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Exhibit 2.2
SHARE PURCHASE AGREEMENT
between
SAIRGROUP, a Swiss corporation having its registered domicile in Zurich,
Switzerland
(hereinafter the "SELLER"),
and
GALILEO INTERNATIONAL PARTNERSHIP, a Delaware general partnership whose
principal place of business is in Rosemont, Illinois, and any successor in
interest thereto, including, without limitation, the corporation or limited
liability company formed in connection with the IPO (as such term is defined
below)
(hereinafter the "PURCHASER";
each of the Purchaser and the Seller
is referred to herein
as a "PARTY", and the Purchaser and the Seller are referred
to herein collectively as the "PARTIES")
regarding the purchase of the entire share capital of
Traviswiss AG, a Swiss company having its
registered domicile in Kloten, Switzerland
(hereinafter the "Company")
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ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms ..................................... 1
SECTION 1.02. Other Defined Terms ....................................... 5
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale of the Shares ........................... 7
SECTION 2.02. Purchase Price ............................................ 7
SECTION 2.03. Closing ................................................... 7
SECTION 2.04. Closing Deliveries ........................................ 7
SECTION 2.05. Cash Mechanism ............................................ 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
SECTION 3.01. Organization, Authority and Qualification of the Seller ... 10
SECTION 3.02. Organization, Authority and Qualification of the Company .. 11
SECTION 3.03. Company Interests ......................................... 11
SECTION 3.04. No Conflict ............................................... 12
SECTION 3.05. Consents and Approvals .................................... 12
SECTION 3.06. Financial Information and Books and Records ............... 12
SECTION 3.07. No Undisclosed Liabilities ................................ 13
SECTION 3.08. Conduct in the Ordinary Course, Absence of Certain Changes,
Events and Conditions ................................ 13
SECTION 3.09. Litigation ................................................ 15
SECTION 3.10. Compliance with Laws ...................................... 15
SECTION 3.11. Environmental and Other Permits and Licenses; Related
Matters .............................................. 16
SECTION 3.12. Material Contracts ........................................ 16
SECTION 3.13. Intellectual Property ..................................... 18
SECTION 3.14. Real Property and Leases .................................. 18
SECTION 3.15. Assets .................................................... 19
SECTION 3.16. Employee Benefit Matters .................................. 20
SECTION 3.17. Labor Matters ............................................. 21
SECTION 3.18. Taxes ..................................................... 21
SECTION 3.19. Insurance ................................................. 22
SECTION 3.20. Brokers ................................................... 23
SECTION 3.21. Year 2000 Compliance ...................................... 23
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 4.01. Organization, Authority and Qualification of the Purchaser .. 24
SECTION 4.02. No Conflict ................................................. 24
SECTION 4.03. Governmental Consents and Approvals ......................... 25
SECTION 4.04. Investment Purpose .......................................... 25
SECTION 4.05. Brokers ..................................................... 25
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Conduct of Business Prior to the Closing .................... 25
SECTION 5.02. Access to Information ....................................... 26
SECTION 5.03. Confidentiality ............................................. 27
SECTION 5.04. Regulatory and Other Authorizations; Notices and Consents.... 28
SECTION 5.05. Notice of Developments ...................................... 29
SECTION 5.06. No Solicitation of Employees ................................ 29
SECTION 5.07. Use of Intellectual Property ................................ 29
SECTION 5.08. Monthly Financial Statements ................................ 30
SECTION 5.09. Pre-Closing Balance Sheet ................................... 30
SECTION 5.10. Company Pension Fund ........................................ 31
SECTION 5.11. Insurance Coverage by the Seller ............................ 32
SECTION 5.12. Certain Services ............................................ 32
SECTION 5.13. Certain Intercompany Payments ............................... 34
SECTION 5.14. Intercompany Loan ........................................... 34
SECTION 5.15. Right of First Refusal ...................................... 35
SECTION 5.16. Transfer of Certain Company Intellectual Property............ 35
SECTION 5.17. Further Action .............................................. 36
ARTICLE VI
TAX MATTERS
SECTION 6.01. Tax Indemnity ............................................... 36
SECTION 6.02. Apportionment of Taxes ...................................... 37
SECTION 6.03. Returns and Payments ........................................ 37
SECTION 6.04. Contests .................................................... 39
SECTION 6.05. Survival of Obligations ..................................... 41
SECTION 6.06. Conveyance Taxes ............................................ 41
SECTION 6.07. Tax Refunds, Credits and Other Payments ..................... 41
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ARTICLE VII
CONDITIONS TO CLOSING
SECTION 7.01. Conditions to Obligations of the Seller ..................... 42
SECTION 7.02. Conditions to Obligations of the Purchaser .................. 43
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Survival of Representations and Warranties .................. 45
SECTION 8.02. Indemnification by the Seller ............................... 46
SECTION 8.03. Tax Matters ................................................. 48
SECTION 8.04. Indemnification by the Purchaser ............................ 48
SECTION 8.05. Indemnification Procedures .................................. 48
ARTICLE IX
TERMINATION AND WAIVER
SECTION 9.01. Termination ................................................. 50
SECTION 9.02. Effect of Termination ....................................... 50
SECTION 9.03. Waiver ...................................................... 51
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. Expenses ................................................... 51
SECTION 10.02. Notices .................................................... 51
SECTION 10.03. Public Announcements ....................................... 53
SECTION 10.04. Headings ................................................... 53
SECTION 10.05. Severability ............................................... 53
SECTION 10.06. Entire Agreement ........................................... 53
SECTION 10.07. Assignment ................................................. 53
SECTION 10.08. No Third Party Beneficiaries ............................... 54
SECTION 10.09. Amendment .................................................. 54
SECTION 10.10. Arbitration ................................................ 54
SECTION 10.11. Seller's Disclosure Schedule ............................... 56
SECTION 10.12. Governing Law .............................................. 56
SECTION 10.13. Counterparts ............................................... 56
SECTION 10.14. Specific Performance ....................................... 56
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WHEREAS, the Seller owns 200 registered shares of the Company's
capital stock, nominal value CHF 10,000 per share (the "Shares"), which
constitute one hundred percent (100%) of the outstanding share capital of the
Company; and
WHEREAS, the Seller wishes to sell to the Purchaser, and the
Purchaser wishes to purchase from the Seller, the Shares upon the terms and
subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the Parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Accounting Principles" means the rules set out in art. 662a et seq.
of the Swiss Code of Obligations as applied by members of the Swiss Accountants'
Organization ("Schweizerische Treuhand und Revisionskammer").
"Action" means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority.
"Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
"After-Tax Basis" means, (i) with respect to any Loss that is
required to be indemnified pursuant to Article VI or Article VIII on an
After-Tax Basis, that the indemnification payment will be calculated so as to
take into account both the deductibility or creditability by the indemnitee or
the Company for Tax purposes of the Loss being indemnified and the taxability to
the indemnitee of the indemnifying payment (including taxability of any payments
made to gross up for the taxability of the indemnifying payment), and (ii) with
respect to any refund or credit that is required to be paid on an After-Tax
Basis pursuant to Section 6.07, that the refund or credit payable by the
Purchaser to the Seller will be calculated so as to take into account both the
deductibility by the Company for Tax purposes of the payment of such refund or
credit to the Seller and (a) the taxability to the Company of the receipt of the
refund or credit and (b) any tax to the Company or the Purchaser (or any
Affiliate thereof) in connection with any distribution of the credit or refund
(or any portion thereof) to the Purchaser (or any Affiliate thereof).
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"Agreement" or "this Agreement" means this Share Purchase Agreement,
dated as of , 1997, between the Seller and the Purchaser (including the Exhibits
hereto and the Seller's Disclosure Schedule) and all amendments hereto made in
accordance with the provisions of Section 10.09.
"Business Day" means any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by law to be closed in the
City of Zurich, Switzerland.
"Company Intellectual Property" means all trademarks, trademark
rights, trade names, trade name rights, patents, patent rights, industrial
models, inventions, copyrights, service marks, trade secrets, applications for
trademarks and for service marks, know-how and other proprietary rights and
information used or held for use in connection with the business of the Company
as currently conducted or as contemplated (by existing Company management) to be
conducted, together with all applications currently pending for any of the
foregoing.
"control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the affairs or management of a
Person, whether through the ownership of voting securities, as trustee or
executor, by contract or otherwise, including, without limitation, the
ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person.
"Encumbrance" means any security interest, pledge, mortgage, lien
(including without limitation, environmental and Tax liens), charge,
encumbrance, adverse claim, preferential arrangement or restriction of any kind,
including, without limitation, any restriction on the use, voting, transfer,
receipt of income or other exercise of any attributes of ownership.
"Environment" means surface waters, groundwaters, surface water
sediment, soil, subsurface strata and ambient air.
"Environmental Claims" means any and all actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation, notices of
liability or potential liability, investigations, proceedings, consent orders or
consent agreements relating in any way to any Environmental Law, any
Environmental Permit or any Hazardous Material or arising from any alleged
injury or threat of injury to health, safety or the Environment.
"Environmental Law" means any Law, now or hereafter in effect and as
amended, and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, relating to
pollution or protection of the
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Environment, health or safety or to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required to operate the business of the
Company under any applicable Environmental Law.
"Governmental Authority" means any Swiss or foreign federal, state
or local government, governmental, regulatory or administrative authority,
agency or commission or any court, tribunal, or judicial or arbitral body.
"Governmental Order" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority, other than any rules and regulations (whether promulgated by order or
otherwise) which apply generally to the computer reservations system industry.
"Hazardous Materials" means (a) petroleum and petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials and polychlorinated biphenyls and (b) any other chemicals, materials
or substances regulated as toxic or hazardous or as pollutant, contaminant or
waste under any applicable Environmental Law.
"Income Taxes" means Taxes based on or measured by net income.
"Independent Accounting Firm" means any one of the "big six"
accounting firms other than the Purchaser's Accountants, the Seller's
accountants and the Company's accountants.
"Law" means any Swiss or foreign federal, state or local statute,
law, ordinance, regulation, rule, code, order, other requirement or rule of law.
"Liabilities" means any and all debts, liabilities and obligations,
whether accrued or fixed, absolute or contingent, matured or unmatured or
determined or determinable, including, without limitation, those arising under
any Law (including without limitation, any Environmental Law), Action or
Governmental Order and those arising under any contract, agreement, arrangement,
commitment or undertaking.
"Material Adverse Effect" means any change in or effect on the
business of the Company that, when taken individually or together with all other
adverse changes and effects, is or is reasonably likely to be materially adverse
to the business, operations, properties, condition (financial or otherwise),
assets or Liabilities of the Company or prevents consummation of the
transactions contemplated hereby.
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"Net Asset Test Reference Balance Sheet" means the audited balance
sheet (including the related notes and schedules thereto) of the Company, dated
as of 31 December 1996, excluding (i) any indebtedness for borrowed money of the
Company and (ii) any Cash other than cash in the amount of any checks
outstanding, a copy of which is set forth in Section 3.06(a) of the Seller's
Disclosure Schedule.
"Net Assets" means the excess of total assets over total liabilities
of the Company shown on the Pre-Closing Balance Sheet or the Seasonally Adjusted
Net Asset Test Reference Balance Sheet, as applicable.
"Ordinary Course Taxes" means Taxes, other than Income Taxes,
capital Taxes or VAT, relating to operations, activities or ownership during
periods (or portions thereof) prior to the Closing Date and paid by the Company
after the Closing Date in the ordinary course of business and not as a result of
an audit or examination by a government or Tax authority or an administrative or
judicial proceeding or a settlement or compromise thereof in connection with a
Tax previously paid or a Return previously filed.
"Permitted Encumbrances" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced: (a) liens for Taxes, assessments and governmental charges or
levies not yet due and payable; (b) Encumbrances imposed by law, such as
materialmen's, mechanics', carriers', workmen's and repairmen's liens and other
similar liens arising in the ordinary course of business securing obligations;
(c) pledges or deposits to secure obligations under workers' compensation laws
or similar legislation or to secure public or statutory obligations; and (d)
minor survey exceptions, reciprocal easement agreements and other customary
encumbrances on title to real property that (i) were not incurred in connection
with any indebtedness for borrowed money of the Company, (ii) do not render
title to the property encumbered thereby unmarketable and (iii) do not,
individually or in the aggregate, materially adversely affect the value or use
of such property for its current and anticipated purposes.
"Person" means any individual, partnership, limited liability
company, firm, corporation, association, trust, unincorporated organization or
other entity, as well as any syndicate or group.
"Purchaser's Accountants" means KPMG Peat Marwick LLP, independent
accountants of the Purchaser.
"Real Property" means the real property leased or owned by the
Company.
"Return" means any return, report or form relating to a Tax or
Taxes.
"Seasonally Adjusted Net Asset Test Reference Balance Sheet" means
the Net Asset Test Reference Balance Sheet adjusted to multiply current assets
reflected thereon by
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the appropriate seasonal adjustment factors set forth on Schedule 1.01(a) hereto
and current liabilities by the appropriate seasonal adjustment factors set forth
on Schedule 1.01(b) hereto.
"Tax" or "Taxes" means any and all taxes, contributions, fees,
levies, duties, tariffs, imposts, and other similar charges (together with any
and all interest, penalties, additions to tax and additional amounts imposed
with respect thereto) imposed by any government or taxing authority (whether
federal, state, local, cantonal, municipal, foreign or otherwise), including,
without limitation: Income Taxes, VAT, any other taxes or other charges on or
with respect to income, franchises, windfall or other profits, gross receipts,
property, capital, sales, use, capital stock, payroll, employment, social
security, workers' compensation, unemployment compensation, or net worth; taxes
or other charges in the nature of excise, withholding, ad valorem, stamp,
transfer, value added, or gains taxes; license, registration and documentation
fees; and customs duties, tariffs, and similar charges.
"Tax Benefit" means the value, when actually received, of any
deduction, loss, credit or refund to the Purchaser, the Company or the Seller,
as the case may be.
"VAT" means Value Added Tax as defined in the Swiss VAT ordinance of
the 22nd of June, 1994, a Tax imposed on turnover of goods and services,
including imports of goods and services.
SECTION 1.02. Other Defined Terms. Each of the following terms is
defined in the Section set forth opposite such term:
Terms Section
----- -------
Agreement ...................................... Preamble
Arbitration Request ............................ 10.10(a)
Arbitrator ..................................... 10.10(a)
Assets ......................................... 3.15(a)
Association .................................... 10.10(a)
atraxis ........................................ 5.12(a)
Average Cash Amount ............................ 2.05(b)
aviReal ........................................ 5.12(a)
Award .......................................... 10.10(a)(v)
Cash ........................................... 2.05(b)
Closing ........................................ 2.03
Closing Date ................................... 2.03
Commencement Date .............................. 10.10(a)(i)
Company ........................................ Cover Page
Company Charter Documents ...................... 3.02
Company Interest ............................... 5.15
Company Licenses ............................... 3.13
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Company Names .................................. 5.07(a)
Company Post-Closing License ................... 5.16(b)
Dispute Notice ................................. 10.10(a)
Dollar Equivalent .............................. 2.05(b)
Escrow Agent ................................... 2.05(f)(i)
Escrow Amount .................................. 2.05(f)(i)
Financial Statements ........................... 3.06
First Refusal Price ............................ 5.15
Indemnified Party .............................. 6.01, 8.05
Indemnifying Party ............................. 8.05
Independent Firm ............................... 6.03(b)
Intercompany Loan .............................. 5.14
IPO ............................................ 2.03
Loss ........................................... 8.02
Material Contracts ............................. 3.12(a)
Measuring Period ............................... 2.05(b)
New Company Fund ............................... 5.10(b)(i)
Non-Disclosure Agreement ....................... 5.03(a)
Notice of Exercise ............................. 5.15(b)
Notice of Intention ............................ 5.15
Option Period .................................. 5.15(b)
Parties ........................................ Cover Page
Party .......................................... Cover Page
Pension Transfer Agreement ..................... 5.10(b)(ii)
Petitioner ..................................... 10.10(a)
Plan ........................................... 3.16(a)
Pre-Closing Balance Sheet ...................... 5.09
Prospective Buyer .............................. 5.15
Prospective Seller ............................. 5.15
Purchase Price ................................. 2.02
Purchase Price Adjustment Amount ............... 2.05(b)
Purchaser ...................................... Cover Page
Purchaser Indemnified Party .................... 8.02(a)
Returnable Refund or Credit .................... 6.07
Respondent ..................................... 10.10(a)
Response ....................................... 10.10(a)(ii)
Returnable Refund or Credit .................... 6.07
Seller ......................................... Cover Page
Seller Indemnified Party ....................... 8.04(a)
Seller Post-Closing License .................... 5.16(a)
Seller's Disclosure Schedule ................... 3.02
Seller's Pension Funds ......................... 5.10(a)
Shares ......................................... Recitals
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Statement ...................................... 10.10(a)
Third Party Claim .............................. 8.05
Transaction Agreement .......................... 7.01(f)
Transferred Intellectual Property .............. 5.16(a)
Transition Period .............................. 5.11
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale of the Shares. Upon the terms and
subject to the conditions of this Agreement, at the Closing, the Seller will
transfer to the Purchaser the Shares and the Purchaser shall accept such
transfer.
