EXHIBIT 10.31
EXECUTION COPY
STOCK PURCHASE AGREEMENT
BETWEEN
HEICO AEROSPACE HOLDINGS CORP.
AND
HEICO CORPORATION
AND
LUFTHANSA TECHNIK AG
DATED OCTOBER 30, 1997
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TABLE OF CONTENTS
1. DEFINITIONS.............................................................. 1
2. SALE AND TRANSFER OF SHARES; CLOSING..................................... 8
2.1 Shares.......................................................... 8
2.2 Purchase Price.................................................. 9
2.3 Closing......................................................... 9
2.4 Closing Obligations............................................. 9
3. REPRESENTATIONS AND WARRANTIES
OF SELLER AND HEICO.................................................... 10
3.1 Organization and Good Standing.................................. 10
3.2 Authority; No Conflict......................................... 10
3.3 Capitalization.................................................. 11
3.4 Financial Statements............................................ 12
3.5 SEC Documents................................................... 12
3.6 No Undisclosed Liabilities or Material Adverse Change........... 13
3.7 Legal Proceedings; Orders ...................................... 13
3.8 Absence of Certain Changes and Events........................... 15
3.9 Insurance....................................................... 15
3.10 Environmental Matters........................................... 16
3.11 Labor Relations; Compliance..................................... 17
3.12 Compliance with Laws and Permits................................ 17
3.13 Intellectual Property........................................... 17
3.14 Disclosure...................................................... 20
3.15 Employee Benefit Matters........................................ 20
3.16 Relationships with Related Persons ............................. 22
3.17 Brokers or Finders.............................................. 22
4. REPRESENTATIONS AND WARRANTIES
OF INVESTOR............................................................ 22
4.1 Organization and Good Standing.................................. 22
4.2 Authority; No Conflict......................................... 22
4.3 Certain Proceedings............................................. 23
4.4 Brokers or Finders.............................................. 23
4.5 Investment Representation....................................... 23
5. INDEMNIFICATION; REMEDIES............................................... 24
5.1 Survival; Right to Indemnification Not Affected
by Knowledge.................................................... 24
5.2 Indemnification and Payment of Damages
by Seller and HEICO............................................. 24
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5.3 Indemnification and Payment of Damages
by Investor..................................................... 25
5.4 Limitations on Amount- HEICO.................................... 26
5.5 Limitations on Amount-Investor.................................. 26
5.6 Procedure for Indemnification-Third Party Claims................ 26
5.7 Procedure for Indemnification-Other Claims...................... 27
5.8 Attorneys' Fees................................................. 28
6. GENERAL PROVISIONS....................................................... 28
6.1 Expenses........................................................ 28
6.2 Public Announcements............................................ 28
6.3 Notices......................................................... 28
6.4 Jurisdiction; Service of Process............................... 29
6.5 Further Assurances.............................................. 30
6.6 Waiver.......................................................... 30
6.7 Entire Agreement and Modification............................... 30
6.8 Disclosure Letter............................................... 30
6.9 Assignments, Successors, and
No Third-Party Rights........................................... 31
6.10 Severability.................................................... 31
6.11 Section Headings, Construction.................................. 31
6.12 Governing Law................................................... 31
6.13 Counterparts.................................................... 31
EXHIBITS
Exhibit 1 Disclosure Letter
Exhibit 2 Public Announcement
Exhibit 3 Other Matters
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made as of October 30,
1997, by and among HEICO Aerospace Holdings Corp., a Florida corporation
("Seller"), HEICO Corporation, a Florida corporation ("HEICO") and Lufthansa
Technik AG, a German corporation ("Investor").
RECITALS
Seller desires to sell, and Investor desires to purchase, two hundred
(200) shares representing twenty percent (20%) of the issued and outstanding
shares of common stock ("Shares") of Seller for the consideration and on the
terms set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
"BREACH" -- a "Breach" of a representation, warranty, covenant, obligation, or
other provision of this agreement or any instrument delivered pursuant to this
Agreement will be deemed to have occurred if there is or has been any inaccuracy
in or breach of, or any failure to perform or comply with, such representation,
warranty, covenant or obligation.
"INVESTOR" -- as defined in the first paragraph of this Agreement.
"CLOSING" -- as defined in Section 2.3.
"CLOSING DATE" -- the date and time as of which the Closing actually takes
place.
"CONSENT" -- any approval, consent, ratification, waiver, or other authorization
(including any Governmental Authorization).
"CONTEMPLATED TRANSACTIONS" -- all of the transactions contemplated by this
Agreement, including:
(a) the sale of the Shares by Seller to Investor;
(b) the execution and delivery of the Shareholders Agreement, the
Research and Development Cooperation Agreement, and the Tax Allocation and
Sharing Agreement;
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(c) the performance by Investor and Seller and HEICO of their
respective covenants and obligations under this Agreement; and
(d) Investor's acquisition and ownership of the Shares.
"CONTRACT" -- any agreement, contract, obligation, promise, or undertaking
(whether written or oral and whether express or implied) that is legally
binding.
"DAMAGES" -- as defined in Section 5.2
"DISCLOSURE LETTER" -- the disclosure letter delivered by Seller and HEICO to
Investor concurrently with the execution and delivery of this Agreement.
"ENVIRONMENT" -- soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters streams, ponds, drainage basins, and
wetlands), groundwaters, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life, and any other environmental
medium or natural resource.
"ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES" -- any cost, damages, expense,
liability, obligation or other responsibility arising from or under
Environmental Law or Occupational Safety and Health Law and consisting of or
relating to:
(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and health,
and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,
investigative, remedial, or inspection costs and expenses arising under
Environmental Law or Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or Occupational
Safety and Health Law for cleanup costs or corrective action, including any
investigation, cleanup, removal, containment, or other remediation or response
actions ("Cleanup") required by applicable Environmental Law or Occupational
Safety and Health Law (whether or not such Cleanup has been required or
requested by any Governmental Body or any other Person) and for any natural
resource damages; or
(d) any other compliance, corrective investigative, or remedial
measures required under Environmental Law or Occupational Safety and Health Law.
The terms "removal", "remedial," and "response action," include the types of
activities covered by the United States Comprehensive Environmental Response,
compensation, and Liability Act, 42 U.S.C. /section/9601 et seq., as amended
("CERCLA").
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"ENVIRONMENTAL LAW" -- any Legal requirement that requires or relates to:
(a) advising appropriate authorities, employees, and the public of
intended or actual releases of pollutants or hazardous substances or materials,
violations of discharge limits, or other prohibitions and of the commencements
of activities, such as resource extraction or construction, that could have
significant impact on the Environment;
(b) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the release, or minimizing the
hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged, and used
so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species, or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other potentially
harmful substances;
(g) cleaning up pollutants that have been released, preventing the
threat of release, or paying the costs of such clean up or prevention; or
(h) making responsible parties pay private parties, or groups of
them for damages done to their health or the Environment, or permitting
self-appointed representatives of the public interest to recover for injuries
done to public assets.
"ENVIRONMENTAL PERMITS" -- refers to all permits, licenses, authorizations,
certificates and approvals of governmental authorities relating to or required
by Environmental Laws and necessary for the businesses of Seller or any Seller's
Company, as currently conducted.
"EXCHANGE ACT" -- the Securities and Exchange Act of 1934 or any successor law,
and regulations and rules issued pursuant to that Act or any successor law.
"FACILITIES" -- any real property, leaseholds, or other interest currently or
formerly owned or operated by any Seller's Company and any buildings, plants,
structures, or equipment (including motor vehicles, tank cars, and rolling
stock) currently or formerly owned or operated by any Seller's Company.
