MEMBER INTEREST PURCHASE AGREEMENT
by and between
SR TECHNICS GROUP AMERICA, INC.
and
XXXXXX LEASE FINANCE CORPORATION
regarding
PACIFIC GAS TURBINE CENTER, LLC
NOVEMBER 7, 2000
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND USE OF TERMS.....................................1
1.1 CONSTRUCTION.....................................................1
1.2 DEFINITIONS......................................................1
ARTICLE 2 SALE AND TRANSFER OF INTERESTS; CLOSING..........................2
2.1 INTERESTS........................................................2
2.2 PURCHASE PRICE...................................................2
2.3 CLOSING..........................................................2
2.4 CLOSING DELIVERIES...............................................2
2.5 ADJUSTMENT PROCEDURE.............................................3
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER.........................4
3.1 ORGANIZATION AND GOOD STANDING...................................4
3.2 ENFORCEABILITY; NO CONFLICT......................................5
3.3 CAPITALIZATION...................................................6
3.4 FINANCIAL STATEMENTS.............................................6
3.5 BOOKS AND RECORDS................................................6
3.6 ACCOUNTS RECEIVABLE..............................................7
3.7 INVENTORY........................................................7
3.8 NO UNDISCLOSED LIABILITIES.......................................7
3.9 NO MATERIAL ADVERSE CHANGE.......................................7
3.10 ABSENCE OF CERTAIN CHANGES AND EVENTS............................7
3.11 PROPERTIES AND ASSETS; ENCUMBRANCES..............................8
3.12 CONDITION AND SUFFICIENCY OF TANGIBLE ASSETS.....................9
3.13 INTELLECTUAL PROPERTY............................................9
3.14 CONTRACTS; NO DEFAULTS..........................................11
3.15 CUSTOMERS AND SUPPLIERS.........................................12
3.16 INSURANCE.......................................................12
3.17 TAXES...........................................................13
3.18 EMPLOYEE BENEFITS...............................................14
3.19 LABOR RELATIONS; EMPLOYMENT LAW COMPLIANCE......................16
3.20 ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS.......................17
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TABLE OF CONTENTS
(continued)
Page
3.21 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS.18
3.22 CERTAIN PROCEEDINGS; ORDERS.....................................19
3.23 EMPLOYEE RESTRICTIONS...........................................19
3.24 RELATIONSHIPS WITH RELATED PERSONS..............................19
3.25 BROKERS OR FINDERS..............................................20
3.26 DISCLOSURE......................................................20
3.27 OBLIGATIONS IN OPERATING AGREEMENT..............................20
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER.........................20
4.1 ORGANIZATION....................................................20
4.2 ENFORCEABILITY; NO CONFLICT.....................................20
4.3 CERTAIN PROCEEDINGS.............................................21
4.4 INVESTMENT INTENT...............................................21
4.5 BROKERS OR FINDERS..............................................22
4.6 DISCLOSURE......................................................22
ARTICLE 5 COVENANTS OF SELLER BEFORE CLOSING..............................22
5.1 ACCESS AND INVESTIGATION........................................22
5.2 REPORTS ON THE STATUS OF THE COMPANY............................23
5.3 NEGATIVE COVENANT...............................................23
5.4 REQUIRED APPROVALS..............................................23
5.5 NOTIFICATION....................................................23
5.6 NO NEGOTIATION..................................................23
5.7 REASONABLE COMMERCIAL EFFORTS...................................24
ARTICLE 6 COVENANTS OF BUYER BEFORE CLOSING...............................24
6.1 REQUIRED APPROVALS..............................................24
6.2 NOTIFICATION....................................................24
6.3 REASONABLE COMMERCIAL EFFORTS...................................24
ARTICLE 7 CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE.............24
7.1 ACCURACY OF REPRESENTATIONS.....................................25
7.2 SELLER'S PERFORMANCE............................................25
7.3 CONSENTS........................................................25
7.4 ADDITIONAL DOCUMENTS............................................25
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TABLE OF CONTENTS
(continued)
Page
7.5 NO PROCEEDINGS..................................................26
7.6 NO CLAIM REGARDING EQUITY OWNERSHIP OR SALE PROCEEDS............26
7.7 NO PROHIBITION..................................................26
7.8 OPERATING AGREEMENT AMENDMENT...................................26
ARTICLE 8 CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE............26
8.1 ACCURACY OF REPRESENTATIONS.....................................26
8.2 BUYER'S PERFORMANCE.............................................27
8.3 CONSENTS........................................................27
8.4 ADDITIONAL DOCUMENTS............................................27
8.5 NO PROCEEDINGS..................................................27
ARTICLE 9 TERMINATION.....................................................28
9.1 TERMINATION EVENTS..............................................28
9.2 EFFECT OF TERMINATION...........................................28
ARTICLE 10 INDEMNIFICATION; REMEDIES.......................................29
10.1 SURVIVAL, RIGHT TO INDEMNIFICATION; WAIVER......................29
10.2 INDEMNIFICATION BY SELLER.......................................29
10.3 INDEMNIFICATION BY BUYER........................................30
10.4 TIME LIMITATIONS................................................30
10.5 LIMITATIONS ON INDEMNIFICATION--SELLER..........................31
10.6 LIMITATIONS ON INDEMNIFACTION--BUYER............................31
10.7 PROCEDURE FOR INDEMNIFICATION--DEFENSE OF THIRD-PARTY CLAIMS.....32
10.8 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS......................33
ARTICLE 11 TAX MATTERS.....................................................33
11.1 TAX RETURNS.....................................................33
11.2 INDEMNIFICATION OF SELLER.......................................33
11.3 INDEMNIFICATION OF BUYER........................................33
11.4 APPORTIONMENT OF TAXES..........................................34
11.5 INDEMNIFICATION PROCESS.........................................34
11.6 TIMING OF PAYMENT...............................................34
11.7 CHARACTERIZATION OF INDEMNITY PAYMENT...........................35
11.8 TRANSACTIONAL TAXES.............................................35
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TABLE OF CONTENTS
(continued)
Page
11.9 TAX SHARING AGREEMENTS..........................................35
11.10 TAX ELECTIONS...................................................35
11.11 TAX RECORDS.....................................................35
11.12 FOREIGN INVESTMENT IN REAL PROPERTY AFFIDAVIT...................35
11.13 MISCELLANEOUS...................................................35
ARTICLE 12 GENERAL PROVISIONS..............................................36
12.1 EXPENSES........................................................36
12.2 PUBLIC ANNOUNCEMENTS............................................36
12.3 CONFIDENTIALITY.................................................36
12.4 NOTICES.........................................................37
12.5 FURTHER ASSURANCES..............................................38
12.6 INCORPORATION OF SCHEDULES......................................38
12.7 ENTIRE AGREEMENT AND MODIFICATION...............................38
12.8 DISCLOSURE SCHEDULE.............................................39
12.9 TIME OF ESSENCE.................................................39
12.10 SEVERABILITY....................................................39
12.11 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS..............39
12.12 ENFORCEMENT OF AGREEMENT........................................39
12.13 WAIVER..........................................................40
12.14 ARBITRATION; SERVICE OF PROCESS.................................40
12.15 GOVERNING LAW...................................................41
12.16 COUNTERPARTS....................................................41
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MEMBER INTEREST PURCHASE AGREEMENT
This Member Interest Purchase Agreement is made as of November 7, 2000, by
and between SR Technics Group America, Inc., a Delaware corporation ("Buyer"),
and Xxxxxx Lease Finance Corporation, Inc., a Delaware corporation ("Seller").
PRELIMINARY STATEMENT
Seller desires to sell, and Buyer desires to purchase, 50% of the
outstanding membership interests (the "Interests") of Pacific Gas Turbine
Center, LLC, a Delaware limited liability company (the "Company"), on the terms
set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
ARTICLE 1
DEFINITIONS AND USE OF TERMS
1.1 CONSTRUCTION
Any reference in this Agreement to an "Article," "Section" or "Part"
refers to the corresponding Article, Section and Part of this Agreement or the
Disclosure Schedule, unless the context indicates otherwise. The headings of
Articles and Sections are provided for convenience only and should not affect
the construction or interpretation of this Agreement. All words used in this
Agreement should be construed to be of such gender or number as the
circumstances require. The terms "include" or "including" indicate examples of a
foregoing general statement and not a limitation on that general statement. Any
reference to a statute refers to the statute, any amendments or successor
legislation, and all regulations promulgated under or implementing the statute,
as in effect at the relevant time. Any reference to a Contract or other document
as of a given date means the Contract or other document as amended, supplemented
and modified from time to time through such date.
1.2 DEFINITIONS
For the purposes of this Agreement, capitalized terms and variations on
them have the meanings specified in Schedule 1.2.
ARTICLE 2
SALE AND TRANSFER OF INTERESTS; CLOSING
2.1 INTERESTS
Subject to the terms and conditions of this Agreement, at the Closing,
Seller will sell and transfer the Interests to Buyer, and Buyer will purchase
the Interests from Seller.
2.2 PURCHASE PRICE
The purchase price for the Interests (the "Purchase Price") will be U.S.$
15,000,000 (the "Initial Purchase Price"), increased or reduced by the
Adjustment Amount, as appropriate.
2.3 CLOSING
The Closing will take place at the offices of the Seller within five
business days of the satisfaction or waiver of each of the conditions set forth
in Articles 7 and 8 or at such other time and place as the parties mutually
agree. Subject to the provisions of Article 9, failure to consummate the
purchase and sale provided for in this Agreement at the place and on the date
determined by the previous sentence will result in the termination of this
Agreement and will relieve each party of any obligation under this Agreement.
2.4 CLOSING DELIVERIES
At the Closing:
(a) Seller will deliver to Buyer:
(i) instruments or other evidence sufficient to transfer to Buyer
title to the Interests; and
(ii) a certificate executed by the chief executive officer of Seller
representing and warranting to Buyer that each of Seller's representations and
warranties in this Agreement was accurate in all material respects as of the
date of this Agreement and is accurate in all material respects as of the
Closing Date as if then made (giving full effect to any supplements to the
Disclosure Schedule that Seller delivered to Buyer before the Closing Date in
accordance with Section 5.5).
(b) Buyer will deliver to Seller:
(i) the Initial Purchase Price and Principal and Interest Payment by
wire transfer to an account specified by Seller;
(ii) a certificate executed by the chief executive officer of Buyer
to the effect that, except as otherwise stated in such certificate, each of
Buyer's representations and warranties in this Agreement was accurate in all
material respects as of the date of this Agreement and is accurate in all
material respects as of the Closing Date as if then made; and
(iii) a certificate executed by the chief executive officer of SR
Technics Group, a company organized under the laws of Switzerland ("SRT") to the
effect that, except
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as otherwise stated in such certificate, each of SRT's representations and
warranties in this Agreement was accurate in all material respects as of the
date of this Agreement and is accurate in all material respects as of the
Closing Date as if then made.
2.5 ADJUSTMENT PROCEDURE
(a) "Net Book Value" as of a given date means the amount calculated by
subtracting the liabilities from the value of the Company's assets as of that
date. The Net Book Value as of May 31, 2000 is equal to U.S.$18,145,000 the
"Initial Net Book Value").
(b) Buyer will cause the Company to prepare and will cause
PricewaterhouseCoopers, certified public accountants, to audit a balance sheet
(the "Closing Balance Sheet") of the Company as of the Closing Date. Buyer will
prepare the Closing Balance Sheet in accordance with GAAP applied on a basis
consistent with the accounting policies and procedures used in the preparation
of the Interim Unaudited Company Balance Sheet using period ending or interim
period procedures. Buyer will then determine the Net Book Value as of the
Closing Date (the "Closing Net Book Value") using the same methodology as was
used to calculate the Initial Net Book Value. Buyer will deliver the Closing
Balance Sheet and its Closing Net Book Value to Seller within 60 days after the
Closing Date. If within 30 days following delivery of the Closing Balance Sheet
and the Closing Net Book Value calculation, Seller does not deliver to Buyer
notice of any objection to the Closing Balance Sheet (which notice must contain
a reasonably detailed statement of the basis of Seller's objection), then the
Closing Book Value will be used in calculating the Adjustment Amount in Section
2.5(e).
(c) If Seller disputes any items of the Closing Balance Sheet, then Seller
will deliver to Buyer, within 30 days following Seller's receipt of the Closing
Balance Sheet, a written notice specifying in reasonable detail all disputed
items and the basis for such disputed items (a "Notice of Dispute"). If Seller
delivers a Notice of Dispute, Buyer and Seller will, within 30 days following
such notice (the "Resolution Period"), attempt in good faith to resolve their
differences, and any resolution by them as to any disputed amounts will be in
writing, and will be final, binding and conclusive.
(d) If the parties are unable to resolve all disputes with respect to the
Closing Balance Sheet prior to the expiration of the Resolution Period, issues
remaining in dispute will be submitted, as soon as practicable (but no later
than 30 days after the expiration of the Resolution Period), to public
accountants of internationally recognized standing mutually acceptable to the
parties that are not the regular accounting firm of either party (the "Neutral
Auditors"). Each party will furnish to the Neutral Auditors such work papers and
other documents and information relating to the disputed issues as the Neutral
Auditors may request and are available to that party (or its independent public
accountants), and will be afforded the opportunity to present the Neutral
Auditors any material relating to the disputed issues and to discuss the issues
with the Neutral Auditors. The parties agree to execute a reasonable engagement
letter if requested by the Neutral Auditors. The Neutral Auditors will act as an
expert and not as an arbitrator to determine only those issues with respect to
the Closing Balance Sheet which are still in dispute. The Neutral Auditors'
determination will be made as soon as practicable after their selection, will be
set forth in a written statement (the "Neutral Auditors' Notice") delivered to
Buyer and Seller and will be final, binding and conclusive and enforceable in
any court of competent jurisdiction. The fees and expenses of the Neutral
Auditors will be allocated by the Neutral Auditors between Buyer and Seller in
proportion to the extent that either party did not prevail on its items in
dispute; provided that
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so long as a party complies in all material respects in good faith with the
procedures of this Section 2.5, such fees will not include the other party's
outside counsel or accounting fees.
(e) The Neutral Auditors will recalculate the Closing Net Book Value based
on the resolution of the issues in dispute, and such recalculated Closing Net
Book Value will be used in calculating the Adjustment Amount. The "Adjustment
Amount" (which may be a positive or negative number) will be equal to one-half
of the recalculated Closing Net Book Value minus one-half of the Initial Net
Book Value.
(f) On the tenth business day following (i) the expiration of the 30-day
period for delivery of a Notice of Dispute (if no Notice of Dispute is given and
subject to Section 2.5(c)), (ii) Buyer's and Seller's resolution of all
objections pursuant to Section 2.5(c), or (iii) the date of the Neutral
Auditors' Notice (as the case may be), if the Adjustment Amount is positive,
Buyer will pay that amount to Seller, and if the Adjustment Amount is negative,
Seller will pay the absolute value of the amount to Buyer, in accordance with
the terms of this Section 2.5(f). All payments will be made by wire transfer to
an account specified by the recipient together with interest at the prime rate
(as published in the Wall Street Journal on the Closing Date), compounded daily
beginning on the Closing Date and ending on the date of payment.
