ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made and entered into as of this
25/th/ day of May, 2001, by and among AVIATION SALES COMPANY, a corporation
organized and existing under the laws of the State of Delaware, CARIBE AVIATION,
INC., a corporation organized and existing under the laws of the State of
Florida and XXXXXXXX SUNDSTRAND SERVICE CORPORATION, a corporation organized and
existing under the laws of the State of Delaware. Unless otherwise defined
herein, terms the first letter of which are capitalized herein shall have the
meanings ascribed to them in Article 1.
W I T N E S S E T H:
WHEREAS, Seller is an indirect wholly owned subsidiary of Parent;
WHEREAS, Seller is engaged in the Business; and
WHEREAS, Seller desires to sell and assign to Buyer, and Buyer desires
to purchase and assume from Seller, the Purchased Assets and the Assumed
Liabilities, subject to all of the terms and conditions hereof;
NOW, THEREFORE, Buyer, Parent and Seller, in consideration of the
representations, warranties and covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and subject to the terms and conditions hereinafter set forth, and
intending to be legally bound, do hereby agree as follows:
ARTICLE 1
DEFINITIONS
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For purposes of this Agreement:
1.1. "Action" means any action, suit, arbitration, inquiry,
proceeding or investigation by or before any court, governmental or other
regulatory or administrative agency or commission or other tribunal, including
without limitation any arbitrator.
1.2. "Adjusted Working Capital" means Net Working Capital, as shown
on the Final Closing Balance Sheet, as adjusted for those items identified in
the Agreed Accounting Principles.
1.3. "Adjustment Statements" shall have the meaning set forth in
Section 4.3(a).
1.4. "Affiliate" means, with respect to any Entity, any other Entity
directly or indirectly controlling, controlled by, or under common control with
such other Entity. For purposes of the immediately preceding sentence, the term
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with" as used with respect to
any Entity) means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Entity whether
through ownership of voting securities, by contract or otherwise.
1.5. "Agreed Accounting Principles" means those accounting
adjustments and principles set forth on Schedule 1.5. Schedule 1.5 also sets
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forth the calculation of the Target Working Capital in accordance with the
Agreed Accounting Principles.
1.6. "Agreement" means this Asset Purchase Agreement.
1.7. "Assignment and Assumption Agreement" shall have the meaning set
forth in Section 11.2(c).
1.8. "Assumed Liabilities" shall have the meaning set forth in
Section 3.1.
1.9. "Attorneys' Fees" means all reasonable outside attorneys' fees
and out-of-pocket expenses.
1.10. "Aviation Authorities" means the Federal Aviation
Administration and any and all other governmental or quasi-governmental
authorities regulating aspects of aviation, and any successor to any of the
foregoing.
1.11. "Balance Sheet" means the unaudited balance sheet of the Seller
as of March 31, 2001, which is attached hereto as part of Schedule 5.3(a).
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1.12. "Xxxx of Sale" shall have the meaning set forth in Section
11.2(a).
1.13. "Business" means the business of maintaining, repairing and
overhauling hydraulic, pneumatic, electrical and electromagnetic aircraft
components, avionics and instruments as conducted by Seller as of the date
hereof, with such additions or changes thereto in the ordinary course of
business as shall occur after the date hereof but prior to the Closing Date in
accordance with this Agreement.
1.14 "Buyer" means Xxxxxxxx Sundstrand Service Corporation, with its
principal place of business located at 0 Xxxxxxxx Xxxx, 0-0-XX00, Xxxxxxx Xxxxx,
Xxxxxxxxxxx 00000.
1.15. "Buyer Group" shall have the meaning set forth in Section 13.1.
1.16. "Buyer Legal Opinion" shall have the meaning set forth in
Section 10.2(e).
1.17. "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. (S)9601 et seq., as amended.
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1.18. "Closing" shall have the meaning set forth in Section 4.2.
1.19. "Closing Balance Sheet" shall have the meaning set forth in
Section 4.3(a).
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1.20. "Closing Date" shall have the meaning set forth in Section
11.1.
1.21. "Closing Date Payment Amount" means $21,750,000.
1.22. "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
1.23. "Contracts" means all purchase orders, sales orders,
distributor agreements, franchise agreements, sales representation agreements,
warranty agreements, service agreements, leases and subleases of personal
property, collective bargaining agreements and other contracts with labor
unions, employment and consulting agreements, guaranty agreements,
confidentiality agreements and other agreements and contracts, in each case to
which the Seller is a party or by which it or any of the Purchased Assets may be
bound or affected.
1.24. "Damages" means any and all debts, losses, claims, damages,
costs, fines, judgments, penalties, obligations, payments, expenses and
liabilities of every type and nature (including without limitation those arising
out of any Action), together with any reasonable costs and expenses (including,
without limitation, Attorneys' Fees) incurred in connection with any of the
foregoing, including, without limitation, the reasonable cost of the
investigation, preparation or defense of any Action in connection therewith.
1.25. "Deferred Payment Amount" means $750,000.
1.26. "Dollars" or "$" means the lawful money of the United States of
America.
1.27. "Effective Date" shall have the meaning set forth in Section
9.1.
1.28. "Employees" means those employees who are employed by Seller to
whom Buyer offers employment on the Effective Date applicable thereto as set
forth in Section 9.1.
1.29. "Entity" means any individual, corporation, partnership,
limited liability company, trust or unincorporated organization or other entity.
1.30. "Environmental Laws" means applicable federal, state,
provincial, territorial, local and municipal laws; rules, regulations, orders,
permits, approvals, decisions, decrees, ordinances or by-laws having the force
of law; and any common or civil laws; all as adopted or enacted prior to or as
of the Closing Date (or with respect to the representations and warranties made
pursuant to Section 5.10(b), 5.10(c) and 5.11(b), in effect as of the respective
dates such representations and warranties are made) which relate to (a)
pollution or destruction of, or loss of or injury to, or any adverse effect
upon, the environment, (b) the protection, cleanup or restoration of, or
removal, remediation or mitigation of conditions affecting, the environment, (c)
the release, discharge, emission, generation, handling, transportation, use,
treatment, storage or disposal of any Hazardous Substance, (d) the regulation of
the manufacture, processing, distribution or use of chemical substances for
commercial purposes, (e) radioactive materials, by-products or waste, or (f) the
protection of the safety or health of humans, including, but not limited to,
exposure to Hazardous Substances.
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1.31. "Environmental Liabilities" means all liabilities and
obligations, including, without limitation, all Damages, whether direct or
indirect, known or unknown, current or potential, past, present or future,
imposed by, under or pursuant to Environmental Laws, including, without
limitation, those related to Remedial Actions, and all reasonable fees,
disbursements and expenses of counsel, experts, personnel and consultants based
on, arising out of or otherwise in respect of: (i) the ownership or operation of
the Business, Real Property or any other real property, assets, equipment or
facilities, by Seller or any of its predecessors or Affiliates; (ii) the
environmental conditions existing on the Closing Date on, under, above, or about
any Real Property or any other real property, assets, equipment or facilities
currently or previously owned, leased or operated by Seller or any of its
predecessors or Affiliates, to the extent that any such environmental conditions
are in violation of Environmental Laws; and (iii) expenditures necessary to
cause any Real Property or any aspect of the Business to be in compliance with
any and all requirements of Environmental Laws as of the Closing Date necessary
to make full economic use of any Real Property.
1.32. "Environmental Licenses" shall have the meaning set forth in
Section 5.11(b).
1.33. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
1.34. "ERISA Plan" means an "employee benefit plan" as defined in
section 3(3) of ERISA.
1.35. "Escrow Agent" means Chase Manhattan Trust Company, National
Association.
1.36. "Escrow Agreement" means the escrow agreement by and among
Buyer, Seller and the Escrow Agent in substantially the form attached hereto as
Exhibit B.
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1.37. "Final Closing Balance Sheet" shall have the meaning set forth
in Section 4.3(b).
1.38. "Financial Statements" shall have the meaning set forth in
Section 5.3(a).
1.39. "Former Facility" means the facility formerly occupied by
Seller and located at 0000 Xxxxxxxxx 00/xx/ Xxxxxx, Xxxxx, Xxxxxxx 00000.
1.40. "GAAP" means generally accepted accounting principles in the
United States of America.
1.41. "Hazardous Substance" means any pollutant, contaminant,
petroleum or petroleum product, asbestos, polychlorinated byphenyl, dangerous or
toxic substance, hazardous or extremely hazardous substance or chemical, solid
or hazardous waste, special, liquid, industrial or other waste, hazardous
material, or other material, substance or agent (whether in solid, liquid or
gaseous form) that is regulated pursuant to Environmental Laws.
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1.42. "Intellectual Property" means all Seller's right, title and
interest in and to domestic and foreign letters patent, patents, patent
applications, docketed patent disclosures, patent licenses, other patent rights,
trademarks, trademark registrations, trademark applications, trademark licenses,
other trademark rights, service marks, service xxxx registrations, service xxxx
applications, service xxxx licenses, other service xxxx rights, company names
(including, without limitation, the name "Caribe Aviation" and all variants
thereof), trade names, trade name licenses, trade dress, brand names, brand
marks, logos, slogans, ideas, processes, copyrights, copyright registrations,
copyright applications, Know-How, Know-How licenses, computer software owned,
computer software licenses, computer data, licenses and sublicenses granted and
obtained with respect thereto, and any divisions, extensions, renewals,
reissues, continuations, or continuations in part, and rights thereunder,
remedies against infringement thereof, and rights to protection of interests
therein under the laws of all jurisdictions with respect to any of the
foregoing.
1.43. "Know-How" means trade secrets, know-how (including product
know-how and use and application know-how), formulas, processes, product
designs, inventions, specifications, quality control procedures, manufacturing,
cost and pricing data, parts trading information, engineering and other
drawings, technology, technical information, safety information, lab journals,
engineering data and design and engineering specifications, research records,
market surveys and promotional literature, customer and supplier lists and
similar data, including all depictions, descriptions, drawings and plans
thereof.
1.44. "Lease" means that certain Lease Agreement dated as of December
17, 1998 by and between the Trustee, as Lessor, and Parent, as Lessee, pursuant
to which Parent leases the Leased Real Property.
1.45. "Leased Real Property" means the real property located at 0000
Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000 that is occupied by the Seller as of the
date of this Agreement.
1.46. "Licenses" means the permits, licenses, certificates, orders,
consents, authorizations, franchises and other approvals from, or required by,
any governmental authority that are used by or necessary to own and to operate
the Business, as currently configured and normally operated (or as proposed or
required to be configured or operated), together with any applications for the
issuance, renewal, modification, extension or expansion thereof and all
supporting information and analyses.
1.47. "Lien" means any lien, mortgage, security interest, charge,
pledge, retention of title agreement, adverse claim, easement, encroachment,
restrictive covenant or other encumbrance affecting title to any property of any
sort.
1.48. "Listed Hazardous Site" means any site or facility listed or
proposed for listing on the National Priority List established pursuant to
CERCLA or on any list established by any governmental authority or body of sites
requiring or potentially requiring Remedial Action.
1.49. "Material Adverse Effect" means (a) a material adverse effect
on the Business, the Purchased Assets, Assumed Liabilities, financial condition
or results of operations
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of Seller, taken as a whole (without giving effect to any effect on the Retained
Assets or the Retained Liabilities), or (b) a material adverse effect on the
ability of Seller to consummate the transactions contemplated by this Agreement.
1.50. "NFA" means a determination of No Further Action or equivalent,
with or without conditions, by the appropriate governmental authority or body.
1.51. "Party" means Buyer, Parent or Seller, referred to
individually, and "Parties" means Buyer, Parent and Seller, referred to
collectively.
1.52. "Plans" shall have the meaning set forth in Section 5.14(a).
1.53. "Prime Rate" means the rate per annum equal to the publicly
announced prime commercial lending rate of Chase Manhattan Bank (or any
successor thereof) in effect from time to time, changing as such publicly
announced rate changes, effective as of the date Chase Manhattan Bank publicly
announces such change.
1.54. "Purchase Price" shall have the meaning set forth in Section
4.1.
1.55. "Purchased Assets" shall have the meaning set forth in Section
2.1.
1.56. "Real Property Purchase Price" means $8,500,000 to be paid to
the Trustee for the purchase of the Leased Real Property.
1.57. "Reciprocal Easement Agreement" means that certain easement
agreement by and between Buyer and the Trustee in substantially the form
attached hereto as Exhibit C.
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1.58. "Related Person" means Seller and any trade or business whether
or not incorporated, which, together with the Seller would, as of any date of
determination, be treated as a single employer under Section 414 of the Code.
1.59. "Remedial Action" means actions required by Environmental Laws
to (a) clean up, contain, control, mitigate, remove, treat or in any other way
remediate any Hazardous Substance, (b) prevent the release of any Hazardous
Substance so that it does not migrate or endanger or threaten to endanger public
health or welfare or the environment, or (c) perform studies, investigations and
evaluations related to any such Hazardous Substances. A Remedial Action shall
be deemed complete upon receipt of an NFA.
1.60. "Repairs" means the performing of maintenance, repair or
overhaul activities on the components identified on Schedule 1.60.
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1.61. "Retained Assets" shall have the meaning set forth in Section
2.2.
1.62. "Retained Liabilities" shall have the meaning set forth in
Section 3.2.
1.63. "Returns" shall have the meaning set forth in Section 5.9.
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1.64. "Sale" means the purchase of the Purchased Assets and the
assumption of the Assumed Liabilities by Buyer at the Closing.
1.65. "Sale Confidentiality Agreements" shall have the meaning set
forth in Section 7.10.
1.66. "Seller" means Caribe Aviation, Inc., a corporation organized
and existing under the laws of the State of Florida, with its principal place of
business located at 0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000.
1.67. "Seller Employee Benefit Plan" shall have the meaning set forth
in Section 5.14(a).
1.68. "Seller Group" shall have the meaning set forth in Section
13.2.
1.69. "Seller's Knowledge" means the actual knowledge of the persons
listed on Schedule 1.69.
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1.70. "Seller Legal Opinion" shall have the meaning set forth in
Section 10.1(g).
1.71. "Survival Period" shall have the meaning set forth in Section
13.6(b).
1.72. "Target Working Capital" means $7,094,792, which is the Working
Capital as of March 31, 2001 calculated in accordance with the Agreed Accounting
Principles, all as shown on Schedule 1.5.
