SXI Standex International Corp

---

---

---

Delaware		1-7233	31-0596149
(State or other jurisdiction of		(Commission	(IRS Employer
incorporation or organization)		File Number)	Identification No.)

23 Keewaydin Drive, Salem, New Hampshire				03079
(Address of principal executive offices)				(Zip Code)

Registrant’s telephone number, including area code: (603) 893-9701
Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $1.50 Per Share	SXI	New York Stock Exchange

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

---

(a)	Financial statements of business acquired.

(b)	Pro forma financial information.

(c)

Exhibits.

Exhibit No.		Description
10.1*		Securities Purchase Agreement dated as of October 28, 2024, by and among the Owners listed therein, Bolt Founders, Inc., Amran LLC, Seller Representative (as defined therein) and Standex International Corporation
10.2*		Securities Purchase Agreement dated as of October 28, 2024, by and among Narayan Powertech Private Limited, the persons listed in Exhibit D thereto, Mold-Tech Singapore Pte. Ltd. and Standex International Corporation
10.3*		Shareholders’ Agreement dated as of October 28, 2024 by and amongst Narayan Powertech Private Limited, and Mold-Tech Singapore Pte. Ltd., and Standex International Corporation and the Minority Shareholders listed therein
10.4*		Credit Agreement dated as of October 28, 2024 among Standex International Corporation, each lender from time to time party thereto, and Citizens Bank, N.A., as Administrative Agent, Lead Arranger and Book Runner
10.5		First Amendment dated as of October 28, 2024 by and among Standex International Corporation, Citizens Bank, N.A., a national banking association, as Administrative Agent and Lender, and the other Lenders party thereto
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

/s/ Ademir Sarcevic
Ademir Sarcevic Chief Financial Officer   Date: October 30, 2024   Signing on behalf of the registrant and as principal financial officer

Exhibit 10.1

 

Execution Version

 

 

 

 

SECURITIES PURCHASE AGREEMENT

dated as of October 28, 2024

by and among

OWNERS,

 

BOLT FOUNDERS, INC.,

 

AMRAN, LLC,

 

SELLER REPRESENTATIVE (AS DEFINED HEREIN)

 

and

 

STANDEX INTERNATIONAL CORPORATION

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS AND DEFINITIONAL PROVISIONS		1
Section 1.1	Defined Terms	1
Section 1.2	Other Defined Terms	21
Section 1.3	Other Definitional Provisions	21
Section 1.4	Captions	22
ARTICLE II PURCHASE AND SALE		22
Section 2.1	Purchase and Sale	22
Section 2.2	Closing	22
Section 2.3	Purchase Price	22
Section 2.4	Payment and Issuance at the Closing	22
Section 2.5	Closing Statement.	23
Section 2.6	Post-Closing Adjustment.	24
Section 2.7	Closing Deliverables	27
ARTICLE III REPRESENTATIONS AND WARRANTIES RELATED TO THE SELLING PARTIES		29
Section 3.1	Organization	29
Section 3.2	Authorization; Enforceability; Absence of Conflicts	29
Section 3.3	Required Consents	30
Section 3.4	Litigation	30
Section 3.5	Accredited Investor	30
Section 3.6	No Other Representations	31
ARTICLE IV REPRESENTATIONS AND WARRANTIES RELATED TO THE COMPANY AND AMTRAN		31
Section 4.1	Organization; Power; Authorization.	31
Section 4.2	Required Consents	32
Section 4.3	Capitalization	32
Section 4.4	Subsidiary	33
Section 4.5	Assets.	33
Section 4.6	Real Property.	33
Section 4.7	Transactions with Affiliates	34
Section 4.8	Litigation	35
Section 4.9	Absence of Certain Changes	35
Section 4.10	Compliance with Law	38
Section 4.11	Permits	38
Section 4.12	Certain Business Practices	39
Section 4.13	Material Agreements	40
Section 4.14	Employee Matters	43
Section 4.15	Financial Information	47
Section 4.16	Environmental Matters	49
Section 4.17	Taxes	50
Section 4.18	Intellectual Property	54
Section 4.19	Privacy and Information Security	56

 

 

Section 4.20	No Undisclosed Liabilities	56
Section 4.21	Insurance Policies	56
Section 4.22	Bank Relations; Powers of Attorneys.	57
Section 4.23	Brokers	57
Section 4.24	Customers and Vendors; Warranties	57
Section 4.25	COVID-19; PPP Loans	58
Section 4.26	Products	59
Section 4.27	Government Contracts	60
Section 4.28	No Other Representations	61
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER		62
Section 5.1	Organization; Power	62
Section 5.2	Authorization; Enforceability; Absence of Conflicts; Required Consents	62
Section 5.3	SEC Filings	63
Section 5.4	Litigation	63
Section 5.5	Accredited Investor	63
Section 5.6	Sufficiency of Funds	64
Section 5.7	Buyer Common Stock	64
Section 5.8	Exempt from Registration	64
Section 5.9	Acquisition of Securities for Investment	64
Section 5.10	Brokers	64
ARTICLE VI COVENANTS		65
Section 6.1	Records and Access	65
Section 6.2	Public Announcement	65
Section 6.3	Non-Competition; Non-Solicitation; and Non-Disclosure	66
Section 6.4	Tax Matters.	67
Section 6.5	Further Assurances	72
Section 6.6	Retention of Books and Records	72
Section 6.7	Withholding Taxes	72
Section 6.8	Employee Matters.	72
Section 6.9	Indemnification of Managers, Directors and Officers of the Company.	73
Section 6.10	Certain Waivers and Releases	74
Section 6.11	Issuance of Stock Consideration; Lock-Up Restrictions; Removal of Restrictions(s)	74
Section 6.12	Permitted Transfers	76
Section 6.13	Rule 144 Compliance	76
ARTICLE VII SURVIVAL; INDEMNIFICATION;  LIMITATIONS ON INDEMNIFICATION AND CLAIMS		76
Section 7.1	Survival	76
Section 7.2	Indemnification of Buyer Indemnitees	77
Section 7.3	Indemnification of Seller Indemnitees	77
Section 7.4	Conditions of Indemnification	78
Section 7.5	Payments by an Indemnifying Party	80
Section 7.6	Procedures for Direct Claims	80

 

 

Section 7.7	Certain Limitations on Indemnification for Third-Party Claims and Direct Claims	81
Section 7.8	Sole and Exclusive Remedy	82
Section 7.9	Disclaimer of Other Representations and Warranties	82
Section 7.10	No Multiple Recoveries	83
Section 7.11	No Subrogation	83
Section 7.12	Mitigation	83
Section 7.13	Indemnification Escrow Provisions	83
Section 7.14	Adjustment to Purchase Price	84
ARTICLE VIII GENERAL PROVISIONS		84
Section 8.1	Amendment and Modification	84
Section 8.2	Entire Agreement; Assignment	84
Section 8.3	Severability	84
Section 8.4	Expenses	85
Section 8.5	Waiver	85
Section 8.6	Counterparts	85
Section 8.7	Governing Law	85
Section 8.8	Dispute Resolution	86
Section 8.9	Waiver of Jury Trial	87
Section 8.10	Notices and Addresses	87
Section 8.11	No Third-Party Beneficiaries	88
Section 8.12	Negotiated Transaction	88
Section 8.13	Brokers and Agents	88
Section 8.14	Time of the Essence	88
Section 8.15	Transaction Privilege	89
Section 8.16	Disclosure Schedules	90
Section 8.17	Specific Performance	91
Section 8.18	Seller Representative	91

 

 

 

EXHIBITS:

 

Exhibit A – Accounting Principles

 

Exhibit B – Illustrative Working Capital Calculations

 

Exhibit C – Closing Statement

 

Exhibit D – Sample Purchase Price Allocation Methodology

 

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made as of October 28, 2024 by and among Bhargav Shah, an individual resident of the State of Texas (“Owner 1”), Scott McCloskey, an individual resident of the State of Texas (“Owner 2”), Kevin Coulter, an individual resident of the State of Texas (“Owner 3”), Tomas Palm, an individual resident of the State of Texas (“Owner 4”), and Bhargav Shah, in his capacity as trustee of the ISHANYA 2023 FAMILY TRUST (“Owner 5” and together with Owner 1, Owner 2, Owner 3, and Owner 4, collectively, the “Owners”), Bolt Founders, Inc., a Texas corporation (“Seller” and together with the Owners, the “Selling Parties”), Amran, LLC, a Texas limited liability company (the “Company”), Bhargav Shah as Seller Representative, and Standex International Corporation, a Delaware corporation (“Buyer”). The Selling Parties, the Company and Buyer are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, the Owners own beneficially and of record 100% of the issued and outstanding capital stock of Seller;

 

WHEREAS, Seller owns beneficially and of record 100% of the issued and outstanding units of membership interest in the Company (the “Securities”);

 

WHEREAS, the Company owns forty percent (40%) of the issued and outstanding Capital Stock of Amtran Magnetics Private Limited, a private company incorporated under the laws of India, having corporate identification number U31501GJ2013PTC077593 (“Amtran”); and

 

WHEREAS, upon the terms and subject to the conditions contained in this Agreement, Seller desires to sell, and Buyer desires to purchase, the Securities.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, the Parties agree as follows:

 

ARTICLE I

DEFINITIONS AND DEFINITIONAL PROVISIONS

 

Section 1.1    Defined Terms. The following terms have the meanings assigned to them in this ‎Section 1.1.

 

“Accounting Principles” means the accounting principles set forth on Exhibit A, applied in a manner consistent with the policies, practices and procedures as are illustrated in Exhibit B.

 

“Acquired Business” means the businesses of the Company and Amtran.

 

“Adjustment Escrow” has the meaning specified in Section 2.4(a)(v).

 

“Affiliate” means, as to any specified Person, any other Person that, directly or indirectly through one or more intermediaries or otherwise, controls, is controlled by or is under common control with the specified Person. As used in this definition, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person (whether through ownership of Capital Stock of that Person, by contract or otherwise), and the terms “controlled” and “controlling” have the meanings correlative to the foregoing. For the avoidance of doubt, the Company and Amtran will be Affiliates of Seller only before the Closing and will be Affiliates of Buyer only after the Closing.

 

 

“Affiliated Group” means an affiliated group as defined in Section 1504 of the Code (or analogous affiliated, combined, consolidated, unitary or similar group defined under applicable state, local or foreign income Tax Law).

 

“Agreement” has the meaning specified in the preamble and means this Agreement, including the schedules, documents, agreements and any exhibits attached hereto, referenced herein or delivered in accordance herewith.

 

“Amtran” has the meaning specified in the Recitals to this Agreement.

 

“Amtran Closing Cash” means the aggregate amount of cash and cash equivalent items of Amtran (net of bank overdrafts and negative cash balances in Amtran bank accounts), including, (a) cash on deposit, checking and other bank account balances, in each case, with a bank or other financial institution (including any checks, drafts, wires deposited or made for the accounts of such Person prior to such time but not yet reflected in the accounts of such Person as of such time (provided that credit for any checks, drafts or wire that are dishonored shall be excluded)), net of outstanding checks, drafts and outgoing wires and (b) marketable securities, certificates of deposits and other short term investments (in each case, to the extent convertible to cash within 30 days), net of any breakage costs, liquidation payments or early withdrawal fees or penalties that would be payable upon the liquidation at Closing of any such marketable securities, certificates of deposit and other short term investments. Notwithstanding anything to the contrary contained herein, “cash and cash equivalents” of Amtran in the context of this definition of “Amtran Closing Cash” shall exclude (1) Restricted Cash, and (2) amounts that are included in Closing Working Capital.

 

“Amtran Closing Working Capital” means: (i) the sum of the accounts receivable and inventory of Amtran (excluding Amtran Closing Cash, income Tax Assets, fraud related receivables, deferred Tax Assets and other current assets) immediately before the Effective Time minus (ii) the accounts payable of Amtran (excluding deferred Tax Liabilities, amounts included in the calculation of Amtran Indebtedness and Transaction Costs, fraud related reserves, operating lease Liabilities and other current Liabilities) immediately before the Effective Time, in each case determined in accordance with the Accounting Principles applicable to Amtran and solely reflecting the categories of current assets and current Liabilities included in the calculation of Closing Working Capital for Amtran set forth on Exhibit B.

 

“Amtran Financial Statements” has the meaning specified in ‎Section 4.15(a).

 

 

“Amtran Indebtedness” means, without duplication, (i) any Liability of Amtran (A) for borrowed money, (B) arising out of any extension of credit to or for the account of Amtran (including reimbursement or payment obligations with respect to surety bonds, letters of credit, bankers’ acceptances and similar instruments) or for the deferred purchase price of property or other assets or services or arising under conditional sale or other title retention agreements, including earnouts, payments under non-compete agreements and seller notes, any purchase price adjustment, escrow, holdback or similar payments, whether contingent or not, in each case other than trade payables included in the definition of Amtran Closing Working Capital, (C) evidenced by notes, bonds, debentures or similar instruments, (D) in respect of leases of (or other agreements conveying the right to use) property or other assets which Indian Accounting Standards requires to be classified and accounted for as capital leases or (E) in respect of interest rate swap, cap or collar agreements or similar arrangements providing for the mitigation of Amtran’s interest rate risks either generally or under specific contingencies between Amtran and any other Person, (F) for accrued and unpaid Specified Income Taxes, (G) secured by a purchase money mortgage or other Lien, (H) for obligations of such Person with respect to unfunded or underfunded Employee Plans, and (I) any declared and unpaid dividends and other distributions owed to any Selling Party; and (ii) any Liability of others of the type described in the preceding clause (i) in respect of which Amtran has incurred, assumed or acquired a Liability by means of a guaranty.

 

“Amtran Knowledge Parties” means Chirag Shah and Sandip Shah.

 

“Amtran Target Working Capital” means $3,415,000.00.

 

“Anti-Corruption Laws” has the meaning specified in Section 4.12(a).

 

“Anti-Money Laundering Laws” has the meaning specified in Section 4.12(c).

 

“Applicable Law” means, with respect to any Person, any transnational, domestic or foreign (including India), federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated, enforced or applied by a Governmental Authority that is binding upon or applicable to such Person or its properties, as amended unless expressly specified otherwise.

 

“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in Houston, Texas are authorized or required by Applicable Law to close.

 

“Buyer” has the meaning specified in the preamble to this Agreement.

 

“Buyer’s Black-Out Policies” has the meaning specified in Section 6.11.

 

“Buyer 401(k) Plan” means the 401(k) plan sponsored by Buyer or its Affiliates in which Seller’s Continuing Employees will be entitled to participate.

 

“Buyer Common Stock Price” means $177.87.

 

 

“Buyer Fundamental Representations” means the representations and warranties of Buyer contained in Section 5.1, Section 5.2(a), Section 5.2(b), Section 5.5, Section 5.9 and Section 5.10.

 

“Buyer Indemnified Loss” has the meaning specified in Section 7.2.

 

“Buyer Indemnitees” means Buyer and its Affiliates (including, after giving effect to the Closing, the Company and its Affiliates), and their respective directors, officers and employees.

 

“Capital Stock” means, with respect to: (i) any corporation, any share, or any depositary receipt or other certificate representing any share, of an equity ownership interest in that corporation; and (ii) any other Entity, any share, membership, partnership or other percentage interest, unit of participation or other equivalent (however designated) of an equity interest in that Entity.

 

“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act (including any changes in state or local law that are analogous to provisions of the CARES Act or adopted to conform to the CARES Act) and any legislative or regulatory guidance issued pursuant thereto.

 

“Cash Consideration” means (a) One Hundred Fifty Three Million Five Hundred Ten Thousand Dollars and No/100ths ($153,510,000.00), plus the Estimated Adjustment Amount (if it is a positive number) or minus the Estimated Adjustment Amount (if it is a negative number).

 

“Chamberlain Hrdlicka” has the meaning specified in Section 8.15(a).

 

“Claim” means, as asserted (i) against any specified Person, any claim, demand or Proceeding made or pending against the specified Person for Damages to any other Person, or (ii) by the specified Person, any claim, demand or Proceeding of the specified Person made or pending against any other Person for Damages to the specified Person.

 

“Claim Notice” has the meaning specified in Section 7.4(b).

 

“Closing” has the meaning specified in Section 2.2.

 

“Closing Adjustment Shortfall Amount” has the meaning specified in Section 2.6(h).

 

“Closing Adjustment Surplus Amount” has the meaning specified in Section 2.6(h).

 

“Closing Cash” means, without duplication, the aggregate amount of Company Closing Cash and the Company Portion of Amtran Closing Cash as of the Effective Time, for the avoidance of doubt excluding the amounts specified in the footnotes to the Closing Statement.

 

“Closing Date” has the meaning specified in Section 2.2.

 

 

“Closing Indebtedness” means, without duplication, the aggregate amount of Company Indebtedness and the Company Portion of Amtran Indebtedness as of the Effective Time.

 

“Closing Stock Consideration Value” means an amount equal to Twenty Seven Million Ninety Thousand and No/100ths ($27,090,000.00).

 

“Closing Working Capital” means, without duplication, the aggregate of Company Closing Working Capital and the Company Portion of Amtran Closing Working Capital as of the Effective Time.

 

“COBRA” has the meaning specified in Section 4.14(g).

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Company” has the meaning specified in the preamble to this Agreement.

 

“Company 401(k) Plan” means the 401(k) plan sponsored by Company or its Affiliates in which the Company’s Continuing Employees participate.

 

“Company Closing Cash” means the aggregate amount of cash and cash equivalent items of the Company (net of bank overdrafts and negative cash balances in Company bank accounts), including, (a) cash on deposit, checking and other bank account balances, in each case, with a bank or other financial institution (including any checks, drafts, wires deposited or made for the accounts of such Person prior to such time but not yet reflected in the accounts of such Person as of such time (provided that credit for any checks, drafts or wire that are dishonored shall be excluded)), net of outstanding checks, drafts and outgoing wires, (b) marketable securities, certificates of deposits and other short term investments (in each case, to the extent convertible to cash within 30 days), net of any breakage costs, liquidation payments or early withdrawal fees or penalties that would be payable upon the liquidation at Closing of any such marketable securities, certificates of deposit and other short term investments, and (c) an amount equal to $25,265 for the security deposits made with respect to the Real Property Leases set forth in Section 4.6(b) of the Disclosure Schedules. Notwithstanding anything to the contrary contained herein, “cash and cash equivalents” of the Company in the context of the definition of “Company Closing Cash” shall exclude (1) Restricted Cash (other than security deposits in the amount of to $25,265 for the Real Property Leases set forth in Section 4.6(b) of the Disclosure Schedules), and (2) amounts that are included in Company Closing Working Capital.

 

“Company Closing Working Capital” means: (i) the sum of the accounts receivable and inventory of the Company (excluding Closing Cash, income Tax Assets, fraud related receivables, deferred Tax Assets and other current assets) immediately before the Effective Time minus (ii) the accounts payable of the Company (excluding deferred Tax Liabilities, amounts included in the calculation of Company Indebtedness, Transaction Costs, fraud related reserves, operating lease Liabilities and other current Liabilities) immediately before the Effective Time, in each case determined in accordance with the Accounting Principles applicable to the Company and solely reflecting the categories of current assets and current Liabilities included in the calculation of Closing Working Capital for the Company as set forth on Exhibit B.

 

 

“Company Data” means all data contained in the systems, databases, files or other records of the Company and all other information and data compilations used by the Company, whether or not in electronic form, including Personal Data.

 

“Company Employees” means the employees of the Company and Amtran, as of the date of this Agreement.

 

“Company Financial Statements” has the meaning specified in ‎Section 4.15(a).

 

“Company Indebtedness” means, without duplication, (i) any Liability of the Company (A) for borrowed money, (B) arising out of any extension of credit to or for the account of the Company (including reimbursement or payment obligations with respect to surety bonds, letters of credit, bankers’ acceptances and similar instruments) or for the deferred purchase price of property or other assets or services or arising under conditional sale or other title retention agreements, including earnouts, payments under non-compete agreements and seller notes, any purchase price adjustment, escrow, holdback or similar payments, whether contingent or not, in each case, other than trade payables included in the definition of Company Closing Working Capital, (C) evidenced by notes, bonds, debentures or similar instruments, (D) in respect of leases of (or other agreements conveying the right to use) property or other assets which US GAAP requires to be classified and accounted for as capital leases, (E) in respect of interest rate swap, cap or collar agreements or similar arrangements providing for the mitigation of the Company’s interest rate risks either generally or under specific contingencies between the Company and any other Person, (F) for accrued and unpaid Specified Income Taxes, (G) secured by a purchase money mortgage or other Lien, (H) for obligations of such Person with respect to unfunded or underfunded Employee Plans, and (I) any declared and unpaid dividends and other distributions owed to any Selling Party; and (ii) any Liability of others of the type described in the preceding clause (i) in respect of which the Company has incurred, assumed or acquired a Liability by means of a guaranty.

 

“Company Intellectual Property” has the meaning specified in Section 4.18(c).

 

“Company Portion” shall mean 40% of Amtran Closing Cash, Amtran Closing Working Capital, Amtran Target Working Capital, Amtran Indebtedness at Closing, or Transaction Costs of Amtran, as applicable.

 

“Company Target Working Capital” means $11,372,000.00.

 

“Confidential Information” shall mean confidential and proprietary information that belongs to, or is known or possessed by, the Company or Amtran, including information relating to financial statements, clients, customers, potential clients or customers, employees, suppliers, equipment, designs, drawings, programs, strategies, analyses, profit margins, sales, methods of operation, plans, products, technologies, materials, trade secrets, strategies, prospects or other proprietary information. Notwithstanding the foregoing, the term “Confidential Information” shall not include (i) any information known by any Selling Party that now or hereafter is in the public domain by means other than disclosure by any Selling Party or any Affiliate or representative thereof in violation of this Agreement or is lawfully acquired by any Selling Party or any Affiliate or representatives thereof after the Closing from sources which, to the Selling Parties’ knowledge, are not under any contractual obligation concerning disclosure of such information.

 

 

“Consent” means any consent, release, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Authority or other Person, including any Permit, or, with respect to any equity interests, the waiver of any right of first refusal or similar Lien.

 

“Continuing Employees” means all of the then-current Company Employees (including such persons on disability or leave of absence, whether paid or unpaid).

 

“Contracts” means any contracts, commitments, purchase orders, mortgages, instruments, indentures, sales orders, licenses, leases and other agreements or arrangements, whether written or oral, to which the Company or Amtran is a party or by which the Company or Amtran or any of their respective assets are bound or subject.

 

“Contribution” means the Owners’ contribution of 100% of the issued and outstanding equity interests of the Company to Seller immediately following formation of Seller.

 

“COVID-19” means the infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) and known as “COVID-19”.

 

“COVID-19 Pandemic” means the pandemic caused by COVID-19 which, as of the date hereof, has spread throughout the world and has resulted in Governmental Authorities implementing numerous measures to try to contain COVID-19, including travel bans and restrictions, quarantines, shelter in place orders and shutdowns.

 

“Customs Laws” has the meaning specified in Section 4.12(d).

 

“Damage” or “Damages” means any Liabilities, royalty payments, demands, claims, actions, causes of action, assessments, awards, losses, costs, damages, deficiencies, judgments, Taxes, fines or expenses, including interest, penalties, reasonable fees and expenses of attorneys and accountants and reasonable amounts paid in investigation, defense or settlement of any of the foregoing; provided, however, that “Damages” shall not include exemplary, punitive, consequential, incidental, special, multiple, or indirect damages, or loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement or any Transaction Document (collectively, “Excluded Damages”), except to the extent actually awarded to a Governmental Authority or other third-party. Notwithstanding the foregoing, Excluded Damages shall not include diminution in value of Amran or Amtran to the extent that the underlying Direct Claim (i) has a material and continuing impact on the profitability of Amran or Amtran, as the case may be and on a year-over-year basis, subject to Buyer’s obligations to mitigate pursuant to Section 7.12 and pursuant to Applicable Laws, (ii) has resulted from a material breach of the representations and warranties made with respect to the May 31 P&Ls set forth in Section 4.15(a) or Section 4.15(b) (Financial Information), (iii) is unrelated to the matter disclosed on Section 7.2 of the Disclosure Schedules, (iv) is asserted under Section 7.2 no later than the date the Post-Closing Statement is due pursuant to Section 2.6(a), and (v) does not exceed in the aggregate for all such diminution in value Damages thirty percent (30%) of the Damages Cap.

 

 

“Damages Cap” means $15,351,000.00

 

“De Minimis Amount” means $63,210.

 

“Direct Claims” has the meaning specified in Section 7.6(a).

 

“Disclosure Schedules” means the schedules, dated as of the date hereof, delivered by Seller to Buyer in connection with this Agreement.

 

“Effective Time” has the meaning specified in Section 2.2.

 

“Employee Plan” means all employee benefit or compensation agreements, arrangements, plans, policies, practices or programs established, maintained, contributed to, or sponsored by Seller, the Company or any of their Subsidiaries, or to which Seller, the Company or any of their Subsidiaries has or could have any Liability (including on account of any ERISA Affiliate), including, but not limited to, plans described in Section 3(3) of ERISA and any other pension, profit-sharing, bonus, incentive compensation, equity or equity-like compensation, deferred compensation, vacation, sick pay, stock purchase, stock option, phantom equity, unemployment, hospitalization or other medical, life or other insurance, long- or short-term disability, change of control, fringe benefit.

 

“Employment Agreement” means any material agreement to which the Company or Amtran is a party which relates to the direct or indirect employment or engagement, or arises from the past employment or engagement, of any natural person by the Company or Amtran, whether as an employee or a nonemployee director, including any material employee leasing or service agreement and any noncompetition agreement.

 

“Entity” means any corporation, partnership of any kind, limited liability company, unlimited liability company, business trust, unincorporated organization or association, mutual company, joint stock company, joint venture or any other entity or organization.

 

“Environment” has the meaning specified in Section 4.16(e)(i).

 

“Environmental Claims” has the meaning specified in ‎‎Section 4.16(c).

 

“Environmental Law” has the meaning specified in Section 4.16(e)(ii).

 

“Environmental Permits” has the meaning ‎‎specified in Section 4.16(b).

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“ERISA Affiliate” has the meaning specified in Section 4.14(e).

 

“Escrow Agent” means JPMorgan Chase Bank, N.A.

 

“Escrow Agreement” has the meaning specified in Section 2.4(a)(v).

 

 

“Escrow Release Date” has the meaning specified in ‎Section 7.13.

 

“Estimated Adjustment Amount” means the amount (which may be negative) equal to (i) the amount, if any, by which the Estimated Closing Working Capital exceeds the Target Working Capital Upper Amount, or minus (ii) the amount, if any, by which the Estimated Closing Working Capital is less than the Target Working Capital Lower Amount, plus (iii) Closing Cash, minus (iv) Closing Indebtedness, minus (v) Transaction Costs, plus (vi) the Excess Cash Adjustment (as defined below). Notwithstanding the foregoing, if the Company or Amtran is required by written request from Buyer to distribute or remove excess cash from Amtran prior to the Closing resulting in the Seller Parties being taxed at a rate higher than the capital gains Tax rate prescribed under the Laws of the Republic of India relating to Taxes on the amount of such excess cash, then the Parties agree the Cash Consideration will be adjusted upward to account for one-half of the amount of any Tax that would be due above such capital gains rate (any such adjustment, the “Excess Cash Adjustment”).

 

“Estimated Cash Consideration” has the meaning specified in Section 2.5(a).

 

“Estimated Closing Working Capital” means the amount (positive or negative) in which the Seller’s estimate of the Closing Working Capital, as reflected on the Closing Statement, exceeds, or is lesser than, as the case may be, the Target Working Capital.

 

“Estimated Purchase Price” has the meaning specified in Section 2.5(a).

 

“Evaluation Period” has the meaning specified in Section 2.6(b).

 

“Excess Cash Adjustment” has the meaning specified in the definition of Estimated Adjustment Amount.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Excluded Damages” has the meaning specified in the definition of Damages.

 

“Export Control Laws” has the meaning specified in Section 4.12(b).

 

“FAR” means the Federal Acquisition Regulation codified at Title 48 of the Code of Federal Regulations, and any other applicable agency supplements thereto, including the Department of Defense FAR Supplement codified at Title 48 of the Code of Federal Regulations.

 

“FCPA” has the meaning specified in Section 4.12(a).

 

“Final Adjustment Amount” has the meaning specified in Section 2.6(h).

 

“Financial Information Date” has the meaning specified in Section 4.15(a).

 

“Financial Statements” has the meaning specified in Section 4.15(a).

 

“First Release Date” has the meaning specified in ‎Section 7.13.

 

 

“Fraud” means with respect to a Party, an actual and intentional misrepresentation or omission of a material existing fact with respect to the making of any representation or warranty in Article III, Article IV, or Article V, made by, and to such Party’s knowledge, of its falsity. For the avoidance of doubt, Fraud shall not include any claim for equitable fraud, constructive fraud, promissory fraud, unfair dealings fraud, fraud by reckless or negligent misrepresentations or any tort based on negligence or recklessness, in each case as applied by the arbitration panel pursuant to Section 8.8 of this Agreement, applying the Laws of the State of Delaware.

 

“FTAs” has the meaning specified in Section 4.12(d).

 

“Government Bid” has the meaning specified in Section 4.27(a).

 

“Government Contract” means (i) any Contract, including an individual task order, delivery order, purchase order, basic ordering agreement, letter contract or blanket purchase agreement, between the Company or Amtran, on the one hand, and any Governmental Authority, on the other; (ii) any Contract, including a basic ordering agreement, pricing agreement, letter contract or other arrangement by which the Company or Amtran has agreed to provide goods or services through a prime contractor to a Governmental Authority, to a higher-tier subcontractor to a Governmental Authority, or otherwise where a Governmental Authority is the ultimate consumer of the services provided by the Company or Amtran; or (iii) any lower-tier subcontractor to the Company or Amtran with respect to any Contract of a type described in clauses (i) or (ii) above. For purposes of clarity, a task order, purchase order, delivery order, or release issued pursuant to a Government Contract shall be considered a part of the Government Contract to which it relates.

 

“Governmental Authority” means any instrumentality, subdivision, court, administrative agency, commission, official or other authority of any country or any state, municipality, locality or other government or political subdivision thereof, or any quasi-governmental or private body exercising any regulatory, taxing or other governmental or quasi-governmental authority.

 

“Hazardous Substance” has the meaning specified in Section 4.16(e)(iii).

 

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 

“Indemnification Escrow” has the meaning specified in Section 2.4(a)(v).

 

“Indemnified Party” has the meaning specified in Section 7.4(b).

 

“Indemnifying Party” has the meaning specified in Section 7.4(b).

 

“Independent Accounting Firm” or “Independent Accountant” means Ernst & Young; provided, however, that if Ernst & Young declines to be engaged as such, another nationally-recognized firm of independent public accountants that Buyer and Seller Representative select by mutual agreement shall be engaged as the Independent Accounting Firm.

 

 

“Indian Accounting Standards” means Indian accounting standards and practices in India as in effect as of the date of this Agreement (or as of the date referenced in the particular context in which the term is used herein) and consistently applied.

 

“Intellectual Property” means any and all rights in, arising out of or associated with any of the following in any jurisdiction in the world: (i) inventions (whether patentable or unpatentable and whether or not reduced to practice) improvements thereto, patents and patent applications, including all reissues, divisions, continuations, continuations-in-part, provisionals, substitutes, renewals and extensions thereof, and other government issued indicia of invention ownership; (ii) works of authorship (whether copyrightable or uncopyrightable), all moral rights thereto, copyrights, and all copyright registrations and copyright applications and any renewals or extensions thereof; (iii) trademarks, service marks, brands, certification marks, trade dress, trade names, logos, slogans, social media accounts, domain names and other indicia of origin of use, whether registered or unregistered, and pending applications and renewals for any of the foregoing, together in each case with the goodwill connected with the use of or symbolized thereby; and (iv) trade secrets, know-how, proprietary and confidential information, including all proprietary rights in product specifications, compounds, processes, formulae, methods, compositions, drawings, product or industrial designs, business information, technical and marketing plans and proposals, ideas, concepts, inventions, research and development, information disclosed by business manuals and drawings, technology, technical information, data, research records, customer, distributor and supplier lists and similar data and information and all other confidential or proprietary technical or business information and materials and all rights therein.

 

“Latest Balance Sheet” has the meaning specified in Section 4.15(a).

 

“Law” or “Laws” means (i) any law, statute, treaty, convention, code, ordinance, order, direction, rule, regulation, judgment, decree, injunction, writ, edict, authorization or other requirement of any Governmental Authority in effect at such time or (ii) any obligation included in any Permit or resulting from binding arbitration, including any requirement under common law.

 

“Liabilities” means any indebtedness, liabilities, obligations, Taxes, penalties, fines, claims, demands, judgment, or cause of action, of any nature (whether accrued, absolute, contingent, direct, indirect, known, unknown, perfected, inchoate, unliquidated or otherwise, due or to become due).

 

“Lien” means, with respect to any property or other asset of any Person (or any revenues, income or profits of that Person therefrom), any mortgage, lien, security interest, pledge, attachment, levy, option, right of first refusal, other charge or encumbrance thereupon or in respect thereof of any kind or nature whatsoever, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, and whether due or become due and regardless of when or by whom asserted.

 

“LLC Conversion” has the meaning specified within the definition of “Reorganization”.

 

 

“Lock-Up Period” means any of the Six-Month Lock-Up Period, One-Year Lock-Up Period, Two-Year Lock-Up Period, or Three-Year Lock-Up Period.

 

“Material Adverse Effect” means an event, circumstance, development, change or effect that, individually or in the aggregate, (i) is reasonably likely to materially impair or delay the ability of a Selling Party to perform its or his obligations under this Agreement and to consummate the transactions contemplated hereby or (ii) has had or is reasonably likely to have a material adverse effect on the business, assets, Liabilities, condition (financial or otherwise) or results of operations of the Company and Amtran, taken as a whole; provided, however, that, in each case, no event, circumstance, development, change or effect resulting from any of the following shall be deemed to constitute, or shall be taken into account in determining whether there has been or would reasonably be expected to be, a Material Adverse Effect: (A) changes in global or national economic conditions, including changes in prevailing interest rates, credit markets, currency exchange rates, market conditions or the price of commodities or raw materials used by the Company or Amtran, (B) changes or trends in the industry in which the Company or Amtran or any of their customers operate or in which the services of the Company or Amtran are used, (C) changes in global or national political conditions, including the outbreak, continuation or escalation of war (whether or not declared), hostilities, military conflict or acts of terrorism, (D) earthquakes, hurricanes, tsunamis, typhoons, tornadoes, droughts, floods, cyclones, arctic frosts, mudslides, wildfires and other natural disasters, weather conditions and similar force majeure events in the United States or any other any location where the Company or Amtran has material operations or sales, (E) changes in Applicable Law including any proposed or announced changes to Applicable Law published by the relevant Government Authority in the public domain, or the interpretation, enforcement or implementation thereof or changes in US GAAP or Indian GAAP, or the interpretation thereof, (F) any failure by the Company or Amtran to meet any internal or third party projections or forecasts or estimates of revenue, earnings or other performance measures or operating statistics for any period (provided, however, that this clause (F) shall not operate to exclude from the definition of “Material Adverse Effect” any set of facts or circumstances that cause or result in any such failure unless otherwise excluded hereunder), or (G) any effect arising out of any action permitted, required or requested by Buyer to be taken pursuant to this Agreement, or any effect of not taking any action that is prohibited to be taken under this Agreement or any effect of taking any action that is required to be taken under this Agreement; provided, however, that events, circumstances, developments, changes or effects set forth in clauses (A) through (G) above may be taken into account in determining whether there has been or is reasonably likely to have a Material Adverse Effect if and only to the extent such events, circumstances, developments, changes or effects have a materially disproportionate adverse effect on the Company and Amtran, taken as a whole, in relation to others in the industry, and are not excluded by another of clauses (A) through (G).

 

“Material Agreement” has the meaning specified in Section 4.13(a).

 

“Material Customer” or “Material Customers” have the meaning specified in Section 4.24(a).

 

 

“Material Vendor” or “Material Vendors” have the meaning specified in Section 4.24(b).

 

“May 31 P&Ls” has the meaning specified in ‎Section 4.15(a).

 

“NISPOM” has the meaning specified in Section 4.27(f).

 

“Notice of Disagreement” has the meaning specified in Section 2.6(b).

 

“NYSE” has the meaning specified in ‎Section 5.3.

 

“OFAC” has the meaning specified in ‎Section 4.12(b).

 

“One-Year Lock-Up Period” has the meaning set forth in Section 6.11(b)(ii).

 

“Ordinary Course of Business” means the ordinary course of business of the Company and Amtran, consistent with past practices in all material respects.

 

“Organization Jurisdiction” means, as applied to (i) any corporation, the federal, state, provincial or other jurisdiction of incorporation, (ii) any limited liability company or limited partnership, the federal, state, provincial or other jurisdiction under whose Laws it is formed, organized and existing in that legal form, and (iii) any other Entity, the federal, state, provincial or other jurisdiction whose Laws govern that Entity’s internal affairs.

 

“Organizational Documents” means, with respect to any Entity at any time, in each case as amended, modified and supplemented at that time, (i) the articles or certificate of formation, incorporation, amalgamation or organization (or the equivalent organizational or constituent documents) of that Entity, (ii) the articles of association, bylaws, limited liability company agreement, limited partnership agreement or regulations (or the equivalent governing documents) of that Entity and (iii) each document setting forth the designation, amount and relative rights, limitations and preferences of any class or series of that Entity’s Capital Stock.

 

“Other Party” has the meaning specified in Section 8.15(a).

 

“Other Party Group Member” or “Other Party Group Members” have the meaning specified in Section 8.15(a).

 

“Owner 1” has the meaning specified in the preamble to this Agreement.

 

“Owner 1 Employment Agreement” has the meaning specified in Section 2.7(a)(ii).

 

“Owner 2” has the meaning specified in the preamble to this Agreement.

 

“Owner 2 Employment Agreement” has the meaning specified in Section 2.7(a)(iii).

 

“Owner 3” has the meaning specified in the preamble to this Agreement.

 

 

“Owner 3 Employment Agreement” has the meaning specified in Section 2.7(a)(iv).

 

“Owner 4” has the meaning specified in the preamble to this Agreement.

 

“Owner 5” has the meaning specified in the preamble to this Agreement.

 

“Owners” has the meaning specified in the preamble to this Agreement.

 

“Party” and “Parties” have the meanings specified in the preamble to this Agreement.

 

“Pass-Through Income Tax Return” means IRS Form 1065 and IRS Form 1120-S and associated Schedules K-1 thereto, and corresponding state and local Tax Returns. By way of example and without limitation, Tax Returns primarily concerning property Taxes, sales and use Taxes, payroll Taxes, and withholding Taxes are not Pass-Through Tax Returns.

 

“Pass-Through Income Tax Return Contest” has the meaning specified in Section 6.4(c)(ii).

 

“Payoff Letters” has the meaning specified in Section 2.7(b)(xiii).

 

“PBGC” has the meaning specified in Section 4.14(e).

 

“Permit” means any authorization, consent, approval, permit, franchise, certificate, certification, license, implementing order or exemption of, or registration or filing with, any Governmental Authority, including any certification or licensing of a natural person to engage in a profession or trade or a specific regulated activity and certifications of standards setting organizations.

 

“Permitted Equity Liens” means: (i) transfer restrictions caused by or created under federal or state securities Laws or the Organizational Documents of the Company or Amtran; or (ii) Liens caused or created by Buyer upon or after the Closing.

 

“Permitted Liens” means: (i) Liens for Taxes that are not yet due or that are being contested in good faith by appropriate Proceedings for which adequate accruals or reserves have been established on the Latest Balance Sheet in accordance with US GAAP, (ii) Liens incurred or deposits made in the Ordinary Course of Business in connection with workers’ or unemployment compensation and employment insurance related Liabilities and other Liens under social security laws or regulations, or similar foreign laws, (iii) Liens of carriers, warehousemen, mechanics, laborers, materialmen, customers and employees for amounts not yet due or that are being contested in good faith in appropriate Proceedings, (iv) vendors’ Liens in respect of trade payables incurred in the Ordinary Course of Business and that would not result in a Material Adverse Effect, (v) any interest or title of a lessor of any assets being leased pursuant to an equipment lease, (vi) Liens that do not materially (A) diminish the value of the affected assets or (B) interfere with the ordinary use of such assets, (vii) Liens caused or created by Buyer or arising under this Agreement, and (viii) with respect to real property, (A) restrictions imposed by Applicable Law relating to zoning and land use and (B) matters that would be shown on an accurate survey of real property.

 

 

“Permitted Transfer” has the meaning set forth in Section 6.12.

 

“Permitted Transferee” means with respect to any Person, (a) the spouse, children, or family trust of such Person, (b) if the Person is a corporation, partnership, limited liability company or other business entity, its direct or indirect shareholders, partners, members or other equityholders, and (c) any other Selling Party.

 

“Person” means any natural person, Entity, estate, trust, union or employee organization or Governmental Authority.

 

“Personal Data” means a natural person’s name; street address; telephone number; email address; photograph; social security number or portions thereof; driver’s license number; passport number; customer or account number; protected health information as defined by HIPAA; patient identifying information as defined by 42 C.F.R. Part 2; health or medical information; or any other piece of information that identifies or locates a natural person or that, in combination with other reasonably available data, can be used to identify or locate a natural person.

 

“Post-Closing Statement” has the meaning specified in Section 2.6(a).

 

“PPP Loans” means all Payroll Protection Program loans of the Company, as set forth on Section 4.25(c) of the Disclosure Schedules.

 

“Pre-Closing Period” means any taxable period ending on or before the Closing Date and the portion of any Straddle Period ending on and including the Closing Date.

 

“Pre-Closing Taxes” means, without duplication, (i) any and all Taxes of or imposed on any Selling Party for any taxable period, including Specified Income Taxes and any Liabilities attributable to Specified Income Taxes, (ii) any and all Taxes of or imposed on the Company or Amtran for any and all Pre-Closing Periods (determined in accordance with Section 6.4(b) with respect to any Straddle Period), including Specified Income Taxes and any Liabilities attributable to Specified Income Taxes, (iii) Liabilities attributable to any Taxes deferred pursuant to the CARES Act (or any similar or analogous provision of U.S. federal, state, local, or federal Law), (iv) any and all Taxes of an Affiliated Group of which the Company (or any predecessor of any such Person) or Amtran (or any predecessor of any such Person) is or was a member on or prior to the Closing Date, including pursuant to Treasury Regulations Section 1.1502-6 (or any predecessor or successor thereof or any analogous or similar state, local or foreign Law), (v) any and all Taxes of or imposed on Buyer, the Company or Amtran or any of their Affiliates as a result of transferee, successor or similar Liability (including bulk transfer or similar Laws) or pursuant to any Law or otherwise, which Taxes relate to an event or transaction occurring on or prior to the Closing Date, (vi) any and all Taxes imposed in connection with the transactions contemplated by this Agreement (including any Transfer Taxes), (vii) any and all Taxes imposed as the result of any inaccuracy in or breach of any of the representations or warranties contained in Section 4.17, and (viii) any and all amounts required to be paid by the Company or Amtran pursuant to any Tax Sharing Agreement that the Company or Amtran, as the case may be, was a party to on or prior to the Closing Date; (ix) all Taxes of the Company or Amtran arising as a result of Sections 951, 951A or 965 of the Code, (x) any Tax relating to the direct or indirect ownership of the Company before the Closing, the Company’s ownership, possession, operation or use of its assets before the Closing, or the Company’s business operations before the Closing, and (xi) any nonresident withholding of income Taxes required to be made on behalf of any direct or indirect owner of the Company, Amtran or any of their respective Subsidiaries; provided, however, that “Pre-Closing Taxes” shall not include Taxes that are not income Taxes to the extent such Taxes that are not income Taxes were included in the calculation of Closing Working Capital and resulted in a reduction of the Purchase Price.

 

 

“Privacy and Information Security Requirements” means (a) all Laws relating to the Processing of Personal Data and (b) the Payment Card Industry Data Security Standards.

 

“Proceeding” means any action, case, proceeding, claim, grievance, suit, audit or investigation, litigation, or other proceeding (including any administrative, criminal or arbitration or mediation proceedings) conducted by or pending before any Governmental Authority or any arbitrator.

 

“Process” or “Processing” means the collection, use, storage, processing, distribution, transfer, import, export, protection (including security measures), disposal or disclosure or other activity regarding data (whether electronically or in any other form or medium).

 

“Products” has the meaning specified in Section 4.26(a).

 

“Purchase Price” has the meaning specified in Section 2.3.

 

“QSub Election” has the meaning specified in the definition of “Reorganization”.

 

“Real Property Leases” has the meaning specified in Section 4.13(a).

 

“Release” has the meaning specified in Section 4.16(e)(iv).

 

“Remedial Action” has the meaning specified in Section 4.16(e)(v).

 

“Reorganization” means (i) the Owners’ formation of Seller and contribution of 100% of the issued and outstanding equity interests of the Company to Seller (the “Contribution”) on March 14, 2023, (ii) effective as of the date of the Contribution, Seller’s election to treat the Company as a “qualified subchapter S subsidiary” (within the meaning of Section 1361(b)(3) of the Code) (the “QSub Election”), (iii) on March 23, 2023, but subsequent to the QSub Election, the Company’s conversion from a Texas corporation to a Texas limited liability company, (iv) on August 18, 2023, the Company’s conversion from a Texas limited liability company to a Texas corporation, and (v) on October 21, 2024, the Company’s conversion from a Texas corporation to a Texas limited liability company (the “LLC Conversion”), with the actions described in clauses (i), (ii) and (iii) above consistent with a plan intended to qualify as a “reorganization” within the meaning of Section 368(a)(1)(F) of the Code.

 

 

“Representatives” means, with respect to any Person, the directors, officers, managers, employees, Affiliates, accountants, advisors, attorneys, consultants or other agents of that Person, or any other representatives of that Person.

 

“Response Period” has the meaning specified in Section 7.6(a).

 

“Restricted Activities” has the meaning specified in Section 6.3(f).

 

“Restricted Cash” means all cash (including any security deposits other than security deposits in the amount of to $25,265 made with respect to the Real Property Leases set forth in Section 4.6(b) of the Disclosure Schedules) subject to any legal or contractual restriction on the ability to freely transfer or use such cash for any lawful purpose and including any Taxes (including any required withholdings or deductions in respect thereof incurred in the repatriation or distribution of such cash).

 

“Restricted Period” has the meaning specified in Section 6.3(a).

 

“Rule 144” means Rule 144 under the Securities Act or any successor rule thereto.

 

“Rule 144 Securities” means (a) the Stock Consideration owned by Seller or its Permitted Transferees, and (b) any shares of Buyer common stock issued or issuable with respect to any shares described in subsection (a) above by way of a stock dividend or stock split or in exchange for or upon conversion of such shares or otherwise in connection with a combination of shares, distribution, recapitalization, merger, consolidation, other reorganization or other similar event with respect to the common stock of Buyer (it being understood that, for purposes of this Agreement, a Person shall be deemed to be a holder of Rule 144 Securities whenever such Person has the right to then acquire or obtain from Buyer any Rule 144 Securities, whether or not such acquisition has actually been effected). As to any particular Rule 144 Securities, such securities shall cease to be Rule 144 Securities when (i) the SEC has declared a registration statement covering such securities effective and such securities have been disposed of pursuant to such effective registration statement, (ii) such securities are sold under circumstances in which all of the applicable conditions of Rule 144 under the Securities Act are met, (iii) such securities become eligible for sale pursuant to Rule 144 without volume or manner-of-sale restrictions and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144(c)(1), as set forth in a written opinion letter to such effect, addressed, delivered and reasonably acceptable to the applicable transfer agent and the holders of such securities, or (iv) such securities are otherwise transferred or resold.

 

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, and the rules and regulations promulgated thereunder.

 

“SEC” means the United States Securities and Exchange Commission.

 

“SEC Documents” has the meaning specified in ‎Section 5.3.

 

“Second Release Date” has the meaning specified in ‎Section 7.13.

 

“Securities” has the meaning specified in the Recitals to this Agreement.

 

 

“Securities Act” has the meaning specified in Section 5.2(d).

 

“Seller” has the meaning specified in the preamble to this Agreement.

 

“Seller Entity” and “Seller Entities” have the meaning specified in Section 8.15(a).

 

“Seller Fundamental Representations” means the representations and warranties of the Selling Parties or Seller, as applicable, contained in Section 3.1, Section 3.2(a), Section 3.2(b), Section 4.1, Section 4.3, Section 4.4, Section 4.16, Section 4.17 and Section 4.23.

 

“Seller Indemnified Loss” has the meaning specified in Section 7.3.

 

“Seller Indemnitees” means Seller and its Affiliates and their respective directors, officers and employees.

 

“Seller Prepared Returns” has the meaning specified in Section 6.4(a).

 

“Seller Representative” means Bhargav Shah, or such other Person as may be designated in his stead in accordance with the terms of this Agreement.

 

“Selling Parties” has the meaning specified in the Recitals to this Agreement.

 

“Six-Month Lock-Up Period” has the meaning set forth in Section 6.11(b)(i).

 

“Specific Principles” has the meaning specified in Exhibit A.

 

“Specified Income Tax” and “Specified Incomes Taxes” means (i) all Taxes based upon, measured by, or calculated with respect to (A) net income or profits (including any gross receipts, capital gains or minimum Tax but not including any sales, use, real or personal property, transfer or similar Taxes) or (B) multiple bases (including, but not limited to, corporate franchise or doing business) if one or more Taxes upon which such Tax may be based, measured by or calculated with respect to, is described in clause (i)(A) above; (ii) all U.S., state, local and foreign franchise Taxes imposed in lieu of Taxes described in clause (i), and (iii) any nonresident withholding of income Taxes required to be made on behalf of any direct or indirect owner of the Company, Amtran or any of their respective Subsidiaries.

 

“Sponsor” has the meaning specified in Section 4.18(d).

 

“Stock Consideration” means the number of shares of Buyer’s common stock determined by dividing (a) the Closing Stock Consideration Value by (b) the Buyer Common Stock Price (rounded down to the nearest whole share).

 

“Straddle Period” means any taxable period beginning on or before and ending after the Closing Date.

 

“Subsidiary” of any specified Person at any time means any Entity of which (i) such Person or any other Subsidiary of such Person is a general partner, managing member or sole or controlling member or (ii) at least a majority of the Capital Stock having by their terms ordinary voting power to elect a majority of the board of directors, managers or others performing similar functions with respect to such Entity is, directly or indirectly, owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and any one or more of its Subsidiaries.

 

 

“Survival Period” has the meaning specified in Section 7.1(a).

 

“Systems” has the meaning specified in Section 4.18(g).

 

“Target Working Capital” means the Company Target Working Capital plus the Company Portion of the Amtran Target Working Capital.

 

“Target Working Capital Lower Amount” means $12,094,007.00.

 

“Target Working Capital Upper Amount” means $13,383,993.00.

 

“Tax” or “Taxes” means all net or gross income, gross receipts, escheat, net proceeds, sales, use, ad valorem, value added, goods and services, harmonized sales, franchise, capital, capital gains, withholding, payroll, employer health, real property, personal property, social security, employment, unemployment, excise, property, deed, stamp, alternative, net worth or add-on minimum, environmental, license, severance, occupation, premium, windfall profits, custom duties, capital stock, profits, disability, transfer, registration, estimated, or other taxes, assessments, duties, levies or similar governmental charges in the nature of a tax, together with any interest, penalties, fines or additions to tax with respect thereto or with respect to such interest, penalties, fines or additions, imposed by any Governmental Authority.

 

“Tax Allocation Statement” has the meaning specified in Section 6.4(i)(i).

 

“Tax Contest” has the meaning specified in Section 6.4(c)(i).

 

“Tax Returns” means (a) the returns, reports, information returns, claims for refund and other forms or documents (including any amendments thereto and any related or supporting information) required to be filed with any Taxing Authority in connection with any Tax and (b) TD F 90-22.1 (and its successor form, FinCEN Form 114), if applicable.

 

“Tax Sharing Agreement” means any Tax indemnity agreement, Tax sharing agreement, Tax allocation agreement or similar contract or arrangement, whether written or unwritten (including any such agreement, contract or arrangement included in any purchase or sale agreement, merger agreement, joint venture agreement or other document).

 

“Taxing Authority” means any Governmental Authority having or purporting to exercise jurisdiction with respect to any Tax.

 

“Third Release Date” has the meaning specified in ‎Section 7.13.

 

“Third-Party Claim” means any Claim that is made, given or instituted by a third party that is not a Party or an Affiliate of a Party (including any Governmental Authority).

 

 

“Third-Party Provisions” has the meaning specified in Section 8.11.

 

“Three-Year Lock-Up Period” has the meaning set forth in Section 6.11(b)(iv).

 

“Tipping Basket” means $903,000.00.

 

“Total Tax Consideration” has the meaning specified in Section 6.4(i)(i).

 

“Transaction Costs” means the aggregate amount of all fees, costs, expenses, charges and other payments of Seller, Company and the Company Portion of any such payment of Amtran, in each case solely to the extent incurred, committed to, reimbursable by or otherwise payable at or before the Closing by Seller, its shareholders, the Company or Amtran in connection with the transactions contemplated by this Agreement, and to the extent the same remain unpaid as of the Closing, including (i) expenses of counsel to Seller, its shareholders, the Company or Amtran and of any investment banker, broker, consultant, accountant or other Person who performed services or provided advice to Seller, its shareholders, Company or Amtran in connection with the transactions contemplated by this Agreement prior to Closing and any success fees payable by such Persons which are contingent on the occurrence of the Closing, and (ii) any severance, change-in-control bonus, retention bonus, transaction bonus or other payment (contingent or otherwise) to be made by Seller, its shareholders, Company or Amtran to any employee or independent contractor that may be triggered, either automatically or with the passage of time, in whole or in part by the consummation of the transactions contemplated by this Agreement (and the employer portion of any payroll, employment or similar Taxes associated with any of the foregoing payments), only to the extent that such amounts have not been paid by Seller, its shareholders, Company or Amtran before the Effective Time. Notwithstanding the foregoing, and for the avoidance of doubt, Transaction Costs shall exclude (1) the Buyer’s portion of any Transfer Taxes under Section 6.4(e), (2) any costs, expenses, bonuses (including any stay or retention bonuses or similar bonuses or incentives offered or agreed to by or on behalf of Buyer before the date hereof), amounts or other payments (including any Taxes in connection therewith), in each case, arising from any arrangements put in place by, or on behalf of, Buyer or at the written request of Buyer, and (3) so as to avoid duplication, any costs, expenses and other amounts included in Closing Indebtedness or which reduce Closing Working Capital.

 

“Transaction Documents” means this Agreement and the other written ancillary agreements, documents, instruments and certificates executed under or in connection with this Agreement; provided, however, that for purposes of Section 8.18 such term shall not include the Owner 1 Employment Agreement, the Owner 2 Employment Agreement, or the Owner 3 Employment Agreement.

 

“Transfer Taxes” means all sales, use, value added, goods and services, harmonized sales, transfer, documentary, stamp, registration and other similar Taxes arising from, based on or related to the transactions contemplated by this Agreement.

 

“Two-Year Lock-Up Period” has the meaning set forth in Section 6.11(b)(iii).

 

 

“US GAAP” means generally accepted accounting principles and practices in the United States as in effect as of the date of this Agreement (or as of the date referenced in the particular context in which the term is used herein) and consistently applied.

 

Section 1.2    Other Defined Terms. Words and terms used in this Agreement that other Sections of this Agreement define are used in this Agreement as those other Sections define them.

 

Section 1.3    Other Definitional Provisions.

 

(a)    Except as this Agreement otherwise specifies, all references herein to any Law defined or referred to herein, including the Code, are references to that Law or any successor Law, as the same may have been amended or supplemented from time to time through the date hereof, and any rules or regulations promulgated thereunder.

 

(b)    The words “herein,” “hereof” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any provision of this Agreement, and the words “Article,” “Section,” “Recitals,” “Exhibit” and “Schedule” refer to Articles and Sections of, the Recitals to, and Exhibits and Schedules to, this Agreement unless it otherwise specifies.

 

(c)    Whenever the context so requires, the singular number includes the plural and vice versa, and a reference to one gender includes the other gender and the neuter.

 

(d)    As used in this Agreement and unless the context otherwise requires, the word “including” (and, with correlative meaning, the word “include”) means including, without limiting the generality of any description preceding that word, the word “or” shall be disjunctive but not exclusive and the words “shall” and “will” are used interchangeably and have the same meaning.

 

(e)    The phrase “to the knowledge of Seller,” or any similar phrase means such facts and other information that are actually known to Owner 1, Owner 2, Owner 3, and the Amtran Knowledge Parties, and such knowledge that would have obtained by Owner 1, Owner 2, Owner 3, and the Amtran Knowledge Parties after reasonable inquiry of the Persons directly reporting to such Owner or such Amtran Knowledge Party with responsibility and specialized knowledge of the subject matter in question; provided, however, that for purposes of the knowledge of Seller, (i) the facts and other information actually known to Owner 1 shall be limited to the representations and warranties to the extent they relate to Company and not Amtran, (ii) the facts and other information actually known to Owner 2 shall be limited to the representations and warranties set forth in Section 4.18 (Intellectual Property), Section 4.24 (Customers and Vendors; Warranties), and Section 4.26 (Products) to the extent such representations and warranties relate to the Company and not Amtran, (iii) the facts and other information actually known to Owner 3 shall be limited to the representations and warranties set forth in Section 4.6 (Real Property), Section 4.11 (Permits), Section 4.12 (Certain Business Practices), Section 4.16 (Environmental Matters), and Section 4.26 (Products) to the extent such representations and warranties relate to the Company and not Amtran, (iv) the facts and other information actually known to Chirag Shah shall be limited to the representations and warranties relating to Amtran and not the Company, and (v) the facts and other information actually known to Sandip Shah shall be limited to the representations and warranties set forth in Section 4.18 (Intellectual Property), Section 4.24 (Customers and Vendors; Warranties), and Section 4.26 (Products) to the extent such representations and warranties relate to Amtran and not the Company.

 

 

(f)    As used in this Agreement, all references to “dollars” or “$” mean United States dollars.

 

Section 1.4    Captions. This Agreement includes captions to Articles, Sections and subsections of this Agreement and the Schedules hereto for convenience of reference only, and these captions do not constitute a part of this Agreement for any other purpose or in any way affect the meaning or construction of any provision of this Agreement.

 

ARTICLE II

PURCHASE AND SALE

 

Section 2.1    Purchase and Sale. At the Closing, and on the terms and subject to the conditions of this Agreement, Buyer shall purchase and acquire from Seller, and Seller shall sell, assign, transfer and convey to Buyer, all of Seller’s rights, title and interest in and to the Securities free and clear of all Liens other than Permitted Equity Liens, for the consideration specified in Section 2.3.

 

Section 2.2    Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Chamberlain Hrdlicka, 1200 Smith Street, Suite 1400, Houston, Texas 77002, or remotely by the exchange of documents and signatures (or their electronic counterparts), of this Agreement and the other documents to be delivered at the Closing, contemporaneously with the execution of this Agreement (the “Closing Date”). The Closing shall deemed to be effective as of 11:59 pm Houston, Texas time on the Closing Date (the “Effective Time”) for purposes of this Agreement.

 

Section 2.3    Purchase Price. The purchase price for the acquisition of the Securities in accordance with this Agreement (the “Purchase Price”) is $180,600,000.00, subject to the adjustments set forth in Section 2.6. The Purchase Price has been paid in the form of the Estimated Cash Consideration and the Stock Consideration, as set forth in Section 2.4.

 

Section 2.4    Payment and Issuance at the Closing.

 

(a)    At the Closing, Buyer has delivered, disbursed, or issued, without duplication, the following consideration:

 

(i)    To Seller, the Estimated Cash Consideration as set forth in the Closing Statement delivered pursuant to Section 2.5 below (minus the amounts set forth in Section 2.4(a)(v)). The Estimated Cash Consideration has been paid by wire transfer of dollars in immediately available funds to such account or accounts as have been designated in writing by Seller to Buyer.

 

(ii)    To Seller, in a transaction exempt from registration under all applicable federal and state securities laws, the Stock Consideration in book-entry form as reflected in Buyer’s transfer agent’s records, and proof of evidence thereof satisfactory to Seller.

 

(iii)    To the applicable Persons and account(s) designated in the Closing Statement (on behalf of the Company and Amtran, as applicable), in accordance with the applicable Payoff Letters, the applicable amounts of Closing Indebtedness existing as of the Closing Date (to the extent not paid by or on behalf of the Company or Amtran before the Closing) in order to discharge the amounts payable thereunder.

 

 

(iv)    To the applicable Persons and account(s) designated in the Closing Statement (on behalf of the Company or Amtran, as applicable), the applicable amounts of Transaction Costs existing on the Closing Date (to the extent not paid by the Company or Amtran before the Closing) in order to discharge the amounts payable thereunder.

 

(v)    To the Escrow Agent, pursuant to the terms and conditions of that certain Escrow Agreement, executed and delivered by the Escrow Agent, Buyer and Seller Representative, as of the Effective Date (the “Escrow Agreement”), (i) $161,248.00 to be held by the Escrow Agent, in trust, pursuant to the terms and conditions of the Escrow Agreement as the sole and exclusive source of recovery for adjustments, if any, to the Purchase Price based on the Final Adjustment Amount (such amount held pursuant to clause (i), the “Adjustment Escrow”), and (ii) $15,351,000.00 to be held by the Escrow Agent, in trust, pursuant to the terms and conditions of the Escrow Agreement for security against the indemnification obligations of Seller under this Agreement (such amount held pursuant to clause (ii), the “Indemnification Escrow”).

 

(b)    Seller shall be deemed to have contributed to the escrows established under the Escrow Agreement, that portion of the Purchase Price that would otherwise have been payable to Seller, as set forth on the Closing Statement and Section 2.4(a)(i) above.

 

Section 2.5    Closing Statement.

 

(a)    Seller has delivered to Buyer the statement attached hereto as Exhibit C (the “Closing Statement”) setting forth (i) the Cash Consideration, plus or minus (ii) Seller’s calculation and estimate of the Estimated Adjustment Amount (the “Estimated Cash Consideration” and together with the Stock Consideration, the “Estimated Purchase Price”). The Estimated Adjustment Amount has been calculated in accordance with the Accounting Principles and in a manner consistent with the applicable definitions contained in this Agreement. Notwithstanding the foregoing, the Parties agree that no adjustment shall be made at Closing to the Estimated Adjustment Amount or the Estimated Cash Consideration to the extent Estimated Closing Working Capital (1) exceeds the Target Working Capital Upper Amount or (2) is less than the Target Working Capital Lower Amount; and further, that such agreement not to make any such adjustment at Closing shall have no effect on the procedures contemplated by the Parties as set forth in Section 2.6 below, the determination of the Final Adjustment Amount, or the payment of the Closing Adjustment Surplus Amount or the Closing Adjustment Shortfall Amount, as applicable (each as defined in Section 2.6(i) below).

 

(b)    Seller has provided Buyer and its Representatives with reasonable access to the books and records of the Company and Amtran and to senior management personnel of the Company and Amtran and with all supporting documentation requested by Buyer, in each case, in connection with Buyer’s review of the Closing Statement, including (i) Payoff Letters with respect to the Closing Indebtedness, dated within a reasonable time before the Closing Date, which set forth the aggregate amounts arising under or owing or payable thereunder and in connection therewith on the Closing Date, (ii) a summary of Transaction Costs in form and substance reasonably satisfactory to Buyer, and (iii) wire transfer amounts and details for holders of Closing Indebtedness and payees of the Transaction Costs to be paid by Buyer pursuant to Section 2.4(a)(iii) and Section 2.4(a)(iv). Buyer has had the opportunity to comment on and request reasonable changes to the Closing Statement, and Seller has considered in good faith any such comments and changes, but for the avoidance of doubt, no such comments or requested changes shall prejudice or waive Buyer’s rights under Section 2.6.

 

 

Section 2.6    Post-Closing Adjustment.

 

(a)    Within 90 calendar days after the Closing Date, Buyer shall deliver to Seller a statement (the “Post-Closing Statement”), delivered in the same format as, and prepared using the same Accounting Principles that were used in the preparation of the Closing Statement and setting forth the Buyer’s calculation of (i) Closing Indebtedness, Transaction Costs, Closing Working Capital, Closing Cash, the Excess Cash Adjustment (if any), and (ii) the Purchase Price which has been calculated using the amounts set forth in the preceding clause (i). Seller shall offer such assistance that Buyer and its representatives may reasonably request in connection with the preparation of the Post-Closing Statement.

 

(b)    During the 45-day period following Seller’s receipt of the Post-Closing Statement (and thereafter, in the event of any unresolved differences described in Section 2.6(c)), Buyer shall provide Seller Representative with access, during normal business hours and upon reasonable prior notice, to the books and records of Buyer and to senior management of Buyer in connection with Seller Representative’s review of the Post-Closing Statement. On or prior to the 45^th day following Seller’s receipt of the Post-Closing Statement (the “Evaluation Period”), Seller Representative may deliver to Buyer a written notice of its disagreement with respect to the Post-Closing Statements (a “Notice of Disagreement”) describing in reasonable detail any disputed item set forth in the Post-Closing Statement. If Seller Representative does not provide a Notice of Disagreement during the Evaluation Period, then Seller shall be deemed to have accepted the calculations and the amounts set forth in the Post-Closing Statement, which shall then be final and binding for all purposes hereunder. If Seller Representative provides a Notice of Disagreement during the Evaluation Period, then only those matters that are specified in such Notice of Disagreement shall be deemed to be in dispute, and all other matters shall be final and binding for all purposes hereunder.

 

(c)    During the ten (10) Business Day period following the earlier of (i) delivery of a Notice of Disagreement by Seller Representative to Buyer and (ii) the end of the Evaluation Period, the Parties in good faith shall seek to resolve in writing any differences that they may have with respect to the matters specified therein. Any disputed items resolved in writing between Seller Representative and Buyer within such ten (10) Business Day period shall be final and binding with respect to such items, and if Seller Representative and Buyer agree in writing on the resolution of each disputed item specified by Seller Representative in the Notice of Disagreement, then the amount so determined shall be final and binding on the Parties for all purposes hereunder. If Seller Representative and Buyer have not resolved all such differences by the end of such ten (10) Business Day period, then Seller Representative and Buyer shall within twenty (20) Business Days thereafter submit, in writing, to the Independent Accounting Firm, their briefs detailing their views as to the correct nature and amount of each item remaining in dispute, and the Independent Accounting Firm shall make a written determination as to each such disputed item, which determination shall be final and binding on the Parties for all purposes hereunder. The Independent Accounting Firm shall be authorized to opine upon and resolve only those items remaining in dispute between the Parties in accordance with the provisions of this Section 2.6, such items shall be resolved within the range of the difference between Buyer’s position with respect thereto and Seller’s position with respect thereto. Seller Representative and Buyer shall use their commercially reasonable efforts to cause the Independent Accounting Firm to render a written decision resolving the matters submitted to it within twenty (20) Business Days following the submission thereof. The Post-Closing Statement shall be modified, if necessary, to reflect such determination of the Independent Accountant. Seller Representative (on behalf of Seller) shall pay a portion of the fees and expenses of the Independent Accounting Firm shall be borne one-half by Buyer and one-half by Seller. The fees and disbursements of each Party and the representatives of each Party incurred in connection with its preparation or review of the Post-Closing Statement and preparation or review of any Notice of Disagreement, as applicable, shall be borne by such Party.

 

 

(d)    If the Closing Working Capital, as finally determined pursuant to Section 2.6, is less than the Target Working Capital Lower Amount, then Buyer shall be paid in accordance with Section 2.6(k) the amount that such Closing Working Capital is less than the Target Working Capital Lower Amount. If the Closing Working Capital, as finally determined pursuant to Section 2.6, is greater than the Target Working Capital Upper Amount, then Seller shall be entitled to receive in accordance with Section 2.6(j) the amount that such Closing Working Capital is greater than the Target Working Capital Upper Amount.

 

(e)     If the Closing Indebtedness, as finally determined pursuant to Section 2.6, is less than Closing Indebtedness reflected in the Estimated Cash Consideration, as set forth in the Closing Statement, then Seller shall be entitled to receive the amount of such deficit in accordance with Section 2.6(k). If the Closing Indebtedness, as finally determined pursuant to Section 2.6, is greater than Closing Indebtedness reflected in such Estimated Cash Consideration, then Buyer shall be paid the amount of such excess in accordance with Section 2.6(k).

 

(f)    If Transaction Costs, as finally determined pursuant to Section 2.6, are less than Transaction Costs reflected in the Estimated Cash Consideration, as set forth in the Closing Statement, then Seller shall be entitled to receive the amount of such deficit in accordance with Section 2.6(j). If the Transaction Costs, as finally determined pursuant to Section 2.6, are greater than Transaction Costs reflected in such Estimated Cash Consideration, then Buyer shall be paid the amount of such excess in accordance with Section 2.6(k).

 

(g)   (i) If Company Closing Cash, as finally determined pursuant to Section 2.6, is greater than Company Closing Cash reflected in the Estimated Cash Consideration, as set forth in the Closing Statement, then Seller shall be entitled to receive the amount of such excess in accordance with Section 2.6(j). If Closing Cash, as finally determined pursuant to Section 2.6, is less than Closing Cash reflected in such Estimated Cash Consideration, then Buyer shall be paid the amount of such deficit in accordance with Section 2.6(k).

 

(ii) If Amtran Closing Cash, as finally determined pursuant to Section 2.6, is greater than Amtran Closing Cash reflected in the Estimated Cash Consideration, as set forth in the Closing Statement, then such excess shall be disregarded for purposes of Section 2.6(j). If Amtran Closing Cash, as finally determined pursuant to Section 2.6, is less than Amtran Closing Cash reflected in such Estimated Cash Consideration, then such deficit shall be disregarded for purposes of Section 2.6(j).

 

 

(h)    If the Excess Cash Adjustment, as finally determined pursuant to Section 2.6, is greater than the Excess Cash Adjustment reflected in the Estimated Cash Consideration, as set forth in the Closing Statement, then Seller shall be entitled to receive the amount of such excess in accordance with Section 2.6(j). If the Excess Cash Adjustment, as finally determined pursuant to Section 2.6, is less than such Excess Cash Adjustment reflected in the Estimated Cash Consideration, then Buyer shall be paid the amount of such deficit in accordance with Section 2.6(k).

 

(i)    Without duplication, all amounts owed pursuant to Section 2.6(d)-Section 2.6(h) shall be aggregated, and the net amount (if any) owed by Buyer to Seller, on the one hand (any such amount, the “Closing Adjustment Surplus Amount”), or by Seller to Buyer, on the other hand (any such amount, the “Closing Adjustment Shortfall Amount”), is referred to as the “Final Adjustment Amount”.

 

(j)    In the event the Final Adjustment Amount constitutes a Closing Adjustment Surplus Amount, then (x) Buyer shall pay to Seller an amount in cash equal to the Closing Adjustment Surplus Amount and (y) Buyer and Seller shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver to Seller the amount of the Adjustment Escrow.

 

(k)    In the event the Final Adjustment Amount constitutes a Closing Adjustment Shortfall Amount, then (x) Buyer and Seller shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver to Buyer from the Adjustment Escrow an amount in cash equal to the Closing Adjustment Shortfall Amount (and to deliver to Seller from the Adjustment Escrow, if any, the remaining amount of the Adjustment Escrow) and (y) to the extent the Closing Adjustment Shortfall Amount exceeds the amount of the Adjustment Escrow, Buyer and Seller shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver to Buyer from the Indemnification Escrow (to the extent funds are available in the Indemnification Escrow) any remaining balance of the Closing Adjustment Shortfall to Buyer.

 

(l)    Payments in respect of Section 2.6(j) or Section 2.6(k) shall be made within three (3) Business Days of final determination pursuant to Section 2.6 by wire transfer of dollars in immediately available funds to such account or accounts as may be designated in writing by Seller Representative or Buyer at least two (2) Business Days prior to such payment date. Any payment in respect of Section 2.6(j) or Section 2.6(k) shall be deemed to be an adjustment to the Purchase Price.

 

(m)    If the aggregate of all amounts owed by Buyer to Seller pursuant to Section 2.6(d)-Section 2.6(h) are equal to aggregate of all amounts owed by Seller to Buyer pursuant to Section 2.6(d)-Section 2.6(h), then no amounts shall be payable by Buyer or Seller to the other Party as the Final Adjustment Amount, and the Estimated Purchase Price shall constitute the Purchase Price, and shall be subject to no further adjustments. In such event, the Buyer and Seller Representative shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver to Seller the amount of the Adjustment Escrow in cash in full, within three (3) Business Days of final determination pursuant to Section 2.6 by wire transfer of dollars in immediately available funds to such account or accounts as may be designated in writing by Seller.

 

 

Section 2.7    Closing Deliverables.

 

(a)    At the Closing, Buyer has paid and undertaken the actions specified in Section 2.4 and has delivered, or caused to be delivered, to the Selling Parties, as applicable:

 

(i)    the Escrow Agreement, duly executed by Buyer;

 

(ii)    an employment agreement by and among the Company, Owner 1 and Buyer, in the form and substance acceptable to Buyer and Owner 1 (the “Owner 1 Employment Agreement”), duly executed by Buyer;

 

(iii)    an employment agreement by and among the Company, Owner 2 and Buyer, in the form and substance acceptable to Buyer and Owner 2 (the “Owner 2 Employment Agreement”), duly executed by Buyer;

 

(iv)    an employment agreement by and among the Company, Owner 3 and Buyer, in the form and substance acceptable to Buyer and Owner 3 (the “Owner 3 Employment Agreement”), duly executed by Buyer;

 

(v)    evidence satisfactory to Seller that Buyer has instructed the transfer agent of Buyer’s common stock to deliver the Stock Consideration issued at the Closing to Seller, in book entry form as reflected on Buyer’s transfer agent’s records and with such restricted legends as agreed by Seller Representative and Buyer;

 

(vi)    certificates of good standing, dated not more than seven (7) calendar days prior to the Closing Date, with respect to Buyer, issued by the Secretary of State of the State of Delaware;

 

(vii)    a certificate duly executed by the Secretary of Buyer, in a form acceptable to Seller Representative, dated as of the Closing, attaching and certifying on behalf of Buyer the resolutions of the board of directors (or other appropriate governing body) of Buyer authorizing the execution, delivery and performance by Buyer of the Transaction Documents to which it is a party and the transactions contemplated hereby and thereby, including the issuance of the Stock Consideration to Seller; and

 

(viii)    such other documents and instruments as required by any other provision of this Agreement or as required to consummate the transactions contemplated hereby.

 

(b)    At the Closing, Seller has delivered, or caused to be delivered, to Buyer:

 

(i)    the Escrow Agreement, duly executed by Seller;

 

(ii)    the Owner 1 Employment Agreement, duly executed by the Company and Owner 1;

 

(iii)    the Owner 2 Employment Agreement, duly executed by the Company and Owner 2;

 

(iv)    the Owner 3 Employment Agreement, duly executed by the Company and Owner 3;

 

 

(v)    documentation evidencing the Reorganization (in each case, together with any comparable forms or documentation required under similar provisions of state or local law);

 

(vi)    certificates of good standing, dated not more than seven (7) calendar days prior to the Closing Date, with respect to Seller and the Company, respectively, issued by the Secretary of State of the State of Texas;

 

(vii)    duly executed instruments of transfer with respect to the Securities, in a form acceptable to Buyer and Seller Representative;

 

(viii)    a certificate duly executed by an officer of Seller, dated as of the Closing, attaching and certifying on behalf of Seller (A) the Organizational Documents of Seller and (B) the resolutions of the board of directors and shareholders of Seller authorizing the execution, delivery and performance by Seller of the Transaction Documents to which it is a party and the transactions contemplated hereby and thereby, in a form acceptable to Buyer and Seller Representative;

 

(ix)    a certificate duly executed by an officer of the Company, dated as of the Closing, attaching and certifying on behalf of the Company (A) the Organizational Documents of the Company and (B) the resolutions of the board of managers and member of the Company authorizing the execution, delivery and performance by the Company of the Transaction Documents to which it is a party and the transactions contemplated hereby and thereby, in a form acceptable to Buyer and Seller Representative;

 

(x)    a duly completed and executed IRS Form W-9 from Seller;

 

(xi)    resignation letters from the individuals listed on Section 2.7(b)(xi) of the Disclosure Schedules;

 

(xii)    all corporate minute books, stock ledgers and stock records (or equivalent) of the Company;

 

(xiii)    customary payoff letters in respect of, and release documentation necessary to release all Liens (other than Permitted Liens) securing, in each case, all indebtedness to be paid off at Closing, duly executed by the applicable agent or lender set forth on Section 2.7(b)(xiii) of the Disclosure Schedules and in form and substance satisfactory to Buyer (collectively, the “Payoff Letters”), which (w) evidence all obligations in respect of such indebtedness (including principal, interest, fees, expenses and other amounts payable in respect thereof), (x) provide instructions for the payment of such amount to the applicable agent or lender, (y) provide that, upon receipt of such amount by the applicable agent or lender, all obligations in respect of such indebtedness shall be paid in full, all commitments related thereto shall be terminated and all guarantees in respect of, and all Liens (other than Permitted Liens) securing, in each case, such indebtedness shall be automatically terminated and released, and (z) include the agreement of the applicable agent or lenders to terminate (or give the Company or their respective representatives authorization to terminate) all UCC financing statements filed in connection with such indebtedness;

 

 

(xiv)    evidence in form and substance satisfactory to Buyer that all Transaction Costs due and payable on or before the Closing Date have been paid in full such as invoices from professional advisors, along with confirmation from them that payments have been made to them in full and that the Company and Amtran do not have any liability to them in respect of any Transaction Costs;

 

(xv)    evidence in form and substance satisfactory to Buyer that Company 401(k) Plan has been terminated effective as of immediately prior to the Closing;

 

(xvi)    all third-party consents and approvals listed on Section 2.7(b)(xvi) of the Disclosure Schedules;

 

(xvii)    a confirmatory assignment of Intellectual Property from Owner 1, Owner 2 and Owner 3 in favor of the Company in form and substance satisfactory to Buyer; and

 

(xviii)    such other documents and instruments as required by any other provision of this Agreement or as required to consummate the transactions contemplated hereby.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES RELATED TO THE SELLING PARTIES

 

Except as set forth in the Disclosure Schedules, the Selling Parties, as of the Effective Time, represent and warrant to Buyer, as follows:

 

Section 3.1    Organization. Seller is duly formed, validly existing and in good standing under the Laws of the State of Texas. Seller has all requisite organizational power and authority under those Laws and its Organizational Documents to own, lease or otherwise hold its respective properties and assets and to carry on its business as conducted as of the date hereof.

 

Section 3.2    Authorization; Enforceability; Absence of Conflicts.

 

(a)    Each Selling Party has the requisite power, capacity and authority to enter into and deliver each Transaction Document to which he, she or it is a party, and to carry out the transactions contemplated by the Transaction Documents. The execution and delivery by Seller of the Transaction Documents to which it is a party, the performance by Seller of its obligations under each Transaction Document to which it is a party in accordance with their respective terms and the consummation of the transactions contemplated by the Transaction Documents have been duly and validly authorized by all requisite organizational action of Seller and no other organizational proceeding on the part of Seller is necessary to authorize the Transaction Documents to which Seller is or will be party.

 

(b)    This Agreement has been, and each of the other Transaction Documents to which each Selling Party is or will be a party are, or when executed and delivered by the parties thereto will be, duly executed and delivered by such Selling Party and, assuming the due authorization, execution and delivery of this Agreement and such other Transaction Documents by the other parties hereto and thereto, constitutes, or upon execution will constitute, such Selling Party’s legal, valid and binding obligation, enforceable against him, her or it in accordance with its terms, except as that enforceability may be (i) limited by any applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar Laws affecting the enforcement of creditors’ rights generally and (ii) subject to general principles of equity (regardless of whether that enforceability is considered in a proceeding in equity or at law).

 

 

(c)    The execution and delivery by Seller of the Transaction Documents to which it is a party, the performance by Seller of its obligations under each Transaction Document to which Seller is a party in accordance with their respective terms and the consummation of the transactions contemplated by the Transaction Documents will not violate, breach or constitute a default under (i) the Organizational Documents of Seller or (ii) any Law applicable to Seller.

 

(d)    The execution and delivery by the Selling Parties of the Transaction Documents to which he, she, or it is a party, the performance by the Selling Parties of his, her, or its obligations under each Transaction Document to which such Selling Party is a party in accordance with their respective terms and the consummation of the transactions contemplated by the Transaction Documents will not violate, breach or constitute a default under (i) the Organizational Documents of such Selling Party, (ii) any Law applicable to such Selling Party or (iii) any material agreement of any Selling Party, except for such violations, breaches or defaults under clause (iii) that would not reasonably be expected to result in a Material Adverse Effect.

 

Section 3.3    Required Consents. No consent, approval, Permit, governmental order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Seller in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, except for such filings as may be required under the HSR Act.

 

Section 3.4    Litigation. No Proceeding is pending or, to the actual knowledge of any Selling Party, threatened, to which any Selling Party is or may become a party which (i) questions or involves the validity or enforceability of any obligation of such Selling Party under any Transaction Document, or (ii) seeks (or reasonably may be expected to seek) to prevent or delay consummation by such Selling Party of the transactions contemplated by the Transaction Documents.

 

Section 3.5    Accredited Investor.

 

(a)    Each Selling Party is an “accredited investor” (as that term is defined in Rule 501 of Regulation D under the Securities Act). Seller is acquiring the Stock Consideration for investment and not with a view toward, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling such Stock Consideration. Each Selling Party agrees that the Stock Consideration will constitute “restricted securities” (as that term is used under the Securities Act), and agrees that the Stock Consideration has not been registered under, and that the Stock Consideration may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under, the Securities Act, and any applicable foreign and state securities laws, except under an exemption from such registration under the Securities Act and such laws.

 

(b)    Each Selling Party has such knowledge and experience in business and financial matters so that such Selling Party is capable of evaluating the merits and risks of an investment in the Stock Consideration being acquired hereunder. Each Selling Party understands the full nature and risk of an investment in the Stock Consideration. Each Selling Party further acknowledges that such Selling Party has had access to the publicly available books and records of Buyer and Seller Representative has had an opportunity to ask questions concerning Buyer and the Stock Consideration.

 

 

Section 3.6    No Other Representations. Except as expressly set forth herein, all representations and warranties of the Owners relate only to the Acquired Business and the Company Employees and not to any other business, assets or employees of the Owners and their Affiliates (other than the Company and Amtran).

 

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES RELATED TO THE COMPANY AND AMTRAN

 

Except as set forth in the Disclosure Schedules, Seller, as of the Effective Time, represents and warrants to Buyer as follows, with respect to the Company and Amtran, as applicable:

 

Section 4.1    Organization; Power; Authorization.

 

(a)    Section 4.1 of the Disclosure Schedules sets forth the Organization Jurisdiction of each of the Company and Amtran, each of which is duly organized, validly existing and in good standing under the Laws of its Organization Jurisdiction, and has all requisite corporate or other entity power and authority under those Laws and its respective Organizational Documents to own, lease or otherwise hold its respective properties and assets and to carry on its business as conducted as of the date hereof. Each of the Company and Amtran is duly qualified and licensed, as may be required, and in good standing to do business in each jurisdiction in which the business it is conducting, or the operation, ownership or leasing of its properties, makes such qualification and licensing necessary, other than in such jurisdictions where the failure to be so qualified and licensed would not reasonably be expected to result in a Material Adverse Effect. Seller has made available to Buyer complete and correct copies of the Organizational Documents of the Company and Amtran, each as amended to the date hereof.

 

(b)    The Company has the requisite power, capacity and authority to enter into and deliver each Transaction Document to which it is a party, and to carry out the transactions contemplated by the Transaction Documents. The execution and delivery by the Company of the Transaction Documents to which it is a party, the performance by the Company of its obligations under each Transaction Document to which it is a party in accordance with their respective terms and the consummation of the transactions contemplated by the Transaction Documents have been duly and validly authorized by all requisite organizational action of the Company and no other organizational proceeding on the part of the Company is necessary to authorize the Transaction Documents to which the Company is or will be party.

 

(c)    This Agreement has been, and each of the other Transaction Documents to which the Company is or will be a party are, or when executed and delivered by the parties thereto will be, duly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement and such other Transaction Documents by the other parties hereto and thereto, constitutes, or upon execution will constitute, the Company’s legal, valid and binding obligation, enforceable against it in accordance with its terms, except as that enforceability may be (i) limited by any applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar Laws affecting the enforcement of creditors’ rights generally and (ii) subject to general principles of equity (regardless of whether that enforceability is considered in a proceeding in equity or at law).

 

 

(d)    Except as set forth in Section 4.2(b) of the Disclosure Schedules, neither the execution and delivery of this Agreement and the other Transaction Documents to which the Company is a party, nor the performance by the Company of the transactions contemplated hereby or thereby, will:

 

(i)    violate or conflict with, or result in a breach of, any of the terms, conditions or provisions of the Organizational Documents of the Company

 

(ii)    violate or conflict with, or result in a breach of, any Law;

 

(iii)    violate, conflict with, result in a breach of, or constitute (with or without notice or lapse of time or both) a default under, or an event which would give rise to any right of notice, modification, acceleration, payment, cancellation or termination under, or in any manner release any party thereto from any obligation under, any Permit or Contract to which the Company is a party or by which the properties or assets of the Company are bound; or

 

(iv)    result in the creation or imposition of any Lien upon any properties or assets of the Company.

 

Section 4.2    Required Consents.

 

(a)    Except as such filings may be required under the HSR Act and except as set forth on Section 4.2(a) of the Disclosure Schedules, no Law requires the Company or Amtran to obtain any Permit, or make any filings, including any report or notice, with any Governmental Authority, in connection with the execution, delivery or performance by Seller of the Transaction Documents to which it is a party, the enforcement against it of its obligations thereunder or the consummation of the transactions contemplated by the Transaction Documents.

 

(b)    Except as set forth in Section 4.2(b) of the Disclosure Schedules, no Contract or arrangement to which the Company or Amtran is a party or is bound or to which any of the Company’s or Amtran’s assets are subject, requires the Company or Amtran, as applicable, to obtain any Consent from any Person other than a Governmental Authority in connection with the execution, delivery or performance by the Company or Amtran of the Transaction Documents to which it is a party, the enforcement against the Company or Amtran of their obligations thereunder or the consummation of the transactions contemplated by the Transaction Documents.

 

Section 4.3    Capitalization.

 

(a)    Seller holds of record, owns beneficially, and has good and valid title to the Securities, free and clear of all Liens (other than Permitted Equity Liens and Liens in effect on or prior to the Closing Date that will be released upon payment of the Purchase Price). The Company owns 40% of the issued and outstanding Capital Stock of Amtran, free and clear of all Liens (other than Permitted Equity Liens and Liens in effect on or prior to the Closing Date that will be released upon payment of the Purchase Price).

 

 

(b)    Except as disclosed in Section 4.3 of the Disclosure Schedules or as set forth in the Organizational Documents of the Company or Amtran: (a) no Capital Stock of the Company or Amtran is reserved for issuance or is held in treasury; (b) no Capital Stock of the Company or Amtran is subject to pre-emptive rights, rights of first refusal, tag-along rights, drag-along rights, proxies, voting trusts, stockholder agreements or other similar agreements or understandings in effect to which the Company or Amtran is a party with respect to the voting or transfer of such Capital Stock; (c) there are no outstanding subscriptions, options, warrants, rights, calls, conversion rights, rights of exchange, convertible or exchangeable securities or other plans or commitments, contingent or otherwise, relating to the Capital Stock of the Company or Amtran other than as contemplated by this Agreement; (d) there are no outstanding contracts or other agreements of the Company or Amtran, or, to the knowledge of Seller, of Seller or any other Person, to purchase, redeem or otherwise acquire any outstanding Capital Stock of the Company or Amtran, or securities or obligations of any kind convertible into any Capital Stock of the Company or Amtran; and (e) there are no outstanding or authorized equity appreciation, phantom equity, equity incentive plans or similar rights with respect to the Company or Amtran.

 

Section 4.4    Subsidiary. Except for the Company’s ownership interests in Amtran, neither the Company nor Amtran own, directly or indirectly, any Capital Stock in any other Entity.

 

Section 4.5    Assets.

 

(a)    The assets, property, rights, agreements and interests of the Company and Amtran constitute all of the assets, properties and rights of every type and description, whether real or personal, tangible or intangible, used or held for use, and are sufficient in all material respects to conduct the Acquired Business after the Closing consistent with past practices.

 

(b)    Except as set forth in Section 4.5(b) of the Disclosure Schedules, the Company and Amtran have good and valid title to, or a valid leasehold interest in, all of their respective tangible personal property and assets reflected in the Latest Balance Sheet, free and clear of all Liens (other than Permitted Liens), other than property or assets sold or otherwise disposed of in the Ordinary Course of Business since the Financial Information Date.

 

(c)    All of the material tangible personal property of the Company and Amtran currently used in the Acquired Business is in good condition and repair, ordinary wear and tear excepted. Immediately following the Closing, all of the assets of the Company and Amtran will be owned, leased or available for use by the Company and Amtran on terms and conditions substantially identical to those under which, immediately prior to the Closing, the Company and Amtran own, lease or use such assets. Except as set forth in Section 4.5(c) of the Disclosure Schedules, all tangible assets of the Company and Amtran (including inventory) are located on the Leased Real Property, other than goods or materials in transit.

 

(d)    Seller does not conduct any business or own any assets other than its ownership of all of the issued and outstanding shares of the Company.

 

Section 4.6    Real Property.

 

(a)    Neither the Company nor Amtran owns any real property.

 

 

(b)    Section 4.6(b) of the Disclosure Schedules contains, as of the date of this Agreement, a list of all real property leased by the Company and Amtran, including with respect to each Real Property Lease, the street address of the parcel of real property to which such Real Property Lease relates, the landlord under such Real Property Lease, whether such landlord is affiliated with the Company, Amtran or any of their respective Affiliates, the basic monthly rent and other amounts paid or payable with respect thereto, the expiration of the term of such Lease, the current use of such property, and any purchase options exercised or exercisable by the Company or Amtran. Seller has delivered or made available to Buyer true, complete and correct copies of all Real Property Leases.

 

(c)    Except as set forth in Section 4.6(c) of the Disclosure Schedules, each of the Company and Amtran (i) has a good and valid leasehold interest in the Leased Real Property, including facilities, structures and other improvements thereon, in each case free and clear of Liens other than Permitted Liens, and (ii) is the holder and enjoys the benefit of the easements and similar rights that the Company and Amtran purport to hold or to which the Company and Amtran purport to have any rights, and the rights of the Company and Amtran with respect to each such easement or similar right are in full force and effect.

 

(d)    The Leased Real Property constitutes the only real property used, occupied or held for use by the Company in connection with the Acquired Business or which is necessary for the continued operation of the Acquired Business as currently conducted.

 

(e)    Except for the Real Property Leases, there are no leases, subleases, licenses, concessions or other agreements, written or oral, granting to any party the right of use or occupancy of any portion of any parcel of the Leased Real Property. To the knowledge of Seller, no other party to any Real Property Lease is in material breach of or default under any Real Property Lease. The execution and delivery of this Agreement and the consummation of the transactions hereunder will not result in the termination of any Real Property Lease, and immediately after the Closing all Real Property Leases will continue in full force and effect, and except as otherwise required under any Real Property Lease, create an imposition of any material and burdensome condition or other obligation on Buyer.

 

(f)    Neither the Company nor Amtran has any past due obligation as lessee under any Real Property Lease.

 

(g)    There are no outstanding actions, disputes, litigation, or investigations in relation to any Leased Real Property.

 

(h)    There is no pending, or, to the knowledge of Seller, threatened condemnation or other governmental taking of any Leased Real Property or any part thereof.

 

Section 4.7    Transactions with Affiliates. Section 4.7 of the Disclosure Schedules sets forth a complete list of any contract or agreement during the past four (4) years preceding the date hereof with continuing effect as of the date hereof between (a) the Company or Amtran, on the one hand, and (b)(i) Seller or any Owner or Affiliate of Seller or any Owner (other than the Company or Amtran), other than any contract or agreement contemplated by this Agreement, (ii) any officer, shareholder, member or director of the Company or Amtran, or (iii) to the extent a Person in (i) or (ii) is a natural person, any Person who has any direct or indirect relation by blood, marriage or adoption to them. Neither Seller or any Owner, nor any Affiliate of Seller or Owner (other than the Company and Amtran) (x) owns any material properties, assets or rights that are used by the Company or Amtran, except as may be listed on Section 4.7(a)(x) of the Disclosure Schedules; (y) owes any money to, or is owed any money by, the Company or Amtran (except with respect to compensation or expense reimbursement received as employees, consultants or directors in the Ordinary Course of Business); or (z) has asserted any claim or cause of action against the Company or Amtran.

 

 

Section 4.8    Litigation.

 

(a)    No Proceeding is pending or, to the knowledge of Seller, threatened, to which the Company is or may become a party which (i) questions or involves the validity or enforceability of any obligation of the Company under any Transaction Document, or (ii) seeks (or reasonably may be expected to seek) to prevent or delay consummation by the Company of the transactions contemplated by the Transaction Documents.

 

(b)    Except as set forth in Section 4.8(b) of the Disclosure Schedules, as of the date of this Agreement, there is no, and there has not been in the five years prior to the date of this Agreement, any Proceeding directed against the Company or Amtran or affecting any of the officers, directors, managers, equityholders or employees of the Company or Amtran in their capacities as such, or pending or, to the knowledge of Seller, threatened by the Company or Amtran against any Person, at law or in equity, or before or by any Governmental Authority. The Company and Amtran, as applicable, is fully insured with respect to each of the matters set forth on Section 4.8(b) of the Disclosure Schedules.

 

(c)    Except as set forth in Section 4.8(c) of the Disclosure Schedules, neither the Company nor Amtran is subject to any judgment, award, order, decree, consent, notice, ruling, decision, determination, verdict, sentence, subpoena, civil investigative demand, writ or injunction issued, made, entered, rendered or otherwise put into effect by or under the authority of any Governmental Authority.

 

Section 4.9    Absence of Certain Changes.

 

(a)    Except for the Reorganization or as set forth in Section 4.9(a) of the Disclosure Schedules, since December 31, 2023, (i) the Company and Amtran have conducted the Acquired Business only in the Ordinary Course of Business, and (ii) there has been no event, change or circumstance which, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect.