SECTION 2.02. Purchase Price. Subject to adjustment as provided in
Section 2.05, the purchase price for the Shares shall be the sum of (i)
US$8,000,000 plus (ii) the Purchase Price Adjustment Amount, payable in cash
(the "Purchase Price").
SECTION 2.03. Closing. Upon the terms and subject to the conditions
of this Agreement, the sale and purchase of the Shares shall take place at a
closing (the "Closing") to be held at the offices of [Shearman & Sterling, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, New York] at 10:00 a.m. New York time on the day of
the consummation of the proposed initial public offering by the Purchaser (the
"IPO"), or at such other place or at such other time or on such other date as
the Seller and the Purchaser may mutually agree upon in writing (the day on
which the Closing takes place being the "Closing Date").
SECTION 2.04. Closing Deliveries. (a) At the Closing and upon
confirmation of payment of the Purchase Price, the Seller shall deliver to the
Purchaser (i) one or more stock certificates evidencing the Shares duly endorsed
in blank, or accompanied by stock powers duly executed in blank, in form
satisfactory to the Purchaser, and (ii) any documents required to be delivered
by the Seller pursuant to Section 7.02.
(b) At the Closing and upon receipt of the documents described in
Section 2.04(a), the Purchaser shall deliver to the Seller (i) any documents
required to be delivered by the Purchaser pursuant to Section 7.01, and (ii) a
banker's check in the amount of the Purchase Price less the Escrow Amount.
SECTION 2.05. Cash Mechanism. (a) Subject to the provisions of this
Section 2.05, the Purchase Price Adjustment Amount will be paid by the Purchaser
to the Seller in accordance with Section 2.05(b).
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(b) For purposes of this Section 2.05, (i) the "Average Cash Amount"
means, subject to adjustment as set forth in Section 2.05(c), the amount of cash
that is equal to the simple average daily balance of cash, time deposits,
certificates of deposit, marketable securities and other short term investments
and cash equivalents ("Cash") of the Company at the close of business on each
Business Day during the Measuring Period, (ii) "Measuring Period" means the
period commencing at 12:01 a.m. on the date of the month immediately preceding
the month in which the Closing Date occurs that is the same date of the month as
the Closing Date (or if such date is not a calendar date, the date that
corresponds most closely to the date that is the Closing Date) and ending at
11:59 p.m. on the day immediately preceding the Closing Date, (iii) "Purchase
Price Adjustment Amount" means the Dollar Equivalent of (A) the Average Cash
Amount less (B) the checks issued by the Company that have not cleared on the
Closing Date, and (iv) "Dollar Equivalent" means, with respect to an amount
expressed in any currency other than United States dollars, the dollar
equivalent of such amount as determined by reference to the noon buying rate in
The City of New York (as of the Business Day immediately preceding the Closing
Date) for cable transfers in such currency as certified for customs purposes by
(or if not so certified, as otherwise determined by) the Federal Reserve Bank of
New York.
(c) The Average Cash Amount will be adjusted in the event the
Company makes (i) any Cash distribution (in respect of the Shares) to the
Seller, (ii) any broker payments pursuant to Section 3.20 or (iii) any payment
to the Seller with respect to the Intercompany Loan during the Measuring Period
by subtracting the amount of any such distribution or payment from the daily
amount of Cash in each of the days during the Measuring Period immediately
preceding the date of such distribution or payment.
(d) During the Measuring Period, the Purchaser shall, and the Seller
shall cause the Company to, make all payments that are to be made to the Company
or the Purchaser, as applicable, under existing contractual arrangements or
agreements in the ordinary course of business consistent with past practice. In
addition, during the Measuring Period, the Seller shall cause the Company to
conduct its business in the ordinary course consistent with past practice,
including, without limitation, not shortening or lengthening the customary
payment time for any of its payables or receivables and continuing its
purchasing and capital purchasing practices in accordance with past practice. To
facilitate the foregoing, (i) the Seller shall circulate to the relevant
personnel of the Company at least thirty days prior to the expected commencement
of the Measuring Period written instructions to such effect and (ii) the Seller
shall cause the Company to provide representatives of the Purchaser with access,
at reasonable times, to all offices, personnel, books and records of the Company
that the Purchaser may reasonably request for purposes of monitoring the
compliance by the Company with this Section 2.05(d) and the calculation by the
Company of the Average Cash Amount and the Purchase Price Adjustment Amount in
accordance with
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this Section 2.05. During the period from 11:59 p.m. on the day immediately
preceding the Closing Date through the Closing, the Seller shall cause the
Company not to make any payments of cash except pursuant to normal banking
transactions, including check clearing or deposits, that are not under the
control of the Company, or pursuant to contractual obligations with third
parties that were previously disclosed to the Purchaser or that were entered
into in the ordinary course of business consistent with past practice.
(e) On the Closing Date, the Seller shall cause the Company to
inform each of the Seller and the Purchaser of the (i) Average Cash Amount, as
well as the calculations resulting therein, and (ii) the aggregate amount with
respect to which checks of the Company have been issued but not cleared on the
Closing Date.
(f) (i) Prior to the Closing, the Purchaser and the Seller shall
enter into an Escrow Agreement, in substantially the form attached hereto as
Exhibit 2.05(f), with a third party selected by the Purchaser and reasonably
acceptable to the Seller (the "Escrow Agent"). In accordance with the terms of
the Escrow Agreement, the Purchaser will, on the Closing Date, deposit the sum
of US$250,000 (the "Escrow Amount") (to be deducted from the Purchase Price in
accordance with Section 2.04(b)) with the Escrow Agent, which will hold such
amount in an interest bearing account until the later of (A) the 90th day
following the Closing Date or (B) the date on which any dispute pursuant to
Section 2.05(f)(ii) has been resolved, to be managed and paid out in accordance
with the Escrow Agreement and this Section 2.05.
(ii) In the event the Purchaser determines, within 90 days following
the Closing Date, that the agreements of the Seller to cause the Company to
comply with the requirements contained in Section 2.05(d) were not complied with
and, as a result of such non-compliance, the Average Cash Amount was either
greater or lesser than the average amount of Cash that the Company would have
had during the Measuring Period had such provisions been complied with, the
Purchaser will provide written notice to the Seller (with a copy to the Escrow
Agent) to such effect, specifying the amount of the difference and its reasons
for such determination. In the absence of any written notice of dispute
delivered by the Seller to the Purchaser and the Escrow Agent within 10 days
after receipt of the Purchaser's written notice as to such determination and the
amount of such difference, (x) in the event the Average Cash Amount is greater
than it would have been, the Purchaser will receive from the Escrow Agent and
the Seller, if appropriate, a cash payment equal to the amount of such
difference, together with interest thereon, as set forth in clause (iii) below,
and (y) in the event the Average Cash Amount is less than it would have been,
the Seller will receive from the Purchaser a cash payment equal to the amount of
such difference, together with interest thereon, as set forth in clause (iii)
below. In the event the Seller delivers such a written notice disputing such
determination or the amount of such difference, such dispute will be submitted
for resolution to the Independent Accounting
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Firm, which will resolve such dispute within 30 days of the date of such
submission and whose decision will be final and binding on the Seller and the
Purchaser. The fees and expenses of the Independent Accounting Firm will be
allocated between the Purchaser, on the one hand, and the Seller, on the other
hand, in the same proportion that the aggregate amount of the difference so
submitted to the Independent Accounting Firm that is unsuccessfully disputed by
the Seller, on the one hand, or the Purchaser, on the other hand, bears to the
total amount of the difference so submitted.
(iii) In the event any payment is to be made to the Purchaser
pursuant to clause (ii) above, the Escrow Agent will pay such amount to the
Purchaser, together with the appropriate amount of interest thereon, and if such
payment is less than the amount of such difference, the Purchaser will recover
such excess amount from the Seller, together with interest thereon from the
Closing Date to and including the date of payment by the Seller to the Purchaser
at the Interest Rate (as such term is defined in the Escrow Agreement), pursuant
to the provisions of Section 8.02 (except that the provisions of Section
8.02(b)(i) and (ii) will not apply). In the event any payment is to be made to
the Seller pursuant to clause (ii) above, the Purchaser will pay such amount to
the Seller, together with interest thereon from the Closing Date to and
including the date of payment by the Purchaser to the Seller at the Interest
Rate, pursuant to the provisions of Section 8.04. In the event any amount
remains in the Escrow Fund (as such term is defined in the Escrow Agreement) on
the later of (A) the 90th day following the Closing Date or (B) the date on
which any dispute pursuant to Section 2.05(f)(ii) has been resolved, all amounts
held by the Escrow Agent on such day, after giving effect to any payments to be
made to the Purchaser hereunder, will be paid to the Seller, including all
interest accrued on the remaining principal amount.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an inducement to the Purchaser to enter into this Agreement, the
Seller represents and warrants to the Purchaser as follows:
SECTION 3.01. Organization, Authority and Qualification of the
Seller. The Seller is a corporation duly organized, validly existing and in good
standing under the laws of Switzerland and has all necessary power and authority
to enter into this Agreement, to carry out its obligations hereunder and to
consummate the transactions contemplated hereby. The Seller is duly licensed or
qualified to do business and is in good standing in each jurisdiction in which
the properties owned or leased by it or the operation of its business make such
licensing or qualification necessary, except to the extent that the failure to
be so licensed or qualified would not adversely affect the ability of the Seller
to carry out its obligations under, and to consummate the transactions
contemplated by, this Agreement. The execution and delivery of this
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Agreement by the Seller, the performance by the Seller of its obligations
hereunder and the consummation by the Seller of the transactions contemplated
hereby have been duly authorized by all requisite action on the part of the
Seller. This Agreement has been duly executed and delivered by the Seller and
(assuming due authorization, execution and delivery by the Purchaser) this
Agreement constitutes a legal, valid and binding obligation of Seller
enforceable against it in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally or by general principles of equity.
SECTION 3.02. Organization, Authority and Qualification of the
Company. (a) The Company is an organization duly organized, validly existing and
in good standing under the laws of Switzerland and is duly licensed or qualified
to do business and is in good standing in each jurisdiction in which the
properties owned or leased by it or the operation of its business makes such
licensing and qualification necessary (except in those jurisdictions set forth
in Section 3.02(a) of the disclosure schedule which has been delivered by the
Seller to the Purchaser prior to the date hereof and which is attached hereto
(the "Seller's Disclosure Schedule"). The Company has all the necessary power
and authority to own, operate or lease the properties and assets owned, operated
or leased by it and to carry on its business as it has been and is currently
conducted by the Company. All material actions taken by the Company have been
duly authorized, and the Company has not taken any material action that in any
respect conflicts with or results in a violation of any provision of the
Company's organizational documents (the "Company Charter Documents"). A true and
correct copy of the Company Charter Documents, as in effect on the date hereof,
has been delivered by the Seller to the Purchaser.
(b) There are no corporations, partnerships, limited liability
companies or other legal entities in which the Company owns any direct or other
interests or any right (contingent or otherwise) to acquire the same. The
Company is not, directly or indirectly, a participant in any joint venture.
SECTION 3.03. Company Interests. As of the date hereof, the Shares
are owned, beneficially and of record, by the Seller, free and clear of all
Encumbrances. None of the outstanding equity interests in the Company was issued
in violation of any preemptive rights. There are no options, warrants,
convertible securities or other rights, agreements, arrangements or commitments
of any character relating to the Shares or obligating the Seller or the Company
to issue or sell any equity-related interest in the Company. There are no
outstanding contractual obligations of the Company to repurchase, redeem or
otherwise acquire any equity interests of or to provide funds to, or make any
investment (in the form of a loan, capital contribution or otherwise) in, any
other Person. The Shares constitute all the issued outstanding equity interests
in the Company and are owned of record and beneficially solely by the Seller,
free and clear of all Encumbrances. Upon
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consummation of the transactions contemplated by Article II, the Purchaser will
fully own the Shares, free and clear of any Encumbrances (other than
Encumbrances created by the Purchaser). There are no voting trusts, proxies or
other agreements or understandings in effect with respect to the voting or
transfer of any of the Shares.
SECTION 3.04. No Conflict. The execution, delivery and performance
of this Agreement by the Seller do not and will not (a) violate, conflict with
or result in the breach of any provision of the articles of association (or
similar organizational documents) of the Seller or the Company, (b) conflict
with or violate (or cause an event which could have a Material Adverse Effect as
a result of) any Law or Governmental Order applicable to the Seller or the
Company, or any of their respective assets, properties or businesses, or (c)
conflict with, result in any breach of, constitute a default (or event which
with the giving of notice or lapse of time, or both, would become a default)
under, require any consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation or cancellation of, or result in
the creation of any Encumbrance on any of the Shares or on any of the assets or
properties of the Seller or the Company pursuant to, any note, bond, mortgage or
indenture, or material contract, agreement, lease, sublease, license,
sublicense, permit, franchise or other instrument or arrangement to which the
Seller or the Company is a party or by which any of the Shares or any of the
Company's assets or properties is bound or affected.
SECTION 3.05. Consents and Approvals. The execution, delivery and
performance of this Agreement by the Seller do not and will not require any
consent, approval, authorization or other order of, action by, filing with or
notification to any Governmental Authority or any other Person, except for the
consents, approvals and authorizations set forth in Section 3.05 of the Seller's
Disclosure Schedule.
SECTION 3.06. Financial Information and Books and Records. (a) True
and complete copies of the audited balance sheet of the Company for each of the
three fiscal years ended as of 31 December 1994, 31 December 1995 and 31
December 1996, and the related audited statements of income, together with all
related notes and schedules thereto, accompanied by the reports thereon of the
Company's accountants (collectively referred to herein as the "Financial
Statements") have been delivered by the Seller to the Purchaser. The Financial
Statements and the Net Asset Test Reference Balance Sheet (i) were prepared in
accordance with the books of account and other financial records of the Company,
(ii) present fairly the financial condition and results of operations of the
Company as of the dates thereof or for the periods covered thereby, (iii) have
been prepared in accordance with the Accounting Principles and (iv) include all
adjustments (consisting only of normal adjustments) that are necessary for a
fair presentation of the financial condition of the Company and the results of
the operations of the Company as of the dates thereof or for the periods covered
thereby, except in the case of the Net Asset Test Reference Balance Sheet (a
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copy of which is set forth in Section 3.06(a) of the Seller's Disclosure
Schedule), which excludes (x) any indebtedness for borrowed money of the Company
and (y) any Cash other than cash in the amount of any checks outstanding.
(b) The books of account and other financial records of the Company:
(i) reflect all items of income and expense and all assets and Liabilities
required to be reflected therein in accordance with the Accounting Principles
and (ii) are in all material respects complete and correct, and do not contain
or reflect any material inaccuracies or discrepancies.
