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EXHIBIT 10.1
Conformed to Document of 03/14/98
SHARE PURCHASE AGREEMENT
BETWEEN
VIAD CORP,
a Delaware corporation
("Viad")
and
VIAD SERVICE COMPANIES LIMITED,
a United Kingdom limited liability company
("Viad Services")
as "Sellers"
AND
RANGER AEROSPACE CORPORATION,
a Delaware corporation
as "Buyer"
Dated as of March 14, 1998
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TABLE OF CONTENTS
Page
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1. PURPOSES..................................................................................1
1.1 Business.........................................................................1
1.2 Share Capital Ownership..........................................................1
1.3 Agreement to Purchase and Sell...................................................1
2. DEFINITIONS...............................................................................2
2.1 Certain Defined Terms............................................................2
2.2 Accounting Terms.................................................................2
3. PURCHASE AND SALE OF COMPANIES' SHARES....................................................2
3.1 Purchase And Sale................................................................2
3.2 Purchase Price...................................................................2
3.3 Intercompany Account.............................................................3
3.4 Sharp Transfers..................................................................3
3.5 Closing..........................................................................3
4. PURCHASE PRICE ADJUSTMENT.................................................................4
4.1 Adjustment.......................................................................4
4.2 Adjustment Procedures............................................................4
(a) Net Assets Report.......................................................4
(b) Objections..............................................................5
(c) Failure to Agree........................................................6
4.3 Settlement.......................................................................6
5. REPRESENTATIONS AND WARRANTIES CONCERNING SELLERS.........................................7
5.1 Corporate Organization...........................................................7
(a) Organization of Viad....................................................7
(b) Organization of Viad Services...........................................7
5.2 Authority........................................................................8
5.3 No Violation.....................................................................8
5.4 Consents and Approvals of Governmental Authorities...............................9
6. REPRESENTATIONS AND WARRANTIES CONCERNING THE ASIG
ENTITIES..................................................................................9
6.1 Corporate Organization, Etc......................................................9
6.2 Capitalization..................................................................10
6.3 No Violation....................................................................11
6.4 Equity and Other Interests......................................................11
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6.5 Financial Statements............................................................11
6.6 Taxes...........................................................................12
(a) Filing of Returns......................................................12
(b) Examination of Returns.................................................13
(c) Consents...............................................................13
(d) Agreements/Waivers.....................................................13
(e) Tax Sharing Agreements.................................................13
(f) Audits.................................................................14
(g) Elections..............................................................14
6.7 Assets of ASIG Entities.........................................................14
(a) Title..................................................................14
(b) Adequacy of Assets.....................................................14
6.8 Real Property...................................................................15
(a) Owned Real Property....................................................15
(b) Leased Real Property...................................................16
(c) Real Property Used in the Business.....................................17
(d) Improvements...........................................................17
(e) Lawful Use.............................................................17
(f) Condemnation; Other Actions............................................17
6.9 Intellectual Property...........................................................18
(a) List of Rights.........................................................18
(b) Title and Effect.......................................................18
(d) Year 2000..............................................................20
6.10 Contracts.......................................................................20
(a) List of Contracts......................................................20
(b) Binding Contracts......................................................24
(c) Consents...............................................................25
6.11 Litigation......................................................................25
6.12 Employee and Related Matters; ERISA.............................................25
(a) Benefits Plans.........................................................25
(b) Copies of Plans........................................................26
(c) Plan Liability.........................................................26
(d) Claims, Etc............................................................26
(e) Contributions..........................................................27
(f) Group Health Plans.....................................................27
(g) Insurance Funding......................................................28
(h) Severance Liabilities..................................................28
(i) Additional Benefits....................................................28
(j) Qualification..........................................................29
(k) PBGC Liability.........................................................29
6.13 Multiemployer Plans.............................................................29
(a) Withdrawal Liability...................................................29
(b) Insolvency.............................................................29
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6.14 Absence of Changes or Events....................................................30
(a) No Changes.............................................................30
(b) Increases in Payments/Expenses.........................................30
(c) Modification of Plan...................................................31
(d) Shares in Business.....................................................31
(e) Transfer of Assets.....................................................31
(f) Acquisitions...........................................................32
(g) Articles and Bylaws....................................................32
(h) Failure to Operate in Ordinary Course..................................32
(i) Change in Policies.....................................................32
(j) Change in Accounting...................................................33
(k) Maintenance of Books...................................................33
(l) Certain Modifications..................................................33
(m) Capital Expenditures...................................................33
(n) Obligations............................................................34
(o) Encumbrancers..........................................................34
(p) Receivables............................................................34
(q) Debt...................................................................34
(r) Property Damage/Loss...................................................34
(s) Distributions..........................................................34
(t) Settlements............................................................35
(u) Labor Matters..........................................................35
(v) Lapse of Intellectual Property Rights..................................35
(w) Sale/Leasebacks........................................................35
(x) Payments to Sellers....................................................35
(y) General................................................................36
6.15 Compliance with Applicable Laws.................................................36
(a) General Compliance.....................................................36
(b) Environmental..........................................................36
6.16 Employee and Labor Relations....................................................38
(a) Collective Bargaining Representative...................................38
(b) Labor Disputes.........................................................38
(c) Representative Questions...............................................38
(d) Unfair Labor Practices.................................................38
(e) Grievances.............................................................39
(f) Employment Matters.....................................................39
(g) Collective Bargaining Obligations......................................39
6.17 Absence of Undisclosed Liabilities..............................................39
6.18 Brokers and Finders.............................................................40
6.19 Insurance.......................................................................40
6.20 Banking Facilities..............................................................40
6.21 Books of Accounts, Records......................................................40
6.22 Accounts Receivable.............................................................41
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6.23 Affiliated Transactions.........................................................41
6.24 Licenses and Permits............................................................41
6.25 Customers.......................................................................42
6.26 Disclosure......................................................................42
7. REPRESENTATIONS AND WARRANTIES OF BUYER..................................................42
7.1 Corporate Organization and Qualification........................................42
7.2 Authority.......................................................................43
7.3 No Violation....................................................................43
(a) No Conflicts...........................................................43
(b) No Defaults............................................................43
7.4 Brokers and Finders.............................................................44
7.5 Investment......................................................................44
7.6 Consents and Approvals..........................................................44
8. ADDITIONAL COVENANTS AND AGREEMENTS ACKNOWLEDGMENTS......................................45
8.1 Conduct of Business of the ASIG Entities........................................45
(a) Ordinary Course of Business............................................45
(b) Preservation of Business...............................................45
8.2 Reasonable Efforts..............................................................46
8.3 Access to Information...........................................................46
8.4 Publicity.......................................................................46
8.5 Taxes...........................................................................47
(a) Mutual Assistance......................................................47
(b) Allocation of Tax Liability............................................48
(c) Tax Audit Adjustments..................................................49
(d) Tax Returns............................................................50
(e) Section 338(h)(10) Election............................................51
8.6 Insurance.......................................................................51
8.7 Resignations....................................................................52
8.8 Third-Party Consents............................................................52
8.9 Post-Closing Pension Plan Service Funding.......................................53
(a) V-RIP Pension Plan.....................................................53
(b) Buyer Cooperation......................................................54
(c) Savings Plans..........................................................54
(d) ESOP...................................................................54
(e) DSI Pension Plan.......................................................55
(f) Retiree Welfare Benefits...............................................55
(g) Transfer of Assets.....................................................55
8.10 Noncompete Agreement............................................................56
8.11 Certain Property Transfers......................................................56
8.12 Confidential Information; Solicitation of Personnel.............................56
(a) Seller's Obligation....................................................56
(b) Buyer's Obligation.....................................................56
8.13 Obligations under Financial Accomodations.......................................57
8.14 Liabilities under Certain Plans.................................................57
8.15 Budgeted Capital Expenditure....................................................57
8.16 Disclosure Obligations..........................................................58
8.17 Covenant Regarding Receivables and Cash Accounts................................58
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8.18 Other Documents/Actions.........................................................59
8.19 Medical Benefits................................................................59
8.20 Worker's Compensation Cooperation...............................................59
8.21 Net Asset Value Adjustment Related to Medical Claims and Worker's
Compensation Claims.............................................................60
8.22 Burbank Condemnation Proceeding.................................................60
8.23 Certain Tax Obligations.........................................................60
8.24 Retained Assets and Retained Liabilities........................................61
8.25 Estoppel Letter.................................................................61
8.26 Non-Disturbance Agreement.......................................................61
9. CONDITIONS...............................................................................61
9.1 Conditions to Each Party's Obligations..........................................61
(a) Governmental and Regulatory Consents...................................62
(b) Litigation.............................................................62
9.2 Conditions to Obligations of Buyer..............................................62
(a) Representations and Warranties: Performance of Agreement...............62
(b) Third-Party Consents...................................................63
(c) Noncompete Agreement...................................................63
(d) Opinion................................................................63
(e) Due Diligence..........................................................63
(f) Financing..............................................................63
(g) .......................................................................64
(h) Deliveries Completed...................................................64
9.3 Conditions to Obligations of Sellers............................................64
(a) Representations and Warranties; Performance of Agreement...............64
(b) Noncompete Agreement...................................................65
(c) Deliveries.............................................................65
(d) Board..................................................................65
10. CLOSING DELIVERIES.......................................................................65
10.1 Deliveries by Sellers...........................................................65
(a) Corporate Resolutions..................................................65
(b) Share Certificates.....................................................65
(c) Officer's Certificate..................................................65
(d) Articles and Bylaws....................................................66
(e) Corporate Records......................................................66
(f) Good Standing..........................................................66
(g) Legal Opinion..........................................................66
(h) Noncompete Agreement...................................................66
(i) Certificate of Incumbency..............................................66
(j) Estoppel Certificates..................................................67
(k) Original Contracts.....................................................67
(l) Non-Disturbance Agreements.............................................67
(m) Resignations of Officers and Directors.................................67
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(n) Release................................................................67
(o) Other Documents........................................................67
10.2 Deliveries by Buyer.............................................................67
(a) Corporate Resolution...................................................68
(b) Purchase Price.........................................................68
(c) Officer's Certificate..................................................68
(d) Noncompetition.........................................................68
(e) Certificate of Incumbency..............................................68
(f) Other Documents........................................................68
11. TERMINATION..............................................................................68
11.1 Termination by Mutual Consent...................................................68
11.2 Termination by Buyer or Sellers.................................................68
11.3 Termination by Buyer............................................................69
11.4 Termination by Sellers..........................................................69
11.5 Effect of Termination and Abandonment...........................................69
12. INDEMNIFICATION..........................................................................70
12.1 Survival........................................................................70
12.2 Indemnification by the Sellers..................................................70
(a) General Indemnity......................................................70
(b) Specific Indemnities...................................................71
(c) Limitations............................................................73
12.3 Indemnification by Buyer........................................................75
12.4 Termination of Indemnification..................................................76
12.5 Procedures Relating to Indemnification..........................................76
(a) Notice.................................................................76
(b) Participation..........................................................77
(c) Exceptions.............................................................78
(d) Acceptance or Dispute..................................................79
12.6 Payment of Indemnity Payments...................................................79
12.7 Fraud...........................................................................80
12.8 Special Procedures Relating to Environmental Issues and Liabilities.............80
(a) Management.............................................................80
(b) Consulting.............................................................81
(c) Good Faith.............................................................81
(d) Completion Standard....................................................81
13. MISCELLANEOUS AND GENERAL................................................................82
13.1 Payment of Expenses.............................................................82
(a) General................................................................82
(b) Audit And Environmental................................................82
13.2 Modification or Amendment.......................................................82
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13.3 Waiver of Conditions............................................................82
13.4 Counterparts....................................................................83
13.5 Governing Law...................................................................83
13.6 Notices.........................................................................83
13.7 Entire Agreement; Assignment....................................................84
13.8 Parties in Interest; Successors and Assigns.....................................85
13.9 Obligation of Sellers...........................................................85
13.10 Remedies for Breach.............................................................85
13.11 Captions........................................................................86
13.12 Further Assurances..............................................................86
13.13 Dispute Resolution..............................................................87
13.14 Schedules and Exhibits..........................................................87
13.15 Severability....................................................................87
13.16 Binding Effect..................................................................87
13.17 Exclusivity.....................................................................88
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SCHEDULES
Schedule 1.1 Companies and ASIG Entities
Schedule 1.2 Share Capital Ownership, Etc.
Schedule 2.1 Defined Terms
Schedule 3.2 Pro Forma Balance Sheet
Schedule 5.3 No Violation -- Sellers
Schedule 5.4 Consents and Approvals of Governmental
Authorities -- Sellers
Schedule 6.2 Shareholder Agreements, Etc./Governmental
Consents/Permits
Schedule 6.3 No Violation -- ASIG Entities
Schedule 6.4 Equity Interests
Schedule 6.5 Financial Statements
Schedule 6.6 Taxes
Schedule 6.7 Encumbrances
Schedule 6.8 Condemnations; Other Actions
Schedule 6.8(a) Owned Real Property
Schedule 6.8(b) Leased Real Property
Schedule 6.8(d) Improvements
Schedule 6.9 Intellectual Property
Schedule 6.10 Contracts
Schedule 6.11 Litigation
Schedule 6.12 Employee and Related Matters; ERISA
Schedule 6.13 Multi-Employer Plans
Schedule 6.14 Changes or Events Since the Date of the
Balance Sheet
Schedule 6.15 Compliance with Applicable Laws
Schedule 6.15(b) Known Environmental Liabilities
Schedule 6.16 Employee and Labor Relations
Schedule 6.17 Liabilities
Schedule 6.18 Brokers and Finders -- Sellers
Schedule 6.19 Insurance
Schedule 6.20 Banking Facilities
Schedule 6.23 Affiliated Transactions
Schedule 6.24 Licenses/Permits, Etc.
Schedule 6.25 List of Customers of ASIG Entities
Schedule 6.26 Buyer's Disclosure
Schedule 7.4 Brokers and Finders -- Buyer
Schedule 7.5 Accredited Investor Status
Schedule 7.6 Consents and Approvals.
Schedule 8.7 Resignations
Schedule 8.10 Noncompete Agreement
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Schedule 8.11 Trademarks and Trademark Assignment
Schedule 8.13 Obligations under Financial Accommodations
Schedule 8.14 Participants in SERP, MIP and PUP
Schedule 8.15 Budgeted Capital Expenditures
Schedule 8.20 Worker's Compensation/Return-to-Work Program
Schedule 8.24 Retained Assets and Retained Liabilities
Schedule 8.25 Estoppel Certificate
Schedule 9.2(d) Opinions of Sellers' Counsel
Schedule 9.2(f) Financing Commitment Letters
Schedule 13.1 Expenses
Schedule 13.13 Dispute Resolution
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Conformed to Document of 3/14/98
SHARE PURCHASE AGREEMENT
This SHARE PURCHASE AGREEMENT ("Agreement"), dated as of March 14,
1998, between Viad Corp, a Delaware corporation, and Viad Service Companies
Limited, a limited liability company of the United Kingdom ("Sellers"), and
Ranger Aerospace Corporation, a Delaware corporation ("Buyer").
RECITALS
1. PURPOSES.
1.1 Business. Buyer intends to acquire from Sellers the Business, all
of which is conducted by those entities comprising Sellers' Aircraft Service
International Group ("ASIG Entities") listed on Schedule 1.1 hereto, by purchase
from Sellers of all the shares of capital or equity in those entities identified
as "Companies" on Schedule 1.1.
1.2 Share Capital Ownership. Sellers own all of the authorized, issued
and outstanding shares of capital or equity of Companies, all of which are shown
on Schedule 1.2 hereto, and intend to sell them to Buyer. The Companies own
shares of capital or equity in the Subsidiaries as shown on Schedule 1.2.
1.3 Agreement to Purchase and Sell. In consideration of the mutual
representations, warranties, covenants and agreements, and subject to all of the
terms and conditions specified herein, Buyer and Sellers hereby agree as set
forth herein.
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2. DEFINITIONS.
2.1 Certain Defined Terms. Defined terms used in this Agreement shall
have the meanings set forth or described on Schedule 2.1 hereto (such meanings
to be equally applicable to both the singular and plural forms of such terms).
2.2 Accounting Terms. All accounting terms not specifically defined in
this Agreement shall be construed in accordance with generally accepted
accounting principles in the United States, or the equivalent accounting
principles in the jurisdiction of incorporation, or the jurisdiction governing
the conduct of a portion of the Business conducted by each of the foreign ASIG
Entities, as applicable, in each case consistently applied ("GAAP") .
3. PURCHASE AND SALE OF COMPANIES' SHARES.
3.1 Purchase And Sale. At the Closing and subject to the conditions set
forth in Section 9 herein, Sellers will sell and Buyer will purchase all of the
issued and outstanding shares of capital stock or other equity interests in the
Companies ("Companies' Shares"). All of the Companies' Shares are shown on
Schedule 1.2 hereto.
3.2 Purchase Price. The price for the Companies' Shares to be paid to
Sellers by Buyer hereunder ("Purchase Price"), as adjusted pursuant to the terms
of Section 4 hereof, shall be a cash amount of US $95,000,000 at Closing by wire
transfer to an account specified by Viad, such payment to be based on the
following assumptions: (a) the Net Asset Value of the ASIG Entities, as of the
Closing shall not be less than the amount reflected on Schedule 3.2(a) before
taking into account the calculations described in Section 8.21 hereof; (b) the
Net Working Capital of the ASIG Entities as of the Closing shall not be less
than the amount reflected on Schedule 3.2(b); (c) cash on hand as of the Closing
shall not be less than the amount of cash to be
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left in the Business in accordance with Sections 8.15 and 8.17 (it being
understood that such amount represents the sum of all cash related to customer
deposits, consortia cash, a normalized level of xxxxx cash at all 37 of the
Company's locations and the Remaining Required Capital Expenditure Amount); and
(d) the Retained Assets and Retained Liabilities and the Intercompany Account
shall be removed from the calculation of Net Assets and Net Working Capital
reflected in the Amounts set forth in (a) and (b) of this paragraph and as shown
on the Pro Forma Balance Sheet of the ASIG Entities attached hereto as Schedule
3.2.
3.3 Intercompany Account. All indebtedness of any of the ASIG Entities
to Sellers and Sellers to the ASIG Entities as of the Closing Date
("Intercompany Account") shall have been contributed to the capital of the
debtor entity prior to the Closing Date so that the ASIG Entities will have no
liabilities or obligations with respect to Intercompany Accounts from and after
the Closing Date.
3.4 Share Transfers. Sellers shall deliver to Buyer certificates or
other documentation representing the Companies' Shares, free and clear of all
Encumbrances, duly endorsed in blank or accompanied by transfer powers duly
endorsed in blank in proper form for transfer of all of Sellers' interests in
the Companies' Shares.
3.5 Closing. If the closing conditions are satisfied, the closing of
the transactions ("Transactions") contemplated by this Agreement ("Closing")
shall take place at 10:00 a.m. on March 31, 1998, or if later, 2 business days
after the conditions set forth in Section 9 hereof are satisfied ("Closing
Date") at the offices of Viad Corp, 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx,
unless the parties hereto agree upon a different time, date or place.
Notwithstanding any other provisions hereof, if the Closing has not occurred by
the close of business on May 4, 1998,
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either party shall be entitled to terminate this Agreement pursuant to the
provisions of Sections 11.3 (Termination by Buyer) and 11.4 (Termination by
Sellers) hereof so long as such terminating party is not in material breach of
its obligations hereunder.
4. PURCHASE PRICE ADJUSTMENT.
4.1 Adjustment. The Purchase Price shall be adjusted by subtracting
therefrom any shortfall in the Net Asset Value or Net Working Capital as of the
Closing Date (as reflected on the Net Asset Report and Net Working Capital
Report, respectively, finally calculated in accordance with Section 4.2 below)
from the minimum Net Assets balance or Net Working Capital balance set forth in
Sections 3.2(a) and (b) hereof.
