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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is entered into as of
December 5, 1998 among Xxxxxxxxx Industries, Inc., a Delaware corporation
("Xxxxxxxxx"), Solair, Inc., a Florida corporation ("Solair") and Banner
Aerospace, Inc., a Delaware corporation (the "Shareholder").
RECITALS
Solair is engaged in the purchase, sale and support of aircraft parts
and the provision of related services. Xxxxxxxxx desires to purchase, and the
Shareholder desires to sell, all of the issued and outstanding shares of capital
stock of Solair, on the terms and subject to the conditions contained in this
Agreement.
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants
and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. As used herein, the following terms shall have
the following meanings:
"Acquisition" means the acquisition by Xxxxxxxxx from the
Shareholder of the Shares.
"Actual Designated Costed Inventory Value" as of the Closing
Date means the aggregate of (1) the actual counts of physical
items of Designated Costed Inventory held by Solair as of the
Closing Date, multiplied by (2) the unit cost of such items as
reflected on the books and records of Solair as of the Closing
Date.
"Actual Non-Designated Costed Inventory Value" as of the
Closing Date means the aggregate of (1) the actual counts of
physical items of Non- Designated Costed Inventory held by
Solair as of the Closing Date, multiplied by (2) the unit cost
of such items as reflected on the books and records of Solair
as of the Closing Date.
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"Affiliate" shall have the meaning ascribed to it in Rule
12b-2 of the General Rules and Regulations promulgated under
the Exchange Act, as in effect on the date hereof.
"Book Designated Costed Inventory Value" as of the Closing
Date means (1) the aggregate of (a) the physical items of
Designated Costed Inventory held by Solair as of August 31,
1998 as reflected on the books and records of Solair as of
such date, multiplied by (b) the unit cost of such items as
reflected on the books and records of Solair as of such date
minus (2) the aggregate of (x) the physical items of
Designated Costed Inventory sold by Solair from August 31,
1998 to the Closing Date, multiplied by (y) the unit cost of
such items as reflected on the books and records of Solair as
of August 31, 1998.
"Book Non-Designated Costed Inventory Value" as of the Closing
Date means (1) the aggregate of (a) the physical items of
Non-Designated Costed Inventory held by Solair as of August
31, 1998 as reflected on the books and records of Solair as of
such date, multiplied by (b) the unit cost of such items as
reflected on the books and records of Solair as of date, minus
(2) the aggregate of (x) the physical items of Non-Designated
Costed Inventory sold by Solair from August 31, 1998 to the
Closing Date, multiplied by (y) the unit cost of such items as
reflected on the books and records of Solair as of August 31,
1998, plus (3) the aggregate of (e) the physical items of Non-
Designated Costed Inventory purchased by Solair from August
31, 1998 to the Closing Date, multiplied by (f) the unit cost
paid by Solair for such items.
"Bulk Inventory" means all inventory owned by Solair which
does not constitute Costed Inventory.
"Common Stock" means the shares of common stock, $1.00 par
value per share, of Solair.
"Confidentiality Agreement" means the Confidentiality
Agreement dated as of October 29, 1998 between the Shareholder
and Xxxxxxxxx.
"Contract" means any agreement, contract, lease, note,
mortgage, indenture, loan agreement, franchise agreement,
covenant, employment agreement, license, instrument, purchase
and sales order, commitment, undertaking or obligation, in
each case, whether written or oral, express or implied.
"Controlling Interest," with respect to any Person, means
ownership or control, directly or indirectly, of more than
fifty percent (50%) of the issued and outstanding capital
stock or other equity interest having ordinary voting power to
elect a majority of the board of directors or other governing
body
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of such Person (irrespective of whether other securities or
equity interests of such Person shall or might have such
voting power upon the occurrence of any contingency).
"Costed Inventory" means all inventory owned by Solair for
which there is a separate line item reflecting the count and
unit cost therefor on the books and records maintained by
Solair.
"Designated Accountants" means KPMG Peat Marwick LLP.
"Designated Costed Inventory" means all Costed Inventory
included in the Designated Inventory.
"Designated Inventory" means the items of Inventory set forth
on Schedule 1.1(a).
"Escrow Agent" means NationsBank, N.A. or such other Person as
the parties may select to serve as Escrow Agent under the
Escrow Agreement.
"Escrow Agreement" means the Escrow Agreement to be entered
into by Xxxxxxxxx, the Shareholder and the Escrow Agent at
Closing, in the form attached hereto as Exhibit A (with such
changes as may be required by the Escrow Agent).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Xxxxxxxxx Guaranty" means a Guaranty of The Xxxxxxxxx
Corporation in the form attached hereto as Exhibit B, with
such changes thereto which may be requested by the banks party
to the revolving credit facility maintained by The Xxxxxxxxx
Corporation, which changes either (i) do not have an adverse
effect on the rights of Xxxxxxxxx under such Guaranty, or (ii)
are otherwise acceptable to Xxxxxxxxx.
"Familial Affiliate," with respect to any person shall mean
any person who is a member of the immediate family of such
person and any entity in which any such person owns a
Controlling Interest.
"GAAP" means generally accepted accounting principles in
effect in the United States of America from time to time.
"Governmental Authority" means any nation or government, any
state, regional, local or other political subdivision thereof,
and any entity or official exercising executive, legislative,
judicial, regulatory or administrative functions of or
pertaining to government.
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"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"Income Taxes" means Taxes on or measured by income, whether
net income or gross income, including, without limitation,
alternative minimum Taxes imposed under the Code.
"Indebtedness" means any indebtedness for borrowed money
(including accrued but unpaid interest), whether owed to a
bank or any other Person, remaining payments on capitalized
equipment leases and remaining payments on covenants not to
compete, but excluding operating leases.
"Independent Accountants" means an independent accounting firm
of national reputation which has not performed services for
Xxxxxxxxx, Xxxxxx or the Shareholder, or any of their
respective Affiliates, during the preceding three (3) year
period, which is selected by Xxxxxxxxx and the Shareholder (or
if they cannot agree, which is selected by the Designated
Accountants and the Shareholder Accountants).
"Inventory" means all Bulk Inventory and Costed Inventory.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, but not
limited to, any conditional sale or other title retention
agreement, any lease in the nature thereof (other than
operating leases), and the filing of or agreement to give any
financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction in connection with such
mortgage, pledge, security interest, encumbrance, lien or
charge).
"Material Adverse Change (or Effect)" means a change (or
effect) in financial condition, properties, assets,
liabilities, rights, obligations that exist as of the date of
this Agreement, current operations or business, which change
(or effect) individually or in the aggregate, is materially
adverse to such condition, properties, assets, liabilities,
rights, obligations, operations or business.
"Modified GAAP" means GAAP, with those modifications and
adjustments set forth on Schedule 1.1(b).
"Net Worth" means the amount if any, by which the aggregate
total assets of Solair exceeds the aggregate total liabilities
of Solair, in each case, determined in accordance with
Modified GAAP.
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"Non-Designated Costed Inventory" means all Costed Inventory
other than Designated Costed Inventory.
"Non-Income Taxes" means Taxes other than Income Taxes.
"Permitted Liens" means (a) Liens arising by operation of law,
including, without limitation, materialmen's, mechanic's,
workmen's and repairmen's Liens, in each case, securing any
liabilities of Solair (i) which are reflected on the Current
Balance Sheet (as hereinafter defined) and not heretofore paid
or discharged, (ii) incurred in the ordinary course of
business consistent with past practice since the date of the
Current Balance Sheet (none of which relates to breach of
contract, breach of warranty, tort, infringement or violation
of law, or which arose out of any action, suit, claim,
governmental investigation or arbitration proceeding), or
(iii) set forth on Schedule 4.11 which were incurred in the
ordinary course of business prior to the date of the Current
Balance Sheet and, in accordance with GAAP consistently
applied, were not required to be recorded thereon; (b) Liens
for Taxes not yet due and payable; and (c) Liens for Taxes
which are being contested in good faith and are set forth on
Schedule 1.1(c).
"Permitted Sempati Transaction" means the write-off by Solair
on its books and records of the receivable in the amount of
One Million Three Hundred Twenty Five Thousand Eight Hundred
Fifty Dollars ($1,325,850) currently payable to Solair by P.T.
Sempati Air or Asean Aviation Services, Inc. ("Sempati"), in
exchange for Solair's acquisition from Sempati of certain
inventory to be designated by Solair and Sempati in the
agreement to be entered into between them in connection with
the Permitted Sempati Transaction (the "Sempati Inventory").
"Person" means an individual, partnership, corporation,
business trust, joint stock company, estate, trust,
unincorporated association, joint venture, Governmental
Authority or other entity, of whatever nature.
"Post-Closing Period" means a Tax period beginning after and
ending after the Closing Date.
"Pre-Closing Period" means a Tax period ending on or prior to
the Closing Date.
"Receivables" means all receivables of Solair reflected on the
Adjusted Closing Date Balance Sheet, including all trade
account receivables arising from the provision of services,
sale of inventory, notes receivable and insurance proceeds
receivable.
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"SEC" means the Securities and Exchange Commission.
"Shareholder Accountants" means Xxxxxx Xxxxxxxx LLP.
"Shares" means all of the issued and outstanding shares of
Common Stock.
"Straddle Period" means a Tax period beginning on or before,
but ending after, the Closing Date.
"Tax Agreement" means the Tax Agreement to be entered into by
the parties at Closing in the form attached hereto as Exhibit
C.
"Tax Return" means any return (including any information
return), report, statement, schedule, notice, form or other
document or information filed with or submitted to or required
to be filed with or submitted to any Governmental Authority in
connection with or with respect to the determination,
assessment, collection or payment of any Taxes.
"Taxes" means all taxes, including, but not limited to,
income, excise, property, sales, franchise, intangible,
withholding, social security and unemployment taxes, levies,
assessments, tariffs, duties (including customs duties),
deficiencies or other fees, imposed, assessed or collected by
or under the authority of any Governmental Authority, or
payable pursuant to any tax sharing agreement or other
contract relating to the sharing or payment of any such tax,
levy, assessment, tariff, duty (including customs duties),
deficiency or other fee, and any related charge or amount,
including, but not limited to, any fine, penalty, interest or
additional tax.
1.2 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the
defined meanings when used in any certificates, reports or other documents made
or delivered pursuant hereto or thereto, unless the context otherwise requires.
(b) Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) All matters of an accounting nature in connection
with this Agreement and the transactions contemplated hereby shall be determined
in accordance with GAAP applied on a basis consistent with prior periods, where
applicable, except as otherwise specifically provided herein.
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(d) As used herein, the neuter gender shall also denote
the masculine and feminine, and the masculine gender shall also denote the
neuter and feminine, where the context so permits.
(e) Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
(f) Whenever the word "hereunder" or "herein" is used in
this Agreement, it shall be deemed to mean "under this Agreement" or "in this
Agreement," respectively.
(g) Whenever this Agreement provides for a payment to be
made by any party, such payment shall be made by wire transfer of immediately
available, United States federal funds, to one or more bank accounts designated
in writing by the recipient thereof.
(h) Whenever any representation or warranty of a
corporation contained herein is qualified by "knowledge", such "knowledge" shall
mean the actual knowledge of the officers and directors of the corporation which
is making such representation or warranty, after reasonable inquiry.
ARTICLE II
PURCHASE AND SALE OF SHARES
2.1 THE ACQUISITION. Subject to the terms and conditions of this
Agreement, the Shareholder shall at the Closing (as hereinafter defined) sell,
convey, transfer, assign and deliver to Xxxxxxxxx, and Xxxxxxxxx shall at the
Closing purchase, acquire and accept from the Shareholder, the Shares, free and
clear of any Liens.
2.2 PURCHASE PRICE. The aggregate purchase price to be paid by
Xxxxxxxxx to the Shareholder in exchange for the Shares (the "Purchase Price")
shall consist of:
(a) a payment in the amount of Fifty Seven Million
Dollars ($57,000,000), minus the positive amount, if any, by which the Net Worth
of Solair as of the Closing Date (as hereinafter defined) (after taking into
account the write-down provided for in Section 6.21) is less than Fifty Five
Million Seven Hundred Fifty Seven Thousand Eight Hundred and Eighty Two Dollars
($55,757,882), plus the positive amount, if any, by which the Net Worth of
Solair as of the Closing Date (after taking into account the write-down provided
for in Section 6.21) is more than Fifty Five Million Seven Hundred Fifty Seven
Thousand Eight Hundred and Eighty Two Dollars ($55,757,882); and
(b) a Warrant (the "Warrant") in the form attached hereto
as Exhibit D for the purchase of Three Hundred Thousand (300,000) shares of
common stock, par value $.001 per share,
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of Xxxxxxxxx (the "Xxxxxxxxx Common Stock") at a price per share equal to Twenty
Seven Dollars and Fifty Cents ($27.50).
2.3 PAYMENT OF ESTIMATED PURCHASE PRICE. At least two days prior
to the Closing Date, Xxxxxxxxx and the Shareholder shall estimate by mutual
agreement the amount of the Purchase Price (the "Estimated Purchase Price"),
which estimate shall be based upon the balance sheet of Solair as of the last
day of the immediately preceding calendar month (or if such balance is not
available, as of the last day of the calendar month preceding such month),
adjusted by Modified GAAP consistent with the methodology used in connection
with the preparation of the Current Balance Sheet (as hereinafter defined). At
the Closing, Xxxxxxxxx shall pay the Estimated Purchase Price, as follows:
(a) Xxxxxxxxx shall deliver to the Escrow Agent the sum
of Five Million Dollars ($5,000,000) (the "Escrowed Amount") to be held in
accordance with Article IX;
(b) Xxxxxxxxx shall pay to the Shareholder the balance of
the Estimated Purchase Price (the "Closing Date Payment"); and
(c) Xxxxxxxxx shall execute and deliver the Warrant to
the Shareholder.
2.4 CLOSING DATE PAYMENT ADJUSTMENT. Within ninety (90) days
following the Closing Date, Xxxxxxxxx shall cause the Designated Accountants to
prepare an audit of the balance sheet of Solair as of the Closing Date (the
"Audited Closing Date Balance Sheet") (prepared in accordance with GAAP on a
basis consistent with the past practices of Solair). The Shareholder shall be
entitled to participate in the conduct of such audit. Upon completion of the
audit, Xxxxxxxxx shall prepare and deliver to the Shareholder a certificate
verified as to accuracy by its Chief Financial Officer (the "Closing Date
Payment Certificate") (i) attaching a copy of the Audited Closing Date Balance
Sheet of Solair, (ii) attaching a copy of the unaudited, internally prepared
balance sheet of Solair as of the Closing Date, which shall be based upon the
Audited Closing Date Balance Sheet, as adjusted by Modified GAAP consistent with
the methodology used in the preparation of the Current Balance Sheet (as
hereinafter defined) (the "Adjusted Closing Date Balance Sheet") and (iii)
setting forth the actual amount of the Purchase Price (which actual amount is
referred to as the "Actual Purchase Price") and the method of calculation
thereof in reasonable detail. Notwithstanding anything to the contrary contained
herein, for purposes of computation of the Adjusted Closing Date Balance Sheet
and the Actual Purchase Price, the amount of receivables carried on the books
and records of Solair shall be increased by the amount of receivables owed to it
by Sempati which are written-off by Solair as a result of or in connection with
the Permitted Sempati Transaction, and the amount at which Inventory is carried
on the books and records of Solair shall be decreased by the difference between
the Sempati Inventory received by Solair in connection with the Permitted
Sempati Transaction and the Sempati Inventory sold by Solair on or prior to the
Closing Date (which shall in each case be valued based upon the amounts shown
for each item of Sempati Inventory on the books and records of Solair).
Xxxxxxxxx and the Shareholder shall share equally any costs or expenses incurred
in connection with the preparation of such Audited Closing Date Balance Sheet.
If within sixty (60) days after the Closing Date Payment Certificate is
delivered to the Shareholder, the Shareholder shall not have given written
notice to Xxxxxxxxx setting forth in detail any objection to the Actual Purchase
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Price, then such determination of the Actual Purchase Price shall be final and
binding on the parties hereto. Xxxxxxxxx shall make available to the Shareholder
during such sixty (60) day period the work papers prepared by the Designated
Accountants in the course of the preparation of the Audited Closing Date Balance
Sheet and the work papers for the preparation of the Adjusted Closing Date
Balance Sheet. If the Shareholder, within such sixty (60) day period following
delivery of the Closing Date Payment Certificate, shall give written notice to
Xxxxxxxxx setting forth in reasonable detail any objection to such determination
of the Actual Purchase Price, Xxxxxxxxx and the Shareholder shall endeavor to
reach agreement within the thirty (30) day period following the receipt by
Xxxxxxxxx of the notice of objection. If the parties are unable to reach
agreement within such thirty (30) day period, then the matter shall be submitted
to the Independent Accountants for determination of those issues as to which the
parties shall have been unable to reach agreement in connection with the
calculation of the Actual Purchase Price, which determination shall be final and
binding on the parties. Xxxxxxxxx and the Shareholder shall share equally any
costs or expenses of the Independent Accountants incurred in connection with the
determination of such issues. If the Estimated Purchase Price is greater than
the Actual Purchase Price, then the Shareholder shall repay to Xxxxxxxxx within
ten (10) business days following receipt of the Closing Date Payment Certificate
or, if disputed, within ten (10) business days following the earlier of the date
on which the parties resolve the dispute or the date of determination of the
issues certified to the Independent Accountants, the difference between the
Estimated Purchase Price and the Actual Purchase Price. If the Shareholder shall
fail to pay such amount when due, then Xxxxxxxxx shall have the right (but not
the obligation), in addition to any other remedies which it may have, to deem
such amount to be Xxxxxxxxx Indemnifiable Damages in accordance with Article IX
(provided that the Xxxxxxxxx Indemnification Threshold shall not be applicable
to such amount and such amount shall not count against the Xxxxxxxxx
Indemnification Cap). If the Actual Purchase Price is greater than the Estimated
Purchase Price, then Xxxxxxxxx shall pay to the Shareholder within ten (10)
business days following receipt of the Closing Date Payment Certificate or, if
disputed, within ten (10) business days following the earlier of the date on
which the parties resolve their dispute or the date of determination of the
issues certified to the Independent Accountants, the difference between the
Actual Purchase Price and the Estimated Purchase Price. If Xxxxxxxxx shall fail
to pay such amount when due, then the Shareholder shall have the right (but not
the obligation), in addition to any other remedies which it may have, to deem
such amount to be Shareholder Indemnifiable Damages in accordance with Article
IX (provided that the Shareholder Indemnification Threshold shall not be
applicable to such amount and such amount shall not count against the
Shareholder Indemnification Cap).