(c) The minute books of the Company contain accurate records of all
meetings and accurately reflect all other actions taken by the Company or by the
Seller as sole stockholder thereof. Complete and accurate copies of all such
minute books have been provided to the Purchaser.
SECTION 3.07. No Undisclosed Liabilities. There are no Liabilities
of the Company, other than Liabilities (i) reflected or reserved against on the
Net Asset Test Reference Balance Sheet, (ii) incurred since 31 December 1996 in
the ordinary course of the business, consistent with the past practice, of the
Company or (iii) disclosed in this Agreement or in Section 3.07 of the Seller's
Disclosure Schedule and which do not and could not have a Material Adverse
Effect.
SECTION 3.08. Conduct in the Ordinary Course, Absence of Certain
Changes, Events and Conditions. Except as disclosed in Section 3.08 of the
Seller's Disclosure Schedule, since 31 December 1996, the business of the
Company has been conducted in the ordinary course and consistent with past
practice. As amplification and not limitation of the foregoing, since 31
December 1996, except as disclosed in Section 3.08 of the Seller's Disclosure
Schedule, the Company has not:
(i) permitted or allowed any of its assets or properties (whether
tangible or intangible) to be subjected to any Encumbrance, other than
Permitted Encumbrances;
(ii) except in the ordinary course of business consistent with past
practice, discharged or otherwise obtained the release of any Encumbrance
or paid or otherwise discharged any Liability, other than current
liabilities reflected on the Net Asset Test Reference Balance Sheet and
current liabilities incurred in the ordinary course of business consistent
with past practice since 31 December 1996;
(iii) made any loan to, guaranteed any indebtedness of or otherwise
incurred any indebtedness on behalf of any Person;
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(iv) redeemed any of the Shares;
(v) except as specifically requested by the Purchaser or as required
to accommodate changes in the Purchaser's business practices, made any
material changes in the customary methods of operations of the Company
including, without limitation, practices and policies relating to
marketing, selling and pricing;
(vi) merged with, entered into a consolidation with or acquired any
interest in any Person or acquired a substantial portion of the assets or
business of any Person or any division or line of business thereof, or
otherwise acquired any material assets;
(vii) made any capital expenditure or commitment for any capital
expenditure in excess of the capital expenditures contemplated by the
planned budget, a true and complete copy of which has been provided to the
Purchaser;
(viii) sold, transferred, leased, subleased, licensed or otherwise
disposed of any properties or assets, real, personal or mixed (including,
without limitation, leasehold interests and intangible assets) with an
individual value in excess of CHF 25,000;
(ix) issued or sold any Shares or other equity interest or any
option, warrant or other right to acquire the same of, or any other
interest in, the Company, except as contemplated by this Agreement;
(x) except for agreements, arrangements or transactions with the
Purchaser or having an individual value of less than CHF 25,000, entered
into any agreement, arrangement or transaction with any of its directors,
officers, employees or stockholders (or with any relative, beneficiary,
spouse or Affiliate of such Person):
(xi) (A) granted any increase, or announced any increase, in the
wages, salaries, compensation, bonuses, incentives, pension or other
benefits payable by the Company to any of its employees, including,
without limitation any increase or change pursuant to any Plan, or (B)
established or increased or promised to increase any benefits under any
Plan, in either case except for ordinary increases consistent with the
past practices of the Company:
(xii) revalued any assets of the Company other than in accordance
with Applicable Accounting Principles;
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(xiii) amended, terminated, canceled or compromised any material
claims of the Company or waived any other rights of material value to the
Company;
(xiv) made any material change in any method of accounting or
accounting practice or policy used by the Company;
(xv) amended or restated the organizational documents of the
Company;
(xvi) made any express or deemed election or settled or compromised
any liability that is the subject of a dispute with any government or
taxing authority, with respect to (A) Taxes of the Company or (B) Taxes,
insofar as Company items are involved, of the Seller;
(xvii) suffered any casualty loss or damage with respect to any of
the Assets which individually has a replacement cost of more than CHF
25,000, which loss or damage shall not have been covered by insurance;
(xviii) suffered any Material Adverse Effect; or
(xix) agreed, whether in writing or otherwise, to take any of the
actions specified in this Section 3.08 or granted any options to purchase,
rights of first refusal, rights of first offer or any other similar rights
or commitments with respect to any of the actions specified in this
Section 3.08.
SECTION 3.09. Litigation. Except as set forth in Section 3.09 of the
Seller's Disclosure Schedule, there are no Actions by or against the Company (or
by or against the Seller or any Affiliate thereof and relating to the Company or
its business) or affecting any of the Assets, pending or threatened before any
Governmental Authority. Neither the Company nor any of the Assets nor the Seller
is subject to any Governmental Order, nor are there any such Governmental Orders
threatened to be imposed by any Governmental Authority which has or could
reasonably be expected to have a Material Adverse Effect.
SECTION 3.10. Compliance with Laws. (a) The Company has conducted
and continues to conduct its business in accordance with all Laws and
Governmental Orders applicable to the Company or any of the Assets or such
business, and the Company is not in violation of any such Law or Governmental
Order.
(b) Except as set forth in Section 3.10(b) of the Seller's
Disclosure Schedule, no Governmental Order applicable to the Company or any of
the Assets or its business has or could reasonably be expected to have a
Material Adverse Effect.
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SECTION 3.11. Environmental and Other Permits and Licenses; Related
Matters. (a) (i) Neither the Seller nor the Company has received notice of any
violation of any Environmental Laws; (ii) the Company has obtained all
Environmental Permits and is and has been in material compliance with their
requirements; (iii) except as disclosed in Section 3.11(a)(iii) of the Seller's
Disclosure Schedule, or as permitted by or as would not result in any material
liability under applicable Environmental Laws, there are no underground or
aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps
or lagoons in which Hazardous Materials are being or have been treated, stored
or disposed on any of the owned, or leased properties or, with respect to the
period of the Company's ownership, tenancy or operation of such property, on any
real property formerly owned, leased or occupied by the Company; (iv) there is
no asbestos or asbestos-containing material on any of the owned or leased
properties, except as permitted by or as would not result in any material
liability under applicable Environmental Laws; (v) the Company has not released,
discharged or disposed of an amount of Hazardous Materials on any of the owned
or leased properties or on any real property formerly owned, leased or occupied
by the Company in any manner or quantity which would have a material effect on
the Company; (vi) the Company is not undertaking, has not completed, and is not
required to conduct, any investigation or assessment or remedial or response
action relating to any release, discharge or disposal of or contamination with
an amount of Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any Governmental Authority or the
requirements of any Environmental Law which would have a material effect on the
Company; and (vii) there are no past, pending or threatened in writing
Environmental Claims against the Company, or any of its properties, and there
are no facts which can form the basis of any such Environmental Claim.
(b) Except as disclosed in Section 3.11(b) of the Seller's
Disclosure, Schedule, there are no environmental audit reports, studies or
analyses in the possession of the Seller or the Company or under their control
relating to the owned or leased properties or the operations of the Company.
SECTION 3.12. Material Contracts. (a) Section 3.12(a) of the
Seller's Disclosure Schedule lists each of the following contracts and
agreements (including, without limitation, oral contracts and agreements) of the
Company (such contracts and agreements being "Material Contracts"):
(i) all broker, distributor, dealer, manufacturer's representative,
franchise, agency, sales promotion, market research, marketing consulting
and advertising contracts and agreements to which the Company is a party
under which the Company can reasonably be expected to pay or be paid at
least CHF 40,000 during the course of the twelve months following the date
hereof;
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(ii) all management contracts and contracts with independent
contractors or consultants (or similar arrangements) to which the Company
is a party, which are not cancelable without penalty or further payment
and without more than 30 days' notice, and under which the Company can be
reasonably expected to pay or be paid at least CHF 25,000 during the
course of the twelve months following the date hereof;
(iii) all contracts and agreements relating to indebtedness of the
Company;
(iv) any agreements that are material to the business of the Company
and that are currently in effect with subscribers that have generated
annual Galileo air booking fees of US$350,000 or more per annum over the
course of any of the last three fiscal years;
(v) all contracts and agreements with any Governmental Authority to
which the Company is a party, and under which the Company can be
reasonably expected to pay or be paid at least CHF 25,000 during the
course of the twelve months following the date hereof;
(vi) all contracts and agreements that limit or purport to limit the
ability of the Company to compete in any line of business or with any
Person or in any geographic area or during any period of time;
(vii) all contracts and agreements between or among the Company and
the Seller or an Affiliate of the Seller; and
(viii) all other contracts and agreements whether or not made in the
ordinary course of business, which are material to the Company or the
conduct of its businesses or the absence of which would have a Material
Adverse Effect.
(b) Each Material Contract: (i) is valid and binding on the
respective parties thereto and is in full force and effect and (ii) upon
consummation of the transactions contemplated by this Agreement, except to the
extent that any consents set forth in Section 3.05 of the Seller's Disclosure
Schedule are not obtained, shall continue in full force and effect without
penalty or other adverse consequence. The Company is not in breach of, or
default under, any Material Contract. The Seller has furnished the Purchaser
with true and complete copies of all Material Contracts.
(c) To the best knowledge of the Seller and the Company, no other
party to any Material Contract is in breach thereof or default thereunder
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(d) There is no contract, agreement or other arrangement granting
any Person any preferential right to purchase, other than in the ordinary course
of business consistent with past practice, any of the properties or assets of
the Company.
SECTION 3.13. Intellectual Property. The Company owns or possesses
adequate licenses or other valid rights to use all of the Company Intellectual
Property which is material to the conduct of the business of the Company, and
there is no assertion or claim challenging the validity of such Company
Intellectual Property. On the Closing Date, the Company will own the Transferred
Intellectual Property, free and clear of any Encumbrances. There are no
infringements of any Company Intellectual Property. There are no pending or
threatened interferences, reexaminations, oppositions or nullities involving any
patents, patent rights or applications therefor of the Company which are
material to the conduct of the business of the Company. Section 3.13 of the
Seller's Disclosure Schedule lists each material license or other agreement
pursuant to which the Company has the right to use Company Intellectual Property
utilized in connection with any services provided by the Company (the "Company
Licenses"). There is no breach or violation of any Company License by the
Company or by any third party or threatened or actual loss of rights accruing to
the Company under any Company License. Each Company License is a legal, valid
and binding agreement of the Company and each Company License is a legal, valid
and binding agreement of the other parties thereto. The consummation of the
transactions contemplated by this Agreement will not result in the termination
of, or any modification to, any Company License, except where the foregoing
would not have a material effect on the conduct of the business of the Company.
The Company has taken reasonable measures to maintain the confidentiality of the
know-how of the Company, the value of which to the Company is dependent upon the
maintenance of the confidentiality thereof. The Company has not licensed or
otherwise permitted the use by any third party of any proprietary information on
terms or in a manner that is reasonably likely to have a Material Adverse
Effect. The conduct of the business of the Company as currently conducted or as
currently contemplated (by existing Company management) to be conducted does not
and will not infringe upon or conflict with, in any way, any license, trademark,
trademark right, trade name, trade name right, patent, patent right, industrial
model, invention, service ▇▇▇▇ or copyright of any third party that is
reasonably likely to be material to the Company's operations.
SECTION 3.14. Real Property and Leases. (a) The Company owns no
real property.
(b) All leases of real property leased for the use or benefit of the
Company to which the Company is a party which are material, individually or in
the aggregate, to the business of the Company, and all amendments and
modifications thereto are in full force and effect and have not been modified or
amended, and there exists no default under any such lease by the Company, nor
any event which with
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notice or lapse of time or both would constitute a default thereunder by the
Company which would permit any such lease to be terminated by the other party
thereto.
SECTION 3.15. Assets. (a) The Company owns, leases or has the legal
right to use all material properties and assets, including, without limitation,
the Company Intellectual Property, used or intended to be used in the conduct of
its business or otherwise owned, leased or used by the Company and, with respect
to contract rights, is a party to and enjoys the right to the benefits of all
material contracts, agreements and other arrangements used or intended to be
used by the Company or in, or relating to the conduct of its business (all such
properties, assets and contract rights being the "Assets"). Set forth on Section
3.15(a) of the Seller's Disclosure Schedule is a list of all of the tangible
Assets as of the date hereof. The Company has good and marketable title to, or,
in the case of leased or subleased Assets, valid and subsisting leasehold
interests in, all the Assets, free and clear of all Encumbrances, except for
Permitted Encumbrances.
(b) The Assets constitute all the material properties, assets and
rights forming a part of, used, held or intended to be used in, and all such
properties, assets and rights as are necessary in the conduct of, the business
(as currently conducted by existing Company management) of the Company. At all
times since 31 December 1996, the Company has caused the Assets to be maintained
in accordance with good business practice, and the Assets are generally in good
operating condition and repair and are suitable for the purposes for which they
are used and intended, except for ordinary wear commensurate with the age and
depreciated value of such Assets.
(c) Following the consummation of the transactions contemplated by
this Agreement, either the Company will continue to own, pursuant to good and
marketable title, or lease, under valid and subsisting leases, or otherwise
retain its interest in the Assets without incurring any penalty or other adverse
consequence, including, without limitation, any increase in rentals, royalties,
or licenses or other fees imposed as a result of, or arising from, the
consummation of the transactions contemplated by this Agreement (except, with
respect to contractual arrangements to the extent that any consents set forth in
Section 3.05 of the Seller's Disclosure Schedule are not obtained). Immediately
following the Closing, (i) in the case of books and records other than
Tax-related books and records, the Company shall own or possess all documents,
books, records, agreements and financial data of any sort used by the Company
which is material to the conduct of its business, and (ii) in the case of
Tax-related books and records (including all information (including copies of
Returns, original work papers, correspondence with authorities, and source
documents (or copies thereof)) relating to any and all Tax filings of the
Company), the Company shall own or possess all of such books and records.
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SECTION 3.16. Employee Benefit Matters. (a) Plans and Material
Documents. Section 3.16(a) of the Seller's Disclosure Schedule lists (i) all
employee benefit plans and all bonus, stock option, stock purchase, restricted
stock, incentive, deferred compensation, pension, retiree medical or life
insurance, supplemental retirement, severance or other benefit plans, programs
or arrangements, and all employment, termination, severance or other contracts
or agreements, to which the Company is a party, with respect to which the
Company has any obligation or which are maintained, contributed to or sponsored
by the Company for the benefit of any current or former employee, officer or
director of the Company, (ii) each employee benefit plan for which the Company
could incur liability in the event such plan has been or were to be terminated,
(iii) any contracts, arrangements or understandings between the Seller or any of
its Affiliates and any employee of the Company, including, without limitation,
any contracts, arrangements or understandings relating to the sale of the
Company (collectively, the "Plans"). Except as disclosed in the Seller's
Disclosure Schedule, each Plan is in writing and the Seller has furnished the
Purchaser with a complete and accurate copy of each Plan and a complete and
accurate copy of each material document prepared in connection with each such
Plan including, without limitation, (x) a copy of each trust or other funding
arrangement, (y) each summary plan description and a summary of material
modifications, and (z) the most recently prepared actuarial report and financial
statement in connection with each such Plan.
(b) Compliance with Applicable Law. Each Plan is in compliance with
all material requirements of all applicable Law, and all Persons who participate
in the operation of such Plans have always acted in accordance with the
provisions of all applicable Laws. The Company has performed all obligations
required to be performed by it under, is not in any respect in default under or
in violation of, and has no knowledge of any default or violation by any party
to, any Plan. Except as disclosed in the Seller's Disclosure Schedule, no legal
action, suit or claim is pending or threatened with respect to any Plan (other
than claims for benefits in the ordinary course) and no fact or event exists
that could reasonably be expected to give rise to any such action, suit or
claim.
(c) Plan Contributions and Funding. All contributions, premiums or
payments required to be made with respect to any Plan have been made on or
before their due dates. All such contributions are deductible for income tax
purposes. Except as disclosed in the Seller's Disclosure Schedule, as of the
Closing Date, no Plan will have an unfunded benefit liability.
