[EXECUTION
VERSION]
CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED FOR THE REDACTED PORTIONS. THE
CONFIDENTIAL REDACTED PORTIONS HAVE BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS
DENOTE SUCH REDACTIONS.
STOCK
PURCHASE AGREEMENT
Dated
as of JULY 3, 2007
Between
RADIO
ACQUISITION CORP.
ARINC
INCORPORATED ,
AMERICAN
AIRLINES, INC.,
CONTINENTAL
AIRLINES, INC.,
DELTA
AIR LINES, INC.,
NORTHWEST
AIRLINES, INC.,
UNITED
AIR LINES, INC.
and
US
AIRWAYS, INC.
TABLE
OF CONTENTS
Page
|
|
Section
1.1
|
Agreement
to Purchase and Sell
|
1
|
|
|
Section
1.2
|
Purchase
Price
|
2
|
|
|
Section
1.3
|
Method of
Payment
|
3
|
|
|
ARTICLE
II.REPRESENTATIONS AND WARRANTIES REGARDING THE
SHAREHOLDERS3
|
|
|
Section
2.1
|
Organization;
Standing
|
3
|
|
|
Section
2.2
|
Authorization;
Noncontravention.
|
3
|
|
|
Section
2.3
|
Governmental
Approvals
|
4
|
|
|
Section
2.4
|
Ownership
of Equity
|
4
|
|
|
Section
2.5
|
Legal
Proceedings
|
4
|
|
|
ARTICLE
III.REPRESENTATIONS AND WARRANTIES REGARDING THE
COMPANY4
|
|
|
Section
3.1
|
Organization,
Standing and Corporate Power
|
4
|
|
|
Section
3.2
|
Capitalization
|
5
|
|
|
Section
3.3
|
Authorization
Noncontravention
|
6
|
|
|
Section
3.4
|
Governmental
Approvals
|
7
|
|
|
Section
3.5
|
Financial
Statements; Undisclosed Liabilities
|
7
|
|
|
Section
3.6
|
Absence of
Certain Changes
|
8
|
|
|
Section
3.7
|
Legal
Proceedings
|
10
|
|
|
Section
3.8
|
Compliance
With Laws; Permits.
|
10
|
|
|
Section
3.9
|
Tax
Matters
|
11
|
|
|
Section
3.10
|
Employee
Benefits and Labor Matters.
|
11
|
|
|
Section
3.11
|
Environmental
Matters
|
13
|
|
|
Section
3.12
|
Properties
|
14
|
|
|
Section
3.13
|
Insurance
|
15
|
|
|
Section
3.14
|
Intellectual
Property
|
15
|
|
|
Section
3.15
|
Contracts
|
16
|
|
|
Section
3.16
|
Affiliate
Matters
|
18
|
|
|
Section
3.17
|
Brokers and
Other Advisors
|
18
|
|
|
Section
3.18
|
Relations
with Governments.
|
18
|
|
|
Section
3.19
|
Customers
and Suppliers.
|
20
|
|
|
Section
3.20
|
Government
Contracts
|
20
|
|
|
ARTICLE
IV.REPRESENTATIONS AND WARRANTIES OF THE PURCHASER21
|
|
|
Section
4.1
|
Organization;
Standing
|
22
|
|
|
Section
4.2
|
Authority;
Noncontravention
|
22
|
|
|
Section
4.3
|
Governmental
Approvals
|
22
|
|
|
Section
4.4
|
Capital
Resources
|
22
|
|
|
Section
4.5
|
Brokers and
Other Advisors
|
23
|
|
|
Section
4.6
|
Ownership
of Shares
|
23
|
|
|
Section
4.7
|
Investigation;
Acknowledgement
|
23
|
|
|
ARTICLE
V.ADDITIONAL COVENANTS AND AGREEMENTS24
|
|
|
Section
5.1
|
Conduct of
Business
|
24
|
|
|
Section
5.2
|
No
Solicitation
|
28
|
|
|
Section
5.3
|
Reasonable
Best Efforts.
|
28
|
|
|
Section
5.4
|
Public
Announcements
|
29
|
|
|
Section
5.5
|
Access to
Information; Confidentiality
|
30
|
|
|
Section
5.6
|
Indemnification
and Insurance
|
30
|
|
|
Section
5.7
|
Fees and
Expenses
|
32
|
|
|
Section
5.10
|
Service
Level Amendments
|
33
|
|
|
Section
5.11
|
Financing
|
33
|
|
|
Section
5.12
|
Payoff
Letters
|
34
|
|
|
Section
5.14
|
Operating
Leases
|
35
|
|
|
Section
5.15
|
Performance
Bonds
|
35
|
|
|
Section
5.16
|
Aeromobile
|
35
|
|
|
Section
5.17
|
International
Communications Licenses
|
35
|
|
|
ARTICLE
VI.CONDITIONS PRECEDENT36
|
|
|
Section
6.1
|
Conditions
to Each Party’s Obligation to Effect the
Transactions
|
36
|
|
|
Section
6.2
|
Conditions
to Obligations of the Purchaser
|
36
|
|
|
Section
6.3
|
Conditions
to Obligations of the Shareholders and the Company
|
38
|
|
|
Section
7.2
|
Closing
Deliveries of the Shareholders and the Company
|
39
|
|
|
Section
7.3
|
The
Purchaser Closing Deliveries
|
39
|
|
|
ARTICLE
VIII.TERMINATION39
|
|
|
Section
8.1
|
Termination
|
39
|
|
|
Section
8.2
|
Effect of
Termination
|
40
|
|
|
ARTICLE
IX.INDEMNIFICATION41
|
|
|
Section
9.1
|
Indemnification
Obligations of the Shareholders41
|
|
|
Section
9.2
|
Indemnification
Procedure.
|
41
|
|
|
Section
9.3
|
Survival
Period
|
42
|
|
|
Section
9.4
|
Liability
Limits
|
42
|
|
|
Section
9.5
|
Calculation
of Damages
|
43
|
|
|
Section
9.6
|
Exclusive
Remedy
|
43
|
|
|
Section
9.7
|
Adjustments
to the Purchase Price
|
43
|
|
|
ARTICLE
X.MISCELLANEOUS43
|
|
|
Section
10.1
|
Survival of
Representations, Warranties, Covenants and
Agreements
|
43
|
|
|
Section
10.2
|
No Other
Representations or Warranties
|
43
|
|
|
Section
10.3
|
Amendment
or Supplement
|
44
|
|
|
Section
10.4
|
Extension
of Time, Waiver, Etc
|
44
|
|
|
Section
10.5
|
Assignment
|
44
|
|
|
Section
10.6
|
Counterparts
|
44
|
|
|
Section
10.7
|
Entire
Agreement; No Third-Party Beneficiaries; No
Recourse
|
44
|
|
|
Section
10.8
|
Governing
Law
|
45
|
|
|
Section
10.9
|
Dispute
Resolution
|
45
|
|
|
Section
10.11
|
Severability
|
48
|
|
|
Section
10.12
|
Definitions
|
49
|
|
|
Section
10.13
|
Rules of
Interpretations
|
57
|
STOCK
PURCHASE AGREEMENT
This
STOCK PURCHASE AGREEMENT, dated as of July 3, 2007, is between
Radio Acquisition Corp., a Delaware corporation (the
“Purchaser”), ARINC Incorporated, a Delaware
corporation (the “Company”), American Airlines,
Inc., a Delaware corporation (“American”),
Continental Airlines, Inc., a Delaware corporation
(“Continental”), Delta Air Lines, Inc., a Delaware
corporation (“Delta”), Northwest Airlines, Inc., a
Delaware corporation (“Northwest”), United Air
Lines, Inc., a Delaware corporation (“United”),
and US Airways, Inc., a Delaware corporation (“US
Airways”). American, Continental, Delta,
Northwest, United and US Airways are sometimes referred to
herein individually as a “Shareholder” and
collectively as the
“Shareholders.” Certain capitalized and
other terms used in this Agreement shall have the meanings set
forth in Section 10.12.
