ASSET PURCHASE AGREEMENT
ASSET
PURCHASE AGREEMENT
THIS
ASSET PURCHASE AGREEMENT,
dated
as of the 14th day of July, 2006 (the “Agreement”),
is
entered into by and among Tactical Air Defense Services, Inc. (“Parent”),
Genesis Aviation Acquisition Inc., Resource Financial Aviation Holdings Inc.,
and OneSource Aviation Acquisition Inc. each a Nevada corporation and wholly
owned subsidiary of Parent (each a “Subsidiary”,
the
Subsidiaries and Parent are each sometimes referred to herein as a “Purchaser”)
as
Purchasers and AeroGroup Incorporated, a Utah corporation (“AeroGroup”)
and
its wholly owned subsidiaries, Genesis Acquisition, Inc., Resource Financial
Holdings Acquisition, Inc., and OneSource Acquisition, Inc., each a Delaware
corporation, as sellers (each individually a “Seller
Subsidiary”, the
Seller Subsidiaries and AeroGroup each being sometimes referred to herein as
a
“Seller”).
RECITALS
A. The
Sellers own certain military training aircraft, flight simulators, intellectual
property and other assets intended for use in civilian training of military
pilots and providing certain kinds of military aviation support and research
(the “Business”).
B. The
Sellers desire to sell to the Purchasers, and the Purchasers desire to purchase
from the Sellers, certain assets relating to the Business, as further delineated
on the schedules hereto(the “Purchased
Assets”),
on
the terms and conditions hereinafter set forth.
C. The
Purchaser Parent has agreed to assume certain liabilities of Sellers associated
with the Business, which liabilities are specified in Section 1(d)
below;
NOW,
THEREFORE,
the
parties hereto, intending to be legally bound hereby, in consideration of the
foregoing recitals and the mutual promises, covenants and representations herein
contained, hereby agree as follows:
1. Purchase
and Sale of Assets.
(a) Purchased
Assets. Upon
the
terms and subject to the conditions set forth herein, at the Closing (as defined
below), the Sellers shall sell, assign, transfer, convey and deliver to Parent,
and Parent shall acquire from the Sellers (or cause the appropriate Subsidiary
to acquire), all right, title and interest in and to the following assets and
properties of Sellers, which assets shall be allocated among the Purchasers
as
indicated on the schedules attached hereto:
(i) Contracts.
All
rights and interests in, to and under the agreements and contracts relating
to
the Business which are enumerated and set forth in Schedule
(a)(i)
(the
“Contracts”);
provided,
however,
that
Purchasers shall not be obligated to assume or perform any obligation or
liability of Sellers pursuant to any contract or agreement except in accordance
with Section 1(d) below.
(ii) Intellectual
Property.
The
term “Intellectual
Property”
shall
mean all of Sellers’ intellectual property rights that are owned by or licensed
to Sellers throughout the world, including, without limitation, all patents
and
applications therefore, all continuations as partial/divisional continuations
thereon, know-how, unpatented inventions, plans, procedures, developments,
trade
secrets, formulas, marks, business and marketing plans, including, all copyright
registrations, all other copyrights (registered and unregistered) and copyright
applications, trademarks and trademark applications, photographs, artwork,
illustrations, diagrams, service marks and applications therefore, all other
intellectual property rights as set forth on Schedule
1(a)(ii),
all
names, trade names and applications therefore, and all names, fictitious names,
logos, and slogans used by Sellers, the name(s) and names used by Sellers,
including, without limitation, the Intellectual Property set forth on
Schedule
1(a)(ii),
hereto
and any other intellectual property owned or transferable by Seller, in each
case, wherever in the world that said rights or Intellectual Property may exist.
whether such Intellectual Property rights are registered or not, and whether
or
not such Intellectual Property rights exist in common law, contract or by
statute. Notwithstanding the forgoing, AeroGroup may continue, on a
non-exclusive basis, to use the name “AeroGroup” other then in connection with
the Business or with anything competitive with it.
(iii) Licenses,
Permits, and Approvals.
All of
Sellers’ worldwide licenses, permits, approvals, and authorizations of
whatsoever kind and type, governmental or private, rights and licenses, issued,
applied for, or pending, used in the conduct of or relating to the Business
or
in connection with any of Seller’s Intellectual Property, (the "Licenses
and Permits").
(iv) Books
and Records.
All of
Seller's books and records with respect to the Purchased Assets and Business
including, without limitation, operating handbooks, training manuals, drawings,
flowcharts, charts, research, data, illustrations, teaching aids, manuals,
and
other technical papers (provided, however, that access to such records shall
be
provided to Buyer upon written request).
(v) Confidential
Information.
All
Computer programs and software developments, improvements, processes,
techniques, methods, trade secrets and confidential information of any nature
whatsoever pertaining to the Business or to the assets or properties of Sellers
to be transferred pursuant to this Agreement, including, without limitation,
all
software and computer programs or data used in any aircraft, avionics, simulator
or simulation software for whatever purpose.
(vi) Rights.
All
rights (but not obligations) of Sellers under any agreement, purchase agreement,
xxxx of sale, appraisal, or instrument used in connection with Sellers’
acquisition, financing, leasing or use of any of the Purchased Assets and any
and all express or implied warranties from its suppliers, manufacturers, parts
suppliers (OEM or otherwise) or of any person performing maintenance,
renovations or modifications on any Purchased Asset.
(vii) Furnishings
and Equipment.
All
equipment, furniture, fixtures, spare parts, furnishings, vehicles, office
equipment, telephones, telephone numbers, and all other tangible and intangible
personal property, wherever located, owned by Seller and used or intended for
use by it in connection with the Business as set forth on Schedule
1(a)(ix).
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(viii) Aircraft.
All of
the aircraft set forth on Schedule
1(a)(x)
and all
related parts, avionics, manuals, flight logs, maintenance logs, engine logs,
avionics or other logs or records, permits, rights to import, export or operate,
airworthiness or similar certificates, registrations, radio registrations or
operator permits, operating handbooks, pilot operating handbooks or manuals
and
all rights and accessories relating to any of the foregoing, or any waivers
granted by any government agency or other person from the requirements to obtain
or maintain any of the forgoing.
(ix) Flight
Simulators.
All of
the flight training simulators and apparatus set forth on Schedule
1(a)(xi)
and all
related parts or spare parts, computers, processors, hardware, software,
warranties, outlines, controllers, teaching aids, licenses, permits and
accessories, relating thereto.
(x) Insurance
Policies.
All
insurance policies and proceeds thereof, including without limitation, those
policies insuring the Business or any of its affiliates, or any of the Purchased
Assets against loss, damage, fire, theft, or any other damages or liabilities
caused by the Sellers, their agents or affiliates, and any proceeds of such
policies whether the claims arise prior to or after the date of Closing.
(xi) Leases.
All
leases or subleases as set forth on Schedule
1(a)(xiii) (the
“Leases”).
(b) Excluded
Assets.
Sellers
shall not sell, nor shall Purchasers purchase or have any right in, any assets
other than the Purchased Assets specifically delineated in Section 1(a) above
and in the related Schedules and, other than as specifically set forth in
Section 1(d) and Section 12 below, Purchasers shall not, and shall not be
required to, assume or be obligated to pay, discharge or perform, any debts,
liabilities, adverse claims or obligations of any kind or nature whatsoever
of
the Sellers, whether in connection with the Purchased Assets or otherwise,
and
whether arising before or after the consummation of the transactions
contemplated herein, or bear any cost or charge with respect thereto, other
than
as provided in writing.
(c) Sale
Free and Clear of all Claims, Liens and Encumbrances.
The
Purchased Assets shall be sold, transferred, conveyed and assigned to the
Purchasers on the Closing Date, free and clear of all claims, liens, security
interests, and encumbrances, other than (i) with respect to certain of the
assumed liabilities set forth in Section 1(d) below, and (ii) other encumbrances
and restrictions on ownership, operation or transferability of military
apparatus as more fully set forth in Section 4(e) below.
(d) Assumed
Xxxxxxxxxxx.Xx
the
Closing, and as part of the consideration comprising the Purchase Price, the
Parent shall assume and thereafter pay and satisfy (or cause to be satisfied)
as
they become due (and relieve and discharge Sellers from any obligations to
pay
or satisfy), only those obligations and indebtedness set forth as follows (the
“Assumed
Liabilities”):
(i) Cambar
Loan.
The
purchase money loan owed to Cambar Associates, Inc. in the initial principal
amount of $2,200,000 and all unpaid interest thereon (the “Cambar
Note”),
becoming payable on December 30, 2008, which Cambar Note shall be convertible
subject to its terms at $.50 per share of the Parent’s common stock, par value
$.001 per share (the “Common
Stock”).
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(ii) Secured
Xxxxxxx Debt.
The
convertible debt in the initial principal amount of $1,200,000 (the
“Secured
Xxxxxxx Note”)
owed
to Xxxx X. Xxxxxxx (“Xxxxxxx”),
which
shall be secured by a first priority lien on the assets of the Purchasers and
becoming convertible into Common Stock at a conversion price of $.50 of
principal and interest converted for each share of Common Stock.
(iii) Investor
Debt.
The
various unsecured, convertible promissory notes issued to investors (the
“Investors”)
listed
on Schedule
1(d)(iii)
along
with all outstanding interest thereon (the “Investor
Notes”),
which
Investor Notes shall each automatically be deemed convertible loans of the
Parent in accordance with their terms and in the principal amounts as set forth
on Schedule
1(d)(iii)
which
Investor Notes shall become convertible into Common Stock of Parent at the
rates
and conversion prices set forth on Schedule
1(d)(iii).
(iv) Investor
Warrants.
The
various warrants issued to the Investors and other persons listed on
Schedule
1(d)(iv)
(the
“Investor
Warrants”),
which
Investor Warrants shall automatically be deemed warrants to purchase such number
of shares of Common Stock of the Parent, and at such exercise prices as set
forth on Schedule
1(d)(iv).
(v) Wage
Indebtedness.
The
indebtedness to former consultants, employees or independent contractors
resulting from unpaid wages and fees, owed to the persons set forth on
Schedule
1(d)(v)
(the “Employee Debt”) in
such
amounts and containing such other provisions for interest and conversion as
set
forth opposite their names on Schedule
1(d)(v).
(vi) Contracts.
The
rights, obligations and liabilities of the Sellers relating to the Contracts.
(vii) Leases.
The
obligations and liabilities of AeroGroup relating to the Leases.
2. Purchase
Price and Payment.
(a) Purchase
Price.
In
consideration for the Purchased Assets and the other covenants, warranties
and
representations made herein, the Parent shall collectively pay the following
consideration at the Closing (the "Purchase
Price"):
(i) the
Parent shall issue 14,989,800 restricted shares Common Stock to AeroGroup.
(ii) the
Parent shall assume the Assumed Liabilities.
(b) Taxes.
Following the Closing, the Purchasers will collectively prepare (and the Sellers
may review) IRS Form 8594, and any other notice or filing required pursuant
to
Section 1060 of the Internal Revenue Code of 1986, as amended. The parties
hereto agree to execute and file the IRS Form 8594 prepared by the Purchasers
(as reviewed and reasonably approved by the Sellers) and such other forms,
notices and filings as required by applicable laws. The parties have agreed
to
allocate the Purchase Price among the Purchased Assets at or before Closing
in a
fashion that causes the least tax liabilities.
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3. Closing.
The
closing of the transactions contemplated herein (the “Closing”)
shall
be held at the offices of Xxxxxxx Xxxx LLP, 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx,
Xxx
Xxxx, Xxx Xxxx 00000, at 10:00 a.m. (local time) on the earlier of the fifth
business day after the satisfaction or waiver of the conditions set forth in
Sections 7 and 8 hereof, or on such other date as may be agreed upon by the
parties (the date on which the Closing actually takes place shall be referred
to
as the “Closing
Date”);
provided, that if the Closing shall not have occurred within 75 days after
the
date that this Agreement is first entered into as indicated above (the
“Termination
Date”),
either party shall be entitled to terminate this Agreement without any liability
whatsoever to any party. However, in the event a party shall have caused a
delay
in closing the transaction contemplated hereby by its failure to perform any
covenant hereunder, such party shall not be entitled to terminate this Agreement
as provided herein until the expiration of a period following such date
corresponding to the period of the delay so caused. The Closing shall be deemed
effective as of the opening of business on the Closing Date. The Termination
Date may only be extended by consent of AeroGroup and Parent.
4. Representations
and Warranties of Sellers.
As
an
inducement to Purchasers to enter into this Agreement and to consummate the
transactions contemplated hereby, each Seller represents and warrants as of
the
date hereof and at the Closing Date as follows:
(a) Seller
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the state of Delaware. AeroGroup is a corporation
duly organized, validly existing and in good standing under the laws of the
state of Utah. Seller has the power and the authority and all licenses and
permits required by governmental authorities to own and operate its assets
and
carry on its business as now being conducted. AeroGroup does not have any
subsidiaries other then Subsidiary Sellers and Subsidiary Sellers do not own
beneficially or of record any equity interest in any corporation, company,
partnership or other business organization or entity. Sellers do not have any
indebtedness or liabilities owed to any person other then the Assumed
Liabilities.
(b) Seller
has the requisite power and authority to execute and perform this Agreement
and
all other agreements, documents and instruments to be entered into in connection
with the transactions contemplated hereby.
(c) AeroGroup
is the sole stockholders of Subsidiary Sellers. The execution, delivery and
performance of this Agreement and all other agreements to be entered into in
connection with the transactions contemplated hereby have been duly authorized
by the board of directors of Seller and by AeroGroup as the sole stockholder
of
the Subsidiary Sellers and do not violate or conflict with any provisions of
the
Certificate of Incorporation or Bylaws of any Seller or any agreement,
instrument, law, order or regulation to which any Seller is a party or by which
Seller is bound. No consent, approval or authorization of, or filing with or
notification to, any lender (other then certain creditors with respect to the
Assumed Liabilities), security holder, governmental agency or other person
or
entity is required by Seller or in connection with the execution, delivery
and
performance by the Seller of this Agreement and the consummation of the
transactions contemplated hereby.
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(d) This
Agreement, and all other instruments delivered by Seller in connection herewith
or to be delivered by Seller at Closing, have been duly executed and delivered
by the Seller and are legal, valid and binding obligations of Seller,
enforceable in accordance with their respective terms.
(e) The
Seller is the owner of and has good, valid and marketable title to the Purchased
Assets which are indicated as being owned and transferred herein by such Seller
on schedules hereto, free and clear of all liens other then liens relating
to
the Secured Xxxxxxx Note. Notwithstanding the foregoing, the parties understand
that the assumption of the contracts, and the ownership, importation,
exportation and operation of certain of the Purchased Assets requires ATF,
CCR
and ICAT permits and licenses (as well as permits from various agencies of
foreign governments) which are the responsibilities of the respective parties
herein.
(f) Seller
does not have any knowledge of any action, suit, litigation or proceeding
pending or threatened against it or otherwise or relating to the Purchased
Assets or Business, nor does Seller know of any basis for any such action,
or of
any governmental investigation relating to the Purchased Assets or the
Business.
(g) Seller
does not have knowledge of any order, writ, injunction or decree that has been
issued by, or requested of, any court or governmental agency which is against,
or binding on Seller which may affect, limit or control the Purchased Assets
or
Purchasers’ use thereof.
(h) Seller
has obtained all required approvals or authorizations of this Agreement and
any
other agreements to be entered into in connection with the transactions
contemplated hereby which are required by law or otherwise in order to make
this
Agreement or any other agreements entered into in connection with the
transactions contemplated hereby binding upon Seller (subject to the requisite
filings with the Federal Aviation Administration and similar foreign aviation
authorities which are necessary in order to effect transfer of title, which
actions and filings have been initiated at or prior to Closing).
(i) There
are
no liens for any federal, state, county or local franchise, income, excise,
property, business, sales, commercial rent, employment or other taxes upon
the
Purchased Assets. Seller has timely filed all federal, state, county and local
franchise, income, excise, property, business, sales, commercial rent and
employment and other tax returns which are required to be filed through the
Closing Date, and has paid, or will pay, all taxes which are due and payable
on
or before the Closing Date.
(j) Seller
has, in all material respects, complied and is in compliance with all laws,
orders and regulations of any governmental authority applicable to Seller,
its
Business, assets or property or its operations, including, without limitation,
laws relating to zoning, building codes, antitrust, occupational safety and
health, environmental protection and conservation, water or air pollution,
toxic
and hazardous waste and substances control, consumer product safety, product
liability, hiring, wages, hours, employee benefit plans and programs, collective
bargaining and withholding and social security taxes. Notwithstanding the
foregoing, AeroGroup has not complied with its reporting obligations under
the
Securities & Exchange Act of 1934, as amended (the “Exchange
Act”).
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(k) Seller
does not know of any facts or circumstances not disclosed to Purchasers which
indicate that the Purchased Assets may be adversely affected or which otherwise
should be disclosed to Purchaser in order to make any of the representations
or
warranties made herein on the part of the Seller not misleading. No
representation or warranty by Seller contained in this Agreement, and no
statement contained in any schedule, exhibit, certificate or other instrument
furnished to Purchasers under or in connection with this Agreement, contains
any
untrue statement of any material fact, or omits to state any material fact
necessary in order to make the statements contained herein or therein not
misleading.
(l) The
representations and warranties of Seller contained in this Agreement will be
true and correct on and as of the Closing Date with the same force and effect
as
though such representations and warranties had been made on and as of the
Closing Date.
(m) With
respect to the Common Stock being issued to AeroGroup or otherwise underlying
any of the Assumed Liabilities, said shares are being acquired for investment
purposes only and not with a view towards resale or distribution. Sellers have
had an opportunity to ask questions of Purchasers and have done so. The Common
Stock are restricted securities that have not been registered for re-sale
pursuant to the Securities Act of 1933, as amended (the “Act”).