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1.73. "Tax" or "Taxes" means (a) all income, profits, franchise,
gross receipts, capital, sales, use, withholding, municipal license (patents),
value added, ad valorem, transfer, employment, social security, disability,
occupation, property, severance, production, excise and other taxes, duties and
other similar governmental charges and assessments imposed by or on behalf of
any government or taxing authority (including interest and penalties thereon and
additions thereto), and (b) any obligations under any agreements or arrangements
with respect to any Taxes described in clause (a) above.
1.74. "Trustee" means Xxxxx Fargo Bank Northwest, National
Association, solely in its capacity as Owner Trustee of the Aviation Sales Trust
1998-1.
1.75. "Unaffiliated Firm" shall have the meaning set forth in Section
4.3(b).
1.76. "Underground Storage Tank" has the meaning ascribed to such
term in Section 6901 et seq., as amended, of the Resource Conservation and
Recovery Act of 1976, as amended, or any applicable state or local statute, law,
ordinance, code, rule, regulation, order, ruling or decree governing underground
storage tanks.
1.77. "United States" means the 00 xxxxxx xx xxx Xxxxxx Xxxxxx xx
Xxxxxxx and the District of Columbia.
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1.78. "Working Capital" means the current assets included in the
Purchased Assets minus the current liabilities included in the Assumed
Liabilities, in each case as shown on the Closing Balance Sheet or the Final
Closing Balance Sheet, as the case may be.
ARTICLE 2
SALE AND PURCHASE OF PURCHASED ASSETS
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2.1. Purchased Assets. Subject to the terms and conditions hereof, Seller
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shall sell, assign, transfer and deliver to Buyer, and Buyer shall purchase, pay
for and accept from Seller, all of the Business, properties, rights and assets
of Seller used in or otherwise related to the Business (except for the Retained
Assets), tangible and intangible, real, personal and mixed, wherever located,
whether now existing or hereafter acquired, together with all of the goodwill
associated therewith (collectively, the "Purchased Assets"). The sale,
assignment, transfer and delivery of the Purchased Assets shall be free and
clear of all Liens. Without limiting the generality of the foregoing, the
Purchased Assets shall exclude the Retained Assets and shall include, as the
same exist on the Closing Date:
(a) All accounts and notes receivable of Seller (other than accounts
and notes receivable that are owed by Parent or any Affiliate of Parent);
(b) All of Seller's personal property, including, without limitation,
all furniture, office equipment and supplies, computer hardware, communications
and peripheral equipment, tools, dies and product tooling and all vehicles,
machinery and equipment listed or required to be listed on Schedule 5.3(e);
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(c) The Intellectual Property;
(d) Any and all insurance claims and rights, and any and all
insurance policies underlying such claims or rights, with respect to injury,
damage or loss occurring on or prior to the Closing Date under all current and
past insurance policies and contracts of Seller, and the proceeds thereof;
(e) All rights of Seller under the Contracts; provided, however, that
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this Section 2.1(e) and any assignment or proposed assignment of such Contracts
shall be subject to Section 7.4;
(f) All of Seller's business papers, books and records in whatever
form (e.g., computerized information and written information), including,
without limitation, sales records, invoices, credit records, customer lists and
records, distributor records, supplier lists and records, price lists,
purchasing materials and records, personnel, labor relations and payroll
records, manufacturing, maintenance and quality control records and procedures,
warranty and service records, blueprints, accounting and financial records,
inventory records, accounts receivable and accounts payable records and files,
tax records and litigation files (other than Tax records and litigation files
related to Retained Assets or Retained Liabilities);
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(g) All of Seller's rights and interests under or pursuant to all
warranties, representations and guarantees of or made by suppliers in connection
with the Purchased Assets or the Assumed Liabilities;
(h) Any and all claims (other than insurance claims which are
governed by Section 2.1(d), but including counterclaims, cross claims and other
claims in the nature of indemnification or contribution), rights and choses in
action against other Entities to the extent relating to any Purchased Assets
(except to the extent such claims, rights or choses in action relate to Retained
Liabilities) or Assumed Liabilities;
(i) All prepaid and similar items, including, without limitation, all
prepaid expenses, deferred charges, deposits, rebates and discounts from vendors
and advance payments;
(j) All of Seller's inventories and supplies, including, without
limitation, raw materials, work in process, finished goods inventory and
packaging and shipping materials, including items in transit or on consignment;
(k) All of Seller's marketing and sales literature (including
catalogs and brochures);
(l) The Licenses; provided, however, that this Section 2.1(l) and any
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transfer or proposed transfer of any of the Licenses shall be subject to Section
7.6(b); and
(m) The goodwill and going concern value and other intangible
assets, if any, of Seller.
2.2. Retained Assets. Notwithstanding anything contained herein to the
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contrary, Seller shall not sell, and Buyer shall not acquire, the following
assets, properties, interests and rights of Seller (the "Retained Assets"):
(a) All cash and cash equivalents, such as bank deposits and
marketable securities;
(b) The Lease;
(c) The shares of capital stock of Aircraft Interior Design, Inc. and
the equity or ownership interests in any other Entity owned by Seller;
(d) The inventory of Seller that is the subject of that certain
Excess Inventory Consignment Agreement, dated December 20, 2000, between
Aviation Sales Bearings Company and Seller;
(e) The accounts receivable of Seller that are the subject of that
certain Excess Accounts Receivable Collection Agreement, dated December 20,
2000, between Aviation Sales Bearings Company and Seller;
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(f) Those insurance claims for property damage to the Former Facility
and insurance claims for damages related to the interruption of business caused
by such property damage, the security deposit in the amount of $32,500 in
respect of the Former Facility and the lease in respect of the Former Facility;
(g) The server, personal computers and other information systems
equipment and software owned, leased or licensed and exclusively used by Parent
but located at the Leased Real Property;
(h) The contracts and other assets identified on Schedule 2.2(h);
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(i) The Purchase Price paid to Seller pursuant to this Agreement; and
(j) All accounts and notes receivable that are owed by Parent or any
Affiliate of Parent.
ARTICLE 3
LIABILITIES
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3.1. Assumed Liabilities. On the Closing Date, Buyer shall assume and agree
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to pay, perform and discharge only (a) those liabilities and obligations
accruing or arising after the Closing Date under Licenses or Contracts forming
part of the Purchased Assets, except for those liabilities and obligations
described on Schedule 3.2, and (b) accounts payable, trade obligations and
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accrued expenses incurred in the ordinary course of business of the Business
(excluding all accounts payable and trade obligations that are owed to Parent or
any Affiliate of Parent) in the amounts reflected on the face of the Final
Closing Balance Sheet (collectively, the "Assumed Liabilities"). Buyer shall not
assume any other liabilities or obligations whatsoever of Seller.
3.2. Retained Liabilities. Notwithstanding anything herein to the contrary,
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Seller agrees that it shall retain, and acknowledges that Buyer has not agreed
to pay, shall not assume and shall not have any liability or obligation with
respect to, any and all liabilities and obligations of Seller, whether fixed,
absolute or contingent, material or immaterial, matured or unmatured, other than
the Assumed Liabilities (the "Retained Liabilities"). Without limiting the
generality of the foregoing, Retained Liabilities shall include the following:
(a) All accounts payable, trade obligations and notes payable that are
owed to Parent or any Affiliate of Parent;
(b) All liabilities and obligations for Taxes in respect of the
operation of the Business prior to the Closing Date;
(c) All Environmental Liabilities;
(d) All liabilities and obligations of Seller (other than those that
are expressly Assumed Liabilities) to any employee of Seller, to the extent such
liability or
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obligation arises during or as a result of such employee's employment by Seller,
or arises under or in connection with any Contract or Seller Employee Benefit
Plan;
(e) All liabilities and obligations under Contracts and Licenses that
are not assigned or transferred to Buyer at the Closing pursuant to this
Agreement and all liabilities and obligations under the Contracts listed on
Schedule 3.2;
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(f) All liabilities and obligations of or incurred by Seller or any of
its Affiliates to the extent relating to the Retained Assets; and
(g) All liabilities and obligations to the extent arising out of
circumstances or events occurring or existing on or prior to the Closing Date,
including, without limitation, Actions pending or threatened on or prior to the
Closing Date.
ARTICLE 4
PRICE
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4.1. Purchase Price. The aggregate purchase price to be paid by Buyer to
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Seller pursuant to this Agreement (the "Purchase Price") shall consist of (a)
the Closing Date Payment Amount, (b) the Deferred Payment Amount and (c) the
assumption of the Assumed Liabilities, subject to adjustment in accordance with
the provisions of this Agreement.
4.2. Payment of Purchase Price.
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(a) Closing Date Payment Amount. At the closing of the transactions
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contemplated hereby (the "Closing"), Buyer shall wire transfer, or cause to be
wire transferred, to a bank account designated by Seller in writing, in
immediately available funds in Dollars, the Closing Date Payment Amount.
(b) Deferred Payment Amount.
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(i) At the Closing, the Buyer shall wire transfer, or cause to be
wire transferred, to the Escrow Agent, the Deferred Payment Amount to be held by
the Escrow Agent in accordance with the terms of the Escrow Agreement for
satisfaction of Buyer's claims, if any, for amounts payable to Buyer under
Section 4.3(c) and Article 13 of this Agreement.
(ii) As more fully described in and subject to the terms of the
Escrow Agreement, on the later to occur of (A) the date that is six months after
the Closing Date or (B) the determination of the Final Closing Balance Sheet in
accordance with Section 4.3, the Parties shall cause the Escrow Agent to pay (A)
to Seller that portion of the Deferred Payment Amount equal to fifty percent
(50%) of the Deferred Payment Amount less the amount of any Indemnity Claim (as
defined in the Escrow Agreement) and less the amount of any undisputed Indemnity
Matters (as defined in the Escrow Agreement) and (B) to Buyer that portion of
the Deferred Payment Amount equal to the amount of any undisputed Indemnity
Matters.
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(iii) As more fully described in and subject to the terms of the
Escrow Agreement, on the first anniversary of the Closing Date, the Parties
shall cause the Escrow Agent to pay (A) to Seller the balance of the Deferred
Payment Amount less the amount of any Indemnity Claim and less the amount of any
undisputed Indemnity Matters and (B) to Buyer that portion of the Deferred
Payment Amount equal to the amount of any undisputed Indemnity Matters.
(iv) To the extent a claim described in Section 4.2(b)(i) is
made by Buyer, any such claim shall apply first to the amounts in the Deferred
Payment Amount to be delivered nearest in time after the time the claim is made.
To the extent any portion of the Deferred Payment Amount is the subject of an
unresolved Indemnity Claim at the end of the one year period referred to in
Section 4.2(b)(iii), such portion of the Deferred Payment Amount shall be held
by the Escrow Agent in accordance with the terms of the Escrow Agreement until
the final resolution of such Indemnity Claim.
(c) Purchase of Leased Real Property. At the Closing, Buyer shall
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wire transfer, or cause to be wire transferred, to a bank account designated by
the Trustee in writing, in immediately available funds in Dollars, against
receipt of fee simple title to the Leased Real Property, the Real Property
Purchase Price.
4.3. Closing Balance Sheet Adjustments.
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(a) Preparation of Closing Balance Sheet. As soon as reasonably
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practicable but not later than sixty (60) days after the Closing Date, Buyer
shall deliver to Seller (i) an unaudited balance sheet of the Business as of the
close of business on the Closing Date (the "Closing Balance Sheet"), and (ii)
the calculation of the Adjusted Working Capital based upon the Closing Balance
Sheet and the Agreed Accounting Principles ((i) and (ii) together, the
"Adjustment Statements"). The Closing Balance Sheet shall be prepared in
accordance with GAAP, except for the absence of notes, and shall be prepared on
a basis consistent with the preparation of the Balance Sheet (with the exclusion
of any Retained Assets and Retained Liabilities reflected on the Balance Sheet).
The calculation of the Adjusted Working Capital shall be prepared in accordance
with GAAP and the Agreed Accounting Principles set forth on Schedule 1.5.
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(b) Review of Adjustment Statements. Within sixty (60) days after
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receipt of the Adjustment Statements, Seller shall either inform Buyer in
writing that the Adjustment Statements are acceptable or object to the
Adjustment Statements in writing setting forth a specific description of
Seller's objections. The failure of Seller to deliver written objections to
Buyer within sixty (60) days after receipt of the Adjustment Statements shall be
deemed acceptance of the Adjustment Statements by Seller. If Seller objects to
the Adjustment Statements and if Buyer does not agree with Seller's objections
(it being agreed that the failure of Buyer to deliver written notice to Seller
of Buyer's disagreement with Seller's objections within fifteen (15) days of
receipt of such objections shall be deemed acceptance by Buyer), or such
objections are not resolved on a mutually agreeable basis within thirty (30)
days after Buyer's receipt thereof, any disagreement between the Parties
regarding the same shall be resolved within an additional sixty (60) day period
by KPMG LLP or if KPMG LLP is not available to serve, then an alternative
unaffiliated accounting firm to be selected by the Parties (the "Unaffiliated
12
Firm"). The decision of the Unaffiliated Firm shall be final and binding upon
the Parties. Upon the agreement of the Parties or the decision of the
Unaffiliated Firm, or if Seller fails to deliver written objection to Buyer
within the sixty (60) day period provided above, the Closing Balance Sheet (as
adjusted, if necessary) shall be deemed the Final Closing Balance Sheet (the
"Final Closing Balance Sheet") and the determination of the Adjusted Working
Capital shall be deemed final. Each Party shall bear the fees, costs and
expenses of its own accountants and shall share equally the fees, costs and
expenses of the Unaffiliated Firm.
(c) Adjustment to the Purchase Price; Procedure. Upon determination
-------------------------------------------
of the Final Closing Balance Sheet and the Adjusted Working Capital in
accordance with Section 4.3(b), the Purchase Price shall be adjusted as follows:
If the Adjusted Working Capital is greater than the Target Working Capital by
$100,000 or more, Buyer shall pay to Seller the difference between the Adjusted
Working Capital and the Target Working Capital, and if the Adjusted Working
Capital is less than the Target Working Capital by $100,000 or more, Seller
shall pay to Buyer the difference between the Target Working Capital and the
Adjusted Working Capital (such payment to be satisfied, to the extent possible,
by way of an offset against the Deferred Payment Amount). Any adjustment to the
Purchase Price required under this Section 4.3(c) that is not satisfied by an
offset against the Deferred Payment Amount shall be made by wire transfer of
immediately available Dollars within five (5) business days after the date that
the determination of the Adjusted Working Capital is deemed final in accordance
with Section 4.3(b), together with interest thereon from the Closing Date to the
date of payment calculated at the Prime Rate from time to time in effect.
