1 EXHIBIT 10.38
_________________________________________________________________
_________________________________________________________________
ASSET PURCHASE AGREEMENT
Dated as of January 15, 1996
By and Among
UNC INCORPORATED
a Delaware corporation
("Buyer's Parent")
UNC/CFC ACQUISITION CO.
a Delaware corporation
("Buyer")
CFC AVIATION SERVICES, L.P.
a Delaware limited partnership
("▇▇▇▇▇▇▇")
CFC AVIATION COMPANY, L.L.C.
("Jet Center")
CFC AVIATION, INC.
a Delaware corporation
("CFC")
CARLISLE ENTERPRISES, L.P.
a Delaware limited partnership
("Carlisle")
FIRST CAPITAL CORPORATION OF CHICAGO
an Illinois corporation
and
CROSS CREEK PARTNERS III
an Illinois general partnership
_________________________________________________________________
_________________________________________________________________
2 TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
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Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
PURCHASE AND SALE OF ASSETS
---------------------------
Section 2.1. Purchase and Sale of Assets . . . . . . . . . . . . . . . 9
Section 2.2. Purchase Price and Payment for Assets . . . . . . . . . . 9
Section 2.3. Assumption of Assumed Obligations . . . . . . . . . . . . 10
Section 2.4. Adjustments to Cash Consideration.. . . . . . . . . . . . 11
Section 2.5. Closing Holdback. . . . . . . . . . . . . . . . . . . . . 13
Section 2.6. Instruments of Transfer . . . . . . . . . . . . . . . . . 14
Section 2.7. Allocation of Purchase Price. . . . . . . . . . . . . . . 14
Section 2.8. Transfer Taxes and Costs. . . . . . . . . . . . . . . . . 14
Section 2.9. Assignment of Contracts and Rights. . . . . . . . . . . . 14
Section 2.10. Compliance with Bulk Transfer Laws. . . . . . . . . . . . 15
Section 2.11. Escrow Agreement. . . . . . . . . . . . . . . . . . . . . 15
Section 2.12. Schedules to Agreement. . . . . . . . . . . . . . . . . . 15
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Section 3.1. Organization and Good Standing. . . . . . . . . . . . . . 16
Section 3.2. Execution and Effect of Agreement . . . . . . . . . . . . 16
Section 3.3. Restrictions. . . . . . . . . . . . . . . . . . . . . . . 17
Section 3.4. Consents. . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 3.5. Financial Statements. . . . . . . . . . . . . . . . . . . 17
Section 3.6. Capitalized Lease Obligations . . . . . . . . . . . . . . 18
Section 3.7. No Undisclosed Liabilities. . . . . . . . . . . . . . . . 18
Section 3.8. Litigation. . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.9. Subsidiaries; Investments . . . . . . . . . . . . . . . . 19
Section 3.10. Real Properties; Absence of Encumbrances. . . . . . . . . 19
Section 3.11. Intellectual Property . . . . . . . . . . . . . . . . . . 21
Section 3.12. Contracts . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.13. AlliedSignal Agreements . . . . . . . . . . . . . . . . . 23
Section 3.14. Guarantees. . . . . . . . . . . . . . . . . . . . . . . . 24
Section 3.15. Employee Benefit and Employment Matters . . . . . . . . . 24
Section 3.16. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . 27
Section 3.17. Environmental Matters . . . . . . . . . . . . . . . . . . 28
Section 3.18. Compliance With Laws. . . . . . . . . . . . . . . . . . . 29
Section 3.19. Licenses and Permits. . . . . . . . . . . . . . . . . . . 29
Section 3.20. Insurance . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.21. Claims of Directors, Officers, Etc. . . . . . . . . . . . 30
Section 3.22. Extraordinary Transactions. . . . . . . . . . . . . . . . 30
Section 3.23. ▇▇▇▇▇▇ and Finder Fees. . . . . . . . . . . . . . . . . . 31
Section 3.24. Assets. . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.25. Related Party Transactions. . . . . . . . . . . . . . . . 32
Section 3.26. No Adverse Change or Conditions . . . . . . . . . . . . . 32
Section 3.27. Product and Service Warranty. . . . . . . . . . . . . . . 32
Section 3.28. Interstate Commerce Act . . . . . . . . . . . . . . . . . 32
Section 3.29. Adequate Disclosure . . . . . . . . . . . . . . . . . . . 33
3
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND BUYER'S PARENT
----------------------------------------------------------
Section 4.1. Organization and Good Standing. . . . . . . . . . . . . . 33
Section 4.2. Execution and Effect of Agreement . . . . . . . . . . . . 33
Section 4.3. Restrictions. . . . . . . . . . . . . . . . . . . . . . . 34
Section 4.4. No Consents . . . . . . . . . . . . . . . . . . . . . . . 34
Section 4.5. No Broker . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 4.6. UNC Status. . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE V
PRE-CLOSING COVENANTS AND AGREEMENTS OF SELLER AND CFC
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Section 5.1. Status. . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.2. Access to Information . . . . . . . . . . . . . . . . . . 34
Section 5.3. Conduct of Business to Closing. . . . . . . . . . . . . . 35
Section 5.4. Consents. . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 5.5. Certain Employee Benefit Matters. . . . . . . . . . . . . 37
Section 5.6. Public Statements . . . . . . . . . . . . . . . . . . . . 37
Section 5.7. Update of Disclosure. . . . . . . . . . . . . . . . . . . 37
Section 5.8. H-S-R Act Filings . . . . . . . . . . . . . . . . . . . . 38
Section 5.9. Employee Matters. . . . . . . . . . . . . . . . . . . . . 38
Section 5.10. Financial Statements. . . . . . . . . . . . . . . . . . . 38
Section 5.11. Closing Conditions. . . . . . . . . . . . . . . . . . . . 40
ARTICLE VI
PRE-CLOSING COVENANTS AND AGREEMENTS OF BUYER
---------------------------------------------
Section 6.1. Public Statements . . . . . . . . . . . . . . . . . . . . 40
Section 6.2. Consents. . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.3. H-S-R Act Filings . . . . . . . . . . . . . . . . . . . . 40
Section 6.4. Employees . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
--------------------------------------------
Section 7.1. Representations and Warranties True . . . . . . . . . . . 41
Section 7.2. Covenants and Agreements--No Default. . . . . . . . . . . 41
Section 7.3. Certificate . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.4. Employment Agreements . . . . . . . . . . . . . . . . . . 41
Section 7.5. No Material Adverse Change. . . . . . . . . . . . . . . . 41
Section 7.6. Seller Consents/Certain Assurances. . . . . . . . . . . . 42
Section 7.7. Buyer Consents. . . . . . . . . . . . . . . . . . . . . . 42
Section 7.8. No Injunction . . . . . . . . . . . . . . . . . . . . . . 42
Section 7.9. Closing Documents . . . . . . . . . . . . . . . . . . . . 43
Section 7.10. Financing . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 7.11. Due Diligence . . . . . . . . . . . . . . . . . . . . . . 43
Section 7.12. Board Approval. . . . . . . . . . . . . . . . . . . . . . 43
Section 7.13. H-S-R Approval. . . . . . . . . . . . . . . . . . . . . . 43
Section 7.14. Financial Statements. . . . . . . . . . . . . . . . . . . 43
4
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
---------------------------------------------
Section 8.1. Representations and Warranties True . . . . . . . . . . . 44
Section 8.2. Covenants and Agreements--No Default. . . . . . . . . . . 44
Section 8.3. Certificate . . . . . . . . . . . . . . . . . . . . . . . 44
Section 8.4. No Injunction . . . . . . . . . . . . . . . . . . . . . . 44
Section 8.5. Closing Documents . . . . . . . . . . . . . . . . . . . . 45
Section 8.6. H-S-R Approval. . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE IX
CLOSING
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Section 9.1. Closing . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 9.2. Documents to be Delivered by Sellers. . . . . . . . . . . 45
Section 9.3. Documents to be Delivered by Buyer. . . . . . . . . . . . 46
Section 9.4. Fee for Delayed Closing . . . . . . . . . . . . . . . . . 47
ARTICLE X
TERMINATION
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Section 10.1. Right to Terminate Agreement . . . . . . . . . . . . . . 47
Section 10.2. Effect of Termination. . . . . . . . . . . . . . . . . . 49
Section 10.3. Survival of Covenants Following Termination. . . . . . . 52
ARTICLE XI
POST-CLOSING COVENANTS AND AGREEMENTS
-------------------------------------
Section 11.1. Financial Statements/Preservation of and Access to Information
After Closing . . . . . . . . . . . . . . . . . . . . 52
Section 11.2. Employee Benefit Matters . . . . . . . . . . . . . . . . 53
Section 11.3. Survival . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 11.4. Indemnification by Seller. . . . . . . . . . . . . . . . 55
Section 11.5. Indemnification by Buyer . . . . . . . . . . . . . . . . 59
Section 11.6. Confidentiality. . . . . . . . . . . . . . . . . . . . . 60
Section 11.7. Restrictive Covenants of Seller and CFC. . . . . . . . . 61
Section 11.8. Change of Names. . . . . . . . . . . . . . . . . . . . . 63
Section 11.9. Specific Performance and Injunctive Relief . . . . . . . .63
ARTICLE XII
MISCELLANEOUS
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Section 12.1. Power of Attorney. . . . . . . . . . . . . . . . . . . . 64
Section 12.2. Expenses . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 12.3. Entire Agreement . . . . . . . . . . . . . . . . . . . . 64
Section 12.4. Amendment and Waiver . . . . . . . . . . . . . . . . . . 64
Section 12.5. Binding Agreement and Successors . . . . . . . . . . . . 65
Section 12.6. Assignment . . . . . . . . . . . . . . . . . . . . . . . 65
Section 12.7. No Third Party Beneficiaries . . . . . . . . . . . . . . 65
Section 12.8. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 12.9. Further Assurances . . . . . . . . . . . . . . . . . . . 66
5
Section 12.10. Article and Section Headings . . . . . . . . . . . . . . 66
Section 12.11. Governing Law. . . . . . . . . . . . . . . . . . . . . . 67
Section 12.12. Construction . . . . . . . . . . . . . . . . . . . . . . 67
Section 12.13. Counterparts . . . . . . . . . . . . . . . . . . . . . . 67
Section 12.14. Exhibits and Schedules . . . . . . . . . . . . . . . . . 67
SCHEDULES
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Schedule 1.0 Required Consents
Schedule 2.1 Assets
Schedule 2.4 Personal Property Lease Obligations
Schedule 2.7 Allocation of Purchase Price
Schedule 3.3 Restrictions
Schedule 3.4 Seller Consents
Schedule 3.6 Capitalized Lease Obligations
Schedule 3.7 Undisclosed Liabilities
Schedule 3.8 Litigation
Schedule 3.9 Subsidiaries; Investments
Schedule 3.10 Real Properties; Absence of Encumbrances
Schedule 3.11 Intellectual Property
Schedule 3.12 Contracts
Schedule 3.13 AlliedSignal Agreements
Schedule 3.14 Guarantees
Schedule 3.15 Employee Benefit and Employment Matters
Schedule 3.16 Tax Matters
Schedule 3.17 Environmental Matters
Schedule 3.18 Compliance with Laws
Schedule 3.19 Licenses and Permits
Schedule 3.20 Insurance
Schedule 3.21 Claims of Directors, Officers, Etc.
Schedule 3.22 Extraordinary Transactions
Schedule 3.23 Broker and Finder Fees
Schedule 3.24 Assets
Schedule 3.25 Related Party Transactions
Schedule 3.26 Adverse Changes or Conditions
Schedule 3.27 Product and Service Warranty
Schedule 4.4 Buyer Consents
Schedule 4.5 No Broker
Schedule 11.7 Restrictive Covenants of Seller and CFC
6
EXHIBITS
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Exhibit A Description of Business
Exhibit B Form of Assumption Agreement
Exhibit C Form of Employment Agreement
Exhibit Form of Escrow Agreement
Exhibit E Financial Statements
Exhibit F Form of Opinion of Seller's Counsel
Exhibit G-1 Form of Opinion of Buyer's Counsel
Exhibit G-2 Form of Opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
7
ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT (together with the Schedules and Exhibits
hereto, this "Agreement") is made and entered into as of the 15th day of
January, 1996, by and among UNC INCORPORATED, a Delaware corporation with its
principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Buyer's Parent"), UNC/CFC ACQUISITION CO., a Delaware corporation with
its principal place of business at c/o The Corporation Trust Company,
Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Buyer"), CFC AVIATION SERVICES, L.P., a Delaware limited partnership, with
its principal place of business at ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇▇"), CFC AVIATION COMPANY, L.L.C., a Delaware limited
liability company with its principal place of business at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Jet Center") and CFC AVIATION, INC., a Delaware
corporation with its principal place of business at ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("CFC"), CARLISLE ENTERPRISES, L.P., a Delaware
limited partnership with its principal place of business at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Carlisle"), FIRST CAPITAL CORPORATION OF
CHICAGO, an Illinois corporation, and CROSS CREEK PARTNERS III, an Illinois
general partnership, each with its principal place of business at Three First
National Plaza, Chicago, Illinois 60670.
Certain capitalized terms used herein without definition have the
meanings given to such terms in Article I of this Agreement. Unless the
context otherwise requires, all references in this Agreement to "Seller" or
"Sellers" shall be construed to mean each and both of ▇▇▇▇▇▇▇ and Jet Center.
Unless the context otherwise requires, First Capital Corporation of Chicago
and Cross Creek Partners III are collectively referred to herein as "First
Chicago").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Sellers are engaged in the business described on Exhibit A to
this Agreement; and
WHEREAS, subject to the conditions set forth in this Agreement, Buyer
desires to purchase from Sellers, pursuant to and in accordance with the terms
of this Agreement, substantially all of the assets, business, rights and
properties of Sellers and to assume certain of the liabilities and obligations
of Sellers; and
WHEREAS, subject to the conditions set forth in this Agreement, Sellers
desire to sell, assign, transfer and deliver to Buyer, pursuant to and in
accordance with the terms of this Agreement, substantially all of their
assets, business, rights and properties;
WHEREAS, CFC is the corporate general partner of ▇▇▇▇▇▇▇ and the
managing member of Jet Center and desires to enter into this Agreement for the
purpose of making certain covenants and agreements in favor of Buyer;
WHEREAS, ▇▇▇▇▇▇▇▇ and First Chicago have entered into this Agreement
solely for the purpose of making the covenants contained in Section 11.7
hereof; and
WHEREAS, ▇▇▇▇▇'s Parent owns, indirectly, all of the outstanding shares
of capital stock of Buyer and desires to enter into this Agreement for the
purpose of making certain covenants in favor of the Sellers;
8
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements of the parties contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
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Section 1. Certain Definitions. The following terms, when used in
capitalized form in this Agreement, shall have the following meanings:
"Affiliate" shall mean any Person that directly or indirectly controls,
is controlled by, or is under common control with the Person in question. For
purposes of determining whether a Person is an Affiliate, the term "control"
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether
through ownership of securities, contract or otherwise.
"AlliedSignal" shall mean AlliedSignal Inc., a Delaware corporation, and
its Affiliates.
"AlliedSignal Purchase Agreement" shall mean that certain Asset and
Stock Purchase Agreement dated as of May 26, 1994 (and as amended pursuant to
Amendment No. 1 thereto dated as of June 30, 1994), and as amended in the
manner contemplated by Schedule 3.13 to this Agreement, by and between
AlliedSignal and ▇▇▇▇▇▇▇, a true and correct copy of which ▇▇▇▇▇▇▇ has
delivered previously to Buyer together with all agreements related thereto
including, without limitation, a Licensed Proprietary Rights Agreement and
Noncompetition Agreement, true and correct copies of which ▇▇▇▇▇▇▇ has
delivered previously to Buyer.
"Applicable Laws" shall mean any laws, statutes, ordinances, codes,
rules, regulations, standards, rulings, decrees, orders or other requirements
of any Governmental Authority that are applicable to the business, assets or
properties of a Seller.
"ASE Operating Agreement" shall mean that certain Allied- Signal Engine
Division Operating Agreement dated as of June 30, 1994, and as amended in the
manner contemplated by Schedule 3.13 to this Agreement, by and between ▇▇▇▇▇▇▇
and AlliedSignal, a true and correct copy of which ▇▇▇▇▇▇▇ has delivered
previously to Buyer.
"Assets" shall have the meaning set forth in Section 2.1.
"Assumed Obligations" shall have the meaning set forth in Section 2.3.
"Assumption Agreement" shall mean the Assumption Agreement to be
executed and delivered by the Sellers and Buyer at the Closing in the form
attached hereto as Exhibit B.
"Balance Sheet" shall mean the unaudited combined balance sheet of the
Sellers as of October 31, 1995.
"Benefit Arrangements" shall mean all life and health benefits,
hospitalization, savings, bonus, deferred compensation, profit sharing,
incentive compensation, severance pay, disability, sick pay, vacation pay,
9
stock option, award or similar plans, and fringe benefit plans, individual
employment and severance contracts and other policies and practices, whether
written or oral, providing employee or executive compensation or benefits to
Employees or their dependents, other than Employee Benefit Plans.
"Business" shall mean the trade and business of each Seller as conducted
prior to the Closing and as described on Exhibit A to this Agreement.
"Buyer Group" shall mean Buyer, ▇▇▇▇▇'s Parent and any Affiliate of
Buyer or Buyer's Parent.
"Buyer Losses" shall have the meaning set forth in Section 11.4(a).
"Carlisle Affiliates" shall mean Carlisle Enterprises L.P., a Delaware
limited partnership, Carlisle CFC Holding L.P., a Delaware limited
partnership, Carlisle Fiberite Holding L.P., a Delaware limited partnership
and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, individuals
(but specifically excluding ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇).
"Cash Consideration" shall have the meaning set forth in Section 2.2.
"Cash Equivalents" shall mean cash deposit accounts, short-term
commercial paper, and other items commonly understood to constitute cash
equivalents.
"CFC" shall mean CFC Aviation Services, Inc., a Delaware corporation,
the corporate general partner of ▇▇▇▇▇▇▇ and the managing member of Jet
Center.
"Closing" shall mean the consummation of the events described in
ARTICLE IX.
"Closing Balance Sheet" shall mean the audited combined balance sheet
of Sellers as of the Closing Date.
"Closing Date" shall mean the date on which the Closing shall occur.
"Closing Holdback" shall mean the amount of $3,000,000, which shall be
deposited with the Escrow Agent by ▇▇▇▇▇ on the Closing Date pursuant to
Section 2.5 and administered and disbursed by the Escrow Agent as provided in
the Escrow Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Collateral Agreements" shall mean the Escrow Agreement, the Employment
Agreement and the Assumption Agreement.
"Contest" shall mean any administrative or judicial Tax audit,
examination, proceeding or litigation involving any Tax Authority.
"Contested Claim" shall have the meaning set forth in Section 11.4(d).
"Contracts" shall mean all contracts, agreements, leases, arrangements,
commitments or understandings, whether oral or written, express or implied,
executed or executory, now existing or hereafter entered into, to which a
Seller is a party or is otherwise legally bound; provided, however, that
10
"Contracts" shall not include any Benefit Arrangements or Employee Benefit
Plans.
"Definitive Agreement Break-Up Fee" shall mean the amount of $4,000,000
which may become due and payable by Buyer in accordance with the terms of
Section 10.2.
"Delayed Closing Fee" shall mean the amount of $5,000,000, which may
become due and payable by Buyer to the Sellers and CFC, collectively, pursuant
to and in accordance with Section 9.4.
"De Minimus Claim" shall have the meaning set forth in Section 11.5(c).
"DOL" shall mean the United States Department of Labor.
"Employee Benefit Plans" shall mean each "employee benefit plan," as
defined in Section 3(3) of ERISA, maintained or contributed to by Seller or
any of its ERISA Affiliates, which provides benefits to Employees or their
dependents but excluding Multiemployer Plans.
"Employees" shall mean all current employees, former employees and
retired employees of each Seller.
"Employment Agreement" shall mean the Employment Agreement to be
executed and delivered by ▇▇▇▇▇ and ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ at the Closing in the
form attached hereto as Exhibit C.
"Encumbrance" shall mean any interest or equity of any Person,
including, without limitation, any right to acquire, option, right of
preemption, or any mortgage, lease, charge, pledge, lien, encumbrance,
assignment, hypothecation, security interest, title retention, claim,
covenant, condition, easement or any other security agreement or arrangement
or any restriction of any kind or character, except that "Encumbrance" shall
not include liens imposed by law and incurred in the ordinary course of
business for obligations not yet due to carriers, warehousemen, laborers,
materialmen and the like, arising in the ordinary course of the Business and
the assertion of which would not have a Material Adverse Effect on the
Business.
