Exhibit 10.2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("ESCROW AGREEMENT") is made this 31st day of
December, 2008 by and between the parties named below:
A. XXXXXX X. XXXXXXX, individually (the "SELLER");
B. AIR TRANSPORT GROUP HOLDINGS, INC. (the "BUYER");
C. K&L GATES LLP (the "ESCROW AGENT"), with offices at 000 Xxxxx Xxxxxxxx
Xxxxxxxxx, Xxxxxxxx Financial Center, Xxxxx 0000, Xxxxx, XX 00000.
RECITALS
WHEREAS, the Seller and the Buyer have entered into a Stock Purchase
Agreement (the "STOCK PURCHASE AGREEMENT") dated the date hereof whereby the
Buyer has agreed to purchase all of the issued and outstanding shares of
Technical Aero Services, Inc., a Florida corporation (the "SHARES") from the
Seller for an aggregate purchase price of Two Million Five Hundred Thousand
Dollars ($2,500,000) (the "PURCHASE PRICE");
WHEREAS, the Purchase Price will be paid in accordance with the terms set
forth in the Stock Purchase Agreement upon the terms of that certain promissory
note entered into by the Buyer dated the date hereof (the "NOTE");
WHEREAS, the Seller and the Buyer have agreed that the certificates
representing the Shares and the related stock powers (collectively, the
"CERTIFICATES") are to be held in escrow to be held and released solely in
accordance with the terms and conditions of the Stock Purchase Agreement and
this Escrow Agreement;
WHEREAS, the Seller and the Buyer have agreed that any and all profits
arising from the operations of the Company prior to the payment in full of the
Purchase Price (the "PROFITS" and, together with the Certificates, the "ESCROWED
PROPERTY") are to be held in escrow to be held and released solely in accordance
with the terms and conditions of the Stock Purchase Agreement and this Escrow
Agreement; and
WHEREAS, the Seller and the Buyer believe that it is in their best interest
that the Escrow Agent have custody and possession of the Escrowed Property until
such time as the Escrow Agent is authorized in writing to release the Escrowed
Property in accordance with the terms and conditions of this Escrow Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
1. Appointment of Escrow Agent. The Seller and the Buyer hereby appoint the
Escrow Agent to serve as an escrow agent with respect to the Escrowed Property
and Escrow Agent hereby accepts such appointment in accordance with the terms of
this Escrow Agreement.
2. Duties of Escrow Agent.
a. On the Closing Date, the Seller shall deposit with the Escrow Agent
the Certificates. Upon payment by the Buyer of the Cash Consideration
and the Stock Consideration, as those terms are defined in the Stock
Purchase Agreement, and written acknowledgement thereof to the Escrow
Agent by the Seller, the Escrow Agent shall deliver to the Buyer the
Certificates. The Escrow Agent shall not release any Certificates to
the Buyer, except as set forth above, until the total Purchase Price
is paid to the Seller and the Escrow Agent receives satisfactory proof
thereof or as otherwise instructed by agreement of the Seller and the
Buyer. Upon an Event of Default, if the Seller elects to have the
Certificates returned and provides written notice of such intent to
the Escrow Agent, the Escrow Agent shall deliver the Certificates to
the Seller and notify the Buyer by copying it on the transmittal
letter.
b. Until the Purchase Price is paid in full to the Seller, the Company
shall deposit any and all profits it earns from its operations (the
"PROFITS") with the Escrow Agent. The Escrow Agent shall disburse the
Profits as follows:
i. Prior to the Purchase Price being paid in full, Escrow Agent
shall disburse all or a portion of the Profits to the Seller in
accordance with written instructions from the Buyer which shall
be applied as a prepayment to the Note, but in no instance shall
the Seller receive Profits in excess of the Cash Consideration;
ii. Upon the Purchase Price being paid in full to the Seller and the
Escrow Agent receiving satisfactory proof thereof, the Escrow
Agent shall disburse any remaining Profits to the Buyer; or
iii. As otherwise instructed by written agreement of the Seller and
the Buyer.
3. Suspension of Performance by Escrow Agent.
a. (i) If the Escrow Agent shall not receive written instructions in
accordance with Section 2 above on or prior to Xxxxx 00, 0000, xx, (xx) if at
any time, there shall exist any dispute between the Seller or the Buyer and the
Escrow Agent, or (iii) if at any time the Escrow Agent is unable to determine,
to the Escrow Agent's sole and absolute satisfaction, the proper disposition of
the Escrowed Property with respect to its obligations hereunder, or (iv) if the
Seller and the Buyer have not within thirty (30) days of the furnishing by the
Escrow Agent of a notice of resignation pursuant to Section 4 hereof appointed a
successor Escrow Agent to act hereunder, then the Escrow Agent may, in its sole
and absolute discretion suspend the performance of any of its obligations
(including without limitation any obligation to disburse all of the Escrowed
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Property) under this Escrow Agreement until such dispute or uncertainty shall be
resolved to the sole satisfaction of the Escrow Agent or until a successor
Escrow Agent shall have been appointed (as the case may be); provided, however,
that the Escrow Agent shall continue to hold the Escrowed Property in safe
custody.
b. The Escrow Agent shall have no liability to the Seller or the Buyer or
any other person with respect to any such suspension of performance,
specifically including any liability or claimed liability that may arise, or be
alleged to have arisen, out of or as a result of any delay in the delivery of
the Escrowed Property, or any delay in or with respect to any other action
required or requested of the Escrow Agent.
4. Resignation and Removal of Escrow Agent. The Escrow Agent may resign
from the performance of its duties hereunder at any time by giving thirty (30)
days' prior written notice to the Buyer and the Seller, or may be removed, with
or without cause, by the Seller and the Buyer acting jointly in writing, at any
time by the giving of ten (10) days' prior written notice to Escrow Agent. Such
resignation or removal shall take effect upon the appointment of a successor
Escrow Agent as provided herein below. Upon any such notice of resignation or
removal, the Buyer and the Seller jointly shall appoint a successor Escrow Agent
hereunder. Upon the acceptance in writing of any appointment as Escrow Agent
hereunder by a successor Escrow Agent, such successor Escrow Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Escrow Agent. The retiring Escrow Agent shall be
discharged from its duties and obligations under this Escrow Agreement upon its
delivery of the Escrowed Property to the successor Escrow Agent, but shall not
be discharged from any liability for actions taken as escrow agent hereunder
prior to such succession. After the retiring Escrow Agent's resignation or
removal, the provisions of this Escrow Agreement shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Escrow Agent
under this Escrow Agreement. The retiring Escrow Agent shall transmit all
records pertaining to the Escrowed Property after making copies of such records,
as the retiring Escrow Agent deems advisable.
5. Liability of Escrow Agent.
a. The Escrow Agent shall have no liability or obligation with respect to
the Escrowed Property except for Escrow Agent's willful misconduct or gross
negligence. The Escrow Agent's sole responsibility shall be for the safekeeping
and release of the Escrowed Property in accordance with the terms of this Escrow
Agreement. The Escrow Agent shall have no implied duties or obligations and
shall not be charged with knowledge or notice of any fact or circumstance not
specifically set forth herein. The Escrow Agent may rely upon any instrument, as
to its due execution, validity and effectiveness, but also as to the truth and
accuracy of any information contained therein which the Escrow Agent shall in
good faith believe to be genuine, to have been signed or presented by the person
or parties purporting to sign the same and to conform to the provisions of this
Escrow Agreement. In no event shall the Escrow Agent be liable for incidental,
indirect, special, consequential or punitive damages. The Escrow Agent shall not
be obligated to take any legal action or commence any proceeding in connection
with the Escrowed Property or to appear in, prosecute or defend any such legal
action or proceeding. Without limiting the generality of the foregoing, the
Escrow Agent shall not be responsible for or required to enforce any of the
terms or conditions of any agreement between the Buyer and the Seller. The
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Escrow Agent shall not be responsible or liable in any manner for the
performance by the Buyer and the Seller of their respective obligations under
any agreement nor shall the Escrow Agent be responsible or liable in any manner
for the failure of the Buyer and/or the Seller or any third party to honor any
of the provisions of this Escrow Agreement. The Escrow Agent may, if it so
desires, consult legal counsel selected by it in the event of any dispute or
question as to the construction of any of the provisions hereof or of its duties
hereunder, or relating to any dispute involving any party hereto, and shall
incur no liability and shall be fully indemnified from any liability whatsoever
in acting in accordance with the opinion or instruction of such counsel. The
Buyer shall promptly pay, upon demand, the reasonable fees and expenses of any
such counsel.
b. Nothing contained herein shall be deemed to prevent the Escrow Agent
from acting as legal counsel to the Seller in connection with matters arising
under this Escrow Agreement or the Stock Purchase Agreement or for any other
purpose. In the event that a dispute arises out of or in connection with this
Escrow Agreement, and the Seller or the Buyer reasonably determines that the
Escrow Agent cannot perform its obligations hereunder in an impartial manner
while acting as legal counsel to the Seller, then the party making that
determination may unilaterally demand the removal of the Escrow Agent. Such
removal shall take effect upon the appointment of a successor Escrow Agent as
provided in Section 4 hereof.
c. The Escrow Agent is authorized, in its sole discretion, to comply with
orders issued or process entered by any U.S. court with respect to the Escrowed
Property without determination by the Escrow Agent of such court's jurisdiction
in the matter.
6. Indemnification of Escrow Agent. From and at all times after the date of
this Escrow Agreement, each of the Buyer and the Seller shall, to the fullest
extent permitted by law, indemnify and hold harmless the Escrow Agent and each
partner, director, officer, employee, attorney, agent and affiliate of the
Escrow Agent (collectively, the "INDEMNIFIED PARTIES") against any and all
actions, claims (whether or not valid), losses, damages, liabilities, costs and
expenses of any kind or nature whatsoever (including without limitation
reasonable attorneys' fees, costs and expenses) incurred by or asserted against
any of the Indemnified Parties from and after the date hereof, whether direct,
indirect or consequential, as a result of or arising from or in any way relating
to any claim, demand, suit, action or proceeding (including any inquiry or
investigation) by any person, whether threatened or initiated, asserting a claim
for any legal or equitable remedy against any person under any statute or
regulation, including, but not limited to, any federal or state securities laws,
or under any common law or equitable cause or otherwise, arising from or in
connection with the negotiation, preparation, execution, performance or failure
of performance of this Escrow Agreement or any transactions contemplated herein,
whether or not any such Indemnified Party is a party to any such action,
proceeding or suit, or the target of any such inquiry or investigation;
provided, however, that no Indemnified Party shall have the right to be
indemnified hereunder for any liability finally determined by a court of
competent jurisdiction to have resulted solely from the gross negligence or
willful misconduct of such Indemnified Party. If any such action or claim shall
be brought or asserted against any Indemnified Party, such Indemnified Party
shall promptly notify each of the Buyer and the Seller in writing, and the Buyer
and/or the Seller shall assume the defense thereof, including the employment of
counsel and the payment of all expenses. Such Indemnified Party shall, in its
sole discretion, have the right to employ separate counsel (which may be
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selected by such Indemnified Party in its sole discretion) in any such action
and to participate in the defense thereof, and in such event the fees and
expenses of such counsel up to a reasonable amount shall be paid by the Buyer
and/or the Seller. All such fees and expenses payable by the Buyer and/or the
Seller pursuant to the foregoing shall be paid from time to time as incurred,
both in advance of and after the final disposition of such action or claim. The
obligations of the the Buyer and/or the Seller under this Section 6 shall
survive any termination of this Escrow Agreement and the resignation or removal
of Escrow Agent, and shall be independent of any obligation herein owed to the
Escrow Agent.
7. Representations and Warranties.
a. The Seller makes the following representations and warranties to the
Escrow Agent:
i. The Seller has full power and authority to execute and deliver
this Escrow Agreement and to perform his obligations hereunder;
ii. This Escrow Agreement has been executed by and constitutes a
valid and binding agreement of the Seller, enforceable in
accordance with its terms.
iii. The execution, delivery, and performance by the Seller of this
Escrow Agreement will not violate, conflict with, or cause a
default under any applicable law or regulation, any court order
or administrative ruling or decree to which the Seller is a party
or any of his property is subject, or any agreement, contract,
indenture, or other binding arrangement to which the Seller is a
party or any of his property is subject.
iv. The Seller hereby acknowledges that the status of the Escrow
Agent is that of agent for the Seller for the limited purposes
set forth herein.
v. All of the representations and warranties of the Seller contained
herein are true and complete as of the date hereof and will be
true and complete at the time the Escrowed Property are delivered
to or released from escrow by the Escrow Agent.
b. Buyer makes the following representations and warranties to Escrow
Agent:
i. The Buyer has full power and authority to execute and deliver
this Escrow Agreement and to perform his obligations hereunder;
ii. This Escrow Agreement has been executed by and constitutes a
valid and binding agreement of the Buyer, enforceable in
accordance with its terms.
iii. The execution, delivery, and performance by the Buyer of this
Escrow Agreement will not violate, conflict with, or cause a
default under any applicable law or regulation, any court order
or administrative ruling or decree to which the Buyer is a party
or any of his property is subject, or any agreement, contract,
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indenture, or other binding arrangement to which the Buyer is a
party or any of his property is subject.
iv. The Buyer hereby acknowledges that the status of the Escrow Agent
is that of agent for the Buyer for the limited purposes set forth
herein.
v. All of the representations and warranties of the Buyer contained
herein are true and complete as of the date hereof and will be
true and complete at the time the Escrowed Property are delivered
to or released from escrow by the Escrow Agent.
8. Termination. Upon the delivery and disposition of the Escrowed Property
in accordance with this Escrow Agreement, this Escrow Agreement shall
automatically terminate and the Escrow Agent shall have no further obligation or
liability whatsoever with respect to the Escrow Agreement or the Escrowed
Property.
9. Expenses, Indemnification and Contribution.
a. The Seller and the Buyer (collectively referred to as the
"INDEMNITORS"), jointly and severally, agree to indemnify the Escrow
Agent and its partners, employees and agents (collectively referred to
as the "INDEMNITEES") against, and hold them harmless of and from, as
and when incurred, any and all claim, loss, liability, cost, damage
and expense, including without limitation, reasonable counsel fees,
which the Indemnitees may suffer or incur (collectively, "COST") by
reason of any action, claim, proceeding or investigation, brought
against or involving the Indemnitees arising out of or relating in any
way to this Escrow Agreement or any transaction to which this Escrow
Agreement relates, unless such action, claim or proceeding has been
judicially determined to be the sole result of the willful misconduct
or gross negligence of the Indemnitees.
b. If the indemnification provided for in Section 9.a is applicable, but
for any reason is held to be unavailable, the Indemnitors shall
contribute such amounts as are just and equitable to pay, or to
reimburse the Indemnitees for, the aggregate of Cost actually incurred
by the Indemnitees as a result of or in connection with, and any
amount paid in settlement of, any action, claim or proceeding arising
out of or relating in any way to any actions or omissions of the
Indemnitors.
c. The Seller and the Buyer agree to pay or reimburse the Escrow Agent
for its reasonable out-of-pocket attorney's fees and expenses incurred
in any action to enforce or interpret this Escrow Agreement or in
connection with the performance of its duties hereunder.
10. Notice. All notices and other communications hereunder shall be in
writing and shall be deemed to have been validly served, given or delivered five
(5) days after deposit in the United States mail, by certified mail with return
receipt requested and postage prepaid, when delivered personally, one (1) day
after delivery to any overnight courier, or when transmitted by facsimile
transmission facilities, and addressed to the party to be notified as follows:
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IF TO BUYER TO:
Air Transport Group Holdings, Inc.
Attn: Xxxxxx Xxxxxxx
0000 Xxxxxxxx Xxx
Xxxxx Xxxxxxxx, Xxxxxxx 00000
IF TO SELLER TO:
Xxxxxx X. Xxxxxxx
00000 XX 000xx Xxxxx
Xxxxx, Xxxxxxx 00000
WITH A COPY TO:
K&L Gates, LLP
Attention: Xxxx X. Xxxxxxxx, Esq.
000 X. Xxxxxxxx Xxxx.
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
or to such other address as each Party may designate for itself by notice to the
other parties.
11. Amendment or Waiver. This Escrow Agreement may be changed, waived,
discharged or terminated only by a writing signed by the Seller, the Buyer and
the Escrow Agent. No delay or omission by any Party in exercising any right with
respect hereto shall operate as a waiver. A waiver on any one occasion shall not
be construed as a bar to, or waiver of, any right or remedy on any future
occasion.
12. Severability. To the extent any provision of this Escrow Agreement is
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Escrow Agreement.
13. Dispute Resolution and Governing Law. This Escrow Agreement shall be
deemed to be made and entered into in the State of Florida, and shall in all
respects be interpreted, enforced and governed under Florida law, without giving
effect to Florida's conflict of laws principles. The Parties expressly consent
to the exclusive jurisdiction and venue of the United States District Court for
the Southern District of Florida.
14. Attorneys' Fees. The substantially prevailing Party in any action to
enforce or interpret this Escrow Agreement shall be entitled to attorneys' fees,
interest, costs and the expenses of litigation, both in trial and upon appeal.
15. Entire Agreement. This Escrow Agreement constitutes the entire
agreement among the Parties relating to the acceptance and disposition of the
Escrowed Property and sets forth in their entirety the obligations and duties of
the Escrow Agent with respect to the Escrowed Property.
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16. Definitions. Any capitalized terms used in this Escrow Agreement but
not defined herein shall have the meanings set forth in the Stock Purchase
Agreement.
17. Binding Effect. All of the terms of this Escrow Agreement, as amended
from time to time, shall be binding upon, inure to the benefit of and be
enforceable by the respective successors and assigns of the Buyer, the Seller
and the Escrow Agent.
18. Execution in Counterparts. This Escrow Agreement may be executed in one
or more counterparts including counterparts received as signed confirmed
facsimiles or via email, and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
as of the date set forth above.
XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx, Individually
AIR TRANSPORT GROUP HOLDINGS, INC.
By:
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Name:
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Title:
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K&L GATES LLP
By:
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Name:
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Title:
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