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EXHIBIT 10.9
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of
November 25, 1996, is made by and between AMR Xxxxx, Inc., a Delaware
corporation ("Seller"), and Aircraft Parts International Xxxxx, Inc., a
Delaware corporation ("Purchaser").
W I T N E S S E T H
WHEREAS, Seller, through its Aircraft Parts International operating
unit, is engaged in the business of distributing new and remanufactured aircraft
parts; and
WHEREAS, Purchaser desires to purchase from Seller, and Seller desires
to sell to Purchaser, all of the assets of Seller's Aircraft Parts International
operating unit (the "Business"), upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.01 Purchase and Sale of Assets. Upon the terms and subject to the
conditions set forth in this Agreement, Seller agrees to sell, convey, assign,
transfer and deliver to Purchaser, and Purchaser agrees to purchase and acquire
from Seller, at the Closing, all of the following (the "Assets"):
(a) Seller's trade fixtures, equipment and tangible assets,
whether owned or leased pursuant to the Assumed Leases (as hereinafter defined),
including furniture, machinery, tools, furnishings, supplies and other tangible
personal property used in the Business, wherever located (including any property
held by employees, salesmen or other representatives of the Business),
including, but not limited to, the items set forth on Schedule 1.1(a) (the
"Equipment");
(b) all of Seller's good and saleable inventories of supplies
and products of the Business as of the Closing, wherever located (including any
inventories held by employees, salesmen or other representatives of the
Business), including, but not limited to, finished goods, work-in-process, raw
materials, supply inventories, spare parts, replacement parts, cores, goods in
transit, returns, labels, packaging, containers and other inventories (the
"Inventories");
(c) all of Seller's backlog of orders for products sold in the
Business not invoiced or shipped prior to the Closing;
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(d) all of Seller's accounts and notes receivable from
customers (including affiliates of Seller) and others for products sold in the
Business and all other rights of Seller to payment for goods sold in the
Business, whether or not they have been earned by performance or have been
written off or reserved against as a bad debt or doubtful account, together with
any unpaid interest accrued thereon from the respective obligors and all
instruments and other documents of title representing any of the foregoing and
any and all other receivables of any and every nature whatsoever;
(e) all of Seller's right, title and interest in the motor
vehicles listed on Schedule 1.1(e) (the "Vehicles");
(f) that certain 1979 Cessna T206, U.S. Registration No.
N735FM (the "Purchased Aircraft");
(g) all of Seller's intellectual property rights, including,
but not limited to, customer and vendor lists and files, trade secrets,
copyrights, proprietary and technical information, know-how and other trade
rights and intangible assets, including all goodwill associated therewith,
together with all rights to, and applications, licenses and franchises for, any
of the foregoing, relating to the Business (the "Intellectual Property Rights");
(h) all of Seller's right, title and interest in, to and under
(i) each of the leases, subleases, licenses and other agreements under which
Seller uses or has the right to use tangible personal property set forth on
Schedule 1.1(h) and the lease relating to the Leased Facility (as hereinafter
defined) (collectively, the "Assumed Leases") and (ii) each of the contracts and
agreements set forth on Schedule 1.1(h) (the "Assumed Contracts"), and all
rights (including rights of refund and offset), privileges, deposits, claims,
causes of action and options relating or pertaining to the Assumed Leases and
the Assumed Contracts or any thereof;
(i) to the extent legally transferable, all of the licenses,
approvals, certificates, permits and authorizations from any federal, state,
local or foreign governmental or regulatory body or authority (each, a
"Governmental Authority") relating to the Business, including, but not limited
to, those set forth on Schedule 1.1(i) (the "Permits");
(j) all of Seller's right, title and interest in and to the
names "Aircraft Parts International" and "API" and any names derived from or
bearing a resemblance thereto and any related trademarks, trade names, logos,
service marks and other trade rights currently owned or used by Seller
exclusively in connection with the Business, including all goodwill associated
therewith (the "Corporate Name" and together with the Intellectual Property
Rights, the "Intellectual Property");
(k) all of Seller's current, active and existing records,
files and papers pertaining to the Business, including literature, contract
forms, technical data, graphic materials, pricing and information manuals,
drawings, patterns, designs, sales literature or other sales aids, and
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other data related to the Business (the "Records"), it being understood that for
this purpose "current, active and existing" shall include at least any of the
foregoing currently existing and used by Seller within the last six years;
(l) all prepaid rentals, other prepaid expenses, bonds,
deposits and financial assurance requirements and other current assets
attributable to the Business;
(m) to the extent transferable, all claims of Seller against
third parties of any nature arising out of the operation of the Business,
including, but not limited to, claims against manufacturers of products sold by
the Business; provided, however, that to the extent Seller incurs liabilities to
third parties in respect of the operation of the Business prior to Closing
which, but for this provision would give rise to a claim by Seller against a
supplier or suppliers of the Business for reimbursement, Seller shall retain the
right to pursue such claims to the extent of such liabilities; and
(n) all other or additional privileges, rights, interests,
properties and assets of Seller of every kind and description, wherever located,
used or intended for use in connection with, or that are necessary to the
continued conduct of, the Business as presently being conducted.
1.02 Excluded Assets. Purchaser shall not acquire from the Seller any
assets not described in Section 1.01.
1.03 Assumption of Liabilities. At the Closing, Purchaser shall assume
and agree to pay, perform and discharge all of the following (the "Assumed
Liabilities"):
(a) the liabilities, duties and obligations of Seller to be
performed after the Closing under the Assumed Leases and the Assumed Contracts;
(b) obligations for the completion of open and unfilled
customer orders of the Business that are outstanding as of the close of business
on the Closing Date and which were received in the ordinary course of business
consistent with past practices;
(c) the accounts payable of the Business as of the Closing
(including those payable to affiliates of Seller) to the extent incurred in the
ordinary course of business and reflected on the Closing Balance Sheet (as
hereinafter defined);
(d) the liabilities of Seller, if any, represented by accrued
expenses for utilities and for wages and bonuses for those employees who are
employed by Seller as of the Closing to the extent reflected on the Closing
Balance Sheet; and
(e) Purchaser's share of ad valorem or similar taxes to be
prorated pursuant to Section 2.05.
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1.04 Excluded Liabilities. Purchaser shall not assume or otherwise be
responsible for any liability or obligation of Seller, whether or not relating
to the Business, other than the Assumed Liabilities. Without limiting the
generality of the foregoing, Purchaser shall not assume (a) any liabilities
relating to the current or long term portion of funded debt of the Business, if
any, (b) except as otherwise provided in Subsection 1.03(d), any obligations or
liabilities arising prior to the Closing Date from or relating to the employment
or termination of employment of any person with respect to the Business,
including, but not limited to, any obligations or liabilities arising from or
relating to any employee benefit plans or arrangements, (c) any Taxes (as
hereinafter defined) with respect to the ownership, operation or use of the
Business or the Assets prior to the Closing, other than Purchaser's share of ad
valorem or similar taxes as set forth in Section 2.05 hereof and transfer taxes,
if any, as set forth in Section 2.04 hereof, (d) any xxxxxxx'x compensation
claim arising prior to the Closing Date, and any xxxxxxx'x compensation claim
arising after the Closing Date for an incident that occurred prior to the
Closing Date, and (e) any product liability claim arising prior to the Closing
Date, and any product liability claim arising after the Closing Date for work
performed by Seller prior to the Closing Date.
1.05 Closing. The closing of the transactions contemplated hereby (the
"Closing") shall take place at the offices of AMR Xxxxx, Inc., 0000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxx Xxxxx, Xxxxx, simultaneously with the closing of an initial
public offering of shares of common stock of First Aviation Services Inc., the
parent of Purchaser (the "Closing Date"); provided, however, that if Purchaser
shall not have obtained insurance covering the Business by such date or if the
closing of such initial public offering shall not have occurred on or prior to
January 15, 1997, the parties hereto shall mutually agree on a Closing Date
prior to March 15, 1997.
1.06 Instruments of Transfer; Further Assurances. In order to
consummate the transactions contemplated hereby, at the Closing Seller shall
execute and deliver to Purchaser (a) a general xxxx of sale and assignment
relating to the Assets other than the Assumed Leases, the Assumed Contracts and
the Purchased Aircraft in the form attached hereto as Exhibit A (the "Xxxx of
Sale"), (b) an aircraft xxxx of sale covering the Purchased Aircraft in the form
attached hereto as Exhibit B and an AC Form 8050-2 xxxx of sale (together, the
"Aircraft Xxxx of Sale"), (c) an assignment and assumption agreement relating to
the Assumed Leases and the Assumed Contracts in the form attached hereto as
Exhibit C (the "Assignment and Assumption Agreement") and (d) documents of title
with respect to the Vehicles; and Purchaser shall execute and deliver to Seller
the Assignment and Assumption Agreement. At the Closing, and at all times
thereafter as may be necessary, Seller shall execute and deliver to Purchaser
such other instruments of transfer as shall be reasonably necessary to vest in
Purchaser title to the Assets and to comply with the purposes and intent of this
Agreement, and Purchaser and Seller shall execute and deliver such other
instruments as shall be reasonably necessary or appropriate to evidence the
assignment by Seller and the assumption by Purchaser of the Assumed Leases, the
Assumed Contracts and any other liabilities to the extent provided in Section
1.03.
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ARTICLE II
PURCHASE PRICE
2.01 Purchase Price. At the Closing, Purchaser shall pay to Seller by
wire transfer of immediately available funds to the account of Seller at The
Chase Manhattan Bank, New York, New York, ABA 000000000 for American Airlines,
Inc., Account No. 000-0-000000 as the purchase price for the Assets (the
"Purchase Price") the amount of $11,000,000, subject to adjustment as set forth
in Section 2.02.
2.02 Purchase Price Adjustment.
(a) As soon as practicable, but in any event within 90 days,
after the Closing Date, Purchaser will prepare and deliver to Seller an
unaudited balance sheet of the Business as at the Closing Date (the "Closing
Balance Sheet"). The Closing Balance Sheet shall reflect the Assets and the
Assumed Liabilities, and with respect to such items shall be prepared in
accordance with Generally Accepted Accounting Principles ("GAAP"), using the
same accounting methods, policies, practices and procedures with consistent
classifications, judgments and valuation and estimation methodologies as used in
the preparation of the Financial Statements (as hereinafter defined). Seller
shall provide Purchaser with full access to the books and records of the
Business necessary for Purchaser to prepare the Closing Balance Sheet, and
Purchaser shall provide Seller with full access to the books, records and work
papers used by Purchaser in preparing the Closing Balance Sheet. Based upon the
Closing Balance Sheet and in a manner consistent as to methodology used in
determining reserves as that used in the determination of the $10,500,000
estimated net asset value referred to in Subsection 2.02(b) hereof, Seller and
Purchaser shall jointly determine, within 15 days of delivery of the Closing
Balance Sheet to Seller, the book value of the Assets excluding all liabilities
other than the Assumed Liabilities, as at the Closing Date (the "Net Asset
Value"). If Purchaser and Seller have not agreed on the Net Asset Value within
such 15-day period, Purchaser shall cause its independent public accountants to
meet with Seller's independent public accountants in an attempt to resolve any
differences, other than differences concerning the value of the cores in the
Inventory. If such independent public accountants are unable to resolve the
differences, then the issues in dispute shall be submitted to a third firm of
independent public accountants selected by Seller's and Purchaser's independent
public accountants for resolution, and the determination of such third firm of
independent public accountants shall be final and binding upon the parties.
Notwithstanding anything to the contrary set forth above, if Purchaser
and Seller do not agree on the value of the cores in the Inventory, then MB
Valuations shall be engaged for the purpose of performing a valuation of such
cores based on an orderly liquidation appraisal. The determination of MB
Valuations shall be final and binding upon the parties and shall be reflected in
the computation of Net Asset Value.
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(b) If the Net Asset Value as determined in accordance with
Section 2.02(a) is greater than $10,500,000, Purchaser shall pay to Seller
within five days of such determination in immediately available funds the amount
of such excess. If the Net Asset Value as determined in accordance with Section
2.02(a) is less than $10,500,000, Seller shall pay to Purchaser within five days
of such determination in immediately available funds the amount of such
shortfall.
(c) All fees and expenses incurred in connection with the
preparation of the Closing Balance Sheet shall be borne by Purchaser.
2.03 Allocation of Purchase Price. On or before the Closing Date,
Purchaser and Seller shall prepare a schedule (the "Allocation Schedule")
reasonably acceptable to both parties setting forth the proportion of the
consideration to be allocated to each of the Assets purchased pursuant to this
Agreement. Purchaser and Seller shall report the purchase and sale of the Assets
in their respective federal, state, local or foreign tax returns in accordance
with such Allocation Schedule and will complete at Closing Internal Revenue
Service Form 8594 based upon such Allocation Schedule and will adjust such Form,
if necessary, to reflect the Closing Balance Sheet.
2.04 Transfer Taxes. Purchaser shall provide Seller with a Tennessee
exemption certificate stating that Purchaser is purchasing the Inventories for
resale, and such other exemption certificates as Seller may reasonably request.
Purchaser and Seller will divide equally any documentary transfer taxes and
sales, use or other taxes imposed by reason of the transfer of the Purchased
Aircraft and the Vehicles, and any deficiency, interest or penalty asserted with
respect thereto.
2.05 Proration of Taxes. Seller and Purchaser shall each pay its
respective pro rata portion of all personal and real property taxes, ad valorem
taxes, use taxes and assessments relating to the Assets prorated to the Closing
Date based upon the number of days in the applicable taxable period during which
the Assets were owned by Seller. Purchaser shall pay such sums to the
appropriate taxing authorities when due, prior to becoming delinquent. Purchaser
shall promptly forward to Seller after receipt copies of any such taxes and
assessments and Seller shall pay to Purchaser Seller's pro rata portion of such
tax or assessment. Seller shall retain liability for sales taxes relating to
sales of products of the Business prior to the Closing. Purchaser agrees to pay
such sales tax on behalf of Seller when due following the Closing in the manner
set forth above in this Section 2.05.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that:
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3.01 Organization; Power and Authority. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the requisite corporate power and authority to carry on its
business as it is now being conducted. Seller is duly qualified or otherwise
authorized to do business as a foreign corporation and is in good standing in
each jurisdiction set forth in Schedule 3.01.
3.02 Authorization. Seller has full corporate power and authority to
execute and deliver this Agreement and the other agreements, documents and
instruments contemplated hereby to which Seller is a party. The execution,
delivery and performance of this Agreement and the other agreements, documents
and instruments contemplated hereby to which Seller is a party and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary corporate action on the part of Seller.
