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Exhibit 10.24
AVTEAM TAX ALLOCATION AND
INDEMNIFICATION AGREEMENT
THIS AVTEAM TAX ALLOCATION AND INDEMNIFICATION AGREEMENT is entered
into as of this 5th day of December, 1996 between Xxxxx X. Xxxx
("Stockholder"), and AVTEAM, INC., a Florida corporation, formerly known as
Interstar Trading Corporation (the "Company").
W I T N E S S E T H :
WHEREAS, Stockholder owns 500,000 shares of the sole class of stock
in the Company, constituting ___ percent of the total outstanding shares of
stock in the Company;
WHEREAS, pursuant to that certain Stock Purchase Agreement by and
among the Company and the persons listed on the signature pages thereto (the
"Purchasers"), dated as of December 5, 1996, the Purchasers will purchase
shares of the newly-authorized preferred stock of the Company and, in
connection therewith, the Company's subchapter S corporation status will be
terminated;
WHEREAS, such termination, under Code Section 1362(e), will result in
the Company's 1996 calendar tax year being divided in two (2) separate tax
years, the first of which begins on January 1, 1996 and ends on the day
immediately preceding the day such termination is effective (the "1996 S Short
Year") and the second of which begins on the day such termination is effective
and ends on December 31, 1996 (the "1996 C Short Year"); and
WHEREAS, since its inception the Company has made, is making or will
make distributions payable to Stockholder in amounts intended to equal the
amount of the Company's accumulated adjustments account, as that term is
defined in Code Section 1368(e)(1), calculated taking into account all items of
income, gain, deduction, loss and credit through the last day of the Company's
1996 S Short Year; and
WHEREAS, on December 3, 1996, the Board of Directors of the Company
executed a resolution of the directors (the "Resolution"), a copy of which is
attached hereto as Exhibit A, by which certain distributions will be made to
Stockholder (collectively, the "Distributions") determined based on
Stockholder's pro rata share (based on Stockholder's share ownership reflected
in Schedule A) of both (A) $795,229, which is the amount of the Company's
undistributed U.S. federal taxable income as reported by the Company on Form
1120S for the Company's 1995 tax year and (B) $4,120,000, which is the
estimated amount of the Company's U.S. federal taxable income for its 1996 S
Short Year; and
WHEREAS, the amount of the Distributions, although intended to equal
Stockholder's pro rata share of such taxable income for the Company's 1995 tax
year and its 1996 S Short Year, may, in fact, be less or more than such
amounts; and
