Exhibit 2.2
5
July 2004
(1) THE
PURCHASER
(2) THE
VENDORS
(3) MEGGITT
ACQUISITION LIMITED
AGREEMENT RELATING TO
THE
SALE AND PURCHASE OF THE ENTIRE ISSUED AND OUTSTANDING
CAPITAL STOCK OF DUNLOP STANDARD AEROSPACE (U.S.), INC.,
STANDARD AERO LIMITED, STANDARD AERO (ASIA)
PTE LIMITED, STANDARD AERO (AUSTRALIA)
PTY LIMITED AND DUNLOP
STANDARD AEROSPACE (NEDERLAND) BV
LATHAM &
WATKINS
99 Bishopsgate
London EC2M 3XF
United Kingdom
TABLE OF
CONTENTS
| |
|
|
|
|
|
|
|
1.
|
|
DEFINITIONS AND INTERPRETATION |
|
|
1 |
|
|
2.
|
|
SALE OF THE SHARES AND
CONSIDERATION |
|
|
6 |
|
|
3.
|
|
CONDITIONS PRECEDENT |
|
|
7 |
|
|
4.
|
|
CANADIAN WITHHOLDING TAX |
|
|
9 |
|
|
5.
|
|
SIGNING AND COMPLETION |
|
|
10 |
|
|
6.
|
|
WARRANTIES, COVENANTS AND
UNDERTAKINGS |
|
|
11 |
|
|
7.
|
|
TERMINATION |
|
|
11 |
|
|
8.
|
|
ENTIRE AGREEMENT |
|
|
12 |
|
|
9.
|
|
VARIATION |
|
|
12 |
|
|
10.
|
|
ASSIGNMENT |
|
|
12 |
|
|
11.
|
|
ANNOUNCEMENTS |
|
|
12 |
|
|
12.
|
|
COSTS |
|
|
13 |
|
|
13.
|
|
CONFIDENTIALITY |
|
|
13 |
|
|
14.
|
|
SET-OFF |
|
|
14 |
|
|
15.
|
|
INVALIDITY |
|
|
14 |
|
|
16.
|
|
COUNTERPARTS |
|
|
14 |
|
|
17.
|
|
WAIVER |
|
|
15 |
|
|
18.
|
|
SURVIVAL |
|
|
15 |
|
|
19.
|
|
FURTHER ASSURANCE |
|
|
15 |
|
|
20.
|
|
NOTICES |
|
|
15 |
|
|
21.
|
|
GENERAL |
|
|
16 |
|
|
22.
|
|
GOVERNING LAW; JURISDICTION |
|
|
17 |
|
| SCHEDULE 1 |
|
|
|
|
| THE SUBSIDIARIES |
|
|
|
|
| SCHEDULE 2 |
|
|
|
|
| DEFINITIONS REGARDING ERO
PURCHASE PRICE ADJUSTMENT |
|
|
|
|
| SCHEDULE 3 |
|
|
|
|
| SIGNING AND
COMPLETION |
|
|
|
|
| SCHEDULE 4 |
|
|
|
|
| THIRD PARTY CONSENTS |
|
|
|
|
i
THIS AGREEMENT is
made on 5 July 2004.
BETWEEN :
| (1) |
STANDARD AERO HOLDINGS, INC. , a corporation organized
under the laws of the State of Delaware (the
“Purchaser”); |
| |
| (2) |
DUNLOP STANDARD AEROSPACE GROUP LIMITED incorporated and
registered in England and Wales with company number 3573726 whose
registered office is at Holbrook Lane, Coventry, CV6 4AA (the
“Company”); |
| |
| (3) |
DUNLOP AEROSPACE LIMITED incorporated and registered in
England and Wales with company number 3477890 whose registered
office is at Holbrook Lane, Coventry, CV6 4AA; |
| |
| (4) |
DUNLOP STANDARD AEROSPACE OVERSEAS LIMITED incorporated
and registered in England and Wales with company number 3599227,
whose registered office is at Holbrook Lane, Coventry, CV6
4AA; |
| |
| (5) |
DUNLOP STANDARD AEROSPACE OVERSEAS INVESTMENTS LIMITED
incorporated and registered in England and Wales with company
number 3599223, whose registered office is at Holbrook Lane,
Coventry, CV6 4AA (together with the Company, Dunlop Aerospace
Limited and Dunlop Standard Aerospace Overseas Limited, the
“Vendors”); and |
| |
| (6) |
MEGGITT ACQUISITION LIMITED incorporated and registered
in England and Wales with company number 02005787 whose registered
office is at Farrs House, Cowgrove, Wimborne, Dorset BH21 4EL (the
“DSAG Purchaser”). |
WHEREAS:
| (A) |
Meggitt and the Purchaser and others have entered into the DSAG
Purchase Agreement on the date hereof. |
| |
| (B) |
The DSAG Purchase Agreement provides for (i) the DSAG
Purchase and (ii) certain covenants, undertakings,
representations and warranties relating to the transactions
contemplated by the DSAG Purchase Agreement and this
Agreement. |
| |
| (C) |
The Vendors have agreed to sell to the Purchaser
contemporaneously with completion of the DSAG Purchase, and the
Purchaser has agreed to purchase from the Vendors contemporaneously
with completion of the DSAG Purchase all of the issued and
outstanding capital stock or share capital, as applicable, of each
ERO Company on the terms and conditions of this Agreement. |
| |
| (D) |
The ERO Companies are subsidiaries of the Vendors and are
engaged in the ERO Business. |
| |
| (E) |
Further particulars of the ERO Companies and of the
Subsidiaries at the date of this Agreement are set out in
Part B of Schedule 3 to the DSAG Purchase Agreement. |
IT IS AGREED as
follows:
| 1. |
DEFINITIONS AND INTERPRETATION |
| |
| 1.1 |
In this Agreement, the following terms shall have the following
meanings: |
1
| |
“ Balancing Payment ” has the meaning
ascribed to it in the Separation Agreement; |
| |
| |
“ Bonds ” shall have the meaning ascribed to
it in the DSAG Purchase Agreement; |
| |
| |
“ Business Day ” means a day (excluding
Saturdays and Sundays) on which banks generally are open in both
London and New York for the transaction of normal banking
business; |
| |
| |
“ Canadian Purchaser ” means 3091782 Nova
Scotia Company, an unlimited liability company incorporated in Nova
Scotia, Canada; |
| |
| |
“ Companies Act ” means the Companies Act
1985; |
| |
| |
“ Completion ” means completion of the sale
and purchase of the Shares in accordance with Clause 5; |
| |
| |
“ Completion Date ” means the date on which
Completion occurs in accordance with Clause 5; |
| |
| |
“ Conditions Precedent ” means the
conditions precedent specified in sub-clause 3.1; |
| |
| |
“ Consideration ” has the meaning given in
sub-clause 2.3; |
| |
| |
“ Debt ” has the meaning ascribed to it in
the DSAG Purchase Agreement; |
| |
| |
“ Determination ” has the meaning ascribed
to it in the Separation Agreement; |
| |
| |
“ Disclosure Letter ” has the meaning
ascribed to it in the DSAG Purchase Agreement; |
| |
| |
“ Dollar Amount ” means an amount equal to
$511,600,000 less the sum of (i) the amount of ERO Debt
comprised in Estimated ERO Net Debt falling within paragraphs
(a) and (g) of the definition of ERO Debt only to the
extent it is denominated in USD (using for these purposes the
amount of USD required for such repayment) minus (ii) the
amount of ERO Cash (other than Trapped Cash) only to the extent it
is denominated in USD. For the purposes of this calculation all
figures will be taken from the Estimated Net ERO Debt (at the
conversion rate of 1.78 USD to 1 GBP), ERO Debt will exclude Intra
Group Debt and if the calculation results in a negative figure, the
“Dollar Amount” shall be 0 (zero); |
| |
| |
“ DSAG Purchase ” means the purchase by the
DSAG Purchaser of the entire issued share capital of DSAG pursuant
to the DSAG Purchase Agreement entered into on the date
hereof; |
| |
| |
“ DSAG Purchase Agreement ” means the
agreement relating to the sale and purchase of the entire issued
share capital of the Company dated as of the date hereof by and
among Meggitt, the DSAG Purchaser, the holders of all the issued
share capital of the Company and the Purchaser; |
| |
| |
“ DSAG Purchaser’s Counsel ” means
Clifford Chance LLP; |
| |
| |
“ DSAG Purchaser’s Counsel’s Account
” means the Clifford Chance Client Account, sort code
40-05-30, account number 23181499 or such other account(s) notified
in writing to the ERO Vendors by Meggitt Acquisition Limited; |
2
| |
“ DSAG Vendors ” means the Vendors as
defined in the DSAG Purchase Agreement; |
| |
| |
“ ERO Business ” means the business of
providing comprehensive repair and overhaul services on a wide
range of gas turbine engines as used on regional, military and
business jet aircraft, helicopters, ships, certain industrial
applications and related engineering services currently carried on
by the Group at the date of this Agreement; |
| |
| |
“ ERO Companies ” means Dunlop Standard
Aerospace (U.S.) Inc., Standard Aero Limited, Standard Aero (Asia)
Pte Ltd, Standard Aero (Australia) Pty Limited and Dunlop Standard
Aerospace (Nederland) BV; |
| |
| |
“ ERO Group Companies ” means the ERO
Companies and the Subsidiaries; |
| |
| |
“ ERO Purchase Price Adjustment ” has the
meaning specified in the Separation Agreement; |
| |
| |
“ Estimated Balancing Payment ” means the
estimate of the Intra-Group Debt as at the Completion Date (which
may be a positive or negative number) delivered by the Company
pursuant to Clause 2.6 of this Agreement (for the avoidance of
doubt, if the estimate of the Intra-Group Debt is a positive
number, the Estimated Balancing Payment shall also be a positive
number and vice versa); |
| |
| |
“ Estimated Net ERO Debt ” means an estimate
of the Net ERO Debt as notified to, inter alia, the ERO Purchaser
pursuant to Clause 3(b) of Schedule 5 of the DSAG Purchase
Agreement; |
| |
| |
“ Financing Commitment Letters ” shall have
the meaning given in sub-clause 3.1(i); |
| |
| |
“ Group ” means the Company and its
subsidiaries; |
| |
| |
“ Group Company ” means the Company or any
other member of the Group and |
| |
| |
“ Group Companies ” shall be construed
accordingly; |
| |
| |
“ Initial Consideration ” means
£376 million, less (i) the Estimated Net ERO
Debt and (ii) the Estimated Balancing Payment (for the
avoidance of doubt, if the Estimated Balancing Payment is a
negative number, it shall have the effect of increasing the Initial
Consideration but only to the extent such Estimated Balancing
Payment is paid upon Completion by the DSAG Purchaser and if the
Estimated Balancing Payment is a positive number, it shall have the
effect of decreasing the Initial Consideration but only to the
extent such Estimated Balancing Payment is paid upon Completion by
the ERO Purchaser); |
| |
| |
“Intra-Group Debt” has the meaning given in
the Separation Agreement; |
| |
| |
“ Investor Representative ” means Doughty
Hanson & Co. Limited; |
| |
| |
“ Laws ” or “ Law ” means
any applicable statute, rule or regulation; |
| |
| |
“ LIBOR ” means in relation to any amount
the applicable screen rate as at 11.00 a.m. (UK time) on the
relevant calculation date for the offering of deposits of that
amount in sterling for a three-month period and the “screen
rate” means The British Bankers’ Association Interest
Settlement Rate for sterling for the period displayed on the
appropriate page of the Telerate Screen; |
3
| |
“ Lien ” means a mortgage, charge, pledge,
lien, option, restriction, right of first refusal, right of
pre-emption, third party right or interest, other encumbrance or
security interest of any kind, or another type of preferential
arrangement (including, without limitation, a title transfer or
retention arrangement) having similar effect, in each case arising
as a result of any action or omission by Meggitt or a member of the
Meggitt Group or granted by any member of the Meggitt Group; |
| |
| |
“ Meggitt Group ” means Meggitt and its
subsidiaries from time to time; |
| |
| |
“ Meggitt ” means Meggitt Plc, a company
incorporated and registered in England and Wales, with company
number 432989, whose registered office is at Farrs House, Cowgrove,
Wimborne, Dorset BH21 4EL; |
| |
| |
“ Purchaser’s Account ” means an
account operated by the Purchaser as notified in writing to the
Vendors from time to time; |
| |
| |
“ Purchaser’s Group ” means the
Purchaser and any person controlling, controlled by, or under
common control with the Purchaser; |
| |
| |
“ Purchaser’s Group Companies ” means
the entities that are members of the Purchaser’s Group; |
| |
| |
“ Reorganisation ” has the meaning specified
in the DSAG Purchase Agreement; |
| |
| |
“ Separation Agreement ” means the
separation agreement relating to the sale and purchase of the
entire issued share capital of the Company entered into by the DSAG
Purchaser, the Company and the Purchaser on the date hereof; |
