Exhibit A
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, is made as of the ___th day of _________ 2001, by
and between Celsius Inc., a Delaware corporation (the "Seller"), and Minnesota
ASE, LLC, a Minnesota limited liability company (the "Buyer").
W I T N E S S E T H:
WHEREAS, Aero Systems Engineering, Inc. ("ASE") is a corporation organized and
existing under the laws of the State of Minnesota with authorized capital
consisting of 10,000,000 shares of common stock, $0.20 par value per share, of
which there are currently outstanding 4,401,625 shares, 3,522,073 of which
shares are owned by the Seller (the "Shares");
WHEREAS, the Seller desires to sell, assign and transfer to the Buyer and the
Buyer desires to purchase, accept and receive from the Seller, 2,245,000 shares
of the common stock of ASE (the "2,245,000 Shares") on the terms and subject to
the conditions hereinafter set forth;
WHEREAS, the Buyer desires to secure new lines of credit for ASE in order to
terminate ASE's current line of credit from Seller and - existing Performance
Bonds, dated July 24, 2000 for DSO Singapore in the present approximate amount
of $1,163,900 (the "DSO Performance Bond") and dated May 4, 2001 for CSIST in
the present approximate amount of $128,500 (the "CSIST Performance Bond") (both
of which are guaranteed by the Seller or an affiliate of the Seller) and thus
remove the Seller as guarantor of the DSO Performance Bond and the CSIST
Performance Bond; and
WHEREAS, in order to provide financing to ASE, the Seller is willing to loan ASE
$1,500,000 pursuant to an interest-only three year secured note (the "Note").
NOW, THEREFORE, in consideration of the foregoing premises and further in
consideration of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
ARTICLE 1.
PURCHASE AND SALE OF STOCK
On the terms and subject to the conditions herein set forth, the Seller hereby
agrees to sell, transfer and deliver to the Buyer the 2,245,000 Shares, and the
Buyer agrees to purchase the 2,245,000 Shares, as the case may be, from the
Seller.
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ARTICLE 2.
PURCHASE PRICE AND PAYMENT TERMS
2.1. PURCHASE PRICE. Subject to the terms and conditions set forth in this
Agreement, the purchase price to be paid by the Buyer to the Seller for the
2,245,000 Shares shall be equal to a total of $1,908,250 or $0.85 per share.
2.2. PAYMENT TERMS. The Purchase Price determined in accordance with Section 2.1
shall be paid by the Buyer to the Seller on the Closing Date in immediately
available funds.
ARTICLE 3.
CLOSING
The closing of the transaction contemplated hereunder shall take place at the
offices of Winthrop & Weinstine, P.A., 3000 Xxxx Xxxxxxxx Plaza, 00 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, at 10:00 a.m. on the second business day
after ASE receives a complete and validly executed export license for the
shipment of a wind tunnel and related materials to DSO Singapore (the "Export
License") or such day and at such time and place as may be mutually agreed upon
by the Buyer and the Seller (said day of closing hereinbefore and hereinafter
called the "Closing Date").
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF SELLER
In connection with and as an inducement to the Buyer to enter into this
Agreement and for the Buyer to be bound by the terms of this Agreement, the
Seller represents and warrants to the Buyer that, as of the date hereof (and as
of the Closing Date):
4.1. AUTHORITY. The Seller has the full power and authority to enter into,
execute and deliver this Agreement and to consummate the transactions
contemplated hereby and any instruments or agreements required herein.
4.2. TITLE TO ASE STOCK. The Seller hereby represents and warrants to the Buyer
that the Seller has good title to, the right to possession of and the right to
sell the 2,245,000 Shares and that the 2,245,000 Shares shall be transferred on
the Closing Date to the Buyer free and clear of any pledges, liens, charges,
encumbrances, proxies, or other restrictions or potentially adverse claims of
any kind of nature.