This Agreement has been, and each other agreement, document and instrument
contemplated hereby to which Seller is a party will be, on or prior to the
Closing Date, duly executed and delivered by Seller, and constitute, or upon
execution and delivery will constitute, the valid, legal and binding obligations
of Seller, enforceable against Seller in accordance with their respective terms,
except as may be limited by bankruptcy, reorganization, fraudulent conveyance,
insolvency and similar laws of general application relating to or affecting the
enforcement of rights of creditors and subject to general principles of equity
and, with respect to Section 1.01 of that certain Stockholders Agreement to be
entered into among Seller, Purchaser and the parent of Purchaser, judicial
discretion as to the reasonableness thereof.
3.03 Conflicts; Defaults. Neither the execution and delivery of this
Agreement and the other agreements, documents and instruments contemplated
hereby to which Seller is or will be a party nor the consummation by Seller of
the transactions contemplated hereby or thereby, will (a) result in a violation
or breach of the Certificate of Incorporation, as amended, or the Bylaws, as
amended, of Seller or, subject to obtaining the Required Consents (as
hereinafter defined), any agreement, indenture or other instrument to which
Seller is a party or under which Seller is bound or to which any of the Assets
is subject, (b) result in the creation or imposition of any lien, charge or
encumbrance upon any of the Assets or (c) violate any law, statute, judgment,
decree, injunction, order, writ, rule or regulation of any Governmental
Authority having jurisdiction over the Business or the Assets.
3.04 Consents. Except for those set forth on Schedule 3.04 (the
"Required Consents"), no authorization, consent, approval, permit, license of,
or filing with, any Governmental Authority, any lender or lessor or any other
person or entity is required to authorize, or is required in connection with,
the execution, delivery and performance by Seller of this Agreement or any other
agreement, document or instrument contemplated hereby.
3.05 Financial Statements. Seller has furnished to Purchaser the
audited balance sheet of the Business and the related audited statements of
income, retained earnings and changes in financial position of the Business for
the year ended December 31, 1995, including the notes thereto (the "Year End
Audited Financial Statements"), and the audited balance sheet and related
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audited statements of income, retained earnings and changes in financial
position of the Business for the nine-month period ended September 30, 1996 (the
"Nine Month Audited Financial Statements" and together with the Year End Audited
Financial Statements, the "Financial Statements"). The Financial Statements
fairly present the financial condition and results of operations of the Business
as of the dates and for the periods indicated (subject to year-end adjustments
consistent with GAAP with respect to the Nine Month Audited Financial
Statements) and have been prepared in accordance with GAAP applied on a
consistent basis with prior periods.
3.06 Liabilities and Obligations. Except for those incurred in the
ordinary course of business since the date of the Financial Statements or as set
forth on Schedule 3.06, the Financial Statements reflect all liabilities of
Seller relating to the Business of the type required by GAAP to be reflected or
disclosed in the Financial Statements and arising out of transactions effected
or events occurring on or prior to the date thereof. All reserves shown in the
Financial Statements are appropriate, reasonable and sufficient to provide for
losses thereby contemplated. Except as set forth in the Financial Statements, or
incurred in the ordinary course of business since the date thereof, Seller with
respect to the Business is not liable upon or with respect to, or obligated in
any other way to provide funds in respect of or to guarantee or assume in any
manner, any debt, obligation, liability or dividend of any person, corporation,
association, partnership, joint venture, trust or other entity, and Seller knows
of no basis for the assertion of any other claims or liabilities of any nature
or in any amount which, singularly or in the aggregate, are material.
3.07 Changes in Circumstances. Except as set forth on Schedule 3.07,
since September 30, 1996, Seller has not, except in the ordinary course of
business:
(a) suffered any change that has had a material adverse effect
on the Assets or the Business;
(b) contracted for, financed or paid any single capital
expenditure relating to the Business in excess of $5,000 or total capital
expenditures relating to the Business in excess of $10,000;
(c) mortgaged, pledged or subjected any of the Assets to any
lien, lease, security interest or other charge or encumbrance, other than
Permitted Liens (as hereinafter defined);
(d) made credit sales relating to the Business other than in
the ordinary course of business consistent with past practices with respect to
the size of each credit sale, the credit history of customers making purchases
on credit and the terms and conditions of the sales;
(e) suffered any damage or destruction to or loss of any
Assets (whether or not covered by insurance), or lost or terminated employees,
customers or suppliers, where such
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damage, loss or termination has had or could have a material adverse effect on
the Assets or the Business;
(f) acquired or disposed of any Assets or incurred, assumed or
guaranteed any indebtedness for borrowed money or other liabilities or
obligations to pay money relating to the Business except (i) the disposal or
trade-in of machinery, vehicles and equipment in connection with the replacement
thereof in the ordinary course of business and consistent with past practices,
(ii) the purchase or sale of inventory in the ordinary course of business and
consistent with past practices, (iii) the incurrence of trade payables in the
ordinary course of business and (iv) guaranties, indebtedness, liabilities and
obligations incurred in the ordinary course of business consistent with past
practices and that have not and will not, individually or in the aggregate, have
a material adverse effect on the Assets or the Business;
(g) written up, written down or written off the carrying value
of any of the Assets;
(h) changed the costing system or depreciation methods of
accounting for the Assets;
(i) forgiven, compromised, canceled, released, permitted to
lapse or waived any rights or claims that, individually or in the aggregate, are
or could be material to the Assets or the Business;
(j) entered into, terminated or agreed to any modifications or
amendments to any of the Assumed Leases or Assumed Contracts that, individually
or in the aggregate, have had or could have a material adverse effect on the
Assets or the Business, other than renewals or extensions thereof in the
ordinary course of business;
(k) increased the wages, salary or compensation, or granted
any other benefit to any officer, employee or agent of the Business; or
(l) entered into or terminated any other commitment or
transaction or experienced any other event that has had or could have a material
adverse effect on the Assets or the Business.
3.08 Title to the Assets. Seller has good and marketable title to the
Assets, free and clear of all liens, claims and encumbrances of any nature
("Liens") except for the following (collectively, the "Permitted Liens"): (a)
Liens for taxes not yet due or delinquent and non-delinquent statutory liens
arising other than by reason of Sellers' default, (b) statutory Liens of
landlords and Liens of carriers, warehousemen, mechanics, materialmen and
similar Liens arising by operation of law in the ordinary course of business for
amounts the payment of which is either not delinquent or is being contested in
good faith, (c) any interest or title of a lessor under any of the Assumed
Leases and (d) the Liens set forth on Schedule 3.08 hereto.
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3.09 Leased Facility and Accessory Shop. The only real property used in
the Business is the "Demised Premises" as defined in, and leased pursuant to,
that certain Net Lease, dated January 23, 1995, between Seller and Xxxxxxxxxx
Industrial Properties, L.P. (the "Leased Facility"), and certain space in
Seller's fixed base operation in Memphis, Tennessee (the "Memphis FBO") used by
the Business as an accessory shop (the "Accessory Shop"). Seller holds a valid
and existing leasehold estate in the Leased Facility free and clear of all Liens
other than (i) Permitted Liens and (ii) easements and restrictions which do not
adversely affect the use thereof by the Business or the value thereof. No
termination rights have been exercised or, to the best of Seller's knowledge,
threatened by any party with respect to the lease for the Leased Facility.
Seller has no knowledge of any condemnation proceedings having been instituted
or threatened against the Leased Facility or the Accessory Shop. There are no
unpaid assessments (governmental or otherwise) for sewers, water, paving,
electrical power or other improvements and no such assessments are threatened.
The Leased Facility and the Accessory Shop are zoned in a manner to permit their
current use in the operation of the Business. The Leased Facility (including,
but not limited to, the roof, heating and air conditioning systems, duct work
and other structural components of such building) is in sufficient condition,
working order and repair appropriate to its age and design and is not in need of
repairs in excess of $10,000 in the aggregate. All water, gas, electrical,
steam, compressed air, telecommunication, sanitary and storm sewage lines and
systems and other similar systems or utilities serving the Leased Facility and
the Accessory Shop are installed and operating and are sufficient to enable the
Leased Facility and Accessory Shop to continue to be used and operated in the
manner currently being used and operated.
3.10 Inventory and Equipment; Condition of Assets. Seller has, and upon
consummation of the transactions contemplated by this Agreement, Purchaser will
acquire, good title to the Inventory and Equipment (other than the Equipment
being leased pursuant to the Assumed Leases), free and clear of any Liens, other
than the Permitted Liens. Seller holds valid and existing leaseholds in all of
the Equipment leased pursuant to the Assumed Leases, in each case under a valid
and enforceable lease. The Leased Facility, the Equipment, the Vehicles and the
Purchased Aircraft are in good condition and repair, normal wear and tear
excepted, are adequate for their intended use in the Business in the ordinary
course of business and conform in all material respects with all applicable
ordinances, regulations and other laws and there are no known latent defects
therein. The Inventories are in good and merchantable condition and are not
obsolete or defective except for Inventory that is obsolete or not sellable in
the ordinary course of business (a) that has been written down to an amount not
in excess of market value or (b) for which reserves have been provided in the
Financial Statements.
3.11 Assumed Leases and Assumed Contracts. Each of the Assumed Leases
and the Assumed Contracts is in full force and effect and is valid, binding and
enforceable against Seller in accordance with its terms, and all sums payable or
receivable thereunder are current, no notice of default or termination is
outstanding, no uncured default on the part of Seller, or, to the best of
Seller's knowledge, any other party thereto exists thereunder, and, to the best
of Seller's knowledge, no event has occurred and no condition exists which, with
the giving of
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notice or lapse of time or both, would constitute such a default. None of the
Assumed Leases or the Assumed Contracts has been amended or modified except as
set forth on Schedule 1.1(h). Seller does not currently contemplate, nor does
Seller have knowledge that any other person or entity currently contemplates,
any material amendment or change to any Assumed Lease or Assumed Contract.
Seller has not received notice of any plan or intention of any other party to
any Assumed Lease or Assumed Contract to exercise any right to cancel or
terminate such Assumed Lease or Assumed Contract, and knows of no fact that
would justify the exercise of such right. Seller has made available or delivered
to Purchaser complete and correct copies of all Assumed Leases and Assumed
Contracts.
3.12 Intellectual Property. Seller is not under any obligation to pay
any royalties or similar payments to any person or business in connection with
the use or right to use any Intellectual Property. To the best of Seller's
knowledge, in its conduct of the Business Seller has not infringed and is not
now infringing the proprietary rights belonging to any person or business, and,
to the best of Seller's knowledge, there is no infringement by others of any
Intellectual Property owned by Seller.
3.13 Corporate Name. There are no actions, suits or proceedings pending
or threatened against or, to the best of Seller's knowledge, affecting Seller
that may result in any impairment of the right of Seller to use the Corporate
Name. The use of the Corporate Name does not infringe the rights of any third
party nor is it confusingly similar to the corporate name of any third party.
After the Closing Date, no person or business other than Purchaser will be
authorized, directly or indirectly, to use the Corporate Name.
3.14 Permits and Licenses; Compliance with Law. Except to the extent
not transferrable, the Permits constitute all necessary governmental licenses,
franchises, permits, approvals, authorizations and rights, whether federal,
state or local, that are necessary for Seller to engage in the Business and
that, if not possessed, would have a material adverse effect on the Assets or
the Business. There are no existing violations of any such Permits, or of any
other applicable federal, state or local law, statute, ordinance, order or
regulation the failure to comply with which would have a material adverse effect
on the Business or the Assets or the ability of Seller to perform its
obligations under this Agreement or the other agreements, documents and
instruments contemplated hereby to which Seller is a party.
3.15 Litigation. Except as set forth on Schedule 3.15, Seller is not a
party to, and the Assets and the Business are not the subject of, any pending
or, to the best of Seller's knowledge, threatened litigation, action, suit,
proceeding, claim, investigation or administrative proceeding by or with another
party, nor, to the best of Seller's knowledge, does there exist any basis for
any litigation, action, suit or proceeding to which Seller (or following the
Closing, Purchaser) could be a party which, if adversely determined, would have
a material adverse effect on the Assets or the Business or which questions or
otherwise affects the validity of this Agreement or any action taken or to be
taken or documents executed or to be executed pursuant to or in connection with
the provisions of this Agreement, nor is there any judgment, decree, injunction,
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rule or order of any Governmental Authority outstanding against Seller having,
or which may have, a material adverse effect on the Assets or the Business.
3.16 Taxes. There are no liens for Taxes upon the Assets except for
statutory Liens for Taxes not yet due or delinquent. All material tax returns
required to be filed by Seller with respect to the Business have been timely
filed with the appropriate taxing authorities (after giving effect to any valid
extensions). None of the assets or properties of the Business is an asset or
property that is or will be required to be treated as being (a) owned by any
person (other than Seller) pursuant to the provisions of Section 168(f)(8) of
the Internal Revenue Code of 1954, as amended and in effect immediately before
the enactment of the Tax Reform Act of 1986 (the "1954 Code"), or (b) tax exempt
use property within the meaning of Section 168(h)(1) of the 1954 Code. As used
in this Agreement, "Taxes" (and all derivations thereof) means all federal,
state and local sales, use, property, payroll, excise, fuel, environmental,
customs or other similar type of tax, duty or fee or payment in lieu of tax,
duty or fee (other than taxes measured upon net income), as well as any related
amounts of interest or penalties, imposed by any Governmental Authority with
respect to the ownership, operation or use of the Business or the Assets.
3.17 Certain Employee Items. Schedule 3.17 sets forth a complete list
of all employees of the Business and the present compensation (cash and
non-cash) for each. Seller is not a party to any labor or collective bargaining
agreement relating to the Business and there are no labor or collective
bargaining agreements which pertain to any employees of the Business. No labor
organization, collective bargaining representative or group represents or, to
the best of Seller's knowledge, claims to represent any employees of the
Business. There is no labor strike, dispute, work stoppage, slow down or lockout
pending or, to the best of Seller's knowledge, threatened against or affecting
the Business and, to the best of Seller's knowledge, no union organizational
campaign is in progress and no question concerning representation exists. There
are no unfair labor practice charges, grievances or complaints pending or, to
the best of Seller's knowledge, threatened by or on behalf of any employee or
group of employees of the Business which, if individually or collectively
resolved against the Business might have a material adverse effect on the Assets
or the Business. There are no complaints or charges pending or, to the best of
Seller's knowledge, threatened to be filed with any federal, state or local
court, governmental agency or arbitrator based on, arising out of, in connection
with, or otherwise relating to employment by the Business. Seller is in
compliance with all laws and orders relating to the employment of labor,
including all such laws and orders relating to wages, hours, collective
bargaining, discrimination, civil rights, safety and health, workers'
compensation and the collection and payment of withholding and/or social
security taxes and any similar tax.
3.18 Employee Benefit Plans and Arrangements. Schedule 3.18 lists all
of Seller's employee benefit plans, as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), relating to
employees of the Business, including, without limitation, executive compensation
plans, employee retirement plans, pension trusts, profit-sharing, bonus or stock
purchase plans, medical plans, life insurance plans, disability plans,
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severance pay plans, or other employee benefit plans for such employees
(collectively, the "Plans"). With respect to the Plans, Seller has delivered to
Purchaser copies of summary plan descriptions.