 

(b)    Without limiting the generality of the foregoing, except as set forth in Section 4.9(b) of the Disclosure Schedules, since December 31, 2023, each of the Company and Amtran has:

 

(i)    not sold, assigned, transferred, disposed of, or abandoned any property, rights or assets, except for the sale of inventory in the Ordinary Course of Business consistent with past practice, or mortgaged, pledged or subjected any property, right or assets to any Lien (other than Permitted Liens), charge or other restriction;

 

 

(ii)    not sold, assigned, transferred, disposed of, or abandoned or permitted to lapse any Permits, any Intellectual Property or any other intangible assets, or disclosed any confidential or proprietary information of the Company or Amtran to any Person (excluding Persons under an agreement or obligation of confidentiality), granted any license or sublicense of any rights under or with respect to any Intellectual Property;

 

(iii)    not made or granted, or made any promise to make or grant, any increase in the compensation of any employee with annual compensation of $50,000 or more, or amended or terminated any existing employee plan, program, policy or arrangement, including any Employee Plan, or adopted any new Employee Plan, or hired or engaged any employee or independent contractor with annual compensation of $50,000 or more;

 

(iv)    not terminated any key employee, senior executive or director (or equivalent board member), and no key employee, senior executive or director (or equivalent board member) has resigned, or has provided written notification to the Company or Amtran of their intention to resign, from the Company or Amtran;

 

(v)    conducted its cash management customs and practices (including the timing of, invoicing and collection of receivables and the accrual and payment of payables and other current liabilities) and maintained the books and records of the Company and Amtran in the Ordinary Course of Business;

 

(vi)    not made any loans or advances to, or guarantees for the benefit of, or entered into any transaction or agreement with, any Affiliate, Owner or Affiliate of any Owner;

 

(vii)    not suffered any loss, damage, destruction or casualty loss to the Acquired Business or the properties or assets of the Company or Amtran in excess of $25,000, or canceled, compromised, released or waived any rights or claims of value, whether or not covered by insurance and whether or not in the Ordinary Course of Business;

 

(viii)    not adopted or changed any financial reporting or accounting policy, period, method or practice, including any method of calculating any bad debt, contingency or other reserve for accounting or financial reporting purposes or its fiscal year;

 

(ix)    not declared, set aside or paid any dividend or distribution of cash, capital stock or other property or securities in respect of its capital stock or other equity interests or purchased, redeemed or otherwise acquired any shares of its capital stock or equity interests or other securities;

 

(x)    not amended, canceled, terminated, modified or waived any Material Agreement, except for any amendment, modification or waiver made available to Buyer and which would not reasonably be expected to result in a Material Adverse Effect;

 

(xi)    not issued, delivered, sold, pledged or otherwise encumbered any shares of its Capital Stock, any other equity or voting interests or any securities convertible into, or exchangeable for, or any options, warrants, calls or rights to acquire or receive any such shares, interests or securities or any stock appreciation rights, phantom stock awards or other rights;

 

 

(xii)    except in connection with the Reorganization, has not amended or taken any action to amend its Organizational Documents, or engaged in any merger, consolidation, reorganization, reclassification, liquidation, dissolution or similar transaction;

 

(xiii)    not acquired by merger or consolidation, or by purchasing all or a substantial portion of the assets of, or by purchasing all or a substantial equity or voting interest in, or by any other manner, all or a substantial portion of any business or entity or division thereof;

 

(xiv)    not commenced, waived, paid, discharged or settled any Proceeding;

 

(xv)    not adopted or entered into any collective bargaining agreement or other labor union agreement applicable to the employees of the Company or Amtran;

 

(xvi)    not made any capital expenditure or commitments therefor that deviate from the annual capital expenditures budget for the Company that has been provided to Buyer or that are otherwise in excess of $150,000 in the aggregate, or delayed, postponed or cancelled any planned, budgeted, necessary or routine capital expenditures;

 

(xvii)    paid any amount to induce a third party to enter into an agreement;

 

(xviii)    not incurred any indebtedness other than indebtedness incurred in the Ordinary Course of Business;

 

(xix)    not made, modified, or rescinded any Tax election (other than the making of the QSub Election), changed any annual Tax accounting period, adopted or changed any method of Tax accounting or reversed any accruals (except as required by a change in Law or US GAAP or Indian Accounting Standards), filed any amended Tax Returns, signed or entered into any closing agreement or settlement, settled or compromised any claim or assessment of Tax Liability, surrendered any right to claim a refund, offset or other reduction in Liability, consented to any extension or waiver of the limitations period applicable to any claim or assessment, in each case with respect to Taxes, or acted or omitted to act where such action or omission to act could reasonably be expected to have the effect of increasing any present or future Tax Liability or decreasing any present or future Tax benefit for the Company, Amtran, Buyer or Buyer’s Affiliates;

 

(xx)    waived or released any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any current or former employee or independent contractor;

 

(xxi)    sold, disposed of, assigned, licensed, sublicensed, covenanted not to sue with respect to, subjected to any Lien (other than Permitted Liens), or otherwise transferred any Intellectual Property rights, or abandoned or permitted to lapse or expire any Intellectual Property rights;

 

 

(xxii)    except in connection with the transactions contemplated in this Agreement, disclosed any trade secrets or other material confidential information of Company or Amtran, other than pursuant to a written confidentiality agreement entered into in the Ordinary Course of Business with reasonable protections of, and preserving all rights of the Company or Amtran, as applicable, in, such trade secrets and other confidential information of Company or Amtran;

 

(xxiii)    not entered into any Contract to do or engage in any of the foregoing.

 

Section 4.10    Compliance with Law. Except as set forth in Section 4.10 of the Disclosure Schedules, (a) neither the Company nor Amtran is, nor during the past five (5) years preceding the date hereof have they been, in violation in any material respect of any Applicable Law, and (b) neither the Company nor Amtran has received written notice of any such violation. The Company has not been advised by its accountants that the Company’s procedures and internal controls are not sufficient to provide reasonable assurances that violations of Applicable Laws would be prevented, detected and deterred.

 

Section 4.11    Permits.

 

(a)    Each of the Company and Amtran holds the Permits required or necessary to conduct its business as currently conducted, and all of which are listed in Section 4.11(a) of the Disclosure Schedules, provided, that, no representation or warranty in this Section 4.11 is made with respect to Permits issued pursuant to Environmental Laws, which are covered exclusively in Section 4.16.

 

(b)    Except as set forth in Section 4.11(b) of the Disclosure Schedules, each of the Company and Amtran is, and during the five (5) years preceding the date hereof has been, in compliance with all Permits set forth in Section 4.11(a) of the Disclosure Schedules, all of which are validly subsisting, binding and in full force and effect. Except as set forth in Section 4.11(b) of the Disclosure Schedules, neither the Company nor Amtran has received any written notice regarding any actual, alleged or potential failure to comply with any Permit, and, to the knowledge of Seller, no Proceeding is threatened to revoke, suspend, terminate, cancel, withdraw or limit any such Permits. Except as set forth in Section 4.11(b) of the Disclosure Schedules, the Company and Amtran have obtained all required material Permits for the conduct and operation of the Company and Amtran as currently conducted in the jurisdictions in which the Company and Amtran operate.

 

 

Section 4.12    Certain Business Practices.

 

(a)    The Company, Amtran, their respective Representatives, and any other Person acting for or on behalf of or otherwise associated with the Company or Amtran is and has been in material compliance with all applicable Laws relating to the prevention of corruption or bribery (including the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.S. Anti-Kickback Act of 1986, as amended, and the UK Bribery Act 2010, and any other applicable Laws of similar effect promulgated, enforced, or administered by any Governmental Authority in the jurisdictions where the Company or Amtran conducts business (collectively, “Anti-Corruption Laws”)). Neither the Company, Amtran, their respective Representatives, nor any other Person acting for or on behalf of or otherwise associated with the Company or Amtran has, directly or indirectly, in furtherance of or in connection with the Acquired Business (a) used corporate funds (i) to make any unlawful payment to any government official or employee (including unreported political contributions, gifts, or entertainment), or (ii) to establish or maintain any unlawful or unrecorded fund or account of any nature; (b) made any unlawful payment (including bribes, rebates, payoffs, or kickbacks) to any Person, or unlawfully provided anything of value (whether as property, services, or in any other form) to any Person, for the purpose of obtaining an improper business advantage (including influencing any representative or employee of any foreign, federal, state, or local Governmental Authority in the performance of his or her public functions); (c) requested, agreed to receive or accepted any financial or other advantage or inducement where such request, agreement to receive or acceptance would be improper or likely to influence such Person in the performance of his, her or its role; (d) agreed, committed, or offered to undertake any of the foregoing actions; or (e) otherwise taken any action that would constitute a violation of any Anti-Corruption Laws. For purposes of this Section 4.12, the phrase “associated with” a Person has the meaning given to it within the U.K. Bribery Act. Within the five (5) years prior to the date hereof, neither the Company, Amtran nor any Representative of, or other Person associated with, the Company or Amtran, has received any notice, inquiry, or internal or external allegation; made any voluntary or involuntary disclosure to any Governmental Authority; or conducted any internal investigation or audit concerning any actual or potential violation or wrongdoing related to Anti-Corruption Laws, and no event has occurred or circumstance exists that is likely to give rise to any such investigation or Proceeding by any Governmental Authority regarding any offense or alleged offense under anti-bribery, anti-corruption or anti-fraud legislation. There is no Proceeding pending or, to the knowledge of Seller, threatened against the Company, Amtran or any Representative of, or other Person associated with, the Company or Amtran before any court or other Governmental Authority with respect to any Anti-Corruption Laws. The Company and Amtran are not ineligible to be awarded any contract or business under subpart 9.4 of the U.S. Federal Acquisition Regulation 2005, any Law enacted pursuant to Article 45 of the Public Sector Procurement Directive (Directive 2004/18/EC) or any similar Law governing eligibility for public procurement contracts in any jurisdiction. The Company and Amtran have implemented and maintains in effect written policies, procedures and internal controls, including an internal accounting controls system, that are reasonably designed to prevent, deter and detect violations of Anti-Corruption Laws. A true, correct and complete copy of any Anti-Corruption Laws policies and procedures adopted by the Company and Amtran are listed on Section 4.12(a) of the Disclosure Schedules and have been furnished to, or made available to Buyer.

 

(b)    Each of the Company, Amtran and any director, officer or employee of the Company or Amtran and any other Person acting for or on behalf of the Company or Amtran is and has been in compliance with all applicable U.S. and other applicable economic sanctions and export control laws, including (i) the Export Administration Regulations, 15 C.F.R. §§ 730-774; (ii) the Arms Export Control Act, 22 U.S.C. § 2778, and the corresponding International Traffic in Arms Regulations; (iii) the economic sanctions laws and regulations enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), 31 C.F.R. Part 500 et seq., and the U.S. Department of State; (iv) the anti-boycott regulations, guidelines, and reporting requirements under the Export Administration Regulations and Section 999 of the Internal Revenue Service Code; and (v) any other economic sanctions or export control Laws applicable to the Company or Amtran (collectively, “Export Control Laws”). There is no Proceeding pending, or to the knowledge of Seller, threatened in writing against the Company or Amtran before any court or other Governmental Authority with respect to any Export Control Laws.

 

 

(c)    The Company, Amtran and any director, manager, officer or employee of the Company or Amtran and any other Person acting for or on behalf of the Company or Amtran is and has been in compliance with all applicable U.S. and other laws related to terrorism or money laundering during the last five (5) years, including (i) the Currency and Foreign Transactions Reporting Act of 1970 (31 U.S.C. §§ 5311 et. seq., (the Bank Secrecy Act)), as amended by Title III of the USA PATRIOT Act, (ii) the Trading with the Enemy Act, (iii) Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (66 Fed. Reg. 49079), and (iv) any other enabling legislation, executive order or regulations issued pursuant or relating thereto (collectively, “Anti-Money Laundering Laws”). There is no Proceeding pending, or to the knowledge of Seller, threatened in writing against the Company or Amtran before any court or other Governmental Authority with respect to any Anti-Money Laundering Laws.

 

(d)    The Company, Amtran and any director, manager, officer or employee of the Company or Amtran and any other Person acting for or on behalf of the Company or Amtran is and has been in compliance with all applicable U.S. and other applicable laws governing the classification, valuation, duties, origination, and marking of foreign-origin products imported into the United States and other relevant jurisdictions (collectively, “Customs Laws”), as well as any similar requirements imposed under bilateral or multilateral Free Trade Agreements to which the United States is a party (“FTAs”). There is no Proceeding pending or, the knowledge of Seller, threatened in writing against the Company or Amtran before any court or other Governmental Authority with respect to any Customs Laws or FTAs.

 

(e)    Neither the Company or Amtran, nor any director, manager, officer or employee of the Company or Amtran or any other Person acting for or on behalf of the Company or Amtran (i) has been or is currently subject to any U.S. sanctions administered by OFAC, (ii) has engaged or is currently engaging in any business or other dealings with, in, involving or relating to any country or Person currently subject to any U.S. sanctions administered by OFAC, or (iii) is otherwise in violation of applicable Customs Laws, Anti-Money Laundering Laws, Export Control Laws, or other international trade compliance laws.

 

(f)    Neither the Company nor Amtran has, in connection with or relating to the Acquired Business, received from any Governmental Entity or any other Person any notice, inquiry or internal or external allegation, made any voluntary or involuntary disclosure to a Governmental Entity or conducted any internal investigation or audit concerning any actual or potential violation or wrongdoing related to Customs Laws, Anti-Money Laundering Laws, Export Control Laws, or other international trade compliance laws.

 

Section 4.13    Material Agreements.

 

(a)    Section 4.13(a) of the Disclosure Schedules lists, as of the date of this Agreement, each written contract or agreement related to the Company and Amtran and to which the Company or Amtran is a party (each such written contract or agreement, a “Material Agreement”):

 

(i)    each agreement of the Company or Amtran involving a purchase price in excess of $200,000 or requiring performance by any party more than one year from the date hereof, which, in each case, cannot be cancelled by the Company or Amtran, as the case may be, without penalty or without more than 90 days’ notice;

 

 

(ii)    all agreements that relate to the sale of any of the Company’s or Amtran’s assets, other than in the Ordinary Course of Business, for consideration in excess of $200,000;

 

(iii)    all agreements that relate to the acquisition of any business, a material amount of stock or assets of any other Person or any real property (whether by merger, sale of stock, sale of assets or otherwise), in each case involving amounts in excess of $200,000;

 

(iv)    except for agreements relating to trade payables, all agreements relating to indebtedness of the Company or Amtran, in each case having an outstanding principal amount in excess of $200,000;

 

(v)    all agreements between or among the Company or Amtran on the one hand and a Selling Party or any Affiliate of such Selling Party (other than the Company, Amtran, or Narayan Powertech PVT, Ltd.) on the other hand;

 

(vi)    all collective bargaining agreements or agreements with any labor organization, union or association to which the Company or Amtran is a party;

 

(vii)    all agreements that restrict the Company or Amtran, or any of their Affiliates, from competing with or engaging in any business activity anywhere in the world, or agreements that include supply or exclusivity provision or any “most favored nation,” “most favored pricing” or similar clause;

 

(viii)    all agreements concerning joint venture or partnership agreements, or the sharing of profits;

 

(ix)    all agreements with respect to the lease of Leased Real Property (the “Real Property Leases”);

 

(x)    all agreements with respect to the lease of personal property in excess of $75,000 per annum or $150,000 in the aggregate;

 

(xi)    all agreements with any Governmental Authority;

 

(xii)    all Government Contracts;

 

(xiii)    all agreements that contain any fixed or indexed pricing, “most-favored nation” pricing or similar pricing terms or provisions regarding minimum volumes, volume discounts, or rebates;

 

(xiv)    all agreements that, together with any related Material Agreements, provide for capital expenditures in excess of $100,000 for any single project or related series of projects (including a schedule of the amount of capital expenditures provided for pursuant to each such agreement);

 

 

(xv)    all agreements that provide for indemnification of a third party by the Company or Amtran;

 

(xvi)    all agreements with any Material Customer or Material Vendor;

 

(xvii)    (A) all agreements for the engagement or employment of any former (to the extent of any ongoing liability) or current officer, director, manager, employee or other Person on a full-time, part-time, individual consulting or other basis with annual compensation in excess of $200,000 (except for any arrangements that can be terminated “at will” without any liability for severance or termination pay or any other obligations), (B) all agreements providing for the payment, in excess of $200,000, in relation to severance or a retention or any agreement providing for the payment of any cash or other compensation or benefits upon the consummation of the transactions contemplated hereby, (C) any indemnification, “change in control”, restrictive covenant, proprietary information and inventions assignment, or other ancillary agreement or Contract with any directors, managers, officers, employees, or independent contractors of the Company or Amtran, or (D) any agreement relating to loans, in excess of $200,000, to any former (to the extent of any ongoing liability) or current employee, officer, manager, director or Affiliate;

 

(xviii)    all agreements or arrangements requiring the consent of any party thereto or containing any provision that would result in an acceleration, modification or termination of any rights or obligations of any party thereto upon, or providing any party thereto any remedy (including rescission or liquidated damages) in the event of, a direct or indirect change in control of any Person or the consummation of the transactions contemplated by this Agreement;

 

(xix)    all nondisclosure, noncompete or confidentiality agreements or agreements regarding ownership and rights with regard to work produced by employees, contractors or consultants of the Company or Amtran;

 

(xx)    all agreements under which the Company or Amtran has advanced or loaned monies to any other Person or otherwise agreed to advance, loan or invest any funds (other than business expense advances to employees in the Ordinary Course of Business not in excess of $50,000 individually or $200,000 in the aggregate);

 

(xxi)    all settlement, conciliation or similar agreements with any Governmental Authority or pursuant to which the Company or Amtran will have outstanding obligations, in excess of $200,000, after the date of this Agreement;

 

(xxii)    all powers of attorney or other similar agreement or grant of agency; or

 

(xxiii)    any other agreement entered into outside the Ordinary Course of Business that is in effect with ongoing obligations and that is material to the operations or business of the Company or Amtran.

 

 

(b)    Correct and complete copies of the Material Agreements listed (or required to be listed) in Section 4.13(a) of the Disclosure Schedules, together with all modifications and amendments thereto, have been delivered or made available to Buyer, except as set forth in Section 4.13(b) of the Disclosure Schedules. Neither the Company nor Amtran have received a notice of default, nor has any event occurred, to the knowledge of Seller, which with the giving of notice or the passage of time or both would constitute a default by the Company or Amtran, or which would give rise to any right of notice, modification, acceleration, payment, cancellation or termination of or by another party under, or in any manner release any party thereto from any obligation under, any Material Agreement and, to the knowledge of Seller, (i) no other party is in default, nor (ii) has any event occurred which with the giving of notice or the passage of time or both would constitute a default by any other party or which would give rise to any right of notice, modification, acceleration, payment, cancellation or termination of or by the Company or Amtran under, or in any manner release any party thereto from any obligation under, any such Material Agreement. Each of the Material Agreements is in full force and effect, is valid and enforceable in accordance with its terms against the Company or Amtran, as applicable, and to the knowledge of Seller, against the other party to the Material Agreement, and is not subject to any claims, charges, set-offs or defenses. Neither the Company nor Amtran has modified, supplemented or amended any Material Agreement, or waived performance by any other party thereto of any covenant thereunder. Neither the Company nor Amtran has received any written notice of, nor to the has any other party made the Company or Amtran aware of, the decision or intention of any other party thereto to cancel, terminate or not renew any Material Agreement, whether in accordance with the terms of the respective Material Agreement or otherwise. To the knowledge of Seller, during the preceding five (5) years, no party to any of the Material Agreements has ever challenged or disputed any Material Agreement or otherwise taken any action against the Company or Amtran (in writing or otherwise) claiming that the Company or Amtran is in material breach of such Material Agreement.

 

Section 4.14    Employee Matters.

 

(a)    Section 4.14(a) of the Disclosure Schedules lists, as of the date of this Agreement, the name, job title, hourly rate or annual base salary (as applicable), hire date, accrued but unused vacation days or other paid time off and, country and state of employment, whether exempt or non-exempt or classified as a workman or non-workman (as applicable), leave status (if applicable, including type of leave, date leave began and expected date of return), work permits and visa status (if applicable) (as of the date shown in Section 4.14(a) of the Disclosure Schedules) of each Company Employee.

 

(b)    Section 4.14(b)(i) of the Disclosure Schedules sets forth a complete and accurate list of each Employee Plan of the Company and Amtran. Section 4.14(b)(ii) of the Disclosure Schedules sets forth a complete and accurate list of each Employment Agreement with any Company Employee or former Company Employee pursuant to which there are continuing obligations.

 

 

(c)    The Company has delivered correct and complete copies to Buyer of (i) each written Employee Plan, as amended to the Closing, together with financial statements and actuarial reports for the three (3) most recent plan years, if applicable; (ii) each funding vehicle with respect to each Employee Plan, including all amendments; (iii) the most recent and any other determination letter, ruling or notice issued by any Governmental Authority with respect to each Employee Plan; (iv) the Form 5500 Annual Report (or evidence of any applicable exemption), including all schedules and attachments, for the three (3) most recent plan years for each Employee Plan; (v) the most recent summary plan description and any summary of material modifications thereto which relates to any for each Employee Plan; (vi) any material correspondence with any Governmental Authority regarding any Employee Plan; (vii) each other document, explanation or communication which describes any relevant aspect of any Employee Plan that is not disclosed in previously delivered materials; and (viii) any other documents, forms or other instruments reasonably requested by Buyer. A description of any unwritten Employee Plan, including a description of any material terms of such plan, is set forth on Section 4.14(c) of the Disclosure Schedules.

 

(d)    With respect to each Employee Plan of the Company that is intended to qualify under Section 401(a) or 401(k) of the Code, such plan has received a favorable determination letter (or in the case of a master or prototype plan, a favorable opinion letter, or in the case of a volume submitted plan, a favorable advisory letter) from the Internal Revenue Service with respect to its qualification, and its related trust has been determined to be exempt from tax under Section 501(a) of the Code, such plan is so qualified and, to the knowledge of Seller, nothing has occurred since the date of such letter that would reasonably be expected to materially and adversely affect such qualification or exemption.

 

(e)    With respect to each Employee Plan, as of the date of this Agreement, (i) each such plan has been administered in material compliance with its terms and Applicable Laws; (ii) the Company, Amtran and any ERISA Affiliate has not engaged in any transaction or acted or failed to act in any manner that would subject the Company to any Liability for a breach of fiduciary duty under ERISA; (iii) no disputes, government audits, examinations or, to the knowledge of Seller, investigations are pending or, to the knowledge of Seller, threatened in writing other than ordinary claims for benefits; (iv) the Company has not engaged in any transaction in violation of Section 406(a) or (b) of ERISA or Section 4975 of the Code for which no exemption exists under Section 408 of ERISA or Section 4975(c) or 4975(d) of the Code; (v) all contributions, premiums or payments due have been made on a timely basis or have been properly recorded on the books of the Company; (vi) with respect to the Company, the minimum funding standards (within the meaning of Sections 412 and 430 of the Code or Section 302 of ERISA) are satisfied, whether or not waived, and no application for a waiver of the minimum funding standard has been submitted to the Internal Revenue Service; (vii) no reportable event within the meaning of Section 4043(c) of ERISA for which the 30-day notice requirement has not been waived has occurred within the one-year period prior to the date of this Agreement; (viii) no Liability (other than for premiums to the Pension Benefit Guaranty Corporation (the “PBGC”)) under Title IV of ERISA has been or is reasonably expected to be incurred by the Company or any ERISA Affiliate, and all premiums to the PBGC have been timely paid in full; (ix) the PBGC has not instituted proceedings to terminate any Employee Plan that is subject to Title IV of ERISA; (x) no Employee Plan is currently, or is reasonably expected to be, in “at-risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code); and (xi) no events have occurred that could result in a payment by or assessment against the Company or Seller of any excise taxes under Section 4972, 4975, 4976, 4979, 4980B, 4980D, 4980E or 5000 of the Code. For purposes of this Agreement, “ERISA Affiliate” means any trade or business, whether or not incorporated, which together with the Company would be deemed a single employer within the meaning of Section 414 of the Code or Section 4001(b)(1) of ERISA.

 

 

(f)    None of the Company, Seller or, to the knowledge of Seller, any ERISA Affiliate has at any time participated in or made contributions to or has had or may reasonably be expected to have any other Liabilities or potential Liabilities (contingent or otherwise) with respect to an “employee benefit plan” (as defined in Section 3(3) of ERISA) which is or was (i) a “multiemployer plan” (as defined in Section 3(37) or 4001(a)(3) of ERISA), (ii) a “multiple employer plan” (within the meaning of Code Section 413(c)), (iii) a “multiple employer welfare arrangement” (within the meaning of Section 3(40) of ERISA), (iv) subject to Section 302 or Title IV of ERISA or Section 412 of the Code, or (v) a “voluntary employees’ beneficiary association” within the meaning of Section 509(c)(9) of the Code or other funding arrangement for the provision of welfare benefits (such disclosure to include the amount of any such funding).

 

(g)    No Employee Plan provides medical, health, life insurance or other welfare-type benefits to retirees or former employees, owners or consultants or individuals who terminate (or have terminated) employment with the Company or any ERISA Affiliate, or the spouses or dependents of any of the foregoing (except for limited continued medical benefit coverage for former employees, their spouses and other dependents as required to be provided under Section 4980B of the Code or Part 6 of Subtitle B of Title I of ERISA (“COBRA”) or applicable similar state law and at the sole cost of such former employee, spouse or other dependent).

 

(h)    With respect to all periods prior to the Closing, the requirements of COBRA and the Health Insurance Portability and Accountability Act of 1996, as amended, and any similar applicable state laws have, in all material respects been complied with and satisfied with respect to each applicable Employee Plan.

 

(i)    Each Employee Plan of the Company that is a “non-qualified deferred compensation plan” (as such term is defined in Section 409A(d)(1) of the Code) has been in a written form and administered in such a manner that complies with the requirements of Section 409A of the Code and final regulations issued and outstanding thereunder such that, in the event of an audit by the Internal Revenue Service of the Company or any individual participating in such Employee Plan, the additional tax described in Section 409A(1)(B) of the Code would not be assessed against any participant with respect to benefits due or accruing thereunder. The Company is not under an obligation to gross-up any payment due to any Person for additional taxes due pursuant to Section 409A of the Code.

 

(j)    To the knowledge of Seller, the Company has, for purposes of each relevant Employee Plan, correctly classified those individuals performing services for the Company as common law employees, leased employees, independent contractors or agents of the Company.

 

(k)    There currently is not and never has been any Employee Plan of the Company that is or has been subject to the Laws of a jurisdiction other than the United States.

 

(l)    Neither the Company nor Amtran is, or since January 1, 2018 has been, subject to any agreement with any labor union or employee association and neither the Company nor Amtran has, since January 1, 2018, made any commitment to or conducted negotiations with any labor union or employee association with respect to any future agreement and there is no current, and since January 1, 2018, there has not been any pending or, to the knowledge of Seller, threatened attempt to organize, certify or establish any labor union or employee association or any strike, work stoppage, slowdown, lockout, or other material labor dispute.

 

 

(m)    Except as otherwise provided for under the terms of this Agreement, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in combination with another event): (i) result in any payment becoming due, or increase the amount of any compensation due, to any employee or former employee of the Company or any ERISA Affiliate; (ii) increase any benefits otherwise payable under any Employee Plan; (iii) result in the acceleration of the time of payment or vesting of any such compensation or benefits; (iv) result in the payment of any amount that could, individually or in combination with any other such payment, constitute an “excess parachute payment,” as defined in 280G(b)(1) of the Code; (v) result in the triggering or imposition of any restrictions or limitations on the rights of the Company or any other Person to amend or terminate any Employee Plan; or (vi) entitle the recipient of any payment or benefit to receive a “gross up” payment for any income or other taxes that might be owed with respect to such payment or benefit.

 

(n)    In relation to any of the Company Employees, as of the date of this Agreement, except as described in Section 4.14(n) of the Disclosure Schedules, neither the execution or delivery of this Agreement or any Transaction Document nor the consummation of the transactions contemplated hereby or thereby will (i) result in any payment becoming due to any Company Employee or Seller designated employee, (ii) increase any benefit otherwise payable under an Employee Plan, (iii) result in the acceleration of the time of payment or vesting of any compensation or benefits under an Employee Plan or (iv) result in any parachute payment, as defined in Section 280G of the Code, to any Company Employee or Seller designated employee.

 

(o)    Except as otherwise set forth in Section 4.14(o) of the Disclosure Schedules, the Company and Amtran are and since January 1, 2018 have been in compliance with all Applicable Laws pertaining to employment and employment practices, including all Laws relating to labor relations, equal employment opportunities, fair employment practices, employment discrimination, harassment, retaliation, reasonable accommodation, disability rights or benefits, immigration (including the completion, verification and retention of Forms I-9 for all employees and the proper confirmation of employee visas), wages, hours, overtime compensation, child labor, hiring, promotion and termination of employees, working conditions, meal and break periods, privacy, health and safety, workers’ compensation, leaves of absence, unemployment insurance, collective bargaining, withholding and payment of employment-related Taxes, affirmative action and Office of Federal Contracts Compliance Programs regulations, and occupational health and safety. The Company and Amtran have timely paid in full to each current or former employee or, if not past due, adequately accrued in accordance with US GAAP or Indian Accounting Standards, as applicable, all wages, salaries, commissions, bonuses, benefits and other compensation due to or on behalf of such employees. There are, and since January 1, 2018 have been, no Proceedings against the Company or Amtran pending, or, to the knowledge of Seller, threatened to be brought or filed, by or with any Governmental Authority or arbitrator in connection with the employment, termination of employment, or application for employment of any current or former applicant, employee, consultant, volunteer, intern or independent contractor, including any claim relating to unfair labor practices, employment discrimination, harassment, retaliation, equal pay, wage and hours or any other employment related matter arising under Applicable Laws. The Company and Amtran are not, and have never been, a party to or otherwise bound by any citation or order by any Governmental Authority relating to employees or employment practices, and there are no Governmental Authority conciliation agreements, noncompliance findings or audits, investigations or similar inquiries pending or in effect, announced, or, to the knowledge of Seller, threatened in writing with respect to employees or employment practices of the Company or Amtran.

 

 

(p)    In the last five (5) years, neither the Company nor Amtran has implemented any employment terminations, layoffs, furloughs, paid or unpaid leaves of absence, reductions in pay or reductions in hours impacting any current or former employee outside the Ordinary Course of Business. In the last five (5) years, neither the Company nor Amtran has implemented or announced a “plant closing,” “mass layoff,” or other similar action as defined in the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101 et seq., and any similar Applicable Law.

 

(q)    To the knowledge of Seller, no current employee of either the Company or Amtran (i) has any present intention to terminate his or her employment with the Company or its Subsidiaries within the first twelve (12) months following the Closing Date or (ii) is a party to or bound by any confidentiality, non-competition, non-solicitation, proprietary rights or other agreement that would restrict in any material respect the performance of such employee’s employment duties or the ability of the Company or Amtran to conduct its business.

 

Section 4.15    Financial Information.

 

(a)    Section 4.15(a) of the Disclosure Schedules, except as otherwise set forth therein, sets forth true, correct and complete copies of the following financial statements (collectively, the “Financial Statements”): (i) the unaudited balance sheet of the Company as of December 31, 2023 (the “Financial Information Date”), and the related unaudited statements of income of the Company for the year ended December 31, 2023, the unaudited balance sheet of the Company as of May 31, 2024, the unaudited statements of income of the Company for the five months ended May 31, 2024 (collectively, the “Company Financial Statements”), and (ii) the unaudited balance sheet of Amtran as of March 31, 2024, the related unaudited statements of income and cash flows of Amtran for the year ended March 31, 2024, the unaudited balance sheet of Amtran as of May 31, 2024, and the unaudited statement of income of Amtran for the two months ended May 31, 2024 (collectively, the “Amtran Financial Statements”). The “Latest Balance Sheet” shall mean the balance sheet of the Company or Amtran as applicable as of May 31, 2024. For purposes of this Agreement, the “May 31 P&Ls” shall mean the unaudited statement of income of the Company for the five months ended May 31, 2024 and the unaudited statement of income of Amtran for the two months ended May 31, 2024.

 

(b)    Except as set forth in Section 4.15(a) of the Disclosure Schedules, each of the Financial Statements (including the notes thereto, if any) has been prepared from and is consistent with the books and records of the Company or Amtran, as the case may be (which books and records are accurate and complete in all material respects), presents fairly in all material respects the financial condition and results of operations and cash flows of the Company and Amtran, as the case may be, as of the dates thereof and for the periods covered thereby and has been prepared (i) in the case of the Company, in accordance with US GAAP and (ii) in the case of Amtran, in accordance with Indian Accounting Standards, in each case consistently applied throughout the periods covered thereby (subject, in the case of the unaudited Financial Statements, to the absence of footnote disclosures and to normal year-end adjustments, none of which is individually, or in the aggregate, material).

 

 

(c)    Except as set forth in Section 4.15(c) of the Disclosure Schedules, the Company and Amtran have established and adhered to a system of internal accounting controls that is designed to provide reasonable assurance regarding the reliability of financial reporting, that transactions are recorded as necessary to permit preparation of financial statements in accordance with US GAAP or Indian Accounting Standards, as the case may be, access to properties and assets is permitted in accordance with management’s general or specific authorization, except, in each case, for any deficiencies that, individually or in the aggregate, are not material, Except as set forth in Section 4.15(c) of the Disclosure Schedules, there is not currently (i) any significant deficiency or material weakness in the system of internal control over financial accounting utilized by the Company or Amtran, (ii) any fraud or other wrongdoing, whether or not material, that involves the management or other employees of the Company or Amtran who have a role in the preparation of financial statements or the internal accounting controls utilized by the Company or Amtran, or (iii) any claim or allegation regarding any of the foregoing.

 

(d)    All accounts receivable of the Company and Amtran reflected on their respective Latest Balance Sheet, and all accounts receivable arising subsequent to the date thereof, represent sales actually made or services actually performed in the Ordinary Course of Business and are legal, validly subsisting and binding claims against the respective debtors as to which full performance has been rendered. Except as set forth in Section 4.15(d) of the Disclosure Schedules, all accounts receivable of the Company that are reflected in the accounting records of the Company (i) are current or within 180 days of their respective due dates and, except for facts and information actually known by Owner 1, are collectible in the Ordinary Course of Business, provided, however, that for the avoidance of doubt, no guarantees or warranties of collectability are being provided by Seller as a result of a subsequent determination as to the payor’s inability or refusal to pay, bankruptcy, or other insolvency, and (ii) are not subject to any material setoffs, counterclaims, credits or other offsets, Lien, or agreement for deduction, free goods or services, discount or other material deferred price or quantity adjustment. No account receivable has been assigned or pledged to any other Person.

 

(e)    The accounts payable of the Company and Amtran reflected on their respective Latest Balance Sheet, and all accounts payable arising subsequent to the date thereof, arose from bona fide transactions in the Ordinary Course of Business. The accrued Liabilities of the Company and Amtran reflected on their respective Latest Balance Sheet have been incurred in the Ordinary Course of Business. Except instances where any accounts payable are being disputed in good faith, the Company and Amtran have not failed to pay in the Ordinary Course of Business any amounts described in this Section 4.15(e).

 

(f)    Except as otherwise disclosed in Section 4.15(f) of the Disclosure Schedules, all inventories of the Company and Amtran, whether or not reflected on their respective Latest Balance Sheet, which are owned by the Company and Amtran on the Closing Date: (i) are valued at average cost; and (ii) do not include any items which are damaged, or spoiled, obsolete or of a quality or quantity not usable or saleable in the Ordinary Course of Business within historical inventory “turn” experience of the Company and Amtran, the value of which has not been fully written down, or with respect to which adequate reserves have not been provided. Except as otherwise disclosed in Section 4.15(f) of the Disclosure Schedules, the Company and Amtran each have a sufficient amount of inventory to conduct their business in substantially the same manner as conducted prior to the Closing. There has not been, since the date of the Latest Balance Sheet, any provision for markdowns or shrinkage with respect to inventories other than in the Ordinary Course of Business, otherwise disclosed in Section 4.15(f) of the Disclosure Schedules, or as otherwise consented to by Buyer. All inventory is owned by the Company and Amtran free and clear of all Liens (other than Permitted Liens).

 

 

Section 4.16    Environmental Matters. Except as set forth in Section 4.16 of the Disclosure Schedules:

 

(a)    the operations of the Acquired Business are and during the relevant statute of limitations period have been in compliance in all material respects with all applicable Environmental Laws in all applicable jurisdictions;

 

(b)    the Company and Amtran have obtained and are in compliance in all material respects with all Permits, licenses and other authorizations required for the operation of the Acquired Business under applicable Environmental Laws (“Environmental Permits”), and all Environmental Permits are valid and in good standing;

 

(c)    the Company and Amtran are not subject to any outstanding orders, suits, demands, claims, Liens or Proceedings by any Governmental Authority or any person respecting (i) Environmental Laws, (ii) Remedial Actions or (iii) any Release, or to the knowledge of Seller, threatened Release of, or exposure to, a Hazardous Substance (“Environmental Claims”) and no such Environmental Claims are, to the knowledge of Seller, threatened in writing; and

 

(d)    to the knowledge of Seller, there has been no Release or threatened Release of Hazardous Substances at any property owned, operated or leased by the Company or Amtran.

 

(e)    For purposes of this Agreement:

 

(i)    “Environment” means (A) land, including surface land, sub-surface strata, sea bed and river bed under water (as defined in clause (B)); (B) water, including coastal and inland water, surface waters, and ground waters; and (C) ambient air;

 

(ii)    “Environmental Law” means any Law, to the extent applicable to the person or properties in the context of which the term is used, regulating or prohibiting Releases into any part of the Environment, or pertaining to the protection of natural resources, the Environment or, to the extent relating to the use of or exposure to Hazardous Substances, human health or safety, as such laws have been and may be amended or supplemented through the date of this Agreement, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq.) as amended; the Emergency Planning and Community Right to Know Act (42 U.S.C. §§ 11001 et seq.); the Resource Conservation and Recovery Act of 1976 (42 U.S.C. §§ 6901 et seq.) as amended; the Clean Air Act (42 U.S.C. § 7401 et seq.); the Federal Water Pollution Control Act (also known as the Clean Water Act) (33 U.S.C. §§ 1251 et seq.); Section 10 of the Rivers and Harbors Act of 1899, as amended (33 U.S.C. § 403); the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.); the Safe Drinking Water Act (42 U.S.C. §§ 300f et seq.); the Endangered Species Act (16 U.S.C. §§ 1531 et seq.); the Migratory Bird Treaty Act (16 U.S.C. §§ 703 et seq.); the Bald Eagle Protection Act (16 U.S.C. §§ 668 et seq.); the Oil Pollution Act of 1990 (33 U.S.C. §§ 2701 et seq.); the Hazardous Materials Transportation Act (49 U.S.C. §§ 5101 et seq.); the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. § 136 et seq.; the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq. (to the extent related to the exposure of Hazardous Substances); the National Environmental Policy Act of 1969 (42 U.S.C. §§ 4321 to 4370h); and 49 U.S.C. § 44718; and any similar or analogous state and local statutes or regulations promulgated thereunder and decisional law of any Governmental Authority, and any applicable standard of conduct under any common law doctrine, including negligence, nuisance or trespass, related to or arising out of the presence of, Release of or exposure to Hazardous Substances;

 

 

(iii)    “Hazardous Substance” means (A) any materials, substances or wastes defined as “hazardous” or “toxic” or words of similar import intended to define, list or classify substances by reason of deleterious properties under any Applicable Law relating to public or worker health or safety, damages to, or the protection of, natural resources or the Environment, or relating to pollution, (B) any radioactive materials, asbestos and polychlorinated biphenyls, (C) petroleum and petroleum derivatives, or (D) organohalogenated flame retardant chemicals, including per- and polyfluoroalkyl substances (PFAS) such as perfluorooctanoic acid and perfluorooctane sulfonate;

 

(iv)    “Release” means any release, spill, effluent, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the Environment, or into or out of any property owned, operated or leased by the applicable Party; and

 

(v)    “Remedial Action” means all actions to (A) clean up, remove, treat, or in any other way ameliorate or address any Hazardous Substances in the Environment; (B) prevent the Release or threat of Release, or minimize the further Release, of any Hazardous Substance so it does not endanger or threaten to endanger human health or the Environment; or (C) perform pre-remedial studies and investigations or post-remedial monitoring and care pertaining or relating to a Release.

 

(f)    Notwithstanding anything to the contrary in this Agreement, the representations and warranties set forth in this Section 4.16 are Seller’s sole and exclusive representations and warranties regarding environmental, health and safety matters.

 

Section 4.17    Taxes. For purposes of this Section 4.17 each reference to the Company includes Amtran, unless otherwise explicitly provided or as set forth in Section 4.17 of the Disclosure Schedules:

 

(a)    The Company has: (i) timely filed all Tax Returns required to be filed by it, and all such Tax Returns have been properly completed in compliance with all Applicable Laws, and are true, correct and complete, in all material respects; and (ii) timely paid or will timely pay all Taxes shown to be due on any such Tax Return, and all other Taxes due and payable. Each Selling Party has (i) timely filed all Tax Returns required to be filed by such Selling Party with respect to the Company, and all such Tax Returns have been properly completed in compliance with all Applicable Laws, and are true, correct and complete, in all material respects; and (ii) timely paid or will timely pay all Taxes shown to be due on any such Tax Return, and all other Taxes due and payable. Company has furnished or made available to Buyer (i) true, correct and complete copies of each Tax Return filed by Company for the three (3) fiscal years most recently ended prior to January 1, 2024; and (ii) each examination report that it has received from any Taxing Authority for any period.

 

 

(b)    The Company has timely withheld and paid over to the appropriate Taxing Authority all Taxes which it is required to withhold from amounts paid or owing to any employee, shareholders, creditor, holder of securities or other third party, and the Company has complied with all information reporting (including IRS Form 1099) and backup withholding requirements, including maintenance of required records with respect thereto.

 

(c)    The Company has not waived any statute of limitations for the period of assessment or collection of Taxes, or agreed to or requested any extension of time for the period with respect to a Tax assessment or deficiency, which period (after giving effect to such extension or waiver) has not yet expired. The Company is not currently the beneficiary of any extension of time within which to file any Tax Return.

 

(d)    The Company (i) is not a party to, is not bound by, and does not have any obligation under, any Tax Sharing Agreement, and (ii) does not have any potential Liability or obligation (for Taxes or otherwise) to any Person as a result of, or pursuant to, any such Tax Sharing Agreement.

 

(e)    The Company has duly and timely collected and remitted all sales, use, excise and similar Taxes related or attributable to the Acquired Business in accordance with Applicable Law, and has collected and maintained all resale certificates and other documentation required to qualify for any exemption from the collection of any such Taxes.

 

(f)    The aggregate unpaid Taxes of the Company (i) did not, as of the date of the Financial Information Date, exceed the reserve for Tax Liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the Latest Balance Sheet and (ii) do not exceed that reserve as adjusted for the passage of time through the end of the Closing Date. Since the Financial Information Date, the Company has not incurred any Liability for Taxes other than in the Ordinary Course of Business.

 

(g)    There are no Liens relating or attributable to Taxes encumbering (and no Taxing Authority has, to the knowledge of Seller, threatened to encumber) the assets of the Company, except for Permitted Liens.

 

(h)    There are no: (i) pending or, to the knowledge of Seller, threatened claims by any Taxing Authority with respect to Taxes relating or attributable to the Company; or (ii) deficiencies for any Tax, claim for additional Taxes, or other dispute or claim relating or attributable to any Tax Liability of the Company claimed, issued or raised by any Taxing Authority that has not been properly reflected in the financial statements.

 

 

(i)    Neither the Company nor any Selling Party will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting required by Law to be made for a taxable period (or portion thereof) ending on or prior to the Closing Date (pursuant to the application of Section 481(a) of the Code), (ii) use of a legally impermissible or improper method of accounting for a taxable period ending on or prior to the Closing Date, (iii) “closing agreement” as described in Section 7121 of the Code entered into on or prior to the Closing Date, (iv) installment sale as provided under Section 453 of the Code or open transaction disposition, in each case, made on or prior to the Closing Date, (v) prepaid amount, advance payment or deferred revenue received or accrued on or prior to the Closing Date, (vi) transaction undertaken outside the Ordinary Course of Business that has the effect of deferring income, accelerating deductions or otherwise shifting the basis of taxation from one period to another, (vii) intercompany transactions or excess loss accounts described in Treasury Regulation Section 1.1502-13, or 1.1502-19 or otherwise pursuant to Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provisions of federal, state, local or foreign income Tax Law), in each case, with respect to transactions occurring on or prior to the Closing Date, (viii) income inclusion pursuant to Sections 951 or 951A of the Code with respect to any interest held in a “controlled foreign corporation” (as that term is defined in Section 957 of the Code) on or before the Closing Date, (ix) “minimum gain chargeback” provision with respect to “minimum gain” for periods (or portions of periods) ending on or prior to the Closing Date pursuant to Subchapter K of the Code, (x) debt instrument held on or before the Closing Date that was acquired with “original issue discount” as defined in Section 1273(a) of the Code or is subject to the rules set forth in Section 1276 of the Code, (xi) any non-recognition transaction entered into on or prior to the Closing Date, (xii) any other transaction reflecting gross income that arose on or prior to the Closing Date, or (xiii) foreign, state or local Tax-related Law comparable to the foregoing. Neither the Company nor any Selling Party is required to include any amount in income pursuant to Section 965 of the Code or pay any installment of the “net tax liability” described in Section 965(h)(1) of the Code.

 

(j)    The Company (i) is not a party to, is not bound by, and does not have any obligation under, any closing or similar agreement, Tax abatement or similar agreement or any other agreements with any Taxing Authority with respect to any period for which the statute of limitations has not expired and (ii) has no potential Liability or obligation (for Taxes or otherwise) to any Person as a result of, or pursuant to, any such agreement.

 

(k)    The Company (i) does not have any Liability for the Taxes of any Person under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee, successor or as a result of similar Liability, operation of Law, by contract (including any Tax Sharing Agreement) or otherwise and (ii) has not been a member of an Affiliated Group filing a consolidated, unitary, combined or similar Tax Return provided for under U.S. federal or applicable state, local or foreign income Tax Law.

 

(l)    The Company has not (i) taken a reporting position on a Tax Return that, if not sustained, could be reasonably likely to give rise to a penalty for substantial understatement of federal income Tax under Section 6662 of the Code (or any similar provision of state, local or foreign law) or (ii) participated in any “reportable transaction,” as defined in Section 6707A(c)(1) of the Code and Treasury Regulation Section 1.6011-4(b).

 

(m)    The Company has not distributed stock of another Person, or had its stock distributed by another Person in a transaction intended or purported to be governed, in whole or in part, by Section 355 of the Code or Section 361 of the Code.

 

 

(n)    The Company does not have and has never had a taxable presence in any jurisdiction other than jurisdictions for which Tax Returns have been duly filed and Taxes have been duly and timely paid, and no claim has been made by a Taxing Authority in a jurisdiction where the Company does not file Tax Returns and pay Taxes that the Company is or may be subject to any Tax Return filing requirements or taxation by that jurisdiction. Section 4.17(n) of the Disclosure Schedule sets forth each jurisdiction in which the Company or Amtran is or has ever been registered for Taxes or in which the Company or Amtran files or is required to file or has been required to file any Tax Return, or is liable for any Taxes on a “nexus” basis, identifying the type of Tax Return or Tax, as applicable.

 

(o)    None of the assets of the Company is subject to the limitations on “amortizable section 197 intangibles” described in Section 197(f)(9) of the Code or any similar comparable limitation under state, local, or foreign Law. Commencing with taxable periods or portions thereof immediately following the Closing, none of the assets of the Company will be subject to (and the depreciation and amortization deductions otherwise available to Buyer with respect to such assets will not be limited by) the “anti-churning” restrictions or limitations set forth in Section 197(f)(9) of the Code.

 

(p)    The Company is not a party to any joint venture, partnership, other arrangement or Contract which may reasonably be expected to be treated as a partnership for U.S. federal income Tax purposes. Except for Amtran, the Company does not own any equity interest in any other Person.

 

(q)    Seller is, and at all times since its formation has been, an “S corporation” within the meaning of Section 1361(a)(1) of the Code (and any comparable or similar applicable provision of state, local, foreign or other Law). The Company (not including Amtran) (i) is, and at all times since the Reorganization has been, treated as disregarded as an entity separate from Seller within the meaning of Treasury Regulation Section 301.7701-3 (and any comparable or similar applicable provision of state, local, foreign or other Law) (ii) was at all times since its formation and prior to December 28, 2006 treated as a partnership, (iii) was at all times on and after December 28, 2006 until the Contribution treated as an “S corporation” within the meaning of Section 1361(a)(1) of the Code (and any comparable or similar applicable provision of state, local, foreign or other Law) and (iv) was at all times since the Contribution (and prior to the LLC Conversion) treated as a “qualified subchapter S subsidiary” within the meaning of Section 1361(b)(3) of the Code (and any comparable or similar applicable provision of state, local, foreign or other Law) of Seller. Neither Seller nor the Company will be liable for any Tax under Section 1374 of the Code in connection with the transaction contemplated by this Agreement or the other Transaction Documents. Amtran is, and at all times since its formation has been, a non-U.S. corporation for U.S. federal income tax purposes.

 

(r)    No private letter rulings, technical advice memoranda or similar rulings have been requested in writing, entered into or issued by any Taxing Authority with respect to the Company, and there have been no requests for changes in any accounting method by any Governmental Authority with respect to the Company.

 

(s)    The Company is not nor has it ever been a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code.

 

(t)    No power of attorney related or attributable to Taxes that currently is in effect has been granted by the Company.

 

 

(u)    The Company has not deferred the employer portion of any payroll or similar Taxes under the CARES Act.

 

(v)    The Company is not and has never been (i) except for its ownership of Amtran, a shareholder of a “controlled foreign corporation” as defined in Section 957 of the Code (or any similar provision of state, local or foreign Law) or (ii) a shareholder of a “passive foreign investment company” within the meaning of Section 1297 of the Code.

 

(w)    The Company is in compliance in all material respects with applicable United States and foreign transfer pricing laws and regulations.

 

(x)    Since the Financial Information Date, neither the Company nor any Selling Party has made, changed, or rescinded any Tax election, changed any annual accounting period, adopted or changed any method of accounting or reversed any accruals, failed to file any Tax Return or pay any Taxes when due, filed any amended Tax Returns, signed or entered into any closing agreement or settlement with a Taxing Authority, settled or compromised any Tax claim or assessment of Tax Liability, surrendered any right to claim a refund, offset or other reduction in Liability relating to Taxes, consented to any extension or waiver of the limitations period applicable to any claim or assessment, in each case, with respect to Taxes.

 

Section 4.18    Intellectual Property. For purposes of this Section 4.18 each reference to the Company includes Amtran, unless otherwise explicitly provided or as set forth in Section 4.18 of the Disclosure Schedules:

 

(a)    Section 4.18(a) of the Disclosure Schedules contains a complete and accurate description and list of (i) all patented or registered Intellectual Property owned or held by the Company or Amtran, including applications for the same, and (ii) any unregistered Intellectual Property that is material to the conduct of the Acquired Business as presently conducted.

 

(b)    Excluding generally commercially available, off the shelf software programs licensed pursuant to shrink-wrap or “click to accept” agreements with a replacement cost and/or annual license fee of less than $25,000, neither the Company nor Amtran license any Intellectual Property. Except for any inter-company or affiliate licenses, neither the Company nor Amtran license any Intellectual Property to any other Person.

 

(c)    The Company owns and possesses all right, title and interest in and to, or has the right to use pursuant to a valid and enforceable license, all Intellectual Property necessary for or used in the operation of its business as presently conducted and as presently proposed to be conducted, free and clear of all Liens (the “Company Intellectual Property”). For the avoidance of doubt, (i) effective as of the Closing, neither Seller nor any other Person shall have any right, title or interest to any Intellectual Property necessary for or used in the operation of the Company’s business as presently conducted and as presently proposed to be conducted (other than Intellectual Property licensed from third parties pursuant to a valid and enforceable license), and (ii) the Company Intellectual Property is all the Intellectual Property necessary for or used in the operation of the Company’s business as presently conducted and as presently proposed to be conducted.

 

 

(d)    All Company Intellectual Property, other than Intellectual Property used by the Company pursuant to a valid and enforceable license, has been developed by employees of the Company or by contractors of the Company. Except as set forth on Section 4.18(d) of the Disclosure Schedules, all employees and service providers of the Company that have contributed to the development, creation, invention, or authorship of any Company Intellectual Property are obligated by written agreement to assign and have assigned their rights in such Company Intellectual Property to the Company. To the knowledge of Seller, no current or former employee, consultant, or contractor of the Company is in default or breach of any term of any Employment Agreement, non-disclosure agreement, assignment of invention agreement or similar agreement relating to the protection, ownership, development, use or transfer of Company Intellectual Property or has any right, license, claim or interest whatsoever in or with respect to any Company Intellectual Property. Except as set forth on Section 4.18(d) of the Disclosure Schedules, none of the Company Intellectual Property, other than Intellectual Property used by the Company pursuant to a valid and enforceable license, were developed in whole or in part by or on behalf of, or using grants, funding, or any other subsidies of, any Governmental Authority, university, college or other educational institution or research center (collectively, a “Sponsor”) and no funding, facilities, resources, faculty or students of a Sponsor was used in the development of such Company Intellectual Property. Except as set forth on Section 4.18(d) of the Disclosure Schedules, no Sponsor has any right, title or interest in or to any Intellectual Property owned or purported to be owned by the Company.

 

(e)    To the knowledge of Seller, none of the owned Company Intellectual Property is invalid or unenforceable in whole or in part. No loss or expiration of any of the Company Intellectual Property is pending or, to the knowledge of Seller, threatened. The Company has taken all action necessary, performed all customary acts and paid all fees and Taxes (to the extent applicable) required to protect and maintain in full force and effect the Company Intellectual Property.

 

(f)    The Company and Amtran have not received any written claims during the seven-year period prior to the date of this Agreement that they have infringed or misappropriated the Intellectual Property of any other Person. To the knowledge of Seller, no Person is infringing upon or misappropriating any material Intellectual Property owned or used by the Company and Amtran. To the knowledge of Seller, the Company and Amtran are not infringing upon or misappropriating the Intellectual Property of any other Person.

 

(g)    The computer systems, including the software, hardware and networks (collectively, the “Systems”), currently used by the Company are sufficient for the current needs of the Acquired Business, including as to capacity and ability to process current peak volumes in a timely manner. In the past twelve (12) months, there have been no bugs in, or breaches, failures, or breakdowns of any Systems that have caused a substantial disruption or interruption in or to the use of such Systems by the Company or the conduct of its business.

 

(h)    Each Person that has had or currently has access to any trade secrets owned or used by the Company is subject to confidentiality obligations regarding the non-disclosure and protection of such trade secrets that have not, to the knowledge of Seller, been breached by any such Person. No source code owned by the Company has been escrowed, disclosed, released, made available or delivered (and no Person has agreed to disclose, release, or deliver such source code under any circumstance) to any third party, and no Person other than the Company is in possession of any such source code or has been granted any license or other right with respect therein or thereto. No event has occurred, and to the knowledge of Seller, no circumstance or condition exists, that (with or without notice or lapse of time, or both) will, or would reasonably be expected to, result in a requirement that any source code owned by the Company be escrowed, disclosed, licensed, released, made available or delivered to any third party.

 

 

(i)    The Company has not conceived or first actually reduced to practice any “invention” (as that term is defined in 48 C.F.R. § 52.227-11) in performance of a Contract with a Governmental Authority.

 

Section 4.19    Privacy and Information Security.

 

(a)    Neither the Company, Amtran, nor, to the knowledge of Seller, any other Person, has received any notice, allegation, complaint or other communication, and there is no pending investigation by any Governmental Authority or payment card association regarding any actual or possible violation of any Privacy and Information Security Requirement by or with respect to the Company.

 

(b)    In the past five (5) years, except as set forth in Section 4.19(b) of the Disclosure Schedules, the Company has not, to the knowledge of Seller, suffered a security breach with respect to any of the Company Data and there has been no unauthorized or illegal use of or access to any Company Data.

 

(c)    Neither the execution, delivery, and performance of this Agreement nor the transfer of all Company Data maintained or otherwise processed by or for the Company, including all of the Company’s databases and other information relating to employees, customers and all non-customer end users of the Company Products, from the Company to Buyer will in and of themselves cause, constitute, or result in a breach or violation of any Privacy and Information Security Requirements or any Company privacy policy and which, individually or in the aggregate, has created material Liability for the Company.

 

(d)    The Company and Amtran have taken commercially reasonable steps to provide for the back-up and recovery of material data and implemented commercially reasonable disaster recovery plans, procedures and facilities.

 

Section 4.20    No Undisclosed Liabilities. Neither the Company nor Amtran has any Liabilities (regardless of when such Liability is asserted), except (a) as and to the extent reflected and accrued for or reserved against in the Latest Balance Sheet; (b) for immaterial Liabilities which have arisen after the date of the Latest Balance Sheet in the Ordinary Course of Business (none of which results from, arises out of, relates to, is in the nature of, or was caused by any breach of Contract, breach of warranty, tort, infringement or violation of Law); (c) executory obligations under a Contract (other than Liabilities relating to any breach, or any fact or circumstance that, with notice, lapse of time or both, would result in a breach, thereof by the Company or Amtran); or (d) for Liabilities specifically set forth in Section 4.20 of the Disclosure Schedules.

 

Section 4.21    Insurance Policies. Section 4.21 of the Disclosure Schedules contains a list of all insurance policies carried as of the date hereof by or for the benefit of the Company or Amtran, specifying the insurer, product type of coverage, the deductible amount (if any) and the date through which coverage shall continue by virtue of premiums already paid. All such insurance policies are in full force and effect.

 

 

Section 4.22    Bank Relations; Powers of Attorneys.

 

(a)    Section 4.22(a) of the Disclosure Schedules sets forth (i) the name of each financial institution in which the Company or Amtran has borrowing or investment arrangements, deposit or checking accounts or safe deposit boxes; and (ii) the types of such arrangements and accounts, including, as applicable, the number of each such account or box and the names of all persons authorized to draw thereon or having signatory power or access thereto.

 

(b)    Section 4.22(b) of the Disclosure Schedules sets forth a complete and correct list of all outstanding powers of attorney executed on behalf of the Company or Amtran.

 

Section 4.23    Brokers. Except for (i) Northern Edge Capital Advisors LLC and (ii) VLS & Co., no broker, agent, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement and the other Transaction Documents based upon arrangements made by or on behalf of the Company or Amtran.

 

Section 4.24    Customers and Vendors; Warranties.

 

(a)    Section 4.24(a) of the Disclosure Schedules sets forth a list of the ten (10) largest customers of the Company as measured by the aggregate dollar value of sales by the Company to such customers during the 2023 fiscal year and for the period beginning on January 1, 2024 and ending on August 31, 2024 (each, a “Material Customer” and collectively, “Material Customers”). No Material Customer has canceled or otherwise terminated or adversely or materially modified its relationship with the Company in the past twelve (12) months. The Company has not received any written notice that any Material Customer intends to cancel or otherwise terminate or materially adversely modify its relationship with the Company, nor to the knowledge of Seller, does any Material Customer intend to do so. In the past twelve (12) months, the Company has not granted any discount or other price concession as a result of any financial accommodation provided by the Company or any Affiliate of the Company, to any Material Customer.

 

(b)    Except as set forth on Section 4.24(b) of the Disclosure Schedules, none of the Material Customers of the Company is an Affiliate of the Company or any of the Selling Parties. The Company has not entered into an agreement with a customer that includes a “most-favored nation” or other similar pricing term. Section 4.24(b) of the Disclosure Schedules sets forth a list of the Company’s customers who hold inventory of the Company on consignment and the terms of such consignment.

 

(c)    Section 4.24(c) of the Disclosure Schedules sets forth a list of the ten (10) largest vendors to the Company in the aggregate of inventory, materials and services and commodities as measured by the aggregate dollar value of purchases by the Company from such vendors during the 2023 fiscal year and for the period beginning on January 1, 2024 and ending on August 31, 2024 (each, a “Material Vendor” and collectively, the “Material Vendors”). No Material Vendor has canceled or otherwise terminated or adversely and materially modified its relationship with the Company in the past twelve (12) months. The Company has not received any written notice that any Material Vendor intends to cancel or otherwise terminate or materially adversely modify its relationship with the Company, nor to the knowledge of Seller does any Material Vendor intends to do so. In the past twelve (12) months, the Company has not received any discount or other price concession as a result of any financial accommodation provided to the Company or any Affiliate of the Company, to any Material Vendor.

 

 

(d)    Except as set forth on Section 4.24(d)(i) of the Disclosure Schedules, none of the Material Vendors to the Company is an Affiliate of the Company or any of the Selling Parties. Except as set forth on Section 4.24(d)(ii) of the Disclosure Schedules, the Company has not entered into a Contract with a vendor that includes a “minimum purchase requirement” or other similar obligation to purchase from such vendor. The Company does not hold material amounts of any inventory on consignment.

 

(e)    Section 4.24(e) of the Disclosure Schedules sets forth a list of all express warranties, guarantees and warranty policies made or maintained by the Company in respect of products sold or services rendered. The Company has not provided any express warranties, guarantees or warranty policies in respect of any products sold or services rendered except as set forth on Section 4.24(e) of the Disclosure Schedules. No products sold or services rendered by the Company within the past three (3) years are or have been the subject of any dispute or, to the knowledge of Seller, threatened dispute in connection with any express or implied warranty, other than in the Ordinary Course of Business. No salesperson, employee or other agent of the Company is authorized to undertake any express warranty obligation to any customer or other Person other than in accordance with any warranty policy set forth on Section 4.24(e) of the Disclosure Schedules.

 

Section 4.25    COVID-19; PPP Loans.

 

(a)    Since the announcement of an official order by Governmental Authorities related to the COVID-19 Pandemic, the Company has complied, in all material respects, with all Laws relating to COVID-19, including those relating to (i) shelter-in-place and quarantine orders, (ii) the maintenance of safe and acceptable working conditions, including by making disclosures regarding positive cases of COVID-19 among employees or service providers of the Company, (iii) employee benefits, privacy or labor and employment, including with respect to the furlough or termination of employees or the reduction or modification of compensation or employee benefits, if any, and (iv) the Families First Coronavirus Relief Act, as amended.

 

(b)    The Company’s application(s) for the PPP Loans, including all representations and certifications contained therein, were true, correct and complete in all respects and were otherwise completed in all respects with the U.S. Small Business Administration guidance available to the Company prior to the date of the application. The Company has used the proceeds of the PPP Loans solely for the purposes permitted by the CARES Act and has complied in all respects with all requirements of the CARES Act and Payroll Protection Program in connection therewith. Neither the Company nor any of its Affiliates has used the proceeds of any PPP Loan for any purpose, or taken any action, that could (i) reduce the amount of the PPP Loan that may be forgiven under Section 1106 of the CARES Act or (ii) otherwise cause any amount of the PPP Loan to not be forgiven under Section 1106 of the CARES Act.

 

(c)    Section 4.25(c) of the Disclosure Schedules sets forth (i) the original amount of each PPP Loan received by the Company, (ii) the proceeds of each PPP Loan used by the Company as of the date hereof, (iii) the outstanding amount of each PPP Loan as of the date hereof (if any), and (iv) the portion (if any) of the PPP Loan that has been forgiven as of the date hereof. Since March 1, 2020, the Company has not (i) elected to defer any Taxes payable by the Company pursuant to Section 2302 of the CARES Act or (ii) except as set forth in Section 4.25(c) of the Disclosure Schedules, taken or incurred any other loans pursuant to the CARES Act and/or the Payroll Protection Program, other than the PPP Loans.

 

 

Section 4.26    Products.

 

(a)    The Company has made available a true and complete list of all products of the Company and Amtran, including all products (i) currently being sold, manufactured or distributed or (ii) sold, manufactured or distributed during the past five (5) years (collectively, “Products”).

 

(b)    During the past five (5) years, each of the Company and Amtran has prepared, manufactured, distributed and sold all Products in compliance in all material respects with applicable Laws. All Products have been designed, manufactured, labeled, packaged, performed, and serviced so as to meet and comply in all material respects with all governmental standards and specifications and all Applicable Laws currently in effect, and all Products have received all governmental approvals necessary to allow their sale and use.

 

(c)    Except as it may otherwise arise in the Ordinary Course of Business, there are no product Liabilities, warranties or similar claims currently pending or, to knowledge of Seller, threatened against the Company or Amtran, and, to the knowledge of Seller, there are no facts and/or circumstances that could give rise to any such claims as of the Closing Date.

 

(d)    Each Product has been manufactured in conformity in all material respects with all contractual commitments and all applicable warranties and neither the Company nor Amtran has any Liability (and, to the knowledge of Seller, there is no basis for any Liability) to replace or recall any Product. Section 4.26(d) of the Disclosure Schedule includes copies of the standard terms and conditions of sale of the Products (including applicable guaranty, warranty and indemnity provisions).

 

(e)    During the past five (5) years, there has been no recall, safety alert, post-sale warning, withdrawal or suspension (whether voluntary or mandatory) of any Product. To the knowledge of Seller, there are no facts, events or conditions as of the Closing Date which would reasonably be expected to furnish a basis for an injunction from or an award of damages with respect to, any Product; or which would otherwise reasonably be expected to cause the business of the Company or Amtran, as applicable, to withdraw, recall or suspend or have enjoined any Product from any market or to terminate or suspend distribution of such Products.

 

(f)    Neither the Company nor Amtran is subject (and has not been subject during the previous five (5) years) to any adverse inspection finding, recall, investigation, penalty assessment, audit or other compliance or enforcement action by any Governmental Authority having responsibility for the regulation of the current and/or proposed products of the Company or Amtran. Each of the Company and Amtran has obtained all necessary and material approvals and authorizations from all Governmental Authorities for their current and past business activities.

 

 

(g)    Each of the Company and Amtran is, and has been during the past five (5) years, in compliance in all material respects with applicable Laws regarding advertising and marketing of the Products. All claims made in advertising, marketing and promotional materials in any media (including labels, catalogs, packaging and websites) relating to the Products were in all material respects truthful, non-deceptive and otherwise in material compliance with all applicable Laws, in each case, at the time such advertising, marketing and promotional materials were used by the Company and Amtran. To the knowledge of Seller, neither the Company nor Amtran has been the subject of any material claim alleging inaccurate, misleading or noncompliant labeling of the Products.

 

Section 4.27    Government Contracts.

 

(a)    With respect to each Government Contract and each bid that, if accepted, would result in such a Government Contract (a “Government Bid”) to which the Company or Amtran is a party, (i) the Company and Amtran have complied in all material respects with all requirements of all Applicable Laws, FAR, and agreements pertaining to such Government Contract or Government Bid; (ii) all representations and certifications the Company and Amtran have set forth in or pertaining to such Government Contract or Government Bid were current, accurate and complete in accordance with their terms as of their effective date, and the Company and Amtran have materially complied with all such representations and certifications; (iii) neither a Governmental Authority nor any higher-tier contractor, subcontractor or other Person has notified the Company or Amtran in writing that the Company or Amtran breached or violated any Law or FAR pertaining to a Government Contract or Government Bid; (iv) no termination for convenience is currently in effect pertaining to a Government Contract; (v) no termination for default, cure notice or show cause notice is currently in effect pertaining to a Government Contract and no event nor condition has occurred or exists, to the knowledge of Seller, that would constitute grounds for such action; (vi) no cost incurred by the Company or Amtran pertaining to a Government Contract is the subject of an investigation or has been disallowed by a Governmental Authority or a higher-tier contractor; (vii) in the last three (3) years, the Company and Amtran did not receive any adverse or negative past performance evaluations or ratings regarding their performance of a Government Contract; (viii) no bid protest is pending with respect to a Government Contract or a Government Bid; and (x) each Government Contract is valid.

 

(b)    (i) to the knowledge of Seller, neither the Company, Seller or Amtran, or their respective employees, consultants, or agents (while such Person was a principal, employee, consultant, or agent of the Company, Amtran or Seller), is or has been at any point in the last three (3) years under administrative, civil or criminal investigation, indictment, or information by any Governmental Authority, or any audit or investigation by any Governmental Authority with respect to any alleged irregularity, misstatement or omission arising under or relating to any Government Contract or Government Bid, or suspended or debarred from doing business with a Governmental Authority or has been the subject of a finding of nonresponsibility or ineligibility for contracting with a Governmental Authority; and (ii) during the last three (3) years, the Company and Amtran have not conducted or initiated any internal investigation or had reason to conduct, initiate or report any internal investigation, or made a mandatory or voluntary disclosure to a Governmental Authority, with respect to any alleged irregularity, misstatement or omission arising under or relating to a Government Contract or Government Bid.

 

(c)    Neither the Company or Amtran, or to the knowledge of Seller, any of their respective principals’, employees’, agents’, or subcontractors’, is or have been in violation of federal criminal law involving fraud, conflict of interest, bribery, or gratuity provisions found in Title 18 of the U.S. Code, a violation of the civil False Claims Act (31 U.S.C. §§ 3729-3733) or receipt of a significant overpayment (other than overpayments resulting from contract financing payments as defined in FAR 32.001) in connection with the award, performance, or closeout of any Government Contract or Government Bid.

 

 

(d)    (i) no outstanding claims exist against the Company or Amtran by a Governmental Authority or by a higher-tier contractor, subcontractor, or other Person, arising under or relating to any Government Contract; (ii) there exists no disputes or, to the knowledge of Seller, potential disputes between the Company or Amtran and a Governmental Authority under the Contract Disputes Act or any other Law or between the Company or Amtran and any higher-tier contractor, subcontractor or other Person arising under or relating to any Government Contract; and (iii) to the knowledge of Seller, no event or condition exists that constitute grounds for a claim or dispute under clauses (i) or (ii). Except as set forth in Section 4.27(d) of the Disclosure Schedules, neither the Company nor Amtran have an interest in any pending or potential claim under the Contract Disputes Act against a Governmental Authority or against a higher-tier contractor, subcontractor or other Person arising under or relating to any Government Contract.

 

(e)    None of the Government Contracts are premised or were awarded based on the status of the Company or Amtran as a small business (including, a small disadvantaged business, a woman-owned small business, a service-disabled veteran-owned small business, a veteran-owned small business, a Historically Underutilized Business Zone small business, or a Small Business Administration Section 8(a) program participant). The Company’s and Amtran’s representations and certifications in the System for Award Management, or otherwise submitted in writing to any Governmental Authority, prime contractor or higher-tier subcontractor, that the Company or Amtran was a small business concern (as defined in the FAR and in the Small Business Administration regulations at 13 CFR Part 121) were true and accurate when made.

 

(f)    Except to the extent prohibited by Law, Section 4.27(f) of the Disclosure Schedule sets forth a true and complete list of all facility security clearances held by the Company and Amtran and all personnel security clearances held by any officer, director or employee of the Company or Amtran (listed by category only). The clearances set forth in Section 4.27(f) of the Disclosure Schedules are all of the facility and personnel security clearances reasonably necessary to conduct the Acquired Business. The Company and Amtran are in compliance in all material respects with all national security obligations, including those specified in the National Industrial Security Program Operating Manual, found in 32 CFR Part 117 (the “NISPOM”). Other than routine audits by the Defense Counterintelligence and Security Agency (formerly known as the Defense Security Service), there has been no audit or investigation relating to the compliance by the Company or Amtran with the requirements of the NISPOM that resulted in material adverse findings against the Company or Amtran. The Company and Amtran have taken all necessary steps with the applicable agency to ensure that the security clearances identified in Section 4.27(f) of the Disclosure Schedules will remain in full force and effect on and after the Closing Date.

 

Section 4.28    No Other Representations. Except for the representations and warranties contained in this Article IV (including the related portions of the Disclosure Schedules), none of Seller, the Company or any other Person has made or makes any other express or implied representation or warranty, either written or oral, on behalf of Seller or the Company, including any representation or warranty as to the accuracy or completeness of any information regarding the Company furnished or made available to Buyer and its Representatives (including the 2021 Confidential Information Memorandum prepared by Northern Edge Capital Advisors, LLC and any information, documents or material made available to Buyer, management presentations or in any other form in expectation of the transactions contemplated hereby) or as to the future revenue, profitability or success of the Company, or any representation or warranty arising from statute or otherwise in Law.

 

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to Seller, as of the date hereof, as follows:

 

Section 5.1    Organization; Power. Buyer is a corporation duly organized, validly existing and in good standing under the Laws of its Organization Jurisdiction and has all requisite corporate power and authority under those Laws and its Organizational Documents to own, lease or otherwise hold its properties and assets and to carry on its business as conducted as of the date hereof. Buyer is duly qualified and licensed, as may be required, and in good standing to do business in each jurisdiction in which the business it is conducting, or the operation, ownership or leasing of its properties, makes such qualification and licensing necessary, other than in such jurisdictions where the failure to be so qualified and licensed would not result in a material adverse effect on Buyer.

 

Section 5.2    Authorization; Enforceability; Absence of Conflicts; Required Consents.

 

(a)    Buyer has the requisite corporate power and authority to enter into and deliver each Transaction Document to which it is a party, and to carry out the transactions contemplated by the Transaction Documents. The execution and delivery by Buyer of the Transaction Documents to which it is a party, the performance by Buyer of its obligations under each Transaction Document to which Buyer is a party in accordance with their respective terms and the consummation of the transactions contemplated by the Transaction Documents have been duly and validly authorized by all requisite corporate or other organizational action by Buyer, and no other corporate or other organizational proceedings on the part of Buyer are necessary to authorize the Transaction Documents to which Buyer is or will be a party.

 

(b)    This Agreement has been, and each of the other Transaction Documents to which Buyer is or will be a party are, or when executed and delivered by the parties thereto, will be, duly executed and delivered by Buyer and, assuming the due authorization, execution and delivery of this Agreement and such other Transaction Documents by the other parties hereto and thereto, constitutes, or upon execution will constitute, Buyer’s legal, valid and binding obligation, enforceable against it in accordance with its terms, except as that enforceability may be (i) limited by any applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar Laws affecting the enforcement of creditors’ rights generally and (ii) subject to general principles of equity (regardless of whether that enforceability is considered in a proceeding in equity or at law).

 

 

(c)    The execution, delivery and performance of this Agreement by Buyer and the execution, delivery and performance of any other Transaction Documents to which Buyer is a party does not and will not, and the consummation by Buyer of the transactions contemplated hereby and thereby will not, constitute or result in (A) a breach or violation of, or a default under, the certificate of incorporation or bylaws of Buyer; (B) assuming compliance with the matters referred to in Section 5.2(d), with or without notice, lapse of time or both, a breach or violation of, any Law or Permit to which Buyer is subject, or (C) with or without notice, lapse of time or both, a breach or violation of, a termination, cancellation or modification (or provide a right of termination, cancellation or modification) or default under, the payment of additional fees, the creation, change or acceleration of any rights or obligations under, or require consent or approval from, the other party thereto, in each case, pursuant to any Contract binding upon Buyer, except, in the case of clauses (B) and (C) above, for any such breach, violation, termination, default, creation, acceleration or change that individually or in the aggregate, would not, individually or in the aggregate, prevent or materially delay Buyer from consummating the transactions contemplated by this Agreement.

 

(d)    Except for (A) compliance with, and filings under, the Exchange Act and the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”) and the rules and regulations of all applicable securities exchanges, and (B) filings, reports, approvals and/or notices under the HSR Act, and (C) such other filings, approvals and/or notices that will be obtained prior to the Closing, no notices, reports or other filings are required to be made by Buyer or any of its Subsidiaries with, nor are any consents, registrations, approvals, permits or authorizations required to be obtained by Buyer or any of its Subsidiaries from, any Governmental Authority in connection with the execution, delivery and performance of this Agreement by Buyer and the consummation by Buyer of the transaction contemplated hereby, except those that would not, individually or in the aggregate, prevent or materially delay Buyer from consummating the transactions contemplated by this Agreement.

 

Section 5.3    SEC Filings. Except as would otherwise not have a material adverse effect on Buyer, within the last three (3) years, Buyer has (a) timely filed all forms, reports, statements, certifications and other documents (including all exhibits, amendments and supplements thereto) required to be filed by it with the SEC (all such forms, reports, statements, certificates and other documents filed, collectively, the “SEC Documents”), (b) otherwise complied in all material respects with all Applicable Laws, including the Securities Act and the Exchange Act, and (c) been continuously listed on the New York Stock Exchange (“NYSE”) under the trading symbol “SXI”, and (d) not been subject to any suspension order. The SEC Documents comply in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act, as the case may be, each as in effect on the date so filed.

 

Section 5.4    Litigation. No Proceeding is pending or threatened in writing to which Buyer is or may become a party which (a) questions or involves the validity or enforceability of any obligation of Buyer under any Transaction Document, or (b) seeks (or reasonably may be expected to seek) to prevent or delay consummation by Buyer of the transactions contemplated by the Transaction Documents.

 

Section 5.5    Accredited Investor. Buyer is an “accredited investor” (as that term is defined in Rule 501 of Regulation D under the Securities Act). Buyer has such knowledge and experience in business and financial matters so that Buyer is capable of evaluating the merits and risks of an investment in the Securities being acquired hereunder. Buyer understands the full nature and risk of an investment in such Securities. Buyer further acknowledges that it has had access to the books and records of the Company and Amtran, is generally familiar with the Acquired Business and has had an opportunity to ask questions concerning the Company and Amtran and the Securities.

 

 

Section 5.6    Sufficiency of Funds. Buyer has sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Cash Consideration and consummate the transactions contemplated by this Agreement.

 

Section 5.7    Buyer Common Stock. Buyer has sufficient duly authorized shares of its common stock to enable it to issue the Stock Consideration to Seller, and upon consummation of the transactions contemplated by this Agreement, the Stock Consideration will be validly issued, fully paid, non-assessable, issued without application of preemptive rights, will have the rights, preferences and privileges specified in the governing documents of Buyer, and will be free and clear of all Liens, encumbrances and restrictions, other than the restrictions imposed by applicable federal and state securities Laws and the restrictions imposed by this Agreement. The Stock Consideration will not be issued in violation of, and will not be subject to, any preemptive rights, resale rights, rights of first refusal or similar rights. None of the SEC or other securities regulatory authority or stock exchange has issued any order that is currently outstanding preventing or suspending trading in any securities of Buyer, and no such proceeding is, to the knowledge of Buyer, pending or threatened, and the Buyer is not in default of any material requirement of any applicable securities Laws.

 

Section 5.8    Exempt from Registration. Subject to the accuracy of the Selling Party’s representations in Section 3.5, Buyer’s issuance of the Stock Consideration at the Closing will be exempt from the registration requirements of the Securities Act and all applicable state securities Laws.

 

Section 5.9    Acquisition of Securities for Investment. Buyer is acquiring the Securities for investment and not with a view toward, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling such Securities. Buyer agrees that the Securities have not been registered under, and may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under, the Securities Act, and any applicable foreign and state securities laws, except under an exemption from such registration under such Act and such laws.

 

Section 5.10    Brokers. Except for Guggenheim Partners, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Buyer or its Affiliates.

 

 

ARTICLE VI

COVENANTS

 

Section 6.1    Records and Access.

 

(a)    From and after the Closing, Buyer will (i) give Seller and its authorized Representatives reasonable access, during normal business hours and upon reasonable notice, to all books, records, personnel, accountants, offices and other facilities and properties of or relating to the Company and Amtran, (ii) permit Seller to make such copies and inspections thereof as Seller may reasonably request, and (iii) furnish Seller with such financial and operating data and other information with respect to the Company and Amtran as Seller may from time to time reasonably request, in each case (A) to comply with requirements imposed on Seller or its Affiliates by a Governmental Authority having jurisdiction over Seller or its Affiliates, (B) for use in any Proceeding or in order to satisfy audit, accounting, claims, regulatory, litigation, subpoena or other similar requirements or (C) to comply with the obligations of Seller under the Transaction Documents; provided, however, that Seller and its Representatives will agree in advance to a customary confidentiality agreement with respect to such information; provided further, that in the event that Buyer determines that any such provision of access or information could violate any Applicable Law or Contract, or require Buyer to waive any attorney-client privilege or is otherwise subject to applicable confidentiality restrictions or other privilege, the Parties shall take all reasonable measures to permit the compliance with such obligations in a manner that avoids any such harm or consequence.

 

(b)    Notwithstanding anything to the contrary contained in this Agreement (except as otherwise provided in Section 8.15), in the event of any dispute or threatened dispute between any Selling Party and their respective Affiliates, employees, agents, partners, representatives, successors and permitted assigns, on the one hand, and Buyer Indemnitees, on the other hand, relating to this Agreement, the other Transaction Documents or the transactions contemplated hereby and thereby, the covenants contained in this Section 6.1 shall not apply thereto (including for discovery purposes) and shall not be considered a waiver by any party of any right to assert the attorney-client privilege or any similar privilege.

 

(c)    Each Selling Party agrees not to disclose or use at any time (and shall cause each of its Affiliates not to use or disclose at any time) any Confidential Information. Seller and each Owner further agrees to take all commercially reasonable steps (and to cause each of its Affiliates to take all commercially reasonable steps) but, in each case, to exercise no less than a reasonable standard of care, to safeguard such Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. In the event a Selling Party or any of their respective Affiliates is required by Law to disclose any Confidential Information, such Selling Party shall promptly notify Buyer in writing, which notification shall include the nature of the legal requirement and the extent of the required disclosure, and such Selling Party shall cooperate with Buyer to preserve the confidentiality of such information consistent with Applicable Law.

 

Section 6.2    Public Announcement. Seller and Buyer agree to keep the terms of this Agreement confidential, except to the extent, and to the Persons to whom disclosure is required by Applicable Law, as may be required to enforce the terms of this Agreement or for purposes of compliance with financial reporting obligations or stock exchange requirements; provided, that, the Party obligated to make such mandatory reporting or announcement with respect to the initial disclosure of this Agreement and the transactions contemplated hereby provide a draft of such public announcement or disclosure, at least two (2) Business Days in advance to the other Party. Any information that has been publicly disclosed or announced in accordance with the terms of this Section 6.2 by Buyer, following such public disclosure or announcement may be included by any Party or its Representatives in any subsequent public disclosure or announcement, including in documents Buyer files with the SEC. Notwithstanding the foregoing, the Parties may disclose such terms to their respective employees, accountants, advisors and other Representatives as necessary in connection with the ordinary conduct of their respective businesses, so long as the Party making such disclosure takes all commercially reasonable steps and causes each of its Affiliates to take all commercially reasonable steps, but, in each case, exercises no less than a reasonable standard of care, to safeguard such terms and to protect them against disclosure, misuse, espionage, loss and theft.

 

 

Section 6.3    Non-Competition; Non-Solicitation; and Non-Disclosure.

 

(a)    In consideration of the payment or delivery of the Purchase Price, and to further induce Buyer to enter into this Agreement, each Selling Party agrees that, for a period commencing on the Closing Date and continuing for a period of five (5) years from the Closing Date (the “Restricted Period”), such Selling Party will not, and will not permit any of its Affiliates to, directly or indirectly, either acting on its own behalf or through or in connection with any Person, engage in, invest in or derive any profit from (or participate as employee, agent, consultant, owner, lender, securityholder, director, manager, partner, member or in any other individual or representative capacity in any business which engages in, invests in or derives any profit from) Restricted Activities (as defined below) anywhere in the world. Notwithstanding the foregoing, this Section 6.3(a) shall not restrict the passive ownership by any Selling Party or any of its Affiliates of (i) less than an aggregate of 2% of any class of stock of a Person engaged, directly or indirectly, in Restricted Activities, or (ii) undertaking any business or investment which has been consented to in writing by or on behalf of Buyer after Closing.

 

(b)    Without limiting the generality of the provisions of Section 6.3(a) above, each Selling Party agrees that, during the Restricted Period, such Selling Party will not, and will not permit any of its Affiliates to, directly or indirectly, either acting on its own behalf or through or in connection with any Person solicit, call on or service (or participate as employee, agent, consultant, owner, lender, securityholder, director, manager, partner, member or in any other individual or representative capacity in any business which solicits, calls on or services), business constituting Restricted Activities from any Person that is or was a supplier or customer of the Acquired Business or any portion thereof during the twelve (12) month period preceding the Closing Date, or from any successor in interest to any such Person, in any case for the purpose of (i) securing business or contracts related to the Restricted Activities or any portion thereof or (ii) interfering with the relationship between such Person and the Company or Amtran.

 

(c)    During the Restricted Period, each Selling Party shall not, and shall not permit any of its Affiliates to, directly or indirectly, hire or solicit (or participate as an employee, agent, consultant, owner, securityholder, director, manager, partner, member or in any other individual or representative capacity in any business that hires or solicits) any employee or consultant of the Company or Amtran on the date hereof or within the twelve (12) months immediately preceding the Closing Date, or encourage or induce any such employee or consultant to leave such employment or engagement or hire any such employee or consultant who has left such employment or engagement; provided, that nothing in this Section 6.3(c) shall prevent such Selling Party or any of its Affiliates from (x) publishing a general solicitation which is not directed specifically to any such employees, or (y) hiring (i) any employee whose employment has been terminated by the Company or Buyer without cause, (ii) after 90 days from the date of termination of employment, any employee whose employment has been terminated by the employee without any violation of this Section 6.3, or (iii) hiring, soliciting, or conducting business with any consultant of a Selling Party or its Affiliates outside and unrelated to the Restricted Activities.

 

 

(d)    Each Selling Party acknowledges and agrees that the covenants and restrictions contained in this Section 6.3 are an essential element of Buyer’s agreeing to acquire the Securities and pay or deliver the Purchase Price as set forth herein, and that Buyer would not have done so but for the agreement by such Selling Party to comply with the terms and provisions of this Section 6.3. Each Selling Party further acknowledges and agrees that the covenants set forth in this Section 6.3 are reasonable and necessary for the protection of Buyer’s business interests, that the covenants set forth in this Section 6.3 will not interfere with the ability of any Person restricted hereby to earn a living, that irreparable injury may result to Buyer if such Selling Party breaches any of the terms of this Section 6.3, and that in the event of an actual or threatened breach of any of the provisions contained in this Section 6.3, Buyer will have no adequate remedy at Law. Each Selling Party accordingly agrees that in the event of any actual or threatened breach of any of the provisions contained in this Section 6.3, Buyer shall be entitled to injunctive and other equitable relief, without (i) the posting of any bond or other security, (ii) the necessity of showing actual damages and (iii) the necessity of showing that monetary damages are an inadequate remedy. Nothing contained herein shall be construed as prohibiting Buyer from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of any damages that it is able to prove. Each Selling Party shall be liable for any breach by its Affiliates of this Section 6.3.

 

(e)    Each Selling Party has consulted with legal counsel regarding the provisions of this Section 6.3 and based on such consultation has determined and hereby acknowledges that the covenants and restrictions in this Section 6.3 are reasonable in terms of duration, scope and area restrictions and are necessary to protect the goodwill of Buyer’s business and the substantial investment in the Acquired Business made by Buyer hereunder. However, if any provision of this Section 6.3 is held to be invalid or unenforceable by reason of the geographic or business scope or duration thereof, the court or other tribunal is hereby directed to construe and enforce this Section 6.3 as if the geographic or business scope or the duration or such provision has been more narrowly drawn as so not to be invalid or unenforceable, and such invalidity or unenforceability shall not affect or render invalid or unenforceable any other provision of this Agreement. Each Selling Party further acknowledges and agrees that the covenants and restrictions in this Section 6.3 are being entered into by such Person in connection with the direct or indirect sale by such Person of the goodwill of the Acquired Business pursuant to this Agreement and not directly or indirectly in connection with any employment or other relationship with any Selling Party, the Company, Amtran or Buyer.

 

(f)    For purposes of this Section 6.3, the term “Restricted Activities” means the business of manufacturing and distributing low voltage and medium voltage instrument transformers (which shall include current transformers and voltage transformers, but exclude low voltage current transformers offered and sold by Amgis LLC as of the date of this Agreement). Notwithstanding the foregoing, each Selling Party agrees that during the Restricted Period, such Selling Party shall not take an active role in the management or operations of Amgis LLC.

 

Section 6.4    Tax Matters.

 

(a)    Tax Returns. Seller shall timely prepare (or cause to be prepared) at Seller’s sole cost and expense, and file (or cause to be filed), all Pass-Through Income Tax Returns of Seller and the Company for all Pre-Closing Periods that are required to be filed after the Closing Date (the “Seller Prepared Returns”), and each such Seller Prepared Return shall be prepared in a manner consistent with past practice except as required by Applicable Law. Seller shall provide each Seller Prepared Return to Buyer for review and comment no later than thirty (30) days before the due date of such Seller Prepared Return. The Selling Parties shall pay all Taxes due with respect to any Seller Prepared Return. Seller shall consider in good faith any reasonable comments provided in writing by Buyer to Seller at least five (5) days prior to the due date (taking into account any valid extensions) for filing such Seller Prepared Return. If Seller and Buyer are unable to resolve any dispute regarding a Seller Prepared Return submitted by Seller to Buyer pursuant to this Section 6.4(a), the dispute shall be resolved by the Independent Accounting Firm in accordance with Section 2.6(c), mutatis mutandis.

 

 

(b)    Allocation of Straddle Period Taxes. In the case of a Straddle Period, and subject to Section 6.4(d), the portion of Taxes of the Company or Amtran attributable to such Straddle Period that are allocated to the Pre-Closing Period of such Straddle Period shall be determined as follows: (x) in the case of any real property, personal property, ad valorem or similar Taxes, on a ratable daily basis, and (y) in the case of all other Taxes, including income and franchise Taxes, measured by, or based upon, net income or gross receipts, on an interim closing of the books of the Company or Amtran as of the close of business on the Closing Date (provided that exemptions, allowances or deductions that are calculated on an annual basis shall be allocated between the period ending on the Closing Date and the period after the Closing Date in proportion to the number of days in each such period). Notwithstanding the foregoing, for purposes of this Agreement, in connection with determining the Taxes of the Company or Amtran for any Pre-Closing Period, (i) the taxable year of any Subsidiary or former Subsidiary of the Company or Amtran that is a “controlled foreign corporation” (as defined in the Code) shall be deemed to have closed on the Closing Date, including for purposes of computing any inclusion under sections 951 and 951A of the Code, (ii) exemptions, allowances or deductions that are calculated on an annual basis (including depreciation and amortization deductions) shall be allocated between the period ending on the Closing Date and the period beginning after the Closing Date in proportion to the number of days in each period, (iii) any Transaction Costs that are taken into account as a reduction in the Purchase Price shall, to the maximum extent permitted by Law, be allocated to the Pre-Closing Period, and (iv) any Damages attributable, related to or arising in connection with the embezzlement of Amtran assets by Amtran’s former controller during or prior to the Financial Information Date shall be taken into account when computing the Straddle Period Taxes of Amtran and shall, to the maximum extent permitted by Law, be allocated to the Pre-Closing Period, such that Seller is entitled to 40% of any refund received by Amtran (whether in cash or as a credit against or offset to any Tax) received by Buyer, Amtran, or their Affiliates on account of such Loss in accordance with Section 6.4(d), and any Taxes subsequently imposed on the Company for wrongfully taking into account any such Damages for the Pre-Closing Period shall be treated as Pre-Closing Taxes for purposes of Section 7.2(c). Buyer shall take or cause Company and Amtran to take such further actions, with respect to Damages described in clause (iv) of the immediately preceding sentence and pursuant to Section 6.5, as Seller Representative may reasonably request, all at the sole expense of the Selling Parties.

 

(c)    Tax Controversies.

 

(i)    Buyer shall deliver a written notice to Seller promptly following any demand, claim, or notice of commencement of a claim, proposed adjustment, assessment, audit, examination or other administrative or court proceeding with respect to Taxes of the Company or Amtran for which the Selling Parties may be liable pursuant to Article VII (“Tax Contest”); provided, however, that the failure or delay to so notify Seller shall not relieve Seller of any obligation or Liability that Seller may have to Buyer, except to the extent that Seller demonstrates that Seller is materially and adversely prejudiced thereby.

 

 

(ii)    Buyer shall control any Tax Contest; provided, however, Seller at Seller’s sole cost and expense shall (x) control any Tax Contest that relates solely to Pass-Through Income Tax Returns of the Company with respect to a Pre-Closing Period (a “Pass-Through Income Tax Return Contest”); and (y) have the right to participate in any Tax Contest to the extent it relates solely to Pre-Closing Taxes. With respect to Tax Contests that are not Pass-Through Income Tax Return Contests, Buyer (A) shall keep Seller Representative reasonably informed regarding the status of any such Tax Contest to the extent it relates to Pre-Closing Taxes; and (B) shall not, and shall not allow the Company or Amtran, to settle, resolve, or abandon any such Tax Contest as it relates to Pre-Closing Taxes for a Pre-Closing Period without the prior written consent of Seller Representative (which shall not be unreasonably withheld, delayed, or conditioned); provided, however, that Buyer may, without the written consent of Seller Representative, enter into such a settlement, resolution, or abandonment if Buyer foregoes indemnification under ARTICLE VII of this Agreement with respect to the Pre-Closing Taxes that are subject to such Tax Contest.

 

(iii)    Seller shall (A) keep Buyer reasonably informed regarding the status of any Pass-Through Income Tax Return Contest; (B) allow Buyer and the Company or Amtran to participate in such Pass-Through Income Tax Return Contest; and (C) not settle, resolve, or abandon any such Pass-Through Income Tax Return Contest without the prior written consent of Buyer (which shall not be unreasonably withheld, delayed, or conditioned).

 

(iv)    Notwithstanding anything to the contrary contained in this Agreement, the procedures for all Tax Contests shall be governed by this Section 6.4(c) (and not Section 7.2).

 

(d)    Tax Refunds. Notwithstanding any other provision of this Agreement, Seller shall be entitled to any refund not included as an asset in Company Closing Working Capital (whether in cash or as a credit against or offset to any Tax) received by Buyer or an Affiliate (including the Company and Amtran) after the Closing with respect to Taxes of the Company or Amtran attributable to the Pre-Closing Period (including refunds for income Taxes, but excluding refunds for value-added or goods and services Taxes); provided that refunds of Taxes for a Straddle Period shall be apportioned in accordance with Section 6.4(b). Buyer and the Company will take all reasonable steps in connection with obtaining any refund of such Taxes with respect to the Company or Amtran (whether in cash or as a credit against or offset to any Tax). Any such amount (net of Buyer’s or its Affiliate’s out-of-pocket expenses (including Taxes) and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund)) shall be paid or cause to be paid by Buyer to Seller within ten (10) Business Days after such refund is received. Upon the request of Buyer, the Seller Parties shall as a joint and several obligation repay Buyer the amount paid over pursuant to this paragraph (d) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that Buyer or an Affiliate (including the Company and Amtran) is required to repay such refund to such Governmental Authority.

 

(e)    Transfer Taxes. Buyer and Seller shall each be responsible for one-half of any Transfer Taxes and shall indemnify the other Party for any such obligations due. Buyer shall file (or cause to be filed) all Tax Returns and other documentation required to be filed with respect to Transfer Taxes.

 

 

(f)    Post-Closing Actions. Except as otherwise expressly provided herein or with the prior written consent of Seller Representative, which consent shall not be unreasonably withheld, delayed, or conditioned, Buyer shall not, and shall cause its Affiliates (including the Company and Amtran) not to, (i) file any amended Pass-Through Income Tax Return (including claim for Tax refund with respect to a Pass-Through Income Tax Return) of the Company for a Pre-Closing Period, except as otherwise provided by Applicable Law, (ii) make or change any Tax election of the Company with respect to a Pass-Through Income Tax Return for a Pre-Closing Period, or (iii) waive or extend the applicable statute of limitations with respect to any Pass-Through Income Tax Return of the Company for a Pre-Closing Period.

 

(g)   Tax Cooperation. Each Party shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns pursuant to Section 6.4(a) and Section 6.4(e) and any Tax Contests with respect to the Company or Amtran. Such cooperation shall include the retention and (upon the other Party’s request) the provision of records and information that are reasonably relevant to any such Tax Contest and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Parties further agree, upon request, to use their commercially reasonable efforts to obtain any certificate or other document from any Taxing Authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including with respect to the transactions contemplated by this Agreement). Buyer and Seller agree (i) to retain all books and records with respect to Tax matters pertinent to the Company or Amtran relating to a Pre-Closing Period until the expiration of the statute of limitations (and, to the extent notified by Buyer or Seller, any extensions thereof) of the respective Tax periods, and to abide by all record retention agreements entered into with any Taxing Authority, and (ii) to give the other Party reasonable written notice prior to destroying or discarding any such books and records and, if the other Party so requests, to allow the other Party to take possession of such books and records.