(g) The parties agree that no party will be deemed to be in breach of or
default under this Agreement by reason of such party's technical failure to meet
any of the timetables for performance specified in this Section 2.5, provided
that such party will have made a good faith effort to meet such timetables and
otherwise will have complied and will continue to comply in all material
respects with the other provisions of this Section 2.5.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Subject to the Disclosure Schedule, which may be updated pursuant to
Section 5.5, Seller represents and warrants to Buyer on the date hereof and on
the Closing Date as follows:
3.1 ORGANIZATION AND GOOD STANDING
(a) The Company is a limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, with full power and authority to conduct its business as it is now
being conducted, to own or use the properties and assets that it purports to own
or use, and to perform all its obligations under all Company Contracts. The
Company is duly qualified to do business as a foreign entity and is in good
standing in each jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities conducted by it,
requires such qualification, except where the failure to be so qualified or be
in good standing will not have a Material Adverse Effect.
(b) Seller has delivered to Buyer copies of the Organizational Documents
of the Company, as currently in effect. Part 3.1 contains a complete and
accurate listing of the Company's jurisdiction of formation and other
jurisdictions in which it is authorized to do business.
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3.2 ENFORCEABILITY; NO CONFLICT
(a) Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Assuming due authorization,
execution and delivery of this Agreement by Buyer, this Agreement constitutes
the legal, valid, and binding obligation of Seller, enforceable against Seller
in accordance with its terms, subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors' rights generally or to general principles of equity. Assuming due
authorization, execution and delivery by the other parties thereto, each
Transaction Document to which Seller is a party will, upon execution and
delivery, constitute Seller's legal, valid, and binding obligation, enforceable
against Seller in accordance with its terms, subject to any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or to general
principles of equity. Seller has the absolute right, power, and authority to
execute and deliver this Agreement and the Transaction Documents to which it is
a party and to perform its obligations under this Agreement and such Transaction
Documents, which actions have been duly authorized and approved by all necessary
corporate action of Seller, subject to the consent of Chromalloy, and any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
now or hereafter in effect relating to creditors' rights generally or to general
principles of equity.
(b) Except for the consent of Chromalloy and as required under the HSR
Act, or as otherwise disclosed in Part 3.2(b), Seller and the Company are not
and will not be required to give any notice to any Person or obtain any material
Consent or material Governmental Authorization in connection with the execution
and delivery of this Agreement or the consummation or performance of any of the
Contemplated Transactions.
(c) Except as disclosed in Part 3.2(c), neither the execution and delivery
of this Agreement nor the consummation or performance of any of the Contemplated
Transactions will directly or indirectly (with or without notice or lapse of
time):
(i) contravene any provision of the Organizational Documents of the
Company, or any resolution adopted by the management or members of the Company;
(ii) contravene any material provision or term of any Company
Contract, Governmental Authorization, material Legal Requirement or Order to
which the Company, or any of the assets owned or used by the Company, may be
subject; or
(iii) result in the imposition or creation of any Encumbrance (other
than in favor of Buyer) upon or with respect to any of the assets owned or used
by the Company.
(d) Except as disclosed in Part 3.2(d), neither the execution and delivery
of this Agreement by Seller nor the consummation or performance of any of the
Contemplated Transactions by Seller will give any Person the right to prevent,
delay, or otherwise interfere with any of the Contemplated Transactions pursuant
to:
(i) any provision of Seller's Organizational Documents;
(ii) any resolution adopted by the board of directors or the
stockholders of Seller;
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(iii) any material Legal Requirement or Order to which Seller may be
subject; or
(iv) any material provision or term of any Contract to which Seller
is a party or by which Seller may be bound.
3.3 CAPITALIZATION
The authorized equity securities of the Company are in the form of
membership interests. The Interests represent 50% of the issued and outstanding
membership interests of the Company. Seller is and will be on the Closing Date
the record and beneficial owner and holder of the Interests, free and clear of
all Encumbrances, except for the liens of the Union Bank of California and Bank
of America and the liens of the banks pursuant to the Revolving Credit Facility,
which shall be released upon Closing. No legend or other reference to any
purported Encumbrance appears upon any instrument or other evidence sufficient
to transfer title to the Interests. All of the Interests have been duly
authorized and validly issued and are fully paid and nonassessable. There are no
Contracts relating to the issuance, sale, or transfer of any equity securities
or other securities of the Company, except for the Operating Agreement of the
Company. None of the Interests or other securities of the Company was issued in
violation of any Legal Requirement. The Company does not own, or have any
Contract to acquire, any equity securities or other securities of any Person or
any direct or indirect equity or ownership interest in any other business.
3.4 FINANCIAL STATEMENTS
Seller has delivered to Buyer the following (collectively referred to as
the "Financial Statements"): (a) an audited balance sheet of the Company at
December 31, 1999 (including the notes thereto, the "Company's Audited Balance
Sheet") and (b) an unaudited balance sheet of the Company as at June 30, 2000
(the "Interim Unaudited Company Balance Sheet") and the related unaudited
statements of income. The Financial Statements have been prepared in accordance
with the books and records of the Company and fairly present the financial
condition and the results of operations, changes in stockholders and members'
equity, and cash flow of the Company as at the respective dates of and for the
periods referred to in such Financial Statements, all in accordance with GAAP,
except as otherwise noted in the notes or schedules, subject in the case of
interim financial statements, to normal recurring year-end adjustments (the
effect of which will not, individually or in the aggregate, be materially
adverse to the financial condition of the Company). The Financial Statements
referred to in this Section 3.4 reflect the consistent application of accounting
principles throughout the periods involved. No financial statements of any
Person other than the Company are required by GAAP to be included in the
Financial Statements.
3.5 BOOKS AND RECORDS
The books of account, minute books, and other records of or pertaining to
the Company, all of which have been made available to Buyer, are complete and
correct in all material respects and have been maintained in accordance with
sound business practices and the requirements of Section 13(b)(2) of the
Securities Exchange Act of 1934, including the maintenance of an adequate system
of internal controls. The minute books of the Company contain accurate and
complete records of all action taken by the Company's members and managers and
no such action has been taken for which minutes have not been prepared and are
not contained in such minute books. At the Closing, all of those books and
records will
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be in the possession of the Company, except for books and records pertaining to
both the Company and other business operations of Seller, copies of which Seller
will make available to Buyer after the Closing promptly upon Buyer's request.
3.6 ACCOUNTS RECEIVABLE
To Seller's Knowledge, all accounts receivable that are reflected on the
Financial Statements and the accounting records of the Company as of the Closing
Date, as the case may be (collectively, the "Accounts Receivable"), represent or
will represent valid obligations arising from sales actually made or services
actually performed in the Ordinary Course of Business. To Seller's knowledge,
the reserves with respect to such Accounts Receivable have been calculated
consistent with past practice and in accordance with GAAP. To Seller's
Knowledge, there is no contest, claim, defense or right of setoff, other than in
the Ordinary Course of Business, under any Contract with any obligor of an
Account Receivable relating to the amount or validity of such Account
Receivable.
3.7 INVENTORY
Substantially all Inventory of the Company consists of a quality and
quantity usable and salable in the Ordinary Course of Business, except for
obsolete items and items of below-standard quality. All inventories have been
valued at the lower of cost or on a first in, first out basis. Inventories now
on hand that were purchased after the date of the Company's Audited Balance
Sheet were purchased in the Ordinary Course of Business of the Company at a cost
not exceeding market prices prevailing at the time of purchase.
3.8 NO UNDISCLOSED LIABILITIES
Except as set forth in Part 3.8, the Company has no Liabilities except for
Liabilities reflected or reserved against in the Company's Audited Balance Sheet
or the Interim Unaudited Company Balance Sheet, and current Liabilities incurred
in the Ordinary Course of Business since the respective dates thereof.
3.9 NO MATERIAL ADVERSE CHANGE
Since the date of the Company's Audited Balance Sheet, nothing has had a
Material Adverse Effect on the Company, and no event has occurred or
circumstance exists that may reasonably be expected to result in such a Material
Adverse Effect.
3.10 ABSENCE OF CERTAIN CHANGES AND EVENTS
Except as disclosed in Part 3.10 or pursuant to Section 5.5, since the
date of the Company's Audited Balance Sheet, the Company has conducted its
business only in the Ordinary Course of Business and there has not been any:
(a) grant, by Seller or the Company, of any equity option or right to
purchase member interests of the Company; issuance of any security convertible
into such equity; grant, by Seller or the Company, of any registration rights
relating to any member interests; purchase, redemption, retirement, or other
acquisition by the Company of any member interests of the Company; or
declaration or payment of any distribution or any other payment with respect to
any member interests of the Company;
(b) amendment to the Organizational Documents of the Company;
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(c) payment (except in the Ordinary Course of Business) or material
increase by the Company of any bonuses, salaries, or other compensation to any
manager or employee, or entry into any employment, severance, or similar
Contract with any manager or employee, except in the Ordinary Course of
Business;
(d) adoption of, amendment to or material increase in the payments to or
benefits under, any Plan or Other Benefit Obligation of the Company;
(e) damage to or destruction or loss of any asset or property of the
Company, whether or not covered by insurance, which could reasonably be expected
to have a Material Adverse Effect on the Company;
(f) entry by the Company into, termination of, or receipt of notice of
termination of (i) any material license, distributorship, dealer, sales
representative, joint venture, loan agreement or guaranty, or (ii) except in the
Ordinary Course of Business, any Contract or transaction involving a total
remaining commitment by or to the Company of at least U.S.$100,000;
(g) sale, lease, or other disposition of any asset or property of the
Company, including Intellectual Property, or the creation of any Encumbrance on
any material asset of the Company, in each case other than in the Ordinary
Course of Business;
(h) cancellation or waiver of any claims or rights with a value to the
Company in excess of U.S.$50,000 other than in the Ordinary Course of Business;
(i) change in the accounting methods used by the Company; or
(j) Contract by the Company to do any of the foregoing.
3.11 PROPERTIES AND ASSETS; ENCUMBRANCES
(a) Part 3.11(a) contains an accurate description (by subject, leased Real
Property, name of lessor, date of lease, and term expiration date) of all leases
of Real Property in which the Company has a leasehold estate. The Company owns
no real property.
(b) To Seller's Knowledge, and except to the extent such use would not
cause a Material Adverse Effect, use of the Real Property for the various
purposes for which it is presently being used is permitted as of right under all
applicable zoning Legal Requirements and is not subject to "permitted
non-conforming" use or structure classifications. To Seller's Knowledge, and
except to the extent such non-compliance would not cause a Material Adverse
Effect, all Improvements are in compliance with all applicable Legal
Requirements, including those pertaining to zoning, building and the disabled
and no part of any Improvement encroaches on any real property not included in
the Real Property, and there are no improvements primarily situated on adjoining
property which encroach on any part of the Real Property. To Seller's Knowledge,
and except to the extent such failure would not cause a Material Adverse Effect,
the Real Property on which each Improvement is located (i) abuts on and has
direct vehicular access to a public road or has access to a public road via a
permanent, irrevocable, appurtenant easement benefiting such parcel of Real
Property and comprising a part of the Real Property, (ii) is supplied with
public or quasi-public utilities and other services appropriate for the
operation of the Improvements located thereon, and (iii) is not located within
any flood plain or area subject to wetlands regulation or any similar
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restriction. To Seller's Knowledge, and except to the extent such plan would not
cause a Material Adverse Effect, there is no existing or proposed plan to modify
or realign any street or highway or any existing or proposed eminent domain
Proceeding that would result in the taking of all or any part of any Real
Property or that would prevent or hinder the continued use of any Real Property
as heretofore used in the conduct of the business of the Company. To Seller's
Knowledge, no Person other than the Company or a Related Person of the Company
is in possession of any portion of the Real Property.
3.12 CONDITION AND SUFFICIENCY OF TANGIBLE ASSETS
Except as set forth on Part 3.12(a)(i), the Improvements are structurally
sound, are in good operating condition and repair, ordinary wear and tear
excepted, are free from latent and patent defects, and are adequate for the uses
to which they are being put, except for such defects which would not cause a
Material Adverse Effect. Except as set forth on Part 3.12(a)(ii), each item of
tangible personal property of the Company with a value in excess of U.S.$15,000
is in good operating condition and repair, ordinary wear and tear excepted, is
free from latent and patent defects and is suitable for immediate use in the
Ordinary Course of Business. Except as set forth on Part 3.12(a)(iii), the Real
Property and tangible personal property owned or leased by the Company
constitute substantially all real property and tangible personal property used
by the Company that are necessary for the continued operation of the Company
consistent with past practice after the Closing.
3.13 INTELLECTUAL PROPERTY
(a) The "Intellectual Property" means all intellectual property owned,
used or licensed (as licensor or licensee) by the Company, including:
(i) the Company's name and all assumed fictional business names,
trade names, registered and unregistered trademarks, service marks, and
applications (collectively, "Marks");
(ii) all patents, patent applications, and inventions and
discoveries that may be patentable (collectively, "Patents");
(iii) all registered and unregistered copyrights in both published
works and unpublished works (collectively, "Copyrights");
(iv) all know-how, trade secrets, confidential or proprietary
information, customer lists, software, technical information, data, process
technology, plans, drawings, and blue prints (collectively, "Trade Secrets");
and
(v) all rights in Internet websites and domain names presently used
by the Company (collectively, "Net Names").
(b) Part 3.13(b) contains a complete and accurate list and summary
description, including any royalties paid or received by the Company, and the
Company has made available to Buyer accurate and complete copies, of all Company
Contracts relating to the Intellectual Property, except for any license implied
by the sale of a product and perpetual, paid-up licenses for commonly available
software programs under which the Company is the licensee. There are no
outstanding and, to Seller's Knowledge, no Threatened disputes or disagreements
with respect to any such Contract.
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(c) The Intellectual Property constitutes all the intellectual property
necessary for the continued operation of the Company after the Closing in the
same manner as before the Closing. Except as disclosed in Part 3.13(c), the
Company is the owner or licensee of all right, title, and interest in and to the
Intellectual Property, free and clear of all Encumbrances, and has the absolute
right to use all of the Intellectual Property without payment to a third party,
except in respect of the licenses listed in Part 3.13(c).
(d) The Company does not own, use or license (as licensor or licensee) any
Patents.
(e) Marks:
(i) Part 3.13(e) contains a complete and accurate list and summary
description of all Marks.
(ii) All Marks that have been registered with the United States
Patent and Trademark Office are currently in compliance with all formal legal
requirements (including the timely post-registration filing of affidavits of use
and incontestability and renewal applications), are valid and enforceable, and
are not subject to any maintenance fees or taxes or actions falling due within
90 days after the Closing Date.
(iii) No Xxxx has been or is now involved in any opposition,
invalidation, or cancellation Proceeding and, to Seller's Knowledge, no such
action is Threatened with respect to any of the Marks.
(iv) To Seller's Knowledge, there is no potentially interfering
trademark or trademark application of any other Person.
(v) To Seller's Knowledge, no Xxxx is infringed or, to Seller's
Knowledge, has been challenged or Threatened in any way. None of the Marks used
by the Company infringes or is alleged to infringe any trade name, trademark, or
service xxxx of any other Person in the United States.
(vi) All products and materials containing a Xxxx xxxx the proper
federal registration notice where permitted by law.
(f) Copyrights:
(i) Part 3.13(f) contains a complete and accurate list of all
registered Copyrights.
(ii) All of the registered Copyrights are currently in compliance
with formal legal requirements, are valid and enforceable, and are not subject
to any maintenance fees or taxes or actions falling due within 90 days after the
Closing Date.