| |
| |
“ Shareholders Certificate ” means the
certificate given by or on behalf of the Vendors to the Purchaser
in the agreed form confirming satisfaction of those Conditions
Precedents set out in sub-clauses 3.1(f) and 3.1(g); |
| |
| |
“ Shares ” means (i) 100 shares of
common stock of Dunlop Standard Aerospace (U.S.) Inc., representing
100% of the issued and outstanding shares of capital stock of
Dunlop Standard Aerospace (U.S.) Inc., (ii) 1,000 common
shares of Standard Aero Limited, representing 100% of the issued
and outstanding capital stock of Standard Aero Limited,
(iii) 500,000 Ordinary Shares of SGD1 of Standard Aero (Asia)
Pte Ltd and 2,500,000 Redeemable Preference Shares of SGD1 of
Standard Aero (Asia) Pte Limited, representing 100% of the issued
and outstanding share capital of Standard Aero (Asia) Pte Limited,
(iv) 100,001 Ordinary Shares of Standard Aero (Australia) Pty
Limited, representing 100% of the issued share capital of Standard
Aero (Australia) Pty Limited and (v) Euro 24,957.91 of share
capital of Dunlop Standard Aerospace (Nederland) BV, representing
100% of the issued share capital of Dunlop Standard Aerospace
(Nederland) BV; |
| |
| |
“ Standard Aero Limited Shares ” shall have
the meaning given in sub-clause 4.1; |
| |
| |
“ Sterling Amount ” means (i) the
Initial Consideration less (ii) an amount equal to
(x) the Dollar Amount divided by (y) 1.78; |
| |
| |
“ Subsidiaries ” means the subsidiaries of
the ERO Companies, listed in Schedule 1, details of which are
set out in Part B of Schedule 3 of the DSAG Purchase
Agreement; |
4
| |
“ subsidiary ” and “
subsidiaries ” shall be construed in accordance with
sections 736 and 736A of the Companies Act; |
| |
| |
“ Taxation ” or “ Tax ”
means all forms of taxation and all forms of statutory,
governmental, state, federal, provincial, local government or
municipal charges, deficiencies, duties, imposts, contributions,
levies, withholdings or liabilities, including income, gross
receipts, franchise, alternative or add-on minimum, estimated,
sales, use, escheat, transfer, registration, value added, excise,
utility, natural resources, severance, stamp, occupation, premium,
windfall profit, environmental, customs, duties, real property,
personal property, capital stock, social security, national
insurance, unemployment, disability, payroll, license, occupation,
employee or other withholding, or other tax, of any kind whatsoever
and wherever imposed, including, without limitation, any interest,
deficiencies, penalties or additions to tax or additional amounts
in respect of the foregoing; |
| |
| |
“ Third Party Consents ” means written
consent from the parties to the contracts specified in
Schedule 4 of this Agreement to the acquisition of the Shares
as contemplated by this Agreement in terms reasonably satisfactory
to the Purchaser (and “Third Party Consent” shall be
construed accordingly); and |
| |
| |
“ working hours ” means 9.00 a.m. to 6.00
p.m. (UK time) on a Business Day and “close of
business” shall mean 6.00 p.m. (UK time) on the relevant
day. |
| 1.2 |
In this Agreement, unless the context otherwise requires: |
| |
(a) |
references to “persons” or
“undertakings” shall include individuals, bodies
corporate (wherever incorporated), unincorporated associations,
partnerships state or agency of a state or any works council or
employee representative body (whether or not having separate legal
personality) and other unincorporated bodies (in each case,
wherever resident and for whatever purpose); |
| |
| |
(b) |
words defined in the singular have the corresponding meaning in
the plural and vice versa; |
| |
| |
(c) |
references to “representatives” shall include
directors, officers, employees, controlling shareholders, agents,
attorneys, advisers, consultants and representatives; |
| |
| |
(d) |
references to Clauses, sub-clauses, Schedules and paragraphs
are to the Clauses and sub-clauses of and Schedules to this
Agreement and to the paragraphs in such Schedules
respectively; |
| |
| |
(e) |
any reference to a statutory provision or an
“enactment” is a reference to such statutory provision
or “enactment” as from time to time amended after the
date of this Agreement, consolidated or re-enacted (with or without
modification) and includes all instruments or orders made under
such statutory provision or enactment but only insofar as such
amendment, consolidation, re-enactment, instrument or order does
not increase the liability of the Purchaser or any of the Vendors
under this Agreement; |
| |
| |
(f) |
any reference to a document “in the agreed form” is
to the form of the relevant document agreed between the parties and
for the purpose of identification initialled by each of them or on