 

(h)    Tax Treatment. The Parties acknowledge and agree that for U.S. federal and applicable state and local income Tax purposes the Company, following the Reorganization, shall be disregarded as a separate entity from Seller for all U.S. federal and applicable state and local income Tax purposes. Seller shall include the statement described in Treasury Regulations Section 1.368-3(a) on or with its U.S. Tax Return for the taxable year of the formation of Seller, the Contribution, and the QSub Election. To the extent required, each Owner shall include the statement described in Treasury Regulations Section 1.368-3(b) on or with its U.S. Tax Return for the taxable year of the formation of Seller, the Contribution, and the QSub Election. The Parties acknowledge and agree that Seller shall file an IRS Form 1120-S (and any analogous state and local Pass-Through Income Tax Returns) including the operations and activities of Seller and the Company for the taxable year of Seller and the Company that includes the Contribution and the Q-Sub Election, and the Company shall not file any such Pass-Through Income Tax Returns for such taxable year, consistent with the principles of Revenue Ruling 2008-18.

 

 

(i)   Allocation of Purchase Price.

 

(i)    No later than one-hundred and twenty (120) days following the Closing, Buyer shall prepare and provide to Seller, for its review, a draft allocation statement that provides the manner in which the sum of the Estimated Purchase Price and all other items required to be taken into account for U.S. federal income Tax purposes with respect to the purchase and sale of the Securities (including the Liabilities of the Company) (collectively, the “Total Tax Consideration”) shall be allocated among the assets of the Company and the covenants of the Selling Parties set forth in Section 6.3, which is intended to be in accordance with Section 1060 of the Code and the applicable Treasury Regulations, and any applicable state, local and foreign Tax Law (the “Tax Allocation Statement”). The Tax Allocation Statement shall be allocated in a manner consistent with the sample allocation methodology attached hereto as Exhibit D. Seller shall have the right to object to any portion of the Tax Allocation Statement by written notice to Buyer. If Seller does not object to the Tax Allocation Statement by written notice to Buyer within thirty (30) days after receipt by Seller of the Tax Allocation Statement, then the Tax Allocation Statement shall be deemed to have been accepted and agreed upon, and final and conclusive, for all purposes of this Agreement; provided, however, that such Tax Allocation Statement shall be subject to adjustment upon and as a result of any adjustment to the amounts used to determine the allocations used to prepare the Tax Allocation Statement under this Agreement. If Seller objects to the Tax Allocation Statement, it shall notify Buyer in writing of its objection to the Tax Allocation Statement and shall set forth in such written notice the disputed item or items and the basis for its objection and Buyer and Seller shall act in good faith to resolve any such dispute for a period of thirty (30) days thereafter. If, within thirty (30) days of Seller’s delivery of a valid written notice of objection to the Tax Allocation Statement, Buyer and Seller have not reached an agreement regarding the disputed item or items specified in such written notice, the dispute shall be resolved by the accountants in accordance with the dispute resolution mechanism set forth in Section 2.6(c), whose determination shall be binding upon the parties. In the event that any adjustment to the Estimated Cash Consideration is paid between the parties pursuant to the terms of this Agreement (or there is otherwise an adjustment to the Total Tax Consideration hereunder), Buyer shall promptly provide Seller a revised Tax Allocation Statement and the principles of this Section 6.4(i)(i) shall apply to each such revised Tax Allocation Statement.

 

(ii)    Each of the parties hereto and their respective Affiliates shall, unless otherwise required by a final “determination” (within the meaning of Section 1313(a) of the Code), prepare and file all income Tax Returns, including all IRS Forms 8594 and any other appropriate income Tax Returns or forms, in a manner consistent with the Tax Allocation Statement, as finally determined pursuant to this Section 6.4(i) (subject to adjustment in accordance with this Section 6.4(i) in the event of any adjustment to the Total Tax Consideration).

 

(j)   Conflict. In the event of a conflict between any of the provisions of this Section 6.4 and any other provisions of this Agreement, the provisions of this Section 6.4 shall control.

 

 

(k)  Consolidated Group Tax Matters. Notwithstanding anything in this Agreement (including this Section 6.4) to the contrary, (i) Buyer shall not be required to provide Seller, any other Selling Party, or any of their respective Affiliates or representatives with access to, or copies of, any information, books, or records (including Tax Returns) that relate to a Combined Tax, or any other information, books or records (including Tax Returns) that include Buyer or any Subsidiary of Buyer, (ii) Seller, any other Selling Party, and their respective Affiliates and representatives shall not be entitled to any rights with respect to any Tax Contest relating to a Combined Tax, including any participation rights or consent rights, and (iii)  Seller, any other Selling Party, and their respective Affiliates and representatives shall not be entitled to any rights with respect to Tax Returns relating to Combined Taxes. “Combined Tax” means any Tax with respect to which Buyer has filed or will file a Tax Return on an affiliated, combined, consolidated, unitary or similar basis.

 

Section 6.5    Further Assurances. From and after the Closing, if any further action is necessary to carry out the purposes of this Agreement, the Parties shall take such further action (including the execution and delivery of such further documents and instruments) as any Party may reasonably request, all at the sole expense of the requesting Party (except as otherwise expressly set forth in this Agreement).

 

Section 6.6    Retention of Books and Records. Seller may retain a copy of any or all of the books and records relating to the business or operations of the Company and Amtran prior to the Closing. In addition, Buyer shall cause the Company and Amtran to retain all books, ledgers, files, reports, plans, operating records and any other material documents pertaining to the Company and Amtran in existence at the Closing that are required to be retained under current retention policies for a period of not less than seven years from the Closing Date, and to make the same available after the Closing for inspection and copying by Seller or its Representatives at Seller’s expense, during regular business hours and upon reasonable request and upon reasonable advance notice.

 

Section 6.7    Withholding Taxes. Buyer, the Company, Amtran, and any other applicable withholding agent will be entitled to deduct and withhold from any payment otherwise payable pursuant to this Agreement the amounts required to be deducted and withheld under the Code or any other Applicable Law with respect to the making of such payment. To the extent that amounts are so deducted or withheld, and timely paid over to the appropriate Taxing Authority, such amounts will be treated for all purposes of this Agreement as having been paid to Seller or such other Person in respect of whom such deduction or withholding was made.

 

Section 6.8    Employee Matters.

 

(a)    Each Continuing Employee shall be given credit for all service with the Company, Amtran and their respective predecessors under any employee benefit plan, program or arrangement of Buyer or its Affiliates in which such Continuing Employee is eligible to participate, including any Buyer 401(k) Plan and such other plans providing vacation, sick pay, severance and retirement benefits maintained by Buyer or its Affiliates for purposes of eligibility, vesting and entitlement to benefits, including for severance benefits and vacation entitlement (but not for accrual of pension benefits), to the same extent as if such service had been performed for Buyer or any of its Affiliates. Notwithstanding anything herein to the contrary, Buyer shall take all reasonable necessary action, including amending the Buyer 401(k) Plan, to ensure that any Continuing Employees with loans in the Company 401(k) Plan are able to rollover any such loans into the Buyer 401(k) Plan. Further, Buyer shall be responsible for the payment of a contribution to the Company 401(k) Plan in an amount equal to any employer matching contributions which would have been made to participant accounts in the Company 401(k) Plan from the Closing Date to February 1, 2025, and such employer contribution shall not be deducted from the Purchase Price. In the event of any change in the welfare benefits provided to Continuing Employees following the Closing and in the plan year in which the Closing occurs, Buyer shall, and shall cause the Company and Amtran to, as applicable, (i) waive all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Continuing Employees under any such welfare plan provided to the Continuing Employees, except to the extent that such conditions, exclusions or waiting periods would apply in the absence of such change, and (ii) provide each Continuing Employee with credit, in the calendar year in which the Closing occurs, for any co-payments and deductibles paid prior to any such change in satisfying any applicable deductible or out of pocket requirements after such change. Following the Closing, each Continuing Employee will be eligible to use any accrued but unused vacation or other paid time off benefits in place as of the Closing.

 

 

(b)    Notwithstanding anything in this Section 6.8 or otherwise in this Agreement to the contrary, no provision of this Agreement is intended to, or does, constitute the establishment or adoption of, or amendment to, any employee benefit plan (within the meaning of Section 3(3) of ERISA), and no person shall have any claim or cause of action, under ERISA or otherwise, in respect of any provision of this Agreement as it relates to any such employee benefit plan or otherwise.

 

Section 6.9    Indemnification of Managers, Directors and Officers of the Company.

 

(a)    Buyer agrees on behalf of itself, and the Company as of the Closing, that all rights to indemnification, advancement of expenses and exculpation by the Company, as applicable, now existing in favor of each Person who is now, or has been at any time prior to the date hereof or who becomes prior to the Closing Date, an officer, manager or director of the Company, as provided in the certificate of formation or bylaws of the Company (or equivalent governing documents), in each case as in effect on the date of this Agreement shall survive the Closing Date and shall continue in full force and effect in accordance with their respective terms, provided, however, that the foregoing obligations shall not in any way limit Buyer Indemnities’ rights under ‎ARTICLE VII for Buyer Indemnified Losses.

 

(b)    Buyer agrees on behalf of itself, and the Company as of the Closing, that, for a period of six years after the Closing, neither Buyer nor the Company and shall, and Buyer shall cause its successors not to, amend, repeal or modify any provision in its Organizational Documents in a manner that would adversely affect the rights and/or exculpation or indemnification of present or former directors, managers, officers, employees or agents of the Company and, it being the intent of the Parties that the directors, managers, officers, employees or agents of the Company prior to the Closing shall continue thereafter to be entitled to such rights of exculpation and indemnification to the fullest extent permitted under Applicable Laws until at least the sixth anniversary of the Closing Date.

 

(c)    The obligations of Buyer under this Section 6.9(b) shall not be terminated or modified in such a manner as to adversely affect any director, manager or officer to whom this Section 6.9 applies without the consent of such affected director, manager, or officer (it being expressly agreed that the directors, manager, and officers to whom this Section 6.9 applies shall be third-party beneficiaries of Section 6.9(b), each of whom may enforce the provisions of this Section 6.9).

 

 

(d)    In the event Buyer, the Company or any of their respective successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then, and in either such case, proper provision shall be made so that the successors and assigns of Buyer or the Company, as the case may be, shall assume all of the obligations set forth in this Section 6.9.

 

Section 6.10    Certain Waivers and Releases

 

. Effective upon the Closing, each Selling Party, on behalf of itself or themselves and their Affiliates, successors and assigns, hereby irrevocably waives, releases and discharges Buyer, the Company and their respective Affiliates and each of their respective direct or indirect equityholders and Representatives from any and all actions, causes of action, choses in action, cases, claims, suits, debts, dues, damages, judgments and Liabilities, of any nature whatsoever arising out of or relating to any acts, omissions, claims, transactions or occurrences up to and including the Closing Date that are connected with or pertain to the ownership, management, operation or conduct of the Acquired Business or the transactions contemplated by this Agreement, in each case whether absolute or contingent, liquidated or unliquidated, known or unknown, and whether arising under any agreement or understanding or otherwise, at law or equity, and no Selling Party or Seller Representative shall seek to recover any amounts in connection therewith or thereunder from the Company or any of their Affiliates; provided, however, that nothing in this Section 6.10 shall operate to release (A) any rights against, or obligations, or agreements of Buyer or the Company under this Agreement or any other Transaction Document, each of which will be enforceable in accordance with its terms; (B) any employee of the Company who is not an Owner with respect to any Fraud; or (C) any rights of the Owners in relation to the amounts, emoluments, or benefits due to them in relation to their employment or other contractual arrangements with the Company.

 

Section 6.11    Issuance of Stock Consideration; Lock-Up Restrictions; Removal of Restrictions(s).

 

(a)    Prior to Closing, Buyer has delivered a copy of the letter delivered to Buyer’s transfer agent, Computershare, Inc., instructing the transfer agent to issue the Stock Consideration to Seller, including all instructions or legends imposing transfer restrictions applicable to the Stock Consideration as mutually agreed by Buyer and Seller. Immediately following the Closing, Buyer shall deliver or cause its transfer agent to deliver a screen shot to Seller evidencing that the shares comprising the Stock Consideration have been validly issued to Seller in book-entry form by Buyer’s transfer agent on its books and records followed by a written statement to that effect within one (1) Business Day after the Closing.

 

 

(b)    Each Selling Party acknowledges and agrees that Buyer has certain policies that may prohibit employees of Buyer and its Affiliates from selling or transferring shares of Buyer’s common stock at certain times (“Buyer’s Black-Out Policies”). Each Selling Party agrees that the resale of the Stock Consideration issued in accordance with Section 2.4(a)(ii) (which for the avoidance of doubt shall include securities issued with respect to the Stock Consideration in connection with any stock splits, stock dividends, and the like), shall be according to the following schedule, but subject to compliance with Buyer’s Black-Out Policies, if applicable:

 

(i)    Beginning on the Closing Date through the six-month anniversary thereafter (the “Six-Month Lock-Up Period”), Seller shall not be entitled to resell or transfer any of the Stock Consideration;

 

(ii)    for the period commencing after the expiration of the Six-Month Lock-Up Period and continuing through the one-year anniversary of the Closing Date (the “One-Year Lock-Up Period”), Seller and its Permitted Transferee(s) shall be entitled to resell or transfer up-to twenty percent (20%) of the Stock Consideration in compliance with Rule 144 of the Securities Act or pursuant to other applicable securities Laws;

 

(iii)    for the period commencing after the expiration of the One-Year Lock-Up Period and continuing through the two-year anniversary of the Closing Date (the “Two-Year Lock-Up Period”), Seller and its Permitted Transferee(s) shall be entitled to resell or transfer up-to forty-five percent (45%) of the Stock Consideration, on a cumulative basis;

 

(iv)    for the period commencing after the expiration of the Two-Year Lock-Up Period and continuing through the three-year anniversary of the Closing Date (the “Three-Year Lock-Up Period”), Seller and its Permitted Transferee(s) shall be entitled to sell up-to seventy percent (70%) of the Stock Consideration, on a cumulative basis; and

 

(v)    for the period commencing after the expiration of the Three-Year Lock-Up Period, Seller and its Permitted Transferee(s) shall be entitled to resell or transfer any or all of the remaining, unsold Stock Consideration.

 

(c)    Following expiration of an applicable Lock-Up Period, Buyer hereby agrees to use its commercially reasonable efforts, and without set-off or deduction of any kind, to promptly cause its transfer agent to remove all stock transfer restrictions or to otherwise issue and deliver new certificates without restrictive legends with respect to all or a portion of shares of Buyer’s common stock comprising Stock Consideration which are no longer subject to such Lock-Up Period, within four (4) Business Days of receipt of a written request from Seller or its Permitted Transferee. The written request from Seller or its Permitted Transferee shall contain such normal and customary certifications from Seller or its Permitted Transferee as may be reasonably required by Buyer, such as representations from the holder as to how long the holder has held the applicable securities, how and when the holder purchased or received the applicable securities, and whether the holder is an “affiliate” of Buyer, and if applicable with respect to Stock Consideration that is past the Six-Month Lock-Up Period but not past the One-Year Lock-Up Period, any other sales of securities made by holder within the past three months, along with a certificate from the holder’s broker as to the manner of sale, along with a copy of the restricted security, if then certificated, and a copy of the Form 144 filed by such holder, if applicable.

 

 

Section 6.12    Permitted Transfers. Notwithstanding anything to the contrary contained in this Agreement but subject to any Applicable Law and to Buyer’s Black-Out Policies, after the One-Year Lock-Up Period, Seller may (x) transfer and assign, upon written notice to Buyer, all or any shares comprising Stock Consideration still held by Seller (i) to any Permitted Transferee, or (ii) (a) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual, or for estate planning purposes; (b) in the case of an individual, pursuant to a qualified domestic relations order; (c) in the case of an individual, by gift to a charitable organization; (d) in the case of an entity, by virtue of the laws of the jurisdiction of the entity’s organization and the entity’s organizational documents upon dissolution of the entity; or (e) pursuant to any liquidation, merger, share exchange or other similar transaction which results in all of Buyer’s stockholders having the right to exchange their stock for cash, securities or other property subsequent to the Closing Date; provided, that, in connection with any transfer or assignment of such transferred Stock Consideration pursuant to clauses (x)(i), (x)(ii)(a), (x)(ii)(b), (x)(ii)(c), (x)(ii)(d), or (x)(ii)(e) above (each a “Permitted Transfer”), the restrictions and obligations contained in Section 6.11 will continue to apply to such transferred Stock Consideration after any such transfer or assignment and such transferee shall and prior to the expiration of the Three-Year Lock-Up Period execute and deliver a lock-up agreement substantially on the same terms contained in Section 6.11. Buyer further agrees that upon written notice of a Permitted Transfer by a Selling Party, that Buyer will notify Buyer’s transfer agent of such Permitted Transfer and Buyer will cause its transfer agent to notate and reflect the transfer of the same on the book entry shares comprising such Stock Consideration.

 

Section 6.13    Rule 144 Compliance. With a view to making available to the holders of Rule 144 Securities the benefits of Rule 144 and any other rule or regulation of the SEC or any other applicable federal or state securities Laws that may at any time permit a holder to sell securities of Buyer to the public without registration, Buyer shall use its commercially reasonable efforts:

 

(a)    to make and keep public information available, as those terms are understood and defined in Rule 144, at all times after the Closing;

 

(b)    to file with the SEC in a timely manner all reports and other documents required of Buyer under the Securities Act and the Exchange Act, at any time after the Closing; and

 

(c)    to furnish to any holder so long as the holder owns Rule 144 Securities, promptly upon request, a written statement by Buyer as to its compliance with the reporting requirements of Rule 144 and of the Securities Act and the Exchange Act.

 

ARTICLE VII
SURVIVAL; INDEMNIFICATION;
LIMITATIONS ON INDEMNIFICATION AND CLAIMS

 

Section 7.1    Survival.

 

(a)    The representations and warranties of the Selling Parties and Buyer contained in this Agreement shall survive the Closing Date until 5:00 p.m. Houston time on the date that is eighteen (18) months following the Closing Date, except that Seller Fundamental Representations and Buyer Fundamental Representations shall survive the Closing Date until the date that is thirty (30) days after the expiration of the applicable statute of limitations to which such representation applies, whereupon in each case such representations and warranties will terminate and expire (such applicable periods referred to above, the “Survival Period”). This Section 7.1‎ shall not limit any covenant or agreement in this Agreement which contemplates performance after the Closing; provided, however, that the foregoing limitation shall not apply in the event of Fraud.

 

 

(b)    Following the expiration of the applicable Survival Period, no Claim will or may be made or prosecuted through a Proceeding or otherwise, and no indemnification will or may be sought under this Article VII, by any Indemnified Party for a breach of a representation and warranty in this Agreement, provided, however, that the foregoing limitation shall not apply in the event of Fraud.

 

Section 7.2    Indemnification of Buyer Indemnitees. Subject to the applicable provisions of this Article VII, from and after the Closing, the Selling Parties, jointly and severally shall indemnify and hold harmless each Buyer Indemnitee against all Third-Party Claims and all Damages that arise from, are based on or relate to or otherwise are attributable to, without duplication: (a) any breach of any representations and warranties of any of the Selling Parties (or any alleged breach in writing in connection with a Third-Party Claim) set forth in Article III or Article IV; provided, however, that, any Damages or Third-Party Claims that arise from, are based on or relate to or otherwise are attributable to, any breach of any representations and warranties of any of the Selling Parties relating to Amtran (or any alleged, in writing, in connection with a Third-Party Claim) shall be indemnified and held harmless in accordance with this Section 7.2 to the full extent and amount of such Damages or Third-Party Claims, on a pro rata basis to Amran’s holdings in Amtran; (b) any breach or nonfulfillment of any covenant or agreement on the part of any of the Selling Parties under this Agreement; (c) any Pre-Closing Taxes (other than Transfer Taxes for which Buyer is responsible under Section 6.4(e)) imposed on the Company, or any Pre-Closing Taxes (other than Transfer Taxes for which Buyer is responsible under Section 6.4(e)) imposed on Amtran, on a pro rata basis to Amran’s holdings in Amtran; (d) the Reorganization; (e) any information submitted prior to the Closing by a Selling Party, Company, or Amtran to a Governmental Authority (including any information which not disclosed to such Governmental Authority, but which should have been properly disclosed) in connection with obtaining the Consent of such Governmental Authority to the transactions contemplated by this Agreement; and (f) any Damages incurred by Buyer or its Affiliates following the Closing with respect to the matter set forth in Section 7.2 of the Disclosure Schedules (each such Third-Party Claim or Damage referred to in this sentence being a “Buyer Indemnified Loss”).

 

Section 7.3    Indemnification of Seller Indemnitees. Subject to the applicable provisions of this Article VII, from and after the Closing, Buyer will indemnify and hold harmless each Seller Indemnitee against all Third-Party Claims and all Damages that arise from, are based on or relate or otherwise are attributable to, without duplication: (a) any breach by Buyer of its representations and warranties (or any alleged breach in connection with a Third-Party Claim) set forth in Article V; (b) any breach or nonfulfillment of any covenant or agreement on the part of Buyer under this Agreement; (c) any and all Transfer Taxes for which Buyer is responsible in accordance with Section 6.4(e) hereof; (d) any and all Taxes imposed on the Company or Amtran for any Tax period (or portion thereof) that begins after the Closing Date (determined in accordance with Section 6.4(b) for any Straddle Period); and (e) any information submitted prior to the Closing by Buyer to a Governmental Authority (including any information which not disclosed to such Governmental Authority, but which should have been properly disclosed) in connection with obtaining the Consent of such Governmental Authority to the transactions contemplated by this Agreement (each such Third-Party Claim or Damage referred to in this sentence being a “Seller Indemnified Loss”).

 

 

Section 7.4    Conditions of Indemnification.

 

(a)    Subject to Section 6.4(c) which shall exclusively govern all Tax matters covered thereby, all Claims for indemnification under ‎Section 7.2 or Section 7.3 shall be asserted and resolved as this Section 7.4 provides.

 

(b)    In the event a Party (an “Indemnified Party”) (i) believes in good faith that it has suffered or incurred Damages or (ii) learns of or receives notice of any commencement of any Proceeding, the written assertion of any Third-Party Claim or the imposition of any penalty, assessment or judgment, in each case for which indemnity may be sought pursuant to Section 7.2 or Section 7.3, and such Indemnified Party intends to seek indemnity from another Party (the “Indemnifying Party”) pursuant to Section 7.2 or Section 7.3, such Indemnified Party shall provide the Indemnifying Party with written notice (a “Claim Notice”) of such Proceeding, Third-Party Claim, penalty, assessment or judgment promptly (and in no event later than 10 days) after the Indemnified Party learns of such Damages or receives notice of such Proceeding, Third-Party Claim, penalty, assessment or judgment; provided however that any Claim Notice must be received by the Indemnifying Party prior to the expiration of the applicable Survival Period. Each Claim Notice shall provide a copy of all papers served with respect to that Claim (if any), and describe with reasonable detail the basis of the Direct Claim (as defined in Section 7.6(a) below) or Third-Party Claim, an estimate of the amount of damages attributable to that Claim to the extent feasible (which estimate will not be conclusive of the final amount of that Claim), any other remedy sought thereunder and the basis for the Indemnified Party’s request for indemnification under this Agreement. The failure to promptly deliver a Claim Notice will not relieve the Indemnifying Party of its obligations to the Indemnified Party with respect to the related Direct Claim or Third-Party Claim (A) unless the Indemnified Party fails to deliver a valid Claim Notice prior to expiration of the applicable Survival Period or (B) unless and only to the extent that the Indemnifying Party is materially prejudiced thereby.

 

 

(c)    At any time after receipt of a Claim Notice from an Indemnified Party with respect to a Third-Party Claim, the Indemnifying Party may elect to assume and control the defense of any such Third-Party Claim or any Proceeding resulting therefrom with counsel reasonably satisfactory to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its election to assume and control the defense of a Third-Party Claim or any Proceeding resulting therefrom, the Indemnifying Party shall not, so long as the Indemnifying Party diligently conducts such defense, be liable to the Indemnified Party under this Article VII for any fees of other counsel or any other expenses with respect to the defense of such Third-Party Claim, in each case subsequently incurred by the Indemnified Party in connection with the defense of such Third-Party Claim. In the event that an Indemnifying Party assumes the defense of a Third-Party Claim, then the Indemnifying Party will have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third-Party Claim in the name and on behalf of the Indemnified Party, and the Indemnified Party will cooperate reasonably with the Indemnifying Party in all aspects of any investigation, defense, pretrial activities, trial, compromise, settlement or discharge of such Third-Party Claim, including by providing the Indemnifying Party with all reasonably requested information and reasonable access to employees and officers (including as witnesses) and the right to inspect and copy documents and records or other information; provided, however, the Indemnifying Party will not consent to any judgment or enter into any settlement with respect to any Third-Party Claim without the prior written consent of such Indemnified Party (which consent shall not be unreasonably withheld, delayed or conditioned) that (i) does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a full and unconditional release from all Liability in respect of such claim or litigation and all other claims arising out of the same or similar facts or circumstances, (ii) involves any finding or admission of any fault on the part of an Indemnified Party, or (iii) imposes any equitable relief or other non-monetary obligations on any Indemnified Party. Notwithstanding anything in this Article VII to the contrary, (i) the Indemnifying Party shall not be entitled to assume the defense of any Third-Party Claim if the defense and conduct of the Third-Party Claim is handled by the Indemnifying Party’s insurer and (ii) neither the Indemnifying Party nor the Indemnified Party shall settle, compromise or make any other disposition of any Third-Party Claim which would or might result in any Liability to the Indemnified Party or the Indemnifying Party, respectively, under this Article VII without the written consent of such other Party (which shall not be unreasonably withheld, delayed or conditioned) unless the sole relief provided is monetary damages that are paid in full by the Party agreeing to such settlement, compromise or disposition. All costs and expenses incurred by the Indemnifying Party in defending any Third-Party Claim shall be counted in calculating the amounts set forth in Section 7.7(a) if the Third-Party Claim relates to a matter to which Section 7.7(a) applies. The Indemnified Party may participate in, but not control, any defense or settlement of any Third-Party Claim that the Indemnifying Party controls under this Section 7.4(c) and will bear its own costs and expenses with respect to that participation; provided, however, that (1) if the Third-Party Claim seeks any injunction or other equitable relief against the Indemnified Party, or (2) if the named parties to any such action (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party, and the Indemnified Party has been advised in writing by outside counsel that there is a conflict of interest which renders it inadvisable for one firm to represent the Indemnified Party and the Indemnifying Party, then the Indemnified Party may employ separate counsel at the reasonable expense of the Indemnifying Party (provided, that such counsel is limited to one separate firm of attorneys, in addition to one local counsel firm), and, on its written notification of that employment, the Indemnifying Party will not have the right to assume or continue the defense of that action on behalf of the Indemnified Party.

 

(d)    If the Indemnifying Party (i) elects not to defend the Indemnified Party under this Article VII or (ii) fails to notify the Indemnified Party that the Indemnifying Party elects to defend the Indemnified Party under ‎Section 7.4(c), then the Indemnified Party will have the right to defend, at the sole cost and expense of the Indemnifying Party (if the Indemnified Party is entitled to indemnification hereunder), the Third-Party Claim by all appropriate proceedings, which proceedings the Indemnified Party must promptly and vigorously prosecute to a final conclusion or settle. The Indemnified Party will have full control of such defense and proceedings; provided, however, the Indemnified Party will not enter into any settlement with respect to any Third-Party Claim that would result in payment of an amount for which the Indemnifying Party would be liable under this Article VII without the prior written consent of that Indemnifying Party (which consent shall not be unreasonably withheld, delayed or conditioned). Notwithstanding the foregoing, if it is determined that the Indemnifying Party does not have any Liability toward the Indemnified Party under this Article VII, then the Indemnifying Party will not be required to bear the costs and expenses of the Indemnified Party’s defense under this Section 7.4 or of the Indemnifying Party’s participation therein at the Indemnified Party’s request, and the Indemnified Party will reimburse the Indemnifying Party in full for all reasonable costs and expenses of that Third-Party Claim. The Indemnifying Party may participate in, but not control, any defense or settlement of any Third-Party Claim that the Indemnified Party controls under this Section 7.4(d), and the Indemnifying Party will bear its own costs and expenses with respect to that participation.

 

 

(e)    The Party assuming defense of the Third-Party Claim shall make available to the other Party all material records filed in any proceedings or any other relevant information at the reasonable request of the other Party, in relation to such Third-Party Claim, without expense (other than reimbursement of actual out-of-pocket expenses to deliver the aforesaid materials), subject to any confidentiality restrictions imposed by the court or tribunal hearing the proceeding(s).

 

Section 7.5    Payments by an Indemnifying Party. Payments of all amounts owing by an Indemnifying Party under this Article VII relating to a Third-Party Claim will be made within 30 days after the latest of (a) the settlement of that Third-Party Claim, (b) the expiration of the period for appeal of a final adjudication of that Third-Party Claim, or (c) the expiration of the period for appeal of a final adjudication of the Indemnifying Party’s Liability toward the Indemnified Party under this Agreement in respect of that Third-Party Claim, provided that in no event shall payment of amounts owing by an Indemnifying Party under this Article VII relating to a Third-Party Claim be made later than ten (10) days prior to the date the Indemnified Party is required to make payment as a result of such Third-Party Claim. Any and all payments due and owing from the Selling Parties under Section 7.5 or Section 7.6(a) shall be satisfied first from the Indemnification Escrow, without a requirement to replenish and second, from the Seller Parties, jointly and severally, in cash by check or wire transfer.

 

Section 7.6    Procedures for Direct Claims.

 

(a)    The Indemnifying Party shall have 30 days (the “Response Period”) after its receipt of a Claim Notice with respect to direct claims for indemnification against Buyer or the Seller Parties, respectively, under Section 7.2 or Section 7.3 of this Agreement that are not based upon Third-Party Claims (“Direct Claims”) to respond in writing to such Direct Claim, which response shall accept or reject the Direct Claim. If the Indemnifying Party does not so respond within the Response Period, the Indemnifying Party shall be deemed to have rejected such Direct Claim, in which case, the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement. The Indemnified Party shall make available such reasonably requested information and assistance (including reasonable access to the premises and personnel of the Company and Amtran (following advance written notice and during regular business hours) and the right to inspect and copy any accounts, documents, records or other information (subject to the execution and delivery of a confidentiality agreement on terms reasonably and customarily acceptable to parties in similar situations)) of the Company and Amtran as the Indemnifying Party or any of its Representatives may reasonably request.

 

(b)    Payments of all amounts owing by a Party pursuant to Section 7.6(a) will be made within 30 days after the settlement, agreement or expiration of the period for appeal of a final adjudication of such Party’s Liability with respect to such amount under this Agreement, in the event such Party has timely disputed the Claim giving rise to the obligation to make such payment, as provided above. Subject to the Buyer Indemnitees’ compliance with the terms and provisions of this Article VII, including the obligation of the Buyer Indemnitees to use commercially reasonable efforts to recover any Buyer Indemnified Loss under any applicable insurance policies, any and all payments due and owing from Seller under Section 7.5 or Section 7.6(a) shall be satisfied first from the Indemnification Escrow, without a requirement to replenish, and second, from the Seller Parties, jointly and severally, in cash by check or wire transfer.

 

 

Section 7.7    Certain Limitations on Indemnification for Third-Party Claims and Direct Claims.

 

(a)    No indemnification shall be made by the Selling Parties pursuant to Section 7.2(a) (i) for any individual Buyer Indemnified Loss unless such individual Buyer Indemnified Loss exceeds the De Minimis Amount, and (ii) unless and until the aggregate amount of Buyer Indemnified Losses permitted under clause (i) above exceed the Tipping Basket, in which event, indemnification shall be made by the Selling Parties starting with the first dollar of such Buyer Indemnified Losses in excess of fifty percent (50%) of the Tipping Basket. The maximum amount that the Selling Parties, jointly and severally, shall be required to pay pursuant to Section 7.2(a) in respect of all Buyer Indemnified Losses shall not exceed the Damages Cap, after which point the Selling Parties shall have no obligation to indemnify Buyer Indemnitees from and against any further Buyer Indemnified Losses pursuant to Section 7.2(a).

 

(b)    No indemnification shall be made by Buyer pursuant to Section 7.3(a) (i) for any individual Seller Indemnified Loss, unless such Seller Indemnified Loss exceeds the De Minimis Amount, in which event the full amount of such Buyer Indemnified Loss from the first dollar shall count toward the Tipping Basket and (ii) unless and until the aggregate amount of Seller Indemnified Losses permitted under clause (i) above exceed the Tipping Basket, in which event, indemnification shall be made by Buyer starting with the first dollar of such Seller Indemnified Losses, without regard to the Tipping Basket. The maximum amount that Buyer shall be required to pay pursuant to Section 7.3(a) in respect of all Seller Indemnified Losses shall not exceed the Damages Cap, after which point Buyer shall have no obligation to indemnify Seller Indemnitees from and against any further Seller Indemnified Losses pursuant to Section 7.3(a).

 

(c)    The limitations set forth in Section 7.7(a) and Section 7.7(b) shall not apply to (i) Buyer Indemnified Losses or Seller Indemnified Losses, respectively, based upon, arising out of, with respect to or by reason of any inaccuracy in or breach of any Seller Fundamental Representation or Buyer Fundamental Representation, (ii) Buyer Indemnified Losses under Section 7.2(b), (c), (d), (e) or (f), (iii) Seller Indemnified Losses under Section 7.3(b), (c), (d) or (e), or (iv) in the event of Fraud. Notwithstanding the preceding sentence, however, except in the event of Fraud, in no event shall any Person be entitled to indemnification under Section 7.2 or Section 7.3 for any amounts in excess of the Purchase Price.

 

(d)    The amount of any Buyer Indemnified Losses shall be reduced by any amount directly or indirectly received by a Buyer Indemnitee with respect thereto under any insurance coverage or from any other party alleged to be responsible therefor (net of costs of recovery and after giving effect to any applicable deduction or retention and insurance premiums attributable to such claims). Any Indemnified Party having a claim under Article VII shall make a good faith effort to recover any Damages from insurers of such Indemnified Party or its Affiliates under applicable insurance policies, in each case, as to reduce the amount of any indemnifiable Damages hereunder. If such a recovery is received or enjoyed by an Indemnified Party after it receives payment under this Agreement with respect to any Damages, then a refund equal in aggregate amount of such recovery, reduction or setoff (net of costs of recovery and after giving effect to any applicable deduction or retention and insurance premiums attributable to such claims) will be made promptly by such Indemnified Party to the Indemnifying Party.

 

 

(e)    The amount of any Seller Indemnified Losses shall be reduced by any amount directly or indirectly received by a Seller Indemnitee with respect thereto under any insurance coverage or from any other party alleged to be responsible therefor (net of costs of recovery and after giving effect to any applicable deduction or retention and insurance premiums attributable to such claims). Any Indemnified Party having a claim under Article VII shall make a good faith effort to recover any Damages from insurers of such Indemnified Party or its Affiliates under applicable insurance policies, in each case as to reduce the amount of any indemnifiable Damages hereunder. If such a recovery is received or enjoyed by an Indemnified Party after it receives payment under this Agreement with respect to any Damages, then a refund equal in aggregate amount of such recovery, reduction or setoff (net of costs of recovery and after giving effect to any applicable deduction or retention and insurance premiums attributable to such claims) will be made promptly to such Indemnifying Party.

 

(f)    For the sole purpose of determining the amount of losses under Section 7.2(a) and Section 7.3(b) (and not for determining whether or not any inaccuracy in, or breach of, any representation or warranty has occurred), any materiality, Material Adverse Effect or other similar qualifications in the representations and warranties shall be disregarded.

 

Section 7.8    Sole and Exclusive Remedy. From and After the Closing, other than the rights of the parties hereto to seek specific performance, injunctive or other equitable relief pursuant to Section 8.17, and except in the event of fraud, the sole and exclusive remedy of any Party to this Agreement and its Affiliates with respect to this Agreement, the events giving rise to this Agreement or any other agreement or document executed among the Parties, and the transactions contemplated herein and therein shall be limited to the indemnification provisions set forth in this Article VII, and, in furtherance of the foregoing, except for Buyer Indemnified Losses or Seller Indemnified Losses, as the case may be, each of the Parties, on behalf of itself and of its Affiliates, hereby waives, releases and discharges, to the fullest extent permitted by Applicable Law, the other Parties to this Agreement and its respective Affiliates from any and all other Claims, as the case may be, of any kind (whether at Law or in equity or otherwise, foreseen or unforeseen, matured or unmatured, known or unknown, accrued or not accrued, or based on any Law or right of action or otherwise) notwithstanding the strict liability, gross negligence or negligence of a released Party (whether sole, joint or concurrent or active or passive).

 

(b)    The Parties intend that, even though indemnification obligations appear in various sections and articles of this Agreement, the indemnification procedures, limitations, express negligence and other provisions contained in this Article VII shall apply to all indemnity obligations of the Parties under this Agreement, except to the extent expressly excluded in this Article VII.

 

Section 7.9    Disclaimer of Other Representations and Warranties. In entering into this Agreement and in consummating the transactions contemplated hereby, each of the Parties has relied solely upon its own investigation and analysis and the specific representations and warranties set forth in Article III, Article IV, and Article V. No Party has relied on any representation or warranty other than as described in the preceding sentence; provided, however, that nothing herein shall limit any liability with respect to Fraud.

 

 

Section 7.10    No Multiple Recoveries. Notwithstanding anything herein to the contrary, in the event any Party (or any other indemnitee) is entitled to a payment or other benefit under more than one provision of this Agreement arising out of or resulting from the same set of facts or circumstances and such Person has already been made whole by payment or another benefit under one of those provisions (e.g. any adjustments made in Article II hereof), in no event shall such Person be entitled to receive a subsequent payment or benefit under any other provision of this Agreement. In furtherance of the foregoing, any Liability for indemnification hereunder shall be without duplication (i.e., without allowing the claiming Party (or other indemnitee) to receive more than its Damages) by reason of the state of facts giving rise to such Liability constituting a breach of more than one representation, warranty, covenant or agreement.

 

Section 7.11    No Subrogation. The Indemnifying Party shall not be subrogated to the rights of the Indemnified Party in respect of any insurance relating to Buyer Indemnified Losses or Seller Indemnified Losses, as the case may be, to the extent of any indemnification payments made hereunder.

 

Section 7.12    Mitigation. Each Party shall, and shall cause its applicable Affiliates and Representatives to take all commercially reasonable steps to mitigate any Buyer Indemnified Losses or Seller Indemnified Losses, as applicable, upon and after becoming aware of any fact, event, circumstance or condition that has given rise to, or would reasonably be expected to give rise to, any Buyer Indemnified Losses or Seller Indemnified Losses, as applicable, that are indemnifiable hereunder, provided, however, that this Section shall not require any Party or any such Affiliate or Representative to spend any amount of money or to relinquish any right or incur any obligation in connection with such mitigation.

 

Section 7.13    Indemnification Escrow Provisions. The Indemnification Escrow shall continue in existence from the Closing Date until 5:00 p.m., Houston time, until the earlier of: (i) the date in which all remaining funds in the Indemnification Escrow are paid out pursuant to the joint written instructions of Buyer and Seller Representative in accordance with the Escrow Agreement or (ii) (A) with respect to twenty five percent (25%) of the Indemnification Escrow, the sixth (6th) month anniversary of the Closing Date (such date, being the “First Release Date”), (B) with respect to an additional twenty five percent (25%) of the Indemnification Escrow, the twelfth (12th) month anniversary of the Closing Date (such date, being the “Second Release Date”), and (C) with respect to all amounts then remaining in the Indemnification Escrow, including any interest accrued on account of the Indemnification Escrow, the eighteenth (18th) month anniversary of the Closing Date (such date, being the “Third Release Date”, with the First Release Date, Second Release Date, and Third Release Date, each being an “Escrow Release Date”), provided, that, the Indemnification Escrow shall not terminate with respect to, and the Escrow Agent shall reserve in the Indemnification Escrow, such portion of the Indemnification Escrow (up to the entire amount thereof) equal to the sum of such amount as would then be needed to satisfy any unsatisfied Third Party Claims or Direct Claims specified in a Claim Notice delivered in good faith to the Escrow Agent at least one (1) Business Day prior to any particular Escrow Release Date, which unsatisfied Third-Party Claim or Direct Claim shall be pending at the time of the termination of the applicable Escrow Release Date. At the termination of the periods specified in clauses (i) or (ii) above, Buyer and Seller Representative shall each execute and deliver to the Escrow Agent joint written instructions within three (3) Business Days of such termination, which instructions shall otherwise be in accordance with the Escrow Agreement, to cause the Escrow Agent to transfer on such the unreserved portion of the Indemnification Escrow, if any, to Seller. Upon such time, as to any unsatisfied Third-Party Claim or Direct Claim is no longer pending (because such claim either has not been disputed by Seller or has been resolved in accordance with the applicable provisions of Article VII of this Agreement), the portion of the Indemnification Escrow that shall have been reserved for such claim shall be distributed to (i) Seller, if the unsatisfied claim is resolved in Seller’s favor, or (ii) to Buyer, if the unsatisfied indemnification claim is not disputed by Seller or is resolved in Buyer’s favor. Any determination as to the resolution of any unsatisfied Third-Party Claims and Direct Claims shall be made in accordance with Article VII of this Agreement and upon such resolution, Buyer and Seller Representative shall deliver to the Escrow Agent joint written instructions within three (3) Business Days of such resolution, and in accordance with the Escrow Agreement, instructing the Escrow Agent to deliver funds from the Indemnification Escrow in accordance with the resolution of such Third-Party Claim or Direct Claim, as the case may be.

 

 

Section 7.14    Adjustment to Purchase Price. Unless otherwise required by Applicable Law, for all Tax purposes, the Parties agree to treat (and will cause each of their respective Affiliates to treat) any indemnification payment made under this Agreement (including payments made pursuant to Section 6.4) as an adjustment to the Purchase Price.

 

ARTICLE VIII

GENERAL PROVISIONS

 

Section 8.1    Amendment and Modification. This Agreement may be amended, modified or supplemented at any time by the Parties, pursuant to an instrument in writing signed by Buyer and Seller Representative. Notwithstanding any provision of this Agreement, this Agreement, including Article VII hereof, may be amended or modified at any time by the Buyer and Seller Representative without the need or requirement of any consent or approval of any other Buyer Indemnitee or Seller Indemnitee and any amendment or modification agreed to by the Parties shall be binding on all Buyer Indemnitees and all Seller Indemnitees.

 

Section 8.2    Entire Agreement; Assignment. This Agreement (including the Exhibits and Schedules hereto), and the other Transaction Documents (a) constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede other prior agreements and understandings both written and oral among the Parties with respect to the subject matter hereof and thereof and (b) shall not be assigned, by operation of Law or otherwise, by a Party, without the prior written consent of the other Party. Any attempted assignment in violation of this Section 8.2 shall be void and without effect.

 

Section 8.3    Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision hereof shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

 

 

Section 8.4    Expenses. Except as otherwise provided in this Agreement, all costs and expenses (including legal, accounting and financial advisory fees and expenses) incurred in connection with, or in anticipation of, this Agreement and the transactions contemplated hereby, shall be paid by the Party incurring such expenses; provided, however, that any costs and expenses for filings incurred by Buyer in connection with the HSR Act will be borne $52,500 by Buyer and $20,501 by Seller (with respect to Seller’s share, the Parties agree that it shall be added to Transaction Costs).

 

Section 8.5    Waiver. Except as otherwise expressly provided in this Agreement, no failure to exercise, delay in exercising, or single or partial exercise of any right, power or remedy by any Party, and no course of dealing between the Parties, shall constitute a waiver of any such right, power or remedy. No waiver by a Party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No waiver shall be valid unless in writing and signed by (a) in the case of a waiver by a Selling Party, such Selling Party or Seller Representative and (b) in the case of a waiver by Buyer, Buyer.

 

Section 8.6    Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties. Signatures to this Agreement transmitted by electronic mail in “portable document format” (.pdf) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.

 

Section 8.7    Governing Law. This Agreement and the legal relations between the Parties shall be governed by and construed in accordance with the Laws of the State of Delaware, without regard to any principles of conflicts of Laws thereof that would result in the application of the Laws of any other jurisdiction.

 

 

Section 8.8    Dispute Resolution.

 

(a)    Except for the dispute resolution mechanisms described in Section 2.6, Seller Representative on behalf of the Selling Parties and Buyer shall initially attempt to resolve all claims, disputes or controversies arising under, out of or in connection with this Agreement by conducting good faith negotiations amongst themselves. If Seller Representative and Buyer are unable to resolve the matter following good faith negotiations, the matter shall thereafter be resolved by binding arbitration and each Party hereto hereby waives any right it may otherwise have to the resolution of such matter by any means other than binding arbitration pursuant to this Section 8.8. Whenever Seller Representative on behalf of the Selling Parties or Buyer shall decide to institute arbitration proceedings, it shall provide written notice to that effect to the other Party. The Party giving such notice shall, however, refrain from instituting the arbitration proceedings for a period of sixty (60) days following such notice. During this period, Seller Representative on behalf of the Selling Parties and Buyer shall make good faith efforts to amicably resolve the claim, dispute or controversy without arbitration. All offers of compromise or settlement among Seller Representative on behalf of the Selling Parties and Buyer or their Representatives in connection with the attempted resolution of any dispute or controversy (i) shall be deemed to have been delivered in furtherance of a dispute settlement, (ii) shall be exempt from discovery and production and (iii) shall not be admissible into evidence (whether as an admission or otherwise) in any proceeding for the resolution of the dispute or controversy. Any arbitration hereunder shall be conducted under the commercial arbitration rules of the American Arbitration Association. Any such arbitration shall be conducted in Houston, Texas by a panel of three arbitrators: one arbitrator shall be appointed by each of Seller Representative and Buyer; and the third shall be appointed by the American Arbitration Association. The panel of arbitrators shall have the authority to grant specific performance. Judgment upon the award so rendered may be entered in any court having jurisdiction or application may be made to such court for judicial acceptance of any award and an order of enforcement, as the case may be. In no event shall a demand for arbitration be made after the date when institution of a legal or equitable proceeding based on the claim, dispute or controversy in question would be barred under this Agreement or by the applicable statute of limitations.

 

(b)    Notwithstanding the foregoing, either Seller Representative on behalf of the Selling Parties or Buyer may seek from any court of competent jurisdiction an order for immediate, temporary or preliminary injunctive relief pending arbitration to prevent the occurrence of irreparable harm and to specifically enforce compliance with the covenants and obligations of such Party under this Agreement. In any such Proceeding or in a Proceeding to enforce any arbitral award rendered under Section 8.8(a), each of the Parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the courts of the State of Texas located in the City of Houston, Harris County, or of the United States of America sitting in the Southern District of Texas, and any appellate court from any thereof, in any Proceeding arising out of or relating to this Agreement or any other Transaction Document or any agreements contemplated hereby or thereby for any reason other than the failure to serve process in accordance with this Section 8.8, and irrevocably waive the defense of an inconvenient forum or an improper venue to the maintenance of any such Proceeding. Any service of process to be made in such Proceeding may be made by delivery of process in accordance with the notice provisions contained in Section 8.10. The consents to jurisdiction set forth in this Section 8.8 shall not constitute general consents to service of process in the State of Texas and shall have no effect for any purpose except as provided in this Section 8.8 and shall not be deemed to confer rights on any Person other than the Parties. The Parties agree that a final judgment in any such Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Applicable Law. In addition, each of the Parties hereto agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court.

 

 

Section 8.9    Waiver of Jury Trial.

 

(a)    Each Party acknowledges and agrees that any controversy which may arise under this Agreement or any agreement is likely to involve complicated and difficult issues, and therefore each of the Parties hereby irrevocably waives all right to trial by jury in any Proceeding arising out of or relating to this Agreement or any other Transaction Document or any agreements contemplated hereby or thereby. The Parties also waive any bond or surety or security upon such bond that might, but for this waiver, be required. The scope of this waiver is intended to be all encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including contract claims, tort claims, breach of duty claims and all other common law and statutory claims. This waiver is irrevocable, meaning that it may not be modified either orally or in writing, and the waiver shall apply to any subsequent amendments, renewals, supplements or modifications to this Agreement. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.

 

Section 8.10    Notices and Addresses. All notices, requests, instructions, claims, demands and other communications required or permitted to be given hereunder will be in writing and will be given if delivered by hand or sent by registered or certified mail (postage prepaid, return receipt requested) or by overnight courier (providing proof of delivery) or by e-mail (providing confirmation of transmission). Any notice mailed within the same country shall be deemed to have been given and received on the third Business Day following the day of mailing, and any notice mailed between countries shall be deemed to have been given and received on the seventh Business Day following the day of mailing. Any notice sent by courier or delivery service shall be deemed to have been given and received at the time of confirmed delivery if such time is during normal local business hours (in the recipient’s location) or, otherwise, on the next business day after such confirmed delivery. Any notice sent by e-mail (of a PDF attachment) shall be deemed to have been given and received at the time of confirmation of transmission. Any notice sent by e-mail shall be followed reasonably promptly with a copy by mail. All such notices, requests, claims, demands or other communications will be addressed as follows:

 

(a)

if to a Selling Party or to Seller Representative, to

 

Bolt Founders, Inc.

Attention: Bhargav Shah, President

 

With copies to (which shall not constitute notice):

 

Chamberlain, Hrdlicka, White, Williams & Aughtry, P.C.
1200 Smith Street
Houston, Texas 77002
Attention: David B. Sheinbein

Email: david.sheinbein@chamberlainlaw.com

 

(b)

if to Buyer, to

 

Standex International Corporation

23 Keewaydin Drive

Salem, New Hampshire 03079

E-mail:          ddunbar@standex.com

Attention: David Dunbar

Attention: Alan J. Glass

E-mail: aglass@standex.com

 

With a copy to (which shall not constitute notice):

 

Foley Hoag LLP
Seaport West

155 Seaport Boulevard

Boston, Massachusetts 02210
Attention: Peter M. Rosenblum; William R. Kolb

Email: pmr@foleyhoag.com; wkolb@foleyhoag.com

 

 

or in any case to such other address or addresses as hereafter shall be furnished as provided in this Section 8.10 by any Party to the other Party.

 

Section 8.11    No Third-Party Beneficiaries. This Agreement is solely for the benefit of (a) Seller and Seller Representative (and their successors and permitted assigns), with respect to the obligations of Buyer under this Agreement; and (b) Buyer (and its successors and permitted assigns), with respect to the obligations of the Seller Parties and Seller Representative under this Agreement. Except as provided in (i) Section 6.3(a), (ii) Article VII and (iii) Section 8.15 (the “Third-Party Provisions”), this Agreement shall not be deemed to confer upon or give to any other third Person any remedy, claim of Liability or reimbursement, cause of action or other right. The Third-Party Provisions may be enforced by the beneficiaries thereof.

 

Section 8.12    Negotiated Transaction. The Parties, each represented by legal counsel, have each participated in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation should arise, this Agreement shall be construed as if drafted by all Parties and no presumption or burden of proof shall arise favoring or burdening any Party by virtue of the authorship of any of the provisions of this Agreement.

 

Section 8.13    Brokers and Agents.

 

(a)    Seller agrees to pay or cause to be paid any broker’s or finder’s fee, sales commission or similar form of compensation to any broker, finder or similar agent engaged by or on behalf of Seller or the Company in connection with this Agreement or any of the transactions contemplated hereby, including Northern Edge Advisors LLC and VLS & Co., and without regard to the Tipping Basket, Damages Cap or any other limitation Article VII sets forth, and the Seller Parties, jointly and severally, agree to indemnify Buyer against all Claims arising out of claims for any and all such broker’s or finder’s fee, sales commission or similar form of compensation.

 

(b)    Buyer agrees to pay any such broker’s or finder’s fee, sales commission or similar form of compensation to any broker, finder or similar agent engaged by or on behalf of Buyer in connection with this Agreement or any of the transactions contemplated hereby and, without regard to the Tipping Basket, Damages Cap or any other limitation Article VII sets forth, to indemnify Seller against all Claims arising out of claims for any and all such broker’s or finder’s fee, sales commission or similar form of compensation.

 

Section 8.14    Time of the Essence. With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence.

 

 

Section 8.15    Transaction Privilege.

 

(a)    The Parties hereby acknowledge and agree that Chamberlain, Hrdlicka, White, Williams & Aughtry, P.C. (“Chamberlain Hrdlicka”) has represented the Company, Seller and one or more of their Affiliates prior to the date of this Agreement, including in connection with the negotiation, documentation and consummation of this Agreement and the transactions contemplated by this Agreement, and that Seller and such Affiliates (other than the Company and Amtran) and their respective Representatives (each a “Seller Entity” and collectively, the “Seller Entities”) have a reasonable expectation that, after the Closing, Chamberlain Hrdlicka will, if Seller Entities so wish, represent them in connection with any pending or possible or threatened Claim or any other matter or Proceeding involving any Seller Entity or their Representatives, on the one hand, and any other Party to this Agreement (including the Company from and after the Closing) (an “Other Party”) or any of their respective Affiliates and Representatives (each an “Other Party Group Member” and collectively the “Other Party Group Members”), on the other hand, arising under or relating to this Agreement.

 

(b)    Each Other Party, on its own behalf and on behalf of the Other Party Group Members (which includes the Company and Amtran and those other Persons that are or after Closing will be Affiliates of such Other Party), hereby agrees to all of the matters and consents to the potential future representations described in this Section 8.15 and specifically expressly waives and agrees not to assert any conflict of interest that may arise or be deemed to arise under Applicable Laws or standard of professional responsibility if, after the Closing, Chamberlain Hrdlicka represents any Seller Entities or other Persons in connection with any Claim or Proceeding arising under or relating to this Agreement or the transactions contemplated by this Agreement whether or not such matter is one in which Chamberlain Hrdlicka may have previously advised Seller Entities or in respect of any other matters.

 

(c)    Each Other Party, on its own behalf and on behalf of the Other Party Group Members (which includes those Persons that are or after Closing will be Affiliates of such Other Party), hereby consents to the disclosure by Chamberlain Hrdlicka to Seller or any of its Affiliates, directors, members, partners, officers or employees of any information learned by Chamberlain Hrdlicka in the course of its representation of Seller or its Affiliates, whether or not such information is subject to attorney client privilege or Chamberlain Hrdlicka duty of confidentiality.

 

(d)    In addition, each of the Parties irrevocably acknowledges and agrees that, from and after the Closing, the attorney-client privilege arising from communications prior to the Closing between any one or more of Seller Entities and the Company (which, for the avoidance of doubt, includes for purposes hereof any Representatives of Seller Entities and the Company), on the one hand, and Chamberlain Hrdlicka, on the other hand, to the extent related to this Agreement or the transactions contemplated by this Agreement, shall be excluded from the assets or any other property, rights, privileges, powers, franchises and other interests held by any Other Party Group Members, that such attorney-client privilege shall be deemed held solely by Seller Entities, and that no Other Party Group Member shall have any right to assert, waive or otherwise alter any such attorney-client privilege at any time after the Closing. All communications between Seller Entities or the Company or Amtran, on the one hand, and Chamberlain Hrdlicka, on the other hand, relating to the negotiation, documentation and consummation of the Agreement and the transactions contemplated by the Agreement (provided, however, that such statement shall only apply to those communications with the Company or Amtran which occur prior to the Closing) shall be deemed to be privileged and to belong solely to Seller Entities (and not Other Party Group Members).  The Other Party Group Members shall not have access to any such communications, files, records or other documents (as used herein whether in electronic form or otherwise), of Chamberlain Hrdlicka relating to such engagement. The Other Parties, to the fullest extent allowed by Law, agree that no waiver of any privilege or right of Seller Entities is intended or will be claimed by any Other Party as a result of any communications, files, records or other documents being maintained within the records or files, of any Other Party Group Member or otherwise in its possession or control, and no Other Party Group Member will review, offer into evidence or otherwise attempt to use any such communications, files, records or documents (whether or not so maintained) in any claim or Proceeding arising under or relating to this Agreement and the transactions contemplated hereby.

 

 

(e)    This Section 8.15 shall be irrevocable, and no term of this Section 8.15 may be amended, waived or modified, without the prior written consent of Chamberlain Hrdlicka, Seller Representative and its respective Affiliates affected thereby. Chamberlain Hrdlicka is specifically made a third-party beneficiary of this provision of this Section 8.15.

 

Section 8.16    Disclosure Schedules. The representations and warranties of the Selling Parties set forth in this Agreement are made and given subject to the disclosures in the Disclosure Schedules. The Selling Parties will not be, nor will they be deemed to be, in breach of any such representations or warranties in respect of any such matter so disclosed in the Disclosure Schedules, provided that, for the avoidance of doubt, matters disclosed in the Disclosures Schedules shall not in any way limit Buyer Indemnities’ rights under Section 7.2(b), (c), (d), (e) or (f) for Buyer Indemnified Losses. Neither the specifications of any dollar amount in any representation, warranty or covenant contained in this Agreement nor the inclusion of any specific item in the Disclosure Schedules is intended to imply that such amount, or higher or lower amounts, or the item so included in the Disclosure Schedule or other items, are or are not material, except where any representation, warranty or covenant or the Disclosure Schedule expressly states as such (except where it is expressly stated as such), and no Person shall use the fact of the setting forth of any such amount or the inclusion of any such item in any dispute or controversy between the Parties as to whether any obligation, item or matter not described herein or included in the Disclosure Schedules is or is not material for purposes of this Agreement except where any representation, warranty or covenant or the Disclosure Schedule expressly states as such. Further, neither the specification of any item or matter in any representation, warranty or covenant contained in this Agreement nor the inclusion of any specific item in the Disclosure Schedules is intended to imply that such item or matter, or other items or matters, are or are not in the Ordinary Course of Business except where any representation, warranty or covenant or the Disclosure Schedule expressly states as such, and no Person shall use the fact of setting forth or the inclusion of any such items or matter in any dispute or controversy between the parties as to whether any obligation, item or matter not described herein or included in the Disclosure Schedules is or is not in the Ordinary Course of Business for purposes of this Agreement except where any representation, warranty or covenant or the Disclosure Schedule expressly states as such. Inclusion of information in the Disclosure Schedules will not be construed as an admission that such information is material to the business, operations of condition (financial or otherwise) of the Acquired Business or the Company and Amtran, in whole or in part, or as an admission of Liability or obligation of Seller to any third Person. The specific disclosures set forth in the Disclosure Schedules have been organized to correspond to section references in this Agreement to which the disclosure is most likely to relate, together with appropriate cross-references when disclosure is applicable to other sections of this Agreement; provided, however, that any disclosure in the Disclosure Schedules will apply to and will be deemed to be disclosed with respect to any other Section or subsection of this Agreement to the extent that the relevance of such disclosure to such other section or subsection is reasonably apparent from the face of such disclosure.

 

 

Section 8.17    Specific Performance. The Parties hereto agree that irreparable damage, for which monetary relief, even if available, would not be an adequate remedy, would occur in the event that any provision of this Agreement is not performed in accordance with its specific terms (or in accordance with any amendment or other writing entered into by the Parties hereto in accordance with the terms and provisions of this Agreement) or is otherwise breached, including if the parties hereto fail to take any action required of them hereunder to consummate the transactions contemplated by this Agreement. It is accordingly agreed that, (a) the Parties hereto shall be entitled to an injunction or injunctions, specific performance or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the courts described in Section 8.8 without proof of damages or otherwise, this being in addition to any other remedy to which they are entitled under this Agreement, and (b) the right of specific performance and other equitable relief is an integral part of the transactions contemplated by this Agreement and without that right, neither Selling Parties nor Buyer would have entered into this Agreement. The Parties hereto agree not to assert that a remedy of specific performance or other equitable relief is unenforceable, invalid, contrary to law or inequitable for any reason, and not to assert that a remedy of monetary damages would provide an adequate remedy or that the parties otherwise have an adequate remedy at law. The Parties hereto acknowledge and agree that any party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 8.17 shall not be required to provide any bond or other security in connection with any such order or injunction.

 

Section 8.18    Seller Representative.

 

(a)     By executing this Agreement, each Selling Party hereby irrevocably appoints Seller Representative as such Selling Party’s representative, attorney-in-fact and agent, with full power of substitution to act in the name, place and stead of such Selling Party in any and all respects in accordance with the terms of this Agreement and to do or refrain from doing all such further acts and things, and to execute all such documents, as Seller Representative shall deem necessary or appropriate in conjunction with any of the transactions contemplated by this Agreement or any Transaction Document, including the power:

 

(i)    to execute and deliver, and administer all matters pertaining to performance under, the Escrow Agreement;

 

(ii)    to negotiate, execute and deliver all ancillary agreements, statements, certificates, notices, approvals, extensions, waivers, undertakings, amendments, assignments and other documents required or permitted to be given in connection with this Agreement, any other Transaction Document or the consummation of the transactions contemplated by this Agreement or any other Transaction Document (it being understood that such Selling Party shall execute and deliver any such documents that Sellers’ Representative designates and agrees to execute);

 

 

(iii)    to give and receive all notices and communications to be given or received under this Agreement or any other Transaction Document and to receive service of process in connection with any claims under this Agreement or any Transaction Document (including, in each case, in connection with any proceedings conducted pursuant to Section 8.8) and the transactions contemplated hereby;

 

(iv)    to direct, on behalf of such Selling Party, the payment of any and all amounts due and payable to such Selling Party pursuant to this Agreement or any Transaction Document, subject to any adjustments made or reserves established or maintained by Seller Representative in his or her good faith discretion;

 

(v)    to defend, agree to, object to, negotiate, resolve, enter into settlements and compromises of, demand arbitration or litigation of, and comply with orders of arbitrators and courts with respect to Indemnification Claims and claims made on such Selling Party by any Buyer Indemnified Party pursuant to Article VII, dispute resolution proceedings under Section 8.8 and any other disputes or proceedings arising out of, related to or commenced under this Agreement or any Transaction Document;

 

(vi)    to incur any costs and expenses for the account of such Selling Party, manage the payment of such costs and expenses, and make all determinations that may be required or permitted to be taken by such Selling Party under this Agreement or any other Transaction Document, including any engagement of and/or the fees and expenses associated with the engagement of legal counsel, accountants, investment bankers and financial ‎advisers;

 

(vii)    to take all actions that, under this Agreement or any other Transaction Document and the transactions contemplated hereby and thereby, may be taken by such Selling Party and to do or refrain from doing any further act or deed on behalf of such Selling Party that Seller Representative deems necessary or appropriate in his or her sole discretion relating to the subject matter of this Agreement or any other Transaction Document and the transactions contemplated hereby and thereby as fully and completely as such Seller could do if personally present; and

 

(viii)    to act on behalf of such Selling Party in any amendment or waiver of or negotiation, mediation, arbitration, litigation or similar proceeding involving this Agreement or any Transaction Document.

 

(b)    This power of attorney, and all authority hereby conferred, is granted subject to the interests of Buyer hereunder and in consideration of the mutual covenants and agreements made herein and shall be irrevocable and shall not be terminated by any act of any Selling Party or by operation of Law, whether by the merger, dissolution or liquidation of the Company, Amtran or any other Selling Party or by the occurrence of any other event (other than the death or incapacity of Seller Representative or otherwise by a written assignment or transfer of this power of attorney signed by all of the Selling Parties with written notice thereof delivered to Buyer). All action taken by Seller Representative hereunder shall be final and binding upon all Selling Parties, and the Parties acknowledge and agree that Seller Representative shall have the right to enforce the rights of Selling Parties under this Agreement and any Transaction Document against Buyer. Seller Representative shall have the right, at any time and from time to time, to designate any Selling Party to exercise his or her rights and perform his or her obligations as Seller Representative under this Agreement. In the event of any such designation or other permitted assignment hereunder, all references in this Agreement to Seller Representative shall be interpreted to refer to such designee or permitted assign. Upon Buyer’s request in each instance of a designation, Seller Representative shall deliver a written instrument evidencing such designation duly executed by Seller Representative and his or her designee.

 

 

(c)    Seller Representative shall not be liable to a Selling Party for any act taken or omitted by him or her as permitted under this Agreement, the Escrow Agreement or any other Transaction Document or the transactions contemplated hereby and thereby, except to the extent such act or omission constitutes gross negligence, bad faith or a knowing and intentional breach of Seller Representative’s obligations under this Agreement. Seller Representative shall not be responsible to any Selling Party in any manner whatsoever for any failure or inability of Buyers or any other Person to honor any of the provisions of this Agreement or any other Transaction Document. Seller Representative shall, to the extent set forth in Section 8.18(d), be fully protected by Selling Parties in acting on and relying upon any written notice, direction, request, waiver, consent, receipt or other paper or document that Seller Representative in good faith believes to be genuine (including facsimiles thereof) and to have been signed or presented by the proper party or parties. Seller Representative shall not be liable to the Selling Parties for any error of judgment or any act done or step taken or omitted by Seller Representative in good faith or for any mistake in fact or Law, or for anything that Seller Representative may do or refrain from doing in connection with this Agreement or any other Transaction Document, except for Seller Representative’s own gross negligence, bad faith or knowing and intentional breach of his or her obligations under this Agreement. Seller Representative may consult with counsel of Seller Representative’s own choice and shall have complete authorization and, to the extent set forth in Section 8.18(d), protection for any action taken or suffered by Seller Representative in good faith and pursuant to the advice of such counsel.

 

(d)    Each Selling Party agrees to indemnify Seller Representative for, and to hold Seller Representative harmless against, any Damages suffered or incurred by Seller Representative arising out of or in connection with Seller Representative exercising Seller Representative’s rights or performing his or her duties under this Agreement, the Escrow Agreement or any other Transaction Document and the transactions contemplated hereby and thereby, including the costs and expenses of Seller Representative incurred in Seller Representative’s capacity thereof and the costs and expenses of successfully defending Seller Representative against any claim of liability with respect thereto, in each case, to the extent such Damages do not result from Seller Representative’s gross negligence, bad faith or knowing and intentional breach of Seller Representative’s obligations under this Agreement.

 

 

 

[Remainder of Page Intentionally Left Blank]

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

BUYER:

 

STANDEX INTERNATIONAL CORPORATION

 

 

By:  /s/ David Dunbar

Name: David Dunbar
Title: Chairman, President and CEO

 

 

 

 

 

SELLER:

 

BOLT FOUNDERS, INC.

 

 

By: /s/ Bhargav Shah
Name: Bhargav Shah

Title: President

 

 

INITIAL SELLER REPRESENTATIVE:

 

 

/s/ Bhargav Shah
BHARGAV SHAH

 

 

OWNERS:

 

 

/s/ Bhargav Shah
BHARGAV SHAH

 

 

/s/ Scott McCloskey
SCOTT MCCLOSKEY

 

 

/s/ Kevin Coulter

KEVIN COULTER

 

 

/s/ Tomas Palm

TOMAS PALM

 

 

/s/ Bhargav Shah

Bhargav Shah, Trustee of the ISHANYA 2023

FAMILY TRUST U/T/A dated December 15, 2023

 

 

 

 

COMPANY:

 

AMRAN, LLC

 

 

By: /s/ Bhargav Shah
Name: Bhargav Shah

Title: President

 

 

 

 

Exhibit A

 

Accounting Principles

 

The following accounting policies and treatments in Part I and Part II shall be applied in the preparation of the Closing Statement and the Post-Closing Statement that are required to be made in a manner consistent with or in accordance with the Accounting Principles.

 

Part I Accounting Principles

 

Accounting Principles means:

 

(i)

the accounting principles, policies, procedures, categorizations, classifications, recognition bases, definitions, methods, valuations, practices and techniques (including in respect of the exercise of management judgment and estimation methodologies), as applicable set out in paragraphs (1) to (11) below (collectively, the “Specific Principles”);

 

(ii)	to the extent not addressed in paragraph (i) above, in a manner consistent with the Company’s or Amtran’s, as applicable, past practices used in connection with the preparation of its stand-alone financial statements prior to the Closing.

 

For the avoidance of doubt, paragraph (i) shall take precedence over paragraph (ii).

 

Part II Specific Principles

 

1.

The Closing Statement and the Estimated Adjustment Amount shall be prepared prior to the Closing Date without giving effect to the transactions contemplated by this Agreement. The Closing Statement and the Estimated Adjustment Amount shall be based on facts and circumstances as they exist as of Closing in accordance with US GAAP (for the Company) and Indian Accounting Standards (for Amtran).

 

2.

The Closing Statement and the Post-Closing Statement shall be prepared on a stand-alone basis for each entity (the Company and Amtran) and on the basis that each entity is a going concern and shall exclude the effect of change of control and will not take into account the effects of any post-Closing reorganizations or the post-Closing intentions or obligations of Buyer.

 

3.

The Closing Statement and the Post-Closing Statement will be prepared in U.S. Dollars. Assets and liabilities included in Closing Working Capital denominated in a currency other than U.S. Dollars shall be converted into U.S. Dollars using the exchange rate applicable to such other currency as published in The Wall Street Journal on the Closing Date.

 

4.

For the avoidance of doubt, Closing Working Capital shall exclude Closing Cash, Closing Indebtedness, and Transaction Costs.

 

5.

For the avoidance of doubt, Closing Working Capital shall be limited to trade working capital items; specifically accounts receivable, inventory, and accounts payable amounts. Other current assets and other current liabilities (including any tax assets or liabilities) shall be excluded from the computation of Closing Working Capital.

 

 

6.

The provisions of this Exhibit shall be interpreted to avoid double counting (whether positive or negative) of any item included in the Closing Statement and the Post-Closing Statement.

 

7.

For the purposes of calculating Closing Working Capital, no amount shall be included for changes in assets or liabilities as a result of purchase accounting adjustments.

 

8.

For the purposes of calculating Closing Working Capital, no amounts shall be included for any fraud related assets or liabilities with respect to Mr. Monal Parikh.

 

9.

For the purposes of calculating Closing Working Capital, (a) accounts receivable shall include invoiced amounts for all products shipped, regardless of shipping terms, (b) accounts receivable beyond customer terms shall be included in total accounts receivable to the extent they are collectable in a manner consistent with past practices, and (c) no amounts shall be eliminated to remove intercompany receivables and payables from Affiliates (including purchases and sales between and among the Company, Amtran, and Narayan Power Tech Private Limited).

 

10.

For the purposes of calculating Closing Working Capital, (a) inventory in the Quality Control (QC) Holding Area shall be included in inventory in a manner consistent with past practices, and (b) no elimination of intercompany profit in inventory shall be considered with respect to purchases from Affiliates that remain in inventory (including purchases by the Company from Amtran and Narayan Power Tech Private Limited).

 

11.

A physical inventory count shall be conducted as soon as reasonably practical after the Closing Date and both Buyer and Seller Representative shall be present at the inventory count along with count teams from the Company who regularly conduct the physical count procedures historically. The physical inventory count shall be conducted with proper inventory tag controls and both Buyer and Seller Representative shall agree with individual quantity counts on the date of the physical inventory with a detailed inventory compilation by SKU number being generated immediately upon completion of the physical count and provided to both parties prior to removing the inventory tags from individual inventory items counted. In addition, shipping and receiving records before and after the physical inventory count date shall be maintained and provided to both Buyer and Seller Representative in order to provide both parties the necessary information to analyze the completeness of the final inventory quantities recorded in the inventory compilation used to calculate Closing Working Capital.

 

Exhibit 10.2

 

 

 

 

 

 

SECURITIES PURCHASE AGREEMENT

dated as of October 28, 2024

by and among

NARAYAN POWERTECH PRIVATE LIMITED,

and

 

THE PERSONS LISTED IN EXHIBIT D,

 

and

 

MOLD-TECH SINGAPORE PTE. LTD.

and

 

 

STANDEX INTERNATIONAL CORPORATION

 

 

 

 

 

TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS AND DEFINITIONAL PROVISIONS		1
Section 1.1	Defined Terms	1
Section 1.2	Other Defined Terms	20
Section 1.3	Other Definitional Provisions	20
Section 1.4	Captions	21
ARTICLE II PURCHASE AND SALE		21
Section 2.1	Closing Purchase and Sale	21
Section 2.2	Closing	21
Section 2.3	Closing Purchase Price	22
Section 2.4	Payment at the Closing	22
Section 2.5	Closing Statement.	23
Section 2.6	Post-Closing Adjustment.	23
Section 2.7	Closing Deliverables	26
Section 2.8	Second Closing Purchase and Sale.	28
Section 2.9	Second Closing.	29
Section 2.10	Second Closing Consideration.	30
Section 2.11	Issuance or Payment at the Second Closing	30
Section 2.12	Second Closing Deliverables	30
Section 2.13	Post-Closing Deliverables	32
ARTICLE III REPRESENTATIONS AND WARRANTIES RELATED TO THE SELLING PARTIES		34
Section 3.1	Organization	34
Section 3.2	Authorization; Enforceability; Absence of Conflicts	34
Section 3.3	Litigation	35
Section 3.4	Accredited Investor	35
Section 3.5	Taxation	36
Section 3.6	No Other Representations	36
ARTICLE IV REPRESENTATIONS AND WARRANTIES RELATED TO THE COMPANY AND AMTRAN		36
Section 4.1	Organization; Power; Authorization.	36
Section 4.2	Required Consents	37
Section 4.3	Capitalization	38
Section 4.4	Subsidiary	38
Section 4.5	Assets.	38
Section 4.6	Real Property.	38
Section 4.7	Transactions with Affiliates	39
Section 4.8	Litigation	40
Section 4.9	Absence of Certain Changes	40
Section 4.10	Compliance with Law	43
Section 4.11	Permits	43

 

 

Section 4.12	Certain Business Practices	44
Section 4.13	Material Agreements	45
Section 4.14	Employee Matters	48
Section 4.15	Financial Information	51
Section 4.16	Environmental Matters	52
Section 4.17	Taxes	54
Section 4.18	Intellectual Property	55
Section 4.19	Privacy and Information Security	57
Section 4.20	No Undisclosed Liabilities	58
Section 4.21	Insurance Policies	58
Section 4.22	Bank Relations; Powers of Attorneys.	58
Section 4.23	Brokers	58
Section 4.24	Customers and Vendors; Warranties	59
Section 4.25	COVID-19	60
Section 4.26	Products	60
Section 4.27	Government Contracts	61
Section 4.28	No Other Representations	62
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER AND BUYER PARENT		62
Section 5.1	Organization; Power	62
Section 5.2	Ownership of Buyer	62
Section 5.3	Authorization; Enforceability; Absence of Conflicts; Required Consents.	63
Section 5.4	SEC Filings	64
Section 5.5	Litigation	64
Section 5.6	Accredited Investor	64
Section 5.7	Sufficiency of Funds	64
Section 5.8	Buyer Parent Common Stock	64
Section 5.9	Exempt from Registration	65
Section 5.10	Acquisition of Securities for Investment	65
Section 5.11	Brokers	65
ARTICLE VI COVENANTS		65
Section 6.1	Records and Access	65
Section 6.2	Public Announcement	66
Section 6.3	Non-Competition; Non-Solicitation; and Non-Disclosure	66
Section 6.4	Tax Matters.	68
Section 6.5	Further Assurances	72
Section 6.6	Retention of Books and Records	72
Section 6.7	Withholding Taxes	72
Section 6.8	Employee Matters.	72
Section 6.9	Indemnification of Managers, Directors and Officers of the Company and Amtran.	73
Section 6.10	Certain Waivers and Releases	74
Section 6.11	Obligations of Buyer Parent	74
Section 6.12	Issuance of Stock Consideration; Lock-Up Restrictions; Removal of Restrictions(s)	74

 

 

Section 6.13	Permitted Transfers	76
Section 6.14	Rule 144 Compliance	76
ARTICLE VII SURVIVAL; INDEMNIFICATION;  LIMITATIONS ON INDEMNIFICATION AND CLAIMS		77
Section 7.1	Survival	77
Section 7.2	Indemnification of Buyer Indemnitees	77
Section 7.3	Indemnification of Seller Indemnitees	78
Section 7.4	Conditions of Indemnification	79
Section 7.5	Payments by an Indemnifying Party	81
Section 7.6	Procedures for Direct Claims	81
Section 7.7	Certain Limitations on Indemnification for Third-Party Claims and Direct Claims	82
Section 7.8	Sole and Exclusive Remedy	84
Section 7.9	Disclaimer of Other Representations and Warranties	84
Section 7.10	No Multiple Recoveries	84
Section 7.11	No Subrogation	84
Section 7.12	Mitigation	85
Section 7.13	Indemnification Escrow Provisions	85
Section 7.14	Adjustment to Purchase Price	85
ARTICLE VIII GENERAL PROVISIONS		86
Section 8.1	Amendment and Modification	86
Section 8.2	Entire Agreement; Assignment	86
Section 8.3	Severability	86
Section 8.4	Expenses	86
Section 8.5	Waiver	86
Section 8.6	Counterparts	86
Section 8.7	Governing Law	87
Section 8.8	Dispute Resolution	87
Section 8.9	Notices and Addresses	88
Section 8.10	No Third-Party Beneficiaries	90
Section 8.11	Negotiated Transaction	90
Section 8.12	Brokers and Agents	90
Section 8.13	Time of the Essence	90
Section 8.14	Disclosure Schedules	91
Section 8.15	Specific Performance	91
Section 8.16	Seller Representative	92

 

EXHIBITS:

Exhibit A – Accounting Principles

Exhibit B – Illustrative Working Capital Calculations

Exhibit C – Closing Statement

Exhibit D – Selling Parties

 

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made as of October 28, 2024 (“Execution Date”), at Vadodara, Gujarat, India by and among Narayan Powertech Private Limited, a private limited company incorporated under the laws of India, having corporate identification number U65922GJ1995PTC026819 and its registered office at Padra-Baroda Road, Padra , Baroda, Gujarat, India – 391440 (the “Company”), the persons listed in Exhibit D (each a “Seller” and collectively, the “Selling Parties”), Mold-Tech Singapore Pte. Ltd., a company incorporated under the laws of the Republic of Singapore, having UIN 199304132N and its registered office at 159 Kampong Ampat, #01-01, KA Place, Singapore 368328 (“Buyer”), and Standex International Corporation, a Delaware corporation, listed on the New York Stock Exchange under the symbol SXI, having its registered office at 23 Keewyadin Drive, Suite 300, Salem, New Hampshire 03079 USA (“Buyer Parent”). The Company, the Selling Parties, Buyer, and Buyer Parent are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, the Selling Parties own beneficially and of record one hundred percent (100%) of the issued and outstanding Capital Stock of Company as of the Execution Date (the “Securities”);

 

WHEREAS, the Company owns sixty percent (60%) of the issued and outstanding Capital Stock of Amtran Magnetics Private Limited, a private limited company incorporated under the laws of India, having corporate identification number U31501GJ2013PTC077593 (“Amtran”);

 

WHEREAS, upon the terms and subject to the conditions contained in this Agreement, Selling Parties desire to sell, and Buyer desires to purchase the Securities; and

 

WHEREAS, as of the date hereof, Seller 1, Seller 2, the Company, the Buyer, and the Buyer Parent have executed a shareholders’ agreement governing their inter-se rights and obligations in relation to the Company effective from the Closing Date (“SHA” or “Shareholders’ Agreement”);

 

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, the Parties agree as follows:

 

ARTICLE I

DEFINITIONS AND DEFINITIONAL PROVISIONS

 

Section 1.1    Defined Terms. The following terms have the meanings assigned to them in this ‎Section 1.1.

 

“Accounting Principles” means the accounting principles set forth on Exhibit A, applied in a manner consistent with the policies, practices and procedures as are illustrated in Exhibit B.

 

“Acquired Business” means the businesses of the Company and Amtran.

 

 

“Adjustment Escrow” has the meaning specified in Section 2.4(a)(iv).

 

“Affiliate” means, as to any specified Person, any other Person that, directly or indirectly through one or more intermediaries or otherwise, controls, is controlled by or is under common control with the specified Person. As used in this definition, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person (whether through ownership of Capital Stock of that Person, by contract or otherwise), and the terms “controlled” and “controlling” have the meanings correlative to the foregoing. For the avoidance of doubt, the Company and Amtran will be Affiliates of Selling Parties only before the Closing and will be Affiliates of Buyer or Buyer Parent only after the Closing.

 

“Agreement” has the meaning specified in the preamble and means this Agreement, including the Disclosure Schedules and any schedules, documents, agreements and any exhibits attached hereto, referenced herein or delivered in accordance herewith.

 

“Amtran” has the meaning specified in the Recitals to this Agreement.

 

“Amtran Closing Cash” means the aggregate amount of cash and cash equivalent items of Amtran (net of bank overdrafts and negative cash balances in Amtran bank accounts), including, (a) cash on deposit, checking and other bank account balances, in each case, with a bank or other financial institution (including any checks, drafts, wires deposited or made for the accounts of such Person prior to such time but not yet reflected in the accounts of such Person as of such time (provided that credit for any checks, drafts or wire that are dishonored shall be excluded)), net of outstanding checks, drafts and outgoing wires and (b) marketable securities, certificates of deposits and other short term investments (in each case, to the extent convertible to cash within 30 days), net of any breakage costs, liquidation payments or early withdrawal fees or penalties that would be payable upon the liquidation at Closing of any such marketable securities, certificates of deposit and other short term investments. Notwithstanding anything to the contrary contained herein, “cash and cash equivalents” of Amtran in the context of this definition of “Amtran Closing Cash” shall exclude (1) Restricted Cash, and (2) amounts that are included in Closing Working Capital.

 

“Amtran Closing Working Capital” means: (i) the sum of the accounts receivable and inventory of Amtran (excluding Amtran Closing Cash, income Tax Assets, fraud related receivables, deferred Tax Assets, and other current assets) immediately before the Effective Time minus (ii) the accounts payable of Amtran (excluding deferred Tax Liabilities and amounts included in the calculation of Amtran Indebtedness and Transaction Costs, fraud related reserves, operating lease Liabilities, and other current Liabilities) immediately before the Effective Time, in each case, determined in accordance with the Accounting Principles applicable to Amtran and solely reflecting the categories of current assets and current Liabilities included in the calculation of Closing Working Capital for Amtran as set forth on Exhibit B.

 

“Amtran Financial Statements” has the meaning specified in Section 4.15(a).

 

 

“Amtran Indebtedness” means, without duplication, (i) any Liability of Amtran (A) for borrowed money, (B) arising out of any extension of credit to or for the account of Amtran (including reimbursement or payment obligations with respect to surety bonds, letters of credit, bankers’ acceptances and similar instruments) or for the deferred purchase price of property or other assets or services or arising under conditional sale or other title retention agreements, including earnouts, payments under non-compete agreements and seller notes, any purchase price adjustment, escrow, holdback or similar payments, whether contingent or not, in each case other than trade payables included in the definition of Amtran Closing Working Capital, (C) evidenced by notes, bonds, debentures or similar instruments, (D) in respect of leases of (or other agreements conveying the right to use) property or other assets which Indian Accounting Standards requires to be classified and accounted for as capital leases or (E) in respect of interest rate swap, cap or collar agreements or similar arrangements providing for the mitigation of Amtran’s interest rate risks either generally or under specific contingencies between Amtran and any other Person, (F) for accrued and unpaid Specified Income Taxes, (G) secured by a purchase money mortgage or other Lien, (H) for obligations of such Person with respect to unfunded or underfunded Employee Plans, and (I) any declared and unpaid dividends and other distributions owed to any Selling Party; and (ii) any Liability of others of the type described in the preceding clause (i) in respect of which Amtran has incurred, assumed or acquired a Liability by means of a guaranty.

 

“Amtran Target Working Capital” means Three Million Four Hundred Fifteen Thousand Dollars ($3,415,000.00).

 

“Anti-Corruption Laws” has the meaning specified in Section 4.12(a).

 

“Anti-Money Laundering Laws” has the meaning specified in Section 4.12(c).

 

“Applicable Law” means, with respect to any Person, any transnational, domestic or foreign (including India), federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated, enforced or applied by a Governmental Authority that is binding upon or applicable to such Person or its properties, as amended unless expressly specified otherwise.

 

“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in Singapore, Vadodara, India and Mumbai, India are authorized or required by Applicable Law to close.

 

“Buyer” has the meaning specified in the preamble to this Agreement.

 

“Buyer’s Black-Out Policies” has the meaning specified in Section 6.12(b).

 

“Buyer Directors” means the Persons who shall be identified by the Buyer for appointment as directors on the board of directors of the Company and/or Amtran on and with effect from the Closing Date, details of whom shall be communicated in writing by the Buyer to the Seller Representative and the Company, at least 3 (three) Business Days prior to Closing Date;

 

“Buyer Fundamental Representations” means the representations and warranties of Buyer and the Buyer Parent (as applicable) contained in Section 5.1, Section 5.3(a), Section 5.3(b), Section 5.6, Section 5.10 and Section 5.11.

 

 

“Buyer Indemnified Loss” has the meaning specified in Section 7.2.

 

“Buyer Indemnitees” means Buyer and its Affiliates (including, after giving effect to the Closing, the Company and its Affiliates), and their respective directors, officers and employees.

 

“Buyer Parent” has the meaning specified in the preamble to this Agreement.

 

“Call Option” has the meaning specified in the Shareholders’ Agreement.

 

“Call Securities” has the meaning specified in the Shareholders’ Agreement.

 

“Capital Stock” means, with respect to: (i) any company, body corporate, or corporation, any share, or any depositary receipt or other certificate representing any share, of an equity ownership interest in such company, body corporate, corporation; and (ii) any other Entity, any share, membership, partnership or other percentage interest, unit of participation or other equivalent (however designated) of an equity interest in that Entity.

 

“Cash Consideration” means (a) Two Hundred Fifty Three Million Nine Hundred Seventy Three Thousand Eight Hundred Eighty Dollars ($253,973,880.00), (b) plus (i) the Estimated Adjustment Amount (if it is a positive number) or minus (i) the Estimated Adjustment Amount (if it is a negative number), with such Estimated Adjustment Amount (whether a positive or a negative number) being pro-rated to those portions of the Securities being transferred by the Selling Parties at Closing.

 

“Claim” means, as asserted (i) against any specified Person, any claim, demand or Proceeding made or pending against the specified Person for Damages to any other Person, or (ii) by the specified Person, any claim, demand or Proceeding of the specified Person made or pending against any other Person for Damages to the specified Person.

 

“Claim Notice” has the meaning specified in Section 7.4(b).

 

“Closing” has the meaning specified in Section 2.2.

 

“Closing Adjustment Shortfall Amount” has the meaning specified in Section 2.6(i).

 

“Closing Adjustment Surplus Amount” has the meaning specified in Section 2.6(i).

 

“Closing Cash” means, without duplication, the aggregate amount of Company Closing Cash and the Company Portion of Amtran Closing Cash as of the Effective Time, for the avoidance of doubt excluding the amounts specified in the footnotes to the Closing Statement.

 

“Closing Date” has the meaning specified in Section 2.2.

 

“Closing Indebtedness” means, without duplication, the aggregate amount of Company Indebtedness and the Company Portion of Amtran Indebtedness as of the Effective Time.

 

 

“Closing Statement” has the meaning specified in Section 2.5(a).

 

“Closing Working Capital” means, without duplication, the aggregate of Company Closing Working Capital and the Company Portion of Amtran Closing Working Capital as of the Effective Time.

 

“Combined Tax” has the meaning specified in Section 6.4(i).

 

“Company” has the meaning specified in the preamble to this Agreement.

 

“Company Closing Cash” means the aggregate amount of cash and cash equivalent items of the Company (net of bank overdrafts and negative cash balances in Company bank accounts), including, (a) cash on deposit, checking and other bank account balances, in each case, with a bank or other financial institution (including any checks, drafts, wires deposited or made for the accounts of such Person prior to such time but not yet reflected in the accounts of such Person as of such time (provided that credit for any checks, drafts or wire that are dishonored shall be excluded)), net of outstanding checks, drafts and outgoing wires, and (b) marketable securities, certificates of deposits and other short term investments (in each case, to the extent convertible to cash within 30 days), net of any breakage costs, liquidation payments or early withdrawal fees or penalties that would be payable upon the liquidation at Closing of any such marketable securities, certificates of deposit and other short term investments. Notwithstanding anything to the contrary contained herein, “cash and cash equivalents” of the Company in the context of the definition of “Company Closing Cash” shall exclude (1) Restricted Cash, and (2) amounts that are included in Company Closing Working Capital.

 

“Company Closing Working Capital” means: (i) the sum of the accounts receivable and inventory of the Company (excluding Closing Cash, income Tax Assets, fraud related receivables, deferred Tax Assets, and other current assets) immediately before the Effective Time minus (ii) the accounts payable of the Company (excluding deferred Tax Liabilities, amounts included in the calculation of Company Indebtedness, Transaction Costs, fraud related reserves, operating lease Liabilities, and other current Liabilities) immediately before the Effective Time, in each case, determined in accordance with the Accounting Principles applicable to the Company and solely reflecting the categories of current assets and current Liabilities included in the calculation of Closing Working Capital for the Company as set forth on Exhibit B.

 

“Company Data” means all data contained in the systems, databases, files or other records of the Company and all other information and data compilations used by the Company, whether or not in electronic form, including Personal Data.

 

“Company Employees” means the employees of the Company and Amtran, as of the date of this Agreement.

 

“Company Financial Statements” has the meaning specified in Section 4.15(a).

 

 

“Company Indebtedness” means, without duplication, (i) any Liability of the Company (A) for borrowed money, (B) arising out of any extension of credit to or for the account of the Company (including reimbursement or payment obligations with respect to surety bonds, letters of credit, bankers’ acceptances and similar instruments) or for the deferred purchase price of property or other assets or services or arising under conditional sale or other title retention agreements, including earnouts, payments under non-compete agreements and seller notes, any purchase price adjustment, escrow, holdback or similar payments, whether contingent or not, in each case, other than trade payables included in the definition of Company Closing Working Capital, (C) evidenced by notes, bonds, debentures or similar instruments, (D) in respect of leases of (or other agreements conveying the right to use) property or other assets which Indian Accounting Standards requires to be classified and accounted for as capital leases, (E) in respect of interest rate swap, cap or collar agreements or similar arrangements providing for the mitigation of the Company’s interest rate risks either generally or under specific contingencies between the Company and any other Person, (F) for accrued and unpaid Specified Income Taxes, (G) secured by a purchase money mortgage or other Lien, (H) for obligations of such Person with respect to unfunded or underfunded Employee Plans, and (I) any declared and unpaid dividends and other distributions owed to any Selling Party; and (ii) any Liability of others of the type described in the preceding clause (i) in respect of which the Company has incurred, assumed or acquired a Liability by means of a guaranty.

 

“Company Intellectual Property” has the meaning specified in Section 4.18(c).

 

“Company Portion” shall mean 60% of Amtran Closing Cash, Amtran Closing Working Capital, Amtran Target Working Capital, Amtran Indebtedness at Closing, or Transaction Costs of Amtran, as applicable.

 

“Company Target Working Capital” means Twenty Four Million Seven Hundred Twelve Thousand Dollars ($24,712,000.00).

 

“Confidential Information” shall mean confidential and proprietary information that belongs to, or is known or possessed by, the Company or Amtran, including information relating to financial statements, clients, customers, potential clients or customers, employees, suppliers, equipment, designs, drawings, programs, strategies, analyses, profit margins, sales, methods of operation, plans, products, technologies, materials, trade secrets, strategies, prospects or other proprietary information. Notwithstanding the foregoing, the term “Confidential Information” shall not include (i) any information known by any Selling Party that now or hereafter is in the public domain by means other than disclosure by the Company, Amtran, any Selling Party or any Affiliate or representative thereof in violation of this Agreement or is lawfully acquired by any Selling Party or any Affiliate or representatives thereof after the Closing from sources which, to the Selling Parties’ knowledge are not under any contractual obligation concerning disclosure of such information.

 

“Consent” means any consent, release, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Authority or other Person, including any Permit, or, with respect to any equity interests, the waiver of any right of first refusal or similar Lien.

 

“Continuing Employees” means all of the then-current Company Employees (including such persons on disability or leave of absence, whether paid or unpaid).

 

 

“Continuing Selling Parties” means Seller 1, Seller 2, and/or any of their Permitted Affiliates who hold Securities in the Company after Closing.

 

“Contracts” means any contracts, commitments, purchase orders, mortgages, instruments, indentures, sales orders, licenses, leases and other agreements or arrangements, whether written or oral, to which the Company or Amtran is a party or by which the Company or Amtran or any of their respective assets are bound or subject.

 

“COVID-19” means the infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) and known as “COVID-19”.

 

“COVID-19 Pandemic” means the pandemic caused by COVID-19 which, as of the date hereof, has spread throughout the world and has resulted in Governmental Authorities implementing numerous measures to try to contain COVID-19, including travel bans and restrictions, quarantines, shelter in place orders and shutdowns.

 

“Customs Laws” has the meaning specified in Section 4.12(d).

 

“Damage” or “Damages” means any Liabilities, royalty payments, demands, claims, actions, causes of action, assessments, awards, losses, costs, damages, deficiencies, judgments, Taxes, fines or expenses, including interest, penalties, reasonable fees and expenses of attorneys and accountants and reasonable amounts paid in investigation, defense or settlement of any of the foregoing; provided, however, that “Damages” shall not include exemplary, punitive, consequential, incidental, special, multiple, or indirect damages, or loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement or any Transaction Document (collectively, “Excluded Damages”), except to the extent actually awarded to a Governmental Authority or other third-party. Notwithstanding the foregoing, Excluded Damages shall not include diminution in value of the Company or Amtran to the extent that the underlying Direct Claim (i) has a material and continuing impact on the profitability of Company or Amtran, as the case may be and on a year-over-year basis, subject to Buyer’s obligations to mitigate pursuant to Section 7.12 and pursuant to Applicable Laws, (ii) has resulted from a material breach of the representations and warranties made with respect to the May 31 P&Ls set forth in Section 4.15(a) or Section 4.15(b) (Financial Information), (iii) is unrelated to the matter disclosed on Section 7.2 of the Disclosure Schedules, (iv) is asserted under Section 7.2 no later than the date the Post-Closing Statement is due pursuant to Section 2.6(a), and (v) does not exceed in the aggregate for all such diminution in value Damages thirty percent (30%) of the Damages Cap.

 

“Damages Cap” means Twenty Five Million Three Hundred Ninety Seven Thousand Three Hundred Eighty Eight Dollars ($25,397,388.00).

 

“De Minimis Amount” means Eighty Eight Thousand Eight Hundred Ninety One Dollars ($88,891.00).

 

“Direct Claims” has the meaning specified in Section 7.6(a).

 

“Disclosure Schedules” means the schedules, dated as of the date hereof, delivered by Seller to Buyer in connection with this Agreement.

 

 

“Effective Time” has the meaning specified in Section 2.2.

 

“Employee Plan” means all employee benefit or compensation agreements, arrangements, plans, policies, practices or programs established, maintained, contributed to, or sponsored by Seller, the Company or any of their Subsidiaries, or to which Seller, the Company or any of their Subsidiaries has or could have any Liability, including, but not limited to, any pension, profit-sharing, bonus, incentive compensation, equity or equity-like compensation, deferred compensation, vacation, sick pay, stock purchase, stock option, phantom equity, unemployment, hospitalization or other medical, life or other insurance, long- or short-term disability, change of control, fringe benefit.

 

“Employment Agreement” means any material agreement to which the Company or Amtran is a party which relates to the direct or indirect employment or engagement, or arises from the past employment or engagement, of any natural person by the Company or Amtran, whether as an employee or a nonemployee director, including any material employee leasing or service agreement and any noncompetition agreement.