Sellers understand that the Common Stock may not be sold, transferred, assigned
or hypothecated or otherwise distributed to its shareholders as a dividend
or
otherwise, absent the effectiveness of a registration statement covering the
sale of such Common Stock or an exemption from the registration requirements
the
Act.
5. Representations
and Warranties of Purchaser.
As
an
inducement to Sellers to enter into this Agreement and to consummate the
transactions contemplated herein, each Purchaser represents and warrants as
follows:
(a) Purchaser
is a corporation duly organized, validly existing and in good standing under
the
laws of its formation indicated above. Purchaser has the power and authority
and
all licenses and permits required by governmental authorities to own and operate
its properties and carry on its business as now being conducted.
(b) Purchaser
has the corporate power and authority to execute and perform this Agreement
and
all other agreements to be entered into in connection with the transactions
contemplated hereby.
(c) The
execution, delivery and performance of this Agreement and all other agreements
to be entered into in connection therewith, the issuance of any shares or Common
Stock or agreement to issue any shares of common stock underlying the Assumed
Liabilities have all been duly authorized by the Board of Directors of the
Purchaser and by all necessary corporate action, and do not violate or conflict
with any provisions of the certificate of incorporation or bylaws of the
Purchaser or with any agreement, instrument, law or regulation to which the
Purchaser is a party or by which Purchaser is bound.
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(d) No
approval or authorization of this Agreement or any other agreement to be entered
into in connection with the transactions contemplated by this Agreement is
required by law or otherwise in order to make this Agreement or any other
agreements entered into in connection herewith binding upon Purchaser other
than
as already obtained. Upon the execution and delivery of this Agreement and
any
other agreement in connection therewith, this Agreement, and such agreements
will constitute legal, valid and binding obligations of Purchaser, enforceable
in accordance with their respective terms.
(e) Purchaser
shall accept the Purchased Assets "as is" without warranty as to their
condition, transferability and operation.
(f) The
shares of Common Stock to be issued to AeroGroup in accordance with
Section(a)(i) above are, and will at the time of issuance be, duly authorized,
validly issued and fully paid and non-assessable in all respects, free from
any
pre-emptive or other rights, and the issuance thereof will not violate any
agreement or trigger the anti dilution, right of first refusal, co-sale or
similar provisions of any agreement to which the Purchasers are
bound.
(g) Parent
has reserved sufficient number of shares of Common Stock for issuance upon
conversion or exercise of the Assumed Liabilities enumerated in Section 1(d),
above (including the schedules thereto). Upon issuance in accordance with the
terms of the relevant Assumed Liability to which such shares of Common Stock
relate, such shares will be duly authorized, validly issued, fully paid and
non-assessable in all respects, free from any pre-emptive or other rights (other
than as entered into after the date of Closing), and the issuance thereof will
not violate any agreement or trigger the anti dilution, right of first refusal,
co-sale or similar provisions of any agreement to which the Purchasers are
bound.
(h) All
of
the reports filed by the Parent with the Securities & Exchange Commission
pursuant to the Securities & Exchange Act of 1934, as amended, and rules
thereunder, along with all financial statements comply with GAAP, and all
exhibits to such annual, quarterly and other reports as available on the SEC’s
XXXXX database website, are true, correct and complete in all material respects,
and said reports do not fail disclose or omit any material fact, agreement
or
matter relating to the Corporation.
(i) The
Parent has not entered into any other agreement with any party for the providing
of services or relating to the issuance of any shares other then as disclosed
in
the reports set forth in the preceding paragraph or
as
otherwise already disclosed to sellers.
6. Covenants
Prior to Closing.
During
the period from the date hereof through the Closing, the Sellers covenant and
agree with Purchasers that:
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(a) The
Sellers will give to Purchaser's officers, employees, representatives, agents,
counsel and accountants, full access at times mutually agreeable to all of
its
premises, properties, operations and books and records, and will cause the
Sellers’ officers, employees, representatives, agents, counsel and accountants
to furnish to Purchasers’ officers, employees, representatives, agents, counsel
and accountants such financial and operating data and other information with
respect to the business and properties of the Sellers as such officers,
employees, representatives, agents, counsel and accountants shall
request.
(b) The
Sellers will use their best efforts to preserve intact its respective business
organizations, keep available the services of Sellers’ present officers and
employees and preserve Sellers’ present relationships with persons with whom it
has significant business relations.
(c) During
the period from the date hereof through the Closing, except with the prior
written consent of Purchasers, the Sellers shall conduct their business in
the
ordinary course.
(d) During
the period from the date hereof through the Closing, the Sellers will
not:
(i) incur
any
indebtedness or issue or commit to issue any of their securities,
(ii) grant
or
commit to grant any options, or other rights to subscribe for or purchase or
otherwise acquire any shares of its membership interests or issue or commit
to
issue any securities convertible into or exchangeable for its membership
interests,
(iii) declare,
set aside or pay any dividend or distribution with respect to the Sellers’
securities,
(iv) directly
or indirectly redeem, purchase or otherwise acquire or commit to acquire any
securities of the Sellers or any option or other right to purchase or otherwise
acquire any such membership interest,
(v) directly
or indirectly agree or commit to terminate or reduce any bank line of credit
or
the availability of any funds under any other loan or financing
agreement,
(vi) effect
a
split or reclassification of any securities or effect a recapitalization of
any
kind,
(vii) amend
the
certificate of incorporation, by laws or other governing instruments of the
Seller, unless required to do so to make Seller’s representations or warranties
herein not untrue,
(viii) acquire
or agree to acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets or stock of, or in any other manner, any
business of any corporation, partnership, association or other business
organization or division thereof, or acquire or agree to acquire the beneficial
ownership of any class of the outstanding capital stock or other equity interest
of any such entity, or otherwise acquire or agree to acquire any assets which
are material to the Sellers,
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(ix) sell,
lease or otherwise dispose of, or grant any options with respect to, any of
its
assets which are material, individually or in the aggregate, to
Seller,
(x) adopt
or
enter into any collective bargaining agreement or employee benefit
plans,
(xi) pay
any
bonuses to, or incur any bonuses payable to, any of its officers or managing
members, grant to any officer or managing members any increase in salaries,
fees
or other forms of compensation or in severance or termination pay, otherwise
than as required by an agreement existing on the date hereof or enter into
or
amend any employment agreement with any officer or managing member,
(xii) take
any
action (including, without limitation, an action that might otherwise be
permitted under this paragraph 6(d)) that would or might result in any of the
representations and warranties of the Sellers in this Agreement becoming untrue
or that would have been required to be set forth in any such representation
or
warranty or in the Schedules if such action had occurred prior to the date
hereof,
(xiii) defer
the
payment of liabilities, or
(xiv) take
any
other action, or enter into any other transaction, not in the ordinary course
of
business and consistent with prior practices.
(e) The
Sellers shall use its best efforts to obtain all consents and approvals of
third
parties which may be necessary or required for the consummation of this
Agreement and the transactions contemplated hereby.
(f) The
Sellers shall promptly (and in any event prior to the Closing) advise Purchasers
orally, and in writing, of any change or event having, or which would have
(insofar as can be reasonably foreseen), a material adverse effect on the
business, properties, financial condition or results of operations of the
Sellers or would constitute, or with the passage of time would constitute,
a
breach of any representation or warranty of the Sellers contained in this
Agreement. Sellers agree that, with respect to their representations and
warranties made in this Agreement, each of them will have a continuing
obligation to supplement or amend the schedules hereto with respect to any
matter hereafter arising or discovered which, if existing or known at the date
of this Agreement, would have been required to be set forth or described in
the
schedules hereto; provided, however, that neither the supplementing or amending
of any schedules by Sellers, nor the discovery of any matters by Purchasers
in
the course of their investigations, shall be deemed to cure any breach of any
representation or warranty made in this Agreement or to have been disclosed
as
of the date of this Agreement.
(g) Pending
the Closing Date, neither the Purchasers nor the Sellers shall take any action
which is inconsistent with this Agreement. Additionally, Purchasers hereby
covenant that they will not take any of the actions described in Section 6(a)
through 6(h).
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(h) Sellers
will not, and will each cause their respective managing members, officers,
employees, agents and affiliates not to, directly or indirectly, solicit or
initiate the submission of proposals from, or solicit, encourage, entertain
or
enter into any arrangement, agreement or understanding with, or engage in any
discussions with, or furnish any information to, any person, other than
Purchasers, or a representative thereof, with respect to the acquisition of
all
or any part of the Purchased Assets or Business (whether by merger, purchase
of
membership interests or otherwise).
7. Conditions
to the Obligations of the Seller.
The
obligations of the Sellers hereunder are, at the option of the Sellers, subject
to the following conditions:
(a) The
representations and warranties of the Purchasers contained herein shall be
true
and correct on the date when made in all material respects and at and as of
the
Closing Date as if then made, and the Purchasers shall have performed and
complied with all agreements, covenants and conditions required hereunder to
be
performed or complied with by it prior to or at the Closing.
(b) There
shall not be any order, injunction or decree of any court having jurisdiction
to
restrain, enjoin, invalidate or otherwise prevent this Agreement and the
consummation of the transactions contemplated hereby, and there shall not be
any
litigation or proceeding by any commission, agency or department of the federal
or any foreign, state or local government to restrain, enjoin, invalidate or
otherwise prevent this Agreement and the consummation of the transactions
contemplated hereby.
(c) All
governmental approvals required for the consummation of this Agreement shall
have been obtained (provided that filings reflecting the change of ownership
of
the aircraft and any Intellectual Property transfer filings that are required
to
be made shall be submitted at or about the time of the Closing
Date).
(d) An
Agreement of Assumption, substantially in the form as annexed hereto as
Exhibit
7(d)
(the
“Agreement
of Assumption”)
shall
have been executed by Parent and each of the Investors, creditors and warrant
holders described in Section 1(a) and the Schedules thereto.
(e) Xxxxxxx
shall have received an executed security agreement from the Parent,
substantially in the form as annexed hereto as Exhibit
7(e)
(the
“Security
Agreement”)
and
from the Subsidiaries, substantially in the form as annexed hereto as Exhibit
7(e)-I (the “Subsidiary
Security Agreement”),
granting a senior lien to Xxxxxxx on all of the assets of Purchasers, to secure
the repayment of the Secured Xxxxxxx Note.
(f) Xxxxxxx
shall have received an executed guaranty from the Subsidiary Purchasers with
respect to the Secured Xxxxxxx Note substantially in the form as annexed hereto
as Exhibit
7(f)
(the
“Guaranty”).
(g) Parent
shall have obtained the requisite permits for ownership and operation of the
Purchased Assets as more fully described in Section 4(e). Additionally,
Xxxxxx
Xxxxxxxx, the Company’s existing sole Board member, shall, upon satisfaction of
certain disclosure requirements that are required to be made pursuant to rules
of the Exchange Act, appoint: Xxxxxxx to the Company’s Board of Directors and as
Secretary and Treasurer; Lt. General Xxxxxxx Xxxxxxx as President; and Xxxxxxx
Pear as Vice President (the “Interim
Management”).
Simultaneously, Xx. Xxxxxxxx shall resign from the Board.
-
11
-
(h) The
Consolidated financial statements of the parties hereto for the years ended
December 31 2004 and 2005, shall have been completed and the report of
independent auditors with respect to such financial statements completed and
submitted.
(i) the
deliveries of all Closing documents required to be delivered by Purchaser shall
have been made.
8. Conditions
to the Obligations of the Purchaser.
The
obligations of the Purchasers hereunder are, at the option of Purchasers,
subject to the following conditions:
(a) The
representations and warranties of the Sellers contained herein shall be true
and
correct in all material respects on the date when made and at and as of the
Closing Date as if then made and the Sellers shall have performed and complied
with all agreements, covenants and conditions required hereunder to be performed
or complied in all material respects with by them prior to or at the
Closing.
(b) Sellers
shall not have any notice of or reason to know of any order, injunction or
decree of any court having jurisdiction to restrain, enjoin, invalidate or
otherwise prevent this Agreement and the consummation of the transactions
contemplated hereby, nor of any litigation or proceeding by any commission,
agency or department of the federal or any foreign, state or local government
to
restrain, enjoin, invalidate or otherwise prevent this Agreement and the
consummation of the transactions contemplated hereby.
(c) All
governmental approvals required for the consummation of this Agreement and
the
other transactions contemplated hereby shall have been obtained and all consents
and approvals of any other persons required for the consummation of this
Agreement and the other transactions contemplated hereby, the withholding of
which would have a material adverse effect on the financial condition or
business of the Sellers, shall have been obtained, other than as set forth
herein.
(d) Sellers
shall have obtained and delivered to Purchasers copies of all consents,
approvals, authorizations, waivers, permits, grants, franchise, licenses,
exemptions or orders of any registration, certificate, qualification,
declaration or filing with, or any notice to any person or entity, including,
without limitation, any governmental authority.
(e) All
governmental approvals required for the consummation of this Agreement shall
have been obtained (provided that filings replacing change of ownership of
the
aircraft shall be submitted at or about the time of the Closing
Date).
-
12
-
(f) An
Agreement of Assumption, shall have been executed by Parent and each of the
creditors and warrant holders described in Section 1(a) and the schedules
thereto.
(g) The
Interim Management shall have been appointed, Xxxxxx Xxxxxxxx shall have
resigned from all positions with the Purchasers and Parent and Subsidiaries
shall have each obtained the requisite permits for ownership and operation
of
the Purchased Assets, as more fully set forth in Section 4(e) above.
(h) The
Consolidated financial statements of the parties hereto for the years ended
December 2004 and 2005, shall have been completed and the report of independent
auditors with respect to such financial statements completed and submitted.
(i) Sellers
shall execute and deliver any and all aircraft registration assignments or
instruments of transfers as may be necessary to transfer clean and marketable
title in the Purchased Assets to Purchasers (in the United States and elsewhere
in the world), subject only to Secured Daniel’s Note.
(j) Each
Seller shall execute and deliver a xxxx of sale with respect to the Purchased
Assets transferred by them.
(k) AeroGroup
shall execute and deliver the Patent Assignments substantially in the form
as
set forth on Exhibit
8(l).
(l) AeroGroup
shall execute and deliver the copyright or other assignments necessary to
transfer any other Intellectual Property.
(m) The
execution deliveries of all Closing documents required to be made by both the
Sellers and by the holders of Assumed Liabilities shall have been made to all
respective parties.
9. Termination
of the Agreement.
This
Agreement may be terminated at any time prior to the Closing:
(a) by
unanimous consent of the Parent and AeroGroup;
(b) by
AeroGroup if any of the conditions specified in Section 7 hereof has not been
met in all material respects or waived by AeroGroup;
(c) by
the
Parent if any of the conditions specified in Section 8 hereof has not been
met
in all material respects or waived by Parent;
(d) by
either
the Parent or AeroGroup, if the Closing shall not have occurred as of the
Termination Date.
(e) In
the
event that all of the above referenced conditions are not satisfied prior to
the
Termination Date (as may be extended by the parties), the Interim Management
shall resign from their respective positions and re-elect Xx. Xxxxxxxx as
Director, and the transactions contemplated hereby shall be terminated by the
parties without recourse.
-
13
-
10. Closing
Documents.
(a) Sellers
agree to deliver to Purchasers on the Closing Date appropriate assignments
and
bills of sale with respect to the Purchased Assets being sold hereunder,
together with the documents required to be delivered by Sellers pursuant to
Section 8 hereof.
(b) Purchasers
agree to deliver to Sellers on the Closing Date the documents required to be
delivered by Purchasers pursuant to Section 7 hereof.
(c) Each
party covenants that any conditions to Closing that are not satisfied by such
party shall be satisfied at or immediately after discovery of non-compliance
and
shall not be deemed waived by the other party hereto.
11. Costs.
Each
party covenants and agrees that it shall be responsible for and bear its
respective costs and expenses in connection with, or arising out of, the
negotiation or consummation of this Agreement and the transactions contemplated
hereby. Sellers shall be responsible for any sales, use or transfer taxes
applicable to the transactions provided for herein.
12. Indemnification.
(a) Indemnification
by Sellers.
Sellers
agree to indemnify Purchasers against and hold them harmless from, any and
all
losses (other then loss from the mere depreciation in value of the Common Stock
or other securities), liabilities, costs, damages, claims and expenses
(including, without limitation, attorneys fees and expenses incurred by a
Purchaser in any action or proceeding between Purchasers and Sellers or between
a Purchaser and any third party or otherwise) ("Damages")
which
such Purchaser may sustain at any time by reason of (i) noncompliance with
any
applicable bulk sales or transfer law, (ii) any liability or contract of, or
claim against, a Seller, whether contingent or absolute, direct or indirect,
known or unknown, matured or unmatured (including but not limited to liabilities
for taxes), (iii) any liability or claim arising in any way from any service
rendered, or action taken by, or relating to the operations of, a Seller prior
to the Closing Date, (iv) any liability or claim under any environmental laws
relating to any event, action or failure to act which occurred prior to the
Closing Date, or (v) the breach or inaccuracy of or failure to comply with,
or
the existence of any facts resulting in the inaccuracy of, any of the
warranties, representations, conditions, covenants or agreements of a Seller
contained in this Agreement or in any agreement or document delivered pursuant
hereto or in connection herewith, or arising out of the consummation of the
transactions contemplated hereby.
(b) Indemnification
by Purchaser.
Purchasers agree to indemnify and hold Sellers harmless from and against any
and
all Damages which a Seller may sustain at any time by reason of (i) any
liability or claim arising in any way from any service rendered, or action
taken
by, or relating to the operations of, a Purchaser after the Closing Date, (ii)
any liability or claim under any environmental laws relating to any event,
action or failure to act which occurs after the Closing Date, or (iii) the
breach, failure to fully repay and satisfy, default in or failure to comply
with
the terms of, the Assumed Liabilities or any breach of any warranties,
representations, conditions, covenants or agreements of a Purchaser contained
in
this Agreement, any Agreement of Assumption or in any other agreement,
certificate or document delivered pursuant to or in connection with this
Agreement or arising out of the Closing of the transactions contemplated
hereby.
-
14
-
(c) Procedures
for Indemnification.
In the
event that any claim is asserted against any party hereto, or any party hereto
is made a party defendant in any action or proceeding, and such claim, action
or
proceeding involves a matter which is the subject of this indemnification,
then
such party (an "Indemnified
Party")
shall
give written notice to the other party hereto (the "Indemnifying
Party")
of
such claim, action or proceeding, and such Indemnifying Party shall have the
right to join in the defense of said claim, action or proceeding at such
Indemnifying Party's own cost and expense and, if the Indemnifying Party agrees
in writing to be bound by and to promptly pay the full amount of any final
judgment from which no further appeal may be taken and if the Indemnified Party
is reasonably assured of the Indemnifying Party's ability to satisfy such
agreement, then at the option of the Indemnifying Party, such Indemnifying
Party
may take over the defense of such claim, action or proceeding, except that,
in
such case, the Indemnified Party shall have the right to join in the defense
of
said claim, action or proceeding at its own cost and expense; provided, however,
that no such action or proceeding shall be settled or compromised without the
prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed.
13. Miscellaneous
Provisions.
(a) Notices. All
notices, requests, demands or other communications which may be or are required
or permitted to be served or given hereunder (in this Section collectively
called “Notices”)
shall
be in writing and shall be hand delivered, sent by registered or certified
mail,
return receipt requested, postage prepaid, or by a nationally recognized
overnight delivery service, or via facsimile, to the parties hereto at the
address or facsimile number listed below (provided that, for a facsimile, a
copy
is also sent promptly by U.S. mail, certified mail or overnight delivery
service):
If
to
Purchasers, to:
1550
Xxxxxx Court
North
Vancouver, B.C.
Canada
V7E - 2P1
Attention:
Xxxxxx Xxxxxxxx
Telephone:
(000)000-0000
-
15
-
with
a
copy to:
Xxxxxxx
Xxxx LLP
00
X.
00xx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If
to
Sellers, to:
AeroGroup
Incorporated
0000
Xxxxxxx Xxxxx
Xxxxxxx,
Xxxxx 00000
c/o
Xxxx
X. Xxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
with
a
copy to:
Xxxxxxx
Xxxx LLP
00
X.
00xx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Either
party may, by Notice given as aforesaid, change its address for all subsequent
Notices. Notices shall be deemed given on the date delivered.
(b) No
Modification.
This
Agreement may not be modified, altered or rescinded, or any rights hereunder
waived, except by written agreement signed by the parties hereto, or signed
by
the party charged with the waiver in the case of a waiver.
(c) Binding
Agreement.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. There are no third party
beneficiaries to this Agreement.
(d) Assignment.
Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto without the prior written consent
of
the other parties, except that the Sellers or the Purchasers may, upon notice
to
the other party, assign its rights (but if so must also delegate its duties)
to
any of their affiliates or to any successor in interest; provided that no
assignment shall relieve the assigning party of liability for its obligations
hereunder.
-
16
-
(e) Broker
Fees; Expenses.
Each
party shall be responsible for any commissions, fees or other amounts payable
to
a broker, finder, agent or other person or entity engaged by such party which
are due and payable as a result of this Agreement and/or the transactions
contemplated hereby. Each party shall further be responsible for its own costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby.
(f) Survival.
Time is
of the essence for all provisions hereof. All representations, warranties and
covenants shall survive Closing hereunder.
(g) Further
Assurances.
At any
time and from time to time after the Closing, upon reasonable request of the
other, each party shall do, execute, acknowledge and deliver such further acts,
assignments, transfers, conveyances and assurances as may be reasonably required
for the more complete consummation of the transactions contemplated
herein.
(h) Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York, without regard to conflicts of laws principles
that would cause any other state’s laws to apply.
(i) Headings
and Captions.
The
captions set forth in this Agreement are solely for the convenience of the
parties hereto and shall not control or affect the meaning or construction
of
this Agreement.
(j) Severability.
If any
term or provision of this Agreement is found by a court of competent
jurisdiction to be unenforceable, in whole or in part, the rest and remainder
of
such provision and this Agreement shall be and remain enforceable to the fullest
extent permitted by law.
(k) Confidentiality;
Publicity.
Except
as may be required by law, rule or regulation or as otherwise permitted or
expressly contemplated herein, neither party nor its agents or representatives
shall disclose to any third party the terms of, or negotiations relating to,
this Agreement without the prior written consent of the other.
(l) Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which taken together shall constitute one and
the
same instrument. Confirmation of execution by electronic transmission of a
facsimile signature page shall be binding upon any party so
confirming.
(m) Entire
Agreement.
This
Agreement, along with the Schedules and Exhibits hereto, sets forth all of
the
terms, agreements and representations among the parties hereto with respect
to
the subject matter hereof, and supersedes all prior and contemporaneous
agreements and understandings.
REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
-
17
-
COUNTERPART
SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT, DATED AS OF JULY 14,
2006
IN
WITNESS WHEREOF,
the
parties hereto, intending to be bound hereby, have caused this Asset Purchase
Agreement to be executed the day and year first above written.
|
SELLERS:
|
|
|
AEROGROUP
INCORPORATED
|
|
|
By:
/s/ Xxxx X. Xxxxxxx
|
|
|
Name:
Xxxx X. Xxxxxxx
|
|
|
Title:
President
|
|
|
GENESIS
ACQUISITION, INC.
|
|
|
By:
/s/ Xxxx X. Xxxxxxx
|
|
|
Name:
Xxxx X. Xxxxxxx
|
|
|
Title:
President
|
|
|
RESOURCE
FINANCIAL HOLDINGS ACQUISITION, INC.
|
|
|
By:
/s/ Xxxx X. Xxxxxxx
|
|
|
Name:
Xxxx X. Xxxxxxx
|
|
|
Title:
President
|
|
|
ONESOURCE
ACQUISITION, INC.
|
|
|
By:
/s/ Xxxx X. Xxxxxxx
|
|
|
Name:
Xxxx X. Xxxxxxx
|
|
|
Title:
President
|
-
18
-
COUNTERPART SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT, DATED AS OF JULY 14, 2006.
IN
WITNESS WHEREOF,
the
parties hereto, intending to be bound hereby, have caused this Asset Purchase
Agreement to be executed the day and year first above written.
|
PURCHASERS:
|
|
|
By:
/s/ Xxxxxx Xxxxxxxx
|
|
|
Name:
Xxxxxx Xxxxxxxx
|
|
|
Title:
President
|
|
|
GENESIS
AVIATION ACQUISITION INC.
|
|
|
By:
/s/ Xxxxxx Xxxxxxxx
|
|
|
Name:
Xxxxxx Xxxxxxxx
|
|
|
Title:
President
|
|
|
RESOURCE
FINANCIAL AVIATION HOLDINGS INC.
|
|
|
By:
/s/ Xxxxxx Xxxxxxxx
|
|
|
Name:
Xxxxxx Xxxxxxxx
|
|
|
Title:
President
|
|
|
ONESOURCE
AVIATION ACQUISITION
INC.
|
|
|
By:
/s/ Xxxxxx Xxxxxxxx
|
|
|
Name:
Xxxxxx Xxxxxxxx
|
|
|
Title:
President
|
-
19
-
LIST OF SCHEDULES AND EXHIBITS
|
Schedules
|
||
|
Schedule
(a)
|
|
Purchased
Assets
|
|
Schedule
(a)(i)
|
Contracts
|
|
|
Schedule
1(a)(ii)
|
Patents
and other Intellectual Property sold to Parent
|
|
|
Schedule
1(a)(ix)
|
Furnishings,
Equipment and Other Assets
|
|
|
Schedule
1(a)(x)
|
Aircraft
Assets owned by Genesis Acquisition, Inc.
|
|
|
|
Aircraft
Assets owned by OneSource Acquisition, Inc.
|
|
|
Schedule
1(a)(xi)
|
Flight
Simulators - Assets owned by Resource Financial
Holdings
|
|
|
|
Acquisition,
Inc.
|
|
|
Schedule
1(a)(xiii)
|
Leases
|
|
|
Schedule
1(d)
|
|
Assumed
Liabilities
|
|
Schedule
1(d)(iii)
|
Investor
Notes
|
|
|
Schedule
1(d)(iv)
|
Investor
Warrants
|
|
|
Schedule
1(d)(v)
|
Employee
Debt
|
|
|
Exiibits
|
||
|
Exhibit
7(d)
|
Form
of Agreement of Assumption
|
|
|
Exhibit
7(e)
|
Form
of Security Agreement Relating to Secured Xxxxxxx Note
|
|
|
Exhibit
7(e)-I
|
Form
of Subsidiary Security Agreement Relating to Secured Xxxxxxx
Note
|
|
|
Exhibit
7(f)
|
Form
of Guaranty
|
|
|
Exhibit
8(l)
|
Form
of Patent Assignment
|
SCHEDULE
1(a)(i)
Assumed
Contracts
1. Justification
Review Document For Other Than Full and Open Competition and Justification
and
Approval for Other Than Full and Open Competition and related contract and
procurement rights, as issued in favor of AeroGroup Incorporated, dated March
7,
2006, by U.S. Army RDECOM Acquisition Center, Aberdeen Division, relating
to
providing F-16 Aircraft, Certified Pilot and Aircrew Support and other services
for Georgia Air National Guard.
2. Subcontract
Agreement, dated as of August 15, 2003, between Airborne Tactical Advantage
Company, LLC and AeroGroup Incorporated, relating to provision of aircraft,
equipment, technical assistance and maintenance services for work under Prime
Contract N00019-02-D-3158, known as “CAS-MOS” contract with the U.S. Navy, Naval
Air Systems Command.
3. Subcontract
Agreement, dated as of May 20, 2003, between Advanced Information Engineering
Services and AeroGroup Incorporated relating to Prime Contract Number
F04611-02-D-0007, dated March 1, 1999.
4. Subcontract
Agreement, dated June 21, 2004, between Lockheed Xxxxxx Aeronautics Company
-
Fort Worth (LM Aero) and AeroGroup Incorporated, relating to commercial contract
number NC-061504-JS to provide safety chase, target and photo chase support
in
support of F-16 flight training.
5. Assignment
of Aircraft Dealer License issued by the FAA-Federal Aviation Administration,
dated July 08, 2006, FAA Certificate Number D000838.
All
other
contracts, indemnities, warranties, purchase agreements, asset purchase
agreements, bills of sale or assignment forms relating to any of the Aircraft,
Flight Simulators, patents or copyrights that are part of the Purchased Assets.
SCHEDULE
1(a)(ii)
Intellectual
Property
1. Patent
Pending Application No. 60805870 relating to adaptation by civilians of F-16
aircraft for military training.
2. Patent
Pending Application No. 60805885 relating to adaptation by civilians of F-21
Kfir aircraft for military training.
3. Patent
Pending Application No. 60805877 relating to adaptation by civilians of A-4
Skyhawk aircraft for military training.
4. Patent
Pending Application No. 60805888 relating to adaptation by civilians of MiG
29
aircraft for military training.
5. Copyright
relating to Specialized F-16 Fighter Aircraft Training Course relating to
flight
control navigation panel training.
SCHEDULE
1(a)(ix)
Furnishings
and Equipment
All
furnishings, equipment, computers, reference materials of AeroGroup.
SCHEDULE
1(a)(x)
Aircraft
Assets
owned by OneSource Acquisition, Inc.
1. 1987
MiG29UB, Serial No. 50903007409.
Assets
Owned by Genesis Capital Services, LLC, being sold to
Genesis
Acquisition, Inc.
1. 1986
MiG
29UB, Serial No. 8003001048, ID No. 1048.
SCHEDULE
1(a)(xi)
Flight
Simulators
Assets
owned by Resource Financial Holdings, Inc.
| 1. | Aircraft Simulator, Singer-Link Cessna, | Serial No. 61190071. | ||
| 2. | Aircraft Simulator, Singer-Link Cessna, | Serial No. 61190072. | ||
| 3. | Aircraft Simulator, Singer-Link Cessna, | Serial No. 61190073. | ||
| 4. | Aircraft Simulator, Singer-Link Cessna, | Serial No. 61190074. |
Above
Simulators come with and include:
Singer
- Link Flight
Compartments (two).
Unit
part
no. 36378, dated August 1977. Link Part No. 98747.
Singer
- Link Cabinet Assembly
(two)
located on back of light compartments.
Unit
part
No. 36378. Link Part No. 98747 Assembly No. 7464450-10.
Singer
- Link Platforms,
(two)
consisting of 2 halves, with guard railings, steps, feet, etc.
Motion
Systems Platform, Part No. 36378, Assemly No. 2010900-02
SPCL
CHRST 6-DOF, 56” stroke.
Display
Unit Assemblies
(Four in
total, two per simulator)
XxXxxxxx
Xxxxxxx Electronics Co. , Model No. VITAL IV Part No. H06G1740-7-03.
Hydraulic
pumping units
(two),
Mfg. Xxxxxx Xxxxxxx Co. w/300 Gal. Reservoir, two electric
motors, large accumulators, filter units, electrical control panel, pressure
relief valves
and stainless piping. ID. 51040, Part No. 63870,
Asembly
No. 1002523-01, Design Act Code identifier 36378.
20
GPM
pump @1000 PSI, Motor 1=75 HP.
ockpit
-
8GPM @ 1000 PSI, Motor 2 5 HP.
Hydraulic
actuators
Mfg.
Xxxxxx Xxxxxxx Co. (24 (6 per platform))
Model
No.
C-TC-MT-2HS-2.50-C.
SCHEDULE
1(a)(xiii)
Leases
1. Lease
relating to hangers, facilities, tie-down and ramp space at Greyson County
Airport, In Xxxxxxx, Texas, which premises are currently occupied by AeroGroup
Incorporated and its subsidiaries.
SCHEDULE
1(d)(iii)
Assumed
Investor Notes
Indebtedness
To
Sprout
Investments, LLC
12%
Convertible Promissory Notes
Notes
With Principal and Interest Convertible at $.003 Per Share of AeroGroup
Incorporated and Becoming Convertible into Common Stock of Tactical Air Defense
Services, Inc. at $.15 Per Share
|
Initial
Principal Amount
|
Issuance
Date
|
|
|
$866,199.24
|
04/01/2003
|
|
|
50,000.00
|
04/01/2003
|
|
|
50,000.00
|
07/11/2003
|
|
|
55,000.00
|
12/04/2003
|
|
|
5,000.00
|
01/25/2004
|
|
|
225,000.00
|
04/12/2004
|
|
|
20,000.00
|
07/08/2004
|
|
|
4,300.00
|
08/27/2004
|
|
|
4,300.00
|
08/31/2004
|
|
|
25,000.00
|
12/08/2004
|
|
|
5,800.00
|
03/22/2005
|
|
|
50,000.00
|
06/01/2005
|
|
|
5,000.00
|
01/25/2006
|
|
|
Total
(Rounded):
|
$1,365,599.24
|
Additional
shares must be issued as damages as provided in the notes if shares are not
registered. Interest calculations omitted.
Indebtedness
To
Xxxx
Xxxxx
12%
Convertible Promissory Notes
Notes
With Principal and Interest Convertible at $.003 Per Share of AeroGroup
Incorporated, Becoming Convertible into Common Stock of Tactical Air Defense
Services, Inc. at $.15 Per Share.
|
Initial
Principal Amount
|
Issuance
Date
|
|
|
62,500.00
|
05/31/2002
|
|
|
125,000.00
|
05/31/2002
|
|
|
25,000.00
|
06/05/2002
|
|
|
32,500.00
|
06/12/2002
|
|
|
5,000.00
|
06/12/2002
|
|
|
50,000.00
|
04/05/2003
|
|
|
50,000.00
|
04/13/2004
|
|
|
25,000.00
|
10/22/2004
|
|
|
55,140.00
|
11/04/2004
|
|
|
35,000.00
|
11/16/2004
|
|
|
38,525.00
|
12/23/2004
|
|
|
25,000.00
|
01/19/2005
|
|
|
45,000.00
|
02/09/2005
|
|
|
14,668.77
|
03/01/2005
|
|
|
17,000.00
|
03/01/2005
|
|
|
40,000.00
|
03/11/2005
|
|
|
97,500.00
|
11/11/2005
|
|
|
20,000.00
|
04/29/2005
|
|
|
50,000.00
|
05/06/2005
|
|
|
110,000.00
|
05/13/2005
|
|
|
50,000.00
|
06/03/2005
|
|
|
25,000.00
|
06/09/2005
|
|
|
2,500.00
|
06/13/2005
|
|
|
32,000.00
|
08/03/2005
|
|
|
9,000.00
|
08/15/2005
|
|
|
425.00
|
08/16/2005
|
|
|
3,991.00
|
08/29/2005
|
|
|
1,815.00
|
09/09/2005
|
|
|
6,130.00
|
09/27/2005
|
|
|
5,364.85
|
10/12/2005
|
|
|
15,000.00
|
10/27/2005
|
|
|
5,000.00
|
11/15/2005
|
|
|
5,000.00
|
11/18/2005
|
|
|
4,000.00
|
11/23/2005
|
|
|
10,000.00
|
1/12/2006
|
|
|
100,000.00
|
2/08/2006
|
|
|
6,000.00
|
2/10/2006
|
|
|
5,000.00
|
2/17/2006
|
|
|
5,000.00
|
2/17/2006
|
|
|
16,000.00
|
2/21/2006
|
|
|
5,000.00
|
2/27/2006
|
|
|
20,000.00
|
3/01/2006
|
|
|
13,597.00
|
3/09/2006
|
|
|
1,463.00
|
3/09/2006
|
|
|
13,000.00
|
3/15/20/06
|
|
|
Total
(Rounded):
|
1,283,119.62
|
Additional
shares must be issued as damages as provided in the notes if shares are not
registered. Interest calculations omitted.
Other
Investors
Convertible
Notes Being Assumed
|
Name
|
Initial
Debt
|
Interest
Rate
|
Date(s)
|
Debt
Conversion Price (AeroGroup)
|
Debt
Conversion Price
(TADS)
|
|
Xxxx
X. Xxxxxxx
|
$366,602.04
|
12%
|
4/1/03
through 11/12/05
|
$.003
|
$.15
|
|
Xxxxxx
Xxxxxx
|
$160,000.00
|
12%
|
12/05
|
$.003
|
$.15
|
|
Dil
Air, Inc.
|
$25,000.00
|
12%
|
$.50
|
$.50
|
|
|
Xxxxxxxxx
Group, LLC
|
$442,780.00
|
12%
|
04/06
|
$.45
|
$.45
|
|
Total
|
994,382.04
|
Interest
calculations omitted.
SCHEDULE
1(d)(iv)
Investor
Warrants
Sprout
Investments, LLC
Warrants
Exercisable at $.003 Per Share of AeroGroup Incorporated and Being Assumed
at
50:1 Ratio (i.e. $.15 Per Share of Tactical Air Defense Services,
Inc.)
|
Issuance
Date
|
Warrant
Shares
(AeroGroup)
|
Warrant
Shares
(TADS)
|
|
|
4/01/2003
|
288,733,080
|
5,774,662
|
|
|
04/01/2003
|
16,666,666
|
333,333
|
|
|
07/11/2003
|
16,666,666
|
333,333
|
|
|
12/04/2003
|
18,333,333
|
366,667
|
|
|
01/25/2004
|
1,666,666
|
33,333
|
|
|
04/12/2004
|
75,000,000
|
1,500,000
|
|
|
07/08/2004
|
6,666,666
|
133,333
|
|
|
08/27/2004
|
1,433,333
|
28,667
|
|
|
08/31/2004
|
1,433,333
|
28,667
|
|
|
12/08/2004
|
8,333,333
|
166,667
|
|
|
03/22/2005
|
1,9333,333
|
386,667
|
|
|
06/01/2005
|
16,666,667
|
333,333
|
|
|
01/25/2006
|
1,666,666
|
33,333
|
|
|
Total
|
472,599,742
|
9,451,995
|
Additional
shares must be issued as damages if shares are not registered. Anti dilution
provisions apply.
Warrants
issued to Xxxx Xxxxx
Warrants
Exercisable at $.003 Per Share of AeroGroup Incorporated and Being Assumed
at
50:1 Ratio (i.e. $.15 Per Share of Tactical Air Defense Services,
Inc.)
|
Issuance
Date
|
Warrant
Shares
(AeroGroup)
|
Warrant
Shares
TADS
|
|
|
05/31/2002
|
20,833,333
|
416,667
|
|
|
05/31/2002
|
41,666,666
|
833,333
|
|
|
06/05/2002
|
8,333,333
|
166,667
|
|
|
06/12/2002
|
10,833,333
|
216,667
|
|
|
06/12/2002
|
1,666,666
|
33,333
|
|
|
04/05/2003
|
16,666,666
|
333,333
|
|
|
04/13/2004
|
16,666,666
|
333,333
|
|
|
10/22/2004
|
8,333,333
|
166,667
|
|
|
11/04/2004
|
18,379,999
|
367,600
|
|
|
11/16/2004
|
11,666,666
|
233,333
|
|
|
12/23/2004
|
12,841,666
|
256,833
|
|
|
01/19/2005
|
8,333,333
|
166,667
|
|
|
02/09/2005
|
14,999,999
|
300,000
|
|
|
03/01/2005
|
4,889,589
|
97,792
|
|
|
03/01/2005
|
5,666,666
|
113,333
|
|
|
03/11/2005
|
13,333,333
|
266,667
|
|
|
11/11/2005
|
32,500,000
|
650,000
|
|
|
04/29/2005
|
6,666,666
|
133,333
|
|
|
05/06/2005
|
16,666,666
|
333,333
|
|
|
05/13/2005
|
36,666,666
|
733,333
|
|
|
06/03/2005
|
16,666,666
|
333,333
|
|
|
06/09/2005
|
8,333,333
|
166,667
|
|
|
06/13/2005
|
833,333
|
16,667
|
|
|
08/03/2005
|
10,666,666
|
213,333
|
|
|
08/15/2005
|
3,000,000
|
60,000
|
|
|
08/16/2005
|
141,666
|
2,833
|
|
|
08/29/2005
|
1,330,333
|
26,607
|
|
|
09/09/2005
|
605,000
|
12,100
|
|
|
09/27/2005
|
2,043,333
|
40,867
|
|
|
10/12/2005
|
1,788,283
|
35,766
|
|
|
10/27/2005
|
5,000,000
|
100,000
|
|
|
11/15/2005
|
1,666,666
|
33,333
|
|
|
11/18/2005
|
1,666,666
|
33,333
|
|
|
11/23/2005
|
1,333,333
|
26,667
|
|
|
1/12/2006
|
3,333,333
|
66,667
|
|
|
2/08/2006
|
33,333,333
|
666,667
|
|
|
2/10/2006
|
2,000,000
|
40,000
|
|
|
2/17/2006
|
1,666,666
|
33,333
|
|
|
2/17/2006
|
1,666,666
|
33,333
|
|
|
2/21/2006
|
5,333,333
|
106,667
|
|
|
2/27/2006
|
1,666,666
|
33,333
|
|
|
3/01/2006
|
6,666,666
|
133,333
|
|
|
3/09/2006
|
4,532,333
|
90,647
|
|
|
3/09/2006
|
487,666
|
9,753
|
|
|
3/15/20/06
|
4,333,333
|
86,667
|
|
|
Total
(Rounded):
|
427,706,519
|
8,554,130
|
Additional
shares must be issued as damages if shares are not registered. Anti dilution
provisions apply.
Other
Investor Warrants Being Assumed
|
Name
|
Date(s)
|
No.
Warrants
AeroGroup/Exercise
Price*
|
No.
Warrants TADS/Exercise Price**
|
|
Xxxx
X. Xxxxxxx
|
4/1/03
through 11/12/05
|
122,200,680/
$.003
|
2,444,014/
$.15 ***
|
|
Xxxxxx
Xxxxxx
|
12/05
|
53,333,333/
$.003
|
1,066,667/
$.15
|
|
Dil
Air, Inc.
|
50,000/
$.50
|
50,000/
$.50
|
|
|
Total
|
175,584,013
|
3,560,681
|
* Indicates
number of shares of AeroGroup Common Stock for which such Warrants are
exercisable and exercise prices.
** Indicates
number of shares of Common Stock of Tactical Air Defense Services, Inc. for
which such warrants shall become exercisable and exercise prices.
*** Additional
shares must be issued as damages if shares are not registered. Anti
dilution provisions apply.
SCHEDULE
1(d)(v)
Convertible
Employee Wage Debt
1. Pursuant
to Consulting Agreement, entered into between Sprout Investments, LLC and
AeroGroup Incorporated (“AeroGroup”) in September 2003, AeroGroup was to issue a
total of $30,000,000 (10,000,000 per year) shares to Sprout for investment
consulting services. No shares have been issued pursuant to this agreement
yet.
Said obligation to issue shares will be assumed at a 50 to one ratio by the
Parent for a total of 600,000 shares of Common Stock of Tactical Air Defense
Services, Inc. (“TADS”).
2. $250,000
is owed to Xxxxx Xxxx as back pay, pursuant to a note and a settlement agreement
with AeroGroup, principal and interest on which shall become convertible
into
shares of Common Stock of TADS at a rate of $.50 per share.
EXHIBIT 7(d)
FORM
OF AGREEMENT OF ASSUMPTION
This
AGREEMENT OF ASSUMPTION is entered into as of this ___ day of August, 2006
by
and among Tactical Air Defense Services, Inc., a Nevada corporation with a
place
of business at _____________________________ (the “Borrower”)
and
the lenders or warrant holders executing below (each, a “Lender”).
RECITALS
WHEREAS,
the
Borrower has purchased substantially all of the assets of AeroGroup
Incorporated, a Utah corporation (the “Original
Borrower”)
and,
as a condition to the closing of said transaction, Borrower has agreed to assume
certain obligations of the Original Borrower;
WHEREAS,
the
Original Borrower issued to each Lender pursuant to one or more promissory
notes, loan agreements, settlement agreements, consulting agreements, warrants
to purchase common stock, of AeroGroup Incorporated (collectively, the
“Assumed
Obligations”),
which
Assumed Securities were convertible into or exercisable for, shares of the
Original Borrower;
WHEREAS,
Borrower
wishes to assume all of the indebtedness, liabilities and obligations to Lenders
under the Assumed Obligations and each Lender is willing to permit such
assumption on and subject to the terms and provisions set forth herein;
NOW,
THEREFORE,
for
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in consideration of the mutual covenants and agreements herein
set forth, the parties hereto agree as follows:
1.
Assumption
of Obligations.
(a) The
Borrower hereby assumes and agrees to be liable for and pay and perform all
of
the indebtedness, liabilities and obligations of the Original Borrower to
Lenders relating to all indebtedness, liabilities and obligations arising under
the Assumed Securities as amended hereby and each of the agreements, instruments
and documents executed pursuant thereto or in connection therewith (hereinafter
collectively referred to as the “Obligations”)
in
such amounts as set forth on Schedule
A
hereto,
and to timely and satisfactorily perform all of the covenants, conditions,
obligations, provisions and agreements of the Original Borrower contained in
the
Assumed Obligations and in all of the agreements, instruments and documents
provided for therein or executed and delivered in connection therewith. All
of
the Assumed Obligations shall, automatically and without further action on
the
part of any party, become convertible into shares of Common Stock, par value
$.001 per share of the Borrower (the “Common
Stock”),
at
the conversion rate as set forth on Schedule
A
hereto.
In addition, all of the warrants shall, automatically and without any further
action on the part of any party, become exercisable at the exercise prices
and
for such number of shares of Common Stock as set forth on Schedule
A
hereto.
The Lenders hereby forever and irrevocably consent to the assumption of
liabilities by the Borrower and to the full, absolute and irrevocable release
and discharge of Original Borrower from all obligations, liabilities, claims
or
damages under the Loan Documents.
(b) The
Borrower shall :
(i)
pay
the indebtedness evidenced by the Assumed Obligations at the times, in the
manner and in all other respects as therein provided or as it may hereafter
be
modified between the Borrower and the holder thereof,
(ii)
perform each of the covenants, conditions, provisions and agreements of the
Assumed Obligations to be performed by the Borrower thereunder, at the time,
in
the manner and in all other respects as provided for therein,
(iii)
be
bound by each and every term, covenant, condition, and provision of the Assumed
Obligations as though each such agreement, instrument and document had
originally been made, executed and delivered by the Borrower, except that the
conversion rate shall be as set forth on Schedule
A attached
hereto, and
(iv)
pay
and perform all of the Obligations in accordance with their respective
terms.
2.
Amendments.
(a)
The
notes, warrants, contracts, instruments or agreements reflecting the Assumed
Obligations are hereby amended as follows:
(i) The
name
of the maker or issuer thereon shall be changed from “AeroGroup Incorporated, a
Utah corporation” or similar terms, to “Tactical Air Defense Services, Inc., a
Nevada corporation.”
(ii) The
references to common stock in any of documents relating to the Assumed
Obligations shall henceforth refer to Common Stock of the Borrower. In
addition, references to the conversion price at which the Assumed Obligations
is
convertible and the exercise price at which the warrants are exercisable (or
the
numbers
of shares which may otherwise be issued) shall be changed
to the conversion
or exercise price set forth on Schedule
A
hereto,
and the number of shares
issuable under any agreement or warrant shall also be as set forth on
Schedule
A hereto.
(ii) The
notice provisions of all documents or instruments comprising the Assumed
Obligations are hereby amended by changing the addresses for notices
that
would otherwise be sent to AeroGroup Incorporated to be as follows:
“(a)
If
to the Corporation, to:
Tactical
Air Defense Services, Inc.
0000
Xxxxxxx Xxxxx
Xxxxxxx,
XX 00000
Attention:
Chief Executive Officer
Telephone:
000-000-0000
(b)
Except as expressly amended hereby, the instruments reflecting the Assumed
Obligations shall remain in full force and effect in accordance with their
respective terms.
[(c)
The
first sentence of Paragraph 6.1(i) relating to registration rights shall be
amended to
read
“On one occasion, for a period commencing one hundred and twenty one (121)
days
after the date of assumption of this Note by Tactical Air Defense Services,
Inc., but not
later
than two (2) years after the date hereof……..” ]
3.
Further
Assurances.
At any
time and from time to time, upon the request of the Lender, the Borrower and
the
Guarantors shall execute, deliver and acknowledge or cause to be executed,
delivered and acknowledged, such further documents and instruments and do such
other acts and things as the Lender may reasonably request in order to fully
effect the purposes of this Agreement and any other agreements, notes, warrants,
instruments and documents evidencing the Assumed Obligations or otherwise
delivered pursuant hereto or thereto.
4.
Waiver
of Default Relating to Registration Rights.
The
Lenders hereby irrevocable and forever waive and release Borrower and Original
Borrower from, any and all defaults, default remedies, damages, enforcement
costs, additional shares, funds or other remedies relating to the failure of
the
Original Borrower or Borrower to register any of the shares of common stock
issuable under the Assumed Obligations or any other securities owned by Lender,
in accordance with the Assumed Obligations existing prior to the date
hereof.
5.
Entire
Agreement.
This
instrument constitutes the entire agreement between the parties hereto relating
to the subject matter hereof and there are no agreements, undertakings,
warranties or representations between the parties except as set forth herein.
This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. This Agreement
may
not be amended or modified, in any respect, except by an instrument in writing
signed by each of the parties hereto.
6.
Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, other than its choice of law rules.
7.
Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original and all of which taken together shall be deemed to
be
one and the same instrument.
8.
Construction.
The
headings used in this Agreement are for convenience only and shall not be deemed
to constitute a part hereof.
9.
Conditions. It is a commitment to this Agreement that the closing of the
acquisition by Borrower of substantially all of assets of Original Borrower
and
its subsidiaries shall have occurred.
[balance
of this page intentionally left blank - signature page
follows]
IN
WITNESS WHEREOF, the undersigned have executed this Agreement the day and year
first above written.
| TACTICAL AIR DEFENSE SERVICES, INC. | |||
|
By:
|
|||
|
Witness |
Name: Xxxx X. Xxxxxxx |
||
| Title: President |
| [ Name of Lender ] | |||
|
Witness |
Name: |
||
| Title: |
SCHEDULE
A
EXHIBIT
7(e)
SECURITY
AGREEMENT
THIS
SECURITY AGREEMENT,
dated
as of the ____ day of July, 2006 (the “Agreement”),
is
entered into by and among Xxxx Xxxxxxx (the “Secured
Party”),
and
Tactical Air Defense Services, Inc., a Nevada corporation (the “Obligor”).
All
capitalized terms not otherwise defined herein, shall have the meanings set
forth in the Asset Purchase Agreement (as hereinafter defined).
W
I T N E
S S E T H:
WHEREAS,
concurrently herewith, the Obligor and its Subsidiaries entered into an Asset
Purchase Agreement with AeroGroup Incorporated, a Utah corporation (“Sellers”)
(the “Asset
Purchase Agreement”),
pursuant to which, the Obligor agreed to assume all of the obligations of
Sellers under the Secured Promissory Notes issued to the Secured Party, in
the
aggregate principal amount of $1,100,000 (the “Promissory
Note”);
and
WHEREAS,
in
order to induce Sellers to enter into the Asset Purchase Agreement the Obligor
and the Subsidiary Purchasers have agreed to execute and deliver to the Secured
Party this Agreement for the benefit of the Secured Party and to grant him
a
security interest in certain property of the Obligor, to secure the prompt
payment, performance and discharge in full of all of the obligations of the
Obligor under the Promissory Note.
NOW,
THEREFORE,
in
consideration of the agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the
parties hereto hereby agree as follows:
1. Certain
Definitions.
As used
in this Agreement, the following terms shall have the meanings set forth
in this
Section 1. Terms used but not otherwise defined in this Agreement that are
defined in Article 9 of the UCC (such as “general
intangibles”
and
“proceeds”)
shall
have the respective meanings given such terms in Article 9 of the UCC.
(a) “Collateral”
means
the collateral in which the Secured Party is granted a security interest
by this
Agreement and which shall include the following, whether presently owned
or
existing or hereafter acquired or coming into existence, and all additions
and
accessions thereto and all substitutions and replacements thereof, and all
proceeds, products and accounts thereof, including, without limitation, all
proceeds from the sale or transfer of the Collateral and of insurance covering
the same and of any tort claims in connection therewith:
(i) all
Goods
of the Obligor, including, without limitations, all machinery, equipment,
computers, motor vehicles, aircraft, aircraft parts, avionics, trucks, tanks,
boats, ships, appliances, furniture, special and general tools, fixtures,
test
and quality control devices and other equipment of every kind and nature
and
wherever situated, together with all documents of title and documents
representing the same, all additions and accessions thereto, replacements
therefor, all parts therefor, and all substitutes for any of the foregoing
and
all other items used and useful in connection with the Obligor’s businesses and
all improvements thereto (collectively, the “Equipment”);
and
(ii) All
Inventory of the Obligor; and
(iii) All
of
the Obligor’s contract rights and general intangibles, including, without
limitation, all partnership interests, stock or other securities, licenses,
distribution and other agreements, computer software development rights,
leases,
franchises, customer lists, quality control procedures, grants and rights,
goodwill, trademarks, service marks, trade styles, trade names, patents,
patent
applications, copyrights, deposit accounts, and income tax refunds
(collectively, the “General
Intangibles”);
and
(iv) All
Receivables of the Obligor including all insurance proceeds, and rights to
refunds or indemnification whatsoever owing, together with all instruments,
all
documents of title representing any of the foregoing, all rights in any
merchandising, goods, equipment, motor vehicles and trucks which any of the
same
may represent, and all right, title, security and guaranties with respect
to
each Receivable, including any right of stoppage in transit; and
(v) All
of
the Obligor’s documents, instruments and chattel paper, files, records, books of
account, business papers, computer programs and the products and proceeds
of all
of the foregoing Collateral set forth in clauses (i)-(iv) above.
(b) “Obligations”
means
all of the Obligor’s obligations under the Promissory Note, in each case,
whether now or hereafter existing, voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly
owed
with others, and whether or not from time to time decreased or extinguished
and
later decreased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment
is
avoided or recovered directly or indirectly from the Secured Party as a
preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time.
(c) “UCC”
means
the Uniform Commercial Code, as currently in effect in the State of New York;
provided,
however,
that in
the event, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the Secured Party’s security interest in
any Collateral is governed by the Uniform Commercial Code as in effect in
a
jurisdiction other than the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes
of
the provisions hereof relating to such attachment, perfection of priority
and
for purposes of definitions related to such provisions.
2. Grant
of Security Interest.
(a) As
an
inducement for the Secured Party to enter into the Asset Purchase Agreement
and
to cause Sellers to enter into the Asset Purchase Agreement, and to secure
the
complete and timely payment, performance and discharge in full, as the case
may
be, of all of the Obligations, except for Permitted Liens (as hereinafter
defined), the Obligor hereby, unconditionally and irrevocably, pledge, grant
and
hypothecate to the Secured Party, a continuing security interest in, a
continuing lien upon, an unqualified right to possession and disposition
of and
a right of set-off against, in each case to the fullest extent permitted
by law,
all of the Obligor’s right, title and interest of whatsoever kind and nature in
and to the Collateral (the “Security
Interest”).
2
(b) In
the
event that the Obligor materially breaches any of the terms and provisions
of
this Security Agreement, or should any Event of Default (as that term is
defined
herein) occur, the respective positions of each Secured Party with respect
to
the Collateral shall be in accordance with its respective participations
therein.
3. Representations,
Warranties, Covenants and Agreements of the Obligor.
The
Obligor represents and warrant to, and covenant and agrees with, the Secured
Party as follows:
(a) The
Obligor has the requisite corporate power and authority to enter into this
Agreement and otherwise to carry out its obligations hereunder. The execution,
delivery and performance by the Obligor of this Agreement and the filings
contemplated herein have been duly authorized by all necessary action on
the
part of the Obligor and no further action is required by the Obligor. This
Agreement constitutes a legal, valid and binding obligation of the Obligor
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws
affecting the enforcement of creditor’s rights generally.
(b) The
Obligor represents and warrants that it has no place of business or offices
where their respective books of account and records are kept (other than
temporarily at the offices of its attorneys or accountants), except as set
forth
on Schedule
A
attached
hereto;
(c) Except
as
to those liens existing as of the date hereof that were disclosed to the
Secured
Party by the Obligor and are set forth on the attached Schedule
B
(the
“Permitted
Liens”),
the
Obligor is the sole owner of the Collateral (except for non-exclusive licenses
granted by the Obligor in the ordinary course of business), free and clear
of
any liens, security interests, encumbrances, rights or claims, and are fully
authorized to grant the Security Interest in and to pledge the Collateral.
Except as to the Permitted Liens, there is not on file in any governmental
or
regulatory authority, agency or recording office an effective financing
statement, security agreement, license or transfer or any notice of any of
the
foregoing (other than those that have been filed in favor of the Secured
Party
pursuant to this Agreement) covering or affecting any of the Collateral.
Except
as to the Permitted Liens, so long as this Agreement shall be in effect,
the
Obligor shall not execute and shall not knowingly permit to be on file in
any
such office or agency any such financing statement or other document or
instrument (except to the extent filed or recorded in favor of the Secured
Party
pursuant to the terms of this Agreement).
(d) No
part
of the Collateral has been judged invalid or unenforceable. No written claim
has
been received that any Collateral or the Obligor’s use of any Collateral
violates the rights of any third party. There has been no adverse decision
to
the Obligor’s claim of ownership rights in or exclusive rights to use the
Collateral in any jurisdiction or to the Obligor’s right to keep and maintain
such Collateral in full force and effect, and there is no proceeding involving
said rights pending or, to the best knowledge of the Obligor, threatened
before
any court, judicial body, administrative or regulatory agency, arbitrator
or
other governmental authority.
3
(e) The
Obligor shall at all times maintain their books of account and records relating
to the Collateral at its principal place of business and may not relocate
such
books of account and records unless it delivers to the Secured Party at least
thirty (30) days prior to such relocation (i) written notice of such relocation
and the new location thereof (which must be within the United States) and
(ii) evidence that appropriate financing statements and other necessary
documents have been filed and recorded and other steps have been taken to
perfect the Security Interest to create in favor of the Secured Party valid,
perfected and continuing liens in the Collateral.
(f) This
Agreement creates in favor of the Secured Party a valid security interest
in the
Collateral securing the payment and performance of the Obligations and, upon
making the filings described in the immediately following sentence, a perfected
security interest in such Collateral. Except for the filing of financing
statements on Form-1 under the UCC with the jurisdictions indicated on
Schedule
C,
attached hereto, no authorization or approval of or filing with or notice
to any
governmental authority or regulatory body is required either (i) for the
grant
by the Obligor of, or the effectiveness of, the Security Interest granted
hereby
or for the execution, delivery and performance of this Agreement by the Obligor,
or (ii) for the perfection of or exercise by the Secured Party of their rights
and remedies hereunder.
(g) The
Obligor hereby irrevocably authorize the Secured Party at any time and from
time
to time to file in any Uniform Commercial Code jurisdiction any initial
financing statements and amendments thereto that (i) indicate the Collateral
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the Uniform Commercial Code of the State
of New
York as amended from time to time (“NYUCC”),
or
any other Uniform Commercial Code jurisdiction; and (ii) contain any other
information required by part 5 of Article 9 of the NYUCC for the sufficiency
or
filing office acceptance of any financing statement or amendment, including
whether the Obligor is an organization, the type of organization and any
organization identification number issued to the Obligor. The Obligor agrees
to
furnish any such information to the Secured Parties promptly upon request.
The
Obligor also ratifies its authorization for the Secured Party to have filed
in
any Uniform Commercial Code jurisdiction any like initial financing statements
or amendments thereto if filed prior to the date hereof with respect to the
Collateral.
(h) The
execution, delivery and performance of this Agreement does not conflict with
or
cause a breach or default, or an event that with or without the passage of
time
or notice, shall constitute a breach or default, under any agreement to which
Obligor is a party or by which Obligor is bound. No consent (including, without
limitation, from stockholders or creditors of the Obligor) is required for
the
Obligor to enter into and perform its obligations hereunder.
(i) The
Obligor shall at all times maintain the liens and Security Interest provided
for
hereunder as valid and perfected liens and security interests in the Collateral
in favor of the Secured Party until this Agreement and the Security Interest
hereunder shall be terminated pursuant to Section 11. The Obligor hereby
agrees
to defend the same against any and all persons. The Obligor shall safeguard
and
protect all Collateral for the account of the Secured Party. At the request
of
the Secured Party, the Obligor will pay the cost of filing one or more financing
statements pursuant to the UCC (or any other applicable statute) in form
reasonably satisfactory to the Secured Party in all public offices wherever
filing is, or is deemed by the Secured Party to be, necessary or desirable
to
effect the rights and obligations provided for herein. Without limiting the
generality of the foregoing, the Obligor shall pay all fees, taxes and other
amounts necessary to maintain the Collateral and the Security Interest
hereunder, and the Obligor shall obtain and furnish to the Secured Party
from
time to time, upon demand, such releases and/or subordinations of claims
and
liens which may be required to maintain the priority of the Security Interest
hereunder.
4
(j) So
long
as the Obligor shall have any obligations under the Promissory Note, the
Obligor
shall not, without the Secured Party’s written consent, transfer, pledge,
hypothecate, encumber, license (except for non-exclusive licenses granted
by the
Obligor in the ordinary course of business), sell (except for sales of inventory
in the ordinary course of business) or otherwise dispose of any of the
Collateral.
(k) The
Obligor shall keep and preserve their Equipment, Inventory and other tangible
Collateral in good condition, repair and order and shall not operate or locate
any such Collateral (or cause to be operated or located) in any area excluded
from insurance coverage.
(l) The
Obligor shall, within ten (10) days of obtaining knowledge thereof, advise
the
Secured Party promptly, in sufficient detail, of any substantial change in
the
Collateral, and of the occurrence of any event which would have a material
adverse effect on the value of the Collateral or on the Secured Party’s security
interest therein.
(m) The
Obligor shall promptly execute and deliver to the Secured Party such further
deeds, mortgages, assignments, security agreements, financing statements
or
other instruments, documents, certificates and assurances and take such further
action as the Secured Party may from time to time request and may in its
sole
discretion deem necessary to perfect, protect or enforce its security interest
in the Collateral.
(n) The
Obligor shall permit the Secured Party and their representatives and agents
to
inspect the Collateral at any time, and to make copies of records pertaining
to
the Collateral as may be requested by the Secured Party from time to
time.
(o) The
Obligor will take all steps reasonably necessary to diligently pursue and
seek
to preserve, enforce and collect any rights, claims, causes of action and
accounts receivable in respect of the Collateral.
(p) The
Obligor shall promptly notify the Secured Party in sufficient detail upon
becoming aware of any attachment, garnishment, execution or other legal process
levied against any Collateral and of any other information received by the
Obligor that may materially affect the value of the Collateral, the Security
Interest or the rights and remedies of the Secured Party hereunder.
(q) All
information heretofore, herein or hereafter supplied to the Secured Party
by or
on behalf of the Obligor with respect to the Collateral is accurate and complete
in all material respects as of the date furnished.
4. Defaults.
The
following events shall be “Events
of Default”:
5
(a) A
breach
by Obligor or any of the Purchasers of their material obligations under any
of
the Promissory Note, the Asset Purchase Agreement, the Guaranty and failure
to
cure such breach for ten (10) days after receipt by such Obligor of notice
of
such breach from the Secured Party;
(b) Any
representation or warranty of the Obligor or in this Agreement and/or or
any
Purchaser in (i) the Asset Purchase Agreement, or (ii) any other agreement,
guaranty or other document relating to the Asset Purchase Agreement to which
such Purchaser is a party, shall prove to have been incorrect in any material
respect when made; and
(c) The
material failure by an Obligor to observe or perform any of its material
obligations hereunder for ten (10) days after receipt by such Obligor of
notice
of such failure from the Secured Party.
5. Duty
To Hold In Trust.
Upon
the occurrence of any Event of Default and at any time thereafter, the Obligor
shall, upon receipt by it of any revenue, income or other sums subject to
the
Security Interest, whether payable pursuant to the Promissory Note, or
otherwise, or of any check, draft, debenture, trade acceptance or other
instrument evidencing an obligation to pay any such sum, hold the same in
trust
for the Secured Party and shall forthwith endorse and transfer any such sums
or
instruments, or both, to the Secured Party for application to the satisfaction
of the Obligation.
6. Rights
and Remedies Upon Default.
Upon
occurrence of any Event of Default and at any time thereafter, the Secured
Party
shall have the right to exercise all of the remedies conferred hereunder
and
under the Promissory Notes, and the Secured Party shall have all the rights
and
remedies of a secured party under the UCC and/or any other applicable law
(including the Uniform Commercial Code of any jurisdiction in which any
Collateral is then located). Without limitation, the Secured Party shall
have
the following rights and powers:
(a) The
Secured Party shall have the right to take possession of the Collateral and,
for
that purpose, enter, with the aid and assistance of any person, any premises
where the Collateral, or any part thereof, is or may be placed and remove
the
same, and the Obligor shall assemble the Collateral and make it available
to the
Secured Party at places which the Secured Party shall reasonably select,
whether
at the Obligor’s premises or elsewhere, and make available to the Secured Party,
without rent, all of the Obligor’s respective premises and facilities for the
purpose of the Secured Party taking possession of, removing or putting the
Collateral in saleable or disposable form.
(b) The
Secured Party shall have the right to operate the business of the Obligor
using
the Collateral and shall have the right to assign, sell, lease or otherwise
dispose of and deliver all or any part of the Collateral, at public or private
sale or otherwise, either with or without special conditions or stipulations,
for cash or on credit or for future delivery, in such parcel or parcels and
at
such time or times and at such place or places, and upon such terms and
conditions as the Secured Party may deem commercially reasonable, all without
(except as shall be required by applicable statute and cannot be waived)
advertisement or demand upon or notice to the Obligor or right of redemption
of
the Obligor, which are hereby expressly waived. Upon each such sale, lease,
assignment or other transfer of Collateral, the Secured Party may, unless
prohibited by applicable law which cannot be waived, purchase all or any
part of
the Collateral being sold, free from and discharged of all trusts, claims,
right
of redemption and equities of the Obligor, which are hereby waived and
released.
6
7. Applications
of Proceeds.
The
proceeds of any such sale, lease or other disposition of the Collateral
hereunder shall be applied first, to the expenses of retaking, holding, storing,
processing and preparing for sale, selling, and the like (including, without
limitation, any taxes, fees and other costs incurred in connection therewith)
of
the Collateral, to the reasonable attorneys' fees and expenses incurred by
the
Secured Party in enforcing their rights hereunder and in connection with
collecting, storing and disposing of the Collateral, and then to satisfaction
of
the Obligations, and to the payment of any other amounts required by applicable
law, after which the Secured Party shall pay to the Obligor any surplus
proceeds. If, upon the sale, license or other disposition of the Collateral,
the
proceeds thereof are insufficient to pay all amounts to which the Secured
Party
are legally entitled, the Obligor will be liable for the deficiency, together
with interest thereon, at the rate of 18% per annum (the “Default
Rate”),
and
the reasonable fees of any attorneys employed by the Secured Party to collect
such deficiency. To the extent permitted by applicable law, the Obligor waives
all claims, damages and demands against the Secured Party arising out of
the
repossession, removal, retention or sale of the Collateral, unless due to
the
gross negligence or willful misconduct of the Secured Party.
All
ordinary costs and expenses incurred by any Secured Party in collection of
the
Obligations shall be borne exclusively by the Obligor including, without
limitation, any costs, expenses, fees or disbursements incurred by outside
agencies or attorneys retained by the Secured Party to effect collections
of the
Obligations or any Collateral securing the Obligations. The provisions of
this
paragraph shall not apply to any suits, actions, proceedings or claims of
the
nature referred to herein or otherwise which are based upon or related to
the
repayment of, or the taking of security for, any loans and/or advances made
by
Secured Party to the Obligor that do not arise under the Promissory Note,
and
the party making such loans and/or advances shall be exclusively responsible
for
such suits, actions, proceedings or claims and the payment of all such expenses
in connection therewith.
8. Costs
and Expenses.
The
Obligor agrees to pay all reasonable out-of-pocket fees, costs and expenses
incurred in connection with any filing required hereunder, including without
limitation, any financing statements, continuation statements, partial releases
and/or termination statements related thereto or any expenses of any searches
reasonably required by the Secured Party. The Obligor shall also pay all
other
claims and charges which in the reasonable opinion of the Secured Party might
prejudice, imperil or otherwise affect the Collateral or the Security Interest
therein. The Obligor will also, upon demand, pay to the Secured Party the
amount
of any and all reasonable expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, which the Secured Party may
incur
in connection with (i) the enforcement of this Agreement, (ii) the custody
or
preservation of, or the sale of, collection from, or other realization upon,
any
of the Collateral, or (iii) the exercise or enforcement of any of the rights
of
the Secured Party under the Promissory Note. Until so paid, any fees payable
hereunder shall be added to the principal amount of the Promissory Note,
and
shall bear interest at the Default Rate.
9. Responsibility
for Collateral.
The
Obligor assume all liabilities and responsibility in connection with all
Collateral, and the obligations of the Obligor hereunder or under the Promissory
Note shall in no way be affected or diminished by reason of the loss,
destruction, damage or theft of any of the Collateral or its unavailability
for
any reason.
7
10. Security
Interest Absolute.
All
rights of the Secured Party and all Obligations of the Obligor hereunder,
shall
be absolute and unconditional, irrespective of: (a) any lack of validity
or
enforceability of this Agreement, the Promissory Note, or any agreement entered
into in connection with the foregoing, or any portion hereof or thereof;
(b) any
change in the time, manner or place of payment or performance of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Promissory Notes, or any other
agreement entered into in connection with the foregoing; (c) any exchange,
release or nonperfection of any of the Collateral, or any release or amendment
or waiver of or consent to departure from any other collateral for, or any
guaranty, or any other security, for all or any of the Obligations; (d) any
action by the Secured Party to obtain, adjust, settle and cancel in its sole
discretion any insurance claims or matters made or arising in connection
with
the Collateral; or (e) any other circumstance which might otherwise constitute
any legal or equitable defense available to the Obligor, or a discharge of
all
or any part of the Security Interest granted hereby. Until the Obligations
shall
have been paid and performed in full, the rights of the Secured Parties shall
continue even if the Obligations are barred for any reason, including, without
limitation, the running of the statute of limitations or bankruptcy. The
Obligor
expressly waives presentment, protest, notice of protest, demand, notice
of
nonpayment and demand for performance. In the event that at any time any
transfer of any Collateral or any payment received by the Secured Party
hereunder shall be deemed by final order of a court of competent jurisdiction
to
have been a voidable preference or fraudulent conveyance under the bankruptcy
or
insolvency laws of the United States, or shall be deemed to be otherwise
due to
any party other than the Secured Party, then, in any such event, the Obligor’s
obligations hereunder shall survive cancellation of this Agreement, and shall
not be discharged or satisfied by any prior payment thereof and/or cancellation
of this Agreement, but shall remain a valid and binding obligation enforceable
in accordance with the terms and provisions hereof. The Obligor waives all
right
to require the Secured Party to proceed against any other person or to apply
any
Collateral which the Secured Party may hold at any time, or to marshal assets,
or to pursue any other remedy. The Obligor waives any defense arising by
reason
of the application of the statute of limitations to any obligation secured
hereby.
11. Term
of Agreement.
This
Agreement and the Security Interest shall terminate on the earlier of: (i)
the
repayment of all amounts due the Secured Party under the Promissory Note.
Upon
such termination, the Secured Party, at the request and at the expense of
the
Obligor, will join in executing any termination statement with respect to
any
financing statement executed and filed pursuant to this Agreement.
12. Power
of Attorney; Further Assurances.
(a) The
Obligor authorizes the Secured Party, and does hereby make, constitute and
appoint him and his respective agents, heirs or assigns with full power of
substitution, as the Obligor’s true and lawful attorney-in-fact, with power, in
its own name or in the name of the Obligor, to, after the occurrence and
during
the continuance of an Event of Default, (i) endorse any debentures, checks,
drafts, money orders, or other instruments of payment (including payments
payable under or in respect of any policy of insurance) in respect of the
Collateral that may come into possession of the Secured Party; (ii) to sign
and
endorse any UCC financing statement or any invoice, freight or express xxxx,
xxxx of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with accounts, and other
documents relating to the Collateral; (iii) to pay or discharge taxes, liens,
security interests or other encumbrances at any time levied or placed on
or
threatened against the Collateral; (iv) to demand, collect, receipt for,
compromise, settle and xxx for monies due in respect of the Collateral; and
(v)
generally, to do, at the option of the Secured Party, and at the Obligor’s
expense, at any time, or from time to time, all acts and things which the
Secured Party deems necessary to protect, preserve and realize upon the
Collateral and the Security Interest granted therein in order to effect the
intent of this Agreement and the Promissory Note, all as fully and effectually
as the Obligor might or could do; and the Obligor hereby ratifies all that
said
attorney shall lawfully do or cause to be done by virtue hereof. This power
of
attorney is coupled with an interest and shall be irrevocable for the term
of
this Agreement and thereafter as long as any of the Obligations shall be
outstanding.
8
(b) On
a
continuing basis, the Obligor will make, execute, acknowledge, deliver, file
and
record, as the case may be, in the proper filing and recording places in
any
jurisdiction, including, without limitation, the jurisdictions indicated
on
Schedule
C,
attached hereto, and with the Federal Aviation Administration, all such
instruments, and take all such action as may reasonably be deemed necessary
or
advisable, or as reasonably requested by the Secured Party, to perfect the
Security Interest granted hereunder and otherwise to carry out the intent
and
purposes of this Agreement, or for assuring and confirming to the Secured
Party
the grant or perfection of a security interest in all the
Collateral.
(c) The
Obligor hereby irrevocably appoints the Secured Party as the Obligor’s
attorney-in-fact, with full authority in the place and stead of the Obligor
and
in the name of the Obligor, from time to time at the discretion of the Secured
Party, to take any action and to execute any instrument which the Secured
Party
may deem necessary or advisable to accomplish the purposes of this Agreement,
including the filing, in its sole discretion, of one or more financing or
continuation statements and amendments thereto, relative to any of the
Collateral without the signature of the Obligor where permitted by
law.
13. Notices.
All
notices, requests, demands and other communications hereunder shall be in
writing, with copies to all the other parties hereto, and shall be deemed
to
have been duly given when (i) if delivered by hand, upon receipt, (ii) if
sent
by facsimile, upon receipt of proof of sending thereof, (iii) if sent by
nationally recognized overnight delivery service (receipt requested), the
next
business day or (iv) if mailed by first-class registered or certified mail,
return receipt requested, postage prepaid, four days after posting in the
U.S.
mails, in each case if delivered to the following addresses:
If
to the
Obligor, to:
c/o
Tactical Air Defense Services, Inc.
0000
Xxxxxxx Xxxxx
Xxxxxxx,
Xxxxx 00000
Attention:
Xxxx X. Xxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
9
with
a
copy to:
Xxxxxxx
Xxxx LLP
00
X.
00xx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If
to
Secured Party, to:
Xxxx
X.
Xxxxxxx
0000
XXX
Xxxx.
Xxxx
Xxxxx Xxxxxxx, XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
with
a
copy to:
Xxxxxxx
Xxxx LLP
00
X.
00xx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
14. Other
Security.
To the
extent that the Obligations are now or hereafter secured by property other
than
the Collateral or by the guarantee, endorsement or property of any other
person,
firm, corporation or other entity, then the Secured Parties shall have the
right, in their sole discretion, to pursue, relinquish, subordinate, modify
or
take any other action with respect thereto, without in any way modifying
or
affecting any of the Secured Party’s rights and remedies hereunder.
15. Miscellaneous.
(a) No
course
of dealing between the Obligor and the Secured Party, nor any failure to
exercise, nor any delay in exercising, on the part of the Secured Parties,
any
right, power or privilege hereunder or under the Promissory Note shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege.
(b) All
of
the rights and remedies of the Secured Party with respect to the Collateral,
whether established hereby or by the Promissory Note, or by any other
agreements, instruments or documents or by law shall be cumulative and may
be
exercised singly or concurrently.
10
(c) This
Agreement constitutes the entire agreement of the parties with respect to
the
subject matter hereof and is intended to supersede all prior negotiations,
understandings and agreements with respect thereto. Except as specifically
set
forth in this Agreement, no provision of this Agreement may be modified or
amended except by a written agreement specifically referring to this Agreement
and signed by the parties hereto.
(d) In
the
event that any provision of this Agreement is held to be invalid, prohibited
or
unenforceable in any jurisdiction for any reason, unless such provision is
narrowed by judicial construction, this Agreement shall, as to such
jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited
or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective
to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions
of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other
jurisdiction.
(e) No
waiver
of any breach or default or any right under this Agreement shall be considered
valid unless in writing and signed by the party giving such waiver, and no
such
waiver shall be deemed a waiver of any subsequent breach or default or right,
whether of the same or similar nature or otherwise.
(f) This
Agreement shall be binding upon and inure to the benefit of each party hereto
and its successors and assigns.
(g) Each
party shall take such further action and execute and deliver such further
documents as may be necessary or appropriate in order to carry out the
provisions and purposes of this Agreement.
(h) This
Agreement shall be construed in accordance with the laws of the State of
New
York, except to the extent the validity, perfection or enforcement of a security
interest hereunder in respect of any particular Collateral which are governed
by
a jurisdiction other than the State of New York in which case such law shall
govern. Each of the parties hereto irrevocably submit to the exclusive
jurisdiction of any New York State or United States federal court sitting
in New
York county over any action or proceeding arising out of or relating to this
Agreement, and the parties hereto hereby irrevocably agree that all claims
in
respect of such action or proceeding may be heard and determined in such
New
York State or Federal court. The parties hereto agree that a final judgment
in
any such action or proceeding shall be conclusive and may be enforced in
other
jurisdictions by suit on the judgment or in any other manner provided by
law.
The parties hereto further waive any objection to venue in the State of New
York
and any objection to an action or proceeding in the State of New York on
the
basis of forum non conveniens.
11
(i) EACH
PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRAIL
OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE
SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY DISPUTES THAT MAY
BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES
THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS WAIVER
IN
ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON
THIS
WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS RIGHTS TO A JURY TRIAL
FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING THAT,
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT
OF A
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
THE
COURT.
(j) This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature
is
delivered by facsimile transmission, such signature shall create a valid
binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.
[THE
REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]
12
COUNTERPART
SIGNATURE PAGE TO SECURITY AGREEMENT, DATED AS OF JULY __,
2006.
IN
WITNESS WHEREOF,
the
parties hereto, intending to be bound hereby, have caused this Security
Agreement to be executed the day and year first above written.
| OBLIGOR: | ||
| TACTICAL AIR DEFENSE SERVICES, INC. | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
| SECURED PARTY: | ||
| |
|
|
|
Xxxx X. Xxxxxxx |
||
13
SCHEDULE
A
Principal
Offices
SCHEDULE
B
Permitted
Liens
SCHEDULE
C
Jurisdictions
Utah
Texas
Ukraine
British
Columbia
EXHIBIT 7(e)-I
FORM
OF SUBSIDIARY SECURITY AGREEMENT
THIS
SECURITY AGREEMENT,
dated
as of the ____ day of July, 2006 (the “Agreement”),
is
entered into by and among Xxxx Xxxxxxx (the “Secured
Party”),
and [
], a Nevada corporation (the “Obligor”).
All
capitalized terms not otherwise defined herein, shall have the meanings set
forth in the Asset Purchase Agreement (as hereinafter defined).
W
I T N E
S S E T H:
WHEREAS,
concurrently on the date hereof, Tactical Air Defense Services, Inc., a Nevada
corporation, (“Parent”),
its
subsidiaries (including Obligor, the “Subsidiaries”),
entered into an Asset Purchase Agreement (the “Asset
Purchase Agreement”)
with
AeroGroup Incorporated and its Subsidiaries (collectively, the “Sellers”),
pursuant to which, among other things, the Purchasers agreed to assume a
Secured
Promissory Note issued to Secured Party in the aggregate the principal amount
of
$1,100,000 (the “Promissory
Note”)
which
Promissory Note is guaranteed as to payment by Obligor; and
WHEREAS,
in
order to induce the Sellers to enter into the Asset Purchase Agreement the
Obligor and the Subsidiaries have agreed to execute and deliver to the Secured
Party this Agreement for the benefit of the Secured Party and to grant him
a
security interest in certain property of the Obligor, to secure the prompt
payment, performance and discharge in full of all of the obligations of the
Obligor under the Promissory Note.
NOW,
THEREFORE,
in
consideration of the agreements herein contained and for other good and valuable
consideration, the receipt a sufficiency of which is hereby acknowledged,
the
parties hereto hereby agree as follows:
1. Certain
Definitions.
As used
in this Agreement, the following terms shall have the meanings set forth
in this
Section 1. Terms used but not otherwise defined in this Agreement that are
defined in Article 9 of the UCC (such as “general
intangibles”
and
“proceeds”)
shall
have the respective meanings given such terms in Article 9 of the UCC.
(a) “Collateral”
means
the collateral in which the Secured Party is granted a security interest
by this
Agreement and which shall include the following, whether presently owned
or
existing or hereafter acquired or coming into existence, and all additions
and
accessions thereto and all substitutions and replacements thereof, and all
proceeds, products and accounts thereof, including, without limitation, all
proceeds from the sale or transfer of the Collateral and of insurance covering
the same and of any tort claims in connection therewith:
(i) all
Goods
of the Obligor, including, without limitations, all machinery, equipment,
computers, motor vehicles, aircraft, aircraft parts, avionics, trucks, tanks,
boats, ships, appliances, furniture, special and general tools, fixtures,
test
and quality control devices and other equipment of every kind and nature
and
wherever situated, together with all documents of title and documents
representing the same, all additions and accessions thereto, replacements
therefor, all parts therefor, and all substitutes for any of the foregoing
and
all other items used and useful in connection with the Obligor’s businesses and
all improvements thereto (collectively, the “Equipment”);
and
(ii) All
Inventory of the Obligor; and
(iii) All
of
the Obligor’s contract rights and general intangibles, including, without
limitation, all partnership interests, stock or other securities, licenses,
distribution and other agreements, computer software development rights,
leases,
franchises, customer lists, quality control procedures, grants and rights,
goodwill, trademarks, service marks, trade styles, trade names, patents,
patent
applications, copyrights, deposit accounts, and income tax refunds
(collectively, the “General
Intangibles”);
and
(iv) All
Receivables of the Obligor including all insurance proceeds, and rights to
refunds or indemnification whatsoever owing, together with all instruments,
all
documents of title representing any of the foregoing, all rights in any
merchandising, goods, equipment, motor vehicles and trucks which any of the
same
may represent, and all right, title, security and guaranties with respect
to
each Receivable, including any right of stoppage in transit; and
(v) All
of
the Obligor’s documents, instruments and chattel paper, files, records, books of
account, business papers, computer programs and the products and proceeds
of all
of the foregoing Collateral set forth in clauses (i)-(iv) above.
(b) “Obligations”
means
all of the Obligor’s obligations under the Promissory Note, in each case,
whether now or hereafter existing, voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly
owed
with others, and whether or not from time to time decreased or extinguished
and
later decreased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment
is
avoided or recovered directly or indirectly from the Secured Party as a
preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time.
(c) “UCC”
means
the Uniform Commercial Code, as currently in effect in the State of New York;
provided,
however,
that in
the event, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the Secured Party’s security interest in
any Collateral is governed by the Uniform Commercial Code as in effect in
a
jurisdiction other than the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes
of
the provisions hereof relating to such attachment, perfection of priority
and
for purposes of definitions related to such provisions.
2. Grant
of Security Interest.
(a) As
an
inducement for the Secured Party to enter into the Asset Purchase Agreement
and
to cause Sellers to enter into the Asset Purchase Agreement, and to secure
the
complete and timely payment, performance and discharge in full, as the case
may
be, of all of the Obligations, except for Permitted Liens (as hereinafter
defined), the Obligor hereby, unconditionally and irrevocably, pledge, grant
and
hypothecate to the Secured Party, a continuing security interest in, a
continuing lien upon, an unqualified right to possession and disposition
of and
a right of set-off against, in each case to the fullest extent permitted
by law,
all of the Obligor’s right, title and interest of whatsoever kind and nature in
and to the Collateral (the “Security
Interest”).
2
(b) In
the
event that the Obligor materially breaches any of the terms and provisions
of
this Security Agreement, or should any Event of Default (as that term is
defined
herein) occur, the respective positions of each Secured Party with respect
to
the Collateral shall be in accordance with its respective participations
therein.
3. Representations,
Warranties, Covenants and Agreements of the Obligor.
The
Obligor represents and warrant to, and covenant and agrees with, the Secured
Party as follows:
(a) The
Obligor has the requisite corporate power and authority to enter into this
Agreement and otherwise to carry out its obligations hereunder. The execution,
delivery and performance by the Obligor of this Agreement and the filings
contemplated herein have been duly authorized by all necessary action on
the
part of the Obligor and no further action is required by the Obligor. This
Agreement constitutes a legal, valid and binding obligation of the Obligor
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws
affecting the enforcement of creditor’s rights generally.
(b) The
Obligor represents and warrants that it has no place of business or offices
where their respective books of account and records are kept (other than
temporarily at the offices of its attorneys or accountants), except as set
forth
on Schedule
A
attached
hereto;
(c) Except
as
to those liens existing as of the date hereof that were disclosed to the
Secured
Party by the Obligor and are set forth on the attached Schedule
B
(the
“Permitted
Liens”),
the
Obligor is the sole owner of the Collateral (except for non-exclusive licenses
granted by the Obligor in the ordinary course of business), free and clear
of
any liens, security interests, encumbrances, rights or claims, and are fully
authorized to grant the Security Interest in and to pledge the Collateral.
Except as to the Permitted Liens, there is not on file in any governmental
or
regulatory authority, agency or recording office an effective financing
statement, security agreement, license or transfer or any notice of any of
the
foregoing (other than those that have been filed in favor of the Secured
Party
pursuant to this Agreement) covering or affecting any of the Collateral.
Except
as to the Permitted Liens, so long as this Agreement shall be in effect,
the
Obligor shall not execute and shall not knowingly permit to be on file in
any
such office or agency any such financing statement or other document or
instrument (except to the extent filed or recorded in favor of the Secured
Party
pursuant to the terms of this Agreement).
(d) No
part
of the Collateral has been judged invalid or unenforceable. No written claim
has
been received that any Collateral or the Obligor’s use of any Collateral
violates the rights of any third party. There has been no adverse decision
to
the Obligor’s claim of ownership rights in or exclusive rights to use the
Collateral in any jurisdiction or to the Obligor’s right to keep and maintain
such Collateral in full force and effect, and there is no proceeding involving
said rights pending or, to the best knowledge of the Obligor, threatened
before
any court, judicial body, administrative or regulatory agency, arbitrator
or
other governmental authority.
3
(e) The
Obligor shall at all times maintain their books of account and records relating
to the Collateral at its principal place of business and may not relocate
such
books of account and records unless it delivers to the Secured Party at least
thirty (30) days prior to such relocation (i) written notice of such relocation
and the new location thereof (which must be within the United States) and
(ii) evidence that appropriate financing statements and other necessary
documents have been filed and recorded and other steps have been taken to
perfect the Security Interest to create in favor of the Secured Party valid,
perfected and continuing liens in the Collateral.
(f) This
Agreement creates in favor of the Secured Party a valid security interest
in the
Collateral securing the payment and performance of the Obligations and, upon
making the filings described in the immediately following sentence, a perfected
security interest in such Collateral. Except for the filing of financing
statements on Form-1 under the UCC with the jurisdictions indicated on
Schedule
C,
attached hereto, no authorization or approval of or filing with or notice
to any
governmental authority or regulatory body is required either (i) for the
grant
by the Obligor of, or the effectiveness of, the Security Interest granted
hereby
or for the execution, delivery and performance of this Agreement by the Obligor,
or (ii) for the perfection of or exercise by the Secured Party of their rights
and remedies hereunder.
(g) The
Obligor hereby irrevocably authorize the Secured Party at any time and from
time
to time to file in any Uniform Commercial Code jurisdiction any initial
financing statements and amendments thereto that (i) indicate the Collateral
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the Uniform Commercial Code of the State
of New
York as amended from time to time (“NYUCC”),
or
any other Uniform Commercial Code jurisdiction; and (ii) contain any other
information required by part 5 of Article 9 of the NYUCC for the sufficiency
or
filing office acceptance of any financing statement or amendment, including
whether the Obligor is an organization, the type of organization and any
organization identification number issued to the Obligor. The Obligor agrees
to
furnish any such information to the Secured Parties promptly upon request.
The
Obligor also ratifies its authorization for the Secured Party to have filed
in
any Uniform Commercial Code jurisdiction any like initial financing statements
or amendments thereto if filed prior to the date hereof with respect to the
Collateral.
(h) The
execution, delivery and performance of this Agreement does not conflict with
or
cause a breach or default, or an event that with or without the passage of
time
or notice, shall constitute a breach or default, under any agreement to which
Obligor is a party or by which Obligor is bound. No consent (including, without
limitation, from stockholders or creditors of the Obligor) is required for
the
Obligor to enter into and perform its obligations hereunder.
(i) The
Obligor shall at all times maintain the liens and Security Interest provided
for
hereunder as valid and perfected liens and security interests in the Collateral
in favor of the Secured Party until this Agreement and the Security Interest
hereunder shall be terminated pursuant to Section 11. The Obligor hereby
agrees
to defend the same against any and all persons. The Obligor shall safeguard
and
protect all Collateral for the account of the Secured Party. At the request
of
the Secured Party, the Obligor will pay the cost of filing one or more financing
statements pursuant to the UCC (or any other applicable statute) in form
reasonably satisfactory to the Secured Party in all public offices wherever
filing is, or is deemed by the Secured Party to be, necessary or desirable
to
effect the rights and obligations provided for herein. Without limiting the
generality of the foregoing, the Obligor shall pay all fees, taxes and other
amounts necessary to maintain the Collateral and the Security Interest
hereunder, and the Obligor shall obtain and furnish to the Secured Party
from
time to time, upon demand, such releases and/or subordinations of claims
and
liens which may be required to maintain the priority of the Security Interest
hereunder.
4
(j) So
long
as the Obligor shall have any obligations under the Promissory Note, the
Obligor
shall not, without the Secured Party’s written consent, transfer, pledge,
hypothecate, encumber, license (except for non-exclusive licenses granted
by the
Obligor in the ordinary course of business), sell (except for sales of inventory
in the ordinary course of business) or otherwise dispose of any of the
Collateral.
(k) The
Obligor shall keep and preserve their Equipment, Inventory and other tangible
Collateral in good condition, repair and order and shall not operate or locate
any such Collateral (or cause to be operated or located) in any area excluded
from insurance coverage.
(l) The
Obligor shall, within ten (10) days of obtaining knowledge thereof, advise
the
Secured Party promptly, in sufficient detail, of any substantial change in
the
Collateral, and of the occurrence of any event which would have a material
adverse effect on the value of the Collateral or on the Secured Party’s security
interest therein.
(m) The
Obligor shall promptly execute and deliver to the Secured Party such further
deeds, mortgages, assignments, security agreements, financing statements
or
other instruments, documents, certificates and assurances and take such further
action as the Secured Party may from time to time request and may in its
sole
discretion deem necessary to perfect, protect or enforce its security interest
in the Collateral.
(n) The
Obligor shall permit the Secured Party and their representatives and agents
to
inspect the Collateral at any time, and to make copies of records pertaining
to
the Collateral as may be requested by the Secured Party from time to
time.
(o) The
Obligor will take all steps reasonably necessary to diligently pursue and
seek
to preserve, enforce and collect any rights, claims, causes of action and
accounts receivable in respect of the Collateral.
(p) The
Obligor shall promptly notify the Secured Party in sufficient detail upon
becoming aware of any attachment, garnishment, execution or other legal process
levied against any Collateral and of any other information received by the
Obligor that may materially affect the value of the Collateral, the Security
Interest or the rights and remedies of the Secured Party hereunder.
(q) All
information heretofore, herein or hereafter supplied to the Secured Party
by or
on behalf of the Obligor with respect to the Collateral is accurate and complete
in all material respects as of the date furnished.
4. Defaults.
The
following events shall be “Events
of Default”:
5
(a) A
breach
by Obligor or any of the Purchasers of their material obligations under any
of
the Promissory Note, the Asset Purchase Agreement, the Guaranty and failure
to
cure such breach for ten (10) days after receipt by such Obligor of notice
of
such breach from the Secured Party;
(b) Any
representation or warranty of the Obligor or in this Agreement and/or or
any
Purchaser in (i) the Asset Purchase Agreement, or (ii) any other agreement,
guaranty or other document relating to the Asset Purchase Agreement to which
such Purchaser is a party, shall prove to have been incorrect in any material
respect when made; and
(c) The
material failure by an Obligor to observe or perform any of its material
obligations hereunder for ten (10) days after receipt by such Obligor of
notice
of such failure from the Secured Party.
5. Duty
To Hold In Trust.
Upon
the occurrence of any Event of Default and at any time thereafter, the Obligor
shall, upon receipt by it of any revenue, income or other sums subject to
the
Security Interest, whether payable pursuant to the Promissory Note, or
otherwise, or of any check, draft, debenture, trade acceptance or other
instrument evidencing an obligation to pay any such sum, hold the same in
trust
for the Secured Party and shall forthwith endorse and transfer any such sums
or
instruments, or both, to the Secured Party for application to the satisfaction
of the Obligation.
6. Rights
and Remedies Upon Default.
Upon
occurrence of any Event of Default and at any time thereafter, the Secured
Party
shall have the right to exercise all of the remedies conferred hereunder
and
under the Promissory Notes, and the Secured Party shall have all the rights
and
remedies of a secured party under the UCC and/or any other applicable law
(including the Uniform Commercial Code of any jurisdiction in which any
Collateral is then located). Without limitation, the Secured Party shall
have
the following rights and powers:
(a) The
Secured Party shall have the right to take possession of the Collateral and,
for
that purpose, enter, with the aid and assistance of any person, any premises
where the Collateral, or any part thereof, is or may be placed and remove
the
same, and the Obligor shall assemble the Collateral and make it available
to the
Secured Party at places which the Secured Party shall reasonably select,
whether
at the Obligor’s premises or elsewhere, and make available to the Secured Party,
without rent, all of the Obligor’s respective premises and facilities for the
purpose of the Secured Party taking possession of, removing or putting the
Collateral in saleable or disposable form.
(b) The
Secured Party shall have the right to operate the business of the Obligor
using
the Collateral and shall have the right to assign, sell, lease or otherwise
dispose of and deliver all or any part of the Collateral, at public or private
sale or otherwise, either with or without special conditions or stipulations,
for cash or on credit or for future delivery, in such parcel or parcels and
at
such time or times and at such place or places, and upon such terms and
conditions as the Secured Party may deem commercially reasonable, all without
(except as shall be required by applicable statute and cannot be waived)
advertisement or demand upon or notice to the Obligor or right of redemption
of
the Obligor, which are hereby expressly waived. Upon each such sale, lease,
assignment or other transfer of Collateral, the Secured Party may, unless
prohibited by applicable law which cannot be waived, purchase all or any
part of
the Collateral being sold, free from and discharged of all trusts, claims,
right
of redemption and equities of the Obligor, which are hereby waived and
released.
6
7. Applications
of Proceeds.
The
proceeds of any such sale, lease or other disposition of the Collateral
hereunder shall be applied first, to the expenses of retaking, holding, storing,
processing and preparing for sale, selling, and the like (including, without
limitation, any taxes, fees and other costs incurred in connection therewith)
of
the Collateral, to the reasonable attorneys' fees and expenses incurred by
the
Secured Party in enforcing their rights hereunder and in connection with
collecting, storing and disposing of the Collateral, and then to satisfaction
of
the Obligations, and to the payment of any other amounts required by applicable
law, after which the Secured Party shall pay to the Obligor any surplus
proceeds. If, upon the sale, license or other disposition of the Collateral,
the
proceeds thereof are insufficient to pay all amounts to which the Secured
Party
are legally entitled, the Obligor will be liable for the deficiency, together
with interest thereon, at the rate of 18% per annum (the “Default
Rate”),
and
the reasonable fees of any attorneys employed by the Secured Party to collect
such deficiency. To the extent permitted by applicable law, the Obligor waives
all claims, damages and demands against the Secured Party arising out of
the
repossession, removal, retention or sale of the Collateral, unless due to
the
gross negligence or willful misconduct of the Secured Party.
All
ordinary costs and expenses incurred by any Secured Party in collection of
the
Obligations shall be borne exclusively by the Obligor including, without
limitation, any costs, expenses, fees or disbursements incurred by outside
agencies or attorneys retained by the Secured Party to effect collections
of the
Obligations or any Collateral securing the Obligations. The provisions of
this
paragraph shall not apply to any suits, actions, proceedings or claims of
the
nature referred to herein or otherwise which are based upon or related to
the
repayment of, or the taking of security for, any loans and/or advances made
by
Secured Party to the Obligor that do not arise under the Promissory Note,
and
the party making such loans and/or advances shall be exclusively responsible
for
such suits, actions, proceedings or claims and the payment of all such expenses
in connection therewith.
8. Costs
and Expenses.
The
Obligor agrees to pay all reasonable out-of-pocket fees, costs and expenses
incurred in connection with any filing required hereunder, including without
limitation, any financing statements, continuation statements, partial releases
and/or termination statements related thereto or any expenses of any searches
reasonably required by the Secured Party. The Obligor shall also pay all
other
claims and charges which in the reasonable opinion of the Secured Party might
prejudice, imperil or otherwise affect the Collateral or the Security Interest
therein. The Obligor will also, upon demand, pay to the Secured Party the
amount
of any and all reasonable expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, which the Secured Party may
incur
in connection with (i) the enforcement of this Agreement, (ii) the custody
or
preservation of, or the sale of, collection from, or other realization upon,
any
of the Collateral, or (iii) the exercise or enforcement of any of the rights
of
the Secured Party under the Promissory Note. Until so paid, any fees payable
hereunder shall be added to the principal amount of the Promissory Note,
and
shall bear interest at the Default Rate.
9. Responsibility
for Collateral.
The
Obligor assume all liabilities and responsibility in connection with all
Collateral, and the obligations of the Obligor hereunder or under the Promissory
Note shall in no way be affected or diminished by reason of the loss,
destruction, damage or theft of any of the Collateral or its unavailability
for
any reason.
7
10. Security
Interest Absolute.
All
rights of the Secured Party and all Obligations of the Obligor hereunder,
shall
be absolute and unconditional, irrespective of: (a) any lack of validity
or
enforceability of this Agreement, the Promissory Note, or any agreement entered
into in connection with the foregoing, or any portion hereof or thereof;
(b) any
change in the time, manner or place of payment or performance of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Promissory Notes, or any other
agreement entered into in connection with the foregoing; (c) any exchange,
release or nonperfection of any of the Collateral, or any release or amendment
or waiver of or consent to departure from any other collateral for, or any
guaranty, or any other security, for all or any of the Obligations; (d) any
action by the Secured Party to obtain, adjust, settle and cancel in its sole
discretion any insurance claims or matters made or arising in connection
with
the Collateral; or (e) any other circumstance which might otherwise constitute
any legal or equitable defense available to the Obligor, or a discharge of
all
or any part of the Security Interest granted hereby. Until the Obligations
shall
have been paid and performed in full, the rights of the Secured Parties shall
continue even if the Obligations are barred for any reason, including, without
limitation, the running of the statute of limitations or bankruptcy. The
Obligor
expressly waives presentment, protest, notice of protest, demand, notice
of
nonpayment and demand for performance. In the event that at any time any
transfer of any Collateral or any payment received by the Secured Party
hereunder shall be deemed by final order of a court of competent jurisdiction
to
have been a voidable preference or fraudulent conveyance under the bankruptcy
or
insolvency laws of the United States, or shall be deemed to be otherwise
due to
any party other than the Secured Party, then, in any such event, the Obligor’s
obligations hereunder shall survive cancellation of this Agreement, and shall
not be discharged or satisfied by any prior payment thereof and/or cancellation
of this Agreement, but shall remain a valid and binding obligation enforceable
in accordance with the terms and provisions hereof. The Obligor waives all
right
to require the Secured Party to proceed against any other person or to apply
any
Collateral which the Secured Party may hold at any time, or to marshal assets,
or to pursue any other remedy. The Obligor waives any defense arising by
reason
of the application of the statute of limitations to any obligation secured
hereby.
11. Term
of Agreement.
This
Agreement and the Security Interest shall terminate on the earlier of: (i)
the
repayment of all amounts due the Secured Party under the Promissory Note.
Upon
such termination, the Secured Party, at the request and at the expense of
the
Obligor, will join in executing any termination statement with respect to
any
financing statement executed and filed pursuant to this Agreement.
12. Power
of Attorney; Further Assurances.
(a) The
Obligor authorizes the Secured Party, and does hereby make, constitute and
appoint him and his respective agents, heirs or assigns with full power of
substitution, as the Obligor’s true and lawful attorney-in-fact, with power, in
its own name or in the name of the Obligor, to, after the occurrence and
during
the continuance of an Event of Default, (i) endorse any debentures, checks,
drafts, money orders, or other instruments of payment (including payments
payable under or in respect of any policy of insurance) in respect of the
Collateral that may come into possession of the Secured Party; (ii) to sign
and
endorse any UCC financing statement or any invoice, freight or express xxxx,
xxxx of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with accounts, and other
documents relating to the Collateral; (iii) to pay or discharge taxes, liens,
security interests or other encumbrances at any time levied or placed on
or
threatened against the Collateral; (iv) to demand, collect, receipt for,
compromise, settle and xxx for monies due in respect of the Collateral; and
(v)
generally, to do, at the option of the Secured Party, and at the Obligor’s
expense, at any time, or from time to time, all acts and things which the
Secured Party deems necessary to protect, preserve and realize upon the
Collateral and the Security Interest granted therein in order to effect the
intent of this Agreement and the Promissory Note, all as fully and effectually
as the Obligor might or could do; and the Obligor hereby ratifies all that
said
attorney shall lawfully do or cause to be done by virtue hereof. This power
of
attorney is coupled with an interest and shall be irrevocable for the term
of
this Agreement and thereafter as long as any of the Obligations shall be
outstanding.
8
(b) On
a
continuing basis, the Obligor will make, execute, acknowledge, deliver, file
and
record, as the case may be, in the proper filing and recording places in
any
jurisdiction, including, without limitation, the jurisdictions indicated
on
Schedule
C,
attached hereto, and with the Federal Aviation Administration, all such
instruments, and take all such action as may reasonably be deemed necessary
or
advisable, or as reasonably requested by the Secured Party, to perfect the
Security Interest granted hereunder and otherwise to carry out the intent
and
purposes of this Agreement, or for assuring and confirming to the Secured
Party
the grant or perfection of a security interest in all the
Collateral.
(c) The
Obligor hereby irrevocably appoints the Secured Party as the Obligor’s
attorney-in-fact, with full authority in the place and stead of the Obligor
and
in the name of the Obligor, from time to time at the discretion of the Secured
Party, to take any action and to execute any instrument which the Secured
Party
may deem necessary or advisable to accomplish the purposes of this Agreement,
including the filing, in its sole discretion, of one or more financing or
continuation statements and amendments thereto, relative to any of the
Collateral without the signature of the Obligor where permitted by
law.
13. Notices.
All
notices, requests, demands and other communications hereunder shall be in
writing, with copies to all the other parties hereto, and shall be deemed
to
have been duly given when (i) if delivered by hand, upon receipt, (ii) if
sent
by facsimile, upon receipt of proof of sending thereof, (iii) if sent by
nationally recognized overnight delivery service (receipt requested), the
next
business day or (iv) if mailed by first-class registered or certified mail,
return receipt requested, postage prepaid, four days after posting in the
U.S.
mails, in each case if delivered to the following addresses:
If
to the
Obligor, to:
c/o
Tactical Air Defense Services, Inc.
0000
Xxxxxxx Xxxxx
Xxxxxxx,
Xxxxx 00000
Attention:
Xxxx X. Xxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
9
with
a
copy to:
Xxxxxxx
Xxxx LLP
00
X.
00xx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If
to
Secured Party, to:
Xxxx
X.
Xxxxxxx
0000
XXX
Xxxx.
Xxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Tel:
(000) 000-0000
Facsimile:
(000) 000-0000
with
a
copy to:
Xxxxxxx
Xxxx LLP
00
X.
00xx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
14. Other
Security.
To the
extent that the Obligations are now or hereafter secured by property other
than
the Collateral or by the guarantee, endorsement or property of any other
person,
firm, corporation or other entity, then the Secured Parties shall have the
right, in their sole discretion, to pursue, relinquish, subordinate, modify
or
take any other action with respect thereto, without in any way modifying
or
affecting any of the Secured Party’s rights and remedies hereunder.
15. Miscellaneous.
(a) No
course
of dealing between the Obligor and the Secured Party, nor any failure to
exercise, nor any delay in exercising, on the part of the Secured Parties,
any
right, power or privilege hereunder or under the Promissory Note shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege.
(b) All
of
the rights and remedies of the Secured Party with respect to the Collateral,
whether established hereby or by the Promissory Note, or by any other
agreements, instruments or documents or by law shall be cumulative and may
be
exercised singly or concurrently.
(c) This
Agreement constitutes the entire agreement of the parties with respect to
the
subject matter hereof and is intended to supersede all prior negotiations,
understandings and agreements with respect thereto. Except as specifically
set
forth in this Agreement, no provision of this Agreement may be modified or
amended except by a written agreement specifically referring to this Agreement
and signed by the parties hereto.
10
(d) In
the
event that any provision of this Agreement is held to be invalid, prohibited
or
unenforceable in any jurisdiction for any reason, unless such provision is
narrowed by judicial construction, this Agreement shall, as to such
jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited
or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective
to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions
of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other
jurisdiction.
(e) No
waiver
of any breach or default or any right under this Agreement shall be considered
valid unless in writing and signed by the party giving such waiver, and no
such
waiver shall be deemed a waiver of any subsequent breach or default or right,
whether of the same or similar nature or otherwise.
(f) This
Agreement shall be binding upon and inure to the benefit of each party hereto
and its successors and assigns.
(g) Each
party shall take such further action and execute and deliver such further
documents as may be necessary or appropriate in order to carry out the
provisions and purposes of this Agreement.
(h) This
Agreement shall be construed in accordance with the laws of the State of
New
York, except to the extent the validity, perfection or enforcement of a security
interest hereunder in respect of any particular Collateral which are governed
by
a jurisdiction other than the State of New York in which case such law shall
govern. Each of the parties hereto irrevocably submit to the exclusive
jurisdiction of any New York State or United States federal court sitting
in New
York county over any action or proceeding arising out of or relating to this
Agreement, and the parties hereto hereby irrevocably agree that all claims
in
respect of such action or proceeding may be heard and determined in such
New
York State or Federal court. The parties hereto agree that a final judgment
in
any such action or proceeding shall be conclusive and may be enforced in
other
jurisdictions by suit on the judgment or in any other manner provided by
law.
The parties hereto further waive any objection to venue in the State of New
York
and any objection to an action or proceeding in the State of New York on
the
basis of forum non conveniens.
11
(i) EACH
PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRAIL
OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE
SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY DISPUTES THAT MAY
BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES
THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS WAIVER
IN
ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON
THIS
WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS RIGHTS TO A JURY TRIAL
FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING THAT,
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT
OF A
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
THE
COURT.
(j) This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature
is
delivered by facsimile transmission, such signature shall create a valid
binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.
[THE
REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]
12
COUNTERPART
SIGNATURE PAGE TO SECURITY AGREEMENT, DATED AS OF JULY __,
2006.
IN
WITNESS WHEREOF,
the
parties hereto, intending to be bound hereby, have caused this Security
Agreement to be executed the day and year first above written.
| OBLIGOR: | ||
| [____________________________________] | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
| SECURED PARTY: | ||
| |
|
|
|
Xxxx X. Xxxxxxx |
||
13
SCHEDULE
A
Principal
Offices
SCHEDULE
B
Permitted
Liens
SCHEDULE
C
Jurisdictions
Utah
Texas
Ukraine
British
Columbia
EXHIBIT
7(f)
FORM
OF GUARANTY
THIS
GUARANTY,
dated
as of July ___, 2006 (the "Guaranty"),
is
made by [_______________________], a Nevada corporation (the "Guarantor"),
in
favor of Xxxx Xxxxxxx (the “Secured
Party”).
RECITALS
A. Concurrently
herewith, Tactical Air Defense Services, Inc. (“Purchaser
Parent”),
the
Guarantor, Genesis aviation Acquisition, Inc., OneSource Aviation Acquisition
Inc., and Resource Financial Aviation Holdings, Inc. (together with Guarantor,
the “Subsidiaries”)
and
AeroGroup Incorporated (“AeroGroup”)
and
its wholly-owned subsidiaries, Genesis Acquisition, Inc., Resource Financial
Holding Acquisition, Inc. and OneSource Acquisition, Inc. (the “LLC
Sellers”
and,
together with AeroGroup, the “Sellers”)
entered into a Asset Purchase Agreement (the “Asset
Purchase Agreement”),
pursuant to which the Purchaser Parent has assumed the obligations of
the
Sellers pursuant to that certain Secured Party a Promissory Note (the
“Note”),
in
the original aggregate principal amount of $1,100,000, issued to Secured
Party
(as defined in the Asset Purchase Agreement) (all capitalized terms not
otherwise defined herein shall have the respective meanings assigned
to them in
the Asset Purchase Agreement); and
B. It
is a
condition precedent to the Closing of the acquisition contemplated by
the Asset
Purchase Agreement, that the Purchaser Parent shall have assumed all
of the
obligations under such Note and that the Guarantor and the other Subsidiaries
shall have each executed a guaranty in favor of the Secured Party, guaranteeing
payment of the Note; and
C. The
Guarantor has duly authorized the execution, delivery and performance
of this
Guaranty; and
D. The
Guarantor will derive substantial benefits from the acquisition of the
Purchased
Assets by the Sellers, which assets were acquired in part by Sellers
from
proceeds loaned by Secured Party as evidenced by the Note.
NOW,
THEREFORE,
for good
and valuable consideration, the receipt of which is hereby acknowledged,
and in
order to induce the Secured Party to accept the assumption of the Note
as
partial payment for the Purchased Assets under the Asset Purchase Agreement,
Guarantor agrees, unconditionally and absolutely, for the benefit of
the Secured
Party, as follows:
1. DEFINITIONS
(a) As
used
in this Agreement, the following terms shall have the following
meanings:
(i) “Transaction
Documents"
shall
mean the Note, the Asset Purchase Agreement, the Security Agreement,
any bills
of sale, any release or assumption agreement, and any other documents
executed
and delivered by any of the Purchasers in connection with the Note or
Asset
Purchase Agreement.
(ii) "Parent’s
Obligations"
shall
mean all obligations of the Purchaser Parent under the Note and those
obligations of the Subsidiaries arising under any other documents executed
and
delivered by the Purchasers in connection with the Notes.
(iii) "Guarantor
Documents"
shall
mean this Guaranty, and any other documents executed and delivered by
any
guarantor in connection with any of the Parent’s Obligations.
(iv) "U.C.C."
shall
mean the Uniform Commercial Code as in effect in the State of New
York.
(b) Unless
otherwise defined herein or the context otherwise requires, terms for
which
meanings are provided in the U.C.C. are used in this Guaranty, including
its
preamble and recitals, with such meanings.
2. GUARANTY
PROVISIONS
(a) Guaranty.
Guarantor
hereby absolutely, unconditionally and irrevocably (i) guarantees the
full and
punctual payment when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise, of all of the Parent’s
Obligations, whether for principal, interest, fees, expenses or otherwise
(including all such amounts which would become due but for the operation
of the
automatic stay under Section 362(a) of the United States Bankruptcy Code,
11
U.S.C. 362(a), and the operation of Sections 502(b) and 506(b) of the
United
States Bankruptcy Code, 11 U.S.C. 502 (b) and 506(b)), and (ii) indemnifies
and
holds harmless the Secured Party for any and all costs and expenses (including
reasonable attorneys' fees and expenses) incurred by the Secured Party
in
enforcing any rights under this Guaranty; provided,
however,
that
Guarantor shall be liable under this Guaranty only for the maximum amount
of
such liability that can be hereby incurred against such Guarantor without
rendering this Guaranty, as it relates to the Guarantor or to any other
Guarantor, voidable under applicable law relating to fraudulent conveyance
or
fraudulent transfer, and not for any greater amount. This Guaranty constitutes
a
guaranty of payment when due and not of collection, and the Guarantor
specifically agrees that it shall not be necessary or required that the
Secured
Party exercise any right, assert any claim or demand or enforce any remedy
whatsoever against the Purchaser Parent or any other Subsidiary or any
other
Person before or as a condition to the obligations of the Guarantor
hereunder.
(b) Guaranty
Absolute, etc.
This
Guaranty shall in all respects be a continuing, absolute, unconditional
and
irrevocable guaranty of payment, and shall remain in full force and effect
until
all the Parent’s Obligations have been paid in full and all obligations of the
Guarantor hereunder shall have been paid in full. Guarantor unconditionally
and
absolutely guarantees that the Parent’s Obligations will be paid strictly in
accordance with the terms of the Note under which it arises, regardless
of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Secured Party with respect
thereto. The liability of the Guarantor under this Guaranty shall be
absolute,
unconditional and irrevocable as to each Guarantor irrespective of:
2
(i) any
lack
of validity, legality or enforceability of the Note;
(ii) the
failure of the Secured Party: (A) to assert any claim or demand or to
enforce
any right or remedy against the Purchaser Parent or any other Subsidiary,
or any
other person or entity (including any other guarantor) under the provisions
of
the Note, or (B) to exercise any right or remedy against any other guarantor
of,
or collateral securing, any of the Parent’s Obligations;
(iii) any
change in the time, manner or place of payment of, or in any other term
of, all
or any of the Parent’s Obligations, or any other extension, compromise or
renewal of any of the Parent’s Obligations;
(iv) any
reduction, limitation, impairment or termination of the Parent’s Obligations for
any reason, including any claim of waiver, release, surrender, alteration
or
compromise, and shall not be subject to (and the Guarantor hereby waives
any
right to or claim of) any defense or setoff, counterclaim, recoupment
or
termination whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise or unenforceability of, or any other event or
occurrence affecting, the Parent’s Obligations or otherwise;
(v) any
amendment to, rescission, waiver, or other modification of, or any consent
to
departure from, any of the terms of the Note;
(vi) any
addition, exchange, release, surrender or non-perfection of any collateral,
or
any amendment to or waiver or release or addition of, or consent to departure
from, any other guaranty, held by the Secured Party securing any of the
Parent’s
Obligations; or
(vii) any
other
circumstance which might otherwise constitute a defense available to,
or a legal
or equitable discharge of, any of the Purchasers, any surety or any
guarantor.
(c)
No
Transfer of Assets; No Change in Corporate Status.
The
Guarantor agrees that from the date of this Guaranty and until final
payment in
full of the Parent’s Obligations, except in the ordinary course of business, or
if the Secured Party shall otherwise consent in writing, the Guarantor
will not
transfer any assets, the aggregate fair market value of which exceeds
$50,000.
The Guarantor shall not issue any securities (or derivative securities)
or
rights to acquire securities or indebtedness to any other party or guaranty
and
indebtedness of any party and shall not enter into any agreement obligating
it
to do any of the foregoing. The Guarantor shall not transfer any of their
assets
for so long as the Note is not repaid other than in the ordinary course
of
business. The Guarantor shall not merge with or enter into any kind of
reorganization or combination with, any other entity.
3
(d) Reinstatement,
etc.
Guarantor agrees that this Guaranty shall continue to be effective or
be
reinstated, as the case may be, if at any time any payment (in whole
or in part)
of any of the Parent’s Obligations is rescinded or must otherwise be restored by
the Secured Party, upon the insolvency, bankruptcy or reorganization
of the
Purchaser Parent, the Guarantor, any Subsidiary or otherwise, all as
though such
payment had not been made.
(e)
Waiver,
etc.
The
Guarantor hereby waives promptness, diligence, notice of acceptance and
any
other notice with respect to any of the Parent’s Obligations and this Guaranty
and any requirement that the Secured Party protect, secure, perfect or
insure
any security interest, or any property subject thereto, or exhaust any
right or
take any action against the Purchasers or any other Person (including
any other
guarantor) or entity or any, collateral securing the Parent’s Obligations, as
the case may be.
(f)
Waiver
of Subrogation.
The
Guarantor hereby irrevocably waives any claim or other rights which he
may now
or hereafter acquire against the Purchase Parent or Seller that arise
from the
existence, payment, performance or enforcement of any Guarantor's obligations
under this Guaranty or any other Transaction Documents, including any
right of
subrogation, reimbursement, exoneration, or indemnification, any right
to
participate in any claim or remedy of the Secured Party against the Purchaser
Parent or any other Subsidiary or any collateral which the Secured Party
now has
or hereafter acquires, whether or not such claim, remedy or right arises
in
equity, or under contract, statute or common law, including the right
to take or
receive from the Purchasers, directly or indirectly, in cash or other
property
or by set-off or in any manner, payment or security on account of such
claim or
other rights. If any amount shall be paid to the Guarantor in violation
of the
preceding sentence, such amount shall be deemed to have been paid to
the
Guarantor for the benefit of, and held in trust for, the Secured Party
and shall
forthwith be paid to the Secured Party to be credited and applied upon
the
Parent’s Obligations, whether matured or unmatured. The Guarantor acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated by the Note and from the Sold Assets acquired
by the
Purchasers as a result of the issuance thereof and that the waiver set
forth in
this Section 2(f) is knowingly made in contemplation of such
benefits.
(g)
Successors,
Transferees and Assigns.
(i) This
Guaranty shall: (A) be binding upon the Guarantor and its successors,
transferees and assigns; and (B) inure to the benefit of and be enforceable
by
the Secured Party, and his successors, transferees and assigns.
(ii)
Without
limiting the generality of clause (i) of this Section 2(g), but subject
to any
contrary provision contained in the Note, the Secured Party may assign
or
otherwise transfer (in whole or in part) their rights in the Notes to
any other
Person, and such other Person shall thereupon become vested with all
rights and
benefits in respect thereof granted to such Person in exercising rights
and
remedies under the Note, or otherwise, subject, however, to any contrary
provisions in such assignment or transfer.
4
(h)
Termination.
This
Agreement shall terminate when there is no longer any amount outstanding
on the
Note.
3. MISCELLANEOUS
PROVISIONS
(a)
Binding
on Successors, Transferees and Assigns; Assignment.
In
addition to, and not in limitation of, Section 2(g), and subject to the
Notes,
this Guaranty shall be binding upon the Guarantor and its successors,
transferees and assigns and shall inure to the benefit of and be enforceable
by
the Secured Parties, and its successors, transferees and assigns (to
the full
extent provided pursuant to Section 2(g)); provided,
however,
that
the Guarantor may not assign any of its obligations hereunder without
the prior
written consent of the Secured Party.
(b) Amendments,
etc.
No
amendment to or waiver of any provision of this Guaranty, and no consent
to any
departure by the Guarantor herefrom, shall in any event be effective
unless the
same shall be in writing and signed by the Secured Party, and then such
waiver
or consent shall be effective only in the specific instance and for the
specific
purpose for which given.
(c) Notices.
Any
notices required or permitted to be given under the terms hereof shall
be sent
by certified or registered mail (return receipt requested) or delivered
personally or by courier (including a recognized overnight delivery service)
or
by facsimile and shall be effective five days after being placed in the
mail, if
mailed by regular United States mail, or upon receipt, if delivered personally
or by courier (including a recognized overnight delivery service) or
by
facsimile, in each case addressed to a party. The addresses for such
communications shall be:
If
to the
Guarantor, to:
C/o
Tactical Air Defense Services, Inc.
0000
Xxxxxxx Xxxxx
Xxxxxxx,
Xxxxx 00000
Tel:
(000) 000-0000
Facsimile:
(000) 000-0000
With
copy
to:
Xxxxxxx
Xxxx LLP
00
X.
00xx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
5
If
to the
Secured Party, to:
Xxxx
X.
Xxxxxxx
0000
XXX
Xxxx.
Xxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Tel:
(000) 000-0000
Facsimile:
(000) 000-0000
With
copy
to:
Xxxxxxx
Xxxx LLP
00
X.
00xx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
(d)
No
Waiver; Remedies.
In
addition to, and not in limitation of, Section 2(b) and Section 2(e),
no failure
on the part of the Secured Party to exercise, and no delay in exercising,
any
right hereunder shall operate as a waiver thereof; nor shall any single
or
partial exercise of any right hereunder preclude any other or further
exercise
thereof or the exercise of any other right. The remedies herein provided
are
cumulative and not exclusive of any remedies provided by law.
(e) Captions.
Section
captions used in this Guaranty are for convenience of reference only,
and shall
not affect the construction of this Guaranty.
(f) Severabilitv.
Wherever
possible each provision of this Guaranty shall be interpreted in such
manner as
to be effective and valid under applicable law, but if any provision
of this
Guaranty shall be prohibited by or invalid under such law, such provision
shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions
of this
Guaranty.
(g)
Governing
Law.
THIS
GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS
OF THE STATE OF NEW YORK FOR PURPOSES OF ANY ACTION OR PROCEEDING INVOLVING
THIS
GUARANTY, THE GUARANTOR HEREBY EXPRESSLY SUBMITS TO THE JURISDICTION
OF ALL
FEDERAL AND STATE COURTS LOCATED IN THE STATE OF NEW YORK AND CONSENTS
THAT IT
MAY BE SERVED WITH ANY PROCESS OR PAPER BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, POSTAGE PREPAID, ADDRESSED AS SET FORTH IN SECTION 3(C) OF
THIS
GUARANTY OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK,
PROVIDED A REASONABLE TIME FOR APPEARANCE IS ALLOWED. THE FOREGOING SHALL
NOT
OPERATE IN ANY MANNER TO PROHIBIT THE SECURED PARTIES FROM BRINGING AN
ACTION
AGAINST THE GUARANTOR IN ANY JURISDICTION OTHER THAN THE STATE OF NEW
YORK.
6
(h)
Waiver
of Jury Trial.
THE
GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY. THE GUARANTOR
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE
SECURED PARTIES ENTERING INTO THE NOTES.
[THE
REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]
7
IN
WITNESS WHEREOF,
the
Guarantor has caused this Guaranty to be duly executed and delivered
as of the
date first above written.
|
[_______________________________________]
By:
Name:
Title:
President
|
8
Exhibit
8(l)
Form
of Patent Assignment
vi