(iii) No Copyright is infringed or, to Seller's Knowledge, has been
challenged or threatened in any way. None of the subject matter of any of the
Copyrights infringes or is alleged to infringe any copyright of any third party
or is a derivative work based on the work of any other Person.
(iv) All works encompassed by the Copyrights have been marked with
the proper copyright notice.
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(g) Trade Secrets:
(i) The Company has taken all reasonable precautions to protect the
secrecy, confidentiality, and value of all Trade Secrets.
(ii) The Trade Secrets are not part of the public knowledge or
literature, and, to Seller's Knowledge, have not been used, divulged, or
appropriated either for the benefit of any Person (other than the Company) or to
the detriment of the Company. No Trade Secret is subject to any adverse claim or
has been challenged or Threatened in any way or infringes any intellectual
property.
(h) The Company does not own, use or license (as licensor or licensee) any
Net Names, except as disclosed on Part 3.13(h).
3.14 CONTRACTS; NO DEFAULTS
(a) Part 3.14(a) contains a complete and accurate list, and Seller will,
upon request of Buyer, deliver true and complete copies of:
(i) all outstanding purchase and repair orders for an amount greater
than U.S.$100,000;
(ii) each Company Contract that was entered into in the Ordinary
Course of Business that involves performance of services or delivery of goods or
materials by the Company or an amount or value in excess of U.S.$250,000;
(iii) each Company Contract that was not entered into in the
Ordinary Course of Business and that involves the expenditure or receipt by the
Company of an amount or value in excess of U.S.$100,000;
(iv) each Company Contract affecting the ownership of, leasing of,
title to, use of, or any leasehold or other interest in, any real or personal
property (except personal property leases and installment and conditional sales
agreements having a value per item or aggregate payments of less than
U.S.$100,000 and with a term of less than one year);
(v) each Company Contract with respect to Intellectual Property with
an amount of value in excess of U.S.$50,000, or relating to agreements with
current or former employees, consultants, or contractors regarding the
appropriation or the non-disclosure of any of the Intellectual Property;
(vi) each Company Contract with any labor union or other employee
representative of a group of employees;
(vii) each Company Contract (however named) involving a sharing of
profits, losses, costs, or Liabilities by the Company with any other Person;
(viii) each Company Contract containing covenants that in any
way purport to restrict the business activity of the Company or limit the
freedom of the Company to engage in any line of business or to compete with any
Person;
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(ix) each Company Contract providing for payments to or by any
Person based on or determined by reference to sales, purchases, or profits,
other than direct payments for goods;
(x) each power of attorney of the Company that is currently
effective and outstanding;
(xi) each Company Contract entered into other than in the Ordinary
Course of Business that contains or provides for an express undertaking by the
Company to be responsible for consequential damages;
(xii) each executory Company Contract for capital expenditures in
excess of U.S.$100,000;
(xiii) each written warranty, guaranty, and or other similar
undertaking with respect to contractual performance extended by the Company
other than in the Ordinary Course of Business; and
(xiv) all current overhaul contracts.
(b) Except as disclosed in Part 3.14(b), each Company Contract is in full
force and effect and is valid and enforceable in accordance with its terms,
subject to any applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to creditors' rights generally
or to general principles of equity. Except as disclosed in Part 3.14(b), the
Company has not Contravened, in any material respect, any of the applicable
terms and requirements of such Contract, and Seller has no Knowledge of any
Contravention of any Company Contract by the other party or parties to it. For
purposes of this Section 3.14(b), any payment due under a Company invoice that
remains outstanding beyond the invoice's payment term, but less than three
months from the expiration of the payment term, will not be considered a
Contravention of a Company Contract.
3.15 CUSTOMERS AND SUPPLIERS
There exists no actual, and Seller has no Knowledge of any Threatened
termination, cancellation or material limitation of, or any material change in,
the business relationship of the Company with any customer, supplier, group of
customers or group of suppliers, other than any such terminations,
cancellations, limitations, or changes which would not be reasonably likely to
have a Material Adverse Effect on the Company's relationships with its customers
and suppliers, taken as a whole.
Customers of the Company have not asserted claims for credits or refunds
for products sold or services rendered or to be rendered by the Company pursuant
to any Contract, understanding or practice of the Company, except to the extent
such claims would not have a Material Adverse Effect.
3.16 INSURANCE
The Company maintains, and through the Closing will continue to maintain,
in full force and effect insurance policies covering the Company's insurable
business risks and Liabilities in adequate amounts to provide reasonable
protection for the business of and the properties owned and used by the Company
and for its directors and officers.
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Seller and the Company have complied in all material respects with each
such policy and program and have not failed to give any notice or present any
claim thereunder in a due and timely manner which failure would reasonably be
expected to result in a loss or forfeiture of any material right thereunder.
3.17 TAXES
Except as disclosed in Part 3.17:
(a) To Seller's Knowledge, (i) the Company has filed (or has had filed on
its behalf) or issued on a timely basis all material Tax Returns as required by
applicable Legal Requirements, (ii) each such Tax Return is true, correct and
complete in all respects; (iii) all Taxes shown as due and owing by the Company
on such Tax Returns have been timely paid; and (iv) the Company has not
requested an extension of time within which to file any Tax Return in respect of
any taxable year which has not since been filed.
(b) To Seller's Knowledge, no federal, state, local or foreign audits or
other Proceedings exist with regard to any Taxes or Tax Returns of the Company.
Neither Seller nor, to Seller's Knowledge, the Company, has received any written
notice that an audit or other Proceeding is pending or Threatened with respect
to any Taxes due from or with respect to the Company or any Tax Return filed by
or with respect to the Company. Neither Seller nor, to Seller's Knowledge, the
Company, has granted or been requested to grant any waiver of any statutes of
limitations applicable to any claim against the Company for Taxes.
(c) To Seller's Knowledge, all Tax deficiencies that have been claimed,
proposed or asserted in writing against the Company have been fully paid or
finally settled, and no issue has been raised in writing in any examination
which, by application of similar principles, could be expected to result in the
proposal or assertion of a Tax deficiency for any other year not so examined.
(d) To Seller's Knowledge, no written position has been taken on any Tax
Return with respect to the business or operations of the Company for a taxable
year for which the statute of limitations for the assessment of any Taxes with
respect thereto has not expired that is contrary to any publicly announced
position of a taxing authority or that is substantially similar to any position
on which a taxing authority has successfully challenged in the course of an
examination of a Tax Return of the Company.
(e) To Seller's Knowledge, all material Taxes that the Company is required
by law to withhold or collect, including sales and use Taxes, and amounts
required to be withheld for Taxes of employees and other withholding taxes, have
been duly withheld or collected and, to the extent required, have been paid over
to the proper taxing authority or are held in separate bank accounts for such
purpose.
(f) To Seller's Knowledge, there are no Tax liens (other than for Taxes
not yet due and payable) upon the properties or assets of the Company.
(g) To Seller's Knowledge, the Company is not subject to any tax sharing,
indemnity or allocation agreement.
(h) To Seller's Knowledge, none of the Company's assets are assets that
are described in Section 197(f)(9)(A).
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(i) To Seller's Knowledge, (i) none of the assets of the Company are
property which the Company is required to treat as being owned by any other
person pursuant to the so-called "safe harbor lease" provisions of former
Section 168(f)(8) of the Code, (ii) none of the assets of the Company directly
or indirectly secures any debt the interest on which is tax exempt under Section
103(a) of the Code, (iii) none of the assets of the Company is "tax-exempt use
property" within the meaning of Section 168(h) of the Code and (iv) each asset
with respect to which the Company claims depreciation, amortization or similar
expense for Tax purposes is owned by the Company for Tax purposes.
(j) The Seller is not a person other than a United States person within
the meaning of the Code.
(k) The Contemplated Transactions are not subject to the tax withholding
provisions of Code Section 3406, or of subchapter A of Chapter 3 of the Code or
of any other provision of law.
(l) The Company does not have and has not had a permanent establishment in
any foreign country, as defined in any applicable Tax Treaty or convention
between the United States of America and such foreign country.
(m) The Company is considered a partnership for all U.S. federal and state
Tax purposes. The Company does not own any interest in any entities that are
considered partnerships for U.S. federal income tax purposes. The Company is not
a publicly traded partnership.
(n) To Seller's Knowledge, the Company has not made, nor is bound by, any
election under Section 197 of the Code.
(o) To Seller's Knowledge, there are no outstanding rulings with any Tax
authority addressed to the Company that are, or if issued would be, binding on
the Company, its successors or assigns.
(p) The Interests constitute Seller's entire equity interest in the
Company.
3.18 EMPLOYEE BENEFITS
(a) Part 3.18(a) contains a complete and accurate list of all Company
Plans and material Company Other Benefit Obligations.
(b) Seller has delivered or made available to Buyer:
(i) all documents that set forth the terms of each Company Plan or
material Company Other Benefit Obligation, and of any related trust, including
all summary plan descriptions, summaries and descriptions furnished to
participants and beneficiaries;
(ii) all personnel, payroll, and employment manuals and policies
with respect to Company employees;
(iii) a written description of any Company Plan or material Company
Other Benefit Obligation that is not otherwise in writing;
(iv) all registration statements filed with respect to any Company
Plan;
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(v) all currently effective insurance policies purchased by or to
provide benefits under any Company Plan;
(vi) all reports submitted since 1999 by third-party administrators,
actuaries, investment managers, trustees, consultants, or other independent
contractors with respect to any Company Plan or material Company Other Benefit
Obligation;
(vii) the Form 5500 filed in each of the most recent three plan
years with respect to each Company Plan and material Company Other Benefit
Obligation, including all schedules thereto and the opinions of independent
accountants;
(viii) all notices that were given by the Company, any ERISA
Affiliate or any Company Plan to the IRS or any participant or beneficiary,
pursuant to statute, since 1999, including notices that are expressly mentioned
elsewhere in this Article 3;
(ix) all notices that were given by the IRS or the Department of
Labor to the Company, any ERISA Affiliate or any Company Plan since 1999; and
(x) with respect to Company Plans that are Qualified Plans, the most
recent determination letter issued by the IRS for each such Plan.
(c) Except as disclosed in Part 3.18(c):
(i) The Company has performed all of its material obligations under
all Company Plans and with respect to all Company Other Benefit Obligations. The
Company has made appropriate entries in its financial records and statements for
all obligations and liabilities under the Company Plans and Company Other
Benefit Obligations that have accrued but are not due.
(ii) The Company, with respect to all Company Plans and Company
Other Benefit Obligations, is and each Company Plan and Company Other Benefit
Obligation is in material compliance with ERISA, the Code, and other applicable
Legal Requirements, including the provisions of such Legal Requirements
expressly mentioned in this Article 3.
(iii) Neither the Company nor Seller has any material Liability to
the IRS with respect to any Plan, including any Liability imposed by Chapter 43
of the Code.
(iv) All contributions and payments made or accrued with respect to
all Company Plans and Company Other Benefit Obligations are deductible under
Code Sections 162 or 404.
(v) To Seller's Knowledge, no event has occurred or circumstance
exists that may result in (A) a material increase in premium costs of Company
Plans and Company Other Benefit Obligations that are insured, or (B) a material
increase in benefit costs of Company Plans and Company Other Benefit Obligations
that are self-insured.
(vi) Other than routine claims for benefits submitted by
participants or beneficiaries, no material claim against, or Proceeding
involving, any Company Plan or Company Other Benefit Obligation is pending or,
to Seller's Knowledge, is Threatened.
(vii) Each Qualified Plan has received a favorable determination
letter from the IRS that it is qualified under Code Section 401(a) and its
related trust is exempt from
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federal income tax under Code Section 501(a), and each such Plan is in material
compliance in form and in operation with the requirements of the Code and meets
the requirements of a "qualified plan" under Section 401(a) of the Code. To
Seller's Knowledge, no event has occurred or circumstance exists that may give
rise to disqualification or loss of tax-exempt status of any such Qualified Plan
or trust.
(viii) There is no unfunded liability under any Company Plan.
(ix) Neither the Company nor any ERISA Affiliate has ever
established, maintained or contributed to, or had an obligation to maintain or
contribute to, any Plan that is subject to Title IV of ERISA.
(x) The Company has never established, maintained or contributed to,
or had an obligation to maintain or contribute to, any VEBA, any organization or
trust described in Code Sections 501(c)(17) or 501(c)(20), or any welfare
benefit fund as defined in Code Section 419(e).
(xi) Neither the Company nor any ERISA Affiliate has ever
established, maintained, or contributed to or otherwise participated in, or had
an obligation to maintain, contribute to, or otherwise participate in, any
Multiemployer Plan.
(xii) Except to the extent required under ERISA Section 601 et seq.
and Code Section 4980B, the Company provides no health or welfare benefits for
any retired or former employee nor is it obligated to provide health or welfare
benefits to any active employee following such employee's retirement or other
termination of service.
(xiii) The Company has the right to modify and terminate
benefits to retirees (other than pensions) with respect to both retired and
active employees.
(xiv) The consummation of the Contemplated Transactions will not
result in the payment, vesting, or acceleration of any benefit.
(xv) No transaction prohibited by ERISA Section 406 and no
"prohibited transaction" under Code Section 4975(c) with respect to which there
is not an applicable exemption, has occurred with respect to any Company Plan.
(xvi) Seller and the Company are in material compliance with the
provisions of ERISA Section 601 et seq. and Code Section 4980B and with the
provisions of ERISA Section 701 et seq. and Subtitle K of the Code.
3.19 LABOR RELATIONS; EMPLOYMENT LAW COMPLIANCE
(a) The Company has complied in all material respects with all Legal
Requirements relating to employment practices, terms and conditions of
employment, equal employment opportunity, nondiscrimination, immigration, wages,
hours, benefits, collective bargaining, and plant closing. The Company is not
liable for the payment of any material fines, penalties, or other amounts,
however designated, for failure to comply with any of the foregoing Legal
Requirements.
(b) Except as disclosed in Part 3.19(b):
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(i) The Company has not been, and is not now, a party to any
collective bargaining agreement or other labor contract.
(ii) Since May 28, 1999, there has not been, there is not presently
pending or existing, and to Seller's Knowledge there is not Threatened, any
strike, slowdown, picketing, work stoppage or employee grievance process
involving the Company.
(iii) To Seller's Knowledge, no event has occurred or circumstance
exists that could be reasonably likely to provide the basis for any work
stoppage or other labor dispute affecting the Company.
(iv) There is not pending or, to Seller's Knowledge, Threatened any
Proceeding against or affecting the Company relating to the alleged violation of
any Legal Requirement pertaining to labor relations or employment matters, and
to Seller's Knowledge, there is no organizational activity or other labor
dispute against or affecting the Company or its Facilities.
(v) To Seller's Knowledge, no application or petition for an
election of or for certification of a collective bargaining agent representing
the Company's employees is pending.
(vi) No grievance or arbitration Proceeding exists that might have a
Material Adverse Effect upon the Company or the conduct of its business.
(vii) There is no lockout of any employees by the Company, and the
Company contemplates no such action.
(viii) There has been no charge of discrimination filed against or,
to Seller's Knowledge, Threatened against the Company with the Equal Employment
Opportunity Commission or similar Governmental Body.