 

“Entity” means any corporation, partnership of any kind, limited liability company, unlimited liability company, business trust, unincorporated organization or association, mutual company, joint stock company, joint venture or any other entity or organization.

 

“Environment” has the meaning specified in Section 4.16(e)(i).

 

“Environmental Claims” has the meaning specified in ‎‎Section 4.16(c).

 

“Environmental Law” has the meaning specified in Section 4.16(e)(ii).

 

“Environmental Permits” has the meaning ‎‎specified in Section 4.16(b).

 

“Escrow Agent” means HDFC Bank Limited.

 

“Escrow Agreement” has the meaning specified in Section 2.4(a)(iv).

 

“Escrow Release Date” has the meaning specified in Section 7.13.

 

“Estimated Adjustment Amount” means the amount (which may be negative) equal to (i) the amount, if any, by which the Estimated Closing Working Capital exceeds the Target Working Capital Upper Amount, or minus (ii) the amount, if any, by which the Estimated Closing Working Capital is less than the Target Working Capital Lower Amount, plus (iii) Closing Cash, minus (iv) Closing Indebtedness, minus (v) Transaction Costs, plus (vi) the Excess Cash Adjustment (as defined below). Notwithstanding the foregoing, if the Company or Amtran is required by written request from Buyer to distribute or remove excess cash from Amtran prior to the Closing resulting in any of the Selling Parties being taxed at a rate higher than the capital gains Tax rate prescribed under the Laws of the Republic of India relating to Taxes on the amount of such excess cash, then the Parties agree the Cash Consideration will be adjusted upward to account for one-half of the amount of any Tax that would be due above such capital gains rate (any such adjustment, the “Excess Cash Adjustment”).

 

“Estimated Cash Consideration” has the meaning specified in Section 2.5(a).

 

 

“Estimated Closing Working Capital” means the amount (positive or negative) by which the Selling Parties’ estimate of the Closing Working Capital, as reflected on the Closing Statement, exceeds, or is less than, as the case may be, the Target Working Capital.

 

“Estimated Purchase Price” has the meaning specified in Section 2.5(a).

 

“Evaluation Period” has the meaning specified in Section 2.6(b).

 

“Excess Cash Adjustment” has the meaning specified in the definition of Estimated Adjustment Amount.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Excluded Damages” has the meaning specified in the definition of Damages.

 

“Export Control Laws” has the meaning specified in Section 4.12(b).

 

“FCPA” has the meaning specified in Section 4.12(a).

 

“FDI Laws” has the meaning specified in Section 3.2(e).

 

“Final Adjustment Amount” has the meaning specified in Section 2.6(i).

 

“Financial Information Date” has the meaning specified in Section 4.15(a).

 

“Financial Statements” has the meaning specified in Section 4.15(a).

 

“First Release Date” has the meaning specified in Section 7.13.

 

“Fraud” means with respect to a Party, an actual and intentional misrepresentation or omission of a material existing fact with respect to the making of any representation or warranty in Article III, Article IV, or Article V, made by, and to such Party’s knowledge, of its falsity. For the avoidance of doubt, Fraud shall not include any claim for equitable fraud, constructive fraud, promissory fraud, unfair dealings fraud, fraud by reckless or negligent misrepresentations or any tort based on negligence or recklessness, in each case, as applied by the arbitration panel pursuant to Section 8.8 of this Agreement, applying the Laws of the Republic of India.

 

“FTAs” has the meaning specified in Section 4.12(d).

 

“Government Bid” has the meaning specified in Section 4.27(a).

 

 

“Government Contract” means (i) any Contract, including an individual task order, delivery order, purchase order, basic ordering agreement, letter contract or blanket purchase agreement, between the Company or Amtran, on the one hand, and any Governmental Authority, on the other; (ii) any Contract, including a basic ordering agreement, pricing agreement, letter contract or other arrangement by which the Company or Amtran has agreed to provide goods or services through a prime contractor to a Governmental Authority, to a higher-tier subcontractor to a Governmental Authority, or otherwise where a Governmental Authority is the ultimate consumer of the services provided by the Company or Amtran; or (iii) any lower-tier subcontractor to the Company or Amtran with respect to any Contract of a type described in clauses (i) or (ii) above. For purposes of clarity, a task order, purchase order, delivery order, or release issued pursuant to a Government Contract shall be considered a part of the Government Contract to which it relates.

 

“Governmental Authority” means any instrumentality, subdivision, court, administrative agency, commission, official or other authority of any country or any state, municipality, locality or other government or political subdivision thereof, or any quasi-governmental or private body exercising any regulatory, taxing or other governmental or quasi-governmental authority.

 

“GST Refunds” means the amount of actual goods and services Tax refunds received by Company and Amtran within the Refund Period.

 

“Hazardous Substance” has the meaning specified in Section 4.16(e)(iii).

 

“Income Tax Return” means state and local Tax Returns relating to income Tax. By way of example and without limitation, Tax Returns primarily concerning property Taxes, sales and use Taxes, payroll Taxes, any indirect and goods and services tax under Appliable Law, and withholding Taxes are not Income Tax Returns.

 

“Income Tax Return Contest” has the meaning specified in Section 6.4(c)(ii).

 

“Indemnification Escrow” has the meaning specified in Section 2.4(a)(iv).

 

“Indemnified Party” has the meaning specified in Section 7.4(b).

 

“Indemnifying Party” has the meaning specified in Section 7.4(b).

 

“Indemnifying Seller(s)” means, Seller 1, Seller 2, and Seller 3.

 

“Independent Accounting Firm” or “Independent Accountant” means Ernst & Young and/or any of its Affiliates or associate companies authorised to conduct accounting business in India; provided, however, that if Ernst & Young declines to be engaged as such, another nationally-recognized firm of independent public accountants that Buyer and Seller Representative select by mutual agreement shall be engaged as the Independent Accounting Firm.

 

“Indian Accounting Standards” means Indian accounting standards and practices in India as in effect as of the date of this Agreement (or as of the date referenced in the particular context in which the term is used herein) and consistently applied.

 

 

“Intellectual Property” means any and all rights in, arising out of or associated with any of the following in any jurisdiction in the world: (i) inventions (whether patentable or unpatentable and whether or not reduced to practice) improvements thereto, patents and patent applications, including all reissues, divisions, continuations, continuations-in-part, provisionals, substitutes, renewals and extensions thereof, and other government issued indicia of invention ownership; (ii) works of authorship (whether copyrightable or uncopyrightable), all moral rights thereto, copyrights, and all copyright registrations and copyright applications and any renewals or extensions thereof; (iii) trademarks, service marks, brands, certification marks, trade dress, trade names, logos, slogans, social media accounts, domain names and other indicia of origin of use, whether registered or unregistered, and pending applications and renewals for any of the foregoing, together in each case with the goodwill connected with the use of or symbolized thereby; and (iv) trade secrets, know-how, proprietary and confidential information, including all proprietary rights in product specifications, compounds, processes, formulae, methods, compositions, drawings, product or industrial designs, business information, technical and marketing plans and proposals, ideas, concepts, inventions, research and development, information disclosed by business manuals and drawings, technology, technical information, data, research records, customer, distributor and supplier lists and similar data and information and all other confidential or proprietary technical or business information and materials and all rights therein.

 

“Knowledge Parties” means Chirag Shah and Sandip Shah.

 

“Latest Balance Sheet” has the meaning specified in Section 4.15(a).

 

“Law” or “Laws” means (i) any law, statute, treaty, convention, code, ordinance, order, direction, rule, regulation, judgment, decree, injunction, writ, edict, authorization or other requirement of any Governmental Authority in effect at such time or (ii) any obligation included in any Permit or resulting from binding arbitration, including any requirement under common law.

 

“Liabilities” means any indebtedness, liabilities, obligations, Taxes, penalties, fines, claims, demands, judgment, or cause of action, of any nature (whether accrued, absolute, contingent, direct, indirect, known, unknown, perfected, inchoate, unliquidated or otherwise, due or to become due).

 

“Lien” means, with respect to any property or other asset of any Person (or any revenues, income or profits of that Person therefrom), any mortgage, lien, security interest, pledge, attachment, levy, option, right of first refusal, other charge or encumbrance thereupon or in respect thereof of any kind or nature whatsoever, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, and whether due or become due and regardless of when or by whom asserted.

 

“Lock-Up Period” means any of the Six-Month Lock-Up Period, One-Year Lock-Up Period, Two-Year Lock-Up Period, or Three-Year Lock-Up Period.

 

 

“Material Adverse Effect” means an event, circumstance, development, change or effect that, individually or in the aggregate, (i) is reasonably likely to materially impair or delay the ability of a Selling Party to perform its or his obligations under this Agreement and to consummate the transactions contemplated hereby or (ii) has had or is reasonably likely to have a material adverse effect on the business, assets, Liabilities, condition (financial or otherwise) or results of operations of the Company and Amtran, taken as a whole; provided, however, that, in each case, no event, circumstance, development, change or effect resulting from any of the following shall be deemed to constitute, or shall be taken into account in determining whether there has been or would reasonably be expected to be, a Material Adverse Effect: (A) changes in global or national economic conditions, including changes in prevailing interest rates, credit markets, currency exchange rates, market conditions or the price of commodities or raw materials used by the Company or Amtran, (B) changes or trends in the industry in which the Company or Amtran or any of their customers operate or in which the services of the Company or Amtran are used, (C) changes in global or national political conditions, including the outbreak, continuation or escalation of war (whether or not declared), hostilities, military conflict or acts of terrorism, (D) earthquakes, hurricanes, tsunamis, typhoons, tornadoes, droughts, floods, cyclones, arctic frosts, mudslides, wildfires and other natural disasters, weather conditions and similar force majeure events in the United States or any other any location where the Company or Amtran has material operations or sales, (E) changes in Applicable Law including any proposed or announced changes to Applicable Law published by the relevant Government Authority in the public domain, or the interpretation, enforcement or implementation thereof or changes in Indian Accounting Standards, or the interpretation thereof, (F) any failure by the Company or Amtran to meet any internal or third party projections or forecasts or estimates of revenue, earnings or other performance measures or operating statistics for any period (provided, however, that this clause (F) shall not operate to exclude from the definition of “Material Adverse Effect” any set of facts or circumstances that cause or result in any such failure unless otherwise excluded hereunder), or (G) any effect arising out of any action permitted, required or requested by Buyer to be taken pursuant to this Agreement, or any effect of not taking any action that is prohibited to be taken under this Agreement or any effect of taking any action that is required to be taken under this Agreement; provided, however, that events, circumstances, developments, changes or effects set forth in clauses (A) through (G) above may be taken into account in determining whether there has been or is reasonably likely to have a Material Adverse Effect if and only to the extent such events, circumstances, developments, changes or effects have a materially disproportionate adverse effect on the Company and Amtran, taken as a whole, in relation to others in the industry, and are not excluded by another of clauses (A) through (G).

 

“Material Agreement” has the meaning specified in Section 4.13(a).

 

“Material Customer” or “Material Customers” have the meaning specified in Section 4.24(a).

 

“Material Vendor” or “Material Vendors” have the meaning specified in Section 4.24(c).

 

“May 31 P&Ls” has the meaning specified in Section 4.15(a).

 

“Minority Equity Interests” has the meaning specified in the Shareholders’ Agreement.

 

“Minority Shareholder Put Option” has the meaning specified in the Shareholders’ Agreement.

 

“Notice of Disagreement” has the meaning specified in Section 2.6(b).

 

“NYSE” has the meaning specified in Section 5.4.

 

 

“OFAC” has the meaning specified in Section 4.12(b).

 

“One-Year Lock-Up Period” has the meaning set forth in Section 6.12(b)(ii).

 

“Ordinary Course of Business” means the ordinary course of business of the Company and Amtran, consistent with past practices in all material respects.

 

“Organization Jurisdiction” means, as applied to (i) any corporation, the federal, state, provincial or other jurisdiction of incorporation, (ii) any limited liability company or limited partnership, the federal, state, provincial or other jurisdiction under whose Laws it is formed, organized and existing in that legal form, and (iii) any other Entity, the federal, state, provincial or other jurisdiction whose Laws govern that Entity’s internal affairs.

 

“Organizational Documents” means, with respect to any Entity at any time, in each case as amended, modified and supplemented at that time, (i) the articles or certificate of formation, incorporation, amalgamation or organization (or the equivalent organizational or constituent documents) of that Entity, (ii) the articles of association, bylaws, limited liability company agreement, limited partnership agreement or regulations (or the equivalent governing documents) of that Entity and (iii) each document setting forth the designation, amount and relative rights, limitations and preferences of any class or series of that Entity’s Capital Stock.

 

“Party” and “Parties” have the meanings specified in the preamble to this Agreement.

 

“Payoff Letters” has the meaning specified in Section 2.7(b)(xv).

 

“Permit” means any authorization, consent, approval, permit, franchise, certificate, certification, license, implementing order or exemption of, or registration or filing with, any Governmental Authority, including any certification or licensing of a natural person to engage in a profession or trade or a specific regulated activity and certifications of standards setting organizations.

 

“Permitted Affiliate” has the meaning specified in the Shareholders’ Agreement.

 

“Permitted Equity Liens” means: (i) transfer restrictions caused by or created under federal or state securities Laws or the Organizational Documents of the Company or Amtran; or (ii) Liens caused or created by Buyer upon or after the Closing.

 

“Permitted Liens” means: (i) Liens for Taxes that are not yet due or that are being contested in good faith by appropriate Proceedings for which adequate accruals or reserves have been established on the Latest Balance Sheet in accordance with Indian Accounting Standards, (ii) Liens incurred or deposits made in the Ordinary Course of Business in connection with workers’ or unemployment compensation and employment insurance related Liabilities and other Liens under social security laws or regulations, or similar foreign laws, (iii) Liens of carriers, warehousemen, mechanics, laborers, materialmen, customers and employees for amounts not yet due or that are being contested in good faith in appropriate Proceedings, (iv) vendors’ Liens in respect of trade payables incurred in the Ordinary Course of Business and that would not result in a Material Adverse Effect, (v) any interest or title of a lessor of any assets being leased pursuant to an equipment lease, (vi) Liens that do not materially (A) diminish the value of the affected assets or (B) interfere with the ordinary use of such assets, (vii) Liens caused or created by Buyer or arising under this Agreement, and (viii) with respect to real property, (A) restrictions imposed by Applicable Law relating to zoning and land use and (B) matters that would be shown on an accurate survey of real property.

 

 

“Permitted Transfer” has the meaning set forth in Section 6.13.

 

“Permitted Transferee” means with respect to any Person, (a) the spouse, children, or family trust of such Person, (b) if the Person is a corporation, partnership, limited liability company or other business entity, its direct or indirect shareholders, partners, members or other equityholders, and (c) any other Selling Party.

 

“Person” means any natural person, Entity, estate, trust, union or employee organization or Governmental Authority.

 

“Personal Data” in relation to a natural person, shall have the meaning ascribed to the term ‘personal information’ in the Information Technology (Reasonable Security Practices And Procedures And Sensitive Personal Data Or Information) Rules, 2011.

 

“Post-Closing Statement” has the meaning specified in Section 2.6(a).

 

“Pre-Closing Period” means any taxable period ending on or before the Closing Date and the portion of any Straddle Period ending on and including the Closing Date.

 

“Pre-Closing Taxes” means, without duplication, (i) any and all Taxes of or imposed on any Selling Party for any taxable period, including Specified Income Taxes and any Liabilities attributable to Specified Income Taxes, (ii) any and all Taxes of or imposed on the Company or Amtran for any and all Pre-Closing Periods (determined in accordance with Section 6.4(b) with respect to any Straddle Period), including Specified Income Taxes and any Liabilities attributable to Specified Income Taxes, (iii) any and all Taxes of or imposed on Buyer, the Company or Amtran or any of their Affiliates pursuant to any Law, which Taxes relate to an event or transaction occurring on or prior to the Closing Date and which Taxes were payable by the Company or Amtran, (iv) any and all Taxes imposed on the Company or Amtran in connection with the transactions contemplated by this Agreement (including any Transfer Taxes), (v) any and all Taxes imposed as the result of any inaccuracy in or breach of any of the representations or warranties contained in Section 4.17, (vi) any and all amounts required to be paid by the Company or Amtran pursuant to any Tax Sharing Agreement that the Company or Amtran, as the case may be, was a party to on or prior to the Closing Date, (vii) any Tax relating to the direct or indirect ownership of the Company before the Closing, the Company’s ownership, possession, operation or use of its assets before the Closing, or the Company’s business operations before the Closing, and (x) any nonresident withholding of income Taxes required to be made on behalf of any direct or indirect owner of the Company, Amtran, or any of their respective Subsidiaries; provided, however, that “Pre-Closing Taxes” shall not include Taxes that are not income Taxes to the extent such Taxes that are not income Taxes were included in the calculation of Closing Working Capital and resulted in a reduction of the Purchase Price.

 

 

“Proceeding” means any action, case, proceeding, claim, grievance, suit, audit or investigation, litigation, or other proceeding (including any administrative, criminal or arbitration or mediation proceedings) conducted by or pending before any Governmental Authority or any arbitrator.

 

“Products” has the meaning specified in Section 4.26(a).

 

“Purchase Price” means the Cash Consideration.

 

“Put Securities” has the meaning specified in the Shareholders’ Agreement.

 

“Real Property Lease” has the meaning specified in Section 1.01(a)(ix).

 

“Refund Notice” has the meaning specified in Section 6.4(d)(ii).

 

“Refund Period” means a period of 17 (seventeen) months and 15 (fifteen) days from the Execution Date.

 

“Release” has the meaning specified in Section 4.16(e)(iv).

 

“Remedial Action” has the meaning specified in Section 4.16(e)(v).

 

“Representatives” means, with respect to any Person, the directors, officers, managers, employees, Affiliates, accountants, advisors, attorneys, consultants or other agents of that Person, or any other representatives of that Person.

 

“Resigning Directors” means (a) with respect to the Company, Seller 3, Anand Shah, and Samvitt Shah; and (b) with respect to Amtran, Seller 3;

 

“Restated Articles” means the amended articles of association of the Company (in agreed form) which reflects the terms and conditions of the Shareholders’ Agreement, to be adopted by the Company on the Closing Date;

 

“Response Period” has the meaning specified in Section 7.6(a).

 

“Restricted Activities” has the meaning specified in Section 6.3(f).

 

“Restricted Cash” means all cash (including any security deposits) subject to any legal or contractual restriction on the ability to freely transfer or use such cash for any lawful purpose and including any Taxes (including any required withholdings or deductions in respect thereof incurred in the repatriation or distribution of such cash).

 

“Restricted Period” has the meaning specified in Section 6.3(a).

 

“Rule 144” means Rule 144 under the Securities Act or any successor rule thereto.

 

 

“Rule 144 Securities” means (a) the Stock Consideration owned by the Continuing Selling Parties or their Permitted Transferees, and (b) any shares of Buyer common stock issued or issuable with respect to any shares described in subsection (a) above by way of a stock dividend or stock split or in exchange for or upon conversion of such shares or otherwise in connection with a combination of shares, distribution, recapitalization, merger, consolidation, other reorganization or other similar event with respect to the common stock of Buyer (it being understood that, for purposes of this Agreement, a Person shall be deemed to be a holder of Rule 144 Securities whenever such Person has the right to then acquire or obtain from Buyer any Rule 144 Securities, whether or not such acquisition has actually been effected). As to any particular Rule 144 Securities, such securities shall cease to be Rule 144 Securities when (i) the SEC has declared a registration statement covering such securities effective and such securities have been disposed of pursuant to such effective registration statement, (ii) such securities are sold under circumstances in which all of the applicable conditions of Rule 144 under the Securities Act are met, (iii) such securities become eligible for sale pursuant to Rule 144 without volume or manner-of-sale restrictions and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144(c)(1), as set forth in a written opinion letter to such effect, addressed, delivered and reasonably acceptable to the applicable transfer agent and the holders of such securities, or (iv) such securities are otherwise transferred or resold.

 

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, and the rules and regulations promulgated thereunder.

 

“SEC” means the United States Securities and Exchange Commission.

 

“SEC Documents” has the meaning specified in Section 5.4.

 

“Second Closing” means: (a) the completion of the Share Swap in the manner contemplated in the Shareholders' Agreement, if the approval of the Reserve Bank of India pursuant to Section 2.9(a)(i) is received for the Share Swap, on or prior to the 1st anniversary of the Closing Date; or (b) the completion of any tranche of sale and purchase of the Put Securities or the Call Securities, as applicable, pursuant to exercise of the Minority Shareholder Put Option or the Call Option, as applicable, in the manner contemplated in the Shareholders' Agreement, at any time after the Share Swap Deadline Date.

 

“Second Closing Date” means any of the dates on which any Second Closing occurs in accordance with the terms of this Agreement and the Shareholders' Agreement.

 

“Second Release Date” has the meaning specified in Section 7.13.

 

“Second Sale Consideration” means the consideration to be paid by the Buyer or Buyer Parent or their Affiliates, as applicable, for the sale and purchase Put Securities or Call Securities determined in manner specified in the Shareholders’ Agreement.

 

“Securities” has the meaning specified in the Recitals to this Agreement.

 

“Securities Act” has the meaning specified in Section 5.3(d).

 

“Seller” has the meaning specified in the preamble to this Agreement.

 

 

“Seller Fundamental Representations” means the representations and warranties of the Selling Parties or Seller, as applicable, contained in Section 3.1, Section 3.2(a), Section 3.2(b), Section 4.1, Section 4.3, Section 4.4, Section 4.16, Section 4.17 and Section 4.23.

 

“Seller Indemnified Loss” has the meaning specified in Section 7.3.

 

“Seller Indemnitees” means Seller and its Affiliates and their respective directors, officers and employees.

 

“Seller Prepared Returns” has the meaning specified in Section 6.4(a).

 

“Seller Representative” means Mr. Chirag Shah, or such other Person as may be designated in his stead in accordance with the terms of this Agreement.

 

“Selling Parties” has the meaning specified in the Recitals to this Agreement.

 

“SIAC” has the meaning specified in Section 8.8(a).

 

“Six-Month Lock-Up Period” has the meaning set forth in Section 6.12(b)(i).

 

“SHA” or “Shareholders’ Agreement” has the meaning specified in the Recitals to this Agreement.

 

“Share Swap” has the meaning specified in the Shareholders’ Agreement.

 

“Share Swap Deadline Date” has the meaning specified in the Shareholders’ Agreement.

 

“Specific Indemnities Matter” has the meaning set forth in Section 7.7(a).

 

“Specific Indemnities Loss Amount” has the meaning specified in Section 7.7(a).

 

“Specific Principles” has the meaning specified in Exhibit A.

 

“Specified Income Tax” and “Specified Incomes Taxes” means (i) all Taxes based upon, measured by, or calculated with respect to (A) net income or profits (including any gross receipts, capital gains or minimum Tax but not including any sales, use, real or personal property, transfer or similar Taxes) or (B) multiple bases (including, but not limited to, corporate franchise or doing business) if one or more Taxes upon which such Tax may be based, measured by or calculated with respect to, is described in clause (i)(A) above; (ii) all state, local and foreign franchise Taxes imposed in lieu of Taxes described in clause (i); and (iii) any nonresident withholding of income Taxes required to be made on behalf of any direct or indirect owner of the Company, Amtran or any of their respective Subsidiaries.

 

“Sponsor” has the meaning specified in Section 4.18(d).

 

“Stock Consideration” means the number of shares of Buyer Parent’s common stock determined in the manner set out in the Shareholders’ Agreement, to be issued to the Continuing Selling Parties at the Second Closing.

 

 

“Straddle Period” means any taxable period beginning on or before and ending after the Closing Date.

 

“Subsidiary” of any specified Person at any time means any Entity of which (i) such Person or any other Subsidiary of such Person is a general partner, managing member or sole or controlling member or (ii) at least a majority of the Capital Stock having by their terms ordinary voting power to elect a majority of the board of directors, managers or others performing similar functions with respect to such Entity is, directly or indirectly, owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and any one or more of its Subsidiaries.

 

“Survival Period” has the meaning specified in Section 7.1(a).

 

“Systems” has the meaning specified in Section 4.18(g).

 

“Target GST Refunds” means the aggregate amount of Four Million Three Hundred Twenty Five Thousand Four Hundred Twenty Seven Dollars ($4,325,427.00), being the goods and services Tax refunds which are expected to be received by Company and Amtran within the Refund Period.

 

“Target Working Capital” means the Company Target Working Capital plus the Company Portion of the Amtran Target Working Capital.

 

“Target Working Capital Lower Amount” means Twenty Five Million Four Hundred Five Thousand Nine Hundred Ninety Three Dollars ($25,405,993.00).

 

“Target Working Capital Upper Amount” means Twenty Eight Million One Hundred Sixteen Thousand Seven Dollars ($28,116,007.00).

 

“Tax” or “Taxes” means all net or gross income, gross receipts, escheat, net proceeds, sales, use, ad valorem, value added, goods and services, harmonized sales, franchise, capital, capital gains, withholding, payroll, employer health, real property, personal property, social security, employment, unemployment, excise, property, deed, stamp, alternative, net worth or add-on minimum, environmental, license, severance, occupation, premium, windfall profits, custom duties, capital stock, profits, disability, transfer, registration, estimated, or other taxes, assessments, duties, levies or similar governmental charges in the nature of a tax, together with any interest, penalties, fines or additions to tax with respect thereto or with respect to such interest, penalties, fines or additions, imposed by any Governmental Authority.

 

“Tax Contest” has the meaning specified in Section 6.4(c)(i).

 

“Tax Returns” means the returns, reports, information returns, claims for refund and other forms or documents (including any amendments thereto and any related or supporting information) required to be filed with any Taxing Authority in connection with any Tax.

 

“Tax Sharing Agreement” means any Tax indemnity agreement, Tax sharing agreement, Tax allocation agreement or similar contract or arrangement, whether written or unwritten (including any such agreement, contract or arrangement included in any purchase or sale agreement, merger agreement, joint venture agreement or other document).

 

 

“Taxing Authority” means any Governmental Authority having or purporting to exercise jurisdiction with respect to any Tax.

 

“Third Release Date” has the meaning specified in Section 7.13.

 

“Third-Party Claim” means any Claim that is made, given or instituted by a third party that is not a Party or an Affiliate of a Party (including any Governmental Authority).

 

“Third-Party Provisions” has the meaning specified in Section 8.10.

 

“Three-Year Lock-Up Period” has the meaning set forth in Section 6.12(b)(iv).

 

“Tipping Basket” means an One Million Two Hundred Sixty Nine Thousand Eight Hundred Sixty Nine point Four Dollars ($1,269,869.40).

 

“Transaction Costs” means the aggregate amount of all fees, costs, expenses, charges and other payments of Selling Parties, Company and the Company Portion of any such payment of Amtran, in each case, solely to the extent incurred, committed to, reimbursable by or otherwise payable at or before the Closing by Selling Parties, the Company or Amtran in connection with the transactions contemplated by this Agreement, and to the extent the same remain unpaid as of the Closing, including (i) expenses of counsel to Selling Parties, the Company or Amtran and of any investment banker, broker, consultant, accountant or other Person who performed services or provided advice to Selling Parties, Company or Amtran in connection with the transactions contemplated by this Agreement prior to Closing and any success fees payable by such Persons which are contingent on the occurrence of the Closing, and (ii) any severance, change-in-control bonus, retention bonus, transaction bonus or other payment (contingent or otherwise) to be made by Selling Parties, Company or Amtran to any employee or independent contractor that may be triggered, either automatically or with the passage of time, in whole or in part by the consummation of the transactions contemplated by this Agreement (and the employer portion of any payroll, employment or similar Taxes associated with any of the foregoing payments), only to the extent that such amounts have not been paid by Selling Parties, Company or Amtran before the Effective Time. Notwithstanding the foregoing, and for the avoidance of doubt, Transaction Costs shall exclude (1) the Buyer’s portion of any Transfer Taxes under Section 6.4(e), (2) any costs, expenses, bonuses (including any stay or retention bonuses or similar bonuses or incentives offered or agreed to by or on behalf of Buyer before the date hereof), amounts or other payments (including any Taxes in connection therewith), in each case, arising from any arrangements put in place by, or on behalf of, Buyer or at the written request of Buyer, and (3) so as to avoid duplication, any costs, expenses and other amounts included in Closing Indebtedness or which reduce Closing Working Capital.

 

“Transaction Documents” means this Agreement, the Escrow Agreement, the SHA, and the other written ancillary agreements, documents, instruments and certificates executed under or in connection with this Agreement; provided, however, that for purposes of Section 8.16 such term shall not include the employment agreement executed by and between the Company and Seller 1 pursuant to Section 2.7(b)(ii) and the employment agreement by and between the Company and Seller 2 pursuant to Section 2.7(b)(iii).

 

 

“Transfer Taxes” means all sales, use, value added, goods and services, harmonized sales, transfer, documentary, stamp duty, registration and other similar Taxes arising from, based on or related to the transactions contemplated by this Agreement.

 

“Two-Year Lock-Up Period” has the meaning set forth in Section 6.12(b)(iii).

 

Section 1.2    Other Defined Terms. Words and terms used in this Agreement that other Sections of this Agreement define are used in this Agreement as those other Sections define them.

 

Section 1.3    Other Definitional Provisions.

 

(a)    Except as this Agreement otherwise specifies, all references herein to any Law defined or referred to herein, are references to that Law or any successor Law, as the same may have been amended or supplemented from time to time through the date hereof, and any rules or regulations promulgated thereunder.

 

(b)    The words “herein,” “hereof” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any provision of this Agreement, and the words “Article,” “Section,” “Recitals,” “Exhibit” and “Schedule” refer to Articles and Sections of, the Recitals to, and Exhibits and Schedules to, this Agreement unless it otherwise specifies.

 

(c)    Whenever the context so requires, the singular number includes the plural and vice versa, and a reference to one gender includes the other gender and the neuter.

 

(d)    As used in this Agreement and unless the context otherwise requires, the word “including” (and, with correlative meaning, the word “include”) means including, without limiting the generality of any description preceding that word, the word “or” shall be disjunctive but not exclusive and the words “shall” and “will” are used interchangeably and have the same meaning.

 

(e)    The phrase “to the knowledge of Seller,” or any similar phrase means such facts and other information that are actually known to the Knowledge Parties, and such knowledge that would have obtained by the Knowledge Parties after reasonable inquiry of the Persons directly reporting to such Knowledge Parties with responsibility and specialized knowledge of the subject matter in question.

 

(f)    As used in this Agreement, all references to “dollars” or “$” mean United States dollars, the lawful currency of United States, and “INR” or “₹” means Indian Rupees, the lawful currency of Republic of India. For the purposes of FDI Laws and any actions under this Agreement in connection therewith, wherever dollars or $ is mentioned under this Agreement or to the extent amounts are required to be calculated in accordance with this Agreement in INR and not in dollars, to the extent applicable, the relevant INR amount shall be calculated based on such exchange rate as is actually used at the time of disbursement of the Estimated Cash Consideration by the Escrow Agent to the Selling Parties on or about the Effective Time, in accordance with the Escrow Agreement, which exchange rate shall be notified by the Seller Representative to the Buyer within 1 (one) Business Day of the Effective Time. For the avoidance of doubt, it is clarified that any conversion of United States dollars into Indian Rupees or of Indian Rupees into United States dollars for the purpose of ARTICLE II shall be in accordance with the principles set forth in Exhibit A to this Agreement.

 

 

(g)    Capitalized terms used, but not defined, in this Agreement, shall have the meaning ascribed to them in the Shareholders' Agreement.

 

Section 1.4    Captions. This Agreement includes captions to Articles, Sections and subsections of this Agreement and the Schedules hereto for convenience of reference only, and these captions do not constitute a part of this Agreement for any other purpose or in any way affect the meaning or construction of any provision of this Agreement.

 

ARTICLE II

PURCHASE AND SALE

 

Section 2.1    Closing Purchase and Sale. At the Closing, and on the terms and subject to the conditions of this Agreement, Buyer shall purchase and acquire from the Selling Parties, and each Seller shall sell, assign, transfer and convey to Buyer, all of such Seller’s rights, title and interest in and to such number of Securities listed against such Seller’s name in column A in Exhibit D, in aggregate representing ninety point one zero percent (90.10%)of the Capital Stack of the Company, free and clear of all Liens other than Permitted Equity Liens, for the consideration specified in Section 2.3.

 

Section 2.2    Closing. The closing of the transactions contemplated in Section 2.1 (the “Closing”) shall take place at the registered office of the Company, or remotely by the exchange of documents and signatures (or their electronic counterparts), of documents to be delivered at the Closing (the “Closing Date”). The Closing shall be deemed to be effective as of 11:59 pm Houston, Texas time on the Closing Date (the “Effective Time”) for purposes of this Agreement.

 

The Buyer acknowledges and agrees that the Selling Parties have, prior to the Closing Date and to the satisfaction of the Buyer, completed and delivered the actions and deliverables as set out below:

 

(a)    Seller 3 has provided all necessary information requested by the Buyer for the purpose of Buyer’s filing of Form 15CA and/or Form 15CB in accordance with the applicable provisions of the Income-tax Act, 1961, including Seller 3’s Permanent Account Number and a computation, in such form acceptable to the Buyer, of capital gains being earned by Seller 3 on transfer of the Securities held by him to the Buyer;

 

(b)    The Selling Parties have delivered to the Buyer a valuation report determining the fair market value of the Securities of the Company prepared and issued by qualified persons in accordance with the Foreign Exchange Management Act 1999 and rules and regulations framed thereunder;

 

(c)    The Selling Parties have delivered to the Buyer a valuation report determining the fair market value of the Securities of the Company prepared and issued by qualified persons in accordance with Section 50CA and the Section 56(2)(x) of the Income-tax Act, 1961 read with Rule 11UA of the Income-tax Rules, 1962;

 

(d)    The Selling Parties have delivered to the Buyer a draft valuation report, in a form acceptable to the Buyer, determining the fair market value of Capital Stock of Amtran prepared and issued by qualified persons in accordance with Section 9 of the Income-tax Act, 1961 read with Rule 11UB of the Income-tax Rules, 1962;

 

 

(e)    Each Seller has delivered to the Buyer a certificate from a qualified chartered accountant, certifying as of the Closing Date, that there are no circumstances whatsoever that would render the sale and transfer of any of the Securities by such Seller to the Buyer, as contemplated by this Agreement, void or voidable, under the provisions of Section 281 of the Income-tax Act, 1961 and Section 81 of the Central Goods and Services Tax Act, 2017, as applicable;

 

(f)    Each Seller has delivered to the Buyer a draft Form FC-TRS with all fields and information filled-in and together with attachments thereto (in draft form, where final versions are not available prior to the Closing Date), in each case, reviewed and pre-approved by such Seller’s Authorized Dealer bank; and

 

(g)    Each Seller has delivered to the Buyer the drafts, as pre-approved by such Seller’s Authorized Dealer bank, of (y) consent letter, and (z) declarations to be executed and delivered by Buyer, for attachment to the Form FC-TRS to be filed by such Seller.

 

Section 2.3    Closing Purchase Price. The purchase price for the acquisition of the Securities representing ninety point one percent (90.10%) of the Company at Closing in accordance with this Agreement shall equal the Cash Consideration, subject to adjustment set forth in Section 2.6, payable in accordance with Section 2.4.

 

Section 2.4    Payment at the Closing.

 

(a)    At the Closing, Buyer shall deliver, disburse, or issue, without duplication, the following consideration:

 

(i)    To the Selling Parties, the Estimated Cash Consideration as set forth in the Closing Statement delivered pursuant to Section 2.5 below (minus the amounts set forth in (iv) and minus any amounts withheld under Section 6.7) which shall be paid by wire transfer of dollars in immediately available funds to such account or accounts as have been designated in writing by Selling Parties to Buyer.

 

(ii)    To the applicable Persons and account(s) designated in the Closing Statement (on behalf of the Company and Amtran, as applicable), in accordance with the applicable Payoff Letters, the applicable amounts of Closing Indebtedness existing as of the Closing Date (to the extent not paid by or on behalf of the Company or Amtran before the Closing) in order to discharge the amounts payable thereunder.

 

(iii)    To the applicable Persons and account(s) designated in the Closing Statement (on behalf of the Company or Amtran, as applicable), the applicable amounts of Transaction Costs existing on the Closing Date (to the extent not paid by the Company or Amtran before the Closing) in order to discharge the amounts payable thereunder.

 

 

(iv)    To the Escrow Agent, pursuant to the terms and conditions of that certain Escrow Agreement, executed and delivered by the Escrow Agent, Buyer and Seller Representative, as of the Execution Date (the “Escrow Agreement”), (i) Three Hundred Thirty Eight Thousand Seven Hundred Fifty Two Dollars ($338,752.00) to be held by the Escrow Agent, in trust, pursuant to the terms and conditions of the Escrow Agreement as the sole and exclusive source of recovery for adjustments, if any, to the Purchase Price based on the Final Adjustment Amount (such amount held pursuant to clause (i), the “Adjustment Escrow”), and (ii) Twenty Five Million Three Hundred Ninety Seven Thousand Three Hundred Eighty Eight Dollars ($25,397,388.00) to be held by the Escrow Agent, in trust, pursuant to the terms and conditions of the Escrow Agreement for security against the indemnification obligations of Selling Parties under this Agreement (such amount held pursuant to clause (ii), the “Indemnification Escrow”).

 

(b)    The Selling Parties shall be deemed to have contributed to the escrows established under the Escrow Agreement, that portion of the Cash Consideration that would otherwise have been payable to the Selling Parties, as set forth on the Closing Statement and Section 2.4(a)(i) above.

 

Section 2.5    Closing Statement.

 

(a)    Seller Representative has, prior to the Closing, delivered to Buyer the statement attached hereto as Exhibit C (the “Closing Statement”) setting forth (i) the Cash Consideration, plus or minus (ii) Selling Parties’ calculation and estimate of the Estimated Adjustment Amount (the “Estimated Cash Consideration” or “Estimated Purchase Price”). The Estimated Adjustment Amount shall be calculated in accordance with the Accounting Principles and in a manner consistent with the applicable definitions contained in this Agreement.

 

(b)    Selling Parties have, prior to the Closing, provided Buyer and its Representatives with reasonable access to the books and records of the Company and Amtran and to senior management personnel of the Company and Amtran and with all supporting documentation requested by Buyer, in each case, in connection with Buyer’s review of the Closing Statement, including (i) Payoff Letters with respect to the Closing Indebtedness, dated within a reasonable time before the Closing Date, which set forth the aggregate amounts arising under or owing or payable thereunder and in connection therewith on the Closing Date, (ii) a summary of Transaction Costs in form and substance reasonably satisfactory to Buyer, and (iii) wire transfer amounts and details for holders of Closing Indebtedness and payees of the Transaction Costs to be paid by Buyer pursuant to Section 2.4(a)(ii) and Section 2.4(a)(iii). Buyer shall have the opportunity to comment on and request reasonable changes to the Closing Statement, and Selling Parties have considered in good faith any such comments and changes, but for the avoidance of doubt, no such comments or requested changes shall prejudice or waive Buyer’s rights under Section 2.6.

 

Section 2.6    Post-Closing Adjustment.

 

(a)    Within 90 calendar days after the Closing Date, Buyer shall deliver to Seller Representative a statement (the “Post-Closing Statement”), delivered in the same format as, and prepared using the same Accounting Principles that were used in the preparation of the Closing Statement and setting forth the Buyer’s calculation of (i) Closing Indebtedness, Transaction Costs, Closing Working Capital, Closing Cash, and the Excess Cash Adjustment (if any), and (ii) the Purchase Price which has been calculated using the amounts set forth in the preceding clause (i). Selling Parties shall offer any assistance that Buyer and its representatives may reasonably request in connection with the preparation of the Post-Closing Statement.

 

 

(b)    During the 45-day period following Seller Representative’s receipt of the Post-Closing Statement (and thereafter, in the event of any unresolved differences described in Section 2.6(c)), Buyer shall provide Seller Representative with access, during normal business hours and upon reasonable prior notice, to the books and records of Buyer and to senior management of Buyer in connection with Seller Representative’s review of the Post-Closing Statement. On or prior to the 45^th day following Seller Representative’s receipt of the Post-Closing Statement (the “Evaluation Period”), Seller Representative may deliver to Buyer a written notice of its disagreement with respect to the Post-Closing Statement (a “Notice of Disagreement”) describing in reasonable detail any disputed item set forth in the Post-Closing Statement. If Seller Representative does not provide a Notice of Disagreement during the Evaluation Period, then Selling Parties shall be deemed to have accepted the calculations and the amounts set forth in the Post-Closing Statement, which shall then be final and binding for all purposes hereunder. If Seller Representative provides a Notice of Disagreement during the Evaluation Period, then only those matters that are specified in such Notice of Disagreement shall be deemed to be in dispute, and all other matters shall be final and binding for all purposes hereunder.

 

(c)    During the ten (10) Business Day period following the earlier of (i) delivery of a Notice of Disagreement by Seller Representative to Buyer and (ii) the end of the Evaluation Period, the Parties in good faith shall seek to resolve in writing any differences that they may have with respect to the matters specified therein. Any disputed items resolved in writing between Seller Representative and Buyer within such ten (10) Business Day period shall be final and binding with respect to such items, and if Seller Representative and Buyer agree in writing on the resolution of each disputed item specified by Seller Representative in the Notice of Disagreement, then the amount so determined shall be final and binding on the Parties for all purposes hereunder. If Seller Representative and Buyer have not resolved all such differences by the end of such ten (10) Business Day period, then Seller Representative and Buyer shall within twenty (20) Business Days thereafter submit, in writing, to the Independent Accounting Firm, their briefs detailing their views as to the correct nature and amount of each item remaining in dispute, and the Independent Accounting Firm shall make a written determination as to each such disputed item, which determination shall be final and binding on the Parties for all purposes hereunder. The Independent Accounting Firm shall be authorized to opine upon and resolve only those items remaining in dispute between the Parties in accordance with the provisions of this Section 2.6, and such items shall be resolved within the range of the difference between Buyer’s position with respect thereto and Selling Parties’ position with respect thereto. Seller Representative and Buyer shall use their commercially reasonable efforts to cause the Independent Accounting Firm to render a written decision resolving the matters submitted to it within twenty (20) Business Days following the submission thereof. The Post-Closing Statement shall be modified, if necessary, to reflect such determination of the Independent Accounting Firm. The fees and expenses of the Independent Accounting Firm shall be borne one-half by Buyer and one-half by Selling Parties. The fees and disbursements of each Party and the representatives of each Party incurred in connection with its preparation or review of the Post-Closing Statement and preparation or review of any Notice of Disagreement, as applicable, shall be borne by such Party.

 

(d)    If the Closing Working Capital, as finally determined pursuant to Section 2.6, is less than the Target Working Capital Lower Amount, then Buyer shall be paid in accordance with Section 2.6(k) the amount that such Closing Working Capital is less than the Target Working Capital Lower Amount. If the Closing Working Capital, as finally determined pursuant to Section 2.6, is greater than the Target Working Capital Upper Amount, then the Selling Parties shall be entitled to receive in accordance with Section 2.6(j) the amount that such Closing Working Capital is greater than the Target Working Capital Upper Amount.

 

 

(e)    If the Closing Indebtedness, as finally determined pursuant to Section 2.6, is less than Closing Indebtedness reflected in the Estimated Cash Consideration, as set forth in the Closing Statement, then Selling Partes shall be entitled to receive the amount of such deficit in accordance with Section 2.6(k). If the Closing Indebtedness, as finally determined pursuant to Section 2.6, is greater than Closing Indebtedness reflected in such Estimated Cash Consideration, then Buyer shall be paid the amount of such excess in accordance with Section 2.6(k).

 

(f)    If Transaction Costs, as finally determined pursuant to Section 2.6, are less than Transaction Costs reflected in the Estimated Cash Consideration, as set forth in the Closing Statement, then Selling Parties shall be entitled to receive the amount of such deficit in accordance with Section 2.6(j). If the Transaction Costs, as finally determined pursuant to Section 2.6, are greater than Transaction Costs reflected in such Estimated Cash Consideration, then Buyer shall be paid the amount of such excess in accordance with Section 2.6(k).

 

(g)    If Closing Cash, as finally determined pursuant to Section 2.6, is greater than Closing Cash reflected in the Estimated Cash Consideration, as set forth in the Closing Statement, then Selling Parties shall be entitled to receive the amount of such excess in accordance with Section 2.6(j). If Closing Cash, as finally determined pursuant to Section 2.6, is less than Closing Cash reflected in such Estimated Cash Consideration, then Buyer shall be paid the amount of such deficit in accordance with Section 2.6(k).

 

(h)    If the Excess Cash Adjustment, as finally determined pursuant to Section 2.6, is greater than the Excess Cash Adjustment reflected in the Estimated Cash Consideration, as set forth in the Closing Statement, then Selling Parties shall be entitled to receive the amount of such excess in accordance with Section 2.6(j). If the Excess Cash Adjustment, as finally determined pursuant to Section 2.6, is less than such Excess Cash Adjustment reflected in the Estimated Purchase Price, then Buyer shall be paid the amount of such deficit in accordance with Section 2.6(k).

 

(i)    Without duplication, all amounts owed pursuant to Section 2.6(d)-Section 2.6(h) shall be aggregated, and the net amount (if any) owed by Buyer to Selling Parties, on the one hand (any such amount, the “Closing Adjustment Surplus Amount”), or by Selling Parties to Buyer, on the other hand (any such amount, the “Closing Adjustment Shortfall Amount”), is referred to as the “Final Adjustment Amount”.

 

(j)    In the event the Final Adjustment Amount constitutes a Closing Adjustment Surplus Amount, then (x) Buyer shall pay to Selling Parties an amount in cash equal to the Closing Adjustment Surplus Amount and (y) Buyer and Selling Parties shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver to Selling Parties the amount of the Adjustment Escrow.

 

(k)    In the event the Final Adjustment Amount constitutes a Closing Adjustment Shortfall Amount, then (x) Buyer and Selling Parties shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver to Buyer from the Adjustment Escrow an amount in cash equal to the Closing Adjustment Shortfall Amount (and to deliver to Selling Parties from the Adjustment Escrow, if any, the remaining amount of the Adjustment Escrow) and (y) to the extent the Closing Adjustment Shortfall Amount exceeds the amount of the Adjustment Escrow, Buyer and Seller shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver to Buyer from the Indemnification Escrow (to the extent funds are available in the Indemnification Escrow) any remaining balance of the Closing Adjustment Shortfall to Buyer.

 

 

(l)    Payments in respect of Section 2.6(j) or Section 2.6(k) shall be made within three (3) Business Days of final determination pursuant to Section 2.6 by wire transfer of dollars in immediately available funds to such account or accounts as may be designated in writing by Seller Representative or Buyer at least two (2) Business Days prior to such payment date. Any payment in respect of Section 2.6(j) or Section 2.6(k) shall be deemed to be an adjustment to the Purchase Price for all Tax purposes.

 

(m)    If the aggregate of all amounts owed by Buyer to Selling Parties pursuant to Section 2.6(d)-Section 2.6(h) are equal to aggregate of all amounts owed by Selling Parties to Buyer pursuant to Section 2.6(d)-Section 2.6(h), then no amounts shall be payable by Buyer or Selling Parties to the other Party as the Final Adjustment Amount, and the Estimated Purchase Price shall constitute the Purchase Price, and shall be subject to no further adjustments. In such event, the Buyer and Seller Representative shall deliver joint written instructions to the Escrow Agent instructing the Escrow Agent to deliver to Selling Parties the amount of the Adjustment Escrow in cash in full, within three (3) Business Days of final determination pursuant to Section 2.6 by wire transfer of dollars in immediately available funds to such account or accounts as may be designated in writing by the Seller Representative.

 

(n)    Payments from the Adjustment Escrow to the Buyer or the Selling Parties in respect of any difference between the Target GST Refund and the actual GST Refund received by the Company and Amtran shall be made in accordance with Section 6.4(d).

 

Section 2.7    Closing Deliverables.

 

(a)    At the Closing, Buyer will make the payment and undertake the actions specified in Section 2.4 and will deliver, or cause to be delivered, to the Selling Parties, as applicable:

 

(i)    the Escrow Agreement, duly executed by Buyer;

 

(ii)    the (x) consent letter, (y) declarations duly executed by Buyer, and (z) any other documents to be provided by the Buyer, for attachment to the Form FC-TRS to be filed by each Seller;

 

(iii)    the six-point Know Your Customer information, which shall be communicated by the Buyer’s remitting bank to each Seller’s Authorized Dealer bank via SWIFT message;

 

(iv)    the Shareholders’ Agreement, duly executed by Buyer and Buyer Parent; and

 

(v)    such other documents and instruments as required by any other provision of this Agreement or as required to consummate the transactions contemplated hereby.

 

 

(b)     At the Closing, Seller Representative will deliver, or cause to be delivered, to Buyer:

 

(i)    the Escrow Agreement, duly executed by Selling Parties;

 

(ii)    an employment agreement by and between the Company and Seller 1, in the form and substance acceptable to Buyer, duly executed by Seller 1 and Company;

 

(iii)    an employment agreement by and between the Company and Seller 2, in the form and substance acceptable to Buyer, duly executed by Seller 2 and Company;

 

(iv)    the Shareholders’ Agreement, duly executed by Seller 1 and Seller 2;

 

(v)    copies of delivery instructions duly executed by each Seller and issued to such Seller’s depository participant with respect to the transfer of ninety point one zero percent (90.10%) of the Securities of the Company to Buyer, containing proof of payment of applicable stamp duty in connection therewith;

 

(vi)    copies of duly executed resolutions passed by the board of directors of the Company approving (v) the transfer of ninety point one zero percent (90.10%) of the Securities of the Company from the Selling Parties to Buyer and authorizing such transfer to be recorded in the registers of the Company, (w) the appointment of the Buyer Directors as additional directors of the Company, (x) the resignation of the Resigning Directors as directors of the Company, (y) the adoption of the Restated Articles, and (z) convening of an extraordinary general meeting of the Company at shorter notice;

 

(vii)    copies of duly executed resolutions passed at a validly convened extra ordinary general meeting of the shareholders of the Company at shorter notice, approving (y) the appointment of the Buyer Directors as directors, and (z) adoption of the Restated Articles;

 

(viii)    copies of the updated (x) register of members of the Company showing Buyer as the legal and beneficial owner of ninety point one zero percent (90.10%)of the Securities of the Company, (y) register of transfer of shares of the Company recording the transfer of ninety point one zero percent (90.10%)of the Securities of the Company from the Selling Parties to Buyer, to the extent required under Applicable Law, and (z) Register of Directors of the Company recording the resignation of the Resigning Directors and appointment of the Buyer Directors as directors of the Company;

 

(ix)    copies of duly executed resolutions passed by the board of directors of Amtran approving (x) the appointment of the Buyer Directors as directors of Amtran, (y) the resignation of the Resigning Directors as directors of Amtran, and (z) convening of an extraordinary general meeting of Amtran at shorter notice;

 

(x)    copies of duly executed resolutions passed at a validly convened extra ordinary general meeting of the shareholders of Amtran at shorter notice, approving the appointment of the Buyer Directors as directors of Amtran;

 

 

(xi)    copies of the updated Register of Directors of Amtran recording the resignation of the Resigning Directors and appointment of the Buyer Directors;

 

(xii)    a certificate duly executed by an officer of the Company, dated as of the Closing, attaching and certifying on behalf of the Company (A) the Organizational Documents of the Company and (B) the resolutions of the board of directors of the Company authorizing the execution, delivery and performance by the Company of the Transaction Documents to which it is a party and the transactions contemplated hereby and thereby, in a form acceptable to Buyer and Seller Representative;

 

(xiii)    resignation letters from the Resigning Directors;

 

(xiv)    all corporate minute books, stock ledgers and stock records (or equivalent) of the Company;

 

(xv)    customary payoff letters mutually agreed between the Buyer and the Seller Representative in respect of, and release documentation necessary to release all Liens (other than Permitted Liens) securing, in each case, all indebtedness to be paid off at Closing, duly executed by the applicable agent or lender set forth on Section 2.7(b)(xv) of the Disclosure Schedules and in form and substance satisfactory to Buyer (collectively, the “Payoff Letters”), which (x) evidence all obligations in respect of such indebtedness (including principal, interest, fees, expenses and other amounts payable in respect thereof), (y) provide instructions for the payment of such amount to the applicable agent or lender, and (z) provide that, upon receipt of such amount by the applicable agent or lender, all obligations in respect of such indebtedness shall be paid in full, all commitments related thereto shall be terminated and all guarantees in respect of, and all Liens (other than Permitted Liens) securing, in each case, such indebtedness shall be automatically terminated and released;

 

(xvi)    evidence in form and substance satisfactory to Buyer that all Transaction Costs due and payable on or before the Closing Date have been paid in full such as invoices from professional advisors, along with confirmation from them that payments have been made to them in full and that the Company and Amtran do not have any liability to them in respect of any Transaction Costs;

 

(xvii)    all third-party consents and approvals listed on Section 2.7(b)(xvii) of the Disclosure Schedules; and

 

(xviii)    such other documents and instruments as required by any other provision of this Agreement or as required to consummate the transactions contemplated hereby.

 

Section 2.8    Second Closing Purchase and Sale.At Second Closing, on the terms and subject to the conditions of this Agreement and the Shareholders’ Agreement, Buyer shall purchase and acquire from the Continuing Selling Parties, and each Continuing Selling Party shall sell, assign, transfer and convey to Buyer, all of such Continuing Selling Party’s rights, title and interest in all Minority Equity Interests, or Put Securities or Call Securities, as applicable, held by such Seller, free and clear of all Liens other than Permitted Equity Liens, for the consideration specified in Section 2.10.

 

 

Section 2.9    Second Closing.

 

(a)    Subject to completion of the actions set out below, each Second Closing shall take place at the registered office of the Company, or remotely by the exchange of documents and signatures (or their electronic counterparts), of the documents to be delivered at the Second Closing on the Second Closing Date, (provided that the Buyer and the Buyer Parent shall cause the Company to undertake the actions of the Company listed below):

 

(i)    Continuing Selling Parties shall have requested for approval from the Reserve Bank of India, in accordance with the Foreign Exchange Management (Overseas Investment) Rules, 2022 and regulations framed thereunder, for the Share Swap;

 

(ii)    The Company shall have obtained a valuation report determining the fair market value of the Securities of the Company prepared and issued by qualified persons in accordance with the Foreign Exchange Management Act, 2000 and rules and regulations framed thereunder;

 

(iii)    The Company shall have obtained a valuation report determining the fair market value of the Securities of the Company prepared and issued by qualified persons in accordance with Section 50CA and the Section 56(2)(x) of the Income-tax Act, 1961 read with Rule 11UA of the Income-tax Rules, 1962;

 

(iv)    The Company shall have obtained a valuation report, in a form acceptable to the Buyer, determining the fair market value of Capital Stock of Amtran prepared and issued by qualified persons in accordance with Section 9 of the Income-tax Act, 1961 read with Rule 11UB of the Income-tax Rules, 1962;

 

(v)    The Continuing Selling Parties shall have delivered to the Buyer a certificate from a qualified chartered accountant, certifying that as of such Second Closing Date, that there are no circumstances whatsoever that would render the sale and transfer of any of the Securities by such Seller to the Buyer on the relevant Second Closing Date, as contemplated by this Agreement or the Shareholders’ Agreement, void or voidable, under the provisions of Section 281 of the Income-tax Act, 1961, Section 81 of the Central Goods and Services Tax Act, 2017, as applicable;

 

(vi)    Each of the Continuing Selling Parties shall have confirmed in writing to the Buyer whether its residency status at Second Closing for the purposes of FDI Laws is as described in (i) or (ii) of Section 3.2(g).

 

(vii)    If any Continuing Selling Party has residency status at Second Closing for the purposes of FDI Laws as described in sub-section (i) of Section 3.2(g), then such Continuing Selling Party shall have made commercially reasonable efforts to deliver to the Buyer a draft Form FC-TRS with all fields and information filled-in and together with attachments thereto (in draft form, where final versions are not available prior to the Second Closing Date), in each case reviewed and pre-approved by such Continuing Selling Party’s Authorized Dealer bank; and

 

(viii)    If any Continuing Selling Party has residency status at Second Closing for the purposes of FDI Laws as described in sub-section (i) of Section 3.2(g), then such Continuing Selling Party shall have made commercially reasonable efforts to deliver to the Buyer the drafts, as pre-approved by such Continuing Selling Party’s Authorized Dealer bank, of (y) consent letter, and (z) declarations to be executed and delivered by Buyer, for attachment to the Form FC-TRS to be filed by such Continuing Selling Party.

 

 

Section 2.10    Second Closing Consideration.

 

(a)    If the approval of the Reserve Bank of India is received for the Share Swap pursuant to Section 2.9(a)(i) above on or prior to the first anniversary of the Closing Date, then the purchase price for the acquisition of all the Minority Equity Interests of the Company at Second Closing in accordance with this Agreement shall equal the Stock Consideration; and

 

(b)    If the approval of the Reserve Bank of India for the Share Swap is not received pursuant to Section 2.9(a)(i) above on or prior to the first anniversary of the Closing Date, then the purchase price for the acquisition of the Put Securities or Call Securities, as the case may be by the Buyer or its Affiliates, in accordance with this Agreement and the Shareholders’ Agreement shall equal the Second Sale Consideration as determined in accordance with the Shareholders’ Agreement.

 

Section 2.11    Issuance or Payment at the Second Closing. At the Second Closing, Buyer or Buyer Parent and/or their Affiliates shall deliver, disburse, or issue, without duplication and in accordance with the Shareholders’ Agreement, the following consideration:

 

(a)    If the Second Closing involves a Share Swap, then to the Continuing Selling Parties, the Stock Consideration in book-entry form, and proof of evidence thereof, reasonably satisfactory to Seller Representative; and

 

(b)    If any Second Closing involves the purchase and sale of the Put Securities or Call Securities (as the case may be), such consideration for the Put Securities or Call Securities, as applicable, as determined in accordance with the Shareholders’ Agreement, which shall be paid by wire transfer of dollars in immediately available funds to such account or accounts as have been designated in writing by the Continuing Selling Parties to Buyer.

 

Section 2.12    Second Closing Deliverables.

 

(a)    If the Second Closing involves a Share Swap, then on the Second Closing Date and in accordance with the SHA, Buyer Parent will make the payment and undertake the actions specified in Section 2.11(a) and Buyer, Buyer Parent, and/or their Affiliates will deliver, or cause to be delivered, to the Continuing Selling Parties, as applicable:

 

(i)    evidence reasonably satisfactory to Continuing Selling Parties that Buyer Parent has instructed the transfer agent of Buyer Parent’s common stock to deliver the Stock Consideration issued at the Second Closing to the Continuing Selling Parties, in book entry form;

 

(ii)    certificates of good standing, dated not more than seven (7) calendar days prior to the Second Closing Date, with respect to Buyer Parent, issued by the Secretary of State of the State of Delaware;

 

 

(iii)    a certificate duly executed by the Secretary of Buyer Parent, in a form acceptable to Seller Representative, dated as of the Second Closing, attaching and certifying on behalf of Buyer Parent (A) the Organizational Documents of Buyer Parent, and (B) the resolutions of the board of directors (or other appropriate governing body) of Buyer Parent authorizing the execution, delivery and performance by Buyer Parent of the Transaction Documents to which it is a party and the transactions contemplated hereby and thereby, including the issuance of the Stock Consideration to Continuing Selling Parties;

 

(iv)    the (x) consent letter, (y) declarations duly executed by Buyer and/or its Affiliate, and (z) any other documents to be provided by the Buyer and/or its Affiliate, for attachment to the Form FC-TRS to be filed by each Continuing Selling Party who has residency status at Second Closing for the purposes of FDI Laws as described in sub-section (i) of Section 3.2(g);

 

(v)    the six-point Know Your Customer information, which shall be communicated by the Buyer’s and/or its Affiliate’s bank to the Authorized Dealer bank (via SWIFT message) of each Continuing Selling Party who has residency status at Second Closing for the purposes of FDI Laws as described in sub-section (i) of Section 3.2(g); and

 

(vi)    such other documents and instruments as required by any other provision of this Agreement or as required to consummate the transactions contemplated hereby.

 

(b)    If the Second Closing involves the purchase and sale of the Put Securities or Call Securities (as the case may be) in accordance with the Shareholders’ Agreement, Buyer and/or its Affiliate will make the payment and undertake the actions specified in Section 2.11(b) and will deliver, or cause to be delivered, to the Continuing Selling Parties, as applicable:

 

(i)    the (x) consent letter, (y) declarations duly executed by Buyer and/or its Affiliate, and (z) any other documents to be provided by the Buyer and/or its Affiliates, for attachment to the Form FC-TRS to be filed by each Continuing Selling Party who has residency status at Second Closing for the purposes of FDI Laws as described in sub-section (i) of Section 3.2(g);

 

(ii)    the six-point Know Your Customer information, which shall be communicated by the Buyer’s and/or its Affiliate’s remitting bank to the Authorized Dealer bank (via SWIFT message) of each Continuing Selling Party who has residency status at Second Closing for the purposes of FDI Laws as described in sub-section (i) of Section 3.2(g); and

 

(iii)    such documents and instruments as may be required by any other provision of this Agreement or as may reasonably be required to consummate the transactions contemplated hereby.

 

(c)    On the Second Closing Date and in accordance with the SHA, Seller Representative will deliver, or cause to be delivered, to Buyer and Buyer Parent on behalf of the Continuing Selling Parties:

 

(i)    (y) copies of delivery instructions duly executed by each Continuing Selling Party and issued to such Continuing Selling Party’s depository participant with respect to the transfer of all of the Minority Equity Interests if the Second Closing involves Share Swap, or (z) such number of Put Securities or Call Securities with respect to which the Minority Shareholder Put Option or Call Option is exercised, if any such Second Closing involves the purchase and sale of the Put Securities or Call Securities, in each case, in accordance with the terms of the Shareholders’ Agreement, containing proof of payment of applicable stamp duty in connection therewith;

 

 

(ii)    If the Second Closing involves a Share Swap, then the Form ODI filed by each Continuing Selling Party who has residency status at Second Closing for the purposes of FDI Laws as described in sub-section (ii) of Section 3.2(g) with the Reserve Bank of India in accordance with the Foreign Exchange Management (Overseas Investment) Rules, 2022 and regulations framed thereunder, for the sale by the Continuing Selling Parties of the Minority Equity Interests of the Company in consideration for the Stock Consideration;

 

(d)    On the Second Closing Date and in accordance with the SHA, Company will complete and the Buyer and the Buyer Parent shall cause the Company to complete the following actions:

 

(i)    pass appropriate resolutions in the meeting of its the board of directors approving, the transfer to Buyer or its Affiliate of (y) the Minority Equity Interests, or (z) such number of Put Securities or Call Securities with respect to which the Minority Shareholder Put Option or Call Option, as applicable, is exercised, and authorizing such transfer to be recorded in the registers of the Company;

 

(ii)    update (y) Register of Members of the Company showing Buyer or its Affiliate as the legal and beneficial owner of (A) the Minority Equity Interests, or (B) such number of Put Securities or Call Securities with respect to which the Minority Shareholder Put Option or Call Option, as applicable, is exercised, and (z) register of transfer of the Company recording the transfer to Buyer or its Affiliate of (A) the Minority Equity Interests, or (B) such number of Put Securities or Call Securities with respect to which the Minority Shareholder Put Option or Call Option, as applicable, is exercised; and

 

(iii)    such other documents and instruments as required by any other provision of this Agreement or as required to consummate the transactions contemplated hereby.

 

Section 2.13    Post-Closing Deliverables.

 

(a)    Within such periods after the Closing or the Second Closing as specified below, each Party shall undertake the following action items (“Post-Closing Actions”) in the manner set out below:

 

(i)    The Company shall, within the statutorily prescribed timelines following the Closing, file the prescribed (A) e-form MGT-14 (Filing of resolutions and agreements to the Registrar under Section 117) in relation to the Restated Articles; (b) e-form DIR 12 (Particulars of appointment of directors and the key managerial personnel and the changes among them), with respect to the appointment of the Buyer Directors and resignation of the Resigning Directors, each, with the jurisdictional Registrar of Companies;

 

 

(ii)    Amtran shall, within the statutorily prescribed timelines following the Closing, file the prescribed e-form DIR 12 (Particulars of appointment of directors and the key managerial personnel and the changes among them), with respect to the appointment of the Buyer Directors and resignation of the Resigning Directors, with the jurisdictional Registrar of Companies; and

 

(iii)    Each Seller who has residency status at Second Closing for the purposes of FDI Laws as described in sub-section (i) Section 3.2(g) shall, within fifteen (15) days following the Closing, file Form FC-TRS with the Reserve Bank of India, in accordance with the Foreign Exchange Management (Non-Debt Investment) Rules, 2022 and regulations framed thereunder, reporting the sale and transfer of Securities to Buyer;

 

(iv)    Each Continuing Selling Party who has residency status at Second Closing for the purposes of FDI Laws as described in sub-section (i) of Section 3.2(g) shall, within fifteen (15) days following the Second Closing, file Form FC-TRS with the Reserve Bank of India, in accordance with the Foreign Exchange Management (Non-Debt Investment) Rules, 2022 and regulations framed thereunder, reporting the sale and transfer of Securities to Buyer or its Affiliate;

 

(v)    Each Seller and each Continuing Selling Party who has residency status at Second Closing for the purposes of FDI Laws as described in sub-section (i) of Section 3.2(g) shall deliver to the Buyer, copies of the approval received from the Reserve Bank of India with respect to the Form FC-TRS filed by such Seller or Continuing Selling Party, immediately upon receipt of such approval.

 

(vi)    The Selling Parties shall, within thirty (30) days following the Closing, deliver to the Buyer a valuation report, in a form acceptable to the Buyer, determining the fair market value of Capital Stock of Amtran prepared and issued by qualified persons in accordance with Section 9 of the Income-tax Act, 1961 read with Rule 11UB of the Income-tax Rules, 1962.

 

(b)    The Selling Parties shall ensure, within 30 (thirty) calendar days from the Closing Date, that:

 

(i)    the Company and Amtran intimate the Gujarat Pollution Control Board regarding change in ownership of the Company and Amtran, respectively, at Closing;

 

(ii)    the Company intimates HDFC Bank Limited about the change in capital structure and ownership of the Company at Closing;

 

(iii)    the Company issues a written intimation to ABB India Limited informing them of the proposed transaction at Closing; and

 

(iv)    the Company and Amtran appropriately notify the relevant authorities in relation to the change in the constitution as required under the import-export code registration certificate of the Company and Amtran respectively.

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES RELATED TO THE SELLING PARTIES

 

Except as set forth in the Disclosure Schedules, the Selling Parties, as of the Closing Date, and the Continuing Selling Parties, as of the Second Closing Date, respectively, represent and warrant to Buyer, as follows:

 

Section 3.1    Organization. Each Seller and Continuing Selling Party (who is not a natural person) is duly formed, validly existing and in good standing under the Laws of its establishment or formation. Each Seller and Continuing Selling Party (who is not a natural person) has all requisite organizational power and authority under those Applicable Laws and its Organizational Documents to own the Securities as held by it as of the date hereof.

 

Section 3.2    Authorization; Enforceability; Absence of Conflicts.

 

(a)    Each Seller and Continuing Selling Party has the requisite power, capacity and authority to enter into and deliver each Transaction Document to which he, she or it is a party, and to carry out the transactions contemplated by the Transaction Documents.

 

(b)    This Agreement has been, and each of the other Transaction Documents to which each Seller or Continuing Selling Party is or will be a party are, or when executed and delivered by the parties thereto will be, duly executed and delivered by such Seller or Continuing Selling Party and, assuming the due authorization, execution and delivery of this Agreement and such other Transaction Documents by the other parties hereto and thereto, constitutes, or upon execution will constitute, such Seller’s or Continuing Selling Party’s legal, valid and binding obligation, enforceable against him, her or it in accordance with its terms, except as that enforceability may be (i) limited by any applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar Laws affecting the enforcement of creditors’ rights generally and (ii) subject to general principles of equity (regardless of whether that enforceability is considered in a proceeding in equity or at law).

 

(c)    The execution and delivery by each Seller or Continuing Selling Party of the Transaction Documents to which he, she, or it is a party, the performance by each Seller or Continuing Selling Party of his, her, or its obligations under each Transaction Document to which such Seller or Continuing Selling Party is a party in accordance with their respective terms and the consummation of the transactions contemplated by the Transaction Documents will not violate, breach or constitute a default under (i) the Organizational Documents of such Seller or Continuing Selling Party who is not a natural person, (ii) any Law applicable to such Seller or Continuing Selling Party, or (iii) any material agreement of any such Seller or Continuing Selling Party, except for such violations, breaches or defaults under clause (iii) that would not reasonably be expected to result in a Material Adverse Effect.

 

(d)    Required Consents. No consent, approval, Permit, governmental order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to any Seller or Continuing Selling Party or the Company in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, except as set forth in Section 3.2(d) of the Disclosure Schedules and other than the approval of the Reserve Bank of India in connection with the Second Closing if the Second Closing involves a Share Swap.

 

 

(e)    Seller 3 holds the Securities as an overseas citizen of India on a non repatriation basis, as contemplated under the provisions of the Foreign Exchange Management Act, 1999, the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, and the Foreign Direct Investment Policy of the Government of India (“FDI Laws”).

 

(f)    As of the Closing Date, the Selling Parties (except Seller 3) are persons resident in India for the purposes of FDI Laws.

 

(g)    As of the Second Closing Date, each of the Continuing Selling Parties are either (as confirmed in writing by such Continuing Selling Party to Buyer pursuant to Section 2.9(a)(vi)) (i) (A) a person resident outside India, or (B) a non-resident Indian or overseas citizen of India holding the Securities on a repatriation basis; or (ii) (A) a person resident in India, or (B) a non-resident Indian or overseas citizen of India holding the Securities on a non-repatriation basis, in each case for the purposes of FDI Laws.

 

Section 3.3    Litigation. No Proceeding is pending or, to the knowledge of any Seller, threatened, to which any Seller or Continuing Selling Party is or may become a party which (i) questions or involves the validity or enforceability of any obligation of such Seller or Continuing Selling Party under any Transaction Document, or (ii) seeks (or reasonably may be expected to seek) to prevent or delay consummation by such Seller or Continuing Selling Party of the transactions contemplated by the Transaction Documents.

 

Section 3.4     Accredited Investor. If the Continuing Selling Parties are to receive Stock Consideration from the Buyer Parent at Second Closing, as of the Second Closing Date:

 

(a)    Each of the Continuing Selling Parties is an “accredited investor” (as that term is defined in Rule 501 of Regulation D under the Securities Act). Each of the Continuing Selling Parties is acquiring the Stock Consideration for investment and not with a view toward, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling such Stock Consideration. Each Continuing Selling Party agrees that the Stock Consideration will constitute “restricted securities” (as that term is used under the Securities Act), and agrees that the Stock Consideration has not been registered under, and that the Stock Consideration may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under, the Securities Act, and any applicable foreign and state securities laws, except under an exemption from such registration under the Securities Act and such laws.

 

(b)    Each of the Continuing Selling Parties has such knowledge and experience in business and financial matters so that such Continuing Selling Party is capable of evaluating the merits and risks of an investment in the Stock Consideration being acquired hereunder. Each of the Continuing Selling Parties understands the full nature and risk of an investment in Stock Consideration. Each of the Continuing Selling Parties further acknowledges that such Continuing Selling Party has had access to the publicly available books and records of Buyer Parent and Seller Representative has had an opportunity to ask questions concerning Buyer Parent and the Stock Consideration.

 

 

Section 3.5    Taxation. Each Seller other than Seller 3, is an Indian resident for taxation purposes under the Income Tax Act, 1961. Seller 3 is a non-resident as per the provisions of Section 6 of the Income Tax Act, 1961, and has held the Securities as capital asset and not as stock-in-trade prior to Closing. There are no Tax proceedings or outstanding Tax claims with respect to any Seller which could result in the transaction being considered void under Section 281 of Income-tax Act, 1961 and Section 81 of the Central Goods and Service Tax Act, 2017, as applicable. The Buyer is not required to withhold any Tax under Applicable Law while making payment of the Purchase Price to any Seller, other than Seller 3. The information provided by Seller 3 for the purpose of withholding tax computation by the Buyer is true, correct, and complete in all material respects.

 

Section 3.6    No Other Representations. Except as expressly set forth herein, all representations and warranties of a Seller and a Continuing Selling Party relate only to the Acquired Business and the Company Employees and not to any other business, assets or employees of the any Seller and Continuing Selling Party and their Affiliates (other than the Company and Amtran).

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES RELATED TO THE COMPANY AND AMTRAN

 

Except as set forth in the Disclosure Schedules, each of Seller 1 and Seller 2, as of the Closing Date, represents and warrants to Buyer as follows, with respect to the Company and Amtran, as applicable:

 

Section 4.1    Organization; Power; Authorization.

 

(a)    Section 4.1 of the Disclosure Schedules sets forth the Organization Jurisdiction of each of the Company and Amtran, each of which is duly organized, validly existing and in good standing under the Laws of its Organization Jurisdiction, and has all requisite corporate or other entity power and authority under those Laws and its respective Organizational Documents to own, lease or otherwise hold its respective properties and assets and to carry on its business as conducted as of the date hereof. Each of the Company and Amtran is duly qualified and licensed, as may be required, and in good standing to do business in each jurisdiction in which the business it is conducting, or the operation, ownership or leasing of its properties, makes such qualification and licensing necessary, other than in such jurisdictions where the failure to be so qualified and licensed would not reasonably be expected to result in a Material Adverse Effect. Selling Parties have made available to Buyer complete and correct copies of the Organizational Documents of the Company and Amtran, each as amended to the date hereof.

 

(b)    The Company has the requisite power, capacity and authority to enter into and deliver each Transaction Document to which it is a party, and to carry out the transactions contemplated by the Transaction Documents. The execution and delivery by the Company of the Transaction Documents to which it is a party, the performance by the Company of its obligations under each Transaction Document to which it is a party in accordance with their respective terms and the consummation of the transactions contemplated by the Transaction Documents have been duly and validly authorized by all requisite organizational action of the Company and no other organizational proceeding on the part of the Company is necessary to authorize the Transaction Documents to which the Company is or will be party.

 

 

(c)    This Agreement has been, and each of the other Transaction Documents to which the Company is or will be a party are, or when executed and delivered by the parties thereto will be, duly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement and such other Transaction Documents by the other parties hereto and thereto, constitutes, or upon execution will constitute, the Company’s legal, valid and binding obligation, enforceable against it in accordance with its terms, except as that enforceability may be (i) limited by any applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar Laws affecting the enforcement of creditors’ rights generally and (ii) subject to general principles of equity (regardless of whether that enforceability is considered in a proceeding in equity or at law).

 

(d)    Except as set forth in Section 4.2(b) of the Disclosure Schedules, neither the execution and delivery of this Agreement and the other Transaction Documents to which the Company is a party, nor the performance by the Company of the transactions contemplated hereby or thereby, will:

 

(i)    violate or conflict with, or result in a breach of, any of the terms, conditions or provisions of the Organizational Documents of the Company;

 

(ii)    violate or conflict with, or result in a breach of, any Applicable Law;

 

(iii)    violate, conflict with, result in a breach of, or constitute (with or without notice or lapse of time or both) a default under, or an event which would give rise to any right of notice, modification, acceleration, payment, cancellation or termination under, or in any manner release any party thereto from any obligation under, any Permit or Contract to which the Company is a party or by which the properties or assets of the Company are bound; or

 

(iv)    result in the creation or imposition of any Lien upon any properties or assets of the Company.

 

Section 4.2    Required Consents.

 

(a)    Except as set forth on Section 4.2(a) of the Disclosure Schedules, no Law requires the Company or Amtran to obtain any Permit, or make any filings, including any report or notice, with any Governmental Authority, in connection with the execution, delivery or performance by Selling Parties of the Transaction Documents to which it is a party, the enforcement against it of its obligations thereunder or the consummation of the transactions contemplated by the Transaction Documents.

 

(b)    Except as set forth in Section 4.2(b) of the Disclosure Schedules, no Contract or arrangement to which the Company or Amtran is a party or is bound or to which any of the Company’s or Amtran’s assets are subject, requires the Company or Amtran, as applicable, to obtain any Consent from any Person other than a Governmental Authority in connection with the execution, delivery or performance by the Company or Amtran of the Transaction Documents to which it is a party, the enforcement against the Company or Amtran of their obligations thereunder or the consummation of the transactions contemplated by the Transaction Documents.

 

 

Section 4.3    Capitalization.

 

(a)    Selling Parties hold of record, own beneficially, and have good and valid title to the Securities, free and clear of all Liens (other than Permitted Equity Liens and Liens in effect on or prior to the Closing Date that will be released upon payment of the Purchase Price). The Company owns sixty percent (60%) of the issued and outstanding Capital Stock of Amtran, free and clear of all Liens (other than Permitted Equity Liens and Liens in effect on or prior to the Closing Date that will be released upon payment of the Purchase Price).

 

(b)    Except as disclosed in Section 4.3 of the Disclosure Schedules or as set forth in the Organizational Documents of the Company or Amtran: (a) no Capital Stock of the Company or Amtran is subject to pre-emptive rights, rights of first refusal, tag-along rights, drag-along rights, proxies, voting trusts, stockholder agreements or other similar agreements or understandings in effect to which the Company or Amtran is a party with respect to the voting or transfer of such Capital Stock; (b) there are no outstanding subscriptions, options, warrants, rights, calls, conversion rights, rights of exchange, convertible or exchangeable securities or other plans or commitments, contingent or otherwise, relating to the Capital Stock of the Company or Amtran other than as contemplated by this Agreement; (c) there are no outstanding contracts or other agreements of the Company or Amtran, or, to the knowledge of Seller, of Selling Parties or any other Person, to purchase, redeem or otherwise acquire any outstanding Capital Stock of the Company or Amtran, or securities or obligations of any kind convertible into any Capital Stock of the Company or Amtran; and (d) there are no outstanding or authorized equity appreciation, phantom equity, equity incentive plans or similar rights with respect to the Company or Amtran.

 

Section 4.4    Subsidiary. Except as set forth in Section 4.4 of the Disclosure Schedules and except for the Company’s ownership interests in Amtran and Amran Shared Services LLC, neither the Company nor Amtran own, directly or indirectly, any Capital Stock in any other Entity.

 

Section 4.5    Assets.

 

(a)    The assets, property, rights, agreements and interests of the Company and Amtran constitute all of the assets, properties and rights of every type and description, whether real or personal, tangible or intangible, used or held for use, and are sufficient in all material respects to conduct the Acquired Business after the Closing consistent with past practices.

 

(b)    Except as set forth in Section 4.5(b) of the Disclosure Schedules, the Company and Amtran have good and valid title to, or a valid leasehold interest in, all of their respective tangible personal property and assets reflected in the Latest Balance Sheet, free and clear of all Liens (other than Permitted Liens), other than property or assets sold or otherwise disposed of in the Ordinary Course of Business since the Financial Information Date.

 

(c)    All of the material tangible personal property of the Company and Amtran currently used in the Acquired Business is in good condition and repair, ordinary wear and tear excepted. Immediately following the Closing, all of the assets of the Company and Amtran will be owned, leased or available for use by the Company and Amtran on terms and conditions substantially identical to those under which, immediately prior to the Closing, the Company and Amtran own, lease or use such assets. Except as set forth in Section 4.5(c) of the Disclosure Schedules, all tangible assets of the Company and Amtran (including inventory) are located on the Leased Real Property, other than goods or materials in transit.

 

Section 4.6    Real Property.

 

(a)    Neither the Company nor Amtran owns any real property.

 

 

(b)    Section 4.6(b) of the Disclosure Schedules contains, as of the date of this Agreement, a list of all real property leased by the Company and Amtran, including with respect to each Real Property Lease, the street address of the parcel of real property to which such Real Property Lease relates, the landlord under such Real Property Lease, whether such landlord is affiliated with the Company, Amtran or any of their respective Affiliates, the basic monthly rent and other amounts paid or payable with respect thereto, the expiration of the term of such Lease, the current use of such property, and any purchase options exercised or exercisable by the Company or Amtran. Selling Parties have delivered or made available to Buyer true, complete and correct copies of all Real Property Leases.

 

(c)    Except as set forth in Section 4.6(c) of the Disclosure Schedules, each of the Company and Amtran (i) has a good and valid leasehold interest in the Leased Real Property, including facilities, structures and other improvements thereon, in each case free and clear of Liens other than Permitted Liens, and (ii) is the holder and enjoys the benefit of the easements and similar rights that the Company and Amtran purport to hold or to which the Company and Amtran purport to have any rights, and the rights of the Company and Amtran with respect to each such easement or similar right are in full force and effect.

 

(d)    The Leased Real Property constitutes the only real property used, occupied or held for use by the Company in connection with the Acquired Business or which is necessary for the continued operation of the Acquired Business as currently conducted.

 

(e)    Except for the Real Property Leases, there are no leases, subleases, licenses, concessions or other agreements, written or oral, granting to any party the right of use or occupancy of any portion of any parcel of the Leased Real Property. To the knowledge of Seller, no other party to any Real Property Lease is in material breach of or default under any Real Property Lease. The execution and delivery of this Agreement and the consummation of the transactions hereunder will not result in the termination of any Real Property Lease, and immediately after the Closing all Real Property Leases will continue in full force and effect, and except as otherwise required under any Real Property Lease, create an imposition of any material and burdensome condition or other obligation on Buyer.

 

(f)    Neither the Company nor Amtran has any past due obligation as lessee under any Real Property Lease.

 

(g)    There are no outstanding actions, disputes, litigation, or investigations in relation to any Leased Real Property.

 

(h)    There is no pending, or, to the knowledge of Seller, threatened condemnation or other governmental taking of any Leased Real Property or any part thereof.

 

Section 4.7    Transactions with Affiliates. Section 4.7 of the Disclosure Schedules sets forth a complete list of any contract or agreement during the past four (4) years preceding the date hereof with continuing effect as of the date hereof between (a) the Company or Amtran, on the one hand, and (b)(i) Selling Parties or any Affiliate of Selling Parties (other than the Company or Amtran), other than any contract or agreement contemplated by this Agreement, (ii) any officer, shareholder, member or director of the Company or Amtran, or (iii) to the extent a Person in (i) or (ii) is a natural person, any Person who has any direct or indirect relation by blood, marriage or adoption to them. Neither Selling Parties, nor any Affiliate of Selling Parties (other than the Company and Amtran) (x) owns any material properties, assets or rights that are used by the Company or Amtran, except as may be listed on Section 4.7(a)(x) of the Disclosure Schedules; (y) owes any money to, or is owed any money by, the Company or Amtran (except with respect to compensation or expense reimbursement received as employees, consultants or directors in the Ordinary Course of Business); or (z) has asserted any claim or cause of action against the Company or Amtran. All transactions between (a) the Company or Amtran, on the one hand, and (b) Selling Parties or any Affiliate of Selling Parties (other than the Company or Amtran) are on arm’s length.

 

 

Section 4.8    Litigation.

 

(a)    No Proceeding is pending or, to the knowledge of Seller, threatened, to which the Company is or may become a party which (i) questions or involves the validity or enforceability of any obligation of the Company under any Transaction Document, or (ii) seeks (or reasonably may be expected to seek) to prevent or delay consummation by the Company of the transactions contemplated by the Transaction Documents.

 

(b)    Except as set forth in Section 4.8(b) of the Disclosure Schedules, as of the date of this Agreement, there is no, and there has not been in the five years prior to the date of this Agreement, any Proceeding directed against the Company or Amtran or affecting any of the officers, directors, managers, equityholders or employees of the Company or Amtran in their capacities as such, or pending, to the knowledge of Seller, threatened by the Company or Amtran against any Person, at law or in equity, or before or by any Governmental Authority. The Company and Amtran, as applicable, are fully insured with respect to each of the matters set forth on Section 4.8(b) of the Disclosure Schedules.

 

(c)    Except as set forth in Section 4.8(c) of the Disclosure Schedules, neither the Company nor Amtran is subject to any judgment, award, order, decree, consent, notice, ruling, decision, determination, verdict, sentence, subpoena, civil investigative demand, writ or injunction issued, made, entered, rendered or otherwise put into effect by or under the authority of any Governmental Authority.

 

Section 4.9    Absence of Certain Changes.

 

(a)    Except as set forth in Section 4.9(a) of the Disclosure Schedules, since March 31, 2023, (i) the Company and Amtran have conducted the Acquired Business only in the Ordinary Course of Business, and (ii) there has been no event, change or circumstance which, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect.

 

(b)    Without limiting the generality of the foregoing, except as set forth in Section 4.9(b) of the Disclosure Schedules, since March 31, 2023, each of the Company and Amtran has:

 

(i)    not sold, assigned, transferred, disposed of, or abandoned any property, rights or assets, except for the sale of inventory in the Ordinary Course of Business consistent with past practice, or mortgaged, pledged or subjected any property, right or assets to any Lien (other than Permitted Liens), charge or other restriction;

 

 

(ii)    not sold, assigned, transferred, disposed of, or abandoned or permitted to lapse any Permits, any Intellectual Property or any other intangible assets, or disclosed any confidential or proprietary information of the Company or Amtran to any Person (excluding Persons under an agreement or obligation of confidentiality), granted any license or sublicense of any rights under or with respect to any Intellectual Property;

 

(iii)    not made or granted, or made any promise to make or grant, any increase in the compensation of any employee with annual compensation of Fifty Thousand Dollars ($50,000.00) or more, or amended or terminated any existing employee plan, program, policy or arrangement, including any Employee Plan, or adopted any new Employee Plan, or hired or engaged any employee or independent contractor with annual compensation of Fifty Thousand Dollars ($50,000.00) or more;

 

(iv)    not terminated any key employee, senior executive or director (or equivalent board member), and no key employee, senior executive or director (or equivalent board member) has resigned, or has provided written notification to the Company or Amtran of their intention to resign, from the Company or Amtran;

 

(v)    conducted its cash management customs and practices (including the timing of, invoicing and collection of receivables and the accrual and payment of payables and other current liabilities) and maintained the books and records of the Company and Amtran in the Ordinary Course of Business;

 

(vi)    not made any loans or advances to, or guarantees for the benefit of, or entered into any transaction or agreement with, any Affiliate, or Affiliate of any Selling Party;

 

(vii)    not suffered any loss, damage, destruction or casualty loss to the Acquired Business or the properties or assets of the Company or Amtran in excess of Twenty Five Thousand Dollars ($25,000.00), or canceled, compromised, released or waived any rights or claims of value, whether or not covered by insurance and whether or not in the Ordinary Course of Business;

 

(viii)    not adopted or changed any financial reporting or accounting policy, period, method or practice, including any method of calculating any bad debt, contingency or other reserve for accounting or financial reporting purposes or its fiscal year;

 

(ix)    not declared, set aside or paid any dividend or distribution of cash, capital stock or other property or securities in respect of its capital stock or other equity interests or purchased, redeemed or otherwise acquired any shares of its capital stock or equity interests or other securities;

 

(x)    not amended, canceled, terminated, modified or waived any Material Agreement, except for any amendment, modification or waiver made available to Buyer and which would not reasonably be expected to result in a Material Adverse Effect;

 

(xi)    not issued, delivered, sold, pledged or otherwise encumbered any shares of its Capital Stock, any other equity or voting interests or any securities convertible into, or exchangeable for, or any options, warrants, calls or rights to acquire or receive any such shares, interests or securities or any stock appreciation rights, phantom stock awards or other rights;

 

 

(xii)    not amended or taken any action to amend its Organizational Documents, or engaged in any merger, consolidation, reorganization, reclassification, liquidation, dissolution or similar transaction;

 

(xiii)    not acquired by merger or consolidation, or by purchasing all or a substantial portion of the assets of, or by purchasing all or a substantial equity or voting interest in, or by any other manner, all or a substantial portion of any business or entity or division thereof;

 

(xiv)    not commenced, waived, paid, discharged or settled any Proceeding;

 

(xv)    not adopted or entered into any collective bargaining agreement or other labor union agreement applicable to the employees of the Company or Amtran;

 

(xvi)    not made any capital expenditure or commitments therefor that deviate from the annual capital expenditures budget for the Company that has been provided to Buyer or that are otherwise in excess of One Hundred Fifty Thousand Dollars ($150,000.00) in the aggregate, or delayed, postponed or cancelled any planned, budgeted, necessary or routine capital expenditures;

 

(xvii)    paid any amount to induce a third party to enter into an agreement;

 

(xviii)    not incurred any indebtedness other than indebtedness incurred in the Ordinary Course of Business;

 

(xix)    not made, modified, or rescinded any Tax election, changed any annual Tax accounting period, adopted or changed any method of Tax accounting or reversed any accruals (except as required by a change in Law or Indian Accounting Standards), filed any amended Tax Returns, signed or entered into any closing agreement or settlement, settled or compromised any claim or assessment of Tax Liability, surrendered any right to claim a refund, offset or other reduction in Liability, consented to any extension or waiver of the limitations period applicable to any claim or assessment, in each case with respect to Taxes, or acted or omitted to act where such action or omission to act could reasonably be expected to have the effect of increasing any present or future Tax Liability or decreasing any present or future Tax benefit for the Company, Amtran, Buyer or Buyer’s Affiliates;

 

(xx)    waived or released any non-competition, non-solicitation, non-disclosure, non-interference, non-disparagement, or other restrictive covenant obligation of any current or former employee or independent contractor;

 

(xxi)    sold, disposed of, assigned, licensed, sub-licensed, covenanted not to sue with respect to, subjected to any Lien (other than Permitted Liens), or otherwise transferred any Intellectual Property rights, or abandoned or permitted to lapse or expire any Intellectual Property rights;

 

(xxii)    except in connection with the transactions contemplated in this Agreement, disclosed any trade secrets or other material Confidential Information, other than pursuant to a written confidentiality agreement entered into in the Ordinary Course of Business with reasonable protections of, and preserving all rights of the Company or Amtran, as applicable, in, such trade secrets and other Confidential Information; and

 

 

(xxiii)    not entered into any Contract to do or engage in any of the foregoing.

 

Section 4.10    Compliance with Law. Except as set forth in Section 4.10 of the Disclosure Schedules, (a) neither the Company nor Amtran is, nor during the past five (5) years preceding the date hereof have they been, in violation in any material respect of any Applicable Law (including with respect to compliances for all central, state, and local labour laws), and (b) neither the Company nor Amtran has received written notice of any such violation. The Company has not been advised by its accountants that the Company’s procedures and internal controls are not sufficient to provide reasonable assurances that violations of Applicable Laws would be prevented, detected and deterred.

 

Section 4.11    Permits.

 

(a)    Each of the Company and Amtran holds the Permits required or necessary to conduct its business as currently conducted, and all of which are listed in Section 4.11(a) of the Disclosure Schedules, provided, that, no representation or warranty in this Section 4.11 is made with respect to Permits issued pursuant to Environmental Laws, which are covered exclusively in Section 4.16.

 

(b)    Except as set forth in Section 4.11(b) of the Disclosure Schedules, each of the Company and Amtran is, and during the five (5) years preceding the date hereof has been, in compliance with all Permits set forth in Section 4.11(a) of the Disclosure Schedules, all of which are validly subsisting, binding and in full force and effect. Except as set forth in Section 4.11(b) of the Disclosure Schedules, neither the Company nor Amtran has received any written notice regarding any actual, alleged or potential failure to comply with any Permit, and, to the knowledge of Seller, no Proceeding is threatened to revoke, suspend, terminate, cancel, withdraw or limit any such Permits. Except as set forth in Section 4.11(b) of the Disclosure Schedules, the Company and Amtran have obtained all required material Permits for the conduct and operation of the Company and Amtran as currently conducted in the jurisdictions in which the Company and Amtran operate.

 

 

Section 4.12    Certain Business Practices.

 

(a)    The Company, Amtran, their respective Representatives, and any other Person acting for or on behalf of or otherwise associated with the Company or Amtran is and has been in material compliance with all applicable Laws relating to the prevention of corruption or bribery (including the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.S. Anti-Kickback Act of 1986, as amended, and the UK Bribery Act 2010, (Indian) Prevention of Corruption Act, 1988, and any other applicable Laws of similar effect promulgated, enforced, or administered by any Governmental Authority in the jurisdictions where the Company or Amtran conducts business (collectively, “Anti-Corruption Laws”)). Neither the Company, Amtran, their respective Representatives, nor any other Person acting for or on behalf of or otherwise associated with the Company or Amtran has, directly or indirectly, in furtherance of or in connection with the Acquired Business (a) used corporate funds (i) to make any unlawful payment to any government official or employee (including unreported political contributions, gifts, or entertainment), or (ii) to establish or maintain any unlawful or unrecorded fund or account of any nature; (b) made any unlawful payment (including bribes, rebates, payoffs, or kickbacks) to any Person, or unlawfully provided anything of value (whether as property, services, or in any other form) to any Person, for the purpose of obtaining an improper business advantage (including influencing any representative or employee of any foreign, federal, state, or local Governmental Authority in the performance of his or her public functions); (c) requested, agreed to receive or accepted any financial or other advantage or inducement where such request, agreement to receive or acceptance would be improper or likely to influence such Person in the performance of his, her or its role; (d) agreed, committed, or offered to undertake any of the foregoing actions; or (e) otherwise taken any action that would constitute a violation of any Anti-Corruption Laws. Within the five (5) years prior to the date hereof, neither the Company, Amtran nor any Representative of, or other Person associated with, the Company or Amtran, has received any notice, inquiry, or internal or external allegation; made any voluntary or involuntary disclosure to any Governmental Authority; or conducted any internal investigation or audit concerning any actual or potential violation or wrongdoing related to Anti-Corruption Laws, and no event has occurred or circumstance exists that is likely to give rise to any such investigation or Proceeding by any Governmental Authority regarding any offense or alleged offense under anti-bribery, anti-corruption or anti-fraud legislation. There is no Proceeding pending, or, to the knowledge of Seller, threatened, against the Company, Amtran or any Representative of, or other Person associated with, the Company or Amtran before any court or other Governmental Authority with respect to any Anti-Corruption Laws. The Company and Amtran have implemented and maintains in effect written policies, procedures and internal controls, including an internal accounting controls system, that are reasonably designed to prevent, deter and detect violations of Anti-Corruption Laws. A true, correct and complete copy of any Anti-Corruption Laws policies and procedures adopted by the Company and Amtran are listed on Section 4.12(a) of the Disclosure Schedules and have been furnished to, or made available to Buyer.

 

(b)    Each of the Company, Amtran and any director, officer or employee of the Company or Amtran and any other Person acting for or on behalf of the Company or Amtran is and has been in compliance with all applicable economic sanctions and export control laws, including (i) the Export Administration Regulations, 15 C.F.R. §§ 730-774; (ii) the Arms Export Control Act, 22 U.S.C. § 2778, and the corresponding International Traffic in Arms Regulations; (iii) the economic sanctions laws and regulations enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), 31 C.F.R. Part 500 et seq., and the U.S. Department of State; (iv) the anti-boycott regulations, guidelines, and reporting requirements under the Export Administration Regulations and Section 999 of the Internal Revenue Service Code; and (v) any other economic sanctions or export control Laws applicable to the Company or Amtran (collectively, “Export Control Laws”). There is no Proceeding pending, or to the knowledge of Seller, threatened in writing against the Company or Amtran before any court or other Governmental Authority with respect to any Export Control Laws.

 

(c)    The Company, Amtran and any director, officer or employee of the Company or Amtran and any other Person acting for or on behalf of the Company or Amtran is and has been in compliance with all applicable laws related to terrorism or money laundering during the last five (5) years, including (i) the Currency and Foreign Transactions Reporting Act of 1970 (31 U.S.C. §§ 5311 et. seq., (the Bank Secrecy Act)), as amended by Title III of the USA PATRIOT Act, (ii) the Trading with the Enemy Act, (iii) Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (66 Fed. Reg. 49079), (iv) the (Indian) Prevention of Money Laundering Act, 2002, and (v) any other enabling legislation, executive order or regulations issued pursuant or relating thereto (collectively, “Anti-Money Laundering Laws”). There is no Proceeding pending, or to the knowledge of Seller, threatened in writing against the Company or Amtran before any court or other Governmental Authority with respect to any Anti-Money Laundering Laws.

 

 

(d)    The Company, Amtran and any director, manager, officer or employee of the Company or Amtran and any other Person acting for or on behalf of the Company or Amtran is and has been in compliance with all applicable laws governing the classification, valuation, duties, origination, and marking of foreign-origin products imported into India and other relevant jurisdictions (collectively, “Customs Laws”), as well as any similar requirements imposed under bilateral or multilateral Free Trade Agreements to which India is a party (“FTAs”). There is no Proceeding pending, or, to the knowledge of Seller, threatened in writing against the Company or Amtran before any court or other Governmental Authority with respect to any Customs Laws or FTAs.

 

(e)    Neither the Company or Amtran, nor any director, manager, officer or employee of the Company or Amtran or any other Person acting for or on behalf of the Company or Amtran (i) has been or is currently subject to any sanctions administered by OFAC, (ii) has engaged or is currently engaging in any business or other dealings with, in, involving or relating to any country or Person currently subject to any sanctions administered by OFAC, or (iii) is otherwise in violation of applicable Customs Laws, Anti-Money Laundering Laws, Export Control Laws, or other international trade compliance laws.

 

(f)    Neither the Company nor Amtran has, in connection with or relating to the Acquired Business, received from any Governmental Entity or any other Person any notice, inquiry or internal or external allegation, made any voluntary or involuntary disclosure to a Governmental Entity or conducted any internal investigation or audit concerning any actual or potential violation or wrongdoing related to Customs Laws, Anti-Money Laundering Laws, Export Control Laws, or other international trade compliance laws.

 

Section 4.13    Material Agreements.

 

(a)    Section 4.13(a) of the Disclosure Schedules lists, as of the date of this Agreement, each written contract or agreement related to the Company and Amtran and to which the Company or Amtran is a party (each such written contract or agreement, a “Material Agreement”):

 

(i)    each agreement of the Company or Amtran involving a purchase price in excess of Two Hundred Thousand Dollars ($200,000.00) or requiring performance by any party more than one year from the date hereof, which, in each case, cannot be cancelled by the Company or Amtran, as the case may be, without penalty or without more than ninety (90) days’ notice;

 

(ii)    all agreements that relate to the sale of any of the Company’s or Amtran’s assets, other than in the Ordinary Course of Business, for consideration in excess of Two Hundred Thousand Dollars ($200,000.00);

 

(iii)    all agreements that relate to the acquisition of any business, a material amount of stock or assets of any other Person or any real property (whether by merger, sale of stock, sale of assets or otherwise), in each case involving amounts in excess of Two Hundred Thousand Dollars ($200,000.00);

 

 

(iv)    except for agreements relating to trade payables, all agreements relating to indebtedness of the Company or Amtran, in each case having an outstanding principal amount in excess of Two Hundred Thousand Dollars ($200,000.00);

 

(v)    all agreements between or among the Company or Amtran on the one hand and a Seller or any Affiliate of such Seller (other than the Company, Amtran, or Amran, Inc.) on the other hand;

 

(vi)    all collective bargaining agreements or agreements with any labor organization, union or association to which the Company or Amtran is a party;

 

(vii)    all agreements that restrict the Company or Amtran, or any of their Affiliates, from competing with or engaging in any business activity anywhere in the world, or agreements that include supply or exclusivity provision or any “most favored nation,” “most favored pricing” or similar clause;

 

(viii)    all agreements concerning joint venture or partnership agreements, or the sharing of profits;

 

(ix)    all agreements with respect to the lease of Leased Real Property (the “Real Property Leases”);

 

(x)    all agreements with respect to the lease of personal property in excess of Seventy Five Thousand Dollars ($75,000.00) per annum or One Hundred Fifty Thousand Dollars ($150,000.00) in the aggregate;

 

(xi)    all agreements with any Governmental Authority;

 

(xii)    all Government Contracts;

 

(xiii)    all agreements that contain any fixed or indexed pricing, “most-favored nation” pricing or similar pricing terms or provisions regarding minimum volumes, volume discounts, or rebates;

 

(xiv)    all agreements that, together with any related Material Agreements, provide for capital expenditures in excess of One Hundred Thousand Dollars ($100,000.00) for any single project or related series of projects (including a schedule of the amount of capital expenditures provided for pursuant to each such agreement);

 

(xv)    all agreements with annual contract value exceeding Two Hundred Thousand Dollars ($200,000.00) that provide for indemnification of a third party by the Company or Amtran;

 

(xvi)    all agreements with any Material Customer or Material Vendor;

 

 

(xvii)    (A) all agreements for the engagement or employment of any former (to the extent of any ongoing liability) or current officer, director, employee or other Person on a full-time, part-time, individual consulting or other basis with annual compensation in excess of Two Hundred Thousand Dollars ($200,000.00) (except for any arrangements that can be terminated “at will” without any liability for severance or termination pay or any other obligations), (B) all agreements providing for the payment, in excess of Two Hundred Thousand Dollars ($200,000.00), in relation to severance or a retention or any agreement providing for the payment of any cash or other compensation or benefits upon the consummation of the transactions contemplated hereby, (C) any indemnification, “change in control”, restrictive covenant, proprietary information and inventions assignment, or other ancillary agreement or Contract with any directors, officers, employees, or independent contractors of the Company or Amtran, or (D) any agreement relating to loans, in excess of Two Hundred Thousand Dollars ($200,000.00), to any former (to the extent of any ongoing liability) or current employee, officer, manager, director or Affiliate;

 

(xviii)    all agreements or arrangements requiring the consent of any party thereto or containing any provision that would result in an acceleration, modification or termination of any rights or obligations of any party thereto upon, or providing any party thereto any remedy (including rescission or liquidated damages) in the event of, a direct or indirect change in control of any Person or the consummation of the transactions contemplated by this Agreement;

 

(xix)    all nondisclosure, noncompete or confidentiality agreements or agreements regarding ownership and rights with regard to work produced by employees, contractors or consultants of the Company or Amtran;

 

(xx)    all agreements under which the Company or Amtran has advanced or loaned monies to any other Person or otherwise agreed to advance, loan or invest any funds (other than business expense advances to employees in the Ordinary Course of Business not in excess of Fifty Thousand Dollars ($50,000.00) individually or Two Hundred Thousand Dollars ($200,000.00) in the aggregate);

 

(xxi)    all settlement, conciliation or similar agreements with any Governmental Authority or pursuant to which the Company or Amtran will have outstanding obligations, in excess of Two Hundred Thousand Dollars ($200,000.00), after the date of this Agreement;

 

(xxii)    all powers of attorney or other similar agreement or grant of agency; or

 

(xxiii)    any other agreement entered into outside the Ordinary Course of Business that is in effect with ongoing obligations and that is material to the operations or business of the Company or Amtran.

 

 

(b)    Correct and complete copies of the Material Agreements listed (or required to be listed) in Section 4.13(a) of the Disclosure Schedules, together with all modifications and amendments thereto, have been delivered or made available to Buyer, except as set forth in Section 4.13(b) of the Disclosure Schedules. Neither the Company nor Amtran have received a notice of default, nor has any event occurred, to the knowledge of Seller, which with the giving of notice or the passage of time or both would constitute a default by the Company or Amtran, or which would give rise to any right of notice, modification, acceleration, payment, cancellation or termination of or by another party under, or in any manner release any party thereto from any obligation under, any Material Agreement and, to the knowledge of Seller, (i) no other party is in default, nor (ii) has any event occurred which with the giving of notice or the passage of time or both would constitute a default by any other party or which would give rise to any right of notice, modification, acceleration, payment, cancellation or termination of or by the Company or Amtran under, or in any manner release any party thereto from any obligation under, any such Material Agreement. Each of the Material Agreements is in full force and effect, is valid and enforceable in accordance with its terms against the Company or Amtran, as applicable, and to the knowledge of Seller, against the other party to the Material Agreement, and is not subject to any claims, charges, set-offs or defenses. Neither the Company nor Amtran has modified, supplemented or amended any Material Agreement, or waived performance by any other party thereto of any covenant thereunder. Neither the Company nor Amtran has received any written notice of, nor to the has any other party made the Company or Amtran aware of, the decision or intention of any other party thereto to cancel, terminate or not renew any Material Agreement, whether in accordance with the terms of the respective Material Agreement or otherwise. To the knowledge of Seller, during the preceding five (5) years no party to any of the Material Agreements has ever challenged or disputed any Material Agreement or otherwise taken any action against the Company or Amtran (in writing or otherwise) claiming that the Company or Amtran is in material breach of such Material Agreement.

 

(c)    Except for the consent to be obtained from ABB India Limited (which is now a post-closing intimation under this Agreement), no consent is required from any of the customers or vendors for a change of control under any of the Material Agreements listed (or required to be listed) in Section 4.13(a) of the Disclosure Schedules.

 

Section 4.14    Employee Matters.

 

(a)    Section 4.14(a) of the Disclosure Schedules lists, as of the date of this Agreement, the name, job title, hourly rate or annual base salary (as applicable), hire date, accrued but unused vacation days or other paid time off and, country and state of employment, whether exempt or non-exempt or classified as a workman or non-workman (as applicable), leave status (if applicable, including type of leave, date leave began and expected date of return), work permits and visa status (if applicable) (as of the date shown in Section 4.14(a) of the Disclosure Schedules) of each Company Employee.

 

(b)    Section 4.14(b)(i) of the Disclosure Schedules sets forth a complete and accurate list of each Employee Plan of the Company and Amtran. Section 4.14(b)(ii) of the Disclosure Schedules sets forth a complete and accurate list of each Employment Agreement with any Company Employee or former Company Employee pursuant to which there are continuing obligations.

 

(c)    The Company has delivered correct and complete copies to Buyer of (i) each written Employee Plan, as amended to the Closing, together with financial statements and actuarial reports for the three (3) most recent plan years, if applicable; (ii) the most recent and any other determination letter, ruling or notice issued by any Governmental Authority with respect to each Employee Plan; (iii) any material correspondence with any Governmental Authority regarding any Employee Plan; (iv) each other document, explanation or communication which describes any relevant aspect of any Employee Plan that is not disclosed in previously delivered materials; and (v) any other documents, forms or other instruments reasonably requested by Buyer. A description of any unwritten Employee Plan, including a description of any material terms of such plan, is set forth on Section 4.14(c) of the Disclosure Schedules.

 

 

(d)    With respect to each Employee Plan, as of the date of this Agreement, (i) each such plan has been administered in material compliance with its terms and Applicable Laws; (ii) no disputes, government audits, examinations or, to the knowledge of Seller, investigations are pending or, to the knowledge of Seller, threatened in writing other than ordinary claims for benefits; and (iii) all contributions, premiums or payments due have been made on a timely basis or have been properly recorded on the books of the Company.

 

(e)    No Employee Plan provides medical, health, life insurance or other welfare-type benefits to retirees or former employees, owners or consultants or individuals who terminate (or have terminated) employment with the Company or Amtran, or the spouses or dependents of any of the foregoing (except for limited continued medical benefit coverage for former employees, their spouses and other dependents as required to be provided under Applicable Law).

 

(f)    With respect to all periods prior to the Closing, the requirements of all Applicable Law, in all material respects been complied with and satisfied with respect to each applicable Employee Plan in relation to provision of insurance to employees.

 

(g)    To the knowledge of Seller, the Company has, for purposes of each relevant Employee Plan, correctly classified those individuals performing services for the Company as employees, contract labourers, independent contractors, or agents of the Company.

 

(h)    There currently is not and never has been any Employee Plan of the Company or Amtran that is or has been subject to the Laws of a jurisdiction other than India.

 

(i)    Except as otherwise set forth in Section 4.14(i) of the Disclosure Schedules, neither the Company nor Amtran is, or since January 1, 2018 has been, subject to any agreement with any labor union or employee association and neither the Company nor Amtran has, since January 1, 2018, made any commitment to or conducted negotiations with any labor union or employee association with respect to any future agreement and there is no current, and since January 1, 2018, there has not been any pending or, to the knowledge of Seller, threatened attempt to organize, certify or establish any labor union or employee association or any strike, work stoppage, slowdown, lockout, or other material labor dispute.

 

(j)    Except as otherwise set forth in Section 4.14(j) of the Disclosure Schedules and except as otherwise provided for under the terms of this Agreement, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in combination with another event): (i) result in any payment becoming due, or increase the amount of any compensation due, to any employee or former employee of the Company or Amtran; (ii) increase any benefits otherwise payable under any Employee Plan; (iii) result in the acceleration of the time of payment or vesting of any such compensation or benefits; (iv) result in the triggering or imposition of any restrictions or limitations on the rights of the Company or any other Person to amend or terminate any Employee Plan; or (v) entitle the recipient of any payment or benefit to receive a “gross up” payment for any income or other taxes that might be owed with respect to such payment or benefit.

 

 

(k)    In relation to any of the Company Employees, as of the date of this Agreement, except as described in Section 4.14(k) of the Disclosure Schedules, neither the execution or delivery of this Agreement or any Transaction Document nor the consummation of the transactions contemplated hereby or thereby will (i) result in any payment becoming due to any Company Employee or Seller designated employee, (ii) increase any benefit otherwise payable under an Employee Plan, or (iii) result in the acceleration of the time of payment or vesting of any compensation or benefits under an Employee Plan, to any Company Employee or Seller designated employee.

 

(l)    Except as otherwise set forth in Section 4.14(l) of the Disclosure Schedules, the Company and Amtran are and since January 1, 2018 have been in compliance with all Applicable Laws pertaining to employment and employment practices, including all Laws relating to labor relations, equal employment opportunities, fair employment practices, employment discrimination, harassment, disability rights or benefits, wages, hours, overtime compensation, child labor, hiring, promotion and termination of employees, working conditions, meal and break periods, privacy, health and safety, workers’ compensation, leaves of absence, collective bargaining, withholding and payment of employment-related Taxes, equal remuneration, equal opportunity, and occupational health and safety. The Company and Amtran have timely paid in full to each current or former employee or, if not past due, adequately accrued in accordance with Indian Accounting Standards, all wages, salaries, commissions, bonuses, benefits and other compensation due to or on behalf of such employees. There are, and since January 1, 2018 have been, no Proceedings against the Company or Amtran pending, or, to the knowledge of Seller, threatened to be brought or filed, by or with any Governmental Authority or arbitrator in connection with the employment, termination of employment, or application for employment of any current or former applicant, employee, consultant, volunteer, intern or independent contractor, including any claim relating to unfair labor practices, employment discrimination, harassment, retaliation, equal pay, wage and hours or any other employment related matter arising under Applicable Laws. The Company and Amtran are not, and have never been, a party to or otherwise bound by any citation or order by any Governmental Authority relating to employees or employment practices, and there are no Governmental Authority conciliation agreements, noncompliance findings or audits, investigations or similar inquiries pending or in effect, announced, or, to the knowledge of Seller, threatened in writing with respect to employees or employment practices of the Company or Amtran.

 

(m)    In the last five (5) years, neither the Company nor Amtran has implemented any employment terminations, layoffs, furloughs, paid or unpaid leaves of absence, reductions in pay or reductions in hours impacting any current or former employee outside the Ordinary Course of Business. In the last five (5) years, neither the Company nor Amtran has implemented or announced a “plant closing,” “mass layoff,” “retrenchment”, or other similar action under Applicable Law.

 

(n)    To the knowledge of Seller, no current employee of either the Company or Amtran (i) has any present intention to terminate his or her employment with the Company or its Subsidiaries within the first twelve (12) months following the Closing Date or (ii) is a party to or bound by any confidentiality, non-competition, non-solicitation, proprietary rights or other agreement that would restrict in any material respect the performance of such employee’s employment duties or the ability of the Company or Amtran to conduct its business.

 

(o)    Mrs. Sapna Shah is a senior employee of the Company.

 

 

Section 4.15    Financial Information.

 

(a)    Section 4.15(a) of the Disclosure Schedules, except as otherwise set forth therein, sets forth true, correct and complete copies of the following financial statements (collectively, the “Financial Statements”): (i) the unaudited balance sheet of the Company as of March 31, 2024 (the “Financial Information Date”) and the related unaudited statements of income of the Company for the year ended March 31, 2024, the unaudited balance sheet of the Company as of May 31, 2024, and the unaudited statements of income of the Company for the two months ended May 31, 2024 (collectively, the “Company Financial Statements”), and (ii) the unaudited balance sheet of Amtran as of March 31, 2024 and the related unaudited statements of income and cash flows of Amtran for the year ended March 31, 2024, the unaudited balance sheet of Amtran as of May 31, 2024, and the unaudited statement of income of Amtran for the two months ended May 31, 2024 (collectively, the “Amtran Financial Statements”). The “Latest Balance Sheet” shall mean the balance sheet of the Company or Amtran as applicable as of May 31, 2024. For purposes of this Agreement, the “May 31 P&Ls” shall mean the unaudited statement of income of the Company for the two months ended May 31, 2024 and the unaudited statement of income of Amtran for the two months ended May 31, 2024.

 

(b)    Except as set forth in Section 4.15(b) of the Disclosure Schedules, each of the Financial Statements (including the notes thereto, if any) has been prepared from and is consistent with the books and records of the Company or Amtran, as the case may be (which books and records are accurate and complete in all material respects), presents fairly in all material respects the financial condition and results of operations and cash flows of the Company and Amtran, as the case may be, as of the dates thereof and for the periods covered thereby and has been prepared in accordance with Indian Accounting Standards, in each case consistently applied throughout the periods covered thereby (subject, in the case of the unaudited Financial Statements, to the absence of footnote disclosures and to normal year-end adjustments, none of which is individually, or in the aggregate, material).

 

(c)    Except as set forth in Section 4.15(c) of the Disclosure Schedules, the Company and Amtran have established and adhered to a system of internal accounting controls that is designed to provide reasonable assurance regarding the reliability of financial reporting, that transactions are recorded as necessary to permit preparation of financial statements in accordance with Indian Accounting Standards, access to properties and assets is permitted in accordance with management’s general or specific authorization, except, in each case, for any deficiencies that, individually or in the aggregate, are not material, Except as set forth in Section 4.15(c) of the Disclosure Schedules, there is not currently (i) any significant deficiency or material weakness in the system of internal control over financial accounting utilized by the Company or Amtran, (ii) any fraud or other wrongdoing, whether or not material, that involves the management or other employees of the Company or Amtran who have a role in the preparation of financial statements or the internal accounting controls utilized by the Company or Amtran, or (iii) any claim or allegation regarding any of the foregoing.

 

 

(d)    All accounts receivable of the Company and Amtran reflected on their respective Latest Balance Sheet, and all accounts receivable arising subsequent to the date thereof, represent sales actually made or services actually performed in the Ordinary Course of Business and are legal, validly subsisting and binding claims against the respective debtors as to which full performance has been rendered. Except as set forth in Section 4.15(d) of the Disclosure Schedules, all accounts receivable of the Company that are reflected in the accounting records of the Company (i) are current or within 180 days of their respective due dates and, except for facts and information actually known by Seller 1 or Seller 2, are collectible in the Ordinary Course of Business, provided, however, that for the avoidance of doubt, no guarantees or warranties of collectability are being provided by Selling Parties as a result of a subsequent determination as to the payor’s inability or refusal to pay, bankruptcy, or other insolvency, and (ii) are not subject to any material setoffs, counterclaims, credits or other offsets, Lien, or agreement for deduction, free goods or services, discount or other material deferred price or quantity adjustment. No account receivable has been assigned or pledged to any other Person.

 

(e)    The accounts payable of the Company and Amtran reflected on their respective Latest Balance Sheet arose from bona fide transactions in the Ordinary Course of Business. The accrued Liabilities of the Company and Amtran reflected on their respective Latest Balance Sheet have been incurred in the Ordinary Course of Business. Except instances where any accounts payable are being disputed in good faith, the Company and Amtran have not failed to pay in the Ordinary Course of Business any amounts described in this Section 4.15(e).

 

(f)    Except as otherwise disclosed in Section 4.15(f) of the Disclosure Schedules, all inventories of the Company and Amtran, whether or not reflected on their respective Latest Balance Sheet, which are owned by the Company and Amtran on the Closing Date: (i) are valued at average cost; and (ii) do not include any items which are damaged, or spoiled, obsolete or of a quality or quantity not usable or saleable in the Ordinary Course of Business within historical inventory “turn” experience of the Company and Amtran, the value of which has not been fully written down, or with respect to which adequate reserves have not been provided. Except as otherwise disclosed in Section 4.15(f) of the Disclosure Schedules, the Company and Amtran each have a sufficient amount of inventory to conduct their business in substantially the same manner as conducted prior to the Closing. There has not been, since the date of the Latest Balance Sheet, any provision for markdowns or shrinkage with respect to inventories other than in the Ordinary Course of Business, otherwise disclosed in Section 4.15(f) of the Disclosure Schedules, or as otherwise consented to by Buyer. All inventory is owned by the Company and Amtran free and clear of all Liens (other than Permitted Liens).

 

Section 4.16    Environmental Matters. Except as set forth in Section 4.16 of the Disclosure Schedules:

 

(a)    the operations of the Acquired Business are and during the relevant statute of limitations period have been in compliance in all material respects with all applicable Environmental Laws in all applicable jurisdictions;

 

(b)    the Company and Amtran have obtained and are in compliance in all material respects with all Permits, filings, licenses and other authorizations required for the operation of the Acquired Business under applicable Environmental Laws, and conditions under such licenses and other authorizations (“Environmental Permits”), and all Environmental Permits are valid and in good standing;

 

(c)    the Company and Amtran are not subject to any outstanding orders, suits, demands, claims, Liens or Proceedings by any Governmental Authority or any person respecting (i) Environmental Laws, (ii) Remedial Actions or (iii) any Release, or to the knowledge of Seller, threatened Release of, or exposure to, a Hazardous Substance (“Environmental Claims”) and no such Environmental Claims are, to the knowledge of Seller, threatened in writing; and

 

 

(d)    to the knowledge of Seller, there has been no Release or threatened Release of Hazardous Substances at any property owned, operated or leased by the Company or Amtran.

 

(e)    For purposes of this Agreement:

 

(i)    “Environment” means (A) land, including surface land, sub-surface strata, sea bed and river bed under water (as defined in clause (B)); (B) water, including coastal and inland water, surface waters, and ground waters; and (C) ambient air;

 

(ii)    “Environmental Law” means any Law, to the extent applicable to the person or properties in the context of which the term is used, regulating or prohibiting Releases into any part of the Environment, or pertaining to the protection of natural resources, the Environment or, to the extent relating to the use of or exposure to Hazardous Substances, human health or safety, as such laws have been and may be amended or supplemented through the date of this Agreement, including the Environmental Protection Act, 1986, the Environment (Protection) Rules, 1986, the Water (Prevention and Control of Pollution) Act, 1974, the Air (Prevention and Control of Pollution) Act, 1981, The Plastic Waste Management Rules, 2016, The Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, the Manufacture, Storage, and Import of Hazardous Chemicals Rules, 1989; and any similar or analogous state and local statutes or regulations promulgated thereunder and decisional law of any Governmental Authority, and any applicable standard of conduct under any common law doctrine, including negligence, nuisance or trespass, related to or arising out of the presence of, Release of or exposure to Hazardous Substances;

 

(iii)    “Hazardous Substance” means (A) any materials, substances or wastes defined as “hazardous” or “toxic” or words of similar import intended to define, list or classify substances by reason of deleterious properties under any Applicable Law relating to public or worker health or safety, damages to, or the protection of, natural resources or the Environment, or relating to pollution, (B) any radioactive materials, asbestos and polychlorinated biphenyls, (C) petroleum and petroleum derivatives, or (D) organohalogenated flame retardant chemicals, including per- and polyfluoroalkyl substances (PFAS) such as perfluorooctanoic acid and perfluorooctane sulfonate;

 

(iv)    “Release” means any release, spill, effluent, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the Environment, or into or out of any property owned, operated or leased by the applicable Party; and

 

(v)    “Remedial Action” means all actions to (A) clean up, remove, treat, or in any other way ameliorate or address any Hazardous Substances in the Environment; (B) prevent the Release or threat of Release, or minimize the further Release, of any Hazardous Substance so it does not endanger or threaten to endanger human health or the Environment; or (C) perform pre-remedial studies and investigations or post-remedial monitoring and care pertaining or relating to a Release.

 

(f)    Notwithstanding anything to the contrary in this Agreement, the representations and warranties set forth in this Section 4.16 are Seller’s sole and exclusive representations and warranties regarding environmental, health and safety matters.

 

 

Section 4.17    Taxes. For purposes of this Section 4.17 each reference to the Company includes Amtran, unless otherwise explicitly provided or as set forth in Section 4.17 of the Disclosure Schedules:

 

(a)    The Company has: (i) within the time prescribed under Applicable Law filed all Tax Returns required to be filed by it, and all such Tax Returns have been properly completed in compliance with all Applicable Laws, and are true, correct and complete, in all material respects; and (ii) timely paid or will timely pay all Taxes shown to be due on any such Tax Return, and all other Taxes due and payable, (iii) maintained all records in relation to all Taxes as required by the Applicable Law; (iv) complied in all respects with applicable transfer pricing regulations and has timely and properly prepared and maintained all transfer pricing related documentation; (v) has not been involved in any transaction other than on arm’s length basis; (vi) filed all refund applications for the period July 2017 and August 2017 under the Central Goods and Services Tax Act, 2017 as determined by the Company as being necessary to be filed by the Company with a Taxing Authority in accordance with Applicable Laws, and such refund applications were materially correct and complete. Company has furnished or made available to Buyer (i) true, correct and complete copies of each Tax Return filed by Company for the three (3) fiscal years most recently ended prior to April 1, 2023; and (ii) each examination report that it has received from any Taxing Authority for any period.

 

(b)    The Company has timely withheld and paid over to the appropriate Taxing Authority all Taxes which it is required to withhold from amounts paid or owing to any employee, shareholders, creditor, holder of securities or other third party, and the Company has complied with all information reporting and backup withholding requirements, including maintenance of required records with respect thereto.

 

(c)    The Company has not agreed to or requested any extension of time for the period with respect to a Tax assessment or deficiency, which period (after giving effect to such extension or waiver) has not yet expired. The Company is not currently the beneficiary of any extension of time within which to file any Tax Return.

 

(d)    The Company has duly and timely collected and remitted all sales, use, excise and similar Taxes related or attributable to the Acquired Business in accordance with Applicable Law, and has collected and maintained all resale certificates and other documentation required to qualify for any exemption from the collection of any such Taxes.

 

(e)    The aggregate unpaid Taxes of the Company (i) did not, as of the date of the Financial Information Date, exceed the reserve for Tax Liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the Latest Balance Sheet and (ii) do not exceed that reserve as adjusted for the passage of time through the end of the Closing Date. Since the Financial Information Date, the Company has not incurred any Liability for Taxes other than in the Ordinary Course of Business.

 

(f)    There are no Liens relating or attributable to Taxes encumbering (and no Taxing Authority has, to the knowledge of Seller, threatened to encumber) the assets of the Company, except for Permitted Liens.

 

(g)    There are no: (i) pending or, to the knowledge of Seller, threatened claims by any Taxing Authority with respect to Taxes relating or attributable to the Company; or (ii) deficiencies for any Tax, claim for additional Taxes, or other dispute or claim relating or attributable to any Tax Liability of the Company claimed, issued or raised by any Taxing Authority that has not been properly reflected in the financial statements.

 

 

(h)    The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting required by Law to be made for a taxable period (or portion thereof) ending on or prior to the Closing Date, (ii) use of a legally impermissible or improper method of accounting for a taxable period ending on or prior to the Closing Date, (iii) prepaid amount, advance payment or deferred revenue received or accrued on or prior to the Closing Date, (iv) transaction undertaken outside the Ordinary Course of Business that has the effect of deferring income, accelerating deductions or otherwise shifting the basis of taxation from one period to another, any non-recognition transaction entered into on or prior to the Closing Date, or (v) any other transaction reflecting gross income that arose on or prior to the Closing Date.

 

(i)    The Company does not have and has never had a taxable presence in any jurisdiction other than jurisdictions for which Tax Returns have been duly filed and Taxes have been duly and timely paid, and no claim has been made by a Taxing Authority in a jurisdiction where the Company does not file Tax Returns and pay Taxes that the Company is or may be subject to any Tax Return filing requirements or taxation by that jurisdiction. Section 4.17(i) of the Disclosure Schedule sets forth each jurisdiction in which the Company or Amtran is or has ever been registered for Taxes or in which the Company or Amtran files or is required to file or has been required to file any Tax Return, or is liable for any Taxes on a “nexus” basis, identifying the type of Tax Return or Tax, as applicable.

 

(j)    Except for Amtran and Amran Shared Services LLC, the Company does not own any equity interest in any other Person.

 

(k)    Company and Amtran are, and at all times since its formation has been, an Indian company for income tax purposes.

 

(l)    No power of attorney related or attributable to Taxes that currently is in effect has been granted by the Company.

 

(m)     Since the Financial Information Date, the Company has not changed any annual accounting period, adopted or changed any method of accounting or reversed any accruals, failed to file any Tax Return or pay any Taxes when due, filed any amended Tax Returns, signed or entered into any closing agreement or settlement with a Taxing Authority, settled or compromised any Tax claim or assessment of Tax Liability, surrendered any right to claim a refund, offset or other reduction in Liability relating to Taxes, consented to any extension or waiver of the limitations period applicable to any claim or assessment, in each case, with respect to Taxes.

 

Section 4.18    Intellectual Property. For purposes of this Section 4.18 each reference to the Company includes Amtran, unless otherwise explicitly provided or as set forth in Section 4.18 of the Disclosure Schedules:

 

(a)    Section 4.18(a) of the Disclosure Schedules contains a complete and accurate description and list of (i) all patented or registered Intellectual Property owned or held by the Company or Amtran, including applications for the same, and (ii) any unregistered Intellectual Property that is material to the conduct of the Acquired Business as presently conducted.

 

 

(b)    Excluding generally commercially available, off the shelf software programs licensed pursuant to shrink-wrap or “click to accept” agreements with a replacement cost and/or annual license fee of less than Twenty Five Thousand Dollars ($25,000.00), neither the Company nor Amtran license any Intellectual Property. Except for any inter-company or affiliate licenses, neither the Company nor Amtran license any Intellectual Property to any other Person.

 

(c)    The Company owns and possesses all right, title and interest in and to, or has the right to use pursuant to a valid and enforceable license, all Intellectual Property necessary for or used in the operation of its business as presently conducted and as presently proposed to be conducted, free and clear of all Liens (the “Company Intellectual Property”). For the avoidance of doubt, (i) effective as of the Closing, neither Seller nor any other Person shall have any right, title or interest to any Intellectual Property necessary for or used in the operation of the Company’s business as presently conducted and as presently proposed to be conducted (other than Intellectual Property licensed from third parties pursuant to a valid and enforceable license), and (ii) the Company Intellectual Property is all the Intellectual Property necessary for or used in the operation of the Company’s business as presently conducted and as presently proposed to be conducted.

 

(d)    All Company Intellectual Property, other than Intellectual Property used by the Company pursuant to a valid and enforceable license, has been developed by employees of the Company or by contractors of the Company. Except as set forth on Section 4.18(d) of the Disclosure Schedules, all employees and service providers of the Company that have contributed to the development, creation, invention, or authorship of any Company Intellectual Property are obligated by written agreement to assign and have assigned their rights in such Company Intellectual Property to the Company. To the knowledge of Seller, no current or former employee, consultant, or contractor of the Company is in default or breach of any term of any Employment Agreement, non-disclosure agreement, assignment of invention agreement or similar agreement relating to the protection, ownership, development, use or transfer of Company Intellectual Property or has any right, license, claim or interest whatsoever in or with respect to any Company Intellectual Property. Except as set forth on Section 4.18(d) of the Disclosure Schedules, none of the Company Intellectual Property, other than Intellectual Property used by the Company pursuant to a valid and enforceable license, were developed in whole or in part by or on behalf of, or using grants, funding, or any other subsidies of, any Governmental Authority, university, college or other educational institution or research center (collectively, a “Sponsor”) and no funding, facilities, resources, faculty or students of a Sponsor was used in the development of such Company Intellectual Property. Except as set forth on Section 4.18(d) of the Disclosure Schedules, no Sponsor has any right, title or interest in or to any Intellectual Property owned or purported to be owned by the Company.

 

(e)    Except as otherwise set forth in Section 4.18(e) of the Disclosure Schedules, to the knowledge of Seller, none of the owned Company Intellectual Property is invalid or unenforceable in whole or in part. No loss or expiration of any of the Company Intellectual Property is pending or, to the knowledge of Seller, threatened. The Company has taken all action necessary, performed all customary acts and paid all fees and Taxes (to the extent applicable) required to protect and maintain in full force and effect the Company Intellectual Property.

 

 

(f)    The Company and Amtran have not received any written claims during the seven-year period prior to the date of this Agreement that they have infringed or misappropriated the Intellectual Property of any other Person. To the knowledge of Seller, no Person is infringing upon or misappropriating any material Intellectual Property owned or used by the Company and Amtran. To the knowledge of Seller, the Company and Amtran are not infringing upon or misappropriating the Intellectual Property of any other Person.

 

(g)    The computer systems, including the software, hardware and networks (collectively, the “Systems”), currently used by the Company are sufficient for the current needs of the Acquired Business, including as to capacity and ability to process current peak volumes in a timely manner. In the past twelve (12) months, there have been no bugs in, or breaches, failures, or breakdowns of any Systems that have caused a substantial disruption or interruption in or to the use of such Systems by the Company or the conduct of its business.

 

(h)    Each Person that has had or currently has access to any trade secrets owned or used by the Company is subject to confidentiality obligations regarding the non-disclosure and protection of such trade secrets that have not, to the knowledge of Seller, been breached by any such Person. Except as set forth in Section 4.18(h) of the Disclosure Schedules, no source code owned by the Company has been escrowed, disclosed, released, made available or delivered (and no Person has agreed to disclose, release, or deliver such source code under any circumstance) to any third party, and no Person other than the Company is in possession of any such source code or has been granted any license or other right with respect therein or thereto. No event has occurred, and to the knowledge of Seller, no circumstance or condition exists, that (with or without notice or lapse of time, or both) will, or would reasonably be expected to, result in a requirement that any source code owned by the Company be escrowed, disclosed, licensed, released, made available or delivered to any third party.

 

(i)    Except as set forth on Section 4.18(i) of the Disclosure Schedules, the Company has not conceived or first actually reduced to practice any invention in performance of a Contract with a Governmental Authority. For each invention disclosed on Section 4.18(i) of the Disclosure Schedules, the Company has disclosed the invention to the applicable Governmental Authority within the time period required by the Contract with such Governmental Authority under which that invention conceived or first actually reduced to practice.

 

Section 4.19    Privacy and Information Security.

 

(a)    except as set forth in Section 4.19(a) of the Disclosure Schedules, neither the Company, Amtran, nor, to the knowledge of Seller, any other Person, has received any notice, allegation, complaint or other communication, and there is no pending investigation by any Governmental Authority or payment card association regarding any actual or possible violation of any Laws relating to Personal Data by or with respect to the Company.

 

(b)    In the past five (5) years, except as set forth in Section 4.19(b) of the Disclosure Schedules, to the knowledge of Seller, neither the Company nor Amtran has suffered a security breach with respect to any of the Company Data and there has been no unauthorized or illegal use of or access to any Company Data.

 

 

(c)    Neither the execution, delivery, and performance of this Agreement nor the transfer of all Company Data maintained or otherwise processed by or for the Company or Amtran, including all of the Company’s or Amtran’s databases and other information relating to employees, customers and all non-customer end users of the Company Products, from the Company and Amtran to Buyer will in and of themselves cause, constitute, or result in a breach or violation of any Laws relating to Personal Data or any Company or Amtran privacy policy and which, individually or in the aggregate, has created material Liability for the Company or Amtran.

 

(d)    The Company and Amtran have taken commercially reasonable steps to provide for the back-up and recovery of material data and implemented commercially reasonable disaster recovery plans, procedures and facilities.

 

Section 4.20    No Undisclosed Liabilities. Neither the Company nor Amtran has any Liabilities (regardless of when such Liability is asserted), except (a) as and to the extent reflected and accrued for or reserved against in the Latest Balance Sheet; (b) for immaterial Liabilities which have arisen after the date of the Latest Balance Sheet in the Ordinary Course of Business (none of which results from, arises out of, relates to, is in the nature of, or was caused by any breach of Contract, breach of warranty, tort, infringement or violation of Law); (c) executory obligations under a Contract (other than Liabilities relating to any breach, or any fact or circumstance that, with notice, lapse of time or both, would result in a breach, thereof by the Company or Amtran); or (d) for Liabilities specifically set forth in Section 4.20 of the Disclosure Schedules.

 

Section 4.21    Insurance Policies. Section 4.21 of the Disclosure Schedules contains a list of all insurance policies carried as of the date hereof by or for the benefit of the Company or Amtran, specifying the insurer, product type of coverage, the deductible amount (if any) and the date through which coverage shall continue by virtue of premiums already paid. All such insurance policies are in full force and effect.

 

Section 4.22    Bank Relations; Powers of Attorneys.

 

(a)    Section 4.22(a) of the Disclosure Schedules sets forth (i) the name of each financial institution in which the Company or Amtran has borrowing or investment arrangements, deposit or checking accounts or safe deposit boxes; and (ii) the types of such arrangements and accounts, including, as applicable, the number of each such account or box and the names of all persons authorized to draw thereon or having signatory power or access thereto.

 

(b)    Section 4.22(b) of the Disclosure Schedules sets forth a complete and correct list of all outstanding powers of attorney executed on behalf of the Company or Amtran.

 

Section 4.23    Brokers. Except for (i) Northern Edge Capital Advisors LLC and (ii) VLS & Co., no broker, agent, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement and the other Transaction Documents based upon arrangements made by or on behalf of the Company or Amtran.

 

 

Section 4.24    Customers and Vendors; Warranties.

 

(a)    Section 4.24(a) of the Disclosure Schedules sets forth a list of the ten (10) largest customers of the Company as measured by the aggregate dollar / INR value of sales by the Company to such customers during the 2023 fiscal year and for the period beginning on April 1, 2024 and ending on August 31, 2024 (each, a “Material Customer” and collectively, “Material Customers”). No Material Customer has canceled or otherwise terminated or adversely or materially modified its relationship with the Company in the past twelve (12) months. The Company has not received any written notice that any Material Customer intends to cancel or otherwise terminate or materially adversely modify its relationship with the Company, nor to the knowledge of Seller, does any Material Customer intend to do so. In the past twelve (12) months, the Company has not granted any discount or other price concession as a result of any financial accommodation provided by the Company or any Affiliate of the Company, to any Material Customer.

 

(b)    Except as set forth on Section 4.24(b) of the Disclosure Schedules, none of the Material Customers of the Company is an Affiliate of the Company or any of the Selling Parties. The Company has not entered into an agreement with a customer that includes a “most-favored nation” or other similar pricing term. Section 4.24(b) of the Disclosure Schedules sets forth a list of the Company’s customers who hold inventory of the Company on consignment and the terms of such consignment.

 

(c)    Section 4.24(c) of the Disclosure Schedules sets forth a list of the ten (10) largest vendors to the Company in the aggregate of inventory, materials and services and commodities as measured by the aggregate dollar / INR value of purchases by the Company from such vendors during the 2023 fiscal year and for the period beginning on April 1, 2024 and ending on August 31, 2024 (each, a “Material Vendor” and collectively, the “Material Vendors”). No Material Vendor has canceled or otherwise terminated or adversely and materially modified its relationship with the Company in the past twelve (12) months. The Company has not received any written notice that any Material Vendor intends to cancel or otherwise terminate or materially adversely modify its relationship with the Company, nor to the knowledge of Seller does any Material Vendor intends to do so. In the past twelve (12) months, the Company has not received any discount or other price concession as a result of any financial accommodation provided to the Company or any Affiliate of the Company, to any Material Vendor.

 

(d)    Except as set forth on Section 4.24(d) of the Disclosure Schedules, none of the Material Vendors to the Company is an Affiliate of the Company or any of the Selling Parties. The Company has not entered into a Contract with a vendor that includes a “minimum purchase requirement” or other similar obligation to purchase from such vendor. The Company does not hold material amounts of any inventory on consignment.

 

(e)    Section 4.24(e) of the Disclosure Schedules sets forth a list of all express warranties, guarantees and warranty policies made or maintained by the Company in respect of products sold or services rendered. The Company has not provided any express warranties, guarantees or warranty policies in respect of any products sold or services rendered except as set forth on Section 4.24(e) of the Disclosure Schedules. No products sold or services rendered by the Company within the past three (3) years are or have been the subject of any dispute or, to the knowledge of Seller, threatened dispute in connection with any express or implied warranty, other than in the Ordinary Course of Business. No salesperson, employee or other agent of the Company is authorized to undertake any express warranty obligation to any customer or other Person other than in accordance with any warranty policy set forth on Section 4.24(e) of the Disclosure Schedules.

 

 

Section 4.25    COVID-19.

 

(a)    Since the announcement of an official order by Governmental Authorities related to the COVID-19 Pandemic, the Company and Amtran have complied, in all material respects, with all Laws relating to COVID-19, including those relating to (i) shelter-in-place and quarantine orders, (ii) the maintenance of safe and acceptable working conditions, including by making disclosures regarding positive cases of COVID-19 among employees or service providers of the Company, and (iii) employee benefits, privacy or labor and employment, including with respect to the furlough or termination of employees or the reduction or modification of compensation or employee benefits, if any.

 

Section 4.26    Products.

 

(a)    The Company has made available a true and complete list of all products of the Company and Amtran, including all products (i) currently being sold, manufactured or distributed or (ii) sold, manufactured or distributed during the past five (5) years (collectively, “Products”).

 

(b)    During the past five (5) years, each of the Company and Amtran has prepared, manufactured, distributed and sold all Products in compliance in all material respects with applicable Laws. All Products have been designed, manufactured, labeled, packaged, performed, and serviced so as to meet and comply in all material respects with all governmental standards and specifications and all Applicable Laws currently in effect, and all Products have received all governmental approvals necessary to allow their sale and use.

 

(c)    Except as it may otherwise arise in the Ordinary Course of Business, there are no product Liabilities, warranties or similar claims currently pending or, to knowledge of Seller, threatened against the Company or Amtran, and, to the knowledge of Seller, there are no facts and/or circumstances that could give rise to any such claims as of the Closing Date.

 

(d)    Each Product has been manufactured in conformity in all material respects with all contractual commitments and all applicable warranties and neither the Company nor Amtran has any Liability (and, to the knowledge of Seller, there is no basis for any Liability) to replace or recall any Product. Section 4.26(d) of the Disclosure Schedule includes copies of the standard terms and conditions of sale of the Products (including applicable guaranty, warranty and indemnity provisions).

 

(e)    During the past five (5) years, there has been no recall, safety alert, post-sale warning, withdrawal or suspension (whether voluntary or mandatory) of any Product. To the knowledge of Seller, there are no facts, events or conditions as of the Closing Date which would reasonably be expected to furnish a basis for an injunction from or an award of damages with respect to, any Product; or which would otherwise reasonably be expected to cause the business of the Company or Amtran, as applicable, to withdraw, recall or suspend or have enjoined any Product from any market or to terminate or suspend distribution of such Products.

 

(f)    Neither the Company nor Amtran is subject (and has not been subject during the previous five (5) years) to any adverse inspection finding, recall, investigation, penalty assessment, audit or other compliance or enforcement action by any Governmental Authority having responsibility for the regulation of the current and/or proposed products of the Company or Amtran. Each of the Company and Amtran has obtained all necessary and material approvals and authorizations from all Governmental Authorities for their current and past business activities.

 

 

(g)    Each of the Company and Amtran is, and has been during the past five (5) years, in compliance in all material respects with applicable Laws regarding advertising and marketing of the Products. All claims made in advertising, marketing and promotional materials in any media (including labels, catalogs, packaging and websites) relating to the Products were in all material respects truthful, non-deceptive and otherwise in material compliance with all applicable Laws, in each case, at the time such advertising, marketing and promotional materials were used by the Company and Amtran. To the knowledge of Seller, neither the Company nor Amtran has been the subject of any material claim alleging inaccurate, misleading or noncompliant labeling of the Products.

 

Section 4.27    Government Contracts.

 

(a)    With respect to each Government Contract and each bid that, if accepted, would result in such a Government Contract (a “Government Bid”) to which the Company or Amtran is a party, (i) the Company and Amtran have complied in all material respects with all requirements of all Applicable Laws, and agreements pertaining to such Government Contract or Government Bid; (ii) all representations and certifications the Company and Amtran have set forth in or pertaining to such Government Contract or Government Bid were current, accurate and complete in accordance with their terms as of their effective date, and the Company and Amtran have materially complied with all such representations and certifications; (iii) neither a Governmental Authority nor any higher-tier contractor, subcontractor or other Person has notified the Company or Amtran in writing that the Company or Amtran breached or violated any Law pertaining to a Government Contract or Government Bid; (iv) no termination for convenience is currently in effect pertaining to a Government Contract; (v) no termination for default, cure notice or show cause notice is currently in effect pertaining to a Government Contract and no event nor condition has occurred or exists, to the knowledge of Seller, that would constitute grounds for such action; (vi) no cost incurred by the Company or Amtran pertaining to a Government Contract is the subject of an investigation or has been disallowed by a Governmental Authority or a higher-tier contractor; (vii) in the last three (3) years, the Company and Amtran did not receive any adverse or negative past performance evaluations or ratings regarding their performance of a Government Contract; (viii) no bid protest is pending with respect to a Government Contract or a Government Bid; and (x) each Government Contract is valid.

 

(b)    i) to the knowledge of Seller neither the Company, Seller or Amtran, or their respective employees, consultants, or agents (while such Person was a principal, employee, consultant, or agent of the Company, Amtran or Seller), is or has been at any point in the last three (3) years under administrative, civil or criminal investigation, indictment, or information by any Governmental Authority, or any audit or investigation by any Governmental Authority with respect to any alleged irregularity, misstatement or omission arising under or relating to any Government Contract or Government Bid, or suspended or debarred from doing business with a Governmental Authority or has been the subject of a finding of non-responsibility or ineligibility for contracting with a Governmental Authority; and (ii) during the last three (3) years, the Company and Amtran have not conducted or initiated any internal investigation or had reason to conduct, initiate or report any internal investigation, or made a mandatory or voluntary disclosure to a Governmental Authority, with respect to any alleged irregularity, misstatement or omission arising under or relating to a Government Contract or Government Bid.

 

(c)    Neither the Company or Amtran, or to the knowledge of Seller, neither the Company or Amtran, or any of their respective principals’, employees’, agents’, or subcontractors’, is or have been in violation of criminal law involving fraud, conflict of interest, bribery, or gratuity provisions or receipt of a significant overpayment in connection with the award, performance, or closeout of any Government Contract or Government Bid.

 

 

(d)    (i) no outstanding claims exist against the Company or Amtran by a Governmental Authority or by a higher-tier contractor, subcontractor, or other Person, arising under or relating to any Government Contract; (ii) there exists no disputes or, to the knowledge of Seller, potential disputes between the Company or Amtran and a Governmental Authority, or any other Law or between the Company or Amtran and any higher-tier contractor, subcontractor or other Person arising under or relating to any Government Contract; and (iii) to the knowledge of Seller, no event or condition exists that constitute grounds for a claim or dispute under clauses (i) or (ii). Except as set forth in (d) of the Disclosure Schedules, neither the Company nor Amtran have an interest in any pending or potential claim against a Governmental Authority or against a higher-tier contractor, subcontractor or other Person arising under or relating to any Government Contract.

 

Section 4.28    No Other Representations. Except for the representations and warranties contained in this Article IV (including the related portions of the Disclosure Schedules), none of Seller, the Company or any other Person has made or makes any other express or implied representation or warranty, either written or oral, on behalf of Seller or the Company, including any representation or warranty as to the accuracy or completeness of any information regarding the Company furnished or made available to Buyer and its Representatives (including the 2021 Confidential Information Memorandum prepared by Northern Edge Capital Advisors, LLC and any information, documents or material made available to Buyer, management presentations or in any other form in expectation of the transactions contemplated hereby) or as to the future revenue, profitability or success of the Company, or any representation or warranty arising from statute or otherwise in Law.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER AND BUYER PARENT

 

Buyer and Buyer Parent represent and warrant to Selling Parties and Continuing Selling Parties (as applicable), as of the Closing Date and the Second Closing Date respectively, as follows:

 

Section 5.1    Organization; Power. Each of Buyer and Buyer Parent is a corporation duly organized, validly existing and in good standing under the Laws of its Organization Jurisdiction and has all requisite corporate power and authority under those Laws and its Organizational Documents to own, lease or otherwise hold its properties and assets and to carry on its business as conducted as of the date hereof. Each of Buyer and Buyer Parent is duly qualified and licensed, as may be required, and in good standing to do business in each jurisdiction in which the business it is conducting, or the operation, ownership or leasing of its properties, makes such qualification and licensing necessary, other than in such jurisdictions where the failure to be so qualified and licensed would not result in a material adverse effect on Buyer or Buyer Parent.

 

Section 5.2    Ownership of Buyer. All of the Capital Stock of Buyer is owned by Buyer Parent, and shall continue to be owned by the Buyer Parent through the Closing Date and Second Closing Date, beneficially and of record, free and clear of all Liens, restrictions on transfer, options, rights, calls, commitments, proxies or other contract rights. Buyer Parent has sole voting power with respect to all actions of Buyer and sole power to agree on behalf of Buyer to all of the matters set forth in this Agreement and/or any Transaction Document, with no limitations, qualifications or restrictions on such rights and powers, and Buyer Parent has not granted and will not grant such rights and powers to any other Person.

 

 

Section 5.3    Authorization; Enforceability; Absence of Conflicts; Required Consents.

 

(a)    Each of Buyer and Buyer Parent has the requisite corporate power and authority to enter into and deliver each Transaction Document to which it is a party, and to carry out the transactions contemplated by the Transaction Documents. The execution and delivery by each of Buyer and Buyer Parent of the Transaction Documents to which it is a party, the performance by Buyer or Buyer Parent of its obligations under each Transaction Document to which Buyer or Buyer Parent is a party in accordance with their respective terms and the consummation of the transactions contemplated by the Transaction Documents have been duly and validly authorized by all requisite corporate or other organizational action by Buyer or Buyer Parent, and no other corporate or other organizational proceedings on the part of Buyer or Buyer Parent are necessary to authorize the Transaction Documents to which Buyer or Buyer Parent is or will be a party.

 

(b)    This Agreement has been, and each of the other Transaction Documents to which each of Buyer and Buyer Parent is or will be a party are, or when executed and delivered by the parties thereto, will be, duly executed and delivered by Buyer and Buyer Parent, and, assuming the due authorization, execution and delivery of this Agreement and such other Transaction Documents by the other parties hereto and thereto, constitutes, or upon execution will constitute, Buyer’s and Buyer Parent’s legal, valid and binding obligation, enforceable against it in accordance with its terms, except as that enforceability may be (i) limited by any applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar Laws affecting the enforcement of creditors’ rights generally and (ii) subject to general principles of equity (regardless of whether that enforceability is considered in a proceeding in equity or at law).

 

(c)    The execution, delivery and performance of this Agreement by each of Buyer and Buyer Parent and the execution, delivery and performance of any other Transaction Documents to which Buyer or Buyer Parent is a party does not and will not, and the consummation by Buyer or Buyer Parent of the transactions contemplated hereby and thereby will not, constitute or result in (A) a breach or violation of, or a default under, the certificate of incorporation or bylaws of Buyer or Buyer Parent; (B) assuming compliance with the matters referred to in Section 5.3(d), with or without notice, lapse of time or both, a breach or violation of, any Law or Permit to which Buyer or Buyer Parent is subject, or (C) with or without notice, lapse of time or both, a breach or violation of, a termination, cancellation or modification (or provide a right of termination, cancellation or modification) or default under, the payment of additional fees, the creation, change or acceleration of any rights or obligations under, or require consent or approval from, the other party thereto, in each case, pursuant to any Contract binding upon Buyer or Buyer Parent, except, in the case of clauses (B) and (C) above, for any such breach, violation, termination, default, creation, acceleration or change that individually or in the aggregate, would not, individually or in the aggregate, prevent or materially delay Buyer or Buyer Parent from consummating the transactions contemplated by this Agreement.

 

 

(d)    Except for (A) compliance with, and filings under, the Exchange Act and the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”) and the rules and regulations of all applicable securities exchanges, and (B) such other filings, approvals and/or notices that will be obtained prior to the Closing, no notices, reports or other filings are required to be made by Buyer or Buyer Parent or any of their respective Subsidiaries with, nor are any consents, registrations, approvals, permits or authorizations required to be obtained by Buyer or Buyer Parent or any of their respective Subsidiaries from, any Governmental Authority in connection with the execution, delivery and performance of this Agreement by Buyer and Buyer Parent and the consummation by Buyer and Buyer Parent of the transaction contemplated hereby, except those that would not, individually or in the aggregate, prevent or materially delay Buyer or Buyer Parent from consummating the transactions contemplated by this Agreement.

 

Section 5.4    SEC Filings. Except as would otherwise not have a material adverse effect on Buyer Parent, within the last three (3) years, Buyer Parent has (a) timely filed all forms, reports, statements, certifications and other documents (including all exhibits, amendments and supplements thereto) required to be filed by it with the SEC (all such forms, reports, statements, certificates and other documents filed, collectively, the “SEC Documents”), (b) otherwise complied in all material respects with all Applicable Laws, including the Securities Act and the Exchange Act, and (c) been continuously listed on the New York Stock Exchange (“NYSE”) under the trading symbol “SXI”, and (d) not been subject to any suspension order. The SEC Documents comply in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act, as the case may be, each as in effect on the date so filed.

 

Section 5.5    Litigation. No Proceeding is pending or threatened in writing to which Buyer or Buyer Parent is or may become a party which (a) questions or involves the validity or enforceability of any obligation of Buyer or Buyer Parent under any Transaction Document, or (b) seeks (or reasonably may be expected to seek) to prevent or delay consummation by Buyer or Buyer Parent of the transactions contemplated by the Transaction Documents.

 

Section 5.6    Accredited Investor. Buyer is an “accredited investor” (as that term is defined in Rule 501 of Regulation D under the Securities Act). Buyer has such knowledge and experience in business and financial matters so that Buyer is capable of evaluating the merits and risks of an investment in the Securities being acquired hereunder. Buyer understands the full nature and risk of an investment in such Securities. Buyer further acknowledges that it has had access to the books and records of the Company and Amtran, is generally familiar with the Acquired Business and has had an opportunity to ask questions concerning the Company and Amtran and the Securities.

 

Section 5.7    Sufficiency of Funds. Buyer has sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Cash Consideration and consummate the transactions contemplated by this Agreement.

 

Section 5.8    Buyer Parent Common Stock. At Second Closing, Buyer has sufficient duly authorized shares of its common stock to enable it to issue the Stock Consideration to Continuing Selling Parties, and upon consummation of the transactions contemplated by this Agreement, the Stock Consideration will be validly issued, fully paid, non-assessable, issued without application of preemptive rights, will have the rights, preferences and privileges specified in the governing documents of Buyer Parent, and will be free and clear of all Liens, encumbrances and restrictions, other than the restrictions imposed by applicable federal and state securities Laws and the restrictions imposed by this Agreement. The Stock Consideration will not be issued in violation of and will not be subject to any preemptive rights, resale rights, rights of first refusal or similar rights. None of the SEC or other securities regulatory authority or stock exchange has issued any order that is currently outstanding preventing or suspending trading in any securities of Buyer Parent, and no such proceeding is, to the knowledge of Buyer Parent, pending or threatened, and the Buyer Parent is not in default of any material requirement of any applicable securities Laws.

 

 

Section 5.9    Exempt from Registration. Subject to the accuracy of the Continuing Selling Partys’ representations in Section 3.5 at Second Closing, Buyer Parent’s issuance of the Stock Consideration at the Second Closing will be exempt from the registration requirements of the Securities Act and all applicable state securities Laws.

 

Section 5.10    Acquisition of Securities for Investment. Buyer is acquiring the Securities for investment and not with a view toward, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling such Securities. Buyer agrees that the Securities have not been registered under, and may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under, the Securities Act, and any applicable foreign and state securities laws, except under an exemption from such registration under such Act and such laws.

 

Section 5.11    Brokers. Except for Guggenheim Partners, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Buyer or Buyer Parent or their respective Affiliates.

 

ARTICLE VI

COVENANTS

 

Section 6.1    Records and Access.

 

(a)    From and after the Closing, Buyer will (i) give Selling Parties and their authorized Representatives reasonable access, during normal business hours and upon reasonable notice, to all books, records, personnel, accountants, offices and other facilities and properties of or relating to the Company and Amtran, (ii) permit Selling Parties to make such copies and inspections thereof as Selling Parties may reasonably request, and (iii) furnish Selling Parties with such financial and operating data and other information with respect to the Company and Amtran as Selling Parties may from time to time reasonably request, in each case (A) to comply with requirements imposed on Selling Parties or their Affiliates by a Governmental Authority having jurisdiction over Selling Parties or their Affiliates, (B) for use in any Proceeding or in order to satisfy audit, accounting, claims, regulatory, litigation, subpoena or other similar requirements or (C) to comply with the obligations of Selling Parties under the Transaction Documents; provided, however, that Selling Parties and their Representatives will agree in advance to a customary confidentiality agreement with respect to such information; provided further, that in the event that Buyer determines that any such provision of access or information could violate any Applicable Law or Contract, or require Buyer to waive any attorney-client privilege or is otherwise subject to applicable confidentiality restrictions or other privilege, the Parties shall take all reasonable measures to permit the compliance with such obligations in a manner that avoids any such harm or consequence.

 

 

(b)    Notwithstanding anything to the contrary contained in this Agreement, in the event of any dispute or threatened dispute between any Seller and their respective Affiliates, employees, agents, partners, representatives, successors and permitted assigns, on the one hand, and Buyer Indemnitees, on the other hand, relating to this Agreement, the other Transaction Documents or the transactions contemplated hereby and thereby, the covenants contained in this Section 6.1 shall not apply thereto (including for discovery purposes) and shall not be considered a waiver by any party of any right to assert the attorney-client privilege or any similar privilege.

 

(c)    Each Seller agrees not to disclose or use at any time (and shall cause each of its Affiliates not to use or disclose at any time) any Confidential Information. Each Seller further agrees to take all commercially reasonable steps (and to cause each of its Affiliates to take all commercially reasonable steps) but, in each case, to exercise no less than a reasonable standard of care, to safeguard such Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. In the event a Seller or any of their respective Affiliates is required by Law to disclose any Confidential Information, such Seller shall promptly notify Buyer in writing, which notification shall include the nature of the legal requirement and the extent of the required disclosure, and such Seller shall cooperate with Buyer to preserve the confidentiality of such information consistent with Applicable Law.

 

Section 6.2    Public Announcement. Selling Parties, Buyer, and Buyer Parent agree to keep the terms of this Agreement confidential, except to the extent, and to the Persons to whom disclosure is required by Applicable Law, as may be required to enforce the terms of this Agreement or for purposes of compliance with financial reporting obligations or stock exchange requirements; provided, that, the Party obligated to make such mandatory reporting or announcement with respect to the initial disclosure of this Agreement and the transactions contemplated hereby provide a draft of such public announcement or disclosure, at least two (2) Business Days in advance to the other Party. Any information that has been publicly disclosed or announced in accordance with the terms of this Section 6.2 by Buyer Parent, following such public disclosure or announcement may be included by any Party or its Representatives in any subsequent public disclosure or announcement, including in documents Buyer Parent files with the SEC. Notwithstanding the foregoing, the Parties may disclose such terms to their respective employees, accountants, advisors and other Representatives as necessary in connection with the ordinary conduct of their respective businesses, so long as the Party making such disclosure takes all commercially reasonable steps and causes each of its Affiliates to take all commercially reasonable steps, but, in each case, exercises no less than a reasonable standard of care, to safeguard such terms and to protect them against disclosure, misuse, espionage, loss and theft.

 

Section 6.3    Non-Competition; Non-Solicitation; and Non-Disclosure.

 

(a)    In consideration of the payment or delivery of the Purchase Price, and to further induce Buyer to enter into this Agreement, each Seller agrees that, for a period commencing on the Closing Date and continuing for a period of five (5) years from the Closing Date (the “Restricted Period”), except on behalf of the Company and Amtran, such Seller will not, and will not permit any of its Affiliates to, directly or indirectly, either acting on its own behalf or through or in connection with any Person, engage in, invest in or derive any profit from (or participate as employee, agent, consultant, owner, lender, securityholder, director, manager, partner, member or in any other individual or representative capacity in any business which engages in, invests in or derives any profit from) Restricted Activities (as defined below) anywhere in the world. Notwithstanding the foregoing, this Section 6.3(a) shall not restrict the passive ownership by any Seller or any of its Affiliates of (i) less than an aggregate of two percent (2%) of any class of stock of a Person engaged, directly or indirectly, in Restricted Activities, or (ii) undertaking any business or investment which has been consented to in writing by or on behalf of Buyer after Closing.

 

 

(b)    Without limiting the generality of the provisions of Section 6.3(a) above, each Seller agrees that, during the Restricted Period, except on behalf of the Company and Amtran, such Seller will not, and will not permit any of its Affiliates to, directly or indirectly, either acting on its own behalf or through or in connection with any Person solicit, call on or service (or participate as employee, agent, consultant, owner, lender, securityholder, director, manager, partner, member or in any other individual or representative capacity in any business which solicits, calls on or services), business constituting Restricted Activities from any Person that is or was a supplier or customer of the Acquired Business or any portion thereof during the twelve (12) month period preceding the Closing Date, or from any successor in interest to any such Person, in any case for the purpose of (i) securing business or contracts related to the Restricted Activities or any portion thereof or (ii) interfering with the relationship between such Person and the Company or Amtran.

 

(c)    During the Restricted Period, except on behalf of the Company and Amtran, each Seller shall not, and shall not permit any of its Affiliates to, directly or indirectly, hire or solicit (or participate as an employee, agent, consultant, owner, securityholder, director, manager, partner, member or in any other individual or representative capacity in any business that hires or solicits) any employee or consultant of the Company or Amtran on the date hereof or within the twelve (12) months immediately preceding the Closing Date, or encourage or induce any such employee or consultant to leave such employment or engagement or hire any such employee or consultant who has left such employment or engagement; provided, that nothing in this Section 6.3(c) shall prevent such Selling Party or any of its Affiliates from (x) publishing a general solicitation which is not directed specifically to any such employees, or (y) hiring (i) any employee whose employment has been terminated by the Company or Buyer without cause, (ii) after 90 days from the date of termination of employment, any employee whose employment has been terminated by the employee without any violation of this Section 6.3, or (iii) hiring, soliciting, or conducting business with any consultant of a Seller or its Affiliates outside and unrelated to the Restricted Activities.

 

(d)    Each Seller acknowledges and agrees that the covenants and restrictions contained in this Section 6.3 are an essential element of Buyer’s agreeing to acquire the Securities and pay or deliver the Purchase Price as set forth herein, and that Buyer would not have done so but for the agreement by such Seller to comply with the terms and provisions of this Section 6.3. Each Seller further acknowledges and agrees that the covenants set forth in this Section 6.3 are reasonable and necessary for the protection of Buyer’s business interests, that the covenants set forth in this Section 6.3 will not interfere with the ability of any Person restricted hereby to earn a living, that irreparable injury may result to Buyer if such Seller breaches any of the terms of this Section 6.3, and that in the event of an actual or threatened breach of any of the provisions contained in this Section 6.3, Buyer will have no adequate remedy at Law. Each Seller accordingly agrees that in the event of any actual or threatened breach of any of the provisions contained in this Section 6.3, Buyer shall be entitled to injunctive and other equitable relief, without (i) the posting of any bond or other security, (ii) the necessity of showing actual damages and (iii) the necessity of showing that monetary damages are an inadequate remedy. Nothing contained herein shall be construed as prohibiting Buyer from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of any damages that it is able to prove. Each Seller shall be liable for any breach by its Affiliates of this Section 6.3.

 

 

(e)    Each Seller has consulted with legal counsel regarding the provisions of this Section 6.3 and based on such consultation has determined and hereby acknowledges that the covenants and restrictions in this Section 6.3 are reasonable in terms of duration, scope and area restrictions and are necessary to protect the goodwill of Buyer’s business and the substantial investment in the Acquired Business made by Buyer hereunder. However, if any provision of this Section 6.3 is held to be invalid or unenforceable by reason of the geographic or business scope or duration thereof, the court or other tribunal is hereby directed to construe and enforce this Section 6.3 as if the geographic or business scope or the duration or such provision has been more narrowly drawn as so not to be invalid or unenforceable, and such invalidity or unenforceability shall not affect or render invalid or unenforceable any other provision of this Agreement. Each Seller further acknowledges and agrees that the covenants and restrictions in this Section 6.3 are being entered into by such Person in connection with the direct or indirect sale by such Person of the goodwill of the Acquired Business pursuant to this Agreement and not directly or indirectly in connection with any employment or other relationship with any Seller, the Company, Amtran, Buyer, or Buyer Parent.

 

(f)    For purposes of this Section 6.3, the term “Restricted Activities” means the business of manufacturing and distributing low voltage and medium voltage instrument transformers (which shall include current transformers and voltage transformers, but exclude low voltage current transformers offered and sold by Amgis LLC as of the date of this Agreement). Notwithstanding the foregoing, each Seller agrees that during the Restricted Period, such Seller shall not take an active role in the management or operations of Amgis LLC.

 

Section 6.4    Tax Matters.

 

(a)    Tax Returns. Each Seller shall timely prepare (or cause to be prepared) at Seller’s sole cost and expense, and file (or cause to be filed), all Income Tax Returns of Seller and the Company for all Pre-Closing Periods that are required to be filed after the Closing Date (the “Seller Prepared Returns”), and each such Seller Prepared Return shall be prepared in a manner consistent with past practice except as required by Applicable Law. Each Seller shall provide each Seller Prepared Return to Buyer for review and comment no later than thirty (30) days before the due date of such Seller Prepared Return. The Selling Parties shall pay all Taxes due with respect to any Seller Prepared Return. Each Seller shall consider in good faith any reasonable comments provided in writing by Buyer to such Seller at least five (5) days prior to the due date (taking into account any valid extensions) for filing such Seller Prepared Return. If any Seller and Buyer are unable to resolve any dispute regarding a Seller Prepared Return submitted by such Seller to Buyer pursuant to this Section 6.4(a), the dispute shall be resolved by the Independent Accounting Firm in accordance with Section 2.6(c), mutatis mutandis.

 

 

(b)    Allocation of Straddle Period Taxes. In the case of a Straddle Period, and subject to Section 6.4(d), the portion of Taxes of the Company or Amtran attributable to such Straddle Period that are allocated to the Pre-Closing Period of such Straddle Period shall be determined as follows: (x) in the case of any real property, personal property, ad valorem or similar Taxes, on a ratable daily basis, and (y) in the case of all other Taxes, including income and franchise Taxes, measured by, or based upon, net income or gross receipts, on an interim closing of the books of the Company or Amtran as of the close of business on the Closing Date (provided that exemptions, allowances or deductions that are calculated on an annual basis shall be allocated between the period ending on the Closing Date and the period after the Closing Date in proportion to the number of days in each such period). Notwithstanding the foregoing, for purposes of this Agreement, in connection with determining the Taxes of the Company or Amtran for any Pre-Closing Period, (i) the taxable year of any Subsidiary or former Subsidiary of the Company or Amtran shall be deemed to have closed on the Closing Date, (ii) exemptions, allowances or deductions that are calculated on an annual basis (including depreciation and amortization deductions) shall be allocated between the period ending on the Closing Date and the period beginning after the Closing Date in proportion to the number of days in each period, (iii) any Transaction Costs that are taken into account as a reduction in the Purchase Price shall, to the maximum extent permitted by Law, be allocated to the Pre-Closing Period, and (iv) any Damages attributable, related to or arising in connection with the embezzlement of the Company’s and Amtran’s assets by their former controller during or prior to the Financial Information Date shall be taken into account when computing the Straddle Period Taxes of Company and Amtran and shall, to the maximum extent permitted by Law, be allocated to the Pre-Closing Period, such that Selling Parties are entitled to 100% of any refund received by the Company and 60% of any refund received by Amtran (whether in cash or as a credit against or offset to any Tax) received by Buyer, Company, Amtran, or any of their Affiliates on account of such Loss in accordance with Section 6.4(d), and any Taxes subsequently imposed on the Company or Amtran for wrongfully taking into account any such Damages for the Pre-Closing Period shall be treated as Pre-Closing Taxes for purposes of Section 7.2(c). Buyer shall take or cause Company and Amtran to take such further actions, with respect to Damages described in clause (iv) of the immediately preceding sentence and pursuant to Section 6.5, as Seller Representative may reasonably request, all at the sole expense of the Selling Parties.

 

(c)    Tax Controversies.

 

(i)    Buyer shall deliver a written notice to the Seller Representative promptly following any demand, claim, or notice of commencement of a claim, proposed adjustment, assessment, audit, examination or other administrative or court proceeding with respect to Taxes of the Company or Amtran for which the Selling Parties may be liable pursuant to Article VII (“Tax Contest”); provided, however, that the failure or delay to so notify the Seller Representative shall not relieve any Seller of any obligation or Liability that such Seller may have to Buyer, except to the extent that such Seller demonstrates that such Seller is materially and adversely prejudiced thereby.

 

(ii)    Buyer shall control any Tax Contest; provided, however, the relevant Seller at such Seller’s sole cost and expense shall (x) control any Tax Contest that relates solely to Income Tax Returns of the Company with respect to a Pre-Closing Period (a “Income Tax Return Contest”); and (y) have the right to participate in any Tax Contest to the extent it relates solely to Pre-Closing Taxes. With respect to Tax Contests that are not Income Tax Return Contests, Buyer (A) shall keep Seller Representative reasonably informed regarding the status of any such Tax Contest to the extent it relates to Pre-Closing Taxes; and (B) shall not, and shall not allow the Company or Amtran, to settle, resolve, or abandon any such Tax Contest as it relates to Pre-Closing Taxes for a Pre-Closing Period without the prior written consent of the Seller Representative (which shall not be unreasonably withheld, delayed, or conditioned); provided, however, that Buyer may, without the written consent of Seller Representative, enter into such a settlement, resolution, or abandonment if Buyer foregoes indemnification under ARTICLE VII of this Agreement with respect to the Pre-Closing Taxes that are subject to such Tax Contest.

 

 

(iii)    The relevant Seller shall (A) keep Buyer reasonably informed regarding the status of any Income Tax Return Contest; (B) allow Buyer and the Company or Amtran to participate in such Income Tax Return Contest; and (C) not settle, resolve, or abandon any such Income Tax Return Contest without the prior written consent of Buyer (which shall not be unreasonably withheld, delayed, or conditioned).

 

(iv)    Notwithstanding anything to the contrary contained in this Agreement, the procedures for all Tax Contests shall be governed by this Section 6.4(c) (and not Section 7.2).

 

(d)    Tax Refunds.

 

(i)    Notwithstanding any other provision of this Agreement, the Selling Parties shall be entitled to any refund not included as an asset in Company Closing Working Capital (whether in cash or as a credit against or offset to any Tax) received by Buyer or an Affiliate (including the Company and Amtran) after the Closing with respect to Taxes of the Company or Amtran attributable to the Pre-Closing Period (including refunds for income Taxes, but excluding the GST Refund); provided that refunds of Taxes for a Straddle Period shall be apportioned in accordance with Section 6.4(b). Buyer and the Company will take all reasonable steps in connection with obtaining any refund of such Taxes with respect to the Company or Amtran (whether in cash or as a credit against or offset to any Tax). Any such amount (net of Buyer’s or its Affiliate’s out-of-pocket expenses (including Taxes) and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund)) shall be paid or cause to be paid by Buyer to Seller within ten (10) Business Days after such refund is received. Upon the request of Buyer, the Selling Parties shall as a joint and several obligation repay Buyer the amount paid over pursuant to this paragraph (d) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that Buyer or an Affiliate (including the Company and Amtran) is required to repay such refund to such Governmental Authority.

 

(ii)    Without prejudice to the generality of (i) above, up to expiry of the Refund Period, the Seller 1 shall within five (5) days after the expiry of each quarter of the Financial Year provide adequate details and evidences of the GST Refunds received by Company and Amtran in the immediately preceding quarter. Within 3 (three) Business Day from the expiry of the Refund Period, Seller 1 shall provide the Buyer with the aggregate amounts of GST Refunds received by the Company and Amtran (“Refund Notice”). If the GST Refund, as finally set out in the Refund Notice, is less than the Target GST Refund, then the Selling Parties shall pay or cause to be paid to the Buyer the amounts by which the GST Refund is less than the Target GST Refund. If the GST Refund, as finally set out in the Refund Notice, is greater than the Target GST Refund, then the Buyer shall pay or cause to be paid to the Selling Parties the amounts by which the GST Refund is greater than the Target GST Refund, in each case, within 3 (three) Business Days from the date of the Refund Notice. Such payment shall be made by the Selling Parties and/or Buyer, by way of release of amounts remaining in the Adjustment Escrow.

 

 

(e)    Transfer Taxes. Buyer on the one hand and the Selling Parties on the other hand shall each be responsible for one-half of any all Transfer Taxes and shall reimburse each other for any such obligations due. Buyer shall file (or cause to be filed) all Tax Returns and other documentation required to be filed with respect to Transfer Taxes.

 

(f)    Post-Closing Actions. Except as otherwise expressly provided herein or with the prior written consent of the Seller Representative, which consent shall not be unreasonably withheld, delayed, or conditioned, Buyer shall not, and shall cause its Affiliates (including the Company and Amtran) not to, (i) file any amended Income Tax Return (including amended Tax Return or claim for Tax refund with respect to an Income Tax Return) of the Company or Amtran for a Pre-Closing Period, except as otherwise provided by Applicable Law, (ii) make or change any Tax election of the Company with respect to a Income Tax Return for a Pre-Closing Period, or (iii) waive or extend the applicable statute of limitations with respect to any Income Tax Return (including amended Tax Return or claim for Tax refund with respect to an Income Tax Return) of the Company or Amtran for a Pre-Closing Period.

 

(g)    Tax Cooperation. Each Party shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns pursuant to Section 6.4(a) and Section 6.4(e) and any Tax Contests with respect to the Company or Amtran. Such cooperation shall include the retention and (upon the other Party’s request) the provision of records and information that are reasonably relevant to any such Tax Contest and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Parties further agree, upon request, to use their commercially reasonable efforts to obtain any certificate or other document from any Taxing Authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including with respect to the transactions contemplated by this Agreement). Buyer and each Seller agree (i) to retain all books and records with respect to Tax matters pertinent to the Company or Amtran relating to a Pre-Closing Period until the expiration of the statute of limitations (and, to the extent notified by Buyer or Seller, any extensions thereof) of the respective Tax periods, and to abide by all record retention agreements entered into with any Taxing Authority, and (ii) to give the other Party reasonable written notice prior to destroying or discarding any such books and records and, if the other Party so requests, to allow the other Party to take possession of such books and records.

 

(h)    Conflict. In the event of a conflict between any of the provisions of this Section 6.4 and any other provisions of this Agreement, the provisions of this Section 6.4 shall control.

 

(i)    Consolidated Group Tax Matters. Notwithstanding anything in this Agreement (including this Section 6.4) to the contrary, (i) Buyer shall not be required to provide Selling Parties or any of their respective Affiliates or representatives with access to, or copies of, any information, books, or records (including Tax Returns) that relate to a Combined Tax, or any other information, books or records (including Tax Returns) that include Buyer or any Subsidiary of Buyer, (ii) Selling Parties and their respective Affiliates and representatives shall not be entitled to any rights with respect to any Tax Contest relating to a Combined Tax, including any participation rights or consent rights, and (iii) Selling Parties and their respective Affiliates and representatives shall not be entitled to any rights with respect to Tax Returns relating to Combined Taxes. “Combined Tax” means any Tax with respect to which Buyer has filed or will file a Tax Return on an affiliated, combined, consolidated, unitary or similar basis.

 

 

Section 6.5    Further Assurances. From and after the Closing, if any further action is necessary to carry out the purposes of this Agreement, the Parties shall take such further action (including the execution and delivery of such further documents and instruments) as any Party may reasonably request, all at the sole expense of the requesting Party (except as otherwise expressly set forth in this Agreement).

 

Section 6.6    Retention of Books and Records. Selling Parties may retain copies of any or all of the books and records relating to the business or operations of the Company and Amtran prior to the Closing. In addition, Buyer shall cause the Company and Amtran to retain all books, ledgers, files, reports, plans, operating records and any other material documents pertaining to the Company and Amtran in existence at the Closing that are required to be retained under current retention policies for a period of not less than seven years from the Closing Date, and to make the same available after the Closing for inspection and copying by Selling Parties or their Representatives at Selling Parties’ expense, during regular business hours and upon reasonable request and upon reasonable advance notice.

 

Section 6.7    Withholding Taxes. Buyer, the Company, Amtran, and any other applicable withholding agent will be entitled to deduct and withhold from any payment otherwise payable pursuant to this Agreement the amounts required to be deducted and withheld under any Applicable Law with respect to the making of such payment. To the extent that amounts are so deducted or withheld, and timely paid over to the appropriate Taxing Authority, such amounts will be treated for all purposes of this Agreement as having been paid to relevant Seller or such other Person in respect of whom such deduction or withholding was made.

 

Section 6.8    Employee Matters.

 

(a)    Each Continuing Employee shall be given credit for all service with the Company, Amtran and their respective predecessors under any employee benefit plan, program or arrangement of Buyer or its Affiliates in which such Continuing Employee is eligible to participate, including any such plans providing vacation, sick pay, severance and retirement benefits maintained by Buyer or its Affiliates for purposes of eligibility, vesting and entitlement to benefits, including for severance benefits and vacation entitlement (but not for accrual of pension benefits), to the same extent as if such service had been performed for Buyer or any of its Affiliates. In the event of any change in the welfare benefits provided to Continuing Employees following the Closing and in the plan year in which the Closing occurs, Buyer shall, and shall cause the Company and Amtran to, as applicable, (i) waive all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Continuing Employees under any such welfare plan provided to the Continuing Employees, except to the extent that such conditions, exclusions or waiting periods would apply in the absence of such change, and (ii) provide each Continuing Employee with credit, in the calendar year in which the Closing occurs, for any co-payments and deductibles paid prior to any such change in satisfying any applicable deductible or out of pocket requirements after such change. Following the Closing, each Continuing Employee will be eligible to use any accrued but unused vacation or other paid time off benefits in place as of the Closing.

 

(b)    Seller 3 shall not make any claim or demand against the Company or Amtran for any contributions under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952.

 

 

(c)    Notwithstanding anything in this Section 6.8 or otherwise in this Agreement to the contrary, no provision of this Agreement is intended to, or does, constitute the establishment or adoption of, or amendment to, any employee benefit plan and no person shall have any claim or cause of action in respect of any provision of this Agreement as it relates to any such employee benefit plan or otherwise.

 

Section 6.9    Indemnification of Managers, Directors and Officers of the Company and Amtran.

 

(a)    Buyer agrees on behalf of itself, and the Company and Amtran as of the Closing, that all rights to indemnification, advancement of expenses and exculpation by the Company or Amtran, as applicable, now existing in favor of each Person who is now, or has been at any time prior to the date hereof or who becomes prior to the Closing Date, an officer, manager or director of the Company or Amtran, as provided in the certificate of formation or bylaws of the Company or Amtran (or equivalent governing documents), in each case as in effect on the date of this Agreement shall survive the Closing Date and shall continue in full force and effect in accordance with their respective terms, provided, however, that the foregoing obligations shall not in any way limit Buyer Indemnities’ rights under ARTICLE VII for Buyer Indemnified Losses.

 

(b)    Buyer agrees on behalf of itself, and the Company and Amtran as of the Closing, that, for a period of six years after the Closing, neither Buyer nor the Company and Amtran shall, and Buyer shall cause its successors not to, amend, repeal or modify any provision in its Organizational Documents in a manner that would adversely affect the rights and/or exculpation or indemnification of present or former directors, managers, officers, employees or agents of the Company and Amtran, it being the intent of the Parties that the directors, managers, officers, employees or agents of the Company and Amtran prior to the Closing shall continue thereafter to be entitled to such rights of exculpation and indemnification to the fullest extent permitted under Applicable Laws until at least the sixth anniversary of the Closing Date.

 

(c)    The obligations of Buyer under this Section 6.9(b) shall not be terminated or modified in such a manner as to adversely affect any director, manager or officer to whom this Section 6.9 applies without the consent of such affected director, manager, or officer (it being expressly agreed that the directors, manager, and officers to whom this Section 6.9 applies shall be third-party beneficiaries of Section 6.9(b), each of whom may enforce the provisions of this Section 6.9).

 

(d)    In the event Buyer or the Buyer Parent, the Company, Amtran or any of their respective successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then, and in either such case, proper provision shall be made so that the successors and assigns of Buyer, Buyer Parent, the Company, or Amtran, as the case may be, shall assume all of the obligations set forth in this Section 6.9.

 

 

Section 6.10    Certain Waivers and Releases. Effective upon the Closing, each Seller, on behalf of itself or themselves and their Affiliates, successors and assigns, hereby irrevocably waives, releases and discharges the Company, Amtran and their respective Affiliates and each of their respective direct or indirect equityholders and Representatives from any and all actions, causes of action, choses in action, cases, claims, suits, debts, dues, damages, judgments and Liabilities, of any nature whatsoever arising out of or relating to any acts, omissions, claims, transactions or occurrences up to and including the Closing Date that are connected with or pertain to the ownership, management, operation or conduct of the Acquired Business or the transactions contemplated by this Agreement, in each case whether absolute or contingent, liquidated or unliquidated, known or unknown, and whether arising under any agreement or understanding or otherwise, at law or equity, and no Seller or Seller Representative shall seek to recover any amounts in connection therewith or thereunder from the Company, Amtran or any of their Affiliates; provided, however, that nothing in this Section 6.10 shall operate to release (A) any rights against, or obligations, or agreements of Buyer, Buyer Parent, the Company, and Amtran under this Agreement or any other Transaction Document, each of which will be enforceable in accordance with its terms; (B) any employee of the Company or Amtran who is not a Seller with respect to any Fraud; or (C) any rights of the Selling Parties in relation to the amounts, emoluments, or benefits due to them in relation to their employment or other contractual arrangements with the Company or Amtran.

 

Section 6.11    Obligations of Buyer Parent. Buyer Parent shall ensure that the Buyer undertakes all obligations of the Buyer under this Agreement fully and promptly and shall take all actions necessary to procure that the Buyer performs all of its agreements, covenants, and obligations under the Transaction Documents. Buyer Parent hereby absolutely, irrevocably and unconditionally guarantees to the Sellers the full and punctual performance and satisfaction by Buyer of any and all obligations including payment obligations of Buyer under this Agreement and the Transaction Documents, including Buyer’s obligation to pay any amount or amounts due to the Sellers pursuant to Section 2.4 and Section 2.11 and the Seller Indemnitees pursuant to Section 7.3. The Buyer Parent shall be liable for any breaches of the Buyer’s covenants, representations, warranties, undertakings, and obligations of the Buyer under this Agreement or the Transaction Documents.

 

Section 6.12    Issuance of Stock Consideration; Lock-Up Restrictions; Removal of Restrictions(s).

 

(a)    If the approval of the Reserve Bank of India is received pursuant to Section 2.9(a)(i) above before the first anniversary of the Closing Date, then, prior to Second Closing, Buyer Parent shall deliver a copy of the letter delivered to Buyer Parent’s transfer agent, Computershare, Inc., instructing the transfer agent to issue the Stock Consideration to Continuing Selling Parties, including all instructions or legends imposing transfer restrictions applicable to the Stock Consideration, as mutually agreed by Buyer and Seller. Immediately following the Second Closing, Buyer Parent shall deliver or cause its transfer agent to deliver a screen shot to Seller Representative evidencing that the shares comprising the Stock Consideration have been validly issued to Continuing Selling Parties in book-entry form by Buyer’s transfer agent on its books and records followed by a written statement to that effect within one (1) Business Day after the Second Closing.

 

 

(b)    Each of the Continuing Selling Parties acknowledges and agrees that Buyer Parent has certain policies that may prohibit employees of Buyer Parent and its Affiliates from selling or transferring shares of Buyer Parent’s common stock at certain times (“Buyer’s Black-Out Policies”). Each of the Continuing Selling Parties agrees that the resale of the Stock Consideration issued in accordance with Section 2.11(a) (which for the avoidance of doubt shall include securities issued with respect to the Stock Consideration in connection with any stock splits, stock dividends, and the like), shall be according to the following schedule, but subject to compliance with Buyer’s Black-Out Policies, if applicable:

 

(i)    beginning on the Second Closing Date through the six-month anniversary thereafter (the “Six-Month Lock-Up Period”), each of the Continuing Selling Parties shall not be entitled to resell or transfer any of the Stock Consideration;

 

(ii)    for the period commencing after the expiration of the Six-Month Lock-Up Period and continuing through the one-year anniversary of the Closing Date (the “One-Year Lock-Up Period”), each of the Continuing Selling Parties shall be entitled to resell or transfer up-to twenty percent (20%) of the Stock Consideration in compliance with Rule 144 of the Securities Act or pursuant to other applicable securities Laws;

 

(iii)    for the period commencing after the expiration of the One-Year Lock-Up Period and continuing through the two-year anniversary of the Closing Date (the “Two-Year Lock-Up Period”), each of the Continuing Selling Parties and its Permitted Transferee(s) shall be entitled to resell or transfer up-to forty-five percent (45%) of the Stock Consideration, on a cumulative basis;

 

(iv)    for the period commencing after the expiration of the Two-Year Lock-Up Period and continuing through the three-year anniversary of the Closing Date (the “Three-Year Lock-Up Period”), each of the Continuing Selling Parties and its Permitted Transferee(s) shall be entitled to sell up-to seventy percent (70%) of the Stock Consideration, on a cumulative basis; and

 

(v)    for the period commencing after the expiration of the Three-Year Lock-Up Period, each of the Continuing Selling Parties and its Permitted Transferee(s) shall be entitled to resell or transfer any or all of the remaining, unsold Stock Consideration.

 

(c)    Following expiration of an applicable Lock-Up Period, Buyer Parent hereby agrees to use its commercially reasonable efforts, and without set-off or deduction of any kind, to promptly cause its transfer agent to remove all stock transfer restrictions or to otherwise issue and deliver new certificates without restrictive legends with respect to all or a portion of shares of Buyer Parent’s common stock comprising Stock Consideration which are no longer subject to such Lock-Up Period, within four (4) Business Days of receipt of a written request from Seller or its Permitted Transferee. The written request from Seller or its Permitted Transferee shall contain such normal and customary certifications from Seller or its Permitted Transferee as may be reasonably required by Buyer Parent, such as representations from the holder as to how long the holder has held the applicable securities, how and when the holder purchased or received the applicable securities, and whether the holder is an “affiliate” of Buyer Parent, and if applicable with respect to Stock Consideration that is past the Six-Month Lock-Up Period but not past the One-Year Lock-Up Period, any other sales of securities made by holder within the past three months, along with a certificate from the holder’s broker as to the manner of sale, along with a copy of the restricted security, if then certificated, and a copy of the Form 144 filed by such holder, if applicable.

 

 

(d)    Notwithstanding anything contained in this Section 6.12 or any other provision to the contrary, in the event of any Continuing Selling Parties’ death, the Stock Consideration held by such Seller shall be transferred to such Seller’s legal heir or nominee in accordance with the provisions of the Applicable Laws, subject to such Continuing Selling Party’s legal heir providing to Buyer Parent testamentary documentation executed by such Continuing Selling Party or other documentation confirming such Continuing Selling Party’s death as may be reasonably requested by Buyer Parent. It is further clarified that the restrictions applicable Lock-Up Period as set forth in this Section 6.12 and the permissions under Section 6.13 shall continue to apply to such legal heir or nominee.

 

Section 6.13    Permitted Transfers. Notwithstanding anything to the contrary contained in this Agreement but subject to any Applicable Law and to Buyer’s Black-Out Policies, after the One-Year Lock-Up Period, any of the Continuing Selling Parties may (x) transfer and assign, upon written notice to Buyer Parent, all or any shares comprising Stock Consideration still held by such Continuing Selling Party (i) to any Permitted Transferee, or (ii) (a) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual, or for estate planning purposes; (b) in the case of an individual, pursuant to a qualified domestic relations order; (c) in the case of an individual, by gift to a charitable organization; (d) in the case of an entity, by virtue of the laws of the jurisdiction of the entity’s organization and the entity’s organizational documents upon dissolution of the entity; or (e) pursuant to any liquidation, merger, share exchange or other similar transaction which results in all of Buyer Parent’s stockholders having the right to exchange their stock for cash, securities or other property subsequent to the Closing Date; provided, that, in connection with any transfer or assignment of such transferred Stock Consideration pursuant to clauses (x)(i), (x)(ii)(a), (x)(ii)(b), (x)(ii)(c), (x)(ii)(d), or (x)(ii)(e) above (each a “Permitted Transfer”), the restrictions and obligations contained in Section 6.12 will continue to apply to such transferred Stock Consideration after any such transfer or assignment and such transferee shall and prior to the expiration of the Three-Year Lock-Up Period execute and deliver a lock-up agreement substantially on the same terms contained in Section 6.12. Buyer Parent further agrees that upon written notice of a Permitted Transfer by any of the Continuing Selling Parties, that Buyer Parent will notify Buyer Parent’s transfer agent of such Permitted Transfer and Buyer Parent will cause its transfer agent to notate and reflect the transfer of the same on the book entry shares comprising such Stock Consideration.

 

Section 6.14    Rule 144 Compliance. With a view to making available to the holders of Rule 144 Securities the benefits of Rule 144 and any other rule or regulation of the SEC or any other applicable federal or state securities Laws that may at any time permit a holder to sell securities of Buyer Parent to the public without registration, Buyer Parent shall use its commercially reasonable efforts:

 

(a)    to make and keep public information available, as those terms are understood and defined in Rule 144, at all times after the Second Closing;

 

(b)    to file with the SEC in a timely manner all reports and other documents required of Buyer under the Securities Act and the Exchange Act, at any time after the Second Closing; and

 

(c)    to furnish to any holder so long as the holder owns Rule 144 Securities, promptly upon request, a written statement by Buyer Parent as to its compliance with the reporting requirements of Rule 144 and of the Securities Act and the Exchange Act.

 

 

ARTICLE VII

SURVIVAL; INDEMNIFICATION;
LIMITATIONS ON INDEMNIFICATION AND CLAIMS

 

Section 7.1    Survival.

 

(a)    The representations and warranties of the Selling Parties, Continuing Selling Parties, Buyer, and Buyer Parent contained in this Agreement shall survive the Closing Date or Second Closing Date, as applicable, until the date that is eighteen (18) months following the Closing Date or Second Closing Date, as applicable, except that Seller Fundamental Representations and Buyer Fundamental Representations shall survive the Closing Date and Second Closing Date, as applicable, until the date that is thirty (30) days after the expiration of the applicable statute of limitations to which such representation applies, whereupon in each case such representations and warranties will terminate and expire (such applicable periods referred to above, the “Survival Period”). This Section 7.1‎ shall not limit any covenant or agreement in this Agreement which contemplates performance after the Closing or the Second Closing; provided, however, that the foregoing limitation shall not apply in the event of Fraud or any of the Specific Indemnities Matters.

 

(b)    Following the expiration of the applicable Survival Period, no Claim will or may be made or prosecuted through a Proceeding or otherwise, and no indemnification will or may be sought under this Article VII, by any Indemnified Party for a breach of a representation and warranty in this Agreement, provided, however, that the foregoing limitation shall not apply in the event of Fraud.

 

Section 7.2    Indemnification of Buyer Indemnitees. Subject to the applicable provisions of this Article VII, from and after the Closing, the Selling Parties shall indemnify and hold Harmless the Buyer Indemnitees, in each case without duplication, in the following manner:

 

(a)    The Selling Parties shall severally (with respect to itself and not on behalf of any other Selling Party) indemnify and hold harmless each Buyer Indemnitee against all Third-Party Claims and all Damages that arise from, are based on or relate to or otherwise are attributable to, without duplication, (i) for any breach of any representations and warranties by the Selling Parties (or any alleged breach in writing in connection with a Third-Party Claim) set forth in Article III, or (ii) Fraud by the Selling Parties.

 

(b)    Each Indemnifying Seller shall, jointly and severally, indemnify and hold harmless each Buyer Indemnitee against all Third-Party Claims and all Damages that arise from, are based on or relate to or otherwise are attributable to, without duplication, in the manner specified below:

 

(i)    for any breach of any representations and warranties of the Selling Parties (or any alleged breach in writing in connection with a Third-Party Claim) set forth in Article IV; provided, however, that, any Damages or Third-Party Claims that arise from, are based on or relate to or otherwise are attributable to, any breach of any representations and warranties of the Selling Parties relating to Amtran (or any alleged, in writing, in connection with a Third-Party Claim) shall be indemnified and held harmless in accordance with this Section 7.2 to the full extent and amount of such Damages or Third-Party Claims, on a pro rata basis to Company’s holdings in Amtran;

 

 

(ii)    for any breach or nonfulfillment of any covenant or agreement on the part of the Selling Parties under this Agreement;

 

(iii)    for any Pre-Closing Taxes (other than Transfer Taxes for which Buyer is responsible under Section 6.4(e)) imposed on the Company, or any Pre-Closing Taxes (other than Transfer Taxes for which Buyer is responsible under Section 6.4(e)) imposed on Amtran, on a pro rata basis to Company’s holdings in Amtran;

 

(iv)    for any Damages incurred by Buyer or its Affiliates following the Closing with respect to the any information submitted prior to the Closing by the Selling Parties to a Governmental Authority (including any information which not disclosed to such Governmental Authority, but which should have been properly disclosed) in connection with obtaining the Consent of such Governmental Authority to the transactions contemplated by this Agreement; and

 

(v)    For any Damages incurred by Buyer or its Affiliates following the Closing with respect to the matter set forth in Section 7.2 of the Disclosure Schedules.

 

(c)    Seller 3, severally (and not jointly with any other Seller), for any amount which the Buyer is mandated to pay to the appropriate Indian Taxing Authority (only to the extent of amounts exceeding the amounts already deducted and withheld under the provisions of the Income-tax Act, 1961) in connection with the Estimated Cash Consideration paid by Buyer to Seller 3.

 

(each such Third-Party Claim or Damage referred to in this sentence being a “Buyer Indemnified Loss”).