2.5 THE CLOSING. Subject to the terms and conditions of this
Agreement, the consummation of the Acquisition (the "Closing") shall take place
on December 31, 1998, or if all of the conditions set forth in Articles VII and
VIII shall not have been satisfied or waived as of such date, as promptly as
practicable (and in any event within five (5) business days) after satisfaction
or waiver of the conditions set forth in Articles VII and VIII, at the offices
of Akerman, Senterfitt & Xxxxxx, P.A., Ft. Lauderdale, Florida, or such other
time and place as the parties may otherwise agree (the "Closing Date").
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXXXXXX
As a material inducement to the Shareholder to enter into this
Agreement and to consummate the transactions contemplated hereby, Xxxxxxxxx
makes the following representations and warranties to the Shareholder:
3.1 CORPORATE STATUS. Xxxxxxxxx is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
3.2 CORPORATE POWER AND AUTHORITY. Xxxxxxxxx has the corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
Xxxxxxxxx has taken all actions necessary to authorize the execution and
delivery of this Agreement, the performance of its obligations hereunder and the
consummation of the transactions contemplated hereby.
3.3 ENFORCEABILITY. This Agreement has been duly executed and
delivered by Xxxxxxxxx and constitutes a legal, valid and binding obligation of
Xxxxxxxxx, enforceable against Xxxxxxxxx in accordance with its terms, except as
the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and general equitable principles regardless of whether such
enforceability is considered in a proceeding at law or in equity.
3.4 NO VIOLATION. Except as set forth in Schedule 3.4, neither the
execution or delivery of this Agreement by Xxxxxxxxx, the performance by
Xxxxxxxxx of its obligations hereunder or the consummation by it of the
transactions contemplated by this Agreement will (i) contravene any provision of
the Certificate of Incorporation or Bylaws (or other organizational documents)
of Xxxxxxxxx, (ii) violate or conflict with any law, statute, ordinance, rule,
regulation, decree, writ, injunction, judgment or order of any Governmental
Authority or of any arbitration award which is either applicable to, binding
upon or enforceable against Xxxxxxxxx except where such failure to comply would
not have a Material Adverse Effect on Xxxxxxxxx, (iii) conflict with, result in
any breach of, or constitute a default (or an event which would, with the
passage of time or the giving of notice or both, constitute a default) under, or
give rise to a right to terminate, amend, modify, abandon or accelerate, any
Contract which is applicable to, binding upon or enforceable against Xxxxxxxxx,
(iv) result in or require the creation or imposition of any Lien upon or with
respect to any of the property or assets of Xxxxxxxxx or (v) require the
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Authority, any court or tribunal or any other Person who or
which is a party to any Contract to which Xxxxxxxxx is a party, except any SEC
and other filings required to be made by Xxxxxxxxx or the Shareholder and any
filings required to be made by the parties under the HSR Act, if any.
3.5 NO COMMISSIONS. Xxxxxxxxx has not incurred any obligation for
any finder's or broker's or agent's fees or commissions or similar compensation
in connection with the transactions
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contemplated hereby, other than (a) fees payable to Helix Management Company II,
LLC, and (b) any other fees which Xxxxxxxxx has agreed or agrees to pay to any
Person, all of which will be paid by, and be the sole obligation of, Xxxxxxxxx.
3.6 INVESTMENT REPRESENTATIONS.
(a) Xxxxxxxxx is an accredited investor as such term is
defined in Rule 501 of the General Rules and Regulations under the Securities
Act of 1933, as amended (the "Securities Act") and has such knowledge and
experience in financial and business matters, including, without limitation, in
the aviation parts business, that it is capable of evaluating the merit and
risks of the acquisition of the Shares.
(b) Xxxxxxxxx has provided the Shareholder and Solair
with Due Diligence Request Lists (copies of which are attached hereto as
Schedule 3.6) setting forth the categories of information and documents which it
believes appropriate to review in connection with the acquisitions of the
Shares, and has reviewed those materials provided by the Shareholder and Solair
in response thereto and has participated in discussions with the senior
management team of Solair and representatives of the Shareholder.
(c) The Shares will be acquired by Xxxxxxxxx for its own
account for investment only and not with a view to, or with any intention of, a
distribution or resale thereof, in whole or part, or the grant of any
participation therein.
(d) Xxxxxxxxx acknowledges that (i) the Shares have not
been registered under the Securities Act or state securities laws by reason of a
specific exemption or exemptions from registration under the Securities Act and
applicable state securities laws and that certificates representing the Shares
may bear a legend to such effect, (ii) the Shareholder's reliance on such
exemptions is predicated in part on the accuracy and completeness of the
representations and warranties of Xxxxxxxxx contained herein, (iii) such Shares,
therefore, cannot be resold unless registered under the Securities Act and
applicable state securities laws, or unless an exemption from registration is
available, (iv) there is no public market for such Shares, (v) no federal or
state agency has recommended or endorsed the purchase of the Shares, and (vi)
and Xxxxxxxxx will not be able to readily liquidate an investment in the Shares.
3.7 SEC DOCUMENTS. Xxxxxxxxx has delivered to the Shareholder
copies of the following filings made by it with the SEC: (i) Xxxxxxxxx'x Annual
Report on Form 10-K for the fiscal year ended December 31, 1997, (ii)
Xxxxxxxxx'x Quarterly Reports on Form 10-Q for the fiscal quarters ended March
31, 1998, June 30, 1998 and September 30, 1998, (iii) Xxxxxxxxx'x Current
Reports on Form 8-K filed with the SEC on February 27, 1998, April 14, 1998, May
18, 1998 and June 30, 1998 and (iv) Xxxxxxxxx'x proxy statement relating to its
annual meeting of shareholders held on May 29, 1998 (collectively, the "SEC
Reports"). As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations promulgated thereunder and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
SOLAIR AND THE SHAREHOLDER
As a material inducement to Xxxxxxxxx to enter into this Agreement and
to consummate the transactions contemplated hereby, Solair and the Shareholder,
jointly and severally, make the following representations and warranties to
Xxxxxxxxx:
4.1 CORPORATE STATUS. Solair is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida and
has the requisite corporate power and authority to own or lease its properties
and to carry on its business as now being conducted. Solair is legally qualified
to transact business as a foreign corporation, and is in good standing as such,
in each of the jurisdictions in which the nature of its properties and/or the
conduct of its business requires such qualification, except where the failure to
be so qualified would not have a Material Adverse Effect on Solair. Schedule 4.1
sets forth (i) each of the jurisdictions in which Solair is legally qualified to
transact business as a foreign corporation and (ii) each of the names under
which Solair has at any time done business. Solair has fully complied in all
material respects with all of the requirements of any statute governing the use
and registration of fictitious names, and has the legal right to use the names
under which it operates its business. Except as set forth on Schedule 4.1,
Solair has not changed its name or used any assumed or fictitious name other
than those listed on Schedule 4.1, or been the surviving entity in a merger,
acquired any businesses or changed its principal place of business or chief
executive office, in each case, since the date of its organization. There is no
pending or, to the knowledge of Solair or the Shareholder, threatened proceeding
for the dissolution, liquidation, insolvency or rehabilitation of Solair.
4.2 POWER AND AUTHORITY. Each of Solair and the Shareholder has
the corporate power and authority to execute and deliver this Agreement, to
perform its respective obligations hereunder and to consummate the transactions
contemplated hereby. Each of Solair and the Shareholder has taken all action
necessary to authorize the execution and delivery of this Agreement, the
performance of its respective obligations hereunder and the consummation of the
transactions contemplated hereby.
4.3 ENFORCEABILITY. This Agreement has been duly executed and
delivered by each of Solair and the Shareholder, and constitutes the legal,
valid and binding obligation of each of them, enforceable against each of them
in accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and general equitable principles
regardless of whether such enforceability is considered in a proceeding at law
or in equity.
4.4 CAPITALIZATION. Solair has (a) 7,500 shares of Common Stock
authorized and no other shares of any class of capital stock authorized, (b) 800
shares of Common Stock issued and
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outstanding, and (c) no shares of Common Stock held in treasury. All of the
issued and outstanding shares of capital stock of Solair (i) have been duly
authorized and validly issued and are fully paid and non-assessable, (ii) were
issued in compliance with all applicable state and federal securities laws, and
(iii) were not issued in violation of any preemptive rights or rights of first
refusal. No preemptive rights or rights of first refusal exist with respect to
the shares of capital stock of Solair, and no such rights arise by virtue of or
in connection with the transactions contemplated hereby. There are no
outstanding or authorized rights, options, warrants, convertible securities,
subscription rights, conversion rights, exchange rights or other agreements or
commitments of any kind that could require Solair to issue or sell any shares of
its capital stock (or securities convertible into or exchangeable for shares of
its capital stock). There are no outstanding stock appreciation, phantom stock,
profit participation or other similar rights with respect to Solair. There are
no proxies, voting rights or other agreements or understandings with respect to
the voting or transfer of the capital stock of Solair. Solair is not obligated
to redeem or otherwise acquire any of its outstanding shares of capital stock.
4.5 SHAREHOLDERS. The Shareholder is the holder of all issued and
outstanding shares of capital stock of Solair, and, except as set forth in
Schedule 4.5 or as may be imposed under federal or state securities laws on all
issuers of securities generally, the Shareholder owns such shares free and clear
of all Liens, restrictions and claims of any kind.
4.6 NO VIOLATION. Except as set forth in Schedule 4.6, neither the
execution or delivery of this Agreement by Solair or the Shareholder, the
performance by either of them of their respective obligations hereunder or the
consummation by either of them of the transactions contemplated by this
Agreement will (i) contravene any provision of the Articles of Incorporation or
Bylaws (or other organizational documents) of Solair or the Shareholder, (ii)
violate or conflict with any law, statute, ordinance, rule, regulation, decree,
writ, injunction, judgment or order of any Governmental Authority or of any
arbitration award which is either applicable to, binding upon or enforceable
against either Solair or the Shareholder except where such failure to comply
would not have a Material Adverse Effect on Solair or the Shareholder, (iii)
conflict with, result in any breach of, or constitute a default (or an event
which would, with the passage of time or the giving of notice or both,
constitute a default) under, or give rise to a right to terminate, amend,
modify, abandon or accelerate, any Designated Contract (as hereinafter defined)
which is binding upon or enforceable against either Solair or the Shareholder,
(iv) result in or require the creation or imposition of any Lien upon or with
respect to any of the property or assets of either Solair or the Shares or (v)
require the consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, any court or tribunal, or any
Person who or which is a party to any of the Designated Contracts, except any
SEC and other filings required to be made by Xxxxxxxxx or the Shareholder and
any filings required to be made by the parties under the HSR Act, if any.
4.7 RECORDS OF SOLAIR. The copies of the Articles of Incorporation
and Bylaws of Solair which were provided to Xxxxxxxxx are true, accurate and
complete and reflect all amendments made through the date of this Agreement. The
minute books for Solair made available to Xxxxxxxxx for review were correct and
complete in all material respects as of the date of such review, no further
entries have been made through the date of this Agreement, such minute books
contain the true
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signatures of the persons purporting to have signed them, and each such minute
book contains an accurate record of all material corporate actions of the
shareholders and directors (and any committees thereof) of Solair taken by
written consent or at a meeting since the date of its organization. All material
corporate actions taken by Solair have been duly authorized or ratified. All
non-financial accounts, books, ledgers and official and other records of Solair
have been fully, properly and accurately kept and completed in all respects, and
there are no inaccuracies or discrepancies of any kind contained therein. The
stock ledgers of Solair, as previously made available to Xxxxxxxxx, contain
complete and accurate records of all issuances, transfers and cancellations of
shares of the capital stock of Solair.
4.8 SUBSIDIARIES. Solair does not own, directly or indirectly, any
outstanding voting securities of or other interests in, or control, any
corporation, partnership, joint venture or other business entity other than
Banner Aerospace (U.K.) Limited, a corporation organized under the laws of the
United Kingdom, which is wholly-owned by Solair and Xxxxxx Xxxxxxxxx. Except as
set forth in Schedule 4.5 or as may be imposed under federal or state securities
laws on all issuers of securities generally, Solair and Xxxxxx Xxxxxxxxx own the
outstanding shares of capital stock of Banner Aerospace (U.K.) Limited free and
clear of all Liens, restrictions and claims of any kind. Banner Aerospace (U.K.)
Limited serves only as a sales office for Solair, employs approximately six (6)
persons, owns no material assets, and has no Indebtedness.
4.9 FINANCIAL STATEMENTS. The Shareholder has delivered to
Xxxxxxxxx the unaudited, internally-prepared financial statements of Solair for
the years ended March 31, 1996, March 31, 1997, and March 31, 1998
(collectively, the "Annual Financial Statements"), and an unaudited,
internally-prepared balance sheet of Solair dated as of August 31, 1998 (the
"Current Balance Sheet" and, together with the Annual Financial Statements, the
"Financial Statements"), copies of which are attached to Schedule 4.9 hereto.
The Annual Financial Statements fairly present the financial position of Solair
at the balance sheet date and the results of operations for the periods covered
thereby, and except as disclosed in Schedule 4.9 have been prepared in
accordance with GAAP consistently applied throughout the periods indicated. The
Current Balance Sheet has been prepared in accordance with Modified GAAP. Except
as set forth in Schedule 4.9, there are no extraordinary items of income or
expense during the periods covered by the Annual Financial Statements and the
balance sheets included in the Financial Statements do not reflect any writeup
or revaluation increasing the book value of any assets. The references to
"Future Tax Benefits" on the Financial Statements refer to the future Federal
and State Tax benefits accrued by Solair (assuming, for purposes of such
accrual, the highest Federal and State marginal tax rates).
4.10 CHANGES SINCE THE CURRENT BALANCE SHEET DATE. Except as set
forth in Schedule 4.10, since the date of the Current Balance Sheet, Solair has
not (i) issued any capital stock or other securities; (ii) made any distribution
of or with respect to its capital stock or other securities, or purchased or
redeemed any of its securities; (iii) paid any bonus to or increased the rate of
compensation of any of its officers or, other than in the ordinary course of
business consistent with past practice, its salaried employees, or amended any
other terms of employment of officers, or other than in the ordinary course of
business consistent with the past practice, its salaried employees; (iv) sold,
leased or transferred any of its properties or assets other than in the ordinary
course of business
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consistent with past practice; (v) made or obligated itself to make capital
expenditures out of the ordinary course of business consistent with past
practice; (vi) made any payment in respect of its liabilities other than in the
ordinary course of business consistent with past practice; (vii) incurred any
obligations or liabilities (including any Indebtedness) or entered into any
transaction or series of transactions involving in excess of $50,000 in the
aggregate out of the ordinary course of business, except for this Agreement and
the transactions contemplated or permitted hereby; (viii) suffered any theft,
damage, destruction, casualty loss or extraordinary loss, whether or not covered
by insurance, in excess of $50,000 in the aggregate (provided, however, Solair
shall not for purposes of Section 7.1 of this Agreement be deemed in material
breach of this representation and warranty unless such amount shall exceed One
Million Dollars ($1,000,000); (ix) waived, canceled, compromised or released any
rights having a value in excess of $50,000 in the aggregate; (x) made or adopted
any change in its accounting practice or policies; (xi) made any adjustment to
its books or records other than in respect of the conduct of its business
activities in the ordinary course consistent with past practice; (xii) to the
knowledge of Solair or the Shareholder, entered into any transaction with (a)
any Affiliate, or (b) any officer or director of Solair or the Shareholder or
(c) any Familial Affiliate of any officer or director of Solair or the
Shareholder, other than intercompany transactions between Solair and the
Shareholder in the ordinary course of business consistent with past practice;
(xiii) entered into any employment agreement; (xiv) terminated, amended or
modified any Designated Contract; (xv) imposed any security interest or other
Lien on any of its assets other than in the ordinary course of business
consistent with past practice; (xvi) delayed paying any accounts payable which
are due and payable except to the extent being contested in good faith, other
than in the ordinary course of business consistent with past practice; (xvii)
made or pledged any charitable contribution in excess of $10,000; (xviii)
entered into any other transaction or been subject to any event other than in
the ordinary course of business consistent with past practice; or (xix) agreed
to do or authorized any of the foregoing.
4.11 LIABILITIES OF SOLAIR AND BANNER AEROSPACE (U.K.) LIMITED.
Except as set forth in Schedule 4.11, neither Solair nor Banner Aerospace (U.K.)
Limited has any liabilities or obligations, whether accrued, absolute,
contingent or otherwise, except (a) to the extent reflected on the Current
Balance Sheet and not heretofore paid or discharged, (b) liabilities incurred in
the ordinary course of business consistent with past practice since the date of
the Current Balance Sheet (none of which relates to breach of contract, breach
of warranty, tort, infringement or violation of law, or which arose out of any
action, suit, claim, governmental investigation or arbitration proceeding), and
(c) liabilities set forth on Schedule 4.11 which were incurred in the ordinary
course of business prior to the date of the Current Balance Sheet and which, in
accordance with GAAP consistently applied, were not required to be recorded
thereon. Schedule 4.11 is a true and complete list of Indebtedness of Solair,
including the name of the lender, pay-off amount, per diem interest and any
prepayment penalties or premiums. As of the Closing Date, Solair shall have no
Indebtedness.
4.12 LITIGATION. Except as disclosed on Schedule 4.12 hereto, there
is no action, suit, or other legal or administrative proceeding or governmental
investigation pending, or, to the knowledge of Solair or the Shareholder,
threatened, anticipated or contemplated (i) by or against Solair, or any of its
properties or assets, (ii) affecting Solair, or any of its properties or assets,
other than any such
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action, suit, proceeding, or investigation generally affecting participants in
the industry in which Solair operates, or (iii) which relates to or questions
the validity or enforceability of this Agreement or the transactions
contemplated hereby. There are no outstanding orders, decrees or stipulations
issued by any Governmental Authority in any proceeding to which Solair is or was
a party which have not been complied with in full or which continue to impose
any obligations on Solair.
4.13 ENVIRONMENTAL MATTERS.
(a) Solair (as defined in clause (g) below) is and has at
all times been in full compliance with all Environmental Laws (as defined in
clause (g) below) governing its business, operations, properties and assets,
including, without limitation: (i) all requirements relating to the Discharge
(as defined in clause (g) below) and Handling (as defined in clause (g) below)
of Hazardous Substances (as defined in clause (g) below); (ii) all requirements
relating to notice, record keeping and reporting; (iii) all requirements
relating to obtaining and maintaining Licenses (as defined in clause (g) below)
for the ownership and/or use of its properties and assets and the operation of
its business as presently conducted, including Licenses relating to Hazardous
Substances; and (iv) all applicable writs, orders, judgements, injunctions,
governmental communications, decrees, informational requests or demands issued
pursuant to, or arising under, any Environmental Laws.
(b) There are no (and, to the knowledge of each of Solair
and the Shareholder, there is no basis for any) non-compliance orders, warning
letters, notices of violation (collectively "Notices"), claims, suits, actions,
judgments, penalties, fines, or administrative or judicial investigations or
proceedings (collectively "Proceedings") pending or threatened against or
involving Solair or its respective businesses, operations, properties, or
assets, issued by any Governmental Authority or third party with respect to any
Environmental Laws or Licenses issued to Solair thereunder in connection with,
related to or arising out of the ownership by Solair or its properties or assets
or the operation of their respective businesses, which have not been resolved to
the satisfaction of the issuing Governmental Authority or third party in a
manner that would not impose any obligation, burden or continuing liability on
Xxxxxxxxx or Solair in the event that the transactions contemplated by this
Agreement are consummated, or which could have a Material Adverse Effect on
Xxxxxxxxx or Solair including, without limitation: (i) Notices or Proceedings
related to Solair being a potentially responsible party for a federal or state
environmental cleanup site or for corrective action under any applicable
Environmental Laws; (ii) Notices or Proceedings relating to Solair being
responsible to undertake any response or remedial actions or clean-up actions
under any applicable Environmental Law; or (iii) Notices or Proceedings related
to Solair being liable under any Environmental Laws for personal injury,
property damage, natural resource damage, or assessment or clean up obligations.
(c) Except as identified in any audit assessment or study
listed in Schedule 4.13, Solair has not Handled or Discharged, nor has it
allowed or arranged for any third party to Handle or Discharge, Hazardous
Substances to, at or upon: (i) any location other than a site lawfully permitted
to receive such Hazardous Substances; (ii) any real property currently or
previously owned or leased by Solair; or (iii) any site which, pursuant to any
Environmental Laws, (iv) has been
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placed on the National Priorities List or its state equivalent, or (v) the
Environmental Protection Agency or the relevant state agency or other
Governmental Authority has notified Solair that such Governmental Authority has
proposed or is proposing to place on the National Priorities List or its state
equivalent. There has not occurred, nor is there presently occurring, a
Discharge, or threatened Discharge, of any Hazardous Substance on, into or
beneath the surface of, or adjacent to, any real property currently or
previously owned or leased by Solair in an amount requiring a notice or report
to be made to a Governmental Authority or in violation of any applicable
Environmental Laws.
(d) The audits, assessment or studies listed in Schedule
4.13 identify the operations and activities, and locations thereof, which have
been conducted or are being conducted by Solair on any real property currently
or previously owned or leased by Solair which have involved the Handling or
Discharge of Hazardous Substances.
(e) Solair has not and does not use any Aboveground
Storage Tanks (as defined in clause (g) below) or Underground Storage Tanks (as
defined in clause (g) below), and there are not now nor have there ever been any
Underground Storage Tanks beneath any real property currently owned or leased by
Solair, or during Solair's ownership or lease, at any real property previously
owned or leased by Solair.
(f) Schedule 4.13 identifies (i) all environmental
audits, assessments or occupational health studies undertaken by Solair or the
Shareholder or any of their agents or, to the knowledge of Solair or
Shareholder, undertaken by any Governmental Authority or any third party,
relating to or affecting Solair or any real property currently or previously
owned or leased by Solair or Shareholder; (ii) the results of any ground, water,
surface water, soil, sediment, air or asbestos monitoring undertaken by Solair
or any of its agents or, to the best of Solair's and Shareholder's knowledge,
undertaken by any Governmental Authority or any third party, relating to or
affecting Solair or any real property currently or previously owned or leased by
Solair which indicate the presence of Hazardous Substances at levels requiring a
notice or report to be made to a Governmental Authority or in violation of any
applicable Environmental Laws; (iii) all material written communications between
Solair and any Governmental Authority arising under or related to Environmental
Laws; and (iv) all outstanding citations issued under OSHA, or similar state or
local statutes, laws, ordinances, codes, rules, regulations, orders, ruling, or
decrees, relating to or affecting Solair or any real property currently owned or
leased by Solair or during Solair's ownership or lease, any real property
previously owned or leased by Solair.
(g) Solair has caused that certain 55-gallon drum
previously located at Solair's Fort Lauderdale property, as described in the
Phase I Environmental Site Assessment dated May 1, 1995 and disclosed on
Schedule 4.13, to have been properly removed and disposed of prior to the date
hereof in accordance with applicable Environmental Laws.
(h) For purposes of this Section 4.13, the following
terms shall have the meanings ascribed to them below:
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"Aboveground Storage Tank" shall have the meaning ascribed to
such term in Section 6901 et seq., as amended, of RCRA, or any
applicable state or local statute, law, ordinance, code, rule,
regulation, order ruling, or decree governing Aboveground Storage
Tanks.
"Discharge" means any manner of spilling, leaking, dumping,
discharging, releasing or emitting, as any of such terms may further be
defined in any Environmental Law, into any medium including, without
limitation, ground water, surface water, soil or air.
"Environmental Laws" means all federal, state, regional or
local statutes, laws, rules, regulations, codes, orders, injunctions,
decrees, rulings and ordinances, and changes thereof, or similar laws
of foreign jurisdictions where Solair conducts business, whether
currently in existence or hereafter enacted or promulgated, any of
which govern or relate to pollution, protection of the environment,
public health and safety, air emissions, water discharges, hazardous or
toxic substances, solid or hazardous waste or occupational health and
safety, as any of these terms are or may be defined in such statutes,
laws, rules, regulations, codes, orders, injunctions, decrees, rulings
and ordinances, or changes thereof, including, without limitation: the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendment and Reauthorization Act of
1986, 42 U.S.C. ss.9601, et seq. (collectively "CERCLA"); the Solid
Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976 and subsequent Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C. ss.6901 et seq. (collectively "RCRA");
the Hazardous Materials Transportation Act, as amended, 49 U.S.C.
ss.1801, et seq.; the Clean Water Act, as amended, 33 U.S.C. ss.1311,
et seq.; the Clean Air Act, as amended (42 U.S.C. ss.7401- 7642); the
Toxic Substances Control Act, as amended, 15 U.S.C. ss.2601 et seq.;
the Federal Insecticide, Fungicide, and Rodenticide Act as amended, 7
U.S.C. ss.136-136y ("FIFRA"); the Emergency Planning and Community
Right-to-Know Act of 1986 as amended, 42 U.S.C. ss.11001, et seq.
(Title III of XXXX) ("EPCRA"); and the Occupational Safety and Health
Act of 1970, as amended, 29 U.S.C. ss.651, et seq. ("OSHA").
"Handle" means any manner of generating, accumulating,
storing, treating, disposing of, transporting, transferring, labeling,
handling, manufacturing or using, as any of such terms may be defined
in any Environmental Law, of any Hazardous Substances or Waste.
"Hazardous Substances" shall be construed broadly to include
any toxic or hazardous substance, material, or waste, and any other
contaminant, pollutant or constituent thereof, whether liquid, solid,
semi-solid, sludge and/or gaseous, including without limitation
chemicals, compounds, by-products, pesticides, asbestos containing
materials, petroleum or petroleum products, and polychlorinated
biphenyls, the presence of which requires investigation or remediation
under any Environmental Laws or which are or become regulated, listed
or controlled by, under or pursuant to any Environmental Laws.
"Licenses" means all licenses, certificates, permits,
approvals and registrations.
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"Solair" means Solair and its subsidiaries.
"Underground Storage Tank" shall have the meaning ascribed to
such term in Section 6901 et seq., as amended, of RCRA, or any
applicable state or local statute, law, ordinance, code, rule,
regulation, order ruling, or decree governing Underground Storage
Tanks.
4.14 REAL ESTATE.
(a) Solair does not own any real property or any interest
therein.
(b) Schedule 4.14 sets forth a list of all leases,
licenses or similar agreements of or relating to real property (collectively,
"Leases") to which Solair is a party (copies of which have previously been
furnished to Xxxxxxxxx), in each case setting forth (A) the lessor and lessee
thereof and the date and term of each of the Leases, and (B) the street address
of each property covered thereby (the "Leased Premises"). The Leases are in full
force and effect and have not been amended. Solair is not in default or breach
under any such Lease and, to the knowledge of Solair and the Shareholder, no
other party thereto is in default or breach under any such Lease. No event has
occurred which, with the passage of time or the giving of notice or both, would
cause a breach by Solair of or default by Solair under any of such Leases or, to
the knowledge of Solair or the Shareholder, would cause a breach by any other
party or a default by any other party under any of such Leases. To the knowledge
of Solair and the Shareholder, there is no anticipated breach by any other party
to any Lease. Except as set forth in Schedule 4.14, with respect to each of the
Leased Premises:
(i) Solair has valid leasehold interests in the
Leased Premises, free and clear of any Liens, created by Solair or of
which Solair or the Shareholder has knowledge; and
(ii) The portions of the buildings located on the
Leased Premises that are used in the business of Solair are in the
aggregate sufficient to satisfy the current normal business activities
of Solair as conducted thereat.
(c) Neither Solair nor the Shareholder has received
notice of (A) any condemnation proceeding with respect to any portion of any of
the Leased Premises or any access thereto, and, to the knowledge of Solair and
the Shareholder, no such proceeding is contemplated by any Governmental
Authority; or (B) any special assessment which may affect any of the Leased
Premises.
(d) As of the date hereof, Solair does not have any
office or place of business other than as identified on Schedule 4.14 and
Solair's principal place of business and chief executive offices are indicated
on Schedule 4.14, and, except for equipment leased to customers in the ordinary
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course of business, all locations where the equipment, inventory, chattel paper
and books and records of Solair are located as of the date hereof are fully
identified on Schedule 4.14.
4.15 GOOD TITLE TO AND CONDITION OF ASSETS.
(a) Schedule 4.15(a) contains a list of all Costed
Inventory as of August 31, 1998 ("August Costed Inventory"), and the respective
count and unit cost of each item, in each case, as reflected on the books and
records of Solair. Except as set forth on Schedule 4.15, Solair has good and
marketable title to all of its Inventory and other Assets (as hereinafter
defined), free and clear of any Liens other than Permitted Liens. For purposes
of this Agreement, the term "Assets" means all of the properties and assets of
Solair (other than the Leased Premises) whether personal or mixed, tangible or
intangible, wherever located. Except as set forth in Schedule 4.15, Solair does
not own any aircraft (other than aircraft which have been parted out) or
aircraft engines.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, AT CLOSING,
XXXXXXXXX SHALL BE DEEMED TO ACKNOWLEDGE THAT NEITHER SOLAIR NOR THE SHAREHOLDER
HAVE MADE NOR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY, FITNESS FOR PARTICULAR USE OR
PURPOSE, DESIGN CONDITION OR TRACEABILITY OF, OR AS TO THE QUALITY OF THE
MATERIAL OR WORKMANSHIP IN, THE INVENTORY (WHICH ARE BEING ACQUIRED ON AN "AS
IS" "WHERE IS" BASIS), AND SOLAIR AND THE SHAREHOLDER DISCLAIM AND XXXXXXXXX
HEREBY WAIVES ALL SUCH WARRANTIES, ARISING BY LAW OR OTHERWISE, AS TO THE
PHYSICAL CONDITION OF THE INVENTORY, INCLUDING BUT NOT LIMITED TO, ANY AND ALL
DEFECTS, WHETHER OBVIOUS, LATENT OR UNDISCOVERABLE.
(b) Schedule 4.15(b) lists the vehicles owned, leased or
used by Solair, setting forth the make, model, vehicle identification number,
and year of manufacture, and for each vehicle, whether it is owned or leased,
and if owned, the name of any lienholder and the amount of the lien, and if
leased, the name of the lessor.
4.16 COMPLIANCE WITH LAWS.
(a) Solair is and has been in compliance with all laws,
regulations and orders applicable to it, its properties and assets (excluding
Inventory), in each case whether owned or used by it now or in the past, and its
business and operations as conducted by it now and in the past. Solair has not
been cited, fined or otherwise notified of any asserted past or present failure
to comply with any laws, regulations or orders and no proceeding with respect to
any such violation is pending or, to the knowledge of Solair or the Shareholder,
threatened.
(b) Neither Solair nor any of its employees or agents has
made any payment of funds in connection with the business of Solair which is
prohibited by law, and no funds have been set aside to be used in connection
with the business of Solair for any payment prohibited by law.
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(c) Solair is and at all times has been in compliance
with the terms and provisions of the Immigration Reform and Control Act of 1986,
as amended (the "Immigration Act"). With respect to each Employee (as defined in
8 C.F.R. 274a.1(f)) of Solair for whom the compliance with the Immigration Act
is required, Solair has on file a true, accurate and complete copy of (i) each
Employee's Form I-9 (Employment Eligibility Verification Form) and (ii) all
other records, documents or other papers prepared, procured and/or retained
pursuant to the Immigration Act. Solair has not been cited, fined, served with a
Notice of Intent to Fine or with a Cease and Desist Order, nor has any action or
administrative proceeding been initiated or threatened against Solair, by the
Immigration and Naturalization Service by reason of any actual or alleged
failure to comply with the Immigration Act.
(d) Except as set forth in Schedule 4.16, Solair is not
subject to any contract, decree or injunction which restricts the continued
operation of Solair or the expansion thereof to other geographical areas,
customers and suppliers or lines of business.
4.17 LABOR AND EMPLOYMENT MATTERS. Schedule 4.17 sets forth the
name, address, social security number and current rate of compensation of each
of the employees of Solair. Solair is not a party to or bound by any collective
bargaining agreement or any other agreement with a labor union, and there has
been no effort by any labor union during the twenty-four (24) months prior to
the date hereof to organize any employees of Solair into one or more collective
bargaining units. There is no pending or, to the knowledge of Solair or the
Shareholder, threatened labor dispute, strike or work stoppage which affects or
which may affect the business of Solair or which may interfere with its
continued operations. Neither Solair nor any agent, representative or employee
of Solair has within the last twenty-four (24) months committed any unfair labor
practice as defined in the National Labor Relations Act, as amended, and there
is no pending or, to the knowledge of Solair or the Shareholder, threatened
charge or complaint against Solair by or with the National Labor Relations Board
or any representative thereof. There has been no strike, walkout or work
stoppage or threat of union activity involving any of the employees of Solair
during the twenty-four (24) months prior to the date hereof. The Shareholder has
no knowledge that any executive or employee has any plans to terminate his or
her employment with Solair as a result of the Acquisition. Solair has complied
with applicable laws, rules and regulations relating to employment, civil rights
and equal employment opportunities, including but not limited to, the Civil
Rights Act of 1964, the Fair Labor Standards Act, the Americans with
Disabilities Act, as amended, and the Immigration Reform and Control Act of
1986, as amended.
4.18 EMPLOYEE BENEFIT PLANS.
(a) Employee Benefit Plans. Schedule 4.18 contains a list
setting forth each employee benefit plan or arrangement of Solair, including but
not limited to employee pension benefit plans, as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
multiemployer plans, as defined in Section 3(37) of ERISA, employee welfare
benefit plans, as defined in Section 3(1) of ERISA, deferred compensation plans,
stock option plans, bonus plans, stock purchase plans, hospitalization,
disability and other insurance plans,
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severance or termination pay plans and policies, whether or not described in
Section 3(3) of ERISA, in which employees, their spouses or dependents
participate ("Employee Benefit Plans") (true and accurate copies of which,
together with the most recent annual reports on Form 5500 and summary plan
descriptions with respect thereto, were furnished to Xxxxxxxxx).
(b) Multi Employer Plans and Multiple Employer Plans. Solair,
the Shareholder, and any entity that would be aggregated with Solair or the
Shareholder under the Internal Revenue Code of 1986, as amended (the "Code"),
Section 414(b), (c), (m) or (o), do not currently participate in and have not,
during the ten (10) year period ending on the Closing Date, participated in and
are not and have not been required to or otherwise participate in any "multi
employer plan," as defined in Sections 3(37)(A) and 4001(a)(3) of ERISA and
Section 414(f) of the Code or any "multiple employer plan" within the meaning of
Section 210(a) of ERISA or Section 413(c) of the Code.
(c) Defined Benefit Plans, Funding Standards and Title IV of
ERISA. No Employee Benefit Plan is or at any time during the ten (10) year
period ending on the Closing Date was a "defined benefit plan" as defined in
Section 3(35) of ERISA or a pension plan subject to the funding standards of
Section 302 of ERISA or Section 412 of the Code. Solair, the Shareholder, and
any entity that would be aggregated with Solair or the Shareholder under Code
Section 414(b), (c), (m) or (o) do not participate currently and have not at any
time during the ten (10) year period ending on the Closing Date participated in
and are not required currently and have not at any time during the ten (10) year
period ending on the Closing Date been required to contribute to or otherwise
participate in any plan, program or arrangement subject to Title IV of ERISA.
(d) Compliance with Law. With respect to each Employee Benefit
Plan, (i) each has been administered in all material respects in compliance with
its terms and with all applicable laws, including, but not limited to, ERISA and
the Code; (ii) other than routine claims for benefits, no actions, suits, claims
or disputes are pending, or, to the knowledge of Solair or the Shareholder,
threatened; (iii) no audits, inquiries, reviews, proceedings, claims, or demands
are pending with any governmental or regulatory agency; (iv) there are no facts
which could give rise to any liability in the event of any such investigation,
claim, action, suit, audit, review, or other proceeding; (v) all material
reports, returns, and similar documents required to be filed with any
governmental agency or distributed to any plan participant have been duly or
timely filed or distributed; and (vi) no "prohibited transaction" has occurred
within the meaning of the applicable provisions of ERISA or the Code.
(e) Qualified Plans. With respect to each Employee Benefit
Plan intended to qualify under Code Section 401(a) or 403(a), (i) the Internal
Revenue Service has issued a favorable determination letter, true and correct
copies of which have been furnished to Xxxxxxxxx, that such plans are qualified
and exempt from federal income taxes; (ii) no such determination letter has been
revoked nor has revocation been threatened, nor has any amendment or other
action or omission occurred with respect to any such plan since the date of its
most recent determination letter or application therefor which would adversely
affect its qualification or materially increase its costs; (iii) all
contributions to, and payments from and with respect to such plans, which may
have been required to be made in accordance with such plans have been timely
made; and (iv) all such
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contributions to the plans, and all payments under the plans (except those to be
made from a trust qualified under Section 401(a) of the Code) and all payments
with respect to the plans for any period ending before the Closing Date that are
not yet, but will be, required to be made are properly accrued and reflected on
the Current Balance Sheet.
(f) Welfare Plans. (i) Solair is not obligated under any
employee welfare benefit plan as described in Section 3(1) of ERISA ("Welfare
Plan") to provide medical or death benefits with respect to any employee or
former employee of Solair or its predecessors after termination of employment,
except as may otherwise be required by law; (ii) Solair has complied with the
notice and continuation coverage requirements of Section 4980B of the Code and
the regulations thereunder with respect to each Welfare Plan that is, or was
during any taxable year for which the statute of limitations on the assessment
of federal income taxes remains, open, by consent or otherwise, a group health
plan within the meaning of Section 5000(b)(1) of the Code; and (iii) there are
no reserves, assets, surplus or prepaid premiums under any Welfare Plan which is
an Employee Benefit Plan. Except a set forth in Schedule 4.18 the consummation
of the transactions contemplated by this Agreement will not entitle any
individual to severance pay, and will not accelerate the time of payment or
vesting, or increase the amount of compensation, due to any individual, other
than payments or vesting under a qualified plan.
(g) Controlled Group Liability. Neither Solair nor any entity
that would be aggregated with it under Code Section 414(b), (c), (m) or (o),
(i), during the ten (10) year period ending on the Closing Date, has ever
terminated or withdrawn from any employee benefit plan under circumstances
resulting (or expected to result) in liability to the Pension Benefit Guaranty
Corporation ("PBGC"), the fund by which the employee benefit plan is funded, or
any employee or beneficiary for whose benefit the plan is or was maintained
(other than routine claims for benefits); (ii) has any assets subject to (or
expected to be subject to) a lien for unpaid contributions to any employee
benefit plan; (iii) has failed to pay premiums to the PBGC when due; (iv) is
subject to (or, to the knowledge of Solair or the Shareholder, will be subject
to) an excise tax under Code Section 4971; (v) has engaged in any transaction
which would give rise to liability under Section 4069 or Section 4212(c) of
ERISA; or (vi) has violated Code Section 4980B or Section 601 through 608 of
ERISA.
(h) Other Liabilities. (i) Except as set forth on Schedule
6.20, none of the Employee Benefit Plans obligates Solair to pay separation,
severance, termination or similar benefits solely as a result of any transaction
contemplated by this Agreement or solely as a result of a "change of control"
(as such term is defined in Section 280G of the Code); (ii) all required or
discretionary (in accordance with historical practices) payments, premiums,
contributions, reimbursements, or accruals for all periods ending prior to or as
of the Closing Date shall have been made or properly accrued on the Current
Balance Sheet or will be properly accrued on the books and records of Solair as
of the Closing Date; and (iii) none of the Employee Benefit Plans has any
unfunded liabilities which are not reflected on the Current Balance Sheet or the
books and records of Solair.
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4.19 TAX MATTERS.
The representations and warranties set forth in this Section
4.19 are subject to exceptions listed in Schedule 4.19 and which reference the
lettered paragraphs below to which the exceptions relate.
(a) Solair has, or to the knowledge of the Shareholder, the
Shareholder and its Subsidiaries (including Solair) have, filed or will cause to
be filed, within the time and within the manner prescribed by law, all federal,
state and local and foreign Tax Returns which are required to be filed by or
with respect to Solair and such Tax Returns reflect accurately in all material
respects the Tax liabilities of Solair.
(b) Solair has, or to the knowledge of the Shareholder, the
Shareholder and its Subsidiaries (including Solair) have, within the time
prescribed by law paid all federal, state and local and foreign Taxes that are
due and payable as shown on the Tax Returns.
(c) Solair has, and to the knowledge of the Shareholder,
Solair has, no liens with respect to Taxes upon any of its properties or assets
other than liens for Taxes not yet due and payable.
(d) Solair does not have in effect, and to the knowledge of
the Shareholder, Solair does not have in effect, as of the date of this
Agreement, any waiver or extension of any statute of limitations with respect to
Taxes.
(e) Solair does not have, or to the knowledge of the
Shareholder, Solair does not have, a federal, state, local or foreign audit or
other administrative proceeding or court proceeding presently pending or, to the
knowledge of Solair and the Shareholder, threatened with regard to any Tax
Returns for Solair.
(f) Neither the Shareholder nor Solair is a party to any
agreement, whether formal or informal or established by custom or practice,
providing for the allocation or sharing of Taxes.
(g) Solair has not been a member of an affiliated or
consolidated group (or similar state or local filing group) other than any group
in which the Shareholder is the common parent.
(h) Solair is an includible corporation (within the meaning of
Section 1504 of the Code) on a federal consolidated Income Tax Return that
includes the Shareholder. Any reference in this Agreement to a Tax Return of
Solair includes a reference to a consolidated, combined or unitary or other
similar Tax Return filed by or with the Shareholder and which includes in whole
or in part the results of Solair. All consolidated, combined or unitary Tax
Returns including Solair also included the Shareholder.
(i) Except for Banner Aerospace (U.K.) Limited, a corporation
organized under the laws of the United Kingdom, Solair does not own any
corporate subsidiaries.
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(j) A consolidated federal Income Tax Return for a Pre-Closing
Period including Solair as a member will be filed for the tax year of its common
parent ending on or after the Closing Date.
(k) Solair does not own any interests in a limited liability
company, partnership, business trust or similar entity.
(l) All Taxes of Solair (and any of its Subsidiaries) for
Pre-Closing Periods and Straddle Periods attributable to the period thereof on
or before the Closing Date have been fully and timely paid and adequate reserves
or accruals for Taxes (other than Income Taxes) as of the Closing Date, will be
provided in the Adjusted Closing Date Balance Sheet and Shareholder will pay, or
cause to be paid, all Income Taxes of Solair not yet due and payable for
pre-Closing periods and Straddle Periods.
(m) After August 31, 1998, and on or before the Closing Date,
the liability of Solair for Taxes shall be incurred in the ordinary course of
business consistent with past practices.
(n) Solair has not been subject to, and to the knowledge of
the Shareholder, Solair has not been subject to, a claim made by a Governmental
Authority in a jurisdiction where Solair does not file Tax Returns that Solair
is or may be subject to Taxes assessed by such jurisdiction.
(o) Solair has not been subject to, and to the knowledge of
the Shareholder, Solair has not been subject to, a deficiency or proposed
adjustment for any amount of Taxes asserted or assessed by any Governmental
Authority against Solair which has not been settled or otherwise resolved or not
reflected in the Adjusted Closing Date Balance Sheet.
(p) Solair does not file, nor is it required to file, a
consolidated, combined or unitary or other similar state Tax Return including
the Shareholder or any other person or entity and which includes, or will
include, in whole or in part the results of Solair for any period on or before
the Closing Date.
(q) All transactions between Solair and its related parties
(as defined in Section 482 of the Code) have been, and will be on or before the
Closing Date, conducted on an arm's-length basis (within the meaning of Section
482 the Code).
(r) Solair has not made, and will not make, an election or
file a consent under Section 341(f) of the Code (or any corresponding provision
of state, local or foreign law).
(s) Solair will not be required (i) as a result of a change in
method of accounting for a taxable period beginning on or before the Closing
Date, to include any adjustments under Section 481(a) of the Code (or any
corresponding provision of state, local or foreign law) in taxable income for
any period after the Closing Date, or (ii) as a result of any audit or
examination by any Governmental Authority for a taxable period beginning on or
before the Closing Date, whether set
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forth in a closing agreement under Section 7121 of the Code or other settlement
agreement, to include any item of income or exclude any item of deduction for
any period after the Closing Date.
(t) Solair has not made any payments, nor will it become
obligated (under any contract entered into on or before the Closing Date) to
make any payments, that will be non-deductible under Sections 162(m) or 280G of
the Code (or any corresponding provisions of state, local or foreign law).
(u) Solair has not been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code (or any
corresponding provisions of state, local or foreign law) during the applicable
period specified in Section 897(c)(1)(A)(ii) of the Code (or any corresponding
provision of state, local or foreign law).
(v) True, correct and complete copies of (A) all income and
sales Tax Returns filed by or with respect to Solair for the years ended March
31, 1996 and 1997, and (B) any audit report issued within the last five years,
have been furnished or made available to Xxxxxxxxx, and all material tax
elections of Solair are clearly set forth on such Tax Returns.
(w) Solair is not a party to a gain recognition agreement
under Section 367 of the Code and the regulations thereunder.
4.20 INSURANCE. Schedule 4.20 contains (i) a complete and correct
list of all insurance policies covering Solair and its properties, assets and
business (the "Insurance Policies") (copies of which have been provided to
Xxxxxxxxx) designating the insurance company, type of insurance, insured's name
and policy number and (ii) a detailed description of each pending claim under
any of the Insurance Policies for an amount in excess of $10,000 that relates to
loss or damage to the properties, assets or business of Solair. Such Insurance
Policies are in full force and effect, and all premiums due thereon have been
paid. As of the Closing Date, each of the Insurance Policies will be in force
and effect. Solair has complied with the provisions of such Insurance Policies.
Solair has not failed to give, in a timely manner, any notice required under any
of the Insurance Policies necessary to preserve its rights thereunder, and
neither Solair nor the Shareholder have any knowledge of any uninsured claims or
losses.
4.21 LICENSES AND PERMITS. Solair possesses all governmental or
official licenses, approvals, permits and authorizations necessary for the
operation of its business as presently conducted (collectively, the "Permits"),
and Schedule 4.21 contains a true and complete list of all such Permits. All
such Permits are valid and in full force and effect, and Solair is in compliance
with the respective requirements thereof, and no proceeding is pending or, to
the knowledge of Solair or the Shareholder, threatened to revoke or amend any of
them. None of the Permits is or will be impaired or in any way affected by the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
4.22 ADEQUACY OF THE ASSETS; RELATIONSHIPS WITH CUSTOMERS AND
SUPPLIERS; AFFILIATED TRANSACTIONS. Subject to Section 4.15 hereof, the
Inventory and other Assets and the Leased
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Premises constitute, in the aggregate, all of the assets and properties
necessary for the conduct of the business of Solair in the manner in which and
to the extent to which such business is currently being conducted. To the
knowledge of Solair and the Shareholder, no current supplier to Solair of items
essential to the conduct of its business has threatened to terminate such
current supplier's business relationship with Solair for any reason. Except as
set forth in Schedule 4.22, Solair does not have any direct or indirect interest
in any customer, supplier or competitor of Solair, or in any person from whom or
to whom Solair leases real or personal property. To the knowledge of Solair and
the Shareholder, except as set forth on Schedule 4.22, no Affiliate of Solair or
the Shareholder and no officer or director of Solair or the Shareholder or any
Familial Affiliate of any officer or director of Solair or the Shareholder is a
party to any Contract (other than a Contract for which there is no continuing
obligation of or benefit to Solair) or transaction with Solair or has any
interest in any property used by Solair.
4.23 INTELLECTUAL PROPERTY. Solair has full legal right, title and
interest in and to all trademarks, service marks, trade names, copyrights,
know-how, patents, trade secrets, owned proprietary computer software, data
bases and compilations, licenses (including licenses for the use of computer
software programs), and other intellectual property used by it in the conduct of
its business (the "Intellectual Property"). Neither the business of Solair as
presently conducted, nor the unrestricted use and exploitation of the
Intellectual Property by Solair, infringes or misappropriates any rights held or
asserted by any Person, and no Person is infringing on the Intellectual
Property. No payments are required for the continued use of the Intellectual
Property by Solair (except software license fees payable in the ordinary course
of business consistent with past practice). None of the Intellectual Property
owned by Solair has ever been declared invalid or unenforceable, or is the
subject of any pending or, to the knowledge of Solair or the Shareholder,
threatened action for opposition, cancellation, declaration, infringement, or
invalidity, unenforceability or misappropriation or like claim, action or
proceeding.
4.24 CONTRACTS. Schedule 4.24 sets forth a list of each Contract to
which Solair is a party or by which it or its properties and assets are bound
that provide for aggregate payments of more than One Hundred Fifty Thousand
Dollars ($150,000) or have a duration of more than six months) (the "Designated
Contracts"). In the case of those Designated Contracts which are denoted with
footnote 1 on Schedule 4.24, Solair has provided Xxxxxxxxx with copies which
have not been fully executed by all of the parties thereto; provided, however,
that Solair and the Shareholder represent and warrant to Xxxxxxxxx that each
such copy conforms to the copy that has been fully executed by the parties
thereto. In the case of those Designated Contracts which are denoted with
footnote 2 on Schedule 4.24, Solair shall provide Xxxxxxxxx with copies of such
Designated Contracts (or if not available, a summary of the terms thereof)
within thirty (30) days following the date hereof, and Solair and the
Shareholder represent and warrant that no such Designated Contract is likely to
have a material adverse effect on Solair and no consent is required thereunder
in connection with the transactions contemplated by this Agreement. In the case
of those Designated Contracts which are denoted with footnote 3 on Schedule
4.24, each such Designated Contract has expired in accordance with its terms,
but the parties thereto nevertheless continue to operate under the terms of such
Designated Contract as if such agreement remained in effect. True and correct
copies of each written Designated Contract (other than those denoted with
footnote 2 on Schedule 4.24) have been provided
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to Xxxxxxxxx and true and correct summaries of each oral Designated Contract are
set forth on Schedule 4.24. The copy of each written Designated Contract and the
summary of each oral Designated Contract furnished to Xxxxxxxxx is a true and
complete copy or summary, as the case may be, of the document it purports to
represent and reflects all amendments thereto. Schedule 4.6 identifies
Designated Contracts that require the consents of third parties to the
transactions contemplated hereby. Except as set forth in Schedule 4.24, Solair
has complied with all of the covenants to be performed by it under, and is not
in violation of, the Designated Contracts, and to the knowledge of Solair and
the Shareholder, each of the other parties to the Designated Contracts has
complied with all of the covenants to be performed by it under, and is not in
violation of, any Designated Contracts. Except as set forth in Schedule 4.24, no
party to any Designated Contract has made a claim for breach of, or
indemnification under, or has delivered a notice of termination or default
under, any Designated Contract. Except as set forth in Schedule 4.24, no event
has occurred which constitutes, or after notice or the passage of time, or both,
would constitute, a default by Solair under any Designated Contract, and, to the
knowledge of Solair and the Shareholder, no such event has occurred which
constitutes or would constitute a default by any other party. Except as and to
the extent expressly set forth in any Designated Contract, Solair is not subject
to any liability or payment resulting from renegotiation of amounts paid to it
or required to be paid to it under any Designated Contract. As used in this
Section, Contracts shall include, without limitation, formal or informal,
written or oral, (a) loan agreements, indentures, mortgages, pledges,
hypothecations, deeds of trust, conditional sale or title retention agreements,
security agreements, equipment financing obligations or guaranties, or other
sources of contingent liability in respect of any indebtedness or obligations to
any other Person, or letters of intent or commitment letters with respect to the
same; (b) contracts obligating Solair to provide products or services, excluding
standard maintenance contracts entered into in the ordinary course of business
without material modification from the preprinted forms used by Solair in the
ordinary course of business; (c) leases of real property, (d) leases of personal
property (including, without limitation, leases of Inventory or assets of the
type included in Inventory); (e) distribution, sales agency or franchise or
similar agreements, or agreements providing for an independent contractor's
services, or letters of intent with respect to the same; (f) employment
agreements, management service agreements, consulting agreements,
confidentiality agreements, non-competition agreements, any other agreements
relating to Solair or any employee, officer or director of Solair, and all
employee handbooks, policy statements and similar plans; (g) licenses,
assignments or transfers of trademarks, trade names, service marks, patents,
copyrights, trade secrets or know how, or other agreements regarding proprietary
rights or intellectual property; (h) any Contract relating to pending capital
expenditures by Solair; (i) contracts obligating Solair to purchase any products
or services, including without limitation, vehicles, parts, accessories,
supplies, equipment, oil, advertising, media and media related services of any
kind; and (j) all other Contracts or understandings which are material to Solair
or its business, assets or properties, irrespective of subject matter and
whether or not in writing, and not otherwise disclosed on the Schedules.
4.25 ACCURACY OF INFORMATION FURNISHED BY SOLAIR OR THE
SHAREHOLDER. No written representation, warranty or statement made by Solair or
the Shareholder in this Agreement or the Tax Agreement (including the various
Exhibits and Schedules attached hereto and thereto) or any certificate delivered
pursuant hereto, contains or shall contain any untrue statement of a material
fact
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or omits or shall omit any material fact necessary to make the information
contained therein not misleading. Solair and the Shareholder have provided
Xxxxxxxxx with true, accurate and complete copies of all documents requested by
Xxxxxxxxx which are listed or described in the various Schedules attached
hereto.
4.26 BANK ACCOUNTS. Schedule 4.26 sets forth all accounts of Solair
with any bank, broker or other depository institution, and the names of all
persons authorized to withdraw funds from each such account.
4.27 NO COMMISSIONS. Neither Solair nor the Shareholder has
incurred any obligation for any finder's or broker's or agent's fees or
commissions or similar compensation in connection with the transactions
contemplated hereby.
4.28 INVESTMENT INTENT; ACCREDITED INVESTOR STATUS; SECURITIES
DOCUMENTS. The Shareholder is or will be acquiring the Warrant and the Xxxxxxxxx
Common Stock issuable upon exercise thereof for its own account for investment
and not with a view to, or for the sale in connection with, any distribution of
any of the Warrant and the Xxxxxxxxx Common Stock, except in compliance with
applicable state and federal securities laws. The Shareholder has had the
opportunity to discuss the transactions contemplated hereby with Xxxxxxxxx and
has had the opportunity to obtain such information pertaining to Xxxxxxxxx as
has been requested, including but not limited to filings made by Xxxxxxxxx with
the SEC under the Exchange Act, including the most recent filing by Xxxxxxxxx on
Form 10-K, and any filings on Schedule 14A and Forms 10-Q or 8-K since the end
of Xxxxxxxxx'x last fiscal year end, which filings are also available on the
Internet at xxx.xxx.xxx. The Shareholder is an "accredited investor" within the
meaning of Regulation D promulgated under the Securities Act, and has such
knowledge and experience in business or financial matters that it is capable of
evaluating the merits and risks of an investment in the Warrant and the
Xxxxxxxxx Common Stock.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE ACQUISITION
5.1 CONDUCT OF BUSINESS BY SOLAIR PENDING THE ACQUISITION. Solair
covenants and agrees that, between the date of this Agreement and the Closing
Date, the business of Solair shall be conducted only in, and Solair shall not
take any action except in, the ordinary course of business, consistent with past
practice. Solair shall use commercially reasonable efforts to preserve intact
its business organization, to keep available the services of its current
officers, employees and consultants, to preserve its present relationships with
customers, suppliers and other persons with which it has significant business
relations. By way of amplification and not limitation, Solair shall not, between
the date of this Agreement and the Closing Date, directly or indirectly, do or
propose or agree to do any of the following without the prior written consent of
Xxxxxxxxx:
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(a) amend or otherwise change its Articles of Incorporation or
Bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, encumber or lease, or
authorize the issuance, sale, pledge, disposition or lease of, or grant of an
encumbrance on, (i) any shares of its capital stock of any class, or any
options, warrants, convertible securities or other rights of any kind to acquire
any shares of such capital stock, or any other ownership interest, of it, or
(ii) any of its assets, tangible or intangible, except in the ordinary course of
business consistent with past practice and in transactions not exceeding Five
Hundred Thousand Dollars ($500,000) in the aggregate.
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
(e) except as expressly permitted pursuant to Section 6.21
hereof with respect to the sale of all of the Designated Costed Inventory, or as
expressly permitted pursuant to Section 6.23 hereof with respect to the
Permitted Sempati Transaction, or as set forth on Schedule 5.1, (i) acquire
(including, without limitation, for cash or shares of stock, by merger,
consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership or other business organization or division thereof, or
make any investment either by purchase of stock or securities, contributions of
capital or property transfer, or, except in the ordinary course of business,
consistent with past practice and in transactions not exceeding Five Hundred
Thousand Dollars ($500,000) in the aggregate, purchase any property or assets of
any other Person, (ii) incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse or otherwise as an accommodation
become responsible for, the obligations of any Person, or make any loans or
advances, other than loans to employees not exceeding Three Thousand Dollars
($3,000) individually or Fifteen Thousand Dollars ($15,000) in the aggregate,
(iii) to the extent not prohibited by any other provision of this Section 5.1,
enter into any Contract other than in the ordinary course of business,
consistent with past practice and providing for payments not exceeding One
Hundred Thousand Dollars ($100,000) in the aggregate over the term of such
Contract (except for Contracts relating to the purchase of inventory, which
Contracts are subject to the limitations set forth in subsection (iv) below),
(iv) make capital expenditures exceeding One Hundred Thousand Dollars
($100,000), or purchases of inventories exceeding Five Hundred Thousand Dollars
($500,000), in each case, in the aggregate, (v) enter into any transaction with
an Affiliate or Familial Affiliate of Solair other than a transaction (a) in the
ordinary course of business consistent with past practice, (b) on terms no less
favorable to Solair than the terms on which Solair would undertake a similar
transaction with an unaffiliated third party, (c) providing for payments of less
than Twenty Five Thousand Dollars ($25,000), and (d) providing for payments
which, when aggregated with the payments payable on account of all other
transactions with Affiliates or Familial Affiliates of Solair, in an aggregate
amount less than Two Hundred Thousand Dollars ($200,000) or (vi) write-up the
value of any Inventory on its books and records.
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(f) except as set forth on Schedule 5.1, increase the
compensation payable or to become payable to its officers or, other than in the
ordinary course of business consistent with past practice, its other employees,
or, except as presently bound to do, grant any severance or termination pay to,
or enter into any employment or severance agreement with, any of its directors,
officers or other employees, or establish, adopt, enter into or amend or take
any action to accelerate any rights or benefits which any collective bargaining,
bonus, profit sharing, trust, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement for the benefit of
any directors, officers or employees;
(g) take any action other than in the ordinary course of
business and in a manner consistent with past practice with respect to
accounting policies or procedures;
(h) pay, discharge or satisfy any existing claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business and consistent with past practice of due and payable
liabilities reflected or reserved against in its financial statements, as
appropriate, or liabilities incurred after the date hereof in the ordinary
course of business and consistent with past practice;
(i) increase or decrease prices charged to its customers,
except for previously announced price changes or price changes made in the
ordinary course of business, consistent with past practice, or take any other
action which might reasonably be expected to result in any material increase in
the loss of customers through non-renewal or termination of contracts or other
causes; or
(j) agree, in writing or otherwise, to take or authorize any
of the foregoing actions or any action which would make any representation or
warranty in Article IV untrue or incorrect.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 FURTHER ASSURANCES. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby.
6.2 COOPERATION. Each of the parties agrees to cooperate with the
other in the preparation and filing of all forms, notifications, reports and
information, if any, required or deemed advisable pursuant to any law, rule or
regulation in connection with the transactions contemplated by this Agreement,
and to use their respective commercially reasonable efforts to agree jointly on
a method to overcome any objections by any Governmental Authority to any such
transactions.
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6.3 HSR ACT AND OTHER ACTIONS. Each of the parties hereto shall
(i) make promptly (and in no event later than five (5) business days following
the execution of this Agreement) its respective filings, if any, and thereafter
make any other required submissions, under the HSR Act, with respect to the
transactions contemplated hereby, and shall seek early termination of the
applicable waiting period under the HSR Act, (ii) take all appropriate actions,
and do, or cause to be done, all things necessary, proper or advisable under any
applicable laws, regulations and Contracts to consummate and make effective the
transactions contemplated herein, including, without limitation, obtaining all
licenses, permits, consents, approvals, authorizations, qualifications and
orders of any Governmental Authority and parties to Contracts with Solair as are
necessary for the consummation of the transactions contemplated hereby, (iii)
make on a prompt and timely basis all governmental or regulatory notifications
and filings required to be made by it to consummate and make effective the
transactions contemplated hereby, and (iv) defend all lawsuits or other legal
proceedings challenging this Agreement or the consummation of the transactions
contemplated hereby and take all actions necessary or advisable to lift or
rescind any injunction or restraining order or other order adversely affecting
the ability of the parties to consummate the transactions contemplated hereby.
6.4 MUTUAL COOPERATION. Subject to the Confidentiality Agreement,
from the date hereof to the Closing Date, Solair shall (and shall cause its
directors, officers, employees, auditors, counsel and agents to) afford
Xxxxxxxxx and Xxxxxxxxx'x officers, employees, auditors, counsel and agents
reasonable access on reasonable notice during normal business hours to its
properties, offices and other facilities, to its officers and employees and to
all books and records, and shall furnish such persons with all financial,
operating and other data and information as may be reasonably requested. Neither
the due diligence investigation made by Xxxxxxxxx in connection with the
Acquisition nor the information provided to or obtained by Xxxxxxxxx shall
affect any representation or warranty contained in this Agreement.
6.5 NOTIFICATION OF CERTAIN MATTERS. Solair and the Shareholder
shall give prompt notice to Xxxxxxxxx of the occurrence or non-occurrence of any
event of which either Solair or the Shareholder has knowledge which would likely
cause any representation or warranty contained herein made by either of them to
be untrue or inaccurate, or any covenant, condition, or agreement contained
herein applicable to it not to be complied with or satisfied. Xxxxxxxxx shall
give prompt notice to Solair and the Shareholder of the occurrence or
non-occurrence of any event of which Xxxxxxxxx has knowledge which would likely
cause any representation or warranty contained herein made by Xxxxxxxxx to be
untrue or inaccurate, or any covenant, condition, or agreement contained herein
applicable to it not to be complied with or satisfied.
6.6 RESTRICTIVE COVENANTS. In order to assure that Xxxxxxxxx will
realize the benefits of the Acquisition, the Shareholder agrees with Xxxxxxxxx
as follows:
(a) During the period commencing on the Closing Date and
ending 42 months thereafter, (the "Restriction Period"), neither the Shareholder
nor any Person in which the Shareholder has a Controlling Interest
(collectively, the "Restricted Parties") shall, directly or
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indirectly, employ or solicit for employment any person who was, at any time
within the immediately preceding six (6) months, employed by Solair. The parties
agree that nothing herein is intended to prohibit the Shareholder from
advertising generally for any job position (provided that the Shareholder does
not hire any person responding thereto that was employed by Solair at any time
within the immediately preceding six (6) month period).
(b) During the Restriction Period, no Restricted Party shall,
directly or indirectly, engage in the business of purchasing, selling and
supporting aircraft parts, as conducted by Solair on the Closing Date (the
"Competitive Business"), provided that the foregoing restriction shall not apply
to any of the following:
(i) Any Restricted Party that was engaged in the
Competitive Business prior to the date of this Agreement (a list of
such Restricted Parties is set forth in Schedule 6.6 hereof) may
continue to engage in the Competitive Business, and may reasonably
develop and expand such Competitive Business.
(ii) Any Restricted Party may acquire and hold, in
the aggregate, up to 10% of the issued and outstanding capital stock or
other equity interest in any Person that engages in the Competitive
Business.
(iii) Any Restricted Party may acquire any Person or
business that engages in the Competitive Business, provided that (1)
such Competitive Business does not constitute the principal business of
the acquired Person or business (based on the sales of the acquired
Person or business during the preceding four (4) full calendar
quarters), and (2) if the Competitive Business constitutes more than
fifteen percent (15%) of the revenues of the acquired Person or
business, the Restricted Party uses reasonable efforts to divest that
portion of the acquired Person or business that engages in the
Competitive Business within twelve (12) months after the acquisition
thereof.
(c) At any time following the Closing Date no Restricted Party
shall, directly or indirectly, in any way utilize, disclose, copy, reproduce or
retain in its possession any of the proprietary rights or records of Solair or
any subsidiary of Solair, including, but not limited to, any of their respective
customer lists.
The Shareholder agrees and acknowledges that the restrictions contained
in this Section are reasonable in scope and duration and are necessary to
protect Xxxxxxxxx and its Affiliates after the Closing Date. If any provision of
this Section 6.6 as applied to any party or to any circumstance is adjudged by a
court to be invalid or unenforceable, the same will in no way affect any other
circumstance or the validity or enforceability of this Agreement. If any such
provision, or any part thereof, is held to be unenforceable because of the
duration of such provision 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 reduced form, such provision shall then be enforceable and shall be
enforced. The parties agree and
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acknowledge that the breach of this Section 6.6 will cause irreparable damage to
Xxxxxxxxx and its Affiliates and upon breach of any provision of this Section
6.6, Xxxxxxxxx and its Affiliates shall be entitled to injunctive relief,
specific performance or other equitable relief; provided, however, that, this
shall in no way limit any other remedies which Xxxxxxxxx and its Affiliates may
have (including, without limitation, the right to seek monetary damages).
Xxxxxxxxx and the Shareholder hereby agree that Xxxxxxxxx may assign, without
limitation, the foregoing restrictive covenants to any successor to or
Affiliates of Xxxxxxxxx.
6.7 CONFIDENTIALITY; PUBLICITY. The parties hereby ratify and
affirm their obligations under the Confidentiality Agreement. Except as may be
required by law or as otherwise permitted or expressly contemplated herein, no
party hereto or their respective Affiliates, employees, agents and
representatives shall disclose to any third party this Agreement or the subject
matter or terms hereof without the prior consent of the other parties hereto. No
press release or other public announcement related to this Agreement or the
transactions contemplated hereby shall be issued by any party hereto without the
prior approval of the other parties, except that Xxxxxxxxx and the Shareholder
may each make such public disclosure which it believes in good faith to be
required by law or by the terms of any listing agreement with or requirements of
a securities exchange upon which its securities may be listed or traded;
provided, however, that each of them shall make commercially reasonable efforts
to coordinate with the other in making such public disclosure.
6.8 NO OTHER DISCUSSIONS. From the date hereof until the earlier
of the Closing Date or the date that this Agreement shall terminate in
accordance with its terms, none of Solair, the Shareholder or any of their
respective employees, agents and representatives shall (a) solicit, encourage,
consider or accept any offer from any Person to acquire all or any portion of
the assets of or any interest in Solair, (b) participate in any negotiations or
discussions with any other Person concerning the sale of all or any portion of
the assets of or any interest in Solair, (c) provide any non-public information
about Solair (other than to Xxxxxxxxx and its agents and consultants as provided
herein), (d) enter into any agreement or commitment (whether or not binding)
with respect to any of the foregoing, or (e) otherwise cooperate in any way
with, or assist, facilitate or encourage any effort by any other person seeking
to acquire all or any portion of the assets of or any interest in Solair. Solair
and the Shareholder shall immediately notify Xxxxxxxxx in writing of any such
inquiry or proposal which any of Solair, the Shareholder or any of their
respective employees, agents or representatives may receive with respect to the
foregoing transactions, and unless any such person shall be bound by a duty of
confidentiality with respect to such offer or inquiry, setting forth the terms
and identity of the inquiror or offeror.
6.9 TRADING IN COMMON STOCK OF XXXXXXXXX OR THE SHAREHOLDER.
Except as otherwise expressly consented to by Xxxxxxxxx in writing, from the
date of this Agreement until the Closing Date, neither Solair nor the
Shareholder will directly or indirectly purchase or sell (including short sales)
any shares of common stock of Xxxxxxxxx or securities derivative therefrom in
any transactions effected on the Nasdaq Stock Market or otherwise. Except as
otherwise expressly consented to by the Shareholder in writing, from the date of
this Agreement until the Closing Date, Xxxxxxxxx will not directly or indirectly
purchase or sell (including short sales) any shares of common stock of the
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Shareholder or securities derivative therefrom in any transactions effected on
the New York Stock Exchange or otherwise.
6.10 SHAREHOLDER VOTE. The Shareholder, in executing this
Agreement, consents as the sole shareholder of Solair to the Acquisition and the
transactions contemplated hereby, and waives notice of any meeting in connection
therewith, and hereby releases and waives all rights with respect to the
Acquisition and the transactions contemplated hereby under the Articles of
Incorporation and/or Bylaws of Solair, applicable state law, and any agreements
relating to the sale, purchase or voting of any capital stock of the Solair. At
Closing, the Shareholder and Solair agree that any and all agreements relating
to the sale, purchase or voting of capital stock of Solair, shall be, and hereby
are, terminated.
6.11 DELIVERY OF SHARES. At the Closing, the Shareholder shall
deliver to Xxxxxxxxx certificates evidencing all the Shares duly endorsed for
transfer to Xxxxxxxxx.
6.12 RESIGNATIONS. At Closing, the Shareholder shall deliver to
Xxxxxxxxx the resignations of all of the directors of Solair and Banner
Aerospace (U.K.) Limited, and those officers of Solair and Banner Aerospace
(U.K.) Limited set forth on Schedule 6.12 from such positions, effective on the
Closing Date.
6.13 ESCROW AGREEMENT AND TAX AGREEMENT. Prior to or at the
Closing, (a) Xxxxxxxxx, the Shareholder and the Escrow Agent shall enter into
the Escrow Agreement, and (b) the Shareholder and Xxxxxxxxx shall enter into the
Tax Agreement.
6.14 RECEIVABLES. Solair shall, following the Closing Date, use
commercially reasonable efforts, consistent with past practice, to collect any
Receivables which arose on or prior to the Closing Date. Any payments received
by Solair from a customer following the Closing Date shall be applied to the
unpaid invoices issued to such customer in the order in which such invoices were
issued, provided, however, that, if Solair shall have received written notice
from a customer disputing all or any portion of an unpaid invoice (a copy of
which notice shall be provided to the Shareholder), then any payment thereafter
received from such customer shall not be applied to the disputed portion of such
invoice, but shall be applied to the balance of such invoice, and then to the
next invoice issued to such customer (in each case, until the dispute with such
customer shall be resolved). At any time upon the written request of the
Shareholder, and upon payment therefor as provided below, Solair shall sell to
the Shareholder any Receivables which arose on or prior to the Closing Date and
which remain unpaid, whether in cash or by setoff against another obligation
owed by Solair to the obligor of such Receivable, or otherwise unsatisfied, as
of the three (3) month anniversary of the Closing Date. At any time upon the
written request of Xxxxxxxxx, the Shareholder shall purchase from Solair all
Receivables which arose on or prior to the Closing Date and which remain unpaid,
whether in cash or by setoff against another obligation owed by Solair to the
obligor of such Receivable, or otherwise unsatisfied, as of the one (1) year
anniversary of the Closing Date. The purchase price of any Receivables purchased
by the Shareholder hereunder shall be equal to the face amount thereof, and upon
any such purchase, the Shareholder may retain the proceeds of such Receivables
as and when collected (and to the extent thereafter collected by or paid to
Xxxxxxxxx,
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Xxxxxxxxx shall promptly remit the same to the Shareholder). If Xxxxxxxxx elects
to have Solair sell Receivables to the Shareholder, Xxxxxxxxx shall deliver to
the Shareholder, no later than thirty (30) days following the one (1) year
anniversary of the Closing Date, a certificate signed by its Chief Financial
Officer setting forth the aggregate of such Receivables which remain unpaid or
unsatisfied as of such date, together with all related and supporting
documentation, and the Shareholder shall purchase such Receivables from Solair
within thirty (30) days following receipt thereof. If the Shareholder shall fail
to pay such amount within such thirty (30) day period, the Xxxxxxxxx shall have
the right (but not the obligation), in addition to any other remedies which it
may have, to deem such amount to be Xxxxxxxxx Indemnifiable Damages in
accordance with Article IX (provided that the Xxxxxxxxx Indemnification
Threshold shall not be applicable to such amount and such amount shall not count
against the Xxxxxxxxx Indemnification Cap). The Shareholder shall, on or prior
to the one (1) year anniversary of the Closing Date, use only commercially
reasonable methods, consistent with the past practice of Solair, to collect any
Receivables purchased by it under this Section. Xxxxxxxxx shall, for the one (1)
year period following the Closing Date, provide the Shareholder with a report,
and any other supporting documentation reasonably requested by the Shareholder,
on a monthly basis, setting forth the then current status of the Receivables
which arose on or prior the Closing Date.
6.15 ASSUMPTION OF LITIGATION. The Shareholder shall assume the
defense of and any and all liabilities arising out of or related to any action,
suit or other legal or administrative proceeding pending against Solair or any
of it properties or assets and of which Solair or the Shareholder have knowledge
as of the Closing Date (including without limitation, any matters disclosed in
Schedule 6.15) (collectively, the "Assumed Litigation"). For purposes of this
Section, Solair and the Shareholder shall be deemed to have knowledge of any
action, suit or proceeding, service of process of which shall have been made
upon Solair or the Shareholder (or their respective registered agents) prior to
the Closing. Notwithstanding the foregoing (i) the Shareholder shall have no
right to consent to the entry of a judgment or enter into any settlement or
compromise in connection with any Assumed Litigation to the extent the consent,
settlement or compromise provides for any injunctive or other equitable relief
against Solair, or otherwise provides for any continuing obligations of any
nature against Solair or loss of rights of Solair (other than the rights of
Solair to any benefits that may accrue or arise from Assumed Litigation), unless
Xxxxxxxxx consents thereto in writing, and (ii) Xxxxxxxxx shall have the right
to select separate counsel to participate in the defense of any Assumed
Litigation on its behalf, at its sole cost and expense. Solair shall cooperate
with the Shareholder in connection with the defense of the Assumed Litigation as
may reasonably be requested by the Shareholder (and the Shareholder shall
reimburse Xxxxxxxxx, Xxxxxx and their respective officers, directors and
employees for any out-of-pocket costs and expenses incurred by them in providing
such cooperation), provided that such cooperation shall not disrupt the conduct
of Xxxxxxxxx'x or Solair's day-to-day business and operations. The Shareholder
shall be entitled to any benefits that may accrue or arise from the Assumed
Litigation. Solair shall, if requested by the Shareholder, sign a limited
release agreement confirming its release, subject to the terms and conditions of
this Agreement, of any rights in or to the claims made in the Assumed
Litigation.
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6.16 ASSUMPTION OF GUARANTEES. Xxxxxxxxx shall either (i) at
Closing assume the guarantees previously made by the Shareholder on behalf of
Solair and identified on Schedule 6.16 to the extent that any guaranteed parties
thereunder consent to the substitution of Xxxxxxxxx thereunder or (ii) indemnify
and hold harmless the Shareholder on account of any guarantees previously made
by the Shareholder on behalf of Solair and identified on Schedule 6.16 with
respect to obligations of Solair arising after the Closing, to the extent that
any guaranteed parties thereunder do not consent to the substitution of
Xxxxxxxxx thereunder. If Xxxxxxxxx shall fail to pay any amount due under
subsection (ii) of the foregoing sentence and the Shareholder shall pay such
amount, then the Shareholder shall have the right (but not the obligation), in
addition to any other remedies which it may have, to deem such amount to be
Shareholder Indemnifiable Damages in accordance with Article IX (provided that
the Shareholder Indemnification Threshold shall not be applicable to such amount
and such amount shall not count against the Shareholder Indemnification Cap).
6.17 CONTRIBUTION OF ASSETS OF BANNER SINGAPORE. Prior to the
Closing, the Shareholder shall contribute to Solair (or, at Xxxxxxxxx'x option,
to a special purpose subsidiary of Solair) all of the assets and liabilities
relating to the business of Solair (a true and accurate list of which is set
forth on Schedule 6.17) of Banner Aerospace-Singapore, Inc., free and clear of
any Liens or other restrictions.
6.18 CHANGE OF NAME. Promptly after the Closing Date, Xxxxxxxxx
shall take all actions necessary to change the name of Banner Aerospace (U.K.)
Limited to remove any reference to the Shareholder and the "Banner" name.
6.19 EMPLOYMENT CONTRACTS. Xxxxxxxxx acknowledges and agrees that,
from and after the Closing Date, Solair and Xxxxxxxxx shall be solely liable for
all obligations arising after the Closing Date, and shall be responsible for the
payment of any severance payments that may be required to be paid, in each case,
under the express terms of the Employment Contracts set forth in Schedule 6.19
(the "Designated Employment Contracts") hereof or the recision or modification
of offers to enter into any of the Employment Contracts which recision or
modification is undertaken (a) prior to the Closing Date by Solair with the
express prior written consent of Xxxxxxxxx, or (b) following the Closing Date.
6.20 TAXES.
(a) Shareholder will prepare and file, or cause to be prepared
and filed, Income Tax Returns of Solair with respect to any Pre-Closing Period.
In order to assist the Shareholder in the preparation of all Income Tax Returns
that the Shareholder is required to prepare, Xxxxxxxxx will prepare (or cause
Solair to prepare in accordance with prior practices) and deliver to the
Shareholder, as soon as reasonably practical after their receipt of a request
therefore from the Shareholder, all data (including but not limited to the
annual tax reporting package) regarding Solair, reasonably requested by the
Shareholder, that is necessary to prepare any Income Tax Returns and properly
report the operations of Solair thereon.
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(b) Solair will prepare and file, or cause to be prepared and
filed, all Tax Returns (other than Income Tax Returns) due on or before the
Closing Date and all Tax Returns due after the Closing Date for Straddle
Periods.
(c) Xxxxxxxxx will prepare and file, or cause to be prepared
and filed, all Tax Returns of Solair with respect to any Post-Closing Period.
(d) In accordance with Treas. Reg. ss.1.1502-76(b), the income
of Solair through the Closing Date shall be included on a federal consolidated
Income Tax Return including Shareholder. Without the consent of Xxxxxxxxx, a
ratable allocation election described in Treas. Reg. ss.1.1502-76(b)(2)(ii)(B)
may not be made with respect to such Return. No party shall make an election
with respect to Taxes on any Tax Return to be prepared and filed by a party in
accordance with this Section 6.20, without the consent of the other party, if
the making of such election would, or could, have an adverse effect on the other
party.
(e) On the Closing Date, all Tax sharing agreements and
arrangements including (i) Solair on the one hand and (ii) the Shareholder, or
any of the Shareholder's subsidiaries (other than Solair), on the other hand,
including, without limitation (x) that certain Twelfth Amended and Restated Tax
Allocation Agreement dated June 10, 1998 among The Xxxxxxxxx Corporation, the
Shareholder, Solair and other subsidiaries of The Xxxxxxxxx Corporation, (y)
that certain Tax Allocation Agreement dated January 22, 1992, to which Solair is
a party, and (z) that certain Tax Indemnity Agreement dated July 11, 1990 to
which Solair is a party shall each be terminated or amended to remove Solair as
a party thereto and unconditionally and irrevocably release Solair from any
obligation whatsoever thereunder and shall have no further effect on Solair for
any taxable year or period (whether a past, present or future year or period),
and no additional payments shall be made thereunder by Solair on or after the
Closing Date in respect of a redetermination of Tax liabilities or otherwise.
(f) Shareholder and Xxxxxxxxx shall (i) each provide the other
with such assistance as may reasonably be requested by either of them in
connection with the preparation of any Tax Return, any audit or other
examination by any Governmental Authority or any judicial or administrative
proceeding with respect to Taxes, (ii) each retain and provide to the other any
records or other information which may be relevant to such return, audit
examination or proceeding, and (iii) each provide to the other any final
determination of any such audit or examination, proceeding or determination that
affects any amount required to be shown on any Tax return of the other for any
period (which shall be maintained confidentially). Without limiting the
generality of the foregoing, Xxxxxxxxx and the Shareholder shall retain, until
the applicable statutes of limitations (including all extensions) have expired,
copies of all Tax Returns, supporting work papers, and other books and records
or information of Solair which may be relevant to such returns for all Tax
periods or portions thereof ending before or including the Closing Date, and
shall not destroy or dispose of such records or information without first
providing the other party with a reasonable opportunity to review and copy the
same.
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(g) The Shareholder will pay, or cause to be paid, all Taxes
of Solair for Pre- Closing Periods, including all Income Taxes. Xxxxxxxxx will
pay, or will cause to be paid, all Taxes of Solair for Post-Closing Periods,
including Income Taxes. The Shareholder will pay, or cause to be paid, all Taxes
of Solair for any Straddle Period attributable to periods on or before the
Closing Date and which are not reflected as liabilities on the Adjusted Closing
Date Balance Sheet as of the Closing Date in calculating the Purchase Price.
Xxxxxxxxx will pay, or cause to be paid, all Taxes of Solair for any Straddle
Period attributable to periods after the Closing Date.
(h) The Shareholder and Xxxxxxxxx will pay, on an equal basis,
for all sales, use, transfer, stamps, conveyance, value added or similar
transfer Tax imposed on the Shareholder by any Governmental Authority with
respect to the transfer of the Shares. If either party pays one hundred percent
(100%) of such a transfer Tax, the other party shall reimburse the first party
fifty percent (50%) of such Tax.
(i) Shareholder and Xxxxxxxxx acknowledge that no election
under Code Section 338(h)(10) shall be made with respect to Solair.
(j) No later than 10 days prior to the due date for filing,
Xxxxxxxxx shall provide to Shareholder copies of Tax Returns to be filed by
Solair for a Straddle Period and shall provide Shareholder the opportunity to
comment on such Tax Returns.
(k) Xxxxxxxxx shall cause Banner Aerospace (U.K.) Limited not
to make any distribution of property during the period beginning on the Closing
Date and ending March 31, 1999 that would result in a diminution of the earnings
and profits of such entity for Federal income tax purposes.
(l) Xxxxxxxxx shall pay all Tax resulting from any election
filed under Code Section 338 regarding Solair.
(m) Solair or Shareholder shall between the date hereof and
the Closing Date pay all Federal, State, local and foreign Taxes of Solair when
and as the same are due and payable.
(n) Solair will not have in effect as of the Closing Date any
waiver or extension of any statute of limitations with respect to Taxes.
(o) Solair and the Shareholder shall, prior to the Closing,
deliver to Xxxxxxxxx true and complete copies of the consolidated Tax Return of
the Shareholder with respect to the period ending March 31, 1998 (the
"Shareholder Return").
(p) References to Tax and Tax Return in Section 4.19 and this
Section 6.20 include a Tax or Tax Return of Banner Aerospace (U.K.) Limited or
any other subsidiary of Solair.
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6.21 INVENTORY.
(a) Notwithstanding anything to the contrary set forth herein,
Solair shall, in the ordinary course of business prior to the Closing Date,
offer for sale and may, at any time prior to the Closing Date, sell all of the
Designated Inventory, provided, however, that (i) the aggregate amount received
by Solair on account of the sale of the Designated Inventory shall not be less
than Ten Million Dollars ($10,000,000) minus any amount actually received by
Solair on account of the sale of Designated Inventory in the ordinary course of
business following the date hereof and on or prior to the Closing Date, and (ii)
Solair shall on the Closing Date have possession of any and all consideration
received by it from or on behalf of the Buyer of the Designated Inventory.
Xxxxxxxxx agrees to advise the Shareholder of the terms of any sales of the
Designated Inventory that occur within sixty (60) days of the Closing Date.
(b) Notwithstanding any representation or warranty made in
Section 4.15 with respect to Designated Costed Inventory (or any breach
thereof), in the event that the Actual Designated Costed Inventory Value as of
the Closing Date is less than the Book Designated Costed Inventory Value as of
the Closing Date, then sixty percent (60%) of the amount by which such shortfall
exceeds Ten Million Dollars ($10,000,000) shall be deemed Xxxxxxxxx
Indemnifiable Damages for purposes of Section 9.1 of this Agreement.
Notwithstanding the foregoing, in the event that Solair shall sell Designated
Costed Inventory in violation of Article V of this Agreement, the full amount of
any shortfall arising from such violation of Article V shall be deemed Xxxxxxxxx
Indemnifiable Damages.
(c) Notwithstanding any representation or warranty made in
Section 4.15 with respect to Non-Designated Costed Inventory (or any breach
thereof), in the event that the Actual Non-Designated Costed Inventory Value as
of the Closing Date is less than the Book Non- Designated Costed Inventory Value
as of the Closing Date, then sixty percent (60%) of the amount by which such
shortfall exceeds One Million Nine Hundred Thirty Two Thousand Dollars
($1,932,000) shall be deemed Xxxxxxxxx Indemnifiable Damages for purposes of
Section 9.1 of this Agreement. Notwithstanding the foregoing, in the event that
Solair shall sell Non-Designated Costed Inventory in violation of Article V of
this Agreement, the full amount of any shortfall arising from such violation of
Article V shall be deemed Xxxxxxxxx Indemnifiable Damages.
(d) Solair shall, prior to the Closing Date, write-down the
amount at which the Designated Inventory is carried on the books and records of
Solair by Twenty One Million Five Hundred Thousand Dollars ($21,500,000).
6.22 RELEASE FROM CREDIT AGREEMENT. Prior to or at the Closing, Solair
and the Shareholder shall deliver a release (the "Release") in the form attached
hereto as Exhibit E executed by or on behalf of each of the lenders under that
certain Second Amended and Restated Credit Agreement dated December 12, 1996, as
amended, to which Banner, Solair and other Affiliates of Banner are a party (the
"Credit Agreement"), fully and unconditionally releasing Solair and Banner
Aerospace (U.K.) Limited from any and all obligations, and waiving any claims
such lenders may have against such parties, arising under or in connection with
the Credit Agreement or any document related thereto.
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6.23 SUBSTITUTION OF ESCROWED AMOUNT. Xxxxxxxxx shall, upon the
delivery to Xxxxxxxxx of the Xxxxxxxxx Guaranty, duly executed by The Xxxxxxxxx
Corporation, at any time prior to the eighteen (18) month anniversary of the
Closing Date, instruct the Escrow Agent to deliver to the Shareholder that
portion of the Escrowed Amount equal to Four Million Five Hundred Thousand
Dollars ($4,500,000) plus any interest which has accrued on the Escrowed Amount
minus any portion of the Escrowed Amount previously paid to any party hereto
under the terms of this Agreement and the Escrow Agreement.
6.24 THE SEMPATI TRANSACTION. Notwithstanding anything to the
contrary set forth herein, Solair may at any time prior to the Closing Date
consummate the Permitted Sempati Transaction.
6.25 SALE OF SEMPATI INVENTORY. Upon consummation of the Permitted
Sempati Transaction, Solair and the Shareholder shall agree on a procedure for
the sale of any Sempati Inventory during the period commencing on such date and
expiring on the thirty (30) month anniversary of such date (the "Sale Period").
The proceeds, if any, which are received by Solair on account of sales of the
Sempati Inventory during the Sale Period shall be split between Solair and the
Shareholder as follows: (1) in the case of the first One Million Dollars
($1,000,000) paid to and received by Solair on account of sales of any of the
Sempati Inventory, Solair shall (a) grant the Shareholder a credit on account of
any such proceeds received on or prior to the one (1) year anniversary of the
Closing Date against any amounts required to be paid by the Shareholder to
Xxxxxxxxx under Section 6.14 of this Agreement, and (b) pay to the Shareholder
any such proceeds received following the one (1) year anniversary of the Closing
Date, and (2) in the case of any proceeds paid to and received by Solair in
excess of the first One Million Dollars ($1,000,000) on account of sales of any
of the Sempati Inventory, Solair shall pay to the Shareholder fifty (50%) of
such proceeds. The Shareholder shall have the right, exercisable upon written
notice to Xxxxxxxxx within sixty (60) days after the end of the Sale Period, to
purchase any Sempati Inventory that remains unsold at the end of the Sale
Period, for a purchase price of One Dollar ($1.00). If the Shareholder exercises
such right, it shall arrange for such inventory and any related records which
may be available to be removed from Solair's premises within sixty (60) days
after the end of the Sale Period, at the Shareholder's sole cost and expense.
6.26 PAYMENT OF LEASE TERMINATION FEE. The Shareholder shall at
Closing pay to Xxxxxxxxx the sum of One Hundred Eighty Thousand Dollars
($180,000) (the "Lease Termination Fee").
6.27 REMOVAL OF STORAGE DRUM. Solair shall, prior to Closing, cause
that certain 55 gallon drum located at Solair's Ft. Lauderdale premises and
referenced in that certain letter dated November 20, 1998 from Environmental
Consulting & Technology, Inc. (a copy of which was provided to the Shareholder)
to be properly removed and disposed of in accordance with applicable
Environmental Laws, provided, however, that the failure of Solair to comply with
this Section may give rise to Xxxxxxxxx Indemnifiable Damages but shall not be a
basis for Xxxxxxxxx not to consummate the transactions contemplated under this
Agreement.
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ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF XXXXXXXXX
The obligations of Xxxxxxxxx to effect the Acquisition shall be subject
to the fulfillment at or prior to the Closing Date of the following conditions,
any or all of which may be waived in whole or in part in writing by Xxxxxxxxx:
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of Solair and the Shareholder
contained in this Agreement shall be true and correct at and as of the Closing
Date in all material respects with the same force and effect as though made at
and as of that time except (i) for changes specifically permitted by or
disclosed on any schedule to this Agreement, and (ii) that those representations
and warranties which address matters only as of a particular date shall remain
true and correct as of such date; provided, however, that if any such
representation or warranty is already qualified by materiality, for purposes of
determining whether this condition has been satisfied, such representation or
warranty as so qualified shall be true and correct in all respects. Solair and
the Shareholder shall have performed and complied in all material respects with
all of their respective obligations required by this Agreement to be performed
or complied with at or prior to the Closing Date. Solair and the Shareholder
shall have delivered to Xxxxxxxxx a certificate, dated as of the Closing Date,
duly signed by an executive officer of each, certifying that such
representations and warranties are true and correct in all material respects and
that all such obligations have been complied with and performed in all material
respects.
7.2 NO MATERIAL ADVERSE CHANGE OR DESTRUCTION OF PROPERTY. Between
the date hereof and the Closing Date, (i) there shall have been no Material
Adverse Change to Solair, and (ii) none of the properties or assets of Solair
shall have been damaged by fire, flood, casualty, act of God or the public enemy
or other cause (regardless of insurance coverage for such damage), which damages
may have a Material Adverse Effect thereon, and there shall have been delivered
to Xxxxxxxxx a certificate to that effect, dated the Closing Date and duly
signed by an executive officer of Solair and the Shareholder.
7.3 CORPORATE CERTIFICATE. The Shareholder shall have delivered to
Xxxxxxxxx (i) copies of the Articles of Incorporation and Bylaws of each of
Solair and the Shareholder as in effect immediately prior to the Closing Date,
(ii) copies of resolutions adopted by the Board of Directors of each of Solair
and the Shareholder authorizing the transactions contemplated by this Agreement,
and (iii) a certificate of good standing for each of Solair and the Shareholder
issued by the Secretary of State of the state of its incorporation as of a date
not more than ten (10) business days prior to the Closing Date, certified in the
case of subsections (i) and (ii) of this Section as of the Closing Date by the
Secretary of Solair and the Shareholder, as applicable, as being true, correct
and complete.
7.4 CONSENTS. Solair and the Shareholder shall each have received
consents to the transactions contemplated hereby and waivers of rights to
terminate or modify any rights or obligations of Solair or the Shareholder from
any Person from whom such consent or waiver is
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required, under any Designated Contract listed on Schedule 7.4 (the "Enumerated
Designated Contracts") or under the HSR Act which shall not have been revoked or
modified, as of the Closing Date, or who, as a result of the transactions
contemplated hereby, would have such rights to terminate or modify such
Enumerated Designated Contracts, either by the terms thereof or as a matter of
law.
7.5 NO ADVERSE LITIGATION. (i) No party hereto shall be subject to
any order or injunction by an Governmental Authority restraining or prohibiting
the consummation of the transactions contemplated hereby, (ii) no action or
proceeding shall have been instituted by any Governmental Authority or any other
Person to restrain or prohibit, or to obtain damages from Solair or Xxxxxxxxx in
respect of, the consummation of the transactions contemplated hereby, which
action or proceeding shall remain pending as of the Closing Date unless resolved
to the reasonable satisfaction of Xxxxxxxxx (in its sole discretion), (iii) none
of the parties hereto shall have received written notice from any Governmental
Authority of (x) its intention to institute any action or proceeding to
restrain, enjoin or nullify this Agreement or the transactions contemplated
hereby, or to commence any investigation (other than a routine letter of
inquiry, including a routine civil investigative demand) into the consummation
of the transactions contemplated hereby or (y) the actual commencement of such
investigation and (iv) no law shall have been promulgated or enacted by any
Governmental Authority, which would prevent or make illegal the consummation of
the transactions contemplated hereby.
7.6 HSR ACT WAITING PERIOD. Any applicable HSR Act waiting period
shall have expired or been terminated.
7.7 UCC FILINGS. A search of the UCC records and searches of the
FAA Registry, in each case as of a date prior to the Closing Date, with respect
to Solair and its property and assets shall not have disclosed any active
filings other than filings with respect to the Liens identified on Schedule 4.15
hereto. Xxxxxxxxx shall order searches of UCC records and of the FAA Registry no
later than two (2) business days following the date on which this Agreement is
signed by all parties and deliver copies of the results of such searches to the
Shareholder.
7.8 RESIGNATIONS. Solair and the Shareholder shall have delivered
the resignations referred to in Section 6.12 hereof.
7.9 DELIVERY OF SHARES AND RECORDS AND LEASE TERMINATION FEE. At
the Closing, the Shareholder shall have delivered to Xxxxxxxxx (i) the original
certificates evidencing the Shares, endorsed in blank and (ii) the original
corporate minute books and stock transfer ledgers of Solair and (iii) the Lease
Termination Fee.
7.10 DELIVERY OF ESCROW AGREEMENT AND TAX AGREEMENT. The
Shareholder and the Escrow Agent shall have executed and delivered to Xxxxxxxxx
the Escrow Agreement and the Shareholder shall have executed and delivered to
Xxxxxxxxx the Tax Agreement.
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7.11 MINORITY INTEREST IN BANNER AEROSPACE (U.K.) LIMITED. Xxxxxx
Xxxxxxxxx shall have conveyed to Xxxxxxxxx or its designee, free and clear of
any Liens, and for the sum of One Dollar ($1.00), the shares of Banner Aerospace
(U.K.) Limited which represent the interest held by him in such company,
endorsed in blank.
7.12 CONTRIBUTION OF ASSETS OF BANNER SINGAPORE. The Shareholder
shall have contributed the assets and liabilities relating to the business of
Solair of Banner Aerospace - Singapore, Inc. to Solair (or if Xxxxxxxxx shall
elect, to a special purpose subsidiary of Solair).
7.13 RELEASE. Solair and the Shareholder shall have delivered to
Xxxxxxxxx the Release, executed by or on behalf of all of the lenders under the
Credit Agreement.
7.14 TAX RETURN. Solair and the Shareholder shall have delivered
to Xxxxxxxxx the Shareholder Return.
7.15 EVIDENCE OF TERMINATION OR AMENDMENT OF TAX SHARING
AGREEMENTS. Solair and the Shareholder shall have provided Xxxxxxxxx with
evidence of termination or amendment of the various agreements required to be
terminated or amended pursuant to and in accordance with Section 6.20(e) hereof
as set forth therein.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF
THE SHAREHOLDER
The obligation of the Shareholder to effect the Acquisition shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions, any or all of which may be waived in whole or in part in writing by
the Shareholder:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of Xxxxxxxxx contained in this
Agreement shall be true and correct at and as of the Closing Date in all
material respects with the same force and effect as though made at and as of
that time except (i) for changes specifically permitted by or disclosed pursuant
to this Agreement, and (ii) that those representations and warranties which
address matters only as of a particular date shall remain true and correct as of
such date; provided, however, that if any such representation or warranty is
already qualified by materiality, for purposes of determining whether this
condition has been satisfied, such representation or warranty as so qualified
shall be true and correct in all respects. Xxxxxxxxx shall have performed and
complied in all material respects with all of its obligations required by this
Agreement to be performed or complied with by it at or prior to the Closing
Date. Xxxxxxxxx shall have delivered to the Shareholder a certificate, dated as
of the Closing Date, and signed by an executive officer, certifying that such
representations and warranties are true and correct in all material respects and
that all such obligations have been complied with and performed in all material
respects.
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8.2 PURCHASE PRICE. Xxxxxxxxx shall have made the Closing Date
Payment in respect of the Purchase Price, and shall have delivered to the
Shareholder the Warrant.
8.3 NO ORDER OR INJUNCTION. No court of competent jurisdiction or
other governmental body shall have issued or entered any order or injunction
restraining or prohibiting the transactions contemplated hereby, which remains
in effect at the time of Closing.
8.4 HSR ACT WAITING PERIOD. Any applicable HSR Act waiting period
shall have expired or been terminated.
8.5 DELIVERY OF ESCROW AGREEMENT AND TAX AGREEMENT . Xxxxxxxxx and
the Escrow Agent shall have executed and delivered to the Shareholder the Escrow
Agreement and Xxxxxxxxx shall have delivered the Escrowed Amount in accordance
therewith and Xxxxxxxxx shall have executed and delivered to the Shareholder the
Tax Agreement.
ARTICLE IX
INDEMNIFICATION
9.1 AGREEMENT BY THE SHAREHOLDER TO INDEMNIFY. The Shareholder
agrees to indemnify and hold Xxxxxxxxx and its officers, directors, employees,
attorneys and Affiliates (each a "Xxxxxxxxx Indemnified Party" and collectively
the "Xxxxxxxxx Indemnified Parties") harmless from and against the aggregate of
all expenses, losses, costs, deficiencies, liabilities and damages (including,
without limitation, reasonable counsel and paralegal fees and expenses) incurred
or suffered by any of the Xxxxxxxxx Indemnified Parties arising out of or
resulting from (i) any breach of a representation or warranty made by Solair or
the Shareholder in this Agreement or the Tax Agreement, (ii) any breach of a
covenant or agreement made by Solair or the Shareholder in or pursuant to this
Agreement or the Tax Agreement, (iii) any inaccuracy in any written statement
made by Solair or the Shareholder in any certificate delivered by Solair or the
Shareholder pursuant to this Agreement, (iv) any Tax liability of Solair or the
Shareholder arising from or relating to any Pre-Closing Tax Period or that
portion of the Straddle Period ending on the Closing Date, (v) any claims of any
third parties arising from or relating to any facts, circumstances or events
occurring on or prior to the Closing Date with respect to Solair or its
business, other than (a) those expressly described in this Agreement or the
Schedules hereto, (b) those set forth or reserved for on the Adjusted Closing
Date Balance Sheet, or (c) the Assumed Litigation (which is covered by
subsection (vi) below), (vi) the Assumed Litigation (collectively, "Xxxxxxxxx
Indemnifiable Damages"). Notwithstanding anything else to the contrary set forth
herein, the remedies for a breach of the representations and warranties set
forth in Section 4.15(a) in so far as they relate to Costed Inventory shall be
limited to the remedies set forth in Sections 6.21(b) and (c) of this Agreement.
Notwithstanding the foregoing provisions, no claim for Xxxxxxxxx Indemnifiable
Damages may be asserted by the Xxxxxxxxx Indemnified Parties until the aggregate
of all Xxxxxxxxx Indemnifiable Damages exceeds Two Million Dollars ($2,000,000)
(the "Xxxxxxxxx Indemnification Threshold"), at which time the Xxxxxxxxx
Indemnified Parties may assert
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claims for the amount by which the Xxxxxxxxx Indemnifiable Damages exceeds the
amount of the Xxxxxxxxx Indemnification Threshold; provided, however, that the
Xxxxxxxxx Indemnification Threshold shall not apply to Xxxxxxxxx Indemnifiable
Damages with respect to or arising from (i) a breach of any one or more of the
representations and warranties set forth in Section 4.13(g) or the covenant of
Solair set forth in Section 6.27, (ii) a breach of any one or more of the
representations and warranties set forth in Section 4.19 or the covenants of the
Shareholder or Solair set forth in Section 6.20 with respect to Income Taxes,
and (iii) a breach of any representation, warranty or covenant made by the
Shareholder in the Tax Agreement or arising under subsection (iv) of this
Section 9.1 with respect to Income Taxes. Notwithstanding anything to the
contrary set forth herein, the total amount payable hereunder by the Shareholder
on account of Xxxxxxxxx Indemnifiable Damages may not exceed Ten Million Dollars
($10,000,000), except that (a) the total amount payable hereunder by the
Shareholder may exceed Ten Million Dollars ($10,000,000) but may not exceed
Thirty Five Million Dollars ($35,000,000) on account of Xxxxxxxxx Indemnifiable
Damages with respect to or arising from a breach of any one or more of the
representations and warranties set forth in the first or last sentence of
Section 4.1, or in Section 4.2, Section 4.3, Section 4.4, Section 4.5, Section
4.13, the second sentence of Section 4.15(a), or in Section 4.18, (b) the total
amount payable hereunder by the Shareholder may exceed Thirty Five Million
Dollars ($35,000,000) but may not exceed the amount of the Purchase Price (such
applicable amount being referred to herein as the "Xxxxxxxxx Indemnification
Cap") on account of Xxxxxxxxx Indemnifiable Damages with respect to or arising
from (i) a breach of any one or more of the representations and warranties set
forth in Section 4.19 or the covenants of the Shareholder or Solair set forth in
Section 6.20 with respect to Income Taxes, and (ii) a breach of any
representation, warranty or covenant made by the Shareholder in the Tax
Agreement or arising under subsection (iv) of this Section 9.1, and (c) the
Xxxxxxxxx Indemnification Cap and Xxxxxxxxx Indemnification Threshold shall not
apply to and there shall be no limitation or restriction whatsoever on the
liability of the Shareholder under this Article IX for Xxxxxxxxx Indemnifiable
Damages arising under subsection (vi) of this Section 9.1, and no Xxxxxxxxx
Indemnifiable Damages arising therefrom shall be included in determining whether
the Xxxxxxxxx Indemnification Cap has been met. Except as specifically provided
in subsections (b) and (c) of the preceding sentence, in no event shall the
total amount payable hereunder by the Shareholder on account of Xxxxxxxxx
Indemnifiable Damages exceed Thirty Five Million Dollars ($35,000,000).
9.2 AGREEMENT BY XXXXXXXXX TO INDEMNIFY. Xxxxxxxxx agrees to
indemnify and hold the Shareholder and its officers, directors, employees,
attorneys and Affiliates (each a "Shareholder Indemnified Party" and together
the "Shareholder Indemnified Parties") harmless from and against the aggregate
of all expenses, losses, costs, deficiencies, liabilities and damages
(including, without limitation, reasonable counsel and paralegal fees and
expenses) incurred or suffered by any of the Shareholder Indemnified Parties
arising out of or resulting from (i) any breach of a representation or warranty
made by Xxxxxxxxx in this Agreement or the Tax Agreement, (ii) any breach of a
covenant or agreement made by Xxxxxxxxx in or pursuant to this Agreement or the
Tax Agreement, (iii) any inaccuracy in any statement made by Xxxxxxxxx in any
certificate, instrument or other document delivered by Xxxxxxxxx pursuant to or
in connection with this Agreement, (iv) any Tax liability of Solair or the
Shareholder arising from or relating to any Post-Closing Tax Period or that
portion of the Straddle Period beginning after the Closing Date, and (v) any
claims of any third
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parties arising from or relating to any facts, circumstances or events occurring
after the Closing Date with respect to Solair or its business (collectively,
"Shareholder Indemnifiable Damages"). Notwithstanding the foregoing provisions,
no claim for Shareholder Indemnifiable Damages shall be asserted by the
Shareholder Indemnified Parties until the aggregate of all Shareholder
Indemnifiable Damages exceeds Two Million Dollars ($2,000,000) (the "Shareholder
Indemnification Threshold"), at which time the Shareholder Indemnified Parties
may assert claims for the amount by which the Shareholder Indemnifiable Damages
exceeds the amount of the Shareholder Indemnification Threshold, provided,
however, that the Shareholder Indemnification Threshold shall not apply to
Shareholder Indemnifiable Damages relating to with respect to or arising from
(i) a breach of any one or more of the covenants of Xxxxxxxxx set forth in
Section 6.20 with respect to Income Taxes, (ii) a breach of any representation,
warranty or covenant made by Xxxxxxxxx in the Tax Agreement or arising under
subsection (iv) of this Section 9.2, or (iii) any claim brought under Section
6.19 hereof. Notwithstanding anything to the contrary set forth herein, the
total amount payable hereunder by Xxxxxxxxx on account of Shareholder
Indemnifiable Damages may not exceed Ten Million Dollars ($10,000,000), except
that (a) the total amount payable hereunder by Xxxxxxxxx may exceed Ten Million
Dollars ($10,000,000) but may not exceed Thirty Five Million Dollars
($35,000,000) on account of Shareholder Indemnifiable Damages with respect to or
arising from a breach of any one or more of the representations and warranties
set forth in Section 3.1, Section 3.2, Section 3.3 or Section 3.4, and (b) the
total amount payable hereunder by Xxxxxxxxx may exceed Thirty Five Million
Dollars ($35,000,000) but may not exceed the amount of the Purchase Price (such
applicable amount being referred to herein as the "Shareholder Indemnification
Cap") on account of Shareholder Indemnifiable Damages relating to Income Taxes
with respect to or arising under subsection (iv) of this Section 9.2. Except as
specifically provided in subsection (b) of the preceding sentence, in no event
shall the total amount payable hereunder by Xxxxxxxxx on account of Shareholder
Indemnifiable Damages exceed Thirty Five Million Dollars ($35,000,000).
9.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Shareholder or Xxxxxxxxx in this
Agreement or pursuant hereto shall survive the closing of the transactions
contemplated hereby for a period of eighteen (18) months following the Closing
Date; provided, however, that (i) the representations and warranties set forth
in Section 3.1, Section 3.2, Section 3.3, the first and last sentence of Section
4.1, or in Section 4.2, Section 4.3, Section 4.4, Section 4.5, and the second
sentence of Section 4.15(a) shall survive indefinitely, (ii) the representations
and warranties set forth in Section 4.19 shall expire thirty (30) days following
the time the latest applicable statute of limitations expires for the
enforcement by an applicable Governmental Authority or any other Person of any
remedy with respect to a violation of or the subject matter covered by such
representations and warranties, and (iii) the Shareholder's obligations to
indemnify the Xxxxxxxxx Indemnified Parties in connection with any claim brought
by the Shareholder, any officer of director of Solair, or any Affiliate of the
Shareholder shall apply to any such claim first asserted within the period
ending on the four (4) year anniversary of the Closing Date. No claim for the
recovery of any Xxxxxxxxx Indemnifiable Damages or Shareholder Indemnifiable
Damages with respect to the representations and warranties in this Agreement may
be asserted by any of the Xxxxxxxxx Indemnified Parties or by the Shareholder
after such representations and warranties shall expire in accordance with the
terms of this Agreement; provided, however, that claims for Xxxxxxxxx
Indemnifiable Damages or Shareholder Indemnifiable Damages
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first asserted within the applicable period shall not thereafter be barred.
Notwithstanding any knowledge of facts determined or determinable by any party
by investigation, each party shall have the right to fully rely on the
representations, warranties, covenants and agreements of the other parties
contained in this Agreement or in any other documents or papers delivered in
connection herewith. Each representation, warranty, covenant and agreement of
the parties contained in this Agreement is independent of each other
representation, warranty, covenant and agreement. All covenants of the parties
providing for actions to be taken on or following the Closing Date shall survive
indefinitely except as otherwise expressly stated herein.
9.4 THIRD PARTY CLAIMS.
(a) For purposes of this Section 9.4, "Indemnifiable Damages"
means Xxxxxxxxx Indemnifiable Damages or Shareholder Indemnifiable Damages, as
the context requires, "Indemnified Party" means a Xxxxxxxxx Indemnified Party or
a Shareholder Indemnified Party, as the context requires, and "Indemnifying
Party" means the party (Xxxxxxxxx or the Shareholder) against whom a claim for
Indemnifiable Damages is to be made.
(b) If any claim or action shall be commenced or asserted
against an Indemnified Party which, if successful, would give rise to
Indemnifiable Damages, the Indemnified Party shall give the Indemnifying Party
prompt notice of such claim or action (provided that the failure to give such
notice shall not relieve the Indemnifying Party of its indemnification
obligations except where, and solely to the extent that, the failure to provide
such notice actually and materially prejudices the rights of the Indemnifying
Party). Upon notice of any such claim or action, the Indemnifying Party shall
proceed, at its own cost and expense, to diligently defend such claim or action.
The Indemnified Party shall have the right to employ separate legal counsel in
any such claim and participate in the defense thereof, but the fees and expenses
of such other counsel shall be at the expense of the Indemnified Party and not
subject to indemnification under this Agreement unless (i) the Indemnifying
Party shall have authorized in writing the employment of counsel by the
Indemnified Party and shall have agreed in writing to pay the costs and expenses
thereof, (ii) the Indemnifying Party shall have failed to diligently defend such
action, or (iii) the parties to such action (including any impleaded parties)
include the Indemnified Party, and such party has been advised by legal counsel
that there may be legal defenses available to it which are different from, in
addition to, or inconsistent with the legal defenses available to the
Indemnifying Party, or that the Indemnified Party's interest may be adverse in
whole or in part to the interest of the Indemnifying Party.
(c) The Indemnifying Party shall not, in the defense of any
claim or action, except with the prior written consent of the Indemnified Party,
consent to entry of a judgment or enter into any settlement or compromise
provides for injunctive or equitable relief against the Indemnified Party or
otherwise provides for any continuing obligations, or any loss of rights, of the
Indemnified Party (other than in the case of Assumed Litigation, the rights of
Solair to any benefits that may accrue or arise from the Assumed Litigation).
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9.5 SET OFF AGAINST THE ESCROWED AMOUNT. As security for
Xxxxxxxxx'x rights under Section 9.1 hereof, at Closing Xxxxxxxxx shall deliver
the Escrowed Amount to the Escrow Agent. The Shareholder hereby grants Xxxxxxxxx
a security interest in the Escrowed Amount, and Xxxxxxxxx hereby grants the
Shareholder a security interest in the Escrowed Amount (which lien may be
assigned by the Shareholder to the lenders under its revolving credit facility).
Xxxxxxxxx may claim against the Escrowed Amount any Indemnifiable Damages for
which the Shareholder may be responsible pursuant to this Agreement, subject,
however, to the following terms and conditions:
(a) Xxxxxxxxx shall give written notice to the Escrow Agent
and the Shareholder of any claim for Indemnifiable Damages or any other damages
hereunder, which notice shall set forth (i) the amount of Indemnifiable Damages
or other loss, damage, cost or expense which Xxxxxxxxx claims to have sustained
by reason thereof, and (ii) the basis of the claim therefor;
(b) The Escrow Agent shall deliver such Indemnifiable Damages
to Xxxxxxxxx on the later to occur of the expiration of ten (10) days from the
date of such notice (the "Notice of Contest Period") or, if such claim is
contested, the date the dispute is resolved, and such amount, if any, shall be
charged against and reduce the Escrowed Amount; and
(c) If, prior to the expiration of the Notice of Contest
Period, the Shareholder shall notify the Escrow Agent and Xxxxxxxxx in writing
of an intention to dispute the claim and if such dispute is not resolved within
thirty (30) days after expiration of such period, then Xxxxxxxxx may take any
action or exercise any remedy available to it by appropriate legal proceedings
to enforce its rights and remedies hereunder.
9.6 DELIVERY OF ESCROWED AMOUNT. The Escrow Agent shall deliver to
the Shareholder no later than ten (10) business days following the eighteen (18)
month anniversary of the Closing Date any Escrowed Amount then held by it unless
there then remains unresolved any claim for Indemnifiable Damages as to which
notice has been given, in which event the Escrow Agent shall deliver to the
Shareholder any Escrowed Amount in excess of the maximum amount of damages at
issue in connection with any then unresolved claim, and any Escrowed Amount
remaining on deposit after such claim shall have been satisfied shall be
returned to the Shareholder promptly after the time of satisfaction.
9.7 NO BAR; WAIVER. If the Escrowed Amount is insufficient to set
off any claim for Indemnifiable Damages made hereunder (or has been delivered to
the Shareholder prior to the making or resolution of such claim), then Xxxxxxxxx
may take any action or exercise any remedy available to it by appropriate legal
proceedings to collect the Indemnifiable Damages to which it may be entitled
under Section 9.1.
9.8 ADJUSTMENT TO PURCHASE PRICE. All set offs, recoupments and
payments for Indemnifiable Damages made pursuant to this Article shall be
treated as adjustments to the Purchase Price.
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9.9 WAIVER. The Shareholder hereby waives any right to
contribution or any similar rights it may have against Solair as a result of the
Shareholder's agreement to indemnify Xxxxxxxxx under this Article IX.
9.10 REMEDIES. The remedies provided herein shall be the sole
remedies for Indemnifiable Damages, but shall not preclude any party from
asserting any other rights, or seeking any other remedies, against each other
for fraud or from seeking any equitable relief notwithstanding anything to the
contrary contained herein.
9.11 REDUCTION FOR TAX BENEFIT. To the extent that any Xxxxxxxxx
Indemnified Party shall receive any tax benefit as a result of any Xxxxxxxxx
Indemnifiable Damages, the amount payable by the Shareholder on account of such
Xxxxxxxxx Indemnifiable Damages shall be reduced by the amount of the tax
benefit actually received by the Xxxxxxxxx Indemnified Party (assuming the
application of the highest marginal State and Federal tax rates applicable to
the Xxxxxxxxx Indemnified Party in the year in which such tax benefit is
received). To the extent that any Shareholder Indemnified Party shall receive
any tax benefit as a result of any Shareholder Indemnifiable Damages, the amount
payable by Xxxxxxxxx on account of such Shareholder Indemnifiable Damages shall
be reduced by the amount of the tax benefit actually received by the Shareholder
Indemnified Party (assuming the application of the highest marginal State and
Federal tax rates applicable to the Shareholder Indemnified Party in the year in
which such tax benefit is received).
9.12 REDUCTION FOR INSURANCE PROCEEDS. To the extent that any
Xxxxxxxxx Indemnified Party shall receive payment under any insurance policies
on account of damages which constitute Xxxxxxxxx Indemnifiable Damages which are
payable to the Xxxxxxxxx Indemnified Party under the terms of Section 9.1, (a)
if the Shareholder shall have paid the Xxxxxxxxx Indemnified Party under this
Article IX on account of such Xxxxxxxxx Indemnifiable Damages, then such
Xxxxxxxxx Indemnified Party shall repay (or if it shall fail to repay, then
Xxxxxxxxx shall pay) to the Shareholder the amount of such payment up to the
amount actually received by the Xxxxxxxxx Indemnified Party under such insurance
policies (net of any costs incurred by the Xxxxxxxxx Indemnified Party in
collecting under such insurance policies), (b) if the Shareholder shall be
required to pay (but shall not yet have paid) the Xxxxxxxxx Indemnified Party
under this Article IX on account of such Xxxxxxxxx Indemnifiable Damages, then
Xxxxxxxxx and the Xxxxxxxxx Indemnified Party shall credit to the Shareholder
the amount of such payment up to the amount actually received by the Xxxxxxxxx
Indemnified Party under such insurance policies (net of any costs incurred by
the Xxxxxxxxx Indemnified Party in collecting under such insurance policies),
and (c) any such amount repaid, paid or credited to the Shareholder shall not be
deemed Xxxxxxxxx Indemnifiable Damages for purposes of calculating whether the
Xxxxxxxxx Indemnification Threshold shall have been met. To the extent that any
Shareholder Indemnified Party shall receive payment under any insurance policies
on account of damages which constitute Shareholder Indemnifiable Damages which
are payable to the Shareholder Indemnified Party under the terms of Section 9.2,
(x) if Xxxxxxxxx shall have paid the Shareholder Indemnified Party under this
Article IX on account of such Shareholder Indemnifiable Damages, then such
Shareholder Indemnified Party shall repay (or if it shall fail to repay, then
the Shareholder shall pay) to Xxxxxxxxx the amount of such payment up to the
amount actually received
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by the Shareholder Indemnified Party under such insurance policies (net of any
costs incurred by the Shareholder Indemnified Party in collecting under such
insurance policies), (y) if Xxxxxxxxx shall be required to pay (but shall not
yet have paid) the Shareholder Indemnified Party under this Article IX on
account of such Shareholder Indemnifiable Damages, then the Shareholder and the
Shareholder Indemnified Party shall credit to Xxxxxxxxx the amount of such
payment up to the amount actually received by the Shareholder Indemnified Party
under such insurance policies (net of any costs incurred by the Shareholder
Indemnified Party in collecting under such insurance policies), and (z) any such
amount repaid, paid or credited to Xxxxxxxxx shall not be deemed Shareholder
Indemnification Damages for purposes of calculating whether the Shareholder
Indemnification Threshold shall have been met. Notwithstanding anything to the
contrary set forth herein, no party required to make a payment under Sections
9.1 or 9.2 of this Agreement shall be permitted to delay making such payment
when due on account of the availability of any insurance policies to the party
to which such payment is to be made.
ARTICLE X
TERMINATION
10.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing Date:
(a) by mutual written consent of all of the parties hereto at
any time prior to the Closing; or
(b) by Xxxxxxxxx in the event of a material breach (including,
without limitation, a failure to close upon the fulfillment of all conditions to
Closing under the terms of this Agreement) by Solair or the Shareholder of any
provision of this Agreement which breach is not cured within fifteen (15) days
of the Shareholder's receipt of written notice thereof from Xxxxxxxxx or which
breach by its nature cannot be cured prior to Closing; or
(c) by the Shareholder in the event of a material breach
(including, without limitation, a failure to close upon the fulfillment of all
conditions to Closing under the terms of this Agreement) by Xxxxxxxxx of any
provision of this Agreement which breach is not cured within fifteen (15) days
of Xxxxxxxxx'x receipt of written notice thereof from the Shareholder or which
breach by its nature cannot be cured prior to Closing; or
(d) by either party in the event that the Closing shall not
have occurred on or prior to January 30, 1999; provided, however, that any party
shall have the right to extend such date for up to an additional thirty (30)
days upon written notice to the other parties in the event that the only
then-unsatisfied condition to Closing is the receipt of one or more consents
required to be delivered pursuant to Section 7.4 or the expiration or
termination of any applicable HSR Act waiting period as required pursuant to
Sections 7.6 and 8.4.
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10.2 EFFECT OF TERMINATION.
(a) Subject to the remainder of this Section 10.2 below,
except for the provisions of Article IX hereof, which shall survive any
termination of this Agreement, in the event of termination of this Agreement
pursuant to Section 10.1 (or pursuant to any other provision hereof expressly
permitting termination), this Agreement and the Tax Agreement shall forthwith
become void and of no further force and effect and the parties shall be released
from any and all obligations and liabilities hereunder; provided, however, that
nothing herein shall relieve any party from liability for fraud or any act in
the nature of fraud committed in connection with any of its representations,
warranties, covenants or agreements set forth in this Agreement. Notwithstanding
anything to the contrary set forth herein, the Confidentiality Agreement shall
survive any termination of this Agreement.
(b) In the event that Xxxxxxxxx shall elect to terminate this
Agreement under Section 10.1(b) and all of the conditions to closing set forth
in Article VIII (other than Section 8.2) shall have been met (except that the
Escrow Agent need not have executed and delivered the Escrow Agreement) and
Xxxxxxxxx shall have demonstrated that it was ready, willing and able to close
then, notwithstanding anything to the contrary in this Agreement, there shall be
no limitation on the liability of Solair or the Shareholder, and Xxxxxxxxx shall
be entitled to all remedies available at law or under this Agreement.
(c) In the event that the Shareholder shall elect to terminate
this Agreement under Section 10.1(c) and all of the conditions to closing set
forth in Article VII (other than Section 7.9) shall have been met (except that
the Escrow Agent need not have executed and delivered the Escrow Agreement), and
the Shareholder shall have demonstrated that it was ready, willing and able to
close then, notwithstanding anything to the contrary in this Agreement, there
shall be no limitation on the liability of Xxxxxxxxx, and Solair and the
Shareholder shall be entitled to all remedies available at law or under this
Agreement.
ARTICLE XI
GENERAL PROVISIONS
11.1 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other parties or addresses or telecopy numbers which such party
shall designate in writing to the other party):
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(a) IF TO XXXXXXXXX TO:
Xxxxxxxxx Industries, Inc.
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Zivi X. Xxxxxx, President
Telecopy: (000) 000-0000
with a copy to:
Akerman, Senterfitt & Xxxxxx, P.A.
000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. March, Esq.
Telecopy: (000) 000-0000
(b) IF TO SOLAIR (PRIOR TO CLOSING) AND/OR THE SHAREHOLDER TO:
Banner Aerospace, Inc.
00000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxxxx,
Senior Vice President and Chief Operating Officer
Telecopy: (000) 000-0000
WITH A COPY TO:
Banner Aerospace, Inc.
00000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
General Counsel
Telecopy: (000) 000-0000
AND TO:
Gunster, Yoakley, Xxxxxx-Xxxxx & Xxxxxxx, P.A.
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
Notice shall be deemed given on the date sent if sent by facsimile transmission
and on the date delivered (or the date of refusal of delivery) if sent by
overnight delivery, or certified or registered mail.
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11.2 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules attached hereto), the Confidentiality Agreement and Tax Agreement and
other documents delivered at the Closing pursuant hereto, contain the entire
understanding of the parties in respect of its subject matter and supersedes all
prior agreements and understandings (oral or written) between or among the
parties with respect to such subject matter. The Exhibits and Schedules
constitute a part hereof as though set forth in full above. Without limiting the
generality of the foregoing, neither party shall be deemed to make any
representation or warranty other than those expressly set forth in this
Agreement (including the Schedules and Exhibits hereto) the Tax Agreement or any
certificate or agreement signed by any of the parties and delivered at or in
connection with the Closing.
11.3 EXPENSES. Except as otherwise provided herein, the Shareholder
shall pay its own and Solair's fees and expenses, including accounting and
counsel fees, incurred in connection with this Agreement and the transactions
contemplated hereby, and Xxxxxxxxx shall pay its own fees and expenses,
including accounting and counsel fees, incurred in connection with this
Agreement and the transactions contemplated hereby. Any HSR fees of, and any
documentary stamp or intangible taxes imposed on, the parties hereto in
connection with the transactions contemplated hereby shall be split equally
between Xxxxxxxxx and the Shareholder.
11.4 AMENDMENT; WAIVER. This Agreement may not be modified,
amended, supplemented, canceled or discharged, except by written instrument
executed by all parties. No failure to exercise, and no delay in exercising, any
right, power or privilege under this Agreement shall operate as a waiver, nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude the exercise of any other right, power or privilege. No waiver of any
breach of any provision shall be deemed to be a waiver of any preceding or
succeeding breach of the same or any other provision, nor shall any waiver be
implied from any course of dealing between the parties. No extension of time for
performance of any obligations or other acts hereunder or under any other
agreement shall be deemed to be an extension of the time for performance of any
other obligations or any other acts. The rights and remedies of the parties
under this Agreement are in addition to all other rights and remedies, at law or
equity, that they may have against each other.
11.5 BINDING EFFECT; ASSIGNMENT. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective heirs, executors, personal representatives, trustees, guardians,
attorneys-in-fact, successors and assigns. Nothing expressed or implied herein
shall be construed to give any other person any legal or equitable rights
hereunder. Except as expressly provided herein, the rights and obligations of
this Agreement may not be assigned or delegated by any of the parties hereto
without the prior written consent of the non- assigning or non-delegating
parties.
11.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.
11.7 INTERPRETATION. When a reference is made in this Agreement to
an article, section, paragraph, clause, schedule or exhibit, such reference
shall be deemed to be to this Agreement unless
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otherwise indicated. The headings contained herein and on the schedules are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement or the schedules. Time shall be of the essence
in this Agreement.
11.8 SEVERABILITY. If any word, phrase, sentence, clause, section,
subsection or provision of this Agreement as applied to any party or to any
circumstance is adjudged by a court to be invalid or unenforceable, the same
will in no way affect any other circumstance or the validity or enforceability
of any other word, phrase, sentence, clause, section, subsection or provision of
this Agreement. If any provision of this Agreement, or any part thereof, is held
to be unenforceable because of the duration of such provision or the area
covered thereby or otherwise, 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 reduced form,
such provision shall then be enforceable.
11.9 GOVERNING LAW; JURISDICTION. This Agreement shall be construed
in accordance with and governed for all purposes by the laws of the State of
Florida applicable to contracts executed and to be wholly performed within such
State. Any suit, action or proceeding against Xxxxxxxxx, Xxxxxx or the
Shareholder arising out of, or with respect to, this Agreement or any judgment
entered by any court in respect thereof may be brought in the courts of Broward
County, Florida or in the U.S. District Court for the Southern District of
Florida and each party hereby irrevocably accepts and consents to the
non-exclusive personal jurisdiction of those courts for the purpose of any suit,
action or proceeding. In addition, each of Xxxxxxxxx, Xxxxxx and the Shareholder
hereby irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any judgment entered
by any court in respect thereof brought in Broward County, Florida or the U.S.
District Court for the Southern District of Florida and hereby further
irrevocably waives any claim that any suit, action or proceedings brought in
Broward County, Florida or in such District Court has been brought in an
inconvenient forum.
11.10 ARM'S LENGTH NEGOTIATIONS. Each party herein expressly agrees
that (a) before executing this Agreement, said party has fully informed itself
of the terms, contents, conditions and effects of this Agreement; (b) said party
has relied solely and completely upon its own judgment in executing this
Agreement; (c) said party has had the opportunity to seek and has obtained the
advice of counsel before executing this Agreement; (d) said party has acted
voluntarily and of its own free will in executing this Agreement; (e) said party
is not acting under duress, whether economic or physical, in executing this
Agreement; and (f) this Agreement is the result of arm's length negotiations
conducted by and among the parties and their respective counsel.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
XXXXXXXXX INDUSTRIES, INC., a Delaware
corporation
By: /s/Zivi X. Xxxxxx
-----------------------------------------
Zivi X. Xxxxxx
President and CEO
SOLAIR, INC., a Florida corporation
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxxxx
Vice President
BANNER AEROSPACE, INC., a Delaware
corporation
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxxxx
Senior Vice President
and Chief Operating Officer
The undersigned hereby agrees to sell the shares representing his interest
in Banner Aerospace (U.K.) Limited free and clear of any Liens (as defined in
the foregoing Stock Purchase Agreement) for the sum of One Dollar ($1.00) to
Xxxxxxxxx Industries, Inc. ("Xxxxxxxxx") or its designee on the Closing Date (as
defined in the foregoing Stock Purchase Agreement) and to endorse such shares in
blank or execute such documents as may be necessary to transfer such shares to
Xxxxxxxxx or its designee, and hereby joins in the foregoing Stock Purchase
Agreement for the purposes of agreeing to Section 11.9 thereof. The foregoing
agreement is subject to all of the conditions precedent set forth in Article
VIII of the foregoing Stock Purchase Agreement, and consummation of the sale and
delivery of such shares shall occur at the Closing contemplated in Section 2.5
of the foregoing Stock Purchase Agreement.
/s/Xxxxxx X. Xxxxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxxxx, individually but
only as to the foregoing paragraph
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Escrow Agreement
Exhibit B Form of Xxxxxxxxx Guarantee
Exhibit C Form of Tax Agreement
Exhibit D Form of Warrant
Exhibit E Form of Release
Schedule 1.1(a) Designated Inventory
Schedule 1.1(b) Modified GAAP
Schedule 1.1(c) Liens for Contested Taxes
Schedule 3.4 Xxxxxxxxx Consents
Schedule 3.6 Due Diligence Request Lists
Schedule 4.1 Foreign Qualifications/Names
Schedule 4.5 Liens on Shares
Schedule 4.6 Violations/Consents
Schedule 4.9 Financial Statements/Current Balance Sheet
Schedule 4.10 Changes Since the Current Balance Sheet Date
Schedule 4.11 Liabilities of Solair
Schedule 4.12 Litigation
Schedule 4.13 Environmental Matters
Schedule 4.14 Leased Premises
Schedule 4.15 Assets - Exceptions; Liens
Schedule 4.15(a) Assets
Schedule 4.15(b) Vehicles
Schedule 4.16 Restrictions on Business or Operations
Schedule 4.17 Employees
Schedule 4.18 Employee Benefit Plans
Schedule 4.19 Tax Matters
Schedule 4.20 Insurance Matters
Schedule 4.21 Licenses and Permits
Schedule 4.22 Affiliated Transactions
Schedule 4.24 Designated Contracts
Schedule 4.26 Bank Accounts
Schedule 5.1 Conduct of Business Pending the Acquisition
Schedule 6.6 Restricted Parties
Schedule 6.12 Resignations
Schedule 6.15 Assumed Litigation
Schedule 6.16 Guarantees
Schedule 6.17 Liabilities of Banner Aerospace-Singapore, Inc.
Schedule 6.19 Designated Employment Contracts
Schedule 6.20 Other Liabilities Relating to a Change in Control
Schedule 7.4 Required Consents Under Designated Contracts
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