(d) Bonus Payments. All employee bonus payments with respect to
fiscal year 1996 have been paid, or shall be paid prior to the first day of the
Measuring Period.
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(e) Severance or Redundancy Payments. All employee severance or
redundancy payments that have been made since 31 December 1995 were made in
compliance with applicable Law and any relevant Plans and there are no legal
actions, suits or claims pending or threatened with respect to any such
severance or redundancy payments and no fact or event exists that could
reasonably be expected to give rise to any such action, suit or claim.
SECTION 3.17. Labor Matters. Except as set forth in Section 3.17 of
the Seller's Disclosure Schedule, (a) the Company is not a party to any
collective bargaining agreement or other labor union contract applicable to
persons employed by the Company and currently there are no organizational
campaigns, petitions or other unionization activities seeking recognition of a
collective bargaining unit which could affect the Company; (b) there are no
material controversies, strikes, slowdowns or work stoppages pending or
threatened between the Company and any of its employees and the Company has not
experienced any such material controversy, strike, slowdown or work stoppage
within the past three years; (c) the Company has not breached or otherwise
failed to comply with the provisions of any collective bargaining or union
contract and there are no grievances outstanding against the Company under any
such agreement or contract which could have a Material Adverse Effect; (d) there
are no unfair labor practice complaints pending against the Company before any
Governmental Authority or any current union representation questions involving
employees of the Company which could have a Material Adverse Effect; and (e) the
Company is currently in compliance with all applicable Laws relating to the
employment of labor, including those related to wages, hours, collective
bargaining and the payment and withholding of taxes and other sums as required
by the appropriate Governmental Authority and has withheld and paid to the
appropriate Governmental Authority or is holding for payment not yet due to such
Governmental Authority all amounts required to be withheld from employees of the
Company and is not liable for any material arrears of wages, taxes, penalties or
other sums for failure to comply with any of the foregoing
SECTION 3.18. Taxes. Except as set forth in Section 3.18 of the
Seller's Disclosure Schedule, (a) (i) All returns and reports in respect of
Taxes required to be filed with respect to the Company for all periods ending on
or before the Closing Date have been timely filed (or will be timely filed by
the Company); (ii) all Taxes required to be shown on such returns and reports or
otherwise due or assessed have been timely paid; (iii) all returns and reports
relating to Income Taxes are true, correct and complete and all returns and
reports of the Company relating to Taxes other than Income Taxes are true,
correct and complete in all material respects; (iv) no adjustment relating to
such returns has been proposed in writing formally or informally by any Tax
authority and no basis exists for any such adjustment; (v) there are no pending
or, to the best knowledge of the Seller after due inquiry, threatened actions or
proceedings for the assessment or collection of Taxes against the Company;
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(vi) there are no Tax liens on any assets of the Company except liens for Taxes
not yet due and payable; (vii) the Company has not been at any time a member of
any partnership or joint venture or the holder of a beneficial interest in any
trust for any period for which the statute of limitations for any Tax has not
expired; (viii) there are no outstanding waivers or agreements extending the
statute of limitations for any period with respect to any Tax to which the
Company may be subject; (ix) the Company does not have any income reportable for
a period ending after the Closing Date but attributable to the sale of property
or the provision of services (e.g., an installment sale) occurring in or a
change in accounting method made for a period ending on or prior to the Closing
Date which resulted in a deferred reporting of income which economically accrued
in a period ending on or before the Closing Date from such transaction or from
such change in accounting method; (x) there are no requests by any Tax authority
for information currently outstanding with respect to the Taxes of the Company;
(xi) there are no proposed reassessments of any property owned by the Company or
other taxpayer specific proposals that could increase the amount of any Tax to
which the Company would be subject, (xii) no power of attorney that is currently
in force has been granted with respect to any matter relating to Taxes of the
Company, (xiii) the Company is not doing business or engaged in a trade or
business in any jurisdiction in which it has not filed all required income or
franchise tax Returns and (xiv) no returns have been or will be filed by or on
behalf of the Company on a consolidated, combined or unitary basis.
(b) For purposes of the Seller's indemnification of the Purchaser
pursuant to Section 6.01, the representations in Section 3.18(a) shall be deemed
to have been made with no exception for items disclosed in Section 3.18 of the
Seller's Disclosure Schedule or otherwise.
(c) (i) Section 3.18 of the Seller's Disclosure Schedule lists all
Returns filed by the Company for taxable periods ended on or after 28 September
1993, indicates the most recent Return for each relevant jurisdiction and type
of Tax for which an audit has been completed or the statute of limitations has
lapsed and indicates all Returns that currently are the subject of audit; (ii)
the Seller has made available to the Purchaser correct and complete copies of
all Returns, examination reports, Tax assessments or proposals of assessment,
Tax audit reports, agreements with tax authorities and statements of
deficiencies assessed against or agreed to by the Company since 28 September
1993; and (iii) the Seller has delivered to the Purchaser a true and complete
copy of any tax-sharing or allocation agreement or arrangement to which the
Company is a party and a true and complete description of any such unwritten or
informal agreement or arrangement.
SECTION 3.19. Insurance. (a) Section 3.19 of the Seller's Disclosure
Schedule sets forth a complete list of all material policies of insurance
(including without limitation, errors and omissions insurance) that the Company
has in effect.
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(b) With respect to each such insurance policy: (i) the policy is
legal, valid, binding and enforceable in accordance with its terms and, except
for policies that have expired under their terms in the ordinary course, is in
full force and effect; (ii) the Company is not in breach or default (including
any breach or default with respect to the payment of premiums or the giving of
notice), and no event has occurred which, with notice or the lapse of time,
would constitute such a breach or default or permit termination or modification,
under the policy; (iii) no party to the policy has repudiated or given notice of
an intent to repudiate, any provision thereof; and (iv) to the best knowledge of
the Seller and the Company after due inquiry, no insurer on the policy has been
declared insolvent or placed in receivership, conservatorship or liquidation.
(c) Section 3.19(c) of the Seller's Disclosure Schedule sets forth a
general description of all risks of a nature generally insured against which the
Company is self-insured or which are covered under any risk retention program in
which the Company participates.
(d) All material assets, properties and risks of the Company are
covered by valid and, except for policies that have expired under their terms in
the ordinary course, currently effective insurance policies or binders of
insurance (including, without limitation, general liability insurance, property
insurance and workers' compensation insurance) issued in favor of the Company,
in each case with responsible insurance companies, in such types and amounts and
covering such risks as are consistent with customary practices and standards of
companies engaged in businesses and operations similar to those of the Company.
(e) No insurance policy listed in Section 3.19(a) of the Seller's
Disclosure Schedule will cease to be legal, valid, binding or enforceable in
accordance with its terms and in full force and effect on terms identical to
those in effect as of the date hereof as a result of the consummation of the
transactions contemplated by this Agreement.
SECTION 3.20. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Seller or the Company. Any amounts owing for
services provided to the Company or the Seller by any Person in connection with
the transactions contemplated by this Agreement or any other transaction
involving the Company (including, without limitation, any other sale of the
Company or public offering of the Company) will be settled by the Company prior
to the Closing Date or by the Seller.
SECTION 3.21. Year 2000 Compliance. All software licensed by the
Company pursuant to a Company License (other than any software licensed from the
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Purchaser), and all other products used by the Company in connection with its
business (other than any product obtained from the Purchaser), is Year 2000
compliant, or will be Year 2000 compliant, in either case, with respect to
software owned by the Company or licensed to the Company by the Seller or one of
its Affiliates, at the expense of the Seller, in sufficient time to avoid any
disruption to the Company's business. For purposes of this Section 3.21, such
software and such other products shall be deemed to be Year 2000 compliant to
the extent they can manage and manipulate data involving the transition of dates
from 1999 to 2000 without functional or data abnormality and without inaccurate
results related to such dates.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As an inducement to the Seller to enter into this Agreement, the
Purchaser hereby represents and warrants to the Seller as follows:
SECTION 4.01. Organization, Authority and Qualification of the
Purchaser. The Purchaser is a general partnership, and on or prior to the
Closing will be a corporation or a limited liability company, duly organized and
validly existing under the laws of the State of Delaware and is duly licensed or
qualified to do business and is in good standing in each jurisdiction in which
the properties owned or leased by it or the operation of its business makes such
licensing or qualification necessary, except to the extent that the failure to
be so licensed or qualified would not adversely affect the ability of the
Purchaser to carry out its obligations under, and to consummate the transactions
contemplated by, this Agreement. The Purchaser has all necessary power and
authority to enter into this Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by the Purchaser, the performance by the Purchaser of
its obligations hereunder and the consummation by the Purchaser of the
transactions contemplated hereby have been duly authorized by all requisite
action on its part. This Agreement has been duly executed and delivered by the
Purchaser and (assuming due authorization, execution and delivery by the Seller)
this Agreement constitutes a legal, valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally or by general principles of
equity.
SECTION 4.02. No Conflict. Except as may result from any facts or
circumstances relating solely to the Seller or the Company, the execution,
delivery and performance of this Agreement by the Purchaser do not and will not
(a) violate, conflict with or result in the breach of any provision of the
Purchaser's Partnership Agreement, (b) conflict with or violate any Law or
Governmental Order applicable to
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the Purchaser or [(c) except for the Credit Agreement dated as of 3 July 1996,
among the Purchaser, the banks parties thereto, the letter of credit issuing
banks named therein and ▇▇▇▇▇▇ Guaranty Trust Company of New York as agent,]
conflict with or result in any breach of, constitute a default (or event which
with the giving of notice or lapse of time, or both, would become a default)
under, require any consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation, or cancellation of, or result
in the creation of any Encumbrance on any of the assets or properties of the
Purchaser pursuant to, any note, bond, mortgage or indenture, contract,
agreement, lease, sublease, license, permit, franchise or other instrument or
arrangement to which the Purchaser is a party or by which any of such assets or
properties are bound or affected which would have a material adverse effect on
the ability of the Purchaser to consummate the transactions contemplated by this
Agreement.
SECTION 4.03. Governmental Consents and Approvals. The execution,
delivery and performance of this Agreement by the Purchaser do not and will not
require any consent, approval, authorization or other order of, action by,
filing with, or notification to, any Governmental Authority[, except as
described in a writing given to the Seller by the Purchaser on or prior to the
date of this Agreement].
SECTION 4.04. Investment Purpose. The Purchaser is acquiring the
Shares solely for the purpose of investment and not with a view to, or for offer
or sale in connection with, any distribution thereof.
SECTION 4.05. Brokers. Except for ▇.▇. ▇▇▇▇▇▇, the fees and expenses
of which will be paid for by the Purchaser, no broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Purchaser.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Conduct of Business Prior to the Closing. (a) The
Seller covenants and agrees that, except as described in Section 5.01(a) of the
Seller's Disclosure Schedule, between the date hereof and the time of the
Closing, it shall cause the Company to conduct its business in the ordinary
course and consistent with the Company's prior practice. Without limiting the
generality of the foregoing, except as described in Section 5.01(a) of the
Seller's Disclosure Schedule, as requested by the Purchaser, or as required to
accommodate changes in the Purchaser's business practices, the Seller shall
cause the Company to (i) continue its advertising and promotional activities,
and pricing and purchasing policies, including capital
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purchasing, in accordance with past practice; (ii) not shorten or lengthen the
customary payment cycles for any of its payables or receivables; (iii) use all
reasonable efforts to (A) preserve intact its business organization, (B) keep
available to the Purchaser the services of the employees of the Company, (C)
continue in full force and effect without material modification all existing
policies or binders of insurance currently maintained in respect of the Company
and its business and (D) preserve its current relationships with its customers,
suppliers and other persons with which it has significant business
relationships; (iv) exercise, but only after notice to the Purchaser and receipt
of the Purchaser's prior written approval, any rights of renewal pursuant to the
terms of any of the material leases or subleases which by their terms would
otherwise expire: and (v) not engage in any practice, take any action, fail to
take any action or enter into any transaction which could cause any
representation or warranty of the Seller to be untrue or result in a breach of
any covenant made by the Seller in this Agreement.
(b) Except as described in Section 5.01(b) of the Seller's
Disclosure Schedule, the Seller covenants and agrees that, prior to the Closing,
the Seller shall cause the Company not to do any of the things enumerated in the
second sentence of Section 3.08 (including, without limitation, clauses (i)
through (xix) thereof) without the prior written consent of the Purchaser;
provided, however, that if the Company desires to take any of the actions
enumerated in Section 3.08(v) in response to general industry conditions, the
Seller shall provide written notice of the proposed actions to the Purchaser and
the Purchaser shall respond to such written notice not more than two Business
Days after the receipt thereof.
SECTION 5.02. Access to Information. (a) From the date hereof until
the Closing, upon reasonable notice, the Seller shall cause the Company to, and
shall cause each of the Company's officers, directors, employees, agents,
representatives, accountants and counsel to: (i) afford the officers, employees
and authorized agents, accountants, counsel, underwriters, financing sources and
representatives of the Purchaser reasonable access, during normal business
hours, to the offices, properties, plants, other facilities, books and records
of the Company (including access to the Company's 1996 financial audit work
papers) and to those officers, directors, employees, agents, accountants and
counsel of the Company who have any knowledge relating to the Company or its
business and (ii) furnish to the officers, employees and authorized agents,
accountants, counsel, underwriters, financing sources and representatives of the
Purchaser such additional financial and operating data and other information
regarding the assets, properties and goodwill of the Company (excluding any
Returns or other Tax information of the Seller) and its business (or legible
copies thereof) as the Purchaser may from time to time reasonably request,
including, without limitation, any financial information or other information
that will be required in connection with the IPO.
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(b) In order to facilitate the resolution of any claims made against
or incurred by the Seller prior to the Closing, for a period of ten years after
the Closing, the Purchaser shall cause the Company to (i) retain the books and
records of the Company relating to periods prior to the Closing in a manner
reasonably consistent with the prior practice of the Company, and prior to
disposal thereof the Purchaser shall cause the Company to contact the Seller and
offer to provide it with copies of any such books and records subject to
reimbursement of reasonable expenses; and (ii) upon reasonable notice, afford
the officers, employees and authorized agents and representatives of the Seller
reasonable access (including the right to make, at the Seller's expense,
photocopies), during normal business hours, to such books and records.
(c) In order to facilitate the resolution of any claims made by or
against or incurred by the Purchaser or the Company after the Closing or for any
other reasonable purpose, for a period of ten years following the Closing, the
Seller shall (i) retain the books and records of the Seller which relate to the
Company and its operations for periods prior to the Closing and which shall not
otherwise have been delivered to the Purchaser or the Company; (ii) upon
reasonable notice, afford the officers, employees and authorized agents and
representatives of the Purchaser or the Company reasonable access (including the
right to make photocopies, at the expense of the Purchaser or the Company)
during normal business hours, to such books and records.
SECTION 5.03. Confidentiality. (a) Except to the extent of any
disclosure required (after consultation with the Seller and after seeking
appropriate confidential treatment) to be made in the Purchaser's registration
statement on Form S- 1 (including in any exhibits thereto) filed with the
Securities and Exchange Commission (the "SEC") in connection with the IPO or in
any future filings made with the SEC or other regulatory authorities, and except
as reasonably required by the underwriters in connection with the IPO, the
Parties shall comply with, and shall cause their respective Affiliates,
representatives and agents to comply with all of their respective obligations
under, the Non-Disclosure Agreement, dated as of 18 June 1996, between the
Seller, the Company and the Purchaser (the "Non-Disclosure Agreement"), until
the Closing, at which time such Non-Disclosure Agreement and the obligations of
the Purchaser and the Company thereunder shall terminate. If this Agreement is,
for any reason terminated prior to the Closing, the Non-Disclosure Agreement
shall continue in full force and effect.
(b) The Seller agrees to, and shall cause its agents,
representatives and Affiliates to: (i) treat, hold as confidential and not
exploit for its benefit or the benefit of other relationships with any of its
customers (and not disclose or provide access to any Person to) all information
relating to the Company's products, customers, assets, plans, business, finances
and technological developments and programs, (ii) in
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the event that the Seller or any such agent, representative or Affiliate becomes
legally compelled to disclose any such information, provide the Purchaser with
prompt written notice of such requirement so that the Purchaser or the Company
may seek a protective order or other remedy or waive compliance with this
Section 5.03(b), and (iii) in the event that such protective order or other
remedy is not obtained, or the Purchaser waives compliance with this Section
5.03(b), furnish only that portion of such confidential information which is
legally required to be provided and exercise its best efforts to obtain
assurances that confidential treatment will be accorded such information;
provided, however, that this sentence shall not apply to any information that,
at the time of disclosure, is available publicly and was not disclosed in breach
of this Agreement by the Seller, its agents, representatives or Affiliates;
provided further that, with respect to Company Intellectual Property, specific
information shall not be deemed to be within the foregoing exception merely
because it is embraced in general disclosures in the public domain.
SECTION 5.04. Regulatory and Other Authorizations; Notices and
Consents. (a) Each party shall for itself use all reasonable efforts to obtain
(or, in the case of the Seller, cause the Company to obtain) all authorizations,
consents, orders and approvals of all Governmental Authorities and officials
that may be or become necessary for its execution and delivery of, and the
performance of its obligations pursuant to, this Agreement and will cooperate
fully in promptly seeking to obtain all such authorizations, consents, orders
and approvals. Each party hereto agrees for itself to supply as promptly as
practicable to the appropriate Governmental Authorities any additional
information and documentary material that may be requested pursuant to any
applicable Law. Without limiting the generality of the foregoing, each party
hereto will (i) use all reasonable efforts to prevent the entry in a judicial or
administrative proceeding brought under any antitrust law of any preliminary
injunction or other order that would make consummation of the transactions
contemplated hereby unlawful or would prevent or delay such consummation; and
(ii) take promptly, in the event that such an injunction or order has been
issued in such a proceeding, all steps necessary to prosecute an appeal of such
an injunction or order, and diligently prosecute such appeal.
(b) The Seller shall or shall cause the Company to give promptly
such notices to third parties and use all reasonable efforts to obtain such
third party consents and estoppel certificates as the Purchaser may deem
necessary or desirable in connection with the transactions contemplated by this
Agreement.
(c) The Purchaser shall cooperate and use all reasonable efforts to
assist the Seller in giving such notices and obtaining such consents and
estoppel certificates; provided, however, that neither the Purchaser nor the
Seller shall have any obligation to give any guarantee or other consideration of
any nature in connection with any such notice, consent or estoppel certificate
or to consent to any change in the
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terms of any agreement or arrangement which the Purchaser may deem adverse to
the interests of the Purchaser or the Company or their respective businesses.
(d) Neither the Purchaser nor the Seller knows of any reason why all
the consents, approvals and authorizations necessary for the consummation of the
transactions contemplated hereby will not be received.
SECTION 5.05. Notice of Developments. (a) Prior to the Closing, the
Seller shall, and the Seller shall cause the Company to, promptly notify the
Purchaser in writing of all events, circumstances, facts and occurrences arising
subsequent to the date of this Agreement which could result in any breach of a
representation or warranty or covenant of the Seller in this Agreement, or could
result in any breach of a covenant of the Seller in this Agreement, or which
could have the effect of making any representation or warranty of the Seller in
this Agreement untrue or incorrect in any material respect.
(b) Prior to the Closing, the Purchaser shall promptly notify the
Seller in writing of all events, circumstances, facts and occurrences arising
subsequent to the date of this Agreement which could result in any breach of a
representation or warranty or covenant of the Purchaser in this Agreement or
which could have the effect of making any representation or warranty of the
Purchaser untrue or incorrect in any material respect.
SECTION 5.06. No Solicitation of Employees. The Seller agrees that
it shall not, and shall cause each of its Affiliates not to, during the period
from the date hereof until Closing and, if the Closing occurs, for a period of
two years from the Closing, without the prior written consent of the Purchaser,
directly or indirectly, solicit on a specific or targeted basis for employment
any person who is an employee of the Company, provided that this Section 5.06
shall not prohibit any form of employment advertising or prevent the hiring of
any individual who contacts the Seller or any of its Affiliates.
SECTION 5.07. Use of Intellectual Property. (a) The Seller
acknowledges that from and after the Closing the names "Traviswiss", "Travitel",
"Texass", "OPAL", "Tourbo", "Travi Dynamic", "Travi Access", "Travi Remote",
"Travi to Win", "Travipit", "Traviprinting", "TraviIntern", "Intravinet",
"Extravinet", "Travi-Rainbow", "Travi", "Travidata" and "Travioffice", and all
related names, marks and logos and product names, marks and logos (all of such
names, marks and logos being the "Company Names") shall be owned by the Company,
that (except as provided in Section 5.07(b)) neither the Seller nor any of its
Affiliates shall have any rights in the Company Names, and that neither of the
Seller nor any of its Affiliates will contest the ownership or validity of any
rights of the Purchaser or the Company in or to the Company Names.
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(b) Except as expressly agreed in writing by the Purchaser or
pursuant to any agreements and licenses between the Purchaser and the Seller, or
the Company and the Purchaser or any of its Affiliates, and except for the names
set forth on Exhibit 5.07(b), to which the parties identified thereon shall
continue to have the rights specified on such Exhibit, from and after the
Closing, neither the Seller nor any of its Affiliates shall use any of the
Company Intellectual Property.
(c) To the extent any of the Company Intellectual Property is
obtained from the Seller or one of its Affiliates pursuant to a Company License
or otherwise, effective on the Closing Date, the Seller or such Affiliate hereby
grants to the Company a perpetual, nonexclusive, royalty-free license to use
such Company Intellectual Property for so long as, in the sole discretion of the
Purchaser and the Company, the Company requires such Company Intellectual
Property in the conduct of its business.
SECTION 5.08. Monthly Financial Statements. The Seller agrees that,
between the date hereof and the Closing, promptly following the end of each
calendar month, but in no event later than 15 days following the end of each
calendar month, it will prepare or cause to be prepared, and will promptly
provide to the Purchaser, a balance sheet of the Company as of the end of the
preceding calendar month and statements of income of the Company for the
preceding calendar month. Such monthly financial statements shall be prepared in
accordance with past practice.
SECTION 5.09. Pre-Closing Balance Sheet. No fewer than five Business
Days prior to the Closing Date, the Seller shall cause the Company to prepare an
unaudited balance sheet of the Company in accordance with this Section 5.09 (the
"Pre-Closing Balance Sheet"). In the event that the Closing is scheduled to
occur after the fifteenth day of any particular calendar month, the Pre-Closing
Balance Sheet shall be prepared as of the last day of the immediately preceding
calendar month. If the Closing is scheduled to occur on or prior to the
fifteenth day of any particular calendar month, the Pre-Closing Balance Sheet
shall be prepared as of the last day of the second preceding calendar month. The
Pre-Closing Balance Sheet shall be prepared in accordance with Accounting
Principles applied on a basis consistent with the preparation of the Net Asset
Test Reference Balance Sheet and shall exclude (i) any indebtedness for borrowed
money of the Company, and (ii) any cash or cash equivalents, other than cash in
the amount of any checks outstanding. During the preparation of the Pre-Closing
Balance Sheet and during the period of any review by the Purchaser and its
representatives of the Pre-Closing Balance Sheet, the Seller shall cause the
Company to provide, and shall cause the Company and its officers, employees and
agents to provide, full access to the books, records, facilities and employees
of the Company, in each case to the extent required by the Purchaser and its
representatives in order to monitor the preparation of, and review, the
Pre-Closing Balance Sheet.
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SECTION 5.10. Company Pension Fund. (a) Until such time as the
Purchaser decides to establish its own pension arrangements for the employees of
the Company pursuant to Section 5.10(b), the Seller shall use reasonable efforts
to cause the "Allgemeine Pensionskasse der Swissair (APK)" and the
"Kaderversicherueng der Swissair" (together, the "Seller's Pension Funds") to
provide for pension cover for the active and retired employees of the Company at
substantially the same cover as is provided as of the Closing Date. During such
time, the Purchaser shall cause the Company to pay or make arrangements for
payment of all contributions required under the regulations applicable to the
Seller's Pension Funds.
(b) In the event the Purchaser decides at any time after the Closing
Date to establish its own pension arrangements for the employees of the Company,
the following principles shall apply:
(i) The Purchaser will cause the Company to establish a new
pension fund (or pension funds) or to designate an existing
pension fund, as the case may be (the "New Company Fund"),
which shall cover the then active employees of the Company.
(ii) The main principles of the transfer of assets and liabilities
from the Seller's Pension Funds to the New Company Fund shall
be set out in an agreement between such funds (the "Pension
Transfer Agreement") which shall provide for (A) the transfer
of all liabilities relating to then active Company employees
and (B) a transfer of an adequate and fair portion of the
reserves of the Seller's Pension Funds which shall be
proportional to the liabilities (calculated on an accrued
benefit obligation basis) that the Seller's Pension Funds have
with respect to the employees whose liabilities are
transferred under such Pension Transfer Agreement and all
other employees covered under the Seller's Pension Funds. Such
Pension Transfer Agreement shall moreover provide that the
amount transferred is at least equal to the actuarial
valuation of accrued liabilities calculated on the same
actuarial principles as those used in the past.
(iii) The Pension Transfer Agreement shall thereafter be submitted
for approval to the competent supervising authorities.
(c) The Seller agrees to use reasonable efforts to cause the
Seller's Pension Funds to apply the principles set forth in Sections 5.10(b)(ii)
and (iii).
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SECTION 5.11. Insurance Coverage by the Seller. The Seller shall
continue, at the Company's request, to provide insurance coverage to the Company
as currently provided to the Company until 31 December 1997. The Purchaser will
cause the Company to pay the insurance premium for such coverage at the rates in
effect on the Closing Date.
SECTION 5.12. Certain Services. (a) The Seller shall, or shall cause
atraxis AG, a wholly-owned subsidiary of the Seller ("atraxis"), or aviReal AG,
a wholly-owned subsidiary of the Seller ("aviReal"), to, as the case may be,
continue to provide to the Company the following services, upon the terms, and
at the prices, set forth on Exhibit 5.12(a) hereto, for a period of not less
than nine months following the Closing Date, provided that (x) the Company may
cease to receive any such services upon not less than 90 days' prior written
notice to the Seller or atraxis, as the case may be, and (y) the Seller (or
atraxis or aviReal, as the case may be) may cease to provide any such services
upon not less than 90 days' prior written notice to the Purchaser, but in no
event shall the Seller's notice of termination (or atraxis' or aviReal's notice
of termination, as the case may be) be effective sooner than the date that is
nine months after the Closing Date:
(i) human resources administration (service provider: the Seller);
(ii) payroll services (service provider: the Seller);
(iii) administration of health insurance (service provider: the
Seller);
(iv) mail distribution (service provider: aviReal);
(v) mail service (service provider: aviReal);
(vi) administration of seasonal tickets for public transportation
(service provider: aviReal);
(vii) administration for parking lot access (service provider:
aviReal);
(viii)administration and issuance of company identification cards
(service provider: aviReal);
(ix) medical services (service provider: the Seller);
(x) EDP system services for office material orders (service
provider: Swissair); and
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(xi) "IMS APPLICATIONS" Product - SAP accounting system (service
provider: atraxis); provided, however, that in no event shall
atraxis' notice of termination with regard to the services
described in this Section 5.12(a)(xi) be effective sooner than
the first anniversary of the Closing Date.
(b) The Seller shall cause atraxis to continue to provide to the
Company the following services, upon the terms, and at the prices, set forth on
Exhibit 5.12(b) hereto, for a period of not less than one year following the
Closing Date, provided that the Company may cease to receive, and atraxis may
cease to provide, any such services upon not less than six months' prior written
notice to the other party, but in no event shall the Company cease to receive,
or atraxis cease to provide, any such services sooner than the first anniversary
of the Closing Date:
(i) "STAFF SERVICES" Product - development/consultancy;
(ii) "REMIS" Product - remote equipment maintenance and
installation services;
(iii) "TRAVITEL" Product; and
(iv) "MVS HOST SYSTEM" Product - host services profs,
problem/configuration management, ▇▇▇, ▇▇▇▇▇▇, or any
replacement system or application for any of the foregoing.
(c) The Seller shall cause atraxis to continue to provide to the
Company the following services, upon the terms, and at the prices, set forth on
Exhibit 5.12(c) hereto, provided that the Company may cease to receive, and
atraxis may cease to provide, any such services upon not less than six months'
prior written notice to the other party:
(i) "RENTAL/USE OF PREMISES" Product - room rental storage.
(d) The Seller shall cause atraxis to continue to provide to the
Company the following services, upon the terms, and at the prices, set forth on
Exhibit 5.12(d) hereto, provided that the Company may cease to receive, and
atraxis may cease to provide, any such services upon not less than twelve
months' prior written notice to the other party, but in no event shall the
Company cease to receive, or atraxis cease to provide, any such services sooner
than October 21, 1998:
(i) "TELECOMMUNICATION" Product - network support.
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(e) The Seller shall cause atraxis to continue to provide to the
Company the following services, upon the terms, and at the prices, set forth on
Exhibit 5.12(d) hereto, provided that (i) the Company may cease to receive any
such services upon not less than twelve months' prior written notice to atraxis,
but in no event shall the Company cease to receive any such services sooner than
December 31, 1999, unless the Company shall have demonstrated (by providing
reasonably detailed supporting documentation to atraxis including, but not
limited to, documentation regarding the cost of the alternative) that there is a
less costly alternative for the provision of such services, including having the
Company provide such services to itself, and atraxis shall have failed to match
such less costly alternative, and (ii) atraxis may cease to provide any such
services upon not less than twelve months' prior written notice to the Company,
but in no event shall atraxis' notice of termination with regard to OPAL
services be effective sooner than December 31, 2001, and in no event shall
atraxis' notice of termination with regard to Tourbo services be effective
sooner than December 31, 2002:
(i) "TRAVISWISS" Product - national vendor systems, including
OPAL and Tourbo.
(f) So long as the Company is receiving any of the services
described in Sections 5.12(b)(ii) or (iii), Section 5.12(d)(i) or Section
5.12(e)(i), the Seller shall cause atraxis not to cease to provide any of the
services described in Sections 5.12(b)(i) or (iv).
(g) After the Closing Date, the Company shall have no obligation to
purchase any services from the Seller or its Affiliates other than the services
described in Sections 5.12(a), (b), (c), (d) and (e).
SECTION 5.13. Certain Intercompany Payments. (a) The parties agree
that the payment by the Company to the Seller of management charges shall cease
on or prior to the Closing Date.
(b) All amounts owed by the Seller or any of its Affiliates to the
Company prior to the Closing Date shall be paid by the Seller or such Affiliate
to the Company on or prior to the Closing Date.
(c) The Seller shall cause the Company to repay all amounts owed by
the Company to the Purchaser or the Seller, other than amounts due in the
ordinary course of business consistent with past practice, to the Purchaser or
the Seller, as the case may be, prior to the first day of the Measuring Period.
SECTION 5.14. Intercompany Loan. The Seller shall use reasonable
efforts to cause the Company to repay prior to the Closing Date the loan payable
to the
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Seller that is classified on the Company's balance sheet as "DARLEHEN" (the
"Intercompany Loan"). To the extent any amount of principal with regard to the
Intercompany Loan remains unpaid at Closing, the Seller shall assign all rights
to such principal to the Purchaser pursuant to an instrument in writing that is
reasonably satisfactory to the Purchaser. As of the Closing Date, no interest
shall be due or payable to the Seller with respect to the Intercompany Loan.