 

Section 7.3    Indemnification of Seller Indemnitees. Subject to the applicable provisions of this Article VII, from and after the Closing, Buyer and Buyer Parent will indemnify and hold harmless each Seller Indemnitee against all Third-Party Claims and all Damages that arise from, are based on or relate or otherwise are attributable to, without duplication: (a) any breach by Buyer or Buyer Parent of its representations and warranties (or any alleged breach in connection with a Third-Party Claim) set forth in Article V; (b) any breach or nonfulfillment of any covenant or agreement on the part of Buyer or Buyer Parent under this Agreement; (c) any and all Transfer Taxes for which Buyer is responsible in accordance with Section 6.4(e) hereof and (d) ninety point one zero percent (90.10%) to 100% (based on percentage of Securities of the Company continued to be held by Selling Parties at such time) of any and all Taxes imposed on the Company or Amtran for any Tax period (or portion thereof) that begins after the Closing Date (determined in accordance with Section 6.4(b) for any Straddle Period) and (e) any information submitted prior to the Closing by Buyer or Buyer Parent to a Governmental Authority (including any information which not disclosed to such Governmental Authority, but which should have been properly disclosed) in connection with obtaining the Consent of such Governmental Authority to the transactions contemplated by this Agreement (each such Third-Party Claim or Damage referred to in this sentence being a “Seller Indemnified Loss”).

 

 

Section 7.4    Conditions of Indemnification.

 

(a)    Subject to Section 6.4(c) which shall exclusively govern all Tax matters covered thereby, all Claims for indemnification under ‎Section 7.2 or Section 7.3 shall be asserted and resolved as this Section 7.4 provides.

 

(b)    In the event a Party (an “Indemnified Party”) (i) believes in good faith that it has suffered or incurred Damages or (ii) learns of or receives notice of any commencement of any Proceeding, the written assertion of any Third-Party Claim or the imposition of any penalty, assessment or judgment, in each case for which indemnity may be sought pursuant to Section 7.2 or Section 7.3, and such Indemnified Party intends to seek indemnity from another Party (the “Indemnifying Party”) pursuant to Section 7.2 or Section 7.3, such Indemnified Party shall provide the Indemnifying Party with written notice (a “Claim Notice”) of such Proceeding, Third-Party Claim, penalty, assessment or judgment promptly (and in no event later than 10 days) after the Indemnified Party learns of such Damages or receives notice of such Proceeding, Third-Party Claim, penalty, assessment or judgment; provided however that any Claim Notice must be received by the Indemnifying Party prior to the expiration of the applicable Survival Period. Each Claim Notice shall provide a copy of all papers served with respect to that Claim (if any), and describe with reasonable detail the basis of the Direct Claim (as defined in Section 7.6(a) below) or Third-Party Claim, an estimate of the amount of damages attributable to that Claim to the extent feasible (which estimate will not be conclusive of the final amount of that Claim), any other remedy sought thereunder and the basis for the Indemnified Party’s request for indemnification under this Agreement. The failure to promptly deliver a Claim Notice will not relieve the Indemnifying Party of its obligations to the Indemnified Party with respect to the related Direct Claim or Third-Party Claim (A) unless the Indemnified Party fails to deliver a valid Claim Notice prior to expiration of the applicable Survival Period or (B) unless and only to the extent that the Indemnifying Party is materially prejudiced thereby.

 

 

(c)    At any time after receipt of a Claim Notice from an Indemnified Party with respect to a Third-Party Claim, the Indemnifying Party may elect to assume and control the defense of any such Third-Party Claim or any Proceeding resulting therefrom with counsel reasonably satisfactory to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its election to assume and control the defense of a Third-Party Claim or any Proceeding resulting therefrom, the Indemnifying Party shall not, so long as the Indemnifying Party diligently conducts such defense, be liable to the Indemnified Party under this Article VII for any fees of other counsel or any other expenses with respect to the defense of such Third-Party Claim, in each case subsequently incurred by the Indemnified Party in connection with the defense of such Third-Party Claim. In the event that an Indemnifying Party assumes the defense of a Third-Party Claim, then the Indemnifying Party will have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third-Party Claim in the name and on behalf of the Indemnified Party, and the Indemnified Party will cooperate reasonably with the Indemnifying Party in all aspects of any investigation, defense, pretrial activities, trial, compromise, settlement or discharge of such Third-Party Claim, including by providing the Indemnifying Party with all reasonably requested information and reasonable access to employees and officers (including as witnesses) and the right to inspect and copy documents and records or other information; provided, however, the Indemnifying Party will not consent to any judgment or enter into any settlement with respect to any Third-Party Claim without the prior written consent of such Indemnified Party (which consent shall not be unreasonably withheld, delayed or conditioned) that (i) does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a full and unconditional release from all Liability in respect of such claim or litigation and all other claims arising out of the same or similar facts or circumstances, (ii) involves any finding or admission of any fault on the part of an Indemnified Party, or (iii) imposes any equitable relief or other non-monetary obligations on any Indemnified Party. Notwithstanding anything in this Article VII to the contrary, (i) the Indemnifying Party shall not be entitled to assume the defense of any Third-Party Claim if the defense and conduct of the Third-Party Claim is handled by the Indemnifying Party’s insurer and (ii) neither the Indemnifying Party nor the Indemnified Party shall settle, compromise or make any other disposition of any Third-Party Claim which would or might result in any Liability to the Indemnified Party or the Indemnifying Party, respectively, under this Article VII without the written consent of such other Party (which shall not be unreasonably withheld, delayed or conditioned) unless the sole relief provided is monetary damages that are paid in full by the Party agreeing to such settlement, compromise or disposition. All costs and expenses incurred by the Indemnifying Party in defending any Third-Party Claim shall be counted in calculating the amounts set forth in Section 7.7(a) if the Third-Party Claim relates to a matter to which Section 7.7(a) applies. The Indemnified Party may participate in, but not control, any defense or settlement of any Third-Party Claim that the Indemnifying Party controls under this Section 7.4(c) and will bear its own costs and expenses with respect to that participation; provided, however, that (1) if the Third-Party Claim seeks any injunction or other equitable relief against the Indemnified Party, or (2) if the named parties to any such action (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party, and the Indemnified Party has been advised in writing by outside counsel that there is a conflict of interest which renders it inadvisable for one firm to represent the Indemnified Party and the Indemnifying Party, then the Indemnified Party may employ separate counsel at the reasonable expense of the Indemnifying Party (provided, that such counsel is limited to one separate firm of attorneys, in addition to one local counsel firm), and, on its written notification of that employment, the Indemnifying Party will not have the right to assume or continue the defense of that action on behalf of the Indemnified Party.

 

(d)    If the Indemnifying Party (i) elects not to defend the Indemnified Party under this Article VII or (ii) fails to notify the Indemnified Party that the Indemnifying Party elects to defend the Indemnified Party under ‎Section 7.4(c), then the Indemnified Party will have the right to defend, at the sole cost and expense of the Indemnifying Party (if the Indemnified Party is entitled to indemnification hereunder), the Third-Party Claim by all appropriate proceedings, which proceedings the Indemnified Party must promptly and vigorously prosecute to a final conclusion or settle. The Indemnified Party will have full control of such defense and proceedings; provided, however, the Indemnified Party will not enter into any settlement with respect to any Third-Party Claim that would result in payment of an amount for which the Indemnifying Party would be liable under this Article VII without the prior written consent of that Indemnifying Party (which consent shall not be unreasonably withheld, delayed or conditioned). Notwithstanding the foregoing, if it is determined that the Indemnifying Party does not have any Liability toward the Indemnified Party under this Article VII, then the Indemnifying Party will not be required to bear the costs and expenses of the Indemnified Party’s defense under this Section 7.4 or of the Indemnifying Party’s participation therein at the Indemnified Party’s request, and the Indemnified Party will reimburse the Indemnifying Party in full for all reasonable costs and expenses of that Third-Party Claim. The Indemnifying Party may participate in, but not control, any defense or settlement of any Third-Party Claim that the Indemnified Party controls under this Section 7.4(d), and the Indemnifying Party will bear its own costs and expenses with respect to that participation.

 

(e)    The Party assuming defense of the Third-Party Claim shall make available to the other Party all material records filed in any proceedings or any other relevant information at the reasonable request of the other Party, in relation to such Third-Party Claim, without expense (other than reimbursement of actual out-of-pocket expenses to deliver the aforesaid materials), subject to any confidentiality restrictions imposed by the court or tribunal hearing the proceeding(s).

 

 

Section 7.5    Payments by an Indemnifying Party. Payments of all amounts owing by an Indemnifying Party under this Article VII relating to a Third-Party Claim will be made within 30 days after the latest of (a) the settlement of that Third-Party Claim, (b) the expiration of the period for appeal of a final adjudication of that Third-Party Claim, or (c) the expiration of the period for appeal of a final adjudication of the Indemnifying Party’s Liability toward the Indemnified Party under this Agreement in respect of that Third-Party Claim, provided that in no event shall payment of amounts owing by an Indemnifying Party under this Article VII relating to a Third-Party Claim be made later than ten (10) days prior to the date the Indemnified Party is required to make payment as a result of such Third-Party Claim. Any and all payments due and owing from the Selling Parties under Section 7.5 or Section 7.6(a) shall be satisfied first from the Indemnification Escrow, without a requirement to replenish and second, from the Selling Parties, jointly and severally, in cash by check or wire transfer.

 

Section 7.6    Procedures for Direct Claims.

 

(a)    The Indemnifying Party shall have 30 days (the “Response Period”) after its receipt of a Claim Notice with respect to direct claims for indemnification against Buyer, Buyer Parent or the Selling Parties, respectively, under Section 7.2 or Section 7.3 of this Agreement that are not based upon Third-Party Claims (“Direct Claims”) to respond in writing to such Direct Claim, which response shall accept or reject the Direct Claim. If the Indemnifying Party does not so respond within the Response Period, the Indemnifying Party shall be deemed to have rejected such Direct Claim, in which case, the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement. The Indemnified Party shall make available such reasonably requested information and assistance (including reasonable access to the premises and personnel of the Company and Amtran (following advance written notice and during regular business hours) and the right to inspect and copy any accounts, documents, records or other information (subject to the execution and delivery of a confidentiality agreement on terms reasonably and customarily acceptable to parties in similar situations)) of the Company and Amtran as the Indemnifying Party or any of its Representatives may reasonably request.

 

(b)    Payments of all amounts owing by a Party pursuant to Section 7.6(a) will be made within thirty (30) days after the settlement, agreement or expiration of the period for appeal of a final adjudication of such Party’s Liability with respect to such amount under this Agreement, in the event such Party has timely disputed the Claim giving rise to the obligation to make such payment, as provided above. Subject to the Buyer Indemnitees’ compliance with the terms and provisions of this Article VII, including the obligation of the Buyer Indemnitees to use commercially reasonable efforts to recover any Buyer Indemnified Loss under any applicable insurance policies, any and all payments due and owing from Seller under Section 7.5 or Section 7.6(a) shall be satisfied first from the Indemnification Escrow, without a requirement to replenish, and second, from the Selling Parties, jointly and severally, in cash by check or wire transfer.

 

 

Section 7.7    Certain Limitations on Indemnification for Third-Party Claims and Direct Claims.

 

(a)    No indemnification shall be made by the Selling Parties pursuant to Section 7.2(a) and Section 7.2(b): (i) for any individual Buyer Indemnified Loss unless such individual Buyer Indemnified Loss exceeds the De Minimis Amount (and excluding any Specific Indemnities Matter (defined below), and (ii) unless and until the aggregate amount of Buyer Indemnified Losses permitted under clause (i) above (and excluding any Specific Indemnities Matter) exceed the Tipping Basket, in which event, indemnification shall be made by the Selling Parties starting with the first dollar of such Buyer Indemnified Losses in excess of fifty percent (50%) of the Tipping Basket. Notwithstanding anything to the contrary in the preceding sentence, indemnification by the Selling Parties for Damages for each of the matters set forth in Section 4.10, Section 4.11(b), Section 4.14(l), Section 4.16, Section 4.17(a)(ii), Section 4.17(a)(iv), Section 4.17(a)(vi), and Section 4.18(e) of the Disclosure Schedules (taken individually and not in conjunction with any other matter in each aforesaid Section or any other Section of the Disclosure Schedule, but includes any individual matter disclosed in the aforesaid Sections of the Disclosure Schedule by reference to another Section of the Disclosure Schedules; it being clarified that Damages for one or more Proceedings with respect to such individual matter shall be treated for the purposes of this non-obstante proviso as Damages for a single matter) (each such matter, a “Specific Indemnities Matter”) is subject to the following: (A) the Selling Parties shall not be liable to indemnify for a Specific Indemnities Matter unless the Damages for such individual Specific Indemnities Matter exceeds Two Hundred Fifty Thousand Dollars ( $250,000.00) (the “Specific Indemnities Loss Amount”); (B) once the Specific Indemnities Loss Amount has been reached for an individual Specific Indemnities Matter, indemnification can be claimed by any Buyer Indemnitees for such Specific Indemnities Matter starting with the first dollar of Damages for such Specific Indemnities Matter in excess of its Specific Indemnities Loss Amount; provided however, that the Selling Parties shall only be obligated to indemnify Buyer Indemnitees for 50% of the amount of Damages for such Specific Indemnities Matter that exceeds the Specific Indemnities Loss Amount, with Buyer, on behalf of itself, and its Affiliates, hereby agreeing to be liable for the remaining amount of Damages for such Specific Indemnities Matter in excess of its Specific Indemnities Loss Amount; and (C) Buyer shall consult with Seller Representative before choosing to incur out-of-pocket costs and expenses in respect of a Specific Indemnities Matter for which Buyer seeks indemnification hereunder, and Buyer shall consider any reasonable comments of Seller Representative with respect to Buyer’s plan to address such Specific Indemnities Matter; provided, however that if after such consultation Buyer and Seller Representative disagree on the plan to address the Specific Indemnities Matter, they will select a mutually agreed, independent third party expert on the subject matter of the Specific Indemnities Matter (neither Buyer nor Seller Representative to unreasonably withhold their consent to the selection of such expert) to advise them on a plan to address the Specific Indemnities Matter, with Buyer retaining the ultimate discretion on how to address the Specific Indemnities Matter if Buyer and Seller Representative continue to disagree after receiving the advice of such expert. In no event shall Damages for a Specific Indemnities Matter count against the De Minimis Amount or the Tipping Basket. In no event shall the disclosure of a Specific Indemnities Matter in the Disclosure Schedules or elsewhere limit Buyer Indemnities’ rights to indemnification hereunder. The maximum amount that the Selling Parties shall be required to pay pursuant to Section 7.2(a), Section 7.2(b), and Section 7.2(c) in respect of all Buyer Indemnified Losses shall not exceed the Damages Cap, after which point the Selling Parties shall have no obligation to indemnify Buyer Indemnitees from and against any further Buyer Indemnified Losses pursuant to Section 7.2(a), Section 7.2(b), and Section 7.2(c).

 

 

(b)    No indemnification shall be made by Buyer pursuant to Section 7.3(a) (i) for any individual Seller Indemnified Loss, unless such Seller Indemnified Loss exceeds the De Minimis Amount, in which event the full amount of such Buyer Indemnified Loss from the first dollar shall count toward the Tipping Basket and (ii) unless and until the aggregate amount of Seller Indemnified Losses permitted under clause (i) above exceed the Tipping Basket, in which event, indemnification shall be made by Buyer starting with the first dollar of such Seller Indemnified Losses, without regard to the Tipping Basket. The maximum amount that Buyer shall be required to pay pursuant to Section 7.3(a) in respect of all Seller Indemnified Losses shall not exceed the Damages Cap, after which point Buyer shall have no obligation to indemnify Seller Indemnitees from and against any further Seller Indemnified Losses pursuant to Section 7.3(a).

 

(c)    The limitations set forth in Section 7.7(a) and Section 7.7(b) shall not apply to (i) Buyer Indemnified Losses or Seller Indemnified Losses, respectively, based upon, arising out of, with respect to or by reason of any inaccuracy in or breach of any Seller Fundamental Representation or Buyer Fundamental Representation, (ii) Buyer Indemnified Losses under Section 7.2(b)(ii), (iii) or (iv) (iii) Seller Indemnified Losses under Section 7.3(b), (c), (d) or (e), or (iv) in the event of Fraud. Notwithstanding the preceding sentence, however, except in the event of Fraud, in no event shall any Person be entitled to indemnification under Section 7.2 or Section 7.3 for any amounts in excess of the Purchase Price.

 

(d)    The amount of any Buyer Indemnified Losses shall be reduced by any amount directly or indirectly received by a Buyer Indemnitee with respect thereto under any insurance coverage or from any other party alleged to be responsible therefor (net of costs of recovery and after giving effect to any applicable deduction or retention and insurance premiums attributable to such claims). Any Indemnified Party having a claim under Article VII shall make a good faith effort to recover any Damages from insurers of such Indemnified Party or its Affiliates under applicable insurance policies, in each case, as to reduce the amount of any indemnifiable Damages hereunder. If such a recovery is received or enjoyed by an Indemnified Party after it receives payment under this Agreement with respect to any Damages, then a refund equal in aggregate amount of such recovery, reduction or setoff (net of costs of recovery and after giving effect to any applicable deduction or retention and insurance premiums attributable to such claims) will be made promptly by such Indemnified Party to the Indemnifying Party.

 

(e)    The amount of any Seller Indemnified Losses shall be reduced by any amount directly or indirectly received by a Seller Indemnitee with respect thereto under any insurance coverage or from any other party alleged to be responsible therefor (net of costs of recovery and after giving effect to any applicable deduction or retention and insurance premiums attributable to such claims). Any Indemnified Party having a claim under Article VII shall make a good faith effort to recover any Damages from insurers of such Indemnified Party or its Affiliates under applicable insurance policies, in each case as to reduce the amount of any indemnifiable Damages hereunder. If such a recovery is received or enjoyed by an Indemnified Party after it receives payment under this Agreement with respect to any Damages, then a refund equal in aggregate amount of such recovery, reduction or setoff (net of costs of recovery and after giving effect to any applicable deduction or retention and insurance premiums attributable to such claims) will be made promptly to such Indemnifying Party.

 

(f)    For the sole purpose of determining the amount of losses under Section 7.2(a) and Section 7.3(a) (and not for determining whether or not any inaccuracy in, or breach of, any representation or warranty has occurred), any materiality, Material Adverse Effect or other similar qualifications in the representations and warranties shall be disregarded.

 

 

Section 7.8    Sole and Exclusive Remedy From and After the Closing, other than the rights of the parties hereto to seek specific performance, injunctive or other equitable relief pursuant to Section 8.15, and except in the event of fraud, the sole and exclusive remedy of any Party to this Agreement and its Affiliates with respect to this Agreement, the events giving rise to this Agreement or any other agreement or document executed among the Parties, and the transactions contemplated herein and therein shall be limited to the indemnification provisions set forth in this Article VII, and, in furtherance of the foregoing, except for Buyer Indemnified Losses or Seller Indemnified Losses, as the case may be, each of the Parties, on behalf of himself, herself or itself and of his, her or its Affiliates, hereby waives, releases and discharges, to the fullest extent permitted by Applicable Law, the other Parties to this Agreement and its respective Affiliates from any and all other Claims, as the case may be, of any kind (whether at Law or in equity or otherwise, foreseen or unforeseen, matured or unmatured, known or unknown, accrued or not accrued, or based on any Law or right of action or otherwise) notwithstanding the strict liability, gross negligence or negligence of a released Party (whether sole, joint or concurrent or active or passive).

 

(b)    The Parties intend that, even though indemnification obligations appear in various sections and articles of this Agreement, the indemnification procedures, limitations, express negligence and other provisions contained in this Article VII shall apply to all indemnity obligations of the Parties under this Agreement, except to the extent expressly excluded in this Article VII.

 

Section 7.9    Disclaimer of Other Representations and Warranties. In entering into this Agreement and in consummating the transactions contemplated hereby, each of the Parties has relied solely upon its own investigation and analysis and the specific representations and warranties set forth in Article III, Article IV, and Article V. No Party has relied on any representation or warranty other than as described in the preceding sentence; provided, however, that nothing herein shall limit any liability with respect to Fraud.

 

Section 7.10    No Multiple Recoveries. Notwithstanding anything herein to the contrary, in the event any Party (or any other indemnitee) is entitled to a payment or other benefit under more than one provision of this Agreement arising out of or resulting from the same set of facts or circumstances and such Person has already been made whole by payment or another benefit under one of those provisions (e.g. any adjustments made in Article II hereof), in no event shall such Person be entitled to receive a subsequent payment or benefit under any other provision of this Agreement. In furtherance of the foregoing, any Liability for indemnification hereunder shall be without duplication (i.e., without allowing the claiming Party (or other indemnitee) to receive more than its Damages) by reason of the state of facts giving rise to such Liability constituting a breach of more than one representation, warranty, covenant or agreement.

 

Section 7.11    No Subrogation. The Indemnifying Party shall not be subrogated to the rights of the Indemnified Party in respect of any insurance relating to Buyer Indemnified Losses or Seller Indemnified Losses, as the case may be, to the extent of any indemnification payments made hereunder.

 

 

Section 7.12    Mitigation. Each Party shall, and shall cause its applicable Affiliates and Representatives to take all commercially reasonable steps to mitigate any Buyer Indemnified Losses or Seller Indemnified Losses, as applicable, upon and after becoming aware of any fact, event, circumstance or condition that has given rise to, or would reasonably be expected to give rise to, any Buyer Indemnified Losses or Seller Indemnified Losses, as applicable, that are indemnifiable hereunder, provided, however, that this Section 7.12 shall not require any Party or any such Affiliate or Representative to spend any amount of money or to relinquish any right or incur any obligation in connection with such mitigation.

 

Section 7.13    Indemnification Escrow Provisions. The Indemnification Escrow shall continue in existence from the Closing Date until the earlier of: (i) the date in which all remaining funds in the Indemnification Escrow are paid out pursuant to the joint written instructions of Buyer and Seller Representative in accordance with the Escrow Agreement or (ii) (A) with respect to twenty five percent (25%) of the Indemnification Escrow, the sixth (6th) month anniversary of the Closing Date (such date, being the “First Release Date”), (B) with respect to an additional twenty five percent (25%) of the Indemnification Escrow, the twelfth (12th) month anniversary of the Closing Date (such date, being the “Second Release Date”), and (C) with respect to the remaining fifty (50%) of the Indemnification Escrow, the seventeenth (17^th) month and fifteenth (15^th) day following the Closing Date (such date, being the “Third Release Date”, with the First Release Date, Second Release Date, and Third Release Date, each being an “Escrow Release Date”), provided, that, the Indemnification Escrow shall not terminate with respect to, and the Escrow Agent shall reserve in the Indemnification Escrow, such portion of the Indemnification Escrow (up to the entire amount thereof) equal to the sum of such amount as would then be needed to satisfy any unsatisfied Third Party Claims or Direct Claims specified in a Claim Notice delivered in good faith to the Escrow Agent at least one (1) Business Day prior to any particular Escrow Release Date (except for the Third Release Date), which unsatisfied Third-Party Claim or Direct Claim shall be pending at the time of the termination of the applicable Escrow Release Date; it being clarified that in no event shall any amounts be retained in the Indemnification Escrow after the Third Release Date. Upon such time, as to any unsatisfied Third-Party Claim or Direct Claim is no longer pending (because such claim either has not been disputed by Seller or has been resolved in accordance with the applicable provisions of Article VII of this Agreement), the portion of the Indemnification Escrow that shall have been reserved for such claim shall be distributed to (i) Selling Parties, if the unsatisfied claim is resolved in Selling Parties’ favor, or (ii) Buyer, if the unsatisfied indemnification claim is not disputed by Selling Parties or is resolved in Buyer’s favor. Any determination as to the resolution of any unsatisfied Third-Party Claims and Direct Claims shall be made in accordance with Article VII of this Agreement and upon such resolution, Buyer and Seller Representative shall deliver to the Escrow Agent joint written instructions in accordance with the Escrow Agreement instructing the Escrow Agent to deliver funds from the Indemnification Escrow in accordance with the resolution of such Third-Party Claim or Direct Claim, as the case may be.

 

Section 7.14    Adjustment to Purchase Price. Unless otherwise required by Applicable Law, for all Tax purposes, the Parties agree to treat (and will cause each of their respective Affiliates to treat) any indemnification payment made under this Agreement (including payments made pursuant to Section 6.4) as an adjustment to the Purchase Price.

 

 

ARTICLE VIII

GENERAL PROVISIONS

 

Section 8.1    Amendment and Modification. This Agreement may be amended, modified or supplemented at any time by the Parties, pursuant to an instrument in writing signed by Buyer, Buyer Parent and Seller Representative. Notwithstanding any provision of this Agreement, this Agreement, including Article VII hereof, may be amended or modified at any time by the Buyer, Buyer Parent and Seller Representative without the need or requirement of any consent or approval of any other Buyer Indemnitee or Seller Indemnitee and any amendment or modification agreed to by the Parties shall be binding on all Buyer Indemnitees and all Seller Indemnitees.

 

Section 8.2    Entire Agreement; Assignment. This Agreement (including the Exhibits and Schedules hereto), and the other Transaction Documents (a) constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede other prior agreements and understandings both written and oral among the Parties with respect to the subject matter hereof and thereof and (b) shall not be assigned, by operation of Law or otherwise, by a Party, without the prior written consent of the other Parties. Any attempted assignment in violation of this Section 8.2 shall be void and without effect.

 

Section 8.3    Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision hereof shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

 

Section 8.4    Expenses. Except as otherwise provided in this Agreement, all costs and expenses (including legal, accounting and financial advisory fees and expenses) incurred in connection with, or in anticipation of, this Agreement and the transactions contemplated hereby, shall be paid by the Party incurring such expenses; expenses; provided, however, that any costs and expenses for filings incurred by the Buyer in connection with the HSR Act will be borne Fifty Two Thousand Five Hundred Dollars ($52,500) by Buyer and Thirty One Thousand Nine Hundred Ninety Nine Dollars ($31,999) by Selling Parties (with respect to Selling Parties’ share the Parties agree that it shall be added to Transaction Costs).

 

Section 8.5    Waiver. Except as otherwise expressly provided in this Agreement, no failure to exercise, delay in exercising, or single or partial exercise of any right, power or remedy by any Party, and no course of dealing between the Parties, shall constitute a waiver of any such right, power or remedy. No waiver by a Party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No waiver shall be valid unless in writing and signed by (a) in the case of a waiver by a Seller, such Seller or Seller Representative and (b) in the case of a waiver by Buyer or Buyer Parent, such Buyer or Buyer Parent.

 

Section 8.6    Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties. Signatures to this Agreement transmitted by electronic mail in “portable document format” (.pdf) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.

 

 

Section 8.7    Governing Law. This Agreement and the legal relations between the Parties shall be governed by and construed in accordance with the Laws of the Republic of India, without regard to any principles of conflicts of Laws thereof that would result in the application of the Laws of any other jurisdiction.

 

Section 8.8    Dispute Resolution.

 

(a)    Except for the dispute resolution mechanisms described in Section 2.6, Seller Representative on behalf of the Selling Parties on one hand and Buyer and/or Buyer Parent on the other shall initially attempt to resolve all claims, disputes or controversies arising under, out of or in connection with this Agreement by conducting good faith negotiations amongst themselves. If Seller Representative and Buyer and/or Buyer Parent are unable to resolve the matter following good faith negotiations, the matter shall thereafter be resolved by binding arbitration and each Party hereto hereby waives any right it may otherwise have to the resolution of such matter by any means other than binding arbitration pursuant to this Section 8.8. Whenever Seller Representative on behalf of the Selling Parties or Buyer and/or Buyer Parent shall decide to institute arbitration proceedings, it shall provide written notice to that effect to the other Party. The Party giving such notice shall, however, refrain from instituting the arbitration proceedings for a period of sixty (60) days following such notice. During this period, Seller Representative on behalf of the Selling Parties and Buyer and/or Buyer Parent (as the case may be) shall make good faith efforts to amicably resolve the claim, dispute or controversy without arbitration. All offers of compromise or settlement among Seller Representative on behalf of the Selling Parties and Buyer and/or Buyer Parent or their Representatives in connection with the attempted resolution of any dispute or controversy (i) shall be deemed to have been delivered in furtherance of a dispute settlement, (ii) shall be exempt from discovery and production and (iii) shall not be admissible into evidence (whether as an admission or otherwise) in any proceeding for the resolution of the dispute or controversy. Any arbitration hereunder shall be conducted under the commercial arbitration rules of the Singapore International Arbitration Centre (“SIAC”) to the exclusion of all other arbitral rules including those under the (Indian) Arbitration and Conciliation Act 1996. Any such arbitration shall be conducted in a venue in Mumbai, India, with the seat of arbitration in India, by a panel of three arbitrators: one arbitrator shall be appointed by each of Seller Representative and Buyer or Buyer Parent; and the third shall be appointed by the President of SIAC. The panel of arbitrators shall have the authority to grant specific performance. Judgment upon the award so rendered may be entered in any court having jurisdiction or application may be made to such court for judicial acceptance of any award and an order of enforcement, as the case may be. In no event shall a demand for arbitration be made after the date when institution of a legal or equitable proceeding based on the claim, dispute or controversy in question would be barred under this Agreement or by the applicable statute of limitations.

 

 

(b)    Notwithstanding the foregoing, either Seller Representative on behalf of the Selling Parties or Buyer and/or Buyer Parent may seek from any court of competent jurisdiction an order for immediate, temporary or preliminary injunctive relief pending arbitration to prevent the occurrence of irreparable harm and to specifically enforce compliance with the covenants and obligations of such Party under this Agreement. In any such Proceeding or in a Proceeding to enforce any arbitral award rendered under Section 8.8(a), each of the Parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the jurisdiction of the courts having competent jurisdiction, in any Proceeding arising out of or relating to this Agreement or any other Transaction Document or any agreements contemplated hereby or thereby for any reason other than the failure to serve process in accordance with this Section 8.8, and irrevocably waive the defense of an inconvenient forum or an improper venue to the maintenance of any such Proceeding. Any service of process to be made in such Proceeding may be made by delivery of process in accordance with the notice provisions contained in Section 8.9. The Parties agree that a final judgment in any such Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Applicable Law. In addition, each of the Parties hereto agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court.

 

Section 8.9    Notices and Addresses. All notices, requests, instructions, claims, demands and other communications required or permitted to be given hereunder will be in writing and will be given if delivered by hand or sent by registered or certified mail (postage prepaid, return receipt requested) or by overnight courier (providing proof of delivery) or by e-mail (providing confirmation of transmission). Any notice mailed within the same country shall be deemed to have been given and received on the third Business Day following the day of mailing, and any notice mailed between countries shall be deemed to have been given and received on the seventh Business Day following the day of mailing. Any notice sent by courier or delivery service shall be deemed to have been given and received at the time of confirmed delivery if such time is during normal local business hours (in the recipient’s location) or, otherwise, on the next Business Day after such confirmed delivery. Any notice sent by e-mail (of a PDF attachment) shall be deemed to have been given and received at the time of confirmation of transmission. Any notice sent by e-mail shall be followed reasonably promptly with a copy by mail. All such notices, requests, claims, demands or other communications will be addressed as follows:

 

(a)          if to a Selling Party or to Seller Representative, to

 

Attention: Chirag Shah         

 

With courtesy copies (which shall not constitute notice) to:

 

Khaitan & Co.

14^th Floor, Tower 1C, One-World Center,

841 Senapati Bapat Marg, Mumbai - 400013, India
Attention: Saswat Subasit, Ruturaj Jere
E-mail: saswat.subasit@khaitanco.com; ruturaj.jere@khaitanco.com

 

and

 

Chamberlain, Hrdlicka, White, Williams & Aughtry, P.C.

Address: 1200 Smith Street, Houston, Texas 77002                   
Attention: David B. Sheinbein         
E-mail: david.sheinbein@chamberlainlaw.com Chirag Shah

 

 

(b)         if to Buyer, to

 

Mold-Tech Singapore Pte. Ltd.

23 Keewaydin Drive

Salem, New Hampshire 03079

Attention: David Dunbar; Alan Glass

Email: ddunbar@standex.com; aglass@standex.com

 

With courtesy copies (which shall not constitute notice) to:

 

Foley Hoag LLP
Seaport West

155 Seaport Boulevard

Boston, Massachusetts 02210
Attention: Peter Rosenblum; William R. Kolb

Email: pmr@foleyhoag.com; wkolb@foleyhoag.com

 

and

 

Lexygen

4^th Floor, INDIQUBE Penta,

51, Richmond Road,

Bangalore – 560025.

Attention: Vijay Sambamurthi; Codhai Raghavan

Email: vijay@lexygen.law; codhai@lexygen.law

 

(c)          if to Buyer Parent, to

 

Standex International Corporation

23 Keewaydin Drive

Salem, New Hampshire 03079

Attention: David Dunbar; Alan Glass

Telephone: (603) 893-9701
E-mail: ddunbar@standex.com; aglass@standex.com

 

With courtesy copies (which shall not constitute notice) to:

 

Foley Hoag LLP
Seaport West

155 Seaport Boulevard

Boston, Massachusetts 02210
Attention: Peter Rosenblum; William R. Kolb

Email: pmr@foleyhoag.com; wkolb@foleyhoag.com

 

and

 

Lexygen

4^th Floor, INDIQUBE Penta,

51, Richmond Road,

Bangalore – 560025.

Attention: Vijay Sambamurthi; Codhai Raghavan

Email: vijay@lexygen.law; codhai@lexygen.law

 

or in any case to such other address or addresses as hereafter shall be furnished as provided in this Section 8.9 by any Party to the other Party.

 

 

Section 8.10    No Third-Party Beneficiaries. This Agreement is solely for the benefit of (a) each Seller and Seller Representative (and their successors and permitted assigns), with respect to the obligations of Buyer and Buyer Parent under this Agreement; and (b) each of Buyer and Buyer Parent (and its successors and permitted assigns), with respect to the obligations of the Selling Parties and Seller Representative under this Agreement. Except as provided in (i) Section 6.3(a) and (ii) Article VII (the “Third-Party Provisions”), this Agreement shall not be deemed to confer upon or give to any other third Person any remedy, claim of Liability or reimbursement, cause of action or other right. The Third-Party Provisions may be enforced by the beneficiaries thereof.

 

Section 8.11    Negotiated Transaction. The Parties, each represented by legal counsel, have each participated in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation should arise, this Agreement shall be construed as if drafted by all Parties and no presumption or burden of proof shall arise favoring or burdening any Party by virtue of the authorship of any of the provisions of this Agreement.

 

Section 8.12    Brokers and Agents.

 

(a)    Selling Parties agree to pay or cause to be paid any broker’s or finder’s fee, sales commission or similar form of compensation to any broker, finder or similar agent engaged by or on behalf of Selling Parties or the Company in connection with this Agreement or any of the transactions contemplated hereby, including Northern Edge Advisors LLC and VLS & Co., and without regard to the Tipping Basket, Damages Cap or any other limitation Article VII sets forth, and the Selling Parties, jointly and severally, agree to indemnify Buyer against all Claims arising out of claims for any and all such broker’s or finder’s fee, sales commission or similar form of compensation.

 

(b)    Buyer agrees to pay any such broker’s or finder’s fee, sales commission or similar form of compensation to any broker, finder or similar agent engaged by or on behalf of Buyer in connection with this Agreement or any of the transactions contemplated hereby and, without regard to the Tipping Basket, Damages Cap or any other limitation Article VII sets forth, to indemnify Selling Parties against all Claims arising out of claims for any and all such broker’s or finder’s fee, sales commission or similar form of compensation.

 

Section 8.13    Time of the Essence. With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence.

 

 

Section 8.14    Disclosure Schedules. The representations and warranties of the Selling Parties set forth in this Agreement are made and given subject to the disclosures in the Disclosure Schedules. The Selling Parties will not be, nor will they be deemed to be, in breach of any such representations or warranties in respect of any such matter so disclosed in the Disclosure Schedules, provided that, for the avoidance of doubt, matters disclosed in the Disclosures Schedules shall not in any way limit Buyer Indemnities’ rights for Damages with respect to Specific Indemnities Matters under the non-obstante proviso in Section 7.7(a). Neither the specifications of any dollar / INR amount in any representation, warranty or covenant contained in this Agreement nor the inclusion of any specific item in the Disclosure Schedules is intended to imply that such amount, or higher or lower amounts, or the item so included in the Disclosure Schedule or other items, are or are not material, except where any representation, warranty or covenant or the Disclosure Schedule expressly states as such (except where it is expressly stated as such), and no Person shall use the fact of the setting forth of any such amount or the inclusion of any such item in any dispute or controversy between the Parties as to whether any obligation, item or matter not described herein or included in the Disclosure Schedules is or is not material for purposes of this Agreement except where any representation, warranty or covenant or the Disclosure Schedule expressly states as such. Further, neither the specification of any item or matter in any representation, warranty or covenant contained in this Agreement nor the inclusion of any specific item in the Disclosure Schedules is intended to imply that such item or matter, or other items or matters, are or are not in the Ordinary Course of Business except where any representation, warranty or covenant or the Disclosure Schedule expressly states as such, and no Person shall use the fact of setting forth or the inclusion of any such items or matter in any dispute or controversy between the parties as to whether any obligation, item or matter not described herein or included in the Disclosure Schedules is or is not in the Ordinary Course of Business for purposes of this Agreement except where any representation, warranty or covenant or the Disclosure Schedule expressly states as such. Inclusion of information in the Disclosure Schedules will not be construed as an admission that such information is material to the business, operations of condition (financial or otherwise) of the Acquired Business or the Company and Amtran, in whole or in part, or as an admission of Liability or obligation of any Seller to any third Person. The specific disclosures set forth in the Disclosure Schedules have been organized to correspond to section references in this Agreement to which the disclosure is most likely to relate, together with appropriate cross-references when disclosure is applicable to other sections of this Agreement; provided, however, that any disclosure in the Disclosure Schedules will apply to and will be deemed to be disclosed with respect to any other Section or subsection of this Agreement to the extent that the relevance of such disclosure to such other section or subsection is reasonably apparent from the face of such disclosure.

 

Section 8.15    Specific Performance. The Parties hereto agree that irreparable damage, for which monetary relief, even if available, would not be an adequate remedy, would occur in the event that any provision of this Agreement is not performed in accordance with its specific terms (or in accordance with any amendment or other writing entered into by the Parties hereto in accordance with the terms and provisions of this Agreement) or is otherwise breached, including if the parties hereto fail to take any action required of them hereunder to consummate the transactions contemplated by this Agreement. It is accordingly agreed that, (a) the Parties hereto shall be entitled to an injunction or injunctions, specific performance or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the courts described in Section 8.8 without proof of damages or otherwise, this being in addition to any other remedy to which they are entitled under this Agreement, and (b) the right of specific performance and other equitable relief is an integral part of the transactions contemplated by this Agreement and without that right, neither Selling Parties nor Buyer would have entered into this Agreement. The Parties hereto agree not to assert that a remedy of specific performance or other equitable relief is unenforceable, invalid, contrary to law or inequitable for any reason, and not to assert that a remedy of monetary damages would provide an adequate remedy or that the parties otherwise have an adequate remedy at law. The Parties hereto acknowledge and agree that any party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 8.15 shall not be required to provide any bond or other security in connection with any such order or injunction.

 

 

Section 8.16    Seller Representative.

 

(a)    By executing this Agreement, each Seller hereby irrevocably appoints Seller Representative as such Selling Parties’ representative, attorney-in-fact and agent, with full power of substitution to act in the name, place and stead of such Seller in any and all respects in accordance with the terms of this Agreement and to do or refrain from doing all such further acts and things, and to execute all such documents, as Seller Representative shall deem necessary or appropriate in conjunction with any of the transactions contemplated by this Agreement or any Transaction Document, including the power:

 

(i)    to execute and deliver, and administer all matters pertaining to performance under, the Escrow Agreement to the extent permitted under the Escrow Agreement;

 

(ii)    to negotiate, execute and deliver all ancillary agreements, statements, certificates, notices, approvals, extensions, waivers, undertakings, amendments, assignments and other documents required or permitted to be given in connection with this Agreement, any other Transaction Document or the consummation of the transactions contemplated by this Agreement or any other Transaction Document (it being understood that such Seller shall execute and deliver any such documents that Seller Representative designates and agrees to execute);

 

(iii)    to give and receive all notices and communications to be given or received under this Agreement or any other Transaction Document and to receive service of process in connection with any claims under this Agreement or any Transaction Document (including, in each case, in connection with any proceedings conducted pursuant to Section 8.8) and the transactions contemplated hereby;

 

(iv)    to direct, on behalf of such Selling Party, the payment of any and all amounts due and payable to such Selling Party pursuant to this Agreement or any Transaction Document, subject to any adjustments made or reserves established or maintained by Seller Representative in his or her good faith discretion;

 

(v)    to defend, agree to, object to, negotiate, resolve, enter into settlements and compromises of, demand arbitration or litigation of, and comply with orders of arbitrators and courts with respect to Indemnification Claims and claims made on such Selling Party by any Buyer Indemnified Party pursuant to Article VII, dispute resolution proceedings under Section 8.8 and any other disputes or proceedings arising out of, related to or commenced under this Agreement or any Transaction Document;

 

(vi)    to incur any costs and expenses for the account of such Selling Party, manage the payment of such costs and expenses, and make all determinations that may be required or permitted to be taken by such Selling Party under this Agreement or any other Transaction Document, including any engagement of and/or the fees and expenses associated with the engagement of legal counsel, accountants, investment bankers and financial ‎advisers;

 

 

(vii)    to take all actions that, under this Agreement or any other Transaction Document and the transactions contemplated hereby and thereby, may be taken by such Selling Party and to do or refrain from doing any further act or deed on behalf of such Selling Party that Seller Representative deems necessary or appropriate in his or her sole discretion relating to the subject matter of this Agreement or any other Transaction Document and the transactions contemplated hereby and thereby as fully and completely as such Seller could do if personally present; and

 

(viii)    to act on behalf of such Selling Party in any amendment or waiver of or negotiation, mediation, arbitration, litigation or similar proceeding involving this Agreement or any Transaction Document.

 

(b)    This power of attorney, and all authority hereby conferred, is granted subject to the interests of Buyer hereunder and in consideration of the mutual covenants and agreements made herein and shall be irrevocable and shall not be terminated by any act of any Selling Party or by operation of Law, whether by the merger, dissolution or liquidation of the Company, Amtran or any other Selling Party or by the occurrence of any other event (other than the death or incapacity of Seller Representative or otherwise by a written assignment or transfer of this power of attorney signed by all of the Selling Parties with written notice thereof delivered to Buyer). All action taken by Seller Representative hereunder shall be final and binding upon all Selling Parties, and the Parties acknowledge and agree that Seller Representative shall have the right to enforce the rights of Selling Parties under this Agreement and any Transaction Document against Buyer. Seller Representative shall have the right, at any time and from time to time, to designate any Selling Party to exercise his or her rights and perform his or her obligations as Seller Representative under this Agreement. In the event of any such designation or other permitted assignment hereunder, all references in this Agreement to Seller Representative shall be interpreted to refer to such designee or permitted assign. Upon Buyer’s request in each instance of a designation, Seller Representative shall deliver a written instrument evidencing such designation duly executed by Seller Representative and his or her designee.

 

(c)    Seller Representative shall not be liable to a Selling Party for any act taken or omitted by him or her as permitted under this Agreement, the Escrow Agreement or any other Transaction Document or the transactions contemplated hereby and thereby, except to the extent such act or omission constitutes gross negligence, bad faith or a knowing and intentional breach of Seller Representative’s obligations under this Agreement. Seller Representative shall not be responsible to any Selling Party in any manner whatsoever for any failure or inability of Buyer or any other Person to honor any of the provisions of this Agreement or any other Transaction Document. Seller Representative shall, to the extent set forth in Section 8.16(d), be fully protected by Selling Parties in acting on and relying upon any written notice, direction, request, waiver, consent, receipt or other paper or document that Seller Representative in good faith believes to be genuine (including facsimiles thereof) and to have been signed or presented by the proper party or parties. Seller Representative shall not be liable to the Selling Parties for any error of judgment or any act done or step taken or omitted by Seller Representative in good faith or for any mistake in fact or Law, or for anything that Seller Representative may do or refrain from doing in connection with this Agreement or any other Transaction Document, except for Seller Representative’s own gross negligence, bad faith or knowing and intentional breach of his or her obligations under this Agreement. Seller Representative may consult with counsel of its, his or her own choice and shall have complete authorization and, to the extent set forth in Section 8.16(d), protection for any action taken or suffered by it, him or her in good faith and pursuant to the advice of such counsel.

 

 

(d)    Each Selling Party agrees to indemnify Seller Representative for, and to hold Seller Representative harmless against, any Damages suffered or incurred by Seller Representative arising out of or in connection with Seller Representative exercising its, his or her rights or performing his or her duties under this Agreement, the Escrow Agreement or any other Transaction Document and the transactions contemplated hereby and thereby, including the costs and expenses of Seller Representative incurred in its, his or her capacity thereof and the costs and expenses of successfully defending Seller Representative against any claim of liability with respect thereto, in each case, to the extent such Damages do not result from Seller Representative’s gross negligence, bad faith or knowing and intentional breach of its, his or her obligations under this Agreement.

 

 

[Remainder of Page Intentionally Left Blank]

 

EXHIBIT A

 

Accounting Principles

 

The following accounting policies and treatments in Part I and Part II shall be applied in the preparation of the Closing Statement and the Post-Closing Statement that are required to be made in a manner consistent with or in accordance with the Accounting Principles.

 

Part I Accounting Principles

 

Accounting Principles means:

 

(i)

the accounting principles, policies, procedures, categorizations, classifications, recognition bases, definitions, methods, valuations, practices and techniques (including in respect of the exercise of management judgment and estimation methodologies), as applicable set out in paragraphs (1) to (11) below (collectively, the “Specific Principles”);

 

(ii)	to the extent not addressed in paragraph (i) above, in a manner consistent with the Company’s or Amtran’s, as applicable, past practices used in connection with the preparation of its stand-alone financial statements prior to the Closing.

 

For the avoidance of doubt, paragraph (i) shall take precedence over paragraph (ii).

 

Part II Specific Principles

 

1.

The Closing Statement and the Estimated Adjustment Amount shall be prepared prior to the Closing Date without giving effect to the transactions contemplated by this Agreement. The Closing Statement and the Estimated Adjustment Amount shall be based on facts and circumstances as they exist as of Closing in accordance with Indian Accounting Standards.

 

2.

The Closing Statement and the Post-Closing Statement shall be prepared on a stand-alone basis for each entity (the Company and Amtran) and on the basis that each entity is a going concern and shall exclude the effect of change of control and will not take into account the effects of any post-Closing reorganizations or the post-Closing intentions or obligations of Buyer.

 

3.

The Closing Statement and the Post-Closing Statement will be prepared in U.S. Dollars. Assets and liabilities included in Closing Working Capital denominated in a currency other than U.S. Dollars shall be converted into U.S. Dollars using the exchange rate applicable to such other currency as published in The Wall Street Journal on the Closing Date.

 

4.

For the avoidance of doubt, Closing Working Capital shall exclude Closing Cash, Closing Indebtedness, and Transaction Costs.

 

5.

For the avoidance of doubt, Closing Working Capital shall be limited to trade working capital items; specifically accounts receivable, inventory, and accounts payable amounts. Other current assets and other current liabilities (including any tax assets or liabilities) shall be excluded from the computation of Closing Working Capital.

 

 

6.

The provisions of this Exhibit shall be interpreted to avoid double counting (whether positive or negative) of any item included in the Closing Statement and the Post-Closing Statement.

 

7.

For the purposes of calculating Closing Working Capital, no amount shall be included for changes in assets or liabilities as a result of purchase accounting adjustments.

 

8.

For the purposes of calculating Closing Working Capital, no amounts shall be included for any fraud related assets or liabilities with respect to Mr. Monal Parikh.

 

9.

For the purposes of calculating Closing Working Capital, (a) accounts receivable shall include invoiced amounts for all products shipped, regardless of shipping terms, (b) accounts receivable beyond customer terms shall be included in total accounts receivable to the extent they are collectable in a manner consistent with past practices, and (c) no amounts shall be eliminated to remove intercompany receivables and payables from Affiliates (including purchases and sales between and among the Company, Amtran, and Amran Inc).

 

10.

For the purposes of calculating Closing Working Capital, (a) inventory in the Quality Control (QC) Holding Area shall be included in inventory in a manner consistent with past practices, and (b) no elimination of intercompany profit in inventory shall be considered with respect to purchases from Affiliates that remain in inventory (including purchases by the Company from Amtran and Amran Inc).

 

11.

A physical inventory count shall be conducted as soon as reasonably practical after the Closing Date and both Buyer and Seller Representative shall be present at the inventory count along with count teams from the Company who regularly conduct the physical count procedures historically. The physical inventory count shall be conducted with proper inventory tag controls and both Buyer and Seller Representative shall agree with individual quantity counts on the date of the physical inventory with a detailed inventory compilation by SKU number being generated immediately upon completion of the physical count and provided to both parties prior to removing the inventory tags from individual inventory items counted. In addition, shipping and receiving records before and after the physical inventory count date shall be maintained and provided to both Buyer and Seller Representative in order to provide both parties the necessary information to analyze the completeness of the final inventory quantities recorded in the inventory compilation used to calculate Closing Working Capital.

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

BUYER:

 

MOLD-TECH SINGAPORE PTE. LTD.

 

By: /s/ David Dunbar

Name: David Dunbar
Title: Director

 

 

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

BUYER PARENT:

 

STANDEX INTERNATIONAL CORPORATION

 

By: /s/ David Dunbar
Name: David Dunbar
Title: Chairman, President and CEO

 

 

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

SELLER REPRESENTATIVE:

 

 

 

By: /s/ Chirag Shah
Name: Chirag Shah

 

 

SELLING PARTIES:

 

 

/s/ Chirag Shah
Chirag Shah

 

 

/s/ Surendra Shah
Surendra Shah

 

 

/s/ Bhargav Shah
Bhargav Shah

 

 

/s/ Joytsna Shah
Jyotsna Shah

 

 

/s/ Sapna Shah
Sapna Shah

 

 

/s/ Anand Shah
Anand Shah

 

 

/s/ Sandip Shah
Sandip Shah

 

 

/s/ Chirag Shah

Chirag Shah (HUF)

 

 

/s/ Sandip Shah

Sandip Shah (HUF)

 

 

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

COMPANY:

 

Narayan Power Tech Private Limited

 

 

 

By: /s/ Chirag Shah
Name: Chirag Shah
Title: Managing Director

 

 

 

Exhibit 10.3

 

SHAREHOLDERS’ AGREEMENT 28 OCTOBER 2024
BY AND AMONGST
NARAYAN POWER TECH PRIVATE LIMITED   AND   MOLD-TECH SINGAPORE PTE. LTD   AND   STANDEX INTERNATIONAL CORPORATION   AND   THE PERSONS SET OUT IN SCHEDULE 1 HERETO

 

 

TABLE OF CONTENTS

 

1.	DEFINITIONS AND INTERPRETATION	4
2.	EFFECTIVE DATE	11
3.	PRE- EMPTIVE RIGHT	11
4.	MANAGEMENT OF THE COMPANY	12
5.	GENERAL MEETINGS AND VOTING	17
6.	RESERVED MATTERS	18
7.	TRANSFER OF SECURITIES	19
8.	EXIT	25
9.	COVENANTS OF THE PARTIES	28
10.	TERM AND TERMINATION	29
11.	CONFIDENTIALITY	30
12.	ANNOUNCEMENTS	30
13.	REPRESENTATIONS AND WARRANTIES	31
14.	GOVERNING LAW AND JURISDICTION	31
15.	SETTLEMENT OF DISPUTES	32
16.	NOTICES	33
17.	ARTICLES OF ASSOCIATION	35
18.	MISCELLANEOUS	35

 

SCHEDULE 1 DETAILS OF MINORITY SHAREHOLDERS	41
SCHEDULE 2 SHAREHOLDING PATTERN OF THE COMPANY AS ON THE EFFECTIVE DATE	42
SCHEDULE 3 DEED OF ADHERENCE	43
SCHEDULE 4 RESERVED MATTERS	45

 

SHAREHOLDERS’ AGREEMENT

 

 

SHAREHOLDERS AGREEMENT

 

THIS SHAREHOLDERS AGREEMENT (“Agreement”) is made on this 28 day of October 2024 (“Execution Date”) at Vadodara, Gujarat, by and amongst:

 

(1)

NARAYAN POWER TECH PRIVATE LIMITED, a private limited company incorporated under the laws of India, having corporate identification number U65922GJ1995PTC026819 and its registered office at Padra – Baroda Road, 391440, Gujarat, India (hereinafter referred to as the “Company”, which expression shall, unless repugnant to the context or meaning thereof, be deemed to mean and include its successors and permitted assigns);

 

AND

 

(2)

MOLD-TECH SINGAPORE PTE. LTD, a corporation incorporated under the laws of Singapore, having its registered office at 159 Kampong Ampat, #01-01, KA Place, Singapore 368328 (hereinafter referred to as “Mold-Tech”, which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successors and permitted assigns);

 

AND

 

(3)

STANDEX INTERNATIONAL CORPORATION, a corporation incorporated under the laws of Delaware, having its registered office at 23 Keewyadin Drive, Suite 300, Salem, New Hampshire 03079 USA (hereinafter referred to as “SIC”, which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include its successors and permitted assigns);

 

AND

 

(4)	THE PERSONS SET OUT IN SCHEDULE 1 HERETO (hereinafter referred to as the “Minority Shareholders”, which expression shall, unless it be repugnant to the context or meaning thereof, be deemed to mean and include their respective successors, legal heirs, administrators and permitted assigns).

 

The Company, Mold-Tech, SIC and the Minority Shareholders are hereinafter collectively referred to as the “Parties” and individually as a “Party”, as the context may require.

 

INTRODUCTION

 

(A)	As on the Execution Date, the Company is presently carrying on, inter alia, the business of manufacturing and distributing low voltage and medium voltage instrument transformers (“Business”).

 

(B)	As on the Execution Date, the Sellers (as defined below) are the legal and beneficial owners of 3,11,400 (three lakhs eleven thousand and four hundred) Securities (as defined below) constituting 100% (one hundred percent) of the Share Capital (as defined below).

 

(C)

Simultaneously with the execution of this Agreement, the Company, SIC, Mold-Tech and the Minority Shareholders have entered into a securities purchase agreement of even date (“Share Purchase Agreement” or “SPA”), pursuant to which Mold-Tech has agreed to acquire 2,80,572 (two lakhs eighty thousand five hundred and seventy two) Securities from the Sellers, constituting 90.10% (ninety point one zero percent) of the Share Capital. With effect from the Effective Date (as defined below), the shareholding pattern of the Company shall be as set out in Schedule 2.

 

SHAREHOLDERS’ AGREEMENT

 

 

(D)

Immediately after the Closing Date (as defined below) and pursuant to the Closing (as defined below), the Minority Shareholders shall continue to hold 30,289 (thirty thousand two hundred and eighty nine) Securities, constituting approximately 9.90% (nine point nine zero percent) of the Share Capital.

 

(E)

In consideration of the transactions contemplated under the Share Purchase Agreement, each of the Parties have agreed to enter into this Agreement for the purpose of recording the terms and conditions regulating the relationship of Mold-Tech and the Minority Shareholders in their capacity as Shareholders (hereinafter defined), certain matters relating to the swap and transfer of the Securities (hereinafter defined)held by the Minority Shareholders, the management of the Company and mutual rights and obligations of the Shareholders and SIC.

 

1.	DEFINITIONS AND INTERPRETATION

 

1.1	In this Agreement and the recitals and schedules the following words and expressions have the meanings set out opposite them:

 

“Act” shall mean the Companies Act, 2013, or any statutory modification or amendment thereto, or re-enactment thereof, for the time being in force;

 

“Accounting Firm” shall mean: (a) KPMG or any of its Affiliates or associates in India; or (b) EY (formerly, Ernst & Young) or any of its Affiliates or associates in India, in each case, eligible to practice in India as per Applicable Law;

 

“Affiliate(s)” shall mean, (a) as to any specified Person that is not a natural Person, any other Person that, directly or indirectly through one or more intermediate Persons, Controls, is Controlled by or is under common Control with the specified Person; or (b) in the case of any specified Person that is a natural Person, any other Person that, directly or indirectly through one or more intermediate Persons, is Controlled by the specified Person or who is a Relative of such specified Person or is Controlled by a Relative of the specified Person;

 

“Amtran” mean Amtran Magnetics Private Limited, a private limited company incorporated under the laws of India, having its registered office at Survey No. 1401/B, Dabhasa Village, Dabhasa, Padra, Vadodara, Gujarat 391440 and bearing CIN U31501GJ2013PTC077593;

 

“Anti-Corruption Laws” means Applicable Law relating to anti-corruption as applicable to the relevant Person in the relevant jurisdiction where it conducts its business;

 

“Anti-Money Laundering Laws” means Applicable Law relating to anti-money laundering as applicable to the relevant Person in the relevant jurisdiction where it conducts its business;

 

“Applicable Law” or “Law” includes (but is not limited) to all applicable: (a) statutes, enactments, acts of legislature or parliament, laws, code, rules, bye-laws, ordinance, regulations, listing agreements, notifications, guidelines, circulars or policies of any applicable country and/or jurisdiction; (b) administrative interpretation, writ, injunction, directions, directives, judgment, arbitral award, decree, orders, or governmental approvals of, or agreements with, any Governmental Authority or recognized stock exchange; and (c) international treaties, conventions and protocols;

 

“Articles of Association” or “Articles” shall mean the articles of association of the Company;

 

“Board” shall mean the board of directors of the Company;

 

SHAREHOLDERS’ AGREEMENT

 

 

“Business Day” shall mean a day, other than a Saturday, a Sunday or any other day on which scheduled commercial banks in Gujarat, India and Singapore, are authorized or required by Applicable Law to close;

 

“Change in Control” shall mean SIC ceasing to be in Control (whether directly or indirectly through one or more intermediate Persons (including Mold-Tech and/or any other Standex Affiliate)) of the Company;

 

“Charter Documents” shall mean Articles of Association and Memorandum of Association;

 

“Closing” shall have the meaning assigned to the term under the SPA;

 

“Closing Date” shall have the meaning assigned to the term under the SPA;

 

“Competitor” shall mean any Person, who directly or indirectly, Controls, participates in or is engaged in any undertaking, business or Person, in each case, that competes with the Business;

 

“Confidential Information” shall mean confidential and proprietary information that belongs to, or is known or possessed by, the Company, Mold-Tech or any of their Affiliates, including information relating to financial statements, clients, customers, potential clients or customers, employees, suppliers, equipment, designs, drawings, programs, strategies, analyses, profit margins, sales, methods of operation, plans, products, technologies, materials, trade secrets, strategies, prospects or other proprietary information. Notwithstanding the foregoing, the term “Confidential Information” shall not include any information that now or hereafter is in the public domain by means other than disclosure by the Company, the Minority Shareholders, and Mold-Tech or any of their Affiliates or representative thereof in violation of this Agreement or is lawfully acquired by any Minority Shareholders from and after the Effective Date from sources which are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation;

 

“Control” (including with correlative meaning, the terms “Controlled by”, “Controlling” and “under common Control with”) means in relation to a Person: (a) direct or indirect ownership or control of more than 50% (fifty percent) of the total voting rights or the total issued and outstanding share capital or the total ownership interests of such Person; (b) the right to appoint and/or remove all or the majority of the members of the board or other governing body of such Person; and/or (c) the power to direct, or cause the direction/control of, the management or policies of such Person, in each case, whether directly or indirectly, and whether by ownership of share capital or any other form of ownership interests, possession of voting rights, contract or any other manner;

 

“Deed of Adherence” means the deed of adherence, in the form set out in Schedule 3 of this Agreement;

 

“Director” shall mean a director appointed on the Board;

 

“EBITDA” shall mean collectively, without duplication and on a proportionate percentage basis net of all intercompany sales transactions (including the elimination of intercompany profit in inventory from such sales, where applicable), earnings before interest, income taxation, depreciation and amortization of the Company, calculated on a consolidated basis (inclusive of the entire ownership interest held by the Company in Amtran and/or any other Subsidiary) and in a manner that is consistent with Indian Accounting Standards; provided that, the calculation of EBITDA shall: (a) add back: (i) management fees or any other fees payable to a related party of Mold-Tech, SIC and/or any of their respective Affiliates (other than the Company or its Subsidiaries); (ii) losses which are indemnified pursuant to the SPA or any other document or instrument contemplated thereby or losses for which insurance proceeds (computed proportionately to the total losses to the extent either the losses or the insurance proceeds relate to more than one accounting period) are received; (iii) losses and gains arising from changes in accounting policies; and (iv) unrealised foreign exchange losses; and (b) exclude: (i) unrealised foreign exchange gains; and (ii) interest income, dividend income, and gains from sale of property;

 

SHAREHOLDERS’ AGREEMENT

 

 

“Encumbrance” shall mean: (a) any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, deed of trust, title retention, security interest or other encumbrance of any kind, including any right granted by a transaction which, in legal terms, is not the granting of security but which has an economic or financial effect similar to the granting of security under Applicable Law; (b) any proxy for exercising voting rights issued to any third party, power of attorney issued to any third party for transferring and/or exercising any rights, voting trust agreement, interest, option, right of first offer, refusal or Transfer restriction in favour of any Person; and/or (c) any adverse claim as to title, possession or use; and the term “Encumber” shall be construed accordingly;

 

“Equity Shares” shall mean the ordinary equity shares of the Company with voting rights and having face value INR 10 (Indian Rupees Ten) each in the Share Capital;

 

“FEMA Regulations” means the (Indian) Foreign Exchange Management Act 1999 and the rules, regulations, notifications, circulars or master directions issued thereunder, the extant Consolidated Foreign Direct Investment Policy, press notes and press releases notified by the Reserve Bank of India, as amended from time to time;

 

“Financial Year” shall mean the fiscal year of the Company, beginning on April 1 of each calendar year and ending on March 31 of the immediately succeeding calendar year;

 

“First Tranche Shares” shall mean Securities representing 90.10% (ninety point one zero percent) of the Share Capital held by the Sellers in the Company, to be purchased by Mold-Tech as per the terms of the SPA on the Closing Date;

 

“Floor Valuation” shall mean: (a) 100 (one hundred) multiplied by the aggregate amount of consideration paid by Mold-Tech to the Sellers for purchasing the First Tranche Shares in accordance with the SPA divided by (b) 90.10 (ninety point one zero);

 

“Fully Diluted Basis” shall mean with respect to any calculation of the number of outstanding Securities or the total issued and paid-up share capital of the Company, such calculation being made as if all Securities outstanding on the date of calculation have been exercised or exchanged for or converted into Equity Shares, in accordance with their respective terms;

 

“Governmental Approval” means any permission, approval, license, permit, order, decree, authorization, registration, filing, notification, exemption or ruling to or from or with any Governmental Authority;

 

“Governmental Authority” shall mean any instrumentality, subdivision, court, administrative agency, commission, official or other authority of any country or any state, municipality, locality or other government or political subdivision thereof, or any quasi-governmental or private body exercising any regulatory, taxing or other governmental or quasi-governmental authority;

 

“Indian Accounting Standards” means the Indian Accounting Standards as notified under the Companies (Indian Accounting Standards) Rules 2015, and as amended from time to time;

 

“Memorandum of Association” shall mean the memorandum of association of the Company;

 

SHAREHOLDERS’ AGREEMENT

 

 

“Minority Equity Interests Value” shall mean value of the Minority Equity Interests, on a pro rata basis, which in the aggregate equates to a valuation of USD 27,906,120 (United States Dollars Twenty Seven Million Nine Hundred Six Thousand One Hundred and Twenty);

 

“Minority Shareholder 1” shall mean Mr. Chirag Surendrabhai Shah;

 

“Minority Shareholder 2” shall mean Mr. Sandip Indravandan Shah;

 

“Person” shall mean any individual, joint venture, company (whether limited or unlimited), corporation, partnership (of any kind whether limited or unlimited), limited liability partnership, proprietorship, trust or other enterprise (whether incorporated or not), unincorporated body or association, Hindu undivided family, association, Governmental Authority, or a mutual company or a joint stock company or any other entity or organization and shall include their respective successors and in case of an individual shall include his/her legal representatives, administrators, executors and heirs and in case of a trust shall include the trustee or the trustees for the time being;

 

“Permitted Affiliate” shall mean a Person who/which is:

 

(a)

any immediate Relative of a Minority Shareholder; and/or

 

(b)

an entity: (i) which is Controlled by Minority Shareholder 1 and/or Minority Shareholder 2 and/or his/their respective immediate Relatives; and (ii) in which, no Person, other than: (1) Minority Shareholder 1; (2) Minority Shareholder 2; (3) any immediate Relative(s) of any Minority Shareholder; and/or (4) any Person nominated by Minority Shareholder 1 and/or Minority Shareholder 2 solely for the purpose of meeting the statutory requirement of minimum number of shareholders or partners, as applicable, as prescribed under Applicable Law (provided that, any such Person shall hold only a nominal number of securities or nominal partnership interest, as applicable), holds any security or ownership interest, as applicable, or has the right to acquire any security or ownership interest, as applicable, of any form or nature whatsoever,

 

in each case, only so long as such Person is not a Competitor;

 

“Proceeding” shall mean any action, case, proceeding, claim, grievance, suit or investigation or other proceeding conducted by or pending before any Governmental Authority or any arbitrator;

 

“Purchaser” means any Person other than: (a) SIC; (b) a Standex Affiliate; (c) a Minority Shareholder; and/or (d) a Permitted Affiliate;

 

“Relative” shall have the meaning ascribed to such term under the Act;

 

“RBI” shall mean the Reserve Bank of India;

 

“RBI Application” shall mean a written application made by the Minority Shareholders to the RBI to obtain its approval in accordance with the Foreign Exchange Management (Overseas Investment) Rules, 2022, and other applicable FEMA Regulations, for transfer of the Minority Equity Interests in consideration for the Stock Consideration;

 

“RBI Approval” shall mean written approval of the RBI for transfer of the Minority Equity Interests in consideration for the Stock Consideration, pursuant to the RBI Application made in this regard by the Minority Shareholders;

 

SHAREHOLDERS’ AGREEMENT

 

 

“Securities” shall mean the Equity Shares including preference shares or options, warrants, convertible debentures, convertible preference shares or any other securities, issued by the Company and which are convertible into, or exercisable or exchangeable for any Equity Shares (whether with or without payment of additional consideration) and shall include partially or fully convertible debentures, or any warrants, options, coupons or instruments which may enable the holder thereof to acquire Equity Shares and/or any voting or other ownership rights in the Company;

 

“Sellers” shall have the meaning assigned to the term under the SPA;

 

“Shareholders” shall mean any Person which holds any Securities on or after the Effective Date;

 

“Share Capital” shall mean the total paid-up equity share capital of the Company determined on a Fully Diluted Basis;

 

“Share Swap Deadline Date” shall mean: (i) the date which is the earlier of: (a) the date of receipt by the Minority Shareholders of written communication from the RBI rejecting the RBI Application or refusing to grant its approval for the Share Swap; and (b) the 1^st anniversary of the Effective Date; or (ii) any other date as mutually agreed in writing by the Minority Shareholders, Mold-Tech and SIC;

 

“Standex Affiliate” shall mean any Affiliate of SIC which is Controlled by SIC;

 

“Subsidiary” of any Person at any time means any entity of which: (a) such Person or any other Subsidiary of such Person is a general partner, managing member or sole or controlling member or (b) at least a majority of the Share Capital having by their terms ordinary voting power to elect a majority of the board of directors, managers or others performing similar functions with respect to such entity is, directly or indirectly, owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and any one or more of its Subsidiaries;

 

“Tax” or “Taxes” or “Taxation” means all net or gross income, gross receipts, escheat, net proceeds, profits, wealth, dividend, equalization levy, sales, use, ad valorem, value added, goods and services, harmonized sales franchise, transfer, acquisition, capital, capital gains, withholding, collect at source, payroll, employer health, fringe benefits, real property, personal property, social security, employment, unemployment, excise, property, deed, stamp, alternative, net worth or add-on minimum, environmental or other taxes, assessments, duties, levies or similar governmental charges in the nature of a tax, together with any cess, surcharge, interest, penalties, fines or additions to tax with respect thereto or with respect to such interest, penalties, fines or additions, imposed by any Taxing Authority;

 

“Taxing Authority” means any Governmental Authority having, or purporting to exercise, jurisdiction with respect to any Tax;

 

“Transaction Documents” shall mean this Agreement and any other written ancillary agreements, documents, instruments and certificates executed by the Parties under or in connection with this Agreement; and

 

“Transfer” (including, with correlative meaning, the terms “Transferred by” and “Transferability”) shall mean to directly or indirectly, legally or beneficially, whether or not voluntarily, transfer, sell, assign, exchange, gift or create an Encumbrance on (including transfer by operation of Applicable Law) any Securities or any right, title or interest therein or otherwise dispose-off or extinguish in any manner, but shall not include transfer by way of testamentary or intestate successions.

 

SHAREHOLDERS’ AGREEMENT

 

 

1.2	Additional Defined Terms

 

For the purposes of this Agreement, the following terms have the meanings specified in the indicated provisions of this Agreement:

 

DEFINED TERM	PROVISION
Alternate Director	Clause 4.4
Board Committees	Clause 4.11.1
Business	Recital A
Call Option Notice	Clause 7.2.3(c)
Call Securities	Clause 7.2.3(c)
Company Valuation	Clause 7.2.3(e)(ii)
Computation Documents	Clause 7.2.3(e)(i)
Drag Expiry Period	Clause 8.2.6
Drag Notice	Clause 8.2.2
Drag Price	Clause 8.2.3
Drag Purchaser	Clause 8.2.1
Drag Right	Clause 8.2.1
Drag Sale	Clause 8.2.1
Dragged Securities	Clause 8.2.1
Dragging Securities	Clause 8.2.3
Dragged Shareholder	Clause 8.2.1
Effective Date	Clause 2.1
Investor Directors	Clause 4.2.2
Minority Equity Interests	Clause 7.2.2(a)
Minority Shareholder Director	Clause 4.2.1
Put Option Notice	Clause 7.2.3(a)
Minority Shareholders Put Option	Clause 7.2.3(a)
Put Securities	Clause 7.2.3(a)
Notice	Clause 16.1
Offeree	Clause 3.1
Offer Period	Clause 3.4
Offered Terms	Clause 3.3
Original Director	Clause 4.4
Pre-Emptive Acceptance Notice	Clause 3.4
Pre-Emptive Entitlement	Clause 3.1
Pre-Emptive Offer Notice	Clause 3.3
Proposed Issuance	Clause 3.1
Reserved Matter	Clause 6
Selling Investor	Clause 8.1.2
Share Purchase Agreement/SPA	Recital C
Share Swap	Clause 7.2.2(a)
Stock Consideration	Clause 7.2.2(b)
Subject Securities	Clause 8.1.2
Tag Exercise Notice	Clause 8.1.3
Tag Price	Clause 8.1.2
Tag Response Period	Clause 8.1.3
Tag Right	Clause 8.1.1
Tagged Securities	Clause 8.1.3
Transfer Notice	Clause 8.1.2

 

SHAREHOLDERS’ AGREEMENT

 

 

1.3	Interpretation

 

In this Agreement and the recitals and the schedules:

 

1.3.1

reference to any statute or statutory provision includes a reference to that statute or statutory provision as amended, extended or re-enacted and to any regulation, order, instrument or subordinate legislation under the relevant statute or statutory provision;

 

1.3.2

the words “herein,” “hereof” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any provision of this Agreement, and the words “Article,” “Section,” “Recitals,” “Schedule” and “Exhibit” refer to Articles and Sections of, the Recitals to, and Schedules and Exhibits to, this Agreement unless it otherwise specifies;

 

1.3.3

capitalised terms used herein but not specifically defined shall have the meaning ascribed to them in the Share Purchase Agreement;

 

1.3.4

reference to the singular includes a reference to the plural and vice versa;

 

1.3.5

reference to the consent of the Parties shall mean the written consent of the Parties;

 

1.3.6

reference to any gender includes a reference to all other genders;

 

1.3.7

save as otherwise provided or where the rights are specifically related to the holders of Securities, the Minority Shareholders and their Affiliates shall act as a single block (i.e. the shareholding of each of the Minority Shareholders and their respective Affiliates in the Share Capital will be aggregated) for the purpose of exercising any rights as ‘Minority Shareholders’ under this Agreement and all rights of Minority Shareholders and their Affiliates under this Agreement shall be exercised by Minority Shareholders’ representative for and on behalf of each of the Minority Shareholders and their Affiliates. It is further clarified that where the rights accorded to a Minority Shareholder and its Affiliate have been apportioned amongst themselves in the manner set out above, such apportionment shall not result in any manner whatsoever in duplication or enhancement of rights or a reduction of obligations as compared to what was otherwise available or applicable to such Minority Shareholder and/or its Affiliate prior to such apportionment;

 

1.3.8

the words “including”, “include”, “in particular” and words of similar effect shall not be deemed to limit the general effect of the words which precede them and are to be read as if the words “but not limited to” were inserted immediately after them;

 

1.3.9

a reference to something being “in writing” includes writing, typing, printing, letter, e-mail or other electronic record reduced to a visual form but shall not include text messages or any messages which can be delivered using any other short message service or social media application (including WhatsApp);

 

1.3.10

unless otherwise specified, all percentages mentioned in this Agreement shall be rounded off to two decimal places;

 

1.3.11

references to any document (including this Agreement) or to a provision in a document, shall be construed as a reference to such document or provision as amended, assigned, supplemented, modified, restated, novated or otherwise replaced in accordance with its terms, from time to time; and

 

1.3.12

where something is required by this Agreement to be done on or by a day which is not a Business Day, it shall be done on the next day which is a Business Day. Time periods within or following which any payment is to be made or action is to be taken under this Agreement shall be calculated by excluding the day on which the relevant time period commences and including the day on which such time period ends and by extending the period to the next Business Day if the last day of such time period is not a Business Day.

 

SHAREHOLDERS’ AGREEMENT

 

 

2.	EFFECTIVE DATE

 

2.1

Save and except for Clause 1 (Definitions and Interpretation), Clause 2 (Effective Date), Clause 10 (Term & Termination), Clause 11 (Confidentiality), Clause 13 (Representations and Warranties), Clause 14 (Governing Law and Jurisdiction), Clause 15 (Settlement of Disputes), Clause 16 (Notices), and Clause 18 (Miscellaneous) which shall become effective on and from the Execution Date, all other provisions of this Agreement shall be effective from the Closing Date (the “Effective Date”).

 

2.2

The Parties shall comply with the provisions of this Agreement and the Shareholders shall exercise their rights as the members of the Company and holders of the Securities in accordance with the provisions of this Agreement. This Agreement, as between the Parties, shall have an overriding effect in the case of any ambiguity or inconsistency with anything contained in the Memorandum of Association and/or the Articles of Association.

 

3.	PRE-EMPTIVE RIGHT

 

3.1

If, at any time after the Effective Date, the Company proposes to issue new Securities (except as provided in Clause 3.8 below) (“Proposed Issuance”), so long as a Minority Shareholder or any of its Permitted Affiliates holds or owns Securities (each an “Offeree”), an Offeree shall have the right (but not the obligation) to participate in any such Proposed Issuance, by subscribing to up to such number of new Securities proposed to be issued in the Proposed Issuance which is proportionate to such Offeree’s then existing shareholding in the Company on a Fully Diluted Basis (“Pre-Emptive Entitlement”).

 

3.2

The Parties agree that each Offeree shall be entitled to participate in the Proposed Issuance either by himself/herself/itself and/or any Permitted Affiliate(s) which is identified to participate in such Proposed Issuance, subject to such Permitted Affiliate executing a Deed of Adherence, on or before subscribing to any Securities as part of the Proposed Issuance. For the avoidance of doubt, it is hereby clarified that in case the Proposed Issuance is undertaken by way of a rights issue of Securities, a Minority Shareholder or any of its Permitted Affiliates that holds any Securities shall not have the right to renounce its Pre-Emptive Entitlement (or any part thereof) in favour of any Person who is not a Permitted Affiliate.

 

3.3

In case of a Proposed Issuance, the Company shall give the Offerees a written notice of any such Proposed Issuance (“Pre-Emptive Offer Notice”) and such Pre-Emptive Offer Notice shall specify: (a) the specific details of the number and class of Securities proposed to be issued by the Company and the Pre-Emptive Entitlement of each Offeree in the Proposed Issuance; (b) the price per Security for the Proposed Issuance; (c) the manner and time of payment of the subscription amount for subscribing to any Securities as part of the Proposed Issuance; and (d) the proposed date of consummation of the Proposed Issuance, which shall be no earlier than 10 (ten) days from the date of such notice (collectively, “Offered Terms”).

 

3.4

Within 20 (twenty) days from the date on which the Pre-Emptive Offer Notice is received by an Offeree (“Offer Period”), such Offeree shall have the right to communicate in writing its election to subscribe to up to all of its Pre-Emptive Entitlement by delivering a written notice in this regard to the Company (“Pre-Emptive Acceptance Notice”). The Pre-Emptive Acceptance Notice shall also specify: (a) whether the Offeree proposes to subscribe to Securities in the Proposed Issuance by itself and/or through or along with any Permitted Affiliate(s); and (b) the total number of Securities that it proposes to subscribe to, whether by itself and/or through or along with its Permitted Affiliate(s) specified in (a) above, which may be less than or equal to such Offeree’s Pre-Emptive Entitlement. If any Offeree does not provide a Pre-Emptive Acceptance Notice to the Company within the Offer Period, then such Offeree shall be deemed to have rejected the Offered Terms.

 

SHAREHOLDERS’ AGREEMENT

 

 

3.5

Simultaneously with the allotment of Securities to any other Person(s) (including any other Shareholder(s)) as part of the Proposed Issuance, the Company shall allot to each Offeree who has delivered a Pre-Emptive Acceptance Notice to the Company within the Offer Period and/or any Permitted Affiliate(s) nominated by such Offeree in its Pre-Emptive Acceptance Notice, the total number of Securities that it wishes to subscribe to in terms of such Offeree’s Pre-Emptive Acceptance Notice.

 

3.6

Where an Offeree does not, whether by itself and/or through its Permitted Affiliate(s), subscribe to all or any part of its Pre-Emptive Entitlement, the Company shall be entitled to issue such unsubscribed portion of Securities forming part of the Proposed Issuance to any Person (including Mold-Tech and/or its Affiliates) within 120 (one hundred and twenty) days from the date of receipt of the Pre-Emptive Offer Notice by all Offerees, subject to: (a) such issuance of Securities being undertaken by the Company on terms which are the same or inferior as compared with the Offered Terms, including at a price per Security which is either equal to or higher than the price per Security set forth in the Pre-Emptive Offer Notice; and (b) any such Person which subscribes to such Securities executing and delivering to the Company a Deed of Adherence prior to allotment of any Securities by the Company to it.

 

3.7

If the unsubscribed portion of Securities forming part of any Proposed Issuance are not issued and allotted by the Company to any Person (including Mold-Tech and/or its Affiliates) referred to under Clause 3.6 above, then, thereafter, no Securities shall be issued or allotted or offered to be issued or allotted by the Company without complying afresh with the provisions of Clauses 3.1 to 3.6. The above period of 120 (one hundred twenty) days shall be extended for any additional period necessary for obtaining any Governmental Approval(s) as required in connection with the issue and allotment of Securities to any Person (including Mold-Tech and/or its Affiliates) referred to under Clause 3.6 above.

 

3.8

The provisions of this Clause 3 (Pre-Emptive Rights) shall not apply to: (a) grant of any employee stock options (“ESOP”) pursuant to any ESOP scheme of the Company (if any); and/or (b) allotment of any Securities pursuant to the exercise of any such ESOP granted and vested in accordance with any ESOP scheme of the Company (if any); and/or (c) conversion of any convertible Securities issued by the Company by complying with the provisions of Clauses 3.1 to 3.7 above; and/or (d) any stock split, consolidation, or other similar corporate action taken by the Company in respect of its Securities.

 

4.	MANAGEMENT OF THE COMPANY

 

4.1

Directors

 

The Company shall be managed by the Board who shall have the power to do all acts and take all actions that the Company is authorized to do under Applicable Law, this Agreement, and the Charter Documents, provided that, any action or matter relating to the Company that is statutorily required under the Act to be approved by the Shareholders shall be referred to the Shareholders for their approval in accordance with Applicable Law, this Agreement, and the Charter Documents.

 

SHAREHOLDERS’ AGREEMENT

 

 

4.2	Composition of the Board

 

4.2.1

On and from the Effective Date, the Minority Shareholders shall have the right, but not the obligation, to jointly appoint up to 2 (two) Directors on the Board (each a “Minority Shareholder Director”), provided that, so long as a Minority Shareholder is an employee of the Company, such Minority Shareholder (and not any other individual nominated by such Minority Shareholder) shall hold office as a Minority Shareholder Director. For the avoidance of doubt, if a Minority Shareholder ceases to be an employee of the Company, then such Minority Shareholder shall be entitled to either hold office as a Minority Shareholder Director or nominate any other individual to hold office as a Minority Shareholder Director. If a Minority Shareholder is entitled to appoint any other individual to hold office as a Minority Shareholder Director and such other individual is appointed as a Minority Shareholder Director, then the relevant Minority Shareholder which has nominated such Minority Shareholder Director may, at any time, remove from office such Minority Shareholder Director and, if desired, appoint another individual as a Minority Shareholder Director in his or her place.

 

4.2.2

On and from the Effective Date, Mold-Tech shall have the right, but not the obligation, at all times to appoint the majority of the total number of Directors on the Board (such Directors appointed by Mold-Tech being the “Investor Directors”). Mold-Tech may, at any time, remove from office any Investor Director and, if desired, appoint another individual as an Investor Director in his or her place.

 

4.2.3

So long as Minority Shareholder 1 is an employee of the Company and a Director of the Company, Minority Shareholder 1 shall be considered as the “responsible officer”, the “authorised officer”, the “compliance officer”, the “officer having knowledge”, the “officer in charge”, “officer in default” or “employer of the employees” of the Company, and so long as Minority Shareholder 1 is an employee of the Company and a Director of the Amtran, Minority Shareholder 1 shall be considered as the “responsible officer”, the “authorised officer”, the “compliance officer”, the “officer having knowledge”, the “officer in charge”, “officer in default” or “employer of the employees” of Amtran, in each case, for the purposes of any statutory and/or regulatory compliance requirements under Applicable Law. The Company further agrees and undertakes that: (a) it shall not identify or designate, and cause Amtran to not identify or designate, any of the Investor Directors or Minority Shareholder 2 or any individual nominated by Minority Shareholder 2 as a Minority Shareholder Director as the “responsible officers”, the “authorised officers”, the “compliance officers”, the “officers having knowledge”, the “officers in charge”, “officers in default” or “employers of the employees” of the Company and/or Amtran for the purposes of any statutory and regulatory compliance requirements under Applicable Law; and (b) shall appoint suitable persons for the purposes of such statutory and regulatory compliance requirements under the Applicable Law, in order to ensure that the Investor Directors, Minority Shareholder 2, and any individual nominated by Minority Shareholder 2 as a Minority Shareholder Director do not incur any liability on account of holding office as Directors. In the event that any notice is received by the Company and/or Amtran from any Governmental Authority or any proceedings are initiated by any Governmental Authority in which any Investor Director(s) or Minority Shareholder 2 or any individual nominated by Minority Shareholder 2 as a Minority Shareholder Director is included as an “officer in default”, the Company shall take (and cause Amtran to take) necessary steps to ensure that the name(s) of such Investor Director(s) and/or Minority Shareholder 2 and/or any individual nominated by Minority Shareholder 2 as a Minority Shareholder Director is excluded/deleted and such Investor Director(s) and/or Minority Shareholder 2 and/or any individual nominated by Minority Shareholder 2 as a Minority Shareholder Director is indemnified, defended, and held harmless against such notice or proceedings.

 

SHAREHOLDERS’ AGREEMENT

 

 

4.2.4

The Parties acknowledge and confirm that, in the event Minority Shareholder 1 ceases to be employed by the Company, Minority Shareholder 1 and/or any Minority Shareholder Director nominated by him shall not be considered, identified or designated as “responsible officer”, the “authorised officer”, the “compliance officer”, the “officer having knowledge”, the “officer in charge”, “officer in default” or “employer of the employees” of the Company and/or Amtran for the purposes of any statutory and regulatory compliance requirements under Applicable Law, and Minority Shareholder 1 and/or any individual appointed by Minority Shareholder 1 as a Minority Shareholder Director shall be entitled to the same protections from the Company and Amtran as are available to any Investor Director(s), Minority Shareholder 2 and/or any individual nominated by Minority Shareholder 2 as a Minority Shareholder Director. If the Company makes a written request, then the Minority Shareholder 1 and/or Minority Shareholder 2 shall assist in, and facilitate, in good faith, the identification of a whole-time Director who shall be designated as “responsible officer”, the “authorised officer”, the “compliance officer”, the “officer having knowledge”, the “officer in charge”, “officer in default” or “employer of the employees” of the Company for the purposes of any statutory and regulatory compliance requirements under Applicable Law. Mold-Tech shall co-operate in good faith with the Minority Shareholder 1 and/or the Minority Shareholder 2 (as the case may be) in connection with the aforesaid.

 

4.2.5

The Company shall obtain and maintain a directors’ and officers’ liability insurance policy that is as per best industry standards for similar companies. The Company shall: (a) to the fullest extent permissible under the Applicable Law, indemnify the Investor Directors against any act, omission or conduct (including, contravention of any Applicable Law) of or by the Company, Amtran, and their respective officers, employees, managers, representatives, and/or agents, and/or the Shareholders, as a result of which, in whole or in part, any Investor Director is made party to, or otherwise incurs any loss pursuant to or in connection with any action, suit, claim or proceeding arising out of or relating to any such act, omission or conduct or any act or omission by any Investor Director at the request of or with the consent of the Company, Amtran, and their respective officers, employees, managers, representatives and/or agents or the Shareholders or on account of any of the Investor Directors being construed or deemed as an “officer in charge” of the Company and/or Amtran under any Applicable Law; and (b) after any of the Minority Shareholders ceases to be an employee of the Company but remains a Minority Shareholder Director, to the fullest extent permissible under the Applicable Law, indemnify such Minority Shareholder Director against any act, omission or conduct (including, contravention of any Applicable Law) of or by the Company, Amtran, and their respective officers, employees, managers, representatives and/or agents, or the Shareholders, as a result of which, in whole or in part, such Minority Shareholder Director is made party to, or otherwise incurs any loss pursuant to or in connection with any action, suit, claim or proceeding arising out of or relating to any such act, omission or conduct or any act or omission by such Minority Shareholder Director at the request of or with the consent of the Company, Amtran and their respective officers, employees, managers, representatives and/or agents or the Shareholders or on account of such Minority Shareholder Director being construed or deemed as an “officer in charge” of the Company and/or Amtran under any Applicable Law.

 

4.3	Appointment, Removal and Replacement

 

4.3.1

The Shareholders shall procure that the appointment, removal or replacement of any individual nominated to hold or holding office as an Investor Director or a Minority Shareholder Director in terms of Clauses 4.2 above is implemented without delay and where necessary, meetings of the Shareholders, or meetings of the Board, as applicable, are convened for this purpose.

 

SHAREHOLDERS’ AGREEMENT

 

 

4.3.2

The Shareholders shall vote in favour of appointment, removal or replacement referred in 4.3.1 at any meeting of the Shareholders and use their reasonable endeavours to procure that each Shareholder’s nominee(s) to the Board or any Alternate Director(s) of such nominee(s), votes in favour of any such appointment, removal or replacement.

 

4.4	Alternate Directors

 

Subject to compliance with the Act, the Board shall have the right to appoint an alternate director (an “Alternate Director”) who is recommended/nominated for such appointment by a Director (an “Original Director”) to act for him during his absence for a period of not less than 3 (three) months from India. Subject to Applicable Law, an Alternate Director shall receive all notices of meetings of the Board and may attend, speak and vote on behalf of the Original Director for whom he is appointed at meetings of the Board at which the Original Director is not present.

 

4.5

Chairman

 

Any of the Investor Directors may be elected as the Chairman of the Board.

 

4.6	Meetings of the Board

 

4.6.1

The Board shall meet at least at such frequency as prescribed by the Act. The meetings of the Board can be held either at the registered office of the Company or such other place as may be determined by the Board.

 

4.6.2

At least 7 (seven) calendar days’ prior written notice shall be given to each of the Directors (or, subject to the Act, such shorter period as may be approved in writing by each of the Directors) of any meeting of the Board. Along with the notice, each Director shall be provided with the agenda for the meeting which shall describe in reasonable detail all matters to be considered by the Board at such meeting (including all resolutions which are proposed to be put to vote at such meeting) along with the relevant documents and background notes to be discussed at the meeting and all available data and information relating to matters to be discussed at the meeting, provided that, where such meeting of the Board is called on shorter notice in accordance with the provisions of the Act, at least such information and documents shall be provided to each Director as part of and/or along with the notice for such meeting as statutorily prescribed under the Act.

 

4.6.3

Any Director may, and the company secretary of the Company, if so appointed shall on the requisition of a Director, summon a meeting of the Board in accordance with the notice and other requirements set out in Clauses 4.6.1 and 4.6.2 above.

 

4.7	Quorum for Board meetings

 

4.7.1

The quorum for all meetings of the Board shall require the presence of at least 1 (one) Minority Shareholder Director and at least 1 (one) Investor Director (unless waived in writing by the relevant Minority Shareholder Director and/or the relevant Investor Director, as the case may be, prior to the meeting) at the commencement of and throughout the entire duration of any meeting of the Board. Subject to Applicable Law, participation of the Directors at any meeting of the Board by video conferencing or by any other audio visual or electronic means (as permitted under Applicable Law) shall also be counted for the purpose of constituting valid quorum for a meeting of the Board.

 

SHAREHOLDERS’ AGREEMENT

 

 

4.7.2

In the event that valid quorum (as required under Clause 4.7.1 above) is not constituted within 30 (thirty) minutes of the appointed time for any meeting of the Board (as specified in the notice of such meeting of the Board, delivered to all Directors in accordance with Clause 4.6.2), such meeting shall be adjourned to a date which falls on the 7th (seventh) day following the originally scheduled date of such Board meeting (“Adjourned Meeting”) and the appointed time for such Adjourned Meeting shall be the same as the appointed time for the originally scheduled Board meeting (as specified in the notice of such meeting of the Board, delivered to all Directors in accordance with Clause 4.6.2). If valid quorum (as required under Clause 4.7.1 above) is not constituted within 30 (thirty) minutes of the appointed time for holding such Adjourned Meeting, then, subject to Applicable Law, the Directors present at the Adjourned Meeting may take decisions with respect to all matters proposed to be transacted at such Adjourned Meeting. For avoidance of doubt, it is clarified that, no Reserved Matter shall be transacted or decided or voted upon at any meeting of the Board (including any Adjourned Meeting) unless any of the Minority Shareholder Directors or any of the Minority Shareholders or the Minority Shareholders’ representative, in each case, acting on behalf of the Minority Shareholders, has granted prior written approval, or waived the Minority Shareholders’ consent, for such Reserved Matter prior to such meeting.

 

4.8	Passing of Resolutions and Voting

 

4.8.1

Each Director shall have the right to cast 1 (one) vote. Except for any decisions in relation to the Reserved Matters or any other matter(s) which expressly require a higher majority of votes in favour of such decision under Applicable Law, all decisions of the Board shall be made on the basis of a simple majority of votes cast in favour of such decisions by the Directors entitled to vote on the relevant resolution(s) pertaining to such decisions.

 

4.8.2

In accordance with Applicable Law, any Director may participate in and vote at a meeting of the Board by means of video conferencing, similar communication equipment or other audio visual or electronic means (as permitted under Applicable Law) which allows all Persons participating in the meeting to hear each other and record the deliberations.

 

4.9	Circular Resolutions

 

Subject to Clause 6 (Reserved Matters) of this Agreement and the provisions of the Act which do not permit certain businesses to be approved by circular resolution, a circular resolution in writing, approved and executed by a majority of the Directors as are entitled to vote thereon, shall constitute a valid decision of the Board, provided that, such resolution was sent to all of the Directors at least 7 (seven) days in advance, unless all the Directors unanimously agree on a shorter period, together with a copy of all supporting and necessary papers as may be required to vote on such resolution at their usual address by hand delivery or by speed post or registered post or by courier, or through such electronic means including registered email address of the Directors and such other compliance as required under the Act. Where not less than one-third of the total Directors (such one-third must include at least the Directors constituting valid quorum in accordance with Clause 4.7.1) holding office require the resolution under circulation to be decided at a meeting of the Board, the Chairman shall put that/those resolution(s) for consideration at a meeting of the Board.

 

4.10	Finalisation of minutes of Board meetings

 

The Chairman of any meeting of the Board shall cause minutes of such meeting of the Board to be prepared and share the draft minutes with all the other Directors within 15 (fifteen) calendar days of the meeting. Each Director shall provide comments (if any) on the draft minutes of the meeting to the Company, promptly but no later than 7 (seven) calendar days of receipt of the draft minutes. If no comments are received by the Company from a Director within the said 7 (seven) day period, then the draft minutes shall be deemed to be accepted by the relevant Director. All comments made by any Director on the draft minutes of the meeting shall be recorded in the minutes of the meeting to the satisfaction of the relevant Director making such comments. The minutes shall be signed as per the provisions of the Act.

 

SHAREHOLDERS’ AGREEMENT

 

 

4.11	Committees of the Board

 

4.11.1

The Board shall constitute committees of the Board as required under Applicable Law, and as the Board may deem fit for the proper management good governance and effective functioning of the Company (“Board Committees”).

 

4.11.2

1 (one) Minority Shareholder Director holding office on the Board shall be entitled to be a member on each Board Committee.

 

4.11.3

All provisions of this Agreement relating to the conduct of meetings and other proceedings of the Board shall apply mutatis mutandis to the conduct of meetings and other proceedings of each of the Board Committees.

 

5.	GENERAL MEETINGS AND VOTING

 

5.1	General Meeting of Shareholders

 

An annual general meeting of the Shareholders shall be held not later than 6 (six) calendar months from the end of every Financial Year unless otherwise agreed to by the Shareholders as per the provisions of Applicable Law. Subject to the foregoing, the Board, on its own or at the request of the Shareholders in accordance with Applicable Law, may convene an extraordinary general meeting of the Shareholders, whenever it may deem appropriate.

 

5.2	Notice of Shareholder Meetings

 

5.2.1

No meeting of the Shareholders (“General Meeting”) shall be convened unless the agenda items to be placed at such General Meeting have been discussed and approved at a meeting of the Board.

 

5.2.2

Prior written notice of at least 15 (fifteen) days for convening a General Meeting shall be given to all the Shareholders. A General Meeting may, however, be called at shorter notice subject to compliance with Applicable Law.

 

5.2.3

The notice for a General Meeting shall specify the place, date and time of the meeting. Every notice convening a General Meeting shall set forth in full and sufficient detail the business to be transacted thereat, and no business shall be transacted at such General Meeting unless the same has been stated in the notice convening the General Meeting.

 

5.3

Quorum

 

Valid quorum for any General Meeting shall be as prescribed under Applicable Law, provided that, the presence of at least 1 (one) authorised representative of Mold-Tech at the commencement of, and throughout the duration of, the General Meeting shall be required to constitute valid quorum. For avoidance of doubt, it is clarified that, no Reserved Matter shall be transacted or decided or voted upon in a General Meeting unless the Minority Shareholders’ representative (acting on behalf of the Minority Shareholders) has granted prior written approval, or waived the Minority Shareholders’ consent, for such Reserved Matter prior to such meeting.

 

SHAREHOLDERS’ AGREEMENT

 

 

5.4

Voting

 

5.4.1

All General Meetings shall be held in accordance with the Act and all voting rights shall be exercised at a General Meeting in accordance with the Act and the provisions of the Articles of Association.

 

5.4.2

The Parties hereby undertake to ensure that they and their representatives, proxies and agents representing them at General Meetings shall always exercise their votes in respect of the Securities in such manner as required to comply with, and to implement the provisions of, this Agreement.

 

5.5

Proxies

 

Any Shareholder may appoint another Person as its proxy (and in case of a corporate shareholder, an authorised representative) to attend a General Meeting and vote thereat on such Shareholder’s behalf, provided that, the power given to such proxy or authorised representative, as applicable, must be in writing and delivered to the Company prior to the commencement of such General Meeting.

 

5.6	Management of Subsidiaries

 

The Parties shall use commercially reasonable endeavours to ensure that the rights of the Minority Shareholders with respect to the Company and as set out in Clause 4 (Management of the Company) and Clause 6 (Reserved Matters), to the extent applicable, shall also extend to each Subsidiary (including Amtran) and shall be applicable mutatis mutandis to such Subsidiary (including Amtran) and the term ‘Company’ wherever used in such clauses shall refer to such Subsidiary (including Amtran) to give effect to the foregoing, provided that, all rights of the Minority Shareholders in respect of the Subsidiary (including Amtran) shall be exercised solely by, and through, the Company (including by exercising voting rights and any other rights available to it with respect to any Subsidiary) and not directly by the Minority Shareholders. In the event of any inconsistency between the provisions of the constitutional/charter documents of any Subsidiary (including Amtran) and the provisions of this Clause 5.6 (Management of Subsidiaries) read in conjunction with any other provision of this Agreement which contains rights of the Minority Shareholders with respect to the Company, the understanding set forth in this Clause 5.6 (Management of Subsidiaries) shall prevail and the Company shall, and the Shareholders shall cause the Company to, take such actions as may be required (including voting in favour of necessary amendments to such inconsistent provisions) in order to remove the inconsistency in question.

 

6.	RESERVED MATTERS

 

6.1

Notwithstanding anything contained in the Transaction Documents and/or the Articles of Association and/or the articles of association of any Subsidiary, so long as the Minority Shareholders hold Securities, any action, decision, and/or resolution relating to, or in respect of, any of the matters set out in Schedule 4 (each a “Reserved Matter”) shall not be taken, passed, implemented, acted upon, effected or otherwise undertaken by the Company and/or any Subsidiary, either by way of a Board approval or by way of approval of the Shareholders or in any other manner whatsoever, without prior written consent of the Minority Shareholders. If any action, decision and/or resolution in relation to any Reserved Matter is purportedly taken, passed, implemented, acted upon, effected or undertaken by the Company or any Subsidiary, without prior written consent of the Minority Shareholders, such action, decision and/or resolution shall be void ab initio.

 

SHAREHOLDERS’ AGREEMENT

 

 

6.2	The Minority Shareholders may provide their prior written consent to any action or decision in relation to a Reserved Matter in any of the following ways:

 

6.2.1

by the affirmative vote of the authorised representative/proxy of the Minority Shareholders on a resolution contemplating such action or decision in relation to such Reserved Matter which is put to vote at a validly convened General Meeting; or

 

6.2.2

by the affirmative vote of at least 1 (one) Minority Shareholder Director on a resolution contemplating such action or decision in relation to such Reserved Matter which is put to vote at a validly convened meeting of the Board;or

 

6.2.3

by a written notice delivered by the Minority Shareholders’ representative to the Company,

 

provided that: (a) if the Minority Shareholders’ representative conveys the Minority Shareholders’ dissent (in writing) with respect to any action or decision in relation to a Reserved Matter prior to a Board meeting or a General Meeting at which such action or decision is to be considered or put to vote, then such action or decision shall not be put to vote or decided upon at such Board meeting or General Meeting, as applicable; and (b) if the Minority Shareholders’ representative conveys the Minority Shareholders’ consent (in writing) with respect to any action or decision in relation to a Reserved Matter prior to a Board meeting or a General Meeting at which such action or decision is to be considered or put to vote, then such action or decision shall not require the affirmative vote of any Minority Shareholder Director at such Board meeting or the authorised representative/proxy of the Minority Shareholders at such General Meeting, as applicable.

 

7.	TRANSFER OF SECURITIES

 

7.1	General provisions in relation to transfers

 

7.1.1

Any Transfer of Securities or any rights attached to Securities in breach of this Agreement shall be null and void ab initio.

 

7.1.2

Except for any Transfer of Securities under and in accordance with Clause 8 (Exit) which results in the Minority Shareholders ceasing to hold Securities and any Transfer of Securities to any Person who is already a party to this Agreement (as on the date of the proposed Transfer) pursuant to the other provisions of this Agreement, it shall be a condition precedent to any proposed sale or Transfer of Securities by any Shareholder that the transferee of such Securities enters into a Deed of Adherence and delivers an executed Deed of Adherence to the Company prior to any Securities being Transferred to such transferee. Any sale or Transfer of Securities by a Shareholder without the transferee executing and delivering to the Company a Deed of Adherence shall be null and void ab initio.

 

7.2	Lock-In of Minority Shareholders’ Securities

 

7.2.1

Subject to Clause 7.2.4 and Clause 7.2.5 below, on and from the Effective Date, each Minority Shareholder covenants, acknowledges, and undertakes that such Minority Shareholder and its Permitted Affiliates holding any Securities shall not Transfer any Securities held by them to any Person (except as contemplated in Clause 7.2.2, Clause 7.2.4 and/or Clause 7.2.5) until the expiry of Share Swap Deadline Date. It is further agreed and acknowledged by the Minority Shareholders that: (a) from the Effective Date and until the expiry of the Share Swap Deadline Date, the Minority Shareholders shall be permitted to Transfer their Securities only in accordance with Clause 7.2.2, Clause 7.2.4 and/or Clause 7.2.5 below; and (b) after the expiry of the Share Swap Deadline Date, in the event the Minority Shareholders continue to hold any Securities and no Share Swap has occurred by the Share Swap Deadline Date, the Minority Shareholders and their Permitted Affiliates holding Securities shall have the right to Transfer their Securities in the manner as set out in Clause 7.2.3 below or pursuant to Clause 8 (Exit).

 

SHAREHOLDERS’ AGREEMENT

 

 

7.2.2

Share Swap of Minority Shareholders Securities

 

(a)

If the RBI Approval is received by the Minority Shareholders on or before the 1st anniversary of the Effective Date (or such extended date as mutually agreed in writing by the Minority Shareholders, Mold-Tech, and SIC), then, within 30 (thirty) days from the date of receipt the RBI Approval or such extended period as mutually agreed by the Minority Shareholders, Mold-Tech, and SIC in writing, the Minority Shareholders and their Permitted Affiliates which hold Securities shall Transfer to Mold-Tech and/or its Affiliate(s) all (but not less than all) of Securities held by them (“Minority Equity Interests”) in lieu of an aggregate consideration equal to such number of shares in the common stock of SIC as calculated in accordance with Clause 7.2.2(b) (“Share Swap”).

 

(b)

The total number of shares in the common stock of SIC that will be issued and allotted as part of the Share Swap and in consideration of the Minority Equity Interests (being the “Stock Consideration”) will be calculated in the following manner:

 

Stock Consideration = Minority Equity Interests Value divided by Benchmark Price, where:

 

“Benchmark Price” shall mean the price per share of the common stock of SIC which is the lower of: (i) the average closing share price of common stock of SIC for the 30 (thirty) consecutive trading days’ period ending at the close of regular trading hours on the 3^rd (third) trading day prior to the date on which the Share Swap is proposed to be undertaken in accordance with Clause 7.2.2(a); and (ii) the share price of common stock of SIC at which any of the Sellers and/or any Person Controlled by any of the Sellers acquires shares in the common stock of SIC on the Closing Date.

 

(c)

Subject to receipt of RBI Approval prior to the 1st anniversary of the Effective Date (or such extended date as mutually agreed in writing by the Minority Shareholders, Mold-Tech, and SIC), the Minority Shareholders shall, and shall cause their respective Permitted Affiliates holding Securities to, undertake all necessary actions as specified in the SPA or otherwise agreed to in writing by the Minority Shareholders, Mold-Tech, and SIC as being required to Transfer the Minority Equity Interests to Mold-Tech and/or its Affiliate(s) and subscribe to the Stock Consideration in accordance with the Applicable Law, including but not limited to completion of reporting requirements under the FEMA Regulations, and SIC shall undertake all necessary actions as specified in the SPA or otherwise agreed to in writing by the Minority Shareholders, Mold-Tech, and SIC as being required to issue and allot the Stock Consideration to the Minority Shareholders and their respective Permitted Affiliated holding Securities.

 

7.2.3

Put Option and Call Option

 

(a)

Minority Shareholders Put Option: After the expiry of the Share Swap Deadline Date, the Minority Shareholders shall have the right (but not the obligation) to Transfer, and cause their respective Permitted Affiliates to Transfer, up to such number of Securities forming part of the Minority Equity Interests as set out in table below in Clause 7.2.3(b) to Mold-Tech (such right being the “Minority Shareholders Put Option”) by sending a written notice in this regard to Mold-Tech and the Company (“Put Option Notice”). The Put Option Notice shall specify the identity of the Minority Shareholders and/or their respective Permitted Affiliates who propose to Transfer Securities to Mold-Tech and the total number of Securities proposed to be Transferred by each of them to Mold-Tech (“Put Securities”). Within 60 (sixty) days of the date of issue of the Put Option Notice, Mold-Tech shall be obligated to purchase the relevant Put Securities specified in the Put Option Notice for the Sale Consideration.

 

SHAREHOLDERS’ AGREEMENT

 

 

(b)

The Minority Shareholders shall have the right to exercise the Minority Shareholders Put Option in the following manner to require Mold-Tech to purchase up to such number of Securities forming part of the Minority Equity Interests as set forth below:

 

Frequency of exercise and exercise period for Minority Shareholders Put Option	Maximum number of Put Securities
Once, in the period commencing on the date falling immediately after the 1st anniversary of the Effective Date and ending on the 2nd anniversary of the Effective Date (“Minority Shareholders Put Option Exercise Period 1”)	Up to such number of Securities that constitutes 33% of the Minority Equity Interests
Once, in the period commencing on the date falling immediately after the 2nd anniversary of the Effective Date and ending on the 3rd anniversary of the Effective Date (“Minority Shareholders Put Option Exercise Period 2”)	Up to such number of Securities that, when aggregated with the total number of Securities Transferred by the Minority Shareholders and their Permitted Affiliates to Mold-Tech and/or any other Standex Affiliate during Minority Shareholders Put Option Exercise Period 1, constitutes 66% of the Minority Equity Interests
Once, in the period commencing on the date falling immediately after the 3rd anniversary of the Effective Date and ending on the date on which the Minority Shareholders and their Permitted Affiliates cease to hold Minority Equity Interests (“Minority Shareholders Put Option Exercise Period 3”)	Up to such number of Securities that, when aggregated with the total number of Securities Transferred by the Minority Shareholders and their Permitted Affiliates to Mold-Tech and/or any other Standex Affiliate during Minority Shareholders Put Option Exercise Period 1 and Minority Shareholders Put Option Exercise Period 2, constitutes 100% of the Minority Equity Interests

 

(c)

Mold-Tech Call Option: At any time after expiration of the 3rd (third) anniversary of the Effective Date, Mold-Tech shall have the right (but not the obligation) to require the Minority Shareholders and their respective Permitted Affiliates holding Securities to Transfer to Mold-Tech up to such portion of the Minority Equity Interests as set out in the table below in Clause 7.2.3 (d) (such right being the “Call Option”) by sending a written notice in this regard to the Minority Shareholders and the Company (“Call Option Notice”). The Call Option Notice shall specify the identity of the Minority Shareholders and/or their respective Permitted Affiliates who are required to Transfer Securities to Mold-Tech and the total number of Securities required to be Transferred by each of them to Mold-Tech (“Call Securities”). Within 60 (sixty) days of the date of issue of the Call Option Notice, the Minority Shareholders shall be obligated to Transfer the relevant Call Securities specified in the Call Option Notice to Mold-Tech for the Sale Consideration.

 

SHAREHOLDERS’ AGREEMENT

 

 

(d)

Mold-Tech shall have right to exercise the Call Option in the following manner to require the Minority Shareholders and their Permitted Affiliates to Transfer up to such number of Securities forming part of the Minority Equity Interests as set forth below:

 

Frequency of exercise and exercise period for Call Option	Maximum number of Call Securities
Once, in the period commencing on the date falling immediately after the 3rd anniversary of the Effective Date and ending on the 4th anniversary of the Effective Date (“Call Option Exercise Period 1”)	Up to such number of Securities that, when aggregated with the total number of Securities Transferred by the Minority Shareholders and their Permitted Affiliates to Mold-Tech and/or any other Standex Affiliate during Minority Shareholders Put Option Exercise Period 1, Minority Shareholders Put Option Exercise Period 2, and Minority Shareholders Put Option Exercise Period 3, constitutes 33% of the Minority Equity Interests
Once, in the period commencing on the date falling immediately after the 4th anniversary of the Effective Date and ending on the 5th anniversary of the Effective Date (“Call Option Exercise Period 2”)	Up to such number of Securities that, when aggregated with the total number of Securities Transferred by the Minority Shareholders and their Permitted Affiliates to Mold-Tech and/or any other Standex Affiliate during Minority Shareholders Put Option Exercise Period 1, Minority Shareholders Put Option Exercise Period 2, Minority Shareholders Put Option Exercise Period 3, and Call Option Exercise Period 1, constitutes 66% of the Minority Equity Interests
Once, in the period commencing on the date falling immediately after the 5th anniversary of the Effective Date and ending on the date on which the Minority Shareholders and their Permitted Affiliates cease to hold Minority Equity Interests (“Call Option Exercise Period 3”)	Up to such number of Securities that, when aggregated with the total number of Securities Transferred by the Minority Shareholders and their Permitted Affiliates to Mold-Tech and/or any other Standex Affiliate during Minority Shareholders Put Option Exercise Period 1, Minority Shareholders Put Option Exercise Period 2, Minority Shareholders Put Option Exercise Period 3, Call Option Exercise Period 1, and Call Option Exercise Period 2, constitutes 100% of the Minority Equity Interests

 

SHAREHOLDERS’ AGREEMENT

 

 

(e)

Determination of Price

 

(i)

Immediately upon issuance of the Put Option Notice or the Call Option Notice, as the case may be, and in any event no later than 7 (seven) days therefrom, the Company shall provide: (A) the last audited financial statements of the Company, comprising of profit and loss statement, balance sheet, and cashflow statement; (B) the unaudited financial statements of the Company comprising of profit and loss statement, balance sheet, and cashflow statement for the last 12 (twelve) months preceding the month in which the Put Option Notice or the Call Option Notice, as applicable, is issued; (C) the calculation and the breakdown of the EBITDA for the last 12 (twelve) months preceding the month in which the Put Option Notice or the Call Option Notice, as applicable, is issued; and (D) such other documents as may be reasonably requested in writing by Mold-Tech and the Minority Shareholder(s) from the Company (“Computation Documents”).

 

(ii)

The Sale Consideration shall be computed by using the formula below:

 

“Sale Consideration” = Company Valuation multiplied by the percentage of Minority Equity Interests being sold by a Minority Shareholder or a Permitted Affiliate of a Minority Shareholder to Mold-Tech pursuant to exercise of the Minority Shareholders Put Option or the Call Option, as the case may be;

 

where “Company Valuation” shall, subject to Applicable Law, be the higher of: (a) Floor Valuation; and (b) 12 (twelve) times the EBITDA for the last 12 (twelve) months preceding the month in which the Put Option Notice or the Call Option Notice, as applicable, is issued.

 

(iii)

In the event of any dispute between Mold-Tech and the Minority Shareholders on the calculation of the Sale Consideration, the Company Valuation, and/or EBITDA, the Company shall, upon written request from Mold-Tech or the Minority Shareholders, appoint an Accounting Firm acceptable to Mold-Tech and the Minority Shareholders (“Independent Accountant”) to determine the Sale Consideration, the Company Valuation, and/or EBITDA (to the extent disputed between Mold-Tech and the Minority Shareholders) basis the Computation Documents and as per the applicable Indian Accounting Standards and Applicable Law, within 30 (thirty) Business Days from the date of its appointment. The cost of appointment of such Independent Accountant shall be borne by the Company.

 

(iv)

There shall be no ex parte communications between Mold-Tech, Minority Shareholders or any of their respective Affiliates and/or authorised representatives or advisors, directly or indirectly, on the one hand, and Independent Accountant on the other hand, in relation to the computation of Sale Consideration, Company Valuation, and/or EBITDA, as the case may be. Any determination by the Independent Accountant of Sale Consideration, Company Valuation, and/or EBITDA, as the case may be, shall become conclusive and binding upon the Parties and none of the Parties shall be entitled to challenge or dispute such determination.

 

SHAREHOLDERS’ AGREEMENT

 

 

(f)

Right to Nominate

 

Notwithstanding anything to the contrary contained in this Agreement, Mold-Tech shall be entitled to nominate any Standex Affiliate to acquire the Put Securities or the Call Securities pursuant to Clause 7.2.3. It is clarified that in the event of such nomination by Mold-Tech, all references to Mold-Tech in Clause 7.2.3 (other than this Clause 7.2.3(f)) shall be deemed to be a reference to such relevant Standex Affiliate as nominated by Mold-Tech in accordance with this Clause 7.2.3(f).

 

7.2.4

Upon death of any of the Minority Shareholders, subject to submission of appropriate legal documentation required under Applicable Law to complete the transmission process and subject to signing of a Deed of Adherence by the relevant legal heir(s) of such Minority Shareholder, all Securities held by such Minority Shareholder at the time of his death shall be Transferred to the relevant legal heir(s) of such Minority Shareholder. The legal heir(s) of such Minority Shareholder shall be bound by the terms of this Agreement which were applicable to such Minority Shareholder immediately prior to his death and shall execute and deliver to the Company the Deed of Adherence prior to Transfer of all Securities held by the Minority Shareholder at the time of his death. After executing and delivering the Deed of Adherence to the Company, the legal heir(s) of a deceased Minority Shareholder shall be entitled to exercise the Minority Shareholders Put Option to sell the Minority Equity Interests held by such legal heir(s) in accordance with Clause 7.2.3.

 

7.2.5

Nothing in this Clause 7 shall apply to any Transfer of Securities by the Minority Shareholders to their Permitted Affiliates, subject to satisfaction of each of the following conditions:

 

(a)

the Minority Shareholders desiring to Transfer its Securities to any Permitted Affiliate, shall, prior to any such Transfer, notify the other Parties of such proposed Transfer and shall undertake, jointly and severally with the Permitted Affiliate, to the other Parties that any such Permitted Affiliate shall comply with the provisions of this Agreement;

 

(b)

the Permitted Affiliate shall execute a Deed of Adherence;

 

(c)

this Agreement and the Articles shall apply as if the Minority Shareholders and their respective Permitted Affiliate, as the case may be, are one single party, and the Minority Shareholders and their respective Permitted Affiliate shall be considered as a single block of Shareholders for the purposes of this Agreement and the Articles and shall act and vote as a single block;

 

(d)

the Minority Shareholders shall, prior to any Transfer of Securities to their respective Permitted Affiliates, undertake to the other Parties that the Securities proposed to be Transferred to the Permitted Affiliate shall be forthwith re-Transferred to the Minority Shareholder, or any other Permitted Affiliate (who shall also be required to execute a Deed of Adherence), if and when the Permitted Affiliate ceases to be a Permitted Affiliate of the Minority Shareholders; and

 

SHAREHOLDERS’ AGREEMENT

 

 

(e)

the Minority Shareholders shall continue to remain a party to this Agreement and be jointly and severally liable with their respective Permitted Affiliate in respect of the transferred Securities.

 

8.

EXIT

 

8.1	Tag Along Right

 

8.1.1

In the event of any proposed Transfer of Securities held by Mold-Tech and/or any of its Affiliates, as the case may be, to any Purchaser(s), the Minority Shareholders and its Permitted Affiliates shall have the right (but not the obligation) to require Mold-Tech and/or its Affiliates to cause the Purchaser(s) to purchase up to such portion of the Minority Equity Interests that is proportionate to the total number of Securities proposed to be Transferred by Mold-Tech and/or any of its Affiliates to the Purchaser, provided that, if the proposed Transfer of Securities by Mold-Tech and/or any of its Affiliates to the Purchaser, in a single transaction or a series of related transactions, will result in a Change in Control, then the Minority Shareholders and its Permitted Affiliates shall have the right (but not the obligation) to require Mold-Tech and/or its Affiliates to cause the Purchaser(s) to purchase up to all of the Minority Equity Interests held by them , in the manner set out in this Clause 8.1 (“Tag Right”). For avoidance of doubt, it is clarified that Tag Right available to the Minority Shareholders and its Permitted Affiliates shall not apply in case of any direct or indirect change of Control of SIC.

 

8.1.2

Notice

 

Prior to Transferring any Securities to any Purchaser, Mold-Tech and/or any of its Affiliates (as the case may be) (“Selling Investor”) shall deliver a written notice to the Minority Shareholders (the “Transfer Notice”). The Transfer Notice must specify: (a) the number and kind of Securities proposed to be sold by the Selling Investor to the Purchaser (“Subject Securities”); (b) the price per Security offered by the Purchaser to the Selling Investor for purchasing the Subject Securities (“Tag Price”); (c) identity of the Purchaser; (d) any other terms and conditions on which the sale and purchase of the Subject Securities is proposed to occur; and (e) a confirmation that the Purchaser has been informed of the Tag Right of the Minority Shareholders under this Clause 8.1 (Tag Along Right).

 

8.1.3

Exercise

 

In order to exercise the Tag Right under Clause 8.1 (Tag Along Right), the Minority Shareholders shall deliver a written notice to the Selling Investor (“Tag Exercise Notice”) within 10 (ten) days of receipt of the Transfer Notice (the “Tag Response Period”), specifying the number of Securities (such specified number, the “Tagged Securities”), that the Minority Shareholders and their Permitted Affiliates wish to sell to the Purchaser, at the Tag Price and on the terms and conditions as specified in the Transfer Notice, provided that, the total number of Tagged Securities may be up to: (a) 100% of the Minority Equity Interests held by the Minority Shareholders and their Permitted Affiliates, if the proposed Transfer of Subject Securities is intended to result in a Change in Control; or (b) such number of Securities which is proportionate to the total number of Subject Securities, in any other case.

 

SHAREHOLDERS’ AGREEMENT

 

 

8.1.4

Irrevocable Acceptance

 

Upon delivery of a Tag Exercise Notice within the Tag Response Period: (a) the Minority Shareholders and their Permitted Affiliates shall be irrevocably bound and obligated to sell the Tagged Securities; and (b) the Selling Investor shall be irrevocably bound and obligated to procure the sale of the Tagged Securities, simultaneously with the sale of the Subject Securities to the Purchaser, and such sale of Tagged Securities and the Subject Securities shall occur at the Tag Price and on the terms and conditions specified in the Transfer Notice.

 

8.1.5

Sale Consummation

 

The closing/completion of the sale and purchase of the Subject Securities and the Tagged Securities will take place simultaneously at the Tag Price, and on terms and conditions set out in the Transfer Notice. For the avoidance of doubt, the sale of any Subject Securities by the Selling Investor to the Purchaser shall be conditional upon the sale of all Tagged Securities by the Minority Shareholders and their Permitted Affiliates to such Purchaser.

 

8.1.6

Revival

 

If the proposed Transfer of Subject Securities and the Tagged Securities (if the Tag Right is exercised by the Minority Shareholders) to any Purchaser is not completed or consummated within 90 (ninety) days of the expiry of the Tag Response Period, then the Transfer Notice in respect of such proposed Transfer shall be void ab initio, and the provisions of this Clause 8.1 (Tag Along Right) must be once again complied with prior to any proposed Transfer of Securities by Mold-Tech and/or its Affiliates to any Purchaser. Provided that, where the proposed Transfer of Subject Securities and/or the Tagged Securities requires any prior Governmental Approval, such time period for the completion or consummation of such proposed Transfer will be extended to the date falling 15 (fifteen) Business Days from the date of receipt of the last of such Governmental Approvals.

 

8.1.7

Representations and Warranties

 

In connection with Transfer of any Tagged Securities to a Purchaser, the Minority Shareholders and/or their Permitted Affiliates, shall not be required to make any representations or warranties or provide any indemnity to the Purchaser, other than representations, warranties and corresponding indemnities relating to: (a) title of the Tagged Securities; (b) the ability and authority to sell the Tagged Securities; and (c) such Tagged Securities being free and clear of any and all Encumbrances.

 

8.2	Drag Along Right

 

8.2.1

Without prejudice to the obligation of Mold-Tech to purchase Minority Equity Interests under this Agreement, any time after the Share Swap Deadline Date, Mold-Tech and/or its Affiliates shall have the right to Transfer all or part of its Securities to any Purchaser (the “Drag Purchaser”) and if the Drag Price is not less than the price per Security that the Minority Shareholders and their Permitted Affiliates would receive pursuant to the exercise of the Minority Shareholders Put Option or the Call Option, then Mold-Tech shall have the right to require the Minority Shareholders and their respective Permitted Affiliates (each such Shareholder, a “Dragged Shareholder”) to sell to the Drag Purchaser such portion of the Minority Equity Interests that is proportionate to the number of Securities being Transferred by Mold-Tech or any of its Affiliates (as the case may be) to the Drag Purchaser (“Dragged Securities”) (simultaneous sale/Transfer of the Dragged Securities and the Dragging Securities to the Drag Purchaser being the “Drag Sale”) in the manner provided in this Clause 8.2 (Drag Along Right) (“Drag Right”). Provided that, if such sale by Mold-Tech and/or its Affiliate results in a Change in Control, Mold-Tech shall have the right to exercise the Drag Right to require the Dragged Shareholders to sell all Minority Equity Interests (calculated on a Fully Diluted Basis) as the Dragged Securities to the Drag Purchaser in the Drag Sale.

 

SHAREHOLDERS’ AGREEMENT

 

 

8.2.2

Drag Exercise

 

In connection with a Drag Sale, Mold-Tech (at its discretion) shall deliver a written notice to the Dragged Shareholder (the “Drag Notice”) requiring the Dragged Shareholder to proceed with a sale of the Dragged Securities in accordance with the provisions of this Clause 8.2 (Drag Along Right).

 

8.2.3

Drag Notice

 

The Drag Notice shall specify: (a) the identity of the Drag Purchaser; (b) the total number and type of Securities to be Transferred by Mold-Tech and/or its Affiliates to the Drag Purchaser (“Dragging Securities”); (c) the price per Security at which the Dragging Securities and the Dragged Securities shall be sold to the Drag Purchaser, including any cash or non-cash component (the “Drag Price”); (d) the proposed date of closing of the Drag Sale; (e) the terms and conditions for the Drag Sale, which shall not be any less favourable than the terms and conditions at which Minority Shareholders and their Permitted Affiliates would have sold their Securities pursuant to the Minority Shareholders Put Option or Call Option (as the case may be); and (f) other material terms and conditions (if any) on which the Drag Sale will take place.

 

8.2.4

Irrevocable Obligation

 

Upon delivery of the Drag Notice, the Dragged Shareholder(s) shall be irrevocably bound and obligated to sell to the Drag Purchaser (along with the Securities held by Mold-Tech) all of the Dragged Securities, at the Drag Price. In any Drag Sale:

 

(a)

the Dragged Securities will be Transferred to the Drag Purchaser on the same terms and conditions as the Dragging Securities being sold by Mold-Tech or its Affiliates to the Drag Purchaser and the Dragged Shareholder(s) shall provide representations, warranties and indemnities in favour of the Drag Purchaser in accordance with Clause 8.2.5 (Representations and Warranties), provided that, no Dragged Shareholder shall be required to provide any representations, warranties and indemnities in connection with the Transfer of any Dragged Securities except as set forth in Clause 8.2.5 (Representations and Warranties);

 

(b)

the Drag Purchaser will be obligated to purchase the Dragging Securities and the Dragged Securities simultaneously, and the Transfer of any Dragging Securities to the Drag Purchaser shall be conditional upon the Transfer of all Dragged Securities by the Dragged Shareholders to such Drag Purchaser;

 

(c)

in connection with a Drag Sale, the Dragged Shareholders hereby agree to undertake the following actions for completing the Drag Sale:

 

(i)

obtaining all requisite consents and approvals (including, any Governmental Approvals) for Transfer of the Dragged Securities to the Drag Purchaser;

 

SHAREHOLDERS’ AGREEMENT

 

 

(ii)

co-operate in making all necessary filings in connection with the Transfer of the Dragged Securities to the Drag Purchaser in such Drag Sale; and

 

(iii)

not exercising any approval or voting rights attached to their Equity Shares in a manner contrary to the closing of the Drag Sale, provided such Drag Sale is undertaken in accordance with this Clause 8.2 (Drag Along Right).

 

8.2.5

Representations and Warranties

 

(a)

In connection with Transfer of any Dragged Securities to a Drag Purchaser, the Dragged Shareholders shall not be required to make any representations or warranties or provide any indemnity, other than representations, warranties and corresponding indemnities relating to: (a) title of the Dragged Securities; (b) the ability and authority to sell the Dragged Securities; and (c) such Dragged Securities being free and clear of any and all Encumbrances.

 

(b)

Notwithstanding anything to the contrary contained in this Agreement, the Dragged Shareholders shall not, under any circumstances, Transfer any of the Securities held by them in any manner, except as provided for in this Clause 8.2 (Drag Along Right), after the receipt of a Drag Notice by the Dragged Shareholders, subject to Clause 8.2.6.

 

8.2.6

No Dragged Shareholder shall, under any circumstances, Transfer any of the Securities held by it in any manner, except as provided for in this Clause 8.2 (Drag Along Right), after the receipt of a Drag Notice, until consummation of the Drag Sale or withdrawal of the Drag Notice by Mold-Tech in writing, provided that, if the Drag Sale is not completed within a period of 120 (one hundred and twenty) days from the issue of the Drag Notice, or if such Drag Sale requires any Governmental Approval, within 15 (fifteen) Business Days after the receipt of last of the requisite Governmental Approvals (“Drag Expiry Period”), then the obligations of the Dragged Shareholders under this Clause 8.2 (Drag Along Right) shall fall away immediately upon the expiry of the Drag Expiry Period.

 

9.	COVENANTS OF THE PARTIES

 

9.1	Compliance with Anti-Corruption Laws and Anti-Money Laundering Laws

 

The Company shall not, in relation to the Company and/or the Business undertaken by the Company, breach any provisions of any Anti-Corruption Laws and Anti-Money Laundering Laws.

 

9.2	Exclusive Vehicle

 

Mold-Tech undertakes to the Company and the Minority Shareholders that, till the time any of the Minority Shareholders and/or any of their Permitted Affiliates holds any Securities, the Company shall be the exclusive vehicle through which Mold-Tech and/or its Affiliates shall pursue the Business and any other activity which is similar to, relating to or ancillary to the Business, except for any business conducted by Mold-Tech and/or its Affiliates in the region of: (a) North America; (b) Central America; and (c) South America; or (d) such other region as may be agreed between the Parties, in writing.

 

SHAREHOLDERS’ AGREEMENT

 

 

9.3	Procurement Obligations

 

9.3.1

SIC expressly undertakes that it shall, so far as it lawfully can and to the maximum extent permitted under Applicable Law, exercise its rights and powers with respect to Mold-Tech and/or any Standex Affiliate that acquires and holds Securities in accordance with this Agreement, to procure the performance of Mold-Tech’s and/or such Standex Affiliate’s obligations under or otherwise arising out of or in connection with this Agreement (as any of such obligations may from time to time be varied, extended, increased or replaced).

 

9.3.2

SIC expressly agrees and undertakes that, so far as it lawfully can and to the maximum extent permitted under Applicable Law, through its nominee(s) on the board of directors, or as a shareholder of, Mold-Tech and/or any Standex Affiliate, SIC shall not, and shall cause Mold-Tech and/or any Standex Affiliate that acquires and holds Securities in accordance with this Agreement to not, initiate or approve anything which may result in Mold-Tech and/or such Standex Affiliate being in breach of its obligations under this Agreement. If Mold-Tech and/or such Standex Affiliate proposes to do or omit to do anything that may result in a breach by Mold-Tech and/or such Standex Affiliate of its obligations under this Agreement, SIC shall, (and shall, subject to Applicable Law, ensure that its nominees on the board of directors of Mold-Tech and/or such Standex Affiliate), exercise its voting and other rights in Mold-Tech and/or such Standex Affiliate to prevent Mold-Tech and/or such Standex Affiliate from doing or failing to do anything which may result in Mold-Tech and/or such Standex Affiliate being in breach of its obligations under this Agreement.

 

9.3.3

SIC expressly acknowledges and agrees that in the event Mold-Tech and/or any Standex Affiliate that acquires and holds Securities in accordance with this Agreement fails to comply with any of its obligations in this Agreement, SIC shall, severally as well as jointly with Mold-Tech and/or such Standex Affiliate, be liable for such failure.

 

9.3.4

If Mold-Tech Transfers all Securities held by it to one or more Standex Affiliates, all such Standex Affiliates shall become parties to this Agreement and be jointly and severally liable in respect of Mold-Tech’s obligations under this Agreement, and SIC’s obligations set forth in Clauses 9.3.1 to 9.3.3 shall apply with respect to all such Standex Affiliates.

 

10.	TERM AND TERMINATION

 

10.1	Term and Termination

 

10.1.1

This Agreement shall continue to remain in force until terminated upon the occurrence of any of the following events:

 

(a)

with respect to all Parties, on the mutual consent of the Parties in writing;

 

(b)

automatically, with respect to a Party, forthwith upon such Party ceasing to hold any Securities (in the manner permitted hereunder);

 

(c)

automatically, with respect to all Parties, upon (i) Transfer of the Minority Equity Interests to Mold-Tech or any of its Affiliates pursuant to the Share Swap; (ii) Transfer of all (but not less than all) of the Minority Equity Interests pursuant to the Minority Shareholders Put Option or Call Option, in accordance with the terms of this Agreement; or (iii) Transfer of all (but not less than all) of the Minority Equity Interests pursuant to the Tag Right or Drag Right;

 

(d)

automatically, with respect to all Parties, upon termination of the SPA in accordance with the terms thereunder.

 

SHAREHOLDERS’ AGREEMENT

 

 

10.1.2

Consequences of Termination

 

(a)

Termination of this Agreement shall not relieve any Party of any obligation or liability accrued prior to the date of termination.

 

(b)

The provisions of Clause 1 (Definitions and Interpretation), Clause 10.1.2 (Consequences of Termination), Clause 11 (Confidentiality), Clause 12 (Announcements), Clause 13 (Representations and Warranties), Clause 14 (Governing Law and Jurisdiction), Clause 15 (Settlement of Disputes), Clause 16 (Notices) and Clause 18 (Miscellaneous) shall survive the termination of this Agreement.

 

11.	CONFIDENTIALITY

 

11.1

Save as expressly provided in Clause 11.2 below, each Party undertakes that it shall treat as confidential the provisions of this Agreement and all information they have received or obtained relating to the other Party(ies) and/or its Affiliates (including any information that is received as a result of negotiating or entering into this Agreement or the other Transaction Documents).

 

11.2	Disclosure of any information which would otherwise be deemed to be confidential pursuant to Clause 11.1 is permitted, if and to the extent that it:

 

11.2.1

is disclosed to the Representatives, if it is reasonably required in connection with the preparation, execution and/or performance of the Transaction Documents (and provided that such Persons have been informed that the information is confidential);

 

11.2.2

is required by Applicable law or any securities exchange or Governmental Authority to which a Party is subject or pursuant to any order of any Governmental Authority;

 

11.2.3

comes into the public domain other than as a result of a breach by a Party of this Clause 11 (Confidentiality);

 

11.2.4

is required for the purpose of any arbitral or judicial proceedings arising out of this Agreement;

 

11.2.5

is disclosed to Mold-Tech and Minority Shareholders and their respective advisors or consultants and their respective directors, officers, and employees,

 

provided that, prior written notice of any confidential information to be disclosed pursuant to this Clause 11 (Confidentiality) shall be given to the other Parties.

 

11.3	The confidentiality restrictions on the Parties in this Clause 11 (Confidentiality) shall continue to apply for 2 (two) years after the termination of this Agreement pursuant to Clause 10 (Term and Termination).

 

11.4	For purposes of this Clause 11 (Confidentiality), the term “Representatives” means, in relation to a Party, its Affiliates and the directors, officers, employees, agents, advisors, accountants and consultants of that Party and/or of its respective Affiliates.

 

12.	ANNOUNCEMENTS

 

Save as expressly provided in this Clause 12 (Announcements), no announcement shall be made by or on behalf of any Party or its Affiliates relating to the Transaction Documents, or the transactions and arrangements contemplated under the Transaction Documents, without the prior written approval of the other Parties.

 

SHAREHOLDERS’ AGREEMENT

 

 

13.	REPRESENTATIONS AND WARRANTIES

 

13.1	Each Party hereby represents and warrants to the other Parties that as of the Execution Date and the Effective Date:

 

13.1.1

if applicable, it is duly organized and validly existing under Applicable Law of its respective jurisdiction, and has all necessary corporate power, authority and capacity to own, operate and deal with its property and assets, and to carry on its business as it is presently carried on;

 

13.1.2

has full power and authority to enter into, execute and deliver this Agreement and each agreement, certificate, document and instrument to be executed and delivered pursuant to this Agreement, and to comply with and perform its obligations under this Agreement;

 

13.1.3

this Agreement when executed and delivered by it, constitutes legal, valid and binding obligations enforceable against it, in accordance with its terms;

 

13.1.4

the execution, delivery, and performance of this Agreement by it, and the consummation of the transactions contemplated herein, do not and will not:

 

(a)

conflict or violate any provision of its Charter Documents (if applicable);

 

(b)

violate, contravene, or result in breach of any Applicable Law, authorisation, order, judgement or decree against, or binding upon or obtained by it, its securities, properties or business; or

 

(c)

result in any breach or violation of any terms and conditions of, or constitute (with notice, or lapse of time, or both) a default under, or relieve any counterparty of its obligation or otherwise impair the continuation of or impose on it any additional or accelerated obligations or liabilities under that agreement or under any instrument, contract, or other agreement to which it is a party or by which it is bound; and

 

13.1.5

it is not bankrupt or insolvent and no application has been filed in respect of its insolvency; no receiver or an administrative receiver has been appointed and no proceedings have been filed or steps taken against it under which such a Person might be appointed.

 

14.	GOVERNING LAW AND JURISDICTION

 

14.1	This Agreement shall be construed, interpreted, and governed by the laws of India.

 

14.2	Subject to Clause 15 (Settlement of Disputes), the courts in Gujarat shall have exclusive jurisdiction to settle any disputes that may arise out of or in connection with this Agreement including any dispute relating to the existence, validity, or termination of this Agreement.

 

SHAREHOLDERS’ AGREEMENT

 

 

15.	SETTLEMENT OF DISPUTES

 

15.1

In the event of any dispute between Mold-Tech, SIC or any of the Standex Affiliates on one hand and one or more of the Minority Shareholders and/or their Permitted Affiliates on the other hand which arises from or relates to this Agreement (“Dispute”), the Parties shall initially attempt to resolve such Dispute by conducting good faith negotiations amongst themselves. If the parties to the Dispute are unable to resolve the matter through good faith negotiations within 60 (sixty) days from the date on which a written notice of a Dispute is delivered by a party to the Dispute to the other party(ies) to the Dispute, the Dispute shall thereafter be resolved by binding arbitration and each Party hereto hereby waives any right it may otherwise have to the resolution of such Dispute by any means other than binding arbitration pursuant to this Clause 15.1. Whenever Mold-Tech, SIC or any of the Standex Affiliates or one or more of the Minority Shareholders and/or any of their Permitted Affiliates decide to institute arbitration proceedings in connection with a Dispute, it shall provide written notice to that effect to the other party(ies) to the Dispute. The party giving such notice shall, however, refrain from instituting the arbitration proceedings for a period of 60 (sixty) days following such notice. During this period, the parties to the Dispute shall make good faith efforts to amicably resolve the Dispute without referring it to binding arbitration pursuant to this Clause 15.1. All offers of compromise or settlement amongst the parties to the Dispute in connection with the attempted resolution of any Dispute: (a) shall be deemed to have been delivered in furtherance of a Dispute settlement; (b) shall be exempt from discovery and production; and (c) shall not be admissible into evidence (whether as an admission or otherwise) in any proceeding for the resolution of the Dispute. Any arbitration hereunder shall be conducted in accordance with the Arbitration Rules of the Singapore International Arbitration Centre (the “SIAC Rules”), to the exclusion of all other arbitral rules (including those under the (Indian) Arbitration and Conciliation Act, 1996), which are in force at the relevant time, by delivering a written notice in this regard by a party to the Dispute to the other parties to the Dispute (“Dispute Notice”) at any time after the expiry of 60 (sixty) days from the delivery of a notice of Dispute by a party to the Dispute to the other parties to the Dispute. It is agreed and acknowledged between the Parties, that no party to a Dispute shall have the right to challenge the conduct of the arbitration proceedings in accordance with the SIAC Rules.

 

15.2

The arbitration tribunal shall be constituted no later than 30 (thirty) days from the date of receipt of the Dispute Notice by the relevant parties to the Dispute and such arbitration tribunal shall comprise of 1 (one) arbitrator appointed by the Mold-Tech, SIC and/or any Standex Affiliates (as the case may be), 1 (one) arbitrator appointed by the Minority Shareholders and/or their Permitted Affiliates who are a party to such Dispute (acting collectively) and 1 (one) arbitrator appointed by the President of SIAC in accordance with the SIAC Rules.

 

15.3

The seat of the arbitration for all proceedings shall be India and venue for all proceedings shall be Mumbai, India. The governing law of the arbitration shall be Indian law, and the arbitration proceedings shall be conducted in English and subject to the confidentiality provisions under this Agreement.

 

15.4	The parties to the Dispute shall procure that the determination of the arbitration tribunal is given in writing and sets out the reasons for the determination.

 

15.5	The determination of the arbitration tribunal shall be final and binding on the parties to the Dispute for all purposes.

 

15.6

Each party to the Dispute shall bear its own costs in connection with any Dispute, provided however that: (a) all interim expenses and/or fees payable to arbitrators and/or SIAC shall be shared equally by the parties to the Dispute (and to the extent that where more than one party to the Dispute are Affiliates, they shall be deemed to be a single party for the purposes of allocation of such interim expenses and/or fees); and (b) insofar as the SIAC Rules permit, the arbitration tribunal may award costs as part of its determination, in which case such determination shall (notwithstanding (a) above) prevail.

 

15.7

Nothing in this Clause 15 (Settlement of Disputes) shall prevent any Party from applying to a court of competent jurisdiction: (a) for injunctive relief or a preservation order or to seek other interim relief; or (b) to seek enforcement and judgement on any arbitral award or determination made under this Agreement.

 

SHAREHOLDERS’ AGREEMENT

 

 

15.8

Notwithstanding any of the foregoing provisions of this Clause 15 (Settlement of Disputes), in the event that a Dispute subsists and, at that time, there also subsists another dispute between those same parties in relation to or connected with this Agreement and which is already the subject of existing arbitration proceedings, the parties to the Dispute shall (unless they otherwise agree in writing) procure (including by the exercise of rights and discretions available to them under this Agreement) that the Dispute is referred to and heard by the same arbitrator or the same arbitration tribunal hearing the existing arbitration proceedings.

 

15.9	Each Party shall co-operate in good faith to expedite (to the maximum extent practicable) the conduct of any arbitration proceedings commenced under this Agreement.

 

15.10

Notwithstanding the existence of any Dispute or the conduct of any arbitration proceedings pursuant to this Agreement, this Agreement shall remain in full force and effect and any such Dispute shall not relieve any Party from performing its obligations hereunder.

 

16.

NOTICES

 

16.1

Any notice or other communication to be given under or in connection with this Agreement (“Notice”) shall be in the English language in writing and signed by or on behalf of the Party giving it. A Notice shall be delivered by e-mail and followed by personal delivery, pre-paid recorded delivery or international courier to the address provided in Clause 16.3 below and marked for the attention of the person specified in that Clause.

 

16.2	A Notice shall be deemed to have been received:

 

16.2.1

at the time of receipt of e-mail in the inbox of the recipient of the Notice;

 

16.2.2

at the time of delivery, if delivered personally to the recipient of the Notice;

 

16.2.3

2 (two) Business Days after the time and date of posting if sent by pre-paid recorded delivery; or

 

16.2.4

3 (three) Business Days after the time and date of posting, if sent by international courier, provided that, if deemed receipt of any Notice occurs after 6.00 p.m. or is not on a Business Day, deemed receipt of the Notice shall be 9.00 a.m. on the next Business Day. References to time in this Clause 16 (Notices) are to local time in the country of the recipient of the Notice.

 

16.3	The addresses for service of Notice are:

 

Minority Shareholders: to the details as set out under Schedule 1 of this Agreement.

 

Mold-Tech

 

Name	:	MOLD-TECH SINGAPORE PTE. LTD
Address	:	23 Keewaydin Drive, Salem, New Hampshire 03079
For the attention of	:	David Dunbar; Alan Glass
E-mail	:	ddunbar@standex.com; aglass@standex.com
With courtesy copies (which shall not constitute notice) to:
Name	:	Foley Hoag LLP

 

SHAREHOLDERS’ AGREEMENT

 

 

Address	:	Seaport West, 155 Seaport Boulevard, Boston, Massachusetts 02210
Attention	:	Peter Rosenblum; William R. Kolb
Email	:	pmr@foleyhoag.com; wkolb@foleyhoag.com
and
Name	:	Lexygen
Address	:	4th Floor, Indiqube Penta, 51, Richmond Road, Bangalore - 560025
Attention	:	Vijay Sambamurthi; Codhai Raghavan
Email	:	vijay@lexygen.law; codhai@lexygen.law

 

 

SIC

 

Name	:	Standex International Corporation
Address	:	23 Keewaydin Drive, Salem, New Hampshire 03079
For the attention of	:	David Dunbar; Alan J. Glass
E-mail	:	ddunbar@standex.com; aglass@standex.com
With courtesy copies (which shall not constitute notice) to:
Name	:	Foley Hoag LLP
Address	:	Seaport West, 155 Seaport Boulevard, Boston, Massachusetts 02210
Attention	:	Peter Rosenblum; William R. Kolb
Email	:	pmr@foleyhoag.com; wkolb@foleyhoag.com
and
Name	:	Lexygen
Address	:	4th Floor, Indiqube Penta, 51, Richmond Road, Bangalore - 560025
Attention	:	Vijay Sambamurthi; Codhai Raghavan
Email	:	vijay@lexygen.law; codhai@lexygen.law

 

 

Company

 

Name	:	Narayan Powertech Private Limited
Address	:	Padra – Baroda Road, 391440, Gujarat, India

 

SHAREHOLDERS’ AGREEMENT

 

 

For the attention of	:	Chirag Shah
With a copy to each of Mold-Tech and SIC at the addresses set out above.

 

16.4

A Party shall notify the other Party of any change to its details in Clause 16.3 in accordance with the provisions of this Clause 16 (Notices), provided that such notification shall only be effective on the later of the date specified in the notification and 5 (five) Business Days after deemed receipt, in accordance with Clause 16.2.

 

17.	ARTICLES OF ASSOCIATION

 

The Parties shall take all necessary actions to cause the Articles to be amended to the extent permissible by Applicable Law to record the provisions of this Agreement in the Articles and the Parties agree that in the event of any inconsistency between the provisions of this Agreement and the Articles, subject to Applicable Law, the provisions of this Agreement shall prevail. Each of the Minority Shareholder and Mold-Tech agrees to exercise their respective voting rights in the Company to give effect to this Clause 17 (Articles of Association).

 

18.	MISCELLANEOUS

 

18.1

Costs: Except as otherwise provided in this Agreement, all costs and expenses (including legal, accounting and financial advisory fees and expenses) incurred in connection with, or in anticipation of, this Agreement and the transactions contemplated hereby, shall be paid by the Party incurring such expenses. All stamp duties payable on this Agreement shall be split equally between Mold-Tech on the one hand the Minority Shareholders on the other hand.

 

18.2

Counterparts: This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties. Signatures to this Agreement transmitted by electronic mail in “portable document format” (.pdf) form, or by any other electronic intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.

 

18.3

Severability: The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision hereof shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision; and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

 

18.4

Entire Agreement: This Agreement (including the Schedules hereto), the other Transaction Documents: (a) constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede other prior agreements and understandings both written and oral among the Parties with respect to the subject matter hereof and thereof; and (b) shall not be assigned, by operation of law or otherwise, by a Party, without the prior written consent of the other Party, provided however that Mold-Tech shall be permitted, to the extent permitted under Applicable Law, to assign any or all of its rights and obligations under this Agreement, in whole or in part, to any of its Affiliates to whom it has Transferred some or all of the Securities held by it in accordance with the terms of this Agreement, by prior notice in writing to the other Parties. Any attempted assignment in violation of this Clause 18.4 shall be void and without effect.

 

SHAREHOLDERS’ AGREEMENT

 

 

18.5	Amendment and Modification: This Agreement may be amended, modified or supplemented at any time by the Parties, pursuant to an instrument in writing signed by all of the Parties.

 

18.6

Waiver: Except as otherwise expressly provided in this Agreement, no failure to exercise, delay in exercising, or single or partial exercise of any right, power or remedy by any Party, and no course of dealing between the Parties, shall constitute a waiver of any such right, power or remedy. No waiver by a Party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No waiver shall be valid unless in writing and signed by the Party against whom such waiver is sought to be enforced.

 

18.7

No Partnership; Third-Party Beneficiaries: Nothing in this Agreement shall be deemed to create a joint venture, partnership, tax partnership or agency relationship between the Parties. This Agreement is solely for the benefit of (a) Minority Shareholders (and its successors and permitted assigns), with respect to the obligations of the Company, and Amtran under this Agreement; and (b) the Company, Mold-Tech (and their successors and permitted assigns), with respect to the obligations of the Company and Mold-Tech under this Agreement.

 

18.8

Negotiated Transaction: The Parties, each represented by legal counsel, have each participated in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation should arise, this Agreement shall be construed as if drafted by all Parties and no presumption or burden of proof shall arise favouring or burdening any Party by virtue of the authorship of any of the provisions of this Agreement.

 

18.9	Time of the Essence: With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence.

 

18.10

Specific Performance

 

18.10.1

The Parties agree that if any of the provisions of this Agreement were not performed in accordance with their specific terms on a timely basis or were otherwise breached, irreparable damage would occur, no adequate remedy at law would exist (even if damages would be available) and damages would be difficult to determine, and that, unless this Agreement has been terminated in accordance with its terms, the Parties shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement, to enforce specifically the terms and provisions of this Agreement and to compel performance by the Parties of their respective obligations set forth in this Agreement, without the necessity of proving the inadequacy of money damages as a remedy, in addition to any other remedy at law or in equity.

 

18.10.2

Without limiting the general right to specific performance set forth in 18.10.1 above, each of the Parties acknowledges and agrees that a non-breaching Party would be damaged irreparably if a Party breaches its obligation to consummate the transactions contemplated by this Agreement as required hereunder. Accordingly, in the event of any such breach of a Party’s obligations, then the Parties acknowledge and agree that the Party seeking to enforce this Agreement shall be entitled, at its election, to specifically enforce the performance of the other Party’s obligation to consummate the transactions contemplated herein as required hereunder in any Proceeding, including a Proceeding for injunctive relief.

 

SHAREHOLDERS’ AGREEMENT

 

 

18.10.3

Each of the Parties agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief when expressly available pursuant to the terms of this Agreement on the basis that (a) there is adequate remedy at law or (b) an award of specific performance is not an appropriate remedy for any reason in equity or at law, other than on the basis that such remedy is not expressly available pursuant to the terms of this Agreement. Any Party seeking an injunction or injunctions to prevent breaches or threatened breaches of this Agreement when expressly available pursuant to the terms of this Agreement and to enforce specifically the terms and provisions of this Agreement when expressly available pursuant to the terms of this Agreement shall not be required to provide any bond or other security in connection with any such order or injunction. Without limiting the generality of the foregoing, the Parties hereto hereby irrevocably waive any right of rescission they may otherwise have or to which they may become entitled.

 

[The remainder of this page is intentionally blank.]

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

COMPANY:   NARAYAN POWERTECH PRIVATE LIMITED     By: /s/ Chirag Shah Name: Chirag Shah Title: Direct

 

 

 

 

 

Signature Page to Narayan - Shareholders’ Agreement

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

MOLD-TECH:   MOLD-TECH SINGAPORE PTE. LTD.     By: /s/ David Dunbar Name: David Dunbar Title: Director

 

 

 

 

 

Signature Page to Narayan - Shareholders’ Agreement

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

SIC:   STANDEX INTERNATIONAL CORPORATION     By: /s/ David Dunbar Name: David Dunbar Title: Chairman, President and CEO

 

 

 

 

 

Signature Page to Narayan - Shareholders’ Agreement

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

MINORITY SHAREHOLDER 1:         By: /s/ Chirag Shah Name: Chirag Shah

 

 

 

 

 

Signature Page to Narayan - Shareholders’ Agreement

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

 

MINORITY SHAREHOLDER 2:         By: /s/ Sandip Shah Name: Sandip Shah

 

 

 

 

 

Signature Page to Narayan - Shareholders’ Agreement

SHAREHOLDERS’ AGREEMENT

 

SCHEDULE 3

 

DEED OF ADHERENCE

 

This deed “Deed” is made on [●] by [●] (the New Shareholder) in favour of:

 

(1)	[●] (the Company);

 

(2)	[●] (the Original Shareholder[s]); [and

 

(3)	[●] (the Continuing Shareholder)].

 

WHEREAS:

 

(a)	The Original Shareholder[s], the Company [and the Continuing Shareholder] are parties to a Shareholders Agreement dated [●] (the “Agreement”).

 

(b)

[The New Shareholder agrees to hold [●] Equity Shares of Rs. [●] each in the capital of the Company as a legal heir of the Original Shareholder upon death of the Original Shareholder.] or [The New Shareholder agrees to hold [●] Equity Shares of Rs. [●] each in the capital of the Company as [a member of the Family Group of the Original Shareholder/an Affiliate of the Original Shareholder] with effect from the date of Transfer of such Equity Shares to it.]

 

(c)	This Deed is made by the New Shareholder in compliance with the Agreement. Capitalised terms used but not defined in this Deed will have the respective meanings given to them in the Agreement.

 

THIS DEED WITNESSES AS FOLLOWS:

 

1.	The New Shareholder confirms that it has been supplied with a copy of the Agreement and has fully understood the terms thereof.

 

2.	The New Shareholder agrees to hold the Equity Shares referred to in recital (b) above, subject to the Agreement and the Articles of Association.

 

3.

The New Shareholder undertakes to the Continuing Shareholder and the Company, to be bound by the Agreement in all respects as if the New Shareholder was a party to the Agreement and named in it as a Shareholder, and to observe and perform all the provisions and obligations of the Agreement applicable to or binding on it under the Agreement, insofar as they fall to be observed or performed on or after the date of this Deed.

 

4.

The New Shareholder undertakes to observe and perform all the provisions and obligations of the Agreement applicable to or binding on it under the Agreement, and acknowledges that the New Shareholder shall be (a) entitled to the rights and benefits of the Agreement in accordance with the terms of the Agreement only through the Continuing Shareholder; and (b) the New Shareholders and the Original Shareholder will at all times constitute a single block of Shareholders for the purposes of this Agreement and the Articles of Association and shall act and vote as a single block.

 

5.	This Deed is made for the benefit of (a) the parties to the Agreement; and (b) every other Person who after the date of the Agreement (and whether before or after the execution of this Deed) assumes any rights or obligations under the Agreement or adheres to it.

 

SHAREHOLDERS’ AGREEMENT

 

 

6.	The address of the New Shareholder for the purposes of this Agreement is as follows:

 

Attention	:	[●]
Address	:	[●]
Email	:	[●]

 

7.

This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties. Signatures to this Agreement transmitted by electronic mail in “portable document format” (.pdf) form, or by any other electronic intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.

 

8.	This Deed is governed by and shall be construed in accordance with Indian law.

 

IN WITNESS OF WHICH THIS DEED HAS BEEN EXECUTED AND HAS BEEN DELIVERED ON THE DATE WHICH APPEARS FIRST ON PAGE 1.

 

Signed and delivered:

 

For and on behalf of New Shareholder

 

 

By	:	[●]
Signature	:	[●]
Title	:	Authorized Signatory

 

SHAREHOLDERS’ AGREEMENT

 

 

SCHEDULE 4

 

RESERVED MATTERS

 

1.

Any corporate restructuring (including merger, demerger, consolidation or other scheme of amalgamation involving the Company) proposed to be undertaken by the Company that treats the Securities held by the Minority Shareholders and/or their Permitted Affiliates in a manner that is different from the treatment of the Securities held by Mold-Tech and/or its Affiliates and negatively or adversely impacts the rights of any of the Minority Shareholders or any of their Permitted Affiliates with respect to the Company or as set forth in this Agreement, the Articles and/or Applicable Law;

 

2.	Any amendment to the Articles which adversely or disproportionately impacts or affects the rights of any of the Minority Shareholders or any of their Permitted Affiliates with respect to the Company or as set forth in this Agreement, the Articles and/or Applicable Law;

 

3.

Any distribution to any of the Minority Shareholders and/or any of their Permitted Affiliates, including by way of dividend, buyback or capital reduction, which is negatively or adversely disproportionate to the number of Securities (calculated on a Fully Diluted Basis) held by such Minority Shareholder and/or its Permitted Affiliate;

 

4.

Commencement of the process of voluntary liquidation, winding up or dissolution of the Company, or filing any petition for bankruptcy of the Company, which negatively or adversely disproportionately impacts or affects the rights of any of the Minority Shareholders or any of their Permitted Affiliates with respect to the Company; and

 

5.	Entering into any agreement, binding arrangement, or understanding or providing any commitment or passing any resolution in relation to any of the above.

 

Exhibit 10.4

 

CREDIT AGREEMENT   Dated as of October 28, 2024   among   STANDEX INTERNATIONAL CORPORATION, as the Borrower,   CITIZENS BANK, N.A., as Administrative Agent, Lead Arranger and Book Runner,   and   THE LENDERS PARTY HERETO

 

 

TABLE OF CONTENTS

 

Page

 

Article I DEFINITIONS AND ACCOUNTING TERM		1
1.01	Defined Terms	1
1.02	Other Interpretive Provisions	29
1.03	Accounting Terms	29
1.04	Rounding	30
1.05	Times of Day	30
1.06	Resolution of Drafting Ambiguities	30
1.07	Rates	30
1.08	Divisions	31
Article II THE COMMITMENTS AND CREDIT EXTENSIONS		31
2.01	Term Loan Commitments	31
2.02	Borrowings, Conversions and Continuations of Loans	31
2.03	Prepayments	31
2.04	Payments of Interest	32
2.05	Repayment of Loans	32
2.06	Interest	32
2.07	Fees	32
2.08	Computation of Interest and Fees; Retroactive Adjustments of Applicable Margin	33
2.09	Evidence of Debt	33
2.10	Payments Generally	33
2.11	Sharing of Payments by Lenders	34
Article III TAXES, YIELD PROTECTION AND ILLEGALITY		35
3.01	Taxes	35
3.02	Inability to Determine Rates	37
3.03	Increased Costs; Illegality.	38
3.04	Compensation for Losses	40
3.05	Mitigation Obligations; Replacement of Lenders; Designated Lenders	40
3.06	Benchmark Replacement Setting.	41
3.07	Survival	42
Article IV CONDITIONS PRECEDENT TO term loan		42
Article V REPRESENTATIONS AND WARRANTIES		45
5.01	Existence, Qualification and Power	45
5.02	Authorization; No Contravention	45
5.03	Governmental Authorization; Other Consents	45
5.04	Binding Effect	46
5.05	Financial Statements; No Material Adverse Effect	46
5.06	Litigation	47
5.07	No Default	47
5.08	Ownership of Property; Liens; Investments	47
5.09	Environmental Compliance	48
5.10	Insurance	48
5.11	Taxes	48

 

 

5.12	ERISA Compliance	48
5.13	Subsidiaries; Equity Interests; Loan Parties	49
5.14	Margin Regulations; Investment Company Act	49
5.15	Disclosure	49
5.16	Compliance with Laws	49
5.17	Intellectual Property; Licenses, Etc	50
5.18	Solvency	50
5.19	Casualty, Etc	50
5.20	PATRIOT ACT; FCPA; OFAC	50
5.21	Anti-Social Forces	51
5.22	Affected Financial Institutions	51

 

Article VI AFFIRMATIVE COVENANTS

51

 

6.01	Financial Statements	51
6.02	Certificates; Other Information	52
6.03	Notices	53
6.04	Payment of Obligations	54
6.05	Preservation of Existence, Etc	54
6.06	Maintenance of Properties	54
6.07	Maintenance of Insurance	55
6.08	Compliance with Laws	55
6.09	Books and Records	55
6.10	Inspection Rights	55
6.11	Use of Proceeds	55
6.12	Covenant to Guarantee Obligations; Additional Subsidiaries	55
6.13	Compliance with Environmental Laws	56
6.14	Further Assurances	56
6.15	Compliance with Terms of Leaseholds	56
6.16	Material Contracts	56
6.17	Most Favored Covenant Status	56
6.18	Senior Debt	57

Article VII NEGATIVE COVENANTS	57

7.01	Liens	57
7.02	Indebtedness	58
7.03	Investments	59
7.04	Fundamental Changes	60
7.05	Dispositions	61
7.06	Restricted Payments	61
7.07	Change in Nature of Business	62
7.08	Transactions with Affiliates	62
7.09	Burdensome Agreements	62
7.10	Use of Proceeds	62
7.11	Financial Covenants.	62
7.12	Amendments of Organization Documents	63
7.13	Accounting Changes	63
7.14	Prepayments, Etc. of Indebtedness	63
7.15	Amendment, Etc	63
7.16	Disqualified Equity Interest	63

 

 

7.17	Anti- Terrorism Laws	63
7.18	Anti- Social Forces	63

Article VIII EVENTS OF DEFAULT AND REMEDIES	63

8.01	Events of Default	63
8.02	Remedies upon Event of Default	65
8.03	Application of Funds	65

Article IX ADMINISTRATIVE AGENT	66

9.01	Appointment and Authority	66
9.02	Rights as a Lender	66
9.03	Exculpatory Provisions	67
9.04	Reliance by Administrative Agent	67
9.05	Delegation of Duties	68
9.06	Resignation of Administrative Agent	68
9.07	Non- Reliance on Administrative Agent and Other Lenders	69
9.08	No Other Duties, Etc	69
9.09	Administrative Agent May File Proofs of Claim	69
9.10	Erroneous Payments.	70

 

Article X RESERVED	73

Article XI MISCELLANEOUS

73

 

11.01	Amendments, Etc	73
11.02	Notices; Effectiveness; Electronic Communications	74
11.03	No Waiver; Cumulative Remedies; Enforcement	76
11.04	Expenses; Indemnity; Damage Waiver	77
11.05	Payments Set Aside	78
11.06	Successors and Assigns	79
11.07	Treatment of Certain Information; Confidentiality	82
11.08	Right of Setoff	83
11.09	Interest Rate Limitation	83
11.10	Counterparts; Integration; Effectiveness	84
11.11	Survival of Representations and Warranties	84
11.12	Severability	84
11.13	Replacement of Lenders	84
11.14	Defaulting Lenders	85
11.15	Governing Law; Jurisdiction; Etc	86
11.16	Waiver of Jury Trial	87
11.17	No Advisory or Fiduciary Responsibility	87
11.18	Electronic Execution of Assignments and Certain Other Documents	88
11.19	USA PATRIOT Act	88
11.20	Time of the Essence	88
11.21	ENTIRE AGREEMENT	88
11.22	Acknowledgment and Consent to Bail- In of EEA Financial Institutions	88
11.23	Lender Representation	89
11.24	Acknowledgement Regarding Any Supported QFCs	90

 

 

SCHEDULES
	2.01	Commitments and Applicable Percentages
	5.03	Governmental Authorizations, Other Consents
	5.05	Material Indebtedness and Other Liabilities
	5.08(b)	Existing Liens
	5.08(e)	Existing Investments
	5.12	ERISA Compliance
	5.13	Loan Parties
	6.12	Guarantors
	7.02	Existing Indebtedness
	11.02	Notices
EXHIBITS
	A	Term Note
	B	Compliance Certificate
	C	Assignment and Assumption
	D	Guaranty

 

 

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT (“Agreement”) is entered into as of October 28, 2024, among STANDEX INTERNATIONAL CORPORATION, a Delaware corporation (the “Borrower”), each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), and CITIZENS BANK, N.A., as Administrative Agent, Lead Arranger and Book Runner.

 

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

 

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

 

1.01    Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

 

“ABR Loan” means a Loan bearing interest based on the Alternate Base Rate.

 

“ACH Transactions” means any cash management or related services (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system) provided by any Lender or its Affiliates for the account of the Borrower or its Subsidiaries.

 

“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of any Person, business or division of a Person, (b) the acquisition of in excess of 50% of the Equity Interests of any Person, or otherwise causing any Person to become a Subsidiary or (c) a merger or consolidation or any other combination with another Person.

 

“Administrative Agent” means Citizens Bank, N.A., in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on the Administrative Agent’s signature page to this Agreement, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

 

“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.

 

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

“Agreement” has the meaning specified in the Recitals hereof.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus 0.50% per annum and (c) the Daily SOFR Rate on such day plus 1.00% per annum, provided that the Alternate Base Rate shall at no time be less than the Floor. If the Administrative Agent shall have determined (which determination shall be conclusive absent clearly manifest error) that it is unable to ascertain the Federal Funds Rate or the Daily SOFR Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition of the term Federal Funds Rate, the Alternate Base Rate shall be determined without regard to clause (b) or (c), as applicable, of the preceding sentence until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Rate or the Daily SOFR Rate, as applicable, shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Rate or the Daily SOFR Rate, as applicable, respectively.

 

 

“Amran Acquisition” means the purchase by the Borrower of the equity interests owned by Bolt Founders, Inc. in Amran, LLC, a Texas limited liability company, for an aggregate purchase price of $176,674,645.

 

“Anti-Social Conduct” means: (a) a demand and conduct with force and arms; (b) an unreasonable demand and conduct having no legal cause; (c) threatening or committing violent behavior relating to its business transactions; (d) an action to defame the reputation or interfere with the business of any Loan Party by spreading rumor, using fraudulent means or resorting to force; or (e) other actions similar or analogous to any of the foregoing in any jurisdiction.

 

“Anti-Social Group” means (a) an organized crime group (bouryokudan); (b) a member of an organized crime group (bouryokudan in); (c) a person who used to be a member of an organized crime group but has only ceased to be a member of an organized crime group for a period of less than 5 years; (d) a quasi-member of an organized crime group (bouryokudan junkoseiin); (e) a related or associated company of an organized crime group (boroykudan kanren gaisha); (f) a corporate racketeer (soukaiya) or blackmailer advocating social cause (shakai undou nado hyoubou goro) or a special intelligence organized crime group (tokushu chinou bouryoku syudan); or (g) a member of any other criminal force similar or analogous to any of the foregoing in any jurisdiction.

 

“Anti-Social Relationship” means in relation to a person: (a) an Anti-Social Group controls its management; (b) an Anti-Social Group is substantively involved in its management; (c) it utilizes improperly an Anti-Social Group for the purpose of, or which has the effect of, unfairly benefiting itself or a third party or prejudicing a third party; (d) it is involved in the provision of funds or other benefits to an Anti-Social Group; or (e) any of its directors or any other person who is substantively involved in its management has a socially objectionable relationship with an Anti‑Social Group.

 

“Applicable Margin” means the applicable percentage set forth below for the period indicated:

 

Period	SOFR Applicable Margin	Alternate Base Rate Applicable Margin
Closing Date – 1/28/2025	2.50%	1.50%
1/29/2025 – 4/28/2025	2.75%	1.75%
4/29/2025 – 7/28/2025	3.00%	2.00%
On and after 7/29/2025	3.25%	2.25%

 

 

“Applicable Percentage” means, with respect to any Lender, the percentage (carried out to the ninth decimal place) of the Term Loan Facility represented by such Lender’s Term Loan Commitment at such time. The Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable which percentage amount may be adjusted from time to time in accordance with the terms and conditions hereof.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“Arranger” means Citizens Bank, N.A., in its capacity as lead arranger and book manager.

 

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the Administrative Agent.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other agreement or instrument were accounted for as a Capitalized Lease and (c) all Synthetic Debt of such Person.

 

“Audited Financial Statements” means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended June 30, 2024, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Borrower and its Subsidiaries, including the notes thereto.

 

“Available Tenor” means, as of any date of determination and with respect to the then‑current Benchmark, as applicable, (x) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an Interest Period pursuant to this Credit Agreement or (y) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof), as applicable, that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark pursuant to this Credit Agreement, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 3.06(d).

 

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

 

“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time that is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

 

“Bank Product Agreements” means those certain agreements entered into from time to time by the Borrower or its Subsidiaries in connection with any of the Bank Products.

 

“Bank Product Obligations” means all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by the Borrower or its Subsidiaries to any Lender or its Affiliates pursuant to or evidenced by the Bank Product Agreements and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all such amounts that the Borrower is obligated to reimburse to Administrative Agent or any Lender as a result of Administrative Agent or such Lender purchasing participations or executing indemnities or reimbursement obligations with respect to the Bank Products provided to the Borrower or its Subsidiaries pursuant to the Bank Product Agreements.

 

“Bank Products” means any service or facility extended to the Borrower or its Subsidiaries by any Lender, or any Affiliate of such Lender, including: (a) credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards, (e) ACH Transactions, (f) cash management, including controlled disbursement, accounts or services, or (g) foreign currency exchange agreements or other foreign currency agreements or arrangements.

 

“Benchmark” means, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to the Term SOFR Reference Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 3.06(a). Any reference to “Benchmark” shall include, as applicable, the published component used in the calculation thereof.

 

“Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:

 

(a)    Daily Simple SOFR; or

 

(b)    the sum of: (i) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower giving due consideration to (A) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (B) any evolving or then-prevailing market convention for determining a benchmark rate and an adjustment as a replacement to the then-current Benchmark for Dollar-denominated syndicated credit facilities at such time and (ii) the related Benchmark Replacement Adjustment;

 

provided, that any such Benchmark Replacement shall be administratively feasible as determined by the Administrative Agent in its sole discretion.

 

 

If the Benchmark Replacement as determined pursuant to clause (a) or (b) above would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Credit Agreement and the other Loan Documents.

 

“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities.

 

“Benchmark Replacement Date” means a date and time determined by Administrative Agent, which date shall be no later than the earliest to occur of the following events with respect to the then-current Benchmark:

 

(a)    in the case of clause (a) or (b) of the definition of “Benchmark Transition Event”, the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or

 

(b)    in the case of clause (c) of the definition of “Benchmark Transition Event”, the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by or on behalf of the administrator of such Benchmark (or such component thereof) or the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative; provided that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.

 

For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

 

“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:

 

(a)    a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

 

 

(b)    a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a Resolution Authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or Resolution Authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

 

(c)    a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) or the regulatory supervisor for the administrator of such Benchmark (or such component thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative.

 

For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

 

“Benchmark Unavailability Period” means, the period (if any) (a) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 3.06 and (b) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 3.06.

 

“Beneficial Ownership Certification” means, with respect to the Borrower, a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation, which certification shall be substantially in the form provided by Administrative Agent or such other form satisfactory to the Administrative Agent.

 

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

 

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

 

“Borrower” has the meaning specified in the introductory paragraph hereto.

 

 

“Borrower Materials” has the meaning specified in Section 6.02.

 

“Borrowing” means the advance of the Term Loan on the Closing Date.

 

“Borrowing Date” means any Business Day specified by the Borrower as a date on which the Borrower requests the relevant Lenders to make Loans hereunder.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located.

 

“Capitalized Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

 

“Cash Equivalents” means any of the following types of Investments, to the extent owned by the Borrower or any of its Subsidiaries free and clear of all Liens:

 

(a)    readily marketable obligations issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof having maturities of not more than 360 days from the date of acquisition thereof; provided that the full faith and credit of the United States of America is pledged in support thereof;

 

(b)    time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia, and is a member of the Federal Reserve System, (ii) issues (or the parent of which issues) commercial paper rated as described in clause (c) of this definition and (iii) has combined capital and surplus of at least $1,000,000,000, in each case with maturities of not more than 90 days from the date of acquisition thereof;

 

(c)    commercial paper issued by any Person organized under the laws of any state of the United States of America and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by S&P, in each case with maturities of not more than 180 days from the date of acquisition thereof; and

 

(d)    Investments, classified in accordance with GAAP as current assets of the Borrower or any of its Subsidiaries, in money market investment programs registered under the Investment Company Act of 1940, which are administered by financial institutions that have the highest rating obtainable from either Moody’s or S&P, and the portfolios of which are limited solely to Investments of the character, quality and maturity described in clauses (a), (b) and (c) of this definition.

 

“Cash Management Bank” means any Person that, at the time it enters into a Bank Product Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Bank Product Agreement.

 

 

“CEA Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Change of Control” means an event or series of events by which:

 

(a)    any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) other than the Equity Investors becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of 25% or more of the equity securities of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully-diluted basis (and taking into account all such securities that such “person” or “group” has the right to acquire pursuant to any option right); or

 

(b)    during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors); or

 

 

(c)    any Person or two or more Persons acting in concert shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of the Borrower, or control over the equity securities of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully-diluted basis (and taking into account all such securities that such Person or Persons have the right to acquire pursuant to any option right) representing 25% or more of the combined voting power of such securities; or

 

(d)    the occurrence of a “change in control” or other similar provision under or with respect to any Material Indebtedness Agreement.

 

“Citizens” means Citizens Bank, N.A. and its successors.

 

“Closing Date” means the first date all the conditions precedent in Article IV are satisfied or waived in accordance with Section 11.01.

 

“Code” means the Internal Revenue Code of 1986.

 

“Commitment” or “Term Loan Commitment” means an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement. The aggregate Commitments on the Closing Date is $250,000,000.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.) and any successor statute.

 

“Compliance Certificate” means a certificate substantially in the form of Exhibit B.

 

“Conforming Changes” means, with respect to either the use or administration of the Benchmark, or any Benchmark Replacement, any technical, administrative or operational changes (including, for example and not by way of limitation or prescription, changes to the definition of “Alternate Base Rate,” the definition of “Business Day,” the definition of “Interest Period” or any similar or analogous definition, the definition of “Government Securities Business Day,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of Section 3.04, and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate in connection with the use or administration of the Benchmark or to reflect the adoption and implementation of any Benchmark Replacement or to permit the use and administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of any such rate exists, in such other manner of administration as the Administrative Agent reasonably decides is necessary in connection with the administration of this Agreement and the other Loan Documents).

 

 

“Consolidated” means, when used with reference to financial statements or financial statement items of any Person, such statements or items on a consolidated basis in accordance with applicable principles of consolidation under GAAP.

 

“Consolidated EBIT” means, at any date of determination, an amount equal to Consolidated Net Income of the Borrower and its Subsidiaries on a consolidated basis for the most recently completed Measurement Period plus (a) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges, (ii) the provision for Federal, state, local and foreign income taxes payable, (iii) all non-cash charges including, without limitation, goodwill write-offs and amortization of the inventory step-up and acquired backlog associated with accounting for Permitted Acquisitions, all determined in accordance with GAAP, (iv) an aggregate of up to the lesser of (A) 10% of Consolidated EBITDA (calculated prior to giving effect to this add-back) and (B) $20,000,000 (calculated on a trailing twelve-month basis) of cash restructuring and Permitted Acquisition related expenses to the extent actually paid during such Measurement Period (other than those incurred with respect to the Subject 2024 Acquisitions), (v) an add‑back of up to $10,500,000 in the aggregate in transaction expenses incurred and actually paid by the Borrower with respect to the Subject 2024 Acquisitions and this Agreement, (vi) other non‑recurring expenses reducing such Consolidated Net Income which do not represent a cash item in such period or any future period (in each case of or by the Borrower and its Subsidiaries for such Measurement Period) and minus (b) the following to the extent included in calculating such Consolidated Net Income: (i) Federal, state, local and foreign income tax credits, (ii) all non-cash items increasing Consolidated Net Income (in each case of or by the Borrower and its Subsidiaries for such Measurement Period), (iii) extraordinary gains and extraordinary losses for such Measurement Period determined in accordance with GAAP, and (iv) gains and losses on Dispositions, provided, however, that Consolidated EBIT for any Measurement Period shall (x) include the EBIT for any Person or business unit that has been acquired by the Borrower or any of its Subsidiaries for any portion of such Measurement Period prior to the date of acquisition, so long as such EBIT has been verified by appropriate audited financial statements or other financial statements acceptable to the Administrative Agent and (y) exclude the EBIT for any Person or business unit that has been disposed of by the Borrower or any of its Subsidiaries, for the portion of such Measurement Period prior to the date of disposition and (z) with respect to the portion of Consolidated EBIT attributable to a Subsidiary that is not wholly-owned, directly or indirectly, by Borrower, be multiplied by the average percentage of Equity Interests owned by the Borrower, directly or indirectly, in such Subsidiary over such Measurement Period.

 

“Consolidated EBITDA” means, at any date of determination, an amount equal to Consolidated EBIT plus depreciation and amortization expense as each is determined on a consolidated basis in accordance with GAAP, provided, however, that Consolidated EBITDA for any Measurement Period shall (y) include the EBITDA for any Person or business unit that has been acquired by the Borrower or any of its Subsidiaries for any portion of such Measurement Period prior to the date of acquisition, so long as such EBITDA has been verified by appropriate audited financial statements or other financial statements acceptable to the Administrative Agent and (z) exclude the EBITDA for any Person or business unit that has been disposed of by the Borrower or any of its Subsidiaries, for the portion of such Measurement Period prior to the date of disposition.

 

 

“Consolidated Funded Indebtedness” means, as of any date of determination, for the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal amount of all direct or indirect obligations, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) all purchase money Indebtedness, (c) all direct obligations arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (d) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), (e) all Attributable Indebtedness, (f) without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (e) above of Persons other than the Borrower or any Subsidiary, and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which the Borrower or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to the Borrower or such Subsidiary. For avoidance of doubt, Consolidated Funded Indebtedness excludes operating leases of the Borrower and operating leases of Borrower’s Subsidiaries guaranteed by the Borrower.

 

“Consolidated Interest Charges” means, for any Measurement Period, the sum of (a) all interest, premium payments, debt discount, fees, charges and related expenses in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, (b) all interest paid or payable with respect to discontinued operations and (c) the portion of rent expense under Capitalized Leases that is treated as interest in accordance with GAAP, in each case, of or by the Borrower and its Subsidiaries on a consolidated basis for the most recently completed Measurement Period.

 

“Consolidated Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBIT to (b) Consolidated Interest Charges, in each case, of or by the Borrower and its Subsidiaries on a consolidated basis for the most recently completed Measurement Period.

 

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a) all Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA of Borrower and its Subsidiaries on a consolidated basis for the most recently completed Measurement Period. Administrative Agent will reduce Consolidated Funded Indebtedness by Borrower’s and its Subsidiaries’ unrestricted domestic cash and/or unrestricted foreign cash in excess of $10,000,000 up to $60,000,000.

 

“Consolidated Net Income” means, at any date of determination, the net income (or loss) of the Borrower and its Subsidiaries on a consolidated basis for the most recently completed Measurement Period calculated in accordance with GAAP.

 

“Consolidated Tangible Assets” means, at any time, the total assets of the Borrower and its Subsidiaries determined on a Consolidated basis at such time less the amount of all intangible assets at such time, including, without limitation, all goodwill, customer lists, franchises, licenses, computer software, patents, trademarks, trade names, copyrights, service marks, brand names, unamortized deferred charges, unamortized debt discount and capitalized research and development costs.

 

 

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

 

“Credit Extension” means a Borrowing.

 

“Daily Simple SOFR” means, for any day, a rate per annum equal to the greater of (a) the sum of (i) SOFR, with the conventions for this rate (which will include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion plus (ii) the Daily Simple SOFR Adjustment, and (b) the Floor.

 

“Daily Simple SOFR Adjustment” means 0.10000%.

 

“Daily SOFR Rate” means, for any day, a rate per annum equal to Term SOFR in effect on such day for a one-month Interest Period (subject to the Floor referred to in the definition of “Term SOFR”).

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

“Default Rate” means (i) the Alternate Base Rate plus (ii) the highest Applicable Margin applicable to ABR Loans plus (iii) 2% per annum.

 

 

“Defaulting Lender” means any Lender that (a) has failed to fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (b) has notified the Borrower or the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), or (c) has, or has a direct or indirect holding company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect holding company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (c) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender upon delivery of written notice of such determination to the Borrower and each Lender.

 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

 

“Disqualified Equity Interest” means any Equity Interest of any Person that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part.

 

“Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons, whether pursuant to a “plan of division” or similar arrangement pursuant to Section 18-217 of the Delaware Limited Liability Company Act or any similar provision under the laws of any other applicable jurisdiction and pursuant to which the Dividing Person may or may not survive.

 

“Dollar” and “$” mean lawful money of the United States of America.

 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.

 

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country that is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country that is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country that is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

 

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 11.06(b)(iii), (v) and (vi) (subject to such consents, if any, as may be required under Section 11.06(b)(iii)). “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

 

“Engagement Letter” means that certain engagement letter dated September 26, 2024 delivered by the Administrative Agent and acknowledged by the Borrower.

 

“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

 

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

 

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

 

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

 

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

 

“Event of Default” has the meaning specified in Section 8.01.

 

“Excluded CEA Swap Obligation” means, with respect to any Guarantor, any CEA Swap Obligation if, and only to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such CEA Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof), including by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guarantee of such Guarantor or the grant of such security interest becomes effective with respect to such CEA Swap Obligation. If a CEA Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such CEA Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), and branch profits taxes, in each case, imposed by the jurisdiction (or any political subdivision thereof) under the Laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its Lending Office is located, (b) any backup withholding tax that is required by the Code to be withheld from amounts payable to a Lender that has failed to comply with clause (A) of Section 3.01(e)(ii), and (c) any U.S. federal withholding Taxes imposed pursuant to FATCA. Notwithstanding anything to the contrary contained in this definition, “Excluded Taxes” shall not include any withholding tax imposed at any time on payments made by or on behalf of any non‑Borrower to any Lender hereunder or under any other Loan Document, provided that such Lender shall have complied with Section (A) of Section 3.01(e).

 

 

“Existing Facility” means that certain revolving credit facility established for the Borrower pursuant to that certain Third Amended and Restated Credit Agreement dated February 2, 2023 among Citizens Bank, as Administrative Agent, Swing Line Lender, an L/C Issuer, Joint Lead Arranger, Joint Book Runner, and as Multicurrency Administrative Agent, Bank of America, N.A., as Co-Syndication Agent, Joint Lead Arranger and Joint Book Runner, TD Bank, N.A., as Co‑Syndication Agent, Joint Lead Arranger and Joint Book Runner, JPMorgan Chase Bank, N.A., as Co-Documentation Agent, and Truist Bank, as Co Documentation Agent, and the lenders party thereto.

 

“FATCA” means Section 1471 through Section 1474 of the Code as in effect on the date hereof or any amended or successor provision that is substantively comparable and not materially more onerous to comply with (and, in each case, any current or future regulations promulgated thereunder or official interpretation thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any intergovernmental agreements with respect thereto between the United States and another jurisdiction).

 

“FCPA” means the United States Foreign Corrupt Practices Act of 1977 (Pub. L. No. 95213, §§ 101.104), as amended from time to time.

 

“Federal Funds Rate” means, for any day, a rate per annum (expressed as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, (b) if such rate is not so published for any day, the Federal Funds Rate for such day shall be the average of the quotations for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it and (c) if the Federal Funds Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Credit Agreement.

 

“Floor” means 0.00% per annum.

 

“Foreign Subsidiary” means a Subsidiary of the Borrower that is not a Domestic Subsidiary.

 

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

 

“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

 

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

 

 

“Government Securities Business Day” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association (or any successor thereto) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

 

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

 

“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

 

“Guaranteed Parties” means, collectively, (a) the Administrative Agent, (b) each Lender, (c) each Cash Management Bank, (d) each counterparty to any Swap Contract the obligations under which constitute Swap Obligations, (e) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document and (f) the permitted successors and assigns of each of the foregoing.

 

“Guarantors” means, collectively, (a) the Borrower, and (b) the direct and indirect Domestic Subsidiaries which are Material Subsidiaries of the Borrower, each of which is listed on Schedule 6.12.

 

“Guaranty” means, collectively, the Guaranty made by a Guarantor in favor of the Guaranteed Parties, substantially in the form of Exhibit D, together with each other guaranty and guaranty supplement delivered pursuant to Section 6.12 or Section 7.02(j).

 

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

 

 

“Hedge Bank” means any Person that, at the time it enters into an interest rate Swap Contract permitted under Article VI or VII, is a Lender or an Affiliate of a Lender, in its capacity as a party to such Swap Contract.

 

“IDB” has the meaning specified in Section 7.02(i).

 

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

 

(a)    all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

 

(b)    the maximum amount of all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

 

(c)    net obligations of such Person under any Swap Contract;

 

(d)    all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business and not past due for more than 60 days after the date on which such trade account was created);

 

(e)    indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

 

(f)    all Attributable Indebtedness in respect of Capitalized Leases and Synthetic Lease Obligations of such Person and all Synthetic Debt of such Person;

 

(g)    all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person or any warrant, right or option to acquire such Equity Interest, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

 

(h)    all Guarantees of such Person in respect of any of the foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.

 

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitees” has the meaning specified in Section 11.04(b).

 

“Information” has the meaning specified in Section 11.07.

 

“Interest Payment Date” means (a) with respect to any ABR Loan, the last Business Day of each March, June, September, and December and the Maturity Date, (b) with respect to any SOFR Loan, the last day of the Interest Period therefor. If any Interest Payment Date would occur on a day other than a Business Day, such Interest Payment Date shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Payment Date shall occur on the next preceding Business Day.

 

“Interest Period” means with respect to any applicable Loan or Borrowing, the period commencing on the date of such Loan or Borrowing and ending on the numerically corresponding day in the calendar month that is one month thereafter; provided that (i) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period, (ii) no Interest Period shall extend beyond the Maturity Date and (iii) no tenor that has been removed from this definition pursuant to Section 3.06(d) shall be available for specification in such Committed Loan Notice. For purposes hereof, the date of a Loan or Borrowing initially shall be the date on which such Loan or Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Loan or Borrowing. Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period.

 

“Investment” means, as to any Person, (a) any direct or indirect Acquisition, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or interest in, another Person or (c) the purchase, acquisition or investment of or in any stocks, bonds, mutual funds, notes, debentures or other securities, or any deposit account, certificate of deposit or other investment of any kind. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

 

“IP Rights” has the meaning specified in Section 5.17.

 

“IRB” has the meaning specified in Section 7.02(i).

 

“IRS” means the United States Internal Revenue Service.

 

“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

 

“Lender” has the meaning specified in the introductory paragraph hereto.

 

 

“Lending Office” means, as to any Lender, the office or offices of such Lender listed on the signature page to this Agreement for such Lender, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent which office may include any Affiliate of such Person or any domestic or foreign branch of such Person or such Affiliate.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

 

“Loan” means an extension of credit by a Lender to any Borrower under Article II in the form of a Term Loan.

 

“Loan Documents” means, collectively, (a) this Agreement, (b) the Note(s), and (c) the Guaranty, as of the foregoing (a) - (c) may be amended, supplemented or restated from time to time.

 

“Loan Parties” means, collectively, the Borrower and each Guarantor.

 

“Master Agreement” has the meaning specified in the definition of Swap Contract.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent) or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the rights and remedies of the Administrative Agent or any Lender under the Loan Documents, or of the ability of the Loan Parties to perform their obligations under the Loan Documents to which they are a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the Loan Parties of the Loan Documents to which they are a party.

 

“Material Contract” means, with respect to any Person, each contract to which such Person is a party involving aggregate consideration payable to or by such Person of $10,000,000 or more in any year or otherwise material to the business, condition (financial or otherwise), operations, performance or properties of such Person.

 

“Material Indebtedness” means as to Borrower or any of its Subsidiaries, any Indebtedness of the Borrower or such Subsidiary (including any Guaranty Obligation) in excess of the aggregate principal amount of $10,000,000.

 

“Material Indebtedness Agreement” means any agreement or document governing, evidencing or executed in connection with any Material Indebtedness, as amended, modified or supplemented from time to time.

 

“Material Permitted Acquisition” means a Permitted Acquisition with consideration greater than $75,000,000, including, without limitation, the Subject 2024 Acquisitions.

 

 

“Material Subsidiary” means a Subsidiary which either (i) has a value which comprises 5% or more of the consolidated assets of the Borrower and its Subsidiaries or (ii) owns the rights to a material product or Intellectual Property or has a material license thereafter or critical customer relationship which if lost could materially and adversely affect the Borrower and its Subsidiaries.

 

“Maturity Date” means October 27, 2025, unless sooner following acceleration.

 

“Measurement Period” means, at any date of determination, the most recently completed four fiscal quarters of the Borrower.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

 

“Narayan Acquisition” means the purchase by Mold Tech Singapore of all of the equity interests in Narayan Powertech Private Limited, a PLC organized under the laws of India, a PLC organized under the laws of India, for an aggregate purchase price of US$255,883,125.

 

“Note” means a Term Note.

 

“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, the Borrower arising under any Loan Document or otherwise with respect to any Term Loan, Bank Product Agreement or Swap Contract, including, without limitation, Swap Obligations, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding and all other Bank Product Obligations provided, that the Obligations shall exclude all Excluded CEA Swap Obligations.

 

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

 

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.

 

“Participant” has the meaning specified in Section 11.06(d).

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

 

“Permitted Acquisition” means an Acquisition which satisfies each of the following conditions:

 

(a)    any Subsidiary of the Borrower or a Subsidiary thereof created for the purpose of effecting the Acquisition or acquired in connection therewith shall have complied with the requirements of Section 6.12;

 

(b)    the Acquisition is not hostile and the board of directors or other governing body of the target have approved such Acquisition;

 

(c)    in the event that the trailing twelve-month EBITDA of the target of such Acquisition exceeds $15,000,000, the Borrower has delivered to the Administrative Agent at least 10 Business Days prior to the consummation of such Acquisition the most recent audited financial statements of such target (or other financial due diligence reasonably acceptable to the Administrative Agent in its sole discretion);

 

(d)    both before and after giving effect to any Acquisition, no Default or Event of Default shall have occurred and be continuing;

 

(e)    in the event the proposed acquisition is for aggregate consideration (including all Indebtedness assumed) of in excess of Thirty Million Dollars ($30,000,000), the Borrower shall have delivered to the Administrative Agent, at least 5 Business Days prior to the consummation of such Acquisition a certificate from a Responsible Officer of the Borrower demonstrating (in detail reasonably satisfactory to the Administrative Agent) pro forma compliance with the covenants set forth in Section 7.11 at the time of the acquisition and thereafter;

 

 

(f)    the Borrower shall have delivered to the Administrative Agent not less than 10 Business Days prior to the consummation of such Acquisition a summary providing a reasonably detailed description of the target and the terms and conditions of the proposed acquisition, material financial, business and legal due diligence information relating to the target as the Administrative Agent may reasonably request, and all material legal documentation pertaining to such acquisition;

 

(g)    the assets acquired in such acquisition shall be owned exclusively by the Borrower or one of its Domestic Subsidiaries; and

 

(h)    the Acquisition is consistent with the Borrower’s corporate strategy and business plan.

 

“Permitted Foreign Acquisition” means an Acquisition which satisfies each of the following conditions:

 

(a)    any existing Subsidiary of the Borrower or any Subsidiary thereof created for the purpose of effecting the Acquisition is not a Domestic Subsidiary.

 

(b)    the Acquisition is not hostile and the board of directors or other governing body of the target have approved such Acquisition;

 

(c)    in the event that the trailing twelve-month EBITDA of the target of such Acquisition exceeds US $15,000,000, the Borrower has delivered to the Administrative Agent at least 10 Business Days prior to the consummation of such Acquisition the most recent audited financial statements of such target (or other financial due diligence reasonably acceptable to the Administrative Agent in its sole discretion);

 

(d)    both before and after giving effect to any Acquisition, no Default or Event of Default shall have occurred and be continuing;

 

(e)    the Borrower shall have delivered to the Administrative Agent, at least 5 Business Days prior to the consummation of such Acquisition a certificate from a Responsible Officer of the Borrower demonstrating (in detail reasonably satisfactory to the Administrative Agent) pro forma compliance with the covenants set forth in Section 7.11 at the time of the acquisition and thereafter;

 

(f)    the Borrower shall have delivered to the Administrative Agent not less than 10 Business Days prior to the consummation of such Acquisition a summary providing a reasonably detailed description of the target and the terms and conditions of the proposed acquisition, material financial, business and legal due diligence information relating to the target as the Administrative Agent may reasonably request, and all material legal documentation pertaining to such acquisition;

 

(g)    the assets acquired in such acquisition shall be owned exclusively by the Borrower or one of its Subsidiaries;

 

(h)    the Acquisition is consistent with the Borrower’s corporate strategy and business plan; and

 

 

(i)    the aggregate consideration paid, together with any Indebtedness assumed in connection therewith, does not exceed, in the aggregate, $350,000,000 during the term hereof.

 

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

 

“Platform” means DebtX, Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system.

 

“Prime Rate” means a rate per annum equal to the prime rate of interest announced from time to time by Citizens Bank or its parent company (which is not necessarily the lowest rate charged to any customer), changing when and as said prime rate changes.

 

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

 

“Recipient” means any Lender or the Administrative Agent, as applicable.

 

“Register” has the meaning specified in Section 11.06(c).

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person’s Affiliates.

 

“Relevant Governmental Body” means (a) with respect to Dollars, the Federal Reserve Board or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York, (b) with respect to Pounds Sterling, the Bank of England, or a committee officially endorsed or convened by the Bank of England or, in each case, any successor thereto, (c) with respect to Euros, the European Central Bank, or a committee officially endorsed or convened by the European Central Bank or, in each case, any successor thereto, and (d) with respect to a benchmark replacement in respect of obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, any other currency, (1) the central bank for the currency in which such obligations, interest, fees, commissions or other amounts are denominated, or calculated with respect to, or any central bank or other supervisor which is responsible for supervising either (A) such benchmark replacement or (B) the administrator of such benchmark replacement or (2) any working group or committee officially endorsed or convened by (A) the central bank for the currency in which such obligations, interest, fees, commissions or other amounts are denominated, or calculated with respect to, (B) any central bank or other supervisor that is responsible for supervising either (i) such benchmark replacement or (ii) the administrator of such benchmark replacement, (C) a group of those central banks or other supervisors or (D) the Financial Stability Board or any part thereof.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

 

 

“Required Lenders” means, as of any date of determination, Lenders holding more than 50% of the sum of the aggregate Commitments.

 

“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

 

“Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or controller of a Loan Party and any other officer of the applicable Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

 

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to any Person’s stockholders, partners or members (or the equivalent of any thereof), or any option, warrant or other right to acquire any such dividend or other distribution or payment, any payment of any subordinated Indebtedness or the payment of any management or similar fees.

 

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., and any successor thereto.

 

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State or (b) the United Nations Security Council, the European Union or any European Union member state, His Majesty’s Treasury of the United Kingdom or other relevant sanctions authority.

 

“Sanctions Laws” has the meaning specified in Section 5.20.

 

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

“SOFR” means a rate equal to the secured overnight financing rate as published by the SOFR Administrator on the website of the SOFR Administrator, currently at http//www.newyorkfed.org (or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time).

 

“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

 

“SOFR Borrowing” means, as to any Borrowing, the SOFR Loans comprising such Borrowing.

 

 

“SOFR Loan” means a Loan that bears interest at a rate based on Term SOFR, other than pursuant to clause (c) of the definition of “Alternate Base Rate” or the definition of “Daily SOFR Rate”.

 

“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Subject 2024 Acquisitions” means, collectively, the Amran Acquisition and the Narayan Acquisition.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

“Swap Obligation” means, with respect to any Loan Party, any obligation to pay or to perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

 

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

 

“Synthetic Debt” means, with respect to any Person as of any date of determination thereof, all obligations of such Person in respect of transactions entered into by such Person that are intended to function primarily as a borrowing of funds but are not otherwise included in the definition of “Indebtedness” or as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so‑called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Term Loan Facility” means, at any time, the aggregate amount of the Lenders’ Commitments at such time.

 

“Term Loan Note” means a promissory note made by the Borrower in favor of Lender evidencing the Term Loan made by such Lender, substantially in the form of Exhibit A.

 

“Term SOFR” means a rate per annum equal to the greater of (a) the sum of (i) Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Term SOFR Determination Day”) that is two (2) Government Securities Business Days prior to the first day of such Interest Period; provided, however, that if as of 5:00 p.m. (New York City time) on any Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding Government Securities Business Day is not more than three (3) Government Securities Business Days prior to such Term SOFR Determination Day plus (ii) the Term SOFR Adjustment, and (b) the Floor.

 

 

“Term SOFR Adjustment” means 0.10000%.

 

“Term SOFR Administrator” means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion).

 

“Term SOFR Determination Day” has the meaning specified in the definition of “Term SOFR”.

 

“Term SOFR Reference Rate” means the forward-looking term rate based on SOFR published by the Term SOFR Administrator and displayed on CME’s Market Data Platform (or other commercially available source providing such quotations as may be selected by the Administrative Agent from time to time).

 

“Threshold Amount” means $10,000,000.

 

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to (i) Term SOFR or (ii) the Alternate Base Rate.

 

“UCC” means the Uniform commercial Code as in effect in the State of New York; provided that if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

 

“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

 

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

 

“United States” and “U.S.” mean the United States of America.

 

“Unrestricted Subsidiary” means a Subsidiary which is not a Guarantor.

 

“USA PATRIOT Act” means The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).

 

“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

 

 

1.02    Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

 

(a)    The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Preliminary Statements, Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

(b)    In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

 

(c)    Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

1.03    Accounting Terms.  Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

 

 

(a)    Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

 

1.04    Rounding. Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

1.05    Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

 

1.06    Resolution of Drafting Ambiguities. Each Loan Party acknowledges and agrees that it was represented by counsel in connection with the execution and delivery of the Loan Documents to which it is a party, that it and its counsel reviewed and participated in the preparation and negotiation hereof and thereof and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation hereof or thereof.

 

1.07    Rates. The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to (a) administration, construction, calculation, publication, continuation, discontinuation, movement, or regulation of, or any other matter related to, the Alternate Base Rate, the Benchmark, or any alternative, successor or replacement rate thereto (including any Benchmark Replacement), any component definition thereof or rates referred to in the definition thereof, including whether any Benchmark is similar to, or will produce the same value or economic equivalence of, any other rate or whether financial instruments referencing or underlying the Benchmark will have the same volume or liquidity as those referencing or underlying any other rate, (b) the impact of any regulatory statements about, or actions taken with respect to any Benchmark (or component thereof), (c) changes made by any administrator to the methodology used to calculate any Benchmark (or component thereof) or (d) the effect, implementation or composition of any Conforming Changes. The Administrative Agent and its affiliates or other related entities may engage in transactions that affect the calculation of the Alternate Base Rate, the Benchmark, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto, in each case, in a manner adverse to the Borrower. The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to, such transactions. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain the Alternate Base Rate, the Benchmark, or any alternative, successor or replacement rate (including any Benchmark Replacement), in each case pursuant to the terms of this Credit Agreement, and shall have no liability to the Borrower, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.

 

 

1.08    Divisions. For all purposes under the Loan Documents, in connection with Division: (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Equity Interests at such time.

 

ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01    Term Loan Commitments. Subject to the terms and conditions hereof and relying upon the representations and warranties herein set forth, each Lender agrees, severally and not jointly, to make a single loan (each such loan, a “Term Loan”) to the Borrower in Dollars on the Closing Date in a principal amount equal to its Commitment (each such loan, a “Term Loan”). Term Loans which are prepaid or repaid, in whole or in part, may not be reborrowed. Term Loans shall be SOFR Loans except at such times as they shall be ABR Loans as set forth herein.

 

2.02    Borrowings, Conversions and Continuations of Loans.

 

(a)    Except as otherwise provided herein, a SOFR Loan may be continued or converted only on the last day of an Interest Period for such SOFR Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as SOFR Loans without the consent of the Required Lenders.

 

(b)    The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for SOFR Loans upon determination of such interest rate. At any time that ABR Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Citizens’ Prime Rate used in determining the Alternate Base Rate promptly following the public announcement of such change.

 

2.03    Prepayments.  Optional. The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Term Loans in whole or in part without premium or penalty; provided that (A) such notice must be received by the Administrative Agent not later than 11:00 a.m. (1) three Business Days prior to any date of prepayment of SOFR Loans and (2) on the date of prepayment of ABR Loans; (B) any prepayment of SOFR Loans shall be in a principal amount of $2,000,000 or a whole multiple of $500,000 in excess thereof; and (C) any prepayment of ABR Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s ratable portion of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.

 

 

(a)    Required.  Upon any increase to the Revolving Credit Commitments under the Existing Credit Facility, the Borrower shall immediately repay to the Lenders the principal amount of all Term Loans outstanding together with all interest accrued and unpaid thereon in an aggregate amount equal to such increase.

 

 (i)    The entire principal amount of outstanding Term Loans shall be repaid in full on the Maturity Date.

 

2.04    Payments of Interest. Interest on each Term Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

 

2.05    Repayment of Loans. The Borrower shall repay to the Lenders on the Maturity Date for the Term Loan Facility the aggregate principal amount of all Term Loans outstanding on such date, together with all interest accrued and unpaid thereon.

 

2.06    Interest.  Subject to the provisions of Section 2.08(b), (i) each SOFR Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Term SOFR for such Interest Period plus the Applicable Margin; and (ii) each ABR Loan shall bear interest on the outstanding principal amount thereof from the applicable Borrowing Date at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin.

 

(a)     If any amount of principal of any Loan is not paid when due (after giving effect to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

 

(i)    If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due (after giving effect to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

 

(ii)    Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

 

(iii)    Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

2.07    Fees.

 

(a)      Arrangement Fees. On the Closing Date, as compensation to the lead arranger, the Borrower shall pay the Arrangement Fee as set forth in the Engagement Letter.

 

 

(b)      Funding Fee. On each date set forth below following the Closing Date, the Borrower shall pay a funding fee equal to the percentage set forth below of the principal balance of the Term Loan Facility outstanding on such date:

 

Payment Date	Funding Fee Percentage
Days 0-45	0.00%
Day 46	0.25%
Day 91	0.50%
Day 181	0.75%
Day 271	1.00%

 

(c)       Other Fees. To the extent not otherwise set forth herein, Borrower shall pay the fees and expenses set forth in the Engagement Letter.

 

2.08    Computation of Interest and Fees; Retroactive Adjustments of Applicable Margin. All computations of interest for ABR Loans when the Alternate Base Rate is determined by Citizens’ Prime Rate shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360‑day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid; provided that any Loan that is repaid on the same day on which it is made shall bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

2.09    Evidence of Debt. The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower, as applicable, shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

 

2.10    Payments Generally. All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage in respect of the Term Loan Facility (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected on computing interest or fees, as the case may be.

 

 

2.11    Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (a) Obligations due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender at such time to (ii) the aggregate amount of the Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (b) Obligations owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing (but not due and payable) to such Lender at such time to (ii) the aggregate amount of the Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Parties at such time) of payment on account of the Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of Obligations then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be; provided that:

 

(i)    if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

 

(ii)    the provisions of this Section shall not be construed to apply to (A) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or (B) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).

 

 

ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01    Taxes. Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes. Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall to the extent permitted by applicable Laws be made free and clear of and without reduction or withholding for any Taxes. If, however, applicable Laws require the Borrower or the Administrative Agent to withhold or deduct any Tax, such Tax shall be withheld or deducted in accordance with such Laws as determined by the Borrower or the Administrative Agent, as the case may be, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.

 

(i)    If the Borrower or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including both United States Federal backup withholding and withholding taxes and including, without limitation, any withholding taxes imposed pursuant to FATCA, from any payment, then (A) the Administrative Agent shall withhold or make such deductions as are determined by the Administrative Agent to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the Administrative Agent shall timely pay the full amount withheld or deducted to the Relevant Governmental Authority in accordance with the Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes or Other Taxes, the sum payable by the Borrower shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or any Lender, as the case may be, receives an amount equal to the sum it would have received had no such withholding or deduction been made.

 

(b)    Payment of Other Taxes by the Borrower. Without limiting the provisions of subsection (a) above, the Borrower shall timely pay any Other Taxes to the Relevant Governmental Authority in accordance with applicable law.

 

(c)    Tax Indemnifications.  Without limiting the provisions of subsection (a) or (b) above, the Borrower shall, jointly and severally, and do hereby indemnify the Administrative Agent and each Lender, and shall make payment in respect thereof within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) withheld or deducted by the Borrower or the Administrative Agent or paid by the Administrative Agent and such Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the Relevant Governmental Authority. The Borrower shall also, and do hereby indemnify the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, for any amount which a Lender for any reason fails to pay indefeasibly to the Administrative Agent as required by clause (ii) of this subsection. A certificate as to the amount of any such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(i)    Without limiting the provisions of subsection (a) or (b) above, each Lender shall, and does hereby, indemnify the Borrower and the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, against any and all Taxes and any and all related losses, claims, liabilities, penalties, interest and expenses (including the fees, charges and disbursements of any counsel for the Borrower or the Administrative Agent) incurred by or asserted against the Borrower or the Administrative Agent by any Governmental Authority as a result of the failure by such Lender, to deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required to be delivered by such Lender, as the case may be, to the Borrower or the Administrative Agent pursuant to subsection (e). Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii). The agreements in this clause (ii) shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender and the repayment, satisfaction or discharge of all other Obligations.

 

 

(d)    Evidence of Payments. Upon request by the Borrower or the Administrative Agent, as the case may be, after any payment of Taxes by the Borrower or the Administrative Agent to a Governmental Authority as provided in this Section 3.01, the Borrower shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Borrower, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to the Borrower or the Administrative Agent, as the case may be.

 

(e)    Status of Lenders; Tax Documentation.  Each Lender shall deliver to the Borrower and to the Administrative Agent, at the time or times prescribed by applicable Laws or when reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Laws or by the taxing authorities of any jurisdiction and such other reasonably requested information as will permit the Borrower or the Administrative Agent, as the case may be, to determine (A) whether or not payments made hereunder or under any other Loan Document are subject to Taxes, (B) if applicable, the required rate of withholding or deduction, and (C) such Lender’s entitlement to any available exemption from, or reduction of, applicable Taxes in respect of all payments to be made to such Lender by the Borrower pursuant to this Agreement or otherwise to establish such Lender’s status for withholding tax purposes in the applicable jurisdiction.

 

(i)    Without limiting the generality of the foregoing, if the Borrower is resident for tax purposes in the United States, any Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to the Borrower and the Administrative Agent executed originals of Internal Revenue Service Form W‑9 or such other documentation or information prescribed by applicable Laws or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent, as the case may be, to determine whether or not such Lender is subject to backup withholding or information reporting requirements; and

 

  (I)    executed copies of any other form prescribed by applicable Laws as a basis for claiming exemption from or a reduction in United States Federal withholding tax together with such supplementary documentation as may be prescribed by applicable Laws to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made.

 

(ii)    Each Lender shall promptly (A) notify the Borrower and the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (B) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws of any jurisdiction that the Borrower or the Administrative Agent make any withholding or deduction for taxes from amounts payable to such Lender.

 

 

(iii)   If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable Laws (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA, to determine whether such Lender has complied with such Lender’s obligations under FATCA or to determine the amount, if any, to deduct and withhold from such payment.

 

(f)    Treatment of Certain Refunds. Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes withheld or deducted from funds paid for the account of such Lender. If the Administrative Agent or any Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses incurred by the Administrative Agent or such Lender and without interest (other than any interest paid by the Relevant Governmental Authority with respect to such refund); provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the Relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

 

3.02    Inability to Determine Rates. Subject to Section 3.06, if, on or prior to the first day of any Interest Period for any SOFR Loans:

 

(a)    the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that such rate cannot be determined pursuant to the definition thereof, or

 

(b)    the Required Lenders determine that for any reason in connection with any request for a SOFR Loan or a conversion thereto or a continuation thereof that Term SOFR for any requested Interest Period with respect to a proposed SOFR Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, and the Required Lenders have provided notice of such determination to the Administrative Agent, the Administrative Agent will promptly so notify the Borrower and each Lender.

 

 

Upon notice thereof by the Administrative Agent to the Borrower, any obligation of the Lenders to make or maintain SOFR Loans, and any right of the Borrower to continue SOFR Loans or to convert ABR Loans to SOFR Loans shall be suspended (to the extent of the affected Interest Periods) until the Administrative Agent (with respect to clause (b), at the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, (i) the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of SOFR Loans (to the extent of the affected Interest Periods) or, failing that, the Borrower will be deemed to have converted any such request into a request for a Borrowing of or conversion to ABR Loans in the amount specified therein and (ii) any outstanding affected SOFR Loans will be deemed to have been converted into ABR Loans at the end of the applicable Interest Period. Upon any such conversion, the Borrower shall also pay accrued interest on the amount so converted, together with any additional amounts required pursuant to Section 3.04. Subject to Section 3.06, if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that “Term SOFR” cannot be determined pursuant to the definition thereof on any given day, the interest rate on ABR Loans shall be determined by the Administrative Agent without reference to clause (c) of the definition of “Alternate Base Rate” until the Administrative Agent revokes such determination.

 

3.03    Increased Costs; Illegality.

 

(a)      Increased Costs Generally. If any Change in Law shall:

 

(i)    impose, modify or deem applicable any reserve (including pursuant to regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, special, supplemental or other marginal reserve requirement) with respect to eurocurrency funding), special deposit, liquidity, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by or any Lender;

 

(ii)    subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

 

(iii)    impose on any Lender any other condition, cost or expense (other than Taxes) affecting this Credit Agreement or Loans made by such Lender;

 

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender, or to reduce the amount of any sum received or receivable by such Lender (whether of principal, interest or any other amount) then, upon request of such Lender, the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender, for such additional costs incurred or reduction suffered.

 

 

(b)    Capital Requirements. If any Lender determines that any Change in Law affecting such Lender or any Lending Office of such Lender or such Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Credit Agreement, the Commitments of such Lender or the Loans made by such Lender, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy and liquidity), then from time to time the Borrower will pay to such Lender, such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered; provided that the Borrower shall not be required to compensate such Lender pursuant to this paragraph for any amounts incurred more than 180 days prior to the date that such Lender notifies the Borrower of such Lender’s intention to claim compensation therefor; provided, further, that if the circumstances giving rise to such claim have a retroactive effect, then such 180 day period shall be extended to include the period of such retroactive effect.

 

(c)    Certificates for Reimbursement. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to the Borrower, shall be conclusive absent manifest error. The Borrower shall pay such Lender, the amount shown as due on any such certificate within 10 days after receipt thereof.

 

(d)    Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

 

(e)    Illegality. If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its Lending Office to make, maintain or fund Loans whose interest is determined by reference to any rate hereunder, or to determine or charge interest rates based upon any rate hereunder, then, upon notice thereof by such Lender to the Borrower (through the Administrative Agent), (a) any obligation of the Lenders to make or maintain SOFR Loans and any right of the Borrower to continue SOFR Loans or to convert ABR Loans to SOFR Loans shall be suspended, and (b) the interest rate on which ABR Loans shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to clause (c) of the definition of “Alternate Base Rate”, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (i) the Borrower shall, if necessary to avoid such illegality, upon demand from any Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all SOFR Loans to ABR Loans (the interest rate on which ABR Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to clause (c) of the definition of “Alternate Base Rate”), on the last day of the Interest Period therefor, if all affected Lenders may lawfully continue to maintain such Loans to such day, or immediately, if any Lender may not lawfully continue to maintain such Loans to such day, and (ii) if necessary to avoid such illegality, the Administrative Agent shall during the period of such suspension compute the Alternate Base Rate without reference to clause (c) of the definition of “Alternate Base Rate” in each case until the Administrative Agent is advised in writing by each affected Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon SOFR or Term SOFR. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted, together with any additional amounts required hereunder.

 

 

3.04    Compensation for Losses. In the event of (a) the payment or prepayment of any principal of any SOFR Loan other than on the last day of the Interest Period applicable thereto whether voluntary, mandatory, automatic, by reason of acceleration (including as a result of an Event of Default), (b) the conversion of any SOFR Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (c) the failure to borrow, convert, continue or prepay any SOFR Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked hereunder and is revoked in accordance therewith), or (d) the assignment of any SOFR Loan other than on the last day of the Interest Period applicable thereto or maturity date applicable thereto as a result of a request by the Borrower, then, in any such event, the Borrower shall compensate each Lender for any loss, cost and expense attributable to such event, including any loss, cost or expense arising from the liquidation or redeployment of funds. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

 

3.05    Mitigation Obligations; Replacement of Lenders; Designated Lenders.  Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or the Borrower are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.03, then such Lender shall, as applicable, use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.03, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

(a)    Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, the Borrower may replace such Lender in accordance with Section 11.13.

 

(b)    Designated Lenders. Each of the Administrative Agent and each Lender at its option may make any Credit Extension or otherwise perform its obligations hereunder through any Lending Office (each, a “Designated Lender”); provided that any exercise of such option shall not affect the obligation of such Borrower to repay any Credit Extension in accordance with the terms of this Agreement. Any Designated Lender shall be considered a Lender; provided that in the case of an Affiliate or branch of a Lender, such provisions that would be applicable with respect to Credit Extensions actually provided by such Affiliate or branch of such Lender shall apply to such Affiliate or branch of such Lender to the same extent as such Lender.

 

 

3.06    Benchmark Replacement Setting.

 

(a)      Benchmark Replacement.

 

(i)    Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (a) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent (subject to clause (y) below) of any other party to, this Credit Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (b) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5^th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Credit Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders. If the Benchmark Replacement is Daily Simple SOFR, all interest payments will be payable on a monthly basis.

 

(ii)    Each Swap Agreement shall be deemed not to be a “Loan Document” for purposes of this Section 3.06).

 

(b)     Benchmark Replacement Conforming Changes. In connection with the use, administration, adoption or implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Credit Agreement or any other Loan Document.

 

(c)    Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Lenders of (i) the implementation of any Benchmark Replacement and (ii) the effectiveness of any Conforming Changes in connection with the use, administration, adoption or implementation of a Benchmark Replacement. The Administrative Agent will notify the Borrower of (x) the removal or reinstatement of any tenor of a Benchmark pursuant to Section 3.06(d) and (y) the commencement of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 3.06, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Credit Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 3.06.

 

 

(d)    Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term SOFR Reference Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the administrator of such Benchmark or the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is not or will not be representative, then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is not or will not be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor.

 

(e)    Benchmark Unavailability Period. Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of SOFR Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request into a request for a Borrowing of or conversion to ABR Loans. During a Benchmark Unavailability Period or at any time that a tenor for the then‑current Benchmark is not an Available Tenor, the component of the Alternate Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Alternate Base Rate.

 

3.07    Survival. All of the Borrower’s obligations under this Article III shall survive repayment of all Obligations hereunder and resignation of the Administrative Agent.

 

ARTICLE IV
CONDITIONS PRECEDENT TO TERM LOAN

 

The obligation of each Lender to make its Term Loan hereunder is subject to satisfaction of the following conditions precedent:

 

(a)    The Administrative Agent’s receipt of the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent and each of the Lenders:

 

 (i)    executed counterparts of this Agreement and the Guaranty, sufficient in number for distribution to the Administrative Agent each Lender and the Borrower;

 

 (ii)    a Note executed by the Borrower in favor of each Lender requesting a Note.

 

 

 (iii)    such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party;

 

 (iv)    such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each of the Borrower and its Subsidiaries are validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

 

 (v)    a certificate signed by a Responsible Officer of the Borrower certifying (A) that the Borrower has complied in all material respects with all of the covenants and agreements specified in this Article IV and (B) that there has been no event or circumstance since the date of the Audited Financial Statements that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect; and

 

 (vi)    evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is in effect.

 

(b)    (i) All fees required to be paid to the Administrative Agent and the Arranger on or before the Closing Date shall have been paid and (ii) all fees required to be paid to the Lenders on or before the Closing Date shall have been paid.

 

(c)    Unless waived by the Administrative Agent, the Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).

 

(d)    The Lenders shall have completed a due diligence investigation of the Borrower, in scope, and with results, satisfactory to the Lenders, and shall have been given such access to the management, records, books of account, contracts and properties of the Borrower and shall have received such financial, business and other information regarding each of the foregoing Persons and businesses as they shall have requested. All of the representations and warranties contained herein shall be true, accurate and complete and no Default or Event of Default shall have occurred.

 

(e)    The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Closing Date) from Alan Glass, general counsel to the Borrower, in form, scope and substance satisfactory to the Administrative Agent. The Borrower hereby requests such counsel to deliver such opinions.

 

 

(f)    At least five days prior to the Closing Date, each Lender shall have received:

 

 (i)    any and all documentation and other information requested by such Lender in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including the USA PATRIOT Act; and

 

 (ii)    to the extent the Borrower constitutes a “legal entity customer” under the Beneficial Ownership Regulation, a completed Beneficial Ownership Certification in relation to the Borrower.

 

(g)    Subject 2024 Acquisitions.

 

 (i)      Amran. The Administrative Agent shall have received:

 

(A)    Copies of all acquisition documents for the Amran Acquisition, together all exhibits and schedules thereto;

 

(B)    an executed Settlement Statement showing payments of all amounts required to complete the Amran Acquisition and evidencing that all funds other than the proceeds of the Term Loan have been advanced;

 

(C)    annual financial statements of Amran, Inc. and, if available, audited financial statements of Amran, Inc.; and

 

(D)    Evidence of the approval of the Amran Acquisition by the board of directors (or equivalent) of Amran, Inc.

 

 (ii)     Narayan. The Administrative Agent shall have received:

 

 (A)    Copies of all acquisition documents for the Narayan Acquisition, together all exhibits and schedules thereto;

 

(B)    an executed Settlement Statement showing payments of all amounts required to complete the Acquisition and evidencing that all funds other than the proceeds of the Term Loan have been advanced;

 

(C)    annual financial statements of Narayan Powertech Private Limited and, if available, audited financial statements of Narayan Powertech Private Limited; and

 

(D)    Evidence of the approval of the Narayan Acquisition by the board of directors (or equivalent) or Narayan Powertech Private Limited.

 

 (iii)   Both Subject 2024 Acquisitions. The Administrative Agent shall have received:

 

(A)    pre and post-closing (upon giving effect to the Subject 2024 Acquisitions) organizational charts of the Borrower and all its Subsidiaries; and

 

 

(B)    a Pro Forma Compliance Certificate evidencing that, upon the consumption of the Subject 2024 Acquisitions, the financial covenants set forth in this Agreement and in the Existing Credit Facility shall be in compliance.

 

Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliance with the conditions specified in this Article IV, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

ARTICLE V
REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and the Lenders that:

 

5.01    Existence, Qualification and Power. Each Loan Party and each of its Subsidiaries (a) is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is licensed and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

5.02    Authorization; No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is or is to be a party have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law.

 

5.03    Governmental Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document or (b) the exercise by the Administrative Agent or any Lender of its rights under the Loan Documents, except for the authorizations, approvals, actions, notices and filings listed on Schedule 5.03, all of which have been duly obtained, taken, given or made and are in full force and effect and the filing of a copy of the Credit Agreement with the Securities and Exchange Commission in accordance with applicable law, which filings (or the failure to file) do not affect the validity or enforceability of the Term Loans.

 

 

5.04    Binding Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors’ rights generally and other general equitable principles.

 

5.05    Financial Statements; No Material Adverse Effect.  The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all Material Indebtedness and other liabilities, direct or contingent, of the Borrower and its Subsidiaries on a consolidated basis as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.

 

(a)    The unaudited consolidated balance sheet of the Borrower and its Subsidiaries dated September 30, 2024, and the related consolidated and consolidating statements of income or operations, shareholders’ equity and cash flows for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments. Schedule 5.05 sets forth all material indebtedness and other liabilities, direct or contingent, of the Borrower and its consolidated Subsidiaries as of the date of such financial statements, including liabilities for taxes, material commitments and Indebtedness.

 

(b)    Since June 30, 2024, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

 

(c)    The consolidated balance sheet of the Borrower and its Subsidiaries as at September 30, 2024 and the related consolidated and consolidating pro forma statements of income and cash flows of the Borrower and its Subsidiaries for the three months then ended, certified by the chief financial officer or treasurer of the Borrower, copies of which have been furnished to each Lender, fairly present the consolidated and consolidating pro forma financial condition of the Borrower and its Subsidiaries as at such date and the consolidated and consolidating pro forma results of operations of the Borrower and its Subsidiaries for the period ended on such date, in each case giving effect to the Loans, all in accordance with GAAP.

 

(d)    The consolidated and consolidating forecasted balance sheet, statements of income and cash flows of the Borrower and its Subsidiaries delivered pursuant to Article IV or Section 6.01(c) were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such forecasts, and represented, at the time of delivery, the Borrower’s best estimate of its future financial condition and performance.

 

 

5.06    Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority (including, without limitation and the SEC), by or against the Borrower or any of its Subsidiaries or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement, any other Loan Document or (b) either individually or in the aggregate, if determined adversely, could reasonably be expected to have a Material Adverse Effect.

 

5.07    No Default. Neither the Borrower nor any Subsidiary thereof is in default under or with respect to, or a party to, any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

 

5.08    Ownership of Property; Liens; Investments.  The Borrower and each of its Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(a)     Schedule 5.08(b) sets forth a complete and accurate list of all Liens on the property or assets of the Borrower and each of its Subsidiaries, showing as of the date hereof the lienholder thereof, the principal amount of the obligations secured thereby and the property or assets of such Loan Party or such Subsidiary subject thereto. The property of each Loan Party and each of its Subsidiaries is subject to no Liens, other than Liens set forth on Schedule 5.08(b), and as otherwise permitted by Section 7.01.

 

(b)     The Borrower and each of its Subsidiaries has good, marketable and insurable fee simple title to the real property owned by such Loan Party or such Subsidiary, free and clear of all Liens, other than Liens permitted by the Loan Documents.

 

(c)     Each lease of real property under which the Borrower or any Subsidiary of a Loan Party is the lessee is the legal, valid and binding obligation of the lessor thereof, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors’ rights generally and other general equitable principles.

 

 (i)    Each lease of real property under which any Loan Party or any Subsidiary of a Loan Party is the lessor is the legal, valid and binding obligation of the lessee thereof, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors’ rights generally and other general equitable principles.

 

(d)    Schedule 5.08(e) sets forth a complete and accurate list of all Investments held by any Loan Party or any Subsidiary of a Loan Party in excess of $1,000,000 on the date hereof (other than Investments held by a Loan Party or Subsidiary in any other Subsidiary), showing as of the date hereof the amount, obligor or issuer and maturity, if any, thereof.

 

 

5.09    Environmental Compliance. The Loan Parties and their respective Subsidiaries conduct in the ordinary course of business a review of the effect of existing Environmental Laws and claims alleging potential liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, and as a result thereof the Borrower has reasonably concluded that such Environmental Laws and claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

5.10    Insurance. The properties of the Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or the applicable Subsidiary operates.

 

5.11    Taxes. The Borrower and its Subsidiaries have filed all Federal, state and other material tax returns and reports required to be filed, and have paid all Federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. There is no proposed tax assessment against the Borrower or any Subsidiary that would, if made, have a Material Adverse Effect.

 

5.12    ERISA Compliance. Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the best knowledge of the Borrower, nothing has occurred which would prevent, or cause the loss of, such qualification. The Borrower and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.

 

(a)    There are no pending or, to the best knowledge of the Borrower, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

 

(b)     No ERISA Event in excess of the Threshold Amount has occurred or is reasonably expected to occur; (ii) except as shown on Schedule 5.12, on the Closing Date no Pension Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) to the best knowledge of the Borrower and all ERISA Affiliates, neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA.

 

 

(c)      The Borrower represents and warrants as of the Closing Date that such Borrower is not and will not be using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect to the Borrower’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, or this Agreement.

 

5.13    Subsidiaries; Equity Interests; Loan Parties. As of the Closing Date, the Borrower has no Subsidiaries other than those specifically disclosed in Exhibit 21 to the Form 10-K for the fiscal year ended June 30, 2024 or on Schedule 5.13 hereto, and all of the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by a Loan Party free and clear of all Liens. The Borrower has no equity investments in any other corporation or entity other than those specifically disclosed in Exhibit 21 to the Form 10-K for the fiscal year ended June 30, 2024. Set forth on Schedule 5.13 is a complete and accurate list of all Loan Parties, showing as of the Closing Date (as to each Loan Party) the jurisdiction of its incorporation, the address of its principal place of business and its U.S. taxpayer identification number. The copy of the charter of each Loan Party and each amendment thereto provided pursuant to Article IV is a true and correct copy of each such document, each of which is valid and in full force and effect.

 

5.14    Margin Regulations; Investment Company Act.  The Borrower are not engaged and will not engage, principally or as one of their important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.

 

(a)      None of the Borrower, any Person Controlling the Borrower, or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

 

5.15    Disclosure. The Borrower has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time. As of the Closing Date, the information included in the Beneficial Ownership Certification is true and correct in all respects.

 

5.16    Compliance with Laws. Each Loan Party and each Subsidiary thereof is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

 

5.17    Intellectual Property; Licenses, Etc. Each Loan Party and each of its Subsidiaries own or possess the right to use all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person. No claim or litigation regarding any of the foregoing is pending or, to the best knowledge of the Borrower and its Subsidiaries, threatened, which either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

5.18    Solvency. Each Loan Party is, individually and together with its Subsidiaries on a consolidated basis, Solvent.

 

5.19    Casualty, Etc. Neither the businesses nor the properties of any Loan Party or any of its Subsidiaries are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance) that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

5.20    PATRIOT ACT; FCPA; OFAC.  The Borrower and its Subsidiaries and, to the knowledge of the Borrower and its Subsidiaries, each director, officer, agent, employee and controlled Affiliate of the Borrower and its Subsidiaries, is in compliance, in all material respects, with the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, the PATRIOT Act and any other applicable terrorism and money laundering Laws of the United States.

 

(a)      Each of the Borrower and its Subsidiaries and, to the knowledge of the Borrower and its Subsidiaries, each director, officer, agent, employee and controlled Affiliate of the Borrower and its Subsidiaries, is in compliance, in all material respects, with the FCPA and any other applicable anti-bribery or anti-corruption Laws of the United States (collectively, “Anti‑Corruption Laws”). No part of the proceeds of the Loans will be used, directly or, to the knowledge of the Borrower, indirectly for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of any Anti-Corruption Laws.

 

(b)      None of the Borrower or any of its Subsidiaries nor, to the knowledge of the Borrower and its Subsidiaries, any director, officer, agent, employee or controlled Affiliate of the Borrower or any of its Subsidiaries, is currently the subject of any U.S. sanctions or economic embargoes administered or enforced by the Office of Foreign Assets Control of the United States Department of the Treasury or any other sanctions authority of the United States (collectively, “Sanctions” and the associated Laws, collectively, “Sanctions Laws”). Each of the Borrower and its Subsidiaries and, to the knowledge of the Borrower and its Subsidiaries, each director, officer, agent, employee and controlled Affiliate of the Borrower and its Subsidiaries, is in compliance, in all material respects, with all Sanctions Laws. None of the Borrower or any of its Subsidiaries will directly or, to the knowledge of the Borrower and its Subsidiaries, indirectly use the proceeds of the Loans or otherwise make available such proceeds to any Person, for the purpose of financing the activities of any Person or in any country, region, or territory that at such time is the subject of any Sanctions.

 

 

5.21    Anti-Social Forces. Each Loan Party and each of its Subsidiaries is not or has not been classified as an Anti-Social Group, does not have or has not had any Anti-Social Relationship and does not engage or has not engaged in Anti-Social Conduct, whether directly or indirectly through a third party.

 

5.22    Affected Financial Institutions. No Loan Party is an Affected Financial Institution.

 

ARTICLE VI
AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied the Borrower shall, and shall cause each Subsidiary to:

 

6.01    Financial Statements. Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:

 

(a)      as soon as available, but in any event within 90 days after the end of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, changes in shareholders’ equity, and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, such consolidated statements to be audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit, and such consolidating statements to be certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower to the effect that such statements are fairly stated in all material respects when considered in relation to the consolidated financial statements of the Borrower and its Subsidiaries;

 

(b)     as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations, changes in shareholders’ equity, and cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, such consolidated statements to be certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower as fairly presenting the financial condition, results of operations, shareholders’ equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes and such consolidating statements to be certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower to the effect that such statements are fairly stated in all material respects when considered in relation to the consolidated financial statements of the Borrower and its Subsidiaries; and

 

 

(c)    as soon as available, but in any event within 75 days after the end of each fiscal year of the Borrower, an annual business plan and budget of the Borrower and its Subsidiaries on a consolidated basis, including forecasts prepared by management of the Borrower, in form satisfactory to the Administrative Agent and the Required Lenders, of consolidated balance sheets and statements of income or operations and cash flows of the Borrower and its Subsidiaries on a quarterly basis for the immediately following fiscal year.

 

As to any information contained in materials furnished pursuant to Section 6.02(d), the Borrower shall not be separately required to furnish such information under Section 6.01(a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described in Sections 6.01(a) and (b) above at the times specified therein.

 

6.02   Certificates; Other Information. Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:

 

(a)    concurrently with the delivery of the financial statements referred to in Section 6.01(a), a certificate of its independent certified public accountants certifying such financial statements and stating that in making the examination necessary therefor no knowledge was obtained of any Default under the financial covenants set forth herein or, if any such Default shall exist, stating the nature and status of such event;

 

(b)    concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and Section 6.01(b), (i) a duly completed Compliance Certificate signed by the chief executive officer, chief financial officer, treasurer or controller of the Borrower which, among other matters, includes a certification that no Default or Event of Default exists and (ii) a copy of management’s discussion and analysis with respect to such financial statements;

 

(c)    promptly after any request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Loan Party by independent accountants in connection with the accounts or books of any Loan Party or any of its Subsidiaries, or any audit of any of them;

 

(d)    promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Borrower, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, or with any national securities exchange, and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto;

 

(e)    promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities of any Loan Party or of any of its Subsidiaries pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lenders pursuant to Section 6.01 or any other clause of this Section 6.02;

 

(f)    promptly, and in any event within five Business Days after receipt thereof by any Loan Party or any Subsidiary thereof, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of any Loan Party or any Subsidiary thereof;

 

 

(g)    promptly following any request therefor, deliver information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” requirements under the PATRIOT Act, the Beneficial Ownership Regulation or other applicable anti-money laundering laws; and

 

(h)    promptly, such additional information regarding the business, financial, legal or corporate affairs of any Loan Party or any Subsidiary thereof, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request.

 

Documents required to be delivered pursuant to Section 6.01(a), Section 6.01(b), Section 6.02(b)(ii) or Section 6.02(d) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which such documents are posted by the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of the Compliance Certificates required by Section 6.02(b) to the Administrative Agent. Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

 

The Borrower hereby acknowledges that the Administrative Agent and/or the Arranger will make available to the Lenders materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on a Platform.

 

6.03  Notices. Promptly, and in any event within three Business Days after the Borrower or any of its Subsidiaries obtains knowledge thereof, notify the Administrative Agent and each Lender:

 

(a)    of the occurrence of any Default and of any Event of Default, which notice shall specify the nature thereof, the period of existence thereof and what action the Borrower or its Subsidiary proposes to take with respect thereto;

 

(b)    of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including (i) breach or non-performance of, or any default under, a Contractual Obligation of the Borrower or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension between the Borrower or any Subsidiary and any Governmental Authority; or (iii) the commencement of, or any material development in, any litigation or proceeding affecting the Borrower or any Subsidiary, including pursuant to any applicable Environmental Laws, in each case, which has resulted or could reasonably be expected to result in a Material Adverse Effect;

 

 

(c)    of the occurrence of any ERISA Event;

 

(d)    of any material change in accounting policies or financial reporting practices by any Loan Party or any Subsidiary thereof;

 

(e)    of the occurrence of any material Disposition of property or assets; and

 

(f)    any significant adverse change (in the Borrower’s reasonable judgment) in the Borrower’s or any Subsidiaries’ relationship with, or any significant event or circumstance which is (in the Borrower’s reasonable judgment) likely to adversely affect the Borrower’s or any Subsidiary’s relationship with (A) any customer or related group of customers) representing more than 10% of the Borrower’s consolidated revenues during its most recent fiscal year, or (B) any supplier which is material to the operations of the Borrower and its Subsidiaries considered as an entity.

 

Each notice pursuant to Section 6.03 (other than Section 6.03(e) or (f)) shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

 

6.04    Payment of Obligations. Pay and discharge as the same shall become due and payable, all its obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower or such Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien upon its property; and (c) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness.

 

6.05    Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization (except as otherwise permitted under Section 7.04); (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.

 

6.06    Maintenance of Properties. (a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; and (b) make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

 

 

6.07    Maintenance of Insurance. Maintain with financially sound and reputable insurance companies not Affiliates of the Borrower, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons.

 

6.08    Compliance with Laws. Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

 

6.09    Books and Records. (a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Borrower or such Subsidiary, as the case may be.

 

6.10    Inspection Rights. Permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the expense of the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower and, so long as no Default or Event of Default has occurred and is continuing, Borrower will not be required to reimburse the Administrative Agent for more than two such visits in any fiscal year; provided, however, that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.

 

6.11    Use of Proceeds. Use the proceeds of the Term Loan for payment of a portion of the purchase price of the Subject 2024 Acquisitions.

 

6.12    Covenant to Guarantee Obligations; Additional Subsidiaries. If any direct or indirect Domestic Subsidiary which is a Material Subsidiary is formed or acquired after the Closing Date, notify the Administrative Agent in writing thereof not later than the tenth Business Day after the date on which such Subsidiary is formed or acquired or such Unrestricted Subsidiary becomes a Subsidiary, and, so long as the provision of such guaranty would not have a Material Adverse Effect on the business of the Borrower or such guarantor, the Borrower will cause such Subsidiary to execute and deliver a joinder to the Guaranty (or otherwise become a party thereto in the manner provided therein) and become a party to each applicable Loan Document in the manner provided therein, in each case not later than the tenth Business Day after the date on which such Subsidiary is formed or acquired or such Unrestricted Subsidiary becomes a Subsidiary.

 

 

6.13    Compliance with Environmental Laws. Comply, and cause all lessees and other Persons operating or occupying its properties to comply, in all material respects, with all applicable Environmental Laws and Environmental Permits; obtain and renew all Environmental Permits necessary for its operations and properties; and conduct any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, in accordance with the requirements of all Environmental Laws; provided, however, that neither the Borrower nor any of its Subsidiaries shall be required to undertake any such cleanup, removal, remedial or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.

 

6.14    Further Assurances. Promptly upon request by the Administrative Agent, or any Lender through the Administrative Agent, correct any material defect or error that may be discovered in any Loan Document or in the execution or acknowledgment.

 

6.15    Compliance with Terms of Leaseholds. Make all payments and otherwise perform all obligations in respect of all leases of real property to which the Borrower or any of its Subsidiaries is a party, keep such leases in full force and effect and not allow such leases to lapse or be terminated or any rights to renew such leases to be forfeited or cancelled, notify the Administrative Agent of any default by any party with respect to such leases and cooperate with the Administrative Agent in all respects to cure any such default, and cause each of its Subsidiaries to do so, except, in any case, where the failure to do so, either individually or in the aggregate, could not be reasonably likely to have a Material Adverse Effect.

 

6.16    Material Contracts. Perform and observe all the terms and provisions of each Material Contract to be performed or observed by it, maintain each such Material Contract in full force and effect, enforce each such Material Contract in accordance with its terms, take all such action to such end as may be from time to time requested by the Administrative Agent and, upon request of the Administrative Agent, make to each other party to each such Material Contract such demands and requests for information and reports or for action as any Loan Party or any of its Subsidiaries is entitled to make under such Material Contract, and cause each of its Subsidiaries to do so, except, in any case, where the failure to do so, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

6.17    Most Favored Covenant Status. If the Borrower or any of its Subsidiaries at any time after the Closing Date enters into or modifies any Material Indebtedness Agreement, such that such Material Indebtedness Agreement includes affirmative or negative covenants (or any events of default or other type of restriction that would have the practical effect of any affirmative or negative business or financial covenant, including, without limitation, any “put” or mandatory prepayment of such Indebtedness upon the occurrence of a “change of control”) that are applicable to the Borrower or any of its Subsidiaries, other than those set forth herein or in any of the other Loan Documents, promptly so notify the Administrative Agent and the Lenders and, if the Administrative Agent shall so request by written notice to the Borrower (after a determination has been made by the Required Lenders that such Material Indebtedness Agreement contains any such provisions that either individually or in the aggregate are more favorable to the holders of such Indebtedness than any of the provisions set forth herein), the Borrower, the Administrative Agent and the Lenders shall promptly amend this Agreement to incorporate some or all of such provisions, in the discretion of the Administrative Agent and the Required Lenders, into this Agreement and, to the extent necessary and reasonably desirable to the Administrative Agent and the Required Lenders, into any of the other Loan Documents, all at the election of the Administrative Agent and the Required Lenders.

 

 

6.18    Senior Debt. Ensure that the Obligations shall, at all times, rank at least pari passu in right of payment (to the fullest extent permitted by law) with all other senior Indebtedness of the Borrower and each of its Subsidiaries.

 

ARTICLE VII
NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied the Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly:

 

7.01  Liens. Either (x) create, incur, assume or suffer to exist any Lien upon any of its property, assets, revenues or rights to receive revenues, whether now owned or hereafter acquired, or (y) sign or file or suffer to exist under the UCC of any jurisdiction a financing statement that names the Borrower or any of its Subsidiaries as debtor, and any Person other than the Administrative Agent, as a secured party, nor grant a security interest in any of their property, assets, revenues or rights to receive revenues, in favor of any Person other than the Administrative Agent, other than the following:

 

(a)    Liens existing on the date hereof and listed on Schedule 5.08(b) and any renewals or extensions thereof; provided that (i) the property covered thereby is not changed, (ii) the amount secured or benefited thereby is not increased, (iii) the direct or any contingent obligor with respect thereto is not changed, and (iv) any renewal or extension of the obligations secured or benefited thereby is permitted by Section 7.02(g);

 

(b)    Liens for taxes not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

 

(c)    carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 30 days or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person;

 

(d)    pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA;

 

(e)    deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

 

(f)    easements, rights-of-way, restrictions and other similar encumbrances affecting real property which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

 

 

(g)    Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h);

 

(h)    Security interests on fixed or capital assets acquired, constructed or improved by the Borrower or any Subsidiary; provided that (i) such security interests secure Indebtedness permitted by Section 7.02(c), (ii) such security interests and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets, (iv) such security interest shall not apply to any other property or assets of the Borrower or any Subsidiary and (v) the amount of Indebtedness permitted to be secured hereunder shall not exceed $15,000,000, in the aggregate, at any time outstanding;

 

(i)    any Lien granted to the Administrative Agent, for the benefit of the Lenders, securing any of the Obligations or any other Indebtedness of the Borrower or any Subsidiary under the Loan Documents or any Indebtedness under any Swap Contract to which the Borrower or any of its Subsidiaries is a party and as to which a Lender or any of its Affiliates is a counterparty; and

 

(j)    without duplication of any other provision contained in this Section 7.01, other Liens not to exceed five percent (5%) of Consolidated Tangible Assets in the aggregate at any time outstanding.

 

7.02  Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

 

(a)    Indebtedness under the Loan Documents;

 

(b)    Indebtedness outstanding on the date hereof and listed on Schedule 7.02 and any refinancings, refundings, renewals or extensions thereof; provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and the direct or any contingent obligor with respect thereto is not changed, as a result of or in connection with such refinancing, refunding, renewal or extension;

 

(c)    Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (A) such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement and (B) the aggregate principal amount of Indebtedness permitted by this subsection (c) shall not, without duplication, exceed $15,000,000 at any time outstanding;

 

 

(d)    Indebtedness of one or more Unrestricted Subsidiaries not exceeding $40,000,000, in the aggregate, at any time outstanding (which shall be in addition to the Indebtedness permitted pursuant to Section 7.02(j) below);

 

(e)    Indebtedness of the Borrower to any Guarantor and of any Guarantor to the Borrower or any other Guarantor;

 

(f)    Guarantees by the Borrower of Indebtedness of any Guarantor and by any Guarantor of Indebtedness of the Borrower or any other Guarantor; provided that such Indebtedness is otherwise permitted by this Section 7.02;

 

(g)    other unsecured Indebtedness of the Borrower and its Subsidiaries; provided that no Default or Event of Default has occurred and is continuing at the time of the incurrence of such Indebtedness and no Default or Event of Default would occur after giving effect to such incurrence and so long as, on a pro forma basis, the Consolidated Leverage Ratio is less than the Consolidated Leverage Ratio required in Section 7.11(a) (which, if calculated on the Closing Date would be 3.50:1.00) after giving effect to such incurrence;

 

(h)    Indebtedness of the Borrower and its Subsidiaries under Swap Contracts; provided that such Swap Contracts were entered into in the ordinary course of business and not for speculative purposes;

 

(i)    Indebtedness incurred in connection with the financing of industrial revenue bonds (“IRB”) or industrial development bonds (“IDB”) including any letters of credit issued in connection with such IRBs or IDBs; provided such Indebtedness does not exceed $15,000,000 in the aggregate at any time;

 

(j)    unsecured Indebtedness of the Foreign Subsidiaries in an aggregate amount of up to $30,000,000 at the time of incurrence; provided that to the extent the holders of such Indebtedness require a guaranty from the Borrower, the Foreign Subsidiary shall provide to the Administrative Agent, at the Administrative Agent’s option, either (A) an upstream Guaranty of the Obligations in favor of the Administrative Agent or (B) the pledge of sixty-six percent (66%) of the Equity Interests in such Foreign Subsidiary to the Administrative Agent;

 

(k)    Indebtedness under the Existing Credit Facility; and

 

(l)    without duplication of any other provision contained in this Section 7.02, other Indebtedness not to exceed five percent (5%) of Consolidated Tangible Assets in the aggregate at any time outstanding.

 

7.03  Investments. Make or hold any Investments, except:

 

(a)    Investments held by the Borrower and its Subsidiaries in the form of Cash Equivalents;

 

(b)    additional Investments by the Borrower and its Subsidiaries in Loan Parties;

 

(c)    Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

 

 

(d)    Guarantees permitted by Section 7.02;

 

(e)    Investments existing on the date hereof (other than those referred to in Section 7.03(b)(i)) and set forth on Schedule 5.08(e);

 

(f)    loans and advances to employees of the Borrower or any Subsidiary for business‑related travel expenses, moving expenses, costs of replacement homes, business machines or supplies, automobiles and other similar expenses, in each case incurred in the ordinary course of business, such loans or advances shall not exceed $1,000,000 in the aggregate at any time outstanding;

 

(g)    if at the time thereof and immediately after giving effect thereto no Default or Event of Default shall have occurred and be continuing, investments in Unrestricted Subsidiaries; provided that the aggregate amount of all such investments in Unrestricted Subsidiaries made after the Closing Date shall not exceed $5,000,000 which amount is in addition to that permitted in a Permitted Foreign Acquisition;

 

(h)    the Subject 2024 Acquisitions;

 

(i)    Permitted Acquisitions;

 

(j)    Permitted Foreign Acquisitions;

 

(k)    Investments constituting loans permitted under Section 7.02(e); and

 

(l)    without duplication of any other provision contained in this Section 7.03, other Investments not provided for in any other clause of this Section 7.03 not to exceed five percent (5%) of Consolidated Tangible Assets in the aggregate at any time outstanding; provided that this clause (k) is not available for Permitted Foreign Acquisitions.

 

7.04  Fundamental Changes. Merge, dissolve, liquidate, divide, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default or Event of Default exists or would result therefrom:

 

(a)    any wholly-owned Subsidiary may merge into the Borrower in a transaction in which the Borrower is the surviving entity, and any wholly-owned Subsidiary may merge into any Subsidiary Guarantor in a transaction in which such Subsidiary Guarantor is the surviving entity;

 

(b)    any Subsidiary may sell, transfer, lease or otherwise dispose of all or substantially all of its assets to the Borrower or to any Guarantor; and

 

(c)    any Subsidiary may divide itself into two or more Persons, provided that in any such division of a Guarantor, each surviving or resulting Person shall be a Guarantor and shall remain jointly and severally liable for all Obligations.

 

 

7.05  Dispositions. Make any Disposition or enter into any agreement to make any Disposition, except:

 

(a)    Dispositions of obsolete, worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

 

(b)    Dispositions of inventory in the ordinary course of business;

 

(c)    Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;

 

(d)    Dispositions of property by any Subsidiary to the Borrower or to a wholly‑owned Subsidiary; provided that if the transferor of such property is a Guarantor, the transferee thereof must either be the Borrower or a Guarantor;

 

(e)    non-exclusive licenses of IP Rights in the ordinary course of business and substantially consistent with past practice for terms not exceeding five years; and

 

(f)    without duplication of any other provision contained in this Section 7.05, so long as no Default or Event of Default has occurred and is continuing or would be caused thereby, on a pro forma basis, after giving effect thereto, at the time of any such Dispositions, other Dispositions up to (i) in any year, an amount equal to ten percent (10%) of the value of the Borrower’s Consolidated Tangible Assets (determined at the time of making such Disposition with reference to the Consolidated Tangible Assets as of the end of the most recent completed fiscal year for which financial statements have been delivered pursuant to Section 6.01(a)), and (ii) during the term hereof, an aggregate amount equal to twenty‑five percent (25%) of the value of the Borrower’s Consolidated Tangible Assets (determined at the time of making such Disposition with reference to the Consolidated Tangible Assets as of the end of the most recent completed fiscal year for which financial statements have been delivered pursuant to Section 6.01(a)).

 

7.06  Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, or accept any capital contributions, except that, so long as no Default shall have occurred and be continuing at the time of any action described below or would result therefrom:

 

(a)    each Subsidiary may make Restricted Payments to the Borrower, any Subsidiaries of the Borrower that are Guarantors and any other Person that owns a direct Equity Interest in such Subsidiary, ratably according to their respective holdings of the type of Equity Interest in respect of which such Restricted Payment is being made;

 

(b)    the Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Person;

 

 

(c)    the Borrower may declare or pay cash dividends to its stockholders or purchase, redeem or otherwise acquire its common Equity Interests or as a dividend, return of capital or other distribution in respect of any of the Borrower’s or a Subsidiary’s Equity Interests; provided that no Default or Event of Default has occurred and is continuing at the time of any dividend repurchase, redemption or other acquisition, such return of capital or other such distribution, and no Default or Event of Default would occur after giving effect thereto, and so long as, on a pro forma basis, the Consolidated Leverage Ratio is less than or equal to the Consolidated Leverage Ratio required in Section 7.11(a) (if calculated on the Closing Date, this would be up to 3.50:1.00) after giving effect to such cash dividend or such purchase, redemption or other acquisition, return of capital or other such distribution; and

 

(d)    so long as no Default or Event of Default shall have occurred and be continuing or any Subsidiary may make payments of Indebtedness subordinated to the Obligations to the extent permitted by the terms of a written subordination agreement, provided such subordinated Indebtedness is subject to such written subordination agreement, entered into with the Administrative Agent in form and substance satisfactory to the Administrative Agent.

 

7.07    Change in Nature of Business. Engage in any material line of business substantially different from those lines of business conducted by the Borrower and its Subsidiaries on the date hereof or any business substantially related or incidental thereto.

 

7.08    Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Borrower or such Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate.

 

7.09    Burdensome Agreements. Enter into or permit to exist any Contractual Obligation (other than this Agreement or any other Loan Document) that limits the ability (a) of any Subsidiary to make Restricted Payments to the Borrower or any Guarantor or to otherwise transfer property to or invest in the Borrower or any Guarantor or (b) of any Subsidiary to Guarantee the Indebtedness of the Borrower.

 

7.10    Use of Proceeds. Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.

 

7.11    Financial Covenants.

 

(a)     Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as of the last day of any fiscal quarter of the Borrower to be greater than (i) 3.50:1.00 or (ii) upon the occurrence of a Material Permitted Acquisition, at the Borrower’s option and upon written notice to the Administrative Agent within five (5) days after the occurrence of such Material Permitted Acquisition, 4.00:1.00 for four (4) consecutive fiscal quarters commencing with the first full fiscal quarter after such Material Permitted Acquisition occurs; provided that this step-up with respect to a Material Permitted Acquisition may not be exercised more than two (2) times; and

 

(b)     Consolidated Interest Coverage Ratio. Permit the Consolidated Interest Coverage Ratio as of the end of any fiscal quarter of the Borrower to be less than 2.75x:1.00.

 

 

7.12    Amendments of Organization Documents. Amend any of its Organization Documents which would be materially adverse to the Lenders.

 

7.13    Accounting Changes. Make any change in (a) accounting policies or reporting practices, except as required by GAAP, or (b) their fiscal year.

 

7.14    Prepayments, Etc. of Indebtedness. Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner, or make any payment in violation of any subordination terms of, any Indebtedness, except (a) the prepayment of the Credit Extensions in accordance with the terms of this Agreement and (b) refinancings and refundings of such Indebtedness in compliance with Section 7.02(g).

 

7.15    Amendment, Etc. Amend, modify or change in any manner any term or condition of any Material Indebtedness or Material Indebtedness to the extent such amendment, modification or change would be adverse to the Administrative Agent or any Lender.

 

7.16    Disqualified Equity Interest. Issue any Disqualified Equity Interests.

 

7.17    Anti-Terrorism Laws. Neither the Borrower nor any of its Subsidiaries shall be in violation of any law or regulation, or identified in any list of any government agency (including, without limitation, the U.S. Office of Foreign Asset Control list, Executive Order No. 13224 or the USA Patriot Act or is the subject of Sanctions), in each ease, that prohibits or limits the conduct of business with or the receiving of funds, goods or services to or for the benefit of certain Persons specified therein or that prohibits or limits any Lender from making any advance or extension of credit to the Borrower or from otherwise conducting business with the Borrower or in any other manner that would result in a violation by any Person (including any Person participating in the transaction in any capacity) of Sanctions Laws.

 

7.18    Anti-Social Forces. (a) Become a member of an Anti-Social Group, (b) have any Anti-Social Relationship or (c) engage in any Anti-Social Conduct, whether directly or indirectly through a third party.

 

ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES

 

8.01   Events of Default. Any of the following shall constitute an Event of Default:

 

(a)    Non-Payment. Borrower or any other Loan Party fails to (i) pay when and as required to be paid herein, any amount of principal of any Loan, or (ii) pay within three days after the same becomes due, any interest on any Loan, or any fee due hereunder, or (iii) pay within five days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or

 

(b)    Specific Covenants. The Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05, 6.07, 6.10, 6.11, 6.12, 6.15, 6.18 or Article VII; or

 

 

(c)    Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 8.01(a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 days; or

 

(d)    Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading when made or deemed made; or

 

(e)    Cross-Default. (i) Any Loan Party or any Subsidiary thereof (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or Guarantee or contained in any Material Indebtedness Agreement, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which a Loan Party or any Subsidiary thereof is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which a Loan Party or any Subsidiary thereof is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by such Loan Party or such Subsidiary as a result thereof is greater than the Threshold Amount; or

 

(f)    Insolvency Proceedings, Etc. Any Loan Party or any Subsidiary thereof institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or

 

(g)    Inability to Pay Debts; Attachment. (i) Any Loan Party or any Subsidiary thereof becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy; or

 

 

(h)    Judgments. There is entered against any Loan Party or any Subsidiary thereof (i) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer is rated at least “A” by A.M. Best Company, has been notified of the potential claim and does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 10 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

 

(i)    ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

 

(j)    Invalidity of Loan Documents. Any provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party or any other Person contests in any manner the validity or enforceability of any provision of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any provision of any Loan Document, or purports to revoke, terminate or rescind any provision of any Loan Document; or

 

(k)    Change of Control. There occurs any Change of Control.

 

8.02  Remedies upon Event of Default. If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

 

(a)    declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; and

 

(b)    exercise on behalf of itself, the Lenders all rights and remedies available to it and the Lenders under the Loan Documents;

 

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable without further act of the Administrative Agent or any Lender.

 

8.03   Application of Funds. After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:

 

 

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III), payable to the Administrative Agent in its capacity as such;

 

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including fees, charges and disbursements of counsel to the respective Lenders arising under the Loan Documents and amounts payable under Article III, ratably among them in proportion to the respective amounts described in this clause Second payable to them;

 

Third, to payment of that portion of the Obligations constituting unpaid principal of the Loans and Obligations then owing under Swap Contracts and Bank Product Agreements, ratably among the Lenders, the Hedge Banks and the Cash Management Banks in proportion to the respective amounts described in this clause Third held by them;

 

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.

 

ARTICLE IX
ADMINISTRATIVE AGENT

 

9.01    Appointment and Authority.  Each of the Lenders hereby irrevocably appoints Citizens to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent and the Lenders, and neither the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions. The term “Administrative Agent” is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

 

(a)      The Administrative Agent may appoint any co-agents, sub-agents and attorneys‑in‑fact for purposes of exercising any rights and remedies hereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Article IX and Article XI (including Section 11.04(c)) as if set forth in full herein with respect thereto.

 

9.02    Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

 

 

9.03  Exculpatory Provisions. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:

 

(a)    shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

(b)    shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and

 

(c)    shall, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

 

(d)    The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall not be deemed to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower or a Lender.

 

(e)    The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

9.04    Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

 

9.05    Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

 

9.06    Resignation of Administrative Agent. The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 11.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

 

 

If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (e) of the definition of Defaulting Lender, the Required Lenders may, to the extent permitted by applicable laws, by notice in writing to the Borrower and such Person, remove such Person as Administrative Agent and, in consultation with the Borrower, appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States; provided that, without the consent of the Borrower (not to be unreasonably withheld), the Required Lenders shall not be permitted to select a successor that is not a U.S. financial institution described in Treasury Regulation Section 1.1441-1(b)(2)(ii) or a U.S. branch of a foreign bank described in Treasury Regulation Section 1.1441-1(b)(2)(iv)(A). If no such successor shall have been appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with notice on the Removal Effective Date.

 

9.07    Non-Reliance on Administrative Agent and Other Lenders. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Credit Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder. Each Lender represents and warrants that (i) the Loan Documents set forth the terms of a commercial lending facility and (ii) it is engaged in making, acquiring or holding commercial loans in the ordinary course and is entering into this Credit Agreement as a Lender for the purpose of making, acquiring or holding commercial loans set forth herein as may be applicable to such Lender, and not for the purpose of purchasing, acquiring or holding any other type of financial instrument, and each Lender agrees not to assert a claim in contravention of the foregoing. Each Lender represents and warrants that it is sophisticated with respect to decisions to make, acquire or hold commercial loans, as may be applicable to such Lender, and either it, or the Person exercising discretion in making its decision to make, acquire or hold such commercial loans, is experienced in making, acquiring or holding such commercial loans.

 

9.08    No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Bookrunners or Arrangers listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent or a Lender hereunder.

 

9.09    Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise

 

(a)      to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.03(i) and (j), 2.09 and 11.04) allowed in such judicial proceeding; and

 

 

(b)    to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 11.04.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender to authorize the Administrative Agent to vote in respect of the claim of any Lender or in any such proceeding.

 

9.10    Erroneous Payments.

 

(a)    If Administrative Agent (x) notifies a Lender or any Person who has received funds on behalf of a Lender (any such or other recipient (and each of their respective successors and assigns), a “Payment Recipient”) that Administrative Agent has determined in its sole discretion (whether or not after receipt of any notice under Section 9.10(b)) that any funds (as set forth in such notice from the Administrative Agent) received by such Payment Recipient from Administrative Agent or any of its Affiliates were erroneously or mistakenly transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to such Lender or other Payment Recipient on its behalf) (any such funds, whether transmitted or received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise, individually and collectively, an “Erroneous Payment”) and (y) demands the return of such Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain the property of Administrative Agent pending its return or repayment as contemplated below in this Section 9.10 and held in trust for the benefit of Administrative Agent, and such Lender shall (or, with respect to any Payment Recipient who received such funds on its behalf, shall cause such Payment Recipient to) promptly, but in no event later than two Business Days thereafter (or such later date as the Administrative Agent may, in its sole discretion, specify in writing), return to Administrative Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made, in same day funds (in the currency so received), together with interest thereon (except to the extent waived in writing by the Administrative Agent) in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received by such Payment Recipient to the date such amount is repaid to Administrative Agent in same day funds at the greater of the Federal Funds Rate and a rate determined by Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect. A notice of Administrative Agent to any Payment Recipient under this Section 9.10(a) shall be conclusive, absent manifest error.

 

 

(b)    Without limiting the provisions of Section 9.10(a), each Payment Recipient (and each of their respective successors and assigns) hereby further agrees that if it receives a payment, prepayment or repayment (whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise) from Administrative Agent (or any of its Affiliates) (x) that is in a different amount than, or on a different date from, that specified in this Credit Agreement or in a notice of payment, prepayment or repayment sent by Administrative Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, (y) that was not preceded or accompanied by a notice of payment, prepayment or repayment sent by Administrative Agent (or any of its Affiliates), or (z) that such Payment Recipient otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part), in each case:

 

(i)    it acknowledges and agrees that (A) in the case of immediately preceding clauses (x) or (y), an error shall be presumed to have been made (absent written confirmation from Administrative Agent to the contrary) or (B) in the case of immediately preceding clause (z), an error and mistake has been made, in each case, with respect to such payment, prepayment or repayment; and

 

(ii)    such Lender shall (and shall cause any other recipient that receives funds on its respective behalf to) promptly (and, in all events, within one Business Day of its knowledge of the occurrence of any of the circumstances described in immediately preceding clauses (x), (y) and (z)) notify Administrative Agent of its receipt of such payment, prepayment or repayment, the details thereof (in reasonable detail) and that it is so notifying Administrative Agent pursuant to this Section 9.10(b). For the avoidance of doubt, the failure to deliver a notice to the Administrative Agent pursuant to this Section 9.10(b) shall not have any effect on a Payment Recipient’s obligations pursuant to Section 9.10(a) or on whether or not an Erroneous Payment has been made.

 

(c)    Each Lender hereby authorizes Administrative Agent to set off, net and apply any and all amounts at any time owing to such Lender under any Loan Document, or otherwise payable or distributable by Administrative Agent to such Lender under any Loan Document with respect to any payment of principal, interest, fees, or other amounts, against any amount that Administrative Agent has demanded to be returned under Section 9.10(a).

 

(d)     In the event that an Erroneous Payment (or portion thereof) is not recovered by Administrative Agent for any reason, after demand therefor in accordance with Section 9.10(a), from any Lender that has received such Erroneous Payment (or portion thereof) (and/or from any Payment Recipient who received such Erroneous Payment (or portion thereof) on its respective behalf) (such unrecovered amount, an “Erroneous Payment Return Deficiency”), upon Administrative Agent’s notice to such Lender at any time, then effective immediately (with the consideration therefor being acknowledged by the parties hereto), (A) such Lender shall be deemed to have assigned its Loans (but not its Commitments) of the relevant Class with respect to which such Erroneous Payment was made (the “Erroneous Payment Impacted Class”) in an amount equal to the Erroneous Payment Return Deficiency (or such lesser amount as Administrative Agent may specify) (such assignment of the Loans (but not Commitments) of the Erroneous Payment Impacted Class, the “Erroneous Payment Deficiency Assignment”) (on a cashless basis and such amount calculated at par plus any accrued and unpaid interest (with the assignment fee to be waived by Administrative Agent in such instance), and is hereby (together with the Borrower) deemed to execute and deliver an Assignment and Assumption with respect to such Erroneous Payment Deficiency Assignment, and such Lender shall deliver any Notes evidencing such Loans to the Borrower or Administrative Agent (but the failure of such Person to deliver any such Notes shall not affect the effectiveness of the foregoing assignment), (B) Administrative Agent as the assignee Lender shall be deemed to have acquired the Erroneous Payment Deficiency Assignment, (C) upon such deemed acquisition, Administrative Agent as the assignee Lender shall become a Lender hereunder with respect to such Erroneous Payment Deficiency Assignment and the assigning Lender shall cease to be a Lender hereunder with respect to such Erroneous Payment Deficiency Assignment, excluding, for the avoidance of doubt, its obligations under the indemnification provisions of this Credit Agreement and its applicable Commitments which shall survive as to such assigning Lender, (D) Administrative Agent and the Borrower shall be deemed to have waived any consents required under this Credit Agreement to any such Erroneous Payment Deficiency Assignment, and (E) Administrative Agent may reflect in the Register its ownership interest in the Loans subject to the Erroneous Payment Deficiency Assignment. For the avoidance of doubt, no Erroneous Payment Deficiency Assignment will reduce the Commitments of any Lender and such Commitments shall remain available in accordance with the terms of this Credit Agreement.

 

 

  (i)    Administrative Agent may, in its discretion, sell any Loans acquired pursuant to an Erroneous Payment Deficiency Assignment and upon receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency owing by the applicable Lender shall be reduced by the net proceeds of the sale of such Loan (or portion thereof), and Administrative Agent shall retain all other rights, remedies and claims against such Lender (and/or against any recipient that receives funds on its respective behalf). In addition, an Erroneous Payment Return Deficiency owing by the applicable Lender (x) shall be reduced by the proceeds of prepayments or repayments of principal and interest or other distribution in respect of principal and interest, received by Administrative Agent on or with respect to any such Loans acquired from such Lender pursuant to an Erroneous Payment Deficiency Assignment (to the extent that any such Loans are then owned by Administrative Agent) and (y) may in the sole discretion of Administrative Agent be reduced by any amount specified by Administrative Agent in writing to the applicable Lender from time to time.

 

(e)    The parties hereto agree irrespective of whether Administrative Agent may be equitably subrogated, in the event that an Erroneous Payment (or portion thereof) is not recovered from any Payment Recipient that has received such Erroneous Payment (or portion thereof) for any reason, Administrative Agent shall be subrogated to all the rights and interests of such Payment Recipient (and, in the case of any Payment Recipient who has received funds on behalf of a Lender, to the rights and interests of such Lender, as the case may be) under the Loan Documents with respect to such amount (the “Erroneous Payment Subrogation Rights”) provided that this Section 9.10 shall not be interpreted to increase (or accelerate the due date for) the Obligations of the Borrower relative to the amount (and/or timing for payment) of the Obligations that would have been payable had such Erroneous Payment not been made by Administrative Agent; provided, further, that for the avoidance of doubt, immediately preceding clause shall not apply to the extent any such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by Administrative Agent from the Borrower for the purpose of making such Erroneous Payment.

 

(f)    To the extent permitted by applicable law, no Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by Administrative Agent for the return of any Erroneous Payment received, including without limitation any defense based on “discharge for value” or any similar doctrine.

 

 

(g)    Each party’s obligations, agreements and waivers under this Section 9.10 shall survive the resignation or replacement of Administrative Agent, any transfer of rights or obligations by, or the replacement of, a Lender and/or the termination of the Commitments.

 

ARTICLE X
RESERVED

 

ARTICLE XI
MISCELLANEOUS

 

11.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

 

(a)    waive any condition set forth in Article IV (other than Section (b)(i) or (c)), without the written consent of each Lender;

 

(b)    extend or increase the Commitment of any Lender without the written consent of such Lender;

 

(c)    postpone any date fixed by this Agreement or any other Loan Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under such other Loan Document without the written consent of each Lender entitled to such payment;

 

(d)    reduce the principal of, or the rate of interest specified herein on, any Loan, or (subject to the second proviso to this Section 11.01) any fees or other amounts payable hereunder or under any other Loan Document, or change the manner of computation of any financial ratio (including any change in any applicable defined term) used in determining the Applicable Margin that would result in a reduction of any interest rate on any Loan or any fee payable hereunder without the written consent of each Lender entitled to such amount provided, however, that only the consent of the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or to reduce any fee payable hereunder;

 

(e)    change (i) Section 2.13 or Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender or (ii) the order of any prepayment of Term Loans from the application thereof set forth in the applicable provisions of Section 2.05(b) or 2.06(b), respectively, in any manner that materially and adversely affects the Lenders without the prior written consent of the Required Lenders;

 

 

(f)    change (i) any provision of this Section 11.01 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder (other than the definitions specified in clause (ii) of this Section 11.01(f)), without the written consent of each Lender or (ii) the definition of “Required Lenders,” without the written consent of each Lender;

 

(g)    release all or substantially all of the value of the Guaranty, without the written consent of each Lender;

 

(h)    impose any greater restriction on the ability of any Lender to assign any of its rights or obligations hereunder without the written consent of the Required Lenders; or

 

(i)    without the prior written consent of each Lender directly affected thereby, (i) subordinate, or have the effect of subordinating, the Obligations hereunder to any other Indebtedness or other obligation or (ii) subordinate, or have the effect of subordinating, the Obligations to Liens securing any other Indebtedness or other obligation;

 

and provided, further, that no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender.

 

If any Lender does not consent to a proposed amendment, waiver, consent or release with respect to any Loan Document that requires the consent of each Lender and that has been approved by the Required Lenders, the Borrower may replace such non-consenting Lender in accordance with Section 11.13; provided that such amendment, waiver, consent or release can be effected as a result of the assignment contemplated by such Section (together with all other such assignments required by the Borrower to be made pursuant to this paragraph).

 

11.02    Notices; Effectiveness; Electronic Communications.  Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

 

(i)    if to the Borrower or the Administrative Agent, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 11.02; and

 

(ii)    if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its signature page to this Agreement.

 

 

Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below shall be effective as provided in such subsection (b).

 

(b)    Electronic Communications. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement); provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

 

(c)    The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to any Borrower, any Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to any Borrower, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

 

 

(d)    Change of Address, Etc. Each of the Borrower and the Administrative Agent may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Borrower and the Administrative Agent. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law, including United States Federal and state securities Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform and that may contain material non‑public information with respect to the Borrower or their securities for purposes of United States Federal or state securities laws.

 

(e)    Reliance by Administrative Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices purportedly given by or on behalf of any Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify the Administrative Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of any Borrower. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent and each of the parties hereto hereby consents to such recording.

 

11.03    No Waiver; Cumulative Remedies; Enforcement. No failure by any Lender, or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) any Lender from exercising setoff rights in accordance with Section 11.08 (subject to the terms of Section 2.13), or (c) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.13, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

 

 

11.04    Expenses; Indemnity; Damage Waiver.  Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent, and its respective Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), and (ii) all out-of-pocket expenses incurred by the Administrative Agent, or any Lender (including the fees, charges and disbursements of any counsel for the Administrative Agent or any Lender) in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with Loans made or hereunder, including all such out‑of‑pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.

 

(a)       Indemnification by the Borrower. The Borrower shall, jointly and severally, indemnify the Administrative Agent (and any sub-agent thereof), each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or the other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee for breach of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

 

 

(b)      Reimbursement by Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d).

 

(c)      Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, the Borrower shall not assert, and the Borrower hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

 

(d)      Payments. All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.

 

(e)      Survival. The agreements in this Section shall survive the resignation of the Administrative Agent the replacement of any Lender and the repayment, satisfaction or discharge of all the other Obligations.

 

11.05  Payments Set Aside. To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent, upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

 

 

11.06    Successors and Assigns.  Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Borrower nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 11.06(b), (ii) by way of participation in accordance with the provisions of Section 11.06(d) or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 11.06(f) (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(a)         Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement at the time owing to it); provided that any such assignment shall be subject to the following conditions:

 

(i)    Minimum Amounts.

 

 (A)    in the case of an assignment of the entire remaining amount of the assigning Lender’s Loans at the time owing to it thereunder or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

 

 (B)    in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000, in the case of any assignment in respect of the Term Loan Facility, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;

 

(ii)    Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans assigned, except that this clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among separate Facilities on a non-pro rata basis;

 

 

(iii)    Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:

 

  (A)    the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof; and

 

  (B)    the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments if such assignment is to a Person that is not a Lender with a Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender.

 

(iv)    Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment.

 

(v)    No Assignment to Borrower. No such assignment shall be made to the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

 

(vi)    No Assignment to Natural Persons. No such assignment shall be made to a natural person (or a holding company, investment vehicle or trust for, or owned or operated by or for the primary benefit of a natural person).

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.05, 3.06 and 11.04 with respect to facts and circumstances occurring prior to the effective date of such assignment. Upon request, the Borrower (at their expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 11.06(d).

 

(b)    Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

 

(c)    Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 11.01 that affects such Participant. Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.03 and 3.04 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.06(b). To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.08 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.11 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register).

 

(d)    Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Sections 3.01, 3.03, or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.01(e) as though it were a Lender.

 

 

(e)    Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

11.07    Treatment of Certain Information; Confidentiality. Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below) and to use such Information only in connection with this Agreement, except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, trustees, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self‑regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or any Eligible Assignee invited to be a Lender pursuant to Section 3.05 or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Lender, or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower.

 

For purposes of this Section, “Information” means all information received from any Loan Party or any Subsidiary thereof relating to any Loan Party or any Subsidiary thereof or their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by any Loan Party or any Subsidiary thereof; provided that, in the case of information received from a Loan Party or any such Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

Each of the Administrative Agent and the Lenders acknowledges that (a) the Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including United States Federal and state securities Laws.

 

 

The Loan Parties hereby authorize Administrative Agent to publish the name and logo of any Loan Party and the amount and transaction details of the credit facility provided hereunder in any “tombstone” or comparable advertisement or other marketing materials which Administrative Agent elects to publish. The Borrower will have the opportunity to review, edit and approve the tombstone, advertisement and/or other marketing materials before publication (which approval shall not be unreasonably withheld).

 

The Loan Parties consent to the publication by the Administrative Agent or any Lender of customary advertising material relating to the transactions contemplated hereby using the name, product photographs, logo or trademark of the Loan Parties. In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the agents and the Lenders in connection with the administration of this Agreement, the other Loan Documents and the Commitments.

 

11.08    Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, after obtaining the prior written consent of the Administrative Agent, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or any such Affiliate to or for the credit or the account of the Borrower or any other Loan Party against any and all of the obligations of the Borrower or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower or such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each Lender and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender or their respective Affiliates may have. Each Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

11.09    Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

 

 

11.10    Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Article IV, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.

 

11.11    Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.

 

11.12    Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

11.13    Replacement of Lenders. If any Lender requests compensation under Section 3.05, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.03 or Section 3.04, or if any Lender is a Defaulting Lender or if any other circumstance exists hereunder that gives such Borrower the right to replace a Lender as a party hereto, then such Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.06), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:

 

(a)         such Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 11.06(b);

 

(b)         such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.03 or Section 3.04) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

 

 

(c)         in the case of any such assignment resulting from a claim for compensation under Section 3.03 or Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter; and

 

(d)         such assignment does not conflict with applicable Laws.

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

 

11.14     Defaulting Lenders.  Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

 

(i)    Waivers and Amendments. That Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 11.01.

 

(ii)    Reallocation of Payments. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise, and including any amounts made available to the Administrative Agent by that Defaulting Lender pursuant to Section 11.08), shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder; second, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third, if so determined by the Administrative Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of that Defaulting Lender to fund Loans under this Agreement; fourth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; fifth, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and sixth, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if such payment is a payment of the principal amount of any Loans in respect of which that Defaulting Lender has not fully funded its appropriate share, such payment shall be applied solely to pay the Loans of all non‑Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans owed to, that Defaulting Lender. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 11.14(a)(ii) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.

 

(iii)    Certain Fees. That Defaulting Lender shall not be entitled to receive any commitment fee pursuant to Section 2.09(a) for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

 

 

(b)      Defaulting Lender Cure. If the Borrower and the Administrative Agent agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans, to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 11.14(a)(iv)), whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

(c)      Nothing in this Section 11.14 shall limit the rights and remedies any party hereto shall have against any Defaulting Lender.

 

11.15  Governing Law; Jurisdiction; Etc.  GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

(a)     SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(b)    WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

 

(c)      SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW

 

11.16  Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

11.17  No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent and the Arranger, and the other Lead Arranger(s) and Lenders are arm’s‑length commercial transactions between the Borrower and their Affiliates, on the one hand, and the Administrative Agent, the Arranger and the other Lead Arranger(s) and the Lenders, on the other hand, (B) the Borrower have consulted their own legal, accounting, regulatory and tax advisors to the extent they have deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent, the Arranger and each other Lead Arranger and each Lender each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for any Borrower or any of its Affiliates, or any other Person and (B) neither the Administrative Agent, the Arranger nor any other Lead Arranger or Lender has any obligation to any Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, the Arranger and the other Lead Arranger(s) and Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and their Affiliates, and neither the Administrative Agent, the Arranger nor any other Lead Arranger or Lender has any obligation to disclose any of such interests to any Borrower or its Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against the Administrative Agent, the Arranger and the other Lead Arranger(s) and the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

 

11.18    Electronic Execution of Assignments and Certain Other Documents. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption or in any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

11.19    USA PATRIOT Act. Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107‑56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Loan Party in accordance with the Act. The Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” an anti‑money laundering rules and regulations, including the Act.

 

11.20    Time of the Essence. Time is of the essence of the Loan Documents.

 

11.21    ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

11.22    Acknowledgment and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

(a)         the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and

 

 

(b)         the effects of any Bail-in Action on any such liability, including, if applicable:

 

(i)    a reduction in full or in part or cancellation of any such liability;

 

(ii)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

 

(iii)    the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

 

11.23    Lender Representation.  Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that at least one of the following is and will be true:

 

(i)    such Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans or this Agreement,

 

(ii)    the transaction exemption set forth in one or more PTEs, such as PTE 84‑14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96‑23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans and this Agreement,

 

(iii)   (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub‑sections (b) through (g) of Part I of PTE 84‑14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans and this Agreement, or

 

(iv)   such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

 

 

(b)    In addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or (2) a Lender has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of any Borrower or any other Loan Party, that the Administrative Agent is not a fiduciary with respect to the assets of such Lender involved in such Lender’s entrance into, participation in, administration of and performance of the Loans and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related hereto or thereto).

 

11.24  Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Swap Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

 

(a)      In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.

 

(b)      As used in this Section 11.26, the following terms have the following meanings:

 

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

 

“Covered Entity” means any of the following:

 

(i)

a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

 

 

(ii)

a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

 

(iii)

a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

 

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

 

“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

 

[Signatures on following pages]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

STANDEX INTERNATIONAL CORPORATION, as the Borrower     By: /s/ Ademir Sarcevic Name: Ademir Sarcevic Title: Vice President, Chief Financial Officer

 

 

 

Signature Page – Standex Credit Agreement

 

CITIZENS BANK, N.A., as Administrative Agent, Lead Arranger, Lead Book Runner and as a Lender     By: /s/ Matthew Possanza Name: Matthew Possanza Title:   Vice President

 

Address:   130 N 18th Street, Suite 1310 Philadelphia, PA 19103 Attention:         Matthew Possanza, Vice President

 

 

 

Signature Page – Standex Credit Agreement

Exhibit 10.5

 

FIRST AMENDMENT

 

THIS FIRST AMENDMENT (this “Amendment”) is entered into as of October 28, 2024 by and among STANDEX INTERNATIONAL CORPORATION, a Delaware corporation (the “Borrower”), CITIZENS BANK, N.A., a national banking association, as Administrative Agent (the “Administrative Agent”) and Lender, and the other Lenders party hereto. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

 

R E C I T A L S

 

WHEREAS, Administrative Agent, Citizens Bank, N.A., as Multicurrency Administrative Agent, Bank of America, N.A., as Co‑Syndication Agent, Joint Lead Arranger and Joint Book Runner, TD Bank, N.A., as Co‑Syndication Agent, Joint Lead Arranger and Joint Book Runner, JPMorgan Chase Bank, N.A., as Co-Documentation Agent and Truist Bank, as Co Documentation Agent, Borrower, and the Lenders have previously entered into a Third Amended and Restated Credit Agreement dated as of February 2, 2023 (the “Credit Agreement”);

 

WHEREAS, Borrower has requested certain modifications to the Credit Agreement in connection with the Subject 2024 Acquisitions (as defined below), and Administrative Agent and the Lenders have agreed to such changes pursuant to the terms and conditions set forth herein;

 

NOW THEREFORE, in consideration of the foregoing premises and the mutual benefits to be derived by Borrower, the Administrative Agent, and Lenders from a continuing relationship under the Credit Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

A.        Amendments to Credit Agreement.

 

1.         The following defined terms appearing in Section 1.1 of the Credit Agreement are hereby amended and restated to read as follows:

 

“Applicable Margin” means the basis points per annum set forth below will be determined by reference to the Consolidated Leverage Ratio and each change in the Applicable Margin based upon any change in the Consolidated Leverage Ratio shall become effective on the third business day following the receipt by the Administrative Agent pursuant to Section 6.01(b), as the case may be, of the Compliance Certificate together with the financial statements attached thereto for the period most recently ended. Notwithstanding the foregoing provisions, during any period when (A) the Borrower has failed to deliver timely its consolidated financial statements referred to in Section 6.01(a) or Section 6.01(b) accompanied by a Compliance Certificate or (B) an Event of Default has occurred and is continuing the Applicable Margin shall be the highest on the grid below regardless of the Consolidated Leverage Ratio at such time. The grid below does not modify or waive, in any respect, the rights of the Administrative Agent and the Lenders to charge any default rate of interest or any of the other rights and remedies of the Administrative Agent and the Lenders hereunder:

 

Level	Debt/EBITDA	Undrawn (Commitment Fee) (bps)	SOFR Rate and Foreign Currency Loan Rate (bps)	Alternate Base Rate (bps)
I	≥ 3.25x	30.0	200.0	100.0
II	≥ 2.75x	27.5	175.0	75.0
III	≥ 2.25x	25.0	150.0	50.0
IV	≥ 1.75x	22.5	137.5	37.5
V	≥ 1.25x	20	125.0	25.0
VI	≥ 0.75x	17.5	112.5	12.5
VII	< 0.75x	15	100.0	0.0

 

 

Until the date on which the Administrative Agent receives a Compliance Certificate pursuant to Section 6.02(b) with respect to the fiscal period ending March 31, 2025, the Applicable Margin shall not be less than Level II, regardless of the actual Consolidated Leverage Ratio at or prior to such time.

 

“Consolidated EBIT” means, at any date of determination, an amount equal to Consolidated Net Income of the Borrower and its Subsidiaries on a consolidated basis for the most recently completed Measurement Period plus (a) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges, (ii) the provision for Federal, state, local and foreign income taxes payable, (iii) all non‑cash charges including, without limitation, goodwill write-offs and amortization of the inventory step-up and acquired backlog associated with accounting for Permitted Acquisitions, all determined in accordance with GAAP, (iv) an aggregate of up to the lesser of (A) 10% of Consolidated EBITDA (calculated prior to giving effect to this add-back) and (B) $20,000,000 (calculated on a trailing twelve-month basis) of cash restructuring and Permitted Acquisition related expenses to the extent actually paid during such Measurement Period (other than those incurred with respect to the Subject 2024 Acquisitions), (v) an add back of up to $10,500,000 in the aggregate in transaction expenses incurred and actually paid by the Borrower with respect to the Subject 2024 Acquisitions and the 2024 Acquisition Credit Facility, (vi) other non recurring expenses reducing such Consolidated Net Income which do not represent a cash item in such period or any future period (in each case of or by the Borrower and its Subsidiaries for such Measurement Period) and minus (b) the following to the extent included in calculating such Consolidated Net Income: (i) Federal, state, local and foreign income tax credits, (ii) all non-cash items increasing Consolidated Net Income (in each case of or by the Borrower and its Subsidiaries for such Measurement Period), (iii) extraordinary gains and extraordinary losses for such Measurement Period determined in accordance with GAAP, and (iv) gains and losses on Dispositions, provided, however, that Consolidated EBIT for any Measurement Period shall (x) include the EBIT for any Person or business unit that has been acquired by the Borrower or any of its Subsidiaries for any portion of such Measurement Period prior to the date of acquisition, so long as such EBIT has been verified by appropriate audited financial statements or other financial statements acceptable to the Administrative Agent, (y) exclude the EBIT for any Person or business unit that has been disposed of by the Borrower or any of its Subsidiaries, for the portion of such Measurement Period prior to the date of disposition, and (z) with respect to the portion of Consolidated EBIT attributable to a Subsidiary that is not wholly-owned, directly or indirectly, by Borrower, be multiplied by the average percentage of Equity Interests owned by the Borrower, directly or indirectly, in such Subsidiary over such Measurement Period.

 

 

“Material Permitted Acquisition” means a Permitted Acquisition with consideration greater than $75,000,000, including, without limitation, the Subject 2024 Acquisitions.

 

2.         The following new defined terms are hereby added to Section 1.1 of the Credit Agreement:

 

“2024 Acquisition Credit Facility” means the $250,000,000 term loan facility by and among Borrower, Administrative Agent and the lenders party thereto from time to time entered into on or about October 28, 2024.

 

“Amran Acquisition” means the purchase by the Borrower of the equity interests owned by Bolt Founders, Inc. in Amran, LLC, a Texas limited liability company, for an aggregate purchase price of $176,674,645.

 

“Narayan Acquisition” means the purchase by Mold Tech Singapore of all of the equity interests in Narayan Powertech Private Limited, a PLC organized under the laws of India, a PLC organized under the laws of India, for an aggregate purchase price of US$255,883,125.

 

“Subject 2024 Acquisitions” means, collectively, the Amran Acquisition and the Narayan Acquisition.

 

3.          Section 7.02 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

7.02       Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

 

(a)         Indebtedness under the Loan Documents;

 

(b)         Indebtedness outstanding on the date hereof and listed on Schedule 7.02 and any refinancings, refundings, renewals or extensions thereof; provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and the direct or any contingent obligor with respect thereto is not changed, as a result of or in connection with such refinancing, refunding, renewal or extension;

 

 

(c)         Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (A) such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement and (B) the aggregate principal amount of Indebtedness permitted by this subsection (c) shall not, without duplication, exceed $15,000,000 at any time outstanding;

 

(d)         Indebtedness of one or more Unrestricted Subsidiaries not exceeding $40,000,000, in the aggregate, at any time outstanding (which shall be in addition to the Indebtedness permitted pursuant to Section 7.02(j) below);

 

(e)         Indebtedness of the Borrower to any Guarantor and of any Guarantor to the Borrower or any other Guarantor;

 

(f)         Guarantees by the Borrower of Indebtedness of any Guarantor and by any Guarantor of Indebtedness of the Borrower or any other Guarantor; provided that such Indebtedness is otherwise permitted by this Section 7.02;

 

(g)         other unsecured Indebtedness of the Borrower and its Subsidiaries; provided that no Default or Event of Default has occurred and is continuing at the time of the incurrence of such Indebtedness and no Default or Event of Default would occur after giving effect to such incurrence and so long as, on a pro forma basis, the Consolidated Leverage Ratio is less than the Consolidated Leverage Ratio required in Section 7.11(a) (which, if calculated on the Closing Date would be 3.50:1.00) after giving effect to such incurrence;

 

(h)         Indebtedness of the Borrower and its Subsidiaries under Swap Contracts; provided that such Swap Contracts were entered into in the ordinary course of business and not for speculative purposes;

 

(i)         Indebtedness incurred in connection with the financing of industrial revenue bonds (“IRB”) or industrial development bonds (“IDB”) including any letters of credit issued in connection with such IRBs or IDBs; provided such Indebtedness does not exceed $15,000,000 in the aggregate at any time;

 

(j)         unsecured Indebtedness of the Foreign Subsidiaries in an aggregate amount of up to $30,000,000 at the time of incurrence; provided that to the extent the holders of such Indebtedness require a guaranty from the Borrower, the Foreign Subsidiary shall provide to the Administrative Agent, at the Administrative Agent’s option, either (A) an upstream Guaranty of the Obligations in favor of the Administrative Agent or (B) the pledge of sixty‑six percent (66%) of the Equity Interests in such Foreign Subsidiary to the Administrative Agent;

 

(k)         Indebtedness under the 2024 Acquisition Credit Facility; and

 

(l)         without duplication of any other provision contained in this Section 7.02, other Indebtedness not to exceed five percent (5%) of Consolidated Tangible Assets in the aggregate at any time outstanding.

 

 

4.            Section 7.03 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

7.03       Investments. Make or hold any Investments, except:

 

(a)         Investments held by the Borrower and its Subsidiaries in the form of Cash Equivalents;

 

(b)         additional Investments by the Borrower and its Subsidiaries in Loan Parties;

 

(c)         Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

 

(d)         Guarantees permitted by Section 7.02;

 

(e)         Investments existing on the date hereof (other than those referred to in Section 7.03(b)(i)) and set forth on Schedule 5.08(e);

 

(f)         loans and advances to employees of the Borrower or any Subsidiary for business related travel expenses, moving expenses, costs of replacement homes, business machines or supplies, automobiles and other similar expenses, in each case incurred in the ordinary course of business, such loans or advances shall not exceed $1,000,000 in the aggregate at any time outstanding;

 

(g)         if at the time thereof and immediately after giving effect thereto no Default or Event of Default shall have occurred and be continuing, investments in Unrestricted Subsidiaries; provided that the aggregate amount of all such investments in Unrestricted Subsidiaries made after the Closing Date shall not exceed $5,000,000 which amount is in addition to that permitted in a Permitted Foreign Acquisition;

 

(h)         the Subject 2024 Acquisitions;

 

(i)         Permitted Acquisitions;

 

(j)         Permitted Foreign Acquisitions;

 

(k)         Investments constituting loans permitted under Section 7.02(e); and

 

(l)         without duplication of any other provision contained in this Section 7.03, other Investments not provided for in any other clause of this Section 7.03 not to exceed five percent (5%) of Consolidated Tangible Assets in the aggregate at any time outstanding; provided that this clause (l) is not available for Permitted Foreign Acquisitions.

 

 

B.    Representations and Warranties. Borrower represents and warrants to Administrative Agent and the Lenders that: (a) Borrower has the full power and authority to execute, deliver and perform its obligations under the Credit Agreement, as amended by this Amendment, (b) the execution and delivery of this Amendment have been duly authorized by all necessary action on behalf of Borrower; and (c) the representations and warranties contained or referred to in Article V of the Credit Agreement are true and accurate in all material respects as of the date of this Amendment, unless such representations or warranties specifically refer to a prior date; and (d) no Default or Event of Default has occurred and is continuing or will result after giving effect to this Amendment and the transactions contemplated by this Amendment and the Credit Agreement.

 

C.    Other.

 

1.    This Amendment shall take effect as of the Effective Date upon the receipt by the Administrative Agent of:

 

(a)    this Amendment duly executed by the Borrower, the Administrative Agent, and Lender;

 

(b)    a Third Amended and Restated Guaranty, including Amran, Inc. (“Amran”) as a Guarantor, duly executed by all Guarantors;

 

(c)    evidence of the closing of the 2024 Acquisition Credit Facility;

 

(d)    all diligence reasonably requested by the Administrative Agent and/or the Lenders in connection with the Subject 2024 Acquisitions, including copies of all acquisition documents (and exhibits/schedules thereto) together with applicable budgets and projections;

 

(e)    evidence that all conditions precedent to the Subject 2024 Acquisitions shall have been completed other than the funding of the proceeds of the 2024 Acquisition Credit Facility and the Revolving Credit Borrowings;

 

(f)    evidence that, with respect to the Amran Acquisition: (a) board approval of Amran, Inc. has been received, (b) no continuing Default or Event of Default exists, (c) Borrower is in pro forma compliance with the financial covenants, (d) Administrative Agent has received confirmation that the assets acquired shall be owned exclusively by the Borrower or one of its Domestic Subsidiaries, and (e) the Amran Acquisition is consistent with Borrower’s corporate strategy and business plan; and

 

(g)    evidence that, with respect to the Narayan Acquisition: (a) the Subsidiary party to the acquisition is not a Domestic Subsidiary, (b) board approval of Narayan Powertech Private Limited has been received, (c) no continuing Default or Event of Default exists, (d) Borrower is in pro forma compliance with the financial covenants, and (e) the Narayan Acquisition is consistent with Borrower’s corporate strategy and business plan.

 

 

2.    This Amendment is executed as an instrument under seal and shall be governed by and construed in accordance with the laws of the State of New York without regard to its conflicts of law rules. All parts of the Credit Agreement not affected by this Amendment are hereby ratified and affirmed in all respects, provided that if any provision of the Credit Agreement shall conflict or be inconsistent with this Amendment, the terms of this Amendment shall supersede and prevail. Upon the execution of this Amendment, all references to the Credit Agreement in that document, or in any related document, shall mean the Credit Agreement as amended by this Amendment. Except as expressly provided in this Amendment, the execution and delivery of this Amendment does not and will not amend, modify or supplement any provision of, or constitute a consent to or a waiver of any noncompliance with the provisions of the Credit Agreement, and, except as specifically provided in this Amendment, the Credit Agreement shall remain in full force and effect. This Amendment may be executed in one or more counterparts with the same effect as if the signatures hereto and thereto were upon the same instrument.

 

 

[SIGNATURE PAGES FOLLOW]

 

 

IN WITNESS WHEREOF, each of Borrower, the Administrative Agent and the undersigned Lenders, in accordance with the provisions of the Credit Agreement, has caused this Amendment to be executed and delivered by their respective duly authorized officers under seal as of the date set forth in the preamble on page one of this Amendment.

 

	BORROWER:
	STANDEX INTERNATIONAL CORPORATION, as the Borrower     By: /s/ Ademir Sarcevic Name: Ademir Sarcevic Title: Vice President, Chief Financial Officer

 

 

[Signature Page to First Amendment]

 

CITIZENS BANK, N.A., as Administrative Agent and as a Lender     By: /s/ Michael Makaitis Name: Michael Makaitis Title:    Senior Vice President

 

 

[Signature Page to First Amendment]

 

BANK OF AMERICA, N.A., as a Lender     By: /s/ Kevin G. Cote Name: Kevin G. Cote Title: Vice President

 

 

[Signature Page to First Amendment]

 

TD BANK, N.A., as a Lender     By: /s/ Ryan Feeney Name: Ryan Feeney Title: Vice President

 

 

[Signature Page to First Amendment]

v3.24.3

Document And Entity Information	Oct. 28, 2024
Document Information [Line Items]
Entity, Registrant Name	STANDEX INTERNATIONAL CORPORATION
Document, Type	8-K
Document, Period End Date	Oct. 28, 2024
Entity, Incorporation, State or Country Code	DE
Entity, File Number	1-7233
Entity, Tax Identification Number	31-0596149
Entity, Address, Address Line One	23 Keewaydin Drive
Entity, Address, City or Town	Salem
Entity, Address, State or Province	NH
Entity, Address, Postal Zip Code	03079
City Area Code	603
Local Phone Number	893-9701
Title of 12(b) Security	Common Stock
Trading Symbol	SXI
Security Exchange Name	NYSE
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0000310354

---