Exhibit a
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement ("Agreement") is made and entered into
by and between Xxxxx Brothers Aviation, Inc. (the "Company") at 0000 Xxxx 000
Xxxxx, Xxxx Xxxx Xxxx, Xxxx, 00000, a Utah corporation and Xxxx Xxxxxxxx
("Investor"), at 0000 Xxxxx 00xx Xxxxx, Xxxxxxxx Xxxxxx, Xxxxxxx 00000, an
individual.
Witnesseth
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WHEREAS, Investor desires to Purchase and the Company desires to sell three
million (3,000,000) shares of Xxxxx Brothers Aviation, Inc. common stock (the
"Securities");
NOW, THEREFORE, for and in consideration of the promises and obligations
contained herein, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which is hereby acknowledged, the parties hereby
agree to be legally bound as follows:
1. Purchase of Securities. Upon the terms and subject to the conditions set
forth in this Agreement and contained within the Company's Accredited
Investor Subscription Agreement (attached herewith as exhibit A),
Investor does hereby agree to buy and the Company does hereby agree to
sell and deliver to Investor, three million (3,000,000) shares of Xxxxx
Brothers Aviation, Inc. restricted common stock (SEC Rule 144), at the
purchase price of $1.00 per share.
2. Terms of Payment. Upon the execution of this Agreement (or as soon
thereafter as practicable), Investor shall pay to the Company five
hundred thousand dollars ($500,000) in certified funds and two million
five hundred thousand dollars ($2,500,000) in the form of transferring
ownership of the XxXxxxxxx Xxxxxxx Helicopter Systems (hereinafter
"MDHS") MD900 helicopter, serial number 900-00037, (P-82), including all
equipment/options installed and included (hereinafter "Helicopter") as
listed in MDHS Purchase Agreement #95-162 (hereinafter "MDHS Purchase
Agreement") between MDHS and HeliSource, Inc. (hereinafter "HSI"), dated
6/30/96, revision date 7/6/96, and the Special Commercial Invoice from
MDHS to HSI dated 6/7/96, including transfer of the MDHS Limited
Warranty of three (3) years or two thousand (2,000) hours of operation,
whichever shall occur first, as described in the Stipulation and Order
of the Bankruptcy Court approved agreement between MDHS and HSI, (the
Company acknowledges that the three year period began running on June
30, 1996, and that the Helicopter is essentially zero time, about five
(5) hours of total flight time).
3. Third Party Beneficiary to Agreement. In compliance with paragraph
Eighteenth of the MDHS Purchase Agreement, MDHS becomes a "Third Party
Beneficiary" to this Agreement only in that the Company acknowledges
that MDHS has disclaimed certain warranties and that the Company's
remedies under the Limited Warranty and Limitation of Liability
Agreement of the MDHS Purchase Agreement that the Company is assuming,
have been limited, and to the extent the Company may assert a claim
against MDHS for breach of warranty, the Company expressly acknowledges
and agrees that its remedies, if any, will be limited to the replacement
or repair of defective parts, and that in no event will MDHS be liable
for consequential or incidental damages, nor for property damage.
Investor agrees to promptly obtain the "written consent of MDHS" for the
transfer of the Limited Warranty (paragraphs
Sixteenth of the MDHS Purchase Agreement, and paragraph 8 of the Limited
Warranty, annex E of said Agreement).
4. Protective Provisions.
a. Board Meetings. Investor can, at Investor's discretion, appoint a non
voting representative to attend and observe any and all meetings of
the Company's Board of Directors or Investor can attend the meetings
as a non voting observer.
b. Liquidation. Any merger, consolidation, reorganization, change of
control, sale of all or substantially all of the Company's assets
(including its subsidiaries), liquidation, dissolution or winding up
of the Company, or commencement of any case in bankruptcy, can only
be done with Investor's prior approval.
c. Covenants of the Company. The Company shall not, without Investor's
prior permission: declare or pay any dividend on any capital stock of
the Company; increase the amount of any capital stock authorized to
be issued by the Company; redeem any capital stock of the Company;
sell, assign or transfer any patent, trademark, copyright or similar
rights (other than to subsidiaries of the Company), invest in other
entities (other than subsidiaries of the Company), nor increase
senior management compensation. The Company shall deliver to
Investor, in a timely manner, copies of its quarterly financial
statements (SEC forms 10q and 10k).
d. Protective Provision Ending Period. At the first occurrence of: five
years from the close of this agreement, or Investor no longer
continues to be a significant shareholder (having disposed of greater
than a 2/3 majority of the herein described shares), or when the bid
price of GBA's stock averages $5 or greater per share for a period of
20 consecutive trading days, all of the forgoing Protective
Provisions of this Agreement will become null and void.
5. Miscellaneous.
a. Investor makes no warranty what-so-ever regarding the Helicopter
other than warrantying that the title to the Helicopter the Investor
is providing to the Company is free and clear of all leans and
encumbrances and that, other than unperformed service bulletins and
airworthiness directives (if any), the Helicopter is in airworthy
condition and has not been damaged in any way.
b. Notices. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given, if delivered by
hand, FAX, or mailed, certified or registered mail with postage
prepaid:
If to the Company, at 0000 Xxxx 000 Xxxxx, Xxxx Xxxx Xxxx,
Xxxx, 00000, FAX # 000-000-0000, attention Xxxxx Xxxxx or such
other person and place as the Company shall furnish to Investor
in writing; or
If to Investor, at 0000 Xxxxx 00xx Xxxxx, Xxxxxxxx Xxxxxx,
Xxxxxxx 00000, FAX # 000-000-0000, attention Xxxx Xxxxxxxx or to
such other person and place as Investor shall furnish to the
Company in writing.
c. Default. Should any party to this Agreement default in any of the
covenants, conditions, or promises contained herein, the defaulting
party shall pay all costs and expenses, including a reasonable
attorney's fee, which may arise or accrue from enforcing this
Agreement, or in pursuing any remedy provided hereunder or by the
statutes of the State of Arizona.
d. Assignment. This Agreement may not be assigned in whole or in part by
the parties hereto without the prior written consent of the other
party or parties, which consent shall not be unreasonably withheld.
e. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their successors
and assigns.
f. Governing Law and Venue. This Agreement shall be governed by and
interpreted pursuant to the laws of the State of Arizona. Any action
to enforce the provisions of this Agreement shall be brought in a
court of competent jurisdiction within the State of Arizona.
g. Partial Invalidity. If any term, covenant, condition or provision of
this Agreement or the application thereof to any person or
circumstance shall to any extent be invalid or unenforceable, the
remainder of this Agreement or application of such term or provision
to persons or circumstances other than those as to which it is held
to be invalid or unenforceable shall not be affected thereby and each
term, covenant, condition or provision of this Agreement shall be
valid and shall be enforceable to the fullest extent permitted by
law.
h. No Oral Agreements. There are no oral agreements between the parties
and there are and will be no oral representations which will be
binding upon any of the parties hereto.
i. Rights are Cumulative. The rights and remedies granted hereunder
shall be in addition to and cumulative of any other rights or
remedies provided under the laws of the State of Arizona.
j. Waiver. No delay or failure in the exercise of any power or right
shall operate as a waiver thereof or as an acquiescence in default.
No single or partial exercise of any power or right hereunder shall
preclude any other or further exercise thereof or the exercise of any
other power or right.
k. Further Action. The parties hereto agree to execute and deliver such
additional documents and to take such other and further action as may
be required to carry out fully the transaction(s) contemplated
herein.
l. Amendment. This Agreement or any provision hereof may not be changed,
waived, terminated or discharged except by means of a written
supplemental instrument signed by the party or parties against whom
enforcement of the change, waiver, termination, or discharge is
sought.
m. Counterparts. This agreement may be executed in two or more partially
or fully executed counterparts, each of which shall be deemed an
original and shall bind the signatory, but all of which together
shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto executed the foregoing Securities
Purchase Agreement effective the 14th day of May, 1997.
Investor:
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
Attest: _______________________
Xxxxx Brothers Aviation, Inc.:
By /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx, President
Attest: _____________________
