes of clauses (i) and (ii) of this sentence,
any matter in which the Losses asserted or for which the amount in question does
not exceed $50,000. As of the date of this Agreement, there are no formal
internal investigations or inquiries related to the Business being conducted
(a) by Seller’s board of directors (or any committee thereof) or (b) by the
Business (or by Seller on behalf of the Business) or any third

 

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party at the request of the Business (or by Seller on behalf of the Business)
for which Seller has engaged outside legal counsel or other outside advisors or
consultants concerning financial, accounting, Tax, Income Tax, material
violation of Law or fraudulent conduct.

Section 4.13 Permits; Compliance with Laws.

(a) Schedule 4.13 sets forth a list of all material Governmental Authorizations
of Seller used in or held for use by Seller in connection with the Business and
all pending applications therefor or renewals thereof as of the date of this
Agreement. Seller is in possession of all material Governmental Authorizations,
and has made all material filings, applications and registrations with any
Governmental Entity, in each case that are necessary for Seller to own, lease,
use and/or operate the Purchased Assets, in order to carry on the Business
substantially as it is being conducted as of the date hereof, and all such
Government Authorizations are, in all material respects, valid and in full force
and effect.

(b) Seller is not in material conflict with, or in material default or violation
of, (i) any Law applicable to the Business or by which any Purchased Asset is
bound or (ii) any Governmental Authorization. Except as necessary to transfer
Permits because of a change of ownership, none of the Transferred Permits will
become terminable, in whole or in part, as a result of the transactions
contemplated by this Agreement, except as would not, individually or in the
aggregate, have a Material Adverse Effect. During the two (2) year period
immediately preceding the date of this Agreement, Seller has not received any
written warning, notice of violation, notice of revocation or other written
communication from or on behalf of any Governmental Entity, alleging (A) any
material violation of any Governmental Authorization (other than violations that
have been remedied and with respect to which, to the Knowledge of Seller, no
Person, as of the date of this Agreement, has a right of action against Seller)
or (B) that Seller requires any material Governmental Authorization for the
Business as currently conducted that is not currently held by it. As of the date
of this Agreement, to the Knowledge of Seller, no investigation or inquiry by
any Governmental Entity with respect to the Business is pending or threatened,
in each case with respect to any alleged or claimed violation of Law applicable
to the Business or by which any material Purchased Asset is bound or affected.

(c) Seller and, to Seller’s Knowledge, managers, officers, employees, Affiliates
and authorized agents of the Business and any other Person associated with or
acting on behalf of Seller with respect to the Business, in each case, relating
to conduct or actions taken on behalf of the Business, are in material
compliance with all applicable legal requirements under (i) the Foreign Corrupt
Practices Act (15 U.S.C. §§ 78dd-1, et seq.) and (ii) all international
anti-bribery and other Laws applicable to the Business relating to corruption,
bribery, ethical business conduct, money laundering, political contributions,
gifts and gratuities to public officials and private persons, and Laws requiring
the disclosure of agency relationships or commissions and the anticorruption
rules of any international financial institutions with which it does business
(collectively, the “Anti-Bribery Laws”). During the two (2) year period prior to
the date of this Agreement, Seller has not received any written communication
from any Governmental Entity that alleges that Seller, any manager, officer,
employee, Affiliate or authorized agents of the Business or any other Person
acting on behalf of Seller with respect to the Business is, or may be, in
violation of, or has, or may have, any material Liability under, the
Anti-Bribery Laws.

 

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(d) Seller is not a “Specially Designated National” or other “Blocked Person”
identified by the United States government, nor a Person that is owned or
controlled by or acts on behalf of a “Specially Designated National” or “Blocked
Person.” To Seller’s Knowledge, none of Seller’s brokers or any manager,
officer, employee or authorized agent of the Business, and none of the funds or
other assets to be transferred hereunder are the property of, or beneficially
owned, directly or indirectly, by any “Specially Designated National” or
“Blocked Person,” nor, to the Knowledge of Seller, are such funds or other
assets the proceeds of any specified unlawful activity as defined by 18 U.S.C. §
1956(c)(7). With respect to the Business, Seller has not engaged in or, to
Seller’s Knowledge, facilitated any prohibited transactions in violation of any
Law with any “Specially Designated National” or other “Blocked Person” without
proper prior authorization from the United States government.

(e) The representations and warranties set forth in this Section 4.13 do not
apply to matters that are the subject of Employee Benefit Plans and Employment
Matters (which are addressed in Section 4.16).

(f) If any matter is addressed in both Section 4.10(c) and Section 4.13, then
the knowledge qualifiers contained in Section 4.10(c) shall qualify the relevant
provisions of Section 4.13 to the same extent as qualified in Section 4.10(c).

Section 4.14 Environmental, Health and Safety Laws. Except for those matters
that would not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect:

(a) Except as set forth on Schedule 4.14(a), the North Charleston Real Property
and the tangible Purchased Assets (including the North Charleston Facility) have
not been used during the period of Seller’s ownership, lease, occupancy or
operation for landfill, dumping or other on-site waste disposal activities, or
operations, or for the on-site sale, treatment, processing, recycling or
disposal of any Hazardous Material.

(b) To Seller’s Knowledge, except as set forth on Schedule 4.14(b), there are no
underground storage tanks, sumps or wells on, in, or incorporated into the North
Charleston Real Property or the tangible Purchased Assets (including the North
Charleston Facility).

(c) Except as set forth on Schedule 4.14(c), Seller and its use and operation of
the North Charleston Real Property and the tangible Purchased Assets (including
the North Charleston Facility) comply, in all material respects, with, and have
at all times during the period of their occupancy and use of the North
Charleston Real Property and the tangible Purchased Assets (including the North
Charleston Facility) complied, in all material respects, with, all Environmental
Laws and no Liability has arisen under Environmental Laws related to Seller or
its use or operation of the North Charleston Real Property or the tangible
Purchased Assets (including the North Charleston Facility).

(d) All material Governmental Authorizations required by or issued pursuant to
any Environmental Law (collectively, the “Environmental Permits”) for the
ownership, use or operation of the North Charleston Real Property or the
tangible Purchased Assets (including the North Charleston Facility) of the
Business are presently maintained in full force and effect.

 

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Schedule 4.14(d) contains a true and complete listing of all material
Environmental Permits and environmental disclosure reports held or made by
Seller with respect to the North Charleston Real Property or the tangible
Purchased Assets (including the North Charleston Facility). Except as set forth
on Schedule 4.14(d), the Business and Seller’s use and operation of the North
Charleston Real Property and the tangible Purchased Assets (including the North
Charleston Facility) comply, in all material respects, with, and during the last
two (2) years have at all times complied, in all material respects, with, all
Environmental Permits.

(e) Except as set forth on Schedule 4.14(e), excluding permitted or authorized
Releases arising during the ordinary course of business consistent with past
practice, to Seller’s Knowledge there neither is, nor has been, any Release or
threatened Release of Hazardous Material from, in, on, or to the North
Charleston Real Property or the tangible Purchased Assets (including the North
Charleston Facility).

(f) Except as set forth on Schedule 4.14(a), to Seller’s Knowledge there are no
Hazardous Materials emanating from the North Charleston Real Property or the
tangible Purchased Assets (including the North Charleston Facility) as of the
date of this Agreement exceeding applicable regulatory thresholds.

(g) During the last two (2) years, Seller has not received written notice of any
material Environmental Claim related to the North Charleston Real Property or
the tangible Purchased Assets (including the North Charleston Facility). With
the exception of items listed in Schedule 4.14(g), during the last two
(2) years, Seller has not received written notice of any pending or threatened
investigation or inquiry concerning: (i) the presence or release of any
Hazardous Material on, in, incorporated into, emanating from or otherwise
associated with the North Charleston Real Property or the tangible Purchased
Assets (including the North Charleston Facility), or associated with the
transport, treatment, storage, recycling or disposal of Hazardous Materials
generated at the North Charleston Real Property or the tangible Purchased Assets
(including the North Charleston Facility) to or at any off-site location, or
(ii) any alleged violation of or any alleged Liability under any Environmental
Law arising out of or in any way connected with operations or activities at the
North Charleston Real Property or the tangible Purchased Assets (including the
North Charleston Facility), or the transport, treatment, storage, recycling or
disposal of Hazardous Materials generated at the North Charleston Real Property
or the tangible Purchased Assets (including the North Charleston Facility) to or
at any off-site location. Except as specifically disclosed in the environmental
disclosure documents listed in Schedule 4.14(g), Seller has no Knowledge of any
facts or circumstances concerning any alleged violation or Liability arising
under or related to any Environmental Law which would reasonably be expected to
result in an Environmental Claim against the owner of the North Charleston Real
Property or the tangible Purchased Assets (including the North Charleston
Facility).

(h) Except as set forth on Schedule 4.14(h), to the Knowledge of Seller, except
for land use zoning and Federal Aviation requirements on height and
non-interference with the adjoining regional aviation activities or for
Permitted Encumbrances, no action has been taken by any Governmental Entity
pursuant to the provisions of any Environmental Law specifically to restrict the
use of the North Charleston Real Property or the tangible Purchased Assets
(including the North Charleston Facility).

 

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(i) Seller has made available to Buyer all non-privileged documents,
correspondence, pleadings, reports, assessments, analytical results and
Environmental Permits concerning Environmental Laws, Hazardous Materials, or
other environmental subjects that affect the North Charleston Real Property, the
tangible Purchased Assets (including the North Charleston Facility), the Assumed
Liabilities or the Business in Seller’s possession or control.

Section 4.15 Tax Matters.

(a) Except with respect to the 2008 Income Tax Returns, Seller has filed all Tax
Returns and Income Tax Returns required to be filed under applicable Laws with
respect to Taxes and Income Taxes, the nonpayment of which could result in an
Encumbrance on the Purchased Assets. All such returns were correct and complete
in all material respects and have been prepared in all material respects in
compliance with all applicable Laws insofar as such Tax Returns and Income Tax
Returns relate to Taxes and Income Taxes, the nonpayment of which could result
in an Encumbrance on the Purchased Assets. All Taxes and Income Taxes due and
owing by Seller (whether or not shown on any Tax Return or Income Tax Return),
the nonpayment of which could result in an Encumbrance on the Purchased Assets,
have been timely paid, except as set forth on Schedule 4.15.

(b) Seller has withheld and timely paid all material Taxes (including sales and
use Taxes) and Income Taxes required to have been withheld and paid in
connection with any amounts paid or owing to any employee, independent
contractor, creditor, equity holder, or other Person or third party with respect
to the Business or the Purchased Assets, except as set forth on Schedule 4.15.

(c) Except with respect to the 2008 Income Tax Returns, Seller is not currently
the beneficiary of any extension of time within which to file any Tax Return in
connection with or relating to the Business and the Purchased Assets.

(d) There are no Encumbrances for Taxes or Income Taxes (other than such taxes
that are not yet due and payable or that are being contested in good faith
through appropriate proceedings) upon any of the Purchased Assets. All Taxes or
Income Taxes with respect to the Business or the Purchased Assets that are being
contested are set forth on Schedule 4.15.

(e) No foreign, federal, state, or local Tax audits or administrative or
judicial Tax or Income Tax proceedings have been threatened (in writing) or, to
Seller’s Knowledge, are pending or being conducted with respect to Taxes of
Seller, the nonpayment of which could result in an Encumbrance on the Purchased
Assets. Seller has not received from any foreign, federal, state, or local Tax
Authority (including jurisdictions where Seller has not filed Tax Returns or
Income Tax Returns) any notice of deficiency or proposed adjustment for any
amount of Tax or Income Tax proposed, asserted or assessed by any Tax Authority
against Seller, the nonpayment of which could result in an Encumbrance on the
Purchased Assets.

(f) Seller is a “United States person” within the meaning of the Code.

(g) Seller does not treat any of the Purchased Contracts that are being
transferred (or assumed) by Buyer pursuant to this Agreement as a partnership
for Income Tax purposes. Schedule 4.15(g) sets forth all partnership interests
for U.S. federal income tax purposes that are Purchased Assets.

 

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(h) Notwithstanding the foregoing, no representation or warranty in this
Section 4.15 is given or shall be deemed to relate or pertain to the Assumed
Liabilities in Section 2.3(a)(iii) hereof.

Section 4.16 Employee Benefit Plans; Employment Matters.

(a) Schedule 4.16(a) lists as of the date of this Agreement, with respect to the
Employees, (i) all employee benefit plans within the meaning of Section 3(3) of
ERISA, (ii) each loan from Seller or any Subsidiary of Seller to an Employee,
(iii) all stock option, stock purchase, phantom stock, stock appreciation right,
stock-based compensation, supplemental retirement, severance, sabbatical,
employee relocation, cafeteria benefit (Section 125 of the Code), dependent care
(Section 129 of the Code), life insurance or accident insurance plans, programs
or arrangements, (iv) all bonus or incentive, pension, profit sharing, savings,
retirement, or deferred compensation plans, programs and arrangements, (v) other
fringe and employee benefit plans, programs or arrangements that apply to senior
management and that do not generally apply to all employees, and (vi) any
employment or service agreements (excluding any offer letters other than those
providing severance pay, acceleration or post-termination benefits or bonus
arrangements other than those set forth in Schedule 4.16(m)) or severance
agreements for the benefit of, or relating to, any present or former director,
officer, employee, or consultant under which any of Seller or any Subsidiary of
Seller could reasonably be expected to have any Liability or obligation (all of
the foregoing described in clauses (i) through (vi) collectively, the “Employee
Benefit Plans”).

(b) Prior to the date of this Agreement, Seller has provided or made available
to Buyer, a correct and complete copy of each of the Employee Benefit Plans and
any related plan documents (including any material employee communications of
Seller relating to the Employee Benefit Plans that have been distributed since
January 1, 2007 (or since January 1, 2008 with respect to any defined benefit
pension plan), summary plan descriptions and summaries of material
modifications) and has provided or made available to Buyer correct and complete
copies of the most recent Form 5500 reports (other than with respect to any
defined benefit pension plan). Any Employee Benefit Plan intended to be
qualified under Section 401(a) of the Code that includes a qualified cash or
deferred arrangement (each a “401(k) Plan”) (i) has obtained from the IRS a
current favorable determination letter issued to Seller as to its qualified
status under the Code, (ii) has been established under a standardized master and
prototype or volume submitter plan for which a current favorable IRS advisory
letter or opinion letter has been obtained by the plan sponsor and is valid as
to the adopting employer, or (iii) has time remaining under applicable Laws to
apply for a determination or opinion letter or to make any amendments necessary
to obtain a favorable determination or opinion letter. Seller has also provided
to Buyer a correct and complete copy of the most recent IRS determination
letter, advisory letter or opinion letter issued with respect to each 401(k)
Plan. To Seller’s Knowledge nothing has occurred since the issuance of each such
letter that could reasonably be expected to cause the loss of the Tax-qualified
status of any 401(k) Plan subject to Section 401(a) of the Code or an applicable
trust under Section 501(a) of the Code.

 

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(c) Except as set forth on Schedule 4.16(c), none of the Employee Benefit Plans
promises or provides retiree medical or other retiree welfare benefits to any
Person other than as required under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”) or applicable state law.

(d) Except as set forth in Schedule 4.16(d), neither Seller nor any ERISA
Affiliate sponsors, maintains, participates in, contributes to, or is required
to participate in or contribute to a pension plan (within the meaning of
Section 3(2) of ERISA) for the benefit of Employees that is subject to Title IV
or Part 3 of Title 1 of ERISA or Section 412 of the Code. In connection with the
Business, neither Seller nor any ERISA Affiliate is a party to, or has made any
contribution to or otherwise incurred any obligation under, any “multiemployer
plan” as such term is defined in Section 3(37) of ERISA (a “Multiemployer Plan”)
or any “multiple employer plan” as such term is defined in Section 413(c) of the
Code to which Seller has any Liability (contingent or otherwise).

(e) No payment or benefit which will or may be made by Seller or any Subsidiary
of Seller as a result of or in connection with the consummation of the
transactions contemplated by this Agreement with respect to any Employee who is
a “disqualified individual” (as such term is defined in Treasury Regulation
Section 1.280G-I) could reasonably be expected to constitute an “excess
parachute payment” (as defined in Section 280G(b)(1) of the Code).

(f) Schedule 4.16(f) identifies, as of the date of this Agreement, the Employees
who are absent from active work because of disability or other leave, the nature
of such leave (e.g., short-term or long-term disability), and the expected
length of the leave.

(g) Each material Employee Benefit Plan that is a nonqualified deferred
compensation plan subject to Section 409A of the Code has been operated and
administered in good faith material compliance with Section 409A of the Code
from the period beginning January 1, 2005 through the date hereof.

(h) In connection with the Business, Seller is in compliance in all material
respects with all currently applicable Laws respecting employment,
discrimination in employment, terms and conditions of employment, worker
classification (including the proper classification of workers as independent
contractors and consultants), wages, hours and withholding of Income Taxes and
employment Taxes (including unemployment and social security obligations),
including the Fair Labor Standards Act and the Immigration Reform and Control
Act. There are no controversies pending or, to Seller’s Knowledge, threatened,
between Seller and any Employees, which controversies have or could reasonably
be expected to result in a Legal Proceeding or Claim before any Governmental
Entity.

(i) Except as disclosed on Schedule 4.16(i), Seller is not a party to or bound
by any Collective Bargaining Agreement or other labor union Contract covering
any Employees, and no Collective Bargaining Agreement covering any Employees is
being negotiated by Seller. There is no pending demand for recognition or any
other request or demand from a labor organization for representative status with
respect to any Employees. To Seller’s Knowledge, there are no activities or
proceedings of any labor union to organize the Employees. There is no labor
dispute, strike or group work stoppage against Seller pending or to Seller’s
Knowledge

 

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threatened that would materially interfere with the Business. Neither Seller nor
to Seller’s Knowledge, any of Seller’s Employees has been found by the National
Labor Relations Board or any comparable Governmental Entity in the past two
(2) years to have committed an unfair labor practice in connection with the
operation of the Business. To Seller’s Knowledge, there is no charge or
complaint against Seller by the National Labor Relations Board or any comparable
Governmental Entity pending or threatened in connection with the Business.