3.20 ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS
Except as disclosed in Part 3.20:
(a) The Company is, and at all times has been, in material compliance
with, and has not been and is not in material Contravention of or subject to
material liability under, any Environmental Law or Occupational Safety and
Health Law. Neither Seller nor the Company has any reasonable basis to expect,
nor has any of them received, any written Order, notice, or other communication
from any Governmental Body or any other Person of any actual or potential
violation or failure to comply with any Environmental Law, or of any actual or
Threatened obligation to undertake or bear the cost of any Environmental,
Health, and Safety Liabilities with respect to any Facility or other property or
asset (whether real, personal, or mixed) in which the Company has had an
interest, or with respect to any property or Facility at or to which Hazardous
Materials were generated, manufactured, refined, transferred, imported, used, or
processed by the Company, or from which Hazardous Materials have been
transported, treated, stored, handled, transferred, disposed, recycled, or
received.
(b) There are no pending or Threatened material claims or Encumbrances
resulting from any Environmental, Health, and Safety Liabilities, or arising
under or pursuant to any Environmental Law or Occupational Safety and Health
Law, with respect to or affecting any Facility or any other property or asset
(whether real, personal, or mixed) in which the
-17-
Company has or had an interest. There are no circumstances with respect to any
Facility, or the current or past business of the Company, that reasonably could
be anticipated to result in any Environmental, Health and Safety Liabilities for
the Company.
(c) To Seller's Knowledge, (i) Hazardous Materials have not been
generated, used, treated, handled or stored on, Released from, or transported to
or from, any Facility by the Company in Contravention of any applicable
Environmental Law; (ii) the Company has disposed of all wastes, including those
wastes containing Hazardous Materials, in material compliance with all
applicable Environmental Laws and Environmental Permits; and (iii) the Company
has not disposed or arranged (by contract, agreement or otherwise) for the
disposal of any material or substance at any offsite location that has been or
is listed by any Governmental Body as a location which poses a danger to the
environment or to public health and safety.
(d) In connection with the ownership, operation and use of the Facilities,
all Environmental Permits necessary for the current use of the Facilities and
the business of the Company as presently conducted have been obtained. Except as
set forth in Part 3.20: (i) the Company has not received any written notice from
any Governmental Body revoking, canceling, rescinding, suspending, modifying or
refusing to renew any such Environmental Permit; and (ii) the Company is in
material compliance in all respects with the Environmental Permits, and all of
the Environmental Permits are in full force and effect; and (iii) the
consummation of the transaction contemplated hereby will not, in and of itself,
result in any Environmental Permit no longer being valid or useable by the
Company or Buyer in accordance with its terms in connection with the operation
of the Company after the Closing.
(e) Seller and the Company have made available to Buyer copies of any and
all reports, studies, analyses, tests, assessments, investigations or monitoring
results in Seller's or the Company's possession pertaining to the Company or any
Facility.
3.21 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS
(a) Except as disclosed in Part 3.21(a):
(i) The Company is, and at all times since May 28, 1999, has been,
in material compliance with each Legal Requirement that is or was applicable to
it or to the conduct or operation of its business or the ownership or use of any
of its assets.
(ii) Neither Seller nor the Company has received, at any time since
May 28, 1999, any written notice or other communication from any Governmental
Body or any other Person regarding any actual or alleged material Contravention
of any Legal Requirement by the Company.
(b) Part 3.21(b) contains a complete and accurate list of each material
Governmental Authorization that is required for the business of the Company as
currently conducted, all of which are valid and in full force and effect and
will remain so with respect to the Company following the Closing.
3.22 CERTAIN PROCEEDINGS; ORDERS
(a) Except as disclosed in Part 3.22(a), there is no material pending
Proceeding:
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(i) by or against the Company; or
(ii) that challenges, or that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the Contemplated
Transactions.
To Seller's Knowledge, no such Proceeding has been Threatened. The Proceedings
listed in Part 3.22(a) will not in the aggregate have a Material Adverse Effect.
(b) Part 3.22(b) lists each Order to which the Company, or any of the
assets owned or used by it, is subject. To Seller's Knowledge, no officer,
director, agent, or employee of the Company is subject to any Order that
prohibits such officer, director, agent, or employee from engaging in or
continuing any conduct, activity, or practice relating to the business of the
Company.
(c) Except as disclosed in Part 3.22(c):
(i) The Company is, and at all times since May 28, 1999, has been,
in compliance with all of the terms and requirements of each material Order to
which it, or any of the assets owned or used by it, is subject.
(ii) Neither Seller nor the Company has received, at any time since
May 28, 1999, any written notice or other communication from any Governmental
Body or any other Person regarding any actual or alleged violation of, or
failure to comply with, any term or requirement of any material Order to which
the Company is subject.
3.23 EMPLOYEE RESTRICTIONS
Except as set forth in Part 3.23, to Seller's Knowledge, no employee or
director of the Company is a party to, or is otherwise bound by, any Contract,
including any confidentiality, noncompetition, or proprietary rights agreement,
between such employee or director and any other Person that in any way adversely
affects or will affect (i) the performance of his duties as an employee or
director of the Company or (ii) the ability of the Company to conduct its
business, including any such agreements between Seller or the Company and any
such employee or director. To Seller's Knowledge, no group of employees of the
Company intends to terminate their employment with the Company.
3.24 RELATIONSHIPS WITH RELATED PERSONS
Except as disclosed in Part 3.24, neither Seller nor any Related Person of
Seller or of the Company has or since May 28, 1999, has had, any interest in any
property (whether real, personal, or mixed and whether tangible or intangible),
used in the Company's business. Except as disclosed in Part 3.24, neither Seller
nor any Related Person of Seller or of the Company, owns (of record or as a
beneficial owner) an equity interest or any other financial or profit interest
in a Person that has (i) had business dealings or a material financial interest
in any transaction with the Company, or (ii) engaged in competition with the
Company with respect to any line of the products or services of the Company in
any market presently served by the Company except for less than 1% of the
outstanding capital stock of any competing business that is publicly traded on
any recognized exchange or in the over-the-counter market. Except for contracts
in the Ordinary Course of Business between WASI and the Company, or as otherwise
disclosed in Part 3.24, neither Seller nor any Related Person of
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Seller or of the Company is a party to any Contract with, or has any claim or
right against, the Company.
3.25 BROKERS OR FINDERS
Other than Lazard Freres & Co. LLC ("Seller's Broker"), neither Seller nor
any of its Representatives have incurred any Liability for financial advisor,
brokerage or finders' fees with respect to the transactions contemplated by this
Agreement and the Transaction Documents.
3.26 DISCLOSURE
(a) No representation or warranty of Seller in this Agreement and no
statement in the Disclosure Schedule contains any material untrue statement or
omits to state a material fact necessary to make the statements herein or
therein, in light of the circumstances in which they were made, not misleading.
(b) No notice given pursuant to Section 5.5 will contain any untrue
statement or omit to state a material fact necessary to make the statements
therein or in this Agreement, in light of the circumstances in which they were
made, not misleading.
3.27 OBLIGATIONS IN OPERATING AGREEMENT
Attached as Exhibit A is a complete copy of the Operating Agreement as in
effect on the date hereof. The parties thereto have not entered into any
amendments to the Operating Agreement since the date of the Agreement. Seller
has made available to Buyer complete copies of any letters referred to in clause
(f) of the definition of "Third Party" in the Operating Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Seller on the date hereof and on the
Closing Date as follows:
4.1 ORGANIZATION
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware with full power and authority
to conduct its business as it is now being conducted and to own or use the
properties and assets that it purports to own or use.
4.2 ENFORCEABILITY; NO CONFLICT
(a) Buyer has the absolute and unrestricted right, power, and authority to
execute and deliver this Agreement and the Transaction Documents to which it is
a party and to perform its obligations hereunder and thereunder, which actions
have been duly authorized and approved by all necessary corporate action of
Buyer. Assuming the execution and delivery of this Agreement by Seller, this
Agreement constitutes the legal, valid, and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, subject to any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
now or hereafter in effect
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relating to creditors' rights generally or to general principles of equity.
Assuming their execution and delivery by the other parties thereto, the
Transaction Documents to which Buyer is a party will, upon execution and
delivery, constitute legal, valid, and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms subject to any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
now or hereafter in effect relating to creditors' rights generally or to general
principles of equity.
(b) Except as set forth in Schedule 4.2(b), Buyer is not and will not be
required to obtain any Governmental Authorization or Consent in connection with
the execution and delivery of this Agreement or the consummation or performance
of any of the Contemplated Transactions.
(c) Except as set forth in Schedule 4.2(c), neither the execution and
delivery of this Agreement by Buyer nor the consummation or performance of any
of the Contemplated Transactions by Buyer will give any Person the right to
prevent, delay, or otherwise interfere with any of the Contemplated Transactions
pursuant to:
(i) any provision of Buyer's Organizational Documents;
(ii) any resolution adopted by the board of directors or the
stockholders of Buyer;
(iii) any material Legal Requirement or Order to which Buyer may be
subject; or
(iv) any material provision or term of any Contract to which Buyer
is a party or by which Buyer may be bound.
4.3 CERTAIN PROCEEDINGS
There is no pending Proceeding that has been commenced by or against Buyer
or SRT that challenges, or may have the effect of preventing, delaying, making
illegal, or otherwise interfering with, any of the Contemplated Transactions. To
Buyer's Knowledge, no such Proceeding has been Threatened.
4.4 INVESTMENT INTENT
(a) Buyer is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Interests. Buyer is
purchasing the Interests for investment for Buyer's own account only and not
with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act.
(b) Buyer understands that the Interests have not been registered under
the Securities Act by reason of a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of the Buyer's investment
intent as expressed herein.
(c) Buyer further acknowledges and understands that the Interests must be
held indefinitely unless the Interests are subsequently registered under the
Securities Act or an exemption from such registration is available.
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(d) Buyer further understands that at the time Buyer wishes to sell the
Interests, there may be no public market upon which to make such a sale.
(e) Buyer further warrants and represents that Buyer has either (i) a
preexisting business relationship, with either the Company or any of its
officers, directors or controlling persons, or (ii) the capacity to protect its
own interests in connection with the purchase of the Interests by virtue of the
business or financial expertise of itself or of professional advisors to Buyer
who are unaffiliated with and who are not compensated by the Company or any of
its affiliates, directly or indirectly.
(f) Buyer is an "accredited investor" as that term is defined in Rule 501
of Regulation D promulgated under the Securities Act.
(g) The purchase of the Interests by Buyer is permitted by the laws of the
United States, Switzerland and the European Union and the purchase and, except
as set forth on Schedule 4.4(g), the sale of the Interests does not require the
filing of any notice, permit, registration or qualification with any
governmental entity of the United States, Switzerland or the European Union.
(h) SRT is the only beneficial equity owner of Buyer.
4.5 BROKERS OR FINDERS
Other than PricewaterhouseCoopers ("Buyer's Broker"), neither Buyer nor
SRT nor any of their Representatives have incurred any Liability for brokerage
or finders' fees or agents' commissions or other similar payment in connection
with the Contemplated Transactions.
4.6 DISCLOSURE
No representation or warranty of Buyer or SRT in this Agreement and no
statement in any Schedule contains any material untrue statement or omits to
state a material fact necessary to make the statements herein or therein, in
light of the circumstances in which they were made, not misleading.
ARTICLE 5
COVENANTS OF SELLER BEFORE CLOSING
5.1 ACCESS AND INVESTIGATION
Between the date of this Agreement and the Closing Date and upon
reasonable advance notice from Buyer, Seller will, and will use reasonable
commercial efforts to cause the Company and its Representatives to, (a) afford
Buyer and its Representatives (collectively, "Buyer's Advisors") reasonable
access to the Company's personnel, properties (including subsurface testing),
Contracts, books and records, and other documents and data, (b) furnish Buyer
and Buyer's Advisors with copies of all such Contracts, books and records, and
other documents and data as Buyer may reasonably request, subject to all
relevant confidentiality obligations, and (c) furnish Buyer and Buyer's Advisors
with such additional financial, operating, and other data and information as
Buyer may reasonably request.
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5.2 REPORTS ON THE STATUS OF THE COMPANY
Between the date of this Agreement and the Closing Date, Seller will use
its reasonable commercial efforts to cause the Company to:
(a) conduct the business of the Company only in the Ordinary Course of
Business;
(b) confer with Buyer concerning operational matters of a material nature;
and
(c) report periodically to Buyer concerning the status of the business,
operations, and finances of the Company.
5.3 NEGATIVE COVENANT
Except as otherwise expressly permitted by this Agreement, between the
date of this Agreement and the Closing Date, Seller will vote against any
proposal which would be likely to result in any of the changes or events listed
in Section 3.10.
5.4 REQUIRED APPROVALS
As promptly as practicable after the date of this Agreement, Seller will
cooperate in all reasonable respects with Buyer in obtaining all Governmental
Authorizations and Consents identified in Schedule 4.2(b) (including taking all
actions reasonably requested by Buyer to cause early termination of any
applicable waiting period under the HSR Act); provided that in no event shall
Seller be required to sell or transfer any of its businesses or assets to obtain
HSR approval.
5.5 NOTIFICATION
Between the date of this Agreement and the Closing Date, Seller will
promptly notify Buyer in writing if Seller becomes aware of: (i) any fact or
condition that causes or constitutes a breach of any of Seller's representations
and warranties as of the date of this Agreement, or (ii) the occurrence after
the date of this Agreement of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or constitute a breach of any
such representation or warranty had that representation or warranty been made as
of the time of the occurrence or discovery of such fact or condition. Should any
such fact or condition require any change in the Disclosure Schedule, Seller
will promptly deliver to Buyer a supplement to the Disclosure Schedule
specifying such change. During the same period, Seller will promptly notify
Buyer of the occurrence of any breach of any covenant of Seller in this Article
5 or of the occurrence of any event that may make the satisfaction of the
conditions in Article 7 impossible or unlikely.
5.6 NO NEGOTIATION
Until such time, if any, as this Agreement is terminated pursuant to
Article 9, and except as required under the HSR Act, Seller will vote against
any proposal relating to any business combination transaction involving the
Company, including the sale of any of the Interests of the Company, any merger
or consolidation, or the sale of the business or any of the material assets of
the Company (other than in the Ordinary Course of Business).
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5.7 REASONABLE COMMERCIAL EFFORTS
Seller will use reasonable commercial efforts to cause the conditions in
Article 7 and Section 8.3 to be satisfied; provided that in no event shall
Seller be required to sell or transfer any of its business or assets to obtain
HSR approval.
ARTICLE 6
COVENANTS OF BUYER BEFORE CLOSING
6.1 REQUIRED APPROVALS
As promptly as practicable after the date of this Agreement, Buyer will
make all filings that Legal Requirements require it to make to consummate the
Contemplated Transactions (including all filings under the HSR Act). Between the
date of this Agreement and the Closing Date, Buyer will (i) cooperate with
Seller with respect to all filings that Legal Requirements require Seller to
make in connection with the Contemplated Transactions, and (ii) cooperate in all
reasonable respects with Seller in obtaining all Governmental Authorizations and
Consents identified in Part 3.2(b); provided that in no event will Buyer be
required to dispose of or make any change in any portion of its business or
incur any other burden in order to obtain HSR approval.
6.2 NOTIFICATION
Between the date of this Agreement and the Closing Date, Buyer will
promptly notify Seller in writing if Buyer becomes aware of: (i) any fact or
condition that causes or constitutes a breach of any of Buyer's representations
and warranties as of the date of this Agreement, or (ii) the occurrence after
the date of this Agreement of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or constitute a breach of any
such representation or warranty had that representation or warranty been made as
of the time of the occurrence or discovery of such fact or condition. Should any
such fact or condition require any change in any Part, Buyer will promptly
deliver to Seller a supplement to the Part specifying such change. During the
same period, Buyer will promptly notify Seller of the occurrence of any breach
of any covenant of Buyer in this Article 6 or of the occurrence of any event
that may make the satisfaction of the conditions in Article 8 impossible or
unlikely.
6.3 REASONABLE COMMERCIAL EFFORTS
Buyer will use reasonable commercial efforts to cause the conditions in
Sections 7.3 and Article 8 to be satisfied.
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ARTICLE 7
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Interests and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction, on
or before the Closing Date, of each of the following conditions (any of which
may be waived by Buyer, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS
(a) Except as set forth in Section 7.1(b), all of Seller's representations
and warranties in this Agreement (considered individually and collectively and
giving effect to the Disclosure Schedule, except for supplements) (i) must have
been accurate in all material respects as of the date of this Agreement and (ii)
must be accurate in all material respects as of the Closing Date as if then
made.
(b) All of Seller's representations and warranties in this Agreement which
include a materiality exception (considered individually and collectively, but
without giving effect to any supplements to the Disclosure Schedule) (i) must
have been accurate in all respects as of the date of this Agreement and (ii)
must be accurate in all respects as of the Closing Date as if then made.
7.2 SELLER'S PERFORMANCE
(a) All of the covenants and obligations that Seller is required to
perform or comply with pursuant to this Agreement on or before the Closing Date
that do not contain an express materiality provision, must have been duly
performed and complied with in all material respects and those covenants and
obligations that Seller is required to perform or to comply with pursuant to
this Agreement on or before the Closing Date that do contain an express
materiality provision must have been duly performed and complied with in all
respects.
(b) Seller must have (i) delivered each document that Section 2.4(a)
requires it to deliver; and (ii) performed and complied with, in all respects,
each of the covenants and obligations in Sections 5.4 and 5.7 and each of the
covenants and obligations in this Agreement that Seller is required to perform
or comply with on or before the Closing Date that contains an express
materiality qualification.
(c) Seller must have, on or before the Closing Date, duly performed or
complied with all covenants and obligations that Seller is required to perform
or comply with pursuant to the Contemporaneous Transactions.
7.3 CONSENTS
(a) Each of the Governmental Authorizations and Consents identified in
Part 3.2(b) and Schedules 4.2(b) and (c) and 4.4(g) must have been obtained and
must be in full force and effect; and
(b) Expiration or early termination of any applicable waiting period under
the HSR Act must have occurred or been granted.
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7.4 ADDITIONAL DOCUMENTS
Seller must have delivered to Buyer the documents listed in Section 2.4(a)
and each of the following documents:
(a) the affidavit referred to in Section 11.12;
(b) the Assignment and Assumption Agreement, executed and delivered by
Seller; and
(c) such other documents as Buyer may reasonably request for the purpose
of (i) evidencing the accuracy of any of Seller's representations and
warranties, (ii) evidencing the performance by Seller of, or the compliance by
Seller with, any covenant or obligation required to be performed or complied
with by Seller, (iii) evidencing the satisfaction of any condition referred to
in this Article 7, or (iv) otherwise facilitating the consummation or
performance of any of the Contemplated Transactions.
7.5 NO PROCEEDINGS
Since the date of this Agreement, there must not have been commenced or
Threatened against Buyer, or against any Related Person of Buyer, any Proceeding
(a) involving any challenge to, or seeking damages or other relief in connection
with, any of the Contemplated Transactions, or (b) that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with any of the
Contemplated Transactions.
7.6 NO CLAIM REGARDING EQUITY OWNERSHIP OR SALE PROCEEDS
There must not have been made or Threatened by any Person any claim
asserting that such Person (a) is the holder or the beneficial owner of, or has
the right to acquire or to obtain beneficial ownership of any member interest
of, or any other voting, equity, or ownership interest in, the Company (other
than Chromalloy, so long as Chromalloy executes and delivers the Amended and
Restated Operating Agreement), or (b) is entitled to all or any portion of the
Purchase Price.
7.7 NO PROHIBITION
There must not be in effect any applicable Legal Requirement or Order that
(a) prohibits the consummation of the Contemplated Transactions and (b) has been
adopted or issued, or has otherwise become effective, since the date of this
Agreement.
7.8 OPERATING AGREEMENT AMENDMENT
Buyer shall have received the Amended and Restated Operating Agreement,
executed and delivered by Chromalloy.
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ARTICLE 8
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Interests and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, on
or before the Closing Date, of each of the following conditions (any of which
may be waived by Seller, in whole or in part):
8.1 ACCURACY OF REPRESENTATIONS
All of Buyer's representations and warranties in this Agreement
(considered collectively and individually and giving effect to any Schedules
delivered by Buyer to Seller, except for supplements) must have been accurate in
all material respects as of the date of this Agreement and must be accurate in
all material respects as of the Closing Date as if then made.
8.2 BUYER'S PERFORMANCE
(a) All of the covenants and obligations that Buyer is required to perform
or to comply with pursuant to this Agreement on or before the Closing Date that
do not contain an express materiality provision, must have been duly performed
and complied with in all material respects and those covenants and obligations
that Buyer is required to perform or to comply with pursuant to this Agreement
on or before the Closing Date that do contain an express materiality provision
must have been duly performed and complied with in all respects.
(b) Buyer must have (i) executed and delivered each of the documents
required to be delivered by Buyer pursuant to Section 2.4(b) and (ii) made the
cash payment required pursuant to Sections 2.4(b)(i).
(c) Buyer must have, on or before the Closing Date, duly performed or
complied with all covenants and obligations that Buyer is required to perform or
comply with pursuant to the Contemplated Transactions.
8.3 CONSENTS
(a) Each of the Governmental Authorizations and Consents identified in
Part 3.2(b) and Schedules 4.2(b), 4.2(c) and 4.4(g) must have been obtained and
must be in full force and effect.
(b) Expiration or early termination of any applicable waiting period under
the HSR Act must have occurred or been granted.
8.4 ADDITIONAL DOCUMENTS
Buyer must have delivered to Seller:
(a) the Assignment and Assumption Agreement, executed by Buyer; and
(b) any and all such documents as Seller may reasonably request for the
purpose of (i) evidencing the accuracy of any representation or warranty of
Buyer, (ii) evidencing the performance by Buyer of, or the compliance by Buyer
with, any covenant or obligation
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required to be performed or complied with by Buyer, (iii) evidencing the
satisfaction of any condition referred to in this Article 8, or (iv) otherwise
facilitating the consummation of any of the Contemplated Transactions.
8.5 NO PROCEEDINGS
There must not be in effect any Legal Requirement or Order that (a)
prohibits the consummation of the Contemplated Transactions, and (b) has been
adopted or issued, or has otherwise become effective, since the date of this
Agreement.
ARTICLE 9
TERMINATION
9.1 TERMINATION EVENTS
This Agreement may, by notice given before or immediately prior to the
Closing and subject to Section 9.2, be terminated:
(a) by either Buyer or Seller if a material breach of any provision of
this Agreement has been committed by the other party and such breach has not
been waived in writing by the other party;
(b) by Buyer, if any condition in Article 7 has not been satisfied as of
the Closing Date or if satisfaction of such a condition by such date is or
becomes impossible (other than through the failure of Buyer to comply with its
obligations under this Agreement) and Buyer has not waived in writing such
condition on or before such date;
(c) by Seller, if any condition in Article 8 has not been satisfied as of
the Closing Date or if satisfaction of such a condition by such date is or
becomes impossible (other than through the failure of Seller to comply with its
obligations under this Agreement) and Seller has not waived in writing such
condition on or before such date;
(d) by mutual written consent of Buyer and Seller; or
(e) by either Buyer or Seller if the Closing has not occurred (other than
through the failure of the party seeking to terminate this Agreement to comply
fully with its obligations under this Agreement) on or before December 31, 2000,
or such later date as the parties may agree upon in writing.
9.2 EFFECT OF TERMINATION
If this Agreement is terminated pursuant to Section 9.1, all obligations
of the parties under this Agreement will terminate, except that the
representations in Sections 3.25 and 4.5 and the obligations in Sections 12.1,
12.3 and 12.14 will survive; provided, however, that if this Agreement is
terminated by a party because of the breach of the other party's covenant
obligations under this Agreement or because one or more of the conditions to the
terminating party's obligations under this Agreement is not satisfied as a
result of the other party's failure to comply with its covenant obligations
under this Agreement, the terminating party's right to pursue all legal remedies
will survive such termination unimpaired; provided, further, that the sole
remedy of any party which obtains actual knowledge prior to the Closing (whether
through a supplemental disclosure by the other party or otherwise) that a
representation or
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warranty made by the other party is untrue will be to elect to terminate this
Agreement pursuant to Section 9.1.
ARTICLE 10
INDEMNIFICATION; REMEDIES
10.1 SURVIVAL, RIGHT TO INDEMNIFICATION; WAIVER
All representations, warranties, covenants, and obligations in this
Agreement, the Disclosure Schedule and other Schedules, the supplements to the
Disclosure Schedule and other Schedules, the certificate delivered pursuant to
Section 2.4(a)(ii), and any other certificate or document delivered pursuant to
this Agreement, will survive the Closing and the consummation of the
Contemplated Transactions, subject to the limitations set forth in this Section
10.1 and Sections 10.4, 10.5 and Article 11. The right to indemnification,
payment of damages or other remedy based on such representations, warranties,
covenants, and obligations will not be affected by any investigation conducted
with respect to the accuracy or inaccuracy of or compliance with, any
representation, warranty, covenant, or obligation, except to the extent that a
party obtains actual knowledge of an inaccuracy of, or failure of the other
party to comply with any representation, warranty, covenant or obligation. The
sole remedy of any party which obtains actual knowledge prior to the Closing
(whether through a supplemental disclosure by the other party or otherwise),
that a representation or warranty made by the other party is untrue, will be to
elect to terminate this Agreement pursuant to Section 9.1. Notwithstanding any
other provision of this Agreement to the contrary (except as relates to Tax
matters governed by Article 11), the provisions of this Article 10 will be the
sole and exclusive remedy from and after the Closing Date for any claims arising
under this Agreement, including claims of breach of any representation, warranty
or covenants in this Agreement; provided, however, that the foregoing clause of
this sentence will not be deemed a waiver by any party of any right to specific
performance or injunctive relief, or any right to remedy arising by reason of
any claim of fraud with respect to this Agreement.
10.2 INDEMNIFICATION BY SELLER
Subject to Sections 10.4 and 10.5, Seller will indemnify and hold harmless
Buyer and its Representatives, equity owners, controlling persons and
affiliates, other than the Company (collectively, the "Buyer Indemnitees") for,
and will pay to the Buyer Indemnitees the Adjusted Monetary Value of, any
Adverse Consequences arising, directly or indirectly, from or in connection
with:
(a) any breach of any representation or warranty made by Seller in this
Agreement as of the date of this Agreement giving effect to the Disclosure
Schedule and any supplements to the Disclosure Schedule;
(b) any breach of any representation or warranty made by Seller in this
Agreement as of the Closing Date giving effect to the Disclosure Schedule and
any supplements to the Disclosure Schedule;
(c) any breach of any representation or warranty made by Seller in any
certificate or document delivered by Seller pursuant to this Agreement;
(d) any breach by Seller of any covenant or obligation of Seller in this
Agreement;
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(e) any aggregate Liabilities of the Company existing at or arising out of
a state of facts existing at or before the Closing Date, to the extent that such
Liabilities are not reflected or reserved against in the Interim Unaudited
Company Balance Sheet;
(f) any matter disclosed in Part 3.21;
(g) any claim by any Person for brokerage or finder's fees or commissions
or similar payments based upon any agreement or understanding alleged to have
been made by any such Person with either Seller or the Company (or any Person
acting on their behalf) in connection with any of the Contemplated Transactions;
and
(h) any and all Proceedings, demands or assessments incidental to any of
the matters set forth in Section 10.2(a) through (g).
Notwithstanding the foregoing, indemnification for breach of any representation
or warranty contained in Section 3.17 or for breach of any covenant or
obligation contained in Article 11 is governed by Article 11 (except as
expressly set forth in this Article 10).
10.3 INDEMNIFICATION BY BUYER
Buyer will indemnify and hold harmless Seller and its Representatives,
equity owners, controlling persons and affiliates (collectively, the "Seller
Indemnitees") for, and will pay to the Seller Indemnitees the monetary value of
any Adverse Consequences arising, directly or indirectly, from or in connection
with:
(a) unless a release shall be obtained from the lessor thereunder, any
breach of any representation or warranty made by Buyer in this Agreement or in
any document (other than the certificate described in Section 2.4(b)(ii))
delivered by Buyer pursuant to this Agreement;
(b) any breach by Buyer of any covenant or obligation of Buyer in this
Agreement;
(c) any claim by any Person for brokerage or finder's fees or commissions
or similar payments based upon any agreement or understanding alleged to have
been made by such Person with Buyer (or any Person acting on its behalf) in
connection with any of the Contemplated Transactions;
(d) unless a release shall be obtained from the lessor thereunder, any
Liabilities arising under the Company Lease subsequent to Closing and any and
all Proceedings, demands or assessments incidental thereto;
(e) any and all Proceedings, demands or assessments incidental to any of
the matters set forth in Section 10.3(a) through (c).
Notwithstanding the foregoing, indemnification for breach of a covenant or
obligation contained in Article 11 will be governed by Article 11 (except as
expressly set forth in this Article 10).
10.4 TIME LIMITATIONS
(a) If the Closing occurs, Seller will have no Liability (for
indemnification or otherwise) for breach of (i) a covenant or obligation to be
performed or complied with before the Closing Date or (ii) a representation or
warranty, other than those in Sections 3.3, 3.17,
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3.18, and 3.20, unless on or before the eighteen month anniversary of the
Closing Date, Buyer notifies Seller of a claim specifying the factual basis of
that claim in reasonable detail to the extent then known by Buyer; a claim with
respect to a breach of a representation or warranty contained in Section 3.3,
3.18, or 3.20, or a claim for indemnification or reimbursement not based upon
any covenant or obligation to be performed or complied with before the Closing
Date may be made at any time. The survival period of Section 3.17 is governed by
Section 11.13.
(b) If the Closing occurs, Buyer will have no Liability (for
indemnification or otherwise) for breach of (i) a covenant or obligation to be
performed or complied with before the Closing Date or (ii) a representation or
warranty, unless on or before the eighteen month anniversary of the Closing
Date, Seller notifies Buyer of a claim specifying the factual basis of that
claim in reasonable detail to the extent then known by Seller; a claim for
indemnification or reimbursement not based upon any covenant or obligation to be
performed or complied with before the Closing Date may be made at any time.
10.5 LIMITATIONS ON INDEMNIFICATION--SELLER
(a) Notwithstanding any other provision in this Agreement, and in addition
to the limitations set forth above, Seller will have no liability (for
indemnification or otherwise) with respect to any breach of any of Seller's
representations and warranties of which Buyer had actual knowledge on the date
such representation and warranty is made or deemed made (including on the
Closing Date).
(b) Notwithstanding any other provision in this Agreement, and in addition
to the limitations set forth above, (i) Seller will have no liability (for
indemnification or otherwise) under Section 10.2 or Article 11 unless and until
the monetary value of the Adverse Consequences suffered by the Buyer
Indemnitees, in the aggregate, exceeds U.S.$200,000, in which event the relevant
Buyer Indemnitees shall only be entitled to recover amounts in respect of
Seller's indemnification obligations hereunder that are in excess of
U.S.$200,000, and (ii) Seller's maximum liability to the Buyer Indemnitees
(other than with respect to claims under Article 11), in the aggregate, under
this Agreement shall be the Purchase Price.
(c) Notwithstanding any other provision in this Agreement, and in addition
to the limitations set forth above, Seller will have no liability pursuant to
this Article 10 and Article 11 with respect to any Liability or Adverse
Consequences suffered by any Buyer Indemnitee to the extent that any Buyer
Indemnitee shall already have obtained (whether pursuant to any other provision
of this Article 10, Article 11 or otherwise) any recovery or other compensation
with respect to such Liability or Adverse Consequences from Seller. Without
limiting the foregoing, Seller will have no liability pursuant to this Article
10 and Article 11 with respect to any Liability or Adverse Consequences suffered
by any Buyer Indemnitee to the extent that such Liability or Adverse
Consequences relates to any Adjustment Amount paid by Seller to Buyer.
10.6 LIMITATIONS ON INDEMNIFICATION--BUYER
(a) Notwithstanding any other provision in this Agreement, and in addition
to the limitations set forth above, Buyer will have no liability (for
indemnification or otherwise) with respect to any breach of any of Buyer's
representations and warranties of which Seller had actual knowledge on the date
such representation and warranty is made or deemed made (including on the
Closing Date).
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(b) Notwithstanding any other provision in this Agreement, and in addition
to the limitations set forth above, (i) Buyer will have no liability in respect
of its indemnification obligations under this Agreement under Sections 10.3(a),
(b), (c), or (e) unless and until the monetary value of the Adverse Consequences
suffered by the Seller Indemnitees, in the aggregate, exceeds U.S.$200,000, in
which event the relevant Seller Indemnitees shall only be entitled to recover
amounts in respect of Buyer's indemnification obligations that are in excess of
U.S.$200,000, and (ii) Buyer's maximum liability to the Seller Indemnitees in
respect of Buyer's indemnification obligations under Section 10.3, in the
aggregate, shall be the Purchase Price.
10.7 PROCEDURE FOR INDEMNIFICATION--DEFENSE OF THIRD-PARTY CLAIMS
(a) Promptly after receipt by a Person entitled to indemnity under Section
10.2 or 10.3 (an "Indemnified Person") of notice of the assertion of a
third-party claim against it, the Indemnified Person will, if a claim is to be
made against a Person obligated to indemnify under such Section (an
"Indemnifying Person"), give notice to the Indemnifying Person of the assertion
of such claim. An Indemnified Person's failure to notify an Indemnifying Person
will not relieve the Indemnifying Person of any Liability that it may have to
the Indemnified Person, except to the extent that the Indemnifying Person
demonstrates that the resolution of such claim is prejudiced by the Indemnified
Person's failure to give such notice.
(b) If any claim referred to in Section 10.7(a) is brought against an
Indemnified Person by means of a Proceeding and the Indemnified Person gives
written notice to the Indemnifying Person of the commencement of such
Proceeding, the Indemnifying Person will be entitled to participate in such
Proceeding and, to the extent that it wishes (unless (i) the Indemnifying Person
is also a party to such Proceeding and the Indemnified Person determines in good
faith that joint representation would be inappropriate or (ii) the Indemnifying
Person fails to provide reasonable assurance to the Indemnified Person of its
financial capacity to defend such Proceeding and provide indemnification with
respect to such Proceeding), assume the defense of such Proceeding with counsel
reasonably satisfactory to the Indemnified Person. After written notice from the
Indemnifying Person to the Indemnified Person of its election to assume the
defense of such Proceeding, the Indemnifying Person will not, as long as it
diligently conducts such defense, be liable to the Indemnified Person under this
Article 10 for any fees of other counsel or any other expenses with respect to
the defense of such Proceeding, in each case subsequently incurred by the
Indemnified Person in connection with the defense of such Proceeding, other than
reasonable costs of investigation. If the Indemnifying Person assumes the
defense of a Proceeding, no compromise or settlement of such claims may be
effected by the Indemnifying Person unless (A) the sole relief provided is
monetary damages that are paid in full by the Indemnifying Person or (B) the
Indemnified Person consents to such compromise or settlement, which such consent
will not be unreasonably withheld or delayed.
(c) If written notice is given to an Indemnifying Person of the
commencement of any Proceeding and the Indemnifying Person does not, within
fifteen days after the Indemnified Person's notice is given, give written notice
to the Indemnified Person of its election to assume the defense of such
Proceeding, the Indemnifying Person will be bound by any determination made in
such Proceeding or any compromise or settlement effected by the Indemnified
Person.
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(d) Notwithstanding the foregoing, if an Indemnified Person determines in
good faith that there is a reasonable probability that a Proceeding may
adversely affect it or its affiliates other than as a result of monetary damages
for which it would be entitled to indemnification under this Agreement, the
Indemnified Person may, by notice to the Indemnifying Person, assume the
exclusive right to defend, compromise, or settle such Proceeding unless the
Indemnifying Person is also a party to such Proceeding and the Indemnifying
Person determines in good faith that joint representation would be
inappropriate, but the Indemnifying Person will not be bound by any
determination of a Proceeding so defended or any compromise or settlement
effected without its consent (which may not be unreasonably withheld).
Notwithstanding the provisions of Sections 10.7(a) through (d), any claim
involving Taxes will be governed by Article 11.
10.8 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS
A claim for indemnification for any matter not involving a third-party
claim may be asserted by written notice to the party obligated to indemnify and
will be paid promptly after such notice.
ARTICLE 11
TAX MATTERS
11.1 TAX RETURNS
The Company, in consultation with Seller, will prepare and file, or cause
to be prepared and filed, all of the Company's Tax Returns for all taxable years
or periods ending on or before the Closing Date, using accounting methods and
other practices that are consistent with those used by the Company in its prior
Tax Returns. Tax Returns for the short period ending on the Closing Date will be
prepared by taking into account Treasury Regulation Section 1.706-1(c)(1) or any
similar provision of state, local or foreign law, which requires a complete
closing of the partnership books on the Closing Date.
11.2 INDEMNIFICATION OF SELLER
Buyer will indemnify and hold harmless Seller Indemnitees from and against
any and all Taxes arising out of or relating to any breach of Buyer's covenants
contained in this Article 11.
11.3 INDEMNIFICATION OF BUYER
Seller will indemnify and hold harmless the Buyer Indemnitees from and
against any and all Liability of the Buyer Indemnitees for Taxes arising out of
or relating to: (a) the Company for the Pre-Closing Period and (b) any Adverse
Consequences arising, directly or indirectly, from or in connection with any
breach of the representations and warranties contained in Section 3.17 of this
Agreement or of Seller's covenants contained in this Article 11.
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11.4 APPORTIONMENT OF TAXES
With respect to any Straddle Period, Buyer and Seller will, to the extent
permitted by law, elect to treat the Closing Date as the last day of the taxable
year or period of the Company and will apportion any Taxes arising in a Straddle
Period to the Pre-Closing Period under the "closing-the-books" method as
described in Treasury Regulation Section 1.706-1(c)(1) (or any similar provision
of state, local or foreign law). In any case where applicable law does not
permit the Company to treat the Closing Date as the last day of the taxable year
or period, any Taxes arising in a Straddle Period will be apportioned to the
Pre-Closing Period based on a closing of the books of the Company; provided that
(i) exemptions, allowances or deductions that are calculated on a annualized
basis (including depreciation, amortization and depletion deductions) will be
apportioned on a daily pro-rata basis; and (ii) solely for purposes of
determining the marginal tax rate applicable to income during such period in a
jurisdiction in which such tax rate depends upon the level of income, annualized
income will be taken into account.
11.5 INDEMNIFICATION PROCESS
Buyer will notify Seller in writing ("Buyer's Notice") promptly upon
receipt by Buyer or the Company of notice of any pending or Threatened Tax
audits or assessments which may materially affect the Tax liabilities of the
Company or Seller or for which Seller could be required to indemnify Buyer
pursuant to Section 11.3 (a "Tax Claim"). If (i) Buyer's Notice is not given
within 30 days of Buyer's receipt of written notice of the Tax Claim, or (ii)
Buyer's Notice fails to reasonably describe such written notice, in each case
taking into account the facts and circumstances with respect to such Tax Claim,
the Seller will not be liable to the Buyer to the extent the Seller's ability to
effectively contest the Tax Claim is prejudiced.
In the event of a third-party claim for Taxes, Seller will be entitled to
participate, at its expense, in any Proceeding relating to any taxable year or
period of the Company ending on or before the Closing Date. Seller will not
settle or otherwise compromise any issue or matter on a basis that could
adversely affect Buyer's liability for Taxes (including any indemnification for
Taxes pursuant to Section 11.2 or the imposition of tax deficiencies) without
Buyer's prior written consent, which consent will not be unreasonably withheld.
If Seller does not elect to participate in the defense of any such Proceeding,
the Company may, without any effect on Buyer's right of indemnification by
Seller under this Article 11, defend the same in such manner as it may deem
appropriate, provided that no claim for Taxes relating to a Pre-closing Period
will be settled, either administratively or after commencement of litigation, on
a basis that could adversely affect Seller's liability for Taxes (including any
indemnification for Taxes pursuant to Section 11.3 or the imposition of tax
deficiencies) without the prior written consent of Seller, which consent shall
not be unreasonably withheld. The Company will control any Proceeding relating
to any taxable year or period of the Company ending after the Closing Date.
11.6 TIMING OF PAYMENT
Payment of any amounts due under this Article 11 will be made by Seller or
Buyer, as the case may be, within 30 days of the receipt of reasonable evidence
establishing that such a payment is required. If a payment of any amount due
under this Article 11 is not made within 30 days of the receipt of such request,
interest will accrue at the federal
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"underpayment" rate set forth in Section 6621(a)(2) of the Code beginning on the
31st day after the receipt of such request.
11.7 CHARACTERIZATION OF INDEMNITY PAYMENT
All amounts paid by Buyer or Seller, as the case may be, by reason of
Sections 10.2, 10.3, 11.2 and 11.3 will be treated, to the extent permitted
under applicable Legal Requirements, as adjustments to the Purchase Price for
all Tax purposes.
11.8 TRANSACTIONAL TAXES
Notwithstanding any other provision of this Agreement, all transfer,
documentary, recording, notarial, sales, use, registration, stamp and other
similar Taxes or fees imposed by any U.S. federal, state or local taxing
authority in connection with the Contemplated Transactions will be borne by
Seller regardless of which party is obligated to pay such Tax under applicable
Legal Requirements; any such Taxes or fees imposed by any Swiss or other
European national or local taxing authority in connection with the Contemplated
Transactions will be borne by Buyer regardless of which party is obliged to pay
such Tax under applicable Legal Requirements. Buyer and Seller will cooperate in
timely making and filing all Tax Returns as may be required to comply with Legal
Requirements relating to such Taxes.
11.9 TAX SHARING AGREEMENTS
Seller will cause the Company to terminate as of the Closing Date any Tax
sharing, indemnity or allocation agreement between the Company and any other
party.
11.10 TAX ELECTIONS
(a) Seller will not unreasonably withhold its consent (if such consent is
required) to the making of a Section 754 election with respect to the Company,
effective for the taxable period ending on the Closing Date
(b) Within 90 days after the Closing Date, Buyer will prepare an
allocation required under Section 755 of the Code.
11.11 TAX RECORDS
The Company will make available to Seller such records as Seller may
require for the preparation of any Tax Return and such records as Seller may
require for the defense of any Proceeding concerning any such Tax Return.
11.12 FOREIGN INVESTMENT IN REAL PROPERTY AFFIDAVIT
At the Closing, Seller will deliver an affidavit stating, under penalties
of perjury, Seller's U.S. taxpayer identification number and that Seller is not
a "foreign person" as defined in Section 1445 of the Code.
11.13 MISCELLANEOUS
(a) Except as expressly provided in Article 10, this Article 11 and the
representation and warranties contained in Section 3.17 are the sole provisions
governing Tax
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matters. Except as expressly provided in Article 10, this Article 11 is the sole
provision governing indemnification for Tax matters contained in Section 3.17
and in this Article 11.
(b) The covenants and agreement of the parties contained in this Article
11 and the representation and warranties contained in Section 3.17 will survive
the Closing and will remain in full force and effect until six months following
the expiration of all statutes of limitations with respect to any Taxes that
would be indemnifiable by Buyer or Seller under Sections 11.2 and 11.3 of this
Agreement.
ARTICLE 12 GENERAL PROVISIONS
12.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of its Representatives. Seller
will pay all amounts payable to Seller's Broker and Buyer will pay all amounts
payable to Buyer's Broker in connection with this Agreement and the Contemplated
Transactions. Buyer will pay the entire HSR Act filing fee. If this Agreement is
terminated, the obligation of each party to pay its own expenses will be subject
to any rights of such party arising from a breach of this Agreement by another
party.
12.2 PUBLIC ANNOUNCEMENTS
Any public announcement with respect to this Agreement or the Contemplated
Transactions will be issued by Buyer and Seller, if at all, at such time and in
such manner as Buyer and Seller shall mutually agree. Neither Buyer nor Seller,
nor any of their respective Representatives, will make any disclosure of the
Contemplated Transactions to any Person, (other than their Representatives, and
rating agencies that rate such party's securities or Chromalloy) except with the
prior written consent of the other or as required by Legal Requirements or as
required by any stock exchange or stock market rule, regulation or requirement.
12.3 CONFIDENTIALITY
Beginning on the date of this Agreement and continuing indefinitely
thereafter, Buyer and Seller will maintain in confidence, and will cause the
Representatives of Buyer, Seller, and the Company to maintain in confidence, and
not use to the detriment of another party or the Company any written, oral, or
other information obtained in confidence from another party or the Company in
connection with this Agreement or the Contemplated Transactions, unless (a) such
information is already known to such party or to others not bound by a duty of
confidentiality or such information becomes publicly available through no fault
of such party, (b) the use of such information is necessary or appropriate in
making any filing or obtaining any Consent required for the consummation of the
Contemplated Transactions, or (c) the furnishing or use of such information is
required by or necessary or appropriate in connection with Proceedings. If the
Contemplated Transactions are not consummated, each party will return or destroy
as much of such written information as the other party may reasonably request.
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12.4 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed given to a party when (a)
delivered to the appropriate address by hand or by nationally recognized
overnight courier service (costs prepaid); (b) sent by facsimile or e-mail with
confirmation of transmission by the transmitting equipment; or (c) received or
rejected by the addressee, if sent by certified mail, return receipt requested;
in each case to the following addresses, facsimile numbers or e-mail addresses
and marked to the attention of the individual (by name or title) designated
below (or to such other address, facsimile number, e-mail address or individual
as a party may designate by notice to the other party):
Seller:
Xxxxxx Lease Finance Corporation
Attention: Xxxxxxx X. Xxxxxx, XX
President and Chief Executive Officer
Address: 0000 Xxxxxxxxx Xxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: 000-000-0000
E-mail Address: xxxxxxx@xxxx.xxx
with a copy to:
Xxxxxxx X. Xxxxx
Xxxxxx, Xxxx & Xxxxxxxx LLP
Xxx Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile No.: 415-374-8411
E-mail Address: xxxxxx@xxxxxx.xxx
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Buyer:
SR Technics Group America, Inc.
Attention: Xxxx Xxxxxx Xxxxxxx
President and Chief Executive Officer
Address: XX-0000
Xxxxxx Xxxxxxx,
Xxxxxx, Xxxxxxxxxxx
Facsimile No.: 011-41-1-812-9100
E-mail Address: xxxxxxxx@xxxxxxxxx.xxx
with a copy to:
Xxxxx & XxXxxxxx
Xxxxxx X. Xxxxxxx
One Prudential Plaza
Suite 3900
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.: 000-000-0000
E-mail Address: xxxxxx.x.xxxxxxx@xxxxxxxx.xxx
12.5 FURTHER ASSURANCES
The parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents, and
(c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and the
Contemplated Transactions.
12.6 INCORPORATION OF SCHEDULES
The Schedules identified in this Agreement, including the Disclosure
Schedule, are incorporated herein by reference and made a part of this
Agreement.
12.7 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes and terminates all prior agreements among the
parties with respect to its subject matter (other than (i) the Confidential
Declaration, dated October 29, 1999, between Buyer and Seller and (ii) the
Letter Amendment to Confidential Declaration, dated February 10, 2000) and
constitutes (along with the documents delivered pursuant to this Agreement) a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Agreement may not be amended,
supplemented or otherwise modified, except by a written agreement executed by
the party to be charged with the amendment.
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12.8 DISCLOSURE SCHEDULE
The statements in the Disclosure Schedule, and those in any supplement
thereto relate only to the provisions in the Section of the Agreement to which
they expressly relate and not to any other provision unless clear
cross-reference has been made therein.
12.9 TIME OF ESSENCE
With regard to all dates and time periods set forth or referred to in this
Agreement, time is of the essence.
12.10 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
12.11 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
No party may assign any of its rights or delegate any of its obligations
under this Agreement without the prior written consent of the other party, which
will not be unreasonably withheld, except that Buyer may assign any of its
rights (including the right to receive the Interests) and delegate any of its
obligations under this Agreement to any SAirGroup Affiliate so long as Buyer
guarantees the SAirGroup Affiliate's performance under this Agreement. Subject
to the preceding sentence, this Agreement will apply to, be binding in all
respects upon, and inure to the benefit of the parties' successors and permitted
assigns. Nothing expressed or referred to in this Agreement will be construed to
give any Person, other than the parties to this Agreement, any legal or
equitable right, remedy, or claim under or with respect to this Agreement or any
provision of this Agreement except such rights as shall inure to a successor or
permitted assignee pursuant to this Section 12.11.
12.12 ENFORCEMENT OF AGREEMENT
(a) Seller acknowledges and agrees that Buyer could be damaged irreparably
if any of the provisions of this Agreement are not performed in accordance with
the specific terms and that any breach of this Agreement by Seller could not be
adequately compensated in all cases by monetary damages alone. Accordingly,
Seller agrees that, in addition to any other right or remedy to which Buyer may
be entitled, at law or in equity, it will be entitled to enforce any provision
of this Agreement by a decree of specific performance and to temporary,
preliminary and permanent injunctive relief to prevent breaches or threatened
breaches of any of the provisions of this Agreement, without posting any bond or
other undertaking.
(b) Buyer acknowledges and agrees that Seller could be damaged irreparably
if any of the provisions of this Agreement are not performed in accordance with
the specific terms and that any breach of this Agreement by Buyer could not be
adequately compensated in all cases by monetary damages alone. Accordingly,
Buyer agrees that, in addition to any other right or remedy to which Seller may
be entitled, at law or in equity, it will be entitled to enforce any provision
of this Agreement by a decree of specific performance and to temporary,
preliminary and permanent injunctive relief to prevent breaches or threatened
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breaches of any of the provisions of this Agreement, without posting any bond or
other undertaking.
12.13 WAIVER
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither any failure nor any delay by any party in
exercising any right, power, or privilege under this Agreement or any of the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or any of the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of that party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
12.14 ARBITRATION; SERVICE OF PROCESS
(a) Any Proceeding arising out of or relating to this Agreement (or breach
thereof) whether arising in tort, contract or otherwise, will be in accordance
with the following procedures:
(i) The parties, on written notice of a Proceeding given by one
party to the other, will first consult and negotiate with each other in good
faith and, recognizing their mutual interests, attempt to reach an equitable
solution.
(ii) If the parties are unable to reach such a solution within a
period of 30 days from the date of the receipt of a written notice of the
controversy or claim given by the party requesting good faith negotiations, the
controversy or claim will be referred to the Chief Executive Officer of each
party. The respective Chief Executive Officers will negotiate with each other in
good faith and, recognizing their mutual interests, attempt to reach an
equitable solution.
(iii) If the respective Chief Executive Officers are unable to reach
such a solution within a period of 30 days from the referral of such Proceeding,
an independent mediator chosen by both Members will attempt to resolve such
controversy or claim.
(iv) If the parties are unable to agree mutually upon a mediator,
then the mediator will be appointed by the American Arbitration Association in
the New York metropolitan area ("AAA") in accordance with then-current
commercial rules of mediation thereof and the mediation process will be held in
the New York metropolitan area.
(v) If such Proceeding cannot be resolved by mediation within 60
days after the party raising the controversy or claim first notifies the other
party thereof in writing, then the Proceeding will be submitted to AAA for
binding arbitration, to be held in New York, NY metropolitan area, in accordance
with the then-current commercial arbitration rules of AAA.
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(b) The award from any binding arbitration will be binding upon the
parties and their successors and permitted assigns, whether or not any party
fails or refuses to participate therein, and judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof.
(c) The arbitrator will have the power to issue injunctions and otherwise
to grant equitable relief, and will award legal fees and costs (including fees
and costs incurred by AAA and by the arbitrator) to the prevailing party. The
arbitrator will not have the power to award punitive, exemplary or indirect
damages.
(d) Except as may be otherwise ordered by the arbitrator in accordance
with Section 12.14, each party will bear its own costs and expenses in
connection with any proceeding commenced under this Section 12.14 including,
without limitation, legal fees and disbursements, travel expenses, witness fees
and costs, photocopying and other preparation expenses. The costs and other fees
charged by the independent mediator or AAA, whether in connection with a
mediation and/or arbitration, will be shared equally by the parties.
(e) The Parties agree that except as specifically provided herein all
other provisions of the Agreement will remain in full force and effect and are
specifically adopted and affirmed by each Party.
12.15 GOVERNING LAW
This Agreement will be governed by and construed under the laws of the
State of New York without regard to conflicts of laws principles that would
require the application of any other law.
12.16 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement.
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The parties have executed and delivered this Agreement as of the date
indicated in the first sentence of this Agreement.
SR TECHNICS GROUP AMERICA, INC.
By: /s/ Xxxx Xxxxxx Xxxxxxx
-----------------------------------------
Xxxx Xxxxxx Beyeler
President and Chief Executive Officer
By: /s/ Xxxx Xxxxxxxx
----------------------------------------
Xxxx Xxxxxxxx
Authorized Representative
XXXXXX LEASE FINANCE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx, XX
--------------- ------------------------
Xxxxxxx X. Xxxxxx, XX
Chief Executive Officer and President
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GUARANTY OF SRT
(THIS "GUARANTY")
1. GUARANTY
(a) SRT hereby guarantees to Seller the full and prompt payment and
performance of each and all of Buyer's obligations under the terms and
conditions of this Agreement.
(b) The liability of SRT hereunder is independent of and not in
consideration of or contingent upon the liability of Buyer and a separate action
or actions may be brought and prosecuted against SRT, whether or not any action
is brought or prosecuted against Buyer or Buyer is joined in any such action or
actions. SRT's obligations under this Guaranty shall be construed as a
continuing, absolute and unconditional guaranty of payment (and not merely of
collection) and performance of all of Buyer's obligations without regard to: (c)
(i) (d) (e) any defense (other than payment), setoff or counterclaim that may at
any time be available to Buyer against, and any right of setoff at any time held
by, Seller; or (ii) (f) any other circumstance whatsoever (with or without
notice to or knowledge of SRT), whether or not similar to any of the foregoing,
that constitutes, or might be construed to constitute, an equitable or legal
discharge of Buyer, in bankruptcy or in any other instance.
2. REPRESENTATIONS AND WARRANTIES
SRT represents and warrants to the Seller on the date hereof and on the
Closing Date as follows:
(a) SRT has either (i) a preexisting business relationship with either the
Company or any of its officers, directors or controlling persons, or (ii) the
capacity to protect its own interests in connection with the purchase of the
Interests by virtue of its financial expertise or of professional advisors to
Buyer who are unaffiliated with and who are not compensated by the Company or
any of its affiliates, directly or indirectly.
(b) SRT is an "accredited investor" as that term is defined in Rule 501 of
Regulation D of the Securities Act.
(c) SRT is the only direct and/or indirect equity owner of Buyer.
(d) The purchase of the Interests by Buyer is permitted by the laws of the
United States, Switzerland and the European Union and the purchase and, except
as set forth on Schedule 4.4(g) of the Agreement, the sale of the Interests does
not require the filing of any notice, permit, registration or qualification with
any governmental entity of the United States, Switzerland or the European Union.
(e) SRT is a company duly organized and validly existing under the laws of
Switzerland with full power and authority to conduct its business as it is now
being conducted and to own or use the properties and assets that it purports to
own or use. SRT has the absolute and unrestricted right, power, and authority to
execute and deliver this Agreement and to perform its obligations hereunder,
which actions have been duly authorized and approved by all necessary corporate
action of SRT. Assuming the execution and delivery of this Agreement by Seller,
this Agreement constitutes the legal, valid, and binding
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obligation of SRT, enforceable against SRT in accordance with its terms, subject
to any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws now or hereafter in effect relating to creditors' rights generally or to
general principles of equity. Except as set forth in Schedule 4.2(b) of the
Agreement, SRT is not and will not be required to obtain any Governmental
Authorization or Consent in connection with the execution and delivery of this
Agreement or the consummation or performance of this Agreement. Except as set
forth in Schedule 4.2(c) of the Agreement, neither the execution and delivery of
this Agreement by SRT nor the consummation or performance this Agreement by SRT
will give any Person the right to prevent, delay, or otherwise interfere with
any of the Contemplated Transactions pursuant to:
(i) any provision of SRT's Organizational Documents;
(ii) any resolution adopted by the board of directors or the
stockholders of SRT;
(iii) any material Legal Requirement or Order to which SRT may be
subject; or
(iv) any material provision or term of any Contract to which SRT is
a party or by which SRT may be bound.
3. WAIVERS
(a) In connection with this Guaranty, SRT waives:
(i) the right to require Seller to proceed against Buyer or to
pursue any other remedy in Seller's power whatsoever;
(ii) all rights and benefits under any applicable law purporting to
reduce a guarantor's obligations in proportion to the obligation of the
principal or providing that the obligation of a surety or guarantor must neither
be larger nor in other respects more burdensome than that of the principal;
(iii) the benefit of any statute of limitations affecting SRT's
liability hereunder;
(iv) any requirement of marshalling or any other principle of
election of remedies and all rights and defenses arising out of an election of
remedies by Seller;
(v) any right to assert against Seller any defense (legal or
equitable), setoff, counterclaim and other right that SRT may now or any time
hereafter have against Buyer;
(vi) promptness, diligence, presentment, demand of payment, protest,
notice of dishonor or nonpayment of any such liabilities, suit or taking of
other action by Seller against, and any other notice to, SRT;
(vii) all defenses that at any time may be available to any
guarantor by virtue of any valuation, stay, moratorium or other law now or
hereafter in effect and ALL RIGHTS AND DEFENSES THAT ARE OR MAY BECOME AVAILABLE
TO SUCH GUARANTOR BY REASON OF APPLICABLE LAW.
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(b) SRT WAIVES ANY AND ALL RIGHTS OF SUBROGATION, INDEMNITY OR
REIMBURSEMENT, AND ANY AND ALL BENEFITS OF AND RIGHTS TO ENFORCE ANY POWER,
RIGHT OR REMEDY THAT SELLER MAY NOW OR HEREAFTER HAVE WITH RESPECT TO CLAIMS
AGAINST AND OBLIGATIONS TO BUYER, AND ANY AND ALL OTHER RIGHTS AND CLAIMS (AS
DEFINED IN TITLE 11 OF THE UNITED STATES CODE (THE "BANKRUPTCY CODE") ANY
GUARANTOR MAY HAVE AGAINST THE BUYER, UNDER ANY APPLICABLE LAW. SRT agrees that
it shall be bound by each and every ruling, order and judgment obtained by
Seller against Buyer in respect of its obligations under this Agreement, whether
or not SRT is a party to, or has received notice of, the action or proceeding in
which such ruling, order or judgment is issued and rendered.
Solely with respect to this Guaranty:
SR TECHNICS GROUP
By: /s/ Xxxx Xxxxxx Beyeler
----------------------------------------
Xxxx Xxxxxx Xxxxxxx
President and Chief Executive Officer
By:/s/ Georg Radon
-----------------------------------------
Georg Radon
Vice-President and Chief Financial Officer
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Schedule 1.2
"AAA" is defined in Section 12.14 ---
"Accounts Receivable" is defined in Section 3.6.
"Adjusted Monetary Value" means the product of the following formula:
AMV = MV x (1 / (1- HP)).
For the purposes of the above formula, the following terms will have
the following meanings:
"AMV" means Adjusted Monetary Value.
"MV" means the monetary value of the Adverse Consequences.
"HP" means the percentage of the issued and outstanding shares of
common stock of the Seller owned by the Buyer as of the date Buyer
receives payment for indemnification under Article 10 or 11.
"Adjustment Amount" is defined in Section 2.5(e).
"Adverse Consequence" means any Liability, loss, damage, claim, cost,
deficiency, diminution of value, or expense (including costs of investigation
and defense, penalties, and reasonable legal fees and costs), whether or not
involving a third-party claim.
"Agreement" means this Member Interest Purchase Agreement.
"Amended and Restated Operating Agreement" means the Amended and Restated
Operating Agreement of the Company in the form of Exhibit A.
"Assignment and Assumption Agreement" means the agreement entered into by
and between Buyer and Seller at the Closing under which Seller assigns and Buyer
assumes all of Buyer's rights and obligations under the Loans.
"Buyer" is defined in the first paragraph of this Agreement.
"Buyer Indemnitees" is defined in Section 10.2.
"Buyer's Advisors" is defined in Section 5.1.
"Buyer's Notice" is defined in Section 11.5.
"Chromalloy" means Chromalloy Gas Turbine Corporation, a Delaware
corporation.
"Closing" means the consummation and completion of the purchase and sale
of the Interests.
"Closing Balance Sheet" is defined in Section 2.5(b).
"Closing Date" means the date on which the Closing actually takes place.
"Closing Net Book Value" is defined in Section 2.5(b).
"Code" means the United States Internal Revenue Code of 1986.
"Company" is defined in the Preliminary Statement.
"Company Contract" means any Contract (a) under which the Company has
rights, (b) under which the Company is subject to Liability, or (c) by which the
Company or any of its assets is bound.
"Company Lease" means the Lease and the Addendum to the Lease, both dated
January 1, 1999 for 0000 Xxxxxxxxxxxx Xxx, Xxx Xxxxx, Xxxxxxxxxx, by and between
Miramar Investments, Ltd. as lessor, and the Company, as lessee.
"Company Other Benefit Obligation" means an Other Benefit Obligation owed,
adopted, or followed by the Company or an ERISA Affiliate of the Company.
"Company Plan" means all Plans of which the Company or an ERISA Affiliate
is or was a Plan Sponsor, or to which the Company or an ERISA Affiliate
otherwise contributes or has contributed, or in which the Company or an ERISA
Affiliate otherwise participates or has participated.
"Company's Audited Balance Sheet" is defined in Section 3.4.
"Consent" means any approval, consent, ratification, waiver, or other
authorization.
"Contemplated Transactions" means all of the transactions to be carried
out in accordance with this Agreement, including the purchase and sale of the
Interests, the performance by the parties of their other obligations under this
Agreement, and the execution, delivery, and performance of the Transaction
Documents.
"Contemporaneous Transaction(s)" means (a) Buyer's acquisition of all
issued and outstanding stock of WASI, (b) Buyer's sale-leaseback of 5 aircraft
engines with a value of approximately U.S.$42,686,000, and (c) the investment by
FlightTechnics, LLC, an affiliate of Flightlease, of approximately
U.S.$19,500,000 through the purchase of 1,300,000 newly issued shares of
Seller's common stock, par value U.S.$0.01 at the price of U.S.$15.00 per share.
"Contract" means any contract, agreement, commitment, understanding,
lease, license, franchise, warranty, guaranty, mortgage, note, bond, or other
instrument or consensual obligation (whether written or oral ) that is legally
binding.
"Contravene" -- an act or omission would "Contravene" something if, as the
context requires:
(c) the act or omission would conflict with it, violate it, result in a
breach or violation of or failure to comply with it, or constitute a default
under it;
(d) the act or omission would give any Governmental Body or other Person
the right to challenge, revoke, withdraw, suspend, cancel, terminate, or modify
it, to exercise any remedy or obtain any relief under it, or to declare a
default or accelerate the maturity of any obligation under it; or
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(e) the act or omission would result in the creation of an Encumbrance on
the stock or assets of the Company.
"Copyrights" is defined in Section 3.13(a)(iii).
"Disclosure Schedule" means the disclosure schedule delivered by Seller to
Buyer concurrently with the execution and delivery of this Agreement.
"Encumbrance" means any charge, claim, mortgage, servitude, easement,
right of way, community or other marital property interest, covenant, equitable
interest, lease or other possessory interest, lien, option, pledge, security
interest, preference, priority, right of first refusal, or similar restriction.
"Environment" means soil, land surface or subsurface strata, surface
waters (including navigable water and ocean waters), groundwaters, drinking
water supply, stream sediments, ambient air (including indoor air), plant and
animal life, and any other similar medium or natural resource.
"Environmental, Health, and Safety Liabilities" means any cost, damages,
expense, Liability, or other responsibility arising from or under Environmental
Law or Occupational Safety and Health Law, including those consisting of or
relating to:
(a) any environmental, health, or safety matter or condition (including
on-site or off-site contamination, occupational safety and health, and
regulation of any chemical substance or product);
(b) any fine, penalty, judgment, award, settlement, Proceeding, damages,
loss, claim, demand and response, investigative, monitoring, remedial, or
inspection cost or expense arising under Environmental Law or Occupational
Safety and Health Law;
(c) financial responsibility under any Environmental Law or Occupational
Safety and Health Law for Cleanup costs or corrective action required or
requested by any Governmental Body and for any natural resource damage; or
(d) any other compliance, corrective, or remedial measures required under
any Environmental Law or Occupational Safety and Health Law.
"Environmental Law" means all laws (including common law), ordinances,
rules, regulations, orders, judgments, or decrees of the United States, any
applicable state, county, city or other political subdivision, agency or
municipality thereof governing or regulating the environment, or regulating,
relating to or imposing liability (including strict liability) with respect to
standards or conduct concerning any Hazardous Materials, including, without
limitation, the Resource Conservation and Recovery Act of 1976 (42 U.S.C. ss.
6901, et seq.) ("RCRA"), as amended from time to time, the Comprehensive
Environmental Response Compensation and Liability Act of 1980 (42 U.S.C. ss.
9601 et seq.) ("CERCLA"), as amended from time to time, the Toxic Substance
Control Act, the Clean Water Act, the Clean Air Act, and the regulations
promulgated thereunder.
"Environmental Permits" means any and all Governmental Authorizations
issued pursuant to any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974.
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"ERISA Affiliate" means any other Person that, together with the Company,
would be treated as a single employer under Code Section 414.
"Facility" means any Real Property or tangible personal property interest
owned or operated by the Company, including the Real Property and tangible
personal property used or operated by the Company at the respective locations of
the Real Property listed in Part 3.11(a). For purposes of Section 3.20 and the
definition of "Hazardous Activity," the term also includes any Real Property or
tangible personal property interest formerly owned or operated by the Company or
any predecessor Person.
"Financial Statements" is defined in Section 3.4.
"Flightlease" means Flightlease AG, a company organized under the laws of
Switzerland and an SAirGroup Affiliate.
"GAAP" means generally accepted accounting principles for financial
reporting in the United States.
"Governmental Authorization" means any Consent, license, permit or
registration issued, granted, given or otherwise made available by or under the
authority of any Governmental Body or pursuant to any Legal Requirement.
"Governmental Body" means any:
(a) nation, region, state, county, city, town, village, district, or other
jurisdiction;
(b) federal, state, local, municipal, foreign or other government;
(c) governmental or quasi-governmental authority of any nature (including
any governmental agency, branch, department, or other entity and any court or
other tribunal);
(d) multinational organization;
(e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, policy, regulatory, or taxing authority or
power of any nature; and
(f) official of any of the foregoing.
"Hazardous Materials" means any waste or other substance that is listed,
defined, designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution thereof, and specifically
including petroleum and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos-containing materials.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
"Improvements" means all buildings, structures, fixtures and other
improvements located on the Real Property.
"Indemnified Person" is defined in Section 10.7(a).
"Indemnifying Person" is defined in Section 10.7(a).
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"Initial Net Book Value" is defined in Section 2.5(a).
"Initial Purchase Price" is defined in Section 2.2.
"Intellectual Property" is defined in Section 3.13.
"Interim Unaudited Company Balance Sheet" is defined in Section 3.4.
"Interests" is defined in the Preliminary Statement.
"Inventory" means inventories of raw materials and purchased parts,
work-in-process, finished goods and supplies, wherever located.
"IRS" means the United States Internal Revenue Service or any successor
agency and, to the extent relevant, the United States Department of Treasury.
"Knowledge" (i) an individual will be considered to have "Knowledge" of a
fact or matter if the individual is actually aware of the fact or matter or a
prudent individual could be expected to discover or otherwise become aware of
the fact or matter in the course of such individual's duties as an officer or
director of an entity to which such fact or matter relates and (ii) an entity
will be considered to have "Knowledge" of a fact or matter if any individual who
is serving, as a director, manager or senior executive, officer, partner,
executor, or trustee of that entity (or in similar capacity) has Knowledge of
the fact or matter.
"Legal Requirement" means any constitution, law, statute, treaty, rule,
regulation, ordinance, binding case law or principle of common law, notice,
approval or Order of any Governmental Body, and any Contract with any
Governmental Body relating to compliance with any of the foregoing.
"Liabilities" includes liabilities or obligations of any nature, whether
known or unknown, whether absolute, accrued, contingent, xxxxxx, inchoate, or
otherwise, whether due or to become due, and whether or not required to be
reflected on a balance sheet prepared in accordance with GAAP.
"Loans" mean the loans evidenced by (i) a note dated August 29, 2000
executed by the Company pursuant to which it received the following day a loan
in the amount of US$1,000,000, at 9.5% per annum from Seller and (ii) a note
dated September 21, 2000 executed by the Company pursuant to which it received
the following day a loan in the amount of US$500,000 at 9.5% per annum from
Seller.
"Marks" is defined in Section 3.13(a).
"Material Adverse Effect" -- something would be considered to have a
"Material Adverse Effect" on the Company if it is an event or occurrence that
materially adversely affects the financial condition, operations, results of
operations, assets or properties (considered in the aggregate) of the Company;
provided that none of the following shall be deemed, either alone or in
combination, to constitute a Material Adverse Effect: (i) general industry or
economic conditions affecting the U.S., Swiss, European Union or world economy
as a whole, (ii) conditions affecting the commercial airline, the aircraft or
aircraft engines manufacturing, the aircraft or aircraft engine parts or repair
industry, so long as such conditions do not affect the Company in a
disproportionate manner, or (iii) any disruption of customer, supplier or
employee relationships resulting from the announcement of this
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Agreement or the other Transaction Documents or the consummation of the
transactions contemplated hereby or thereby. "Multiemployer Plan" has the
meaning specified in ERISA Section 3(37)(A).
"Net Book Value" is defined in Section 2.5(a).
"Net Names" is defined in Section 3.13(a)(v).
"Neutral Auditors" is defined in Section 2.5(d).
"Neutral Auditors' Notice" is defined in Section 2.5(d).
"Notice of Dispute" is defined in Section 2.5(c).
"Occupational Safety and Health Law" means any Legal Requirement designed
to provide safe and healthful working conditions and to reduce occupational
safety and health hazards designed to provide safe and healthful working
conditions.
"Operating Agreement" means the Operating Agreement between Seller and
Chromalloy, dated as of May 28, 1999.
"Order" means any order, injunction, judgment, decree, ruling, assessment
or arbitration award of any Governmental Body or arbitrator.
"Ordinary Course of Business" refers to actions taken in the Company's
normal operation, consistent with its past practice, and, as applied to
Contracts of the Company, shall include materials repair contracts and materials
purchase agreements.
"Organizational Document" means any charter, articles, bylaws,
certificate, statement, statutes, or similar document adopted, filed or
registered in connection with the creation, formation, or organization of an
entity, and any Contract among all equityholders, partners or members of an
entity.
"Other Benefit Obligation" means any obligation, arrangement, or customary
practice of an entity, whether or not legally enforceable, to provide benefits,
other than salary, as compensation for services rendered, to present or former
directors, employees, or agents, other than obligations, arrangements, and
practices that are Plans. Other Benefit Obligations include consulting
agreements under which the compensation paid does not depend upon the amount of
service rendered, sabbatical policies, severance payment policies, and fringe
benefits within the meaning of Code Section 132.
"Part" means a part of the Disclosure Schedule.
"Patents" is defined in Section 3.13(a)(ii).
"Person" refers to an individual or an entity, including a corporation,
share company, limited liability company, partnership, trust, association,
Governmental Body or any other body with legal personality separate from its
equityholders or members.
"Plan" has the meaning specified in ERISA Section 3(3).
"Plan Sponsor" has the meaning specified in ERISA Section 3(16)(B).
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"Pre-Closing Period" means the taxable period (including all prior taxable
years or periods) ending on and including the Closing Date, including that
portion of any Straddle Period ending on the Closing Date.
"Principal and Interest Payment" means an amount of cash equal to the
principal balance and accrued interest outstanding under the Loans as of the
Closing Date.
"Proceeding" means any action, arbitration, audit, examination,
investigation, hearing, litigation, or suit (whether civil, criminal,
administrative, judicial or investigative, whether formal or informal, and
whether public or private) commenced, brought, conducted, or heard by or before,
or otherwise involving, any Governmental Body or arbitrator.
"Purchase Price" is defined in Section 2.2.
"Qualified Plan" means any Company Plan that meets or purports to meet the
requirements of Code Section 401(a).
"Real Property" means all real property of the Company, including all
parcels and tracts of land in which the Company has a fee simple estate or a
leasehold estate, and all Improvements, easements and appurtenances thereto.
"Related Person" means, with respect to a particular Person, any other
Person directly or indirectly controlling, controlled by or under common control
with, such Person and, with respect to an individual, any other individual that
is a member of the individual's family (by blood, marriage or adoption), a
member of the individual's household, an entity in which the individual
participates in management, or an employee or employer of the individual. For
purposes of this definition, "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of an entity, whether through the ownership of voting securities or
otherwise, and will be construed in accordance with the rules promulgated under
the Securities Act.
"Release" means any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other releasing into the Environment, whether
intentional or unintentional.
"Representative" means, with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, legal counsel, accountant, or
other representative of that Person.
"Resolution Period" is defined in Section 2.5(c).
"Revolving Credit Facility" means the Amended and Restated Credit
Agreement dated as of February 10, 2000 by and among, Seller, WASI and certain
banking institutions named therein with First Union National Bank as Co-Arranger
and Administrative Agent, Banc of America Securities LLC as Co-Arranger and
Syndication Agent and Bank of America as Appraisal Agent.
"SAirGroup Affiliate" has the meaning ascribed to it in the Stockholders'
Agreement.
"Securities Act" means the Securities Act of 1933.
"Seller" is defined in the first paragraph of this Agreement.
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"Seller Indemnitees" is defined in Section 10.3.
"SRT" is defined in Section 2.4(b).
"Stockholders' Agreement" means the Stockholders' Agreement by and among
Seller, Xxxxxxx X. Xxxxxx, XX, CFW Partners, L.P., the Xxxxxx Xxxxxxxx Xxxxxx
1995 Irrevocable Trust and FlightTechnics, LLC, dated as of the Closing Date.
"Straddle Period" means any taxable year or period beginning on or before
the Closing Date and ending after the Closing Date.
"Tax" or "Taxes" means all federal, state, local, foreign and other taxes,
charges, fees, duties (including customs duties), levies or other assessments,
including income, gross receipts, net proceeds, alternative or add-on minimum,
ad valorem, turnover, real and personal property (tangible and intangible),
sales, use, franchise, excise, value added, stamp, leasing, lease, user,
transfer, fuel, excess profits, occupational, interest equalization, windfall
profits, severance, license, payroll, environmental, capital stock, disability,
employee's income withholding, other withholding, unemployment and social
security taxes, that are imposed by any Governmental Body, and including any
interest, penalties or additions to tax attributable thereto.
"Tax Claim" is defined in Section 11.5.
"Tax Return" means any report, return or other information required to be
supplied to a Governmental Body by the Company in connection with any Taxes.
"Threatened" -- an action or matter would be considered to have been
"Threatened" if a demand or statement has been made (whether orally or in
writing) or a notice has been given (whether orally or in writing), or any other
event has occurred or any other circumstances exist, that would lead a prudent
Person to conclude that such action or matter is likely to be asserted,
commenced, taken or otherwise pursued in the future.
"Trade Secrets" is defined in Section 3.13(a)(iv).
"Transaction Documents" mean those documents related to the Contemplated
Transactions, including the Investment Agreement among Seller, Flightlease,
FlightTechnics, LLC, Buyer and SRT, dated as of the Closing Date; the Share
Purchase Agreement by and among Buyer, SRT and Seller regarding WASI, dated as
of the Closing Date; and the Stockholders' Agreement.
"VEBA" means a voluntary employees' beneficiary association under Code
Section 501(c)(9).
"WASI" means Xxxxxx Aeronautical Services, Inc., a California corporation
and a wholly-owned subsidiary of Seller.
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