WHEREAS,
the Shareholders own more than ninety percent (90%) of the
issued and outstanding shares of capital stock of the
Company;
WHEREAS,
pursuant to the terms and conditions set forth herein, the
Shareholders propose to sell to the Purchaser, and the
Purchaser proposes to purchase from the Shareholders, all of
the issued and outstanding shares of capital stock of the
Company owned by the Shareholders;
WHEREAS,
as soon as practicable following the Closing, the Purchaser
will acquire all remaining issued and outstanding shares of
capital stock of the Company pursuant to the terms set forth
in Section 5.9;
WHEREAS,
simultaneously herewith, Carlyle Partners IV, L.P. (the
“Guarantor”) has delivered to the Shareholders
that certain Guaranty (the “Sponsor Guaranty”),
pursuant to which the Guarantor has agreed to guarantee
certain obligations of the Purchaser hereunder;
and
WHEREAS,
prior to and in connection with the execution of this
Agreement, the Shareholders have caused the Company to amend
its certificate of incorporation in a form acceptable to the
Purchaser (the “Certificate Amendment”) and the
Shareholders have delivered to the Purchaser correct and
complete copies of (i) such Certificate Amendment, certified
by the Secretary of State of the State of Delaware, (ii) the
approvals of such Certificate Amendment by the Board of
Directors and the stockholders of the Company, certified by
the Secretary of the Company, and (iii) the approval of the
Transactions by the Special Committee and the Board of
Directors, certified by the Secretary of the
Company.
NOW,
THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this
Agreement, and intending to be legally bound hereby, the
Purchaser and the Shareholders hereby agree as
follows:
ARTICLE
I.
PURCHASE
AND SALE
Section
1.1
Agreement
to Purchase and Sell . Subject to the terms and
conditions of this Agreement, at the Closing, the Shareholders will
sell, transfer and deliver to the Purchaser, and the Purchaser will
purchase and acquire from the Shareholders, all of the shares of
Company Common Stock owned by the Shareholders (the
“Shares”), free and clear of all Liens.
Section
1.2
Purchase
Price .
(a)
Within ten
(10) Business Days prior to the Closing Date, and in no event less
than three (3) Business Days prior to the Closing Date, the Company
shall deliver to the Purchaser a certificate signed by the chief
financial officer of the Company (the “Adjustment
Certificate”) (i) setting forth his or her best estimate of
the sum (such amount, as adjusted to reflect the Final Adjustment
Certificate, the “Closing Adjustment Deductions”) of
(A) the aggregate amount of fees, costs and expenses, including
Consent Costs, that the Company or any of its Subsidiaries has paid
after May 31, 2007, or that the Company or any of its Subsidiaries
would (without taking into account Section 5.7) be obligated to pay
on or after the date of the Adjustment Certificate, that the
Shareholders are obligated to pay pursuant to Section 5.7, plus (B)
the aggregate amount paid by the Company after May 31, 2007, or
that the Company or any of its Subsidiaries will be obligated to
pay on or after the date of the Adjustment Certificate, to any
Third Party in respect of Equity Interests in the Company (other
than payments made in accordance with (i) the Company’s Long
Term Incentive Plan to holders of stock appreciation rights issued
in accordance therewith on or prior to the date of this Agreement,
only to the extent such payments are based on a per-share valuation
of the Company Common Stock that is no greater than the Per Share
Purchase Price, or (ii) the Merger), in each case in this clause
(i) together with a worksheet showing in reasonable detail the
components of such estimate, and (ii) (A) affirming the
representations and warranties set forth in Section 3.2(a) or (B)
identifying in reasonable detail each respect in which the
representations and warranties set forth in Section 3.2(a) are
inaccurate. In the event that the Purchaser disagrees
with any of the items in the Adjustment Certificate, the Purchaser
shall promptly notify the Shareholders and the Company of such
disagreements and the parties to this Agreement shall cooperate and
use reasonable best efforts to resolve any such disagreements prior
to the Closing and amend the Adjustment Certificate to reflect any
agreed changes thereto (as amended, if applicable, the “Final
Adjustment Certificate”); provided, however, that the failure
of the parties to resolve any such disagreements shall not relieve
any party of its obligations hereunder to effect the
Closing.
(b)
The
aggregate amount to be paid for the Shares shall be the amount (the
“Purchase Price”) equal to (i) the number of issued and
outstanding shares of Company Common Stock held beneficially and of
record by the Shareholders immediately prior to the Closing
multiplied by (ii) the amount (the “Per Share Purchase
Price”) equal to (A) (1) ************ minus (2) the Closing
Adjustment Deductions plus (3) the Aggregate SARs Exercise Price
divided by (B) the sum of (1) the number of shares of Company
Common Stock (including restricted stock, whether or not then
vested) issued and outstanding immediately prior to the Closing and
(2) the number of shares of Company Common Stock issuable upon
exercise, exchange, conversion or redemption of any Stock Awards
issued after the date of this Agreement and outstanding immediately
prior to the Closing (whether or not such Stock Awards are then
vested, exercisable, exchangeable, convertible or redeemable,
including assuming that stock appreciation rights are exercisable
(with no cashless exercise option) for shares of Company Common
Stock rather than cash).
(c)
On the
Closing Date, the Purchaser shall pay to each Shareholder a portion
of the Purchase Price equal to the percentage set forth opposite
such Shareholder’s name on Exhibit 1.2(c), multiplied by the
Purchase Price.
(d)
For the
purposes of this Agreement, “Aggregate SARs Exercise
Price” shall mean the sum of cash exercise prices that would
be payable upon exercise in full of all Stock Awards issued after
the date of this Agreement and outstanding immediately prior to the
Closing.
Section
1.3
Method
of Payment . Each applicable payment under this
Article I shall be made in United States dollars when due by wire
transfer of immediately available funds to an account that the
applicable Shareholder has designated to the
Purchaser.
ARTICLE
II.
REPRESENTATIONS
AND WARRANTIES REGARDING THE SHAREHOLDERS
Each
of the Shareholders, severally and not jointly, represents and
warrants as to itself that, except as set forth in the
disclosure schedule delivered by the Shareholders to the
Purchaser simultaneously with the execution of this Agreement
(the “Shareholder Disclosure
Schedule”):
Section
2.1
Organization;
Standing . Shareholder is a corporation duly
organized, validly existing and in good standing under the Laws of
its state of incorporation. Such Shareholder has all
requisite corporate power and authority to own the Shares held by
it.
Section
2.2
Authorization;
Noncontravention .
(a)
Shareholder
has the right, power, authority and capacity to execute and deliver
this Agreement and to perform its obligations hereunder and to
consummate the Transactions. The execution, delivery and
performance by Shareholder of this Agreement and the consummation
of the Transactions have been authorized by all required action on
the part of Shareholder and its board of directors. This
Agreement has been duly executed and delivered by such Shareholder
and constitutes a legal, valid and binding obligation of
Shareholder, enforceable against Shareholder in accordance with its
terms, except that such enforceability (i) may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar Laws of general application affecting
or relating to the enforcement of creditors’ rights
generally, and (ii) is subject to general principles of equity,
whether considered in a proceeding at Law or in equity (the
“Bankruptcy and Equity Exception”).
(b)
Neither the
execution and delivery of this Agreement by Shareholder, nor the
consummation by Shareholder of the Transactions applicable to it,
nor compliance by Shareholder with any of the terms or provisions
hereof, will (i) conflict with or violate any provision of the
certificate of incorporation or bylaws of Shareholder, (ii) violate
any Law, judgment, writ or injunction of any Governmental Authority
applicable to Shareholder, (iii) constitute a breach of the terms,
conditions or provisions of any Contract to which Shareholder is a
party or to which the Shares are subject, or (iv) result in the
imposition of a Lien on any of the Shares, except, in the case of
clauses (ii), (iii) and (iv), for such violations or defaults as
would not reasonably be expected, individually or in the aggregate,
to impair in any material respect the ability of Shareholder to
perform its obligations hereunder or prevent or materially delay
consummation of the Transactions applicable to it.