4.2 Adjustment Procedures.
(a) Net Assets Report. Not later than 90 days following the
Closing Date, Buyer shall deliver to Sellers a draft combined balance
sheet of the ASIG Entities ("Closing Balance Sheet") and a Schedule
setting forth Buyer's determination of the Net Asset Value ("Net Assets
Report") and of the Net Working Capital ("Net Working Capital Report")
as of the Closing Date, and at such time also shall provide Sellers,
their accountants and independent auditors, upon receipt of reasonable
advance notice, reasonable access to employees, accountants,
workpapers, the books and records of all of the Companies during normal
business hours for the purpose of reviewing (all to be at Sellers'
expense) the draft Closing Balance Sheet, Net Assets Report and Net
Working Capital Report. Such access by Sellers shall not disrupt the
conduct of the Business by the ASIG Entities. No later than 30 days
following receipt of the draft Closing Balance Sheet, Net Assets
Report, and Net Working Capital Report, Sellers shall advise Buyer that
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Sellers either (i) agree with the draft Closing Balance Sheet, Net
Assets Report, or Net Working Capital Report, or (ii) have proposed
modifications to the draft Closing Balance Sheet, Net Assets Report or
Net Working Capital Report, but only if and to the extent that any of
such modifications are based on the Net Assets Report or Net Working
Capital Report not being in compliance with GAAP consistently applied
with the methods and procedures used in the calculation of Net Assets
and Net Working Capital set forth in Section 3.2 and giving effect to
the transactions contemplated hereby. If Sellers agree with the draft
Closing Balance Sheet, Net Assets Report or the Net Working Capital
Report, such report shall be deemed to be final for purposes of this
Agreement. If Sellers have proposed modifications to any of the draft
Closing Balance Sheet, Net Assets Report, or Net Working Capital
Report, Sellers, for a period of 15 days following delivery of such
proposed modifications, shall provide to Buyer, its accountants and
independent auditors, upon reasonable notice, access to the employees,
accountants, books, records, and related work papers of Sellers at
Buyer's expense.
(b) Objections. If, by the close of business on the last day
of such 15-day period, Buyer has notified Sellers that it has no
objections to the proposed modifications to any of the draft Closing
Balance Sheet, Net Assets Report, or Net Working Capital Report, or if
it has notified Sellers it has objections and Sellers agree with the
objections, then such draft Closing Balance Sheet, Net Assets Report or
Net Working Capital Report shall be deemed to be the Closing Balance
Sheet, Net Assets Report and Net Working Capital Report for the
purposes of this Agreement.
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(c) Failure to Agree. If, by the end of such 15-day period,
the parties are unable to agree on the determination of the draft
Closing Balance Sheet, Net Assets Report or Net Working Capital Report,
then an independent accounting firm of certified public accountants,
mutually acceptable to the parties hereto, shall review the disputed
matters and, as soon as practicable, deliver to Sellers and Buyer a
statement setting forth its determination as to the proper treatment
under this Agreement of the matters as to which there was disagreement.
Such determination shall be final and binding upon the parties hereto
without any further right of appeal. All charges of such independent
accounting firm incurred in making such determination shall be borne
50% by Buyer and 50% by Sellers. At the option of Buyer, in place of
the above-outlined procedure, the final determination may be made using
the dispute resolution procedures provided for in Section 13.13 hereof.
4.3 Settlement. Upon final determination of the Net Asset Value and Net
Working Capital, Sellers, in the event and to the extent of any shortfall from
the minimum amounts thereof or the cash required to be in the Company's
possession at Closing required pursuant to Section 3.2 hereof, promptly shall
pay in cash to Buyer the amount calculated pursuant to Section 4.1 hereof. Any
amount so paid in cash to Buyer by Sellers pursuant to this Section 4.3 as a
result of a Net Working Capital shortfall shall also be treated to increase the
Net Asset Value and the amount of cash in the Business to the extent of such
amount paid by Sellers.
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5. REPRESENTATIONS AND WARRANTIES CONCERNING SELLERS. As an
inducement to Buyer to enter into this Agreement, Sellers hereby jointly and
severally make the following representations and warranties to Buyer as of the
date hereof and as of the Closing Date:
5.1 Corporate Organization.
(a) Organization of Viad. Viad Corp is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, has full corporate power and authority to carry on
its business as it is now being conducted and as heretofore conducted
and to own the properties and assets it now owns, is duly qualified or
licensed to do business as a foreign corporation, is in good standing
in each state of the U.S. and foreign jurisdictions in which its
ownership of property or the conduct of its business requires such
qualification, other than jurisdictions in which the failure to so
qualify would not have a material adverse effect on the business,
operations, assets, properties, rights, prospects, or condition
(financial or otherwise) (a "Material Adverse Effect") of Viad Corp,
and has full corporate power to enter into this Agreement and to carry
out the Transactions.
(b) Organization of Viad Services. Viad Service Companies
Limited is a limited liability company duly organized, validly existing
and in good standing under the laws of England, has full corporate
power and authority to carry on its business as it now is being and as
heretofore conducted and to own the properties and assets it now owns,
is duly qualified or licensed to do business and is in good standing in
each jurisdiction in which ownership of property or the conduct of its
business requires such qualification,
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other than jurisdictions in which the failure to so qualify would not
have a Material Adverse Effect on Viad Service Companies Limited, and
has full corporate power to enter into this Agreement and to carry out
the Transactions.
5.2 Authority. Except as provided in Section 5.4 hereof, Sellers have
taken all actions required by law, their respective Articles, Bylaws or
otherwise, to authorize the execution and delivery of this Agreement, the
performance of its obligations hereunder and the consummation of the
Transactions, and no other action, consent, authorization, approval or corporate
proceedings on the part of Sellers or their respective shareholders, Boards or
any other Person are necessary to authorize the execution, delivery and
performance by Sellers of this Agreement subject to Board approval of Viad which
will have been obtained on or before March 24, 1998. This Agreement has been
duly executed and delivered by Sellers. This Agreement is a valid and binding
agreement enforceable against Sellers in accordance with its terms, subject to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general principles of equity
and equitable relief.
5.3 No Violation. Neither the execution and delivery of this Agreement
nor the consummation of the Transactions will violate any provisions of the
respective Articles or Bylaws of Sellers. Except as disclosed on Schedules 5.3
and 5.4 hereto, neither the execution and delivery of this Agreement nor the
consummation of the Transactions will violate, or be in conflict with, or allow
the termination of, or constitute a default under, or cause the acceleration of
the maturity of any material debt or obligation pursuant to, any material
agreement or commitment to which Sellers are a party or by which Sellers or any
of the assets of the Business are bound, or
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violate any Laws or any Orders of any Governmental Authority, to which Sellers
are subject or result in the creation of any Encumbrance on the Companies'
Shares.
5.4 Consents and Approvals of Governmental Authorities. Except as
disclosed on Schedule 5.4 hereto, and for the requirements of the HSR Act and
the Exon-Xxxxxx Amendment, if applicable, no consent, approval or authorization
of, or declaration, filing or registration with, any Governmental Authority is
required to be made or obtained by Sellers for the validity of the execution and
delivery or for the performance by Sellers of this Agreement or the consummation
of the Transactions.
6. REPRESENTATIONS AND WARRANTIES CONCERNING THE ASIG ENTITIES.
As an inducement to Buyer to enter into this Agreement, Sellers hereby
jointly and severally make the following representations and warranties to Buyer
as of the date hereof and as of the Closing Date:
6.1 Corporate Organization, Etc. The ASIG Entities all are duly
organized, validly existing and in good standing under the laws of the
jurisdiction of their incorporation or organization as set forth on Schedule 1.1
hereto without limitation on the period of their existence. Each ASIG Entity has
full corporate power and authority to carry on its respective business as now
being conducted and heretofore conducted and to own the properties and assets it
now owns, and is duly qualified or licensed to do business as a foreign
corporation and is in good standing in each state and territory of the United
States and foreign jurisdiction in which its ownership of property or the
conduct of its business requires such qualification, other than jurisdictions in
which the failure to so qualify would not have a Material Adverse Effect on such
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ASIG Entity. A list of such jurisdictions in which each ASIG Entity is so
qualified is shown on Schedule 1.1.
6.2 Capitalization. The authorized, issued and outstanding capital of
the ASIG Entities as of the date hereof is shown on Schedule 1.2 hereto. All
outstanding Companies' Shares are owned by the Sellers hereto free and clear of
any Encumbrances. There are not any outstanding stock appreciation rights
("SARs") or any outstanding or authorized options, warrants, calls, rights,
commitments or any other agreements of any character which any of the ASIG
Entities is a party to, or may be bound by, or any securities law, requiring the
ASIG Entities to issue, transfer, sell, purchase, redeem or acquire, or register
any shares of capital or any securities or rights convertible into, exchangeable
for, or evidencing the right to subscribe for, any shares of capital of the ASIG
Entities. Except as disclosed on Schedule 6.2 hereof, there are not, as of the
date hereof, nor will there be at the Closing Date, any shareholder agreement,
rights of first refusal or first offer, voting trust restrictions or limitations
on transfer or other agreements or understandings to which any of the ASIG
Entities or Sellers is a party or to which any of them is bound relating
directly or indirectly to any Companies' Shares or the Subsidiary Shares,
excepting those restrictions and limitations under the Securities Act. Except as
disclosed on Schedule 6.2, with respect to the ASIG Entities that are organized
under a foreign law, no consent of or notice to any Governmental Entity or any
other third party is required with respect to the sale and transfer of
Companies' Shares to Buyer.
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6.3 No Violation. Except as set forth on Schedule 6.3 hereto, neither
the execution, delivery and performance of this Agreement nor the consummation
by Sellers of the Transactions, will (a) conflict with, or result in any
violation of, the Articles or Bylaws of the ASIG Entities; (b) violate, result
in the breach of, or constitute a default (with or without notice or lapse of
time, or both) under, or result in the modification, limitation or revocation
of, or result in the loss, suspension, impairment or forfeiture of any right,
privilege or benefit under, or require any payment under, or give rise to a
right of termination, cancellation or acceleration of any obligation under, any
provision of (i) any note, bond, debt instrument, mortgage, indenture, deed of
trust, item of intellectual property, Permit, license, lease, lien, contract,
commitment, agreement or other instrument or arrangement to which any of the
ASIG Entities are a party or by which any of their respective properties, assets
or businesses are bound or (ii) any Law or Order applicable to any of the ASIG
Entities or by which they are bound or by which any of their respective
properties or assets or businesses is bound or affected; or (c) result in the
creation of any Encumbrances upon any of the properties or assets of the ASIG
Entities or on the Companies' Shares.
6.4 Equity and Other Interests. Except for interests disclosed on
Schedule 6.4 hereto, none of the ASIG Entities owns, directly or indirectly, any
capital stock of or other debt or equity interests in any corporation, joint
venture, partnership or other entity.
6.5 Financial Statements. Schedule 6.5 hereto contains the consolidated
balance sheet of the ASIG Entities as of December 31, 1994, 1995, 1996, and
1997, and the related statements of income and cash flows for the periods
indicated in each case, together with the notes thereto, if any, and the
consolidated balance sheet of the ASIG Entities as of December 31, 1997 ("Most
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Recent Balance Sheet") and the related statements of income and cash flows for
the period then ended, all of the foregoing collectively herein referred to as
the "Financial Statements". Except as set forth on Schedule 6.5, the Financial
Statements have been prepared, and the Financial Statement items, including,
without limitation, reserves and inventories, are consistent with the Companies'
books and records which are correct and complete in all material respects and
have been presented in accordance with GAAP as applied on a basis consistent
with past practices and fairly present in all material respects the financial
condition and results of operations of the ASIG Entities as of the respective
dates thereof and for the respective periods covered thereby.
6.6 Taxes.
(a) Filing of Returns.
(i) Each of the ASIG Entities has filed or caused to
be filed in a timely manner (within any applicable extension
periods) with the appropriate Governmental Authority all
Returns required to be filed by the Code or by applicable
state, local or foreign Laws or Orders relating to Taxes and
Returns in effect from time to time through the Closing Date
and all such Returns were complete and accurate in all
material respects;
(ii) All Taxes shown to be due on such Returns have
been, or will be timely paid in full by the due date thereof;
and
(iii) Except as disclosed on Schedule 6.6 hereto, no
Tax liens have been filed by any Governmental Authority
against any property or assets of the ASIG Entities, and no
claims are being asserted with respect to any Taxes.
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(b) Examination of Returns. To Sellers' Knowledge, the U,.S.
federal, state, local or foreign Returns (whether filed on a separate
or consolidated basis) in which the ASIG Entities have filed or have
joined in filing have been examined by the IRS or the equivalent state,
local or foreign Governmental Authority (if applicable) for all the
taxable years through the years ended as shown on Schedule 6.6. All
deficiencies resulting from such examinations have either been paid or
adequately provided for in the Financial Statements.
(c) Consents. Except as set forth on Schedule 6.6, (i) there
has not been made with respect to the ASIG Entities or any property
held by the ASIG Entities, any consent under Section 341 of the Code
(or any corresponding provision of state, local or foreign tax Law),
(ii) no property of the ASIG Entities or any of their respective
subsidiaries is "tax exempt use property" within the meaning of Section
168(h) of the Code, and (iii) the ASIG Entities are not parties to any
lease made pursuant to former Section 168(f)(8) of the Code.
(d) Agreements/Waivers. Except as set forth on Schedule 6.6,
there are no outstanding agreements or waivers extending the statutory
period of limitation applicable to any Returns required to be filed
with respect to the ASIG Entities.
(e) Tax Sharing Agreements. Except as set forth on Schedule
6.6, none of the ASIG Entities is party to any Tax sharing agreement or
any other agreement with respect to Taxes nor does any ASIG Entity have
a contractual obligation to indemnify any other person with respect to
Taxes which will survive the Closing Date. Any and all such agreements
between any ASIG Entity and either Seller or its respective affiliates
shall be
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terminated as of the Closing without any further or remaining
liabilities or obligations to the ASIG Entities.
(f) Audits. Other than as set forth on Schedule 6.6, there are
no ongoing audits or notification of audits of any Returns or reports
of any Tax filed by or any business activity engaged in by the ASIG
Entities.
(g) Elections. Schedule 6.6 sets forth all elections made by
the ASIG Entities in the past 3 tax years (1995, 1996, 1997) that
remain in effect for the ASIG Entities with respect to Returns and
Taxes.
6.7 Assets of ASIG Entities.
(a) Title. Each of the ASIG Entities has good title to or a
valid leasehold interest in all assets used in the conduct of its
business, whether or not reflected on the Most Recent Balance Sheet or
acquired after the date thereof, except for Receivables collected or
inventory sold or otherwise disposed of after the date thereof, in the
ordinary course of business consistent with past practices in
character and amount, in each case free and clear of all Encumbrances,
other than Encumbrances (i) set forth on Schedule 6.7 hereto, and (ii)
which are Permitted Liens as defined in Schedule 2.1.
(b) Adequacy of Assets. The assets of the ASIG Entities,
including but not limited to assets reflected in the Most Recent
Balance Sheet, but excluding any of the assets included in Retained
Assets, (i) constitute all of the assets necessary to conduct the
Business as presently conducted, (ii) constitute all of the assets
currently owned, held, leased, licensed or otherwise available to the
ASIG Entities and which directly or indirectly are or may be used in,
or otherwise relate to, the Business as presently
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conducted. Except as disclosed on Schedule 6.7, none of the Sellers
nor its affiliates (other than the ASIG Entities) own or lease any
assets used in the operation of the Business as historically or
presently conducted. Except as set forth in Schedule 6.7, as of the
Closing, the ASIG Entities shall own and hold all properties, assets
(whether tangible or intangible), operations, rights, privileges and
permits useful, held for use or used since January 1, 1997, in the
operation of the Business or located on the premises of the Business
as of January 1, 1998 (other than inventory, damaged, destroyed or
obsolete assets or assets not useful to the Business that are sold or
disposed of in the ordinary course of business). All Permits and
Concessions have been issued and are in full force and effect as of
the date hereof. Seller has made available to Buyer for examination
true, correct and complete copies of all written Permits and
Concessions to Buyer. Within the 12-month period ending on the Closing
Date, Seller has not received any notice from any Governmental
Authority threatening a suspension, revocation, modification or
cancellation of any Permit or Concessions, and to Seller's Knowledge,
there is no basis for the issuance of any such notice or the taking of
any such action.
6.8 Real Property.
(a) Owned Real Property. Schedule 6.8(a) sets forth the
address and a true, correct and complete legal description of each
Owned Real Property. With respect to each parcel of Owned Real
Property: (i) the respective ASIG Entity has good and marketable fee
simple title to such parcel, which will be free and clear of all liens
and encumbrances as of the Closing, except Permitted Lines; (ii) there
are no written (or to Sellers' Knowledge oral) leases, subleases,
licenses, concessions or other agreements
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granting to any person the right to use or occupy such parcel or any
portion thereof; and (iii) other than the right of Buyer pursuant to
this Agreement, there are no outstanding options, rights of first offer
or rights of first refusal to purchase such parcel or any portion
thereof or interest therein. None of the ASIG Entities hold any option
to purchase any real property or interest therein.
(b) Leased Real Property. Schedule 6.8(b) sets forth the
address and a list of all of the Leases. Sellers have delivered to
Buyer a true, correct and complete copy of each written Lease, and in
the case of any oral Lease, a written summary of the basic terms
thereof. With respect to each of the Leases: (i) the Lease is legal,
valid, binding, enforceable and in full force and effect; (ii) the
Lease will continue to be legal, valid, binding, enforceable and in
full force and effect on identical terms following the Closing; (iii)
neither the respective ASIG Entity nor any other party to the Lease is
in breach or default under the Lease, and no event has occurred or
circumstance exists which, with the delivery of notice, passage of time
or both, would constitute such a breach or default or permit the
termination, modification or acceleration of rent under the Lease; (iv)
no party to the Lease has repudiated any provision thereof, and there
are no disputes, oral agreements or forbearance programs in effect as
to the Lease; (v) except as set forth on Schedule 6.8(b), the
respective ASIG Entity has not assigned, subleased, mortgaged, deeded
in trust or otherwise transferred or encumbered the Lease or any
interest therein; and (vi) except as set forth in Schedule 6.8(b), no
consent is required from the landlord or any other third party for the
sale and purchase of the Companies' Shares contemplated under this
Agreement.
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(c) Real Property Used in the Business. The Owned Real
Property, Leased Real Property and Leasehold Improvements constitute
all of the real property used by the ASIG Entities in the operation of
the Business.
(d) Improvements. To Sellers' Knowledge and except as
disclosed on Schedule 6.8(d), all buildings, structures, fixtures and
other improvements and all components thereof included within the Owned
Real Property and Leased Real Property and all Leasehold Improvements
(collectively, the "Improvements") are in good condition and repair and
sufficient for the continued operation of the Business.
(e) Lawful Use. To Sellers' Knowledge, the Real Property and
the use and operation of the Improvements located on the Real Property
as presently conducted by any of the ASIG Entities is not in violation
of any applicable building Law or code, zoning Law or other Law or
Orders thereunder or any easement, covenant, condition, restriction or
similar provision in any instrument of record affecting any of the Real
Property.
(f) Condemnation; Other Actions. Except as disclosed in
Schedule 6.8 hereto, none of the ASIG Entities has received notice of
any proposed condemnation, special assessment, or any proposed material
change in property tax or land use laws affecting all or any portion of
the Real Property. There is no writ, injunction, decree, order or
judgment outstanding, nor any Actions pending or, to Sellers'
Knowledge, threatened, relating to the ownership, lease, use, occupancy
or operation of any Real Property or any portion thereof.
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6.9 Intellectual Property.
