Exhibit 10.19

 

EXECUTION VERSION

 

 

 

AGREEMENT AND PLAN OF MERGER

 

 

among

 

 

BEECH HOLDINGS, LLC,

 

 

SKY INTERMEDIATE MERGER SUB, LLC,

 

 

TEXTRON INC. and

 

 

TEXTRON ACQUISITION LLC

 

 

 

Dated as of December 26, 2013

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

Article I The Merger; Closing; Effective Time

2

Section 1.1

The Mergers

2

Section 1.2

Closing

2

Section 1.3

Effective Time

2

Section 1.4

Limited Liability Company Agreements

3

Section 1.5

Certificates of Formation

3

Section 1.6

Directors

4

Section 1.7

Officers

4

Section 1.8

FIRPTA Certificate

4

 

 

 

Article II Effect of the Mergers on Units; Exchange of Certificates and Book
Entry Units

4

Section 2.1

Effect on Units

4

Section 2.2

Exchange of Certificates

6

Section 2.3

Treatment of Company Options, Restricted Units, Phantom Units and Residual Units

8

Section 2.4

Certain Adjustments

8

Section 2.5

Withholding

9

Section 2.6

Termination of Exchange Fund

9

 

 

 

Article III Representations and Warranties

10

Section 3.1

Representations and Warranties of the Company

10

Section 3.2

Representations and Warranties of Parent and Merger Sub

29

 

 

 

Article IV Covenants

32

Section 4.1

Interim Operations

32

Section 4.2

Acquisition Proposals

35

Section 4.3

Information Statement

39

Section 4.4

Filings; Other Actions; Notification

39

Section 4.5

Access and Reports

42

Section 4.6

Publicity

43

Section 4.7

Employee Benefits

44

Section 4.8

Expenses

45

Section 4.9

Indemnification; Directors’ and Officers’ Insurance

45

Section 4.10

Confidentiality

46

Section 4.11

Resignation of Directors

46

Section 4.12

Transaction Litigation

46

Section 4.13

No Other Company Representations or Warranties

46

Section 4.14

Financial Statements

47

 

 

 

Article V TAX MATTERS

47

Section 5.1

Cooperation on Tax Matters

47

Section 5.2

Tax Sharing Agreements

48

 

 

 

Article VI Conditions

48

 

-i-

--------------------------------------------------------------------------------

 

Section 6.1

Conditions to Each Party’s Obligation to Effect the Merger

48

Section 6.2

Conditions to Obligations of Parent and Merger Sub

48

Section 6.3

Conditions to Obligation of the Company

49

Section 6.4

Frustration of Closing Conditions

50

 

 

 

Article VII Termination

50

Section 7.1

Termination by Mutual Consent

50

Section 7.2

Termination by Either Parent or the Company

50

Section 7.3

Termination by the Company

51

Section 7.4

Termination by Parent

51

Section 7.5

Effect of Termination and Abandonment

51

 

 

 

Article VIII Miscellaneous and General

53

Section 8.1

Survival

53

Section 8.2

Modification or Amendment

53

Section 8.3

Waiver of Conditions

53

Section 8.4

Counterparts

53

Section 8.5

GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL; SPECIFIC PERFORMANCE

54

Section 8.6

Notices

55

Section 8.7

Entire Agreement

56

Section 8.8

No Third Party Beneficiaries

56

Section 8.9

Obligations of Parent and of the Company

57

Section 8.10

Definitions

57

Section 8.11

Severability

57

Section 8.12

Interpretation; Construction

57

Section 8.13

Assignment

58

 

 

Exhibits

 

 

 

Exhibit A

Definitions

Exhibit B

Intermediate Company Limited Liability Company Agreement Amendment

Exhibit C

Surviving Company Limited Liability Company Agreement

Exhibit D

Member Proxy

Exhibit E

Trust Agreement Terms

 

-ii-

--------------------------------------------------------------------------------

 

AGREEMENT AND PLAN OF MERGER

 

This AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of December 26,
2013, is by and among Beech Holdings, LLC, a Delaware limited liability company
(the “Company”), Sky Intermediate Merger Sub, LLC, a newly formed Delaware
limited liability company and a direct wholly-owned subsidiary of the Company
(“Intermediate Merger Sub”), Textron Inc., a Delaware corporation (“Parent”),
and Textron Acquisition LLC, a newly formed Delaware limited liability company
and a wholly-owned subsidiary of Parent (“Merger Sub”). The
Company, Intermediate Merger Sub, Parent and Merger Sub are collectively
referred to from time to time herein as the “Parties”, and each, individually,
as a “Party”. Certain capitalized terms used herein have the respective meanings
set forth in Exhibit A attached hereto.

 

RECITALS:

 

WHEREAS, upon the terms and subject to the conditions set forth in this
Agreement, the Parties intend that (i) Intermediate Merger Sub will be merged
with and into the Company, with the Company surviving (such surviving company,
the “Intermediate Company”) such merger (the “Intermediate Merger”) and
(ii) immediately following the consummation of the Intermediate Merger, Merger
Sub will be merged with and into the Intermediate Company, with the Intermediate
Company surviving the Merger as a wholly-owned Subsidiary of Parent (the
“Merger”);

 

WHEREAS, the Company Board has by the unanimous vote of the board members
present (i) determined that this Agreement and the transactions contemplated by
this Agreement are advisable to and in the best interests of the Company and the
owners of Units (each owner, a “Member”), (ii) approved the execution, delivery
and performance of this Agreement by the Company and the consummation of the
Intermediate Merger, the Merger and the other transactions contemplated hereby,
and (iii) directed that, following its execution, this Agreement, the
Intermediate Merger and the Merger be submitted to the Members necessary to
obtain the Company Requisite Approval for approval in accordance with the
Delaware Limited Liability Company Act (the “LLCA”) and the operating agreement
of the Company, dated February 15, 2013, as amended (the “Operating Agreement”);

 

WHEREAS, concurrently with the execution and delivery of this Agreement, and as
a condition and inducement to Parent’s and Merger Sub’s willingness to enter
into this Agreement, certain Members have delivered to Parent and Merger Sub
Member Proxies and, when the written consents of the Members attached to the
Member Proxies are executed and delivered pursuant to such Member Proxies, such
written consents will fully satisfy the requirement to obtain the Company
Requisite Approval;

 

WHEREAS, the board of directors of Parent and the sole member of Merger Sub have
each (i) determined that this Agreement and the transactions contemplated by
this Agreement are advisable and in the best interests of Parent and Merger Sub,
respectively and (ii) approved the execution, delivery and performance of this
Agreement by Parent and Merger Sub, respectively, and the consummation of the
Merger and the other transactions contemplated hereby;

 

WHEREAS, Parent, as the sole unit holder of Merger Sub, has approved this
Agreement and the transactions contemplated hereby; and

 

--------------------------------------------------------------------------------

 

WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement.

 

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

 

ARTICLE I

 

THE MERGER; CLOSING; EFFECTIVE TIME

 

Section 1.1                       The Mergers.

 

(a)                               Upon the terms and subject to the conditions
set forth in this Agreement and in accordance with the applicable provisions of
the LLCA, at the Intermediate Effective Time, Intermediate Merger Sub shall be
merged with and into the Company and the separate existence of Intermediate
Merger Sub shall thereupon cease. The Intermediate Merger shall have the effects
specified in this Agreement and the LLCA. Without limiting the generality of the
foregoing, and subject thereto, at the Intermediate Effective Time, all of the
property, rights, privileges and powers of the Company and Intermediate Merger
Sub shall vest in the Intermediate Company, and all debts, liabilities and
duties of the Company and Intermediate Merger Sub shall become the debts,
liabilities and duties of the Intermediate Company, all as provided under the
LLCA.

 

(b)                              Upon the terms and subject to the conditions
set forth in this Agreement and in accordance with the applicable provisions of
the LLCA, at the Effective Time, Merger Sub shall be merged with and into the
Intermediate Company and the separate existence of Merger Sub shall thereupon
cease. The Intermediate Company shall be the surviving company in the Merger
(such surviving company, the “Surviving Company”) and shall continue its
existence under the LLCA as a direct wholly-owned subsidiary of Parent. The
Merger shall have the effects specified in this Agreement and the LLCA. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all of the property, rights, privileges and powers of the Intermediate
Company and Merger Sub shall vest in the Surviving Company, and all debts,
liabilities and duties of the Intermediate Company and Merger Sub shall become
the debts, liabilities and duties of the Surviving Company, all as provided
under the LLCA.

 

Section 1.2                      
Closing.                                         Unless otherwise mutually
agreed in writing between the Company and Parent, the closing of each of the
Intermediate Merger (the “Intermediate Closing”) and the Merger (the “Closing”)
shall take place at the offices of Kirkland & Ellis LLP, 601 Lexington Avenue,
New York, New York, at 9:00 a.m. (Eastern Time) on a date to be specified by the
Parties which shall be no later than the second Business Day following the
satisfaction or waiver of the conditions set forth in Article VI (other than
those conditions that by their nature are to be satisfied at the Closing, but
subject to the fulfillment or waiver of those conditions at the Closing). The
date on which the Intermediate Closing and the Closing actually occur is
referred to as the “Closing Date”.

 

Section 1.3                       Effective Time.

 

(a)                               Concurrently with the Intermediate Closing,
the Company will cause a certificate of merger containing such information as is
required by the relevant provisions of the

 

2

--------------------------------------------------------------------------------

 

LLCA (the “Intermediate Delaware Certificate of Merger”) to be executed and
filed with the Secretary of State of the State of Delaware as provided in the
LLCA to effectuate the Intermediate Merger. The Intermediate Merger shall become
effective at the time when the Intermediate Delaware Certificate of Merger has
been duly filed with the Secretary of State of the State of Delaware or at such
later time as may be agreed by the Parties in writing and specified in the
Intermediate Delaware Certificate of Merger in accordance with the relevant
provisions of the LLCA (the “Intermediate Effective Time”).

 

(b)                              Immediately after the Intermediate Effective
Time, the Intermediate Company will cause a certificate of merger containing
such information as is required by the relevant provisions of the LLCA (the
“Delaware Certificate of Merger”) to be executed and filed with the Secretary of
State of the State of Delaware as provided in the LLCA to effectuate the Merger,
which Delaware Certificate of Merger will specify that the Merger will become
effective one (1) hour after the Intermediate Effective Time. The Merger shall
become effective at such time as is specified in the Delaware Certificate of
Merger on the Closing Date or at such later time as may be agreed by the Parties
in writing and specified in the Delaware Certificate of Merger in accordance
with the relevant provisions of the LLCA (the “Effective Time”).

 

Section 1.4                       Limited Liability Company Agreements.

 

(a)                               At the Intermediate Effective Time, the
Operating Agreement as in effect immediately prior to the Intermediate Effective
Time shall be amended pursuant to Section 18-209(f) of the LLCA by the First
Amendment to the Operating Agreement in the form attached hereto as Exhibit B
(the “Intermediate Company LLC Agreement Amendment”) and the Operating
Agreement, as amended by the Intermediate Company LLC Agreement Amendment (as so
amended, the “Intermediate LLC Agreement”), shall be the limited liability
company agreement of the Intermediate Company until thereafter amended as
provided therein or by applicable Law.

 

(b)                              At the Effective Time, the Intermediate LLC
Agreement as in effect immediately prior to the Effective Time shall be amended
and restated in its entirety pursuant to Section 18-209(f) of the LLCA in the
form of the Amended and Restated Operating Agreement attached hereto as
Exhibit C (the “LLC Agreement”) and the LLC Agreement shall be the limited
liability company agreement of the Surviving Company until thereafter amended as
provided therein or by applicable Law.

 

Section 1.5                       Certificates of Formation.

 

(a)                               From and after the Intermediate Effective
Time, the certificate of formation of the Company immediately prior to the
Intermediate Effective Time shall be the certificate of formation of the
Intermediate Company, until thereafter amended as provided in the Intermediate
LLC Agreement or by applicable Law.

 

(b)                              From and after the Effective Time, the
certificate of formation of the Intermediate Company (the “Certificate of
Formation”) shall be the certificate of formation of the Surviving Company until
thereafter amended as provided in the LLC Agreement or by applicable Law
(subject to Section 4.9).

 

3

--------------------------------------------------------------------------------

 

Section 1.6                       Directors.

 

(a)                               The directors of the Company in office
immediately prior to the Intermediate Effective Time shall, from and after the
Intermediate Effective Time, be the directors of the Intermediate Company until
their successors have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Intermediate
LLC Agreement.

 

(b)                              The members, managers or directors (as
appropriate) of Merger Sub immediately prior to the Effective Time shall, from
and after the Effective Time, be the managers or directors (as appropriate) of
the Surviving Company until their successors have been duly elected or appointed
and qualified or until their earlier death, resignation or removal in accordance
with the LLC Agreement.

 

Section 1.7                       Officers.

 

(a)                               The officers of the Company in office
immediately prior to the Intermediate Effective Time shall, from and after the
Intermediate Effective Time, be the officers of the Intermediate Company until
their successors have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Intermediate
LLC Agreement.

 

(b)                              The officers of the Intermediate Company
immediately prior to the Effective Time shall, from and after the Effective
Time, be the officers of the Surviving Company until their successors shall have
been duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the LLC Agreement.

 

Section 1.8                       FIRPTA Certificate. Prior to the Closing, the
Company shall deliver a certificate, in form and substance required under the
Treasury Regulations issued pursuant to Section 1445(b) of the Code, stating
that the Company (including, for the avoidance of doubt, the Intermediate
Company following the Intermediate Merger) is not and has not been a U.S. real
property holding corporation as defined in Section 897(c) of the Code for the
period described in Section 897(c)(1)(A)(ii) of the Code.

 

ARTICLE II

 

EFFECT OF THE MERGERS ON UNITS;

EXCHANGE OF CERTIFICATES AND BOOK ENTRY UNITS

 

Section 2.1                       Effect on Units

 

(a)                               The Intermediate Merger.

 

(i)                                  At the Intermediate Effective Time, as a
result of the Intermediate Merger and without any action on the part of any
Member or the Company as the sole member of Intermediate Merger Sub, each
limited liability company interest of Intermediate Merger Sub issued and
outstanding immediately prior to the Intermediate Effective Time shall be
cancelled without any consideration payable thereon.

 

(ii)                              At the Intermediate Effective Time, the Units
of the Company shall remain issued and outstanding as Units of the Intermediate
Company.

 

4

--------------------------------------------------------------------------------

 

(b)                              The Merger. At the Effective Time, as a result
of the Merger and without any action on the part of any Member or the sole unit
holder of Merger Sub:

 

(i)                                  Merger Consideration. Each Unit issued and
outstanding immediately prior to the Effective Time (other than Units owned by
Parent, Merger Sub or any other direct or indirect wholly-owned Subsidiary of
Parent and, other than L/C Secured Claim Units held by the Intermediate Company,
Units owned by the Intermediate Company (collectively, the “Excluded Units”))
shall be cancelled pursuant to Section 2.1(b)(ii) and:

 

(A)                          with respect to a Unit that was issued and
allocated in accordance with the Plan of Reorganization to a holder of an
Allowed Senior Credit Facility Secured Claim or to a holder of an Allowed L/C
Secured Claim (such Units, collectively, the “Secured Claim Units”), be
converted automatically into the right to receive $8.135 per Secured Claim Unit
in cash without any interest thereon (the “Per Unit Merger Consideration”);

 

(B)                           with respect to a Unit that was issued to and,
immediately prior to the Effective Time, is held by the Intermediate Company for
the benefit of holders of Allowed L/C Secured Claims (the “L/C Secured Claim
Units”), be converted automatically into the right of the holder of the
applicable Allowed L/C Secured Claim or the holder of the applicable Allowed
Senior Credit Facility Secured Claim (the “L/C Secured Claim Rights Holder”) to
receive the Per Unit Merger Consideration in accordance with, and at the time or
times determined pursuant to, the LLC Agreement and the Plan of Reorganization;
and

 

(C)                           with respect to an Unsecured Claim Unit that was
issued and outstanding immediately prior to the Effective Time (other than
Excluded Units) be converted automatically into the right to receive an amount
in cash as set forth in the Trust Agreement at the time or times specified
therein (the “Per Unsecured Claim Unit Consideration”).

 

(ii)                              Cancellation of Units. At the Effective Time,
all of the Units (other than Excluded Units) shall cease to be outstanding,
shall be canceled and shall cease to exist, and each certificate (a
“Certificate”) or, with respect to uncertificated Units, the relevant entry on
the Member Registry representing such Units (such uncertificated Units, “Book
Entry Units”) formerly representing any of the Units (other than Excluded Units)
shall thereafter represent only the right to receive (A) the Per Unit Merger
Consideration for each Secured Claim Unit and L/C Secured Claim Unit or (B) the
Per Unsecured Claim Unit Consideration for each Unsecured Claim Unit, solely
with respect to this clause (B), in accordance with the Trust Agreement.

 

(iii)                          Cancellation of Excluded Units. Each Excluded
Unit shall, by virtue of the Merger and without any action on the part of the
holder of the Excluded Unit, cease to be outstanding, shall be canceled without
payment of any consideration therefor and shall cease to exist.

 

(iv)                          Merger Sub. At the Effective Time, the limited
liability company interests in Merger Sub held by Parent, which constitute 100%
of the limited liability company interests in Merger Sub, shall be converted
into 100% of the limited liability

 

5

--------------------------------------------------------------------------------

 

company interests in the Surviving Company, and Parent shall be admitted as the
sole member of the Surviving Company.

 

Section 2.2                       Exchange of Certificates.

 

(a)                               Paying Agent. As soon as practicable following
the date hereof, the Company and Parent shall appoint a paying agent to act as
paying agent for the payment of the amounts payable pursuant
Section 2.1(b)(i)(A) and Section 2.1(b)(i)(B) (the “Paying Agent”) pursuant to a
paying agency agreement in a form mutually agreed upon by the Company, Parent,
Merger Sub and the Paying Agent. At or prior to the Effective Time, Parent shall
deposit or shall cause to be deposited, with the Paying Agent, (A) for the
benefit of the Members that are holders of Secured Claim Units immediately prior
to the Effective Time (other than holders of Excluded Units), cash in
immediately available funds in the aggregate amount necessary for the Paying
Agent to make the payments to holders of Secured Claim Units to which they are
entitled pursuant to Section 2.1(b)(i)(A) (such cash amount being hereinafter
referred to as the “Primary Exchange Fund”) and (B) for the benefit of L/C
Secured Claim Rights Holders, cash in immediately available funds in the
aggregate amount necessary for the Paying Agent to make the payments to L/C
Secured Claim Rights Holders in accordance with Section 2.1(b)(i)(B) (the “L/C
Reserve Fund”, and together with the Primary Exchange Fund, the “Exchange
Funds”). The Paying Agent shall invest the Exchange Funds as directed by Parent;
provided that such investments shall be in obligations of or guaranteed by the
United States of America, with maturities not exceeding three months. Any
interest and other income resulting from such investment shall become a part of
the applicable Exchange Fund, and any amounts in excess of the aggregate amount
payable pursuant to Section 2.1(b)(i)(A) or Section 2.1(b)(i)(B), as applicable,
shall be contributed to the Surviving Company in accordance with Section 2.6. To
the extent that there are any losses with respect to any such investments, or an
Exchange Fund diminishes for any reason below the level required for the Paying
Agent to make prompt cash payment of the amount of cash to which holders of
Secured Claim Units or the L/C Secured Claim Rights Holders are entitled
pursuant to Section 2.1(b)(i)(A) or Section 2.1(b)(i)(B), as applicable, Parent
shall promptly replace or restore the cash in the applicable Exchange Fund so as
to ensure that such Exchange Fund is at all times maintained at a level
sufficient for the Paying Agent to make all such cash payments to holders of
Secured Claim Units or the L/C Secured Claim Rights Holders pursuant to
Section 2.1(b)(i)(A) or Section 2.1(b)(i)(B), as applicable.

 

(b)                              Exchange Procedures. As promptly as
practicable, and in any event within two (2) Business Days, (A) after the
Effective Time, the Paying Agent shall deliver (whether via postal mail,
electronic mail or upload to the secure website maintained for the benefit of
holders of Units) to each Person holding an outstanding Certificate or Book
Entry Unit that, immediately prior to the Effective Time, represented a Secured
Claim Unit that was converted into the right to receive the Per Unit Merger
Consideration and (B) after the L/C Final Distribution Date (or such earlier
date as determined in accordance with the Operating Agreement and the Plan of
Reorganization), the Paying Agent shall deliver to each L/C Secured Claim Rights
Holder that is entitled to receive the Per Unit Merger Consideration, in each
case (x) a letter of transmittal (the “Exchange Fund Letter of Transmittal”),
which, with respect to Certificates, shall specify that delivery shall be
effected (and risk of loss and title to the applicable Units shall pass) only
upon delivery of the Certificates (or affidavits of loss in lieu thereof as
provided in Section 2.2(e)) to the Paying Agent, and, with respect to Book Entry
Units or L/C Secured Claim Units, shall specify that delivery shall be effected
upon delivery of the

 

6

--------------------------------------------------------------------------------

 

Exchange Fund Letter of Transmittal to the Paying Agent, and (y) instructions
for use in effecting the surrender of the Certificates (or affidavits of loss in
lieu thereof as provided in Section 2.2(e)) or surrender of ownership of Book
Entry Units or L/C Secured Claim Units in exchange for the amount to which such
holder of Certificates, Book Entry Units or L/C Secured Claim Units is entitled
as a result of the Merger pursuant to Section 2.1(b)(i)(A) or
Section 2.1(b)(i)(B), as applicable. Following the Effective Time, and upon
delivery of a properly executed Exchange Fund Letter of Transmittal to the
Paying Agent and, with respect to Certificates, surrender to the Paying Agent of
a Certificate (or affidavits of loss in lieu thereof as provided in
Section 2.2(e)) or surrender of ownership of Book Entry Units or L/C Secured
Claim Units, (A) the Person holding such Certificate or Book Entry Unit or L/C
Secured Claim Unit shall in exchange therefor be entitled to receive an amount,
in immediately available funds and without any interest thereon, equal to the
product of (x) the number of Units represented by such Certificate, Book Entry
Unit or L/C Secured Claim Unit multiplied by (y) the Per Unit Merger
Consideration, and such Certificate, Book Entry Unit or L/C Secured Claim Units,
as applicable, shall be canceled. No interest will be paid or accrued on any
amount payable upon the surrender of a Certificate (or affidavits of loss in
lieu thereof as provided in Section 2.2(e)) or with respect to a Book Entry Unit
or L/C Secured Claim Unit. Until delivered in accordance with the provisions of
this Section 2.2, each Certificate or Book Entry Unit representing any Secured
Claim Unit (other than any Excluded Units) and each L/C Secured Claim Unit shall
be deemed at any time following the Effective Time to represent for all purposes
only the right to receive, as provided by this Agreement, the Per Unit Merger
Consideration, and shall have no other rights.

 

(c)                               Unsecured Claim Units; Unsecured Trust. At or
prior to the Effective Time, Parent shall deposit, or shall cause to be
deposited, with the Trustee, pursuant to the Trust Agreement, for the benefit of
the holders of Unsecured Claim Units and other holders of Unsecured Claims cash
in immediately available funds in an amount equal to $250,819,948 (such cash
amount being hereinafter referred to as the “Unsecured Trust”). The Trustee
shall invest the Unsecured Trust and make payments from the Unsecured Trust in
accordance with the terms and conditions of the Trust Agreement.

 

(d)                             Transfers. From and after the Effective Time,
there shall be no transfers on the Member Registry of the Company of the Units
that were outstanding immediately prior to the Effective Time. If, after the
Effective Time, any Certificate or Book Entry Unit is presented to the Surviving
Company or Parent for transfer, it shall be canceled and exchanged for the
amount in cash in immediately available funds to which the holder of the
Certificate or Book Entry Unit is entitled pursuant to this Article II.

 

(e)                               Lost, Stolen or Destroyed Certificates. In the
event that any Certificate shall have been lost, stolen or destroyed, upon the
making and delivery of an affidavit of that fact by the Person claiming such
Certificate to be lost, stolen or destroyed (along with delivery of a duly
completed Exchange Fund Letter of Transmittal, as appropriate) and, if required
by Parent, the posting by such Person of a bond in customary amount and upon
such customary terms as may be required by Parent as indemnity against any claim
that may be made against it or the Surviving Company with respect to such
Certificate, the Paying Agent will issue a check or pay by wire transfer
immediately available funds in the amount (after giving effect to any required
Tax withholdings as provided in Section 2.5) the holder thereof is entitled to
pursuant to Section 2.1(b)(i)(A) or Section 2.1(b)(i)(B), as applicable.

 

7

--------------------------------------------------------------------------------

 

Section 2.3                       Treatment of Company Options, Restricted
Units, Phantom Units and Residual Units.

 

(a)                               Company Options. Parent shall not assume any
Company Option in connection with the consummation of the transactions
contemplated hereby. At the Effective Time, each Company Option that is
outstanding and unexercised immediately prior to the Effective Time (whether or
not then vested) shall be canceled and converted automatically into the right to
receive the consideration set forth in this Section 2.3(a). Each holder of any
such outstanding and unexercised Company Option (whether or not then vested)
shall, in exchange therefor, be entitled to receive, subject to Section 2.5, a
single lump sum cash payment (without any interest thereon), payable on or prior
to the next regularly scheduled payroll date of the Surviving Company that
occurs after the Closing, in an amount equal to the product of (x) the total
number of Units subject to the Company Option immediately prior to the Effective
Time multiplied by (y) the excess, if any, of the Per Unit Merger Consideration
over the exercise price per Unit under such Company Option. Notwithstanding
anything in this Agreement to the contrary, any Company Option with an exercise
price per Unit that is equal to or greater than the Per Unit Merger
Consideration shall be canceled at the Effective Time without any cash payment
being made or other consideration being delivered in respect thereof.

 

(b)                              Restricted Units. Subject to Section 2.5, each
Restricted Unit that is outstanding shall vest and be canceled immediately prior
to the Effective Time in accordance with the Management Equity Plan and the
Award Agreement governing such Restricted Units. At the Effective Time, each
such vested Restricted Unit (after giving effect to the foregoing accelerated
vesting) shall be entitled to receive the Per Unit Merger Consideration in
accordance with Section 2.1(b). Each remaining unvested Restricted Unit shall be
automatically canceled at the Effective Time without any cash payment being made
or other consideration being delivered in respect thereof.

 

(c)                               Phantom Units. Subject to Section 2.5, each
Phantom Unit that is outstanding as of the Effective Time (whether vested or
unvested) shall be canceled and converted automatically into the right to
receive the Per Unit Merger Consideration, which shall be paid in accordance
with the terms of the Award Agreement governing such Phantom Unit.

 

(d)                             Residual Units. Subject to Section 2.5,
immediately prior to the Effective Time, a number of fully vested Units having a
Fair Market Value equal to the Residual Equity Value shall be granted to a group
of employees in accordance with the determination of the Compensation Committee
of the Company Board after consultation with the Chief Executive Officer of the
Company (each such Unit, a “Residual Unit”). Each such Unit shall, at the
Effective Time, be automatically entitled to receive the Per Unit Merger
Consideration in exchange for the cancellation of such Residual Unit.
Section 2.3(d) of the Company Disclosure Letter sets forth the number of
Residual Units available, and the number of Residual Units that will be
Restricted Units and the number that will be Company Options. The Company shall
deliver an updated Section 2.3(d) of the Company Disclosure Letter at least two
(2) Business Days prior to the Closing Date that sets forth the names of those
employees and the number of Residual Units being granted to each such employee.

 

Section 2.4                       Certain Adjustments. In the event that, prior
to the Effective Time, the Company changes the number of Units or securities
convertible or exchangeable into or exercisable for Units issued and
outstanding, as a result of a reclassification, unit split (including a reverse
unit split), unit dividend or distribution, recapitalization, merger, issuer
tender or

 

8

--------------------------------------------------------------------------------

 

exchange offer or other similar transaction, the Per Unit Merger Consideration
or the Per Unsecured Claim Unit Consideration, as applicable, shall be equitably
adjusted to reflect such change and as so adjusted shall, from and after the
date of such event, be the Per Unit Merger Consideration or the Per Unsecured
Claim Unit Consideration, as applicable.

 

Section 2.5                       Withholding. Each of Parent, Merger Sub, the
Company and the Surviving Company shall be entitled to deduct and withhold (or
cause to be deducted and withheld) from the consideration otherwise payable by
it pursuant to this Article II, such amounts as it is required to deduct and
withhold with respect to the making of such payment under the Code, or any other
applicable state, local or foreign Tax Law. To the extent that amounts are so
withheld (or caused to be withheld) by Merger Sub, the Company, the Surviving
Company or Parent, as the case may be, such withheld amounts (i) shall be timely
remitted by Merger Sub, the Company, the Surviving Company or Parent, as
applicable, to the applicable Governmental Entity and (ii) upon remittance shall
be treated for all purposes of this Agreement as having been paid to the Person
in respect of which such deduction and withholding was made by Merger Sub, the
Company, the Surviving Company or Parent, as the case may be.

 

Section 2.6                       Termination of Exchange Fund.

 

(a)                               Any portion of the Primary Exchange Fund
(including the proceeds of any investments of the Primary Exchange Fund) that
remains unclaimed by the holders of Secured Claim Units (other than a holder of
Excluded Units) for one year after the Effective Time shall be contributed to
the Surviving Company. Any holder of Secured Claim Units (other than a holder of
Excluded Units) who has not theretofore complied with this Article II shall
thereafter look only to the Surviving Company (subject to abandoned property,
escheat and other similar Laws) only as a general creditor thereof with respect
to any amount to which such holder of Secured Claim Units is entitled as a
result of the Merger pursuant to Section 2.1 (after giving effect to any
required Tax withholdings as provided in Section 2.5) upon due delivery of its
Certificates (or affidavits of loss in lieu thereof as provided in
Section 2.2(e)) or Book Entry Units, without any interest thereon.

 

(b)                              Any portion of the L/C Reserve Fund (including
the proceeds of any investments of the L/C Reserve Fund) that remains unclaimed
by the L/C Secured Claim Rights Holders for a period of six months after the
final L/C Secured Claim has been allocated in accordance with the Operating
Agreement and the Plan of Reorganization shall be contributed to the Surviving
Company. Any L/C Secured Claim Rights Holder who has not theretofore complied
with this Article II shall thereafter look only to the Surviving Company
(subject to abandoned property, escheat and other similar Laws) only as a
general creditor thereof with respect to any amount to which such L/C Secured
Claim Rights Holder is entitled as a result of the Merger pursuant to
Section 2.1 (after giving effect to any required Tax withholdings as provided in
Section 2.5) upon due delivery of its Certificates (or affidavits of loss in
lieu thereof as provided in Section 2.2(e)) or Book Entry Units or L/C Claim
Rights, without any interest thereon.

 

(c)                               Notwithstanding anything to the contrary in
this Section 2.6, none of the Surviving Company, Parent, the Paying Agent or any
other Person shall be liable to any holders of Units for any amount properly
delivered to a public official pursuant to applicable abandoned property,
escheat or similar Laws.

 

9

--------------------------------------------------------------------------------

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

Section 3.1                       Representations and Warranties of the Company.
Except as set forth in the corresponding sections or subsections of the
Disclosure Letter delivered by the Company to Parent simultaneously with
entering into this Agreement (the “Company Disclosure Letter”) (it being agreed
that disclosure of any item in any section or subsection of the Company
Disclosure Letter shall be deemed disclosure with respect to any other section
or subsection of the Company Disclosure Letter (and the corresponding section or
subsection of this Article III) to which the relevance of such item is
reasonably apparent on the face of such disclosure), the Company hereby
represents and warrants to Parent and Merger Sub as of the date hereof and as of
the Closing Date (except to the extent that any such representation and warranty
expressly speaks as of another date, in which case such representation and
warranty shall be true and correct only as of such other date) that:

 

(a)                               Organization, Good Standing and Qualification.
Each of the Company and its Subsidiaries (i) is a legal entity duly organized,
validly existing and in good standing (with respect to jurisdictions that
recognize the concept of good standing) under the Laws of the jurisdiction of
its organization, (ii) has all requisite corporate or similar power and
authority to own, lease and operate its properties and assets and to carry on
its business as presently conducted and (iii) is qualified to do business and is
in good standing (with respect to jurisdictions that recognize the concept of
good standing) as a foreign corporation or other legal entity in each
jurisdiction where the ownership, leasing or operation of its properties or
assets or the conduct of its business as presently conducted requires such
qualification, except, in the case of clauses (ii) and (iii) of this sentence,
where the failure to be so qualified or in good standing or to have such power
or authority, would not reasonably be expected to, individually or in the
aggregate, (A) materially and adversely affect the ability of the Company to
carry out its obligations hereunder or consummate the transactions contemplated
hereby, or (B) materially and adversely affect the ability of the Company and
its Subsidiaries to carry on their business as it is now being conducted. The
Company has made available to Parent complete and correct copies of the
certificate of formation of the Company and the Operating Agreement and the
certificate of formation, certificate of incorporation (or other equivalent
formation document) and limited liability company, operating agreement, bylaws
(or other equivalent governing document) for each of the Subsidiaries of the
Company, each as amended to the date of this Agreement and each as so made
available is in full force and effect on the date of this Agreement.

 

(b)                              Capital Structure. The limited liability
company interests of the Company consist of one class of Units. As of the date
of this Agreement, the sum of (i) the number of Units issued and outstanding,
consisting of (A) Secured Claim Units, (B) Unsecured Claim Units and (C) Units
held by the Company in respect of L/C Secured Claims, and (ii) the number of
additional Units were reserved for distribution in respect of Unsecured Claims,
equals 163,133,334. All of the outstanding Units (i) are duly authorized,
validly issued, fully paid and nonassessable; (ii) are free of any preemptive
rights other than as set forth in the Operating Agreement; (iii) are not subject
to any restrictions on transfer, other than restrictions on transfer imposed by
applicable securities Laws and those restrictions set forth in the Operating
Agreement or the Plan of Reorganization; and (iv) have been issued in material
compliance with all applicable Laws and all requirements set forth in the
Operating Agreement. As of the date of

 

10

--------------------------------------------------------------------------------

 

this Agreement, other than up to 13,227,027 Units reserved for issuance pursuant
to the Management Equity Plan, the Company has no other Units reserved for
issuance. Not including the 881,788 Residual Units to be granted immediately
prior to the Effective Time in accordance with the Management Equity Plan and as
set forth on Section 2.3(d) of the Company Disclosure Letter, as of December 18,
2013, (A) there were 8,230,565 outstanding and unexercised Company Options
providing for the issuance of 8,230,565 Units and having a weighted average
exercise price of $6.00 and (B) an aggregate of 4,114,674 Restricted Units were
issued and outstanding, in each case, under the Management Equity Plan. Upon the
issuance of any Units in accordance with the terms of the Management Equity
Plan, such Units will be duly authorized, validly issued, fully paid and
nonassessable. As of December 18, 2013, there were 146,664 outstanding Phantom
Units under the Director Equity Plan. Section 3.1(b) of the Company Disclosure
Letter contains (1) a correct and complete list as of the date of this Agreement
of the number of Secured Claim Units, the number of Unsecured Claim Units and
the number of Units held by the Company in respect of L/C Secured Claims, in
each case issued and outstanding, and (2) a correct and complete list as of the
date of this Agreement of Company Options and Restricted Units outstanding under
the Management Equity Plan, and of Phantom Units under the Director Equity Plan,
including the holder, amount, and for each Company Option, the exercise price of
such Company Option. No Units are owned by any Subsidiary of the Company. Except
as set forth above or as provided for in the Operating Agreement or the Plan of
Reorganization, there are no preemptive or other outstanding rights, options,
warrants, conversion rights, unit appreciation rights, redemption rights,
repurchase rights, agreements, arrangements, calls, commitments or rights of any
kind that obligate the Company or any of its Subsidiaries to issue or sell any
limited liability company interests or other securities of the Company or any of
its Subsidiaries or any securities or obligations of the Company or any of its
Subsidiaries convertible or exchangeable into or exercisable for, or giving any
Person a right to subscribe for or acquire, any securities of the Company or any
of its Subsidiaries, and no securities or obligations of the Company or any of
its Subsidiaries evidencing such rights are authorized, issued or outstanding.
There are no outstanding obligations of the Company or its Subsidiaries to
repurchase, redeem or otherwise acquire any limited liability company interests
or other securities of the Company or any of its Subsidiaries. The Member
Registry complies in all material respects with Section 2.5(a) of the Operating
Agreement.

 

(c)                               Organizational Authority and Approval.

 

(i)                                  The Company has all requisite power and
authority and has taken all action necessary in order to execute, deliver and
perform its obligations under this Agreement and to consummate the Intermediate
Merger and the Merger, subject only to obtaining the Company Requisite Approval.
This Agreement has been duly executed and delivered by the Company and, assuming
the valid authorization, execution and delivery of this Agreement by the other
Parties, constitutes a legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, subject to the
Bankruptcy and Equity Exception. Except as contemplated by this Agreement, no
other corporate or limited liability company actions on the part of the Company
are necessary to authorize this Agreement or to consummate the Intermediate
Merger and the Merger and the other transactions contemplated hereby.

 

(ii)                              The Company Requisite Approval is the only
vote of the holders of any class or series of interests in the Company necessary
to approve this Agreement and the transactions contemplated hereby. When the
written consents of the Members

 

11

--------------------------------------------------------------------------------

 

attached to the Member Proxies delivered by the Members party thereto to Parent
and Merger Sub on the date hereof are executed and delivered pursuant to such
Member Proxies, such written consents will fully satisfy the requirement to
obtain the Company Requisite Approval.

 

(iii)                          As of the date of this Agreement, the Company
Board has by the unanimous vote of the board members present (A) determined that
this Agreement, the Intermediate Merger and the Merger and the other
transactions contemplated hereby are advisable to and in the best interests of
the Company and its Members, (B) approved and declared advisable this Agreement,
the Intermediate Merger and the Merger and the other transactions contemplated
hereby and (C) resolved, subject to Section 4.2, to recommend that the Members
approve this Agreement (such recommendation, the “Company Recommendation”), and
subject to Section 4.2, directed that this Agreement be submitted to the Members
necessary to obtain the Company Requisite Approval for their approval by written
consent.

 

(iv)                          In accordance with Sections 2.7 and 2.9(i) of the
Operating Agreement, the Company has set a record date that is fifteen (15)
calendar days after the date of this Agreement (the “Record Date”) in connection
with obtaining the written consents of the Members required to obtain the
Company Requisite Approval.

 

(d)                             Subsidiaries. Section 3.1(d) of the Company
Disclosure Letter sets forth a true and complete list of all Subsidiaries of the
Company, listing for each such Subsidiary its name, type of entity, the
jurisdiction and date of its incorporation, organization or formation and its
authorized capital stock, partnership capital or equivalent. As of the date of
this Agreement, the Company, alone or together with one or more of its
Subsidiaries, is the record and beneficial owner of 100% of the issued and
outstanding equity interests of each of its Subsidiaries, in each case free and
clear of all Liens (other than the restrictions of applicable securities Laws
and Liens incurred pursuant to the Credit Facilities and other Permitted Liens).
Other than the Subsidiaries listed on Section 3.1(d) of the Company Disclosure
Letter, there are no other entities in which the Company or any Subsidiary owns,
of record or beneficially, any direct or indirect equity interest or any right
to acquire the same. Other than the Subsidiaries listed on Section 3.1(d) of the
Company Disclosure Letter, neither the Company nor any of its Subsidiaries is a
member of (nor is the business of the Company conducted through) any partnership
nor is the Company or any such Subsidiary a participant in any joint venture or
similar arrangement.

 

(e)                               Governmental Filings; No Violations; Certain
Contracts.

 

(i)                                  Except for (A) compliance with, and filings
under, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
the rules and regulations thereunder (the “HSR Act”), (B) the filing of the
Intermediate Delaware Certificate of Merger and the Delaware Certificate of
Merger and other appropriate merger documents required by the LLCA with the
Secretary of State of the State of Delaware, (C) a notification under
Section 1-302(g) and Section 2-302.b of the National Industrial Security Program
Operating Manual (the “NISPOM”), (D) compliance with and filings under the
International Traffic in Arms Regulations (“ITAR”), and (E) such other items as
disclosed in Section 3.1(e)(i) of the Company Disclosure Letter (the items set
forth above in clauses (A) through (E), the “Company Required Governmental
Approvals”), no notices, reports or other filings are required to be made by the
Company with, nor are any consents, registrations, approvals or authorizations
required to be obtained by the

 

12

--------------------------------------------------------------------------------

 

Company from, any domestic or foreign governmental or regulatory body,
commission, agency, instrumentality, authority or other legislative, executive
or judicial entity or court (each, a “Governmental Entity”) in connection with
the execution, delivery and performance of this Agreement by the Company or the
consummation of the Intermediate Merger and the Merger and the other
transactions contemplated hereby, except those that the failure to make or
obtain, as the case may be, would not reasonably be expected to, individually or
in the aggregate, (A) materially and adversely affect the ability of the Company
to carry out its obligations hereunder or consummate the transactions
contemplated hereby or (B) materially and adversely affect the ability of the
Company and its Subsidiaries to carry on their business as it is now being
conducted.

 

(ii)                              The execution, delivery and performance of
this Agreement by the Company does not, and the consummation of the Intermediate
Merger and the Merger and the other transactions contemplated hereby will not,
constitute or result in (A) a breach or violation of the certificate of
formation of the Company or the Operating Agreement, (B) any breach or violation
of, or a default (or an event which with notice or lapse of time or both would
become a default) under, or give rise to any right of termination, cancellation,
amendment or acceleration of, any Company Material Contract or material Permit
held by the Company, (C) the creation of any Lien (other than Permitted Liens)
on the Company or any of its Subsidiaries or any of their properties, rights or
assets, or (D) assuming compliance with the matters referred to in
Section 3.1(e)(i), any violation of Law or Order to which the Company or any of
its Subsidiaries or any of their respective properties or assets is subject,
except, in the case of clauses (B), (C), or (D) of this sentence, where such
breach, violation, default, termination, cancellation, amendment, acceleration
or creation would not reasonably be expected to, individually or in the
aggregate, (A) materially and adversely affect the ability of the Company to
carry out its obligations hereunder or consummate the transactions contemplated
hereby or (B) materially and adversely affect the ability of the Company and its
Subsidiaries to carry on their business as it is now being conducted.

 

(f)                                Financial Statements; Indebtedness;
Undisclosed Liabilities.

 

(i)                                  The Company has provided to Parent true,
accurate and complete copies of the following financial statements (the
“Financial Statements”): (A) the audited consolidated balance sheet of the
Company as of December 31, 2012 and the related audited consolidated statements
of income and of cash flows for the year then-ended December 31, 2012, including
the notes or other supplementary information thereto, (B) the unaudited
consolidated balance sheet of the Company as of September 30, 2013 (the “Latest
Balance Sheet”) and the related unaudited consolidated statements of income and
cash flows for (x) the seven-month period then ended for the Company and (y) the
two month period from January 1, 2013 through February 28, 2013 for Hawker
Beechcraft, Inc., as the predecessor in interest of the Company (the information
described in this subclause (B) being the “Interim Financial Statements”) and
(C) the unaudited consolidated balance sheet of the Company as of February 28,
2013 (the “February Balance Sheet”).

 

(ii)                              The Financial Statements (A) have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby, except as may be indicated in the notes thereto and
subject, in the case of the Interim Financial Statements, to the absence of
footnotes and normal year-end adjustments, which

 

13

--------------------------------------------------------------------------------

 

adjustments shall not be material individually or in the aggregate, and fresh
start accounting adjustments, (B) fairly present, in all material respects, the
consolidated financial condition, cash flows and results of operations of the
Company and its Subsidiaries as of the dates thereof and for the periods
referred to therein subject, in the case of the Interim Financial Statements, to
the absence of footnotes and normal year-end adjustments, which adjustments
shall not be material individually or in the aggregate, and fresh start
accounting adjustments and (C) were prepared in accordance with the books of
account and other financial records of the Company and its Subsidiaries. The
February Balance Sheet (A) has been prepared in accordance with GAAP and
(B) fairly presents, in all material respects, the consolidated financial
condition of the Company and its Subsidiaries as of the date thereof, except in
each case of (A) and (B) for (w) the absence of footnotes, (x) normal year-end
adjustments, (y) fresh start accounting adjustments and (z) the absence of tax
adjustments, and (C) were prepared in accordance with the books of account and
other financial records of the Company and its Subsidiaries.

 

(iii)                          The Company and each of its Subsidiaries maintain
a system of internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed, in all material respects, in
accordance with management’s general or specific authorizations and
(B) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP.

 

(iv)                          Section 3.1(f)(iv) of the Company Disclosure
Letter sets forth the total amount of outstanding Indebtedness (within the
meaning of clauses (a), (c), (d), (e), (g) and (i) of the definition thereof) of
the Company and its Subsidiaries as of the date hereof indicating the applicable
lender, counterparty or other party or parties thereof and the amount of the
obligation.

 

(v)                              Neither the Company nor any of its Subsidiaries
has any liability or obligation, which would be required to be set forth on the
liabilities side of a consolidated balance sheet of the Company and its
Subsidiaries (including any notes) prepared as of the date hereof and prepared
in accordance with GAAP and the practices and methodologies used in the
preparation of the Latest Balance Sheet, other than liabilities and obligations
(A) reflected on, reserved against or otherwise described in the Latest Balance
Sheet, (B) that have arisen since the date of the Latest Balance Sheet in the
ordinary course of business of the Company and its Subsidiaries or (C) that
would not reasonably be expected to, individually or in the aggregate,
materially and adversely effect the Company and its Subsidiaries taken as a
whole.

 

(vi)                          The 2013 Audited Financial Statements, when
delivered pursuant to Section 4.14(b), will (A) be prepared in accordance with
GAAP, applied on a consistent basis through the period presented thereby, except
as may be indicated in the notes thereto (B) based on the books of account and
other financial records of the Company and its Subsidiaries and (C) fairly
present, in all material respects, the consolidated financial condition, cash
flows and results of operations of the Company and its Subsidiaries as of the
date thereof and for the period referred to therein.

 

(vii)                      The Audited February Balance Sheet, when delivered
pursuant to Section 4.14(b), shall not include any deferred federal Tax
liabilities resulting from the implementation of the Plan of Reorganization
required to be recorded in accordance with GAAP.

 

14

--------------------------------------------------------------------------------

 

(g)                              Absence of Certain Changes. Since February 28,
2013 through the date of this Agreement, (i) except as contemplated by this
Agreement and for actions taken that are contemplated by the Plan of
Reorganization, the business of the Company and its Subsidiaries has been
conducted in all material respects in the ordinary course of business of the
Company and its Subsidiaries, (ii) there has not been any change, event, or
effect that would reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect and (iii) the Company and its
Subsidiaries have not taken any action that, if taken between the date of this
Agreement and the Closing Date, would constitute a breach of clauses (i) (other
than with respect to name changes for Subsidiaries of the Company), (ii), (iii),
(vi), (vii), (xi), (xiii), (xv)(B), (xvii), (xviii), (xix) or (xxi) of
Section 4.1(a).

 

(h)                              Litigation.

 

(i)                                  There are no actions, suits, litigations,
hearings, arbitrations, mediations or other proceedings or, to the Knowledge of
the Company, investigations (“Actions”), pending or, to the Knowledge of the
Company threatened by or before any Governmental Entity against the Company or
any of its Subsidiaries or any of their respective assets, rights or properties,
except in each case for any such Actions that are not material to the Company
and its Subsidiaries taken as a whole; and

 

(ii)                              Neither the Company nor any of its
Subsidiaries is a party to, and none of them nor any of their respective assets,
rights or properties is subject to, the provisions of any Order binding upon the
Company or any of its Subsidiaries, except any such Order that (A) is not
material to the Company and its Subsidiaries taken as a whole, and (B) would not
reasonably be expected to, individually or in the aggregate, materially
adversely affect the ability of the Company to carry out its obligations
hereunder or consummate the transactions contemplated hereby.

 

(i)                                  Employee Benefits.

 

(i)                                  Section 3.1(i)(i) of the Company Disclosure
Letter sets forth a true and complete list of each Company Plan, employment
agreement and incentive compensation plan in effect as of the date of this
Agreement. For purposes of this Agreement, “Company Plans” shall mean all
“employee benefit plans” within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), whether or not
subject to ERISA, and any other material medical, dental, life insurance, stock
purchase, equity, disability, salary continuation, severance, change-in-control,
retention, retirement, pension, deferred compensation, vacation, fringe benefit,
sick pay or paid time off plans or policies, and any other material employee
benefit plans or programs, but excluding any plan or program sponsored by a
Governmental Entity (such as social security or any similar arrangements), in
each case (A) established, maintained, sponsored or contributed to by the
Company, its Subsidiaries or any entity that would be deemed a “single employer”
with the Company or its Subsidiaries under Section 414(b), (c), (m) or (o) of
the Code or Section 4001 of ERISA on behalf of any employee, director, or other
individual service provider of the Company or any of its Subsidiaries (whether
current, former or retired) or their beneficiaries, or (B) with respect to which
the Company or any of its Subsidiaries has any material obligation on behalf of
any such employee, director or other individual service provider (together,
“Employees”) or beneficiary. Section 3.1(i)(i) of the Company Disclosure Letter
further identifies each such Company Plan that is governed by Laws of the United
States (each

 

15

--------------------------------------------------------------------------------

 

such Company Plan, a “U.S. Plan”) and each such Company Plan that is governed by
the Laws other than of the United States (each such Company Plan, a “Foreign
Plan”).

 

(ii)                              The Company has made available to Parent:
(A) copies of all material documents setting forth the terms of each Company
Plan, (B) the most recent annual reports (Form Series 5500), if any, required
under ERISA or the Code in connection with each Company Plan, (C) the most
recent actuarial report (if applicable) for all Company Plans, (D) all material
written contracts, instruments or agreements directly related to each Company
Plan, including administrative service agreements and group insurance contracts,
and (E) the most recent IRS determination or opinion letter issued with respect
to each Company Plan intended to be qualified under Section 401(a) of the Code.

 

(iii)                          (A) Each U.S. Plan intended to qualify under
Section 401(a) of the Code has received a determination letter from the IRS (or
the prototype plan on which such Company Plan is based has received an opinion
letter from the IRS) upon which it may rely regarding the qualified status under
the Code of such Company Plan, and, to the Knowledge of the Company, nothing has
occurred since the receipt of such determination or opinion letter that could
reasonably be expected to result in the loss of such qualification, and (B) all
payments required by each U.S. Plan with respect to all prior periods have been
made or provided for in all material respects in accordance with GAAP by the
Company or its Subsidiaries.

 

(iv)                          (A) No proceeding is pending or, to the Knowledge
of the Company, has been threatened against any of the Company Plans that would
reasonably be expected to result in material liability to the Company (other
than routine claims for benefits and appeals of such claims), any trustee or
fiduciary thereof, or any of the assets of any trust of any of the Company
Plans, (B) each U.S. Plan materially complies in form and is being maintained
and operated in all material respects in accordance with its terms and
applicable Law, including ERISA and the Code, (including Section 409A of the
Code) (C) none of the Company, any of its Subsidiaries or, to the Knowledge of
the Company, any third party, has, since February 28, 2013, engaged in a
non-exempt “prohibited transaction,” within the meaning of Section 4975 of the
Code and Section 406 of ERISA, with respect to the U.S. Plans that would
reasonably be expected to result in material liability to the Company, and
(D) to the Knowledge of the Company, no Company Plan is under an audit or
investigation by the IRS, Department of Labor or any other Governmental Entity.

 

(v)                              Since February 28, 2013, neither the Company
nor any of its Subsidiaries has incurred any liability under, arising out of or
by operation of Title IV of ERISA (other than liability for premiums to the
Pension Benefit Guaranty Corporation arising in the ordinary course) and no fact
or event exists that could result in the incurrence by the Company or any of its
Subsidiaries of such liability.

 

(vi)                          Neither the execution of this Agreement nor the
consummation of the Merger, either alone or in conjunction with any other event,
shall (A) give rise to any payment or compensation under any Company Plan or
(B) accelerate the time of payment or vesting or increase the amount of
compensation or benefits due to any Employee under any Company Plan. No amount
that could be received (whether in cash or property or the vesting of property)
as a result of the consummation of the Merger, either alone or in

 

16

--------------------------------------------------------------------------------

 

conjunction with any other event, by any Employee of the Company or any of its
Subsidiaries under any Company Plan or otherwise would not be deductible by
reason of Section 280G of the Code or would be subject to an excise tax under
Section 4999 of the Code.

 

(vii)                      Each Company Plan that is or forms part of a
“nonqualified deferred compensation plan” within the meaning of Section 409A of
the Code has been timely amended to comply, in all material respects, and has
been operated in compliance, in all material respects, with, and the Company and
its Subsidiaries have complied in practice and operation with, all applicable
requirements of Section 409A of the Code.

 

(viii)                  (A) Each Foreign Plan is maintained, funded and
administered in all material respects in accordance with applicable Laws
(including any requirements for tax qualification or the equivalent thereof) and
the requirements of such Foreign Plan’s governing documents, and (B) no Foreign
Plan has any unfunded or underfunded liabilities that have not been provided for
in accordance with GAAP.

 

(ix)                          This Section 3.1(i) includes the sole and
exclusive representations and warranties of the Company and its Subsidiaries
relating to any Company Plans.

 

(j)                                  Compliance with Laws. Except for Laws
relating to Company Plans, labor matters, environmental matters, Tax matters,
Company Intellectual Property, anti-bribery compliance and Government Contracts
which shall be governed by Section 3.1(i), Section 3.1(k), Section 3.1(l),
Section 3.1(m), Section 3.1(n), Section 3.1(t) and Section 3.1(u), respectively
and, as would not reasonably be expected to, (A) materially and adversely affect
the ability of the Company to carry out its obligations hereunder or consummate
the transactions contemplated hereby, or (B) materially and adversely affect the
ability of the Company and its Subsidiaries to carry on their business as it is
now being conducted:

 

(i)                                  the Company and its Subsidiaries have,
since January 1, 2011, conducted their business in compliance with all Laws and
Orders applicable to its business as currently conducted (including (x) any Laws
relating to federal aviation regulations, (y) any Orders of any Aviation
Regulatory Authority and (z) any Laws relating to export and/or import controls
compliance, such as ITAR, the Export Administration Regulations and the
regulations of the U.S. Treasury Department’s Office of Foreign Assets Control);

 

(ii)                              the Company and its Subsidiaries have all
Permits necessary to conduct their businesses as currently conducted, and all
such Permits are valid and in full force and effect and no cancellation or
suspension of any such Permit is pending or, to the Knowledge of the Company,
threatened;

 

(iii)                          to the Knowledge of the Company, each Permit of
the Company and its Subsidiaries will be in full force and effect immediately
following the Closing Date and will not expire, terminate or be restricted as a
result of the transactions contemplated hereby; and

 

(iv)                          there are no material defaults or events which,
with the passage of time or the giving of notice, would constitute a default
under or non-compliance with any

 

17

--------------------------------------------------------------------------------

 

provision of the Plan of Reorganization by the Company or any Affiliate of the
Company.

 

(k)                              Environmental Matters.

 

(i)                                  The Company and its Subsidiaries are and,
except for any noncompliance that has been resolved or as would not reasonably
be expected to individually or in the aggregate materially and adversely affect
the Company and its Subsidiaries taken as a whole, have been since January 1,
2011 in compliance in all material respects with all applicable Environmental
Laws.

 

(ii)                              The Company and its Subsidiaries have obtained
and possess all Permits required under applicable Environmental Laws for their
current operations and, except for any noncompliance that the Company reasonably
believes has been resolved, are and have been since January 1, 2011 in
compliance with all terms and conditions of such Permits, in each case, except
for such failure to obtain or possess or such noncompliance that would not
reasonably be expected to individually or in the aggregate materially and
adversely affect the Company and its Subsidiaries taken as a whole.

 

(iii)                          Since January 1, 2011, the Company and its
Subsidiaries have not received any written notice of violation of, written
notice of liability or written information request relating to or arising under
any Environmental Law, including with respect to any investigation, cleanup,
removal, remediation, or remedial or corrective action related to Hazardous
Materials, in each case that is unresolved, except as would not reasonably be
expected to, individually or in the aggregate, materially and adversely affect
the Company and its Subsidiaries taken as a whole.

 

(iv)                          Neither the Company nor any of its Subsidiaries is
the subject of any outstanding Order of any Governmental Entity that was issued
under Environmental Laws and which requires any pending, ongoing or future costs
or obligations under Environmental Laws, in each case, which would reasonably be
expected to, individually or in the aggregate, materially and adversely affect
the Company and its Subsidiaries taken as a whole.

 

(v)                              There are no unresolved Actions, Claims or
written inquiries pending or, to the Knowledge of the Company, threatened in
writing against the Company or any of its Subsidiaries, in each case under
Environmental Law, which, if determined adversely to the Company or any of its
Subsidiaries would reasonably be expected to, individually or in the aggregate,
materially and adversely affect the Company and its Subsidiaries taken as a
whole.

 

(vi)                          Neither the Company nor any of its Subsidiaries is
currently conducting or funding any investigation, cleanup, removal,
remediation, or remedial or corrective action of or with respect to any Release
of Hazardous Materials which would reasonably be expected to individually or in
the aggregate materially and adversely affect the Company and its Subsidiaries
taken as a whole.

 

(vii)                      Since January 1, 2011, there has been no material
Release of any Hazardous Materials (A) by the Company or any of its
Subsidiaries, (B) at, in, on, under, to or from any Owned Real Property or, to
the Knowledge of the Company, real property

 

18

--------------------------------------------------------------------------------

 

that is subject to any Lease Document, (C) to the Knowledge of the Company,
during the period of any of their ownership, operation or lease thereof, at, in,
on, under, to or from any real property formerly owned, operated or leased by
the Company or any of its Subsidiaries or (D) to the Knowledge of the Company,
at, in, on, under, to or from any real property to which such Hazardous
Materials were sent by the Company or its Subsidiaries, or were arranged to be
sent by the Company or its Subsidiaries, for treatment, storage, disposal,
recycling or other handling, that, in each case of (A), (B), (C) or
(D) currently requires the Company or any of its Subsidiaries to undertake any
investigation, cleanup, removal, remediation, or remedial or corrective action
pursuant to Environmental Law that would reasonably be expected to individually
or in the aggregate materially and adversely affect the Company and its
Subsidiaries taken as a whole.

 

(viii)                  The Company has provided Parent with copies of any Phase
I reports, in its possession, that have been generated in the past three
(3) years, and that relates to the Company, any of its Subsidiaries, their
businesses or their current or former owned or leased real property.

 

(ix)                          There are no underground storage tanks (“USTs”)
operated by the Company or its Subsidiaries at any real property that is subject
to any Lease Document, and there are no USTs at any of the Owned Real Property,
in each case that would reasonably be expected to result in material liabilities
for the Company or its Subsidiaries.

 

(x)                              None of the Owned Real Property or, to the
Knowledge of the Company, real property that is subject to any Lease Document is
(A) considered by any Governmental Entity as a Treatment, Storage, or Disposal
Facility under the Resource Conservation and Recovery Act, 42 U.S.C. 6901, et
seq., or (B) listed or proposed for listing on the National Priorities List or
the Comprehensive Environmental Response, Compensation and Liability Information
System under the Comprehensive Environmental Response Compensation and Liability
Act, 42, U.S.C. 9601, et seq., or any analogous or similar federal or state
list.

 

(xi)                          This Section 3.1(k) includes the sole and
exclusive representations and warranties of the Company and its Subsidiaries
relating to environmental matters, including any matter relating to any
Environmental Law.

 

(l)                                  Taxes.

 

(i)                                  (A) All income and all other material Tax
Returns required to be filed by or with respect to the Company or any of its
Subsidiaries have been filed in a timely manner (within any applicable extension
periods) and all such Tax Returns are true, correct and complete in all material
aspects, (B) all material Taxes required to be paid with respect to the Company
or any of its Subsidiaries (whether or not shown on such returns) have been
timely paid in full, (C) the charges, accruals and reserves for Taxes with
respect to the Company and its Subsidiaries reflected on the Financial
Statements are adequate to cover all accrued and unpaid Tax liabilities of the
Company and its Subsidiaries through the respective dates thereof, and (D) there
exist no Liens for Taxes with respect to any of the assets of the Company or any
of its Subsidiaries, except for Permitted Liens.

 

19

--------------------------------------------------------------------------------

 

(ii)                              There are no outstanding agreements or waivers
extending the statutory period for assessment or collection of any Taxes of the
Company or any of its Subsidiaries and no written powers of attorney with
respect to any such Taxes. The time for filing any Tax Return with respect to
the Company or any of its Subsidiaries has not been extended, other than any
extension to which the Company or any of its Subsidiaries is entitled under
applicable Law without the consent of the relevant Tax authority or Governmental
Entity.

 

(iii)                          There are no audits, proceedings, investigations
or other actions pending or threatened in writing against the Company or any of
its Subsidiaries in respect of Taxes or Tax Returns. No Tax authority has
asserted or threatened to assert, in each case in writing, any deficiency, claim
or issue with respect to Taxes or any adjustment to Taxes against the Company or
any of its Subsidiaries for any taxable period for which the period of
assessment or collection remains open.

 

(iv)                          None of the Company, the Surviving Company, or any
of the Subsidiaries of the Company will be required to include any item of
income in, or exclude any item of deduction from, taxable income for any taxable
period (or portion thereof) ending after February 28, 2013 as a result of
(A) any change in method of accounting, (B) any installment sale or open
transaction, (C) any prepaid amount received or paid, (D) any intercompany
transactions or any excess loss account described in Treasury Regulations under
Code section 1502 (or any corresponding or similar provision of state, local or
non-U.S. income tax law) or (E) any election pursuant to Section 108(i) of the
Code (or any similar provision of state, local or foreign Law).

 

(v)                              Neither the Company nor any of its Subsidiaries
has distributed the stock of another Person, or had its stock distributed by
another Person, during the five—year period ending on the date hereof, in a
transaction that was purported or intended to be governed in whole or in part by
Section 355 or Section 361 of the Code.

 

(vi)                          All material Taxes that the Company or any of its
Subsidiaries was required to withhold or collect have been duly withheld or
collected and have been paid to the proper Tax authority. The Company and each
of its Subsidiaries have complied in all material respects with the rules and
regulations relating to the withholding and remittance of Taxes.

 

(vii)                      Neither the Company nor any of its Subsidiaries has
undergone an ownership change to which Code section 382(l)(5) applies within the
past two years (in connection with the Plan of Reorganization or otherwise).

 

(viii)                  Neither the Company nor any of its Subsidiaries (A) has
received or applied for a Tax ruling or entered into a closing agreement
pursuant to Section 7121 of the Code (or any predecessor provision or any
similar provision of state, local or foreign Law), in either case that would be
binding upon the Surviving Company, the Company or any of its Subsidiaries after
the Closing Date, (B) is or has been a member of any affiliated, consolidated,
combined or unitary group for purposes of filing Tax Returns or paying Taxes
(other than the group the common parent of which is the Company) or (C) has any
liability for the Taxes of any Person (other than the Company or any Subsidiary
thereof) whether under Treasury Regulation Section 1.1502-6 or any similar

 

20

--------------------------------------------------------------------------------

 

provision of state, local or foreign Law, as a transferee or successor, pursuant
to any Tax sharing or indemnity agreement or other contractual agreement, or
otherwise.

 

(ix)                          Neither the Company nor any of its Subsidiaries
has engaged in any “listed transactions” within the meaning of Treasury
Regulation Section 1.6011-4. Neither the Company nor any of its Subsidiaries has
taken any reporting position on a Tax Return which reporting position (x) if not
sustained would be reasonably likely, absent disclosure, to give rise to a
penalty for substantial understatement of U.S. federal income Tax under
Section 6662 of the Code (or any similar provision of state, local or foreign
Tax Law) and (y) has not adequately been disclosed on a Tax Return in accordance
with Section 6662(d)(2)(B) of the Code (or any similar provision of state, local
or foreign Tax Law).

 

(x)                              No claim involving a material amount of Tax has
been made in writing by a Tax authority in a jurisdiction where the Company or
any of its Subsidiaries does not file Tax Returns that it is or may be subject
to taxation by that jurisdiction.

 

(xi)                          Any material VAT that has been deducted by or
reimbursed to the Company or any of its Subsidiaries has been deducted or
reimbursed in compliance with applicable Laws.

 

(xii)                      The Company has validly elected to be classified as
an association taxable as a corporation, and is so classified, for United States
federal tax purposes.

 

(xiii)                  Neither the Company nor any of its Subsidiaries will
have a material inclusion under Section 951 of the Code at the end of the
taxable year of a controlled foreign corporation that includes the February 28,
2013 as a result of any transactions or activities occurring between the
beginning of such taxable year through the February 28, 2013.

 

(m)                          Labor and Employment Matters.

 

(i)                                  As of the date of this Agreement, neither
the Company nor any of its Subsidiaries is a party to any collective bargaining
agreement or other agreement with a labor union, nor is any such agreement being
negotiated as of the date of this Agreement. To the Knowledge of the Company, as
of the date of this Agreement, (A) there are no activities or proceedings of any
labor organization to organize any employees of the Company or any of its
Subsidiaries, and (B) no demand for recognition as the exclusive bargaining
representative of any employees of the Company or any of its Subsidiaries is
pending by or on behalf of any labor or equivalent organization. As of the date
of this Agreement, there is no pending or, to the Knowledge of the Company,
threatened, in writing, strike, lockout or work stoppage. With respect to the
Company and each of its Subsidiaries, (A) as of the date of this Agreement, no
material unfair labor practice charge or complaint is pending or, to the
Knowledge of the Company, threatened in writing, (B) no material grievance or
arbitration proceeding arising under any collective bargaining agreement or
other agreement with a labor union is pending or, to the Knowledge of the
Company, threatened, and (C) no material Action by or on behalf of any employee,
prospective employee, former employee, labor organization or other
representative of the Company’s employees is pending or, to the Knowledge of the
Company, threatened.

 

21

--------------------------------------------------------------------------------

 

(ii)                              (A) Except as would not be material to the
Company and its Subsidiaries, the Company and its Subsidiaries are in compliance
in all respects with all Laws relating to the employment of labor, including
those related to wages, hours, immigration and collective bargaining; (B) except
as would not be material to the Company and its Subsidiaries, there is no charge
of discrimination in employment or employment practices, for any reason,
including age, gender, race, religion or other legally protected category, which
is now pending before the United States Equal Employment Opportunity Commission,
or any other Governmental Entity in any jurisdiction in which the Company or any
of its Subsidiaries has employed or currently employs any person; (C) except as
would not be material to the Company and its Subsidiaries, neither the Company
nor any of its Subsidiaries has misclassified any person as an independent
contractor, temporary employee, leased employee, volunteer or any other servant
or agent compensated other than through reportable wages as an employee of the
Company or any of its Subsidiaries (each a “Contingent Worker”) and no
Contingent Worker has been improperly excluded from any Company Plan and (D) the
consent of or consultation of any labor or trade union, works council or any
other employee representative body is not required for the Company to enter into
this Agreement or to consummate any of the transactions contemplated by this
Agreement.

 

(iii)                          This Section 3.1(m) includes the sole and
exclusive representations and warranties of the Company and its Subsidiaries
relating to labor and employment matters.

 

(n)                              Intellectual Property.

 

(i)                                  Section 3.1(n)(i) of the Company Disclosure
Letter lists all issued patents and pending patent applications, trademark
registrations and applications for registrations of trademarks, and copyright
registrations owned, or under a duty of assignment to, the Company or any of its
Subsidiaries (collectively, the “Registered Company Intellectual Property”), in
each case indicating for each the name of the owner, the application or
registration number, and the date and jurisdiction of filing or issuance. All of
the Registered Company Intellectual Property owned by the Company or any of its
Subsidiaries is (A), subsisting and, to the Knowledge of the Company, valid and
enforceable and (B) not subject to any outstanding Order (excluding any interim
or non-final administrative actions or proceedings before the United States
Patent and Trademark Office or any foreign counterpart thereof), adversely
affecting the Company’s or its Subsidiaries’ rights in and to such Registered
Company Intellectual Property in any material respect. The Company or a
Subsidiary exclusively owns, free of all Liens (other than Permitted Liens), all
Registered Company Intellectual Property and owns or, to the Knowledge of the
Company, possesses the right to use, all other Intellectual Property used in and
material to the business of the Company and its Subsidiaries as presently
conducted (collectively, the “Company Intellectual Property”).

 

(ii)                              To the Knowledge of the Company, the Company’s
and its Subsidiaries’ businesses as presently conducted do not infringe or,
misappropriate the Intellectual Property rights of any third party. There are no
material Actions before any Governmental Entity or any arbitrator against the
Company or any of its Subsidiaries alleging infringement or misappropriation of
any Person’s Intellectual Property rights by the Company or any of its
Subsidiaries. To the Knowledge of the Company, there is no

 

22

--------------------------------------------------------------------------------

 

material infringement or misappropriation of the Company Intellectual Property
rights owned by the Company or any of its Subsidiaries by any other Person.

 

(iii)                          The Company and its Subsidiaries have taken
commercially reasonable measures to maintain and protect the material Company
Intellectual Property owned by the Company or its Subsidiaries, including taking
reasonable measures to maintain the confidentiality and value of all material
confidential information used or held for use in the operation of business of
the Company and its Subsidiaries.

 

(iv)                          To the Knowledge of the Company, no employee,
contractor or agent of the Company or any of its Subsidiaries is in default or
breach of any term of any employment agreement, non-disclosure agreement,
assignment of invention agreement or similar agreement relating to the
protection, ownership, development, use or transfer of Company Intellectual
Property in any material respect.

 

(v)                              In the past two (2) years, no university,
military, educational institution, research center or Governmental Entity has
funded or sponsored research and development conducted in connection with the
business of the Company and its Subsidiaries which has any claim of right to,
ownership of or other Lien on any Company Intellectual Property.

 

(o)                              Insurance. The Company and its Subsidiaries
maintain property, workers’ compensation, general liability, environmental,
directors’ and officers’ liability, fiduciary, aviation, business interruption,
employment practices liability and other insurance policies (“Company Insurance
Policies”) in such amounts, with such deductibles and against such risks and
losses as the Company determines are reasonable for the assets of the Company
and its Subsidiaries and the conduct of their businesses. The Company Insurance
Policies are in full force and effect and all premiums due with respect to all
such insurance policies have been paid. The Company and its Subsidiaries have
not received written notice of cancellation or termination of (other than in
connection with normal renewals) any such Company Insurance Policies.

 

(p)                              Property.

 

(i)                                  Section 3.1(p) of the Company Disclosure
Letter sets forth the address of each Owned Real Property. With respect to each
Owned Real Property: (A) the Company or one of its Subsidiaries will have good
and marketable fee simple title to such Owned Real Property, free and clear of
all Liens (other than Permitted Liens) as of the Closing Date, (B) neither the
Company or nor any of its Subsidiaries has leased or otherwise granted to any
Person the right to use or occupy such Owned Real Property or any portion
thereof, and (C) other than the right of Parent and Merger Sub pursuant to this
Agreement, there are no outstanding options, rights of first offer or rights of
first refusal to purchase such Owned Real Property or any portion thereof or
interest therein.

 

(ii)                              Section 3.1(p) of the Company Disclosure
Letter sets forth a true and complete list of all leases and subleases relating
to real property entered into by the Company or any of its Subsidiaries pursuant
to which the annual rent is in excess of $100,000 (the “Lease Documents”), the
street address of each such parcel, and the identity of the lessor, lessee and
current occupant of each such property. The Company has provided Parent true and
complete copies of all Lease Documents (other than immaterial amendments,
supplements, notices and similar ancillary documents relating to

 

23

--------------------------------------------------------------------------------

 

such Lease Documents). Each Lease Document applicable to property located within
the United States is a valid and binding obligation on the Company or Subsidiary
party thereto and is enforceable and in full force and effect in accordance with
its terms, subject to proper authorization and execution of such Lease Document
by the other party thereto and the application of the Bankruptcy and Equity
Exception. Neither the Company nor any of its Subsidiaries is in material
default or material breach of any such Lease Document, and, to the Company’s
Knowledge, no event has occurred which, with notice, lapse of time or both,
would constitute a material default or material breach of any such Lease
Document by any of the Company or its Subsidiaries. Neither the Company nor any
of its Subsidiaries has exercised or given any notice of exercise, nor has any
lessor or landlord exercised or received any notice of exercise of, any option
right of first offer or right of first refusal contained in any such Lease
Document, including any such option or right pertaining to purchase, expansion,
renewal, extension or relocation other than any renewal or extension in the
ordinary course of business. The execution, delivery and performance of this
Agreement by the Company does not, and the consummation of the Merger and the
other transactions contemplated hereby will not, constitute or result in any
material breach or violation of, or constitute a material default (or an event
which with notice or lapse of time or both would become a material default),
prevent assignment or give rise to any right of termination, cancellation,
amendment or acceleration of, any Lease Documents.

 

(iii)                          Except for assets disposed of by the Company or
its Subsidiaries in the ordinary course of business since the date of the Latest
Balance Sheet or as contemplated by this Agreement, the Company or one of its
Subsidiaries owns good title to, or holds pursuant to valid and enforceable
leases of, all of the material tangible personal property shown to be owned or
leased by it on the Latest Balance Sheet or acquired after the date thereof,
free and clear of all Liens, other than Permitted Liens.

 

(q)                              Contracts.

 

(i)                                  Except for this Agreement and any
agreements entered into on the date hereof in connection with this Agreement,
none of the Company or any of its Subsidiaries is a party to or bound by any
Contract as of the date of this Agreement:

 

(A)                          that prohibits the Company or any of its
Subsidiaries from competing with any Person or from engaging in any line of
business or activity in any geographic area;

 

(B)                           that contains an obligation, or a put, call or
similar right, pursuant to which the Company or any of its Subsidiaries is
required to purchase or sell, as applicable, any equity interests of any Person
or assets;

 

(C)                           that grants any rights of first refusal, rights of
first offer or other similar rights to any Person with respect to any material
asset of the Company or its Subsidiaries;

 

(D)                          (i) that was entered into since February 28, 2013,
for the disposition, directly or indirectly (by merger or otherwise), of
material assets or capital stock or other equity interests of any Person, other
than sales of Inventory in the ordinary course of business, or (ii) that was
entered into since February 28,

 

24

--------------------------------------------------------------------------------

 

2013, for the acquisition, directly or indirectly, of any business or businesses
of any Person;

 

(E)                            that relates to or evidences Indebtedness, but
excluding (i) such Contracts between wholly-owned Subsidiaries of the Company
(or between a wholly-owned Subsidiary of the Company and the Company) and
(ii) advances to employees for business expenses in the ordinary course of
business;

 

(F)                             under which any Person (other than the
Subsidiaries of the Company) has directly or indirectly guaranteed or assumed
Indebtedness of the Company or its Subsidiaries;

 

(G)                          that is (i) a license agreement pursuant to which
the Company or any of its Subsidiaries is licensed by a third party to use any
Intellectual Property for which the Company or any of its Subsidiaries has made
aggregate payments in excess of $1,000,000 since January 1, 2013 (other than
licenses of commercially available software or any software licensed pursuant to
a software “shrink wrap,” “click wrap,” or “click-through” license) or (ii) an
agreement pursuant to which a third party has licensed any material Intellectual
Property owned or purported to be owned by, or under a duty of assignment to,
the Company or any of its Subsidiaries (other than non-exclusive licenses in the
ordinary course of business);

 

(H)                          pursuant to which the Company or its Subsidiaries
is the lessee of, holds or uses, in each case outside of the ordinary course of
business, equipment or other tangible personal property owned by any third party
for an annual rent in excess of $50,000;

 

(I)                                that obligates the Company or any of its
Subsidiaries to make any capital investment or capital expenditure not
contemplated by the five-year plan set forth in Section 4.1(a)(xiv) of the
Company Disclosure Letter and in an amount in excess of $250,000 individually or
$5,000,000 in the aggregate;

 

(J)                                under which any Person has an exclusive right
to purchase products or services from the Company or any of its Subsidiaries;

 

(K)                          that is a joint venture under which the Company or
any of its Subsidiaries is obligated to manufacture, produce, develop, or
service any existing or new product line with any Person;

 

(L)                            that is a collective bargaining agreement or
Contract with any union to which the Company or any Subsidiary of the Company is
a party;

 

(M)                        that is an employment agreement or Contract with an
independent contractor or consultant (or similar arrangements) that provides for
annual amounts payable to such independent contractor or consultant in excess of
$100,000 to which the Company or any Subsidiary is a party and which is not
cancellable without material penalty or without more than 90 days’ notice;

 

25

--------------------------------------------------------------------------------

 

(N)                          that provides for total annual base salary in
excess of $200,000 per year for any employee, officer, director or independent
contractor or consultant of the Company or any of its Subsidiaries;

 

(O)                          that is for goods purchased by or services rendered
to customers of the Company and its Subsidiaries in respect of the nine-month
period ended September 30, 2013 and in an amount in excess of $10,000,000; or

 

(P)                             excluding the types of Contracts described in
clauses (A) through (O) and excluding Government Contracts, that is not
otherwise disclosed pursuant to this Section 3.1(q) and generated annual revenue
or involved payments or consideration to the Company in excess of $2,000,000 for
the nine-month period from January 1, 2013 through September 30, 2013 (each
Contract described in clauses (A) through (O) in effect as of the date of this
Agreement is referred to herein as a “Company Material Contract”).

 

(ii)                              The Company has made available to Parent
correct and complete copies of each Company Material Contract (or form thereof),
other than (x) any Company Material Contract that is subject to confidentiality
restrictions and (y) any immaterial amendments, supplements, notices, statements
of work or similar ancillary documents related to a Company Material Contracts.
Each of the Company Material Contracts is valid and binding on the Company and
each of its Subsidiaries that is a party thereto and, to the Knowledge of the
Company, each other party thereto and is in full force and effect and is
enforceable against the Company and each of its Subsidiaries that is a party
thereto, as applicable, and, to the Knowledge of the Company, each other party
thereto, in each case subject to the Bankruptcy and Equity Exception and except
where any such failure to be valid and binding or to be in full force and effect
would not reasonably be expected to, individually or in the aggregate,
materially and adversely affect the Company and its Subsidiaries taken as a
whole. There is no material default under any Company Material Contract by the
Company or any of its Subsidiaries that is a party thereto, and no event has
occurred that with notice or lapse of time or both would constitute a material
default thereunder by the Company or any of its Subsidiaries that is a party
thereto, and neither the Company nor any of its Subsidiaries has received notice
of any such default or event, or of any alleged default or of any termination or
non-renewal of any Company Material Contract.

 

(r)                                 Brokers and Finders. Other than Credit
Suisse Securities (USA) LLC and Morgan Stanley & Co. LLC, neither the Company
nor any of its officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or finder’s
fees in connection with the Merger or the other transactions contemplated in
this Agreement.

 

(s)                                Affiliate Contracts. Neither the Company nor
any of its Subsidiaries is party to any Contract with any of the Company’s or
its Subsidiaries’ respective directors, officers or Affiliates that involves
annual payments to or from the Company and its Subsidiaries in an amount in
excess of $100,000, except for Contracts (i) providing for employment
arrangements, including the Company Plans, employment agreements, incentive
compensation and equity arrangements, or (ii) entered into in the ordinary
course of business on terms no less favorable to the Company or its applicable
Subsidiary than would be obtained in a comparable arm’s length

 

26

--------------------------------------------------------------------------------

 

transaction with a Person that is not a director, officer or Affiliate of the
Company or any of its Subsidiaries.

 

(t)                                 Anti-Bribery Compliance. Neither the Company
nor any of its Subsidiaries, nor, to the Knowledge of the Company, any director,
officer, employee, or third party intermediary acting on behalf of the Company
or any of its Subsidiaries has: (i) in violation of applicable Law, provided,
offered, gifted or promised, directly or indirectly, anything of value to any
Government Official, political party or candidate for government office, nor
provided or promised anything of value to any other Person for the purpose of
(A) influencing any act or decision of such official, party or candidate in his
or her official capacity, inducing such official, party or candidate to do or
omit to do any act in violation of their lawful duty, or securing any improper
advantage for the benefit of the Company or its Subsidiaries or (B) inducing
such official, party or candidate to use his or her influence with his or her
government or instrumentality to affect or influence any act or decision of such
government or instrumentality, in order to assist the Company or its
Subsidiaries in obtaining or retaining business for or with, or directing
business to, any Person; or (ii) violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended, or similar applicable Laws.

 

(u)                              Government Contracts.

 

(i)                                  Set forth in Section 3.1(u)(i) of the
Company Disclosure Letter is a list of each Government Contract that generates
annual revenue in excess of $20,000,000, the period of performance for which has
not expired (other than task and delivery orders). Set forth in
Section 3.1(u)(i) of the Company Disclosure Letter is a list of each outstanding
Government Bid that is a binding offer that will result in a Government Contract
that would generate annual revenue in excess of $20,000,000 and has not been
accepted or rejected.

 

(ii)                              With respect to each Government Contract:
(A) each such Government Contract is binding on the Company or its Subsidiary,
as applicable, and is in full force and effect; and is enforceable against the
Company and each of its Subsidiaries that is a party thereto, as applicable,
and, to the Knowledge of the Company, each other party thereto, in each case
subject to the Bankruptcy and Equity Exception, (B) the Company and its
Subsidiaries have complied in all material respects with all terms and
conditions of such Government Contract, including all clauses, provisions,
representations, certifications and requirements incorporated expressly by
reference therein, and all requirements thereunder relating to the safeguarding
of, and access to, classified information, and there is no material default
under any Government Contract by the Company or any of its Subsidiaries that is
a party thereto, (C) neither any Governmental Entity nor any prime contractor
has notified the Company or any of its Subsidiaries in writing that any of them
have breached or violated in any material respect any Law or certification or
representation of such Government Contract, and (D) neither the Company nor any
of its Subsidiaries has received any written notice of termination for default,
cure notice or show cause notice pertaining to such Government Contract, except,
in each case of clauses (A) through (D), as would not reasonably be expected to,
individually or in the aggregate, materially and adversely affect the Company
and its Subsidiaries taken as a whole.

 

(v)                              Vendors. Section 3.1(v) of the Company
Disclosure Letter contains a list of the top ten (10) vendors, subcontractors or
suppliers of the Company and its Subsidiaries on

 

27

--------------------------------------------------------------------------------

 

the basis of amounts paid by the Company and its Subsidiaries for goods provided
or services rendered for the nine-month period ended September 30, 2013,
excluding any bankruptcy advisors (the “Material Vendors”) and the amount for
which the Company and such Subsidiary has paid the supplier during such period.
Since February 28, 2013 through the date of this Agreement, no Material Vendor
has cancelled, terminated or materially and adversely modified, or, to the
Knowledge of the Company, threatened to cancel, terminate or materially and
adversely modify its relationship with any of the Company or its Subsidiaries.

 

(w)                          Product Warranties; Regulatory Compliance Regarding
Products. The Company has made available to Parent copies of the current form of
all material, standard forms of warranties applicable to the Products of the
Company and its Subsidiaries.

 

(x)                              Inventory. All Inventory of the Company and its
Subsidiaries reflected on the Financial Statements, is net of reserves for
excess, obsolete and other valuation adjustments, and consists of raw materials,
work in process, and finished goods. The Inventory (i) is valued on the
Financial Statements at the lower of cost or net realizable value and (ii) since
the date of the Latest Balance Sheet, has been maintained in the ordinary course
of business consistent with past practice. All reserves for any obsolete and
slow moving items have been established in accordance with GAAP as of the date
hereof, and there has been no material adverse change in such reserves or the
valuation of the Inventory since the date of the Latest Balance Sheet.

 

(y)                              Receivables. Section 3.1(y) of the Company
Disclosure Letter contains a list of the Receivables as of the date of the
Latest Balance Sheet that as of such date had been outstanding for more than 120
days. Except to the extent, if any, reserved for on the Financial Statements,
all Receivables reflected on the Financial Statements constitute or will
constitute, as the case may be, only valid, claims of the Company or a
Subsidiary of the Company not subject to valid claims of setoff or other
defenses or counterclaims other than normal discounts in the ordinary course of
business consistent with past practice.

 

(z)                               Trust Agreement. The Company is not prohibited
under the Plan of Reorganization from forming and operating the Trust as
described in this Agreement and the Trust Agreement.

 

(aa)                        Fairness Opinion. The Company Board has received the
opinion of Credit Suisse Securities (USA) LLC to the effect that, as of the date
of such opinion and subject to the assumptions, qualifications, limitations and
other matters considered in connection with the preparation of such opinion, the
Merger Consideration to be received by the holders of Units in the Intermediate
Merger and the Merger taken together as a single, unitary transaction is fair,
from a financial point of view, to such holders. It is agreed and understood
that such opinion is for the benefit of the Company Board and may not be relied
on by Parent or Merger Sub.

 

(bb)                      Transaction Expenses. Section 3.1(bb) of the Company
Disclosure Letter sets forth the good faith estimate of the Company of all costs
and expenses of the Company’s financial advisors in connection with the Merger
and the other transactions contemplated by this Agreement.

 

(cc)                        NO OTHER REPRESENTATIONS AND WARRANTIES. EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH IN THIS SECTION 3.1, THE COMPANY EXPRESSLY
DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR
IMPLIED, AS TO THE CONDITION, VALUE OR QUALITY

 

28

--------------------------------------------------------------------------------

 

OF ITS BUSINESSES OR ITS ASSETS, INCLUDING WITH RESPECT TO ANY INFORMATION
PROVIDED OR MADE AVAILABLE TO PARENT OR MERGER SUB OR ANY OF THEIR RESPECTIVE
AFFILIATES OR REPRESENTATIVES OR ANY OTHER PERSON (INCLUDING IN CERTAIN “DATA
ROOMS,” CONFIDENTIAL INFORMATION MEMORANDA, MANAGEMENT PRESENTATIONS OR DUE
DILIGENCE DISCUSSIONS IN ANTICIPATION OR CONTEMPLATION OF ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT), AND THE COMPANY SPECIFICALLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE, SUITABILITY
OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO ITS ASSETS, ANY
PART THEREOF, THE WORKMANSHIP THEREOF, AND THE ABSENCE OF ANY DEFECTS THEREIN,
WHETHER LATENT OR PATENT, IT BEING UNDERSTOOD THAT SUCH SUBJECT ASSETS ARE BEING
ACQUIRED “AS IS, WHERE IS” ON THE CLOSING DATE, AND IN THEIR THEN PRESENT
CONDITION.

 

Section 3.2                       Representations and Warranties of Parent and
Merger Sub. Except as set forth in the corresponding sections or subsections of
the Disclosure Letter delivered to the Company by Parent prior to entering into
this Agreement (the “Parent Disclosure Letter”) (it being agreed that disclosure
of any item in any section or subsection of the Parent Disclosure Letter shall
be deemed disclosure with respect to any other section or subsection of the
Parent Disclosure Letter to which the relevance of such item is reasonably
apparent on the face of such disclosure), Parent and Merger Sub each hereby
represent and warrant to the Company as of the date hereof and as of the Closing
Date (except to the extent that any such representation and warranty, expressly
speaks as of another date, in which case, such representation and warranty shall
be true and correct only as of such other date) that:

 

(a)                               Organization, Good Standing and Qualification.
Each of Parent and Merger Sub (i) is a legal entity duly organized, validly
existing and in good standing (with respect to jurisdictions that recognize the
concept of good standing) under the Laws of the jurisdiction of its
organization, (ii) has all requisite corporate or similar power and authority to
own, lease and operate its properties and assets and to carry on its business as
presently conducted and (iii) is qualified to do business and is in good
standing (with respect to jurisdictions that recognize the concept of good
standing) as a foreign corporation or other legal entity in each jurisdiction
where the ownership, leasing or operation of its assets or properties or conduct
of its business as presently conducted requires such qualification, except, in
the case of clauses (ii) and (iii) of this sentence, where the failure to be so
qualified or in good standing or to have such power or authority, would not
reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect. Parent has made available to the Company complete and
correct copies of the certificate of incorporation and bylaws or comparable
formation and governing documents of each of Parent and Merger Sub, each as
amended on the date of this Agreement, and each as so made available is in full
force and effect.

 

(b)                              Corporate Authority. The board of directors of
Parent and the sole member of Merger Sub has approved this Agreement, the Merger
and the other transactions contemplated hereby. No vote of holders of capital
stock of Parent is necessary to approve this Agreement, the Merger or the other
transactions contemplated hereby. Each of Parent and Merger Sub has all
requisite corporate power and authority and has taken all corporate action
necessary in order to execute, deliver and perform its obligations under this
Agreement (other than approval of this Agreement by Parent as the sole unit
holder of Merger Sub, which approval will occur immediately following the
execution of this Agreement) and to consummate the Merger. This

 

29

--------------------------------------------------------------------------------

 

Agreement has been duly executed and delivered by each of Parent and Merger Sub
and, assuming the valid authorization, execution and delivery of this Agreement
by the other Parties, constitutes a legal, valid and binding agreement of Parent
and Merger Sub enforceable against each of Parent and Merger Sub in accordance
with its terms, subject to the Bankruptcy and Equity Exception.

 

(c)                               Governmental Filings; No Violations; Etc.

 

(i)                                  Except for (A) compliance with, and filings
under, the HSR Act, (B) the filing of the Delaware Certificate of Merger and
other appropriate merger documents required by the LLCA with the Secretary of
State of the State of Delaware, (C) compliance with and filings under ITAR, and
(D) such other items as disclosed in Section 3.2(c)(i) of the Parent Disclosure
Letter (the items set forth above in clauses (A), (B) and (C), the “Parent
Required Governmental Approvals”), no notices, reports or other filings are
required to be made by Parent or Merger Sub with, nor are any consents,
registrations, approvals or authorizations required to be obtained by Parent or
Merger Sub from, any Governmental Entity in connection with the execution,
delivery and performance of this Agreement by Parent and Merger Sub or the
consummation of the Merger and the other transactions contemplated by this
Agreement, other than such items that the failure to make or obtain, as the case
may be, would not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect.

 

(ii)                              The execution, delivery and performance of
this Agreement by each of Parent and Merger Sub does not, and the consummation
of the Merger and the other transactions contemplated hereby will not,
constitute or result in (A) a breach or violation of, or a default under, the
respective certificates of incorporation, bylaws or comparable governing
documents of Parent or Merger Sub, (B) any breach or violation of, or a default
(or an event which with notice or lapse of time or both would become a default)
under, or give rise to any right of termination, cancellation, amendment or
acceleration of, any Contract to which Parent or Merger Sub is party, (C) the
creation of any Lien (other than Permitted Liens) on Parent or Merger Sub or any
of their properties, rights or assets, or (D) assuming compliance with the
matters referred to in Section 3.2(c)(i), under any Law or Order to which Parent
or Merger Sub or any of their respective properties or assets is subject,
except, in the case of clauses (B), (C) and (D) of this sentence, where such
breach, violation, termination, default, creation, acceleration or change that
would not reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect.

 

(d)                             Litigation. There are no Actions pending or, to
the Knowledge of Parent, threatened against Parent or Merger Sub that seek to
enjoin, or would reasonably be expected to have the effect of preventing, making
illegal or otherwise interfering with, any of the transactions contemplated by
this Agreement.

 

(e)                               Sufficient Funds. As of the date of this
Agreement, Parent has sufficient funds available, and, at the Closing, Parent
will have sufficient funds available to satisfy its obligations under this
Agreement, including to pay at the Closing (i) the aggregate amounts required to
be paid pursuant to Section 2.2(c), (ii) any and all fees and expenses required
to be paid by Parent, Merger Sub and the Surviving Company in connection with
the Merger and the transactions contemplated by this Agreement and (iii) any
repayment of any outstanding Indebtedness of the Company and its Subsidiaries.

 

30

--------------------------------------------------------------------------------

 

(f)                                Merger Sub. All of the issued and outstanding
limited liability company interests of Merger Sub are, and at the Effective Time
will be, owned by Parent, free and clear of all Liens. Merger Sub has not
conducted any business prior to the date of this Agreement and has no, and prior
to the Effective Time will have no, assets, liabilities or obligations of any
nature other than those incident to its formation and pursuant to this Agreement
and the Merger and the other transactions contemplated by this Agreement. Merger
Sub does not have outstanding any option, warrant, right or any other agreement
pursuant to which any Person may acquire any equity security of Merger Sub.

 

(g)                              Brokers. Other than J.P. Morgan Securities LLC,
no agent, broker, finder or investment banker is entitled to any brokerage,
finder’s or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent or Merger Sub for which the Company could have any liability.

 

(h)          Non-Reliance on Company Estimates, Projections, Forecasts,
Forward-Looking Statements and Business Plans. In connection with the due
diligence investigation of the Company by Parent and Merger Sub, Parent and
Merger Sub have received and may continue to receive from the Company certain
estimates, projections, forecasts, judgments, opinions and other forward-looking
information, as well as certain business plan and cost related plan information,
regarding the Company, its Subsidiaries and their respective businesses and
operations (including any estimates, projections, forecasts, judgments, opinions
or other forward-looking information, business plans, cost-related plans or
other material provided or made available to Parent, Merger Sub or any other
Person in certain “data rooms,” confidential information memoranda, management
presentations or due diligence discussions in anticipation or contemplation of
any of the transactions contemplated by this Agreement). Parent and Merger Sub
hereby acknowledge that (i) there are uncertainties inherent in attempting to
make such estimates, projections, forecasts, judgments, opinions and other
forward-looking statements, as well as in such business plans and cost related
plans, with which Parent and Merger Sub are familiar, (ii) Parent and Merger Sub
are taking full responsibility for making, and are relying solely on, their own
evaluation of the adequacy and accuracy of all estimates, projections,
forecasts, judgments, opinions and other forward-looking information, as well as
such business plans and cost related plans, so furnished to them (including the
reasonableness of the assumptions underlying such estimates, projections,
forecasts, judgments, opinions, forward-looking information, business plans or
cost-related plans) and (iii) other than in the case of fraud or intentional
misrepresentation, Parent and Merger Sub will have no claim against the Company,
any of its Subsidiaries, or any of their respective equityholders, directors,
officers, employees, Affiliates, advisors, agents or representatives, or any
other Person, with respect thereto. Accordingly, Parent and Merger Sub hereby
acknowledge that (A) none of the Company, any of its Subsidiaries, or any of
their respective equityholders, directors, officers, employees, Affiliates,
advisors, agents or representatives, nor any other Person, has made or is making
any representation or warranty with respect to such estimates, projections,
forecasts, judgments, opinions, forward-looking statements, business plans or
cost-related plans (including the reasonableness of the assumptions underlying
such estimates, projections, forecasts, judgments, opinions, forward-looking
statements, business plans or cost-related plans) and (B) neither the Company
nor any of its Subsidiaries, nor any of their respective equityholders,
directors, officers, employees, Affiliates, advisors, agents or representatives,
nor any other Person, will have or be subject to any liability or
indemnification obligation to Parent, Merger Sub or any other Person resulting
from the delivery, dissemination or any other distribution to Parent, Merger Sub
or any other Person, or the use by Parent, Merger Sub or any other Person, of

 

31

--------------------------------------------------------------------------------

 

any such estimates, projections, forecasts, judgments, opinions, forward-looking
statements, business plans or cost-related plans provided or made available to
them by the Company or any of its Subsidiaries, or any of their respective
equityholders, directors, officers, employees, Affiliates, advisors, agents or
representatives, or any other Person.

 

ARTICLE IV

 

COVENANTS

 

Section 4.1                       Interim Operations.

 

(a)                               From the date of this Agreement and until the
Effective Time or the earlier termination of this Agreement in accordance with
its terms, except (w) as set forth in Section 4.1(a) of the Company Disclosure
Letter, (x) as otherwise expressly contemplated or permitted by this Agreement,
(y) to the extent consented to in writing by Parent (which consent shall not be
unreasonably withheld, delayed or conditioned) or (z) as required by applicable
Law or by a Governmental Entity or by any Company Material Contract in effect as
of the date of this Agreement, the Company shall use reasonable best efforts to
cause the business of it and its Subsidiaries to be conducted in the ordinary
course of business and, to the extent consistent therewith, it shall, and shall
cause its Subsidiaries to, use their respective reasonable best efforts to
preserve their business organizations intact and maintain their existing
relationships with Governmental Entities, customers, suppliers, distributors and
employees. Notwithstanding the generality of the foregoing, and subject to the
exceptions set forth in clauses (w), (x), (y) and (z) of the immediately
preceding sentence, the Company shall not and shall not permit its Subsidiaries
to:

 

(i)                                  other than in connection with the
Intermediate Merger, amend the Operating Agreement or the certificate of
incorporation, bylaws or comparable formation or governing documents of the
Company or any of the Company’s Subsidiaries;

 

(ii)                              acquire (whether by merger, consolidation or
acquisition of stock or assets or any other business combination) (A) any Person
or any division thereof or equity outside the ordinary course of business from
any other Person (other than the Company or any direct or indirect wholly-owned
Subsidiary of the Company) or (B) any assets (other than in the ordinary course
of business and consistent with past practice), in the case of (B) with a value
or purchase price in excess of $250,000 individually;

 

(iii)                          other than in connection with the Intermediate
Merger, merge or consolidate with any other Person or restructure, reorganize or
completely or partially liquidate the Company or any of its Subsidiaries, except
for any such transactions among wholly-owned Subsidiaries of the Company;

 

(iv)                          issue, sell, pledge, dispose of or encumber any
limited liability company interests or equity interests or options, warrants or
other securities, commitments or rights convertible, exchangeable or exercisable
therefor (collectively, “Equity Interests”) of the Company or any of its
Subsidiaries, except issuances or dispositions of (A) Units pursuant to Company
Options outstanding on the date of this Agreement (or which become outstanding
after the date of this Agreement in accordance with this Section 4.1(a)) under
the Management Equity Plan, (B) any capital stock of any of the Company’s
Subsidiaries to the Company or any other of its direct or indirect

 

32

--------------------------------------------------------------------------------

 

wholly-owned Subsidiaries, (C) Units, Restricted Units, Phantom Units, Residual
Units, Company Options and/or rights to acquire Units in connection with grants
or awards of stock-based compensation made in compliance with
Section 4.1(a)(x) hereof or (D) Units as required by the Plan of Reorganization;

 

(v)                              split, combine, subdivide or reclassify any of
the Equity Interests of the Company;

 

(vi)                          declare, set aside, establish a record date for,
or pay any dividends on or make any other distributions (whether payable in
cash, stock, property or a combination thereof) in respect of any of the Equity
Interests of the Company or its Subsidiaries, other than any dividends from any
wholly-owned Subsidiary of the Company to the Company or to another wholly-owned
Subsidiary of the Company;

 

(vii)                      repurchase, redeem or otherwise acquire any of the
Equity Interests of the Company, except for redemptions, purchases or
acquisitions pursuant to the exercise or settlement of Company Options,
Restricted Units, Phantom Units, employee severance, retention, termination,
change of control and other contractual rights existing on the date of this
Agreement on the terms in effect on the date of this Agreement (excluding, for
the avoidance of doubt, the Call Option under the PBGC Call Agreement);

 

(viii)                  incur, or modify in any material respect the terms of,
any material Indebtedness or issue any debt securities or assume, guarantee or
endorse, or otherwise become responsible for, the obligations of any Person
(other than the Subsidiaries of the Company) (in each case, for the avoidance of
doubt, excluding trade payables, capitalized lease obligations, or obligations
issued or assumed as consideration for services or property, including
inventory), except for (A) Indebtedness incurred under the Credit Facilities) in
the ordinary course of business for working capital purposes, (B) letters of
credit issued pursuant to (or guarantees permitted by) the Credit Facilities or
otherwise issued in the ordinary course of business, (C) draws on the ABL
Revolver in accordance with the terms thereof, or (D) interest rate and other
hedging arrangements on customary commercial terms in the ordinary course of
business;

 

(ix)                          grant any Lien on any assets that are material to
the Company and its Subsidiaries taken as a whole, other than Permitted Liens;

 

(x)                              except as required pursuant to Company Plans in
effect prior to the date of this Agreement, or as otherwise required by
applicable Law or this Agreement, (A) grant any severance or termination
payments or benefits to any Employee of the Company or any of its Subsidiaries,
except, in the case of employees who are not executive officers, in the ordinary
course of business, (B) materially increase the compensation, bonus or pensions
or welfare benefits of any employee, except, in the case of employees who are
not executive officers of the Company, in the ordinary course of business,
(C) make any new equity awards to any Employee of the Company or any of its
Subsidiaries, other than (1) grants of Residual Units, (2) new equity awards
made in the ordinary course of business to any Employee hired or engaged by the
Company or any of its Subsidiaries after the date hereof and (3) to the extent
set forth in Section 4.1(a)(x) of the Company Disclosure Letter, annual 2014
grants of Phantom Units, Restricted Units and Company Options to directors as
required by the Director Equity Plan or the

 

33

--------------------------------------------------------------------------------

 

Management Equity Plan, as applicable, or (D) terminate or materially amend any
Company Plan or establish or adopt any plan that would have been a Company Plan
if it had been in effect as of the date hereof;

 

(xi)                          except as required by GAAP, a Governmental Entity
or applicable Law, make any material changes to accounting policies or
principles;

 

(xii)                      other than (A) in the ordinary course of business and
consistent with past practice, or (B) as otherwise contemplated or permitted by
this Section 4.1, (1) enter into any Contract that would have been a Company
Material Contract had it been entered into prior to the date of this Agreement
or (2) terminate, consent to the termination of, materially amend or waive any
material rights under any Company Material Contract in a manner materially
adverse to the Company and its Subsidiaries excluding any termination due to
expiration of such Company Material Contract in accordance with the terms of
such Company Material Contract; provided in each case that the Company and its
Subsidiaries shall be permitted to renew or replace any Company Material
Contract with one or more Contracts on substantially similar terms;

 

(xiii)                  transfer, sell, lease, license, assign or otherwise
dispose of any material assets or businesses of the Company and its Subsidiaries
taken as a whole, including Equity Interests of any of its Subsidiaries, other
than (A) as may be permitted pursuant to this Section 4.1(a), (B) in the
ordinary course of business and in a manner consistent with past practice,
(C) pursuant to Contracts in effect prior to the date of this Agreement, true
and complete copies of which have been provided to Parent (except to the extent
such agreements are subject to confidentiality restrictions), (D) pursuant to
transactions solely among the Company and/or any of its Subsidiaries or
(E) pursuant to licenses or sublicenses of Intellectual Property granted in the
ordinary course of business;

 

(xiv)                  except for the expenditures contemplated by the five-year
plan set forth in Section 4.1(a)(xiv) of the Company Disclosure Letter, make or
authorize any binding capital expenditures in excess of $5,000,000 in the
aggregate;

 

(xv)                      compromise, settle or agree to settle any claims
(A) involving amounts in excess of $1,000,000 individually or $3,000,000 in the
aggregate that are not covered by insurance, or (B) that would impose any
material non-monetary obligations on the Company or its Subsidiaries that would
continue after the Effective Time;

 

(xvi)                  enter into any new line of business material to the
Company and its Subsidiaries, taken as a whole;

 

(xvii)              make, revoke, adopt, file or change any Tax election, any
annual Tax accounting period, any method of Tax accounting, any income Tax
Returns, surrender any claims for Tax refunds, amend any Tax Returns, enter
into, revoke or amend a closing agreement, settle any Tax claim, audit or
assessment, extend any statute of limitations with respect to Tax matters or any
right to claim a refund, or surrender any offset or other reduction in Tax
liability;

 

(xviii)          propose, adopt or enter into a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization
or other

 

34

--------------------------------------------------------------------------------

 

reorganization of the Company or any of its Subsidiaries, except in accordance
with the Plan of Reorganization;

 

(xix)                  fail to maintain insurance in at least such amounts and
against at least such risks and losses as are consistent in all material
respects with the Company’s and its Subsidiaries’ past practice in the ordinary
course of business;

 

(xx)                      make any capital investment in or loan to any Person
(other than the Company or any of its Subsidiaries);

 

(xxi)                  pay any management, monitoring or other shareholder fees
or payments of a similar nature to or for the benefit of any Member or any
Affiliate of any Member (other than the Company or any of its Subsidiaries); or

 

(xxii)              announce an intention to enter into any agreement, or
otherwise make a commitment, to do any of the foregoing prohibited actions.

 

(b)                              Nothing contained in this Agreement is intended
to give Parent or Merger Sub, directly or indirectly, the right to control or
direct the Company’s or its Subsidiaries’ operations prior to the Effective
Time, and nothing contained in this Agreement is intended to give the Company,
directly or indirectly, the right to control or direct Parent’s or its
Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the
Company shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over its and its respective
Subsidiaries’ respective operations.

 

Section 4.2                       Acquisition Proposals.

 

(a)                               Subject to Section 4.2(b) and Section 4.2(c),
at all times during the period from the date of this Agreement to the earlier of
the Effective Time or the termination of this Agreement pursuant to Article VII,
the Company shall not, shall cause its Subsidiaries, directors and officers to
not, and shall instruct its other Representatives and the Unit holders named on
Section 4.2(a) of the Company Disclosure Letter to not (i) solicit, initiate,
propose or knowingly encourage (including by way of furnishing nonpublic
information) or take any other action to facilitate any inquiries or the making
of any proposal or offer (including any proposal or offer to the Members) that
constitutes, or may reasonably be expected to lead to, an Acquisition Proposal,
(ii) enter into, maintain, continue or otherwise engage or participate in any
discussions or negotiations regarding, or furnish to any Person (other than
Parent, Merger Sub or their respective Representatives or the Company’s
Representatives) any information or data relating to, any Acquisition Proposal
or any proposal or offer that could reasonably be expected to lead to an
Acquisition Proposal, (iii) agree to, approve, endorse, recommend, consummate or
execute or enter into any letter of intent, memorandum of understanding,
agreement in principle, merger agreement, acquisition agreement or other similar
agreement providing for an Acquisition Proposal or any proposal or offer that
could reasonably be expected to lead to an Acquisition Proposal, or
(iv) resolve, propose or agree, or authorize any of its Representatives, to do
any of the foregoing. The Company acknowledges and agrees that the doing of any
of the foregoing by any of its Subsidiaries shall be deemed to be a breach by
the Company of this Section 4.2(a). The Company shall, shall cause its
Subsidiaries, directors and officers to, and shall instruct its other
Representatives to, immediately cease and cause to be terminated any and all
discussions and negotiations with any Person with respect to any Acquisition
Proposal, and shall deliver a written notice to each such Person to the effect
that the Company is ending all discussions and

 

35

--------------------------------------------------------------------------------

 

negotiations with such Person with respect to any Acquisition Proposal,
effective on the date hereof. The Company shall not, and shall not permit any
Subsidiary of the Company to, release any third party from, or waive any
provision of, any confidentiality or standstill agreement to which it is a party
and the Company shall, to the extent possible, promptly take all steps necessary
to terminate or cause to be terminated any such waiver previously granted with
respect to any provision of any such confidentiality or standstill agreement;
provided that the Company Board may provide such release or waiver to make an
acquisition proposal if it first determines in good faith, after consultation
with outside legal counsel, that the failure to grant such consent or
authorization would be inconsistent with the Company Board’s fiduciary duties
under applicable Law (including, for the avoidance of doubt, Section 3.10(a) of
the Operating Agreement). The Company shall as promptly as reasonably
practicable request each Person that has heretofore executed a confidentiality
agreement in connection with such Person’s consideration of acquiring (whether
by merger, acquisition of stock or assets or otherwise) the Company or any of
its Subsidiaries, to return (or if permitted by the applicable confidentiality
agreement, destroy) all information required to be returned (or, if applicable,
destroyed) by such Person under the terms of the applicable confidentiality
agreement.

 

(b)

 

(i)                                  Notwithstanding the provisions of
Section 4.2(a), Section 4.2(b)(i) or anything else in this Agreement to the
contrary, at any time prior to the end of the Minimum Waiting Period, the
Company may (subject to compliance with this Section 4.2(b)(i)), in response to
an inquiry regarding or constituting an Acquisition Proposal from any Person
that the Company Board determines in good faith is reasonably capable of making
a bona fide Acquisition Proposal, provide a copy of the Confidential Information
Memorandum to such Person pursuant to a Qualifying Confidentiality Agreement;
provided that the foregoing shall not permit the Company to furnish additional
confidential information with respect to the Company and its Subsidiaries or
participate in discussions and negotiations with such Person except in
compliance with Section 4.2(b)(i); provided further that the Company shall have
provided written notice to Parent of its intent to furnish a copy of the
Confidential Information Memorandum to such Person, such notice to include the
identity of such Person.

 

(ii)                              Notwithstanding the provisions of
Section 4.2(a) or Section 4.2(b)(i) or anything else in this Agreement to the
contrary, at any time prior to the end of the Minimum Waiting Period, the
Company may, subject to compliance with this Section 4.2(b)(i), in response to
an unsolicited, bona fide written Acquisition Proposal from any Person after the
date of this Agreement that did not arise from a breach by the Company, or any
of its Subsidiaries, officers, directors or employees of this Section 4.2 that
the Company Board determines in good faith, after consultation with its
independent financial advisor and outside legal counsel, constitutes or may
reasonably be expected to lead to a Superior Proposal, and after the Company
Board having determined in good faith, after consultation with outside legal
counsel, that failure to take the following actions would be inconsistent with
the Company Board’s fiduciary duties under applicable Law (including, for the
avoidance of doubt, Section 3.10(a) of the Operating Agreement), (A) furnish
confidential information with respect to the Company and its Subsidiaries to the
Person making such Acquisition Proposal (and such Person’s Representatives)
pursuant to a customary standstill and confidentiality agreement (which need not
restrict such Person from making a confidential Acquisition Proposal to the

 

36

--------------------------------------------------------------------------------

 

Company Board but which shall not include any provision granting such Person
exclusive rights to negotiate with the Company or having the effect of
prohibiting the Company from satisfying its obligations under this Agreement) on
terms no less favorable in any material respect to the Company than those
contained in the Confidentiality Agreement (a “Qualifying Confidentiality
Agreement”); provided, that the Company shall have provided written notice to
Parent of its intent to furnish information or enter into discussions with such
Person prior to first (with respect to such Person) taking any such action;
provided further that the Company shall simultaneously make available to Parent
any information concerning the Company and its Subsidiaries that is provided to
any Person making such Acquisition Proposal that is given such access and which
information was not previously made available to Parent or its Representatives
and (B) participate in discussions and negotiations with the Person making such
unsolicited bona fide written Acquisition Proposal (and such Person’s
Representatives) regarding such Acquisition Proposal. Notwithstanding the
foregoing, the Company shall not provide or be required to provide any
commercially sensitive non-public information to any competitor in connection
with the actions permitted or required by clause (A) of this Section 4.2(b)(i),
except in a manner consistent with the Company’s past practices in dealing with
the disclosure of such information in the context of considering Acquisition
Proposals prior to the date of this Agreement.

 

(iii)                          The Company shall, as promptly as reasonably
practicable (and in any event, within twenty-four (24) hours), advise Parent
orally and in writing of the receipt of any proposals, inquiries or offers with
respect to an Acquisition Proposal after the date of this Agreement, including
any request for discussions or negotiations and any request for information
relating to the Company or any of its Subsidiaries or for access to the
business, properties, assets, books or records of the Company or any of its
Subsidiaries. Such notice shall indicate the material terms and conditions of
any such Acquisition Proposal (including, if applicable, copies of any written
requests, proposals or offers, including proposed agreements) and the identity
of the Person or group of Persons making any such Acquisition Proposal. The
Company shall keep Parent reasonably informed of the status of any such
discussions or negotiations, and material details of any such Acquisition
Proposal and provide Parent with any documents describing or evidencing any such
Acquisition Proposal sent by or provided to the Company or any of its
Subsidiaries or Representatives as promptly as reasonably practicable (and in
any event within twenty-four (24) hours after receipt or delivery thereof). The
Company shall provide Parent with at least twenty-four (24) hours prior notice
of any meeting of the Company Board at which the Company Board is reasonably
expected to consider any proposal, inquiry, offer or request with respect
thereto (or any lesser advance notice otherwise provided to members of the
Company Board in respect of such meeting).

 

(c)

 

(i)                                  The Company Board and each committee
thereof shall not (A) withhold, withdraw, qualify, amend or modify in any manner
adverse to Parent or Merger Sub, or propose publicly to withdraw, qualify, amend
or modify, the Company Recommendation with respect to this Agreement or the
Merger or resolve or agree to take any such action or make any public statement
inconsistent with the Company Recommendation, (B) recommend, adopt or approve
any Acquisition Proposal, or

 

37

--------------------------------------------------------------------------------

 

propose publicly or otherwise to recommend, adopt or approve any Acquisition
Proposal or resolve or agree to take any such action, (C) cause or permit the
Company to enter into any letter of intent, memorandum of understanding,
agreement in principle, merger agreement, acquisition agreement, or other
similar agreement providing for an Acquisition Proposal (other than a Qualifying
Confidentiality Agreement) or (D) (x) fail to publicly recommend against any
Acquisition Proposal or (y) fail to publicly reaffirm the Company
Recommendation, in the case of each of clause (x) and (y), within five
(5) Business Days after Parent so requests in writing, which request may be made
only once (any action described in clauses (A) through (D) referred to herein as
a “Change of Recommendation”).

 

(ii)                              Notwithstanding this Section 4.2(c) or
anything else in this Agreement to the contrary, the Company Board may (1) at
any time prior to the expiration of the Minimum Waiting Period, in response to
an Intervening Event, take or fail to take, as applicable, the actions specified
in clauses (A) or (D) of Section 4.2(c)(i) (an “Intervening Event Change of
Recommendation”) if the Company Board determines in good faith, after
consultation with its outside counsel, that it is required to do so in order to
comply with its fiduciary duties under applicable Law (including, for the
avoidance of doubt, Section 3.10(a) of the Operating Agreement) or (2) at any
time prior to the expiration of the Minimum Waiting Period, in response to an
unsolicited bona fide written Acquisition Proposal from any Person that did not
arise from any breach of this Section 4.2 by the Company, or any of its
Subsidiaries, officers, directors or employees, that is not withdrawn and that
the Company Board concludes in good faith, after consultation with an
independent financial advisor and outside legal counsel, constitutes a Superior
Proposal, terminate this Agreement pursuant to Section 7.3(a) in order to cause
the Company to enter into a definitive agreement providing for a Superior
Proposal; provided that (x) no Intervening Event Change of Recommendation may be
made and (y) the Company shall not exercise its right to terminate this
Agreement pursuant to Section 7.3(a) until after (A) the period of five
(5) Business Days or, in the case of a material revision to an Acquisition
Proposal with respect to which prior written notice to Parent has been provided,
the period shall be three (3) Business Days (the “Notice Period”) following
Parent’s receipt of written notice from the Company advising Parent, in the case
of clause (x) above, of the reasons for such Intervening Event Change of
Recommendation, including a description of the Intervening Event in reasonable
detail, and, in the case of clause (y) above, that the Company Board has
received a Superior Proposal (or any material modification of a Superior
Proposal), specifying the information required to be include in any notice
required to be delivered to Parent under Section 4.2(b)(iii) and stating that
the Company Board has resolved to exercise its right to terminate this Agreement
pursuant to Section 7.3(a) (such notice, a “Match Notice”) (B) the Company
shall, and shall cause its financial and legal advisors to, during the Notice
Period, negotiate with Parent and its Representatives in good faith (to the
extent Parent desires to negotiate) to make such adjustments in the terms and
conditions of this Agreement, so that such Intervening Event would cease to
necessitate an Intervening Event Change of Recommendation or such Acquisition
Proposal would cease to constitute a Superior Proposal; provided that, in the
event of any material revisions to the Acquisition Proposal that the Company
Board has determined to be a Superior Proposal, the Company shall be required to
deliver a new written notice to Parent and to comply with the requirements of
this Section 4.2 (including this Section 4.2(c)(ii)) with respect to such new
written notice and the revised Superior Proposal contemplated thereby; (C) (1)

 

38

--------------------------------------------------------------------------------

 

with respect to clause (x) above, a determination by the Company Board that the
Intervening Event described in such written notice continues to necessitate an
Intervening Event Change of Recommendation and (2) with respect to clause
(y) above, a determination by the Company Board that the Acquisition Proposal
described in such written notice constitutes a Superior Proposal, in the case of
clauses (1) and (2) above after taking into account any changes to this
Agreement proposed by Parent during such Notice Period and (D) in the event of a
termination of this Agreement pursuant to the foregoing subclause (c)(ii), the
Company shall have paid the Termination Fee pursuant to Section 7.5 to Parent
prior to or concurrently with such termination.

 

(d)                             Nothing contained in this Agreement shall
prohibit the Company or the Company Board or any committee thereof from
(i) complying with its disclosure obligations under U.S. federal or state Law,
including taking and disclosing to its Members a position contemplated by
Rule 14e-2 promulgated under the Exchange Act (or any similar communication to
the Members) or (ii) making accurate disclosure to the Members of any factual
information regarding the business, financial condition or results of operations
of the Company, Parent or Merger Sub or the fact that an Acquisition Proposal
has been made, the identity of the party making such Acquisition Proposal or the
material terms of such Acquisition Proposal (and no such disclosure shall be
deemed to be a Change of Recommendation); provided, however, that the Company
Board or any committee thereof shall not make a Change of Recommendation except
in accordance with Section 4.2(c)(ii).

 

Section 4.3                       Information Statement.

 

As soon as practicable (and in any event within fifteen (15) Business Days)
after the execution of this Agreement, the Company shall distribute, by upload
to the secure website maintained for the benefit of holders of Units, to its
Members, as appropriate, an information statement and other appropriate
documents (including a copy of this Agreement) which contain, subject to
Section 4.2, the Company Recommendation (such information statement and other
documents, including any amendments or supplements thereto, in each case in the
form or forms mailed or delivered to the Members, collectively, the “Information
Statement”) if required in connection with obtaining Member Proxies representing
the Company Requisite Approval, which Information Statement shall comply with
applicable Laws. If the Company distributes the Information Statement, whenever
any event occurs which is required to be set forth in an amendment or supplement
to the Information Statement, the Company or Parent, as the case may be, will
promptly inform the other of such occurrence and cooperate in preparing and
distributing to the Members such amendment or supplement (to the extent
necessary or appropriate, in the good faith judgment of the Company). Each of
Parent and Merger Sub shall use its reasonable best efforts to cooperate with
the Company in connection with the preparation and distribution of the
Information Statement, including furnishing as promptly as reasonably
practicable to the Company any and all information relating to it as the Company
may reasonably request. The Company shall deliver to the Members a notice of the
Record Date for acting by written consent and any other notices in connection
with the Intermediate Merger and the Merger as required by the Operating
Agreement. Parent agrees that on the Record Date, it will, pursuant to the
Member Proxies, consent in writing to approve this Agreement and the
transactions contemplated hereby.

 

Section 4.4                       Filings; Other Actions; Notification.

 

(a)                               Cooperation. Subject to the terms and
conditions set forth in this Agreement, including Section 4.3 and
Section 4.4(d), the Company and Parent shall cooperate

 

39

--------------------------------------------------------------------------------

 

with each other and use (and shall cause their respective Affiliates to use)
their respective reasonable efforts to take or cause to be taken all actions,
and to do or cause to be done all things, reasonably necessary, proper or
advisable on their part under this Agreement and applicable Law to consummate
and make effective the Merger and the other transactions contemplated by this
Agreement as soon as practicable, including preparing and filing as promptly as
practicable all documentation to effect all necessary notices, reports and other
filings and to obtain as promptly as practicable all consents, registrations,
approvals, permits and authorizations necessary to be obtained from any
Governmental Entity in order to consummate the Merger and the other transactions
contemplated by this Agreement. Subject to applicable Laws relating to the
exchange of information, Parent and the Company shall have the right to review
in advance, and, to the extent practicable, each will consult with the other on
and consider in good faith the views of the other in connection with, all of the
information relating to Parent or the Company, as the case may be, and any of
their respective Affiliates, that appears in the Information Statement or any
filing made with, or written materials submitted to, any third party and/or any
Governmental Entity in connection with the Merger and the other transactions
contemplated by this Agreement. In exercising the foregoing rights, each of the
Company and Parent shall act reasonably and as promptly as practicable.

 

(b)                              Information. Subject to applicable Laws, the
Company and Parent each shall, upon request by the other, furnish the other with
all information concerning itself, its Affiliates, directors, officers and
Members or equityholders, as applicable, and such other matters as may be
reasonably necessary or advisable in connection with the Information Statement
or any statement, filing, notice or application made (or to be made) by or on
behalf of Parent, the Company or any of their respective Affiliates to any third
party and/or any Governmental Entity in connection with the Merger and the
transactions contemplated by this Agreement, including under the HSR Act and any
other Antitrust Law. Notwithstanding the foregoing, in connection with the
performance of each Party’s respective obligations pursuant to,
Section 4.4(a) and Section 4.4(d), the Company and Parent may, as each
determines is reasonably necessary, designate competitively sensitive material
provided to the other pursuant to this Section 4.4(b) as “Outside Counsel Only.”
Such materials and the information contained therein shall be given only to the
outside legal counsel of the recipient and will not be disclosed by such outside
counsel to directors, officers or employees of the recipient unless express
permission is obtained in advance from the source of the materials (the Company
or Parent, as the case may be) or its legal counsel. Notwithstanding anything to
the contrary in this Section 4.4, materials provided to the other Party or its
counsel may be redacted to remove references concerning the valuation of the
Company and its Subsidiaries.

 

(c)                               Status. Subject to applicable Laws and the
instructions of any Governmental Entity, the Company and Parent each shall keep
the other apprised of the status of matters relating to consents, clearances,
approvals or authorizations of any Governmental Entity of the transactions
contemplated by this Agreement, including promptly furnishing the other with
copies of notices or other communications received by Parent or the Company, as
the case may be, or any of their respective Affiliates, from any Governmental
Entity with respect to such consents, clearances, approvals or authorizations.
Neither the Company nor Parent shall permit any of its Affiliates, officers or
any other Representatives to participate in any meeting or substantive
discussion with any Governmental Entity in respect of any consents, clearances,
approvals, authorizations, filings, investigation or other inquiry with respect
to the Merger or the other transactions contemplated by this Agreement unless it
consults with the other Party in

 

40

--------------------------------------------------------------------------------

 

advance and, to the extent permitted by such Governmental Entity, gives the
other Party the opportunity to attend and participate thereat.

 

(d)                             Antitrust Matters.

 

(i)                                  Subject to the terms and conditions set
forth in this Agreement, without limiting the generality of the undertakings
pursuant to this Section 4.4, each of the Company, on the one hand, and Parent
and Merger Sub, on the other hand, agree to take or cause to be taken the
following actions:

 

(A)                          as soon as reasonably practicable, (1) and in any
event, no later than ten (10) Business Days following the date of this
Agreement, to file the initial pre-merger notifications with respect to this
Agreement and the transactions contemplated herein required under the HSR Act
(which filing, including the exhibits thereto, shall not be shared or otherwise
disclosed to the other Parties except to outside counsel of each Party) for each
of Parent and the Company, in each case, requesting early termination of the
waiting period with respect to the Merger and (2) to file any notification or
other form necessary to obtain any consents, clearances or approvals required
under or in connection with any other Antitrust Law;

 

(B)                           to promptly provide to each and every
supranational, national, federal, state, provincial or local Governmental Entity
with jurisdiction over enforcement of any applicable Antitrust Law (a
“Governmental Antitrust Entity”) non-privileged information and documents
requested by any such Governmental Antitrust Entity in connection with obtaining
any such consent, clearance, approval, or authorization of such Governmental
Antitrust Entity that is necessary, proper or advisable to permit consummation
of the Merger and the other transactions contemplated hereby; and

 

(C)                           to refrain from entering into any agreement,
arrangement or other understanding to acquire any assets, or properties or
business that would prevent or materially delay receipt of any Company Required
Governmental Approvals or Parent Required Governmental Approvals or prevent,
materially delay or materially impede the Closing.

 

(ii)                              In addition to the foregoing, Parent shall
take, and cause its Subsidiaries to take, any and all actions necessary
(including the payment of all filing fees of all Parties) to make any filings
(including promptly complying with or modifying any requests for additional
information, including any second request, by any Governmental Entity) and
Parent shall, and shall cause its Subsidiaries to, and the Company shall and
shall cause its Subsidiaries to, use reasonable best efforts to obtain any
consents, clearances, approvals or authorizations required under or in
connection with any Antitrust Law, and to enable all waiting periods under any
Antitrust Law to expire, and to avoid or eliminate each and every impediment
under any Antitrust Law asserted by any Governmental Entity, in each case, to
enable the consummation of the Merger and the other transactions contemplated
hereby as promptly as practicable following the date hereof, including
(A) offering and consenting to, and thereafter implementing, the following
measures: (1) the sale, license, assignment, transfer, divestiture, holding
separate or other disposition of any assets, business or portion of

 

41

--------------------------------------------------------------------------------

 

business of the Company, the Surviving Company, or any of their respective
Subsidiaries or (2) the imposition of any restriction, requirement or limitation
on the operation of the business or portion of the business of the Company, the
Surviving Company, or any of their respective Subsidiaries; provided that Parent
will not be required to offer, consent to or implement the foregoing measures
with respect to (x) any non-de minimis assets (as such term is defined for
purposes of this Section 4.4(d)(ii) on Section 4.4(d)(ii) of the Company
Disclosure Letter) of the Company or the Surviving Company or (y) any assets of
Parent and its Subsidiaries and (B) contesting, defending or appealing any
Action brought by any Governmental Entity, threatened or pending preliminary or
permanent injunction or other Order, decree or ruling or statute, rule,
regulation or executive order.

 

(iii)                          Parent will not (x) withdraw its initial filing
under the HSR Act or any other Antitrust Law, as the case may be, and re-file it
unless the Company has consented in advance to such withdrawal and refiling,
such consent not to be unreasonably withheld, delayed or conditioned or
(y) take, or cause to be taken, any actions or do, or cause to be done, any
things that would be reasonably likely to delay the obtaining of any approval or
to extend any waiting period under the HSR Act, any Antitrust Law with respect
to the transactions contemplated hereby or to cause any Governmental Entity to
object to such transactions, including acquiring or agreeing to acquire any
assets or businesses engaged in whole or in part in a line of business similar
to that engaged in by the Company and its Subsidiaries.

 

(iv)                          Nothing in this Agreement shall require the
Company or its Affiliates or Parent, Merger Sub or their respective Affiliates
to take or agree to take any action with respect to its business or operations
unless the effectiveness of such agreement or action is conditioned upon the
Closing.

 

(v)                              Parent shall reimburse the Company and its
Subsidiaries for all of their documented and reasonable out-of-pocket expenses
(including the reasonable fees and expenses of all attorneys, consultants,
economists and other experts retained by a party and all reasonable duplicating,
travel and related expenses) incurred or accrued in connection with
Section 4.4(d)(ii)(B).

 

(e)                               DSS Approval. As soon as practicable after the
date of this Agreement, Parent shall provide all necessary information to the
Company regarding Parent’s foreign ownership, control or influence, and in turn
the Company shall or shall cause its Subsidiaries to (as applicable) prepare and
submit to the DSS a notification under Section 1-302(g) of the NISPOM and
provide all reasonable support to Parent in requesting from the DSS approval to
operate the business of the Company and its Subsidiaries pursuant to a Foreign
Ownership, Control, or Influence mitigation proposal submitted in relation to
the transactions contemplated by this Agreement in accordance with the NISPOM.

 

Section 4.5                       Access and Reports.

 

(a)                               Subject to applicable Law, upon reasonable
notice, the Company shall (and shall cause its Subsidiaries to) afford Parent’s
officers, employees and other authorized Representatives (including financing
sources) reasonable access, during normal business hours throughout the period
prior to the Effective Time, to its employees, properties, books, Contracts and
records, and, during such period, the Company shall (and shall cause its
Subsidiaries to) furnish promptly to Parent and Parent’s officers, employees and
other authorized Representatives

 

42

--------------------------------------------------------------------------------

 

(including financing sources) information concerning its business, properties
and personnel as may reasonably be requested, including (i) access to conduct,
at Parent’s sole cost and expense, ASTM-compliant Phase I environmental site
assessments or limited environmental compliance reviews, of any Owned Real
Property and, subject to the rights of any landlord, any real property that is
the subject of any material Lease Document and (ii) reasonable access to KPMG,
the Company’s external auditors, and their work papers associated with their
review of the Interim Financial Statements and Duff & Phelps Corporation and ICF
SH&E, the auditors who assisted the Company in their preparation of the
February Balance Sheet, subject to Parent signing a customary confidentiality
and indemnity letter if requested by such auditors; provided that Parent and its
Representatives shall conduct any such activities in such a manner as to not
interfere unreasonably with the business or operations of the Company and in no
event will the foregoing include any sampling or analysis of soil, groundwater,
building materials or other environmental media of the sort generally referred
to as a Phase II environmental investigation. All requests for information made
pursuant to this Section 4.5 shall be directed to the executive officer or other
Persons designated by the Company. All such information shall be governed by the
terms of the Confidentiality Agreement. No investigation pursuant to this
Section 4.5 or by Parent or its Representatives at any time prior to or
following the date of this Agreement shall affect or be deemed to modify any
representation or warranty made by the Company herein.

 

(b)                              This Section 4.5 shall not require the Company
or its Subsidiaries to permit any access to or to disclose (i) any information
that, in the reasonable, good faith judgment (after consultation with counsel,
which may be in-house counsel) of the Company, is reasonably likely to result in
any violation of any Law (including ITAR) or any Contract to which the Company
or its Subsidiaries is a party or cause any privilege (including attorney-client
privilege) that the Company or its Subsidiaries would be entitled to assert to
be undermined with respect to such information or (ii) if the Company or any of
its Affiliates, on the one hand, and Parent or any of its Affiliates, on the
other hand, are adverse parties in a litigation, any information that is
reasonably pertinent thereto; provided that, in the case of clause (i) above,
the Parties shall cooperate in seeking to find a way to allow disclosure of such
information to the extent doing so (A) would not (in the good faith belief of
the Company (after consultation with counsel, which may be in-house counsel)) be
reasonably likely to result in the violation of any such Law or Contract or be
reasonably likely to cause such privilege to be undermined with respect to such
information or (B) could reasonably (in the good faith belief of the Company
(after consultation with counsel, which may be in-house counsel)) be managed
through the use of customary “clean-room” arrangements pursuant to which
non-employee Representatives of Parent could be provided access to such
information.

 

(c)                               The information provided pursuant to this
Section 4.5 shall be used solely for the purpose of the Merger and the other
transactions contemplated hereby (including any financing thereof by Parent),
and such information shall be kept confidential and treated by Parent and Merger
Sub in accordance with the Confidentiality Agreement.

 

Section 4.6                       Publicity.                                The
initial press release regarding the Merger shall be reasonably agreed upon by
Parent and the Company. Thereafter, so long as this Agreement is in effect, the
Company and Parent each shall consult with each other prior to issuing any press
releases or otherwise making public announcements with respect to the Merger and
the other transactions contemplated by this Agreement and prior to making any
filings with any third party and/or any Governmental Entity (including any
national securities exchange or interdealer quotation service) with respect
thereto, except (a) as may be required by Law (including filings

 

43

--------------------------------------------------------------------------------

 

required to be made by any Party under the Securities Act or the Exchange Act,
provided that the other party shall be given an opportunity to review and
comment upon any such filing before it is filed and the filing party shall
consider such comments in good faith) or by the fiduciary duties of the members
of the Company Board (and, for the avoidance of doubt, Section 3.10(a) of the
Operating Agreement) or (b) by the request of any Governmental Entity or (c) in
connection with a Change of Recommendation; provided, however, that the
foregoing will not restrict or prohibit the Company or any of its Subsidiaries
from making any announcement (together with instructions to keep such
information strictly confidential) to its unit holders, employees, customers and
other business relations to the extent the Company or such Subsidiary reasonably
determines in good faith that such announcement is necessary or advisable.

 

Section 4.7                       Employee Benefits.

 

(a)                               Parent agrees that, during the period
commencing at the Effective Time and ending on December 31, 2014, each employee
of the Company and its Subsidiaries who continues employment with Parent, the
Surviving Company or any Subsidiary of the Surviving Company after the Effective
Time (collectively, the “Affected Employees”) will be provided with (i) base
salary, wages, and bonus, incentive and commission target opportunities which
are, in the aggregate, no less than the base salary or wages, and bonus,
incentive and commission target opportunities provided by the Company and its
Subsidiaries to such Affected Employee immediately prior to the Effective Time,
(ii) employee benefits and perquisites that are substantially similar in the
aggregate to those provided by Parent to its employees who are similarly
situated to each Affected Employee as of the Effective Time and (iii) severance
benefits that are no less favorable than the severance benefits provided by the
Company and its Subsidiaries immediately prior to the Effective Time.
Notwithstanding the foregoing, Parent and the Company agree that, with respect
to any Affected Employee whose terms and conditions of employment are covered by
a collective bargaining agreement, the terms and conditions of each such
Affected Employee’s employment shall be subject to such collective bargaining
agreement for so long as it remains in effect or as otherwise required by
applicable Law.

 

(b)                              Parent shall cause any employee benefit plans
(including any severance plans) in which any Affected Employee is entitled to
participate after the Effective Time to take into account for purposes of
eligibility, vesting, level of benefits and benefit accrual thereunder, service
for the Company and its Subsidiaries as if such service were with Parent, to the
same extent such service was credited under a comparable plan of the Company or
any of its Subsidiaries (except to the extent it would result in a duplication
of benefits with respect to the same period of service). Parent shall, and shall
cause its direct and indirect Subsidiaries (including the Surviving Company) to
(i) waive all limitations as to preexisting conditions exclusions and all
waiting periods with respect to participation and coverage requirements
applicable to each Affected Employee under any welfare benefit plan in which an
Affected Employee is eligible to participate on or after the Effective Time and
(ii) credit each Affected Employee for any co-payments, deductibles and other
out-of-pocket expenses paid prior to the Effective Time under the terms of any
corresponding Company Plan in satisfying any applicable deductible, co-payment
or out-of-pocket requirements for the plan year in which the Effective Time
occurs under any welfare benefit plan in which the Affected Employee
participates on and after the Effective Time.

 

(c)                               The Company shall not, and shall not permit
any other Reorganized Debtor (as defined in the Call Option Agreement made and
entered into as of February 28, 2013 among Beech Holdings, LLC and each of the
Debtor Affiliates of Hawker Beechcraft, Inc., and

 

44

--------------------------------------------------------------------------------

 

the Pension Benefit Guaranty Corporation (the “PBGC Call Agreement”)), to
exercise the Call Option under the PBGC Call Agreement.

 

Section 4.8                       Expenses.  Except as otherwise provided in
this Agreement, whether or not the Merger is consummated, all costs and expenses
incurred in connection with this Agreement and the Merger and the other
transactions contemplated by this Agreement shall be paid by the party incurring
such expense.

 

Section 4.9                       Indemnification; Directors’ and Officers’
Insurance.

 

(a)          For a period of six (6) years following the Effective Time, Parent
and the Surviving Company will, and after the Effective Time Parent will cause
the Surviving Company to, indemnify, defend and hold harmless, and advance
expenses as incurred, to the fullest extent permitted under applicable Law, each
present and former director and officer of the Company and its Subsidiaries (in
their capacities as such) and each of their heirs and estates (collectively, the
“Indemnified Parties”) against any costs, expenses (including reasonable
attorneys’ and experts’ fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement (collectively, “Costs”) incurred in
connection with any claim, Action or investigation, whether civil, criminal,
administrative or investigative, arising out of or related to such Indemnified
Parties’ service as a director or officer of the Company or its Subsidiaries or
services performed by such Persons at the request of the Company or its
Subsidiaries at or prior to the Effective Time, whether asserted or claimed
prior to, at or after the Effective Time, including, for the avoidance of doubt,
in connection with (i) the Merger and the other transactions contemplated by
this Agreement and (ii) actions to enforce this provision or any other
indemnification or advancement right of any Indemnified Party; provided that the
Person to whom Costs are advanced, if required by applicable Law, provides an
undertaking to repay such Costs if it is ultimately determined that such Person
is not entitled to indemnification under applicable Law.

 

(b)                              Prior to the Effective Time, the Company shall
and, if the Company is unable to, Parent shall cause the Surviving Company as of
the Effective Time to obtain and fully pay the premium for “tail” insurance
policies for the extension of the directors’ and officers’ liability, employment
practices liability and fiduciary liability coverages (collectively, “D&O
Insurance”) of the Company’s existing respective insurance policies for a claims
reporting or discovery period of at least six years from and after the Effective
Time from insurers with the same or better A.M. Best rating as the Company’s
present insurers as of the date of this Agreement with benefits, terms,
conditions, retentions and levels of coverage that are at least as favorable to
the Indemnified Parties as the Company’s existing policies with respect to any
matters that existed or occurred at or prior to the Effective Time (including in
connection with this Agreement or the transactions or actions contemplated
hereby).

 

(c)                               If Parent or the Surviving Company or any of
their respective successors or assigns (i) shall consolidate with or merge into
any other corporation or entity and shall not be the continuing or surviving
corporation or entity of such consolidation or merger or (ii) shall transfer all
or substantially all of its properties and assets to any individual, corporation
or other entity, then, and in each such case, proper provisions shall be made so
that the successors and assigns of Parent or the Surviving Company, as
applicable, shall assume all of the obligations set forth in this Section 4.9.

 

45

--------------------------------------------------------------------------------

 

(d)                             The provisions of this Section 4.9 are intended
to be for the benefit of, and shall be enforceable by, each of the Indemnified
Parties, who are third party beneficiaries of this Section 4.9.

 

(e)                               The rights of the Indemnified Parties under
this Section 4.9 shall be in addition to any rights such Indemnified Parties may
have under the certificate of formation, the Operating Agreement, the Plan of
Reorganization, certificate of incorporation, bylaws or comparable governing
documents of the Company, the Surviving Company or any of their Subsidiaries, or
under any applicable Contracts or Laws. The Surviving Company shall, and Parent
shall cause the Surviving Company to, maintain, or cause to be maintained, all
rights to indemnification and exculpation from liabilities for acts or omissions
occurring at or prior to the Effective Time and rights to advancement of
expenses relating thereto now existing in favor of any Indemnified Party as
provided in the certificate of formation, the Operating Agreement, the Plan of
Reorganization, the certificate of incorporation, bylaws or comparable governing
documents of the Company, the Surviving Company and their Subsidiaries or any
indemnification agreement between such Indemnified Party and the Company or any
of its Subsidiaries so that such rights survive the Merger. Parent and the
Surviving Company shall not permit the foregoing to be amended, repealed or
otherwise modified in any manner that would adversely affect any right
thereunder of any such Indemnified Party.

 

Section 4.10               Confidentiality.  Each of Parent and Merger Sub will
hold and treat all documents and information concerning the Company and its
Subsidiaries furnished to Parent or Merger Sub in connection with the
transactions contemplated by this Agreement in accordance with the
Confidentiality Agreement, which shall remain in full force and effect in
accordance with its terms.

 

Section 4.11               Resignation of Directors.  At the Closing, to the
extent requested by Parent at least two (2) Business Days prior to the Closing
Date, the Company shall deliver to Parent the resignation of the members of the
Company Board, and of any member of the board of directors (or any equivalent)
of each Subsidiary of the Company, who are in office immediately prior to the
Effective Time, which resignations shall be effective at the Effective Time.

 

Section 4.12               Transaction Litigation.  Subject to the immediately
following sentence, prior to the Effective Time, each of the Company and Parent
shall use reasonable best efforts to prevent the entry of (and, if entered, to
have vacated, lifted, reversed or overturned) any Order that results from any
equityholder litigation against the Company, Parent, Merger Sub or any of their
respective directors or officers relating to this Agreement, the Merger or any
of the other transactions contemplated hereby. The Company shall give Parent the
opportunity to participate in, but not control, the defense or settlement of any
equityholder litigation against the Company or any of its directors or officers
relating to this Agreement, the Merger or any of the transactions contemplated
by this Agreement, and no such settlement of any equityholder litigation shall
be agreed to without Parent’s prior written consent, such consent not to be
unreasonably withheld, conditioned or delayed. Each of Parent and the Company
shall notify the other promptly (and in any event within forty-eight (48) hours)
of the commencement of any such equityholder litigation of which it has received
notice.

 

Section 4.13               No Other Company Representations or
Warranties.  Except for the representations and warranties expressly set forth
in Section 3.1, Parent and Merger Sub hereby acknowledge and agree that neither
the Company nor any of its Subsidiaries, nor any of their respective
equityholders, directors, officers, employees, Affiliates, advisors, agents or

 

46

--------------------------------------------------------------------------------

 

representatives, nor any other Person, has made or is making any other express
or implied representation or warranty with respect to the Company or any of its
Subsidiaries or their respective business or operations, including with respect
to any information provided or made available to Parent or Merger Sub (including
in certain “data rooms,” confidential information memoranda, management
presentations or due diligence discussions in anticipation or contemplation of
any of the transactions contemplated by this Agreement) and Parent and Merger
Sub shall not assert any claim or initiate any Action inconsistent with this
Section 4.13.

 

Section 4.14               Financial Statements.

 

(a)                               From the date hereof until the Closing, the
Company shall deliver to Parent, promptly after such information is delivered to
senior management of the Company, monthly financial and operating information in
the form such reports are currently prepared by the Company in the ordinary
course of business.

 

(b)                              At least three (3) Business Days prior to the
Closing, the Company shall deliver to Parent audited consolidated balance sheets
of the Company as of December 31, 2013 and February 28, 2013 (the “Audited
February Balance Sheet”), and the related audited consolidated statements of
income and cash flows for the year ended December 31, 2013, including the notes
or other supplementary information thereto along with an unqualified audit
report from KPMG, as auditors to the Company, with respect thereto (the “2013
Audited Financial Statements”). During the period between the date of delivery
of the 2013 Audited Financial Statements and the Closing Date, the Company shall
make reasonably available to Parent the Company’s officers and other employees,
and shall use its reasonable best efforts to make its auditors, KPMG, available
to Parent to discuss the 2013 Audited Financial Statements.

 

(c)                               The Company shall provide to Parent, at the
same time as it provides such information to its lenders under its Credit
Facilities, the calculation of the Fixed Charge Coverage Ratio as of
December 31, 2013, in the form in which it is provided to its lenders pursuant
to the ABL Revolver.

 

ARTICLE V

 

TAX MATTERS

 

Section 5.1                       Cooperation on Tax Matters. Each of Parent,
the Surviving Company and the Company shall provide each other with material and
relevant information, as and to the extent reasonably requested, in connection
with the filing of Tax Returns and any audit, litigation or other proceeding
with respect to Taxes. In each case, such cooperation shall include the
retention and (upon request, at the requesting party’s cost and expense and at
the time and place mutually agreed upon) the provision of records and
information which are reasonably relevant to any such audit, litigation or other
proceeding and (upon request, at the requesting party’s cost and expense and at
the time and place mutually agreed upon) making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder, to the extent such information and/or
explanation is readily available and within the control of the party to which
such request is made. The responsibility to retain records and information shall
include the responsibility to (1) retain such records and information as are
required to be retained by any applicable Taxing authority and (2) retain such
records and information in machine-readable format where appropriate and
reasonably feasible, such that the requesting party shall be able to readily
access such records and information. Each of Parent, the

 

47

--------------------------------------------------------------------------------

 

Surviving Company and the Company shall give reasonable written notice and
receive the consent of the other Parties prior to transferring, destroying or
discarding any such books and records. Any information or explanation obtained
pursuant to this Section 5.1 shall be maintained in confidence, except (i) as
may be legally required by any Taxing authority or otherwise and (ii) with the
written consent of the disclosing party.

 

Section 5.2                       Tax Sharing Agreements.  The Company shall
release each of its Subsidiaries, and shall cause itself to be released, from
any obligation under any agreement relating to the allocation, indemnification
or sharing of Taxes other than this Agreement (“Tax Sharing Agreements”) with
any Person (other than the Company or any of its Subsidiaries) prior to the
Closing Date.

 

ARTICLE VI

 

CONDITIONS

 

Section 6.1                       Conditions to Each Party’s Obligation to
Effect the Merger.  The respective obligation of each Party to effect the Merger
is subject to the satisfaction or waiver (to the extent permitted by applicable
Law and other than the conditions set forth in Section 6.1(a) which may not be
waived by any Party) at or prior to the Effective Time of each of the following
conditions:

 

(a)                               Intermediate Merger.  The Intermediate
Effective Time shall have occurred.

 

(b)                              Member Approval.  The Company Requisite
Approval shall have been obtained.

 

(c)                               Regulatory Consents.  (i) Any waiting period
(and any extension thereof) applicable to the Merger under the HSR Act shall
have been terminated or shall have expired and (ii) all competition, merger
control and antitrust approvals or filings required by the Antitrust Laws of the
countries listed in Section 6.1(c) of the Company Disclosure Letter shall have
been obtained, terminated or expired, as applicable.

 

(d)          No Injunction. No Order (whether temporary, preliminary or
permanent) by any Governmental Entity of competent jurisdiction restraining,
enjoining or otherwise prohibiting consummation of the Merger shall have been
issued and be continuing in effect. No Law shall have been enacted, issued,
entered, promulgated or enforced by any Governmental Entity that prohibits or
makes illegal consummation of the Merger and shall continue to be in effect.

 

Section 6.2                       Conditions to Obligations of Parent and Merger
Sub. The obligations of Parent and Merger Sub to effect the Merger are also
subject to the satisfaction or waiver at or prior to the Effective Time of the
following conditions:

 

(a)                               Representations and Warranties. (i) The
representations and warranties of the Company contained in the first six
sentences of Section 3.1(b) (Capital Structure) of this Agreement shall be true
and correct in all respects, except for de minimis errors (it being agreed that
errors resulting in no more than $2,750,000 in the aggregate being required to
be paid pursuant to Article II shall be deemed to be de minimis errors) in each
case as of the date hereof

 

48

--------------------------------------------------------------------------------

 

and as of the Closing Date as though made on the Closing Date (except to the
extent that any such representation and warranty expressly speaks as of another
date, in which case such representation and warranty shall be true and correct
as of such other date); (ii) the Fundamental Representations shall be true and
correct in all material respects as of the date hereof and as of the Closing
Date (except to the extent that any such representation or warranty expressly
speaks as of another date in which case such representation and warranty shall
be true and correct as of such other date); (iii) the representation and
warranty of the Company contained in Section 3.1(g)(ii) (Absence of Certain
Changes) of this Agreement shall be true and correct in all respects as of the
date hereof and as of the Closing Date as though made on the Closing Date;
(iv) all other representations and warranties of the Company set forth in this
Agreement shall be true and correct (without giving effect to any qualifications
or limitations as to materiality or Company Material Adverse Effect set forth
therein) as of the date hereof and as of the Closing Date as though made on the
Closing Date (except to the extent that any such representation and warranty
expressly speaks as of another date, in which case such representation and
warranty shall be true and correct as of such other date), except, in the case
of this clause (iv), for such failures to be true and correct that would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect; and (v) Parent shall have received at the Closing a
certificate signed on behalf of the Company by a senior executive officer of the
Company to the effect that such officer has read this Section 6.2(a) and the
conditions set forth in this Section 6.2(a) have been satisfied.

 

(b)                              Performance of Obligations of the Company. The
Company shall have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Closing Date, and
Parent shall have received a certificate signed on behalf of the Company by a
senior executive officer of the Company to such effect.

 

(c)                               No Company Material Adverse Effect. Since the
date of this Agreement, there shall not have occurred any change, event,
development or effect that has had or would reasonably be expected to have a
Company Material Adverse Effect.

 

(d)                             Financial Statements. The 2013 Audited Financial
Statements (along with unqualified audit reports from the Company’s accounting
firm with respect to such 2013 Audited Financial Statements) shall have been
delivered to Parent in accordance with Section 4.14.

 

Section 6.3                       Conditions to Obligation of the Company.  The
obligation of the Company to effect the Merger is also subject to the
satisfaction or waiver at or prior to the Effective Time of the following
conditions:

 

(a)                               Representations and Warranties. (i) The
representations and warranties of Parent and Merger Sub set forth in this
Agreement shall be true and correct as of the date hereof and as of the Closing
Date as though made on the Closing Date (except to the extent that any such
representation and warranty expressly speaks as of another date, in which case
such representation and warranty shall be true and correct as of such other
date), except for such failures to be true and correct that would not reasonably
be expected to have, individually or in the aggregate, a Parent Material Adverse
Effect, and (ii) the Company shall have received at the Closing a certificate
signed on behalf of Parent and Merger Sub by a senior executive officer of
Parent to the effect that such officer has read this Section 6.3(a) and the
conditions set forth in this Section 6.3(a) have been satisfied.

 

49

--------------------------------------------------------------------------------

 

(b)                              Performance of Obligations of Parent and Merger
Sub. Each of Parent and Merger Sub shall have performed in all material respects
all obligations required to be performed by them under this Agreement at or
prior to the Closing Date, and the Company shall have received a certificate
signed on behalf of Parent and Merger Sub by a senior executive officer of
Parent to such effect.

 

(c)                               Minimum Waiting Period. The Minimum Waiting
Period shall have expired.

 

Section 6.4                       Frustration of Closing Conditions. None of the
Company, Parent or Merger Sub may rely on the failure of any condition set forth
in Article VI, as the case may be, to be satisfied to excuse such Party’s
obligation to effect the Merger if such failure was primarily caused by such
Party’s failure to use the standard of efforts required from such Party to
consummate the Merger and the other transactions contemplated by this Agreement,
including as required by and subject to Section 4.4.

 

ARTICLE VII

 

TERMINATION

 

Section 7.1                       Termination by Mutual Consent. This Agreement
may be terminated and the Merger may be abandoned at any time prior to the
Effective Time, whether before or after obtaining the duly executed Member
Proxies representing the Company Requisite Approval, by mutual written consent
of the Company and Parent.

 

Section 7.2                       Termination by Either Parent or the Company.
This Agreement may be terminated and the Merger may be abandoned by Parent or
the Company (acting through the Company Board) at any time prior to the
Effective Time if:

 

(a)                               the Merger shall not have been consummated by
April 25, 2014 (such date, as it may be extended pursuant to the provisions
hereof, the “Termination Date”), provided, if on the Termination Date (x) the
conditions to Closing set forth in Section 6.1(c) or Section 6.1(d) (in
connection with Section 6.1(c)) shall not have been fulfilled, then either the
Company or Parent may, by written notice to the other Party, extend the
termination date from April 25, 2014 to July 24, 2014 or (y) the condition to
Closing set forth in Section 6.2(d) shall not have been fulfilled, then either
the Company or Parent may, by written notice to the other Party, extend the
termination date from April 25, 2014 to June 9, 2014 (in the case of any such
extension, such date shall then be the “Termination Date”); provided, further,
that the right to terminate this Agreement under this Section 7.2(a) shall not
be available to any Party that has breached its obligations hereunder and whose
breach is the principal cause of the failure of the Closing to have occurred on
or before the Termination Date; or

 

(b)                              any Order permanently restraining, enjoining or
otherwise prohibiting consummation of the Merger shall become final and
non-appealable or any Law shall be enacted, issued, entered, promulgated or
enforced by any Governmental Entity that prohibits or makes illegal consummation
of the Merger, provided, that the right to terminate this Agreement pursuant to
this Section 7.2(b) shall not be available to any Party that has breached in any
material respect its obligations under this Agreement and whose breach is the
principal cause of the failure of a condition to the consummation of the Merger.