4.3. EXECUTION AND ENFORCEABILITY. This Agreement has been duly executed and
delivered by the Seller and constitutes a legal, valid and binding obligation of
the Seller enforceable against the Seller in accordance with its terms subject
to the enforcement of equitable remedies, bankruptcy, insolvency, moratorium and
other laws affecting the rights of creditors generally and the judicial
limitations of the performance of the remedy of specific performance.
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4.4. CLAIMS AGAINST ASE. The Seller hereby represents and warrants to the Buyer
that the Seller has no claims, threatened or pending, against ASE except as set
forth on EXHIBIT A.
4.5. FINANCIAL STATEMENTS. To the best knowledge of the Seller, the financial
statements of ASE are true and correct in all material respects and fairly
represent the financial position of ASE in accordance with generally accepted
accounting principles. For purposes hereof, said financial statements are
defined to be the balance sheet, income statement and related notes thereto as
of December 31, 2000 and March 31, 2001 as filed with the Securities and
Exchange Commission.
4.6. MATERIAL LIABILITIES. To the best knowledge of the Seller, there are no
material liabilities for which ASE might be liable which are not reflected on
the financial statements or in this Agreement.
For the purposes of this Article 4, "To the best knowledge of the Seller" shall
mean the actual knowledge of Xxxxxxxx Xxxxxxx (the Chief Executive Officer of
the Seller), with no independent duty to investigate.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF THE BUYER
In connection with and as an inducement to the Seller to enter into and be bound
by the terms of this Agreement, the Buyer warrants and represents to the Seller
that, as of the date hereof (and as of the Closing Date):
5.1 ORGANIZATION AND CORPORATE POWER. The Buyer is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Minnesota. Subject to receiving the necessary regulatory approvals, the
Buyer has all requisite power, authority, charters, licenses and franchises
necessary or required by law to purchase the 2,245,000 Shares from the Seller.
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT. The execution and delivery of this
Agreement by the Buyer and the consummation by the Buyer of the transactions
contemplated hereby have been (or will be) prior to the Closing Date duly
authorized by the Board of Governors of the Buyer and no other corporate
proceedings on the part of the Buyer is necessary to authorize this Agreement
and such transactions. The Buyer has the full power and authority to enter into,
execute and deliver this Agreement and to consummate the transactions
contemplated hereby and any instruments or agreements required herein.
5.3 EXECUTION AND ENFORCEABILITY. This Agreement has been duly executed and
delivered by the Buyer and constitutes a valid and binding obligation of the
Buyer enforceable in accordance with its terms subject to the enforcement of
equitable remedies, bankruptcy, insolvency, moratorium and other laws affecting
the rights of creditors generally and the judicial limitations of the
performance of the remedy of specific performance.
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5.4 SOPHISTICATED INVESTOR. The Buyer is a "Sophisticated Investor" (as such
term is defined in this Agreement). The Buyer understands the business in which
ASE is engaged and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of an investment
in ASE and making an informed investment decision with respect thereto. The
Buyer has relied solely on its own investigation and due diligence. The Buyer
has obtained sufficient information to evaluate the merits and risks of the
investment and to make such a decision. The Buyer is aware of and able to bear
the risks of the investment and is able to afford a complete loss of such
investment.
ARTICLE 6.
NOTE AND COLLATERAL
6.1 NOTE. At the Closing Date, the Seller will lend ASE $1,500,000 pursuant to
the Note attached hereto as EXHIBIT B (the "Note"). It is expressly understood
that ASE has the right to prepay the Note which shall result in the termination
of the Security Agreement referred to in Section 6.2 hereof.
6.2 SECURITY AGREEMENT. At the Closing Date, ASE and the Seller will enter into
the Security Agreement, attached hereto as EXHIBIT C (the "Security Agreement").
It is expressly recognized that the security interest of the Seller under the
Security Agreement is subordinate to the security interest of National City Bank
of Minneapolis ("Bank") and its participant lenders.
6.3 PLEDGE AGREEMENT. At the Closing Date, the Buyer shall grant a security
interest in the 2,245,000 Shares to the Seller pursuant to the Pledge Agreement,
attached hereto as EXHIBIT D (the "Pledge Agreement"), in order to secure the
obligations of ASE to the Seller under the Note. The 2,245,000 Shares along with
an executed stock power shall be held by Xxxxxx & Xxxx, LLP as escrow agent for
the Seller pursuant to the Escrow Agreement, attached hereto as EXHIBIT E (the
"Escrow Agreement").
6.4 MORTGAGES. At the Closing Date, if ASE's bank lender has taken mortgages in
order to secure the obligations under the Note, ASE and the Seller will enter
into a mortgage immediately behind the Bank in priority in order to secure the
obligations of ASE to the Seller under the Note.
6.5 STOCKHOLDERS AGREEMENT. At the Closing Date, the Buyer and the Seller shall
enter into the Stockholders Agreement, attached hereto as EXHIBIT F (the
"Stockholders Agreement").
ARTICLE 7.
DELIVERY OF DOCUMENTS
On the Closing Date, the Buyer and the Seller shall deliver to the other party
the following documents, instruments and agreements, together with such other
documents, instruments and agreements as the other party (or its counsel) may
reasonably request to consummate the purchase and sale contemplated hereby:
7.1 By the Buyer to the Seller:
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(a) the amount required to be paid under Section 2.1 hereof by a bank
cashier's check or an appropriate wire transfer in immediately
available funds; and
(b) evidence of compliance with the removal of the Seller (or its
affiliate) and substitution of a new DSO Performance Bond and a new
CSIST Performance Bond and release of Sellers under the existing DSO
and CSIST Performance Bonds, as provided in Section 10.1 hereof;
(c) an executed Pledge Agreement;
(d) an executed Stockholders Agreement;
(e) the amount required to be paid under Section 10.3 hereof in respect
to the Management Fee; and
(f) the amount required to be paid under Section 10.4 hereof in respect
to the Seller's line of credit with ASE.
7.2 By the Seller to the Buyer:
(a) certificates evidencing all of the Shares being purchased and sold
hereunder, free and clear of all encumbrances and other defects in
title, duly endorsed or otherwise accompanied by duly executed stock
powers sufficient to transfer ownership of the said certificates and
the shares of stock evidenced thereby to the Buyer; and
(b) evidence of entering into and funding the Note and entering into
the Security Agreement and Pledge Agreement; and
(c) an executed Stockholders Agreement.
ARTICLE 8.
EXPENSES AND BROKERS
The Buyer and the Seller shall each pay their respective costs and expenses of
any character incurred in connection with this Agreement or the transaction
contemplated hereby, including, without limitation, any commissions, fees or
other compensation payable to any finder or broker acting on behalf of such
party in connection with the transaction contemplated by this Agreement. It is
the parties' understanding that there are no such finders or brokers associated
with this transaction.
ARTICLE 9.
TAXES
(a) Seller shall cause ASE to be included in the consolidated income
tax returns of Seller for all periods ending on or prior to the Closing
Date for which ASE is required to be so included. Buyer shall prepare
and timely file all other tax returns required of ASE. Any such tax
returns that include periods ending on or before the Closing Date
shall,
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insofar as they relate to ASE, be on a basis consistent with the last
previous such tax returns filed with respect to ASE, unless Buyer or
Seller concludes that there is no reasonable basis for such position.
Notwithstanding the foregoing, for calendar year 2001, the Buyer, the
Seller, and ASE, as the case shall be, shall pro rate ASE's federal and
state taxable income or loss pursuant to Regulation Section
1.1502-76(b)(2)(ii) as promulgated by the Internal Revenue Service.