(j) Schedule 8.1(a)(i) contains a listing, of all Employees, including their job
titles and whether Seller treats the Employees as exempt or non-exempt under the
Fair Labor Standards Act. To Seller’s Knowledge, no Employee is in material
violation of any term of any employment agreement, patent disclosure agreement,
non-competition agreement, or any restrictive covenant to a former employer
relating to the right of any such Employee to be employed by Seller because of
the nature of the business conducted or presently proposed to be conducted by
Seller or to the use of Intellectual Property of others. No officer or manager
who is an Employee has given notice of termination or resignation to Seller, nor
does Seller otherwise have Knowledge that any such officer or manager intends to
terminate his or her employment with Seller. Schedule 8.1(a)(i) contains the
current base salary or wage rate and the bonus earned in 2008 by all Employees.
To Seller’s Knowledge, the employment of each of the Employees is on an “at
will” basis, and except as set forth in Schedule 4.16(a), Seller has not
knowingly entered into any agreement that would negate “at will” employment or
require any particular form or period of notice prior to terminating the
employment of any such Employees, except as may be required by applicable Law.

(k) Seller has made available to Buyer a summary or copy of Seller’s standard
severance policy, if any.

(l) With respect to the Business, Seller is in compliance in all material
respects with the WARN Act, and all similar state or local Laws. Seller has not
caused any Employees to suffer an “employment loss” (as defined in the WARN Act)
during the 90-day period prior to the date of this Agreement.

(m) Schedule 4.16(m) identifies each Employee that is entitled to participate in
Seller’s “Management Incentive Plan,” Seller’s “Gaining Ground” program or an
enhanced version of Seller’s “Gaining Ground” program and identifies the
applicable plan or program and the applicable bonus target percentages, if any,
for each such Employee.

Section 4.17 Suppliers. Schedule 4.17 sets forth (i) a complete and correct list
of the twenty (20) largest suppliers (each measured by Dollar volume of revenue)
of the Business during the last completed fiscal year and the current
year-to-date period ended April 30, 2009, (ii) the amount of such business done
(by Dollar volume of revenue) with each such supplier during such periods and
(iii) a complete and correct list of all material written Claims made by each
such supplier since January 1, 2007 alleging breach of, or entitlement to a
price adjustment or other additional consideration pursuant to, the applicable
Seller Supply Agreement.

Section 4.18 Insurance. As of the date of this Agreement, Seller currently
maintains or is provided the insurance coverage related to the Business and the
Purchased Assets listed in Schedule 4.18. As of the date of this Agreement, to
Seller’s Knowledge, all such policies are

 

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valid and effective. As of the date of this Agreement, there is no Claim pending
under any such policies, or any circumstance where coverage has been questioned,
denied or disputed by the underwriters of such policies. As of the date of this
Agreement, all premiums due and payable under all such policies have been paid,
Seller is in material compliance with all disclosure obligations thereunder the
absence of which could be reasonably expected to result in a denial of coverage,
and Seller is otherwise in material compliance in all respects with the terms of
such policies. As of the date of this Agreement, Seller has not been notified in
writing of any threatened termination of, other than in connection with ordinary
renewal notices, or material premium increase with respect to, any such policies
of insurance maintained by Seller.

Section 4.19 Certain Transactions. Schedule 4.19 sets forth a description of all
agreements and arrangements relating to the Business or included in the
Purchased Assets between Seller, on the one hand, and any of Seller’s Affiliates
involved in the Business or, officers or employees of the Business, on the other
hand (other than employment agreements between Seller and employees of the
Business).

Section 4.20 Broker’s Fees. Except as set forth on Schedule 4.20, Seller has no
Liability or obligation to pay any fees or commissions to any broker, finder or
similar agent in connection with the transactions contemplated by this Agreement
or any other Transaction Document.

Section 4.21 Security Clearance. Except as may be prohibited by the National
Industrial Security Program Operating Manual, Schedule 4.21 sets forth all
facility and personnel security clearances held by Seller related to the
Business or the Purchased Assets as of the date of this Agreement. Except as set
forth in Schedule 4.21, to Seller’s Knowledge, there is no proposed or
threatened termination or invalidation of any facility or personnel security
clearances held by Seller related to the Business or the Assets as of the date
of this Agreement.

Section 4.22 Site Development and Incentive Agreement; FILOT Agreement.

(a) As of December 31, 2008, (i) Seller has 329 employees that are counted as
employees for purposes of meeting the minimum employment level, subject to the
wage and fringe benefit requirements, all as identified in Exhibit B to the Site
Development and Incentive Agreement, and 68 of such employees that are
considered as “Badged Personnel” pursuant to Section 6.1 of the Site Development
and Incentive Agreement and (ii) Seller has expended $237,769,169 in
“Investment” as defined in Section 11-41-30(4) of the South Carolina Code, as
amended.

(b) As of March 29, 2009, (i) Seller has 536 employees that are counted as
employees for purposes of meeting the minimum employment level, subject to the
wage and fringe benefit requirements, all as identified in Exhibit B to the Site
Development and Incentive Agreement, and 62 of such employees that are
considered as “Badged Personnel” pursuant to Section 6.1 of the Site Development
and Incentive Agreement and (ii) Seller has expended $238,168,845 in
“Investment” as defined in Section 11-41-30(4) of the South Carolina Code, as
amended.

 

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(c) As of March 29, 2009, Seller has acquired $213,749,228 of “Economic
Development Property” as defined in the FILOT Agreement.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to Seller as follows:

Section 5.1 Organization and Qualification. Buyer is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Delaware.

Section 5.2 Authority; Enforceability. Buyer has the requisite corporate power
and authority to enter into, execute and deliver this Agreement and each other
Transaction Document to which it is a party, to perform all of the obligations
to be performed by it hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by
Buyer of this Agreement and each other Transaction Document to which it is a
party, the performance of its obligations hereunder and thereunder and the
consummation by Buyer of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action, and no other corporate
action or proceeding is necessary to authorize the execution and delivery of
this Agreement and each other Transaction Document to which Buyer is a party,
the performance of its obligations hereunder and thereunder or the consummation
of the transactions contemplated hereby and thereby. This Agreement has been,
and each of the other Transaction Documents to which it is party will have been
at the Closing, duly authorized, executed and delivered by Buyer and, assuming
due authorization, execution and delivery by Seller, this Agreement constitutes,
and each of the documents contemplated hereby will constitute at the Closing,
its valid and binding obligation, enforceable against it in accordance with its
respective terms, subject only to (a) applicable bankruptcy, insolvency,
reorganization and moratorium Laws and other Laws of general application
affecting enforcement of creditors’ rights generally and (b) rules or Laws
governing specific performance, injunctive relief and other equitable remedies.

Section 5.3 No Conflicts.

(a) The execution and delivery by Buyer of this Agreement and each of the other
Transaction Documents to which it is a party, the performance of and compliance
with the respective terms and provisions hereof and thereof and the consummation
by Buyer of the transactions contemplated hereby and thereby, do not and will
not: (i) conflict with, or violate any provision of the certificate of
incorporation, by-laws or any other organizational or governance document of
Buyer; or (ii) subject to obtaining the Governmental Authorizations set forth on
Schedule 5.3, conflict with or violate any Law.

(b) Except as set forth on Schedule 5.3, the execution and delivery by Buyer of
this Agreement and each of the other Transaction Documents to which it is a
party, the performance of and compliance with the respective terms and
provisions hereof and thereof, and the consummation by Buyer of the transactions
contemplated hereby and thereby, do not and will not require any Consent or
Governmental Authorization from, or filing with or notification to, any Person
not a party to this Agreement.

 

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Section 5.4 Broker’s Fees. Except as set forth on Schedule 5.4, Buyer has no
Liability or obligation to pay any fees or commissions to any broker, finder or
similar agent in connection with the transactions contemplated by this Agreement
or any other Transaction Document.

Section 5.5 Litigation. No action, suit or proceeding is pending or threatened
to restrain, prohibit or otherwise challenge the enforceability, consummation,
legality or validity of this Agreement or any other Transaction Document or
would reasonably be expected to affect Buyer’s ability to perform its
obligations hereunder, other than any Claim as would not, individually or in the
aggregate, have a material adverse effect on Buyer’s ability to consummate the
transactions contemplated hereby in accordance with the terms hereof and
applicable Laws.

ARTICLE VI

COVENANTS

Section 6.1 Appropriate Actions; Further Assurances. Upon the terms and subject
to the conditions set forth in this Agreement, Buyer and Seller shall each use
all commercially reasonable efforts to take, or cause to be taken, all actions,
and do, or cause to be done, all things necessary, proper or advisable under
applicable Law or otherwise to consummate and make effective the transactions
contemplated by this Agreement as soon as practicable after the date hereof;
provided that nothing in this Section 6.1 shall require Buyer to waive any of
the conditions set forth in Section 9.1 or require Seller to waive any of the
conditions set forth in Section 9.2. Without limiting the generality of the
foregoing, Seller shall from time to time when reasonably requested by Buyer,
whether at or after the Closing, and without further consideration, promptly
execute and deliver, or cause to be executed and delivered, all such documents
necessary to (i) vest in Buyer all right, title and interest in and to the
Purchased Assets, in accordance with this Agreement and (ii) perfect and record
the sale of the Purchased Assets to Buyer in accordance with the terms of this
Agreement. If Seller determines within one hundred eighty (180) days after the
Closing that it has failed to deliver to Buyer any of the Purchased Assets
(including any Purchased Intellectual Property) in the possession of Seller,
Seller shall deliver such Asset(s) (or a copy of such Purchased Intellectual
Property) promptly as reasonably practicable to Buyer. If Buyer accurately
determines within one hundred eighty (180) days after the Closing that (x) any
Assets of Seller in Seller’s possession were not delivered to Buyer at Closing
but should have been so delivered because such Assets fall within the definition
of “Purchased Assets,” then Buyer shall provide written notice to Seller and
Seller shall deliver such Asset(s) promptly as reasonably practicable to Buyer
or (y) a copy of any Purchased Intellectual Property in Seller’s possession was
not delivered to Buyer at Closing, then Buyer shall provide written notice to
Seller and Seller shall deliver a copy of such Purchased Intellectual Property
promptly as reasonably practicable to Buyer. The Parties hereby agree that any
restrictions on Buyer contained in Contracts between Seller and Buyer or any
Affiliate of Buyer disclosed or required to be disclosed by Seller pursuant to
Section 4.11(a)(vi)(B) shall be of no further force or effect from and after the
Closing Date; provided that any Affiliate of Buyer that is a party thereto
agrees to the termination of such restrictions.

 

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Section 6.2 Conduct of Business by Seller Until Closing.

(a) From the date of this Agreement until the Closing, except with the prior
written consent of Buyer (which consent shall not be unreasonably withheld,
conditioned or delayed), and except as set forth on Schedule 6.2(a), Seller
shall (i) conduct the Business and use and/or hold for use the Purchased Assets
only in the ordinary course of business, consistent with past practice; (ii) use
commercially reasonable efforts to (A) preserve intact the Business and the
Purchased Assets, (B) maintain and operate the tangible Purchased Assets in
reasonable operating condition and repair (after allowing for ordinary wear and
tear), (C) keep available the services of the present employees working for the
Business (regardless of where located), (D) maintain in all material respects
the goodwill associated with the Business (subject to Buyer’s compliance with
the terms of the 787 Supply Agreement) and its existing relationships with the
customers, suppliers and distributors of the Business; and (E) keep in full
force and effect all liability insurance and bonds comparable in amount and
scope of coverage to that currently maintained by Seller for the Business, the
Purchased Assets, or the Assumed Liabilities; (iii) use commercially reasonable
efforts to pay trade payables (other than trade payables being disputed by
Seller in good faith) of the Business in the ordinary course of business
consistent with past practice (including with respect to the timing of such
payments); (iv) use commercially reasonable efforts to continue to prosecute any
pending patent applications included in the Purchased Intellectual Property; and
(v) to the extent that doing so does not hinder the timely prosecution of patent
applications included in the Purchased Intellectual Property, consult with Buyer
on Seller’s responses to office actions with respect to such patent applications
and consider in good faith Buyer’s comments with respect to such responses. In
addition, between the date hereof and the Closing, Seller shall use commercially
reasonable efforts to arrange for all or substantially all hazardous waste
stored in the 90-day hazardous waste storage area at the North Charleston
Facility as of the date that is three (3) days prior to the Closing to be
shipped off-site prior to the Closing.

(b) Without limiting the generality of the foregoing, from the date of this
Agreement until the Closing, unless otherwise expressly required by this
Agreement or with the prior written consent of Buyer (which consent shall not be
unreasonably withheld, conditioned or delayed), Seller shall not, except as set
forth on Schedule 6.2(b):

(i) Except as required by Law, (A) increase the salary, wages or other
compensation or fringe benefits of any current Employee or officer of the
Business; (B) grant or increase any severance or termination pay (other than in
accordance with Seller’s normal severance practices in effect on the date of
this Agreement) to, or enter into any severance Contract with, any Employee or
officer of the Business, or enter into any employment Contract with any Employee
or officer of the Business; (C) establish, adopt, enter into or amend any
Employee Benefit Plan or other arrangement applicable solely to the Business or,
except pursuant to an employee benefit plan generally applicable to employees of
Seller, grant or increase any benefit to an Employee (it being understood and
agreed by the Parties that, except with respect to matters set forth on Schedule
6.2(b), if Seller takes any of the foregoing actions described in this clause
(C) (whether or not with respect to an Employee Benefit Plan or arrangement
solely applicable to the Business), such actions shall not be taken into account
in determining an Employee’s terms and conditions of employment for purposes of
Sections 8.2 and 8.3); or (D) except as set forth on Schedule 6.2(b)(i), hire,
promote or terminate any officer

 

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or supervisory or management level Employee of the Business, except in each case
as may be required to comply with applicable Law or an Employee Benefit Plan or
Seller Contract in existence as of the date hereof;

(ii) with respect to the Business, the Purchased Assets or the Assumed
Liabilities, make any loan, advance or capital contribution to, or any
investment in, or acquire, by merging or consolidating with, by purchasing any
of the Assets or securities of or by any other manner, directly or indirectly,
any business or any Person, or otherwise acquire any Assets other than in the
ordinary course of business consistent with past practice;

(iii) sell, lease, license, exchange, mortgage, pledge, transfer, encumber or
otherwise dispose of any of the Purchased Assets or any interest therein, or
permit any of the Purchased Assets to be subject to or become subject to any
Encumbrance, except for (A) sales of Inventory in the ordinary course of
business consistent with past practice and (B) Outstanding Encumbrances,
Permitted Encumbrances and Encumbrances under the Seller Supply Agreements;

(iv) other than as required to perform under a Material Contract in existence as
of the date hereof, move any tangible Assets (other than those that are de
minimis in the aggregate in monetary value) or employees of the Business or
transition any business activities (other than immaterial business activities)
utilized in satisfying its obligations under the 787 Supply Agreement from the
North Charleston Facility to any other location;

(v) knowingly abandon any patent application included in the Purchased
Intellectual Property;

(vi) with respect to the Business, the Purchased Assets or the Assumed
Liabilities, change any accounting methods, practices, principles or policies,
other than as required by applicable Law or GAAP, or make or rescind any
election relating to Taxes, settle or compromise any Legal Proceeding or other
controversy relating to Taxes that could reasonably be expected to result in an
adverse effect on Buyer or the Business after the Closing Date;

(vii) with respect to the Business, the Purchased Assets or the Assumed
Liabilities, make or agree to make any capital expenditures (other than as
required pursuant to any Contract in existence on the date hereof or executed
hereafter in accordance with Section 6.2(b)(viii) of this Agreement) in an
amount exceeding the amount provided in the Business’s 2009 Capital Asset Plan
set forth on Schedule 6.2(b)(vii);

(viii) except as otherwise prohibited by this Section 6.2(b), enter into any
Contract (A) that would be deemed to be a Material Contract if such Contract had
existed on the date hereof, other than (1) purchase orders pursuant to an
existing Contract that are subject to customary terms and conditions (which
include the applicable existing Contract), which, in the case of Contracts with
production suppliers, would not commit the Business with respect to more than
thirty (30) shipsets in the aggregate (measured since inception of such
Contract), or (2) in the case of Contracts not with production suppliers, any
Contract entered into in the ordinary course of business consistent with past
practice and customary terms and conditions (which include the applicable
existing Contract) that does not involve an amount in excess of $250,000

 

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in the aggregate, or (B) with a new supplier of the Business that may not be
terminated (without penalty) by Seller within thirty (30) days after the
delivery of a termination notice by Seller or that involves an amount in excess
of $100,000;

(ix) (A) assign or expressly (whether orally or in writing), or intend by its
conduct to, waive or release any rights or Claims arising out of or relating to
the Business (1) with value to the Business in excess of $100,000 individually
or $250,000 in the aggregate with respect to non-recurring Claims, (2) with
respect to recurring Claims involving production suppliers, with value to the
Business in excess of $10,000 per shipset individually or (3) with any of the
suppliers set forth on Schedule 6.2(b)(ix), or (B) modify or amend in any
material respect or terminate or renew any Purchased Contract (except as may be
expressly required by such Purchased Contract in consultation with Buyer);

(x) commence, settle or compromise, or agree to the entry of any Order in
respect of, any Claim or Legal Proceeding relating to the Business or any
material Purchased Asset (including any outstanding Claims with suppliers of the
Business to the extent the same relates to or would constitute an Assumed
Liability);

(xi) with respect to the Business, the Purchased Assets or the Assumed
Liabilities, make any payment to or enter into any Seller Contract with an
Affiliate other than pursuant to Seller Contracts existing as of the date hereof
and the provision of benefits under Employee Benefit Plans existing as of the
date hereof;

(xii) enter into any Contract that would expressly limit the freedom of the
Business (except for Seller’s applicable counterparty(ies) to any such Contract)
to compete in any line of business or with any Person or in any area; or

(xiii) authorize, commit or agree to do any of the foregoing.