Section
2.3
Governmental
Approvals . Except for filings required under, and
compliance with other applicable requirements of, the HSR Act, no
consents or approvals of, or filings, declarations or registrations
with, any Governmental Authority are necessary for the execution,
delivery and performance of this Agreement by Shareholder or the
consummation by Shareholder of the Transactions applicable to it,
other than such other consents, approvals, filings, declarations or
registrations that, if not obtained, made or given, would not
reasonably be expected, individually or in the aggregate, to impair
in any material respect the ability of Shareholder to perform its
obligations hereunder or prevent or materially delay consummation
of the Transactions applicable to it.
Section
2.4
Ownership
of Equity . Shareholder (i) has good and valid title
to and beneficial ownership of the number of shares of Company
Class A Common Stock and Company Class C Common Stock set forth
opposite Shareholder’s name on Section 2.4 of the Shareholder
Disclosure Schedule free and clear of all liens, pledges, security
interests, mortgages, charges, rights of first offer or refusal,
options to purchase or other rights to acquire, assignments and
encumbrances (“Liens”), (ii) has not granted any
option, warrant, subscription, call, commitment or other right in
or to any of such Shares, and (iii) is not a party to any voting
trust, voting agreement, or shareholder agreement with respect to
such Shares.
Section
2.5
Legal
Proceedings . There are no suits, actions, claims,
proceedings or investigations pending or, to the Knowledge of
Shareholder, threatened against, relating to or involving
Shareholder which would reasonably be expected, individually or in
the aggregate, to impair in any material respect the ability of
Shareholder to perform its obligations hereunder or prevent or
materially delay the consummation of the Transactions applicable to
Shareholder.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES REGARDING THE COMPANY
The
Company and, to the Knowledge of each such Shareholder, each
of the Shareholders represents and warrants to the Purchaser
that, except as set forth in the disclosure schedule delivered
by the Company to the Purchaser simultaneously with the
execution of this Agreement (the “Company Disclosure
Schedule”):
Section
3.1
Organization,
Standing and Corporate Power .
(a)
The Company
is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware and has all
requisite corporate power and authority necessary to own, lease and
operate all of its properties and assets and to carry on its
business as it is now being conducted. The Company is
duly licensed or qualified to do business and is in good standing
in each jurisdiction in which the nature of the business conducted
by it or the character or location of the properties and assets
owned or leased by it makes such licensing or qualification
necessary, except where the failure to be so licensed, qualified or
in good standing would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect. The
Shareholders have previously made available to the Purchaser copies
of the certificate of incorporation and bylaws of the Company (the
“Company Charter Documents”), which copies are correct
and complete (including as to any amendments) as of the date
hereof.
(b)
Section
3.1(b) of the Company Disclosure Schedule lists each Subsidiary of
the Company. Each of the Company’s Subsidiaries is
duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization. Each of
the Company’s Subsidiaries has all requisite corporate power
and authority necessary to own, lease and operate its properties
and assets and to carry on its business as currently
conducted. Each Subsidiary of the Company is duly
licensed or qualified to do business and is in good standing in
each jurisdiction in which the nature of the business conducted by
it or the character or location of the properties and assets owned
or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed, qualified or in good
standing (or equivalent status) would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect. The Shareholders have previously made available
to the Purchaser copies of the organizational documents of each
Subsidiary, which copies are correct and complete (including as to
any amendments) as of the date hereof. All the
outstanding shares of capital stock of, or other Equity Interests
in, each Subsidiary of the Company are owned of record and
beneficially, directly or (as set forth on Section 3.1(b) of the
Company Disclosure Schedule) indirectly, by the Company free and
clear of Liens. The shares of capital stock of, or other
Equity Interests in, each Subsidiary of the Company are duly
authorized and validly issued and are fully paid, nonassessable and
free of preemptive rights. Other than capital stock of,
or other Equity Interests in, a Subsidiary as set forth in, or as
otherwise set forth in, Section 3.1(b) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries owns,
directly or indirectly, any capital stock or other Equity Interest
in any corporation, limited liability company, partnership, joint
venture or other business association or entity. There
are no outstanding options, warrants, conversion rights, rights of
exchange, convertible or exchangeable securities or other rights to
acquire or receive any shares of capital stock of, or Equity
Interests in, any Subsidiary of the Company and there are no
commitments, agreements or other obligations providing for the
issuance of additional Equity Interests (or sale of treasury
shares) of any Subsidiary of the Company, or for the repurchase or
redemption of any Equity Interests of any Subsidiary of the
Company. Neither the Company nor any of its Subsidiaries
is party to any voting trust, voting agreement, or shareholder
agreement with respect to the shares of capital stock of, or other
Equity Interests in, the Subsidiaries of the Company.
Section
3.2
Capitalization
.
(a)
The
authorized capital stock of the Company consists of 12,497,500
shares of Company Class A Common Stock, par value $.01 per share
(“Company Class A Stock”), 2,500 shares of Company
Class B Common Stock, par value $.01 per share (“Company
Class B Stock”), 12,500,000 shares of Company Class C Common
Stock, par value $.01 per share (“Company Class C
Stock”), and 100,000 shares of Preferred Stock, par value
$0.01 per share (“Company Preferred Stock”), of which
(i) 7,878,750 shares of Company Class A Stock are issued and
outstanding and 3,744,500 shares of Company Class A Stock are held
by the Company in its treasury, (ii) 1 share of Company Class B
Stock is issued and outstanding and 500 shares of Company Class B
Stock are held by the Company in its treasury, and (iii) 850,358
shares of Company Class C Stock are issued and outstanding and
900,256 shares of Company Class C Stock were held by the Company in
its treasury. No shares of Company Preferred Stock are
issued and outstanding or held by the Company in its
treasury. Except as set forth in the Company Charter
Documents, there are no outstanding options, warrants, conversion
rights, rights of exchange, convertible or exchangeable securities
or other rights to acquire or receive any shares of capital stock
of, or other Equity Interests in, the Company, and there are no
commitments, agreements or other obligations providing for the
issuance of additional Equity Interests (or sale of treasury
shares) of the Company, or for the repurchase or redemption of any
Equity Interests of the Company. All of the issued and
outstanding shares of capital stock of, or other Equity Interests
in, the Company are held of record by the Persons and in the
amounts set forth in Section 3.2(a) of the Company Disclosure
Schedule. All outstanding shares of Company Common Stock
have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. Section
3.2(a) of the Company Disclosure Schedule sets forth the
outstanding or authorized stock option, stock appreciation,
restricted stock, phantom stock and stock plan awards or similar
rights with respect to the Company (collectively, the “Stock
Awards”), including, as applicable, the recipient of the
award, exercise price, grant date, vesting schedule, and number of
shares subject to such award. The Company is not party
to any voting trust, voting agreement or shareholder agreement with
respect to the shares of capital stock of, or other Equity
Interests in, the Company. At the Closing, the Final
Adjustment Certificate shall be accurate and complete in all
respects with respect to the matters set forth in this Section
3.2(a).
(b)
Section
3.2(b) of the Company Disclosure Schedule sets forth, with respect
to each Stock Award, whether such Stock Award is subject to Section
409A of the Code and whether the recipient of such Stock Award made
an election pursuant to Section 83(b) of the Code with respect
thereto.
Section
3.3
Authorization
Noncontravention .
(a)
The Company
has all requisite corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to
consummate the Transactions. The execution, delivery and
performance by the Company of this Agreement and the consummation
of the Transactions have been authorized by all required action on
the part of the Company. This Agreement has been duly
executed and delivered by the Company and constitutes a legal,
valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject to the Bankruptcy
and Equity Exception.
