Asset Purchase Agreement (2003)Full Document 

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                            ASSET PURCHASE AGREEMENT

                                   dated as of

                                  July 31, 2003

                                  by and among

                         LOCKHEED MARTIN SERVICES, INC.

                                       AND

                       AFFILIATED COMPUTER SERVICES, INC.

ASSET PURCHASE AGREEMENT                                       EXECUTION VERSION



                                    Schedules

SCHEDULE 1.1EA             Certain Excluded Assets
SCHEDULE 1.1EL             Certain Excluded Liabilities
SCHEDULE 1.1PSC            Professional Service Contracts
SCHEDULE 2.2(c)            Closing Date Statement Procedures
SCHEDULE 3.1(c)(1)         Financial Statements
SCHEDULE 3.1(c)(2)         Certain Changes
SCHEDULE 3.1(d)(1)         Tax Returns
SCHEDULE 3.1(e)(1)         Material Contracts
SCHEDULE 3.1(e)(2)         Compliance with Material Contracts and Consents
SCHEDULE 3.1(f)(1)         Real and Personal Property; Title to Property
SCHEDULE 3.1(f)(2)         Leases
SCHEDULE 3.1(g)(1)         Business IP
SCHEDULE 3.1(g)(2)         Ownership of Business IP
SCHEDULE 3.1(g)(3)         Transfer of Intellectual Property
SCHEDULE 3.1(g)(4)         Intellectual Property Infringement
SCHEDULE 3.1(g)(6)         Intellectual Property Indemnification
SCHEDULE 3.1(g)(7)         Seller and Affiliate Intellectual Property
SCHEDULE 3.1(h)            Authorization; No Conflicts
SCHEDULE 3.1(i)            Legal Proceedings
SCHEDULE 3.1(j)            Labor Matters
SCHEDULE 3.1(n)(1)         Benefit Plans and Other Employee Programs, Agreements
                           or Arrangements
SCHEDULE 3.1(n)(2)         Certain Transactions
SCHEDULE 3.1(n)(3)         Compliance
SCHEDULE 3.1(n)(5)         Severance
SCHEDULE 3.1(n)(7)         Retiree Medical Benefit Commitments
SCHEDULE 3.1(q)            Operation in the Ordinary Course
SCHEDULE 3.1(r)            Environmental Compliance
SCHEDULE 3.1(s)            Affiliate Transactions
SCHEDULE 3.1(t)            Accounts Receivable Exceptions
SCHEDULE 3.1(bb)           Export and Import Licenses and Technical Assistance
                           Agreements
SCHEDULE 4.2               Conduct of Business
SCHEDULE 4.3(f)            Partial Assignments or Alternative Arrangements
SCHEDULE 5.6(a)            Intellectual Property
SCHEDULE 5.8               Administration Pending Transfer of Certain Contracts
SCHEDULE 5.12              GM Contract-Related Equipment
SCHEDULE 6.1               Transferred Employees Engaged in GM Contracts
SCHEDULE 6.1(e)            Affiliate Employees
SCHEDULE 6.1(f)            Independent Contractor Agreements
SCHEDULE 6.2(a)(1)         Seller Savings Plan
SCHEDULE 7.1(b)            Approvals
SCHEDULE 7.1(c)            Certain Consents
SCHEDULE 10.13             Knowledge Convention

ASSET PURCHASE AGREEMENT                                       EXECUTION VERSION



                                    Exhibits

EXHIBIT A           Form of Assignment and Assumption Agreement
EXHIBIT B           Form of Limited Noncompetition Agreement
EXHIBIT C           Forms of Transition Services Agreements
     EXHIBIT C1     Form for General Transition Services
     EXHIBIT C2     Form for Benefits Services To Be Provided by Seller to Buyer
EXHIBIT D           Substance of Opinion of Counsel to Seller
EXHIBIT E           Substance of Opinion of Counsel to Buyer

ASSET PURCHASE AGREEMENT                  2                    EXECUTION VERSION



                                TABLE OF CONTENTS



                                                                                                         PAGE
                                                                                                         ----
                                                                                                      
ARTICLE I         DEFINITIONS..........................................................................    1

         1.1      Definitions..........................................................................    1

ARTICLE II        PURCHASE AND SALE/CLOSING............................................................   15

         2.1      Purchase and Sale....................................................................   15

         2.2      Purchase Price and Adjustments.......................................................   15

         2.3      The Closing..........................................................................   17

         2.4      Allocation of Purchase Price.........................................................   17

ARTICLE III       REPRESENTATIONS AND WARRANTIES.......................................................   18

         3.1      Representations and Warranties of Seller.............................................   18

         3.2      Representations and Warranties of Buyer..............................................   29

ARTICLE IV        COVENANTS WITH RESPECT TO THE PERIOD PRIOR TO CLOSING................................   31

         4.1      Access...............................................................................   31

         4.2      Conduct of Business..................................................................   31

         4.3      Reasonable Efforts; No Inconsistent Action...........................................   34

         4.4      [Reserved.]..........................................................................   35