Section 6.3 Consents and Governmental Authorizations.

(a) Promptly after the date hereof, Seller and Buyer shall (i) use commercially
reasonable efforts to give all notices required to be given to third parties in
connection with the transactions contemplated hereby, (ii) use commercially
reasonable efforts to obtain prior to the Closing all Consents and Governmental
Authorizations identified or required to be identified on Schedule 4.3, and
(iii) cooperate with and assist the other Party (including by providing to any
Governmental Entity at the reasonable request of the other Party, information
relating to such Party or its business or the Business, the Transaction
Documents or the transactions contemplated thereby) in obtaining promptly, and
in any event prior to Closing, all Consents and Governmental Authorizations
identified or required to be identified on Schedule 4.3 and Schedule 5.3. Except
as may be required pursuant to Section 6.21 in connection with the Lender
Waiver, the foregoing shall not require any Party to make any payment to any
Person in order to obtain any Consent with respect to any Purchased Contract.
Notwithstanding anything to the contrary set forth herein, the Parties
acknowledge and agree that Seller is responsible for obtaining the Lender Waiver
and, unless otherwise agreed by Buyer, Buyer is not obligated to make any
financial accommodation in connection with obtaining the Lender Waiver.

 

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(b) Notwithstanding anything in this Agreement to the contrary, this Agreement
shall not constitute an agreement to assign at Closing any Purchased Contract or
any Claim or right or any benefit arising thereunder or resulting therefrom if
an attempted assignment or transfer thereof without the consent of a third party
would constitute a breach or default thereof or give rise to a right of
termination or cancellation thereunder (any such Contract, Claim or right that
constitutes a Purchased Contract shall be referred to as a “Non-Assigned
Contract,” provided that the Site Development and Incentive Agreement shall not
constitute a Non-Assigned Contract). Seller and Buyer shall continue to use
commercially reasonable efforts for one hundred and eighty (180) days following
the Closing Date to obtain the Consents necessary to assign or transfer any of
the Non-Assigned Contracts. After the Closing, Seller shall not modify, amend,
terminate or renew any Non-Assigned Contract (except as may be expressly
required by such Non-Assigned Contract) without first obtaining the written
consent of Buyer (which consent may be withheld in Buyer’s sole discretion). If
such Consent is obtained following Closing, within such one hundred and eighty
(180) day period or thereafter, the applicable Non-Assigned Contract shall be
deemed to have been automatically assigned and/or transferred to Buyer on the
terms set forth in this Agreement with respect to the other Non-Assigned
Contracts transferred and assumed at the Closing. If such Consent is not
obtained, Seller and Buyer will cooperate with each other, in all commercially
reasonable respects, to design an arrangement pursuant to which Buyer will
receive all rights and benefits under such Non-Assigned Contract and, subject to
receiving such rights and benefits, perform all of the obligations under such
Non-Assigned Contract that are necessary for Buyer to be entitled to receive
such rights and benefits. The Parties acknowledge and agree that (x) this
Section 6.3(b) shall in no way diminish or negate the Parties’ respective
obligations set forth in clauses (i), (ii) and (iii) in Section 6.3(a) and
(y) the Non-Assigned Contracts constitute Purchased Contracts if and only if the
arrangements and procedures agreed to by the Parties in this Section 6.3(b)
provide Buyer the rights and benefits of any such Non-Assigned Contracts.

(c) Buyer and Seller will, as promptly as practicable, but in no event later
than fifteen (15) Business Days following the execution and delivery of this
Agreement, file with the United States Department of Commerce Bureau of Industry
and Security (“BIS”) a request to transfer License Number D405984 from Seller to
Buyer, together with the necessary supporting documents, pursuant to Export
Administration Regulations Section 750.10. If BIS requests additional
information or documentation, Buyer and Seller shall use commercially reasonable
efforts to promptly provide such requested information to BIS in order to
facilitate obtaining a validated letter from BIS authorizing the transfer.

(d) Promptly after the Closing, Seller and Buyer shall use commercially
reasonable efforts to obtain the consent of the Charleston County Aviation
Authority to satisfy all outstanding requirements of Special Condition h of
Department of the Army Permit No. 2004-1N-402 (the “Wetlands Permit”), it being
understood and agreed that the cooperation of the Charleston County Aviation
Authority, as owner of the North Charleston Real Property, will be necessary in
order to meet the requirements of Special Condition h. It is specifically agreed
that Seller will use commercially reasonable efforts, at Buyer’s expense, to
(i) make available to Buyer (and consent to any consultant disclosure to Buyer
of) all files and current personnel necessary to its development of the
application and plans for the Wetlands Permit and coordination and approval of
such plans and terms with the Charleston County Aviation Authority and
(ii) direct its applicable current personnel to assist Buyer in communications
with

 

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the Charleston County Aviation Authority requesting approval and filing of
papers necessary to satisfy Special Condition h. It is further understood and
agreed that Buyer (i) shall be responsible for all costs of preparing and
recording any necessary deed restrictive covenants or conservation easements in
a form acceptable to the Department of the Army and (ii) shall be responsible
for any costs of maintaining the preserved wetlands and upland buffers in
compliance with all applicable Law following the Closing for so long as Buyer is
a sub-tenant on the North Charleston Real Property.

Section 6.4 Access and Information.

(a) Except as may be (i) prohibited by applicable Law, (ii) prohibited by the
terms of any existing Seller Contract, or (iii) required to preserve legal
privilege, Seller shall, upon reasonable notice from Buyer, (A) afford to Buyer
and its Representatives reasonable access to the Purchased Assets and Seller’s
books, records, officers, employees, advisors, counsel, facilities, properties,
documents and other information with respect to the Business; provided such
access will be during normal business hours and such other times as are
reasonable and will be structured so as to not unreasonably interfere with the
conduct of the Business or the Purchased Assets; and (B) provide access to
Buyer, as soon as reasonably practicable upon Buyer’s reasonable request, to
make copies of such books, records, documents and information. If Seller
reasonably determines (after consultation with outside counsel) that any
requested disclosure would cause any loss of a legal or other privilege or
require consent under any Seller Contract, (1) Seller shall provide Buyer with
details regarding the type and nature of the information that is prohibited from
being disclosed, including to which Sections of this Agreement such information
relates and the monetary amount involved (to the extent that Seller is able to
provide such details without compromising such attorney-client privilege or
violating such confidentiality agreement), and (2) the Parties shall use
commercially reasonable efforts to make appropriate alternative disclosure
arrangements (e.g., the entry into an appropriate joint defense agreement in
connection with affording access to such information) or to obtain any such
required consent. Buyer, at its sole cost and expense and in its sole
discretion, may engage an environmental consultant to conduct a Phase I
environmental investigation with respect to the North Charleston Facility, on or
prior to the Closing Date, upon at least five (5) Business Days prior written
notice to Seller; provided that, notwithstanding any provision herein to the
contrary, Buyer shall not be permitted to conduct (x) any Phase II environmental
investigation or (y) any investigation or testing involving physically invasive
sampling of soil, ground water or other substances.

(b) Except as may be (i) prohibited by applicable Law, (ii) prohibited by the
terms of any existing Contract of Buyer, or (iii) required to preserve legal
privilege, for six (6) years from and after the Closing Date, Buyer shall, upon
reasonable notice from Seller, afford to Seller and its Representatives
reasonable access to (and the ability to make copies of) all of the Business
Books and Records existing as of the Closing Date and, subject to the reasonable
discretion of Buyer, the other books and records of Buyer and its Subsidiaries
relating to the conduct of the Business following the Closing; provided such
access will be during normal business hours and such other times as are
reasonable and will be structured so as to not unreasonably interfere with the
conduct of the Business; and provided further that Seller and Buyer are not
engaged in litigation or any other dispute resolution process (including any
claim for indemnification hereunder), and there does not exist any threatened or
pending Claim

 

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(whether written or oral) between the Parties, with respect to the Business or
the transactions contemplated by this Agreement or such documents do not relate
to the subject matter of such litigation or other proceedings or pending or
threatened Claim. If Buyer reasonably determines (after consultation with
outside counsel) that any requested disclosure would cause any loss of a legal
or other privilege or require consent under any Contract of Buyer, (A) Buyer
shall provide Seller with details regarding the type and nature of the
information that is prohibited from being disclosed, including to which Sections
of this Agreement such information relates and the monetary amount involved (to
the extent that Buyer is able to provide such details without compromising such
attorney-client privilege or violating such confidentiality agreement) and
(B) the Parties shall use commercially reasonable efforts to make appropriate
alternative disclosure arrangements (e.g., the entry into an appropriate joint
defense agreement in connection with affording access to such information) or to
obtain any such required consent.

Section 6.5 Exclusivity. From the date hereof through the Closing or until such
time as this Agreement shall have been terminated pursuant to Article X, Seller
will not, nor will Seller authorize any Affiliate or Representative of Seller
to, and Seller will instruct its Affiliates or Representatives not to
(a) directly or indirectly solicit, initiate, encourage or participate in any
way in (including by way of furnishing confidential information), or take any
other action that facilitates any discussion, inquiry, offer, proposal,
negotiation or other communication with any Person or group (other than Buyer or
its Representatives) relating to, or that could reasonably be expected to result
in, any merger, consolidation, sale, exchange or other disposition of any
substantial portion of the assets outside of the ordinary course of business or
equity interests of or any business combination, recapitalization, liquidation,
dissolution or other similar transaction (or any combination of any of the
foregoing) relating to the disposition of all, or substantially all, or any
substantial portion of, the Business or the Purchased Assets (each, an
“Acquisition Proposal”); (b) disclose, directly or indirectly, to any Person
known to Seller to be considering an Acquisition Proposal any information
concerning Seller, the Business or any of the Purchased Assets; or (c) enter
into, continue or participate in any discussions, negotiations or other
communications, or enter into any understanding, Contract or commitment, with
any third party relating to, or take any action in furtherance of, any written
Acquisition Proposal received by Seller. Seller will as promptly as practicable
(and in any event within three (3) Business Days) notify Buyer of any
Acquisition Proposal. Seller shall be responsible for any breach of this
Section 6.5 by any of its Affiliates or Representatives.

Section 6.6 Public Announcements. Each of the Parties shall, to the extent
reasonably practicable and only as permitted by applicable Law, consult with
each other before issuing, and shall provide each other with the opportunity to
review and comment upon, any press release or other public announcement or
statement with respect to this Agreement or the transactions contemplated
hereunder (it being understood that, notwithstanding anything in Section 6.9 or
the Non-Disclosure Agreement to the contrary, neither Party shall be required to
obtain the consent of the other Party to make any such press release or other
public announcement or statement unless such release or announcement discloses
any Confidential Information of the other Party).

Section 6.7 Transaction Expenses. Except as expressly set forth herein, each
Party shall bear its own Transaction Expenses.

 

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Section 6.8 Notices of Certain Matters. From the date of this Agreement until
the Closing, Buyer and Seller shall each promptly notify the other in writing of
any pending or, to the Knowledge of such Party, threatened, Legal Proceeding
(a) challenging or seeking damages in connection with the transactions
contemplated hereunder or (b) seeking to restrain or prohibit the consummation
of the transactions contemplated hereunder. The Parties shall reasonably
cooperate with each other in defending against any such Legal Proceeding,
including seeking to have vacated or reversed any stay or temporary restraining
order entered in connection therewith by any court or other Governmental Entity.

Section 6.9 Confidentiality.

(a) From and after the Closing, neither Buyer nor Seller shall, and each of
Buyer and Seller shall cause their respective Affiliates and Representatives not
to, without first obtaining the written consent of the other Party (which
consent may be withheld in such Party’s sole discretion) disclose to any Person
(other than such Party’s Representatives) (i) any confidential or proprietary
information received from the other Party in connection with the transactions
contemplated hereby, (ii) in the case of Seller, any confidential or proprietary
information that Seller has that is contained in the Purchased Assets or that
relates to the Business and (iii) the Transaction Documents and any of the
terms, conditions, negotiations or other information with respect hereto and
thereto or the transactions contemplated hereby and thereby (collectively, the
“Confidential Information”), whether furnished or available before or after the
Closing, whether documentary, electronic or oral, whether labeled or otherwise
identified as confidential, and regardless of the form of communication or the
manner in which it is or was furnished. Notwithstanding the foregoing, either
Buyer or Seller or their respective Affiliates may disclose such Confidential
Information as they determine in good faith is required by applicable Law, the
rules or regulations of any national securities exchange (or the terms of any
outstanding securities of the disclosing Party) or by oral questions,
interrogatories, requests for information or other documents in legal
proceedings, subpoena, civil investigative demand or any other similar process,
but only to the extent so required, or in connection with any Claim, Legal
Proceeding, Tax matter or dispute between the Parties with respect to this
Agreement or any of the Transaction Documents. If either Buyer or Seller or
their respective Affiliates are required (by oral questions, interrogatories,
requests for information or other documents in legal proceedings, subpoena,
civil investigative demand or any other similar process) to disclose any
Confidential Information, such disclosing Party shall, to the extent
practicable, provide the non-disclosing Party with prompt written notice (but in
any event not less than ten (10) days advance notice) of any such requirement so
that the non-disclosing Party shall have an opportunity to seek a protective
order or other appropriate remedy. The disclosing Party shall disclose only that
portion of the Confidential Information or other information that is reasonably
necessary to disclose in order to comply with such requirement. Notwithstanding
the foregoing, in the event that either Buyer or Seller or their respective
Affiliates are required to disclose any Confidential Information, such
disclosing Party shall exercise their reasonable efforts to preserve the
confidentiality of such Confidential Information, including by cooperating with
the non-disclosing Party (at the non-disclosing Party’s cost and expense) to
obtain an appropriate protective order or other reliable assurance that
confidential treatment will be accorded such Confidential Information, as
reasonably requested by the non-disclosing Party. Notwithstanding the foregoing,
(i) following Closing, Buyer shall not be prohibited from disclosing to any
Person any information included in the Purchased Assets or relating to the
Business (other than

 

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non-public Transaction Documents and the terms and conditions thereof and other
non-public information relating to the transactions contemplated hereby) and
(ii) the obligations of the Parties under this Section shall expire on the
second anniversary of the Closing Date; provided that, with respect to any
Confidential Information that is a trade secret of Seller, Buyer or the Business
under applicable Law, the obligations of the Parties under this Section shall
apply for so long as the owner of such Confidential Information maintains such
Confidential Information as a trade secret under applicable Law. Effective as of
the Closing, the Non-Disclosure Agreement shall terminate and shall no longer be
enforceable against any party thereto. In the event of any ambiguity or conflict
between the terms and conditions of this Section 6.9(a) and the terms and
conditions of any other Transaction Document or other written agreement between
Seller and Buyer and/or Boeing, the terms and conditions of such other
Transaction Document or agreement shall control.

(b) Promptly following the reasonable request of Buyer, Seller or any of its
Subsidiaries shall use commercially reasonable efforts to enforce all Contracts,
the primary subject matter of which is confidentiality, nondisclosure or similar
agreements with respect to confidentiality arrangements executed by or on behalf
of Seller during the two (2) year period immediately preceding the date of this
Agreement in connection with the consideration of the sale of Seller (including
with respect to the sale of the Business), to the extent that Buyer or any of
its Affiliates is not a party to, or an assignee of rights under, such Contracts
(or otherwise an intended third-party beneficiary of such Contracts), with
respect to the confidential information of Buyer or any of its Affiliates
relating to the Business or the Purchased Assets, on behalf of and at the
reasonable direction of Buyer, provided that Buyer shall be solely responsible
for the cost and expense of such enforcement and any Liability relating thereto.

Section 6.10 Non-Solicitation.

(a) Seller shall not, whether directly or indirectly, during the period
beginning on the Closing Date and ending on the second anniversary of the
Closing Date (such period, the “Restricted Period”), (i) solicit the employment
of, or hire, any Initial Restricted Employee without the prior written consent
of Buyer, provided, however, that Seller shall not be in breach of its
non-solicitation obligation set forth in the foregoing clause (i) solely as a
result of any general solicitation advertisements that are not targeted at any
Initial Restricted Employees, but Seller shall be prohibited from hiring any
Initial Restricted Employees who respond to such general solicitation
advertisements not targeted at the Initial Restricted Employees; or (ii) take
any action which is intended to induce any Initial Restricted Employee to leave
his or her employ with the Business.

(b) Seller shall not, whether directly or indirectly, during the Restricted
Period solicit the employment of any Additional Restricted Employee without the
prior written consent of Buyer; provided, however, that Seller shall not be in
breach of its non-solicitation obligation under this Section 6.10(b) solely as a
result of any general solicitation advertisements that are not targeted at any
Additional Restricted Employees and Seller shall not be prohibited from hiring
any Additional Restricted Employees who respond to such general solicitation
advertisements not targeted at the Additional Restricted Employees.

 

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(c) Except as provided in the Transition Services Agreement, Boeing Commercial
Airplanes (“BCA”) shall not, and Buyer shall not on behalf of BCA, whether
directly or indirectly, during the Restricted Period, (i) solicit the employment
of, or hire, any Seller Engineering Employees without the prior written consent
of Seller, provided, however, that Buyer shall not be in breach of its
non-solicitation obligation set forth in the foregoing clause (i) solely as a
result of any general solicitation advertisements that are not targeted at any
Seller Engineering Employees, but Buyer shall be prohibited from hiring any
Seller Engineering Employee who respond to such general solicitation
advertisements; or (ii) take any action which is intended to induce any Seller
Engineering Employee to leave his or her employ with Seller.

