STOCK PURCHASE AGREEMENT dated July 31, 2007 among AIR METHODS CORPORATION, (the “Buyer”) FSS AIRHOLDINGS, INC. (the “Company”) AND FRED S. SHAULIS (the “Seller”)
dated
July
31, 2007
among
AIR
METHODS CORPORATION,
(the
“Buyer”)
FSS
AIRHOLDINGS, INC.
(the
“Company”)
AND
XXXX
X. XXXXXXX
(the
“Seller”)
TABLE
OF CONTENTS
Page
|
|
ARTICLE
I - SALE AND PURCHASE OF CERTAIN ASSETS
|
1
|
1.1 Purchase
and Sale
|
1
|
1.2 Purchase
Price
|
1
|
1.3 Allocation
of Purchase Price
|
2
|
1.4 Escrow
Receivable
|
2
|
1.5 Phantom
Stock Plan Payments
|
2
|
1.6 Tax
Benefit Payments
|
2
|
1.7 Purchase
Price Adjustment
|
3
|
ARTICLE
II - REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SELLER
|
4
|
2.1 Due
Organization
|
4
|
2.2 Subsidiaries
|
4
|
2.3 Due
Authorization
|
4
|
2.4 Absence
of Changes or Events
|
4
|
2.5 Personal
Property
|
5
|
(a) Marketable
Title
|
5
|
(b) Condition
of Aircraft
|
5
|
(c) Machinery
and Equipment
|
5
|
(d) Inventories
|
5
|
2.6 Compliance
with Licenses, Permits, Laws and Other Instruments
|
5
|
(a) Licenses
and Permits
|
5
|
(b) Conflicts
|
6
|
(c) Government
Consent
|
6
|
2.7 Contracts
and Agreements
|
6
|
2.8 Employees
and Employment Contracts
|
7
|
(a) List
of Employees
|
7
|
(b) Terminated
Employees
|
7
|
(c) Employee
Agreements
|
7
|
(d) WARN
Act
|
7
|
(e) Employee
Contracts Affecting Services
|
7
|
2.9 Employee
Benefits
|
7
|
(a) Employee
Benefit Plans
|
7
|
TABLE
OF CONTENTS
(Continued)
Page
|
|
(b) Plan
Documents
|
8
|
2.10 Labor
Disputes; Compliance
|
9
|
(a) Labor
Law Compliance
|
9
|
(b) Labor
Relations
|
9
|
2.11 Claims
and Proceedings
|
9
|
2.12 Taxes
|
10
|
2.13 Real
Properties; Leases
|
10
|
2.14 Insurance
|
11
|
2.15 Books
and Records
|
11
|
2.16 Financial
Statements
|
11
|
2.17 Accounts
Receivable
|
12
|
2.19 Capitalization
of the Company and its Subsidiaries
|
12
|
2.20 Brokers
|
12
|
ARTICLE
III - BUYER’S REPRESENTATIONS AND WARRANTIES
|
12
|
3.1 Due
Organization
|
12
|
3.2 Due
Authorization
|
12
|
3.3 Financial
Ability to Perform
|
13
|
3.4 Brokers
|
13
|
ARTICLE
IV - SURVIVAL OF REPRESENTATIONS AND WARRANTIES
|
13
|
ARTICLE
V - COVENANTS OF THE PARTIES
|
14
|
5.1 Conduct
of Business Pending Closing
|
14
|
5.2 Environmental
Assurances
|
16
|
(a) Phase
II ESA
|
16
|
(b) Environmental
Remediation
|
16
|
(c) Remedial
Work
|
16
|
(d) Disagreement
|
17
|
(e) Indemnity
|
17
|
(f)
Survival
|
17
|
5.3 Cooperation
by the Company and Sellers
|
17
|
5.4 Further
Assurances
|
18
|
5.5 Access
to Records Before Closing
|
18
|
5.6 Access
to Records After Closing
|
18
|
iii
TABLE
OF CONTENTS
(Continued)
Page
|
|
5.7 WARN
Act
|
18
|
5.8 Buyer’s
Duty to Inform
|
18
|
ARTICLE
VI - CONDITIONS TO OBLIGATION OF PARTIES TO CONSUMMATE
CLOSING
|
19
|
6.1 Conditions
to Buyer’s Obligations
|
19
|
(a) Covenants,
Representations and Warranties
|
19
|
(b) Consents
|
19
|
(c) Material
Adverse Change
|
19
|
(d) Release
of Third Party Interests in the Company’s Assets
|
19
|
(e) Litigation
|
19
|
6.2 Conditions
to the Company’s and Sellers’ Obligations
|
19
|
(a) Covenants,
Representations and Warranties
|
19
|
(b) Consents
|
20
|
(c) Litigation
|
20
|
(d) Waiver
of Consents
|
20
|
ARTICLE
VII - CLOSING
|
20
|
7.1 Closing
|
20
|
7.2 Documents
to be Delivered by the Company and Sellers67
|
20
|
(a) Assignment
of Interests
|
20
|
(b) Opinion
|
20
|
(c) Non-Competition
Agreements
|
20
|
(d) Escrow
Agreement
|
21
|
(e) Certificate
|
21
|
(f) Transfer
of Records
|
21
|
(g) Agreement
to Pay Phantom Stock Payment
|
21
|
(g) Agreement
Concerning Phantom Stock Payment
|
21
|
7.3 Obligations
of Buyer
|
21
|
(a) Wire
Transfer to Seller
|
21
|
(b) Escrow
Agreement
|
21
|
(c) Non-Competition
Agreements
|
21
|
(d) Certificate
|
21
|
(e) Phantom
Stock Payment
|
21
|
iv
TABLE
OF CONTENTS
(Continued)
Page
|
|
ARTICLE
VIII - TAXES
|
21
|
8.1 Sales,
Use, Transfer and Other Taxes
|
21
|
8.2 Tax
Periods Ending on or before the Closing Date
|
22
|
8.3 Cooperation
on Tax Related Issues
|
22
|
8.4 Tax
Audit
|
22
|
ARTICLE
IX - POST-CLOSING COVENANTS
|
23
|
ARTICLE
IX - POST-CLOSING COVENANTS
|
23
|
9.1 Continuing
Insurance Coverage
|
23
|
9.2 Previous
Sale Transactions
|
23
|
9.3 CJI
Escrow Receivable
|
24
|
ARTICLE
X - INDEMNIFICATION
|
24
|
10.1 Indemnification
of Sellers
|
24
|
10.2 Indemnification
of Buyer
|
24
|
(a) General
|
24
|
(b) Limitations
|
25
|
10.3 Right
of Setoff
|
25
|
10.4 Cooperation
|
26
|
(a) Notice
|
26
|
(b) Claims
for Money Damages
|
26
|
ARTICLE
XI - TERMINATION
|
27
|
11.1 Termination
of Agreement
|
27
|
11.2 Procedure
Upon Termination
|
27
|
11.3 Specific
Performance Upon Termination
|
28
|
11.4 Non-Solicitation
|
28
|
ARTICLE
XII – CONFIDENTIALITY
|
28
|
12.1 Confidentiality
Covenants
|
28
|
12.2 Disclosure
Pursuant to Legal Process
|
29
|
12.3 Termination
of Confidentiality Obligations
|
30
|
ARTICLE
XIII - MISCELLANEOUS
|
30
|
13.1 Modifications;
Waiver
|
30
|
13.2 Notices
|
30
|
13.3 Counterparts
|
31
|
v
TABLE
OF CONTENTS
(Continued)
Page
|
|
13.4 Expenses
|
31
|
13.5 Binding
Effect; Assignment; No Third Party Rights
|
32
|
13.6 No
Strict Construction
|
32
|
13.7 Entire
and Sole Agreement
|
32
|
13.8 Governing
Law
|
32
|
13.9 Jurisdiction;
Service Of Process; Waiver Of Trial By Jury
|
32
|
13.10 Invalid
Provisions
|
33
|
13.11 Headings
|
33
|
vi
LIST
OF EXHIBITS, APPENDICES AND SCHEDULES
Exhibits
Exhibit
A
|
Form
of Opinion of the Company and Seller’s Counsel
|
Exhibits
B-1 & B-2
|
Forms
of Non-Competition Agreements
|
Exhibit
C
|
Escrow
Agreement
|
Exhibit
D
|
Form
of Certificate of the Seller
|
Exhibit
E
|
Form
of Certificate of Company
|
Exhibit
F
|
Form
of Certificate of the Buyer
|
Exhibit
G
|
Access
Agreement
|
Appendices
Appendix
A
|
Definitions
& Index of Defined Terms
|
Schedules
Schedule 1.5
|
Allocation
of Purchase Price
|
Schedule 2.2
|
Subsidiaries
|
Schedule 2.3
|
Authorizations
|
Schedule 2.4
|
Absence
of Certain Changes
|
Schedule 2.5(a)
|
Permitted
Liens
|
Schedule 2.5(b)
|
Condition
of Aircraft
|
Schedule 2.5(c)
|
Machinery
and Equipment
|
Schedule 2.6(a)
|
Licenses
and Permits
|
Schedule 2.6(b)
|
Conflicts
|
Schedule 2.6(c)
|
Government
Consents
|
Schedule 2.7
|
Contracts
|
Schedule 2.8(a)
|
List
of Employees
|
Schedule 2.8(b)
|
Terminated
Employees
|
Schedule 2.8(c)
|
Employee
Agreements
|
Schedule 2.9(a)
|
Employee
Benefit Plans
|
Schedule 2.10(a)
|
Labor
Law Compliance
|
Schedule 2.10(b)
|
Labor
Relations
|
Schedule 2.11
|
Proceedings
|
Schedule 2.12
|
Taxes
|
Schedule 2.13(a)
|
Real
Property
|
Schedule 2.13(b)
|
Real
Property Leases
|
Schedule 2.14
|
Insurance
|
Schedule 2.16
|
Financial
Statements
|
Schedule 2.17
|
Accounts
Receivable
|
Schedule 2.18
|
Capitalization
|
Schedule 2.19
|
Brokers
|
Schedule 5.1
|
Conduct
of Business Pending Closing
|
vii
Schedules (Continued)
Schedule 7.2(c)
|
Executives
Subject to Non-Compete
|
viii
This
Stock Purchase Agreement (the “Agreement”) is entered into as
of July 31, 2007 among AIR METHODS CORPORATION, a Delaware corporation (the
“Buyer”), FSS AIRHOLDINGS, INC. a Delaware corporation (the
“Company”), and its shareholder Xxxx X. Xxxxxxx
a Pennsylvania
resident (the “Seller”). All defined terms used, but not
otherwise defined, herein shall have their respective meanings set forth on
Appendix A.
RECITALS
A. The
Company, primarily through its subsidiary CJ Systems Aviation Group, Inc.
“CJ Systems”), is engaged in the business of providing
emergency air medical transportation services in the United States (the
“Business”), and owns and leases certain assets and properties
which are used by or useful to the Company in the conduct of the
Business.
B. Buyer
is also engaged in the business of providing emergency air medical
transportation services in the United States.
C. Buyer
desires to purchase from the Seller, and Seller desires to sell to the Buyer,
all of the issued and outstanding shares of capital stock (the
“Shares”) of the Company on the terms and conditions set forth
in this Agreement, and substantially in accordance with that certain non-binding
Letter of Intent, dated May 7, 2007, entered into by and among Buyer, the
Company, and Seller (the “LOI”), providing for such purchase
and sale.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and of the mutual representations,
warranties, covenants, agreements, terms and conditions set forth below, the
receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
ARTICLE
I
SALE
AND PURCHASE OF CERTAIN ASSETS
1.1 Purchase
and
Sale. On
the terms and subject to the conditions contained in this Agreement, the Seller
agrees to sell, convey, assign and transfer his Shares to Buyer, and Buyer
agrees to purchase the Shares from Seller, effective as of 12:01 a.m., Eastern
time on the day after the Closing Date.
1.2 Purchase
Price. The purchase price for the Shares (the “Purchase
Price”) will be twenty million seven hundred fifty thousand dollars
($20,750,000), subject to adjustment as provided in Section 1.7, plus any
amount payable to Seller pursuant to Sections 1.4 and 1.6
hereof. In accordance with Section 7.3, at the Closing,
Buyer shall deliver to the Seller eighteen million two hundred fifty thousand
dollars ($18,250,000) and to the Escrow Agent two million seventy-five hundred
thousand dollars ($2,075,000) (collectively with the $425,000 amount paid to
the
Escrow Agent under Section 1.5, the “Indemnification Escrow
Amount”), to be held and delivered in accordance with the terms of the
Escrow Agreement.
1.3 Allocation
of
Purchase Price. The Purchase Price shall be allocated among the
assets of the Company pursuant to an allocation to be mutually agreed upon
by
Buyer and Seller at or prior to Closing, which allocation shall be prepared
in
accordance with Schedule 1.3 hereto, and all tax returns and
reports, financial information and other books and records of each Buyer, the
Company and Seller with respect to the transactions contemplated by this
Agreement shall be consistent with such allocation.
1.4 Escrow
Receivable. The Buyer agrees that all amounts that are received by
the Company, as distributions from an escrow account currently holding a portion
of the purchase price from the sale of the Company’s Subsidiary, Corporate Jets,
Inc. (such amounts, the “CJI Escrow Receivable”), after being
appropriately reduced, as mutually agreed by the Buyer and the Seller, to
reflect any Company income tax liability recognized and incurred after the
Closing from such distributions (the “Net Amounts”) shall be
paid to the Seller and the PSP Participants in accordance with this Section
1.4. From and after the Closing, the Buyer shall cause the Company to
receive payments of such CJI Escrow Receivable and (i) the Buyer shall pay
to
the Seller 83% of the Net Amounts and (ii) the Buyer shall cause CJ to pay
to
the PSP Participants 17% of the Net Amounts (less applicable withholding),
in
each case within ten (10) days after receipt thereof by the
Company. The Buyer shall keep the Seller reasonably informed on the
status of payment of such CJI Escrow Receivable, and at Seller’s expense, take
actions reasonably requested by the Seller, and otherwise cooperate fully with
the Seller’s efforts, to obtain the CJI Escrow Receivable as more fully set
forth in Section 9.3 hereof.
1.5 Phantom
Stock
Plan Payments. At the Closing, the Buyer agrees to make either a
capital contribution or loan to the Company’s Subsidiary, CJ Systems Aviation
Group, Inc. (“CJ”), in an amount equal to $4,250,000, to assist
CJ in satisfying its obligations to the PSP Participants. The Buyer
shall cause CJ to make the payments required under the PSP. Within 30
days after the Closing, CJ shall pay to the PSP Participants $3,825,000 (less
applicable withholding). At the Closing, Buyer shall cause CJ to pay
$425,000 to the Escrow Agent for possible future payment to the PSP Participants
under the PSP and in accordance with the terms of the Escrow
Agreement.
1.6 Tax
Benefit Payments. The Seller and the Buyer acknowledge that
significant payments will be made by CJ to the PSP Participants under the PSP
at
or following the Closing, which will result in significant income tax deductions
to CJ and the Company’s consolidated group, and potentially to the Buyer and its
consolidated group following the Closing, and likely will result in net
operating losses for the Company’s consolidated group. On or before
the Closing, the Seller and the Buyer shall execute and deliver an agreement
(the “Tax Benefit Agreement”), the purpose of which will be to
provide to the Seller as additional purchase price for the Shares 83%, and
to
the PSP Participants under the PSP 17%, of the net tax benefits to the Company
consolidated group and/or the Buyer consolidated group arising from (i) any
net
operating loss or capital loss of the Company consolidated group in the period
March 1, 2007 through the Closing Date (the “Short Period”)
arising from payments under the PSP and (ii) any deductions to the Buyer
consolidated group for payments under the PSP after the Closing allowable as
deductions in taxable years after the Short Period, so long as Buyer’s tax basis
for the Purchase Price paid to Seller and for the assumption of the liability
to
the PSP Participants is not reduced thereby. While the Tax Benefit
Agreement must be mutually agreed upon as a condition to Closing, the Buyer
and
the Seller currently agree that the Tax Benefit Agreement shall include the
following concepts:
2
(a) All net
operating losses and capital losses not used in the Short Period shall be
carried back to the extent allowable to prior years of the Company consolidated
group. The Buyer and the Seller shall cooperate fully in promptly
filing all income tax returns for the Short Period and all carryback
applications. All income tax refunds for the Short Period and any
carryback years shall be treated as tax benefits to be paid (promptly following
receipt by the Company) by the Buyer to the Seller for the Shares (83%) and
by
CJ to the PSP Participants under the PSP (17%).
(b) Any such
net operating losses and capital losses not utilized in the Short Period or
through such carrybacks shall be carried forward for use by the Buyer
consolidated group. The Buyer consolidated group (through CJ) also
shall claim compensation deductions for payments under the PSP after the Closing
which are deductible in taxable years after the Short Period. The
Buyer shall use its reasonable efforts to utilize such losses and deductions
as
soon as reasonable. Any reduction in income taxes to the Buyer
consolidated group as a result of such losses and deductions which is not
(i) ultimately successfully challenged by the tax authorities and (ii)
offset by a subsequent increase in taxes arising as a result of any payment
under the PSP (including, but not limited to, any corresponding FICA taxes
imposed upon Buyer), shall be treated as tax benefits to be paid (promptly
following receipt by the Buyer consolidated group) by the Buyer to the Seller
for the Shares (83%) and by CJ to the PSP Participants under the PSP
(17%).
(c) Any income
taxes treated as tax benefits under (a) and (b) above shall not be considered
in
the Estimated Closing Balance Sheet or the Closing Balance Sheet and,
accordingly, for purposes of Section 1.7, Purchase Price
Adjustment.
1.7 Purchase
Price
Adjustment. At least five business days before the Closing, the
Seller shall cause to be delivered to the Buyer the following financial
statements of the Company: Consolidated financial statements of the Company
(the
“Interim Financial Statements”) for the period from
March 1, 2007 through August 31, 2007 (the “Interim
Period”), including a balance sheet, dated as of August 31, 2007
and a Statement of Operations for the Interim Period (the “Interim
Statement of Operations”), together with a calculation of the profit or
loss from operations, before income taxes (“Operating P&L”)
for such period, as reflected on the Interim Statement of Operations, after
deducting any gains or losses realized during the period from the sale of assets
or from the refinancing of any assets, but including the return of amounts
the
Company had on deposit with lessors and discounts the Company received from
the
purchase price of 2 EC-135 helicopters. The Seller and the Buyer
shall, in good faith seek agreement on an estimated Operating P&L for the
month of September 2007 which, when combined with the loss calculated for the
Interim Period shall be the “Interim Loss.” If the
parties are unable to agree on an estimated Operating P&L for the month of
September, the loss calculated for the Interim Period shall be deemed to be
the
Interim Loss. If the Interim Loss is greater than three million
dollars ($3,000,000), the Purchase Price shall be reduced by the amount of
such
excess (the “Excess Interim Loss”), tax benefit adjusted, and
all payments provided for in Sections 1.2 and 1.5 to the Seller, the PSP
Participants, and to the Escrow Agent shall be reduced by proportionate shares
of the amount of the Excess Interim Loss. The Interim Financial
Statements and the calculation of the Interim Loss shall be prepared in
accordance with GAAP, applied consistently with the audited financial statements
for the fiscal year ended February 28, 2007, and shall reflect all accrued
obligations of the Company through the date of the Interim Financial Statements,
but excluding vacation pay and other employee benefits accrued from March 1,
2007 to August 31, 2007 in accordance with past practices.
3
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY AND THE SELLER
The
Company and the Seller, severally and not jointly, represent and warrant to
Buyer that:
2.1 Due
Organization. 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 power and authority to carry on the Business as now conducted
and
to own, lease, and operate its assets.
2.2 Subsidiaries. Schedule 2.2,
sets forth the name, state of incorporation and principal office location of
each subsidiary of the Company (each, a
“Subsidiary”).
2.3 Due
Authorization. The Company and Seller have all requisite power and
authority to execute, deliver, and perform this Agreement and to perform the
transactions contemplated hereby. The execution, delivery, and
performance by the Company and Seller of this Agreement and the transactions
contemplated hereby have been duly and validly authorized by all necessary
action of the Company and Seller. This Agreement has been duly and
validly executed and delivered by the Company and Seller and constitutes the
valid and binding obligation of the Company and Seller, enforceable against
the
Company and Seller, in accordance with its terms. Except as set forth
on Schedule 2.3 and, in the case of clauses (a)-(c) below, except
for any such violations, conflicts, cancellations, defaults or accelerations
as
would not have a Material Adverse Effect, the execution, delivery, and
performance of this Agreement (as well as all other instruments, agreements,
certificates, or other documents contemplated hereby) by the Company or Seller,
does not (a) materially violate any federal, state, county, or local law, rule,
or regulation or any decree or judgment of any court or governmental authority
applicable to the Company or the Business, (b) violate or conflict with, or
permit the cancellation of, or constitute a default under, any agreement to
which the Company is a party, or by which the Company or the Business is bound,
(c) permit the acceleration of the maturity of any indebtedness of the Company
or Seller, or the acceleration of any obligation of the Company or Seller,
or
(d) violate or conflict with any provision of the certificate of incorporation,
of the Company.
2.4 Absence
of
Changes or Events. Except as set forth in Schedule 2.4,
since February 28, 2007, (i) the Company has conducted the Business in a manner
consistent with the requirements of Section 5.1 below and (ii) the Company
has not suffered any change, event, or condition which has had or would have
a
Material Adverse Effect, as defined in this Section below.
4
As
used
in this Agreement, “Material Adverse Effect” means any material
adverse change in or effect on the financial condition or operations of the
Business, taken as a whole, whether attributable to a single circumstance or
event or an aggregation of circumstances or events, but does not include any
change or effect resulting or derived from (a) general economic conditions
in
the United States, the European Union or Japan, (b) changes generally affecting
securities markets of the United States, the European Union or Japan, (c)
changes generally affecting the health care, aviation or aeromedical services
industries, (d) the acts or omissions of, or circumstances affecting, the Buyer,
(e) the transactions contemplated by this Agreement, or (f) arise out of or
are
attributable to the public announcement of the Agreement or the transaction
contemplated hereby.
2.5 Personal
Property.
(a) Marketable
Title. The Company and each Subsidiary have good title to (or valid
leasehold or contractual interests in) all its personal property, free and
clear
of all liens, claims, charges, set-offs, encumbrances or restrictions of every
kind (“Lien”), except for the Liens disclosed in
Schedule 2.5(a) (“Permitted Liens”).
(b) Condition
of Aircraft. Except as set forth on
Schedule 2.5(b), all helicopters and rotable equipment thereon of
the Company and each subsidiary are maintained in accordance with the Company’s
Federal Aviation Administration (“FAA”) approved maintenance
plan, and, since February 28, 2007, all aircraft and aircraft parts have been
overhauled and maintained in accordance with the Company’s and each Subsidiary’s
past practices and schedules.
(c) Machinery
and Equipment. Except as set forth on Schedule 2.5(c), to
the Company’s and Seller’s Knowledge, all material machinery, equipment and
tangible assets of the Company and each Subsidiary (excluding aircraft) being
used in the operation of the Business are sufficient for the operation of the
Business and are maintained in accordance with the Company’s and the
Subsidiary’s past practices.
(d) Inventories. The
inventory of the Company and each Subsidiary has been booked in accordance
with
GAAP, consistent with the Company’s and each Subsidiary’s past
practices. Except for items reflected in the allowance for excess and
slow moving inventory as set forth on the FY 2007 Balance Sheet, the Interim
Balance Sheet and the Closing Date Balance Sheet, the quantities of each
category of inventory are not excessive based on the Company’s and each
Subsidiary’s past practices.
2.6
Compliance with Licenses, Permits, Laws and Other
Instruments.
(a) Licenses
and Permits. Attached hereto as Schedule 2.6(a) is a list
of all federal, state, county, and local governmental licenses, certificates,
and permits held or applied for by the Company and each Subsidiary which are
material to the conduct of the Business, including, but not limited to, all
FAA
licenses and permits (“Authorizations”). The Company
and each Subsidiary have complied in all material respects with the terms and
conditions of all such Authorizations, and, to the Company’s and Seller’s
Knowledge, no material violation of any such Authorizations or the laws or
rules
governing the issuance or continued validity thereof has occurred. No
additional Authorizations are required from any federal government agency or
body thereof or, to the Company’s and Seller’s Knowledge, any state, county, or
local government agency or body thereof, in connection with the operation of
the
Business, except where the failure to obtain such Authorization would not
reasonably be expected to have a Material Adverse Effect. Except as
disclosed on Schedule 2.6(a), in the conduct of the Business,
neither the Company nor any Subsidiary has received any citation, notice or
order of non-compliance from any governmental agency under any law, rule,
regulation, ordinance, order, judgment, or decree (with respect to the Business)
within two years of the Closing Date.
5
(b) Conflicts. Except
as disclosed on Schedule 2.6(b), the conduct of the Business does
not conflict with the rights of any other person, firm, or corporation, violate
or, with or without the giving of notice or the passage of time, or both, will
violate, conflict with or result in a default, right to accelerate or loss
of
rights under, any terms or provisions of the certificate of incorporation or
bylaws, as presently in effect, of the Company or any Subsidiary, or any lien,
encumbrance, mortgage, deed of trust, lease, license, agreement, law, ordinance,
rule or regulation, or any order, judgment or decree to which the Company or
any
Subsidiary is a party or by which the Company or any Subsidiary is bound, except
for any such violation, conflict, default, acceleration or loss that would
not
have a Material Adverse Effect.
(c) Government
Consent. To the Company’s and Seller’s Knowledge, there is no proposed law,
governmental taking, condemnation or other proceeding which would be applicable
to the Business and which would have a Material Adverse Effect either before
or
after the Closing. No consent, qualification, order, approval, or
authorization of, or filing with, any governmental authority, including, without
limitation, any filings or notices required by applicable bulk sales law, if
any, is required in connection with the Company’s execution, delivery and
performance of this Agreement and the consummation of any transaction
contemplated hereby, except as set forth on Schedule 2.6(c) and
except where the failure to obtain such consent, qualification, order, approval
or authorization or to make such filing would not have a Material Adverse
Effect.
2.7 Contracts
and
Agreements. Attached hereto as Schedule 2.7 is a list of
all written or oral contracts, commitments, leases, and other agreements
(including, without limitation, promissory notes, loan agreements, and other
evidences of indebtedness, guarantees, agreements with distributors, suppliers,
dealers, franchisers and customers, and service agreements, but excluding
employment contracts, Employee Plans and Leases listed and described on
Schedules 2.8(c), 2.9(a) and 2.13(b), respectively) with respect to the
Business to which the Company and any Subsidiary is a party and pursuant to
which the obligations thereunder of either party thereto are, or are
contemplated as being, twenty-five thousand dollars ($25,000.00) or more per
annum, or the terms of which are in excess of five years (collectively, the
“Contracts”). To the Company’s and Seller’s
Knowledge, the Contracts are valid and enforceable and in full force and
effect. Except as set forth on Schedule 2.7, neither the
Company nor any Subsidiary is, and to the Company’s and Seller’s Knowledge, no
other party thereto is, in material default (and no event has occurred which,
with the passage of time or the giving of notice, or both, would constitute
a
material default) under any of the Contracts, and has not waived any material
right under any of the Contracts. No consent, qualification, order,
approval or authorization of, or
6
filing
with, any person is required in connection with the Company’s execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, except as set forth on
Schedule 2.7 and except where the failure to obtain such consent,
qualification, order, approval or authorization or to make such filing would
not
have a Material Adverse Effect.
2.8 Employees
and
Employment Contracts.
(a) List of
Employees. Schedule 2.8(a) contains a complete and
accurate list of the following information for each employee of the Company
and
each Subsidiary as of July 31, 2007, including each employee on leave of absence
or layoff status: name; department; location; hire date; rate of pay; the date
of last increase or decrease in salary, together with the amount thereof and
reason therefor; expense account unit; and status.
(b) Terminated
Employees. Schedule 2.8(b) contains a complete and
accurate list of each employee of the Company and each Subsidiary who has been
terminated or laid off, or whose hours of work have been reduced by more than
fifty percent (50%) by the Company or such Subsidiary, since February 28, 2007,
as well as the date of such termination, layoff or reduction in
hours. Except as disclosed on Schedule 2.8(b), neither
the Company nor any Subsidiary has any obligation of any kind to any of such
employees or former employees.
(c) Employee
Agreements. Except as listed and described on Schedule 2.8(c), the
Company and its Subsidiaries have (i) no agreements with any employees, written
or oral, concerning term of employment, compensation, benefits, or severance
and
(ii) no material written or oral employee policies, whether set forth in an
employee manual, employee statement of policy, work rules for any employee
or
group of employees, or otherwise.
(d) WARN
Act. Neither the Company nor any Subsidiary has violated the Worker
Adjustment and Retraining Notification Act (the “WARN Act”) or
any similar state or local legal requirement. During the ninety (90) day period
prior to the date of this Agreement, the Company and its Subsidiaries have
terminated eighteen (18) employees.
(e) Employee
Contracts Affecting Services. To the Company’s and Seller’s
Knowledge, no employee or independent contractor of the Company or any
Subsidiary is bound by any contract that purports to limit his ability (i)
to
engage in or continue or perform any conduct, activity, duties or practice
relating to the Business or (ii) to assign to the Company or any Subsidiary
any
rights to any invention, improvement, or discovery made during the course of
such employee’s employment or such independent contractor’s engagement, as the
case may be. To the Company’s and Seller’s Knowledge, no former or
current employee of the Company or any Subsidiary is a party to, or is otherwise
bound by, any Contract that materially adversely affected, affects, or will
affect the ability of the Company or Buyer to conduct the Business as presently
conducted by the Company.
2.9 Employee
Benefits.
(a) Employee
Benefit Plans. Set forth in Schedule 2.9(a) is a complete
and correct list of all “employee benefit plans” as defined by Section 3(3)
of the Employment Retirement Income Security Act (“ERISA”), all
specified fringe benefit plans as defined in Section 6039D of the Code, and
all other bonus, incentive-compensation, deferred-compensation, profit-sharing,
stock-option, stock-appreciation-right, phantom stock, stock-bonus,
stock-purchase, employee-stock-ownership, savings, severance, change-in-control,
supplemental-unemployment, layoff, salary-continuation, retirement, pension,
health, life-insurance, disability, accident, group-insurance, vacation,
holiday, sick-leave, fringe-benefit or welfare plan, and any other employee
compensation or benefit plan, agreement, policy, practice, commitment, contract
or understanding (whether qualified or nonqualified, currently effective or
terminated since February 28, 2007, written or unwritten) and any trust, escrow
or other agreement related thereto that (i) is maintained or contributed to
by
the Company or any other corporation or trade or business controlled by,
controlling or under common control with the Company (within the meaning of
Section 414 of the Code or Section 4001(a)(14) or 4001(b) of ERISA)
(“ERISA Affiliate”) and covers employees or former employees of
the Company or any Subsidiary, is a defined benefit pension plan subject to
Title IV of ERISA or is a pension plan subject to Section 412 of the Code
and has been maintained or contributed to in the last six (6) years by the
Company or any ERISA Affiliate, or is a defined benefit pension plan subject
to
Title IV of ERISA or is a pension plan subject to Section 412 of the Code
and with respect to which the Company or any ERISA Affiliate has or may have
any
liability, and (ii) provides benefits, or describes policies or procedures
applicable to any current or former director, officer, employee or service
provider of, the Company or any Subsidiary, or the dependents of any thereof,
regardless of how (or whether) liabilities for the provision of benefits are
accrued or assets are acquired or dedicated with respect to the funding thereof
(collectively the “Employee
Plans”). Schedule 2.9(a) identifies as such any
Employee Plan that is (w) a “Defined Benefit Plan” (as defined in
Section 414(l) of the Code); (x) a plan intended to meet the requirements
of Section 401(a) of the Code; (y) a “Multiemployer Plan” (as defined in
Section 3(37) of ERISA); or (z) a plan subject to Title IV of ERISA, other
than a Multiemployer Plan. Also set forth on Schedule 2.9(a) is a
complete and correct list of all ERISA Affiliates of the Company during the
last
six (6) years. Except for rights of certain employees under the PSP
Plan (as defined in Appendix A, and as disclosed on Schedule 2.9(a),
neither the Company nor any subsidiary has any obligation to any employee
arising out of the transactions provided for in this Agreement.
7
(b) Plan
Documents. The Company has made available to Buyer true, accurate and
complete copies of (i) the material documents comprising each Employee Plan
(or,
with respect to any Employee Plan which is unwritten, a written summary of
eligibility, participation, benefits, funding arrangements, assets and any
other
matters which relate to the obligations of the Company or any ERISA Affiliate);
(ii) all trust agreements, insurance contracts or any other funding instruments
related to the Employee Plans; (iii) all rulings, determination letters,
no-action letters or advisory opinions from the IRS, the U.S. Department of
Labor, the Pension Benefit Guaranty Corporation (“PBGC”) or any
other governmental agency or body thereof that pertain to each Employee Plan
and
any open requests therefor; (iv) the most recent actuarial and financial reports
(audited and/or unaudited) and the annual reports filed with any other
governmental agency or body thereof with respect to the Employee Plans during
the current year and each of the three preceding years; (v) all collective
bargaining agreements pursuant to which contributions to any Employee Plan(s)
have been made or obligations incurred (including both pension and welfare
benefits) by the Company or any ERISA Affiliate, and all collective bargaining
agreements pursuant to which contributions are being made or obligations are
owed by such entities; (vi) all securities registration statements filed with
respect to any Employee Plan; (vii) all contracts with third-party
administrators, actuaries, investment managers, consultants and other
independent contractors that relate to any Employee Plan, (viii) with respect
to
Employee Plans that are subject to Title IV of ERISA, the Form PBGC-1 filed
for
each of the three most recent plan years; and (ix) all summary plan
descriptions, summaries of material modifications and memoranda, employee
handbooks and other material written communications regarding the Employee
Plans.
8
2.10
Labor Disputes; Compliance.
(a) Labor Law
Compliance. Except as set forth in Schedule 2.10(a), the
Company and its Subsidiaries have complied with all legal requirements relating
to employment practices, terms and conditions of employment, equal employment
opportunity, nondiscrimination, immigration, wages, hours, benefits, collective
bargaining, occupational safety and health, and other requirements under
applicable federal and state laws, except where the failure to comply would
not
have a Material Adverse Effect. Except as set forth in
Schedule 2.10(a), neither the Company nor any Subsidiary is liable
for the payment of any taxes, fines, penalties, or other amounts, however
designated, for failure to comply with any of the foregoing legal
requirements.
(b) Labor
Relations. Except as disclosed in Schedule 2.10(b), (i)
neither the Company nor any Subsidiary is, or within the past five years been,
a
party to any collective bargaining agreement or other labor contract; (ii)
since
February 28, 2007, there has not been, there is not presently pending or
existing, and to Company’s or Seller’s Knowledge there is not threatened, any
strike, slowdown, picketing, work stoppage or material employee grievance
process involving the Company or any Subsidiary; (iii) to the Company’s or
Seller’s Knowledge, no event has occurred or circumstance exists that could
provide a reasonable basis for any work stoppage or other material labor
dispute; (iv) there is not pending or, to the Company’s or Seller’s Knowledge,
threatened against or affecting the Company or any Subsidiary any Proceeding
relating to the alleged violation of any legal requirement pertaining to labor
relations or employment matters, including any charge or complaint filed with
the National Labor Relations Board or any comparable governmental agency or
body
thereof, and, to the Company’s or Seller’s Knowledge, there is no organizational
activity or other labor dispute against or affecting the Company or any
Subsidiary or its facilities that would have a Material Adverse Effect; (v)
no
application or petition for an election of or for certification of a collective
bargaining agent is pending; (vi) no grievance or arbitration Proceeding exists
that would have a Material Adverse Effect; (vii) there is no lockout of any
employees by the Company or any Subsidiary, and no such action is contemplated
by the Company or any Subsidiary; and (viii) to the Company’s or Seller’s
Knowledge, there has been no charge of discrimination filed against or
threatened against the Company with the Equal Employment Opportunity Commission
or similar governmental agency or body.
2.11
Claims and Proceedings. Except as set forth in
Schedule 2.11, there are no claims, actions, suits, legal or
administrative proceedings or investigations (“Proceedings”)
pending or, to the Company’s or Seller’s Knowledge,
threatened, against or relating to the Business or the transactions contemplated
by this Agreement that would have a Material Adverse Effect, and to the
Company’s or Seller’s Knowledge,
there is no reasonable basis for the same. In particular, and without
limiting the generality of the preceding sentence, there are no Proceedings,
and
to the Company’s or Seller’s Knowledge,
no reasonable basis for any Proceeding, arising out of any alleged impropriety
in charging, billing or receiving payment for services rendered by the Company
or any Subsidiary to
patients prior to Closing.
9
2.12 Taxes. Except
as disclosed on Schedule 2.12, all federal, state, local and foreign
tax returns and reports of the Company or any Subsidiary required
by law to be filed on or before the Closing and which the failure to file would
have a Material Adverse Effect have been duly filed or duly extended to a date
in the future, all such returns and reports were true and correct in all
material respects, and all federal, state, local, foreign and any other taxes
(including additions to tax, interest and penalties), assessments, fees,
withholding taxes and other governmental charges with respect to the properties,
assets, income, sales, use or franchises of the Company or any Subsidiary relating
to the Business and due on or prior to the Closing have been
paid. Seller has made available to Buyer true and complete copies of
all federal, state, local and foreign income tax returns, examination reports
and statements of deficiencies assessed against or agreed to by the Company
or
any Subsidiary filed for the Company or any Subsidiary for
all tax years beginning on or after January 1, 2001. No claim has
ever been made by an authority in a jurisdiction where the Company or any
Subsidiary does not file Tax Returns that the Company or any Subsidiary is
or
may be subject to taxation by that jurisdiction. There are no liens
for taxes (other than taxes not yet due and payable) upon any of the assets
of
the Company or any Subsidiary. Neither the Company nor any Subsidiary
has waived any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency.
2.13 Real
Properties; Leases.
(a) Schedule 2.13(a)
sets forth a list containing a description of all interests in Real Property
presently owned, leased or otherwise used or occupied by the Company and a
Subsidiary, including the property located at the Allegheny County Airport
in
West Mifflin, Pennsylvania (the “Real
Property”). With respect to all Real Property owned by the
Company and a Subsidiary, (i) each parcel of such owned Real Property is owned
in fee simple with good and marketable title, free and clear of all Liens,
except as described in Schedule 2.13(a) or those that do not
materially adversely interfere with the use of such Real Property as currently
used, (ii) there are no material leases, subleases, licenses, concessions or
other agreements (written or oral) granting to any person the right to use
or
occupy such owned Real Property or any portion thereof, and (iii) there are
no
outstanding options, rights of first offer or rights of first refusal or any
other agreements pursuant to which the Company or a Subsidiary would be required
to sell the owned Real Property or any portion thereof or interest therein,
or
purchase any other real property. The Company and its Subsidiaries
have made available to Buyer complete and accurate copies of all material
documents and information of the Company and its Subsidiaries concerning such
owned Real Property.
(b) Attached
hereto as Schedule 2.13(b) is a list setting forth all leases under
which the Company and its Subsidiaries possess or use real property (the
“Real Property Leases”) and all leases under which the Company
or a Subsidiary possesses or uses items of tangible personal property that
are
material to conduct of the Company’s or a Subsidiary’s business (the
“Personal Property Leases”). True, correct and
complete copies of the Real Property Leases and Personal Property Leases
(collectively, the “Leases”) have been made available to
Buyer. To the Company’s and Seller’s Knowledge, except as set forth
on Schedule 2.13(b), the Leases are in full force and effect and
neither the Company nor any Subsidiary is in material default
thereunder. To the Company’s and Seller’s Knowledge, (i) the other
parties to the Leases are not in default thereunder and (ii) no facts or
circumstances have occurred which, with the passage of time or the giving of
notice, or both, would constitute a default by the Company or any Subsidiary
or
to the Company’s and Seller’s Knowledge, the other parties, under any of the
Real Property Leases or the Personal Property Leases.
10
(c) To the
Company’s and Seller’s Knowledge, (i) all structures and facilities on the real
properties listed on Schedule 2.13(a) and
Schedule 2.13(b) are equipped in substantial conformity with laws
and governmental regulations applicable to the Company or a Subsidiary, (ii)
the
zoning of each parcel of Real Property permits the presently existing
improvements and continuation of the business presently conducted thereon,
and
(iii) no zoning changes, and no condemnation or similar proceedings, are pending
or threatened against any of the Real Property listed on
Schedule 2.13(a) or Schedule 2.13(b), except in each
such case as would not have a Material Adverse Effect.
2.14 Insurance. Schedule 2.14
contains a listing of all policies of fire, general liability, worker’s
compensation, errors and omissions, malpractice and other types of insurance
maintained by or on behalf of the Company and its Subsidiaries, to provide
insurance protection for the assets and Business of the Company and its
Subsidiaries. Except as set forth in
Schedule 2.14 hereto, all of such policies are now in
full force and effect and those policies or other policies covering the same
risks and in substantially the same amounts have been in full force and effect
continuously for the past three (3) years, and provide coverage for the
properties, assets, and operations of the Company and its Subsidiaries in the
amounts and against the risks required to comply with all applicable laws and
regulations. Neither the Company nor any Subsidiary has received any
notice of cancellation or material amendment of any such policies; and to the
Company’s and Seller’s Knowledge, all material claims thereunder have been filed
in a timely fashion. The activities and operations of the Company and
its Subsidiaries have been conducted in a manner so as to conform in all
material respects to all applicable provisions of such insurance
policies.
2.15 Books
and
Records. The books of account and other financial records of the
Company and its Subsidiaries as they relate to the Business are complete and
correct in all material respects, and there have been no material transactions
involving the Business which properly should have been set forth therein and
which have not been accurately so set forth in all material
respects.
2.16 Financial
Statements. The Company has delivered to Buyer audited consolidated
balance sheets as of February 28, 2007 (the “FY 2007 Balance
Sheet”); February 28, 2006; and February 28, 2005 and consolidated
statements of operations and statements of cash flows for the fiscal years
then
ended. Except as set forth in Schedule 2.16, all of such
financial statements have been prepared from the books and records of the
Company and its Subsidiaries in accordance with GAAP, consistently applied
and
maintained throughout the periods indicated, and fairly present in all material
respects the financial condition of the Company and its Subsidiaries and results
of operations as of their respective dates and for the periods
indicated. As of the date of the FY 2007 Balance Sheet, the Company
and its Subsidiaries had no material liabilities, whether absolute or
contingent, liquidated or unliquidated in amounts, known or unknown, that would
be required to be reflected on such balance sheets in accordance with GAAP
but
that were not so reflected.
11
2.17
Accounts Receivable. All trade accounts receivable
that are reflected on the FY 2007 Balance Sheet, or the Interim Balance Sheet
and on the accounting records of the Company and its Subsidiaries as of the
Closing have been booked in accordance with GAAP, consistent with the Company’s
and its Subsidiaries’ past practices. Schedule 2.17
contains a complete and accurate list of all accounts receivable as of February
28, 2007. Such list shall set forth the aging of each such account
receivable.
2.18 Capitalization
of
the Company and its Subsidiaries. The Seller owns 100% of the Shares. Except
as set forth in Schedule 2.18, no person or entity other than the
Seller has any right granted by either Seller or the Company to
purchase, receive, acquire, control the right to vote, or receive the economic
benefit of any equity security or evidence of ownership in the Company,
including, but not limited to, by way of exercise or conversion of any option,
warrant or other security or rights. Except as set forth in
Schedule 2.18, the Seller owns directly, 100% of the economic and
governance interests of each Subsidiary. At the Closing, the Seller
will transfer title to the Shares to Buyer, free and clear of all
Liens. Except as set forth in Schedule 2.18, since
February 28, 2007, the Company has paid no dividend, repurchased any of its
capital stock or made any other distribution of Company assets to the Company’s
stockholders.
2.19 Brokers. Except
as set forth on Schedule 2.19, neither the Company nor Seller has
engaged, or caused to be incurred any liability for any brokerage or finders’
fees or agents’ commissions or like payments to, any finder, broker, or sales
agent in connection with the origin, negotiation, execution, delivery, or
performance of this Agreement or the transactions contemplated hereby, and
all
compensation of any kind payable to any such party shall be the sole
responsibility of Seller, and Buyer shall have no responsibility
therefor.
ARTICLE
III
BUYER’S
REPRESENTATIONS AND WARRANTIES
Buyer
represents and warrants to the Seller as follows:
3.1 Due
Organization. Buyer 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 to enter into and perform this
Agreement and the related agreements referred to herein and, following the
Closing, to operate the Business and own the Shares.
3.2 Due
Authorization. The execution, delivery and performance of this
Agreement has been duly authorized by all requisite corporate action of Buyer
and this Agreement has been duly and validly executed and delivered by Buyer
and
constitutes the valid and binding obligation of Buyer, enforceable against
Buyer
in accordance with its terms. The execution, delivery, and
performance of this Agreement (as well as all other instruments, agreements,
certificates or other documents contemplated hereby) by Buyer, will not (a)
violate any federal, state, county, or local law, rule, or regulation or any
decree or judgment of any court or governmental authority applicable to Buyer
or
its property; (b) violate or conflict with, or permit the cancellation of,
or
constitute a default under any agreement to which Buyer is a party or by which
it or its property is bound; (c) permit the acceleration of the maturity of
any
indebtedness of, or any indebtedness secured by the property of, Buyer; or
(d)
violate or conflict with any provision of the certificate of incorporation
or
bylaws of Buyer.
12
3.3 Financial
Ability to Perform. Buyer presently has sufficient funds
necessary to consummate the transactions contemplated hereby, and on the Closing
Date, Buyer will have sufficient funds to pay the Purchase Price and to satisfy
whichever of the Permitted Liens and Leases that the Buyer does not agree to
assume and pay following the Closing on the terms and conditions contemplated
by
this Agreement, provided that the date of Closing may be extended up to thirty
(30) days if Buyer so requests to permit Buyer to arrange financing to discharge
the Permitted Liens and Leases that are not assumed if the total liability
of
the Company under such Permitted Liens and Leases not assumed exceeds
$10,000,000.
3.4 Brokers. Buyer
has not engaged, or caused to be incurred any liability for any brokerage or
finders’ fees or agents’ commissions or like payments to, any finder, broker or
sales agent in connection with the origin, negotiation, execution, delivery,
or
performance of this Agreement or the transactions contemplated hereby, and
all
compensation of any kind payable to any such party shall be the sole
responsibility of Buyer, and neither the Company nor Seller shall have no
responsibility therefor.
ARTICLE
IV
SURVIVAL
OF REPRESENTATIONS AND WARRANTIES
Except
as
provided hereafter in this Article IV, the representations and warranties of
the
Seller set forth in this Agreement or in the Closing Certificates shall
terminate on the second (2nd) anniversary of the Closing Date. The
representations and warranties contained in Section 2.12, to the limited
extent related to the Seller’s filing of federal income tax returns and payment
of federal income taxes for periods ending on or before the Closing shall
survive the Closing for the statutory limitations period applicable to the
filing of tax returns and payment of income taxes under the Internal Revenue
Code of 1986, as amended and in effect on the date of this Agreement (the
“Code”). The representations and warranties of the
Seller set forth in Section 2.18 and the representations and warranties of
the Buyer set forth in this Agreement or the Closing Certificates shall survive
the Closing for the statutory limitations period under Delaware law that is
applicable to written contracts. In the event of any alleged breach
by Seller or the Company of any of their representations and warranties set
forth in this Agreement, Buyer agrees to first cause the Company to pursue
recovery under any applicable Company-held insurance policy. From and
after the Closing, Seller waives all claims against the Company in excess of
applicable insurance limits arising out of any alleged breach by the Company
of
any representation and warranty set forth in this Agreement, including without
limitation, any claim that Company is obligated to indemnify Seller because
of
such breach or that Buyer must first pursue recovery against the
Company. Nothing in this Article releases the Company from any of its
post-Closing obligations under this Agreement, including without limitation
those obligations set forth in Section 9.2 below.
13
ARTICLE
V
COVENANTS
OF THE PARTIES
5.1 Conduct
of
Business Pending Closing. From the date of this Agreement to the
Closing Date, the Company and the Seller shall
use commercially reasonable efforts to preserve substantially intact the
business and the business organization and present relationships with its
customers, suppliers and employees. Except as permitted under this
Agreement, the Company and its Subsidiaries will
not, and Seller will not cause or permit the Company or the Subsidiaries to,
take any action that would reasonably be expected to have a Material Adverse
Effect or materially hinder or delay consummation of the transactions
contemplated by this Agreement, or to engage in any practice, take any action,
or enter into any transaction outside the ordinary course of the Business as
conducted prior to the date of this Agreement, in each such case without the
prior written consent of Buyer, which consent shall not be unreasonably
withheld. Without limiting the generality of the foregoing, except as
set forth in Schedule 5.1 the Company and its
Subsidiaries:
(a) Will
not sell, lease, transfer, or assign any assets, tangible or intangible, other
than for a fair consideration in the ordinary course of business.
(b) Will
not enter into any agreement, contract, lease, (or license or series of related
agreements, contracts, leases and licenses) outside the ordinary course of
business.
(c) Will not
accelerate, terminate or cancel any agreement, contract, lease, or license
(or
series of related agreements, contracts, leases and licenses) involving more
than twenty-five thousand dollars ($25,000) to which the Company or any
Subsidiary is a party or by which it is bound.
(d) Will
not impose any Lien upon any of its assets, tangible or intangible, other than
Permitted Liens.
(e) Will
not make any capital investment in, any loan to, or any acquisition of the
securities or assets of, any other person outside the ordinary course of
business.
(f) Will not
issue any note, bond, or other debt security or create, incur, assume, or
guarantee any indebtedness for borrowed money or capitalized lease obligation
involving more than twenty-five thousand dollars ($25,000) individually or
one
hundred thousand dollars ($100,000) in the aggregate, other than under its
existing agreements or arrangements.
(g) Will not
merge with any other company, consolidate or sell or consent to the sale of
any
of their material assets or acquire any material assets outside the ordinary
course of business.
(h) Will not
increase the compensation or benefits payable to their employees other than
increases in the ordinary course of business consistent with the past
practices.
(i) Will
not make any change in their accounting practices, collection practices or
payment practices.
14
(j) Will
maintain insurance consistent with past practices and, unless comparable
insurance is substituted therefor or is not generally available to businesses
of
the type conducted by the Company or its Subsidiaries, not take any action
to
terminate or modify, or permit the lapse or termination of, the present
insurance policies and coverages as set forth in
Schedule 2.14.
(k) Will
promptly notify Buyer of any lawsuit or other legal proceeding that is
commenced, or that is threatened in writing, against any of them and that
relates to or arises out of the Business and, if adversely determined against
the Company or a Subsidiary, would reasonably be expected to have a Material
Adverse Effect.
(l) Will not
settle any action or proceeding on terms that are expected to have a Material
Adverse Effect, nor release, settle, compromise or relinquish any claims, causes
of action or rights involving more than fifty thousand dollars ($50,000),
individually, or one hundred thousand dollars ($100,000) in the aggregate which
the Company and its Subsidiaries may have against any other persons including,
without limitation, claims or rights to reimbursement or payment for services
rendered.
(m) Will
maintain their assets consistently with past practices, including maintenance
and overhaul of all aircraft parts in accordance with past practices and
schedules.
(n) Will
maintain their inventories of parts, supplies and other assets consistently
with
their past practices.
(o) Will use
commercially reasonable efforts to obtain and maintain all Authorizations,
the
absence or loss of which is expected to have a Material Adverse
Effect.
(p) Will not
take any action which would be expected to result in a violation of or in the
noncompliance with any laws or regulations applicable to the Company or any
Subsidiary, except where any such violation or non-compliance would not
reasonably be expected to have a Material Adverse Effect.
(q) Will
cooperate with Buyer and render to Buyer such assistance as Buyer may reasonably
request, at Buyer’s sole expense, in obtaining such governmental approvals as
Buyer considers necessary or appropriate.
(r) Will pay,
when due, and prior to the imposition or assessment of any interest, penalties
or liens by reason of the nonpayment of, all taxes due or assessed against
it,
except for any taxes being contested in good faith and for which reserves have
been established.
(s) Will give
prompt notice to Buyer of any notice of material default received by the Company
or any Subsidiary subsequent to the date of this Agreement under any material
instrument, contract, or agreement, or any Material Adverse Effect occurring
prior to the Closing.
(t) Will not
pay any dividend, repurchase any of the Company’s capital stock, or make any
other distribution by the Company to its stockholders.
15
5.2 Environmental
Assurances.. Seller shall have the following obligations with respect
to hazardous substances, hazardous wastes, hazardous materials or
environmentally-regulated materials, including but not limited to, any
asbestos-containing materials and/or lead paint.
(a) Phase II
ESA. Seller, at his sole cost, has engaged American Geosciences, Inc.
(“AGI”) to conduct an investigation to establish and document a current Phase II
Environmental Site Assessment for the Property (the “Phase II
ESA”) to evaluate the presence of Hazardous Substances (as defined
below) in soil, groundwater, buildings, and structures at the Real Property
of
the Company located at the Alleghany County Airport in West Mifflin,
Pennsylvania (the “Property”). Seller has previously
furnished copies of the AGI engagement agreements to Buyer. The Phase
II ESA shall be (a) certified to Buyer, Seller, and any other entities
designated by Seller and (b) completed (including delivery of the final written
report to Seller and Buyer) no later than August 15,
2007. Seller agrees that Seller’s Environmental Consultant shall
consult with Buyer (or Buyer’s Environmental Consultant if designated by Buyer)
regarding the Phase II ESA if requested by Buyer.
(b) Environmental
Remediation. Seller covenants and agrees that in the event the Phase
II ESA identifies the presence of “Hazardous Substances” (as defined below) in
buildings, structures, soil or groundwater on or under the Property at levels
in
excess of site specific cleanup standards pursuant to the applicable sections
of
the Pennsylvania Land Recycling and Environmental Remediation Standards Act
(“Act 2”) or other applicable laws or regulations, Seller shall
diligently perform the Remedial Work in compliance with Section 5.2(c), and
any deed acknowledgements under Act 2 shall be subject to Buyer’s
reasonable approval. If the Remedial Work, if any, has not been
completed at or prior to Closing, the Parties shall execute at Closing an access
agreement (the “Access Agreement”) in the form attached hereto as Exhibit G and
incorporated herein by this reference, allowing for Seller and its contractors
to have access to the Property after the Closing to complete the Remedial
Work. “Hazardous Substances” shall mean any
hazardous substances, hazardous wastes, hazardous materials or
environmentally-regulated materials, including but not limited to
asbestos-containing materials, lead paint, petroleum hydrocarbons or derivatives
thereof, petroleum additives and any substances regulated under Act 2, the
Solid
Waste Management Act, and the Hazardous Sites Cleanup Act.
(c) Remedial
Work. “Remedial Work” means all reasonable and necessary activities
performed in connection with completion of a cleanup action including the
investigation, containment, and remediation of Hazardous Substances identified
in the Phase II ESA to meet the requirements of applicable laws and regulations,
including Act 2, the Solid Waste Management Act, and the Hazardous Sites Cleanup
Act and shall include (i) the removal of any underground storage tank equipment;
(ii) the removal, where necessary, of contaminated soil or backfill and
restoration of the surface of the Property to the condition existing as of
the
Effective Date, ordinary wear and tear excepted; (iii) any ongoing monitoring
required by applicable law or regulations; and (iv) any required written
determinations from the Pennsylvania Department of Environmental Protection
(“DEP”). If permitted under Pennsylvania law, Seller
will seek a “No Further Action Letter” or similar determination from
DEP. Seller shall provide Buyer copies of any communications sent to
or received by Seller from the DEP. Seller will also provide to Buyer
weekly written reports of the progress of such Remedial Work until quarterly
groundwater monitoring commences (if any), and thereafter shall provide
quarterly written reports to Buyer. Seller shall provide written
notice to Buyer upon completion of Remedial Work.
16
(d) Disagreement. If
the Parties disagree as to the scope of Seller’s obligations, or Buyer alleges a
material breach by Seller of Seller’s obligations, under Sections 5.2(b) or
5.2(c) above, the Parties shall jointly appoint a Neutral Expert to resolve
the
disagreement within five (5) days after a written request of either Party
stating the scope of the disagreement or establishing the grounds of an alleged
material breach. A “Neutral Expert” is a licensed and practicing
attorney with at least ten (10) years of experience as an environmental attorney
in Pennsylvania, who shall not have been employed by either Party during the
last five (5) years. The Neutral Expert’s determination shall be
final and binding and subject to no rights of appeal.
(e) Indemnity. Seller
hereby agrees to indemnify, defend (with counsel reasonably acceptable to Buyer)
and hold Buyer, and its officers, directors, shareholders, members, partners,
employees, agents, successors and assigns (the “Buyer Indemnified
Parties”) harmless from and against any and all liabilities, claims,
causes of action, liens, administrative proceedings, judgments, damages, losses,
costs, expenses, fines, penalties or obligations of any kind, including
reasonable attorneys’ fees, made against, suffered or incurred by Buyer
Indemnified Parties which arise out of, are associated with or are in any way
related to: (a) the Hazardous Substances identified in the Phase II ESA, the
Remedial Work and any deed acknowledgement, and (b) the disposition of any
Hazardous Substances identified in the Phase II ESA removed from the Property,
unless caused by any of the Buyer Indemnified Parties. Seller shall
have no obligation to indemnify Buyer Indemnified Parties for contamination
other than the Hazardous Substances identified in the Phase II ESA, if any,
including but not limited to any contamination that occurs or is discovered
after the Closing Date, and Buyer hereby (i) releases the Company, and its
officers, directors, shareholders, employees, representatives, agents,
successors and assigns, and (ii) indemnifies, defends (with counsel
reasonably acceptable to Seller) and holds Seller, and his representatives,
agents, successors and assigns (collectively, the “Seller Indemnified
Parties”) harmless from and against any and all liabilities, claims,
causes of action, liens, administrative proceedings, judgments, damages, losses,
costs, expenses, fines, penalties or obligations of any kind, including
reasonable attorneys’ fees, made against, suffered or incurred by the Seller
Indemnified Parties with respect to claims relating to such contamination,
unless caused by any of the Seller Indemnified Parties.
(f) Survival. The
obligation to perform Remedial Work, if any, shall survive the
Closing. In addition, Seller’s indemnity obligations under
Section 5.2(e) shall survive the Closing for a period of one year after
Seller certifies in writing to Buyer that it has completed the Remedial Work
or,
in the event of a disagreement subject to the provisions of Section 5.2(e),
one year after the Neutral Expert determines Seller has completed the Remedial
Work. Buyer’s indemnity obligations under Section 5.2(e) will
survive the Closing without regard to any time limitations set forth in
Section 10.2(b)(iii).
5.3 Cooperation
by
the Company and Seller. The Company and its Subsidiaries shall, at the request
of Buyer, give reasonable assistance to the Buyer, and cause their personnel
to
provide reasonable assistance to and cooperation with the Buyer in (i) obtaining
all governmental and regulatory authorizations, consents and permits required
to
conduct the Business as presently conducted following the Closing and (ii)
contacting customers, suppliers, lenders and others with whom they have business
relationships, provided, however, that in no event shall Buyer have any
contact with any such customer, supplier, lender or other person or entity
with
whom the Company or a Subsidiary has business relationships without first
notifying the Company and allowing the Company to participate in the discussions
between Buyer and such person or entity.
17
5.4 Further
Assurances. In case at any time after Closing any further action is
necessary to complete the transfer of the Shares to Buyer, or otherwise to
carry
out the intent and purposes of this Agreement, Seller and the proper officers
of
each other party hereto shall take all such further action as any such party
may
reasonably request without any further consideration therefor.
5.5 Access
to Records Before Closing; Confidentiality of Information. Buyer will
proceed promptly to complete its due diligence investigation regarding the
operations, business, financial condition and management of the Company and
its
Subsidiaries. The Company shall
give or cause to be given, to Buyer and its Representatives reasonable access,
upon reasonable notice, to the Company’s and each subsidiary’s assets,
properties, titles, operations, contracts, corporate minute and other books,
records, files and documents to review and to make copies of all such materials,
and provide Buyer reasonable opportunities to meet with key employees of the
Business and to visit facilities of the Business, provided, however, that Buyer
agrees to request information Buyer requires only from Xxxxxxx X. Xxxxxxx or
a
person designated by him and not to contact any employee of Seller without
Xx.
Xxxxxxx’ prior consent. All materials copied by Buyer shall be
returned to the Company if the Closing of the transactions contemplated
hereunder fails to occur, and shall be maintained in confidence by Buyer prior
to the Closing in accordance with the terms of Article XII hereof.
5.6 Access
to Records After Closing. After the Closing Date, Buyer, on the one
hand, and Seller, on the other, will give, or cause to be given, to the other
party and their respective successors, during normal business hours and at
the
requesting party’s expense, such reasonable access to the officers and other
personnel, properties, titles, contracts, books, records, files and documents
of
Buyer, the Company and its Subsidiaries or the Seller, as the case may be,
as is
reasonably necessary to allow the requesting party to obtain information in
the
other party’s possession with respect to any reasonable business purpose, and to
make copies of such information to the extent reasonably necessary.
5.7 WARN
Act. From and after the Closing Date, Buyer shall not, and shall
cause the Company not to, take any action that would result in a violation
of
the WARN Act or any similar state or local legal requirement.
5.8 Buyer’s
Duty
to Inform. From the date of this Agreement through the Closing, Buyer
shall disclose to Seller and the Company in writing, promptly upon discovery
thereof (a) any material variances from the representations and warranties
contained in Article II and (b) any material error or omission in any Schedule
hereto.
18
ARTICLE
VI
CONDITIONS
TO OBLIGATION OF PARTIES TO CONSUMMATE CLOSING
6.1 Conditions
to
Buyer’s Obligations. The obligation of Buyer to consummate the
transactions contemplated by this Agreement is subject to satisfaction on or
prior to the Closing of the following conditions (any of which may be waived
by
Buyer in writing):
(a) Covenants,
Representations and Warranties. The Company and Seller shall have
performed in all material respects all obligations and agreements and complied
in all material respects with all covenants contained in this Agreement to
be
performed and complied with by each of them prior to or at the
Closing. The representations and warranties of the Company and Seller
set forth in Article II of this Agreement shall be accurate in all material
respects at and as of the Closing with the same force and effect as though
made
on and as of the Closing, except for (i) changes contemplated by this Agreement
or attributable to matters disclosed in the Schedules hereto; (ii) failures
that
would not, individually or in the aggregate, have a Material Adverse Effect;
and
(iii) those representation and warranties that address matters as of a
particular date, which, subject to clause (ii) above, need be true only as
of
such date.
(b) Consents. All
statutory requirements for the valid consummation by the Company and Seller
of
the transactions contemplated by this Agreement shall have been fulfilled and
all authorizations, consents, waivers and approvals of all federal, state,
local
and foreign governmental agencies and regulatory authorities required to be
obtained (as reasonably determined by Buyer) in order to permit Buyer to acquire
the Shares shall have been obtained in form and substance reasonably
satisfactory to Buyer.
(c) Material
Adverse Change. There shall have been no Material Adverse Effect
since February 28, 2007.
(d) Release of
Third Party Interests in the Company’s Assets. Except to the extent
disclosed on Schedules hereto, or as otherwise consented to in writing by Buyer,
any liens, encumbrances and/or security interests evidenced by financing
statements currently of record to perfect a security interest in the assets
of
the Company or its Subsidiaries in accordance with the Uniform Commercial Code
or duly recorded on title certificates of aircraft pursuant to regulations
of
the FAA shall be released.
(e) Litigation. No
action, suit or proceeding shall have been instituted before, or by, any
governmental body, to restrain, modify or prevent the consummation of the
transactions contemplated hereby, or to seek damages in connection with such
transactions.
6.2
Conditions to the Company’s and Seller’s
Obligations. The obligation of the Seller and the Company to
consummate the transactions contemplated hereby is subject to satisfaction
on or
prior to the Closing of the following conditions (any of which may be waived
by
Seller in writing):
(a) Covenants,
Representations and Warranties. Buyer shall have performed in all
material respects all obligations and agreements and complied in all material
respects with all covenants contained in this Agreement to be performed and
complied with by Buyer prior to or at the Closing. The
representations and warranties of Buyer set forth in Article III of this
Agreement shall be accurate in all material respects, at and as of the Closing,
with the same force and effect as though made on and as of the
Closing.
19
(b) Governmental
Consents. All statutory requirements for the valid consummation by
Buyer of the transactions contemplated by this Agreement shall have been
fulfilled and all authorizations, consents and approvals of all federal, state,
local and foreign governmental agencies and regulatory authorities required
to
be obtained in order to permit the consummation by Company and Seller (as
reasonably determined by Seller) of the transactions contemplated hereby shall
have been obtained.
(c) Litigation. No
action, suit or proceeding shall have been instituted before, or by, any
governmental body, to restrain, modify or prevent the consummation of the
transactions contemplated hereby, or to seek damages in connection with such
transactions.
(d) Waiver of
Consents. Buyer delivers to Seller its written agreement, in form and
substance reasonably acceptable to Seller’s counsel, to indemnify Seller from,
and waiving any claims against the Company and Seller for, the Company’s
inability to secure the consent of (i) any third party to a contract
pursuant to which the Company or any of its subsidiaries furnishes aviation
services to such third party or (ii) any holder of any Lien or assets of
the Company or its subsidiaries to the transactions contemplated under this
Agreement.
ARTICLE
VII
CLOSING
7.1 Closing. The
closing of the transactions contemplated hereby (the “Closing”)
shall occur at the offices of Xxxxx Xxxxxx & Xxxxxx LLP, 0000 Xxxxxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (or such other place as the parties
may agree) on September 30, 2007, to be effective as of 12:01 a.m. on October
1,
2007, or on such other date as the parties mutually agree (the “Closing
Date”).
7.2 Documents
to
be Delivered by the Company and Seller. The following documents shall
be delivered to Buyer at the Closing by the Company, and Seller:
(a) Assignment
of Shares. An assignment of the Shares to Buyer, duly executed by
Seller;
(b) Opinion. Opinion
of Xxxxxxx Xxxxx & Xxx PC, counsel to the Company and Seller, dated the
Closing Date, substantially in the form attached hereto as Exhibit
A;
(c) Non-Competition
Agreements. Non-competition agreements substantially in the form
attached hereto as Exhibits B-1, duly executed by Seller and
substantially in the form attached hereto as Exhibit B-2, duly executed
by certain senior management employees of the Company or CJ Systems specified
on
Schedule 7.2(c) (the “Non-Competition
Agreements”);
20
(d) Escrow
Agreement An escrow agreement substantially in the form attached
hereto as Exhibit C executed by the Company, the Seller and the Escrow Agent
(the “Escrow Agreement”);
(e) Certificate. Certificates
executed by Seller and an executive officer of the Company dated as of the
Closing Date, in substantially the forms attached hereto as Exhibit D and
Exhibit E, respectively;
(f) Transfer of
Records. All contracts, files, documents, data, records and
information of the Company relating to the Business; and
(g) Agreement
Concerning Phantom Stock Payments. A written agreement between Buyer
and Seller, signed by Seller, with respect to allocation of any tax benefits
realized by Buyer as a result of payment by the Company of amounts due under
the
Phantom Stock Plan to the Employees entitled to receive such
payments.
7.3 Obligations
of
Buyer. The following shall be delivered to the Seller at the Closing
by Buyer:
(a) Wire
Transfer to Seller. A cash payment of the amount specified
in Section 1.2 to be delivered to Seller at the Closing,
adjusted pursuant to Section 1.7, if applicable, in immediately available
funds by wire transfer to the accounts specified by Seller in writing delivered
to Buyer at least one (1) business day prior to the Closing Date, and evidence
of Buyer’s having furnished funds to CJ as provided for in Section
1.5.
(b) Escrow
Agreement. The Escrow Agreement, duly executed by Buyer and the
Escrow Agent, together with the delivery of two million five hundred thousand
dollars ($2,500,000), being the total Indemnification Escrow Amount deliverable
to the Escrow Agent, pursuant to Section 1.2 and Section 1.5, as adjusted
pursuant to Section 1.7, if applicable, in immediately available funds by wire
transfer to an account specified by the Escrow Agent;
(c) Non-Competition
Agreements. The Non-competition Agreements duly executed by Buyer;
and
(d) Certificate. A
certificate executed by an executive officer of Buyer, dated the Closing Date,
in substantially the form attached as Exhibit F hereto.
(e) Phantom
Stock Payment. The Agreement concerning Phantom Stock Payment
described in Section 7.2(g), signed by Buyer.
ARTICLE
VIII
TAXES
8.1 Sales,
Use, Transfer and Other Taxes. Any transfer taxes imposed on the
purchase, sale or transfer of the Shares as a result of the transactions
contemplated hereby shall be borne solely by Seller.
21
8.2 Tax
Periods
Ending on or before the Closing Date. The Company shall, at Seller’s
expense, prepare and file, or cause to be prepared and filed, all tax returns
for the Company for all periods ending on or before the Closing Date which
are
filed after the Closing Date. The Company will retain Love, Xxxxxxx
& Xxxxx, PC. to prepare and file the tax returns for the periods ending on
or before Closing consistent with past practice and applicable
law. The Company and Buyer shall prepare and provide each such tax
return described in the preceding sentence to the Seller no less than 30 days
prior to its due date, as such due date may be extended, and permit Seller
to
review and approve each such tax return prior to filing. The Company
and its Subsidiaries, and not the Seller, shall be liable for any taxes of
the
Company or its Subsidiaries due for the Short Period, provided, however, that
taxes due for the Short Period shall be taken into account in the Estimated
Closing Balance Sheet and the Closing Balance Sheet and, accordingly, for
purposes of Section 1.6.
8.3 Cooperation
on Tax Related Issues. Buyer, Seller, and the Company shall
cooperate fully, as and to the extent reasonably requested by the other party,
in connection with the filing of tax returns pursuant to this Section and
any audit, litigation or other proceeding with respect to taxes. Such
cooperation shall include the retention and (upon the other party's request)
the
provision of records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees available on a
mutually convenient basis to prepare and assist in the preparation of such
tax
returns and the tax returns prepared by the Company for such periods and to
provide additional information and explanation of any material provided
hereunder. The Company, any Subsidiary, and Sellers agree (A) to
retain all books and records with respect to Tax matters pertinent to the
Company and any Subsidiary relating to any taxable period beginning before
the
Closing Date until the expiration of the statute of limitations (and, to the
extent notified by Buyer or Seller, any extensions thereof) of the respective
taxable periods, and to abide by all record retention agreements entered into
with any taxing authority, and (B) to give the other party reasonable
written notice prior to transferring, destroying or discarding any such books
and records, and, if Buyer so requests, the Company and any Subsidiary, as
the
case may be, shall allow Buyer to take possession of such books and
records.
8.4 Tax
Audit. Buyer shall exercise sole control over any tax audit of the
Company for any taxable period ending on or prior to the Closing
Date. Seller shall cooperate in any manner reasonably requested by
Buyer, by providing all requested information in his
possession. Buyer shall promptly notify Seller in writing upon
receipt by the Company or any Subsidiary of a written notice of any pending
or
threatened tax audits or assessments for which the Seller may have liability
pursuant to this Agreement (“Tax Contest Claims”), provided, however, no failure
or delay by Buyer to provide notice of a Tax Contest Claim shall reduce or
otherwise affect the obligation of the Seller hereunder except to the extent
the
Seller is actually prejudiced thereby. Buyer and Seller shall
cooperate with each other in the conduct of any Tax Contest
Claim. The Seller shall have the right to control the conduct of any
Tax Contest Claim if the Seller agrees in writing that the Seller is liable
for
any tax payable (net of future tax benefits) with respect to such Tax Contest
Claim provided that: (i) the Seller shall keep Buyer informed regarding the
progress and substantive aspects of any Tax Contest Claim, including providing
Buyer with all written materials relating to such tax proceeding received from
the relevant taxing authority, (ii) Buyer shall be entitled to participate
in
any Tax Contest Claim at its sole expense, including having an opportunity
to
comment on any written materials prepared in connection with any Tax
Contest Claim and attending any conferences relating to any Tax
Contest Claim and (iii) the Seller shall not compromise or settle
any Tax Contest Claim, without obtaining Buyer’s prior written
consent, which consent shall not be unreasonably withheld.
22
ARTICLE
IX
POST-CLOSING
COVENANTS
9.1 Continuing
Insurance Coverage. Buyer
and the Seller agree that it is important to each party that insurance coverage
comparable to the coverage presently maintained by the Company and its
subsidiaries (which will remain in effect until the Closing), be maintained
for
six years after Closing, if obtainable, for the protection of the Company,
the
Buyer and the Seller, to the extent that this is reasonably
feasible. Buyer and Seller therefore agree that they will cooperate
in maintaining and/or obtaining insurance coverage of the kind, and at least
in
the amount, that has been maintained by the Company and its subsidiaries in
the
past, including run-off coverage for the Seller and officers and directors
of
the Company and its subsidiaries, including the subsidiaries referred to in
the
Landmark Agreement and the CHC Agreement, as defined in Section 9.2
(collectively, the “D&O Indemnified Parties”), if obtainable. If
the insurance presently in force is maintained to provide the desired coverage,
the Buyer and the Seller will request that the insurers providing such insurance
advise the parties as to what portion of the premium it deems to be allocable
to
pre-closing events, and what portion is allocable to events that may be covered
by events that occur after the Closing. The Seller agrees to
reimburse the Buyer for that portion of the premium that is deemed allocable
to
pre-closing events. Any recovery that may be realized under any such
insurance that is obtained by the Company and is related to or arises out of
pre-closing events shall be deemed to reduce or offset any amounts that might
be
payable pursuant to Section 10.2 by reason of Seller’s indemnification of
Buyer for losses or claims that arose as a result of events or transactions
prior to the Closing.
With
respect to events or circumstances relating to the Company or any Subsidiary
that occurred or existed prior to the Closing that are covered by insurance
policies of the Company or any Subsidiary, (a) Seller and the current directors
and officers of the Company or any Subsidiary may make claims under such
policies (including, without limitation, any directors’ and officers’ liability
insurance policy) to the extent permitted thereunder and (b) Buyer shall pursue
any claim on behalf of such persons for any claim attributable to the Company
or
any Subsidiary at the request of Seller. With respect to any open
claim against the insurance policies of the Company or any Subsidiary reported
prior to the Closing, Buyer will remit any net proceeds it, the Company or
any
Subsidiary realizes from such claims to Seller upon full and final settlement
of
such claim.
9.2 Previous
Sale
Transactions. So
long as any claim for indemnification may be made against the Company or Seller
under either the Purchase Agreement dated December 22, 2005 among Piedmont
Hawthorne Aviation, L.L.C. d/b/a Landmark Aviation, the Company and certain
affiliates and Seller (“Landmark Agreement”) or the Share Purchase Agreement
dated November 30, 2006 among CHC Helicopters International Inc., the Company
and Seller (“CHC Agreement”), Buyer shall, and shall cause the Company and each
Subsidiary to: (i) give immediate written notice of any claim received for
indemnification or otherwise under the Landmark Agreement or the CHC Agreement;
(ii) cooperate with Seller, at Seller’s expense, in investigating, defending or
settling any such claim; (iii) consent to the settlement of any claim that
is
covered by the Escrow Agreement entered into by the Company and the Seller
in
conjunction with the Landmark Agreement; and (iv) maintain in full force and
effect, at Seller’s expense the environmental policy referred to in Article IX
of the CHC Agreement. Seller shall indemnify and hold harmless the
Buyer, the Company and its Subsidiaries from any claims, losses or liability
that any of them incur arising out of any such previous sale
transaction.
23
9.3 CJI
Escrow Receivable. In
accordance with Section 1.4, Buyer will cause the Company to distribute to
Seller and the PSP Participants the amounts that are received (net of taxes
payable) by the Company after the date of this Agreement on payment of the
CJI
Escrow Receivable.
ARTICLE
X
INDEMNIFICATION
10.1 Indemnification
of
Seller. Buyer agrees that notwithstanding the Closing and regardless
of any investigation made at any time by or on behalf of the Seller or of any
information Seller may have in respect of such investigation, Buyer will
indemnify and hold harmless the Seller and each officer, director and affiliate
of Seller (collectively, the “Seller Indemnified Parties”) from
and against any and all damages, losses, claims, liabilities, demands, charges,
suits, penalties, costs and expenses (including court costs and reasonable
attorneys’ fees and expenses incurred in investigating and preparing for any
litigation or proceeding) (such amounts, net of any insurance proceeds and
net
of any tax benefits associated with the payment of any such amounts,
collectively being referred to herein as “Indemnifiable
Costs”), that any Seller Indemnified Party may sustain or to which any
of the Seller Indemnified Parties may be subjected, arising out of (a) any
misrepresentation, breach or default by Buyer of or under any of the
representations and warranties, covenants, agreements or other provisions of
this Agreement or any agreement or document executed in connection herewith;
or
(b) any failure by the Buyer duly to perform or observe any term, provision,
covenant or agreement in this Agreement on the part of the Buyer to be performed
or observed. Notwithstanding the foregoing, Indemnifiable Costs shall
not include (a) a Seller Indemnified Party’s own consequential or special
damages, but shall include any consequential or special damages of a third
party
for which Seller may be liable or (b) claims based on a fact or event occurring
subsequent to Closing (whether or not also occurring prior to the date of this
Agreement) which fact or event is disclosed in the Schedules.
10.2 Indemnification
of
Buyer.
(a) General. The
Seller agrees that notwithstanding the Closing and regardless of any
investigation made at any time by or on behalf of Buyer or of any information
Buyer may have in respect of such investigation, the Seller will indemnify
and
hold harmless Buyer and each officer, director and affiliate of Buyer
(collectively, the “Buyer Indemnified Parties”) from and
against any and all Indemnifiable Costs net of any reserve therefore on the
Closing Balance Sheet, that any of the Buyer Indemnified
Parties may sustain, or to which any Buyer Indemnified Party may be subjected,
arising out of (i) any misrepresentation, breach or default by the Company
or
the Seller of or under any of the representations and warranties, covenants,
agreements or other provisions of this Agreement or any agreement or document
executed in connection herewith; or (ii) any failure by the Company or the
Seller duly to perform or observe any term, provision, covenant or agreement
in
this Agreement on the part of the Company or the Seller to be performed or
observed. Notwithstanding the foregoing, Indemnifiable Costs shall
not include (a) a Buyer Indemnified Party’s own consequential or special
damages, but shall include any consequential or special damages of a third
party
for which Buyer may be liable or (b) claims based on a fact or event occurring
prior to Closing (whether or not also occurring prior to the date of this
Agreement) which fact or event is disclosed in the Schedules.
24
(b) Limitations.
The liability of the Seller to Buyer under Section 10.2(a) shall be subject
to the following limitations:
(i) Deductible.
Seller shall not be liable for an Indemnifiable Cost unless the aggregate amount
of Indemnifiable Costs incurred by the Buyer Indemnified Parties exceeds the
sum
of one hundred thousand dollars ($100,000) (the “Deductible”) prior to the
expiration of the Applicable Limitations Period, hereinafter defined, and then
only to the extent of such excess (but subject to Sections 10.2(b)(ii) and
(iii)
below.
(ii) General
Liability Ceiling; Limitations on Recovery. The aggregate
liability of the Seller for Indemnifiable Costs shall not exceed the Purchase
Price. The limitation set forth in the preceding sentence shall not
apply to indemnification for damages arising out of a breach of the
representations and warranties contained in Section 2.12, to the limited
extent they relate to the Seller’s filing of federal income tax returns and
payment of federal income taxes for periods ending on or before the Closing,
and
or a breach of the representations and warranties in
Section 2.19.
(iii) Time
Limitations. No claim for indemnification of Indemnifiable Costs may be
asserted against Seller unless a Buyer Indemnified Party gives written notice
(a
“Notice of Claim”) of the claim to Seller, which notice shall
specify in reasonable detail the basis for such claim and shall be accompanied
by documentation supporting the claim, by no later than the expiration of the
Applicable Limitation Period. “Applicable Limitation
Period” shall mean two (2) years, ending on the second anniversary of
the Closing Date, except that the “Applicable Limitation Period” for claims for
indemnification arising from a material breach of the representations and
warranties contained in Section 2.12, to the limited extent related to the
Seller’s filing of federal income tax returns and payment of federal income
taxes for periods ending on or before the Closing, shall mean the statutory
limitations period applicable to the filing of tax returns and payment of income
taxes under the Code. If the Buyer Indemnified Party asserting any such claim
for Indemnifiable Costs timely makes such a claim, then, subject to the
Deductible and the provisions of Section 10.2(b)(ii) and (iii) and any
other applicable conditions to recovery, the expiration of the Applicable
Limitations Period shall not, by itself, prevent such Buyer Indemnified Party
from recovering the full amount of such Indemnifiable Costs.
10.3
Right of Setoff. At the time that Buyer sends a Notice of Claim
with respect to Indemnifiable Costs, Buyer may, by further written notice to
Seller, set off the amount of such Indemnifiable Costs against payment of any
amounts that may then be payable to Seller under Section 1.4 to the extent
that such Indemnifiable Costs are subject to recovery by Buyer Indemnified
Parties pursuant to Section 10.2(b)(ii). The exercise of such
right of setoff by Buyer in good faith, whether or not ultimately determined
to
be justified, shall not constitute an event of default under this
Agreement. Seller reserves the right to dispute and contest any such
setoff and to recover any amounts improperly set off. Any such
dispute shall be pursued in accordance with Section 13.9.
25
10.4
Cooperation.
(a) Notice. Any
party seeking indemnification under this Article X (each, an
“Indemnified Party”) will give prompt written notice to the
party or parties from whom it seeks indemnification (collectively, the
“Indemnitor”) of any assertion, claim or demand which such
Indemnified Party discovers or of which notice is received after the Closing
and
which might give rise to a claim by such Indemnified Party against the
Indemnitor under this Article X, stating in reasonable detail the nature, basis
and amount thereof.
(b) Claims
for Money Damages. In case of any claim for money damages by a third
party, any suit for money damages, any claim for money damages by any
governmental body, or any legal, administrative or arbitration proceeding with
respect to which the Indemnitor may have liability for money damages under
the
indemnity agreements contained in this Article X, the Indemnitor shall be
entitled to participate therein, and to the extent desired, to assume the
defense thereof, and after notice from the Indemnitor of its election so to
assume the defense thereof, the Indemnitor will not be liable to the Indemnified
Party for any legal or other expenses subsequently incurred by the Indemnified
Party in connection with the defense thereof, other than reasonable costs of
investigation, unless the Indemnitor does not actually assume the defense
thereof following notice of such election. Buyer or Seller shall make
available to the other and its attorneys and accountants, at all reasonable
times, all executives and other personnel, books and records relating to such
suit, claim or proceeding, and Buyer and Seller will render to each other such
assistance as may reasonably be required of each other in order to insure proper
and adequate defense of any such suit, claim or proceeding. No
Indemnified Party will make any settlement of any claim which might give rise
to
liability of the Indemnitor hereunder for money damages under the indemnity
agreements contained in this Article X without the consent of the Indemnitor,
which consent shall not be unreasonably withheld. If the Indemnitor
shall desire and be able to effect a monetary compromise or settlement of any
such claim which settlement or monetary compromise shall fully and finally
relieve the Indemnitor of any liability in connection with such cause of action
and claim and the Indemnified Party shall refuse to consent to such compromise
or settlement (to the extent it relates to money damages), then the liability
of
the Indemnitor to the Indemnified Party with respect to settlement of such
claim
shall be limited to the amount so offered in compromise or
settlement.
(c) Any
payment in respect of any Indemnifiable Cost shall, to the extent permitted
by
applicable law, be treated as an adjustment of the Purchase Price for all tax
purposes.
26
ARTICLE
XI
TERMINATION
11.1 Termination
of Agreement. This Agreement may, by written notice given at or prior
to Closing in the manner hereinafter provided, be terminated or
abandoned:
(a) By
mutual consent of Buyer and Seller;
(b) By
Seller if the Closing has not occurred on or before September 30, 2007 due
to a
failure of any of the conditions specified in Section 6.2 (other than
Section 6.2(c));
(c) By
Seller if there has been a material default or breach by Buyer with respect
to
the performance of any of Buyer’s material covenants and agreements contained
herein, or with respect to the correctness of any of Buyer’s material
representations and warranties contained herein (each, a “Material Buyer
Default”) and such default or breach persists for 10 business days of
more after written notice thereof is given;
(d) By
Buyer if the Closing has not occurred on or before September 30, 2007 due to
a
failure of any of the conditions specified in Section 6.1 (other than
Section 6.1(f));
(e) By
Buyer if there has been a material default or breach by the Company . or Seller
with respect to the performance of any of the Company’s, or Seller’s material
covenants and agreements contained herein, or with respect to the correctness
of any of the Company’s or Seller’s material representations and
warranties contained herein (each, a “Material Seller Default”)
and such default or breach persists for 10 business days or more after written
notice thereof is given; or
(f) By
Buyer, or by Seller if the Closing has not occurred on or before September
30,
2007; provided, however, that such date shall be extended
for such additional time as may be necessary [(but in no event beyond October
31, 2007) (i) to obtain any authorization, consent, waiver and approval of
any
federal, state, local and foreign governmental agency or regulatory authority
required to be obtained (as reasonably determined by Buyer) in order to permit
Buyer to acquire the Shares or (ii) to arrange additional financing should
a
substantial portion of the Company’s lenders and lessors who hold Liens with
total obligations in excess of $10,000,000 do not permit the continuation of
the
Company’s debt after the Closing.
11.2 Procedure
Upon
Termination. In the event of termination of this Agreement by Buyer,
the Company, or Seller pursuant to Section 11.1, written notice thereof
shall forthwith be given to the other parties hereto and the transactions
contemplated herein shall be abandoned without further action by Buyer, the
Company, or the Seller. In addition, if this Agreement is terminated
as provided herein:
(a) Each
party will redeliver all documents, work papers and other material of any other
party relating to the transactions contemplated hereby, whether so obtained
before or after the execution hereof, to the party furnishing the
same.
(b) All
Confidential Information shall continue to be subject to the provisions of
Article XII of this Agreement, which provisions shall survive any such
termination.
27
(c) Upon
a termination of this Agreement pursuant to Section 11.1(a), the respective
obligations of the parties hereto under this Agreement (other than under
Sections 11.2(a) and (b) above and Section 11.4 below) shall terminate and
no party shall have any liability whatsoever to any other party hereto by reason
of such termination. Any termination of this Agreement by Buyer
pursuant to Section 11.1(d) or (e) due to a Material Seller Default, or by
Seller pursuant to Section 11.1(b) or (c) due to a Material Buyer Default,
shall not relieve Seller or the Buyer (as the case may be) of its liability
hereunder to the non-defaulting party. If, notwithstanding a Material
Seller Default or a Material Buyer Default, the Buyer (in the case of a Material
Seller Default), or Seller (in the case of a Material Buyer Default) closes
the
transactions contemplated hereby, such action by the non-defaulting party or
parties shall constitute a waiver of such Material Seller Default or Material
Buyer Default, as the case may be. Notwithstanding anything to the
contrary contained herein, in no event shall the Seller be liable to Buyer
by
reason of a material breach of this Agreement by the Seller for any
consequential damages, special damages or lost profits or lost business
opportunities arising from such breach.
11.3 Specific
Performance Upon Termination. Buyer, on the one hand, and the Company and
Seller, on the other hand, acknowledge that because an award of monetary damages
would be inadequate for any breach of this Agreement by the other party, Buyer,
the Company and Seller, as the case may be, shall be entitled, without the
requirement of posting a bond or other security, to equitable relief, including
injunctive relief and specific performance. Such remedy is not
exclusive, but in addition to all other remedies available to such parties
at
law or equity, as such remedies may be limited hereunder.
11.4 Non-Solicitation. Upon
any termination of this Agreement, and for a period of 12 months thereafter,
Buyer agrees that it shall not:
(a) solicit,
including responding to any “RFP” received after July 31, 2007, (a) any customer
of the Company or any Subsidiary disclosed in the Schedules or (b) any employee
of the Company or any Subsidiary; and
(b) accept
any contract from any customer of the Company or any Subsidiary disclosed in
the
Schedules except pursuant to an “RFP” received after July 31,
2007.
ARTICLE
XII
CONFIDENTIALITY
12.1 Confidentiality
Covenants. Buyer, the Company and Seller each acknowledge that they may have
received access to Confidential Information (as hereinafter defined) of the
others in the course of investigations and negotiations prior to
Closing. Each party who receives any Confidential Information (a
“Receiving Party”) from any other party hereto (the
“Disclosing Party”), may disclose any such Confidential
Information to such party’s employees, attorneys, accountants, financial
advisors or agents or representatives that have a need to know such Information
to facilitate or assist with the consummation of the transactions contemplated
hereby (collectively, “Representatives”). Subject to
the foregoing exception, and the exception hereinafter set forth in
Section 12.2 below, (i) a Receiving Party shall keep, and shall cause its
Representatives to keep, all Confidential Information received from a Disclosing
Party hereunder strictly confidential and shall not disclose, and shall cause
its Representatives not to disclose, any such Confidential Information to any
third party; and (ii) any Receiving Party and its Representatives shall not
make
any uses of Confidential Information received from a Disclosing Party except
to
facilitate or assist with the consummation of the transactions contemplated
hereby. “Confidential
Information” shall include any business,
financial, technical or other information, including, but not limited to,
business plans, forecasts, marketing plans or initiatives, customer, client
and
vendor lists, training materials developed by the Disclosing Party, information
regarding the identities, qualifications and compensation being paid to key
employees, information received from customers, vendors or clients with the
expectation, whether explicit or implicit, that such information would be
protected from disclosure or dissemination to third parties, and other
information the value of which to the Disclosing Party is dependent on the
non-disclosure of such information; provided, however, that it
shall not include information that, although disclosed or made available by
a
Disclosing Party or any of its Representatives to a Receiving Party or any
of
its Representatives, (i) can be obtained by persons not subject to
confidentiality or use restrictions from public sources, including periodicals,
government and industry publications and other media that is readily accessible
to the public or competitors of the Disclosing Party, (ii) has been disclosed
by
the Disclosing Party or any of its Representatives to any unaffiliated third
parties without the imposition of any restrictions or prohibitions on disclosure
or use thereof and has been, as a result, disclosed by that third party to
other
third parties, or (iii) information that the Receiving Party can demonstrate
convincingly was in its possession prior to its disclosure to the Receiving
Party by the Disclosing Party or any of its Representatives; provided,
however, that the Receiving Party had not obtained possession of such
Confidential Information from any one that the Receiving Party knew or should
have known was subject to restrictions on its right to disclose such information
to the Receiving Party, either pursuant to an agreement or by reason of his
position or relationship with the Disclosing Party.
28
12.2 Disclosure
Pursuant to Legal Process. If a Receiving Party is required by
subpoena or other legal process, or by laws applicable to it, to disclose or
produce any Confidential Information belonging to a Disclosing Party, then,
the
Receiving Party shall (i) provide the Disclosing Party prompt notice thereof
and
copies, if possible, and, if not, a description, of the Confidential Information
requested or required to be produced so that the Disclosing Party may seek
an
order to quash such subpoena or other legal process or an appropriate protective
order or may elect to waive compliance with the provisions of this Article
XII
as to any portion or all of such Confidential Information; (ii) consult with
the
Disclosing Party as to the advisability of taking legally available
steps to quash or narrow such request, and (iii) provide such reasonable
cooperation as the Disclosing Party may request in connection with efforts
by
the Disclosing Party to quash the subpoena or other legal process or to obtain
a
protective order with respect to the Confidential Information being
sought. If, in the absence of a protective order or the receipt of a
waiver hereunder, a Receiving Party is nonetheless, in the opinion of his legal
counsel, compelled to disclose or produce any such Confidential Information
of
the Disclosing Party to any tribunal legally authorized to request and entitled
to receive such Confidential Information or to any government agency with which
the Receiving Party is required by law to file any such Information, the
Disclosing Party may disclose or produce such Confidential Information to such
tribunal or government agency, notwithstanding the fact that such information
may, as a result become available to the public, without incurring liability
hereunder to the Disclosing Party; provided, however, that the
Receiving Party shall give the Disclosing Party written notice of the
Confidential Information to be so disclosed or produced as far in advance of
its
disclosure or production as is practicable and shall use his commercially
reasonable efforts to obtain, to the greatest extent practicable, an order
or
other reliable assurance that confidential treatment will be accorded to such
Confidential Information so required to be disclosed or
produced. Notwithstanding the foregoing, the parties agree that the
Buyer may file a report on Form 8-K with the Securities and Exchange Commission
regarding the transactions contemplated by this Agreement and file as exhibits
thereto, this Agreement and all schedules and exhibits hereto.
29
12.3 Termination
of Confidentiality Obligations. The obligations of Buyer under this
Article XII shall terminate at the Closing with respect to the Confidential
Information of the Company. The obligations of the Buyer hereunder
with respect to the Confidential Information of the Seller and the obligations
of Seller hereunder, which shall be several and not joint, with respect to
Confidential Information of the Company or Buyer, shall in each case survive
the
Closing for a period of two (2) years thereafter. In the event of a
termination of this Agreement, the respective obligations of the Company and
Seller with respect to Confidential Information of Buyer and the obligations
of
Buyer with respect to Confidential Information of the Company and Seller shall
survive for a period of two (2) years from the date of such
termination.
ARTICLE
XIII
MISCELLANEOUS
13.1 Modifications;
Waiver. Any amendment, change or modification of this Agreement shall
be void unless in writing and signed by all parties hereto. No
failure or delay by any party hereto in exercising any right, power or privilege
hereunder, and no course of dealing between or among any of the parties, shall
operate as a waiver of any such right, power or privilege. No waiver
of any default on any one occasion shall constitute a waiver of any subsequent
or other default. No single or partial exercise of any such right,
power or privilege shall preclude the further or full exercise
thereof.
13.2 Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given when personally delivered, mailed by certified
mail, return receipt requested, or via Federal Express or similar overnight
courier service, or by facsimile. Such notices or other
communications shall be sent to the following addresses, unless other addresses
are subsequently specified in writing:
Buyer:
Air
Methods Corporation
0000
X.
Xxxxxx
Xxxxxxxxx,
XX 00000
Attention: President
and CEO
Fax
No.: (000) 000-0000
Tel.
No.: (000) 000-0000
30
with
a
copy to:
Xxxxx
Xxxxxx & Xxxxxx LLP
0000
Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
Xxxxxxxx 00000
Attention: Xxxxxx
X. Xxxxxxxx, Esq.
Fax
No.: (000) 000-0000
Tel.
No.: (000) 000-0000
Company:
FSS
Airholdings, Inc.
c/o
Watkins Xxxxx & Xxx P.C.
Two
Gateway Center, 17 East
000
Xxxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxxxxxx 00000
Attention: Xxxxxxx
X. Xxxxxxx, Secretary
Fax
No.: 000-000-0000
Tel.
No.: 000-000-0000
Seller:
Xxxx
X.
Xxxxxxx
000
Xxxxxx Xxxx
Xxxxxxxx,
Xxxxxxxxxxxx 00000
Fax
No.: 000-000-0000
Tel.
No.: 000-000-0000
in
case
of notice to Seller, with a copy to:
Xxxxxxx
Xxxxxxx
c/o
Watkins Xxxxx & Xxx P.C.
Two
Gateway Center, 17 East
000
Xxxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxxxxxx 00000
Fax
No.: 000-000-0000
Tel.
No.: 000-000-0000
13.3 Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original but all of which counterparts collectively shall constitute
one instrument. Signatures may be exchanged by facsimile, with
original signatures to follow. Each party hereto agrees that it will
be bound by its own signature and that it accepts the facsimile signatures
of
the other parties hereto.
13.4 Expenses. Except
as specifically set forth elsewhere in this Agreement, each of the parties
hereto will bear all costs, charges and expenses incurred by such party in
connection with this Agreement and the consummation of the transactions
contemplated herein. Buyer shall reimburse Seller for his reasonable attorneys’
fees (maximum $100,000) incurred in connection with the transaction contemplated
hereby.
31
13.5 Binding
Effect; Assignment; No Third Party Rights. This Agreement shall be
binding upon and inure to the benefit of Buyer, the Company, Seller and their
respective representatives, successors, and permitted assigns; provided,
however, that no party may assign his, her or its rights or obligations
under this Agreement or transfer such rights or obligations by operation of
law
as a result of any change of control transaction involving any such entity
without the prior written consent of the other parties. Nothing
expressed or referred to in this Agreement shall be construed to give any person
other than the parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement, except such rights as shall inure to a successor or permitted
assignee pursuant to this Section 13.5.
13.6 No
Strict Construction. The language used in this Agreement shall be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction shall be applied against any party
hereto.
13.7 Entire
and Sole Agreement. This Agreement, together with the Schedules and
the agreements and documents referred to herein, constitute the entire agreement
between the parties hereto and supersedes all prior agreements, negotiations,
representations, warranties, statements, promises, information, arrangements
and
understandings, whether oral or written, express or implied, with respect to
the
subject matter hereof, including the LOI.
13.8 Governing
Law. This Agreement and its validity, construction, enforcement, and
interpretation shall be governed by the substantive laws of the State of
Delaware, without regard to conflicts of law.
13.9 Jurisdiction;
Service Of Process; Waiver Of Trial By Jury.
(a) Any
proceeding arising out of or relating to this Agreement may be brought in the
courts of the State of Delaware, or, if it has or can acquire jurisdiction,
in
the United States District Court for Delaware, and each of the parties
irrevocably submits to the exclusive jurisdiction of each such court in any
such
proceeding, waives any objection it may now or hereafter have to venue or to
convenience of forum, agrees that all claims in respect of the proceeding shall
be heard and determined only in any such court and agrees not to bring any
proceeding arising out of or relating to this Agreement in any other
court. The parties agree that either or both of them may file a copy
of this paragraph with any court as written evidence of the knowing, voluntary
and bargained agreement between the parties irrevocably to waive any objections
to venue or to convenience of forum. Process in any proceeding
referred to in the first sentence of this section may be served on any party
anywhere in the world.
(b) THE
PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT
OF
OR RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS
PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND
BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY
AND
THAT ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY
OF
THE CONTEMPLATED TRANSACTIONS SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
32
13.10
Invalid Provisions. If any provision of this
Agreement is deemed or held to be illegal, invalid or unenforceable, this
Agreement shall be considered divisible and inoperative as to such provision
to
the extent it is deemed to be illegal, invalid or unenforceable, and in all
other respects this Agreement shall remain in full force and effect;
provided, however, that if any provision of this Agreement is
deemed or held to be illegal, invalid or unenforceable there shall be added
hereto automatically a provision as similar as possible to such illegal, invalid
or unenforceable provision so as to make such provision legal, valid and
enforceable. Further, should any provision contained in this
Agreement ever be reformed or rewritten by any judicial body of competent
jurisdiction, such provision as so reformed or rewritten shall be binding upon
all parties hereto.
13.11
Headings. The descriptive section headings are for
convenience of reference only and shall not control or affect the meaning or
construction of any provision of this Agreement.
13.12
Sole Remedies; Waiver. Buyer and Seller each agree
that the remedies provided in this Agreement shall be their sole and exclusive
remedy with respect to the subject matter of this Agreement. In
furtherance of the foregoing, Buyer and seller each waive, to the fullest extent
permitted by law, any and all other rights, claims, and causes of action,
including any right of contribution, which exist or may arise in the future,
that either may have against the other, arising under or based on any federal,
state, or local law, including securities, environmental and common
law.
* * * *
Remainder
of page intentionally left blank
33
IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly
executed as of the date and year first above written.
BUYER:
|
|||
AIR
METHODS CORPORATION
|
|||
By:
|
/s/
Xxxxx X. Xxxx
|
||
Name: Xxxxx
X. Xxxx
|
|||
Title:
CEO
|
|||
SELLER:
|
|||
/s/
Xxxx X. Xxxxxxx
|
|||
Xxxx
X. Xxxxxxx
|
|||
COMPANY:
|
|||
FSS
AIRHOLDINGS, INC.
|
|||
By:
|
/s/
Xxxx X. Xxxxxxx
|
||
Name: Xxxx
X. Xxxxxxx
|
|||
Title:
Chairman & Chief Executive Officer
|
34
APPENDIX
A
DEFINITIONS
& INDEX OF DEFINED TERMS
The
following capitalized terms are used but not otherwise defined in this
Agreement:
“Closing
Certificates” means the certificates to be delivered by Buyer, the
Company and Seller pursuant to Section 7.2(e) and 7.3(d).
“Company’s
and Seller’s Knowledge” means the actual knowledge, without independent
investigation, of Xxxx X. Xxxxxxx, Xxxxxxxx X. Xxxxxxxxxxx, Xxxxxx X. Xxxxx
or
Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxx and Xxxxxxx
X. Xxxxx.
“GAAP”
means United States generally accepted accounting principles.
“PSP”
means, collectively, the Phantom Stock Plan and Agreements between CJ Systems
Aviation Group, Inc., a subsidiary of the Company (“CJ”), and
each of Xxxxxxxx X. Xxxxxxxxxxx, Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxxxx,
Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxx (collectively, the “PSP
Participants”), as amended.
“Schedules”
shall mean the schedules to this Agreement.
The
following is an index of capitalized terms defined in the body of the
Agreement:
Term | Section |
“Act
2”
|
Section
5.2(b)
|
“Agreement”
|
Introductory
paragraph
|
“Applicable
Limitation Period”
|
Section 10.2(b)(iii)
|
“Authorizations”
|
Section 2.6(a)
|
“Business”
|
Recitals
|
“Buyer”
|
Introductory
paragraph
|
“Buyer
Indemnified Parties”
|
Sections 5.2(e)
and 10.2(a)
|
“CJ
Systems”
|
Recitals
|
“CJI
Escrow Receivable”
|
Section
1.4
|
“Closing”
|
Section 7.1
|
“Closing
Date”
|
Section 7.1
|
“Code”
|
Article
IV
|
“Company”
|
Introductory
paragraph
|
“Confidential
Information”
|
Section 12.1
|
“Contracts”
|
Section 2.7
|
“Deductible”
|
Section 10.2(b)(i)
|
“DEP”
|
Section 5.2(c)
|
“Disclosing
Party”
|
Section 12.1
|
“Employee
Plans”
|
Section 2.9(a)
|
“ERISA”
|
Section 2.9(a)
|
“ERISA
Affiliate”
|
Section 2.9(a)
|
“Escrow
Agreement”
|
Section
7.2(d)
|
“Excess
Interim Loss”
|
Section
1.7
|
“FAA”
|
Section 2.5(b)
|
“FY
2007 Balance Sheet”
|
Section 2.16
|
“Hazardous
Substances”
|
Section 5.2(b)
|
“Indemnifiable
Costs”
|
Section 10.1
|
“Indemnification
Escrow Amount”
|
Section 1.2
|
“Indemnified
Party”
|
Section 10.4(a)
|
“Indemnitor”
|
Section 10.4(a)
|
“Interim
Financial Statements”
|
Section 6.1(h)
|
“Interim
Loss”
|
Section
1.7
|
“Interim
Period”
|
Section
1.7
|
2
“Interim
Statement of Operations”
|
Section
1.7
|
“Leases”
|
Section 2.13(b)
|
“Lien”
|
Section 2.5(a)
|
“LOI”
|
Recitals
|
“Material
Adverse Effect”
|
Section 2.4
|
“Material
Buyer Default”
|
Section 11.1(c)
|
“Material
Seller Default”
|
Section 11.1(e)
|
“Net
Amounts”
|
Section
1.4
|
“Non-Competition
Agreements”
|
Section 7.2(c)
|
“Notice
of Claim”
|
Section 10.2(b)(iii)
|
“Operating
P&L”
|
Section
1.7
|
“PBGC”
|
Section 2.9(b)
|
“Permitted
Liens”
|
Section 2.5(a)
|
“Personal
Property Leases”
|
Section 2.13(b)
|
“Phase
II ESA”
|
Section
5.2(a)
|
“Proceedings”
|
Section 2.11
|
“Property”
|
Section
5.2(a)
|
“Purchase
Price”
|
Section 1.2
|
“Real
Property”
|
Section 2.13(a)
|
“Real
Property Leases”
|
Section 2.13(b)
|
“Receiving
Party”
|
Section 12.1
|
“Representatives”
|
Section 12.1
|
“Seller”
|
Introductory
paragraph
|
3
“Seller
Indemnified Parties”
|
Sections
5.2(e) and 10.1
|
“Shares”
|
Recitals
|
“Short
Period”
|
Section
1.6
|
“Subsidiary”
|
Section
2.2
|
“Tax
Benefit Agreement”
|
Section
1.6
|
“WARN
Act”
|
Section 2.8(d)
|
4