         4.5      Control of the Business..............................................................   35

         4.6      Accuracy of Information..............................................................   36

         4.7      Related Agreements...................................................................   36

         4.8      Post-Effective Date, Pre-Closing Date Cash Activity..................................   37

ARTICLE V         CONTINUING COVENANTS.................................................................   37

         5.1      Cooperation..........................................................................   37

         5.2      Nondisclosure of Proprietary Data....................................................   38

         5.3      Legal Privileges.....................................................................   38

         5.4      Tax Matters..........................................................................   38

         5.5      Use of Certain Seller Trademarks.....................................................   40

         5.6      Intellectual Property; Internet Sites................................................   41

         5.7      Leases...............................................................................   42

         5.8      Administration Pending Transfer of Certain Contracts.................................   42

         5.9      Insurance Matters....................................................................   43

         5.10     Supplemental Disclosure..............................................................   44

         5.11     Treatment of Certain Accounts Receivable.............................................   44

         5.12     Receipt of Amounts in Respect of Transferred and Excluded Assets; Excluded GM
                  Contract Assets; Leased Equipment Included in the GM Contract Assets.................   46

ARTICLE VI        EMPLOYEES AND EMPLOYEE MATTERS.......................................................   46


ASSET PURCHASE AGREEMENT                                       EXECUTION VERSION





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                                                                                                         ----
                                                                                                      
         6.1      Employment of Transferred Employees..................................................   46

         6.2      Transferred Employee Benefit Matters.................................................   48

         6.3      Vacation Benefits....................................................................   50

         6.4      Employee Rights......................................................................   51

         6.5      WARN Act Requirements................................................................   51

         6.6      Special Provisions For Certain Employees.............................................   51

ARTICLE VII       CONDITIONS OF PURCHASE...............................................................   52

         7.1      General Conditions...................................................................   52

         7.2      Conditions to Obligations of Buyer...................................................   52

         7.3      Conditions to Obligations of Seller..................................................   54

ARTICLE VIII      TERMINATION OF OBLIGATIONS...........................................................   54

         8.1      Termination of Agreement.............................................................   54

         8.2      Effect of Termination................................................................   55

ARTICLE IX        INDEMNIFICATION; SURVIVAL............................................................   55

         9.1      Obligations of Seller................................................................   55

         9.2      Obligations of Buyer.................................................................   57

         9.3      Procedure............................................................................   57

         9.4      Survival.............................................................................   59

         9.5      Limitations on Indemnification.......................................................   59

         9.6      Treatment of Payments................................................................   60

         9.7      Remedies Exclusive...................................................................   60

         9.8      Mitigation...........................................................................   61

ARTICLE X         GENERAL..............................................................................   61

         10.1     Usage................................................................................   61

         10.2     Amendments; Waivers..................................................................   61

         10.3     Schedules; Exhibits..................................................................   62

         10.4     Further Assurances...................................................................   62

         10.5     Governing Law........................................................................   62

         10.6     Headings.............................................................................   62

         10.7     Counterparts.........................................................................   62

         10.8     Parties in Interest..................................................................   63

         10.9     Performance by Subsidiaries..........................................................   63

         10.10    Waiver...............................................................................   63

         10.11    Severability.........................................................................   63

         10.12    Damages Determination................................................................   63


ASSET PURCHASE AGREEMENT                   ii                  EXECUTION VERSION





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                                                                                                         ----
                                                                                                      
         10.13    Knowledge Convention.................................................................   63

         10.14    Notices..............................................................................   64

         10.15    Publicity and Reports................................................................   65

         10.16    Integration..........................................................................   65

         10.17    Expenses.............................................................................   65

         10.18    No Assignment........................................................................   66

         10.19    Representation By Counsel; Interpretation............................................   66

         10.20    Reference of Disputes to Senior Officers of Buyer and LM.............................   66

         10.21    Resolution of Disputes...............................................................   66

         10.22    No Third Party Beneficiaries.........................................................   67


ASSET PURCHASE AGREEMENT                   iii                 EXECUTION VERSION



                            ASSET PURCHASE AGREEMENT

                  This Asset Purchase Agreement is entered into as of July 31,
2003 by and between Lock heed Martin Services, Inc., a Delaware corporation
("Seller"), and Affiliated Computer Services, Inc., a Delaware corporation
("Buyer "; and, together with Seller, the "Parties").

                                 R E C I T A L S

                  WHEREAS, Seller and certain of its Affiliates own and operate
the Business (as defined below) and provide services pursuant to the GM
Contracts (as defined below);

                  WHEREAS, Buyer wishes to purchase the Business and the GM
Contract Assets from Seller, and Seller wishes to sell the Business and the GM
Contract Assets to Buyer; and

                  WHEREAS, concurrently with the execution of this Agreement,
Buyer and certain Affiliates of Buyer and Seller are executing that certain
Stock Purchase Agreement (as such agreement may be amended from time to time,
the "Stock Purchase Agreement") pursuant to which an Affiliate of Seller intends
to purchase a business from Buyer through the acquisition of all of the issued
and outstanding stock of several subsidiaries of Buyer from a Subsidiary of
Buyer.

                                A G R E E M E N T

                  In consideration of the mutual promises contained herein and
intending to be legally bound, the Parties agree as follows:

                                   ARTICLE I
                                   DEFINITIONS

                  1.1      DEFINITIONS.

                  For all purposes of this Agreement and the Exhibits and
Schedules delivered pursuant to this Agreement, and except as otherwise
expressly provided, the following definitions shall apply:

                  "Action" means any action, complaint, petition, investigation,
suit or other proceeding, whether civil, criminal or regulatory, in law or in
equity, or before any arbitrator or Governmental Entity.

                  "Active Employees" has the meaning set forth in Section 6.1.

                  "Affiliate" means, with respect to a specified Person, a
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the specified
Person.

                  "Affiliate Employees" has the meaning set forth in Section
6.1(e).

                  "Affiliated Transferors" means any Affiliate of Seller which
owns any of the Transferred Assets or is a party to any Contract included in the

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