(a) List of Rights. Schedule 6.9 hereto discloses all of the
Intellectual Property Rights owned or used by the ASIG Entities, which
are (i) the subject of any license agreement or arrangement, Trademark,
Patent or Copyright registrations or grants, or the subject of pending
applications for Trademark, Patent or Copyright registrations or
grants; (ii) an identification of the Intellectual Property Rights
ownership or right of use of which is claimed by the ASIG Entities,
noting the owner, licensor and licensee; (iii) all agreements ("Rights
Agreements") which are neither listed on Schedule 6.10 nor specifically
identified thereon as Intellectual Property Contracts which include any
assignment of, license or other right to, or any consent or undertaking
with respect to, or which affects such Intellectual Property Rights;
and (iv) all agreements which include any assignment of, license or
other right to, or any consent or undertaking with respect to, or which
affects any patents, trademarks, trade secrets, copyrights or other
intellectual property rights of others.
(b) Title and Effect. Except as disclosed in Schedule 6.9
hereto: (i) all such listed Rights Agreements are in effect, and each
of the ASIG Entities owns or has the right to use the Intellectual
Property Rights identified as owned or licensed in Schedule 6.9
(indicating thereon the owner or licensor thereof); (ii) each of the
ASIG Entities is using the Intellectual Property Rights that are
claimed by each of the ASIG Entities under color of title or license,
whether by written agreement or otherwise; (iii) each of the ASIG
Entities has the right to transfer or assign all material Intellectual
Property Rights that are licensed, without the consent of any other
party, and no Person has any rights or has been
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granted any license under the licensed Intellectual Property Rights;
(iv) all of the Intellectual Property Rights and all grants or
registrations thereof are in full force and effect and all
registrations and grants of such Intellectual Property Rights which are
subject to and have become due for renewal or maintenance, have been
renewed or maintained or are the subject of pending renewal
applications or payment of maintenance; (v) there are no facts or
circumstances which might reasonably be expected to cause any of the
material Intellectual Property Rights to be unenforceable or otherwise
not useable in the Business; (vi) the use of the Intellectual Property
Rights in the Business and the conduct of the Business as presently
conducted do not infringe or violate in any material respect the rights
(statutory, contractual or otherwise) of any other Person; and (vii)
all Trademark, Patent and Copyright registrations and grants included
in the Intellectual Property Rights which are indicated as being owned
by any of the ASIG Entities are owned by the ASIG Entities as
disclosed.
(c) Conflicts. Except as set forth in Schedule 6.9: (i) no
Intellectual Property Rights are involved in an interference, conflict,
cancellation, opposition or reexamination proceeding and, to Sellers'
Knowledge, there has been no threat or other indication that any such
proceeding will hereafter be declared or commenced; (ii) Sellers know
of no basis or indication that any such proceeding will hereafter be
declared or commenced or that any of the ASIG Entities has or will have
any basis for provoking or initiating an interference, conflict,
cancellation, opposition or reexamination proceeding with respect to
Intellectual Property Rights held by it or others; (iii) none of the
Intellectual Property Rights have been, are being, or will be infringed
by others or that any Information has
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been or is being misappropriated by others; and (iv) Sellers have no
Knowledge that any Person has obtained, sought, is seeking, or will
seek to obtain patent coverage on any invention or development used in
the conduct of the Business or which is the subject of any of the
Patents or Information.
(d) Year 2000. The ASIG Entities have developed and are timely
implementing a plan to address the issue that all software of the
Business shall perform as originally designed with respect to data and
processing for the year 2000 and beyond.
6.10 Contracts.
(a) List of Contracts. Schedule 6.10 hereto contains, as of
the date hereof, a correct and complete list of each of the following
types of contracts to which any of the ASIG Entities is a party
(whether written or oral) or by or to which any of its Businesses may
be affected or its properties may be bound or subject:
(i) Any contracts for the performance of Aircraft
Fueling Services and Aircraft Ground Handling Services and any
Concessions for such services in effect on the date hereof
producing revenue to the ASIG Entities in excess of US$100,000
per year individually or US$2,000,000 per year in the
aggregate (or its equivalent in foreign currency).
(ii) Any employment or severance agreement or
employment contract covering any former or present Personnel;
(iii) Any employee collective bargaining agreement or
other contract with any labor union or organization (except as
set forth on Schedule 6.10, there
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are no terms and conditions binding on any ASIG Entity under
any such contracts or agreements not set forth on the face of
such contracts or agreements);
(iv) Any agreement containing a covenant
not-to-compete or that otherwise limits the ability of any
ASIG Entity to conduct the Business or to engage in the
business of providing VIP lounge maintenance or interior
grooming services anywhere in the world;
(v) Any lease or similar agreement under which any of
the ASIG Entities is a lessor or sublessor of, or otherwise
makes available for use by or for any third party, any real or
personal property leased by any of the ASIG Entities or any
portion of premises otherwise occupied by any of the ASIG
Entities;
(vi) Any license or other agreement relating in whole
or in part to Intellectual Property Rights (including any
Rights Agreement under which any of the ASIG Entities has the
right to use any of the Intellectual Property Rights owned or
held by a third party);
(vii) Any agreement or contract under which any of
the ASIG Entities has borrowed or loaned any money or issued
any note, bond, indenture or other evidence of indebtedness,
or directly or indirectly guaranteed indebtedness, liabilities
or obligations of others or which obligates any of the ASIG
Entities to do any of the foregoing (other than endorsements
for the purpose of collection in the ordinary course of
business);
(viii) Any mortgage, pledge, security agreement, deed
of trust or other document granting an Encumbrance (including
Encumbrances upon properties
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acquired under conditional sales agreements, capital leases or
other title retention or security devices);
(ix) Any agreement, contract, lease, license,
commitment or instrument to which any of the ASIG Entities or
by or to which any of its respective assets or business is or
may be bound or subject, which is not in the ordinary course
of business or which (A) has or may have any aggregate future
liability in excess of US$100,000, individually or in excess
of US$2,000,000 in the aggregate, or its equivalent in foreign
currency, or (B) is not terminable by any of the ASIG Entities
for a cost of less than US$100,000 (or its equivalent in
foreign currency);
(x) Any Contract for sale or pledge of Receivables;
(xi) Any powers of attorney;
(xii) Any agreement, contract or commitment under
which any of the ASIG Entities is obligated to indemnify
Sellers or its affiliates (all of which agreements shall be
terminated on or prior to the Closing) or any director or
officer of any of the ASIG Entities or of any other entity,
except as set forth in the Articles or Bylaws of any of the
ASIG Entities;
(xiii) Any guaranty by Sellers.
(xiv) Any agreement (other than as listed in Section
6.10(a)(i) hereof), contract, purchase order or commitment
requiring any of the ASIG Entities to perform specified work
or supply material for a specified price in excess of
US$100,000, individually or in excess of US$2,000,000 in the
aggregate (or its equivalent in foreign currency);
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(xv) Any agreement, contract, purchase order or
commitment (other than as listed in Section 6.10(a)(i) hereof)
involving more than US$100,000 individually or in excess of
US$2,000,000 in the aggregate (or its equivalent in foreign
currency) or extending more than 6 months from the date hereof
for the purchase of materials, goods, supplies or services;
(xvi) Any agreement, contract, or commitment with
independent sales persons or consultants which reasonably may
be expected to cost any of the ASIG Entities more than
US$100,000 individually or in excess of US$2,000,000 with
respect all such agreements in the aggregate (or its
equivalent in foreign currency) during one year;
(xvii) Any agreement or contract pursuant to which
any officer, director or employee of any of the ASIG Entities
has a right to terminate his or her employment or receive a
payment of any kind upon the sale or merger or any other
change in control of any of the ASIG Entities;
(xviii) Any agreement or any other contract
reasonably expected to generate revenues in excess of
US$100,000 individually or in excess of US$2,000,000 with
respect all such agreements in the aggregate, or its
equivalent in foreign currency;
(xix) Any joint venture agreement with third parties
for the conduct of Business or any portion thereof, including
operation of the Aircraft Fueling Services, Tank Farms and
Hydrant Systems, and Aircraft Ground Handling Services;
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(xx) Any confidentiality agreement to which any of
the ASIG Entities is a party or by which it or its properties
is bound or is subject; or
(xxi) Any written agreement, contract, purchase order
or commitment not otherwise described in Sections 6.10(a)(i)
through 6.10(a)(xx) hereof which is material to any of the
ASIG Entities.
(b) Binding Contracts. As of the date hereof and immediately
after giving effect to the Closing, each contract, lease, license,
purchase order, commitment instrument or other agreement to which any
of the ASIG Entities is a party or by which any of the ASIG Entities
or their respective assets or properties are otherwise bound
(collectively the "Contracts") is, valid and binding, in full force
and effect and enforceable in accordance with its terms, except to the
extent such enforceability may be limited by or subject to the effect
of any bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or limiting
creditors' rights generally or by general principles of equity
(assuming proper authorization by all requisite corporate or, if not a
corporation, by all other requisite action by the other party thereto,
which, to Sellers' Knowledge, has occurred), except as disclosed on
Schedule 6.10 or the other Schedules attached hereto. Except as
disclosed in Schedule 6.10, each of the ASIG Entities has performed
all material obligations required to be performed by it under the
Contracts and is not (and with the passage of time or the giving of
notice, or both, will not be) in breach or default in any material
respect thereunder and, to Sellers' Knowledge, no other party to any
of the Contracts is (or with the lapse of time or the giving of
notice, or both, will be) in breach or default in any material respect
thereunder. Except as disclosed in Schedule
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6.10, no Contract will terminate or be terminable as a result of
transactions contemplated hereby. The Sellers have made available to
the Buyer correct and complete copies of each Contract.
(c) Consents. Except as disclosed on Schedule 6.10, no consent
or approval of or any notice with respect to any Concession, operation
of the Business as regularly conducted, ownership or lease of any
asset of the Business, Contract or Permit is required in connection
with consummation of the Transactions.
6.11 Litigation. Schedule 6.11 hereto contains a list, as of the date
of this Agreement, of (a) all pending or, to Sellers' Knowledge, threatened
Actions by, against or directly affecting any of the ASIG Entities or any of
their respective properties, assets, operations or businesses, (b) all Orders
against or directly affecting any of the ASIG Entities or any of their
respective properties, assets, operations or businesses, and (c) all Actions or
Orders against, and all settlements entered into by, any of the ASIG Entities
since January 1, 1996. Except as set forth on Schedule 6.11, none of the ASIG
Entities is in default under any Order or settlement and there are no Actions
pending or, threatened against, and no Orders entered against, any of the ASIG
Entities, nor is there, to Seller's knowledge, any basis for an Action against
any ASIG Entity.
6.12 Employee and Related Matters; ERISA.
(a) Benefits Plans. Schedule 6.12 hereto contains each written
or documented defined benefit pension plan (except Viad's Corporate
Retirement Income Plan referred to herein as "V-RIP", the "SERP", the
"MIP" and the "PUP" all herein defined), defined contribution pension
plan, retirement, profit sharing, stock option, incentive, deferred
compensation, medical, dental, vision, life insurance, sick pay,
disability, severance or
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other written plan, fund, program, policy, contract or arrangement
providing employee benefits administered, maintained or contributed to
by any of the Sellers or the ASIG Entities ("Plans") in which any ASIG
Entities' Personnel (defined herein) or beneficiary currently
participates, has participated or was eligible to participate or under
which any ASIG Entities' Personnel has accrued or is or will be
entitled to any benefits or on behalf of which any of the ASIG Entities
is or has acted as a fiduciary since December 31, 1996 (individually, a
"Plan" and collectively, the "Plans").
(b) Copies of Plans. Sellers have delivered or made available
to Buyer copies, together with all amendments thereto, of (i) each Plan
(other than certain union Plans listed in Schedule 6.12 which cannot be
obtained upon reasonable effort or, in the case of any unwritten Plans,
descriptions thereof), (ii) the most recent annual report on Form 5500
filed with the IRS or the equivalent or similar form of return (if any)
required by any foreign jurisdiction with respect to each Plan (if any
such report was required), (iii) the most recent summary plan
description for each Plan for which such a summary plan description is
required, (iv) the most recent trust agreement relating to any Plan;
and (v) a complete copy of the most recent IRS determination letter for
each Plan for which such a letter was obtained.
(c) Plan Liability. Except as in Schedule 6.12, there exists
no liability in connection with any Plan that has been terminated and
all procedures for termination of such plans have been followed
properly.
(d) Claims, Etc. Except as described in Schedule 6.12, each of
the Plans and any trust created thereunder has been operated and
administered in all material respects in
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accordance with its terms and in compliance with applicable Laws and
Orders, including but not limited to ERISA and the Code and any
applicable similar or equivalent Law of any foreign jurisdiction.
Except as described in Schedule 6.12, there are no pending or, to
Sellers' Knowledge, threatened actions, audits, or examinations with
respect to any of the Plans and any trust created thereunder by any
Governmental Authority.
(e) Contributions. All contributions (including all employer
contributions and employee salary reduction contributions) which are
due have been paid to each Plan and all contributions for any period
beginning on or before the Closing Date which are not yet due have been
paid to each Plan or accrued in accordance with the past custom and
practice of Seller and the ASIG Entities.
(f) Group Health Plans. With respect to any "welfare plan" (as
defined in Section 3(l) of ERISA) which qualifies as a "group health
plan" under Section 607(1) of ERISA and Section 4980B of the Code and
related regulations (relating to the benefit continuation rights
imposed by COBRA), or any applicable equivalent or similar Law of any
foreign jurisdiction, there is no material liability of any of the ASIG
Entities, such group health plan and the administrator of such group
health plan all have complied, in all material respects, with all
reporting, disclosure, notice, election and other benefit requirements
imposed under COBRA, or any applicable equivalent or similar Law of any
foreign jurisdiction, as and when applicable; and none of the ASIG
Entities has incurred any direct or indirect material liability, nor
are any of the ASIG Entities subject to any loss, assessment, excise
tax penalty, loss of federal income tax deduction or other sanction
arising on account of or in respect of any direct or indirect failure
to comply with such
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COBRA requirements or any applicable equivalent or similar Law of any
foreign jurisdiction.
(g) Insurance Funding. To Sellers' Knowledge, with respect to
each Plan that is funded wholly or partially through an insurance
policy, there will be no liability of any of the ASIG Entities as of
the Closing Date that has not been either paid or assumed by Sellers
pursuant to the terms of this Agreement or fully reserved against on
the Closing Balance Sheet and Net Assets Report.
(h) Severance Liabilities. Neither the signing and delivery of
this Agreement nor the consummation of the Transactions will (i) result
in any payment (including, without limitation, severance, unemployment
compensation, golden parachute or otherwise) becoming due from any of
the ASIG Entities under any Plan, (ii) increase any benefits otherwise
payable under any Plan, or (iii) result in the acceleration of the time
of payment or vesting of any such benefits other than with respect to
benefits assumed by Sellers.
(i) Additional Benefits. None of the ASIG Entities has
announced any plan or made any legally binding commitment to create
additional benefits which are intended to cover Personnel of any of the
ASIG Entities or to make any amendment or modifications to any Plan
that covers or has covered or is available to any of the ASIG Entities'
Personnel other than as set forth in Schedule 6.12 or as required by
law. No payment under any Plan will not be deductible by any of the
ASIG Entities subject to provisions of the Code by reason of failure to
comply with any provisions of the Code.
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(j) Qualification. Except as disclosed in Schedule 6.12
hereto, each Plan intended by Sellers or ASIG Entities to be a
qualified Plan under Code Section 401(a) meets the requirements of a
"qualified plan" under Code Section 401(a) and has received a favorable
determination letter from the Internal Revenue Service, and to Sellers'
Knowledge, there are no facts or circumstances which could render such
favorable determination letters invalid.
(k) PBGC Liability. None of Sellers or ASIG Entities has
incurred, and there are no facts or circumstances which would cause
Sellers or any of the ASIG Entities to incur any Liability to the PBGC
(other than PBGC premium payments) or otherwise under Title IV of ERISA
(including any withdrawal Liability) or under the Code with respect to
any Plan that any of Sellers maintains or ever has maintained or to
which any of them contributes, ever has contributed, or ever has been
required to contribute.
6.13 Multiemployer Plans.
(a) Withdrawal Liability. Each of the ASIG Entities has timely
made all contributions which any of them has been or is required to
make by law or contract to any Multiemployer Plan, and there is no
obligation to make payments for withdrawal liability.
(b) Insolvency. To Sellers' Knowledge, no Multiemployer Plan
to which any of the ASIG Entities are required to contribute or to
which their respective previously owned subsidiaries were required to
contribute is in reorganization status (as defined in Section 4241 of
ERISA or any applicable equivalent or similar Law of any foreign
jurisdiction) or insolvent (as defined in Section 4245 of ERISA or any
applicable equivalent or similar Law of any foreign jurisdiction).
Except as set forth on Schedule
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6.13, to Sellers' Knowledge, none of the Multiemployer Plans to which
any of the ASIG Entities contributes is subject to Title IV of ERISA.
6.14 Absence of Changes or Events. Since December 31, 1997, and
through the Closing Date, except as disclosed on Schedule 6.14 hereto or as
otherwise provided for in Section 8 hereof, there has not been any event or
circumstance which could reasonably be expected to have a Material Adverse
Effect on the ASIG Entities or the Business or any:
(a) No Changes. Change in the Business, financial condition,
assets, Liabilities, results of operations or prospects of any of the
ASIG Entities, except for changes which have not had or could not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect;
(b) Increases in Payments/Expenses. Except for actions taken
by the ASIG Entities in the ordinary course of business consistent
with past practice, (i) increases in the base compensation payable or
to become payable by any of the ASIG Entities to any of the Personnel,
(ii) except for amounts awarded in the ordinary course of business
consistent with past practices in character and amount, pursuant to
Plans in existence as of December 31, 1997, any bonus, incentive
compensation, service award or other like benefit granted, made or
accrued, contingently or otherwise, for or to the credit of any of the
Personnel (all of which are set forth on Schedule 6.14), (iii)
employee welfare, pension, retirement profit-sharing or similar
payment or arrangement made or agreed to by any of the ASIG Entities
for any Personnel whether past or present, except pursuant to Plans in
existence as of December 31, 1997, whether or not such Plans become
effective
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on January 1, 1998, (iv) amendment of or new employment, severance or
other compensation agreement involving annual compensation in excess of
US$25,000, or management or consulting agreement involving annual
payments in excess of US$25,000 to which any of the ASIG Entities is a
party and pursuant to which any third party will perform services for
any of the ASIG Entities, (v) commitment to any additional Plans
related to the Personnel or amendment or commitment to amend any of
such Plans, funds or similar arrangements as of December 31, 1997, or
(vi) except for amounts granted in the ordinary course of business,
consistent with past practice under existing agreements described in
Schedule 6.14, grant or award of any termination or severance payment
for any Personnel;
(c) Modification of Plans. Additions to or modification of the
Plans affecting any of the Personnel other than (i) contributions made
since December 31, 1997, in accordance with the terms of the Plans or
otherwise in accordance with the normal practices of any of the ASIG
Entities, (ii) the extension of coverage to any other Personnel who
became eligible after December 31, 1997, in accordance with the terms
thereof in effect prior to December 31, 1997, or (iii) as required by
law;
(d) Shares in Business. Issuance, sale or agreement to issue
or sell (i) any shares of capital, or (ii) any securities convertible
into, or options with respect to, or warrants to purchase or rights to
subscribe for, any shares of capital or any other participation in any
of the ASIG Entities or the Business;
(e) Transfer of Assets. Except for transfers pursuant to
Sections 8.9 and 8.24, hereof or the distribution of cash dividends
which will not and do not limit or impair
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Sellers' ability to deliver the minimum Net Working Capital or minimum
cash pursuant to Section 3.2, if any, for fiscal periods ending on or
prior to the Closing Date, Sale, assignment or transfer of any of the
assets of any of the ASIG Entities which are material individually or
in the aggregate to any of the ASIG Entities other than in the ordinary
course of business and consistent with past practice in character and
amount;
(f) Acquisitions.
(i) Acquisition by any of the ASIG Entities, by
merger or consolidation with, or purchase of substantially all
of the assets or capital, or any other acquisition of any
material assets or business of, any corporation, partnership,
association or other business organization or division
thereof;
(ii) Agreement by any of the ASIG Entities to enter
into the formation of any joint venture, partnership or other
similar arrangement or form any other new material arrangement
involving the Business; or
(g) Articles and Bylaws. Amendment to any of the ASIG
Entities' Articles or Bylaws;
(h) Failure to Operate in Ordinary Course. Failure to operate
any of the ASIG Entities in the ordinary course consistent with past
practice, or failure to preserve for any of the ASIG Entities its
customers and others having material business relations with it
(including employees, suppliers, customers, licensors, licensees and
distributors);
(i) Change in Policies. Change in or discontinuance of any
existing policies of insurance with coverages for any of the ASIG
Entities in full force and effect at least at such levels as were in
effect on December 31, 1997;
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(j) Change in Accounting. Change in accounting methods or
practices by any of the ASIG Entities, or reversal of previously
established accounting provisions or treatments, or any change in the
method of applying GAAP, or the realization of any extraordinary or
nonrecurring gain or loss;
(k) Maintenance of Books. Failure to maintain each of the ASIG
Entities' books and records in the usual, regular and ordinary manner
on a basis consistently applied with prior periods;
(l) Certain Modifications. Entry into, or termination,
amendment or modification by any of the ASIG Entities of, any Contract,
agreement, commitment, transaction, Permit or other instrument
(including, without limitation, any borrowing, capital expenditure,
capital contribution or capital financing) which is material to any of
the ASIG Entities other than in the ordinary course of business or as
is contemplated by this Agreement;
(m) Capital Expenditures. Except as required under Section
8.15, commitment to make any capital expenditure resulting in an
obligation of the ASIG Entities in excess of US$50,000 after the
Closing (which are not reflected on Schedule 6.14(m) unless Sellers
deliver written notice to Buyer and Buyer does not object to such
expenditure prior to Sellers' committing the ASIG Entities thereto) or
the failure to make any capital expenditures as provided in the
existing budget or operating plan of the ASIG Entities, a correct and
complete copy of which is attached to Schedule 6.14, has been delivered
to Buyer and is referenced in Section 8.15 and Schedule 8.15 hereof, or
the execution of any capital Lease or any incurring of any commitment
or Liability therefor by any of the ASIG
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Entities which is not in the ordinary course of business, or the cost
of which is in excess of US$50,000 each (or its equivalent in foreign
currency);
(n) Obligations. Failure to pay any obligation when due after
giving effect to any applicable grace or cure period, or failure to pay
accounts payable of the ASIG Entities in accordance with the terms
thereof;
(o) Encumbrancers. Mortgage, pledge or other Encumbrance of
any asset of any of the ASIG Entities, other than in the ordinary
course of business consistent with past practice;
(p) Receivables. Acceleration of the collection of Receivables
or other change from the Sellers' past practices with respect thereto.
(q) Debt. Incurrence of or commitment to incur any
indebtedness for borrowed money or any assumption, guarantee,
endorsement or other creation of responsibility for obligations of any
other Person or any loan or advance to any person by any of the ASIG
Entities, none of which shall be outstanding as of the Closing Date.
The foregoing shall not apply to trade payables and wages to employees
incurred in the ordinary course of business to the extent reserved on
the Closing Balance Sheet;
(r) Property Damage/Loss. Damage, destruction, casualty or
loss or waiver of rights of material value with respect to any assets
of any of the ASIG Entities (whether or not covered by insurance) in
excess of US$25,000 in the aggregate;
(s) Distributions. Except for transfer of the Retained Assets
and Retained Liabilities, settlement of the Intercompany Accounts and
payments not prohibited by Sections 6.14(e) or 6.14(x) hereto,
declaration, setting aside or payment of dividends or
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distributions (whether in cash, capital shares or property) in respect
of any capital of any of the ASIG Entities, or any redemption, purchase
or other acquisition of any capital of any of the ASIG Entities;
(t) Settlements. Settlement of pending or threatened
litigation involving the payment by any of the ASIG Entities of an
amount exceeding individually or in the aggregate US$100,000 (or its
equivalent in foreign currency);
(u) Labor Matters. Change in employee relations which has had
or could reasonably be expected to have a Material Adverse Effect,
including any material commitments (through negotiation or otherwise)
of any liability or obligation to any employee, employee representative
or labor union by any of the ASIG Entities;
(v) Lapse of Intellectual Property Rights. Disposition or
lapsing of any material Intellectual Property Rights or any disclosure
to any Person of any material Intellectual Property Rights not
theretofore a matter of public knowledge;
(w) Sale/Leasebacks. Entry by any of the ASIG Entities into
any sale/leaseback transaction;
(x) Payments to Sellers. Except for payments pursuant to
Section 8.9 hereof and the distribution of cash dividends, which will
not limit Sellers' ability to deliver the minimum Net Working Capital
pursuant to Section 3.2, if any, for fiscal periods ending on or prior
to the Closing Date, any payment by any of the ASIG Entities or any
agreement by any of the ASIG Entities to make payment to Sellers, of
whatever kind or nature, and whether or not in the ordinary course
consistent with past practice, including but not limited to
compensation payments
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or payments pursuant to Plans, except as disclosed on Schedule 6.14 or as
explicitly provided this Agreement; or
(y) General. Agreement by any of the ASIG Entities to do any
of the foregoing, except as contemplated under this Agreement.
6.15 Compliance with Applicable Laws.
(a) General Compliance. Except as disclosed on Schedule 6.15
hereto; (i) all of the ASIG Entities have complied and are in
compliance with all Laws and all Orders (other than Environmental Laws,
which are covered by Section 6.15(b) hereof), except where
noncompliance reasonably could not be expected to have a Material
Adverse Effect; (ii) since December 31, 1996, none of the ASIG Entities
has received any written or oral communication from any Person that
alleges that any of the ASIG Entities, their respective predecessors,
or any of their respective previously owned subsidiaries was not or is
not in compliance with any Law or Order.
(b) Environmental. Except for the Known Environmental
Liabilities disclosed on Schedule 6.15 (b)) hereto:
(i) All of the ASIG Entities, as well as the assets
of the ASIG Entities and the Business have complied and are in
compliance with applicable Environmental Laws;
(ii) Each ASIG Entity has timely obtained all
permits, licenses, registrations and other governmental
approvals and authorizations and has timely filed all reports
and other documents required by applicable Environmental Laws;
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(iii) There are no conditions or circumstances
concerning any of the assets of the ASIG Entities which pose a
material risk to the environment or health or safety of
persons;
(iv) No ASIG Entity or Seller has received notice of
and Sellers have no Knowledge of any violation (whether
alleged or proven), claim, liability, demand, litigation,
proceeding or governmental investigation (whether pending or
threatened) arising from applicable Environmental Laws
relating to, the Business, the assets of the ASIG Entities or
Hazardous Materials which are or were present on or with
respect to the assets of the ASIG Entities.
(v) Without limiting Sellers' indemnification
obligations under Sections 12.2(a)(iii), (iv), (v) and (vi)
hereof, to Sellers' Knowledge, there are no past or present
conditions, circumstances, activities, practices, incidents,
actions, or plans relating to the past or current business,
assets or facilities of the ASIG Entities that could interfere
with or prevent compliance or continued compliance with
applicable Environmental Laws or which would give rise to any
legal liability (whether statutory or common law) or which may
otherwise form the basis of any claim, action, demand, suit,
proceeding, hearing, notice of violation, study or
investigation based on or related to the generation,
manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling or the Release into
the indoor or outdoor environment of any Hazardous Material;
(vi) No lien relating to any applicable Environmental
Law has attached to any asset of an ASIG Entity;
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(vii) No ASIG Entity has, either expressly or by
operation of law, assumed or undertaken any liability,
including without limitation any obligation for corrective or
remedial action, of any other person relating to Environmental
Laws; and
(viii) Sellers have made available to Buyer full and
complete copies of all environmental study, assessment, audit
and analytical reports in their possession or under their
reasonable control relating to the past or current properties
or facilities of the ASIG Entities and all other material
documents relating to environmental compliance or liability
issues relating to the ASIG Entities.
6.16 Employee and Labor Relations. Except as disclosed on Schedule
6.16 hereto:
(a) Collective Bargaining Representative. There is no
collective bargaining representative of any employees of the ASIG
Entities;
(b) Labor Disputes. There is and for the past 3 years has been
no labor strike, work stoppage, lockout or other work action, and no
such dispute is actually pending or, to Sellers' Knowledge, threatened
against or affecting any of the ASIG Entities;
(c) Representative Questions. No union organization or
decertification campaign is in progress or, to Sellers' Knowledge,
threatened with respect to any of the ASIG Entities; and no question
concerning representation exists respecting such employees;
(d) Unfair Labor Practices. There is no unfair labor practice
charge or complaint pending or, to Sellers' Knowledge, threatened
before the National Labor
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Relations Board or any similar state, local or foreign Governmental
Authority having jurisdiction, including any foreign labor Law against
any of the ASIG Entities;
(e) Grievances. There is no pending or, to Sellers' Knowledge,
threatened labor grievance against any of the ASIG Entities;
(f) Employment Matters. No Actions or investigations with
respect to any Law relating to the employment of labor is under way (or
to Sellers' Knowledge threatened) against any of the ASIG Entities and
no facts or circumstances exist that could give rise to a liability
under any such law which would have a Material Adverse Effect; and
(g) Collective Bargaining Obligations. All collective
bargaining obligations required by any Law or contract have been, or
prior to Closing will be, satisfied by Sellers or the ASIG Entities. No
plant closing or mass layoffs as those terms are defined in the WARN
Act or any similar state or local Law have been implemented in the past
5 years, and no layoffs that could implicate such Laws will be
implemented before Closing without advance notice to Buyer.
6.17 Absence of Undisclosed Liabilities. Except as disclosed on
Schedule 6.17 hereto, none of the ASIG Entities have any Liabilities other than
(a) Liabilities or obligations to the extent reflected or reserved against in
the Most Recent Balance Sheet; (b) liabilities or obligations which were
incurred after the date of the Most Recent Balance Sheet in the ordinary course
of business consistent with past practice in character and amount (none of which
is the result of a claim for breach of contract, a warranty claim, a tort or
infringement) and which will be reflected on the Closing Balance Sheet and the
Net Assets Report; or (c) are as expressly described in this Agreement or in the
Schedules hereto.
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6.18 Brokers and Finders. Except as disclosed on Schedule 6.18 hereto
(all of which will be paid by Seller at Closing), no investment banker, broker,
finder, consultant or intermediary in connection with the transactions
contemplated by this Agreement hired by or on behalf of Sellers or the ASIG
Entities is entitled to any investment banking, brokerage, finder's or similar
fee or commission in connection with this Agreement or the Transactions.
6.19 Insurance. Schedule 6.19 hereto contains a list of insurance
policies of any nature whatsoever presently in effect and maintained with
respect to the business or property of any of the ASIG Entities or for which any
ASIG Entity has been named as an insured or otherwise has been the beneficiary
of coverage at any time during the past 1 year, and all such insurance has been
customary and reasonable in scope and amount for the Business. Except as
otherwise disclosed on Schedule 8.20, no ASIG Entity has any self-insurance
arrangements.
6.20 Banking Facilities. Schedule 6.20 hereto contains a list of: each
bank, savings and loan or similar financial institution or other entity in which
any of the ASIG Entities has an account or safe deposit box or which holds other
assets of any of the ASIG Entities and the numbers of the accounts or safe
deposit boxes maintained thereat; and the names of all persons authorized to
draw on each such account or to have access to any such safe deposit box
facility, or who acts as a fiduciary or hold a power of attorney from any of the
ASIG Entities with respect to any such accounts.
6.21 Books of Accounts, Records. Each of the ASIG Entities' general
ledgers, stock record books, minute books and other material records relating to
its respective assets, properties, Contracts and outstanding legal obligations
are, in all material respects complete and correct, and have been maintained in
accordance with good business practices.
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6.22 Accounts Receivable. All Receivables reflected on the Most Recent
Balance Sheet of the Financial Statements have arisen from bona fide
transactions in the ordinary course of business.
6.23 Affiliated Transactions. Except as disclosed on Schedule 6.23
hereto, no Seller and no officer, director, shareholder, or affiliate of any
Seller or ASIG Entity or any person related by blood or marriage to any such
Person or any entity in which any such person possesses, directly or indirectly,
any material beneficial interest, is a party to any agreement, contract,
commitment or transaction with, or performs any material service for, any ASIG
Entity or has any interest, directly or indirectly, in any property used by any
ASIG Entity. No Seller nor any of its subsidiaries nor any director, officer,
shareholder or affiliate of any Seller or ASIG Entity, or any person related by
blood or marriage to any such Person possesses, directly or indirectly, any
material financial interest in, or is a director, officer or employee of, any
corporation, firm, association or business organization which is a substantial
supplier, customer, lessor, lessee, or competitor of any ASIG Entity.
6.24 Licenses and Permits. Except as disclosed in Schedule 6.24 hereto,
(a) each of the ASIG Entities has and is in compliance with all material
licenses, franchises, permits (including without limitation environmental and
construction permits and operating permits), approvals, authorizations,
exemptions, classifications, certificates, registrations, and similar documents
or instruments required to conduct its business as presently conducted; and (b)
all such licenses, franchises, permits (including without limitation
environmental and construction permits and operating permits), approvals,
authorizations, exemptions, classifications, certificates,
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registrations, arrangements, commitments, and similar documents or instruments
are valid, binding, and in full force and effect.
6.25 Customers. Schedule 6.25 hereto lists each customer or group of
related customers who accounted for more than 5% of the consolidated revenues of
the Business during the past 24 months. Neither Seller nor any ASIG Entity has
received any notice or has any knowledge that any such customer intends to
terminate or materially reduce its business with the ASIG Entities in the
future, and except as set forth on Schedule 6.25 no such customer has terminated
or materially reduced its business with the ASIG Entities during the past 12
months.
6.26 Disclosure. No representation or warranty regarding the ASIG
Entities or the Business contained in this Agreement nor any schedule,
attachment or exhibit hereto, and no statement contained herein or in any
certificate or document identified herein or on Schedule 6.26 as having been
furnished to Buyer pursuant to the Transactions contemplated hereby, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein not
misleading. There is no fact or condition of which either Seller has knowledge
which has not been disclosed to Buyer and which has or could reasonably be
expected to have a Material Adverse Effect on the Business.
7. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents and
warrants to Sellers that:
7.1 Corporate Organization and Qualification. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is duly qualified or licensed to do business
as a foreign corporation and is in good standing as a foreign corporation in
each jurisdiction where the properties owned, leased or operated, or the
business
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conducted by it require such qualification, except where the failure to so
qualify or be in such good standing would not have a Material Adverse Effect.
Buyer has full corporate power and authority to own its properties and to carry
on its business as it is now being conducted.
7.2 Authority. Buyer has the requisite corporate power and authority to
approve, authorize, execute and deliver this Agreement and to consummate the
Transactions. As of the Closing, this Agreement and the consummation by Buyer of
the Transactions will have been duly and validly authorized and approved by all
necessary corporate proceedings on the part of Buyer. This Agreement will have
been duly and validly executed and delivered by Buyer and will constitute the
valid and binding agreement of Buyer, enforceable against Buyer in accordance
with its terms, subject to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors, rights and to
general principles of equity.
7.3 No Violation. As of the Closing, neither the execution, delivery
and performance of this Agreement nor the consummation by Buyer of the
transactions contemplated hereby, will:
(a) No Conflicts. Conflict with or result in any violation of
the Articles or Bylaws of Buyer; or
(b) No Defaults. Result in the breach of, or constitute a
default (with or without notice or lapse of time, or both) under, or
result in the modification, limitation or revocation of, or result in
the loss, suspension, impairment or forfeiture of any right, privilege
or benefit under, or require any payment under, or give rise to a right
of termination, cancellation or acceleration of any obligation under,
any provision of (i) any note, bond, debt instrument, mortgage,
indenture, deed of trust, item of intellectual property, Permit,
license, lease, lien, contract, commitment, agreement or other
instrument
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or arrangement to which Buyer or any of its subsidiaries is a party or
by which any of their respective properties, assets or businesses are
bound or (ii) any Law or order applicable to Buyer or by which Buyer or
any of its subsidiaries is bound or by which any of their respective
properties or assets or businesses is bound or affected.
7.4 Brokers and Finders. Except as disclosed on Schedule 7.4 hereto
(all of which will be paid by Buyer), no investment banker, broker, finder,
consultant or intermediary hired by or on behalf of Buyer is entitled to any
investment banking, brokerage, finder's or similar fee or commission in
connection with this Agreement and the Transactions.
7.5 Investment. Buyer (a) understands that the Companies' Shares have
not been, and will not be, registered under the Securities Acts, and are being
offered and sold in reliance upon U.S. federal and state exemptions for
transactions not involving any public offering, (b) is acquiring the Companies'
Shares solely for its own account for investment purposes, and not with a view
to the distribution thereof, (c) is a sophisticated investor with knowledge and
experience in business and financial matters, (d) has received certain
information concerning Sellers and has had the opportunity to obtain additional
information as desired in order to evaluate the merits and the risks inherent in
holding the Companies' Shares, (e) is able to bear the economic risk and lack of
liquidity inherent in holding the Companies' Shares, and (f) is an Accredited
Investor for the reasons set forth on Schedule 7.5 hereto.
7.6 Consents and Approvals. Except for requirements of the HSR Act and
the Exon-Xxxxxx Amendment, no Permit of, or registration, declaration or filing
with, any Governmental Authority, or any other Person not a party to this
Agreement, is required for the validity of the execution and delivery of, or for
Buyer to execute and deliver, this Agreement or to pay the
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Purchase Price to Sellers at Closing, other than (a) as may be required by
applicable state corporate and the Securities Act, the HSR Act or the
Exon-Xxxxxx Amendment, (b) as disclosed on Schedule 7.6 hereto, and (c) Permits,
registrations, declarations and filings which will be made on or prior to
Closing or which are not required as of the Closing.
8. ADDITIONAL COVENANTS AND AGREEMENTS; ACKNOWLEDGMENTS.
8.1 Conduct of Business of the ASIG Entities.
(a) Ordinary Course of Business. From the date hereof through
the Closing Date, except as consented to or approved by Buyer in
writing and except as provided for or contemplated in Section 6.14
hereof and this Section 8, Sellers covenant and agree that Sellers
shall cause all of the ASIG Entities to operate the Business in the
ordinary and usual course consistent with past practices. Moreover,
except as consented to by Buyer in writing, Sellers agree that from the
date hereof through Closing Date, none of the ASIG Entities shall
engage in any practice, take any action or enter into any transaction
of the nature that would require a disclosure as provided for or
contemplated by Sections 6.14 or 8.17 hereof.
(b) Preservation of Business. Without limiting the foregoing,
Sellers shall use their best efforts to cause the ASIG Entities to
preserve and advance the Business, keep its properties intact, preserve
the goodwill of the Business, perform its agreements and obligations,
pay its payables promptly as they become due (without extension) in
accordance with the terms thereof, make all committed budgeted or
scheduled replacements or repairs or equivalent, maintain all of its
physical properties in good repair and operating condition, subject
only to ordinary wear and tear and in each case in accordance with past
practices, continue appropriate maintenance, repair and replacement,
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capital expense or improvement programs in accordance with original
plans in all material respects but subject to the permitted
limitations of Section 8.15 hereof and perform and comply in all
material respects with the terms of such plans and the contracts set
forth in Schedule 6.10 hereto.
8.2 Reasonable Efforts. Sellers and Buyer promptly shall: (a) make
their respective filings and thereafter make any other required submissions
under all applicable laws, including filings under the HSR Act and the
Exon-Xxxxxx Amendment, if applicable, with respect to the Transactions; and (b)
use all their reasonable best efforts to take, or cause to be taken, all other
actions and do, or cause to be done, all other things necessary, proper or
appropriate to cause the Closing to occur and to consummate and make effective
the Transactions as herein required.
8.3 Access to Information. From the date hereof and through the
Closing, upon reasonable notice, Sellers and all of the ASIG Entities shall
permit representatives of Buyer to have full access to all premises, properties,
personnel, books, records, contracts and documents of or pertaining to the ASIG
Entities and shall provide Buyer with such financial information regarding the
Business as Buyer reasonably may request. Such access by Buyer shall not disrupt
the conduct of the Business by the ASIG Entities. From and after the date hereof
(including after Closing), Sellers will give Buyer reasonable access to and
cooperation from its staff, accountants, auditors, books, records and workpapers
for purposes of preparing historical financial information and statements of the
ASIG Entities.
8.4 Publicity. Prior to Closing, except for disclosures specifically
required by Law or any order, no public announcement relating to the
transactions contemplated hereby shall be released by Buyer or the Sellers (and
the Sellers shall cause the ASIG Entities not to make any
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such release), without the prior written consent of the other parties hereto. If
disclosure specifically is required by Law or any Order, prior to Closing, Buyer
or Sellers, as applicable, shall give the non-disclosing party prior written
notice of the disclosure to be made and a reasonable opportunity to consult with
the disclosing party prior to making any such disclosure.
8.5 Taxes.
(a) Mutual Assistance. Buyer and Sellers will provide each
other such records, access to employees and assistance including
execution of documents that are merely ministerial in nature, such as
the signing of Returns and other forms which Sellers represent to be
complete and correct) as reasonably may be requested by either of them
in connection with the preparation of any Return, any audit or other
examination by any Governmental Authority, and any judicial or
administrative proceedings relating to liability for Taxes (including
refunds thereof) as provided pursuant to Section 8.5(b) hereof. From
and after the Closing Date, Buyer agrees to retain Tax Records of the
ASIG Entities relating to tax periods for which Sellers have
indemnified Buyer pursuant to Section 8.5(b) hereof for until the
expiration of any applicable limitations period (including any
extensions thereof) with respect to such tax periods. Buyer will use
reasonable efforts to notify Sellers prior to destroying material tax
records for such tax periods. Any such records or other information
disclosed pursuant hereto shall be held in strict confidence and shall
not be disclosed to others for any reason whatsoever, except to the
extent that such disclosure is required in order to effect the intent
of this Agreement or such disclosure is required by law.
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(b) Allocation of Tax Liability. Sellers shall be responsible
for and shall indemnify and hold Buyer and the ASIG Entities harmless
against and from all Taxes (excluding any Transaction Tax imposed by
Government Authorities on Buyer and not on Sellers) (i) due or payable
at any time with respect to or relating to the income, ownership and/or
operation of the ASIG Entities at any time on or before Closing, and
for all periods ending on or before the Closing Date; or (ii) resulting
from any ASIG Entity having been, or ceasing to be, a member of any
consolidated, combined, unitary or similar group that includes either
of Sellers, whether imposed under Treasury Regulation 1.1502-6 of the
Code or otherwise. Buyer and the ASIG Entities jointly and severally
shall be responsible for and shall indemnify and hold Sellers harmless
against all Taxes relating to the ownership and operations of the ASIG
Entities for all taxable periods beginning on the date immediately
after the Closing Date or thereafter. Sellers shall be responsible for
and shall indemnify and hold Buyer and the ASIG Entities harmless from
and against all Taxes relating to the ownership and operation of the
ASIG Entities for any taxable period beginning before and ending after
the Closing Date to the extent such Taxes are attributable to the
portion of such period ending on the Closing Date. For any tax period
that begins before the Closing Date and ends after the Closing Date,
the portion of such Tax attributable to the portion of such period
ending on the Closing Date:
(i) In the case of any such Taxes not based upon or
related to income or receipts, shall be deemed to be the
amount of such Taxes for the entire taxable period multiplied
by a fraction, the numerator of which is the number of days in
the
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period ending on the Closing Date and the denominator of
which is the number of days in the entire taxable period;
and
(ii) In the case of any such Taxes based upon or
related to income or receipts, shall be determined on the
basis of an interim closing of the books at the close of
business on the Closing Date.
(c) Tax Audit Adjustments. Buyer shall be responsible for the
good faith representation of each of the ASIG Entities in regard to all
present and future U.S. and foreign, federal, state, provincial and
local Tax audits, protests and appeals for all years or periods open
for the assessment of Tax deficiencies with respect to the Business
through and including any taxable period ending on or before the
Closing Date and all succeeding periods. Buyer shall inform the Sellers
of (i) the commencement of any audit or examination, (ii) proposals of
deficiencies or refunds, and (iii) the assessment of deficiencies or
the agreement to refund an overpayment of Taxes, with respect to all of
the ASIG Entities for any Tax Period for which Sellers have indemnified
Buyer pursuant to Section 8.5(b) hereof. Sellers shall be entitled to
participate in such audits and any subsequent protests and appeals, and
to review any workpapers relating thereto with respect to such Tax
periods. Neither Buyer nor any of the ASIG Entities shall settle,
compromise, accept, reject, protest or appeal any adjustment or
proposed adjustment in connection with any Tax audit or examination
unless Buyer and the ASIG Entities have first obtained the Sellers'
written approval, which approval shall not be unreasonably withheld or
delayed, with respect to such adjustment if such actions would
materially,
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adversely affect the Tax liability of any of the ASIG Entities or
Sellers giving effect to this Agreement.
(d) Tax Returns. Prior to the Closing Date, each of the ASIG
Entities duly and timely shall file all Returns with respect to the
ownership and operations of the Business required to be filed by it by
such time (giving effect to any extensions available therefor) and
shall pay all Taxes due and payable with respect to such Returns,
provided that any of the ASIG Entities may contest in appropriate
proceedings any Tax, governmental charge, duty, or assessment; and each
of the ASIG Entities will withhold from each payment made to each of
its employees, if any, the amount of all Taxes (including, but not
limited to, federal income taxes and the U.S. Federal Insurance
Contribution Act Taxes and state, local and foreign income, wage,
disability, unemployment, and similar Taxes) required to be withheld
therefrom and will pay the same, before becoming delinquent, to the
proper Governmental Authority. Sellers duly and timely shall file all
federal, state and local Returns and reports for each of the ASIG
Entities and the Business for all taxable periods ending on or prior to
the Closing Date, and Buyer shall duly and timely file all Returns and
reports for each of the ASIG Entities for all taxable periods beginning
after the Closing Date. Notwithstanding the foregoing, Buyer duly and
timely shall file all other Returns and reports for each of the ASIG
Entities for all taxable periods beginning before and ending after the
Closing Date. Consistent with the prior practice of the ASIG Entities,
at Sellers' reasonable written request (to be made no later than 30
days prior to the requested delivery date), Buyer shall use reasonable
efforts, at Sellers' expense, to cause the ASIG Entities to provide to
Sellers pro
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forma 1997 and short period 1998 (through the Closing Date) U.S.
federal and state income and franchise tax returns in a manner
consistent with prior practice. If such pro forma returns are requested
by Sellers, Buyer shall use reasonable efforts to provide Sellers such
1997 pro forma returns by one month after the Closing and such 1998 pro
forma returns by 3 1/2 months following Closing. Upon receipt of the
invoice with respect to reasonable out-of-pocket fees and expenses
incurred with respect to such pro forma returns, Sellers shall promptly
pay all such amounts.
(e) Section 338(h)(10) Election. With respect to the
acquisition of Shares hereunder, Buyer shall make a timely election
under Section 338(g) of the Code and Seller and Buyer jointly shall
make an election under Section 338(h)(10) of the Code and any
corresponding elections under state or local law (collectively, a
"Section 338 Election"). Seller and Buyer shall (i) take, and cooperate
with each other to take, all actions necessary and appropriate
(including filing such forms, returns, elections, schedules and other
documents as may be required) to effect and preserve a timely Section
338 Election promulgated thereunder, or any successor provisions, as
promptly as practicable following the Closing Date, but not later than
the date which is the latest date for making such Section 338 Election,
and (ii) Seller and Buyer shall report the sale of the Shares pursuant
to this Agreement consistent with the Section 338 Election and shall
take no position contrary thereto or inconsistent therewith in any Tax
Return, any discussion with or proceeding before any taxing authority,
or otherwise.
8.6 Insurance. Sellers shall cause each of the ASIG Entities to keep,
or cause to be kept, all insurance identified on Schedule 6.19 in full force and
effect through the close of
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business on the Closing Date. Upon the signing hereof Sellers and Buyer
shall cooperate to arrange for the replacement of such Insurance
identified for replacement as of the Closing Date without the Sellers
being responsible thereunder, and Sellers shall cooperate with the ASIG
Entities as may be necessary to permit such insurance not identified
for replacement to remain in force as of the Closing Date for
continuation after the Closing Date as determined by Sellers, Buyer and
the ASIG Entities.
8.7 Resignations. Except to the extent Buyer directs otherwise, Sellers
shall cause the resignation of each of the ASIG Entities' present directors and
officers, named on Schedule 8.7 hereto, effective as of the date Buyer causes
them to be accepted.
8.8 Third-Party Consents. To the extent that the change of ownership of
Companies' Shares or ASIG Subsidiary Shares requires, pursuant to any License,
Concession, Permit, Contract, or lease, the consent, release or waiver of or
notice to any third party, Sellers shall use best efforts to obtain such
consent, release or waiver, without any condition or modification adverse to the
Business, or to give such notice. Buyer may delay the Closing or terminate this
Agreement upon notice in writing if Sellers fail to obtain any such consent or
to give any such notice and any such failure (individually or in the aggregate)
could, in Buyer's reasonable judgment, have a Material Adverse Effect and
Sellers do not agree to a reduction in the Purchase Price that compensates Buyer
in an amount satisfactory to Buyer for Sellers, inability to deliver such
License, Concession, Permit Contract or Lease. If Sellers do not obtain, without
conditions or modifications adverse to the Business, a consent required under
any License, Concession, Permit, Contract or Lease in connection with the sale
and transfer of the Companies' Shares to Buyer (or the consummation of any other
Transaction contemplated by this Agreement), or is
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otherwise not permitted to transfer any asset of the Business (each a
"Non-Transferred Asset"), then Sellers shall enter into any alternative
arrangements Buyer requests which are reasonably acceptable to Sellers (such as,
without limitation, closing the transactions contemplated by this Agreement into
a trust or escrow or distributing the Non-Transferred Asset to Sellers and
entering into a "back-to-back" agreement with Buyer or the ASIG Entities), so as
to provide Buyer and the ASIG Entities with the full benefit after the Closing
of any Non-Transferred Asset to the extent Buyer or the ASIG Entities perform
the post-closing obligations with respect to such Non-Transferred Asset.
8.9 Post-Closing Pension Plan Service Funding.
(a) V-RIP Pension Plan. As of the Closing Date, the V-RIP Plan
shall be amended in a manner reasonably acceptable to Buyer so that the
ASIG Personnel who are participants in the V-RIP that have not attained
vesting in the V-RIP shall continue to be credited with service with
the ASIG Entities solely for the purposes of the vesting of benefits.
Sellers shall retain all liabilities under the VRIP and shall be solely
responsible for all benefits accrued by the ASIG Personnel (and all
former employees of the ASIG Entities) thereunder as of the Closing
Date. ASIG Personnel shall be entitled to a distribution of their
accrued benefit from the V-RIP in accordance with the terms of the
plan, as if they had terminated employment on the Closing Date. No
assets held on behalf of the V-RIP shall be transferred from the V-RIP
to any plan established by Buyer (other than with respect to a
participant rollover distribution, if applicable) and Sellers shall
indemnify and save the ASIG Entities harmless against any and all
obligations arising under or with respect to the V-RIP.
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(b) Buyer Cooperation. Buyer shall reasonably cooperate with
Viad in providing after the Closing Date information regarding
continued service of employees so that Viad may give proper credit for
vesting service to such employees under the V-RIP. Buyer also shall
provide such assistance and information reasonably requested by Viad
with respect to the ASIG Entities' Personnel in order for Viad
toperform such-testing and-calculations as required under ERISA.
(c) Savings Plans. With respect to the Viad Capital
Accumulation Plan (the "Savings Plans"), Sellers and Buyer shall
cooperate to transfer the accounts of the ASIG Personnel to a savings
plan qualified under Code Section 401(a) to be established by the ASIG
Entities within 60 days of Closing. Prior to transfer of assets, Buyer
shall deliver to Sellers an opinion of counsel with respect to the
qualified status of Buyer's plan. Sellers shall cause the ASIG
Personnel to be fully vested in their account balances under the
Savings Plans as of the Closing Date. Until such time as the account
balances can be distributed, Sellers shall instruct the Trustee of the
Savings Plan to continue to accept loan repayments from the ASIG
Personnel consistent with prior practice. The ASIG Entities shall
include the outstanding loan balances under the Savings Plan to be
transferred to the savings plan it establishes.
(d) ESOP. With respect to the Viad Employee Stock Ownership
Plan (the "ESOP"), Sellers shall retain all obligations and liabilities
arising under or with respect to the ESOP and shall be solely
responsible to the ASIG Personnel with respect to benefits accrued
thereunder as of the Closing Date. Seller shall cause the ASIG
Personnel to be fully vested in their account balances under the ESOP
as of the Closing Date. The ASIG
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Personnel will be entitled to a distribution of their account balance
in the ESOP in accordance with the terms of the plan, as if they
terminated employment on the Closing Date.
(e) DSI Pension Plan. As of the Closing, Buyer or a subsidiary
thereof shall maintain the Bargained Employees' Pension Plan of
Dispatch Services, Inc. (the IIDSI Plan"). In the event the assets are
maintained in a trust controlled by Sellers, Sellers and Buyer shall
cooperate to take all actions which are necessary or desirable prior to
closing so that the trust assets for this plan are maintained in a
trust sponsored by DSI.
(f) Retiree Welfare Benefits. All ASIG Personnel who are
eligible to receive post-retirement medical or life insurance benefits
under a Plan sponsored by Viad or any of its affiliates (the "Retiree
Plan") if they retired under the Retiree Plan as of the Closing Date
shall receive and continue to receive benefits under the Retiree Plan
at Sellers, sole cost and expense if they retire as of or prior to the
Closing from employment with the ASIG Entities under the same terms and
conditions as applicable to Sellers, or any of its affiliates'
retirees. Sellers shall remain responsible, and shall retain all
obligations with respect to, any person receiving post-retirement
medical or life insurance benefits as of the Closing Date and Sellers
shall indemnify and save the ASIG Entities harmless from and against
any and all liabilities and obligations arising under or with respect
to such Plans.
(g) Transfer of Assets. Any and all V-RIP or Retiree Plan
assets reflected on the books of the ASIG Entities shall be transferred
to Sellers as of the Closing Date. Buyer shall provide Sellers with
copies of the pension and retiree files of the ASIG Personnel.
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8.10 Noncompete Agreement. Sellers and Buyer shall enter into and
execute a noncompetition agreement ("Noncompete Agreement") in form and
substance as set forth as Schedule 8.10 hereto.
8.11 Certain Property Transfers. On or prior to Closing, Viad shall
transfer and assign to one of the Companies or one of the ASIG Entities the
Trademarks or (service marks) held by Viad for use by the ASIG Entities in the
Business and listed on Schedule 8.11 hereto substantially in the form attached
hereto as Schedule 8.11 and on or prior to Closing, Sellers shall cause the
appropriate ASIG Entity to transfer to Viad, as necessary, the Retained Assets
and Retained Liabilities.
8.12 Confidential Information; Solicitation of Personnel. Sellers and
Buyer each covenant and agree as follows:
(a) Sellers' Obligation. Sellers shall not (i) at any time
after the Closing Date, disclose to any Person other than Buyer or the
ASIG Entities, in any manner, directly or indirectly, any Information
pertaining to the Business, which is licensed to or owned in whole or
in part by any of the ASIG Entities or which has been created or
developed for, used in or necessary for the conduct of the Business;
and (ii) for a period of 3 years after the Closing Date, except for
Xxxxxx Xxxxxx, solicit for employment by Sellers or their respective
subsidiaries, or employ persons who are directors, officers, agents,
employees or contractors of Buyer or any of the ASIG Entities after the
Closing Date.
(b) Buyer's Obligation. Buyer shall not, and shall not permit
the ASIG Entities or any subsidiary or successor thereof to, for a
period of 3 years, disclose to any Person other-than Sellers or their
respective subsidiaries, in any manner, directly or indirectly, any
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Information pertaining to the businesses of Sellers (other than the
Business) or their respective subsidiaries, which is licensed or owned
in whole or in part by Sellers or any of their respective subsidiaries
(including, without limitation, the businesses of Xxxxx International,
Inc. or any other subsidiary of Sellers engaged in the airline catering
business) or which has been created or developed for, used in or
necessary for the conduct of such businesses.
8.13 Obligations under Financial Accommodations. To extent permitted by
third parties, Buyer shall use reasonable efforts to cause ASIG Entities to
assume all of the obligations of Sellers pursuant to all of the Financial
Accommodations disclosed in Schedule 8.13 which are indicated as to be assumed
by Buyer, copies of which have been given to Buyer, and to the extent possible,
shall assert reasonable efforts to obtain for Sellers a full release and
discharge of Sellers from all obligations under the Financial Accommodations.
8.14 Liabilities under Certain Plans. Sellers shall terminate the
eligibility of the ASIG Entities under the Supplemental Retirement Income Plan
("SERP") and the deferred compensation plan for such Personnel under the
Performance Unit Plan ("PUP") and the Management Incentive Plan ("MIP") as of
the Closing Date, shall retain and shall fully indemnify Buyer and the ASIG
Entities against all liability to participating Personnel of the ASIG Entities
thereunder and shall retain, and not transfer to Buyer or the ASIG Entities any
of the assets or amounts, if any, funding, SERP, MIP or PUP. Personnel
participating in SERP, the MIP and the PUP as of the Closing Date are identified
on Schedule 8.14 hereto.
8.15 Budgeted Capital Expenditures. Sellers have agreed that they will,
or will cause the ASIG Entities to make and pay for, the capital expenditures
described in Schedule 8.15 in an
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aggregate amount of approximately US$3.4 million. To the extent any such capital
expenditures are not paid for prior to the Closing, Sellers agree to leave an
additional amount of cash in the ASIG Entities on the Closing Date equal to the
difference between approximately US$3.4 million and the actual cost paid after
the date hereof and prior to Closing for specific budgeted capital expenditure
items which are required to be capitalized on a balance sheet under GAAP listed
on Schedule 8.15.
8.16 Disclosure Obligations. Sellers shall promptly deliver a written
notice to Buyer explaining any material development known by Sellers to affect
materially the assets, liabilities, business, financial condition, operations,
prospects, or results of operations of the ASIG Entities or disclosing in detail
facts they may discover or changes in facts occurring, after the date on which
the Schedules are accepted pursuant to Section 13.16 hereof which, if existing
on such date would have been required to be disclosed or described in a schedule
hereto. No later than 10 business days after receipt of any such notice from
Sellers, Buyer may elect to (i) request Sellers to cure at Sellers' expense any
matter referred to in such notice; (ii) accept such notice in which case the
Schedules will be deemed amended by such notice; or (iii) terminate the
Agreement. Buyer's election pursuant to the foregoing sentence shall be in
writing.
8.17 Covenant Regarding Receivables and Cash Accounts. Sellers shall
restore (or cause to be restored) to the ASIG Entities, free and clear of any
Encumbrance (subject only to filing with the applicable Governmental Authorities
of the UCC-3 documents or such other applicable form of termination or release
delivered to Buyer pursuant to Section 10.1(n) hereof), all Receivables of the
ASIG Entities as of the Closing Date with appropriate reserves for any past due
or uncollectible receivables. Sellers may contribute cash to (or refrain from
distributing cash
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from) the ASIG Entities in lieu of restoring any particular Receivables. Seller
shall cause funds maintained by the ASIG Entities as xxxxx cash accounts to
remain intact at normal levels consistent with past practice. Sellers shall
return to the ASIG Entities as of the Closing all cash relating to customer
deposits or held on behalf of the consortia without diminution (except for the
purposes for which such accounts have been maintained in the ordinary course of
business of the ASIG Entities).
8.18 Other Documents/Actions. In addition to the foregoing, Buyer and
Sellers shall each execute such documents and take such further actions as may
be required for each such entity to assure performance of its other obligations
set forth in Section 8 hereof.
8.19 Medical Benefits. Viad agrees to retain and be solely responsible
for all liability or obligation of any ASIG Entity for claims made and
conditions existing on or prior to Closing with respect to any medical condition
or illness of any employee, former employee, laid-off or disabled employee
(including in each case spouses and dependents thereof) (including, without
limitation, the plan administered by Xxxx Xxxxx Healthcare Inc., the Dispatch
Plan and the other medical plans disclosed on Schedule 8.20), it being
understood that with respect to matters subsequent to December 31, 1997, that
are covered by the Aetna HMO Plan or other insured Plan, Sellers shall not be
liable to the extent (i) any such claims are paid under such Plan; or (ii) of
any employee co-pay or deductible requirements. Buyer agrees to provide Viad
such reasonable cooperation and access to employee records to enable Viad to
manage effectively the processing and disposition of such liability for such
claims.
8.20 Worker's Compensation Cooperation. Buyer agrees to implement and
maintain a program of rehabilitation designed to promote the injured employees,
return to work, similar to
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the Return-to-Work program Sellers maintained during periods prior to the
Closing Date as summarized on Schedule 8.20 hereof. Buyer agrees to maintain
such return-to-work program for as long as Sellers are responsible for such
Worker's Compensation claims. Buyer will provide reasonable assistance to
Sellers for the disposition of claims, including making employees reasonably
available for statements, depositions taken by Sellers, and Sellers'
investigation.
8.21 Net Asset Value Adjustment Related to Medical Claims and Worker's
Compensation Claims. Buyer and Sellers agree that in exchange for Sellers
retaining (and indemnifying Buyer against) the liabilities set forth in Section
12.2(b)(i) hereof, and notwithstanding anything in this Agreement to the
contrary, Sellers shall receive a credit of US$800,000 in the calculation of Net
Assets for the Closing Balance Sheet and Net Asset Report and if such credit is
unavailable, Buyer shall execute a Promissory Note in favor of Viad for an
amount which results in net proceeds of US$800,000.00.
8.22 Burbank Condemnation Proceeding. Buyer and Sellers agree that
Sellers shall retain all Liabilities (including without limitation all Burbank
Facility Environmental Liabilities) and assets (including without limitation the
99 year Lease with respect to the Tank Farm located at the Burbank airport which
is the subject of the Burbank Condemnation) in connection with the Burbank
Condemnation proceeding. Sellers shall cause the ASIG Entities to make any
transfers of assets or any payments necessary to effect the terms of this
Section. Buyer and Sellers will cooperate with each other so as to not
unreasonably disrupt the condemnation proceedings or the operation of the
Burbank facility in accordance with the applicable Permits.
8.23 Certain Tax Obligations. Buyer and Sellers agree that Sellers
shall retain all liability and (other than with respect to reserves for foreign
Tax) related accrued reserves for
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Taxes as provided in Section 8.5 above. Buyer shall make available to Seller the
information, assistance and access described in Section 8.5 hereto to permit
Sellers to file timely reports or returns for such taxes for such periods.
8.24 Retained Assets and Retained Liabilities. Prior to Closing, the
ASIG Entities shall transfer to Viad all of their respective rights and Viad
shall assume all of the related liabilities to those assets and such other
Retained Liabilities described on Schedule 8.24 hereto ("Retained Assets and
Retained Liabilities"). Viad shall pay for all sales and transfer taxes, if any,
which may result from such transfer.
8.25 Estoppel Letter. Sellers shall obtain an estoppel certificate, if
available (the "Estoppel Certificate"), dated no more than fifteen (15) days
prior to the Closing Date, from the landlords, lessors, sublessors or licensors
with respect to each of the Leases for such Leased Real Property in form and
substance reasonably satisfactory to Buyer and Buyer's lender (if any).
8.26 Non-Disturbance Agreement. Seller shall use reasonable efforts to
obtain a non-disturbance agreement (the "Non-Disturbance Agreements") in form
and substance reasonably satisfactory to Buyer and Buyer's lender (if any) from
each lender encumbering any parcel of Leased Real Property insured pursuant to a
Title Policy.
9. CONDITIONS.
9.1 Conditions to Each Party's Obligations. The respective obligations
of each party to consummate the Transactions are subject to the fulfillment at
or prior to the Closing Date of each of the following conditions, any or all of
which may be waived, in writing, in whole or in part:
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(a) Governmental and Regulatory Consents. All filings,
including filings required by the HSR Act and the Exon-Xxxxxx
Amendment, required to be made prior to or on the closing Date with,
and all Permits required to be obtained prior to or on the Closing Date
from, any Governmental Authority in connection with the execution and
delivery of this Agreement and the consummation of the Transactions
shall have been made or obtained or the applicable waiting period shall
have expired (as the case may be) without restrictions having a
Material Adverse Effect. In addition, no threat or challenge to the
consummation of the Transactions shall have been made or, if made, such
threat or challenge shall have been resolved in favor of permitting
such Transactions.
(b) Litigation. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Law or Order or taken any action
which prohibits or materially and adversely affects the Business or
consummation of the Transactions; provided, however, that the parties
invoking this condition shall use commercially reasonable efforts to
have any such Order vacated or rescinded.
9.2 Conditions to Obligations of Buyer. The obligations of Buyer to
consummate the Transactions are subject to the fulfillment on or prior to the
Closing Date of each of the following conditions, any or all of which may be
waived, in writing, in whole or part by Buyer:
(a) Representations and Warranties; Performance of Agreement.
Each of the representations and warranties of Sellers herein shall have
been true and correct in all respects when made and as of the Closing
Date as if made at and as of the Closing Date (except to the extent
they relate to a particular date); Sellers shall have performed or
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complied with all agreements and covenants required by this Agreement
to be performed or complied with by Sellers on or prior to the Closing
Date; and Sellers shall have delivered to Buyer a certificate, dated
the Closing Date, on behalf of Sellers signed by a duly authorized
officer of Sellers in form and substance reasonably satisfactory to
Buyer, to such effect.
(b) Third-Party Consents. All required authorizations,
consents or approvals of any Governmental Authority or third party
under the Concessions, Permits, Contracts or otherwise, shall have been
requested by Sellers, and all material authorizations, consents and
approvals of any Governmental Authority or third party shall have been
obtained.
(c) Noncompete Agreement. The noncompetition agreement in form
and substance set forth in Schedule 8.10 hereto have been executed and
delivered.
(d) Opinion. Buyer shall have been furnished at the Closing
with opinions of Xxxxx X. Xxxxx, Vice President and General Counsel of
Viad dated as of the Closing Date with respect to the matters set forth
on Schedule 9.2(d) hereto.
(e) Due Diligence. Buyer, its agents and representatives shall
have completed an evaluation of the operations, assets and liabilities
of the Business, including a review of business, financial,
contractual, environmental and legal information, the results of which
shall in good faith be satisfactory to Buyer in all material respects.
(f) Financing. Buyer shall have obtained the financing
necessary to consummate this transaction in accordance with the terms
set forth in the commitment letters attached hereto as Schedule 9-2(f).
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(g) Subject to Section 8.22, all right, title and interest in
the assets comprising the Burbank, California, Tank Farm facility shall
have been, as appropriate, assigned, contributed, or otherwise
transferred from the ASIG Entity in which they reside as of the date
hereof to Viad and Viad and the appropriate ASIG Entity shall cooperate
to enter into an M&O agreement satisfactory in form and substance to
Buyer and Viad by which the appropriate ASIG Entity shall, without
undertaking responsibility for any Environmental Liabilities associated
with such facility, operate the Burbank Tank Farm facility on behalf of
Viad for so long as the Buyer reasonably requires, which agreement
shall, inter alia, provide that Viad shall bear sole responsibility for
the full cost and expense necessary to upgrade if and as required the
Tank Farm at such Facility in a timely manner to comply with all
applicable Environmental Laws without disrupting the ongoing operation
of such Tank Farm.
(h) Deliveries Completed. The deliveries contemplated by
Section 10 hereof have been completed.
9.3 Conditions to Obligations of Sellers. The obligations of Sellers to
consummate the Transactions are subject to the fulfillment on or prior to the
Closing Date of each of the following conditions, any or all of which may be
waived, in writing, in whole or in part by Sellers to the extent permitted by
applicable Law or Order:
(a) Representations and Warranties; Performance of Agreement.
Each of the representations and warranties of Buyer herein shall be
true and correct in all material respects when made and shall be true
and correct in all material respects at and as of the Closing Date as
if made at and as of the Closing Date (except to the extent they relate
to a
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particular date); Buyer shall have performed or complied in all
respects with all agreements and covenants required by this Agreement
to be performed or complied with by Buyer on or prior to the Closing
Date; and Buyer shall have delivered to Sellers a certificate, dated
the Closing Date, on behalf of Buyer by a duly authorized officer of
Buyer, in form and substance reasonably satisfactory to Sellers, to
such effect.
(b) Noncompete Agreement. The Noncompete Agreement in form and
substance set forth in Schedule 8.10 have been executed and delivered.
(c) Deliveries. The deliveries contemplated by Section 10
hereof have been completed.
(d) Board. The Board of Viad shall have approved on or prior
to March 24, 1998, the execution, delivery and performance of this
Agreement in accordance with Section 5.2 above.
10. CLOSING DELIVERIES.
10.1 Deliveries by Sellers. On the Closing Date, Sellers shall deliver
or cause to be delivered to Buyer (unless previously delivered) the following:
(a) Corporate Resolutions. Enabling resolutions of the Boards
of Sellers authorizing the Transactions.
(b) Share Certificates. Subject to availability under
applicable foreign Law, one or more stock certificates or other
evidence satisfactory to Buyer representing all of the Companies'
Shares;
(c) Officer's Certificate. The Sellers' certificate referred
to in Section 9.2(a) hereof;
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(d) Articles and Bylaws. Subject to availability under
applicable foreign Law, correct and complete copies of the Articles,
and all amendments thereto, and the Bylaws, and all amendments thereto,
of each of the ASIG Entities certified, in the case of the Articles as
of the most recent practicable date by an official of the appropriate
Governmental Authority, and in the case of the Bylaws, as of the
Closing Date by the corporate secretary or other authorized officer of
each of the ASIG Entities;
(e) Corporate Records. Subject to availability under
applicable foreign Law, all minute books, stock transfer books, stock
certificate books, and corporate certificates, and all corporate seals
and financial and accounting books and records of each of the ASIG
Entities;
(f) Good Standing. Except where not available in foreign
jurisdictions, a long-form certificate of good standing for each of
the ASIG Entities certified as of a recent date by the appropriate
official of the appropriate Governmental Authority;
(g) Legal Opinion. The opinion of counsel to Sellers referred
to in Section 9.2(d) hereof;
(h) Noncompete Agreement. The Noncompete Agreement referenced
in Section 8.10 hereof;
(i) Certificate of Incumbency. A certificate of incumbency of
Sellers certified by its secretary or assistant secretary, which shall
identify by name, title and signature the officer(s) of Sellers
authorized to execute this Agreement and all related documents;
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(j) Estoppel Certificates. If available, duly executed
estoppel certificates from each landlord, sublandlord, licensor,
grantor or owner of any concessions or contract for those properties or
facilities at the locations specified on Schedule 6.8;
(k) Original Contracts. The originals, conformed copies or
photocopies of Leases, concessions or contracts, together with duly
executed consents of the landlord, sublandlord, licensor, owner or
other party to concessions or contracts, if required, and if in
possession of Sellers;
(l) Non-Disturbance Agreements. The Non-Disturbance Agreements
to the extent available in the form required under Section 8.26.
(m) Resignations of Officers and Directors. A duly executed
certificate of resignation of each officer or director of any ASIG
Entity dated as of or prior to the Closing; and
(n) Release. A release, in form and substance reasonably
satisfactory to Buyer, of all Encumbrances on the Receivables.
(o) Other Documents. All other documents, instruments or
writings reasonably required to be delivered by Sellers at or prior to
the Closing pursuant to this Agreement or otherwise required in
connection herewith, including, without limitation, the resignations
referred to in Section 8.7 hereof and, if requested, a transition
services agreement reasonably acceptable to the parties hereto.
10.2 Deliveries by Buyer. At the Closing, Buyer will deliver or cause
to be delivered to Sellers (unless previously delivered) the following:
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(a) Corporate Resolution. Enabling resolution by the Board of
Buyer authorizing the Transactions;
(b) Purchase Price. The Purchase Price of US$95,000,000 to be
wire transferred to the account or accounts designated by Viad;
(c) Officer's Certificate. The officer's certificate referred
to in Section 9.3(a) hereof;
(d) Noncompetition. The Noncompete Agreement described in
Section 8.10 hereof;
(e) Certificate of Incumbency. A certificate of incumbency of
Buyer certified by its secretary or assistant secretary, which shall
identify by name, title and signature the officer(s) of Buyer
authorized to execute this Agreement and all related documents; and
(f) Other Documents. All other documents, instruments or
writings reasonably required to be delivered by Buyer at or prior to
the Closing pursuant to this Agreement or otherwise required in
connection herewith.
11. TERMINATION.
11.1 Termination by Mutual Consent. This Agreement may be terminated
and the Transactions may be abandoned at any time prior to the Closing Date, by
the mutual written consent of Buyer and Sellers.
11.2 Termination by Buyer or Sellers. This Agreement may be terminated
by action of either Buyer or Sellers if any court of competent jurisdiction in
the United States or some other Governmental Authority shall have issued an
Order or taken any other action permanently restraining, enjoining or otherwise
prohibiting the Transactions.
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11.3 Termination by Buyer. This Agreement may be terminated at any time
prior to the Closing Date by Buyer, if (a) a condition to the performance of
Buyer under Section 9.1 or Section 9.2 hereof shall not be fulfilled on or
before the time specified for the fulfillment thereof, and such failure is not
the direct result of action or nonaction of Buyer; (b) a failure, breach or
default of any representation, warranty or covenant of Sellers resulting in a
Material Adverse Effect on the Business or Buyer shall occur hereunder, which
failure, breach or default has not been cured within 5 business days following
receipt by Sellers of notice of such failure; or (c) at any time after May 4,
1998, if all of the conditions precedent to its obligation to effect the
Transactions shall not have been fulfilled by reason other than Buyer's failure
to comply with its obligations hereunder.
11.4 Termination by Sellers. This Agreement may be terminated by Viad
on behalf of Sellers, if (a) a condition to the performance of Sellers under
Sections 9.1 or 9.3 hereof shall not be fulfilled on or before the time
specified for the fulfillment thereof and such failure is not the result of
action or nonaction of Seller; (b) a failure, breach or default of any
representation, warranty or covenant of Buyer resulting in a Material Adverse
Effect on Sellers shall occur hereunder, which failure, breach or default has
not been cured within 5 business days following receipt by Buyer of notice of
such failure; or (c) at any time after May 4, 1998, if all of the conditions
precedent to its obligation to effect the Transactions shall not have been
fulfilled by reason other than Sellers, failure to comply with its obligations
hereunder.
11.5 Effect of Termination and Abandonment. In the event of termination
of this Agreement pursuant to this Section 11, this Agreement shall no longer be
of any force or effect and there shall be no liability on the part of any party
or its respective directors, officers or
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shareholders, except that (a) in the case of termination pursuant to Section
11.3 or Section 11.4 hereof because of a failure, default or breach of the other
party, in which event the aggrieved party or parties, in addition to any and all
other rights, remedies and damages available at law or equity, may recover from
the defaulting party the amount of Loss or Losses incurred by such aggrieved
party or parties in connection with this Agreement and the Transactions
contemplated hereby which the aggrieved party or parties would otherwise have to
bear pursuant to Section 13.1 of this Agreement; and (b) in any event, no such
termination shall affect the Indemnifying Party's obligations pursuant to
Section 8.12 hereof.
12. INDEMNIFICATION.
12.1 Survival. Except as stated in this Section 12, liability of the
parties pursuant to the representations and warranties in this Agreement shall
survive the Closing and shall remain effective for claims for which notice has
been delivered to the Indemnifying Party not later than 2 years after the
Closing Date regardless of any investigation or inquiry by Buyer or Sellers at
anytime; provided, however, that the liability of the parties hereto pursuant to
all of the covenants herein shall survive the Closing indefinitely subject to
applicable statute of limitations.
12.2 Indemnification by the Sellers.
(a) General Indemnity. Subject to the limitations set forth in
Sections 6, (representations and warranties concerning the ASIG
entities), this Section 12 and Section 13.13 (concerning dispute
resolution) hereof, Sellers, as Indemnifying Party, shall indemnify and
hold harmless the ASIG Entities, Buyer, its affiliates and each of
their respective Personnel, all as Indemnified Parties, against and
from any Loss or Losses, suffered or incurred by any such Indemnified
Parties to the extent arising from (i) any
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breach of any representation or warranty of Indemnifying Parties
contained herein which and to the extent it survives the Closing
(pursuant to Section 12.1 hereof); (ii) any breach of any covenant of
Indemnifying Parties contained in this Agreement requiring performance
before or after the Closing Date;(iii) any liability of the ASIG
Entities assumed by Sellers hereunder; (iv) any Burbank Facility
Environmental Liabilities; (v) any Known Environmental Issues; and (vi)
any Unknown Environmental Liabilities.
(b) Specific Indemnities.
(i) Liability for Medical Claims and Worker's
Compensation. Sellers shall, without limitation, indemnify
Buyers and the ASIG Entities against, be solely responsible
for, and pay on behalf of Buyer and the ASIG Entities as
incurred, the full amount of all obligations, duties and
liabilities relating to any claims by employees or former
employees (including dependents and spouses of employees or
former employees) of the ASIG Entities (or any of their
respective predecessors) existing on or prior to the Closing
Date, or arising from or alleged to arise from or in
connection with any fact, event, claim, injury or condition
existing on or prior to the Closing Date, for, and shall
provide all necessary support and administrative services with
respect to: (a) medical costs and expenses relating to all
self-insured benefit programs, and (b) costs, expenses and
other liabilities under any worker's compensation law,
regulations, requirements or programs. Sellers shall perform
or cause to be performed all of the administrative functions
of processing and managing after the Closing such medical and
worker's compensation claims contemplated hereby with the same
standard of care used to
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perform such functions prior to the Closing. Nothing herein
express or implied is intended or shall be construed to confer
upon or give to any person, firm or corporation, other than
the parties hereto and their respective permitted successors
and assigns, any rights or remedies under or by reason of this
Agreement.
(ii) Liability for Unknown or Undisclosed Claims.
Without limitation, Sellers hereby assume and are jointly and
severally liable for, and shall pay on behalf of Buyer and the
ASIG Entities, all obligations, duties and liabilities
relating to any Liabilities existing on or prior to the
Closing Date or arising from or alleged to arise from or in
connection with any fact, violation, event, claim, injury or
condition existing on or prior to the Closing Date that is not
reflected on the Closing Balance Sheet or is not otherwise
disclosed in detail in the Schedules hereto.
(iii) Liability for Other Welfare Benefits. Sellers
shall indemnify Buyers and the ASIG Entities against, be
solely responsible for, and pay on behalf of Buyer and the
ASIG Entities, all obligations, duties and liabilities
relating to any claims under Sellers (if applicable) or ASIG
Entity Plans or benefits existing on the date hereof or on the
Closing Date for severance pay, vacation pay, death,
disability or other non-medical welfare benefits payable as a
result of facts, actions or conditions existing on or prior to
the Closing Date, or which are provided to any person who is
an employee or is a retired or inactive employee (or a
dependent thereof) of the ASIG Entities on or immediately
prior to the Closing Date, in each
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case except to the extent of the amounts specifically accrued
for each such item on the Closing Balance Sheet.
(iv) Liability for Litigation Matters. The Sellers
shall indemnify Buyers and the ASIG Entities against, be
solely responsible for, and pay on behalf of Buyer and the
ASIG Entities, all obligations, duties, liabilities or losses
relating to any claim or matter to the extent relating to or
arising with respect to the ownership or operation of,the
Business or its assets on or prior to the Closing Date
including, without limitation, those matters set forth on
Schedule 6.11 to the extent such obligation, duty, liability
or Loss exceeds the amount set forth as a reserve for such
litigation on the Closing Balance Sheet.
(c) Limitations.
(i) Except as otherwise set forth in this Agreement,
Sellers, obligation to indemnify, defend and hold harmless
Buyer under Sections 12.2(a)(i), and 12.2(b)(ii) hereof shall
be applicable only to the extent that the aggregate amount of
all such Losses exceeds US $500,000 (or its equivalent in
foreign currency) (it being understood that if any
representation or warranty is breached in accordance with its
terms, then for purposes of calculating the amount of any Loss
resulting from any such breach, all materiality, knowledge,
Knowledge Material Adverse Effect qualifications and other
dollar thresholds set forth in the representations and
warranties shall be ignored for purposes of determining the
amount of any Losses resulting from any breach of a
representation or warranty and the full amount of
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such Losses (without regard to any such qualifications,
limitations, or thresholds) shall be applied against the
foregoing $500,000 deductible);
(ii)(A) Sellers' obligations pursuant to Section
12.2(a)(v) hereof shall arise only to the extent that the
aggregate amount of all Known Environmental Issues covered
thereunder paid after Closing by Buyer or ASIG Entities (or
their successors or assigns) exceed US$170,000 and Losses paid
by Sellers thereunder shall be limited to not more than a
gross aggregate amount of US $5,000,000. Sellers shall have no
obligation to indemnify Buyer pursuant to Section 12.2(a)(v)
for any Routine Monitoring Costs after the third anniversary
of the Closing Date.
(B) Sellers' obligations pursuant to Section
12.2(a)(vi) hereof shall be limited to not more than a gross
aggregate amount of US $10,000,000. Subject to Section 12.4
hereof, Sellers shall have no obligation to indemnify Buyer
pursuant to Section 12.2(a)(vi) for any Unknown Environmental
Liabilities with respect to any matter as to which Buyer does
not give notice hereunder prior to the fifth anniversary of
the Closing Date.
(iii) In no event shall Sellers' aggregate obligation
with respect to Section 12.2(a)(i) or 12.2(b)(ii) hereunder
exceed an amount equal to 50% of the Purchase Price, as
adjusted, actually received by Sellers; and
(iv) The liabilities of Sellers hereunder shall be
joint and several.
Notwithstanding anything to the contrary contained herein, the foregoing
limitations on Seller's obligation to indemnify Buyer against Losses incurred as
a result of breaches of representations
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and warranties under Section 12.2(a)(i) shall not apply to limit Sellers joint
and several obligation to indemnify Buyer under or in connection with any other
provision of this Agreement.
12.3 Indemnification by Buyer. Subject to the limitations set forth in
this Section 12 and Section 13.3 hereof, Buyer, as Indemnifying Party, shall
indemnify and hold harmless Sellers and their personnel, including officers,
directors, agents and assigns, as Indemnified Parties, for, against and from any
Loss or Losses suffered or incurred by either of the Indemnified Parties to the
extent arising from (a) any breach of any representation or warranty of
Indemnifying Party contained herein which and to the extent it survives the
Closing Date (pursuant to Section 12.1 hereof); (b) any breach of any covenant
of Indemnifying Party contained in this Agreement requiring performance
responsibility or assumption of liabilities before, on or after the Closing
Date; (c) any failure of Buyer or the ASIG Entities to abide by or perform
strictly their respective obligations under Section 7.5 hereof; (d) any claim
arising directly or indirectly from the failure of the ASIG Entities or their
successors or subsidiaries to discharge as and when due any liabilities of the
ASIG Entities which were the subject of the Financial Accommodations assumed by
Buyer in effect on the Closing to the extent caused by operation of the Business
after Closing; and (e) Liabilities arising under Environmental Laws to the
extent such Liabilities arise from facts, events or conditions occurring or
caused as a result of the operation of the Business of the ASIG Entities after
the Closing Date. Buyer's obligations pursuant to Section 12.3(e) hereof shall
be limited to not more than a gross aggregate amount of US$10,000,000. Subject
to Section 12.4 hereof, Buyer shall have no obligation to indemnify Sellers
pursuant to Section 12.3(e) hereof with respect to any matter as to which
Sellers do not give notice hereunder prior to the fifth anniversary of the
Closing Date. The limits of Sections 12.2(c)(i) and 12.2(c)(iii) shall apply to
all
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breaches of representations and warranties by Buyer as if such Sections applied
to Buyer's obligations to indemnify Sellers pursuant to this Section 12.3.
12.4 Termination of Indemnification. The obligations of Indemnifying
Party hereto to indemnify and hold harmless an Indemnified Party hereto shall
not terminate with respect to any item as to which the Indemnified Party hereto
shall have, before the expiration of the applicable period in which a claim for
indemnification under this Agreement can be made, previously made a claim by
delivering a notice (stating in reasonable detail the basis of such claim) to
the Indemnifying Party.
12.5 Procedures Relating to Indemnification.
(a) Notice. In order for an Indemnified Party to be entitled
to any indemnification, defense or hold harmless provided for in this
Section 12 in respect of any Third Party Claim, such Indemnified Party
must notify the Indemnifying Party in writing, and in reasonable detail,
of the Third Party Claim after receipt by such Indemnified Party of
written notice of the Third Party Claim; provided, however, that failure
to give such notification within a reasonable time after receipt of such
written notice shall not affect the indemnification provided hereunder
except to the extent the Indemnifying Party shall have been actually
prejudiced as a result of such failure (except that the Indemnifying
Party shall not be liable for any expenses or Losses incurred during the
period in which the Indemnified Party failed to give such notice).
Thereafter, the Indemnified Party shall deliver to the Indemnifying
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Party, within 5 business days after the Indemnified Party's receipt.
thereof, copies of all notices and documents (including court papers)
received by the Indemnified Party relating to the Third Party Claim.
(b) Participation. If a Third Party Claim is made against an
Indemnified Party, the Indemnifying Party will be entitled to
participate in the defense thereof and, if Buyer and Sellers mutually
agree in writing on the terms upon which the Indemnifying Party may
assume the defense of such claim, the Indemnifying Party may assume the
defense thereof with counsel selected by the Indemnifying Party and
reasonably satisfactory to the Indemnified Party. Should the
Indemnifying Party be entitled pursuant to the preceding sentence to
assume the defense of a Third Party Claim, and the Buyer and Sellers
agree in writing to the Indemnifying Party's assumption of the defense
of such Third Party Claim, the Indemnifying Party will not be liable to
the Indemnified Party for legal expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof. If the
Indemnifying Party assumes such defense in accordance with this Section
12.5(b), the Indemnified Party shall have the right to participate in
the defense thereof and to employ counsel, separate from the counsel
employed by the Indemnifying Party, it being understood that the
Indemnifying Party shall control such defense but the fees and expenses
of the Indemnified Party's counsel shall be the expense of such
Indemnified Party unless (i) the Indemnifying Party has agreed in
writing to pay such fees and expenses, (ii) any relief other than the
payment of money damages is sought against any Indemnified Party, or
(iii) such Indemnified Party shall have been advised by its counsel
that there may be one or more legal defenses reasonably available to it
which are different from or
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additional to those available to the Indemnifying Party other than a
claim against the Indemnifying Party. In any such case as provided in
Sections 12.5(b)(i), (ii) or (iii) hereof, the reasonable fees and
expenses of such separate counsel shall be borne by the Indemnifying
Party. If the Indemnifying Party is entitled to, and chooses to, defend
or prosecute any Third Party Claim, all the parties hereto shall
cooperate in the defense or prosecution thereof. Such cooperation shall
include the retention and, upon the Indemnifying Party's request, the
provision to the Indemnifying Party of records and information which
are reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. The
Indemnifying Party shall not, without the written consent of the
Indemnified Party, settle or compromise or consent to the entry of any
judgment with respect to any action or Third Party Claim if the effect
thereof is to admit any criminal liability by, or to permit any
injunctive relief or other order providing nonmonetary relief to be
entered against, the Indemnified Party.
(c) Exceptions. Notwithstanding the foregoing terms of Section
12.5:
(i) The Indemnifying Party shall not be entitled to
assume control of such defense and shall bear the fees and
expenses of counsel retained by the Indemnified Party if the
Indemnifying Party failed or is failing to vigorously prosecute
or defend such claim; and
(ii) The Indemnifying Party shall not be entitled to
control the defense of any claim to the extent that the claim
seeks an injunction or equitable relief against Indemnified
Party which, if successful, could materially interfere with the
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business of Indemnified Party. If the Indemnifying Party, with
the consent of the Indemnified Party, shall control the
defense of any such claim, the Indemnifying Party shall obtain
the prior written consent of the Indemnified Party (which
shall not be unreasonably withheld) before entering into any
settlement of a claim or ceasing to defend such claim, if
pursuant to or as a result of such settlement or cessation,
injunction or other equitable relief will be imposed against
the Indemnified Party or any other relief (including without
limitation monetary relief) is to be imposed on the Business
or the Indemnified Party.
(d) Acceptance or Dispute. Upon receipt of notice of any claim
of indemnity hereunder, the Indemnifying Party, within 30 days after
such receipt, shall notify the Indemnified Party that such Indemnifying
Party either (i) acknowledges and accepts its obligation and agrees to
accept liability for any losses resulting from such claim or (ii)
disputes such claim. Failure to give such notice will be deemed to
constitute acknowledgment and acceptance by the Indemnifying Party.
12.6 Payment of Indemnity Payments. If any payment is due to an
Indemnified Party, such payment shall be made to such Indemnified Party within
10 days of such payment becoming due, and any payment that is made after such
10th day shall bear interest from (and including) the date due to (but
excluding) the date of payment, at a rate equal to the base or prime rate
published by Citibank N.A. or, if not available, such other major money center
bank, from time to time in effect on the date such payment became due, provided,
that no payment shall be due so long as it is the subject of any reasonable
contest by the Indemnifying Party.
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12.7 Fraud. Notwithstanding anything in this Agreement to the contrary,
none of the limitations in this Section 12 shall apply to any matter giving rise
to a claim which, or the delay in discovery of which, is the consequence of
fraud, willful or intentional misrepresentation or omission by Sellers.
12.8 Special Procedures Relating to Environmental Issues and
Liabilities.
(a) Management. Sellers shall assume Management of (i) any
Known Environmental Issue after the $170,000 limitation set forth in
Section 12.2(c)(ii)(A) is satisfied and until the $5,000,000 limitation
set forth in Section 12.2(c)(ii)(A) is reached; and (ii) any Unknown
Environmental Liability until the $10,000,000 limitation set forth in
Section 12.2(c)(ii)(B) is reached. Buyer shall be entitled to assume
Management of any matter for which Sellers seek indemnification under
Section 12.3(e) hereof until the $10,000,000 limitation set forth in
Section 12.3 hereof is reached. An Indemnifying Party shall (or shall
be entitled to) assume Management where it concludes, based upon a
reasonable review of information available to such party upon such
assumption, that it is obligated to indemnify the Indemnified Party for
the entirety of any Liabilities associated with such matter. To assume
Management with regard to any matter, an Indemnifying Party must, in a
reasonably prompt manner, provide to the Indemnified Party written
notification that (a) such party assumes Management of the matter, and
(b) such party will be financially able to fully and promptly satisfy
and discharge Liabilities associated with such matter. Notwithstanding
the foregoing, in cases where the Indemnifying Party concludes in good
faith either (i) prior to assumption of management, or (ii) following
assumption of management based upon newly discovered facts or
circumstances, that is
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not obligated to indemnify the Indemnified Party for the entirety of
any Liabilities associated with such matter, the Indemnifying Party
shall promptly notify the Indemnified Party in writing of such
conclusion and the parties shall negotiate in good faith to arrive at,
and shall thereafter adjust as appropriate from time to time, a
mechanism for the joint Managment of the matter which comports with the
reasonably anticipated allocation of Liability hereunder for such
matter.
(b) Consultation. As to any matter for which an Indemnifying
Party undertakes Management hereunder, the Indemnifying Party shall:
(i) reasonably consult with, and keep the Indemnified Party apprised of
major developments; and (ii) obtain the Indemnified Party's consent
prior to undertaking any material action with respect to such matter
(such consent not to be unreasonably withheld or delayed).
(c) Good Faith. The party undertaking Management for any
matter shall: (i) do so in a manner that does not diminish the value or
productivity of, materially disrupt or materially interfere with, the
ASIG Entities businesses, operations, business relationships,
governmental relationships, assets or properties; (ii) exercise
Management in a commercially reasonable manner; and (iii) put forth
good faith efforts to expeditiously complete environmental work and
negotiations with any applicable Governmental Authority.
(d) Completion Standard. The standard for completion of
environmental work by Sellers in connection with an Environmental Issue
or Liability shall be the satisfaction of the applicable regulatory
agency under Environmental Laws, provided that Sellers shall
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retain responsibility to the extent additional work is later required
by such agency with respect to such Environmental Issue or Liability.
13. MISCELLANEOUS AND GENERAL.
13.1 Payment of Expenses.
(a) General. Except as provided in Schedule 13.1 hereto or
otherwise provided herein, whether or not the transaction shall be
consummated, each party hereto shall pay their own expenses incident to
preparing for, entering into and carrying out this Agreement and the
consummation of the Transactions.
(b) Audit And Environmental. After the Closing Date, Sellers
shall promptly reimburse Buyer in an amount not to exceed US$350,000
for verified out-of-pocket expenses of Buyer for the audit of the
Financial Statements for 1995, 1996 and 1997, and its preclosing
environmental due diligence review. Prior to Sellers' reimbursement
herein, Buyer shall submit to Sellers copies of all applicable invoices
and proof of Buyer's payment thereof.
13.2 Modification or Amendment. At any time prior to the Closing Date,
the parties hereto may modify or amend this Agreement, by written agreement
executed and delivered by duly authorized officers of the respective parties.
13.3 Waiver of Conditions. The conditions to each of the parties'
obligations to consummate the transaction are for the sole benefit of such party
and may be waived, in writing, by such party in whole or in part to the extent
permitted by applicable law.
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13.4 Counterparts. For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.
13.5 Governing Law.
(a) This Agreement (including the Noncompete Agreement and any
other agreement required to consummate the Transactions) shall be
governed by and construed in accordance with the laws of the State of
Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.
(b) Subject to the dispute resolution provisions of Section
13.13 hereof, the federal or state courts of Dade County, Florida,
shall have exclusive jurisdiction and venue in the litigation of any
disputes or issues herein; and by signing this Agreement, Sellers,
Buyer and the ASIG Entities each hereby submit to such exclusive
jurisdiction and venue.
13.6 Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, or by
facsimile transmission (with a confirming copy sent by overnight courier), as
follows:
If to Sellers:
Viad Corp
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Vice President and General Counsel
Facsimile: 000-000-0000
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If to Buyer or any of the ASIG Entities:
Ranger Aerospace
GSP International Airport
Box 12233
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Chief Executive officer
Facsimile: 000-000-0000
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, P.C.
Xxxxxxx Xxxxxx
Facsimile: 000-000-0000
or to such other persons or addresses as may be designated in writing by the
party to receive such notice.
13.7 Entire Agreement; Assignment. This Agreement and the
Confidentiality Letter, previously executed by Buyer and Xxxxxx Read and Co.
Inc., these documents described herein and in the Schedules hereto, (a)
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all other prior agreements and understandings, both
written and oral, among the parties or any of them with respect to the subject
matter hereof (it being understood that, as of the Closing, Sellers shall have
no right to indemnification from any ASIG Entity, including without limitation
pursuant to the Articles, Bylaws or the organizational document of such ASIG
Entity or any intercompany agreement to which such ASIG Entity is a party, other
than pursuant to the terms of this Agreement), and (b) shall not be assigned by
operation of law or otherwise, provided that Buyer and the ASIG Entities may
freely assign their
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respective rights and obligations hereunder, but no such assignment shall
relieve Buyer or Sellers of its obligations hereunder if such assignee does not
perform such obligations.
13.8 Parties in Interest; Successors and Assigns. This Agreement shall
be binding upon and inure solely to the benefit of each party hereto and their
respective successors and assigns, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any rights,
benefits or remedies of any nature whatsoever, including rights as a third-party
beneficiary, under or by reason of this Agreement.
13.9 Obligation of Sellers. Whenever this Agreement requires any of the
ASIG Entities to take any action on or prior to the Closing, such requirement
shall be deemed to include an undertaking on the part of Sellers to cause such
ASIG Entities to take such action.
13.10 Remedies for Breach.
(a) The parties hereto agree that irreparable damage would
occur if any of the provisions of this Agreement were not performed in
accordance with their terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction
or injunctions or any other equitable relief from a court of competent
jurisdiction to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof, this being in addition to
any other remedy to which they are entitled at law, in equity or under
Section 13.13 hereof.
(b) All remedies provided herein shall, to the extent
permitted by law, be deemed cumulative and not exclusive of any other
thereof, or of any other remedies available to the parties, by judicial
proceeding or otherwise, to enforce the performance or observance of
the covenants or agreements contained herein, and every remedy given
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herein or by law to any party hereto may be exercised from time to time
and as often as shall be deemed expedient, by such party. However,
Sellers and Buyer and their respective successors and assigns
understand and agree that their respective rights to indemnification
hereunder with respect to environmental, health or safety matters shall
constitute their sole recourse against one another and that they shall
have no other right or remedy against one another with regard to any
such matters (including without limitation all matters arising under
CERCLA or any other Environmental Laws) arising from this Agreement or
the transactions contemplated thereby (collectively "Environmental
Matters"). Except for such rights to indemnification hereunder, Sellers
and Buyer and their respective assigns hereby waive and release one
another and their respective officers, directors, employees, agents,
successors and assigns from any and all claims, demands, causes of
action, liabilities, costs or expenses with respect to Environmental
Matters.
13.11 Captions. The section and paragraph captions herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
13.12 Further Assurances. From time-to-time, at the request of either
party hereto and without further consideration, the other party or parties will
execute and deliver to such requesting party such documents and take such other
action (but without incurring any material financial obligation) as such
requesting party may reasonably request in order to consummate more effectively
the transactions contemplated hereby, including without limitation, vesting in
Buyer good and valid title to the Companies' Shares being transferred hereunder.
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13.13 Dispute Resolution. Subject to the provisions of Sections 4.2 and
13.10 hereof with respect to injunction, specific performance and other
equitable relief, any dispute arising under or relating to this Agreement,
including, without limitation, any dispute with respect to any indemnification
claim or purchase price adjustment, will be settled in accordance with the
dispute resolution procedures set forth on Schedule 13.13 hereto.
13.14 Schedules and Exhibits. All Schedules to the Agreement and all
agreements or contracts referenced herein as required for the Transaction are
incorporated by reference and made a part of this Agreement.
13.15 Severability. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
13.16 Binding Effect. The parties have signed this Agreement on the
date hereof on the express understanding and condition that the Schedules hereto
have not been completed, reviewed or agreed upon. The parties expect to finalize
and agree to each of the Schedules hereto no later than 9:00 AM MST on March 20,
1998. If for whatever reason the parties do not agree on the form and content of
each of the Schedules contemplated hereby by such deadline, then either party
may terminate this Agreement without liability by delivering written notice to
the other party hereto at any time prior to the date that the Schedules are
acknowledged to be accepted by each party affixing its signature to the last
page of the Schedules. If and when the parties agree on the
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Schedules hereto, they will memorialize their acceptance thereof and
satisfaction of the condition by affixing their signature to the last page of
the Schedules.
13.17 Exclusivity.
(a) In order to induce Buyer to proceed with the transactions
set forth herein, Sellers agree that so long as Buyer is working in
good faith toward Closing the Transaction, none of the Sellers or their
affiliates may, directly or indirectly, through any officer, director,
employee, agent or otherwise (including through any investment banker,
attorney or accountant retained by any of the foregoing), solicit,
initiate, encourage or discuss (other than to inform a third party that
Sellers and Buyer have entered into a contract that Sellers may not
have further discussions with such third party) any Third-Party
Acquisition Proposal, or furnish to any other person or entity any
information with respect to, or otherwise cooperate in any way with, or
assist or participate in, facilitate or encourage-any effort or attempt
by any other person or entity to do or seek to do any of the foregoing.
Sellers shall immediately cease and cause to be terminated any and all
contacts, discussions and negotiations with third parties regarding any
of the foregoing. This Section 13.17 shall expire and be of no further
force and effect (other than with respect to breaches prior to such
date of expiration) if the Board of Viad does not approve the
Transactions as contemplated by Section 5.2 without further action by
the parties hereto.
(b) In the event that Sellers breach the provisions of this
Section 13.17 and the transactions contemplated hereby are not
consummated, Buyer shall have available all remedies at law or in
equity, it being understood that, without limiting the foregoing,
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Sellers, shall reimburse Buyer for up to $350,000.00 of the
out-of-pocket legal fees and expenses it incurs.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto and shall be effective as
of the date first hereinabove written.
VIAD CORP RANGER AEROSPACE CORPORATION
By: /s/ XXXXX X. XXXXX By: /s/ XXXXXX X. XXXXXXXX
------------------------------------- ---------------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxxx X. Xxxxxxxx
----------------------------------- -------------------------------
Title: Vice President Corp. Development Title: Chairman
---------------------------------- ------------------------------
Date: March 14, 1998 Date: March 13, 1998
----------------------------------- -------------------------------
VIAD SERVICE COMPANIES LIMITED
By: /s/ XXXXX X. XXXXX By: /s/ XXXXXXX X. XXXXXX
------------------------------------- ---------------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxx
----------------------------------- -------------------------------
Title: Director Title: President & CEO
---------------------------------- ------------------------------
Date: March 14, 1998 Date: March 13, 1998
----------------------------------- -------------------------------
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AMENDMENT NO. 1 TO THE SHARE PURCHASE AGREEMENT
This AMENDMENT NO. 1 ("Amendment"), dated as of March 31, 1998, by and
between Viad Corp. a Delaware corporation ("Viad") and Viad Service Companies
Limited, an England limited liability company ("Viad Services" and, together
with Viad, "Sellers") and Ranger Aerospace Corporation, a Delaware corporation
("Buyer"), Aircraft Service International Group Inc., a Delaware corporation
("Assignee"), and ASIG Europe Ltd., an England limited liability company ("UK
Assignee").
Sellers and Buyer entered into a Share Purchase Agreement. dated as of
March 14, 1998 ("Agreement"). pursuant to which Buyer has agreed to acquire from
Sellers the Business, all of which is conducted by those entities comprising
Sellers' Aircraft Service International Group. Sellers and Buyer wish to amend
the Agreement in accordance with the terms of Section 13.2 thereof. Buyer is
also assigning its rights and obligations hereunder to Assignee in accordance
with the terms of Section 13.7 of the Agreement, except that Buyer is assigning
its rights to acquire Aircraft Service Ltd., an England limited liability
company, to UK Assignee. Capitalized terms not otherwise defined in this
Amendment have the meaning given to such terms in the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Net Asset Value Definition.
(a) The definition of "Net Asset Value" in the Agreement is
hereby amended by deleting the parenthetical stating "(including the
amount of all budgeted earnings during the period from 12/31/97 to
3/31/98, and all capital expenditures during such period)" from the
definition.
(b) The definition of "Net Asset Value" in the Agreement is
hereby amended further by inserting after the first "Entities" a
parenthetical stating "(including $3,556,000 of capital expenditures
minus $1,100,000 of depreciation and amortization)".
(c) To give effect to the two amendments in clauses (a) and
(b) above, "Net Asset Value" in the Agreement is hereby amended in its
entirety to read as follows:
Net Asset Value means the value of combined assets of the ASIG
Entities (including $3,556,000 of capital expenditures and
minus $1,100,000 of depreciation and amortization) that are
not Retained Assets as of the Closing minus the combined
liabilities of the ASIG Entities that are not being assumed by
Sellers as Retained Liabilities pursuant to the terms of this
Agreement, excluding amounts of Intercompany, Accounts, all as
determined in accordance with GAAP in the context of Section
4.2 hereof.
101
2. Net Asset Value Adjustment. Section 8.21 of the Agreement is hereby
amended by deleting "US$800,000" in both locations in which that number appears
in this Section and replacing it with "US$250,000" in both locations.
3. Liabilities Under Certain Plans. Section 8.14 of the Agreement is
hereby amended by, deleting the first sentence thereof and replacing it with the
following:
Sellers shall terminate the eligibility of the ASIG Entities under each
plan or arrangement of deferred compensation which covers Personnel,
including the Supplemental Retirement Income Plan ("SERP") and the
deferred compensation plan for such Personnel under the Performance
Unit Plan ("PUP") and the Management Incentive Plan ("MIP") as of the
Closing Date. Sellers shall retain and shall fully, indemnify Buyer and
the ASIG Entities against all liability to participating Personnel of
the ASIG Entities under each plan of deferred compensation which covers
Personnel, including the SERP, PUP and MIP and shall retain, and not
transfer to Buyer or the ASIG Entities any of the assets or amounts, if
any, funding any plan of deferred compensation which covers Personnel,
including the SERP, MIP and PUP.
4. Board Condition. Section 9.3)(d) of the Agreement has been satisfied
and is therefore hereby, deleted. Sections 8.25, 8.26, 10.10) and (1) have been
waived and are therefore hereby deleted.
5. Indemnification.
(a) Section 12.2(a) of the Agreement is hereby amended by
deleting from the first clause thereof the following: "set forth in
Section 6, (representations and warranties concerning the ASIG
Entities)," and replacing that language with the word "in".
(b) Section 12.2(a)(i) is hereby deleted in its entirety and
amended by inserting the following in lieu thereof: "(i) any breach of
any representation or warranty of Indemnifying Parties contained herein
which and to the extent it survives the Closing (pursuant to Section
12.1 hereof), subject to the limitations set forth in such
representation or warranty."
(c) Section 12.2(a) of the Agreement is hereby amended further
by adding at the end of the last sentence the following: "; and (vii)
South Eighth Street Envirorunental Liabilities."
(d) A new Section 12.2(d) is hereby added to the Agreement as
follows: Independent Remedies. To the extent Sellers have assumed
liabilities or obligations or agreed to provide indemnification with
respect to any matters or items in the Agreement (including without
limitation thase matters set forth in Schedule 8.24 attached hereto),
disclosure by Sellers of such liabilities, obligations or matters does
not relieve Sellers of
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responsibility for assuming and/or indemnifying Buyer with respect to
such matters or items; it being understood that the information
disclosed in connection with a representation and warranty is disclosed
solely for purposes of determining whether such representation and
warranty is accurate and complete and does not limit or affect Sellers'
covenants in the Agreement, except to the extent such covenant contains
a specific and express reference to the information disclosed on the
Schedule.
6. Funded Indebtedness. Sellers shall assume and pay when due any debt
for borrowed money of the ASIG Entities, including the note payable in the
amount of approximately $90,000.
7. Assignment. Pursuant to the terms of Section 13.7 of the Agreement,
Buyer has assigned its rights and obligations under the Agreement to Assignee,
except that Buyer has assigned its rights to acquire Aircraft Service Ltd. to UK
Assignee.
8. Employees. Viad shall not commence or pursue any claim against an
employee, officer or director of any ASIG Entity that held such position prior
to the Closing ("Existing Officers") (i) with respect to any matter arising from
or relating to any indemnification claim made by Buyer or any ASIG Entity
against Viad and (ii) with respect to which such Existing Officer is entitled to
indemnification from any ASIG Entity, except that, notwithstanding this
forbearance agreement, Sellers may withhold or recover payment of any sale bonus
payable to an Existing Officer if such Existing Officer has engaged in
fraudulent conduct.
9. Patent. Neither Buyer nor any ASIG Entity shall commence or pursue
any claim against Viad or its affiliates regarding the enforceability of Patent
No. 4,345,146.
10. Allocation of Purchase Price. The purchase price for the Company's
Shares shall be allocated among the Companies as set forth on Schedule I hereto.
11. Vehicle Leases. Buyer will reimburse Viad for the monthly rental
charge under the Agreement of Lease, dated as of January 1, 1984, as amended, by
and between The Greyhound Corporation and PHH Leasing Inc. and the Fleet
Management Agreement, dated as of September 18, 1991, by and between The Dial
Corp and United States Fleeting Leasing for the vehicles disclosed on Schedule
II as being subject to such Lease in amounts not greater than the amount set
forth on such Schedule, until such time as Viad obtains the consent of "Lessor"
thereunder to assign to Buyer the lease with respect to such Vehicles without
any conditions or changes adverse to Buyer or the ASIG Entities through and
until December 31, 1998.
12. Cash Adjustment. On the Closing Date, the ASIG Entities are
obligated to have a minimum amount of cash on hand as of the Closing (and
Sellers are obligated to contribute any shortfall in such amount), as described
in Sections 3.2, 8.15 and 8.17 ("Required Cash"). In conjunction with the
preparation and delivery of the Net Asset Report and Net Working Capital Report
pursuant to Section 4.1 and Section 4.2. Buyer and deliver to Sellers a draft
statement reporting the cash held by the ASIG Entities as of the Closing Date
and the amount of Required
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Cash on hand at the ASIG Entities as of the Closing Date ("Cash Statement").
Sellers may review the books and records of all the ASIG Entities with respect
to the preparation of the draft Cash Statement during normal business hours in
conjunction with Sellers' review of Buyer's draft Net Assets Report and the
draft Net Working Capital Report as contemplated by Section 4.2(a) of the
Agreement. No later than 30 days following receipt of the draft Cash Statement,
Sellers shall advise Buyer that Sellers either (i) agree with the Cash Statement
or (ii) have proposed modifications to the draft Cash Statement, but only on the
basis that the determination of Required Cash on hand at the ASIG Entities as of
the Closing Date was not in conformity with the requirements of Sections 8.15
and/or 8.17. If Sellers agree with the draft Cash Statement, such statement
shall be deemed to be final for purposes of the Agreement. If Sellers do not
agree with the draft Cash Statement, Sellers shall provide written notice to
Buyer setting forth the basis for the disagreement and during the 15 days
thereafter Sellers shall provide Buyer access to Sellers accountants,
independent auditors and the related work papers for Buyer to review the basis
of such disagreement. If after the end of such 15 day, period the parties have
not reached agreement on the Cash Statement, the disagreement between the
parties shall be resolved in accordance with the process set forth in Section
4.2(c) of the Agreement. Upon final determination of the Cash Statement, (x) if
there was less cash in the ASIG Entities' possession on the Closing Date than
the Required Cash, then Sellers shall promptly pay in cash to Buyer the amount
of the shortfall from such Required Cash or (y) if there was more cash in the
ASIG Entities' possession on the Closing Date than the Required Cash, then the
Buyer shall promptly pay in cash to Sellers the amount of such excess over the
Required Cash (or offset such amount against amounts due to Buyer under Section
4.3 of the Agreement). The foregoing provision applies only to the determination
of Required Cash as of the Closing Date and not to the determination of Net
Asset Value or Net Working Capital.
13. Purchase Price Adjustment. The terms of Section 9.2(b) of the
Agreement require Sellers to deliver prior to the Closing Date all material
consents required in connection with the purchase and sale of the Companies
Shares. Such material consents have not been obtained and delivered as of the
Closing Date, but Sellers have requested that Buyer nonetheless consummate the
Transactions contemplated hereby. As contemplated by Section 8.8 of the
Agreement, Buyer has proposed and Seller hereby agrees to the following
arrangement which is intended to provide Buyer and the ASIG Entities with the
full benefit of the Transactions.
(a) With respect to each contract, Permit, lease or license
for which the consent of a Third Party is required in connection with
the change of ownership of the Companies' Shares or the consummation of
the Transactions or right of first refusal for which a waiver is
required ("Required Consents"):
(i) if Buyer determines in its sole and absolute
discretion (based on an action or an official communication
from the Governmental Authority or third party from whom such
consent is required) that a Required Consent will not be
obtained without conditions or modifications adverse to the
Business and Buyer's and/or an ASIG Entities' Adjusted EBITDA
(as defined below) with respect to operations
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under such contract, Permit, lease or licensee would be
reduced by more than a de minimis amount, Sellers shall pay to
Buyer and/or the ASIG Entity affected by Sellers' failure to
deliver an abovementioned consent or to obtain such waiver, an
amount equal to the product of (I) 8.5 multiplied by (II) the
sum of (A) earnings before interest, taxes, depreciation,
amortization or other non-cash charges ("EBITDA"), arising
from the operations relating to such contract, Permit, lease
or license, and before allocation of any overhead expenses of
Viad with respect to the operation relating to such contract,
Permit, lease or license ("Adjusted EBITDA") for the twelve
month period ending on March 31, 1998 ("Location Adjusted
EBITDA"), plus (B) the product of (x) the combined S, G & A
expense of the ASIG Entities for the twelve month period
ending on March 31, 1998 multiplied by (y) a fraction, the
numerator of which is the Location Adjusted EBITDA and the
denominator of which is the combined EBITDA of the ASIG
Entities during the 12 month period ending on March 31, 1998
(the "Lost Contract Adjustment Amount").
8.5 x (Location Adjusted EBITDA + ((Combined S, G & A x Location Adjusted EBITDA))
------------------------
Combined EBITDA)
(ii) The Lost Contract Adjustment Amount shall be
reduced by any amounts actually received by Buyer or the ASIG
Entity with respect to any right of first refusal that was
exercised by the party holding such rights. However, the Lost
Contract Adjustment Amount shall not be reduced by any
earnings received by Buyer or such ASIG Entity after the
Closing Date.
(b) When Buyer or the affected ASIG Entity determines in its
sole and absolute discretion (based on an action or an official
communication from the Governmental Authority or third party from whom
such consent is required and which determination may occur before all
remedies are exhausted) that a Required Consent will not be delivered,
then Buyer and/or the affected ASIG Entity shall deliver to Viad a
written notice stating that it has determined that the Required Consent
will not be delivered and setting forth Buyer's or such ASIG Entity's
determination of the Lost Contract Adjustment Amount. Seller shall
promptly (within 5 days after receipt of such notice) pay all amounts
due hereunder and hereby agrees not to challenge on any basis
whatsoever its obligation to promptly pay to Buyer or the ASIG Entities
the Lost Contract Adjustment Amount hereunder, it being understood that
the Lost Contract Adjustment Amount reflects the methodology by which
the parties would have reduced the Purchase Price in advance of Closing
if the parties had notice on the Closing Date that such consent would
not be delivered. Notwithstanding the foregoing, Sellers may dispute
mechanical mathematical errors in the determination of the Lost
Contract Adjustment Amount within 5 days of receipt of the notice
contemplated by this Section (b), it being understood that mechanical
mathematical errors are the sole permitted basis for any dispute. If
Buyer does not agree with Seller's objection to the mathematical
determination, the dispute between the parties shall be resolved in
accordance with the dispute resolution process set forth in Section
4.2(c) of the Agreement. If it is later
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finally determined through an appeal process that the Required Consent
was wrongfully withheld and Buyer or the affected ASIG Entity's rights
are restored under the contract, Permit, lease or license at issue,
Buyer shall reimburse Viad for the excess Lost Contract Adjustment
Amount that Buyer has received relating to the Adjusted EBITDA that
Buyer subsequently receives with respect to such operation. Buyer's or
such ASIG Entity's obligation to make the reimbursement to Viad
pursuant to the foregoing sentence shall terminate upon the earlier of
the date (1) on which operations cease under such contract Permit,
lease or license as a result of the failure to obtain such Required
Consent or (ii) the appeals process with respect to the rejection of
such Required Consent is exhausted. In furtherance of the foregoing, if
Seller pays any amounts under Section 12.2(b)(v) or the Lost Contract
Adjustment Amount to Buyer or any ASIG Entity, it is understood that
Seller is subrogated to Buyer's or the affected ASIG Entity's right to
money damages for any wrongful termination or wrongful withholding of
consent by any Governmental Authority or owner or entity failing to
grant such Required Consent. Any amounts paid by Sellers hereunder
shall be deemed to be a reduction of the Purchase Price hereunder.
(c) Sellers shall continue to use their respective best
efforts at their sole cost and expense after the Closing to obtain and
deliver all Required Consents in connection with the purchase and sale
of the Companies Shares that have not been delivered prior to the date
hereof. Buyer and the ASIG Entities shall continue to cooperate with
Sellers to obtain and deliver all Required Consents.
14. Consent Indemnification. In consideration of Buyer's willingness to
consummate the Transactions prior to receipt of the required consents, Section
12.2(b) of the Agreement is hereby amended by the addition of a new section (v)
thereof as follows:
(v) In addition to, and without limiting the right to the Lost
Contract Adjustment, Sellers hereby agree to fully indemnify Buyer and
the ASIG Entities against, and shall promptly pay to Buyer and/or the
ASIG Entities any and all costs, Losses or damages (including
reasonable attorney's fees incurred in connection with enforcing the
terms hereof) incurred by Buyer or any ASIG Entity arising from or
relating to the failure to obtain a Required Consent (without
conditions or modifications adverse to the Business) with respect to
any operating permit, license, lease, or waiver of first refusal right,
necessary for Buyer's or any ASIG Entity's continued operations at any
location where it is currently operating, except that Buyer or any ASIG
Entity shall not be entitled to any indemnification under this sentence
to the extent such amount exceeds 20% of the Lost Contract Adjustment
Amount as reduced pursuant to Section 13(a)(ii) of this Amendment No.
1. It is understood by the parties hereto that this Section 12.2(b)(v)
is the sole remedy with respect to Sellers' failure to obtain such
consent or waiver.
15. Full Force and Effect. Other than as modified in accordance with
the foregoing provisions, the remaining terms of the Agreement remain in full
force and effect.
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16. Counterparts. For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.
17. References to Buyer. All references to Buyer herein shall be deemed
to refer as well to Assignee and UK Assignee.
* * * *
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto and shall be effective as
of the date first hereinabove written.
VIAD CORP RANGER AEROSPACE CORPORATION
By: /s/ XXXXX X. XXXXX By: /s/ XXXXXXX X. XXXXXX
------------------------------------- ---------------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxx
----------------------------------- -------------------------------
Title: Vice President Corp. Development Title: President & CEO
---------------------------------- ------------------------------
Date: March 31, 1998 Date: March 31, 1998
----------------------------------- -------------------------------
VIAD SERVICE COMPANIES LIMITED ASIG EUROPE, LTD.
By: /s/ XXXXX X. XXXXX By: /s/ XXXXXXX X. XXXXXX
------------------------------------- ---------------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxx
----------------------------------- -------------------------------
Title: Vice President Corp. Development Title: Chief Executive Officer
---------------------------------- ------------------------------
Date: March 31, 1998 Date: March 31, 1998
----------------------------------- -------------------------------
AIRCRAFT SERVICE INTERNATIONAL
GROUP, INC.
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------
Title: President
----------------------------------
Date: March 31, 1998
-----------------------------------
8