SECTION 5.15. Right of First Refusal. (a) If, at any time between
the Closing Date and the tenth anniversary thereof, the Purchaser or any
Affiliate thereof (the "Prospective Seller") shall have agreed with a Person
other than the Seller or one of its Affiliates (the "Prospective Buyer") to sell
or otherwise transfer the Shares (or all or substantially all of the assets of
the Company) (the "Company Interest") to the Prospective Buyer, the Prospective
Seller shall deliver a written notice of its intention to sell the Company
Interest (the "Notice of Intention") to the Seller, setting forth the
Prospective Seller's intention to effect such a sale or transfer, the price at
which the Prospective Seller proposes to sell the Company Interest to the
Prospective Buyer (the "First Refusal Price"), and the other material terms of
the Prospective Buyer's offer. A notice of Intention, once given, shall be
irrevocable. The Notice of Intention shall be dated the date it is delivered by
the Prospective Seller to the Seller.
(b) Upon receipt of the Notice of Intention, the Seller shall have
the right to purchase the Company Interest at the First Refusal Price, and
otherwise on the same terms set forth in the Notice of Intention. The right of
the Seller to purchase the Company Interest pursuant to this Section 5.15(b)
shall be exercisable by written notice to the Prospective Seller (the "Notice of
Exercise") within 10 Business Days from the date of the Notice of Intention (the
"Option Period"). The right of the Seller pursuant to this Section 5.15(b) to
give notice of its intention to purchase the Company Interest shall terminate if
it is not exercised within 10 Business Days of the date of the Notice of
Intention. A Notice of Exercise, once given, shall be irrevocable.
(c) If the Seller does not deliver a Notice of Exercise during the
Option Period, or if the sale by the Prospective Seller of the Company Interest
to the Seller is not consummated within 30 Business Days after the delivery by
the Seller to the Prospective Buyer of a Notice of Exercise, then the
Prospective Seller may sell the Company Interest to the Prospective Buyer at a
price no lower than the First Refusal Price and on terms no more favorable to
the Prospective Buyer than those set forth in the Notice of Intention.
SECTION 5.16. Transfer of Certain Company Intellectual Property. (a)
On or prior to the Closing Date, the Seller will transfer to the Company title
to the following items of Company Intellectual Property (the "Transferred
Intellectual Property"), free and clear of any Encumbrances: (i) OPAL; (ii)
Tourbo; (iii) Interface Suivi/SAP R2; and (iv) Travi Printing for WIN 3.11 and
WIN 95/NT. On the Closing
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Date, the Company and the Seller shall enter into a license agreement
substantially in the form of Exhibit 5.16(a) (the "Seller Post-Closing License")
pursuant to which the Company will grant to the Seller a perpetual,
nonexclusive, no-cost license (x) use the Transferred Intellectual Property in
conjunction with hosting services provided to any airline affiliate of the
Seller or any airline customer of the Seller (or any Affiliate thereof), and (y)
to sublicense OPAL and Tourbo to any of the parties described in clause (x) of
this sentence, so long as such product is used for internal airline purposes
only.
(b) On the Closing Date, the Company and the Seller shall enter into
a license agreement substantially in the form of Exhibit 5.16(b) (the "Company
Post-Closing License") pursuant to which the Seller will grant to the Company a
perpetual, nonexclusive, no-cost license, with the right to sublicense to the
Purchaser, any of its Affiliates or any of its distributors (in either case,
other than to an airline for its internal purposes), the following items of
Company Intellectual Property: (i) SNA File Transfer; (ii) Host to Host; (iii)
ATB Printing; (iv) SAS/▇▇▇▇ Configurator; (v) SAS/▇▇▇▇ Problem Management
Reporting; and (vi) TPF Terminal File Interface to ▇▇▇▇ Configurator.
SECTION 5.17. Further Action. Each of the Parties hereto shall use
all reasonable efforts to take, or cause to be taken, all appropriate action, do
or cause to be done all things necessary, proper or advisable under applicable
Law, and execute and deliver such documents and other papers as may be required
to carry out the provisions of this Agreement and consummate and make effective
the transactions contemplated by this Agreement.
ARTICLE VI
TAX MATTERS
SECTION 6.01. Tax Indemnity. (a) Except to the extent of Ordinary
Course Taxes, the Purchaser and its Affiliates, officers, directors, employees,
agents, successors and assigns (each for purposes of this Article VI an
"Indemnified Party") shall be indemnified and held harmless by the Seller for
any and all Losses arising out of or resulting from:
(i) the breach of any representation or warranty made in Section
3.18; or
(ii) Liabilities of the Company for Taxes with respect to the period
before the Closing Date; provided, however, that such indemnity shall be
reduced by any Tax Benefit to the Company with respect to such Losses or
Liabilities or the items or adjustments resulting in such Losses or
Liabilities;
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provided, further, that amounts under clause (i) and clause (ii) shall be
without duplication of the amount provided for under the other clause.
To the extent that any of the Seller's undertakings set forth in this Section
6.01 may be unenforceable, the Seller shall contribute the maximum amount that
it is permitted to contribute under applicable law to the payment and
satisfaction of all Losses and Liabilities incurred by the Indemnified Parties.
For purposes of this Article VI, the Liability of the Company for Taxes either
(y) arising out of or resulting from a breach of any representation or warranty
made in Section 3.18 or (z) described in Section 6.01(a)(ii) shall constitute a
Loss to the Purchaser.
(b) The Seller and the Purchaser agree to treat all payments made
under this Article VI and all indemnification payments made under Article VIII
of this Agreement as adjustments to the Purchase Price for Tax purposes except
to the extent that the laws of a particular jurisdiction provide otherwise.
SECTION 6.02. Apportionment of Taxes. (a) For purposes of Section
6.01, Taxes with respect to the period before the Closing Date shall mean: (i)
Taxes imposed on the Company with respect to taxable periods of such person
ending on or before the Closing Date; and (ii) with respect to taxable periods
beginning before the Closing Date and ending after the Closing Date, Taxes
imposed on the Company which are allocable, pursuant to Section 6.02(b), to the
portion of such period ending on the Closing Date.
(b) In the case of Taxes that are payable with respect to a taxable
period that begins before the Closing Date and ends after the Closing Date, the
portion of any such Tax that is allocable to the portion of the period ending on
the Closing Date shall be:
(i) in the case of Taxes that are either (x) based upon or related
to income or receipts, or (y) imposed in connection with any sale or other
transfer or assignment of property (real or personal, tangible or
intangible) (other than conveyances pursuant to this Agreement, which are
governed by Section 6.06) or on the supply of services, deemed equal to
the amount which would be payable if the taxable year ended with the
Closing Date; and
(ii) in the case of Taxes imposed on a periodic basis with respect
to the assets of the Company, or otherwise measured by the level of any
item, deemed to be the amount of such Taxes for the entire period (or, in
the case of such Taxes determined on an arrears basis, the amount of such
Taxes for the immediately preceding period) multiplied by a fraction the
numerator of which is the number of calendar days in the period ending on
the Closing Date and the denominator of which is the number of calendar
days in the entire period.
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SECTION 6.03. Returns and Payments. (a) From the date of this
Agreement through the Closing Date, the Seller shall cause the Company to
prepare and file in proper form with the appropriate Tax Authority in a timely
manner all Returns relating to the Company that are due on or before the Closing
Date. The Seller shall cause the Company to pay Taxes prior to the Closing Date
in such amounts and at such times as are consistent with past practices employed
with respect to the Company. In the event that the Closing Date does not occur
prior to the due date (including any extension thereof) for the filing of
Returns in respect of Income Taxes and capital Taxes for the Company's 1996
taxable year, the Seller will cause the Company to provide the Purchaser and its
authorized representative a copy of such completed Returns at least 10 Business
Days prior to the earlier of the due date (including any extension thereof) for
the filing of such Returns or the date of filing. The Purchaser shall cause the
Company to prepare and file in proper form with the appropriate Tax authority in
a timely manner all Returns relating to the Company that are due after the
Closing Date. With respect to Returns, other than Returns in respect of Income
Taxes, capital Taxes and VAT, caused to be filed by the Purchaser for any period
ending on or before the Closing Date, the Purchaser shall cause the Company to
pay the Taxes shown as due and owing on such Returns. With respect to Income
Taxes and capital Taxes with respect to Returns caused to be filed by the
Purchaser for any period ending on or before the Closing Date, the Purchaser
shall cause the Company to pay the Taxes shown as due and owing on such Returns,
and the Seller shall reimburse the Purchaser on the due date for such Taxes. In
the event that the Seller fails to reimburse the Purchaser on the due date, the
Purchaser shall be entitled to interest on the amount caused to be paid by the
Purchaser but in no event shall such failure affect Purchaser's obligation to
cause the Company to timely file any Return. Returns of the Company not yet
filed for any taxable period that ends on or before the Closing Date shall be
prepared in a manner consistent with past practices employed with respect to the
Company (except to the extent counsel for the party preparing the return renders
a legal opinion that there is no reasonable basis in law therefore or determines
that a Return cannot be so prepared and filed without being subject to
penalties).
(b) With respect to Returns, other than Returns in respect of Income
Taxes and capital Taxes or VAT, caused to be filed by the Purchaser for any
period beginning before and ending after the Closing Date, the Purchaser shall
cause the Company to pay the Taxes shown as due and owing on such Returns. With
respect to Income Taxes and capital Taxes, with respect to Returns caused to be
filed by the Purchaser for any period beginning before and ending after the
Closing Date, the Purchaser shall cause the Company to pay the Taxes shown as
due and owing on such Returns and the Seller shall reimburse the Purchaser on
the due date for such Taxes for the amount of such Taxes determined to be
properly apportioned under Section 6.02(b) to the portion of such period ending
on the Closing Date. To the extent that the Seller has caused the Company to pay
such Taxes in an amount greater
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than that apportioned under Section 6.02(b), the Purchaser shall reimburse the
Seller for the amount of such excess. In the event that the Seller fails to
reimburse the Purchaser on the due date, the Purchaser shall be entitled to
interest on the amount caused to be paid by the Purchaser but in no event shall
such failure affect the Purchaser's obligation to cause the Company to timely
file any Return. The Purchaser will notify or cause the Company to notify the
Seller of any position the Company will take on a Return which would be
inconsistent with that taken by the Seller or the Company on prior Returns. If
the Purchaser and the Seller disagree on the position taken and the position
would in any way alter the balance of Taxes owing or Tax refunds or credits
obtainable with respect to (i) any Tax period of the Company ending on or prior
to the Closing Date or (ii) in the case of Tax refunds or credits, any period up
to and including the Closing Date which is part of a Tax period of the Company
beginning prior to and ending after the Closing Date, then the parties shall
submit the matter to a mutually selected independent nationally recognized
accounting firm, other than KPMG Peat Marwick and its affiliates and Coopers &
▇▇▇▇▇▇▇ and its affiliates (the "Independent Firm"), and the Independent Firm
shall resolve the issue based on a standard of maximal fairness to both the
Purchaser and the Seller.
(c) With respect to any Return required to be caused to be filed by
the Purchaser with respect to the Company and as to which an amount of Tax is
allocable to the Seller under Section 6.02(b), the Purchaser shall cause the
Company to provide the Seller and its authorized representatives with a copy of
such completed Return and a statement certifying the amount of Tax shown on such
Return that is allocable to the Seller pursuant to Section 6.02(b), together
with appropriate supporting information and schedules at least 10 Business Days
prior to the due date (including any extension thereof) for the filing of such
Return, in the case of Taxes other than payroll, sales and use and Social
Security Taxes, or five (5) days prior to the date on which such Return is
required to be filed (taking into account any extensions) in the case of
payroll, sales and use and Social Security Taxes, and the Seller and its
authorized representatives shall have the right to review and comment on such
Return and statement prior to the filing of such Return.
(d) With respect to (y) Returns relating to VAT filed by the Company
after the Closing Date for any period ending before the Closing Date and (z)
Returns relating to VAT filed by the Company after the Closing Date for any
period beginning before and ending after the Closing Date (but as to (z), only
for amounts of VAT apportioned pursuant to Section 6.02(b)(i) to the portion of
such period ending on the Closing Date), the Seller shall reimburse the
Purchaser for any amount of VAT shown on such Return and not refunded, including
any amount that is both (i) in respect of self-supplies, as per Article 8 of the
Swiss VAT Ordinance and (ii) a cost factor in the Company's profit and loss
account.
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SECTION 6.04. Contests. (a) After the Closing, the Purchaser shall
promptly notify or cause the Company to notify the Seller in writing of any
written notice of a proposed assessment or claim in an audit or administrative
or judicial proceeding of the Purchaser or of the Company which, if determined
adversely to the taxpayer, would be grounds for indemnification under this
Article VI or could otherwise result in any Tax cost to the Seller; provided,
however, that a failure to give such notice will not affect the Purchaser's
right to indemnification under this Article VI except to the extent such failure
on the part of the Purchaser or the Company prejudices the Seller by preventing
the avoidance of all or a portion of the Tax liability in question.
(b) In the case of an audit or administrative or judicial proceeding
that relates to periods ending on or before the Closing Date, provided that the
Seller acknowledge in writing its indemnification obligation liability under
Article VI of this Agreement with respect to the potential liability of the
Company as a result of such audit or administrative or judicial proceeding, the
Seller shall have the right, at its expense, to participate in and control the
conduct of such audit or proceeding; the Purchaser may also participate in any
such audit or proceeding and, if the Seller does not assume the defense of any
such audit or proceeding, the Purchaser, at its expense, may defend the same in
such manner as it may deem appropriate, including, but not limited to, settling
such audit or proceeding after giving five days' prior written notice to the
Seller setting forth the terms and conditions of settlement. In the event that
issues relating to a potential adjustment for which the Seller has acknowledged
its indemnification obligation are required to be dealt with in the same
proceeding as separate issues relating to a potential adjustment for which the
Purchaser would be liable, the Purchaser shall have the right, at its expense,
to control the audit or proceeding with respect to the latter issues, provided
that the Purchaser provides the Seller with a written acknowledgement of the
Purchaser's liability.
(c) Notwithstanding Section 6.04(b), neither the Purchaser nor the
Seller shall enter into or cause the Company to enter into any compromise or
agree to settle or cause the Company to agree to settle any claim pursuant to
any Tax audit or proceeding which would adversely affect the other party for
such year or any prior or subsequent year without the written consent of the
other party which consent may not be unreasonably withheld. If the Purchaser or
the Seller refuses to provide the respective other party with written consent to
settle any such claim, then the parties shall submit the matter to an
Independent Firm and the Independent Firm shall resolve the issue based on a
standard of maximal fairness to both the Purchaser and the Seller.
(d) The Purchaser and the Seller shall cooperate fully, as and to
the extent reasonably requested by the other party, in connection with (i) the
filing of Returns pursuant to Section 6.03 (including such amended Returns for
periods (or portions thereof) ending on or prior to the Closing Date that the
Seller may reasonably
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request the Purchaser to file or cause the Company to file; provided, however,
that if in the Purchaser's reasonable judgment the filing of the amended return
would be disadvantageous to the Purchaser, the Purchaser may deny the Seller's
request and the parties shall submit the matter to an Independent Firm and the
Independent Firm shall resolve the issue based on a standard of maximal fairness
to both the Purchaser and the Seller and (ii) any audit, litigation or other
proceeding with respect to Taxes.
SECTION 6.05. Survival of Obligations. Notwithstanding any provision
in this Agreement to the contrary, obligations of the Seller to indemnify and
hold harmless the Indemnified Parties pursuant to this Article VI, and the
representations and warranties contained in Section 3.18, shall terminate at the
close of business on the 180th day following the expiration of the applicable
statute of limitations with respect to the Tax liabilities in question (giving
effect to any waiver, mitigation or extension thereof).
SECTION 6.06. Conveyance Taxes. The Seller shall pay (or, if the
Purchaser pays, shall reimburse the Purchaser for) any real property transfer or
gains, sales, use, transfer, stock transfer, and stamp taxes, any transfer,
recording, registration, and other fees, and any similar Taxes (but specifically
not including Taxes on or with respect to income) that become payable in
connection with the transactions contemplated by this Agreement. The Company
shall prepare in a timely manner for the review and approval of the parties and
file such applications and documents as shall permit any such Tax to be assessed
and paid on or prior to the Closing Date in accordance with any available
presale filing procedure. The parties shall execute and deliver all instruments
and certificates necessary to enable the Company to comply with the foregoing.
