EXHIBIT 2.3
[EXECUTION COPY]
STOCK PURCHASE AGREEMENT
dated as of
August 10, 1998
among
XXXXX X. XXXXXXXXX
XXXXXX X. XXXXX
(the "Stockholders")
AIRNET SYSTEMS, INC.
("AirNet")
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TABLE OF CONTENTS
Page
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ARTICLE I
PURCHASE AND SALE
SECTION 1.01. Purchase and Sale ..............................................1
1.02. Escrow Shares...................................................1
1.03. Closing.........................................................2
1.04. Post-Closing Adjustment.........................................3
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS
SECTION 2.01. Corporate Existence and Power...................................4
2.02. Organizational Documents........................................5
2.03. Governmental Authorization......................................5
2.04. Non-Contravention...............................................5
2.05. Capitalization..................................................5
2.06. Subsidiaries....................................................6
2.07. Financial Statements............................................6
2.08. Investment......................................................6
2.09. Absence of Certain Changes......................................7
2.10. No Undisclosed Liabilities......................................9
2.11. Litigation......................................................9
2.12. Taxes ..........................................................9
2.13. ERISA .........................................................10
2.14. Trademarks, Patents and Copyrights.............................12
2.15. Material Contracts.............................................13
2.16. Compliance with Laws...........................................14
2.17. Finders' Fees..................................................14
2.18. Other Information..............................................14
2.19. Environmental Compliance.......................................14
2.20. Intercompany Arrangements......................................15
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF AIRNET
SECTION 3.01. Corporate Existence and Power..................................16
3.02. Organizational Documents.......................................16
3.03. Corporate Authorization........................................16
3.04. Governmental Authorization.....................................16
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SECTION 3.05. Non-Contravention..............................................16
3.06. Capitalization.................................................17
3.07. SEC Filings; AirNet Disclosure Documents; Financial
Statements.....................................................17
3.08. Finders' Fees..................................................18
ARTICLE IV
COVENANTS OF THE STOCKHOLDERS
SECTION 4.01. Conduct of the Business of the Company.........................18
4.02. Access to Information; Confidentiality.........................20
4.03. Other Offers...................................................20
4.04. Notices of Certain Events......................................21
4.05. Stockholder Actions............................................21
ARTICLE V
COVENANTS OF AIRNET
SECTION 5.01. Access to Information; Confidentiality.........................22
5.02. Notices of Certain Events......................................22
5.03. Director and Officer Indemnification...........................23
5.04. Rule 144.......................................................23
ARTICLE VI
COVENANTS OF AIRNET,
THE COMPANY AND THE STOCKHOLDERS
SECTION 6.01. Reasonable Efforts.............................................23
6.02. Certain Filings................................................23
6.03. Public Announcements...........................................24
6.04. Tax Matters....................................................24
6.05. Tax Treatment..................................................25
6.06. Employee Benefits..............................................25
ARTICLE VII
CONDITIONS
SECTION 7.01. Conditions to the Obligations of Each Party....................26
7.02. Conditions to the Obligations of AirNet........................26
7.03. Conditions to the Obligations of the Stockholders..............27
ARTICLE VIII
TERMINATION
SECTION 8.01. Termination ...................................................29
8.02. Effect of Termination..........................................29
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ARTICLE IX
SURVIVAL; INDEMNIFICATION
SECTION 9.01. Survival ......................................................30
9.02. Indemnification................................................30
9.03. Procedures.....................................................31
9.04. Exclusive Remedy...............................................31
9.05. Certain Limitations............................................31
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices ......................................................32
10.02. Amendments; No Waivers........................................33
10.03. Expenses; Taxes...............................................33
10.04. Headings; Definition..........................................34
10.05. Severability..................................................34
10.06. Entire Agreement..............................................34
10.07. Successors and Assigns........................................34
10.08. Governing Law.................................................34
10.09. Consent to Jurisdiction.......................................34
10.10. Counterparts; Effectiveness...................................35
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INDEX OF DEFINED TERMS
Page
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401(k) Plan Participants......................................................23
A
Accounting Referee.............................................................4
Affiliate......................................................................5
AirNet.........................................................................1
AirNet 401(k) Plan............................................................23
AirNet Common Shares...........................................................1
AirNet Disclosure Documents...................................................16
AirNet Indemnitee.............................................................27
AirNet Material Adverse Effect................................................14
AirNet Preferred Shares.......................................................15
AirNet Representatives........................................................18
AirNet Securities.............................................................15
B
Balance Sheet..................................................................5
Balance Sheet Date.............................................................5
Benefit Arrangements..........................................................10
C
Cash Portion...................................................................1
CERCLA........................................................................13
Closing Balance Sheet..........................................................3
Closing Date...................................................................2
Common Stock...................................................................1
Company........................................................................1
Company 401(k) Plan...........................................................23
Company Acquisition Proposal..................................................18
Company Material Adverse Effect................................................4
Company Representatives.......................................................20
Company Securities.............................................................5
Xxxxx..........................................................................1
E
Employee Plans.................................................................9
ERISA..........................................................................9
ERISA Affiliate................................................................9
Escrow Account.................................................................1
Escrow Agent...................................................................1
iv
Escrow Shares..................................................................1
Exchange Act..................................................................16
H
Hazardous Substance...........................................................13
I
Indemnified Party.............................................................28
Indemnifying Party............................................................28
Intellectual Property Rights..................................................11
L
Loss..........................................................................27
M
Multiemployer Plan.............................................................9
N
Net Worth......................................................................3
Net Worth Deficiency...........................................................3
P
PBGC...........................................................................9
Pension Plans..................................................................9
Purchase Price.................................................................1
R
Release.......................................................................13
Retirement Plans...............................................................9
S
Salisbury......................................................................1
Securities Act.................................................................5
Share Portion..................................................................1
Shares.........................................................................1
Stockholders...................................................................1
Straddle Periods..............................................................22
Subsidiary.................................................................5, 15
T
Tax Returns....................................................................8
Taxes..........................................................................8
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT dated as of August 10, 1998, among XXXXX X.
XXXXXXXXX ("Xxxxxxxxx") and XXXXXX X. XXXXX ("Xxxxx" and, together with
Salisbury, the "Stockholders"), and AIRNET SYSTEMS, INC., an Ohio corporation
("AirNet").
WHEREAS, the Stockholders are the owners of 600 shares (the "Shares") of
common stock, $1.00 par value (the "Common Stock"), of Mercury Business
Services, Inc., a Massachusetts corporation (the "Company"), constituting 100%
of the issued and outstanding capital stock of the Company;
WHEREAS, AirNet desires to purchase the Shares from the Stockholders, and
the Stockholders desire to sell the Shares to AirNet, upon the terms and subject
to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
SECTION 1.01. Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, the Stockholders agree to sell to AirNet, and
AirNet agrees to purchase from the Stockholders, the Shares at the Closing. The
aggregate purchase price for the Shares (as adjusted pursuant hereto, the
"Purchase Price") is (i) $2,000,000 (the "Cash Portion") and (ii) 117,647 common
shares, $.01 par value (the "AirNet Common Shares"), of AirNet (the "Share
Portion"). The allocation of the Purchase Price between the Stockholders shall
be determined according to the percentages set forth on Annex A attached hereto.
The Purchase Price, less the Escrow Shares, shall be delivered to the
Stockholders at the Closing upon delivery of the corresponding certificates
previously evidencing shares of capital stock of the Company.
SECTION 1.02. Escrow Shares. (a) Approximately ten percent (10%) of the
Purchase Price, in the form of 25,499 AirNet Common Shares, shall be set aside
to indemnify AirNet with respect to breaches of the Stockholder's
representations, warranties and covenants contained herein (the "Escrow
Shares"). The Escrow Shares shall be registered in the names of the Stockholders
and deposited in escrow pursuant to Section 1.02(b) hereof.
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(b) The parties agree that the Escrow Shares shall be deposited in an
account (the "Escrow Account") with Banc One Trust Company, NA, as escrow agent
(the "Escrow Agent"), to be held and administered in accordance with the terms
and conditions of an Escrow Agreement substantially in the form attached hereto
as Exhibit 1.02, against which Escrow Account AirNet shall be entitled to
recover any Losses which may be suffered by AirNet for which AirNet is entitled
to indemnity pursuant to Section 9.02.
SECTION 1.03. Closing. (a) Subject to the satisfaction or, to the extent
permitted hereunder, waiver of the conditions set forth in Article VII, the
consummation of the transactions contemplated hereby will take place on August
11, 1998 (the "Closing Date"), at the offices of Vorys, Xxxxx, Xxxxxxx and Xxxxx
LLP, 00 Xxxx Xxx Xxxxxx, Xxxxxxxx, Xxxx, unless another date or place is agreed
to in writing by the Stockholders and AirNet.
(b) At the Closing, the Stockholders shall deliver to AirNet the following
documents and instruments, each in form and substance reasonably satisfactory to
AirNet and its counsel and each dated the Closing Date:
(i) certificates representing 100% of the Shares duly endorsed or
accompanied by stock powers duly endorsed in blank, with any
required transfer stamps affixed thereto;
(ii) Employment Agreements, substantially in the form attached hereto as
Exhibit B-1 and B-2, duly executed by each of the Stockholders; and
(iii) such other documents, instruments and certificates as AirNet or its
counsel may reasonably request.
(c) At the Closing, or, in case of clauses (iii) and (iv) below, as soon
thereafter as reasonably practicable, AirNet shall deliver to the Stockholders:
(i) $1,750,000 in immediately available funds by wire transfer to the
account of Salisbury at a bank in Boston, Massachusetts, the account
number of which Salisbury shall provide by notice to AirNet no later
than two business days prior to the Closing Date;
(ii) $250,000 in immediately available funds by wire transfer to the
account of Xxxxx at a bank in Boston Massachusetts, the account
number of which Xxxxx
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shall provide by notice to AirNet no later than two business days
prior to the Closing Date;
(iii) a certificate for 80,629 AirNet Common Shares, registered in the
name of Salisbury;
(iv) a certificate for 11,519 AirNet Common Shares registered in the name
of Xxxxx; and
(v) Employment Agreements, substantially in the form attached hereto as
Exhibit B-1 and B-2, duly executed by AirNet.
(c) At the Closing, or as soon thereafter as reaonably practicable, AirNet
shall deliver to the Escrow Agent:
(i) a certificate for 22,312 Escrow Shares registered in the name of
Salisbury; and
(ii) a certificate for 3,187 Escrow Shares registered in the name of
Xxxxx.
SECTION 1.04. Post-Closing Adjustment. (a) In the event that the net worth
of the Company (defined as total assets minus total liabilities, excluding (i)
any liabilities relating to Massachusetts income Taxes imposed on the Company
for the period commencing on January 1, 1998 and ending on the Closing Date,
(ii) the effect of the distribution for 1998 federal and state income Taxes
payable by the Stockholders as detailed in Section 6.04 and (iii) a bonus of
$25,000 payable to Xxxxx by the Company) as of the Closing Date, as reflected on
the Closing Balance Sheet and finally determined pursuant to this Section 1.04
("Net Worth"), is less than $630,000 (the amount of such deficiency being
referred to herein as the "Net Worth Deficiency"), the Purchase Price shall be
reduced on a dollar for dollar basis, and the Stockholders shall be required to
immediately deliver to AirNet an amount in cash and AirNet Common Shares equal
to such Net Worth Deficiency. Such Net Worth Deficiency shall be allocated
between the Stockholders in the same percentage as the allocation of the
Purchase Price set forth on Annex A and shall be paid by each Stockholder in the
same proportion of cash and AirNet Common Shares as the Cash Portion and the
Share Portion comprise the Purchase Price, with the Share Portion thereof being
valued based upon a stock price of $17.00 per AirNet Common Share.
(b) As promptly as practicable, but not later than 30 days, after the
Closing Date unless otherwise agreed by the parties, AirNet will prepare an
unaudited balance sheet of the assets and liabilities of the Company as of the
Closing Date (the "Closing Balance Sheet") and shall deliver the Closing Balance
Sheet to the Stockholders. The
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Closing Balance Sheet shall fairly present in all material respects the
financial position of the Company as of the close of business on the Closing
Date in accordance with generally accepted accounting principles applied on a
consistent basis with the Balance Sheet and shall set forth AirNet's calculation
of the Company's Net Worth as of the Closing Date.
(c) In the event that the Stockholders disagree with the calculation of
Net Worth on the Closing Balance Sheet, the Stockholders may, within ten
business days after delivery of the Closing Balance Sheet, deliver a written
notice to AirNet disagreeing with such calculation and setting forth the
Stockholders calculation of the items and/or amounts set forth on the Closing
Balance Sheet. Any such notice of disagreement shall specify those items or
amounts as to which the Stockholders disagree, and the Stockholders shall be
deemed to have agreed with all other items and amounts contained in the Closing
Balance Sheet. During the ten business days following timely delivery of any
notice of disagreement, the parties shall use their best efforts to reach
agreement on the disputed items or amounts. If during such period the parties
are unable to reach agreement, they shall promptly thereafter cause a nationally
recognized accounting firm mutually selected by AirNet and the Stockholders (the
"Accounting Referee") to determine the disputed items or amounts (and only such
items or amounts). The Accounting Referee shall deliver to the parties, as
promptly as practicable, a report setting forth its calculation of the disputed
items or amounts and a calculation of Net Worth based thereon and on the
undisputed items and amounts. Such report and calculation of Net Worth shall be
final and binding upon the parties hereto. The cost of such review and report
shall be borne equally between the Stockholders, on the one hand, and AirNet, on
the other.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS
Each Stockholder, severally and not jointly, represents and warrants to
AirNet that:
SECTION 2.01. Corporate Existence and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of The
Commonwealth of Massachusetts, and has all requisite corporate powers and all
governmental licenses, authorizations, consents and approvals required to own,
lease and operate its properties and to carry on its business as now conducted
by the Company. The Company is duly qualified or licensed to do business as a
foreign corporation, and is in good standing, in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification or licensing necessary, except where such failure would
not reasonably be expected to
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have a material adverse effect on the business, assets, results of operations or
condition (financial or otherwise) of the Company (a "Company Material Adverse
Effect").
SECTION 2.02. Organizational Documents. The Company has heretofore
delivered to AirNet true and complete copies of the Articles of Organization and
Bylaws of the Company, in each case as currently in effect. The Company is not
in violation of any provision of its Articles of Organization or Bylaws.
SECTION 2.03. Governmental Authorization. The execution, delivery and
performance by the Stockholders of this Agreement and the consummation of the
transactions contemplated by the Agreement by the Stockholders requires no
consent, approval, authorization or permit of, or filing with or notification to
any governmental or regulatory authority.
SECTION 2.04. Non-Contravention. The execution, delivery and performance
by the Stockholders of this Agreement and the consummation by the Stockholders
of the transactions contemplated hereby do not and will not (i) contravene or
conflict with the Articles of Organization or By-laws of the Company; (ii)
contravene or conflict with or constitute a violation of any provision of any
law, rule, regulation, judgment, injunction, order or decree binding upon or
applicable to the Company or any Stockholder; (iii) constitute a default under
or give rise to a right of termination, cancellation or acceleration of any
right or obligation of the Company or to a loss of any benefit to which the
Company is entitled under any provision of any agreement, contract or other
instrument binding upon the Company or any license, franchise, permit or other
similar authorization held by the Company; or (iv) result in the creation or
imposition of any Lien on any asset of the Company.
SECTION 2.05. Capitalization. The authorized capital stock of the Company
consists of 10,000 shares of common stock, $1.00 par value. As of the date
hereof there are, and as of the Closing Date there will be, 600 shares of common
stock outstanding and 400 shares of common stock held in treasury. All
outstanding shares of capital stock of the Company have been, and at the Closing
Date will be, duly authorized and validly issued and are, and at the Closing
Date will be, fully paid and nonassessable. Except as set forth in this Section,
there are, and at the Closing Date will be, outstanding: (i) no shares of
capital stock or other voting securities of the Company, (ii) no securities of
the Company convertible into or exchangeable for shares of capital stock or
voting securities of the Company, and (iii) no options or other rights to
acquire from the Company, and no obligation of the Company to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of the Company (the items in clauses (i),
(ii) and (iii) being referred to collectively as the "Company Securities").
There are, and at the Closing Date will be, no outstanding obligations of the
Company, to repurchase, redeem or otherwise acquire any Company Securities or
make any material investment in any other Person.
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SECTION 2.06. Subsidiaries. The Company has no Subsidiaries and does not
own any capital stock of, any partnership or other ownership interest in, or any
other security issued by, any other corporation, organization, association or
entity. "Subsidiary" means, with respect to the Company, any corporation or
other entity of which securities or other ownership interests to elect a
majority of the board of directors or other other persons performing similar
functions are directly or indirectly owned by the Company. Except as set forth
in Schedule 2.06, the Company has, and at the Closing Date will have, no
Affiliates (other than any executive officer, director or stockholder of the
Company). For purposes of this Agreement, "Affiliate" shall have the meaning set
forth in Rule 405 of Regulation C under the Securities Act of 1933, as amended
(the "Securities Act").
SECTION 2.07. Financial Statements. The unaudited financial statements of
the Company as of December 31, 1997 and 1996 and for the two fiscal years ended
December 31, 1997, and the unaudited financial statements of the Company as of
May 31, 1998 and for the five months ended May 31, 1998 and 1997, which have
previously been provided to AirNet fairly present in all material respects, in
conformity with generally accepted accounting principles applied on a consistent
basis (except as may be indicated in the notes thereto), the financial position
of the Company as of the dates thereof and its results of operations and cash
flows for the periods then ended (subject to normal and recurring year-end
adjustments in the case of any unaudited interim financial statements which were
not, and are not expected, individually or in the aggregate, to be, material in
amount). For purposes of this Agreement, "Balance Sheet" means the balance sheet
of the Company as of December 31, 1997 and "Balance Sheet Date" means December
31, 1997.
2.08. Investment. (a) Each Stockholder is an "accredited investor" as such
term is defined in Section 501 of Regulation D under the Securities Act.
(b) Each Stockholder acknowledges that he has received copies of the
AirNet Disclosure Documents (as defined herein) and a brief description of the
AirNet Common Shares.
(c) Each Stockholder acknowledges that he has had ample opportunity to ask
questions of, and receive answers from, authorized officers of AirNet concerning
the AirNet Common Shares and AirNet.
(d) Neither Stockholder was offered any AirNet Common Shares pursuant to a
general solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D under the Securities Act.
(e) Each Stockholder acknowledges that he will obtain any AirNet Common
Shares to which he may be entitled for investment purposes only, that he will
not xxxx
0
such AirNet Common Shares with a view to a distribution thereof and that he has
no present intention to distribute or resell such AirNet Common Shares.
(f) Each Stockholder acknowledges that he has no need for liquidity in the
AirNet Common Shares which he shall receive in connection with the transactions
contemplated hereby and understands that there are restrictions on the
subsequent resale or other transfer of such AirNet Common Shares.
(g) Each Stockholder acknowledges that certificates evidencing any of the
AirNet Common Shares delivered pursuant to this Agreement shall, until such time
as the same is no longer required under applicable requirements of the
Securities Act, and the rules and regulations thereunder, contain a legend,
substantially in the form set forth below, restricting transfer under the
Securities Act (in addition to any legend required under applicable state
securities laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH
THE TERMS THEREOF AND UNLESS REGISTERED WITH THE SECURITIES EXCHANGE
COMMISSION OF THE UNITED STATES AND THE SECURITIES REGULATORY
AUTHORITIES OF CERTAIN STATES OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE."
SECTION 2.09. Absence of Certain Changes. Since the Balance Sheet Date and
except as disclosed on Schedule 2.09 attached hereto, the Company has conducted
its business only in the ordinary course consistent with past practice and there
has not been:
(a) to the Knowledge of the Stockholders, any event or occurrence
which has had or reasonably could be expected to have a Company Material
Adverse Effect;
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of any of
the Company, or any repurchase, redemption or other acquisition by the
Company of the Company of any outstanding shares of capital stock or other
securities of, or other ownership interests in, the Company;
(c) any amendment of any material term of any outstanding security
of the Company;
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(d) any incurrence, assumption or guarantee by the Company of any
indebtedness for borrowed money, other than in the ordinary course of
business in an aggregate amount not to exceed $10,000;
(e) any creation or assumption by the Company of any Lien on any
asset in excess of $10,000 other than in the ordinary course of business
consistent with past practices;
(f) any making of any loan, advance or capital contribution to or
investment in any Person other than loans, advances or capital
contributions to or investments in the Company made in the ordinary course
of business consistent with past practices;
(g) any transaction or commitment made, or any contract or agreement
entered into, by the Company relating to their respective assets or
business (including the acquisition or disposition of assets in excess of
$10,000) or any relinquishment by the Company of any contract or other
right, in either case, material to the Company, other than transactions
and commitments in the ordinary course of business consistent with past
practice and those contemplated by this Agreement;
(h) any change in any method of accounting or accounting practice by
the Company, except for any such change required by reason of a concurrent
change in generally accepted accounting principles;
(i) any (a) grant of any severance or termination pay to any
director, officer, employee or agent of the Company, (b) entering into of
any employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any director, officer,
employee or agent of the Company, (c) increase in benefits payable under
any existing severance or termination pay policies or employment
agreements or (d) increase in compensation, bonus or other benefits
payable to directors, officers, employees or agents of the Company, other
than in the ordinary course of business consistent with past practice or,
in the case of employment agreements, as contemplated by Section 7.02(d);
or
(j) any labor dispute, other than routine individual grievances, or
any activity or proceeding by a labor union or representative thereof to
organize any employees of the Company, which employees were not subject to
a collective bargaining agreement at the Balance Sheet Date, or any
lockouts, strikes, slowdowns, work stoppages or threats thereof by or with
respect to such employees.
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SECTION 2.10. No Undisclosed Liabilities. Except as and to the extent set
forth on Schedule 2.10 attached hereto, the Company has no liability or
obligation of any nature (whether accrued, contingent, absolute, determined,
determinable or otherwise) and, to the Knowledge of the Stockholders, there is
no existing condition, situation or set of circumstances which could reasonably
be expected to result in such a liability, other than:
(a) liabilities specifically disclosed or provided for in the
Balance Sheet; and
(b) liabilities incurred in the ordinary course of business
consistent with past practice since the Balance Sheet Date.
SECTION 2.11. Litigation. Except as set forth on Schedule 2.11 attached
hereto, there is no claim, action, suit, investigation or proceeding pending
against or, to the knowledge of the Stockholders, threatened against the Company
or any of its properties before any court or arbitrator or any governmental
body, agency or official which, individually or in the aggregate, would
reasonably be likely to result in an uninsured liability in excess of $10,000 or
impair the ability of the Company to consummate the transactions contemplated by
this Agreement, nor, to the Knowledge of the Stockholders, is there any basis
therefor.
SECTION 2.12. Taxes. The Company has timely filed all material returns,
statements, reports and forms (the "Tax Returns") with respect to all federal,
state, local and foreign income, gross income, gross receipts, gains, premium,
sales, use, ad valorem, transfer, franchise, profits, withholding, payroll,
employment, excise, severance, stamp, occupation, license, lease, environmental,
customs, duties, property, windfall profits and all other taxes (including any
interest, penalties or additions to tax with respect thereto, individually, a
"Tax" and, collectively, "Taxes") required to be filed with the appropriate tax
authority through the date hereof, and shall timely file all such material Tax
Returns required to be filed on or before the Closing Date. To the Knowledge of
the Stockholders, such Tax Returns are and will be true, correct and complete in
all material respects. The Company has paid and discharged all material Taxes
due from it, other than such Taxes that are adequately reserved as shown on the
Balance Sheet. Neither the Internal Revenue Service nor any other taxing agency
or authority, domestic or foreign, has asserted, is now asserting or, to the
Knowledge of the Stockholders, is threatening to assert against the Company
deficiency or claim for additional Taxes in excess of $10,000. There are no
unexpired waivers by the Company of any statute of limitations with respect to
Taxes. The accruals and reserves for Taxes reflected in the Balance Sheet are
adequate for the periods covered. The Company has withheld or collected and paid
over to the appropriate governmental authorities or is properly holding for such
payment all material Taxes required by law to be withheld or collected. There
are no Liens for Taxes upon the assets of the Company or any of its
Subsidiaries, other than Liens for current Taxes not yet due and payable.
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The Company is, and at all times since June 1, 1987 has been, an S corporation
and/or a qualified subchapter S subsidiary within the meaning of Section
1361(a)(1) of the Code (or the corresponding provisions of preceding law) and is
not subject to the tax imposed on certain built-in gains under Section 1374 of
the Code.
SECTION 2.13. ERISA. (a) Schedule 2.13(a) includes a list identifying each
"employee benefit plan," as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974 ("ERISA"), which (i) is subject to any provision of
ERISA and (ii) is maintained, administered or contributed to by the Company or
any ERISA Affiliate and covers any employee or former employee of the Company or
any of its ERISA Affiliates or under which the Company or any of its ERISA
Affiliates has any liability. Copies of such plans (and, if applicable, related
trust agreements) and all amendments thereto and written interpretations thereof
have been furnished to AirNet together with (x) the three most recent annual
reports (Form 5500 including, if applicable, Schedule B thereto) prepared in
connection with any such plan and (y) the most recent actuarial valuation report
prepared in connection with any such plan. Such plans are referred to
collectively herein as the "Employee Plans". For purposes of this Section,
"ERISA Affiliate" of any Person means any other Person which, together with such
Person, would be treated as a single employer under Section 414 of the Code. The
only Employee Plans which individually or collectively would constitute an
"employee pension benefit plan" as defined in Section 3(2) of ERISA (the
"Pension Plans") are identified as such in the list referred to above. The
Company has provided AirNet with complete age, salary, service and related data
as of December 31, 1997 for employees and former employees of the Company and
any ERISA Affiliate covered under the Pension Plans.
(b) Except as otherwise identified in Schedule 2.13(b), no Employee Plan
constitutes a "multiemployer plan", as defined in Section 3(37) of ERISA (a
"Multiemployer Plan"), and no Employee Plan is maintained in connection with any
trust described in Section 501(c)(9) of the Code. The only Employee Plans that
are subject to Title IV of ERISA (the "Retirement Plans") are identified in the
list of such Plans heretofore provided to AirNet by the Company. As of the
Balance Sheet Date, the fair market value of the assets of each Retirement Plan
(excluding for these purposes any accrued but unpaid contributions) exceeded the
present value of all benefits accrued under such Retirement Plan determined on a
termination basis using the assumptions established by the Pension Benefit
Guaranty Corporation (the "PBGC") as in effect on such date. No "accumulated
funding deficiency," as defined in Section 412 of the Code, has been incurred
with respect to any Pension Plan, whether or not waived. No "reportable event,"
within the meaning of Section 4043 of ERISA, has occurred with respect to any
Retirement Plan for which reportable event the 30-day notice requirement to the
PBGC has not been waived, and no event described in Section 4041, 4042, 4062 or
4063 of ERISA has occurred in connection with any Retirement Plan, other than a
"reportable event." No condition exists and no event has occurred that would
constitute grounds for termination of any Retirement Plan or, with
10
respect to any Retirement Plan which is a Multiemployer Plan, presents a
material risk of a complete or partial withdrawal under Title IV of ERISA and
the Company and any of its ERISA Affiliates have not incurred any liability in
excess of $25,000 under Title IV of ERISA arising in connection with the
termination of, or complete or partial withdrawal from, any plan covered or
previously covered by Title IV of ERISA. If a "complete withdrawal" by the
Company and all of its ERISA Affiliates were to occur as of the Closing Date
with respect to all Retirement Plans which are Multiemployer Plans, the Company
and any such ERISA Affiliate would not incur any withdrawal liability in excess
of $25,000 under Title IV of ERISA. To the Stockholders' Knowledge, nothing done
or omitted to be done and no transaction or holding of any asset under or in
connection with any Employee Plan has or will make the Company or any officer or
director of the Company subject to any liability under Title I of ERISA or
liable for any tax pursuant to Section 4975 of the Code in excess of $10,000.
(c) Each Employee Plan which is intended to be qualified under Section
401(a) of the Code is so qualified and has been so qualified during the period
from its adoption to date, and each trust forming a part thereof is exempt from
tax pursuant to Section 501(a) of the Code. The Company has furnished to AirNet
copies of the most recent Internal Revenue Service determination letters with
respect to each such Plan. Each Employee Plan has been maintained in substantial
compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations, including but not limited to ERISA and
the Code, which are applicable to such Plan. Without limiting the generality of
the preceding sentence, each Employee Plan which is a "group health plan," as
defined in Section 5000(b)(1) of the Code, has been administered in compliance
with the provisions of Section 4980B of the Code and Part 6 of Title I of ERISA.
(d) There is no contract, agreement, plan or arrangement covering any
employee or former employee of the Company or any ERISA Affiliate that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible pursuant to the terms of Sections 162(a)(1) of the Code.
(e) Schedule 2.13(e) sets forth a list of each employment, severance or
other similar contract, arrangement or policy and each plan or arrangement
(written or oral) providing for insurance coverage (including any self-insured
arrangements), workers' compensation, disability benefits, supplemental
unemployment benefits, vacation benefits, retirement benefits or for deferred
compensation, profit-sharing, bonuses, stock options, stock appreciation or
other forms of incentive compensation or post-retirement insurance, compensation
or benefits which (i) is not an Employee Plan, (ii) is entered into, maintained
or contributed to, as the case may be, by the Company or any of its ERISA
Affiliates and (iii) covers any employee or former employee of the Company or
any of its ERISA Affiliates. Such contracts, plans and arrangements as are
described above, copies or descriptions of all of which have been furnished
previously to AirNet are referred to collectively herein as the "Benefit
Arrangements." Each Benefit
11
Arrangement has been maintained in substantial compliance with its terms and
with the requirements prescribed by any and all statutes, orders, rules and
regulations that are applicable to such Benefit Arrangement.
(f) The excess of the present value of the projected liability in respect
of post-retirement health and medical benefits for retired employees of the
Company and its Affiliates, determined using assumptions that are reasonable in
the aggregate, over the fair market value of any fund, reserve or other assets
segregated for the purpose of satisfying such liability (including for such
purposes any fund established pursuant to Section 401(h) of the Code) does not
in the aggregate exceed $10,000. No condition exists that would prevent the
Company or any of its Affiliates from amending or terminating any Employee Plan
or Benefit Arrangement providing health or medical benefits, including
post-retirement health and medical benefits, in respect of any active employee
or former employee of the Company.
(g) Except as set forth in Schedule 2.13(g), the Company is not a party to
or subject to any union contract or any employment contract or arrangement
providing for annual future compensation of $30,000 or more with any officer,
consultant, director or employee. There are no labor unions voluntarily
recognized or certified to represent any bargaining unit of employees at the
Company. No work stoppage, labor strike or slowdown against the Company is
pending or, to the Stockholders' Knowledge, threatened. The Company is not
involved in or, to the Stockholders' Knowledge, threatened with any labor
dispute or grievance. To the Knowledge of the Stockholders, there is no
organizing effort or representation question at issue with respect to any
employee of the Company.
SECTION 2.14. Trademarks, Patents and Copyrights. (a) Schedule 2.14(a)
sets forth a true and complete list of (i) all patents, patent rights,
trademarks, trademark rights, trade names, copyrights, service marks, trade
secrets, applications for trademarks and for service marks, know-how and other
proprietary rights and information used or held for use in connection with the
business of the Company as currently conducted or as heretofore conducted by the
Company (collectively, "Intellectual Property Rights") and (ii) all licenses,
commitments and other agreements to which the Company is a party providing for
the license of any Intellectual Property Rights to or from any other Person.
(b) Except as set forth on Schedule 2.14(b), the Company owns or possesses
adequate licenses or other rights to use all of the Intellectual Property
Rights; there are no Intellectual Property Rights necessary for use in
connection with the business of the Company as currently conducted or as
heretofore conducted by the Company which are not owned or possessed by the
Company; and the Company is not aware of any assertion or claim challenging the
validity of any of the Intellectual Property Rights; and the conduct of the
business of the Company as currently conducted or as heretofore conducted by the
Company, to the Knowledge of the Stockholders, does not conflict in
12
any material way with any patent, patent right, license, trademark, trademark
right, trade name, trade name right, service xxxx or copyright of any third
party. To the Knowledge of the Stockholders, there are no material infringements
of any proprietary rights owned by or licensed by or to the Company.
SECTION 2.15. Material Contracts. (a) Except for agreements, contracts,
plans, leases, arrangements or commitments (in each case, oral or written) set
forth on Schedule 2.15(a), the Company is not a party to or subject to:
(a) any lease providing for annual rental payments of $10,000 or
more;
(b) any contract for the purchase of materials, supplies, goods,
services, equipment or other assets providing for annual payments by the
Company of $10,000 or more;
(c) any sales, distribution or other similar agreement providing for
the sale by the Company of materials, supplies, goods, services, equipment
or other assets that provides for annual payments to the Company of
$10,000 or more;
(d) any partnership, joint venture or other similar contract
arrangement or agreement;
(e) any contract relating to indebtedness for borrowed money or the
deferred purchase price of property (whether incurred, assumed, guaranteed
or secured by any asset), except contracts relating to indebtedness
incurred in the ordinary course of business in an amount not exceeding
$10,000;
(f) any license agreement, franchise agreement or agreement in
respect of similar rights granted to or held by the Company;
(g) any agency, dealer, sales representative or other similar
agreement;
(h) any contract or other document that substantially limits the
ability of the Company to compete in any line of business or with any
Person or in any area or which would so restrict the Company after the
Closing Date; or
(i) any other contract or commitment not made in the ordinary course
of business that involves annual expenditures by, or revenues to, to the
Company in excess of $10,000.
13
(b) Each agreement, contract, lease, arrangement and commitment disclosed
on Schedule 2.15(a) or required to be disclosed pursuant to this Section is a
valid and binding agreement of the Company and is in full force and effect, and
neither the Company nor, to the Knowledge of the Stockholders, any other party
thereto is in default in any material respect under the terms of any such
agreement, contract, plan, lease arrangement or commitment.
SECTION 2.16. Compliance with Laws. The Company is not in material
violation of, and has not violated in any material respect, any applicable
provisions of any material laws, rules, statutes, ordinances or regulations.
SECTION 2.17. Finders' Fees. No investment banker, broker, finder or other
intermediary has been retained by, or authorized to act on behalf of, any
Stockholder or the Company and entitled to any fee or commission in connection
with the transactions contemplated by this Agreement.
SECTION 2.18. Other Information. The statements contained in the documents
and certificates furnished or to be furnished by the Company or the Stockholders
pursuant to this Agreement and in connection with the transactions contemplated
by this Agreement, when considered in their entirety, do not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not misleading. The financial
projections relating to the Company furnished to AirNet constituted the
Company's best estimate, at the time prepared, of the information purported to
be shown therein, and the Stockholders are not aware of any fact or information
that would lead it to believe that such earnings projections are incorrect or
misleading in any material respect.
SECTION 2.19. Environmental Compliance. Except as set forth on Schedule
2.19:
(a) No written notice, notification, demand, request for information,
citation, summons, complaint or order has been issued or filed, no penalty has
been assessed and no investigation or review is pending, or to the Knowledge of
the Stockholders, threatened by any governmental or other entity, (i) with
respect to any alleged material violation of any law, ordinance, rule,
regulation or order of any governmental entity in connection with the conduct of
the business of the Company and relating to a Hazardous Substance (as
hereinafter defined) or (ii) with respect to any alleged failure to have any
permit, certificate, license, approval, registration or authorization required
in connection with the conduct of the business of the Company relating to a
Hazardous Substance or (iii) with respect to any generation, treatment, storage,
recycling, transportation, disposal or release (including a release as defined
in 42 USC ss. 9601) ("Release") of any toxic, caustic or otherwise hazardous
substance, including
14
petroleum, its derivatives, by-products and other hydrocarbons ("Hazardous
Substance") used in connection with the business of the Company.
(b)(i) The Company has not, other than as a generator, handled any
Hazardous Substance, on any property now or previously owned or leased by the
Company; (ii) no asbestos is present at any property now or previously owned or
leased by the Company; (iii) there are no underground storage tanks currently in
use or, to the Knowledge of the Company, abandoned by the Company, at any
property now or previously owned or leased by the Company which have been used
to store or have contained a Hazardous Substance, (iv) there has been no Release
of a Hazardous Substance with respect to which the Company may reasonably be
required to perform investigation or remediation, other than routine spills and
leaks which are addressed in the ordinary course of business, at, on or under
any property now or previously owned or leased by the Company and (v) no
Hazardous Substance is present in a reportable or threshold planning quantity,
where such a quantity has been established by statute, ordinance, rule,
regulation or order, at, on or under any property now or previously owned by the
Company.
(c) To the Knowledge of the Stockholders, the Company has not transported
or arranged for the transportation (directly or indirectly) of any Hazardous
Substance to any location which is listed or proposed for listing on the
nationwide priorities list established under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA") or on
any similar state list.
(d) To the Knowledge of the Stockholders, no oral or written notification
of a Release of a Hazardous Substance has been filed by or on behalf of the
Company, and no property now or previously owned or leased by the Company is
listed, or to the Knowledge of the Stockholders, proposed for listing, on the
National Priorities List promulgated pursuant to CERCLA.
(e) There are no environmental Liens on any asset of the Company and no
government actions have been taken or are in process which could subject any of
such assets to such Liens.
(f) Except as set forth on Schedule 2.19(f), there have been no material
environmental investigations, studies, audits, tests, reviews or other analyses
conducted by or which are in the possession of the Company in relation to any
property or facility now or previously owned or leased by the Company.
SECTION 2.20. Intercompany Arrangements. Except as set forth on Schedule
2.20, the Company does not own any note, bond, debenture or other indebtedness,
or is otherwise a creditor, of a Stockholder or any Affiliate of the Company.
Since the Balance Sheet Date there has not been any payment by the Company or
any Subsidiary to any Stockholder or any Affiliate of the Company, charge by any
Stockholder or any of Affiliate of the Company to the Company
15
or other transaction between the Company and any Stockholder or any Affiliate of
the Company, except in any such case in the ordinary course of business of the
Company consistent with past practice and in an aggregate amount not in excess
of $10,000.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF AIRNET
AirNet represents and warrants to the Stockholders that:
SECTION 3.01. Corporate Existence and Power. AirNet is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Ohio, and has all requisite corporate powers and all material governmental
licenses, authorizations, consents and approvals required to own, lease and
operate its properties and to carry on its business as now conducted. AirNet is
duly qualified or licensed to do business as a foreign corporation, and is in
good standing, in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification or
licensing necessary.
SECTION 3.02. Organizational Documents. AirNet has heretofore delivered to
the Company true and complete copies of the articles of incorporation and code
of regulations of AirNet, as currently in effect. AirNet is not in violation of
any provision of its articles of incorporation or code of regulations.
SECTION 3.03. Corporate Authorization. The execution, delivery and
performance by AirNet of this Agreement and the consummation by AirNet of the
transactions contemplated hereby are within the corporate powers of AirNet and
have been duly authorized, including, but not limited to, for purposes of
Chapter 1704 of Ohio Law, by all necessary corporate action. This Agreement
constitutes a valid and binding agreement of AirNet.
SECTION 3.04. Governmental Authorization. The execution, delivery and
performance by AirNet of this Agreement and the consummation by AirNet of the
transactions contemplated by the Agreement require no consent, approval,
authorization or permit of, or filing with or notification to any governmental
or regulatory authority.
SECTION 3.05. Non-Contravention. The execution, delivery and performance
by AirNet of this Agreement and the consummation by AirNet of the transactions
contemplated hereby do not and will not (i) contravene or conflict with the
articles of incorporation or code of regulations of AirNet; (ii) contravene or
conflict with or constitute a violation of any provision of law, rule,
regulation, judgment, injunction, order or decree binding upon AirNet or any
Subsidiary of AirNet; (iii) constitute a default under
16
or give rise to any right of termination, cancellation or acceleration of any
right or obligation of AirNet or any Subsidiary of AirNet or to a loss of any
benefit to which AirNet or any Subsidiary of AirNet is entitled under any
agreement, contract or other instrument binding upon AirNet or any Subsidiary of
AirNet; or (iv) result in the creation or imposition of any Lien on any asset of
AirNet or any Subsidiary of AirNet. "Subsidiary," with respect to AirNet, means
any corporation or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are directly or indirectly owned by
AirNet.
SECTION 3.06. Capitalization. (a) As of the date hereof, the authorized
capital stock of AirNet consists of 40,000,000 AirNet Common Shares and
10,000,000 preferred shares, $.01 par value (the "AirNet Preferred Shares"). As
of December 31, 1997, there were outstanding 12,489,830 AirNet Common Shares,
employee stock options to purchase an aggregate of 651,095 AirNet Common Shares
(of which options to purchase an aggregate of 587,145 shares were exercisable)
and no AirNet Preferred Shares outstanding. All of the outstanding AirNet Common
Shares have been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth in this Section and except for changes since
December 31, 1997, resulting from the exercise of employee stock options
outstanding on such date, there are outstanding: (i) no shares of capital stock
or other voting securities of AirNet and (ii) no securities of AirNet
convertible into or exchangeable for shares of capital stock or voting
securities of AirNet, no options or other rights to acquire from AirNet, and no
obligation of AirNet to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of AirNet (the items in clauses (i) and (ii) being referred to
collectively as the "AirNet Securities"). There are no outstanding obligations
of AirNet or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any AirNet Securities.
(b) The Share Portion of the Purchase Price, when issued in accordance
with this Agreement, will be duly authorized, validly issued, fully paid and
non-assessable.
SECTION 3.07. SEC Filings; AirNet Disclosure Documents; Financial
Statements. (a) AirNet has filed all forms, reports and documents required to be
filed by it with the SEC since May 31, 1996, and has heretofore made available
to the Company and the Stockholders, in the form filed with the SEC (excluding
any exhibits thereto, unless otherwise specifically requested by the Company or
the Stockholders), (i) its Annual Report on Form 10-K for the fiscal year ended
September 30, 1996; (ii) its Quarterly Reports on Form 10-Q for the fiscal
quarters ended December 31, 1996, March 31, June 30 and September 30, 1997 and
March 31, 1998; (iii) all proxy statements relating to meetings of AirNet's
shareholders (whether annual or special) held since May 31, 1996; and (iv) all
other reports, statements, schedules and registration statements filed with the
SEC since May 31, 1996 (the forms, reports and other documents referred to in
clauses (i) through (iv), being referred to herein,
17
collectively, as the "AirNet Disclosure Documents"). The AirNet Disclosure
Documents and any other forms, reports or other documents filed by AirNet with
the SEC after the date of this Agreement but prior to the Closing Date, (x) were
prepared, or will be prepared, in accordance with the Securities Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the case
may be, and complied, or will comply, in all material respects with the rules
and regulations thereunder and (y) did not at the time they were filed, or will
not at the time they are filed, with the SEC contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(b) Each of the consolidated financial statements (including any notes
thereto) contained in the Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, was prepared in accordance with generally accepted accounting
principles and fairly presents, in all material respects, the consolidated
financial position, results of operations and cash flows of AirNet and its
consolidated Subsidiaries as at the respective dates thereof and for the
respective periods indicated therein.
SECTION 3.08. Finders' Fees. No investment banker, broker, finder or other
intermediary has been retained by, or authorized to act on behalf of, AirNet and
entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.
ARTICLE IV
COVENANTS OF THE STOCKHOLDERS
Each of the Stockholders, severally and not jointly, agrees that:
SECTION 4.01. Conduct of the Business of the Company. From the date hereof
until the Closing Date unless AirNet shall otherwise have consented in writing,
the Company shall conduct its business in the ordinary course consistent with
past practice and shall use their reasonable efforts to preserve intact their
business organizations and relationships with third parties and to keep
available the services of their present officers and employees. Without limiting
the generality of the foregoing, from the date hereof until the Closing Date,
except as contemplated or required by this Agreement or set forth on Schedule
4.01, the Company shall not, directly or indirectly, do, or propose or agree to
do, any of the following without the prior written consent of AirNet, which
shall not be unreasonably delayed or withheld:
(a) adopt or propose any change in its Articles of Organization or
By-laws;
18
(b) merge or consolidate with any other Person or acquire a material
amount of assets of any other Person;
(c) lease, license or otherwise dispose of any assets or property in
excess of $10,000 except (i) pursuant to existing contracts or commitments
or (ii) in the ordinary course consistent with past practice in an
aggregate;
(d) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of their capital stock;
(e) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of their capital stock;
(f) increase the compensation payable or to become payable to the
Company's executive officers, directors or employees, except for increases
in the ordinary course of business consistent with past practice, or grant
any severance or termination pay to, or enter into any employment or
severance agreement with any director or executive officer, or establish,
adopt, enter into or amend in any material respect or take action to
accelerate any rights or benefits under any collective bargaining, bonus,
profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination,
severance or other plan, agreement, trust, fund, policy or arrangement for
the benefit of any director, executive officer or employee;
(g) create or assume any Lien on any asset having a value in excess
of $10,000 other than in the ordinary course consistent with past
practices;
(h) issue, deliver or sell, or authorize or propose to issue,
deliver or sell, any Company Securities or any securities convertible into
or exchangeable for, or any rights, warrants or options to acquire, any
Company Securities;
(i) incur or assume any indebtedness in excess of $10,000 from any
third party for borrowed money or guarantee any such indebtedness;
(j) make any loans, advances or capital contributions to, or
investments in, any other Person except for (i) loans or advances to
employees in the ordinary course of business consistent with past practice
19
and in an aggregate amount not to exceed $10,000 or (ii) investments in
securities consistent with past practices;
(k) authorize, recommend, propose or announce an intention to adopt
a plan of complete or partial liquidation or dissolution of the Company,
or any plan of division or share exchange involving the Company;
(l) change any method of accounting or any accounting principle or
practice used by the Company, except for any such change required by
reason of a change in generally accepted accounting principles or
Regulation S-X;
(m) agree or commit to do any of the foregoing; or
(n) take or agree or commit to take any action that would make any
representation and warranty of the Company hereunder inaccurate in any
material respect at, or as of any time prior to, the Closing Date.
SECTION 4.02. Access to Information; Confidentiality. (a) From the date
hereof until the Closing Date, the Company shall afford AirNet, its officers,
directors, employees, counsel, financial advisors, auditors and other authorized
representatives (the "AirNet Representatives") reasonable access to the offices,
properties, books and records of the Company, will furnish to AirNet and the
AirNet Representatives such financial and operating data and other information
as such Persons may reasonably request and will instruct the Company's
employees, counsel and financial advisors to cooperate with AirNet in its
investigation of the business of the Company; provided that no investigation
pursuant to this Section shall affect any representation or warranty given by
the Stockholders to AirNet hereunder.
(b) All information obtained by AirNet pursuant to this Section shall be
kept confidential in accordance with the confidentiality agreements dated as of
April 30, 1997, and executed May 14, 1997, between AirNet and the Company.
SECTION 4.03. Other Offers. From the date hereof until the later of the
termination of this Agreement and the Closing Date, none of the Company, any
Affiliate of the Company, the Stockholders or any officer, director, employee or
other agent of the Company will, directly or indirectly, (i) take any action to
solicit, initiate or encourage any inquiries or the making or implementation of
any proposal or offer with respect to a merger, acquisition, consolidation or
similar transaction involving, or any purchase of all or any significant portion
of the assets or any equity securities of, the Company (a "Company Acquisition
Proposal"), other than the transactions contemplated by this Agreement, or (ii)
engage in negotiations with, or disclose any nonpublic information relating to
the Company or afford access to the properties, books or records of the
20
Company to, any Person that the Company believes may be considering making, or
has made, a Company Acquisition Proposal. The Stockholders will promptly notify
AirNet upon receipt of any Company Acquisition Proposal or any indication that
any Person is considering making a Company Acquisition Proposal or any request
for nonpublic information relating to the Company or for access to the
properties, books or records of the Company by any Person that may be
considering making, or has made, a Company Acquisition Proposal and will keep
AirNet fully informed of the status and details of any such Company Acquisition
Proposal, indication or request.
SECTION 4.04. Notices of Certain Events. The Stockholders shall promptly
notify AirNet of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement;
(c) the occurrence, or non-occurrence, of any event the occurrence,
or non-occurrence, of which would be reasonably likely to cause (x) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect or (y) any covenant, condition or
agreement contained in this Agreement not to be complied with or satisfied
in all material respects; and
(d) any failure of the Company or any Stockholder to comply with or
satisfy any covenant, condition or agreement to be complied with or
satisfied by them hereunder;
provided, however, that the delivery of any notice pursuant to this Section
shall not limit or otherwise affect the remedies available hereunder to AirNet.
SECTION 4.05. Stockholder Actions. (a) Each Stockholder hereby waives any
and all rights now or hereafter available to such Stockholder under the law of
The Commonwealth of Massachusetts to demand appraisal with respect to any shares
of capital stock of the Company in connection with this Agreement or the
transactions contemplated by this Agreement.
(b) Following the Closing Date, each Stockholder agrees not to make any
sale, transfer or other disposition of any AirNet Common Shares unless (i) such
sale, transfer or other disposition has been registered under the Securities
Act, (ii) such sale, transfer or other disposition is made in conformity with
the provisions of Rule 144 under the Securities Act (as such rule may be amended
from time to time), or (iii) in the opinion of counsel in form and
21
substance reasonably satisfactory to AirNet, or under a "no-action" letter
obtained by such Stockholder from the staff of the SEC, such sale, transfer or
other disposition will not violate or is otherwise exempt from registration
under the Securities Act.
ARTICLE V
COVENANTS OF AIRNET
AirNet agrees that:
SECTION 5.01. Access to Information; Confidentiality. (a) From the date
hereof until the Closing Date, AirNet shall afford the Company, its officers,
directors, employees, counsel, financial advisors, auditors and other authorized
representatives (the "Company Representatives") reasonable access to the
offices, properties, books and records of AirNet and its Subsidiaries, will
furnish to the Company and the Company Representatives such financial and
operating data and other information as such Persons may reasonably request and
will instruct AirNet's and its Subsidiaries' employees, counsel and financial
advisors to cooperate with the Company in its investigation of the business of
AirNet and its Subsidiaries; provided that no investigation pursuant to this
Section shall affect any representation or warranty given by AirNet to the
Company and the Stockholders hereunder.
(b) All information obtained by the Company pursuant to this Section shall
be kept confidential in accordance with the confidentiality agreements dated as
of April 30, 1997, and executed May 14, 1997, between AirNet and the Company.
SECTION 5.02. Notices of Certain Events. AirNet shall promptly notify the
Company of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement;
(c) the occurrence, or non-occurrence, of any event the occurrence,
or non-occurrence, of which would be likely to cause (x) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect or (y) any covenant, condition or
agreement contained in this Agreement not to be complied with or satisfied
in all material respects; and
22
(d) any failure of AirNet or any Subsidiary of AirNet to comply with
or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section
shall not limit or otherwise affect the remedies available hereunder to the
Company.
SECTION 5.03. Director and Officer Indemnification. From and after the
Closing Date, AirNet will cause the Company to indemnify and hold harmless the
present and former officers and directors of the Company in respect of acts or
omissions occurring prior to the Closing Date to the extent provided under the
Company's Articles of Organization and By-laws, as in effect on the date hereof;
provided, that such indemnification shall be subject to any limitation imposed
from time to time under applicable law, and, provided, further, that such
indemnification shall not apply to claims made by or on behalf of any
stockholder or former stockholder of the Company.
SECTION 5.04. Rule 144. With a view to making available to the
Stockholders the benefits of Rule 144 promulgated under the Securities Act, and
any other similar rules and regulations of the SEC which may at any time permit
the Stockholders to sell or distribute without registration the AirNet Common
Shares received as the Share Portion of the Purchase Price hereunder, AirNet
agrees to use its reasonable efforts to file with the SEC in a timely manner all
reports and other documents required to be filed by it under the Exchange Act.
ARTICLE VI
COVENANTS OF AIRNET AND THE STOCKHOLDERS
The parties hereto agree that:
SECTION 6.01. Reasonable Efforts. Subject to the terms and conditions of
this Agreement, each party will use its reasonable efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement as promptly as possible.
SECTION 6.02. Certain Filings. The Stockholders and AirNet shall cooperate
with one another (a) in determining whether any action by or in respect of, or
filing with, any governmental body, agency or official, or authority is
required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any contracts, in connection with the consummation of
the transactions contemplated by this Agreement and (b) in seeking any such
actions, consents, approvals or waivers or making any such filings and seeking
to timely obtain any such actions, consents, approvals or waivers.
23
SECTION 6.03. Public Announcements. AirNet and the Stockholders will
consult with each other before issuing any press release or otherwise making any
public statement with respect to this Agreement or any transaction contemplated
herein and, except as may be required by applicable law, the rules and
regulations of the SEC or any listing agreement with any national securities
exchange, AirNet will not issue any such press release or make any such public
statement prior to such consultation, and neither the Stockholders nor the
Company will issue any such press release or make any such public statement
without the prior written consent of AirNet, which shall not be unreasonably
withheld or delayed.
SECTION 6.04. Tax Matters. (a) The Stockholders shall be solely
responsible for preparing all Tax Returns with respect to the income, business,
assets, operations, activities, status or other matters of the Company for all
taxable periods ending at or before the Closing Date other than the Tax Return
with respect to Massachusetts income Tax imposed on the Company for the period
commencing on January 1, 1998 and ending on the Closing Date, which Tax Return
shall be prepared by AirNet. The Stockholders shall submit a copy of such Tax
Returns to AirNet for its review and approval (which shall not be unreasonably
withheld or delayed) at least 15 days prior to their due date. Upon such
approval, AirNet and the Stockholders shall cause such Tax Returns to be filed
on a timely basis. The Stockholders shall be solely responsible for and shall
pay on a timely basis all Taxes due thereon, except with respect to any
Massachusetts income Tax imposed (including, for the avoidance of doubt,
Massachusetts income Taxes imposed on the Company as a result of the Election)
on the Company for the period commencing on January 1, 1998 and ending on the
Closing Date.
(b) AirNet shall be solely responsible for preparing and filing on a
timely basis all Tax Returns with respect to the income, business, assets,
operations, activities, status or other matters of the Company or any of its
Subsidiaries for all taxable periods beginning after the Closing Date. AirNet
shall be solely responsible for and shall pay on a timely basis all Taxes due
thereon.
(c) The Stockholders and AirNet shall jointly prepare all Tax Returns with
respect to the income, business, assets, operations, activities, status or other
matters of the Company for all taxable periods beginning before and ending after
the Closing Date ("Straddle Periods"). The Stockholders and AirNet shall
allocate any liability for Taxes relating to Straddle Periods on the basis of an
interim closing of the books as of the Closing Date. The parties agree that the
Company shall distribute to each Stockholder an amount representing such
Stockholder's aggregate liability for Taxes attributable to the Taxable income
of the Company for the period commencing January 1, 1998 and ending at the
Closing Date, less estimated tax payments already paid to such Stockholder for
such period. The Stockholders and AirNet shall jointly prepare such calculation,
and the amount with respect to each Stockholder shall be distributed by the
Company to such Stockholder within 10 days after the calculation thereof. The
parties
24
further agree that such distributions shall be final and binding on the parties
and no further cash distributions may be paid by the Company with respect to, or
in satisfaction of, either Stockholder's liability for Taxes attributable to the
taxable income of the Company for any period.
(d) The Stockholders and AirNet agree to furnish to each other, upon
written request, as promptly as practicable, such information and reasonable
assistance relating to the Company as is necessary for the filing of any Tax
Return required to be filed after the Closing Date. The Stockholders and AirNet
also agree to cooperate with each other in the conduct of any audit or other
proceeding involving one or more of the Company or any successor corporation. In
any such case, each party shall use its reasonable efforts to cause its
financial advisors, auditors and other authorized representatives to cooperate
therewith.
SECTION 6.05. Tax Treatment. The parties agree that AirNet and the
Stockholders will file the election provided for by Section 338(h)(10) of the
Code and any comparable election under applicable state or local law
(collectively and separately, the "Election") with respect to the acquisition of
the Shares pursuant to this Agreement. In connection with the Election, as soon
as reasonably practicable, but in any event within 30 days after Closing Date,
AirNet and the Stockholders shall act together in good faith to agree upon the
proper allocations with respect to the Company's assets in accordance with the
Code and the Treasury Regulations promulgated thereunder (the "Allocations").
Each of AirNet and the Stockholders agree to file the Tax Returns described in
Section 6.04 in accordance with the Allocations and to file the Election with
the Internal Revenue Service no later than December 31, 1998. Each Stockholder
shall, upon written request from AirNet, execute and deliver to AirNet such
documents as AirNet shall reasonably request to properly complete the forms
relating to the Election. Upon the filing of the Election, AirNet agrees to
reimburse each Stockholder (in the same proportions as set forth on Annex A) for
any additional Taxes incurred by such Stockholder beyond Taxes at then existing
capital gains rates that each such Stockholder would have incurred had the
Election not been made. The amount of such reimbursement shall be grossed up by
dividing such amount by 0.75.
SECTION 6.06. Employee Benefits. (a) With respect to each of the Employee
Plans and Benefit Arrangements of the Company, AirNet agrees that, as of and
following the Closing Date, AirNet shall provide, or shall cause the Company to
provide, employees of the Company, with the same or substantially similar
employee benefit plans and programs, including but not limited to employee
benefit plans, within the meaning of Section 3(3) of ERISA, as those provided to
employees of AirNet with comparable status and seniority as of the Closing Date.
(b) Notwithstanding the foregoing, upon the termination of any Company
Employee Plan which is subject to the provisions of Section 401(k) of the Code
(a "Company 401(k) Plan"), AirNet shall, or shall cause the Company to,
establish or
25
designate, and maintain, a defined contribution plan (the "AirNet 401(k) Plan")
to provide benefits to the employees of the Company who are participants in a
Company 401(k) Plan as of the date of its termination in accordance with Section
7.07(a) ("401(k) Plan Participants"). The AirNet 401(k) Plan shall be qualified
under Section 401(a) and 401(k) of the Code and shall provide the 401(k) Plan
Participants full credit for service with the Company, its Subsidiaries and
their Affiliates for purposes of eligibility to participate and vesting. The
AirNet 401(k) Plan shall also accept rollover contributions and rollovers of any
outstanding account loan balances of the 401(k) Plan Participants from a Company
401(k) Plan.
ARTICLE VII
CONDITIONS
SECTION 7.01. Conditions to the Obligations of Each Party. The respective
obligations of the Company, the Stockholders and AirNet to consummate the
transactions contemplated by this Agreement are subject to the satisfaction of
the following conditions, any or all of which may be waived, in whole or in
part, to the extent permitted by this Agreement and by applicable law:
(a) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of
the transactions contemplated by this Agreement; and
(b) all authorizations, consents, waivers, orders or approvals
required to be obtained, and all filings, notices or declarations required
to be made, by the Company and AirNet prior to the Closing Date shall have
been obtained from, and made with, all required governmental or regulatory
authorities except for such authorizations, consents, waivers, orders,
approvals, filings, notices or declarations the failure of which to obtain
or make would not, at or after the Closing Date, individually or in the
aggregate, have a Company Material Adverse Effect or an AirNet Material
Adverse Effect.
SECTION 7.02. Conditions to the Obligations of AirNet. The obligations of
AirNet to consummate the transactions contemplated by this Agreement are subject
to the satisfaction of the following further conditions, any or all of which may
be waived, in whole or in part, to the extent permitted by this Agreement and by
applicable law:
(a) the Stockholders shall have performed in all material respects
their respective agreements and covenants required by this Agreement to be
performed by them at or prior to the Closing Date; the representations and
warranties of the Stockholders contained in this Agreement and in
26
any certificate or other writing delivered by the Stockholders pursuant
hereto, disregarding any qualifications contained therein regarding
materiality or Company Material Adverse Effect, shall be true and correct
in all material respects at and as of the Closing Date as if made at and
as of such time, and AirNet shall have received a certificate signed by
the Stockholders to the foregoing effect;
(b) since the Balance Sheet Date, there shall have been no change,
occurrence or circumstance in the business, results of operations or
condition (financial or otherwise) of the Company having or reasonably
likely to have, individually or in the aggregate, a Company Material
Adverse Effect, and AirNet shall have received a certificate of the
Stockholders to such effect;
(c) no court, arbitrator or governmental body, agency or official
shall have issued any order, and there shall not be any statute, rule or
regulation, materially restraining or prohibiting the consummation of the
transactions contemplated by this Agreement or the effective operation of
the business of the Company after the Closing Date;
(d) AirNet shall have received executed copies of the documents
specified in clauses (i) through (iii) of Section 1.03(b); and
(e) AirNet shall have received an opinion from Ropes & Xxxx, counsel
to the Company and the Stockholders, substantially in the form attached
hereto as Exhibit 7.02(e).
SECTION 7.03. Conditions to the Obligations of the Stockholders. The
obligations of the Stockholders to consummate the transactions contemplated
hereby are subject to the satisfaction of the following further conditions, any
or all of which may be waived, in whole or in part, to the extent permitted by
this Agreement and by applicable law:
(a) AirNet shall have performed in all material respects their
respective agreements and covenants required by this Agreement to be
performed by them at or prior to the Closing Date; the representations and
warranties of AirNet contained in this Agreement and in any certificate or
other writing delivered by AirNet pursuant hereto, disregarding any
qualifications contained therein with respect to materiality or AirNet
Material Adverse Effect, shall be true and correct in all material
respects at and as of the Closing Date as if made at and as of such time,
and the Company shall have received a certificate signed by the Chief
Executive Officer and Chief Financial Officer of AirNet to the foregoing
effect;
27
(b) no court, arbitrator or governmental body, agency or official
shall have issued any order, and there shall not be any statute, rule or
regulation, materially restraining or prohibiting the consummation of the
transactions contemplated by this Agreement or the effective operation of
the business of AirNet after the Closing Date;
(c) the Stockholders shall have received evidence of the wire
transfers contemplated by clauses (i) and (ii) of Section 1.03(c) and
shall have received executed copies of the documents specified in clauses
(iii) through (v) of Section 1.03(c);
(d) the Stockholders shall have received all documents it may
reasonably request relating to the existence of AirNet and the authority
of AirNet to enter into, deliver and perform this Agreement, all in form
and substance reasonably satisfactory to the Stockholders; and
(e) the Stockholders shall have received an opinion from Vorys,
Xxxxx, Xxxxxxx and Xxxxx LLP, counsel to AirNet, substantially in the form
attached hereto as Exhibit 7.03(e).
28
ARTICLE VIII
TERMINATION
SECTION 8.01. Termination. This Agreement may be terminated at any time
prior to the Closing Date:
(a) by mutual written consent of the Stockholders and AirNet;
(b) by the Stockholders or AirNet if the transactions contemplated
hereby have not been consummated by September 30, 1998; provided, however,
that the right to terminate this Agreement pursuant to this Section
8.01(b) shall not be available to any party whose willful failure to
perform any of its obligations under this Agreement results in the failure
of the transactions contemplated by this Agreement to be consummated by
such time;
(c) by AirNet, upon a breach of any representation, warranty,
covenant or agreement of the Stockholders, or if any representation or
warranty of the Stockholders shall become untrue, the effect of which is a
Company Material Adverse Effect, in either case such that the conditions
set forth in Section 7.02(a) would be incapable of being satisfied by
September 30, 1998 (or as otherwise extended);
(d) by the Stockholders, upon a breach of any representation,
warranty, covenant or agreement of AirNet, or if any representation or
warranty of AirNet shall become untrue, the effect of which is an AirNet
Material Adverse Effect, in either case such that the conditions set forth
in Section 7.03(a) would be incapable of being satisfied by September 30,
1998 (or as otherwise extended); or
(e) by the Stockholders or AirNet if there shall be any law or
regulation that makes consummation of the transactions contemplated by
this Agreement illegal or otherwise prohibited or if any judgment,
injunction, order or decree enjoining AirNet or the Stockholders from
consummating the transactions contemplated by this Agreement is entered
and such judgment, injunction, order or decree shall become final and
nonappealable.
SECTION 8.02. Effect of Termination. If this Agreement is terminated
pursuant to Section 8.01, this Agreement shall become void and of no effect with
no liability on the part of any party hereto, except that the agreements
contained in Sections 4.02, 5.01 and 10.03 shall survive the termination hereof;
provided, however, that nothing
29
herein shall relieve any party from liability for the willful breach of any of
its representations, warranties, covenants or agreements set forth in this
Agreement.
ARTICLE IX
SURVIVAL; INDEMNIFICATION
SECTION 9.01. Survival. The covenants, agreements, representations and
warranties of the parties hereto contained in this Agreement or in any
certificate or other writing delivered pursuant hereto shall survive the Closing
Date through the period ending on the thirtieth day following the audit of the
financial results of AirNet (including the operations of the Company) for the
fiscal year ended December 31, 1998 by AirNet's independent public auditors.
Notwithstanding the preceding two sentences, any breach of a covenant,
agreement, representation or warranty in respect of which indemnity may be
sought under Section 9.02 shall survive the time at which it would otherwise
terminate pursuant to the preceding sentence, if written notice of the specific
inaccuracy or breach thereof giving rise to such right to indemnity shall have
been given to the party against whom such indemnity may be sought prior to such
time.
SECTION 9.02. Indemnification. (a) At and after the Closing Date, each of
the Stockholders hereby, severally but not jointly, indemnifies AirNet and,
effective as of the Closing Date, without duplication, the Company and their
respective Affiliates (each an "AirNet Indemnitee" against and agree to hold it
harmless from any and all damage, loss, liability and expense (including,
without limitation, reasonable expenses of investigation and reasonable
attorneys' fees and expenses in connection with any action, suit or proceeding)
(collectively, "Loss") incurred or suffered by any AirNet Indemnitee arising out
of any breach of any covenant, agreement, representation or warranty made or to
be performed by the Stockholders pursuant to this Agreement; provided that (i)
the Stockholders shall not be liable under this Section 9.02(a) unless the
aggregate amount of Losses with respect to all matters referred to in this
Section 9.02(a) (determined without regard to any materiality qualification
contained in any representations, warranty or covenant giving rise to the claim
for indemnity hereunder) exceeds $20,000 (after which point the Stockholders
will be liable under this Section 9.02(a) only for further such Losses); (ii)
any claim for Losses under this Section 9.02(a) shall be in an aggregate amount
equal to or greater than $1,000; and (iii) the Stockholders' liability under
this Section 9.02(a) shall be limited to the Escrow Shares. To the extent that
AirNet or the Company makes a claim against the Escrow Shares and such claim is
paid in AirNet Common Shares, then, for purposes of such payment, the AirNet
Common Shares shall be valued at the average closing price of the AirNet Common
Shares on the trading day immediately prior to the date such claim is paid, as
set forth in the Escrow Agreement.
30
(b) At and after the Closing Date, AirNet hereby indemnifies the
Stockholders against and agrees to hold them harmless from any and all Losses
incurred or suffered by the Stockholders arising out of any covenant, agreement,
representation or warranty made or to be performed by AirNet pursuant to this
Agreement, provided that (i) AirNet shall not be liable under this Section
9.02(b) unless the aggregate amount of the Stockholders' Losses exceeds $20,000
(after which point AirNet will be liable under this Section 9.02(b) only for
further such Losses); (ii) all Losses shall be payable by AirNet in additional
AirNet Common Shares having a fair market value on the date of payment (based on
the closing price of the AirNet Common Shares on the New York Stock Exchange on
the immediately preceding trading day) equal to the amount of such Losses; (iii)
any claim for Losses under this Section 9.02(b) shall be in an aggregate amount
equal to or greater than $1,000; and (iv) AirNet's maximum liability under this
Section 9.02(b) shall not exceed 25,499 AirNet Common Shares.
SECTION 9.03. Procedures. (a) The party seeking indemnification under
Section 9.02 (the "Indemnified Party") agrees to give prompt notice to the party
against whom indemnity is sought (the "Indemnifying Party") of the Losses for
which indemnity may be sought under such Section. The Indemnifying Party may,
and at the request of the Indemnified Party shall, participate in and control
the defense of any suit, action or proceeding for which indemnity is sought
hereunder at its own expense. The Indemnifying Party shall not be liable under
Section 9.02 for any settlement effected without its consent of any claim,
litigation or proceeding in respect of which indemnity may be sought hereunder;
provided that such consent is not unreasonably withheld or delayed.
(b) The Indemnified Party shall cooperate fully in all aspects of any
matter for which indemnity is sought pursuant to this Article IX with respect to
an action brought by a third party, including, in such case, by providing
reasonable access to employees and officers (as witnesses or otherwise) and
other information.
SECTION 9.04. Exclusive Remedy. AirNet, on behalf of itself and the AirNet
Indemnitees, and the Stockholders each hereby acknowledges and agrees that, at
and after the Closing Date, the sole and exclusive remedy with respect to any
and all claims relating to, or arising out of, this Agreement or the
transactions contemplated hereby shall be pursuant to the indemnification
provisions contained in this Article IX; provided, that neither AirNet, on the
one hand, nor the Stockholders, on the other, waive any rights such party may
have against the other party pursuant to Section 10(b) under the Securities
Exchange Act of 1934, as amended, or the rules and regulations promulgated
thereunder.
SECTION 9.05. Certain Limitations. The liability of the Indemnifying Party
to the Indemnified Party, as applicable, for claims under this Agreement shall
be limited by the following:
31
(a) The amount of Losses otherwise recoverable under this Article IX shall
be reduced to the extent to which any Federal, state, local or foreign tax
liabilities of the Indemnified Party is decreased by reason of any Loss in
respect of which such Indemnified Party shall be entitled to indemnity under
this Agreement.
(b) No Losses shall be recoverable by an Indemnified Party with respect to
any matter which is covered by insurance or another source of indemnification,
to the extent proceeds of such insurance or other third party indemnitor are
paid net of any costs incurred in connection with the collection thereof, the
Indemnified Party hereby agreeing to seek all reasonable remedies against all
applicable insurers or indemnitors prior to recovering any amounts hereunder.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including telecopy, telex or similar
writing) and shall be given,
if to AirNet, to:
AirNet Systems, Inc.
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Attn.: Xxxx X. Xxx, Executive Vice President
and Chief Financial Officer
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxx, Xx.
Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
00 Xxxx Xxx Xxxxxx
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
if to the Company or the Stockholders, to:
Mercury Business Services, Inc.
00 Xxxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn.: Xxxxx X. Xxxxxxxxx
Telecopy: (000) 000-0000
32
with a copy to:
Xxxxxx X. Xxxx
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
or such other address or telecopy number as such party may hereafter specify for
the purpose of notice to the other parties hereto. Each such notice, request or
other communication shall be effective (i) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section 10.01
and the appropriate confirmation is received or (ii) if given by any other
means, when delivered at the address specified in this Section.
SECTION 10.02. Amendments; No Waivers. (a) Any provision of this Agreement
may be amended or waived prior to the Closing Date if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
the Stockholders and AirNet or in the case of a waiver, by the party against
whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 10.03. Expenses; Taxes. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost or
expense; provided, that in the event the Closing Date occurs, the costs and
expenses of the Company shall be paid by the Stockholders personally and not by
the Company. Notwithstanding the foregoing, AirNet shall pay for the reasonable
costs and expenses of the Company's independent accountants in connection with
the preparation of audited financial statements of the Company; provided, that
if the Closing Date does not occur, AirNet shall pay for only fifty percent
(50%) of such costs expenses actually incurred by the Company through the date
of termination of this Agreement up to, but not exceeding, $25,000.
Notwithstanding the foregoing, all applicable sales, use or transfer taxes, if
any, and all capital gains or income taxes of the Stockholders or the Company,
in each case, that may be due and payable as a result of this Agreement or the
transactions contemplated hereby, whether levied on the Company, any of the
Stockholders or AirNet, shall be borne by the Stockholders, other than any
Massachusetts income Tax imposed on the Company for the period commencing on
January 1, 1998 and ending on the Closing Date, which shall be borne by AirNet.
33
SECTION 10.04. Headings; Definition. (a) The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
(b) For purposes of this Agreement, the term "Knowledge" shall mean actual
knowledge.
SECTION 10.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
SECTION 10.06. Entire Agreement. This Agreement (together with the
exhibits, annexes, schedules and the other documents delivered pursuant hereto)
and the confidentiality agreements between the Company and AirNet constitute the
entire agreement of the parties and supersede all prior agreements and
undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof.
SECTION 10.07. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the written consent of the other parties; provided, further, that AirNet
may assign its rights, but not its obligations, under this Agreement to a
wholly-owned Subsidiary of AirNet.
SECTION 10.08. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Ohio.
SECTION 10.09. Consent to Jurisdiction. The Stockholders each irrevocably
submit to the jurisdiction of any Ohio state or federal court sitting in
Franklin County, Ohio, over any suit, action or proceeding arising out of or
relating to this agreement or any related document and agree that any such suit,
action or proceeding shall be brought only in such courts. The Stockholders each
irrevocably waive, to the fullest extent permitted by law, any objection which
they may have or hereafter have to the laying of the venue of any such suit,
action or proceeding brought in such a court and
34
any claim that any such suit, action or proceeding has been brought in an
inconvenient forum.
SECTION 10.10. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
[signature page to follow]
35
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
STOCKHOLDERS:
/s/ Xxxxx X. Xxxxxxxxx
----------------------------------------
XXXXX X. XXXXXXXXX
/s/ Xxxxxx X. Xxxxx
----------------------------------------
XXXXXX X. XXXXX
AIRNET:
AIRNET SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
36
ANNEX A
STOCKHOLDER PERCENTAGES
Xxxxx X. Xxxxxxxxx - 87.5%
Xxxxxx X. Xxxxx - 12.5%
37