their behalf (in each case with |
5
| |
|
such amendments as may be agreed in writing by or on behalf of
the parties or their representatives); |
| |
| |
(g) |
references to any English legal term for any action, remedy,
method of judicial proceeding, legal document, legal status, court,
official or any other legal concept shall, in respect of any
jurisdiction other than England, be deemed to include the legal
concept which most nearly approximates in that jurisdiction to the
English legal term; |
| |
| |
(h) |
references to a “party” are to each of the Vendors,
the Purchaser or the DSAG Purchaser and each of that person’s
successors and permitted assigns, as the context may require, and
the term “parties” shall be construed accordingly; |
| |
| |
(i) |
liability under, pursuant to or arising out of (or any
analogous expression) any agreement, contract, deed or other
instrument includes a reference to contingent liability under,
pursuant to or arising out of (or any analogous expression) that
agreement, contract, deed or other instrument; |
| |
| |
(j) |
a party being liable to another party, or to liability,
includes, but is not limited to, any liability in equity, contract
or tort (including negligence) or under the Misrepresentation Act
1967; and |
| |
| |
(k) |
references to £ or GBP are to pounds sterling and
references to $ or USD are to United States Dollars |
| 1.3 |
The Schedules form part of this Agreement and shall have the
same effect as if expressly set out in the body of this Agreement.
Accordingly, any reference to “this Agreement” shall
include the Schedules. |
| |
| 1.4 |
The headings herein are inserted for convenience of reference
only and shall in no way be construed to define, limit, describe,
explain, modify, amplify, or add to the interpretation,
construction or meaning of any provision of, or scope or intent of,
this Agreement nor in any way affect this Agreement. |
| 2. |
SALE OF THE SHARES AND CONSIDERATION |
| |
| 2.1 |
The Vendors agree to sell or cause to be sold, and the
Purchaser agrees to purchase (or, in the case of Standard Aero
Limited and Standard Aerospace (Nederland) B.V., shall cause the
Canadian Purchaser to purchase) from the Vendors the Shares at
Completion on the terms that the same shall be sold free from all
Liens, together with all rights of the Vendors which now are, or at
any time hereafter may become, attached to them to the extent that
the Vendors are able to assign the same to the Purchaser (or, in
the case of Standard Aero Limited and Standard Aerospace
(Nederland) B.V., the Canadian Purchaser) (including, without
limitation, the right to receive all dividends and other
distributions declared, made or paid on or after the Completion
Date free from all Liens) provided, however, that the Purchaser and
the Canadian Purchaser shall have no recourse against the Vendors
following Completion as a result of or for the imposition of any
Liens on the Shares prior to the completion of the transactions
contemplated by the DSAG Purchase Agreement (other than in respect
of any Liens imposed by Meggitt). |
| |
| 2.2 |
The aggregate consideration payable by the Purchaser and the
Canadian Purchaser for the Shares is the Consideration. At
Completion, the Purchaser shall pay (or, in respect of Standard
Aero Limited and Standard Aerospace (Nederland) B.V., procure |
6
| |
the payment by the Canadian Purchaser of) the Initial
Consideration which shall be satisfied in full by payment of the
Dollar Amount and the Sterling Amount to the DSAG Purchaser’s
Counsel’s Account. The DSAG Purchaser’s Counsel is
hereby irrevocably authorised to receive all sums payable to the
Vendors hereunder on behalf of the Vendors. |
| |
| 2.3 |
The Estimated Net ERO Assets are £153,256,000. Following
Completion, the Initial Consideration shall be adjusted in
accordance with sub-clause 2.4 by reference to the Actual Net ERO
Debt and the Actual Net ERO Assets as defined in Schedule 2
and pursuant to the Determination of the ERO Purchase Price
Adjustment Statement in accordance with the Separation Agreement
(such adjusted Initial Consideration herein referred to as the
“ Consideration ”). |
| |
| 2.4 |
On calculation of the ERO Purchase Price Adjustment Amount in
accordance with the Separation Agreement any payment to be made to
the Purchaser or the Vendors shall be made in accordance with the
Separation Agreement. |
| |
| 2.5 |
Before Completion, the parties will agree upon an allocation of
the Initial Consideration among the Shares of each of the ERO
Companies, which allocation shall be adjusted by mutual agreement
of the parties to reflect the ERO Purchase Price Adjustment, and
any other adjustment of the consideration for the Shares, in each
case within 90 days of any |
|