4.4. Allocation. The Purchase Price shall be allocated among the Purchased
----------
Assets as set forth on Schedule 4.4. The Parties acknowledge and agree that such
------------
allocation was determined by arm's length negotiation and that no Party will
take a position on any Return, before any governmental agency charged with the
collection of any Tax or in any Action that is inconsistent with the terms of
this Section 4.4 without the prior written consent of the other Parties.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller makes the following representations and warranties to Buyer, each of
which is true and correct on the date hereof, and shall survive after the
Closing in accordance with Section 13.6(b).
5.1. Organization; Power and Authority. Seller is a corporation duly
---------------------------------
organized, validly existing and in good standing under the laws of the State of
Florida. Except for the shares of Aircraft Interior Design, Inc., the Seller
owns no equity interest in any other Entity. Seller has all requisite corporate
power and authority to own or lease the Purchased Assets, to carry on the
Business as it is now being conducted, to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. Seller is duly qualified to transact business and in good standing in
each jurisdiction in which the
13
nature of the Purchased Assets owned or leased by it or the conduct of the
Business conducted by it requires it to be so qualified.
5.2. Due Authorization and Execution; Effect of Agreement. The
----------------------------------------------------
execution, delivery and performance by Seller of this Agreement and the
consummation by Seller of the transactions contemplated hereby have been duly
authorized by all necessary corporate action required to be taken on the part of
Seller. This Agreement has been duly and validly executed and delivered by
Seller and constitutes the valid and binding obligation of Seller, enforceable
in accordance with its terms.
5.3. Financial Information.
---------------------
(a) Financial Statements. Attached hereto as Schedule 5.3(a) are
-------------------- ---------------
(i) unaudited balance sheets for Seller as of December 31, 1999 and 2000, and as
of March 31, 2001; and (ii) unaudited income statements for Seller for the years
ended December 31, 1999 and 2000 and for the three month period ended March 31,
2001 (collectively, the "Financial Statements"). The Financial Statements
present fairly the financial position and results of operations of Seller as of
the dates and for the periods presented in accordance with GAAP (except for the
absence of footnotes and statements of cash flows for the relevant periods)
consistently applied throughout the relevant periods.
(b) Absence of Undisclosed Liabilities. Except as set forth on
----------------------------------
Schedule 5.3(b), Seller has no debts, liabilities or obligations (whether
---------------
absolute, accrued, contingent or otherwise) of any nature whatsoever, except (i)
liabilities which are reflected or reserved against on the Balance Sheet and
(ii) liabilities incurred in the ordinary course of business and consistent with
past practice since the date of the Balance Sheet.
(c) Accounts Receivable. All of Seller's notes and trade
-------------------
accounts receivable arose from bona fide transactions in the ordinary course of
business and are valid, due and owing from third parties.
(d) Inventory. All of Seller's inventory (i) consists of items
---------
of a quantity, quality and mix as are historically consistent with past business
practices and are usable or saleable in the ordinary course of business, (ii)
except as set forth on Schedule 5.3(d), is located at the Leased Real Property
---------------
and has not been consigned to, or held on consignment from, any third party, and
(iii) meets or exceeds all standards established by any applicable governmental
authority or body, including the Aviation Authorities. The inventory is recorded
in the aggregate at the lower of cost or market value after applicable
accounting reserves.
(e) Vehicles, Machinery and Equipment. Schedule 5.3(e) sets
--------------------------------- ---------------
forth a list of each vehicle and each item of machinery and equipment owned or
used by Seller.
5.4. Title to Purchased Assets.
-------------------------
(a) Except as set forth on Schedule 5.4(a), Seller has good and
---------------
exclusive title to the Purchased Assets free and clear of all Liens. As of the
Closing Date, the Purchased Assets shall be free and clear of all Liens. Seller
has the legal right, and all corporate power and authority, to cause the Trustee
to convey fee simple title to the Leased Real Property
14
to the Buyer at the Closing (subject only to the receipt by the Trustee of the
Real Property Purchase Price).
(b) Except as set forth on Schedule 5.4(b), (i) Parent has a
---------------
valid and exclusive leasehold interest in the Leased Real Property free and
clear of any Liens, (ii) there are no pending or threatened condemnation
proceedings or similar proceedings or transactions with respect to the Leased
Real Property, and (iii) neither the improvements on the Leased Real Property
nor the conduct of the Business is in violation of any use or occupancy
restriction, limitation, condition or covenant of record or, to Seller's
Knowledge, any zoning or building law, code or ordinance.
5.5. Contracts. Other than Retained Assets, Schedule 5.5 sets forth
--------- ------------
all (a)(i) Contracts pursuant to which Seller provides or sells services or
products, (ii) Contracts pursuant to which Seller purchases or receives
maintenance, services or supplies, (iii) Contracts pursuant to which Seller
purchases goods or services, and (iv) all leases and subleases of personal
property to which Seller is a party, in each case under this clause (a) where
the total payments by or to Seller are expected to be in excess of $25,000 or
that provides for a term of greater than twelve (12) months; (b) all notes,
indentures, letters of credit, guarantees and other obligations and agreements
for or relating to any lending, borrowing or other similar obligation entered
into by Seller; (c) all joint venture or partnership agreements to which Seller
is a party; (d) all agreements restricting the right of Seller or the Business
to compete, to sell to or purchase from any Entity or to hire any person; (e)
all contracts or agreements providing for indemnification or exoneration by
Seller; (f) all contracts with the United States government or any agency
thereof, and (g) any other contracts, agreements or commitments to which Seller
is a party or otherwise bound that either (i) involve payments or receipts in
excess of $25,000 in cash or property value, (ii) have a term greater than
twelve (12) months or (iii) are material to the business, operations, results of
operations or financial condition of the Business. As of the date hereof, each
Contract is valid and binding and in full force and effect and neither Seller
nor any other party to any such Contract is in breach of any of its obligations
thereunder. No event, occurrence or condition exists which, with the lapse of
time, the giving of notice, or both, would become a default under any Contract.
True and correct copies of all Contracts and any amendments thereto have been
delivered to Buyer. There is no Contract with respect to which the cost that
will be incurred to complete performance on the part of the Seller exceeds the
remaining amount which the other party thereto is obligated to pay. The
Contracts do not contain any restrictions on closing any facility or
discontinuing operations at any facility included as a Purchased Asset.
5.6. Leases. Except for the Lease and the lease in respect of the
------
Former Facility, there are no leases, subleases and other arrangements relating
to real property, whether as lessor, sublessor, lessee, sublessee or otherwise,
to which Seller is a party.
5.7. Employees.
---------
(a) Schedule 5.7(a) contains a correct and complete list of the
---------------
employees of Seller who were employed by Seller as of May 21, 2001, including
each such person's name, total periods of employment, current position or job
classification, current job status (e.g. active, workers' compensation leave,
----
disability leave, military leave, laid off with recall rights, personal leave,
etc.) and current wage or salary and bonus information. There are no
15
collective bargaining or other labor union contracts applicable to employees of
Seller, no material work stoppage or material labor dispute against Seller is
pending or, to Seller's Knowledge, threatened, and, to Seller's Knowledge, there
is no organizational activity currently underway with respect to Seller.
(b) Seller is not engaged in, and has not received any written
notice of, any unfair labor practice and no such complaints are pending before
the National Labor Relations Board or any other agency having jurisdiction
thereof. Schedule 5.7(b) lists all labor and employment litigation to which
---------------
Seller is a party.
(c) Except as set forth on Schedule 5.7(c), there are no
---------------
employment, severance or consulting agreements between Seller and any of the
current or former employees of Seller. Schedule 5.7(c) also lists the employees
---------------
of seller who have entered into non-competition or non-solicitation agreements
with Seller or any of its subsidiaries, and includes a copy or form of each such
agreement, which agreements shall be included as Purchased Assets.
5.8. Litigation. No judgment, order, writ, injunction or decree of
----------
any court or other governmental agency is in effect against or with respect to
Seller or the Business nor is any Action related to Seller or the Business
pending or, to Seller's Knowledge, threatened.
5.9. Taxes. Except as set forth on Schedule 5.9, all federal, state,
----- ------------
local, foreign and other tax returns, estimates, reports, declarations and forms
(collectively, "Returns") relating to the Seller or the Purchased Assets
required to be filed have been accurately prepared and timely filed within any
applicable extension periods. Except for Taxes that are being contested in good
faith and by appropriate proceedings and except as set forth on Schedule 5.9,
------------
the following Taxes have (or by the Closing Date will have) been duly and timely
paid: (i) all Taxes shown to be due on the Returns; and (ii) all deficiencies
and assessments of Taxes of which written notice has (or by the Closing Date
will have) been received by Seller that are or may become chargeable as a Lien
upon the assets thereof. All Taxes required to be withheld with respect to the
Business or assets thereof and by or on behalf of Seller have been withheld, and
such withheld Taxes have either been duly and timely paid to the proper
governmental agencies or authorities or, if such payment is not yet due, set
aside in accounts for such purpose and will be paid when due.
5.10. Compliance with Laws.
--------------------
(a) Laws other than Environmental Laws. Except as set forth on
----------------------------------
Schedule 5.10(a), Seller is in material compliance with all federal, state,
----------------
territorial, local and foreign laws, statutes, rules, regulations, judgments,
orders, writs, injunctions and decrees, other than Environmental Laws which are
referred to in Section 5.10(b), applicable to the Business or the Purchased
Assets, including, without limitation, applicable rules and regulations of the
Aviation Authorities. There is no Action pending or, to Seller's Knowledge,
threatened relating to the foregoing.
(b) Compliance with Environmental Laws. Except as disclosed on
----------------------------------
Schedule 5.10(b), Seller is and has been for the past five years in consistent
----------------
and continuous compliance with all Environmental Laws relating to or otherwise
affecting the Business and
16
ownership and operation of the Purchased Assets, including the Leased Real
Property, except where failure to comply would not, in the aggregate, have a
Material Adverse Effect on the Business. Seller has not received any notice of
violation or other notification from any governmental authority or body or other
person alleging that Seller, the Purchased Assets or the Business are or have
been in violation of any applicable Environmental Law. None of the Seller, the
Purchased Assets, or the Business are subject to any order, decree, consent
order, consent decree, or agreement with any governmental authority or body
under any applicable Environmental Law. No event has occurred, or condition or
state of facts exists (or would exist upon the giving of notice or lapse of
time, or both), that could give rise to any violation of Environmental Laws with
respect to the Purchased Assets or the Business.
(c) Enforcement Actions. There are no pending or outstanding
-------------------
enforcement actions (including consent agreements, codes, administrative or
judicial complaints, notices of violation) related to Environmental Laws that
are related to the Business or related to the Purchased Assets.
5.11. Licenses.
--------
(a) Licenses other than Environmental Licenses. Seller has
------------------------------------------
obtained all Licenses required by any federal, state, territorial, local or
foreign law, rule or regulation, other than Environmental Laws which are
referred to in Section 5.11(b), relating to or otherwise affecting the Business
or ownership and operation of the Purchased Assets, including the Leased Real
Property. The material Licenses are listed, along with their expiration dates,
on Schedule 5.11(a). Seller is in compliance with all Licenses, except where the
----------------
failure to be in compliance would not have a Material Adverse Effect. No Action
is pending or, to Seller's Knowledge, threatened to revoke or limit any License.
(b) Environmental Licenses. Seller has obtained all Licenses
----------------------
required by any Environmental Laws relating to or otherwise affecting the
Business or ownership and operation of the Purchased Assets, including the
Leased Real Property (the "Environmental Licenses"). The material Environmental
Licenses are listed, along with their expiration dates, on Schedule 5.11(b).
----------------
Seller is in compliance in all material respects with all Environmental
Licenses. No Action is pending or, to Seller's Knowledge, threatened to revoke
or limit any Environmental License.
5.12. Sufficiency of Purchased Assets. The Purchased Assets together
-------------------------------
with the other agreements executed pursuant to the terms hereof constitute all
of the assets, rights and/or interests which are used in the operation of the
Business as it is currently being conducted.
5.13. Intellectual Property.
---------------------
(a) Schedule 5.13(a) sets forth a complete and correct list of
----------------
the patents and trademark and copyright registrations comprising Intellectual
Property. None of the trademark and copyright registrations and patents listed
on Schedule 5.13(a) is the subject of any claim of invalidity and each is in
----------------
full force and effect. Except as set forth on Schedule 5.13(a), Seller owns all
----------------
of the Intellectual Property free and clear of any Liens.
17
(b) Schedule 5.13(b) hereto sets forth a complete and correct
----------------
list of all licenses to and from third parties for patents, trademarks,
copyrights or other intellectual property that are used by Seller.
(c) Seller owns all right, title and interest in and to, or
holds valid licenses from third parties for, patents, trademarks, copyrights or
other intellectual property that are used by Seller, and Seller has the right to
assign to Buyer its ownership or right to use the Intellectual Property
including the licenses referenced above.
(d) The Intellectual Property or any product, formula,
formulation, patent, trademark, service xxxx, trade name, process, method,
substance, part or other material presently being sold or employed by Seller
(whether or not included in the Intellectual Property) does not infringe or
allegedly infringe upon any rights owned or held by any other Entity. There is
not pending or, to Seller's Knowledge, threatened any claim or Action against
Seller or any Seller Affiliate contesting their rights to any Intellectual
Property or the validity of the Intellectual Property and there is no
infringement of the Intellectual Property by any other Entity.
