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Agreement for the sale and purchase of shares
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in the share capital of GdW Beheer B.V.
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Between
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Mr G. de Wit (as the Seller),
Decision Company B.V. and Ubi Concordia B.V. (as the Warrantors)
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and
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Shanwick B.V. (as the Purchaser)
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10 February 2022
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TABLE OF CONTENTS
APPENDICES
THIS AGREEMENT (the Agreement) is made on the date as stated on the first page.
BETWEEN:
1.MR G.P.M. DE WIT, born on 31 January 1948, currently residing in (1150) Brussels, Belgium, at 9 Avenue de l'Horizon (the Seller);
2.DECISION COMPANY B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, with its statutory seat in Amsterdam, the Netherlands, and registered in the trade register of the Chamber of Commerce under number 34393453 (Decision Company);
3.UBI CONCORDIA B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, with its statutory seat in Heemstede, the Netherlands, and registered in the trade register of the Chamber of Commerce under number 55432956 (Ubi Concordia); and
4.SHANWICK B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, with its statutory seat in Amsterdam, the Netherlands, and registered in the trade register of the Chamber of Commerce under number 85190101 (the Purchaser).
The parties referred to under 2 and 3 are hereinafter together referred to as the Warrantors and individually also as a Warrantor. The parties referred to under 1 up to and including 4 are hereinafter together referred to as the Parties and individually also as a Party.
WHEREAS:
A.The Seller holds all issued and outstanding shares in the share capital of GDW-BEHEER B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, with its statutory seat in Aerdenhout, the Netherlands, and registered in the trade register of the Chamber of Commerce under number 34393507 (the Company and the shares held by the Seller hereinafter the Shares).
B.On 31 December 2021 the Company acquired from each of the Warrantors 2,700 issued and outstanding shares and as a result of which, the Company currently holds 100% of the issued and outstanding shares in the share capital of WorldACD Market Data B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, with its statutory seat in ‘s-Gravenhage, the Netherlands, and registered in the trade register of the Chamber of Commerce under number 24249906 (WorldACD or the Subsidiary).
C.The business activities of WorldACD consist of providing market data on air cargo.
D.The Seller wishes to sell and transfer the Shares to the Purchaser, and the Purchaser wishes to purchase and accept the Shares from the Seller (the Transaction).
E.The Purchaser has performed a legal, financial, operational and tax due diligence with respect to the Companies and has reviewed the Disclosed Information.
F.The Parties have obtained all necessary corporate approvals to enter into this Agreement and to complete the Transaction.
G.No works council (ondernemingsraad) has been established by the Purchaser, the Company or WorldACD.
H.The Parties have reached agreement on the sale and purchase of the Shares on the terms and conditions set out in this Agreement.
IT IS AGREED as follows:
1.DEFINITIONS
1.1.Unless the contrary intention appears, capitalised terms used in this Agreement shall have the meaning given to them in this clause 1:
Accounts means the unaudited annual accounts of WorldACD as at the Accounts Date, as included in the Data Room;
Accounts GdW means the unaudited annual accounts of the Company as at the Accounts Date, as included in the Data Room;
Accounts Date means 31 December 2020;
Affiliates means:
(a)each and every subsidiary of a person or company in the meaning attributed to it in section 2:24a DCC;
(b)in relation to any person other than an individual, any person which is Controlled by, Controls or is under common Control with, such person; and
(c)in relation to an individual, his close relatives. For the purposes of this definition, close relatives means: (a) his spouse, parents, siblings and children (including step children); (b) the trustees, acting in their capacity as such trustees, of any trust of which he or any of his close relatives is a beneficiary, or in the case of a discretionary trust, is a discretionary object; and (c) any person of which he and/or his close relatives have Control;
Agreed Form means in relation to any document, such document substantially in the form of that document which has been agreed upon by the Parties;
Agreement means this agreement for the sale and purchase of the Shares;
Business has the meaning given to it in recital C;
Business Day means a day (other than a Saturday or Sunday) on which banks are generally open in the Netherlands for normal business;
Cash means all cash at banks, cash in transit, cash in hand and marketable securities of WorldACD respectively the Company (as applicable), except cash and marketable securities not readily available for unrestricted and immediate use;
Capital Maintenance Period has the meaning given to it in clause 11.5;
Capital Maintenance Statement means the statement to be issued by each Warrantor (and co-signed by the ultimate beneficial owner of each Warrantor) as security for the Warrantors’ obligations under this Agreement, attached hereto as Appendix 8;
Companies means the Company and WorldACD;
Company has the meaning given to it in recital A;
Company Tax Indemnity has the meaning given to it in clause 10.5;
Completion Balance Sheet has the meaning given to it in Appendix 1;
Completion Date has the meaning given to it in clause 4.1;
Completion means completion of the Transaction;
Completion Accounts Date means 31 December 2021;
Completion Payment has the meaning given to it in clause 4.2;
Completion Statement has the meaning given to it in Appendix 1;
Control means (i) the ownership or control (directly or indirectly) of more than 50% of the ownership interests of the relevant person; or (ii) the right to appoint or remove (or the ability (whether in law or fact) to direct the appointment or removal of) the members of the governing body of the relevant person holding a majority of the voting rights at meetings of the governing body on all, or substantially all, matters;
Damage has the meaning given to it in clause 7.1;
Data Room means the online data room hosted by Virtual Vaults made available to the Purchaser and its advisors from 29 October 2021 until 26 January 2022, containing financial, legal and commercial information in relation to the Shares, the Company and its businesses, assets, liabilities and prospects, the contents of which data room are stored on the data carrier attached hereto as Appendix 6;
DCC means the Dutch Civil Code (Burgerlijk Wetboek);
Debt means all interest bearing debt of WorldACD respectively the Company (as applicable), all other debt securities (if any) issued by WorldACD respectively the Company (as applicable) (whether or not interest bearing and irrespective of their maturity), pre-paid subscription fees (deferred revenues), all credit cards debt, financial leases, dividend payables, any accrued but unpaid corporate income tax (CIT) normally due and payable, all current accounts, all NOW and other government subsidy related payables);
Decision Company has the meaning given to it in the introduction of this Agreement;
Deed of Transfer means the notarial deed of transfer by means of which the Seller shall transfer the Shares to the Purchaser at Completion, not containing any warranties or other form of assurance, attached hereto in the Agreed Form as Appendix 4;
Disclosed Information means any and all information which is (i) contained in this Agreement, (ii) contained in any document set out in the Data Room, and (iii) contained in the answers provided to the questions submitted by the Purchaser and/or its advisors during its due diligence process as included in the Data Room;
Dividend Amount has the meaning given to it in clause 4.3(h);
Dispute Notice has the meaning given to it in Appendix 1;
Effective Date means 1 January 2022, 0:01h CET;
Encumbrance means any encumbrance including without limitation mortgage, pledge, charge, lien, deposit or assignment by way of security, option or right of pre-emption, entitlement to ownership (including usufruct and similar entitlements), any provisional or executorial attachment (beslag) and any other interest or right held, or claim that could be raised, by a third party;
Escrow Agent means Intertrust Group B.V.;
Escrow Agreement means the escrow agreement between the Seller, the Purchaser and the Escrow Agent, attached hereto as Appendix 7;
Estimated Purchase Price has the meaning given to it in clause 3.2;
Estimated Purchase Price A has the meaning given to it in clause 3.2;
Fairly Disclosed means that the relevant facts and circumstances regarding a matter appear from the Disclosed Information in such manner and to the extent that its existence and scope should reasonably have been clear to and known by a professional purchaser (or its advisors) after a face value (prima facie) reading of the relevant documents, and where reference is made to a (particular part of a) document, but that document has not been provided in the Disclosed Information, such reference and (particular part of a) document shall not be deemed to be Fairly Disclosed;
Fundamental Warranties means each of the statements set out in paragraphs 1 (Capacity and consequences of sale), 2 (The Company) and 3 (The Shares) of Appendix 2;
Governmental Entity means any international, supranational, European Union, national, federal, regional, provincial, municipal or local body or authority exercising a legislative, judicial, executive, regulatory or self-regulatory, administrative or other governmental function and with jurisdiction in respect of the relevant matter;
Independent Expert has the meaning given to it in Appendix 1;
Leakage means:
(a)the amount of all payments made by WorldACD to the Seller or the Company as a result of a capital decrease;
(b)the amount of all other distributions (in cash or in kind) of profits or reserves, whether by dividend or repurchase or redemption of share capital or other means and any other payment in respect of any share capital or other securities of WorldACD, in each case in cash or in kind, paid or made by the relevant company to, or for the benefit of, the Seller, the Company, or any person connected to the Seller and/or the Company;
(c)the amount of any waiver, deferral, forgiveness or release by WorldACD of any amount or obligation owed or due to WorldACD by the Seller, the Company or any person connected to the Seller and/or the Company;
(d)the amount of any assumption or discharge of any liability of the Seller, the Company or any person connected to the Seller and/or the Company by WorldACD;
(e)any transactions entered into by WorldACD which (i) in the opinion of reasonable acting parties are not on arm’s length conditions or (ii) have favoured the Seller, the Company or any person connected to the Seller and/or the Company;
(f)the amount of any bonus or other compensation (whether in cash or in kind) payable to employees of WorldACD which are payable by WorldACD as a result of the entering into of this Agreement or the Completion of the Transaction;
(g)the amount of any fees (including fees of legal counsel and other external advisers), costs and expenses of the Seller, the Company or any person connected to the Seller in relation to the Transaction incurred or reimbursed by, or charged to WorldACD; and
(h)the amount of Tax imposed on or payable by WorldACD in respect of any of the matters referred to in the items under (a) up to and including (g) above;
Net Working Capital means the current assets (kortlopende activa) of WorldACD respectively the Company (as applicable) inter alia, other than Cash and all current liabilities of WorldACD respectively the Company (as applicable) to the extent not qualifying as Debt (including (a) any Taxes not qualifying as Debt, and (b) furthermore including any pre-paid subscription fees not qualifying as Debt);
Notary means Laurens Kelterman, a Dutch civil law notary in Amsterdam at VBC Notarissen, or his substitute;
Notary Letter means the letter agreement between the Notary and the Parties, which confirmed the funds flow and sequence of Completion events, an executed copy of which is hereby attached as Appendix 3;
Party and Parties have the meaning given to them in the introduction of this Agreement;
Pre-Completion Tax Return has the meaning given to it in clause 10.11;
Permitted Leakage means any payments made to the Warrantors of EUR 15,990 and EUR 14,370 respectively, in accordance with their management agreements with the Companies in the ordinary course and consistent with past practice;
Purchase Price means the Purchase Price A and the Purchase Price B together;
Purchase Price A has the meaning given to it in clause 3.1;
Purchase Price B has the meaning given to it in clause 3.1;
Purchaser has the meaning given to it in the introduction of this Agreement;
Purchaser’s Group means the Purchaser and all of its subsidiaries and group companies, as defined in sections 2:24a and 2:24b of the DCC, from time to time, including as of Completion the Company;
Purchaser’s Relief means any Relief arising to the Company or any member of the Purchaser’s Group to the extent that it either arises in respect of an event occurring (or deemed to occur), or period commencing, on or after the Completion Date;
Relevant Proportion means, in respect of the Seller 70% (seventy percent), and in respect of Decision Company and Ubi Concordia 15% (fifteen percent) (each);
Relief means, unless the context otherwise requires, any allowance (including amortization or depreciation), credit, deduction, exemption or set-off in respect of any Tax or relevant to the computation of any income, profits or gains for the purposes of any Tax, or any right to repayment of or saving of Tax and any reference to the use or set-off of Relief shall be construed accordingly;
Representatives means any director, officer, employee, accounting, financial, legal, tax or other professional adviser of the relevant person;
Seller has the meaning given to it in the introduction of this Agreement;
Shares has the meaning given to it in recital A;
Subsidiary has the meaning given to it in recital B;
Subsidiary Shares has the meaning given to it in paragraph 3.1 of Appendix 2;
Taxation or Tax means all forms of taxes, levies, duties, imposts, social security charges, health security contributions, any other contributions or charges and withholdings of any nature whatsoever, whether direct or indirect, including without limitation corporate income tax, wage withholding tax, social security premium, value added tax, premiums or other contributions, consumption taxes, environmental taxes, dividend withholding tax, packaging tax, (real estate) transfer tax, property tax, capital tax, energy tax, waste tax, import, export, custom and other duties any repayment of unlawful state aid in relation thereto, as well as any payment required to be made under any contract in relation to tax, whether disputed or not and regardless of whether these items are chargeable directly or primarily against or attributable directly or primarily to any other person and of whether any amount in respect of any of them is recoverable from any other person, and all penalties, additions, interest, damage, fines, costs and expenses relating to any of them;
Tax Audit means any audit, investigation, visit, inspection, assessment, discovery, access order, or other proceedings from any Tax Authority with respect to any Tax matter of the Companies;
Tax Authority means any government, state or municipality or any local, state, federal or other fiscal, revenue, customs or excise authority, body or official anywhere in the world, authorized to levy Tax;
Tax Claim means any claim under the Tax Indemnities or claim for breach of the Tax Warranties;
Tax Indemnities has the meaning given to it in clause 10.5;
Tax Liability means (i) any liability to make or suffer (including by way of set-off against a Tax receivable) an actual or increased payment of Tax, and (ii) the use or set-off of any Purchaser's Relief in circumstances where, but for such use or set-off, an actual liability to Tax would have arisen (the amount of the Tax Liability for these purposes being deemed to be equal to the amount of the actual liability to Tax that is saved by the use or set-off of the Purchaser's Relief), and (iii) the loss of any Relief that was included in the Accounts as an asset or was otherwise taken into account in determining the Purchase Price;
Tax Refund means a refund, rebate, or repayment in respect of Tax;
Tax Return means any return, (including any information return), report, statement, declaration, schedule, attachment, notice, form, or other document or information, including any amendment thereof, filed with or submitted to, or required to be filed with or submitted to, any Tax Authority in connection with the determination, assessment, collection, or payment of any Tax or in connection with the administration, implementation, or enforcement of or compliance with any requirement relating to Tax;
Tax Warranties means the Warranties included in paragraph 12 of Appendix 2 and Tax Warranty means any of them;
Third Party Claim has the meaning given to it in clause 9;
Transaction has the meaning given to it in recital D;
Ubi Concordia has the meaning given to it in the introduction of this Agreement;
Warranties means the representations and warranties of Seller contained in Appendix 2 and Warranty means any of them;
Warrantor and Warrantors have the meaning given to them in the introduction of this Agreement;
Warranty Breach has the meaning given to it in clause 7.1;
WorldACD has the meaning given to it in recital B; and
WorldACD Tax Indemnity has the meaning given to it in clause 10.4.
1.2.Where any statement in this Agreement is qualified by the awareness or knowledge of the Seller ("to the best of the Seller’s knowledge" or any similar expression) that statement shall be deemed to refer to the knowledge that the Seller has at the Completion Date or should have had based on his position within the Companies or after due enquiry of the relevant persons within the Companies having knowledge of the subject matter to which the knowledge qualification refers.
1.3.In this Agreement, unless the contrary intention appears, a reference to a clause, subclause, recital, paragraph, schedule or annex is a reference to a clause, subclause, recital, paragraph, schedule or annex of this Agreement. The schedules and annexes form part of this Agreement.
1.4.References to a person shall be construed so as to include any individual, firm, company, government, Governmental Entity, Tax Authority, state or agency of a state or any joint venture, association, or partnership (whether or not having separate legal personality).
1.5.References to the word including shall be construed so as to be followed by the words ‘but not limited to’.
1.6.A person (first person) shall be deemed to be connected with another person (the second person) if the first person is:
(a)a person that directly or indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under common control with the second person or one or more members of the second person’s family in the first degree;
(b)a member of the second person’s family in the first and second degree; or
(c)a person with respect to which the second person or one or more members of the second person’s family in the first degree serves as a managing director or in a similar capacity.
1.7.The singular shall include the plural and vice versa and references to words importing one gender shall include all genders.
1.8.The headings in this agreement do not affect its interpretation.
2.SALE AND PURCHASE
2.1.Subject to the terms of this Agreement, the Seller hereby sells the Shares held by it to the Purchaser and the Purchaser hereby purchases such Shares from the Seller.
2.2.Subject to Completion, the Shares (and all assets and liabilities relating to the Shares) shall be for the risk and account of the Purchaser as of Completion and the Subsidiary Shares (and all assets and liabilities relating to the Subsidiary Shares) shall be for the risk and account of the Purchaser as of the Effective Date.
2.3.On Completion, the Seller shall transfer (leveren) the Shares free from all Encumbrances and together with all rights attaching to them to the Purchaser by executing the Deed of Transfer before the Notary against payment of the Purchase Price, in the manner as set out in clause 4.2.
3.PURCHASE PRICE
Purchase Price
3.1.The aggregate purchase price for the Shares shall be equal to:
(a)an amount equal to (the Purchase Price A):
(i)a fixed amount of EUR 12,500,000, being the enterprise value of WorldACD;
(ii)adding the Cash of WorldACD at the Completion Accounts Date and subtracting the Debt of WorldACD at the Completion Accounts Date;
(iii)adding the Net Working Capital of WorldACD at the Completion Accounts Date (if being a positive amount) or subtracting the Net Working Capital at the Completion Accounts Date (if being a negative amount); and
(b)adding an amount equal to EUR 18,493, being the available Cash of the Company at Completion, assuming there is no Debt in the Company and there is no Net Working Capital or other liabilities of the Company at Completion (the Purchase Price B and together with the Purchase Price A, the Purchase Price).
3.2.At the date hereof, the Parties jointly estimate the Debt, Cash and Net Working Capital of WorldACD at the Completion Accounts Date to amount to EUR 1,251,503, EUR 2,122,871and EUR 215,598 respectively and hence the Estimated Purchase Price A (including a settlement of the costs due by the Seller to the Purchaser in the amount of EUR 58,255 in accordance with clause 15) at Completion amounts to EUR 13,528,711, all calculated in accordance with Part 3 of Appendix 1. The Parties agree that these estimates shall be binding for purposes of calculating the Purchase Price A payable at Completion (the Estimated Purchase Price A). Based on the Estimated Purchase Price A and the Purchase Price B the total estimated Purchase Price payable at Completion, including a deduction amounts to EUR 13,547,204 (the Estimated Purchase Price).
3.3.Post Completion, the actual amount of the (Estimated) Purchase Price A and hence the Purchase Price shall be agreed and determined in accordance with Part 1 and Part 2 of Appendix 1. The Estimated Purchase Price A shall be adjusted in accordance with Appendix 1 if it appears that the actual amount of Cash, Debt and/or Net Working Capital of WorldACD at the Completion Accounts Date as calculated in accordance with Part 1 and Part 2 of Appendix 1 deviates from the estimated Cash, Debt and/or Net Working Capital of WorldACD set forth in clause 3.2. For the avoidance of doubt and subject to the provisions of clause 10.2, the Purchase Price B shall be a fixed amount.
Adjustment of the Purchase Price
3.4.Any payment made by the Seller to the Purchaser under or in connection with this Agreement shall, to the extent permissible, be treated as an adjustment of the Purchase Price paid by the Purchaser and the Purchase Price shall be deemed to have been reduced by the amount of such payment. The Purchase Price shall not become negative as a result of any such reduction.
4.COMPLETION
Date and place
1.1.Completion shall take place at the offices of the Notary at [●] February 2022, or at such time and date as the Parties may agree in writing (the Completion Date).
Completion Payment
4.2.The Purchaser shall ensure that an amount equal to the sum of the Estimated Purchase Price (together the Completion Payment) is received on the Notary’s third party account in accordance with the Notary Letter with value on the Completion Date under reference “Project Vermeer” by no later than 10h00 CET on the Completion Date. The amount paid into the Notary’s third party account pursuant this clause 4.2 shall be paid out in accordance with the Notary Letter.
Completion Actions
4.3.Prior or at Completion the relevant Parties shall do, or procure to be done, the following in the following order, each action conditional upon all actions being effected:
(a)the Seller shall deliver to the Notary, with a copy to the Purchaser, the up-to-date and complete shareholder’s register of the Company and WorldACD;
(b)the Seller shall deliver to the Purchaser an executed resignation letter of the Seller in his capacity as managing director of the Company and WorldACD, with effect from the time of execution of the Deed of Transfer, acknowledging that he has no claim against the Company respectively WorldACD, whether for loss of office or otherwise in connection with his capacity as managing director;
(c)the Seller shall deliver to the Purchaser a resolution of the general meeting of the Company duly executed by the Seller, in which it shall be resolved or ratified that the Seller shall be removed and granted discharge as managing director of the Company and the Purchaser shall be appointed, with effect from the time of execution of the Deed of Transfer;
(d)the Seller shall deliver to the Purchaser a resolution of the general meeting of WorldACD duly executed by the Seller, in which it shall be resolved or ratified that the Seller shall be removed and granted discharge as managing director of WorldACD and the Purchaser shall be appointed, with effect from the time of execution of the Deed of Transfer;
(e)the Seller shall deliver to the Notary the powers of attorney duly executed on its behalf and on behalf of the Company and the Purchaser shall deliver to the Notary a power of attorney duly executed on behalf of the Purchaser (all, to the extent required, legalized and apostilled), authorising its representative to attend to and execute the Deed of Transfer on their behalf;
(f)the Purchaser and each of Decision Company and Ubi Concordia shall execute a management agreement;
(g)the Seller shall deliver to the Purchaser proof, acceptable to the Purchaser, that the securities administered as “fin fixed assets (1381 – Effecten)” in the books of the Company have been fully liquidated;
(h)immediately prior to the obligation of the Purchaser as set out in clause 4.2, the Seller shall execute a resolution of the general meeting and a board resolution in an agreed form between the Parties of the Company effectuating a dividend payment (in cash) in the amount of EUR 3,075,000 to the Seller (the Dividend Amount), which amount will, after payment of withholding taxes to the Dutch Tax Authority be paid in cash to the Seller on the Completion Date prior to Completion. The Seller shall deliver to the Purchaser, to Purchaser’s satisfaction, proof that this payment has been made by the Company;
(i)the Seller shall deliver evidence of the registration of the domain names worldacd.com and worldacdmarketdata.com on behalf of WorldACD;
(j)the Seller shall deliver evidence of the notification to Mr C. Wolzak (the lessor of the property Keizersgracht 83A, Amsterdam) regarding the changes in the corporate/organizational structure of WorldACD following the Transaction; and
(k)the Purchaser, Decision Company and Ubi Concordia shall execute the Reinvestment Documentation and shall procure that the Notary shall execute the relevant notarial deeds as referred to in the reinvestment Documentation;
(l)the Seller and the Purchaser shall (i) execute the Deed of Transfer before the Notary, (ii) procure that the Notary shall execute the Deed of Transfer, (iii) procure that the Company shall acknowledge the transfer of the Shares by signing the Deed of Transfer and (iv) assist the Notary to promptly amend the Company’s register of shareholders.
4.4.The actions set out in clause 4.2 and clause 4.3 are interdependent and are to be carried out contemporaneously. No delivery, payment or other event referred to will be regarded as having been made or occurred until all deliveries and payments have been made and all other specified events have occurred.
4.5.The Seller, Mr Van Asten, Mr Versélewel de Witt Hamer, Ubi Concordia, Decision Company, WorldACD and the Company confirm that the shareholders' agreement dated 6 February 2013 shall be terminated effective per the execution of the Deed of Transfer, and each of them unconditionally and irrevocably waive any rights they may have towards WorldACD pursuant to (the termination of) the shareholders' agreement.
Failure to complete
4.6.If the Purchaser fails to fulfil its obligations pursuant to clause 4.2 or any of the Parties fails to fulfil its obligations pursuant to clause 4.3, then the other Party may, in its absolute discretion, by written notice to the other Party:
(a)proceed to Completion, to the extent reasonably possible and permitted by any applicable laws;
(b)defer Completion, in which event the provisions of this clause 4 shall apply to such deferred Completion, provided that Completion cannot be deferred past ten (10) Business Days following the original Completion Date; or
(c)subject to clause 18.1, and after first having deferred Completion with at least six (6) Business Days in accordance with clause 4.6(b), terminate this Agreement with immediate effect in the event Completion does not occur on the deferred Completion Date, without incurring any liability as a result thereof and without any obligation on any Party to consummate the Transaction or to continue negotiations.
5.SETTLEMENT OF INDEBTEDNESS
5.1.The Seller shall procure that effective as per Completion:
(a)all indebtedness due from the Seller or any of its respective Affiliates to the Companies, if any, is satisfied in full;
(b)all indebtedness due from the Companies to the Seller or any of its respective Affiliates, if any, is satisfied in full; and
(c)(i) the Companies are released from any guarantee, indemnity, surety, letter of comfort, Encumbrance or other similar liabilities given or incurred by it for the benefit of the Seller or any of its respective Affiliates, whether actual or contingent, in each case without any additional costs, expenses or damages for the Companies and (ii) the Seller and any of its respective Affiliates (as the case may be) have irrevocably waived, to the extent required in advance, any right of recourse against the Companies they have or may have.
5.2.The Seller shall indemnify and hold harmless the Purchaser and the Company against any breach of the covenants in clause 5.1.
6.WARRANTIES
6.1.The Seller and the Warrantors represent that each of the Warranties is as at the Completion Date true and accurate, it being understood that
(a)the Seller and Warrantors make representations and warranties in respect of themselves, WorldACD, the Subsidiary Shares and the Accounts, and
(b)all other representations and warranties (including with respect to the Seller, the Shares, the Company and the Accounts GdW) are only made by the Seller.
6.2.The Seller and the Warrantors acknowledge that the Warranties are material to the Purchaser's decision, and have been relied upon by the Purchaser to enter into this Agreement and acquire the Shares on the terms as set out in this Agreement. The Warranties constitute an express allocation of risk between the
Purchaser and the Seller to the effect that any Warranty Breach is for the account and risk of the Seller and the Warrantors subject to the limitations and qualifications set out in this Agreement.
6.3.Each of the Warranties is made and given separately and independently from the others and is, unless otherwise stated, not limited by reference to any of the other Warranties or by any other provision of this Agreement and where a fact or circumstance would entitle the Purchaser to make a claim in respect of more than one Warranty, it shall be the sole discretion of the Purchaser to determine under which Warranty it makes a claim.
6.4.The Purchaser confirms to the Seller and the Warrantors that on the date of this Agreement it is not aware of any Warranty Breach.
1.5.The only warranties in respect of Tax are the Tax Warranties.
7.WARRANTY BREACHES
1.1.Following Completion, the Seller shall indemnify and hold the Purchaser and the Companies harmless against any amount of loss or damage incurred or suffered by the Purchaser and/or the Companies in relation to a breach of one or more Warranties, whereby the damage of the Companies is deemed to be the damage of the Purchaser (a Warranty Breach), to be determined in accordance with title 1, section 10 of book 6 of the DCC (Damages) provided that:
(a)to the extent the Warranty Breach relates to the warranties described in 6.1(b), the Seller shall be liable towards the Purchaser in full, and
(b)to the extent the Warranty Breach relates to the warranties described in 6.1(a), the Seller and the Warrantors shall be liable towards the Purchaser pro rata their Relevant Proportion.
1.2.The Purchaser shall notify the Seller, which shall act as representative for the Warrantors, in writing of a Warranty Breach within forty (40) Business Days after it has become aware of such Warranty Breach. The notice shall, to the extent possible, set out in reasonable detail the events or facts giving rise to the Warranty Breach and indicate the amount of Damages involved. The failure of the Purchaser to give a notice within the time limits referred to in this subclause shall not affect the rights of the Purchaser to be compensated hereunder, except to the extent the Damage resulting from the Warranty Breach have increased due to such failure to notify within the set time limit, in which case the Seller will not be liable for such increase of Damages.
8.LIMITATION OF LIABILITY
Thresholds
8.1.The Seller and the Warrantors shall not be liable for any Warranty Breaches (other than Warranty Breaches relating to the Fundamental Warranties), unless:
(a)each individual Damage or a series of Damages arising from identical facts exceeds an amount of EUR 20,000; and
(b)the aggregate amount of all Damages from such Warranty Breaches exceeds an amount of EUR 200,000,
in which case the Seller’s and the Warrantors’ liability shall be for the excess amount of such Damages only.
Maximum liability
8.2.The liability of the Seller and the Warrantors under this Agreement shall be limited as follows:
(a)the liability of the Seller and the Warrantors in respect of a Warranty Breach (other than the Fundamental Warranties) shall be limited to an amount equal to 50% of the Purchase Price A;
(b)the maximum aggregate liability of the Seller for all claims pursuant to this Agreement (including in respect of the Fundamental Warranties and Tax Indemnity) shall not exceed an amount equal his Relevant Proportion of the Purchase Price A plus the Purchase Price B (irrespective whether such amounts were received in cash or in kind, or held back in escrow); and
(c)the maximum aggregate liability of each of the Warrantors for all claims pursuant to this Agreement (including in respect of the Fundamental Warranties and Tax Indemnity) shall not exceed their respective Relevant Proportions of the Purchase Price A (irrespective whether such amount was received in cash or in kind).
Time limitations
8.3.The liability of the Seller and the Warrantors ends:
(a)in respect of the Fundamental Warranties on the date that is 5 (five) years after the Completion Date;
(b)in relation to a Tax Claim on the date that is 7 (seven) years after the Completion Date; and
(c)in respect of other Warranties on the date which is 18 (eighteen) months after the Completion Date.
Other limitations
8.4.The Seller and the Warrantors shall not be liable for a Warranty Breach to the extent:
(a)matters relating to such Warranty Breach have been Fairly Disclosed in the Disclosed Information;
(b)such Warranty Breach arises out of any change after Completion in the accounting policies or practices applied by the Purchaser or the Companies (other than to comply with applicable accounting standards or laws);
(c)such Warranty Breach arises from any change in any legislation or regulation, any judicial or administrative interpretation of the law or any practice or policy of a regulatory authority after the date of this Agreement (whether or not retrospective in effect) and/or
(d)such Warranty Breach is caused or increased by any act, or omission to act, after Completion, by the Purchaser or any other member of the Purchaser Group, or by any Representative of the Purchaser, unless, such act or omission (i) is in the ordinary course of their business of the Companies as conducted prior to Completion, (ii) is carried out or effected pursuant to a legal binding obligation or commitment created on or before Completion, (iii) is carried out or effected to comply with any Law, (iv) is carried out or effected by the Purchaser or a member of the Purchaser’s Group at the request of or with the consent of the Seller, (v) is carried out or effected by the Purchaser or a Company to avoid or reduce a Tax Liability that would have arisen without such act or omission, (vi) would not have resulted in the relevant Tax Liability had the Warranties been true and accurate, or (vii) merely leads to the discovery by a Tax Authority of a matter giving rise to such Tax Liability.
1.5.For the purpose of this clause 8, the Seller's and Warrantors’ liability for any Warranty Breach, shall be reduced by:
(a)any amount actually received by any of the Companies from any third party, including any insurance policy, to the extent such amount relates to the facts, circumstances or events given rise to the Warranty Breach (net of any deductible amount and taking into account any resulting increase in premium);
(b)a specific provision or reserve for the matter giving rise to the Warranty Breach has been made in the Accounts or the Completion Balance Sheet;
(c)any amount in respect of such claim that was specifically included in the Completion Statement and/or the equity bridge; and
(d)any Tax refund actually received or realised by the Purchaser or any of the Companies or any deduction of Tax owing by the Purchaser or any of the Companies, to the extent that such refund or deduction relates to the facts, circumstances or events given rise to the Warranty Breach.
1.6.The Purchaser shall use its best efforts to claim an amount under an insurance policy if such claim is covered under such policy. If Purchaser is entitled to actually recover from a third party a sum which indemnifies or compensates Purchaser (in whole or in part) in respect of a claim for a Warranty Breach or for a claim which has been paid already by the Seller and/or Warrantors, then Purchaser shall procure that all reasonable steps are taken to enforce recovery against the third party, provided that nothing in this clause 8.6 shall require the Purchaser to take any such action which would be harmful to the reputation, goodwill or reasonable commercial interests of Purchaser or the Purchaser’s Group. If the Seller and/or Warrantors have already paid an amount in respect of a Warranty Breach and an actual recovery is made by Purchaser, Purchaser shall pay to Seller and/or Warrantors (as applicable), as soon as practicable after receipt, an amount equal to the lower of:
(a)the sum recovered from the third party less any costs and expenses reasonably incurred in obtaining such recovery and less any Taxes due in respect of the recovery; or
(b)the amount previously paid by Seller and/or Warrantors to Purchaser.
1.7.The Purchaser shall use its best efforts to claim an amount from a Tax Authority if, after the Completion Date, any of the Companies is entitled to actually receive a repayment of Tax from any Tax Authority in respect of any period up to the Effective Date (in respect of WorldACD) or the Completion Date (in respect of the Company) and such refund or deduction relates to the facts, circumstances or events given rise to the Warranty Breach.
1.8.The Purchaser shall not be entitled to recover from the Seller and/or Warrantors more than once in respect of the same Damage suffered.
Exclusion of limitations
1.9.None of the limitations of Seller's and Warrantors’ liability pursuant to this clause 8 (whether in time, amount or otherwise) shall apply in the case of fraud or wilful misconduct on the part of the Seller or the Warrantors with respect to the warranties given by each of them pursuant to clause 6.1.
No claims against employees
1.10.With effect from Completion, the Seller and Warrantors hereby waive by means of an irrevocable third-party stipulation, their right to bring any claim against any present or former director or employee of the Company in respect of any information, opinion or advice supplied or given (or omitted to be supplied or given) by him or her to the Purchaser or a member of the Purchaser’s Group or Representatives in connection with the Transaction, other than in case of fraud, wilful misconduct or gross negligence on the part of such director or employee.
9.THIRD PARTY CLAIMS
1.1.If a claim of the Purchaser under this Agreement, including a claim for a Warranty Breach, but other than a Tax Claim (to which clause 11.9 applies instead), arises as a result of or in connection with a liability or alleged liability to a third party (a Third Party Claim), then:
(a)the Purchaser shall, and shall procure that the Companies shall use reasonable endeavours to strike a fair balance between the interests of the Seller in keeping the Damage likely to arise from such Third Party Claim as low as possible and the interests of the Purchaser and the Company in maintaining good relations with the third party concerned and to avoid an adverse effect on the Tax position of any member of the Purchaser’s Group.
(b)the Purchaser shall, and shall procure that the Companies shall, keep the Seller informed in writing of the conduct and progress of the Third Party Claim and shall provide the Seller with drafts of any documentation to be submitted by the Companies at a reasonable period prior to those documents
being actually submitted and the Purchaser shall (and shall procure that the Companies shall) take into account any reasonable comments the Seller may have in respect of such documents;
(c)the Purchaser shall procure that the Companies shall take the reasonable interests of the Seller into account; and
(d)the Purchaser shall not, and shall procure that the Companies shall not, admit liability in respect of, or compromise or settle any Third Party Claim without the consent of the Seller, which consent shall not be unreasonably withheld or delayed.
10.SPECIFIC INDEMNITIES
1.1.From Completion, the Seller and the Warrantors, in the Relevant Proportion, shall at all times indemnify and hold harmless (on a euro-for-euro basis) the Purchaser or, at the Purchaser's sole discretion, any of the Companies, for all losses, costs, charges, expenses, damage, liabilities, claims, Taxes, demands, actions and legal proceedings (including reasonable attorney and expert fees and expenses) resulting directly or indirectly from or relating to:
(a)any liabilities or repayments (including penalties and interest, insofar due as a result of actions or omissions of the Companies prior to the Completion Date) of governmental support measures in relation to COVID-19 received by or on behalf of any of the Companies in the period up to the Completion Date, including the Temporary Emergency Bridging Measure for Sustained Employment (Tijdelijke Noodmaatregel Overbrugging voor Werkbehoud NOW);
(b)any claim from a third party, including penalties imposed by the Dutch Data Protection Authority (Autoriteit Persoonsgegevens), pursuant to non-compliance with the General Data Protection Regulation and any regulations derived from it, including but not limited to not maintaining a data breach register or a processor register in relation to the period up to Completion;
(c)any Leakage that occurred between the Effective Date up to and including Completion, other than Permitted Leakage;
(d)any liabilities (including Tax Liabilities) in relation to the costs incurred by the Companies in relation to the Transaction; and
(e)any commitment or liability of the Companies vis-à-vis Mr. Rogier Blocq, resulting from an agreement entered into between one or more of the Companies and Mr. Rogier Blocq prior to Completion pursuant to which Mr. Rogier Blocq would hold an irrevocable right to acquire shares in the capital of one of the Companies, unless in case such commitment or liability results solely from an action of the Purchaser or the Companies following Completion,
provided that:
i.to the extent the claim relates to the Company or Leakage, only the Seller shall be liable towards the Purchaser, and
ii.to the extent the claim relates to WorldACD (other than with respect to Leakage), the Seller and the Warrantors shall each be liable towards the Purchaser pro rata their Relevant Proportion.
1.2.From Completion, the Seller shall at all times indemnify and hold harmless (on a euro-for-euro basis) the Purchaser or, at the Purchaser's sole discretion, the Company, for all losses, costs, charges, expenses, damage, liabilities, claims, Taxes, demands, actions and legal proceedings (including reasonable attorney and expert fees and expenses) resulting directly or indirectly from or relating to (i) any deviation from the assumed Cash, Debt or Net Working Capital of the Company as set forth in clause 3.1(b), in which case the Seller shall be obliged to pay the difference between the actual Cash, Debt and/or Networking Capital and the assumed amounts set forth in clause 3.1(b) and (ii) any liabilities (including Tax Liabilities) of the Company relating to the period prior to Completion.
1.3.None of the Seller's and Warrantors’ obligations under clause 10.1 and 10.2 shall be limited or qualified in any respect by the provisions of this Agreement, with the exception of clause 8.2(a). Notwithstanding the above, clause 9.5(d) and 9.7 shall also apply with respect to clause 10.1(c).
Tax Indemnities
1.4.The Seller and the Warrantors shall indemnify (schadeloosstellen) and hold harmless (vrijwaren) the Purchaser (or at the sole discretion of the Purchaser the Company) pro rata its Relevant Proportion for an amount of any Tax Liability of WorldACD which (i) relate to, result from or have their origin in any (part of any) period ending on the day before the Effective Date, (ii) relate to, result from or have their origin in any (part of any) period ending on the day before the Completion Date, unless incurred in the ordinary course of business, (iii) relate to any tax claim under section 34 or 35 DCA, and (iv) any reasonable out-of-pocket costs and expenses suffered or incurred by WorldACD or any other member of the Purchaser’s Group in connection with any item referred to in this clause 10.4, or in connection with any reasonable action taken in avoiding, mitigating, resisting or settling any matter or circumstance that would otherwise give rise to a claim under this clause 10.4 (the WorldACD Tax Indemnity).
1.5.The Seller shall indemnify (schadeloosstellen) and hold harmless (vrijwaren) the Purchaser (or at the sole discretion of the Purchaser the Company) for an amount of any Tax Liability of the Company which (i) relate to, result from or have their origin in any (part of any) period ending on the day before the Completion Date, (ii) relate to any tax claim under section 34 or 35 DCA and (iii) any reasonable out-of-pocket costs and expenses suffered or incurred by the Company or any other member of the Purchaser’s Group in connection with any item referred to in this clause 10.5, or in connection with any reasonable action taken in avoiding, mitigating, resisting or settling any matter or circumstance that would otherwise give rise to a claim under this clause 10.5 (the Company Tax Indemnity and collectively with the WorldACD Tax Indemnity the Tax Indemnities).
1.6.The Tax Indemnities shall not cover any Tax Liability to the extent that:
(a)such Tax Liability has been adequately and specifically provided for in the Accounts or the Accounts GdW and the full amount of such provision is available on the Completion Date;
(b)such Tax Liability is taken into account in the Completion Statement as Debt or Net Working Capital;
(c)the Tax Liability would not have arisen but for a voluntary act or omission carried out or effected by the Purchaser or any of the Companies after Completion; or
(d)such Tax Liability arises or is increased solely as a result of a change in the Law or regulation, any judicial or administrative interpretation of the Law or any practice or policy of a regulatory authority (whether or not retrospective in effect) announced after the Completion Date; or
(e)such Warranty Breach arises out of any change after Completion in the accounting policies or practices applied by the Purchaser or the Companies (other than to comply with applicable accounting standards or laws).
1.7.Clause 8.2(a), 8.3(b), 8.5, 8.6, and 8.7 shall apply mutatis mutandis to claims under the Tax Indemnities.
1.8.The disclosure by the Seller and the knowledge of the Purchaser shall not operate to exclude or limit the Seller's and Warrantors’ liability under the Tax Indemnities.
1.9.If WorldACD actually receives any Tax Refund in respect of any period ending on or prior to the Effective Date, to the extent such Tax Refund has not been taken into account in the Accounts, then Purchaser shall promptly notify Seller of such Tax Refund. The Tax Refund shall be paid, by way of an adjustment of the Purchase Price, by Purchaser to the Seller and the Warrantors pro rata their Relevant Proportion within 10 (ten) Business Days of its determination, unless any payment is then due by the Seller and the Warrantors under the WorldACD Tax Indemnity in which case such Tax Refund will be set off against such payment then due, and if and to the extent there is an excess, such excess shall promptly be paid by Purchaser to the Seller and the Warrantors pro rata their Relevant Proportion.
1.10.If the Company actually receives any Tax Refund in respect of any period ending on or prior to the Completion Date, to the extent such Tax Refund has not been taken into account in the Accounts, then Purchaser shall promptly notify Seller of such Tax Refund. It shall be paid, by way of an adjustment of the Purchase Price, by Purchaser to Seller within 10 (ten) Business Days of its determination, unless any payment is then due by Seller under the Company Tax Indemnity in which case such Tax Refund will be set off against such payment then due, and if and to the extent there is an excess, such excess shall promptly be paid by Purchaser to Seller.
1.11.The Seller shall procure that the Companies shall prepare and submit all Tax returns of the Companies to the extent these are required to be filed before the Completion Date (Pre-Completion Tax Return), consistent with past practice (unless otherwise required by Law) and within the relevant time limits. The Purchaser shall
procure that the Companies prepare and submit all Tax returns of the Companies that are not a Pre-Completion Tax Return, consistent with past practice and within the relevant time limits. The Seller and the Purchaser shall provide each other with such information and assistance as they may reasonably require to comply with their respective obligations under this clause 10.11 and shall keep each other fully informed about any correspondence with a Tax Authority relating to the such Tax returns.
1.12.The Seller and the Purchaser shall promptly notify each other in writing and within 10 (ten) Business Days upon receipt of a notice of a Tax Audit which has given or may give rise to a Tax Claim. The Purchaser shall be entitled to elect to control the conduct of any such Tax Audit. The Seller shall control the conduct of any Tax Audit not assumed by the Purchaser. The Parties shall render the other Party such assistance as may reasonably be requested in order to ensure the proper and adequate defence of any such Tax Audit. The Party controlling the conduct of any Tax Audit shall:
(i)take into account all reasonable comments the other Party may have;
(ii)file a pro forma objection (bezwaarschrift) in case the Tax Audit results in a Tax Liability;
(iii)obtain the other Party’s prior written consent (which consent shall not be unreasonable withheld, conditioned or delayed) on any settlement or compromise in relation to such Tax Audit; and
(iv)at all times keep the other Party informed of any developments in the defence of any such Tax Audit and of its intentions as to how to proceed and shall deliver to the other Party copies of all correspondence sent to or received from any Tax Authority in respect of such Tax Audit.
11.SECURITY
Escrow
1.1.As security for the obligations of the Seller under this Agreement:
(a)the Seller and the Purchaser will enter into the Escrow Agreement with the Escrow Agent on the Transfer Date; and
(b)on the Completion Date, an amount equal to EUR 1,500,000 will be transferred by the Notary into the Escrow Account in accordance with the Notary's Letter (the Escrow Amount).
1.2.The Escrow amount will be released as follows:
(a)on the day which is 9 months after the Completion Date, an amount equal to EUR 750,000 less the total amount of Purchaser's outstanding claims against Seller under this Agreement at that time will be released to the Seller in accordance with the terms of the Escrow Agreement;
(b)on the day which is 18 months after the Completion Date, an amount equal to EUR 750,000 less the total amount of Purchaser's outstanding claims against Seller under this Agreement at that time will be released to the Seller in accordance with the terms of the Escrow Agreement; and
(c)the remaining amount (if any) will be released in accordance with the terms of the Escrow Agreement.
1.3.The Purchaser and the Seller shall each promptly give all necessary written instructions to the Escrow Agent to effect a release from the Escrow Account in accordance with this Agreement and the terms of the Escrow Agreement.
1.4.The provisions of the Escrow Agreement and this Agreement in connection with the escrow referred to in this clause 11 shall in no way affect or limit Purchaser's right to bring any claim against Seller in accordance with the terms and conditions of this Agreement.
Capital Maintenance Statement
1.5.As security for the obligations of the Warrantors under this Agreement, each of the Warrantors shall provide the Purchaser with a Capital Maintenance Statement at Closing, duly executed by the Warrantors and their ultimate beneficial owners. The Capital Maintenance Statement will have a duration of 24 months following the Closing Date (Capital Maintenance Period).
1.6.In the event that no claims have been made under this Agreement by the Purchaser before the expiry of the Capital Maintenance Period, the Capital Maintenance Statement shall terminate, in accordance with its terms.
1.7.To the extent that any claims have been made under this Agreement within the Capital Maintenance Period which have not been withdrawn, or paid by the relevant Warrantor, the Capital Maintenance Statement will continue, it being understood that the obligations under it will extend only to the aggregate amount of such claims.
12.NON-COMPETE
1.1.The Seller shall not, directly or indirectly, and shall not via its Affiliates, for a period of three (3) years from Completion:
(a)have an interest in, be engaged in, or be concerned with, or approach any person with a view to obtaining an interest in or being engaged in or concerned with, any business involving the development or production of, or the trading in, any products developed, produced or traded by, or the provision of services developed or provided by, WorldACD (including index services) which is competing with the business as carried out by WorldACD as at the Completion Date or as envisaged to be conducted, developed, produced or traded at such date as evidenced by investments made
prior to the Completion Date, in the geographical area in which WorldACD is currently active, other than passive financial investments of up to 5% in listed companies or in funds;
(b)persuade, cause or attempt to persuade any distributor, commercial agent, employee or independent contractor of, or natural person engaged on the basis of a management or similar agreement by, WorldACD at the Completion Date, to terminate its relationship with WorldACD, or employ or engage any such person within 12 (twelve) months after the effective termination of such person’s relationship with WorldACD;
(c)persuade, cause or attempt to persuade any customer of WorldACD at the Completion Date to terminate its relationship with WorldACD, or take any action that may result in the impairment of such relationship including by seeking to obtain orders from, or offering goods or services competitive to WorldACD to, any person who has been a customer of WorldACD within 12 (twelve) months immediately preceding the Completion Date;
(d)persuade, cause or attempt to persuade any supplier of WorldACD at the Completion Date to terminate its relationship with WorldACD, or take any action that may result in the impairment of such relationship including by soliciting or enticing away from WorldACD any supplier who regularly supplied goods or services to WorldACD within 12 (twelve) months immediately preceding the Completion Date for the purpose of providing competitive goods or services as WorldACD; and/or
(e)persuade, cause or attempt to persuade any other person doing business with WorldACD to terminate its relationship with WorldACD, or take any action that may result in the impairment of such relationship,
other than (i) through WorldACD, (ii) with the prior written approval of the Purchaser or (iii) otherwise for the benefit of WorldACD.
1.2.In the event of any breach by the Seller or any entity as meant in clause 12.1 of any of their obligations under clause 12.1 and without any notice or prior announcement on the part of the Purchaser being required, the Seller shall pay a penalty to the Purchaser of EUR 150,000 for any such breach and, upon receipt of a default notice, a penalty of EUR 25,000 for every day such breach continues. Notwithstanding the foregoing, such penalties shall be payable to the Purchaser without prejudice to the Purchaser's right to seek full compensation for all damages incurred as a result of, or in connection with such breach, and its right to demand performance of this Agreement.
13.CONFIDENTIALITY
13.1.No Party is permitted to make (or to permit any person connected with it to make) any announcement concerning this Agreement, the transaction contemplated by this Agreement or any ancillary matter before, on or after Completion, unless otherwise agreed between the Parties. Each Party shall procure that none of its Representatives shall make any announcement concerning this Agreement, the transaction contemplated by this Agreement or any ancillary matter before, on or after Completion.
13.2.Subject to clause 13.3 and clause 13.4, each of the Parties shall treat as strictly confidential any information received or obtained pursuant to the entering into or performance of this Agreement in connection which the negotiations relating to this Agreement, the business and affairs of the other Parties, any document referred to in this Agreement or the provisions or subject matter of this Agreement.
13.3.Nothing in this clause 13 prevents any announcement being made or any confidential information being disclosed or retained:
(a)with the prior written approval of the other Parties, which in the case of any announcement shall not unreasonably be withheld or delayed; or
(b)to the extent required by law or any competent regulatory body, but a Party required to disclose any confidential information shall promptly notify the other Parties, where practicable and lawful to do so, before disclosure occurs and co-operate with the other Party regarding the timing and content of such disclosure or any action which the other Party may reasonably elect to take to challenge the validity of such requirement; or
(c)as may be necessary in connection with the filing of tax returns or claims for refund or in conducting an audit or other tax proceedings relating to the disclosing party or to comply with any statutory requirements.
13.4.Nothing in this clause 13 prevents disclosure of confidential information by any Party:
(a)to the extent that the information is in or comes into the public domain other than as a result of a breach of any undertaking or duty of confidentiality by that Party or any person connected with it;
(b)to the extent required by law or any competent regulatory body; or
(c)to that Party's professional advisers, auditors or bankers, but before any disclosure to any such person the relevant Party shall procure that the recipient is made aware of the terms of this clause 13 and shall procure that each such person adheres to those terms as if he were bound by the provisions of this clause 13.
14.NOTICES
14.1.Any notice or other formal communication given under this Agreement must be in writing and may be sent by email, delivered in person, or sent by registered post (aangetekende post) to the Party to be served as follows:
(a)if such communication relates to legal proceedings (including a subpoena), to the Seller at:
De Roos Advocaten
Hamerstraat 19-1
1021 JT Amsterdam
E-mail: philip.deroos@deroosadvocaten.nl
for the attention of: Mr. P. de Roos
(b)any other communication to the Seller at:
Mr Gerard de Wit
9 Avenue de l’Horizon 1150 Brussels, Belgium
E-mail: gerarddewit2022@gmail.com
(c)to the Purchaser at:
Shanwick B.V.
E-mail: kdwh@worldacd.com, bva@worldacd.com and dphilp@airt.net
for the attention of: the management board
with a copy to:
Air T, Inc.
5000 W 36th Street, Suite 200
Minneapolis, MN 55416
E-mail: dphilp@airt.net
for the attention of: Mr D. Philp
with a copy to:
JB Law
Vondelstraat 47
1054 GJ Amsterdam
E-mail: malu@jblaw.nl
for the attention of: mr M. Dijkstra,
(d)to Ubi Concordia at:
Ubi Concordia B.V.
Schouwtjeslaan 108
2012 KK Haarlem, the Netherlands
E-mail: kdwh@worldacd.com
with a copy to:
Cleber N.V.
Herengracht 450
1017 CA Amsterdam
E-mail: voorvaart@cleber.nl
for the attention of: mr B. Voorvaart
(e)to Decision Company at:
Decision Company B.V.
Europaplein 103
1079 AW Amsterdam, the Netherlands
E-mail: bva@worldacd.com
with a copy to:
Cleber N.V.
Herengracht 450
1017 CA Amsterdam
E-mail: voorvaart@cleber.nl
for the attention of: mr B. Voorvaart,
or at such other address as the relevant Party may notify to the other Party under this clause 14.
14.2.Any notice or other communication shall be deemed to have been given:
(a)if sent by email, at the time of the confirmation of receipt;
(b) if delivered in person, at the time of delivery; and
(c)if sent by registered post, on the day indicated on the confirmation of receipt.
14.3.In proving the giving of a notice or other formal communication it shall be sufficient to prove that delivery in person was made or that the envelope containing the communication was properly addressed and posted, either by prepaid post or by prepaid airmail as the case may be.
15.COSTS
Save as otherwise provided in this Agreement, each Party shall pay the costs and expenses incurred by it and each person connected to it in connection with the entering into, and Completion of, this Agreement. The fees and costs of the Notary shall be borne by the Purchaser. Seller and Purchaser have agreed that Seller will compensate the Purchaser for part of Purchaser’s cost, said part agreed to be an amount equal to EUR 58,255. Such amount is set off against the (Estimated) Purchase Price A in accordance with clause 4.2.
16.AMENDMENTS
Except as provided otherwise elsewhere in this Agreement, this Agreement can only be amended by means of a written instrument, executed by all Parties.
17.FURTHER ASSURANCES
On or after Completion each of the Parties shall, at its own cost and expense, execute and do (or procure to be executed and done by any other necessary person) all such deeds, documents, acts and things as the other Party may from time to time require in order to give full effect to this Agreement.
18.GENERAL
18.1.Termination of this Agreement shall not affect any rights or liabilities of any Party in respect of any previous breach of this Agreement nor the continued validity of the provisions of clauses 1 (Definitions), 9.1 (Confidentiality), 14 (Notices), 15 (Costs), 16 (Amendments), 18 (General) and 19 (Governing Law and Jurisdiction) and all the other clauses of this Agreement shall lapse (vervallen) and cease to have effect.
18.2.No Party can assign any of its rights or transfer any of its obligations under this Agreement without the prior written consent of the other Party, provided that the Purchaser may assign and/or pledge any and all rights under this Agreement to its financing banks to the extent such financing bank provided financing to the Purchaser to consummate the Transaction.
18.3.Unless explicitly stated otherwise in this Agreement, the Parties waive their rights, if any, to annul, (partly) rescind, (partly) dissolve (ontbinden) or cancel this agreement, or to invoke sections 6:228, 6:230 or 6:265 of the DCC.
18.4.Rights under this Agreement may only be waived in writing and delay in exercising or non-exercise of any rights does not constitute a waiver of that right.
18.5.If a clause or provision of this Agreement becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect the legality, validity or enforceability of any other clause or provision of this Agreement and the Parties shall use their reasonable best endeavours to replace such illegal, invalid or unenforceable clause or provision by a legal, valid and enforceable clause or provision that is as similar as possible to the illegal, invalid or unenforceable clause or provision.
18.6.Except as expressly stated in this Agreement, the terms of this Agreement may be enforced only by a Party to this Agreement. In the event any third party stipulation (derdenbeding) contained in this Agreement is accepted by any third party, such third party will not become a party to this Agreement.
18.7.This Agreement contains the whole agreement between the Parties relating to the subject transactions contemplated by this Agreement and supersedes any and all previous agreements, whether oral or (executed) in writing, between the Parties relating to these transactions.
18.8.This Agreement may be signed in any number of counterparts each of which, when executed by one or more of the Parties, shall constitute an original. Delivery of an executed counterpart of a signature page of this Agreement by PDF file (or other scanned document) sent by email to the Parties or execution of a counterpart via mutually accepted signature software shall be effective as delivery of an original counterpart of this Agreement.
18.9.The language of this Agreement and the transactions envisaged by it is English and all notices and other communications shall be in English unless otherwise agreed. The Parties acknowledge that they fully understand all the provisions of this Agreement.
19.GOVERNING LAW AND JURISDICTION
19.1.This Agreement (including this clause 19) is exclusively governed by, and shall be construed in accordance with, the laws of the Netherlands.
19.2.The Parties irrevocably agree that the courts of Amsterdam, the Netherlands, are to have exclusive jurisdiction to settle any dispute which may arise out of or in connection with this Agreement and that accordingly any proceedings arising out of or in connection with this Agreement shall be brought in such courts. Each of the Parties irrevocably submits to the jurisdiction of such courts and waives any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum.
[signature page follows]
Signature Page
SHARE PURCHASE AGREEMENT
SIGNED on the date stated at the beginning of this Agreement by:
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SHANWICK B.V.
____________________
By: Mr D.C. Philp
Title: solely authorized director
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MR G.P.M. DE WIT
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UBI CONCORDIA B.V.
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By: Mr K.R. Versélewel de Witt Hamer
Title: solely authorized director
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DECISION COMPANY B.V.
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By: Mr A.J. van Asten
Title: solely authorized director
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For agreement to clauses 4.5, 13 (Confidentiality) 14 (Notices), 16 (Amendments), 18 (General) and 19 (Governing Law and Jurisdiction):
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MR A.J. VAN ASTEN
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MR K.R. VERSÉLEWEL DE WITT HAMER
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For agreement to clauses 4.5, 13 (Confidentiality) 14 (Notices), 16 (Amendments), 18 (General) and 19 (Governing Law and Jurisdiction):
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GDW BEHEER B.V.
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By: Mr G.P.M. de Wit
Its: solely authorized director
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Appendix 1Determination of the Purchase Price
Part 1: Determination final Purchase Price
1.Within 60 Business Days after Completion, the Purchaser shall provide the Seller with the following documents:
(i)an unaudited balance sheet of WorldACD reflecting the financial position of WorldACD at the Completion Accounts Date (the Completion Balance Sheet); and
(ii)a written statement setting out the amount of the Cash, Debt and Net Working Capital of WorldACD at the Completion Accounts Date and hence the amount of the Purchase Price A payable (in deviation from the Estimated Purchase Price A, if applicable) and the calculations thereof (the Completion Statement),
all prepared and calculated in accordance with the principles and example calculation as set out in Part 2 and Part 3 of this Appendix 1.
2.The Completion Statement shall be binding upon the Parties, unless the Seller notify the Purchaser within 45 (forty-five) Business Days following delivery to the Seller of the Completion Statement that it disputes any of the line items as included in the Completion Statement. Such notice (a Dispute Notice), shall state at least the following:
(a)the item or items in dispute;
(b)the reasons for such dispute; and
(c)details of the proposed adjustments to the Completion Balance Sheet and to the Purchase Price.
3.If a Dispute Notice is given in accordance with paragraph 2 above, the Parties shall endeavour to agree the Completion Balance Sheet in good faith. Failing such agreement in writing within 30 (thirty) Business Days of receipt of the Dispute Notice (or such later date as may be agreed in writing between the Parties), any item or items which then remain in dispute shall be referred for determination to an independent expert appointed by the Parties acting jointly or, if the Parties cannot agree on such expert, at the joint instruction of the Parties by an independent expert appointed by the president of the Dutch Institute for Registered Valuators (Nederlands Instituut voor Register Valuators) (the Independent Expert). The Independent Expert shall advise on the items included in the Dispute Notice within 30 (thirty) Business Days following his appointment. The decision of the Independent Expert shall, in absence of fraud or manifest error, be final and binding upon the Seller and the Purchaser. The costs of the Independent Expert shall be apportioned between the Seller and the Purchaser, in inverse proportion, as they may prevail on the matters in dispute.
4.Following agreement of the Parties or determination by the Independent Expert pursuant to paragraph 3 above, the Completion Statement shall where applicable be adjusted and be final and binding on the Parties
for the purposes of this Agreement, constituting an agreement between the Purchaser and the Seller on the Completion Statement and the Purchase Price A, and the elements of them.
5.If the Purchase Price as determined in accordance with this Part 1 of this Appendix 1 is:
(a)higher than the Estimated Purchase Price A, the Purchaser shall promptly but no later than 10 (ten) Business Days following determination pay the balance thereof to a bank account designated by the Seller in writing; and
(b)lower than the Estimated Purchase Price A, the Parties shall promptly but no later than 10 (ten) Business Days following determination pay the balance thereof to a bank account designated by the Purchaser in writing.
6.Each Party agrees that it shall provide to the other Party (and its advisors) and to the Independent Expert, all reasonably requested information, documentation, assistance and access to books and records so as to enable the requesting party to exercise its rights under this Appendix 1.
Part 2: Applicable principles and example calculations
7.In preparing the Completion Statement the items and amounts to be included in the calculation of the Cash, Debt and Net Working Capital of WorldACD for the purposes of the Estimated Purchase Price and the Completion Statement shall be identified in accordance with the line items included in the calculation set out below under part 3 of this Appendix 1, and only in the event that any item of Cash, Debt and/or Net Working Capital of WorldACD cannot be identified on the basis of such calculation, the relevant definitions in clause 1 shall be applied thereto.
Part 3: Estimated Purchase Price
8.The Estimated Purchase Price A and hence the Estimated Purchase Price has been calculated as follows, based on the figures of WorldACD at 31 December 2021.
[on the following page]
Appendix 2Warranties
1.Capacity and consequences of sale
1.1The Seller has not been declared bankrupt (failliet verklaard) and has not been granted (preliminary or definitive) moratorium of payment (voorlopige of definitieve surséance van betaling) and no resolutions have been taken and no requests have been made to that effect.
1.2The Seller has the requisite capacity, power and authority to enter into and to perform this Agreement and this Agreement and all other documents to be entered into by the Seller in connection with this Agreement will, when executed, constitute binding obligations on the Seller in accordance with their respective terms.
2.The Companies
2.1Each of the Companies has been duly incorporated and properly formed, is validly existing, is authorised and capable to legally own its assets and to conduct its business as currently conducted, its articles of association are in accordance with all applicable laws and regulations, none of the Companies has been dissolved nor has it been declared bankrupt (failliet verklaard) nor has it been granted (preliminary or definitive) moratorium of payment (voorlopige of definitieve surséance van betaling) or its equivalent in any jurisdiction and no resolutions have been taken and no requests have been made to that effect and to the Seller’s best knowledge there are no circumstances that could otherwise result in dissolution of any of the Companies by any competent court.
2.2No proposal has been made and no resolution has been taken regarding a legal merger (juridische fusie) of any of the Companies with any other person or regarding a legal demerger (juridische splitsing) of any of the Companies, or in respect of the equivalents of a legal merger or legal demerger in any jurisdiction.
3.The Shares
3.1The Shares constitute the entire issued and outstanding share capital of the Company and the shares in WorldACD constitute the whole of the issued and outstanding share capital of WorldACD (the Subsidiary Shares). The Shares and the Subsidiary Shares have been validly issued and are fully paid up, free of further capital contribution obligations.
3.2The Seller is the sole owner of the Shares and the Seller has full power, right and authority to transfer the Shares held by it to the Purchaser and there is no person that is entitled to, or has claimed to be entitled to, require any of the Companies to issue or transfer any Share or Subsidiary Share now or at any future date and whether contingently or not.
3.3There is no Encumbrance on, over or affecting any of the Shares or the Subsidiary Shares, nor is there any commitment to give or create any of the foregoing, and no person has claimed to be entitled to any of the foregoing. There are no outstanding depositary receipts (certificaten) in relation to the Shares or the Subsidiary Shares.
3.4None of the Companies does own any shares, depositary receipts or other securities in any person and is not a party to or member of any other person under the laws of any jurisdiction.
3.5None of the Companies does hold shares in its own capital.
4.Constitutional documents and registration
4.1The copies of the constitutional and corporate documents of each of the Companies which are included in the Disclosed Information are true, accurate and complete in all respects and no resolution has been taken to amend any of these constitutional or corporate documents.
4.2All statutory books and registers of each of the Companies have been properly kept and no notice or allegation that any of them is incorrect or should be rectified has been received and all returns and particulars, resolutions and other documents which the Companies are required by law to file with or deliver to any relevant authority have been correctly made up, duly filed and/or delivered.
5.The Accounts
5.1Each of the Accounts and the Accounts GdW:
(i)have been prepared in accordance with applicable law and regulations;
(ii)present a true and fair view (getrouw beeld) of and contain an understandable and systematic view of the assets and liabilities and the financial position of each of the Companies as at the Accounts Date for the period ended on the Accounts Date;
(iii)contain either provisions adequate to cover, or full particulars in notes of, all Tax (including deferred Tax) and other liabilities (whether quantified, contingent or otherwise) of each of the Companies as at the Accounts Date;
(iv)have been duly filed in accordance with applicable Law;
(v)have been prepared on a basis consistent with the basis, methodologies, principles and practices employed in each of the Companies’ accounts for each of the 3 (three) preceding financial periods without any material change in the accounting basis, methodologies, principles and practices used.
5.2None of the Companies has lent any money which has not been repaid to them nor do they own the benefit of any debt (whether present of future) other than debts accrued to it in the ordinary course of its business.
5.3No dividend, whether in cash or in kind, has been declared or paid by any of the Companies.
5.4All financial and accounting records of each of the Companies are up-to-date and compete, have been properly maintained and prepared and adopted in accordance with law, and where required by Law have been duly filed. Each of the Companies has complied with all statutory accounting requirements.
6.Ownership of assets
6.1Each of the Companies owned at the Accounts Date all the assets included in the Accounts, which in so far as the assets are comprised of equipment perform the tasks for which they are designed and have been properly serviced and maintained.
6.2None of the Companies does hold assets under any agreement for lease, hire, hire-purchase, retention of title or sale on conditional or deferred terms, except to the extent Fairly Disclosed.
6.3None of the property, assets, undertaking, goodwill or uncalled capital of each of the Companies is subject to any Encumbrance or any agreement or commitment to give or create any Encumbrance, and no person has claimed to be entitled to any of the foregoing.
6.4None of the Companies has been a party to a transaction pursuant to or as a result of which an asset owned, purportedly owned or otherwise held by it as at the Accounts Date, is liable to be transferred or re-transferred to another person or which gives or to the best of Seller's knowledge may give rise to a right of compensation or payment in favour of another person under the law of any relevant jurisdiction or country.
6.5The assets owned by each of the Companies together comprise all the assets necessary for the continuation of their businesses as currently conducted.
6.6The receivables of each of the Companies included in the Accounts have realised their nominal amounts plus any accrued interest less any provisions for bad and doubtful debts included in the Accounts.
6.7All receivables of each of the Companies at Completion will to the Seller’s best knowledge in the ordinary course of collection realise, no later than 60 days after Completion, their nominal amounts plus any accrued interest (if any).
7.Operation since Accounts Date
Since the Accounts Date:
(i)each of the Companies has conducted its business in a normal and proper manner;
(ii)there has been no deterioration in the values of any of the assets such that the market value of any asset is less than the value attributed to it in the Accounts and no fixed asset of each of the Companies has been revalued;
(iii)none of the Companies has entered into a commitment outside its ordinary course of business;
(iv)there has been no deterioration in the turnover, financial or trading position or the prospects of each of the Companies;
(v)each of the Companies has paid its creditors within the times agreed with them;
(vi)no asset of a value or price in excess of EUR 50,000 has been acquired or disposed of or agreed to be acquired or disposed of by the Companies on capital account, and no contract involving
expenditure by it on capital account in excess of EUR 50,000 in total has been entered into by the Companies;
(vii)there has been no disposal or acquisition of any asset or supply of any service or business facility of any kind by or to the Companies in circumstances where the consideration actually received or receivable for the disposal, acquisition or supply was less than or exceeds the consideration which could be deemed to have been received for Tax purposes;
(viii)no dividend or other distribution of profits or assets has been or agreed to be declared, made or paid by the Companies, with exception to the Divided Amount;
(ix)no resolution in a general meeting has been passed by the Companies;
(x)no event has occurred which gives rise to Taxation to the Companies on deemed (as opposed to actual) income, profits or gains or which results in the Companies becoming liable to pay or bear a Tax liability directly or primarily chargeable against or attributable to another person; and/or
(xi)no event has occurred which would entitle any third party (with or without the giving of notice) to call for the repayment of indebtedness of the Companies prior to the normal maturity date.
8.Contractual matters
8.1For the purposes of this paragraph 8, the term ‘Material Contracts’ means all current contracts of each of the Companies which have generated, or are expected to generate a contract revenue or have a contractual value in excess of EUR 50,000 per annum and all customer contracts that are expected to generate a contract revenue or have a contractual value in excess of EUR 50,000 per annum.
8.2Copies of all of the Material Contracts are included in the Data Room and such Material Contracts are in force, constitute binding obligations on the parties thereto and have, in all material respects, at all times been complied with by the Company and/or WorldACD and by the counterparties thereto.
8.3No allegation of any breach of any Material Contract has been received by the Company and/or WorldACD and there are no circumstances likely to give rise to any breach of, or default under, any Material Contracts by any party thereto.
8.4No written notice of amendment, termination, rescission (ontbinding), nullification (vernietiging) or invalidation has been received by the Companies, or given by the Companies, in respect of any Material Contract to which the Company and/or WorldACD is/are a party and, to the Seller’s best knowledge, there is no fact or circumstance, including the entering into of this Agreement and the fulfilment of the obligations thereunder, which might invalidate or entitle the other party to terminate, cancel or amend any Material Contract or which might affect any right, claim or obligation of the Company under such Material Contracts.
8.5No written notice of amendment, termination, rescission (ontbinding), nullification (vernietiging) or invalidation has been received by the Companies, or given by the Companies, in respect of any Material Contract to which the Company and/or WorldACD is/are a party.
8.6None of the Companies is or has agreed to become a party to, bound by or liable under any agreement which:
(i)is not on arm’s length commercial terms in the ordinary and usual course of the Companies’ businesses;
(ii)is with a Seller or is an agreement in which a Seller is interested;
(iii)relates to the acquisition of securities of any other entity or the acquisition of the business and/or assets of any other entity or person;
(iv)relates to the sale of securities held by the Companies or sale of the businesses of the Companies (or any part of such business);
(v)involves any agency, distributorship, franchise, consortium collaboration, partnership, joint venture, profit sharing arrangement or kickbacks;
(vi)limits or excludes its right to do business and/or compete in any geographical area or field or with any person;
(vii)is incapable of complete performance by the Company or WorldACD (as applicable) in accordance with its terms within 6 months after the date on which it was entered into; or
(viii)is for the supply by or to it of goods and/or services exclusively to or from any person.
9.Employees
9.1There are no persons holding power of attorney or who are authorised to dispose of any funds of the Companies or to commit or bind the Companies in any way.
9.2The Data Room contains (i) the names and main terms of employment of all employees of each of the Companies (the Employees) (including full particulars of direct and indirect, fixed and variable, remuneration), and details of any loans or advances made to any Employee or former employee, or any guarantees made to or for the benefit of these persons, (ii) particulars of any agreement for the provision of services as an independent contractor to any of each of the Companies, and (iii) particulars of any collective bargaining agreement.
9.3Neither the Companies nor the Seller has made any commitment towards the Employees, as regards a future change to the employment conditions of the Employees, other than in the ordinary course of business.
9.4No bonuses are payable to any employees, directors or officers of any of the Companies and no bonuses will become payable due to the entering into of this Agreement or the fulfilment of the obligations thereunder.
9.5All amounts due by any of the Companies to or in respect of any Employee, or former or prospective employee (including social security contributions, insurances, or other benefits) have been duly paid or discharged on their due dates for payment.
9.6There are no self-employed persons that are being or should have been treated for Tax purposes as employees. None of the Companies is currently retaining any employees through temporary employment agencies.
9.7None of the Companies does qualify, or has applied to qualify as an own-risk bearer (eigenrisicodrager) for the purpose of the Sickness Benefits Act (Ziektewet) or the Work and Income (Capacity for Work) Act (Wet werk en inkomen naar arbeidsvermogen).
9.8There is no Employee that due to illness, injury or other disability is or has been unable to work or has been absent from work for a period longer than 2 (two) consecutive months during the past 12 (twelve) months.
9.9The Companies does not have a works council, nor is there any trade union active within or involved in any of the Companies. The Companies have not received any request to establish a works council.
9.10There are no pending or to the best of Seller's knowledge threatened disputes between any of the Companies and any Employee or former employee or any strikes, lockouts or actions pending by the Employees, and to the Seller’s knowledge there are no facts or circumstances which might give rise thereto.
9.11No Employee or former employee of any of the Companies is or has been a party to any stock appreciation right granted by any of the Companies.
9.12All non-European Employees have a valid working permit and each of the Companies has at all times acted in accordance with the relevant immigration Laws.
10.Pensions
10.1Except pursuant to the pension schemes included in the Disclosed Information, none of the Companies has paid, provided or contributed towards, and is not under any obligation or commitment (whether or not legally enforceable or written or unwritten or of an individual or collective nature) to pay, provide or contribute towards any pension arrangement for or in respect of any present or past employee, director or other officer (or any spouse, child or dependant thereof) of any of the Companies or of any predecessors in business of any of the Companies, including in respect of so called back service obligations.
10.2The pension schemes have at all times been operated in accordance with, and the Companies have observed and performed all their obligations under, the documents relating to the pension schemes, the requirements of the relevant Taxation and other authorities applicable to the pension scheme and all applicable laws and no dispute has arisen or been threatened in connection with the pension schemes.
10.3In relation to the pension schemes, all contributions and other payments due from the participating employers and employees have been paid to the pension scheme.
10.4All current and former (part time and fulltime) employees of any of the Companies, who have entered into an employment contract for an indefinite period, have been granted the opportunity to participate in the pension and other income insurance schemes operated by each of the Companies. All employees not participating in such schemes and their spouses have signed a waiver which is in the possession of any of the Companies.
11.Insurance
11.1Complete and accurate details of all insurance policies taken out for the benefit of each of the Companies has been disclosed to the Purchaser in the Data Room (the Companies’ Insurance Policies).
11.2The Companies’ Insurance Policies are in full force and effect, valid and enforceable. Each of the Companies has at all times complied with the terms of the Companies’ Insurance Policies and have paid all premiums due thereon.
11.3All the assets and undertaking(s) of each of the Companies of an insurable nature are insured in amounts which is market standard or usual for such assets or undertaking(s).
11.4No written notifications have been received with regard to the termination or non-renewal of any insurance policy of any of the Companies or its continuation or renewal on less favourable terms and conditions.
11.5None of the Companies has any outstanding insurance claims and there are no circumstances which haven given or, so far as the Seller is aware, are likely to give rise to any claim or require notification under any of the insurance policies which have not been notified to the relevant insurers.
12.Intellectual property rights
12.1For the purpose of this paragraph 12:
(i)Intellectual Property Rights means any and all right, title and interest in or relating to industrial rights, intellectual property rights, proprietary rights, and/or similar rights, whether protected, created, or arising under the Laws of any jurisdiction or pursuant to any international convention, including all: (i) patents and patent applications, including continuations, divisionals, continuations-in-part, provisionals and patents issuing on any of the foregoing, and all renewals, re-examinations, substitutions, extensions and reissues of any of the foregoing and the inventions covered thereunder; (ii) trademarks, service marks, service names, brand names, trade dress, trade names, logos, corporate names, trade styles, marketing intangibles, and other source or business identifiers and general intangibles of a like nature, and all registrations, applications for registration, renewals and extensions of any of the foregoing; (iii) copyrights and rights in works of authorship, compilations, data, database and design rights, whether or not registered or published, and all registrations, applications for registration, renewals, extensions and reversions of any of the foregoing; (iv) trade secrets, know-how and other confidential or proprietary information; (v) internet domain names and social media accounts; (vi) the right to claim priority or the right to priority in relation to any of the foregoing.
(ii)Companies’ Intellectual Property Rights means all Intellectual Property Rights used or required for the current business activities of any of the Companies.
(iii)Companies’ Intellectual Property Rights Owned means the Intellectual Property Rights that are owned or purported to be owned by any of the Companies as follows from any Disclosed Information or any publicly available information.
12.2The Data Room contains true, accurate and complete details regarding: (i) the registered Companies’ Intellectual Property Rights Owned, (ii) all unregistered Companies’ Intellectual Property Rights Owned that are material for the business activities of any of the Companies, (iii) all contemplated, proposed or pending applications for registrations relating to Companies’ Intellectual Property Rights Owned, (iv) any Companies’ Intellectual Property Rights licensed to any of the Companies (including copies of the agreements pertaining to such licences), and (v) all licences granted by or on behalf of any of the Companies for the use by third parties of Intellectual Property Rights.
12.3Each of the Companies has: (i) full and exclusive right, title and interest to all of the Companies’ Intellectual Property Rights Owned, free of Encumbrances and other third party rights, and not subject to any restrictions in use, disclosure, or assignment of such rights, and (ii) the right to use the Companies’ Intellectual Property Rights other than the Companies’ Intellectual Property Rights Owned pursuant to a valid agreement that is in full force and effect.
12.4The Companies’ Intellectual Property Rights comprise all Intellectual Property Rights necessary for each of the Companies to carry on its business as currently conducted.
12.5The Companies’ Intellectual Property Rights Owned are valid and enforceable, and nothing has been done or omitted that to the best of Sellers' knowledge may prejudice the validity or enforceability of such Companies’ Intellectual Property Rights Owned. There are no claims, proceedings, or orders pending or threatened, seeking to cancel, challenge, or limit the validity, ownership or enforceability of any Companies’ Intellectual Property Rights Owned.
12.6Each of the Companies has taken appropriate measures to protect the Companies’ Intellectual Property Rights Owned. To the extent capable of registration, the Companies have registered all Companies’ Intellectual Property Rights Owned, and nothing has been done or omitted by or on behalf of any of the Companies that is likely to result in any registration becoming subject to cancellation, non-renewal, limitation, challenge, or other adverse modification. To the Seller’s best knowledge, there are no circumstances that may prevent any application for a registration of Companies’ Intellectual Property Rights Owned being granted, it being understood and accepted by Purchaser that Intellectual Property Rights that might have been eligible for patent filing in the past may not be eligible anymore.
12.7Each of the licences relating to Companies’ Intellectual Property Rights (whether the relevant Company is licensee or licensor) (the Intellectual Property Licences) is binding and in full force and effect and are complied with by the parties thereto. None of the Companies has received a notice of termination regarding any of the Intellectual Property Licences and there are no grounds, to the Seller’s best knowledge other than the grounds as Fairly Disclosed to the Purchaser on which any of the Intellectual Property Licences could be terminated by any counterparty to the Intellectual Property Licences.
12.8Each of the Intellectual Property Licences is complied with by the parties thereto in all material respects and to the Seller’s knowledge there are no circumstances likely to give rise to a breach of any Intellectual Property Licence or to any dispute regarding any Intellectual Property Licence.
12.9Other than licence fees to be paid under any Intellectual Property Licence as Fairly Disclosed in the Disclosed Information, the Companies have no financial obligations towards third parties with respect to any Company’s Intellectual Property Rights licensed from third parties.
12.10To Seller’s knowledge, the activities of each of the Companies do not infringe or otherwise violate any third-party Intellectual Property Rights. No claim has been received by any of the Companies or allegation has been made that any of the Companies infringes or otherwise violates any third-party Intellectual Property Rights or is likely to do so. To Seller’s knowledge, no Companies’ Intellectual Property Rights are infringed or otherwise violated by any third party, or are being threatened therewith.
12.11Appropriate, valid and enforceable arrangements are in place to ensure that any Intellectual Property Rights created by Employees, consultants, independent contractors or any other third parties performing work for any of the Companies related to Companies’ Intellectual Property Rights Owned, and which Intellectual Property Rights are used or proposed to be used by any of the Companies, vest in any of the Companies.
13.Computer systems, data and records
13.1All the records and systems (including but not limited to computer systems) and all data and information of the Companies are recorded, stored, maintained and operated or otherwise held exclusively by the Companies (including through the use of the Virtual Private Services hosted and maintained by a reputable third party).
13.2The computer and telecommunication facilities, the software and databases used by the Companies are adequate for operational and business requirements of the Companies and adequate back-up procedures have been implemented and are currently complied with.
13.3Each of the Companies has entered into adequate 24/7 maintenance agreements in respect of all software and hardware owned or used by the Companies.
14.Tax Warranties
14.1All notices, computations and Tax Returns which ought to have been given or made prior to Completion, have been timely, properly and duly submitted by each of the Companies to the relevant Tax Authorities and all information, notices, computations and returns submitted to such authorities are true, accurate and complete and are not the subject of any dispute nor are likely to become the subject of any dispute with such Tax Authorities. All records which each of the Companies is required to keep for Taxation purposes or which would be needed to substantiate any claim made or position taken in relation to Taxation by each of the Companies, have been duly kept and are available for inspection at the premises of each of the Companies.
14.2None of the Companies has asked for any extensions of time for the filing of any tax returns or other documents relating to Taxation other than customary extension in the ordinary course of business.
14.3None of the Companies has, within the statutory limitation period, been subject to or are currently subject to any investigation, audit or visit by any Tax Authority, and to the Seller’s best knowledge the Seller is not aware of any such investigation, audit or visit planned for the next 12 months.
14.4None of the Companies is part of a fiscal unity for CIT and/or VAT purposes.
14.5Each of the Companies has always duly, timely and correctly paid all Tax for which it has been assessed, or which have become due or will become due, or which have arisen or accrued or will arise or accrue with regard to the period up to and including the Completion Date, or, insofar this Tax has not been paid, it has adequately and fully provided for in the Completion Statement.
14.6Each of the Companies has made all withholdings and deductions (including but not limited to any withholding or deduction on payments made or deemed to be made to shareholders, independent contractors or other third parties) in respect of, or in account of, any Tax as it was or is obliged or entitled to make and has properly and duly accounted in full and in a timely manner to the relevant Tax Authority for all amounts so withheld or deducted.
14.7Each of the Companies is and has at all times been exclusively resident for all Tax purposes and subject to Tax the Netherlands only, and has not at any time been resident or had any branch, agency or permanent establishment in any other jurisdiction for any Tax purposes (and no Tax Authority has ever sought to assert the same).
14.8None of the Companies has been a party to or has otherwise been involved in any transaction, scheme or arrangement of which the main purpose or objective (or one of the main purposes or objectives) is to obtain a Tax advantage or which can reasonably be considered as such.
14.9None of the Companies has claimed, utilized or requested exemptions from Tax, roll-over relief, deferrals in relation to Tax or other Tax facilities, including exemptions, roll-over relief, deferrals, or other Tax facilities relating to reorganizations or mergers or made a depreciation, which on or after the Completion Date is still subject to a claw back or reversal provision or any other comparable provision under any applicable law.
14.10All transactions or arrangements involving any of the Companies were affected taking into account the at arm’s length principle. None of the transactions or arrangements involving any of the Companies has or will affect the Tax position of any of the Companies including as a result of any Tax Authority invoking any transfer pricing provision.
14.11There are no self-employed persons or temporary workers who are or at any time have been or should be or have been treated as employee of any of the Companies for Tax purposes and no self-employed person or temporary worker may seek or has ever sought to assert the same.
14.12Each of the Companies has complied in all respects with all statutory requirements, orders, provisions, directions or conditions relating to VAT.
14.13Neither the entry into or becoming unconditional of this Agreement nor Completion will have an adverse impact on the Tax position of any of the Companies (including, but not limited to, any claw back or disallowance of any Relief or allowance previously given).
15.Property
15.1None of the Companies does own any real property.
15.2Each of the Companies is in possession of all lease agreements or similar documents pursuant to which the Company uses or occupies any real property (the Properties).
15.3All Properties are actively used by the Companies in conducting the business as currently conducted.
15.4None of the Companies any right of ownership, right of use, option or contractual obligation to purchase, in relation to any real estate property other than the Properties.
15.5None of the Companies has made any renovation or alteration of any leased Property, other than on the basis of and in accordance with the prior permission or consent of the relevant landlords and/or – to the extent applicable – the relevant Governmental Entities.
15.6Except for timely payment of the rent to the relevant landlord none of the Companies has any liabilities or obligations to any person under any lease agreement for a Property.
15.7Each of the Companies has duly and timely paid the rent due for leased Properties and is not indebted for any costs to the relevant landlord.
15.8All buildings or other erections on each Property are in good repair and in good condition and are in such state of repair and condition as to be substantially fit for the purpose for which they are at present used and do not contain any substance or material which is defective or a risk to health or safety.
15.9Each of the Companies holds all the required permits and licenses and uses the Properties in accordance with any applicable agreement and all applicable laws, regulations, permits, licenses and zoning plans.
15.10None of the Companies has received any notice or order affecting any Property from any authority or any third party and there are no proposals on the part of any authority which would adversely affect any Property, including those relating to compulsory purchase or expropriation or highways works.
15.11None of the Companies has and no other person has disposed of, stored, transported, or emitted any hazardous substance at, on, from or under any Property or at, on, from or under any other place. To the best of the Seller's knowledge, there are no hazardous substances on or in the Properties that must be or will need to be removed under current or pending environmental laws.
16.Compliance with laws
16.1Each of the Companies has at all times, in all material respects, conducted its business in accordance with its constitutional documents and all applicable laws in any jurisdiction in which it carries on its business, and none of the Companies is, or has in the past years been in violation of, or in default with
respect to any court decision, arbitration award, binding advice, or any other order or judgment of any Governmental Entity in which any of the Companies was a party.
16.2None of the Companies nor any of their directors, officers, agents, Employees, or other persons performing services for on their behalf, acting in such capacity or in connection therewith, has done or omitted to do anything which is a contravention of any law, regulation or the requirements of any Governmental Entity giving rise to any fine, penalty, other liability or sanction on the part of any of the Companies and no complaints have been received by the Companies in respect of such matters nor is any of the Companies in default of a court decision, arbitration award, binding advice or any other order or judgment of any Governmental Entity applicable to it or its business.
16.3Each of the Companies has all licences, permits, consents, certificates or other authorisations necessary to conduct its business as currently conducted and complies, and have complied, with all terms and conditions of those licences, permits and certificates in all material respects, each of the permits is in full force and effect and nothing has been or is agreed by this Agreement to be done or omitted to be done which might prejudice the continuation or renewal of any of those licences, permits or certificates or result in any of those licences, permits or certificates being modified.
17.Litigation
17.1None of the Companies is, nor proposing to be, engaged in any claim, litigation, arbitration, mediation, binding advice or other legal proceedings (including administrative, criminal or tax proceedings) and to the Seller’s best knowledge no such claim, litigation, arbitration, mediation, binding advice or other legal proceedings are threatened or pending by or against any of the Companies and to the Seller’s best knowledge there are no circumstances likely to give rise thereto.
17.2None of the Companies is the subject of any regulatory or other investigation, enquiry or action, enforcement proceedings, prosecution regarding any of the Companies or of any of its present or former directors, officer, Employees or other persons performing services for or on behalf of it, or process by any governmental, administrative or regulatory body nor, to the Seller’s knowledge, are there any circumstances which are likely to give rise to any such investigation, enquiry or proceeding, disciplinary action or process.
17.3There are no outstanding obligations under any existing or pending court decision, arbitration award, judgment, award, binding advice or any other judgment of any Governmental Entity in which any of the Companies is or were a party to affecting any of the Companies or its business.
18.Information
18.1All information supplied by the Seller or its Representatives to the Purchaser or its Representatives, including in this Agreement, is, true and fairly represents the condition (financial and otherwise), income, properties, assets, liabilities, operations, contractual relationships, results of operations and prospects of the Companies and the Companies and their businesses as a whole.
18.2To the Seller’s best knowledge, there are no facts, circumstances or matters which are not fully and Fairly Disclosed in the Disclosed Information and which are of such nature and materiality that a professional party similar to the Purchaser, if it had been made aware thereof, could not reasonably be expected to enter into this Agreement on the terms and conditions as set out therein.
Appendix 3Notary Letter
[Attached separately]
Appendix 4Deed of Transfer
[Attached separately]
Appendix 5Reinvestment Documentation
[Attached separately]
Appendix 6Disclosed Information
[USB flash drive containing the data room content separately attached]
Appendix 7
Appendix 8Escrow Agreement
[Attached separately]
Appendix 9Capital Maintenance Statements
[Attached separately]
EXECUTION VERSION
Loan Agreement
between
Air T Acquisition 22.1, LLC
and
Bridgewater Bank
dated as of
February 8, 2022
TABLE OF CONTENTS
Loan Agreement
This Loan Agreement (this “Agreement”), dated as of February 8, 2022, is entered into between Air T Acquisition 22.1, LLC, a Minnesota limited liability company (the “Borrower”), and Bridgewater Bank (the “Lender”).
RECITALS
WHEREAS, the Borrower has requested that the Lender agree to make a term loan to Borrower in the amount of $5,000,000 (the “Term Loan”); and
WHEREAS, the Lender has agreed to make available to the Borrower the Loan upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:
“Acquisition” means the acquisition of all of the outstanding shares of capital stock of Beheer by Shanwick and two managers (“WACD Managers”) of WorldACD pursuant to the Purchase Agreement, such that following the consummation of the Acquisition, Shanwick will own seventy percent (70%) of the issued and outstanding Equity Interests of Beheer and the WACD Managers will own thirty percent (30%) of the issued and outstanding Equity Interests of Beheer.
“Affiliate” as to any Person, means any other Person that, directly or indirectly through one or more intermediaries, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10 or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.
“Anti-terrorism Law” means any Requirement of Law related to money laundering or financing terrorism including the PATRIOT Act, The Currency and Foreign Transactions Reporting Act (31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b), and 1951-1959) (also known as the “Bank Secrecy Act”), the Trading With the Enemy Act (50 U.S.C. § 1 et seq.), and Executive Order 13224 (effective September 24, 2001).
“Asset Sale” means any Disposition of Property or series of related Dispositions of Property (excluding any such Disposition permitted by Section 7.05) that yields gross proceeds to any Loan Party (valued at the principal amount thereof in the case of non-cash proceeds consisting of notes or other debt securities and valued at fair market value in the case of other non-cash proceeds) in excess of $50,000.
“ATF” means Air T Funding, a Delaware statutory trust.
“Bankruptcy Code” means Title 11 of the United States Code, as amended from time to time, or any similar federal or state law for the relief of debtors.
“Beheer” means GDW-BEHEER B.V., a private company with limited liability incorporated under the laws of the Netherlands.
“Blocked Person” means any Person that (a) is publicly identified on the most current list of “Specially Designated Nationals and Blocked Persons” published by the Office of Foreign Assets Control of the US Department of the Treasury (“OFAC”) or resides, is organized or chartered, or has a place of business in a country or territory subject to OFAC sanctions or embargo programs or (b) is publicly identified as prohibited from doing business with the United States under the International Emergency Economic Powers Act, the Trading With the Enemy Act, or any other Requirement of Law.
“Board” means the Board of Governors of the Federal Reserve System of the United States (or any successor thereto).
“Business Day” means a day other than a Saturday, Sunday, or other day on which commercial banks in Minneapolis, Minnesota are authorized or required by law to close.
“Capital Expenditures” with respect to any Person, means the aggregate of all expenditures by such Person for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets, software, or additions to equipment (including replacements, capitalized repairs and improvements) which are required to be capitalized under GAAP on the balance sheet of such Person.
“Capital Lease Obligations” with respect to any Person, means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases under GAAP on the balance sheet of such Person and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“Cash Available for Debt Service” means, for the Measurement Period ending on a Measurement Date, the sum, calculated on a consolidated basis for the Borrower and its Subsidiaries, of: (a) EBITDA, minus (b) all dividends and other distributions paid in cash to Borrower’s members; plus (c) all equity contributions received in cash from Borrower’s members.
“Cash Equivalents” as to any Person, means (a) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition by such Person, (b) time deposits and certificates of deposit of any commercial bank having, or which is the principal banking subsidiary of a bank holding company organized under the laws of the United States, any State thereof, or the District of Columbia having capital, surplus, and undivided profits aggregating in excess of $500,000,000, having maturities of not more than one year from the date of acquisition by such Person, (c) repurchase obligations with a term of not more than 90 days for underlying securities of the types described in clause (a) above entered into with any bank meeting the qualifications specified in clause (b) above, (d) commercial paper issued by any issuer rated at least A-1 by S&P or at least P-1 by Moody's (or carrying an equivalent rating by a nationally recognized rating agency if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally), and in each case maturing not more than one year after the
date of acquisition by such Person, or (e) investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (a) through (d) above.
“Change in Law” means the occurrence after the date of this Agreement of (a) the adoption or effectiveness of any law, rule, regulation, judicial ruling, judgment, or treaty, (b) any change in any law, rule, regulation, or treaty or in the administration, interpretation, implementation, or application by any Governmental Authority of any law, rule, regulation, or treaty, or (c) the making or issuance by any Governmental Authority of any request, rule, guideline, or directive, whether or not having the force of law; provided that, notwithstanding anything herein to the contrary (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended and all requests, rules, guidelines, or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines, or directives concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority), or the United States or foreign regulatory authorities shall, in each case, be deemed to be a “Change in Law,” regardless of the date enacted, adopted, or issued.
“Change of Control” means the occurrence of any of the following: ( Parent shall cease to own 100.00% of the voting Equity Interests of the Borrower; (b) the Guarantor shall cease to have the power to direct Parent’s management policies; (c) the Borrower shall cease to own 70.00% of the voting Equity Interests of Shanwick; (d) Shanwick shall cease to own 100.00% of the voting Equity Interests of WorldACD; or (e) the Borrower shall cease to have the power, directly or indirectly, to control the direction of WorldACD’s management policies.
“Closing Date” means the date on which the conditions precedent set forth in Section 4.01 are satisfied or waived.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral” means any and all Property in which a security interest or Lien is or is required to be granted to secure the Obligations and any and all other Property now existing or hereafter acquired that may be or become subject to a security interest or Lien to secure the Obligations.
“Compliance Certificate” as defined in Section 6.02(a).
“Consolidated Net Income” for any period, means the net income (or loss) of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“Contractual Obligation” of any Person, means 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, other than the Obligations.
“Debt” of any Person at any date, without duplication, means ( all indebtedness of such Person for borrowed money, ( all obligations of such Person for the deferred purchase price of property or services (other than trade payables and accrued expenses incurred in the ordinary course of business and not past due for more than 61 days after the date on which each such trade payable or account payable was created, ( all obligations of such Person evidenced by notes, bonds, debentures, or other similar instruments, ( all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), ( all obligations of such Person to purchase, redeem, retire, defease, or otherwise make any payment in respect of any
Equity Interests in such Person or any other Person or any warrants, rights, or options to acquire such Equity Interests, valued, in the case of redeemable preferred interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, ( all obligations of such Person, contingent or otherwise, as an account party or applicant under acceptance, letter of credit, or similar facilities in respect of obligations of the kind referred to in subsections (a) through (e) of this definition, ( all Guaranty Obligations of such Person in respect of obligations of the kind referred to in subsections (a) through (f) above, ( all obligations of the kind referred to in subsections (a) through (g) above secured by (or which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation; provided that, if such Person has not assumed or become liable for the payment of such obligation, the amount of such Debt shall be limited to the lesser of (i) the principal amount of the obligations being secured and (ii) the fair market value of the encumbered property, and ( all debt of any partnership, unlimited liability company, or unincorporated joint venture in which such Person is a general partner, member, or a joint venturer, respectively (unless such Debt is expressly made non-recourse to such Person).
“Debtor Relief Law” means the Bankruptcy Code and all other liquidation, bankruptcy, assignment for the benefit of creditors, conservatorship, moratorium, receivership, insolvency, rearrangement, reorganization, or similar debtor relief laws of the US or other applicable jurisdictions in effect from time to time.
“Debt Service” means, for any Fiscal Year of the Borrower, the sum, calculated on a consolidated basis for the Borrower and its Subsidiaries, of: (a) the interest expense paid in cash during such Fiscal Year, plus (b) all payments of principal with respect to Indebtedness for Borrowed Money scheduled to have been paid in such Fiscal Year, all determined in accordance with GAAP consistently applied.
“Debt Service Coverage Ratio” means, for the Measurement Period ending on a Measurement Date, the ratio of: (a) Cash Available for Debt Service; divided by (b) Debt Service.
“Default” means any of the events specified in Section 8.01 which constitutes an Event of Default or which, upon the giving of notice, the lapse of time, or both pursuant to Section 8.01 would, unless cured or waived, become an Event of Default.
“Disposition” or “Dispose” means the sale, transfer, license, lease, or other disposition (whether in one transaction or in a series of transactions, and including any sale and leaseback transaction) of any property (including, without limitation, any Equity Interests) 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.
“Dollars” means the lawful currency of the United States.
“EBITDA” means, for the Measurement Period ending on a Measurement Date, the sum, calculated on a consolidated basis for the Borrower and its Subsidiaries in accordance with GAAP, of: (a) Consolidated Net Income (but excluding therefrom all non-operating income (including, without limitation, extra-ordinary, non-recurring or unusual gains) and all non-operating losses (including, without limitation, extra-ordinary, non-recurring or unusual losses)); plus (b) the sum of the following amounts deducted in arriving at net income (but without duplication for any item): (i) interest expense; (ii) depreciation, amortization and other non-cash charges; and (iii) federal, state, and local income taxes.
“Eligible Assignee” has the meaning set forth in Section 9.04.
“Environmental Action” means any action, suit, demand, demand letter, claim, notice of violation or non-compliance, notice of liability or potential liability, investigation, proceeding, consent order, or consent agreement relating in any way to any Environmental Law, any permit issued under any Environmental Law, or any Hazardous Material, or arising from alleged injury or threat to health, safety, or the environment including (a) by any Governmental Authority for enforcement, clean-up, removal, response, remedial or other actions, or damages and (b) any Governmental Authority or third party for damages, contribution, indemnification, cost recovery, compensation, or injunctive relief.
“Environmental Law” means any and all Federal, state, foreign, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority, or other Requirements of Law (including common law) as now or may at any time hereafter be in effect, and any binding judicial or administrative interpretation thereof, including any binding judicial or administrative order, consent decree, or judgment, regulating, relating to, or imposing liability or standards of conduct concerning protection of the environment or, to the extent relating to exposure to substances that are harmful or detrimental to the environment, or human health, or safety.
“Equity Interests” means any and all shares, interests, participations, or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership (or profit) interests in a Person (other than a corporation), securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person, and any and all warrants, rights, or options to purchase any of the foregoing, whether voting or nonvoting, and whether or not such shares, warrants, options, rights, or other interests are authorized or otherwise existing on any date of determination.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” means an entity, whether or not incorporated, that is under common control with the Borrower within the meaning of §4001 of ERISA or is part of a group that includes the Borrower and that is treated as a single employer under §414 of the Code.
“Event of Default” has the meaning set forth in Section 8.01.
“Excluded Foreign Subsidiary” means any Foreign Subsidiary in respect of which either (a) the pledge of all the Equity Interests of such Subsidiary as Collateral or (b) a guarantee by such Subsidiary of the Obligations, would, in the good faith judgment of the Borrower, result in the adverse tax consequences to the Borrower.
“Excluded Taxes” means any of the following Taxes, imposed on or with respect to the Lender (a) Taxes imposed on or measured by net income (however denominated) and franchise Taxes and (b) any branch profits Taxes imposed by the United States or any similar Tax imposed by any other jurisdiction.
“Extraordinary Receipts” means any cash received by or paid to or for the account of any Person not in the ordinary course of business, including, without limitation, tax refunds, pension plan reversions, proceeds of insurance (other than proceeds of business interruption insurance to the extent such proceeds constitute compensation for lost earnings), condemnation awards and similar payments, indemnity payments, and any purchase price adjustment received in connection with any purchase agreement; provided, however, that Extraordinary Receipts shall not include cash receipts from proceeds of insurance, condemnation awards or similar payments,
or indemnity payments to the extent that such funds are received by any Person in respect of any third party claim against such Person and applied to pay (or reimburse such Person for its prior payment of) such claim plus related costs and expenses.
“Fiscal Year” means the period of twelve (12) consecutive months ending on December 31 of each year.
“Foreign Subsidiary” means any Subsidiary of the Borrower that is not a Subsidiary that is organized and existing under the laws of the United States or any state or commonwealth thereof or under the laws of the District of Columbia.
“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.
“Governmental Authority” means the government of any nation or any political subdivision thereof, whether at the national, state, territorial, provincial, municipal, or any other level, 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.
“Guarantor” means Nicholas J. Swenson, a citizen of the United States of America.
“Guaranty” means the Guaranty made by the Guarantor in favor of the Lender, dated as of February 8, 2022, as the same may be amended, amended and restated, supplemented, or otherwise modified from time to time to the extent permitted under the Loan Documents.
“Guaranty Release Date” means the first Business Day of the first month following the date on which (a) no Default or Event of Default shall have occurred and be continuing; (b) the Borrower has provided the Lender with a Compliance Certificate showing that the Borrower has achieved a Debt Service Coverage of not less than 2.00 to 1.00 for the Measurement Period ending on the Measurement Date of such Compliance Certificate; and (c) the outstanding principal balance of the Term Loan is less than fifty percent (50%) of the market value of the Trust Preferred Shares that are pledged to the Lender pursuant to the Stock Pledge Agreement.
“Guaranty Obligation” as to any Person, means any (a) obligation, contingent or otherwise, of such Person guaranteeing or having the effect of guaranteeing any Debt 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 Debt or other obligation, (ii) to purchase or lease property, securities, or services for the purpose of assuring the obligee in respect of such Debt or other obligation of the payment or performance of such Debt or other obligation, (iii) to maintain working capital, equity capital, net worth, or solvency or liquidity, or any level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Debt or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part) or (b) Lien on any assets of such Person securing any Debt or other obligation of any other Person, whether or not such Debt or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Debt to obtain any such Lien). The amount of any Guaranty Obligation 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 Guaranty Obligation 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.
“Hazardous Materials” means (a) any gasoline, petroleum or petroleum products or by-products, radioactive materials, friable asbestos or asbestos-containing materials, urea-formaldehyde insulation, polychlorinated biphenyls, and radon gas and (b) any other chemicals, materials, or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.
“Indebtedness for Borrowed Money” means for any Person (without duplication) (a) all Debt created, assumed or incurred in any manner by such Person representing money borrowed (including by the issuance of debt securities), (b) all indebtedness for the deferred purchase price of property or services (other than trade accounts payable arising in the ordinary course of business which are not more than sixty (60) days past due]), (c) all Debt secured by any Lien upon Property of such Person, whether or not such Person has assumed or become liable for the payment of such indebtedness, (d) all Capitalized Lease Obligations of such Person, and (e) all obligations of such Person on or with respect to letters of credit, bankers’ acceptances and other extensions of credit whether or not representing obligations for borrowed money.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.
“Insolvency” with respect to any Multiemployer Plan, means such Plan is insolvent within the meaning of §4245 of ERISA.
“Intellectual Property” means any and all intellectual property, including copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, technology, know-how, and processes, all rights therein, and all rights to sue at law or in equity for any past, present, or future infringement, violation, misuse, misappropriation, or other impairment thereof, whether arising under United States, multinational, or foreign laws, or otherwise, including the right to receive injunctive relief and all proceeds and damages therefrom.
“Lien” means any mortgage, pledge, hypothecation, assignment (as security), deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest, or any preference, priority, or other security agreement or preferential arrangement of any kind or nature whatsoever having substantially the same economic effect as any of the foregoing (including any conditional sale or other title retention agreement and any capital lease).
“Loan” means the Term Loan.
“Loan Documents” means, collectively, this Agreement, the Security Agreement, the Guaranty, the Term Note, Pledge Agreement, and all other agreements, documents, certificates and instruments executed and delivered to the Lender by any Loan Party in connection therewith.
“Loan Parties” means the Borrower and each Subsidiary of the Borrower that is or becomes a party to a Loan Document.
“Margin Stock” has the meaning specified in Regulation U of the Board as in effect from time to time.
“Material Adverse Effect” means a material adverse effect on (a) the business, assets, properties, liabilities (actual or contingent), operations, condition (financial or otherwise), or
prospects of the Borrower, individually, or the Borrower and its Subsidiaries taken as a whole, (b) the validity or enforceability of any Loan Document, (c) the perfection or priority of any Lien purported to be created by any Loan Document, (d) the rights or remedies of the Lender under any Loan Document, or (e) the ability of any Loan Party to perform any of its material obligations under any Loan Document to which it is a party.
“Material Contracts” with respect to any Person, means each contract to which such Person is a party involving aggregate consideration payable by or to such Person equal to at least 50,000annually or otherwise material to the business, condition (financial or otherwise), operations, performance, properties, or prospects of such Person.
“Maturity Date” means February 8, 2027.
“Measurement Period” means the period of twelve (12) consecutive months ending on a Measurement Date.
“Measurement Date” means the last day of each Fiscal Year of Borrower.
“Moody's” means Moody's Investors Service, Inc., and any successor thereto.
“Multiemployer Plan” means a Plan which is a multiemployer plan as defined in § 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions.
“Net Cash Proceeds” means (a) in connection with any Asset Sale or any Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents in an amount for any Asset Sale or Recovery Event in excess of $50,000 and in the aggregate for all Asset Sales and Recovery Events in any Fiscal Year in excess of $150,000 (including any such proceeds actually received from deferred payments of principal pursuant to a note, a receivable, or otherwise), net of attorneys' fees, accountants' fees, investment banking fees, amounts required to be reserved for indemnification, adjustment of purchase price, or similar obligations pursuant to the agreements governing such Asset Sale, amounts required to be applied to the repayment of Debt secured by a Lien expressly permitted hereunder on any asset that is the subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a Loan Document) and other customary fees and expenses actually incurred in connection therewith and net of taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements) and (b) in connection with any issuance or sale of Equity Interests or any incurrence of Debt, the cash proceeds received from such issuance or incurrence, net of attorneys' fees, investment banking fees, accountants' fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith.
“Obligations” means all advances to, and debts (including principal, interest, fees, costs, and expenses), liabilities, covenants, and indemnities of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising.
“Other Taxes” means any and all present or future stamp, court, recording, filing, intangible, documentary or similar Taxes or any other excise or property Taxes, charges, or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery, or enforcement or registration of, or performance under, or from the receipt or perfection of a security interest under or otherwise with respect to this Agreement or any other Loan Document (other than Excluded Taxes imposed with respect to an assignment).
“Parent” means Air T, Inc., a Delaware corporation.
“Participant” has the meaning set forth in Section 9.03(c).
“Participant Register” has the meaning set forth in Section 9.04(c).
“PATRIOT Act” has the meaning set forth in Section 9.13
“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor thereto).
“Person” means any individual, corporation, limited liability company, trust, joint venture, association, company, limited or general partnership, unincorporated organization, Governmental Authority, or other entity.
“Plan” at any one time, means any “employee benefit plan” that is covered by ERISA and in respect of which the Borrower or an ERISA Affiliate is (or, if such plan were terminated at such time, would under §4062 or §4069 of ERISA be deemed to be) an “employer” as defined in §3(5) of ERISA.
“Pledge Agreement” means the Stock Pledge Agreement made by the Borrower in favor of the Lender, dated as of February 8, 2022, as the same may be amended, amended and restated, supplemented, or otherwise modified from time to time to the extent permitted under the Loan Documents.
“Property” of a Person means all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.
“Purchase Agreement” means the Agreement for the Sale and Purchase of Shares in the Share Capital of Beheer, dated on or about February 8, 2022 by and among Mr. G DeWit, Decision Company B.V., UBI Concordia B.V. and Shanwick (as amended, supplemented, or otherwise modified from time to time).
“Real Properties” has the meaning set forth in Section 5.09(a).
“Recovery Event” means any settlement of or payment to any Loan Party in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of any Loan Party.
“Related Parties” with respect to any Person, means such Person's Affiliates and the directors, officers, employees, partners, agents, trustees, administrators, managers, advisors, and representatives of it and its Affiliates.
“Reorganization” with respect to any Multiemployer Plan, means that such plan is in reorganization within the meaning of §4241 of ERISA.
“Reportable Event” means any of the events set forth in §4043(c) of ERISA, other than those events as to which the thirty-day notice period is waived.
“Requirement of Law” as to any Person, means the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law (including common law), statute, ordinance, treaty, rule, regulation, order, decree, judgment, writ, injunction, settlement agreement, requirement or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Responsible Officer” with respect to any Person, means the chief executive officer, president, or chief financial officer of such Person, except that with respect to financial matters, the Responsible Officer shall be the chief financial officer or treasurer of such Person.
“Restricted Payments” has the meaning set forth in Section 7.07.
“S&P” means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.
“SEC” means the Securities and Exchange Commission (or successors thereto or an analogous Governmental Authority).
“Security Agreement” means the Security Agreement made by the Borrower in favor of the Lender, dated as of February 8, 2022, as the same may be amended, amended and restated, supplemented, or otherwise modified from time to time to the extent permitted under the Loan Documents.
“Shanwick” means Borrower’s Subsidiary, Shanwick B.V., a Netherlands private limited company.
“Single Employer Plan” means any Plan that is covered by Title IV of ERISA, other than a Multiemployer Plan.
“Solvent” with respect to any Person as of any date of determination, means that on such date (a) the present fair salable value of the property and assets of such Person exceeds the debts and liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the property and assets of such Person is greater than the amount that will be required to pay the probable liability of such Person on its debts and other liabilities, including contingent liabilities, as such debts and other liabilities become absolute and matured, (c) such Person does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts and liabilities, including contingent liabilities, beyond its ability to pay such debts and liabilities as they become absolute and matured, and (d) such Person does not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted. 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.
“Subsidiary” as to any Person, means any corporation, partnership, limited liability company, joint venture, trust, or estate of or in which more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class of such corporation may have voting power upon the happening of a contingency), (b) the interest in the capital or profits of such partnership, limited liability company, or joint venture, or (c) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
“Taxes” means any and all present or future income, stamp, or other taxes, levies, imposts, duties, deductions, charges, fees, or withholdings imposed, levied, withheld, or assessed
by any Governmental Authority, together with any interest, additions to tax, or penalties imposed thereon and with respect thereto.
“Term Loan” means the term loan made by the Lender under Section 2.01(a).
“Term Loan Commitment” means the obligation of the Lender to make the Term Loan to the Borrower on the Closing Date in a principal amount not to exceed $5,000,000.
“Term Note” means a promissory note of the Borrower payable to the Lender, in substantially the form of Exhibit A hereto, evidencing the aggregate indebtedness of the Borrower to the Lender resulting from the Term Loan, as the same may be amended, amended and restated, supplemented, or otherwise modified from time to time to the extent permitted under the Loan Documents.
“Termination Date” means the earliest to occur of (a) the Maturity Date and (b) the date on which the maturity of the Loan is accelerated (or deemed accelerated) pursuant to Section 8.02.
“Trust Preferred Shares” means certain preferred securities, issued by ATF, designated the 8.0% Cumulative Capital Securities (also being referred to as the Alpha Income Trust Preferred Securities).
“Uniform Commercial Code” means the Uniform Commercial Code as in effect in the state of Minnesota from time to time.
“WorldACD” means WorldACD Market Data B.V., a private company with limited liability incorporated under the laws of the Netherlands, a wholly-owned Subsidiary of Beheer.
Section 1.02Interpretation. 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 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, Exhibits, and Schedules shall be construed to refer to Articles and Sections of, and 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)Any reference herein or in any other Loan Document to the satisfaction, repayment, or payment in full of the Obligations shall mean the repayment in Dollars in full in cash or immediately available funds (and in the case of any other contingent Obligations, providing cash collateral or other collateral as may be requested by the Lender) of all of the Obligations other than unasserted contingent indemnification Obligations.
(d)All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP as in effect from time to time, and applied on a consistent basis in a manner consistent with that used in preparing the Borrower's audited financial statements, except as otherwise specifically prescribed herein.
ARTICLE II
THE COMMITMENT
Section 2.01Term Loan Commitment.
(a)Subject to the terms and conditions of this Agreement, the Lender agrees to make, in a single advance, a term loan to the Borrower on the Closing Date in an amount not to exceed the Lender's Term Loan Commitment.
(b)Amounts borrowed under this Section 2.01 and repaid or prepaid may not be reborrowed.
Section 2.02Repayment of Term Loan.
(a)The Term Loan shall be evidenced by, and be payable in accordance with the terms of the Term Note. The Lender shall maintain records of the amount of all payments on the Term Note. The outstanding amount of the Term Note set forth on the records of the Lender shall be rebuttable presumptive evidence of the principal amount owing and unpaid on the Term Note.
(b)The Borrower hereby unconditionally promises to pay to the Lender in full in cash, to the extent not previously paid, the then-unpaid principal amount of the Loan on the Maturity Date.
Section 2.03Optional Prepayments. The Borrower may prepay the Term Loan in whole or in part at any time; provided, that, each such prepayment shall be accompanied by any prepayment premium set forth in the Term Note. Any partial prepayment on the Term Loan shall be applied to installments due on the Term Loan in the inverse order of their maturities.
Section 2.04Mandatory Prepayments.
(a)If on any date any Loan Party shall receive Net Cash Proceeds from any Asset Sale or Recovery Event in an amount for any such sale or event in excess of $50,000, then, within five Business Days of the date of receipt by such Loan Party of such Net Cash Proceeds, the Loan shall be prepaid as set forth in Section 2.05(a).
(b)Upon any Extraordinary Receipt received by or paid to or for the account of any Loan Party, and not otherwise included in, Section 2.04(a), the Borrower shall prepay the Loan as set forth in Section 2.05 in an amount equal to 100% of all Net Cash Proceeds received therefrom within five Business Days of the date of receipt thereof by such Loan Party.
Section 2.05Application of Prepayments.
(a)Each prepayment of the Loan under Section 2.04 shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid.
(b)Each prepayment of the Term Loan pursuant to Section 2.04 shall be applied to the installments of the Term Loan in inverse order of maturity.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 3.01Taxes.
(a)Any and all payments by or on account of any obligation of any Loan Party hereunder or under any other Loan Document shall be made free and clear of and without deduction or withholding for any Taxes except as required by applicable law. If any Loan Party is required by applicable law to deduct or withhold any Taxes from such payments, then:
(i)if such Tax is an Indemnified Tax, the amount payable by the applicable Loan Party shall be increased so that after all such required deductions or withholdings are made (including deductions or withholdings applicable to additional amounts payable under this Section), the Lender receives an amount equal to the amount it would have received had no such deduction or withholding been made; and
(ii)the Loan Parties shall make such deductions or withholdings and timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law.
(b)Without limiting the provisions of Section 3.01(a) above, the Loan Parties shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law, unless such Other Taxes are being contested in good faith by any such Loan Party.
(c)The Loan Parties shall indemnify the Lender, within ten days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed on or attributable to amounts payable under this Section) paid or payable by the Lender, on or with respect to an amount payable by any Loan Party under or in respect of this Agreement or under any other Loan Document, together with any reasonable expenses arising in connection therewith and with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate from the Lender as to the amount of such payment or liability delivered to the Borrower shall be conclusive absent manifest error.
(d)As soon as practicable after Lender’s written request, following payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 3.01,
such Loan Party shall deliver to the Lender the original or certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the relevant return reporting such payment or other evidence of such payment reasonably satisfactory to the Lender.
(e)If the Lender determines, in its reasonable discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by any Loan Party or with respect to which any Loan Party has paid additional amounts pursuant to this Section, it shall pay over such refund (or the amount of any credit in lieu of refund) to the applicable Loan Party (but only to the extent of indemnity payments made, or additional amounts paid, by the applicable Loan Party under this Section with respect to the Taxes giving rise to such refund or credit in lieu of refund), net of all reasonable out-of-pocket expenses of the Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund or credit in lieu of refund); provided that, the applicable Loan Party, upon the request of the Lender, agrees to repay the amount paid over to the applicable Loan Party (plus any interest, penalties or other charges imposed by the relevant Governmental Authority) to the Lender in the event the Lender is required to repay such refund or credit in lieu of refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (e), in no event will the Lender be required to pay any amount to the applicable Loan Party pursuant to this paragraph if the payment of such amount would place the Lender in a less favorable net after-Tax position than it would have been in if the Tax subject to indemnification had not been deducted, withheld, or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. Nothing in this paragraph (e) shall be construed to require the 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.
Section 3.02Increased Costs; Capital Adequacy Requirements.
(a)If any Change in Law shall:
(i)impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge, or similar requirement against assets of, deposits with, or for the account of, or credit extended or participated in by, the Lender;
(ii)subject the Lender to any Taxes (other than Indemnified Taxes) on its loans, commitments, or other obligations, or its deposits, reserves, other liabilities, or capital attributable thereto; or
(iii)impose on the Lender any other condition, cost or expense (other than Taxes) affecting this Agreement,
and the result of any of the foregoing shall be to reduce the amount of any sum received or receivable by the Lender hereunder (whether of principal, interest, or any other amount) then, upon request of the Lender, the Borrower will pay to the Lender such additional amount or amounts as will compensate the Lender for such additional costs incurred or reduction suffered.
(b)If the Lender reasonably determines that any Change in Law affecting the Lender or the Lender's holding company (if any), regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on the Lender's capital or on the capital of the Lender's holding company, if any, as a consequence of this
Agreement, or the Loan, to a level below that which the Lender or the Lender's holding company could have achieved but for such Change in Law (taking into consideration the Lender's policies and the policies of the Lender's holding company with respect to capital adequacy), then from time to time after receipt of the certificate delivered by Lender pursuant to Section 3.01(c), the Borrower will pay to the Lender such additional amount or amounts as will compensate the Lender or the Lender's holding company for any such reduction suffered.
(c)A certificate from the Lender setting forth the amount or amounts necessary to compensate it or its holding company, 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 the Lender the amount shown as due on any such certificate within 10 days after receipt thereof.
(d)Failure or delay on the part of the Lender to demand compensation pursuant to this Section shall not constitute a waiver of the Lender's right to demand such compensation; provided that, the Borrower shall not be required to compensate the Lender pursuant to this Section for any increased costs incurred or reductions suffered more than 270 days prior to the date that the Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of the 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 270 day period referred to above shall be extended to include the period of such retroactive effect).
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01Conditions Precedent to Initial Loans. The obligation of the Lender to make the Term Loan requested to be made by it hereunder is subject to the satisfaction or the waiver by the Lender of the following conditions precedent:
(a)The Lender shall have received:
(i)this Agreement, duly executed and delivered by an authorized officer of the Borrower; and
(ii)the Security Agreement, the Pledge Agreement, and the Guaranty, in each case executed and delivered by the Loan Parties party thereto;
(iii)a closing certificate, in the form provided by Lender, duly executed by Borrower;
(iv)share certificates for the Trust Preferred Shares that are pledged to the Lender as Collateral for the Obligations pursuant to the Pledge Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the Borrower; and
(v)a fully-executed copy of the Purchase Agreement and all schedules and exhibits thereto;
(b)the initial capitalization of the Borrower, by the contribution by Parent of Trust Preferred Shares with a market value of not less than $5,000,000 and Cash Equivalents in the amount of not less than $5,832,535;
(c)The Lender shall have received satisfactory projections of the Borrower through the Maturity Date;
(d)All governmental and third party approvals necessary in connection with the Acquisition, the continuing operations of the Loan Parties and their Subsidiaries, and the transaction contemplated hereby shall have been obtained and be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent, or otherwise impose materially adverse conditions on the Acquisition or the financing contemplated hereby;
(e)The Lender shall have received results of a recent lien search in each of the jurisdictions where the Loan Parties are organized and the assets of the Loan Parties are located, and such searches confirm the priority of the Liens in favor of the Lender and reveal no liens on any of the assets of the Loan Parties, except for liens permitted under this Agreement;
(f)The Lender shall have received payment, in immediately available funds of a non-refundable origination fee in the amount of $25,000 and all other fees required to be paid, and all expenses for which invoices have been presented (including the fees and expenses of legal counsel), on or before the Closing Date.
(g)The Lender shall have received, in form and substance reasonably satisfactory to it, a certificate of each Loan Party, certified by a secretary of such Loan Party, dated the Closing Date, including:
(i)a certificate of formation, organization, or incorporation, as applicable, of each Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party;
(ii)by-laws, operating agreements, and partnership agreements, as applicable, for each Loan Party as in effect on the date on which the resolutions referred to below were adopted;
(iii)resolutions of the governing body of each Loan Party approving the transaction and each Loan Document to which it is or is to be a party, and of all documents evidencing other necessary corporate, partnership, or limited liability company action;
(iv)a certification that the names, titles, and signatures of the officers of each Loan Party authorized to sign each Loan Document to which it is or is to be a party and other documents to be delivered hereunder and thereunder are true and correct;
(v)a long-form good standing certificate for each Loan Party from its jurisdiction of organization; and
(vi)a good standing certificate for each Loan Party from each state where it is qualified to do business;
(h)The Lender shall have received the legal opinion of Winthrop & Weinstine, counsel to the Borrower and its Subsidiaries, in form and substance acceptable to the Lender;
(i)The Lender shall have received reasonably satisfactory evidence that each document (including any Uniform Commercial Code financing statement and appropriate filings with the United States Patent and Trademark Office or United States Copyright Office) required by the Loan Documents or any Requirement of Law or reasonably requested by the Lender to be filed, registered, or recorded in order to create in favor of the Lender a perfected first priority Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted under this Agreement), shall have been properly filed (or provided to the Lender) or executed and delivered in each jurisdiction;
(j)The Lender shall have received evidence of insurance coverage in form, scope and substance satisfactory to the Lender and otherwise in compliance with the terms of Section 5.10 and Section 6.06 of this Agreement; and
(k)The Lender shall have received, at least three (3) Business Days prior to the Closing Date, (i) all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act, and (ii) to the extent the Borrower qualifies as a “legal entity customer” under 31 C.F.R. § 1010.230 (the “Beneficial Ownership Regulation”), a customary FinCEN beneficial ownership certification in relation to the Borrower, in each case requested at least ten Business Days prior to the Closing Date.
Section 4.02Conditions Precedent to the Loan. The obligation of the Lender to make the Loan requested to be made by it hereunder (including, without limitation, its initial Loan), is subject to the satisfaction or the waiver by the Lender of the following conditions precedent:
(a)Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects (or, as to any representation and warranty that is qualified by materiality or Material Adverse Effect, in all respects) on and as of the date the Loan is made as if made on and as of such date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects (or, as to any representation and warranty that is qualified by materiality or Material Adverse Effect, in all respects) on such earlier date; and
(b)No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Loan requested to be made on such date.
Each borrowing by the Borrower hereunder shall constitute a representation and warranty by the Borrower, as of the date the Loan is made, that the conditions contained in this Article IV have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement and to make the Loan hereunder, the Borrower hereby represents and warrants to the Lender that:
Section 5.02Existence; Compliance With Laws. The Borrower (a) is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its formation, (b) is duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction where its ownership, lease, or operation of property or the conduct of its
business requires such qualification except to the extent that the failure to qualify in such jurisdiction would not reasonably be expected to have a Material Adverse Effect, and (c) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.02Power; Authorization; Enforceability.
(a)Each Loan Party has the power and authority, and the legal right, to own or lease and operate its property, and to carry on its business as now conducted and as proposed to be conducted, and to execute, deliver, and perform the Loan Documents to which it is a party and, in the case of the Borrower, to obtain the Loan hereunder. The Borrower has taken all necessary organizational action to authorize the execution, delivery, and performance of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the borrowing of Loan on the terms and conditions contained herein. No consent or authorization of, filing with, notice to, or other act by, or in respect of, any Governmental Authority or any other Person is required in connection with the extensions of credit hereunder or with the execution, delivery, performance, validity, or enforceability of this Agreement or any of the Loan Documents. Each Loan Document has been duly executed and delivered by each Loan Party party thereto.
(b)This Agreement constitutes, and each other Loan Document when delivered hereunder will constitute, a legal, valid, and binding obligation of each Loan Party party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
Section 5.03No Contravention. The execution, delivery, and performance of this Agreement and the other Loan Documents, the borrowing of Loan hereunder, and the use of the proceeds thereof will not violate any Requirement of Law or any Contractual Obligation of any Loan Party and will not result in, or require, the creation or imposition of any Lien on any of their respective properties or assets pursuant to any Requirement of Law or any such Contractual Obligation (other than the Liens created by the Loan Documents). No Requirement of Law or Contractual Obligation applicable to any Loan Party would reasonably be expected to have a Material Adverse Effect.
Section 5.04Financial Statements.
(a)The audited consolidated balance sheets of the Parent and its Subsidiaries as at March 31, 2020, and the related consolidated statements of income and of cash flows for the Fiscal Year ended on such date, accompanied by an unqualified opinion from Deloitte & Touche LLP, independent public accountants, present fairly the consolidated financial condition of Parent and its Subsidiaries as at such date, and the consolidated results of their operations and their consolidated cash flows for the Fiscal Year then ended, in accordance with GAAP.
(b)The unaudited consolidated balance sheets of Parent and its Subsidiaries as at September 30, 2021, and the related unaudited consolidated statements of income and of cash flows for the six-month period ended on such date, duly certified by the chief financial officer of Parent, present fairly the consolidated financial condition of Parent and its Subsidiaries as at such date, and the consolidated results of their operations and their consolidated cash flows for the six-month period then ended, in accordance with GAAP (subject to normal year-end audit adjustments and the absence of footnotes).
Section 5.05No Material Adverse Effect. Since September 30, 2021, no development or event has occurred that has had or would reasonably be expected to have a Material Adverse Effect.
Section 5.06No Litigation. No action, suit, litigation, investigation, or proceeding of or before any arbitrator or Governmental Authority is pending or threatened by or against any Loan Party or against any of its property or assets (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby or (b) that would reasonably be expected to have a Material Adverse Effect.
Section 5.07No Default. No Default or Event of Default has occurred and is continuing and no default has occurred and is continuing under or with respect to any Contractual Obligation of the Borrower or any of its Subsidiaries that would reasonably be expected to have a Material Adverse Effect.
Section 5.08Ownership of Property; Liens. The Borrower has fee simple title to, or a valid leasehold interest in, all its real property, and good title to, or a valid leasehold interest in, all its other property, and none of such property is subject to any Lien except as permitted by Section 7.02.
Section 5.09Environmental Matters. Except as, in the aggregate, would not reasonably be expected to have a Material Adverse Effect, to the knowledge of the Borrower:
(a)none of the facilities or properties owned, leased, or operated by any Loan Party (the “Real Properties”) contain or previously contained, any Hazardous Materials in amounts or concentrations or under circumstances that constitute or constituted a violation of, or could result in liability under, any Environmental Law;
(b)no Loan Party has received any notice of actual or alleged violation, non-compliance, or liability regarding compliance with Environmental Laws or other environmental matters or with respect to any of the Real Properties or the business operated by any Loan Party, nor is there any reason to believe that any such notice will be received or is being threatened;
(c)the Real Properties and all operations at the Real Properties are in compliance with all applicable Environmental Laws, and there is no contamination at, under, or about the Real Properties or violation of any Environmental Law with respect to the Real Properties or the business operated by any Loan Party;
(d)Hazardous Materials have not been transported or disposed of from the Real Properties in violation of, or in a manner or to a location that could result in liability under, any Environmental Law; no Hazardous Materials have been generated, treated, stored, or disposed of at, on or under any of the Real Properties in violation of, or in a manner that could result in liability under, any applicable Environmental Law; and there has been no release or threat of release of Hazardous Materials at or from the Real Properties, or arising from or related to the operations of any Loan Party in connection with the Real Properties or the business operated by any Loan Party, in violation of or in amounts or in a manner that could result in liability under Environmental Laws;
(e)no administrative or governmental action or judicial proceeding is pending or, to the knowledge of the Borrower, threatened, under any Environmental Law to which any Loan Party is or will be a party with respect to the Real Properties or the business operated by any Loan Party, nor are there any decrees or orders or other administrative or
judicial requirements outstanding under any Environmental Law with respect to the Real Properties or the business operated by any Loan Party; and
(f)no Loan Party has assumed any liability of any other Person under Environmental Laws.
Section 5.10Insurance. The properties of the Loan Parties are insured with financially sound and reputable insurance companies, 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 applicable Loan Party operates. Each insurance policy is in full force and effect and all premiums in respect thereof that are due and payable have been paid.
Section 5.11Material Contracts. The Borrower has delivered true, correct, and complete copies of such Material Contracts to the Lender on or before the Closing Date. The Borrower is not in breach or in default in any material respect of or under any Material Contract and has not received any notice of the intention of any other party thereto to terminate any Material Contract.
Section 5.12Intellectual Property. Each Loan Party owns, or is licensed to use, all Intellectual Property necessary for the conduct of its business as currently conducted or proposed to be conducted. No material claim has been asserted and is pending by any Person challenging the use, validity, or effectiveness of any Intellectual Property, nor is the Borrower aware of any valid basis for any such claim. The use of Intellectual Property by each Loan Party does not materially infringe on the rights of any Person.
Section 5.13Taxes. Each Loan Party has filed all Federal, state, and other material tax returns that are required to be filed and has paid all taxes shown thereon to be due, together with applicable interest and penalties, and all other material taxes, fees, or other charges imposed on it or any of its property by any Governmental Authority[ (except those that are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the relevant Loan Party). No Loan Party is a party to any tax sharing agreement.
Section 5.14ERISA. Each Plan is in compliance with ERISA, the Code and any Requirement of Law in all material respects; neither a Reportable Event nor an “accumulated funding deficiency” (within the meaning of §412 or §430 of the Code or §302 of ERISA) has occurred (or is reasonably likely to occur) with respect to any Plan. No Single Employer Plan has terminated, and no Lien has been incurred in favor of the PBGC or a Plan. Based on the assumptions used to fund each Single Employer Plan, the present value of all accrued benefits under each such Plan did not materially exceed the value of the assets of such Plan allocable to such accrued benefit as of the last annual valuation date prior to the date on which this representation is made. Neither any Loan Party nor any ERISA Affiliate has incurred or is reasonably expected to incur any Withdrawal Liability that would reasonably be expected to result in a material liability under ERISA, in connection with any Multiemployer Plan. No such Multiemployer Plan is (or is reasonably expected to be) terminated, in Reorganization, or insolvent (within the meaning of §4245 of ERISA).
Section 5.15Margin Regulations. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Loan will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock.
Section 5.16Investment Company Act. No Loan Party is or is required to be registered as an “investment company” under the Investment Company Act of 1940, as amended.
Section 5.17 Subsidiaries; Equity Interests.
(a)Shanwick is the Borrower’s only Subsidiary;
(b)The Borrower owns seventy percent (70%) of Shanwick’s issued and outstanding Equity Interests, free and clear of all Liens except those created under the Loan Documents;
(c)there are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments (other than stock options granted to employees or directors and directors' qualifying shares) relating to any Equity Interest of the Borrower or Shanwick, except as created by the Loan Documents.
(d)Other than its ownership interest in Shanwick, the Borrower has no equity investments in any other corporation or entity.
Section 5.18Labor Matters. Except as, in the aggregate, would not reasonably be expected to have a Material Adverse Effect (a) there are no strikes, lockouts, or other labor disputes pending or, to the knowledge of the Borrower, threatened against any Loan Party, (b) hours worked by and wages paid to employees of each Loan Party have not violated the Fair Labor Standards Act or any other applicable Requirement of Law, and (c) all payments due in respect of employee health and welfare insurance from any Loan Party have been paid or properly accrued on the books of the relevant Loan Party.
Section 5.19Accuracy of Information, Etc. The Borrower has disclosed to the Lender 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, would reasonably be expected to have a Material Adverse Effect. No statement or information contained in this Agreement, any other Loan Document, or any other document, certificate, or statement furnished by or on behalf of the Borrower to the Lender, for use in connection with the transactions contemplated by this Agreement or the other Loan Documents, contained as of the date such statement, information, document, or certificate was so furnished, any untrue statement of a material fact or omitted to state a material fact necessary to make the statement contained herein or therein not misleading. The projections included in such materials are based upon good faith estimates and assumptions believed by the Borrower to be reasonable at the time made; it being recognized by the Lender that such projections as to future events are not to be viewed as fact and that actual results during the period or periods covered by the projections may differ from such projected results and such differences may be material.
Section 5.20Security Documents.
(a)The Security Agreement creates in favor of the Lender a legal, valid, continuing, and enforceable security interest in the Collateral described therein, the enforceability of which is subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. Upon the filing of a UCC1 financing statement naming the Borrower as debtor and Lender as secured party with the Minnesota Secretary of State and/or the obtaining of “control” (as defined in the Uniform Commercial Code), the Lender will have a perfected Lien on, and security interest in, to and under all right, title and interest of the grantors thereunder in all Collateral that may be perfected by filing, recording or registering a
financing statement or analogous document (including without limitation the proceeds of such Collateral subject to the limitations relating to such proceeds in the Uniform Commercial Code) or by obtaining control, under the Uniform Commercial Code (in effect on the date this representation is made) in each case prior and superior in right to any other Person, except for Liens permitted under Section 7.02.
(b)The Pledge Agreement creates in favor of the Lender a legal, valid, continuing, and enforceable security interest in the Collateral described therein, the enforceability of which is subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. The Lender has, by taking possession, perfected its first priority Lien in the Trust Preferred Shares.
Section 1.21Solvency. Each Loan Party is, and after giving effect to the incurrence of all Debt and obligations incurred in connection herewith will be, Solvent.
Section 1.22PATRIOT Act; OFAC and Other Regulations.
(a)No Loan Party, any of its Subsidiaries, or any of the Affiliates or respective officers, directors, brokers or agents of such Loan Party, Subsidiary, or Affiliate:
(i)has violated any Anti-terrorism Laws; or
(ii)has engaged in any transaction, investment, undertaking, or activity that conceals the identity, source, or destination of the proceeds from any category of prohibited offenses designated by the Organization for Economic Co-operation and Development's Financial Action Task Force on Money Laundering.
(b) No Loan Party, any of its Subsidiaries, or any of the Affiliates or respective officers, directors, brokers, or agents of such Loan Party, Subsidiary, or Affiliate that is acting or benefiting in any capacity in connection with the Loan is a Blocked Person.
(c)No Loan Party, any of its Subsidiaries, or any of the Affiliates or respective officers, directors, brokers, or agents of such Loan Party, Subsidiary, or Affiliate acting or benefiting in any capacity in connection with the Loan:
(i)conducts any business or engages in making or receiving any contribution of goods, services, or money to or for the benefit of any Blocked Person;
(ii)deals in, or otherwise engages in any transaction related to, any property or interests in property blocked pursuant to any Anti-terrorism Law; or
(iii)engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-terrorism Law.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Loan or any other amounts payable to the Lender hereunder or under any other Loan Document have not been paid in full, the Borrower shall, and shall cause its Subsidiaries to (except that, in the case of the covenants set forth in Section 6.01, Section 6.02, and Section 6.03, the Borrower shall furnish all applicable materials to the Lender):
Section 6.01Financial Statements. Furnish to the Lender, or, in the case of Section 6.01(f) and Section 6.01(g) below, cause the Guarantor to furnish to the Lender:
(a)As soon as available, but in any event within thirty (30) days after the end of each Fiscal Year of the Borrower, a copy of the annual financial statements of the Borrower and its Subsidiaries for such year prepared in conformity with GAAP, including a copy of the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such year and the related consolidated statements of income and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year; certified by a Responsible Officer as being fairly stated in all material respects;
(b)As soon as available, but in any event not later than forty five (45) days after the end of each quarter of each Fiscal Year of the Borrower, the unaudited consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of income and of cash flows prepared in conformity with GAAP for such quarter and the portion of the Fiscal Year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year, certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments);
(c)As soon as available, but in any event not later than forty five (45) days after the end of each quarter of each Fiscal Year of WorldACD, the unaudited balance sheet of WorldACD, as at the end of such quarter and the related unaudited consolidated statements of income and of cash flows for such quarter and the portion of the Fiscal Year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year, certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments), such financial statements to be denominated in U.S. Dollars;
(d)as soon as available and, in any event, by not later than the earlier of (i) thirty (30) days after the date of filing or (ii) October 25 of each year, copies of the federal income tax returns (with all supporting schedules) of Borrower;
(e)As soon as available, but in any event within one hundred twenty (120) days after the end of each Fiscal Year of Parent, a copy of the annual audit report of Parent and its Subsidiaries for such year including a copy of the audited consolidated balance sheet of Parent and its Subsidiaries as at the end of such year and the related audited consolidated statements of income and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year, together with an opinion as to such audit report of Deloitte, LLP or other independent certified public accountants of nationally recognized standing which does not contain a “going concern” or similar qualification or exception, or qualification arising out of the scope of the audit, together with related consolidating financial statements;
(f)by not later than sixty (60) days after the anniversary date of the previous personal financial statement provided to the Lender by the Guarantor, updated and complete personal financial statements for Guarantor on the form previously submitted to the Lender or such other form as may be acceptable to Lender; and
(g)as soon as available and, in any event, by not later than the earlier of (A) thirty (30) days after the date of filing or (B) October 25 of each year, certified copies of the federal and state income tax return of Guarantor, including K-1s and all other schedules and exhibits thereto.
All such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail.
Section 6.02Certificates; Other Information. The Borrower shall furnish the following to the Lender:
(a)On the same dates as delivery of the quarterly or annual financial statements in Section 6.01(a) and Section 6.01(b) a compliance certificate in the form provided by Lender (a “Compliance Certificate”) signed by a Responsible Officer of the Borrower (i) containing all information and calculations necessary for determining compliance by the Loan Parties with the provisions of this Agreement as of the last day of the fiscal quarter or Fiscal Year of the Borrower, as the case may be and (ii) stating that to the best of such Responsible Officer's knowledge, each Loan Party during such period has observed and performed all of the covenants and other agreements, and satisfied every condition contained in this Agreement and the other Loan Documents to which it is a party to be observed, performed, or satisfied by it, and that such officer has not obtained any knowledge of any Default or Event of Default except as specified in such certificate;
(b)Promptly, and in any event within thirty (30) days thereafter, to the extent not previously disclosed to the Lender, a description of any change in the jurisdiction of organization of any Loan Party;
(c)Promptly after the same are sent, copies of all proxy statements, financial statements, and reports that any Loan Party sends to any of its securities holders, and copies of all reports and registration statements that any Loan Party files with the SEC or any national securities exchange;
(d)Promptly after the same are sent, copies of any statement or report sent to any holder of debt securities of any Loan Party pursuant to the terms of any indenture, loan agreement, or similar agreement and not otherwise required to be furnished to the Lender pursuant to any other clause of this Section;
(e)Promptly upon receipt of the same, copies of all notices, requests, and other documents received by any Loan Party under or pursuant to any Material Contract or instrument, indenture, or loan agreement regarding or related to any breach or default by any party thereto or any other event that would materially impair the value of the interests or the rights of any Loan Party or otherwise have a Material Adverse Effect, and such information and reports regarding Material Contracts and such instruments, indentures, and loan agreements as the Lender may reasonably request from time to time;
(f)As soon as available, and in any event within thirty (30) days after the end of each Fiscal Year, a report summarizing the insurance coverage (specifying type, amount, and carrier) in effect for the Loan Parties and containing such additional information as the Lender may reasonably specify; and
(g)Such other information respecting the business, condition (financial or otherwise), operations, performance, Property, or prospects of any Loan Party as the Lender may from time to time reasonably request.
Section 6.03Notices. Promptly, and in any event within five (5) Business Days, give notice to the Lender of:
(a)The occurrence of any Default or Event of Default;
(b)Any (i) default or event of default under any Material Contract of any Loan Party or (ii) litigation, investigation, or proceeding that may exist at any time between any Loan Party and any Governmental Authority, that in either case, if not cured or if adversely determined, as the case may be, would reasonably be expected to have a Material Adverse Effect;
(c)Any litigation or proceeding against any Loan Party (i) in which the amount involved is at least $100,000 and not covered in full by insurance, (ii) in which injunctive or similar relief is sought, or (iii) which relates to any Loan Document;
(d)The following events, as soon as possible and in any event within thirty (30) days after the Borrower or any of its ERISA Affiliates knows or has reason to know thereof:
(i)the occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Plan, the creation of any Lien in favor of the PBGC or any Multiemployer Plan; or
(ii)the institution of proceedings or the taking of any other action by the PBGC or the Borrower or any ERISA Affiliate or any Multiemployer Plan with respect to the withdrawal from, or the termination, Reorganization, or Insolvency of, any Plan;
(e)The occurrence of any Environmental Action against or of any noncompliance by any Loan Party with any Environmental Law or relevant permit that would reasonably be expected to have a Material Adverse Effect; and
(f)Any development or event that has had or would reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.03 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 relevant Loan Party proposes to take with respect thereto.
Section 6.04Maintenance of Existence; Compliance.
(a)(i) Preserve, renew, and maintain in full force and effect its corporate or organizational existence and (ii) take all reasonable action to maintain all rights, privileges, and franchises necessary or desirable in the normal conduct of its business, except, in each case, as otherwise permitted under this Agreement and except, as in the case of clause (ii) above, to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect.
(b)Comply with all Contractual Obligations and Requirements of Law.
Section 6.06Performance of Material Contracts. Perform and observe all the terms and provisions of each Material Contract to be performed or observed by it, maintain each 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
Lender and, upon request of the Lender, make to each other party to each 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, except, in any case, where the failure to do so, either individually or in the aggregate, would not be reasonably likely to have Material Adverse Effect.
Section 6.06Maintenance of Property; Insurance.
(a)Maintain and preserve all of its property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted.
(b)Maintain insurance with respect to its property and business (including without limitation, property and casualty insurance) with financially sound and reputable insurance companies that are not Affiliates of the Borrower, in such amounts and covering such risks as are usually insured against by similar companies engaged in the same or a similar business.
Section 6.07Inspection of Property; Books and Records; Discussions.
(a)Keep proper books of records and accounts, in which full, true, and correct entries in all material respects and in any event in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions and assets in relation to its business and activities.
(b)Permit the Lender to visit and inspect any of its Real Properties and examine and make abstracts from any of its books and records at any reasonable time and as often as may reasonably be desired and to discuss its business operations, properties, and financial and other condition with its officers and employees and its independent certified public accountants; provided, that, so long as no Event of Default has occurred and is continuing, such visits and inspections shall be conducted during normal business hours following prior written notice.
Section 6.08Environmental Laws.
(a)Obtain, comply and maintain in all material respects, and ensure the same in all material respects by all tenants and subtenants, if any, with all applicable Environmental Laws, any and all licenses, approvals, notifications, registrations, or permits required by applicable Environmental Laws.
(b)Conduct and complete all investigations, studies, sampling, and testing, and all remedial, removal, and other actions necessary to remove and clean up all Hazardous Materials from any of its Real Properties required under Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws.
(c)At the reasonable request of the Lender from time to time, provide to the Lender within sixty (60) days after such request, at the expense of the Borrower, an environmental assessment report for any Loan Party's Real Properties described in such request, prepared by an environmental consulting firm reasonably acceptable to the Lender, indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance, removal, or remedial action in connection with any Hazardous Materials on such Real Properties; without limiting the generality of the foregoing, if the Lender determines at any time that a material risk exists that any such report will not be provided within the time referred to above, the Lender may retain an environmental
consulting firm to prepare such report at the expense of the Borrower, and the Borrower hereby grants and agrees to cause any of its Subsidiaries that owns any property described in such request to grant at the time of such request to the Lender, such firm, and any agents or representatives thereof an irrevocable non-exclusive license, subject to the rights of tenants, to enter onto their respective Real Properties to undertake such an assessment.
Section 6.09Use of Proceeds. Use the proceeds of the Loan to finance the Acquisition, and for general corporate purposes of the Borrower, in each case to the extent not prohibited under any Requirement of Law or the Loan Documents.
Section 6.10Additional Collateral, Etc.
(a)With respect to any property acquired after the Closing Date by any Loan Party that is intended to be subject to a Lien created by any Loan Document, other than (x) property described in clause (b) or (c) below, (y) any property subject to a Lien expressly permitted by this Agreement and (z) property acquired by any Excluded Foreign Subsidiary as to which the Lender does not have a perfected Lien, promptly, and in any event within 30 (thirty) days of acquiring such property:
(i)execute and deliver to the Lender such supplements or amendments to the Security Agreement or such other documents as the Lender deems necessary or advisable to grant to the Lender a security interest in such property; and
(ii)take all actions necessary or advisable to grant to the Lender a perfected first priority security interest in such property, including the filing of UCC-1 financing statements in such jurisdictions as may be required by the Security Agreement or by law or as may be requested by the Lender.
(b)With respect to any new Subsidiary (other than an Excluded Foreign Subsidiary) created or acquired after the Closing Date by any Loan Party (which, for the purposes of this clause (b), shall include any existing Subsidiary that ceases to be an Excluded Foreign Subsidiary), promptly, and in any event within thirty (30) days of the creation or acquisition of such Subsidiary:
(i)execute and deliver to the Lender such supplements or amendments to any Loan Document as the Lender deems necessary or advisable to grant to the Lender a perfected first priority security interest in the Equity Interests of such new Subsidiary that are owned by any Loan Party;
(ii)deliver to the Lender the certificates representing such Equity Interests, together with undated stock powers, in blank, executed by a duly authorized officer of the relevant Loan Party;
(iii)cause such new Subsidiary (A) to become a party to the Security Agreement and (B) to take all actions necessary or desirable to grant to the Lender a perfected first priority security interest in the Collateral described in the Security Agreement with respect to such new Subsidiary, including the filing of UCC-1 financing statements in such jurisdictions as may be required by the Security Agreement or by law or as may be requested by the Lender;
(iv)deliver to the Lender a secretary's certificate of such Subsidiary, with charter documents, by-laws, and appropriate resolutions attached; and
(v)deliver to the Lender legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, satisfactory to the Lender.
Section 6.11Liquidity. Borrower shall maintain a minimum aggregate collected balance of not less than $250,000 in depository accounts with Lender at all times.
Section 6.12Further Assurances. Promptly upon the request of the Lender:
(a)Correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgement, filing, or recordation thereof.
(b)Do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, conveyances, pledge agreements, mortgages, deeds of trust, trust deeds, assignments, financing statements and continuations thereof, termination statements, notices of assignments, transfers, certificates, assurances, and other instruments as the Lender may reasonably require from time to time in order to:
(i)carry out more effectively the purposes of the Loan Documents;
(ii)to the fullest extent permitted by applicable law, subject any Loan Party's properties, assets, rights, or interests to the Liens now or hereafter intended to be covered by the Security Agreement, the Pledge Agreement and the other Loan Documents;
(iii)perfect and maintain the validity, effectiveness and priority of the Liens intended to be created under the Security Agreement, the Pledge Agreement and the other Loan Documents; and
(iv)assure, convey, grant, assign, transfer, preserve, protect, and confirm more effectively to the Lender, the rights granted or now or hereafter intended to be granted to the Lender under any Loan Document or under any other instruments executed in connection with any Loan Document to which any Loan Party is or is to be a party.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Loan or any other amounts payable to the Lender hereunder or under any other Loan Document have not been paid in full, the Borrower shall not, and shall not permit its Subsidiaries to:
Section 7.01Limitation on Debt. Create, incur, assume, permit to exist, or otherwise become liable with respect to any Debt, except:
(a)Debt of any Loan Party existing or arising under this Agreement and any other Loan Document;
(b)Debt of:
(i)the Borrower owed to any Subsidiary; and
(ii)any Loan Party owed to the Borrower or any other Subsidiary; provided that, in each case, the aggregate amount of such Debt shall not exceed $50,000;
(c)Debt incurred to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) secured by a Lien permitted under Section 7.02(g); provided that (i) such Debt is incurred simultaneously with such acquisition or the completion of such construction or improvement, (ii) such Debt when incurred shall not exceed the purchase price or the construction costs of the asset financed, and (iii) the aggregate principal amount of Debt permitted by this Section 7.01(c), shall not exceed $50,000 in the aggregate at any time outstanding;
(d)Debt existing on the date hereof and listed on Schedule 7.1(d);
(e)Debt of any Person that becomes a Subsidiary after the date hereof; provided that (i) such Debt exists at the time such Person becomes a Subsidiary and is not created in contemplation of, or in connection with, such Person becoming a Subsidiary and (ii) the aggregate principal amount of Debt permitted by this Section 7.01(e) shall not exceed $100,000 at any time outstanding;
(f)Guaranty Obligations incurred in the ordinary course of business by any Loan Party of obligations of any other Loan Party;
(g)Debt in an amount not to exceed $5,000,000 owed by Shanwick to ING; and
(h)Other Debt of the Borrower or any of its Subsidiaries in an aggregate principal amount not to exceed $50,000 at any time.
Section 7.02Limitation on Liens. Create, incur, assume, or permit to exist any Lien on any property or assets (including Equity Interests of any of its Subsidiaries) now owned or hereafter acquired by it or on any income or rights in respect of any thereof, except:
(a)Liens created pursuant to or arising under any Loan Document;
(b)Liens imposed by law for taxes, assessments, or governmental charges 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 in accordance with GAAP on the books of the applicable Person;
(c)Carriers', warehousemen's, mechanics', materialmen's, repairmen's, and other similar Liens imposed by law, arising in the ordinary course of business, and securing obligations that are not overdue by more than thirty (30) days or that are being contested in good faith and by appropriate proceedings diligently conducted;
(d)Pledges and deposits and other Liens (i) made in the ordinary course of business in compliance with workers' compensation, unemployment insurance, and other social security laws or regulations and (ii) securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty, or liability insurance to the Borrower or another Loan Party;
(e)Liens (including deposits) to secure the performance of bids, tenders, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds, and other obligations of like nature, in each case in the ordinary course of business;
(f)Easements, zoning restrictions, rights-of-way, minor defects or irregularities in title, and similar encumbrances on real property imposed by law or arising in the ordinary course of business which, in the aggregate, are not material in amount and which do not materially detract from the value of the affected property or interfere materially with the ordinary conduct of business of the Borrower or any of its Subsidiaries;
(g)Liens on fixed or capital assets acquired, constructed, or improved by the Borrower or any other Loan Party after the date hereof; provided that (i) such security interests secure Debt permitted by Section 7.01(c), (ii) such Liens and the Debt secured thereby are incurred simultaneously with such acquisition or the completion of such construction or improvement, (iii) such Liens shall not apply to any other property or assets of the Borrower or any other Loan Party, and (iv) the amount of Debt initially secured thereby is not more than 100% of the purchase price or construction or improvement cost of such fixed or capital asset;
(h)To the extent such transactions create a Lien thereunder, liens in favor of lessors securing operating leases or sale and leaseback transactions, in each case to the extent such operating leases or sale and leaseback transactions are permitted under the terms of this Agreement;
(i)Any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any other Loan Party or any Lien existing on any property or asset of any Person that becomes a Subsidiary of the Borrower or any other Loan Party at the time such Person becomes a Subsidiary of the Borrower or other Loan Party; provided that (i) such Lien is not created in contemplation of, or in connection with, such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall apply to the same category, type, and scope of assets, and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and any refinancing, refunding, extension, renewal, or replacement thereof that does not increase the outstanding principal amount thereof plus any accrued interest, premium, fee, and reasonable and documented out-of-pocket expenses payable in connection with any such refinancing, refunding, extension, renewal, or replacement;
(j)Judgment or other similar Liens in connection with legal proceedings in an aggregate principal amount up to $50,000 which, whether immediately or with the passage of time (i) do not give rise to an Event of Default under Section 8.01(h) and (ii) are being contested in good faith by appropriate proceedings diligently conducted;
(k)Liens upon assets of the Borrower or any of its Subsidiaries subject to Capitalized Lease Obligations to the extent such Capitalized Lease Obligations are permitted by Section 7.01; provided that (i) such Liens only serve to secure the payment of Debt arising under such Capitalized Lease Obligation and (ii) the Lien encumbering the asset giving rise to the Capitalized Lease Obligation does not encumber any other asset of the Borrower or any of its Subsidiaries;
(l)Liens arising from precautionary Uniform Commercial Code financing statement filings solely as a precautionary measure in connection with operating leases or consignment of goods; and
(m)Any other Liens on property not otherwise permitted by this Section 7.02 so long as neither (i) the aggregate principal amount of the Debt and other obligations secured thereby nor (ii) the aggregate fair market value (determined as of the date such Lien is incurred) of the assets subject thereto exceeds $50,000 at any time outstanding.
Section 7.03Mergers; Nature of Business.
(a)Merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing (i) any Subsidiary of the Borrower that is a Loan Party may merge into the Borrower in a transaction in which the Borrower is the surviving corporation, (ii) any Loan Party (other than the Borrower) may merge into any other Loan Party in a transaction in which the surviving entity is a Loan Party, and (iii) any Subsidiary that is not a Loan Party may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lender.
(b)Engage in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date hereof and businesses reasonably related thereto.
Section 7.04Limitation on Investments. Make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase, hold, or acquire any Equity Interests, bonds, notes, debentures, or other debt securities of, or any assets constituting a business unit of, or make any other investment in, any Person (all of the foregoing, “Investments”), except:
(a)Investments in Cash Equivalents;
(b)Guarantees permitted by Section 7.01;
(c)Loans and advances to officers, directors, or employees of any Loan Party in the ordinary course of business (including for travel, entertainment, and relocation expenses in an aggregate amount not to exceed $50,000 at any time outstanding;
(d)Intercompany Investments by any Loan Party of, in, or to another Loan Party in the Borrower or any Person that, prior to such Investment, is a Loan Party;
(e)Investments by any Subsidiary of the Borrower that is not a Loan Party in any other Subsidiary of the Borrower that is not a Loan Party;
(f)Extensions of trade credit in the ordinary course of business (including any instrument evidencing the same and any instrument, security, or other asset acquired through bona fide collection efforts with respect to the same); and
(g)In addition to Investments otherwise expressly permitted by this Section 7.04, Investments by the Borrower or any other Loan Party in an aggregate amount (valued at cost) not to exceed $50,000 during the term of this Agreement.
Section 7.05Limitation on Dispositions. Dispose of any of its property, whether now owned or hereafter acquired, or issue or sell any Equity Interests to any Person, except:
(a)The sale or Disposition of machinery and equipment no longer used or useful in the business of any Loan Party;
(b)The Disposition of obsolete or worn-out property in the ordinary course of business;
(c)The sale of inventory and immaterial assets, in each case, in the ordinary course of business;
(d)Dispositions resulting from any taking or condemnation of any Property of the Borrower or any Subsidiary by any Governmental Authority or any assets subject to a casualty; and
(e)Dispositions of other property in any Fiscal Year of the Borrower, so long as such property, together with all other property Disposed of during such Fiscal Year, shall have a fair market value not exceeding $50,000.
Section 7.06Limitation on Sales and Leasebacks. Enter into any arrangement with any Person whereby such Loan Party shall sell or otherwise transfer any property owned by such Loan Party to (a) such Person and thereafter rent or lease such Property from such Person or (b) any other Person to whom funds have been or are to be advanced by such Person on the security of such Property or rental obligations of such Loan Party.
Section 7.07Limitation on Restricted Payments. Declare or pay any dividend on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement, or other acquisition of, any Equity Interests of the Borrower or any of its Subsidiaries, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of the Borrower or any of its Subsidiaries (collectively, “Restricted Payments”), except that:
(a)A Subsidiary of the Borrower may make a Restricted Payment to the Borrower or any Loan Party and/or any other Persons owning Equity Interests in such Subsidiary, so long as such Restricted Payment is made to the Borrower, such Loan Party, and/or such other Persons ratably in accordance with their Equity Interests of the same class or series therein;
(b)The Borrower may declare and pay dividends and make other distributions and payments with respect to its Equity Interests if payable solely in its Equity Interests;
(c)The Borrower may purchase or otherwise acquire Equity Interests in any Subsidiary of the Borrower using additional shares of its Equity Interests; and
(d)The Borrower may (i) make repurchases or redemptions of its Equity Interests (x) in connection with the exercise of stock options or restricted stock awards if such Equity Interests represent all or a portion of the exercise price thereof or (y) deemed to occur upon the withholding of a portion of such Equity Interests issued to directors, officers, or employees of the Borrower or any Subsidiary under any stock option plan or other benefit plan or agreement for directors, officers, and employees of the Borrower and the Subsidiaries to cover withholding tax obligations of such Persons in respect of such issuance and (ii) make other Restricted Payments, not exceeding $50,000 in the aggregate for any Fiscal Year, pursuant to and in accordance with stock option plans or other benefit plans or agreements for directors, officers, and employees of the Borrower and the Subsidiaries.
Section 7.08Limitation on Prepayments of Debt and Amendments of Debt Instruments.
(a)Make or offer to make any optional or voluntary payment or prepayment on or redemption, defeasance or purchase of any amounts (whether principal or interest) payable under any Debt which is contractually subordinated in right of payment to the obligations of the Loan Parties pursuant to the Loan Documents.
(b)Amend, modify, waive, or otherwise change, or consent or agree to any amendment, modification, waiver, or other change to any of the terms of or any Debt that is contractually subordinated to the obligations of the Loan Parties pursuant to the Loan Documents, other than any amendment, modification, waiver, or other change which (i) would extend the maturity or reduce the amount of any payment of principal thereof or reduce the rate or extend any date for payment of interest thereon and (ii) does not involve the payment of a consent fee.
Section 7.09Limitation on Transactions With Affiliates. Enter into or be a party to any transaction including any purchase, sale, lease, or exchange of property, the rendering of any service or the payment of any management, advisory, or similar fees, with any Affiliate unless such transaction is:
(a)Otherwise permitted by the terms of this Agreement;
(b)In the ordinary course of business of the Borrower or the relevant Subsidiary, as the case may be; and
(c)On fair and reasonable terms no less favorable to the Borrower or the relevant Subsidiary, as the case may be, than those that would have been obtained in a comparable transaction on an arm's length basis from an unrelated Person.
Section 7.10Limitation on Restrictive Agreements. Enter into or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Subsidiary of the Borrower to:
(a)Make Restricted Payments in respect of any Equity Interests of such Subsidiary held by, or pay any Debt owed to, the Borrower or any other Subsidiary of the Borrower;
(b)Make loans or advances to, or Investments in, the Borrower or any other Subsidiary of the Borrower; and
(c)Transfer any of its assets to the Borrower or any other Subsidiary of the Borrower, except for such encumbrances or restrictions (i) existing under the Loan Documents and (ii) with respect to a Subsidiary imposed pursuant to an agreement that has been entered into in connection with the Disposition of all or substantially all of the Equity Interests or assets of such Subsidiary.
Section 7.11Debt Service Coverage Ratio. The Borrower shall not permit, as of the last day of any of its Fiscal Years, commencing with the Fiscal Year ending December 31, 2023, the Debt Service Coverage Ratio to be less than 1.25 to 1.00.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01Events of Default. Each of the following events or conditions shall constitute an “Event of Default” (whether it shall be voluntary or involuntary or come about or be affected by any Requirement of Law or otherwise):
(a)the Borrower fails to pay (x) any principal of any Loan when due, whether at stated maturity, by acceleration, by notice of voluntary prepayment, by mandatory prepayment or otherwise or (y) any interest on any Loan, or any fee or other amount payable hereunder or under any other Loan Document when due and such failure remains unremedied for a period of five (5) days;
(b)any representation, warranty, certification, or other statement of fact made or deemed made by or on behalf of any Loan Party herein or in any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder or in any certificate, document, report, financial statement, or other document furnished by or on behalf of any Loan Party under or in connection with this Agreement or any other Loan Document, proves to have been false or misleading in any material respect on or as of the date made or deemed made;
(c)any Loan Party fails to perform or observe any covenant, term, condition, or agreement contained in Section 6.03, Section 6.04(a), Section 6.09, Section 6.10, Section 6.11 or Article 7;
(d)any Loan Party fails to perform or observe any other covenant, term, condition, or agreement contained in this Agreement or any other Loan Document (other than as provided in subsections (a) through (c) of this Section 8.01) and such failure continues unremedied for a period of thirty (30) days after written notice to the Borrower from the Lender;
(e)Any Loan Party:
(i)fails to pay any principal or interest in respect of any Debt in excess of $50,000 (including any Guaranty Obligation, but excluding any Debt outstanding under this Agreement) when due and such failure continues after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or
(ii)fails to perform or observe any other covenant, term, condition, or agreement relating to any such Debt or contained in any instrument or agreement evidencing or relating thereto, or any other event occurs or condition exists, the effect of which failure or other event or condition is to cause, or to permit the holder or beneficiary of such Debt (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice, if required, such Debt to become due prior to its stated maturity (or, in the case of any such Debt constituting a Guaranty Obligation, to become payable); or any such Debt is declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption or as a mandatory prepayment), purchased, or defeased, or an offer to prepay, redeem, purchase, or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof;
provided that, a default, event, or condition described in clause (i) or (ii) of this subsection (e) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events, or conditions of the type described in clauses (i) and (ii) of this subsection (e) has occurred and is continuing with respect to Debt the outstanding principal amount of which exceeds in the aggregate $50,000;
(f)
(i)Any Loan Party: (x) commences any case, proceeding, or other action under any existing or future Debtor Relief Law, seeking (A) to have an order for relief entered with respect to it, or (B) to adjudicate it as bankrupt or insolvent, or (C) reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (D) appointment of a receiver, trustee, custodian, conservator, or other similar official for it or for all or any substantial part of its asset or (y) makes a general assignment for the benefit of its creditors;
(ii)there is commenced against any Loan Party in a court of competent jurisdiction any case, proceeding, or other action of a nature referred to in clause (i) above which (x) results in the entry of an order for relief or any such adjudication or appointment or (y) remains undismissed, undischarged, unstayed, or unbonded for sixty (60) days;
(iii)there is commenced against any Loan Party any case, proceeding, or other action seeking issuance of a warrant of attachment, execution, or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which has not been vacated, discharged, stayed, or bonded pending appeal within sixty (60) days from the entry thereof;
(iv)any Loan Party is generally not, or is unable to, or admits in writing its inability to, pay its debts as they become due; or
(v)any Loan Party takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
(g)
(i)any Person shall engage in any “prohibited transaction” (as defined in §406 of ERISA or §4975 of the Code) involving any Plan;
(ii)any failure to satisfy the minimum funding standard (within the meaning of Sections §412 or §430 of the Code or §302 of ERISA) shall exist with respect to any Plan, or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any ERISA Affiliate;
(iii)a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of trustee is, in the reasonable opinion of the Lender, likely to result in the termination of such Plan for purposes of Title IV of ERISA;
(iv)any Single Employer Plan shall terminate for purposes of Title IV of ERISA; or
(v)the Borrower or any ERISA Affiliate shall in the reasonable opinion of the Lender be likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan;
and in each case in clauses (i) through (v) above, such event or condition, together with all other such events or conditions, if any, would, in the Lender's sole judgment, reasonably be expected to have a Material Adverse Effect;
(h)one or more judgments or decrees is entered against any Loan Party by a court of competent jurisdiction involving, in the aggregate, a liability (not paid or fully covered by insurance from an insurer that is rated at least “A” by A.M. Best Company as to which the relevant insurance company has been notified and has not denied coverage) in an amount in excess of $50,000 and all such judgments or decrees have not been vacated, discharged, stayed, or bonded pending appeal within thirty (30) days from the entry thereof;
(i)the Security Agreement or the Pledge Agreement ceases for any reason to be valid, binding and in full force and effect or any Lien created by such Loan Document ceases to be enforceable and of the same effect and priority purported to be created thereby, other than as expressly permitted hereunder or thereunder;
(j)
(i)any provision of any Loan Document ceases for any reason to be valid, binding, and in full force and effect, other than as expressly permitted hereunder or thereunder;
(ii)the Borrower, the Guarantor or any other Loan Party contests in any manner the validity or enforceability of any provision of any Loan Document; or
(iii)the Borrower, the Guarantor or any other Loan Party denies that it has any or further liability or obligation under any provision of any Loan Document to which it is a party or purports to revoke, terminate, or rescind any provision of any such Loan Document;
(k)any Change of Control occurs; and
(l)the Guarantor shall die or be adjudicated incompetent and, within 60 days after the date of such death or adjudication, either: (i) the Guarantor’s estate (including each trustee of any revocable trust which becomes irrevocable upon such the Guarantor’s death) or guardian shall fail to assume the Guarantor’s covenants, agreements, liabilities and obligations under the Loan Documents to which the Guarantor is a party pursuant to an assumption agreement that is satisfactory to the Lender, in its sole discretion; or (ii) the Borrower shall fail provide additional credit enhancement to the Lender that is in form and substance satisfactory to the Lender, in its sole discretion.
Section 8.02Remedies Upon Event of Default. If any Event of Default occurs and is continuing, then:
(a)if such event is an Event of Default specified in subsection (f) above with respect to the Borrower, the Loan (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents shall immediately become due and payable;
(b)if such event is an Event of Default (other than an Event of Default under Section 8.01(f)), any or all of the following actions may be taken:
(i)the Lender may, by notice to the Borrower, declare the Loan (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable; and
(ii)the Lender may exercise all rights and remedies available to it under the Security Agreement, the Pledge Agreement, the Guaranty and any other Loan Document.
ARTICLE IX
MISCELLANEOUS
Section 9.01Notices.
(a)Except in the case of notices and other communications expressly permitted to be given by telephone (or by e-mail as provided in paragraph (b) below), all notices and other communications provided for herein shall be made in writing and mailed by certified or registered mail, delivered by hand or overnight courier service, or sent by facsimile as follows:
(i)If to the Borrower or any other Loan Party:
Air T Acquisition 22.1, LLC
5000 West 36th Street, Suite 200
Minneapolis, Minnesota 55416
Attention: Brian Ochocki
With a copy to:
Winthrop & Weinstine, P.A.
225 South Sixth Street
Minneapolis, MN 55402-4629
Attention: Philip Colton, Esq.
(ii)If to the Lender:
7831 Bush Lake Road, Suite 300
Bloomington, Minnesota 55439
Attention: Eric P. Gundersen, SVP
With a copy to:
Fabyanske, Westra, Hart & Thomson, P.A.
333 South Seventh Street, Suite 2600
Minneapolis, MN 55402
Attention: Frederick H. Ladner, Esq.
Notices mailed by certified or registered mail or sent by hand or overnight courier service shall be deemed to have been given when received. Notices sent by facsimile during the recipient's normal business hours shall be deemed to have been given when sent (and if sent after normal business hours shall be deemed to have been given at the opening of the recipient's business on the next Business Day).
(b)Notices and other communications to the Lender hereunder may be delivered or furnished by electronic communications (including e-mail and internet or intranet websites) pursuant to procedures approved by the Lender. The Lender or the Borrower (on behalf of the Loan Parties) 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.
(c)Unless the Lender specifies otherwise:
(i)notices and other communications sent by e-mail shall be deemed received upon the sender's receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail, or other written acknowledgment); 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;
provided that, if such notice, e-mail or other communication is not sent during the recipient's normal business hours, such notice, e-mail, or communication shall be deemed to have been sent at the recipient's opening of business on the next Business Day.
(d)Either party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other party.
Section 9.02Amendments and Waivers.
(a)No failure to exercise and no delay in exercising, on the part of the Lender, any right, remedy, power, or privilege hereunder or under the other Loan Documents 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 are cumulative and not exclusive of any rights, remedies, powers, and privileges provided by law. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall comply with paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Lender may have had notice or knowledge of such Default at the time.
(b)Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended, or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and the Lender or (ii) in the case of any other Loan Document, pursuant to an
agreement or agreements in writing entered into by the Lender and the Loan Party or Loan Parties that are parties thereto.
Section 9.03Expenses; Indemnity; Damage Waiver.
(a)The Borrower agrees to pay:
(i)all reasonable out-of-pocket expenses incurred by the Lender and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Lender, in connection with the preparation, negotiation, execution, delivery, and administration of the Loan Documents and any amendments, waivers, or other modifications of the provisions of any Loan Document (whether or not the transactions contemplated by the Loan Documents are consummated); and
(ii)all reasonable out-of-pocket expenses incurred by the Lender, including the fees, charges and disbursements of any counsel for the Lender in connection with the enforcement or protection of its rights (i) in connection with the Loan Documents, including its rights under this Section 9.03 or (ii) in connection with the Loan issued under this Agreement, including all such out-of-pocket expenses incurred in connection with any restructuring, workout, or negotiations in respect of the Loan Documents or the Loan.
(b)The Borrower agrees to indemnify and hold harmless the Lender and each of its Related Parties (each, an “Indemnified Party”) from and against, any and all claims, damages, losses, liabilities, and related expenses (including the reasonable fees, charges, and expenses of any counsel for any Indemnified Party), incurred by any Indemnified Party or asserted against any Indemnified Party by any Person (including the Borrower or any other Loan Party) other than such Indemnified Party and its Related Parties arising out of, in connection with, or by reason of:
(i)the execution or delivery of any Loan Document or any agreement or instrument contemplated in any Loan Document, the performance by the parties thereto of their respective obligations under any Loan Document, or the consummation of the transactions contemplated by the Loan Documents;
(ii)any Loan or the actual or proposed use of the proceeds therefrom;
(iii)any actual or alleged presence or release of Hazardous Materials on or from any property currently or formerly owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related to the Borrower or any of its Subsidiaries in any way; or
(iv)any actual or prospective claim, investigation, litigation 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 Indemnified Party is a party thereto;
provided that, such indemnity shall not be available to any Indemnified Party to the extent that such claims, damages, losses, liabilities, or related expenses (A) are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnified Party or (B) result from a claim brought by the Borrower or any other Loan Party against any Indemnified Party for
breach in bad faith of such Indemnified Party's obligations under any Loan Document, if a court of competent jurisdiction has rendered a final and non-appealable judgment in favor of the Borrower or such Loan Party on such claim. This Section 9.03 shall only apply to Taxes that represent losses, claims, damages, or similar charges arising from a non-Tax claim.
(c)The Borrower agrees, to the fullest extent permitted by applicable law, not to assert, and hereby waives, any claim against any Indemnified Party, on any theory of liability, for special, indirect, consequential, or punitive damages (including, without limitation, any loss of profits or anticipated savings), as opposed to actual or direct damages, resulting from this Agreement or any other Loan Document or arising out of such Indemnified Party's activities in connection herewith or therewith (whether before or after the Closing Date).
(d)All amounts due under Section 9.03 shall be payable promptly after demand is made for payment by the Lender.
(e)The Borrower agrees that neither it nor any of its Subsidiaries will settle, compromise, or consent to the entry of any judgment in any pending or threatened claim, action, or proceeding in respect of which indemnification or contribution could be sought under Section 9.03 (whether or not any Indemnified Party is an actual or potential party to such claim, action, or proceeding) without the prior written consent of the applicable Indemnified Party, unless such settlement, compromise, or consent includes an unconditional release of such Indemnified Party from all liability arising out of such claim, action, or proceeding.
Section 9.04Successors and Assigns.
(a)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 the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Lender (and any attempted assignment or transfer by the Borrower without such consent 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 and, to the extent expressly contemplated hereby, the Related Parties of the Lender) any legal or equitable right, remedy, or claim under or by reason of this Agreement.
(b)The Lender may, at any time, without the consent of the Borrower, assign to one or more Eligible Assignees (as defined below) all or a portion of its rights and obligations under this Agreement. For purposes of this Agreement, “Eligible Assignee” means any Person other than a natural Person that is (i) an Affiliate of the Lender, (ii) a commercial bank, insurance company, investment or mutual fund, or other Person that is an “accredited investor” (as defined in Regulation D under the Securities Act), or (iii) a corporate entity that possesses financial sophistication and standing similar to that of the Lender. Subject to notification of an assignment, the assignee shall be a party hereto and, to the extent of the interest assigned, have the rights and obligations of the Lender under this Agreement, and the Lender shall, to the extent of the interest assigned, be released from its obligations under this Agreement (and, in the case of an assignment covering all of the Lender's rights and obligations under this Agreement, the Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 3.01, Section 3.02, and Section 9.03). The Borrower hereby agrees to execute any amendment and/or any other document that may be necessary to effectuate such an assignment, including an
amendment to this Agreement to provide for multiple lenders and an administrative agent to act on behalf of such lenders. Any assignment or transfer by the Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by the Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.
(c)The Lender may, at any time, without the consent of the Borrower, sell participations to one or more banks or other entities (each, a “Participant”) in all or a portion of the Lender's rights and obligations under this Agreement (including all or a the Loan owing to it); provided that (i) the Lender's obligations under this Agreement shall remain unchanged, (ii) the Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) the Borrower shall continue to deal solely and directly with the Lender in connection with the Lender's rights and obligations under this Agreement. The Borrower agrees that each Participant shall be entitled to the benefits of Section 3.01 and Section 3.02 to the same extent as if it were the Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that, such Participant (A) agrees to be subject to the provisions of Section 3.01 and Section 2.05 as if it were an assignee under paragraph (b) of this Section and (B) shall not be entitled to receive any greater payment under Section 3.01 or Section 3.02, with respect to any participation, than the Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. The Lender shall, acting solely for this purpose as an 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, the Lender shall have no 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 the Loan, or other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that the Loan, 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 the 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.
(d)To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were the Lender, as long as such Participant agrees to be subject to Section 2.05 as though it were the Lender.
Section 9.05Survival. All covenants, agreements, representations, and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of the Loan, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Lender may have notice or knowledge of any Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of, or any accrued interest on, any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid. The provisions of Section 3.01, Section 3.02, and ARTICLE IX shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, or the termination of this Agreement or any provision hereof.
Section 9.06Counterparts; Integration; Effectiveness.
(a)This Agreement and any amendments, waivers, consents, or supplements hereto may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents, and any separate letter agreements with respect to fees payable to the Lender constitute the entire contract among the parties with respect to the subject matter hereof and supersede all previous agreements and understandings, oral or written, with respect to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Lender and when the Lender shall have received a counterpart hereof executed by the Borrower. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or in electronic (“pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.
(b)The words “execution,” “signed,” “signature,” and words of similar import in any Loan Document shall be deemed to include electronic or digital signatures or electronic records, each of which shall be of the same effect, validity, and enforceability as manually executed signatures or a paper-based recordkeeping system, as the case may be, to the extent and as provided for under applicable law, including the Electronic Signatures in Global and National Commerce Act of 2000 (15 USC § 7001 et seq.), the Uniform Electronic Transactions Act (UETA), or any state law based on the UETA, including the New York Electronic Signatures and Records Act (N.Y. Tech. §§ 301 to 309), provided that notwithstanding anything contained herein to the contrary, the Lender is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Lender pursuant to procedures approved by it; and provided, further, the Lender reserves the right to require, at any time and at its sole discretion, the delivery of manually executed counterpart signature pages to this Agreement or any other Loan Document, and the Borrower agrees to promptly deliver such manually executed counterpart signature pages.
Section 9.07Severability. If any term or provision of any Loan Document is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision thereof or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal, or unenforceable, the parties hereto shall negotiate in good faith to modify the applicable Loan Document so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
Section 9.08Right of Setoff. If an Event of Default shall have occurred and be continuing, the Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, and without prior notice to the Borrower, any such notice being expressly waived by the Borrower, to set off and appropriate 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 the Lender or Affiliate to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under the Loan Documents to the Lender or its Affiliates, whether direct or indirect, absolute or contingent, matured or unmatured, and irrespective of whether or not the Lender or any Affiliate shall have made any demand under the Loan Documents and although such obligations of such Loan Party are owed to a branch, office, or Affiliate of the Lender different from the branch, office, or Affiliate holding such deposit or obligated on such indebtedness. The Lender agrees to notify the Borrower promptly after any
such set off and appropriation and application; provided that the failure to give such notice shall not affect the validity of such set off and appropriation and application.
Section 9.09Governing Law; Jurisdiction; Consent to Service of Process.
(a)This Agreement and the other Loan Documents and any claim, controversy, dispute, or cause of action (whether in contract or tort or otherwise) based upon, arising out of, or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the laws of the State of Minnesota, without regard to conflicts of laws principles.
(b)Each Loan Party irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind whatsoever, whether in law or equity, or whether in contract or tort or otherwise, against the Lender or any of its Related Parties in any way relating to this Agreement or any other Loan Document or the transactions contemplated hereby or thereby, in any forum other than the courts of the State of Minnesota sitting in Hennepin County, and of the United States District Court of the District of Minnesota, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the exclusive jurisdiction of such courts and agrees that any such action, litigation, or proceeding may be brought in any such Minnesota 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, litigation, 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 herein or in any other Loan Document shall affect any right that the Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.
(c)Each 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 such court referred to in subsection (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.
(d)Each Loan Party irrevocably consents to the service of process in the manner provided for notices in Section 9.01 and agrees that nothing herein will affect the right of any party hereto to serve process in any other manner permitted by applicable law.
Section 9.10Waiver 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 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 AGENT, ATTORNEY, REPRESENTATIVE, OR ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF LITIGATION 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.
Section 9.11Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.
Section 9.12Confidentiality.
(a)The Lender agrees to maintain the confidentiality of all non-public information received from the Borrower or any other Loan Party relating to the Borrower or its Subsidiaries or their respective businesses; provided that, in the case of information received from the Borrower or any Loan Party after the date hereof, such information is clearly identified at the time of delivery as being confidential information (the “Information”), except that Information may be disclosed:
(i)to its Affiliates and its Related Parties (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);
(ii)to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority);
(iii)to the extent required by any Requirement of Law or regulations or by any subpoena, court order, or similar legal process;
(iv)in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action, or proceeding relating to this Agreement or any other Loan Document or the enforcement of its rights hereunder or thereunder;
(v)to (x) any actual or potential assignee, transferee, or participant in connection with the assignment or transfer by the Lender of the Loan or any participations therein or (y) any actual or prospective party (or its Related Parties) to any swap, derivative, or other transaction under which payments are to be made by reference to the Borrower or any other Loan Party or any Subsidiary or any of their respective obligations, this Agreement or payments hereunder; provided that, any such potential assignee, transferee, participant, swap counterparty, or advisor is advised of, and agrees to be bound by, the provisions of this Section;
(vi)with the consent of the Borrower; or
(vii)to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section, or (y) is available to the Lender on a non-confidential basis prior to disclosure by the Borrower or any of its Subsidiaries, or (z) becomes available to the Lender or any of its Affiliates on a non-confidential basis from a source other than the Borrower or any other Loan Party.
(b)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.
Section 9.13 USA PATRIOT Act and Anti-Corruption Information. The Lender hereby notifies each Loan Party that pursuant to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “PATRIOT Act”) and 31 C.F.R. § 1010.230 (the “Beneficial Ownership Regulation”), 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 the Lender to identify such Loan Party in accordance with the PATRIOT Act and the Beneficial Ownership Regulation, and the Borrower agrees to provide, or cause the other Loan Parties to provide, such information from time to time to the Lender.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
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AIR T ACQUISITION 22.1, LLC, a Minnesota limited liability company
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By /s/ Brian Ochocki
Name: Brian Ochocki
Title: Manager
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BRIDGEWATER BANK, a Minnesota state banking corporation
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By /s/ Eric P. Gundersen
Name: Eric P. Gundersen
Title: Senior Vice President
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