"FAA" -- the Federal Aviation Administration of the United States.
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"GAAP" -- generally accepted United states accounting principles, applied on a
basis consistent with the basis on which the Balance Sheet and the other
financial statements referred to in section 3.4(b) were prepared.
"GOVERNMENTAL AUTHORIZATION" -- any approval, consent, license, permit, waiver,
or other authorization issued, granted, given, or otherwise made available by or
under the authority of any Governmental Body or pursuant to any Legal
Requirement.
"GOVERNMENTAL BODY" -- any:
(a) nation, state, county, city, town, village, district, or other
jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature.
"HAZARDOUS ACTIVITY" -- the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, Release, storage,
transfer, transportation, treatment, or use (including any withdrawal or other
use of groundwater) of Hazardous Materials in, on, under, about, or from the
Facilities or any part thereof into the Environment, and any other act,
business, operation, or thing that increases the danger, or risk of danger, or
poses and unreasonable risk of harm to persons or property on or off the
Facilities, or that may affect the value of the Facilities or the Seller's
Companies.
"HAZARDOUS MATERIALS" -- includes any (i) "hazardous substance," "pollutants,"
or "contaminant" (as defined in Sections 101(14) and (33) of CERCLA or the
regulations issued pursuant to Section 102 of CERCLA and found at 40 C.F.R.
/section/302), including any element, compound, mixture, solution, or substance
that is or may be designated pursuant to Section 102 of CERCLA; (ii) substance
that is or may be designated pursuant to Section 311(b)(2)(A) of the Federal
Water Pollution Control Act, as amended (33 U.S.C. /section//section/ 6901,
6921) ("RCRA") or having characteristics that may subsequently be considered
under RCRA to constitute a hazardous waste; (iv) substance containing petroleum,
as that term is defined in Section 9001(8) of RCRA; (v) toxic pollutant that is
or may be listed under Section 307(a) of FWPCA; (vi) hazardous air pollutant
that is or may be listed under section 112 of the Clean Air Act, as amended (42
U.S.C. /section//section/ 7401, 7412); (vii) imminently hazardous chemical
substance or mixture with respect to which action has
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been or may be taken pursuant to Section 7 of the Toxic substances Control Act,
as amended (15 U.S.C. /section//section/ 2601, 2606); (viii) source, special
nuclear, or by-product material as defined by the Atomic Energy Act of 1954, as
amended (42 U.S.C. /section/ 2011 et seq.); (ix) asbestos, asbestos-containing
material, or urea formaldehyde or material that contains it; (x) waste oil and
other petroleum products; and (xii) any other toxic materials, contaminants, or
hazardous substances or wastes pursuant to any Environmental Law.
"INDEMNIFIED PERSONS" -- as defined in Section 5.2.
"INTELLECTUAL PROPERTY ASSETS" -- as defined in Section 3.13.
"INTERIM BALANCE SHEET" -- as defined in Section 3.4.
"KNOWLEDGE" -- an individual will be deemed to have "Knowledge" of a particular
fact or other matter if:
(a) such individual is actually aware of such fact or other matter; or
(b) such individual as an officer or director of a public company
should be aware of or should have knowledge of such fact or other matter under
applicable U.S. federal securities laws.
"KNOWLEDGE OF SELLER, ANY SELLER'S COMPANY, AND HEICO" -- the Knowledge of
Laurans Xxxxxxxxx, Xxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxxx Xxxxx or Xxxxx Xxxx.
"LEGAL REQUIREMENT" -- any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty.
"OCCUPATIONAL SAFETY AND HEALTH LAW" -- any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards, and any program, whether governmental or private (including
those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.
"ORDER" -- any award, decision, injunction, judgment, order, ruling, subpoena,
or verdict entered, issued, made, or rendered by any court, administrative
agency, or other Governmental Body or by any arbitrator.
"ORDINARY COURSE OF BUSINESS" -- an action taken by a Person will be deemed to
have been taken in the "Ordinary Course of Business" only if:
(a) such action is consistent with the past practices of such Person
and is taken in the ordinary course of the normal day-to-day operations of such
Person; or
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(b) such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of directors (or by
any individual or group of individuals exercising similar authority), in the
ordinary course of the normal day-to-day operations of other Persons that are in
similar lines of business as such Person.
"ORGANIZATIONAL DOCUMENTS" -- the articles or certificate of incorporation and
the bylaws of a corporation and any amendment to any of the foregoing.
"PERSON" -- any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, labor union, or other entity or
Governmental Body.
"PRE-CLOSING ENVIRONMENTAL LIABILITIES" -- (i) any conditions existing prior to
the Closing Date on any property (whether real, personal, or mixed and whether
tangible or intangible) owned, leased or operated by Seller, or any Seller's
Company which violates an Environmental Law in effect on the Closing Date, (ii)
a Release of a Hazardous Material on any property (whether real, personal, or
mixed and whether tangible or intangible) owned, leased or operated by Seller,
or any Seller's Company which violates an Environmental Law in effect on the
Closing Date or any Release of a Hazardous Material wherever located which any
of such parties may be held responsible, and (iii) any operation of the business
by Seller or any Seller's Company prior to the Closing Date which violates an
Environmental Law in effect on the Closing Date.
"PROCEEDING" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"RELATED PERSON" -- with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by such
individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such individual's
Family hold (individually or in the aggregate) a Material Interest; and
(d) any Person with respect to which such individual or one or more
members of such individual's Family serves as a director, officer, partner,
executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
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(a) any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under common control with
such specified Person;
(b) any Person that holds a Material Interest in such specified Person;
(c) each Person that serves as a director, officer, partner, executor,
or trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person serves as a
general partner or a trustee (or in a similar capacity); and
(f) any Related Person of any individual described in clause (b) or
(c).
For purposes of this definition, (a) the "Family" of an individual
includes (i) the individual, (ii) the individual's spouse, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, and (b) "Material Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
of voting securities or other voting interests representing at least ten percent
(10%) of the outstanding equity securities or equity interest in a Person.
"RELEASE" -- any spilling, leaking, emitting, discharging, depositing, escaping,
leaching, dumping, or other releasing into the Environment, whether intentional
or unintentional.
"REPRESENTATIVE" -- with respect to a particular Person, any director, officer,
employee, agent consultant, advisor, or other representative of such Person,
including legal counsel, accountants, and financial advisors.
"RESEARCH AND DEVELOPMENT COOPERATION AGREEMENT" -- the research and development
cooperation agreement by and between the Seller and Investor of even date
herewith.
"SECURITIES ACT" -- the Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.
"SELLER'S COMPANIES" -- the Seller and its Subsidiaries, collectively.
"SHAREHOLDERS AGREEMENT" -- the shareholders agreement by and between Seller,
Investor and HEICO of even date herewith.
"SHARES" -- as defined in the Recitals of this Agreement.
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"SUBSIDIARY" -- with respect to any Person (the "Owner"), any corporation or
other Person of which securities or other interests having the power to elect a
majority of that corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the business and
policies of that corporation or other Person (other than securities or other
interest having such power only upon the happening of a contingency that has not
occurred) are held by the Owner or one or more of its Subsidiaries; when used
without reference to a particular Person, "Subsidiary" means a Subsidiary of the
Seller.
"TAX" -- (and, with correlative meaning, "Taxes" and "Taxable") means (A) any
net income, alternative or add-on minimum tax, gross income, gross receipts,
sales, use, ad valorem, franchise, profits, license, withholding on amounts
paid, payroll, employment, excise, severance, stamp, occupation, premium,
property, environmental or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or any penalty, addition to tax or additional amount
imposed by any governmental authority (hereinafter a "Taxing Authority")
responsible for the imposition of any such tax (domestic or foreign).
"TAX ALLOCATION AND SHARING AGREEMENT" -- the tax allocation and sharing
agreement by and between the HEICO and Seller of even date herewith.
"TAX RETURN" -- any return (including any information return), report,
statement, schedule, notice, form, or other document or information file with or
submitted to, or required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment, collection, or payment of
any Tax or in connection with the administration, implementation, or enforcement
of or compliance with any Legal Requirement relating to any Tax.
"THREATENED" -- a claim, Proceeding, dispute, action, or other matter will be
deemed to have been "Threatened" if any demand or statement has been made
(orally or in writing) or any notice has been given (orally or in writing), or
if any other event has occurred or any other circumstances exist, that would
require a Person to make a disclosure under U.S. federal securities laws.
2. SALE AND TRANSFER OF SHARES; CLOSING
2.1 SHARES
Subject to the terms and conditions of this Agreement, at the Closing, Seller
will issue and sell the Shares to Investor, and Investor will purchase the
Shares from Seller.
2.2 PURCHASE PRICE
The purchase price (the "Purchase Price") for the Shares will be $10,000,000.
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2.3 CLOSING
The purchase and sale (the "Closing") provided for in this Agreement will take
place at the offices of Investor's counsel at Xxxxxxx Tower, Suite 1600, 000
Xxxxxxxx Xxx., Xxxxx, Xxxxxxx 00000, at 4:30 p.m. (local time) on October 30,
1997 or at such other time and place as the parties may agree, and will be
effective as of the close of business on October 31, 1997.
2.4 CLOSING OBLIGATIONS
At the Closing:
(a) Seller and HEICO will deliver to Investor:
(i) certificates representing the Shares;
(ii) the Shareholders Agreement, duly executed by Seller and
HEICO;
(iii) the Research and Development Cooperation Agreement, duly
executed by the Seller;
(iv) the Tax Allocation and Sharing Agreement, duly executed
by Seller and HEICO;
(v) an opinion letter from Seller's and HEICO's counsel in a
form reasonably acceptable to Investor; and
(vi) a certified copy of the amended Articles of Incorporation
of Seller reflecting Investor's preemptive rights;
(b) Investor will deliver to Seller:
(i) the Purchase Price by wire transfer to accounts specified
by Seller or by any other means mutually agreed to by Seller and
Investor;
(ii) the Shareholders Agreement duly executed by Investor;
(iii) the Research and Development Cooperation Agreement, duly
executed by Investor; and
(iv) an opinion letter from counsel of Investor (that may rely
on issues of German law on an opinion from Investor's in-house counsel)
in a form reasonably acceptable to Seller and HEICO.
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3. REPRESENTATIONS AND WARRANTIES OF SELLER AND HEICO
Seller and HEICO represent and warrant to Investor as follows, provided however,
none of the following representations and warranties are made with respect to
the business or assets of Northwings:
3.1 ORGANIZATIONS AND GOOD STANDING
(a) The Seller, HEICO and each Seller's Company is a corporation duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority to
conduct its business as it is now being conducted, to own or use the properties
and assets that it purports to own or use, and to perform all its obligations
under Seller's or Seller's Companies' Contracts. The Seller, HEICO and each
Seller's Company is duly qualified to do business as a foreign corporation and
is in good standing under the laws of each state or other jurisdiction in which
either the ownership or use of the properties owned or used by it, or the nature
of the activities conducted by it, requires such qualification.
(b) Seller or HEICO has made available to Investor copies of the
Organizational Documents of each Seller's Company, as currently in effect.
3.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid, and binding obligation
of Seller and HEICO, enforceable against Seller and HEICO in accordance with its
terms. Upon the execution and delivery by Seller and HEICO of the Shareholders
Agreement, the Research and Development Cooperation Agreement and the Tax
Allocation and Sharing Agreement (collectively, the "Seller's Closing
Documents"), the Seller's Closing Documents will constitute the legal, valid,
and binding obligations of Seller and HEICO, as may be applicable, enforceable
against Seller and HEICO, as may be applicable, in accordance with their
respective terms. Seller and HEICO have the absolute and unrestricted right,
power, authority, and capacity to execute and deliver this Agreement and the
Seller's Closing Documents and to perform its obligations under this Agreement
and the Seller's Closing Documents.
(b) Except as set forth in Part 3.2 of the Disclosure Letter, neither
the execution and delivery of this Agreement nor the consummation or performance
of any of the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of (A)
any provision of the Organizational Documents of the Seller's
Companies, or (B) any resolution adopted by the board of directors or
the stockholders of any Seller's Company;
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(ii) contravene, conflict with, or result in a violation of,
or give any Governmental Body or other Person the right to challenge
any of the Contemplated Transactions or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to which
Seller, any Seller's Company or HEICO or any of the assets owned or
used by any Seller's Company, may be subject;
(iii) contravene, conflict with, or result in a violation of
any of the terms or requirements of, or give any Governmental Body the
right to revoke, withdraw, suspend, cancel, terminate, or modify, any
Governmental Authorization that is held by any Seller's Company or that
otherwise relates to the business of, or any of the assets owned or
used by, any Seller's Company;
(iv) contravene, conflict with, or result in a violation or
breach of any provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any applicable
contract; or
(v) result in the imposition or creation of any encumbrance
upon or with respect to any of the assets owned or used by any Seller's
Company.
Except as set forth in Part 3.2 of the Disclosure Letter, neither the Seller,
HEICO or any Seller's Company is or will be required to give any notice to or
obtain any Consent from any Person in connection with the execution and delivery
of this Agreement or the consummation or performance of any of the Contemplated
Transactions.
3.3 CAPITALIZATION
The authorized equity securities of the Seller consist of 10,000 shares of
common stock, par value $0.01 per share, of which 800 shares are issued and
outstanding. The Shares, upon consummation of the Contemplated Transactions
shall constitute twenty percent (20%) of the issued and outstanding equity
securities of the Seller. HEICO is and will be on the Closing Date the record
and beneficial owner and holder of all the other equity securities of the
Seller, free and clear of all encumbrances except for the lien of that certain
credit facility with SunTrust Bank, N.A. All of the outstanding equity
securities and other securities of each Seller's Company are owned of record and
beneficially by one or more of the Seller's Companies, free and clear of all
encumbrances except for the lien of that certain credit facility with SunTrust
Bank, N.A. No legend or other reference to any purported encumbrance appears
upon any certificate representing equity securities of any Seller's Company
other than legends required by applicable securities laws. All of the
outstanding equity securities of each Seller's Company have been duly authorized
and validly issued and are fully paid and nonassessable. There are no Contracts
relating to the issuance, sale, or transfer of any equity securities or other
securities of any Seller's Company. None of the outstanding equity securities or
other securities of any Seller's Company was issued in violation of the
Securities Act or any other Legal Requirement.
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No Seller's Company owns, or has any Contract to acquire, any equity securities
or other securities of any Person (other than Seller's Companies) or any direct
or indirect equity or ownership interest in any other business in excess of ten
percent (10%) of the total equity of any such business.
3.4 FINANCIAL STATEMENTS
Seller or HEICO has made available to Investor: (a) unaudited balance sheets of
the Seller's Companies as at October 31, 1996 and the related unaudited
statements of income, changes in stockholders' equity, and cash flow for the
fiscal year then ended, and (b) an unaudited balance sheet of the Seller's
Companies as at July 31, 1997 (the "Interim Balance Sheet") and the related
unaudited statements of income, changes in stockholders' equity, and cash flow
for the nine (9) months then ended. Such financial statements fairly present the
financial condition and the results of operations, changes in stockholders'
equity, and cash flow of the Seller's Companies as at the respective dates of
and for the periods referred to in such financial statements, all in accordance
with GAAP, subject to normal recurring year-end adjustments (the effect of which
will not, individually or in the aggregate, be materially adverse) and the
absence of notes and deferred taxes; the financial statements referred to in
this Section 3.4 reflect the consistent application of such accounting
principles throughout the periods involved. No financial statements of any
Person other than the Seller's Companies are required by GAAP to be included in
the consolidated financial statements of the Seller.
3.5 SEC DOCUMENTS.
HEICO has filed all required reports, schedules, forms, statements and other
documents required to be filed under the Exchange Act with the SEC since January
1, 1995 (the "HEICO SEC Documents"). As of their respective dates, the HEICO SEC
Documents complied as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to such HEICO SEC Documents. Except to the extent that information
contained in any HEICO SEC Document has been revised or superseded by a
later-filed HEICO SEC Document, filed and publicly available prior to the date
of this Agreement, none of the HEICO SEC Documents contained when filed any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of HEICO included in the HEICO SEC
Documents complied as of their respective dates of filing with the SEC as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except, in
the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present the financial position of HEICO as of the
dates thereof and the results of its operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end
audit
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adjustments). The representations and warranties set forth in this Section
3.5 shall not apply to any noncompliance, nonfilings, misstatements, omissions
or failures to present fairly or conform to generally accepted accounting
principles, which would not, individually or in the aggregate, have a material
adverse effect on HEICO. Except as set forth in the HEICO SEC Documents, and
except for liabilities and obligations incurred in the Ordinary Course of
Business, to the Knowledge of Seller, any Seller's Company and HEICO, HEICO has
no liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by generally accepted accounting principles to
be set forth on a balance sheet of HEICO or in the notes thereto which,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on HEICO. Notwithstanding anything to the contrary
contained in this Agreement, neither HEICO nor Seller shall have any
responsibility for the breach of this Section 3.5 unless such breach relates to
the financial statements, assets or liabilities of Seller's Companies.
3.6 NO UNDISCLOSED LIABILITIES OR MATERIAL ADVERSE CHANGE
Except for the Northwings Accessories Corp., a Florida corporation
("Northwings") acquisition by Seller, since the date of the Interim Balance
Sheet, to the Knowledge of Seller, any Seller's Company and HEICO, there has not
been any material adverse change in the business, operations, properties, assets
or condition of any Seller's Companies taken as a whole, and to the Knowledge of
Seller, any Seller's Company and HEICO, no event has occurred or circumstance
exists that may result in such a material adverse change.
Except as set forth in Part 3.6 of the Disclosure Letter, to the Knowledge of
Seller, any Seller's Company and HEICO, the Seller's Companies have no
liabilities or obligations of any nature (whether known or unknown and whether
absolute, accrued, contingent, or otherwise) except for liabilities or
obligations reflected or reserved against in the Interim Balance Sheet and
liabilities and obligations incurred in the Ordinary Course of Business since
the respective dates thereof. The liabilities or obligations referred to in this
paragraph include, but are not limited to, any liability for or with respect to
any Taxes which were incurred or suffered by any Seller's Company during any Tax
period (or portion thereof) up to and including the Closing Date including
without limitation Taxes that are owed as a result of any dividends which are
declared before the Closing Date but paid after the Closing Date.
3.7 LEGAL PROCEEDINGS; ORDERS
(a) Except as set forth in Part 3.7 of the Disclosure Letter, there is
no pending Proceeding:
(i) that has been commenced by or against any Seller's
Company or that otherwise relates to or may affect the business of, or
any of the assets owned or used by, any Seller's Company; or
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(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with,
any of the Contemplated Transactions.
To the Knowledge of Seller, any Seller's Company and HEICO, (1) no such
Proceeding has been Threatened, and (2) no event has occurred or circumstance
exists that is likely to give rise to or serve as a basis for the commencement
of any such Proceeding. Seller or on Seller's behalf, has made available to
Investor copies of all pleadings, correspondence, and other documents relating
to each Proceeding listed in Part 3.7 of the Disclosure Letter. The Proceedings
listed in Part 3.7 of the Disclosure Letter will not have a material adverse
effect on the business, operations, assets or financial condition of any
Seller's Company.
(b) Except as set forth in Part 3.7 of the Disclosure Letter:
(i) there is no Order to which any of the Seller's
Companies, or any of the assets owned or used by any Seller's Company,
is subject that prohibits or prevents Seller's Companies from
conducting its business in the Ordinary Course of Business;
(ii) neither Seller or HEICO is subject to any Order
that relates to the business of, or any of the assets owned or used by,
any Seller's Company that prohibits or prevents Seller's Companies from
conducting its business in the Ordinary Course of Business; and
(iii) to the Knowledge of Seller, any Seller's Company
and HEICO, no officer, director, agent, or employee of any Seller's
Company is subject to any Order that prohibits such officer, director,
agent, or employee from engaging in or continuing any conduct,
activity, or practice relating to the business of any Seller's Company
in the Ordinary Course of Business.
(c) Except as set forth in Part 3.7 of the Disclosure Letter:
(i) each Seller's Company is, and has been, in full
compliance with all of the terms and requirements of each Order to
which it, or any of the assets owned or used by it, is or has been
subject;
(ii) to the Knowledge of Seller, any Seller's Company
and HEICO, no event has occurred or circumstance exists that may
constitute or result in (with or without notice or lapse of time) a
violation of or failure to comply with any term or requirement of any
Order to which any Seller's Company, or any of the assets owned or used
by any Seller's Company, is subject; and
(iii) no Seller's Company has received any notice or
other communication (whether oral or written) from any Governmental
Body or any
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other Person regarding any actual, alleged, possible, or
potential violation of, or failure to comply with, any term or
requirement of any Order to which any Seller's Company, or any of the
assets owned or used by any Seller's Company, is or has been subject.
3.8 ABSENCE OF CERTAIN CHANGES AND EVENTS
Except as set forth in Part 3.8 of the Disclosure Letter, since the date of the
Interim Balance Sheet, the Seller's Companies have conducted their businesses
only in the Ordinary Course of Business and there has not been any:
(a) change in any Seller's Company's authorized or issued capital
stock; grant of any stock option or right to purchase shares of capital stock of
any Seller's Company; issuance of any security convertible into such capital
stock; grant of any registration rights; purchase, redemption, retirement, or
other acquisition by any Seller's Company of any shares of any such capital
stock; or declaration or payment of any dividend or other distribution or
payment in respect of shares of capital stock other than that certain dividend
in the amount of ten million U.S. Dollars (US$ 10,000,000) previously declared;
(b) amendment to the Organizational Documents of any Seller's Company;
(c) except for the Northwings acquisition, purchase, sale (other than
sales of inventory in the Ordinary Course of Business), lease, or other
disposition of any assets or property of any Seller's Company or mortgage,
pledge, or imposition of any lien or other encumbrance on any material assets or
property of any Seller's Company, including the sale, lease, or other
disposition of any of the Intellectual Property Assets; and
(d) payment or increase by any Seller's Company of any bonuses,
salaries, or other compensation to any stockholder, director, officer, or
(except in the Ordinary Course of Business) employee.
3.9 INSURANCE
Part 3.9 of the Disclosure Letter contains a complete and accurate list of all
policies of liability insurance to which Seller or any Seller's Company is a
party or that provide coverage to Seller, any Seller's Company, or any director
or officer of a Seller's Company.
3.10 ENVIRONMENTAL MATTERS
Except as set forth in Part 3.10 of the Disclosure Letter:
(a) No notice, demand, summons, or similar request for information, or
complaint or Order has been issued or served on Seller or any Seller's Company
and, to the Knowledge of Seller, any Seller's Company and HEICO, no penalty has
been assessed,
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no investigation or review is pending, or is Threatened, against any of them,
and to the Knowledge of Seller, any Seller's Company and HEICO, no
Environmental, Health, and Safety Liabilities exist with respect to (i) any
alleged violation of any Environmental Law, (ii) any alleged failure to have any
Environmental Permit, (iii) any Hazardous Activity, or (iv) any Release of
Hazardous Materials.
(b) To the Knowledge of Seller, any Seller's Company and HEICO, no
underground storage tank for Hazardous Materials is present at any real property
owned, leased or otherwise operated by Seller or any Seller's Company, currently
or (i) during the three (3) year period prior to the date of this Agreement for
leased or operated real property, or (b) during the five (5) year period prior
to the date of this Agreement for owned real property.
(c) To the Knowledge of Seller, any Seller's Company and HEICO, there
are no Pre-Closing Environmental Liabilities that have had or are likely to have
a material adverse effect on the business, financial condition, results of
operations or prospects of Seller, or any Seller's Company.
(d) To the Knowledge of Seller, any Seller's Company and HEICO, no
Hazardous Material has been Released by Seller or any Seller's Company at or
under any (i) owned real property, leased real property or other real property
during the period which Seller or any Seller's Company owned, leased or
otherwise operated such property. To the Knowledge of Seller, any Seller's
Company and HEICO, all Hazardous Materials used in the business of Seller or any
Seller's Company have been reported in accordance with all applicable legal
requirements.
(e) To the Knowledge of Seller, any Seller's Company and HEICO, no
owned, leased or operated real property has directly or indirectly transported
or arranged for the transportation of any Hazardous Materials in violation of
any Environmental Law listed or proposed for listing on the National Priorities
List promulgated pursuant to CERCLA, on CERCLIS (as defined in CERCLA) or on any
similar federal, state, local or foreign site lists requiring investigation or
clean-up.
(f) To the Knowledge of Seller, any Seller's Company and HEICO, there
are no liens under any Environmental Laws on any owned real property, leased
real property or other real property and no governmental actions have or are in
the process of being taken that could subject such real property to such liens.
(g) There has been no environmental investigation, study, audit test,
review or other analysis conducted within the last two (2) years on any owned
real property, leased real property or other real property of Seller or any
Seller's Company that has not been delivered or made available to Investor.
3.11 LABOR RELATIONS; COMPLIANCE
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No Seller's Company has been or is a party to any collective bargaining or other
labor Contract and there has not been, there is not presently pending or
existing, and to the Knowledge of Seller, any Seller's Company and HEICO, there
is not Threatened, any strike, slowdown, picketing, work stoppage.
3.12 COMPLIANCE WITH LAWS AND PERMITS
To the Knowledge of Seller, any Seller's Company and HEICO, the business of the
Seller's Companies is being conducted in compliance with all applicable Legal
Requirements, including without limitation, applicable Environmental Laws and
the rules and regulations promulgated by the FAA. No notice of any default,
violation or non-compliance of any Legal Requirement relating to any Seller's
Company has been received by Seller, any Seller's Company and HEICO within the
last two (2) years and, to the Knowledge of Seller, any Seller's Company and
HEICO, no notice of any default, violation or non-compliance of any Legal
Requirement relating to any Seller's Company has been received by Seller, any
Seller's Company and HEICO prior to the two (2) year period mentioned above. To
the Knowledge of Seller, any Seller's Company and HEICO, all reengineering
processes used by Seller, any Seller's Company or any of their Affiliates for
designing, manufacturing and testing any and all parts comply with all
applicable Legal Requirements, including without limitation, applicable patent,
copyright and other laws relating to intellectual property and the rules and
regulations promulgated by the FAA. To the Knowledge of Seller, any Seller's
Company and HEICO, any and all parts, spare or replacement parts, or other items
produced by any Seller's Company or any of their Affiliates are designed,
manufactured and tested consistent with such reengineering processes.
To the Knowledge of Seller, any Seller's Company and HEICO, Seller and the
Seller's Companies possess all material permits including, without limitation,
licenses and other authorizations required to conduct their business, including
all appropriate FAA certificates, and all such permits are valid, current and in
full force and effect.
3.13 INTELLECTUAL PROPERTY
(a) INTELLECTUAL PROPERTY ASSETS --The term "Intellectual Property
Assets" includes:
(i) the name HEICO Aerospace Holdings Corporation, all
fictional business names, trading names, registered and unregistered
trademarks, service marks, and applications (collectively, "Marks");
(ii) all patents, patent applications, and inventions and
discoveries that may be patentable (collectively, "Patents");
(iii) all copyrights in both published works and unpublished
works (collectively, "Copyrights"); and
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(iv) all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process
technology, plans, drawings, and blue prints (collectively "Trade
Secrets"); owned, used, or licensed by any Seller's Company as licensee
or licensor.
(b) KNOW-HOW NECESSARY FOR THE BUSINESS
(i) To the Knowledge of Seller, any Seller's Company and
HEICO, the Intellectual Property Assets are all those necessary for the
operation of the Seller's Companies' businesses as they are currently
conducted. To the Knowledge of Seller, any Seller's Company and HEICO,
one or more of the Seller's Companies is the owner of all right, title,
and interest in and to each of the Intellectual Property Assets, free
and clear of all liens, security interests, charges, encumbrances,
equities, and other adverse claims, and has the right to use without
payment to a third party all of the Intellectual Property Assets.
(ii) To the Knowledge of Seller, any Seller's Company and
HEICO, no employee of any Seller's Company has entered into any
Contract that restricts or limits in any way the scope or type of work
in which the employee may be engaged or requires the employee to
transfer, assign, or disclose information concerning his work to anyone
other than one or more of the Seller's Companies.
(c) PATENTS
(i) To the Knowledge of Seller, any Seller's Company and
HEICO, all of the issued Patents are currently in compliance with
formal legal requirements (including payment of filing, examination,
and maintenance fees and profits of working or use), are valid and
enforceable, and are not subject to any maintenance fees or taxes or
actions falling due within ninety days after the Closing Date.
(ii) To the Knowledge of Seller, any Seller's Company and
HEICO, no Patent has been or is now involved in any interference,
reissue, reexamination, or opposition proceeding. To the Knowledge of
Seller, any Seller's Company and HEICO, there is no potentially
interfering patent or patent application of any third party.
(iii) To the Knowledge of Seller, any Seller's Company and
HEICO, no Patent is infringed or, has been challenged or threatened in
any way except as claimed in the litigation set forth in Part 3.7 of
the Disclosure Letter. To the Knowledge of Seller, any Seller's Company
and HEICO, none of the products manufactured and sold, nor any process
or know-how used, by any Seller's Company infringes or is alleged to
infringe any patent or other proprietary right of any other Person.
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(iv) To the Knowledge of Seller, any Seller's Company and
HEICO, all products made, used, or sold under the Patents have been
marked with the proper patent notice.
(d) Trademarks
(i) To the Knowledge of Seller, any Seller's Company and HEICO
all Marks that have been registered with the United states Patent and
Trademark Office are currently in compliance with all formal legal
requirements (including the timely post-registration filing of
affidavits of use and incontestability and renewal applications), are
valid and enforceable, and are not subject to any maintenance fees or
taxes or actions falling due within ninety days after the Closing Date.
(ii) To the Knowledge of Seller, any Seller's Company and
HEICO, no Xxxx is now involved in any opposition, invalidation, or
cancellation and, no such action its Threatened with respect to any of
the Marks.
(iii) To the Knowledge of Seller, any Seller's Company and
HEICO, there is no potentially interfering trademark or trademark
application of any third party.
(iv) To the Knowledge of Seller, any Seller's Company and
HEICO, no Xxxx is infringed or threatened in any way. To the Knowledge
of Seller, any Seller's Company and HEICO, none of the Marks used by
any Seller's Company infringes or is now alleged to infringe any trade
name, trademark, or service xxxx of any third party.
(e) Copyrights
(i) To the Knowledge of Seller, any Seller's Company and
HEICO, all the Copyrights have been registered and are currently in
compliance with formal legal requirements, are valid and enforceable,
and are not subject to any maintenance fees or taxes or actions falling
due within ninety (90) days after the date of Closing.
(ii) To the Knowledge of Seller, any Seller's Company and
HEICO, no Copyright is infringed or, has been challenged or threatened
in any way. To the Knowledge of Seller, any Seller's Company and HEICO,
none of the subject matter of any of the Copyrights infringes or is
alleged to infringe any copyright of any third party or is a derivative
work based on the work of a third party.
(f) TRADE SECRETS
(i) To the Knowledge of Seller, any Seller's Company and
HEICO, with respect to each Trade Secret, the documentation relating to
such Trade
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Secret is current, accurate, and sufficient in detail and
content to identify and explain it and to allow its full and proper
use.
(ii) To the Knowledge of Seller, any Seller's Company and
HEICO, Seller, HEICO and the Seller's Companies have taken all
reasonable precautions to protect the secrecy, confidentiality, and
value of their Trade Secrets.
(iii) To the Knowledge of Seller, any Seller's Company and
HEICO, one or more of the Seller's Companies has good title and an
absolute (but not necessarily exclusive) right to use the Trade
Secrets. The Trade Secrets are not part of the public knowledge or
literature, and, to the Knowledge of Seller, any Seller's Company and
HEICO, have not been used, divulged, or appropriated either for the
benefit of any Person (other than one or more of the Seller's
Companies) or to the detriment of the Seller's Companies. To the
Knowledge of Seller, any Seller's Company and HEICO, and any of their
Affiliates, no Trade Secret is subject to any adverse claim or has been
challenged or threatened in any way except as claimed in the litigation
set forth in Part 3.7 of the Disclosure Letter.
3.14 DISCLOSURE
No representation or warranty of Seller or HEICO in this Agreement and no
statement in the Disclosure Letter omits to state a material fact necessary to
make the statements herein or therein, in light of the circumstances in which
they were made, not misleading.
3.15 EMPLOYEE BENEFIT MATTERS
(a) No unwritten amendment exists with respect to any Employee Benefit
Plan of the Seller or any Seller's Company. For purposes of this Agreement an
"Employee Benefit Plan" means each employee benefit plan, as such term is
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA").
(b) To the Knowledge of Seller, any Seller's Company and HEICO, each
Employee Benefit Plan of the Seller or any Seller's Company has been
administered and maintained in compliance with all laws, rules and regulations,
except for such noncompliance that would not have a material adverse effect on
the Seller or any Seller's Company. To the Knowledge of Seller, any Seller's
Company and HEICO, no Employee Benefit Plans of the Seller or any Seller's
Company is currently the subject of an audit, investigation, enforcement action
or other similar proceeding conducted by any state or federal agency. No
prohibited transactions (within the meaning of Section 4975 of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder
(the "Code")) have occurred with respect to any Employee Benefit Plan of the
Seller or any Seller's Company. No pending or, to the Knowledge of Seller, any
Seller's Company and HEICO, Threatened, claims, suits or other proceedings exist
with respect to any
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Employee Benefit Plan of the Seller or any Seller's Company other than normal
benefit claims filed by participants or beneficiaries.
(c) Except as disclosed in Part 3.15 of the Disclosure Letter, to the
Knowledge of Seller, any Seller's Company and HEICO, no accumulated funding
deficiency (within the meaning of Section 412 of the Code), whether waived or
unwaived, exists with respect to any Employee Benefit Plan of Seller or any
Seller's Company or any plan sponsored by any member of a "controlled group" (as
defined in Section 414(b) of the Code ("Controlled Group"). With respect to each
Employee Benefit Plan of Seller or any Seller's Company subject to Title IV of
ERISA, to the Knowledge of Seller, any Seller's Company and HEICO, the assets of
each such plan are at least equal in value to the present value of accrued
benefits determined on an ongoing basis as of the date hereof. With respect to
each Employee Benefit Plan of Seller or any Seller's Company described in
Section 501(c)(9) of the Code, to the Knowledge of Seller, any Seller's Company
and HEICO, the assets of each such plan are at least equal in value to the
present value of accrued benefits as of the date hereof. To the Knowledge of
Seller, any Seller's Company and HEICO, neither the Seller or any Seller's
Company or any member of a Controlled Group has any liability to pay excise
taxes with respect to any Employee Benefit Plan of Seller or any Seller's
Company under applicable provisions of the Code or ERISA. To the Knowledge of
Seller, any Seller's Company and HEICO, neither the Seller or any Seller's
Company nor any member of a Controlled Group is or ever has been obligated to
contribute to a multiemployer plan within the meaning of Section 3(37) of ERISA.
(d) To the Knowledge of Seller, any Seller's Company and HEICO, no
reportable event (within the meaning of Section 4043 of ERISA) for which the
notice requirement has not been waived has occurred with respect to any Employee
Benefit Plan of Seller or any Seller's Company subject to the requirements of
Title IV of ERISA.
(e) To the Knowledge of Seller, any Seller's Company and HEICO, neither
the Seller or any Seller's Company has any obligation or commitment to provide
medical, dental or life insurance benefits to or on behalf of any of its
employees who may retire or any of its former employees who have retired from
employment with the Seller or any Seller's Company.
3.16 RELATIONSHIPS WITH RELATED PERSONS
Neither Seller, HEICO or any Related Person of Seller, HEICO or of any Seller's
Company has any material interest in any property (whether real, personal, or
mixed and whether tangible or intangible), used in or pertaining to the Seller's
Companies' businesses except with respect to the ownership of the building which
Northwings leases as its premises. Neither Seller, HEICO or any Related Person
of Seller, HEICO or of any Seller's Company owns (of record or as a beneficial
owner) an equity interest or any other financial or profit interest in, a Person
that has (i) had business dealings or a material financial interest in any
transaction with any Seller's Company other than business dealings or
transactions conducted in the Ordinary Course of Business with the Seller's
Companies
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at substantially prevailing market prices and on substantially prevailing market
terms, or (ii) engaged in competition with any Seller's Company with respect to
any line of the products or services of such Seller's Company (a "Competing
Business") in any market presently served by such Seller's Company.
3.17 BROKERS OR FINDERS
Seller, HEICO and their agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF INVESTOR
4.1 ORGANIZATION AND GOOD STANDING
Investor is a corporation duly organized, validly existing, and in good standing
under the laws of the Federal Republic of Germany.
4.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid, and binding obligation
of Investor, enforceable against Investor in accordance with its terms. Upon the
execution and delivery by Investor of the Shareholders Agreement and the
Research and Development Cooperation Agreement (collectively, the "Investor's
Closing Documents"), the Investor's Closing Documents will constitute the legal,
valid, and binding obligations of Investor, enforceable against Investor in
accordance with their respective terms. Investor has the absolute and
unrestricted right, power, and authority to execute and deliver this Agreement
and the Investor's Closing Documents and to perform its obligations under this
Agreement and the Investor's Closing Documents.
(b) Except as set forth in Schedule 4.2, neither the execution and
delivery of this Agreement by Investor nor the consummation or performance of
any of the Contemplated Transactions by Investor will give any Person the right
to present, delay, or otherwise interfere with any of the Contemplated
Transactions pursuant to:
(i) any provision of Investor's Organizational Documents;
(ii) any resolution adopted by the board of directors or the
stockholders of Investor;
(iii) any Legal Requirements or Order to which Investor may be
subject; or
(iv) any Contract to which Investor is a party or by which
Investor may be bound.
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Except as set forth in Schedule 4.2, Investor is not and will not be required to
obtain any Consent from any Person in connection with the execution and delivery
of this Agreement or the consummation or performance of any of the Contemplated
Transactions.
4.3 CERTAIN PROCEEDINGS
There is no pending Proceeding that has been commenced against Investor and that
challenges, or may have the effect of preventing, delaying, making illegal, or
otherwise interfering with, any of the Contemplated Transactions. To Investor's
Knowledge, no such Proceeding has been Threatened.
4.4 BROKERS OR FINDERS
Investor and its officers and agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement and will indemnify
and hold Seller and HEICO harmless from any such payment alleged to be due by or
through Investor as a result of the action of Investor or its officers or
agents.
4.5 INVESTMENT REPRESENTATION
(a) The Investor understands and acknowledges that (i) the Shares have
not been registered under the Securities Act or any applicable Blue Sky Laws in
reliance upon exemptions provided thereunder and that the Shares may not be
transferred or sold except pursuant to the registration provisions of the
Securities Act or pursuant to an applicable exemption therefrom and pursuant to
applicable Blue Sky Laws and regulations and (ii) the representations and
warranties contained herein are being relied upon by the Seller as a basis for
the exemption of the offer and sale of the Shares to the Investor under the
registration requirements of the Securities Act and any applicable Blue Sky
Laws. The Investor acknowledges that the stock certificate for the Shares shall
bear a restrictive legend as required by applicable U.S. federal securities
laws. The Investor is acquiring the Shares for the Investor's own account, and
not as a nominee for any other party for the purpose of investment and not with
a view to, or for sale in connection with, any "distribution," as such term is
defined in Rule 501 of Regulation D under the Securities Act. The Investor has
had the opportunity to review the books and records of the Seller and has been
furnished or provided access to such relevant information that the Investor has
requested. The Investor is knowledgeable, sophisticated and experienced in
business and financial matters of the type contemplated hereby and is able to
bear the economic risks inherent in its investment in the Seller.
(b) The Investor is an "accredited investor" within the meaning of Rule
501 of Regulation D under the Securities Act. The Investor has not been
organized for the purpose of acquiring the Shares.
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(c) The Investor has considered the risks associated with an investment
in the Shares and has had the opportunity to ask questions of and receive
answers from the officers of the Seller about an investment in the Shares and
the business and financial condition of the Seller sufficient to enable it to
evaluate the risks and merits of its investment in the Seller.
5. INDEMNIFICATION; REMEDIES
5.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE
All representations, warranties, covenants, and obligations in this Agreement,
the Disclosure Letter, and any other certificate or document delivered pursuant
to this Agreement will survive the Closing for a period of eighteen (18) months,
except for the representations and warranties contained in Sections 3.2, 3.3 and
4.2, and in Exhibit 3, which shall survive indefinitely, and the representations
and warranties contained in Section 3.10, which shall survive for the applicable
statute of limitations periods. The right to indemnification, payment of Damages
or other remedy based on such representations, warranties, covenants, and
obligations will not be affected by any investigation conducted with respect to,
or any Knowledge acquired (or capable of being acquired) at any time by
Investor, whether before or after the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation, warranty,
covenant, or obligation. The waiver of any condition based on the accuracy of
any representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
Damages, or other remedy based on such representations, warranties, covenants,
and obligations.
5.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY HEICO
HEICO will indemnify and hold harmless Investor and their respective
representatives, stockholders, controlling persons, and affiliates
(collectively, the "Investor Indemnified Persons") for, and will pay to the
Indemnified Persons based on their ownership of Seller the amount of, any loss,
liability, claim, damage (including incidental and consequential damages),
expense (including (i) costs of investigation and defense and reasonable
attorneys' fees, and (ii) costs of cleanup, containment, or other remediation
with respect to the representation and warranty made in Section 3.10 but (iii)
net of recoveries and all reserves on the books of the Seller's Companies on the
date of this Agreement) or diminution of value, whether or not involving a
third-party claim (collectively, "Damages"), arising, directly or indirectly,
from or in connection with:
(a) any Breach of any representation or warranty made by Seller or
HEICO in this Agreement, the Disclosure Letter, or any other certificate or
document delivered by Seller or HEICO pursuant to this Agreement; and.
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(b) any Breach by Seller or HEICO of any covenant or obligation of same
in this Agreement.
By way of illustration, (i) if Seller incurs $2,000,000 in Damages under this
Section 5.2, HEICO shall pay $300,000 to Investor if Investor owns twenty
percent (20%) of the issued and outstanding shares of common stock of Seller and
(ii) if Seller incurs $2,000,000 in Damages under this Section 5.2, HEICO shall
pay $150,000 to Investor if Investor owns ten percent (10%) of the issued and
outstanding shares of common stock of Seller.
The remedies provided in this Section 5.2 will be the exclusive remedies that
will be available to Investor or the other Investor Indemnified Persons pursuant
to this Agreement.
Notwithstanding the foregoing, the parties have agreed to the terms and
conditions set forth in Exhibit 3 hereof with respect to Prior Litigation (as
defined hereinafter in Exhibit 3).
5.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY INVESTOR
Investor will indemnify and hold harmless Seller and HEICO, and will pay to
Seller, HEICO and their respective representatives, stockholders, controlling
persons and Affiliates ("Seller Indemnified Persons") the amount of any Damages
arising, directly or indirectly, from or in connection with (a) any Breach of
any representation or warranty made by Investor in this Agreement or in any
certificate delivered by Investor pursuant to this Agreement, and (b) any Breach
by Investor of any covenant or obligation of Investor in this Agreement.
The remedies provided in this Section 5.3 will be the exclusive remedies that
will be available to Seller and HEICO or the Seller Indemnified Persons pursuant
to this Agreement.
5.4 LIMITATIONS ON AMOUNT - HEICO
HEICO will have no liability (for indemnification or otherwise) with respect to
the matters described until the total of all Damages with respect to such
matters exceeds $500,000, and then only for the amount by which such Damages
exceed $500,000 except with respect to Damages directly or indirectly incurred
by Investor arising from the Prior Litigation for which such indemnification
shall be exclusively governed by, except for the limitation provided in the next
paragraph of this Section 5.4, the terms and conditions set forth in Exhibit 3.
However, this Section 5.4 will not apply to any intentional Breach by Seller or
HEICO of any covenant or obligation, and HEICO will be liable for all Damages
with respect to such Breaches.
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The indemnification obligations of HEICO under this Agreement, including those
in Exhibit 3, may not exceed the Purchase Price.
5.5 LIMITATIONS ON AMOUNT - INVESTOR
Investor will have no liability (for indemnification or otherwise) with respect
to the matters described in Section 5.3 until the total of all Damages with
respect to such matters exceeds $500,000, and then only for the amount by which
such Damages exceed $500,000. However, this Section 5.5 will not apply to any
intentional Breach by Investor of any covenant or obligation, and Investor will
be liable for all Damages with respect to such Breaches.
The indemnification obligations of Investor under this Agreement may not exceed
$2,000,000.
5.6 PROCEDURE FOR INDEMNIFICATION - THIRD PARTY CLAIMS
(a) Promptly after receipt by an indemnified party under Section 5.2 or
5.3 of notice of the commencement of any Proceeding against it, such indemnified
party (Investor Indemnified Persons or Seller Indemnified Persons, as the case
may be) will, if a claim is to be made against an indemnifying party under such
Section, give notice to the indemnifying party of the commencement of such
claim, but the failure to notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any indemnified party,
except to the extent that the indemnifying party demonstrates that the defense
of such action is prejudiced by the indemnified party's failure to give such
notice.
(b) If any Proceeding referred to in Section 5.6(a) is brought against
an indemnified party and it gives notice to the indemnifying party of the
commencement of such Proceeding, the indemnifying party will, unless the claim
involves Taxes, be entitled to participate in such Proceeding and, to the extent
that it wishes (unless (i) the indemnifying party is also a party to such
Proceeding and the indemnified party determines in good faith that joint
representation would be inappropriate, or (ii) the indemnifying party fails to
provide reasonable assurance to the indemnified party of its financial capacity
to defend such Proceeding and provide indemnification with respect to such
Proceeding), to assume the defense of such Proceeding with counsel satisfactory
to the indemnified party and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will not, as long as it diligently conducts such defense, be
liable to the indemnified party under this Section 5 for any fees of other
counsel or any other expenses with respect to the defense of such Proceeding, in
each case subsequently incurred by the indemnified party in connection with the
defense of such Proceeding. If the indemnifying party assumes the defense of a
Proceeding, (i) it will be conclusively established for purposes of this
Agreement that the claims made in that Proceeding are within the scope of and
subject to indemnification; (ii)
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no compromise or settlement of such claims may be effected by the indemnifying
party without the indemnified party's consent unless (A) there is no finding or
admission of any violation of Legal Requirements or any violation of the rights
of any Person and no effect on any other claims that may be made against the
indemnified party, and (B) the sole relief provided is monetary damages that are
paid in full by the indemnifying party; and (iii) the indemnified party will
have no liability with respect to any compromise or settlement of such claims
effected without its consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does not, within ten
(10) days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will be bound by any determination made in such Proceeding or
any compromise or settlement effected by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party determines
in good faith that there is a reasonable probability that a Proceeding may
adversely affect it or its affiliates other than as a result of monetary damages
for which it would be entitled to indemnification under this Agreement, the
indemnified party may, by notice to the indemnifying party, assume the exclusive
right to defend, compromise, or settle such Proceeding, but the indemnifying
party will not be bound by any determination of a Proceeding so defended or any
compromise or settlement effected without its consent (which may not be
unreasonably withheld).
(d) The parties to this Agreement hereby consent to the exclusive
jurisdiction of the courts identified in Section 6.4 hereof.
5.7 PROCEDURE FOR INDEMNIFICATION - OTHER CLAIMS
A claim for indemnification for any matter not involving a third-party claim may
be asserted by notice to the party from whom indemnification is sought.
5.8 ATTORNEYS' FEES
If any action is taken to enforce or interpret the provisions of this Agreement,
the prevailing party shall be entitled to its reasonable costs and expenses,
including attorneys' fees from the non-prevailing party, in addition to any
other relief to which that party may be entitled.
6. GENERAL PROVISIONS
6.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party to this
Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents, representatives,
counsel, and accountants. Seller and HEICO will
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cause the Seller's Companies not to incur any out-of-pocket expenses in
connection with this Agreement.
6.2 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this Agreement or
the Contemplated Transactions will be issued, if at all, at such time and in
such manner as Investor and Seller shall mutually agree, subject to the parties'
obligations under applicable U.S. laws, as attached hereto as Exhibit 2. Seller,
HEICO and Investor will consult with each other concerning the means by which
the Seller's Companies' employees, customers, and suppliers and others having
dealings with the Seller's Companies will be informed of the Contemplated
Transactions, and Investor will have the right to be present for any such
communication.
6.3 NOTICES
All notices, consents, waivers, and other communications under this Agreement
must be in writing and will be deemed to have been duly given when (a) delivered
by hand (with written confirmation of receipt), (b) sent by telecopier (with
written confirmation of receipt), provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and telecopier numbers set forth below
(or to such other addressees and telecopier numbers as a party may designate by
notice to the other parties):
Seller: HEICO Aerospace Holdings Corporation
0000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
HEICO: HEICO Corporation
000 Xxxxxxxx Xxx Xxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Facsimile No.: (305) 374-6742
0000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxx
Facsimile No.: (000) 000-0000
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with a copy to: Xxxxxxxxx Traurig
0000 Xxxxxxxx Xxx.
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
Investor: Lufthansa Technik AG
Dept. HAM TV/J
P. O. Xxx 00 00 00
X-00000 Xxxxxxx, Xxxxxxx
Attention: Xxxxxxxx Xxxxxxxx
Facsimile No.: (00-00) 0000-0000
with a copy to: Xxxxx & XxXxxxxx
Xxxxxxx Tower, Suite 1600
000 Xxxxxxxx Xxx.
Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Nation
Facsimile No.: (000) 000-0000
6.4 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based on any
right arising out of, this Agreement shall be brought against any of the parties
exclusively in the courts of the State of Florida, County of Dade, or, if it has
or can acquire jurisdiction, in the United States District Court for the
Southern District of Florida, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world pursuant to the rules of the court
under which the action is filed in Dade County, Florida.
6.5 FURTHER ASSURANCES
The parties agree (a) to furnish upon request to each other such further
information, (b) to execute and delivery to each other such other documents, and
(c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and the
documents referred to in this Agreement.
6.6 WAIVER
The rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in exercising any
right, power,
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or privilege under this Agreement or the documents referred to in this Agreement
will operate as a waiver of such right, power, or privilege, and no single or
partial exercise of any such right, power, or privilege will preclude any other
or further exercise of such right, power, or privilege or the exercise of any
other right, power, or privilege. To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing signed
by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.
6.7 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties with respect
to its subject matter and constitutes (along with the documents referred to in
this Agreement) a complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter. This Agreement may not
be amended except by a written agreement executed by the party to be charged
with the amendment.
6.8 DISCLOSURE LETTER
(a) The disclosures in the Disclosure Letter relate to the
representations and warranties in any of the Sections of the Agreement.
(b) In the event of any inconsistency between the statements in the
body of this Agreement and those in the Disclosure Letter (other than an
exception expressly set forth as such in the Disclosure Letter with respect to
the representations or warranties), the statements in the body of this Agreement
will control.
6.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
Neither party may assign any of its rights under this Agreement without the
prior consent of the other party except that either party may assign any of its
rights under this Agreement to any wholly owned subsidiary thereof. Subject to
the preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions are
for the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
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6.10 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by any court
of competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
6.11 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to "Section"
or "Sections" refer to the corresponding Sections of this Agreement. All words
used in this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word "including"
does not limit the preceding words or terms.
6.12 GOVERNING LAW
This Agreement will be governed by the laws of the State of Florida without
regard to conflicts of laws principles.
6.13 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
Investor: Seller:
By: By:
--------------------------- ----------------------------
Name: Name:
------------------------- --------------------------
Title: Title:
------------------------ -------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
HEICO Corporation
By:
---------------------------
Name:
-------------------------
Title:
------------------------
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