SECTION 6.07. Tax Refunds, Credits and Other Payments. The Purchaser
shall, within 30 days of receipt of any Tax refund or credit actually received
by or on behalf of the Company or successor thereto (other than a refund or
credit with respect to Taxes paid by the Company or successor thereto on or
after the Closing Date and not previously indemnified by the Seller pursuant to
Section 6.01(a)) (A) for or attributable to any Tax period of the Company ending
at or prior to the Closing Date or (B) for or attributable to any period up to
and including the Closing Date which is part of a Tax period of the Company
beginning prior to and ending after the Closing Date, pay such Tax refund or
credit (a "Returnable Refund or Credit") to the Seller on an After-Tax Basis
(including any interest or addition actually received thereon). If the amount of
any Returnable Refund or Credit is applied against any other liability of any of
the Company or successor thereto for Taxes for any Tax period after the Closing
Date, the Purchaser shall, within 30 days of the date of such application, pay
to the Seller an amount equal to the Returnable Refund or Credit on an After-Tax
Basis (including any interest or addition actually received thereon). The
Purchaser shall deliver with payment to the Seller a copy of any written
explanation of
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the Facts surrounding the Returnable Refund or Credit and a copy of any related
notice or statement received from any Tax authority.
ARTICLE VII
CONDITIONS TO CLOSING
SECTION 7.01. Conditions to Obligations of the Seller. The
obligations of the Seller to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions:
(a) Representations, Warranties and Covenants. The representations
and warranties of the Purchaser contained in this Agreement shall have been true
and correct in all material respects when made and shall be true and correct in
all material respects as of the Closing, with the same force and effect as if
made as of the Closing Date, other than such representations and warranties as
are made as of another date, which shall be true and correct in all material
respects as of such date (provided, however, if any portion of any
representation or warranty is already qualified by materiality, for purposes of
determining whether this Section 7.01(a) has been satisfied with respect to such
portion of such representation or warranty, such portion of such representation
or warranty as so qualified must be true and correct in all respects), and the
covenants and agreements contained in this Agreement to be complied with by the
Purchaser on or before the Closing shall have been complied with in all material
respects, and the Seller shall have received a certificate from the Purchaser to
such effect signed by a duly authorized officer thereof;
(b) No Proceeding or Litigation. No Action shall have been commenced
by or before any Governmental Authority against the Seller, the Company or the
Purchaser, seeking to restrain or prevent the consummation of the transactions
contemplated by this Agreement; provided, however, that the provisions of this
Section 7.01(b) shall not apply if the Seller, the Company or any Affiliate
thereof have directly or indirectly solicited or encouraged any such Action;
(c) Resolutions. The Seller shall have received a true and complete
copy, certified by the Secretary of the Purchaser, of the resolutions of the
Purchaser's Supervisory Board evidencing its authorization of the consummation
of the transactions contemplated hereby;
(d) Incumbency Certificate. The Seller shall have received a
certificate of the Secretary of the Purchaser certifying the names and
signatures of the officers of the Purchaser authorized to sign this Agreement
and the other documents to be delivered hereunder;
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(e) Escrow Agreement. The Purchaser shall have duly executed and
delivered the Escrow Agreement in substantially the form of Exhibit 2.05(f)
hereto;
(f) Consummation of Transactions Contemplated by Transaction
Agreement. The transactions contemplated by the Transaction Agreement, a form of
which is attached as Exhibit 7.01(f) hereto (the "Transaction Agreement"), shall
have been consummated;
(g) Completion of the IPO. The IPO shall have been consummated; and
(h) Seller Post-Closing License. The Company shall have executed and
delivered the Seller Post-Closing License.
SECTION 7.02. Conditions to Obligations of the Purchaser. The
obligations of the Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, at or prior to the Closing, of
each of the following conditions:
(a) Representations, Warranties and Covenants. The representations
and warranties of the Seller contained in this Agreement shall have been true
and correct in all material respects when made and shall be true and correct in
all material respects as of the Closing with the same force and effect as if
made as of the Closing, other than such representations and warranties as are
made as of another date, which shall be true and correct in all material
respects as of such date (provided, however, that the representations and
warranties contained in Section 3.03 will be true and correct in all respects
and that if any portion of any representation or warranty is already qualified
by materiality, for purposes of determining whether this Section 7.02(a) has
been satisfied with respect to such portion of such representation or warranty,
such portion of such representation or warranty as so qualified must be true and
correct in all respects), and the covenants and agreements contained in this
Agreement to be complied with by Seller on or before the Closing shall have been
complied with in all material respects, and the Purchaser shall have received a
certificate from the Seller to such effect signed by a duly authorized officer
thereof;
(b) No Proceeding or Litigation. No Action shall have been commenced
by or before any Governmental Authority against the Seller, the Company or the
Purchaser, seeking to restrain or prevent the consummation of the transactions
contemplated by this Agreement; provided, however, that the provisions of this
Section 7.02(b) shall not apply if the Purchaser has solicited or encouraged any
such Action;
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(c) Resolutions of the Seller. The Purchaser shall have received a
true and complete copy, certified by the Secretary or an Assistant Secretary of
the Seller, of the resolutions duly and validly adopted by the Board of
Directors of the Seller evidencing their authorization of the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby;
(d) Consents and Approvals. The Purchaser, the Seller and the
Company shall have received, each in form and substance satisfactory to the
Purchaser all authorizations, consents, orders and approvals of all Governmental
Authorities and officials and all third party consents and estoppel certificates
set forth on Schedule 7.02(d);
(e) Commercial Register Extract. The Purchaser shall have received
an extract from the Commercial Register issued not more than three Business Days
prior to the Closing Date evidencing that the persons signing this Agreement on
behalf of Seller are authorized to sign on the Seller's behalf;
(f) Financing. The Purchaser shall have obtained financing on terms
acceptable to it, sufficient to enable it to consummate the transactions
contemplated by this Agreement;
(g) Completion of the IPO. The IPO shall have been consummated;
(h) No Material Adverse Effect. No event or events shall have
occurred, or be reasonably likely to occur, which have, or are reasonably likely
to have, a Material Adverse Effect;
(i) No Debt. The Company shall have no indebtedness for borrowed
money as of the Closing Date, other than any amounts owing with respect to the
Intercompany Loan;
(j) Net Asset Test. The Net Assets reflected on the Seasonally
Adjusted Net Asset Test Reference Balance Sheet shall not exceed the Net Assets
reflected on the Pre-Closing Balance Sheet by CHF 150,000 or more;
(k) Consummation of Transactions Contemplated by the Transaction
Agreement. The transactions contemplated by the Transaction Agreement shall have
been consummated.
(l) Certain Resolutions. The Purchaser shall have received a true
and complete copy, certified by the Secretary or an Assistant Secretary of the
Company, of a resolution of the board of directors of the Company evidencing
that the Purchaser will
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be registered as the owner of all the Shares together with a copy of the
shareholders' register evidencing the Purchaser as the new owner of all the
Shares;
(m) Resignation Letters. The Purchaser shall have received a
resignation letter from each of the Company's directors;
(n) Assignment of Intercompany Loan. To the extent any amount of
principal with regard to the Intercompany Loan remains unpaid at Closing, the
Purchaser shall have received from the Seller an instrument in writing that is
reasonably satisfactory to the Purchaser pursuant to which the Seller assigns
all rights to such principal to the Purchaser; and
(o) Transferred Intellectual Property; Company Post-Closing License.
The Purchaser shall have received evidence reasonably satisfactory to it that
the Company owns the Transferred Intellectual Property, free and clear of any
Encumbrances, and the Seller shall have executed and delivered the Company
Post-Closing License.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Survival of Representations and Warranties. The
representations and warranties of the parties contained in Sections 3.06, 3.11,
3.14, 3.15, 3.16, 3.17 and 3.19, and Article IV (other than Section 4.05), and
the covenants of the parties set forth in Article V (other than Sections 5.02(b)
and (c), 5.03, 5.06, 5.07, 5.10, 5.11, 5.12, 5.13, 5.14, 5.15 and 5.16) shall
terminate at Closing. The representations and warranties of the parties
contained in Sections 3.01, 3.02, 3.03, 3.04, 3.05, 3.07, 3.09, 3.10, 3.12,
3.13, 3.20 and 3.21 and Section 4.05 shall survive the Closing until the second
anniversary of the Closing Date. The representations and warranties dealing with
Tax matters shall survive as provided in Article VI, and the representations and
warranties set forth in Section 3.08 shall survive the Closing until the first
anniversary of the Closing Date. The covenants of the parties set forth in
Sections 5.02(b) and (c), 5.03, 5.06, 5.07, 5.10, 5.11, 5.12, 5.13, 5.14, 5.15
and 5.16 shall survive the Closing, and the other covenants set forth in this
Agreement that expressly survive the Closing shall survive the Closing in
accordance with their respective terms. Notwithstanding the foregoing or
anything to the contrary in this Article VIII, in the event that the Purchaser
has actual knowledge prior to the Closing Date that any of the representations
and warranties of the Seller to survive the Closing in accordance with this
Section 8.01 were not true and correct as of the date hereof or are not true and
correct as of the Closing Date or that the agreements of the Seller contained in
Section 5.03(b) have not been complied with, the sole and exclusive remedy of
the Purchaser with respect to such breaches will be to not consummate the
transactions contemplated by this Agreement if
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any such breach results in the nonsatisfaction of the condition contained in
Section 7.02(a). For purposes of the foregoing sentence, the term "actual
knowledge" means the actual knowledge of an officer of the Purchaser, including,
without limitation, as a result of (A) the delivery to the Purchaser by the
Seller not fewer than three Business Days prior to the Closing (other than in a
case in which an event occurs within such three Business Day period which could
not have been anticipated, in which case written notice of such event must be
provided to the Purchaser promptly after the Seller becomes aware of it) of a
written notice specifically identifying in detail the nature of the breach and
the provisions of this Agreement that have been breached, or (B), without duty
of any other due or specific inquiry, a written survey of (i) employees of the
Purchaser who are reasonably likely, because of their substantive and
significant contacts with the Company, to have knowledge as to the truth and
correctness of the representations and warranties of the Seller to survive the
Closing or whether the Seller has complied with Section 5.03(b), (ii) the
accountants at KPMG Peat Marwick LLP, (iii) the investment bankers at ▇▇ ▇▇▇▇▇▇
and (iv) the attorneys at Shearman & Sterling, ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ and Bar &
▇▇▇▇▇▇, who, in the case of (ii), (iii) and (iv), actually participated in the
Purchaser's due diligence investigation of the Company. Subject to the
foregoing, neither the period of survival nor the liability of the parties
hereto with respect to their representations and warranties and covenants shall
be reduced by any investigation made at any time by or on behalf of any such
party. If written notice of a claim has been given prior to the expiration of
the applicable representations and warranties and covenants by the parties
hereto, then the relevant representations and warranties and covenants shall
survive as to such claim until such claim has been finally resolved. The
applicability of (i) Article 201 of the Swiss Code of Obligations with respect
to the Purchaser's obligation of immediate investigation and immediate
notification and (ii) Article 210 of the Swiss Code of Obligations with respect
to the Purchaser's duty to commence proceedings during the survival period of
representations and warranties is hereby waived.
SECTION 8.02. Indemnification by the Seller. (a) The Purchaser, its
Affiliates, including the Company, and their successors and assigns, and the
officers, directors, employees and agents of the Purchaser, its Affiliates and
their successors and assigns (each a "Purchaser Indemnified Party") shall be
indemnified and held harmless, as and to the extent set forth in this Section
8.02, by the Seller for any and all Liabilities, losses, damages, claims, costs
and expenses, interest, awards, judgments and penalties (including, without
limitation, attorneys' and consultants' fees and expenses) actually suffered or
incurred by them (including, without limitation, any Action brought or otherwise
initiated by any of them) on an After-Tax Basis (hereinafter a "Loss"), arising
out of or resulting from:
(i) the breach of any representation or warranty made by the Seller
contained in any of Sections 3.01, 3.02, 3.03, 3.04, 3.05, 3.07, 3.09,
3.10, 3.12, 3.13, 3.18, 3.20 or 3.21 of this Agreement; or
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47
(ii) the breach of any covenant or agreement by the Seller contained
in Section 5.03(b) of this Agreement; or
(iii) Liabilities of the Company, whether arising before or after
the Closing Date, arising from or relating to any of [specified items
listed in the Seller's Disclosure Schedule]; or
(iv) any shortfall in the Cash of the Company that is not covered by
the amount held by the Escrow Agent, together with interest thereon, as
determined by the parties in accordance with Section 2.05(f)(iii).
(b) The obligation of the Seller to indemnify a Purchaser
Indemnified Party shall be subject to the limitation set forth in the fifth
sentence of Section 8.01 and to the following limitations: (i) no
indemnification by the Seller (other than an indemnification pursuant to Section
8.02(a)(iv)) shall be made unless the aggregate amount of Losses relating to
breaches or otherwise subject to indemnification hereunder exceeds US$150,000,
and then indemnification shall be made solely in the amount of such excess; (ii)
in no event shall the aggregate obligation of the Seller to indemnify the
Purchaser Indemnified Parties (other than an indemnification pursuant to Section
8.02(a)(iv)) exceed US$4,000,000, except for a breach of the representations and
warranties contained in Section 3.03 in which case the obligation to indemnify
the Purchaser Indemnified Parties shall not exceed an amount equal to
US$8,000,000 plus the Purchase Price Adjustment Amount; (iii) any recovery of a
Loss due to breach of one representation will preclude recovery of such Loss due
to breach of any other representation, and all indemnification shall be without
duplication of any other recovery; (iv) a Purchaser Indemnified Party shall not
be entitled to be indemnified for breach of the representations and warranties
set forth in Section 3.08 or Section 3.12 unless it establishes that (A) a
reasonably prudent business person would have concluded, based on the
information available to such person at the time of taking the action that
caused such breach or, in the case of Section 3.12, at the time of entering into
the contract that caused such breach, that the Losses associated with such
action or such contract, as the case may be, would exceed the benefits
associated therewith, and (B) in the case of Sections 3.12(a)(vi) and (a)(viii)
only, that such breach has had a materially negative effect on the Company; (v)
a Purchaser Indemnified Party shall not be entitled to be indemnified for any
breach of the representations and warranties set forth in Section 3.10 if and to
the extent such breach also constitutes a breach of any of the representations
and warranties set forth in Sections 3.11, 3.16 or 3.17; and (vi) for purposes
of determining whether a Purchaser Indemnified Party is entitled to be
indemnified for any breach of the representations and warranties contained in
Section 3.12, the term "Material Contracts" shall be deemed to refer solely to
(A) any contracts or agreements under which the Company can be reasonably
expected to pay or be paid at least CHF 250,000 over any five year period during
the life of the contract following the Closing Date, (B) any contracts or
agreements that limit or purport to limit
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the ability of the Company to compete in any line of business or with any Person
or in any geographic area or during any period of time, or (C) any contracts the
presence or absence of which would have a Material Adverse Effect.
(c) Each Purchaser Indemnified Party shall use its reasonable
efforts to mitigate any Losses for which it seeks indemnification hereunder.
(d) To the extent that the Seller's undertakings set forth in this
Section 8.02 may be unenforceable, the Seller shall contribute (in the same
proportion as it would otherwise have indemnified the Purchaser Indemnified
Party in accordance with Section 8.02(b)(iii)) the maximum amount that it is
permitted to contribute under applicable law to the payment and satisfaction of
all Losses incurred by the Purchaser and the Company.
SECTION 8.03. Tax Matters. Anything in this Article VIII to the
contrary notwithstanding, the rights and obligations of the parties with respect
to indemnification for any and all Tax matters shall be governed solely by
Article VI.
SECTION 8.04. Indemnification by the Purchaser. (a) The Seller, its
Affiliates and their successors and assigns, and the officers, directors,
employees and agents of the Seller, their Affiliates and their successors and
assigns (each a "Seller Indemnified Party") shall be indemnified and held
harmless, as and to the extent set forth in this Section 8.04, by the Purchaser
for any and all Losses on an After-Tax Basis arising out of or resulting from:
(i) the breach of any representation or warranty made by the
Purchaser contained in Section 4.05 of this Agreement;
(ii) Liabilities of the Company, other than any Liabilities for
which the Purchaser is entitled to be indemnified pursuant to Section
8.02; or
(iii) any Cash that the Purchaser is required to pay to the Seller,
together with interest thereon, as determined by the parties in accordance
with Section 2.05(f)(iii).
(b) Each Seller Indemnified Party shall use its reasonable efforts
to mitigate any Losses for which it seeks indemnification hereunder.
(c) To the extent that the Purchaser's undertakings set forth in
this Section 8.04 may be unenforceable, the Purchaser shall contribute the
maximum amount that it is permitted to contribute under applicable law to the
payment and satisfaction of all Losses incurred by the Seller.
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SECTION 8.05. Indemnification Procedures. A Purchaser Indemnified
Party or a Seller Indemnified Party, as the case may be (in each case, for
purposes of this Article VIII, the "Indemnified Party"), shall give the Seller,
or the Purchaser, as the case may be (in each case, the "Indemnifying Party"),
notice of any matter which an Indemnified Party has determined has given or
could give rise to a right of indemnification under this Agreement, within 60
days of such determination, stating the amount of the Loss, if known, and method
of computation thereof, and containing a reference to the provisions of this
Agreement in respect of which such right of indemnification is claimed or
arises. The obligations and Liabilities of an Indemnifying Party under this
Article VIII with respect to Losses arising from claims of any third party which
are subject to the indemnification provided for in this Article VIII (a "Third
Party Claim") shall be governed by and contingent upon the following additional
terms and conditions: if an Indemnified Party shall receive notice of any Third
Party Claim, the Indemnified Party shall give the Indemnifying Party notice of
such Third Party Claim within 30 days of the receipt by the Indemnified Party of
such notice; provided, however, that the failure to provide such notice shall
not release the Indemnifying Party from any of its obligations under this
Article VIII except to the extent the Indemnifying Party is materially
prejudiced by such failure and shall not relieve the Indemnifying Party from any
other obligation or Liability that it may have to any Indemnified Party
otherwise than under this Article VIII. If the Indemnifying Party acknowledges
in writing its obligations to indemnify the Indemnified Party hereunder against
any Losses (subject to the limitations set forth in Section 8.02(b)) that may
result from such Third Party Claim, then such Indemnifying Party shall be
entitled to assume and control the defense of such Third Party Claim at its
expense and through counsel of its choice if it gives notice of its intention to
do so to the Indemnified Party within five Business Days of the receipt of such
notice from the Indemnified Party; provided, however, that if there exists or is
reasonably likely to exist a conflict of interest that would make it
inappropriate in the reasonable judgment of the Indemnified Party for the same
counsel to represent both the Indemnified Party and the Indemnifying Party, then
the Indemnified Party shall be entitled to retain its own counsel, in each
jurisdiction for which the Indemnified Party determines counsel is required to
participate in such defense, at the expense of the Indemnifying Party. In the
event the Indemnifying Party exercises the right to undertake any such defense
against any such Third Party Claim as provided above, the Indemnified Party
shall cooperate with the Indemnifying Party in such defense and make available
to the Indemnifying Party, at the Indemnifying Party's expense, all witnesses,
pertinent records, materials and information in the Indemnified Party's
possession or under the Indemnified Party's control relating thereto as is
reasonably required by the Indemnifying Party, subject to reimbursement of
reasonable out-of-pocket expenses. Similarly, in the event the Indemnified Party
is, directly or indirectly, conducting the defense against any such Third Party
Claim, the Indemnifying Party shall cooperate with the Indemnified Party in such
defense and make available to the Indemnified Party all such witnesses, records,
materials and information in the Indemnifying Party's possession or under the
Indemnifying Party's control relating
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thereto as is reasonably required by the Indemnified Party, subject to
reimbursement of reasonable out-of-pocket expenses. No such Third Party Claim
may be settled by the Indemnifying Party without the prior written consent of
the Indemnified Party.
ARTICLE IX
TERMINATION AND WAIVER
SECTION 9.01. Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by the mutual written consent of the Seller and the Purchaser;
(b) by either the Seller or the Purchaser if the Closing shall not
have occurred by 31 December 1997;
(c) by either the Purchaser or the Seller in the event that any
Governmental Authority shall have issued an order, decree or ruling or taken any
other action restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other action
shall have become final and nonappealable;
(d) by the Purchaser if, between the date hereof and the time
scheduled for the Closing: (i) there shall have been a breach of any material
representation or warranty of the Seller contained in this Agreement; (ii) the
Seller shall not have complied with any material covenant or agreement to be
complied with by it and contained in this Agreement; or (iii) the Seller or the
Company make a general assignment for the benefit of creditors, or any
proceeding shall be instituted by or against the Seller or the Company seeking
to adjudicate either of them bankrupt or insolvent, or seeking liquidation,
winding up or reorganization, arrangement, adjustment, protection, relief or
composition of its debts under any Law relating to bankruptcy, insolvency or
reorganization; or
(e) by the Seller if, between the date hereof and the time scheduled
for the Closing: (i) there shall have been a breach of any material
representation or warranty of the Purchaser contained in this Agreement; (ii)
the Purchaser shall not have complied with any material covenant or agreement to
be complied with by it and contained in this Agreement; or (iii) the Purchaser
makes a general assignment for the benefit of creditors, or any proceeding shall
be instituted by or against the Purchaser seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up or reorganization, arrangement,
adjustment, protection, relief or composition of its debts under any Law
relating to bankruptcy, insolvency or reorganization.
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SECTION 9.02. Effect of Termination. (a) In the event of termination
of this Agreement as provided in Section 9.01, this Agreement shall forthwith
become void and there shall be no liability on the part of any party hereto
except that the provisions of Sections 5.03(a), 9.02(a), 9.02(b), 10.01, 10.02,
10.03, 10.06, 10.08, 10.10, 10.12 and 10.14 shall survive any such termination.
(b) Notwithstanding the foregoing, if the Closing does not occur
because of a breach by a party, such party will reimburse the other parties (as
their sole and exclusive remedy hereunder) for their out-of-pocket costs and
expenses, including, without limitation, fees and disbursements of counsel,
financing sources (other than bank commitment fees paid by the Purchaser prior
to 15 June 1997 or paid by the Purchaser after 15 June 1997 without consulting
the Seller) and accountants, and disbursements (but not fees) of financial
advisors, incurred in connection with the preparation, negotiation and
performance of this Agreement and the transactions contemplated hereby.
SECTION 9.03. Waiver. Either party to this Agreement may (a) extend
the time for the performance of any of the obligations or other acts of the
other party, (b) waive any inaccuracies in the representations and warranties of
the other party contained herein or in any document delivered by the other party
pursuant hereto or (c) waive compliance with any of the agreements or conditions
of the other party contained herein. Any such extension or waiver shall be valid
only if set forth in an instrument in writing signed by the party to be bound
thereby. Any waiver of any term or condition shall not be construed as a waiver
of any subsequent breach or a subsequent waiver of the same term or condition,
or a waiver of any other term or condition of this Agreement. The failure of any
party to assert any of its rights hereunder shall not constitute a waiver of any
of such rights.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, whether or not the Closing
shall have occurred.
SECTION 10.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by courier service, by cable, by telecopy, by telegram, by telex or
by registered or certified mail (postage prepaid. return receipt requested) to
the parties at the following
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addresses (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 10.02):
(a) If to the Purchaser:
Galileo International Partnership
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
Attention: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Bar & ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopy: 01 251 30 25
and to:
The Galileo Company
Galileo Centre Europe
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: Company Secretary
Telecopy: ▇▇ (▇) ▇▇▇▇ ▇▇▇▇▇▇
and to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇'▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Seller:
SAirGroup
CH-8058
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇▇
Attention: ___________
Telecopy: ___________
with a copy to:
__________________
__________________
__________________
__________________
SECTION 10.03. Public Announcements. Except as may be required by
Law, neither party to this Agreement shall make, or cause to be made any press
release or public announcement in respect of this Agreement or the transactions
contemplated hereby or the existence of discussion or negotiations between the
parties or otherwise communicate with any news media without the prior consent
of the other party, and the parties shall cooperate as to the form, timing and
contents of any such press release or public announcement.
SECTION 10.04. Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 10.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to either party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the Parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
SECTION 10.06. Entire Agreement. This Agreement (including the
Exhibits and the Seller's Disclosure Schedule which are hereby incorporated
herein and made a part hereof for all purposes as if fully set forth herein) and
the Non-Disclosure Agreement constitute the entire agreement of the parties
hereto with respect to the subject matter hereof and thereof and supersede all
prior agreements and undertakings, both written and oral, between the Seller and
the Purchaser with respect to the subject matter hereof and thereof.
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SECTION 10.07. Assignment. This Agreement may not be assigned by
operation of law or otherwise without the express written consent of the Seller
and the Purchaser (which consent may be granted or withheld by the Seller or the
Purchaser); provided, however, that the Purchaser may assign all or any portion
of its rights and obligations under this Agreement to one or more Affiliates of
the Purchaser without the consent of the Seller; provided further that in the
event of such assignment, Purchaser will remain liable for any obligations
hereunder not performed by such assignee or assignees.
SECTION 10.08. No Third Party Beneficiaries. This Agreement shall be
binding upon and inure solely to the benefit of the Parties and their permitted
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other Person any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
SECTION 10.09. Amendment. This Agreement may not be amended or
modified except (a) by an instrument in writing signed by, or on behalf of, the
Seller and the Purchaser or (b) by a waiver in accordance with Section 9.03.
SECTION 10.10. Arbitration. (a) Subject to the final sentence of
this Section 10.10, any dispute arising between the Parties hereto involving the
subject matters covered by this Agreement shall be submitted to arbitration
under this Section 10.10. A Party asserting a breach of this Agreement by the
other Party shall notify the other Party of such alleged breach (a "Dispute
Notice") and the Parties shall attempt to resolve such dispute amicably and if
they shall fail to resolve it within thirty (30) days of the date of the Dispute
Notice, either Party may notify the other Party that it wishes to commence an
arbitration proceeding under this Section 10.10 (an "Arbitration Request"). In
any arbitration proceeding the Party commencing the arbitration (the
"Petitioner") shall include in the Arbitration Request (a) a statement of the
facts constituting the alleged breach or dispute, (b) a written statement of
position ("Statement") regarding the dispute and (c) the name of an elector
designated by it. The Statement shall state the facts and arguments in support
of the position taken by the Party submitting such Statement and shall detail
that Party's proposed solution and relief sought (if any). Copies of any
Arbitration Request shall be furnished at the same time to the other Party
hereto. The Party with whom the Petitioner has its dispute (the "Respondent")
shall within five (5) Business Days after the date of the Arbitration Request
designate a second elector by notice to the Petitioner (copies of which shall be
furnished to the other Party), but if it shall fail to do so within such period
the Petitioner may designate an elector on Respondent's behalf. The electors
chosen by the Petitioner and the Respondent shall attempt to agree upon an
arbitrator (the "Arbitrator"), but if they are unable to do so within twenty
(20) Business Days after the designation of the second elector, then either
elector thereafter may apply to the American Arbitration Association (the
"Association") for the selection of the Arbitrator in accordance with the
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Commercial Arbitration Rules of such Association. The Arbitrator so selected
shall have full power to decide any dispute referred to in this Section 10.10.
The arbitration proceedings shall be conducted in the English language, and the
place of arbitration and the making of the Award (as defined below) shall be
Paris, France. The UNCITRAL rules of commercial arbitration shall apply to any
arbitration commenced pursuant to this Section 10.10, as modified by the
following procedure:
(i) Within five (5) Business Days of the selection of the Arbitrator
(the "Commencement Date"), the Respondent shall deliver its Statement
regarding the dispute to the Arbitrator and to the Petitioner.
(ii) Within fifteen (15) Business Days from the Commencement Date,
each of the Petitioner and Respondent shall deliver to the Arbitrator and
to the other Party, a response ("Response") to the other Party's Statement
setting forth opposing facts and arguments and limited in length to ten
(10) typed, single spaced pages (excluding any evidentiary exhibits
included therein).
(iii) Within twenty (20) Business Days from the Commencement Date,
each of the Petitioner and the Respondent may deliver to the Arbitrator
and to the other Party, a reply to the Response limited to setting forth
facts and arguments in rebuttal to the Statement and Response of the other
Party and limited in length to five (5) typed, single spaced pages
(excluding any evidentiary exhibits included therein).
(iv) Within twenty-five (25) Business Days from the Commencement
Date, each of the Petitioner and Respondent shall present an oral
summation of its position to the Arbitrator in the presence of the other
Party in accordance with such rules of procedure including, without
limitation, length of presentation and right of cross-examination, as the
Arbitrator shall determine in writing and deliver to the Parties not less
than three (3) Business Days prior to such hearing; provided, however,
that such hearing shall not exceed eight (8) hours in total and may not be
adjourned except for extraordinary circumstances beyond the control of the
Parties.
(v) The Arbitrator shall either issue his or her decision and award
("Award") or request a further meeting of the Parties within fifteen (15)
days of the hearing.
(vi) Any such further meeting of the Parties shall take place within
five (5) Business Days of the request therefor and shall be conducted as
determined by the Arbitrator. The Arbitrator shall issue his or her Award
no later than fifteen (15) days after any such further meeting of the
Parties.
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(vii) The Award shall be in writing and shall be limited to a
decision either completely in favor of Petitioner's request for relief or
completely in favor of Respondent's. The Award shall be final and binding
upon the Parties hereto and judgment may be entered thereon in any court
of competent jurisdiction and the costs and expenses of such arbitration
(and of enforcing any Award), including attorneys' fees, shall be borne by
the Party losing such arbitration.
(b) This Section 10.10 shall in no way affect the right of any Party
to seek such interim relief, and only such relief, as may be required to
maintain the status quo in aid of the arbitration in any court of competent
jurisdiction.
SECTION 10.11. Seller's Disclosure Schedule. From time to time after
the date hereof and not later than three Business Days (other than in a case in
which an event occurs within such three Business Day period which could not have
been anticipated, in which case written notice of such event must be provided to
the Purchaser promptly after the Seller becomes aware of it) prior to the
Closing Date, the Seller may amend or supplement the Seller's Disclosure
Schedule in writing in accordance with Section 10.02 with respect to any matter
coming to its attention or arising which, if known by it or existing prior to
the date of this Agreement would have been required to be set forth or described
in the Seller's Disclosure Schedule or which is necessary or desirable to
complete or correct any information in the Seller's Disclosure Schedule or in
any representation or warranty of the Seller which has been rendered inaccurate
thereby. For purposes of determining the satisfaction of the Purchaser's
condition to close as set forth in Section 7.02(a), the Seller's Disclosure
Schedule shall be deemed not to have been amended or supplemented from that
attached hereto on the date hereof.
SECTION 10.12. Governing Law. This Agreement shall be governed by
the laws of Switzerland (disregarding conflict of law rules and the Vienna
(United Nations) Convention on the International Sale of Goods).
SECTION 10.13. Counterparts. This Agreement may be executed in one
or more counterparts, and by the different Parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
SECTION 10.14. Specific Performance. The Parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the Parties shall be
entitled to specific performance of the terms hereof in addition to any other
remedy at Law or equity.
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IN WITNESS WHEREOF, the Purchaser and the Seller have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
GALILEO INTERNATIONAL
PARTNERSHIP
By:____________________________
Name:
Title:
SAIRGROUP
By:____________________________
Name:
Title:
By:____________________________
Name:
Title: