STOCK PURCHASE AGREEMENT Dated as of JULY 3, 2007 Between RADIO ACQUISITION CORP. ARINC INCORPORATED, AMERICAN AIRLINES, INC., CONTINENTAL AIRLINES, INC., DELTA AIR LINES, INC., NORTHWEST AIRLINES, INC., UNITED AIR LINES, INC. and US AIRWAYS, INC.
[EXECUTION
VERSION]
CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED FOR THE REDACTED PORTIONS. THE CONFIDENTIAL
REDACTED PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH
REDACTIONS.
Dated
as of JULY 3,
2007
Between
RADIO
ACQUISITION
CORP.
ARINC
INCORPORATED,
AMERICAN
AIRLINES,
INC.,
CONTINENTAL
AIRLINES, INC.,
DELTA
AIR LINES,
INC.,
NORTHWEST
AIRLINES,
INC.,
UNITED
AIR LINES,
INC.
and
US
AIRWAYS,
INC.
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TABLE
OF
CONTENTS
Page
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PURCHASE
AND
SALE
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1
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Section
1.1
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Agreement
to
Purchase and Sell
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1
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Section
1.2
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Purchase
Price
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2
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|
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Section
1.3
|
Method
of
Payment
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3
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ARTICLE
II.REPRESENTATIONS AND WARRANTIES REGARDING THE
SHAREHOLDERS3
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Section
2.1
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Organization;
Standing
|
3
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Section
2.2
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Authorization;
Noncontravention.
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3
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Section
2.3
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Governmental
Approvals
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4
|
|
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Section
2.4
|
Ownership
of
Equity
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4
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|
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Section
2.5
|
Legal
Proceedings
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4
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ARTICLE
III.REPRESENTATIONS AND WARRANTIES REGARDING THE
COMPANY4
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Section
3.1
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Organization,
Standing and Corporate Power
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4
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Section
3.2
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Capitalization
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5
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Section
3.3
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Authorization
Noncontravention
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6
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Section
3.4
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Governmental
Approvals
|
7
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Section
3.5
|
Financial
Statements; Undisclosed Liabilities
|
7
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Section
3.6
|
Absence
of
Certain Changes
|
8
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Section
3.7
|
Legal
Proceedings
|
10
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|
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Section
3.8
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Compliance
With Laws; Permits.
|
10
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Section
3.9
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Tax
Matters
|
11
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|
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Section
3.10
|
Employee
Benefits and Labor Matters.
|
11
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Section
3.11
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Environmental
Matters
|
13
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|
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Section
3.12
|
Properties
|
14
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Section
3.13
|
Insurance
|
15
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Section
3.14
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Intellectual
Property
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15
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Section
3.15
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Contracts
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16
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Section
3.16
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Affiliate
Matters
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18
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Section
3.17
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Brokers
and
Other Advisors
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18
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Section
3.18
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Relations
with Governments.
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18
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Section
3.19
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Customers
and
Suppliers.
|
20
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Section
3.20
|
Government
Contracts
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20
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ARTICLE
IV.REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER21
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Section
4.1
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Organization;
Standing
|
22
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|
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Section
4.2
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Authority;
Noncontravention
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22
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|
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Section
4.3
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Governmental
Approvals
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22
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Section
4.4
|
Capital
Resources
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22
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|
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Section
4.5
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Brokers
and
Other Advisors
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23
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|
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Section
4.6
|
Ownership
of
Shares
|
23
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|
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Section
4.7
|
Investigation;
Acknowledgement
|
23
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ARTICLE
V.ADDITIONAL COVENANTS AND
AGREEMENTS24
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|
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Section
5.1
|
Conduct
of
Business
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24
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Section
5.2
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No
Solicitation
|
28
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|
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Section
5.3
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Reasonable
Best Efforts.
|
28
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Section
5.4
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Public
Announcements
|
29
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|
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Section
5.5
|
Access
to
Information; Confidentiality
|
30
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|
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Section
5.6
|
Indemnification
and Insurance
|
30
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Section
5.7
|
Fees
and
Expenses
|
32
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Section
5.8
|
Release
|
32
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|
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Section
5.9
|
Merger
|
33
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Section
5.10
|
Service
Level
Amendments
|
33
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Section
5.11
|
Financing
|
33
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|
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Section
5.12
|
Payoff
Letters
|
34
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Section
5.13
|
FIRPTA
|
35
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|
|
Section
5.14
|
Operating
Leases
|
35
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|
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Section
5.15
|
Performance
Bonds
|
35
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|
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Section
5.16
|
Aeromobile
|
35
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Section
5.17
|
International
Communications Licenses
|
35
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ARTICLE
VI.CONDITIONS PRECEDENT36
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|
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Section
6.1
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Conditions
to
Each Party’s Obligation to Effect the Transactions
|
36
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Section
6.2
|
Conditions
to
Obligations of the Purchaser
|
36
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Section
6.3
|
Conditions
to
Obligations of the Shareholders and the Company
|
38
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ARTICLE
VII.CLOSING38
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Section
7.1
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Closing
|
38
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Section
7.2
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Closing
Deliveries of the Shareholders and the Company
|
39
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Section
7.3
|
The
Purchaser
Closing Deliveries
|
39
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ARTICLE
VIII.TERMINATION39
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|
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Section
8.1
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Termination
|
39
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Section
8.2
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Effect
of
Termination
|
40
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ARTICLE
IX.INDEMNIFICATION41
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|
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Section
9.1
|
Indemnification
Obligations of the Shareholders41
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Section
9.2
|
Indemnification
Procedure.
|
41
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Section
9.3
|
Survival
Period
|
42
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Section
9.4
|
Liability
Limits
|
42
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|
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Section
9.5
|
Calculation
of Damages
|
43
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Section
9.6
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Exclusive
Remedy
|
43
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Section
9.7
|
Adjustments
to the Purchase Price
|
43
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ARTICLE
X.MISCELLANEOUS43
|
|
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Section
10.1
|
Survival
of
Representations, Warranties, Covenants and
Agreements
|
43
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Section
10.2
|
No
Other
Representations or Warranties
|
43
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|
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Section
10.3
|
Amendment
or
Supplement
|
44
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|
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Section
10.4
|
Extension
of
Time, Waiver, Etc
|
44
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Section
10.5
|
Assignment
|
44
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Section
10.6
|
Counterparts
|
44
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Section
10.7
|
Entire
Agreement; No Third-Party Beneficiaries; No Recourse
|
44
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Section
10.8
|
Governing
Law
|
45
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Section
10.9
|
Dispute
Resolution
|
45
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Section
10.10
|
Notices
|
45
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Section
10.11
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Severability
|
48
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Section
10.12
|
Definitions
|
49
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Section
10.13
|
Rules
of
Interpretation
|
57
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This
STOCK PURCHASE
AGREEMENT, dated as of July 3, 2007, is between Radio Acquisition Corp., a
Delaware corporation (the “Purchaser”), ARINC Incorporated, a Delaware
corporation (the “Company”), American Airlines, Inc., a Delaware corporation
(“American”), Continental Airlines, Inc., a Delaware corporation
(“Continental”), Delta Air Lines, Inc., a Delaware corporation (“Delta”),
Northwest Airlines, Inc., a Delaware corporation (“Northwest”), United Air
Lines, Inc., a Delaware corporation (“United”), and US Airways, Inc., a Delaware
corporation (“US Airways”). American, Continental, Delta, Northwest,
United and US Airways are sometimes referred to herein individually as a
“Shareholder” and collectively as the “Shareholders.” Certain
capitalized and other terms used in this Agreement shall have the meanings
set
forth in Section 10.12.
WHEREAS,
the
Shareholders own more than ninety percent (90%) of the issued and outstanding
shares of capital stock of the Company;
WHEREAS,
pursuant
to the terms and conditions set forth herein, the Shareholders propose to sell
to the Purchaser, and the Purchaser proposes to purchase from the Shareholders,
all of the issued and outstanding shares of capital stock of the Company owned
by the Shareholders;
WHEREAS,
as soon as
practicable following the Closing, the Purchaser will acquire all remaining
issued and outstanding shares of capital stock of the Company pursuant to the
terms set forth in Section 5.9;
WHEREAS,
simultaneously herewith, Carlyle Partners IV, L.P. (the “Guarantor”) has
delivered to the Shareholders that certain Guaranty (the “Sponsor Guaranty”),
pursuant to which the Guarantor has agreed to guarantee certain obligations
of
the Purchaser hereunder; and
WHEREAS,
prior to
and in connection with the execution of this Agreement, the Shareholders have
caused the Company to amend its certificate of incorporation in a form
acceptable to the Purchaser (the “Certificate Amendment”) and the Shareholders
have delivered to the Purchaser correct and complete copies of (i) such
Certificate Amendment, certified by the Secretary of State of the State of
Delaware, (ii) the approvals of such Certificate Amendment by the Board of
Directors and the stockholders of the Company, certified by the Secretary of
the
Company, and (iii) the approval of the Transactions by the Special Committee
and
the Board of Directors, certified by the Secretary of the Company.
NOW,
THEREFORE, in
consideration of the representations, warranties, covenants and agreements
contained in this Agreement, and intending to be legally bound hereby, the
Purchaser and the Shareholders hereby agree as follows:
ARTICLE
I.
PURCHASE
AND
SALE
Section
1.1 Agreement
to
Purchase and Sell. Subject to the terms and conditions of this
Agreement, at the Closing, the Shareholders will sell, transfer and deliver
to
the Purchaser, and the Purchaser will purchase and acquire from the
Shareholders, all of the shares of Company Common Stock owned by the
Shareholders (the “Shares”), free and clear of all Liens.
Section
1.2 Purchase
Price.
(a) Within
ten (10)
Business Days prior to the Closing Date, and in no event less than three (3)
Business Days prior to the Closing Date, the Company shall deliver to the
Purchaser a certificate signed by the chief financial officer of the Company
(the “Adjustment Certificate”) (i) setting forth his or her best estimate of the
sum (such amount, as adjusted to reflect the Final Adjustment Certificate,
the
“Closing Adjustment Deductions”) of (A) the aggregate amount of fees, costs and
expenses, including Consent Costs, that the Company or any of its Subsidiaries
has paid after May 31, 2007, or that the Company or any of its Subsidiaries
would (without taking into account Section 5.7) be obligated to pay on or after
the date of the Adjustment Certificate, that the Shareholders are obligated
to
pay pursuant to Section 5.7, plus (B) the aggregate amount paid by the Company
after May 31, 2007, or that the Company or any of its Subsidiaries will be
obligated to pay on or after the date of the Adjustment Certificate, to any
Third Party in respect of Equity Interests in the Company (other than payments
made in accordance with (i) the Company’s Long Term Incentive Plan to holders of
stock appreciation rights issued in accordance therewith on or prior to the
date
of this Agreement, only to the extent such payments are based on a per-share
valuation of the Company Common Stock that is no greater than the Per Share
Purchase Price, or (ii) the Merger), in each case in this clause (i) together
with a worksheet showing in reasonable detail the components of such estimate,
and (ii) (A) affirming the representations and warranties set forth in Section
3.2(a) or (B) identifying in reasonable detail each respect in which the
representations and warranties set forth in Section 3.2(a) are
inaccurate. In the event that the Purchaser disagrees with any of the
items in the Adjustment Certificate, the Purchaser shall promptly notify the
Shareholders and the Company of such disagreements and the parties to this
Agreement shall cooperate and use reasonable best efforts to resolve any such
disagreements prior to the Closing and amend the Adjustment Certificate to
reflect any agreed changes thereto (as amended, if applicable, the “Final
Adjustment Certificate”); provided, however, that the failure of the parties to
resolve any such disagreements shall not relieve any party of its obligations
hereunder to effect the Closing.
(b) The
aggregate
amount to be paid for the Shares shall be the amount (the “Purchase Price”)
equal to (i) the number of issued and outstanding shares of Company Common
Stock
held beneficially and of record by the Shareholders immediately prior to the
Closing multiplied by (ii) the amount (the “Per Share Purchase Price”) equal to
(A) (1) ************ minus (2) the Closing Adjustment Deductions plus (3) the
Aggregate SARs Exercise Price divided by (B) the sum of (1) the number of shares
of Company Common Stock (including restricted stock, whether or not then vested)
issued and outstanding immediately prior to the Closing and (2) the number
of
shares of Company Common Stock issuable upon exercise, exchange, conversion
or
redemption of any Stock Awards issued after the date of this Agreement and
outstanding immediately prior to the Closing (whether or not such Stock Awards
are then vested, exercisable, exchangeable, convertible or redeemable, including
assuming that stock appreciation rights are exercisable (with no cashless
exercise option) for shares of Company Common Stock rather than
cash).
(c) On
the Closing
Date, the Purchaser shall pay to each Shareholder a portion of the Purchase
Price equal to the percentage set forth opposite such Shareholder’s name on
Exhibit 1.2(c), multiplied by the Purchase Price.
(d) For
the purposes of
this Agreement, “Aggregate SARs Exercise Price” shall mean the sum of cash
exercise prices that would be payable upon exercise in full of all Stock Awards
issued after the date of this Agreement and outstanding immediately prior to
the
Closing.
Section
1.3 Method
of
Payment. Each applicable payment under this Article I shall be
made in United States dollars when due by wire transfer of immediately available
funds to an account that the applicable Shareholder has designated to the
Purchaser.
ARTICLE
II.
REPRESENTATIONS
AND WARRANTIES REGARDING THE SHAREHOLDERS
Each
of the
Shareholders, severally and not jointly, represents and warrants as to itself
that, except as set forth in the disclosure schedule delivered by the
Shareholders to the Purchaser simultaneously with the execution of this
Agreement (the “Shareholder Disclosure Schedule”):
Section
2.1 Organization;
Standing. Shareholder is a corporation duly organized, validly
existing and in good standing under the Laws of its state of
incorporation. Such Shareholder has all requisite corporate power and
authority to own the Shares held by it.
Section
2.2 Authorization;
Noncontravention.
(a) Shareholder
has the
right, power, authority and capacity to execute and deliver this Agreement
and
to perform its obligations hereunder and to consummate the
Transactions. The execution, delivery and performance by Shareholder
of this Agreement and the consummation of the Transactions have been authorized
by all required action on the part of Shareholder and its board of
directors. This Agreement has been duly executed and delivered by
such Shareholder and constitutes a legal, valid and binding obligation of
Shareholder, enforceable against Shareholder in accordance with its terms,
except that such enforceability (i) may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar Laws of
general application affecting or relating to the enforcement of creditors’
rights generally, and (ii) is subject to general principles of equity, whether
considered in a proceeding at Law or in equity (the “Bankruptcy and Equity
Exception”).
(b) Neither
the
execution and delivery of this Agreement by Shareholder, nor the consummation
by
Shareholder of the Transactions applicable to it, nor compliance by Shareholder
with any of the terms or provisions hereof, will (i) conflict with or violate
any provision of the certificate of incorporation or bylaws of Shareholder,
(ii)
violate any Law, judgment, writ or injunction of any Governmental Authority
applicable to Shareholder, (iii) constitute a breach of the terms, conditions
or
provisions of any Contract to which Shareholder is a party or to which the
Shares are subject, or (iv) result in the imposition of a Lien on any of the
Shares, except, in the case of clauses (ii), (iii) and (iv), for such violations
or defaults as would not reasonably be expected, individually or in the
aggregate, to impair in any material respect the ability of Shareholder to
perform its obligations hereunder or prevent or materially delay consummation
of
the Transactions applicable to it.
Section
2.3 Governmental
Approvals. Except for filings required under, and compliance with
other applicable requirements of, the HSR Act, no consents or approvals of,
or
filings, declarations or registrations with, any Governmental Authority are
necessary for the execution, delivery and performance of this Agreement by
Shareholder or the consummation by Shareholder of the Transactions applicable
to
it, other than such other consents, approvals, filings, declarations or
registrations that, if not obtained, made or given, would not reasonably be
expected, individually or in the aggregate, to impair in any material respect
the ability of Shareholder to perform its obligations hereunder or prevent
or
materially delay consummation of the Transactions applicable to it.
Section
2.4 Ownership
of
Equity. Shareholder (i) has good and valid title to and
beneficial ownership of the number of shares of Company Class A Common Stock
and
Company Class C Common Stock set forth opposite Shareholder’s name on Section
2.4 of the Shareholder Disclosure Schedule free and clear of all liens, pledges,
security interests, mortgages, charges, rights of first offer or refusal,
options to purchase or other rights to acquire, assignments and encumbrances
(“Liens”), (ii) has not granted any option, warrant, subscription, call,
commitment or other right in or to any of such Shares, and (iii) is not a party
to any voting trust, voting agreement, or shareholder agreement with respect
to
such Shares.
Section
2.5 Legal
Proceedings. There are no suits, actions, claims, proceedings or
investigations pending or, to the Knowledge of Shareholder, threatened against,
relating to or involving Shareholder which would reasonably be expected,
individually or in the aggregate, to impair in any material respect the ability
of Shareholder to perform its obligations hereunder or prevent or materially
delay the consummation of the Transactions applicable to
Shareholder.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES REGARDING THE COMPANY
The
Company and, to
the Knowledge of each such Shareholder, each of the Shareholders represents
and
warrants to the Purchaser that, except as set forth in the disclosure schedule
delivered by the Company to the Purchaser simultaneously with the execution
of
this Agreement (the “Company Disclosure Schedule”):
Section
3.1 Organization,
Standing and Corporate Power.
(a) The
Company is a
corporation duly organized, validly existing and in good standing under the
Laws
of the State of Delaware and has all requisite corporate power and authority
necessary to own, lease and operate all of its properties and assets and to
carry on its business as it is now being conducted. The Company is
duly licensed or qualified to do business and is in good standing in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed, qualified or in good standing would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect. The Shareholders have previously made available to the
Purchaser copies of the certificate of incorporation and bylaws of the Company
(the “Company Charter Documents”), which copies are correct and complete
(including as to any amendments) as of the date hereof.
(b) Section
3.1(b) of
the Company Disclosure Schedule lists each Subsidiary of the
Company. Each of the Company’s Subsidiaries is duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its
organization. Each of the Company’s Subsidiaries has all requisite
corporate power and authority necessary to own, lease and operate its properties
and assets and to carry on its business as currently conducted. Each
Subsidiary of the Company is duly licensed or qualified to do business and
is in
good standing in each jurisdiction in which the nature of the business conducted
by it or the character or location of the properties and assets owned or leased
by it makes such licensing or qualification necessary, except where the failure
to be so licensed, qualified or in good standing (or equivalent status) would
not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect. The Shareholders have previously made available to
the Purchaser copies of the organizational documents of each Subsidiary, which
copies are correct and complete (including as to any amendments) as of the
date
hereof. All the outstanding shares of capital stock of, or other
Equity Interests in, each Subsidiary of the Company are owned of record and
beneficially, directly or (as set forth on Section 3.1(b) of the Company
Disclosure Schedule) indirectly, by the Company free and clear of
Liens. The shares of capital stock of, or other Equity Interests in,
each Subsidiary of the Company are duly authorized and validly issued and are
fully paid, nonassessable and free of preemptive rights. Other than
capital stock of, or other Equity Interests in, a Subsidiary as set forth in,
or
as otherwise set forth in, Section 3.1(b) of the Company Disclosure Schedule,
neither the Company nor any of its Subsidiaries owns, directly or indirectly,
any capital stock or other Equity Interest in any corporation, limited liability
company, partnership, joint venture or other business association or
entity. There are no outstanding options, warrants, conversion
rights, rights of exchange, convertible or exchangeable securities or other
rights to acquire or receive any shares of capital stock of, or Equity Interests
in, any Subsidiary of the Company and there are no commitments, agreements
or
other obligations providing for the issuance of additional Equity Interests
(or
sale of treasury shares) of any Subsidiary of the Company, or for the repurchase
or redemption of any Equity Interests of any Subsidiary of the
Company. Neither the Company nor any of its Subsidiaries is party to
any voting trust, voting agreement, or shareholder agreement with respect to
the
shares of capital stock of, or other Equity Interests in, the Subsidiaries
of
the Company.
Section
3.2 Capitalization.
(a) The
authorized
capital stock of the Company consists of 12,497,500 shares of Company Class
A
Common Stock, par value $.01 per share (“Company Class A Stock”), 2,500 shares
of Company Class B Common Stock, par value $.01 per share (“Company Class B
Stock”), 12,500,000 shares of Company Class C Common Stock, par value $.01 per
share (“Company Class C Stock”), and 100,000 shares of Preferred Stock, par
value $0.01 per share (“Company Preferred Stock”), of which (i) 7,878,750 shares
of Company Class A Stock are issued and outstanding and 3,744,500 shares of
Company Class A Stock are held by the Company in its treasury, (ii) 1 share
of
Company Class B Stock is issued and outstanding and 500 shares of Company Class
B Stock are held by the Company in its treasury, and (iii) 850,358 shares of
Company Class C Stock are issued and outstanding and 900,256 shares of Company
Class C Stock were held by the Company in its treasury. No shares of
Company Preferred Stock are issued and outstanding or held by the Company in
its
treasury. Except as set forth in the Company Charter Documents, there
are no outstanding options, warrants, conversion rights, rights of exchange,
convertible or exchangeable securities or other rights to acquire or receive
any
shares of capital stock of, or other Equity Interests in, the Company, and
there
are no commitments, agreements or other obligations providing for the issuance
of additional Equity Interests (or sale of treasury shares) of the Company,
or
for the repurchase or redemption of any Equity Interests of the
Company. All of the issued and outstanding shares of capital stock
of, or other Equity Interests in, the Company are held of record by the Persons
and in the amounts set forth in Section 3.2(a) of the Company Disclosure
Schedule. All outstanding shares of Company Common Stock have been
duly authorized and validly issued and are fully paid, nonassessable and free
of
preemptive rights. Section 3.2(a) of the Company Disclosure Schedule
sets forth the outstanding or authorized stock option, stock appreciation,
restricted stock, phantom stock and stock plan awards or similar rights with
respect to the Company (collectively, the “Stock Awards”), including, as
applicable, the recipient of the award, exercise xxxxx, xxxxx date, vesting
schedule, and number of shares subject to such award. The Company is
not party to any voting trust, voting agreement or shareholder agreement with
respect to the shares of capital stock of, or other Equity Interests in, the
Company. At the Closing, the Final Adjustment Certificate shall be
accurate and complete in all respects with respect to the matters set forth
in
this Section 3.2(a).
(b) Section
3.2(b) of
the Company Disclosure Schedule sets forth, with respect to each Stock Award,
whether such Stock Award is subject to Section 409A of the Code and whether
the
recipient of such Stock Award made an election pursuant to Section 83(b) of
the
Code with respect thereto.
Section
3.3 Authorization
Noncontravention.
(a) The
Company has all
requisite corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the
Transactions. The execution, delivery and performance by the Company
of this Agreement and the consummation of the Transactions have been authorized
by all required action on the part of the Company. This Agreement has
been duly executed and delivered by the Company and constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to the Bankruptcy and Equity
Exception.
(b) Neither
the
execution and delivery of this Agreement by the Company or the Shareholders
nor
the consummation by the Shareholders and the Company of the Transactions, nor
compliance by the Shareholders and the Company with any of the terms or
provisions hereof, will (i) conflict with or violate any provision of the
Company Charter Documents or the organizational documents of any Subsidiary
of
the Company or, to the Knowledge of the Company, any Joint Venture, (ii) violate
any Law, judgment, writ or injunction of any Governmental Authority applicable
to the Company, any of its Subsidiaries or, to the Knowledge of the Company,
any
Joint Venture (iii) violate or (with or without notice or lapse of time or
both)
constitute a default (or give rise to any right of termination, cancellation
or
acceleration, or loss of any material benefit) under any of the terms,
conditions or provisions of any Contract to which the Company, any of its
Subsidiaries or, to the Knowledge of the Company, any Joint Venture is a party,
or (iv) result in the imposition of a Lien on any assets of the Company or
its
Subsidiaries, except in the case of clauses (ii), (iii) and (iv), for such
violations, defaults, or Liens as would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect.
(c) The
Company has
delivered to the Purchaser correct and complete copies of (i) the Certificate
Amendment, certified by the Secretary of State of the State of Delaware, (ii)
the approvals of such Certificate Amendment by the Board of Directors and the
stockholders of the Company, certified by the Secretary of the Company, and
(iii) the approval of the Transactions by the Special Committee and the Board
of
Directors, certified by the Secretary of the Company.
Section
3.4 Governmental
Approvals. Except for filings required under, and compliance with
other applicable requirements of, the HSR Act and as set forth on Section 3.4
of
the Company Disclosure Schedule, no material consents or approvals of, or
filings, declarations or registrations with, any Governmental Authority are
necessary for the execution and delivery of this Agreement by the Company and
the consummation by the Company of the Transactions.
Section
3.5 Financial
Statements; Undisclosed Liabilities. (a) Correct and
complete copies of the Financial Statements have been made available to the
Purchaser. The Financial Statements have been prepared in accordance
with GAAP applied on a consistent basis during the periods involved (subject,
in
the case of unaudited financial statements, to (i) normal, recurring year-end
audit adjustments, and (ii) the absence of footnotes). The Financial
Statements fairly present, in all material respects, the consolidated financial
position, results of operations, cash flows and changes in stockholders’ equity
of the Company and its Subsidiaries as of the dates thereof and for the periods
then ended (subject, in the case of unaudited interim statements, to
(A) normal, recurring year-end audit adjustments, and (B) the absence
of footnotes).
(b) Neither
the Company
nor any of its Subsidiaries has any liabilities which, if known, would be
required to be reflected or reserved against on a consolidated balance sheet
of
the Company prepared in accordance with GAAP or the footnotes thereto, except
liabilities (i) reflected or reserved against on the balance sheet of the
Company and its Subsidiaries as of May 31, 2007 (the “Balance Sheet Date”), (ii)
incurred after the Balance Sheet Date in the ordinary course of business
consistent with past practices, (iii) as contemplated by this Agreement or
otherwise in connection with the Transactions, or (iv) as would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect.
(c) As
of May 31, 2007,
the amount equal to (i) the aggregate consolidated Indebtedness of the Company
and its Subsidiaries of a type required to be reflected on a balance sheet
prepared in accordance with GAAP, minus (ii) the aggregate consolidated cash
and
cash equivalents held by the Company and its Subsidiaries, calculated in
accordance with GAAP in a manner consistent with the preparation of the most
recent audited balance sheet included in the Financial Statements (to the extent
not inconsistent with GAAP (“Net Indebtedness”), was equal to
$150,000,000.
Section
3.6 Absence
of
Certain Changes.
(a) Since
the Balance
Sheet Date, (i) the Company and each of its Subsidiaries has carried on and
operated its businesses in all material respects in the ordinary course of
business consistent with past practices and (ii) there has not been, and no
change, event, effect or occurrence has taken place that would reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect.
(b) Since
the Balance
Sheet Date, neither the Company nor any of its Subsidiaries has:
(i) (A)
redeemed,
purchased or otherwise acquired any of its outstanding Equity Interests, or
any
rights, warrants or options to acquire any Equity Interests; or (B) declared,
set aside for payment or paid any dividend on, or made any other distribution
in
respect of, any Equity Interests;
(ii) sold
or otherwise
disposed of any of its material properties or assets, except (A) (1) sales,
leases, and rentals of inventory, (2) non-exclusive licenses in connection
therewith and (3) sale-leaseback transactions in connection with the “Airports”
business, in each case in the ordinary course of business consistent with past
practices, (B) pursuant to Contracts in force on the date of this Agreement
and
set forth in the Company Disclosure Schedule, (C) dispositions of obsolete
assets or (D) transfers among the Company and its wholly-owned
Subsidiaries;
(iii) increased
in any
material respect the salary, benefits, bonuses or other compensation of any
of
its current or former directors, consultants, officers or employees, other
than
(A) as required pursuant to applicable Law or the terms of Contracts in effect
on the date of this Agreement and set forth in the Company Disclosure Schedule;
or (B) increases in salaries, wages and benefits of employees made in the
ordinary course of business consistent with past practices;
(iv) (A)
exercised any
discretion to accelerate the vesting or payment of any compensation or benefit
under any Company Plan; (B) paid any transaction-related bonuses, severance
or
other similar amounts to employees of the Company, its Subsidiaries, the
Shareholders or any of their respective Affiliates; or (C) granted any new
awards under any Company Plan;
(v) made
any material
changes in financial or tax accounting methods, principles or practices (or
changed an annual accounting period), including a change in the methods,
principles or practices related to the revaluing of any assets or writing off
receivables or reserves;
(vi) adopted
a plan or
agreement of complete or partial liquidation or dissolution;
(vii) entered
into any
new material line of business;
(viii) made
any
acquisition of or material investment in any other business or Person, by
purchase or other acquisition of Equity Interests, by merger, consolidation,
asset purchase or other business combination, or by formation of any joint
venture or other business organization or by contributions to
capital;
(ix) settled
or
compromised any Action that is material to the Company and its Subsidiaries
(taken as a whole);
(x) entered
into any
agreement in respect of Taxes, changed or made any Tax elections (unless
required by applicable Law), filed any material amended Tax Return, settled
or
compromised any material Tax liability or consented to any extension or waiver
of the limitation period applicable to any claim or assessment in respect of
Taxes;
(xi) made
any material
capital expenditures other than in the ordinary course of business consistent
with past practice or in accordance with the Company’s current capital
expenditure budget disclosed to the Purchaser prior to the date
hereof;
(xii) incurred,
created
or become liable for any Indebtedness (A) of the type described in clauses
(i),
(ii), (v), (with respect to interest rate swap obligations) (vii), or (with
respect to any of the foregoing) (viii) of the definition thereof, other than
Credit Facility Indebtedness (and interest rate swap obligations in connection
therewith under Contracts in effect on the date of this Agreement and set forth
in the Company Disclosure Schedule); or (B) any material Indebtedness of any
other type other than in the ordinary course of business consistent with past
practice;
(xiii) forgiven
or waived
any material Indebtedness outstanding against a Third Party;
(xiv) made
any material
loans or advances to, or investments in, any Third Party;
(xv) entered
into any
material transaction with any Third Party other than on arm’s length terms, to
the extent the amount received or paid by the Company or any of its Subsidiaries
is less than or exceeds, respectively, the amount which would be received or
paid if at arm’s-length, including, without limitation, the forgiveness of any
material claims against Third Parties not on an arm’s-length basis;
(xvi) made
any material
gift or other material gratuitous payment out of the ordinary course of
business; or
(xvii) entered
into any
Contract pursuant to which, in connection with a Third Party providing surety
bonds, performance guarantees or any similar obligations for the benefit of
the
Company or any of its Subsidiaries, such Third Party (A) is entitled to be
provided with any material assets of the Company or any of its Subsidiaries
as
collateral or (B) is expressly entitled to provide or withhold its consent
to a
change of control of the Company or its Subsidiaries (or as a result of such
a
change of control, the Third Party would be entitled to terminate or modify
such
Contract); or
(xviii) agreed
to take any
of the foregoing actions.
Section
3.7 Legal
Proceedings. There is no pending or, to the Knowledge of the
Company, threatened, legal, administrative or arbitral proceeding, claim, suit,
investigation or action (“Action”) against the Company or any of its
Subsidiaries, nor is there any Governmental Order, imposed upon the Company,
any
of its Subsidiaries, to the Knowledge of the Company, any Joint Venture, or
any
of their respective assets or directors or officers (in their capacity as such)
that would reasonably be expected, individually or in the aggregate, to have
a
Material Adverse Effect.
Section
3.8 Compliance
With
Laws; Permits.
(a) The
Company and its
Subsidiaries and, to the Knowledge of the Company, the Joint Ventures are and
during the past eighteen (18) months have been in compliance with all laws
(including common law), statutes, ordinances, codes, rules, regulations and
Governmental Orders of Governmental Authorities (collectively, “Laws”)
applicable to the Company, any of its Subsidiaries or any Joint Venture, except
for such non-compliance as would not reasonably be expected, individually or
in
the aggregate, to have a Material Adverse Effect. During the past
eighteen (18) months, except as would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect, neither the Company
nor
any of its Subsidiaries nor, to the Knowledge of the Company, any Joint Venture
has received or been subject to any written notice, charge, claim or assertion
alleging any violations of Laws or Permits and, to the Knowledge of the Company,
no charge, claim or assertion of any violation of any law or Permit by the
Company, any of its Subsidiaries or any Joint Venture is threatened against
the
Company, any of its Subsidiaries or any Joint Venture.
(b) The
Company and
each of its Subsidiaries hold all licenses, franchises, permits, certificates,
approvals and authorizations from Governmental Authorities necessary for the
lawful conduct of their respective businesses (collectively, “Permits”), except
where the failure to hold the same would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect. Section 3.8(b) of the Company Disclosure Schedule sets forth
the correct and complete list of (i) all material Permits issued by the Federal
Communications Commission and (ii) the jurisdictions outside of the United
States in which the Company or a Subsidiary holds material Permits with respect
to communications matters (the “Material Non-US Communications Permits”) and the
current status of such Permits. All Permits are in full force and
effect and there are no proceedings pending or, to the Knowledge of the Company,
threatened, that seek the revocation, cancellation, suspension or adverse
modification of any such Permit, except as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect. The Company and its Subsidiaries are in compliance with the
terms of all Permits, except for such non-compliance as would not reasonably
be
expected, individually or in the aggregate, to have a Material Adverse
Effect.
(c) The
Material Non-US
Communications Permits are in full force and effect.
Section
3.9 Tax
Matters. Except for those matters that would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect:
(i) each of the Company and its Subsidiaries has timely filed, or has caused
to
be timely filed on its behalf (taking into account any extension of time within
which to file), all Tax Returns (as hereinafter defined) required to be filed
by
it, and all such filed Tax Returns are correct and complete in all respects;
(ii) all Taxes of the Company and its Subsidiaries have been or will be timely
paid, except to the extent that such Taxes are being contested in good faith
and
for which the Company or the appropriate Subsidiary has set aside adequate
reserves in accordance with GAAP; (iii) without taking into account the
Transactions and based upon activities to date, adequate reserves in accordance
with GAAP have been established by the Company and its Subsidiaries for all
Taxes not yet due and payable in respect of taxable periods ending on the date
hereof; (iv) no deficiency with respect to Taxes has been proposed, asserted
or
assessed against the Company or any of its Subsidiaries which have not been
fully paid or adequately reserved in the Financial Statements; and (v) no audit
or other administrative or court proceedings are pending, or to the Knowledge
of
the Company, threatened by any Governmental Authority with respect to Taxes
of
the Company or any of its Subsidiaries and no written notice thereof has been
received; (vi) all amounts of Tax required to be withheld by the Company or
any
of its Subsidiaries have been or will be timely withheld and paid over to the
appropriate Tax authority; (vii) neither the Company nor any of its Subsidiaries
has been a member of an affiliated group filing a consolidated federal income
tax return (other than a group the common parent of which was the Company)
or
has any liability for the Taxes of any Person (other than the Company or any
of
its Subsidiaries) under Treasury regulation section 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee, successor, by
contract or otherwise; (viii) neither the Company nor any of its Subsidiaries
is
required to make any disclosure to the Internal Revenue Service with respect
to
a “listed transaction” pursuant to Section 1.6011-4(b)(2) of the Treasury
Regulations promulgated under the Code; and (ix) neither the Company nor any
of
its Subsidiaries has distributed the stock of another company in a transaction
that was purported or intended to be governed by section 355 or section 361
of
the Code. This Section 3.9 includes the sole and exclusive
representations and warranties of the Shareholders relating to Tax matters,
including compliance with Laws relating thereto.
Section
3.10 Employee
Benefits and Labor Matters.
(a) Section
3.10 of the
Company Disclosure Schedule lists (i) all material “employee benefit plans” (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”)), and (ii) all material employment, retention and severance
plans and agreements and all bonus, incentive compensation, stock purchase,
equity or equity based compensation, deferred compensation, change in control,
vacation, salary continuation, life insurance plans and employee benefit plans,
arrangements, policies and agreements (whether written or unwritten) (A)
maintained, contributed to or required to be contributed to, within the prior
six years, by the Company, any of its Subsidiaries, or any ERISA Affiliate,
and
(B) with respect to which the Company or any of its Subsidiaries may have any
obligation or liability, contingent or otherwise (collectively, the “Company
Plans”). Section 3.10 of the Company Disclosure Schedule identifies
any Company Plan that is not subject to the Laws of the United States (each,
a
“Foreign Company Plan”), and no such Foreign Company Plan is a defined benefit
pension plan.
(b) The
Company has
made available to Purchaser a correct and complete set of copies of (i) all
Company Plans and related trust agreements, annuity contracts or other funding
instruments, (ii) the latest IRS determination or opinion letter obtained with
respect to any Company Plan qualified or exempt under Section 401 or 501 of
the
Code, as applicable, or analogous ruling under foreign law with respect to
each
Foreign Company Plan, (iii) Forms 5500 and certified financial statements (and
in relation to the Foreign Company Plans, financial statements as filed with
the
applicable Governmental Authority) for the most recently completed fiscal year
for each Company Plan, together with the most recent actuarial report, if any,
prepared by the Company Plan’s enrolled actuary, and (iv) the current summary
plan descriptions for each Company Plan.
(c) Except
as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect: (a) each Company Plan has been maintained in accordance with
its
terms and in compliance with the applicable provisions of ERISA, the Code and
all other applicable Laws; and (b) all contributions, premiums and benefit
payments under or in connection with the Company Plans that are required to
have
been made as of the date hereof in accordance with the terms of the Company
Plans have been timely made. Each Company Plan that is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter to such effect and no events have occurred since the date of the most
recent determination letter or application therefor relating to any such Company
Plan that would cause the loss of such qualification which would reasonably
be
expected, individually or in the aggregate, to have a Material Adverse
Effect. None of the Company Plans is subject to Title IV of ERISA or
Section 412 of the Code or is a multiemployer plan described in Section 3(37)
of
ERISA, and neither the Company nor any its Subsidiaries has ever maintained,
contributed to, participated or agreed to participate in any such Company Plan,
or has or could have any liability under Title IV of ERISA in respect of any
Company Plan. In the past two years there has been no “reportable
event” (as defined in Section 4043(b) of ERISA and the Pension Benefit Guaranty
Corporation (the “PBGC”) regulations under such Section) with respect to any
Company Plan and no analogous event under applicable foreign
Law. Except as would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect, as of the date of the most
recently completed actuarial valuation of such plan, the “amount of unfunded
benefit liabilities” (as defined in Section 4001(a)(18) of ERISA) of each
Company Plan that is an “employee pension benefit plan” (as described in Section
3(2) of ERISA) (but excluding from the definition of “current value”
or “assets” of such plan accrued but unpaid contributions) and did not exceed
zero. None of the Company, its Subsidiaries, or any fiduciary of any
Company Plan, has any material liability with respect to any transaction in
violation of Sections 404 or 406 of ERISA or any “prohibited transaction,” as
defined in Section 4975(c)(1) of the Code, for which no exemption exists under
Section 408 of ERISA or Section 4975(c)(2) or (d) of the Code. There
are no and have not been in the past two years any representation questions,
strikes, work slowdowns, work stoppages, lockouts, arbitrations, grievances,
unfair labor practice charges or complaints pending or, to the Knowledge of
the
Shareholders, threatened with respect to the Company or any of its Subsidiaries
that, individually or in the aggregate, would reasonably be expected to have
a
Material Adverse Effect. Neither the Company nor any of the
Subsidiaries is a party to any labor or collective bargaining agreement, and,
to
the Knowledge of the Shareholders, there has been no attempt to organize the
employees of the Company or any of its Subsidiaries in the past two
years. Except as would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect, each of the Company and its
Subsidiaries has complied in all material respects with all Laws relating to
employment, equal employment opportunity, nondiscrimination, immigration, wages,
hours, benefits, collective bargaining the payment of employment Taxes,
occupational safety and health and plant closings. Neither the
execution and delivery of this Agreement nor the consummation of the
Transactions will (whether alone or in connection with any other event) (x)
result in the forgiveness of indebtedness or the acceleration or creation of
any
rights or payment, or increase the amount of any compensation due, to any
current or former employee, director or consultant of the Company or its
Subsidiaries, or (y) result in any material benefits under any Company
Plan; each case excluding any rights, payments or benefits under any employee
benefit plan subject to ERISA.
(d) No
Company Plan
provides or reflects any liability to provide post-termination or retiree
welfare benefits to any person, except as may be required by COBRA or other
applicable statute, and none of the Company, its Subsidiaries, or any ERISA
Affiliate has ever represented, promised or contracted (whether in oral or
written form) to any current or former employee, director or consultant of
the
Company or any of its Subsidiaries or any of their dependents that such person
would be provided with post-termination or retiree welfare benefits, except
to
the extent required by statute.
(e) None
of the
Company, its Subsidiaries, or any ERISA Affiliate, has made any payment, is
obligated to make any payment, or is a party to any agreement or agreements
that, individually or collectively, provide for the payment by any of the
Company, its Subsidiaries or any ERISA Affiliate to any employee, director
or
consultant of the Company or any of its Subsidiaries of any amount that may
be
an “excess parachute payment” under Section 280G of the Code or non-deductible
under Section 280G of the Code. This Section 3.10 includes the sole
and exclusive representations and warranties relating to employee benefit and
labor matters, including compliance with Laws relating thereto.
Section
3.11 Environmental
Matters. Except for those matters that would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect,
(a) each of the Company and its Subsidiaries is in compliance with, and holds
all Permits required under, all applicable Environmental Laws, (b) there is
no
investigation, suit, claim, action or proceeding relating to or arising under
Environmental Laws that is pending or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries or any real property
owned, operated or leased by the Company or any of its Subsidiaries, (c) neither
the Company nor any of its Subsidiaries has received any written notice of
or
entered into any order, settlement, judgment, injunction or decree involving
uncompleted, outstanding or unresolved obligations, liabilities or requirements
relating to or arising under Environmental Laws, (d) there have been no Releases
at or from any real property owned, operated or leased by the Company or any
of
its Subsidiaries that are reasonably likely to give rise to liabilities under
Environmental Laws; and (e) neither the Company nor any of its Subsidiaries
are
liable for any Releases or cleanup of Hazardous Substances at any properties
formerly owned, leased or operated by the Company or any of its Subsidiaries,
or
with respect to any offsite waste disposal location used by the Company or
any
of its Subsidiaries. Correct and complete copies of all environmental
reports, including all Phase 1 and Phase 2 reports, in the possession or control
of the Shareholders, the Company or any of its Subsidiaries have been provided
to Purchaser. This Section 3.11 constitutes the sole and exclusive
representation and warranty of the Shareholders regarding environmental and
health and safety matters, including compliance with Laws relating
thereto.
Section
3.12 Properties.
(a) Section
3.12(a) of
the Company Disclosure Schedule contains a true and complete list of all real
property owned by the Company or any of its Subsidiaries (collectively, the
“Owned Real Property”) and, for each Owned Real Property, identifies the street
address thereof. The Shareholders have made available to the
Purchaser correct and complete copies of the most recent deeds, title reports
and title policies in its possession as of the date hereof with respect to
the
Owned Real Property
(b) Section
3.12(b) of
the Company Disclosure Schedule contains a true and complete list of
all material real property leased or subleased by the Company or any of its
Subsidiaries (collectively, including the improvements thereon, the “Leased Real
Property”), and for each Leased Real Property, identifies the street address of
such Leased Real Property. Correct and complete copies of all
Contracts pursuant to which the Company or any of its Subsidiaries occupies
or
uses any material Leased Real Property (“Real Property Leases”) that have not
been terminated or expired as of the date hereof have been made available to
the
Purchaser.
(c) Except
as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, the Company and/or its Subsidiaries have good and marketable
fee
simple title to all Owned Real Property and valid leasehold estates in all
Leased Real Property, in each case free and clear of all Liens, except Permitted
Liens.
(d) Except
as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, other than the Real Property Leases, none of the Owned Real
Property or the Leased Real Property is subject to any lease, sublease, license
or other agreement granting to any other Person any right to the use, occupancy
or enjoyment of such Owned Real Property or Leased Real Property or any part
thereof.
(e) Except
as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, each Real Property Lease is in full force and effect and
constitutes the valid and legally binding obligation of the Company or its
Subsidiaries, enforceable in accordance with its terms (subject to the
Bankruptcy and Equity Exception), and there is no material default under any
Real Property Lease either by the Company or its Subsidiaries party thereto
or,
to the Knowledge of the Company, by any other party thereto.
(f) Except
as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, there does not exist any pending condemnation or eminent domain
proceedings that affect any Owned Real Property or, to the Knowledge of the
Company, any such proceedings that affect any Leased Real Property or, to the
Knowledge of the Company, any threatened condemnation or eminent domain
proceedings that affect any Owned Real Property or Leased Real Property, and
neither the Company nor its Subsidiaries have received any written notice of
the
intention of any Governmental Authority or other Person to take or use any
Owned
Real Property or Leased Real Property.
(g) The
Company and its
Subsidiaries have (i) valid leasehold interests in (in the case of leasehold
interests in personal property) or (ii) good title to (in the case of all other
personal property), all of the personal property used or held for use by them
in
their respective businesses, free and clear of all Liens other than Permitted
Liens. All of such tangible personal property is in good condition
and repair, ordinary wear and tear excepted, and is usable in the ordinary
course of business of the Company and its Subsidiaries as conducted on the date
hereof.
(h) Except
as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, the personal property of the Company and its Subsidiaries
(including all tangible and intangible personal property, whether owned, leased
or licensed), together with the Owned Real Property and the Leased Real
Property, include all of the assets, properties and rights of every type and
description used by the Company or any of its Subsidiaries or their respective
business.
Section
3.13 Insurance. Section
3.13 of the Company Disclosure Schedule sets forth a list of all insurance
policies carried by or for the benefit of the Company and its Subsidiaries
specifying the insurer, the nature of coverage, and the date through which
coverage is scheduled to continue pursuant to the terms
thereof. Correct and complete copies of all material insurance
policies have been made available to the Purchaser. All such
insurance policies are, to the Knowledge of the Company, in full force and
effect, all premiums that are due with respect thereto have been or will be
timely paid, no written notice of cancellation or termination has been received
by the Company with respect to any such policy or other form of insurance,
such
policies will not terminate or lapse by reason of this Agreement and the
consummation of the Transactions and the Company and its Subsidiaries are in
material compliance with the terms of such policies (taken as a
whole). None of the Company or any of its Subsidiaries is in default
in any material respect with respect to their obligations under any such
insurance policies. There is no material claim pending by the Company
or any of its Subsidiaries under any such policy as to which coverage has been
denied or disputed in writing by any underwriter of such
policy.
Section
3.14 Intellectual
Property.
(a) The
Company and/or
each of its Subsidiaries owns or has the right to use all (i) trademarks,
service marks, trade names, Internet domain names, and all goodwill associated
therewith and symbolized thereby, and registrations and applications therefor,
including renewals; (ii) inventions and discoveries, whether patentable or
not,
and all patents, registrations, and applications therefor, including divisions,
continuations, continuations-in-part and reissues; (iii) published and
unpublished works of authorship, whether copyrightable or not, including
computer software programs, applications, source code and object code, and
databases and other compilations of information, copyrights in and to the
foregoing, including extensions, renewals, and restorations, and registrations
and applications therefor; and (iv) confidential and/or proprietary information,
trade secrets and know-how, including processes, schematics, technical data,
business methods, formulae, drawings, prototypes, models, designs, customer
lists and supplier lists and any other intellectual property rights ((i) through
(iv) collectively being referred to as “IP Rights”) that are used or held for
use in the conduct of the business of the Company and its Subsidiaries as
currently conducted, except for any such failures to own or have the right
to
use that would not reasonably be expected, individually or in the aggregate,
to
have a Material Adverse Effect. Section 3.14(a) of the Company
Disclosure Schedule sets forth a correct and complete list as of the date hereof
of all of the following IP Rights owned by the Company or any of its
Subsidiaries that are the subject of an application, filing or registration
filed or recorded with a Governmental Authority: (A) United States and foreign
patents and patent applications, (B) trademarks and service marks, and
applications to register trademarks and service marks, (C) domain names and
(D)
copyrights, and applications to register copyrights, and, in each case, the
Company is the sole owner of, and possesses all right, title and interest in
and
to, such IP Rights, free and clear of all Liens (other than Permitted
Liens).
(b) Except
as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect:
(i) neither
the Company
nor any of its Subsidiaries has received written notice of any claims (A) that
the conduct of the business of the Company and its Subsidiaries as currently
conducted infringes or otherwise violates any IP Rights of any Person; (B)
against the use by the Company or any of its Subsidiaries of any IP Right used
in the business of the Company or any of its Subsidiaries as currently
conducted; (C) challenging the ownership, validity or enforceability of any
of
the IP Rights owned by the Company, any of its Subsidiaries (collectively,
the
“Company IP Rights”) or any IP Rights owned or held by Third Parties
(collectively, the “Third-Party IP Rights”) licensed to the Company or any of
its Subsidiaries or (D) challenging the right to use of any Third-Party IP
Rights held by the Company or any of its Subsidiaries;
(ii) (A)
to the
Knowledge of the Company, there is no unauthorized use, infringement or other
violation of any of the Company IP Rights or any Third-Party IP Rights by any
Person; and (B) to the Knowledge of the Company, the conduct of the businesses
of the Company and its Subsidiaries does not infringe, misappropriate or
otherwise violate the IP Rights of any other Person; and
(iii) all
Company IP
Rights and Third-Party IP Rights are valid and enforceable.
Section
3.15 Contracts.
(a) Neither
the Company
nor any of its Subsidiaries nor, to the Knowledge of the Company and solely
with
respect to clauses (iii) and (xvi), any Joint Venture is a party to or bound
by
any: (i) Contract that purports to limit in any material respect either the
type
of business in which the Company or its Subsidiaries may engage or the manner
or
locations in which, or the Persons with or in competition with which, any of
them may engage in any business; (ii) Contract which creates or governs a
partnership, limited liability company, joint venture, or material alliance,
joint development or similar material arrangement; (iii) indenture, mortgage,
currency exchange, commodities or other hedging arrangement, credit agreement,
loan agreement, guarantee, other contract for the borrowing of money, note
or
other evidence of Indebtedness or Contract relating to (including any guarantee
of) Indebtedness; (iv) employment, severance or change-in-control Contract
with
any director, officer or key employee; (v) customer Contract (other than a
Government Contract) (A) which provides for total funded value to one or more
of
the Company or its Subsidiaries in excess of $5,000,000 or (B) for the provision
of GLOBALink services which is expected to provide for payments to one or more
of the Company or its Subsidiaries in excess of $500,000 in the twelve (12)-
month period ending December 31, 2007; (vi) supplier Contract which provided
for
payments by one or more of the Company or its Subsidiaries (A) in excess of
$5,000,000 in the aggregate for the twelve (12) month period ended December
31,
2006 or (B) in excess of $1,400,000 in the aggregate for the five (5)-month
period ended May 31, 2007; (vii) Contract for the lease of real or personal
property in which the amount of payments which the Company or any of its
Subsidiaries is required to make on an annual basis exceeds $1,000,000; (viii)
material distribution, franchise, license, sales commission, consulting, agency,
marketing or advertising Contract that involves aggregate payments in excess
of
$5,000,000; (ix) Contract with “take or pay” provisions, or “requirements”
provisions committing the Company or any of its Subsidiaries to provide the
quantity of goods or services required by another Person; (x) Contract with
any
Shareholder or any Affiliate of the Company (other than a Subsidiary of the
Company) or any Shareholders; (xi) license for the use of any material IP
Rights; (xii) Contract (A) providing for the purchase or sale of any business,
business unit or Person for consideration in excess of $1,000,000 and (B) under
which the Company or any of its Subsidiaries has any continuing material
obligation; (xiii) Contract for capital expenditures in excess of
$2,000,000 in the aggregate; (xiv) collective bargaining agreement; (xv)
Government Contract with a funded value in excess of $5,000,000; or (xvi) (A)
guarantee by the Company or any of its Subsidiaries of the obligations of any
Person other than the Company or any of its Subsidiaries, or (B) Contract
guaranteed by a guarantee described in clause (A); provided, that for the
purposes of determining whether any Contract meets a quantitative or other
materiality threshold set forth in this sentence, such Contract shall be
considered collectively with any series of substantially related Contracts
with
the same party. Each such Contract described in clauses (i)-(xvii),
and each Contract described in Appendix E to Section 3.15 of the Company
Disclosure Schedule, is referred to herein as a “Material
Contract”.
(b) All
Material
Contracts are legal, valid, binding and enforceable in accordance with their
respective terms with respect to the Company and its Subsidiaries and, to the
Knowledge of the Company, each other party to such Contracts. Except
as would not reasonably be expected, individually or in the aggregate, to have
a
Material Adverse Effect, (i) there is no existing default or breach of the
Company or any of its Subsidiaries under any Material Contract to which the
Company or a Subsidiary is a party (or event or condition that, with notice
or
lapse of time or both would constitute a default or breach), (ii) to the
Knowledge of the Company, there is no such default or breach (or event or
condition that, with notice or lapse of time or both, would constitute a default
or breach) with respect to any third party to any such Contract, and (iii)
none
of the Company or any of its Subsidiaries has received any written notice or
claim of default under any Material Contract. Except in the case of
(1) any Government Contract (A) the terms of which may not be disclosed to
the
Purchaser due to a required security clearance or Federal Acquisition
Regulations and (B) that is described on Schedule 3.15(b) as not having been
provided, and (2) Doha iMuse between Overseas Xxxxxxx, Inc., the Company and
the
other parties thereto (for which a correct and complete summary of the material
terms has been provided to the Purchaser), correct and complete copies of all
Material Contracts, including all amendments and supplements thereto (other
than
any task, purchase or delivery order pursuant to such Material Contract for
products or services with an aggregate price per order equal to or less than
$5,000,000), have been made available to Purchaser or its
representatives.
(c) Notwithstanding
the
foregoing, no employment agreement need be set forth in the Company Disclosure
Schedule or disclosed to the Purchaser, in each case pursuant to this Section
3.15, if such employment agreement (i) does not relate to an employee working
in
the United States, (ii) does not relate to an employee who is also a director
or
officer, (iii) is in all material respects in a form that is identified in
Section 3.15 of the Company Disclosure Schedule and a correct and complete
copy
of which has been made available to the Purchaser and its representatives,
and
(iv) does not provide any severance or notice period in excess of 90 days (other
than as required by applicable Laws).
Section
3.16 Affiliate
Matters. No Shareholder, officer or director of the Company or of
any of its Subsidiaries (a) is a party to any Contract with, or relating to,
the
Company, a Subsidiary or their respective businesses, or (b) has an interest
in
any material asset (whether real, personal or intangible) of the Company or
a
Subsidiary.
Section
3.17 Brokers
and
Other Advisors.
(a) Except
for Xxxxxxx,
Xxxxx & Co. and Evercore Group L.L.C. the fees and expenses of which paid or
payable after May 31, 2007 will be paid or reimbursed by the Shareholders,
no
broker, investment banker, financial advisor or other Person is entitled to
any
broker’s, finder’s, financial advisor’s or other similar fee or commission, or
the reimbursement of expenses, in connection with the Transactions based upon
arrangements made by or on behalf of the Shareholders, the Company or any of
its
Subsidiaries. A complete and correct copy of the agreements between
Xxxxxxx, Sachs & Co. and the Company and Evercore Group L.L.C. and the
Special Committee relating to the Transactions have been made available to
the
Purchaser.
(b) The
Special
Committee has received the opinion of Evercore Group L.L.C. to the effect that,
as of the date of this Agreement, the aggregate consideration to be received
in
connection with the Transactions is fair to the Company’s stockholders from a
financial point of view. The Board of Directors has received the
opinion of Xxxxxxx, Xxxxx & Co. to the effect that, as of the date of this
Agreement, the consideration to be received pursuant to Section 1.2 and Section
5.9 of this Agreement is fair in the aggregate to the Company’s stockholders
from a financial point of view.
Section
3.18 Relations
with
Governments.
(b) Except
as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, neither the Company nor any of its Subsidiaries nor, to the
Knowledge of the Company, any Joint Venture nor any of their respective
officers, directors, employees, agents or representatives acting on their
behalf, has made, directly or indirectly, any offer, payment or promise to
pay
any money, or to give any gift or anything else of value to any officer or
employee of any Governmental Authority or any department, agency or
instrumentality (including any state-owned enterprise, operating in a commercial
capacity or otherwise) thereof, or of a public international organization,
or
any person acting in an official capacity or on behalf of any such Governmental
Authority, department, agency or instrumentality (including any state-owned
enterprise, operating in a commercial capacity or otherwise) or for, or on
the
behalf of any such public international organization or any political party
or
official thereof or any candidate for political office, for the purpose of
influencing an official act or decision of that person, inducing that person
to
omit to do any act in violation of his or her lawful duty, securing any improper
advantage, or inducing that person to use his influence with such a Governmental
Authority or instrumentality to affect or influence any government act or
decision, in order to assist the Company, any of its Subsidiaries or any Joint
Venture in obtaining or retaining business.
(c) Except
as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, neither the Company nor any of its Subsidiaries nor, to the
Knowledge of the Company, any Joint Venture nor any of their respective
officers, directors, employees, agents or representatives acting on their
behalf, is or is acting for or on behalf of a Prohibited Person, and no
Prohibited Person is entitled to or will receive any portion of the proceeds
from this Transaction.
(d) Except
as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, the Company, each of its Subsidiaries and, to the Knowledge
of
the Company, each Joint Venture has accurately prepared and maintained all
records as required by applicable laws with respect to its business relating
to
the importation of articles.
(e) Except
as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, neither the Company nor any of its Subsidiaries nor, to the
Knowledge of the Company, any Joint Venture nor any of their respective
officers, directors, employees, agents or representatives acting on their
behalf, has received written notice of any audits, inquiries, investigations,
claims, notices or demands for duties, fines, penalties, seizures, forfeitures,
product redelivery, or liquidated damages by any Governmental Authority arising
out of any importation by or for the Company, any such Subsidiary or Joint
Venture or any such representative.
Section
3.19 Customers
and
Suppliers.
(a) Section
3.19(a) of
the Company Disclosure Schedule is a complete and correct list of the twenty
(20) largest suppliers to the Company, and its Subsidiaries by aggregate dollar
value of purchases during each of the most recently completed fiscal year and
the five-month period ended May 31, 2007. Since January 1, 2007,
except as would not reasonably be expected, individually or in the aggregate,
to
have a Material Adverse Effect, no such supplier has canceled or otherwise
terminated or materially and adversely modified, or to the Knowledge of the
Company, threatened to cancel or otherwise terminate or materially and adversely
modify, its relationship with the Company or any of its
Subsidiaries. To the Knowledge of the Company, neither the Company
nor any of its Subsidiaries has received any notice that any such supplier
intends to cancel or otherwise terminate or materially and adversely modify
its
relationship with the Company or any of its Subsidiaries on account of the
Transactions or otherwise, except for such modifications or terminations as
would not reasonably be expected, individually or in the aggregate, to have
a
Material Adverse Effect.
(b) Section
3.19(b) of
the Company Disclosure Schedule is a complete and correct list of the twenty
(20) largest customers of the Company and its Subsidiaries by aggregate dollar
value of sales during each of the most recently completed fiscal year and the
five-month period ended May 31, 2007. Since January 1, 2007, except
as would not reasonably be expected, individually or in the aggregate, to have
a
Material Adverse Effect, no such customer has canceled or otherwise terminated
or materially and adversely modified, or to the Knowledge of the Company,
threatened in writing to cancel or otherwise terminate or materially and
adversely modify, its relationship with the Company or any of its
Subsidiaries. To the Knowledge of the Company neither the Company nor
any of its Subsidiaries has received any notice that any such customer intends
to cancel or otherwise terminate or materially and adversely modify its
relationship with the Company or any of its Subsidiaries on account of the
Transactions or otherwise, except for such modifications or terminations as
would not reasonably be expected, individually or in the aggregate, to have
a
Material Adverse Effect.
Section
3.20 Government
Contracts. Except as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect:
(a) during
the past
three (3) years no material quantities of products delivered or services
performed by the Company or any of its Subsidiaries under any Government
Contract have been rejected by any Governmental Authority, or prime contractor
or subcontractor (at any tier) as not complying with contract specifications
or
requirements, and no termination for convenience, termination for default,
cure
notice or show cause notice has been issued and remains unresolved;
(b) no
material amount
due to the Company or any of its Subsidiaries has been withheld or set off
by or
on behalf of a Governmental Authority, or prime contractor or subcontractor
(at
any tier) with respect to any Government Contract;
(c) the
Company and
each of its Subsidiaries is in compliance with all obligations specified in
the
National Industrial Security Program Operating Manual, DOD 5220.22-M (January
1995);
(d) to
the Knowledge of
the Company, no employee of the Company, or any of its Subsidiaries is (or
during the last eighteen (18) months has been) under any administrative, civil
or criminal investigation or indictment by any Governmental Authority with
respect to the conduct of the business of the Company or any of its
Subsidiaries;
(e) to
the Knowledge of
the Company, there is no pending material investigation by a Governmental
Authority of the Company, any of its Subsidiaries, or any of its respective
officers, employees or representatives, nor within the last three (3) years
has
there been any material investigation by a Governmental Authority of the Company
or any of its Subsidiaries, or any of its respective officers, employees or
representatives resulting in any finding with respect to any alleged
irregularity, misstatement or omission arising under or relating to any
Government Contract or bid (other than routine audits);
(f) during
the last
three (3) years, except as set forth on Section 3.20 of the Disclosure Schedule,
neither the Company nor any of its Subsidiaries has made any voluntary
disclosure in writing to any Governmental Authority with respect to any material
alleged irregularity, misstatement or omission arising under or relating to
any
Government Contract or bid;
(g) since
January 1,
2001 neither the Company nor any Subsidiary has been suspended or debarred
from
bidding on contracts or subcontracts for or with any Governmental Authority;
and
(h) no
suspension or
debarment actions with respect any Government Contract have been commenced
or,
to the Knowledge of the Company, threatened in writing against the Company
or
any of its Subsidiaries or, to the Knowledge of the Company, any of their
respective officers, directors or employees.
ARTICLE
IV.
REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER
The
Purchaser
represents and warrants to the Shareholders that:
Section
4.1 Organization;
Standing. The Purchaser is a corporation duly organized, validly
existing and in good standing under the Laws of the State of
Delaware.
Section
4.2 Authority;
Noncontravention.
(a) The
Purchaser has
all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
Transactions. The execution, delivery and performance by the
Purchaser of this Agreement, and the consummation by the Purchaser of the
Transactions, have been duly authorized and approved by its Board of Directors,
and no other corporate action on the part of the Purchaser is necessary to
authorize the execution, delivery and performance by the Purchaser of this
Agreement and the consummation by it of the Transactions. This
Agreement has been duly executed and delivered by the Purchaser and constitutes
a legal, valid and binding obligation of the Purchaser, enforceable against
the
Purchaser in accordance with its terms, subject to the Bankruptcy and Equity
Exception.
(b) Neither
the
execution and delivery of this Agreement by the Purchaser, nor the consummation
by the Purchaser of the Transactions, nor compliance by the Purchaser with
any
of the terms or provisions hereof, will (i) conflict with or violate any
provision of the certificate of incorporation or bylaws of the Purchaser, (ii)
violate any Law, judgment, writ or injunction of any Governmental Authority
applicable to the Purchaser or any of its Subsidiaries, or (iii) constitute
a
breach of the terms, conditions or provisions of any Contract to which the
Purchaser, or any of its Subsidiaries is a party, except, in the case of clauses
(ii) and (iii), for such violations or defaults as would not reasonably be
expected, individually or in the aggregate, to impair in any material respect
the ability of the Purchaser to perform its obligations hereunder or prevent
or
materially delay consummation of the Transactions.
Section
4.3 Governmental
Approvals. Except for filings required under, and compliance with
other applicable requirements of, the HSR Act and the competition or antitrust
Laws of Governmental Authorities outside the United States listed on Schedule
4.3, and except for requirements of the Purchaser and its Affiliates in
connection with consents, approvals, filings, declarations or registrations
set
forth in Section 3.4 of the Company Disclosure Schedule, no consents or
approvals of, or filings, declarations or registrations with, any Governmental
Authority are necessary for the execution, delivery and performance of this
Agreement by the Purchaser or the consummation by the Purchaser of the
Transactions, other than such other consents, approvals, filings, declarations
or registrations that, if not obtained, made or given, would not reasonably
be
expected, individually or in the aggregate, to impair in any material respect
the ability of the Purchaser to perform its obligations hereunder or prevent
or
materially delay consummation of the Transactions.
Section
4.4 Capital
Resources.
(a) The
Purchaser has
received and accepted an executed commitment letter dated as of the date of
this
Agreement (the “Debt Commitment Letter”) from the lenders party thereto
(collectively, the “Lenders”) relating to the commitment of the Lenders to
provide debt financing (the “Debt Financing”) on the terms contemplated
thereby.
(b) The
Purchaser has
received and accepted executed commitment letters dated as of the date of this
Agreement (the “Equity Commitment Letters” and, together with the Debt
Commitment Letter, the “Commitment Letters”) from Carlyle Partners IV,
L.P. (the “Equity Investor”) relating to the commitment of the Equity
Investor to provide the full amount of the cash equity described therein (the
“Cash Equity”, and together with the Debt Financing, the
“Financing”), on the terms contemplated thereby. Complete and
correct copies of the executed Commitment Letters have been provided to the
Shareholders.
(c) Except
as expressly
set forth in the Commitment Letters, there are no conditions precedent to the
obligations of the Lenders and the Equity Investor to provide the Financing
or
any contingencies that would permit the Lenders or the Equity Investor to reduce
the total amount of the Financing.
(d) Subject
to its
terms and conditions, the Financing will provide the Purchaser with acquisition
financing on the Closing Date sufficient to consummate the Transactions on
the
terms contemplated by this Agreement and to pay related fees and
expenses.
(e) As
of the date of
this Agreement, the Commitment Letters are valid, binding and in full force
and
effect and no event has occurred that, with or without notice, lapse of time,
or
both, would reasonably be expected to constitute a default or breach or a
failure to satisfy a condition precedent on the part of the Purchaser under
the
terms and conditions of the Commitment Letters, other than any such default,
breach or failure that has been waived by the Lenders or the applicable Equity
Investor, as the case may be, or otherwise cured in a timely manner by the
Purchaser to the satisfaction of the Lenders or such Equity Investor, as the
case may be. The Purchaser has paid in full any and all commitment
fees or other fees required to be paid pursuant to the terms of the Commitment
Letters on or before the date of this Agreement.
Section
4.5 Brokers
and
Other Advisors. No broker, investment banker, financial advisor
or other Person is entitled to any broker’s, finder’s, financial advisor’s or
other similar fee or commission in connection with the Transactions based upon
arrangements made by or on behalf of the Purchaser or any of its
Subsidiaries.
Section
4.6 Ownership
of
Shares. Neither the Purchaser, nor any of its Affiliates owns
(directly or indirectly, beneficially or of record) any shares of Company Common
Stock and neither the Purchaser nor any of its Affiliates holds any rights
to
acquire shares of Company Common Stock except pursuant to this
Agreement.
Section
4.7 Investigation;
Acknowledgement. The Purchaser has conducted a thorough review
and analysis of the business, operations, assets, liabilities, results of
operations, financial condition, technology and prospects of the Company and
its
Subsidiaries and acknowledges that it has been provided adequate access to
the
personnel, properties, premises and records of the Company and its Subsidiaries
for such purpose. The Purchaser acknowledges and agrees that (a)
neither the Shareholders nor any Person on behalf of the Shareholders is making
any representations or warranties whatsoever, express or implied, beyond those
expressly given by the Shareholders in Articles II and III hereof, and (b)
the
Purchaser has not been induced by, or relied upon, any representations,
warranties or statements (written or oral), whether express or implied, made
by
any Person, that are not expressly set forth in Articles II or III of this
Agreement. Without limiting the generality of the foregoing, the
Purchaser acknowledges that no representations or warranties are made with
respect to any projections, forecasts, estimates, budgets or prospect
information that may have been made available to the Purchaser or any of its
representatives. Neither the Shareholders nor any other Person will
have or be subject to any liability or indemnification obligation to the
Purchaser or any other Person resulting from the distribution to the Purchaser,
or the Purchaser’s use of, any such information, including the Confidential
Memorandum, dated February 2007, related to the Company and its Subsidiaries
and
any information, documents or material made available to the Purchaser or its
representatives in certain “data rooms,” management presentations, functional
“break-out” discussions, responses to questions submitted on behalf of the
Purchaser, whether orally or in writing, or in any other form in expectation
or
furtherance of the transactions contemplated by this Agreement, nor has the
Purchaser relied on any such information; provided, however, that the foregoing
shall not limit the rights of the Purchaser with respect to claims for fraud
relating to the provisions of this Agreement or any document required to be
delivered pursuant to this Agreement or claims for indemnification pursuant
to
Article IX.
ARTICLE
V.
ADDITIONAL
COVENANTS AND AGREEMENTS
Section
5.1 Conduct
of
Business.
(a) Except
as expressly
contemplated or permitted by this Agreement or Section 5.1 of the Company
Disclosure Schedule or as required by applicable Law, during the period from
the
date of this Agreement until the Closing, unless the Purchaser otherwise
consents (which consent shall not be unreasonably withheld or delayed), the
Company shall, and shall cause each of its Subsidiaries to, use reasonable
best
efforts to (i) conduct its business in all material respects in the ordinary
course consistent with past practice and policies, (ii) keep available the
services of the officers and key employees of the Company and the officers
and
key employees of its Subsidiaries that are material to the Company and its
Subsidiaries taken as a whole, and (iii) maintain in all material respects
good
relations with the material customers, lenders, suppliers and other Persons
having material business relationships with the Company or its
Subsidiaries.
(b) Except
as expressly
contemplated or permitted by this Agreement or Section 5.1 of the Company
Disclosure Schedule or as required by applicable Law, during the period from
the
date of this Agreement until the Closing, unless the Purchaser otherwise
consents (which consent shall not be unreasonably withheld or delayed), the
Company shall not, and shall cause each of its Subsidiaries not to:
(i) (A)
issue, sell or
grant any Equity Interests, or any securities or rights convertible into,
exchangeable or exercisable for, or evidencing the right to subscribe for any
Equity Interests, or any rights, warrants or options to purchase any Equity
Interests; (B) redeem, purchase or otherwise acquire any of its outstanding
Equity Interests, or any rights, warrants or options to acquire any Equity
Interests; (C) declare, set aside for payment or pay any dividend on, or make
any other distribution in respect of, any Equity Interests; or (D) split,
combine, subdivide or reclassify any Equity Interests;
(ii) sell,
create a Lien
upon or otherwise dispose of any of its properties or assets, except (A) (1)
sales, leases, and rentals of inventory, (2) non-exclusive licenses in
connection therewith and (3) sale-leaseback transactions in connection with
the
“Airport” business, in each case in the ordinary course of business consistent
with past practices, (B) pursuant to Contracts in force on the date of this
Agreement and set forth in the Company Disclosure Schedule, (C) dispositions
of
obsolete assets or (D) transfers among the Company and its wholly-owned
Subsidiaries;
(iii) increase
in any
material respect the salary, benefits, bonuses or other compensation of any
of
its current or former directors, consultants, officers or employees, other
than
(A) as required pursuant to applicable Law or the terms of Contracts in effect
on the date of this Agreement and set forth in the Company Disclosure Schedule,
or (B) increases in salaries, wages and benefits of employees made in the
ordinary course of business consistent with past practices;
(iv) (A)
enter into or
modify any employment, retention, change of control or severance agreement
with,
or (except as may be required by applicable Law) establish, adopt, enter into
or
modify any Company Plan, bonus, profit sharing, thrift, stock option, restricted
stock, pension, retirement, welfare, deferred compensation, employment,
retention, change of control, termination, severance or other benefit plan,
agreement, policy or arrangement for the benefit of, any current or former
director, officer or employee; (B) exercise any discretion to accelerate the
vesting or payment of any compensation or benefit under any Company Plan; (C)
grant any new awards under any Company Plan; (D) take any action to fund the
payment of compensation or benefits under any Company Plan; (E) adopt or amend
in any respect any Company Plan, except as required by applicable Law; or (F)
pay any transaction-related bonuses, severance or other similar amounts to
employees of the Company, its Subsidiaries, the Shareholders or any of their
respective Affiliates; except, in the case of clauses (A), (C), (D) and (E),
in
the ordinary course of business consistent with past practice, or as may be
required by the terms of any such plan, agreement, policy or arrangement in
effect on the date hereof;
(v) make
any material
changes in financial or tax accounting methods, principles or practices (or
change an annual accounting period), including revaluing any assets or writing
off receivables or reserves, except insofar as may be required by a change
in
GAAP or applicable Law;
(vi) except
as otherwise
contemplated herein, amend its certificate of incorporation, bylaws or analogous
charter documents;
(vii) adopt
a plan or
agreement of complete or partial liquidation or dissolution or cause or permit
Aeromobile Ltd. to adopt a plan or agreement of complete or partial liquidation
or dissolution;
(viii) take
or agree to
commit to take, any action that could reasonably be expected to (A) impose
any
material delay in the obtaining of, or significantly increase the risk of not
obtaining, any authorizations, consents, orders, declarations or approvals
of
any Governmental Authority necessary to consummate the Transactions or the
expiration or termination of any applicable waiting period, (B) significantly
increase the risk of any Governmental Authority entering an order or Restraint
prohibiting or impeding the consummation of the Transactions or (C) otherwise
materially delay the consummation of the Transactions (each, a
“Delay”);
(ix) enter
into any new
material line of business;
(x) make
any
acquisition of or material investment in any other business or Person, by
purchase or other acquisition of Equity Interests, by merger, consolidation,
asset purchase or other business combination, or by formation of any joint
venture or other business organization or by contributions to
capital;
(xi) settle
or
compromise any Action (A) relating to this Agreement or the Transactions or
(B)
that is otherwise material to the Company or its Subsidiaries;
(xii) enter
into any
agreement in respect of Taxes, change or make any Tax elections (unless required
by applicable Law), file any material amended Tax Return, settle or compromise
any material Tax liability or consent to any extension or waiver of the
limitation period applicable to any claim or assessment in respect of
Taxes;
(xiii) amend
in any
material respect or terminate any Material Contract, other than the entry into
task, purchase or delivery orders under Government Contracts in the ordinary
course of business consistent with past practices;
(xiv) enter
into any (A)
Material Contract (or any other Contract that reasonably likely would have
been
a Material Contract if entered into on January 1, 2006), other than supplier
or
customer Contracts (excluding fixed price customer Contracts with an aggregate
contract value equal to or greater than $10,000,000) entered into in the
ordinary course of business consistent with past practices or (B) other material
Contract, other than Contracts entered into in the ordinary course of business
consistent with past practices;
(xv) make
any material
capital expenditures other than in the ordinary course of business consistent
with past practice or in accordance with the Company’s current capital
expenditure budget disclosed to the Purchaser prior to the date
hereof;
(xvi) incur,
create or
become liable for any Indebtedness (A) of the type described in clauses (i),
(ii), (v), (with respect to interest rate swap obligations) (vii), or (with
respect to any of the foregoing) (viii) of the definition thereof, other than
Credit Facility Indebtedness (and interest rate swap obligations in connection
therewith under Contracts in effect on the date of this Agreement and set forth
in the Company Disclosure Schedule); provided that Net Indebtedness as of the
Closing Date shall not exceed $172,000,000; or (B) of any other type of material
Indebtedness other than in the ordinary course of business consistent with
past
practice;
(xvii) forgive
or waive
any material Indebtedness outstanding against a Third Party;
(xviii) make
any material
loans or advances to, or investments in, any Third Party;
(xix) pay
any fees or
expenses incurred or to be incurred by the Shareholders or the Company in
connection with the Transactions;
(xx) enter
into any
material transaction with any Third Party other than on arm’s length terms, to
the extent the amount received or paid by the Company or any of its Subsidiaries
is less than or exceeds, respectively, the amount which would be received or
paid if at arm’s-length, including, without limitation, the forgiveness of any
material claims against Third Parties not on an arm’s-length basis;
(xxi) make
any material
gift or other material gratuitous payment out of the ordinary course of
business;
(xxii) enter
into any
indemnity relating to the obligation of a Third Party, other than in the
ordinary course of business, consistent with past practice;
(xxiii) enter
into any
Contract pursuant to which, in connection with a Third Party providing surety
bonds, performance guarantees or any similar obligations for the benefit of
the
Company or any of its Subsidiaries, such Third Party (A) is expressly entitled
to be provided with any material assets of the Company or any of its
Subsidiaries as collateral or (B) is entitled to provide or withhold its consent
to a change of control of the Company or its Subsidiaries (or as a result of
such a change of control, the Third Party would be entitled to termination
or
modify such Contract); or
(xxiv) agree
to take any
of the foregoing actions.
(c) The
Purchaser
agrees that, during the period from the date of this Agreement until the Closing
Date, the Purchaser shall not, and shall not permit any of its Subsidiaries
to,
take, or agree or commit to take, any action that could reasonably be expected
to result in a Delay. Without limiting the generality of the
foregoing, the Purchaser agrees that, during the period from the date of this
Agreement until the Closing, the Purchaser shall not, and shall not permit
any
of its Subsidiaries to, acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of or equity in,
or
by any other manner, any Person or portion thereof, or otherwise acquire or
agree to acquire any assets or rights, if the entering into of a definitive
agreement relating to or the consummation of such acquisition, merger or
consolidation would reasonably be expected to result in a Delay.
Section
5.2 No
Solicitation. Until the earlier of the Closing or the termination
of this Agreement pursuant to Article VIII, no Shareholder shall, directly
or
indirectly, through any officer, director, or agent of any of such Shareholder,
the Company or any of its Subsidiaries or otherwise, initiate, solicit or
encourage (including by way of furnishing non-public information or assistance),
or enter into negotiations of any type, directly or indirectly, or enter into
a
confidentiality agreement, letter of intent or other Contract with any Person
other than the Purchaser with respect to a sale of all or any substantial
portion of the assets of the Company or any of its Subsidiaries, or a merger,
consolidation, business combination, sale of all or any substantial portion
of
the capital stock or Equity Interests of the Company, or the liquidation or
similar extraordinary transaction with respect to the Company or any of its
Subsidiaries (an “Acquisition Transaction”).
Section
5.3 Reasonable
Best
Efforts.
(a) Subject
to the
terms and conditions of this Agreement, each of the parties hereto shall
cooperate with the other parties and use their respective reasonable best
efforts to promptly (i) take, or cause to be taken, all actions, and do, or
cause to be done, all things, necessary, proper or advisable to cause the
conditions to Closing to be satisfied as promptly as practicable and to
consummate and make effective, in the most expeditious manner practicable,
the
Transactions, including preparing and filing promptly and fully all
documentation to effect all necessary filings, notices, petitions, statements,
registrations, submissions of information, applications and other documents
(including any required or recommended filings under applicable Antitrust Laws),
and (ii) obtain all approvals, consents, registrations, permits, authorizations
and other confirmations from any Governmental Authority or Third Party
necessary, proper or advisable to consummate the Transactions. For
purposes hereof, “Antitrust Laws” means the Xxxxxxx Act, as amended, the Xxxxxxx
Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended,
and
all other applicable Laws issued by a United States or federal Governmental
Authority that are designed or intended to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade
or
lessening of competition through merger or acquisition. Except as
provided in Section 5.14 (and subject to Section 5.7), the parties acknowledge
and agree that (i) neither the Company nor the Shareholders shall be required
to
expend any funds (other than the fees, costs and expenses of its advisors,
accountants or counsel related thereto which shall be paid in all events by
such
party) in order to obtain any consents required by or requested from Third
Parties in connection with the consummation of the Transactions, and (ii) the
Company shall not, without the prior written consent of the Purchaser, expend
or
commit to expend any funds, or enter into or amend any Contract in order to
obtain any such Third Party consent.
(b) In
furtherance and
not in limitation of the foregoing, the Purchaser and the Company shall prepare
and file, any required notifications pursuant to the HSR Act with respect to
the
Transactions as promptly as practicable after the date hereof and supply as
promptly as practicable any additional information and documentary material
that
may be requested pursuant to the HSR Act and use its reasonable best efforts
to
take, or cause to be taken, all other actions consistent with this Section
5.3
necessary to cause the expiration or termination of the applicable waiting
periods under the HSR Act (including any extensions thereof) as soon as
practicable. Notwithstanding anything herein to the contrary, the
Purchaser and the Company shall prepare and file any required notifications
pursuant to the HSR Act with respect to the Transactions within ten (10)
Business Days following the date hereof.
(c) Each
of the parties
hereto shall use its reasonable best efforts to (i) cooperate in all
respects with each other in connection with any filing or submission with a
Governmental Authority in connection with the Transactions and in connection
with any investigation or other inquiry by or before a Governmental Authority
relating to the Transactions, including any proceeding initiated by a private
party, and (ii) keep the other party informed in all material respects and
on a
reasonably timely basis of any material communication received by such party
or
the Company from, or given by such party or the Company to, the Federal Trade
Commission, the Antitrust Division of the Department of Justice or any other
Governmental Authority and of any material communication received or given
in
connection with any proceeding by a private party, in each case regarding any
of
the Transactions. Subject to applicable Laws relating to the exchange
of information and except with respect to competitively sensitive information,
each of the parties hereto shall have the right to review in advance, and to
the
extent practicable each will consult the other on, all the information relating
to the other parties and their respective Subsidiaries, as the case may be,
that
appears in any filing made with, or written materials submitted to, any Third
Party and/or any Governmental Authority by the other party or the Company in
connection with the Transactions. Each party shall have the right to
attend conferences and meetings between the other party or the Company and
regulators concerning the Transactions, except to the extent any applicable
regulator expressly requests otherwise.
(d) In
furtherance and
not in limitation of the covenants of the parties contained in this Section
5.3,
each of the parties hereto shall use its reasonable best efforts to resolve
such
objections, if any, as may be asserted by a Governmental Authority or other
Person with respect to the Transactions. Without limiting any other
provision hereof, each party shall use its reasonable best efforts to (i) avoid
the entry of, or to have vacated or terminated, any decree, order or judgment
that would restrain, prevent or delay the consummation of the Transactions,
on
or before the Walk-Away Date, including by defending through litigation on
the
merits any claim asserted in any court by any Person, and (ii) avoid or
eliminate each and every impediment under any Antitrust Law that may be asserted
by any Governmental Authority with respect to the Transactions so as to enable
the consummation of the Transactions to occur as soon as reasonably possible
(and in any event no later than the Walk-Away Date).
Section
5.4 Public
Announcements. The initial press release with respect to the
execution of this Agreement shall be a joint press release to be reasonably
agreed upon by the Purchaser and the Shareholders. Thereafter,
neither the Shareholders nor the Purchaser nor the Company shall issue or cause
the publication of any press release or other public announcement (to the extent
not previously issued or made in accordance with this Agreement) with respect
to
this Agreement or the Transactions without the prior consent of the other party
(which consent shall not be unreasonably withheld or delayed), except as may
be
required by Law or by any applicable listing agreement with a national
securities exchange or national market system as determined in the good faith
judgment of the party proposing to make such release (in which case neither
such
party nor, as the case may be, the Company shall issue or cause the publication
of such press release or other public announcement without prior consultation
with the other party). Notwithstanding anything to the contrary in
this Agreement, after consultation with and review by the Shareholders, the
Purchaser and its Affiliates shall have the right to disclose summary
information about this Agreement and the Transactions as part of normal
fundraising, marketing, informational and reporting activities and in connection
with the financing of the Transactions; provided that each Shareholder shall
respond promptly and in any event in within two Business Days to any request
for
such consultation and review and in the event any such Shareholder fails to
so
respond, such Shareholder shall have no right to assert a breach by the
Purchaser of this last sentence of this Section 5.4.
Section
5.5 Access
to
Information; Confidentiality. Subject to applicable Laws relating
to the exchange of information, the Company shall, and shall cause its
Subsidiaries to, afford to the Purchaser and the Purchaser’s representatives
reasonable access during normal business hours to the properties, books,
Contracts and records of the Company and its Subsidiaries and furnish promptly
to the Purchaser such information concerning their respective businesses and
properties as the Purchaser may reasonably request; provided, however, that
the
Company shall not be obligated to provide such access or information if the
Company determines, in its reasonable judgment, that doing so would violate
applicable Law or a Contract or obligation of confidentiality owing to a
third-party or jeopardize the protection of an attorney-client privilege that
the Company or any of its Subsidiaries would be entitled to assert, if the
Company reasonably believes that undermining such privilege would adversely
affect in any material respect the Company’s or its Subsidiary’s position in any
pending, or what the Company believes in good faith is likely to be future,
litigation; provided, however, that in each case (i) the parties hereto shall
cooperate to find a way to allow disclosure of such information to the extent
doing so would not (in the good faith view of the Company) reasonably be likely
to (A) result in a violation of the applicable Law, Contract or obligation
of
confidentiality or (B) undermine the applicable privilege and (ii) if any
information is not disclosed due to the preceding proviso, the Company shall
notify the Purchaser in writing (to the extent not prohibited by the applicable
Law, Contract or obligation, and except as would undermine the applicable
privilege) of the subject matter of any such information and the facts giving
rise to such failure to disclose such information. Except with
respect to the Required Financial Information and other information that may
be
necessary to disclose in connection with the Financing, until the Closing,
the
information provided will be subject to the terms of the Confidentiality
Agreement.
Section
5.6 Indemnification
and Insurance.
(a) The
Purchaser shall
cause the Company and its Subsidiaries (and their successors) to establish
and
maintain for a period of not less than six years from and after the Closing
Date
provisions in their certificates of incorporation, bylaws and other
organizational documents concerning the indemnification and exoneration
(including provisions relating to expense advancement) of the Company’s and its
Subsidiaries’ former and current officers, directors, employees, and agents that
are no less favorable to those persons than the provisions of the certificate
of
incorporation, bylaws and other organizational documents of the Company and
its
Subsidiaries as in effect as of the date hereof, and such provisions shall
not
be amended, repealed or otherwise modified in any respect that would adversely
affect the rights hereunder of such individuals, except as required by
applicable law. The Purchaser shall assume, be jointly and severally
liable for, and honor, guaranty and stand surety for, and shall cause the
Company to honor, in accordance with their respective terms each of the
covenants contained in this Section 5.6(a).
(b) From
and after the
Closing Date, the Purchaser shall cause the Company to (i) indemnify and hold
harmless each individual who at the Closing Date is, or at any time prior to
the
Closing Date was, a director or officer of the Company or of a Subsidiary of
the
Company (each, an “Indemnitee” and, collectively, the “Indemnitees”) with
respect to all claims, liabilities, losses, damages, judgments, fines,
penalties, costs (including amounts paid in settlement or compromise) and
expenses (including fees and expenses of legal counsel) in connection with
any
claim, suit, action, proceeding or investigation (whether civil, criminal,
administrative or investigative), whenever asserted, to the extent based on
or
arising out of, in whole or in part, acts or omissions by an Indemnitee in
the
Indemnitee’s capacity as a director, officer, employee or agent of the Company
or such Subsidiary or taken at the request of the Company or such Subsidiary
(including in connection with serving at the request of the Company or such
Subsidiary as a director, officer, employee or agent of another Person
(including any employee benefit plan)), at, or at any time prior to, the Closing
Date (including in connection with the Transactions), to the fullest extent
permitted under applicable Law. In addition, from and after the
Closing Date, the Purchaser shall cause the Company to, pay any expenses
(including fees and expenses of legal counsel) of any Indemnitee under this
Section 5.6 (including in connection with enforcing the indemnity and other
obligations provided for in this Section 5.6) as incurred to the fullest extent
permitted under applicable Law, provided that the person to whom expenses are
advanced provides an undertaking to repay such advances to the extent required
by applicable Law.
(c) For
the six-year
period commencing immediately after the Closing Date, the Purchaser shall
maintain in effect the Company’s current directors’ and officers’ liability
insurance covering acts or omissions occurring at or prior to the Closing Date
with respect to those persons who are currently (and any additional persons
who
prior to the Closing Date become, consistent with past practice) covered by
the
Company’s directors’ and officers’ liability insurance policy on terms with
respect to such coverage, and in amount, not less favorable to such individuals
than those of such policy in effect on the date hereof (or the Purchaser may
substitute therefor policies, issued by reputable insurers with the same or
better credit rating as the Company’s current insurance carrier, of at least the
same coverage with respect to matters occurring prior to the Closing Date);
provided, however, that if the aggregate annual premiums for such insurance
shall exceed 300% of the current annual premium (which annual amount the
Shareholders represent and warrant is set forth in Section 5.6(c) of the
Disclosure Schedule), then the Purchaser shall provide or cause to be provided
a
policy for the applicable individuals with the best coverage as shall then
be
available at an annual premium of 300% of such current aggregate annual premium;
provided further, however, that at no time shall such coverage be less than
the
directors’ and officers’ liability insurance coverage then provided by the
Purchaser to its directors and officers. Notwithstanding the
foregoing, the Company, with the Purchaser’s written consent (which shall not be
unreasonably withheld prior to the Closing Date), may (and, to the extent
available, at the request of the Purchaser, in the event the coverage provided
is no less favorable than the coverage that would have been provided pursuant
to
the preceding sentence, the Company shall, prior to the Closing Date) purchase
a
six-year extended reporting period endorsement, on the terms with respect to
coverage and amount as described above, under its existing directors’ and
officers’ liability insurance coverage, if the coverage thereunder costs, in the
aggregate, no more than 300% of the current annual premium. If the
insurance is purchased in accordance with the preceding sentence, the Purchaser
will not have any obligation under the first sentence of this Section
5.6(c).
(d) The
provisions of
this Section 5.6 are (i) intended to be for the benefit of, and shall be
enforceable by, each Indemnitee, his or her heirs and his or her representatives
and (ii) in addition to, and not in substitution for, any other rights to
indemnification or contribution that any such Person may have by contract or
otherwise. The obligations of the Purchaser under this Section 5.6
shall not be terminated or modified in such a manner as to adversely affect
the
rights of any Indemnitee to whom this Section 5.6 applies unless (x) such
termination or modification is required by applicable Law or (y) the affected
Indemnitee shall have consented in writing to such termination or modification
(it being expressly agreed that the Indemnitees to whom this Section 5.6 applies
shall be third party beneficiaries of this Section 5.6).
(e) In
the event that
the Purchaser, the Company or any of their respective successors or assigns
(i)
consolidates with or merges into any other Person and is not the continuing
or
surviving corporation or entity of such consolidation or merger or (ii)
transfers or conveys all or substantially all of its properties and assets
to
any Person, then, and in each such case, proper provision shall be made so
that
the successors and assigns of the Purchaser and the Company shall assume all
of
the obligations thereof set forth in this Section 5.6.
Section
5.7 Fees
and
Expenses. Except as otherwise expressly provided herein, whether
or not the Closing occurs, (a) the Purchaser shall pay its own fees, costs
and
expenses incurred in connection herewith and the Transactions, including the
fees, costs and expenses of its financial advisors, accountants and counsel,
and
(b) except for (i) any fees, costs and expenses incurred by the Company at
the
request of the Purchaser in connection with the Debt Financing, and (ii) any
amounts payable pursuant to the Transaction Bonus Agreement, dated June 23,
2006, between the Company and Xxxx Xxxxxxx or the Transaction Bonus Agreement,
dated June 23, 2006, between the Company and Xxxxxxx Xxxxx, the fees, costs
and
expenses of the Company and the Shareholders, to the extent paid or to be paid
after May 31, 2007 in connection with this Agreement and the Transactions,
shall
be paid by the Shareholders, or reimbursed pursuant to Section 1.2(b), including
the fees, costs and expenses of financial advisors, accountants and counsel
and
the Consent Costs for which the Shareholders are responsible under Section
5.14.
Section
5.8 Release.
(a) As
of and following
the Closing Date, each Shareholder knowingly, voluntarily and unconditionally
releases, forever discharges, and covenants not to xxx the Company or any of
its
Subsidiaries from or for any and all claims, causes of action, demands, suits,
debts, obligations, liabilities, damages, losses, costs and expenses (including
attorneys’ fees) of every kind or nature whatsoever, known or unknown, actual or
potential, suspected or unsuspected, fixed or contingent, that such Shareholder
has or may have, now or in the future, arising out of, relating to, or resulting
from any act or omission, error, negligence, breach of contract, tort, violation
of law, matter or cause whatsoever from the beginning of time to the Closing
Date; provided, however, that the foregoing release shall not
apply to any claims arising under or out of (i) this Agreement, (ii) any
document required to be delivered pursuant to this Agreement, (iii) any claim
of
fraud relating to the provisions of this Agreement or any such document or
(iv)
breaches by the Company or any of its Subsidiaries of any Contract between
the
Company (or a Subsidiary thereof) and such Shareholder to the extent (A) such
Shareholder did not have knowledge (as defined in such Shareholder’s estoppel
certificate to be delivered under this Agreement) of such breach as of the
Closing Date and (B) such breaches occurred within the eighteen (18) months
prior to the Closing Date.
(b) As
of and following
the Closing Date, each of the Purchaser and the Company, on behalf of itself
and
each Subsidiary of the Company, knowingly, voluntarily and unconditionally
releases, forever discharges, and covenants not to xxx each and every
Shareholder from or for any and all claims, causes of action, demands, suits,
debts, obligations, liabilities, damages, losses, costs and expenses (including
attorneys’ fees) of every kind or nature whatsoever, known or unknown, actual or
potential, suspected or unsuspected, fixed or contingent, that the Purchaser,
the Company or a Subsidiary of the Company has or may have, now or in the
future, arising out of, relating to, or resulting from any act, or omission,
error, negligence, breach of contract, tort, violation of law, matter or cause
whatsoever from the beginning of time to the Closing Date; provided,
however, that the foregoing release shall not apply to any claims
arising
under or out of (i) this Agreement, (ii) any document required to be delivered
pursuant to this Agreement, (iii) any claim of fraud relating to the provisions
of this Agreement or any such document or (iv) any Contract between the Company
(or a Subsidiary thereof) and such Shareholder.
Section
5.9 Merger. The
Purchaser agrees that, as soon as practicable (but in any event within thirty
(30) days following the Closing Date), it shall cause the Merger to be
consummated in accordance with the DGCL, including, without limitation, the
provision to each then remaining stockholder of the Company (other than the
Purchaser) (a “Post-Closing Shareholder”) of notification of appraisal rights
pursuant to Section 262 of the DGCL and such additional information related
to
the Merger and the Transaction as is required under the DGCL. In
connection with the Merger, the Purchaser shall cause to be paid to each
Post-Closing Shareholder an amount for each share of Company Common Stock then
owned by such Post-Closing Shareholder equal to the Per Share Purchase
Price.
Section
5.10 Service
Level
Amendments. Following the Closing, the Purchaser shall cause the
Company to offer to amend each Service Agreement to incorporate therein the
provisions set forth on Exhibit 5.10 attached hereto.
Section
5.11 Financing. The
Company and its Subsidiaries and its and their respective representatives shall
provide all reasonable cooperation (including with respect to timeliness) in
connection with the arrangement of the Debt Financing as may be reasonably
requested by the Purchaser (provided that such requested cooperation does not
unreasonably interfere with the ongoing operations of the Company and its
Subsidiaries), including (i) participating in meetings, road shows,
meetings with ratings agencies, drafting sessions and due diligence sessions,
(ii) promptly furnishing the Purchaser and its financing sources with financial
and other pertinent information regarding the Company as may be reasonably
requested by the Purchaser, including all financial statements and financial
data of the type required by Regulation S-X and Regulation S-K under the
Securities Act and of type and form customarily included in private placements
under Rule 144A of the Securities Act to consummate the offering of senior
or
senior subordinated notes (the “Required Financial Information”), (iii)
assisting the Purchaser and its financing sources in the preparation of (A)
offering documents, prospectuses or memoranda for any of the Debt Financing
and
(B) materials for rating agency presentations, (iv) reasonably cooperating
with the marketing efforts of the Purchaser and its financing sources for any
of
the Debt Financing, (v) providing and executing documents as may be reasonably
requested by the Purchaser, including a certificate of the chief financial
officer of the Company with respect to solvency matters and consents of
accountants for use of their reports in any materials relating to the Debt
Financing, (vi) reasonably facilitating the pledging of collateral and assisting
in the negotiation and execution of the Financing Agreements, (vii) using
commercially reasonable efforts to obtain accountants’ comfort letters, legal
opinions with respect to regulatory matters, surveys and title insurance as
reasonably requested by the Purchaser, and (viii) providing monthly
financial statements; provided that none of the Company and its Subsidiaries
shall be required to pay any commitment or other similar fee or incur any other
liability (except for amounts subject to reimbursement or indemnification
pursuant to the next sentence) in connection with the Debt Financing prior
to
the Closing, and no obligation of the Company or any of its Subsidiaries under
any Financing Agreement shall be effective until the Closing. The
Purchaser shall, promptly upon request by the Company, reimburse the Company
for
all reasonable out-of-pocket costs incurred by the Company and its Subsidiaries
in connection with such cooperation. The Purchaser shall indemnify
and hold harmless the Shareholders, the Company and its Subsidiaries and their
respective representatives for and against any and all Damages suffered or
incurred by them in connection with the arrangement of the Debt Financing and
any information utilized in connection therewith (other than information
provided by the Company or any of its Subsidiaries). The Purchaser
shall use its reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable that
are within the Purchaser's control to (i) maintain in effect the Debt Commitment
Letter and to satisfy on a timely basis all the conditions to obtaining the
Debt
Financing set forth therein, (ii) enter into definitive financing agreements
with respect to the Debt Financing as contemplated by the Debt Commitment Letter
(the "Financing Agreements"), so that the Financing Agreements are in effect
at
or prior to Closing and (iii) consummate the Financing at or prior to the
Closing; provided, however, that the Purchaser acknowledges and agrees that
the
failure to consummate the Financing shall not constitute a condition to the
Purchaser’s obligation to proceed to the Closing (assuming the satisfaction or
waiver of the conditions set forth in Article VI hereof); provided, further,
that if any of the Debt Financing Commitment Letter or the Financing Agreements
expire or are terminated or otherwise become unavailable prior to the Closing,
in whole or in part, for any reason, the Purchaser may arrange for alternative
financing on such terms as or more favorable to the Purchaser than the terms
set
forth in the Debt Financing Commitment Letter to replace the financing
contemplated by such expired or terminated or unavailable commitments or
agreements, sufficient to consummate the Transactions in the time periods
required hereunder.
Section
5.12 Payoff
Letters. No less than one (1) Business Day prior to the Closing
Date, the Company shall deliver to the Purchaser one or more payoff letters
signed by the lenders, lessors and other financing sources with respect to
all
outstanding Indebtedness of the Company of the type described in clauses (i),
(ii), (with respect to Credit Facility Indebtedness of the type described in
clause (i) of the definition thereof) (v) and (with respect thereto) (viii)
of
the definition of Indebtedness in this Agreement, including the Credit Facility
Indebtedness, setting forth, in the aggregate, all amounts necessary to be
paid
in order to fully pay off all of the Indebtedness of the Company on the Closing
Date and providing that, upon such payment, such Indebtedness will be
extinguished and all Liens relating thereto will be
released.
Section
5.13 FIRPTA. Prior
to, but within thirty (30) days of, the Closing Date, the Company shall deliver
to the Purchaser a certificate signed under penalties of perjury by an officer
of the Company to the effect that neither the Company nor any of its
Subsidiaries is or has been a United States real property holding company,
as
defined in Section 897(c)(2) of the Code, during the applicable period
described in Section 897(c)(1)(A)(ii) of the Code.
Section
5.14 Operating
Leases. Without limiting the obligations of the parties under
Section 5.3, prior to the Closing Date, the Company shall cooperate and work
together in good faith with the Purchaser to obtain all approvals, consents,
amendments or waivers required under the Contracts set forth in Exhibit 5.14
(the “Operating Leases”) in connection with this Agreement and the Transactions,
including the Debt Financing, including amendments to remove from such Contracts
any covenants, ongoing representations or other provisions relating to the
financial condition or credit quality of the Company or any of its Subsidiaries
(other than with respect to insolvency). Any Consent Costs incurred
before or after the Closing in connection with any such approvals, consents,
amendments or waivers, whenever obtained, shall be paid fifty percent (50%)
by
the Purchaser and fifty percent (50%) by the Shareholders; provided, however,
that the aggregate amount of Consent Costs paid or payable by the Shareholders
pursuant to this Section 5.14 shall not exceed $2,000,000.
Section
5.15 Performance
Bonds. The Company shall cause the outstanding face amount of all
surety bonds, performance bonds or similar obligations (including bid bonds)
securing obligations of the Company or its Subsidiaries to be no more than
$90,000,000 on the Closing Date. The Company shall use reasonable
best efforts to place all surety bonds, performance bonds or similar obligations
(including bid bonds) issued after the date hereof with a surety provider
pursuant to an indemnity agreement that does not include provisions of the
type
described in clauses (A) and (B) of Section 5.1(b)(xxiii).
Section
5.16 Aeromobile. Prior
to the Closing, the Company shall not take any action that could reasonably
be
expected to cause Aeromobile Ltd. to be consolidated with the Company for
accounting purposes under GAAP or become part of a consolidated group for
federal or state income tax purposes.
Section
5.17 International
Communications Licenses. The Company shall use its reasonable
best efforts to provide to the Purchaser, as soon as reasonably practicable,
reasonably satisfactory evidence that the Permits with respect to communications
matters in the jurisdictions set forth on Exhibit 5.17 are valid and in full
force and effect. Such reasonable best efforts may, as reasonably
necessary, include contacts with appropriate Governmental Authorities seeking
express clarification of the status of the applicable Permit with copies of
any
correspondence (including emails) with respect thereto promptly delivered to
the
Purchaser; provided, that in the event such evidence is not provided but an
applicable Governmental Authority has not given any affirmative notice of any
invalidity of any such Permit or the failure of any such Permit to be in full
force or effect, such evidence shall be deemed so
provided.
ARTICLE
VI.
CONDITIONS
PRECEDENT
Section
6.1 Conditions
to
Each Party’s Obligation to Effect the Transactions. The
respective obligations of each party hereto to effect the Transactions shall
be
subject to the satisfaction (or waiver, if permissible under applicable Law)
on
or prior to the Closing Date of the following conditions:
(a) Antitrust. The
waiting period (and any extension thereof) applicable to the Transactions under
the HSR Act shall have been terminated or shall have expired;
(b) Other
Governmental Consents. All material consents, approvals, orders
or authorizations of, or registrations, declarations or filings with, any
Governmental Authority required in connection with the execution, delivery
or
performance hereof by the parties hereto, or the consummation of the
Transactions, shall have been made or obtained on terms and conditions
reasonably satisfactory to the Purchaser and the Shareholders; provided, however
that with respect to the regulation of competition or antitrust matters, such
consents, approvals, orders or authorizations shall only be required from the
Governmental Authorities in the United States and Germany; and
(c) No
Injunctions
or Restraints. No Law, injunction, judgment or ruling enacted,
promulgated, issued, entered, amended or enforced by any Governmental Authority
(collectively, “Restraints”) shall be in effect enjoining, restraining,
preventing or prohibiting consummation of the Transactions or making the
consummation of the Transactions illegal, and there shall be no Action by any
Governmental Authority pending or threatened in writing or otherwise explicitly
threatened in any material respect by an authorized government official in
his
or her official capacity and seeking to (i) prevent or restrain consummation
of
the Transactions or (ii) cause any material portion of the Transactions to
be
rescinded after Closing.
Section
6.2 Conditions
to
Obligations of the Purchaser. The obligations of the Purchaser to
effect the Transactions are further subject to the satisfaction (or waiver,
if
permissible under applicable Law) on or prior to the Closing Date of the
following conditions:
(a) Representations
and Warranties.
(i) (x) The
representations and warranties of the Shareholders contained in Article II
of
this Agreement shall be true and correct as of the date hereof and the Closing
Date as if made on and as of the Closing Date (or, if given as of a specific
date, at and as of such date), except where the failure or failures to be so
true and correct, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect; provided, however that for purposes
of determining the satisfaction of the condition in this clause (x), no effect
shall be given to any exception or qualification in such representations and
warranties relating to materiality or Material Adverse Effect, and (y) the
representations and warranties of the Shareholders set forth in Sections 2.2(a)
and 2.4 shall be true and correct in all material respects as of the date hereof
and the Closing Date as if made on and as of the Closing Date; and
(ii) (x) The
representations and warranties of the Company contained in Article III of this
Agreement shall be true and correct as of the date hereof and the Closing Date
as if made on and as of the Closing Date (or, if given as of a specific date,
at
and as of such date), except where the failure or failures to be so true and
correct, individually or in the aggregate, would not reasonably be expected
to
have a Material Adverse Effect; provided, however that for purposes of
determining the satisfaction of the condition in this clause (x), no effect
shall be given to any exception or qualification in such representations and
warranties relating to materiality or Material Adverse Effect, and (y) the
representations and warranties of the Company set forth in Section 3.2(a),
Section 3.5(c), Section 3.6(a)(i), Sections 3.6(b)(i), (ii), (iii), (iv), (vi),
(viii), (xii), (xiii), (xiv), (xv), (xvii) and (with respect to clauses (i),
(ii), (iii), (iv), (vi), (viii), (xii), (xiii), (xiv), (xv) and (xvii) of
Section 3.6(b)) (xviii), and Section 3.8(c) shall be true and correct in all
material respects as of the date hereof and the Closing Date as if made on
and
as of the Closing Date (or, if given as of a specific date, at and as of such
date).
(b) Performance
of
Obligations of the Shareholders and the Company.
(i) The
Shareholders
shall have performed in all material respects all obligations required to be
performed by them under this Agreement at or prior to the Closing
Date;
(ii) The
Company shall
have performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date;
(c) Officer’s
Certificates.
(i) The
Purchaser shall
have received certificates signed on behalf of each Shareholder by an executive
officer thereof certifying that the conditions set forth in Section 6.2(a)(i)
and (b)(i) have been satisfied; and
(ii) The
Purchaser shall
have received a certificate signed on behalf of the Company by an executive
officer thereof certifying that the conditions set forth in Section 6.2(a)(ii)
and (b)(ii) have been satisfied;
(d) Ancillary
Deliveries. The Shareholders shall have delivered, or caused to
be delivered, to the Purchaser the documents listed in Section 7.2;
and
(e) Stockholder
Approval of Parachute Payments. With respect to any payments
and/or benefits that may constitute “parachute payments” under Section 280G of
the Code, the Company’s stockholders shall have (i) approved, pursuant to the
method provided for in the regulations promulgated under Section 280G of the
Code, any such “parachute payments” or (ii) shall have voted upon and
disapproved such parachute payments, and, as a consequence, such “parachute
payments” shall not be paid or provided for in any manner and the Purchaser
shall not have any liabilities with respect to such “parachute
payments.”
Section
6.3 Conditions
to
Obligations of the Shareholders and the Company. The obligation
of the Shareholders and the Company to effect the Transactions is further
subject to the satisfaction (or waiver, if permissible under applicable Law)
on
or prior to the Closing Date of the following conditions:
(a) Representations
and Warranties. The representations and warranties of the
Purchaser contained in Article IV of this Agreement shall be true and correct
in
all material respects, in each case as of the date of this Agreement and as
of
the Closing Date as though made on and as of the Closing Date (or, if given
as
of a specific date, at and as of such date), except where the failure or
failures to be so true and correct, individually or in the aggregate, would
not
reasonably be expected to impair in any material respect the ability of the
Purchaser to perform its obligations under this Agreement or prevent or
materially delay consummation of the Transactions;
(b) Performance
of
Obligations of the Purchaser. The Purchaser shall have performed
in all material respects all obligations required to be performed by them under
this Agreement at or prior to the Closing Date;
(c) Officer’s
Certificate. The Shareholders shall have received a certificate
signed on behalf of the Purchaser by an executive officer of the Purchaser
certifying that the conditions set forth in Sections 6.3(a) and (b) have been
satisfied;
(d) Ancillary
Deliveries. The Purchaser shall have delivered, or caused to be
delivered, to the Purchaser the documents and other items listed in Section
7.3.
ARTICLE
VII.
CLOSING
Section
7.1 Closing. Subject
to the satisfaction or waiver of the conditions set forth in Article VI, the
consummation of the Transaction (the “Closing”) shall occur (a) on the date
selected by the Purchaser that (i) if the Conditions Satisfied Date is on or
prior to July 31, 2007, is not later than August 31, 2007, (ii) if the
Conditions Satisfied Date is after July 31, 2007 but on or before September
1,
2007, is not later than September 30, 2007, and (iii) if the Conditions
Satisfied Date is after September 1, 2007, is not more than 30 days after the
Conditions Satisfied Date; provided that the Shareholders and the Company shall
not be required to effect the Closing without at least two (2) Business Days
prior written notice from the Purchaser), or (b) on such other date as the
parties may agree (the date of the Closing being referred to as the “Closing
Date”). The Closing shall take place at the offices of Paul,
Hastings, Xxxxxxxx & Xxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, XX, Xxxxx 0000,
Xxxxxxx, Xxxxxxx 00000, or at such other place as the parties may
agree.
Section
7.2 Closing
Deliveries of the Shareholders and the Company. At the Closing,
(a) each
Shareholder,
as applicable, shall deliver to the Purchaser the following:
(i) a
certificate or
certificates representing the Shares held by such Shareholder, duly endorsed
in
blank or accompanied by duly executed stock powers or other assignment
documents;
(ii) a
resignation,
effective as of the Closing Date, of each director of the Company nominated
by
such Shareholder; and
(iii) an
estoppel
certificate in the form attached hereto as Exhibit 7.2(c); and
(b) the
Company shall
deliver to the Purchaser a duly executed stock certificate issued by the
Company, dated as of the Closing Date, evidencing the ownership by the Purchaser
of the Shares.
Section
7.3 The
Purchaser
Closing Deliveries. At the Closing, the Purchaser shall deliver,
or cause to be delivered, to the Shareholders the portion of the Purchase Price
to be paid at the Closing pursuant to Section 1.2, paid and delivered in
accordance with such Section.
ARTICLE
VIII.
TERMINATION
Section
8.1 Termination. This
Agreement may be terminated and the Transactions abandoned at any time prior
to
the Closing:
(a) by
the written
consent of the Shareholders and the Purchaser; or
(b) by
either the
Shareholders or the Purchaser:
(i) if
the Transactions
shall not have been consummated on or before September 30, 2007 (subject to
clause (A) of this Section 8.1(b)(i), the “Walk-Away Date”); provided, however,
that (A) if the Conditions Satisfied Date is after September 1, 2007, no party
may terminate this Agreement pursuant to this Section 8.1(b)(i) until the close
of business on the date (which, in such case, shall be the “Walk-Away Date”)
that is the earlier of (1) 30 days after the Conditions Satisfied Date and
(2)
October 31, 2007, and (B) the right to terminate this Agreement under this
Section 8.1(b)(i) shall not be available to a party if the failure of the
Transactions to have been consummated on or before the Walk-Away Date was
primarily due to the failure of such party to perform any of its obligations
under this Agreement; or
(ii) if
any Restraint
having the effect set forth in Section 6.1(c) shall be in effect and shall
have
become final and nonappealable;
(c) by
the Purchaser,
if the Company or the Shareholders shall have materially breached any of their
representations, warranties, covenants or agreements set forth in this
Agreement, which breach (x) would give rise to the failure of a condition set
forth in Section 6.2 and (y) cannot be cured by the Company or the Shareholders
(as applicable) by the Walk-Away Date; or
(d) by
the
Shareholders, if the Purchaser shall have materially breached any of its
representations, warranties, covenants or agreements set forth in this
Agreement, which breach (x) would give rise to the failure of a condition set
forth in Section 6.3 and (y) cannot be cured by the Purchaser by the Walk-Away
Date.
Section
8.2 Effect
of
Termination.
(a) In
the event of the
termination of this Agreement as provided in Section 8.1, written notice thereof
shall be given to the other party or parties, specifying the provision hereof
pursuant to which such termination is made, and this Agreement shall forthwith
become null and void (other than Sections 5.7 and 8.2, the penultimate sentence
of Section 5.4, Article IX, and the Confidentiality Agreement in accordance
with
its terms), and there shall be no liability on the part of the Purchaser, the
Company or the Shareholders or their respective directors, officers and
Affiliates, except nothing shall relieve any party from liability for fraud
or
any willful breach of this Agreement.
(b) Notwithstanding
anything to the contrary in this Agreement, in the event of a termination of
this Agreement pursuant to Section 8.1, (i) the rights of the Company and the
Shareholders to receive recourse under Section 8.2(a) for any fraud or willful
breach by the Purchaser shall be the sole and exclusive remedy of the Company
and the Shareholders against the Purchaser (or any guarantor of the Purchaser’s
obligations hereunder) with respect to all matters relating to this Agreement,
at law or in equity, including the loss suffered as a result of breach of this
Agreement by the Purchaser or the failure of the Transactions to be consummated
and (ii) the liability of the Purchaser and any guarantor of its obligations
hereunder, in the aggregate, with respect to such matters shall not in any
event
exceed ********************
************.
(c) The
parties
acknowledge and agree that, for purposes of this Section 8.2, the Purchaser
shall be deemed to have committed a willful breach of this Agreement if this
Agreement is terminated pursuant to Section 8.1(b)(i) and at the time of such
termination the conditions set forth in Sections 6.1 and 6.2 (other than
Sections 6.2(c) and 6.2(d)) have been satisfied and the Company and the
Shareholders (as applicable) have executed and tendered for delivery to the
Purchaser, subject only to the Closing, the documents contemplated by Sections
6.2(c) and 6.2(d) (a “Walk-Away Termination”), and (ii) within three (3)
Business Days following such Walk-Away Termination, the Purchaser shall pay
to
the Shareholders an amount in cash equal to
****************************************************************
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*************************************************.
ARTICLE
IX.
INDEMNIFICATION
Section
9.1 Indemnification
Obligations of the Shareholders. From and after the Closing, each
Shareholder shall,
***************************************************
******************************************************************
indemnify, defend and hold harmless the Purchaser, its Affiliates and their
respective officers, directors, employees, agents and representatives (the
“Indemnified Parties”) from, against, and in respect any and all claims,
liabilities, damages, losses, penalties, fines and judgments wherever arising
or
incurred, whether or not arising from a third party claim, (including amounts
paid in settlement, costs of investigation and reasonable attorneys’ fees and
expenses) arising out of **********
***************************************************************************
***************************************************************************
************************************************************************************************. The
claims, liabilities, losses, damages, penalties, fines and judgments of the
Indemnified Parties described in this Section 9.1 as to which the Indemnified
Parties are entitled to indemnification are collectively referred to as
“Purchaser Losses”.
Section
9.2 Indemnification
Procedure.
(a) Promptly
following
receipt by an Indemnified Party of notice by a third party (including any
Governmental Entity) of any complaint, dispute or claim or the commencement
of
any audit, investigation, action or proceeding with respect to which such
Indemnified Party may be entitled to receive payment from the applicable
Shareholder or Shareholders (the “Indemnifying Party”) for any Purchaser Losses,
such Indemnified Party shall provide written notice thereof to the Indemnifying
Party. Failure of the Indemnified Party to notify the Indemnifying
Party will not relieve the Indemnifying Party of any liability that it may
have
to the Indemnified Party, except to the extent the defense of such audit,
investigation, action or proceeding is prejudiced by the Indemnified Party’s
failure to give such notice. The Indemnifying Party shall have the
right, upon written notice delivered to the Indemnified Party within twenty
(20)
days thereafter to assume the defense of such audit, investigation, action
or
proceeding, including the employment of counsel reasonably satisfactory to
the
Indemnified Party and the payment of the fees and disbursements of such
counsel. Until the Indemnifying Party assumes the defense of such
audit, investigation, action or proceeding, the Indemnified Party may defend
against such audit, investigation, action or proceeding in any manner the
Indemnified Party reasonably deems appropriate. If the Indemnifying
Party does not, within such twenty (20) day period, assume the defense of such
audit, investigation, action or proceeding, to the Indemnified Party, the
Indemnifying Party will be bound by any judicial determination made with respect
to such audit, investigation, action or proceeding, subject to the provisions
of
Section 9.2(b) below. In any audit, investigation, action or
proceeding for which indemnification is being sought hereunder the Indemnified
Party or the Indemnifying Party, whichever is not assuming the defense of such
action, shall have the right to participate in such matter and to retain its
or
their own counsel at such party’s own expense. The Indemnifying Party
or the Indemnified Party (as the case may be) shall at all times use reasonable
efforts to keep the Indemnifying Party or Indemnified Party (as the case may
be)
reasonably apprised of the status of the defense of any matter the defense
of
which it is maintaining and to cooperate in good faith with each other with
respect to the defense of any such matter.
(b) No
Indemnified
Party may settle or compromise any claim or consent to the entry of any judgment
with respect to which indemnification is being sought hereunder without the
prior written consent of the Indemnifying Party (which may not be unreasonably
withheld or delayed), unless such settlement, compromise or consent includes
an
unconditional release of the Indemnifying Party and its or their officers,
directors, employees and Affiliates from all liability arising out of, or
related to, such claim. No Indemnifying Party may, without the prior
written consent of the Indemnified Party, settle or compromise any claim or
consent to the entry of any judgment with respect to which indemnification
is
being sought hereunder unless such settlement, compromise or consent (x)
includes an unconditional release of the Indemnified Party, from all liability
arising out of such claim, (y) does not contain any admission of wrongdoing
or
liability on behalf of the Indemnified Party and (z) involves only the payment
of cash.
(c) In
the event an
Indemnified Party claims a right to payment pursuant hereto for a claim other
than a claim asserted by a third party, such Indemnified Party shall send
written notice of such claim to the Indemnifying Party (a “Notice of
Claim”). Such Notice of Claim shall specify the basis for such
claim. In the event the Indemnifying Party does not notify the
Indemnified Party within thirty (30) days following its receipt of such notice
that the Indemnifying Party disputes its liability to the Indemnified Party
under this Article or the amount thereof, the claim specified by the Indemnified
Party in such Notice of Claim shall be conclusively deemed a liability of the
Indemnifying Party under this Article IX, and the Indemnifying Party shall
pay
the amount of such liability to the Indemnified Party on demand or, in the
case
of any notice in which the amount of the claim (or any portion of the claim)
is
estimated, on such later date when the amount of such claim (or such portion
of
such claim) becomes finally determined. In the event the Indemnifying
Party has timely disputed its liability with respect to such claim as provided
above, as promptly as possible, such Indemnified Party and the Indemnifying
Party shall establish the merits and amount of such claim (by mutual agreement,
litigation, arbitration or otherwise) and, within five (5) Business Days
following the final determination of the merits and amount of such claim, the
Indemnifying Party shall pay to the Indemnified Party immediately available
funds in an amount equal to such claim as determined hereunder.
Section
9.3 Survival
Period. ********************************************
****************************************************************************
****************************************************************************
****************************************************************************
****************************************************************************
****************.
Section
9.4 Liability
Limits. ********************************************
****************************************************************************
****************************************************************************.
The
aggregate
liability of the Shareholders for Purchaser Losses with respect to any claims
made pursuant to Section 9.1 shall be limited to the Purchase Price, and the
aggregate liability of each Shareholder shall be limited to such Shareholder’s
Pro Rata Share of the Purchase Price. As used herein, “Pro Rata
Share” shall mean, with respect to each Shareholder, the percentage set forth
opposite such Shareholder’s name on Exhibit 1.2.
Section
9.5 Calculation
of
Damages. The amount of Purchaser Losses payable by a Shareholder
under this Article IX shall be reduced by any insurance proceeds or other
reimbursement arrangements, by way of indemnification or otherwise, recovered
by
the Indemnified Party with respect to the claim for which indemnification is
sought (net of the reasonable costs of recovery).
Section
9.6 Exclusive
Remedy. From and after the Closing, other than claims for fraud,
the indemnities provided in this Article XI shall constitute the sole and
exclusive remedy of any Indemnified Party for damages arising out of, resulting
from or incurred in connection with any claims related to this Agreement or
arising out of the transactions contemplated hereby; provided, however, that
this exclusive remedy for damages does not preclude a party from bringing an
action for specific performance or other equitable remedy to require a party
to
perform its obligations under this Agreement or any agreement entered into
in
connection herewith.
Section
9.7 Adjustments
to
the Purchase Price. All amounts paid with respect to
indemnification under this Agreement shall be treated by the parties to this
Agreement for all income Tax purposes as adjustments to the Purchase
Price. Notwithstanding anything to the contrary in this Agreement, no
Indemnified Party shall be entitled to indemnification by the Shareholders
under
this Article IX for any losses, to the extent, but only to the extent, the
Purchaser has otherwise been compensated by reason of a reduction in the
Purchase Price pursuant Section 1.2.
ARTICLE
X.
MISCELLANEOUS
Section
10.1 Survival
of
Representations, Warranties, Covenants and Agreements. Except as
expressly set forth in Section 9.3, none of the representations, warranties,
covenants and other agreements in this Agreement or in any other instrument
delivered pursuant to this Agreement, including rights arising out of any breach
of such representations, warranties, covenants and other agreements, shall
survive the Closing, except for the covenants and agreements contained in this
Article X and the covenants and agreements contained in this Agreement and
in
such other instruments that by their terms apply or are to be performed in
whole
or in part after the Closing Date.
Section
10.2 No
Other
Representations or Warranties. The parties acknowledge and agree
that except for the representations and warranties made by the Shareholders
in
Articles II and III and in Section 5.6(c) and representations and warranties
made in certificates contemplated by this Agreement, none of the Shareholders
makes any representation or warranty with respect to the Shareholders, the
Company or its Subsidiaries or their respective businesses, operations, assets,
liabilities, condition (financial or otherwise) or prospects, notwithstanding
the delivery or disclosure to the Purchaser or any of its Affiliates or
representatives of any documentation, forecasts or other information with
respect to any one or more of the foregoing.
Section
10.3 Amendment
or
Supplement. This Agreement may be amended or supplemented in any
and all respects, solely by written agreement of the parties
hereto.
Section
10.4 Extension
of
Time, Waiver, Etc. At any time prior to the Closing Date, any
party may, subject to applicable Law, (a) waive any inaccuracies in the
representations and warranties of any other party hereto, (b) extend the time
for the performance of any of the obligations or acts of any other party hereto
or (c) waive compliance by the other party with any of the agreements contained
herein or, except as otherwise provided herein, waive any of such party’s
conditions. Notwithstanding the foregoing, (i) no such waiver or
extension shall be binding on any party other than the party granting such
waiver or extension and (ii) no failure or delay by the Shareholders or the
Purchaser in exercising any right 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 hereunder. Any
agreement on the part of a party hereto to any such extension or waiver shall
be
valid only if set forth in an instrument in writing signed on behalf of such
party.
Section
10.5 Assignment. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned, in whole or in part, by operation of Law or otherwise, by any
of
the parties without the prior written consent of the other parties; provided,
however, the Purchaser may assign this Agreement and any or all rights hereunder
to (a) any Affiliate of the Purchaser (or any Person that, immediately
following the Closing, will be an Affiliate of the Purchaser), (b) any
lender of the Purchaser as collateral security, or (c) following the
Closing, any successor in interest in the Purchaser; provided, further, that
no
such assignment shall relieve the Purchaser from any obligation
hereunder. Subject to the preceding sentence, this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by, the parties hereto
and their respective successors and permitted assigns. Any purported
assignment not permitted under this Section 10.5 shall be null and
void.
Section
10.6 Counterparts. This
Agreement may be executed in counterparts (each of which shall be deemed to
be
an original but all of which taken together shall constitute one and the same
agreement) and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
Section
10.7 Entire
Agreement; No Third-Party Beneficiaries; No Recourse. This
Agreement, including the Disclosure Schedule, the exhibits hereto, the documents
and instruments relating to the Transactions referred to herein and the
Confidentiality Agreement (a) constitute the entire agreement, and supersede
all
other prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof and thereof and (b) except
for
the provisions of Sections 5.6, are not intended to and shall not confer upon
any Person other than the parties hereto any rights, benefits or remedies
hereunder. This Agreement may only be enforced against, and, except
for claims against the Guarantor pursuant to the Sponsor Guaranty, any claims
or
causes of action that may be based upon, arise out of or relate to this
Agreement, or the negotiation, execution or performance of this Agreement may
only be made against the entities that are expressly identified as parties
to
this Agreement, and no past, present or future Affiliate, stockholder, member,
partner, officer, director, agent, attorney or representative of any party
to
this Agreement shall have any liability or obligation for any reason whatsoever
under this Agreement or based upon, arising out of or relating to this Agreement
unless such Affiliate, stockholder, member, partner, officer, director, agent,
attorney or representative is also a party to this Agreement.
Section
10.8 Governing
Law. This Agreement, and all matters arising hereunder, shall be
governed by and interpreted under the laws of the State of New York (without
regard to its principles of conflicts of laws).
Section
10.9 Dispute
Resolution. Any and all disputes, claims or controversies arising
out of or relating to this Agreement or the breach thereof shall be finally
and
exclusively resolved and settled by arbitration administered by the American
Arbitration Association in accordance with its applicable rules. Each
party hereby irrevocably and unconditionally agrees that the seat, or legal
place, of any such arbitration shall be New York City, New
York. Judgment upon any award rendered by the arbitrators may be
entered by a court having jurisdiction thereof. The arbitral tribunal
shall consist of three persons appointed in accordance with the following
provisions:
(a) the
Purchaser shall
appoint one arbitrator and the Shareholder or Shareholders party to such
dispute, claim or controversy shall appoint one arbitrator. The two
arbitrators thus appointed shall choose a third arbitrator, who will act as
the
chairperson of the arbitral tribunal; and
(b) if
the two
arbitrators appointed pursuant to clause (c)(i) above are not able to agree
on
the third arbitrator within thirty (30) days from the date the last such
arbitrator was appointed, the third arbitrator shall be appointed by the
American Arbitration Association;
All
fees and
expenses of the arbitration shall be borne fifty percent (50%) by the
Shareholder or Shareholders party to such dispute, claim or controversy and
fifty percent (50%) by the Purchaser. Nothing contained herein shall
limit the right of a party hereto to seek from any court of competent
jurisdiction, pending appointment of an arbitral tribunal, interim relief in
aid
of arbitration or to protect or enforce its rights hereunder.
Section
10.10 Notices. All
notices, requests and other communications to any party hereunder shall be
in
writing and shall be deemed given if delivered personally, facsimiled (which
is
confirmed), sent by overnight delivery service (providing proof of delivery)
or
sent by first-class mail, postage prepaid (upon receipt) to the parties at
the
following addresses:
|
|
If
to the
Purchaser or, following the Closing, the Company,
to:
|
Radio
Acquisition
Corp.
c/o
The Carlyle
Group
0000
Xxxxxxxxxxxx
Xxxxxx, X.X.
Xxxxx
000
Xxxxx
Xxxxxxxxxx,
XX
00000
Attention: Xxx
Xxxxxxxx
Facsimile: (000)
000-0000
|
|
with
a copy
(which shall not constitute notice)
to:
|
Xxxxxx
&
Xxxxxxx LLP
000
Xxxxxxxx
Xxxxxx, XX
Xxxxx
0000
Xxxxxxxxxx,
XX
00000
Attention: Xxxxxx
Xxxxxxxxxxxx
Xxxxx
Xxxxx
Facsimile: (000)
000-0000
|
|
If
to
American, to:
|
American
Airlines,
Inc.
0000
Xxxx Xxxxxx
Xxxx.
Mail
Drop
5562
Xxxx
Xxxxx, Xxxxx
00000
Attention: Xxxxxxx
Xxxxxx
Facsimile: (000)
000-0000
and
American
Airlines,
Inc.
0000
Xxxx Xxxxxx
Xxxx.
Mail
Drop
5675
Xxxx
Xxxxx, Xxxxx
00000
Attention:
Xxxxxxx
Xxxxxxxxx
Facsimile:
(000)
000-0000
|
|
If
to
Continental, to:
|
Continental
Airlines, Inc.
0000
Xxxxx
Xxxxxx
00xx
Xxxxx,
XXXXX
Xxxxxxx,
Xxxxx
00000
Attention: Xxxx
Xxxx
Facsimile: (000)
000-0000
and
Continental
Airlines, Inc.
0000
Xxxxx
Xxxxxx
00xx
Xxxxx—XXXXX
Xxxxxxx,
Xxxxx
00000
Attention:
Xxxx
Xxxxxxxx
Facsimile:
(000)
000-0000
|
|
If
to Delta,
to:
|
Delta
Air Lines,
Inc.
0000
Xxxxx
Xxxx.
Xxxxxxx,
Xxxxxxx
00000
Attention: EVP
– Chief Financial Officer
Facsimile: (000)
000-0000
and
Delta
Air Lines,
Inc.
0000
Xxxxx
Xxxx.
Xxxxxxx,
Xxxxxxx
00000
Attention:
SVP –
General Counsel
Facsimile:
(000)
000-0000
|
|
If
to
Northwest, to:
|
Northwest
Airlines,
Inc.
0000
Xxxx Xxx
Xxxxxxx
Xxxxxxxxxx
X0000
Xxxxx,
Xxxxxxxxx
00000-0000
Attention: Xxxx
Xxxxx
Facsimile: (000)
000-0000
and
Northwest
Airlines,
Inc.
0000
Xxxx Xxx
Xxxx
Xxxxx,
Xxxxxxxxx
00000
Attention:
Xxxxx
Xxxx
Facsimile:
(000)
000-0000
|
|
If
to United,
to:
|
United
Air Lines,
Inc.
X.X.
Xxx
00000
Xxxxxxx,
Xxxxxxxx
00000
Attention: Chief
Financial Officer
Facsimile: (000)
000-0000
and
United
Air Lines,
Inc.
X.X.
Xxx
00000
Xxxxxxx,
Xxxxxxxx
00000
Attention:
General
Counsel
Facsimile:
(000)
000-0000
|
|
If
to US
Airways, to:
|
US
Airways, Inc.
0000
Xxxx Xxx
Xxxxxx Xxxxxxxxx
Xxxxxxx,
Xxxxxxx
00000
Attention: Chief
Financial Officer
and
US
Airways, Inc.
000
Xxxx Xxx Xxxxxx
Xxxxxxx
Xxxxx,
Xxxxxxx
00000
Attention: Deputy
General Counsel
Facsimile: (000)
000-0000
|
|
If,
prior to
the Closing, to the Company, to:
|
ARINC
Incorporated
0000
Xxxx
Xxxx
Xxxxxxxxx,
Xxxxxxxx
00000
Attention: Xxxx
Xxxxx
Facsimile:
(000)
000-0000
|
|
in
each case,
with a copy (which shall not constitute notice)
to:
|
Xxxx
Xxxxxxxx,
Xxxxxxxx & Xxxxxx, LLP
000
Xxxxxxxxx
Xxxxxx, X.X.
Xxxxx
0000
Xxxxxxx,
XX
00000
Attention:
Xxxxx
Xxxxxx
Facsimile:
(000)
000-0000
or
such other address or facsimile number as such party may hereafter specify
by
like notice to the other parties hereto. All such notices, requests
and other communications shall be deemed received on the date of receipt by
the
recipient thereof if received prior to 5 P.M. in the place of receipt
and such day is a business day in the place of receipt. Otherwise,
any such notice, request or communication shall be deemed not to have been
received until the next succeeding business day in the place of
receipt.
Section
10.11 Severability. If
any term or other provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced
by
any rule of Law or public policy, all other terms, provisions and conditions
of
this Agreement shall nevertheless remain in full force and
effect. 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 are
fulfilled to the extent possible.
Section
10.12 Definitions. As
used in this Agreement, the following terms have the meanings ascribed thereto
below:
“Acquisition
Transaction” shall have the meaning set forth in Section 5.2.
“Action”
shall
have
the meaning set forth in Section 3.7.
“Adjustment
Certificate” shall have the meaning set forth in Section 1.2(a).
“Affiliate”
shall
mean, as to any Person, any other Person that, directly or indirectly, controls,
or is controlled by, or is under common control with, such
Person. For this purpose, “control” (including, with its correlative
meanings, “controlled by” and “under common control with”) shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies of a Person, whether through the ownership
of securities or partnership or other ownership interests, by contract or
otherwise.
“Aggregate
SARs
Exercise Price” shall have the meaning set forth in Section 1.2(d).
“Agreement”
shall
mean this Stock Purchase Agreement, as amended from time to time.
“American”
shall
have the meaning set forth in the Preamble.
“Antitrust
Laws”
shall have the meaning set forth in Section 5.3(a).
“Arms
Export
Control Act” shall mean the regulations set forth in 22 U.S.C. Sections
2751-2799 aa-2.
“Balance
Sheet
Date” shall have the meaning set forth in Section 3.5(b).
“Bankruptcy
and
Equity Exception” shall have the meaning set forth in Section 2.2.
“Bankruptcy
Code”
shall have the meaning set forth in Section 6.3(d).
“Bankruptcy
Court”
shall have the meaning set forth in Section 6.3(d).
“Board
of
Directors” shall mean the Board of Directors of the Company.
“Business
Day”
shall mean a day except a Saturday, a Sunday or other day on which banks in
the
City of New York are authorized or required by Law to be closed.
“Cash
Equity” shall
have the meaning set forth in Section 4.4(b).
“Certificate
Amendment” shall have the meaning set forth in the Preamble.
“Closing”
shall
have the meaning set forth in Section 7.1.
“Closing
Adjustment
Deductions” shall have the meaning set forth in Section 1.2(a).
“Closing
Date”
shall have the meaning set forth in Section 7.1.
“COBRA”
means
the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
“Code”
shall
mean
the United States Internal Revenue Code of 1986, as amended.
“Commitment
Letter”
shall have the meaning set forth in Section 4.4(b).
“Company”
shall
have the meaning set forth in the Recitals.
“Company
Charter
Documents” shall have the meaning set forth in Section 3.2.
“Company
Class A
Stock” shall have the meaning set forth in Section 3.2.
“Company
Class B
Stock” shall have the meaning set forth in Section 3.2.
“Company
Class C
Stock” shall have the meaning set forth in Section 3.2.
“Company
Common
Stock” shall mean the Company Class A Stock, the Company Class B Stock and the
Company Class C Stock.
“Company
IP Rights”
shall have the meaning set forth in Section 3.14(b).
“Company
Plans”
shall have the meaning set forth in Section 3.10.
“Company
Preferred
Stock” shall have the meaning set forth in Section 3.2.
“Conditions
Satisfied Date” shall mean the date on which all conditions precedent set forth
in Section 6.1 and Section 6.2 that are contemplated to be satisfied prior
to
the Closing Date are first satisfied (or a party has executed and tendered
for
delivery, subject only to the Closing, and documents required to be delivered
by
such party pursuant to Section 6.2 or Section 6.3, as applicable) or waived
(or,
if from time to time after such date any such conditions are no longer
satisfied, the first subsequent date on which all such conditions are satisfied
or waived).
“Consent
Costs”
shall mean any liabilities, damages, losses, penalties, expenses or costs
incurred in connection with obtaining any consents, waivers or amendments
described in Section 5.14 (but not including the fees, costs and expenses of
a
party’s advisors, accountants or counsel related thereto which shall in be paid
in all events by such party) including the net present value (using a 10%
discount rate) of any future economic impact resulting in connection with such
consents, waivers or amendments.
“Continental”
shall
have the meaning set forth in the Preamble.
“Contract”
shall
mean any loan or credit agreement, debenture, note, bond, mortgage, indenture,
deed of trust, lease, license, instrument, contract or other agreement or
binding commitment whether written or oral.
“Confidentiality
Agreement” shall mean that certain letter agreement dated February 1, 2007,
between the Company and Carlyle Investment Management, L.L.C..
“Credit
Facility
Indebtedness” shall mean any indebtedness for borrowed money of the Company and
its Subsidiaries under (i) that certain Credit Agreement among the Company,
Wachovia Bank, National Association, General Electric Capital Corporation,
Societe Generale, and the other parties thereto, dated as of March 10, 2004,
as
amended, and (ii) that certain Second Amended and Restated Note Purchase
Agreement, $30,000,000 Variable Rate Series A Senior Notes due March 27, 2009,
between the Company and the noteholders party thereto, dated as of March 10,
2004, in each case including any interest accrued thereon and prepayment, change
of control or similar penalties and expenses, as of the Closing
Date.
“Damages”
shall
mean all losses, damages, liabilities, and other costs and expenses of any
kind
or nature whatsoever, whether known or unknown, contingent or vested, matured
or
unmatured, and whether or not resulting from third-party claims, including
costs
(including reasonable fees and expenses of attorneys, other professional
advisors and expert witnesses and the allocable portion of the relevant person’s
internal costs) of investigation, preparation and litigation in connection
with
any Action or threatened Action.
“Debt
Commitment
Letter” shall have the meaning set forth in Section 4.4(a).
“Debt
Financing”
shall have the meaning set forth in Section 4.4(a).
“Delay”
shall
have
the meaning set forth in Section 5.1(b).
“Delta”
shall
have
the meaning set forth in the Preamble.
“DGCL”
shall
mean
the General Corporation Law of the State of Delaware.
“Disclosure
Schedule” shall have the meaning set forth in the preamble to Article
II.
“Environmental
Law”
shall mean any applicable Law relating to (i) the protection of human health
and
the environment (including air, water, soil and natural resources), or (ii)
the
use, storage, handling, or Release of Hazardous Substances, in each case as
in
effect on the date of this Agreement.
“Equity
Commitment
Letter” shall have the meaning set forth in Section 4.4(b).
“Equity
Interest”
of any Person means (i) shares of capital stock, limited liability company
interests, partnership interests or other equity securities of such Person,
including, with respect to the Company, the Company Common Stock and the Company
Preferred Stock, (ii) subscriptions, calls, warrants, options or commitments
of
any kind or character relating to, or entitling any Person to purchase or
otherwise acquire, any capital stock, limited liability company interests,
partnership interests or other equity securities of such Person, (iii)
securities convertible into or exercisable or exchangeable for shares of capital
stock, limited liability company interests, partnership interests or other
equity securities of such Person, and (iv) equity equivalents, interests in
the
ownership of, or equity appreciation, phantom stock or other similar rights
of,
or with respect to, such Person, including, with respect to the Company, the
Company’s stock appreciation rights.
“Equity
Investor”
shall have the meaning set forth in Section 4.4(b).
“ERISA”
shall
have
the meaning set forth in Section 3.10.
“ERISA
Affiliate”
shall mean any entity which is (or at any relevant time was) a member of a
“controlled group of corporations” with, or under “common control” with, the
Company or any of its Subsidiaries, as defined in Section 414(b) or (c) of
the
Code.
“Export
Administration Regulations” shall mean means 15 C.F.R. parts 730 – 799, as
continued by Executive Order 13222 of August 17, 2001, 3 C.F.R., 2001 Comp.
P.
783 (2002), as extended by the notice of August 2, 2005, 70 C.F.R. 45273 (August
5, 2005).
“FCPA”
shall
have
the meaning set forth in Section 3.19.
“Final
Adjustment
Certificate” shall have the meaning set forth in Section 1.2(a).
“Final
Order” shall
mean an order or judgment of the Bankruptcy Court as to which (i) the time
to
appeal, petition for certiorari, or motion for reargument or rehearing has
expired and as to which no appeal, petition for certiorari, or move for
reargument or rehearing shall then be pending or (ii) in the event that an
appeal, writ of certiorari, reargument or rehearing thereof has been sought,
such order of the Bankruptcy Court shall have been affirmed by the highest
court
to which such order was appealed, or certiorari has been denied, or from which
reargument or rehearing was sought, and the time to take any further appeal,
petition for certiorari or move for reargument or rehearing shall have expired;
provided, that no order shall fail to be a Final Order solely because of
the possibility that a motion pursuant to Rule 60 of the Federal Rules of Civil
Procedure or Rule 7024 of the Federal Rules of Bankruptcy Procedure may be
filed
with respect to such order, as long as such a motion has not actually been
filed.
“Financial
Statements” shall mean (i) the audited consolidated balance sheet of the
Company and its Subsidiaries as of each of December 31, 2004, December 31,
2005
and December 31, 2006, and the audited consolidated statements of income, cash
flows and changes in stockholders’ equity of the Company and its Subsidiaries
for the periods then ended, together with any related notes, schedules and
auditor’s report therein, (ii) the unaudited comparative consolidated balance
sheet of the Company and its Subsidiaries as of each of March 31, 2006 and
March
31, 2007, and the unaudited comparative consolidated statements of income and
cash flows of the Company and its Subsidiaries for the three-month period then
ended, and (iii) the unaudited comparative consolidated balance sheet of the
Company and its Subsidiaries as of each of May 31, 2006 and May 31, 2007, and
the unaudited comparative consolidated statements of income and cash flows
of
the Company and its Subsidiaries for the five-month period then
ended.
“Financing”
shall
have the meaning set forth in Section 4.4(b).
“Financing
Agreements” shall have the meaning set forth in Section 5.11.
“Foreign
Company”
shall mean any Subsidiary that is not a “United States Person” within the
meaning of Section 7701(a)(30) of the Code.
“Foreign
Trade
Statistics Regulations” shall mean 15 C.F.R. Part 30.
“Foreign
Company
Plans” shall have the meaning set forth in Section 3.10.
“GAAP”
shall
mean
generally accepted accounting principles in the United States, consistently
applied.
“Government
Contract” shall mean any Contract (whether prime contract, subcontract, grant,
subgrant, cooperative agreement, teaming agreement or arrangement, joint
venture, basic ordering agreement, pricing agreement, letter agreement or other
similar arrangement) between the Company or any of its Subsidiaries, on the
one
hand, and (i) any Governmental Authority, (ii) any prime contractor of a
Governmental Authority in its capacity as a prime contractor, or (iii) any
subcontractor with respect to any Contract of a type described in clauses (i)
or
(ii) above, on the other hand. A task, purchase or delivery order
under a Government Contract shall not constitute a separate Government Contract,
for purposes of this definition, but shall be part of the Government Contract
to
which it relates.
“Government
List”
shall mean (i) the Specially Designated Nationals and Blocked Persons List
maintained by the Department of the Treasury, Office of Foreign Assets Control.
31 C.F.R. Chapter V, Annex A; (ii) the Denied Persons List and the Entity List
maintained by the Department of Commerce, Bureau of Industry and Security;
(iii)
the Debarred Parties List maintained by the Department of State, Directorate
of
Defense Trade Controls; and (iv) any list or qualification of “Designated
Nationals” as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part
515.
“Governmental
Authority” shall mean any government, court, regulatory or administrative
agency, commission or authority or other governmental or arbitral
instrumentality, federal, state or local, domestic, foreign or
multinational.
“Governmental
Order” shall mean any order, writ, judgment, injunction, decree or award entered
by or with any Governmental Authority.
“Guarantor”
shall
have the meaning set forth in the Recitals.
“HSR
Act” shall
mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
“Hazardous
Substance” shall mean any substance to the extent presently listed, defined,
designated or classified as hazardous, toxic or radioactive under any applicable
Environmental Law, including petroleum and any derivative or by-products
thereof.
“Indebtedness”
shall mean, with respect to any Person, (i) indebtedness of such Person for
borrowed money (including accrued and unpaid interest and all prepayment
penalties or premiums and including, with respect to the Company and its
Subsidiaries, the Credit Facility Indebtedness), (ii) other indebtedness of
such
Person evidenced by notes, bonds, debentures or similar debt instruments
(including accrued and unpaid interest and all prepayment penalties or
premiums); (iii) capitalized leases of such Person; (iv) all obligations of
others secured by any Lien on property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (v) all standby
letters of credit issued for the account of such Person, (vi) obligations of
such Person under conditional sale, title retention or similar arrangements
or
other obligations to pay the deferred purchase price for property or services
(other than ordinary course trade payables), including earnout obligations,
(vii) all obligations in respect of interest rate and currency swap obligations
(including breakage costs in respect thereof), and (viii) all guarantees of
or
by such Person of any of the matters described in clauses (i)-(vii)
hereof.
“Indemnitee”
shall
have the meaning set forth in Section 5.6.
“International
Traffic in Arms Regulations” shall mean 22 C.F.R. Parts
120-130.
“IP
Rights” shall
have the meaning set forth in Section 3.14(a).
“Joint
Ventures”
shall mean Opti-Fi Networks LLC and ADARI Aviation Technology Company
Limited.
“Knowledge”
shall
mean, in the case of the Shareholders, the actual knowledge of Xxxxxx Xxxxxx,
Xxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxx Xxxxxxx and Xxxxx Xxxx (with
no
duty of investigation), and, in the case of the Company, the actual knowledge
(with no duty of investigation) of Xxxx Xxxxxxx, Xxxxxxx Xxxxx, Xxxx Xxxxx,
Xxxxx Xxxxx, Xxxx Xxxxxxxxx, Xxxxxx Xxxxxxxx, Xx Xxxxxxxxxx, Xxxxxx Xxxx, Xxxx
Xxxxx, Xxxx X. Xxxxx, Xxxx Xxxxxxxx, Xxxxx Xxxxx and Xxx Xxxxxxxxx.
“Laws”
shall
have
the meaning set forth in Section 3.8.
“Leased
Real
Property” shall have the meaning set forth in Section 3.12(b).
“Lenders”
shall
have the meaning set forth in Section 4.4(a).
“Liens”
shall
have
the meaning set forth in Section 2.4.
“Material
Adverse
Effect” shall mean any change, event, effect or occurrence which has a material
adverse effect on the assets, business, results of operations or financial
condition of the Company and its Subsidiaries taken as a whole; provided,
that, for the purposes of this Agreement, “Material Adverse Effect” will not
include changes, events, effects or occurrences to the extent arising out of,
resulting from or attributable to (i) changes in conditions in the United States
or global economy or capital or financial markets generally, including changes
in interest or exchange rates and fluctuating commodity prices generally, in
each case so long as such changes do not significantly disproportionately affect
the Company and its Subsidiaries, (ii) changes in general legal, regulatory,
political, economic or business conditions or changes in GAAP that, in each
case, generally affect industries in which the Company and its Subsidiaries
conducts business, in each case so long as such changes do not significantly
disproportionately affect the Company and its Subsidiaries, (iii) the
announcement or pendancy of this Agreement, including the impact thereof on
relationships, contractual or otherwise, with customers, suppliers,
distributors, partners or employees, or (iv) floods, earthquakes or other
natural disasters (other than hurricanes).
“Material
Contract”
shall have the meaning set forth in Section 3.15(b).
“Merger”
shall
mean
the transaction pursuant to which, after the Closing, the Company will become
a
wholly-owned Subsidiary of the Purchaser.
“Net
Indebtedness”
shall have the meaning set forth in Section 3.5(c).
“Northwest”
shall
have the meaning set forth in the Preamble.
“OFAC”
shall
mean
the Department of the Treasury, Office of Foreign Assets Control.
“OFAC
Laws and
Regulations” shall mean any laws, rules, executive orders, administrative
orders, lists, sanctions and regulations administered by OFAC, including the
International Emergency Economic Powers Act (United States), the Trading with
the Enemy Act (United States) and the regulations set forth in 31 C.F.R. Chapter
V.
“Owned
Real
Property” shall have the meaning set forth in Section 3.12(a).
“PBGC”
shall
have
the meaning set forth in Section 3.10.
“Per
Share Purchase
Price” shall have the meaning set forth in Section 1.2(b).
“Permits”
shall
have the meaning set forth in Section 3.8.
“Permitted
Liens”
shall mean (a) Liens for Taxes not yet due and payable, (b) Liens of carriers,
warehousemen, mechanics, materialmen and repairmen incurred in the ordinary
course of business consistent with past practice and not yet delinquent and
(c)
other Liens not related to Indebtedness and that will not adversely affect
in
any material respect the use or value of any property subject to such
Lien.
“Person”
shall
mean
an individual, a corporation, a limited liability company, a partnership, an
association, a trust or any other entity, including a Governmental
Authority.
“Post-Closing
Shareholder” shall have the meaning set forth in Section 5.8.
“Prohibited
Person”
shall mean (i) a Person who has been determined by competent authority to be
the
subject of the prohibitions in any of the OFAC Laws and Regulations; (ii) a
Person identified on a Government List; (iii) the government of any country
against which the United States maintains economic sanctions or embargos; or
(iv) a Person who acts on behalf of or is owned or controlled by the government
of a country against which the United States maintains economic sanctions or
embargos.
“Purchase
Price”
shall have the meaning set forth in Section 1.2(b).
“Purchaser”
shall
have the meaning set forth in the Preamble.
“Real
Property
Leases” shall have the meaning set forth in Section 3.12(b).
“Release”
means
any
release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching, or migration at, into or onto the environment,
including movement or migration through or in the environment, whether sudden
or
non-sudden and whether accidental or non-accidental, or any release, emission
or
discharge as those terms are defined in any applicable Environmental
Law.
“Required
Financial
Information” shall have the meaning set forth in Section 5.11.
“Restraints”
shall
have the meaning set forth in Section 6.1(b).
“Securities
Act”
shall mean the Securities Act of 1933, as amended.
“Service
Agreement”
shall mean a Contract between the Company or a Subsidiary and a Post-Closing
Shareholder pursuant to which the Company or such Subsidiary provides goods
or
services to such Post-Closing Shareholder.
“Shareholder”
shall
have the meaning set forth in the Preamble.
“Special
Committee”
shall mean the special committee of the Board of Directors consisting solely
of
disinterested directors who are not representatives of, affiliated with or
acting on behalf of any Shareholder.
“Sponsor
Guaranty”
shall have the meaning set forth in the Recitals.
“Stock
Awards”
shall have the meaning set forth in Section 3.2(a).
“Subsidiary”
when
used with respect to any Person, shall mean any corporation, limited liability
company, partnership, association, trust or other entity of which securities
or
other ownership interests representing 50% or more of the Equity Interests,
measured by ordinary voting power, (or, in the case of a partnership, 50% or
more of the general partnership interests) are, as of such date, owned by such
party or one or more Subsidiaries of such party or by such party and one or
more
Subsidiaries of such party.
“Tax
Returns” shall
mean any return, report, claim for refund, estimate, information return or
statement or other similar document relating to or required to be filed with
any
Governmental Authority with respect to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
“Taxes”
shall
mean
all federal, state, local or foreign taxes, charges, fees, imposts, levies
or
other assessments, including all net income, gross receipts, capital, sales,
use, ad valorem, value added, transfer, franchise, profits, inventory, capital
stock, license, withholding, payroll, employment, social security, unemployment,
excise, severance, stamp, occupation, property and estimated taxes, customs
duties, fees, assessments and charges of any kind and all interest, penalties,
fines, additions to tax or additional amounts imposed by any Governmental
Authority with respect thereto.
“Third
Party” shall
mean any Person other than the Company, a wholly-owned Subsidiary of the
Company, and a Subsidiary of which the Company owns all of the outstanding
Equity Interests other than Equity Interests required by local Law to be held
by
a third party.
“Third
Party IP
Rights” shall have the meaning set forth in Section 3.14(b).
“Transactions”
refers collectively to this Agreement and the transactions contemplated hereby,
including the Merger and the filing of the Certificate Amendment with the
Secretary of State of the State of Delaware.
“United”
shall
have
the meaning set forth in the Preamble.
“US
Airways” shall
have the meaning set forth in the Preamble.
“Walk-Away
Date”
shall have the meaning set forth in Section 8.1(b).
Section
10.13 Rules
of
Interpretation. Unless otherwise expressly provided, the
following rule of interpretation shall apply:
(a) Calculation
of
Time Period. When calculating the period of time before which,
within which or following which any act is to be done or step taken pursuant
to
this Agreement, the date that is the reference date in calculating such period
shall be excluded. If the last day of such period is not a Business
Day, the period in question shall end on the next succeeding Business
Day.
(b) Number
and
Gender. Where the context requires, the use of a singular form
herein shall include the plural, the use of the plural shall include the
singular, and the use of any gender shall include any and all
genders.
(c) Headings. The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of
this Agreement.
(d) Herein. The
words “hereof”, “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
(e) Including. Whenever
the words “include”, “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation”.
(f) Schedules
and
Exhibits Generally. The Schedules and Exhibits attached to this
Agreement shall be construed with and as an integral part of this Agreement
to
the same extent as if the same had been set forth verbatim herein.
(g) Disclosure
Schedule. The parties acknowledge and agree that: any disclosure
made with reference to a section of the Shareholder Disclosure Schedule or
Company Disclosure Schedule shall be deemed sufficient for purposes of
disclosure in any other section or sections of the Shareholder Disclosure
Schedule or Company Disclosure Schedule that may require disclosure therein
only
to the extent that the relevance of any such disclosure to such other section
of
the Shareholder Disclosure Schedule or Company Disclosure Schedule is reasonably
apparent from the text of such disclosure; the Shareholder Disclosure Schedule
and Company Disclosure Schedule is intended only to qualify and limit the
representations, warranties and covenants of the Shareholders and the Company,
respectively, contained in this Agreement and shall not be deemed to expand
in
any way the scope or effect of any such representations, warranties or
covenants; the disclosures in the Shareholder Disclosure Schedule and the
Company Disclosure Schedule may be over-inclusive, considering the materiality
standard contained in the section of this Agreement relating to the
corresponding section of the Shareholder Disclosure Schedule or Company
Disclosure Schedule, and any items or matters disclosed in the Shareholder
Disclosure Schedule or Company Disclosure Schedule are not intended to set
or
establish standards of materiality different from those set forth in the
corresponding section of this Agreement; and the disclosure of any item or
information in the Shareholder Disclosure Schedule or Company Disclosure
Schedule is not an admission that such item or information (or any non-disclosed
item or information of comparable or greater significance) is material, required
to have been disclosed in the Shareholder Disclosure Schedule or Company
Disclosure Schedule, or is of a nature that would reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect.
(h) References
to
Articles, Sections, Exhibits or Schedules. When a reference is
made in this Agreement to an Article, a Section, Exhibit or Schedule, such
reference shall be to an Article of, a Section of, or an Exhibit or Schedule
to,
this Agreement unless otherwise indicated.
(i) Defined
Terms. All terms defined in this Agreement shall have the defined
meanings when used in any document made or delivered pursuant hereto unless
otherwise defined therein and except as otherwise provided therein.
(j) References
to
Agreements, Instruments and Statutes. Any agreement, instrument
or statute defined or referred to herein or in any agreement or instrument
that
is referred to herein means such agreement, instrument or statute as from time
to time amended, modified or supplemented, including (in the case of agreements
or instruments) by waiver or consent and (in the case of statutes) by succession
of comparable successor statutes and references to all attachments thereto
and
instruments incorporated therein.
(k) References
to a
Person. References to a Person are also to its permitted
successors and assigns.
(l) Negotiation
and
Drafting of Agreement. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement and, in the event
an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as jointly drafted by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of
the
authorship of any provision of this Agreement.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date first above written.
RADIO
ACQUISITION CORP.
By:
Name:
Title:
ARINC
INCORPORATED
By:
Name:
Title:
AMERICAN
AIRLINES, INC.
By:
Name:
Title:
CONTINENTAL
AIRLINES, INC.
By:
Name:
Title:
DELTA
AIR
LINES, INC.
By:
Name:
Title:
NORTHWEST
AIRLINES, INC.
By:
Name:
Title:
UNITED
AIR
LINES, INC.
By:
Name:
Title:
US
AIRWAYS,
INC.
By:
Name:
Title:
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