(d) Except as provided in the Transition Services Agreement, BCA shall not, and
Buyer shall not on behalf of BCA, whether directly or indirectly, during the
Restricted Period, solicit the employment of any New Seller Engineering
Employees without the prior written consent of Seller; provided, however, that
Buyer shall not be in breach of its non-solicitation obligation under this
Section 6.10(d) solely as a result of any general solicitation advertisements
that are not targeted at any New Seller Engineering Employees and Buyer shall
not be prohibited from hiring any New Seller Engineering Employees who respond
to such general solicitation advertisements not targeted at the New Seller
Engineering Employees.

(e) If Buyer or Seller breaches any the restrictive covenants set forth in this
Section 6.10, then the non-breaching Party shall have the following rights and
remedies against the breaching Party, each of which shall be independent of the
others and severally enforceable, and each of the following rights and remedies
is in addition to, and not in lieu of, any other rights and remedies otherwise
available to such non-breaching Party at Law or in equity for such actions:
(i) the right and remedy to have the restrictive covenant in this Section 6.10
specifically enforced against such breaching Party, including temporary
restraining orders and injunctions by any court of competent jurisdiction, it
being agreed by the Parties that any breach of this Section 6.10 would cause
irreparable injury to the non-breaching Party and that money damages would not
provide an adequate remedy to the non-breaching Party, and (ii) the right and
remedy to collect from the breaching Party any such Losses incurred by the
non-breaching Party as a result of enforcing this Section 6.10.

(f) Each Party agrees that, in the event a court of competent jurisdiction
declares there has been a breach by such Party of this Section 6.10, the term of
any such term or covenant so breached shall be automatically extended with
respect to such Party for a period of time of the violation from the date on
which such breach ceases.

Section 6.11 Intracompany Work Orders. Seller shall cancel any work orders
existing between the Business and the other businesses and facilities of Seller
in existence on the Closing Date. Such intracompany work orders shall be
replaced with purchase orders agreed by Seller and Buyer pursuant to the SOW
Supply Agreement and the Transition Services Agreement.

Section 6.12 Purchased Intellectual Property. Except as expressly provided in
this Agreement or in any other Transaction Document, (a) Seller has no right to
use any of the Purchased Intellectual Property from and after the Closing and
(b) Buyer has no right to use any of the Retained Intellectual Property from and
after the Closing. Effective as of the Closing, except for the rights expressly
provided in the Transaction Documents, any and all rights and/or licenses
(whether express or implied) of Seller or any of its Affiliates arising from or
related to any of the Purchased Intellectual Property are hereby terminated.

 

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Section 6.13 Insurance.

(a) Seller will use commercially reasonable efforts to keep insurance policies
currently maintained related to the Business, the Purchased Assets and current
or former employees, or replacements therefor, in full force and effect through
the Closing Date. Buyer shall become solely responsible for all insurance
coverage after the Closing Date with respect to the Business and the Purchased
Assets.

(b) From and after the Closing Date, none of Buyer or its Affiliates will have
any rights with respect to any of Seller’s insurance policies, except that,
following Closing, (i) Seller shall pay to Buyer all insurance proceeds (after
deducting the out-of-pocket costs and expenses incurred following Closing in
connection with such claim and obtaining such proceeds) that it receives
following the date hereof to the extent relating to the Business, any of the
Purchased Assets or any of the Assumed Liabilities with respect to any claims
made by Seller prior to Closing under any policies of insurance of Seller in
effect prior to the Closing, other than any such proceeds received in respect of
any Excluded Liability, and (ii) at the written request of Buyer, Seller shall,
at the cost and expense of Buyer, use commercially reasonable efforts to seek
recovery on behalf of Buyer under such insurance policies (to the extent
permitted under such insurance policies), subject to any deductible or
self-retention or other policy requirement or limit; provided that this
Section 6.13 shall not require Seller to initiate, engage in or threaten
litigation with any Person, including any of its insurance carriers.

(c) Seller shall use reasonable efforts to cause the Premises Pollution
Liability Policy No. PPL G23794603 001 issued by Illinois Union Insurance
Company (the “Environmental Insurance Policy”) to be endorsed to add Buyer and
Boeing, effective as of the Closing, as additional insureds with full
unencumbered rights therein, but only with respect to Liabilities arising out of
the ownership, operation, maintenance or use of the “covered locations” as
defined in the Environmental Insurance Policy. Seller shall provide written
confirmation of the insurer’s acceptance of the foregoing obligation, assuming
such acceptance is received, following Seller’s receipt thereof from the
insurer. Seller will use commercially reasonable efforts to keep the
Environmental Insurance Policy in full force and effect through the full term of
the Environmental Insurance Policy and will provide Buyer with ninety (90) days
prior written notice before amending, commuting, terminating or otherwise
changing the Environmental Insurance Policy (it being understood that the
expiration of the Environmental Insurance Policy by its terms, or erosion of
aggregate limits resulting from claims activity, will not constitute any such
action).

Section 6.14 Litigation Support. Subject to Section 6.4(b) with respect to books
and records of Buyer and its Subsidiaries related to the conduct of the Business
following the Closing, in the event and for so long as either Party is actively
contesting or defending against any Claim brought by a third party in connection
with any fact, situation, circumstance, status, condition, activity, practice,
plan, occurrence, event, incident, action, failure to act or transaction
involving the Business, the other Party shall reasonably cooperate with the
contesting or defending Party and its counsel in the contest or defense, make
available its personnel and

 

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provide such access to its non-privileged books and records as may be reasonably
requested in connection with the contest or defense, at the sole cost and
expense of the contesting or defending Party (unless such contesting or
defending Party is entitled to indemnification therefor under Article XI, in
which case, the costs and expense shall be borne by the Indemnifying Persons to
the extent provided in Article XI). Notwithstanding the foregoing, this
Section 6.14 shall not apply to pending or threatened Claims (whether written or
oral) with respect to which the Parties are in dispute with each other.

Section 6.15 Transfer of Governmental Authorizations. Seller shall use
commercially reasonable efforts to assist Buyer, upon Buyer’s reasonable
request, in providing notices and otherwise taking actions required to transfer
or reissue any Governmental Authorizations as a result of or in furtherance of
the transactions contemplated by this Agreement. Seller shall use commercially
reasonable efforts to cooperate with Buyer, upon Buyer’s reasonable request, to
provide information necessary to apply for the transfer or reissuance of such
Governmental Authorizations. Notwithstanding anything to the contrary in
Section 6.9 or the Non-Disclosure Agreement, Buyer and Seller shall, after
reasonable prior notice to and consultation with the other Party, be permitted
to provide confidential or proprietary information of the other Party to
Governmental Entities to the extent necessary to transfer or reissue any
Governmental Authorization to Buyer.

Section 6.16 787 Supply Agreement. At the Closing, Seller shall, and Buyer shall
cause Boeing to, enter into a termination agreement in the form of Exhibit A
attached hereto (the “Termination and Mutual Release Agreement”), pursuant to
which the 787 Supply Agreement will be terminated simultaneously with the
Closing, except as provided in the Termination and Mutual Release Agreement.

Section 6.17 Delivery of Financial Information. From the date of this Agreement
until the Closing, Seller will deliver to Buyer (i) an updated calculation of
the Adjusted Net Investment Amount, as of the last day of each month ended after
the date hereof and (ii) the internal, unaudited balance sheets of the Business
and the related statements of income and cash flows of the Business as of the
last day of each monthly reporting period ended after June 1, 2009
(collectively, the “Interim Financial Information”), within thirty (30) days
after the conclusion of each month. The Interim Financial Information will be
prepared in accordance with (a) the Business Books and Records and (b) the
accounting practices, policies and methodologies used by Seller in preparing its
internal, unaudited financial statements attached to Schedule 4.4.

Section 6.18 Cash Management.

(a) The Parties agree that (i) Seller will be liable for payment of, and will
fund all amounts in respect of, all checks issued by Seller relating to the
Purchased Contracts that are outstanding as of the Closing Date and presented
for payment after the Closing Date in disbursement accounts of Seller or any of
its Affiliates and (ii) Buyer will be liable for payment of, and will fund all
amounts in respect of, all checks relating to the Purchased Contracts that are
not yet outstanding as of the Closing Date and presented for payment after the
Closing Date.

 

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(b) (i) Seller will, and will cause its Subsidiaries to, promptly pay to Buyer
the amount of any payments under the Purchased Contracts received by Seller or
any of its Subsidiaries after the Closing Date, whether received in lock boxes,
via wire transfer or otherwise, and (ii) Buyer will, and will cause its
Subsidiaries to, promptly pay to Seller the amount of any payments in respect of
the Excluded Assets received by Buyer or any of its Affiliates after the Closing
Date, whether received in lock boxes, via wire transfer or otherwise.

Section 6.19 Title Insurance. In the event Buyer elects to obtain a leasehold
title insurance policy for the interest to be acquired by Seller in the North
Charleston Real Property, Seller shall, at Buyer’s cost and expense, reasonably
cooperate with Buyer in providing consents and otherwise taking actions required
to issue any such policy.

Section 6.20 Letters of Credit; Surety Bond. Schedule 6.20 sets forth each of
the surety bonds and letters of credit made or provided by Seller and its
Affiliates (or any of them) for the benefit of the Business (the “Guarantees”)
outstanding as of the date of this Agreement. Buyer and Seller shall each use
its commercially reasonable efforts (which shall not require any modifications
of the terms of the underlying obligations) to cause Buyer or one or more of its
Affiliates to be substituted in all respects for Seller and its Affiliates
effective as of the Closing Date, in respect of all obligations of Seller and
its Affiliates under each of the Guarantees. If Buyer is unable to effect such a
substitution with respect to any such Guarantee after using its commercially
reasonable efforts to do so, then Buyer shall (i) obtain letters of credit, on
terms and from financial institutions reasonably satisfactory to Seller, with
respect to the obligations covered by each of the Guarantees for which Buyer
does not effect such substitution in an amount equal to the amount of each such
Guarantee identified by Seller to Buyer in writing prior to the Closing and
(ii) until Buyer obtains such letters of credit referred to in the foregoing
clause (i), not, and not permit the Business or any of Buyer’s Affiliates to
renew or extend the term of, or increase its obligations under, or transfer to
another third party, any Contract underlying such Guarantee. From the date of
this Agreement until the Closing, Seller shall not enter into or modify or amend
any Guarantee without first consulting with Buyer.

Section 6.21 Lender Waiver. From the date hereof until the earlier to occur of
(i) the Closing and (ii) the termination of this Agreement pursuant to Article
X, Seller will, and will cause its Subsidiaries to, use their commercially
reasonable efforts to obtain such written waiver from the Required Lenders (as
defined in the Seller Senior Credit Agreement) of the covenant in Section 7.5(b)
of the Seller Senior Credit Agreement as is necessary to permit consummation of
the transactions contemplated hereby on terms reasonably acceptable to Seller
(the “Lender Waiver”), including (a) making senior management of Seller and its
Subsidiaries reasonably available to respond to questions and other requests for
information from such lenders, (b) using commercially reasonable efforts to
negotiate the definitive documentation for the Lender Waiver, (c) using
commercially reasonable efforts to procure other definitive financing documents
or other reasonably requested certificates or documents, including comfort
letters, customary certificates (including a certificate of the chief financial
officer of Seller with respect to solvency matters) and legal opinions and
(d) using commercially reasonable efforts to satisfy on a timely basis all
agreed upon conditions under the documents entered into by Seller or its
Subsidiaries in connection with obtaining the Lender Waiver (excluding any
document to which Boeing or any of its Subsidiaries is a party). Seller shall
keep Buyer reasonably informed on a current basis of any material development
relating to the Lender Waiver and the status of Seller’s efforts to obtain the
Lender Waiver.

 

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ARTICLE VII

TAX MATTERS

Section 7.1 Liability for Taxes.

(a) Seller is responsible for and will timely pay any Taxes arising or resulting
from or in connection with the conduct of the Business or the ownership or use
of the Purchased Assets attributable to any Tax period ending on or before the
Closing Date (a “Pre-Closing Period”) other than any Assumed Liability. Buyer is
responsible for and will timely pay any Taxes arising or resulting from or in
connection with the conduct of the Business or the ownership or use of the
Purchased Assets attributable to any Tax period beginning after the Closing Date
(a “Post-Closing Period”) and any Taxes that are an Assumed Liability.

(b) The Parties agree that any Apportioned Taxes, and any refund, rebate or
similar payment received by Seller or Buyer for any Apportioned Taxes, will be
apportioned between Seller and Buyer as follows:

(i) For Apportioned Taxes measured by the amount or level of any item (including
such taxes as are measured by the value of intangibles), Seller is responsible
for the amount of such Apportioned Taxes that are determined by multiplying
(A) the amount or level of such items immediately prior to the Closing, by (B) a
fraction, the numerator of which is the number of calendar days in the portion
of the Straddle Period ending on the Closing Date and the denominator of which
is the number of calendar days in the entire Straddle Period.

(ii) For all Apportioned Taxes not described in clause (i), Seller is
responsible for the amount of such Apportioned Taxes that are determined by
multiplying (A) the amount of such Apportioned Taxes for the entire Straddle
Period, by (B) a fraction, the numerator of which is the number of calendar days
in the portion of the Straddle Period ending on the Closing Date and the
denominator of which is the number of calendar days in the entire Straddle
Period.

(iii) All Apportioned Taxes that are not the responsibility of Seller pursuant
to Section 7.1(b)(i) through Section 7.1(b)(ii) hereof shall be the
responsibility of Buyer.

(c) For the avoidance of doubt, Seller and Buyer are each responsible for their
own Income Taxes arising out of their conduct of the Business or their ownership
or use of the Purchased Assets, including Income Taxes arising out of the
transactions contemplated in this Agreement.

(d) Notwithstanding any other provision contained in this Agreement (including
the limitations set forth in Sections 11.2 or 11.3), any obligation arising out
of this Section 7.1 will not be subject to any limits of minimum or maximum
amounts, measurement of aggregate amount of Losses or any limit of time.

 

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Section 7.2 Tax Return Filing.

(a) Seller will prepare and file all Tax Returns required to be filed for any
Pre-Closing Period with respect to the Business and the Purchased Assets,
including such Tax Returns that are required to be filed after the Closing Date.
Seller will properly prepare and file such Tax Returns no later than the due
dates thereof, as such dates may be extended, in accordance with past practice
to the extent permitted by applicable Law. Seller will pay all Taxes and other
payments required to be paid for periods covered by such Tax Returns at the time
such Tax Returns are filed.

(b) Buyer will prepare and file all Tax Returns required to be filed for any
Post-Closing Period and any Straddle Period (or portion thereof) for which
Seller is not required to file a Tax Return pursuant to Section 7.2(a) with
respect to the Business and the Purchased Assets.

(c) In the event that either Seller or Buyer is liable pursuant to Section 7.1
for any Taxes paid by the other Party with respect to any Tax Return,
reimbursement shall be made within ten (10) days after receipt of a request for
such reimbursement and documentation reasonably evidencing such payment
obligation.

(d) For the avoidance of doubt, Seller and Buyer are each responsible for the
preparation and filing of their own Income Tax Returns and payment of Income
Taxes required to be paid for periods covered by such Income Tax Returns.

Section 7.3 Tax Contests; Audit Responsibilities.

(a) Seller shall have the right to control the conduct of any investigation,
audit or other proceeding by or with any Governmental Entity with respect to
Taxes for which Seller is responsible under Section 7.1(a). Buyer shall have the
right to control the conduct of any investigation, audit or other proceeding by
or with any Governmental Entity with respect to Taxes for which Buyer is
responsible under Section 7.1(a). If the settlement or final determination of
any proceeding described in this subsection could reasonably be expected to have
an adverse effect on Taxes of the other Party, the controlling Party shall not
consent to the settlement or final determination of such proceeding without the
other Party’s written consent, which consent shall not be unreasonably delayed,
conditioned or withheld.

(b) Each of Buyer and Seller agree to give written notice to the other of any
notification of an investigation, audit or other proceeding by or with any
Governmental Entity with respect to any Taxes allocated to the other pursuant to
this Article VII within 15 days after its receipt of such notification by the
Governmental Entity.

(c) Buyer shall control any investigation, audit or other proceeding by or with
a Governmental Entity with respect to Apportioned Taxes (an “Apportioned Taxes
Claim”), provided, that (i) the Buyer shall keep Seller informed regarding the
progress and substantive aspects of any Apportioned Taxes Claim, including
providing Seller with all written materials relating to such Tax proceeding
received from the relevant Governmental Entity and all written materials
submitted to such taxing authority by the Buyer, (ii) Seller shall be entitled
to participate in any Apportioned Taxes Claim, including having an opportunity
to comment on any

 

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written materials prepared in connection with any Apportioned Taxes Claim and
attending any conferences relating to any Apportioned Taxes Claim and
(iii) Buyer shall not consent to the settlement or final determination in such
proceeding without the Seller’s prior written consent, which consent shall not
be unreasonably delayed, conditioned or withheld. Each Party shall bear its own
costs for participating in such Tax contest.

(d) Any net refunds and credits attributable to the payment of Taxes that are
the responsibility of Seller pursuant to Section 7.1 shall be for the account of
Seller. Any net refunds and credits attributable to the payment of Taxes that
are the responsibility of Buyer pursuant to Section 7.1 shall be for the account
of Buyer.

Section 7.4 Cooperation.

(a) Each of Seller and Buyer shall:

(i) provide assistance to each other Party as reasonably requested in preparing
and filing Tax Returns and Income Tax Returns with respect to the Business and
the Purchased Assets and responding to audits or disputes with Governmental
Authorities;

(ii) make available to each other Party as reasonably requested all information,
records, and documents relating to Taxes concerning the Business or the
Purchased Assets, provided that no Party shall be required to provide any Income
Tax Return or related work papers unless the other Party can show reasonable
good cause for needing such information in connection with any audit or
examination of any Income Taxes of the Business and such information is not
otherwise available to the requesting Party without providing an Income Tax
Return or related work papers; and

(iii) retain any books and records that could reasonably be expected to be
necessary or useful in connection with any preparation by any other party of any
Tax Return or Income Tax Return, or for any audit, examination, or proceeding
relating to Taxes or Income Taxes. Such books and records shall be retained
until the expiration of the applicable statute of limitations (including
extensions thereof) or applicable time for any appeals, if relevant.

(b) On or before the Closing Date, each of Buyer and Seller will work together
to obtain and/or furnish to the other Party any applicable forms, certificates,
or other information that is requested by a Party to obtain any exemption or
reduction from Transfer Taxes or other Taxes. Buyer shall provide a properly
completed sales Tax manufacturing/resale exemption certificate to Seller within
a reasonable period of time after the Closing Date, and Seller shall accept such
certificate for purposes of filing the Transfer Tax Returns under Section 7.5
hereof, provided such certificate is provided to Seller within a reasonable
period of time after the Closing Date.

(c) Seller and Buyer agree that they will cooperate in the transition of payroll
tax withholding and reporting and will seek to accomplish such transition in a
manner that will minimize the tax effect on any Transferred Employees, to the
extent administratively practicable, but Buyer will determine in its sole
discretion whether to elect to be the “successor employer” for purposes of
Section 3121 of the Code.

 

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Section 7.5 Transfer Taxes. Notwithstanding any requirement of Law, and
notwithstanding anything else to the contrary in this Agreement except for
Buyer’s obligation to provide a properly completed sales Tax
manufacturing/resale exemption certificate to Seller under Section 7.4(b)
hereof, Buyer and Seller will each be responsible for one half of any and all
Transfer Taxes. The Party required under applicable Laws to file any necessary
Transfer Tax Returns shall file such Transfer Tax Returns no later than the due
dates thereof, as such dates may be extended. Seller agrees that it will file
(a) any applicable deed recording fee return (and any attachments and exhibits
thereto) with respect to the South Carolina real property, and (b) any
applicable South Carolina sales Tax Return that is to be filed with respect to
the transaction contemplated by this Agreement. Buyer and Seller agree that the
fair market value of the real property and tangible personal property subject to
Transfer Taxes shall be determined as set forth in Schedule 7.5. All Transfer
Taxes required to be paid will be paid by the Parties at the time Transfer Tax
Returns are filed.

ARTICLE VIII

EMPLOYEE MATTERS

Section 8.1 Employment. Schedule 8.1(a)(i) contains the names of all employees
of the Business as of the date of this Agreement employed by Seller in North
Charleston, South Carolina (as reflected in Seller’s payroll system for the
North Charleston Facility) and any employees of the Business stationed with or
assigned to subcontractors of the Business (including field service,
surveillance and quality control personnel) or assigned to Buyer’s manufacturing
facilities as of the date of this Agreement. Seller shall deliver to Buyer an
updated Schedule 8.1(a)(i) at least ten (10) days prior to the Closing Date.
Seller will have provided the following information to Buyer with respect to
each such employee as of the date hereof (which information will be updated at
least ten (10) days prior to the Closing Date): employee name, employee number,
job title, job code, work location, service start date, date of birth, home
address, shift, current base salary (hourly rate for non-exempt employees), any
additives to such base salary such as shift differentials or cost of living
adjustments, citizenship status, whether such employee is on active status or a
leave of absence, and the names of any employees for which Seller is in the
process of terminating. Schedule 8.1(a)(ii) contains the names, job titles and
work locations of all employees who are currently employed by Seller who are no
longer Employees and who are not Retained Employees, but who were employed by
Seller at the North Charleston Facility primarily in connection with the
Business as of January 1, 2009. Prior to the Closing, Buyer shall extend an
offer of employment (each an “Offer” and collectively, the “Offers”) to each
Employee set forth on such updated Schedule 8.1(a)(i) other than the Retained
Employees and the employees for which Seller is in the process of terminating,
as provided in this Article VIII. Employees who accept such Offer of employment
from Buyer and whose employment with the Business continues with Buyer as of the
applicable Hire Date shall be referred to herein as “Transferred Employees.” In
the event Buyer does not extend an Offer to an Employee set forth on Schedule
8.1(a)(i) (as such schedule is updated pursuant to this Section 8.1) (other than
Retained Employees), or revokes such an Offer prior to the Closing, then
notwithstanding any other provision of this Agreement to the contrary, Buyer
shall be responsible for all costs and Liabilities with respect to such Employee
that arise from conduct of Buyer or any of its Affiliates or from the
termination of employment of such Employee by Seller immediately prior to, on or
after the Closing Date or from any tort or discrimination Claims brought by such
Employee against Seller.

 

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Section 8.2 Non-Union Employees.

(a) The Offers shall provide each Employee with a consideration period that is
no less than one week (the “Offer Consideration Period”). The Offers shall
provide that as of the Hire Date, the applicable Employee’s terms and conditions
of employment will include (i) the same or a more favorable base wage and
(ii) overall compensation and employee benefits that are substantially
comparable in the aggregate to the terms of the Employee’s employment with
Seller in existence immediately prior to the Hire Date (collectively, “Minimum
Terms and Conditions of Employment”). As of the Hire Date and, except as
otherwise provided herein, for a period of not less that twelve (12) months
after the Closing Date, the employment of Transferred Employees shall be on
terms and conditions no less favorable than the Minimum Terms and Conditions of
Employment. “Hire Date” shall mean (A) with respect to Employees who are not
Absent Employees and who will become Transferred Employees, 12:01 a.m. Eastern
Time on the Closing Date or (B) with respect to Absent Employees, 12:01 a.m.
Eastern Time on the first business day the applicable Absent Employee returns to
active employment from leave. Buyer shall notify Seller of the acceptance and
rejections of Offers of employment that have been received from each of the
Employees (x) on at least a weekly basis during the Offer Consideration Period
and (y) in total within three (3) Business Days following the end of the Offer
Consideration Period.

(b) Except as described in the next sentence of this Section 8.2(b), the
employment of each Transferred Employee (including any Employee, other than an
Absent Employee, who is absent from active employment and receiving workers’
compensation benefits or is on short-term disability or approved leave of
absence) with Seller shall cease immediately prior to the Hire Date, and the
employment of each such Transferred Employee with Buyer shall commence
immediately upon the Hire Date. In the case of any Employee who is absent from
active employment on long-term disability, and who receives and accepts an Offer
from Buyer prior to the Closing (the “Absent Employees”), the employment of such
individual with Buyer shall commence upon the date of his or her return to
active work, and such Employee shall become a Transferred Employee as of such
date. Notwithstanding anything in this Agreement to the contrary, no personnel
records with respect to a Transferred Employee will be transferred to Buyer
until the applicable Hire Date with respect to each such Transferred Employee.
Buyer shall be permitted to seek any releases required by applicable Law from
the employees of Seller set forth on Schedule 8.1(a)(i) with respect to such
employees’ medical records prior to the Closing Date (provided that Buyer shall
not condition any Offers on an Employee furnishing any such release), and Buyer
shall be permitted to view and make copies of such medical records with respect
to an employee once such employee has signed such release.

(c) The vacation program adopted by Buyer for the Transferred Employees shall
recognize years of service with Seller for purposes of computing vacation
benefits. Buyer shall assume and be responsible for, and shall give full credit
for, all vacation benefits of the Transferred Employees accrued but not taken as
of the Closing Date. Seller shall have no responsibility or Liability for any
vacation benefits of the Transferred Employees on or after the Closing Date,
including vacation benefits accrued prior to the Closing Date. Buyer and Seller
acknowledge and agree that Buyer shall not assume any Liabilities for vacation
benefits accrued through the Closing Date for any Employee that does not become
a Transferred Employee.

 

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(d) Excluding defined benefit pension and retiree medical plans, Buyer shall
recognize the service start date of each Transferred Employee as set forth in
Schedule 8.1(a)(i) for all purposes, including membership, vesting, benefit
accrual rate and entitlement to benefits under Buyer’s relevant employee benefit
plans, except to the extent it would result in the duplication of benefits.
Seller shall provide each Transferred Employees the opportunity to retire as an
active employee of Seller under the Employee Benefit Plans for a 90-day grace
period following Closing if such Transferred Employee would have otherwise been
eligible to retire. For purposes of early retirement under Seller’s defined
benefit pension plans, Seller shall treat Transferred Employees as having been
laid off.

(e) Each Transferred Employee (and his or her eligible dependents, as
applicable), shall be immediately eligible as of the relevant Hire Date to
participate in and accrue benefits under Buyer’s employee benefit plans, which
apply to Transferred Employees. With respect to each Transferred Employee (and
his or her eligible dependents, as applicable), Buyer shall cause such plans to
(i) waive any eligibility periods, evidence of insurability or pre-existing
condition limitations and (ii) honor any deductibles, co-payments, co-insurance
or out-of-pocket expenses paid or incurred by such employee, including with
respect to his or her dependents, under comparable Employee Benefit Plans of
Seller during the plan year in which the relevant Hire Date occurs.

(f) The second and third sentences of Section 8.2(a) and Section 8.2(e) shall
not apply with respect to any Employee that, as of immediately prior to the
Closing Date, is covered by a Collective Bargaining Agreement (the “Union
Employees”). For the avoidance of doubt, in no event shall Buyer be required to
provide Union Employees the Minimum Terms and Conditions of Employment, and the
provisions of Section 8.2(b) shall apply only to those Union Employees who
accept offers of employment from Buyer.

Section 8.3 Union Employees.

(a) Buyer will not assume, and will not be bound by, the terms and obligations
of the relevant Collective Bargaining Agreement with respect to the Union
Employees as a successor or assign of Seller. However, on the Closing Date,
Buyer agrees to recognize the Union as the representative of the Union Employees
at the Union’s request, to comply with its good-faith bargaining obligations,
and to otherwise comply with its obligations under the National Labor Relations
Act.

(b) Unless otherwise agreed by Buyer and the Union, for a period of no less than
twelve (12) months following the Closing Date, Buyer shall agree to honor all
recall rights held by any current or former employees of the Business under the
Collective Bargaining Agreement between Seller and the Union dated as of
November 7, 2008.

(c) Only if (i) Buyer does not extend an offer (a “UE Offer”) to such Union
Employee (other than union employees whom Seller is in the process of
terminating); (ii) Buyer revokes a UE Offer made to such Union Employee prior to
the Closing; or (iii) a Union

 

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Employee rejects the UE Offer and the UE Offer to such Union Employee provided
(1) wages that are less favorable than the Union Employee’s wages immediately
prior to the Closing and (2) compensation and benefits that are, overall, less
than substantially comparable in the aggregate to the Union Employee’s
compensation and benefits prior to Closing, then Buyer shall be responsible for
all costs and Liabilities with respect to any Union Employee who does not become
a Transferred Employee that arise from conduct of Buyer or any of its Affiliates
or from the termination of employment of such Union Employee by Seller
immediately prior to, on or after the Closing Date or from any tort or
discrimination Claims brought by such Union Employee against Seller.

Section 8.4 Workers’ Compensation Claims. Seller shall be responsible for and
shall, as described herein, pay Losses incurred in connection with those
workers’ compensation claims identified on Schedule 8.4. Schedule 8.4 provides a
list of all workers’ compensation claims of Employees and former Employees filed
with a Governmental Entity which remain open as of the Closing Date, for which
Seller will retain liability (excluding any further liabilities on existing
claims, except as provided below). As of the Closing Date, with the exception of
the claims identified on Schedule 8.4, Buyer will be responsible and liable for
all workers’ compensation claims of Employees and former Employees based on
injuries or illnesses that arise or have arisen out of, and in the course of,
employment with the Business. However, Buyer shall assume any additional
liability for matters on Schedule 8.4 where the condition, injury or illness
subject of such claim recurred or was aggravated after the Closing Date and such
additional liability is incurred as a result of such recurrence or aggravation.
To the extent that any Law prevents Buyer from assuming any workers’
compensation obligation directly, Buyer shall reimburse Seller’s costs with
respect to any such workers’ compensation Losses.

Section 8.5 WARN Act Notification. Seller shall, as soon as practicable
following the Closing, provide Buyer with a schedule setting forth the name and
work location of each employee of the Business who terminated employment within
the six month period prior to the Closing Date. In the event of any “plant
closing” or “mass layoff” with respect to the Business, as defined by the WARN
Act, or any state or local Law equivalent, that shall occur on or after the
Closing Date due to any actions taken by Buyer, Buyer shall comply with all of
the requirements of the WARN Act and any applicable state and local Law
equivalent, and shall assume any and all Liabilities with respect thereto. Buyer
shall indemnify and hold harmless Seller with respect to any Liabilities under
the WARN Act and similar applicable state and local Laws arising from (i) any
actions taken by Buyer with respect to the Transferred Employees on or after the
Closing Date (including any Liabilities caused by “employment losses” due to the
actions of Buyer with respect to the Transferred Employees on or after the
Closing Date that trigger the WARN Act when aggregated with any “employment
losses” with respect to the Business on or prior to the Closing Date) or
(ii) Buyer’s breach of Sections 8.2 or 8.3 and/or claims by any Employee that
Buyer’s Offer pursuant to Sections 8.2 or 8.3 is not sufficiently comparable to
avoid an “employment loss” under the WARN Act and similar applicable state and
local Laws (including any Liabilities caused by “employment losses” due to the
actions of Buyer with respect to the Transferred Employees on or after the
Closing Date that trigger the WARN Act when aggregated with any “employment
losses” with respect to the Business on or prior to the Closing Date).

 

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Section 8.6 Employee Benefits.

(a) COBRA. Buyer shall, effective commencing on the applicable Hire Date, be
responsible for compliance with the requirements of COBRA, including the
provision of continuation coverage, with respect to the Transferred Employees,
and their spouses and dependents, for whom a qualifying event occurs on or after
the Transferred Employees’ respective Hire Dates. If Seller complies with the
notification requirements of COBRA with respect to a Transferred Employee, Buyer
shall be responsible for the provision of COBRA continuation coverage, if any,
to such Transferred Employee, and such Transferred Employee’s spouse and
dependents, arising as a result of his or her transfer of employment from Seller
to Buyer hereunder.

(b) 401(k) Plan. Seller shall fully vest Transferred Employees in their accounts
held under Seller’s Savings and Investment Plan (the “Seller 401(k) Plan”) as of
the Closing Date. Seller shall reasonably cooperate with Buyer to establish
participation by Transferred Employees in Buyer’s tax-qualified defined
contribution plan or plans with a cash deferred feature (the “Buyer 401(k)
Plan”) for the benefit of each Transferred Employee who was eligible to
participate in the Seller 401(k) Plan as soon as practicable after the Closing
Date. As soon as practicable after the Closing Date, Seller shall make
distributions from the Seller 401(k) Plan available to Transferred Employees and
the Buyer 401(k) Plan shall accept such distribution as a rollover contribution
if permitted under the terms of the Buyer 401(k) Plan and if so directed by the
Transferred Employee. Seller shall make any contributions to Seller 401(k) Plan
relating to the Transferred Employees that were due and payable by Seller on or
before the Closing Date including those on behalf of Transferred Employees
without regard to whether such individuals were employed on the last day of the
plan year.

Section 8.7 No Right to Employment. Nothing in this Article VIII restricts the
right of Buyer or any of its Affiliates to terminate the employment of any
Transferred Employee after the Closing. The provisions of this Article VIII are
solely for the benefit of the Parties to this Agreement, and no employee or
former employee or any other individual associated therewith or any employee
benefit plan or trustee thereof shall be regarded for any purpose as a third
party beneficiary of this Agreement, and nothing herein shall be construed as an
amendment to any employee benefit plan for any purpose. To the extent Buyer
complies with its obligations under this Article VIII, nothing in this Article
VIII shall be construed to limit the right of Buyer or any of its Affiliates to
amend or terminate any employee benefit plan.

Section 8.8 Code Section 409A. The Transferred Employees shall not be deemed to
have incurred a “separation from service” for purposes of Code Section 409A as a
result of their transfer of employment from Seller to Buyer hereunder.

 

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ARTICLE IX

CONDITIONS PRECEDENT

Section 9.1 Conditions to Obligations of Buyer. The obligations of Buyer to
effect the Closing and the consummation of the transactions contemplated by this
Agreement are subject to the satisfaction at or prior to the Closing of each of
the following conditions, any or all of which may be waived in writing by Buyer,
in whole or in part, to the extent permitted by applicable Law:

(a) Seller Representations and Warranties. (i) Each of the representations and
warranties of Seller contained in Sections 4.1, 4.2, 4.19 and 4.20 shall be true
and correct in all material respects as of the date hereof and the Closing Date
as though made on and as of such dates (except (x) for representations and
warranties that by their express terms address matters only as of a particular
date, which representations and warranties shall be true and correct in all
material respects as of such date and (y) to the extent that such
representations and warranties are qualified by the term “Material Adverse
Effect,” in which case such representations and warranties shall be true and
correct in all respects); and (ii) each of the representations and warranties of
Seller contained in this Agreement (other than the representations and
warranties contained in Sections 4.1, 4.2, 4.19 and 4.20) shall be true and
correct in all respects as of the date hereof and the Closing Date as though
made on and as of such dates (except for representations and warranties that by
their express terms address matters only as of a particular date, which
representations and warranties shall be true and correct in all respects as of
such date), except where the failure of such representations and warranties
(without giving effect to any of the “Material Adverse Effect” qualifiers
contained therein) to be so true and correct would not, in the aggregate, have
or reasonably be expected to have a Material Adverse Effect.

(b) Agreements and Covenants. Seller shall have performed and complied with, in
all material respects, all agreements and covenants required by this Agreement
to be performed or complied with by Seller on or prior to the Closing Date.

(c) No Material Adverse Effect. Since the date of this Agreement, there shall
not have occurred any Material Adverse Effect or any fact, event, change,
development or effect that, individually or when taken together with all other
facts, events, changes, developments or effects, has had or would reasonably be
expected to have a Material Adverse Effect.

(d) Consents. Seller shall have delivered to Buyer a pay-off letter from the
agent under the Seller Senior Credit Agreement, in customary form and otherwise
reasonably acceptable to Buyer (or such other evidence reasonably acceptable to
Buyer) (such pay-off letter or other evidence being referred to as the “Pay-off
Letter”), providing that the Encumbrances to which the Purchased Assets are
subject under the Seller Senior Credit Agreement, the Loan Documents (as defined
in the Seller Senior Credit Agreement) and the Joinder Agreement by and among
certain lenders, Seller and Lehman Commercial Paper Inc. dated May 6, 2008 will
be released upon payment of a sum certain specified in the Pay-off Letter (the
“Pay-off Amount”) to such agent under the Seller Senior Credit Agreement.

(e) Deliveries. Seller shall have delivered or caused to be delivered to Buyer:

(i) a certificate executed by a duly authorized executive officer of Seller to
the effect that each of the conditions specified in Sections 9.1(a) and 9.1(b)
are satisfied in all respects;

 

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(ii) a counterpart of the bill of sale and assignment and assumption agreement
in the form attached as Exhibit B (the “Bill of Sale, Assignment and Assumption
Agreement”), duly executed by Seller;

(iii) a counterpart of the Intellectual Property assignment(s) in the form(s)
attached hereto as Exhibit C (the “Intellectual Property Assignment”), duly
executed by Seller;

(iv) a counterpart of the Intellectual Property license agreement in the form
attached hereto as Exhibit D (the “Intellectual Property License Agreement”),
duly executed by Seller;

(v) a counterpart of the engineering services agreement in the form attached
hereto as Exhibit E (the “Engineering Services Agreement”), duly executed by
Seller;

(vi) a counterpart of the transition services agreement in the form attached
hereto as Exhibit F (the “Transition Services Agreement”), duly executed by
Seller;

(vii) a counterpart of the Termination and Mutual Release Agreement, duly
executed by the parties thereto other than Buyer and Boeing;

(viii) a counterpart to the supply agreement in the form attached hereto as
Exhibit G (the “SOW Supply Agreement”), duly executed by Seller;

(ix) a counterpart of the bill of sale and assignment and assumption agreement
with respect to the Facilities in the form attached as Exhibit H (the
“Facilities Bill of Sale, Assignment and Assumption Agreement”), duly executed
by Seller;

(x) a counterpart of the North Charleston Sublease Assumption in the form
attached as Exhibit I (the “North Charleston Sublease Assumption”), duly
executed by Seller;

(xi) a counterpart of the GA Sublease Assumption in the form attached as Exhibit
J (the “GA Sublease Assumption”), duly executed by Seller;

(xii) a counterpart of the side letter regarding the SOW Supply Agreement, in
the form attached as Exhibit K (the “SOW Side Letter”), duly executed by Seller;

(xiii) counterparts of Amendments to certain Master Program Contracts (MPC);
Amendment # 6 to MPC FZ-641900-8981N (747 Empennage) and Amendment # 6 to MPC
VR-747010-8984N (747 Fuselage), in the forms attached as Exhibit L (the “747
Amendment”), duly executed by Seller;

(xiv) counterparts of Amendments to certain Master Program Contracts (MPC);
Amendment # 5 to MPC VR-567866-8988N (767 Doors), Amendment # 10 to MPC
FZ-641600-8981N (767 Horizontals), Amendment # 5 to MPC VZ-785548-8981N (767
WCS), and Amendment # 4 to MPC FZ-641800-8981N (48 Section), in the forms
attached as Exhibit M (the “767 Amendment”), duly executed by Seller;

 

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(xv) counterparts of Amendments to certain Master Program Contracts (MPC);
Amendment # 4 to MPC VZ-641700-8981N (777 Flaps) and Amendment # 3 to MPC
VZ-620700-8981N (777 Spoilers), in the forms attached as Exhibit N (the “777
Amendment”), duly executed by Seller;

(xvi) a counterpart of the warranty agreement related to the SOW Supply
Agreement, in the form attached as Exhibit O (the “SOW Warranty Agreement”),
duly executed by Seller;

(xvii) a counterpart of the administrative agreement regarding the SOW Supply
Agreement, in the form attached as Exhibit P (the “SOW Administrative
Agreement”), duly executed by Seller; and

(xviii) an affidavit sworn under penalty of perjury, setting forth Seller’s
United States tax identification number and certifying that Seller is not a
“foreign person” within the meaning of Section 1445 of the Code.

(f) No Order. No Governmental Entity or federal or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Order (whether temporary, preliminary or permanent), in any case which is in
effect and that prevents or prohibits the consummation of the transactions
contemplated hereunder; provided that Buyer shall have used all commercially
reasonable efforts to cause any such Order to be vacated or lifted.

(g) No Legal Proceeding. No Legal Proceeding shall be pending by the DOJ, FTC or
any authority, agency, department, board, commission or instrumentality of any
state of the United States that regulates competition or that has the power to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade which seeks to prevent, prohibit or make
illegal the transactions contemplated by this Agreement.

Section 9.2 Conditions to Obligations of Seller. The obligations of Seller to
effect the Closing and the consummation of the transactions contemplated by this
Agreement are subject to the satisfaction at or prior to the Closing of the
following conditions, any or all of which may be waived in writing by Seller, in
whole or in part, to the extent permitted by applicable Law:

(a) Buyer Representations and Warranties. (i) Each of the representations and
warranties of Buyer contained in Sections 5.1, 5.2 and 5.4 shall be true and
correct in all material respects as of the date hereof and the Closing Date as
though made on and as of such dates (except (x) for representations and
warranties that by their express terms address matters only as of a particular
date, which representations and warranties shall be true and correct in all
material respects as of such date and (y) to the extent that such
representations and warranties are qualified by the term “material adverse
effect,” in which case such representations and warranties shall be true and
correct in all respects) and (ii) each of the representations and warranties of
Buyer contained in this Agreement (other than the representations and warranties
contained in Sections 5.1, 5.2 and 5.4) shall be true and correct in all
respects as of the date hereof and the Closing Date as though made on and as of
such dates (except for representations and warranties that by their express
terms address matters only as of a particular date, which

 

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representations and warranties shall be true and correct in all respects as of
such date), except where the failure of such representations and warranties
(without giving effect to any of the “material adverse effect” qualifiers
contained therein) to be so true and correct would not, in the aggregate, have
or reasonably be expected to have a material adverse effect on Buyer’s ability
to consummate the transactions contemplated hereby in accordance with the terms
hereof and applicable Laws.

(b) Agreements and Covenants. Buyer shall have performed and complied with, in
all material respects, all agreements and covenants required by this Agreement
to be performed or complied with by Buyer on or prior to the Closing Date.

(c) Deliveries. Buyer shall have delivered or caused to be delivered to Seller:

(i) a certificate executed by a duly authorized executive officer of Buyer to
the effect that each of the conditions specified in Sections 9.2(a) and(b) are
satisfied in all respects;

(ii) a duly executed counterpart of the Bill of Sale, Assignment and Assumption
Agreement;

(iii) a duly executed counterpart of the Intellectual Property Assignment;

(iv) a counterpart of the Intellectual Property License Agreement duly executed
by Boeing Management Company;

(v) a counterpart to the Termination and Mutual Release Agreement duly executed
by Boeing;

(vi) a duly executed counterpart of the Engineering Services Agreement;

(vii) a duly executed counterpart of the Transition Services Agreement;

(viii) a counterpart of the SOW Supply Agreement duly executed by Boeing;

(ix) a counterpart of the SOW Side Letter duly executed by Boeing;

(x) a counterpart of the SOW Warranty Agreement duly executed by Boeing;

(xi) a counterpart of the SOW Administrative Agreement duly executed by Boeing;

(xii) a counterpart of the 747 Amendment duly executed by Boeing;

(xiii) a counterpart of the 767 Amendment duly executed by Boeing;

 

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(xiv) a counterpart of the 777 Amendment duly executed by Boeing; and

(xv) a duly executed counterpart of the Facilities Bill of Sale, Assignment and
Assumption Agreement.

(d) No Order. No Governmental Entity or federal or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Order (whether temporary, preliminary or permanent), in any case which is in
effect and that prevents or prohibits the consummation of the transactions
contemplated hereunder; provided that Seller shall have used all commercially
reasonable efforts to cause any such Order to be vacated or lifted.

(e) Waiver Under Seller Senior Credit Facility. Seller shall have received the
Lender Waiver.

(f) No Legal Proceeding. No Legal Proceeding shall be pending by the DOJ, FTC or
any authority, agency, department, board, commission or instrumentality of any
state of the United States that regulates competition or that has the power to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade which seeks to prevent, prohibit or make
illegal the transactions contemplated by this Agreement.

ARTICLE X

TERMINATION

Section 10.1 Termination. This Agreement may be terminated at any time (except
where otherwise indicated in this Section 10.1) prior to the Closing Date:

(a) by mutual written consent of Buyer and Seller;

(b) (i) by Buyer, prior to Closing, by written notice to Seller from Buyer if
(A) there is any material breach of any representation, warranty, covenant or
agreement on the part of Seller set forth in this Agreement, such that the
conditions specified in Section 9.1(a) or Section 9.1(b) would not be satisfied
at the Closing (a “Terminating Seller Breach”), except that, if such Terminating
Seller Breach is an unintentional or inadvertent breach of a representation,
warranty, covenant or agreement and is curable by Seller through the exercise of
its reasonable best efforts, then, for a period of up to ten (10) days after
receipt by Seller of notice from Buyer of such breach, but only as long as
Seller continues to use its reasonable best efforts to cure such Terminating
Seller Breach (the “Seller Cure Period”), such termination shall not be
effective, and such termination shall become effective only if the Terminating
Seller Breach is not cured within the Seller Cure Period, or (B) the
consummation of the transactions contemplated hereby is permanently enjoined,
prohibited or otherwise restrained by the terms of a final, non-appealable Order
of a Governmental Entity; provided that, in the case of the forgoing clause (A),
Buyer is not then in material breach of any of its obligations under this
Agreement;

(ii) by Seller, prior to Closing, by written notice to Buyer from Seller if
(A) there is any material breach of any representation, warranty, covenant or
agreement on the part of Buyer set forth in this Agreement, such that the
conditions specified in Section 9.2(a) or

 

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Section 9.2(b) would not be satisfied at the Closing (a “Terminating Buyer
Breach”), except that, if such Terminating Buyer Breach is an unintentional or
inadvertent breach of a representation, warranty, covenant or agreement and is
curable by Buyer through the exercise of its reasonable best efforts, then, for
a period of up to ten (10) days after receipt by Buyer of notice from Seller of
such breach, but only as long as Buyer continues to use its reasonable best
efforts to cure such Terminating Buyer Breach (the “Buyer Cure Period”), such
termination shall not be effective, and such termination shall become effective
only if the Terminating Buyer Breach is not cured within the Buyer Cure Period,
or (B) the consummation of the transactions contemplated hereby is permanently
enjoined, prohibited or otherwise restrained by the terms of a final,
non-appealable Order of a Governmental Entity; provided that, in the case of the
forgoing clause (A), Seller is not then in material breach of any of its
obligations under this Agreement; or

(c) by either Buyer or Seller, if the Closing shall not have been consummated by
August 31, 2009, upon delivery of written notice signed by Buyer or Seller, as
applicable, to the other Party; provided, however, that the right to terminate
this Agreement under this Section 10.1(c) shall not be available to a Party, in
the event that such Party is in material breach of any covenant or agreement
under or contained in this Agreement.

Section 10.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 10.1, this Agreement shall forthwith become
null and void and there shall be no Liability or obligation on the part of Buyer
or Seller or any of their respective Representatives except (a) nothing herein
shall relieve any Party from Liability for any breach of any representation,
warranty, covenant or agreement in this Agreement prior to the date of
termination; (b) each Party shall be entitled to any and all remedies at law and
in equity for any such breach and (c) this Article X and Article XII of this
Agreement shall remain in full force and effect and survive any termination of
this Agreement; provided, however, that, in the event this Agreement is
terminated pursuant to Section 10.1, the Parties acknowledge that it is the
intention of the Parties that no Party shall have any remedy or right to recover
for any Losses resulting from any breach of any representation or warranty
contained herein unless such breach was intentional or willful on the part of
the breaching Party. In determining Losses recoverable by a Party for the other
Party’s breach, the Parties acknowledge and agree that such Losses shall not be
limited to reimbursement of expenses or out-of-pocket costs and shall include
the benefit of the bargain lost by such Party.

ARTICLE XI

INDEMNIFICATION

Section 11.1 Survival. All of the representations and warranties contained in
this Agreement will survive until the date that is thirteen (13) months after
the Closing Date, except that (a) the representations and warranties contained
in Sections 4.1 (Organization and Qualification), 4.2 (Authority;
Enforceability), the first sentence of Section 4.7, the first sentence of
Section 4.10(b), Sections 4.19 (Certain Transactions), 4.20 (Broker’s Fees), 5.1
(Organization and Qualification), 5.2 (Authority; Enforceability) and 5.4
(Broker’s Fees) will survive the Closing indefinitely, and (b) the
representations and warranties contained in the first two sentences of
Section 4.10(c) will survive the Closing until the date that is twenty-four
(24) months after the Closing Date, and (c) the representations and warranties
contained in Section 4.15

 

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(Tax Matters) will survive the Closing until sixty (60) days following
expiration of the applicable statute of limitations (as may be extended by
agreement with any Governmental Entity); provided, however, that no
representation or warranty set forth in this Agreement will expire or terminate
with respect to any breach or inaccuracy to the extent such inaccuracy or breach
thereof results from or arises out of any fraud by Seller in connection with
this Agreement. All covenants and other agreements contained in this Agreement
will survive the Closing indefinitely unless otherwise provided in accordance
with their respective terms; provided, that the covenants and agreements
contained in Sections 6.1 and 6.2 will survive until a date that is twenty-four
(24) months after the Closing Date. Seller’s indemnification obligation in
Section 11.2(c) will survive until the date that is thirty-six (36) months after
the Closing Date. Notwithstanding anything herein to the contrary, each
representation, warranty, covenant or agreement which is the subject of one or
more Claims for indemnification pursuant to this Article XI asserted in writing
prior to the expiration of the applicable survival period set forth above will
survive with respect to only such Claim or Claims until the final resolution
thereof. No Claim for indemnification for breach of any representation,
warranty, covenant or agreement shall be made after the survival date, if any,
applicable to such representation, warranty, covenant or agreement.

Section 11.2 Indemnification by Seller.

(a) Seller hereby agrees (subject to the terms of this Article XI) to indemnify,
defend and hold harmless Buyer and its successors and permitted assigns, and
each of their respective Affiliates, equityholders, officers, directors,
managers, members, employees and Representatives (each, a “Buyer Indemnified
Person”) for, from and against any and all Losses imposed upon or incurred by
Buyer Indemnified Persons, or any of them, to the extent arising out of or
resulting from any and all of the following (whether or not arising out of any
Third Party Claims): (i) any inaccuracy as of the Closing Date in, or any breach
of, a representation or warranty contained in Article IV of this Agreement;
(ii) any breach by Seller of, or any failure by Seller to perform or comply
with, any covenant or agreement contained in this Agreement; and (iii) any of
the Excluded Liabilities. For purposes of determining the amount of any Loss
incurred in connection with any inaccuracy or a breach of a representation or
warranty under this Section 11.2(a) or whether such inaccuracy or breach has
occurred, in each case (other than with respect to the Qualified
Representations), all references to “materiality” or “Material Adverse Effect”
or other similar terms shall be disregarded.

(b) Notwithstanding the foregoing provisions of this Section 11.2 to the
contrary, (i) except with respect to any Loss that arises out of a breach of
Section 4.1, Section 4.2, the first sentence of Section 4.7, the first sentence
of Section 4.10(b), Section 4.15, Section 4.19 and/or Section 4.20, with respect
to Seller’s obligation to indemnify Buyer Indemnified Persons for Losses
pursuant to Section 11.2(a)(i) (other than with respect to the first two
sentences of Section 4.10(c) which are addressed in Section 11.2(b)(ii) below)
and, solely with respect to clause (C) below, Section 11.2(a)(ii) (as applied
solely to a breach of Section 6.1 and no other covenant or agreement herein):
(A) Seller will not be required to indemnify Buyer Indemnified Persons until
such Losses in the aggregate exceed $10,000,000 and in such case Seller will,
subject to clause (i)(C) of this Section 11.2(b) and Section 11.5, be required
to indemnify Buyer Indemnified Persons for the amount of such Losses in excess
of $10,000,000; (B) no individual Claim (or series of related Claims or
repetitive or multiple Claims from the

 

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same source) by Buyer Indemnified Persons may be asserted unless and until the
aggregate amount of Losses that would be payable pursuant to such Claim (or
series of related Claims or repetitive or multiple Claims from the same source)
exceeds an amount equal to $50,000; and (C) the aggregate amount to be paid by
Seller to Buyer Indemnified Persons will not exceed an amount equal to
$60,000,000 (it being understood that any Losses indemnified pursuant to
Section 11.2(a)(i) (with respect only to the first two sentences of
Section 4.10(c)) or Section 11.2(c) shall also be applied toward such
$60,000,000 after $40,000,000 in Losses have been paid pursuant to
Section 11.2(b)(ii)); and (ii) with respect to Seller’s obligations to indemnify
Buyer Indemnified Persons for Losses pursuant to Section 11.2(a)(i) (with
respect only to the first two sentences of Section 4.10(c)) and Section 11.2(c),
(A) Seller will not be required to indemnify Buyer Indemnified Persons until
such Losses in the aggregate exceed $10,000,000 and in such case Seller will,
subject to clause (ii)(C) of this Section 11.2(b) and Section 11.5, be required
to indemnify Buyer Indemnified Persons for the amount of such Losses in excess
of $10,000,000; (B) no individual Claim (or series of related Claims or
repetitive or multiple Claims from the same source) by Buyer Indemnified Persons
may be asserted unless and until the aggregate amount of Losses that would be
payable pursuant to such Claim (or series of related Claims or repetitive or
multiple Claims from the same source) exceeds an amount equal to $50,000; and
(C) the aggregate amount to be paid by Seller to Buyer Indemnified Persons will
not exceed an amount equal to $100,000,000 (it being understood that any Losses
indemnified pursuant to Section 11.2(a)(i) (other than with respect to the first
two sentences of Section 4.10(c) and Section 11.2(a)(ii) (as applied solely to a
breach of Section 6.1 and no other covenant or agreement herein) shall also be
applied toward such $100,000,000).