(b)
Neither the
execution and delivery of this Agreement by the Company or the
Shareholders nor the consummation by the Shareholders and the
Company of the Transactions, nor compliance by the Shareholders and
the Company with any of the terms or provisions hereof, will (i)
conflict with or violate any provision of the Company Charter
Documents or the organizational documents of any Subsidiary of the
Company or, to the Knowledge of the Company, any Joint Venture,
(ii) violate any Law, judgment, writ or injunction of any
Governmental Authority applicable to the Company, any of its
Subsidiaries or, to the Knowledge of the Company, any Joint Venture
(iii) violate or (with or without notice or lapse of time or both)
constitute a default (or give rise to any right of termination,
cancellation or acceleration, or loss of any material benefit)
under any of the terms, conditions or provisions of any Contract to
which the Company, any of its Subsidiaries or, to the Knowledge of
the Company, any Joint Venture is a party, or (iv) result in the
imposition of a Lien on any assets of the Company or its
Subsidiaries, except in the case of clauses (ii), (iii) and (iv),
for such violations, defaults, or Liens as would not reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect.
(c)
The Company
has delivered to the Purchaser correct and complete copies of (i)
the Certificate Amendment, certified by the Secretary of State of
the State of Delaware, (ii) the approvals of such Certificate
Amendment by the Board of Directors and the stockholders of the
Company, certified by the Secretary of the Company, and (iii) the
approval of the Transactions by the Special Committee and the Board
of Directors, certified by the Secretary of the
Company.
Section
3.4
Governmental
Approvals . Except for filings required under, and
compliance with other applicable requirements of, the HSR Act and
as set forth on Section 3.4 of the Company Disclosure Schedule, no
material consents or approvals of, or filings, declarations or
registrations with, any Governmental Authority are necessary for
the execution and delivery of this Agreement by the Company and the
consummation by the Company of the Transactions.
Section
3.5
Financial
Statements; Undisclosed Liabilities
. (a) Correct and complete copies of the
Financial Statements have been made available to the
Purchaser. The Financial Statements have been prepared
in accordance with GAAP applied on a consistent basis during the
periods involved (subject, in the case of unaudited financial
statements, to (i) normal, recurring year-end audit adjustments,
and (ii) the absence of footnotes). The Financial
Statements fairly present, in all material respects, the
consolidated financial position, results of operations, cash flows
and changes in stockholders’ equity of the Company and its
Subsidiaries as of the dates thereof and for the periods then ended
(subject, in the case of unaudited interim statements, to
(A) normal, recurring year-end audit adjustments, and
(B) the absence of footnotes).
(b)
Neither the
Company nor any of its Subsidiaries has any liabilities which, if
known, would be required to be reflected or reserved against on a
consolidated balance sheet of the Company prepared in accordance
with GAAP or the footnotes thereto, except liabilities (i)
reflected or reserved against on the balance sheet of the Company
and its Subsidiaries as of May 31, 2007 (the “Balance Sheet
Date”), (ii) incurred after the Balance Sheet Date in the
ordinary course of business consistent with past practices, (iii)
as contemplated by this Agreement or otherwise in connection with
the Transactions, or (iv) as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect.
(c)
As of May
31, 2007, the amount equal to (i) the aggregate consolidated
Indebtedness of the Company and its Subsidiaries of a type required
to be reflected on a balance sheet prepared in accordance with
GAAP, minus (ii) the aggregate consolidated cash and cash
equivalents held by the Company and its Subsidiaries, calculated in
accordance with GAAP in a manner consistent with the preparation of
the most recent audited balance sheet included in the Financial
Statements (to the extent not inconsistent with GAAP (“Net
Indebtedness”), was equal to $150,000,000.
Section
3.6
Absence
of Certain Changes .
(a)
Since the
Balance Sheet Date, (i) the Company and each of its Subsidiaries
has carried on and operated its businesses in all material respects
in the ordinary course of business consistent with past practices
and (ii) there has not been, and no change, event, effect or
occurrence has taken place that would reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect.
(b)
Since the
Balance Sheet Date, neither the Company nor any of its Subsidiaries
has:
(i)
(A)
redeemed, purchased or otherwise acquired any of its outstanding
Equity Interests, or any rights, warrants or options to acquire any
Equity Interests; or (B) declared, set aside for payment or paid
any dividend on, or made any other distribution in respect of, any
Equity Interests;
(ii)
sold or
otherwise disposed of any of its material properties or assets,
except (A) (1) sales, leases, and rentals of inventory, (2)
non-exclusive licenses in connection therewith and (3)
sale-leaseback transactions in connection with the
“Airports” business, in each case in the ordinary
course of business consistent with past practices, (B) pursuant to
Contracts in force on the date of this Agreement and set forth in
the Company Disclosure Schedule, (C) dispositions of obsolete
assets or (D) transfers among the Company and its wholly-owned
Subsidiaries;
(iii)
increased
in any material respect the salary, benefits, bonuses or other
compensation of any of its current or former directors,
consultants, officers or employees, other than (A) as required
pursuant to applicable Law or the terms of Contracts in effect on
the date of this Agreement and set forth in the Company Disclosure
Schedule; or (B) increases in salaries, wages and benefits of
employees made in the ordinary course of business consistent with
past practices;
(iv)
(A)
exercised any discretion to accelerate the vesting or payment of
any compensation or benefit under any Company Plan; (B) paid any
transaction-related bonuses, severance or other similar amounts to
employees of the Company, its Subsidiaries, the Shareholders or any
of their respective Affiliates; or (C) granted any new awards under
any Company Plan;
(v)
made any
material changes in financial or tax accounting methods, principles
or practices (or changed an annual accounting period), including a
change in the methods, principles or practices related to the
revaluing of any assets or writing off receivables or
reserves;
(vi)
adopted a
plan or agreement of complete or partial liquidation or
dissolution;
(vii)
entered
into any new material line of business;
(viii)
made any
acquisition of or material investment in any other business or
Person, by purchase or other acquisition of Equity Interests, by
merger, consolidation, asset purchase or other business
combination, or by formation of any joint venture or other business
organization or by contributions to capital;
(ix)
settled or
compromised any Action that is material to the Company and its
Subsidiaries (taken as a whole);
(x)
entered
into any agreement in respect of Taxes, changed or made any Tax
elections (unless required by applicable Law), filed any material
amended Tax Return, settled or compromised any material Tax
liability or consented to any extension or waiver of the limitation
period applicable to any claim or assessment in respect of
Taxes;
(xi)
made any
material capital expenditures other than in the ordinary course of
business consistent with past practice or in accordance with the
Company’s current capital expenditure budget disclosed to the
Purchaser prior to the date hereof;
(xii)
incurred,
created or become liable for any Indebtedness (A) of the type
described in clauses (i), (ii), (v), (with respect to interest rate
swap obligations) (vii), or (with respect to any of the foregoing)
(viii) of the definition thereof, other than Credit Facility
Indebtedness (and interest rate swap obligations in connection
therewith under Contracts in effect on the date of this Agreement
and set forth in the Company Disclosure Schedule); or (B) any
material Indebtedness of any other type other than in the ordinary
course of business consistent with past practice;
(xiii)
forgiven or
waived any material Indebtedness outstanding against a Third
Party;
(xiv)
made any
material loans or advances to, or investments in, any Third
Party;
(xv)
entered
into any material transaction with any Third Party other than on
arm’s length terms, to the extent the amount received or paid
by the Company or any of its Subsidiaries is less than or exceeds,
respectively, the amount which would be received or paid if at
arm’s-length, including, without limitation, the forgiveness
of any material claims against Third Parties not on an
arm’s-length basis;
(xvi)
made any
material gift or other material gratuitous payment out of the
ordinary course of business; or
(xvii)
entered
into any Contract pursuant to which, in connection with a Third
Party providing surety bonds, performance guarantees or any similar
obligations for the benefit of the Company or any of its
Subsidiaries, such Third Party (A) is entitled to be provided with
any material assets of the Company or any of its Subsidiaries as
collateral or (B) is expressly entitled to provide or withhold its
consent to a change of control of the Company or its Subsidiaries
(or as a result of such a change of control, the Third Party would
be entitled to terminate or modify such Contract); or
(xviii)
agreed to
take any of the foregoing actions.
Section
3.7
Legal
Proceedings . There is no pending or, to the
Knowledge of the Company, threatened, legal, administrative or
arbitral proceeding, claim, suit, investigation or action
(“Action”) against the Company or any of its
Subsidiaries, nor is there any Governmental Order, imposed upon the
Company, any of its Subsidiaries, to the Knowledge of the Company,
any Joint Venture, or any of their respective assets or directors
or officers (in their capacity as such) that would reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect.