 

50

--------------------------------------------------------------------------------

 

Section 7.3                       Termination by the Company. This Agreement may
be terminated and the Merger may be abandoned by the Company (acting through the
Company Board) at any time prior to the Effective Time:

 

(a)                               at any time prior to the end of the Minimum
Waiting Period, in order to concurrently enter into a definitive agreement
providing for a Superior Proposal, if (i) the Company has complied in all
material respects with the requirements of Section 4.2 and (ii) the Company,
concurrently with such termination, pays to Parent in immediately available
funds any fees required to be paid pursuant to Section 7.5(c); or

 

(b)                              at any time prior to the Effective Time, if
there has been a breach of any representation, warranty, covenant or agreement
made by Parent or Merger Sub in this Agreement, or any such representation and
warranty shall have become untrue after the date of this Agreement, such that
the conditions set forth in Section 6.3(a) or 6.3(b) would not be satisfied, and
such breach or condition is not curable or, if curable, is not cured prior to
the earlier of (i) the 30th day after written notice thereof is given by the
Company to Parent and (ii) the date that is one Business Day prior to the
Termination Date; provided, however, that the Company shall not have the right
to terminate this Agreement pursuant to this Section 7.3 if it is then in breach
of this Agreement so as to cause any of the conditions set forth in
Section 6.2(a) or Section 6.2(b) not to be capable of being satisfied.

 

Section 7.4                       Termination by Parent. This Agreement may be
terminated and the Merger may be abandoned by Parent at any time prior to the
Effective Time;

 

(a)                               in the event that a Change of Recommendation
shall have occurred; or

 

(b)                              if there has been a breach of any
representation, warranty, covenant or agreement made by the Company in this
Agreement, or any such representation and warranty shall have become untrue
after the date of this Agreement, such that the conditions set forth in
Section 6.2(a) or Section 6.2(b) would not be satisfied, and such breach or
condition is not curable or, if curable, is not cured prior to the earlier of
(i) the 30th day after written notice thereof is given by Parent to the Company
or (ii) the date that is one Business Day prior to the Termination Date;
provided, however, that Parent shall not have the right to terminate this
Agreement pursuant to this Section 7.4 if it (or Merger Sub) is then in breach
of this Agreement so as to cause any of the conditions set forth in
Section 6.3(a) or 6.3(b) not to be capable of being satisfied.

 

Section 7.5                       Effect of Termination and Abandonment.

 

(a)                               In the event of termination of this Agreement
and the abandonment of the Merger pursuant to this Article VII, this Agreement
shall become void and of no effect with no liability to any Person on the part
of any Party (or of any of its Representatives or Affiliates); provided,
however, notwithstanding the foregoing: (i) no such termination shall relieve
any Party of any liability or damages to the other Party resulting from any
willful and material breach of this Agreement and (ii) no such termination shall
relieve any Party of its obligations pursuant to the provisions set forth in
Section 4.6, Section 4.8, Section 4.10, Section 7.5, Section 8.1 through 8.13,
and the Confidentiality Agreement, all of which shall survive the termination of
this Agreement.

 

51

--------------------------------------------------------------------------------

 

(b)                              In the event that (x) this Agreement is
terminated pursuant to Section 7.2(a) (the section related to the Termination
Date) and the Company Requisite Approval shall not have been obtained prior to
such termination or Section 7.4(b), (y) any Person shall have announced,
commenced, publicly disclosed or otherwise made known to the Company Board a
bona fide Acquisition Proposal after the date of this Agreement but prior to
such termination, and such Acquisition Proposal shall not have been withdrawn
prior to such termination and (z) within twelve (12) months of such termination
the Company shall have entered into a definitive agreement with respect to such
Acquisition Proposal and the transaction contemplated by such definitive
agreement is consummated (provided that for purposes of this clause (z) the
references to “20%” in subsections (i) and (ii) of the definition of
“Acquisition Proposal” shall be deemed to be references to “50%”), then the
Company shall, within one (1) Business Day after the date on which the Company
consummates the transaction referred to in sub-clause (z) of this
Section 7.5(b), pay Parent the Termination Fee by wire transfer of immediately
available funds. Any Termination Fee payable pursuant to this
Section 7.5(c) will be reduced by the amount of any Reimbursable Expenses
previously paid pursuant to Section 7.5(d).

 

(c)                               In the event that

 

(i)                                  this Agreement is terminated by the Company
pursuant to Section 7.3(a) (the section related to a Superior Proposal); or

 

(ii)                              this Agreement is terminated by Parent
pursuant to Section 7.4(a) (the section related to a Change of Recommendation),

 

then the Company shall (A) in the case of clause (i) of this Section 7.5(c),
concurrently with such termination and (B) in the case of clause (ii) of this
Section 7.5(c), no later than one (1) Business Day after the date of such
termination, pay Parent the Termination Fee by wire transfer of immediately
available funds.

 

(d)                             The Company agrees that if Parent shall
terminate this Agreement pursuant to Section 7.4(b) in the event of an
intentional breach by the Company of a covenant, and the Termination Fee is not
as of the date of such termination required to be paid pursuant to
Section 7.5(b), the Company shall reimburse Parent and Merger Sub for all of
their documented and reasonable Expenses, up to a maximum of fifteen million
dollars ($15,000,000), in the aggregate (not later than five (5) Business Day
after submission by Parent of statements including reasonable detail therefor)
(the “Reimbursable Expenses”).

 

(e)                               The Parties acknowledge and agree that,
notwithstanding anything to the contrary herein, in no event shall the Company
be required to pay the Termination Fee on more than one occasion. The parties
agree that the payment of the Termination Fee shall be the sole and exclusive
remedy available to Parent and Merger Sub with respect to this Agreement and the
transactions contemplated hereby in the event any such payment is made when and
as due in accordance with the terms of this Section 7.5 (other than, in the case
of a termination pursuant to Section 7.4(b) in the event of an intentional
breach by the Company of a covenant, for the right of Parent to payment of the
Reimbursable Expenses, subject to and in accordance with Section 7.5(d) and the
last sentence of Section 7.5(b)), and upon such payment of the Termination Fee,
the Company (and the Company’s Affiliates and its and their respective
directors, officers, employees, stockholders and Representatives) shall have no
further liability to Parent and Merger Sub under this Agreement, in each case,
other than in circumstances where the Company has otherwise intentionally
breached its obligations under this Agreement.

 

52

--------------------------------------------------------------------------------

 

(f)                                The Company and Parent acknowledge that the
agreements contained in this Section 7.5 are an integral part of the
transactions contemplated by this Agreement. Accordingly, in the event that the
Company shall fail to pay the Termination Fee when due or the Company shall fail
to pay any Reimbursable Expenses when due, and in each case Parent commences an
action which results in a judgment against the Company with respect to the
payment by the Company set forth in this Section 7.5, then, the Company shall
pay Parent its reasonable costs and expenses actually incurred or accrued by
Parent (including reasonable fees and expenses of counsel) in connection with
the collection under and enforcement of this Section 7.5, together with interest
on such unpaid Termination Fee and Expenses, as the case may be, commencing on
the date that the Termination Fee or such costs and expenses became due, at a
rate of interest equal to the LIBOR Rate as of the date such payment was
required to be made plus 1%. Payment of the costs and expenses described in this
Section 7.5 shall not be in lieu of any damages incurred in the event of
intentional breach of this Agreement.

 

ARTICLE VIII

 

MISCELLANEOUS AND GENERAL

 

Section 8.1                       Survival. This Article VIII and those
covenants and agreements set forth herein that by their terms contemplate
performance in whole or in part after the Closing shall survive the consummation
of the Merger. All other representations, warranties, covenants and agreements
in this Agreement (or in any certificate or other document furnished in
connection with this Agreement) shall not survive the consummation of the
Merger.

 

Section 8.2                       Modification or Amendment. At any time prior
to the Effective Time, the Parties may modify or amend this Agreement, by
written agreement of the Company and Parent, by action taken by their respective
boards of directors; provided that after receipt of the Company Requisite
Approval, if any such amendment or waiver shall by applicable Law require
further approval of the Members, the effectiveness of such amendment shall be
subject to the approval of the Members.

 

Section 8.3                       Waiver of Conditions. The conditions to each
of the Parties’ obligations to consummate the Merger are for the sole benefit of
such Party and may be waived by such Party in whole or in part to the extent
permitted by applicable Laws. Any such extension or waiver shall only be valid
if set forth in an instrument in writing signed by the Party or Parties to be
bound thereby. The failure of any Party to assert any rights or remedies shall
not constitute a waiver of such rights or remedies.

 

Section 8.4                       Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an original
instrument, and all such counterparts shall together constitute one and the same
agreement having the same effect as if the signatures thereto were upon the same
instrument, and shall become effective when one or more counterparts have been
signed by each of the Parties and delivered (by telecopy, electronic delivery or
otherwise) to the other Parties. Signatures to this Agreement transmitted by
facsimile transmission, by electronic mail in “portable document format”
(“.pdf”) form, or by any other electronic means intended to preserve the
original graphic and pictorial appearance of a document, will have the same
effect as physical delivery of the paper document bearing the original
signature.

 

53

--------------------------------------------------------------------------------

 

Section 8.5                       GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL;
SPECIFIC PERFORMANCE.

 

(a)                               THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN
AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN
ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICTS
OF LAW PRINCIPLES THEREOF TO THE EXTENT THAT SUCH PRINCIPLES WOULD DIRECT A
MATTER TO ANOTHER JURISDICTION. The Parties hereby irrevocably and
unconditionally submit to the exclusive personal jurisdiction of the Court of
Chancery of the State of Delaware, or to the extent such court does not have
subject matter jurisdiction, the United States District Court for the District
of Delaware (the “Chosen Courts”) in respect of the interpretation and
enforcement of the provisions of this Agreement and of the documents referred to
in this Agreement, and in respect of the transactions contemplated hereby, and
hereby waive, and agree not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof or of any such document,
that it is not subject thereto or that such action, suit or proceeding may not
be brought or is not maintainable in the Chosen Courts or that the Chosen Courts
are an inconvenient forum or that the venue thereof may not be appropriate, or
that this Agreement or any such document may not be enforced in or by such
Chosen Courts, and the Parties irrevocably and unconditionally agree that all
claims relating to such action, suit or proceeding shall be heard and determined
in the Chosen Courts. The Parties hereby consent to and grant any such Chosen
Court jurisdiction over the person of such Parties and, to the extent permitted
by Law, over the subject matter of such dispute and agree that mailing of
process or other papers in connection with any such action, suit or proceeding
in the manner provided in Section 8.6 or in such other manner as may be
permitted by Law shall be valid, effective and sufficient service thereof.

 

(b)                              EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH ACTION, SUIT
OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS
AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS
WAIVER VOLUNTARILY AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 8.5.

 

(c)                               The Parties agree that irreparable damage for
which monetary damages, even if available, would not be an adequate remedy,
would occur in the event that the Parties do not perform their obligations under
the provisions of this Agreement (including failing to take all such actions as
are necessary or required of them hereunder to consummate the transactions
contemplated by this Agreement) in accordance with its specified terms or
otherwise breach such provisions. The Parties acknowledge and agree that prior
to the valid termination of this

 

54

--------------------------------------------------------------------------------

 

Agreement in accordance with Article VII, (a) the Parties shall be entitled to
an injunction or injunctions, specific performance, or other equitable relief,
to prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in the Chosen Courts without proof of damages or otherwise,
this being in addition to any other remedy to which they are entitled under this
Agreement or at Law or in equity, (b) the provisions set forth in Section 7.5
are not intended to, and shall not be construed to, diminish or otherwise impair
in any respect any Party’s right to specific enforcement and (c) the right of
specific enforcement is an integral part of the transactions contemplated by
this Agreement and without that right, neither the Company, Parent nor Merger
Sub would have entered into this Agreement. Each of the Parties agrees that it
will not oppose the granting of an injunction, specific performance and other
equitable relief on the basis that (x) the other Parties have an adequate remedy
at Law or (y) an award of specific performance is not an appropriate remedy for
any reason at Law or equity. The Parties acknowledge and agree that any Party
seeking an injunction or injunctions to prevent breaches of this Agreement and
to enforce specifically the terms and provisions of this Agreement in accordance
with this Section 8.5(c) shall not be required to provide any bond or other
security in connection with any such order or injunction. If any Party brings an
Action to enforce specifically the performance of the terms and provisions of
this Agreement (other than an Action to specifically enforce any provision that
expressly survives termination of this Agreement) when expressly available to
such Party pursuant to the terms of this Agreement, then the Termination Date
shall automatically be extended to (i) the 20th Business Day following the
resolution of such Action, or (ii) such other time period established by the
court presiding over such Action.

 

(d)                             For the avoidance of doubt, while either Party
may pursue both a grant of specific performance in accordance with
Section 8.5(c) and payment of monetary damages, the payment of the Termination
Fee and/or expense reimbursement (as applicable), under no circumstances shall
any Party be permitted or entitled to receive both a grant of specific
performance requiring consummation of the Merger and any such payments.

 

Section 8.6                       Notices.

 

(a)                               Any notice, request, instruction or other
document to be given hereunder by any Party to the others shall be in writing
and delivered personally or sent by registered or certified mail, postage
prepaid or by facsimile, email or overnight courier:

 

If to Parent or Merger Sub:

 

Textron Inc.

40 Westminster Street

Providence, RI 02903

Attention:

E. Robert Lupone

 

John Curran

fax:

(401) 457-2418

email:

rlupone@textron.com

 

jcurran@textron.com

 

 

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

 

55

--------------------------------------------------------------------------------

 

Shearman & Sterling LLP

599 Lexington Avenue

New York, NY 10022-6069

Attention:

Peter D. Lyons

 

Robert M. Katz

fax:

(212) 848-7179

email:

plyons@shearman.com

 

rkatz@shearman.com

 

 

If to the Company:

 

 

Beech Holdings, LLC

B091-S03

10511 E. Central

Wichita, Kansas 67206 USA

Attention:

Alexander Snyder

fax:

(316) 676-8422

email:

alexander_snyder@beechcraft.com

 

 

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

 

Kirkland & Ellis LLP

601 Lexington Avenue

New York, NY 10022

Attention:

Sarkis Jebejian

 

David Feirstein

fax:

(212) 446-6460

email:

sarkis.jebejian@kirkland.com

 

david.feirstein@kirkland.com

 

or to such other Persons or addresses as may be designated in writing by the
Party to receive such notice as provided above. Any notice, request, instruction
or other document given as provided above shall be deemed given to the receiving
Party upon actual receipt, if delivered personally, three (3) Business Days
after deposit in the mail, if sent by registered or certified mail, upon
confirmation of successful transmission if sent by facsimile or email (provided
that if given by facsimile or email such notice, request, instruction or other
document shall be followed up within one Business Day by dispatch pursuant to
one of the other methods described herein), or on the next Business Day after
deposit with an overnight courier, if sent by an overnight courier.

 

Section 8.7                       Entire Agreement. This Agreement (including
any exhibits, schedules and exhibits hereto, including the Disclosure Letters),
the Trust Agreement and the Confidentiality Agreement constitute the entire
agreement, and supersede all other prior agreements, understandings,
representations and warranties both written and oral, among the Parties, with
respect to the subject matter hereof.

 

Section 8.8                       No Third Party Beneficiaries. Except (i) as
provided in Section 4.9 (Indemnification; Directors’ and Officers’ Insurance)
and (ii) with respect to Members (and holders of any derivative securities) of
the Company after the Effective Time, for the provisions set forth in
Article II, Parent and the Company hereby agree that their respective
representations,

 

56

--------------------------------------------------------------------------------

 

warranties and covenants set forth herein are solely for the benefit of the
other Parties, in accordance with and subject to the terms of this Agreement,
and this Agreement is not intended to, and does not, confer upon any Person
other than the Parties any rights or remedies hereunder, including the right to
rely upon the representations and warranties set forth herein. The Parties
further agree that the rights of third party beneficiaries under Section 4.9
shall not arise unless and until the Effective Time occurs.

 

Section 8.9                       Obligations of Parent and of the Company.
Whenever this Agreement requires a Subsidiary of Parent to take any action, such
requirement shall be deemed to include an undertaking on the part of Parent to
cause such Subsidiary to take such action. Whenever this Agreement requires a
Subsidiary of the Company to take any action, such requirement shall be deemed
to include an undertaking on the part of the Company to cause such Subsidiary to
take such action and, after the Effective Time, on the part of the Surviving
Company to cause such Subsidiary to take such action.

 

Section 8.10               Definitions. Each of the terms set forth in Exhibit A
is defined as set forth therein or as in the Section of this Agreement
corresponding to such term.

 

Section 8.11               Severability. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other provisions hereof.
If any provision of this Agreement, or the application thereof to any Person or
any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.

 

Section 8.12               Interpretation; Construction.

 

(a)                               The table of contents and headings herein are
for convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
Where a reference in this Agreement is made to a Section or Exhibit, such
reference shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. Whenever the words “include,” “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation.” The words “hereof”, “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. The terms “or”, “any” and
“either” are not exclusive. The word “extent” in the phrase “to the extent”
shall mean the degree to which a subject or other thing extends, and such phrase
shall not mean simply “if”. The word “will” shall be construed to have the same
meaning and effect as the word “shall”. All pronouns and all variations thereof
shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the Person may require. Where a reference in this
Agreement is made to any agreement (including this Agreement), contract, statute
or regulation, such references are to, except as context may otherwise require,
the agreement, contract, statute or regulation as amended, modified,
supplemented, restated or replaced from time to time (in the case of an
agreement or contract, to the extent permitted by the terms thereof), and to any
section of any statute or regulation including any successor to the section and,
in the case of any statute, any rules or regulations promulgated thereunder. All

 

57

--------------------------------------------------------------------------------

 

references to “dollars” or “$” in this Agreement are to United States dollars.
All references to “days” shall be to calendar days unless otherwise indicated as
a “Business Day”. All references to “made available” shall include all
documentation that was located and provided in that certain online data room
entitled “Project Sky” hosted by Intralinks as of the close of business on the
date that is two (2) Business Days prior to the date hereof.

 

(b)                              The Parties have participated jointly in
negotiating and drafting this Agreement. In the event that an ambiguity or a
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties, and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of any
provision of this Agreement.

 

(c)                               Each Party has or may have set forth
information in its respective disclosure letter (each, a “Disclosure Letter”) in
a section thereof that corresponds to the section of this Agreement to which it
relates, it being agreed that any information so disclosed in any section of a
Disclosure Letter shall be deemed to be disclosed with respect to any
representation or warranty corresponding to any other section of this Agreement
and such Disclosure Letter to the extent its relevance to such section,
representation or warranty is reasonably apparent on the face of such
disclosure. The mere inclusion of any item in any section or subsection of any
Party’s Disclosure Letter as an exception to any representation or warranty or
otherwise shall not be deemed to constitute an admission by the applicable
Party, or to otherwise imply, that any such item has had or would reasonably be
expected to have a Company Material Adverse Effect or Parent Material Adverse
Effect, as the case may be, or otherwise represents an exception or material
fact, event or circumstance for the purposes of this Agreement, or that such
item meets or exceeds a monetary or other threshold specified for disclosure in
this Agreement. Matters disclosed in any section or subsection of a Party’s
Disclosure Letter are not necessarily limited to matters that are required by
this Agreement to be disclosed therein. Such additional matters are set forth
for informational purposes only and do not necessarily include other matters of
a similar nature or impose any duty or obligation to disclose any information
beyond what is required by this Agreement, and disclosure of such additional
matters shall not affect, directly or indirectly, the interpretation of this
Agreement or the scope of the disclosure obligations hereunder. Headings
inserted in the sections or subsections of any Party’s Disclosure Letter are for
convenience of reference only and shall not have the effect of amending or
changing the express terms of the sections or subsections as set forth in this
Agreement.

 

Section 8.13                Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective successors, legal
representatives and permitted assigns. No Party to this Agreement may assign any
of its rights or delegate any of its obligations under this Agreement, by
operation of Law or otherwise, without the prior written consent of the other
Parties. Any purported assignment in violation of this Agreement is void.

 

[Signature page follows.]

 

58

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officers of the Parties as of the date first written above.

 

 

TEXTRON INC.

 

 

 

 

 

 

 

/s/ Scott C. Donnelly

 

 

Name: Scott C. Donnelly

 

Title: President & CEO

 

 

 

 

 

TEXTRON ACQUISITION LLC

 

 

 

 

 

 

 

/s/ Scott C. Donnelly

 

 

Name: Scott C. Donnelly

 

Title: President & CEO

 

 

[SIGNATURE PAGE TO PROJECT SKY AGREEMENT AND PLAN OF MERGER]

 

--------------------------------------------------------------------------------

 

 

BEECH HOLDINGS, LLC

 

 

 

 

 

By

/s/ W.W. Boisture, Jr.

 

 

 

Name:

W.W. Boisture, Jr.

 

 

Title:

Chief Executive Officer

 

 

 

 

 

SKY INTERMEDIATE MERGER SUB, LLC

 

 

 

 

 

By

/s/ W.W. Boisture, Jr.

 

 

 

Name:

W.W. Boisture, Jr.

 

 

Title:

President and Chief Executive Officer

 

 

[SIGNATURE PAGE TO PROJECT SKY AGREEMENT AND PLAN OF MERGER]

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

DEFINITIONS

 

As used in this Agreement, the following terms have the meanings specified in
this Exhibit A.

 

“2013 Audited Financial Statements” has the meaning set forth in Section 4.14.

 

“ABL Revolver” shall mean the Senior Secured Asset-Based Revolving Credit
Agreement, dated as of February 15, 2013, among Beechcraft Holdings LLC, Beech
Enterprises, LLC, the Lenders party thereto and JPMorgan Chase Bank, N.A. as
Administrative Agent and Collateral Agent, as amended by the First Amendment
dated as of April 22, 2013.

 

“Acquisition Proposal” shall mean any inquiry, proposal or offer from any Person
or group (other than Parent and its Subsidiaries) relating to, in a single
transaction or series of related transactions, any direct or indirect
(i) acquisition of 20% or more of the consolidated assets of the Company and its
Subsidiaries (based on the fair market value thereof, as determined in good
faith by the Company Board), (ii) acquisition of 20% or more of the outstanding
Units, (iii) tender offer or exchange offer that if consummated would result in
any Person or group beneficially owning 20% or more of the outstanding Units,
(iv) merger, amalgamation, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company, (v) sale, lease, license, exchange, transfer or other disposition of,
or joint venture involving, assets or businesses that constitute or represent
more than 20% of the total revenue, operating income, EBITDA or fair market
value of the assets of the Company and its Subsidiaries, taken as a whole or
(vi) any other similar transaction the consummation of which would be reasonably
likely to impede, interfere with, prevent or materially delay the Merger, in
each case, other than the Merger.

 

“Actions” has the meaning set forth in Section 3.1(h)(i).

 

“Affected Employees” has the meaning set forth in Section 4.7(a).

 

“Affiliate” shall mean, when used with respect to any party, any Person who is
an “affiliate” of that party within the meaning of Rule 405 promulgated under
the Securities Act.

 

“Agreement” has the meaning set forth in the preamble to this Agreement.

 

“Allowed L/C Secured Claim” has the meaning set forth in the Plan of
Reorganization.

 

“Allowed Senior Credit Facility Secured Claim” has the meaning set forth in the
Plan of Reorganization.

 

“Antitrust Law” shall mean the Sherman Act, the Clayton Act, the HSR Act, the
Federal Trade Commission Act and all other applicable antitrust, competition or
trade regulation Laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade or lessening of competition through merger or acquisition.

 

A-1

--------------------------------------------------------------------------------

 

“Audited February Balance Sheet” has the meaning set forth in Section 4.14(b).

 

“Aviation Regulatory Authority” means the Department of Transportation, the
Federal Aviation Administration or any Governmental Entity or other governing
body in a foreign country with jurisdiction to regulate the manufacturing of
aircraft, the operations of air carriers, the certification of aircraft as
airworthy, the repair, maintenance or alteration of aircraft, the training of
individuals regarding the operation of aircraft, the supply and sale of aircraft
parts, or any other aviation matter that is regulated by the Department of
Transportation or the Federal Aviation Administration in the United States.

 

“Award Agreement” shall mean the written agreement granting an individual an
award of Company Options, an award of Restricted Units or an award of Phantom
Units pursuant to the Management Equity Plan or the Director Equity Plan, as
applicable.

 

“Bankruptcy and Equity Exception” shall mean any bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar Laws of general
applicability relating to or affecting creditors’ rights and to general equity
principles.

 

“Book Entry Units” has the meaning set forth in Section 2.1(b)(ii).

 

“Business Day” shall mean any day ending at 11:59 p.m. (Eastern Time) other than
a Saturday or Sunday or other day on which banks are required or authorized to
close in the City of New York.

 

“Certificate” has the meaning set forth in Section 2.1(b)(ii).

 

“Certificate of Airworthiness” shall mean any authorization granted by an
Aviation Regulatory Authority to operate an aircraft in flight.

 

“Certificate of Formation” has the meaning set forth in Section 1.5(b).

 

“Change of Recommendation” has the meaning set forth in Section 4.2(c)(i).

 

“Chosen Courts” has the meaning set forth in Section 8.5(a).

 

“Claims” means any and all Actions, Orders, petitions, appeals, demand letters,
claims, notices of non-compliance or violation, consent and other orders or
consent agreements, in each case, of or with respect to a Governmental Entity or
any other Person.

 

“Closing” has the meaning set forth in Section 1.2.

 

“Closing Date” has the meaning set forth in Section 1.2.

 

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

 

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

 

“Company Board” shall mean the “Board” (as defined in Section 3.1(a)(i) of the
Operating Agreement).

 

Ex. A-2

--------------------------------------------------------------------------------

 

“Company Disclosure Letter” has the meaning set forth in Section 3.1.

 

“Company Insurance Policies” has the meaning set forth in Section 3.1(o).

 

“Company Intellectual Property” has the meaning set forth in Section 3.1(n)(i).

 

“Company Material Adverse Effect” shall mean any change, event, development or
effect that (a) is either individually or in the aggregate, materially adverse
to the assets, liabilities, business, financial condition or results of
operations of the Company and its Subsidiaries, taken as a whole, or
(b) prevents the Company from consummating the Merger; provided, however, that
for the purposes of clause (a) only, none of the following, and no change,
event, development or effect arising out of or resulting from the following,
shall constitute or be taken into account in determining whether a Company
Material Adverse Effect has occurred or may, would or could occur: (i) adverse
events, changes, developments or effects in or generally affecting the
industries in which the Company and its Subsidiaries operate; (ii) general
economic, credit, financial or capital market, regulatory, legislative or
political conditions in the United States or elsewhere in the world, including
changes in interest and exchange rates; (iii) changes in GAAP, accounting
standards or Law or in the interpretation or enforcement thereof; (iv) any
worsening of geopolitical conditions, act of terrorism or an outbreak or
escalation of hostilities or war (whether or not declared); (v) the execution,
announcement, existence of, or compliance with the express terms of, this
Agreement (including announcement of the identity of Parent) or the consummation
of the transactions contemplated by this Agreement, including the impact thereof
on relationships, contractual or otherwise, with customers, suppliers,
distributors, partners, employees or regulators (provided that this clause
(v) shall not diminish the effect of, and shall be disregarded for purposes of,
the representations and warranties contained in Section 3.1(e) or the condition
set forth in Section 6.2(a) as it relates to such representations and
warranties); (vi) the pendency of any litigation arising from allegations of
breach of fiduciary duty or violation of Law relating to this Agreement or the
transactions contemplated by this Agreement; (vii) any adverse change in the
credit ratings of the Company or any of its Subsidiaries (provided that the
exception in this clause (vii) shall not prevent or otherwise affect a
determination that any change, event or effect underlying such adverse change
has resulted in or contributed to a Company Material Adverse Effect), (viii) any
failure to meet any internal or public projections, forecasts or estimates of
revenue, earnings, cash flow or cash position and any seasonal changes in the
results of operations of the business of the Company or any of its Subsidiaries
(provided that the exception in this clause (viii) shall not prevent or
otherwise affect a determination that any change, event, development or effect
underlying such failure has resulted in or contributed to a Company Material
Adverse Effect); (ix) any failure to be awarded a Contract with any military or
national defense organization of a Governmental Entity; and (x) any action taken
by the Company or the Company’s Subsidiaries that is required by this Agreement
or taken at the written request or with the written consent of Parent or Merger
Sub, or the failure to take any action by the Company or its Subsidiaries if
that action is prohibited by this Agreement, except in the case of clauses (i) -
(iv) above to the extent (but only to such extent) such changes, events,
developments or effects have a materially disproportionate adverse impact on the
assets, liabilities, business, financial condition or results of operations of
the Company and its Subsidiaries, taken as a whole, relative to other similarly
situated participants in the principal industries in which the Company and its
Subsidiaries conduct their businesses (in which case the incremental
disproportionate adverse impact of such changes, events, developments or effects
on the Company and its Subsidiaries relative to other similarly

 

Ex. A-3

--------------------------------------------------------------------------------

 

situated participants in the industries in which the Company and its
Subsidiaries operate shall be taken into account for purposes of determining
whether a Company Material Adverse Effect has occurred).

 

“Company Material Contract” has the meaning set forth in Section 3.1(q)(i)(O).

 

“Company Option” shall mean any option to acquire a Unit issued or granted
pursuant to the Management Equity Plan.

 

“Company Plans” has the meaning set forth in Section 3.1(i)(i).

 

“Company Recommendation” has the meaning set forth in Section 3.1(c)(iii).

 

“Company Required Governmental Approvals” has the meaning set forth in
Section 3.1(e)(i).

 

“Company Requisite Approval” shall mean the approval of this Agreement and the
transactions contemplated hereby by the written consent or approval of holders
of a majority of the issued and outstanding Units.

 

“Confidential Information Memorandum” shall mean that certain confidential
information memorandum dated October 2013 prepared by the Company.

 

“Confidentiality Agreement” shall mean that certain confidentiality letter
agreement, dated as of August 26, 2013, by and between Parent and the Company.

 

“Contingent Worker” has the meaning set forth in Section 3.1(m)(ii).

 

“Contract” shall mean any agreement, purchase order, lease, sublease, license,
sublicense, contract, note, mortgage, indenture, arrangement or other obligation
(whether written or oral), including all amendments, extensions and guaranties
with respect thereto.

 

“Costs” has the meaning set forth in Section 4.9(a).

 

“Credit Facilities” shall mean the Term Loan and the ABL Revolver.

 

“D&O Insurance” has the meaning set forth in Section 4.9(b).

 

“Delaware Certificate of Merger” has the meaning set forth in Section 1.3(b).

 

“Director Equity Plan” shall mean the Company’s Director Equity Plan.

 

“Disclosure Letter” has the meaning set forth in Section 8.12(c).

 

“Effective Time” has the meaning set forth in Section 1.3(b).

 

“Employees” has the meaning set forth in Section 3.1(i)(i).

 

“Environmental Law” shall mean any Law, enacted prior to and in effect as of the
Closing Date, relating to or concerning pollution or protection of the
environment or, to the

 

Ex. A-4

--------------------------------------------------------------------------------

 

extent relating to the management of or exposure to Hazardous Materials, health
and safety, including any such Law concerning the import, export, presence, use,
storage, recycling, treatment, generation, transportation, processing, handling
or Release of, or exposure to, any Hazardous Material.

 

“Equity Interests” has the meaning set forth in Section 4.1(a)(iv).

 

“ERISA” has the meaning set forth in Section 3.1(i)(i).

 

“EUMR” has the meaning set forth in Section 6.1(c).

 

“Exchange Act” shall mean the Securities Exchange Act of 1934.

 

“Exchange Funds” has the meaning set forth in Section 2.2(a).

 

“Exchange Fund Letter of Transmittal” has the meaning set forth in Section
2.2(b).

 

“Excluded Units” has the meaning set forth in Section 2.1(b)(i).

 

“Excluded Party” means any Person, group of Persons or group that includes any
Person or group of Persons, from whom the Company has received, during the
period extending from the date of this Agreement until 11:59 p.m. New York time
on the 30th calendar day following the date of this Agreement, a written
Acquisition Proposal that the Board determines in good faith (after consultation
with its outside legal counsel and a financial advisor), prior to such time,
constitutes, or would reasonably be expected to result in, a Superior Proposal;
provided that any such Person or group of persons shall cease to be an Excluded
Party when the ultimate equityholder(s) of such person and the other persons who
were members of such group, if any, as of such time, cease to provide (directly
or indirectly) in the aggregate at least 25% of the equity financing (measured
by voting power and value) of such person or group at any time following such
time.

 

“Expenses” means all out-of-pocket fees and expenses of counsel, investment
banking firms and other financial institutions) actually incurred or accrued by
a party hereto or its Affiliates or on its or their behalf or for which it or
they are liable in connection with or related to the authorization, preparation,
negotiation, execution and performance of the Merger and the other transactions
contemplated by this Agreement, the filing of any required notices under any
Antitrust Law and all other matters related to the consummation of the Merger
and the other transactions contemplated by this Agreement.

 

“Fair Market Value” has the meaning set forth in the Management Equity Plan.

 

“February Balance Sheet” has the meaning set forth in Section 3.1(f)(i).

 

“Financial Statements” has the meaning set forth in Section 3.1(f)(i).

 

“Foreign Plan” has the meaning set forth in Section 3.1(i)(i).

 

Ex. A-5

--------------------------------------------------------------------------------

 

“Fundamental Representations” shall mean the representations and warranties
contained in Section 3.1(a) (Organization, Good Standing and Qualification),
Section 3.1(c) (Organizational Authority and Approval), and
Section 3.1(r) (Brokers and Finders).

 

“GAAP” shall mean United States generally accepted accounting principles,
consistently applied.

 

“Government Bid” shall mean any offer to sell or provide services made by any of
the Company or any of its Subsidiaries prior to the Closing Date which if
accepted, would result in a Government Contract.

 

“Government Contract” shall mean any Contract that is between the Company or any
Subsidiary of the Company and a Governmental Entity.

 

“Government Official” shall mean any officer or employee of a Governmental
Entity or any department, agency or instrumentality thereof, including
state-owned entities, or of a public organization or any person acting in an
official capacity for or on behalf of any such government, department, agency,
or instrumentality or on behalf of any such public organization.

 

“Governmental Antitrust Entity” has the meaning set forth in
Section 4.4(d)(i)(B).

 

“Governmental Entity” has the meaning set forth in Section 3.1(e)(i).

 

“Hazardous Material” means any (a) petroleum and petroleum products, by-products
or breakdown products, radioactive materials, asbestos-containing materials and
polychlorinated biphenyls and (b) any other chemicals, materials, substances or
wastes defined or regulated as toxic or hazardous, or as a pollutant or
contaminant, under any applicable Environmental Law.

 

“HSR Act” has the meaning set forth in Section 3.1(e)(i).

 

“Indebtedness” of any Person shall mean, as of any specified time, (a) all
obligations of such Person for borrowed money, whether current, short-term or
long-term, secured or unsecured, contingent or not contingent, (b) all
obligations of such Person for the deferred purchase price of property or
services, (c) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments for the payment of which such Person is responsible
or liable, (d) all obligations of such Person as an account party in respect of
letters of credit and bankers’ acceptances or similar credit transactions,
(e) all obligations of such Person as lessee under leases that have been or
should be, in accordance with GAAP, recorded as capital leases (other than
capital lease obligations in respect of office equipment), (f) all obligations
under conditional sale, title retention or similar agreements or agreements
creating an obligation with respect to the deferred purchase price of property,
securities or other assets (including “earn-out” payments), (g) any net
obligations in respect of interest rate and currency swaps, collars, caps,
hedges or similar arrangements, (h) any accrued interest, premiums, penalties
and other obligations relating to the foregoing payable in connection with the
repayment thereof on or prior to the Closing Date and (i) all obligations of
such Person guaranteeing in any manner any obligations of any third party of the
type described in the foregoing clauses (a) - (h).

 

Ex. A-6

--------------------------------------------------------------------------------

 

“Indemnified Parties” has the meaning set forth in Section 4.9(a).

 

“Information Statement” has the meaning set forth in Section 4.3.

 

“Intellectual Property” shall mean (a) trademarks, service marks, the
registrations and applications therefor, and renewals thereof, common-law
trademarks, trade dress, and other designations of origin, and the right to
recover for past infringements of, or liabilities for, any and all such rights,
and all goodwill associated therewith and symbolized thereby, (b) patents,
patent applications, continuations, continuations-in-part, divisionals, foreign
counterparts, and any extensions, reexaminations, and reissues thereof,
including the right of claim priority under the Laws of the United States, Paris
Convention and any foreign countries, and the right to recover for past
infringements of, or liabilities for, any such rights, (c) trade secrets and
proprietary know-how and confidential information, including software, technical
data, algorithms, formulae, procedures, protocols, rules of thumb, techniques
and results of experimentation and testing, (d) copyrights and mask works, the
registrations and applications therefor, and renewals, extensions, restorations
and reversions thereof, and all works based upon, derived from, or incorporating
the works covered by such copyrights, and all causes of action for past
infringement based upon said copyrights, and (e) Internet domain names.

 

“Interim Financial Statements” has the meaning set forth in Section 3.1(f)(i).

 

“Intermediate Closing” has the meaning set forth in Section 1.2.

 

“Intermediate Company” has the meaning set forth in the recitals to this
Agreement.

 

“Intermediate Company LLC Agreement Amendment” has the meaning set forth in
Section 1.4(a).

 

“Intermediate Delaware Certificate of Merger” has the meaning set forth in
Section 1.3(a).

 

“Intermediate Effective Time” has the meaning set forth in Section 1.3(a).

 

“Intermediate LLC Agreement” has the meaning set forth in Section 1.4(a).

 

“Intermediate Merger” has the meaning set forth in the recitals to this
Agreement.

 

“Intermediate Merger Sub” has the meaning set forth in the preamble to this
Agreement.

 

“Intervening Event” shall mean, with respect to the Company, a material event,
development or change in circumstances occurring, arising or coming to the
attention of the Company Board after the date of this Agreement, and which was
not known to or by the Company Board as of or prior to the date of this
Agreement; provided, however, that in no event shall (1) the receipt, existence
or terms of an Acquisition Proposal, (2) clearance of the Merger under the HSR
Act, or (3) any matter relating to the foregoing or consequence of the
foregoing, constitute an Intervening Event.

 

Ex. A-7

--------------------------------------------------------------------------------

 

“Intervening Event Change of Recommendation” has the meaning set forth in
Section 4.2(c)(ii).

 

“Inventory” shall mean all inventory, merchandise, goods, and raw materials
maintained, held or stored by or for the Company or any of its Subsidiaries at
the Closing.

 

“IRS” shall mean the Internal Revenue Service.

 

“ITAR” has the meaning set forth in Section 3.1(e)(i).

 

“Knowledge” shall mean (A) when referring to the knowledge of the Company or any
of its Subsidiaries, the actual knowledge as of the date hereof of Bill
Boisture, Don Alvord, Russ Bartlett, Bill Brown, Bill James, Dave Rosenberg,
Alex Snyder (provided that, with respect to Mr. Snyder, such information
excludes privileged legal advice but includes the underlying facts associated
therewith), Christi Tannahill, KJ Tjon or Shawn Vick and (B) when referring to
the knowledge of Parent, the actual knowledge as of the date hereof of E. Robert
Lupone, Frank Connor, Julie Duffy or Blake Meyen after due inquiry.

 

“Latest Balance Sheet” has the meaning set forth in Section 3.1(f)(i).

 

“Law” or “Laws” shall mean any domestic or foreign laws, statutes, ordinances,
rules (including rules of common law), regulations, codes, Orders or legally
enforceable requirements enacted, issued, adopted, or promulgated by any
Governmental Entity and any judicial interpretation thereof.

 

“L/C Final Distribution Date” has the meaning set forth in the Plan of
Reorganization.

 

“L/C Reserve Fund has the meaning set forth in Section 2.2(a).

 

“L/C Secured Claims” has the meaning set forth in the Plan of Reorganization.

 

“L/C Secured Claim Rights Holders” has the meaning set forth in
Section 2.1(b)(i)(B).

 

“L/C Secured Claim Units” has the meaning set forth in Section 2.1(b)(i)(B).

 

“Lease Documents” has the meaning set forth in Section 3.1(p)(ii).

 

“Lien” shall mean any lien, mortgage, deed of trust, charge, pledge, security
interest, claim, encumbrance, charge, option, easement, lease, license, right or
restriction of any kind. For the avoidance of doubt, “Lien” shall not be deemed
to include any licenses of Intellectual Property.

 

“LLC Agreement” has the meaning set forth in Section 1.4(b).

 

“LLCA” has the meaning set forth in the recitals to this Agreement.

 

Ex. A-8

--------------------------------------------------------------------------------

 

“Management Equity Plan” shall mean the Company’s 2013 Management Equity
Incentive Plan.

 

“Match Notice” has the meaning set forth in Section 4.2(c)(ii).

 

“Material Vendors” has the meaning set forth in Section 3.1(v).

 

“Member” has the meaning set forth in the recitals to this Agreement.

 

“Member Registry” shall mean the registry of Members maintained by the Company
in accordance with Section 2.5(a) of the Operating Agreement.

 

“Member Proxy” means the proxy of the Members in the form attached hereto as
Exhibit D.

 

“Merger” has the meaning set forth in the recitals to this Agreement.

 

“Merger Sub” has the meaning set forth in the preamble to this Agreement.

 

“Merger Sub” has the meaning set forth in the preamble to this Agreement.

 

“Minimum Waiting Period” shall mean (a) with respect to an Acquisition Proposal
from an Excluded Party, the period extending from the date of this Agreement
until 11:59 p.m. New York time on the 40th calendar day following the date of
this agreement, and (b) with respect to an Acquisition Proposal from any other
Person, the period extending from the date of this Agreement until 11:59 p.m.
New York time on the 30th calendar day following the date of this Agreement;
provided, that in the event the Company has delivered a Match Notice to Parent,
the Minimum Waiting Period will be automatically extended until 11:59 p.m. on
the first Business Day following the end of the Notice Period (as the Notice
Period may be extended pursuant to Section 4.2(c)(ii)).

 

“Notice Period” has the meaning set forth in Section 4.2(c)(ii).

 

“Operating Agreement” has the meaning set forth in the recitals to this
Agreement.

 

“Order” shall mean any order, decision, judgment, injunction, award, decree or
writ adopted or imposed by, including any consent decree, settlement agreement
or similar determination of any Governmental Entity.

 

“Owned Real Property” shall mean all land, together with all buildings,
structures, improvements and fixtures located thereon, and all easements and
other rights and interests appurtenant thereto, owned by the Company or any
Subsidiary.

 

“Parent” has the meaning set forth in the preamble to this Agreement.

 

“Parent Disclosure Letter” has the meaning set forth in Section 3.2.

 

Ex. A-9

--------------------------------------------------------------------------------

 

“Parent Material Adverse Effect” shall mean any change, event, development or
effect that would reasonably be expected to prevent or materially delay the
Closing or prevent or materially delay the ability of Parent and Merger Sub to
perform their obligations under this Agreement or to consummate the Merger and
the other transactions contemplated by this Agreement.

 

“Parent Required Governmental Approvals” has the meaning set forth in
Section 3.2(c)(i).

 

“Parties” and “Party” have the respective meanings set forth in the preamble to
this Agreement.

 

“Paying Agent” has the meaning set forth in Section 2.2(a).

 

“PBGC Call Agreement” has the meaning set forth in Section 4.7(c).

 

“Per Unit Merger Consideration” has the meaning set forth in
Section 2.1(b)(i)(A).

 

“Per Unsecured Claim Unit Consideration” has the meaning set forth in
Section 2.1(b)(i)(C).

 

“Permit” shall mean any authorizations, licenses, franchises, consents,
certificates, registrations, approvals or other permits of any Governmental
Entity, including any Certificate of Airworthiness, Production Certificate or
Type Certificate.

 

“Permitted Liens” shall mean (a) mechanic’s, materialmen’s, carriers’,
repairers’ and other Liens imposed by Law arising or incurred in the ordinary
course of business for amounts that are not yet delinquent or are being
contested in good faith, (b) Liens for Taxes, assessments or other governmental
charges (i) not yet due and payable as of the Closing Date or (ii) that are
being contested in good faith and for which adequate reserves have been
maintained in accordance with GAAP, (c) minor survey exceptions, reciprocal
easement agreements and other customary encumbrances on title to real property
that (i) were not incurred in connection with any Indebtedness, (ii) do not
render title to the property encumbered thereby unmarketable, and (iii) do not,
individually or in the aggregate, materially and adversely affect the value of
or the use of such property for its current and anticipated purposes, (d) Liens
granted to any lender at the Closing in connection with any financing by Parent
or Merger Sub of the transactions contemplated hereby, (e) zoning, building
codes and other land use Laws regulating the use or occupancy of real property
or the activities conducted thereon which are imposed by any Governmental Entity
having jurisdiction over such real property and which are not violated by the
current use or occupancy of such real property or the operation of the
businesses of the Company and its Subsidiaries except for any violation of which
would not reasonably be expected to materially and adversely affect the Company
and its Subsidiaries taken as a whole and (f) Liens described on Section P-1 of
the Company Disclosure Letter.

 

“Person” shall mean any individual, corporation (including not-for-profit),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, Governmental Entity or other entity of
any kind or nature.

 

Ex. A-10

--------------------------------------------------------------------------------

 

“Phantom Unit” shall mean a grant of one phantom Unit under the Management
Equity Plan or Director Equity Plan if specified vesting conditions are met.

 

“Plan of Reorganization” shall mean the Amended Joint Plan of Reorganization
Pursuant to Chapter 11 of the Bankruptcy Code dated January 30, 2013, filed by
the predecessor in interest to the Company and certain other affiliated debtors,
as confirmed by that certain Findings of Fact, Conclusions of Law and Order
Confirming the Debtors’ Amended Joint Plan of Reorganization Pursuant to Chapter
11 of the Bankruptcy Code of such court dated February 1, 2013.

 

“Primary Exchange Fund” has the meaning set forth in Section 2.2(a).

 

“Production Certificates” shall mean any approvals issued any Aviation
Regulatory Authority to manufacture aircraft pursuant to a Type Certificate.

 

“Qualifying Confidentiality Agreement” has the meaning set forth in
Section 4.2(b)(i).

 

“Receivables” shall mean any and all accounts receivable, notes and other
amounts receivable from third parties, including customers and employees,
arising from the conduct of the Company’s or any of its Subsidiaries’ businesses
prior to the Closing, whether or not in the ordinary course, together with any
unpaid financing charges accrued thereon.

 

“Record Date” has the meaning set forth in Section 3.1(c)(iv).

 

“Registered Company Intellectual Property” has the meaning set forth in
Section 3.1(n)(i).

 

“Reimbursable Expenses” has the meaning set forth in Section 7.5(d).

 

“Release” means disposing, discharging, injecting, spilling, leaking, leaching,
dumping, emitting, escaping, emptying, or seeping, of Hazardous Materials into
or upon the environment.

 

“Representatives” shall mean with respect to any Person, such Person’s
directors, officers, employees, investment bankers, attorneys, accountants,
consultants, agents and other advisors or representatives.

 

“Residual Equity Value” has the meaning set forth in the Management Equity Plan.

 

“Residual Units” has the meaning set forth in Section 2.3(d).

 

“Restricted Units” shall mean an award of Units under the Management Equity Plan
that is subject to forfeiture if specified vesting criteria are not achieved.

 

“Secured Claim Units” has the meaning set forth in Section 2.1(b)(i)(A).

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

Ex. A-11

--------------------------------------------------------------------------------

 

“Subsidiary” shall mean, with respect to any Person, any other Person of which
at least a majority of the securities or ownership interests having, by their
terms, ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions is directly or indirectly owned or
controlled by such Person or by one or more of its Subsidiaries.

 

“Superior Proposal” shall mean any bona fide written Acquisition Proposal that
did not result from a breach of Section 4.2 that the Company Board has
determined in its good faith judgment, after consultation with its financial
advisors and outside legal counsel, and taking into account the relevant legal,
regulatory, financial and other aspects of such proposal (including financing
and legal and regulatory considerations, expense reimbursement requirements and
any conditions to, and expected timing and risks of, completion, as well as any
changes to the terms of the this Agreement proposed by Parent in response to
such Superior Proposal), would be (a) more favorable, including from a financial
point of view, to the Members than the Merger and (b) reasonably expected to be
consummated; provided that no Acquisition Proposal shall be deemed to be a
“Superior Proposal” if any financing required to consummate the transaction
contemplated by such Acquisition Proposal is not committed or if the receipt of
any such financing is a condition to the consummation of such transaction. For
purposes of the definition of “Superior Proposal”, the references to “20%” in
the definition of Acquisition Proposal shall be deemed to be references to
“50%”.

 

“Surviving Company” has the meaning set forth in Section 1.1(b).

 

“Tax” or “Taxes” shall mean taxes of any kind whatsoever (whether payable
directly or by withholding), including national, federal, state, provincial and
local, whether domestic or foreign, income, profits, franchise, gross receipts,
customs duty, documentary, stamp, payroll, sales, use, employment, personal
property, real property, intangible personal property, social security, wages,
pension, withholding, excise, production, ad valorem, value added, and other
taxes, together with all interest, penalties and additions imposed with respect
thereto.

 

“Tax Return” shall mean returns and reports required to be filed with a Tax
authority relating to Taxes.

 

“Tax Sharing Agreements” has the meaning set forth in Section 5.2.

 

“Term Loan” shall mean the Senior Secured Term Credit Agreement, dated as of
February 15, 2013, among Beechcraft Holdings LLC, Beech Enterprises, LLC, the
Lenders party thereto and JPMorgan Chase Bank, N.A. as Administrative Agent and
Collateral Agent, as amended by the First Amendment dated as of April 22, 2013.

 

“Termination Date” has the meaning set forth in Section 7.2(a).

 

“Termination Fee” shall mean an amount equal to $48 million.

 

“Treasury Regulations” means tax regulations, including any temporary or
proposed regulations, promulgated under the Code, as such regulations may be
amended from time to time.

 

Ex. A-12

--------------------------------------------------------------------------------

 

“Trust Agreement” means a trust agreement entered into by the Company and the
Trustee consistent with the terms set forth in Exhibit E.

 

“Trustee” means a trustee to be mutually agreed by the Parties acting
reasonably.

 

“Type Certificates” means approvals issued by any Aviation Regulatory Authority
in regards to the design of aircraft, engines or propellers, including any
supplemental Type Certificates or amended Type Certificates.

 

“U.S. Plan” has the meaning set forth in Section 3.1(i)(i).

 

“Unit” and “Units” shall mean a limited liability company interest in the
Company and, for the avoidance of doubt, following the Intermediate Effective
Time, a limited liability company interest in the Intermediate Company.

 

“Unsecured Claim” has the meaning set forth in the Trust Agreement.

 

“Unsecured Claim Unit” shall mean a Unit that was issued and allocated in
accordance with the Plan of Reorganization to a holder of an Unsecured Claim.

 

“Unsecured Trust” has the meaning set forth in Section 2.2(c).

 

“VAT” shall mean (i) any value added tax as may be levied in accordance with
(but subject to derogation from) Council Directive 2006/112/EC, and (ii) any
other value added Tax imposed by a jurisdiction outside the European Union upon
the sale of goods or services of a similar nature to and based on a similar
refund mechanism as such Tax referred to in clause (i).

 

Ex. A-13

--------------------------------------------------------------------------------

 

EXHIBIT B

 

FORM OF INTERMEDIATE COMPANY LLC AGREEMENT AMENDMENT

 

Ex. B

--------------------------------------------------------------------------------

 

EXHIBIT B

 

 

FIRST AMENDMENT

TO

OPERATING AGREEMENT

OF

BEECH HOLDINGS, LLC

 

 

THIS AMENDMENT (this “Amendment”) to the Operating Agreement of Beech Holdings,
LLC, a Delaware limited liability company (the “Company”), dated as of
February 15, 2013, as amended1 (the “Initial LLC Agreement” and the Initial LLC
Agreement as amended by this Amendment, the “LLC Agreement”), is being effected
pursuant to Section 18-209(f) of the Delaware Limited Liability Company Act (as
the same may be amended from time to time, the “Act”) by operation of the merger
of Sky Intermediate Merger Sub, LLC, a Delaware limited liability company
(“Intermediate Merger Sub”) with and into the Company, with the Company
surviving such merger (the “Intermediate Merger”). This Amendment shall become
effective at the Intermediate Effective Time (as defined in the Agreement and
Plan of Merger dated as of December       , 2013 by and among the
Company, Intermediate Merger Sub, [Parent] (“Parent”) and [Merger Sub] (“Merger
Sub”) (as amended, the “Merger Agreement”)). Capitalized terms used herein and
not otherwise herein defined have the meanings given to such terms in the LLC
Agreement.

 

WHEREAS, the Board has determined that the Merger Agreement and the transactions
contemplated by the Merger Agreement, including, without limitation, the merger
(the “Project Sky Merger”) of Merger Sub with and into the Company, are
advisable to and in the best interests of the Company and the Members; and

 

WHEREAS, the Intermediate Merger is a condition to the Project Sky Merger; and

 

WHEREAS, the Company desires to amend the Initial LLC Agreement pursuant to the
Intermediate Merger (i) to create the defined term “Majority Member Vote” and
(ii) to contemplate expressly the treatment in the Project Sky Merger of the
Units and the rights under the Reorganization Plan to receive Units in the
future, which treatment is consistent with the terms of the Reorganization Plan.

 

NOW, THEREFORE, the Initial LLC Agreement is hereby amended as follows:

 

1.         Majority Member Vote. Exhibt A (Definitions) to the Initial LLC
Agreement is hereby amended to add the following defined term:

 

“Majority Member Vote” means the affirmative vote or written consent of Members
holding at least a Majority of the issued and outstanding Units.

 

--------------------------------------------------------------------------------

1              NTD: We understand that the LLC Agreement was previously amended
to change the terms of the director grants.

 

--------------------------------------------------------------------------------

 

2.         Treatment of Units in Merger. Article IX (Miscellaneous) of the
Initial LLC Agreement is hereby amended to add the following new Section 9.21:

 

Section 9.21    “Project Sky Merger” Notwithstanding anything to the contrary in
this Agreement, in the merger (the “Project Sky Merger”) of the Company with
[Merger Sub] or any other affiliate of [Parent] pursuant to the Agreement and
Plan of Merger dated as of December       , 2013 (the “Project Sky Merger
Agreement”) among the Company, Sky Intermediate Merger Sub, LLC, a Delaware
limited liability company, [Parent] and [Merger Sub], (a) all Units and all
rights under the Reorganization Plan to receive Units in the future
(“Unallocated Unit Rights”), including, without limitation, rights with respect
to Allowed L/C Secured Claims and Unsecured Claims, shall be converted into the
right to receive the consideration, if any, set forth in the Project Sky Merger
Agreement and, with respect to Unsecured Claims, the Trust Agreement, on the
terms and conditions set forth in the Project Sky Merger Agreement and, with
respect to Unsecured Claims, the Trust Agreement, and the holders of such Units
and such Unallocated Unit Rights shall have no rights following the Project Sky
Merger other than the right to receive the consideration, if any, into which
such Units and Unallocated Unit Rights convert and on the terms and conditions
set forth in the Project Sky Merger Agreement and, with respect to Unsecured
Claims, the Trust Agreement. Capitalized terms used in this Section 9.21 and not
otherwise defined in this Agreement shall have the meanings ascribed thereto in
the Project Sky Merger Agreement.

 

3.         Confirmation of LLC Agreement. Except as amended pursuant to this
Amendment, the Initial LLC Agreement shall continue in full force and effect.
This Amendment shall be deemed to be incorporated in full into the Initial LLC
Agreement.

 

4.         Governing Law. This Amendment and the rights of the parties hereunder
shall be governed by, interpreted, and enforced in accordance with the laws of
the State of Delaware, without reference to conflicts of law principles.

 

5.         Binding Effect. This Amendment shall be binding upon, and shall inure
to the benefit of, the parties to the Initial LLC Agreement and their respective
successors and assigns.

 

- 2 -

--------------------------------------------------------------------------------

 

EXHIBIT C

 

 

FORM OF SURVIVING COMPANY LIMITED LIABILITY COMPANY AGREEMENT

 

Ex. C

--------------------------------------------------------------------------------

 

EXHIBIT C

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

[TEXTRON ACQUISITION LLC]

 

 

THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (the “Agreement”)
of [TEXTRON ACQUISITION LLC] (the “Company”) dated as of the [      ], by
TEXTRON INC., a Delaware corporation, as the sole member of the Company (the
“Member”).

 

RECITAL

 

The Member has formed the Company as a limited liability company under the laws
of the State of Delaware and desires to enter into a written agreement, in
accordance with the provisions of the Delaware Limited Liability Company Act and
any successor statute, as amended from time to time (the “Act”), governing the
affairs of the Company and the conduct of its business.

 

 

ARTICLE 1

The Limited Liability Company

 

1.1 Formation. Concurrently with the execution of this Agreement, the Member has
formed the Company as a limited liability company pursuant to the provisions of
the Act. A certificate of formation for the Company as described in
Section 18-201 of the Act (the “Certificate of Formation”) has been executed and
filed in the Office of the Secretary of State of the State of Delaware in
conformity with the Act, by the authorized person listed in the “LLC Execution
Authorization” attached hereto as Exhibit A.

 

1.2 Name. The name of the Company shall be “Textron Acquisition LLC” and its
business shall be carried on in such name with such variations and changes as
the Member shall determine or deem necessary to comply with requirements of the
jurisdictions in which the Company’s operations are conducted.

 

1.3 Business Purpose; Powers. The Company is formed for the purpose of engaging
in any lawful business, purpose or activity for which limited liability
companies may be formed under the Act. The Company shall possess and may
exercise all the powers and privileges granted by the Act or by any other law or
by this Agreement, together with any powers incidental thereto, so far as such
powers and privileges are necessary or convenient to the conduct, promotion or
attainment of the business purposes or activities of the Company.

 

1.4 Registered Office and Agent. The location of the registered office of the
Company shall be Corporation Trust Center, 1209 Orange Street, Wilmington,
Delaware 19801. The Company’s Registered Agent at such address shall be The
Corporation Trust Company.

 

--------------------------------------------------------------------------------

 

1.5 Term. Subject to the provisions of Article 5 below, the Company shall have
perpetual existence.

 

 

ARTICLE 2

The Member

 

 

2.1 The Member. The name and address of the Member are as follows:

 

Name

Address

Textron Inc.

40 Westminster Street

 

Providence, RI 02903

 

2.2    Actions by the Member; Meetings. The Member may approve a matter or take
any action at a meeting or without a meeting by the written consent of the
Member. Meetings of the Member may be called at any time by the Member.

 

2.3    Liability of the Member. All debts, obligations and liabilities of the
Company, whether arising in contract, tort or otherwise, shall be solely the
debts, obligations and liabilities of the Company, and the Member shall not be
obligated personally for any such debt, obligation or liability of the Company
solely by reason of being a member.

 

2.4    Power to Bind the Company. The Member (acting in its capacity as such)
shall have the authority to bind the Company to any third party with respect to
any matter.

 

2.5    Admission of Members. New members shall be admitted only upon the
approval of the Member.

 

 

ARTICLE 3

Management by the Member

 

 

3.1    Management. The management of the Company is fully reserved to the
Member, and the Company shall not have “managers,” as that term is used in the
Act. The powers of the Company shall be exercised by or under the authority of,
and the business and affairs of the Company shall be managed under the direction
of, the Member, who shall make all decisions and take all actions for the
Company. In managing the business and affairs of the Company and exercising its
powers, the Member shall act through resolutions adopted in written consents.
Decisions or actions taken by the Member in accordance with this Agreement shall
constitute decisions or action by the Company and shall be binding on the
Company.

 

3.2    Officers and Related Persons. The Member shall have the authority to
appoint and terminate officers of the Company and retain and terminate
employees, agents and consultants of the Company and to delegate such duties to
any such officers, employees, agents and consultants as the Member deems
appropriate,

 

--------------------------------------------------------------------------------

 

including the power, acting individually or jointly, to represent and bind the
Company in all matters, in accordance with the scope of their respective duties.

 

 

ARTICLE 4

Capital Structure, Contributions and

Limited Liability Company Shares

 

4.1    No Contribution or Limited Liability Company Interest Until Election. The
Member is admitted as the sole member of the Company without making a
contribution to the Company and without acquiring a limited liability company
interest in the Company, as such admission is described in Section 18-301(d) of
the Act. Until such a date as the Member elects, through action by written
consent as described in Article 2.2 of this Agreement, to make a contribution or
to acquire a limited liability interest in the Company, the Member will be
deemed to have made no contribution to and to have acquired no interest in the
Company. At such time as the Member makes such election and makes a
contribution, the Member shall receive a first issue membership interest in the
Company.

 

 

ARTICLE 5

Dissolution

 

5.1    Events of Dissolution. The Company shall be dissolved and its affairs
wound up upon the occurrence of any of the following events (each, an “Event of
Dissolution”):

 

(a) The Member votes for dissolution; or

 

(b) A judicial dissolution of the Company under Section 18-802 of the Act.

 

 

ARTICLE 6

Exculpation and Indemnification

 

6.1    Right to Indemnification. Each person who was or is a party or is
threatened to be made a party to or is involved (as a party, witness, or
otherwise), in any threatened, pending, or completed action, suit, arbitration,
alternative dispute resolution procedure or other proceeding, whether civil,
criminal, administrative, or investigative (hereafter a “Proceeding”), by reason
of or in connection with the fact that such person, or another person of whom
such person is the legal representative, is or was (i) a director or officer of
the Company (which, for purposes of this Article 6 shall be deemed to refer to
the Company or Beech Holdings, LLC (“Beech”)), (ii) serving at the request of
the Company as a director, officer, member, employee, or agent of another
foreign or domestic corporation or other business entity, partnership, joint
venture, trust, or other enterprise, and is a director or officer of the
Company, (iii) a director, officer, employee, or agent of a foreign or domestic
corporation or other business entity hereafter acquired by the Company, and such
person is a director or officer of the Company, or (iv) a trustee or
administrator or other provider of service with respect to employee benefit
plans, whether the basis of

 

--------------------------------------------------------------------------------

 

the Proceeding is alleged action in an official capacity as a director or
officer of the Company, or in any other capacity while serving as a director,
officer, employee, or agent of another business enterprise at the request of the
Company (each of the persons referenced in the foregoing clauses (i) —
(iv) hereafter generically referred to as a “Representative”), shall be
indemnified and held harmless by the Company (but not by any member
individually) to the fullest extent authorized by statutory and decisional law,
as the same exists or may hereafter be interpreted or amended (but, in the case
of any such amendment or interpretation, only to the extent that such amendment
or interpretation permits the Company to provide broader indemnification rights
than were permitted prior thereto) against all expenses incurred or suffered by
such person in connection with investigating, defending, being a witness in, or
participating in (including on appeal), or preparing for any of the foregoing in
any Proceeding; provided, however, that (y) except as to actions to enforce
indemnification rights pursuant to Article 6.3, the Company shall indemnify any
Representative seeking indemnification in connection with a Proceeding (or part
thereof) initiated by such person only if the Proceeding (or part thereof) was
authorized by the Board and (z) no person shall be entitled to indemnification
hereunder to the extent the Proceeding results from such person’s fraud, gross
negligence or willful misconduct as determined in a final, nonappealable
judgment by a court of competent jurisdiction. The termination of any Proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person acted
fraudulently or with gross negligence or willful misconduct, or did not act in
good faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
Proceeding, had reasonable cause to believe that his or her conduct was
unlawful. The right to indemnification conferred in this Article 6 shall be a
contract right.

 

6.2    Authority to Advance Expenses. Expenses incurred by a director or officer
of the Company (acting in his or her capacity as such) in defending a Proceeding
shall be paid by the Company in advance of the final disposition of such
Proceeding, provided, however, in each case, that such expenses shall be
advanced only upon delivery to the Company of an undertaking by or on behalf of
such director or officer of the Company to repay such amount if it shall
ultimately be determined that he or she is not entitled to be indemnified by the
Company as authorized in this Article 6 or otherwise. Any obligation to
reimburse the Company for expense advances shall be unsecured, and no interest
shall be charged thereon.

 

6.3    Right of Claimant to Bring Suit. If a claim under Article 6.1 or
Article 6.2 is not paid in full by the Company within thirty (30) days after a
written claim has been received by the Company, the claimant may at any time
thereafter bring suit against the Company to recover the unpaid amount of the
claim and, if successful in whole or in part, the claimant shall be entitled to
be paid also the expense (including attorneys’ fees) of prosecuting such claim.
It shall be a defense to any such action that the claimant has been determined
in a final, nonappealable judgment by a court of competent jurisdiction to have
not met the standards of conduct that make it permissible under Article 6.1 to
indemnify the claimant for the amount claimed. The burden of proving such a
defense shall be on the Company. Neither the failure of the Company (including
its Board or independent legal counsel) to have made a determination prior to
the commencement of such action that

 

--------------------------------------------------------------------------------

 

indemnification of the claimant is proper under the circumstances because he or
she has met the applicable standard of conduct set forth in Article 6.1, nor an
actual determination by the Company (including its Board or independent legal
counsel) that the claimant had not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that claimant has not
met the applicable standard of conduct.

 

6.4    Provisions Nonexclusive. The rights conferred on any person by this
Article 6 shall not be exclusive of any other rights that such person may have
or hereafter acquire under any statute, provision of the Certificate of
Formation, agreement, or otherwise, both as to action in an official capacity
and as to action in another capacity while holding such office.

 

6.5    Authority to Insure. The Company may purchase and maintain insurance to
protect itself and any Representative against any expense asserted against or
incurred by such person, whether or not the Company would have the power to
indemnify the Representative against such expense under applicable law or the
provisions of this Article 6.

 

6.6    Survival of Rights. The rights provided by this Article 6 shall continue
as to a person who has ceased to be a Representative and shall inure to the
benefit of the successors, heirs, executors, and administrators of such person.

 

6.7    Settlement of Claims. The Company shall not be liable to indemnify any
Representative under this Article 6 (a) for any amounts paid in settlement of
any action or claim effected without the Company’s written consent, which
consent shall not be unreasonably withheld or delayed; or (b) for any judicial
award, if the Company was not given a reasonable and timely opportunity to
participate, at its expense, in the defense of such action.

 

6.8    Effect of Amendment. Any amendment, repeal, or modification of this
Article 6 shall not adversely affect any right or protection of any
Representative existing at the time of such amendment, repeal, or modification,
whether or not any matter for which indemnification may be sought, shall have
occurred.

 

6.9    Subrogation. In the event of payment under this Article 6, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of the Representative, who shall execute all papers required and shall
do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to bring
suit to enforce such rights.

 

6.10  No Duplication of Payments. The Company shall not be liable under this
Article 6 to make any payment in connection with any claim made against the
Representative to the extent the Representative has otherwise actually received
payment (under any insurance policy, agreement, vote, or otherwise) of the
amounts otherwise indemnifiable hereunder.

 

6.11  Prior Rights. The Company acknowledges and agrees that, (a) pursuant to
the Reorganization Plan (as defined in the Merger Agreement), the

 

--------------------------------------------------------------------------------

 

Company and each of its subsidiaries is obligated to provide for the
indemnification, defense, reimbursement, exculpation, and/or limitation of
liability of, and advancement of fees and expenses to, Hawker Beechcraft, Inc.’s
and its subsidiaries’ directors, officers, employees, or agents that served
prior to February 15, 2013 at least to the same extent as was set forth in the
organizational documents of each of Hawker Beechcraft, Inc. and its subsidiaries
as of May 3, 2012, against any claims or causes of action, whether direct or
derivative, liquidated or unliquidated, fixed or contingent, disputed or
undisputed, matured or unmatured, known or unknown, foreseen or unforeseen,
asserted or unasserted, (b) that such current and former directors, officers,
employees and agents shall be entitled to indemnification hereunder as
Representatives in accordance with the terms hereof in furtherance in of the
Company’s satisfaction of such obligations and (c) the Company shall not, and
cause its subsidiaries to not, amend and/or restate this Agreement or any of the
organizational documents of the Company or its subsidiaries after the date
hereof to terminate, or in a manner which would materially adversely affect, any
of the Company or its subsidiaries obligations to provide such indemnification
rights to such directors, officers, employees, and agent; provided that this
Article 6.11 is qualified in its entirety by reference to Section 4.9 of the
Agreement and Plan of Merger, dated as of December [   ], 2013, among the
Company, the Member, Beech and Sky Intermediate Merger Sub, LLC (the “Merger
Agreement”) and that this Article 6.11 is not intended to constitute or expand
upon, and shall not be construed as constituting or expanding upon,
representations, warranties and covenants of the Company contained in the Merger
Agreement.

 

 

ARTICLE 7

Miscellaneous

 

7.1    Tax Treatment. Unless otherwise determined by the Member, the Company
shall be a disregarded entity for U.S. federal income tax purposes (as well as
for any analogous state or local tax purposes), and the Member and the Company
shall timely make any and all necessary elections and filings for the Company
treated as a disregarded entity for U.S. federal income tax purposes (as well as
for any analogous state or local tax purposes).

 

7.2    Amendments. Amendments to this Agreement and to the Certificate of
Formation shall be approved in writing by the Member. An amendment shall become
effective as of the date specified in the approval of the Member or if none is
specified as of the date of such approval or as otherwise provided in the Act.

 

7.3    Severability. If any provision of this Agreement is held to be invalid or
unenforceable for any reason, such provision shall be ineffective to the extent
of such invalidity or unenforceability; provided, however, that the remaining
provisions will continue in full force without being impaired or invalidated in
any way unless such invalid or unenforceable provision or clause shall be so
significant as to materially affect the expectations of the Member regarding
this Agreement. Otherwise, any invalid or unenforceable provision shall be
replaced by the Member with a valid provision which most closely approximates
the intent and economic effect of the invalid or unenforceable provision.

 

--------------------------------------------------------------------------------

 

7.4    Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to the
principles of conflicts of laws thereof.

 

7.5    Limited Liability Company. The Member intends to form a limited liability
company and does not intend to form a partnership under the laws of the State of
Delaware or any other laws.

 

IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the
day first above written.

 

 

 

TEXTRON INC.

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

Elizabeth C. Perkins

 

Title:

Vice President and

 

 

Deputy General Counsel

 

--------------------------------------------------------------------------------

 

Exhibit A

 

 

LLC Execution Authorization

 

 

The following individual is authorized hereunder to execute a Certificate of
Formation, and cause said Certificate of Formation to be filed in the Office of
the Secretary of State of the State of Delaware in conformity with the Act:

 

Ann T. Willaman

 

--------------------------------------------------------------------------------

 

EXHIBIT D

 

FORM OF MEMBER PROXY

 

Ex. D

--------------------------------------------------------------------------------

 

EXHIBIT D

 

BEECH HOLDINGS, LLC

 

IRREVOCABLE PROXY TO ACT BY WRITTEN CONSENT

 

 

The undersigned (the “Undersigned Member”), being a member and owner of Units of
Beech Holdings, LLC, a Delaware limited liability company (the “Company”),
hereby grants the following irrevocable proxy in respect of all Units that such
Member owns, in accordance with the Operating Agreement of the Company, the
Agreement and Plan of Merger dated as of December 26, 2013 by and among the
Company, Textron Inc., a Delaware corporation (“Parent”), Textron Acquisition
LLC, a Delaware limited liability company (“Merger Sub”), and Sky Intermediate
Merger Sub, LLC, a Delaware limited liability company (“Intermediate Merger
Sub”), as the same may be amended from time to time (the “Merger Agreement”; a
copy of which is attached hereto as Exhibit A; capitalized terms used but not
otherwise defined herein have the meanings ascribed to such term in the Merger
Agreement), and the Delaware Limited Liability Company Act (the, “Act”).

 

RECITALS

 

WHEREAS, the Merger Agreement provides for (a) the merger of Intermediate Merger
Sub with and into the Company, with the Company surviving (such surviving
company, the “Intermediate Company”, and such merger, the “Intermediate
Merger”), as a result of which certain amendments will be made to the Operating
Agreement as set forth in the Merger Agreement, and (ii) immediately following
the consummation of the Intermediate Merger, the merger of Merger Sub with and
into the Intermediate Company, with the Intermediate Company surviving the
Merger (the “Merger”, and together with the Intermediate Merger, the “Mergers”),
as a result of which the Company will become a wholly owned subsidiary of
Parent;

 

WHEREAS, the board of directors of the Company has, by the unanimous vote of the
board members present, (i) determined that the Merger Agreement and the
transactions contemplated thereby are advisable to and in the best interests of
the Company and the owners of Units (each such owner, a “Member” and,
collectively, the “Members”), (ii) approved the execution, delivery and
performance of the Merger Agreement by the Company and the consummation of the
Mergers and the other transactions contemplated thereby, (iii) directed that,
following its execution, the Merger Agreement and the Mergers be submitted to
the Members necessary to obtain the Company Requisite Approval in accordance
with the Act and the Operating Agreement and (iv) established a record date that
is fifteen (15) calendar days from the date of the Merger Agreement for purposes
of obtaining the Company Requisite Approval; and

 

WHEREAS, the Undersigned Member wishes to approve and adopt the Merger Agreement
and the Mergers in accordance with the Act and the Operating Agreement, and
wishes for such approval to be irrevocable.

 

Grant of Irrevocable Proxy

 

The Undersigned Member hereby irrevocably appoints as its proxy and
attorney-in-fact, E. Robert Lupone and John Curran, and each

 

--------------------------------------------------------------------------------

 

of them acting separately, and the successors and assigns of each (collectively,
the “Grantees”), with full power of substitution and resubstitution, from the
date hereof to the termination of the Merger Agreement in accordance with its
terms, to vote and act by written consent (in the form attached hereto as Annex
A or otherwise) with respect to all Units of the Undersigned Member to approve
and adopt the Merger Agreement and the Mergers and all terms of the Mergers as
set forth therein. This proxy is coupled with an interest sufficient in law to
support an irrevocable proxy, and the Undersigned Member will take such further
action or execute such other instruments as may be necessary to effectuate the
intent of this proxy and hereby revokes any proxy previously granted by the
Undersigned Member which would conflict with or limit the exercise of this proxy
with respect to the Merger Agreement and the Mergers. For the avoidance of
doubt, (x) such proxy shall remain in effect and remain irrevocable
notwithstanding any transfer or disposition of the Units to which it relates and
(y) the Grantees shall be required to act by written consent to approve and
adopt the matters covered by this proxy.

 

Termination of Approval and Proxy

 

The irrevocable proxy granted hereby shall be of no further force and effect
upon the earlier of (a) any termination of the Merger Agreement in accordance
with its terms, (b) the time of any modification, waiver or amendment to the
Merger Agreement that either (x) materially adversely affects the rights,
privileges and preferences of the holders of Units pursuant to the Merger
Agreement as in effect on the date hereof or (y) reduces the amount, changes the
form or otherwise adversely affects the consideration payable to holders of
Units pursuant to the Merger Agreement as in effect on the date hereof, in the
case of either (x) or (y), without the written approval of the Undersigned
Member, and (c) the written agreement of Parent and the Undersigned Member to
terminate this proxy, at which time such proxy shall automatically terminate and
be of no further force and effect.

 

No Transfers or Inconsistent Agreements

 

The Undersigned Member shall not, directly or indirectly, (i) sell, transfer
(including by operation of law), pledge, assign or otherwise encumber or dispose
of, or enter into any agreement, option or other arrangement (including any
profit sharing arrangement) or understanding with respect to any of the Units
owned of record and/or beneficially by the Undersigned Member to any person
other than Parent or Parent’s designee, (ii) deposit any such Units into a
voting trust or enter into any voting

 

--------------------------------------------------------------------------------

 

arrangement, whether by proxy, voting agreement, voting trust,
power-of-attorney, attorney-in-fact, agent or otherwise, with respect to such
Units, or (iii) take any other action that would in any way restrict, limit or
interfere with the performance of the Undersigned Member’s obligations
hereunder; provided that, notwithstanding anything to the contrary set forth
herein, the Undersigned Member may transfer any such Units to (x) any of its
controlled Affiliates so long as such controlled Affiliate agrees in writing to
be bound by the terms of this irrevocable proxy with respect to such Units and
(y) to any other transferee so long as such third-party transferee agrees in
writing to be bound by the terms of this irrevocable proxy with respect to such
Units.

 

No Solicitation

 

Neither the Undersigned Member nor any of its Affiliates shall take any action
with respect to the Company or any of its Subsidiaries, directly or indirectly,
which the Company would be prohibited from taking pursuant to Section 4.2 of the
Merger Agreement.

 

Reliance

 

The Undersigned Member understands and acknowledges that Parent and Merger Sub
are entering into the Merger Agreement in reliance upon the Undersigned Member’s
execution and delivery of this irrevocable proxy to act by written consent.

 

Representations and Warranties

 

The Undersigned Member represents and warrants to Parent as follows:

 

1.            The Undersigned Member has all requisite capacity and authority to
grant this irrevocable proxy.

 

2.            This irrevocable proxy has been duly executed and delivered by the
Undersigned Member.

 

3.            The execution and delivery of this irrevocable proxy by the
Undersigned Member does not violate or conflict with, or constitute a default
under, any agreement, instrument, contract or other obligation or any order,
arbitration award, judgment or decree to which the Undersigned Member is a party
or by which the Undersigned Member is bound, or any applicable law, statute,
rule or regulation or undertaking to any regulatory, administrative or
supervisory body (including, without limitation, any relevant stock exchange or
securities council) to

 

--------------------------------------------------------------------------------

 

which the Undersigned Member is subject or, in the event that the Undersigned
Member is a corporation, partnership, trust or other entity, any memorandum and
articles of association, charter, bylaw or other organizational document of the
Undersigned Member.

 

4.            The Undersigned Member is the record and beneficial owner of, or
is the trustee that is the record holder of, and whose beneficiaries are the
beneficial owners of, and has good title to all of the Units set forth on Annex
B hereto, free and clear of all liens and encumbrances with full power and
authority to transfer good and valid title of its Units free and clear of all
liens and encumbrances. The Undersigned Member does not own, of record or
beneficially, any units or securities of the Company other than the Units set
forth on Annex B hereto (other than units subject to options over which the
Undersigned Member will have no voting rights until the exercise of such
options). The Undersigned Member has the right to vote the Units set forth on
Annex B hereto, and none of such Units is subject to any voting trust or other
agreement, arrangement or restriction with respect to the voting of such Units.

 

Miscellaneous

 

The provisions of Sections 8.4 (Counterparts) and 8.5 (Governing Law and Venue;
Waiver of Jury Trial; Specific Performance) of the Merger Agreement shall apply
to this irrevocable proxy mutatis mutandis.

 

 

 

[Signature page follows]

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned has executed this irrevocable proxy to act
by written consent on the date set forth below.

 

 

 

Member (if an Individual)

Dated:

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

 

 

 

 

Member (if an Entity):

Dated:

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

ACCEPTED, AGREED AND ACKNOWLEDGED

 

 

 

 

 

Beech Holdings, LLC

Dated:

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

Textron Inc.

Dated:

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

Signature Page to Irrevocable Proxy

 

--------------------------------------------------------------------------------

 

ANNEX A

 

WRITTEN CONSENT

OF THE UNIT HOLDERS

OF

BEECH HOLDINGS, LLC

 

The undersigned (the “Undersigned Member”), being a member and owner of Units of
Beech Holdings, LLC, a Delaware limited liability company (the “Company”),
hereby adopts the following resolutions as if such resolutions had been adopted
at a duly convened meeting of the Unit holders of the Company, such resolutions
to be effective as of January 10, 2014 for all purposes of the Limited Liability
Company Act of the State of Delaware (the “Act”) and the Operating Agreement of
the Company dated as of February 15, 2013, as the same may be amended from time
to time (the “Operating Agreement”):

 

WHEREAS, the Company has entered into the Agreement and Plan of Merger dated as
of December 26, 2013 by and among the Company, Sky Intermediate Merger Sub, LLC,
a Delaware limited liability company (“Intermediate Merger Sub”), Textron Inc.,
a Delaware corporation (“Parent”), and Textron Acquisition LLC, a Delaware
limited liability company (“Merger Sub”) (as the same may be amended from time
to time) (the “Merger Agreement”; a copy of which has previously been provided
to the Undersigned Member; capitalized terms used but not otherwise defined
herein have the meanings ascribed to such term in the Merger Agreement),
pursuant to which (i) Intermediate Merger Sub will be merged with and into the
Company, with the Company surviving (such surviving company, the “Intermediate
Company”, and such merger, the “Intermediate Merger”) and (ii) immediately
following the consummation of the Intermediate Merger, Merger Sub will be merged
with and into the Intermediate Company, with the Intermediate Company surviving
the Merger as a wholly-owned subsidiary of Parent (the “Merger”);

 

WHEREAS, the board of directors of the Company has, by the unanimous vote of the
board members present, (i) determined that the Merger Agreement and the
transactions contemplated thereby are advisable to and in the best interests of
the Company and the owners of Units (each such owner, a “Member” and,
collectively, the “Members”), (ii) approved the execution, delivery and
performance of the Merger Agreement by the Company and the consummation of the
Intermediate Merger, the Merger and the other transactions contemplated thereby,
(iii) directed that, following its execution, the Merger Agreement, the
Intermediate Merger and the Merger be submitted to the Members necessary to
obtain the Company Requisite Approval in accordance with the Act and the
Operating Agreement and (iv) established a record date that is fifteen (15)
calendar days after the date of the Merger Agreement for purposes of obtaining
the Company Requisite Approval;

 

WHEREAS, the Undersigned Member wishes to approve and adopt the Merger
Agreement, the Intermediate Merger and the Merger in accordance with the Act and
the Operating Agreement, and wishes for such approval to be irrevocable;

 

--------------------------------------------------------------------------------

 

WHEREAS, the Undersigned Member is the record and beneficial owner of, or is the
trustee that is the record holder of, and whose beneficiaries are the beneficial
owners of, and has good title to all of the Units set forth on Exhibit A hereto,
free and clear of all liens and encumbrances with full power and authority to
transfer good and valid title of its Units free and clear of all liens and
encumbrances;

 

WHEREAS, the Undersigned Member has the right to vote the Units set forth on
Exhibit A hereto, and none of such Units is subject to any voting trust or other
agreement, arrangement or restriction with respect to the voting of such Units;
and

 

WHEREAS, the Undersigned Member understands and acknowledges that Parent and
Merger Sub are entering into the Merger Agreement in reliance upon the
Undersigned Member’s execution and delivery of this written consent.

 

NOW, THEREFORE, BE IT:

 

1.            Approval of the Intermediate Merger and the Merger.

 

RESOLVED, that Undersigned Member hereby ratifies, approves and adopts in all
respects (a) the Merger Agreement, the schedules and exhibits annexed thereto
and the transactions contemplated thereby, and the execution, delivery and
performance thereof, and (b) the Intermediate Merger and the Merger, each upon
the terms and subject to the conditions of the Merger Agreement.

 

2.            General Authorization.

 

RESOLVED, that the officers of the Company be, and each of them hereby is,
authorized to do and perform (or cause to be done and performed), in the name
and on behalf of the Company, all acts and things and to execute, file and
deliver (or cause to be executed, filed and delivered) the Merger Agreement and
all such other agreements, documents and instruments (including, but not limited
to, any amendments thereto) as any of them shall deem necessary, appropriate or
advisable to effectuate the intent and purposes of the foregoing resolutions,
such determination to be conclusively evidenced by the performance of such acts
and things or the execution, filing and delivery of such agreements, documents
and instruments (including, but not limited to, any amendments thereto), as
applicable.

 

RESOLVED, that all actions previously taken and performed by the officers,
directors, managers, employees or agents of the Company in connection with the
actions contemplated by the forgoing resolutions be and they hereby are,
adopted, approved, authorized, ratified and confirmed in all respects as the
acts and deeds of the Company.

 

[Signature page follows]

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, this written consent has been adopted as of January     ,
2014.

 

 

 

[Name of Member]

Dated:

 

 

 

 

By:

 

 

 

 

 

[Name of Parent Representative], as Parent Representative acting on behalf of
such Member pursuant to that certain Irrevocable Proxy To Act By Written Consent
executed by such Member on December      , 2013.

 

 

 

 

Signature Page to Member Consent

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

UNITS

 

See attached.

 

 

Signature Page to Member Consent

 

--------------------------------------------------------------------------------

 

ANNEX B

 

UNITS

 

See attached.

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

Merger Agreement

 

[See attached.]

 

--------------------------------------------------------------------------------

 

EXHIBIT E

 

TRUST AGREEMENT TERMS

 

 

Ex. E

--------------------------------------------------------------------------------

 

EXHIBIT E

 

Terms for Trust Agreement

 

Overview

 

The following describes the proposed terms for a trust agreement (the “Trust
Agreement”) between Parent, the Company and the Trustee (as defined below) to
provide for the payment of merger consideration to holders of Units issued on
account of unsecured claims and to unsecured claimholders who in the future have
their claims allowed (i.e., approved by the court under the Plan of
Reorganization). Capitalized terms used but not otherwise defined have the
meaning given to them in the Agreement and Plan of Merger dated December 26,
2013 by and between Parent, the Company, Intermediate Merger Sub, and Merger
Sub.

 

 

Creation of Trust; Appointment of Trustee

 

At or prior to the Effective Time, the Company will select, with the prior
approval of Parent, a trustee to administer the trust. Parent will not be a
party to the Trust Agreement.

 

 

Deposit of Unsecured Claims Fund

 

At the Closing, Parent will deposit into a separate trust fund an amount equal
to $250,819,948, payable in respect of the Unsecured Claim Units and other
Unsecured Claims (the “Unsecured Claims Fund”).

 

 

Investment of Unsecured Claims Fund

 

The Trustee will invest the Trust Fund as directed by the Company; provided that
such investments shall be in obligations of or guaranteed by the United States
of America, with maturities not exceeding three months. Any interest and other
income resulting from such investment shall become a part of the Trust Fund and
a proportionate distribution of any such interest or income shall be paid upon
payment to any holder of an Unsecured Claim Unit or Unsecured Claim.

 

 

General Principles and Background on Unsecured Claim Units

 

Distributions from the Unsecured Claims Funds will be made to holders of
Unsecured Claim Units and holders of allowed Unsecured Claims following the
final reconciliation of unsecured claims (the “Final Unsecured Reconciliation”)
on a pro rata basis based on the total amount of unsecured claims allowed in the
Final Unsecured Reconciliation (such total amount, the “Final Aggregate
Unsecured Claims Amount”). Subject to approval by the Bankruptcy Court of a cap
on the ultimate amount of allowed unsecured claims, it may be possible to make
interim distributions from the Trust Fund to holders of allowed Unsecured Claims
prior to the Final Unsecured Claims Reconciliation.

 

Each Unsecured Claim Unit that is currently outstanding was issued in respect of
an allowed Unsecured Claim of $127.10 (i.e., one Unsecured Claim Unit is equal
to $127.10 worth of Unsecured Claims as of the date such Unsecured Claim Unit
was initially distributed) (the “Initial Unsecured Claim Unit Value”). There are
currently [16,137,619] Units outstanding which were issued on account of allowed
unsecured claims and [14,694,581] additional Units “reserved” for issuance on
account of future allowed unsecured claims, totaling 30,832,200 Units in the
aggregate for unsecured claims. This aggregate number of Units issued (and to be
issued) on account of unsecured claims is based on an assumption that the Final
Aggregate Unsecured Claims Amount would equal $3.918 billion (the “Assumed
Aggregate Unsecured Claims Amount”).

 

Pursuant to the Plan of Reorganization, in the event the Assumed Aggregate

 

 

--------------------------------------------------------------------------------

 

 

 

Unsecured Claims Amount is less than the Final Aggregate Unsecured Claims
Amount, which would result in additional value being allocated to holders of
Unsecured Claim Units, such additional value is to be allocated to the original
holder of the Unsecured Claim (the “Original Claim Holder”) (i.e., not a
transferee of the Unsecured Claim Unit (a “Transferee Holder”)).

 

 

Payments if Assumed Aggregate Unsecured Claims Amount is equal to the Final
Aggregate Unsecured Claims Amount (Basic Formula)

 

A holder of Unsecured Claim Units will be entitled to an amount equal to the
Unsecured Claims Fund multiplied by such holder’s Unit Based Pro Rata
Percentage, which is equal to (x) the number of Unsecured Claim Units held by
such Person multiplied by (y) the Initial Unsecured Claim Unit Value, divided by
(z) the Final Aggregate Unsecured Claims Amount (the quotient, expressed as a
percentage, the “Unit Based Pro Rata Percentage”). The amount paid to a holder
in the event the Assumed Aggregate Unsecured Claims Amount is equal to the Final
Aggregate Unsecured Claims Amount is referred to as the “Baseline Distribution”

 

A holder of Unsecured Claims who has its claims allowed in the Final Unsecured
Reconciliation will be entitled to an amount equal to the Unsecured Claims Fund
multiplied by such holder’s Claim Based Pro Rata Percentage, which is equal to
(x) the aggregate amount of Unsecured Claims held by such Person divided by
(z) the Final Aggregate Unsecured Claims Amount (the quotient, expressed as a
percentage, the “Claim Based Pro Rata Percentage”).

 

 

Payments if Assumed Aggregate Unsecured Claims are Greater than the Final
Aggregate Unsecured Claims Amount

 

A holder of Unsecured Claim Units will be entitled to receive an amount equal to
the Unsecured Claims Fund multiplied by such holder’s Unit Based Pro Rata
Percentage.

 

A holder of an allowed Unsecured Claim that has not received a distribution of
Unsecured Claim Units will be entitled to receive an amount equal to the
Unsecured Claims Fund multiplied by such holder’s Claim Based Pro Rata
Percentage.

 

 

Payments if Assumed Aggregate Unsecured Claims are Less than the Final Aggregate
Unsecured Claims Amount

 

An Original Claim Holder that is a holder of Unsecured Claim Units will be
entitled to receive an amount equal to the Unsecured Claims Fund multiplied by
such holder’s Unit Based Pro Rata Percentage (the “Full Shortfall Distribution”)
(i.e., an Original Claimholder that still holds a Unit is entitled to receive
the Baseline distribution and an additional allocation of merger consideration
that results from fewer unsecured claims being allowed than the Assumed
Aggregate Unsecured Claims).

 

A Transferee Holder will be entitled to receive an amount equal to the Baseline
Distribution (i.e., Transferee Holders will only be entitled to receive an
amount that they would have been entitled to receive if the Assumed Aggregate
Unsecured Claims Amount is equal to the Final Aggregate Unsecured Claims
Amount). The original holder of the allowed unsecured claim that later
transferred the Unit held by such Transferee Holder will be entitled to receive
the Full Shortfall Distribution less the Baseline Distribution.

 

 

 

2

--------------------------------------------------------------------------------