Exhibit 10.1
EXECUTION COPY
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PURCHASE AGREEMENT
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Dated March 12, 2008
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TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS....................................................... 1
Section 1.1 Defined Terms........................................... 1
Section 1.2 Rules of Construction................................... 2
ARTICLE II PURCHASE AND SALE OF PURCHASED UNITS............................. 2
Section 2.1 Purchase and Sale of Purchased Units.................... 2
Section 2.2 Pre-Closing Distributions; Post-Closing Adjustments..... 4
Section 2.3 Closing Adjustment Statement............................ 6
Section 2.4 Closing................................................. 8
Section 2.5 Transfer Taxes.......................................... 9
ARTICLE III CONDITIONS TO CLOSING........................................... 9
Section 3.1 Conditions to Obligations of AAMAC...................... 9
Section 3.2 Conditions to Obligations of the Halcyon Parties........ 10
ARTICLE IV REPRESENTATIONS AND WARRANTIES CONCERNING THE HALCYON ENTITIES... 11
Section 4.1 Organization............................................ 12
Section 4.2 Authority............................................... 12
Section 4.3 No Breach............................................... 12
Section 4.4 No Brokers.............................................. 13
Section 4.5 Governmental Approvals.................................. 13
Section 4.6 Capitalization.......................................... 13
Section 4.7 Financial Information................................... 13
Section 4.8 Absence of Material Adverse Effect and Certain Events... 14
Section 4.9 Taxes................................................... 14
Section 4.10 AAMAC Proxy Statement................................... 16
Section 4.11 Assets and Properties................................... 16
Section 4.12 Contracts............................................... 16
Section 4.13 Litigation.............................................. 17
Section 4.14 Environmental Matters................................... 17
Section 4.15 Compliance with Applicable Law.......................... 17
Section 4.16 Permits................................................. 17
Section 4.17 Employee Matters........................................ 17
Section 4.18 Insurance............................................... 20
Section 4.19 Transactions with Affiliates............................ 21
Section 4.20 Halcyon Funds........................................... 21
Section 4.21 Business Intellectual Property.......................... 22
Section 4.22 Sufficiency of Assets................................... 22
Section 4.23 No Additional Representations........................... 23
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF AAMAC........................... 23
Section 5.1 Organization............................................ 23
Section 5.2 Authority............................................... 23
Section 5.3 Binding Obligation...................................... 24
Section 5.4 No Breach............................................... 24
Section 5.5 No Brokers.............................................. 24
Section 5.6 Governmental Approvals.................................. 24
Section 5.7 Capitalization.......................................... 24
Section 5.8 Financial Information................................... 26
Section 5.9 Absence of Material Adverse Effect and Certain Events... 26
Section 5.10 Taxes................................................... 27
Section 5.11 Assets and Properties................................... 28
Section 5.12 Contracts............................................... 29
Section 5.13 Litigation.............................................. 29
Section 5.14 Environmental Matters................................... 29
Section 5.15 Compliance with Applicable Law.......................... 30
Section 5.16 Permits................................................. 30
Section 5.17 Employee Matters........................................ 30
Section 5.18 Insurance............................................... 30
Section 5.19 AAMAC SEC Reports....................................... 30
Section 5.20 Investment Representations.............................. 31
Section 5.21 Required Vote of the AAMAC Stockholders................. 31
Section 5.22 Transactions with Affiliates............................ 32
Section 5.23 Opinion of Financial Advisor............................ 32
Section 5.24 No Additional Representations........................... 32
ARTICLE VI COVENANTS AND AGREEMENTS......................................... 33
Section 6.1 Conduct of Business..................................... 33
Section 6.2 Proxy Statement; AAMAC Stockholders' Meeting............ 36
Section 6.3 Directors and Officers of AAMAC After Closing........... 37
Section 6.4 Governmental Filings.................................... 37
Section 6.5 Required Information.................................... 38
Section 6.6 Confidentiality......................................... 38
Section 6.7 Public Disclosure....................................... 38
Section 6.8 Commercially Reasonable Best Efforts.................... 39
Section 6.9 Notices of Certain Events............................... 39
Section 6.10 Directors' and Officers' Insurance...................... 39
Section 6.11 New York Stock Exchange Listing......................... 40
Section 6.12 Amended and Restated AAMAC Organizational Documents..... 40
Section 6.13 Trust Waiver............................................ 40
Section 6.14 No Solicitation......................................... 40
Section 6.15 Control of Operations................................... 41
Section 6.16 Additional Agreements................................... 41
Section 6.17 Reorganization.......................................... 41
Section 6.18 Trust Account........................................... 41
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Section 6.19 AAMAC Plan.............................................. 41
Section 6.20 Purchase Price Allocation............................... 42
ARTICLE VII TERMINATION..................................................... 42
Section 7.1 Termination............................................. 42
Section 7.2 Effect of Termination................................... 43
Section 7.3 Termination Fee......................................... 43
ARTICLE VIII GENERAL PROVISIONS............................................. 44
Section 8.1 Survival of Representations, Warranties and Covenants... 44
Section 8.2 Assignment.............................................. 44
Section 8.3 Parties in Interest..................................... 44
Section 8.4 Amendment............................................... 44
Section 8.5 Waiver; Remedies........................................ 44
Section 8.6 Expenses................................................ 45
Section 8.7 Notices................................................. 45
Section 8.8 Entire Agreement........................................ 46
Section 8.9 Severability............................................ 46
Section 8.10 Consent to Jurisdiction................................. 46
Section 8.11 Exhibits and Schedules; Disclosure...................... 47
Section 8.12 Governing Law........................................... 47
Section 8.13 Counterparts............................................ 47
Section 8.14 Specific Performance.................................... 47
Section 8.15 Halcyon Representative.................................. 48
EXHIBITS
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Exhibit A - Reorganization Steps
Exhibit B - Definitions
Exhibit C - Anti-Dilution Adjustments
Exhibit D - Term Sheet for Halcyon Amended and Restated LLC Agreement
Exhibit E - Term Sheet for employment agreements
Exhibit F - Form Amended and Restated Certificate of Incorporation of AAMAC
Exhibit G - Form Certificate of Designation for AAMAC
Exhibit H - Summary of material terms of AAMAC Plan
Exhibit I - Term Sheet for Exchange and Support Agreement
Exhibit J - Term Sheet for AAMAC Shareholders' Agreement
Exhibit K - Amendments to Bylaws of AAMAC
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PURCHASE AGREEMENT
This Purchase Agreement is made and entered into as of March 12, 2008 by
and among:
o Alternative Asset Management Acquisition Corp., a Delaware
corporation ("AAMAC");
o Halcyon Management Group LLC, a Delaware limited liability company
("Halcyon");
o Halcyon Partners LP, a Delaware limited partnership (the "Halcyon
Partner Vehicle"); and
o Halcyon Asset Management LLC, Halcyon Offshore Asset Management LLC,
Halcyon Structured Asset Management LP, Halcyon Asset-Backed
Advisors LP and Halcyon Loan Investors LP (together with Halcyon and
the Halcyon Partner Vehicle, the "Halcyon Parties").
RECITALS
Prior to consummation of the transactions contemplated by this Agreement,
the entities listed on Section 1.1 of the Halcyon Disclosure Statement
(collectively, the "Halcyon Entities") shall be reorganized as set forth on
Exhibit A (or in some other manner not materially more adverse to AAMAC than as
set forth in Exhibit A or with the reasonable approval of AAMAC) and in
accordance with the Reorganization MOU, such that Halcyon will own all (except
to the extent set forth on Exhibit A) of the outstanding Equity Securities in
the Halcyon Entities (or such entities will be merged into Halcyon), and Halcyon
will be owned of record and beneficially by the Halcyon Partner Vehicle (the
"Reorganization").
Immediately prior to the Closing, the Halcyon Partner Vehicle will be the
record and beneficial owner of all the Purchased Units.
AAMAC desires to purchase from the Halcyon Partner Vehicle, and the
Halcyon Parties and the Halcyon Entities desire for the Halcyon Partner Vehicle
to sell to AAMAC, all the Purchased Units, upon the terms and subject to the
conditions set forth herein.
In consideration of the premises and of the mutual representations,
warranties, covenants and agreements hereinafter contained, AAMAC, Halcyon, and
the Halcyon Partner Vehicle (the "Parties") agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. Capitalized terms used in this Agreement, the
Exhibits and Schedules to this Agreement, the Halcyon Disclosure Statement and
the AAMAC Disclosure Statement shall have the meanings specified in Exhibit B.
Section 1.2 Rules of Construction. The rules of construction specified in
Exhibit B shall apply to this Agreement, the Exhibits and Schedules to this
Agreement, the Halcyon Disclosure Statement and the AAMAC Disclosure Statement.
ARTICLE II
PURCHASE AND SALE OF PURCHASED UNITS
Section 2.1 Purchase and Sale of Purchased Units.
(a) Subject to all the terms and conditions of this Agreement,
(i) AAMAC shall:
(x) purchase and acquire from the Halcyon Partner Vehicle, at the
Closing, all of the Purchased Units, and
(y) pay, at the Closing, for all the Purchased Units, the Cash
Consideration and make the Preferred Shares Issuance;
(ii) The Halcyon Partner Vehicle shall:
(x) sell, convey, transfer, assign and deliver to AAMAC at the
Closing, all of the Purchased Units, and
(y) accept in payment for all of the Purchased Units the Cash
Consideration and the Preferred Shares Issuance;
(iii) the 46,924,648 Class B Units of Halcyon held by the Halcyon
Partner Vehicle will become exchangeable for an equal number of shares of
AAMAC Common Stock in accordance with the Exchange Agreement.
(b) The purchase price for all of the Purchased Units, subject to
adjustment as provided in Section 2.2 and Section 2.1(d), shall be:
(i) Three Hundred Ninety million dollars ($390,000,000) (the "Cash
Consideration") subject to adjustment as provided in Section 2.1(d); and
(ii) 46,924,648 shares of AAMAC Preferred Stock, subject to
adjustment as provided in Section 2.1(d) (the "Preferred Shares
Issuance").
(c) In connection with the Reorganization, Halcyon shall issue to Halcyon
Partner Vehicle a note secured by the stock of Halcyon's subsidiaries with a
principal amount of $115,000,000, subject to adjustment as provided in Section
2.1(d), payable in five equal annual installments beginning on the first
anniversary of the Closing Date and accruing interest at 9% per annum,
calculated on the basis of a 365-day year, and payable at the end of each
calendar quarter, which note and security interests shall be subordinated to any
third party debt of Halcyon (the "Halcyon Note").
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(d) The Cash Consideration and Preferred Shares Issuance will be adjusted
as follows:
(i) If AAMAC does not have sufficient cash funds available to fund
the full amount of the Cash Consideration at Closing due to:
(A) the exercise of conversion rights by AAMAC Stockholders
pursuant to paragraph C of Article Sixth of AAMAC's Amended and
Restated Certificate of Incorporation, as in effect on the date
hereof (the amount required to be paid to AAMAC Stockholders in
connection with conversions, the "Conversion Amount");
(B) the Transaction Expenses of AAMAC, the Halcyon Parties or
the Halcyon Entities (the "Expenses Shortfall"); and/or
(C) any required payment of a Closing Adjustment to the
Halcyon Partner Vehicle pursuant to Section 2.1(d)(iv) (the "Closing
Adjustment Shortfall");
then, the Cash Consideration will be reduced by the shortfall (the
"Shortfall"). At the Closing, the Halcyon Partner Vehicle may elect, in
its sole discretion, that the principal amount of the Halcyon Note be
increased by all or part of the amount of the Shortfall, with all other
terms of the Halcyon Note remaining the same; provided, that the principal
amount of the Halcyon Note shall not exceed $150,000,000. In the event
that the Halcyon Partner Vehicle does not elect to increase the principal
amount of the Halcyon Note or elects to increase the principal amount of
the Halcyon Note by less than the full amount of the Shortfall, then with
respect to the remaining amount of the Shortfall, Halcyon shall issue to
the Halcyon Partner Vehicle a number of Exchangeable Securities (and
pursuant to the Exchange Agreement, AAMAC will issue the same number of
shares of AAMAC Preferred Stock to the Halcyon Partner Vehicle), in each
case, equal to the sum of (x) the quotient of (1) such amount of the
Shortfall attributable to the Conversion Amount or the Closing Adjustment
Shortfall divided by (2) the quotient of the total amount in AAMAC's trust
account as of the time of the Closing divided by the number of shares of
AAMAC Common Stock outstanding (less the number of AAMAC Founders'
Shares), and (y) the quotient of such amount of the Shortfall attributable
to the Expenses Shortfall divided by $10.00. In the event that there are
multiple sources of Shortfall, the Halcyon Partner Vehicle shall have the
right to determine what portion of the Halcyon Note or the issuance of
Exchangeable Securities and AAMAC Preferred Stock shall be allocated among
the Conversion Amount, the Closing Adjustment Shortfall and the Expenses
Shortfall.
(ii) AAMAC and the Halcyon Representative may elect to obtain debt
financing from a third party on terms and conditions reasonably acceptable
to AAMAC and the Halcyon Representative. If AAMAC and the Halcyon
Representative elect to obtain such third-party financing, the principal
amount of the Halcyon Note shall be reduced by, and the Cash Consideration
shall be increased by, the principal amount of such third-party financing.
The aggregate principal amount of the Halcyon Note and
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such third-party financing, if and to the extent actually obtained, shall
not exceed $150,000,000.
(iii) Any Exchangeable Securities issued to the Halcyon Partner
Vehicle pursuant to Section 2.1(d)(i) above, shall have the following
transfer restrictions: (A) 33.33% of the aggregate number of such
Exchangeable Securities shall not be transferable for 60 days following
the Closing Date, (B) 33.33% of the aggregate number of such Exchangeable
Securities shall not be transferable for 120 days following the Closing
Date and (C) the remainder of such Exchangeable Securities shall not be
transferable for 180 days following the Closing Date; provided, however,
that Halcyon shall pay the Halcyon Partner Vehicle an additional amount
computed as if it were interest on the amount of the Shortfall in respect
of which such Exchangeable Securities were issued for the duration of such
lock-up periods at a rate equal to the six month treasury ▇▇▇▇ yield on
the Closing Date, calculated on the basis of a 365-day year, and payable
at the end of each calendar quarter.
(iv) The "Closing Adjustment" shall be equal to the Specified Assets
minus the Specified Liabilities. If the Closing Adjustment is a positive
amount, then the Cash Consideration shall be increased by the Closing
Adjustment. If the Closing Adjustment is a negative amount, then the Cash
Consideration shall be decreased by the Closing Adjustment. Not less than
five Business Days prior to the anticipated Closing Date, the Halcyon
Representative shall provide AAMAC with a preliminary estimated statement
of the Closing Adjustment as of the Closing Date (the "Estimated Closing
Adjustment Statement").
(v) The Cash Consideration shall be decreased by the amount of the
Closing Bonus Accrual.
Section 2.2 Pre-Closing Distributions; Post-Closing Adjustments.
(a) Prior to or contemporaneously with the Closing, the Halcyon Entities
shall distribute to the holders of their Equity Securities all of the cash (and
cash equivalents) of the Halcyon Entities, less $3,000,000 or such lesser amount
as may be agreed by AAMAC and the Halcyon Partner Vehicle prior to the Closing
(the "Operating Working Capital Amount").
(b) As promptly as practicable after the Closing but in any event on or
before the earlier of the first December 31 following the Closing Date and the
six-month anniversary of the Closing Date, Halcyon shall pay to the Halcyon
Partner Vehicle an amount equal to the Operating Working Capital Amount, plus an
additional amount computed as if it were interest on such amount from the
Closing Date to the date of payment, inclusive, at a rate equal to the six month
treasury ▇▇▇▇ yield during such period of time, calculated on the basis of a
365-day year and payable at the end of each calendar quarter.
(c) On and after the Closing Date, Halcyon shall pay to the Halcyon
Partner Vehicle an amount equal to the Pre-Closing Fee Amount to the extent not
distributed by Halcyon or the Halcyon Entities, as applicable, prior to the
Closing. Such payment will be made within two (2) Business Days after payment of
such amounts to Halcyon.
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(d) At Closing, AAMAC shall cancel 2,580,000 shares of AAMAC Common Stock
held by the AAMAC Founders pursuant to the Voting Agreement, AAMAC shall issue
to the AAMAC Founders warrants to purchase their pro rata share of up to
2,580,000 shares of AAMAC Common Stock in the aggregate (the "Founders
Performance Warrants"). Each Founders Performance Warrant shall be in a form
acceptable to each Party, acting reasonably, shall have a term of five years,
shall have an exercise price of $0.0001 per share, shall be exercisable on a
cashless basis at the election of the holder and shall include customary
anti-dilution adjustment provisions with respect to any of the events described
in Section 11(a), (c), or (f) of the Warrant Agreement by and between AAMAC and
Continental Stock Transfer & Trust Company; provided that the adjustment
formulas provided for in each Founders Performance Warrant will be modified so
as to include an adjustment solely for the number of shares for which it is
exercisable and not to include an adjustment to its exercise price. Each
Founders Performance Warrant shall become exercisable with respect to its pro
rata share of 430,000 shares of AAMAC Common Stock on the first date that the
closing price of AAMAC Common Stock equals or exceeds $15.00 per share for any
10 trading days within any 20 trading day period, and shall become exercisable
with respect to its pro rata share of an additional 430,000 shares of AAMAC
Common Stock on each of the respective first dates that the closing price of
AAMAC Common Stock equals or exceeds for any 10 trading days within any 20
trading day period each whole-dollar threshold greater than $15.00 per share, up
to $20.00 per share. Each Founders Performance Warrant will remain exercisable
until 20 Business Days after the date it first became exercisable in accordance
with the preceding sentence, and if it is not exercised within that time, the
right to purchase the shares for which the Founders Performance Warrant was
exercisable during that period shall be permanently terminated.
(e) From and after the Closing Date until the fifth anniversary of the
Closing Date, on the first date that the closing price of AAMAC Common Stock
equals or exceeds $15.00 per share for any 10 trading days within any 20 trading
day period, Halcyon shall issue to the Halcyon Partner Vehicle 4,430,000
Exchangeable Securities (and pursuant to the Exchange Agreement, AAMAC will
issue to the Halcyon Partner Vehicle an equal number of shares of AAMAC
Preferred Stock), and shall issue to the Halcyon Partner Vehicle an additional
4,430,000 Exchangeable Securities (and pursuant to the Exchange Agreement, AAMAC
will issue to the Halcyon Partner Vehicle an equal number of shares of AAMAC
Preferred Stock) on each of the respective first dates that the closing price of
AAMAC Common Stock equals or exceeds for any 10 trading days within any 20
trading day period each whole-dollar threshold greater than $15.00 per share, up
to $20.00 per share, in each case as an adjustment to the purchase price
hereunder. In the event of any stock split, stock dividend, stock combination,
or reverse stock split, the rights of the Halcyon Partner Vehicle under this
Section 2.2(e) shall be subject to customary anti-dilution adjustments to be set
forth on Exhibit C as mutually agreed upon by AAMAC and the Halcyon Partner
Vehicle prior to the Closing Date, which shall include customary anti-dilution
adjustment provisions with respect to any of the events described in Section
11(a), (c) or (f) of the Warrant Agreement by and between AAMAC and Continental
Stock Transfer & Trust Company; provided that the adjustment formulas set forth
on Exhibit C shall in no event be less favorable to the Halcyon Partner Vehicle
than the corresponding rights of the AAMAC Founders under the Founders
Performance Warrants are to the AAMAC Founders.
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(f) On or as promptly as practicable after the December 31 immediately
following the Closing Date, Halcyon shall pay to the Halcyon Partner Vehicle an
amount equal to the excess, if any, of (i) the Closing Bonus Accrual over (ii)
the excess, if any, of (A) the salaries of all Halcyon Entity employees for the
period between the Closing Date and the December 31 immediately following the
Closing Date, inclusive, and bonuses of all Halcyon Entity employees for the
fiscal year in which the Closing Date occurs, over (B) 70% of the incentive and
other non-management fees and carried interest allocations relating to the
period between the Closing Date and the December 31 immediately following the
Closing Date, excluding any Pre-Closing Fee Amounts paid or payable. Such amount
shall be increased by an additional amount computed as if it were interest on
such amount from the Closing Date to the date of payment, inclusive, at a rate
equal to the six month treasury ▇▇▇▇ yield during such period of time,
calculated on the basis of a 365-day year and payable at the end of each
calendar quarter.
Section 2.3 Closing Adjustment Statement.
(a) AAMAC will prepare and deliver to the Halcyon Partner Vehicle a
statement setting forth the calculation of the Closing Adjustment (the "Closing
Adjustment Statement") on or before the 60th day after the Closing Date (the
"Delivery Date"). In connection with the preparation of the Closing Adjustment
Statement, AAMAC will have reasonable access to books, records and relevant
personnel of Halcyon (including temporary office space at Halcyon's offices) for
the purpose of preparing, or observing and participating in the preparation of,
the Closing Adjustment Statement. The Closing Adjustment Statement shall be
prepared in accordance with the same accounting principles, practices,
methodologies and policies used in the preparation of the Halcyon Financial
Statements.
(b) The Closing Adjustment Statement will be deemed to be final, binding
and conclusive for all purposes on the twentieth Business Day after delivery to
the Halcyon Partner Vehicle hereunder unless the Halcyon Partner Vehicle
delivers to AAMAC written notice of the Halcyon Partner Vehicle's disagreement
(a "Notice of Disagreement") prior to such date specifying in reasonable detail
the nature of the Halcyon Partner Vehicle's objections to the Closing Adjustment
Statement. The Halcyon Partner Vehicle hereby waives the right to assert any
objection to the Closing Adjustment Statement that is not asserted in a Notice
of Disagreement delivered to AAMAC within twenty Business Days after the
Delivery Date. If a Notice of Disagreement is delivered to AAMAC within such
twenty Business Days, then the Closing Adjustment Statement (as adjusted,
pursuant to Section 2.3(c) below, if necessary) will be deemed final, binding
and conclusive for all purposes on the earlier of (x) the date the Halcyon
Partner Vehicle and AAMAC resolve in writing all differences they have with
respect to the Closing Adjustment Statement or (y) the date the disputed matters
are resolved in writing by the Unaffiliated Firm. In the event that disputed
matters are resolved by the Unaffiliated Firm (as set forth below in accordance
with the terms hereof), the final Closing Adjustment Statement will consist of
the applicable amounts from the Closing Adjustment Statement (or amounts
otherwise agreed to in writing by the Halcyon Partner Vehicle and AAMAC) as to
items that have not been submitted for resolution to the Unaffiliated Firm, and
the amounts determined by the Unaffiliated Firm as to items that were submitted
for resolution by the Unaffiliated Firm.
(c) During the twenty Business Day period following the delivery of a
Notice of Disagreement, AAMAC and the Halcyon Partner Vehicle will seek in good
faith to resolve any
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differences they may have with respect to matters specified in the Notice of
Disagreement. If, at the end of such twenty Business Day period, AAMAC and the
Halcyon Partner Vehicle have not reached agreement on such matters, AAMAC and
the Halcyon Partner Vehicle will jointly engage a single arbitrator from the
Unaffiliated Firm to resolve the matters specified in the Notice of Disagreement
that remain in dispute with respect to the Closing Adjustment Statement by
arbitration in accordance with the procedures set forth in this Section 2.3(c).
The single arbitrator selected from the Unaffiliated Firm shall not have
performed any work on behalf of AAMAC or the Halcyon Entities nor any of their
respective Affiliates in the previous three years. In connection with such
engagement, AAMAC and the Halcyon Partner Vehicle agree to use commercially
reasonable efforts to cause AAMAC and the Halcyon Partner Vehicle to execute, if
requested by the Unaffiliated Firm, a reasonable engagement letter including
customary indemnities. Promptly after such engagement of the Unaffiliated Firm,
AAMAC or the Halcyon Partner Vehicle will provide the Unaffiliated Firm with a
copy of this Agreement, the Closing Adjustment Statement, and the Notice of
Disagreement. The Unaffiliated Firm will have the authority to request in
writing such additional written submissions from either AAMAC or the Halcyon
Partner Vehicle as it deems appropriate, provided that a copy of any such
submission will be provided to the other Party at the same time as it is
provided to the Unaffiliated Firm. AAMAC and the Halcyon Partner Vehicle will
not make any additional submission to the Unaffiliated Firm except pursuant to
such a written request by the Unaffiliated Firm. AAMAC and the Halcyon Partner
Vehicle will not communicate with the Unaffiliated Firm without providing the
Halcyon Partner Vehicle or AAMAC, as applicable, a reasonable opportunity to
participate in such communication with the Unaffiliated Firm (other than with
respect to written submissions in response to the written request of the
Unaffiliated Firm). The Unaffiliated Firm will have forty-five (45) days to
review the documents provided to it pursuant to this Section 2.3(c). Within such
forty-five (45) day period, the Unaffiliated Firm will furnish simultaneously to
AAMAC and the Halcyon Partner Vehicle its written determination with respect to
each of the adjustments in dispute submitted to it for resolution. The
Unaffiliated Firm will resolve the differences regarding the Closing Adjustment
Statement based solely on the information provided to the Unaffiliated Firm by
AAMAC and the Halcyon Partner Vehicle pursuant to the terms of this Agreement
(and not independent review). The Unaffiliated Firm's authority will be limited
to resolving disputes with respect to whether the Closing Adjustment Statement
was prepared in accordance with Section 2.3 with respect to the individual items
on the Closing Adjustment Statement in dispute (it being understood that the
Unaffiliated Firm will have no authority to make any adjustments to any
financial statements or amounts other than amounts set forth in the Closing
Adjustment Statement that are in dispute). In resolving any disputed item, the
Unaffiliated Firm may not assign a value to such item greater than the greatest
value for such item asserted by AAMAC or the Halcyon Partner Vehicle or less
than the smallest value for such item asserted by AAMAC or the Halcyon Partner
Vehicle. The decision of the Unaffiliated Firm will be, in the absence of
manifest error, for all purposes, conclusive, non appealable, final and binding
upon AAMAC and the Halcyon Partner Vehicle. The fees of the Unaffiliated Firm
will be borne by AAMAC, on the one hand, and the Halcyon Partner Vehicle, on the
other hand, in the same proportion that the dollar amount of disputed items lost
by a party bears to the total dollar amount in dispute resolved by the
Unaffiliated Firm.
(d) If the Closing Adjustment set forth on the Closing Adjustment
Statement exceeds the Closing Adjustment set forth on the Estimated Closing
Adjustment Statement, then AAMAC shall pay to the Halcyon Partner Vehicle such
excess in cash. If the Closing Adjustment set forth
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on the Estimated Closing Adjustment Statement exceeds the Closing Adjustment set
forth on the Closing Adjustment Statement, then the Halcyon Partner Vehicle
shall pay to AAMAC such excess in cash. Any payment pursuant to this Section
2.3(d) shall be made within three Business Days after the finalization of the
Closing Adjustment Statement.
(e) For purposes of this Section 2.3, all actions to be performed by AAMAC
shall be controlled by a majority of the independent directors of the Board of
Directors of AAMAC.
Section 2.4 Closing.
(a) The closing of the purchase and sale of the Purchased Units (the
"Closing") will take place (i) at the offices of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇,
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, no later than the third Business
Day following the satisfaction or waiver of all conditions set forth in Sections
3.1 and 3.2 (other than those conditions that are contemplated to be satisfied
at the Closing), or (ii) at such other place, date and time as the Halcyon
Partner Vehicle and AAMAC may agree.
(b) At the Closing, the Halcyon Representative will deliver to AAMAC the
following:
(i) documentation appropriate to effect a transfer of all
uncertificated Purchased Units, duly executed for transfer by delivery;
and any other documents that are necessary or customary to transfer to
AAMAC good title to all such Purchased Units free and clear of any Liens
other than Permitted Transfer Restrictions;
(ii) an executed copy of the amended and restated Halcyon limited
liability company agreement signed by the Halcyon Partner Vehicle, which
shall be consistent with the terms as set forth on Exhibit D and
acceptable to AAMAC, acting reasonably;
(iii) an executed election under Section 754 of the Code with such
basis adjustment as may be determined pursuant to Section 6.20;
(iv) copies of employment agreements executed by the individuals
listed on Section 3.1(i) of the Halcyon Disclosure Statement, the material
terms of which are set forth on Exhibit E;
(v) copies of the Voting Agreement, Exchange Agreement, and
Shareholders' Agreement executed by the Halcyon Parties, as applicable;
and
(vi) all other instruments, agreements, certificates and documents
expressly required by any other Transaction Document to be delivered by
Halcyon Parties at or prior to the Closing Date.
(c) At the Closing, AAMAC will deliver to the Halcyon Partner Vehicle the
following:
(i) The payments required by Section 2.1(b);
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(ii) copies of the Voting Agreement, Exchange Agreement, and
Shareholders' Agreement executed by AAMAC and/or the AAMAC Founders, as
applicable; and
(iii) all other instruments, agreements, certificates and documents
required to be delivered by AAMAC or any AAMAC Founder at or prior to the
Closing Date pursuant to this Agreement or any other Transaction Document.
Section 2.5 Transfer Taxes. All applicable sales and transfer Taxes due as
a result of the sale of the Purchased Units and filing, recording, registration,
stamp, documentary and other Taxes and fees payable in connection with the
Transaction will be paid by AAMAC, except that Taxes imposed on or measured by
the net income or gains of the Halcyon Partner Vehicle will be the
responsibility of and be paid by the Halcyon Partner Vehicle (or its direct or
indirect owners if it is a pass-through and liability for such Taxes applies to
such owners).
ARTICLE III
CONDITIONS TO CLOSING
Section 3.1 Conditions to Obligations of AAMAC. The obligations of AAMAC
to effect the Transaction are subject to the satisfaction or waiver by AAMAC at
or prior to the Closing Date of each of the following conditions:
(a) Representations and Warranties. The representations and warranties set
forth in Section 4.6(b) shall be true and correct in all respects at and as of
the Closing Date and all other representations and warranties set forth in
Article IV shall be true and correct (disregarding all qualifications or
limitations as to "materiality" or "Halcyon Material Adverse Effect") at and as
of the Closing Date as if made on the Closing Date (except to the extent
expressly made as of an earlier date, in which case as of such date), except
where the failure of such representations and warranties, to be so true and
correct would not have a Halcyon Material Adverse Effect, and the Halcyon
Representative shall have delivered to AAMAC a certificate confirming the
foregoing as of the Closing Date.
(b) Performance of Obligations of Halcyon Parties. Each and all of the
covenants and agreements of the Halcyon Parties to be performed or complied with
pursuant to this Agreement shall have been performed and complied with in all
material respects, and the Halcyon Representative shall have delivered to AAMAC
a certificate confirming the foregoing as of the Closing Date.
(c) Material Adverse Effect. No Halcyon Material Adverse Effect shall have
occurred from and after the date hereof.
(d) Governmental Actions. No Action shall have been instituted by any
Governmental Entity and remain pending which is reasonably likely to make
illegal, or to prohibit, the consummation of the Transaction.
(e) Laws. There shall not following the date hereof have been enacted,
entered, enforced, promulgated or deemed applicable to the Transaction any Law
of the United States, the United Kingdom or the Cayman Islands or any other
action taken by any court or other
9
Governmental Entity in the United States, the United Kingdom or the Cayman
Islands that has resulted, or is reasonably expected to result, directly or
indirectly, in any of the consequences referred to in Section 3.1(d).
(f) Consents. The Halcyon Entities shall have obtained and provided to
AAMAC each approval and consent listed on Section 3.1(f) of the Halcyon
Disclosure Statement.
(g) Regulatory Approvals. (i) All waiting periods (and all extensions
thereof) applicable to the consummation of the Transaction under the HSR Act
shall have terminated or expired, (ii) all antitrust and competition approvals,
consents (other than those specified in (i)) which are required to be obtained
in connection with the Transaction, as set forth in Section 3.1(g) of the
Halcyon Disclosure Statement shall have been received and all such antitrust or
competition notices or filings shall have been made, (iii) if required to be
obtained in connection with the Transaction, (A) the FSA has given its notice of
approval or effective approval subject to the Transaction taking place within
the time frame specified by the FSA or (B) deemed approval has been received by
virtue of section 184(2) of the United Kingdom Financial Services and Markets
▇▇▇ ▇▇▇▇, and (iv) all other approvals or consents of a Governmental Entity
which are required to be obtained in connection with the Transaction shall have
been obtained, except where the failure to obtain such approval or consent would
not have a Halcyon Material Adverse Effect (disregarding for this purpose clause
(x) of the definition thereof).
(h) Requisite Stockholder Approval. The Requisite Stockholder Approval
shall have been obtained for the matters submitted for a vote of the AAMAC
Stockholders as will be set forth in the Proxy Statement.
(i) Additional Agreements. Each of the Additional Agreements shall have
been executed and delivered by each of the parties to such Additional Agreements
other than AAMAC and employment agreements have been executed and delivered by
the individuals listed on Section 3.1(i) of the Halcyon Disclosure Statement
which shall be consistent with the terms set forth on Exhibit E hereto.
Section 3.2 Conditions to Obligations of the Halcyon Parties. The
obligations of the Halcyon Parties to effect the Transaction are subject to the
satisfaction or waiver by the Halcyon Representative at or prior to the Closing
Date of each of the following conditions:
(a) Representations and Warranties. The representations and warranties set
forth in Sections 5.7(a)(ii), 5.11(c), 5.12(d) (with respect to written
Contracts only) and 5.21 shall be true and correct at and as of the Closing Date
as if made on the Closing Date (except to the extent expressly made as of an
earlier date, in which case as of such date), and the representations and
warranties set forth in Article V (other than Sections 5.7(a)(ii), 5.11(c),
5.12(d) (with respect to written Contracts only) and 5.21) shall be true and
correct (disregarding all qualifications or limitations as to "materiality" or
"AAMAC Material Adverse Effect") at and as of the Closing Date as if made on the
Closing Date (except to the extent expressly made as of an earlier date, in
which case as of such date), except where the failure of such representations
and warranties, to be so true and correct would not have either a Halcyon
Material Adverse Effect or AAMAC Material Adverse Effect, and AAMAC shall have
delivered to the Halcyon Representative a
10
certificate signed by an executive officer of AAMAC confirming the foregoing as
of the Closing Date.
(b) Performance of Obligations of AAMAC. Each and all of the covenants and
agreements of AAMAC to be performed or complied with pursuant to this Agreement
on or prior to the Closing Date shall have been performed and complied with in
all material respects, and AAMAC shall have delivered to the Halcyon
Representative a certificate signed by an executive officer of AAMAC confirming
the foregoing as of the Closing Date.
(c) Governmental Actions. No Action shall have been instituted by any
Governmental Entity and remain pending which is reasonably likely to make
illegal, or to prohibit, the consummation of the Transaction.
(d) Laws. There shall not following the date hereof, have been enacted,
entered, enforced, promulgated or deemed applicable to the Transaction any Law
or any other action taken by any court or other Governmental Entity that has
resulted, or could reasonably be expected to result, directly or indirectly, in
any of the consequences referred to in Section 3.2(c).
(e) Regulatory Approvals. (i) All waiting periods (and all extensions
thereof) applicable to the consummation of the Transaction under the HSR Act
shall have terminated or expired, (ii) all antitrust and competition approvals,
consents (other than those specified in (i)) which are required to be obtained
in connection with the Transaction, as set forth in Section 3.1(g) of the
Halcyon Disclosure Statement shall have been received and all such antitrust or
competition notices or filings shall have been made, (iii) if required to be
obtained in connection with the Transaction, (A) the FSA has given its notice of
approval or effective approval subject to the Transaction taking place within
the time frame specified by the FSA or (B) deemed approval has been received by
virtue of section 184(2) of the United Kingdom Financial Services and Markets
▇▇▇ ▇▇▇▇ and (iv) all other approvals or consents of a Governmental Entity which
are required to be obtained in connection with the Transaction shall have been
obtained, except where the failure to obtain such approval or consent would not
have an AAMAC Material Adverse Effect.
(f) Requisite Stockholder Approval. The Requisite Stockholder Approval
shall have been obtained for the matters submitted for a vote of the AAMAC
Stockholders as will be set forth in the Proxy Statement.
(g) Additional Agreements. Each of the Additional Agreements shall have
been executed and delivered by each of the parties to such Additional Agreement
other than the Halcyon Parties and the Halcyon Entities.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES CONCERNING THE HALCYON ENTITIES
Except as set forth in the Halcyon Disclosure Statement (subject to
Section 8.11), the Halcyon Parties, jointly and severally, hereby represent and
warrant, without duplication, to AAMAC as follows:
11
Section 4.1 Organization.
(a) Each of the Halcyon Entities is duly formed, validly existing and in
good standing under the Laws of the jurisdiction where it is organized, as
disclosed in the Halcyon Disclosure Statement. Each of the Halcyon Entities has
all requisite corporate, partnership or other power and authority to own, lease
and operate its assets and properties and to carry on the Business. Each of the
Halcyon Entities is duly qualified to transact business in each jurisdiction in
which the ownership, leasing or holding of its properties or the conduct or
nature of its business makes such qualification necessary, except where the
failure to be so qualified would not have a Halcyon Material Adverse Effect.
True and complete copies of the Organizational Documents of the Halcyon Entities
have previously been delivered or made available to AAMAC.
(b) The Halcyon Entities have no Subsidiaries other than other Halcyon
Entities.
(c) Each of the Halcyon Entities that is required to be registered under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"), is so
registered.
Section 4.2 Authority.
(a) Each of the Halcyon Entities has all requisite corporate, partnership
or other similar power and authority to execute and deliver each Transaction
Document delivered or to be delivered by it and to perform all of its
obligations under the Transaction Documents. The execution, delivery and
performance by each of the Halcyon Entities of each Transaction Document to
which it is a party delivered or to be delivered by it and the consummation of
the transactions contemplated to be performed by it under the Transaction
Documents to which it is a party have been duly authorized by all necessary and
proper corporate, partnership or other action on the part of the Halcyon
Entities and no other corporate, limited liability company, trust or other
proceedings on the part of any of the Halcyon Entities or its stockholders,
members, trustees or other holders of Equity Securities are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
(b) Each Transaction Document to be delivered by any of the Halcyon
Entities will be duly executed and delivered by such Halcyon Entity and, when so
executed and delivered and assuming the valid execution and delivery by the
other parties thereto, will constitute the legal, valid and binding obligation
of such Halcyon Entity, enforceable against such Halcyon Entity in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar Laws relating to or affecting
the enforcement of creditors' rights in general and by general principles of
equity.
Section 4.3 No Breach. None of the execution, delivery or performance by
any of the Halcyon Entities of any Transaction Document or the consummation by
the Halcyon Entities of the Transaction does or will, with or without the giving
of notice or the lapse of time or both, (a) result in the creation of any Lien
upon any of the properties or assets of any of the Halcyon Entities (except for
Permitted Liens) or (b) conflict with, or result in a breach or violation of or
a default under, require a consent under, or give rise to a right of amendment,
termination, cancellation or acceleration of any obligation or to a loss of a
benefit under (i) the Organizational Documents of any of the Halcyon Entities,
(ii) any Halcyon Material Contract or (iii) any Law,
12
license or Permit or other requirement to which the Halcyon Entities or any of
its properties or assets are subject, except for those which would not have a
Halcyon Material Adverse Effect.
Section 4.4 No Brokers. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of any of the Halcyon Entities who is or will be entitled to any fee, commission
or payment from any of the Halcyon Entities in connection with the negotiation,
preparation, execution or delivery of any Transaction Document or the
consummation of the Transaction.
Section 4.5 Governmental Approvals. Other than any approval required
pursuant to the HSR Act, no Consent or Order of, with or to any Governmental
Entity is required to be obtained or made by any of the Halcyon Entities in
connection with the execution, delivery and performance by any of the Halcyon
Entities of any Transaction Document or the consummation of the Transaction,
except for any failure to obtain or make such Consent or Order which would not
have a Halcyon Material Adverse Effect.
Section 4.6 Capitalization.
(a) There are no bonds, debentures, notes or other Indebtedness of any
type whatsoever of the Halcyon Entities having the right to vote (or convertible
into, or exchangeable for, securities having the right to vote) on any matters
on which any holders of Equity Securities of any of the Halcyon Entities may
vote. Except as granted under the Reorganization MOU or the Transaction
Documents, there are no voting agreements with respect to any proxies, any stock
appreciation rights, phantom stock, put rights or other Contracts relating to
any Equity Securities of any of the Halcyon Entities.
(b) Upon consummation of the Reorganization, (i) Halcyon will own,
directly or indirectly, all of the outstanding Equity Securities of the Halcyon
Entities (other than Halcyon), all of which will be duly authorized, validly
issued, fully paid and non-assessable and were not issued in violation of, and
are not subject to, any preemptive rights, and (ii) all of the outstanding
Purchased Units will be owned of record by the Halcyon Partner Vehicle.
(c) Upon consummation of the Transaction, AAMAC will own 49,170,000 Class
A Units of Halcyon free and clear of all Liens, which shall be all of the
outstanding Class A Units of Halcyon, and the Halcyon Partner Vehicle will own
46,924,648 Class B Units of Halcyon, which shall be all of the outstanding Class
B Units of Halcyon, subject to adjustment pursuant to Section 2.1(d).
Section 4.7 Financial Information.
(a) Set forth in the Halcyon Disclosure Statement are the unaudited
combined balance sheets of the Halcyon Entities as of December 31, 2005,
December 31, 2006, and December 31, 2007 and the related unaudited combined
statements of operations for each of the three years comprising the period ended
December 31, 2007 (the "Halcyon Financial Statements"). The Halcyon Financial
Statements have been prepared from the books, accounts and financial records of
the Halcyon Entities and present fairly, in all material respects, in conformity
with GAAP applied on a consistent basis, the combined financial position of the
Halcyon Entities as of the dates set forth therein and the combined results of
their operations for
13
the periods set forth therein; provided, that the foregoing is subject to the
ongoing audit and adjustment of the Halcyon Financial Statements.
(b) The Halcyon Entities have no Liabilities of any kind or character
except for Liabilities (i) incurred in connection with the Reorganization, (ii)
in the amounts set forth or reserved on the December 31, 2007 Halcyon balance
sheet or the notes thereto, including contingent liabilities, (iii) arising
after December 31, 2007 in the ordinary course of business, (iv) incurred under
this Agreement, the other Transaction Documents, or as expressly permitted to be
incurred under this Agreement or the other Transaction Documents, or as
disclosed in this Agreement or the other Transaction Documents or the Halcyon
Disclosure Statement, (v) incurred for Transaction Expenses or (vi) that would
not have a Halcyon Material Adverse Effect.
Section 4.8 Absence of Material Adverse Effect and Certain Events.
(a) Since December 31, 2007 and until the date hereof, there have not been
any events, occurrences, changes, developments or circumstances which would have
a Halcyon Material Adverse Effect.
(b) Except for the Reorganization, the Halcyon Entities have not since
December 31, 2007 and until the date hereof, taken any action of the type
referred to in Section 6.1(b)(v), (vi), (viii), (x), (xi) or (xii).
Section 4.9 Taxes.
(a) Each of the Halcyon Entities has filed all material Tax Returns
required to be filed by it ("Halcyon Tax Returns"). All such Halcyon Tax Returns
were correct and complete in all material respects. All material Halcyon Tax
Returns have been timely filed with the appropriate tax authorities in all
jurisdictions in which such Halcyon Tax Returns are or were required to be filed
or requests for extensions have been timely filed and any such extensions have
been granted and have not expired. The Halcyon Entities have made available to
AAMAC correct and complete copies of all U.S. federal income Tax Returns of the
Halcyon Entities relating to taxable period ending on or after January 1, 2005,
filed through the date of this Agreement.
(b) All material Taxes due and owing by each of the Halcyon Entities
(whether or not shown on any Halcyon Tax Return) have been paid or adequate
reserves therefor have been established on the December 31, 2007 Halcyon Balance
Sheet in accordance with GAAP, subject to the ongoing audit and adjustment.
(c) All material Taxes of the Halcyon Entities required to be paid with
respect to any completed and settled audit, examination or deficiency Action
with any taxing authority have been paid in full.
(d) There is no audit, examination, claim, assessment, levy, deficiency,
administrative or judicial proceeding, lawsuit or refund Action pending or
threatened in writing with respect to any material Taxes of the Halcyon Entities
and no taxing authority has given written notice of the commencement of any
audit, examination or deficiency Action with respect to any such Taxes. The
Halcyon Entities have delivered to AAMAC correct and complete copies of all
material Tax
14
examination reports, closing agreements (as defined below) and statements of Tax
deficiencies assessed against or agreed to by any of the Halcyon Entities
received since December 31, 2004.
(e) There are no outstanding Contracts or waivers extending the statutory
period of limitations applicable to any claim for, or the period for the
collection or assessment of, material Taxes of the Halcyon Entities due for any
taxable period.
(f) None of the Halcyon Entities has received written notice of any claim,
and, to the knowledge of the Halcyon Entities, no claim has ever been made, by
any taxing authority in a jurisdiction where such Halcyon Entity does not file
Halcyon Tax Returns that it is or may be subject to taxation by that
jurisdiction.
(g) No Liens for Taxes exist with respect to any of the assets or
properties of the Halcyon Entities, except for Permitted Liens.
(h) The Halcyon Entities are not liable, nor do the Halcyon Entities have
any potential liability, for the Taxes of another Person (other than another
Halcyon Entity) (i) under any applicable Tax Law, (ii) as a transferee or
successor, or (iii) by Contract, indemnity or otherwise.
(i) The Halcyon Entities are not a party to or bound by any Tax indemnity
agreement, Tax sharing agreement or Tax allocation agreement or similar
agreement, arrangement or practice with respect to material Taxes (including
advance pricing agreement, closing agreement or other agreement relating to
Taxes with any taxing authority) that will be binding on any Halcyon Entity with
respect to any period following the Closing Date. None of the Halcyon Entities
will be required to include any material item of income in, or exclude any
material item of deduction from, taxable income for any taxable period (or
portion thereof) ending after the Closing Date as a result of any (A) change in
method of accounting for a taxable period ending on or prior to the Closing Date
under Section 481(c) of the Code (or any corresponding or similar provision of
state, local or foreign applicable Law) or (B) "closing agreement" as described
in Section 7121 of the Code (or any corresponding or similar provision of state,
local or foreign applicable Law) executed on or prior to the Closing Date.
(j) Each Halcyon Entity is and at all times has been a partnership or
disregarded entity for U.S. federal tax purposes pursuant to Treasury Regulation
ss. 301.7701.
(k) None of Halcyon Entities has requested or is the subject of or bound
by any private letter ruling, technical advise memorandum, closing agreement or
similar ruling, memorandum or agreement with any taxing authority with respect
to any material Taxes, nor is any such request outstanding.
(l) Each of the Halcyon Entities has disclosed on its Tax Returns all
positions taken therein that could give rise to a substantial understatement of
Tax within the meaning of Section 6662 of the Code.
(m) None of the Halcyon Entities has participated in a "listed
transaction," as defined in Treasury Regulation ss. 1.6011-4(b)(2).
15
It is agreed and understood that no representation or warranty is made with
respect to Tax matters in any Section of this Agreement other than this Section
4.9 and Section 4.17.
Section 4.10 AAMAC Proxy Statement. None of the information relating to
the Halcyon Entities supplied by the Halcyon Representative or by any other
Persons acting on behalf of the Halcyon Entities, for inclusion in the Proxy
Statement will, as of the date of its distribution to the AAMAC Stockholders (or
any amendment or supplement thereto) or at the time of the AAMAC Stockholders'
Meeting, contain any statement which, at the time and in light of the
circumstances under which it is made, is false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to make the
statements therein not false or misleading.
Section 4.11 Assets and Properties. Except as would not have a Halcyon
Material Adverse Effect:
(a) Each of the Halcyon Entities has (i) good title to all of its material
assets and properties (whether real, personal or mixed, or tangible or
intangible) and (ii) valid leasehold interests in all of its assets and
properties which it leases, in each case (with respect to both clause (i) and
(ii) above), free and clear of any Liens, other than Permitted Liens.
(b) The Halcyon Entities do not own, and, to the knowledge of the Halcyon
Parties have never owned, any real property (other than as a result of
investments by Halcyon Funds).
(c) The Halcyon Disclosure Statement contains a complete and accurate list
of all material real estate leased, subleased or occupied by any of the Halcyon
Entities pursuant to a lease (the "Halcyon Leased Premises"). The Halcyon
Entities enjoy peaceful and undisturbed possession of all Halcyon Leased
Premises.
(d) All of the tangible assets and properties owned or leased by the
Halcyon Entities are adequately maintained and are in good operating condition
and repair and free from any material defects, reasonable wear and tear
excepted.
Section 4.12 Contracts.
(a) The Halcyon Disclosure Statement lists all of the Halcyon Material
Contracts.
(b) Each of the Halcyon Entities (and, to the knowledge of the Halcyon
Entities, each of the other party or parties thereto), has performed all
obligations required to be performed by it under each Halcyon Material Contract,
except as would not be have a Halcyon Material Adverse Effect. No event has
occurred or circumstance exists with respect to any of the Halcyon Entities or,
to the knowledge of the Halcyon Entities, with respect to any other Person that
(with or without lapse of time or the giving of notice or both) does or may
contravene, conflict with or result in a violation or breach of or give any of
the Halcyon Entities or any other Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity of, or to cancel,
terminate or modify, any Halcyon Material Contract, except in each case as would
not have a Halcyon Material Adverse Effect. To the knowledge of the Halcyon
Entities, no party to any Halcyon Material Contract has repudiated any material
provision thereof or terminated any Halcyon Material Contract. All Halcyon
Material Contracts are valid and binding on the
16
Halcyon Entities and, to the knowledge of the Halcyon Entities, the other
parties thereto, and are in full force and effect. The Halcyon Entities have
made available (but not necessarily provided) to AAMAC the Halcyon Material
Contracts, and the copies of the Halcyon Material Contracts provided to AAMAC
are true, accurate and complete.
Section 4.13 Litigation. As of the date hereof (i) no judgment, ruling,
order, writ, decree, stipulation, injunction or determination by or with any
arbitrator, court or other Governmental Entity to which any of the Halcyon
Entities is party or by which any of the Halcyon Entities or any assets of any
thereof is bound, and which relates to or affects the Halcyon Entities, the
assets, properties, Liabilities or employees of the Halcyon Entities or the
Business is in effect and (ii) there is no Action pending or, to the knowledge
of the Halcyon Entities, threatened against any of the Halcyon Entities or the
assets or properties of the Halcyon Entities that, in the case of (i) or (ii),
has had a Halcyon Material Adverse Effect.
Section 4.14 Environmental Matters. Except as would not have a Halcyon
Material Adverse Effect, the Halcyon Entities do not have any Liability under
any applicable Law existing and in effect on the date hereof relating to
pollution or protection of the environment (an "Environmental Law") or under any
Contract with respect to or as a result of the presence, discharge, generation,
treatment, storage, handling, removal, disposal, transportation or release of
any substance defined as hazardous, toxic or a pollutant under any Environmental
Law ("Hazardous Materials").
Section 4.15 Compliance with Applicable Law.
(a) Except as would not have a Halcyon Material Adverse Effect, (i) each
of the Halcyon Entities is in compliance and has complied at all times within
the immediately preceding two years with all Laws applicable to the Halcyon
Entities and the Business, (ii) no claims or complaints from any Governmental
Entities or other Persons have been asserted or received by the Halcyon Entities
within the past three years related to or affecting the Halcyon Entities or the
Business and, to the knowledge of the Halcyon Entities, no claims or complaints
are threatened, alleging that the Halcyon Entities are in violation of any Laws
or Permits applicable to the Halcyon Entities or the Business and (iii) to the
knowledge of the Halcyon Entities, no investigation, inquiry, or review by any
Governmental Entity with respect to the Halcyon Entities or the Business is
pending or threatened.
Section 4.16 Permits. Except as would not have a Halcyon Material Adverse
Effect. each of the Halcyon Entities has all the Permits (the "Halcyon Permits")
that are necessary for the Halcyon Entities to operate the Business in
compliance with all applicable Laws and the Halcyon Entities have complied in
all material respects with all of the terms and requirements of the Halcyon
Permits.
Section 4.17 Employee Matters.
(a) None of the Halcyon Entities is a party to any Contract regarding
collective bargaining or other Contract with or to any labor union or
association representing any employee of the Halcyon Entities (other than any
industry-wide or statutorily mandated agreement in non-U.S. jurisdictions), nor
does any labor union or collective bargaining agent represent any
17
employee of the Halcyon Entities. To the knowledge of the Halcyon Entities, no
Contract regarding collective bargaining has been requested by, or is under
discussion between management of the Halcyon Entities (or any management group
or association of which the Halcyon Entities is a member or otherwise a
participant) and any group of employees of the Halcyon Entities, nor are there
any representation proceedings or petitions seeking a representation proceeding
presently pending against the Halcyon Entities with any labor relations
tribunal, nor are there any other current activities to organize any employees
of the Halcyon Entities into a collective bargaining unit. There are no unfair
labor practice charges or complaints pending or, to the knowledge of the Halcyon
Entities, threatened against the Halcyon Entities that would have a Halcyon
Material Adverse Effect. During the past three years there has not been any
labor strike, slow-down, work stoppage or arbitration involving the Halcyon
Entities, and no such labor strike, slow-down, work stoppage or arbitration is
now pending or, to the knowledge of the Halcyon Entities, threatened against the
Halcyon Entities. None of the Halcyon Entities has incurred any liability or
obligation under the Worker Adjustment and Retraining Notification Act or any
similar state or local Laws within the last six months which remains
unsatisfied.
(b) The Halcyon Disclosure Statement sets forth a complete and accurate
list of each pension, retirement, savings, money purchase, profit sharing,
deferred compensation, medical, vision, dental, hospitalization, prescription
drug and other material health plan, cafeteria, flexible benefits, short-term
and long-term disability, accident and life insurance plan, bonus, stock option,
stock purchase, stock appreciation, phantom stock, incentive and special
compensation plan and each other employee or material fringe benefit plan,
program or Contract to which any of the Halcyon Entities contributes or is
required to contribute or has any liability, or which any of the Halcyon
Entities sponsors, maintains or administers for the benefit of any current or
former directors, officers, consultants or employees of the Halcyon Entities
("Halcyon Plans"), in each case only to the extent any of the Halcyon Entities
(x) will continue the Halcyon Plan after the Closing or (y) have any Liability
under any Halcyon Plan after the Closing. The Halcyon Entities have made
available to AAMAC with respect to each Halcyon Plan that is subject to the Laws
of the United States ("Halcyon U.S. Plans"), a true, correct and complete copy
(or, to the extent no such copy exists or the Halcyon Plan is not in writing, an
accurate written description) of such Halcyon U.S. Plan and all amendments
thereto and, to the extent applicable: (i) any related trust agreement or other
funding instrument and all other material contracts currently in effect with
respect to such Halcyon Plan (including, without limitation, all administrative
agreements, group insurance contracts and group annuity contracts); (ii) the
most recent IRS determination letter; (iii) the most recent summary plan
description, summary of material modifications and any other written
communication (or a written description of any oral communications) by any
Halcyon Entity to its employees concerning the extent of the benefits provided
under a Halcyon Plan; (iv) the most recent (A) Form 5500 and attached schedules,
and (B) audited financial statements; and (v) for the last year, all material
correspondence with the IRS, the United States Department of Labor, the Pension
Benefit Guaranty Corporation or the SEC regarding the operation or the
administration of any Halcyon Plan.
(c) None of the Halcyon Plans is subject to Title IV of ERISA or Section
412 of the Code and neither the Halcyon Entities nor any ERISA Affiliate has,
during any time in the six-year period preceding the Closing Date, contributed
to, sponsored, maintained or administered
18
any "employee pension benefit plan" within the meaning of Section 3(2) of ERISA
that is or was subject to Title IV of ERISA or Section 412 of the Code.
(d) None of the Halcyon Entities or any Affiliate is required, or has
during any time in the six-year period preceding the Closing Date been required,
to contribute to or has incurred any withdrawal liability in respect of any
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA).
(e) Each Halcyon U.S. Plan (and each related trust, insurance contract or
fund) is, and has been administered and operated, in material compliance with
its terms and with all applicable Laws. Each Halcyon Plan that is intended to be
qualified within the meaning of Section 401(a) of the Code is so qualified and
has received a favorable determination letter from the IRS to the effect that
the Halcyon Plan satisfies the requirements of Section 401(a) of the Code and
that its related trust is exempt from taxation under Section 501(a) of the Code
and, to the knowledge of the Halcyon Entities, there are no facts or
circumstances that could reasonably be expected to cause the loss of such
qualification.
(f) Except as would not have a Halcyon Material Adverse Effect, all
contributions (including all employer contributions and employee salary
reduction contributions) or premium payments required to have been made under
the terms of any Halcyon U.S. Plan have been timely made or reflected on the
applicable Halcyon Entity's financial statements in accordance with GAAP,
subject to the ongoing audit and adjustment.
(g) The Halcyon Entities do not have any obligation to provide or make
available post termination health benefits to any current or former officer,
director, partner or employee (or their respective beneficiaries) of the Halcyon
Entities, except as may be required under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, and at the sole expense of such
individual.
(h) Except as would not have a Halcyon Material Adverse Effect, (i) there
are no pending or, to the knowledge of the Halcyon Entities, anticipated or
threatened claims by or on behalf of any of the Halcyon U.S. Plans, by any
employee or beneficiary covered under any such Halcyon U.S. Plan, or otherwise
involving any such Halcyon U.S. Plan (other than ordinary course claims for
benefits), (ii) there are no pending or, to the knowledge of the Halcyon
Entities, threatened audits or investigations by any governmental body,
commission or agency involving any Halcyon U.S. Plan, none of the Halcyon
Entities nor, to the knowledge of the Halcyon Entities, any other "party in
interest" or "disqualified person" with respect to any Halcyon U.S. Plan has
engaged in a non-exempt "prohibited transaction" within the meaning of Section
406 of ERISA or Section 4975 of the Code involving such Halcyon U.S. Plan which,
individually or in the aggregate, could reasonably be expected to subject the
Halcyon Entities to a tax or penalty imposed by Section 4975 of the Code or
Section 501, 502 or 510 of ERISA and (iii) to the knowledge of the Halcyon
Entities, no fiduciary (with respect to whom any of the Halcyon Entities has an
obligation to indemnify) has any liability for breach of fiduciary duty or any
other failure to act or comply with the requirements of ERISA, the Code or any
other applicable Laws in connection with the administration or investment of the
assets of any Halcyon U.S. Plan.
19
(i) Each Halcyon U.S. Plan that is a "nonqualified deferred compensation
plan" within the meaning of Section 409A(d)(1) of the Code and any award
thereunder, in each case that is subject to Section 409A of the Code, has been
operated in compliance in all material respects with Section 409A of the Code
since January 1, 2005, based upon a good faith, reasonable interpretation of (i)
Section 409A of the Code and (ii)(A) the final regulations issued thereunder or
(B) Internal Revenue Service Notice 2005-1.
(j) Neither the execution and delivery of this Agreement nor the
consummation of the Transaction will (either alone or in combination with
another event) (i) result in any payment becoming due, or increase the amount of
any compensation due, to any current or former partner, officer, director,
employee, or consultant of the Halcyon Entities; (ii) increase any benefits
otherwise payable under any Halcyon U.S. Plan; or (iii) result in the
acceleration of the time of payment or vesting of any such compensation or
benefits.
(k) With respect to each Halcyon Plan that is not a Halcyon U.S. Plan
(each, a "Foreign Plan"), except as would not have a Halcyon Material Adverse
Effect: (i) each Foreign Plan is in compliance in all material respects with the
applicable provisions of Law and regulations regarding employee benefits,
mandatory contributions and retirement plans of each jurisdiction in which each
such Foreign Plan is maintained, to the extent those Laws are applicable to such
Foreign Plan; (ii) each Foreign Plan has been administered at all times and in
all material respects in accordance with its terms; (iii) there are no pending
investigations by any Governmental Entity involving any Foreign Plan, and no
pending claims (except for claims for benefits payable in the normal operation
of the Foreign Plans), suits or proceedings against any Foreign Plan or
asserting any rights or claims to benefits under any Foreign Plan; (iv) the
transactions contemplated by this Agreement, by themselves or in conjunction
with any other transactions, will not create or otherwise result in any material
liability, accelerated payment or any enhanced benefits with respect to any
Foreign Plan; and (v) all liabilities with respect to each Foreign Plan have
been funded in accordance with the terms of such Foreign Plan and have been
properly reflected in the financial statements of the applicable Halcyon Entity.
Section 4.18 Insurance.
(a) Except as would not have a Halcyon Material Adverse Effect, the
insurance policies and surety bonds which the Halcyon Entities maintain with
respect to their assets, Liabilities, employees, officers or directors or the
Business ("Halcyon Insurance Policies"): (i) are in full force and effect and
will not lapse or be subject to suspension, modification, revocation,
cancellation, termination or nonrenewal by reason of the execution, delivery or
performance of any Transaction Document or consummation of the Transaction and
(ii) are sufficient for compliance with all requirements of Law and Contracts of
the Halcyon Entities. Except as would not have a Halcyon Material Adverse
Effect, the Halcyon Entities are current in all premiums or other payments due
under each Halcyon Insurance Policy and have otherwise performed in all material
respects all of their respective obligations thereunder.
(b) The Halcyon Entities have not received during the past three years
from any insurance carrier with which it has carried any material insurance (i)
any refusal of coverage or notice of material limitation of coverage or any
notice that a defense will be afforded with reservation of rights in respect of
claims that are or would be reasonably be expected to be
20
material to the Halcyon Entities or (ii) any notice of cancellation or any
notice that any insurance policy is no longer in full force or effect or will
not be renewed or that the issuer of any Halcyon Insurance Policy is not willing
or able to perform its obligations thereunder.
Section 4.19 Transactions with Affiliates. Except (i) for transactions and
arrangements with Halcyon Funds, (ii) as contemplated by the Transaction
Documents, including the Halcyon Note, (iii) in connection with the
Reorganization, or (iv) agreements related to employment with the Halcyon
Entities, no director, officer or employee of the Halcyon Entities or Affiliate
of the Halcyon Entities (other than another of the Halcyon Entities) has any
material interest in any Halcyon Material Contract, material tangible asset or
material Business Intellectual Property (other than through such Person's
partnership or membership interest) that is used by the Halcyon Entities in the
conduct of the Business as it has been conducted prior to the Closing Date
(including historical performance records and/or results in the Halcyon
Entities' data bases) or Affiliate of any director, officer or employee of the
Halcyon Entities has entered into any agreement whereby such Person owes any
material Indebtedness to or is owed any material Indebtedness from any of the
Halcyon Entities, other than employment relationships and compensation,
benefits, repayment of travel, entertainment and other advances made in the
ordinary course of business.
Section 4.20 Halcyon Funds.
(a) All "side letters" or similar agreements between any Halcyon Entity
and any of its clients (including for this purpose any investors in any Halcyon
Funds) that give any such client (i) the benefit of terms relating to liquidity,
transparency, or fees that are more favorable than those specified in the
applicable investment management agreement (in the case of any Managed Accounts)
or the applicable offering memorandum, partnership agreement, or other
Organizational Documents (in the case of any Halcyon Funds) or (ii) with respect
to other clients or investors, "most favored nations" treatment, have been
provided to AAMAC.
(b) Except as would not have a Halcyon Material Adverse Effect:
(i) Each of the Halcyon Entities complies, and has complied at all
times within the immediately preceding two years, with all management
agreements and investment management agreements, or similar agreements to
which it is or has been a party (each an, "IMA") and all Halcyon Fund
Organizational Documents, offering memoranda and other offering documents
to which it is or has been a party or which relates or has related to it
and has no outstanding liability in respect of any failure to comply with
any such IMA or Halcyon Fund Organizational Documents.
(ii) Each Halcyon Fund is being, and has been at all times within
the immediately preceding two years, operated, managed, marketed and
distributed in accordance with the terms of appointment of the relevant
Halcyon Entity, the relevant Halcyon Fund documentation and with all
relevant Laws, including (without limitation) the laws of the jurisdiction
in which the Halcyon Fund is marketed.
(iii) Each Halcyon Fund has marketing literature that was when
issued and, if still current, remains correct and not misleading and
compliant with all applicable Laws.
21
(iv) Each Halcyon Fund has, at all relevant times, been validly
existing in the jurisdiction in which it purports to be organized or
formed, and all necessary notifications to and registrations with local
regulatory and other bodies in the jurisdiction of formation and any
jurisdiction at or from which it is managed or controlled have been made
to permit such Halcyon Fund to carry out such activities as are carried
out by it and all necessary licenses in such jurisdictions have been
obtained in relation to it.
(v) Section 4.20(b)(v) of the Halcyon Disclosure Statement
accurately reflects the assets under management relating to each Halcyon
Fund as of the date indicated thereon and annual returns with respect to
each during the period indicated thereon.
(c) Each Managed Account, to the extent managed solely by a Halcyon
Entity, is being, and has been at all times within the immediately preceding two
years (except as would not have a Halcyon Material Adverse Effect), managed in
accordance with the terms of appointment of the relevant Halcyon Entity, the
relevant Managed Account documentation and with all relevant Laws, including
(without limitation) the laws of the jurisdiction in which the Managed Account
is marketed.
Section 4.21 Business Intellectual Property. Except as would not have a
Halcyon Material Adverse Effect:
(a) Each of the Halcyon Entities owns or has a valid license or right to
use all Business Intellectual Property which it uses in the ordinary course of
business.
(b) To the knowledge of the Halcyon Entities, the Business Intellectual
Property is valid, enforceable and subsisting and nothing has been done or
omitted to be done which may cause any of it to cease to be so.
(c) To the knowledge of the Halcyon Entities, no activities or services or
processes of any of the Halcyon Entities infringe or have infringed any
intellectual property of any third party.
(d) One of the Halcyon Entities is licensed or otherwise has the legal
right to use all computer programs owned by a third party which are used by any
Halcyon Entity in the ordinary course of business ("Developed Software").
(e) One of the Halcyon Entities owns or has the legal right to use all
computer programs designed, written, developed or configured by, on behalf of,
or for the use of, the Halcyon Entities which are used by it or another of the
Halcyon Entities in the ordinary course of business, except for any Developed
Software.
(f) One of the Halcyon Entities owns or otherwise has the legal right to
use all information technology, telecommunications, network and peripheral
equipment used by the Halcyon Entities.
Section 4.22 Sufficiency of Assets. The business and operations of the
Halcyon Entities, taken together, constitute substantially all of the business
reflected on the unaudited combined balance sheet of the Halcyon Entities as of
December 31, 2007 and the related
22
unaudited combined statements of operations for the year ended December 31, 2007
(subject to changes to such business since December 31, 2007).
Section 4.23 No Additional Representations. The Halcyon Parties
acknowledge that neither AAMAC, its officers, directors or stockholders, nor any
Person has made any representation or warranty, express or implied, of any kind,
including without limitation any representation or warranty as to the accuracy
or completeness of any information regarding AAMAC furnished or made available
to the Halcyon Parties or the Halcyon Entities and any of its representatives,
in each case except as expressly set forth in Article V (as modified by the
AAMAC Disclosure Statement).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF AAMAC
Except as set forth in the AAMAC Disclosure Statement (subject to Section
8.11), AAMAC represents and warrants to the Halcyon Parties as follows:
Section 5.1 Organization.
(a) AAMAC is a corporation duly incorporated, validly existing and in good
standing under the Laws of the State of Delaware. AAMAC has all requisite
corporate or other power and authority to own, lease and operate its assets and
properties and to carry on its business as presently conducted and as it will be
conducted through the Closing Date. AAMAC is duly qualified to transact business
in each jurisdiction in which the ownership, leasing or holding of its
properties or the conduct or nature of its business makes such qualification
necessary, except where the failure to be so qualified would not have an AAMAC
Material Adverse Effect. AAMAC is not, and has not been, in violation of any of
the provisions of its Organizational Documents. The Transaction is a "Business
Combination" within the meaning of AAMAC's Organizational Documents and there is
no obligation under the AAMAC's Organizational Documents that AAMAC liquidate or
dissolve prior to July 31, 2009 as a result of AAMAC's execution and delivery of
this Agreement.
(b) AAMAC does not (x) have any Subsidiaries or (y) own beneficially or
otherwise, directly or indirectly, any Equity Securities or ownership interest
in, or have any obligation to form or participate in, any other Person or (z)
have any Contract to purchase any such interest, and AAMAC has not agreed and is
not obligated to make nor is bound by any Contract or undertaking of any nature
under which it may become obligated to make any future Investment in any other
Person other than this Agreement.
Section 5.2 Authority. AAMAC has the corporate power, authority and legal
right to execute and deliver each Transaction Document delivered or to be
delivered by it and to perform all of its obligations hereunder and thereunder.
The execution and delivery of this Agreement has been duly and validly
authorized by all necessary corporate action on the part of AAMAC and no further
corporate proceedings on the part of AAMAC are necessary to authorize this
Agreement or consummate the transactions contemplated hereby other than the
Requisite Stockholder Approval.
23
Section 5.3 Binding Obligation. This Agreement has been duly authorized,
executed and delivered by AAMAC and assuming the valid execution and delivery by
the other parties thereto constitutes the legal, valid and binding obligation of
AAMAC, enforceable against AAMAC in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar Laws relating to or affecting the enforcement of
creditors' rights in general and by general principles of equity. Each other
Transaction Document delivered or to be delivered by AAMAC will be duly executed
and delivered by AAMAC and, when so executed and delivered, assuming the valid
execution and delivery by the other parties thereto, will constitute the legal,
valid and binding obligation of AAMAC, enforceable against AAMAC in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar Laws relating to or affecting
the enforcement of creditors' rights in general and by general principles of
equity.
Section 5.4 No Breach. None of the execution, delivery or performance by
AAMAC of any Transaction Document delivered or to be delivered by it or the
consummation of the Transaction does or will, with or without the giving of
notice or the lapse of time or both (a) result in the creation of any Lien upon
any of the properties or assets of AAMAC (except for Permitted Liens), or (b)
conflict with, or result in a breach or violation of or a default under, or give
rise to a right of amendment, termination, cancellation or acceleration of any
obligation or to a loss of a benefit under (i) any Organizational Documents of
AAMAC, (ii) any AAMAC Contract or (iii) assuming compliance with the matters
referred to in Section 5.6 of the AAMAC Disclosure Statement, any Law, license,
Permit or other requirement to which AAMAC's properties or assets are subject,
except, in each case, which would not have an AAMAC Material Adverse Effect.
Section 5.5 No Brokers. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of AAMAC who is or will be entitled to any fee, commission or payment from AAMAC
in connection with the negotiation, preparation, execution or delivery of any
Transaction Document or the consummation of the Transaction.
Section 5.6 Governmental Approvals. Except as would not have an AAMAC
Material Adverse Effect, any approval required pursuant to the HSR Act or
expressly contemplated by this Agreement, no Consent or Order of, with or to any
Governmental Entity is required to be obtained or made by or with respect to
AAMAC in connection with the execution, delivery and performance by AAMAC of any
Transaction Document or the consummation by AAMAC of the Transaction.
Section 5.7 Capitalization.
(a) The AAMAC Disclosure Statement sets forth (i) the authorized Equity
Securities of AAMAC, (ii) the number of Equity Securities of AAMAC that are
issued and outstanding, (iii) the number of Equity Securities held in treasury,
and (iv) the number of Equity Securities of AAMAC that are reserved for
issuance.
24
(b) No shares of capital stock or other securities of AAMAC (other than
the AAMAC Common Stock and the AAMAC Warrants) are issued, reserved for issuance
or outstanding. All of the outstanding shares of AAMAC Common Stock are duly
authorized, validly issued, fully paid and non-assessable and were not issued in
violation of, and are not subject to, any preemptive rights. There are no bonds,
debentures, notes or other Indebtedness of any type whatsoever of AAMAC having
the right to vote (or convertible into, or exchangeable for, securities having
the right to vote) on any matters on which any stockholders of AAMAC may vote.
Except as described in the AAMAC SEC Reports filed prior to the date hereof, the
AAMAC Warrants, the rights granted to the Halcyon Partner Vehicle under this
Agreement and pursuant to the Transaction Documents, there are no outstanding
options, warrants, calls, demands, stock appreciation rights, Contracts or other
rights of any nature to purchase, obtain or acquire from AAMAC, or otherwise
relating to, or any outstanding securities or obligations convertible into or
exchangeable for, or any voting agreements with respect to, any shares of
capital stock of AAMAC or any other securities of AAMAC and, other than as
described in the AAMAC SEC Reports filed prior to the date hereof, AAMAC (and
none of its Affiliates) is obligated, pursuant to any securities, options,
warrants, calls, demands, Contracts or other rights of any nature or otherwise,
now or in the future, contingently or otherwise, to issue, deliver, sell,
purchase or redeem any capital stock of AAMAC, any other securities of AAMAC or
any interest in or assets of AAMAC to or from any Person or to issue, deliver,
sell, purchase or redeem any stock appreciation rights or other Contracts
relating to any capital stock or other securities of AAMAC to or from any
Person.
(c) AAMAC Common Stock is quoted on the American Stock Exchange. There is
no Action or proceeding pending or, to AAMAC's knowledge, threatened against
AAMAC by the American Stock Exchange with respect to any intention by such
entity to prohibit or terminate the quotation of such securities thereon.
(d) At the Closing, the AAMAC Preferred Stock to be issued pursuant to
this Agreement will be validly issued, fully paid, non-assessable, free and
clear of all Liens and not issued in violation of or subject to any preemptive
right. Upon delivery of the AAMAC Preferred Stock pursuant to this Agreement,
the Halcyon Partner Vehicle will have good title to such AAMAC Preferred Stock.
(e) All of the outstanding Equity Securities of AAMAC have been issued in
compliance in all material respects with all requirements of Laws and Contracts
applicable to AAMAC and the Equity Securities of AAMAC.
(f) Except as disclosed in the AAMAC SEC Reports filed prior to the date
hereof or as contemplated by the Transaction Documents, there are no
registration rights, and there is no voting trust, proxy, rights plan,
anti-takeover plan or other Contracts or understandings to which AAMAC is a
party or by which AAMAC is bound with respect to any Equity Security of AAMAC.
(g) Except as disclosed in AAMAC SEC Reports filed prior to the date of
this Agreement, as a result of the consummation of the Transaction, no shares of
capital stock, warrants, options or other securities of AAMAC are issuable and
no rights in connection with
25
any shares, warrants, rights, options or other securities of AAMAC accelerate or
otherwise become triggered (whether as to vesting, exercisability,
convertibility or otherwise).
Section 5.8 Financial Information.
(a) Set forth in the AAMAC Disclosure Statement are (i) the audited
balance sheet of AAMAC as of August 7, 2007 and the related audited statements
of operations, stockholders' equity and cash flows for the period ended August
7, 2007 (the "AAMAC Audited Financial Statements") and (ii) the unaudited
balance sheet of AAMAC as of December 31, 2007 (the "December 31, 2007 AAMAC
Balance Sheet") and the related statements of operations, stockholder' equity
and cash flows for the three month period ended December 31, 2007 (the "AAMAC
Unaudited Financial Statements" and collectively, with the AAMAC Audited
Financial Statements and the notes to each of them are the "AAMAC Financial
Statements"). The AAMAC Financial Statements have been prepared from and in
accordance with the books, accounts and financial records of AAMAC (which
accurately and consistently reflect all material transactions to which AAMAC was
party to during the periods set forth) and present fairly, in all material
respects, in conformity with GAAP applied on a consistent basis, the financial
position of AAMAC as of the dates set forth therein and their results of
operations and cash flows for the periods set forth therein; provided, that the
foregoing is subject to the ongoing audit and adjustment of the December 31,
2007 AAMAC Balance Sheet. AAMAC has established and maintains disclosure
controls and procedures and internal controls over financial reporting (as such
terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under
the Exchange Act) as required in all material respects by Rule 13a-15 under the
Exchange Act.
(b) AAMAC has no Liabilities of any kind or character, except for (i)
Liabilities in the amounts set forth or reserved against on the December 31,
2007 AAMAC Balance Sheet or the notes thereto, including contingent liabilities,
(ii) Liabilities arising in the ordinary course of business (taking into account
that AAMAC is a special-purpose acquisition company) or (iii) Transaction
Expenses.
(c) AAMAC does not now conduct and has never conducted any business or
operations and has not engaged in any other material transaction other than
valuation and pursuit of transactions such as the Transaction, the Transaction
and as set forth in AAMAC SEC Reports filed prior to the date of this Agreement.
Section 5.9 Absence of Material Adverse Effect and Certain Events.
(a) Since December 31, 2007, and until the date hereof, there have not
been any events, occurrences, changes, developments or circumstances, which have
had an AAMAC Material Adverse Effect.
(b) From and after December 31, 2007, AAMAC has not conducted any
operations or business.
(c) AAMAC has not since December 31, 2007 and until the date hereof, taken
any action of the type referred to in Section 6.1(c).
26
Section 5.10 Taxes.
(a) AAMAC has filed all material Tax Returns required to be filed by it
("AAMAC Tax Returns"). All such AAMAC Tax Returns were correct and complete in
all material respects. All material AAMAC Tax Returns have been timely filed
with the appropriate tax authorities in all jurisdictions in which such AAMAC
Tax Returns are or were required to be filed or requests for extensions have
been timely filed and any such extensions have been granted and have not
expired.
(b) All material Taxes due and owing by AAMAC have been paid or adequate
reserves therefor have been established on the December 31, 2007 AAMAC Balance
Sheet in accordance with GAAP.
(c) All material Taxes of AAMAC required to be paid with respect to any
completed and settled audit, examination or deficiency Action with any taxing
authority have been paid in full.
(d) There is no audit, examination, claim, assessment, levy, deficiency,
administrative or judicial proceeding, lawsuit or refund Action pending or
threatened in writing with respect to any material Taxes of AAMAC and no taxing
authority has given written notice of the commencement of any audit, examination
or deficiency Action with respect to any such Taxes. AAMAC has delivered to the
Halcyon Representative correct and complete copies of all material Tax
examination reports, closing agreements and statements of Tax deficiencies
assessed against or agreed to by AAMAC filed or received since December 31,
2006.
(e) There are no outstanding Contracts or waivers extending the statutory
period of limitations applicable to any claim for, or the period for the
collection or assessment of, material Taxes of AAMAC due for any taxable period.
(f) AAMAC has not received written notice of any claim, and, to the
knowledge of AAMAC, no claim has ever been made, by any taxing authority in a
jurisdiction where AAMAC does not file AAMAC Tax Returns that AAMAC is or may be
subject to taxation by that jurisdiction.
(g) No Liens for Taxes exist with respect to any of the assets or
properties of AAMAC, except for Permitted Liens.
(h) AAMAC has never made an election to be classified as an S Corporation
for federal income tax purposes.
(i) AAMAC is not liable, nor does AAMAC have any potential liability, for
the Taxes of another Person (i) under any applicable Tax Law, (ii) as a
transferee or successor, or (iii) by Contract, indemnity or otherwise.
(j) AAMAC is not a party to or bound by any Tax indemnity agreement, Tax
sharing agreement or Tax allocation agreement.
27
(k) AAMAC is not a party to any Contract, plan, understanding or other
arrangement which, individually or collectively with respect to any Person,
could give rise to the payment of any amount that would not be deductible by
AAMAC by reason of Section 280G of the Code (or any corresponding provision of
U.S. or non-U.S. federal, state and local Tax Law) as a result of the
Transaction.
(l) AAMAC has not requested, nor is the subject of or bound by, any
private letter ruling, technical advise memorandum, closing agreement or similar
ruling, memorandum or agreement with any taxing authority with respect to any
material Taxes, nor is any such request outstanding.
(m) AAMAC has disclosed on its Tax Returns all positions taken therein
that could give rise to a substantial understatement of Tax within the meaning
of Section 6662 of the Code.
(n) AAMAC has not participated in a "listed transaction," as defined in
Treasury Regulation ss. 1.6011-4(b)(2).
For the avoidance of doubt, it is agreed and understood that no
representation or warranty is made with respect to Tax matters in any Section of
this Agreement other than this Section 5.10 and Section 5.17.
Section 5.11 Assets and Properties.
(a) AAMAC has (i) good title to all of its material assets and properties
(whether real, personal or mixed, or tangible or intangible) (including all
assets and properties recorded on the December 31, 2007 AAMAC Balance Sheet,
other than assets and properties disposed of in the ordinary course of business
since December 31, 2007) and (ii) valid leasehold interests in all of its assets
and properties which it leases, in each case (with respect to both clauses (i)
and (ii) above), free and clear of any Liens, other than Permitted Liens.
(b) AAMAC does not own or lease nor has it ever owned or leased any real
property.
(c) As of the date hereof, AAMAC has $404,015,392, and as of the Closing
Date, AAMAC will have no less than $403,000,000 (including any amounts payable
with respect to the Conversion Amount and the Deferred Underwriting Fees),
invested in United States "government securities" within the meaning of Section
2(a)(16) of the Investment Company Act of 1940 having a maturity of 180 days or
less or in money market funds meeting certain conditions under Rule 2a-7
promulgated under the Investment Company Act of 1940. Immediately following the
consummation of the Transaction and notice thereof to the trustee of the Trust
Account in accordance with the terms of the Trust Agreement, the Trust Account
will terminate and the trustee shall thereupon release as promptly as
practicable (i) the Conversion Amount, (ii) the Deferred Underwriting Fees and
(iii) the remaining funds in the Trust Account to AAMAC in accordance with the
terms of the Trust Agreement. The amount of Deferred Underwriting Fees is
$13,455,000.
(d) AAMAC has no Indebtedness.
28
Section 5.12 Contracts.
(a) The AAMAC Disclosure Statement lists all of the Contracts binding on
AAMAC or the assets or property of AAMAC which creates or imposes a liability
greater than $50,000 ("AAMAC Contracts").
(b) AAMAC (and, to the knowledge of AAMAC, each of the other party or
parties thereto), has performed all obligations required to be performed by it
under each AAMAC Contract, except for any failure to perform that would not have
an AAMAC Material Adverse Effect. No event has occurred or circumstance exists
with respect to AAMAC or, to the knowledge of AAMAC, with respect to any other
Person that (with or without lapse of time or the giving of notice or both) does
or may contravene, conflict with or result in a violation or breach of or give
AAMAC or any other Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity of, or to cancel, terminate or modify, any
AAMAC Contract except in each case as would not have an AAMAC Material Adverse
Effect. To the knowledge of AAMAC, no party to any AAMAC Contract has repudiated
any material provision thereof or terminated any AAMAC Contract. All AAMAC
Contracts are valid and binding on AAMAC and, to the knowledge of AAMAC, the
other parties thereto, and are in full force and effect, except in each case as
would not have an AAMAC Material Adverse Effect.
(c) Except as set forth in the AAMAC SEC Reports filed prior to the date
of this Agreement, there are no Contracts or other understandings, commitments
or obligations (including, without limitation, outstanding offers or proposals)
of any kind, whether written or oral, to which AAMAC is a party or by or to
which any of the properties or assets of AAMAC may be bound, subject or
affected, which either (a) creates or imposes a liability greater than $50,000,
or (b) may not be cancelled by AAMAC on 30 days' or less prior notice without
payment of a penalty or premium of any kind.
(d) AAMAC has not entered into any Contracts which do not include a waiver
of any right, title, interest or claim of any kind in or to any monies held in
the trust account in substantially the form included in Section 5.12(c) of the
AAMAC Disclosure Statement.
Section 5.13 Litigation. (i) No judgment, ruling, order, writ, decree,
stipulation, injunction or determination by or with any arbitrator, court or
other Governmental Entity to which AAMAC is party or by which AAMAC or any
assets of any thereof is bound, and which relates to or affects AAMAC, the
assets, properties, Liabilities or employees of AAMAC or the business of AAMAC
is in effect and (ii) AAMAC is not a party to or engaged in or, to the knowledge
of AAMAC, threatened with any Action which relates to or affects any of AAMAC,
the assets, properties, Liabilities or employees of AAMAC, the business of
AAMAC, any Transaction Document or the Transaction, except in each of the
foregoing clauses (i) and (ii), as would not have an AAMAC Material Adverse
Effect.
Section 5.14 Environmental Matters. Except as would not have an AAMAC
Material Adverse Effect, AAMAC does not have any Liability under any applicable
Environmental Law or under any Contract with respect to or as a result of the
presence, discharge, generation, treatment, storage, handling, removal,
disposal, transportation or Release of any Hazardous Material.
29
Section 5.15 Compliance with Applicable Law. Except as would not have an
AAMAC Material Adverse Effect, (i) AAMAC is in compliance and has complied with
all Laws applicable to AAMAC and its business, (ii) no claims or complaints from
any Governmental Entities or other Persons have been asserted or received by
AAMAC since formation related to or affecting AAMAC and its business and, to the
knowledge of AAMAC, no claims or complaints are threatened, alleging that AAMAC
is in violation of any Laws or Permits applicable to AAMAC and its business and
(iii) to AAMAC's knowledge, no investigation, inquiry, or review by any
Governmental Entity with respect to AAMAC and its business is pending or
threatened.
Section 5.16 Permits. There are no Permits that are necessary for AAMAC to
operate its business and to own and use its assets in compliance with all
applicable Laws.
Section 5.17 Employee Matters.
(a) There are no current activities, to the knowledge of AAMAC, to
organize any employees of AAMAC into a collective bargaining unit.
(b) AAMAC does not and is not required to, and has not and has never been
required to, maintain, sponsor, contribute to, or administer any pension,
retirement, savings, money purchase, profit sharing, deferred compensation,
medical, vision, dental, hospitalization, prescription drug and other health
plan, cafeteria, flexible benefits, short-term and long-term disability,
accident and life insurance plan, bonus, stock option, stock purchase, stock
appreciation, phantom stock, incentive and special compensation plan or any
other employee or fringe benefit plan, program or Contract and does not have any
Liability of any kind with respect to any of the foregoing (under ERISA or
otherwise). AAMAC does not have any Contract, plan or commitment, whether or not
legally binding, to create any of the foregoing other than as contemplated by
this Agreement. Neither AAMAC nor any of its ERISA Affiliates has, during any
time in the six-year period preceding the Closing Date, contributed to,
sponsored, maintained or administered any "employee pension benefit plan" within
the meaning of Section 3(2) of ERISA that is or was subject to Title IV of ERISA
or Section 412 of the Code.
(c) The execution and delivery of this Agreement and the other Transaction
Documents and the consummation of the Transaction will not (i) result in any
payment (including severance, unemployment compensation, golden parachute, bonus
or otherwise) becoming due to any stockholder, director or employee of AAMAC; or
(ii) result in the acceleration of the time of payment or vesting of any such
benefits.
Section 5.18 Insurance. Except for directors' and officers' liability
insurance, AAMAC does not maintain any insurance policies or surety bonds.
Section 5.19 AAMAC SEC Reports.
(a) AAMAC has filed all forms, reports, schedules, statements and other
documents, including any exhibits thereto, required to be filed by AAMAC with
the SEC since AAMAC's formation (collectively, the "AAMAC SEC Reports"). The
AAMAC SEC Reports, including all forms, reports and documents filed by AAMAC
with the SEC after the date hereof and prior to the Closing Date (i) were and,
in the case of the AAMAC SEC Reports filed after the date
30
hereof, will be, prepared in accordance with the applicable requirements of the
Securities Act, the Exchange Act and the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, as the case may be,
and the rules and regulations thereunder; and (ii) did not at the time they were
filed (or if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing), and in the case of such forms,
reports and documents filed by AAMAC with the SEC after the date of this
Agreement (other than information with respect to the Halcyon Entities contained
therein), will not as of the time they are filed, contain any untrue statement
of a material fact or omit to state a material fact required to be stated in
such AAMAC SEC Reports or necessary in order to make the statements in such
AAMAC SEC Reports, in light of the circumstances under which they were and will
be made, not misleading.
(b) Each of the financial statements (including, in each case, any related
notes and schedules) contained in each of the AAMAC SEC Reports, including any
AAMAC SEC Reports filed after the date of this Agreement (other than information
with respect to the Halcyon Entities contained therein), complied or will
comply, as of its respective date, in all material respects with all applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, was or will be prepared in accordance with GAAP (except as may
be indicated in the notes thereto) applied on a consistent basis throughout the
periods involved and fairly presented in all material respects, or will fairly
present in all material respects, the financial position of AAMAC as of the
respective dates thereof and the results of its operations and cash flows for
the periods indicated, except that any unaudited interim financial statements
are subject to normal and recurring year-end adjustments which have not been and
are not expected to be material in amount, individually or in the aggregate.
(c) The Chief Executive Officer and Chief Financial Officer of AAMAC have
made all certifications required by Sections 302 and 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act, and the statements contained in any such certifications are complete and
correct, and AAMAC is otherwise in compliance with all applicable effective
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the applicable listing and corporate
governance rules of the American Stock Exchange.
(d) The information in the Proxy Statement (other than information
relating to the Halcyon Entities supplied by the Halcyon Representative for
inclusion in the Proxy Statement) will not as of date of its distribution to the
AAMAC Stockholders (or any amendment or supplement thereto) or at the time of
the AAMAC Stockholders' Meeting contain any statement which, at such time and in
light of the circumstances under which it is made, is false or misleading with
respect to any material fact, or omits to state any material fact required to be
stated therein or necessary in order to make the statement therein not false or
misleading.
Section 5.20 Investment Representations. AAMAC is purchasing the Purchased
Units for investment for its own account and not with a view to, or for sale in
connection with, any distribution thereof.
Section 5.21 Required Vote of the AAMAC Stockholders. The affirmative vote
of holders of a majority of the shares of AAMAC Common Stock issued in its
initial public offering present and voting at the AAMAC Stockholders Meeting to
approve the Initial Business Combination contemplated by this Agreement, the
affirmative vote of the holders of a majority of the shares of AAMAC Common Sock
present and voting to approve the issuance and sale of
31
the AAMAC Common Stock for which Exchangeable Securities may be exchanged, to
the extent that such issuance requires stockholder approval under the rules of
the American Stock Exchange and to adopt the AAMAC Plan (in each case assuming a
quorum is present at the AAMAC Stockholders Meeting), and the affirmative vote
of holders of a majority of the outstanding shares of AAMAC Common Stock to
approve amendments to the Certificate of Incorporation of AAMAC as required so
that the Certificate of Incorporation of AAMAC can be amended and restated in
the form set forth on Exhibit F, are the only votes of holders of securities of
AAMAC which are required to obtain the Requisite Stockholder Approval and to
authorize the consummation of the Transaction (provided that the Requisite
Stockholder Approval shall be deemed not to have occurred only if holders of 30%
or more of the shares of AAMAC Common Stock that were issued in AAMAC's initial
public offering vote against the Transaction and properly elect conversion of
their shares).
Section 5.22 Transactions with Affiliates. Except (i) as disclosed in the
AAMAC SEC Reports filed prior to the date hereof, (ii) as contemplated by the
Transaction Documents or (iii) as would not have a Halcyon Material Adverse
Effect, there are no Contracts or transactions between AAMAC and any other
Person of a type that would be required to be disclosed under Item 404 of
Regulation S-K under the Securities Act and the Exchange Act and no loans by
AAMAC to any of its employees, officers or directors, or any of its Affiliates.
Section 5.23 Opinion of Financial Advisor. The Board of Directors of AAMAC
has received the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇, dated as of the date of this
Agreement, substantially to the effect that, as of such date, the consideration
to be paid in the Transaction is fair, from a financial point of view, to AAMAC.
Section 5.24 No Additional Representations. (a) AAMAC acknowledges that,
in entering into this Agreement, it and its Board of Directors (i) have made
their own inquiry and investigation into, and, based thereon, have formed an
independent judgment concerning, the Halcyon Entities and their businesses and
operations; (ii) have requested and received access to such books and records,
facilities, equipment, contracts and other assets of the Halcyon Entities which
it considers material in determining whether to enter into, perform, and
consummate the transactions contemplated in this Agreement; and (iii) have had
full opportunity to meet with the management of the Halcyon Entities, to discuss
the business and assets of the Halcyon Entities, and to ask all questions of and
receive answers from the Halcyon Entities in determining whether to enter into
this Agreement and to consummate the transactions contemplated in this
Agreement. In reaching its decision to adopt this Agreement and recommend the
Transaction, the Board of Directors of AAMAC has reviewed the results of the
foregoing inquiries and the Transaction Documents. Nothing contained in this
Section 5.23 shall affect AAMAC's reliance on the representations and warranties
set forth in Article IV.
(b) AAMAC acknowledges that neither the Halcyon Parties, the Halcyon
Entities, their respective partners, members, or other equityholders or
managers, nor any Person has made any representation or warranty, express or
implied, of any kind, including without limitation any representation or
warranty as to the accuracy or completeness of any information regarding the
Halcyon Parties or Halcyon Entities furnished or made available to AAMAC and any
of its representatives, in each case except as expressly set forth in Article IV
(as modified by the Halcyon Disclosure Statement), and neither the Halcyon
Parties, Halcyon Entities, their
32
respective directors, officers, partners, members, equityholders, employees,
agents or other representatives, nor any other Person shall be subject to any
liability to AAMAC or any other Person resulting from the Halcyon Entities'
making available, or AAMAC's use of, such information, or any information,
documents or material made available to AAMAC in the due diligence materials
provided, including in management presentations (formal or informal), documents
or in any other form in connection with the transactions contemplated by this
Agreement. Without limiting the foregoing, the Halcyon Parties and Halcyon
Entities make no representation or warranty to AAMAC with respect to any
projections, forecasts or other estimates, plans or budgets of future revenues,
expenses or expenditures, future results of operations (or any component
thereof), future cash flows (or any component thereof) or future financial
condition (or any component thereof) of the Halcyon Entities or the future
business, operations or affairs of the Halcyon Entities heretofore or hereafter
delivered to or made available to AAMAC or its respective representatives or
affiliates.
ARTICLE VI
COVENANTS AND AGREEMENTS
Section 6.1 Conduct of Business. Except (i) as required by the Transaction
Documents or Law; (ii) as set forth in Section 6.1 of each of the Halcyon
Disclosure Statement or AAMAC Disclosure Statement, as applicable; (iii) in the
case of the Halcyon Parties, in connection with the Reorganization; (iv) in the
case of the Halcyon Parties, with the consent in advance in writing by AAMAC,
such consent not to be unreasonably withheld, conditioned or delayed; or (v) in
the case of AAMAC with the consent of the Halcyon Partner Vehicle, at all times
during the period commencing with the execution and delivery of this Agreement
and continuing until the earlier to occur of the termination of this Agreement
and the Closing Date:
(a) The Halcyon Parties shall cause each of the Halcyon Entities to, and
AAMAC shall carry on its business in the ordinary course of business.
(b) The Halcyon Parties shall not cause or permit any of the Halcyon
Entities to do any of the following:
(i) propose to adopt any amendments to or amend its Organizational
Documents (other than as provided in the Amended and Restated Limited
Liability Company Agreement of Halcyon as contemplated herein);
(ii) authorize for issuance, issue, sell, deliver or agree or commit
to issue, sell or deliver (whether through the issuance or granting of
options, warrants, other equity-based (whether payable in cash, securities
or other property or any combination of the foregoing) commitments,
subscriptions, rights to purchase or otherwise) any of its securities;
(iii) acquire or redeem, directly or indirectly, or amend any of its
securities;
(iv) split, combine or reclassify any shares of capital stock or
other Equity Securities;
33
(v) propose or adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of it;
(vi) (A) incur or assume any long-term or short-term Indebtedness or
issue any debt securities, except for Indebtedness or debt securities with
a principal amount of less than $5,000,000 (provided that any Indebtedness
for borrowed money incurred or assumed following the date hereof that is
not repaid on or prior to the Closing shall be included in Specified
Liabilities), or (B) mortgage or pledge any of its material assets,
tangible or intangible, or create or suffer to exist any Lien thereupon
(other than Permitted Liens);
(vii) enter into, adopt, amend (including to provide for the
acceleration of vesting), modify or terminate any Halcyon Plan, increase
in any material manner the aggregate compensation or fringe benefits of
any consultant, director, officer or employee, taken together, except in
each case, (A) as may be required by applicable Law or by any Halcyon Plan
or (B) in the ordinary course of business;
(viii) forgive any loans to any of its employees, officers or
directors, or any of its Affiliates (other than Halcyon Entities), of more
than $1,000,000 in the aggregate, other than in connection with
advancement of expenses in the ordinary course of business;
(ix) enter into, amend, or extend any collective bargaining
agreement;
(x) acquire, sell, lease, license or dispose of any material
property or assets in any single transaction or series of related
transactions, except for transactions not in excess of $500,000
individually, or $2,000,000 in the aggregate;
(xi) acquire (by merger, consolidation or acquisition of stock or
assets) any other Person or any equity or ownership interest therein for
consideration of more than $10,000,000;
(xii) settle or compromise any pending or threatened Action to which
a Halcyon Entity is party, other than settlements or compromises that do
not create obligations of Halcyon Entities in an amount that exceeds
$5,000,000 (excluding amounts to be paid under existing insurance policies
or renewals thereof and amounts reflected or reserved against in the
Halcyon Entities' consolidated unaudited balance sheet as of the December
31, 2007);
(xiii) make any change in any of the accounting principles or
practices used by it except as required by Law or GAAP, or as recommended
by the independent auditors of Halcyon or the Halcyon Entities;
(xiv) change any material Tax election, change any Tax accounting
method, settle or compromise any material Tax liability, or consent to the
extension or waiver of the limitations period applicable to a material Tax
claim or assessment; or
34
(xv) enter into a Contract to do any of the foregoing or knowingly
take any action which is reasonably expected to result in any of the
conditions to the consummation of the Transaction not being satisfied, or
knowingly take any action which would materially impair its ability to
consummate the Transaction in accordance with the terms hereof or
materially delay such consummation.
(c) AAMAC shall not do any of the following:
(i) propose to adopt any amendments to or amend its Organizational
Documents (other than as provided in Section 6.2 and Section 6.12);
(ii) except as required to consummate the Transaction and to comply
with this Agreement, authorize for issuance, issue, sell, deliver or agree
or commit to issue, sell or deliver (whether through the issuance or
granting of options, warrants, other equity-based (whether payable in
cash, securities or other property or any combination of the foregoing)
commitments, subscriptions, rights to purchase or otherwise) any of its
securities;
(iii) acquire or redeem, directly or indirectly, or amend any of its
securities;
(iv) make any distribution or declare, pay or set aside any dividend
with respect to, or split, combine or reclassify any of its equity
interests or any shares of capital stock, except in connection with the
exercise of conversion rights by AAMAC stockholders pursuant to paragraph
C of Article Sixth of AAMAC's Amended and Restated Certificate of
Incorporation;
(v) propose or adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization;
(vi) forgive any loans to any of its employees, officers or
directors, or any of its Affiliates;
(vii) make any change in any of the accounting principles or
practices used by it except as required by changes in GAAP;
(viii) change any material Tax election, change any Tax accounting
method, settle or compromise any material Tax liability, or consent to the
extension or waiver of the limitations period applicable to a material Tax
claim or assessment;
(ix) settle or compromise any pending or threatened material Action
for an amount that exceeds $5,000,000;
(x) make, or cause to be made, any change to the investments in
which the funds in the Trust Account are invested or the investment
allocation of such funds; or
(xi) (A) enter into, amend, extend, renew, or waive any provision
under any AAMAC Contract, (B) incur, assume, endorse, guarantee, pay or
otherwise become responsible for any liability or obligations, or (C)
spend any cash held in the Trust
35
Account or spend any other cash other than for liabilities permitted
hereunder; provided, in each case, that the foregoing restrictions shall
not apply to or restrict AAMAC's ability to spend, commit to spend, or
incur liabilities to pay Transaction Expenses, to comply with applicable
Laws, in the ordinary course of business (taking into account that AAMAC
is a special-purpose acquisition company), in accordance with Contracts to
which AAMAC is a party as of the date of this Agreement or to pay tax
obligations using funds from the Trust Fund as contemplated by its trust
agreement);
(xii) amend or otherwise modify any agreement relating to the Trust
Account; or
(xiii) knowingly take any action which would materially impair its
ability to consummate the Transaction in accordance with the terms hereof
or materially delay such consummation.
Section 6.2 Proxy Statement; AAMAC Stockholders' Meeting.
(a) As promptly as practicable after the execution of this Agreement,
AAMAC will prepare and file the Proxy Statement with the SEC. AAMAC will respond
to any comments of the SEC and AAMAC will use its reasonable best efforts to
mail the Proxy Statement to its stockholders at the earliest practicable time.
As promptly as practicable after the execution of this Agreement, AAMAC will
prepare and file any other filings required under the Securities Act or the
Exchange Act or any other Federal, foreign or Blue Sky Laws relating to the
Transaction, (collectively, the "Other Filings"). AAMAC will notify the Halcyon
Representative promptly upon the receipt of any comments from the SEC or its
staff and of any request by the SEC or its staff or any other governmental
officials for amendments or supplements to the Proxy Statement or any Other
Filing or for additional information and will supply the Halcyon Representative
with copies of all correspondence between AAMAC or any of its representatives,
on the one hand, and the SEC, or its staff or other government officials, on the
other hand, with respect to the Proxy Statement or any Other Filing. AAMAC
agrees that the Proxy Statement and the Other Filings will comply in all
material respects with all applicable Laws and the rules and regulations
promulgated thereunder. Whenever any event occurs which is required to be set
forth in an amendment or supplement to the Proxy Statement or any Other Filing,
the Halcyon Representative or AAMAC, as the case may be, will promptly inform
the other Party of such occurrence and cooperate in filing with the SEC or its
staff or any other government officials, and/or mailing to AAMAC Stockholders,
such amendment or supplement. The Proxy Statement will be sent to the AAMAC
Stockholders for the purpose of soliciting proxies from AAMAC Stockholders to
vote in favor of (i) approval of the Initial Business Combination contemplated
by this Agreement; (ii) the issuance and sale of the AAMAC Common Stock for
which Exchangeable Securities may be exchanged to the extent that such issuance
requires shareholder approval under the rules of the applicable stock exchange;
(iii) the adoption of the AAMAC Plan; and (iv) approving amendments to the
Certificate of Incorporation of AAMAC as required so that the Certification of
Incorporation of AAMAC can be amended and restated in the form set forth on
Exhibit F (the matters described in clauses (i) through (iv), the "Voting
Matters").
(b) As soon as practicable following its approval by the SEC, AAMAC shall
distribute the Proxy Statement to the AAMAC Stockholders and, pursuant thereto,
shall call a
36
meeting of the AAMAC Stockholders (the "AAMAC Stockholders' Meeting") in
accordance with the DGCL and solicit proxies from such holders to vote in favor
of the approval of the Transaction and the other Voting Matters.
(c) AAMAC shall comply, and the Halcyon Representative shall provide AAMAC
with such information concerning the Halcyon Entities reasonably requested by
AAMAC that is necessary for the information concerning the Halcyon Parties or
the Halcyon Entities in the Proxy Statement to comply, with all applicable
provisions of and rules under the Exchange Act and all applicable provisions of
the DGCL in the preparation, filing and distribution of the Proxy Statement, the
solicitation of proxies thereunder, and the calling and holding of the AAMAC
Stockholders' Meeting. Without limiting the foregoing, AAMAC shall ensure that
the Proxy Statement does not, as of the date on which it is distributed to the
AAMAC Stockholders, and as of the date of the AAMAC Stockholders' Meeting,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading (provided that AAMAC shall not be
responsible for ensuring that any information furnished by the Halcyon
Representative for inclusion in the Proxy Statement does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in light of the circumstances under which they were
made, not misleading).
(d) The board of directors of AAMAC shall recommend that the AAMAC
Stockholders vote in favor of approval of the Transaction and the other Voting
Matters, and AAMAC, acting through its board of directors, shall include in the
Proxy Statement such recommendation, and shall otherwise use reasonable best
efforts to obtain the Requisite Shareholder Approval.
Section 6.3 Directors and Officers of AAMAC After Closing. AAMAC and the
Halcyon Partner Vehicle shall take all necessary action, including causing AAMAC
directors to resign, so that four persons to be designated by the Halcyon
Partner Vehicle and five persons, who shall be independent under the applicable
rules of the SEC and the applicable stock exchange, to be proposed by the
Halcyon Partner Vehicle subject to AAMAC's consent, not to be unreasonably
withheld, conditioned or delayed, are appointed or elected, as applicable, to
the positions of directors of AAMAC and Halcyon in classes as designated by the
Halcyon Partner Vehicle, to serve in such positions effective immediately after
the Closing, and so that persons to be designated by the Halcyon Partner Vehicle
are appointed or elected, as applicable, to the positions of officers of AAMAC
and Halcyon, to serve in such positions effective immediately after the Closing.
Section 6.4 Governmental Filings. In furtherance of the obligations set
forth in Section 6.8, if required pursuant to the HSR Act, as promptly as
practicable after the date of this Agreement, but in no event later than ten
(10) Business Days after the date hereof, AAMAC and the Halcyon Representative
shall each prepare and file the notification required of it thereunder in
connection with the Transaction and shall promptly and in good faith respond to
all information requested of it by the Federal Trade Commission and Department
of Justice in connection with such notification and otherwise cooperate in good
faith with each other and such Governmental Entities. AAMAC and the Halcyon
Representative shall use reasonable best efforts to cooperate with each other in
(a) determining whether any registrations, declarations or
37
filings are required to be made with, or consents, permits, authorizations,
waivers, clearances, approvals, and expirations or terminations of waiting
periods are required to be obtained from, any third parties or other
Governmental Entities in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, (b)
timely making all such registrations, declarations or filings and timely
obtaining all such consents, permits, authorizations or approvals and (c) the
taking of all reasonable steps as may be necessary to avoid any Action by any
Governmental Entity. AAMAC the Halcyon Parties and the Halcyon Representative
shall (1) promptly inform the other of any communication to or from the Federal
Trade Commission, the Department of Justice or any other Governmental Entity
regarding the Transaction; (2) give the other prompt notice of the commencement
of any Action by or before any Governmental Entity with respect to the
Transaction; and (3) keep the other reasonably informed as to the status of any
such Action. Filing fees with respect to the notifications required under the
HSR Act shall be paid by AAMAC.
Section 6.5 Required Information. From the date hereof through the Closing
Date, each of the Parties will provide to the other Parties and their respective
Representatives reasonable access during normal business hours, upon reasonable
notice and as coordinated through such party's Chief Operating Officer or Chief
Financial Officer, to the properties, books, records, employees of the Halcyon
Entities and AAMAC to make or cause to be made such review of the business, the
assets, properties and Liabilities and financial and legal condition of the
Halcyon Entities and AAMAC as any Party deems necessary or advisable, provided
that any such review shall not interfere unnecessarily with normal operations of
the Halcyon Entities and AAMAC.
Section 6.6 Confidentiality. Each of the Parties agrees to comply with the
terms of Mutual Confidentiality and Non-Disclosure Agreement, dated as of
December 12, 2007, between Halcyon Asset Management LLC and AAMAC, as though a
party thereto, except that such agreement shall survive until the Closing or the
fifth anniversary of the termination of this Agreement, as applicable.
Section 6.7 Public Disclosure. From the date of this Agreement until
Closing or termination, the Parties shall cooperate in good faith to jointly
prepare all press releases and public announcements pertaining to this Agreement
and the Transaction, and no Party shall issue or otherwise make any public
announcement or communication pertaining to this Agreement or the Transaction
without the prior consent of AAMAC (in the case of the Halcyon Parties) or the
Halcyon Representative (in the case of AAMAC), except as required by any Laws or
by the rules and regulations of, or pursuant to any agreement of a stock
exchange. Each Party will not unreasonably withhold approval from the others
with respect to any press release or public announcement. If any Party
determines that it is required by any Laws or by the rules and regulations of,
or pursuant to any agreement with, a stock exchange or trading system, to make
this Agreement and the terms of the Transaction public or otherwise issue a
press release or make public disclosure with respect thereto, it shall, to the
extent permitted by Law, at a reasonable time before making any public
disclosure, consult with the other Party regarding such disclosure and give the
other Party reasonable time to comment on such release or announcement in
advance of such issuance. This provision will not apply to communications by any
Party to its counsel, accountants and other professional advisors or, in the
case of the Halcyon Parties, to its respective directors, officers, partners,
members, equityholders, or employees. The Parties
38
hereto acknowledge that AAMAC will be required by Law to file with the SEC a
Current Report on Form 8-K pursuant to the Exchange Act to report the execution
of this Agreement.
Section 6.8 Commercially Reasonable Best Efforts. Upon the terms and
subject to the conditions set forth in this Agreement, each of the Parties
agrees to use its commercially reasonable best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other Parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
Transaction, including using commercially reasonable best efforts to accomplish
the following: (i) the taking of all reasonable acts necessary to cause the
conditions precedent set forth in Article III, to be satisfied; (ii) the
obtaining of all consents, approvals or waivers from third parties required to
consummate the Transaction; (iii) the defending of any Actions challenging this
Agreement or the consummation of the Transaction, including seeking to have any
stay or temporary restraining order entered by any court or other Governmental
Entity vacated or reversed; and (iv) the execution or delivery of any additional
instruments reasonably necessary to consummate the Transaction, and to fully
carry out the purposes of this Agreement. Anything contained in this Agreement
to the contrary notwithstanding, none of the Parties or their Affiliates will be
required to commence litigation or divest or hold separate any business or
assets or limit or restrict its rights or ability to engage in any business in
connection with the consummation of the Transaction.
Section 6.9 Notices of Certain Events. From the date hereof through the
earlier of the Closing Date or termination of this Agreement, the Halcyon
Representative will notify AAMAC, and AAMAC will notify the Halcyon
Representative, of: (i) any notice or other communication from any Person
alleging that the Consent of such Person is or may be required in connection
with the Transaction or the Reorganization; and (ii) any Action commenced
affecting the Halcyon Parties, the Halcyon Entities, AAMAC, the assets,
Liabilities or employees of the Halcyon Parties, the Halcyon Entities or AAMAC
or the consummation of the Transaction. No notice pursuant to this Section will
affect any representations or warranties, covenants, obligations, agreements or
conditions set forth herein or otherwise affect any available remedies.
Section 6.10 Directors' and Officers' Insurance. From and after the
Closing Date and until the six year anniversary of the Closing Date, AAMAC shall
maintain in effect directors' and officers' liability insurance (or, at AAMAC's
option, a "tail" insurance policy) covering those Persons covered by the
directors' and officers' liability insurance maintained by AAMAC as of the date
hereof for any actions taken by them or omissions by them on or before the
Closing Date with the same directors' and officers' liability insurance coverage
as may be provided from time to time by AAMAC to its then existing directors and
officers; provided that, in no event will AAMAC be required to expend in the
aggregate amounts in any year in excess of 250% of the amount of the last annual
premium for such insurance, as set forth on the AAMAC Disclosure Statement, to
cover its then existing directors and officers (in which event, AAMAC shall
purchase the greatest coverage available for such amount). Nothing in this
Section shall affect the right of any directors or officers that continue their
employment with AAMAC to participate in any directors' and officers' liability
insurance policy in effect after the Closing for actions taken after Closing.
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Section 6.11 New York Stock Exchange Listing. Upon the request of the
Halcyon Representative, AAMAC shall use commercially reasonable best efforts to
take, or cause to be taken, and to do, or cause to be done, all things
necessary, proper or advisable to cause all of the shares of AAMAC Common Stock,
whether outstanding or to be issued in connection with the Transaction, the
AAMAC Warrants and units to be approved for listing on the New York Stock
Exchange on or immediately following the Closing.
Section 6.12 Amended and Restated AAMAC Organizational Documents. At the
Closing, AAMAC shall (x) amend its certificate of incorporation, substantially
on terms as set forth in Exhibit F, with such changes therein as may be approved
by AAMAC and the Halcyon Partner Vehicle, (y) adopt the certificate of
designation for the AAMAC Preferred Stock, substantially on terms as set forth
on Exhibit G, with such changes therein as may be approved by AAMAC and the
Halcyon Representative, and (z) amend its bylaws, substantially on terms as set
forth in Exhibit K, with such changes therein as may be approved by AAMAC and
the Halcyon Partner Vehicle.
Section 6.13 Trust Waiver. The Halcyon Parties and the Halcyon
Representative, on behalf of the other Halcyon Entities, hereby acknowledges
that AAMAC is a recently organized blank check company formed for the purpose of
acquiring (an "Initial Business Combination") one or more businesses or assets.
The Halcyon Parties and the Halcyon Representative, on behalf of the other
Halcyon Entities, further acknowledges that AAMAC's sole assets consist of the
cash proceeds of the recent public offering (the "IPO") and private placements
of its securities, and that substantially all of those proceeds have been
deposited in a trust account with a third party (the "Trust Account") for the
benefit of AAMAC, certain of its stockholders and the underwriters of its IPO.
The monies in the Trust Account may be disbursed only (i) to AAMAC in limited
amounts from time to time (and in no event more than $3,500,000 in total) in
order to permit AAMAC to pay its operating expenses; (ii) if AAMAC completes an
Initial Business Combination, to certain dissenting public stockholders, to the
underwriters in the amount of the Deferred Underwriting Fees, and then to AAMAC;
and (iii) if AAMAC fails to complete an Initial Business Combination within the
allotted time period and liquidates, subject to the terms of the agreement
governing the Trust Account, to AAMAC in limited amounts to permit AAMAC to pay
the costs and expenses of its liquidation and dissolution, and then to AAMAC's
public stockholders (as such term is defined in the agreement governing the
Trust Account). For and in consideration of AAMAC's agreement to enter into this
Agreement, the Halcyon Parties and the Halcyon Representative, on behalf of the
other Halcyon Entities, hereby waives any right, title, interest or claim of any
kind (any "Claim") it has or may have in the future in or to any monies in the
Trust Account and agrees not to seek recourse against the Trust Account or any
funds distributed therefrom (except amounts released to AAMAC as described in
clause (i) above) as a result of, or arising out of, any Claims against AAMAC or
otherwise arising under this Agreement or otherwise.
Section 6.14 No Solicitation. From the date hereof through the earlier of
the Closing Date or termination of this Agreement, neither AAMAC nor any of the
Halcyon Parties, nor shall such Party authorize or permit any of its or their
officers, directors, employees, investment bankers, attorneys, accountants,
consultants or other agents or advisors to, directly or indirectly, (i) solicit,
initiate or take any action to facilitate or knowingly encourage the submission
of any Acquisition Proposal, (ii) enter into or participate in any discussions
or negotiations with, furnish
40
any information relating to such Party or any of its Subsidiaries or afford
access to the business, properties, assets, books or records of such Party or
any of its Subsidiaries to, otherwise cooperate in any way with, or knowingly
assist, participate in, facilitate or encourage any effort by, any third party
that is seeking to make, or has made, an Acquisition Proposal, or (iii) enter
into any agreement with respect to an Acquisition Proposal.
Section 6.15 Control of Operations. Nothing contained in this Agreement
shall give any Party, directly or indirectly, the right to control or direct the
other Party's operations prior to the Closing. Prior to the Closing, each of the
Parties shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over their respective operations.
Prior to the Closing, Halcyon shall use its reasonable best efforts to cause the
risk management, compliance, back office, marketing, and operations functions of
the Halcyon Entities to be migrated to Halcyon.
Section 6.16 Additional Agreements. The parties agree to use their
reasonable best efforts to finalize the Additional Agreements and employment
agreements consistent with the terms set forth on Exhibit E as soon as
reasonably practicable following the date hereof and to finalize employment
agreements.
Section 6.17 Reorganization. The Halcyon Parties shall use their
reasonable best efforts to take all action necessary or advisable, and shall use
their reasonable best efforts to enforce all rights and remedies available
pursuant to the Reorganization MOU necessary, to consummate the transfers of
equity interests in the Halcyon Entities contemplated by the Reorganization.
Section 6.18 Trust Account. AAMAC shall make appropriate arrangements to
cause the funds in the Trust Account to be disbursed at Closing (i) in the
amount of the Conversion Amount, if any, to stockholders of AAMAC who vote
against the Transaction and elect to have their shares of AAMAC Common Stock
converted into cash in accordance with AAMAC's Certificate of Incorporation and
any procedures regarding the exercise of Conversion rights that may be set forth
in the Proxy Statement; (ii) to the underwriters of its initial public offering
in the amount of the Deferred Underwriting Fees and (iii) in the amount of the
Cash Consideration, to the Halcyon Partner Vehicle.
Section 6.19 AAMAC Plan. Prior to or on the Closing Date, AAMAC shall, in
consultation with the Halcyon Representative, adopt the AAMAC Plan, pursuant to
which up to 22% of the equity of AAMAC on a fully diluted basis (as determined
immediately following the Closing) (the "Equity Pool") will be reserved for
grants to current and future employees of AAMAC and its subsidiaries and
affiliates in the form of stock options and restricted stock units. 15% of the
equity of AAMAC on a fully diluted basis will be reserved under the AAMAC Plan
in the form of options and restricted stock units (the "Mixed Pool"), and the
remainder of the Equity Pool will be reserved under the AAMAC Plan in the form
of restricted stock units (the "RSU Pool"). Stock options and restricted stock
units representing up to half of the Mixed Pool and restricted stock units
representing all of the RSU Pool shall be granted pursuant to the AAMAC Plan on
the Closing Date, with per-individual award numbers and the terms of awards
(including, without limitation, vesting schedules and events and
post-termination exercise periods) determined by the Halcyon Representative in
consultation with AAMAC, but in no
41
event less favorable to the grantees than those set forth in the employment
agreement term sheet of any individual who is party thereto. AAMAC shall cause
all shares of stock reserved under the AAMAC Plan to be registered on Form S-8,
or another registration statement of similar effect, promptly following the
adoption of the AAMAC Plan and shall use reasonable best efforts to keep such
registration statement effective for so long as any shares reserved under the
AAMAC Plan may be granted or are subject to outstanding awards.
Section 6.20 Purchase Price Allocation. The Halcyon Representative shall
prepare an allocation of the purchase price hereunder (and all other capitalized
costs) among the assets of the Halcyon Parties in accordance with Sections 755
and 1060 of the Code and the Treasury Regulations promulgated thereunder (and
any similar provisions of state, local or foreign law, as appropriate) and shall
deliver such allocation to AAMAC within 60 days after the Closing Date. AAMAC
may propose any changes to the allocation within 30 days thereafter, together
with a reasonably detailed explanation of the reasons therefor. If AAMAC
proposes any changes in accordance with the preceding sentence, the Halcyon
Representative will negotiate in good faith and use reasonable commercial
efforts to resolve the disputed items. If the Halcyon Representative agrees on
the allocation, then AAMAC and the Halcyon Parties shall report, act and file
Tax Returns (including, but not limited to, Internal Revenue Service Form 8594)
in all respects and for all purposes consistent with such allocation, and AAMAC
and the Halcyon Parties shall take no position (whether in audits, Tax Returns
or otherwise) that is inconsistent with such allocation unless required to do so
by applicable law. The allocation (or allocations) shall be adjusted to the
extent necessary to reflect any adjustments to the purchase price hereunder.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be terminated and the
Transaction abandoned at any time prior to the Closing Date:
(a) by the mutual written agreement of AAMAC and the Halcyon
Representative;
(b) by written notice by AAMAC to the Halcyon Representative or by the
Halcyon Representative to AAMAC, if the Closing Date shall not have occurred on
or before the Termination Date, provided that no party may terminate this
Agreement pursuant to this Section 7.1(b) if such failure of the Closing Date to
occur by the Termination Date is due to such party's breach or violation of any
representation, warranty, covenant or agreement herein;
(c) by written notice by AAMAC to the Halcyon Representative or by the
Halcyon Representative to AAMAC, if there shall be any Law that makes illegal,
permanently restrains, enjoins, or otherwise prohibits consummation of the
Transaction and such Law shall not be subject to appeal or shall have become
final and unappealable, provided that the party seeking to terminate this
Agreement pursuant to this Section 7.1(c) shall have used such efforts as may be
required by Sections 6.4 and 6.8 to prevent, oppose and remove such Law;
42
(d) by written notice by AAMAC to the Halcyon Representative, if there
shall have been a breach of, inaccuracy in, or failure to perform any
representation, warranty, covenant or agreement on the part of the Halcyon
Parties set forth in this Agreement, or if any representation or warranty of the
Halcyon Parties set forth in this Agreement shall have become untrue, in any
such case such that the conditions set forth in Section 3.1(a) or Section
3.1(b), as the case may be, would not be satisfied, provided that if such breach
is curable by any such Person prior to the Termination Date through the exercise
of such Person's commercially reasonable best efforts, then for so long as such
Halcyon Party continues to exercise such commercially reasonable best efforts to
cure the same, AAMAC may not terminate this Agreement pursuant to this Section
7.1(d);
(e) by written notice by the Halcyon Representative to AAMAC, if there
shall have been a breach of, inaccuracy in, or failure to perform any
representation, warranty, covenant or agreement on the part of AAMAC set forth
in this Agreement, or if any representation or warranty of AAMAC set forth in
this Agreement shall have become untrue, in any such case such that the
conditions set forth in Section 3.2(a) or Section 3.2(b), as the case may be,
would not be satisfied, provided that if such breach is curable by AAMAC prior
to the Termination Date through the exercise of its commercially reasonable best
efforts, then for so long as AAMAC continues to exercise such commercially
reasonable best efforts to cure the same, the Halcyon Representative may not
terminate this Agreement pursuant to this Section 7.1(e);
(f) by written notice by the Halcyon Representative to AAMAC if AAMAC's
Board of Directors has made a Change in Recommendation; or
(g) by written notice by the Halcyon Representative to AAMAC or by written
notice by AAMAC to the Halcyon Representative if the Requisite Shareholder
Approval is not obtained at the AAMAC Stockholders' Meeting (as the same may be
adjourned or postponed from time to time but not later than the Termination
Date), provided that AAMAC may not terminate this Agreement pursuant to this
Section 7.1(g) if it has breached or failed to comply with its obligations under
Section 6.2.
Section 7.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 7.1, this Agreement (other than those provisions
which expressly survive termination of this Agreement) shall thereafter become
void and have no effect, without any liability on the part of any Party or its
Affiliates or Representatives in respect thereof, except that nothing herein
will relieve any Party from liability for any willful and material breach of
this Agreement.
Section 7.3 Termination Fee. If the Halcyon Representative terminates this
Agreement pursuant to Section 7.1(e) or 7.1(f), or if either Halcyon
Representative or AAMAC terminates this Agreement pursuant to Section 7.1(b),
7.1(c) or 7.1(g), in each case as a result of a willful breach by AAMAC of this
Agreement (which shall include any of the events set forth in Section 7.1(f)),
then pursuant to the Voting Agreement, the AAMAC Founders shall (and AAMAC shall
cause the AAMAC Founders to) each agree to transfer to the Halcyon Partner
Vehicle 50% of the AAMAC Founders' Shares; provided that such transfers will
take place only when and to the extent such shares of AAMAC Common Stock are
released to the AAMAC Founders pursuant to the terms of that certain Escrow
Agreement dated as of August 1, 2007 by
43
and among AAMAC, the AAMAC Founders and Continental Stock Transfer & Trust
Company.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Survival of Representations, Warranties and Covenants. The
representations and warranties set forth in this Agreement or in any certificate
delivered in connection with this Agreement and each covenant requiring
performance prior to the Closing shall terminate effective as of immediately
prior to the Closing such that no claim for breach of any such representation or
warranty or covenant may be brought after the Closing. Any covenant of any party
in this Agreement that requires performance at or after the Closing shall
survive the Closing.
Section 8.2 Assignment. No Party to this Agreement will convey, assign or
otherwise transfer any of its rights or obligations under this Agreement or any
other Transaction Document without the prior written consent of the Halcyon
Representative (in the case of an assignment by AAMAC) or of AAMAC (in the case
of an assignment by a Halcyon Party). Any conveyance, assignment or transfer
requiring the prior written consent of the Halcyon Representative or AAMAC which
is made without such consent will be void ab initio. No assignment will relieve
the assigning Party of its obligations hereunder or thereunder.
Section 8.3 Parties in Interest. This Agreement is binding upon and is for
the benefit of the Parties hereto and their respective successors and permitted
assigns. This Agreement is not made for the benefit of any Person not a Party
hereto, and no Person other than the Parties hereto or their respective
successors and permitted assigns will acquire or have any benefit, right, remedy
or claim under or by reason of this Agreement, except that the AAMAC is an
intended third party beneficiary of this Agreement.
Section 8.4 Amendment. Prior to the Closing, this Agreement may not be
amended except by a written agreement executed by AAMAC and the Halcyon
Representative. From and after the Closing, any amendment shall require the
consent of AAMAC and the Halcyon Partner Vehicle. Any amendment to this
Agreement by AAMAC after the Closing must be approved by a majority of the
independent directors of the Board of Directors of AAMAC.
Section 8.5 Waiver; Remedies. No failure or delay on the part of AAMAC,
the Halcyon Representative or the Halcyon Parties in exercising any right, power
or privilege under this Agreement or any other Transaction Document will operate
as a waiver thereof, nor will any waiver on the part of AAMAC, the Halcyon
Representative or the Halcyon Parties of any right, power or privilege under
this Agreement or any other Transaction Document operate as a waiver of any
other right, power or privilege under this Agreement or any other Transaction
Document, nor will any single or partial exercise of any right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege under this Agreement or any other Transaction
Document. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies which the parties may otherwise have at law
or in equity.
44
Section 8.6 Expenses. (a) Except as otherwise provided herein, all cost
and expense incurred in connection with this Agreement shall be paid by the
Party incurring such cost or expense, except that if the Closing occurs, AAMAC
shall pay any such costs and expenses of the Halcyon Parties and Halcyon
Entities, whenever incurred, including, for the avoidance of doubt, any
Transaction Expenses of the Halcyon Parties or Halcyon Entities.
(b) If this Agreement is terminated by either AAMAC or the Halcyon
Representative pursuant to Section 7.1(b), 7.1(c), 7.1(e), 7.1(f) or 7.1(g),
then following such termination, if AAMAC subsequently consummates an Initial
Business Combination (as such term is defined in the AAMAC Amended and Restated
Certificate of Incorporation), then AAMAC shall reimburse the Halcyon Parties
and the Halcyon Entities for all of their documented Transaction Expenses up to
$12.5 million in the aggregate.
Section 8.7 Notices. All notices, requests, claims, demands and other
communications required or permitted to be given under any Transaction Document
shall be in writing and shall be deemed effectively given (a) upon personal
delivery to the Party to be notified; (b) when received when sent by e-mail or
fax by the Party to be notified; provided, however, that notices given by e-mail
or fax shall not be effective unless either (i) a duplicate copy of such e-mail
or fax notice is promptly given by one of the other methods described in this
Section 8.7, or (ii) the receiving Party delivers a written confirmation of
receipt for such notice either by e-mail, fax or any other method described in
this Section 8.7; (c) one Business Day after deposit with a reputable overnight
courier, prepaid for overnight delivery and addressed as set forth in (d),
provided that the sending Party receives a confirmation of delivery from the
overnight courier service; or (d) three Business Days after deposit with the
U.S. Post Office, Royal Mail or other governmental postal service, postage
prepaid, registered or certified with return receipt requested and addressed to
the Party to be notified at the address indicated for such Party below, or at
such other address as such Party may designate by 10 days' advance written
notice to the other parties given in the foregoing manner:
(a) If to AAMAC:
Alternative Asset Management Acquisition Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
Akin Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
45
(b) If to any Halcyon Party:
Halcyon Asset Management LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
Section 8.8 Entire Agreement. This Agreement and the other Transaction
Documents collectively constitute the entire agreement between the Parties with
respect to the subject matter hereof. This Agreement and the other Transaction
Documents supersede all prior negotiations, agreements and understandings of the
Parties of any nature, whether oral or written, relating thereto, including the
letter of intent and term sheet dated as of February 25, 2008; provided, that
the Mutual Confidentiality and Non-Disclosure Agreement, dated as of December
12, 2007, between Halcyon Asset Management LLC and AAMAC as provided in Section
6.6.
Section 8.9 Severability. If any provision of this Agreement or any other
Transaction Document or the application thereof to any Person or circumstance is
determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions thereof, or the application of such
provision to Persons or circumstances other than those as to which it has been
held invalid or unenforceable, shall remain in full force and effect and shall
in no way be affected, impaired or invalidated thereby; provided that in such
case, a failure to comply with such provision shall be deemed to be a breach of
this Agreement for purposes of this Agreement.
Section 8.10 Consent to Jurisdiction.
(a) Each of the Parties hereby irrevocably and unconditionally submits to
the exclusive jurisdiction of (i) the courts of the State of New York sitting in
New York City and (ii) the United States District Court for the Southern
District of New York for the purposes of any Action (except for any disputes
relating to purchase price adjustments covered by Section 2.3) arising out of or
relating to the Transaction, this Agreement or any other Transaction Document,
any provision hereof or thereof or the breach, performance, validity or
invalidity hereof or thereof. Each Party agrees that transmission of any
process, summons, notice or document to the Party at the address for notices
specified in Section 8.7 hereof, mailed by first class mail, shall be effective
service of process upon such Party for any Action brought against it in such
court with respect to any matters to which it has submitted to jurisdiction as
set forth above. Each of the
46
Parties irrevocably and unconditionally waives any objection to the laying of
venue of any Action arising out of or relating to the Transaction, this
Agreement or any other Transaction Document, any provision hereof or thereof or
the breach, performance, validity or invalidity hereof or thereof in the courts
referred to in this section, and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such Action
brought in any such court has been brought in an inconvenient forum.
Notwithstanding the foregoing, the Parties agree that a final judgment in any
action or proceeding so brought shall be conclusive and may be enforced by suit
on the judgment in any jurisdiction or in any other manner provided in Law or in
equity.
(b) EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE TRANSACTION DOCUMENTS, THE
TRANSACTION OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
Section 8.11 Exhibits and Schedules; Disclosure. All Exhibits and
Schedules attached hereto are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Any matter disclosed on any section of
the Halcyon Disclosure Statement or AAMAC Disclosure Statement shall be deemed
to be disclosed with respect to any other section of such document, and with
respect to any representation, warranty or covenant in this Agreement or the
Transaction Documents, to which the applicability of such matter is reasonably
apparent.
Section 8.12 Governing Law. This Agreement will be governed by and
construed in accordance with the Laws of the State of New York (excluding any
provision regarding conflicts of law).
Section 8.13 Counterparts. This Agreement may be executed by facsimile or
portable document format (pdf) transmission and in separate counterparts, each
such counterpart being deemed to be an original instrument, and all such
counterparts will together constitute the same agreement.
Section 8.14 Specific Performance. In the event of any actual or
threatened default in, or breach of, any of the terms, conditions and provisions
of this Agreement or any other Transaction Document, the Party or Parties who
are or are to be thereby aggrieved will have the right of specific performance
and injunctive relief giving effect to its or their rights under such
Transaction Document, in addition to any and all other rights and remedies at
law or in equity, and all such rights and remedies will be cumulative. The
Parties agree that any such breach or threatened breach would cause irreparable
injury, that the remedies at law for any such breach or threatened breach,
including monetary damages, are inadequate compensation for any loss and that
any defense in any action for specific performance that a remedy at law would be
adequate is waived.
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Section 8.15 Halcyon Representative.
(a) Except as otherwise expressly provided in this Agreement, each Halcyon
Party hereby irrevocably makes, constitutes, and appoints Halcyon Employees LP
as the representative, agent and true and lawful attorney in fact of and for
such Halcyon Party in connection with the Transaction Documents and the
Transaction, effective until the Closing or the termination of this Agreement in
accordance with its terms, as applicable, (such representative, solely in its
capacity as representative, agent, and attorney in fact for the Halcyon Parties,
the "Halcyon Representative"). Each Halcyon Party hereby authorizes and empowers
the Halcyon Representative, until the Closing or the termination of this
Agreement in accordance with its terms, as applicable, to make or give any
approval, waiver, amendment, request, consent, instruction or other
communication on behalf of such Halcyon Party as such Halcyon Party could do for
itself, including with respect to the amendment of any provision of any
Transaction Document (or any schedule thereto). Each Halcyon Party authorizes
and empowers the Halcyon Representative, until the Closing or the termination of
this Agreement in accordance with its terms, as applicable, to receive all
demands, notices or other communications directed to such Halcyon Party under
any Transaction Document. Each Halcyon Party authorizes and empowers the Halcyon
Representative, until the Closing or the termination of this Agreement in
accordance with its terms, as applicable, to (i) take any action (or to
determine to refrain from taking any action) with respect thereto as the Halcyon
Representative may deem appropriate as effectively as if such Halcyon Party had
taken such action itself (including the settlement or compromise of any dispute
or controversy), which action will be binding on such Halcyon Party and (ii)
execute and deliver all instruments and documents of every kind incident to the
foregoing with the same effect as if such Halcyon Party had executed and
delivered such instruments and documents personally. Accordingly, any demands,
notices or other communications directed to such Halcyon Party hereunder prior
to the Closing or the termination of this Agreement in accordance with its
terms, as applicable, shall be deemed effective if given to the Halcyon
Representative. Each Halcyon Party agrees to be bound by all actions and
failures to act of the Halcyon Representative in accordance with the provisions
of any Transaction Document, including in connection with any settlement or
compromise entered into by the Halcyon Representative on behalf of such Halcyon
Party.
(b) A successor Halcyon Representative may be appointed by the Halcyon
Parties, but such appointment will not be effective until such successor shall
agree in writing to accept such appointment and notice of the selection of such
successor Halcyon Representative is provided to AAMAC.
(c) The Halcyon Representative shall have no liability to any Halcyon
Party, Halcyon Entity, AAMAC or AAMAC Founder for any action taken or omitted to
be taken hereunder, unless such liability is determined by a judgment or a court
of competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the Halcyon Representative. Notwithstanding anything else herein
to the contrary, each Halcyon Party shall defend, indemnify and hold harmless
the Halcyon Representative from and against, and shall reimburse the Halcyon
Representative for any and all losses, damages, costs and expenses (including
reasonable attorney's fees and costs of investigation) arising out of or in
connection with, the performance by the Halcyon Representative of its duties and
obligations pursuant to this
48
Agreement unless such liability is determined by a judgment or a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the Halcyon Representative.
[ remainder of this page intentionally left blank ]
49
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties hereto as of the date first above written.
ALTERNATIVE ASSET MANAGEMENT
ACQUISITION CORP, INC.:
By:
-------------------------------------------
Name:
Title:
HALCYON MANAGEMENT GROUP LLC:
By:
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Authorized Person
HALCYON PARTNERS LP:
By: HALCYON PARTNERS GP LLC, its
general partner
By:
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Authorized Person
HALCYON EMPLOYEES LP, solely in its
capacity as the Halcyon Representative:
By: HALCYON EMPLOYEES GP LLC, its
general partner
By:
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Authorized Person
HALCYON ASSET MANAGEMENT LLC:
By:
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Operating Officer and
Managing Principal
HALCYON OFFSHORE ASSET MANAGEMENT LLC:
By:
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Operating Officer and
Managing Principal
HALCYON STRUCTURED ASSET MANAGEMENT LP:
By:
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Operating Officer and
Managing Principal
HALCYON ASSET-BACKED ADVISORS LP:
By:
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Operating Officer and
Managing Principal
HALCYON LOAN INVESTORS LP:
By:
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Operating Officer and
Managing Principal
Exhibit A
Reorganization Steps
1. Each holder of Equity Interests in a Halcyon Entity, other than ▇▇▇▇
▇▇▇▇▇▇▇▇ (a "Halcyon Equity Holder"), shall contribute all such Equity
Interests to Halcyon in exchange for Class A Interests and Class B
Interests in a fixed proportion in accordance with the relative value of
their contributions, such that the total number of Class A Interests
issued shall be 49,170,000 and the total number of Class B Interests
issued shall be 46,924,648.
2. Thereafter, each Halcyon Equity Holder shall contribute to the Halcyon
Partner Vehicle all of its Class A Interests and Class B Interests of
Halcyon in exchange for a limited partner interest in the Halcyon Partner
Vehicle.
3. Halcyon shall issue a Class C Profits Interest to Halcyon Employees LP.
Halcyon Employees LP will not be required to make any capital contribution
with respect to such interest.
If not materially more adverse to AAMAC, Halcyon may also create a second
vehicle into which Halcyon Equity Holders will contribute their Equity Interests
in order to segregate different income sources. In this event, corresponding
changes will be made to the Additional Agreements as applicable.
A-1
Exhibit B
Definitions
1.1 Defined Terms. The following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and the plural
forms of the terms defined):
"AAMAC" has the meaning set forth in the preamble to this Agreement.
"AAMAC Audited Financial Statements" has the meaning set forth in
Section 5.8(a).
"AAMAC Common Stock" means the common stock, $0.0001 par value per
share, of AAMAC after giving effect to the amendment of AAMAC's
Certificate of Incorporation as provided in the Proxy Statement.
"AAMAC Contracts" has the meaning set forth in Section 5.12(a).
"AAMAC Disclosure Statement" means the AAMAC Disclosure Statement
dated as of the date hereof and delivered by AAMAC herewith.
"AAMAC Financial Statements" has the meaning set forth in Section
5.8(a).
"AAMAC Founders" means Hanover Overseas Limited, STC Investment
Holdings LLC, Solar Capital, LLC, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇ and Jakal
Investments, LLC.
"AAMAC Founders' Shares" means the 10,350,000 shares of AAMAC Common
Stock owned by the AAMAC Founders.
"AAMAC Material Adverse Effect" means any fact, circumstance, change
or effect that, individually or in the aggregate, has or is reasonably
likely to have a material adverse effect on (x) the ability of AAMAC to
consummate the Transaction or (y) the financial condition or results of
operations of AAMAC, taken as a whole; provided, however, that no facts,
circumstances, changes or effects (by themselves or when aggregated with
any other facts, circumstances, changes or effects) resulting from,
relating to, or arising out of the following shall be deemed to be or
constitute an AAMAC Material Adverse Effect, and no facts, circumstances,
changes or effects resulting from, relating to or arising out of the
following (by themselves or when aggregated with any other facts,
circumstances, changes or effects) shall be taken into account when
determining whether a AAMAC Material Adverse Effect has occurred or may,
would or could occur: (i) the effect of any change in the United States or
foreign economies which does not disproportionately affect AAMAC relative
to special-purpose acquisition companies generally; (ii) the effect of any
change that generally affects special-purpose acquisition companies which
does not disproportionately affect AAMAC relative to special-purpose
acquisition companies generally; (iii) the effect of any change arising in
connection with any international or national calamity, commencement,
continuation or escalation of a war, armed hostilities or act of terrorism
which does not
B-1
disproportionately affect AAMAC relative to special-purpose acquisition
companies generally; (iv) the effect of any changes in applicable Laws;
(v) any effect resulting directly and solely from the public announcement
of this Agreement or (vi) any change in the market price or trading volume
of AAMAC securities (it being understood that for purposes of this clause
(vi), the facts and circumstances giving rise to any such matters may be
deemed to constitute and may be taken into account in determining whether
there has been an AAMAC Material Adverse Effect).
"AAMAC Plan" means the long term incentive program for Halcyon
officers, directors, employees and consultants, having the terms and
conditions set forth on Exhibit H and in the form approved by AAMAC and
the Halcyon Representative.
"AAMAC Preferred Stock" means the Series A Voting Preferred Stock,
$0.0001 par value per share, of AAMAC.
"AAMAC SEC Reports" has the meaning set forth in Section 5.19(a).
"AAMAC Stockholders" means holders of AAMAC Common Stock.
"AAMAC Stockholders' Meeting" has the meaning set forth in Section
6.2(b).
"AAMAC Tax Returns" has the meaning set forth in Section 5.10(a).
"AAMAC Unaudited Financial Statements" has the meaning set forth in
Section 5.8(a).
"AAMAC Warrants" means warrants to purchase shares of AAMAC Common
Stock issued by AAMAC as set forth in Section 5.7 of the AAMAC Disclosure
Statement.
"Acquisition Proposal" means:
(i) with respect to the Halcyon Parties, other than the transactions
contemplated by this Agreement, any offer, proposal or inquiry relating
to, or any third party indication of interest in, any acquisition or
purchase, direct or indirect, of 50% or more of the consolidated assets of
the Halcyon Entities or over 50% of any class of equity or voting
securities of one or more Halcyon Entities which collectively hold 50% or
more of the consolidated assets of the Halcyon Entities, (ii) any tender
offer (including a self-tender offer) or exchange offer that, if
consummated, would result in such third party beneficially owning 50% or
more of any class of equity or voting securities of one or more Halcyon
Entities which collectively hold 50% or more of the consolidated assets of
the Halcyon Entities or (iii) a merger, consolidation, share exchange,
business combination, sale of substantially all the assets,
reorganization, recapitalization, liquidation, dissolution or other
similar transaction involving Halcyon Entities whose assets, individually
or in the aggregate, constitute more than 50% of the consolidated assets
of the Halcyon Entities; or
(ii) with respect to AAMAC, other than the transactions contemplated
by this Agreement, (A) any offer, proposal or inquiry relating to, or any
third party indication of
B-2
interest in, any acquisition or purchase, direct or indirect, of 50% or
more of the consolidated assets of AAMAC or over 50% of any class of
equity or voting securities of AAMAC, (B) any tender offer (including a
self-tender offer) or exchange offer that, if consummated, would result in
such third party beneficially owning 50% or more of any class of equity or
voting securities of AAMAC, (C) a merger, consolidation, share exchange,
business combination, sale of substantially all the assets,
reorganization, recapitalization, liquidation, dissolution or other
similar transaction involving AAMAC; or (D) an Initial Business
Combination.
"Action" means any legal, administrative, governmental or regulatory
proceeding or other action, suit, proceeding, claim, arbitration,
mediation, alternative dispute resolution procedure, inquiry or
investigation by or before any arbitrator, mediator, court or other
Governmental Entity.
"Additional Agreements" shall mean the employee agreements to be
entered into on terms consistent with the term sheet attached hereto as
Exhibit E for the persons set forth on Section 3.1(i) of the Halcyon
Disclosure Statement, the AAMAC Plan to be entered into on terms
consistent with the summary of material terms attached hereto as Exhibit
H, the Exchange and Support Agreement to be entered into on terms
consistent with the term sheet attached hereto as Exhibit I, the AAMAC
Shareholders' Agreement to be entered into on terms consistent with the
summary of material terms attached hereto as Exhibit J, the Halcyon
Operating Agreement to be entered into on terms consistent with the term
sheet attached hereto as Exhibit D, and the AAMAC Preferred Stock
Certificate of Designations to be adopted on terms consistent with the
form of Certificate of Designation attached hereto as Exhibit G.
"Advisers Act" has the meaning set forth in Section 4.1(c).
"Affiliate" means (a) with respect to a particular individual: (i)
each member of such individual's Family (as defined below in this
definition); (ii) any Person that is directly or indirectly controlled (as
defined below in this definition) by such individual or one or more
members of such individual's Family; and (iii) any Person with respect to
which such individual or one or more members of such individual's Family
currently serves or has previously served as a director, officer,
employee, partner, member, manager, executor, or trustee (or in a similar
capacity).
(b) with respect to a specified Person other than an individual, any
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person
specified.
For purposes of this definition, (a) "control" of a Person will mean
the possession, directly or indirectly, of the power to direct or cause
the direction of its management or policies, whether through the ownership
of voting securities, by Contract or otherwise; and (b) the "Family" of an
individual includes (i) the individual, (ii) the individual's spouse,
(iii) any other natural person who is a child, sibling or parent of the
individual or the individual's spouse, and (iv) any other natural person
who resides with such individual.
B-3
"Agreement" means this Purchase Agreement, as the same may be
amended, modified or supplemented from time to time in accordance with its
terms.
"Business" means the business and operations of the Halcyon Entities
as conducted on the date hereof.
"Business Day" means a day on which banks and stock exchanges are
open for business in New York (excluding Saturdays, Sundays and public
holidays).
"Business Intellectual Property" means intellectual property,
trademarks, service marks, trade names, know-how, trade secrets,
copyrights and similar intellectual property rights used or required to
conduct the Business in the ordinary course of business.
"Cash Consideration" has the meaning set forth in Section 2.1(b).
"Change in Recommendation" means, the failure of AAMAC's board of
directors to make or reaffirm at the Halcyon Representative's request, or
the withdrawal of, or modification in a manner adverse to the other party
of, the recommendation of AAMAC's board of directors to AAMAC's
stockholders referred to in Section 6.2(d); any action by AAMAC's board of
directors to approve, endorse, recommend, or propose to approve, endorse
or recommend, any Acquisition Proposal other than the Transaction, or any
letter of intent, agreement in principle, merger agreement, acquisition
agreement, option agreement or other similar agreement relating to any
such Acquisition Proposal.
"Claim" has the meaning set forth in Section 6.13.
"Closing" has the meaning set forth in Section 2.4(a).
"Closing Date" means the date and time when the Closing occurs.
"Closing Adjustment" has the meaning set forth in Section 2.1(d).
"Closing Adjustment Shortfall" has the meaning set forth in Section
2.1(b).
"Closing Adjustment Statement" has the meaning set forth in Section
2.3(a).
"Closing Bonus Accrual" means an amount equal to (a) the product of
(i) all bonuses payable with respect to fiscal year 2007 to all persons
employed by the Halcyon Entities during fiscal year 2007, excluding any
persons who are partners of Halcyon Employees LP as of the Closing Date
and (ii) a fraction, the numerator of which is the number of days between
the January 1 immediately preceding the Closing Date and the Closing Date,
and the denominator of which is the number of days in the fiscal year in
which the Closing Date occurs, or (b) such other bonus accrual amount
mutually agreed by the parties prior to the Closing.
"Code" means the Internal Revenue Code of 1986, as amended.
B-4
"Consents" means all consents, waivers, approvals, requirements,
allowances, novations, authorizations, declarations, filings,
registrations and notifications.
"Contract" means, with respect to any Person, all agreements,
contracts, obligations, commitments and arrangements (whether written or
oral) (a) to which such Person is a party; (b) under which such Person has
any rights; (c) under which such Person has any Liability; or (d) by which
such Person, or any of the assets or properties owned or used by such
Person, is bound, including, in each case, all amendments, modifications
and supplements thereto.
"Conversion Amount" has the meaning set forth in Section 2.1(d).
"December 31, 2007 AAMAC Balance Sheet" has the meaning set forth in
Section 5.8(a).
"Deferred Underwriting Fees" means the amount of underwriting
discounts and commissions earned by the underwriters in AAMAC's initial
public offering but whose payment they have deferred.
"Delivery Date" has the meaning set forth in Section 2.3(a).
"Developed Software" has the meaning set forth in Section 4.21(d).
"DGCL" means the General Corporation Law of the State of Delaware.
"Environmental Law" has the meaning set forth in Section 4.14.
"Equity Securities" means any capital stock, partnership or limited
liability company interest or other equity or voting interest or any
security or evidence of indebtedness convertible into or exchangeable for
any capital stock, partnership or limited liability company interest or
other equity interest, or any right, warrant or option to acquire any of
the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" means any Person, trade or business that, together
with any Halcyon Entity, is or was treated as a single-employer within the
meaning of Section 414(b) or (c) of the Code or Section 4001(b) of ERISA.
"Estimated Closing Adjustment Statement" has the meaning set forth
in Section 2.1(d).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Agreement" means the final and definitive Exchange and
Support Agreement, which shall be consistent with the terms set forth the
in the Exchange and Support Agreement Term Sheet attached hereto as
Exhibit I.
B-5
"Exchangeable Securities" means the Class B Units of Halcyon which
will be exchangeable on a one-to-one basis for AAMAC Common Stock.
"Expenses Shortfall" has the meaning set forth in Section 2.1(d).
"Foreign Plan" has the meaning set forth in Section 4.17(k).
"Founders Performance Warrants" has the meaning set forth in Section
2.2(d).
"FSA" means the United Kingdom Financial Services Authority.
"Fund" means any investment fund or other vehicle for collective
investment (whether open ended or close ended) including, without
limitation, an investment company, a general and limited partnership, a
trust, a commingled fund and any such fund or vehicle dedicated to only
one investor.
"GAAP" means United States generally accepted accounting principles.
"Governmental Entity" means, in any jurisdiction, any (i) federal,
state, local, foreign or international government; (ii) court, arbitral or
other tribunal; (iii) governmental or quasi-governmental authority of any
nature (including any political subdivision, instrumentality, branch,
department, official or entity); or (iv) agency, commission, authority or
body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory or taxing authority or power of
any nature.
"Halcyon" has the meaning set forth in the preamble to this
Agreement.
"Halcyon Disclosure Statement" means the Halcyon Disclosure
Statement dated as of the date hereof and delivered by the Halcyon
Representative herewith.
"Halcyon Entities" has the meaning set forth in the Recitals to this
Agreement.
"Halcyon Financial Statements" has the meaning set forth in Section
4.7(a).
"Halcyon Funds" means the Funds listed in Section 4.20(b)(v) of the
Halcyon Disclosure Statement and any new Fund for which any of the Halcyon
Entities provides management or advisory, investment management or
advisory, sub management or advisory or sub investment management or
advisory services or acts as operator, manager, adviser, investment
manager, investment adviser, sub operator, sub manager, sub adviser, sub
investment manager or sub investment adviser.
"Halcyon Insurance Policies" has the meaning set forth in Section
4.18(a).
"Halcyon Leased Premises" has the meaning set forth in Section
4.11(c).
"Halcyon Material Adverse Effect" means any fact, circumstance,
change or effect that, individually or in the aggregate, has or is
reasonably likely to have a material
B-6
adverse effect on (x) the ability of the Halcyon Entities to consummate
the Transaction or (y) the financial condition or results of operations of
the Halcyon Entities, taken as a whole; provided, however, that no facts,
circumstances, changes or effects (by themselves or when aggregated with
any other facts, circumstances, changes or effects) resulting from,
relating to or arising out of the following shall be deemed to be or
constitute a Halcyon Material Adverse Effect, and no facts, circumstances,
changes or effects resulting from, relating to or arising out of the
following (by themselves or when aggregated with any other facts,
circumstances, changes or effects) shall be deemed to be, constitute, or
be taken into account when determining whether there has or may, would, or
could have occurred a Halcyon Material Adverse Effect: (i) the effect of
any change in the United States or foreign economies, capital markets or
political conditions in general to the extent that it does not
disproportionately affect the Halcyon Entities taken as a whole, relative
to other participants in the industries in which the Halcyon Entities
operate; (ii) the effect of any change that generally affects any industry
or market in which the Halcyon Entities operate to the extent that it does
not disproportionately affect, individually or in aggregate, the Halcyon
Entities taken as a whole, relative to other participants in the
industries in which the Halcyon Entities operate; (iii) the effect of any
change arising in connection with any international or national calamity,
commencement, continuation or escalation of a war, armed hostilities or
act of terrorism which does not disproportionately affect the Halcyon
Entities, taken as a whole, relative to other participants in the
industries in which the Halcyon Entities operate; (iv) the effect of any
changes in applicable Laws or GAAP; (v) any effect resulting from the
public announcement of, pendency of or consummation of the transactions
contemplated by this Agreement, including the seeking of client consents,
or the identity of AAMAC as the acquiror of the Halcyon Entities; (vi) the
taking of any action contemplated by this Agreement (including the
Reorganization); (vii) any notice of redemptions from any Halcyon Fund
unless the investor giving such notice has actually completed such
redemption; and (viii) any matter disclosed on the Halcyon Disclosure
Statement.
"Halcyon Material Contracts" means all pending or currently in force
Contracts to which a Halcyon Entity is party as of the date hereof:
(a) relating to capital expenditures which provide for
payments from the Halcyon Entities of $100,000 or more during any
year;
(b) concerning a joint venture, joint development or other
cooperation arrangement, other than funds formed as partnership in
which a Halcyon Entity is the general partner;
(c) relating to or evidencing Indebtedness for borrowed money
of the Halcyon Entities in excess of $500,000, other than as a
result of an interest in a Halcyon Fund;
(d) all Contracts for the purchase or sale of property, or for
the furnishing or receipt of services, including customer, supply or
consulting Contracts and placement agent Contracts, which provide
for payment to or from
B-7
the Halcyon Entities of $3,000,000 or more during the 12 month
period ended December 31, 2007;
(e) all Contracts which limit the ability of any of the
Halcyon Entities to compete in any line of business or with any
Person or in any geographic area or which limit or restrict the
ability of the Halcyon Entities with respect to the development,
marketing, sale or distribution of, or other rights with respect to,
any products or services.
(f) that create, establish or define the terms and conditions
of, govern the transfer, voting, economic or other rights of holders
of, or otherwise relate to Equity Securities issued by any of the
Halcyon Entities, including the Organizational Documents of the
Halcyon Entities;
(g) under which the Halcyon Entities have made any outstanding
advance, loan or extension of credit to employees of the Halcyon
Entities in excess of $1,000,000, other than arrangements with
respect to corporate credit cards or the advancement of expenses in
the ordinary course of business;
(h) which (x) provide for the payment of performance,
management or transaction fees to any of the Halcyon Entities for
investment management services provided to investment funds and
managed accounts managed by any of the Halcyon Entities and (y)
resulted in payments of such fees to the Halcyon Entities, in
respect of any such Contract, in excess of $1,000,000 in the
aggregate during the 12 month period ended December 31, 2007; and
(i) for the purchase or sale of any business, corporation,
partnership, joint venture, association or other business
organization or any division, material assets, material operating
unit or material product line thereof, which purchase or sale has
not yet been consummated.
"Halcyon Note" has the meaning set forth in Section 2.1(b).
"Halcyon Parties" has the meaning set forth in the preamble of this
Agreement.
"Halcyon Partner Vehicle" has the meaning set forth in the preamble
of this Agreement.
"Halcyon Permits" has the meaning set forth in Section 4.16.
"Halcyon Plans" has the meaning set forth in Section 4.17(b).
"Halcyon Representative" has the meaning set forth in Section
8.15(a).
"Halcyon Tax Returns" has the meaning set forth in Section 4.9(a).
"Halcyon U.S. Plans" has the meaning set forth in Section 4.17(b).
B-8
"Hazardous Materials" has the meaning set forth in Section 4.14.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"IMA" has meaning set forth in Section 4.20(b).
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(a) the principal of, interest on and premium (if any) in
respect of indebtedness of such Person for borrowed money;
(b) the principal of, interest on and premium (if any) in
respect of obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(c) the principal component of all obligations of such Person
in respect of letters of credit, bankers' acceptances or other
similar instruments (including reimbursement obligations with
respect thereto except to the extent such reimbursement obligation
relates to a trade payable and such obligation is satisfied within
90 days of incurrence);
(d) capitalized lease obligations of such Person;
(e) the principal component of all obligations of such Person
to pay the deferred and unpaid purchase price of property (except
trade payables); and
(f) the principal component of Indebtedness of other Persons
to the extent guaranteed by such Person.
Notwithstanding the foregoing, "Indebtedness" does not include:
(A) contingent obligations incurred in the ordinary course of
business and not in respect of borrowed money;
(B) deferred or prepaid revenues;
(C) purchase price holdbacks in respect of a portion of the purchase
price of an asset to satisfy warranty or other unperformed obligations of
a Halcyon Entity;
(D) any obligations to make progress or incentive payments or risk
money payments under any contract to the extent not overdue by more than
90 days;
(E) the effects of SFAS No. 133 and related interpretations to the
extent such effects would otherwise increase or decrease an amount of
Indebtedness for any purpose under the Indebtedness as a result of
accounting for any embedded derivatives created by the terms of such
Indebtedness;
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(F) advance payments by customers in the ordinary course of business
for services or products to be provided or delivered in the future; or
(G) deferred Taxes.
"Initial Business Combination" has the meaning set forth in Section
6.13.
"Investment" of a Person means (i) any loan, advance (other than
commission, travel and similar advances to officers and employees made in
the ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary
in the trade and loans to employees in the ordinary course of business) or
contribution of capital by such Person; (ii) equity securities owned by
such Person; (iii) any deposit accounts and certificates of deposit owned
by such Person; and (iv) structured notes, derivative financial
instruments and other similar instruments or contracts owned by such
Person.
"IPO" has the meaning set forth in Section 6.13.
"knowledge" means (a) with respect to the Halcyon Entities, the
actual knowledge of each of the Persons set forth on Section 1.3(a) of the
Halcyon Disclosure Statement; and (b) with respect to AAMAC, the actual
knowledge of each of the Persons set forth on Section 1.3(b) of the AAMAC
Disclosure Statement.
"Laws" means all laws, principles of common law, statutes,
constitutions, treaties, rules, regulations, ordinances, codes, rulings,
Orders, licenses and determinations of all Governmental Entities.
"Liability" means any and all claims, debts, liabilities,
obligations and commitments of whatever nature, whether known or unknown,
asserted or unasserted, fixed, absolute or contingent, matured or
unmatured, accrued or unaccrued, liquidated or unliquidated or due or to
become due, and whenever or however arising (including those arising out
of any Contract or tort, whether based on negligence, strict liability or
otherwise) and whether or not the same would be required by GAAP to be
reflected as a liability in financial statements or disclosed in the notes
thereto.
"Lien" means any charge, "adverse claim" (as defined in Section
8-102(a)(1) of the Uniform Commercial Code) or other claim, community
property interest, condition, equitable interest, lien, encumbrance,
option, proxy, pledge, security interest, mortgage, right of first
refusal, right of first offer, retention of title agreement, defect of
title or restriction of any kind or nature, including any restriction on
use, voting, transfer, receipt of income or exercise of any other
attribute of ownership.
"Managed Accounts" means the managed accounts listed on Section
4.20(b)(v) of the Halcyon Disclosure Statement and any new managed account
for which any of the Halcyon Entities provides management, investment
management, sub management or sub investment management services or acts
as operator, manager, investment manager, sub operator, sub manager or sub
investment manager.
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"Notice of Disagreement" has the meaning set forth in Section
2.3(b).
"Operating Working Capital Amount" has the meaning set forth in
Section 2.2(a).
"Order" means any award, decision, stipulation, injunction,
judgment, order, ruling, subpoena, writ, decree or verdict entered,
issued, made, or rendered by any Governmental Entity.
"Organizational Documents" means, with respect to any Person, its
certificate or articles of incorporation, its by-laws, its memorandum and
articles of association, its limited liability company agreement or
operating agreement, its certificate of formation, its partnership or
limited partnership agreement, its trust indenture or agreement or other
documentation governing the organization or formation of such Person, but
not any shareholder, registration rights, subscription or other Contract
to which such Person may become a party after its formation or
organization.
"Other Filings" has the meaning set forth in Section 6.2(a).
"Parties" has the meaning set forth in the Recitals of this
Agreement.
"Permits" means all Consents, licenses, permits, certificates,
variances, exemptions, franchises and other approvals issued, granted,
given, required or otherwise made available by any Governmental Entity.
"Permitted Liens" means, with respect to any Person, Liens for (a)
Taxes, assessments and other governmental charges, if such Taxes,
assessments or charges shall not be due and payable or which the Person is
contesting in good faith and for which adequate reserves have been
established; (b) inchoate workmen's, repairmen's or other similar Liens
arising or incurred in the ordinary course of business in respect of
obligations which are not overdue; (c) minor title defects, recorded
easements, and zoning, entitlement or other land use or environmental
regulation, which minor title defects, recorded easements and regulations
do not, individually or in the aggregate, impair the continued use,
occupancy, value or marketability of title of the property to which they
relate or the Business, assuming that the property is used on
substantially the same basis as such property is currently being used by
the Halcyon Entities; (d) which are disclosed or reserved against in the
Halcyon Financial Statements; or (e) which was incurred in the ordinary
course of business since December 31, 2007.
"Permitted Transfer Restrictions" means restrictions on transfer of
Equity Securities or other securities under (i) the Securities Act of
1933, and any other Law that may apply to a transfer of securities
contemplated by this Agreement, (ii) the Transaction Documents, and (iii)
the Organizational Documents of the Halcyon Parties and AAMAC.
"Person" means any individual, sole proprietorship, firm,
corporation (including any non-profit corporation and public benefit
corporation), general or limited partnership, limited liability
partnership, joint venture, limited liability company, estate, trust,
association, organization, labor union, institution, entity or
Governmental Entity, including any successor (by merger or otherwise) of
such entity.
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"Pre-Closing Fee Amount" shall mean an amount equal to the
management fees, performance fees and incentive allocations, and other
fees accrued but unpaid as of the Closing. For purposes hereof, the
Pre-Closing Fee Amount will include, with respect to the performance fees
and incentive allocations from each client account, (i) all performance
fees and incentive allocations earned by the Halcyon Entities for any
period ending on or prior to the Closing Date, (ii) for any period
including, but ending after, the Closing Date, the lesser of (a) all
performance fees and incentive allocations earned by the Halcyon Entities
during such period and (b) a pro forma amount of all performance fees and
incentive allocations earned between the January 1 immediately preceding
the Closing Date and the Closing Date, (iii) all performance fees and
incentive allocations earned and deferred prior to the Closing Date
(including indexation adjustments through the payment date).
"Preferred Shares Issuance" has the meaning set forth in Section
2.1(b).
"Proxy Statement" means the proxy statement AAMAC sends to the AAMAC
Stockholders for purposes of soliciting proxies for the AAMAC
Stockholders' Meeting, as provided in Section 6.2(e).
"Purchased Units" means 49,170,000 Class A Units of Halcyon.
"Release" has the meaning set forth in Section 101(22) of the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended.
"Reorganization" has the meaning set forth in the Recitals of this
Agreement.
"Reorganization MOU" means the signed memorandum of understanding
with the holders of equity interests in the Halcyon Entities.
"Representatives" means, with respect to any Person, such Person's
Affiliates, directors, officers, employees, agents, consultants, advisors
and other representatives, including legal counsel, accountants and
financial advisors.
"Requisite Stockholder Approval" means the approval of the
Transaction and all other Voting Matters, by the AAMAC Stockholders
holding the number of shares of AAMAC Common Stock required under the DGCL
and AAMAC's Organizational Documents to authorize and approve such Voting
Matters; provided that the Requisite Stockholder Approval shall be deemed
to have occurred only if holders of 30% or more of the shares of AAMAC
Common Stock that were issued in AAMAC's initial public offering vote
against the Transaction and properly elect conversion of their shares.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act" means the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the
rules and regulations of the SEC thereunder.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
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"Shareholders' Agreement" means the final and definitive
Shareholders' Agreement, which shall be consistent with the terms set
forth the in the Shareholders' Agreement Term Sheet attached hereto as
Exhibit J.
"Shortfall" has the meaning set forth in Section 2.1(d).
"Specified Assets" means all current assets (including deferred fees
whenever due) of the Halcyon Entities on a consolidated basis (excluding
any consolidation between any Halcyon investment vehicle and its general
partner or management company), other than (a) cash and cash equivalents
and (b) items set forth in the definition of the Pre-Closing Fee Amount.
"Specified Liabilities" means, without duplication and on a
consolidated basis (excluding any consolidation between any Halcyon
investment vehicle and its general partner or management company), (a)
current liabilities of the Halcyon Entities in respect of goods previously
delivered or services previously rendered by persons other than employees
of any Halcyon Entity, (b) payment obligations of the Halcyon Entities due
and in arrears, (c) overdue payroll obligations of the Halcyon Entities,
and (d) CLO fee rebates owed by the Halcyon Entities to the Halcyon Funds;
provided, that Specified Liabilities shall exclude (i) any Transaction
Expenses of the Halcyon Parties or the Halcyon Entities and (ii) any
contingent liabilities, obligations to pay performance fees to Persons who
are holders of Equity Interests in Halcyon Entities, and bonus
obligations.
"Subsidiary" means, with respect to any party, any corporation,
partnership, association, trust or other form of legal entity of which
more than 50% of the outstanding equity securities are on the date hereof
directly or indirectly owned by such party; provided that no Person will
be considered to be a Subsidiary of such Person's general partner by
virtue of such general partnership interest.
"Taxes" or "Tax" means all federal, national, state, province, local
and foreign taxes, charges, duties, fees, levies or other assessments,
including without limitation income, excise, property, sales, use, gross
receipts, recording, insurance, value added, profits, license,
withholding, payroll, employment, capital stock, customs duties, net
worth, windfall profits, capital gains, transfer, registration, estimated,
stamp, social security, environmental, occupation, franchise or other
taxes of any kind whatsoever, imposed by any Governmental Entity, and all
interest, additions to tax penalties and other similar amounts imposed
thereon.
"Tax Return" means, with respect to any Person, all federal,
national, state, province, local and foreign Tax returns, reports,
declarations, statements and other documentation, including any schedule
or attachment thereto, required to be filed by or on behalf of such Person
(or any predecessor) or any consolidated, combined, affiliated or unitary
group of which such Person is or has been a member (but only with respect
to taxable periods during which such Person is a member thereof),
including information returns required to be provided to any payee or
other Person.
"Termination Date" means March 12, 2009.
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"Transaction" means the transactions contemplated by the Transaction
Documents.
"Transaction Documents" means this Agreement, including all
Schedules and Exhibits hereto, as modified by the Halcyon Disclosure
Statement and the AAMAC Disclosure Statement; and the Voting Agreement;
provided, that upon execution and delivery of any Additional Agreement by
all parties thereto based on a term sheet attached to this Agreement, such
Additional Agreement shall supersede such term sheet and shall become a
Transaction Document.
"Transaction Expenses" means, with respect to AAMAC, the Halcyon
Parties and the Halcyon Entities, (i) any and all fees and out-of-pocket
costs and expenses of such Person (for the avoidance of doubt, in the case
of the Halcyon Parties, including any reimbursement obligations to
partners or members of the Halcyon Entities) and any counsel, accountants,
investment bankers and other professional advisors engaged by such Person,
in connection with the Transaction (excluding any such fees, costs or
expenses of AAMAC incurred in connection with the formation of AAMAC, any
registration or listing of AAMAC securities other than pursuant to Section
6.12, the initial public offering and the deferred underwriting fees in
connection therewith, or discussions, negotiations or due diligence with
respect to any party other than the Halcyon Entities); (ii) any Liability
of the Halcyon Parties or the Halcyon Entities for payments to any other
Person to obtain any consent, release, approval, waiver or other
authorization required in order to consummate the Transaction; (iii) any
mailing costs of the Proxy Statement and related expenses for calling and
holding the AAMAC Stockholders' Meeting or filing fee payable under
securities Laws or the HSR Act or other antitrust or competition Law for
any report or other filing required to be made in connection with the
Transaction; (iv) with respect to the Halcyon Entities, all fees and
expenses incurred in the preparation of GAAP financials that are compliant
with the rules and regulations of the SEC; (v) any Liability of AAMAC for
payments of the legal or advisory expenses of the AAMAC Founders to amend
or enter into any agreement with such AAMAC Founders as may be required
under this Agreement, including the Transaction Documents.
"Trust Account" has the meaning set forth in Section 6.13.
"Unaffiliated Firm" means such internationally recognized firm of
accountants as AAMAC and the Halcyon Partner Vehicle may, acting
reasonably, agree upon in writing.
"Voting Agreement" means the Voting and Support Agreement dated as
of the date hereof among Halcyon, the Halcyon Partner Vehicle and the
AAMAC Founders.
"Voting Matters" has the meaning set forth in Section 6.2(a).
1.2 Rules of Construction. The following rules shall apply to the
interpretation of this Agreement:
(a) The Parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the Parties and no presumption or
B-14
burden of proof shall arise favoring or disfavoring any Party by virtue of
the authorship of any of the provisions of this Agreement.
(b) Any reference to any federal, state, local, or foreign Law shall
be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise, and shall be deemed to
refer to any such Law as amended and in effect at any time.
(c) For the purposes of this Agreement and the Schedules and
Exhibits to this Agreement, (i) words in the singular will include the
plural and vice versa and words of one gender will include the other
gender as the context requires, (ii) the terms "hereof", "herein", and
"herewith" and words of similar import will, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, (iii) the word "including" and words of
similar import will mean "including, without limitation", unless otherwise
specified, (iv) the word "or" will not be exclusive, (v) the phrase "made
available" will mean that the information referred to has been made
available if requested by the Party to whom such information is to be made
available, and (vi) any accounting term will have, unless otherwise
specifically provided herein, the meaning customarily given such term in
accordance with GAAP, and all financial computations will be made, unless
otherwise specifically provided herein, in accordance with GAAP
consistently applied, and all references to GAAP, unless otherwise
specifically provided herein, will be to United States GAAP.
(d) Capitalized terms used in the other Transaction Documents but
not otherwise defined therein will have the respective meanings assigned
to such terms in this Agreement.
(e) A "breach" of a representation, warranty, covenant, obligation
or other provision of this Agreement or any Transaction Document will be
deemed to have occurred if there is or has been any inaccuracy in or
breach of or any failure to perform or comply with, such representation,
warranty, covenant, obligation, or other provision.
(f) The article, section and paragraph captions herein and the table
of contents hereto are for convenience of reference only, do not
constitute part of this Agreement and will not be deemed to limit or
otherwise affect any of the provisions hereof. Unless otherwise specified,
all references herein to numbered Articles and Sections are to Articles
and Sections of this Agreement and all references herein to Exhibits are
to Exhibits to this Agreement.
(g) Unless otherwise specified, all references contained in this
Agreement or in any Transaction Document to "dollars" or "$" will mean
United States Dollars.
(h) Unless otherwise specified, all references to a Contract will
include that Contract as it may be amended, modified, supplemented, waived
or otherwise in effect from time to time.
B-15