(b) After the Closing Date, Buyer and Seller shall provide each other
with such cooperation and information relating to ASE as any party
reasonably may request in filing any tax return (or amended tax return)
or refund claim, determining any tax liability or a right to a refund,
conducting or defending any audit or other proceeding with respect to
taxes which are the responsibility of such party or any of its
affiliates. Buyer and Seller agree to furnish or cause to be furnished
to one another and their representatives access, during normal business
hours, to such information (including records pertinent to ASE) and
assistance relating to ASE as is reasonably necessary for financial
reporting and accounting matters, the preparation and filing of any tax
returns, reports or forms or the defense of any tax claim or
assessment; provided, however, that such access does not unreasonably
disrupt the normal operations of ASE or Seller.
ARTICLE 10.
COVENANTS
10.1 BANK LINE; OUTSTANDING GUARANTEES. On or before the Closing Date, the Buyer
shall secure new lines of credit for ASE and shall provide substitute
performance bonds with respect to the DSO Performance Bond and the CSIST
Performance Bond. Notwithstanding the foregoing, all of the Outstanding
Guarantees listed on EXHIBIT G hereto shall remain in place, and the Buyer does
hereby agree to indemnify the Seller for any liability or out-of-pocket cost
with respect to such Outstanding Guarantees, it being understood that no such
out-of-pocket cost is contemplated in the absence of any default thereunder.
Additionally, the Guarantee Agreement, dated July 23, 1998 between Celsius, Inc.
as guarantor and the Boeing Company as beneficiary ("Guarantee Agreement") shall
remain in place unless Boeing agrees to amend, modify, release or terminate such
guaranty. Buyer does hereby agree to indemnify the Seller for any liability or
out-of-pocket cost with respect to such Guarantee Agreement, it being understood
that no such out-of-pocket cost is contemplated in the absence of any default
thereunder. The Guarantee Agreement shall not be amended without consent of
Seller.
10.2 RELEASE OF SECURITY INTEREST. On or before the Closing Date and except for
the Security Agreement, the Seller shall provide to the Buyer documentation
evidencing the termination of any and all security interests in the assets of
ASE granted by ASE to the Seller or its affiliates in return for certain
unsecured assurances from ASE to Seller which assurances shall be satisfactory
to Seller in its sole reasonable discretion.
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10.3 MANAGEMENT FEE. On or before the Closing Date, the Buyer will cause ASE to
pay the Seller the Management Fee (the "Management Fee") being accrued on a pro
rata basis listed in EXHIBIT A, through the month-end preceding the Closing
Date;
10.4 BORROWED MONEY. On or before the Closing Date, Buyer will cause ASE to
repay all amounts then owed by ASE to Seller for borrowed money in cash or other
immediately available funds.
10.5 OTHER GUARANTEES. After the Closing Date, Buyer will provide to ASE's
benefit all guarantees and other assurances that may be requested by an ASE
customer to permit ASE to operate in the ordinary course of business.
ARTICLE 11.
INDEMNIFICATION
Each of the parties does hereby and shall immediately upon demand indemnify and
hold harmless the other party after the date of this Agreement, against and in
respect of:
(a) any damages or deficiency resulting from any misrepresentation,
breach of warranty or non-fulfillment of any agreement or covenant on
the part of such party; and
(b) all actions, suits, proceedings, demands, assessments, judgments,
costs and expenses (including, without limitation, reasonable
attorneys' fees) incident to any of the foregoing.
(c) Seller's indemnification obligation thereunder shall not in any
circumstance exceed singly or in the aggregate, the Purchase Price as
defined in the Agreement ("Liability Cap").
(i) (d) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, TO THE
FULLEST EXTENT PERMITTED BY LAW, NEITHER SELLER NOR ANY OF ITS AGENTS,
EMPLOYEES, REPRESENTATIVES OR AFFILIATES SHALL BE LIABLE FOR
CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE, EXEMPLARY, SPECIAL OR
OTHER SIMILAR DAMAGES IN CONNECTION WITH DIRECT CLAIMS BY AN
INDEMNIFIED PARTY WITH RESPECT TO THEIR INDEMNIFICATION OBLIGATIONS
UNDER THIS AGREEMENT UNLESS ANY SUCH CLAIM ARISES OUT OF THE FRAUDULENT
ACTIONS OF EITHER PARTY OR ITS PARENT OR SUBSIDIARIES. IN DETERMINING
THE AMOUNT OF ANY LOSS, LIABILITY, OR EXPENSE FOR WHICH AN INDEMNIFIED
PARTY IS ENTITLED TO INDEMNIFICATION UNDER THIS AGREEMENT, THE GROSS
AMOUNT THEREOF WILL BE REDUCED (BUT NOT BELOW ZERO) BY THE NET PRESENT
VALUE OF ANY CORRELATIVE INSURANCE PROCEEDS ACTUALLY REALIZED BY SUCH
INDEMNIFIED PARTY UNDER POLICIES TO THE EXTENT THAT THE FUTURE PREMIUM
RATE WILL NOT BE INCREASED BY CLAIM EXPERIENCE RELATING TO SUCH LOSS,
LIABILITY OR EXPENSE.
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(ii) (e) EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN ARTICLE 4, SELLER
MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED. ANYTHING IN
THIS AGREEMENT TO THE CONTRARY NOTWITHSTANDING, NO STOCKHOLDER,
DIRECTOR, OFFICER, AFFILIATE, EMPLOYEE OR AGENT OF SELLER SHALL HAVE
ANY PERSONAL LIABILITY TO THE OTHER PARTY OR ANY OTHER PERSON AS A
RESULT OF THE BREACH OF ANY REPRESENTATION, WARRANTY, COVENANT OR
AGREEMENT OF SELLER OR ANY OF ITS AFFILIATES CONTAINED HEREIN AND NO
MEMBER, DIRECTOR, OFFICER, AFFILIATE, EMPLOYEE OR AGENT OF THE SELLER
SHALL HAVE ANY PERSONAL LIABILITY TO BUYER OR ANY OTHER PERSON AS A
RESULT OF THE BREACH OF ANY REPRESENTATION, WARRANTY, COVENANT OR
AGREEMENT CONTAINED HEREIN.
(f) Each of the parties hereto agrees that its sole and exclusive
remedy after the Closing with respect to any and all claims relating to
this Agreement, ASE, the events giving rise to this Agreement and the
transactions provided for herein or contemplated hereby, shall be
pursuant to the indemnification provisions contained in this Article
11. Buyer hereby waives, from and after the Closing, any claim or cause
of action, known and unknown, foreseen and unforeseen, which it may
have against the other parties hereto.
ARTICLE 12.
TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby abandoned at any time prior to the Closing Date:
(a) by mutual consent of the Seller and the Buyer; or
(b) by the Seller (as one party) or by the Buyer (as another party)
upon written notice thereof to the other party if there has been a
failure by the other party to perform or comply with any material
agreement, covenant or condition herein required to be performed or
complied with by such other party within the time required and such
failure has continued for thirty (30) days following written notice
thereof to such other party, provided, however, such cure period shall
not extend beyond October 10, 2001; or
(c) by the Seller (as one party) or by the Buyer (as another party)
upon written notice thereof to the other party if the fully executed
Export License is not received by ASE by October 10, 2001.
(d) by either party upon written notice thereof to the other party if
there has been a failure by the Buyer to obtain all Bank financing and
security agreements in forms which are determined by the Seller or
Buyer, as the case may be, to be satisfactory by August 20, 2001.
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ARTICLE 13.
GENERAL PROVISIONS
13.1 SURVIVAL OF REPRESENTATIONS. The representations and warranties of the
Seller and the Buyer contained in or made pursuant to this Agreement shall
survive the consummation of the purchase and sale contemplated hereby for a
period of eighteen (18) months from the Closing Date except for the
representations and warranties set forth in Sections 4.2 and 4.4, which shall
both survive the purchase and sale contemplated hereby and shall not terminate.
13.2 PARTIES IN INTEREST AND ASSIGNMENT. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the personal representative, successors and permitted assigns of the Seller
and the Buyer, it being understood, however, that such assignment shall in no
way relieve the parties to this Agreement of their responsibilities and
obligations under this Agreement.
13.3 NOTICES. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been given when personally
delivered or deposited in the United States mail, mailed first class, registered
or certified, postage prepaid, addressed as follows:
(a) If to the Buyer:
Minnesota ASE, LLC
000 Xxxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxx
With a copy to:
Winthrop & Weinstine, P.A.
3000 Xxxx Xxxxxxxx Plaza
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
or at such other address as Buyer or his attorney shall have advised
the Seller in writing; and
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(b) If to the Seller:
Celsius Inc.
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx
With a copy to:
Xxxxxx & Xxxx, LLP
X.X. Xxx 0000
Xxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxx
or at such other address as Seller or his attorney may have advised the
Buyer in writing.
13.4 ENTIRE AGREEMENT. This Agreement expresses the whole agreement between the
parties with respect to the purchase and sale contemplated hereby, there being
no representations, warranties or other agreements (oral or written) not
expressly set forth or provided for herein.
13.5 COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
13.6 CHANGES. Any and all agreements by the parties hereto to amend, change,
extend, revise or discharge this Agreement, in whole or in part, shall be
binding upon the parties to such agreement, even though such agreements may lack
legal consideration, provided such agreements are in writing and executed by the
party agreeing to be bound thereby.
13.7 GOVERNING LAW. This Agreement shall be deemed to be a contract made under
the laws of the State of Minnesota, and for all purposes it, plus any related or
supplemental documents and notices, shall be construed in accordance with and
governed by the laws of such state.
13.8 CONSTRUCTION. Wherever possible, each provision of this Agreement and each
related document shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement or any
related document shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining
provisions of this Agreement or such related documents.
13.9 WAIVER. No failure on the part of either party to exercise, and no delay in
exercising, any right or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right or remedy hereunder preclude
any other or further exercise thereof or the exercise of any other right or
remedy granted hereby or by any related document or by law.
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13.10 PUBLICITY. Except as required by federal and state law and regulations,
all publicity or disclosure of any matter to press agents concerning the
transactions contemplated by this Agreement and all notices regarding this
transaction shall be jointly planned, coordinated, and related only by mutual
consent of Buyer and Seller.
IN WITNESS WHEREOF, the Seller and the Buyer have executed and delivered to the
other party this Agreement effective as of the day and year first above written.
BUYER:
MINNESOTA ASE, LLC
By
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Its
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SELLER:
CELSIUS INC.
By
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Its
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EXHIBIT A
ITEMS TO BE PAID BY ASE TO SELLER
MANAGEMENT FEE OF $17,500 PER MONTH X 8 MONTHS = $140,000
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EXHIBIT B
PROMISSORY NOTE
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EXHIBIT C
SECURITY AGREEMENT
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EXHIBIT D
STOCK PLEDGE AGREEMENT
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EXHIBIT E
ESCROW AGREEMENT
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EXHIBIT F
STOCKHOLDERS AGREEMENT
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EXHIBIT G
OUTSTANDING GUARANTEES
NAME TYPE AMOUNT (USD) EXPIRY
---- ---- ------------ ------
XXXX (ITALY) PERFORMANCE GUARANTEE 208,715 JUNE 30, 2001
------------ --------------------- ------- -------------
SRT (SWISS AIR) PERFORMANCE GUARANTEE 277,500 FEB. 28, 2002
--------------- --------------------- ------- -------------
DSO SINGAPORE ADVANCE PAYMENT BOND 3,491,700 FEB. 15, 2003
------------- -------------------- --------- -------------
MTU BID BOND LOC 600,000 DECEMBER 20, 2001
--- ------------ ------- -----------------
CSIST BID BOND 90,000 AUGUST 30, 2001
----- -------- ------ ---------------
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