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EXHIBIT 10.4
STOCK ISSUANCE AND EXPENSE SHARING AGREEMENT
This Agreement ("Agreement") is dated as of this October 31, 1996,
between Banner Aerospace, Inc., a Delaware corporation ("Banner"), RHI
Holdings, Inc., a Delaware corporation ("RHI") and Aero International, Inc., an
Ohio corporation ("Aero" or the "Corporation").
Recitals
Banner is the holder of 100% of the 1,064 outstanding shares of Common
Stock, $.01 par value, of Aero. Aero desires to issue an additional 248 shares
and transfer those shares, which shares will constitute 19% of the issued and
outstanding Aero securities (the "Securities"), to RHI. RHI desires to acquire
those Securities.
Banner and RHI plan to open an office in Turkey under the legal name
Aero International, Inc., whereby each company may develop its aerospace
business via Aero. Banner and RHI each will be responsible for 50% of the Aero
office expenses.
Agreements
In consideration of the mutual promises herein contained and of other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
Agreements
1. Issuance of the Securities. On the terms and subject to the
conditions set forth in this Agreement, at the Closing (as hereinafter
defined), Aero shall assign, transfer and deliver to RHI, and RHI shall accept
from Aero, the Securities.
2. Acquisition Price; Closing.
(a) The aggregate price for the Securities shall be equal
to Ten Dollars ($10.00) and other valuable consideration (the "Acquistion
Price").
(b) The Closing of the transaction contemplated by this
Agreement (the "Closing") shall take place at 12:00 p.m. on October 31, 1996 or
such other time as the parties agree. At the Closing, RHI shall pay the Price
and Aero shall deliver to RHI the certificates evidencing the Securities.
3. Expense Sharing.
Banner and RHI will jointly open an Aero office in Turkey from which
each company will develop its business. Banner shall keep the books of Aero.
Banner and RHI shall each be responsible for 50% of all of the office expenses.
Banner will xxxx
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RHI, and RHI will reimburse Banner, for 50% of all of the expenses. RHI shall
reimburse Banner within a reasonable time period after RHI receives the Banner
invoice.
4. Representations and Warranties of Aero. Aero represents and
warrants to Banner and RHI that:
(a) Aero is a corporation duly incorporated and validly
existing under the laws of the state of Ohio and has the corporate power and
authority to own its assets.
(b) Aero may issue and own the number and type of
Securities set forth in this Agreement beneficially and of record, free and
clear of all liens, restrictions, encumbrances, charges and adverse claims;
Aero has the full power, capacity and authority to assign, transfer and deliver
the Securities to RHI; and such transfer will vest in RHI good and marketable
title to the Securities, free and clear of all liens, restrictions,
encumbrances, charges and adverse claims.
(c) This Agreement, when executed and delivered by Aero
in accordance with the terms contained herein, will constitute the legal, valid
and binding obligation of Aero, enforceable in accordance with its terms.
(d) Performance of this Agreement and compliance with the
provision hereof will not violate any provision of any applicable law or of the
Certificate of Incorporation or By-Laws of Aero. Such performance or
compliance will not conflict with or result in any material breach of any of
the terms, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance upon
any of the properties or assets of Aero pursuant to the terms of any indenture,
mortgage, deed of trust or other agreement or instrument to which Aero is a
party or by which Aero is bound.
5. Representations and Warranties of Banner. Banner represents
and warrants to Aero and RHI that:
(a) Banner is a corporation duly incorporated and validly
existing under the laws of the State of Delaware and has the corporate power
and authority to own its assets.
(b) This Agreement, when executed and delivered by Banner
in accordance with the terms contained herein, will constitute the legal, valid
and binding obligation of Banner, enforceable in accordance with its terms.
(c) Performance of this Agreement and compliance with the
provisions
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hereof will not violate any provision of any applicable law or of the
Certificate of Incorporation or By-Laws of Banner. Such performance or
compliance will not conflict with or result in any material breach of any of
the terms, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance upon
any of the properties or assets of Banner or any of its subsidiaries pursuant
to the terms of any indenture, mortgage, deed of trust or other agreement or
instrument to which Banner or any of its subsidiaries is a party or by which
Banner or any such subsidiary is bound.
6. Representations and Warranties of RHI. RHI represents and
warrants to Aero and Banner as follows:
(a) RHI acknowledges that it will be receiving the
Securities for its own account entirely and for investment and not with a view
to, or for resale in connection with, any distribution.
(b) RHI is aware that the securities have not been and
are not being registered under the securities act of 1933, as amended, or any
state securities law, and that the Securities may not be publicly transferred
unless so registered or unless exempt from such registration.
(c) This Agreement, when executed and delivered by RHI in
accordance with the terms contained herein, will constitute the legal, valid
and binding obligation of RHI.
(d) RHI is a corporation duly incorporated and validly
existing under the laws of the State of Delaware and has the corporate power
and authority to own its assets and acquire the Securities.
(e) Performance of this Agreement and compliance with the
provisions hereof will not violate any provision of any applicable law or of
the Certificate of Incorporation or By-Laws of RHI. Such performance or
compliance will not conflict with or result in any material breach of any of
the terms, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance upon
any of the properties or assets of RHI or any of its subsidiaries pursuant to
the terms of any indenture, mortgage, deed of trust or other agreement or
instrument to which RHI or any of its subsidiaries is party or by which RHI or
any such subsidiary is bound.
7. Indemnification for Certain Liabilities.
(a) Banner agrees to indemnify and hold RHI and the
Corporation harmless from and against any loss, cost, expense (including,
without limitation,
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reasonable attorneys' fees) or other liability or damage incurred by RHI or the
Corporation resulting from, arising out of, or incurred with respect to: (i)
all liabilities, debts, duties, undertakings and obligations of the
Corporation, commercial or otherwise, known or unknown, fixed or contingent,
xxxxxx or inchoate, liquidated or unliquidated, secured or unsecured, or
otherwise, arising or occurring prior to the Closing; (ii) any income,
transfer, sales, property, use or other taxes and assessments against the
Corporation arising from or assessed for all periods prior to the Closing, or
in connection with the transactions contemplated by this Agreement, and (iii)
any breach by Banner of the representations, warranties or covenants contained
in this Agreement.
(b) RHI hereby agrees to indemnify and hold Banner and
Aero harmless from and against any loss, cost, expense (including, without
limitation, reasonable attorneys' fees) or other liability or damage incurred
by Banner or Aero following the Closing resulting from, arising out of, or
incurred with respect to any breach by RHI of its representations and
warranties contained in this Agreement.
(c) Aero hereby agrees to indemnify and hold Banner and
RHI harmless from and against any loss, cost, expense (including, without
limitation, reasonable attorneys' fees) or other liability damage incurred by
Banner or RHI following the Closing resulting from, arising out of, or incurred
with respect to any breach by RHI of its representations and warranties
contained in this Agreement.
8. Indemnity Procedure.
(a) Any party seeking indemnity pursuant to this
Agreement ("Indemnitee") shall notify the party from whom indemnification is
sought ("Indemnitor") in writing of the existence of any loss, cost, expense,
liability or damage asserted, or any action commenced, against the Indemnitee
("Adverse Claim") in respect of which indemnity properly may be sought against
the Indemnitor pursuant to this Agreement.
(b) Except as set forth below, the Indemnitor shall have
the right, exercisable by written notice to the Indemnitee within thirty (30)
days of receipt of the aforesaid notice, to conduct the defense of, or the
negotiations for settlement with respect to, the Adverse Claim, in good faith
and at Indemnitor's own expense, and the Indemnitor agrees to reimburse the
Indemnitee for any reasonable expenses it incurred as a result of such Adverse
Claim. If the Indemnitor has given the Indemnitee such notice with respect to
an Adverse claim, the Indemnitee shall nevertheless have the right to
participate in the defense or settlement thereof, but such participation shall
be solely at the expense of the Indemnitee, without a right of further
reimbursement for the expense of such participation. If the Indemnitor does
not notify the Indemnitee in writing (within the time frame hereinabove
provided) of Indemnitor's election to conduct the defense of an Adverse Claim,
the Indemnitee may (but need not) conduct the
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defense of such Adverse Claim. If the Indemnitee elects to conduct the defense
of an Adverse Claim, the Indemnitee shall be entitled to payment from the
Indemnitor of all costs of such defense (including attorneys' fees) as such
costs are incurred. If it is determined that the Indemnitee is not entitled to
indemnification from the Indemnitor, then the amount of the costs of such
defense advanced by the Indemnitor shall be reimbursed by the Indemnitee. The
Indemnitee may at any time notify the Indemnitor of Indemnitee's intention to
settle, compromise or satisfy any Adverse Claim (the defense of which the
Indemnitor has not undertaken at the end of the thirty (30) day period
following notice described above) and may make such settlement, compromise or
satisfaction in its sole discretion upon its good faith determination that such
settlement is reasonable and in the best interests of the Indemnitor.
9. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject hereof and
supersedes all prior agreements and understandings, whether written or oral.
There are not representations, warranties, terms, conditions, undertakings or
collateral agreements, express, implied or statutory, between the parties other
than as expressly set forth in this Agreement.
10. Further Assurances. Each party shall execute and deliver all
such further documents and instruments and do all acts and things as the other
party may after Closing reasonably require to carry out or better evidence or
perfect the full intent and meaning of this Agreement and to transfer the
Securities that are the subject hereof.
11. Successors and Assigns. All terms of this Agreement shall be
binding upon Banner and its respective successors and assigns, and shall inure
to the benefit of RHI and its respective successors and assigns.
12. Governing Law. This Agreement shall be construed and enforced
in accordance with the substantive laws of the State of Delaware, without
giving effect to the principles of conflict of law thereof.
13. Notices. Any notice, request, demand or other communication
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been properly given upon receipt if delivered personally, by
courier or by telex or facsimile transmission with confirmation of delivery
received, or seven (7) business days after being deposited in the U.S. mail by
registered or certified mail, postage prepaid, return receipt requested, and
properly addressed as follows (or to such other addresses as the parties may
specify by due notice to the others):
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RHI Holdings, Inc.
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Washington Dulles International Airport
000 Xxxx Xxxxxxx Xxxx
X.X. Xxx 00000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
General Counsel
Banner Aerospace, Inc.
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Washington Dulles International Airport
000 Xxxx Xxxxxxx Xxxx
X.X. Xxx 00000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxxxxxxx
Senior Vice President and Chief
Financial Officer
Aero International, Inc.
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Washington Dulles International Airport
000 Xxxx Xxxxxxx Xxxx
X.X. Xxx 00000
Xxxxxxxxxx, D.C 20041
Attn: Xxxxxx X. Xxxxx
Vice President-Finance and Secretary
14. Amendment, Waivers, Etc. No modification of or amendment to
this Agreement shall be valid or binding unless set forth in writing and fully
executed by the parties hereto and no waiver of any breach of any term or
provision of this Agreement shall be effective or binding unless made in
writing and signed by the party purporting to give the same and, unless
otherwise provided, shall be limited to the specific breach waived.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
16. Effect of Headings. The introduction and paragraph headings
in this Agreement are for convenience of reference only and shall not affect
the construction hereof.
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IN WITNESS WHEREOF, Banner has caused this Agreement to be executed
and RHI has executed this Agreement as of the date first above written.
Attest: RHI Holdings, Inc.
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By: Xxxxxx X. Xxxxxx
Senior Vice President,
General Counsel and Secretary
Attest: Banner Aerospace, Inc.
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By: Xxxxxx X. Xxxxxxxxx
Senior Vice President and
Chief Financial Officer
Attest: Aero International, Inc.
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By: Xxxxxx X. Xxxxx
Vice President and
Secretary
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