MEMBERSHIP INTEREST PURCHASE AGREEMENT (STEWART)
Confidential
(XXXXXXX)
THIS
MEMBERSHIP INTEREST PURCHASE AGREEMENT (together with the exhibits and schedules
hereto, this “Agreement”)
is
entered into as of December 21, 2006 (the “Effective
Date”),
by
and between XXXXX X. XXXXX, a resident of the State of California (“Seller”),
and
MACQUARIE FBO HOLDINGS LLC, a Delaware limited liability company (“Buyer”).
Unless otherwise defined in the Agreement, capitalized terms used in this
Agreement are defined in Exhibit “A.”
RECITALS
A. Seller
owns all of the equity interests, including any and all rights to acquire any
such equity interests (collectively, the “Membership
Interests”),
of
Supermarine of Xxxxxxx, LLC, a Delaware limited liability company (the
“Company”).
B. The
Company owns and operates a fixed base operation at Xxxxxxx International
Airport located in New Windsor, New York (the “Facility”).
The
business operations relating to the Facility are hereinafter referred to as
the
“Business.”
C. Seller
is
the Chairman and Chief Executive Officer of American Airports Corporation,
a
California corporation (“AAC”).
D. Buyer
desires to acquire from Seller, and Seller desires to sell and transfer to
Buyer, all of the Membership Interests on the terms and subject to the
conditions set forth herein.
E. Contemporaneously
with the execution and delivery of this Agreement, Buyer, Seller, Xxxxxx X.
Xxxxx-Xxx Xxxxx, a resident of the State of California, and Supermarine
Aviation, Ltd., a California corporation, have entered into a separate agreement
(the “Santa
Xxxxxx Purchase Agreement”),
pursuant to which Buyer has the right to acquire a fixed base operation owned
by
Seller, Xxxxxx X. Xxxxx-Xxx Xxxxx and Supermarine Aviation, Ltd. at the Santa
Xxxxxx Municipal Airport located in Santa Monica, California.
AGREEMENT
THEREFORE,
in consideration of the foregoing and the mutual agreements and covenants set
forth below, the Parties hereby agree as follows:
ARTICLE
1
PURCHASE
AND SALE OF MEMBERSHIP INTERESTS
1.1 Acquisition.
Subject
to the terms and conditions of this Agreement, Buyer agrees to purchase, and
Seller agrees to sell, convey, assign, transfer and deliver to Buyer, the
Membership Interests, free and clear of all Encumbrances, on the Closing Date.
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1.2 Assignment
of Membership Interests.
The
sale and transfer of the Membership Interests will be effected by delivery
by
Seller to Buyer of an Assignment of Limited Liability Company Membership
Interests in the form attached hereto as Exhibit
“B.”
ARTICLE
2
PURCHASE
PRICE; OTHER CONSIDERATION
2.1 Purchase
Price.
Subject
to adjustment as set forth in Section
2.2
below,
the aggregate amount to be paid by Buyer at the Closing in consideration for
the
Membership Interests shall be Nineteen Million Dollars ($19,000,000) (the
“Purchase
Price”).
The
amount of Two Hundred Fifty Thousand Dollars ($250,000) (the “Escrow
Funds”)
shall
be delivered to an escrow account with the Escrow Agent, to be held by the
Escrow Agent for a period of one (1) year from the Closing Date, pursuant
to the terms of an escrow agreement substantially in the form attached hereto
as
Exhibit
“C” (the
“Escrow
Agreement”)
and
the balance of the Purchase Price (the “Closing
Funds”)
shall
be delivered to Seller or, at Seller’s direction, to any third parties in
satisfaction of Funded Indebtedness.
2.2 Adjustment
to Purchase Price.
(a) The
Purchase Price shall be subject to adjustment pursuant to this Section
2.2,
with
such adjustment being referred to as the “Closing
Net Working Capital Adjustment.”
The
Closing Net Working Capital Adjustment shall be the positive or negative amount
by which the Closing Net Working Capital (as defined below) differs from One
Dollar ($1.00) (the “Target
Closing Net Working Capital”),
provided, however, no adjustment shall be made unless such difference is more
than Twenty-Five Thousand Dollars ($25,000). If the Closing Net Working Capital
exceeds the Target Closing Net Working Capital, then the Closing Net Working
Capital Adjustment shall be positive; and if the Closing Net Working Capital
is
less than the Target Closing Net Working Capital, then the Closing Net Working
Capital Adjustment shall be negative. Seller shall estimate in good faith the
Closing Net Working Capital, as of the Closing, and deliver such estimate,
together with an unaudited balance sheet of the Company as of the Closing Date
(prepared in a manner consistent with and using all of the same accounting
principles, practices, methodologies and policies used in the preparation of
the
“Unaudited 2006 Statements” (defined below) and the example set forth on
Schedule
2.2(a)
(the
“Accounting
Principles”))
to
Buyer no later than two (2) Business Days before the Closing Date. If the
difference between such estimate and the Target Closing Net Working Capital
is
more than Twenty-Five Thousand Dollars ($25,000), then the full amount of such
difference shall be added to or deducted from, as the case may be, the Closing
Funds. Any such adjustment is referred to herein as the “Estimated
Net Working Capital Adjustment.”
The
Closing Net Working Capital shall be finally determined in accordance with
Section
2.2(b) and (e).
(b) Promptly
after the Closing, Seller shall cause to be prepared a balance sheet of the
Company as of the Closing Date (the “Closing
Date Balance Sheet”).
The
Closing Date Balance Sheet shall be prepared in accordance with the Accounting
Principles. The
Parties acknowledge that the sole purpose for determining Closing Net Working
Capital is to adjust the Purchase Price so as to reflect the difference, if
any,
between the actual net working capital of the Company as of the Closing Date
and
the Target Closing
Net Working Capital.
For
purposes of this Agreement, “Closing
Net Working Capital”
shall
mean the
Company’s current assets minus current liabilities, calculated in a manner
consistent with and using all of the Accounting Principles, as of the Effective
Time. On
the
Closing Date, the Company shall have a cash balance of at least One Hundred
Thousand Dollars ($100,000). Subject to the requirements of the previous
sentence, nothing contained in this Agreement, including the provisions of
Article 2
and
Article 5,
shall
prohibit Company from distributing cash on hand from time to time from and
after
the date hereof to Closing.
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(c) Seller
shall provide to Buyer, within sixty (60) days after Closing, (i) a copy of
the
Closing Date Balance Sheet, and (ii) a calculation of (A) the actual Closing
Net
Working Capital Adjustment (“Actual
Net Working Capital Adjustment”);
(B)
the amount, if any, by which the Estimated Net Working Capital Adjustment is
less than the Actual Net Working Capital Adjustment (an “Adjustment
in Favor of Seller”);
and
(C) the amount, if any, by which the Estimated Net Working Capital Adjustment
is
greater than the Actual Net Working Capital Adjustment (an “Adjustment
in Favor of Buyer”)
(such
materials, the “Seller
Adjustment Notice”).
(d) Seller
shall allow Buyer and his representatives access at all reasonable times to
the
Company’s personnel, properties, books and records, schedules and calculations
relating to the Closing Date Balance Sheet and the Actual Net Working Capital
Adjustment for the purpose of reviewing the Seller Adjustment Notice and the
Closing Date Balance Sheet and confirming the accuracy of the preparation
thereof. In the event that Buyer provides notice (“Buyer
Objection Notice”)
to
Seller no later than sixty (60) days after receipt of the Seller Adjustment
Notice that Buyer disputes Seller’s determination of the Actual Net Working
Capital Adjustment, the Adjustment in Favor of Seller or the Adjustment in
Favor
of Buyer, Seller and Buyer shall then meet and negotiate in good faith to
resolve such dispute, such negotiation to begin as soon as practicable (but
in
any case, no later than thirty (30) days) after Seller’s receipt of the Buyer
Objection Notice; provided, that, either (i) Buyer shall promptly pay any amount
of an Adjustment in Favor of Seller that is not in dispute, or (ii) Seller
shall
promptly pay any amount of an Adjustment in Favor of Buyer that is not in
dispute.
(e) In
the
event that Buyer and Seller are not able to resolve such dispute within
forty-five (45) days after the date on which Buyer provides Seller with the
Buyer Objection Notice, then either Seller or Buyer may refer the issues in
dispute to a neutral mutually acceptable independent accounting firm for
resolution (the “Referee”).
The
decision of such issues by the Referee shall be final and binding on the
Parties. The Parties shall submit their positions on the dispute to the Referee
within thirty (30) days after referral, and shall direct the Referee to decide
the dispute within fifteen (15) days after submission to it. The fees and
expenses of the Referee shall be paid one-half by Buyer and one-half by Seller.
Buyer and Seller shall direct the Referee to promptly provide invoices of all
such fees and expenses directly to Seller and Buyer.
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(f) After
final determination, either (i) Buyer shall pay to Seller the amount of any
Adjustment in Favor of Seller, or (ii) Seller shall pay to Buyer any Adjustment
in Favor of Buyer. Any such payment is hereinafter referred to as the
“Final
Payment.”
(g) Any
Final
Payment shall be made by wire transfer of immediately available funds within
three (3) Business Days after its final determination in accordance with this
Section
2.2
to
account(s) specified by Buyer and Seller to receive the Final Payment; provided,
however, that neither Buyer nor Seller shall be required to make any payment
by
wire transfer in an amount less than One Hundred Thousand Dollars ($100,000)
and
may issue a check written against immediately available funds in lieu of a
wire
transfer for such payment.
2.3 Withholding.
Buyer
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of Membership
Interests such
amounts as Buyer or its agent are required to deduct and withhold under the
Code, or any provision of state, local, provincial or foreign Tax Law, or
pursuant to other applicable judgments, decrees, injunctions or orders, with
respect to the making of such payment. To the extent that amounts are so
withheld by Buyer or its agent,
and are
paid to the appropriate governmental authority,
such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of Membership Interests in respect of whom such
deduction and withholding was made by Buyer or its agent.
2.4 Transaction
Taxes.
Each
party shall pay all transfer, registration, stamp, documentary, recording and
similar taxes, if any, that become due and payable by such party under
applicable Laws in connection with the transactions contemplated by this
Agreement, including the assignment or transfer of the Membership Interests
for
the Purchase Price, and each party shall, at his or its own expense,
file
all
necessary Tax Returns and other documentation with respect to all such Taxes
and
fees and, if required by applicable Law, each other party will execute and
deliver, and will cause its Affiliates to join in the execution and delivery
of,
any such Tax Returns and other documentation.
ARTICLE
3
SELLER’S
REPRESENTATIONS AND WARRANTIES
For
the
purposes of this Agreement, the phrase “to
the best of Seller’s knowledge”
or
words of similar import shall mean the actual knowledge of the individuals
listed on Exhibit
“D”
hereto
as well as the knowledge of any of such individuals with respect to a particular
matter if a prudent individual would be expected to discover or otherwise become
aware of it after reasonable inquiry. Subject to the foregoing and as an
inducement to Buyer to enter into this Agreement, Seller represents and warrants
to Buyer that as of the date hereof and as of the Closing:
3.1 Organization.
The
Company is a limited liability company duly organized or formed, validly
existing and in good standing under the Laws of the State of Delaware. The
Company does not have any Subsidiaries.
The
Company has all requisite power and authority to own and operate the Business
as
conducted as of the date hereof, and to own, operate and lease the properties
and assets owned, operated or leased by the Company and used in the Business.
The Company is not required to be licensed or qualified to do business in any
jurisdictions other than the States of Delaware and New York. Attached to
Schedule
3.1(i)
are
complete and correct copies of the Charter Documents for the Company as
currently in effect. The officers and directors of the Company are listed on
Schedule
3.1(ii).
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3.2 Power
and Authority.
Seller
has full power and authority to own the Membership Interests, to execute and
deliver this Agreement and the Transaction Documents and to perform his
obligations hereunder or thereunder.
3.3 Authorization;
No Breach.
The
execution, delivery and performance of this Agreement has been, and the
execution, delivery and performance of the Transaction Documents to which Seller
is a party as of the Closing will have been, duly and validly authorized by
Seller, and this Agreement constitutes, and each of the Transaction Documents
to
which Seller is a party as of the Closing will constitute, a valid and binding
obligation of Seller, enforceable against Seller in accordance with their
respective terms (except as may be limited by bankruptcy, insolvency,
reorganization and other similar laws and equitable principles relating to
or
limiting creditors’ rights generally). The execution, delivery and performance
of this Agreement and the Transaction Documents, and the consummation of the
transactions hereunder and thereunder, will not, except as set forth on
Schedule
3.3(a),
(a) violate, conflict with, result in a breach or constitute a default, or
give rise to any right of amendment, termination, cancellation or acceleration
(with or without due notice or lapse of time, or both), under the Company’s
Charter Documents, any Law to which Seller is subject or any agreement to which
the Company is a party or to which it or its assets are otherwise bound
(including the Material Contracts), or (b) require any authorization,
notice, consent or approval of, or action or filing with, any
Person.
Except
as set forth on Schedule 3.3(b),
no
consent, approval, order or authorization of or registration, declaration,
notice or filing with or exemption by any court, administrative agency or
commission or other governmental authority or instrumentality, whether local,
domestic or foreign is required by or with respect to Seller or the Company
in
connection with the execution and delivery of this Agreement and the Transaction
Documents by Seller, or the consummation of the transactions contemplated hereby
or thereby.
3.4 Absence
of Undisclosed Liabilities.
(a) Other
than as disclosed on the Liabilities Schedule, Schedule
3.4(a),
the
Company does not have any liabilities or obligations of any nature whatsoever,
whether accrued or absolute, contingent or otherwise, and whether due or to
become due, except (i) liabilities and obligations that arise in the
ordinary course of business, consistent with past practices, under contracts
described on the Leases Schedule and the Contracts Schedule and under contracts
not required to be described on the Contracts Schedule (other than through
any
breach or default by the Company), (ii) liabilities and obligations
reflected in the Financial Statements, and (iii) liabilities and
obligations of the Company that have arisen after the date of the Financial
Statements in the ordinary course of business, consistent with past practices
(other than through any breach or default by the Company) that do not exceed
Fifty Thousand Dollars ($50,000) in the aggregate.
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(b) Except
as
set forth on Schedule
3.4(b),
the
Company does not have any Funded Indebtedness. As of the Closing Date, the
Company will not owe money to any other party pursuant to a loan agreement
or
promissory note or otherwise have any Funded Indebtedness.
3.5 Capitalization
of the Company; Title to Membership Interests.
(a) Seller
is
the unconditional and sole legal, beneficial, record and equitable owner of
the
Membership Interests, and has full power and authority to sell and transfer
the
Membership Interests free and clear of all Encumbrances.
(b) The
Membership Interests constitute all of the issued and outstanding equity in
the
Company. All such Membership Interests are duly authorized, validly issued,
fully paid and non-assessable, were issued in conformity with applicable Laws
and are free and clear of all Encumbrances.
(c) There
are
no outstanding warrants, options, rights, other securities, agreements,
subscriptions, or other commitments, arrangements or undertakings pursuant
to
which the Company, Seller or any other Person is or may become obligated to
issue, deliver or sell, or cause to be issued, delivered or sold, any additional
membership interests or other securities of the Company.
3.6 Financial
Statements.
(a) Attached
to Schedule
3.6(a)
hereto
are the (a) unaudited financial statements for the Company for the year ended
December 31, 2005 (the “Unaudited
2005 Statements”),
and
(b) unaudited financial statements for the Company for the nine (9)-month period
ended September 30, 2006 (the “Unaudited
2006 Statements”
and
collectively with the Unaudited 2005 Statements, the “Unaudited
Financial Statements”).
The
Unaudited Financial Statements have been prepared in accordance with the books
and records of the Company and consistent with past practices. The Unaudited
Financial Statements fairly present the financial condition and results of
operation of the Business for the period ended December 31, 2005 and for the
nine (9)-month period ending September 30, 2006, as the case may be.
(b) On
or
prior to Closing, Seller will have delivered to Buyer (i) combined financial
statements for the Company and its affiliates that are parties to the Santa
Xxxxxx Purchase Agreement, audited by Lesley, Thomas, Xxxxxxx & Xxxxxx,
Inc., for the period ended December 31, 2005 (the “Audited
Statements”),
and
(ii) unaudited financial statements for the Company for each month-end that
has
occurred since, or will occur after, September 30, 2006, and prior to the
Closing Date (the “Interim
Unaudited Statements”
and
collectively with the Unaudited Financial Statements and the Audited Statements,
the “Financial
Statements”).
The
Audited Statements and the Interim Unaudited Statements will be prepared in
accordance with the books and records of the Company and consistent with past
practices. The Audited Statements will have been prepared in accordance with
GAAP consistently applied throughout the period involved and fairly present
the
financial condition and results of operation of the Business for the period
ended December 31, 2005. The Interim Unaudited Statements will fairly present
the financial condition and results of operation of the Business for the period
then ending. The Audited Statements and the Interim Unaudited Statements will
be
attached to Schedule
3.6(b)(ii)
hereto.
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(c) Except
as
set forth on Schedule 3.6(c),
the
Company’s accounts receivable arose, and all accounts receivable that will be
outstanding as of the Closing Date shall have arisen, from bona fide
transactions in the ordinary course of business. The reserves for accounts
receivables set forth in the Financial Statements have been established
consistently with the Company’s historical accounting practices.
3.7 Absence
of Certain Changes or Events.
Since
December 31, 2005, and except as disclosed in Schedule
3.7,
the
Business has been operated in the ordinary course and there has not been
any:
(a) sale,
assignment or transfer, other than in the ordinary course of business and
consistent with past practices, of any assets of the Company;
(b) acquisition
by merger, consolidation with, purchase of substantially all of the assets
or
capital stock of, or any other acquisition of any material assets or business
of, any corporation, partnership, association or other business organization
or
division thereof;
(c) change
in
accounting methods or practices by the Company;
(d) termination
of, or any amendment or modification to, any Material Contract or Permit, in
any
case that is adverse in any material respect to the Company, or entry into
any
material borrowing, capital contribution or capital financing
transaction;
(e) increase
in salary, bonuses or other compensation payable or to become payable to any
officer or employee of the Company, except in the ordinary course of business,
consistent with past practices, and the Company has not (i) entered into any
Benefit Plan or Benefit Agreement, employment, severance, or other agreements
relating to compensation or fringe benefits, (ii) adopted or changed any
existing Benefit Plan or Benefit Arrangement or (iii) advanced or loaned any
money to any officer or employee of the Company;
(f) strike,
walkout, labor trouble or threat thereof, or any other new or continued event,
development or condition of any character with respect to the employees engaged
in the Business which has affected or could reasonably be expected to affect
materially and adversely the Business;
(g) cancellation
or waiver of any right material to the operation of the Business or any
cancellation or waiver of any debts or claims of substantial value or any
cancellation or waiver of any debts or claims against any officer, manager
or
employee of the Company;
-7-
(h) payment,
discharge or satisfaction of any liability or obligation (whether accrued,
absolute, contingent or otherwise), other than the scheduled payment, discharge
or satisfaction, in the ordinary course of business, of liabilities or
obligations shown or reflected on the Financial Statements or incurred in the
ordinary course of business since December 31, 2005;
(i) deferral
of any capital expenditure or capital improvements that is reasonably required
for the operation of the Business;
(j) adverse
change, or, to the best of Seller’s knowledge, threat of any adverse change, in
the Company’s relations with, or any loss, or, to the best of Seller’s
knowledge, threat of loss of, the Company’s landlords, suppliers, clients or
customers which, individually or in the aggregate, has been or could reasonably
be expected to be materially adverse to the Company;
(k) write-offs
as uncollectible of any notes owed to the Company or accounts receivable of
the
Company or write-downs of the value of any asset or inventory by the Company
other than in immaterial amounts or in the ordinary course of business
consistent with past practice and at a rate no greater than the rate applicable
during the twelve (12) months ended on December 31, 2005;
(l) creation,
incurrence, assumption or guarantee by the Company of any material obligations
or liabilities (whether absolute, accrued, contingent or otherwise and whether
due or to become due), except in the ordinary course of business, or any
creation, incurrence, assumption or guarantee by the Company of any indebtedness
for borrowed money;
(m) any
damage, destruction or loss that has affected, or could reasonably be expected
to affect, materially and adversely the Facility or the Business;
(n) any
agreement by the Company or Seller to do any of the foregoing; or
(o) event
or
condition that has had, or could reasonably be expected to have, material
adverse effect on (a) the business, assets, operations, financial condition
or liabilities of the Company or the Business, taken as a whole; (b) the
ability of Seller to perform any of its material obligations under any of the
Transaction Documents; (c) the rights and remedies of Buyer under this
Agreement, the other Transaction Documents or any related document, instrument
or agreement; or (d) the validity of any of the Transaction
Documents.
3.8 Real
Property; Personal Property.
(a) The
Leases Schedule, Schedule
3.8(a)(i),
lists
all oral or written leases, including the Ground Lease, subleases, licenses,
concession agreements or other use or occupancy agreements pursuant to which
the
Company leases to or from any other party any real property, including all
renewals, extensions, modifications or supplements to any of the foregoing
or
substitutions for any of the foregoing (each a “Lease”
and
collectively, the “Leases”).
The
Leases are in full force and effect, have not been modified, supplemented,
amended or assigned, and are enforceable by and against the Company and all
other parties thereto for the periods (terms) listed on Schedule
3.8(a)(i).
Seller
has delivered to Buyer complete and accurate copies of each of the Leases
(including all amendments, supplements and material correspondence related
thereto). A complete and accurate copy of the Ground Lease is attached to
Schedule
3.8(a)(ii)
hereto.
Neither Seller nor the Company has (i) received any notice that the Company
is
in default under, or not in compliance with any material provision of, any
Lease, that the Company may be subject to any special assessments or that there
may be any material changes in property tax or land use law affecting any such
Leases, or (ii) delivered any notice to another party alleging any default
under, or failure to comply with any material provision of, any Lease. To the
best of Seller’s knowledge, no event has occurred that, with notice, the passage
of time or both, would constitute a default by the Company under, or failure
of
the Company to comply with a material provision of, any of the Leases, or
otherwise give any party a right of termination or modification thereof. The
Company has timely prepared and, as applicable, filed with the proper third
parties, all material statements and reports as required by the Leases, and
each
such statement or report is correct in all material respects.
The
Company does not own any fee interest in any real property.
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(b)
(i) Neither
Seller nor the Company has received notice of any threatened condemnation
proceedings, lawsuits or administrative actions relating to any of the real
property used in the Business or any other matters which do or could reasonably
be expected to adversely affect the current use, occupancy or value thereof,
and
there an no pending or, to the best of Seller’s knowledge, threatened
condemnation proceedings, lawsuits or administrative actions relating to any
of
the real property used in the Business or any other matters which do or could
reasonably be expected to adversely affect the current use, occupancy or value
thereof.
(ii) To
the
best of Seller’s knowledge, all facilities, buildings, improvements and other
structures used in the Business are located on the real property. All present
uses and operations of such real property and the structures by the Company
comply in all material respects with all applicable zoning, land-use, building,
fire, labor, safety, subdivision and other governmental requirements and all
deed or other title covenants or restrictions applicable thereto. Neither Seller
nor the Company has received any notice or report that any of the leased real
property or any of the structures used in the Business, or the use, occupancy
or
operation thereof by Seller or the Company, violate any governmental
requirements or deed or other title, covenants or restrictions.
(iii) The
Company has obtained all approvals of governmental authorities (including
certificates of use and occupancy, licenses and permits) required in connection
with the construction, ownership, use, occupation and operation of the leased
real property and the structures thereon used in the Business, and all equipment
owned or used by the Company. Neither Seller nor the Company has received notice
that any of the leased real property or any of the structures thereon used
in
the Business is dependent upon or benefit from any “non-conforming use” or
similar zoning classification.
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(iv) Other
than in the ordinary course of business, there are no parties other than the
Company in possession of any of the leased real property or any portion thereof,
and, other than in the ordinary course of business, there are no leases,
subleases, licenses, concessions or other agreements, written or oral, granting
to any party or parties the right of use or occupancy of any of the leased
real
property or any portion thereof.
(v) The
legal
descriptions for the real property contained in the Leases adequately describe
the leased real property subject thereto. All structures on the leased real
property are located within the boundary lines of the leased real property
and
no structures, facilities or other improvements on any parcel adjacent to any
of
the leased real property encroach onto any of the leased real property. All
structural, mechanical and other physical systems related to the leased real
property are in good operating condition and repair, reasonable wear and tear
excepted, in all material respects.
(vi) Seller
has delivered true, complete and correct copies of any and all geotechnical,
mechanical, architectural or similar reports, or other documents possessed
by or
in the control of Seller or the Company pertaining to the structural, mechanical
and other physical systems related to the leased real property. Except for
such
reports or documents, there has been no investigation, study, audit, test,
review or other analysis (other than environmental reports described in Section
3.16) conducted by, for, or provided to Seller or the Company in relation to
the
Business; and
(vii) Except
as
set forth on Schedule
3.8(b)(vii),
the
Company is not subject to or bound by any obligation or commitment (written
or
oral) to make any capital expenditures that exceed One Hundred Thousand Dollars
($100,000) individually or in the aggregate.
(c) Attached
hereto as Schedule
3.8(c)
is a
complete and accurate list of all furniture, equipment, leasehold improvements,
motor vehicles and all other tangible personal property owned or leased by
the
Company that the Company has reflected in its books and records in accordance
with generally accepted accounting principles (the “Personal
Property”).
(d) The
Company has good title to its Personal Property, free and clear of any
Encumbrances except as set forth on Schedule
3.8(d)(i).
The
Company has valid titles and registrations for each motor vehicle included
in
the Personal Property, copies of which have been delivered to Buyer. Except
as
set forth on Schedule
3.8(d)(ii),
the
Company owns or leases from unrelated third parties all assets and properties,
and has all operational capabilities, that are used in or necessary to the
operation of the Business.
3.9 Tax
Matters.
(a) The
Company has filed (or had filed on its behalf) all Tax Returns required to
have
been filed by it or with respect to it in
the
manner prescribed by applicable laws. All such Tax Returns were true, correct
and complete in all respects. The Company has timely paid in full (or had timely
paid in full on its behalf) all Taxes required to have been paid by it or with
respect to it, or which could affect Seller’s ability to consummate the
transaction contemplated hereby, whether or not shown as due on such Tax
Returns. With respect to the Company, neither Seller nor the Company has
received notice of any claim made by a governmental authority in a jurisdiction
where the Company does not file Tax Returns that it is or may be subject to
taxation by that jurisdiction. Except as set forth in Schedule 3.9,
the
Company has not requested or obtained any extension of time within which to
file
any Tax Return, which Tax Return has not since been filed. Except as set forth
in Schedule 3.9,
there
are no Encumbrances on any of the Membership Interests in or assets, rights
or
properties of the Company that arose in connection with any failure (or alleged
failure) to pay any Tax other than Encumbrances for Taxes not yet due and
payable.
-10-
(b) The
Company has complied
in all respects with all applicable laws, rules and regulations relating to
withholding Taxes,
including all information reporting and backup withholding requirements
(including the maintenance of required records with respect thereto), and has,
within the time and manner prescribed by law, withheld and paid, when due all
Taxes from payments made to its employees, agents, contractors, creditors,
interest holders or other third parties as required by Law.
(c) There
is
no proceeding or audit pending or, to the best of Seller’s knowledge, threatened
by any governmental authority with respect to any Taxes or Tax Returns of the
Company.
(d) To
the
best of Seller’s knowledge, there are no existing circumstances that, if known
to governmental authorities, could reasonably be expected to result in the
assertion of any claim for Taxes against the Company by any governmental
authority with respect to any period for which Tax Returns have been filed
or
Tax is required to have been paid. Neither the Company nor any Affiliate of
the
Company (with respect to the Company) has received a written ruling from a
governmental authority relating to any Tax or entered into a written agreement
with a governmental authority relating to any Tax that could have a continuing
effect with respect to any taxable period for which the Company has not filed
a
Tax Return. No property of the Company is property that the Company or any
party
to this transaction is or will be required to treat as being owned by another
Person pursuant to the provisions of Section 168(f)(8) of the Code (as in effect
prior to its amendment by the Tax Reform Act of 1986) or is “tax-exempt use
property” within the meaning of Section 168 of the Code.
(e) Except
as
set forth in Schedule 3.9,
the
Company has not waived any statute of limitations for assessment or collection
with respect to any Tax or Tax Return or agreed to any extension of time with
respect to a Tax assessment or deficiency, which has continuing
effect.
(f) The
Company is not and has not been a party to any Tax allocation, Tax sharing
or
similar agreement or arrangement, is not and has not been a member of a group
of
entities required to file Tax Returns on a combined, consolidated or unitary
basis, and does not have any liability for Taxes owing by any other Person,
including, without limitation by contract or as a transferee or successor of
such other Person by merger or otherwise.
-11-
(g) Seller
has made available to Buyer complete and accurate copies of all of the following
materials related to the Company (during periods ending after January 1, 2003):
(i) all income Tax Returns, (ii) all examination reports relating to Taxes,
(iii) all annual statements of Taxes, (iv) all written rulings received from
any
governmental authority relating to any Tax, and (v) all written agreements
entered into with any governmental authority relating to any Tax. Seller has
made available to Buyer complete and accurate copies of all monthly and
quarterly statements of Taxes during the period from January 1, 2005 to
September 30, 2006. To the extent specifically requested by Buyer, Seller has
made available to Buyer: (i) complete and accurate copies of all other Tax
Returns related to the Company, and (ii) complete and accurate copies of all
documents described in the previous sentence without regard to the period to
which they relate. Schedule
3.9
identifies all Tax Returns that the Company has filed (during periods ending
after January 1, 2003) and the taxable period covered by each such Tax Return,
and identifies those Tax Returns or periods that have been audited or are
currently the subject of an audit by a governmental authority.
(h) Since
the
date of its formation, the Company has been an entity which is disregarded
for
federal tax purposes as separate from its owner pursuant to Treas. Reg.
§301.7701-2(b)(1)(ii).
(i) Neither
the Company nor the Subsidiary (nor, to the best of Seller’s knowledge, any
officer or director of the Company) has been a party to or participated in
any
way in a transaction that could be described as a “reportable transaction”
within the meaning of Treasury Regulation Section 1.6011-4(b) (including without
limitation, any “listed transaction”) or any confidential corporate Tax shelter
within the meaning of Treasury Regulation Section 1.6111-2, nor has any Tax
item
or any Tax strategy that has been derived from or related to any such
transaction been reflected in any Tax Return of the Company (or, to the best
of
Seller’s knowledge, any Tax Return of any officer or director of the
Company).
3.10 Contracts
and Commitments.
(a) Except
as
set forth in the Contracts Schedule, Schedule
3.10,
the
Company is not a party to or otherwise bound by any contract or agreement,
written or oral:
(i) for
a
bonus, pension, profit sharing, retirement, deferred compensation, medical
or
life insurance plan, membership purchase or option or any other plans or
arrangements providing for benefits of any type to employees (either current
or
former) of the Company;
(ii) for
collective bargaining or with any labor union;
(iii) for
the
borrowing of money or mortgaging, pledging or encumbering any of the Company’s
assets;
(iv) for
the
lending or investing of funds to or in other persons or entities;
-12-
(v) granting
any power of attorney (irrevocable or otherwise) to any Person for any purpose
relating to the Business or the Company’s assets, other than powers of attorney
given to regulatory authorities in connection with routine qualifications to
do
business; or
(vi) with
an
Affiliate of Seller or the Company (other than the Company’s Charter Documents).
(b) The
Contracts Schedule lists each of the Material Contracts. For purposes of this
Agreement, “Material
Contracts”
includes the following:
(i) any
and
all contracts for the sale of goods or services with a value in excess of (A)
Fifty Thousand Dollars ($50,000) individually, (B) with respect to any one
entity, One Hundred Thousand Dollars ($100,000) in the aggregate, or (C) Ten
Thousand Dollars ($10,000) and which is not terminable without penalty by or
on
behalf of the Company on less than ninety (90) days’ notice;
(ii) any
and
all contracts, agreements, licenses, leases (other than the Leases), sales
and
purchase orders and other legally binding commitments (x) that obligate the
Company to pay, assume, guaranty or secure an amount in excess of (A) Fifty
Thousand Dollars ($50,000) individually, (B) with respect to any one entity,
One
Hundred Thousand Dollars ($100,000) in the aggregate, or (C) Ten Thousand
Dollars ($10,000) and which is not terminable without penalty by or on behalf
of
the Company on less than ninety (90) days’ notice or (y) pursuant to which the
Company buys or sells aviation fuel;
(iii) any
and
all contracts between the Company on the one hand and any Affiliate of the
Company on the other hand (other than the Company’s Charter
Documents);
(iv) any
and
all broker, distributor, dealer, representative or agency
agreements;
(v) any
and
all insurance policies insuring the Business, the Facility or any of the
Company’s assets (collectively, the “Insurance
Policies”);
(vi) any
and
all employment, non-competition or consulting agreement;
(vii) each
contract containing covenants purporting to materially limit the freedom of
the
Company to compete in any line of business or in any geographic
area;
(viii) each
contract that is not for the purchase, sale or license of goods or services
in
the ordinary course of business consistent with past practice, including any
factoring agreements;
(ix) each
partnership, joint venture or other similar agreement or arrangement to which
the Company is a party;
-13-
(x) any
and
all agreements requiring a loan or advance by the Company; and
(xi) any
other
contract or agreement that is material to the Business or the financial
condition or results of operations of the Company.
(c) Seller
has delivered to Buyer true and complete copies of all written Material
Contracts, together with all amendments, supplements and material correspondence
related thereto. The Contracts Schedule includes a description of the material
terms of each Material Contract that is oral. The Material Contracts are in
full
force and effect and are enforceable against the Company and all other parties
thereto. Except as set forth on the Contracts Schedule, neither Seller nor
the
Company has (i) received any notice that it is in default under, or not in
compliance with any material provision of, any Material Contract, or
(ii) delivered any notice to another party alleging any default under, or
failure to comply with any material provision of, any Material Contract. To
the
best of Seller’s knowledge, no event has occurred that, with notice, the passage
of time or both, could reasonably be expected to constitute a default by the
Company or any other party under, or failure of the Company or any other party
to comply with a material provision of, any of the Material Contracts, or
otherwise give any party a right of termination or modification thereof. The
Company has timely prepared and, as applicable, filed with the proper third
parties, all material statements and reports as required by the Material
Contracts, and each such statement or report is correct in all material
respects.
(d) Set
forth
on Schedule 3.10(d)
is a
list of the ten (10) largest customers of the Company by gallons of fuel
purchased in the 2005 calendar year.
(e) Except
as
disclosed on Schedule 3.10(e),
to the
best of Seller’s knowledge, no material supplier to or landlord of the Company,
including any party to the Ground Lease, or any governmental entity has taken,
and neither Seller nor the Company has received any notice that, any material
supplier to or landlord of the Company, including any party to the Ground Lease,
or any governmental entity contemplates taking, any steps to terminate or
materially alter the business relationship of Company with such supplier or
landlord, including any party to the Ground Lease.
(f) The
Insurance Policies are in full force and effect and shall remain in full force
and effect until 11:59 p.m. on the day following the Closing Date. Except as
set
forth on Schedule
3.10(f),
there
are no claims related to or arising out of the operation of the Business pending
under any Insurance Policies. To the best of Seller’s knowledge, no event has
occurred, and no condition or circumstances exist, that could reasonably be
expected to (with or without notice or lapse of time) give rise to or serve
as a
basis for any claims related to or arising out of the operation of the Business
under the Insurance Policies.
(g) The
Company does not have, directly or indirectly, any (i) interest in the
outstanding stock or ownership interests of any corporation or in any
partnership, joint venture or other entity, or (ii) agreement,
understanding, contract or commitment relating to an interest in any such
entity.
-14-
3.11 Litigation;
Proceedings.
Except
as set forth in Schedule
3.11,
neither
the Company nor Seller has received notice or service of process regarding
or
otherwise been named as a party to any pending action, suit, proceeding,
judgment, order or governmental investigation. To the best of Seller’s
knowledge, no such action, suit, proceeding or governmental investigation has
been threatened.
The
Company is not subject to or in violation of any judgment, decree, injunction
or
order.
3.12 Brokerage.
No
agent, broker, finder, or investment or commercial banker engaged by or on
behalf of Seller or the Company is or will be entitled to any brokerage
commission, finders’ fees or similar compensation from the Company or Buyer as a
result of this Agreement or any of the transactions contemplated
herein.
3.13 Employee
Benefit Plans.
(a) “Benefit
Plans”
means:
(i) each plan, program, agreement or arrangement for the provision of
executive compensation, deferred or incentive compensation, profit sharing,
bonus, employee assistance, supplemental retirement, severance, vacation,
sickness, disability, death, fringe benefit, insurance, medical or other
benefits (whether provided through insurance, on a funded or unfunded basis,
or
otherwise) to any current or former employee, director, consultant or
independent contractor, or any dependent, survivor or beneficiary with respect
to any of the foregoing, which is maintained, administered or contributed to
by
the Company or any ERISA Affiliate of the Company; (ii) each Employee
Pension Benefit Plan which has been maintained, administered or contributed
to
by the Company or any ERISA Affiliate in the past six (6) years (the
“Pension
Plans”);
and
(iii) each Employee Welfare Benefit Plan which is currently maintained,
administered or contributed to by the Company or any ERISA Affiliate (such
plans, together with Employee Welfare Benefit Plans which were previously
maintained, administered or contributed to by the Company or an ERISA Affiliate,
collectively, the “Welfare
Plans”).
(b) (i) Each
Benefit Plan that is sponsored, maintained or contributed to by the Company
or
with respect to which the Company has or may have any liability is listed on
Schedule
3.13(b)(i)
(hereinafter referred to as the “Company
Benefit Plans”).
(ii) Each
Pension Plan other than the 401(k) Plan is listed on Schedule
3.13(b)(ii).
(iii) Each
ERISA Affiliate is identified on Schedule 3.13(b)(iii).
(c) Each
Pension Plan that covers any Company Employee or any manager, officer, agent,
consultant or professional adviser to the Company, and which is intended to
qualify under Section 401(a) of the Code so qualifies. No Pension Plan has
ever held any Company securities.
-15-
(d) To
the
best of Seller’s knowledge, each Company Benefit Plan (and each related trust,
insurance contract or fund) has been administered in all material respects
in
accordance with its governing instruments and all applicable Laws. To the best
of Seller’s knowledge, except as set forth in Schedule 3.13(d),
all
reports and information relating to each Company Benefit Plan required to be
filed with a governmental authority have been timely filed and are accurate
in
all material respects and all reports and information relating to each such
Company Benefit Plan required to be disclosed or provided to participants or
their beneficiaries have been timely disclosed or provided. No officer, manager,
agent or employee of the Company or any ERISA Affiliate has made any oral or
written representation which is inconsistent with the terms of any Company
Benefit Plan which may be binding on such plan or the Company. To the best
of
Seller’s knowledge, there are no restrictions or limitations on the right of the
Company or any ERISA Affiliate to terminate or decrease (prospectively) the
level of benefits under any Company Benefit Plan after the Closing Date without
liability to the Company or any participant or beneficiary thereunder. The
Company may, without cost, withdraw the Company Employees from any Benefit
Plan
which is not sponsored by the Company. No Benefit Plan covering Company
Employees imposes withdrawal charges, redemption fees, contingent deferred
sales
charges or similar expenses triggered by termination of the plan or cessation
of
participation or withdrawal of employees thereunder.
(e) To
the
best of Seller’s knowledge, except as set forth in Schedule 3.13(e),
all
contributions, premiums or other payments due under the terms of each Benefit
Plan or required by applicable Law have been made within the time due. All
unpaid amounts attributable to any Company Benefit Plan for any period prior
to
the Closing Date will be accrued on the Company’s consolidated books and records
in accordance with GAAP. There have been no Prohibited Transactions with respect
to any Benefit Plan which could result in liability to Buyer, the Company,
any
employees of Buyer or any Company Employees. There has been no breach of
fiduciary duty (including violations under Part 4 of Title I of ERISA) with
respect to any Benefit Plan which could result in liability to Buyer, the
Company, any employees of Buyer or any Company Employees. No action, suit,
proceeding, hearing or investigation relating to any Company Benefit Plan (other
than routine claims for benefits) is pending or, to the best of Seller’s
knowledge, has been threatened, and Seller has no knowledge of any fact that
could form the basis for such action, suit, proceeding, hearing or
investigation.
(f) Except
as
set forth on Schedule
3.13(f),
neither
the Company, nor any ERISA Affiliate has ever sponsored, maintained, contributed
to, had any obligation to contribute to, or had any other liability under or
with respect to any: (i) Employee Pension Benefit Plan covered by Title IV
of
ERISA, Section 302 of ERISA or Section 412 of the Code, (ii) Employee
Welfare Benefit Plan which provides health, life or other coverage for former
directors, officers or employees (or any spouse or former spouse or other
dependent thereof), other than benefits required by COBRA, (iii) “voluntary
employees beneficiary association” within the meaning of Section 501(c)(9)
of the Code or any other “welfare benefit fund” as defined in
Section 419(e) of the Code, (iv) a nonqualified deferred compensation plan
within the meaning of Code Section 409A for the benefit of anyone who has
provided services with respect to the Business or (v) “multiemployer plan” as
defined in ERISA Section 3(37) or any “multiple employer welfare arrangement” as
defined in Section 3(40)(A) of ERISA.
-16-
3.14 Employee
Matters.
(a) Except
for AAC corporate or headquarters employees (including Xxxx Xxxxxx and Xxxxx
Xxxxxx), Schedule 3.14(a)(i)
contains
a complete and correct list of all employees and independent contractors who
are
currently engaged in operating the Business (the “Company
Employees”)
and
the employer, date of hire, 2006 compensation paid or payable and accrued
vacation time, sick leave and other paid time off of each such Company Employee.
Except as set forth on Schedule 3.14(a)(ii),
(i) the terms of employment or engagement of all Company Employees and
managers, agents, consultants and professional advisers to the Company are
such
that their employment or engagement may be terminated at will with notice given
at any time and without liability for payment of compensation or damages,
(ii) there are no severance payments which are or could become payable to
any such person under the terms of any oral or written agreement or commitment
or any Law, custom, trade or practice, (iii) there are no other agreements,
contracts or commitments, oral or written, between the Company and any such
Person, and (iv) as of the date hereof, to the best of Seller’s knowledge, no
Company Employee has any plans to terminate his or her employment with the
Company or AAC. Schedule
3.14(a)(iii)
lists
all of the Company Employees who are currently on leave relating to work-related
injuries and/or receiving disability benefits under any Benefit
Plan.
(b) Neither
the Company nor ACC is, nor has either of them ever been, bound by or subject
to
(and none of their respective assets or properties are bound by or subject
to)
any arrangement with any labor union or other collective bargaining
representative. With respect to each of the Company and AAC, there is no pending
or, to the best of Seller’s knowledge, threatened (i) union organizational
activity or other labor or employment dispute against or affecting the Company
or AAC, or (ii) application for certification of a collective bargaining
agent.
(c) All
persons classified by the Company as independent contractors do satisfy and
have
satisfied the requirements of Law to be so classified, and the Company has
fully
and accurately reported its compensation on IRS Forms 1099 when required to
do
so. No individual who has performed services for or on behalf of the Company
and
who has been treated by the Company as an independent contractor is classifiable
as a “leased employee” within the meaning of Section 414(n)(2) of the Code
with respect to the Company.
3.15 Compliance
with Laws; Permits.
The
Company has complied, and the use and operation of the Facility are in
compliance, in all material respects, with all applicable Laws which affect
the
Business, and has timely filed with the proper authorities all material
statements and reports required by the Laws to which the Business is subject.
Except as set forth in Schedule 3.15,
the
Company holds all permits, licenses, certificates, approvals, registrations,
franchises, rights, qualifications and other authorizations of federal, state
and local governments, agencies and regulatory authorities required or advisable
for the conduct of the Business as operated to the date hereof (collectively,
the “Permits”). Schedule
3.15
sets
forth a complete and accurate list of each Permit. Except as set forth in
Schedule 3.15,
the
Company does not (1) hold any Permit issued by the Federal Aviation
Administration or by the U.S. Department of Transportation or (2) own or
lease aircraft or (3) operate aircraft for a third party under a management
agreement or other similar arrangement. Except as set forth in Schedule 3.15,
neither
Seller nor the Company has received any notice of any (x) order, rule or
directive, or any proposed order, rule or directive, issued by any governmental
authority against the Company, or (y) threatened legal or regulatory proceeding
which could adversely affect the Business or assets of the Company, or any
Permit required to be obtained and maintained by the Company.
-17-
3.16 Environmental
Matters.
Except
as set forth in Schedule
3.16,
Seller
represents and warrants that:
(a) The
Company materially complies, and at all times during Seller’s ownership of the
Membership Interests has been in material compliance, with applicable
Environmental Laws and there are no circumstances that will prevent such
compliance in the future;
(b) Neither
Seller nor the Company has received any written request for information, or
has
been notified that it is a potentially responsible party, under the CERCLA,
or
any similar state or local law with respect to any on-site or offsite
location;
(c) The
Company has obtained all required Environmental Permits relating to the
Business, enabling the Business to operate as of the Closing Date in the
ordinary course of business;
(d) Neither
Seller nor the Company has received any notice, notification, demand, request
for information, citation, summons, complaint or order and, to the best of
Seller’s knowledge, there is no violation, claim, demand, litigation, proceeding
or governmental investigation (whether pending or threatened) arising from
applicable Environmental Laws relating to the Company. The Company is not
subject to any judgment, decree, order, or consent agreement relating to
compliance with any Environmental Laws, or the cleanup of Hazardous Materials
under any Environmental Laws;
(e) Seller
has delivered true, complete and correct copies of any and all reports, or
other
documents possessed by or in the control of Seller or the Company pertaining
to
the environmental condition of the Facility, Hazardous Materials on the Facility
and regarding the Company’s compliance with applicable Environmental Laws.
Except for such reports or documents, there has been no investigation, study,
audit, test, review or other analysis (including any Phase I environmental
assessments) conducted by, for, or provided to Seller or the Company with
respect to matters affecting the environment, health or safety in relation
to
the Business; and
(f) Except
as
set forth in Schedule
3.16(f)(i),
to the
best of Seller’s knowledge, the Facility does not contain and the Company does
not otherwise operate any underground storage tanks. Except as set forth in
Schedule
3.16(f)(ii),
to the
best of Seller’s knowledge, there have been no discharges, emissions, spilling,
leaking, pouring, emptying, or other releases of Hazardous Materials which
are
or were reportable by Seller or the Company under any Environmental
Laws.
-18-
3.17 Affiliate
Transactions.
Except
as set forth in Schedule
3.17,
no
Affiliate of the Company nor any member, manager, officer, director or equity
holder of any thereof, is party to any agreement, transaction or understanding
(other than the Company’s Charter Documents) with the Company. Except pursuant
to the Company’s Charter Documents, the consummation of the transactions
contemplated by this Agreement will not (either alone, or upon the occurrence
of
any act or event, or with the lapse of time, or both) result in any benefit
or
payment (severance or other) arising or becoming due from the Company to any
Person other than Seller in accordance with the terms of this
Agreement.
3.18 Intellectual
Property Rights.
Schedule
3.18
lists
all of the Intellectual Property owned or licensed by the Company and used
in
connection with its Business. The use by the Company of the Intellectual
Property does not infringe any rights of any third party and no activity of
any
third party infringes upon the rights of the respective Company with respect
to
any of the Intellectual Property. Neither
Seller nor the Company has received notice of any claims asserted by any Person
with respect to challenging the ownership, validity, enforceability or use
of
the Intellectual Property, nor, to the best of Seller’s knowledge, are there any
valid grounds for any such bona fide claims. To the extent the Company uses
any
Intellectual Property owned by a third party, the Company has a license with
such third party for the use of such Intellectual Property and is not in default
under any such license.
3.19 Bank
Accounts; Powers of Attorney.
Schedule
3.19
lists
each bank, trust company, savings institution, brokerage firm, mutual fund
or
other financial institution with which the Company has an account or safe
deposit or lock box and the names and identification of all persons authorized
to draw on it or to have access to it as of the Closing Date. Except
as
set forth on Schedule 3.19,
neither
the Company nor any of its managers or officers, has any power of attorney
with
respect to the Business outstanding.
3.20 Fuel
Volume Records.
True
and correct copies of the Company’s fuel volume records and gross receipt
statements as filed with the relevant airport authority for the period from
January 1, 2005 through September 30, 2006 are attached as Schedule
3.20.
Such
statements accurately reflect the volume of fuel sold and revenues earned by
the
Company during such period and were prepared in accordance with the Company’s
books and records.
3.21 Disclosure.
To the
best of Seller’s knowledge, no representations or warranties by Seller in this
Agreement or in any document, exhibit, statement, certificate or schedule which
is furnished or to be furnished by Seller in connection with the Closing of
the
transactions herein contemplated, (i) contains or will contain any untrue
statement of a material fact, or (ii) omits or will omit to state, when
read in conjunction with all of the information contained in this Agreement,
the
Schedules hereto and the other Transaction Documents, any material fact
necessary to make the statements or facts contained therein not
misleading.
-19-
ARTICLE
4
BUYER’S
REPRESENTATIONS AND WARRANTIES
As
an
inducement to Seller to enter into this Agreement, Buyer represents and warrants
to Seller that:
4.1 Organization.
Buyer
is a limited liability company duly formed, validly existing and in good
standing under the Laws of the State of Delaware.
4.2 Power
and Authority.
Buyer
has full power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. Any
third-party approvals or consents which may be required for Buyer to enter
into
this Agreement or to consummate the transaction contemplated hereby have been,
or will prior to Closing, be obtained by Buyer.
4.3 Authorization;
No Breach.
The
execution, delivery and performance of this Agreement has been duly and validly
authorized by Buyer, and this Agreement constitutes a valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
(except as may be limited by bankruptcy, insolvency, reorganization and other
similar laws and equitable principles relating to or limiting creditors’ rights
generally). The
execution, delivery and performance of this Agreement, and the consummation
of
the transactions hereunder, will not violate, conflict with, result in a
breach or constitute a default under Buyer’s Charter Documents, any Law to which
Buyer is subject or any agreement to which Buyer is a party.
4.4 Reliance.
Buyer
has relied solely upon its expertise, experience, due diligence review and
the
written representations and warranties contained in this Agreement. Buyer has
not relied upon any oral representations by Seller, Seller’s agents or
representatives, or any agents, representatives or employees of the Company
in
entering into or executing this Agreement. Buyer further acknowledges that
no
Person acting on behalf of Seller is authorized to make, and that no Person
has
made, any representation, agreement, statement, warranty, guarantee or promise
regarding the real property used in the Business or the transaction contemplated
herein, except as otherwise expressly provided herein. No representation,
warranty, agreement, statement, guarantee or promise, if any, made by any Person
acting on behalf of Seller which is not contained in this Agreement will be
valid or binding on Seller.
4.5 Securities
Laws.
Buyer
acknowledges and is aware of the following:
(a) No
federal or state agency has made any finding or determination as to the fairness
of the purchase of the Membership Interests nor any recommendation or
endorsement of the Membership Interests;
(b)
Buyer
is
purchasing the Membership Interests for long-term investment for its own account
only and not with a view to, or for resale in, any “distribution” within the
meaning of the Securities Act of 1933, as amended (the “Act”); and
(c) The
purchase and sale of the Membership Interests is being made in reliance upon
exemptions from the registration requirements of the Act and any and all
applicable state securities laws. Because the Membership Interests have not
been
registered, Buyer understands and agrees that the Membership Interests cannot
be
sold by it until registered under the Act and applicable State securities law
unless an exemption from such registration is available and that a legend
reflecting this fact will be placed on all certificates representing the
Membership Interests.
-20-
4.6 Brokerage.
No
agent, broker, finder, or investment or commercial banker engaged by or on
behalf of Buyer is or will be entitled to any brokerage commission, finders’
fees or similar compensation from Seller as a result of this Agreement or any
of
the transactions contemplated herein.
4.7 Litigation.
There
is no action, suit, proceeding, judgment or order pending or, to the best of
Buyer’s knowledge, threatened against or affecting Buyer before any federal,
state, municipal or other governmental court or agency which would have a
material adverse effect on Buyer’s performance under this Agreement or the
consummation of the transactions contemplated hereby.
ARTICLE
5
PRE-CLOSING
COVENANTS
5.1 Affirmative
Covenants.
Prior
to the Closing, Seller shall, or shall cause the Company to, as
applicable:
(a) use
commercially reasonable efforts to obtain all consents and approvals from any
parties that may be necessary or reasonably requested by Buyer to consummate
the
transactions contemplated by this Agreement, including without limitation the
consent of ExxonMobil Oil Corporation to the assignment of (i) that certain
Aviation Dealer Products Sales Agreement, dated February 6, 2004, between
ExxonMobil Oil Corporation and Rifton Management LLC, and (ii) that certain
Aviation Product Buyback Agreement, dated August 2, 2004, by and between
ExxonMobil Oil Corporation and Rifton Management LLC, in each case from Rifton
Management LLC to the Company;
(b) conduct
the Business only in the usual and ordinary course of business and consistent
with past practices, including, without limitation, consistent with past
practices in respect of managing working capital (including billing and
collection of receivables and payment of payables);
(c) use
commercially reasonable efforts to keep in full force and effect the Company’s
existence and all rights, franchises, Permits and Intellectual Property rights
relating to or pertaining to the Business;
(d) use
commercially reasonable efforts to retain the Company’s employees and preserve
the Company’s present business relationships;
(e) maintain
the Personal Property in customary repair, order and condition and in the event
of any casualty, loss or damage to any of the Personal Property prior to
Closing, either repair or replace such assets with assets of comparable quality
or transfer to Buyer at Closing the proceeds of any insurance recovery with
respect thereto;
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(f) maintain
the Company’s books, accounts and records in accordance with past custom and
practice as applied by Seller and the Company, on a consistent basis;
(g) maintain
all Insurance Policies; and
(h) not
be in
material default under any Material Contract, Lease or Permit, or cure any
such
material default within the applicable cure period.
5.2 Notification
of Certain Events.
Seller
shall promptly give Buyer written notice of the existence or occurrence of
any
condition which would make any representation or warranty made by Seller
contained herein untrue as of the date of this Agreement or any subsequent
date
as if made on and as of such subsequent date (except for those representations
and warranties which address matters only as of a particular date) or which
might reasonably be expected to prevent the consummation of the transactions
contemplated hereby. No notification made pursuant to this Section 5.2
shall be
deemed to cure any breach of any representation or warranty, nor shall any
such
notification be considered to constitute or give rise to a waiver by Buyer
of
any condition set forth in this Agreement.
5.3 Access.
Prior
to Closing, Seller will (a) during ordinary business hours and in a
commercially reasonable manner, permit Buyer and its authorized representatives
to have access to the Facility and the Company’s books, records and key
personnel, (b) furnish, as soon as reasonably practicable, to Buyer or its
authorized representatives such other information in Seller’s possession with
respect to the Company as Buyer may from time to time reasonably request, and
(c) otherwise reasonably cooperate in the examination of the Company by
Buyer.
5.4 Negative
Covenants.
From
the Effective Date to the Closing Date, Seller shall not permit the Company
to,
and Seller shall not, with respect to the Company, without the prior written
consent of Buyer, which consent shall not be unreasonably withheld or
delayed:
(a) transfer
or sell any assets that are material, individually or in the aggregate, outside
the ordinary course of business consistent with past practices;
(b) assume,
guarantee, endorse or otherwise become liable or responsible for any
indebtedness of any other Person;
(c) incur
or
agree to incur any obligation or liability, or make any capital expenditures
or
commitments with respect thereto, in each case that are material, individually
or in the aggregate, except those obligations, liabilities and capital
expenditures set forth on Schedule
5.4(c);
(d) defer
any
capital expenditure or capital improvements that is reasonably required for
the
operation of the Business;
(e) make
any
loans, or investments in, any other Person;
(f) pledge
or
otherwise mortgage any assets or allow any Encumbrance thereupon, in each case
that are material individually or in the aggregate;
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(g) terminate,
amend or fail to renew any Permits;
(h) terminate,
amend or fail to renew any Insurance Policies;
(i) amend,
modify or terminate any Material Contract, in any case that is adverse in any
material respect to the Company;
(j) except
as
set forth on Schedule
5.4(j), increase
the compensation, benefits or other remuneration of any current officers or
key
employees, or enter into any employment or consulting contract or arrangement
with any person which is not terminable at will, without penalty or continuing
obligation;
(k) adopt
a
plan of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company;
(l) alter
through merger, liquidation, reorganization, restructuring or any other fashion
the ownership of the Membership Interests by Seller;
(m) except
as
set forth in Schedule 5.4(m),
make,
change or revoke any Tax election or make any agreement or settlement with
any
taxing authority, enter
into any closing agreement, settle any Tax claim or assessment relating to
the
Company, consent to any extension or waiver of the limitation period applicable
to any Tax claim or assessment, or take any other similar action relating to
the
filing of any Tax Return;
(n) except
as
expressly contemplated in this Agreement, take any action or permit to occur
any
event described in Section 3.7;
(o) take
any
action or omit to take any action which will result in a violation of any
applicable Law or cause a breach of any Material Contract, Lease, Permit or
representation or warranty set forth in Article
3;
(p) xxxx
for
goods or services, or take any action to collect any accounts receivable, or
run
down inventory, in any case outside the ordinary course of business or
inconsistent with past practices, or defer payment of any accounts payable
for
more than thirty (30) days after receipt of any invoice with respect thereto;
or
(q) enter
into any agreement, or otherwise commit, to do any of the
foregoing.
5.5 No
Shop.
From
the Effective Date through the Closing, Seller shall not sell or otherwise
transfer any of the Membership Interests to any other Person, and neither Seller
nor the Company, or any of their Affiliates, officers, manager, employees,
representatives or agents, shall, directly or indirectly, solicit, initiate
or
participate in any way in discussions or negotiations with, or provide any
information or assistance to, any Person or group of Persons (other than Buyer
and its Affiliates) concerning any acquisition of an equity interest in, or
in a
merger, consolidation, liquidation, dissolution, disposition of assets (other
than in the ordinary course of business and as specifically permitted pursuant
to this Agreement) of Company, or any disposition of any of the Membership
Interests (other than pursuant to the transactions contemplated by this
Agreement), or assist or participate in, facilitate or encourage any effort
or
attempt by any other Person to do or seek to do any of the foregoing.
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5.6 HSR
Filings.
Buyer
and Seller will, as promptly as practicable following the execution and delivery
of this Agreement, file with the Federal Trade Commission and the Department
of
Justice the notification and report forms, if any, required for the transactions
contemplated hereby pursuant to the HSR Act. Any such notification and report
forms will be in substantial compliance with the requirements of the HSR Act.
Each Party shall furnish to the other Party such necessary information and
reasonable assistance as the other may request in connection with its
preparation of any filing or submission which is necessary under the HSR Act.
Each Party shall keep the other apprised of the status of any communications
with, and inquiries or requests for additional information from, the Federal
Trade Commission and Department of Justice. Buyer shall pay the filing fees
applicable to filings required by the HSR Act in connection with the
transactions contemplated by this Agreement.
5.7 Benefit
Plans.
Upon
Buyer’s request, Seller shall cause the Company to take action prior to the
Closing Date to terminate the Benefit Plans that it sponsors and to withdraw
Company Employees from participation in any Benefit Plans that it does not
sponsor.
5.8 Employees.
(a) Seller
shall cause AAC or the Company to provide Buyer’s representatives with
reasonable access to Company Employees and books and records relating thereto
for the purpose of interviewing such individuals for prospective employment
with
the Company, Buyer or a Buyer Affiliate after the Closing.
(b) Prior
to
Closing, Buyer shall, or shall cause one or more of its Affiliates
(collectively, the “New
Employer”)
to:
(i) make
offers to such Company Employees that it desires to hire at the Closing, with
compensation and benefits (including Group Health Plan coverage) on the same
basis as such benefits are provided to comparable employees of Buyer and its
Affiliates (the “Offerees”);
and
(ii) permit
such Offerees that accept such offers of employment as of the Closing (the
“Hired
Employees”)
to
elect to transfer their accumulated and unused vacation and other paid time
off
to the books of a New Employer, or, in the event that a Hired Employee fails
to
elect to cause such transfer, cause the Company to reimburse AAC for the payment
by AAC to the Hired Employees of such accumulated and unused vacation and other
paid time off; provided,
that
the Closing Net Working Capital shall be adjusted to reflect the assumption
of
such liabilities by the New Employer or the obligation to pay AAC.
(c) Seller
shall cause the management of the Company and AAC to use good faith efforts
to
persuade all Offerees to accept offers from a New Employer as soon as
practicable before the Closing.
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ARTICLE
6
CLOSING
CONDITIONS - BUYER
6.1 Conditions
to Closing.
The
obligation of Buyer to consummate the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions on or
before the Closing Date:
(a) The
representations and warranties set forth in Article
3
and the
information set forth in the schedules to this Agreement shall have been true
and correct in all material respects as of the effective date of this Agreement
and shall be true and correct in all material respects as of the Closing Date
as
though made on the Closing Date, except for those representations and warranties
which address matters only as of a particular date, which shall continue to
be
true and correct in all material respects as of that particular date, and Seller
shall have delivered to Buyer a certificate to that effect;
(b) Seller
and the Company shall have performed or complied with all of the covenants
and
agreements required under this Agreement, and Seller shall have delivered to
Buyer a certificate to that effect;
(c) No
order
of any court or administrative agency shall be in effect which restrains or
prohibits the transactions contemplated hereby, and there shall not have been
threatened, nor shall there be pending, any action or proceeding by or before
any court or governmental agency or other regulatory or administrative agency
or
commission: (i) challenging any of the transactions contemplated by this
Agreement or seeking monetary relief by reason of the consummation of such
transactions; (ii) by any present or former owner of any equity interest in
the Company (whether through a derivative action or otherwise) against Seller,
the Company or any officer, manager or member of the Company; or
(iii) which could reasonably be expected to have a material adverse effect
on the business or condition (financial or otherwise) of the
Company;
(d) Seller
shall have executed and delivered to Buyer original or facsimile counterparts
of
each Transaction Document to which it is a party, and the Escrow Agent shall
have executed and delivered to Buyer original or facsimile counterparts to
the
Escrow Agreement, in each case in accordance with the provision in Section
8.1
permitting the use of facsimile copies;
(e) Any
and
all governmental approvals and all consents by third parties that are required
for the transfer of the Membership Interests and the consummation of the
transactions contemplated hereby, shall have been obtained and no such approval
or consent shall have been conditioned upon the modification in any material
respect, cancellation or termination of any Material Contract, Lease or Permit
or shall impose on Buyer or the Company any material condition, provision,
requirement or additional cost not presently imposed upon Seller or the Company
or any condition that would be materially more restrictive after the Closing
than the conditions presently imposed on Seller or the Company, as the case
may
be;
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(f) Buyer
shall have received reasonable confirmation from Seller (including payoff
letters from each of the Company’s lenders) that all Funded Indebtedness has
been, or will be in connection with the Closing, satisfied in full and of the
absence of any and all Encumbrances affecting the Company, the Facility or
Business, including without limitation, the written acknowledgment and agreement
by the holder of the Rifton Note to the assumption by AAC of the Company’s
obligations, and the substitution of AAC as primary obligor, under the Rifton
Note;
(g) All
necessary filings pursuant to the HSR Act shall have been made and all
applicable waiting periods thereunder shall have expired or been terminated;
(h) Seller
shall have delivered to Buyer the Audited Statements and the Interim Unaudited
Statements, and there shall be no material differences between the Audited
Statements and the Unaudited 2005 Statements;
(i) Seller
shall have delivered an opinion of counsel, dated as of the Closing Date and
addressed to Buyer, substantially in the form set forth as Exhibit
“E”;
(j) Seller
shall have delivered to Buyer a tax certificate complying with Treas. Reg.
1.1445-2(b)(2) stating that Seller is not a “foreign person” within the meaning
of Section 1445 of the Code;
(k) Buyer
shall have received a good standing certificate and copies of the Charter
Documents of the Company from Seller, in each case dated as of a date not more
than thirty (30) days prior to the Closing Date, and the original minute books
of the Company which shall contain complete and accurate records of all material
actions by the Company and its members and managers;
(l) Buyer
shall have received an estoppel letter from the authority with jurisdiction
over
the Facility, addressed to Macquarie Infrastructure Company, Inc., and its
subsidiaries and their lenders, consenting to the transactions contemplated
hereby and confirming (i) a true, correct and complete copy of the Ground Lease
(which shall be attached to the estoppel letter), (ii) the term of the Ground
Lease, (iii) that no breach or default exists under the Ground Lease, and no
amounts are past due thereunder, (iv) that the authority has not repudiated
the
Ground Lease and (v) that the Ground Lease is in full force and effect;
provided,
that,
Seller
and the Company shall have used commercially reasonable efforts to obtain,
in
addition, confirmation from the authority that (x) no additional capital
expenditures are required under the Ground Lease and (y) no subsidence has
occurred at the Facility or the runways or aprons appurtenant
thereto;
(m) Buyer
shall have received such information and certifications from Seller, the Company
and the Company’s accountants to enable Buyer and its Affiliates to prepare any
and all disclosure material as may be required by applicable federal securities
Laws and regulations promulgated by the Securities and Exchange Commission
pursuant thereto (including financial statements and related notes in
compliance with federal securities Laws), including consents of the Company’s
accountants to the inclusion of such financial statements in appropriate filings
with the Securities and Exchange Commission;
-26-
(n) The
transactions contemplated by the Santa Xxxxxx Purchase Agreement shall have
been
consummated;
(o) Buyer
shall have received a release and waiver from Seller, in the form of
Exhibit
“F”;
(p) Buyer
shall have received written resignations from each of the officers and directors
listed on Schedule
3.1(ii),
which
resignations shall be effective as of the Closing Date;
(q) A
sufficient number of Company Employees to operate and conduct the Facility
and
the Business as operated and conducted as of the Effective Date shall have
accepted employment with the Company, Buyer or a Buyer Affiliate on or prior
to
the Closing;
(r) The
Company shall have terminated any and all management agreements entered into
by
and between the Company and AAC; and
(s) there
shall not have been any material adverse change with respect to the Facility
or
the Business since June 30, 2006.
6.2 Waiver
of Conditions.
Any
conditions specified in Section
6.1
may be
waived by Buyer in writing.
ARTICLE
7
CLOSING
CONDITIONS - SELLER
7.1 Conditions
to Closing.
The
obligation of Seller to consummate the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions on or
before the Closing Date:
(a) Buyer
shall have delivered the Closing Funds, as adjusted pursuant to Section
2.2(a),
to
Seller or, at Seller’s direction, to any third parties in satisfaction of Funded
Indebtedness, and the Escrow Funds to the Escrow Agent, in each case in
accordance with the terms of this Agreement;
(b) The
representations and warranties set forth in Article
4
shall
have been true and correct in all material respects as of the effective date
of
this Agreement and shall be true and correct in all material respects as of
the
Closing Date as though made on the Closing Date, except for those
representations and warranties which address matters only as of a particular
date, which shall continue to be true and correct in all material respects
as of
that particular date, and Buyer shall have delivered to Seller a certificate
to
that effect;
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(c) Buyer
shall have performed or complied with all of the covenants and agreements
required under this Agreement, and Buyer shall have delivered to Seller a
certificate to that effect;
(d) Buyer
shall have received no notice of legal action or proceeding which shall have
been instituted or overtly threatened by any governmental agency seeking to
restrain, prohibit, invalidate or otherwise affect the consummation of the
transactions contemplated by this Agreement;
(e) Buyer
shall have executed and delivered to Seller original or facsimile counterparts
of each Transaction Document to which it is a party and the Escrow Agent shall
have executed and delivered to Seller original or facsimile counterparts to
the
Escrow Agreement, in each case in accordance with the provision in Section
8.1
permitting the use of facsimile copies;
(f) Seller
shall have received a good standing certificate and a copy of the Charter
Documents and resolutions of the managing member (or other authorizing actions
or instruments) of Buyer authorizing the execution, delivery and performance
by
Buyer of this Agreement and the transactions contemplated by this Agreement,
and
an incumbency certificate evidencing the authority and specimen signature of
each manager or officer of Buyer executing this Agreement and any other
certificate provided pursuant to this Section
7.1,
each in
form and substance reasonably satisfactory to Seller and certified by the
secretary or an assistant secretary of Buyer (or another responsible officer
of
Buyer) as of the Closing Date. Such certification shall state that such Charter
Documents and resolutions (or other authorizing actions or instruments) have
not
been amended, modified, revoked or rescinded and are in full force and effect
on
and as of the Closing Date and that all proceedings required to be taken on
the
part of Buyer in connection with the transactions contemplated by this Agreement
have been duly authorized and taken;
(g) All
necessary filings pursuant to the HSR Act shall have been made and all
applicable waiting periods thereunder shall have expired or been terminated;
(h) Seller
shall have received the release of AAC by SWF Airport Acquisition, Inc.
(“SWFAA”)
of any
and all obligations of AAC to SWFAA under the Assignment, Extension and
Modification Agreement (the “AEM
Agreement”)
dated
April 25, 2005 among SWFAA, AAC and the Company,
and
under the Hangar 112 Lease, the Hangar 118 Lease, the FBO Agreement and the
Commercial Operating Permit, each as defined in the AEM Agreement whether
such obligations arose or arise prior to or after the Closing. Buyer shall
use
commercially reasonable efforts to assist Seller in obtaining such
release;
(i) Seller
shall have received the release of AAC by Rifton Management, LLC (“Rifton”)
of any
and all obligations of AAC to Rifton under the Asset Purchase Agreement dated
January 12, 2005 between AAC and Rifton (the “Rifton
Agreement”).
The
Company shall use commercially reasonable efforts, including without limitation,
its guarantee of the obligations of AAC under the Rifton Agreement, to obtain
such release;
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(j) Buyer
(i)
shall have received acceptable results of a final Phase I Environmental Site
Assessment prepared in accordance with the ASTM E 1527-05 Standard for the
property leased by the Company (the “Southwest
Quadrant Fuel Farm”)
pursuant to that certain Southwest Fuel Farm Lease Agreement, dated May 1,
2006
(the “Southwest
Fuel Farm Lease Agreement”),
and
(ii) shall have the right to conduct, and/or Seller shall have commenced, the
soil investigation specified in Section 3.3 of the Southwest Fuel Farm Lease
Agreement in a timely manner and in scope reasonably acceptable to Buyer;
and
(k) Seller
shall have received a release and waiver from the Company which is in the form
of Exhibit “G.”
7.2 Waiver
of Conditions.
Any
condition specified in Section
7.1
may be
waived by Seller in writing.
ARTICLE
8
CLOSING
MATTERS
8.1 The
Closing.
The
closing of the transactions contemplated in this Agreement (the “Closing”)
will
take place at the offices of Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP, 0000 Xxxxxx
Xxxx., Xxxxx 0000, XxXxxx, Xxxxxxxx, at 10:00 a.m. (local time), or at such
other place as Buyer and Seller may mutually agree, on a Business Day selected
by Buyer and Seller that is no sooner than three (3) days and no later than
five
(5) days after the day on which the last of the conditions to Closing set forth
in Section
6.1
and
Section
7.1
(other
than those conditions which are only capable of being satisfied contemporaneous
with the Closing) have been satisfied or waived (the “Closing
Date”).
The
Parties agree that signature pages of documents required to be delivered at
the
Closing may be delivered by facsimile, provided that originally executed
documents are sent via overnight courier immediately thereafter.
The
Closing will be effective as of 11:59 p.m. on the Closing Date (the
“Effective
Time”).
8.2 Action
to Be Taken at the Closing.
The
sale and delivery of the Membership Interests and the payment of the Purchase
Price shall take place at the Closing.
8.3 Closing
Documents.
(a) Seller
shall deliver to Buyer at the Closing the following items and documents
(collectively, the “Transaction
Documents”),
duly
executed by Seller where necessary to make them effective:
(i) Assignment
of Limited Liability Company Membership Interests in the form attached hereto
as
Exhibit
“B”;
(ii) a
certificate dated the Closing Date, to the effect that the conditions set forth
in Sections
6.1(a) and (b)
have
been satisfied;
(iii) a
release
and waiver in the form attached hereto as Exhibit
“F”;
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(iv) the
Escrow Agreement in the form attached hereto as Exhibit
“C”;
and
(v) such
other documents or instruments as Buyer reasonably may request to effect the
transactions contemplated hereby.
(b) Buyer
shall deliver to Seller at the Closing the following items and documents, duly
executed by Buyer where necessary to make them effective:
(i) Assignment
of Limited Liability Company Membership Interests in the form attached hereto
as
Exhibit
“B”;
(ii) a
certificate dated the Closing Date, signed on its behalf by an authorized
officer, to the effect that the conditions set forth in Sections
7.1(b)
and
(c)
have
been satisfied;
(iii) a
certificate dated the Closing Date, signed on its behalf by an authorized
officer, in accordance with Section
7.1(f);
(iv) the
Escrow Agreement in the form attached hereto as Exhibit
“C”;
and
(v) such
instruments of assumption, including without limitation an assumption of the
obligations of AAC under the AEM Agreement and the agreements referred to
therein, and other documents or instruments as Seller reasonably may request
to
effect the transaction contemplated hereby.
(c) The
Company shall deliver to the Seller at Closing a release and waiver in the
form
attached hereto as Exhibit “G.”
ARTICLE
9
INDEMNIFICATION
9.1 Indemnification
by Seller.
Subject
to the limitations set forth in this Article
9,
Seller
agrees to indemnify Buyer and the Company, and their respective stockholders,
officers, directors, employees, Affiliates and agents, and their successors
and
assigns (collectively, the “Buyer
Indemnified Parties”)
and
hold them harmless against any Losses which any of the Buyer Indemnified Parties
may suffer, sustain or become subject to as a result of or arising
from:
(a) any
inaccuracy in or breach of any of the representations or warranties of Seller
contained in this Agreement or in any exhibits, schedules, certificates or
other
documents delivered or to be delivered pursuant to the terms of this Agreement
or otherwise incorporated in this Agreement;
(b) any
breach of, or failure to perform, any agreement or covenant of Seller contained
in this Agreement, including without limitation delivery of the estoppel letter
referenced in Section
6.1(l);
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(c) Taxes
as
described in Section
11.5;
(d) any
liabilities arising out of or relating to any Benefit Plan and any other
liability of any ERISA Affiliate asserted against a Buyer Indemnified Party;
(e) the
obligations described in Section 11.12; and/or
(f) the
matters identified by an asterisk (*) set forth on Schedules
3.4(a), 3.4(b), 3.7, 3.11,
3.13(f)
and 3.16(f)(ii).
9.2 Indemnification
by Buyer.
Subject
to the limitations set forth in this Article
9,
Buyer
agrees to indemnify Seller and his Affiliates and agents (collectively, the
“Seller
Indemnified Parties”),
and
hold them harmless against any Losses which any of the Seller Indemnified
Parties may suffer, sustain or become subject to as a result of or arising
from:
(a) any
inaccuracy in or breach of any of the representations or warranties of Buyer
contained in this Agreement;
(b) any
breach of, or failure to perform, any agreement or covenant of Buyer contained
in this Agreement; or
(c) the
operations of the Business subsequent to Closing.
9.3 Method
of Asserting Claims.
(a) In
the
event that any of the Indemnified Parties is made a defendant in or party to
any
Claim, the Indemnified Party shall give the Indemnifying Party written notice
thereof within thirty (30) days of its knowledge of the same. The failure to
give such notice timely shall not affect any Indemnified Party’s right to
indemnification unless (and then only to the extent that) such failure or delay
has materially and adversely affected the Indemnifying Party’s ability to defend
successfully a Claim. The Indemnifying Party shall be entitled to contest and
defend such Claim provided it diligently contests and defends such Claim. Notice
of the intention so to contest and defend shall be given by the Indemnifying
Party to the Indemnified Party within fifteen (15) Business Days after the
Indemnified Party’s notice of such Claim (but, in all events, at least five (5)
Business Days prior to the date that an answer to such Claim is due to be filed
taking into account any extensions to file a responsive pleading obtained by
either Party). Such contest and defense shall be conducted by reputable
attorneys employed by the Indemnifying Party at its sole cost and expense.
The
Indemnified Party shall be entitled at any time, at its own cost and expense
(which expense shall not constitute a Loss), to participate in such contest
and
defense and to be represented by attorneys of its or their own choosing;
provided, however, that if the Indemnifying Party does not or ceases to conduct
the defense of such Claim actively and diligently, (i) the Indemnified Party
may
defend against, and, with the prior written consent of the Indemnifying Party
(which consent will not be unreasonably withheld, conditioned or delayed),
consent to the entry of any judgment or enter into any settlement with respect
to, such Claim, (ii) the Indemnifying Party will reimburse the Indemnified
Party promptly and periodically for the costs of defending against such Claim,
including reasonable attorneys’ fees and expenses and (iii) the Indemnifying
Party will remain responsible for any Losses the Indemnified Party may suffer
as
a result of such Claim to the full extent provided in this Agreement. If the
Indemnified Party elects to participate in such defense, the Indemnified Party
shall reasonably cooperate with the Indemnifying Party in the conduct of such
defense. Neither the Indemnified Party nor the Indemnifying Party may concede,
settle or compromise any Claim without the consent of the other Party, which
consent shall not be unreasonably withheld, conditioned or delayed, if pursuant
to or as a result of such concession, settlement or compromise, (i) injunctive
relief or specific performance would be imposed against the Indemnified Party,
(ii) such concession, settlement or compromise would lead to liability or create
any financial or other obligation on the part of the Indemnified Party for
which
the Indemnified Party is not entitled to indemnification hereunder, or (iii)
such concession, settlement or compromise will not result in a full release
of
the Indemnified Party with respect to such Claim. Notwithstanding the foregoing,
in the event the Indemnifying Party fails or is not entitled to contest and
defend a Claim, the Indemnified Party shall be entitled to contest, defend
and
settle such Claim in such manner and on such terms as the Indemnified Party
may
deem appropriate and the Indemnified Party shall be entitled to recover from
the
Indemnifying Party the amount of any settlement or judgment and, on an ongoing
basis, all costs and expenses of the Indemnified Party with respect thereto,
including interest from the date such costs and expenses were incurred. If
at
any time, in the reasonable opinion of the Indemnified Party, notice of which
shall be given in writing to the Indemnifying Party, any Claim seeks relief
which could have a material adverse effect on any Indemnified Party, the
Indemnified Party shall have the right to control or assume (as the case may
be)
the defense of any such Claim and the amount of any judgment or settlement
and
the reasonable costs and expenses of defense shall be included as part of the
indemnification obligations of the Indemnifying Party hereunder. If the
Indemnified Party should elect to exercise such right, the Indemnifying Party
shall have the right to participate in, but not control, the defense of such
Claim at the sole cost and expense of the Indemnifying Party.
-31-
(b) In
the
event any Indemnified Party should have a claim against any Indemnifying Party
that does not involve a Claim, the Indemnified Party shall deliver a notice
of
such claim within ninety (90) days of its knowledge of such claim to the
Indemnifying Party; provided, that, the failure to give such notice timely
shall
not affect any Indemnified Party’s right to indemnification unless (and then
only to the extent that) such failure or delay materially and adversely affects
the Indemnifying Party’s rights. Included in such written notice will be a
statement of the amount of the Loss, a brief explanation of the Loss, and
instructions for payment by certified or bank cashier’s check or by wire
transfer of immediately available funds. If the Indemnifying Party notifies
the
Indemnified Party that it does not dispute the claim described in such notice,
the Loss in the amount specified in the Indemnified Party’s notice shall be
deemed a liability of the Indemnifying Party and the Indemnifying Party shall
pay the amount of such Loss to the Indemnified Party on demand.
9.4 Limits
on Indemnification.
(a) With
respect to any claims arising under Section
9.1
or
Section
9.2,
an
Indemnified Party shall not be entitled to indemnification until the aggregate
Losses suffered by the Indemnified Parties exceed Two Hundred Fifty Thousand
Dollars ($250,000) (the “Threshold”),
whereupon the Indemnifying Party shall be liable to indemnify the Indemnified
Party under this Article
9
for all
Losses incurred in excess of the Threshold; provided,
however,
that
such Threshold shall not apply to any claims arising under Section
9.1(a)
that are
a result of a breach by Seller of any of its representations in Sections
3.3, 3.4(b), 3.5 and 3.9,
or
Sections
9.1(b), (c) or (f),
or
based on fraud, willful misconduct or intentional misrepresentation. No Party
shall be entitled to recovery under this Article
9
for any
amounts that are paid by insurance.
(b) The
maximum aggregate liability of Seller to indemnify the Buyer Indemnified Parties
under this Article
9
shall be
thirty percent (30%) of the Purchase Price (the “Cap”);
provided,
however,
that,
the Cap shall not apply to, and Seller’s maximum aggregate liability to
indemnify the Buyer Indemnified Parties under this Article
9
shall be
an amount equal to the Purchase Price, as adjusted pursuant to Section
2.2,
with
respect to any claims arising under Section
9.1(a)
that are
a result of a breach by Seller of any representations in Sections
3.4(b) or 3.5,
any
claims arising under Section
9.1(f)
and any
claims based on fraud, willful misconduct or intentional
misrepresentation.
9.5 Survival.
(a) The
right
of an Indemnified Party to initiate any action for breach of any representation,
warranty, covenant or obligation contained in this Agreement and to demand
and
receive any indemnification in respect thereof or otherwise pursuant to this
Article
9
shall
survive the Closing and terminate and expire eighteen (18) months after the
Closing Date (the “Expiration
Date”),
except as provided in Section
9.5(b).
If a
claim for indemnification is made in good faith by an aggrieved Party against
the other Party and notice of such claim is provided to such other Party in
writing prior to the Expiration Date (which notice shall describe in reasonable
detail the basis of such claim), the rights of the aggrieved Party under this
Article
9
shall
survive the Expiration Date with respect to such claim until such claim has
been
finally resolved. If a Party fails to provide written notice to the other Party
of an alleged breach of any representation, warranty, covenant or obligation
contained in this Agreement prior to the Expiration Date, the facts and
circumstances on which such alleged breach is founded shall be deemed for all
purposes not to be a breach or a proper basis for any claim whatsoever with
respect to such representation, warranty, covenant or obligation.
(b) Notwithstanding
the terms of Section
9.5(a),
any
claims based on fraud, willful misconduct or intentional misrepresentation
or
the following provisions shall not terminate and expire on but shall survive
the
Expiration Date until fifteen (15) days after the expiration of the longest
relevant federal or state statute of limitations period with respect to such
claims, or three (3) years after the Closing Date, whichever is longer:
Sections
3.3, 3.5, 3.9, 3.13, 3.16, 9.1(f), 11.5, and 11.9.
-32-
9.6 Tax
Treatment of Indemnification Payments.
Unless
otherwise required by applicable Law, all indemnification payments shall
constitute adjustments to the Purchase Price for all Tax purposes, and no Party
shall take any position inconsistent with such characterization.
ARTICLE
10
TERMINATION
10.1 Termination.
(a) This
Agreement may be terminated at any time prior to the Closing:
(i) by
mutual
written consent of Buyer and Seller;
(ii) by
either
Buyer or Seller if the other Party is in material breach of any representation,
warranty or covenant set forth in this Agreement and such breach, if capable
of
cure, is not cured within ten (10) days after written notice thereof to such
other Party;
(iii) by
Buyer
if any of the conditions specified in Article
6
shall
not have been fulfilled by the time required and shall not have been waived
by
Buyer; or
(iv) by
Seller
if any of the conditions specified in Article
7
shall
not have been fulfilled by the time required and shall not have been waived
by
Seller.
(b) If
the
Closing has not occurred prior to the date that is one hundred eighty (180)
days
after the Effective Date, this Agreement may be terminated by any party which
is
not in breach of the provisions hereof.
10.2 Effect
of Termination.
In the
event of termination of this Agreement as provided above, this Agreement shall
forthwith become void, and there shall be no liability on the part of Seller
or
Buyer except as otherwise expressly stated herein; provided,
however,
that if
this Agreement is terminated and Seller is not in breach hereof, Buyer shall
reimburse Seller for the cost of any audit performed to satisfy the requirements
of Section
3.6(b);
provided, further,
that
this Section
10.2
shall
not release (a) any Party from liability resulting from a breach by such
Party under this Agreement or (b) any Party from its obligations under
Article
9
and
Sections
11.1, 11.2, 11.7, 12.2, 12.3, 12.6 and 12.10.
ARTICLE
11
ADDITIONAL
AGREEMENTS
11.1 Press
Release and Announcements.
No
press release related to this Agreement or the transaction contemplated hereby,
or other written announcements to the employees, customers or suppliers of
the
Company, shall be issued without the joint approval of Buyer and Seller, except
in accordance with the Laws, rules, regulations and orders of any governmental
entity (including applicable federal securities Laws and stock exchange listing
rules).
-33-
11.2 Confidentiality.
Buyer
and Seller acknowledge the continued effectiveness of that certain
Confidentiality Agreement entered into by and between Macquarie Infrastructure
Company Inc. and AAC as of April 21, 2006, as may be modified from time to
time
by written consent (the “Confidentiality
Agreement”).
Notwithstanding the foregoing, Seller shall cause AAC to permit Buyer to make
public disclosures regarding the Business, including its financial condition
and
results of operations, in accordance with the Laws, rules, regulations and
orders of any governmental entity (including applicable federal securities
Laws
and stock exchange listing rules).
11.3 Remittances.
All
remittances, mail and other communications relating to the Company received
by
Seller at any time after the Closing Date shall be immediately turned over
to
Buyer.
11.4 Cooperation
to Obtain Consents.
From
the date of this Agreement through the Closing Date, the Parties shall consult
and cooperate with each other and use commercial best efforts to (a) obtain
all required governmental and third party consents, (b) make any required
filings or submissions with governmental authorities, and (c) cause the
conditions precedent to Closing set forth in Section
6.1
and
Section
7.1
to be
satisfied, all as may be necessary for the consummation of the Closing and
the
transactions contemplated by this Agreement.
11.5 Tax
Matters.
(a) Seller
shall indemnify and hold the Buyer Indemnified Parties harmless from and against
any and all Taxes (a) imposed on the Company or its assets or arising in
connection with or out of the operation of the Company’s Business, in each case
to the extent such Taxes are attributable to Tax periods or portions thereof
ending on or before the Closing Date (determined, with respect to Tax periods
that begin before and end after the Closing Date, in accordance with the
allocation provisions of Section
11.5(b))
or (b)
owing by any Person (other than the Company) for which Company may be liable
by
law or contract, provided that in either case the indemnified amount should
be
reduced by the amount of Taxes that were reserved for on the Closing Balance
Sheet to the extent that such Taxes were taken into account as a reduction
to
the Purchase Price pursuant to Section
2.2
of this
Agreement. For purposes of Article
9,
the
amount of Taxes subject to the foregoing indemnity shall be considered a Loss
incurred by a Buyer Indemnified Party and as if such Loss were attributable
to a
breach of representation under Section
3.9.
(b) For
purposes of this Section
11.5,
Taxes
incurred with respect to the Business or the Company for any period ending
on or
before the Closing Date shall be the responsibility of Seller and such taxes
for
any period commencing after the Closing Date shall be the responsibility of
Buyer, (A) except as provided in (B) and (C) below, to the extent feasible,
on a
specific identification basis, according to the date of the event or transaction
giving rise to the Tax, and (B) except as provided in (C) below, with respect
to
periodically assessed ad valorem Taxes and Taxes not otherwise feasibly
allocable to specific transactions or events, in proportion to the number of
days in such period occurring before the Closing Date compared to the total
number of days in such taxable period, and (C) in the case of any Tax based
upon
or related to income or receipts, in an amount equal to the Tax which would
be
payable if the relevant taxable period ended on the Closing Date. All
determinations necessary to give effect to the foregoing allocations shall
be
made in a manner consistent with prior practices of the Company.
-34-
(c) After
the
Closing, Buyer and Seller shall cooperate fully, as and to the extent reasonably
requested by the other party, in connection with the preparation of all Tax
Returns required with respect to the Business or the Company relating to taxable
periods (or portions thereof) beginning on or before the Closing and shall
provide or cause to be provided to one another any records and other information
reasonably requested by the other Party in connection therewith as well as
reasonable access to the other Party’s accountant. To the extent Taxes are
payable which have been reserved upon the Closing Balance Sheet which were
taken
into account as a reduction to the Purchase Price pursuant to Section 2.2
of this
Agreement, the Company shall provide the funds up to the amount of such reserve
to pay any Taxes. To the extent such Taxes exceed any such reserve, Seller
shall
provide the funds to pay any such Taxes for which Seller is responsible under
this Section 11.5.
After
the Closing, Buyer and Seller shall cooperate fully in connection with any
Tax
investigation, audit or other proceeding relating to the Business or the Company
for any taxable periods (or portions thereof) beginning on or before the
Closing. Any information obtained pursuant to this Section
11.5(c)
or
pursuant to any other Section hereof providing for the sharing of information
or
the review of any Tax Return or other schedule relating to Taxes shall be
subject to the terms of the Confidentiality Agreement.
(d) The
Purchase Price shall be allocated in accordance with the Allocation
Statement
annexed
as Schedule
11.5(d)
hereto.
The Allocation Statement has been prepared in accordance with Section 1060
of
the Code and any comparable provisions of state, local or foreign Law, as
appropriate. Buyer, the Company and Seller will report the allocation of the
total consideration among the assets of the Company in a manner consistent
with
the Allocation Statement and will act in accordance with the Allocation
Statement in the preparation and timely filing of all Tax Returns (including
filing Form 8594 with their respective federal income Tax Returns for the
taxable year that includes the Closing Date and any other forms or statements
required by the Code, Regulations, the IRS or any applicable state or local
Tax
authority). Buyer and Seller agree to promptly provide the other Party with
any
reasonable additional information with respect to Buyer or Seller, as the case
may be, and reasonable assistance required to complete Form 8594 or to compute
Taxes arising in connection with (or otherwise affected by) the transactions
contemplated by this Agreement. Each Party will promptly inform the other of
any
challenge by any Tax authority to any allocation made pursuant to this
Section
11.5(d);
provided, however,
that
Seller shall be fully responsible for conducting and managing any such
challenge, but agrees to keep Buyer reasonably informed with respect to the
status of such challenge and covenants not to settle any such challenge without
Buyer’s prior written consent (which consent will not be unreasonably withheld,
delayed or conditioned).
11.6 Reporting
Cooperation.
Seller
agrees to provide commercially reasonable assistance to Buyer and its Affiliates
(at Buyer’s sole cost and expense) to enable Buyer and its Affiliates to prepare
any and all disclosure material required by applicable federal securities Laws
and regulations promulgated by the Securities and Exchange Commission pursuant
thereto (including financial statements and related notes in compliance
with federal securities Laws), and to enable the Company’s accountants to
consent to the inclusion of such financial statements in appropriate filings
with the Securities and Exchange Commission. Seller
expressly acknowledges that Buyer will be required to prepare audited financial
statements for the Company and its affiliates that are parties to the Santa
Xxxxxx Purchase Agreement for the period ended December 31, 2004, within
seventy-five (75) days after Closing, and Seller covenants and agrees to provide
Buyer with such documents, certifications and/or instruments as Buyer reasonably
requests in connection therewith, including responses to inquiries from Buyer’s
auditors regarding the Business and management of the Company.
-35-
11.7 Further
Assurances.
Each
Party agrees to execute and deliver such further documents and instruments
and
to take such further actions after the Closing as may be necessary or desirable
and reasonably requested by the other Party to give effect to the transactions
contemplated by this Agreement.
11.8 Litigation
Support.
In
the
event and for so long as Buyer, the Company or any of their Affiliates actively
is contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any
fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction that existed
on or prior to the Closing Date involving the Company, Seller will cooperate
with Buyer, the Company and each of their Affiliates in the contest or defense
and provide such testimony and access to Seller’s books and records as shall be
reasonably necessary in connection with the contest or defense, all at the
sole
cost and expense of Buyer (unless the contesting or defending party is entitled
to indemnification therefor under Article
9
hereof).
This provision shall be inapplicable to any direct claims between Seller on
the
one hand and Buyer, the Company and their Affiliates on the other
hand.
11.9 Non-Competition.
(a) To
induce
Buyer to enter into this Agreement, Seller agrees that, for a period of
twenty-four (24) months after the Closing Date, Seller will not, and will cause
its Affiliates not to, directly or indirectly, through any corporation, limited
liability company, partnership, association, joint venture or other entity,
purchase, invest in, fund or otherwise engage in, or assist the establishment
of, a business which includes fueling rights at Xxxxxxx International Airport
or
Santa Xxxxxx Municipal Airport as principal or agent.
(b) To
induce
Buyer to enter into this Agreement, Seller agrees that, for a period of twenty
four (24) months after the Closing Date, Seller will not, and will cause its
Affiliates not to:
(i) solicit
business, that is competitive with the Business, from any customer of the
Company; or
-36-
(ii) hire
or
solicit to perform services (as an employee, consultant or otherwise) any
persons listed on Schedule
3.14(a)(i)
or take
any actions which are intended to persuade any such person to terminate his
or
her association with the Company.
(c) From
and
after the Closing, Seller shall, and shall cause his Affiliates to, keep
confidential and not disclose to any other Person, other than Seller’s
accountants, attorneys or financial advisors or to the extent necessary to
fulfill any legal or existing contractual obligation (provided,
that,
any
such Person to whom information is disclosed is informed of its confidential
nature and is directed to treat the information confidentially), or use for
their own benefit or the benefit of any other Person, any information regarding
the Company, its Affiliates and the material terms of this Agreement (including
the Purchase Price).
(d) Seller
acknowledges and agrees that Buyer would be irreparably damaged in the event
any
of the provisions of this Section
11.9
were not
performed in accordance with their specific terms or were otherwise breached.
Accordingly, Seller agrees that, in addition to any other remedy to which Buyer
may be entitled at law or in equity, Buyer shall be entitled to seek an
injunction or injunctions to prevent breaches of the provisions of this
Section
11.9
and to
seek to enforce specifically such provisions.
11.10 Benefit
Plans.
Seller
covenants and agrees to cause AAC to (i) permit Hired Employees to roll over
any
loans from the American Airports Corporation 401K Retirement Savings Plan (the
“401(k)
Plan”)
in-kind to a similar plan maintained by a New Employer or an Affiliate and
(ii)
cooperate with Buyer to provide a method for Hired Employees to continue to
make
loan repayments to the 401(k) Plan, if required, for a reasonable time after
the
Closing Date. Seller shall cause AAC or another ERISA Affiliate to continue
to
maintain Group Health Plans and to offer continuation coverage under COBRA
to
all M&A qualified beneficiaries (as defined in Treas. Reg. Section
54.4980B-9, Q&A 4) for the maximum continuation period available under
COBRA. Seller acknowledges that consummation of the transactions contemplated
by
this Agreement will result in a partial termination of the 401(k) Plan, and
Seller will cause AAC to cause Hired Employees to become one hundred percent
(100%) vested in the accrued benefits thereunder as of the Closing Date.
Seller
shall cause the Benefit Plans which are Group Health Plans to pay all claims
incurred on or before the Closing Date and by participating Hired Employees
or
their dependents or beneficiaries to the extent such claims would be paid in
the
absence of the transactions contemplated by this agreement.
11.11 Use
of
Supermarine Name.
Buyer
acknowledges and agrees that no rights in the name “Supermarine” are being
acquired by Buyer or retained by the Company. Promptly following the Closing,
Buyer shall change the name of the Company from “Supermarine of Xxxxxxx, LLC,”
and shall cease using the name “Supermarine” as soon as commercially practicable
following the Closing, but in any event, if no third party consents are required
to cease using the name “Supermarine”, no later than thirty (30) days following
the Closing, but if third party consents are required, and provided that Buyer
is using commercially reasonable efforts to obtain such third party consents,
no
later than one
(1)
year following
the Closing. Buyer shall cooperate with the Sellers and execute such documents
as the Sellers reasonably request to transfer to the Sellers any and all
interests in the name “Supermarine.”
-37-
11.12 Property
Tax Escrow and Promissory Note.
The
Company has established an escrow at Chicago Title Insurance Company into which
it has deposited One Hundred Eighteen Thousand Dollars ($118,000) (the
“Rifton
Escrow Account”)
as
security for property taxes assessed against the Facility by the City of New
Windsor for the years 2004 and 2005 (the “2004-5
Property Taxes”).
The
Property Taxes are being contested by the State of New York. In connection
with
the establishment of the Rifton Escrow Account, the Company issued to Rifton
Management LLC a promissory note in the amount of Fifty-Nine Thousand Dollars
($59,000) (the “Rifton
Note”).
At
Closing, the Company will assign to Seller all of its right, title and interest
in and to the Rifton Escrow Account. Seller will assume the obligation of the
Company, and be substituted as the primary obligor, under the Rifton Note.
Seller shall indemnify Company from and against the 2004-5 Property Taxes and
from and against any obligation with respect to the Rifton Note.
ARTICLE
12
MISCELLANEOUS
12.1 Amendment
and Waiver.
This
Agreement may be amended, and any provision of this Agreement may be waived;
provided that any such amendment or waiver shall be binding on the Party against
whom the amendment is being asserted only if such amendment or waiver is set
forth in a writing executed by such Party against whom the amendment is being
asserted and then only to the specific purpose, extent and instance so provided.
12.2 Notices.
All
notices, demands and other communications to be given or delivered under or
by
reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given when personally delivered, when mailed by certified
mail, return receipt requested, when sent by facsimile with confirmation of
receipt received, or when delivered by overnight courier with executed receipt.
Notices, demands and communications to Seller or Buyer shall, unless another
address is specified in writing in accordance herewith, be sent to the address
indicated below:
Notices
to Seller:
Xxxxx
X.
Xxxxx
Chairman
& CEO
American
Airports Corporation
0000
Xxxxxxx Xxxx.
Xxxxx
#000 Xxxx
Xxxxx
Xxxxxx, XX 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
with
a
copy to:
Xxxxxxx
Xxxxxxx, Esq.
Xxxxxxxxx
Xxxxxxx Fields Claman & Machtinger LLP
0000
Xxxxxx xx xxx Xxxxx
Xxxxx
0000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Tel:
(000) 000-0000
Fax:
(000) 000-0000
-38-
Notices
to Buyer:
Macquarie
FBO Holdings LLC
c/o
Macquarie Infrastructure Company
000
Xxxx
00xx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxx Xxxxxx
Tel:
(000) 000-0000
Fax:
(000) 000-0000
with
copies to:
Executive
Air Support, Inc.
0000
Xxxxxxxxxxxxx Xxxxxxx
Xxxxx
0000
Xxxxx,
Xxxxx 00000
Attention:
Xxxxx X. Xxxxxx
Tel:
(000) 000-0000
Fax:
(000) 000-0000
and
Pillsbury
Xxxxxxxx Xxxx Xxxxxxx LLP
0000
Xxxxxx Xxxx., Xxxxx 0000
XxXxxx,
Xxxxxxxx 00000
Attention:
Xxxxx X. Xxxxxx, Esq.
Xxxxx
X.
Xxxxxxx, Esq.
Tel:
(000) 000-0000
Fax:
(000) 000-0000
12.3 Assignment.
This
Agreement and all of the provisions hereof shall be binding upon and inure
to
the benefit of the Parties and their respective successors and assigns. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assignable by either Party without the prior written consent of the other
Party; provided,
however,
that
Buyer may, upon written notice to Seller, assign in whole its right, title
and
interest under this Agreement to any of its Affiliates; provided,
further,
that
such assignment shall not release Buyer from its indemnification and other
obligations hereunder.
12.4 Captions.
The
captions used in this Agreement are for convenience of reference only and do
not
constitute a part of this Agreement and shall not be deemed to limit,
characterize or in any way affect any provision of this Agreement, and all
provisions of this Agreement shall be enforced and construed as if no caption
had been used in this Agreement.
-39-
12.5 Complete
Agreement; Schedules and Exhibits.
Each
schedule and exhibit delivered pursuant to the terms of this Agreement shall
be
in writing and shall constitute a part of this Agreement, although schedules
need not be attached to each copy of this Agreement. This Agreement, together
with such schedules and exhibits, and the documents referred to herein contain
the complete agreement between the Parties and supersede any prior
understandings, agreements or representations by or between the Parties, written
or oral, which may have related to the subject matter hereof in any
way.
12.6 Governing
Law.
The
Laws of the State of California govern all questions concerning the
construction, validity and interpretation of this Agreement and the performance
of the obligations imposed by this Agreement.
Each
Party has been represented by its own counsel in connection with the negotiation
and preparation of this Agreement and, consequently, each Party hereby waives
the application of any rule of Law that would otherwise be applicable in
connection with the interpretation of this Agreement, including but not limited
to any rule of law to the effect that any provision of this Agreement shall
be
interpreted or construed against the party whose counsel drafted that
provision.
12.7 Counterparts.
This
Agreement may be executed by facsimile transmission and in counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
12.8 Third
Party Beneficiaries.
Except
with respect to any indemnification claim by a Buyer Indemnified Party or Seller
Indemnified Party, nothing in this Agreement is intended or will be construed
to
entitle any Person, other than Buyer and Seller or their respective permitted
transferees and assigns, to any claim, cause of action, remedy or right of
any
kind.
12.9 Severability.
The
validity, legality or enforceability of the remainder of this Agreement will
not
be affected even if one or more of the provisions of this Agreement will be
held
to be invalid, illegal or unenforceable in any respect.
12.10 Expenses.
Except
as otherwise expressly set forth in this Agreement, each Party shall, whether
or
not the transactions contemplated hereby are consummated, pay all costs and
expenses incurred by or on behalf of such Party in connection with the
negotiation, execution and Closing of this Agreement and the transactions
contemplated hereby and its investigation and evaluation of the Membership
Interests and the Company. Notwithstanding
the foregoing, Buyer and Seller agree to share equally the fees and expenses
of
the Escrow Agent in connection with the Escrow Agreement and the transactions
contemplated thereby.
[Signatures
on Next Page]
-40-
IN
WITNESS WHEREOF, each of the Parties has duly executed and delivered this
Agreement as of the Effective Date.
SELLER:
| /s/ Xxxxx X. Xxxxx | ||
|
Xxxxx X. Xxxxx |
||
|
BUYER:
|
MACQUARIE FBO HOLDINGS LLC | |
| By: MACQUARIE INFRASTRUCTURE | ||
|
COMPANY
INC. (d/b/a Macquarie Infrastructure Company (USA)),
|
||
|
as
Managing Member
|
||
|
By: /s/ Xxxxx Xxxxxx
|
||
|
Name:
Xxxxx Xxxxxx
|
||
|
Its:
Chief Executive Officer
|
||
-41-
EXHIBIT
“A”
DEFINITIONS
|
A.
|
Certain
Matters of Construction.
For purposes of this Agreement,
in addition to the definitions referred to or set forth in this
Exhibit
“A”:
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1.
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Reference
to a particular Section of this Agreement will include all its
subsections.
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2.
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The
words “Party”
and “Parties”
will refer to Seller and Buyer.
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3.
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Definitions
will apply to both the singular and plural forms of the terms defined,
and
references to the masculine, feminine or neuter gender will include
each
other gender.
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4.
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All
references in this Agreement to any Exhibit or Schedule will, unless
the
context otherwise requires, be deemed to be a reference to an Exhibit
or
Schedule, as the case may be, to this Agreement, all of which are
made a
part of this Agreement.
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B. Definitions.
“2004-5
Property Taxes”
is
defined in Section
11.12.
“401(k)
Plan”
is
defined in Section
11.10.
“AAC”
is
defined in the recitals.
“Accounting
Principles”
is
defined in Section
2.2(a).
“Actual
Net Working Capital Adjustment”
is
defined in Section
2.2(c).
“Adjustment
in Favor of Buyer”
is
defined in Section
2.2(c).
“Adjustment
in Favor of Seller”
is
defined in Section
2.2(c).
“AEM
Agreement”
is
defined in Section
7.1(h).
“Affiliate”
means
an individual or entity that directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with,
a specified individual or entity. For purposes of this definition, “control”
shall include, without limitation, the exertion of significant influence over
an
individual or entity and shall be conclusively presumed as to any fifty percent
(50%) or greater equity interest.
“Allocation
Statement”
is
defined in Section
11.5(d).
“Audited
Statements”
is
defined in Section
3.6(b).
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“Benefit
Plans”
is
defined in Section
3.13(a).
“Business”
is
defined in the recitals.
“Business
Day”
means
any day other than a Saturday, Sunday, or day on which commercial banks are
authorized by law to close in New York City.
“Buyer”
is
defined in the Preamble.
“Buyer
Indemnified Parties”
is
defined in Section
9.1.
“Buyer
Objection Notice”
is
defined in Section
2.2(d).
“Cap”
is
defined in Section
9.4(b).
“Charter
Documents”
shall
mean, as applicable, the specified entity’s (i) certificate or articles of
incorporation or formation or other charter or organizational documents, and
(ii) bylaws or operating agreement, each as from time to time in
effect.
“Claim”
means
any action or proceeding instituted by any third party.
“Closing”
is
defined in Section
8.1.
“Closing
Date”
is
defined in Section
8.1.
“Closing
Date Balance Sheet”
is
defined in Section
2.2(b).
“Closing
Funds”
is
defined in Section
2.1.
“Closing
Net Working Capital”
is
defined in Section
2.2(b).
“Closing
Net Working Capital Adjustment”
is
defined in Section
2.2(a).
“COBRA”
means
Section 4980B of the Code, Part 6 of Title I of ERISA, similar provisions of
state law and applicable regulations relating to any of the
foregoing.
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Company”
is
defined in the recitals.
“Confidentiality
Agreement”
is
defined in Section
11.2.
“Contracts
Schedule”
means
Schedule
3.10.
“Effective
Date”
is
defined in the Preamble.
“Effective
Time”
is
defined in Section
8.1.
“Employee
Pension Benefit Plan”
has
the
meaning set forth in Section 3(2) of ERISA.
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“Employee
Welfare Benefit Plan”
has
the
meaning set forth in Section 3(1) of ERISA.
“Encumbrance”
means
any mortgage, charge, claim, option, right to acquire, pledge, lien, security
interest, attachment or other encumbrance, including any agreement to create
any
of the foregoing.
“Environmental
Law”
means
all applicable Laws pertaining to the environment, Hazardous Materials,
pollution or occupational safety and health, and includes without limitation
the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
§§ 9601 et. seq. (“CERCLA”),
Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act
of
1986 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et
seq., the Oil Pollution Act of 1990, 33 U.S.C. §§ 2701 et seq. and
implementing state Laws promulgated thereunder.
“Environmental
Permits”
means
all material permits, approvals, certificates and licenses required under any
Environmental Law.
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended.
“ERISA
Affiliate”
means
each Person that is or was required to be treated as a single employer with
the
Company under Section 414 of the Code or Section 4001(b)(1) of
ERISA.
“Escrow
Agent”
means
Wachovia Bank.
“Escrow
Agreement”
is
defined in Section
2.1.
“Escrow
Funds”
is
defined in Section
2.1.
“Estimated
Net Working Capital Adjustment”
is
defined in Section
2.2(a).
“Expiration
Date”
is
defined in Section
9.5.
“Facility”
is
defined in the recitals.
“Final
Payment”
is
defined in Section
2.2(f).
“Financial
Statements”
is
defined in Section
3.6(b).
“Funded
Indebtedness”
means
(i) all indebtedness for money borrowed (whether in the form of direct
loans or capital leases) and purchase money indebtedness, (ii) indebtedness
of the type described in clause (i) above secured by any lien upon
property owned by the Company, even though the Company has not in any manner
become liable for the payment of such indebtedness, (iii) interest expense
accrued but unpaid, and all prepayment premiums, on or relating to any of such
indebtedness, (iv) indebtedness of the type described in
clause (i) above guaranteed, directly or indirectly, by Company, and
(v) any purchase money indebtedness for premiums for insurance maintained
by the Company to the extent the outstanding balance thereof exceeds the
amortized value of the premiums.
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“GAAP”
means
U.S. generally accepted accounting principles.
“Ground
Lease”
means
that certain FBO Agreement, dated July 4, 1997, by and between the New York
State Department of Transportation (as assigned to SWFAA) and Rifton
Enterprises, Inc. (as assigned to the Company), and under the Hangar 112 Lease,
the Hangar 118 Lease, the FBO Agreement and the Commercial Operating Permit,
each as defined in the AEM Agreement, for premises and operations located at
Xxxxxxx International Airport, including all amendments, supplements and
modifications thereto.
“Group
Health Plan”
has
the
meaning set forth in Code Section 5000(b).
“Hazardous
Material”
means
any substance, pollutant, contaminant, radiation or chemical which has been
determined under applicable Environmental Laws to be hazardous to human health
or safety or the environment including, without limitation, all of those
substances which are listed or defined as “pollutants,” “contaminants,”
“hazardous materials,” “hazardous wastes,” “hazardous substances,” “toxic
substances,” “radioactive materials,” or other similar designations pursuant to
Environmental Laws.
“Hired
Employees”
is
defined in Section
5.8(b)(ii).
“HSR
Act”
means
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended from time
to time.
“Indemnified
Party”
means
a
Buyer Indemnified Party or a Seller Indemnified Party, as applicable.
“Indemnifying
Party”
means
the Party obligated to indemnify an Indemnified Party.
“Indemnifiable
Losses”
means
any Loss for or against which any Party is entitled to indemnification under
this Agreement.
“Insurance
Policies”
is
defined in Section
3.10(b).
“Intellectual
Property”
means
all trademarks and trade names, trademark and trade name registrations, service
marks and service xxxx registrations, copyrights and copyright registrations,
patent and patent applications and all material licenses and other agreements
and information relating to technology, know-how, software or processes used
in
or otherwise necessary to the Business, whether proprietary to the Company
or
licensed or otherwise authorized to use by others.
“Interim
Unaudited Statements”
is
defined in Section
3.6(b).
“Law”
means
any federal, state or local law, statute, rule or regulation and any resolution,
ruling, ordinance, enactment, judgment, order, decree, directive or other
requirement having the force of law, including any official interpretation
of
any of the foregoing, of or by any governmental authority, as in effect from
time to time.
“Lease”
and
“Leases”
are
defined in Section
3.8(a).
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“Leases
Schedule”
means
Schedule
3.8.
“Liabilities
Schedule”
means
Schedule
3.4.
“Loss”
means
any and all costs and expenses (including, but not limited to, reasonable
professionals’ fees), damages and losses actually incurred by the Indemnified
Party.
“Material
Contracts”
is
defined in Section
3.10(b).
“Membership
Interests”
is
defined in the recitals.
“New
Employer”
is
defined in Section
5.8(b).
“Offerees”
is
defined in Section
5.8(b)(i).
“Pension
Plans”
is
defined in Section
3.13(a).
“Permits”
is
defined in Section
3.15.
“Person”
means
any natural person, limited liability company, partnership, trust,
unincorporated organization, corporation, association, joint stock company,
business, group, governmental authority (including any subdivision thereof)
or
other entity or body.
“Personal
Property”
is
defined in Section
3.8(c).
“Prohibited
Transactions”
has
the
meaning set forth in ERISA Section 406 and Section 4975 of the
Code.
“Purchase
Price”
is
defined in Section
2.1.
“Referee” is
defined in Section
2.2(e).
“Rifton”
is
defined in Section
7.1(i).
“Rifton
Agreement”
is
defined in Section
7.1(i).
“Rifton
Escrow Account”
is
defined in Section
11.12.
“Rifton
Note”
is
defined in Section
11.12.
“Seller”
is
defined in the Preamble.
“Seller
Adjustment Notice”
is
defined in Section
2.2(c).
“Seller
Indemnified Parties”
is
defined in Section
9.2.
“Southwest
Fuel Farm Lease Agreement”
is
defined in Section
7.1(j).
“Southwest
Quadrant Fuel Farm”
is
defined in Section
7.1(j).
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“Subsidiary”
means
any entity of which the Company (or other specified entity) owns directly or
indirectly through a Subsidiary, a nominee arrangement or otherwise at least
a
majority of the outstanding capital stock (or other shares of beneficial
interest) entitled to vote generally.
“SWFAA”
is
defined in Section
7.1(h).
“Target
Closing Net Working Capital”
is
defined in Section
2.2(a).
“Tax”
means
any foreign, federal, state, county or local income, sales and use, excise,
franchise, real and personal property, transfer, gross receipt, capital stock,
production, business and occupation, disability, employment, payroll, severance
or withholding tax or charge imposed by any governmental entity, together with
any interest, assessments, fines additions and penalties (civil or criminal)
related thereto or to the nonpayment thereof, and any Loss in connection with
the determination, settlement or litigation of any Tax liability; (ii)
any
liability for the payment of any amounts of the type described in clause (i)
as
the result of being (or ceasing to be) a member of an affiliated, consolidated,
combined or unitary group (or being included (or required to be included) in
any
Tax Return related thereto); and (iii) any liability for the payment of any
amounts as a result of an express or implied obligation to indemnify or
otherwise assume or succeed to the liability of any other Person with respect
to
the payment of any amounts of the type described in clause (i) or clause
(ii).
“Tax
Return”
means
a
report, return or other information supplied to or required to be supplied
to a
governmental entity with respect to Taxes including
any schedule or attachment thereto, and including any amendment thereof,
and
shall
be treated as a Tax Return of each entity included or required to be included
in
a return filed on a combined, consolidated, unitary or similar.
“Threshold”
is
defined in Section
9.4(a).
“Transaction
Documents”
is
defined in Section
8.3.
“Unaudited
2005 Statements”
is
defined in Section
3.6(a).
“Unaudited
2006 Statements”
is
defined in Section
3.6(a).
“Unaudited
Financial Statements”
is
defined in Section
3.6(a).
“Welfare
Plan”
is
defined in Section
3.13(a).
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