5.14. Employee Benefits.
-----------------
(a) Schedule 5.14(a) lists each pension, retirement, profit-
----------------
sharing, deferred compensation, bonus, incentive, performance, stock option,
stock appreciation, phantom stock, stock purchase, restricted stock, medical,
hospitalization, vision, dental or other health, life, disability, severance,
termination or other employee benefit plan, program, arrangement, agreement,
policy or understanding (including, without limitation, each ERISA Plan)
(collectively, "Plans") to which Seller or any Related Person contributes or is
or has been obligated to contribute or is or has been a party or is or has been
bound or under which Seller or any Related Person may have any liability and
under which Employees (or their respective beneficiaries or dependents) are
eligible to participate or receive benefits or to continue to accrue a benefit
(each, a "Seller Employee Benefit Plan"). Each Seller Employee Benefit Plan
complies in all respects, and has been operated and administered in all respects
in accordance with, all applicable requirements of all laws and regulations of
any public body or authority, including, but not limited to, ERISA, the Code and
applicable laws of foreign jurisdictions, and no "reportable event", "prohibited
transaction" (as such terms are defined in ERISA and the Code, as applicable) or
termination has occurred with respect to any Seller Employee Benefit Plan. Each
Seller Employee Benefit Plan intended to qualify under section 401(a) of the
Code has received an applicable ruling or determination letter concluding that
such Seller Employee Benefit Plan so qualifies, and no event has occurred,
amendment been adopted or action has been taken which would cause such Seller
Employee Benefit Plan to lose its qualified status.
(b) Seller has delivered or made available to Buyer complete and
correct copies of each Seller Employee Benefit Plan and any amendments thereto
and any related trust agreement, funding agreement and insurance contract
relating thereto and, if applicable (i) the most recent actuarial valuation
report, (ii) the last filed Form 5500 or 5500-C and Schedules A and B thereto or
equivalent documents required to be filed in foreign jurisdictions, (iii) the
summary plan description currently in effect for each Seller Employee Benefit
Plan and all material modifications thereto, (iv) the last financial statements
for each Seller Employee Benefit Plan and its related trust, if any, and (v) if
applicable, the most recent determination letter (or
18
equivalent document in a foreign jurisdiction) issued with respect to each
Seller Employee Benefit Plan.
(c) There are no Actions existing or pending (other than routine
claims for benefits) or threatened with respect to any Seller Employee Benefit
Plan.
(d) All contributions required under applicable law, the terms
of any Plan or the terms of any collective bargaining agreement to be made by
Seller and any Related Person to each Seller Employee Benefit Plan have been
made within the time prescribed by such law, Plan or collective bargaining
agreement. There does not exist any accumulated funding deficiency within the
meaning of either section 412 of the Code or section 302 of ERISA as to any
Seller Employee Benefit Plan, nor would there exist any such deficiency but for
the application of an alternative minimum funding standard. There has not been
issued any waiver of the minimum funding standards imposed by the Code with
respect to any such Seller Employee Benefit Plan. There is no Seller Employee
Benefit Plan that is a funded defined benefit pension plan or a foreign pension
plan. No ERISA Plan is a "multiple employer" plan within the meaning of section
4063 or 4064 of ERISA
(e) Except as set forth on Schedule 5.14(e), the consummation of
----------------
the Sale will not result in an increase in the amount of compensation or
benefits or accelerate the vesting or timing of payment of any benefits payable
to or in respect of any employee or former employee of Seller or the beneficiary
or dependent of any such employee or former employee.
(f) Neither any employee or former employee of Seller nor any
beneficiary or dependent of any such employee or former employee is or may
become entitled to post-employment benefits of any kind by reason of their
employment with Seller, including, without limitation, death or medical benefits
(whether or not insured), other than (a) coverage mandated by section 4980B of
the Code, or (b) retirement benefits payable under a Seller Employee Benefit
Plan intended to qualify under section 401(a) of the Code or under any other
funded Seller Employee Benefit Plan which is maintained pursuant to the laws of
a foreign jurisdiction and under which assets are sufficient to satisfy all
liabilities accrued thereunder as of the Closing Date.
5.15. No Conflict. Except as set forth on Schedule 5.15, the execution,
----------- -------------
delivery and performance by Seller of this Agreement and the consummation by
Seller of the transactions contemplated hereby: (a) will not result in a
violation by Seller of any provision of any law, rule or regulation, order,
writ, injunction, judgment or decree applicable to Seller or any of its property
or assets; (b) will not require any consent or approval of, or filing with or
notice to, any governmental or regulatory authority under any provisions of law
applicable to Seller; (c) will not violate any provisions of the Articles of
Incorporation or By-Laws or comparable documents of Seller; (d) will not require
any consent, approval or notice under, and will not conflict with, or result in
the breach or termination of, or constitute a default, or an event which with
notice or lapse of time or both would constitute a default under, or result in
the acceleration of the performance by Seller under, any Contract or License;
and (e) will not result in the creation of any Lien upon any of the Purchased
Assets. No Entity has any right of first refusal, preemptive right, option or
other right to acquire any of the Purchased Assets.
19
5.16. Condition of Assets. The personal property to be included in
-------------------
the Purchased Assets, and the improvements and structures located on the Leased
Real Property and the fixtures and appurtenances thereto are in good working
order, normal wear and tear excepted, and are suitable for the uses for which
they are presently being used.
5.17. Absence of Certain Changes. Except as disclosed in Schedule
-------------------------- --------
5.17, since March 31, 2001, there has been no (a) change or event which has had
----
or would reasonably be expected to have a Material Adverse Effect; (b) amendment
or termination, other than in the ordinary course of business, of, or default or
waiver of any right under, any Contract listed on Schedule 5.5 or any License,
------------
or any destruction, damage or other loss in excess of $25,000 to any of the
properties or assets of Seller, whether or not covered by insurance; (c) sale,
lease, or other disposition of any properties or assets other than assets sold,
leased or otherwise disposed of in the ordinary course of business; (d)
purchase, lease or other acquisition of any properties or assets other than in
the ordinary course of business; (e) increase in the compensation payable or to
become payable to any of the Employees except for normal periodic increases in
the ordinary course consistent with past practice; (f) adoption or amendment of
any employment agreement, or pension, retirement, profit-sharing, employee stock
option or stock purchase, bonus, deferred compensation, incentive compensation,
life insurance, health insurance, fringe benefit or similar plan or arrangement
with respect to any Employee except as required by law; (g) change in accounting
methods or principles or cost allocation procedures that affect the financial
statements of Seller except as required by changes in GAAP; (h) employee
strikes, work stoppages or lockouts, or any material change in relations with
Employees, agents, customers or suppliers of Seller; or (i) agreement or
commitment to take any action described in this Section 5.17.
5.18. Environmental Matters. Except as set forth on Schedule 5.18:
--------------------- -------------
(a) There is no Action pending or, to Seller's Knowledge,
threatened in which Seller or any Affiliate of Seller is alleged to be liable or
responsible with respect to (i) the release into the environment of any
Hazardous Substance, whether or not occurring at, on, under or involving the
Purchased Assets, (ii) any site or location that is related to the Purchased
Assets or the Business for which Seller or any Affiliate of Seller has been
designated as a potentially responsible party under CERCLA or any counterpart
law imposing liability for Remedial Action or natural resource damages, or (iii)
damages to natural resources.
(b) No release of any Hazardous Substance is occurring or has
occurred on or to any of the Purchased Assets, or on or to any property or
facility owned, leased or operated by Seller or any Affiliate of Seller related
to the Business, in such manner that under any Environmental Law (i) could
impose liability for Remedial Action, natural resource damages, personal injury
or property damage, (ii) could individually or in the aggregate have a Material
Adverse Effect, or (iii) could result in imposition of a Lien on any of the
Purchased Assets.
(c) There are not now, and there have not been previously,
any Underground Storage Tanks (whether or not currently active) on the Leased
Real Property. No spills, leaks or releases have occurred from or in relation
with any Underground Storage Tanks or piping now or formerly on the Leased Real
Property. All existing Underground Storage Tanks and associated piping are in
sound condition, have been maintained, tested and monitored in
20
compliance with applicable Environmental Laws. Any Underground Storage Tanks now
or previously on the Leased Real Property that were previously removed from
service have been properly closed in compliance with all applicable
Environmental Laws. With respect to each such Underground Storage Tank that has
been closed or removed from service, testing and observations confirm that there
were no spills, leaks or other contamination requiring Remedial Action.
(d) There is no "PCB" equipment as defined in 40 C.F.R. Part
761 at the Purchased Assets. Any PCB equipment which previously existed at the
Purchased Assets has been flushed of polychlorinated byphenyls, or has been
removed and properly disposed of, in compliance with applicable Environmental
Laws.
(e) There is no "Regulated Asbestos Containing Material" as
defined in 40 C.F.R. (S)61.142 at, on or in any of the Purchased Assets.
(f) No Hazardous Substance is being or has been treated,
stored, reclaimed, recycled, or disposed of at, on or in any of the Purchased
Assets or on any property or facility owned, leased or operated by Seller or any
Affiliate of Seller related to the Business.
(g) Neither Seller nor any Affiliate of Seller has (i)
conducted or arranged for the treatment or disposal of any Hazardous Substance
generated at the Purchased Assets or related to the Business, or arranged for
the transportation of any such Hazardous Substance for treatment or disposal, at
any Listed Hazardous Site, or (ii) received any notice (including any
information request from a governmental authority or body related to a Listed
Hazardous Site) that Seller or any Affiliate of Seller is or may be potentially
responsible for Remedial Action at any Listed Hazardous Site.
(h) Seller is not required to place any notice or restriction
relating to the presence of any Hazardous Substance at any of the Purchased
Assets in any document conveying an interest in the Leased Real Property.
5.19. Insurance. All insurance policies owned or held by Seller
---------
which cover the Business or the Purchased Assets are in full force and effect,
all premiums with respect thereto have been paid to the extent due, no notice of
cancellation or termination has been received with respect to any such policy
(other than those policies which Seller has replaced or intends to replace prior
to the expiration thereof by policies providing substantially the same types and
amounts of coverage) and no claim is currently reserved under any such policy.
5.20. Certain Transactions. Except as set forth on Schedule 5.20,
-------------------- -------------
there is no transaction, and no transaction is now proposed, to which Seller and
any Affiliate of Seller was or is to be a party.
5.21. Certain Activities. Neither Seller nor any Affiliate of Seller
------------------
has made any payment or transferred anything of value, directly or indirectly,
including, without limitation, through its representatives or agents, (a) to any
governmental official or employee (including employees of government
corporations), (b) to any officer, director, employee or representative of any
actual or potential customer of Seller, (c) to any officer, director or employee
of Seller or any of its Affiliates, or (d) to any other person if such payment
or transfer would violate the laws
21
of the country in which made or the laws of the United States, including,
without limitation, the United States Foreign Corrupt Practices Act.
5.22. Disclosure. No representation or warranty by Seller contained
----------
in this Agreement nor any statement or certificate furnished or to be furnished
by or on behalf of Seller to Buyer or its representatives in connection herewith
or pursuant hereto contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material fact required to make the
statements contained herein or therein not misleading. There is no fact (other
than matters of a general economic or political nature which do not affect
Seller uniquely) known to Seller that has not been disclosed by Seller to Buyer
that might reasonably be expected to have or result in a Material Adverse
Effect.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer makes the following representations and warranties to Seller,
each of which is true and correct on the date hereof, and shall survive after
the Closing in accordance with Section 13.6(b).
6.1. Organization; Power and Authority. Buyer is a corporation duly
---------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has all requisite power and authority, corporate and otherwise,
to execute, deliver and perform the obligations of Buyer under this Agreement
and to consummate the transactions contemplated hereby.
6.2. Due Authorization and Execution; Effect of Agreement. The
----------------------------------------------------
execution, delivery and performance by Buyer of this Agreement and the
consummation by Buyer of the transactions contemplated hereby have been duly
authorized by all necessary corporate action required to be taken on the part of
Buyer. This Agreement has been duly and validly executed and delivered by Buyer
and constitutes the valid and binding obligation of Buyer, enforceable in
accordance with its terms.
6.3. No Conflict. The execution, delivery and performance by Buyer
-----------
of this Agreement and the consummation by Buyer of the transactions contemplated
hereby: (a) will not result in a violation by Buyer of any provision of any law,
rule or regulation, order, writ, injunction, judgment or decree applicable to
Buyer or any of its property or assets; (b) will not require any consent or
approval of, or filing with or notice to, any governmental or regulatory
authority under any provisions of law applicable to Buyer; (c) will not violate
any provisions of the Certificate of Incorporation or By-Laws or comparable
documents of Buyer; and (d) will not require any consent, approval or notice
under, and will not conflict with, or result in the breach or termination of, or
constitute a default, or an event which with notice or lapse of time or both
would constitute a default under, or result in the acceleration of the
performance by Buyer under, any contract or license of Buyer.
6.4. Litigation. No judgment, order, writ, injunction or decree of
----------
any court or other governmental agency is in effect nor is any Action related to
Buyer pending or, to the
22
knowledge of Buyer, threatened, that in either case would have a material
adverse effect on the ability of Buyer to consummate the Sale.
ARTICLE 7
COVENANTS OF PARENT AND SELLER
------------------------------
Each of Parent and Seller hereby covenants and agrees with Buyer as
follows:
7.1. Cooperation by Parent and Seller. Prior to the Closing, Parent
--------------------------------
and Seller shall take all actions and do all things necessary, proper or
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement and to cooperate with others in
connection with the foregoing, including using reasonable efforts (a) to secure
all consents, waivers, approvals, authorizations, tax exemptions and other
governmental benefits and Licenses from governmental agencies, including,
without limitation, the Aviation Authorities, or third parties as shall be
required in order to enable Seller and Buyer to effect the transactions
contemplated by this Agreement and to enable Buyer to conduct the Business in
substantially the same manner as it was conducted prior to the Closing Date, (b)
to lift or rescind any injunction or restraining order against the transactions,
(c) to effect any necessary registrations and filings, and (d) to fulfill the
conditions to Closing set forth in Section 10.1.
7.2. Pre-Closing Access to Information. From the date hereof through
---------------------------------
the Closing Date, Seller shall, and Parent shall cause Seller to, afford to
Buyer and Buyer's accountants, counsel and other representatives, (a) reasonable
access to, and upon request, copies of, all of the properties, books, contracts,
software, commitments and records of Seller and Seller's Affiliates that are
related to the Business or applicable to the Purchased Assets, and (b)
reasonable access to employees and agents of Seller and such of Seller's
Affiliates that have assets, properties or records related to the Business.
7.3. Conduct of Business. From the date hereof through the Closing
-------------------
Date, except as may otherwise be expressly provided for in this Agreement,
Seller shall, and Parent shall cause Seller to, carry on the Business only in
the ordinary and regular course consistent with past practices and in compliance
with all applicable laws. Without limiting the generality of the foregoing,
Seller shall, and Parent shall cause Seller to: (a) preserve substantially
intact Seller's relationships with suppliers, customers, employees, creditors
and others having business dealings with Seller; (b) maintain in full force and
effect its existing policies of insurance; and (c) continue performance in the
ordinary course of its obligations under the Contracts and other obligations to
be included as part of the Purchased Assets or Assumed Liabilities. Without the
prior written consent of Buyer, Parent and Seller further covenant to Buyer
that, except as may otherwise be required under this Agreement, from the date
hereof to the Closing, Seller will not, and Parent shall cause Seller to not:
(a) incur or permit the incurrence of any new debt, other than
trade payables incurred in the ordinary course of business;
23
(b) purchase any real property or real property interest to be
included as part of the Purchased Assets;
(c) permit to be incurred any Liens on any of the Purchased
Assets;
(d) amend or terminate any Contract or License other than in the
ordinary course of business consistent with past practice;
(e) except for normal merit, or cost-of-living, or promotional
increases to employees in accordance with past practices at Seller,
increase the rate of compensation for, or pay or commit to pay any bonus or
additional compensation to, any of the employees of Seller or otherwise
enter into or alter any employment, consulting or managerial services
agreement affecting Seller or the Business;
(f) adopt or amend any Plan affecting employees of Seller, other
than amendments that are required by law (provided that Seller shall notify
Buyer regarding any such amendments as soon as reasonably practicable);
(g) make or commit to make any capital expenditure;
(h) sell, transfer or otherwise dispose of any Purchased Assets,
except sales of inventory and other property in the ordinary course of
business consistent with past practice or pursuant to Contracts in effect
on the date hereof;
(i) accelerate or delay the sale of the products of, or
provision of services by, Seller or the collection of accounts receivable,
except in the ordinary course of business consistent with past practice;
(j) enter into outside of the ordinary course of business any
transaction, contract or commitment or incur any obligation or liability
which would constitute an Assumed Liability;
(k) waive any right of substantial value, cancel any debt (other
than intercompany debt) owed to or on behalf of Seller or claim against any
other Entity, except in the ordinary course of business, or voluntarily
suffer any extraordinary loss;
(l) sell, assign, transfer, license, abandon or convey any of
the Intellectual Property;
(m) make any change in accounting methods or principles or cost
allocation procedures that affect the financial statements of Seller;
(n) enter into any Contract other than in the ordinary course of
business consistent with past practice;
(o) make any investment, either by purchase of stock or
securities, contributions to capital, property transfers, or purchases of
any property or assets, except
24
the purchase of inventory and other property in the ordinary course of
business consistent with past practice or pursuant to Contracts or
agreements in effect on the date hereof;
(p) take any action that would result in any representation or
warranty of the Seller contained in this Agreement not to be true and
correct on the date of this Agreement or at any future date on or prior to
the Closing Date; or
(q) agree or commit to take any action described in this Section
7.3.
Notwithstanding the foregoing, nothing in this Section 7.3 shall prohibit Seller
and Parent from taking any action, including any action enumerated in this
Section 7.3, without the consent of the Buyer to the extent such action relates
to a Retained Asset.
7.4. Non-Transferability.
-------------------
(a) To the extent that any of the Purchased Assets is not
capable of being sold, assigned, transferred or delivered without the consent or
waiver of any third person (including a government or governmental agency or
body), or if such sale, assignment, transfer or delivery or attempted sale,
assignment, transfer or delivery would constitute a breach thereof or a
violation of any law, decree, order, regulation or other governmental edict,
this Agreement shall not constitute a sale, assignment, transfer or delivery
thereof, or an attempted sale, assignment, transfer or delivery thereof.
(b) Notwithstanding anything in this Agreement to the contrary,
with respect to any Purchased Asset referred to in Section 7.4(a), Seller shall
not be obligated to sell, assign, transfer or deliver to Buyer (and Buyer shall
not be required to accept) such Purchased Asset without first having obtained
all necessary consents and waivers with respect to such Purchased Asset. Parent
and Seller shall use all reasonable efforts, and Buyer shall cooperate with
them, to obtain said consents and waivers and to resolve the impediments to the
sale, assignment, transfer or delivery required by this Agreement and to obtain
any other consents and waivers necessary to convey to Buyer any of the Purchased
Assets.
(c) To the extent that the consents or waivers referred to in
Section 7.4(b) are not obtained by Seller, or until the impediments to the sale,
assignment, transfer or delivery referred to therein are resolved, Seller shall
use all reasonable efforts, with the costs of Seller related thereto to be
promptly reimbursed by Buyer, to (i) provide, at the request of Buyer, to Buyer
the benefits of any Purchased Asset referred to in Section 7.4(a), (ii)
cooperate in any reasonable and lawful arrangement designed to provide such
benefits to Buyer, without incurring any financial obligation to Buyer, and
(iii) enforce, at the request of and for the account of Buyer, any rights of
Seller arising from any Purchased Asset referred to in Section 7.4(a) against
any third person (including a government or governmental agency or body),
including the right to elect to terminate in accordance with the terms thereof
upon the advice of Buyer. Buyer shall not be required to enter into any
arrangement that would impose any additional cost, expense or liability upon
Buyer or that would deprive Buyer of any benefits or profits arising out of the
Purchased Asset in question. Nothing in this Section 7.4 shall affect the
condition to Buyer's obligations set forth in Section 10.1(f).
25
(d) To the extent that Buyer is provided the benefits of any
Purchased Asset referred to in Section 7.4(a) (whether from Seller or otherwise)
in accordance with Section 7.4(c), Buyer shall perform for the benefit of any
third person (including a government or governmental agency or body) the
obligations of Seller thereunder or in connection therewith.
7.5. Further Assurances. At any time and from time to time whether
------------------
before, at or after the Closing Date, Seller shall execute and deliver any
further instruments or documents and take all such further action as Buyer may
reasonably request in order to consummate more effectively the transactions
contemplated by this Agreement.
7.6. Governmental Matters.
--------------------
(a) Governmental Approvals. Seller shall comply with the laws
----------------------
of any state, province and country (including the United States) which are
applicable to the Sale, as contemplated hereby, and pursuant to which government
notification or approval of such transaction is necessary. Seller shall
cooperate with Buyer in providing any information about Seller that is required
for this purpose and in promptly filing, separately or jointly with Buyer, any
applications for such government notification or approval.
(b) License Transfer.
----------------
(i) Except for those Licenses that are not transferable
by law, Seller shall, with Buyer's assistance and cooperation, cause the
issuance or transfer of the Licenses to Buyer upon the Closing Date in form and
substance the same as the Licenses that were held by Seller. Seller, with
Buyer's assistance and cooperation, shall give and make all required notices and
reports to the appropriate persons with respect to the Licenses that may be
necessary for the Sale and the ownership, operation and use of the Purchased
Assets and the Business by Buyer after the Closing Date.
(ii) Seller shall assist and cooperate with Buyer in
obtaining the issuance in the name of Buyer of any License that is not
transferable, and Seller shall with Buyer's assistance and cooperation take all
actions reasonably requested by Buyer to facilitate that issuance, including but
not limited to the preparation of any permit application or necessary documents,
whether for signature by Seller or by Buyer.
(iii) If any License to be transferred or issued to Buyer
hereunder is not transferred or issued to Buyer on or before the Closing Date,
Parent and Seller, with the assistance and cooperation of Buyer, shall take all
necessary steps to implement such transfer or issuance without delay. Pending
any delayed transfer or issuance, Parent and Seller undertake to maintain in
force, and authorize Buyer to operate under and utilize, the Licenses in
question, to the extent permitted by law, including any Environmental Law, for
the period from and after the Closing Date until such Licenses are issued or
transferred to Buyer.
7.7. No Solicitation of Employees. Parent and Seller agree that, for
----------------------------
one (1) year after the Closing Date, neither Parent, Seller nor any of their
respective Affiliates as of the date of this Agreement who remain Affiliates
thereof during such one (1) year term shall, without the prior written consent
of Buyer, solicit the employment of, or employ or offer to employ, any Employees
whose employment with Buyer has not been terminated by Buyer.
26
7.8. No Solicitation of Other Offers. Parent and Seller agree that
-------------------------------
neither shall, and neither shall permit any of its Affiliates, or any officers,
directors, employees, agents or representatives of any of the foregoing to,
directly or indirectly, solicit or initiate (including by way of furnishing any
non-public information concerning the Business or Seller) inquiries or
proposals, or participate in any discussions or negotiations or enter into any
agreement with any Entity, concerning an acquisition of all or any substantial
portion of Seller or the Purchased Assets, except for the transactions with
Buyer contemplated by this Agreement. Parent and Seller shall immediately advise
Buyer of any such inquiry or proposal, including the terms thereof and the
identity of the Entity making such inquiry or proposal.
7.9. Advice of Changes. Parent and Seller will promptly advise Buyer
-----------------
in writing of (a) any event which would render any representation or warranty of
Seller contained in this Agreement, if made on or as of the date of such event
or the date of the Closing, untrue or inaccurate in any material respect, (b)
any change, condition or event that has or could reasonably be expected to have
a Material Adverse Effect on Seller or (c) any failure of Parent or Seller to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied hereunder. Notwithstanding the disclosure to Buyer of any matter
pursuant to this Section 7.9, neither Parent nor Seller shall be relieved of any
liability for, nor shall the providing of such information by Parent or Seller
to Buyer be deemed a waiver of, the breach of any representation, warranty,
covenant or agreement of either Parent or Seller contained in this Agreement or
a waiver of the related indemnification obligations of Seller contained in
Article 13.
7.10. Assignment of Confidentiality Agreements. Neither Seller nor
----------------------------------------
Parent shall amend, modify, or supplement, or grant any consent or waiver under
or with respect to, any confidentiality agreements entered into by Seller (or
its representatives or Affiliates) and each person, corporation, or other Entity
(other than Buyer and its Affiliates and representatives) to whom confidential
information was provided in connection with the sale of the Purchased Assets
(collectively, the "Sale Confidentiality Agreements") without Buyer's prior
written consent. Parent and Seller shall as promptly as reasonably practicable
request each Entity to whom confidential information was provided pursuant to
the Sale Confidentiality Agreements to return to Seller or destroy such
information, in each case as provided in the Sale Confidentiality Agreements.
Prior to the Closing and thereafter, each of Parent and Seller shall use its
respective commercially reasonable best efforts to enforce the Sale
Confidentiality Agreements and cause the same to remain in full force and effect
in accordance with their terms.
7.11. Books and Records; Personnel.
----------------------------
(a) Neither Parent nor any of its Affiliates shall within ten
years after the Closing Date or, with respect to Tax records within the later of
six years or the applicable statute of limitations as extended, dispose of or
destroy any business records or files of Seller or related to the Business for
periods prior to the Closing Date, without first offering to turn over
possession thereof to Buyer by written notice at least sixty (60) days prior to
the proposed dates of such disposition or destruction.
(b) From and after the Closing Date, to the extent reasonably
required by Buyer in connection with the preparation of Tax returns or other
legitimate purposes specified
27
in writing, Parent and Seller shall (subject to applicable contractual and
privacy obligations) allow Buyer and its agents access to all business records
and files (other than those containing competitively sensitive or privileged
information) of Parent or Seller related to the Business, which relate to
periods prior to the Closing Date, upon reasonable advance notice during normal
working hours, and Buyer shall have the right, at its own expense, to make
copies of any such records and files, provided, however, that any such access or
-------- -------
copying shall be had or done in such a manner so as not to interfere with the
normal conduct of business.
(c) From and after the Closing Date, to the extent reasonably
required by Buyer, Parent shall make available to Buyer upon written request
(and at Buyer's expense): (i) personnel to assist in locating and obtaining
records and files for periods prior to the Closing Date; and (ii) personnel
whose assistance or participation is reasonably required in anticipation of,
preparation for, or the prosecution or defense of existing or future claims or
Actions, tax returns or other matters in which the Parties do not have any
material adverse interest; provided, however, that Parent shall not be obligated
-------- -------
to make personnel available to the extent that such availability would interfere
with the normal conduct of business of the Parent.
(d) Any confidential, proprietary or trade secret information
provided under this Section 7.11 may not be disclosed to any third party without
the prior consent of Parent. This obligation of confidentiality shall cease to
apply to information that is in, or enters into, the public domain through no
breach hereof by Buyer, or is required to be disclosed as a matter of law
(provided that Buyer shall give prior notice to Parent of such requirement and
the right to participate in any proceeding regarding such disclosure, and
provided further that Buyer has sought to obtain confidentiality protection for
such information when disclosed).
7.12. Name Change. Promptly after the date hereof, Seller shall, and
-----------
Parent shall cause Seller to, change its name to a name bearing no resemblance
to its present name.
ARTICLE 8
COVENANTS OF BUYER
------------------
Buyer hereby covenants and agrees with Seller as follows:
8.1. Cooperation by Buyer. Subject to its rights under Article 12,
--------------------
prior to the Closing, Buyer will use all reasonable efforts to take all actions
and to do all things necessary, proper or advisable (but without any obligation
to expend funds) to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement and to cooperate with others in
connection with the foregoing, including using reasonable efforts to (a) secure
all consents, waivers, approvals, authorizations, tax exemptions and other
governmental benefits and Licenses from governmental agencies or third parties
as shall be required in order to enable Buyer and Seller to effect the
transactions contemplated by this Agreement, (b) to lift or rescind any
injunction or restraining order against the transactions, and (c) to effect any
necessary registrations and filings.
8.2. Further Assurances. Subject to the other terms and conditions
------------------
of this Agreement, at any time and from time to time whether at, before or after
the Closing Date, Buyer
28
shall execute and deliver any further instruments or documents and take all such
further action as Seller may reasonably request in order to consummate more
effectively the transactions contemplated by this Agreement.
8.3. Books and Records; Personnel.
----------------------------
(a) Neither Buyer nor any of its Affiliates shall within ten
years after the Closing Date or, with respect to Tax records within the later of
six years or the applicable statute of limitations as extended, dispose of or
destroy any business records or files related to the Business for periods prior
to the Closing Date, without first offering to turn over possession thereof to
Seller by written notice at least sixty (60) days prior to the proposed dates of
such disposition or destruction.
(b) From and after the Closing Date, to the extent reasonably
required by Parent in connection with the preparation of Tax returns or other
legitimate purposes specified in writing, Buyer shall (subject to applicable
contractual and privacy obligations) allow Parent and its agents access to all
business records and files (other than those containing competitively sensitive
or privileged information) of Buyer related to the Business, which relate to
periods prior to the Closing Date, upon reasonable advance notice during normal
working hours, and Parent shall have the right, at its own expense, to make
copies of any such records and files, provided, however, that any such access or
-------- -------
copying shall be had or done in such a manner so as not to interfere with the
normal conduct of business.
(c) From and after the Closing Date, to the extent reasonably
required by Parent, Buyer shall make available to Parent upon written request
(and at Parent's expense): (i) personnel to assist in locating and obtaining
records and files for periods prior to the Closing Date; and (ii) personnel
whose assistance or participation is reasonably required in anticipation of,
preparation for, or the prosecution or defense of existing or future claims or
Actions, tax returns or other matters in which the Parties do not have any
material adverse interest; provided, however, that Buyer shall not be obligated
-------- -------
to make personnel available to the extent that such availability would interfere
with the normal conduct of business of the Buyer.
(d) Any confidential, proprietary or trade secret information
provided under this Section 8.3 may not be disclosed to any third party without
the prior consent of Buyer. This obligation of confidentiality shall cease to
apply to information that is in, or enters into, the public domain through no
breach hereof by Parent or its Affiliates, or is required to be disclosed as a
matter of law (provided that Parent shall give prior notice to Buyer of such
requirement and the right to participate in any proceeding regarding such
disclosure, and provided further that Parent has sought to obtain
confidentiality protection for such information when disclosed).
8.4. Cooperation on Remedial Actions. Upon the reasonable request of
-------------------------------
Parent after the Closing, Buyer shall use its reasonable best efforts to assist
Parent in securing an NFA with respect to any Remedial Action undertaken by
Seller or Parent in respect of the Leased Real Property.
29
ARTICLE 9
MUTUAL COVENANTS
----------------
9.1. Employment. Except as otherwise provided herein, Buyer shall
----------
offer employment to each active employee (except for any employee listed or
described on Schedule 9.1(i), each of whom Seller and Buyer mutually agree will
--------------
be retained by Seller) of Seller (a) on the day next following the Closing Date
or such later date as shall be agreed by Buyer and any such employee with
respect to each employee who is actively employed on the Closing Date and (b) on
the day next following the termination of an individual leave of absence, with
respect to each employee who is on workers' compensation, short-term disability
leave, military leave, layoff with recall rights pursuant to the recall
provisions of the location in question, or other approved leave of absence on
the Closing Date (in any case, such commencement day shall be referred to as the
"Effective Date" and all such employees shall be referred to collectively as the
"Employees"). Parent and Seller hereby irrevocably waive, effective as of the
Closing Date, any and all restrictions, covenants, prohibitions or other rights
contained in any employment or other agreement to which Parent or Seller and the
respective Employee are a party that have or could have the effect of
prohibiting any of the Employees from working for Buyer or any of its Affiliates
in any capacity.
9.2. Employee Benefits. From the Effective Date and until the date
-----------------
that is seven months after the Closing Date, Buyer or one of its Affiliates
shall provide the Employees with compensation and employee benefits that are
comparable, in the aggregate, to the compensation and benefits provided by
Seller immediately prior to the Closing Date (which shall include continued
medical insurance with no preexisting condition exclusions). With respect to any
benefits provided to Employees (whether before or after the expiration of the
seven month period referred to in the preceding sentence), Buyer shall give
Employees credit for purposes of vesting and eligibility for periods of service
with the Seller. Pursuant to Section 401(k)(10) of the Code, Seller shall permit
Employees to receive distributions from their accounts in the Parent's 401(k)
Plan and Seller and Buyer shall cooperate to allow Employees, at their option,
to transfer such accounts to a tax-qualified plan sponsored by Buyer or an
Affiliate of Buyer.
ARTICLE 10
CONDITIONS PRECEDENT TO CLOSING
-------------------------------
10.1. Conditions Precedent to Buyer's Obligations. The obligation of
-------------------------------------------
Buyer to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction of the following conditions, any or all of which
conditions may be waived by Buyer, in its sole discretion:
(a) Truth of Representations and Warranties. Each of the
---------------------------------------
representations and warranties made by Seller in this Agreement shall be true
and correct on and as of the Closing Date with the same force and effect as
though such representation and warranty had been made or given on and as of the
Closing Date.
30
(b) Approvals. All required approvals and authorizations of,
---------
filings with and notifications to, all regulatory authorities required for, and
any appropriate approvals of the Aviation Authorities in connection with, the
consummation of the transactions contemplated hereby shall have been obtained or
made and shall be in full force and effect.
(c) Litigation. No injunction or restraining order or other
----------
order shall be in effect forbidding or enjoining the consummation of the
transactions contemplated hereby and no legal action or governmental
investigation shall be pending or threatened which, if adversely determined,
would reasonably be expected to result in any such injunction or order or in a
damage remedy resulting from consummation of such transactions.
(d) Covenants. Parent and Seller shall have performed and
---------
complied with all covenants and agreements required by this Agreement to be
performed by each of them prior to or at the Closing.
(e) Deliveries. Seller shall have made at the Closing the
----------
deliveries to Buyer required to be delivered by Seller pursuant to Section 11.2.
(f) Consents. Seller shall have obtained written consents to the
--------
transfer or assignment to Buyer of the Contracts and Licenses identified on
Schedule 10.1(f).
---------------
(g) Seller Legal Opinion. Buyer shall have received the written
--------------------
opinion of Akerman, Senterfitt & Xxxxxx, P.A., counsel to Seller, dated as of
the Closing Date and in substantially the form attached hereto as Exhibit A (the
---------
"Seller Legal Opinion").
(h) Transfer of Leased Real Property. The Trustee shall have
--------------------------------
conveyed to Buyer, against delivery by Buyer of the Real Property Purchase
Price, insurable, marketable and fee simple title to the Leased Real Property,
free and clear of all Liens.
(i) Title Insurance. The Buyer shall have obtained an American
---------------
Land Title Association ("ALTA")/1992 (Urban) Survey of the Leased Real Property
certified to the title company and otherwise in form reasonably acceptable to
Buyer and a commitment to deliver an ALTA owner's title insurance policy
covering the Leased Real Property in favor of Buyer in an amount acceptable to
Buyer with such endorsements issued by the title company as reasonably may be
requested by Buyer.
(j) Reciprocal Easement Agreement. The Trustee and the Buyer
-----------------------------
shall have entered into the Reciprocal Easement Agreement.
(k) [intentionally omitted]
(l) [intentionally omitted]
(m) [intentionally omitted]
(n) [intentionally omitted]
31
(o) Occupancy of Leased Real Property. Either (i) the Leased
---------------------------------
Real Property shall be occupied exclusively by the Seller, and Parent and its
other Affiliates and all officers, directors and employees of the foregoing
shall have vacated the Leased Real Property or (ii) Parent and the Buyer shall
have entered into a temporary occupancy agreement on terms acceptable to Parent
and the Buyer with respect to the occupancy by Parent of a portion of the Leased
Real Property.
10.2. Conditions Precedent to Seller's Obligations. The obligation of
--------------------------------------------
Seller to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction of the following , any or all of which conditions
may be waived by Seller, in its sole discretion:
(a) Truth of Representations and Warranties. Each of the
---------------------------------------
representations and warranties made by Buyer in this Agreement shall be true and
correct at and as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as of the Closing
Date.
(b) Approvals. All required approvals and authorizations of,
---------
filings with and notifications to, all regulatory authorities required for the
consummation of the transactions contemplated hereby shall have been obtained or
made and shall be in full force and effect.
(c) Litigation. No injunction or restraining order or other
----------
order shall be in effect forbidding or enjoining the consummation of the
transactions contemplated hereby and no legal action or governmental
investigation shall be pending or threatened which, if adversely determined,
would reasonably be expected to result in any such injunction or order or in a
damage remedy resulting from consummation of such transactions.
(d) Covenants. Buyer shall have performed and complied in all
---------
material respects with all covenants and agreements required by this Agreement
to be performed by Buyer prior to or at the Closing.
(e) Buyer Legal Opinion. Seller shall have received the written
-------------------
opinion of Xxxxx Xxxxxx, Esq., dated as of the Closing Date and in substantially
the form attached hereto as Exhibit D (the "Buyer Legal Opinion").
---------
(f) Deliveries. Buyer shall have made at the Closing the
----------
deliveries to Seller required to be delivered by Buyer pursuant to Section 11.3.
ARTICLE 11
CLOSING
-------
11.1. Time and Place. Subject to the terms and conditions of this
--------------
Agreement, the Closing shall take place at the offices of Akerman, Senterfitt &
Xxxxxx, P.A. in Miami, Florida at 10:00 a.m., on May 25, 2001 or at such other
time and place as the Parties shall agree upon in writing (the "Closing Date").
The Closing shall be deemed effective at 11:59 p.m. Eastern time on the Closing
Date.
32
11.2. Items to be Delivered by Seller. At the Closing, Seller shall
-------------------------------
deliver to Buyer or procure the following:
(a) A xxxx of sale in form and substance reasonably satisfactory
to Buyer conveying to Buyer the Purchased Assets (the "Xxxx of Sale"), duly
executed by Seller;
(b) Certificates of the Secretary of each of Seller and Parent
certifying (i) as to the due authorization of this Agreement and the
transactions contemplated hereby by the Board of Directors and shareholder of
Seller and the Board of Directors of Parent; and (ii) the incumbency and
specimen signatures of the officer or officers of Seller and Parent executing
this Agreement and the other agreements to be executed in connection herewith;
(c) An assignment and assumption agreement in form and substance
reasonably satisfactory to Buyer (the "Assignment and Assumption Agreement"),
duly executed by Seller;
(d) The Escrow Agreement, duly executed by Seller;
(e) A Copy of the charter of Seller certified by the Secretary
of State of the State of Florida within ten (10) days prior to the Closing Date;
(f) A certificate of good standing of the Seller issued by the
Secretary of State of the State of Florida within ten (10) days prior to the
Closing Date;
(g) A certificate duly executed by a duly authorized officer of
Seller stating that the conditions set forth in Sections 10.1(a) and 10.1(d) are
satisfied;
(h) A certificate duly executed by a duly authorized officer of
Parent stating that the condition set forth in Section 10.1(d) is satisfied;
(i) The Seller Legal Opinion;
(j) The originals of all certificates of title to the vehicles
included in the Purchased Assets, together with appropriate assignments of title
to such vehicles and other documents necessary for the transfer of any such
vehicle to Buyer;
(k) Termination Statements, as prescribed by the Uniform
Commercial Code as in effect in the State of Florida, or other evidence of
release satisfactory to Buyer, in any case duly prepared and properly executed,
by each Entity that has a security interest in or a Lien against any Purchased
Asset;
(l) A general release by Parent, on behalf of itself and its
other direct and indirect subsidiaries, of all liability of Seller to them and
of any claim that they, or any of them, may have against Seller; and
(m) Such other documents, instruments and certificates as Buyer
may reasonably request in connection with the transactions contemplated by this
Agreement.
33
11.3. Items to be Delivered by Buyer. At the Closing, Buyer shall
------------------------------
deliver to Seller the following:
(a) By wire transfer, the Closing Date Payment Amount in
immediately available funds as specified in Article 4 hereof;
(b) The Assignment and Assumption Agreement, duly executed by
Buyer;
(c) A certificate duly executed by a duly authorized officer of
Buyer stating that the conditions set forth in Sections 10.2(a) and 10.2(d) are
satisfied;
(d) A certificate of an officer of Buyer certifying (i) as to
the due authorization of this Agreement and the transactions contemplated hereby
by Buyer; and (ii) the incumbency and specimen signatures of the officer or
officers of Buyer executing this Agreement and the other agreements to be
executed in connection herewith;
(e) The Escrow Agreement, duly executed by Buyer;
(f) The Buyer Legal Opinion; and
(g) A duly executed Florida resale certificate (which shall
include Buyer's tax registration number) in respect of the Purchased Assets
referred to in Section 2.1(j).
ARTICLE 12
TERMINATION PRIOR TO CLOSING DATE
---------------------------------
12.1. Termination. This Agreement may be terminated at any time prior
-----------
to the Closing Date only as follows:
(a) By the mutual written consent of Buyer, Parent and Seller;
(b) By any Party immediately upon written notice to the other
Parties, if the Closing has not occurred on or before May 31, 2001; or
(c) By any Party immediately upon written notice to the other
Parties if a permanent injunction is issued by a court of competent jurisdiction
or by any regulatory or governmental body which enjoins or otherwise prohibits
the Closing and becomes final and non-appealable.
12.2. Effect of Termination. In the event of any termination of this
Agreement pursuant to Section 12.1 hereof, no Party shall have liability or
further obligations to the other Parties under this Agreement; provided,
--------
however, that such termination shall not relieve any Party of liability for any
-------
willful, material breach of this Agreement.
34
ARTICLE 13
INDEMNIFICATION AND PROCEDURES
------------------------------
13.1. Indemnification by Seller. Subject to the other provisions of
-------------------------
this Article 13 (it being understood that the final determination of the
Adjustment Statements pursuant to Section 4.3 shall not be deemed to waive any
of Buyer's rights to indemnification under this Section 13.1), Seller shall
indemnify and hold Buyer and any Affiliates of Buyer and their respective
employees, representatives, officers, directors, and agents ("Buyer Group")
harmless from and against any and all Damages suffered by Buyer or any other
member of the Buyer Group resulting from, arising out of, or incurred with
respect to, or (in the case of claims asserted against Buyer or any other member
of the Buyer Group by a third party) alleged to result from, arise out of or
have been incurred with respect to:
(a) the inaccuracy or breach of any representation or warranty
made by Seller in this Agreement or in any certificate delivered by it at the
Closing pursuant hereto;
(b) the breach of any covenant by Seller or Parent or the
nonperformance of any obligation to be performed by Seller or Parent under this
Agreement or in any certificate delivered by them at the Closing pursuant
hereto;
(c) the failure of Seller fully to pay or satisfy or cause to be
paid or satisfied any of the Retained Liabilities; and
(d) the failure to comply with applicable bulk sales laws.
13.2. Indemnification by Buyer. Subject to the other provisions of
------------------------
this Article 13, Buyer shall indemnify and hold Seller and its employees,
representatives, officers, directors and agents ("Seller Group") harmless from
and against any Damages suffered by Seller or any other member of the Seller
Group resulting from, arising out of, or incurred with respect to, or (in the
case of claims asserted against Seller or any other member of the Seller Group
by a third party) alleged to result from, arise out of or have been incurred
with respect to:
(a) the inaccuracy or breach of any representation or warranty
made by Buyer in this Agreement or in any certificate delivered by it at the
Closing pursuant hereto;
(b) the breach of any covenant by Buyer or the nonperformance of
any obligation to be performed by Buyer under this Agreement or in any
certificate delivered by it at the Closing pursuant hereto;
(c) the failure of Buyer fully to pay or satisfy any of the
Assumed Liabilities; and
(d) the operation of the Business by the Buyer after the Closing
Date (except to the extent that such Damages are the subject of indemnification
pursuant to Section 13.1).
13.3. Notice and Resolution of Claim.
------------------------------
35
(a) An indemnified party hereunder shall promptly give written
notice to the indemnifying party after obtaining knowledge of (i) any claim the
indemnified party has against the indemnifying party not involving a third party
claim or litigation or (ii) any third party claim or litigation against the
indemnified party as to which recovery may be sought against the indemnifying
party because of the indemnity set forth in Section 13.1 or Section 13.2
specifying in reasonable detail the claim or litigation and the basis for
indemnification; provided, that the failure of the indemnified party promptly to
--------
notify the indemnifying party of any such matter shall not release the
indemnifying party, in whole or in part, from its obligations under this Article
13 except to the extent the indemnified party's failure so to notify actually
prejudices the indemnifying party's ability to defend against such third party
claim or litigation. If such claim for indemnity shall arise from the claim or
litigation of a third party, the indemnified party shall permit the indemnifying
party to assume the defense of any such claim, litigation or any litigation
resulting from such claim.
(b) If the indemnifying party assumes the defense of any such
third party claim or litigation, the obligations of the indemnifying party
hereunder shall include taking all steps necessary in the investigation, defense
or settlement of such claim or litigation (including the retention of legal
counsel) and holding the indemnified party harmless from and against any and all
Damages caused by or arising out of any settlement approved by the indemnifying
party or any judgment in connection with such claim or litigation. The
indemnifying party shall not, in the defense of such claim or litigation,
consent to entry of any judgment (except with the written consent of the
indemnified party), or enter into any settlement (except with the written
consent of the indemnified party), (i) which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
indemnified party a complete release from all liability in respect of such claim
or litigation or (ii) the effect of which is to permit any injunction,
declaratory judgment, other order or other nonmonetary relief to be entered,
directly or indirectly, against any indemnified party. The indemnifying party
shall permit the indemnified party to participate in such defense or settlement
through counsel chosen by the indemnified party, with the fees and expenses of
such counsel borne by the indemnified party unless under then applicable
standards of professional conduct a conflict may exist between the indemnifying
party and the indemnified party in which event such fees and expenses of such
counsel shall be borne by the indemnifying party.
(c) Failure by the indemnifying party to notify the indemnified
party of its election to assume the defense any such claim or litigation by a
third party within twenty (20) days after notice thereof shall have been given
to the indemnifying party shall be deemed a waiver by the indemnifying party of
its right to assume the defense of such claim or litigation. If the indemnifying
party shall not assume the defense of any such claim by a third party or
litigation resulting therefrom, the indemnified party may defend against such
claim or litigation in such manner as it may deem appropriate and may settle
such claim or litigation on such terms as it may deem appropriate; provided,
--------
however, that in settling any action in respect of which indemnification is
-------
payable under this Article 13, it shall act reasonably and in good faith. The
indemnifying party shall not be entitled to require that any action be brought
against any other Entity before action is brought against it hereunder by the
indemnified party but shall be subrogated to any right of action to the extent
that it has paid or successfully defended against any third party claim.
36
13.4. Non Third-Party Claims. With respect to any claim not involving
----------------------
a third party claim or litigation which the indemnifying party fails to pay
within thirty (30) days of the date notice is received from the indemnified
party, the indemnifying party shall, if it is ultimately determined by agreement
of the parties or by a court or other competent body to have been obligated to
indemnify the indemnified party for such claim, pay the indemnified party
interest on such claim at the Prime Rate from the date of such ultimate
determination.
13.5. Payment and Assignment of Claims.
--------------------------------
(a) Upon final determination by the Parties or by a court of
competent jurisdiction or by any alternate dispute resolution procedure agreed
upon by the Parties, that a Party is entitled to indemnification under this
Article, the indemnifying party shall promptly pay or reimburse, as appropriate,
the indemnified party for any Damages to which the indemnified party is entitled
to be indemnified under this Article 13. Any Damages to which Buyer is entitled
to be indemnified under this Article 13 shall be satisfied first by setting off
against any remaining Deferred Payment Amount and then by payment of any
remaining Damages from Seller to Buyer.
(b) In the event that any of the Damages for which an
indemnifying party is responsible or allegedly responsible pursuant to Section
13.3 are recoverable or potentially recoverable against any third party at the
time when payment is due hereunder, then the indemnified party shall assign any
and all rights that it may have to recover such Damages to the indemnifying
party.
13.6. Limits on Indemnification.
-------------------------
(a) Limit of Liability. The total aggregate liability of Seller
------------------
for any claims for Damages arising under Section 13.1(a) of this Agreement shall
not exceed the Purchase Price (without regard for any adjustment of the Purchase
Price pursuant to Section 13.7); provided, however, that the limitation set
forth in this Section 13.6(a) shall not apply with respect to the inaccuracy or
breach of any representation or warranty set forth in Section 5.9 relating to
Taxes, in Section 5.4 relating to title, or in Sections 5.10(b), 5.10(c),
5.11(b) and 5.18 relating to environmental matters. Except as provided in this
Section and except with respect to the representation and warranty set forth in
Section 5.3(d), no Party shall be liable to the other for any Damages arising
under 13.1(a) or 13.2(a), as the case may be, until the aggregate amount of such
Damages incurred by the other Party, taken together, exceeds $200,000; provided,
however, that once such aggregate Damages exceed $200,000, indemnification shall
be had to the full extent of all Damages, including the first $200,000.
(b) Survival. The representations and warranties made in this
--------
Agreement or in any certificate or other agreement or document delivered
pursuant hereto or in connection herewith shall survive the Closing Date for a
period of two years or, in the case of representations and warranties set forth
in Section 5.9 relating to Taxes, in Sections 5.10(b), 5.10(c), 5.11(b) and 5.18
relating to environmental matters, and in Section 5.3(b) to the extent an
undisclosed liability relates to Environmental Laws, for the maximum periods
permitted by law or, in the case of representations and warranties set forth in
Section 5.4, relating to title, without limitation (the applicable survival
period being referred to herein as the "Survival Period").
37
Neither Party shall have an obligation to indemnify the other pursuant to this
Article 13 for any breach of any representation or warranty unless a notice has
been submitted to the indemnifying party in accordance with Section 13.3(a)
hereof prior to the end of the applicable Survival Period. All statutes of
limitation applicable to claims by Buyer for Damages arising under Sections
13.1(b), (c) and (d) are hereby waived by Parent and Seller.
13.7. Indemnity Payments. The Parties agree that any payments by one
------------------
Party to the other Party made pursuant to this Article 13 will be treated by the
Parties on all applicable tax returns as an adjustment to the Purchase Price.
ARTICLE 14
RESTRICTIVE COVENANT
--------------------
14.1. Covenants Not to Compete. For a period of three (3) years after
------------------------
the Closing Date, Seller and Parent shall not, directly or indirectly through or
in association with any Entity or otherwise (a) engage in Repairs; (b) own or
acquire any interest in any business which is engaged in Repairs (other than
ownership of 5% or less of any publicly traded company that engages in such
business); (c) attempt to solicit any customers of Buyer in connection with the
performance by Seller or Parent of Repairs; (d) act as a consultant or advisor,
or loan or otherwise provide funds or assistance of any sort, to, or otherwise
engage, any Entity who is or is attempting to engage in any of the activities
listed in (a) through (c) hereof; or (e) take any action which may impair the
relationship between Buyer and suppliers and customers of, or others having
relationships with, the Business. Notwithstanding the foregoing, Seller and
Parent may: (i) conduct Repairs allowed by the airframe maintenance manual for
an aircraft that is being maintained by Parent's Affiliates on behalf of a
customer, (ii) supervise repair management programs for customers of Parent and
its Affiliates, and (iii) solicit customers of Buyer for the Parent's other
businesses, including businesses outside the scope of this Section 14.1 and
activities that Parent or its other businesses may engage in as described in
clauses (i) and (ii) of this sentence. This covenant shall not apply: (i) to any
Entity that is (A) not an Affiliate of Parent, (B) acquiring all of the stock, a
"substantial piece" of the stock, or all or substantially all of the assets, of
Parent and (C) at the time of such acquisition engaged in the aerospace industry
(so long as any business of the acquiring Entity that is competitive with the
Business is not conducted by such Entity through the Parent or its
subsidiaries); or (ii) to any Entity that is (A) not an Affiliate of Parent and
(B) acquiring all of the stock or all or substantially all of the assets of any
subsidiary of Parent (so long as any business of the acquiring Entity that is
competitive with the Business is not conducted by such Entity through such
subsidiary). For purposes of this covenant, a "substantial piece" of the stock
of Parent shall mean 20% or more of the outstanding voting power of the Parent.
14.2. Obligations Not to Compete as Inducement and Consideration to
-------------------------------------------------------------
Buyer. Parent and Seller acknowledge and agree that the value to Buyer of the
-----
transactions provided for in this Agreement would be substantially and
materially diminished if either Parent or Seller, directly or indirectly through
or in association with any Entity or otherwise, were hereafter to breach any of
the provisions of Section 14.1, and Parent and Seller have therefore offered and
agreed to the provisions of Section 14.1 as a material inducement to Buyer to
enter into this
38
Agreement, and in consideration of the promises, representations and covenants
made by Buyer under this Agreement. Parent and Seller specifically acknowledge
and agree that the provisions of Section 14.1 are commercially reasonable
restraints on Parent and Seller, ancillary to the investment, effort and risk to
acquire and thereafter operate the Business and are reasonably necessary to
protect the interests Buyer is acquiring hereunder. Parent and Seller further
acknowledge and agree that Buyer would be irreparably damaged by a breach of
Section 14.1 and would not be adequately compensated by monetary damages for any
such breach. Therefore, in addition to all other remedies, Buyer shall be
entitled to injunctive relief from any court having jurisdiction to restrain any
violation (actual or threatened) of Section 14.1 without the necessity of (a)
proving monetary damages or the insufficiency thereof, or (b) posting any bond
in regard to any injunctive proceeding.
14.3. Enforceability. If any court shall in any proceeding refuse to
--------------
enforce Sections 14.1 and 14.2 in whole or in part because the time limit,
geographical scope or any other element thereof is deemed unreasonable in the
jurisdiction of that court, it is expressly understood and agreed that Sections
14.1 and 14.2 shall not be void but, for the purpose of such proceeding, such
time limit, geographical scope or other element shall be deemed to be reduced to
the extent necessary to permit the enforcement of Sections 14.1 and 14.2 to the
maximum extent allowable in that particular jurisdiction. The foregoing,
however, is not intended to and shall not in any way affect, invalidate or limit
the remaining provisions of Sections 14.1 and 14.2 or affect, invalidate or
limit the validity or enforceability of Sections 14.1 and 14.2 as written in any
other jurisdiction at any time.
ARTICLE 15
MISCELLANEOUS
-------------
15.1. Enforceability.
--------------
(a) Except as otherwise provided in this Agreement, the Parties
agree that money damages are an inadequate remedy for a violation of their
covenants contained herein and in the other agreements delivered pursuant
hereto, including but not limited to the covenants contained within Article 14,
and that such other Party shall be entitled, in addition to any other rights and
remedies it may have, at law or in equity, to an injunction enjoining and
restraining the breaching Party from doing or continuing to do any such act and
any other violations or threatened violations of any said covenant.
(b) If any provision of this Agreement as applied to any Party
or to any circumstance shall be adjudged by a court to be invalid or
unenforceable, the same shall in no way affect any other provision of this
Agreement, the application of such provision in any other circumstances, or the
validity or enforceability of this Agreement. The Parties intend this Agreement
to be enforced as written. If any such provision, or part thereof, however, is
held to be unenforceable because of the duration thereof or the area covered
thereby, the Parties agree that the court making such determination shall have
the power to reduce the duration and/or area of such provision, and/or to delete
specific words or phrases, and in its amended form such provision shall then be
enforceable and shall be enforced. If any provision of this Agreement
39
shall otherwise finally be determined to be unlawful, then such provision shall
be deemed to be severed from this Agreement and every other provision of this
Agreement shall remain in full force and effect.
15.2. Successors and Assigns. The terms and conditions of this
----------------------
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the Parties hereto; provided, however, that this
-------- -------
Agreement may not be assigned by any Party without the express written consent
of the other Party hereto, except that either Party may assign all or part of
its rights and obligations under this Agreement to one or more direct or
indirect subsidiaries of such Party, but any such assignment will not relieve
such Party of any of its obligations.
15.3. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall for all purposes be deemed to be an original
and all of which when taken together shall constitute the same instrument.
15.4. Headings. The headings of the Sections of this Agreement are
--------
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.
15.5. Waiver. Any of the terms or conditions of this Agreement may be
------
waived in writing at any time by the Party which is entitled to the benefits
thereof. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of such provision at any time in the future or a
waiver of any other provision hereof.
15.6. Brokers' Fees. Neither Parent nor Seller on the one hand, or
-------------
Buyer on the other, has taken or will take any action that would cause the other
to have any obligation or liability to any person for a finders' or brokers' fee
relative to the transactions contemplated by this Agreement. Buyer agrees to
indemnify, defend and hold Seller harmless from any Damages arising out of any
claim of any finder or broker retained by Buyer. Seller agrees to indemnify,
defend and hold Buyer harmless from any Damages arising out of any claim of any
finder or broker retained by Seller.
15.7. Sales and Transfer Taxes. Seller and Buyer shall each be
------------------------
responsible for and shall pay fifty percent (50%) of the sales, transfer, deed,
duties, stamp, notary public and other similar taxes, duties and transfer fees
applicable to the transactions contemplated by this Agreement.
15.8. No Third-Party Beneficiaries. Nothing in this Agreement shall
----------------------------
create any third-party beneficiary rights in any Entity that is not a Party to
this Agreement.
15.9. Expenses. Except as otherwise expressly provided for herein or
--------
in any agreement entered into on the date hereof, each Party shall pay all costs
and expenses incurred by it or on its behalf in connection with this Agreement
and the transactions contemplated hereby, including without limitation, fees and
expenses of its own financial consultants, accountants and legal counsel.
40
15.10. Notices. Any notice, request, instruction, consent or other
-------
document to be given hereunder by either party hereto to the other party shall
be in writing and delivered personally, by telecopy or sent by registered or
certified mail, postage prepaid, as follows:
If to Seller or Parent:
Aviation Sales Company
c/o TIMCO Corporate Offices
000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Chairman
Fax No.: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxxxxx
Akerman, Senterfitt & Xxxxxx, P.A.
Xxx Xxxxxxxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Fax No.: (000) 000-0000
If to Buyer:
Xxxxxxxx Sundstrand Service Corporation
0 Xxxxxxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Secretary
Fax No.: (000) 000-0000
or at such other address for a Party as shall be specified in writing by that
Party. Any notice which is delivered personally or by telecopy to the addresses
provided herein shall be deemed to have been duly given to the Party to whom it
is directed upon actual receipt by such Party (or its agent for notices
hereunder). Any notice which is addressed and mailed in the manner herein
provided shall be deemed given to the Entity to which it is addressed when
received.
15.11. Bulk Sales Laws. Buyer agrees to waive compliance by Seller
---------------
with the requirements of all applicable laws, if any, relating to sales in bulk.
Seller agrees to pay and discharge when due, and to indemnify and hold harmless
Buyer from and against, all claims that could be asserted against Buyer by
reason of such non-compliance.
15.12. Governing Law. This Agreement shall be construed in accordance
-------------
with and governed by the laws of Delaware applicable to agreements made and to
be performed wholly within such jurisdiction.
15.13. Public Announcements. The Parties shall agree on the terms of
--------------------
the press releases to be issued upon the execution of this Agreement and shall
consult with each other before issuing any other press releases with respect to
this Agreement and the transactions
41
contemplated hereby, including without limitation, any termination of this
Agreement for any reason.
15.14. Parent Guarantee. Parent hereby absolutely, unconditionally and
----------------
irrevocably guarantees the prompt payment and performance, in each case when
due, of all obligations (monetary and non-monetary) of Seller under this
Agreement. Parent agrees that this guarantee is continuing in nature and shall
survive and continue in full force notwithstanding the dissolution or
liquidation of, or the insolvency or bankruptcy of, or other occurrence
whatsoever affecting the liabilities and obligations of, Seller. Parent agrees
that, with respect to monetary obligations of Seller, this Section 15.14 is a
guarantee of performance and payment and not merely of collection, and that
Parent will perform said obligations without offset of any kind and without
first pursuing any rights or remedies that it may have against Seller,
regardless of the existence or adequacy of such rights or remedies. Parent
hereby unconditionally and irrevocably waives, to the extent permitted by
applicable law, (a) notice of acceptance of the guarantee and any notice
regarding the performance or non-performance of Seller with respect to any of
its obligations hereunder, (b) presentment for payment, notice of non-payment or
non-performance, demand, protest, notice of protest and notice of dishonor or
default to anyone, (c) defenses to pay or perform based upon any of the
obligations of Seller hereunder not being a valid and binding obligation of
Seller enforceable in accordance with its terms for any reason whatsoever, (d)
all other notices to which Parent may be entitled but which may legally be
waived, (e) any defense or circumstance which might otherwise constitute a legal
or equitable discharge of parent and (f) all rights under any state or federal
statute dealing with or affecting the rights of creditors. Parent represents and
warrants to Buyer that it has all authority, corporate or otherwise, necessary
to make this guarantee.
15.15. Entire Agreement; Amendment. This Agreement, including all
---------------------------
Schedules and Exhibits hereto, and the other agreements entered into on the date
hereof constitute the sole understanding of the Parties with respect to the
matters contemplated hereby and thereby and supersede and render null and void
all prior agreements and understandings between the Parties with respect to such
matters. No amendment, modification or alteration of the terms or provisions of
this Agreement including all Schedules and Exhibits hereto, shall be binding
unless the same shall be in writing and duly executed by the Party against whom
such would apply.
42
IN WITNESS WHEREOF, each of the Parties hereto has caused this
Agreement to be executed on its behalf as of the date first set forth.
AVIATION SALES COMPANY
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Vice President
----------------------------
CARIBE AVIATION, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Vice President
----------------------------
XXXXXXXX SUNDSTRAND
SERVICE CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Vice President
----------------------------
43
Agreement, and in consideration of the promises, representations and covenants
made by Buyer under this Agreement. Parent and Seller specifically acknowledge
and agree that the provisions of Section 14.1 are commercially reasonable
restraints on Parent and Seller, ancillary to the investment, effort and risk to
acquire and thereafter operate the Business and are reasonably necessary to
protect the interests Buyer is acquiring hereunder. Parent and Seller further
acknowledge and agree that Buyer would be irreparably damaged by a breach of
Section 14.1 and would not be adequately compensated by monetary damages for any
such breach. Therefore, in addition to all other remedies, Buyer shall be
entitled to injunctive relief from any court having jurisdiction to restrain any
violation (actual or threatened) of Section 14.1 without the necessity of (a)
proving monetary damages or the insufficiency thereof, or (b) posting any bond
in regard to any injunctive proceeding.
14.3. Enforceability. If any court shall in any proceeding refuse to
--------------
enforce Sections 14.1 and 14.2 in whole or in part because the time limit,
geographical scope or any other element thereof is deemed unreasonable in the
jurisdiction of that court, it is expressly understood and agreed that Sections
14.1 and 14.2 shall not be void but, for the purpose of such proceeding, such
time limit, geographical scope or other element shall be deemed to be reduced to
the extent necessary to permit the enforcement of Sections 14.1 and 14.2 to the
maximum extent allowable in that particular jurisdiction. The foregoing,
however, is not intended to and shall not in any way affect, invalidate or limit
the remaining provisions of Sections 14.1 and 14.2 or affect, invalidate or
limit the validity or enforceability of Sections 14.1 and 14.2 as written in any
other jurisdiction at any time.
ARTICLE 15
MISCELLANEOUS
-------------
15.1. Enforceability.
--------------
(a) Except as otherwise provided in this Agreement, the Parties
agree that money damages are an inadequate remedy for a violation of their
covenants contained herein and in the other agreements delivered pursuant
hereto, including but not limited to the covenants contained within Article 14,
and that such other Party shall be entitled, in addition to any other rights and
remedies it may have, at law or in equity, to an injunction enjoining and
restraining the breaching Party from doing or continuing to do any such act and
any other violations or threatened violations of any said covenant.
(b) If any provision of this Agreement as applied to any Party
or to any circumstance shall be adjudged by a court to be invalid or
unenforceable, the same shall in no way affect any other provision of this
Agreement, the application of such provision in any other circumstances, or the
validity or enforceability of this Agreement. The Parties intend this Agreement
to be enforced as written. If any such provision, or part thereof, however, is
held to be unenforceable because of the duration thereof or the area covered
thereby, the Parties agree that the court making such determination shall have
the power to reduce the duration and/or area of such provision, and/or to delete
specific words or phrases, and in its amended form such provision shall then be
enforceable and shall be enforced. If any provision of this Agreement
39
shall otherwise finally be determined to be unlawful, then such provision shall
be deemed to be severed from this Agreement and every other provision of this
Agreement shall remain in full force and effect.
15.2. Successors and Assigns. The terms and conditions of this
----------------------
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the Parties hereto; provided, however, that this
-------- -------
Agreement may not be assigned by any Party without the express written consent
of the other Party hereto, except that either Party may assign all or part of
its rights and obligations under this Agreement to one or more direct or
indirect subsidiaries of such Party, but any such assignment will not relieve
such Party of any of its obligations.
15.3. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall for all purposes be deemed to be an original
and all of which when taken together shall constitute the same instrument.
15.4. Headings. The headings of the Sections of this Agreement are
--------
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.
15.5. Waiver. Any of the terms or conditions of this Agreement may be
------
waived in writing at any time by the Party which is entitled to the benefits
thereof. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of such provision at any time in the future or a
waiver of any other provision hereof.
15.6. Brokers' Fees. Neither Parent nor Seller on the one hand, or
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Buyer on the other, has taken or will take any action that would cause the other
to have any obligation or liability to any person for a finders' or brokers' fee
relative to the transactions contemplated by this Agreement. Buyer agrees to
indemnify, defend and hold Seller harmless from any Damages arising out of any
claim of any finder or broker retained by Buyer. Seller agrees to indemnify,
defend and hold Buyer harmless from any Damages arising out of any claim of any
finder or broker retained by Seller.
15.7. Sales and Transfer Taxes. Seller and Buyer shall each be
------------------------
responsible for and shall pay fifty percent (50%) of the sales, transfer, deed,
duties, stamp, notary public and other similar taxes, duties and transfer fees
applicable to the transactions contemplated by this Agreement.
15.8. No Third-Party Beneficiaries. Nothing in this Agreement shall
----------------------------
create any third-party beneficiary rights in any Entity that is not a Party to
this Agreement.
15.9. Expenses. Except as otherwise expressly provided for herein or
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in any agreement entered into on the date hereof, each Party shall pay all costs
and expenses incurred by it or on its behalf in connection with this Agreement
and the transactions contemplated hereby, including without limitation, fees and
expenses of its own financial consultants, accountants and legal counsel.
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15.10. Notices. Any notice, request, instruction, consent or other
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document to be given hereunder by either party hereto to the other party shall
be in writing and delivered personally, by telecopy or sent by registered or
certified mail, postage prepaid, as follows:
If to Seller or Parent:
Aviation Sales Company
c/o TIMCO Corporate Offices
000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Chairman
Fax No.: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxxxxx
Akerman, Senterfitt & Xxxxxx, P.A.
Xxx Xxxxxxxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Fax No.: (000) 000-0000
If to Buyer:
Xxxxxxxx Sundstrand Service Corporation
0 Xxxxxxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Secretary
Fax No.: (000) 000-0000
or at such other address for a Party as shall be specified in writing by that
Party. Any notice which is delivered personally or by telecopy to the addresses
provided herein shall be deemed to have been duly given to the Party to whom it
is directed upon actual receipt by such Party (or its agent for notices
hereunder). Any notice which is addressed and mailed in the manner herein
provided shall be deemed given to the Entity to which it is addressed when
received.
15.11. Bulk Sales Laws. Buyer agrees to waive compliance by Seller
---------------
with the requirements of all applicable laws, if any, relating to sales in bulk.
Seller agrees to pay and discharge when due, and to indemnify and hold harmless
Buyer from and against, all claims that could be asserted against Buyer by
reason of such non-compliance.
15.12. Governing Law. This Agreement shall be construed in accordance
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with and governed by the laws of Delaware applicable to agreements made and to
be performed wholly within such jurisdiction.
15.13. Public Announcements. The Parties shall agree on the terms of
--------------------
the press releases to be issued upon the execution of this Agreement and shall
consult with each other before issuing any other press releases with respect to
this Agreement and the transactions
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contemplated hereby, including without limitation, any termination of this
Agreement for any reason.
15.14. Parent Guarantee. Parent hereby absolutely, unconditionally and
----------------
irrevocably guarantees the prompt payment and performance, in each case when
due, of all obligations (monetary and non-monetary) of Seller under this
Agreement. Parent agrees that this guarantee is continuing in nature and shall
survive and continue in full force notwithstanding the dissolution or
liquidation of, or the insolvency or bankruptcy of, or other occurrence
whatsoever affecting the liabilities and obligations of, Seller. Parent agrees
that, with respect to monetary obligations of Seller, this Section 15.14 is a
guarantee of performance and payment and not merely of collection, and that
Parent will perform said obligations without offset of any kind and without
first pursuing any rights or remedies that it may have against Seller,
regardless of the existence or adequacy of such rights or remedies. Parent
hereby unconditionally and irrevocably waives, to the extent permitted by
applicable law, (a) notice of acceptance of the guarantee and any notice
regarding the performance or non-performance of Seller with respect to any of
its obligations hereunder, (b) presentment for payment, notice of non-payment or
non-performance, demand, protest, notice of protest and notice of dishonor or
default to anyone, (c) defenses to pay or perform based upon any of the
obligations of Seller hereunder not being a valid and binding obligation of
Seller enforceable in accordance with its terms for any reason whatsoever, (d)
all other notices to which Parent may be entitled but which may legally be
waived, (e) any defense or circumstance which might otherwise constitute a legal
or equitable discharge of parent and (f) all rights under any state or federal
statute dealing with or affecting the rights of creditors. Parent represents and
warrants to Buyer that it has all authority, corporate or otherwise, necessary
to make this guarantee.
15.15. Entire Agreement; Amendment. This Agreement, including all
---------------------------
Schedules and Exhibits hereto, and the other agreements entered into on the date
hereof constitute the sole understanding of the Parties with respect to the
matters contemplated hereby and thereby and supersede and render null and void
all prior agreements and understandings between the Parties with respect to such
matters. No amendment, modification or alteration of the terms or provisions of
this Agreement including all Schedules and Exhibits hereto, shall be binding
unless the same shall be in writing and duly executed by the Party against whom
such would apply.
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IN WITNESS WHEREOF, each of the Parties hereto has caused this
Agreement to be executed on its behalf as of the date first set forth.
AVIATION SALES COMPANY
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Vice President
----------------------------
CARIBE AVIATION, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Vice President
----------------------------
XXXXXXXX SUNDSTRAND
SERVICE CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------
Title: Vice President
----------------------------
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