Section
3.8
Compliance
With Laws; Permits .
(a)
The Company
and its Subsidiaries and, to the Knowledge of the Company, the
Joint Ventures are and during the past eighteen (18) months have
been in compliance with all laws (including common law), statutes,
ordinances, codes, rules, regulations and Governmental Orders of
Governmental Authorities (collectively, “Laws”)
applicable to the Company, any of its Subsidiaries or any Joint
Venture, except for such non-compliance as would not reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect. During the past eighteen (18) months,
except as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, neither the Company
nor any of its Subsidiaries nor, to the Knowledge of the Company,
any Joint Venture has received or been subject to any written
notice, charge, claim or assertion alleging any violations of Laws
or Permits and, to the Knowledge of the Company, no charge, claim
or assertion of any violation of any law or Permit by the Company,
any of its Subsidiaries or any Joint Venture is threatened against
the Company, any of its Subsidiaries or any Joint
Venture.
(b)
The Company
and each of its Subsidiaries hold all licenses, franchises,
permits, certificates, approvals and authorizations from
Governmental Authorities necessary for the lawful conduct of their
respective businesses (collectively, “Permits”), except
where the failure to hold the same would not reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect. Section 3.8(b) of the Company Disclosure
Schedule sets forth the correct and complete list of (i) all
material Permits issued by the Federal Communications Commission
and (ii) the jurisdictions outside of the United States in which
the Company or a Subsidiary holds material Permits with respect to
communications matters (the “Material Non-US Communications
Permits”) and the current status of such
Permits. All Permits are in full force and effect and
there are no proceedings pending or, to the Knowledge of the
Company, threatened, that seek the revocation, cancellation,
suspension or adverse modification of any such Permit, except as
would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect. The Company and its
Subsidiaries are in compliance with the terms of all Permits,
except for such non-compliance as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect.
(c)
The
Material Non-US Communications Permits are in full force and
effect.
Section
3.9
Tax
Matters . Except for those matters that would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect: (i) each of the Company and its
Subsidiaries has timely filed, or has caused to be timely filed on
its behalf (taking into account any extension of time within which
to file), all Tax Returns (as hereinafter defined) required to be
filed by it, and all such filed Tax Returns are correct and
complete in all respects; (ii) all Taxes of the Company and its
Subsidiaries have been or will be timely paid, except to the extent
that such Taxes are being contested in good faith and for which the
Company or the appropriate Subsidiary has set aside adequate
reserves in accordance with GAAP; (iii) without taking into account
the Transactions and based upon activities to date, adequate
reserves in accordance with GAAP have been established by the
Company and its Subsidiaries for all Taxes not yet due and payable
in respect of taxable periods ending on the date hereof; (iv) no
deficiency with respect to Taxes has been proposed, asserted or
assessed against the Company or any of its Subsidiaries which have
not been fully paid or adequately reserved in the Financial
Statements; and (v) no audit or other administrative or court
proceedings are pending, or to the Knowledge of the Company,
threatened by any Governmental Authority with respect to Taxes of
the Company or any of its Subsidiaries and no written notice
thereof has been received; (vi) all amounts of Tax required to be
withheld by the Company or any of its Subsidiaries have been or
will be timely withheld and paid over to the appropriate Tax
authority; (vii) neither the Company nor any of its Subsidiaries
has been a member of an affiliated group filing a consolidated
federal income tax return (other than a group the common parent of
which was the Company) or has any liability for the Taxes of any
Person (other than the Company or any of its Subsidiaries) under
Treasury regulation section 1.1502-6 (or any similar provision of
state, local or foreign law), as a transferee, successor, by
contract or otherwise; (viii) neither the Company nor any of its
Subsidiaries is required to make any disclosure to the Internal
Revenue Service with respect to a “listed transaction”
pursuant to Section 1.6011-4(b)(2) of the Treasury Regulations
promulgated under the Code; and (ix) neither the Company nor any of
its Subsidiaries has distributed the stock of another company in a
transaction that was purported or intended to be governed by
section 355 or section 361 of the Code. This Section 3.9
includes the sole and exclusive representations and warranties of
the Shareholders relating to Tax matters, including compliance with
Laws relating thereto.
Section
3.10
Employee
Benefits and Labor Matters .
(a)
Section
3.10 of the Company Disclosure Schedule lists (i) all material
“employee benefit plans” (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”)), and (ii) all material employment, retention
and severance plans and agreements and all bonus, incentive
compensation, stock purchase, equity or equity based compensation,
deferred compensation, change in control, vacation, salary
continuation, life insurance plans and employee benefit plans,
arrangements, policies and agreements (whether written or
unwritten) (A) maintained, contributed to or required to be
contributed to, within the prior six years, by the Company, any of
its Subsidiaries, or any ERISA Affiliate, and (B) with respect to
which the Company or any of its Subsidiaries may have any
obligation or liability, contingent or otherwise (collectively, the
“Company Plans”). Section 3.10 of the
Company Disclosure Schedule identifies any Company Plan that is not
subject to the Laws of the United States (each, a “Foreign
Company Plan”), and no such Foreign Company Plan is a defined
benefit pension plan.
(b)
The Company
has made available to Purchaser a correct and complete set of
copies of (i) all Company Plans and related trust agreements,
annuity contracts or other funding instruments, (ii) the latest IRS
determination or opinion letter obtained with respect to any
Company Plan qualified or exempt under Section 401 or 501 of the
Code, as applicable, or analogous ruling under foreign law with
respect to each Foreign Company Plan, (iii) Forms 5500 and
certified financial statements (and in relation to the Foreign
Company Plans, financial statements as filed with the applicable
Governmental Authority) for the most recently completed fiscal year
for each Company Plan, together with the most recent actuarial
report, if any, prepared by the Company Plan’s enrolled
actuary, and (iv) the current summary plan descriptions for each
Company Plan.
(c)
Except as
would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect: (a) each Company Plan has been
maintained in accordance with its terms and in compliance with the
applicable provisions of ERISA, the Code and all other applicable
Laws; and (b) all contributions, premiums and benefit payments
under or in connection with the Company Plans that are required to
have been made as of the date hereof in accordance with the terms
of the Company Plans have been timely made. Each Company
Plan that is intended to qualify under Section 401(a) of the Code
has received a favorable determination letter to such effect and no
events have occurred since the date of the most recent
determination letter or application therefor relating to any such
Company Plan that would cause the loss of such qualification which
would reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect. None of the Company
Plans is subject to Title IV of ERISA or Section 412 of the Code or
is a multiemployer plan described in Section 3(37) of ERISA, and
neither the Company nor any its Subsidiaries has ever maintained,
contributed to, participated or agreed to participate in any such
Company Plan, or has or could have any liability under Title IV of
ERISA in respect of any Company Plan. In the past two
years there has been no “reportable event” (as defined
in Section 4043(b) of ERISA and the Pension Benefit Guaranty
Corporation (the “PBGC”) regulations under such
Section) with respect to any Company Plan and no analogous event
under applicable foreign Law. Except as would not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, as of the date of the most recently
completed actuarial valuation of such plan, the “amount of
unfunded benefit liabilities” (as defined in Section
4001(a)(18) of ERISA) of each Company Plan that is an
“employee pension benefit plan” (as described in
Section 3(2) of ERISA) (but excluding from the
definition of “current value” or “assets”
of such plan accrued but unpaid contributions) and did not exceed
zero. None of the Company, its Subsidiaries, or any
fiduciary of any Company Plan, has any material liability with
respect to any transaction in violation of Sections 404 or 406 of
ERISA or any “prohibited transaction,” as defined in
Section 4975(c)(1) of the Code, for which no exemption exists under
Section 408 of ERISA or Section 4975(c)(2) or (d) of the
Code. There are no and have not been in the past two
years any representation questions, strikes, work slowdowns, work
stoppages, lockouts, arbitrations, grievances, unfair labor
practice charges or complaints pending or, to the Knowledge of the
Shareholders, threatened with respect to the Company or any of its
Subsidiaries that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse
Effect. Neither the Company nor any of the Subsidiaries
is a party to any labor or collective bargaining agreement, and, to
the Knowledge of the Shareholders, there has been no attempt to
organize the employees of the Company or any of its Subsidiaries in
the past two years. Except as would not reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect, each of the Company and its Subsidiaries has
complied in all material respects with all Laws relating to
employment, equal employment opportunity, nondiscrimination,
immigration, wages, hours, benefits, collective bargaining the
payment of employment Taxes, occupational safety and health and
plant closings. Neither the execution and delivery of
this Agreement nor the consummation of the Transactions will
(whether alone or in connection with any other event) (x) result in
the forgiveness of indebtedness or the acceleration or creation of
any rights or payment, or increase the amount of any compensation
due, to any current or former employee, director or consultant of
the Company or its Subsidiaries, or (y) result in any material
benefits under any Company Plan; each case excluding any rights,
payments or benefits under any employee benefit plan subject to
ERISA.
(d)
No Company
Plan provides or reflects any liability to provide post-termination
or retiree welfare benefits to any person, except as may be
required by COBRA or other applicable statute, and none of the
Company, its Subsidiaries, or any ERISA Affiliate has ever
represented, promised or contracted (whether in oral or written
form) to any current or former employee, director or consultant of
the Company or any of its Subsidiaries or any of their dependents
that such person would be provided with post-termination or retiree
welfare benefits, except to the extent required by
statute.
(e)
None of the
Company, its Subsidiaries, or any ERISA Affiliate, has made any
payment, is obligated to make any payment, or is a party to any
agreement or agreements that, individually or collectively, provide
for the payment by any of the Company, its Subsidiaries or any
ERISA Affiliate to any employee, director or consultant of the
Company or any of its Subsidiaries of any amount that may be an
“excess parachute payment” under Section 280G of the
Code or non-deductible under Section 280G of the
Code. This Section 3.10 includes the sole and exclusive
representations and warranties relating to employee benefit and
labor matters, including compliance with Laws relating
thereto.
Section
3.11
Environmental
Matters . Except for those matters that would not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, (a) each of the Company and its
Subsidiaries is in compliance with, and holds all Permits required
under, all applicable Environmental Laws, (b) there is no
investigation, suit, claim, action or proceeding relating to or
arising under Environmental Laws that is pending or, to the
Knowledge of the Company, threatened against the Company or any of
its Subsidiaries or any real property owned, operated or leased by
the Company or any of its Subsidiaries, (c) neither the Company nor
any of its Subsidiaries has received any written notice of or
entered into any order, settlement, judgment, injunction or decree
involving uncompleted, outstanding or unresolved obligations,
liabilities or requirements relating to or arising under
Environmental Laws, (d) there have been no Releases at or from any
real property owned, operated or leased by the Company or any of
its Subsidiaries that are reasonably likely to give rise to
liabilities under Environmental Laws; and (e) neither the Company
nor any of its Subsidiaries are liable for any Releases or cleanup
of Hazardous Substances at any properties formerly owned, leased or
operated by the Company or any of its Subsidiaries, or with respect
to any offsite waste disposal location used by the Company or any
of its Subsidiaries. Correct and complete copies of all
environmental reports, including all Phase 1 and Phase 2 reports,
in the possession or control of the Shareholders, the Company or
any of its Subsidiaries have been provided to
Purchaser. This Section 3.11 constitutes the sole and
exclusive representation and warranty of the Shareholders regarding
environmental and health and safety matters, including compliance
with Laws relating thereto.
Section
3.12
Properties
.
(a)
Section
3.12(a) of the Company Disclosure Schedule contains a true and
complete list of all real property owned by the Company or any of
its Subsidiaries (collectively, the “Owned Real
Property”) and, for each Owned Real Property, identifies the
street address thereof. The Shareholders have made
available to the Purchaser correct and complete copies of the most
recent deeds, title reports and title policies in its possession as
of the date hereof with respect to the Owned Real
Property
(b)
Section
3.12(b) of the Company Disclosure Schedule contains a
true and complete list of all material real property leased or
subleased by the Company or any of its Subsidiaries (collectively,
including the improvements thereon, the “Leased Real
Property”), and for each Leased Real Property, identifies the
street address of such Leased Real Property. Correct and
complete copies of all Contracts pursuant to which the Company or
any of its Subsidiaries occupies or uses any material Leased Real
Property (“Real Property Leases”) that have not been
terminated or expired as of the date hereof have been made
available to the Purchaser.
(c)
Except as
would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect, the Company and/or its
Subsidiaries have good and marketable fee simple title to all Owned
Real Property and valid leasehold estates in all Leased Real
Property, in each case free and clear of all Liens, except
Permitted Liens.
(d)
Except as
would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect, other than the Real Property
Leases, none of the Owned Real Property or the Leased Real Property
is subject to any lease, sublease, license or other agreement
granting to any other Person any right to the use, occupancy or
enjoyment of such Owned Real Property or Leased Real Property or
any part thereof.
(e)
Except as
would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect, each Real Property Lease is in
full force and effect and constitutes the valid and legally binding
obligation of the Company or its Subsidiaries, enforceable in
accordance with its terms (subject to the Bankruptcy and Equity
Exception), and there is no material default under any Real
Property Lease either by the Company or its Subsidiaries party
thereto or, to the Knowledge of the Company, by any other party
thereto.
(f)
Except as
would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect, there does not exist any pending
condemnation or eminent domain proceedings that affect any Owned
Real Property or, to the Knowledge of the Company, any such
proceedings that affect any Leased Real Property or, to the
Knowledge of the Company, any threatened condemnation or eminent
domain proceedings that affect any Owned Real Property or Leased
Real Property, and neither the Company nor its Subsidiaries have
received any written notice of the intention of any Governmental
Authority or other Person to take or use any Owned Real Property or
Leased Real Property.
(g)
The Company
and its Subsidiaries have (i) valid leasehold interests in (in the
case of leasehold interests in personal property) or (ii) good
title to (in the case of all other personal property), all of the
personal property used or held for use by them in their respective
businesses, free and clear of all Liens other than Permitted
Liens. All of such tangible personal property is in good
condition and repair, ordinary wear and tear excepted, and is
usable in the ordinary course of business of the Company and its
Subsidiaries as conducted on the date hereof.
(h)
Except as
would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect, the personal property of the
Company and its Subsidiaries (including all tangible and intangible
personal property, whether owned, leased or licensed), together
with the Owned Real Property and the Leased Real Property, include
all of the assets, properties and rights of every type and
description used by the Company or any of its Subsidiaries or their
respective business.
Section
3.13
Insurance
. Section 3.13 of the Company Disclosure Schedule sets
forth a list of all insurance policies carried by or for the
benefit of the Company and its Subsidiaries specifying the insurer,
the nature of coverage, and the date through which coverage is
scheduled to continue pursuant to the terms
thereof. Correct and complete copies of all material
insurance policies have been made available to the
Purchaser. All such insurance policies are, to the
Knowledge of the Company, in full force and effect, all premiums
that are due with respect thereto have been or will be timely paid,
no written notice of cancellation or termination has been received
by the Company with respect to any such policy or other form of
insurance, such policies will not terminate or lapse by reason of
this Agreement and the consummation of the Transactions and the
Company and its Subsidiaries are in material compliance with the
terms of such policies (taken as a whole). None of the
Company or any of its Subsidiaries is in default in any material
respect with respect to their obligations under any such insurance
policies. There is no material claim pending by the
Company or any of its Subsidiaries under any such policy as to
which coverage has been denied or disputed in writing by any
underwriter of such policy.
Section
3.14
Intellectual
Property .
(a)
The Company
and/or each of its Subsidiaries owns or has the right to use all
(i) trademarks, service marks, trade names, Internet domain names,
and all goodwill associated therewith and symbolized thereby, and
registrations and applications therefor, including renewals; (ii)
inventions and discoveries, whether patentable or not, and all
patents, registrations, and applications therefor, including
divisions, continuations, continuations-in-part and reissues; (iii)
published and unpublished works of authorship, whether
copyrightable or not, including computer software programs,
applications, source code and object code, and databases and other
compilations of information, copyrights in and to the foregoing,
including extensions, renewals, and restorations, and registrations
and applications therefor; and (iv) confidential and/or proprietary
information, trade secrets and know-how, including processes,
schematics, technical data, business methods, formulae, drawings,
prototypes, models, designs, customer lists and supplier lists and
any other intellectual property rights ((i) through (iv)
collectively being referred to as “IP Rights”) that are
used or held for use in the conduct of the business of the Company
and its Subsidiaries as currently conducted, except for any such
failures to own or have the right to use that would not reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect. Section 3.14(a) of the Company
Disclosure Schedule sets forth a correct and complete list as of
the date hereof of all of the following IP Rights owned by the
Company or any of its Subsidiaries that are the subject of an
application, filing or registration filed or recorded with a
Governmental Authority: (A) United States and foreign patents and
patent applications, (B) trademarks and service marks, and
applications to register trademarks and service marks, (C) domain
names and (D) copyrights, and applications to register copyrights,
and, in each case, the Company is the sole owner of, and possesses
all right, title and interest in and to, such IP Rights, free and
clear of all Liens (other than Permitted Liens).
(b)
Except as
would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect:
(i)
neither the
Company nor any of its Subsidiaries has received written notice of
any claims (A) that the conduct of the business of the Company and
its Subsidiaries as currently conducted infringes or otherwise
violates any IP Rights of any Person; (B) against the use by the
Company or any of its Subsidiaries of any IP Right used in the
business of the Company or any of its Subsidiaries as currently
conducted; (C) challenging the ownership, validity or
enforceability of any of the IP Rights owned by the Company, any of
its Subsidiaries (collectively, the “Company IP
Rights”) or any IP Rights owned or held by Third Parties
(collectively, the “Third-Party IP Rights”) licensed to
the Company or any of its Subsidiaries or (D) challenging the right
to use of any Third-Party IP Rights held by the Company or any of
its Subsidiaries;
(ii)
(A) to the
Knowledge of the Company, there is no unauthorized use,
infringement or other violation of any of the Company IP Rights or
any Third-Party IP Rights by any Person; and (B) to the Knowledge
of the Company, the conduct of the businesses of the Company and
its Subsidiaries does not infringe, misappropriate or otherwise
violate the IP Rights of any other Person; and
(iii)
all Company
IP Rights and Third-Party IP Rights are valid and
enforceable.
Section
3.15
Contracts
.
(a)
Neither the
Company nor any of its Subsidiaries nor, to the Knowledge of the
Company and solely with respect to clauses (iii) and (xvi), any
Joint Venture is a party to or bound by any: (i) Contract that
purports to limit in any material respect either the type of
business in which the Company or its Subsidiaries may engage or the
manner or locations in which, or the Persons with or in competition
with which, any of them may engage in any business; (ii) Contract
which creates or governs a partnership, limited liability company,
joint venture, or material alliance, joint development or similar
material arrangement; (iii) indenture, mortgage, currency exchange,
commodities or other hedging arrangement, credit agreement, loan
agreement, guarantee, other contract for the borrowing of money,
note or other evidence of Indebtedness or Contract relating to
(including any guarantee of) Indebtedness; (iv) employment,
severance or change-in-control Contract with any director, officer
or key employee; (v) customer Contract (other than a Government
Contract) (A) which provides for total funded value to one or more
of the Company or its Subsidiaries in excess of $5,000,000 or (B)
for the provision of GLOBALink services which is expected to
provide for payments to one or more of the Company or its
Subsidiaries in excess of $500,000 in the twelve (12)- month period
ending December 31, 2007; (vi) supplier Contract which provided for
payments by one or more of the Company or its Subsidiaries (A) in
excess of $5,000,000 in the aggregate for the twelve (12) month
period ended December 31, 2006 or (B) in excess of $1,400,000 in
the aggregate for the five (5)-month period ended May 31, 2007;
(vii) Contract for the lease of real or personal property in which
the amount of payments which the Company or any of its Subsidiaries
is required to make on an annual basis exceeds $1,000,000; (viii)
material distribution, franchise, license, sales commission,
consulting, agency, marketing or advertising Contract that involves
aggregate payments in excess of $5,000,000; (ix) Contract with
“take or pay” provisions, or “requirements”
provisions committing the Company or any of its Subsidiaries to
provide the quantity of goods or services required by another
Person; (x) Contract with any Shareholder or any Affiliate of the
Company (other than a Subsidiary of the Company) or any
Shareholders; (xi) license for the use of any material IP
Rights; (xii) Contract (A) providing for the purchase or sale of
any business, business unit or Person for consideration in excess
of $1,000,000 and (B) under which the Company or any of its
Subsidiaries has any continuing material obligation;
(xiii) Contract for capital expenditures in excess of
$2,000,000 in the aggregate; (xiv) collective bargaining agreement;
(xv) Government Contract with a funded value in excess of
$5,000,000; or (xvi) (A) guarantee by the Company or any of its
Subsidiaries of the obligations of any Person other than the
Company or any of its Subsidiaries, or (B) Contract guaranteed by a
guarantee described in clause (A); provided, that for the purposes
of determining whether any Contract meets a quantitative or other
materiality threshold set forth in this sentence, such Contract
shall be considered collectively with any series of substantially
related Contracts with the same party. Each such
Contract described in clauses (i)-(xvii), and each Contract
described in Appendix E to Section 3.15 of the Company Disclosure
Schedule, is referred to herein as a “Material
Contract”.
(b)
All
Material Contracts are legal, valid, binding and enforceable in
accordance with their respective terms with respect to the Company
and its Subsidiaries and, to the Knowledge of the Company, each
other party to such Contracts. Except as would not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, (i) there is no existing default or breach
of the Company or any of its Subsidiaries under any Material
Contract to which the Company or a Subsidiary is a party (or event
or condition that, with notice or lapse of time or both would
constitute a default or breach), (ii) to the Knowledge of the
Company, there is no such default or breach (or event or condition
that, with notice or lapse of time or both, would constitute a
default or breach) with respect to any third party to any such
Contract, and (iii) none of the Company or any of its Subsidiaries
has received any written notice or claim of default under any
Material Contract. Except in the case of (1) any
Government Contract (A) the terms of which may not be disclosed to
the Purchaser due to a required security clearance or Federal
Acquisition Regulations and (B) that is described on Schedule
3.15(b) as not having been provided, and (2) Doha iMuse between
Overseas Bechtel, Inc., the Company and the other parties thereto
(for which a correct and complete summary of the material terms has
been provided to the Purchaser), correct and complete copies of all
Material Contracts, including all amendments and supplements
thereto (other than any task, purchase or delivery order pursuant
to such Material Contract for products or services with an
aggregate price per order equal to or less than $5,000,000), have
been made available to Purchaser or its
representatives.
(c)
Notwithstanding
the foregoing, no employment agreement need be set forth in the
Company Disclosure Schedule or disclosed to the Purchaser, in each
case pursuant to this Section 3.15, if such employment agreement
(i) does not relate to an employee working in the United States,
(ii) does not relate to an employee who is also a director or
officer, (iii) is in all material respects in a form that is
identified in Section 3.15 of the Company Disclosure Schedule and a
correct and complete copy of which has been made available to the
Purchaser and its representatives, and (iv) does not provide any
severance or notice period in excess of 90 days (other than as
required by applicable Laws).
Section
3.16
Affiliate
Matters . No Shareholder, officer or director of the
Company or of any of its Subsidiaries (a) is a party to any
Contract with, or relating to, the Company, a Subsidiary or their
respective businesses, or (b) has an interest in any material asset
(whether real, personal or intangible) of the Company or a
Subsidiary.
Section
3.17
Brokers
and Other Advisors .
(a)
Except for
Goldman, Sachs & Co. and Evercore Group L.L.C. the fees and
expenses of which paid or payable after May 31, 2007 will be paid
or reimbursed by the Shareholders, no broker, investment banker,
financial advisor or other Person is entitled to any
broker’s, finder’s, financial advisor’s or other
similar fee or commission, or the reimbursement of expenses, in
connection with the Transactions based upon arrangements made by or
on behalf of the Shareholders, the Company or any of its
Subsidiaries. A complete and correct copy of the
agreements between Goldman, Sachs & Co. and the Company and
Evercore Group L.L.C. and the Special Committee relating to the
Transactions have been made available to the
Purchaser.
(b)
The Special
Committee has received the opinion of Evercore Group L.L.C. to the
effect that, as of the date of this Agreement, the aggregate
consideration to be received in connection with the Transactions is
fair to the Company’s stockholders from a financial point of
view. The Board of Directors has received the opinion of
Goldman, Sachs & Co. to the effect that, as of the date of this
Agreement, the consideration to be received pursuant to Section 1.2
and Section 5.9 of this Agreement is fair in the aggregate to the
Company’s stockholders from a financial point of
view.
Section
3.18
Relations
with Governments .
(a)
Except as
would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect, neither the Company nor any of
its Subsidiaries nor, to the Knowledge of the Company, any Joint
Venture nor any of their respective officers, directors, employees,
agents or representatives acting on their behalf, has (i) used any
funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to political activity, (ii) made any
unlawful payment or unlawfully offered anything of value to foreign
or domestic government officials or employees or to foreign or
domestic political parties or campaigns, or (iii) violated any
applicable export control, money laundering or anti-terrorism law
or regulation, nor have any of them otherwise taken any action
which would cause the Company or any of its Subsidiaries to be in
violation of the Foreign Corrupt Practices Act of 1977, as amended
(the “FCPA”), OFAC Laws and Regulations, the Arms
Export Control Act, the International Traffic in Arms Regulations,
the Foreign Trade Statistics Regulations or any applicable Law of
similar effect.
(b)
Except as
would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect, neither the Company nor any of
its Subsidiaries nor, to the Knowledge of the Company, any Joint
Venture nor any of their respective officers, directors, employees,
agents or representatives acting on their behalf, has made,
directly or indirectly, any offer, payment or promise to pay any
money, or to give any gift or anything else of value to any officer
or employee of any Governmental Authority or any department, agency
or instrumentality (including any state-owned enterprise, operating
in a commercial capacity or otherwise) thereof, or of a public
international organization, or any person acting in an official
capacity or on behalf of any such Governmental Authority,
department, agency or instrumentality (including any state-owned
enterprise, operating in a commercial capacity or otherwise) or
for, or on the behalf of any such public international organization
or any political party or official thereof or any candidate for
political office, for the purpose of influencing an official act or
decision of that person, inducing that person to omit to do any act
in violation of his or her lawful duty, securing any improper
advantage, or inducing that person to use his influence with such a
Governmental Authority or instrumentality to affect or influence
any government act or decision, in order to assist the Company, any
of its Subsidiaries or any Joint Venture in obtaining or retaining
business.
(c)
Except as
would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect, neither the Company nor any of
its Subsidiaries nor, to the Knowledge of the Company, any Joint
Venture nor any of their respective officers, directors, employees,
agents or representatives acting on their behalf, is or is acting
for or on behalf of a Prohibited Person, and no Prohibited Person
is entitled to or will receive any portion of the proceeds from
this Transaction.
(d)
Except as
would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect, the Company, each of its
Subsidiaries and, to the Knowledge of the Company, each Joint
Venture has accurately prepared and maintained all records as
required by applicable laws with respect to its business relating
to the importation of articles.
(e)
Except as
would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect, neither the Company nor any of
its Subsidiaries nor, to the Knowledge of the Company, any Joint
Venture nor any of their respective officers, directors, employees,
agents or representatives acting on their behalf, has received
written notice of any audits, inquiries, investigations, claims,
notices or demands for duties, fines, penalties, seizures,
forfeitures, product redelivery, or liquidated damages by any
Governmental Authority arising out of any importation by or for the
Company, any such Subsidiary or Joint Venture or any such
representative.
Section
3.19
Customers
and Suppliers .
(a)
Section
3.19(a) of the Company Disclosure Schedule is a complete and
correct list of the twenty (20) largest suppliers to the Company,
and its Subsidiaries by aggregate dollar value of purchases during
each of the most recently completed fiscal year and the five-month
period ended May 31, 2007. Since January 1, 2007, except
as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, no such supplier has
canceled or otherwise terminated or materially and adversely
modified, or to the Knowledge of the Company, threatened to cancel
or otherwise terminate or materially and adversely modify, its
relationship with the Company or any of its
Subsidiaries. To the Knowledge of the Company, neither
the Company nor any of its Subsidiaries has received any notice
that any such supplier intends to cancel or otherwise terminate or
materially and adversely modify its relationship with the Company
or any of its Subsidiaries on account of the Transactions or
otherwise, except for such modifications or terminations as would
not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.
(b)
Section
3.19(b) of the Company Disclosure Schedule is a complete and
correct list of the twenty (20) largest customers of the Company
and its Subsidiaries by aggregate dollar value of sales during each
of the most recently completed fiscal year and the five-month
period ended May 31, 2007. Since January 1, 2007, except
as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, no such customer has
canceled or otherwise terminated or materially and adversely
modified, or to the Knowledge of the Company, threatened in writing
to cancel or otherwise terminate or materially and adversely
modify, its relationship with the Company or any of its
Subsidiaries. To the Knowledge of the Company neither
the Company nor any of its Subsidiaries has received any notice
that any such customer intends to cancel or otherwise terminate or
materially and adversely modify its relationship with the Company
or any of its Subsidiaries on account of the Transactions or
otherwise, except for such modifications or terminations as would
not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.
Section
3.20
Government
Contracts . Except as would not reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect:
(a)
during the
past three (3) years no material quantities of products delivered
or services performed by the Company or any of its Subsidiaries
under any Government Contract have been rejected by any
Governmental Authority, or prime contractor or subcontractor (at
any tier) as not complying with contract specifications or
requirements, and no termination for convenience, termination for
default, cure notice or show cause notice has been issued and
remains unresolved;
(b)
no material
amount due to the Company or any of its Subsidiaries has been
withheld or set off by or on behalf of a Governmental Authority, or
prime contractor or subcontractor (at any tier) with respect to any
Government Contract;
(c)
the Company
and each of its Subsidiaries is in compliance with all obligations
specified in the National Industrial Security Program Operating
Manual, DOD 5220.22-M (January 1995);
(d)
to the
Knowledge of the Company, no employee of the Company, or any of its
Subsidiaries is (or during the last eighteen (18) months has been)
under any administrative, civil or criminal investigation or
indictment by any Governmental Authority with respect to the
conduct of the business of the Company or any of its
Subsidiaries;
(e)
to the
Knowledge of the Company, there is no pending material
investigation by a Governmental Authority of the Company, any of
its Subsidiaries, or any of its respective officers, employees or
representatives, nor within the last three (3) years has there been
any material investigation by a Governmental Authority of the
Company or any of its Subsidiaries, or any of its respective
officers, employees or representatives resulting in any finding
with respect to any alleged irregularity, misstatement or omission
arising under or relating to any Government Contract or bid (other
than routine audits);
(f)
during the
last three (3) years, except as set forth on Section 3.20 of the
Disclosure Schedule, neither the Company nor any of its
Subsidiaries has made any voluntary disclosure in writing to any
Governmental Authority with respect to any material alleged
irregularity, misstatement or omission arising under or relating to
any Government Contract or bid;
(g)
since
January 1, 2001 neither the Company nor any Subsidiary has been
suspended or debarred from bidding on contracts or subcontracts for
or with any Governmental Authority; and
(h)
no
suspension or debarment actions with respect any Government
Contract have been commenced or, to the Knowledge of the Company,
threatened in writing against the Company or any of its
Subsidiaries or, to the Knowledge of the Company, any of their
respective officers, directors or employees.
ARTICLE
IV.
REPRESENTATIONS
AND WARRANTIES
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