(c) Seller hereby agrees (subject to the terms of this Article XI) to indemnify,
defend and hold harmless each Buyer Indemnified Person for, from and against any
and all Losses imposed upon or incurred by Buyer Indemnified Persons, or any of
them, to the extent arising out of or resulting from (whether or not arising out
of any Third Party Claims) any (A) misappropriation of any trade secret of any
Person arising from the conduct of the Business or the conduct of any supplier
of Seller prior to the Closing or (B) infringement or unlawful use of any United
States or foreign Intellectual Property right (including any right in a Patent,
Copyright, industrial design or semiconductor mask work), which, in the case of
any industrial design or patent, was either issued as of the date of this
Agreement or issues after the date of this Agreement from an application that
was pending as of the date of this Agreement (including all foreign counterparts
of each of the foregoing (whether or not such foreign counterpart was filed or
issued as of the date of this Agreement)) or, in the case of any other
Intellectual Property, was in existence on the Closing, in each case:
(i) arising out of the design, manufacture or sale of Products by or for Seller
pursuant to the 787 Supply Agreement prior to the Closing, including to the
extent attributable to Intellectual Property or Products delivered by a supplier
of Seller (or other activities of such supplier) (“Supplied Products”);
(ii) arising out of the use or sale of Supplied Products (including Products
included in the Purchased Assets) by or for a Buyer Indemnified Person or a
customer of a Buyer Indemnified Person or an operator of a Program Aircraft; and
(iii) arising out of the manufacture, use or sale of any Covered Products by or
for a Buyer Indemnified Person or a customer of a Buyer Indemnified Person or an
operator of a Program Aircraft; provided, however, that notwithstanding any
provision hereof to the contrary, Seller’s indemnification obligations under
this Section 11.2(c) shall not extend to any Losses due to misappropriation,
infringement or unlawful use of any Intellectual Property or Intellectual
Property right:

(A)

 

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(1) with respect to Third Party Claims for misappropriation, infringement or
unlawful use (excluding a Claim by a supplier to the Business for
misappropriation, infringement or unlawful use attributable to Intellectual
Property or Products delivered by, or other activities of, such supplier) to the
extent attributable to Intellectual Property of, or Products delivered by, or
other activities of, a supplier to the Business, except to the extent such
misappropriation, infringement or unlawful use arises out of or results from
such supplier’s compliance with any specification, design, design or
specification change or any method or process of design or manufacturing (and
changes thereto) required by Seller, in which case Seller will (to the extent
provided above in this Section 11.2(c) and subject to Section 11.2(b) and the
other provisions of this Article XI) indemnify the Buyer Indemnified Persons for
such misappropriation, infringement or unlawful use, subject to paragraphs
(B)-(G) below; provided that (I) Seller shall (subject to the last two sentences
of this paragraph (1)) have no obligation to indemnify any Buyer Indemnified
Person hereunder to the extent that such Buyer Indemnified Person is entitled to
indemnification for, or is otherwise entitled to recover in respect of, such
misappropriation, infringement or unlawful use pursuant to a Purchased Contract,
as in effect immediately prior to the Closing (without giving effect to any
waiver, amendment, release or modification occurring following Closing), and
(II) to the extent that Seller would otherwise be required to indemnify any
Buyer Indemnified Person for the entire amount of Losses (subject to
Section 11.2(b) and the other provisions of this Article XI) due to such
misappropriation, infringement or unlawful use and is not relieved of such
obligation pursuant to this clause (A)(1) because the specifications, designs,
design or specification changes, methods or processes of design or manufacturing
(and changes thereto) were required by Seller (subject to paragraphs
(B)-(G) below), Seller will (subject to Section 11.2(b) and the other provisions
of this Article XI) indemnify such Buyer Indemnified Person for fifty percent
(50%) of the amount of such Losses attributable to such misappropriation,
infringement or unlawful use in the event that (x) the provisions of the
Purchased Contract providing for indemnification or other right to recovery with
respect to such misappropriation, infringement or unlawful use of Intellectual
Property rights have expired post-Closing under the terms of such Purchased
Contract (as in effect immediately prior to the Closing) or (y) such Purchased
Contract is unilaterally terminated by such supplier or performance of such
indemnification and other provisions giving rise to such recovery are excused
and, as a result, the applicable intellectual property indemnification
provision(s) and the other provisions giving rise to such recovery are
terminated or excused, unless (i) any Buyer Indemnified Person breaches such
Purchased Contract following the Closing and such breach is determined by an
arbitrator or court of competent jurisdiction or by agreement of such Buyer
Indemnified Person and Seller to be a basis for such termination or excused
performance or (ii) no Claim for indemnification is tendered to such supplier
prior to such supplier’s notification to any Buyer Indemnified Person of such
termination or Claim of excused performance and one of the following two
conditions is satisfied: (a) such termination or Claim of excused performance
(1) was induced by any Buyer Indemnified Person through a threatened breach or
termination of the applicable Purchased Contract or (2) occurred following a
proposal by any Buyer Indemnified Person to modify the terms of such Purchased
Contract (including pricing or work scope) in a manner that has a material and
adverse net economic effect on such supplier; or (b) the work scope, pricing or
other material terms have been modified from the terms existing in the
applicable Purchased Contract as of immediately prior to the Closing, in which
case Seller shall have no obligation to

 

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indemnify any Buyer Indemnified Person hereunder. Notwithstanding the foregoing,
in the circumstance in which the Buyer Indemnified Persons are not entitled to
indemnification for misappropriation, infringement or unlawful use of
Intellectual Property rights as a result of the operation of clause (I) of the
proviso of the immediately preceding sentence, if any Buyer Indemnified Person
has used reasonable best efforts (which shall in all events include filing and
pursuing arbitration or litigation to final award or judgment) to collect the
indemnification owed by any such supplier pursuant to such Purchased Contract
and is not able to recover one hundred percent (100%) of the amount of the award
or judgment against such supplier, Seller will (subject to Section 11.2(b) and
the other provisions of this Article XI) indemnify such Buyer Indemnified Person
for fifty percent (50%) of the amount of such shortfall in such recovery by such
Buyer Indemnified Person. In addition, if, in such circumstance, such Buyer
Indemnified Person and such supplier reach a proposed written settlement in an
amount less than one hundred percent (100%) of the indemnification claim and
Seller has consented to such settlement (which consent may be withheld in
Seller’s sole discretion), then Seller will (subject to Section 11.2(b) and the
other provisions of this Article XI) indemnify such Buyer Indemnified Person for
fifty percent (50%) of the amount of such shortfall in such recovery by such
Buyer Indemnified Person;

(2) with respect to a Claim brought by a supplier to the Business for
misappropriation, infringement or unlawful use of Intellectual Property rights
to the extent attributable to Intellectual Property or Products delivered by, or
other activities of, such supplier (a “Supplier Infringement Claim”), except to
the extent such misappropriation, infringement or unlawful use arises out of or
results from Seller’s failure to flow down the 787 Supply Agreement Intellectual
Property provisions to such supplier pursuant to the terms of the 787 Supply
Agreement (or include in the relevant Purchased Contract substantially
comparable Intellectual Property provisions); provided that at the time of such
Supplier Infringement Claim, such supplier remains a supplier to the Business,
with work scope, pricing and other material terms substantially equivalent in
the aggregate to those that are set forth in the applicable Purchased Contract,
as in effect immediately prior to the Closing. Notwithstanding the foregoing,
with respect to any Supplier Infringement Claim for which the Buyer Indemnified
Persons are entitled to indemnification, Seller will (subject to Section 11.2(b)
and the other provisions of this Article XI) indemnify any Buyer Indemnified
Person for fifty percent (50%) of the amount of such Losses attributable to the
misappropriation, infringement or unlawful use giving rise to such Supplier
Infringement Claim to the extent (i) any Buyer Indemnified Person breaches the
applicable Purchased Contract following the Closing and such breach is
determined (either by an arbitrator or court of competent jurisdiction or by
agreement of such Buyer Indemnified Person and Seller) to be a basis for such
Supplier Infringement Claim, (ii) such Supplier Infringement Claim (x) was
induced by any Buyer Indemnified Person through a threatened breach or
termination of the applicable Purchased Contract or (y) occurred following
proposal by any Buyer Indemnified Person to modify the terms of the applicable
Purchased Contract (including pricing or work scope) in a manner that has a
material and adverse net economic effect on such supplier or (iii) the work
scope, pricing or other material terms have been modified from the terms in the
applicable Purchased Contract as of immediately prior to the Closing. For
purposes of this Section 11.2(c), a Buyer Indemnified Person’s failure to cure
an alleged pre-Closing breach by Seller of a Purchased Contract or the failure
to modify Seller’s pre-Closing conduct that resulted in a pre-Closing breach
shall not constitute a breach of such Purchased Contract by such Buyer
Indemnified Person following the Closing. Seller will

 

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(subject to Section 11.2(b) and the other provisions of this Article XI)
indemnify any Buyer Indemnified Person for fifty percent (50%) of the amount of
Losses incurred by such Buyer Indemnified Person attributable to any
misappropriation, infringement or unlawful use giving rise to a Supplier
Infringement Claim to the extent that Seller did flow down the 787 Supply
Agreement Intellectual Property provisions required to be flowed down by the 787
Supply Agreement (or included in the relevant Purchased Contract substantially
comparable Intellectual Property provisions) but a pre-Closing breach of such
Purchased Contract by Seller rendered such provisions unenforceable as
determined by an arbitrator or court of competent jurisdiction or by agreement
of such Buyer Indemnified Person and Seller. To the extent that Seller did flow
down the 787 Supply Agreement Intellectual Property provisions required to be
flowed down by the 787 Supply Agreement (or include in the relevant Purchased
Contract substantially comparable Intellectual Property provisions) and did not
breach such Purchased Contract, Seller will not be required to indemnify any
Buyer Indemnified Person hereunder;

(B) to the extent attributable to any specification (subject to paragraph
(F) below), design, design or specification change or any method or process of
design or manufacturing (and changes thereto) Required by Boeing;

(C) to the extent attributable to Boeing’s collaboration in the specific aspect
of the specification (subject to the proviso in paragraph (F) below), design,
design or specification change or any method or process of design or
manufacturing (or change thereto) that is a direct cause of such
misappropriation, infringement or unlawful use and such misappropriation,
infringement or unlawful use is attributable to such specific aspect that
resulted from such collaboration, in which case Seller will (subject to
Section 11.2(b) and the other provisions of this Article XI) indemnify the Buyer
Indemnified Person for fifty percent (50%) of the amount of such Losses
attributable to such misappropriation, infringement or unlawful use;

(D) to the extent attributable to the use or sale of such Product, Covered
Product or Supplied Product in combination with other items when such
misappropriation, infringement or unlawful use would not have occurred but for
such combination, except where such combination is contemplated by the 787
Supply Agreement or is reasonably contemplated by the Parties given the intended
use of such item;

(E) owned by any Buyer Indemnified Person other than consultants of Boeing or
its Affiliates;

(F) to the extent attributable to a design of Seller, if such misappropriation,
infringement or unlawful use could not be avoided as a result of the
specifications Required by Boeing; provided, however, that (i) to the extent
such misappropriation, infringement or unlawful use could have been avoided
through the use of commercially reasonable efforts by Seller, Seller will
(subject to Section 11.2(b) and the other provisions of this Article XI)
indemnify the Buyer Indemnified Person for such Losses attributable to such
misappropriation, infringement or unlawful use and (ii) to the extent such
misappropriation, infringement or unlawful use could have been avoided through
the use of all efforts by Seller, Seller will (subject to Section 11.2(b) and
the other provisions of this Article XI) indemnify the Buyer Indemnified Person
for fifty percent (50%) of the amount of such Losses attributable to such
misappropriation, infringement or unlawful use; or

 

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(G) to the extent such misappropriation, infringement or unlawful use would not
have occurred if Seller had signed the applicable Contract, as noted as unsigned
on Schedule 2.2(a)(i).

(d) All amounts agreed to by the Parties or determined by a court of competent
jurisdiction to be owing under this Section 11.2 shall be paid promptly by
Seller through wire transfer of immediately available funds to the account
designated in writing by each Buyer Indemnified Person or Buyer Indemnified
Person entitled to such payment.

Section 11.3 Indemnification by Buyer.

(a) Buyer hereby agrees (subject to the terms of this Article XI) to indemnify,
defend and hold harmless Seller and its Affiliates, equityholders, officers,
directors, managers, members, employees and Representatives (collectively, the
“Seller Indemnified Persons” and together with Buyer Indemnified Persons, the
“Indemnified Persons”) for, from and against any and all Losses imposed upon or
incurred by Seller Indemnified Persons, or any of them, to the extent arising
out of or resulting from any and all of the following (whether or not arising
out of any Third Party Claims): (i) any inaccuracy as of the Closing Date in, or
any breach of, any representation or warranty contained in Article V of this
Agreement; (ii) any breach by Buyer of, or any failure by Buyer to perform or
comply with, any covenant or agreement contained in this Agreement; and
(iii) (A) any of the Assumed Liabilities (including as a result of a failure for
them to be satisfied when due) and (B) any Liabilities under the Site
Development and Incentive Agreement as a result of the failure to obtain a
consent to transfer. For the avoidance of doubt, the Parties acknowledge and
agree that (x) the assumption by Buyer of the Assumed Liabilities and any
Liabilities under the Site Development and Incentive Agreement as a result of
the failure to obtain a consent to transfer shall not negate or diminish Buyer’s
(or, if applicable, a Buyer Indemnified Person’s) indemnification rights set
forth in Section 11.2 of this Agreement and (y) Section 11.3(a)(iii)(B) does not
modify Section 2.3(b).

(b) Buyer shall pay all amounts agreed to by the Parties or determined by a
court of competent jurisdiction to be owing under this Section 11.3 by wire
transfer of immediately available funds to the account designated in writing by
each Seller Indemnified Person entitled to such payment.

Section 11.4 Third Party Claims. The obligations and Liabilities of Buyer and
Seller in connection with their respective indemnities pursuant to this
Article XI, resulting from any Claim or other assertion of Liability by a third
party (a “Third Party Claim”), shall be subject to the following terms and
conditions:

(a) The Indemnified Person seeking indemnification under this Article XI must
give the Party from whom indemnification is sought (the “Indemnifying Person”)
notice of any Third Party Claim that is asserted against, imposed upon or
incurred by the Indemnified Person and that may give rise to Liability of the
Indemnifying Person pursuant to this Article XI, stating (to the extent known or
reasonably anticipated) the nature and basis of such Third Party

 

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Claim and the amount thereof; provided that the failure to give such notice
shall not affect the rights of the Indemnified Person hereunder except to the
extent that the Indemnifying Person shall have been actually and materially
prejudiced by reason of such failure.

(b) Subject to Section 11.4(c) below, if the Indemnifying Person’s reasonable
estimated monetary exposure (whether in such Third Party Claim or as a result
thereof) arising out of such Third Party Claim is reasonably expected to exceed
the Indemnified Person’s reasonable estimated monetary exposure (whether in such
Third Party Claim or as a result thereof) arising out of such Third Party Claim
after taking into account all of the claims and causes of action (and underlying
facts and circumstances) upon which such Third Party Claim is premised, and the
indemnification obligations of the Indemnifying Person and limits thereon
hereunder (as determined in good faith at the outset of such claim by mutual
consultation and negotiation between the Indemnifying Person and the Indemnified
Person), then the Indemnifying Person shall have the right to undertake, by
counsel or other Representatives of its own choosing (which shall be reasonably
satisfactory to the Indemnified Person), subject to Section 11.2(b), the defense
of such Third Party Claim at the Indemnifying Person’s sole expense and, subject
to Section 11.4(d), settle or compromise such Third Party Claim.

(c) In the event that (i) the Indemnifying Person shall elect not to undertake
such defense; (ii) the Indemnifying Person shall fail to undertake to defend
such Third Party Claim, or diligently pursue or maintain such defense, within
thirty (30) days after delivery of notice by the Indemnified Person of such
Third Party Claim; (iii) such Third Party Claim seeks non-monetary relief or
involves criminal allegations against a Party; or (iv) the Indemnified Person
reasonably concludes that the Indemnifying Person and Indemnified Person have
conflicting interests with respect to such Third Party Claim (it being
understood that a relationship with a supplier shall not constitute a
conflicting interest), then the Indemnified Person (upon further notice to the
Indemnifying Person) shall have the right to undertake the defense, compromise
and/or settlement of such Third Party Claim, by counsel or other Representatives
of its own choosing; provided, that with respect to a Third Party Claim seeking
non-monetary relief, the Indemnifying Person shall have the right to employ
separate legal counsel and to participate in (but not control) the defense
thereof, but the fees and expenses of such legal counsel shall be at the expense
of the Indemnifying Person; and provided further that the Indemnified Person
shall not compromise or settle such Third Party Claim or consent to the entry of
any Order with respect to such Third Party Claim without the consent of the
Indemnifying Person (which consent shall not be unreasonably withheld,
conditioned or delayed).

(d) Anything in this Section 11.4 to the contrary notwithstanding, the
Indemnifying Person shall not, without the Indemnified Person’s written consent
(which consent shall not be unreasonably withheld, conditioned or delayed),
settle or compromise any Third Party Claim or consent to the entry of any Order
with respect to such Third Party Claim unless (i) the Indemnifying Person agrees
in writing to pay all amounts payable pursuant to such settlement, compromise or
Order as provided in this Agreement, (ii) such settlement, compromise or Order
includes as an unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Person of an irrevocable release from all Liability
in respect of such Third Party Claim in form and substance satisfactory to the
Indemnified Person, (iii) such settlement, compromise or Order would not result
in the finding or admission of any violation of

 

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Law, and (iv) such settlement, comprise or Order does not impose any injunctive
relief or operational restrictions on the Indemnified Person or admit to any
wrongdoing by or on behalf of the Indemnified Person.

(e) The Parties agree that any settlement described in Schedule 11.4(e) shall be
managed as described thereon.

Section 11.5 Limitations on Indemnification Liability.

(a) Losses Net of Insurance Proceeds and Other Third-Party Recoveries.
Notwithstanding any provision in this Agreement to the contrary, all Losses for
which any Indemnified Person would otherwise be entitled to indemnification
under this Article XI shall be reduced by the amount of insurance proceeds,
indemnification payments and other third-party recoveries to which any
Indemnified Person receives in respect of any Losses incurred by such
Indemnified Person, in each case after deducting the out-of-pocket costs and
expenses incurred following Closing in connection with such Loss and obtaining
such proceeds, payments or recoveries, including any incremental insurance
premium costs incurred by such Party; provided that in the case of any such
incremental insurance premium costs, the Indemnified Person shall provide the
Indemnifying Person with a written statement from its insurance carrier
specifically allocating the increase in premium costs directly to the claims for
which indemnification is sought. In the event any Indemnified Person is entitled
to any insurance proceeds, indemnity payments or any third-party recoveries in
respect of any Losses for which such Indemnified Person is entitled to
indemnification pursuant to this Article XI, such Indemnified Person shall use
commercially reasonable efforts to obtain or receive such proceeds, payments or
recoveries; provided that this Section 11.5(a) shall not require any Indemnified
Person to initiate, engage in or threaten litigation with any Person, including
any of its insurance carriers. In the event that any such insurance proceeds,
indemnity payments or other third-party recoveries are received by an
Indemnified Person subsequent to receipt by such Indemnified Person of any
indemnification payment hereunder in respect of the claims to which such
insurance proceeds, indemnity payments or other third-party recoveries relate,
appropriate refunds shall be made promptly by the relevant Indemnified Person of
the relevant portion of such indemnification payment.

(b) Tax Benefits. Notwithstanding any provision in this Agreement to the
contrary, all indemnification payments for Losses under this Article XI shall be
paid by the Indemnifying Person without reduction for any Tax Benefits (as
defined below) available to the Indemnified Person. However, to the extent that
an Indemnified Person recognizes Tax Benefits in respect of any Losses for which
such Indemnified Person is entitled to indemnification under this Article XI,
the Indemnified Person shall pay promptly to the Indemnifying Person an amount
in cash equal to the amount of such Tax Benefits (but not in excess of the
indemnification payment or payments actually received from the Indemnifying
Person with respect to such Losses) as such Tax Benefits are actually recognized
by the Indemnified Person. The Indemnified Person shall provide a statement,
signed by an officer of the Indemnified Person, setting forth in reasonable
detail the calculation of Tax Benefits recognized (even if no such Tax Benefits
are recognized) at the following times: (i) no later than one hundred and twenty
(120) days after the close of each calendar year after an indemnification
payment has been made to such Indemnified Person under this Article XI and
(ii) accompanying each payment of Tax Benefits realized by such Indemnified
Person under this Section 11.5(b). In the event the

 

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Indemnifying Person objects to the calculation of Tax Benefits recognized, it
shall deliver written notice of objection (the “Tax Benefit Objection Notice”)
to the Indemnified Person not more than forty-five (45) days after the
Indemnifying Person’s receipt of the calculation. The Indemnified Person and the
Indemnifying Person shall promptly endeavor in good faith to resolve the issues
related to calculation of Tax Benefits recognized, including through the
provision of information reasonably requested by the other party in order to
review the calculation of Tax Benefits recognized. In the event such parties are
unable to resolve the issues within forty-five (45) days after the issuance of
the Tax Benefit Objection Notice, the resolution of the calculation of Tax
Benefits recognized shall be submitted to a nationally recognized public
accounting firm mutually agreed upon by the Indemnifying Person and the
Indemnified Person (the “Arbitrator”). The Indemnifying Person and the
Indemnified Person shall each use commercially reasonable efforts to cause the
Arbitrator to review the calculation of Tax Benefits recognized and related
documents and records necessary to support such calculation and determine the
Tax Benefits recognized by the Indemnified Person within forty-five (45) days
after the submission of the calculation to the Arbitrator. The decision of the
Arbitrator shall be final and binding upon the parties and shall be
non-appealable. Upon determination of the Tax Benefits recognized by the
Arbitrator, the Indemnified Person shall pay promptly to the Indemnifying Person
the amount of any increase, if any, in the amount of Tax Benefits recognized as
calculated by the Arbitrator over the amount calculated by the Indemnified
Person. The fees of the Arbitrator shall be borne 50% by the Indemnifying Person
and 50% by the Indemnified Person. For this purpose, the Indemnified Person
shall be deemed to recognize a tax benefit (“Tax Benefit”) with respect to a
taxable year if, and to the extent that, the Indemnified Person’s cumulative
liability for Income Taxes through the end of such taxable year, calculated by
excluding any Income Tax items attributable to the Losses from all taxable
years, exceeds the Indemnified Person’s actual cumulative Income Tax liability
through the end of such taxable year, calculated by taking into account any
Income Tax items attributable to the Losses for all taxable years as provided
for by the relevant Income Tax law.

(c) Consequential; Punitive and Other Special Damages. Notwithstanding any
provision in this Agreement to the contrary, no Indemnified Person shall be
entitled to indemnification for consequential, punitive, indirect or special
damages (other than for any such damages that the Indemnified Person is, or has
been, required to pay in respect of any Third Party Claim that is subject to
such claim of indemnification).

Section 11.6 Treatment of Indemnification Payments. All amounts paid pursuant to
this Article XI shall be treated as adjustments to the Aggregate Consideration.

Section 11.7 Exclusive Remedy. Notwithstanding anything contained in this
Agreement to the contrary, except (a) in the case of fraud, (b) for injunctive
or provisional relief and (c) as contemplated by Section 3.4, after the Closing,
indemnification pursuant to the provisions of this Article XI shall be the sole
and exclusive remedy for the Parties for monetary damages for any inaccuracy or
breach of any representation, warranty, covenant or other provision contained in
this Agreement or in any certificate delivered pursuant hereto.

 

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ARTICLE XII

GENERAL PROVISIONS

Section 12.1 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered if delivered personally, mailed by registered
or certified mail (postage prepaid, return receipt requested) or sent by
overnight courier (providing proof of delivery) to the Parties at the following
addresses or as of the date transmitted if sent by electronic transmission to
the following facsimile numbers or electronic mail addresses (or at such other
address, electronic mail address or facsimile number for a Party as shall be
specified by like notice):

 

If to Seller:

   

Vought Aircraft Industries, Inc.

9314 W. Jefferson Street

Dallas, TX 75211

Attention: General Counsel, Kevin McGlinchey

Facsimile: (972) 946-5642

With a copy (which shall not constitute notice) to:

 

Latham & Watkins LLP 555

Eleventh Street, NW

Suite 1000

Washington, DC 20004

Attention: Daniel T. Lennon

                 Paul F. Sheridan, Jr.

Facsimile: (202) 637-2201

If to Buyer:

 

BCACSC, Inc.

c/o The Boeing Company

100 N. Riverside Drive

Chicago, IL 60606

Attention: Vice President, Corporate and Strategic Development

Facsimile: (312) 777-2885

 

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BCACSC, Inc.

c/o The Boeing Company

100 N. Riverside Drive

Chicago, IL 60606

Attention: Executive Vice President and General Counsel

Facsimile: (312) 544-2121

 

BCACSC, Inc.

c/o The Boeing Company

P.O. Box 3707 MC 09-20

Seattle, WA 98124-2207

Attention: Vice President, Supply Chain Strategy, Commercial Airplanes

Facsimile: (425) 717-7800

With a copy (which shall not constitute notice) to:

 

Kirkland & Ellis LLP

300 North LaSalle Street

Chicago, IL 60654

Facsimile: (312) 862-2200

Attention: Stephen Fraidin

                 R. Scott Falk, P.C.

Section 12.2 Severability; Specific Enforcement. If any provision of this
Agreement or the application of any provision hereof to any circumstances is
held invalid, unenforceable, or otherwise illegal, the remainder of the
Agreement and the application of such provision to other circumstances shall not
be affected, and the provisions so held to be invalid, unenforceable, or
otherwise illegal shall be reformed to the extent (and only to the extent)
necessary to make it enforceable, valid and legal. Upon any such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the Parties shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the Parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible. Each Party acknowledges and agrees that the
other Party may be damaged irreparably in the event that any of the provisions
of this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each Party agrees that (A) the other Party
may be entitled, in addition to other rights or remedies existing in its favor,
to injunctive or other relief to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof, in each case without the requirement of posting a bond or
proving actual damages (which requirements the other Party shall waive) and
(B) each Party hereby agrees that such Party shall not, in connection with any
action brought to specifically enforce a Party’s rights or obligations under
this Agreement, assert, plead or argue that such remedy is unavailable, or
otherwise oppose the imposition of such a remedy, on the grounds that money
damages are an adequate remedy for the alleged breach of this Agreement.

Section 12.3 Amendments. No amendment, supplement or modification of this
Agreement shall be effective unless in writing signed by all of the Parties.

 

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Section 12.4 Assignment; Beneficiaries. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned or delegated by any
of the Parties (whether by merger, operation of Law or otherwise) without the
prior written consent of the other Parties and any purported assignment in
violation of this Section 12.4 shall be void; provided that (i) Seller may
collaterally assign its rights under this Agreement as security for Indebtedness
and related obligations of Seller under the Seller Senior Credit Agreement or
otherwise and (ii) either Party may, without the prior written consent of the
other Parties, assign and delegate any of their rights (including Buyer’s right
to acquire the Purchased Intellectual Property) hereunder to any Affiliate;
provided that no such assignment shall relieve Seller or Buyer of any of their
respective obligations or Liabilities hereunder. Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns, and
nothing in this Agreement, express or implied, other than the rights of Buyer
Indemnified Persons and Seller Indemnified Persons pursuant to Article XI, is
intended to or shall confer upon any other Person any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement. Notwithstanding
the foregoing, nothing in this Agreement, express or implied, is intended to
confer upon any Transferred Employees any right, benefit or remedy of any nature
whatsoever under or by reason of Article VIII hereof.

Section 12.5 Counterparts; Facsimiles. This Agreement may be executed and
delivered in one or more counterparts, and by the different Parties in separate
counterparts, each of which when executed and delivered shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement. Exchange and delivery of this Agreement by exchange of facsimile
copies or other electronic copies bearing the signature of a Party shall
constitute a valid and binding execution and delivery of this Agreement by such
Party. Such facsimile or other electronic copies shall constitute legally
enforceable original documents.

Section 12.6 Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.

Section 12.7 Governing Law; Forum Selection. This Agreement and all disputes
arising out of or relating hereto shall be governed by and construed in
accordance with the Laws of the State of Delaware applicable to contracts made
and performed entirely with the State of Delaware, without giving effect to any
Laws or principles of conflicts of laws that would cause the Laws of any other
jurisdiction to apply. Each Party hereby (a) submits to the exclusive
jurisdiction of any state or federal court sitting in the State of Delaware (the
“Chosen Courts”) in any Legal Proceeding arising out of or relating to this
Agreement, (b) agrees that all Claims in respect of such Legal Proceeding may be
heard and determined only in any such Chosen Court, (c) hereby waives any Claim
of inconvenient forum or other challenge to venue in such Chosen Court, and
(d) agrees not to bring any Legal Proceeding arising out of or relating to this
Agreement before any Governmental Entity other than the Chosen Courts.

Section 12.8 WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES, TO THE MAXIMUM
EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY PROCEEDING IN ANY COURT
WITH RESPECT TO, IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, OR THE
VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF, WHETHER
PURPORTING TO BE AT LAW OR IN EQUITY, AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE.

 

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Section 12.9 Entire Agreement. This Agreement and the other Transaction
Documents constitute the final, exclusive and entire agreement of the Parties,
and all prior and contemporaneous agreements and undertakings, both written and
oral, among the Parties, or any of them, with respect to the subject matter
hereof (including the LOI) are expressly merged into and superseded by this
Agreement and the other Transaction Documents. There are no conditions precedent
to the effectiveness of this Agreement other than those expressly stated in this
Agreement.

Section 12.10 Waivers. Any failure by any Party to comply with any obligation,
covenant, agreement or condition herein may be waived by the Party entitled to
the benefits thereof only by a written instrument signed by the Party granting
such waiver, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure to comply.

Section 12.11 NO ADDITIONAL REPRESENTATION OR WARRANTIES. EXCEPT AS PROVIDED IN
ARTICLE IV, NEITHER SELLER, NOR ANY OF ITS AFFILIATES, NOR ANY OF THEIR
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, STOCKHOLDERS, PARTNERS, MEMBERS OR
REPRESENTATIVES HAS MADE, OR IS MAKING, ANY REPRESENTATION OR WARRANTY
WHATSOEVER TO BUYER WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT AND NO SUCH PARTY SHALL BE LIABLE IN RESPECT OF THE ACCURACY OR
COMPLETENESS OF ANY INFORMATION PROVIDED TO BUYER WITH RESPECT TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. WITHOUT LIMITING THE FOREGOING,
BUYER ACKNOWLEDGES THAT BUYER, TOGETHER WITH ITS ADVISORS, HAS MADE ITS OWN
INVESTIGATION OF THE BUSINESS, THE PURCHASED ASSETS AND THE ASSUMED LIABILITIES
AND IS NOT RELYING ON ANY IMPLIED WARRANTIES OR UPON ANY REPRESENTATION OR
WARRANTY WHATSOEVER AS TO THE PROSPECTS (FINANCIAL OR OTHERWISE) OR THE
VIABILITY OR LIKELIHOOD OF SUCCESS OF THE BUSINESS AS CONDUCTED AFTER THE
CLOSING. FOR THE PURPOSES HEREIN, ANY INFORMATION PROVIDED TO, OR MADE AVAILABLE
TO, BUYER BY SELLER SHALL INCLUDE ANY AND ALL INFORMATION THAT MAY BE CONTAINED
OR POSTED IN ANY ELECTRONIC DATA ROOM ESTABLISHED BY SELLER OR ITS
REPRESENTATIVES IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

Section 12.12 Disclosure Schedules. Unless the context otherwise requires, all
capitalized terms used in the Disclosure Schedule shall have the respective
meanings assigned in this Agreement. No reference to or disclosure of any item
or other matter in the Disclosure Schedule shall be construed as an admission or
indication that such item or other matter is material or outside the ordinary
course of business or that such item or other matter is required to be referred
to or disclosed in the Disclosure Schedule. No disclosure in the Disclosure
Schedule relating to any possible breach or violation of any agreement, Law or
regulation shall be

 

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construed as an admission or indication that any such breach or violation exists
or has actually occurred. No exceptions to any representations or warranties
disclosed in one particular Schedule shall constitute an exception to any other
representations or warranties made in this Agreement unless the exception is
disclosed as provided herein on each such other applicable Schedule or
cross-referenced in such other applicable Schedule or unless the applicability
of such exception to another Schedule is apparent on its face.

Section 12.13 No Recourse. Except as set forth in the Boeing Guaranty, this
Agreement may only be enforced against, and any claim or cause of action based
upon, arising out of, or related to this Agreement may only be brought against
the entities that are expressly named as Parties and then only with respect to
the specific obligations set forth herein with respect to such Party. Except as
set forth in the Boeing Guaranty, except to the extent a named Party to this
Agreement (and then only to the extent of the specific obligations undertaken by
such named Party in this Agreement and not otherwise), no past, present or
future director, officer, employee, incorporator, member, partner, stockholder,
Affiliate, agent, attorney or their respective Affiliates shall have any
Liability (whether in contract or tort) for any one or more of the
representations, warranties, covenants, agreements or other obligations or
Liabilities of any one or more of Seller or Buyer under this Agreement (whether
for indemnification or otherwise) of or for any claim based on, in respect of,
or by reason of, the transactions contemplated by this Agreement and the
Transaction Documents. Nothing in this Section 12.13 shall in any way limit the
obligations of Boeing or the rights of Seller under the Boeing Guaranty.

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IN WITNESS WHEREOF, the undersigned have executed and delivered, or have caused
this Agreement to be duly executed and delivered, as of the date first set forth
herein.

 

SELLER VOUGHT AIRCRAFT INDUSTRIES, INC. By:   /S/ K.B. HOWE Name:   K.B. Howe
Title:   BUYER BCACSC, INC. By:   /S/ BRYAN GERARD Name:   Bryan Gerard Title: