1
EXHIBIT 10.19
STOCK PURCHASE AGREEMENT
by and among
AVIATION GROUP, INC.,
CASPER AIR SERVICE,
and
ALL OF THE SHAREHOLDERS OF
CASPER AIR SERVICE
dated as of
April 18, 1997
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Terms . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.3 Other Definitional Provisions . . . . . . . . . . . . . . . . 6
ARTICLE II THE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Purchase and Sale of Casper Stock . . . . . . . . . . . . . . 6
ARTICLE III PAYMENT OF CONSIDERATION . . . . . . . . . . . . . . . . . . . 7
3.1 Casper Purchase Price . . . . . . . . . . . . . . . . . . . . 7
3.2 Method of Payment of Cash . . . . . . . . . . . . . . . . . . 7
3.3 Determination of Shares of Group Stock . . . . . . . . . . . . 7
3.4 Effect of Payment . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV REPRESENTATIONS AND WARRANTIES AS TO CASPER . . . . . . . . . 8
4.1 Existence and Good Standing . . . . . . . . . . . . . . . . . 8
4.2 Capitalization of Casper . . . . . . . . . . . . . . . . . . . 8
4.3 Authorization and Validity of Agreement . . . . . . . . . . . 8
4.4 Consents and Approvals; No Violations . . . . . . . . . . . . 9
4.5 Receivables and Payables . . . . . . . . . . . . . . . . . . . 9
4.6 Financial Statements; No Material Adverse Change . . . . . . . 9
4.7 Warranty Claims . . . . . . . . . . . . . . . . . . . . . . . 10
4.8 Title to Properties; Encumbrances; Condition . . . . . . . . . 10
4.9 Real Property . . . . . . . . . . . . . . . . . . . . . . . . 10
4.10 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.11 Contracts and Commitments . . . . . . . . . . . . . . . . . . 11
4.12 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.13 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.15 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.16 Intellectual Property . . . . . . . . . . . . . . . . . . . . 13
4.17 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . 13
4.18 Employment Relations . . . . . . . . . . . . . . . . . . . . . 13
4.19 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . 14
4.20 Environmental Laws and Regulations . . . . . . . . . . . . . . 15
4.21 Interests in Customers and Suppliers . . . . . . . . . . . . . 16
4.22 Compensation of Employees . . . . . . . . . . . . . . . . . . 16
4.23 Suppliers and Customers . . . . . . . . . . . . . . . . . . . 16
4.24 Absence of Changes . . . . . . . . . . . . . . . . . . . . . . 16
4.25 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.26 Broker's or Finder's Fees . . . . . . . . . . . . . . . . . . 17
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4.27 Government Contracts . . . . . . . . . . . . . . . . . . . . . 18
4.28 Copies of Documents . . . . . . . . . . . . . . . . . . . . . 18
4.29 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.30 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE V SECURITIES REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 18
5.1 Authorization and Validity of Agreement . . . . . . . . . . . 18
5.2 Securities Laws . . . . . . . . . . . . . . . . . . . . . . . 19
5.3 Accredited Investor . . . . . . . . . . . . . . . . . . . . . 19
5.4 Knowledge and Experience . . . . . . . . . . . . . . . . . . . 19
5.5 Investment Purpose . . . . . . . . . . . . . . . . . . . . . . 19
5.6 Holding Period . . . . . . . . . . . . . . . . . . . . . . . . 19
5.7 Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF GROUP . . . . . . . . . . . 20
6.1 Existence and Good Standing; Power and Authority . . . . . . . 20
6.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 20
6.3 No Violations . . . . . . . . . . . . . . . . . . . . . . . . 20
6.4 Broker's or Finder's Fees . . . . . . . . . . . . . . . . . . 21
6.5 Receivables and Payables . . . . . . . . . . . . . . . . . . . 21
6.6 Financial Statements; No Material Adverse Change . . . . . . . 21
6.7 Warranty Claims . . . . . . . . . . . . . . . . . . . . . . . 21
6.8 Title to Properties; Encumbrances; Condition . . . . . . . . . 21
6.9 Real Property . . . . . . . . . . . . . . . . . . . . . . . . 22
6.10 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.11 Contracts and Commitments . . . . . . . . . . . . . . . . . . 22
6.12 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.13 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.15 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.16 Intellectual Property . . . . . . . . . . . . . . . . . . . . 24
6.17 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . 25
6.18 Employment Relations . . . . . . . . . . . . . . . . . . . . . 25
6.19 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . 25
6.20 Environmental Laws and Regulations . . . . . . . . . . . . . . 25
6.21 Interests in Customers and Suppliers . . . . . . . . . . . . . 26
6.22 Compensation of Employees . . . . . . . . . . . . . . . . . . 26
6.23 Suppliers and Customers . . . . . . . . . . . . . . . . . . . 26
6.24 Absence of Changes . . . . . . . . . . . . . . . . . . . . . . 26
6.25 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.26 Government Contracts . . . . . . . . . . . . . . . . . . . . . 27
6.27 Copies of Documents . . . . . . . . . . . . . . . . . . . . . 27
6.28 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 27
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ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF
CASPER AND THE CASPER SHAREHOLDERS . . . . . . . . . . . . . . 27
7.1 Truth of Representations and Warranties . . . . . . . . . . . 27
7.2 Performance of Agreements . . . . . . . . . . . . . . . . . . 28
7.3 No Litigation Threatened . . . . . . . . . . . . . . . . . . . 28
7.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.5 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.6 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . 28
7.7 Registration of Group Stock . . . . . . . . . . . . . . . . . 28
ARTICLE VIII CONDITIONS TO GROUP'S OBLIGATIONS . . . . . . . . . . . . . . 28
8.1 Truth of Representations and Warranties . . . . . . . . . . . 29
8.2 Performance of Agreements . . . . . . . . . . . . . . . . . . 29
8.3 No Litigation Threatened . . . . . . . . . . . . . . . . . . . 29
8.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.5 Due Diligence . . . . . . . . . . . . . . . . . . . . . . . . 29
8.6 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . 29
8.7 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.8 Payment of Receivables . . . . . . . . . . . . . . . . . . . . 30
8.9 Reinstatement of FBO Agreement . . . . . . . . . . . . . . . . 30
ARTICLE IX COVENANTS OF CASPER AND THE CASPER SHAREHOLDERS . . . . . . . 30
9.1 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.2 Conduct of Business . . . . . . . . . . . . . . . . . . . . . 30
9.3 Negative Covenants of Casper and the Casper Shareholders . . . 30
9.4 Exclusive Dealing . . . . . . . . . . . . . . . . . . . . . . 31
9.5 Review of the Assets . . . . . . . . . . . . . . . . . . . . . 32
9.6 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.7 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 32
9.8 ESOP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.9 Airport FBO Agreement . . . . . . . . . . . . . . . . . . . . 33
9.10 Payable to Y.E. Werner . . . . . . . . . . . . . . . . . . . . 33
ARTICLE X COVENANTS OF GROUP . . . . . . . . . . . . . . . . . . . . . . 34
10.1 Cooperation by Group . . . . . . . . . . . . . . . . . . . . . 34
10.2 Books and Records; Personnel . . . . . . . . . . . . . . . . . 34
10.3 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 34
10.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.5 Registration of Group Stock for Resale . . . . . . . . . . . . 34
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ARTICLE XI THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.1 Time and Place . . . . . . . . . . . . . . . . . . . . . . . . 35
11.2 Obligations of Casper and the Casper Shareholders . . . . . . 35
11.3 Group's Obligations . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE XII TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . 37
12.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 37
12.2 Remedies Upon Default or Failure to Close . . . . . . . . . . 38
12.3 Effect on Obligations . . . . . . . . . . . . . . . . . . . . 38
ARTICLE XIII SURVIVAL AND INDEMNIFICATION . . . . . . . . . . . . . . . . . 39
13.1 Indemnification of the Casper Shareholders . . . . . . . . . . 39
13.2 Indemnification of Group by Casper Shareholders . . . . . . . 39
13.3 Demands . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
13.4 Right to Contest and Defend . . . . . . . . . . . . . . . . . 40
13.5 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.6 Right to Participate . . . . . . . . . . . . . . . . . . . . . 41
13.7 Payment of Damages . . . . . . . . . . . . . . . . . . . . . . 41
13.8 Survival of Representations and Warranties . . . . . . . . . . 41
ARTICLE XIV MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 41
14.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
14.2 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 42
14.3 Entire Agreement; Amendments and Waivers . . . . . . . . . . . 42
14.4 Binding Effect and Assignment . . . . . . . . . . . . . . . . 43
14.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 43
14.6 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
14.7 Execution . . . . . . . . . . . . . . . . . . . . . . . . . . 43
14.8 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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SCHEDULES
Casper Schedules
Schedule 4.2 Casper Stock
Schedule 4.4 Consents and Approvals
Schedule 4.5 Receivables and Payables
Schedule 4.6 Material Adverse Change
Schedule 4.7 Warranty Claims
Schedule 4.8 Title to Properties
Schedule 4.10 Leases
Schedule 4.11 Contracts
Schedule 4.12 Permits
Schedule 4.13 Litigation
Schedule 4.14 Taxes
Schedule 4.15 Insurance
Schedule 4.16 Intellectual Property
Schedule 4.19 Casper Plans
Schedule 4.20 Environmental
Schedule 4.21 Interests in Customers and Suppliers
Schedule 4.22 Employees
Schedule 4.23 Suppliers and Customers
Schedule 4.24 Absence of Changes
Schedule 4.27 Government Contracts
Schedule 4.30 Accounts
Group Schedules
Schedule 6.2 Group Securities
Schedule 6.5 Receivables and Payables
Schedule 6.6 No Material Adverse Change
Schedule 6.7 Warranty Claims
Schedule 6.8 Title to Properties
Schedule 6.10 Leases
Schedule 6.11 Contracts
Schedule 6.12 Permits
Schedule 6.13 Litigation
Schedule 6.14 Taxes
Schedule 6.15 Insurance
Schedule 6.16 Intellectual Property
Schedule 6.20 Environmental
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Schedule 6.21 Interests in Customers and Suppliers
Schedule 6.22 Employees
Schedule 6.23 Suppliers and Customers
Schedule 6.24 Absence of Changes
Schedule 6.26 Government Contracts
EXHIBITS
Exhibit A Consulting Agreement
Exhibit B Opinion to be delivered by Xxxxxxxxx & Xxxxxxxxx,
L.L.P.
Exhibit C Opinion to be delivered by Brown, Drew, Xxxxxx &
Xxxxxxxx
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XXXXX XXXXXXXX AGREEMENT
This Stock Purchase Agreement together with the exhibits and schedules
referenced herein and attached hereto ("Agreement"), dated as of April 18,
1997, is by and among Aviation Group, Inc., a Texas corporation ("Group"),
Casper Air Service, a Wyoming corporation ("Casper"), and the shareholders of
Casper listed on Schedule 4.2 to this Agreement (each a "Casper Shareholder"
and collectively the "Casper Shareholders").
W I T N E S S E T H:
WHEREAS, the Casper Shareholders own all of the issued and outstanding
shares of capital stock of Casper (the "Casper Stock"); and
WHEREAS, the Casper Shareholders desire to sell to Group, and Group
desires to purchase from such Casper Shareholders, the Casper Stock, all in
accordance with the terms and conditions set forth herein;
NOW, THEREFORE, for and in consideration of the foregoing premises, the
mutual promises and covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used herein, the following terms have the
meanings set forth below:
"Affiliate": with respect to any Person, any other Person directly or
indirectly controlling (including but not limited to all directors and officers
of such Person), controlled by, or under direct or indirect common control with
such Person.
"Agreement": this Stock Purchase Agreement, as amended from time to
time as provided herein, and all exhibits, schedules and ancillary documents
hereto, except where the context clearly indicates otherwise.
"Airport FBO Agreement": as defined in Section 9.9.
"Books and Records": all books, records, books of account, files and
data (including customer and supplier lists), catalogs, brochures, sales
literature, promotional material, certificates and other documents used in or
associated with the conduct of the Business or the ownership of the assets of
Casper, including personnel records and files.
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"Business": the aircraft and airline maintenance and service operations
business of Casper, the headquarters of which are in Casper, Wyoming, including
manufacturing, re-manufacturing, repair, and parts operation.
"Business Day": any day excluding Saturday, Sunday and any day on which
banks in Dallas, Texas are authorized or required by law or other governmental
action to close.
"Casper": as defined in the preamble of this Agreement.
"Casper Balance Sheet": as defined in Section 4.6.
"Casper Balance Sheet Date": as defined in Section 4.6.
"Casper Controlled Group": as defined in Section 4.19.
"Casper Financial Statements": as defined in Section 4.6.
"Casper Plan": as defined in Section 4.19.
"Casper Plan Fiduciary": as defined in Section 4.19.
"Casper Purchase Price": as defined in Section 3.1.
"Casper Shareholders": as defined in the preamble of this Agreement.
"Casper Stock": as defined in the recitals of this Agreement.
"Claim": as defined in Section 13.4
"Closing": as defined in Section 11.1.
"Closing Date": as defined in Section 11.1.
"Code": the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code as in effect at the date of this
Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"Consulting Agreement": the Consulting Agreement, to be executed by
Xxxxxx and Group at Closing, in the form attached as Exhibit A hereto.
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"Contract": any written or oral contract, agreement or instrument
relating to the Business, including, without limitation, supply contracts,
customer agreements, any mortgages, leases of personal property, deeds of
trust, notes or guarantees, pledges, liens, or conditional sales agreements to
which the Person referred to is a party or by which any of its assets may be
bound, but excluding Leases and Employee Benefit Plans.
"Damages": as defined in Section 13.1.
"Deposit": the $25,000 good faith deposit previously paid by Group to
Casper.
"Encumbrances": liens, security interests, pledges, proxies,
shareholder agreements, voting agreements or trusts, options, rights of first
refusal, easements, mortgages, deeds of trust, rights-of-way, restrictions,
encroachments, licenses, leases, or any other encumbrances, claims and other
restrictions or limitations on the use or ownership of real or personal
property or irregularities in title thereto.
"Environmental Claim": any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violations, investigations or proceedings relating in any way
to any Environmental Law or any permit issued under any such Environmental Law
(cumulatively and for purposes of this definition, "Environmental Claims"),
including without limitation (i) any and all Environmental Claims by
governmental authorities for enforcement, cleanup, removal, remedial or other
actions or damages pursuant to any applicable Environmental Law, and (ii) any
and all Environmental Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief relating to
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment.
"Environmental Law": any federal, state or local statute, law, rule,
regulation, ordinance, code, policy or rule of common law and in each case as
amended and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, relating to
Hazardous Materials, the environment or health relating to or arising from
environmental conditions, including without limitation the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended 42
U.S.C. Section 9601 et seq.; the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. Section 5101 et seq.; the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. Section 6901 et seq.; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, 42
U.S.C. Section 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section
300f et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.;
and relevant state and local laws.
"Equipment": airplanes; tools, devices, and other equipment used to
repair and maintain airplanes; and all other tools, devices and equipment
owned and used by Casper in the conduct of the Business.
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"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA as in effect at the date
of this Agreement and any subsequent provisions of ERISA amendatory thereof,
supplemental thereto or substituted therefor.
"ESOP": the Casper Air Service Employee Stock Ownership Plan and Trust.
"Extension Fee": as defined in Section 12.1.2.
"FAA": the Federal Aviation Administration.
"Final Termination Date": as defined in Section 12.1.2.
"GAAP": generally accepted accounting principles consistently applied
(as such term is used in the American Institute of Certified Public Accountants
Professional Standards) as of the date of any applicable financial statement or
calculation.
"Group": as defined in the preamble of this Agreement.
"Group Balance Sheet": as defined in Section 6.6.
"Group Balance Sheet Data": as defined in Section 6.6.
"Group Financial Statements": as defined in Section 6.6.
"Group Indemnitees": as defined in Section 13.2.
"Group Stock": the common stock of Group, par value $0.01 per share.
"Hazardous Materials": any chemicals, materials or substances defined
as or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants," "pollutants,"
"regulated substances" or words of similar import under any applicable
Environmental Law, including but not limited to any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, radon gas and urea formaldehyde foam insulation, transformers or other
equipment that contain dielectric fluid containing levels of polychlorinated
biphenyls.
"IPO": the initial public offering by Group of Group Stock pursuant to
Group's registration statement on Form SB-2.
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"Intellectual Property": domestic and foreign patents, patent
applications, registered and unregistered trademarks, service marks, trade
names and logos, registered and unregistered copyrights, computer programs,
data bases, trade secrets, methods, designs, processes, procedures, proprietary
information and any other intangible property used in or associated with the
conduct of a business and the ownership of any assets of a Person, including
all rights to any such property which is owned by and licensed from others.
"Inventory": all merchandise, supplies, stock in trade and other such
assets of a Person held for sale or lease in the ordinary course of its
business or to be furnished under contracts of service or held as work in
process or to be used or consumed in its business.
"IRS Qualification Letter": as defined in Section 9.8.3.
"Leases": any and all written and oral contracts, agreements, and
commitments regarding the lease of real property.
"Material Adverse Effect": a material adverse effect, determined in
accordance with GAAP, on the assets, liabilities, business, condition
(financial or otherwise), results of operations or prospects of Casper.
Without limiting the foregoing, any event or series of events that constitutes
a material adverse financial impact on Casper of $50,000 or more for any single
event or $100,000 or more in the aggregate, shall be deemed to constitute a
Material Adverse Effect.
"Other Shareholders": Xxxx X. Xxxxxx and Xxxxxxx Xxxxxx.
"Ownership Percentage": the percentage of the outstanding stock of
Casper owned by a Casper Shareholder, determined as of the Closing.
"Permits": any license, permit, franchise, consent, approval or
authority granted by any Person.
"Permitted Encumbrances": (i) Encumbrances consisting of easements,
permits and other restrictions or limitations on the use of real property or
irregularities in title thereto that do not materially detract from the value
of, or materially impair the use of, such property by Casper in the operation
of the Business, or (ii) Encumbrances for current taxes, assessments or
governmental charges or levies on property not yet due and payable.
"Person": any individual, partnership, joint venture, corporation,
trust, unincorporated organization, government or other department or agency
thereof or any other legally recognized entity.
"Qualified Plan": as defined in Section 4.19.
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"Schedules": the schedules of the parties in the context and as
referenced throughout this Agreement.
"Shareholder Indemnitees": as defined in Section 13.1.
"Subsidiary": Casper Flying Service, a Wyoming corporation.
"Tax": any net income, alternative or add-on minimum tax, advance,
corporation, gross income, gross receipts, sales, use, ad valorem, franchise,
profits, license, value added, withholding, payroll, employment, excise, stamp
or occupation tax, governmental fee or other like assessment or charge of any
kind whatsoever, together with any interest or any penalty imposed by any
governmental authority with respect thereto, and any liability for such amounts
as a result either of being a member of an affiliated group or of a contractual
obligation to indemnify any other entity.
"Xxxxxx": Xxxx Xxxxxx, Chairman of the Board of Casper.
1.2 Other Terms. Other terms may be defined elsewhere in the text of
this Agreement.
1.3 Other Definitional Provisions.
1.3.1 The words "hereof," "herein" and "hereunder," and words of
similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not any particular provision of this Agreement.
1.3.2 The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
1.3.3 The terms defined in the neuter or masculine gender shall
include the feminine, neuter and masculine genders, unless the context
clearly indicates otherwise.
1.3.4 Reference to the "best knowledge" of a Person or words of
similar import shall mean the actual or constructive best knowledge of
such Person after reasonable due diligence by such Person as to the
facts and circumstances addressed.
ARTICLE II
THE TRANSACTIONS
2.1 Purchase and Sale of Casper Stock. Subject to the terms and
conditions of this Agreement, Group agrees to purchase from the Casper
Shareholders, and the Casper Shareholders agree to sell, convey, transfer,
assign and deliver to Group, the Casper Stock, free and clear of all
Encumbrances, on the Closing Date against the receipt by the Casper
Shareholders of the Casper Purchase Price, as detailed below.
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ARTICLE III
PAYMENT OF CONSIDERATION
3.1 Casper Purchase Price. As payment for the Casper Stock sale
contemplated herein, Group shall pay and deliver to the Casper Shareholders at
the Closing total consideration of $2,050,000 in cash and shares of Group
Stock, as set forth below, less (i) the Deposit and (ii) any Extension Fee
(collectively said $2,050,000, as reduced by said amounts listed in clauses (i)
through (ii), is referred to as the "Casper Purchase Price"):
3.1.1 to Xxxxxx, the product of Xxxxxx'x Ownership Percentage
times the Casper Purchase Price, which shall be paid or delivered 56% in
the form of cash and 44% in the form of Group Stock;
3.1.2 to ESOP, the product of the ESOP's Ownership Percentage
times the Casper Purchase Price, which shall be paid or delivered 56% in
the form of cash and 44% in the form of Group Stock; and
3.1.3 to each of the Other Shareholders, the product of such
Other Shareholder's Ownership Percentage times the Casper Purchase
Price, which shall be paid or delivered all in the form of cash.
3.2 Method of Payment of Cash. The cash payments to each of the
Casper Shareholders shall be paid at the Closing by wire transfer of
immediately available funds to the bank accounts of the Casper Shareholders,
which must be designated in writing by each of them to Group not later than
three (3) business days prior to the Closing Date. If such designation is not
timely made by a payee, such cash payment to the payee may be made by Group's
check.
3.3 Determination of Shares of Group Stock. The number of shares of
Group Stock to be delivered to Xxxxxx or the ESOP shall equal the dollar amount
of Group Stock payable to Xxxxxx or the ESOP (as calculated under Section 3.1)
divided by (i) the initial public offering price of Group Stock if the Closing
occurs concurrent with or after the closing of the IPO, or (ii) $8 if the
Closing occurs before the closing of the IPO.
3.4 Effect of Payment. Except as provided in Section 10.5(b), each
of the Casper Shareholders agrees that delivery of the Casper Purchase Price
pursuant to this Article III shall constitute the complete consideration for
the Casper Stock and shall be in full satisfaction of all of such Casper
Shareholder's rights (including, without limitation, any associated preemptive
rights) in or to any of the Casper Stock. Under Section 10.5(b), Xxxxxx and
the ESOP may be entitled to receive additional consideration from Group under
certain circumstances following the Closing.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES AS TO XXXXXX
Xxxxxx and each of the Casper Shareholders (other than Xxxx Xxxxxx and
Xxxxxxx Xxxxxx) hereby represent and warrant, jointly and severally, to Group
as follows:
4.1 Existence and Good Standing. Each of Casper and the Subsidiary
is a corporation duly organized and validly existing under the laws of the
State of Wyoming. Each of Casper and the Subsidiary has the power and
authority to own, lease and operate its property and to carry on its business
as now being conducted and to own or lease the assets owned or leased by it.
Each of Casper and the Subsidiary is duly qualified or licensed to do business
in each jurisdiction in which the character or location of the properties owned
or leased by it or the nature of the business conducted by it makes such
qualification necessary and the absence of which would have a Material Adverse
Effect.
4.2 Capitalization of Casper.
4.2.1 The entire authorized capital stock of Casper consists of
10,000,000 shares of common stock, no par value per share, of which
181,533 shares are issued and outstanding, fully paid and nonassessable
and held beneficially and of record by the Casper Shareholders as set
forth on Schedule 4.2. Except as set forth on Schedule 4.2, such
outstanding shares are owned beneficially and of record by the Casper
Shareholders, free and clear of all Encumbrances and rights of others.
4.2.2 The shares of Casper Stock held beneficially and of record
by the Casper Shareholders represent all of the issued and outstanding
capital stock of Casper. There are no outstanding subscriptions,
options, convertible securities, indebtedness convertible into equity
securities, warrants, calls or rights of any kind (issued, contracted
for, granted by, or binding upon Casper) to purchase or otherwise
acquire any security of or equity interest in Casper. The Casper
Shareholders have full legal right to transfer the Casper Stock pursuant
to the terms of this Agreement and will, upon delivery of the Casper
Stock to Group pursuant to the terms hereof, transfer to Group good and
valid title to the Casper Stock free and clear of all liens, security
interests, claims, charges, Encumbrances, rights, options to purchase,
voting trusts or other voting agreements and calls and commitments of
every kind affecting the Casper Stock.
4.3 Authorization and Validity of Agreement. Casper has full
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement by Casper,
and the consummation of the transactions contemplated hereby, have been duly
authorized and approved by the Board of Directors of Casper and no other action
on the part of Casper is necessary to authorize the execution, delivery and
performance of this Agreement by
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Casper and the consummation of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Casper and is a valid and
binding obligation of Casper enforceable against Casper in accordance with its
terms, except to the extent that its enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles.
4.4 Consents and Approvals; No Violations. The execution, delivery
and performance of this Agreement by Casper and the Casper Shareholders and the
consummation by Casper and the Casper Shareholders of the transactions
contemplated hereby will not, with or without the giving of notice or the lapse
of time or both: (i) violate, conflict with, or result in a breach or default
under any provision of the charter or bylaws of Casper; (ii) to the best
knowledge of Casper and Casper Shareholders, violate any statute, ordinance,
rule, regulation, order, judgment or decree of any court or of any governmental
or regulatory body, agency or authority applicable to Casper or by which any of
its properties or assets may be bound; (iii) to the best knowledge of Casper
and Casper Shareholders, require any filing by Casper with, or require Casper
to obtain any permit, consent or approval of, or require Casper or the Casper
Shareholders to give any notice to, any governmental or regulatory body, agency
or authority or any third party other than as set forth on Schedule 4.4
attached hereto; or (iv) other than as set forth on Schedule 4.4 attached
hereto, result in a violation or breach by Casper of, conflict with, constitute
(with or without due notice or lapse of time or both) a default by Casper (or
give rise to any right of termination, cancellation, payment or acceleration)
under or result in the creation of any Encumbrance upon any of the properties
or assets of Casper under any of the terms, conditions, or provisions of any
note, bond, mortgage, indenture, license, franchise, Permit, Contract, Lease,
franchise agreement or other instrument or obligation to which Casper is a
party, or by which it or any of its properties or assets may be bound, except
in the case of clauses (ii), (iii) and (iv) of this Section 4.4 for such
violations, consents, breaches, defaults, terminations and accelerations which
in the aggregate would not have a Material Adverse Effect.
4.5 Receivables and Payables. Schedule 4.5 lists all notes
receivable, notes payable, accounts receivable and accounts payable of Casper.
Except as reflected on Schedule 4.5, all notes receivable and accounts
receivable of Casper are, and such notes and accounts receivable at the Closing
Date will be, (i) bona fide claims against debtors for debts, sales, work
performed or other charges, (ii) to the best knowledge of Casper and the Casper
Shareholders, subject to no defenses, set-offs or counterclaims, and (iii) to
the best knowledge of Casper and the Casper Shareholders, collectible. Except
as reflected on Schedule 4.5, all notes payable and accounts payable of Casper
are, and such notes and accounts payable at the Closing Date will be, bona fide
claims by creditors for debts, sales, work performed, or other expenses
incurred by Casper.
4.6 Financial Statements; No Material Adverse Change. Casper has
heretofore furnished Group with the financial statements of Casper as of
January 31, 1997, in the form of a balance sheet (the "Casper Balance Sheet"),
and an income statement and statement of cash flows for the nine-month period
then ended(together with the Balance Sheet, the "Casper Financial Statements").
Casper has also heretofore furnished Group with the audited financial
statements of Casper as of and
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for the fiscal year ended April 30, 1996 (the "1996 Financials"). The 1996
Financials and the Casper Financial Statements have been prepared in accordance
with GAAP and fairly present in all material respects the financial position of
Casper at the dates thereof and the results of operations and cash flow of
Casper for the periods indicated. Except as set forth on Schedule 4.6 attached
hereto or for changes that would not have a Material Adverse Effect, since
January 31, 1997 (the "Casper Balance Sheet Date"), there has been no change in
the assets or liabilities, or in the business or condition, financial or
otherwise, or in the results of operations, of Casper.
4.7 Warranty Claims. Except as set forth on Schedule 4.7 attached
hereto, as of the date hereof, there are no warranty claims relating to
products at any time sold or services at any time performed by Casper pending
or, to the best knowledge of Casper and the Casper Shareholders, threatened,
which would have a Material Adverse Effect.
4.8 Title to Properties; Encumbrances; Condition. Except as set
forth on Schedule 4.8 or on any of the other Schedules hereto and except for
properties and assets reflected in the Casper Financial Statements or acquired
since the Casper Balance Sheet Date that have been sold or otherwise disposed
of in the ordinary course of business, Casper owns outright, and has, and shall
at the Closing have, full legal and beneficial title to all of its assets, in
each case subject to no Encumbrances except for Permitted Encumbrances. The
assets of Casper consist of all properties and assets necessary to operate the
Business in the manner it has been operated prior to the date hereof. Except
as set forth on Schedule 4.8, each asset of Casper, including without
limitation all Equipment, is in good operating condition and repair, subject to
ordinary wear and tear, and, to the best knowledge of Casper and the Casper
Shareholders, has been maintained in accordance with the manufacturers'
specifications, and each asset is, to the best knowledge of Casper and the
Casper Shareholders, in compliance with all applicable federal and state laws
and regulations. Casper's Inventory consists of items of a quality and
quantity usable or saleable in the regular course of business of Casper.
4.9 Real Property. Casper leases three buildings, which are
identified by Casper as Xxxxxxx 0, 0 xxx 0, xxxx xxx Xxxxxxx Xxxxxx
International Airport Authority (the "Airport"). Casper also leases land from
the Airport on which Casper has constructed and currently owns (i) two
buildings, which constitute Casper's main offices and operating facility and
are identified as Xxxxxxx 0 0/0 xxx 0 0/0, xxx (xx) three groups of "T hangars"
for storage of airplanes. All of the buildings, structures and real property
appurtenances owned or leased by Casper or used in connection with the
operation of the Business (the "Casper Operating Facilities") are in good
operating condition, and in a state of good maintenance and repair, subject to
ordinary wear and tear, except where such condition or maintenance would not
have a Material Adverse Effect. The Casper Operating Facilities have adequate
rights of ingress and egress for operation of the Business in the ordinary
course. No condemnation or similar proceeding is pending or, to the best
knowledge of Casper and the Casper Shareholders, threatened, that would
preclude or impair the use of the Casper Operating Facilities as used in the
prior operation of the Business.
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4.10 Leases. Schedule 4.10 attached hereto contains an accurate and
complete list of all Leases to which Casper is a party (as lessee or lessor).
Each Lease set forth on Schedule 4.10 is, to the best knowledge of Casper and
the Casper Shareholders, in full force and effect; there is no existing default
under any of such Leases on the part of Casper or, to the best of Casper's and
the Casper Shareholders' knowledge, any other party thereto.
4.11 Contracts and Commitments. Except as specifically identified on
Schedule 4.11:
4.11.1 Casper is not a party to or bound by any loan, credit or
similar agreement or any indenture, trust agreement or other instrument
relating to any issue of bonds, debentures, notes or other evidences of
indebtedness or creating any lien, encumbrance or charge on any of
Casper's assets;
4.11.2 There are no bonus, pension, profit-sharing, retirement,
stock option, stock purchase, deferred compensation, hospitalization or
insurance plans, or vacation or severance pay plans, or any other plans
or arrangements providing benefits to officers, agents or employees of
Casper;
4.11.3 Casper does not have any collective bargaining agreement
with any labor union or association or any employment contract or other
binding agreement relating to the employment of any of its employees;
4.11.4 Casper is not a party to any joint venture agreement or
other agreement involving the sharing of profits relating to the
Business and/or its assets;
4.11.5 Casper is not a party to any (i) contracts or commitments
for capital expenditures outside the ordinary course of business or
involving obligations on the part of Casper in amounts inconsistent with
those incurred by Casper in the ordinary course of business in
accordance with Casper's prior operation of the Business, (ii) lease
under which personal property is leased to or from Casper and which is
not cancelable by Casper without penalty upon notice of thirty days or
less or pursuant to which rentals payable by or to Casper, either
individually or in the aggregate, substantially exceed amounts
previously incurred by Casper in the ordinary course of business, (iii)
continuing contract for the future purchase of Inventory or other
materials, supplies, machinery or equipment in excess of the
requirements of the Business conducted in the ordinary course, (iv)
other contract or agreement which involves an obligation on the part of
Casper, either individually or in the aggregate, in excess of amounts
previously incurred by Casper in the ordinary course of business or, (v)
agreement not made in the ordinary course of business;
4.11.6 There are no agreements, notes, mortgages, leases,
franchises, permits, orders, judgments or decrees to which Casper is a
party or by which Casper or any of its assets are bound, which contain
any provision which would (i) be violated or contravened by, (ii) cause
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acceleration of any obligation of Casper as a result of, or (iii) cause
or permit the forfeiture of any right or benefit of Casper by reason of,
the execution or performance of this Agreement;
4.11.7 Casper is not party to any Contract limiting the freedom
of Casper to engage in any line of business or to compete with any
Person;
4.11.8 Casper is not a party to any agreement which involves
$50,000 or more and is not cancelable without penalty within thirty
days; and
4.11.9 There are no persons holding powers of attorney from, or
otherwise authorized to act on behalf of, Casper with respect to the
Business or Casper's assets except for its respective officers and other
management personnel regularly performing their assigned business
functions.
Except as specifically identified on Schedule 4.11, Casper and the
Casper Shareholders have no knowledge that any Contract, Lease, or other
obligation to which Casper is bound, individually or in the aggregate: (i) will
result in a material loss to Casper after the Closing Date; (ii) cannot readily
be performed or fulfilled on time without undue or unusual expenditure of money
or effort by Casper after the Closing Date, or (iii) under which there exists a
default or event of default or event, occurrence, condition or act which, with
the giving of notice, the lapse of time or the happening of any other event or
condition, would become a default or event of default thereunder, except where
such default or event would not cause a Material Adverse Effect. Also set
forth on Schedule 4.11 is a list of all proposals, except proposals made by
Casper's sales people in the ordinary course of business, submitted by Casper
to any third party that, if accepted by such third party, would require
disclosure on Schedule 4.11.
A true copy of each written Contract and Lease as well as all other
documents evidencing any commitment of Casper required to be set forth on any
Schedule hereto has been or will be delivered to Group by Casper no later than
five (5) days after execution of this Agreement.
4.12 Permits. All Permits required in connection with the use,
operation or ownership of Casper's assets and the conduct of the Business as
currently conducted are listed on Schedule 4.12.
4.13 Litigation. Except as set forth on Schedule 4.13, there is no
action, suit, proceeding at law or in equity, arbitration or administrative or
other proceeding by or before (or any investigation by) any governmental or
other instrumentality or agency, pending, or, to the best knowledge of Casper
and the Casper Shareholders, threatened, against or affecting Casper or its
properties or rights, and Casper and the Casper Shareholders do not know of any
valid basis for any such action, proceeding or investigation. There are no
such suits, actions, claims, proceedings or investigations pending or to the
best knowledge of Casper and the Casper Shareholders, threatened, seeking to
prevent or challenge the transactions contemplated by this Agreement. Without
exception as to
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materiality or otherwise, Schedule 4.13 lists all claims, if any, that have
ever been filed with the FAA with respect to Casper and/or the operation of
the Business.
4.14 Taxes. All federal, state, county, local and other Taxes that
are due or will be due and payable by Casper on or before the Closing Date have
been paid timely, including, without limitation, all estimated Taxes. All Tax
returns and reports required to be filed with all Taxing authorities, and all
deposits required by law to be made with respect to (i) Casper's employees'
withholding taxes, and (ii) the operations of Casper have been timely made.
There are no agreements for the extension of time for the assessment or payment
of any amounts of Tax except as set forth on Schedule 4.14 attached hereto, and
Casper has not been requested to enter into any such agreement or waiver.
Except as set forth on Schedule 4.14, no assessments of Tax deficiencies have
been made against Casper, and no examination is pending by the Internal Revenue
Service or any other Taxing authority with respect to any of such Tax returns
or reports. The Casper Balance Sheet reflects and includes adequate provisions
determined in accordance with generally accepted accounting principles
consistently applied for the payment in full of any and all Taxes of Casper for
the period covered thereby and all prior periods. Casper is not now nor has it
ever been a party to any tax allocation or sharing agreement that could result
in any liability to Casper.
4.15 Insurance. Set forth on Schedule 4.15 is a complete list of
insurance policies that Casper maintains with respect to its respective
businesses, properties or employees. Such policies are in full force and
effect and are free from any event which gives rise to a right of termination
on the part of the insurance carriers. In the judgment of Casper and the
Casper Shareholders, such policies, with respect to their amounts and types of
coverage, are adequate to insure against risks to which Casper and its property
and assets are normally exposed in the operation of the Business, subject to
customary deductibles and policy limits.
4.16 Intellectual Property. Schedule 4.16 sets forth all Intellectual
Property owned by Casper. The operation of the Business as currently operated
requires no rights under Intellectual Property other than rights under
Intellectual Property listed on Schedule 4.16 and rights granted to Casper
pursuant to agreements listed on Schedule 4.16. Except as otherwise set forth
on Schedule 4.16, Casper owns all right, title and interest in the Intellectual
Property. No claim has been made and no litigation is pending or, to the best
knowledge of Casper and the Casper Shareholders, threatened wherein Casper has
been or is accused of infringing or otherwise violating the intellectual
property rights of another, or of breaching a contract conveying intellectual
property rights.
4.17 Compliance with Laws. Casper is in compliance with all
applicable laws, regulations, orders, judgments and decrees applicable to the
Business, except where any noncompliance would not have a Material Adverse
Effect.
4.18 Employment Relations. No collective bargaining agreement is
currently being negotiated by Casper.
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4.19 Employee Benefits.
4.19.1 Schedule 4.19 lists all of the Casper Plans. Except as
described in Schedule 4.19, neither Casper nor any other organization
which is a member of a controlled group of organizations within the
meaning of Sections 414(b), (c), (m) or (o), of the Code of which Casper
is a member (the "Casper Controlled Group") has any obligation,
contingent or otherwise, covering any of their employees under any
employment or consulting agreement or under any executive or employee's
compensation plan, agreement or arrangement including, without
limitation, any "employee welfare benefit plan" as defined in Section
3(1) of ERISA, or any other pension, retirement, profit sharing, stock
option, stock purchase, bonus, savings plan, health, welfare or other
employee or former employee benefit plan, program, policy or arrangement
(collectively referred to herein as "Casper Plans"). Neither Casper nor
any members of the Casper Controlled Group currently sponsors or
maintains or has over the prior six (6) years maintained or sponsored
any "employee pension benefit plan" as defined in Section 3(2) of ERISA
which is subject to Title IV of ERISA or the minimum funding obligations
of Section 412 of the Code. There is no voluntary employees'
beneficiary association which is implementing any Casper Plan. Except
as disclosed in Schedule 4.19, neither Casper nor any member of the
Casper Controlled Group nor any fiduciary now or previously acting
pursuant to any Casper Plan ("Casper Plan Fiduciary") has breached or
otherwise failed to comply with any provision of any Casper Plan, and
there are no written and filed claims (other than for benefits in the
ordinary course) grievances, audits, investigations or suits pending
against Casper, any member of the Casper Controlled Group or any Casper
Plan Fiduciary under any Casper Plan. Casper has delivered copies of
the following to the Group: (i) collective bargaining agreements or
other such contracts relating to the benefits under any Casper Plan and
(ii) Forms S-8, if any (including any amendments thereto), for any
Casper Plan.
4.19.2 Schedule 4.19 identifies each of the Casper Plans which
purports to satisfy the requirements of Section 401(a) of the Code
("Qualified Plans"). A copy of each Qualified Plan and of the most
recent determination by the Internal Revenue Service with respect to
each of the Qualified Plans has been provided to Group. All of such
determination letters remain in effect and have not been revoked.
Except as described in the Schedule 4.19, no Qualified Plan has been
amended since the issuance of the most recent determination letter.
Except as disclosed in Schedule 4.19, in all material respects each
Qualified Plan has been administered according to its terms, except for
those terms which are inconsistent with the changes required by the Code
and any regulations and rulings promulgated thereunder for which changes
are not yet required to be made, in which case each Qualified Plan has
been administered in accordance with the provisions of the Code and such
regulations and rulings, and neither the Company nor any member of the
Casper Controlled Group or any Casper Plan Fiduciary of any Qualified
Plan has taken any action which could adversely affect the qualified
status of any Qualified Plan or any related trust.
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4.19.3 With respect to any Casper Plan which is an "employee
welfare benefit plan" (within the meaning of ERISA Section 3(1)): (i)
each Casper Plan which is intended to meet the requirements for tax-
favored treatment under Subchapter B of Chapter 1 of the Code meets such
requirements; (ii) there is no disqualified benefit (as such term is
defined in the Code Section 4976(b)) which would subject Casper or any
member of the Casper Controlled Group or Group to any taxes under Code
Section 4976(a); (iii) each Casper Plan which is a group health plan (as
such term is defined in Code Section 162(i)(2)) complies and has
complied with the applicable requirements of Code Section 4980B; and
(iv) Casper and each member of the Casper Controlled Group has complied
with the reporting and disclosure requirements of ERISA for reports and
disclosures required to be reported or disclosed prior to or as of the
date hereof. Neither Casper nor the Casper Controlled Group maintains
any post-retirement health and life insurance plans for employees and
retirees. Casper has no commitment, whether formal or informal and
whether legally binding or not, to create any additional Casper Plan or
to amend or modify any Casper Plan, and except as provided in Section
9.8 of this Agreement. No benefits will become payable under any Casper
Plan as a result of the consummation of the transactions contemplated
hereby. Neither Casper nor any member of the Casper Controlled Group
has made or is obligated to make any nondeductible contribution to any
Casper Plan.
4.19.4 The transaction contemplated by this Agreement together
with any amounts paid or payable by Casper, or any member of the Casper
Controlled Group has not resulted in and will not result in payments to
"disqualified individuals" (as defined in Section 280G(c) the Code) of
Casper or the Casper Controlled Group which, individually or in the
aggregate, will constitute "excess parachute payments" (as defined in
Section 280G(b) of the Code) resulting in the imposition of the excise
tax under Section 4999 of the Code or the disallowance of deductions
under Section 280G of the Code.
4.19.5 The sole trustee of the ESOP is Xxxx Xxxxxx, who has been
properly appointed and designated to serve in that capacity.
4.20 Environmental Laws and Regulations. Except as set forth on
Schedule 4.20, (i) Hazardous Materials have not been generated, used, treated
or stored on, or transported to or from, the real property owned, leased or
used by Casper, its authorized agents or its independent contractors (including
suppliers) or any property adjoining such real property, (ii) Hazardous
Materials have not been disposed, discharged, injected, spilled, leaked,
leached, dumped, emitted, escaped, emptied, allowed to seep, placed and the
like, into or upon any land or water or air, or otherwise allowed to enter into
the environment (collectively, "Releases") by Casper, its authorized agents or
its independent contractors (including suppliers) on such real property or any
other property, (iii) Casper is, to the best knowledge of Casper and the Casper
Shareholders, in compliance with all applicable Environmental Laws and the
requirements of any Permits issued under such Environmental Laws with respect
to such real property and to Casper's operations conducted thereon, (iv) there
are no pending or, to the best knowledge of Casper and the Casper Shareholders,
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threatened Environmental Claims against Casper or involving such real property,
(v) there are no facts or present or past circumstances, conditions or
occurrences on such real property known to Casper or the Casper Shareholders
that reasonably could be anticipated (A) to form the basis of an Environmental
Claim against Casper or any owner or operator of such real property, or (B) to
cause such real property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such real property under any Environmental
Law, (vi) there are not now and, to the best knowledge of Casper and the Casper
Shareholders, there never have been any underground storage tanks located on
such real property, and (vii) Casper has not in the ordinary course of business
transported, treated, disposed of or stored Hazardous Materials.
4.21 Interests in Customers and Suppliers. Except as set forth on
Schedule 4.21 attached hereto, Casper does not possess, directly or indirectly,
any financial interest in, nor is any Person associated with Casper a director,
officer or employee of, any corporation, firm, association or business
organization which is a supplier, customer, lessor, lessee, or competitor of
Casper.
4.22 Compensation of Employees. Set forth on Schedule 4.22 is a
complete list of all employees of Casper showing (i) such individuals' total
compensation from Casper for the fiscal year ended on the Casper Balance Sheet
Date and (ii) compensation and salary rates for the current fiscal year.
Except as set forth on Schedule 4.22, no employee of Casper has been promised a
bonus or an increase in salary to take effect subsequent to the date hereof.
4.23 Suppliers and Customers. The relationship of Casper with each of
such suppliers and customers as of the date of this Agreement is, to the best
knowledge of Casper and the Casper Shareholders, a good commercial working
relationship, and except as set forth on Schedule 4.23, no significant supplier
or customer has canceled or otherwise terminated or, to the best knowledge of
Casper and the Casper Shareholders, threatened to cancel or otherwise terminate
its relationship with Casper since the beginning of the latest full fiscal year
of Casper.
4.24 Absence of Changes. Except as set forth on Schedule 4.24, since
the Balance Sheet Date there has not been any:
4.24.1 sale, assignment, pledge, hypothecation or other transfer
of any of Casper's assets or properties except in the ordinary course of
business as conducted since that date;
4.24.2 any Material Adverse Effect or any condition or
contingency that might reasonably be expected to result in any Material
Adverse Effect;
4.24.3 termination of or material amendment to any Contract or
Lease except as reflected by any applicable Schedule;
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4.24.4 increase in compensation payable or paid to, or any
employment, bonus or compensation agreement entered into with, any
officer, director, employee, agent or independent contractor of Casper
other than in the ordinary course of business;
4.24.5 declaration or making, or agreement to declare or make,
any payment of dividends or distributions of any assets of any kind or
purchase, redemption or other acquisition, or agreement to purchase,
redeem or otherwise acquire, directly or indirectly, any of Casper's
outstanding capital stock; or merger, consolidation or agreement to
merge or consolidate with any other entity;
4.24.6 agreement or arrangement creating any preferential rights
to purchase any of Casper's capital stock or assets or requiring the
consent of any party to the transfer or assignment of any of Casper's
capital stock or assets;
4.24.7 other than in the ordinary course of business, a material
change in the amount of all notes and accounts receivable of Casper or
other fees or debts due to Casper or the allowances with respect
thereto, or the payables of Casper to trade accounts and other creditors
by Casper, from that reflected in the Balance Sheet;
4.24.8 other Contract or transaction entered into or agreed to by
Casper other than in the ordinary course of business; or
4.24.9 agreement by Casper to do any of the things described in
the preceding Sections 4.24.1 through 4.24.8, except as contemplated in
this Agreement.
4.25 Disclosure. This Agreement, the Financial Statements, any
Schedule, Exhibit or certificate attached hereto or delivered by Casper or the
Casper Shareholders in accordance with the terms hereof do not contain any
untrue statement of a material fact the existence of which results or
reasonably could be expected to result in a Material Adverse Effect.
4.26 Broker's or Finder's Fees. If the Closing occurs, FBO Resources
Group, Inc. ("FRG") will be entitled to receive a fee payable by Casper. No
other Person acting on behalf of Casper or the Casper Shareholders is, or will
be, entitled to any fee, commission or broker's or finder's fees in connection
with this Agreement or any of the transactions contemplated hereby. The Casper
Shareholders agree to indemnify and hold harmless Group and Casper from any
losses or liabilities that may arise as a result of any claims, demands or
causes of action for any such fee or commission, other than the fee payable to
FRG and credited against the Casper Purchase Price.
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4.27 Government Contracts. Except as set forth on Schedule 4.27,
Casper does not have any Contracts with any agency of the Government of the
United States or supply any services to any of the military services of the
United States or the Department of Defense or have a facility security
clearance under the Department of Defense Industrial Security Program.
4.28 Copies of Documents. Casper and the Casper Shareholders have
made available for inspection and copying by Group and its advisers, true,
complete and correct copies of all documents referred to in this Article IV or
in any Schedule attached hereto.
4.29 Subsidiaries. Casper has only one subsidiary, Casper Flying
Service, a Wyoming corporation. Casper owns all of the issued and outstanding
capital stock of the Subsidiary, free and clear of all Encumbrances and rights
of others. There are no outstanding subscriptions, options, convertible
securities, indebtedness convertible into equity securities, warrants, calls or
rights of any kind (issued, contracted for, granted by, or binding upon
Subsidiary) to purchase or otherwise acquire any security of or equity interest
in Subsidiary. All of the representations and warranties contained in this
Article IV (except Sections 4.1 and 4.2), and when referenced throughout this
Agreement, shall be construed to include the Subsidiary within the term
"Casper" for all purposes.
4.30 Bank Accounts. Attached as Schedule 4.30 is a true and complete
listing of all bank accounts, savings accounts, brokerage accounts and
investment accounts and for each of such accounts the names of the individuals
authorized to withdraw funds or investments from such account.
ARTICLE V
SECURITIES REPRESENTATIONS AND WARRANTIES
Each Casper Shareholder, as to Section 5.1, and each of Xxxxxx and the
ESOP, as to Sections 5.2 through 5.7, represents and warrants to Group,
severally and not jointly, as follows:
5.1 Authorization and Validity of Agreement. The Casper Shareholder
has full legal capacity to execute and deliver this Agreement, to perform his
or its obligations hereunder and to consummate the transactions contemplated
hereby. Each trust Casper Shareholder has full trust power and authority to
make, execute, deliver and perform this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement by the Casper Shareholder
and the consummation of the transactions contemplated hereby, have been duly
authorized and approved by the Casper Shareholder or by its trustee, and no
other action on the part of the Casper Shareholder is necessary to authorize
the execution, delivery and performance of this Agreement by the Casper
Shareholder and the consummation of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Casper Shareholder and is
a valid and binding obligation of the Casper Shareholder enforceable against
the Casper Shareholder in accordance with its terms, except to the extent that
its enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and
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similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
5.2 Securities Laws. Each of Xxxxxx and the ESOP acknowledges that
the Group Stock to be issued by Group hereunder constitutes securities under
the Securities Act of 1933, as amended ("Securities Act"), and the applicable
state securities laws (collectively, "Acts") and has not been registered for
sale to Xxxxxx and the ESOP under the Securities Act or the Acts in reliance on
available exemptions from the registration requirements thereof.
5.3 Accredited Investor. Each of Xxxxxx and the ESOP is an
"accredited investor" as that term is defined in Section 501 of Regulation D
promulgated under the Securities Act.
5.4 Knowledge and Experience. The Casper Shareholder has such
knowledge and experience in financial and business matters that such Casper
Shareholder is capable of evaluating the merits and risks of such Casper
Shareholder's participation in the transactions contemplated hereby. The
Casper Shareholder has had access to and an opportunity to inspect all relevant
information relating to Group sufficient to enable the Casper Shareholder to
evaluate the merits and risks of the Casper Shareholder's participation in such
transactions. The Casper Shareholder also has had adequate opportunity to ask
questions and receive answers respecting, and to obtain such additional
information as the Casper Shareholder has desired regarding, the business,
financial condition and affairs of Group.
5.5 Investment Purpose. The acquisition by Xxxxxx or the ESOP of
securities of Group issued hereunder is for such Casper Shareholder's own
account, is for investment purposes, and is without a view to, and not for
offer or sale for Group in connection with, any distribution of securities of
Group. Each of Xxxxxx and the ESOP is not participating and does not have a
participation in any such distribution or the underwriting of any such
distribution.
5.6 Holding Period. Each of Xxxxxx and the ESOP understands that the
securities of Group to be issued hereunder must be held for an indefinite
period of time and cannot be sold or transferred unless such securities are
subsequently registered under the Acts or exemptions from the registration
requirements thereof are available.
5.7 Legend. Each of Xxxxxx and the ESOP acknowledges that Group will
place on the certificates representing securities to be issued by Group
hereunder a legend stating that such securities have not been registered under
the Acts and setting forth or referring to the restrictions on the
transferability and sale thereof.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF GROUP
Group hereby represents and warrants to each of the Casper Shareholders
as follows:
6.1 Existence and Good Standing; Power and Authority. Group is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Texas. Group has full corporate power and authority to
make, execute, deliver and perform this Agreement, to perform its respective
obligations hereunder and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized and approved
by all required corporate action of Group. This Agreement has been duly
executed and delivered by Group and is a valid and binding obligation of Group
enforceable against Group, in accordance with its terms, except to the extent
that its enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
6.2 Capitalization. The authorized capital stock of Group consists
of 15,000,000 shares of capital stock, of which 10,000,000 shares are common
stock, par value $0.01 per share, and 5,000,000 are preferred stock, par value
$0.01 per share. Group currently has 1,600,250 shares of common stock that are
issued and outstanding. Except as set forth in Schedule 6.2, Group has no
options, securities, warrants or other equity or debt instruments convertible
or exercisable into any equity interest in Group. When issued and paid for in
accordance with the terms of this Agreement, the shares of Group Stock to be
issued to the Casper Shareholders shall be fully paid and nonassessable.
6.3 No Violations. The execution, delivery and performance of this
Agreement by Group and the consummation by Group of the transactions
contemplated hereby will not, with or without the giving of notice or the lapse
of time or both, (i) violate, conflict with, or result in a breach or default
under any provision of the charter or bylaws of Group; (ii) to the best
knowledge of Group, violate any statute, ordinance, rule, regulation, order,
judgment or decree of any court or of any governmental or regulatory body,
agency or authority applicable to Group or by which any of its properties or
assets may be bound; (iii) to the best knowledge of Group, require any filing
by Group with, or require Group to obtain any permit, consent or approval of,
or require Group to give any notice to, any governmental or regulatory body,
agency or authority or any third party; or (iv) result in a violation or breach
by Group of, conflict with, constitute (with or without due notice or lapse of
time or both) a default by Group (or give rise to any right of termination,
cancellation, payment or acceleration) under, or result in the creation of any
Encumbrance upon any of the properties or assets of Group pursuant to, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, franchise, permit, agreement, lease, franchise agreement or other
instrument or obligation to which Group is a party, or by which Group or any of
its properties or assets may be bound, except in the case of clauses (ii),
(iii) and (iv) of this Section 6.3 for such violations, consents,
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breaches, defaults, terminations and accelerations which in the aggregate would
not have a Material Adverse Effect.
6.4 Broker's or Finder's Fees. No Person acting on behalf of Group
is, or will be, entitled to any fee, commission or broker's or finder's fee in
connection with this Agreement or any of the transactions contemplated hereby.
6.5 Receivables and Payables. Schedule 6.5 lists all notes
receivable, notes payable, accounts receivable and accounts payable of Group.
Except as reflected on Schedule 6.5, all notes receivable and accounts
receivable of Group are, and such notes and accounts receivable at the Closing
Date will be, (i) bona fide claims against debtors for debts, sales, work
performed or other charges, (ii) to the best knowledge of Group, subject to no
defenses, set-offs or counterclaims, and (iii) to the best knowledge of Group,
collectible. Except as reflected on Schedule 6.5, all notes payable and
accounts payable of Group are, and such notes and accounts payable at the
Closing Date will be, bona fide claims by creditors for debts, sales, work
performed, other expenses incurred by Group.
6.6 Financial Statements; No Material Adverse Change. Group has
heretofore furnished Casper or its representatives with the audited financial
statements of Group as of June 30, 1996 for the nine-month period then ended.
In addition, Group has heretofore furnished Casper or its representatives with
the financial statements of Group as of March 31, 1997, in the form of a
balance sheet (the "Group Balance Sheet"), and an income statement and
statement of cash flows for the six-month period then ended relating to the
audited balance sheet (together with the Balance Sheet, the "Group Financial
Statements"). The Group Financial Statements have been prepared in accordance
with GAAP and fairly present in all material respects the financial position of
Group at the dates thereof and the results of operations and cash flow of Group
for the period indicated. Except as set forth on Schedule 6.6 attached hereto
or for changes that would not have a Material Adverse Effect, since March 31,
1997 (the "Group Balance Sheet Date"), there has been no change in the assets
or liabilities, or in the business or condition, financial or otherwise, or in
the results of operations, of Group.
6.7 Warranty Claims. Except as set forth on Schedule 6.7 attached
hereto, as of the date hereof, there are no warranty claims relating to
products at any time sold or services at any time performed by Group pending
or, to the best knowledge of Group, threatened that would have a Material
Adverse Effect.
6.8 Title to Properties; Encumbrances; Condition. Except as set
forth on Schedule 6.8 or on any of the other Schedules hereto and except for
properties and assets reflected in the Group Financial Statements or acquired
since the Group Balance Sheet Date that have been sold or otherwise disposed of
in the ordinary course of business, Group owns outright, and has, and shall at
the Closing have, full legal and beneficial title to all of its assets, in each
case subject to no Encumbrances except for Permitted Encumbrances. The assets
of Group consist of all properties and
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assets necessary to operate the Business in the manner it has been operated
prior to the date hereof. Except as set forth on Schedule 6.8, each asset of
Group is in good operating condition and repair, subject to ordinary wear and
tear, and, to the best knowledge of Group, has been maintained in accordance
with the manufacturers' specifications, and each asset is, to the best
knowledge of Group, in compliance with all applicable federal and state laws
and regulations. Group's Inventory consists of items of a quality and quantity
usable or saleable in the regular course of business of Group.
6.9 Real Property. Group owns no real property. All of the
buildings, structures and real property appurtenances leased by Group or used
in connection with the operation of its business (the "Group Operating
Facilities") are in good operating condition, and in a state of good
maintenance and repair, subject to ordinary wear and tear, except where such
condition or maintenance would not have a Material Adverse Effect. The Group
Operating Facilities have adequate rights of ingress and egress for operation
of Group's business in the ordinary course. No condemnation or similar
proceeding is pending or, to the best knowledge of Group, threatened, which
would preclude or impair the use of the Group Operating Facilities as used in
the prior operation of its business.
6.10 Leases. Schedule 6.10 attached hereto contains an accurate and
complete list of all Leases to which Group is a party (as lessee or lessor).
Each Lease set forth on Schedule 6.10 is, to the best knowledge of Group, in
full force and effect; there is no existing default under any of such Leases on
the part of Group or, to the best of Group's knowledge, any other party
thereto.
6.11 Contracts and Commitments. Except as specifically identified on
Schedule 6.11:
6.11.1 Group is not a party to or bound by any loan, credit or
similar agreement or any indenture, trust agreement or other instrument
relating to any issue of bonds, debentures, notes or other evidences of
indebtedness or creating any lien, encumbrance or charge on any of
Group's assets;
6.11.2 There are no bonus, pension, profit sharing, retirement,
stock option, stock purchase, deferred compensation, hospitalization or
insurance plans, or vacation or severance pay plans, or any other plans
or arrangements providing benefits to officers, agents or employees of
Group;
6.11.3 Group does not have any collective bargaining agreement
with any labor union or association or any employment contract or other
binding agreement relating to the employment of any of its employees;
6.11.4 Group is not a party to any joint venture agreement or
other agreement involving the sharing of profits relating to its
business and/or its assets;
6.11.5 Group is not a party to any (i) contracts or commitments
for capital expenditures outside the ordinary course of business or
involving obligations on the part of
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Group in amounts inconsistent with those incurred by Group in the
ordinary course of business in accordance with Group's prior operation
of its business, (ii) lease under which personal property is leased to
or from Group and which is not cancelable by Group without penalty upon
notice of thirty days or less or pursuant to which rentals payable by or
to Group, either individually or in the aggregate, substantially exceed
amounts previously incurred by Group in the ordinary course of business,
(iii) continuing contract for the future purchase of Inventory or other
materials, supplies, machinery or equipment in excess of the
requirements of its business conducted in the ordinary course, (iv)
other contract or agreement which involves an obligation on the part of
Group, either individually or in the aggregate, in excess of amounts
previously incurred by Group in the ordinary course of business or, (v)
agreement not made in the ordinary course of business;
6.11.6 There are no agreements, notes, mortgages, leases,
franchises, permits, orders, judgments or decrees to which Group is a
party or by which Group or any of its assets are bound, which contain
any provision which would (i) be violated or contravened by, (ii) cause
acceleration of any obligation of Group as a result of, or (iii) cause
or permit the forfeiture of any right or benefit of Group by reason of,
the execution or performance of this Agreement;
6.11.7 Group is not party to any Contract limiting the freedom of
Group to engage in any line of business or to compete with any Person;
6.11.8 Group is not a party to any agreement that involves
$50,000 or more and is not cancelable without penalty within thirty
days; and
6.11.9 There are no persons holding powers of attorney from, or
otherwise authorized to act on behalf of, Group with respect to its
business or Group's assets except for its respective officers and other
management personnel regularly performing their assigned business
functions.
Except as specifically identified on Schedule 6.11, Group has no
knowledge that any Contract, Lease, or other obligation to which Group is
bound, individually or in the aggregate: (i) will result in a material loss to
Group after the Closing Date; (ii) cannot readily be performed or fulfilled on
time without undue or unusual expenditure of money or effort by Group after the
Closing Date, or (iii) is not in full force and effect and under which there
exists a default or event of default or event, occurrence, condition or act
which, with the giving of notice, the lapse of time or the happening of any
other event or condition, would become a default or event of default
thereunder, except where such default or event would not cause a Material
Adverse Effect. Also set forth on Schedule 6.11 is a list of all proposals,
except proposals made by Group's sales people in the ordinary course of
business, submitted by Group to any third party that, if accepted by such third
party, would require disclosure on Schedule 6.11.
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A true copy of each written Contract and Lease as well as all other
documents evidencing any commitment of Group required to be set forth on any
Schedule hereto has been or will be delivered to Casper by Group no later than
five (5) days after execution of this Agreement.
6.12 Permits. All Permits required in connection with the use,
operation or ownership of Group's assets and the conduct of its business as
currently conducted are listed on Schedule 6.12.
6.13 Litigation. Except as set forth on Schedule 6.13, there is no
action, suit, proceeding at law or in equity, arbitration or administrative or
other proceeding by or before (or any investigation by) any governmental or
other instrumentality or agency, pending, or, to the best knowledge of Group,
threatened, against or affecting Group or its properties or rights, and Group
do not know of any valid basis for any such action, proceeding or
investigation. There are no such suits, actions, claims, proceedings or
investigations pending or to the best knowledge of Group, threatened, seeking
to prevent or challenge the transactions contemplated by this Agreement.
Without exception as to materiality or otherwise, Schedule 6.13 lists all
claims, if any, that have ever been filed with the FAA with respect to Group
and/or the operation of the Business.
6.14 Taxes. All federal, state, county, local and other Taxes that
are due or will be due and payable by Group on or before the Closing Date have
been paid timely, including, without limitation, all estimated Taxes. All Tax
returns and reports required to be filed with all Taxing authorities, and all
deposits required by law to be made with respect to (i) Group's employees'
withholding taxes, and (ii) the operations of Group have been timely made.
There are no agreements for the extension of time for the assessment or payment
of any amounts of Tax, except as set forth on Schedule 6.14 attached hereto,
and Group has not been requested to enter into any such agreement or waiver.
Except as set forth on Schedule 6.14, no assessments of Tax deficiencies have
been made against Group and no examination is pending by the Internal Revenue
Service or any other Taxing authority with respect to any of such Tax returns
or reports. The Group Balance Sheet reflects and includes adequate provisions
determined in accordance with generally accepted accounting principles
consistently applied for the payment in full of any and all Taxes of Group for
the period covered thereby and all prior periods. Group is not now nor has it
ever been a party to any Tax allocation or sharing agreement that could result
in any liability to Group.
6.15 Insurance. Set forth on Schedule 6.15 is a complete list of
insurance policies that Group maintains with respect to its respective
businesses, properties or employees. Such policies are in full force and
effect and are free from any right of termination on the part of the insurance
carriers. In the judgment of Group, such policies, with respect to their
amounts and types of coverage, are adequate to insure against risks to which
Group and its property and assets are normally exposed in the operation of its
business, subject to customary deductibles and policy limits.
6.16 Intellectual Property. Schedule 6.16 sets forth all Intellectual
Property owned by Group. As currently operated, Group's business requires no
rights under Intellectual Property other than rights under Intellectual
Property listed on Schedule 6.16 and rights granted to Group pursuant
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to agreements listed on Schedule 6.16. Except as otherwise set forth on
Schedule 6.16, Group owns all right, title and interest in the Intellectual
Property. No claim has been made and no litigation is pending or, to the best
knowledge of Group, threatened wherein Group has been or is accused of
infringing or otherwise violating the intellectual property rights of another,
or of breaching a contract conveying intellectual property rights.
6.17 Compliance with Laws. Group is in compliance with all applicable
laws, regulations, orders, judgments and decrees applicable to its business,
except where any noncompliance would not have a Material Adverse Effect.
6.18 Employment Relations. Group is not engaged in any unfair labor
practice. Group has not been notified of any grievance and no arbitration
proceeding arising out of or under any collective bargaining agreement is
pending. No collective bargaining agreement is currently being negotiated by
Group.
6.19 Employee Benefit Plans. None of Group's Employee Benefit Plans
are subject to Title IV of ERISA or the minimum funding obligations of Section
412 of the Code, and Group and any entity required to be aggregated therewith
pursuant to Section 414(b) or (c) of the Code have no liability under Title IV
of ERISA or under Section 412(f) or 412(n) of the Code.
6.20 Environmental Laws and Regulations. Except as set forth on
Schedule 6.20, (i) Hazardous Materials have not been generated, used, treated
or stored on, or transported to or from, the real property owned, leased or
used by Group, its authorized agents or its independent contractors (including
suppliers) or any property adjoining such real property, (ii) Hazardous
Materials have not been disposed, discharged, injected, spilled, leaked,
leached, dumped, emitted, escaped, emptied, allowed to seep, placed and the
like, into or upon any land or water or air, or otherwise allowed to enter into
the environment (collectively, "Releases") by Group, its authorized agents or
its independent contractors (including suppliers) on such real property or any
other property, (iii) Group is, to the best knowledge of Group, in compliance
with all applicable Environmental Laws and the requirements of any Permits
issued under such Environmental Laws with respect to such real property and to
Group's operations conducted thereon, (iv) there are no pending or, to the best
knowledge of Group, threatened Environmental Claims against Group or involving
such real property, (v) there are no facts or present or past circumstances,
conditions or occurrences on such real property known to Group that reasonably
could be anticipated (A) to form the basis of an Environmental Claim against
Group or any owner or operator of such real property, or (B) to cause such real
property to be subject to any restrictions on the ownership, occupancy, use or
transferability of such real property under any Environmental Law, (vi) there
are not now and, to the best knowledge of Group, there never have been any
underground storage tanks located on such real property, and (vii) Group has
not in the ordinary course of business transported, treated, disposed of or
stored Hazardous Materials.
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6.21 Interests in Customers and Suppliers. Except as set forth on
Schedule 6.21 attached hereto, Group does not possess, directly or indirectly,
any financial interest in, nor is any Person associated with Group a director,
officer or employee of, any corporation, firm, association or business
organization which is a supplier, customer, lessor, lessee, or competitor of
Group.
6.22 Compensation of Employees. Set forth on Schedule 6.22 is a
complete list of all employees of Group showing (i) such individuals' total
compensation from Group for the fiscal year ended on the Group Balance Sheet
Date and (ii) compensation and salary rates for the current fiscal year.
Except as set forth on Schedule 6.22, no employee of Group has been promised a
bonus or an increase in salary to take effect subsequent to the date hereof.
6.23 Suppliers and Customers. The relationship of Group with each of
such suppliers and customers as of the date of this Agreement is, to the best
knowledge of Group, a good commercial working relationship, and except as set
forth on Schedule 6.23, no significant supplier or customer has cancelled or
otherwise terminated or, to the best knowledge of Group, threatened to cancel
or otherwise terminate its relationship with Group since the beginning of the
latest full fiscal year of Group.
6.24 Absence of Changes. Except as set forth on Schedule 6.24, since
the Group Balance Sheet Date there has not been any:
6.24.1 sale, assignment, pledge, hypothecation or other transfer
of any of Group's assets or properties except in the ordinary course of
business as conducted since that date;
6.24.2 any Material Adverse Effect or any condition or
contingency that might reasonably be expected to result in any Material
Adverse Effect;
6.24.3 termination of or material amendment to any Contract or
Lease except as reflected by any applicable Schedule;
6.24.4 increase in compensation payable or paid to, or any
employment, bonus or compensation agreement entered into with, any
officer, director, employee, agent or independent contractor of Group
other than in the ordinary course of business;
6.24.5 declaration or making, or agreement to declare or make,
any payment of dividends or distributions of any assets of any kind or
purchase, redemption or other acquisition, or agreement to purchase,
redeem or otherwise acquire, directly or indirectly, any of Group's
outstanding capital stock; or merger, consolidation or agreement to
merge or consolidate with any other entity;
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6.24.6 agreement or arrangement creating any preferential rights
to purchase any of Group's capital stock or assets or requiring the
consent of any party to the transfer or assignment of any of Group's
capital stock or assets;
6.24.7 other than in the ordinary course of business, a material
change in the amount of all notes and accounts receivable of Group or
other fees or debts due to Group or the allowances with respect thereto,
or the payables of Group to trade accounts and other creditors by Group,
from that reflected in the Group Balance Sheet;
6.24.8 other Contract or transaction entered into or agreed to by
Group other than in the ordinary course of business; or
6.24.9 agreement by Group to do any of the things described in
the preceding Sections 6.24.1 through 6.24.8, except as contemplated in
this Agreement.
6.25 Disclosure. This Agreement, the Group Financial Statements, any
Schedule, Exhibit or certificate attached hereto or delivered by Group in
accordance with the terms hereof do not contain any untrue statement of a
material fact the existence of which results or reasonably could be expected to
result in a Material Adverse Effect.
6.26 Government Contracts. Except as set forth on Schedule 6.26,
Group does not have any Contracts with any agency of the Government of the
United States or supply any services to any of the military services of the
United States or the Department of Defense or have a facility security
clearance under the Department of Defense Industrial Security Program.
6.27 Copies of Documents. Group has made available for inspection and
copying by Casper and its advisers, true, complete and correct copies of all
documents referred to in this Article VI or in any Schedule attached hereto.
6.28 Subsidiaries. Group has only three subsidiaries, Tri-Star
Airlines Services, Inc., Tri-Star Aircraft Services, Inc. and Pride Aviation,
Inc.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF
CASPER AND THE CASPER SHAREHOLDERS
The obligations of Casper and the Casper Shareholders under this
Agreement to consummate the transactions contemplated hereby shall be subject
to the satisfaction (or waiver by Casper and the Casper Shareholders) on or
prior to the Closing Date of all of the following conditions:
7.1 Truth of Representations and Warranties. The representations and
warranties of Group contained in this Agreement shall be true and correct in
all material respects on and as of the
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Closing Date with the same effect as though such representations and warranties
had been made on and as of the Closing Date, and Group shall have delivered to
Casper on the Closing Date a certificate of an authorized officer of Group,
dated the Closing Date, to such effect.
7.2 Performance of Agreements. Each and all of the agreements and
covenants of Group to be performed on or before the Closing Date pursuant to
the terms hereof, including all deliveries and obligations at Closing, shall
have been duly performed in all material respects, and Group shall have
delivered to Casper a certificate of an authorized officer of Group, dated the
Closing Date, to such effect and evidencing the incumbency of all officers
executing any documents in connection with the Closing.
7.3 No Litigation Threatened. No action or proceedings shall have
been instituted before a court or other governmental body or by any public
authority to restrain or prohibit any of the transactions contemplated hereby,
and Group shall have delivered to Casper a certificate of an authorized officer
of Group, dated the Closing Date, to such effect to the best knowledge of such
officer.
7.4 Consents. All governmental and third party consents and
approvals necessary to permit the consummation of the transactions contemplated
by this Agreement shall have been received.
7.5 Proceedings. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and all documents incident thereto
shall be reasonably satisfactory in form and substance to Casper and its
counsel, and Casper shall have received copies of all such documents and other
evidence as they or its counsel may reasonably request in order to establish
the consummation of such transactions and the taking of all proceedings in
connection therewith.
7.6 Legal Opinion. Group shall have delivered to Casper the opinion
of Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel to Group, addressing the matters set
forth in Exhibit B attached hereto, which opinion shall be acceptable to Casper
and its counsel.
7.7 Registration of Group Stock. Group shall have caused the Group
Stock to be registered under the Securities Act for resale by Xxxxxx and the
ESOP.
ARTICLE VIII
CONDITIONS TO GROUP'S OBLIGATIONS
The obligations of Group under this Agreement to consummate the
transactions contemplated hereby shall be subject to the satisfaction (or
waiver by Group) on or prior to the Closing Date of all of the following
conditions:
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8.1 Truth of Representations and Warranties. The representations and
warranties of Casper and the Casper Shareholders contained herein shall be true
and correct in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made on and
as of the Closing Date. The Casper Shareholders and Casper shall have
delivered to Group on the Closing Date a certificate executed by each of the
Casper Shareholders, an authorized officer of Casper, respectively, dated the
Closing Date, to such effect.
8.2 Performance of Agreements. Each and all of the agreements and
covenants of Casper and the Casper Shareholders to be performed on or before
the Closing Date pursuant to the terms hereof, including all deliveries and
obligations at Closing, shall have been duly performed in all material
respects. The Casper Shareholders and Casper shall have delivered to Group a
certificate of each of the Casper Shareholders and an authorized officer of
Casper, respectively, dated the Closing Date, to such effect. The certificates
of Casper shall also evidence the incumbency of all officers of Casper
executing any documents in connection with the Closing.
8.3 No Litigation Threatened. No action or proceedings shall have
been instituted before a court or other governmental body or by any public
authority to restrain or prohibit any of the transactions contemplated hereby.
The Casper Shareholders and Casper shall have delivered to Group a certificate
of each of the Casper Shareholders, an authorized officer of Casper, dated the
Closing Date, to such effect to the best knowledge of such officer.
8.4 Consents. All governmental and third party consents and
approvals necessary to permit the consummation of the transactions contemplated
by this Agreement shall have been received, including without limitation each
of the consents referred to on Schedule 4.4 attached hereto shall have been
obtained. Group shall have received the approval of its Board of Directors to
consummate the transactions contemplated hereby.
8.5 Due Diligence. Group, through its officers and directors and its
legal and other representatives, shall have concluded a due diligence review of
Casper satisfactory to Group in its sole discretion.
8.6 Legal Opinion. Casper and the Casper Shareholders shall have
delivered to Group the opinion of Brown, Drew, Xxxxxx & Xxxxxxxx, counsel to
Casper, addressing the matters set forth in Exhibit C attached hereto, which
opinions shall be acceptable to Group and its counsel.
8.7 Proceedings. All proceedings to be taken in connection with the
transactions contemplated by this Agreement and all documents incident thereto
shall be reasonably satisfactory in form and substance to Group and its
counsel, and Group shall have received copies of all such documents and other
evidence as it or its counsel may reasonably request in order to establish the
consummation of such transactions and the taking of all proceedings in
connection therewith.
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8.8 Payment of Receivables. On the Closing Date, Xxxxxx shall use a
portion of the cash that he receives from Group as payment of the Casper
Purchase Price to pay to Casper all inter-company receivables or other payables
owed to Casper by Xxxxxx, his relatives or any other entities owned or
controlled by Xxxxxx or his relatives ("Inter-Company Receivables"). Xxxxxx
may offset against the amount owed to Casper for Inter-Company Receivables the
fair market value (as agreed by Casper and Group) of Xxxxxx'x 1984 Cessna 402C
airplane if he assigns title to such plane to Casper at the Closing.
8.9 Reinstatement of FBO Agreement. Casper shall have delivered to
Group evidence satisfactory to Group that the Airport FBO Agreement has been
reinstated until at least 1999.
ARTICLE IX
COVENANTS OF CASPER AND THE CASPER SHAREHOLDERS
Casper and the Casper Shareholders hereby covenant and agree with Group
as follows:
9.1 Cooperation. Casper and the Casper Shareholders shall use their
reasonable best efforts to cooperate with Group to secure all necessary
consents, approvals, authorizations, exemptions and waivers from third parties
as shall be required in order to enable Casper and the Casper Shareholders to
effect the transactions contemplated hereby. Casper and the Casper
Shareholders shall otherwise use their reasonable best efforts to cause the
consummation of such transactions in accordance with the terms and conditions
hereof and to cause all conditions contained in this Agreement over which they
have control to be satisfied. Casper and the Casper Shareholders further agree
to deliver to Group prompt written notice of any event or condition known to or
discovered by Casper or the Casper Shareholders, which if it existed on the
date of this Agreement or on the Closing Date, would result in any of the
representations and warranties of Casper or the Casper Shareholders contained
herein being untrue in any material respect.
9.2 Conduct of Business. Except as Group may otherwise consent to in
writing, between the date hereof and the Closing Date, Casper shall (i) conduct
the Business only in the ordinary course, (ii) use its reasonable efforts to
keep available the services of Casper's employees and maintain Casper's current
relationships with licensors, suppliers, lessors, distributors, customers,
clients and others, (iii) maintain, consistent with past practice and good
business judgment, all of Casper's assets in customary repair, order and
condition, ordinary wear and tear excepted, and insurance upon all of its
assets used in the conduct of the Business in such amounts and of such kinds
comparable to that in effect on the date hereof, to the extent available at
current premiums, and (iv) maintain its Books and Records in the usual, regular
and ordinary manner, on a basis consistent with past practice.
9.3 Negative Covenants of Casper and the Casper Shareholders. From
and after December 31, 1996 and through the Closing Date and except with the
specific prior written consent of Group, Casper and the Casper Shareholders
covenant and agree as follows:
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9.3.1 Casper shall not sell, transfer or dispose of any of its
assets other than in the ordinary course of business; provided, however,
that any sale, transfer or disposition of any of its assets in the
ordinary course of business shall not exceed assets valued at more than
$10,000 in the aggregate and shall not be made to any of the Casper
Shareholders.
9.3.2 Casper shall not make any distributions or dividends of
cash or other property to the Casper Shareholders.
9.3.3 Casper shall not make, declare or pay any bonuses to any
of the officers or directors of Casper or other payments to such persons
not in the ordinary course of business.
9.3.4 Casper shall not grant an Encumbrance (except a Permitted
Encumbrance) on any of the assets of Casper or allow any such
Encumbrance (except a Permitted Encumbrance) to occur or to be created.
9.3.5 Except in the ordinary course of business, Casper shall
not acquire any tangible properties or assets.
9.3.6 Except in the ordinary course of business, Casper shall
not enter into any employment and/or any independent contractor
agreements relating to services to be rendered in connection with the
Business or any of their assets.
9.3.7 Except in the ordinary course of business, Casper shall
not amend, modify or terminate any of its Contracts, Leases or other
agreements.
9.3.8 Casper shall not enter into any undertaking with respect
to the operation of its assets or the Business except in the ordinary
course of business and consistent with past practices.
9.3.9 The Casper Shareholders shall not sell, transfer or
dispose of any of the Casper Stock or grant or allow an Encumbrance
thereon.
9.4 Exclusive Dealing. During the period from the date of this
Agreement to the Final Termination Date (as defined in Section 12.1.2), Casper
and the Casper Shareholders shall not take any action to, directly or
indirectly, encourage, initiate or engage in discussions or negotiations with,
or provide any information to any Person other than Group, concerning (i) the
sale, transfer or disposal of all or any material part of the assets of Casper,
(ii) a merger of Casper, (iii) the sale, transfer or disposal of any of the
Casper Stock, or (iv) any similar transaction involving Casper or the Casper
Shareholders (collectively, a "Prohibited Transaction"). Casper and the Casper
Shareholders shall immediately notify Group of any inquiries or proposals made
by any Person other than Group with respect to a Prohibited Transaction. Prior
to the Final Termination Date (as defined in Section
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12.1.2), Casper and the Casper Shareholders shall not enter into any definitive
agreements with respect to any Prohibited Transaction.
9.5 Review of the Assets. Casper and the Casper Shareholders agree
that Group may, prior to the Closing Date, through its representatives, review
(i) the assets and liabilities of Casper, (ii) the complete working papers of
the certified public accountants of Casper used in their preparation of
financial statements for Casper, and (iii) the Books and Records of Casper and
otherwise review the financial and legal condition of Casper as Group or its
representatives deem necessary or advisable to familiarize itself or themselves
with the Business and related matters; such review shall not, however, affect
the representations and warranties made by Casper and the Casper Shareholders
hereunder or the remedies of Group for breaches of those representations and
warranties. Such review and inspection shall occur only during normal business
hours upon reasonable notice by Group. Casper shall permit Group and its
representatives to have, after the execution of this Agreement, full access to
those employees of Casper who can furnish Group with financial and operating
data and other information with respect to the Business as Group shall from
time to time reasonably request.
9.6 Consents. Casper and the Casper Shareholders covenant to obtain
as soon as practicable after execution of this Agreement all governmental and
third party consents and approvals necessary to permit the performance of their
respective obligations to consummate the transactions contemplated by this
Agreement.
9.7 Further Assurances. At any time or from time to time after the
Closing Date, Casper and the Casper Shareholders shall, at the reasonable
request of Group and at Group's expense, execute and deliver any further
instruments or documents and take all such further action as Group may
reasonably request in order to consummate and make effective the transactions
contemplated by this Agreement.
9.8 ESOP. As soon as practicable after the date hereof, Casper and
its appropriate Casper Plan Fiduciaries shall take all actions necessary to
authorize the ESOP to transact the following transactions immediately prior to
the Closing and the following shall be transacted by the ESOP immediately prior
to the Closing and the completion of the transactions is a condition to the
Closing:
9.8.1 All shares of Casper Stock, which have been acquired by
the ESOP with the proceeds of a loan ("ESOP Loan") and which are
maintained in a suspense account and not allocated to ESOP participants'
accounts, shall be exchanged with Casper for the outstanding balance of
the ESOP Loan so that immediately prior to the Closing the ESOP's and/or
ESOP's only asset shall be the Casper Stock allocated to ESOP
participants' accounts, and the ESOP shall have no liabilities.
9.8.2 Any and all actions necessary for the ESOP to sell all
Casper Stock allocated to ESOP participants' accounts at Closing as set
forth in Section 2.1 in accordance with
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ERISA and the Code shall be completed prior to Closing, including but
not limited to, any Casper Plan Fiduciary actions required and an
independent appraisal of such Casper Stock.
9.8.3 Casper shall terminate the ESOP subject to the receipt of
a letter from the Internal Revenue Service stating that the ESOP is a
qualified plan under Section 401(a) of the Code upon its termination
("IRS Qualification Letter"), and the effective date of such termination
of the ESOP shall be the day Casper receives the IRS Qualification
Letter from the Internal Revenue Service. Casper agrees to amend the
ESOP and take whatever additional action is necessary to cease all
distributions from the ESOP commencing on the date hereof and ending
when the following occurs (i) Casper receives an IRS Qualification
Letter upon the ESOP's termination and (ii) any distributions from the
ESOP are covered by an effective registration statement filed with the
Commission and any applicable state securities authorities or Casper and
Group have received an opinion of counsel, satisfactory to Group, to the
effect that such distribution is exempt from registration under
applicable federal and state securities laws.
9.8.4 Xxxxxx agrees to serve as a trustee of the ESOP until
termination of the ESOP and final distribution of the ESOP's assets to
its participants, and Casper and Group agree not to remove Xxxxxx from
such capacity so long as he continues to perform his duties as trustee
in good faith.
9.9 Airport FBO Agreement. Casper agrees to use best efforts to
obtain a reinstatement until at least 1999 of the Operating Agreement (the
"Airport FBO Agreement") dated as of September 8, 1992 between Casper and the
Board of Trustees of Natrona County International Airport relating to the
conduct of fixed base operations at the Natrona County International Airport by
Casper, which expired by its terms on December 31, 1994.
9.10 Payable to Y.E. Werner. Xxxxxx is a party to a Contract of Sale
dated April 1, 1976 between Y.E. Xxxxxx, Xxxxxxxxx X. Xxxxxx and Xxxxx Xxxxxx,
as amended by Amendment to Contract of Sale dated April 30, 1981 (the "Xxxxxx
Contract"), pursuant to which Xxxxxx is obligated to pay $3,000 per month to
Y.E. Werner. The outstanding balance payable by Xxxxxx under the Xxxxxx
Contract is listed as a notes payable on the balance sheet for Casper. Upon
the Closing, Xxxxxx agrees to use the cash proceeds received by him to pay in
full the outstanding balance payable to Y.E. Werner and to indemnify and hold
harmless Casper from any loss or liability arising from the Xxxxxx Contract.
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ARTICLE X
COVENANTS OF GROUP
Group hereby covenants and agrees with Casper and the Casper
Shareholders as follows:
10.1 Cooperation by Group. Group will use its reasonable best
efforts, and will cooperate with Casper and the Casper Shareholders, to secure
all necessary consents, approvals, authorizations, exemptions and waivers from
third parties as shall be required in order to enable Group to effect the
transactions contemplated on its part hereby, and Group will otherwise use its
reasonable best efforts to cause and consummation of such transactions in
accordance with the terms and conditions hereof and to cause all conditions
contained in this Agreement over which it has control to be satisfied. Group
further agrees to deliver to Casper prompt written notice of any event or
condition known to or discovered by Group, which if it existed on the date of
this Agreement or on the Closing Date, would result in any of the
representations or warranties of Group contained herein being untrue in any
material respect.
10.2 Books and Records; Personnel. At all times after the Closing
Date, Group shall allow the Casper Shareholders, upon reasonable advance notice
to Group, access to all Books and Records of Casper, to the extent necessary or
desirable in anticipation of, or preparation for, existing or future
litigation, tax returns or audits, or reports to or filings with governmental
agencies, during normal working hours at Group's principal place of business or
at any location where such Books and Records are stored, and the Casper
Shareholders shall have the right, at the Casper Shareholders' sole cost, to
make copies of any such Books and Records.
10.3 Further Assurances. At any time or from time to time after the
Closing Date, Group shall, at the request of the Casper Shareholders and at the
Casper Shareholders' expense, execute and deliver any further instruments or
documents and take all such further action as the Casper Shareholders may
reasonably request in order to consummate and make effective the transactions
contemplated by this Agreement.
10.4 Consents. Group covenants to obtain as soon as practicable after
the execution of this Agreement all governmental and third party consents and
approvals necessary to permit the performance of its obligation to consummate
the transactions contemplated by this Agreement.
10.5 Registration of Group Stock for Resale. (a) Group agrees to use
reasonable efforts to register the Group Stock to be received by Xxxxxx and the
ESOP for resale by them under the Securities Act and any applicable Acts. All
costs of such registration (except for any underwriting commissions and
discounts and fees of legal counsel for Xxxxxx or the ESOP) shall be paid by
Group. Xxxxxx and the ESOP agree to provide any information, and sign any
certifications or documents, that may be reasonably requested by Group in order
to effect the registration of the Group Stock for resale under the Securities
Act.
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(b) Until the Group Stock of Xxxxxx or the ESOP is properly
registered for resale under the Securities Act and free of any restrictions on
transfer, Xxxxxx or the ESOP, as the case may be, shall be protected from any
decreases in fair market value of the Group Stock held by such party. If the
Group Stock is registered for resale under the Securities Act and free of
transfer restrictions at the time of the closing of the IPO, and the initial
public offering price of Group Stock in the IPO equals or exceeds the price
used in Section 3.3 to determine the number of issued shares of Group Stock,
Xxxxxx and the ESOP shall not be entitled to any further consideration. If the
Group Stock of Xxxxxx or the ESOP does not become registered for resale and/or
free of transfer restrictions until after the closing of the IPO, Group agrees
to pay Xxxxxx or the ESOP, as the case may be, such additional cash
consideration (the "Additional Consideration") as equals any excess of the
total dollar amount of Group Stock issued to Xxxxxx or the ESOP, as the case
may be, at the Closing, as calculated under Section 3.1, over the fair market
value of such Group Stock on the date that is the later to occur (the
"Determination Date") of (i) the effectiveness of the registration for resale
of the Group Stock under the Securities Act, (ii) the elimination of any
transfer restrictions, or (iii) with respect to the ESOP only, the receipt of
the IRS Qualification Letter. The fair market value will equal the average of
the average high asked and low bid prices for the five trading days preceding
the Determination Date on which the determination of fair market value is made.
In no event shall the Determination Date be later than the second anniversary
of the Closing, at which time the Group Stock issued to Xxxxxx and the ESOP
should be freely tradable under Rule 144 promulgated under the Securities Act.
ARTICLE XI
THE CLOSING
11.1 Time and Place. Subject to the satisfaction or waiver of all
conditions on the part of each party hereto to consummate the transactions
contemplated hereby, the closing of the transactions contemplated by this
Agreement (the "Closing") will take place at the same time and place as the
closing of the IPO unless Casper and Group shall decide to close on an earlier
date, in which case the Closing will occur at 10:00 a.m. Dallas, Texas time at
the offices of Brown, Drew, Xxxxxx & Xxxxxxxx, located at 000 Xxxx Xxxxx
Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxx 00000, or at such other time, at such other
place or on such other date as the parties hereto may mutually agree.
11.2 Obligations of Casper and the Casper Shareholders. At the
Closing, Casper and the Casper Shareholders, as applicable, shall execute (as
applicable) and deliver to Group, against Group's execution (as applicable) and
delivery of the items specified in Section 11.3, the following:
11.2.1 the Consulting Agreement;
11.2.2 the Casper Stock together with stock powers duly endorsed
in favor of Group by the Casper Shareholders;
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11.2.3 certified copies of the Articles of Incorporation, Bylaws
and Good Standing and Existence Certificates of Casper and the
Subsidiary;
11.2.4 all Books and Records, memoranda, data and other documents
related to the assets of Casper, the Subsidiary and the Business,
including all Contracts and Leases of Casper;
11.2.5 the certificates required by Sections 8.1, 8.2 and 8.3;
11.2.6 any consents to assignment of the Contracts and Leases
required by Sections 4.4;
11.2.7 the legal opinion as required by Section 8.6;
11.2.8 evidence of any necessary governmental or third party
consents or approvals as required by Sections 8.4 and 9.6;
11.2.9 resignations of existing directors of Casper and the
Subsidiary;
11.2.10 any signature cards, account agreement amendments and
other documents, if and to the extent requested by Group, that are
necessary to change the persons authorized to withdraw funds or
investments from any and all bank, brokerage, savings and investment
accounts of Casper and the Subsidiary; and
11.2.11 such other instruments, documents and certificates in
form and substance reasonably satisfactory to Group, as Group shall have
reasonably required.
11.3 Group's Obligations. At the Closing, Group shall execute (as
applicable) and deliver to the Casper Shareholders and Casper, as applicable,
against execution (as applicable) and delivery by the Casper Shareholders, as
applicable, and Casper of the items specified in Section 11.2, the following:
11.3.1 a wire transfer or bank cashier's or certified check, as
applicable, for the cash portion of the Casper Purchase Price, as it may
be adjusted, pursuant to Article III;
11.3.2 certificates representing the Group Stock to be issued to
Xxxxxx and the ESOP as a portion of the Casper Purchase Price, as it may
be adjusted, pursuant to Article III;
11.3.3 the Consulting Agreement;
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11.3.4 evidence of any necessary governmental or third party
consents or approvals as required by Sections 7.4 and 10.4;
11.3.5 the certificates required by Sections 7.1, 7.2 and 7.3;
11.3.6 the legal opinion required by Section 7.6; and
11.3.7 such other instruments, documents and certificates in form
and substance reasonably satisfactory to Casper and the Casper
Shareholders, as they shall have reasonably required.
ARTICLE XII
TERMINATION
12.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing Date as follows:
12.1.1 by the mutual written consent of Group and Casper;
12.1.2 unilaterally by Group, on one hand, or by Casper, on the
other hand, in writing, without liability on the part of the terminating
party on account of such termination (provided the terminating party is
not otherwise in material default or breach of this Agreement, or has
failed or refused to close without justification hereunder), if the
Closing Date shall not have occurred on or before 5:00 p.m. Central
Standard Time on June 15, 1997 ("Final Termination Date"); provided,
however, that Group may unilaterally extend the Final Termination Date
by 30 days upon the payment to Casper of a fee of $50,000 (the
"Extension Fee"); provided further, however, that if all necessary
consents and approvals to be obtained by Casper and the Casper
Shareholders have not been obtained by June 14, 1997, the Final
Termination Date automatically shall be extended until all such consents
and approvals have been obtained but in no event later than June 30,
1997;
12.1.3 unilaterally by Group, on one hand, or by Casper and the
Casper Shareholders, on the other hand, in writing, without prejudice to
other rights and remedies which the terminating party may have (provided
the terminating party is not otherwise in material default or breach of
this Agreement, or has failed or refused to close without justification
hereunder), if the other party shall (i) materially fail to perform its
covenants or agreements contained herein required to be performed prior
to the Closing Date, or (ii) materially breach or have breached any of
its representations or warranties contained herein.
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12.2 Remedies Upon Default or Failure to Close.
12.2.1 If Group shall default in the performance of its
obligations under this Agreement, and shall for this reason be unable to
consummate this Agreement on the Closing Date in accordance with the
terms hereof, and provided that neither Casper nor any of the Casper
Shareholders are not then in material default of any of their respective
obligations hereunder, Casper and the Casper Shareholders shall be
entitled (i) to waive any such default by Group and to require Group
through specific performance (which Group acknowledges to be an
appropriate remedy) to consummate the sale in accordance with the terms
of this Agreement, or (ii) to terminate this Agreement by written notice
to Group; provided, however, that Group shall have a period of ten (10)
days following written notice from Casper and the Casper Shareholders to
cure any breach of this Agreement, if such breach is curable. The
availability of specific performance shall be in addition to any other
remedies or claims for damages Casper or the Casper Shareholders may
have at law or in equity for breaches or defaults by Group of its
obligations hereunder. Upon any termination under this Section 12.2.1,
Casper shall be entitled to retain the Deposit and any Extension Fee,
but said sums shall not constitute liquidated damages.
12.2.2 If Casper or any of the Casper Shareholders shall default
in the performance of their respective obligations under this Agreement
and shall for that reason be unable to consummate this Agreement on the
Closing Date in accordance with the terms hereof, and if Group is not
then in material default of any of its obligations hereunder, Group
shall be entitled either (i) to waive any such defaults by Casper or the
Casper Shareholders and to require Casper and the Casper Shareholders
through specific performance (which Casper and the Casper Shareholders
acknowledge to be an appropriate remedy) to consummate the sale in
accordance with the terms of this Agreement, or (ii) to terminate this
Agreement by written notice to Casper and the Casper Shareholders;
provided, however, that Casper and the Casper Shareholders shall have a
period of ten (10) days following written notice from Group to cure any
breach of this Agreement, if such breach is curable. The availability
of specific performance shall be in addition to any other remedies or
claims for damages Group may have at law or in equity for breaches or
defaults by Casper or the Casper Shareholders of their respective
obligations hereunder. Upon any termination under this Section 12.2.2
or if the Closing does not occur on or before the Final Termination Date
because of a failure of Casper to obtain a necessary consent or approval
listed on Schedule 4.4, Casper shall pay to Group the Deposit, any
Extension Fee and any sums paid by Group for accounting or audit costs
associated with this transaction, but such payment shall not constitute
liquidated damages.
12.3 Effect on Obligations. Termination of this Agreement pursuant to
this Article shall terminate all obligations of the parties hereunder, except
for (i) the obligations under Section 12.2 hereof and (ii) the obligations set
forth in the next succeeding sentence of this Section 12.3. Upon any
termination of this Agreement, each party hereto will redeliver all documents,
work papers and
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other materials of any other party relating to the transactions contemplated
hereby, and all copies of such materials, whether so obtained before or after
the execution hereof, to the party furnishing the same.
ARTICLE XIII
SURVIVAL AND INDEMNIFICATION
13.1 Indemnification of the Casper Shareholders. Group shall
indemnify and hold the Casper Shareholders and their Affiliates (the
"Shareholder Indemnitees") harmless from and against any and all damages,
including exemplary damages and penalties, losses, deficiencies, costs,
expenses, obligations, fines, expenditures, claims and liabilities, including
reasonable counsel fees and reasonable expenses of investigation, defending and
prosecuting litigation (collectively, the "Damages"), suffered by the
Shareholder Indemnitees as a result of, caused by, arising out of, or in any
way relating to (i) any misrepresentation, breach of warranty, or
nonfulfillment of any agreement or covenant on the part of Group under this
Agreement or any misrepresentation in or omission from any list, schedule,
certificate, or other instrument furnished or to be furnished to Casper or the
Casper Shareholders by Group pursuant to the terms of this Agreement, or (ii)
any liability or obligation (other than those for which the Group Indemnitees
are being indemnified for under Sections 13.2 hereof) that pertains to the
ownership, operation or conduct of the Business or assets of Casper arising
from any acts, omissions, events, conditions or circumstances occurring on or
after the Closing Date.
13.2 Indemnification of Group by Casper Shareholders. The Casper
Shareholders, jointly and severally, shall indemnify and hold Group and its
Affiliates (the "Group Indemnitees") harmless from and against any and all
Damages suffered by the Group Indemnitees as a result of, caused by, arising
out of, or in any way relating to (i) any misrepresentation, breach of
warranty, nonfulfillment of any agreement or covenant on the part of Casper or
the Casper Shareholders under this Agreement, or any misrepresentation in or
omission from any list, schedule, certificate or other instrument furnished or
to be furnished to Group by Casper or the Casper Shareholders pursuant to the
terms of this Agreement, or (ii) any liability or obligation (other than those
for which the Shareholder Indemnitees are being indemnified for under Section
13.1 hereof) that pertains to the ownership, operation or conduct of the
Business or the assets of Casper arising from any acts, omissions, events,
conditions or circumstances occurring before the Closing Date.
13.3 Demands. Each indemnified party hereunder agrees that promptly
upon its discovery of facts giving rise to a claim for indemnity under the
provisions of this Agreement, including receipt by it of notice of any demand,
assertion, claim, action or proceeding, judicial or otherwise, by any third
party (such third party actions being collectively referred to herein as the
"Claim"), with respect to any matter as to which it claims to be entitled to
indemnity under the provisions of this Agreement, it will give prompt notice
thereof in writing to the indemnifying party, together with a statement of such
information respecting any of the foregoing as it shall have. Such notice
shall include a formal demand for indemnification under this Agreement. The
indemnifying party shall not be obligated to
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indemnify the indemnified party with respect to any Claim if the indemnified
party knowingly failed to notify the indemnifying party thereof in accordance
with the provisions of this Agreement in sufficient time to permit the
indemnifying party or its counsel to defend against such matter and to make a
timely response thereto including, without limitation, any responsive motion or
answer to a complaint, petition, notice or other legal, equitable or
administrative process relating to the Claim, only insofar as such knowing
failure to notify the indemnifying party has actually resulted in prejudice or
damage to the indemnifying party.
13.4 Right to Contest and Defend. The indemnifying party shall be
entitled at its cost and expense to contest and defend by all appropriate legal
proceedings any Claim with respect to which it is called upon to indemnify the
indemnified party under the provisions of this Agreement; provided, that notice
of the intention to contest shall be delivered by the indemnifying party to the
indemnified party within 20 days from the date of receipt by the indemnifying
party of notice by the indemnified party of the assertion of the Claim. Any
such contest may be conducted in the name and on behalf of the indemnifying
party or the indemnified party as may be appropriate. Such contest shall be
conducted by reputable counsel employed by the indemnifying party, but the
indemnified party shall have the right but not the obligation to participate in
such proceedings and to be represented by counsel of its own choosing at its
sole cost and expense. The indemnifying party shall have full authority to
determine all action to be taken with respect thereto; provided, however, that
the indemnifying party will not have the authority to subject the indemnified
party to any obligation whatsoever, other than the performance of purely
ministerial tasks or obligations not involving material expense. If the
indemnifying party does not elect to contest any such Claim, the indemnifying
party shall be bound by the result obtained with respect thereto by the
indemnified party, having used its reasonable best efforts in resolution. At
any time after the commencement of the defense of any Claim, the indemnifying
party may request the indemnified party to agree in writing to the abandonment
of such contest or to the payment or compromise by the indemnified party of the
asserted Claim, whereupon such action shall be taken unless the indemnified
party determines that the contest should be continued, and so notifies the
indemnifying party in writing within 15 days of such request from the
indemnifying party. If the indemnified party determines that the contest
should be continued, the indemnifying party shall be liable hereunder only to
the extent of the amount that the other party to the contested Claim had agreed
unconditionally to accept in payment or compromise as of the time the
indemnifying party made its request therefor to the indemnified party.
13.5 Cooperation. If requested by the indemnifying party, the
indemnified party agrees to cooperate with the indemnifying party and its
counsel in contesting any Claim that the indemnifying party elects to contest
or, if appropriate, in making any counterclaim against the person asserting the
Claim, or any cross-complaint against any person, and the indemnifying party
will reimburse the indemnified party for any expenses incurred by it in so
cooperating. If the indemnifying party has not chosen to contest a Claim, the
indemnifying party shall cooperate with the indemnified party and its counsel
in contesting any Claim at no cost or expense to the indemnified party.
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13.6 Right to Participate. The indemnified party agrees to afford the
indemnifying party and its counsel the opportunity to be present at, and to
participate in, conferences with all persons, including governmental
authorities, asserting any Claim against the indemnified party or conferences
with representatives of or counsel for such persons.
13.7 Payment of Damages. The indemnifying party shall pay to the
indemnified party in immediately available funds any amounts to which the
indemnified party may become entitled by reason of the provisions of this
Agreement, such payment to be made within five (5) days after any such amounts
are finally determined either by mutual agreement of the parties hereto or
pursuant to the final nonappealable judgment of a court of competent
jurisdiction.
13.8 Survival of Representations and Warranties. The representations
and warranties contained in Articles IV, V, and VI of this Agreement shall
survive the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby for the maximum period allowed by law.
ARTICLE XIV
MISCELLANEOUS
14.1 Notices. Any notice, request, instruction, correspondence or
other document to be given hereunder by either party to the other (herein
collectively called "Notice") shall be in writing and delivered in person or by
courier service requiring acknowledgment of receipt of delivery or mailed by
certified mail, postage prepaid and return receipt requested, or by facsimile,
as follows:
If to Casper or the Casper Shareholders, addressed to:
Casper Air Service
Natrona County International Airport
Xxxx 0, Xxx 0
Xxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxx Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxx, III
Brown, Drew, Xxxxxx & Xxxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000-0000
Facsimile: (000) 000-0000
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If to Group, addressed to:
Aviation Group, Inc.
000 Xxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxx Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxxx & Xxxxxxxxx, L.L.P.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Xx. Xxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
Notice given by personal delivery, courier service or mail shall be effective
upon actual receipt. Notice given by facsimile shall be confirmed by
appropriate answer back and shall be effective upon actual receipt if received
during the recipient's normal business hours, or at the beginning of the
recipient's next Business Day after receipt if not received during the
recipient's normal business hours. All Notices by telecopier shall be
confirmed promptly after transmission in writing by certified mail or personal
delivery. Any party may change any address to which Notice is to be given to
it by giving Notice as provided above of such change of address.
14.2 Governing Law. The provisions of this Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Wyoming (excluding any conflicts-of-law rule or principle that might refer
same to the laws of another jurisdiction).
14.3 Entire Agreement; Amendments and Waivers. This Agreement
(including the exhibits and schedules hereto) constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, and there are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as set forth specifically herein or contemplated
hereby. No supplement, modification or waiver of this Agreement shall be
binding unless executed in writing by the party to be bound thereby. The
failure of a party to exercise any right or remedy shall not be deemed or
constitute a waiver of such right or remedy in the future. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provision hereof (regardless of whether similar), nor shall any
such waiver constitute a continuing waiver unless otherwise expressly provided.
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14.4 Binding Effect and Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
permitted successors and assigns; but neither this Agreement nor any of the
rights, benefits or obligations hereunder shall be assigned, by operation of
law or otherwise, by any party hereto without the prior written consent of the
other party. Nothing in this Agreement, express or implied, is intended to
confer upon any person or entity other than the parties hereto and their
respective permitted successors and assigns, any rights, benefits or
obligations hereunder.
14.5 Severability. If any provision of the Agreement is rendered or
declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by decree of a court of last resort, Group, Casper and
the Casper Shareholders, as applicable, shall promptly meet and negotiate
substitute provisions for those rendered or declared illegal or unenforceable
so as to preserve as nearly as possible the contemplated economic effects of
the transactions, but all of the remaining provisions of this Agreement shall
remain in full force and effect.
14.6 Headings. The headings of the sections herein are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
14.7 Execution. This Agreement may be executed in multiple
counterparts each of which shall be deemed an original and all of which shall
constitute one instrument.
14.8 Publicity. Except as otherwise required by applicable laws or
regulations, Casper, the Casper Shareholders and Group agree to not issue any
press release or make any other public statement, in each case relating to or
connected with or arising out of this Agreement or the matters contained
herein, without obtaining the prior approval of the other parties hereto to the
contents and the manner of presentation and publication thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Stock
Purchase Agreement to be executed on its or his behalf as of the date first
above written.
GROUP:
AVIATION GROUP, INC.
By: /s/ XXX XXXXXXX
----------------------------------
Xxx Xxxxxxx, President
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CASPER:
CASPER AIR SERVICE
By: /s/ XXXX XXXXXX
----------------------------------
Xxxx Xxxxxx, Chairman
ESOP:
CASPER AIR SERVICE EMPLOYEE
STOCK OWNERSHIP PLAN AND TRUST
By: /s/ XXXX XXXXXX
----------------------------------
Xxxx Xxxxxx, Sole Trustee
XXXX XXXXXX:
/s/ XXXX XXXXXX
-------------------------------------
Individually (95,904 shares)
OTHER SHAREHOLDERS:
/s/ XXXX X. XXXXXX
-------------------------------------
Xxxx X. Xxxxxx (1,871 shares)
/s/ XXXXXXX XXXXXX
-------------------------------------
Xxxxxxx Xxxxxx (1,871 shares)
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