"Environmental Laws" shall mean any laws, statutes, regulations, rules,
orders, consents, decrees, or requirements of any Governmental Authority,
which relate to or otherwise impose liability or standards of conduct
concerning discharges or releases of any pollutants, contaminants or hazardous
or toxic wastes, substances or materials into ambient air, water or land, or
otherwise relating to the manufacture, operation, maintenance, processing,
generation, distribution, use, treatment, storage, disposal, cleanup,
transport or handling of Hazardous Materials, including (but not limited to)
the Comprehensive Environmental Response Compensation and Liability Act of
1980, as amended; the Resource Conservation and Recovery Act of 1978, as
amended; any other so-called "Superfund" or "Superlien" law; the Clean Water
Act, Clean Air Act, or any other similar federal, state or local statutes in
the United States or elsewhere.
"Escrow Agent" shall mean the Bank of America.
"Escrow Agreement" shall mean the Escrow Agreement by and among the
Escrow Agent, Seller and Buyer in the form attached hereto as Exhibit D.
11
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" shall mean any Person that is treated as a single
employer with the Person in question under Section 414(b), (c), (m) or (o) of
the Code.
"Excluded Assets" shall mean (i) all cash, bank accounts and Cash
Equivalents of Seller, and (ii) amounts payable to a Seller (including loans
and intercompany accounts receivables) by CFC or any Affiliate of a Seller.
Notwithstanding the foregoing, an amount payable by one Seller to the other
Seller shall not be an Excluded Asset to the extent that an equal offsetting
liability in respect to such asset is set forth on the Closing Balance Sheet.
"Excluded Liabilities" shall have the meaning set forth in Section
2.3(c).
"Final Net Asset Value" shall mean the total book value of the assets
of Sellers (other than the Excluded Assets) minus the total book value of the
liabilities of Sellers (other than the Excluded Liabilities) as determined in
accordance with Section 2.4(b).
"Financial Statements" shall have the meaning set forth in Section 3.5.
"GAAP" shall mean generally accepted accounting principles in effect in
the United States on the date of this Agreement.
"Governmental Authority" shall mean any government or state (or any
subdivision thereof), whether domestic, foreign or multinational, or any
agency, authority, bureau, commission, department or similar body or
instrumentality thereof, or any governmental court or tribunal.
"Guarantees" shall mean any obligations, contingent or otherwise, of a
Person in respect of any indebtedness, obligation or liability of another
Person, including but not limited to, direct or indirect guarantees,
endorsements (except for collection or deposit in the ordinary course of
business), notes co-made or discounted, recourse agreements, take-or-pay
agreements, keep-well agreements, agreements to purchase or repurchase such
indebtedness, obligation or liability or any security therefor or to provide
funds for the payment or discharge thereof, agreements to maintain solvency,
assets, level of income, or other financial condition, and agreements to make
payment other than for value received.
"Hazardous Materials" shall mean any flammable explosives, radioactive
materials, hazardous waste, toxic substances or related materials, including,
without limitation, asbestos, PCBs, petroleum product, urea-formaldehyde (in
situations where considered hazardous or toxic), radon, and any substances
defined as or included in the definition of (a) any "hazardous waste" as
defined by the Resource Conservation and Recovery Act of 1976, as amended from
time to time, and regulations promulgated thereunder; (b) any "hazardous
substance" as defined by the Comprehensive Environmental Response, Compensa-
tion and Liability Act of 1980, as amended from time to time, and regulations
promulgated thereunder; (c) any "toxic substance" as defined by the Toxic
Substances Control Act, as amended from time to time, and regulations
promulgated thereunder; (d) any substance or matter (including but not limited
to underground storage tanks), the presence of which is prohibited or
regulated under any Applicable Laws; and (e) any other substance, pollutant,
12
contaminant, chemical, or industrial toxic or hazardous substances or waste,
including without limitation hazardous materials, which is prohibited or is
otherwise regulated by any Applicable Laws.
"H-S-R Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended.
"H-S-R Approval" shall mean the date on which the waiting period
required by the H-S-R Act expires or the Federal Trade Commission or the
Department of Justice provides notice of early termination of such waiting
period to Buyer or Sellers, whichever occurs earlier.
"IRS" shall mean the United States Internal Revenue Service.
"Income Taxes" shall mean any income, gross receipts, gains, net worth,
surplus, franchise or withholding taxes (including interest, penalties or
other additions to Tax) imposed by a Tax Authority.
"Independent Accountants" shall have the meaning set forth in
Section 2.4.
"Intellectual Property" shall mean any and all design registrations,
patents, patent applications, trademarks, trademark registrations and
applications therefor, service marks, service mark registrations and
applications therefor, copyrights, copyright registrations and applications
therefor and trade names that are owned by, licensed to, or used by a Seller
in its business.
"Knowledge" shall mean, with respect to a Seller, that the matter
referred to is actually known by any one or more of the following persons:
(i) ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, each a member of the executive management of Seller, (ii) ▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, each a member of the
Executive Committee of the Board of Directors of CFC, or (iii) ▇▇▇▇▇ ▇. ▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇, each of which is a Vice President and General Manager of a
Seller (each of the persons identified in this clause (iii), a "Hangar
Manager").
"Letter of Intent Break-Up Fee" shall mean the amount of $1,000,000
which may become due and payable by Buyer in accordance with the terms of
Section 10.2 hereof.
"Material Adverse Effect," when used with reference to a Person or
Persons, shall mean a material adverse effect on the business, assets,
liabilities, operations, results of operations, financial condition or
business prospects (but not including general industry, financial or political
events not specific to the business of a Person) of the Person or Persons.
"Net Asset Value" shall mean the total book value of the assets of
Sellers (other than the Excluded Assets) minus the total book value of the
Assumed Liabilities of Sellers (other than the Excluded Liabilities).
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Pension Plan" shall mean any Employee Benefit Plan that is an "employee
pension benefit plan" as defined in Section 3(2) of ERISA.
13
"Person" shall mean any individual, corporation, unincorporated
association, business trust, estate, partnership, limited liability company,
limited liability partnership, trust, state, the United States or any other
entity.
"Predecessor Financial Statements" shall have the meaning set forth in
Section 5.10(a).
"Properties" shall have the meaning set forth in Section 3.10(a).
"Purchase Price" shall have the meaning set forth in Section 2.2.
"Required Consents" shall mean the consents, approvals, waivers and
authorizations specified on Schedule 1.0 to this Agreement.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Laws" shall mean the Securities Act of 1933, as amended (and
the rules and regulations promulgated thereunder), and the Securities Exchange
Act of 1934, as amended, (and the rules and regulations promulgated
thereunder).
"Seller Group" shall mean ▇▇▇▇▇▇▇, Jet Center, CFC and each other
Affiliate of ▇▇▇▇▇▇▇ and Jet Center.
"Seller Losses" shall have the meaning set forth in Section 11.5.
"Tax Authority" shall mean a foreign or United States federal, state,
or local Governmental Authority having jurisdiction over the assessment,
determination, collection or imposition of any Tax, as the context requires.
"Tax Returns" shall mean all returns (including information returns and
amended returns), declarations, reports, claims for refunds, estimates and
statements regarding Taxes, required to be filed under Applicable Laws.
"Taxes" shall mean all taxes, charges, fees, levies or other
assessments, including without limitation, all net income, gross income, gross
receipts, sales, use, value added, ad valorem, transfer, franchise, profits,
license, withholding, payroll, employment, windfall profit, alternative or add
on minimum, excise, estimated, severance, stamp, occupation, property or other
taxes, customs, duties, fees, assessments, or charges of any kind whatsoever,
together with any interest and any penalties, additions to tax or additional
amounts imposed by any Tax Authority.
"Technology" shall mean all unpatented inventions or discoveries, trade
secrets, proprietary information, research records, test information, market
surveys, know-how, analysis, processes and procedures, and software and
computer programs and source code data relating thereto owned, used by or
licensed to Sellers.
ARTICLE II
PURCHASE AND SALE OF ASSETS
---------------------------
Section 2.1. Purchase and Sale of Assets. Subject to the conditions
set forth in this Agreement, and pursuant to and in accordance with the terms
of this Agreement, (i) each Seller hereby agrees to sell, transfer, assign and
14
deliver to Buyer at the Closing all of its right, title and interest in and
to all of its tangible and intangible assets, rights and properties, other
than the Excluded Assets, including, without intended limitation, the assets,
rights and properties of each Seller that are associated with or used or
useful in the Business of the Sellers, and including, without intended
limitation, the assets, rights and properties described on Schedule 2.1 to
this Agreement (the "Assets"), and (ii) in reliance upon the representations
and warranties of the Sellers and CFC made herein and subject to the
satisfaction of the conditions set forth herein, Buyer hereby agrees to
purchase such Assets at the Closing from the Sellers.
Section 2.2. Purchase Price and Payment for Assets.
(a) Purchase Price. The entire consideration to be given
by Buyer to the Sellers in the aggregate in exchange for the sale, assignment,
transfer and delivery of the Assets to Buyer at the Closing (the "Purchase
Price") shall be (i) $150,000,000, which amount shall be subject to adjustment
at and after the Closing as provided in Sections 2.4(a) and 2.4(c) and paid
to the Sellers as provided in Section 2.2(b) (the "Cash Consideration") plus
(ii) the assumption by ▇▇▇▇▇ at the Closing of the Assumed Obligations.
(b) Payment of Cash Consideration on the Closing Date. On
the Closing Date, upon satisfaction of all of the conditions precedent to the
obligations of Buyer which are set forth in Article VII that have not been
waived in writing by Buyer, in consideration of the sale, transfer, assignment
and delivery of the Assets to Buyer, Buyer shall pay to the Sellers, at the
Closing, by wire transfer to an account of the Sellers designated in writing
by Sellers prior to the Closing Date, the aggregate amount of $150,000,000
less (i) the Closing Holdback (which shall be subject to and payable in
accordance with Section 2.5) and (ii) the amount of the adjustment that will
be made thereto in accordance with Section 2.4(a) in respect of certain lease
obligations of Seller assumed by Buyer at the Closing.
Section 2.3. Assumption of Assumed Obligations.
(a) Assumption. On the Closing Date, upon satisfaction of
all of the conditions precedent to the obligations of Buyer which are set
forth in Article VII that have not been waived in writing by ▇▇▇▇▇, in
consideration of the sale, transfer, assignment and delivery of the Assets to
Buyer, Buyer shall assume the Assumed Obligations at the Closing, and shall
thereafter pay, perform and discharge the Assumed Obligations in the ordinary
course of business from and after the Closing Date in accordance with their
respective terms and the terms of the Assumption Agreement. Notwithstanding
the foregoing, each Seller shall retain all of, and Buyer shall not acquire
or assume or otherwise be liable or responsible for any of, the Excluded
Liabilities. Each Seller shall perform, pay, discharge and satisfy all
Excluded Liabilities from and after the Closing in accordance with their
respective terms and CFC shall cause each Seller to comply with their
obligations hereunder.
(b) Assumed Obligations. For purposes of this Agreement,
the term "Assumed Obligations" shall mean and include all of the obligations,
liabilities and commitments of each Seller arising out of the business of each
Seller, whether known, contingent or arising in the future, with respect to
matters occurring prior to the Closing Date; including without limitation,
obligations which (i) arise out of, or under, the Contracts, (ii) constitute
trade accounts payable of Seller reflected on the Balance Sheet or which arise
15
in the ordinary course of business of Seller prior to the Closing and which
are of a type consistent with the trade accounts payable reflected on the
Balance Sheet, and (iii) all capitalized lease obligations of Seller which are
reflected on the Balance Sheet or which arise in the ordinary course of
business of Seller prior to the Closing and which are of a type consistent
with the capitalized lease obligations set forth on the Balance Sheet (to the
extent, and only to the extent, that the Cash Consideration has been reduced
in respect of such capitalized lease obligations in accordance with Section
2.4(a) of this Agreement); provided, however, that in no event shall the
Assumed Obligations include any Excluded Liabilities.
(c) Excluded Liabilities. For purposes of this Agreement,
the term "Excluded Liabilities" shall mean and include (i) the obligations and
liabilities of Seller in respect of borrowed money, current portions of long-
term bank financing, and long-term bank financing, (ii) any of the Sellers'
liabilities or obligations under this Agreement or any of the Exhibits hereto,
(iii) any of the Sellers' liabilities for expenses or fees incurred by the
Sellers in connection with the negotiation, preparation, approval and
authorization of the execution and delivery of this Agreement, any of the
Collateral Agreements or the consummation of any the transactions contemplated
hereby or thereby, (iv) except as otherwise set forth in Section 2.8, any
liabilities or obligations (including Taxes) of a Seller which arise in
connection with or relate to the consummation of the transactions contemplated
by this Agreement, (v) liabilities, amounts or obligations payable by Jet
Center to CFC, ▇▇▇▇▇▇▇ or any Affiliate thereof; or (vi) amounts or
obligations payable by ▇▇▇▇▇▇▇ to Jet Center, CFC or any Affiliate thereof;
provided, however, that an amount or obligation identified in clauses (v) and
(vi) shall not constitute an Excluded Liability to the extent that it
represents an amount payable by a Seller to the other Seller and an equal
offsetting asset in respect of such amount is set forth on the Closing Balance
Sheet.
Section 2.4. Adjustments to Cash Consideration.
(a) Personal Property Lease Obligations. The Cash
Consideration shall be reduced at the Closing by an amount equal to certain
liabilities assumed by ▇▇▇▇▇ at the Closing in respect of certain lease
obligations of each of the Sellers. The amount of the Purchase Price
reduction shall be determined on the basis set forth on Schedule 2.4 to this
Agreement.
(b) Preparation of Closing Balance Sheet.
(i) As promptly as practicable following the
Closing Date, but in no event later than 60 days after the Closing Date, the
Sellers shall deliver to Buyer (a) the Closing Balance Sheet, which shall be
prepared in accordance with GAAP, consistently applied, and on a basis
consistent with the principles, methods and policies used in the preparation
of the combined balance sheet of Sellers at December 31, 1994 included in the
Financial Statements and the Balance Sheet (to the extent that such
principles, methods, and policies are consistent with and proper under GAAP),
accompanied by a favorable audit opinion of ▇▇▇▇▇ & ▇▇▇▇▇, and (b) a statement
of the Net Asset Value of Seller shown on the Closing Balance Sheet.
(ii) Each Seller shall provide, and shall cause
▇▇▇▇▇ & ▇▇▇▇▇ to provide, Buyer (and its employees, accountants and other
representatives) with full, complete and contemporaneous access to the work
16
papers, schedules or other documents prepared by or on behalf of the Seller
in connection with the preparation of the Financial Statements, the Balance
Sheet and the Closing Balance Sheet. Each Seller also shall permit Buyer (and
its employees, accountants and other representatives) to consult with the
Seller (and its employees), and shall cause ▇▇▇▇▇ & Young to permit Buyer (and
its employees, accountants and other representatives) to consult with ▇▇▇▇▇
& ▇▇▇▇▇ and its employees, on a contemporaneous basis in connection with the
preparation of the Closing Balance Sheet. Each Seller (and its employees,
accountants and representatives) shall cooperate fully with Buyer in
furnishing all information and documents reasonably requested by Buyer (or its
employees, accountants or representatives) in connection with the preparation
of the Closing Balance Sheet, and shall consult with Buyer (and its employees,
accountants or representatives) in connection with the preparation of the
Closing Balance Sheet.
(iii) In the event that Buyer disputes the
correctness of the Closing Balance Sheet or the statement of the Net Asset
Value of the Sellers provided by the Sellers, Buyer shall notify the Sellers
in writing of its objections within 20 business days after its receipt of the
Closing Balance Sheet and shall describe, in reasonable detail, the reasons
for Buyer's objections. If ▇▇▇▇▇ fails to deliver a notice of objection to
the Sellers within such 20-day period, Buyer shall be deemed to have accepted
the Closing Balance Sheet and the statement of the Net Asset Value of Seller
provided to Buyer by Sellers. If, however, ▇▇▇▇▇ delivers a notice of
objection to the Sellers within such 20-day period, Buyer and Sellers shall
endeavor in good faith to resolve any disputed items within 10 business days
after the date of Sellers' receipt of Buyer's notice of objection. In the
event that Buyer and Sellers are unable to resolve any items in dispute
relating to the Closing Balance Sheet and the statement of Net Asset Value
provided to Buyer by Sellers, Buyer and Sellers shall select a nationally
known independent accounting firm (the "Independent Accountants")
to resolve all items remaining in dispute, and the determination of the
Independent Accountants in respect of such items shall be conclusive and
binding on the parties. The Independent Accountants shall be instructed by
▇▇▇▇▇▇▇ and ▇▇▇▇▇ to prepare and deliver to Sellers and Buyer, after resolving
any items in dispute between Sellers and Buyer, a balance sheet of Sellers as
of the Closing Date reflecting its resolution of all issues in dispute and a
statement of the Net Asset Value of Sellers shown thereon.
(iv) The Net Asset Value of the Sellers as
finally determined pursuant to this Section 2.4(b) (whether by failure of
Buyer to deliver a notice of objection to Sellers, by the agreement of the
parties or by the final determination of the Independent Accountants) shall
be deemed to be, and shall be referred to herein as, the "Final Net Asset
Value."
(v) Sellers shall bear, and be solely
responsible for, all of their costs and expenses incurred in connection with
the preparation of the Closing Balance Sheet; provided, however, that Seller
shall not be responsible for costs and expenses associated with individuals
who become and remain Buyer's employees following Closing. The Sellers and
Buyer shall each bear, and be responsible for, the costs and expenses incurred
by each of them (including the fees and expenses of their respective
accounting firms) in connection with their review of the Closing Balance
Sheet. If the Independent Accountants are engaged, the fees and expenses of
the Independent Accountants will be paid (i) by the Sellers in the event the
review of the Independent Accountants results in a negative variance of more
17
than ten percent (10%) in the disputed item or the aggregate of the disputed
items from the amount(s) represented by the Sellers and favorable to the
Buyer; and (ii) by ▇▇▇▇▇ in the event the review of the Independent
Accountants does not reveal such a variance.
(vi) Buyer acknowledges that from and after the
Closing Date the employees of Sellers shall be the employees of ▇▇▇▇▇ and the
Assets, including books and records of the Sellers shall be the property of
Buyer. Accordingly, Buyer shall make each of Sellers' former employees who
accepts employment with ▇▇▇▇▇ and Sellers' books and records acquired by Buyer
available to the Sellers, its advisors and representatives and to Ernst &
▇▇▇▇▇ at such time and from time to time as shall be necessary to allow each
Seller to comply with its obligations under this Section 2.4(b) and elsewhere
in this Agreement and its obligations under any Applicable Law with respect
to matters occurring prior to the Closing Date.
(c) Final Net Asset Value Adjustment.
(i) If the Final Net Asset Value is less than
$47,075,000, then the Cash Consideration shall be decreased by an amount equal
to the difference between $47,075,000 and the Final Net Asset Value, and the
amount of such difference shall be paid by Sellers to Buyer as provided in
this Section 2.4(c).
(ii) If the Final Net Asset Value is greater
than $47,575,000, then the Cash Consideration shall be increased by an amount
equal to the difference between the Final Net Asset Value and $47,575,000, and
the amount of such difference shall be paid by Buyer to Sellers as provided
in this Section 2.4(c).
(iii) All payments contemplated by this
Section 2.4(c) shall be made within three (3) business days of the date on
which the Final Net Asset Value is finally determined. All payments shall be
made by wire transfer of immediately available funds to an account or accounts
designated by the party entitled to receive any such payment. Sellers shall
retain not less than $2 million to cover their obligations under this Section
2.4(c) and shall not distribute such funds to any Affiliates until the Final
Net Asset Value has been finally determined. CFC covenants and agrees that
it shall contribute capital to Sellers following Closing to the extent that
the $2 million amount is not sufficient to satisfy Sellers' obligations
hereunder.
Section 2.5. Closing Holdback. On the Closing Date, upon satisfaction
of all of the conditions precedent to the obligations of Buyer which are set
forth in Article VII that have not been waived in writing by ▇▇▇▇▇, ▇▇▇▇▇
shall deliver the Closing Holdback to the Escrow Agent, as escrow agent for
the benefit of the Sellers and Buyer, by wire transfer to an account
designated by the Escrow Agent prior to the Closing Date. The Closing
Holdback shall be administered and disbursed by the Escrow Agent as provided
in the Escrow Agreement.
Section 2.6. Instruments of Transfer. On the Closing Date, upon
satisfaction of all of the conditions precedent to the obligations of the
Sellers which are set forth in Article VIII that have not been waived in
writing by ▇▇▇▇▇▇▇, Sellers shall execute and deliver to Buyer such warranty
bills of sale, warranty deeds, assignments, certificates of title, and other
documents and instruments of transfer and title, individually or in bulk as
18
Buyer may reasonably request, in such form as may be required by the laws of
any jurisdiction which may be applicable thereto, all as may be requested by
▇▇▇▇▇ in order to evidence the sale, assignment, transfer and delivery of the
Assets to Buyer at the Closing. The Sellers also shall, without the payment
of any further consideration by ▇▇▇▇▇, execute and deliver from time to time
after the Closing, such further warranty bills of sale, warranty deeds,
assignments, certificates of title, and other documents of title and transfer
as may be reasonably requested by ▇▇▇▇▇ in order to evidence more effectively
or fully the sale, assignment, transfer and delivery of the Assets to Buyer
at the Closing.
Section 2.7. Allocation of Purchase Price. The Purchase Price shall
be allocated among each of the Sellers' and the Assets as set forth in
Schedule 2.7 to this Agreement. Buyer and each of the Sellers agree that the
allocation of the Purchase Price has been negotiated between them and is
consistent with the value of the Assets. Buyer and each of the Sellers
further agree that the allocation of the Purchase Price may be adjusted
following the Closing to reflect the adjustments to the Cash Consideration
made pursuant to the terms of this Agreement, but that any such adjustment
shall be reflected by a ratable adjustment to each category of Assets set
forth in the allocation of the Purchase Price on Schedule 2.7. Buyer and each
of the Sellers further agree that the allocation of the Purchase Price, as
finally adjusted, shall be used consistently by each of them in any Tax
Returns filed by either of them following the Closing, including any filings
required by Section 1060 of the Code.
Section 2.8. Transfer Taxes and Costs. Buyer on the one hand and the
Sellers on the other hand shall pay one-half of all Taxes (including sales
taxes), stamp duties, notarial, registration and recording fees resulting from
or relating to the transfer of the Assets to Buyer at the Closing (other than
Income Taxes and Taxes on, relating to or measured by income or gains which
shall be the sole and exclusive obligation and liability of the Sellers and
CFC and borne exclusively by the Sellers and CFC or their Affiliates). Buyer
shall prepare all sales tax returns and provide them to Seller five business
days prior to the filing of such returns. Buyer shall consult in good faith
with Seller in the preparation of the sales tax returns. Seller shall pay to
Buyer 50% of the tax due at least one full business day prior to the date such
tax must be remitted.
Section 2.9. Assignment of Contracts and Rights. This Agreement shall
not constitute an agreement to purchase or assign any Asset or any claim or
right or any benefit arising thereunder or resulting therefrom if an attempted
assignment thereof, without the consent of a third party thereto, would
adversely affect the rights of Buyer thereunder. Each of the Sellers and the
Buyer will use their reasonable efforts to obtain the consent of the other
parties to the assignment of any such Asset or any claim or right to any
benefit arising thereunder as Buyer may reasonably request. If such consent
is not obtained, or if an attempted assignment thereof would be ineffective
or would adversely affect the rights of a Seller or Buyer thereunder so that
Buyer would not in fact receive all such rights, the affected Seller and Buyer
will cooperate in a mutually agreeable arrangement for a period of up to 90
days following Closing under which Buyer would obtain the benefits and assume
the obligations thereunder in accordance with this Agreement, including
subcontracting, sub-licensing, or sub-leasing to Buyer, or under which the
affected Sellers would enforce for the benefit of Buyer, with ▇▇▇▇▇ assuming
such Seller's obligations, any and all rights of such Seller against the other
19
party thereto. Sellers will promptly pay to Buyer when received all monies
received by either Seller under any Asset or any claim or right or any benefit
arising thereunder.
Section 2.10. Compliance with Bulk Transfer Laws. Prior to, at and
after the Closing, the Sellers and Buyer shall duly and timely take all
actions and execute all instruments necessary to comply fully with the
provisions of the Uniform Commercial Code Bulk Transfers and similar laws
which may be applicable in various jurisdictions in connection with the
transactions contemplated by this Agreement.
Section 2.11. Escrow Agreement. At the Closing, Buyer and each Seller
shall execute and deliver the Escrow Agreement.
Section 2.12. Schedules to Agreement. Sellers have delivered to Buyer
Schedules 3.3; 3.4; 3.6; 3.7; 3.8; 3.12; 3.13; 3.15; 3.17; 3.18; 3.22 and 3.26
to this Agreement. As soon as practicable, but in no event later than the
last to occur of (i) the date which is ten (10) days after the date of this
Agreement, or (ii) January 31, 1996, the Sellers shall provide to Buyer the
remaining Schedules referenced in Article III of this Agreement (or which are
otherwise contemplated to be prepared and delivered by the Sellers) and any
updates to the Schedules as originally delivered (such Schedules and updates
to the previously delivered Schedules shall be referred to collectively as the
"Remaining Schedules"). Notwithstanding the foregoing, Sellers shall not be
entitled to update Schedule 3.13(a) (except is response to the last sentence
of Section 3.13(a)) or 3.13(d) during such period. The Remaining Schedules
shall be responsive to the matters to be disclosed on the particular Schedules
and shall be accompanied by a notice from the Sellers to Buyer stating that
the Remaining Schedules are in final form. Buyer shall review the Remaining
Schedules and determine, in its sole but reasonable discretion, the adequacy
and the acceptability to Buyer of the disclosures and the content and
substance of the matters set forth or referenced in the Schedules. Buyer
shall provide notice to the Sellers, within ten (10) days of receiving the
Schedules, of its acceptance or rejection of the Remaining Schedules (it being
understood that Buyer shall be entitled to reject the Remaining Schedules in
the event that a reasonable Buyer would determine not to purchase the Assets
at all or to materially reduce the Purchase Price based on the disclosures or
the content and substance of the matters set forth in or referenced on the
Remaining Schedules). In the event that Buyer does not provide a notice of
acceptance or rejection to the Sellers within such ten (10) day period, Buyer
shall be deemed to have accepted the Remaining Schedules.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
In order to induce Buyer to enter into this Agreement, each Seller
hereby jointly and severally makes the following representations and
warranties to Buyer (all of which are made only with respect to the Knowledge
of each Seller and are subject to the limitations expressed in Sections 11.3
and 11.4 hereof):
Section 3.1. Organization and Good Standing. ▇▇▇▇▇▇▇ is a limited
partnership duly organized, validly existing and in good standing under the
laws of the State of Delaware. Jet Center is a limited liability company,
duly organized, validly existing and in good standing under the laws of the
20
State of Delaware. Each of the Sellers has full power and authority to own,
operate and lease its properties, and to carry on its business as it is now
being conducted. Each Seller is qualified as a foreign partnership or limited
liability company, as appropriate, and is in good standing under the laws of
each jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect on the affected Seller.
Each Seller has delivered to Buyer a complete and correct copy of its
certificate of limited partnership, partnership agreement, articles of
organization, management agreement and/or operating agreement, as the case may
be, and the charter and bylaws of CFC, none of which has been amended or
repealed since delivery to Buyer, and each of which is in full force and
effect.
Section 3.2. Execution and Effect of Agreement. Each Seller and CFC
has the power and authority to enter into this Agreement and each of the
Collateral Agreements and to perform their obligations hereunder and
thereunder. The execution and delivery of this Agreement and of each of the
Collateral Agreements by each of the Sellers and CFC, the consummation by each
Seller and CFC of the transactions contemplated hereby and thereby, and the
performance by each Seller and CFC of its obligations hereunder and
thereunder, have been duly and validly authorized by all necessary
partnership, member or corporate action on the part of each Seller and CFC,
respectively. This Agreement has been duly executed and delivered by each
Seller and CFC and constitutes the legal, valid and binding obligation of each
Seller and CFC, fully enforceable against each Seller and CFC in accordance
with its terms.
Section 3.3. Restrictions. The execution and delivery of this Agree-
ment and the Collateral Agreements by each Seller and CFC, the consummation
of the transactions contemplated hereby and thereby by each Seller and CFC,
and the performance of the obligations of each Seller and CFC hereunder and
thereunder will not (a) violate any of the provisions of the certificate of
limited partnership or partnership agreement of ▇▇▇▇▇▇▇, the articles of
organization or operating agreement of Jet Center, or the charter or by-laws
of CFC or (b) except as set forth in Schedule 3.3, (i) violate or conflict
with the provisions of any Applicable Laws or any order, award, judgment or
decree of any Governmental Authority applicable to a Seller or CFC, (ii)
result in the creation of any Encumbrance upon any of the Assets, or
(iii) conflict with, violate any provisions of, result in a breach of or give
rise to a right of termination, modification or cancellation of, constitute
a default of, or accelerate the performance required by, with or without the
passage of time or the giving of notice or both, or require any consent,
waiver or approval of a third party under the terms of (x) any Contract set
forth on Schedule 3.12 or (y) any agreement, indenture, mortgage, deed of
trust, lease, contract, note, bond, license, permit, authorization or other
instrument to which a Seller is a party or to which a Seller or any of the
Assets are subject (except in the case of the items referenced in this clause
(y) where such conflict, violation or breach would not have a Material Adverse
Effect).
Section 3.4. Consents. Except as set forth in Schedule 3.4, and except
for the Required Consents and filings, approvals, consents, waivers and
approvals under the H-S-R Act, no filing with, or consent, waiver, approval
or authorization of, or notice to, any Governmental Authority is required to
be made or obtained by a Seller or CFC in connection with the execution and
delivery of this Agreement, the Collateral Agreements or any instrument
21
contemplated hereby or thereby, the consummation of any of the transactions
contemplated hereby or thereby or the performance of any of their respective
obligations hereunder or thereunder.
Section 3.5. Financial Statements.
(a) Attached hereto as Exhibit E are true and correct
copies of (i) the audited combined financial statements of the Sellers as of
December 31, 1994, and for the six-month period then-ended, and (ii) the
unaudited combined financial statements of the Sellers as of and for the ten-
month period ended October 31, 1995 (including the Balance Sheet)
(collectively, the "Financial Statements"). The Financial Statements have
been prepared in accordance with GAAP in a manner consistent with each other
and the books and records of each Seller, and fairly present in all material
respects the financial condition, results of operations and cash flow of the
Sellers at and for the dates and for the periods indicated therein (it being
understood that, with respect to the ten month period ended October 31, 1995,
such statements do not include footnotes required by GAAP and are subject to
normal year-end adjustments which are not material). If footnotes were
presented with respect to the October 31, 1995 financial statements, no
footnote would be required disclosing events of an extraordinary or non-
recurring nature that are not reflected in the footnotes to the Financial
Statements for the year ended December 31, 1994. The regular books of account
of each Seller fairly and accurately reflect all transactions involving each
Seller and are true, correct, complete and consistent with the Financial
Statements. Except as set forth in the notes to the Financial Statements,
there are no special, extraordinary or non-recurring items of income or
expenses reflected in the Financial Statements. Each Seller has followed and
consistently applied the same accounting policies, principles, methods and
practices since such Seller's inception.
(b) All accounts receivable of the Sellers reflected on the
books and records of the Sellers arose from bona fide, arms-length
transactions in the ordinary course of business for services performed or
goods sold by the Sellers.
(c) All accounts payable reflected on the books and records
of each Seller (i) arose from bona fide, arms-length transactions in the
ordinary course of business for services performed for or goods sold to the
Seller for which the Seller obtained substantially equivalent value and
(ii) have been incurred in accordance with applicable payment or credit terms
imposed by the vendors of such services or goods. The Closing Balance Sheet
shall include all accounts payable which must be reflected thereon in
accordance with GAAP.
(d) All inventories (net of reserves) reflected on the
Balance Sheet or the Closing Balance Sheet, as the case may be, consist of
materials and supplies of the quality and quantity which are reasonably
believed by the Sellers to be useable or saleable within one year in the
ordinary course of the business of the Sellers as presently conducted and no
such inventories are valued in excess of the lower of cost or net realizable
market value.
Section 3.6. Capitalized Lease Obligations. Schedule 3.6 sets forth
the payment terms and scheduled maturities of all capitalized lease
obligations of each Seller.
22
Section 3.7. No Undisclosed Liabilities. The Sellers do not have any
liabilities or obligations of any nature whatsoever, due or to become due,
absolute, accrued, contingent or otherwise, and whether or not determined or
determinable), including, without limitation, any unfunded obligation under
any Employee Benefit Plan, except for (i) liabilities or obligations set forth
on Schedule 3.7, (ii) obligations to perform (other than obligations arising
by reason of a default, breach or faulty performance of a contract) contracts
entered into in the ordinary course of business and not required to be
reflected on a balance sheet prepared in accordance with GAAP, (iii)
liabilities or obligations to the extent expressly reflected on or reserved
against in the Balance Sheet, or (iv) liabilities or obligations incurred in
the ordinary course of business and consistent with past practices and levels
since October 31, 1995 which would be required to be reflected on a balance
sheet prepared in accordance with GAAP, and there is no basis for the
assertion of any such liability or obligation against a Seller. At Closing,
no distributions to any partners or Affiliates of a Seller will be due and
payable by a Seller.
Section 3.8. Litigation. There is no suit, claim, action at law or in
equity, proceeding or governmental investigation or audit pending or
threatened, by or before any court, any Governmental Authority or arbitrator,
against a Seller that reasonably could be expected to prevent the consummation
of any of the transactions contemplated hereby, nor is there any basis for any
of the foregoing. Except as set forth in Schedule 3.8, there is no suit,
claim, action at law or in equity, proceeding or governmental investigation
or audit pending or threatened, by or before any arbitrator, court, or other
Governmental Authority, against a Seller or involving any of the Assets or any
Employees, nor is there any basis for the assertion of any of the foregoing.
Except as disclosed in Schedule 3.8, there are no judgments, orders,
injunctions, decrees, stipulations or awards rendered by any Governmental
Authority or arbitrator against a Seller or any Employees or Assets.
Section 3.9. Subsidiaries; Investments. Except as set forth in
Schedule 3.9, neither Seller owns any shares of capital stock or equity
securities of, or any interest in any other Person, and each Seller has good,
valid and marketable title, free and clear of all Encumbrances, to all shares
of capital stock or equity securities of, or interests in, other Persons owned
by such Seller.
Section 3.10. Real Properties; Absence of Encumbrances.
(a) Neither Seller owns any real property. Schedule 3.10
contains a list and brief description of all of real property leased or
otherwise occupied by a Seller and the basis of such occupation (the
"Properties"). Seller has a valid and existing leasehold interest under each
of the leases for the term set forth with respect thereto on Schedule 3.10.
(b) The Sellers have provided to Buyer true and complete
copies of each of the leases described on Schedule 3.10.
(c) Except as set forth on Schedule 3.10, (i) each Seller
is entitled to and has exclusive possession of the Properties, (ii) the
Properties are not subject to any lease, tenancy or license or any agreement
to grant such lease, tenancy or license, (iii) there is no person in
possession or occupation of or who has or claims any right to possession or
occupation of the Properties, and (iv) there are no easements of any kind in
23
respect of the Properties adversely affecting the rights of Seller therein to
use the Properties for the conduct of the Business as presently conducted or
as planned to be conducted by the Sellers.
(d) In respect of each of the Properties:
(i) At the effective date of the lease, the
lessor had good title to the Property covered thereby and all consents neces-
sary for the lessor to execute and deliver the lease were obtained.
(ii) There are no circumstances which would
entitle or require the lessor to exercise any power of entry upon or of taking
possession of any of such Properties.
(iii) Seller is not in default under any of the
terms of the lease.
(iv) No notice of any alleged breach of any of
the terms of the lease has been served on or received by the Seller.
(v) Except as set forth on Schedule 3.10,
Seller has paid all rents and service charges to the extent such rents and
charges are due and payable.
(e) Each of the Properties is available for immediate use
in the operation of its business and for the purpose for which such property
currently is being utilized.
(f) All improvements on the Properties conform to
Applicable Laws relating to zoning, health and safety and access, including
without limitation, the Americans With Disabilities Act, and the Properties
are zoned for the purposes for which they are being used by Seller (it being
understood that this representation shall not be deemed to be breached unless
a Seller has knowledge of facts or matters which have caused the relevant
person to actually reach a conclusion or belief with respect to the legal
status or consequences which are the subject of this representation).
(g) Subject to the terms and conditions of the respective
leases and excepting the subleases disclosed on Schedule 3.10, Seller has full
legal rights under the leases to the use and enjoyment of all of the
Properties for the operation of the Business as presently conducted by the
Sellers or as contemplated to be conducted by the Sellers.
(h) Seller has not entered into any commitment (whether
legally binding or not) with any Person who owns or occupies any property
adjacent or near to any of the Properties to do any act or thing or make any
payment to any Person in connection with or relating to any use or occupancy
of the Properties by any Person.
(i) There is no resolution, proposal, order,
act or thing made or done or contemplated for acquisition by condemnation or
otherwise of any of the Properties by any Governmental Authority nor any
outstanding order, notice or other requirement of any such authority that
affects the Properties or the roads abutting them or involves expenditure in
complying with it nor any other circumstances which may result in any such
order or notice being made or served or which may otherwise affect the
Properties.
24
(j) The Properties are served by drainage, water,
electricity, gas and telecommunications services necessary for the operation
of the Business as presently conducted by the Sellers or as contemplated to
be conducted by the Sellers.
(k) Except as set forth on Schedule 3.10, no Seller has
assigned any lease or tenancy.
Section 3.11. Intellectual Property.
(a) Schedule 3.11 sets forth a complete list of (i) all
Intellectual Property owned or licensed by each Seller, together with the
identity of the owner thereof, and (ii) all license agreements pursuant to
which any Intellectual Property or Technology is licensed to or by a Seller
(other than commercially available computer software used by Sellers in the
ordinary course of business). Each Seller owns its Intellectual Property and
Technology free and clear of Encumbrances, or, in the case of licensed
Intellectual Property or Technology, has valid, binding and enforceable rights
to use such Intellectual Property or Technology. Each Seller has duly and
timely filed all renewals, continuations and other filings necessary to
maintain its Intellectual Property or registrations thereof.
(b) Except as set forth in Schedule 3.11, (i) the use of
any Intellectual Property or Technology does not infringe upon, conflict with
or misappropriate the rights of any other Person, (ii) the Intellectual
Property or Technology is valid and enforceable, and (iii) no Seller has made
any claim that any Person has violated or infringed upon its rights with
respect to any Intellectual Property or Technology.
(c) No Person is infringing upon, misappropriating or
engaging in the unauthorized use of any of the Intellectual Property or the
Technology.
(d) Except as set forth in Schedule 3.11, no Intellectual
Property or Technology of a Seller has ever been sold, licensed, leased,
conveyed or delivered, in whole or in part, to any third party.
(e) Each Seller has taken reasonable and practicable steps
designed to safeguard and maintain the secrecy and confidentiality of, and its
proprietary rights in, all Intellectual Property and Technology.
Section 3.12. Contracts.
(a) Schedule 3.12 sets forth a list of the following
written, and a description of the following oral Contracts embodying or
evidencing the following transactions or arrangements to which a Seller is a
party or by which a Seller is obligated or has agreed to become obligated: (i)
agreements for the employment of any officer of a Seller or CFC or written
agreements with other individual employees of Seller or CFC; (ii) any
agreement, commitment or arrangement with respect to the provision of
services, sale of goods or lease of premises by a Seller entered into outside
the ordinary course of business; (iii) any single contract, purchase order or
commitment (other than bids to provide services and parts to customers made
in the ordinary course of business and consistent with past practices)
providing for expenditures by Seller after the date hereof of more than
25
$750,000; (iv) any option, preferential right of purchase, real estate
mortgage, chattel mortgage, deed of trust, security agreement or conditional
sales agreement relating to any of the assets or property of a Seller; (v) any
bond, loan agreement, promissory note, indenture, overdraft agreement or other
obligation to pay money (other than usual trade payables), indenture or other
instrument relating to municipal or governmental finance or financial
assistance, arrangement for the factoring or assignment of accounts receivable
or borrowed money, (vi) any employment, consulting agreement, agency
agreement, independent contractor arrangement and any other service agreement
that will continue in force after the Closing Date with respect to the
employment or retention by a Seller of consultants, agents, legal counsel,
accountants or anyone else who is not an Employee or which is not terminable
upon notice without penalty; (vii) any contract containing covenants limiting
the freedom of a Seller or any officer, director, or employee of a Seller or
CFC to engage in any line or type of business or with any person in any
geographic area; (viii) any commitment or arrangement to participate in a
partnership, joint venture, limited liability company or other cooperative
undertaking with any other Person; (ix) any bid, commitment or other proposal
submitted to any Person involving the provision of services or goods by a
Seller (other than bids, commitments or other proposals submitted by Seller
in the ordinary course of business and consistent with past practices); (x)
any agreement pursuant to which a Seller will acquire any assets outside the
ordinary course of business, or assets comprising a business or portion of a
business or equity securities of any other Person; (xi) any capitalized lease
obligation of a Seller; (xii) any lease or other agreement relating to any of
the Properties; or (xiii) any commitments by a Seller for capital expenditures
involving more than $50,000 individually or $100,000 in the aggregate. No
Seller is party to any contract (including any requirements or exclusive
arrangement with any AlliedSignal Service Centers (as defined in the ASE
Operating Agreement), other than contracts which will be terminable by Buyer
on not more than 30 days notice and without any penalty, that would restrict
or prevent Buyer from having UNC Airwork Corporation or any other Affiliate
of Buyer, perform services for or on behalf of Buyer with respect to the
matters which are the subject of the ASE Operating Agreement, to the extent
Buyer is otherwise permitted to have UNC Airwork Corporation or an Affiliate
perform such services by the terms of the ASE Operating Agreement.
(b) Except as set forth on Schedule 3.12, each Seller is
in full compliance with each, and is not in default under any, Contract to
which it is a party and no event has occurred that, with notice or lapse of
time or both, would constitute such a default thereunder, has not waived any
rights under or with respect thereto. No party with whom a Seller has
contractual arrangements disclosed on Schedule 3.12, or required to be
disclosed on Schedule 3.12, or with whom a Seller otherwise has material
contractual arrangements, written or oral, is in default under any such
contractual arrangements and no event has occurred that, with notice or lapse
of time or both, would constitute such a default thereunder. Each Contract
is a valid and binding obligation of a Seller and is enforceable against such
Seller in accordance with its respective terms.
(c) True and complete copies of all written Contracts
listed on Schedule 3.12 have been provided to Buyer.
Section 3.13. AlliedSignal Agreements.
(a) ▇▇▇▇▇▇▇ has delivered previously to Buyer true and
correct copies of the AlliedSignal Purchase Agreement and the ASE Operating
26
Agreement. Each of the AlliedSignal Purchase Agreement and the ASE Operating
Agreement are in full force and effect and, except as set forth on Schedule
3.13(a), the terms set forth in each of those agreements have not been waived,
modified, or otherwise adversely affected by any oral or written communica-
tion, agreement or instrument or any course of dealing between or among any
of the parties thereto. Nothing has come to Sellers' attention to indicate
that any of the representations and warranties made by AlliedSignal to ▇▇▇▇▇▇▇
pursuant to the terms of Article IV of the AlliedSignal Purchase Agreement
were not true and correct in all material respects on the date of that
Agreement and on June 30, 1994.
(b) Each of the AlliedSignal Purchase Agreement and the ASE
Operating Agreement is fully assignable to the Buyer without any consent or
other action required on the part of the parties (other than ▇▇▇▇▇▇▇'▇
assignment of each of the agreements to Buyer pursuant to this Agreement) and
Buyer shall succeed to all of the rights and obligations of ▇▇▇▇▇▇▇ and its
Affiliates under each of the AlliedSignal Purchase Agreement and the ASE
Operating Agreement by reason and as a result of the consummation of the
transactions contemplated by this Agreement.
(c) Except as set forth on Schedule 3.13(c), no unresolved
disputes or claims exist among any parties to the AlliedSignal Purchase
Agreement or the ASE Operating Agreement with respect to the subject matter
or the terms and conditions of such agreements. Except as set forth on
Schedule 3.13(c), ▇▇▇▇▇▇▇ and its Affiliates have not made any claims against
AlliedSignal or its Affiliates for indemnification and AlliedSignal and its
Affiliates have not made any claims against ▇▇▇▇▇▇▇ for indemnification under
the terms of the AlliedSignal Purchase Agreement, the ASE Operating Agreement
or any other contract.
(d) Subject to the notice and other matters of a procedural
nature contained in the AlliedSignal Purchase Agreement, AlliedSignal is
responsible for paying, satisfying, discharging and remediating all of the
conditions and matters specified on Schedule 3.13(d) to this Agreement, and
▇▇▇▇▇ does not assume and shall not incur any liability or obligation with
respect to any of such matters. Sellers have not failed to give AlliedSignal
any notice or have not otherwise failed to comply with any matter of a
procedural nature that would prejudice Buyer's rights to seek indemnification
from AlliedSignal under the AlliedSignal Purchase Agreement following Closing.
(e) The terms of the Operating Agreement, including the
terms relating to the consignment of inventory and the pricing of products
purchased from AlliedSignal pursuant to the ASE Operating Agreement apply with
respect to each site and facility operated presently by each Seller.
AlliedSignal has not requested Seller to open a facility in Canada or Mexico
and the "Exclusive Territory" is as that term is defined in the ASE Operating
Agreement.
(f) Schedule 3.13(f) sets forth a true and correct
description of the basis on which AlliedSignal is required to sell "General
Products" (as that term is defined in the ASE Operating Agreement) to the
Sellers pursuant to the ASE Operating Agreement.
Section 3.14. Guarantees. Schedule 3.14 sets forth a complete list of
all Guarantees provided by a Seller for the benefit of any other Person and
of all Guarantees provided by any other Person for the benefit of a Seller or
any Persons doing business with a Seller.
27
Section 3.15. Employee Benefit and Employment Matters.
(a) Schedule 3.15 sets forth a true, complete and accurate
list (except for inaccuracies which are not in the aggregate material) of each
Employee, his or her date(s) of hire by a Seller, position and title (if any),
current rate of compensation (including bonuses, commissions and incentive
compensation (if any), whether such Employee is hourly or salaried, whether
such Employee is exempt or non-exempt, the number of such Employee's accrued
sick days and vacation days, whether such employee is absent from active
employment, and if so, the dates such Employee became inactive, the reason for
such inactive status and, if applicable, the anticipated date of return to
active employment.
(b) Schedule 3.15 sets forth a list of all Employee Benefit
Plans and all Benefit Arrangements to which a Seller is a party, a Seller
sponsors, a Seller participates in or under which a Seller may be liable.
With respect to such Employee Benefit Plans and Benefit Arrangements, Sellers
have delivered to Buyer, as applicable, copies of (i) the text of the formal
plan document or other agreements, written policies or guidelines evidencing
the terms of such Employee Benefit Plans and Benefit Arrangements, including
amendments and, if applicable, the summary plan description and any employee
handbook, (ii) in the case of a Pension Plan that is intended to qualify under
Section 401 of the Code, the most recent IRS determination letter, if any,
relating to the Pension Plan's qualification under Section 401 of the Code and
the related trust's qualification under Section 501 of the Code, (iii) the
trust agreements, insurance contracts or other documents that constitute all
or a part of the funding vehicle, and (iv) the annual reports (IRS
Form 5500s), including the schedules thereto.
(c) Except as set forth in Schedule 3.15, each Employee
Benefit Plan and Benefit Arrangement has been operated or maintained in
compliance in all material respects with all Applicable Laws, including
without limitation ERISA and the Code, and has been maintained in compliance
with its terms. Except as set forth in Schedule 3.15, with respect to any
Pension Plan that is intended to qualify under Section 401 of the Code, a
timely submission has been made to the IRS for a favorable determination
letter as to qualification under Section 401 of the Code and that submission
is still pending or a favorable determination letter has been issued by the
IRS and any amendments required for continued qualification under Section 401
of the Code have been timely adopted and there are no facts or events that
could adversely affect the qualified status of any such Pension Plan.
(d) Except as set forth in Schedule 3.15, there are no
actions, suits or claims pending, including proceedings before the IRS, the
DOL or the PBGC, with respect to any Employee Benefit Plan, Benefit
Arrangement or any administrator or fiduciary thereof, other than benefit
claims arising in the normal course of operation of such Employee Benefit
Plans or Benefit Arrangements, and no Employee Benefit Plan or Benefit
Arrangement is under audit or investigation by any Governmental Authority.
(e) No Seller has any current or projected liability for
any unfunded post-retirement medical or life insurance benefits in connection
with any Employee of such Seller.
(f) Except as set forth in Schedule 3.15, no event has
occurred with respect to any Employee Benefit Plan or any employee benefit
28
plan previously sponsored, maintained or contributed to by a Seller, which
could subject any Employee Benefit Plan, Buyer or a Seller, directly or
indirectly (through an indemnification agreement or otherwise), to any
liability for or as a result of a breach of fiduciary duty, a "prohibited
transaction" within the meaning of Section 406 of ERISA or Section 4975 of the
Code, or a civil penalty under Section 502 of ERISA or a Tax under Section
4971 of the Code.
(g) All contributions required to be made to or benefit
liabilities arising under the terms of each Employee Benefit Plan, Benefit
Arrangement, ERISA or the Code, for all periods of time prior to the date
hereof and that are attributable to Employees have been paid or accrued (and,
in the case of accruals, such accruals will be and are as set forth on the
Closing Balance Sheet), as the case may be.
(h) None of the Employee Benefit Plans to which a Seller
is a party, which a Seller sponsors or maintains or to which a Seller
contributes is subject to the requirements of Section 302 of ERISA or Section
412 of the Code.
(i) Neither Seller nor any of its ERISA Affiliates have
incurred a "withdrawal" or "partial withdrawal," as defined in Sections 4203
and 4205 of ERISA, from, or failed to timely make contributions to, any
multiemployer plan within the meaning of Section 4001(a)(3) of ERISA, which
has resulted in an unpaid liability. No such plan is in "reorganization"
within the meaning of Section 4241 of ERISA, is "insolvent" within the meaning
of Section 4245 of ERISA, or is in the process of terminating.
(j) Except to the extent provided by the terms of the
Employee Benefit Plans and Benefit Arrangements listed on Schedule 3.15 or as
expressly provided in this Agreement, neither the execution, delivery or
performance of this Agreement nor the consummation of the Closing will (i)
increase any benefits otherwise payable under any Employee Benefit Plan or
Benefit Arrangement, (ii) result in the acceleration of the time of payment
or vesting of any such benefits, or (iii) give rise to an obligation with
respect to the payment of any severance pay.
(k) Except as set forth in Schedule 3.15, no "parachute
payment" (within the meaning of Section 280G of the Code), "change in control"
or severance payment has been made or will be made by a Seller or a Seller to
any Employee in connection with the execution, delivery or performance of this
Agreement or as a result of the consummation of the Closing.
(l) Except as set forth in Schedule 3.15, no Employees of
Seller are members of any collective bargaining unit, Seller is not a party
to any union agreement covering any of its Employees and no union organizing
activities are taking place or have taken place within the past two years.
Except as set forth in Schedule 3.15, Seller is not liable for any arrearage
of wages, any accrued or vested vacation pay or any Tax or penalty for failure
to comply with any applicable local, state or federal law relating to
employment or labor, and there is not a material controversy pending or
threatened between Seller and its employees. No Employee with a position of
Vice President or above and no group of Employees of Seller has any plans to
terminate or modify his status as an Employee of the Seller or the business
conducted by Seller, including upon consummation of the transactions
contemplated by this Agreement.
29
(m) Except as set forth in Schedule 3.15, all current
employees of the Sellers may be terminated at will, without notice and without
incurring any severance or other liability or obligation to the employee in
connection with the termination other than the payment of accrued sick and
vacation pay, if any.
Section 3.16. Tax Matters.
(a) Sellers are partnerships for purposes of federal and
state income tax laws and have had the tax status of a partnership constantly
and without interruption since their formation (other than those states that
tax limited liability companies as corporations).
(b) Each Seller has timely filed or will timely file all
federal, state, local, and other Tax Returns required to be filed by it under
Applicable Laws, including estimated Tax Returns and reports, and has paid all
required Income Taxes and other Taxes (including any additions to taxes,
penalties and interest related thereto) due and payable on or before the date
hereof (and will duly and timely pay all such amounts required to be paid
between the date hereof and the Closing Date). Each Seller has paid,
withheld, or will pay any and all Income Taxes and other Taxes in respect of
the conduct of its business or the ownership of its property and in respect
of any transaction for all periods (or portions thereof) through the close of
business on the Closing Date.
(c) Except as set forth in Schedule 3.16, all deficiencies
asserted against a Seller as a result of IRS examinations have been paid or
finally settled and no issue has been raised by any IRS examination that, by
application of the same principles, might result in a proposed deficiency for
any other period not so examined.
(d) Except as set forth in Schedule 3.16, no material
deficiencies with respect to Taxes, additions to Tax, interest, or penalties
have been proposed or asserted against and communicated to a Seller, or any
Affiliate of a Seller, except those that have been paid in full and for those
matters that would not result in liability being imposed against a Seller.
Except as set forth in Schedule 3.16, there are no agreements, waivers of
statutes of limitations, or other arrangements providing for extensions of
time in respect of the assessment or collection of any unpaid Tax against a
Seller.
(e) No property of any of the Companies is subject to a tax
benefit transfer lease subject to the provisions of former Section 168(f)(8)
of the Internal Revenue Code of 1954.
(f) No Seller is a foreign person subject to withholding
under Section 1445 of the Code.
(g) Each Seller has complied fully with all Applicable Laws
relating to information reporting and withholding or collection and payment
over of Taxes with respect to payments made to or received from third parties.
(h) No Seller is a party to a "disqualified leaseback or
long-term agreement" described in Section 467(b)(4) of the Code.
(i) Each Seller has collected all sales, use and value
added Taxes required to be collected, and has remitted, or will remit on a
30
timely basis, such amounts to the appropriate Governmental Authorities and has
furnished properly completed exemption certificates for all exempt
transactions.
(j) None of the Assets are subject to any liens in respect
of Taxes (other than for current Taxes not yet due and payable).
(k) No Seller is a party to or bound by any Tax sharing,
Tax indemnity or Tax allocation agreement or other similar arrangement except
for those disclosed in Schedule 3.16.
(l) Each Seller has delivered to Buyer complete and correct
copies of all state and federal income Tax Returns filed by such Seller for
all of the taxable years for which such Tax Returns have been filed
immediately preceding the date of this Agreement. Other than with respect to
Taxes shown on state, federal and all other Tax Returns (which have been paid)
or for Taxes accrued on the Closing Balance Sheet, no Seller owes or will owe
any Tax for periods prior to and through Closing.
(m) Schedule 3.16 contains a list of all states and other
jurisdictions in which each Seller has filed Tax Returns during the past three
years or expects to file Tax Returns during the current calendar year and each
state in which Seller joins in the filing of combined or unitary state tax
returns.
Section 3.17. Environmental Matters.
(a) Since June 30, 1994, except as set forth in
Schedule 3.17, (i) and except for Hazardous Materials (other than 1,1,1-
trichloroethane ("TCA") that are used in the ordinary course of Seller's
Hangar Business in compliance with all Environmental Laws, no Seller has used,
generated, manufactured, stored, disposed of, on, under or about any of the
Properties or any other properties used by a Seller in the past, any Hazardous
Materials, (ii) no friable asbestos, polychlorinated biphenyls or
polychlorinated biphenyl compounds have been contained on or in any of the
Properties, nor have such substances been used in the construction, repair or
alteration of any portion of any real property owned, leased or used by a
Seller, and (iii) no Seller has used, generated, manufactured, stored,
disposed of, on, under or about any of the Properties or any other properties
used by a Seller in the past, any TCA.
(b) Except as set forth in Schedule 3.17, each Seller has
obtained all permits, licenses and other authorizations that are required
under Environmental Laws. Except as set forth in Schedule 3.19, each Seller
is in compliance with the terms and conditions under which the permits,
licenses and other authorizations referenced in the preceding sentence were
issued or granted.
(c) Except as set forth in Schedule 3.17, Seller has fully
complied with and no Seller is subject to any actual or potential liability
(fixed or contingent) under, any Environmental Laws.
(d) Except for spills, discharges, leaks, emissions,
injections, disposals, escape, dumpings or releases prior to June 30, 1994
(and as to which AlliedSignal has full responsibility for any liabilities or
obligations relating to such matters under the terms of the AlliedSignal
31
Purchase Agreement), and except as set forth on Schedule 3.17 there has been
no spill, discharge, leak, emission, injection, disposal, escape, dumping or
release of any kind on, beneath or above the Properties or into the
environment surrounding the Properties of any Hazardous Materials which
imposes on Seller or any party or individual on Sellers' Properties a
reporting, notification, remediation or other obligation under any
Environmental Laws.
Section 3.18. Compliance With Laws. Except as set forth on Schedule
3.18, each Seller has conducted its business and maintained its assets, rights
and properties in substantial compliance with all (and has not received any
notice of any claimed violation of any) Applicable Laws.
Section 3.19. Licenses and Permits. Except as set forth on
Schedule 3.19, each Seller possesses all licenses, permits, and other
governmental consents, certificates, approvals, or other authorizations (the
"Permits") necessary for the operation of their respective businesses.
Schedule 3.19 contains a list of all Permits held or applied for by each
Seller. Except as otherwise set forth on Schedule 3.19, (a) Seller has
complied with the terms and conditions of all Permits in all respects and all
such Permits are in full force and effect, and (b) there has occurred no event
nor is any event, action, investigation or proceeding pending or threatened,
which could cause or permit revocation or suspension of or otherwise adversely
affect the maintenance of any Permits. Except as set forth on Schedule 3.19,
the transactions contemplated by this Agreement will not lead to the
revocation, cancellation, termination or suspension of any Permits.
Section 3.20. Insurance. Schedule 3.20 sets forth a list and
description of all policies of fire, casualty, liability, worker's
compensation, life and other forms of insurance (excluding employee benefits
set forth on Schedule 3.15) carried by each Seller currently, including, with
respect to each policy, a description of the types and limits of the coverage,
the amount of premiums, the name of the carrier, the policy number, the
expiration date of the current premium period and the nature and amount of any
claims pending thereunder. Each Seller has delivered to Buyer a true,
complete and correct copy of each such insurance policy. Except as set forth
in Schedule 3.20, all insurance coverage has been maintained by each Seller
on an "occurrence" rather than a "claims made" basis and each Seller shall be
entitled to the full benefits of such insurance following Closing. Each
Seller has regularly maintained all insurance policies in amounts and types
required by law and generally carried by operators of similar businesses. No
Seller is in default with respect to any provision contained in any insurance
policy or has failed to give any notice or present any claim thereunder in due
and timely fashion and no cancellation or non-renewal has been threatened or
has occurred with respect to any policy.
Section 3.21. Claims of Directors, Officers, Etc. Except as set forth
on Schedule 3.21, no Employee or partner of a Seller, or any director, officer
or stockholder of CFC, either individually or in any other capacity, has a
claim of any kind whatsoever against a Seller (including, without limitation,
in respect of (i) loans extended to a Seller or (ii) any bonus or incentive
payments that relate to prior periods or which will become payable if the
transactions contemplated by this Agreement are consummated), except the right
to his or her current salary or wages, any accrued vacation pay, any benefits
due under an Employee Benefit Plan or Benefit Arrangements disclosed to Buyer
under Section 3.15 and any reimbursable expenses arising in the ordinary
course of business. Except as noted in the immediately preceding sentence,
32
no Seller has any obligation to any such person that has not been fully
performed.
Section 3.22. Extraordinary Transactions. Except as set forth on
Schedule 3.22, since October 31, 1995, no Seller has (i) mortgaged, pledged
or subjected to any Encumbrance any of the Assets; (ii) canceled or
compromised any claim of or debts owed to it; (iii) sold, licensed, leased,
exchanged or transferred any of its assets; (iv) sold, assigned, transferred
or licensed any of its Intellectual Property or Technology to any other party;
(v) waived any rights; (vi) entered into any material transaction; (vii)
suffered any material change in the relationship or course of dealing with any
customer, supplier or creditor; (viii) suffered any material destruction, loss
or damage to any of the Assets; (ix) made any management decisions involving
any material change in its policies with regard to pricing, sales, purchasing
or other business, financial, accounting (including reserves and the amounts
thereof) or Tax policies or practices; (x) declared, set aside or made any
distributions to its partners; (xi) submitted any bid, proposal, quote or
commitment to any Governmental Authority or third party in response to a
request for proposal or otherwise; (xii) engaged in any merger or
consolidation with, or agreed to merge or consolidate with, or purchased or
agreed to purchase, all or substantially all of the assets of, or otherwise
acquire, any other Person; (xiii) entered into any partnership, joint venture
or similar arrangement with any other Person; (xiv) incurred or agreed to
incur indebtedness for borrowed money; (xv) issued or agreed to issue to any
party, any securities; (xvi) redeemed, purchased or agreed to redeem or
purchase any of its outstanding securities; (xvii) increased the rate of
compensation payable or to become payable to CFC or any of Seller's officers,
directors, Employees or agents who receive more than $75,000 as a base salary
over the rate being paid to them as of October 31, 1995 or agreed to do so
otherwise than in accordance with contractual agreements with such parties
and, in the case of Employees other than Hangar Managers, other than year end
increases made in the ordinary course of business consistent with past
practice; or (xviii) charged off any bad debts or increased its bad debt
reserve except in the manner consistent with its past practices which have
been disclosed to Buyer; except, with respect to the foregoing items set forth
in clauses (i) through (xviii) above where such transactions, events or
occurrences took place in the ordinary course of the Business consistent with
past practices.
Section 3.23. Broker and Finder Fees. Except as set forth in Schedule
3.23, neither Seller nor CFC, nor any of their respective Affiliates, have
engaged any broker or finder in connection with the transactions contemplated
by this Agreement, and no action by any of the foregoing will cause or support
any claim to be asserted against Buyer or the Seller by any broker, finder or
intermediary in connection with such transaction.
Section 3.24. Assets.
(a) Except as described on Schedule 3.24, each Seller has
good and marketable title to its assets, rights and properties, free and clear
of restrictions on or conditions to transfer or assignment, and free and clear
of all Encumbrances. As of the Closing, Buyer will obtain good and marketable
title to the Assets, free and clear of all Encumbrances.
(b) The Assets constitute all of the tangible and
intangible assets and interests owned or used by each Seller in the Business
other than the Excluded Assets, and are sufficient to enable Buyer to continue
33
to conduct the Business after the Closing in the manner in which the Business
has been conducted by Seller.
(c) All of the tangible assets of each Seller used by the
Sellers in the Business (whether owned or held under lease) have been repaired
or maintained consistently with the past practices of the Sellers (and in
accordance with the terms of any manufacturers' warranty requirements), are
in good operating condition and repair (normal wear and tear excepted), free
from material defects, suitable for their intended uses in the ordinary course
of the Business of the Sellers and located on the Properties (except for
assets at other locations which have a dollar value of not more than $50,000
in the aggregate).
(d) All equipment owned, leased or used by each Seller in
the Business conforms in substantial respects with all Applicable Laws. No
Applicable Law or any other impediment of any kind prohibits, interferes with,
limits or impairs, or could, if enforced, prohibit, interfere with, limit or
impair the use, operation or maintenance of any of the equipment or personal
property included among the Assets or the conduct of the Business of Sellers
as currently conducted.
Section 3.25. Related Party Transactions. Schedule 3.25 contains a
description of any and all transactions, Contracts and other arrangements to
which a Seller is a party, or to which a Seller was a party at any time from
and after December 31, 1994, involving the furnishing of services to a Seller
by, the rental or purchase of real or personal property by a Seller from, or
otherwise involving payments by a Seller to, CFC, any officer, director or
stockholder of CFC, any Affiliate of any such party, any relative of any such
party or any partnership, joint venture, limited liability company or
corporation in which any such party is or was a member, partner or stockholder
or any partner or Affiliate of a Seller.
Section 3.26. No Adverse Change or Conditions. Except as set forth in
Schedule 3.26, since October 31, 1995, each Seller (i) has conducted its
business in the ordinary course and consistent with past practice, and (ii)
has not suffered any change that has had a Material Adverse Effect. There are
no conditions, facts, developments or circumstances of an unusual or special
nature that reasonably could be expected to have a Material Adverse Effect
upon a Seller.
Section 3.27. Product and Service Warranty. Each product repaired or
delivered and service rendered by a Seller with respect to the Business has
been in conformity in all material respects with all applicable contractual
commitments and all express and implied warranties given by a Seller. Except
as set forth on Schedule 3.27, no product repaired or delivered or service
rendered by a Seller during the one-year period prior to the date hereof is
subject to any guaranty, warranty or other indemnity with a term in excess of
12 months from the date such product was repaired or delivered or such service
was rendered. Prior to the date hereof, each Seller has delivered to Buyer
copies of the terms and conditions of sale for products delivered and services
rendered by such Seller and a copy of applicable guarantees, warranties and
indemnities.
Section 3.28. Interstate Commerce Act. Neither the operations of the
business of a Seller nor any of the Assets or Properties is subject to
regulation under the Interstate Commerce Act nor does a Seller own or operate
34
any common or contract carrier within the meaning of the Interstate Commerce
Act that is subject to the jurisdiction of the Interstate Commerce Commission
or the Federal Energy Regulatory Commission or any state or local public
utility commission, public service commission or any other similar
Governmental Authority.
Section 3.29. Adequate Disclosure. No representation or warranty made
by a Seller in this Agreement, or any statement contained in any Exhibit or
Schedule to this Agreement, or any certificate or document furnished or to be
furnished to Buyer pursuant to the terms of this Agreement in connection with
the transactions contemplated hereby, contains, or will contain, any untrue
or misleading statement of a material fact or omits, or will omit, to state
a material fact necessary in order to make the statements contained therein,
in light of the circumstances under which they were made and taken as a whole
not misleading. There is no fact which the Sellers and CFC have not disclosed
to Buyer in writing which has had or would reasonably be expected to have a
Material Adverse Effect.
* * * * *
The actual knowledge of each of the Hangar Managers shall only be attributed
to the Seller (for purposes of determining the Knowledge of the Seller as set
forth in the preamble to this Article III) with respect to the representations
and warranties contained in Sections 3.8; 3.10; 3.11; 3.12; 3.13; 3.15; 3.17;
3.18; 3.19; 3.24; and 3.26 of this Article III. Furthermore, the actual
knowledge of each Hangar Manager that shall be relevant and applicable to each
such representation and warranty shall be limited to the actual knowledge of
such Hangar Manager only insofar as the Hangar Manager's actual knowledge
relates directly to the facility at which he is located or the Seller's
business conducted at or from such facility.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND BUYER'S PARENT
----------------------------------------------------------
Buyer and Buyer's Parent represent and warrant to and for the benefit
of Seller as follows:
Section 4.1. Organization and Good Standing. Each of Buyer and Buyer's
Parent is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and has full corporate power and
authority to carry on its businesses as it is now being conducted.
Section 4.2. Execution and Effect of Agreement. Each of Buyer and
▇▇▇▇▇'s Parent has the corporate power to enter into, execute and deliver this
Agreement and the Collateral Agreements, to perform its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement, the consummation by
each of Buyer and ▇▇▇▇▇'s Parent of the transactions contemplated hereby and
the performance of its obligations hereunder have been duly authorized by all
necessary corporate action on the part of Buyer and ▇▇▇▇▇'s Parent,
respectively. This Agreement has been duly executed and delivered by each of
Buyer and ▇▇▇▇▇'s Parent and constitutes a legal, valid and binding obligation
of each of Buyer and ▇▇▇▇▇'s Parent, enforceable against Buyer and ▇▇▇▇▇'s
Parent in accordance with its terms.
35
Section 4.3. Restrictions. The execution and delivery by each of Buyer
and ▇▇▇▇▇'s Parent of this Agreement and the Collateral Agreements, the
consummation of the transactions contemplated hereby and thereby and the
performance of the obligations hereunder and thereunder will not violate any
of the provisions of the charter or by-laws of Buyer or Buyer's Parent or the
laws of the jurisdiction in which Buyer and Buyer's Parent are incorporated.
Section 4.4. No Consents. Except as set forth in Schedule 4.4, and
except for filings, consents, waivers, approvals and authorizations required
under the H-S-R Act, no filing with, or consent, waiver, approval or
authorization of, or notice to, any Governmental Authority or any third party
is required to be made or obtained by Buyer or Buyer's Parent in connection
with the execution and delivery of this Agreement or the Collateral
Agreements, the consummation of any of the transactions contemplated hereby
or thereby or the performance of any of its respective obligations hereunder
or thereunder.
Section 4.5. No Broker. Except as set forth in Schedule 4.5, neither
Buyer nor any of its Affiliates has engaged any broker or finder in connection
with the transactions contemplated by this Agreement, and no action by Buyer
will cause or support any claim to be asserted against Seller by any broker,
finder or intermediary in connection with such transaction.
Section 4.6. UNC Status. Each of Buyer, ▇▇▇▇▇'s Parent and their
Affiliates are not a "Competitor" as that term is defined in Section 18(c) of
the ASE Operating Agreement.
ARTICLE V
PRE-CLOSING COVENANTS AND AGREEMENTS OF SELLER AND CFC
------------------------------------------------------
Section 5.1. Status. From and after the date hereof through and
including the Closing Date, each Seller shall take all actions that in the
reasonable opinion of Buyer are necessary or appropriate to maintain the
status of Seller as a limited partnership or limited liability company, as
appropriate, validly existing and in good standing under the laws of the State
of Delaware and to maintain its qualification(s) as a foreign partnership or
limited liability company, as appropriate, in good standing under the laws of
each jurisdiction in which the conduct of its business or the ownership or
operation of its assets and properties requires such qualification.
Section 5.2. Access to Information. Except as prohibited or limited
by Applicable Laws and subject to the provisions set forth in Section 11.6 of
this Agreement, each Seller shall, and CFC shall cause each Seller to, from
and after the date of this Agreement and until the Closing Date, give Buyer
and Buyer's employees, counsel, accountants and agents, full and complete
access upon reasonable notice during normal business hours, to all properties,
agreements, records, employees and affairs of each Seller and CFC, and provide
copies of such information concerning each Seller and CFC as Buyer may
reasonably request.
Section 5.3. Conduct of Business to Closing. Except as contemplated
by this Agreement, from and after the date hereof through and including the
Closing Date, each Seller shall, and CFC shall cause each Seller to, conduct
its business in the ordinary course consistent with past practice and in
accordance with all Applicable Laws, and each Seller and CFC shall use their
best efforts to preserve the business and goodwill of each Seller. Without
36
limiting the generality of the foregoing, except as expressly contemplated by
this Agreement or as consented to by ▇▇▇▇▇ in writing, each Seller and CFC,
as applicable, shall act as follows from and after the date hereof through and
including the Closing Date:
(a) No Seller will adopt any change in any method of
accounting or accounting practice, except as required by GAAP;
(b) Except in the ordinary course of business and
consistent with past practice, or as required by Applicable Laws, no Seller
will enter into or amend in any material respect any Employee Benefit Plan;
(c) No Seller will merge or consolidate with, or agree to
merge or consolidate with, or purchase or agree to purchase all or
substantially all of the assets or securities of, or otherwise acquire, any
other business entity;
(d) No Seller will authorize for issuance, issue or sell,
or agree to issue or sell, any additional securities or any securities or
obligations convertible into its securities or issue or grant any option,
warrant or other right to purchase any of its securities (it being understood
that Buyer shall not assume or have any liability with respect to or relating
to the issuance of such securities);
(e) No Seller will make any loans, advances or capital
contributions to or investments in, any Person other than intercompany loans
▇▇▇▇▇▇▇ may extend to Jet Center in the ordinary course of business consistent
with past practices.
(f) No Seller will assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other Person;
(g) Except as required by law or contractual obligations
existing on the date hereof that are contained in Contracts in effect on the
date hereof, no Seller will (i) increase in any manner the compensation (other
than increases in the ordinary course of business and consistent with past
practice) of, or enter into any new bonus or incentive agreement or
arrangement with, any of its Employees or any officer, director or employee
of CFC, (ii) pay or agree to pay any pension, retirement allowance or similar
employee benefit to any Employee or any officer, director or employee of CFC,
(iii) enter into any new employment, severance, consulting or other
compensation agreement with any existing Employee or any officer, director or
employee of CFC, or (iv) commit itself to any additional pension, profit-
sharing, deferred compensation, group insurance, severance pay, retirement or
other employee benefit plan, fund or similar arrangement or amend or commit
itself to amend any of such plans, funds or similar arrangements in existence
on the date hereof;
(h) Except as required by law or contractual obligations
existing on the date hereof that are contained in Contracts disclosed in
Schedule 3.12 in effect on the date hereof, no Seller will outside of the
ordinary course of business consistent with past practices (i) sell, transfer
or otherwise dispose of any of its assets without replacement thereof by a
substantially equivalent asset of substantially equivalent kind, or (ii)
create any Encumbrance on any of its Properties or the Assets. No Seller
37
shall enter into or become a member or partner of any joint venture,
partnership, limited liability company or other similar arrangement;
(i) No Seller will enter into any new Contract that
reasonably can be expected to result in payments to or from Seller in excess
of $100,000 (other than contracts entered into in the ordinary course of
business consistent with past practice) during the 12-month period commencing
on the Closing Date;
(j) No Seller shall engage in any promotional sales or
discount or other activities with customers that would reasonably be expected
to have the effect of accelerating to pre-closing periods sales that otherwise
would be expected to occur in post-closing periods;
(k) No Seller will agree to take any action prohibited by
this Section 5.3;
(l) CFC shall not permit or allow a Seller to take any
action prohibited by this and Section 5.3; and
(m) Sellers shall not amend, modify or waive any rights
under the ASE Operating Agreement or the AlliedSignal Purchase Agreement (or
agree to do any of the foregoing) other than in the manner contemplated by
items 1, 2, 4, 5 and 6 of Schedule 3.13(a) to this Agreement (it being
understood that Seller shall not amend, modify or waive the ASE Operating
Agreement, or agree to do any of the foregoing, with respect to the matters
set forth at item 3 to Schedule 3.13(a) to this Agreement).
Section 5.4. Consents. Each Seller and CFC shall, and CFC shall cause
each Seller to, use their respective best efforts to obtain all consents,
waivers, approvals and authorizations and make all filings with and give all
notices that may be necessary or reasonably required on the part of CFC or a
Seller to consummate the transactions contemplated hereby, including, without
limitation, the Required Consents.
Section 5.5. Certain Employee Benefit Matters.
(a) Each Seller shall before the Closing Date, and CFC
shall cause each Seller to, make and pay before the Closing Date or accrue on
the Closing Balance Sheet all contributions and premiums, with respect to
liabilities arising under (or that will arise in the future in respect of
periods prior to and through Closing) any Benefit Arrangements or Employee
Benefit Plans on or prior to the Closing Date, including, but not limited to,
any and all contributions to all tax-qualified plans, the contribution
obligations for which have accrued or will accrue with respect to periods
ending on or prior to the Closing Date.
(b) Each Seller shall, and CFC shall cause each Seller to,
discharge all of its liabilities under any Benefit Arrangements or Employee
Benefit Plans.
(c) Sellers represent and warrant that they do not have any
defined benefit or money purchase pension plan. Sellers have developed a
retiree medical plan (a summary of which has been provided to Buyer) which has
been presented to and approved by the Board of Directors of Seller. Such
retiree medical plan has not been broadly communicated to Sellers' Employees
38
and has not been implemented and Seller is not legally obligated to implement
such plan. Sellers covenant and agree that as provided in Section 5.3 they
shall not adopt or commit to adopt any pension plan or implement such retiree
medical plan prior to Closing or commit or take any action that would require
Buyer to implement the retiree medical plan following Closing.
Section 5.6. Public Statements. From and after the date hereof until
the earlier of the Closing or the termination of this Agreement, neither
Seller nor CFC shall release any information concerning this Agreement or the
transactions contemplated hereby that is intended for or is reasonably likely
to result in public dissemination thereof without the prior written consent
of Buyer, unless in the reasonable opinion of counsel to Seller, the release
of such information is required by law. In any such case, the parties shall
consult in good faith with each other concerning the release of such
information.
Section 5.7. Update of Disclosure. From and after the date hereof
through and including the Closing Date, each Seller shall promptly notify
Buyer of the occurrence of any facts or circumstances that would have required
disclosure pursuant to the representations and warranties contained in ARTICLE
III hereof if such facts or circumstances had been known to a Seller prior to
the execution of this Agreement and of any other matters that would cause any
representation or warranty contained herein to be untrue, incorrect or
misleading in any respect.
Section 5.8. H-S-R Act Filings. The Sellers shall (i) make and
cooperate with Buyer in the preparation and filing of any and all filings that
are or in the reasonable opinion of Buyer's counsel may be required under the
H-S-R Act, (ii) cooperate with Buyer, and use their reasonable efforts, to
ensure that any pre-acquisition waiting period required by the H-S-R Act
expires or is otherwise terminated, and (iii) comply promptly with any request
made pursuant to the H-S-R Act or the regulations thereunder.
Section 5.9. Employee Matters.
(a) Each Seller shall, and CFC shall cause each Seller to,
comply with all Applicable Laws regarding notice of employment termination,
including applicable plant closing laws, and the right to continue or convert
health insurance coverage (including, but not limited to Part 6 of Title I of
ERISA) as they relate to events occurring on or prior to the Closing Date.
Each Seller shall be solely responsible for the issuance of the notices and
any other actions required by these laws. Buyer hereby represents that it
shall offer employment to all employees of each Seller on terms and conditions
equivalent to or better than that in place with each Seller (exclusive of
arrangements with respect to equity securities or similar matters). Each
Seller shall be entitled to rely on this representation in discharging its
obligations under this Section 5.9(a).
(b) Each Seller shall use reasonable efforts to cause all
of its Employees to accept such employment with Buyer.
Section 5.10. Financial Statements.
(a) The Sellers shall use their reasonable efforts to cause
AlliedSignal (and its employees and independent accountants) to provide Buyer
(and its employees, accountants and other representatives) with access to the
39
accounting records, work papers and other books and records relating to the
AlliedSignal Engine Division for the year 1993 and for the first six months
of 1994, and to cause AlliedSignal to provide Buyer with appropriate audited
financial statements of the "Hangar Business" Seller acquired from Allied
Signal pursuant to the AlliedSignal's Purchase Agreement (as the term "Hangar
Business" is defined in the AlliedSignal Purchase Agreement) for the year
ended December 31, 1993 and the six months ended June 30, 1994 (the
"Predecessor Financial Statements"). The Sellers shall use their reasonable
efforts to cause AlliedSignal to agree to consent to the inclusion of the
Predecessor Financial Statements (and to cause AlliedSignal independent public
accountants to agree to consent to the inclusion of their audit reports
thereon) in filings Buyer's Parent may make from time to time with the SEC (or
in any disclosure documents Buyer's Parent may utilize in connection with an
offering of its securities in a transaction exempt from registration under the
Securities Laws) prior to and following Closing in accordance with applicable
Securities Laws. ▇▇▇▇▇ agrees that Buyer shall pay any direct costs and
expenses AlliedSignal may incur in connection with providing the Predecessor
Financial Statements and the other materials referenced above, including the
reasonable fees and expenses of AlliedSignal's independent public accountants.
Buyer shall also agree to indemnify and hold AlliedSignal harmless from and
against any losses, damages, costs or expenses AlliedSignal may suffer as a
consequence of Buyer's use of the Predecessor Financial Statements.
(b) The Sellers shall cause ▇▇▇▇▇ & Young to complete the
audit of Sellers' financial statements for the year ended December 31, 1995
no later than February 28, 1996. The Sellers shall consult with and cause
▇▇▇▇▇ & ▇▇▇▇▇ to consult with and make its workpapers available to Buyer as
the audit progresses. The Sellers shall deliver their audited financial
statements for the year ended December 31, 1995 (the "1995 Audited
Statements") to Buyer as soon as they become available. In the event that the
1995 Audited Statements are delivered to Buyer after February 28, 1996 the
provisions set forth in Sections 9.1, 10.1 and 10.2 hereof shall be adjusted
appropriately to take into account Sellers' late delivery of such financial
statements (it being understood that, consistent with the terms of Section
9.4, Buyer shall not be obligated to pay any Delayed Closing Fee to Seller).
In addition to the foregoing, and notwithstanding anything contained in this
Agreement to the contrary, Sellers shall not be liable to pay the Definitive
Agreement Break-Up Fee to Buyer in any circumstances, in the event Sellers do
not deliver the 1995 Audited Statements to Buyers by the close of business
Phoenix time on March 15, 1996.
(c) In the event that ▇▇▇▇▇'s Parent determines it is
advisable to include audited and/or unaudited financial statements of the
Seller (including the Financial Statements and the 1995 financial statements
referenced in Section 5.10(b)) in any filings with the SEC (or in any
disclosure documents Buyer's Parent may utilize in connection with an offering
of its securities in a transaction exempt from registration under the
Securities Laws), the Seller shall provide Buyer's Parent with its audited and
unaudited financial statements for such periods and at such dates as ▇▇▇▇▇'s
Parent may request. Such financial statements shall be provided to ▇▇▇▇▇'s
Parent as soon as is reasonably practicable. Seller shall also promptly
provide to ▇▇▇▇▇'s Parent consents from Ernst & ▇▇▇▇▇ to the inclusion of its
audit reports in filings with the SEC (or in any disclosure documents Buyer's
Parent may utilize in connection with an offering of its securities in a
transaction exempt from registration under the Securities Laws), "comfort
letters," and such other assurances from Ernst & Young that may be reasonably
40
requested by ▇▇▇▇▇'s Parent or any underwriter, placement agent or purchaser
of Buyer's Parent securities with respect to any financial statements provided
to ▇▇▇▇▇'s Parent pursuant to this Section 5.10.
Section 5.11. Closing Conditions. Each of the Sellers and CFC shall
cause all of the conditions precedent to ▇▇▇▇▇'s obligation to close the
transactions contemplated by this Agreement to be satisfied.
ARTICLE VI
PRE-CLOSING COVENANTS AND AGREEMENTS OF BUYER
---------------------------------------------
Section 6.1. Public Statements. From and after the date hereof through
the Closing Date, Buyer and ▇▇▇▇▇'s Parent shall not release any information
concerning this Agreement or the transactions contemplated hereby that is
intended for or is reasonably likely to result in public dissemination thereof
without the prior written consent of the Sellers, unless in the reasonable
opinion of counsel to Buyer, the release of such information is required by
law. In any such case, the parties shall consult in good faith with each
other concerning the release of such information. Nothing contained herein
shall prevent ▇▇▇▇▇'s Parent from including the financial statements of the
Sellers and the Predecessor Financial Statements, and information concerning
this Agreement and the Sellers in any registration statement Buyer's Parent
may file with the SEC (or in any disclosure documents Buyer's Parent may
utilize in connection with an offering of its securities in a transaction
exempt from registration under the Securities Laws) with respect to the
offering of its securities in accordance with applicable Securities Laws.
Section 6.2. Consents. From and after the date hereof through the
Closing Date, Buyer shall use reasonable efforts to obtain all consents,
waivers, approvals and authorizations and make all filings with and give all
notices that may be necessary or reasonably required on the part of Buyer to
consummate the transactions contemplated hereby.
Section 6.3. H-S-R Act Filings. Buyer shall (i) make and cooperate
with the Sellers in the preparation and filing of any and all filings that are
or may be required under the H-S-R Act, (ii) cooperate with the Sellers, and
use its reasonable efforts, to ensure that any pre-acquisition waiting period
required by the H-S-R Act expires or is otherwise terminated, and (iii) comply
promptly with any request made pursuant to the H-S-R Act or the regulations
thereunder.
Section 6.4. Employees. Buyer shall assume the Employment Agreements
set forth on Schedule 3.12 to which each Hangar Manager is presently a party.
Buyer shall negotiate in good faith a one-year employment contract with ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇, and a three-year employment agreement with each of ▇▇▇▇▇ ▇.
▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. Each of the employment
agreements shall be on financial terms and conditions equivalent to or better
than those contained in the Employment Agreements set forth on Schedule 3.12
to which each of the foregoing persons is a party (exclusive of arrangements
with respect to equity securities), respectively (it being understood that the
employment agreements shall contain covenants limiting the freedom of each of
the executive officer to compete with Buyer for a period up to two years
following the termination of employment). Buyer hereby represents that it
shall offer employment to all other employees of each Seller on terms and
conditions equivalent to or better than that in place with each Seller
41
(exclusive of arrangements with respect to equity securities or other similar
matters).
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
--------------------------------------------
The obligations of Buyer to consummate the purchase of the Assets on the
Closing Date and to perform its other obligations under this Agreement which
are to be performed at and after the Closing are subject to the satisfaction
on or prior to the Closing Date of each of the conditions precedent set forth
in this ARTICLE VII:
Section 7.1. Representations and Warranties True. Each of the
representations and warranties of each Seller contained in this Agreement
shall have been true and correct in all material respects on and as of the
date hereof and shall be true and correct in all material respects on and as
of the Closing Date with the same effect as though made on and as of the
Closing Date, except for representations and warranties that speak only as to
matters existing as of a specific date or time other than the Closing Date
(which need only be true and correct as of such date or time).
Section 7.2. Covenants and Agreements--No Default. Each Seller and CFC
shall have performed and complied in all material respects with all covenants
and agreements required by this Agreement to be performed or complied with by
them on or prior to the Closing Date.
Section 7.3. Certificate. Each of the Sellers and CFC shall have
delivered to Buyer a certificate, dated the Closing Date, to the effect that
the conditions set forth in Sections 7.1 and 7.2 have been satisfied.
Section 7.4. Employment Agreements. ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have
entered into the Employment Agreement with ▇▇▇▇▇, shall have executed and
delivered the Employment Agreement to Buyer and shall be physically and
mentally able to perform his obligations thereunder. There shall have been
no breach or anticipatory breach by ▇▇. ▇▇▇▇▇▇▇ prior to or as of the Closing,
and the Employment Agreement shall be in full force and effect and shall not
have been repudiated as of the Closing.
Section 7.5. No Material Adverse Change. The Sellers, taken as a
whole, shall not have suffered any change that has, as of the Closing, or will
have after the Closing, a Material Adverse Effect on a Seller or on Buyer
following Closing.
Section 7.6. Seller Consents/Certain Assurances.
(a) Each Seller and CFC shall have obtained the Required
Consents. Buyer shall have obtained (or be reasonably satisfied that it will
obtain) or had transferred from each Seller to Buyer all other Licenses and
Permits except where the failure to obtain such License or Permit would not
have a Material Adverse Effect on the Business.
(b) ▇▇▇▇▇▇▇ and CFC shall have duly and validly assigned
all of ▇▇▇▇▇▇▇'▇ right to continue to use the "▇▇▇▇▇▇▇ Aviation" trademark,
tradename and servicemark on a fully paid-up and royalty free basis and on a
month to month basis as presently enjoyed by Sellers.
42
(c) The Sellers shall have entered into a definitive
agreement in form and substance satisfactory to Buyer with respect to the
purchase of Air Supply parts which shall be fully assignable to Buyer.
(d) Each Seller shall have provided Buyer with evidence
reasonably satisfactory to Buyer of the release and discharge of the
Encumbrances created to secure any of the Excluded Liabilities.
(e) Seller shall have provided Buyer with evidence or
assurances satisfactory to Buyer that all agreements and arrangements
(including, without limitation, management agreements) between or among each
Seller and CFC or any Affiliate of CFC shall have been terminated in a manner
which will not give rise to any liability or obligation on the part of Buyer
following Closing.
(f) Sellers shall provide Buyer with an executed copy of
an executed services agreement with I-NET, Inc., a Maryland corporation, in
the form previously provided to Buyer by Sellers, and such agreement shall
have been validly assigned to Buyer.
(g) Buyer shall have become reasonably satisfied that it
shall not have or succeed to any liability or liabilities arising out of or
related to the Piper Aztec aircraft accident and related deaths referenced on
Schedule 3.8 to this Agreement.
Section 7.7. Buyer Consents. Buyer shall have obtained all consents,
waivers, approvals and authorizations required on the part of Buyer for the
consummation of the transactions contemplated by this Agreement set forth on
Schedule 4.4 to this Agreement.
Section 7.8. No Injunction. At the Closing Date, (i) there shall be
no injunction, restraining order or decree of any nature of any court or other
Governmental Authority of competent jurisdiction that is in effect that
restrains or prohibits the consummation of the transactions contemplated
hereby; (ii) no action, suit, proceeding or investigation instituted by a
Governmental Authority shall be pending before any court or Governmental
Authority to restrain or prohibit the consummation of the transactions
contemplated hereby; and (iii) none of the parties hereto shall have received
notice from any Governmental Authority of its intention to institute any
action, suit, proceeding or investigation.
Section 7.9. Closing Documents. Each Seller shall have provided Buyer
with all of the instruments of transfer requested by Buyer pursuant to Section
2.6 and all of the other documents required by Section 9.2 to be delivered at
Closing by a Seller.
Section 7.10. Financing. Buyer shall have obtained equity or debt
financing, on terms and conditions satisfactory to Buyer, in its sole
discretion, for the full amount of the Cash Consideration and in an amount
sufficient, in the reasonable judgment of Buyer, to satisfy its working
capital requirements with respect to the conduct of the Business from and
after the Closing.
Section 7.11. Due Diligence. Buyer shall be satisfied in its sole
discretion with the results of its due diligence review of the Assets and
Properties, the legal and financial condition of each Seller, the business and
43
operations of each Seller, the accounting records of each Seller and
environmental matters relating to the Business and operations of each Seller
(it being understood that information learned during such review shall not
qualify or be deemed to have any effect on the representations and warranties
made by a Seller in this Agreement). Prior to Closing, ▇▇▇▇▇ shall notify the
Sellers promptly if it learns of a breach of a representation or warranty made
by a Seller pursuant to this Agreement during the period of time from the date
of this Agreement through Closing.
Section 7.12. Board Approval. The Board of Directors of Buyer and
▇▇▇▇▇'s Parent shall have approved and authorized the execution and delivery
by Seller of this Agreement and each of the Collateral Agreements, and the
consummation of the transactions contemplated hereby and thereby by ▇▇▇▇▇.
Section 7.13. H-S-R Approval. The parties shall have received H-S-R
Approval for the transactions contemplated by this Agreement.
Section 7.14. Financial Statements. Buyer shall have received audited
financial statements of the Sellers for the year ended December 31, 1995 at
least thirty days prior to Closing. Buyer shall have received either (i) the
Predecessor Financial Statements, accompanied by appropriate audit opinion
letters, consents and agreements from AlliedSignal and the auditors of the
Predecessor Financial Statements with respect to the inclusion of the
Predecessor Financial Statements and the audit reports thereon in any filings
to be made by Buyer with the SEC from time to time (or in any disclosure
documents Buyer's Parent may utilize from time to time in connection with an
offering of its securities in a transaction exempt from registration under the
Securities Laws), and the provision of "comfort letters" to underwriters,
placement agents or purchasers of Buyer's Parent securities from time to time,
and such other assurances from the auditors of the Predecessor Financial
Statements that may be reasonably requested by Buyer or any underwriter,
placement agent or purchaser of the securities of Buyer with respect to any
such financial statements, or (ii) a waiver or exemption from the SEC stating
that ▇▇▇▇▇'s Parent will not be required to include the Predecessor Financial
Statements in its filings with the SEC.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
---------------------------------------------
The obligation of Seller to consummate the sale of the Assets on the
Closing Date and to perform its other obligations under this Agreement which
are to be performed at or after the Closing are subject to the satisfaction
on or prior to the Closing Date of the conditions precedent set forth in this
ARTICLE VIII:
Section 8.1. Representations and Warranties True. Each of the
representations and warranties of Buyer contained in this Agreement shall have
been true and correct in all material respects on and as of the date hereof
and shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though made on and as of the Closing
Date, except for representations and warranties that speak only as to matters
existing as of a specific date or time other than the Closing Date (which need
only be true and correct as of such date or time).
44
Section 8.2. Covenants and Agreements--No Default. Buyer shall have
performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by
Buyer on or prior to the Closing Date.
Section 8.3. Certificate. Buyer shall have delivered to the Sellers
a certificate, dated the Closing Date and signed by an executive officer of
Buyer, to the effect that the conditions set forth in Sections 8.1 and 8.2
have been satisfied.
Section 8.4. No Injunction. At the Closing Date, (i) there shall be
no injunction, restraining order or decree of any nature of any court or other
Governmental Authority of competent jurisdiction that is in effect that
restrains or prohibits the consummation of the transactions contemplated
hereby; (ii) no action, suit, proceeding or investigation instituted by a
Governmental Authority shall be pending before any court or Governmental
Authority to restrain or prohibit the consummation of the transactions
contemplated hereby; and (iii) none of the parties hereto shall have received
notice from any Governmental Authority of its intention to institute any
action, suit, proceeding or investigation.
Section 8.5. Closing Documents. Buyer shall have provided the Sellers
with all of the documents required by Section 9.3 to be delivered at the
Closing by ▇▇▇▇▇.
Section 8.6. H-S-R Approval. The parties shall have received H-S-R
Approval for the transactions contemplated by this Agreement.
ARTICLE IX
CLOSING
Section 9.1. Closing.
(a) The Closing contemplated by this Agreement shall take
place at the offices of Gray ▇▇▇▇ ▇▇▇▇ & Freidenrich, a Professional
Corporation, at 10:00 a.m., on March 31, 1996, or at such other place and at
such other time and date as may be mutually agreed upon in writing by ▇▇▇▇▇
and Sellers, upon fulfillment of (i) all the conditions set forth in
ARTICLE VII that have not been waived in writing by Buyer, and (ii) all of the
conditions set forth in ARTICLE VIII that have not been waived in writing by
the Sellers. If any of the conditions to the obligations of the parties have
not been satisfied or waived in writing by March 31, 1996, the Closing shall
take place within five (5) business days following the satisfaction or waiver
of all such conditions, but in no event later than June 30, 1996, unless
otherwise agreed in writing by ▇▇▇▇▇ and Sellers.
(b) All proceedings to be taken and all documents to be
executed and delivered by the Sellers in connection with the consummation of
the transactions contemplated hereby shall be reasonably satisfactory in form
and substance to Buyer and its counsel. All proceedings to be taken and all
documents to be executed and delivered by ▇▇▇▇▇ in connection with the
consummation of the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to Seller and their counsel. All
proceedings to be taken and all documents to be executed and delivered on the
Closing Date by the parties shall be deemed to have been taken and executed
45
simultaneously, and no proceedings shall be deemed taken nor any documents
executed or delivered until all have been taken, executed or delivered.
Section 9.2. Documents to be Delivered by Sellers. On the Closing
Date, the Sellers shall deliver, or shall cause to be delivered, to Buyer the
following:
(a) A Certificate of the Secretary of CFC, dated the
Closing Date, certifying that attached thereto are true and complete copies
of (i) consents of the partners of ▇▇▇▇▇▇▇, the members of Jet Center and
resolutions of the Board of Directors of CFC, which authorize (a) the
execution and delivery by each Seller of this Agreement and each of the
Collateral Agreements, and (b) the consummation of the transactions contem-
plated hereby and thereby by each Seller; and (ii) the certificate of limited
partnership and partnership agreement of ▇▇▇▇▇▇▇, the articles of organization
and operating agreements of Jet Center and the charter and bylaws of CFC, each
as in effect as of the date of such certification, and certifying the identity
and incumbency of the officers and directors of CFC;
(b) A good standing certificate dated as of a date
reasonably close to the Closing Date of CFC and each Seller;
(c) An opinion letter from Gray ▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇,
a Professional Corporation, counsel to Sellers, in the form attached hereto
as Exhibit F;
(d) A bill of sale and other instruments of conveyance
referenced in Section 2.6 of this Agreement; and
(e) Such other documents, instruments or agreements as may
be reasonably requested by Buyer to effectuate the transactions contemplated
by this Agreement.
Section 9.3. Documents to be Delivered by ▇▇▇▇▇. On the Closing Date,
▇▇▇▇▇ shall deliver to Sellers the following:
(a) Evidence reasonably satisfactory to the Sellers of (i)
a wire transfer of funds to the account designated by the Sellers in the
amount of the Cash Consideration as adjusted in accordance with Section 2.4,
less the Closing Holdback, and (ii) a wire transfer of funds to the account
designated by the Escrow Agent in the amount of the Closing Holdback.
(b) A certificate of the Secretary or an Assistant
Secretary of Buyer, dated the Closing Date, certifying that attached thereto
are true and complete copies of (i) the resolutions of the Board of Directors
of Buyer which authorize (a) the execution and delivery of this Agreement and
each of the Collateral Agreements and (b) the consummation of the transactions
contemplated hereby and thereby, and certifying that such resolutions have not
been amended or rescinded and are in full force and effect; and (ii) the
Charter and By-laws of Buyer as in effect as of the date of such
certification; and certifying the identity and incumbency of the officers of
Buyer;
(c) An opinion letter of ▇▇▇▇▇ & Stockbridge, a
Professional Corporation, counsel to ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, General
Counsel to Buyer's Parent, in the forms attached hereto as Exhibits G-1 and
G-2; and
46
(d) Such other documents, instruments or agreements as may
be reasonably requested by the Sellers to effectuate the transactions
contemplated by this Agreement.
Section 9.4. Fee for Delayed Closing. Except as otherwise provided in
this Section 9.4, if the Closing shall not occur prior to the close of
business on March 31, 1996, and the Agreement has not been sooner terminated
or terminated on that date in accordance with Section 10.1, the Sellers and
CFC shall be entitled to receive from Buyer, collectively and in the
aggregate, a payment in the amount of the Delayed Closing Fee, which amount
shall be paid by wire transfer to an account or accounts designated by Sellers
and CFC prior to such date no later than April 7, 1996, and shall be deemed
to be an increase to the Purchase Price and the Cash Consideration if the
Closing shall nevertheless occur after such date. Notwithstanding the
foregoing, however, the Delayed Closing Fee shall not be due and payable by
Buyer if the Closing shall not occur by March 31, 1996 due to (i) the
continuing failure of a Seller or CFC (or their respective officers,
employees, directors, agents or legal counsel) to cooperate reasonably with
Buyer in connection with the Agreement, the preparation and negotiation of the
Collateral Agreements and the other documents, instruments, certificates and
other agreements contemplated by this Agreement and the Collateral Agreements
or in connection with the scheduling and consummating the Closing following
notice to the CFC Board of Directors and allowing for a reasonable period to
cure such lack of cooperation, (ii) any of the conditions precedent to the
obligations of Buyer that are set forth in Sections 7.1 (Representations and
Warranties of Seller True), 7.2 (No Default in Covenants and Agreements by
Seller), 7.3 (Seller Certificates), 7.4 (Employment Agreements), 7.5 (No
Material Adverse Change), 7.6 (Seller Consents and Assurances), 7.8 (No
Injunction), 7.9 (Closing Documents), 7.13 (H-S-R Approval) or 7.14 (Seller
Financial Statements) shall not have been satisfied or waived in writing by
Buyer as of the close of business on such date, or (iii) Buyer and Sellers
shall agree in writing to delay the Closing to a date later than March 31,
1996.
ARTICLE X
TERMINATION
-----------
Section 10.1. Right to Terminate Agreement. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned prior to
the Closing only as follows:
(a) by mutual written consent of ▇▇▇▇▇ and Sellers; or
(b) by Buyer upon written notice to Sellers in the event
that following the delivery of the Remaining Schedules (i) any of the
representations or warranties made by a Seller in this Agreement or in any
Schedule to this Agreement or in any certificate delivered by a Seller
pursuant to this Agreement shall not have been true and correct in any
material respect as of the date so made or thereafter by a Seller, or
(ii) either of the Sellers or CFC shall fail to perform or comply in any
material respect with any covenant or agreement to be performed or complied
with by a Seller or CFC pursuant to this Agreement prior to or at the Closing;
or
47
(c) by Buyer upon written notice to the Sellers in the
event that any of the conditions to the obligations of Buyer set forth in
ARTICLE VII of this Agreement (other than the condition set forth in Section
7.13) shall not have been satisfied or waived in writing by ▇▇▇▇▇ on or before
May 31, 1996; or
(d) by the Sellers upon written notice to Buyer in the
event that (i) any of the representations or warranties made by Buyer in this
Agreement or in any certificate delivered by Buyer pursuant to this Agreement
shall not have been true and correct as of the date so made or thereafter
breached by Buyer, or (ii) Buyer shall fail to perform or comply with any
covenant or agreement to be performed or complied with by Buyer pursuant to
this Agreement prior to or at the Closing; or
(e) by the Sellers upon written notice to Buyer in the
event that any of the conditions to the obligations of Seller set forth in
ARTICLE VIII of this Agreement (other than the condition set forth in Section
8.4 or 8.6) shall not have been satisfied or waived in writing by Seller on
or before May 31, 1996; or
(f) by Buyer or the Sellers, upon written notice to the
other, at any time after May 31, 1996 and for any reason in such party's sole
and absolute discretion; provided, however, that the right of the Sellers to
terminate this Agreement pursuant to this Section 10.1(f) shall not be
available if the failure to consummate the Closing on or before such date was
caused by or resulted from the failure of a Seller or CFC to perform any of
the obligations to be performed by them prior to or as of the Closing under
this Agreement or to obtain any of the Required Consents, or if the failure
to consummate the Closing was due to the failure of the parties to receive the
H-S-R Approval; or
(g) by Buyer or the Sellers, upon written notice to the
other, in the event that (i) the Department of Justice or the Federal Trade
Commission seeks or advises either party that it intends to seek an injunction
against the consummation of the transactions contemplated by this Agreement,
(ii) the Federal Trade Commission commences or advises either party that it
intends to commence an administrative proceeding relating to the transactions
contemplated by this Agreement or (iii) the H-S-R Approval has not been
obtained by the close of business on June 30, 1996;
(h) by Buyer upon written notice to the Sellers in the
event that for a period exceeding two (2) business days (i) trading in
securities generally on the New York Stock Exchange, the International Stock
Exchange, the American Stock Exchange or the over-the-counter market shall
have been suspended or materially limited or minimum prices shall have been
established on one or more such exchanges or such market by the SEC, by such
exchange or by any other Governmental Authority having jurisdiction, (ii) a
banking moratorium shall have been declared by United States federal or New
York state authorities, (iii) the United States shall have become engaged in
major hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration of a
national emergency or war by the United States, or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions, national or international securities markets or currency
exchange rates or controls as to make it, in the reasonable judgment of the
Buyer, inadvisable or impracticable to finance the transaction or to proceed
with the Closing;
48
(i) by Buyer upon written notice to the Sellers if Buyer
properly rejects the Remaining Schedules in accordance with the terms of
Section 2.11 of this Agreement; or
(j) automatically as of June 30, 1996 unless extended by
mutual agreement.
Section 10.2. Effect of Termination.
(a) In the event that this Agreement is terminated pursuant
to Section 10.1(a), by Buyer or Sellers pursuant to Section 10.1(g), or by
Buyer pursuant to Section 10.1(i) then, except for the payment by Buyer of the
Letter of Intent Break-Up Fee (and not the Definitive Agreement Break-Up Fee)
in the manner contemplated by Section 10.2(h), and the covenants contained in
Sections 10.3 and 11.6, this Agreement shall become null and void and of no
further force or effect, and the parties hereto shall have no further
obligation or liability hereunder.
(b) In the event that this Agreement is terminated by Buyer
pursuant to Section 10.1(b) and by reason of the knowing and intentional
breach of this Agreement by a Seller or CFC, Buyer shall be entitled to pursue
all legal and equitable remedies available to it against each Seller and CFC
with respect to any and all damages that Buyer may have incurred in connection
with any failure of a Seller or CFC to perform and comply with any covenant
or agreement to be performed or complied with by a Seller or CFC pursuant to
this Agreement prior to or at the Closing; provided, however, in no event
shall Buyer be entitled to claim or receive consequential damages from the
Sellers.
(c) In the event that this Agreement is terminated (i) by
Buyer pursuant to Section 10.1(c) solely by reason of the fact that the
conditions to the obligations of Buyer set forth in Sections 7.7 (Buyer
Consents), 7.10 (Buyer Financing), 7.11 (Due Diligence Satisfactory), or 7.12
(Buyer Board Approval) shall not have been satisfied or waived in writing by
Buyer on or before May 31, 1996, (ii) by Buyer pursuant to Section 10.1(h) or
(iii) by Buyer or Seller pursuant to Section 10.1(j), then Seller and CFC
shall be entitled to receive from Buyer, collectively and in the aggregate,
a payment in the amount of the Definitive Agreement Break-Up Fee plus the
Letter of Intent Break-Up Fee, which amount shall constitute liquidated
damages to Seller and CFC with respect to any and all damages that one or all
of them may have incurred in connection with any breach, non-performance or
misrepresentation by Buyer with respect to any representation, warranty,
covenant or agreement made by Buyer pursuant to or to be performed or complied
with by Buyer pursuant to this Agreement prior to or at the Closing, and,
except as otherwise provided in Section 10.3, this Agreement shall become null
and void and of no further force or effect and Buyer shall have no further
obligation or liability whatsoever to a Seller or CFC with respect to this
Agreement. Notwithstanding the foregoing, no Definitive Agreement Break-Up
Fee shall be payable pursuant to this Section 10.2(c) in the case of a
termination under 10.1(j) if the Buyer would not be obligated to pay any
Delayed Closing Fee to Seller pursuant to the terms set forth in Section 9.4
in the event the Agreement was not being terminated; provided, however, that
if a Delayed Closing Fee would not be payable solely due to the failure of the
Sellers to deliver its 1995 Audited Statements to Buyer by February 28, 1996,
then the Definitive Agreement Break-Up Fee shall still be payable in the event
that the Sellers deliver the 1995 Audited Statements to the Buyer by the close
49
of business Phoenix time on March 15, 1996 and at least 30 days prior to the
dates upon which certain rights to terminate the Agreement expressed in
Section 10.1 of the Agreement have been extended to take into account the late
delivery of the financial statements in the manner contemplated by Section
5.10 of this Agreement. No Definitive Agreement Break-Up Fee will be payable
under the terms of this Section 10.2(c) in the event that Sellers have failed
to deliver the 1995 Audited Statements to Buyer by the close of business
Phoenix time on March 15, 1996.
(d) In the event that this Agreement shall be terminated
by Buyer pursuant to Section 10.1(c) by reason of the fact that, the
conditions to the obligations of Buyer set forth in Sections 7.1
(Representations and Warranties or Seller True), 7.2 (No Default in Covenants
and Agreements by Seller), 7.3 (Seller Certificates), 7.4 (Employment
Agreements), 7.5 (No Material Adverse Change), 7.6 (Seller Consents and
Assurances), 7.8 (No Injunction), 7.9 (Closing Documents), or 7.14 (Seller
Financial Statements) shall not have been satisfied or waived in writing by
Buyer on or before May 31, 1996, then, ▇▇▇▇▇'s remedy shall be termination of
this Agreement, and Buyer shall not be liable for the Definitive Agreement
Break-Up Fee. Nothing contained herein shall be construed to prevent ▇▇▇▇▇
from proceeding against the Sellers or CFC pursuant to Section 10.2(b) if
Buyer is entitled to do so.
(e) In the event that this Agreement is terminated by
Sellers pursuant to Sections 10.1(d) or 10.1(e), Sellers and CFC shall be
entitled to receive a payment from Buyer in an aggregate amount equal to the
Definitive Break-Up Fee plus the Letter of Intent Break-Up Fee, which amount
shall constitute liquidated damages to Sellers and CFC with respect to any and
all damages that one or all of them may have incurred in connection with any
breach, non-performance or misrepresentation by Buyer with respect to any
representation, warranty, covenant or agreement made by Buyer pursuant to or
to be performed or complied with by Buyer pursuant to this Agreement prior to
or at the Closing, and, except as otherwise provided in Section 10.3, this
Agreement shall become null and void and of no further force or effect and
Buyer shall have no further obligation or liability whatsoever to Sellers or
CFC with respect to this Agreement. Notwithstanding the foregoing, no
Definitive Agreement Break-Up Fee will be payable in the event Sellers have
failed to deliver the 1995 Audited Statements to Buyer by the close of
business Phoenix time on March 15, 1996.
(f) In the event that this Agreement shall be terminated
by Sellers or Buyer pursuant to Section 10.1(f), Sellers and CFC shall be
entitled to receive a payment from Buyer in an aggregate amount equal to the
Definitive Agreement Break-Up Fee plus the Letter of Intent Break-Up Fee which
amount shall constitute liquidated damages to Sellers and CFC with respect to
any and all damages that one or all of them may have incurred in connection
with any breach, performance or misrepresentation by Buyer with respect to any
representation, warranty, covenant or agreement made by Buyer pursuant to or
to be performed or complied with by Buyer pursuant to this Agreement prior to
or at the Closing, and, except as otherwise provided in Section 10.3, this
Agreement shall become null and void and of no further force or effect and
Buyer shall have no further obligation or liability whatsoever to Seller or
CFC with respect to this Agreement. Notwithstanding the foregoing, no
Definitive Agreement Break-Up Fee shall be payable pursuant to this Section
10.2(f) if the Buyer would not be obligated to pay any Delayed Closing Fee to
Seller pursuant to the terms set forth in Section 9.4 in the event the
50
Agreement was not being terminated; provided, however, that if a Delayed
Closing Fee would not be payable solely due to the failure of the Sellers to
deliver the 1995 Audited Statements to Buyer by February 28, 1996, then the
Definitive Agreement Break-Up Fee shall still be payable in the event that the
Sellers deliver the 1995 Audited Statements to the Buyer by March 15, 1996 and
at least 30 days prior to the dates upon which certain rights to terminate the
Agreement expressed in Section 10.1 of the Agreement have been extended to
take into account the late delivery of the financial statements in the manner
contemplated by Section 5.10 of this Agreement. No Definitive Agreement
Break-Up Fee will be payable in the event that Sellers have failed to deliver
the 1995 Audited Statements to Buyer by the close of business Phoenix time on
March 15, 1996.
(g) The parties understand and acknowledge that Buyer shall
only be obligated to pay the Delayed Closing Fee or the Definitive Agreement
Break-Up Fee and/or the Letter of Intent Break-Up Fee to Seller and CFC
pursuant to the terms of Section 9.4 and Section 10.2 of this Agreement and
that in no circumstances will Seller and CFC be entitled to receive the
Delayed Closing Fees and either or both of the Letter of Intent Break-Up Fee
or the Definitive Agreement Break-Up Fee. Furthermore, the Delayed Closing
Fee and Break-Up Fee that may be payable to Seller and CFC hereunder shall be
payable to Seller and CFC collectively and in the aggregate such that Buyer
shall not be required to make any payments which aggregate in excess of
$5,000,000 pursuant to the terms of Section 9.4 and 10.2 of this Agreement.
(h) Notwithstanding any other provision of this Agreement,
but subject to the limitations expressed in Section 10.2(g) above, if this
Agreement is terminated for any reason (other than by Buyer in accordance with
the terms of Section 10.2(b) and in the case of a knowing and intentional
breach of this Agreement by a Seller or CFC) or for no reason, Buyer shall
immediately pay to Seller the Letter of Intent Break-Up Fee.
Section 10.3. Survival of Covenants Following Termination.
Notwithstanding the termination of this Agreement and the abandonment of the
transactions contemplated hereby, or the provisions of Section 10.2, the
obligations of the parties hereto under Sections 11.6 and 12.2 shall survive
the termination of this Agreement by any party to this Agreement.
ARTICLE XI
POST-CLOSING COVENANTS AND AGREEMENTS
-------------------------------------
Section 11.1. Financial Statements/Preservation of and Access to
Information After Closing.
(a) In the event that ▇▇▇▇▇'s Parent determines it is
advisable to include audited and/or unaudited financial statements of the
Seller with respect to periods prior to and through Closing (including the
Financial Statements and the 1995 financial statements to be provided to Buyer
pursuant to Section 5.10(b)) in any filings with the SEC (or in any disclosure
documents Buyer's Parent may utilize in connection with an offering of its
securities in a transaction exempt from registration under the Securities
Laws), the Sellers shall provide Buyer's Parent with their audited and
unaudited financial statements for such periods and at such dates as Buyer's
Parent may request. Such financial statements shall be provided to ▇▇▇▇▇'s
Parent as soon as is reasonably practicable. Sellers shall also promptly
51
provide to Buyer's Parent consents from Ernst & ▇▇▇▇▇ to the inclusion of its
audit reports in filings with the SEC (or in any disclosure documents Buyer's
Parent may utilize in connection with an offering of its securities in a
transaction exempt from registration under the Securities Laws), "comfort
letters," and such other assurances from Ernst & Young that may be reasonably
requested by ▇▇▇▇▇'s Parent or any underwriter, placement agent or purchaser
of Buyer's Parent securities with respect to any financial statements provided
to ▇▇▇▇▇'s Parent pursuant to this Section 11.1.
(b) To the extent that a Seller has books and records which
are not to be conveyed to Buyer because such books and records are not Assets
within the meaning of item 5 of Schedule 2.1, from and after the Closing, each
Seller shall preserve all books and records in Seller's possession relating
to the Assets and Properties until Buyer notifies such Seller that all
statutes of limitations relating to Tax periods to which such books and
records relate have expired, and, thereafter, shall not destroy or dispose of
such books and records without giving notice to Buyer of such pending
destruction or disposal and offering Buyer the right and opportunity to copy
such books and records.
(c) Except as prohibited or limited by Applicable Laws,
Buyer shall, from and after the Closing Date, provide each Seller and each
Seller's employees, counsel and independent accountants, full and complete
access upon reasonable notice during normal business hours, to all properties,
agreements, records and affairs of Buyer relating to the Assets and
Properties, and will provide copies of such information concerning the Assets
and Properties as a Seller may reasonably request in connection with the
preparation of any Tax Returns, or in connection with or in anticipation of
any audit by any federal, state or local Tax Authorities of Seller. From and
after the Closing Date, Buyer shall preserve all books and records of Buyer
relating to the Assets and Properties in, as the case may be, ▇▇▇▇▇'s
possession until the Sellers notify Buyer that all statutes of limitations
relating to Tax periods to which such books and records related have expired
and, thereafter, not to destroy or dispose of such books and records without
giving notice to Sellers of such pending destruction or disposal and offering
Sellers the right and opportunity to copy such books and records.
(d) A number of the representations and warranties
contained in Article III provide Buyer with certain assurances regarding the
payment of obligations and liabilities prior to Closing or the accrual of
amounts in respect of them on the Closing Balance Sheet. Seller covenants and
agrees that it shall take all actions as may be necessary to pay such amounts
or make accruals with respect to payables and liabilities on the Closing
Balance Sheet in the manner required by GAAP.
Section 11.2. Employee Benefit Matters.
(a) Each Seller shall make all contributions (or accrue
such contributions on the Closing Balance Sheet) and shall pay all premiums
(or accrue such premiums on the Closing Balance Sheet) with respect to
liabilities arising under the Benefit Arrangements and Employee Benefit Plans
on or prior to the Closing Date, with respect to liabilities or obligations
which have accrued on or prior to the Closing Date or which will accrue
following the Closing Date in respect of periods prior to and through the
Closing Date.
52
(b) Each Seller and CFC shall cooperate with Buyer and
provide any assistance reasonably requested by Buyer (whether before or after
the Closing Date) in connection with the employment matters contemplated by
this Agreement, including, but not limited to, providing all information that
the Buyer deems necessary to determine whether there have been any failures
to comply with the continuation of health care requirements of Section 4980B
of the Code and Part 6 of Title I of ERISA and each Seller and CFC shall
provide all information Buyer deems necessary to correct any such failures.
(c) With respect to each Employee Benefit Plan and each
Benefit Arrangement, such Plan or Arrangement shall be modified to provide
that sponsorship and maintenance thereof shall be transferred to Buyer or any
Affiliate of Buyer (as Buyer may determine), which shall assume all
obligations of each Seller thereunder. Each Seller and CFC shall cooperate
fully in effecting the transfer of the sponsorship of each such Plan and
Arrangement as expeditiously as possible. Without limiting the generality of
the foregoing, each of the Sellers and CFC shall (i) provide any information
or copies of any documents which may be requested by Buyer and (ii) join in
or participate in any application to or proceeding before any governmental
agency, the purpose of which is to effectuate the agreements contained in this
paragraph. Notwithstanding anything contained in this Agreement to the
contrary, Buyer shall not assume or be responsible for any of a Seller's
obligations under the Employment Agreements with Messrs. Clemons, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ or ▇▇▇ or ▇▇▇▇ ▇▇▇▇▇ (to the extent ▇▇▇▇ ▇▇▇▇▇ reaches an
agreement with Buyer or ▇▇▇▇▇'s Parent at Closing) or all of the Executive
Securities Agreements set forth on Schedule 3.12.
Section 11.3. Survival.
(a) Except as otherwise provided in this Agreement, all of
the representations, warranties, covenants and agreements of the parties
contained in this Agreement or in any certificate delivered by the parties
pursuant to this Agreement shall survive the Closing as provided in Section
11.3(c).
(b) Notwithstanding any investigation or audit conducted
by Buyer prior to the Closing, Buyer shall be entitled to rely upon the
representations and warranties each of the Sellers which are set forth in this
Agreement, including in any Schedules to this Agreement, or any certificates
delivered by each Seller or CFC pursuant to this Agreement or in connection
with the execution and delivery of this Agreement and the performance of the
obligations of the parties hereunder, and such representations and warranties
shall not be deemed to have been waived or otherwise affected by any such
investigation or audit or any knowledge attributable to Buyer.
(c) The representations and warranties contained in or made
pursuant to this Agreement, and the related indemnity obligations of Sellers
set forth in Section 11.4, shall terminate on, and no claim or action with
respect thereto may be brought after, 5:00 P.M., Eastern Standard Time, on
March 31, 1997 or 5:00 P.M., Eastern Standard Time, on the first anniversary
of the Closing Date, whichever occurs later; provided, however, that such
representations and warranties and the related indemnity obligation of Sellers
with respect thereto, shall not terminate with respect to any claim (whether
or not fixed as to liability or liquidated as to amount) with respect to which
Sellers have been given specific notice with such information as is reasonably
available at the time such claim is submitted to Sellers, prior to the
53
expiration of such representations and warranties, and related indemnity
obligations as provided herein.
(d) The representations and warranties contained in or made
pursuant to this Agreement and the related indemnity obligations of Buyer set
forth in Section 11.7 shall terminate on, and no claim or action with respect
thereto may be brought after, 5:00 P.M., Eastern Standard Time, on March 31,
1997 or 5:00 P.M., Eastern Standard Time, or the first anniversary of the
Closing Date, which occurs later; provided, however, that such representations
and warranties and the related indemnity obligation of Buyer with respect
thereto, shall not terminate with respect to any claim (whether or not fixed
as to liability or liquidated as to amount) with respect to which Buyer has
been given specific notice with such information as is reasonably available
at the time such claim is submitted to Buyer, prior to the expiration of such
representations and warranties, and related indemnity obligations as provided
herein.
Section 11.4. Indemnification by Seller.
(a) From and after the Closing Date, subject to the
limitations set forth in this Section 11.4, the Sellers shall defend,
indemnify and hold harmless the Buyer Group for, from and against all demands,
suits, claims, actions or causes of action, assessments, losses, damages,
liabilities, costs, judgments and expenses, including, without limitation,
interest, penalties, reasonable attorneys' fees, disbursements and expenses,
and reasonable consultants' fees, disbursements and expenses (collectively,
the "Buyer Losses"), based upon, arising out of, asserted against, resulting
from, imposed on, or incurred by any member of the Buyer Group, directly or
indirectly, as a result of (i) any misrepresentation or breach of warranty on
the part of a Seller in respect of, or any inaccuracy of or omission from, any
of the representations or warranties of a Seller contained in this Agreement
or any of the Schedules hereto or any certificate furnished or to be furnished
to Buyer hereunder or in connection herewith any of which arise during the
survival period set forth in Section 11.3(c), (ii) any nonfulfillment or
nonperformance by either of the Sellers or CFC or any of their Affiliates of
any agreement, covenant or obligation of either of the Sellers or CFC under
this Agreement, or any breach by a Seller or CFC or any of their Affiliates
of any provision of this Agreement, (iii) the noncompliance by Sellers or
Buyer with any applicable "bulk transfer" or similar provisions of the laws
of the any applicable jurisdiction in connection with the transactions
contemplated by this Agreement, (iv) the failure of Sellers to pay, perform
or discharge any of the Excluded Liabilities when and as due for payment,
performance or discharge, or (v) costs and expenses incurred by the Buyer
Group during the first twelve months following Closing pursuant to warranties
provided by the Sellers to their customers in respect of services rendered and
goods sold prior to the Closing to the extent and only to the extent that such
costs and expenses exceed $650,000.
(b) In the event that subsequent to the Closing Date, any
claim is asserted, any event occurs or any proceeding (including governmental
investigations or audits) is instituted relating to any matter as to which any
member of the Buyer Group is entitled to indemnification pursuant to Section
11.4(a), as soon as practicable after Buyer receives any notice or otherwise
becomes aware of any such claim, proceeding or event, Buyer shall notify
Sellers in writing; provided, however that the failure of Buyer to so notify
Sellers shall not relieve Sellers from any liability under this Section 11.4,
except to the extent it is proved that the Sellers suffered actual prejudice
54
in connection with or in defending against such claim. In case any action
is brought against Buyer or a Seller in respect thereof and ▇▇▇▇▇ notifies
Sellers of the commencement thereof, Sellers shall be entitled to participate
in the defense of such action and, to the extent that Sellers may wish, to
assume sole control over the defense and settlement of such action; provided,
however, that:
(i) the applicable member or members of the
Buyer Group shall be entitled to participate in the defense of such action and
to employ counsel at its own expense to assist in the handling of such action;
(ii) Sellers shall obtain the prior written
approval of the applicable member of the Buyer Group before entering
into any settlement of such action (which shall not be unreasonably
withheld) or ceasing to defend against such action; and
(iii) Sellers shall notify Buyer of its
election to assume control of the defense of any such action within 15 days
after receipt of written notice of the action from a member of the Buyer
Group.
After written notice by Sellers to the Buyer Group of its election to
assume control of the defense of any such action in accordance with the
foregoing, (i) Sellers shall not be liable to any members of the Buyer Group
for any legal or other expenses (other than expenses of investigation)
subsequently incurred by any of such Persons in connection therewith except
in cases where any member of the Buyer Group shall be advised in writing by
reputable legal counsel that it may have defenses available to it which are
inconsistent with or contrary to the defenses available to Seller in
connection with such action, and (ii) as long as the Sellers are reasonably
contesting such action in good faith, the members of the Buyer Group shall not
admit any liability with respect to, or settle, compromise or discharge the
claim underlying such action without Sellers' prior written consent, which
consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, Sellers shall not be entitled to assume
sole control over the defense and settlement of any claim, proceeding or
action relating to any matter as to which any member of the Buyer Group may
be entitled to indemnification pursuant to Section 11.4(a):
(i) if the claim, proceeding or action relates
to, could result in, or arises in connection with any criminal proceeding,
action, indictment, allegation or investigation of any officer or employee of
Buyer;
(ii) if the claim, proceeding or action could
result in or cause a Material Adverse Effect on Buyer in the reasonable
judgment of ▇▇▇▇▇;
(iii) if the claim, proceeding or action is one
which seeks principally injunctive or equitable relief against the Buyer or
to the extent that the claims proceeding or action seeks injunctive or
equitable relief and a party has entered a motion seeking such relief;
(iv) the claim, proceeding or action seeks
monetary damages in excess of the amount that Sellers would be required to pay
to Buyer pursuant to Section 11.4, or Buyer determines, in its reasonable
55
discretion, that the claim, proceeding or action could result in a judgment
for monetary damages in excess of the amount that Sellers would be required
to pay to Buyer pursuant to Section 11.4, or
(v) a court, Governmental Authority or other
arbiter of the claim, proceeding or action rules that the Sellers failed or
are failing to adequately protect ▇▇▇▇▇'s interests, rights or remedies.
If Sellers do not elect to assume control over the defense or settlement
of an action as provided in this Section 11.4(b) or is not entitled to do so,
any member of the Buyer Group shall have the right to defend the action and
related claims in any reasonable manner as it may deem appropriate and,
subject to the limitations set forth in Section 11.4(c), Sellers shall
indemnify and hold harmless the applicable members of the Buyer Group to the
extent such members are entitled to indemnification pursuant to Section
11.4(a); provided, however, in no event shall Sellers be required to pay
expenses of more than one legal counsel for the Buyer Group.
(c) No member of the Buyer Group shall be entitled to
indemnification under Section 11.4(a)(i), (ii), (iii) or (iv) in respect of
any individual claim involving Buyer Losses of less than $40,000 ("De Minimus
Claims") (it being understood that all Losses related to any claims arising
out of the same or similar facts, events, circumstances or matters shall be
considered part of the same claim for purposes of this Agreement), and no
member of the Buyer Group shall be entitled to indemnification under Section
11.4(a) until the aggregate amount of all Buyer Losses incurred by the Buyer
Group, exclusive of De Minimus Claims, exceeds $400,000. In the event that
the aggregate amount of all Buyer Losses, exclusive of De Minimus Claims,
incurred by the Buyer Group under Section 11.4(a) exceeds $400,000, the Buyer
Group shall be entitled to indemnification only for the amount of the Buyer's
Losses in excess of $400,000. Sellers shall only be required to pay to the
Buyer Group in the aggregate, and its maximum obligation to provide indemnity
pursuant to this Agreement shall be limited to the sum of the Closing
Holdback.
(d) Buyer shall have the right, subject to the limitations
set forth in Section 11.4(c) and the provisions of this Section 11.4(d), to
set-off against the Closing Holdback, the entire amount of any Buyer Losses
for which the Buyer determines in good faith that any member of the Buyer
Group is entitled to indemnification from Sellers under Section 11.4(a). The
right to set-off described in this Section shall be exercised as follows:
(i) Buyer shall deliver written notice to the
Sellers of each claim for indemnification for which the Buyer desires to
exercise its right to set-off.
(ii) Sellers shall then have fifteen days
(which period may be extended by mutual consent in writing) following receipt
of such notice in which to accept or dispute each such claim, in whole or in
part. To the extent that any such claim is not disputed in writing by Sellers
within such fifteen day period, such claim shall be deemed to have been
accepted by Sellers, and ▇▇▇▇▇ shall be entitled to set-off the entire amount
of such claim against the Closing Holdback.
(iii) In the event that Sellers shall dispute
any claim of Buyer, in whole or in part (hereafter a "Contested Claim"), the
56
Escrow Agent shall be instructed to hold such amount in escrow until the
Contested Claim has been resolved by agreement of the parties or until
otherwise ordered by a court of competent jurisdiction in the manner
contemplated by this Agreement. Upon resolution of the Contested Claim, the
Escrow Agent shall be instructed to promptly disburse the amount of the
Contested Claim to the party entitled thereto (as determined by agreement of
the parties or by order of Court) upon receipt of joint, written instructions
from ▇▇▇▇▇ and Sellers to that effect or upon presentation of a certified copy
of an order of a court of competent jurisdiction by either party.
Section 11.5. Indemnification by ▇▇▇▇▇.
-------------------------
(a) From and after the Closing Date, Buyer shall indemnify
and hold harmless Sellers, CFC and any of their Affiliates (collectively, the
"Seller Group") for, from and against all demands, suits, claims, actions or
causes of action, assessments, losses, damages, liabilities, costs, judgments
and expenses, including, without limitation, interest, penalties, reasonable
attorneys' fees, disbursements and expenses, and reasonable consultants' fees,
disbursements and expenses (collectively "Seller Losses"), based upon, arising
out of, asserted against, resulting to, imposed on, or incurred by the Seller
Group, directly or indirectly, from any misrepresentation or breach of any
warranty contained in or made by Buyer pursuant to this Agreement or the
breach by Buyer of any covenant or agreement to be performed or complied with
by Buyer after the Closing including, without limitation, ▇▇▇▇▇'s covenant to
satisfy and discharge the Assumed Obligations. In addition to the foregoing,
Buyer shall indemnify and hold the Seller Group harmless from and against any
Losses incurred by the Seller Group which involve claims made by purchasers
or underwriters of Buyer's securities based on the inaccuracy or inadequacy
of disclosure contained in any prospectus or offering circular utilized by
Buyer in connection with an offering of its securities, if the offering
circular or prospectus contains the financial statements of the Sellers. The
indemnification provided to Buyer in accordance with the preceding sentence
shall not be available if the claim is based in whole or in part on the
Sellers' financial statements (but not including the Predecessor Financial
Statements) and it is determined that such financial statements do not fairly
present in all material respects the financial condition, results of
operations or cash flow of the Sellers at and for the dates and periods
presented in the financial statements. The indemnification contained herein
with respect to covenants made by Buyer (including, without limitation, the
covenant to discharge the Assumed Obligations and the covenant set forth in
this Section relating to indemnification for inaccurate or inadequate
prospectuses or offering circulars of Buyer's Parent) shall survive the
Closing indefinitely.
(b) In the event that subsequent to the Closing Date, any
claim is asserted, any event occurs or any proceeding (including governmental
investigations or audits) is instituted relating to any matter as to which any
member of the Seller Group is entitled to indemnification pursuant to Section
11.5(a), as soon as practicable after Sellers receive any notice of or
otherwise becomes aware of any such claim, proceeding or event, the Sellers
shall notify Buyer in writing; provided, however, that the failure of Sellers
to so notify the Buyer shall not relieve the Buyer from any liability under
this Section 11.5, except to the extent it is proved that ▇▇▇▇▇ suffered
actual prejudice in connection with or in defending against such claim. In
case any such action is brought against any member of the Seller Group with
respect thereto and Sellers notify the Buyer of the commencement thereof, the
57
Buyer shall be entitled to participate in the defense of such claim and, to
the extent Buyer may wish, to assume sole control over the defense and
settlement of such action; provided, however, that:
(i) the applicable member or members of the
Seller Group shall be entitled to participate in the defense of such action
and to employ counsel at their own expense to assist in the handling of such
action;
(ii) the Buyer shall obtain the prior written
approval of the applicable member of the Seller Group before entering into any
settlement of such action or ceasing to defend against such action; and
(iii) the Buyer shall notify Seller of their
election to assume control of the defense of any such action within 15 days
of receipt of written notice of the action from a member of the Seller Group.
After written notice by the Buyer to the Seller Group of its election
to assume control of the defense of any such action in accordance with the
foregoing, (i) Buyer shall not be liable to any members of the Seller Group
for any legal or other expenses (other than expenses of investigation)
subsequently incurred by any of such Persons in connection therewith except
in cases where Seller shall be advised in writing by reputable legal counsel
that they may have legal defenses available to them which are inconsistent
with or contrary to the legal defenses available to the Buyer in connection
with such action, and (ii) as long as the Buyer is reasonably contesting such
action in good faith, the members of the Seller Group shall not admit any
liability with respect to, or settle, compromise or discharge the claim
underlying such action without the prior written consent of the Buyer, which
consent may be given or withheld in the sole discretion of the Buyer.
If the Buyer elects to assume control over the defense or settlement of
an action as provided in this Section 11.5(b), any member of the Seller Group
shall have the right to defend the action and related claims in any reasonable
manner as it may deem appropriate and, subject to the limitations set forth
in Section 11.5(a), the Buyer shall indemnify and hold harmless the applicable
members of the Seller Group to the extent such members are entitled to
indemnification pursuant to Section 11.5(a). No member of the Buyer
Indemnification Group shall be liable under this Section 11.5 for any
settlement or compromise effected without its consent (it being understood and
agreed that, in the event no member of the Buyer Indemnification Group elects
to assume control over the defense of the action, the members of the Buyer
Indemnification Group shall not unreasonably withhold or unreasonably delay
any such consent).
Section 11.6. Confidentiality. Each of the parties hereto for
themselves and their respective officers, directors, employees, stockholders
and representatives, shall hold in confidence all information, books, records
and documents acquired from any other party hereto prior to, on, or after the
date hereof in the course of negotiation of the transactions contemplated
hereby or pursuant to the provisions hereof and will not disclose the same to
any third party except as required by law, and except to the extent necessary
to (a) respond to lawful process, (b) comply with Applicable Laws, (c)
establish a lawful claim or defense, or (d) obtain reasonably necessary advice
of counsel. Should the transactions contemplated hereby not be consummated
for any reason, each party shall promptly return to the other all originals
58
and copies of such documents and other written information obtained from the
other in the course of such negotiations or pursuant hereto and shall promptly
destroy all evaluations and studies prepared by it or by any of its
representatives on the basis of such information, books, records or documents.
The foregoing shall not apply to information concerning CFC or a Seller which
was known to Buyer or was in the public domain at the time it was disclosed
to Buyer or which subsequently entered the public domain through no wrongful
act of Buyer.
Section 11.7. Restrictive Covenants of Seller and CFC.
(a) Each of the Sellers and CFC hereby covenant and agree,
jointly and severally, that:
(i) neither Seller nor CFC, nor any other
presently existing or hereafter created Affiliate of a Seller or CFC (other
than Carlisle and the Carlisle Affiliates and First Chicago and its
Affiliates, as to which the terms of this Section 11.7(a) shall not apply),
shall, directly or indirectly, for a period of three years from and after the
Closing Date, whether for its own account or as an owner, investor, partner,
stockholder, member, agent, principal, consultant or otherwise, engage in,
invest in, be associated with, or manage, operate, control, consult for or
otherwise assist any Person or any enterprise that engages anywhere in the
world in the repair or overhaul of AlliedSignal engines;
(ii) call upon, solicit or otherwise contact,
either directly or indirectly, for a period of three years from and after the
Closing Date, any of the present or former customers of a Seller for the
purpose of soliciting the repair or overhaul of AlliedSignal engines; or
(iii) at any time after the Closing, use,
license, or convey any of the Intellectual Property or Technology or disclose,
or through the failure to exercise due care and diligence permit to be used,
licensed, conveyed or disclosed, any of the Intellectual Property or
Technology.
(b) Each of Carlisle and the Carlisle Affiliates (the
"Carlisle Group"), and First Chicago (for purposes of this Section 11.7(b)
only, including Cross Creek Partners III and its individual partners),
covenant and agree that:
(i) for a period of three years following
Closing no member of the Carlisle Group or First Chicago shall, directly or
indirectly, alone or with others invest in or otherwise obtain any interest
or engage in any transaction with the business entities identified on Schedule
11.7(b);
(ii) no member of the Carlisle Group nor First
Chicago shall at any time after the Closing, use, license, or convey any of
the Intellectual Property or Technology or disclose, or through the failure
to exercise due care and diligence permit to be used, licensed, conveyed or
disclosed, any of the Intellectual Property or Technology;
(iii) no member of the Carlisle Group nor First
Chicago shall acquire, offer to acquire or agree to acquire, directly or
indirectly, by purchase or otherwise, any voting securities, or direct or
59
indirect rights to acquire any voting securities of the Buyer's Parent, or any
assets of the Buyer's Parent or any division or subsidiary thereof or of any
successor or controlling person of the Buyer's Parent (it being understood
that the foregoing covenant shall not prevent the members of the Carlisle
Group or First Chicago from acquiring, collectively among the members of each
such group, shares representing less than 5% of the outstanding shares of the
common stock of Buyer's Parent);
(iv) no member of the Carlisle Group nor First
Chicago shall make or in any way participate in, directly or indirectly, any
"solicitation" of "proxies" (as such terms are used in the Rules of the
Securities and Exchange Commission), to vote, or seek to advise or influence
any person or entity with respect to the voting of, any voting securities of
Buyer's Parent;
(v) no member of the Carlisle Group nor First
Chicago shall make any public announcement with respect to, or submit a
proposal for, or offer of (with or without conditions) any extraordinary
transactions involving the Buyer's Parent or its securities or assets; or
(vi) no member of the Carlisle Group nor First
Chicago shall form, join or in any way participate in a "group" (as defined
in Section 13d-3 of the Exchange Act), in connection with any of the foregoing
and will not publicly or privately request the Buyer's Parent (its officers,
directors, employees or agents) or publicly disclose any request, directly or
indirectly, to waive any provisions of this Section.
(c) From and after the Closing, neither of the Sellers nor
CFC nor any of their presently existing or hereafter created Affiliates shall
use, or assert any right to use, or take any action inconsistent with Buyer's
right to use, any trademark, logo or tradename related to the Business of
Sellers, including, without intended limitation, the trade names "CFC Aviation
Services" or "▇▇▇▇▇▇▇ Aviation Services," and shall not use any trademarks,
logos or tradenames that are confusingly similar thereto or that are a
translation or transliteration thereof into any language or alphabet, in
connection with any business that is the same or similar to the Business
engaged in by the Sellers.
(d) Construction. Each covenant and agreement of this
Section 11.7 shall be read and construed independently of each other and if
any one of them (or portion thereof) is held invalid the others (or others
portions thereof) shall continue to be valid and to apply and the one (or the
portion) held to be invalid shall be read and construed in the most
restrictive manner intended by this Section 11.7 that would permit it to be
held valid and enforceable. Accordingly, the parties agree that because the
provisions of this Section 11.7 are divisible and separable, if any provision
hereof is held to be unreasonable, unlawful or unenforceable in duration,
geographical scope or character of restriction by any court of competent
jurisdiction, such provision shall be modified to the extent necessary in
order that any such provision or portion thereof shall be legally enforceable
to the fullest extent permitted by law, and the parties hereto do hereby
expressly authorize any court of competent jurisdiction to enforce any such
provision or portion of this Section 11.7 or to modify any such provision or
portion hereof in order that any such provision or portion hereof shall be
enforced by such court to the fullest extent permitted by applicable law.
60
(e) Notwithstanding anything contained in this Section 11.7
to the contrary, the terms and conditions of Sections 11.7(a)(i) and
11.7(a)(ii) shall not be binding upon ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇
▇▇▇▇.
Section 11.8. Change of Names. Promptly following the Closing, but in
no event later than 10 days following the Closing, each of the Sellers and CFC
shall take all actions necessary to change the name of the Sellers and CFC to
names which are not confusingly similar to or a translation or transliteration
of "CFC Aviation Services" or "▇▇▇▇▇▇▇ Aviation Services." Each Seller and
CFC shall take similar action to modify the names under which they have
qualified to do business in foreign jurisdictions within 30 days of Closing.
Section 11.9. Specific Performance and Injunctive Relief. Each Seller
hereby acknowledges and agrees that the damages to Buyer resulting from any
breach or threatened breach of any of the covenants and agreements contained
in this Agreement to be complied with or performed by each Seller may be
intangible, in whole or in part, and incapable of being assessed a monetary
value and will result in irreparable harm to, and have a Material Adverse
Effect on, Buyer. Therefore, each of the Sellers and CFC hereby agree that,
in the event of any breach or threatened breach of any of the covenants or
agreements contained in this Agreement to be complied with or performed by a
Seller, Buyer shall be entitled to a decree of specific performance,
injunctive relief to prevent any such breach or the continuation thereof and
other equitable remedies in addition to monetary damages and legal remedies
in respect thereof, together with an award of it's attorney's fees, expenses
and disbursements incurred in connection with seeking such relief.
ARTICLE XII
MISCELLANEOUS
Section 12.1. Power of Attorney. As of the Closing Date, each Seller
hereby constitutes and appoints Buyer, and its successors and assigns, the
true and lawful attorney of Seller, in the name of Buyer or in the name of
such Seller but for the benefit of Buyer, (i) to institute and prosecute all
proceedings that Buyer may deem proper in order to collect, assert, or enforce
any claim, right, or title of any kind in or to the Assets; (ii) to defend or
compromise any and all actions, suits, or proceedings in respect of any of the
Assets or the Assumed Obligations, and to take all such actions in relation
thereto as Buyer deems advisable; and (iii) to take all actions that Buyer or
its successors or assigns deem proper in order to provide for Buyer and its
successors or assigns the benefits of any of the Assets except that the
foregoing Power of Attorney shall not extend to any such action that could
reasonably be expected to have a Material Adverse Effect on a Seller or the
Business. Each Seller acknowledges and agrees that the foregoing powers are
coupled with an interest and are irrevocable by each Seller.
Section 12.2. Expenses. All legal, accounting and other costs and fees
incurred by a Seller or CFC in connection with the transactions contemplated
by this Agreement shall be borne and paid for solely by such Seller or CFC,
as the case may be. All legal, accounting and other costs and fees incurred
by Buyer in connection with the transactions contemplated by this Agreement
shall be borne and paid for by the Buyer.
61
Section 12.3. Entire Agreement. This Agreement, together with the
Collateral Agreements, constitutes the entire agreement and understanding
between the parties hereto in respect of the matters set forth herein, and all
prior negotiations, writings and understandings relating to the subject matter
of this Agreement (including the letter of intent dated December 4, 1995) are
merged herein and are superseded and cancelled by this Agreement.
Section 12.4. Amendment and Waiver. This Agreement may be amended,
modified, supplemented or changed in whole or in part only by an agreement in
writing making specific reference to this Agreement and executed by each of
the parties hereto. Any of the terms and conditions of this Agreement may be
waived in whole or in part, but only by an agreement in writing making
specific reference to this Agreement and executed by the party that is
entitled to the benefit thereof. The failure of any party hereto to insist
upon strict performance of or compliance with the provisions of this Agreement
shall not constitute a waiver of any right of any such party hereunder or
prohibit or limit the right of such party to insist upon strict performance
or compliance at any other time.
Section 12.5. Binding Agreement and Successors. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
Section 12.6. Assignment. This Agreement and the rights of the parties
hereunder may not be assigned, and the obligations of the parties hereunder
may not be delegated, in whole or in part, by any party without the prior
written consent of the other parties hereto except that ▇▇▇▇▇ shall have the
right to assign this Agreement and its rights hereunder and delegate its
obligations hereunder to any Affiliate of Buyer or to any party who succeeds
to the business of the Buyer.
Section 12.7. No Third Party Beneficiaries. Nothing in this Agreement
is intended to confer any rights or remedies upon any Person (including,
without limitation, any Employee) other than the parties hereto and the
indemnified Persons under Section 11.4 and Section 11.5.
Section 12.8. Notices. Any notice, request, instruction or other
document or communication required or permitted to be given under this
Agreement to any of the parties hereto shall be in writing and shall be deemed
given (i) three days after being deposited in the mail, postage prepaid,
certified or registered mail, (ii) on the next business day after delivery to
a reputable overnight delivery service such as Federal Express, or (iii) upon
personal delivery if delivered or addressed to the addresses set forth below
or to such other address as any party may hereafter specify by written notice
to the other parties hereto:
(a) If to the Sellers, delivered or mailed to:
CFC Aviation Services, L.P.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: __________________________
__________________________
and
62
CFC Aviation Company, L.L. C.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: __________________________
__________________________
with a copy delivered or mailed to:
Gray ▇▇▇▇ ▇▇▇▇ & Freidenrich
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, Esquire
and
First Capital Corporation of Chicago
Three First National Plaza
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Managing Director
and
Carlisle Enterprises L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(c) If to Buyer, delivered or mailed to:
UNC Incorporated
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
with a copy delivered or mailed to:
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Miles & Stockbridge,
a Professional Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Section 12.9. Further Assurances. The parties hereto each agree to
execute, make, acknowledge, and deliver such instruments, agreements and other
documents as may be reasonably required to effectuate the purposes of this
Agreement and to consummate the transactions contemplated hereby.
Section 12.10. Article and Section Headings. The Article and Section
headings contained in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning or interpretation of this
Agreement or any of its terms and conditions.
63
Section 12.11. Governing Law. This Agreement shall be construed and
enforced in accordance with and shall be governed by the laws of the State of
Delaware.
Section 12.12. Construction. As used in this Agreement, any reference
to the masculine, feminine or neuter gender shall include all genders, the
plural shall include the singular, and the singular shall include the plural.
With regard to each and every term and condition of this Agreement and any and
all agreements and instruments contemplated hereby, the parties hereto
understand and agree that the same have or has been mutually negotiated,
prepared and drafted, and that if at any time the parties hereto desire or are
required to interpret or construe any such term or condition or any agreement
or instrument subject hereto, no consideration shall be given to the issue of
which party hereto actually prepared, drafted or requested any term or
condition of this Agreement or any agreement or instrument subject hereto.
Section 12.13. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
Section 12.14.Exhibits and Schedules. The Exhibits and Schedules
attached to this Agreement constitute a substantive part of this Agreement and
are hereby incorporated herein by this reference.
IN WITNESS WHEREOF, each of the parties hereto have executed this
Agreement as of the day and year first above written.
UNC INCORPORATED
By:________________________________
▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman, President and Chief
Executive Officer
UNC/CFC ACQUISITION CO.
By:________________________________
▇▇▇ ▇. ▇▇▇▇▇▇▇
President
CFC AVIATION, INC.
By:________________________________
▇▇▇▇ ▇. ▇▇▇▇▇
Chairman
By:________________________________
▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
President
64
By:________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
CFC AVIATION SERVICES, L.P.
By: CFC Aviation Inc., its general
partner
By:___________________________
▇▇▇▇ ▇. ▇▇▇▇▇
Chairman
By:___________________________
▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
President
By:___________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
CFC AVIATION COMPANY, L.L.C.
By:________________________________
▇▇▇▇ ▇. ▇▇▇▇▇
Chairman
By:___________________________
▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
President
By:___________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
CARLISLE ENTERPRISES, L.P.
By:________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, General Partner
of Carlisle Enterprises, L.P.
65
FIRST CAPITAL CORPORATION OF
CHICAGO
By:________________________________
Name:
Title: General Partner
CROSS CREEK PARTNERS III
By:_________________________________
Name:
Title: