BUSINESS PURCHASE AGREEMENT (SANTA MONICA)
Confidential
(SANTA
▇▇▇▇▇▇)
THIS
BUSINESS PURCHASE AGREEMENT (together with the exhibits and schedules hereto,
this “Agreement”)
is
entered into as of December 21, 2006 (the “Effective
Date”),
by
and between ▇▇▇▇▇ ▇. ▇▇▇▇▇, a resident of the State of California, individually
and as trustee for the ▇▇▇▇▇ ▇. ▇▇▇▇▇ 2006 Family Trust dated January 13, 2006
(“Seller
1”),
▇▇▇▇▇▇ ▇. ▇▇▇▇▇-▇▇▇ ▇▇▇▇▇, a resident of the State of California,
individually
and as trustee for the ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇ ▇▇▇▇▇ 2006 Family Trust dated May 3,
2006
(“Seller
2”
and
together with Seller 1, the “Prices”),
SUPERMARINE AVIATION, LIMITED, a California corporation (“Seller
3”
and
together with Seller 1 and Seller 2, the “Sellers”),
and
MACQUARIE FBO HOLDINGS LLC, a Delaware limited liability company (“Buyer”).
Unless otherwise defined in the Agreement, capitalized terms used in this
Agreement are defined in Exhibit “A.”
RECITALS
A. The
Prices own directly all of the issued and outstanding shares of capital stock
of
each of (i) Aviation Contract Services, Inc., a California corporation
(“ACS”),
(ii)
Supermarine Investors, Inc., a California corporation (“Supermarine
Investors”),
and
(iii) Seller 3. The Sellers own directly all of the partnership interests in
Supermarine of Santa ▇▇▇▇▇▇, a California Limited Partnership, a limited
partnership formed under the laws of the State of California (“Supermarine
of Santa ▇▇▇▇▇▇,”
each
of
ACS, Supermarine Investors and Supermarine of Santa ▇▇▇▇▇▇ is sometimes referred
to herein as a “Company”
and
collectively as the “Companies”).
B. The
Companies own and operate a fixed base operation at the Santa ▇▇▇▇▇▇ Municipal
Airport located in Santa Monica, California (the “Facility”).
The
business operations relating to the Facility are hereinafter referred to as
the
“Business.”
C. Seller
1
is the Chairman and Chief Executive Officer of American Airports Corporation,
a
California corporation (“AAC”).
D. Buyer
desires to acquire from Sellers, and Sellers desire to sell and transfer to
Buyer, all of the issued and outstanding shares of capital stock of each of
ACS
and Supermarine Investors, and all of the partnership interests in Supermarine
of Santa ▇▇▇▇▇▇, in each case on the terms and subject to the conditions set
forth herein.
E. Contemporaneously
with the execution and delivery of this Agreement, Buyer and Seller 1 have
entered into a separate agreement (the “▇▇▇▇▇▇▇
Purchase Agreement”),
pursuant to which Buyer has the right to acquire a fixed base operation owned
by
Seller 1 at the ▇▇▇▇▇▇▇ International Airport located in New Windsor, New
York.
AGREEMENT
THEREFORE,
in consideration of the foregoing and the mutual agreements and covenants set
forth below, the Parties hereby agree as follows:
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ARTICLE
1
PURCHASE
AND SALE OF OWNERSHIP INTERESTS
1.1 Acquisition.
Subject
to the terms and conditions of this Agreement:
(a) Buyer
agrees to purchase, and Seller 1 agrees to sell, convey, assign, transfer and
deliver to Buyer, all of the issued and outstanding shares of capital stock
of
ACS registered in Seller 1’s name on the books and records of ACS, all of the
issued and outstanding shares of capital stock of Supermarine Investors
registered in Seller 1’s name on the books and records of Supermarine Investors,
and all of the partnership interests in Supermarine of Santa ▇▇▇▇▇▇ registered
in Seller 1’s name on the books and records of Supermarine of Santa ▇▇▇▇▇▇;
(b) Buyer
agrees to purchase, and Seller 2 agrees to sell, convey, assign, transfer and
deliver to Buyer, all of the issued and outstanding shares of capital stock
of
ACS registered in Seller 2’s name on the books and records of ACS, all of the
issued and outstanding shares of capital stock of Supermarine Investors
registered in Seller 2’s name on the books and records of Supermarine Investors,
and all of the partnership interests in Supermarine of Santa ▇▇▇▇▇▇ registered
in Seller 2’s name on the books and records of Supermarine of Santa
▇▇▇▇▇▇;
and
(c) Buyer
agrees to cause a direct or indirect subsidiary of Buyer (the “Buyer
Sub”)
to
purchase, and Seller 3 agrees to sell, convey, assign, transfer and deliver
to
the Buyer Sub, all of the partnership interests in Supermarine of Santa ▇▇▇▇▇▇
registered in Seller 3’s name on the books and records of Supermarine of Santa
▇▇▇▇▇▇;
in
each
case free and clear of all Encumbrances, on the Closing Date. The interests
described in this
Section
1.1
are
referred to herein as the “Ownership
Interests.”
1.2 Assignment
of Ownership Interests.
The
sale and transfer of the Ownership Interests will be effected by delivery by
the
Sellers to Buyer of such instruments of assignment or transfer
as Buyer
may reasonably request.
ARTICLE
2
PURCHASE
PRICE; OTHER CONSIDERATION
2.1 Purchase
Price.
Subject
to adjustment as set forth in Section
2.2
below,
the aggregate amount to be paid by Buyer at the Closing in consideration for
the
Ownership Interests shall be Sixty-Six Million Dollars ($66,000,000) (the
“Purchase
Price”).
The
amount of Seven Hundred Fifty Thousand Dollars ($750,000) (the “Escrow
Funds”)
shall
be delivered to an escrow account with the Escrow Agent, to be held by the
Escrow Agent for a period of one (1) year from the Closing Date, pursuant
to the terms of an escrow agreement substantially in the form attached hereto
as
Exhibit
“B”
(the
“Escrow
Agreement”)
and
the balance of the Purchase Price (the “Closing
Funds”)
shall
be delivered to the Sellers in accordance with the allocation set forth on
Exhibit
“C”
or,
at
Sellers’ direction, to any third parties in satisfaction of Funded
Indebtedness.
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2.2 Adjustment
to Purchase Price.
(a) The
Purchase Price shall be subject to adjustment pursuant to this Section
2.2,
with
such adjustment being referred to as the “Closing
Net Working Capital Adjustment.”
The
Closing Net Working Capital Adjustment shall be the positive or negative amount
by which the Closing Net Working Capital (as defined below) differs from One
Dollar ($1.00) (the “Target
Closing Net Working Capital”),
provided, however, no adjustment shall be made unless such difference is more
than Twenty-Five Thousand Dollars ($25,000). If the Closing Net Working Capital
exceeds the Target Closing Net Working Capital, then the Closing Net Working
Capital Adjustment shall be positive; and if the Closing Net Working Capital
is
less than the Target Closing Net Working Capital, then the Closing Net Working
Capital Adjustment shall be negative. Sellers shall estimate in good faith
the
Closing Net Working Capital, as of the Closing, and deliver such estimate,
together with an unaudited consolidated balance sheet of the Companies as of
the
Closing Date (prepared in a manner consistent with and using all of the same
accounting principles, practices, methodologies and policies used in the
preparation of the “Unaudited 2006 Statements” (defined below) and the example
set forth on Schedule
2.2(a)
(the
“Accounting
Principles”))
to
Buyer no later than two (2) Business Days before the Closing Date. If the
difference between such estimate and the Target Closing Net Working Capital
is
more than Twenty-Five Thousand Dollars ($25,000), then the full amount of such
difference shall be added to or deducted from, as the case may be, the Closing
Funds. Any such adjustment is referred to herein as the “Estimated
Net Working Capital Adjustment.”
The
Closing Net Working Capital shall be finally determined in accordance with
Section
2.2(b) and (e).
(b) Promptly
after the Closing, the Sellers shall cause to be prepared a consolidated balance
sheet of the Companies as of the Closing Date (the “Closing
Date Balance Sheet”).
The
Closing Date Balance Sheet shall be prepared in accordance with the Accounting
Principles. The
Parties acknowledge that the sole purpose for determining Closing Net Working
Capital is to adjust the Purchase Price so as to reflect the difference, if
any,
between the actual net working capital of the Companies as of the Closing Date
and the Target Closing
Net Working Capital.
For
purposes of this Agreement, “Closing
Net Working Capital”
shall
mean the
Companies’ current assets minus current liabilities, calculated in a manner
consistent with and using all of the Accounting Principles, as of the Effective
Time. On
the
Closing Date, the Companies shall, on an aggregate basis, have a cash balance
of
at least One Hundred Thousand Dollars ($100,000). Subject to the requirements
of
the previous sentence, nothing contained in this Agreement, including the
provisions of Article 2
and
Article 5,
shall
prohibit the Companies from distributing cash on hand from time to time from
and
after the date hereof to Closing.
(c) The
Sellers shall provide to Buyer, within sixty (60) days after Closing, (i) a
copy
of the Closing Date Balance Sheet, and (ii) a calculation of (A) the actual
Closing Net Working Capital Adjustment (“Actual
Net Working Capital Adjustment”);
(B)
the amount, if any, by which the Estimated Net Working Capital Adjustment is
less than the Actual Net Working Capital Adjustment (an “Adjustment
in Favor of Sellers”);
and
(C) the amount, if any, by which the Estimated Net Working Capital Adjustment
is
greater than the Actual Net Working Capital Adjustment (an “Adjustment
in Favor of Buyer”)
(such
materials, the “Sellers
Adjustment Notice”).
-3-
(d) The
Sellers shall allow Buyer and its representatives access at all reasonable
times
to the Companies’ personnel, properties, books and records, schedules and
calculations relating to the Closing Date Balance Sheet and the Actual Net
Working Capital Adjustment for the purpose of reviewing the Sellers Adjustment
Notice and the Closing Date Balance Sheet and confirming the accuracy of the
preparation thereof. In the event that Buyer provides notice (“Buyer
Objection Notice”)
to the
Sellers no later than sixty (60) days after receipt of the Sellers Adjustment
Notice that Buyer disputes the Sellers’ determination of the Actual Net Working
Capital Adjustment, the Adjustment in Favor of Sellers or the Adjustment in
Favor of Buyer, the Sellers and Buyer shall then meet and negotiate in good
faith to resolve such dispute, such negotiation to begin as soon as practicable
(but in any case, no later than thirty (30) days) after the Sellers’ receipt of
the Buyer Objection Notice; provided, that, either (i) Buyer shall promptly
pay
any amount of an Adjustment in Favor of Sellers that is not in dispute, or
(ii)
the Sellers shall promptly pay any amount of an Adjustment in Favor of Buyer
that is not in dispute.
(e) In
the
event that Buyer and the Sellers are not able to resolve such dispute within
forty-five (45) days after the date on which Buyer provides the Sellers with
the
Buyer Objection Notice, then either the Sellers or Buyer may refer the issues
in
dispute to a neutral mutually acceptable independent accounting firm for
resolution (the “Referee”).
The
decision of such issues by the Referee shall be final and binding on the
Parties. The Parties shall submit their positions on the dispute to the Referee
within thirty (30) days after referral, and shall direct the Referee to decide
the dispute within fifteen (15) days after submission to it. The fees and
expenses of the Referee shall be paid one-half by Buyer and one-half by the
Sellers. Buyer and the Sellers shall direct the Referee to promptly provide
invoices of all such fees and expenses directly to the Sellers and
Buyer.
(f) After
final determination, either (i) Buyer shall pay to the Sellers, in accordance
with the allocations set forth on Exhibit“C,”
the
amount of any Adjustment in Favor of Sellers, or (ii) the Sellers shall pay
to
Buyer any Adjustment in Favor of Buyer. Any such payment is hereinafter referred
to as the “Final
Payment.”
(g) Any
Final
Payment shall be made by wire transfer of immediately available funds within
three (3) Business Days after its final determination in accordance with this
Section
2.2
to
account(s) specified by Buyer and the Sellers to receive the Final Payment;
provided, however, that none of Buyer nor the Sellers shall be required to
make
any payment by wire transfer in an amount less than One Hundred Thousand Dollars
($100,000) and may issue a check written against immediately available funds
in
lieu of a wire transfer for such payment.
2.3 Withholding.
Buyer
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of Ownership
Interests such
amounts as Buyer or its agent are required to deduct and withhold under the
Code, or any provision of state, local, provincial or foreign Tax Law, or
pursuant to other applicable judgments, decrees, injunctions or orders, with
respect to the making of such payment. To the extent that amounts are so
withheld by Buyer or its agent,
and are
paid to the appropriate governmental authority,
such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of Ownership Interests in respect of whom such deduction
and withholding was made by Buyer or its agent.
-4-
2.4 Transaction
Taxes.
Each
Party shall pay all transfer, registration, stamp, documentary, recording and
similar taxes, if any, that become due and payable by such Party under
applicable Laws in connection with the transactions contemplated by this
Agreement, including the assignment or transfer of the Ownership Interests
for
the Purchase Price, and each Party shall, at his, her or its own expense,
file
all
necessary Tax Returns and other documentation with respect to all such Taxes
and
fees and, if required by applicable Law, each other Party will execute and
deliver, and will cause his, her or its Affiliates to join in the execution
and
delivery of, any such Tax Returns and other documentation.
ARTICLE
3
SELLERS’
REPRESENTATIONS AND WARRANTIES
For
the
purposes of this Agreement, the phrase “to
the best of Sellers’ knowledge”
or
words of similar import shall mean the actual knowledge of the individuals
listed on Exhibit
“D”
hereto
as well as the knowledge of any of such individuals with respect to a particular
matter if a prudent individual would be expected to discover or otherwise become
aware of it after reasonable inquiry. Subject to the foregoing and as an
inducement to Buyer to enter into this Agreement, Seller 1, severally, and
solely with respect to Sections
3.2, 3.5, 3.9 and 3.16,
Seller
1 and Seller 2, jointly and severally, represent and warrant to Buyer that
as of
the date hereof and as of the Closing:
3.1 Organization.
Each of
ACS and Supermarine Investors is a corporation duly organized, validly existing
and in good standing under the Laws of the State of California. Supermarine
of
Santa ▇▇▇▇▇▇ is a limited partnership duly formed, validly existing and in
good
standing under the Laws of the State of California. None of the Companies has
any Subsidiaries.
The
Companies have all requisite power and authority to own and operate the Business
as conducted as of the date hereof, and to own, operate and lease the properties
and assets owned, operated or leased by the Companies and used in the Business.
None of the Companies is required to be licensed or qualified to do business
in
any jurisdictions other than the State of California. Attached to Schedule
3.1(i)
are
complete and correct copies of the Charter Documents for the Companies as
currently in effect. The officers and directors of each of the Companies are
listed on Schedule
3.1(ii).
3.2 Power
and Authority.
Each of
the Prices, individually and in his or her capacity as a trustee of the ▇▇▇▇▇
▇.
▇▇▇▇▇ 2006 Family Trust and the ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇ ▇▇▇▇▇ 2006 Family Trust,
respectively, and Seller 3 has full power and authority to own the Ownership
Interests owned by him, her or it, to execute and deliver this Agreement and
the
Transaction Documents to which he, she or it is a party, and to perform his,
her
or its obligations hereunder or thereunder.
-5-
3.3 Authorization;
No Breach.
The
execution, delivery and performance of this Agreement has been, and the
execution, delivery and performance of the Transaction Documents to which each
Seller is a party as of the Closing will have been, duly and validly authorized
by each Seller, and this Agreement constitutes, and each of the Transaction
Documents to which the Sellers are a party as of the Closing will constitute,
a
valid and binding obligation of such Seller, enforceable against such Seller
in
accordance with their respective terms (except as may be limited by bankruptcy,
insolvency, reorganization and other similar laws and equitable principles
relating to or limiting creditors’ rights generally). The execution, delivery
and performance of this Agreement and the Transaction Documents, and the
consummation of the transactions hereunder and thereunder, will not, except
as
set forth on Schedule
3.3(a),
(a) violate, conflict with, result in a breach or constitute a default, or
give rise to any right of amendment, termination, cancellation or acceleration
(with or without due notice or lapse of time, or both), under the Charter
Documents of any Company, the ▇▇▇▇▇ ▇. ▇▇▇▇▇ 2006 Family Trust, the ▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇ ▇▇▇▇▇ 2006 Family Trust or Seller 3, any Law to which any Seller
is
subject or any agreement to which any Company is a party or to which it or
its
assets are otherwise bound (including the Material Contracts), or
(b) require any authorization, notice, consent or approval of, or action or
filing with, any Person.
Except
as set forth on Schedule 3.3(b),
no
consent, approval, order or authorization of or registration, declaration,
notice or filing with or exemption by any court, administrative agency or
commission or other governmental authority or instrumentality, whether local,
domestic or foreign is required by or with respect to any Seller or any Company
in connection with the execution and delivery of this Agreement and the
Transaction Documents by the Sellers, or the consummation of the transactions
contemplated hereby or thereby.
3.4 Absence
of Undisclosed Liabilities.
(a) Other
than as disclosed on the Liabilities Schedule, Schedule
3.4(a),
the
Companies do not have any liabilities or obligations of any nature whatsoever,
whether accrued or absolute, contingent or otherwise, and whether due or to
become due, except (i) liabilities and obligations that arise in the
ordinary course of business, consistent with past practices, under contracts
described on the Leases Schedule and the Contracts Schedule and under contracts
not required to be described on the Contracts Schedule (other than through
any
breach or default by any Company), (ii) liabilities and obligations
reflected in the Financial Statements, and (iii) liabilities and
obligations of the Companies that have arisen after the date of the Financial
Statements in the ordinary course of business, consistent with past practices
(other than through any breach or default by any Company) that do not exceed
Fifty Thousand Dollars ($50,000) in the aggregate.
(b) Except
as
set forth on Schedule
3.4(b),
the
Companies do not have any Funded Indebtedness. As of the Closing Date, the
Companies will not owe money to any other party pursuant to a loan agreement
or
promissory note or otherwise have any Funded Indebtedness.
3.5 Capitalization;
Ownership.
(a) The
authorized capital stock of ACS consists solely of one hundred thousand
(100,000) shares of common stock, no par value (“ACS
Common Stock”),
of
which fifty thousand (50,000) shares are issued and outstanding and registered
to the Prices as reflected on Schedule
3.5(a).
The
Prices are the unconditional and sole legal, beneficial, record and equitable
owners of the issued and outstanding shares of ACS Common Stock, and have full
power and authority to sell and transfer such shares free and clear of all
Encumbrances. The shares of ACS Common Stock owned by the Prices constitute
all
of the issued and outstanding equity in ACS. All such shares are duly
authorized, validly issued, fully paid and non-assessable, and were issued
in
conformity with applicable Laws. There are no outstanding warrants, options,
rights, other securities, agreements, subscriptions, or other commitments,
arrangements or undertakings pursuant to which ACS, the Prices or any other
Person is or may become obligated to issue, deliver or sell, or cause to be
issued, delivered or sold, any additional equity interests or other securities
of ACS.
-6-
(b) The
authorized capital stock of Supermarine Investors consists solely of ten
thousand (10,000) shares of common stock, no par value (“SI
Common Stock”),
of
which one thousand (1,000) shares are issued and outstanding and registered
to
the Prices as reflected on Schedule
3.5(b).
The
Prices are the unconditional and sole legal, beneficial, record and equitable
owners of the issued and outstanding shares of SI Common Stock, and have full
power and authority to sell and transfer such shares free and clear of all
Encumbrances. The shares of SI Common Stock owned by the Prices constitute
all
of the issued and outstanding equity in Supermarine Investors. All such shares
are duly authorized, validly issued, fully paid and non-assessable, and were
issued in conformity with applicable Laws. There are no outstanding warrants,
options, rights, other securities, agreements, subscriptions, or other
commitments, arrangements or undertakings pursuant to which Supermarine
Investors, the Prices or any other Person is or may become obligated to issue,
deliver or sell, or cause to be issued, delivered or sold, any additional equity
interests or other securities of Supermarine Investors.
(c) The
Prices are the unconditional and sole legal, beneficial, record and equitable
owners of the limited partner interests in Supermarine of Santa ▇▇▇▇▇▇ (the
“SOSM
LP Interests”),
and
have full power and authority to sell and transfer such interests free and
clear
of all Encumbrances. Seller 3 is the unconditional and sole legal, beneficial,
record and equitable owner of the general partner interests in Supermarine
of
Santa ▇▇▇▇▇▇ (the “SOSM
GP Interests”).
The
SOSM LP Interests and SOSM GP Interests constitute all of the issued and
outstanding equity in Supermarine of Santa ▇▇▇▇▇▇. All such interests are duly
authorized, validly issued, fully paid and non-assessable, and were issued
in
conformity with applicable Laws. There are no outstanding warrants, options,
rights, other securities, agreements, subscriptions, or other commitments,
arrangements or undertakings pursuant to which Supermarine of Santa ▇▇▇▇▇▇,
any
of the Sellers or any other Person is or may become obligated to issue, deliver
or sell, or cause to be issued, delivered or sold, any additional interests
or
other securities of Supermarine of Santa ▇▇▇▇▇▇.
3.6 Financial
Statements.
(a) Attached
to Schedule
3.6(a)
hereto
are the (a) unaudited financial statements for each of the Companies for the
year ended December 31, 2005 (the “Unaudited
2005 Statements”),
and
(b) unaudited financial statements for each of the Companies for the nine
(9)-month period ended September 30, 2006 (the “Unaudited
2006 Statements”
and
collectively with the Unaudited 2005 Statements, the “Unaudited
Financial Statements”).
The
Unaudited Financial Statements have been prepared in accordance with the books
and records of the Companies and consistent with past practices. The Unaudited
Financial Statements fairly present the financial condition and results of
operation of the Business for the period ended December 31, 2005 and for the
nine (9)-month period ending September 30, 2006, as the case may be.
-7-
(b) On
or
prior to Closing, Sellers will have delivered to Buyer (i) combined financial
statements for the Companies and Supermarine of ▇▇▇▇▇▇▇, LLC, a Delaware limited
liability company wholly owned by Seller 1, audited by Lesley, Thomas, ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇, Inc., for the period ended December 31, 2005 (the “Audited
Statements”),
and
(ii) unaudited financial statements for each of the Companies for each month-end
that has occurred since, or will occur after, September 30, 2006, and prior
to
the Closing Date (the “Interim
Unaudited Statements”
and
collectively with the Unaudited Financial Statements and the Audited Statements,
the “Financial
Statements”).
The
Audited Statements and the Interim Unaudited Statements will be prepared in
accordance with the books and records of the Companies and consistent with
past
practices. The Audited Statements will have been prepared in accordance with
GAAP consistently applied throughout the period involved and fairly present
the
financial condition and results of operation of the Business for the period
ended December 31, 2005. The Interim Unaudited Statements will fairly present
the financial condition and results of operation of the Business for the period
then ending. The Audited Statements and the Interim Unaudited Statements will
be
attached to Schedule
3.6(b)(ii)
hereto.
(c) Except
as
set forth on Schedule 3.6(c),
the
Companies’ accounts receivable arose, and all accounts receivable that will be
outstanding as of the Closing Date shall have arisen, from bona fide
transactions in the ordinary course of business. The reserves for accounts
receivables set forth in the Financial Statements have been established
consistently with the Companies’ historical accounting practices.
3.7 Absence
of Certain Changes or Events.
Since
December 31, 2005, and except as disclosed in Schedule
3.7,
the
Business has been operated in the ordinary course and there has not been
any:
(a) sale,
assignment or transfer, other than in the ordinary course of business and
consistent with past practices, of any assets of any Company;
(b) acquisition
by merger, consolidation with, purchase of substantially all of the assets
or
capital stock of, or any other acquisition of any material assets or business
of, any corporation, partnership, association or other business organization
or
division thereof;
(c) change
in
accounting methods or practices by any Company;
-8-
(d) termination
of, or any amendment or modification to, any Material Contract or Permit, in
any
case that is adverse in any material respect to any Company, or entry into
any
material borrowing, capital contribution or capital financing
transaction;
(e) increase
in salary, bonuses or other compensation payable or to become payable to any
officer or employee of any Company, except in the ordinary course of business,
consistent with past practices, and none of the Companies has (i) entered into
any Benefit Plan or Benefit Agreement, employment, severance, or other
agreements relating to compensation or fringe benefits, (ii) adopted or changed
any existing Benefit Plan or Benefit Arrangement or (iii) advanced or loaned
any
money to any officer or employee;
(f) strike,
walkout, labor trouble or threat thereof, or any other new or continued event,
development or condition of any character with respect to the employees engaged
in the Business which has affected or could reasonably be expected to affect
materially and adversely the Business;
(g) cancellation
or waiver of any right material to the operation of the Business or any
cancellation or waiver of any debts or claims of substantial value or any
cancellation or waiver of any debts or claims against any officer, manager
or
employee of any Company;
(h) payment,
discharge or satisfaction of any liability or obligation (whether accrued,
absolute, contingent or otherwise), other than the scheduled payment, discharge
or satisfaction, in the ordinary course of business, of liabilities or
obligations shown or reflected on the Financial Statements or incurred in the
ordinary course of business since December 31, 2005;
(i) deferral
of any capital expenditure or capital improvements that is reasonably required
for the operation of the Business;
(j) adverse
change, or, to the best of Sellers’ knowledge, threat of any adverse change, in
any Company’s relations with, or any loss, or, to the best of Sellers’
knowledge, threat of loss of, any Company’s landlords, suppliers, clients or
customers which, individually or in the aggregate, has been or could reasonably
be expected to be materially adverse to the Companies;
(k) write-offs
as uncollectible of any notes owed to any Company or accounts receivable of
any
Company or write-downs of the value of any asset or inventory by any Company
other than in immaterial amounts or in the ordinary course of business
consistent with past practice and at a rate no greater than the rate applicable
during the twelve (12) months ended on December 31, 2005;
(l) creation,
incurrence, assumption or guarantee by any Company of any material obligations
or liabilities (whether absolute, accrued, contingent or otherwise and whether
due or to become due), except in the ordinary course of business, or any
creation, incurrence, assumption or guarantee by any Company of any indebtedness
for borrowed money;
-9-
(m) any
damage, destruction or loss that has affected, or could reasonably be expected
to affect, materially and adversely the Facility or the Business;
(n) any
agreement by any Company or any Seller to do any of the foregoing;
or
(o) event
or
condition that has had, or could reasonably be expected to have, material
adverse effect on (a) the business, assets, operations, financial condition
or liabilities of the Companies or the Business, taken as a whole; (b) the
ability of any Seller to perform any of his, her or its material obligations
under any of the Transaction Documents; (c) the rights and remedies of
Buyer under this Agreement, the other Transaction Documents or any related
document, instrument or agreement; or (d) the validity of any of the
Transaction Documents.
3.8 Real
Property; Personal Property.
(a) The
Leases Schedule, Schedule
3.8(a)(i),
lists
all oral or written leases, including the Ground Lease, subleases, licenses,
concession agreements or other use or occupancy agreements pursuant to which
any
Company leases to or from any other party any real property, including all
renewals, extensions, modifications or supplements to any of the foregoing
or
substitutions for any of the foregoing (each a “Lease”
and
collectively, the “Leases”).
The
Leases are in full force and effect, have not been modified, supplemented,
amended or assigned, and are enforceable by and against each Company that is
a
party thereto and all other parties thereto for the periods (terms) listed
on
Schedule
3.8(a)(i).
Sellers
have delivered to Buyer complete and accurate copies of each of the Leases
(including all amendments, supplements and material correspondence related
thereto). A complete and accurate copy of the Ground Lease is attached to
Schedule
3.8(a)(ii)
hereto.
None of the Sellers nor any Company has (i) received any notice that any Company
is in default under, or not in compliance with any material provision of, any
Lease, that any Company may be subject to any special assessments or that there
may be any material changes in property tax or land use law affecting any such
Leases, or (ii) delivered any notice to another party alleging any default
under, or failure to comply with any material provision of, any Lease. To the
best of Sellers’ knowledge, no event has occurred that, with notice, the passage
of time or both, would constitute a default by any Company under, or failure
of
any Company to comply with a material provision of, any of the Leases, or
otherwise give any party a right of termination or modification thereof. Each
Company has timely prepared and, as applicable, filed with the proper third
parties, all material statements and reports as required by the Leases, and
each
such statement or report is correct in all material respects. None of the
Companies owns any fee interest in any real property.
(b) (i) None
of
the Sellers nor any Company has received notice of any threatened condemnation
proceedings, lawsuits or administrative actions relating to any of the real
property used in the Business or any other matters which do or could reasonably
be expected to adversely affect the current use, occupancy or value thereof,
and
there an no pending or, to the best of Sellers’ knowledge, threatened
condemnation proceedings, lawsuits or administrative actions relating to any
of
the real property used in the Business or any other matters which do or could
reasonably be expected to adversely affect the current use, occupancy or value
thereof.
-10-
(ii) To
the
best of Sellers’ knowledge, all facilities, buildings, improvements and other
structures used in the Business are located on the real property. All present
uses and operations of such real property and the structures by the Companies
comply in all material respects with all applicable zoning, land-use, building,
fire, labor, safety, subdivision and other governmental requirements and all
deed or other title covenants or restrictions applicable thereto. None of the
Sellers nor any Company has received any notice or report that any of the leased
real property or any of the structures used in the Business, or the use,
occupancy or operation thereof by the Sellers or the Companies, violate any
governmental requirements or deed or other title, covenants or
restrictions.
(iii) The
Companies have obtained all approvals of governmental authorities (including
certificates of use and occupancy, licenses and permits) required in connection
with the construction, ownership, use, occupation and operation of the leased
real property and the structures thereon used in the Business, and all equipment
owned or used by any of the Companies. None of the Sellers nor any of the
Companies has received notice that any of the leased real property or any of
the
structures thereon used in the Business is dependent upon or benefit from any
“non-conforming use” or similar zoning classification.
(iv) Other
than in the ordinary course of business, there are no parties other than the
Companies in possession of any of the leased real property or any portion
thereof, and, other than in the ordinary course of business, there are no
leases, subleases, licenses, concessions or other agreements, written or oral,
granting to any party or parties the right of use or occupancy of any of the
leased real property or any portion thereof.
(v) The
legal
descriptions for the real property contained in the Leases adequately describe
the leased real property subject thereto. All structures on the leased real
property are located within the boundary lines of the leased real property
and
no structures, facilities or other improvements on any parcel adjacent to any
of
the leased real property encroach onto any of the leased real property. All
structural, mechanical and other physical systems related to the leased real
property are in good operating condition and repair, reasonable wear and tear
excepted, in all material respects.
(vi) Sellers
have delivered true, complete and correct copies of any and all geotechnical,
mechanical, architectural or similar reports, or other documents possessed
by or
in the control of any Seller or any Company pertaining to the structural,
mechanical and other physical systems related to the leased real property.
Except for such reports or documents, there has been no investigation, study,
audit, test, review or other analysis (other than environmental reports
described in Section
3.16)
conducted by, for, or provided to any Seller or any Company in relation to
the
Business; and
(vii) Except
as
set forth on Schedule
3.8(b)(vii),
none of
the Companies is subject to or bound by any obligation or commitment (written
or
oral) to make any capital expenditures that exceed One Hundred Thousand Dollars
($100,000) individually or in the aggregate.
-11-
(c) Attached
hereto as Schedule
3.8(c)
is a
complete and accurate list of all furniture, equipment, leasehold improvements,
motor vehicles and all other tangible personal property owned or leased by
each
Company that such Company has reflected in its books and records in accordance
with generally accepted accounting principles (the “Personal
Property”).
(d) Each
Company has good title to its Personal Property, free and clear of any
Encumbrances except
as
set forth on Schedule
3.8(d)(i).
Each
Company has valid titles and registrations for each motor vehicle included
in
the Personal Property, copies of which have been delivered to Buyer. Except
as
set forth on Schedule
3.8(d)(ii),
the
Companies own or lease from unrelated third parties all assets and properties,
and have all operational capabilities, that are used in or necessary to the
operation of the Business.
3.9 Tax
Matters.
(a) Each
Company has filed (or had filed on its behalf) all Tax Returns required to
have
been filed by it or with respect to it in
the
manner prescribed by applicable laws. All such Tax Returns were true, correct
and complete in all respects. Each Company has timely paid in full (or had
timely paid in full on its behalf) all Taxes required to have been paid by
it or
with respect to it, or which could affect any Seller’s ability to consummate the
transaction contemplated hereby, whether or not shown as due on such Tax
Returns. With respect to any Company, none of the Sellers nor any Company has
received notice of any claim made by a governmental authority in a jurisdiction
where such Company does not file Tax Returns that it is or may be subject to
taxation by that jurisdiction. Except as set forth in Schedule 3.9,
no
Company has requested or obtained any extension of time within which to file
any
Tax Return, which Tax Return has not since been filed. Except as set forth
in
Schedule 3.9,
there
are no Encumbrances on any of the Ownership Interests in or assets, rights
or
properties of any of the Companies that arose in connection with any failure
(or
alleged failure) to pay any Tax other than Encumbrances for Taxes not yet due
and payable.
(b) Each
Company has complied
in all respects with all applicable laws, rules and regulations relating to
withholding Taxes,
including all information reporting and backup withholding requirements
(including the maintenance of required records with respect thereto), and has,
within the time and manner prescribed by law, withheld and paid, when due all
Taxes from payments made to its employees, agents, contractors, creditors,
interest holders or other third parties as required by Law.
(c) There
is
no proceeding or audit pending or, to the best of Sellers’ knowledge, threatened
by any governmental authority with respect to any Taxes or Tax Returns of any
Company.
(d) To
the
best of Sellers’ knowledge, there are no existing circumstances that, if known
to governmental authorities, could reasonably be expected to result in the
assertion of any claim for Taxes against any Company by any governmental
authority with respect to any period for which Tax Returns have been filed
or
Tax is required to have been paid. No Company nor any Affiliate of any Company
(with respect to such Company) has received a written ruling from a governmental
authority relating to any Tax or entered into a written agreement with a
governmental authority relating to any Tax that could have a continuing effect
with respect to any taxable period for which such Company has not filed a Tax
Return. No property of any Company is property that such Company or any party
to
this transaction is or will be required to treat as being owned by another
Person pursuant to the provisions of Section 168(f)(8) of the Code (as in effect
prior to its amendment by the Tax Reform Act of 1986) or is “tax-exempt use
property” within the meaning of Section 168 of the Code.
-12-
(e) Except
as
set forth in Schedule 3.9,
none of
the Companies has waived any statute of limitations for assessment or collection
with respect to any Tax or Tax Return or agreed to any extension of time with
respect to a Tax assessment or deficiency, which has continuing
effect.
(f) No
Company is or has been a party to any Tax allocation, Tax sharing or similar
agreement or arrangement. No Company is or has been a member of a group of
entities required to file Tax Returns on a combined, consolidated or unitary
basis. No Company has any liability for the Taxes of any other Person,
including, without limitation as a result of the application of Treasury
Regulations Section 1.1502-6 (or any similar provision of state, local or
foreign law), by contract or as a transferee or successor of such other Person
by merger or otherwise.
(g) The
Sellers have made available to Buyer complete and accurate copies of all of
the
following materials related to each Company (during periods ending after January
1, 2003): (i) all income Tax Returns, (ii) all examination reports relating
to
Taxes, (iii) all annual statements of Taxes, (iv) all written rulings received
from any governmental authority relating to any Tax, and (v) all written
agreements entered into with any governmental authority relating to any Tax.
The
Sellers have made available to Buyer complete and accurate copies of all monthly
and quarterly statements of Taxes during the period from January 1, 2005 to
September 30, 2006. To the extent specifically requested by Buyer, the Sellers
have made available to Buyer: (i) complete and accurate copies of all other
Tax
Returns related to the Companies, and (ii) complete and accurate copies of
all
documents described in the previous sentence without regard to the period to
which they relate. Schedule
3.9
identifies all Tax Returns that each Company has filed (during periods ending
after January 1, 2003) and the taxable period covered by each such Tax Return,
and identifies those Tax Returns or periods that have been audited or are
currently the subject of an audit by a governmental authority.
(h) No
Company (nor, to the best of Sellers’ knowledge, any officer or director of any
Company) has been a party to or participated in any way in a transaction that
could be described as a “reportable transaction” within the meaning of Treasury
Regulation Section 1.6011-4(b) (including without limitation, any “listed
transaction”) or any confidential corporate Tax shelter within the meaning of
Treasury Regulation Section 1.6111-2, nor has any Tax item or any Tax strategy
that has been derived from or related to any such transaction been reflected
in
any Tax Return of any Company (or, to the best of Sellers’ knowledge, any Tax
Return of any officer or director of any Company).
-13-
(i) Supermarine
of Santa ▇▇▇▇▇▇ is and has been treated as a partnership for federal income
tax
purposes, and the comparable provisions of any relevant Tax Law in each state
or
local jurisdiction in which it conducts business, at all times since its
inception.
(j) ACS
is
and has been a validly electing S corporation within the meaning of Sections
1361 and 1362 of the Code, and the comparable provisions of any relevant Tax
Law
in each state or local jurisdiction in which it conducts business, at all times
since its inception.
(k) No
taxes
have ever been or will be for periods through the Closing Date, imposed on
any
of the Companies pursuant to Sections 1374 or 1375 of the Code.
No
Company has any potential liability for any Tax under Code sections 1374 or
1375
(or any corresponding provisions of state, local or foreign Tax law). No Company
has
(i) acquired assets from another corporation in a transaction in which such
Company's
Tax
basis
for the acquired assets was determined, in whole or in part, by reference to
the
Tax basis of the acquired assets (or any other property) in the hands of the
transferor, or (ii) acquired
the stock of any corporation which is a qualified subchapter S
subsidiary.
3.10 Contracts
and Commitments.
(a) Except
as
set forth in the Contracts Schedule, Schedule
3.10,
none of
the Companies is a party to or otherwise bound by any contract or agreement,
written or oral:
(i) for
a
bonus, pension, profit sharing, retirement, deferred compensation, medical
or
life insurance plan, membership purchase or option or any other plans or
arrangements providing for benefits of any type to employees (either current
or
former) of such Company;
(ii) for
collective bargaining or with any labor union;
(iii) for
the
borrowing of money or mortgaging, pledging or encumbering any of such Company’s
assets;
(iv) for
the
lending or investing of funds to or in other persons or entities;
(v) granting
any power of attorney (irrevocable or otherwise) to any Person for any purpose
relating to the Business or such Company’s assets, other than powers of attorney
given to regulatory authorities in connection with routine qualifications to
do
business; or
(vi) with
an
Affiliate of any Seller or such Company (other than such Company’s Charter
Documents).
-14-
(b) The
Contracts Schedule lists each of the Material Contracts. For purposes of this
Agreement, “Material
Contracts”
includes the following:
(i) any
and
all contracts for the sale of goods or services with a value in excess of (A)
Fifty Thousand Dollars ($50,000) individually, (B) with respect to any one
entity, One Hundred Thousand Dollars ($100,000) in the aggregate, or (C) Ten
Thousand Dollars ($10,000) and which is not terminable without penalty by or
on
behalf of any Company on less than ninety (90) days’ notice;
(ii) any
and
all contracts, agreements, licenses, leases (other than the Leases), sales
and
purchase orders and other legally binding commitments (x) that obligate any
Company to pay, assume, guaranty or secure an amount in excess of (A) Fifty
Thousand Dollars ($50,000) individually, (B) with respect to any one entity,
One
Hundred Thousand Dollars ($100,000) in the aggregate, or (C) Ten Thousand
Dollars ($10,000) and which is not terminable without penalty by or on behalf
of
any Company on less than ninety (90) days’ notice or (y) pursuant to which the
Company buys or sells aviation fuel;
(iii) any
and
all contracts between any Company on the one hand and any Affiliate of such
Company on the other hand (other than such Company’s Charter
Documents);
(iv) any
and
all broker, distributor, dealer, representative or agency
agreements;
(v) any
and
all insurance policies insuring the Business, the Facility or any of the
Companies’ assets (collectively, the “Insurance
Policies”);
(vi) any
and
all employment, non-competition or consulting agreement;
(vii) each
contract containing covenants purporting to materially limit the freedom of
any
Company to compete in any line of business or in any geographic
area;
(viii) each
contract that is not for the purchase, sale or license of goods or services
in
the ordinary course of business consistent with past practice, including any
factoring agreements;
(ix) each
partnership, joint venture or other similar agreement or arrangement to which
any Company is a party;
(x) any
and
all agreements requiring a loan or advance by any Company; and
(xi) any
other
contract or agreement that is material to the Business or the financial
condition or results of operations of the Companies.
-15-
(c) Sellers
have delivered to Buyer true and complete copies of all written Material
Contracts, together with all amendments, supplements and material correspondence
related thereto. The Contracts Schedule includes a description of the material
terms of each Material Contract that is oral. The Material Contracts are in
full
force and effect and are enforceable against each Company that is a party
thereto and all other parties thereto. Except as set forth on the Contracts
Schedule, none of the Sellers nor the Companies has (i) received any notice
that
it is in default under, or not in compliance with any material provision of,
any
Material Contract, or (ii) delivered any notice to another party alleging
any default under, or failure to comply with any material provision of, any
Material Contract. To the best of Sellers’ knowledge, no event has occurred
that, with notice, the passage of time or both, could reasonably be expected
to
constitute a default by any Company or any other party under, or failure of
any
Company or any other party to comply with a material provision of, any of the
Material Contracts, or otherwise give any party a right of termination or
modification thereof. Each
Company has timely prepared and, as applicable, filed with the proper third
parties, all material statements and reports as required by the Material
Contracts, and each such statement or report is correct in all material
respects.
(d) Set
forth
on Schedule 3.10(d)
is a
list of the ten (10) largest customers of the Companies (taken as a whole)
by
gallons of fuel purchased in the 2005 calendar year.
(e) Except
as
disclosed on Schedule 3.10(e),
to the
best of Sellers’ knowledge, no material supplier to or landlord of any Company,
including any party to the Ground Lease, or any governmental entity has taken,
and none of the Sellers nor any Company has received any notice that, any
material supplier to or landlord of any Company, including any party to the
Ground Lease, or any governmental entity contemplates taking, any steps to
terminate or materially alter the business relationship of such Company with
such supplier or landlord, including any party to the Ground Lease.
(f) The
Insurance Policies are in full force and effect and shall remain in full force
and effect until 11:59 p.m. on the day following the Closing Date. Except as
set
forth on Schedule
3.10(f),
there
are no claims related to or arising out of the operation of the Business pending
under any Insurance Policies. To the best of Sellers’ knowledge, no event has
occurred, and no condition or circumstances exist, that could reasonably be
expected to (with or without notice or lapse of time) give rise to or serve
as a
basis for any claims related to or arising out of the operation of the Business
under the Insurance Policies.
(g) None
of
the Companies has, directly or indirectly, any (i) interest in the
outstanding stock or ownership interests of any corporation or in any
partnership, joint venture or other entity, or (ii) agreement,
understanding, contract or commitment relating to an interest in any such
entity.
3.11 Litigation;
Proceedings.
Except
as set forth in Schedule
3.11,
none of
the Companies has received notice or service of process regarding or otherwise
been named as a party to any pending action, suit, proceeding, judgment, order
or governmental investigation. To the best of Sellers’ knowledge, no such
action, suit, proceeding or governmental investigation has been
threatened.
None of
the Companies is subject to or in violation of any judgment, decree, injunction
or order.
-16-
3.12 Brokerage.
No
agent, broker, finder, or investment or commercial banker engaged by or on
behalf of any Seller or any Company is or will be entitled to any brokerage
commission, finders’ fees or similar compensation from any Company or Buyer as a
result of this Agreement or any of the transactions contemplated
herein.
3.13 Employee
Benefit Plans.
(a) “Benefit
Plans”
means:
(i) each plan, program, agreement or arrangement for the provision of
executive compensation, deferred or incentive compensation, profit sharing,
bonus, employee assistance, supplemental retirement, severance, vacation,
sickness, disability, death, fringe benefit, insurance, medical or other
benefits (whether provided through insurance, on a funded or unfunded basis,
or
otherwise) to any current or former employee, director, consultant or
independent contractor, or any dependent, survivor or beneficiary with respect
to any of the foregoing, which is maintained, administered or contributed to
by
any Company or any ERISA Affiliate of any Company; (ii) each Employee
Pension Benefit Plan which has been maintained, administered or contributed
to
by any Company or any ERISA Affiliate in the past six (6) years (the
“Pension
Plans”);
and
(iii) each Employee Welfare Benefit Plan which is currently maintained,
administered or contributed to by any Company or any ERISA Affiliate (such
plans, together with Employee Welfare Benefit Plans which were previously
maintained, administered or contributed to by any Company or an ERISA Affiliate,
collectively, the “Welfare
Plans”).
(b)
(i) Each
Benefit Plan that is sponsored, maintained or contributed to by any Company
or
with respect to which such Company has or may have any liability is listed
on
Schedule
3.13(b)(i)
(hereinafter referred to as the “Company
Benefit Plans”).
(ii) Each
Pension Plan other than the 401(k) Plan is listed on Schedule
3.13(b)(ii).
(iii) Each
ERISA Affiliate is identified on Schedule 3.13(b)(iii).
(c) Each
Pension Plan that covers any Company Employee or any manager, officer, agent,
consultant or professional adviser to any Company, and which is intended to
qualify under Section 401(a) of the Code so qualifies. No Pension Plan has
ever held any securities of any of the Companies.
(d) To
the
best of Sellers’ knowledge, each Company Benefit Plan (and each related trust,
insurance contract or fund) has been administered in all material respects
in
accordance with its governing instruments and all applicable Laws. To the best
of Sellers’ knowledge, except as set forth in Schedule 3.13(d),
all
reports and information relating to each Company Benefit Plan required to be
filed with a governmental authority have been timely filed and are accurate
in
all material respects and all reports and information relating to each such
Company Benefit Plan required to be disclosed or provided to participants or
their beneficiaries have been timely disclosed or provided. No officer, manager,
agent or employee of any Company or any ERISA Affiliate has made any oral or
written representation which is inconsistent with the terms of any Company
Benefit Plan which may be binding on such plan or any Company. To the best
of
Sellers’ knowledge, there are no restrictions or limitations on the right of any
Company or any ERISA Affiliate to terminate or decrease (prospectively) the
level of benefits under any Company Benefit Plan after the Closing Date without
liability to such Company or any participant or beneficiary thereunder. The
Companies may, without cost, withdraw the Company Employees from any Benefit
Plan which is not sponsored by the Companies. No Benefit Plan covering Company
Employees imposes withdrawal charges, redemption fees, contingent deferred
sales
charges or similar expenses triggered by termination of the plan or cessation
of
participation or withdrawal of employees thereunder.
-17-
(e) To
the
best of Sellers’ knowledge, except as set forth in Schedule 3.13(e),
all
contributions, premiums or other payments due under the terms of each Benefit
Plan or required by applicable Law have been made within the time due. All
unpaid amounts attributable to any Company Benefit Plan for any period prior
to
the Closing Date will be accrued on the Companies’ consolidated books and
records in accordance with GAAP. There have been no Prohibited Transactions
with
respect to any Benefit Plan which could result in liability to Buyer, any
Company, any employees of Buyer or any Company Employees. There has been no
breach of fiduciary duty (including violations under Part 4 of Title I of ERISA)
with respect to any Benefit Plan which could result in liability to Buyer,
any
Company, any employees of Buyer or any Company Employees. No action, suit,
proceeding, hearing or investigation relating to any Company Benefit Plan (other
than routine claims for benefits) is pending or, to the best of the Sellers’
knowledge, has been threatened, and the Sellers have no knowledge of any fact
that could form the basis for such action, suit, proceeding, hearing or
investigation.
(f) Except
as
set forth on Schedule
3.13(f),
none of
the Companies, nor any ERISA Affiliate, has ever sponsored, maintained,
contributed to, had any obligation to contribute to, or had any other liability
under or with respect to any: (i) Employee Pension Benefit Plan covered by
Title
IV of ERISA, Section 302 of ERISA or Section 412 of the Code, (ii)
Employee Welfare Benefit Plan which provides health, life or other coverage
for
former directors, officers or employees (or any spouse or former spouse or
other
dependent thereof), other than benefits required by COBRA, (iii) “voluntary
employees beneficiary association” within the meaning of Section 501(c)(9)
of the Code or any other “welfare benefit fund” as defined in
Section 419(e) of the Code, (iv) a nonqualified deferred compensation plan
within the meaning of Code Section 409A for the benefit of anyone who has
provided services with respect to the Business or (v) “multiemployer plan” as
defined in ERISA Section 3(37) or any “multiple employer welfare arrangement” as
defined in Section 3(40)(A) of ERISA.
3.14 Employee
Matters.
(a) Except
for AAC corporate or headquarters employees (including ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇), Schedule 3.14(a)(i)
contains
a complete and correct list of all employees and independent contractors who
are
currently engaged in operating the Business (the “Company
Employees”)
and
the employer, date of hire, 2006 compensation paid or payable and accrued
vacation time, sick leave and other paid time off of each such Company Employee.
Except as set forth on Schedule 3.14(a)(ii),
(i) the terms of employment or engagement of all Company Employees and
managers, agents, consultants and professional advisers to the Companies are
such that their employment or engagement may be terminated at will with notice
given at any time and without liability for payment of compensation or damages,
(ii) there are no severance payments which are or could become payable to
any such person under the terms of any oral or written agreement or commitment
or any Law, custom, trade or practice, (iii) there are no other agreements,
contracts or commitments, oral or written, between any Company and any such
Person, and (iv) as of the date hereof, to the best of the Sellers’ knowledge,
no Company Employee has any plans to terminate his or her employment with any
Company or AAC. Schedule
3.14(a)(iii)
lists
all of the Company Employees who are currently on leave relating to work-related
injuries and/or receiving disability benefits under any Benefit
Plan.
-18-
(b) None
of
the Companies nor ACC is, nor has any of them ever been, bound by or subject
to
(and none of their respective assets or properties are bound by or subject
to)
any arrangement with any labor union or other collective bargaining
representative. With respect to each of the Companies and AAC, there is no
pending or, to the best of Sellers’ knowledge, threatened (i) union
organizational activity or other labor or employment dispute against or
affecting any of the Companies or AAC, or (ii) application for
certification of a collective bargaining agent.
(c) All
persons classified by the Companies as independent contractors do satisfy and
have satisfied the requirements of Law to be so classified, and each Company
has
fully and accurately reported its compensation on IRS Forms 1099 when required
to do so. No individual who has performed services for or on behalf of any
Company and who has been treated by such Company as an independent contractor
is
classifiable as a “leased employee” within the meaning of Section 414(n)(2)
of the Code with respect to such Company.
3.15 Compliance
with Laws; Permits.
Each
Company has complied, and the use and operation of the Facility are in
compliance, in all material respects, with all applicable Laws which affect
the
Business, and has timely filed with the proper authorities all material
statements and reports required by the Laws to which the Business is subject.
Except as set forth in Schedule 3.15,
each
Company holds all permits, licenses, certificates, approvals, registrations,
franchises, rights, qualifications and other authorizations of federal, state
and local governments, agencies and regulatory authorities required or advisable
for the conduct of the Business as operated to the date hereof (collectively,
the “Permits”). Schedule
3.15
sets
forth a complete and accurate list of each Permit. Except as set forth in
Schedule 3.15,
none of
the Companies (1) holds any Permit issued by the Federal Aviation
Administration or by the U.S. Department of Transportation or (2) owns or
leases aircraft or (3) operates aircraft for a third party under a
management agreement or other similar arrangement. Except
as
set forth in Schedule 3.15,
none of
the Sellers nor any Company has received any notice in the past six (6) years
of
any (x) order, rule or directive, or any proposed order, rule or directive,
issued by any governmental authority against any Company, or (y) threatened
legal or regulatory proceeding which could adversely affect the Business or
assets of any Company, or any Permit required to be obtained and maintained
by
any Company.
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3.16 Environmental
Matters.
Except
as set forth in Schedule
3.16,
Sellers
represent and warrant that:
(a) Each
Company materially complies, and at all times during Sellers’ ownership of the
Ownership Interests has been in material compliance, with applicable
Environmental Laws and there are no circumstances that will prevent such
compliance in the future;
(b) None
of
the Sellers nor any Company has received any written request for information,
or
has been notified that it is a potentially responsible party, under the CERCLA,
or any similar state or local law with respect to any on-site or offsite
location;
(c) The
Companies have obtained all required Environmental Permits relating to the
Business, enabling the Business to operate as of the Closing Date in the
ordinary course of business;
(d) None
of
the Sellers nor any Company has received any notice, notification, demand,
request for information, citation, summons, complaint or order and, to the
best
of Sellers’ knowledge, there is no violation, claim, demand, litigation,
proceeding or governmental investigation (whether pending or threatened) arising
from applicable Environmental Laws relating to any Company. None of the
Companies is subject to any judgment, decree, order, or consent agreement
relating to compliance with any Environmental Laws, or the cleanup of Hazardous
Materials under any Environmental Laws;
(e) Sellers
have delivered true, complete and correct copies of any and all reports, or
other documents possessed by or in the control of any Seller or any Company
pertaining to the environmental condition of the Facility, Hazardous Materials
on the Facility and regarding the Companies’ compliance with applicable
Environmental Laws. Except for such reports or documents, there has been no
investigation, study, audit, test, review or other analysis (including any Phase
I environmental assessments) conducted by, for, or provided to any Seller or
any
Company with respect to matters affecting the environment, health or safety
in
relation to the Business; and
(f) Except
as
set forth in Schedule
3.16(f)(i),
to the
best of the Sellers’ knowledge, the Facility does not contain and none of the
Companies otherwise operate any underground storage tanks. Except as set forth
in Schedule
3.16(f)(ii),
to the
best of the Sellers’ knowledge, there have been no discharges, emissions,
spilling, leaking, pouring, emptying, or other releases of Hazardous Materials
which are or were reportable by any Seller or any Company under any
Environmental Laws.
3.17 Affiliate
Transactions.
Except
as set forth in Schedule
3.17,
no
Affiliate of any Company nor any member, manager, officer, director or equity
holder of any thereof, is party to any agreement, transaction or understanding
(other than the Charter Documents of the Companies) with any Company. Except
pursuant to the Companies’ Charter Documents, the consummation of the
transactions contemplated by this Agreement will not (either alone, or upon
the
occurrence of any act or event, or with the lapse of time, or both) result
in
any benefit or payment (severance or other) arising or becoming due from any
Company to any Person other than Sellers in accordance with the terms of this
Agreement.
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3.18 Intellectual
Property Rights.
Schedule
3.18
lists
all of the Intellectual Property owned or licensed by any Company and used
in
connection with its Business. The use by the Companies of the Intellectual
Property does not infringe any rights of any third party and no activity of
any
third party infringes upon the rights of the respective Companies with respect
to any of the Intellectual Property. None
of
the Sellers nor any Company has received notice of any claims asserted by any
Person with respect to challenging the ownership, validity, enforceability
or
use of the Intellectual Property, nor, to the best of Sellers’ knowledge, are
there any valid grounds for any such bona fide claims. To the extent any Company
uses any Intellectual Property owned by a third party, such Company has a
license with such third party for the use of such Intellectual Property and
is
not in default under any such license.
3.19 Bank
Accounts; Powers of Attorney.
Schedule
3.19
lists
each bank, trust company, savings institution, brokerage firm, mutual fund
or
other financial institution with which any Company has an account or safe
deposit or lock box and the names and identification of all persons authorized
to draw on it or to have access to it as of the Closing Date. Except
as
set forth on Schedule 3.19,
none of
the Companies nor any of their managers or officers, has any power of attorney
with respect to the Business outstanding.
3.20 Fuel
Volume Records.
True
and correct copies of each Company’s fuel volume records and gross receipt
statements as filed with the relevant airport authority for the period from
January 1, 2005 through September 30, 2006 are attached as Schedule
3.20.
Such
statements accurately reflect the volume of fuel sold and revenues earned by
each Company during such period and were prepared in accordance with such
Company’s books and records.
3.21 Disclosure.
To the
best of Sellers’ knowledge, no representations or warranties by the Sellers in
this Agreement or in any document, exhibit, statement, certificate or schedule
which is furnished or to be furnished by the Sellers in connection with the
Closing of the transactions herein contemplated, (i) contains or will
contain any untrue statement of a material fact, or (ii) omits or will omit
to state, when read in conjunction with all of the information contained in
this
Agreement, the Schedules hereto and the other Transaction Documents, any
material fact necessary to make the statements or facts contained therein not
misleading.
ARTICLE
4
BUYER’S
REPRESENTATIONS AND WARRANTIES
As
an
inducement to Sellers to enter into this Agreement, Buyer represents and
warrants to Sellers that:
4.1 Organization.
Buyer
is a limited liability company duly formed, validly existing and in good
standing under the Laws of the State of Delaware.
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4.2 Power
and Authority.
Buyer
has full power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. Any
third-party approvals or consents which may be required for Buyer to enter
into
this Agreement or to consummate the transaction contemplated hereby have been,
or will prior to Closing, be obtained by Buyer.
4.3 Authorization;
No Breach.
The
execution, delivery and performance of this Agreement has been duly and validly
authorized by Buyer, and this Agreement constitutes a valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
(except as may be limited by bankruptcy, insolvency, reorganization and other
similar laws and equitable principles relating to or limiting creditors’ rights
generally). The
execution, delivery and performance of this Agreement, and the consummation
of
the transactions hereunder, will not violate, conflict with, result in a
breach or constitute a default under Buyer’s Charter Documents, any Law to which
Buyer is subject or any agreement to which Buyer is a party.
4.4 Reliance.
Buyer
has relied solely upon its expertise, experience, due diligence review and
the
written representations and warranties contained in this Agreement. Buyer has
not relied upon any oral representations by any Seller, any agents or
representatives of the Sellers, or any agents, representatives or employees
of
any Company in entering into or executing this Agreement. Buyer further
acknowledges that no Person acting on behalf of the Sellers is authorized to
make, and that no Person has made, any representation, agreement, statement,
warranty, guarantee or promise regarding the real property used in the Business
or the transaction contemplated herein, except as otherwise expressly provided
herein. No representation, warranty, agreement, statement, guarantee or promise,
if any, made by any Person acting on behalf of any Seller which is not contained
in this Agreement will be valid or binding on any Seller.
4.5 Securities
Laws.
Buyer
acknowledges and is aware of the following:
(a) No
federal or state agency has made any finding or determination as to the fairness
of the purchase of the Ownership Interests nor any recommendation or endorsement
of the Ownership Interests;
(b)
Buyer
is
purchasing the Ownership Interests for long-term investment for its own account
only and not with a view to, or for resale in, any “distribution” within the
meaning of the Securities Act of 1933, as amended (the “Act”); and
(c) The
purchase and sale of the Ownership Interests is being made in reliance upon
exemptions from the registration requirements of the Act and any and all
applicable state securities laws. Because the Ownership Interests have not
been
registered, Buyer understands and agrees that the Ownership Interests cannot
be
sold by it until registered under the Act and applicable State securities law
unless an exemption from such registration is available and that a legend
reflecting this fact will be placed on all certificates representing the
Ownership Interests.
4.6 Brokerage.
No
agent, broker, finder, or investment or commercial banker engaged by or on
behalf of Buyer is or will be entitled to any brokerage commission, finders’
fees or similar compensation from any Seller as a result of this Agreement
or
any of the transactions contemplated herein.
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4.7 Litigation.
There
is no action, suit, proceeding, judgment or order pending or, to the best of
Buyer’s knowledge, threatened against or affecting Buyer before any federal,
state, municipal or other governmental court or agency which would have a
material adverse effect on Buyer’s performance under this Agreement or the
consummation of the transactions contemplated hereby.
ARTICLE
5
PRE-CLOSING
COVENANTS
5.1 Affirmative
Covenants.
Prior
to the Closing, the Sellers shall, or shall cause the Companies to, as
applicable:
(a) use
commercially reasonable efforts to cause AAC to assign that certain Aviation
Fuel Supply Agreement between AVFUEL Corporation and AAC dba Supermarine (the
“AVFUEL
Agreement”)
from
AAC to one of the Companies;
(b) use
commercially reasonable efforts to obtain all consents and approvals from any
parties that may be necessary or reasonably requested by Buyer to consummate
the
transactions contemplated by this Agreement, including without limitation the
consent of AVFUEL Corporation to the assignment of the AVFUEL Agreement from
AAC
to one of the Companies;
(c) conduct
the Business only in the usual and ordinary course of business and consistent
with past practices, including, without limitation, consistent with past
practices in respect of managing working capital (including billing and
collection of receivables and payment of payables);
(d) use
commercially reasonable efforts to keep in full force and effect each Company’s
existence and all rights, franchises, Permits and Intellectual Property rights
relating to or pertaining to the Business;
(e) use
commercially reasonable efforts to retain each Company’s employees and preserve
each Company’s present business relationships;
(f) maintain
the Personal Property in customary repair, order and condition and in the event
of any casualty, loss or damage to any of the Personal Property prior to
Closing, either repair or replace such assets with assets of comparable quality
or transfer to Buyer at Closing the proceeds of any insurance recovery with
respect thereto;
(g) maintain
each Company’s books, accounts and records in accordance with past custom and
practice as applied by the Sellers and the Companies, on a consistent basis;
(h) maintain
all Insurance Policies; and
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(i) not
be in
material default under any Material Contract, Lease or Permit, or cure any
such
material default within the applicable cure period.
5.2 Notification
of Certain Events.
The
Sellers shall promptly give Buyer written notice of the existence or occurrence
of any condition which would make any representation or warranty made by the
Sellers contained herein untrue as of the date of this Agreement or any
subsequent date as if made on and as of such subsequent date (except for those
representations and warranties which address matters only as of a particular
date) or which might reasonably be expected to prevent the consummation of
the
transactions contemplated hereby. No notification made pursuant to this
Section 5.2
shall be
deemed to cure any breach of any representation or warranty, nor shall any
such
notification be considered to constitute or give rise to a waiver by Buyer
of
any condition set forth in this Agreement.
5.3 Access.
Prior
to Closing, the Sellers will (a) during ordinary business hours and in a
commercially reasonable manner, permit Buyer and its authorized representatives
to have access to the Facility and the Companies’ books, records and key
personnel, (b) furnish, as soon as reasonably practicable, to Buyer or its
authorized representatives such other information in any Seller’s possession
with respect to the Companies as Buyer may from time to time reasonably request,
and (c) otherwise reasonably cooperate in the examination of the Companies
by Buyer.
5.4 Negative
Covenants.
From
the Effective Date to the Closing Date, the Sellers shall not permit any Company
to, and the Sellers shall not, with respect to any Company, without the prior
written consent of Buyer, which consent shall not be unreasonably withheld
or
delayed:
(a) transfer
or sell any assets that are material, individually or in the aggregate, outside
the ordinary course of business consistent with past practices;
(b) assume,
guarantee, endorse or otherwise become liable or responsible for any
indebtedness of any other Person;
(c) incur
or
agree to incur any obligation or liability, or make any capital expenditures
or
commitments with respect thereto, in each case that are material, individually
or in the aggregate, except those obligations, liabilities and capital
expenditures set forth on Schedule
5.4(c);
(d) defer
any
capital expenditure or capital improvements that is reasonably required for
the
operation of the Business;
(e) make
any
loans, or investments in, any other Person;
(f) pledge
or
otherwise mortgage any assets or allow any Encumbrance thereupon, in each case
that are material individually or in the aggregate;
(g) terminate,
amend or fail to renew any Permits;
(h) terminate,
amend or fail to renew any Insurance Policies;
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(i) amend,
modify or terminate any Material Contract, in any case that is adverse in any
material respect to any Company;
(j) except
as
set forth on Schedule
5.4(j), increase
the compensation, benefits or other remuneration of any current officers or
key
employees, or enter into any employment or consulting contract or arrangement
with any person which is not terminable at will, without penalty or continuing
obligation;
(k) adopt
a
plan of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of any Company;
(l) alter
through merger, liquidation, reorganization, restructuring or any other fashion
the ownership of the Ownership Interests by the Sellers;
(m) except
as
set forth in Schedule 5.4(m),
make,
change or revoke any Tax election or make any agreement or settlement with
any
taxing authority, enter
into any closing agreement, settle any Tax claim or assessment relating to
any
Company, consent to any extension or waiver of the limitation period applicable
to any Tax claim or assessment, or take any other similar action relating to
the
filing of any Tax Return;
(n) except
as
expressly contemplated in this Agreement, take any action or permit to occur
any
event described in Section 3.7;
(o) take
any
action or omit to take any action which will result in a violation of any
applicable Law or cause a breach of any Material Contract, Lease, Permit or
representation or warranty set forth in Article
3;
(p) ▇▇▇▇
for
goods or services, or take any action to collect any accounts receivable, or
run
down inventory, in any case outside the ordinary course of business or
inconsistent with past practices, or defer payment of any accounts payable
for
more than thirty (30) days after receipt of any invoice with respect thereto;
or
(q) enter
into any agreement, or otherwise commit, to do any of the
foregoing.
5.5 No
Shop.
From
the Effective Date through the Closing, no Seller shall sell or otherwise
transfer any of the Ownership Interests to any other Person, and none of the
Sellers nor any Company, or any of their Affiliates, officers, manager,
employees, representatives or agents, shall, directly or indirectly, solicit,
initiate or participate in any way in discussions or negotiations with, or
provide any information or assistance to, any Person or group of Persons (other
than Buyer and its Affiliates) concerning any acquisition of an equity interest
in, or in a merger, consolidation, liquidation, dissolution, disposition of
assets (other than in the ordinary course of business and as specifically
permitted pursuant to this Agreement) of any Company, or any disposition of
any
of the Ownership Interests (other than pursuant to the transactions contemplated
by this Agreement), or assist or participate in, facilitate or encourage any
effort or attempt by any other Person to do or seek to do any of the
foregoing.
5.6 HSR
Filings.
Buyer
and the Sellers will, as promptly as practicable following the execution and
delivery of this Agreement, file with the Federal Trade Commission and the
Department of Justice the notification and report forms, if any, required for
the transactions contemplated hereby pursuant to the HSR Act. Any such
notification and report forms will be in substantial compliance with the
requirements of the HSR Act. Each Party shall furnish to the other Party such
necessary information and reasonable assistance as the other may request in
connection with its preparation of any filing or submission which is necessary
under the HSR Act. Each Party shall keep the other apprised of the status of
any
communications with, and inquiries or requests for additional information from,
the Federal Trade Commission and Department of Justice. Buyer shall pay the
filing fees applicable to filings required by the HSR Act in connection with
the
transactions contemplated by this Agreement.
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5.7 Benefit
Plans.
Upon
Buyer’s request, the Sellers shall cause each Company to take action prior to
the Closing Date to terminate the Benefit Plans that it sponsors and to withdraw
Company Employees from participation in any Benefit Plans that it does not
sponsor.
5.8 Employees.
(a) The
Sellers shall cause AAC or the Companies to provide Buyer’s representatives with
reasonable access to Company Employees and books and records relating thereto
for the purpose of interviewing such individuals for prospective employment
with
the Companies, Buyer or a Buyer Affiliate after the Closing.
(b) Prior
to
Closing, Buyer shall, or shall cause one or more of its Affiliates
(collectively, the “New
Employer”)
to:
(i) make
offers to such Company Employees that it desires to hire at the Closing, with
compensation and benefits (including Group Health Plan coverage) on the same
basis as such benefits are provided to comparable employees of Buyer and its
Affiliates (the “Offerees”);
and
(ii) permit
such Offerees that accept such offers of employment as of the Closing (the
“Hired
Employees”)
to
elect to transfer their accumulated and unused vacation and other paid time
off
to the books of a New Employer, or, in the event that a Hired Employee fails
to
elect to cause such transfer, cause the Company to reimburse AAC for the payment
by AAC to the Hired Employees of such accumulated and unused vacation and other
paid time off; provided,
that
the Closing Net Working Capital shall be adjusted to reflect the assumption
of
such liabilities by the New Employer or the obligation to pay AAC.
(c) The
Sellers shall cause the management of the Companies and AAC to use good faith
efforts to persuade all Offerees to accept offers from a New Employer as soon
as
practicable before the Closing.
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ARTICLE
6
CLOSING
CONDITIONS - BUYER
6.1 Conditions
to Closing.
The
obligation of Buyer to consummate the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions on or
before the Closing Date:
(a) The
representations and warranties set forth in Article
3
and the
information set forth in the schedules to this Agreement shall have been true
and correct in all material respects as of the effective date of this Agreement
and shall be true and correct in all material respects as of the Closing Date
as
though made on the Closing Date, except for those representations and warranties
which address matters only as of a particular date, which shall continue to
be
true and correct in all material respects as of that particular date, and the
Sellers shall have delivered to Buyer a certificate to that effect;
(b) The
Sellers and the Companies shall have performed or complied with all of the
covenants and agreements required under this Agreement, and the Sellers shall
have delivered to Buyer a certificate to that effect;
(c) No
order
of any court or administrative agency shall be in effect which restrains or
prohibits the transactions contemplated hereby, and there shall not have been
threatened, nor shall there be pending, any action or proceeding by or before
any court or governmental agency or other regulatory or administrative agency
or
commission: (i) challenging any of the transactions contemplated by this
Agreement or seeking monetary relief by reason of the consummation of such
transactions; (ii) by any present or former owner of any equity interest in
any Company (whether through a derivative action or otherwise) against any
Seller, any Company or any officer, manager, partner, director or member of
any
Company; or (iii) which could reasonably be expected to have a material
adverse effect on the business or condition (financial or otherwise) of the
Companies;
(d) Each
Seller shall have executed and delivered to Buyer original or facsimile
counterparts of each Transaction Document to which he, she or it is a party,
and
the Escrow Agent shall have executed and delivered to Buyer original or
facsimile counterparts to the Escrow Agreement, in each case in accordance
with
the provision in Section
8.1
permitting the use of facsimile copies;
(e) Any
and
all governmental approvals and all consents by third parties that are required
for the transfer of the Ownership Interests and the consummation of the
transactions contemplated hereby, shall have been obtained and no such approval
or consent shall have been conditioned upon the modification in any material
respect, cancellation or termination of any Material Contract, Lease or Permit
or shall impose on Buyer or any Company any material condition, provision,
requirement or additional cost not presently imposed upon the Sellers or any
Company or any condition that would be materially more restrictive after the
Closing than the conditions presently imposed on the Sellers or the Companies,
as the case may be;
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(f) Buyer
shall have received reasonable confirmation from the Sellers (including payoff
letters from each of the Companies’ lenders) that all Funded Indebtedness has
been, or will be in connection with the Closing, satisfied in full and of the
absence of any and all Encumbrances affecting any Company, the Facility or
Business;
(g) All
necessary filings pursuant to the HSR Act shall have been made and all
applicable waiting periods thereunder shall have expired or been terminated;
(h) The
Sellers shall have delivered to Buyer the Audited Statements and the Interim
Unaudited Statements, and there shall be no material differences between the
Audited Statements and the Unaudited 2005 Statements;
(i) The
Sellers shall have delivered an opinion of counsel, dated as of the Closing
Date
and addressed to Buyer, substantially in the form set forth as Exhibit
“E”;
(j) Each
Seller shall have delivered to Buyer a tax certificate under Treas. Reg.
1.1445-2(b)(2) stating that such Seller is not a “foreign person” within the
meaning of Section 1445 of the Code, in form and substance reasonably
satisfactory to Buyer;
(k) Buyer
shall have received a good standing certificate and copies of the Charter
Documents of each Company from the Sellers, in each case dated as of a date
not
more than thirty (30) days prior to the Closing Date, and the original minute
books of each Company which shall contain complete and accurate records of
all
material actions by each Company and its directors, shareholders or partners,
as
the case may be;
(l) Buyer
shall have received an estoppel letter from the authority with jurisdiction
over
the Facility, addressed to Macquarie Infrastructure Company, Inc., and its
subsidiaries and their lenders, consenting to the transactions contemplated
hereby and confirming (i) a true, correct and complete copy of the Ground Lease
(which shall be attached to the estoppel letter), (ii) the term of the Ground
Lease, (iii) that no breach or default exists under the Ground Lease, and no
amounts are past due thereunder, (iv) that the authority has not repudiated
the
Ground Lease and (v) that the Ground Lease is in full force and effect;
provided,
that,
the
Sellers and the Companies shall have used commercially reasonable efforts to
obtain, in addition, confirmation from the authority that (x) except as set
forth in Schedule 3.8(b)(vii),
no
additional capital expenditures are required under the Ground Lease and (y)
no
subsidence has occurred at the Facility or the runways or aprons appurtenant
thereto;
(m) Buyer
shall have received such information and certifications from the Sellers, the
Companies and the Companies’ accountants to enable Buyer and its Affiliates to
prepare any and all disclosure material as may be required by applicable federal
securities Laws and regulations promulgated by the Securities and Exchange
Commission pursuant thereto (including financial statements and related
notes in compliance with federal securities Laws), including consents of the
Companies’ accountants to the inclusion of such financial statements in
appropriate filings with the Securities and Exchange Commission;
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(n) The
transactions contemplated by the ▇▇▇▇▇▇▇ Purchase Agreement shall have been
consummated;
(o) Buyer
shall have received releases and waivers from the Sellers, each in the form
of
Exhibit
“F”;
(p) Buyer
shall have received written resignations from each of the officers and directors
listed on Schedule
3.1(ii),
which
resignations shall be effective as of the Closing Date;
(q) Buyer
shall have received reasonable confirmation from Sellers that ACS is and has
been a validly electing S corporation within the meaning of Sections 1361
and 1362 of the Code, and the comparable provisions of any relevant Tax Law
in
each state or local jurisdiction in which it conducts business, at all times
since its inception;
(r) A
sufficient number of Company Employees to operate and conduct the Facility
and
the Business as operated and conducted as of the Effective Date shall have
accepted employment with one of the Companies, Buyer or a Buyer Affiliate on
or
prior to the Closing;
(s) The
Companies shall have terminated any and all management agreements entered into
by and between any of the Companies and AAC; and
(t) there
shall not have been any material adverse change with respect to the Facility
or
the Business since June 30, 2006.
6.2 Waiver
of Conditions.
Any
conditions specified in Section
6.1
may be
waived by Buyer in writing.
ARTICLE
7
CLOSING
CONDITIONS - SELLERS
7.1 Conditions
to Closing.
The
obligation of the Sellers to consummate the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions on or
before the Closing Date:
(a) Buyer
shall have delivered the Closing Funds, as adjusted pursuant to Section
2.2(a),
to the
Sellers or, at the Sellers’ direction, to any third parties in satisfaction of
Funded Indebtedness, and the Escrow Funds to the Escrow Agent, in each case
in
accordance with the terms of this Agreement;
(b) The
representations and warranties set forth in Article
4
shall
have been true and correct in all material respects as of the effective date
of
this Agreement and shall be true and correct in all material respects as of
the
Closing Date as though made on the Closing Date, except for those
representations and warranties which address matters only as of a particular
date, which shall continue to be true and correct in all material respects
as of
that particular date, and Buyer shall have delivered to the Sellers a
certificate to that effect;
-29-
(c) Buyer
shall have performed or complied with all of the covenants and agreements
required under this Agreement, and Buyer shall have delivered to the Sellers
a
certificate to that effect;
(d) Buyer
shall have received no notice of legal action or proceeding which shall have
been instituted or overtly threatened by any governmental agency seeking to
restrain, prohibit, invalidate or otherwise affect the consummation of the
transactions contemplated by this Agreement;
(e) Buyer
shall have executed and delivered to the Sellers original or facsimile
counterparts of each Transaction Document to which it is a party and the Escrow
Agent shall have executed and delivered to the Sellers original or facsimile
counterparts to the Escrow Agreement, in each case in accordance with the
provision in Section
8.1
permitting the use of facsimile copies;
(f) The
Sellers shall have received a good standing certificate and a copy of the
Charter Documents and resolutions of the managing member (or other authorizing
actions or instruments) of Buyer authorizing the execution, delivery and
performance by Buyer of this Agreement and the transactions contemplated by
this
Agreement, and an incumbency certificate evidencing the authority and specimen
signature of each manager or officer of Buyer executing this Agreement and
any
other certificate provided pursuant to this Section
7.1,
each in
form and substance reasonably satisfactory to the Sellers and certified by
the
secretary or an assistant secretary of Buyer (or another responsible officer
of
Buyer) as of the Closing Date. Such certification shall state that such Charter
Documents and resolutions (or other authorizing actions or instruments) have
not
been amended, modified, revoked or rescinded and are in full force and effect
on
and as of the Closing Date and that all proceedings required to be taken on
the
part of Buyer in connection with the transactions contemplated by this Agreement
have been duly authorized and taken;
(g) All
necessary filings pursuant to the HSR Act shall have been made and all
applicable waiting periods thereunder shall have expired or been terminated;
and
(h) The
Sellers shall have received a release and waiver from the Companies which is
in
the form of Exhibit “G.”
7.2 Waiver
of Conditions.
Any
condition specified in Section
7.1
may be
waived by Sellers in writing.
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ARTICLE
8
CLOSING
MATTERS
8.1 The
Closing.
The
closing of the transactions contemplated in this Agreement (the “Closing”)
will
take place at the offices of Pillsbury ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, at 10:00 a.m. (local time), or at such
other place as Buyer and the Sellers may mutually agree, on a Business Day
selected by Buyer and the Sellers that is no sooner than three (3) days and
no
later than five (5) days after the day on which the last of the conditions
to
Closing set forth in Section
6.1
and
Section
7.1
(other
than those conditions which are only capable of being satisfied contemporaneous
with the Closing) have been satisfied or waived (the “Closing
Date”).
The
Parties agree that signature pages of documents required to be delivered at
the
Closing may be delivered by facsimile, provided that originally executed
documents are sent via overnight courier immediately thereafter.
The
Closing will be effective as of 11:59 p.m. on the Closing Date (the
“Effective
Time”).
8.2 Action
to Be Taken at the Closing.
The
sale and delivery of the Ownership Interests and the payment of the Purchase
Price shall take place at the Closing.
8.3 Closing
Documents.
(a) The
Sellers shall deliver to Buyer at the Closing the following items and documents
(collectively, the “Transaction
Documents”),
duly
executed by each Seller where necessary to make them effective:
(i) customary
assignments and transfers of the Ownership Interests, each in a form that is
reasonably acceptable to Buyer,
including without limitation certificates representing all of the issued and
outstanding shares of capital stock of ACS and Supermarine Investors duly
endorsed in blank or accompanied by blank stock powers;
(ii) a
certificate dated the Closing Date, to the effect that the conditions set forth
in Sections
6.1(a) and (b)
have
been satisfied;
(iii) a
release
and waiver in the form attached hereto as Exhibit
“F”;
(iv) the
Escrow Agreement in the form attached hereto as Exhibit
“B”;
and
(v) such
other documents or instruments as Buyer reasonably may request to effect the
transactions contemplated hereby.
(b) Buyer
shall deliver to the Sellers at the Closing the following items and documents,
duly executed by Buyer where necessary to make them effective:
(i) customary
assignments and transfers of the Ownership Interests, each in a form that is
reasonably acceptable to Buyer;
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(ii) a
certificate dated the Closing Date, signed on its behalf by an authorized
officer, to the effect that the conditions set forth in Sections
7.1(b)
and
(c)
have
been satisfied;
(iii) a
certificate dated the Closing Date, signed on its behalf by an authorized
officer, in accordance with Section
7.1(f);
(iv) the
Escrow Agreement in the form attached hereto as Exhibit
“B”;
and
(v) such
instruments of assumption and other documents or instruments as the Sellers
reasonably may request to effect the transaction contemplated
hereby.
(c) The
Companies shall deliver to the Sellers at Closing a release and waiver in the
form attached hereto as Exhibit “G.”
ARTICLE
9
INDEMNIFICATION
9.1 Indemnification
by Seller 1.
Subject
to the limitations set forth in this Article
9,
Seller
1 agrees to indemnify Buyer and the Companies, and their respective
stockholders, officers, directors, employees, Affiliates and agents, and their
successors and assigns (collectively, the “Buyer
Indemnified Parties”),
and
hold them harmless against any Losses which any of the Buyer Indemnified Parties
may suffer, sustain or become subject to as a result of or arising
from:
(a) any
inaccuracy in or breach of any of the representations or warranties of the
Sellers contained in this Agreement or in any exhibits, schedules, certificates
or other documents delivered or to be delivered pursuant to the terms of this
Agreement or otherwise incorporated in this Agreement;
(b) any
breach of, or failure to perform, any agreement or covenant of the Sellers
contained in this Agreement, including without limitation delivery of the
estoppel letter referenced in Section
6.1(l);
(c) Taxes
as
described in Section
11.5;
(d) any
liabilities arising out of or relating to any Benefit Plan and any other
liability of any ERISA Affiliate asserted against a Buyer Indemnified Party;
and/or
(e) the
matters identified by an asterisk (*) set forth on Schedules
3.4(a), 3.4(b), 3.7, 3.11,
3.13(f)
and 3.16(f)(ii).
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9.2 Indemnification
by Buyer.
Subject
to the limitations set forth in this Article
9,
Buyer
agrees to indemnify the Sellers and their Affiliates and agents (collectively,
the “Seller
Indemnified Parties”),
and
hold them harmless against any Losses which any of the Seller Indemnified
Parties may suffer, sustain or become subject to as a result of or arising
from:
(a) any
inaccuracy in or breach of any of the representations or warranties of Buyer
contained in this Agreement;
(b) any
breach of, or failure to perform, any agreement or covenant of Buyer contained
in this Agreement; or
(c) the
operations of the Business subsequent to Closing.
9.3 Method
of Asserting Claims.
(a) In
the
event that any of the Indemnified Parties is made a defendant in or party to
any
Claim, the Indemnified Party shall give the Indemnifying Party written notice
thereof within thirty (30) days of its knowledge of the same. The failure to
give such notice timely shall not affect any Indemnified Party’s right to
indemnification unless (and then only to the extent that) such failure or delay
has materially and adversely affected the Indemnifying Party’s ability to defend
successfully a Claim. The Indemnifying Party shall be entitled to contest and
defend such Claim provided it diligently contests and defends such Claim. Notice
of the intention so to contest and defend shall be given by the Indemnifying
Party to the Indemnified Party within fifteen (15) Business Days after the
Indemnified Party’s notice of such Claim (but, in all events, at least five (5)
Business Days prior to the date that an answer to such Claim is due to be filed
taking into account any extensions to file a responsive pleading obtained by
either Party). Such contest and defense shall be conducted by reputable
attorneys employed by the Indemnifying Party at its sole cost and expense.
The
Indemnified Party shall be entitled at any time, at its own cost and expense
(which expense shall not constitute a Loss), to participate in such contest
and
defense and to be represented by attorneys of its or their own choosing;
provided, however, that if the Indemnifying Party does not or ceases to conduct
the defense of such Claim actively and diligently, (i) the Indemnified Party
may
defend against, and, with the prior written consent of the Indemnifying Party
(which consent will not be unreasonably withheld, conditioned or delayed),
consent to the entry of any judgment or enter into any settlement with respect
to, such Claim, (ii) the Indemnifying Party will reimburse the Indemnified
Party promptly and periodically for the costs of defending against such Claim,
including reasonable attorneys’ fees and expenses and (iii) the Indemnifying
Party will remain responsible for any Losses the Indemnified Party may suffer
as
a result of such Claim to the full extent provided in this Agreement. If the
Indemnified Party elects to participate in such defense, the Indemnified Party
shall reasonably cooperate with the Indemnifying Party in the conduct of such
defense. Neither the Indemnified Party nor the Indemnifying Party may concede,
settle or compromise any Claim without the consent of the other Party, which
consent shall not be unreasonably withheld, conditioned or delayed, if pursuant
to or as a result of such concession, settlement or compromise, (i) injunctive
relief or specific performance would be imposed against the Indemnified Party,
(ii) such concession, settlement or compromise would lead to liability or create
any financial or other obligation on the part of the Indemnified Party for
which
the Indemnified Party is not entitled to indemnification hereunder, or (iii)
such concession, settlement or compromise will not result in a full release
of
the Indemnified Party with respect to such Claim. Notwithstanding the foregoing,
in the event the Indemnifying Party fails or is not entitled to contest and
defend a Claim, the Indemnified Party shall be entitled to contest, defend
and
settle such Claim in such manner and on such terms as the Indemnified Party
may
deem appropriate and the Indemnified Party shall be entitled to recover from
the
Indemnifying Party the amount of any settlement or judgment and, on an ongoing
basis, all costs and expenses of the Indemnified Party with respect thereto,
including interest from the date such costs and expenses were incurred. If
at
any time, in the reasonable opinion of the Indemnified Party, notice of which
shall be given in writing to the Indemnifying Party, any Claim seeks relief
which could have a material adverse effect on any Indemnified Party, the
Indemnified Party shall have the right to control or assume (as the case may
be)
the defense of any such Claim and the amount of any judgment or settlement
and
the reasonable costs and expenses of defense shall be included as part of the
indemnification obligations of the Indemnifying Party hereunder. If the
Indemnified Party should elect to exercise such right, the Indemnifying Party
shall have the right to participate in, but not control, the defense of such
Claim at the sole cost and expense of the Indemnifying Party.
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(b) In
the
event any Indemnified Party should have a claim against any Indemnifying Party
that does not involve a Claim, the Indemnified Party shall deliver a notice
of
such claim within ninety (90) days of its knowledge of such claim to the
Indemnifying Party; provided, that, the failure to give such notice timely
shall
not affect any Indemnified Party’s right to indemnification unless (and then
only to the extent that) such failure or delay materially and adversely affects
the Indemnifying Party’s rights. Included in such written notice will be a
statement of the amount of the Loss, a brief explanation of the Loss, and
instructions for payment by certified or bank cashier’s check or by wire
transfer of immediately available funds. If the Indemnifying Party notifies
the
Indemnified Party that it does not dispute the claim described in such notice,
the Loss in the amount specified in the Indemnified Party’s notice shall be
deemed a liability of the Indemnifying Party and the Indemnifying Party shall
pay the amount of such Loss to the Indemnified Party on demand.
9.4 Limits
on Indemnification.
(a) With
respect to any claims arising under Section
9.1
or
Section
9.2,
an
Indemnified Party shall not be entitled to indemnification until the aggregate
Losses suffered by the Indemnified Parties exceed Two Hundred Fifty Thousand
Dollars ($250,000) (the “Threshold”),
whereupon the Indemnifying Party shall be liable to indemnify the Indemnified
Party under this Article
9
for all
Losses incurred in excess of the Threshold; provided,
however,
that
such Threshold shall not apply to any claims arising under Section
9.1(a)
that are
a result of a breach by the Sellers of any of their representations in
Sections
3.3, 3.4(b), 3.5 and 3.9,
or
Sections
9.1(b), (c) or (e),
or
based on fraud, willful misconduct or intentional misrepresentation. No Party
shall be entitled to recovery under this Article
9
for any
amounts that are paid by insurance.
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(b) The
maximum aggregate liability of Seller 1 to indemnify the Buyer Indemnified
Parties under this Article
9
shall be
thirty percent (30%) of the Purchase Price (the “Cap”);
provided,
however,
that,
the Cap shall not apply to, and Seller 1’s maximum aggregate liability to
indemnify the Buyer Indemnified Parties under this Article
9
shall be
an amount equal to the Purchase Price, as adjusted pursuant to Section
2.2,
with
respect to any claims arising under Section
9.1(a)
that are
a result of a breach by the Sellers of any representations in Sections
3.4(b) or 3.5,
any
claims arising under Section
9.1(e)
and any
claims based on fraud, willful misconduct or intentional
misrepresentation.
9.5 Survival.
(a) The
right
of an Indemnified Party to initiate any action for breach of any representation,
warranty, covenant or obligation contained in this Agreement and to demand
and
receive any indemnification in respect thereof or otherwise pursuant to this
Article
9
shall
survive the Closing and terminate and expire eighteen (18) months after the
Closing Date (the “Expiration
Date”),
except as provided in Section
9.5(b).
If a
claim for indemnification is made in good faith by an aggrieved Party against
another Party and notice of such claim is provided to such other Party in
writing prior to the Expiration Date (which notice shall describe in reasonable
detail the basis of such claim), the rights of the aggrieved Party under this
Article
9
shall
survive the Expiration Date with respect to such claim until such claim has
been
finally resolved. If a Party fails to provide written notice to another Party
of
an alleged breach of any representation, warranty, covenant or obligation
contained in this Agreement prior to the Expiration Date, the facts and
circumstances on which such alleged breach is founded shall be deemed for all
purposes not to be a breach or a proper basis for any claim whatsoever with
respect to such representation, warranty, covenant or obligation.
(b) Notwithstanding
the terms of Section
9.5(a),
any
claims based on fraud, willful misconduct or intentional misrepresentation
or
the following provisions shall not terminate and expire on but shall survive
the
Expiration Date until fifteen (15) days after the expiration of the longest
relevant federal or state statute of limitations period with respect to such
claims, or three (3) years after the Closing Date, whichever is longer:
Sections
3.3, 3.5, 3.9, 3.13, 3.16, 9.1(e), 11.5, and 11.9.
9.6 Tax
Treatment of Indemnification Payments.
Unless
otherwise required by applicable Law, all indemnification payments shall
constitute adjustments to the Purchase Price for all Tax purposes, and no Party
shall take any position inconsistent with such characterization.
ARTICLE
10
TERMINATION
10.1 Termination.
(a) This
Agreement may be terminated at any time prior to the Closing:
(i) by
mutual
written consent of Buyer and the Sellers;
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(ii) by
either
Buyer or the Sellers if the other is in material breach of any representation,
warranty or covenant set forth in this Agreement and such breach, if capable
of
cure, is not cured within ten (10) days after written notice
thereof;
(iii) by
Buyer
if any of the conditions specified in Article
6
shall
not have been fulfilled by the time required and shall not have been waived
by
Buyer; or
(iv) by
the
Sellers if any of the conditions specified in Article
7
shall
not have been fulfilled by the time required and shall not have been waived
by
the Sellers.
(b) If
the
Closing has not occurred prior to the date that is one hundred eighty (180)
days
after the Effective Date, this Agreement may be terminated by any party which
is
not in breach of the provisions hereof.
10.2 Effect
of Termination.
In the
event of termination of this Agreement as provided above, this Agreement shall
forthwith become void, and there shall be no liability on the part of Sellers
or
Buyer except as otherwise expressly stated herein; provided,
however,
that if
this Agreement is terminated and none of the Sellers is in breach hereof, Buyer
shall reimburse the Sellers for the cost of any audit performed to satisfy
the
requirements of Section
3.6(b);
provided, further,
that
this Section
10.2
shall
not release (a) any Party from liability resulting from a breach by such
Party under this Agreement or (b) any Party from its obligations under
Article
9
and
Sections
11.1, 11.2, 11.7, 12.2, 12.3, 12.6 and 12.10.
ARTICLE
11
ADDITIONAL
AGREEMENTS
11.1 Press
Release and Announcements.
No
press release related to this Agreement or the transaction contemplated hereby,
or other written announcements to the employees, customers or suppliers of
any
Company, shall be issued without the joint approval of Buyer and the Sellers,
except in accordance with the Laws, rules, regulations and orders of any
governmental entity (including applicable federal securities Laws and stock
exchange listing rules).
11.2 Confidentiality.
Buyer
and the Sellers acknowledge the continued effectiveness of that certain
Confidentiality Agreement entered into by and between Macquarie Infrastructure
Company Inc. and AAC as of April 21, 2006, as may be modified from time to
time
by written consent (the “Confidentiality
Agreement”).
Notwithstanding the foregoing, the Sellers shall cause AAC to permit Buyer
to
make public disclosures regarding the Business, including its financial
condition and results of operations, in accordance with the Laws, rules,
regulations and orders of any governmental entity (including applicable federal
securities Laws and stock exchange listing rules).
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11.3 Remittances.
All
remittances, mail and other communications relating to any Company received
by
any Seller at any time after the Closing Date shall be immediately turned over
to Buyer.
11.4 Cooperation
to Obtain Consents.
From
the date of this Agreement through the Closing Date, the Parties shall consult
and cooperate with each other and use commercial best efforts to (a) obtain
all required governmental and third party consents, (b) make any required
filings or submissions with governmental authorities, and (c) cause the
conditions precedent to Closing set forth in Section
6.1
and
Section
7.1
to be
satisfied, all as may be necessary for the consummation of the Closing and
the
transactions contemplated by this Agreement.
11.5 Tax
Matters.
(a) Sellers
shall, jointly and severally, indemnify and hold the Buyer Indemnified Parties
harmless from and against any and all Taxes: (i) imposed on any Company or
their
respective assets or arising in connection with or out of the operation of
the
Business, in each case to the extent such Taxes are attributable to Tax periods
or portions thereof ending on or before the Closing Date (determined, with
respect to Tax periods that begin before and end after the Closing Date, in
accordance with the allocation provisions of Section
11.5(b));
(ii)
owing by any Person (other than such Company) for which such Company may be
liable by law or contract, provided that in either case the indemnified amount
should be reduced by the amount of Taxes that were reserved for on the Closing
Balance Sheet to the extent that such Taxes were taken into account as a
reduction to the Purchase Price pursuant to Section
2.2
of this
Agreement; (c)
imposed
under Code sections
1374
or
1375, the regulations thereunder or any analogous or similar state, local or
foreign law on or before the Closing; or (d) of any member of an Affiliated
Group of which any Company (or any predecessor of the foregoing) is or was
a
member on or prior to the Closing Date, including pursuant to Treasury
Regulation §1.1502-6.
For
purposes of Article
9,
the
amount of Taxes subject to the foregoing indemnity shall be considered a Loss
incurred by a Buyer Indemnified Party and as if such Loss were attributable
to a
breach of representation under Section 3.9.
(b) For
purposes of this Section
11.5,
Taxes
incurred with respect to the Business or any Company for any period ending
on or
before the Closing Date shall be the responsibility of Sellers and such Taxes
for any period commencing after the Closing Date shall be the responsibility
of
Buyer, (i) except as provided in (ii) and (iii) below, to the extent feasible,
on a specific identification basis, according to the date of the event or
transaction giving rise to the Tax, and (ii) except as provided in (iii) below,
with respect to periodically assessed ad valorem Taxes and Taxes not otherwise
feasibly allocable to specific transactions or events, in proportion to the
number of days in such period occurring on and before the Closing Date compared
to the total number of days in such taxable period, and (iii) in the case of
any
Tax based upon or related to income or receipts, in an amount equal to the
Tax
which would be payable if the relevant taxable period ended on the Closing
Date,
based upon an interim closing of the books as of the close of business on the
Closing Date (and for such purpose, the Taxable period of any partnership or
other pass -through entity in which any Company holds a beneficial interest
shall be deemed to terminate at such time). With respect to each Company, all
determinations necessary to give effect to the foregoing allocations shall
be
made in a manner consistent with prior practices of such Company.
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(c) After
the
Closing, Sellers shall prepare and file income Tax Returns required for ACS
and
Supermarine of Santa ▇▇▇▇▇▇ for any period ending prior to the Closing Date
and
for the period ending on the Closing Date and to the extent allowed by law,
all
such Tax Returns shall be filed in a manner consistent with past practice.
Seller shall also prepare consistent with past practice (to the extent allowed
by law) all income Tax Returns for Supermarine Investors for the period ending
on December 31, 2006, although it is understood that Buyer will be required
to sign and file such income Tax Returns. Buyer shall prepare and file income
Tax Returns for Supermarine Investors for the period beginning January 1,
2007. Buyer and Sellers shall cooperate fully, as and to the extent reasonably
requested by the other party, in connection with the preparation of all Tax
Returns required with respect to the Business or any Company relating to taxable
periods (or portions thereof) beginning on or before the Closing and shall
provide or cause to be provided to one another any records and other information
reasonably requested by the other Party in connection therewith as well as
reasonable access to the other Party’s accountant. Each party shall submit a
draft of any Tax Return which it is required to file hereunder to the other
party not less than thirty (30) days prior to its due date (including any
extension of such due date). The other party shall have the opportunity to
comment upon such Tax Return and the party whose responsibility it is to file
such Tax Return shall reasonably consider any objection or suggestion that
other
party may have. However, the final determination shall be made at the sole
discretion of the party whose obligation it is to file such Tax Return;
provided,
however,
that
the Tax Return of Supermarine Investors for the period ending December 31,
2006
shall be subject to Buyer’s approval, such approval not to be unreasonably
withheld. To the extent Taxes are payable which have been reserved upon the
Closing Balance Sheet which were taken into account as a reduction to the
Purchase Price pursuant to Section 2.2
of this
Agreement, the Company which has such reserve shall provide the funds up to
the
amount of such reserve to pay any Taxes. To the extent such Taxes exceed any
such reserve, Sellers shall provide the funds to pay any such Taxes for which
Sellers are responsible under this Section 11.5.
(d) After
the
Closing, Buyer and Sellers shall cooperate fully in connection with any Tax
investigation, audit or other proceeding (“Audit”)
relating to the Business or any Company for any taxable periods (or portions
thereof) beginning on or before the Closing. Seller shall be responsible for,
and shall be entitled to, handle and manage any such Audit with respect to
all
periods for which it is responsible to file Tax Returns. Buyer shall be
responsible for, and shall be entitled to, handle and manage any such Audit
with
respect to all periods for which it is responsible to file Tax Returns. The
party handling the Audit shall keep the other party reasonably informed with
respect to such Audit. Such party shall not settle such Audit without the
consent of the other party, which shall not be unreasonably withheld, delayed
or
conditioned, unless the result of such settlement is that any required payment
does not exceed the amount reserved for Taxes on the Closing Date Balance Sheet
with respect thereto or the party settling is responsible for, and pays, any
excess over the amount so reflected. Notwithstanding anything to the contrary
herein, in
no
event shall the Sellers settle any Audit without Buyer’s consent (which consent
shall not unreasonably be withheld) if such settlement could materially
adversely affect the Company with respect to any period after the Closing or
could reasonably be expected to result in any material liability on the part
of
the Company or such successor in interest for which the Sellers are not
obligated to indemnify the Buyer pursuant to Section
11.5(a)
of this
Agreement. In
the
event the Sellers determine not to challenge any position taken in Audit, to
the
extent such position could have a material adverse effect on any of the
Companies with respect to any period after the Closing, Buyer shall have the
right to assume the powers and authority to handle such Audit. Any
information obtained pursuant to Section 11.5(c),
this
Section 11.5(d)
or
pursuant to any other Section hereof providing for the sharing of
information or the review of any Tax Return or other schedule relating to Taxes
shall be subject to the terms of the Confidentiality Agreement.
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(e) The
Purchase Price shall be allocated (i) among the Companies; (ii) to the extent
allocated to Supermarine of Santa ▇▇▇▇▇▇, among the assets of Supermarine of
Santa ▇▇▇▇▇▇; and (iii) to the extent allocated to ACS, among the assets of
ACS, all in accordance with the Allocation Statement annexed as Schedule
11.5(e)
hereto.
The Allocation Statement has been prepared in accordance with Section 1060
of
the Code and any comparable provisions of state, local or foreign Law, as
appropriate. Buyer, the Companies and Sellers will report the allocation of
the
total consideration among the Companies and then among the assets of Supermarine
of Santa ▇▇▇▇▇▇ and of ACS in a manner consistent with the Allocation Statement
and will act in accordance with the Allocation Statement in the preparation
and
timely filing of all Tax Returns (including filing Form 8594 or Form 8883,
as
applicable, with their respective federal income Tax Returns for the taxable
year that includes the Closing Date and any other forms or statements required
by the Code, Regulations, the IRS or any applicable state or local Tax
authority). The Allocation Statement shall be appropriately adjusted if and
when
any Post-Closing Adjustments are made pursuant to Section 2.2
of this
Agreement. Buyer and Sellers agree to promptly provide the other Party with
any
reasonable additional information with respect to Buyer or Sellers, as the
case
may be, and reasonable assistance required to complete Form 8594 or Form 8883
or
to compute Taxes arising in connection with (or otherwise affected by) the
transactions contemplated by this Agreement. Each Party will promptly inform
the
other of any challenge by any Tax authority to any allocation made pursuant
to
this Section
11.5(e).
Any
challenge to such allocation shall be handled in accordance with Section 11.5(d).
(f) Buyer
and
the Sellers shall jointly make and file an election under
Section 338(h)(10) of the Code (and any comparable provisions of state,
local or foreign Tax law) with respect to the purchase of shares of ACS Common
Stock and, at Closing, the parties shall execute a Form 8023 (or successor
form), with all attachments. The parties shall cooperate with each other to
take
all actions necessary and appropriate (including filing such additional forms,
returns, elections, schedules and other documents as may be required) to effect
and preserve a timely election in accordance with the provisions of Treas.
Reg.
§ 1.338(h)(10)-1 (or any comparable provisions of state, local or
non-United States Tax law) or any successor provisions.
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(g) The
Sellers shall cause Supermarine of Santa ▇▇▇▇▇▇ to have in effect for its
taxable year which includes the Closing an election under Section 754 of
the Code.
11.6 Reporting
Cooperation.
Each
Seller agrees to provide commercially reasonable assistance to Buyer and its
Affiliates (at Buyer’s sole cost and expense) to enable Buyer and its Affiliates
to prepare any and all disclosure material required by applicable federal
securities Laws and regulations promulgated by the Securities and Exchange
Commission pursuant thereto (including financial statements and related
notes in compliance with federal securities Laws), and to enable the Companies’
accountants to consent to the inclusion of such financial statements in
appropriate filings with the Securities and Exchange Commission. Each
Seller expressly acknowledges that Buyer will be required to prepare audited
financial statements for the Companies and their affiliates that are parties
to
the ▇▇▇▇▇▇▇ Purchase Agreement for the period ended December 31, 2004, within
seventy-five (75) days after Closing, and each Seller covenants and agrees
to
provide Buyer with such documents, certifications and/or instruments as Buyer
reasonably requests in connection therewith, including responses to inquiries
from Buyer’s auditors regarding the Business and management of the
Companies.
11.7 Further
Assurances.
Each
Party agrees to execute and deliver such further documents and instruments
and
to take such further actions after the Closing as may be necessary or desirable
and reasonably requested by any other Party to give effect to the transactions
contemplated by this Agreement.
11.8 Litigation
Support.
In
the
event and for so long as Buyer, any Company or any of their Affiliates actively
is contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any
fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction that existed
on or prior to the Closing Date involving any of the Companies, each Seller
will
cooperate with Buyer, the Companies and each of their Affiliates in the contest
or defense and provide such testimony and access to such Seller’s books and
records as shall be reasonably necessary in connection with the contest or
defense, all at the sole cost and expense of Buyer (unless the contesting or
defending party is entitled to indemnification therefor under Article
9
hereof).
This provision shall be inapplicable to any direct claims between the Sellers
on
the one hand and Buyer, the Companies and their Affiliates on the other
hand.
11.9 Non-Competition.
(a) To
induce
Buyer to enter into this Agreement, each Seller agrees that, for a period of
twenty-four (24) months after the Closing Date, such Seller will not, and will
cause his, her or its Affiliates not to, directly or indirectly, through any
corporation, limited liability company, partnership, association, joint venture
or other entity, purchase, invest in, fund or otherwise engage in, or assist
the
establishment of, a business which includes fueling rights at ▇▇▇▇▇▇▇
International Airport or Santa ▇▇▇▇▇▇ Municipal Airport as principal or
agent.
-40-
(b) To
induce
Buyer to enter into this Agreement, each Seller agrees that, for a period of
twenty-four (24) months after the Closing Date, such Seller will not, and will
cause his, her or its Affiliates not to:
(i) solicit
business, that is competitive with the Business, from any customer of any of
the
Companies; or
(ii) hire
or
solicit to perform services (as an employee, consultant or otherwise) any
persons listed on Schedule
3.14(a)(i)
or take
any actions which are intended to persuade any such person to terminate his
or
her association with any Company.
(c) From
and
after the Closing, each Seller shall, and shall cause his, her or its Affiliates
to, keep confidential and not disclose to any other Person, other than such
Seller’s accountants, attorneys or financial advisors or to the extent necessary
to fulfill any legal or existing contractual obligation (provided,
that,
any
such Person to whom information is disclosed is informed of its confidential
nature and is directed to treat the information confidentially), or use for
their own benefit or the benefit of any other Person, any information regarding
any Company, their Affiliates and the material terms of this Agreement
(including the Purchase Price).
(d) Each
Seller acknowledges and agrees that Buyer would be irreparably damaged in the
event any of the provisions of this Section
11.9
were not
performed in accordance with their specific terms or were otherwise breached.
Accordingly, each Seller agrees that, in addition to any other remedy to which
Buyer may be entitled at law or in equity, Buyer shall be entitled to seek
an
injunction or injunctions to prevent breaches of the provisions of this
Section
11.9
and to
seek to enforce specifically such provisions.
11.10 Benefit
Plans.
Each
Seller covenants and agrees to cause AAC to (i) permit Hired Employees to roll
over any loans from the American Airports Corporation 401K Retirement Savings
Plan (the “401(k)
Plan”)
in-kind to a similar plan maintained by a New Employer or an Affiliate and
(ii)
cooperate with Buyer to provide a method for Hired Employees to continue to
make
loan repayments to the 401(k) Plan, if required, for a reasonable time after
the
Closing Date. The Sellers shall cause AAC or another ERISA Affiliate to continue
to maintain Group Health Plans and to offer continuation coverage under COBRA
to
all M&A qualified beneficiaries (as defined in Treas. Reg. Section
54.4980B-9, Q&A 4) for the maximum continuation period available under
COBRA. The Sellers acknowledges that consummation of the transactions
contemplated by this Agreement will result in a partial termination of the
401(k) Plan, and the Sellers will cause AAC to cause Hired Employees to become
one hundred percent (100%) vested in the accrued benefits thereunder as of
the
Closing Date. The Sellers
shall cause the Benefit Plans which are Group Health Plans to pay all claims
incurred on or before the Closing Date and by participating Hired Employees
or
their dependents or beneficiaries to the extent such claims would be paid in
the
absence of the transactions contemplated by this agreement.
-41-
11.11 Use
of
Supermarine Name.
Buyer
acknowledges and agrees that no rights in the name “Supermarine” are being
acquired by Buyer or retained by the Companies. Promptly following the Closing,
Buyer shall change the name of Supermarine of Santa ▇▇▇▇▇▇ from “Supermarine of
Santa ▇▇▇▇▇▇ a California Limited Partnership,” and the name of Supermarine
Investors from “Supermarine Investors, Inc.,” and shall cease using the name
“Supermarine” as soon as commercially practicable following the Closing, but in
any event, if no third party consents are required to cease using the name
“Supermarine”, no later than thirty (30) days following the Closing, but if
third party consents are required, and provided that Buyer is using commercially
reasonable efforts to obtain such third party consents, no later than
one
(1)
year following
the Closing. Buyer shall cooperate with the Sellers and execute such documents
as the Sellers reasonably request to transfer to the Sellers any and all
interests in the name “Supermarine.”
11.12 Seller
Representative.
(a) ▇▇▇▇▇
▇.
▇▇▇▇▇ is hereby appointed by each Seller (and their successors and assigns)
as
agent and attorney-in-fact (the “Seller
Representative”)
for
each Seller, for and on behalf of such Sellers, (i) to enter into and perform
the Escrow Agreement, to authorize delivery to the Buyer Indemnified Parties
of
cash from the Escrow Funds in satisfaction of claims by the Buyer Indemnified
Parties, to object to such deliveries, to agree to, negotiate, enter into
settlements and compromises of, and demand arbitration and comply with orders
of
courts and awards of arbitrators with respect to such claims, and to take all
actions necessary or appropriate in the reasonable judgment of the Seller
Representative for the accomplishment of the foregoing, and (ii) with the
consent of the Sellers, to execute any amendment, waiver or consent of this
Agreement or the Escrow Agreement.
(b) The
Seller Representative shall not be liable for any act done or omitted hereunder
as the Seller Representative while acting in good faith and in the exercise
of
reasonable judgment. Sellers shall severally indemnify the Seller Representative
and hold the Seller Representative harmless against any loss, liability or
expense incurred without negligence, bad faith or willful misconduct on the
part
of the Seller Representative and arising out of or in connection with the
acceptance or administration of the Seller Representative’s duties hereunder,
including the reasonable fees and expenses of any legal counsel retained by
the
Seller Representative. Buyer is entitled to rely on the actions taken by, and
consents and approvals given by, the Seller Representative without the need
to
investigate whether the Seller Representative has obtained the requisite consent
described in Section 11.12(a)(ii). Buyer shall be entitled to rely on the
Seller Representative’s actions, consents and approvals notwithstanding any
knowledge of Buyer. Buyer shall have no liability for relying on the Seller
Representative in the foregoing manner.
(c) Concurrent
with the execution hereof, each Seller has delivered to the Seller
Representative certificates representing such Seller’s Ownership Interests along
with stock powers or other articles of transfer executed in blank authorizing
the Seller Representative to transfer such Ownership Interests to Buyer at
the
Closing solely as all of Sellers’ conditions to Closing are satisfied. Each
Seller hereby authorizes the Seller Representative to deliver such certificates
to Buyer in connection with the Closing of the transactions contemplated by
this
Agreement in exchange for the contemporaneous payment of the portion of the
Purchase Price to which such Seller is entitled pursuant to the terms
hereof.
-42-
11.13 Shareholders
and Partners Agreement.
The
Prices acknowledge and agree that effective as of the date of this Agreement,
that certain Shareholders and Partners Agreement, dated July 2, 1998, by and
between Dallas Price and ▇▇▇▇▇ ▇▇▇▇▇ shall cease to apply and be of no further
force or effect with respect to the Companies.
ARTICLE
12
MISCELLANEOUS
12.1 Amendment
and Waiver.
This
Agreement may be amended, and any provision of this Agreement may be waived;
provided that any such amendment or waiver shall be binding on the Party against
whom the amendment is being asserted only if such amendment or waiver is set
forth in a writing executed by such Party against whom the amendment is being
asserted and then only to the specific purpose, extent and instance so provided.
12.2 Notices.
All
notices, demands and other communications to be given or delivered under or
by
reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given when personally delivered, when mailed by certified
mail, return receipt requested, when sent by facsimile with confirmation of
receipt received, or when delivered by overnight courier with executed receipt.
Notices, demands and communications to the Sellers or Buyer shall, unless
another address is specified in writing in accordance herewith, be sent to
the
address indicated below:
Notices
to any Seller:
▇▇▇▇▇
▇.
▇▇▇▇▇
Chairman
& CEO
American
Airports Corporation
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇
#▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy to:
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇
Glusker Fields Claman & Machtinger LLP
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
-43-
Notices
to Buyer:
Macquarie
FBO Holdings LLC
c/o
Macquarie Infrastructure Company
▇▇▇
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇
Tel:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
with
copies to:
Executive
Air Support, Inc.
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel:
(▇▇▇)
▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
and
Pillsbury
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇
▇.
▇▇▇▇▇▇▇, Esq.
Tel:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
12.3 Assignment.
This
Agreement and all of the provisions hereof shall be binding upon and inure
to
the benefit of the Parties and their respective successors and assigns. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assignable by any Party without the prior written consent of the other
Parties; provided,
however,
that
Buyer may, upon written notice to the Sellers, assign in whole its right, title
and interest under this Agreement to any of its Affiliates; provided,
further,
that
such assignment shall not release Buyer from its indemnification and other
obligations hereunder.
12.4 Captions.
The
captions used in this Agreement are for convenience of reference only and do
not
constitute a part of this Agreement and shall not be deemed to limit,
characterize or in any way affect any provision of this Agreement, and all
provisions of this Agreement shall be enforced and construed as if no caption
had been used in this Agreement.
-44-
12.5 Complete
Agreement; Schedules and Exhibits.
Each
schedule and exhibit delivered pursuant to the terms of this Agreement shall
be
in writing and shall constitute a part of this Agreement, although schedules
need not be attached to each copy of this Agreement. This Agreement, together
with such schedules and exhibits, and the documents referred to herein contain
the complete agreement between the Parties and supersede any prior
understandings, agreements or representations by or between the Parties, written
or oral, which may have related to the subject matter hereof in any
way.
12.6 Governing
Law.
The
Laws of the State of California, without regard to conflict of law doctrines,
govern all questions concerning the construction, validity and interpretation
of
this Agreement and the performance of the obligations imposed by this
Agreement.
Each
Party has been represented by its own counsel in connection with the negotiation
and preparation of this Agreement and, consequently, each Party hereby waives
the application of any rule of Law that would otherwise be applicable in
connection with the interpretation of this Agreement, including but not limited
to any rule of law to the effect that any provision of this Agreement shall
be
interpreted or construed against the party whose counsel drafted that
provision.
12.7 Counterparts.
This
Agreement may be executed by facsimile transmission and in counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
12.8 Third
Party Beneficiaries.
Except
with respect to any indemnification claim by a Buyer Indemnified Party or Seller
Indemnified Party, nothing in this Agreement is intended or will be construed
to
entitle any Person, other than Buyer and the Sellers or their respective
permitted transferees and assigns, to any claim, cause of action, remedy or
right of any kind.
12.9 Severability.
The
validity, legality or enforceability of the remainder of this Agreement will
not
be affected even if one or more of the provisions of this Agreement will be
held
to be invalid, illegal or unenforceable in any respect.
12.10 Expenses.
Except
as otherwise expressly set forth in this Agreement, each Party shall, whether
or
not the transactions contemplated hereby are consummated, pay all costs and
expenses incurred by or on behalf of such Party in connection with the
negotiation, execution and Closing of this Agreement and the transactions
contemplated hereby and its investigation and evaluation of the Ownership
Interests and the Companies. Notwithstanding
the foregoing, Buyer and the Sellers agree to share equally the fees and
expenses of the Escrow Agent in connection with the Escrow Agreement and the
transactions contemplated thereby.
[Signatures
on Next Page]
-45-
IN
WITNESS WHEREOF, each of the Parties has duly executed and delivered this
Agreement as of the Effective Date.
SELLERS:
| /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
|
▇▇▇▇▇ ▇. ▇▇▇▇▇, individually and as trustee for the ▇▇▇▇▇ ▇. ▇▇▇▇▇ 2006 Family Trust dated January 13, 2006 |
||
| /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇-▇▇▇ ▇▇▇▇▇ | ||
|
▇▇▇▇▇▇ ▇. ▇▇▇▇▇-▇▇▇ ▇▇▇▇▇, individually and as trustee for the ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇ ▇▇▇▇▇ 2006 Family Trust dated May 3, 2006 |
||
| SUPERMARINE AVIATION, LIMITED | ||
| /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
|
▇▇▇▇▇ ▇. ▇▇▇▇▇, President |
||
|
BUYER:
|
MACQUARIE FBO HOLDINGS LLC | |
| By: MACQUARIE INFRASTRUCTURE | ||
|
COMPANY
INC. (d/b/a Macquarie Infrastructure Company (USA)),
|
||
|
as
Managing Member
|
||
|
By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇▇
|
||
|
Its:
Chief
Executive Officer
|
||
-46-
EXHIBIT
“A”
DEFINITIONS
|
A.
|
Certain
Matters of Construction.
For purposes of this Agreement,
in addition to the definitions referred to or set forth in this
Exhibit
“A”:
|
|
1.
|
Reference
to a particular Section of this Agreement will include all its
subsections.
|
|
2.
|
The
words “Party”
and “Parties”
will refer to the Sellers and Buyer.
|
|
3.
|
Definitions
will apply to both the singular and plural forms of the terms defined,
and
references to the masculine, feminine or neuter gender will include
each
other gender.
|
|
4.
|
All
references in this Agreement to any Exhibit or Schedule will, unless
the
context otherwise requires, be deemed to be a reference to an Exhibit
or
Schedule, as the case may be, to this Agreement, all of which are
made a
part of this Agreement.
|
B. Definitions.
“401(k)
Plan”
is
defined in Section
11.10.
“AAC”
is
defined in the recitals.
“Accounting
Principles”
is
defined in Section
2.2(a).
“ACS”
is
defined in the recitals.
“ACS
Common Stock”
is
defined in Section
3.5(a).
“Actual
Net Working Capital Adjustment”
is
defined in Section
2.2(c).
“Adjustment
in Favor of Buyer”
is
defined in Section
2.2(c).
“Adjustment
in Favor of Sellers”
is
defined in Section
2.2(c).
“Affiliate”
means
an individual or entity that directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with,
a specified individual or entity. For purposes of this definition, “control”
shall include, without limitation, the exertion of significant influence over
an
individual or entity and shall be conclusively presumed as to any fifty percent
(50%) or greater equity interest.
“Allocation
Statement”
is
defined in Section
11.5(d).
“Audited
Statements”
is
defined in Section
3.6(b).
-47-
“AVFUEL
Agreement”
is
defined in Section
5.1(a).
“Benefit
Plans”
is
defined in Section
3.13(a).
“Business”
is
defined in the recitals.
“Business
Day”
means
any day other than a Saturday, Sunday, or day on which commercial banks are
authorized by law to close in New York City.
“Buyer”
is
defined in the Preamble.
“Buyer
Indemnified Parties”
is
defined in Section
9.1.
“Buyer
Objection Notice”
is
defined in Section
2.2(d).
“Buyer
Sub”
is
defined in Section
1.1(c).
“Cap”
is
defined in Section
9.4(b).
“Charter
Documents”
shall
mean, as applicable, the specified entity’s (i) certificate or articles of
incorporation or formation or other charter or organizational documents, and
(ii) bylaws or operating agreement, each as from time to time in
effect.
“Claim”
means
any action or proceeding instituted by any third party.
“Closing”
is
defined in Section
8.1.
“Closing
Date”
is
defined in Section
8.1.
“Closing
Date Balance Sheet”
is
defined in Section
2.2(b).
“Closing
Funds”
is
defined in Section
2.1.
“Closing
Net Working Capital”
is
defined in Section
2.2(b).
“Closing
Net Working Capital Adjustment”
is
defined in Section
2.2(a).
“COBRA”
means
Section 4980B of the Code, Part 6 of Title I of ERISA, similar provisions of
state law and applicable regulations relating to any of the
foregoing.
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Company”
and
“Companies”
are
defined in the recitals.
“Confidentiality
Agreement”
is
defined in Section
11.2.
“Contracts
Schedule”
means
Schedule
3.10.
“Effective
Date”
is
defined in the Preamble.
-48-
“Effective
Time”
is
defined in Section
8.1.
“Employee
Pension Benefit Plan”
has
the
meaning set forth in Section 3(2) of ERISA.
“Employee
Welfare Benefit Plan”
has
the
meaning set forth in Section 3(1) of ERISA.
“Encumbrance”
means
any mortgage, charge, claim, option, right to acquire, pledge, lien, security
interest, attachment or other encumbrance, including any agreement to create
any
of the foregoing.
“Environmental
Law”
means
all applicable Laws pertaining to the environment, Hazardous Materials,
pollution or occupational safety and health, and includes without limitation
the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
§§ 9601 et. seq. (“CERCLA”),
Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act
of
1986 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et
seq., the Oil Pollution Act of 1990, 33 U.S.C. §§ 2701 et seq. and
implementing state Laws promulgated thereunder.
“Environmental
Permits”
means
all material permits, approvals, certificates and licenses required under any
Environmental Law.
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended.
“ERISA
Affiliate”
means
each Person that is or was required to be treated as a single employer with
any
Company under Section 414 of the Code or Section 4001(b)(1) of
ERISA.
“Escrow
Agent”
means
Wachovia Bank.
“Escrow
Agreement”
is
defined in Section
2.1.
“Escrow
Funds”
is
defined in Section
2.1.
“Estimated
Net Working Capital Adjustment”
is
defined in Section
2.2(a).
“Expiration
Date”
is
defined in Section
9.5.
“Facility”
is
defined in the recitals.
“Final
Payment”
is
defined in Section
2.2(f).
“Financial
Statements”
is
defined in Section
3.6(b).
“Funded
Indebtedness”
means
(i) all indebtedness for money borrowed (whether in the form of direct
loans or capital leases) and purchase money indebtedness, (ii) indebtedness
of the type described in clause (i) above secured by any lien upon
property owned by any Company, even though such Company has not in any manner
become liable for the payment of such indebtedness, (iii) interest expense
accrued but unpaid, and all prepayment premiums, on or relating to any of such
indebtedness, (iv) indebtedness of the type described in
clause (i) above guaranteed, directly or indirectly, by any Company,
and (v) any purchase money indebtedness for premiums for insurance
maintained by any Company to the extent the outstanding balance thereof exceeds
the amortized value of the premiums.
-49-
“GAAP”
means
U.S. generally accepted accounting principles.
“Ground
Lease”
means
that certain Fixed Base Operator Lease Agreement (Agreement Number 4671 (CCS))
dated May 1, 1986 and amended (1) May 5, 1987, (2) November 25, 1987, (3)
October 31, 1988 and (4) April 3, 2003 between the City of Santa ▇▇▇▇▇▇ and
Supermarine of Santa ▇▇▇▇▇▇., for premises and operations located at Santa
▇▇▇▇▇▇ Municipal Airport, including all amendments, supplements and
modifications thereto.
“Group
Health Plan”
has
the
meaning set forth in Code Section 5000(b).
“Hazardous
Material”
means
any substance, pollutant, contaminant, radiation or chemical which has been
determined under applicable Environmental Laws to be hazardous to human health
or safety or the environment including, without limitation, all of those
substances which are listed or defined as “pollutants,” “contaminants,”
“hazardous materials,” “hazardous wastes,” “hazardous substances,” “toxic
substances,” “radioactive materials,” or other similar designations pursuant to
Environmental Laws.
“Hired
Employees”
is
defined in Section
5.8(b)(ii).
“HSR
Act”
means
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended from time
to time.
“Indemnified
Party”
means
a
Buyer Indemnified Party or a Seller Indemnified Party, as applicable.
“Indemnifying
Party”
means
the Party obligated to indemnify an Indemnified Party.
“Indemnifiable
Losses”
means
any Loss for or against which any Party is entitled to indemnification under
this Agreement.
“Insurance
Policies”
is
defined in Section
3.10(b).
“Intellectual
Property”
means
all trademarks and trade names, trademark and trade name registrations, service
marks and service ▇▇▇▇ registrations, copyrights and copyright registrations,
patent and patent applications and all material licenses and other agreements
and information relating to technology, know-how, software or processes used
in
or otherwise necessary to the Business, whether proprietary to any Company
or
licensed or otherwise authorized to use by others.
“Interim
Unaudited Statements”
is
defined in Section
3.6(b).
“Law”
means
any federal, state or local law, statute, rule or regulation and any resolution,
ruling, ordinance, enactment, judgment, order, decree, directive or other
requirement having the force of law, including any official interpretation
of
any of the foregoing, of or by any governmental authority, as in effect from
time to time.
-50-
“Lease”
and
“Leases”
are
defined in Section
3.8(a).
“Leases
Schedule”
means
Schedule
3.8.
“Liabilities
Schedule”
means
Schedule
3.4.
“Loss”
means
any and all costs and expenses (including, but not limited to, reasonable
professionals’ fees), damages and losses actually incurred by the Indemnified
Party.
“Material
Contracts”
is
defined in Section
3.10(b).
“New
Employer”
is
defined in Section
5.8(b).
“Offerees”
is
defined in Section
5.8(b)(i).
“Ownership
Interests”
is
defined in Section
1.1.
“Pension
Plans”
is
defined in Section
3.13(a).
“Permits”
is
defined in Section
3.15.
“Person”
means
any natural person, limited liability company, partnership, trust,
unincorporated organization, corporation, association, joint stock company,
business, group, governmental authority (including any subdivision thereof)
or
other entity or body.
“Personal
Property”
is
defined in Section
3.8(c).
“Prices”
is
defined in the Preamble.
“Prohibited
Transactions”
has
the
meaning set forth in ERISA Section 406 and Section 4975 of the
Code.
“Purchase
Price”
is
defined in Section
2.1.
“Referee” is
defined in Section
2.2(e).
“Seller
1”
is
defined in the Preamble.
“Seller
2”
is
defined in the Preamble.
“Seller
3”
is
defined in the Preamble.
“Sellers”
is
defined in the Preamble.
“Seller
Indemnified Parties”
is
defined in Section
9.2.
“Seller
Representative”
is
defined in Section
11.12.
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“Seller
Adjustment Notice”
is
defined in Section
2.2(c).
“SI
Common Stock”
is
defined in Section
3.5(b).
“SOSM
GP Interests”
is
defined in Section
3.5(c).
“SOSM
LP Interests”
is
defined in Section
3.5(c).
“▇▇▇▇▇▇▇
Purchase Agreement”
is
defined in the recitals.
“Subsidiary”
means
any entity of which any Company (or other specified entity) owns directly or
indirectly through a Subsidiary, a nominee arrangement or otherwise at least
a
majority of the outstanding capital stock (or other shares of beneficial
interest) entitled to vote generally.
“Supermarine
Investors”
is
defined in the recitals.
“Supermarine
of Santa ▇▇▇▇▇▇”
is
defined in the recitals.
“Target
Closing Net Working Capital”
is
defined in Section
2.2(a).
“Tax”
means
any foreign, federal, state, county or local income, sales and use, excise,
franchise, real and personal property, transfer, gross receipt, capital stock,
production, business and occupation, disability, employment, payroll, severance
or withholding tax or charge imposed by any governmental entity, together with
any interest, assessments, fines additions and penalties (civil or criminal)
related thereto or to the nonpayment thereof, and any Loss in connection with
the determination, settlement or litigation of any Tax liability; (ii)
any
liability for the payment of any amounts of the type described in clause (i)
as
the result of being (or ceasing to be) a member of an affiliated, consolidated,
combined or unitary group (or being included (or required to be included) in
any
Tax Return related thereto); and (iii) any liability for the payment of any
amounts as a result of an express or implied obligation to indemnify or
otherwise assume or succeed to the liability of any other Person with respect
to
the payment of any amounts of the type described in clause (i) or clause
(ii).
“Tax
Return”
means
a
report, return or other information supplied to or required to be supplied
to a
governmental entity with respect to Taxes including
any schedule or attachment thereto, and including any amendment thereof,
and
shall
be treated as a Tax Return of each entity included or required to be included
in
a return filed on a combined, consolidated, unitary or similar.
“Threshold”
is
defined in Section
9.4(a).
“Transaction
Documents”
is
defined in Section
8.3.
“Unaudited
2005 Statements”
is
defined in Section
3.6(a).
“Unaudited
2006 Statements”
is
defined in Section
3.6(a).
“Unaudited
Financial Statements”
is
defined in Section
3.6(a).
“Welfare
Plan”
is
defined in Section
3.13(a).
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EXHIBIT
“C”
PURCHASE
PRICE ALLOCATION
|
Name
|
Percentage
Allocation
|
||
|
▇▇▇▇▇
▇. ▇▇▇▇▇
|
25.45% | ||
|
Dallas
P. Price ▇▇▇-▇▇▇▇▇
|
25.45% | ||
|
Supermarine
Aviation, Limited
|
49.10% | ||
|
Total:
|
100% | ||
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