Schedule 3.18 identifies each such Plan intended to be a qualified plan
under Section 401 of the Internal Revenue Code of 1986, as amended (the "Code").
Except as otherwise set forth on Schedule 3.18, Seller has not participated in,
maintained or contributed to any "multiemployer employee welfare benefit plan"
or "multiemployer employee pension benefit plan" and no employees of Seller are
covered by any such multiemployer employee welfare benefit plan or multiemployer
employee pension benefit plan. For purposes of this Section 3.18, a
"multiemployer employee welfare benefit plan" is a plan covering more than one
employer and that is negotiated with one or more unions, and a "multiemployer
employee pension benefit plan" is a plan described in Section 4001(a)(3) of
ERISA.
3.19 Environmental Matters. Except as disclosed on Schedule 3.19:
(a) the operations of the Business have been and are in
compliance with all Environmental Laws (as hereinafter defined), except for such
non-compliance which would not have a material adverse effect on the Assets or
the Business;
(b) no judicial or administrative proceedings are pending or,
to the best of Seller's knowledge, threatened against Seller relating to the
Business, the Leased Facility or the Accessory Shop that allege the violation of
or seek to impose liability pursuant to any Environmental Law, and, to the best
of Seller's knowledge, there are no investigations pending or threatened against
the Leased Facility, the Accessory Shop or Seller with respect to the Business,
which could give rise to material Environmental Costs and Liabilities (as
hereinafter defined);
(c) there are no facts, circumstances or conditions relating
to, arising from or attributable to the Business, the Leased Facility or the
Accessory Shop or, to the best of Seller's knowledge, adjacent properties that
are reasonably likely to give rise to material Environmental Costs and
Liabilities; and
(d) Seller has given Purchaser copies of all environmentally
related audits, assessments, studies, reports, analyses and results of
investigations of the Leased Facility and the Accessory Shop that are in
Seller's possession, custody or control.
For purposes of this Agreement, the following terms shall have the
following meanings:
"Environmental Costs and Liabilities" means any and all
losses, liabilities, obligations, damages, fines, penalties, judgments, actions,
claims, costs and expenses (including, without limitation, fees, disbursements
and expenses of legal counsel, experts, engineers and consultants and the costs
of investigation and feasibility studies and clean up, remove, treat, or
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in any other way address any Hazardous Materials) arising from or under any
Environmental Law.
"Environmental Laws" means any applicable federal, state,
local or foreign laws (including common law), statute, code, ordinance, rule,
regulation or other legal requirement relating to the environment, natural
resources or public and employee health and safety, and includes, but is not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (42 U.S.C. Section 9601 et seq.) (CERCLA), the Hazardous Material
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource Conservation
and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), the Clean Water Act
(33 U.S.C. et seq), the Clean Air Act (33 U.S.C. Section 2601 et seq), the Toxic
Substances Control Act (15 U.S.C. Section 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136 et seq.), the
Oil Pollution Act of 1990 (33 U.S.C. Section 2701 et seq.) and the Occupational
Safety and Health Act (24 U.S.C. Section 651 et seq.) as such laws have been
amended or supplemented, and the regulations promulgated pursuant thereto, and
all analogous state or local statutes.
"Hazardous Materials" means any substance, material or waste
which is regulated by any Governmental Authority, including, without limitation,
any material, substance or waste which is defined as a "hazardous waste,"
"hazardous material," "hazardous substance," "extremely hazardous waste,"
"restricted hazardous waste," "toxic waste" or "toxic substance" under any
provision of Environmental Law, which includes, but is not limited to,
petroleum, petroleum products, asbestos, urea formaldehyde and polychlorinated
biphenyls.
3.20 Insurance. The Assets are insured by Seller under valid and
enforceable policies, issued by insurers of recognized responsibility in amounts
and against such risks and losses as are customary in the industry in which the
Business operates. Seller has provided Purchaser with true and complete copies
of such policies.
3.21 Brokers, Finders and Agents. Seller is not directly or indirectly
obligated to anyone as a broker, finder, agent or in any other similar capacity
in connection with this Agreement or the transactions contemplated hereby.
3.22 Full Disclosure. No representation or warranty of Seller contained
in this Agreement or any other agreement, document or instrument between the
parties hereto contemplated hereby contains an untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained herein or therein misleading
3.23 Purchased Aircraft. The Purchased Aircraft is airworthy and
current with respect to all airworthiness directives and mandatory and
recommended service bulletins.
3.24 The Assets. Except for certain assets which are not transferable
or which arise by virtue of the ownership of Seller by AMR Corporation, all of
which assets are set forth on
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Schedule 3.24, the Assets, whether owned or leased, constitute all of the
assets, whether real, personal, tangible or intangible, used by Seller to carry
on the business as presently conducted.
3.25 Receivables. All of Seller's accounts and notes receivable from
customers and others for products sold in the Business have arisen as a result
of sales made in the ordinary course of business and consistent with past
practices, and Seller has no reason to believe that such accounts and notes
receivable will not be paid in full as and when due.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that:
4.01 Organization; Power and Authority. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the requisite corporate power and authority to carry on its
business as it is now being conducted.
4.02 Authorization. Purchaser has full corporate power and authority to
execute and deliver this Agreement and the other agreements, documents and
instruments contemplated hereby to which Purchaser is a party. The execution,
delivery and performance of this Agreement and the other agreements, documents
and instruments contemplated hereby to which Purchaser is a party and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary corporate action on the part of
Purchaser. This Agreement has been, and each other agreement, document and
instrument contemplated hereby to which Purchaser is a party will be, on or
prior to the Closing Date, duly executed and delivered by Purchaser, and
constitute, or upon execution and delivery will constitute, the valid, legal and
binding obligations of Purchaser, enforceable against Purchaser in accordance
with their respective terms, except as may be limited by bankruptcy,
reorganization, fraudulent conveyance, insolvency and similar laws of general
application relating to or affecting the enforcement of rights of creditors and
subject to general principles of equity.
4.03 Conflicts; Defaults. Neither the execution and delivery of this
Agreement and the other agreements, documents and instruments contemplated
hereby to which Purchaser is or will be a party nor the consummation by
Purchaser of the transactions contemplated hereby or thereby, will (a) result in
a violation or breach of the Certificate of Incorporation or the Bylaws of
Purchaser or any agreement, indenture or other instrument to which Purchaser is
a party or under which Purchaser is bound or (b) violate any law, statute,
judgment, decree, injunction, order, writ, rule or regulation of any
Governmental Authority having jurisdiction over Purchaser.
4.04 Consents. No authorization, consent, approval, permit, license of,
or filing with, any Governmental Authority, any lender or lessor or any other
person or entity is required to
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authorize, or is required in connection with, the execution, delivery and
performance of this Agreement or any other agreement, document and instrument
contemplated hereby by Purchaser, other than FAA repair station authority and
those permits or licenses which will be obtained prior to Closing.
4.05 Financial. Purchaser shall have at the Closing equity and/or debt
financing in an amount sufficient to pay the Purchase Price and consummate the
transactions contemplated by this Agreement and the other agreements, documents
and instruments contemplated hereby.
4.06 Brokers, Finders and Agents. Purchaser is not directly or
indirectly obligated to anyone as a broker, finder, agent or in any similar
capacity in connection with this Agreement or the transactions contemplated
hereby.
ARTICLE V
COVENANTS OF SELLER
5.01 Access to Information. Seller shall provide Purchaser and
Purchaser's representatives reasonable access to the Assets and to Seller's
books and records relating to the Assets and the Business, wherever located,
allow Purchaser and its representatives to make such audits, inspections and
tests (including environmental inspections and tests) thereof as Purchaser may
reasonably request and cause its officers and advisors to furnish Purchaser and
its representatives with such financial and operating data and other information
with respect to the Assets and the Business as Purchaser may from time to time
reasonably request. Seller shall also permit Purchaser to meet with and
interview employees, customers and suppliers of the Business for the purpose of
permitting Purchaser to become familiar with and to better understand the Assets
and the Business.
5.02 Conduct of Business Pending Closing. Prior to the Closing, except
as otherwise permitted or required by this Agreement or with the prior written
consent of Purchaser, Seller shall:
(a) operate the Business only in the ordinary course and, with
respect to the Business, will not introduce any new method of management or
operation or incur any obligation or liability, absolute or contingent, other
than those incurred in the ordinary course of business consistent with past
practices;
(b) use its reasonable efforts, consistent with the manner in
which the Business is currently operated, to preserve the Assets, the Leased
Facility and the Business intact and to retain the present employees, customers
and suppliers of the Business to the extent profitable;
(c) not take any action that could have a material adverse
effect on the Assets, the Leased Facility or the Business or take or fail to
take any action that would cause or permit
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the representations made in Article III hereof to be inaccurate at the time of
Closing or preclude Seller from making such representations and warranties at
and as of the time of Closing;
(d) to the extent related to the Assets or the Business, not
contract for, finance or pay any single capital expenditure in excess of $5,000
or total capital expenditures in excess of $10,000;
(e) not mortgage, pledge or subject any of the Assets or the
Leased Facility to any Lien, lease, security interest or other charge or
encumbrance, other than Permitted Liens;
(f) in respect of the Business, not make credit sales other
than in the ordinary course of business consistent with past practices with
respect to the size of each credit sale, the credit history of customers making
purchases on credit and the terms and conditions of the sales;
(g) not acquire or dispose of any of the Assets or incur,
assume or guaranty any indebtedness for borrowed money or other liabilities or
obligations to pay money relating to the Business, except for the incurrence of
trade and other payables in the ordinary course of business;
(h) not write up, write down or write off the carrying value
of any of the Assets;
(i) not enter into, terminate or agree to any modifications or
amendments to any Assumed Leases or Assumed Contracts;
(j) not materially increase or modify the wages, salary or
compensation of, or grant any additional benefit to any officer, employee or
agent of the Business;
(k) not enter into, terminate, modify or supplement any
collective bargaining agreement relating to employees of the Business; and
(l) not modify or terminate (i) that certain Domestic New
Aircraft/Sales and Service Center and Parts Distribution Agreement, dated
January 1, 1996 (the "Piper Distribution Agreement"), between Seller and The New
Piper Aircraft, Inc. ("Piper"), as amended, or (ii) its distribution arrangement
with Cessna Aircraft Company ("Cessna").
5.03 Notice of Material Adverse Change. Seller shall promptly inform
Purchaser in writing of any material adverse change in the condition of the
Assets or the Business. Notwithstanding the disclosure to Purchaser of any such
material adverse change, Seller shall not be relieved of any liability for, nor
shall the providing of such notice by Seller to Purchaser be deemed a waiver by
Purchaser of, the breach of any representation or warranty of Seller contained
in this Agreement.
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5.04 Consents. Seller shall use its reasonable efforts to obtain prior
to the Closing the Required Consents, including all necessary consents relating
to the assignment of each of the Assumed Leases and the Assumed Contracts, and
shall make prior to the Closing all material filings, give all material notices
and otherwise comply in all material respects with all governmental laws, rules
and regulations which are required on the part of Seller in order to enter into
and perform this Agreement and the other agreements, documents and instruments
contemplated hereby to which Seller is a party.
5.05 Reasonable Efforts to Satisfy Conditions. Seller shall use its
reasonable efforts to cause the Purchaser's conditions to closing set forth in
Article VIII to be satisfied to the extent that the satisfaction of such
conditions is in the control of Seller.
5.06 Benefit Plans. Seller shall satisfy all of its obligations under
the Plans.
5.07 Environmental Permits. Seller shall cooperate with Purchaser to
assist Purchaser in identifying all licenses, authorizations, permissions or
other permits required by or pursuant to Environmental Laws (collectively,
"Environmental Permits") necessary to operate the Business as of the Closing
Date and will, where permissible, transfer existing Environmental Permits of
Seller to Purchaser or, where permissible, assist in obtaining new Environmental
Permits for Purchaser.
5.08 No Solicitation. Provided that this Agreement has not been
terminated in accordance with the terms hereof, prior to the Closing, Seller
shall not, and shall not permit any of its affiliates, officers, directors,
employees or agents to, directly or indirectly, solicit, participate in or
initiate discussions or negotiations with, or provide any information to, any
person (other than Purchaser) concerning any sale of assets or other transaction
involving transfer of the Business. In the event that Seller or any of its
affiliates, officers, directors or agents receives any bona fide proposal with
respect to any such transaction, Seller shall provide Purchaser with prompt
notice of the terms of such proposal.
5.09 Noncompete. For a period commencing on the Closing Date and ending
on the date on which Seller ceases to own any shares of capital stock of
Purchaser, Seller shall not and shall cause its affiliates not to (i) cause,
induce or encourage any material customer, supplier, manufacturer or licensor of
the Business at the time of Closing, or any other person that has a business
relationship with Seller which is material to the Business at the time of
Closing, to terminate or change any such relationship in a manner which would be
adverse to the Business, or (ii) conduct, participate or engage, directly or
indirectly, in a business which offers aircraft parts for sale throughout the
United States of America. It is understood and agreed that the foregoing shall
not prevent Seller from offering aircraft parts for sale in connection with the
operation of aircraft maintenance facilities, including sales of parts that are
not installed at such facilities, provided that Seller and its affiliates
neither engage in advertising nor employ salesmen to promote such sales of
aircraft parts and that such sales in the aggregate are not material to the
Business as it exists on the Closing Date. If Seller sells any or all of its
fixed base
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operations to a party other than Purchaser, Seller shall cause such purchaser to
agree to honor Seller's obligations under this Section 5.09 until the date on
which Seller ceases to own any shares of capital stock of Purchaser.
5.10 The New Piper Aircraft, Inc.. Subject to Purchaser's continued
compliance with its covenant set forth in Section 6.05, Seller agrees that,
until the date on which Seller ceases to own any shares of the capital stock of
Purchaser:
(a) although Seller is under no obligation to continue or
renew the Piper Distribution Agreement, Seller shall not, without Purchaser's
prior written consent, modify, amend or renew such agreement if such,
modification, amendment or renewal would be on terms less favorable to Purchaser
or to the Business than the terms which are then in effect; and
(b) if Seller determines to discontinue its Piper
distributorship business, Seller shall enter into good faith negotiations with
Purchaser for the sale of such business before it negotiates with any other
party.
5.11 Cessna Aircraft Company. Subject to Purchaser's continued
compliance with its covenant set forth in Section 6.05, Seller agrees that,
until the date on which Seller ceases to own any shares of the capital stock of
Purchaser:
(a) although Seller is under no obligation to continue or
renew its distributorship arrangement with Cessna, at any xxxx Xxxxxx retains
its distributorship relationship with Cessna, Seller shall serve as the
representative for the Business with Cessna, and will continue to allow
Purchaser to purchase Cessna products from Seller in a manner consistent with
current purchases by the Business of such products from Seller, and Seller shall
not, without Purchaser's prior written consent, modify, amend or renew its
agreement with Cessna if such modification, amendment or renewal would be on
terms less favorable to Purchaser or to the Business than the terms which are
then in effect; and
(b) if Seller determines to discontinue its Cessna
distributorship business, Seller shall enter into good faith negotiations with
Purchaser for the sale of such business before it negotiates with any other
party.
5.12 Sale of the Memphis FBO. Seller agrees that, until the date on
which Seller ceases to own any shares of the capital stock of Purchaser:
(a) if Seller determines to sell the Memphis FBO, other than
in connection with the sale of all or substantially all of the fixed based
operations owned by Seller and its affiliates, Seller shall enter into good
faith negotiations with Purchaser for the sale of such facility before it
negotiates with any other party; and
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(b) if the Memphis FBO is sold to a party other than
Purchaser, Seller shall cause such purchaser to honor Seller's obligations under
Sections 5.10 and 5.11 hereto.
5.13 FAA Repair Station Authority. Until such time as the Federal
Aviation Administration issues repair station authority to Purchaser, Seller
shall maintain its current repair station authority with respect to the Business
and shall permit Purchaser to operate under such repair station authority.
5.14 Employee Related Obligations. Seller shall satisfy all employee
related costs and obligations of Seller, including the payment of bonuses to
employees for the year ended December 31, 1996 if earned or awarded pursuant to
Seller's existing bonus plans.
5.15 The Purchased Aircraft. Purchaser shall be permitted to conduct a
pre-Closing inspection of the Purchased Aircraft.
5.16 The New Piper Aircraft, Inc. and Cessna Aircraft Company. Seller
shall comply with all terms and obligations set forth in the Piper Distribution
Agreement and in Seller's distributorship agreement with Cessna, including, but
not limited to, obligations concerning the use of forms, compliance with
policies, procedures and manuals, timely payment, maintenance of adequate
inventory and insurance coverage. Seller further agrees to indemnify Purchaser
from and against any and all liabilities, losses, costs, expenses, damages,
penalties, assessments, demands, claims and causes of action incurred by
Purchaser which arise from a failure of Seller to comply with the terms of this
Section 5.16, unless such failure is caused by the failure of Purchaser to
comply with the terms of Section 6.05 of this Agreement. The provisions of this
Section 5.16 shall terminate at such time as Seller ceases to own any shares of
the capital stock of Purchaser, provided that such termination shall not affect
any claims by Purchaser for indemnification in respect of any period prior to
such termination.
5.17 Receivables. All duly presented receivables from Seller or its
affiliates to the Business arising prior to the Closing and transferred to
Purchaser pursuant hereto shall be paid in the ordinary course of business, but
in any event within 30 days after the Closing.
ARTICLE VI
COVENANTS OF PURCHASER
6.01 Retention of Records. Purchaser shall retain all Records which
purchaser receives from Seller for the entire period required by the Internal
Revenue Service, the Department of Labor, the Federal Aviation Administration or
any other Governmental Authority for which Seller is required to retain records.
After the Closing, Seller and its representatives shall have reasonable access
to all such Records during normal business hours. In addition, Purchaser shall,
upon reasonable request of Seller, furnish to Seller, without charge, copies of
any such Records.
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6.02 Filings; Notices. Purchaser shall make prior to the Closing all
material filings, give all material notices and otherwise comply in all material
respects with all governmental laws, rules and regulations which are required on
the part of Purchaser in order to enter into and perform this Agreement and the
other agreements, documents and instruments contemplated hereby to which
Purchaser is a party.
6.03 Reasonable Efforts to Satisfy Conditions. Purchaser shall use its
reasonable efforts to cause the Seller's conditions to closing set forth in
Article IX to be satisfied to the extent that the satisfaction of such
conditions is in the control of Purchaser.
6.04 Financing. Purchaser shall have at the Closing equity and/or debt
financing in an amount sufficient to pay the Purchase Price and consummate the
transactions contemplated by this Agreement and the other agreements, documents
and instruments contemplated hereby.
6.05 The New Piper Aircraft, Inc. and Cessna Aircraft Company.
Purchaser shall comply with all terms and obligations of general application or
applicable to the distribution of parts set forth in the Piper Distribution
Agreement and in Seller's distributorship agreement with Cessna as if Purchaser
were a named party thereto, including, but not limited to, obligations
concerning the use of forms, compliance with policies, procedures and manuals,
timely payment, maintenance of adequate inventory and insurance coverage.
Purchaser further agrees to indemnify Seller from and against any and all
liabilities, losses, costs, expenses, damages, penalties, assessments, demands,
claims and causes of action incurred by Seller which arise from a failure of
Purchaser to comply with the terms of this Section 6.05, unless such failure is
caused by the failure of Seller to comply with the terms of Section 5.16 of this
Agreement. Purchaser further agrees that, if the Business is sold to a party
other than Seller, Purchaser shall cause such purchaser to agree to honor
Purchaser's obligations under this Section 6.05. The provisions of this Section
6.05 shall terminate at such time as Seller ceases to own any shares of the
capital stock of Purchaser, provided that such termination shall not affect any
claims by Seller for indemnification in respect of the period prior to such
termination.
ARTICLE VII
ADDITIONAL AGREEMENTS OF SELLER AND PURCHASER
7.01 Confidentiality. Prior to the Closing, Seller and Purchaser shall
keep this Agreement and its terms confidential, except as set forth in Section
7.02. In the event that the transactions contemplated by this Agreement are not
consummated for any reason whatsoever, the parties hereto agree not to disclose
or use any confidential information they may have concerning the business or
affairs of the other party, except for information which is required by law to
be disclosed. Confidential information includes, but is not limited to, customer
lists and files, prices and costs, business and financial records, information
relating to personnel, contracts, liabilities and litigation. Should the
transactions contemplated hereby not be consummated, upon the request of either
party to this Agreement, the other party shall return
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to the requesting party all confidential information received from such party in
connection with this transaction. Notwithstanding the foregoing, the parties may
disclose the terms of this Agreement and the transactions contemplated hereby
and the information concerning the Business and the Assets to their respective
affiliates, employees, attorneys and accountants, and Purchaser may also
disclose such information to existing and prospective lenders, to the extent
reasonably necessary to consummate the transactions contemplated hereby and upon
advising them of the confidential nature of such information.
7.02 Public Announcements. Prior to the Closing, each of Seller and
Purchaser agrees to use its reasonable efforts to consult with the other before
issuing any press releases or otherwise making any public statements with
respect to the transactions contemplated by this Agreement and, except as Seller
or Purchaser or their respective affiliates may deem necessary in order to
comply with legal or stock exchange requirements, shall not issue any such press
release, make any such public statement or file any report prior to the other
party approving such press release, public statement or report.
7.03 Certain Employee Matters. Purchaser shall offer employment to the
active employees of Seller listed on Schedule 3.17 hereto, other than those
employees who are on disability or other leave of absence as of the Closing (the
"Employees"), and Seller will use reasonable efforts to cause the Employees to
make their employment services available to Purchaser. Employment will be
offered to the Employees at the same base salary or hourly wage rate at which
Seller employed such Employees as of the Closing. Purchaser agrees to honor
accrued vacation time accumulated and vested by the Employees and to determine
eligibility for benefits of the Employees and their dependents under Purchaser's
health insurance without reference to "pre-existing condition" exceptions.
Seller shall cooperate with Purchaser to ensure that Purchaser is provided after
the Closing Date with all relevant information necessary for reporting employee
withholding taxes and handling other employee matters. Purchaser and Seller
intend that, notwithstanding anything in this Section 7.03, the Employees shall
not be third party beneficiaries of this Agreement.
Purchaser shall establish, within 30 days after the Closing Date, a
401(k) plan which is intended to qualify under Section 401 of the Code and shall
take all actions required to so qualify such plan (including preservation of
Section 411(d)(6) of the Code protected benefits). Seller shall cause all
contributions and other allocations with respect to the period prior to the
Closing Date to be paid to the individual accounts of the Employees under its
401(k) plan prior to the last day of the month following the Closing Date (the
"Valuation Date"). Seller shall cause the value of the individual accounts
(vested and unvested) of Employees under its 401(k) plan as of the Valuation
Date to be transferred, in cash, outstanding plan loans to Employees or other
property acceptable to Purchaser, to Purchaser's 401(k) plan within ten business
days thereafter, as such value may be equitably adjusted for earnings, losses
and distributions with respect to such accounts from the Valuation Date to the
actual date of transfer. Purchaser shall preserve all rights, benefits and
features contained in Seller's 401(k) plan. If any Employee terminates
employment with Purchaser and thereby forfeits any portion of his or her
individual
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retirement account attributable to the amount transferred from Seller's 401(k)
plan, Purchaser shall pay in cash to Seller an amount equal to the value of such
forfeited portion as of the end of the plan year in which such forfeiture
occurs.
7.04 Bulk Transfer Laws. Prior to the Closing, Seller and Purchaser
will comply in all material respects with any applicable bulk transfer laws.
7.05 Non Solicitation of Employees. For a period of three years from
the date of this Agreement, neither Seller nor Purchaser shall, nor shall it
allow its affiliates to, cause, induce or encourage any employees of the other,
whether employed in the Business or not, to become employees of itself. This
Agreement shall survive any termination of this Agreement, unless specifically
agreed by mutual written consent of Seller and Purchaser.
ARTICLE VIII
PURCHASER'S CONDITIONS TO CLOSING
Except as may be waived in writing by Purchaser, the obligations of
Purchaser hereunder are subject to the fulfilment at or prior to Closing of each
of the following conditions:
8.01 Representations and Warranties. The representations and warranties
of Seller contained herein and in each of the agreements, documents and
instruments executed pursuant hereto shall have been true and correct in all
material respects as of the date of this Agreement, and shall be true and
correct in all material respects at the Closing Date with the same force and
effect as if such representations and warranties had been made at and as of the
Closing Date.
8.02 Covenants. Seller shall have performed and complied in all
material respects with all agreements, covenants or conditions required by this
Agreement or any of the agreements, documents or instruments executed pursuant
hereto to be performed and complied with by Seller prior to Closing.
8.03 No Material Adverse Change. No material adverse change in the
Assets or the Business shall have occurred after the date of this Agreement and
prior to the Closing; provided, however, that should a material adverse change
in the prospects of the Business occur, Purchaser and Seller shall attempt to
negotiate a mutually acceptable resolution which allows them to complete the
Closing. For purposes of this Section 8.03, Purchaser and Seller acknowledge and
agree that any variance in the revenue, earnings, or results of operations of
the Business from projections thereof provided to or created by Purchaser shall
not in and of itself constitute a material adverse change in the Business.
8.04 Proceedings. No action, proceeding or order by any court or
Governmental Authority shall have been threatened in writing, asserted,
instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated by this Agreement.
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8.05 Delivery of Instruments. Seller shall have executed and delivered
to Purchaser the Xxxx of Sale, the Aircraft Xxxx of Sale, the Assignment and
Assumption Agreement and such other conveyance documents as are required by
Section 1.05.
8.06 Stock Purchase Agreement and Stockholders Agreement. Seller shall
have executed and delivered to Purchaser a stock purchase agreement in
substantially the form of Exhibit D hereto (the "Stock Purchase Agreement") and
a stockholders agreement in substantially the form of Exhibit E hereto (the
"Stockholders Agreement").
8.07 Sublease Agreement. Seller and Purchaser shall have entered into a
sublease agreement relating to the Accessory Shop leasing to Purchaser the
Accessory Shop for a period of six months from the Closing Date, and on a
month-to-month basis for an additional period of six months thereafter, at a
monthly rental of $879.
8.08 Consents. Seller shall have delivered to Purchaser all Required
Consents.
8.09 Xxxxx License Agreement. Seller shall have executed and delivered
to Purchaser a license agreement (the "Xxxxx License Agreement") granting
Purchaser (a) the right for a period commencing on the Closing Date and ending
on the later of (i) the second anniversary of this Agreement or (ii) the date on
which AMR Corporation ceases to own, directly or indirectly, a majority of the
capital stock of AMR Xxxxx, Inc. to use the name "AMR Xxxxx" in conjunction with
the names "Aircraft Parts International" or "API" and (b) the right for a period
commencing on the Closing Date and ending on the date on which Seller ceases to
own any shares of the capital stock of Purchaser to use the name "Xxxxx" in
conjunction with the names "Aircraft Parts International" or "API."
8.10 Parts Purchase Agreement. Seller shall have executed and delivered
to Purchaser a purchase agreement (the "Parts Purchase Agreement"), on terms
mutually acceptable to the parties, pursuant to which Seller shall agree to
purchase goods from Purchaser after the Closing.
8.11 Officer's Certificate. Seller shall have delivered to Purchaser a
certificate executed by an executive officer of Seller dated the Closing Date
confirming the matters set forth in Sections 8.01 and 8.02 and certifying that
the transactions contemplated hereby and the execution, delivery and performance
of this Agreement and the documents, agreements and instruments contemplated
hereby to which Seller is or will be a party have been duly authorized by all
necessary corporate action of Seller.
8.12 The New Piper Aircraft Company, Inc.. Piper shall have consented
to Purchaser acquiring and operating the Business and shall have agreed to
continue to supply parts to the Business under the terms of the Piper
Distribution Agreement.
ARTICLE IX
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SELLER'S CONDITIONS TO CLOSING
9.01 Representations and Warranties. The representations and warranties
of Purchaser contained herein and in each of the agreements, documents and
instruments executed pursuant hereto shall have been true and correct in all
material respects as of the date of this Agreement, and shall be true and
correct in all material respects at the Closing Date with the same force and
effect as if such representations and warranties had been made at and as of the
Closing Date.
9.02 Covenants. Purchaser shall have performed and complied in all
material respects with all agreements, covenants or conditions required by this
Agreement or any of the agreements, documents or instruments executed pursuant
hereto to be performed and complied with by Purchaser prior to Closing.
9.03 Proceedings. No action, proceeding or order by any court or
Governmental Authority shall have been threatened in writing, asserted,
instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated by this Agreement.
9.04 Payment of the Purchase Price. Purchaser shall have delivered to
Seller the Purchase Price.
9.05 Release from Real Property Lease. Seller shall have entered into a
termination and release agreement with the owner of the Leased Facility
terminating Seller's obligations in respect of the lease of the Leased Facility.
9.06 Delivery of Instruments. Purchaser shall have executed and
delivered to Seller the Assignment and Assumption Agreement and such other
assumption documents as are required to be executed and delivered by Purchaser
pursuant to Section 1.06.
9.07 Stock Purchase Agreement and Stockholders Agreement. Purchaser
shall have executed and delivered to Seller the Stock Purchase Agreement and the
Stockholders Agreement.
9.08 Xxxxx License Agreement. Purchaser shall have executed and
delivered to Seller the AMR Xxxxx License Agreement.
9.09 Parts Purchase Agreement. Purchaser shall have executed and
delivered to Seller the Parts Purchase Agreement.
9.10 Exemption Certificates. Purchaser shall have provided Seller with
a Tennessee exemption certificate stating that Purchaser is purchasing the
Inventories for resale, and such other exemption certificates as Seller may
reasonably request.
9.11 Officer's Certificate. Purchaser shall have delivered to Seller a
certificate executed by an executive officer of Purchaser dated the Closing Date
confirming the matters set
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forth in Sections 9.01 and 9.02 and certifying that the transactions
contemplated hereby and the execution, delivery and performance of this
Agreement and the documents, agreements, and instruments contemplated hereby to
which Purchaser is or will be a party have been duly authorized by all necessary
corporate action of Purchaser.
ARTICLE X
INDEMNIFICATION
10.01 Seller's Indemnification Obligations. Subject to the terms and
conditions of this Article X, Seller agrees to indemnify, defend and hold
harmless Purchaser and its officers, directors, stockholders, agents, attorneys
and affiliates (each a "Purchaser Indemnified Party") from and against any and
all Damages (as hereinafter defined) asserted against or incurred by such
Purchaser Indemnified Party by reason of or resulting from:
(a) a breach by Seller of any representation, warranty,
covenant, obligation or agreement contained herein or in any agreement, document
or instrument executed pursuant hereto;
(b) any product liability or breach of warranty claims
relating to products sold by Seller prior to the Closing, and all general
liability claims arising out of or relating to the Business prior to the
Closing, whether any such claims are asserted prior to or after the Closing;
(c) any obligation or liability under or related to any
employee benefit plans of Seller;
(d) any and all liabilities and obligations of Seller not
expressly assumed by Purchaser pursuant to this Agreement or the agreements,
documents and instruments executed pursuant hereto; and
(e) any and all Environmental Cost and Liabilities based upon,
attributable to, arising out of or resulting from Seller's operation of the
Leased Facility, the Accessory Shop or the Business to the extent relating to
operations, activities or events that occurred prior to the Closing with respect
to the Leased Facility and the Business, and at any time, other than during the
post-Closing period during which Purchaser is subleasing the Accessory Shop,
with respect to the Accessory Shop.
For purposes of this Article X, "Damages" means any and all
liabilities, losses, costs, expenses, damages, penalties, assessments, demands,
claims and causes of action, including, without limitation, reasonable
attorneys' fees and expenses and court costs, incurred by any Purchaser
Indemnified Party.
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10.02 Purchaser's Indemnification Obligations. Subject to the terms and
conditions of this Article X, Purchaser agrees to indemnify, defend and hold
harmless Seller and its officers, directors, stockholders, agents, attorneys and
affiliates (each a "Seller Indemnified Party") from and against any and all
Damages asserted against or incurred by such Seller Indemnified Party by reason
of or resulting from:
(a) a breach by Purchaser of any representation, warranty,
covenant, obligation or agreement contained herein or in any agreement, document
or instrument executed pursuant hereto;
(b) the failure of Purchaser to pay, perform and discharge
when due any Assumed Lease or Assumed Contract; and
(c) any other claims arising out of or relating to the
operation of the Business or the ownership of the Assets after the Closing.
10.03 Conditions to Indemnification. The respective obligations and
liabilities of the indemnifying parties to the parties to be indemnified under
Sections 10.01 and 10.02 hereof with respect to claims arising from the
assertion of liability by third parties shall be subject to the following terms
and conditions:
(a) Promptly after receipt of notice of commencement of any
action evidenced by service of process or other legal pleading, or within 30
days (or such shorter period as may be necessary in order that the rights of the
indemnifying party will not be prejudiced) after the assertion in writing of any
other claim by a third party, the party to be indemnified shall give the
indemnifying party written notice thereof together with a copy of such claim,
process or other legal pleading, and the indemnifying party shall have the right
to undertake the defense thereof by representatives of its own choosing and at
its own expense; provided, however, that the party to be indemnified may
participate in the defense with counsel of its own choice at its own expense.
(b) If the indemnifying party, by the 30th day after its
receipt of notice of any such claim (or, if earlier, by the fifth day preceding
the day on which an answer or other pleading must be served in order to prevent
judgment by default in favor of the person asserting such claim), does not
notify the party to be indemnified that it has elected to defend against such
claim, the party to be indemnified will have the right to undertake the defense,
compromise or settlement of such claim on behalf of and for the account and risk
of the indemnifying party and at the indemnifying party's expense, subject to
the right of the indemnifying party to assume the defense of such claim at any
time prior to settlement, compromise or final determination thereof. The party
to be indemnified will notify the indemnifying party of any proposed settlement
no later than three days before such settlement is effected.
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(c) Anything in this Section 10.03 to the contrary
notwithstanding, the indemnifying party shall not settle any claim without the
consent of the party to be indemnified unless such settlement involves only the
payment of money and the claimant provides to the party to be indemnified, in
form and substance satisfactory to that party, a release from all liability in
respect of such claim. If the settlement of the claim involves more than the
payment of money, the indemnifying party shall not settle the claim without the
prior written consent of the party to be indemnified.
(d) The party to be indemnified and the indemnifying party
will each cooperate with all reasonable requests of the other.
(e) The failure of a party seeking indemnification hereunder
to provide any notice required hereunder shall not relieve the indemnifying
party from any liability it would otherwise have hereunder, except to the extent
that the indemnifying party has been materially prejudiced thereby.
10.04 Limitation of Claims.
(a) No claim for indemnification may be made by a Purchaser
Indemnified Party or a Seller Indemnified Party pursuant to this Article X for
Damages relating to breaches of any of the representations and warranties
contained herein unless and until such time as all claims of parties seeking
indemnification against a party hereunder exceed $50,000 in the aggregate, at
which time any and all claims of such party for indemnification for such Damages
in excess of such amount may be asserted.
(b) No claim for indemnification for Damages relating to
breaches of any of the representations or warranties contained herein may be
made by Purchaser or Seller pursuant to this Article X after the first
anniversary of the Closing Date and no claim for indemnification for Damages
relating to matters other then breaches of any representations or warranties may
be made by Purchaser or Seller pursuant to this Article X after the fifth
anniversary of the Closing Date, provided that the foregoing shall not limit in
any respect the ability of Purchaser or Seller to make any other claim
hereunder, including, without limitation, a claim for breach of any covenant or
agreement contained herein.
10.05 Indemnification for Negligent Indemnity. The indemnification
provided in this Article X shall remain operative and in full force and effect
whether or not negligence on the part of the indemnified party is alleged or
proven.
10.06 Reimbursement. If the indemnifying party shall undertake the
defense, compromise or settlement of a claim pursuant to this Article X and it
is later determined that such claim was not a claim for which the indemnifying
party is required to indemnify the indemnified party under this Article X, the
indemnified party shall reimburse the indemnifying
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party for all of the indemnifying parties costs and expenses with respect to
such defense, compromise or settlement, including reasonable attorneys' fees and
expenses.
ARTICLE XI
TERMINATION
11.01 Termination. This Agreement and the transactions contemplated
hereby may be terminated at any time on or before the Closing (except with
respect to (e) below):
(a) by mutual written consent of Seller and Purchaser;
(b) by Purchaser, if there has been a material
misrepresentation or breach of warranty in the representations and warranties of
Seller herein, or if there has been any material failure on the part of Seller
to comply with its obligations hereunder, and such misrepresentation, breach or
failure to comply is not or cannot be cured by March 15, 1997 and has not been
waived;
(c) by Seller, if there has been a material misrepresentation
or breach of warranty in the representations and warranties of Purchaser herein,
or if there has been any material failure on the part of Purchaser to comply
with its obligations hereunder, and such misrepresentation, breach or failure to
comply is not or cannot be cured by March 15, 1997 and has not been waived;
(d) by Purchaser or Seller, if the conditions precedent to
their respective obligations to close the transactions contemplated by this
Agreement have not been satisfied or waived by March 15, 1997, unless such
failure of satisfaction is due to the failure of the terminating party to
perform or observe the covenants, agreements and conditions hereof to be
performed or observed by it prior to the Closing;
(e) by Purchaser or Seller upon written notice of termination
to the other at any time after December 15, 1996, if at or prior to the delivery
of such notice of termination (i) Purchaser shall not have informed Seller that
Purchaser and Industry Publications have entered into a modification of those
certain letter agreements, dated May 4, 1995 and October 17, 1995, between
Seller and Industry Publications which incorporates terms and conditions
satisfactory to Purchaser and (ii) Purchaser shall not have informed Seller that
it waives the applicability of this Section 11.01(e). At such time as Purchaser
informs Seller as contemplated in clause (i) or (ii) above, the right of
termination as provided in this Section 11.01(e) shall cease to be available to
Purchaser or Seller; or
(f) by Purchaser or Seller, if the consummation of the
transactions contemplated hereby would violate any law, non-appealable final
order, decree or judgement of any court or Governmental Authority having
competent jurisdiction.
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11.02 Effect of Termination. No termination of this Agreement, whether
pursuant to Section 11.01 or otherwise, shall affect the right of Purchaser or
Seller, as the case may be, to pursue any and all rights it may have against the
other. Unless specifically agreed by mutual written consent of Seller and
Purchaser, no termination of this Agreement shall affect the obligations of the
parties set forth in Section 7.01 or Section 7.05.
ARTICLE XII
MISCELLANEOUS
12.01 Survival of Representations and Warranties. Purchaser and Seller
agree that the representations and warranties of the parties contained herein
shall continue in full force and effect after the Closing for a period of one
year from the Closing Date, at which time they shall expire.
12.02 Definition of "Seller's Knowledge" and "Material Adverse Effect".
As used herein, any reference made "to the best of Seller's knowledge" means the
actual knowledge of Xxxxxx Xxxxxxxx, Xxxx Xxxxxx, Xxx Xxxxxxxxxx, Xxxx Xxxxxx,
Xxxxx XxXxxxx, Xxxxx Xxxxxx or Xxxx Xxxxxxxxxx, each an officer or employee of
Seller or Aircraft Parts International. As used herein, any reference to
"material adverse effect," "material adverse change" or words of similar
construction on the Assets or Business shall mean a material adverse effect on
the condition (financial or otherwise), revenues, earnings, results of
operations, prospects, properties or liabilities of the Assets or the Business.
12.03 Expenses. Except as agreed in Section 2.02(c) of this Agreement
and with respect to the fees and expenses incurred in the preparation of the
Financial Statements, which shall be divided equally between Seller and
Purchaser, each of the parties hereto shall pay the fees and expenses of its own
counsel, accountants, financial advisors or other experts, and all expenses
incurred by such party incident to the negotiation, preparation, execution,
consummation and performance of this Agreement and the transactions contemplated
hereby, whether or not the transactions contemplated by this Agreement are
consummated.
12.04 Notices. All notices, requests and other communications under
this Agreement shall be in writing (including a writing delivered by facsimile
transmission) and shall be deemed to have been duly given if delivered
personally, or sent by either certified or registered mail, return receipt
requested, postage prepaid, by overnight courier guaranteeing next day delivery,
or by telecopier (with telephonic or machine confirmation by the sender),
addressed as follows (or to such other address, including facsimile number, as
shall have been designated by the recipient in writing):
(a) If to Seller: AMR Xxxxx, Inc.
0000 Xxxx Xxxxxx Xxxx.
MD 4239
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Xxxx Xxxxx, Xxxxx 00000
Attn: President
Telecopy: (000) 000-0000
With a required copy to: AMR Services Corporation
0000 Xxxx Xxxxxx Xxxx.
MD 4240
Xxxx Xxxxx, Xxxxx 00000
Attn: General Counsel
Telecopy: (000) 000-0000
(b) If to Purchaser: Aircraft Parts International Xxxxx, Inc.
0000 Xxxxxxxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000-0000
Attn: President and Chief Operating Officer
Telecopy: (000) 000-0000
With a required copy, prior First Aviation Services, Inc.
to May 1, 1997, to: Xxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: President and Chief Operating Officer
Telecopy: (000) 000-0000
and, after May 1, 1997: First Aviation Services, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx
Attn: President
and, prior to May 1, 1997: First Equity Development, Inc.
Xxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: President
Telecopy: (000) 000-0000
and, after May 1, 1997: First Equity Development, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx
Attn: President
With a required copy to: Weil, Gotshal & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx X. Xxxxx, Esq.
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Telecopy: (000) 000-0000
All such notices, requests and other communications shall be deemed to have been
received on the date of delivery thereof (if delivered by hand), on the third
Business Day after the mailing thereof (if mailed), on the next day after the
sending thereof (if by overnight courier) and when receipt is confirmed as
provided above (if telecopied).
12.05 Waivers, Amendments and Remedies. No amendment or waiver of any
provision of this Agreement, nor consent to any departure therefrom, shall be
effective unless the same shall be in writing and signed by an officer of each
party hereto, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No failure on
the part of a party hereto to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies provided in this Agreement are
cumulative and, unless otherwise expressly provided herein, not exclusive of any
remedies provided by law.
12.06 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
Neither party hereto shall assign its rights hereunder or any interest herein
without the prior written consent of the other party hereto, except that
Purchaser may assign its rights hereunder to any wholly owned subsidiary, parent
company or wholly owned subsidiary of a parent company.
12.07 Exhibits and Schedules. The Exhibits and Schedules attached
hereto or referred to herein are incorporated herein and made a part hereof for
all purposes. As used herein, the expression "this Agreement" means this
document and such Exhibits and Schedules.
12.08 Governing Law. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HERETO, SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO ITS PRINCIPLES OF CONFLICT OF LAWS.
12.09 Captions. The captions, headings and arrangements used in this
Agreement are for convenience only and do not in any way affect, limit or
amplify the provisions hereof.
12.10 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable; this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or its severance from this
Agreement.
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12.11 Entirety. This Agreement contains the entire agreement and
understanding between the parties with respect to the matters addressed herein
and supersedes all prior representations, inducements, promises or agreements,
oral or otherwise, which are not embodied herein.
12.12 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original for all purposes and all
of which shall be deemed collectively to be one agreement.
12.13 Attorneys' Fees. If any action or proceeding is commenced by any
party hereto for the purpose of enforcing any provision of this Agreement, the
prevailing party to such action or proceeding may receive as part of any award,
judgment, decision or other resolution of such action or proceeding its costs
and attorneys' fees as determined by the person making such award, judgment,
decision or resolution. Should any claim hereunder be settled short of the
commencement of any such action or proceeding, including arbitration, the
parties to such settlement shall be entitled to include as part of the damages
alleged to have been incurred reasonable costs of attorneys or other
professionals in investigation or counseling on such claim.
12.14 Third Party Beneficiaries. Nothing contained herein, express or
implied, is intended to confer upon any person other than the parties hereto and
their successors in interest and permitted assigns any rights or remedies under
or by reason of this Agreement, except as otherwise expressly provided in this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute and deliver this Agreement as of the date
first written above.
AIRCRAFT PARTS INTERNATIONAL
XXXXX, INC.
By: /s/ XXXXX XXXXXXXXX
-------------------------------
Name: Xxxxx Xxxxxxxxx
Title: CEO and Director
AMR XXXXX, INC.
By: /s/ XXXXXX X. XXXXXXXX
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
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Exhibit E to
Asset Purchase Agreement
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of _______,
1996, is made by and among Aircraft Parts International Xxxxx, Inc., a Delaware
corporation (the "Company"), First Aviation Services Inc., a Delaware
corporation ("Parent"), and AMR Xxxxx, Inc., a Delaware corporation ("Xxxxx").
W I T N E S S E T H
WHEREAS, the Company is a newly formed corporation all of the
outstanding capital stock of which is owned by Parent; and
WHEREAS, Xxxxx has agreed to purchase 11,000 shares (the "Preferred
Shares") of the Company's Class A Convertible Preferred Stock, $ 0.001 par value
(the "Class A Preferred Stock"), which are convertible into 11,000 shares of the
Company's Class A Common Stock, $0.001 par value ("Common Stock"), pursuant to
the terms of that certain Stock Purchase Agreement, dated as of _______, 1996
(the "Stock Purchase Agreement"), between the Company and Xxxxx (the Preferred
Shares and shares of Common Stock into which the Preferred Shares are
convertible being herein referred to as the "Shares"); and
WHEREAS, Xxxxx is willing to purchase the Preferred Shares pursuant to
the Stock Purchase Agreement if the Company and Parent execute and deliver this
Agreement; and
WHEREAS, as an inducement to Xxxxx to purchase the Preferred Shares,
the Company and Parent desire to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
DISPOSITION OF SHARES
1.01 Restriction on Disposition by Xxxxx. During the Restricted Period
(as hereinafter defined), Xxxxx shall not sell, assign, transfer, give,
encumber, pledge or in any way dispose of any Shares without the prior written
consent of the Company, except (a) to an individual, partnership, corporation or
other entity which, directly or indirectly, controls, is controlled by or is
under common control with Xxxxx and that agrees to be bound by the terms of this
Agreement, or (b) as otherwise provided in this Agreement. Subject to the terms
of this Agreement, Xxxxx shall be
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entitled to exercise all rights of ownership of the Shares. As used herein, the
Restricted Period shall begin on the date of this Agreement and continue for
three years from the date hereof; provided that the expiration of the Restricted
Period shall be extended if the sale by Xxxxx of the Shares would in the
reasonable opinion of the Company have a material adverse effect on the business
of the Company until such time as such sale of Shares by Xxxxx would not have a
material adverse effect on such business, for up to two additional years;
provided, however, that the resulting impact of the payment for the Shares on
the cash flow and balance sheet of the Company and otherwise on the financial
condition of the Company, assuming the exercise of the Put Option (as
hereinafter defined) promptly following the expiration of the Restricted Period,
shall not be considered to have a material adverse effect on the business of the
Company.
1.02 Right of First Refusal.
(a) After the expiration of the Restricted Period and provided
that Xxxxx at the time retains its Put Option set forth in Article III, if Xxxxx
shall desire to sell or otherwise dispose of all or part of the Shares pursuant
to a bona fide offer from any third party (a "Third Party Offer"), it shall give
the Company and Parent written notice (the "Notice") of such intention. The
Notice shall include an offer (the "Offer") to sell such Shares to the Company
upon the terms and conditions described below. The Notice shall also include a
copy of the written Third Party Offer stating its terms and conditions,
including the number and price per share of the Shares to be purchased, the
method of payment and the proposed closing date (which shall in no event be
sooner than the end of the 30-day period described in Subsection 1.02(b)).
(b) The Company shall have 30 days from the date it receives
the Notice to accept or reject the Offer in writing. If the Company accepts the
Offer, the acceptance shall set forth the arrangements for closing, which shall
occur no later than the date proposed by the Third Party Offer. The Company, or
a third party designated by the Company, shall have the right to purchase all of
the Shares to be transferred for the purchase price set forth in the Third Party
Offer (or a sum of money equal in value to the total consideration to be paid
thereunder). If a portion of the consideration consists of property other than
cash, in determining the value of the total consideration, such property shall
be given its fair market value, as determined in accordance with the procedures
for determining fair market value set forth in Section 3.03(b), as of the time
the Company exercises its right to purchase such Shares.
(c) Upon the expiration of the 30-day period, or upon the
earlier receipt of rejection of the Offer in writing by the Company, Xxxxx shall
be released from its obligations under this Agreement as to the Shares subject
to the Offer. Xxxxx will have 90 days to sell the Shares pursuant to the Third
Party Offer. If Xxxxx does not sell such securities within such 90 day period,
it shall not thereafter sell such Shares without first complying with the
provisions of this Section 1.02. Xxxxx shall remain subject to this Agreement to
the extent it retains any of the Shares, including those Shares subject to the
Offer.
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ARTICLE II
CO-SALE RIGHTS
2.01 Restriction on Disposition by Parent. During the term of this
Agreement, Parent shall not sell, assign, transfer, give, encumber, pledge or in
any way dispose of any shares of the capital stock of the Company ("Capital
Stock") owned by it, except (a) to an individual, partnership, corporation or
other entity which, directly or indirectly, controls, is controlled by or is
under common control with Parent and that agrees to be bound by the terms of
this Agreement or (b) as provided in this Article II; provided, however, that
none of the provisions of this Article II shall apply to any sale by Parent of
shares of Capital Stock in an underwritten public offering, so long as Xxxxx has
had an opportunity to participate in such underwritten public offering pursuant
to the registration rights set forth in Article IV of this Agreement. Any
purported sale, assignment or transfer in violation of this Article II shall be
void and ineffectual.
2.02 Co-Sale Right.
(a) If at any time Parent intends to sell, assign or transfer
any shares of Capital Stock to any third party, unless the procedures set forth
in Section 2.04 are complied with, the transferee of such shares of Capital
Stock must first agree to be bound by the terms and conditions of this Agreement
and Parent shall give Xxxxx written notice (the "Co-Sale Notice") of such
intention to sell, assign or transfer shares of Capital Stock. The Co-Sale
Notice shall include (i) a statement of Parent's bona fide intention to sell,
assign or transfer shares of Capital Stock; (ii) the name and address of the
prospective transferee (the "Buyer"); (iii) the number of shares of Capital
Stock to be sold or transferred; (iv) the terms and conditions of the
contemplated sale or transfer; (v) the purchase price in cash that the Buyer
will pay for such shares of Capital Stock; (vi) the expected closing date of the
transaction; and (vii) such other information as Xxxxx may reasonably request to
facilitate its decision as to whether or not to exercise the rights granted by
this Article II.
(b) Xxxxx may elect to participate in the contemplated sale or transfer
by delivering to Parent a written notice (the "Election Notice") within 30 days
after receipt of such Co-Sale Notice setting forth the election of Xxxxx to
exercise its right of co-sale. Xxxxx may elect to sell or transfer in the
contemplated transaction any or all of the Shares. Promptly after receipt of the
Election Notice exercising such right, Parent will request the Buyer to amend
its offer to provide for the Buyer's purchase, upon the same terms and
conditions as those contained in the Co-Sale Notice, of all of the Shares
elected to be sold by Xxxxx (the "Co-Sale Shares"). If the Buyer is unwilling to
amend its offer to purchase all of the Co-Sale Shares in addition to the shares
of Capital Stock described in the related Co-Sale Notice and Parent desires to
proceed with the sale, the total number of shares that such Buyer is willing to
purchase will be allocated between Parent and Xxxxx such that the percentage of
Xxxxx' total Shares to be sold by Xxxxx to Buyer is equal to the percentage
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of Parent's total shares of Capital Stock to be sold by Parent to Buyer. All
Capital Stock sold or transferred by Parent and Xxxxx with respect to a single
Co-Sale Notice will be sold or transferred to the Buyer in a single closing on
the terms described in the Co-Sale Notice, and each such share will receive the
same per share consideration. If the Buyer, for whatever reason, declines to
purchase any shares from Xxxxx, then Parent will not be permitted to sell,
assign or transfer any shares of Capital Stock to such Buyer.
2.03 No Prejudice to Put Option. Nothing contained in this Article II
shall limit, impair or restrain in any way the rights of Xxxxx to exercise the
Put Option (as hereinafter defined).
2.04 Drag Along. If at any time Parent intends to sell, assign or
transfer shares of Capital Stock owned by Parent to an Unaffiliated Third Party
(as hereinafter defined) in a bona fide arm's length transaction, then, upon the
written request of Parent (the "Sale Request") Xxxxx shall be obligated to, and
shall (a) sell, transfer and deliver to such Unaffiliated Third Party the
percentage of Xxxxx' total Shares that is equal to the percentage of the
Parent's total shares of Capital Stock that is being sold by Parent to Buyer at
the same price per share and on the same terms as are applicable to shares being
sold by Parent, and upon request, if stockholder approval of the transaction is
required, Xxxxx will vote the Shares, if permitted to vote, in favor thereof. As
used in this Section 2.04, an Unaffiliated Third Party is a person, corporation,
partnership or other entity that does not own a majority of the capital stock of
or control Parent, that Parent does not own a majority of the Capital Stock of
or control, or that a person, corporation, partnership or other entity which
owns a majority of the capital stock of or controls Parent does not own a
majority of the capital stock of or control.
ARTICLE III
PUT/CALL
3.01 Put Option. The Company hereby grants to Xxxxx an option to sell
to the Company, and the Company is obligated to purchase from Xxxxx under such
option (the "Put Option"), all, but not less than all, of the Shares at the
Option Price (as hereinafter defined). The Put Option may be exercised at any
time after the first to occur of the following (the "Put Option Period"):
(a) the expiration of the Restricted Period;
(b) Parent ceases to directly own or control 51% of the
Capital Stock of the Company;
(c) the sale in one or more related transactions of all or a
material portion of the assets, business or revenue or income generating
operations of the Company or any substantial change in the type of business
conducted by the Company; or
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(d) the failure of the Company or Parent to perform in any
material respect any of its material obligations under this Agreement.
The Put Option shall expire upon the closing of an underwritten public
offering of shares of Common Stock of the Company registered under the
Securities Act of 1933, as amended, other than on Form X-0, X-0 or other limited
purpose form (a "Qualified Public Offering").
3.02 Call Option. Xxxxx hereby grants to the Company an option to
purchase from Xxxxx, and Xxxxx is obligated to sell to the Company under such
option (the "Call Option"), all, but not less than all, of the Shares at the
Option Price. The Call Option may be exercised at any time before the closing of
a Qualified Public Offering.
3.03 Option Price. If Xxxxx exercises the Put Option or the Company
exercises the Call Option, the per share price (the "Option Price") to be paid
to Xxxxx pursuant to this Article III will be equal to the fair market value of
the Shares as determined by an independent investment banking or accounting firm
or any other professional person or firm qualified to determine the fair market
value of shares of common stock (an "Appraiser") that is mutually acceptable to
the Company and Xxxxx; if, however, the parties cannot so agree on an Appraiser
within 10 days after the date Xxxxx or the Company, as the case may be, gives
notice of the exercise of its option, then each of the Company and Xxxxx shall
designate an Appraiser, and such two Appraisers shall agree upon and designate a
third Appraiser, which third Appraiser shall thereupon determine the fair market
value of the shares of Common Stock. Each party shall bear the costs of the
Appraiser designated by it, and if only one Appraiser is necessary, or if a
third Appraiser is necessary, the costs of such Appraisers shall be paid by
Xxxxx upon exercise of the Put Option or by the Company upon exercise of a Call
Option.
In determining the fair market value of the Shares, (a) upon the
exercise of the Call Option by the Company or upon the exercise of the Put
Option by Xxxxx on or after the fifth anniversary of this Agreement, the
Appraiser shall not consider the minority interest represented by or lack of
control exercised by the Shares but shall include all other relevant factors,
including, without limitation, the existence or absence of a public market for
the Shares, and (b) upon the exercise of the Put Option by Xxxxx prior to the
fifth anniversary of this Agreement, the Appraiser shall discount by 20% the
fair market value of the Shares to reflect the minority interest represented by
and lack of control exercised by the Shares.
3.04 Exercise of Options. An option may be exercised by the exercising
party giving written notice to the non-exercising party of the exercising
party's election to exercise the option, which notice shall set forth the date
of the Option Closing (as defined below), which shall be not more than 30 days
after the date of such notice.
3.05 Option Closing. The closing for the purchase and sale of
the Shares upon exercise of the Put Option or the Call Option will take place at
the offices of the Company on the date
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specified in the notice of exercise (the "Option Closing"). At an Option Closing
upon exercise of the Put Option, the Company will deliver to Xxxxx one-twelfth
of the Option Price in cash and a promissory note providing for the payment of
the remainder of the Option Price in eleven equal consecutive monthly
installments of principal commencing one month from the Option Closing with
interest on the outstanding principal payable monthly at the prime rate of
interest as reported by the Wall Street Journal on the date of the Option
Closing plus two percent. Upon final payment of the principal of the promissory
note, Xxxxx will deliver the certificate or certificates evidencing the Shares
being purchased, duly endorsed in blank, and pending such delivery Xxxxx will
hold such certificate or certificates as collateral securing the payment of such
promissory note pursuant to a pledge agreement in customary form to be executed
by Xxxxx and Purchaser upon issuance of such promissory note. At an Option
Closing upon exercise of the Call Option, Xxxxx will deliver the certificate or
certificates evidencing the Shares being purchased, duly endorsed in blank, and
in consideration therefor, the Company will deliver to Xxxxx the Option Price,
which will be payable in cash.
3.06 Certain Remedies. If the Company defaults in its obligation to
purchase the Shares upon exercise of the Put Option or the Call Option, in
addition to any other rights or remedies of Xxxxx, the unpaid portion of the
Option Price shall bear interest at the lesser of (a) 18% per annum or (b) the
highest rate permitted by applicable law. The Company will, upon the request of
Xxxxx, execute and deliver to Xxxxx a promissory note in form and substance
satisfactory to Xxxxx evidencing such obligation to pay the unpaid portion of
the Option Price.
ARTICLE IV
REGISTRATION RIGHTS
4.01 Registration.
(a) If, at any time, the Company proposes to file a
registration statement (on any form other than Form X-0, Xxxx X-0 or other
limited purpose form) relating to any of its Capital Stock or other securities
under the Securities Act of 1933, as amended (the "Securities Act"), whether or
not for sale for its own account, the Company will promptly, but in any event no
less than 30 days prior to the initial filing of such registration statement,
deliver written notice of such intention to Xxxxx setting forth the type of
securities proposed to be registered, the intended method of disposition, the
maximum proposed offering price, commissions and discounts in connection
therewith and other relevant information. Such notice must indicate that Xxxxx
has piggyback registration rights pursuant to Section 4.01(a) of this Agreement.
If Xxxxx so requests within 20 days after such notification, the Company hereby
agrees to include in such registration statement the Shares requested to be so
included and to use its reasonable efforts to register such Shares so that such
Shares may be sold at such times and in such manner as Xxxxx shall determine. If
the proposed registration by the Company is, in whole or in part, an
underwritten public offering of securities of the Company, any request pursuant
to this Section 4.01(a) to register may specify that
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the Shares be included in the underwriting (i) on the same terms and conditions
as the shares of Capital Stock, if any, otherwise being sold through
underwriters under such registration, or (ii) on terms and conditions comparable
to those normally applicable to offerings of common stock in reasonably similar
circumstances in the event that no shares of Common Stock, other than the
Shares, are being sold through underwriters under such registration.
Notwithstanding any of the foregoing, the Company shall have the right, for any
reason and in its sole discretion, to postpone or cancel any proposed
registration of its Capital Stock or other securities of which the Company has
previously given Xxxxx notice pursuant to this Section 4.01(a).
If (i) a registration pursuant to this Section 4.01(a)
involves an underwritten offering of Common Stock, whether or not for sale by
the Company, to be distributed on a firm commitment basis by or through one or
more underwriters of recognized standing upon underwriting terms that are
typical for such a transaction and (ii) the managing underwriter of such
underwritten offering informs the Company and Xxxxx by letter of its reasonable
belief that the effect of including all or part of the Shares so requested to be
included in the registration statement will materially adversely affect the sale
of the shares of Common Stock proposed to be sold by the Company and
shareholders of the Company (other than management) having contractual
registration rights, then the number of Shares that Xxxxx may have included in
such registration shall be reduced (and the number of shares of Common Stock to
be sold by other selling shareholders shall also be reduced) to a number
determined by multiplying (x) the total number of shares held by all selling
shareholders having contractual registration rights (including Xxxxx) which the
managing underwriter is willing to have included in such registration, times (y)
a fraction, the numerator of which is the number of Shares which Xxxxx (or such
other selling shareholder, as the case may be) requested to be included in such
registration statement and the denominator of which is the number of all shares
(including the Shares) which all the selling shareholders having contractual
registration rights (other than management) have requested to be included in
such registration.
(b) Upon the request of Xxxxx at any time after the expiration of the
Restricted Period but upon not more than one occasion, the Company shall
promptly file and use its reasonable efforts to cause to become effective an
appropriate registration statement under the Securities Act covering such number
of Shares as Xxxxx shall request and to register the sale of such Shares so that
such Shares may be sold at such times and in such manner as Xxxxx shall
determine; provided, however, that if the Company has not previously closed a
Qualified Public Offering, the Company may elect to consider such demand an
exercise by Xxxxx of the Put Option for such Shares pursuant to Article III
hereof, in which case the provisions of such Article III shall apply and the
provisions of this Article IV shall not apply. Registrations under this Section
4.01(b) shall be on such appropriate registration form of the Securities and
Exchange Commission (the "Commission") (i) as shall be selected by Xxxxx and
(ii) as shall permit the disposition of such Shares in accordance with the
method or methods of disposition desired by Xxxxx. The Company agrees to include
in any such registration statement all information which Xxxxx shall reasonably
request. The Company may register other shares of Capital Stock of the Company
pursuant to such registration statement if the inclusion of such shares would
not materially adversely affect the sale of the Shares proposed to be
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sold by Xxxxx. If the registration pursuant to this Section 4.01(b) involves an
underwritten offering, the underwriter or underwriters shall be selected by the
Company but shall be reasonably acceptable to Xxxxx. If Xxxxx requests
registration of the Shares pursuant to this Section 4.01(b), the Company may
delay the effectuation of such registration for a reasonable period of time, but
not more than 120 days, (x) as is necessary to prepare audited financial
statements of the Company for its most recently completed fiscal year or other
audited financial statements reasonably required to effectuate an acquisition,
financing or other corporate development or (y) if the Company would be required
to divulge in such registration statement the existence of any fact relating to
a proposed acquisition, financing or other material corporate development not
otherwise required to be disclosed.
4.02 Rule 144 Availability. Notwithstanding the foregoing, the Company
will not be obligated to register any Shares as to which counsel reasonably
acceptable to Xxxxx renders an opinion in form and substance reasonably
satisfactory to Xxxxx to the effect that such Shares are freely saleable without
limitation as to volume, manner of sale or otherwise under Rule 144 under the
Securities Act.
4.03 Costs and Expenses. All costs and expenses in connection with the
registration of any Shares under this Agreement or the performance of the
Company's obligations under this Agreement, including without limitation all
registration, filing, stock exchange and NASD fees; all fees and expenses of
complying with securities or blue sky laws; word processing, duplicating and
printing expenses (including such number of any preliminary and final
prospectuses as may be reasonably requested); fees and disbursements of counsel
for the Company, counsel responsible for qualifying the Shares under blue sky
laws and of independent accountants (including the expenses of any special
audits or comfort letters required by or incident to such registration) and
other experts of the Company; all expenses in connection with the transfer and
delivery of the Shares; and all fees and disbursements of underwriters
(excluding any commissions or discounts relating to the Shares) customarily paid
by issuers or sellers of securities, shall be borne by the Company; provided,
however, that the Company shall not be obligated to pay any underwriting
commissions or discounts relating to the Shares.
4.04 Certain Obligations of the Company. In connection with any
registration filings effected under Section 4.01(a) or 4.01(b) hereof, the
Company will:
(a) Promptly prepare, file and use its reasonable efforts to cause to
become effective the registration statement and such amendments and supplements
to the registration statement and the prospectus used in connection therewith as
may be necessary to keep the registration statement effective for such period of
time as Xxxxx so requests to permit disposition of all of such registered Shares
(provided such period does not exceed 180 days) and to comply with the
provisions of the Securities Act and applicable state securities laws with
respect to the disposition of the Shares covered by the registration statement.
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(b) Give Xxxxx, and its counsel and accountants, the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each amendment thereof or
supplement thereto, and give them access to its books and records and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of Xxxxx' counsel, to conduct a reasonable
investigation.
(c) Notify Xxxxx as to the filing of the registration statement, and
each amendment or supplement thereto, and of each prospectus, and each amendment
or supplement thereto.
(d) Notify Xxxxx immediately, and confirm the notice in writing, (i)
when the registration statement becomes effective, (ii) of the issuance by the
Commission of any stop order or of the initiation, or the threatening, of any
proceedings for that purpose, (iii) of the receipt by the Company of any
notification with respect to the suspension of qualification of the Shares for
sale in any jurisdiction or of the initiation, or the threatening, of any
proceedings for that purpose and (iv) of the receipt of any comments, or
requests for additional information, from the Commission or any state regulatory
authority. If the Commission or any state regulatory authority shall enter such
a stop order or order suspending qualification at any time, the Company will
promptly use its reasonable efforts to obtain the lifting of such order.
(e) During any time when a prospectus is required to be delivered under
the Securities Act in connection with the distribution of the Shares, use its
reasonable efforts to comply with all requirements imposed upon it by the
Securities Act and by the rules and regulations promulgated thereunder, so far
as necessary to permit the continuance of sales of or dealings in the Shares
pursuant to a prospectus complying with Section 10(a)(3) of the Securities Act.
If at any time when a prospectus relating to the Shares is required to be
delivered under the Securities Act and any event shall have occurred as a result
of which, in the opinion of counsel for the Company or, with respect to
statements relating to Xxxxx or Xxxxx' method of distributing the Shares,
counsel for Xxxxx, the prospectus relating to the Shares as then amended or
supplemented includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend such prospectus
to comply with the Securities Act and the rules and regulations of the
Commission promulgated thereunder, the Company will promptly notify Xxxxx and
promptly prepare and file with the Commission an appropriate amendment or
supplement in form satisfactory to Xxxxx.
(f) Use its reasonable efforts at or prior to the time the registration
statement becomes effective to register or qualify the Shares for offering and
sale under the securities laws relating to the offering or sale of securities in
such jurisdictions as Xxxxx may reasonably designate and to continue the
qualifications in effect so long as required for purposes of the sale of the
Shares; provided, however, that no such qualification shall be required in any
jurisdiction where, as a result thereof, the Company would be required to
qualify generally to do business as a foreign corporation
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wherein it would not but for the requirements of this subsection (f) be
obligated to be so qualified. In each jurisdiction where such qualification
shall be effected, the Company will, unless Xxxxx agrees that such action is not
at the time necessary or advisable, file and make such statements or reports at
such times as are or may reasonably be required by the laws of such
jurisdiction.
(g) Make generally available to its security holders as soon as
practicable, but not later than the first day of the fifteenth full calendar
month following the effective date of the registration statement, an earnings
statement which shall satisfy the provisions of Section 11(a) of the Securities
Act and any applicable rules and regulations of the Commission thereunder
covering a period of at least twelve months beginning after the effective date
of the registration statement.
(h) Use the Company's reasonable efforts to cause the independent
certified public accountants of the Company to deliver to Xxxxx, and to the
underwriters if the Shares are being sold through underwriters, letters on the
date that the registration statement becomes effective and on the date the
Shares are delivered to the underwriters for sale pursuant to such registration
or, if the Shares are not being sold through underwriters, on the date that the
registration statement becomes effective, stating that they are independent
certified public accountants within the meaning of the Securities Act and the
rules and regulations of the Commission thereunder, and that, in their opinion,
the financial statements and other financial data of the Company included in the
registration statement or prospectus, or any amendment or supplement thereto,
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act, and such other financial matters as the
underwriter, if any, or Xxxxx may reasonably request.
(i) After the effective date of such registration statement, prepare,
and promptly notify Xxxxx of the proposed filing of, and promptly file with the
Commission, each and every amendment or supplement thereto or to any prospectus
forming a part thereof as may be necessary to make statements therein not
misleading in any material respect;
(j) Furnish to Xxxxx, as soon as available, copies of any such
registration statement and each preliminary or final prospectus, or supplement
or amendment prepared pursuant thereto, all in such quantities as Xxxxx may from
time to time reasonably request in order to facilitate the public sale or other
disposition of the Shares;
(k) Use its reasonable efforts to list all Shares covered by the
registration statement on any securities exchange on which any of the securities
of the same class as the Shares is then listed.
(l) Enter into an underwriting agreement in customary form with the
representative of the underwriters if the offering is an underwritten public
offering, make such representations and warranties to any underwriter of the
Shares and to the holders thereof, and use the Company's reasonable efforts to
cause the Company's counsel to render, at the time or times of the letters
referred to in subparagraph (h) above, such opinions to such underwriters, if
any, and to Xxxxx, as such underwriter or Xxxxx may reasonably request.
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(m) Enter into such agreements and take such other actions as Xxxxx
shall reasonably request in order to expedite or facilitate the disposition of
the Shares.
4.05 Hold-Back Agreement. If any of the Shares are covered by a
registration statement filed pursuant to Section 4.01(a) or 4.01(b) hereof,
Xxxxx agrees, upon the request of the Company or the underwriters, if such
registration statement is filed in connection with an underwritten offering, not
to effect any public sale or distribution of securities of the Company,
including a sale pursuant to Section 144 under the Securities Act (except as
part of such registration), without the prior written consent of the Company or
underwriters, as the case may be, during the 30 days prior to, and for such
period of time after it sells the securities under the registration statement
(not to exceed 180 days from the effective date of such registration) as the
Company or underwriters may specify.
4.06 Underwriting Agreement; Furnishing Information. The right of Xxxxx
to participate in an underwritten public offering of the Company's securities
shall be conditioned on Xxxxx entering into an underwriting agreement in
customary form with the underwriter or underwriters for the offering, if any.
Furthermore, it shall be a condition precedent to the obligations of the Company
to take any action pursuant to Article IV of this Agreement that Xxxxx furnish
to the Company such information regarding itself, the Shares held by it and the
intended method of disposition of the Shares as shall be required to effect the
registration of the Shares. In that connection, Xxxxx shall be required to
represent to the Company that all information which is given is both complete
and accurate in all material respects.
4.07 Indemnification.
(a) The Company hereby agrees to indemnify and hold harmless Xxxxx and
each other person, if any, who controls Xxxxx within the meaning of the
Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and each underwriter who participates in the offering of such securities,
against all losses, liabilities, claims, damages and expenses (including, but
not limited to, reasonably attorney's fees and any and all expenses reasonably
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any litigation), joint or several, to which such holder or
controlling person or underwriter may become subject under the Securities Act or
otherwise, insofar as such loss, liability, claim, damage or expense (or actions
in respect thereof whether commenced or threatened) arises out of or is based
upon any untrue statement or alleged untrue statement of any material fact
contained in (i) any registration statement covering the Shares, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or in an
amendment or supplement thereto or (ii) any application or other document or
communication (in this Section 4.04 collectively called "application") executed
by or on behalf of the Company or based upon written information furnished by or
on behalf of the Company filed in any jurisdiction in order to qualify the
Shares under the securities laws thereof or filed with the Commission, or arises
out of or is based upon the omission or alleged omission to state therein a
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material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company shall not be obligated to
indemnify Xxxxx in any such case to the extent that any such loss, liability,
claim, damage or expense arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission relating to Xxxxx or
Xxxxx' method of distributing the Shares that was made in reliance upon, and in
conformity with, written information furnished by Xxxxx specifically for use in
the registration statement, or any amendment or supplement thereto, or any
application, as the case may be. The indemnification provided for in this
subparagraph (a) shall be in addition to any liability which the Company may
otherwise have.
(b) By requesting Shares to be covered by any registration statement in
accordance with this Agreement, Xxxxx agrees to indemnify and hold harmless the
Company, each of its directors and each of its officers who have signed said
registration statement, and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, to the same extent as the
indemnification by the Company provided for in subsection (a) above, but only
with respect to untrue or alleged untrue statements or omissions or alleged
omissions, if any, relating to Xxxxx or Comb's method of distributing the Shares
made in such registration statement, prospectus contained therein, or amendment
or supplement thereto, or in any application, in reliance upon, and in
conformity with, written information furnished by Xxxxx to the Company
specifically for use in the registration statement, in the prospectus contained
therein, or any amendment or supplement thereto, or any application, as the case
may be; provided, however, that the liability of Xxxxx shall not exceed the
amount of net proceeds received by it pursuant to the registration statement
from which the loss, liability, claim, damage or expense arose.
(c) Promptly after the receipt by an indemnified party under
subparagraph (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect hereof is to be made against the
indemnifying party under such subparagraph, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party,
provided, however, if the defendants in any action include both the indemnified
party and the indemnifying party and the indemnified party or parties shall have
been advised by its counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to participate in the defense of such action on behalf
of such indemnified party or parties (it being understood, however, that the
indemnifying party shall not be liable for the fees and expenses of more than
one separate counsel, which, in the case of subparagraph (a) above, shall be
designated by Xxxxx and which, in the case of subparagraph (b)
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above, shall be designated by the Company and which in either case shall be
reasonably acceptable to the other). After notice from the indemnifying party to
such indemnified party of its election so to assume the defense of any such
action, the indemnifying party shall not be liable to such indemnified party
under subparagraph (a) or (b) above for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than the reasonable costs of investigation, unless (i) the indemnified party
shall have employed counsel in accordance with the proviso in the immediately
preceding sentence, (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party within a reasonable time after the notice
of commencement of the action, or (iii) the indemnifying party has authorized
the employment of counsel for the indemnified party at the expense of the
indemnifying party. The indemnification required by this Section 4.04 shall be
made by periodic payments during the course of the investigation or defense, as
and when bills are received or losses, liabilities, claims, damages or expenses
are incurred.
(d) If the indemnification provided for in this Agreement is
unavailable to an indemnified party under subparagraph (a) or (b) above in
respect of any losses, liabilities, claims, damages or expenses (or actions in
respect thereof) referred to therein as a result of a final judicial
determination that such indemnification cannot be enforced, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative fault of
the Company and Xxxxx in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or Xxxxx and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the provisions of this subparagraph (d), Xxxxx shall
not be required to contribute any amount in excess of the amount by which the
net proceeds received by it pursuant to the registration statement from which
such loss, liability, claim, damage or expense arose exceed the amount of any
damages which Xxxxx has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
4.08 Exchange Act Registration. After the filing of an initial public
offering, the Company agrees to maintain registration of its Common Stock under
the Securities Act, to timely file and maintain all required reports and other
filings with the Commission, and to take such action as may from time to time be
necessary to enable Xxxxx to be able to sell the Shares pursuant to Rule 144
promulgated by the Commission under the Securities Act.
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ARTICLE V
PREEMPTIVE RIGHTS TO PURCHASE ADDITIONAL SHARES
5.01 Xxxxx' Preemptive Rights. If at any time the Company proposes to
issue, sell or otherwise transfer to Parent or to any individual, partnership,
corporation of other entity which, directly or indirectly, controls, is
controlled by or is under common control with Parent or the Company any shares
of the Company's Capital Stock, securities convertible into or exchangeable for
shares of Capital Stock or any rights or options to purchase shares of Capital
Stock in a transaction to which the provisions of Section 6(d) of the
Certificate of Designation relating to the Class A Preferred Stock (the
"Certificate of Designation") do not apply (a "Proposed Issuance"), then:
(a) The Company shall give Xxxxx written notice of the
Proposed Issuance at least 30 days prior to the date of the Proposed Issuance.
Such notice shall set forth the terms and conditions of the Proposed Issuance.
Xxxxx shall have the right to subscribe for the purchase from the Company, on
the same terms and conditions as those set forth in the notice, of up to its pro
rata share of the securities to be issued in the Proposed Issuance. Xxxxx' pro
rata share for purposes of this Section 5.01 is the ratio that the number of
shares of Common Stock owned by Xxxxx and into which the shares of Preferred
Stock owned by Xxxxx could be converted immediately prior to the Proposed
Issuance bears to the sum of (i) the total number of shares of Common Stock then
outstanding, plus (ii) the number of shares of Common Stock issuable upon
conversion or exchange of outstanding securities convertible into or
exchangeable for shares of Common Stock and exercise of all outstanding rights
or options to purchase shares of Common Stock.
(b) The right of Xxxxx set forth in this Section 5.01 shall
expire, with respect to a particular Proposed Issuance, 30 days after the notice
described in Subsection 5.01(a) above has been received by Xxxxx. If such right
has expired, the Company will have 90 days to sell the securities not elected to
be purchased by Xxxxx at the same price and upon the terms specified in the
notice described in Subsection 5.01(a). If the Company does not sell such
securities within such 90 day period, it shall not thereafter issue or sell such
securities without first complying with the provisions of this Article V.
ARTICLE VI
VOTING
6.01 Voting. Xxxxx agrees that, during the term of this Agreement, if
pursuant to the Delaware General Corporation Law or other applicable law the
shares of Preferred Stock are entitled to vote on a matter and if such matter
does not affect the rights, privileges or obligations of the Preferred Stock
under this Agreement or the Certificate of Designation, Xxxxx will vote and will
cause its affiliates to vote such shares of Preferred Stock as directed by
Parent.
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ARTICLE VII
COVENANTS OF THE COMPANY
The Company covenants and agrees that from and after the date of this
Agreement the Company will comply with each of the covenants contained in this
Article VII, unless the prior written consent of Xxxxx is first obtained:
7.01 Inspection. At all reasonable times during normal business hours,
the Company will permit representatives of Xxxxx to visit and inspect the
offices, warehouse and other facilities and properties of the Company to examine
books of account, operational records and reports and inventories and to discuss
the Company's business, operations and financial affairs with appropriate
officers or other personnel of the Company. The Company will provide such
representatives with any additional information, opinions, certificates and
documents, in addition to those herein mentioned, relating to the operation of
the Company as may be reasonably requested.
7.02 Accounting and Financial Statements: Reports. The Company will
maintain proper books of records and accounts in which full, true and correct
entries in accordance with generally accepted accounting principles will be made
of all dealings and transactions in relation to its business and activities. The
Company will deliver to Xxxxx the following:
(a) As soon as practicable, but in any event within 90 days,
after the end of the Company's fiscal year, a balance sheet of the Company at
the end of such fiscal year, an income statement, a cash flow statement and a
statement of changes in stockholders' equity of the Company for such fiscal
year, all in accordance with generally accepted accounting principles
consistently applied. Each yearly statement submitted pursuant to this Section
7.02(b) shall be in reasonable detail and certified by a "big six" accounting
firm or such other independent certified public accounting firm as may be
selected by the Company and approved in writing by Xxxxx as fairly representing
the financial condition and results of operations of the Company.
(b) As soon as practicable, but in any event within 30 days,
after the end of each fiscal year, copies of projections of cash flow and the
balance sheet of the Company, all estimated for the then-current fiscal year,
all in accordance with generally accepted accounting principles consistently
applied and representing the best estimate of the Company based on available
information.
(c) As soon as practicable, but in any event within five days,
after filing or mailing, copies of all reports, applications, registration
statements and amendments thereto, prospectuses, proxy materials and other
documents filed by the Company with the Commission or any governmental
department, bureau, commission or agency succeeding to the functions of the
Commission or mailed to the stockholders of the Company, and of all original or
supplemental
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listing applications filed with any national securities exchange on which the
Company's Common Stock may then be listed.
(d) Such other financial data and operational information as
may be reasonably requested by Xxxxx.
7.03 Preservation of Corporate Existence. The Company will preserve and
maintain its corporate existence, rights, franchises and privileges in Delaware
and will qualify and remain qualified as a foreign corporation in every
jurisdiction in which such qualification is necessary in view of the business
and operation of the Company or the ownership of its assets, except where such
failure to qualify would not have a material adverse effect on the Company or
Xxxxx.
7.04 Payment of Taxes and Accounts. The Company will pay or cause to be
paid all taxes, assessments and governmental charges or levies imposed upon it
or upon its income, profits or properties before the same shall become
delinquent, and will pay its accounts; provided, however, that (unless and until
foreclosure, distraint, sale or similar proceedings have been commenced) nothing
herein shall require the Company to pay or cause to be paid any such tax,
assessment, charge, levy or account so long as the validity thereof shall be
contested in good faith by appropriate proceedings and the Company has set aside
on its books and maintained adequate reserves with respect thereto. The Company
and Xxxxx understand and agree that the Company may be considered part of a
consolidated group and nothing herein is intended to preclude the Company from
filing tax returns as part of a consolidated group or from entering into a tax
sharing agreement with other members of such a group.
7.05 Change in Corporate Structure. The Company will not, without the
written consent of Xxxxx, amend or permit to be amended its Certificate of
Incorporation or Bylaws in any manner that would conflict with this Agreement or
adversely affect the rights and privileges of the Preferred Stock.
7.06 AMR Xxxxx-Grand Rapids, Inc. and Bombardier. For so long as and to
the extent that, because of Xxxxx' ownership interest in the Company, the
failure of the Company to comply with any term of either that certain
Non-Competition Agreement, dated as of _____, 1996, between AMR Xxxxx-Grand
Rapids, Inc. and AMR Services Corporation or that certain Non-Compete and
Non-Solicitation Agreement, dated as of February 1, 1995, among AMR Corporation,
Xxxxx, AMR Services Corporation, Learjet Inc., Bombardier Corporation and
Bombardier Inc. would cause Xxxxx or any of its affiliates to be in breach of
either such agreement, the Company agrees to comply with the terms of each such
applicable agreement.
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ARTICLE VIII
MISCELLANEOUS
8.01 Enforcement. No shares of Capital Stock shall be transferred on
the books of the Company and no sale, assignment, transfer, pledge or other
disposition thereof shall be effective unless and until the terms and provisions
of this Agreement are complied with, and in case of the violation of this
Agreement by the attempted transfer of shares of Capital Stock without
compliance with the terms and provisions hereof, such sale, assignment,
transfer, pledge or other disposition shall be invalid and of no effect and the
party who is not attempting to transfer the shares of Capital Stock shall have
the right to compel the party who is attempting to transfer shares of Capital
Stock in violation of this Agreement, and/or any purported transferee, to
transfer and deliver the same in accordance with this Agreement.
8.02 Endorsement on Certificates. The certificates representing the
Shares shall bear a legend indicating the existence of this Agreement and the
restrictions imposed hereby.
8.03 Confidentiality. Xxxxx, on the one hand, and the Company and
Parent, on the other hand, acknowledge that the nature of their affiliation
pursuant to the Stock Purchase Agreement and this Agreement necessarily involves
the sharing of confidential information. Therefore, during the Restricted
Period, Xxxxx and the Company and Parent each agree not to, and to cause their
respective affiliates, employees, attorneys and accountants not to, disclose any
confidential information they may have concerning the business or affairs of the
other party, except for such information which is required by law to be
disclosed. Confidential information includes, but is not limited to, customer
lists and files, prices and costs, business and financial records, information
relating to personnel, contracts, liabilities and litigation; provided, however,
that confidential information shall not include information that is or becomes
publicly available other than as a result of acts in violation of this
Agreement.
8.04 Specific Performance. The parties hereto recognize that the Shares
cannot be readily purchased or sold on the open market and that it is to the
benefit of the Company, Parent and Xxxxx for the terms and provisions hereof to
be carried out; and for those and other reasons, the parties hereto would be
irreparably damaged if this Agreement is not specifically enforced in the event
of a breach hereof. If any controversy concerning the rights or obligations to
purchase or sell any shares of Capital Stock arises, the parties hereto hereby
agree that remedies at law might be inadequate and that, therefore, such rights
and obligations, and this Agreement, shall be enforceable by specific
performance. The remedy of specific performance shall not be an exclusive
remedy, but shall be cumulative of all other rights and remedies of the parties
hereto at law, in equity or under this Agreement.
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8.05 Termination of this Agreement. This Agreement shall continue
until, and shall terminate immediately upon, (a) execution of a written
agreement of termination by the Company, Parent and Xxxxx or (b) any time that
Xxxxx owns less than 51% of the Specified Shares. As used herein, "Specified
Shares" shall mean the total number of Shares purchased by Xxxxx pursuant to the
Stock Purchase Agreement minus all Shares sold, assigned or transferred by Xxxxx
pursuant to Section 2.04.
8.06 Notices. All notices, requests and other communications under this
Agreement shall be in writing (including a writing delivered by facsimile
transmission) and shall be deemed to have been duly given if delivered
personally, or sent by either certified or registered mail, return receipt
requested, postage prepaid, by overnight courier guaranteeing next day delivery,
or by telecopier (with telephonic or machine confirmation by the sender),
addressed as follows (or to such other address, including facsimile number, as
shall have been designated by the recipient in writing):
(a) If to the Company: Aircraft Parts International Xxxxx, Inc.
0000 Xxxxxxxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000-0000
Attn: President and Chief Operating Officer
Telecopy: (000) 000-0000
With required copies to: Weil, Gotshal & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
and, prior to May 1, 1997: First Equity Development, Inc.
Xxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: President
Telecopy: (000) 000-0000
and, after May 1, 1997: First Equity Development, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx
Attn: President
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(b) If to Parent, prior
to May 1, 1997, to: First Aviation Services, Inc.
Xxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: President and Chief Operating Officer
Telecopy: (000) 000-0000
and, after May 1, 1997: First Aviation Services, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx
Attn: President
With required copies to: Weil, Gotshal & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
and, prior to May 1, 1997: First Equity Development, Inc.
Xxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: President
Telecopy: (000) 000-0000
and, after May 1, 1997: First Equity Development, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx
Attn: President
(c) If to Xxxxx: AMR Xxxxx, Inc.
0000 Xxxx Xxxxxx Xxxx.
MD 4239
Xxxx Xxxxx, Xxxxx 00000
Attn: President
Telecopy: (000) 000-0000
With a required copy to: AMR Services Corporation
0000 Xxxx Xxxxxx Xxxx.
MD 4240
Xxxx Xxxxx, Xxxxx 00000
Attn: General Counsel
Telecopy: (000) 000-0000
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All such notices, requests and other communications shall be deemed to have been
received on the date of delivery thereof (if delivered by hand), on the third
Business Day after the mailing thereof (if mailed), on the next day after the
sending thereof (if by overnight courier) and when receipt is confirmed as
provided above (if telecopied).
8.07 Waivers and Amendments. No amendment or waiver of any provision of
this Agreement, nor consent to any departure therefrom, shall be effective
unless the same shall be in writing and signed by an officer of each party
hereto, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
a party hereto to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right.
8.08 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns. Neither party hereto shall assign its rights hereunder or any interest
herein without the prior written consent of the other party hereto.
8.09 Governing Law. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HERETO, SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO ITS PRINCIPLES OF CONFLICT OF LAWS.
8.10 Captions. The captions, headings and arrangements used in this
Agreement are for convenience only and do not in any way affect, limit or
amplify the provisions hereof.
8.11 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable; this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or its severance from this
Agreement.
8.12 Entirety. This Agreement contains the entire agreement and
understanding between the parties with respect to the matters addressed herein
and supersedes all prior representations, inducements, promises or agreements,
oral or otherwise, which are not embodied herein.
8.13 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original for all purposes and all
of which shall be deemed collectively to be one agreement.
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8.14 Attorneys' Fees. If any action or proceeding is commenced by any
party hereto for the purpose of enforcing any provision of this Agreement, the
prevailing party to such action or proceeding may receive as part of any award,
judgment, decision or other resolution of such action or proceeding its costs
and attorneys' fees as determined by the person making such award, judgment,
decision or resolution. Should any claim hereunder be settled short of the
commencement of any such action or proceeding, including arbitration, the
parties to such settlement shall be entitled to include as part of the damages
alleged to have been incurred reasonable costs of attorneys or other
professionals in investigation or counseling on such claim.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute and deliver this Agreement as of the date
first written above.
AIRCRAFT PARTS INTERNATIONAL
XXXXX, INC.
By: _____________________________
Name: __________________________
Title: ___________________________
FIRST AVIATION SERVICES INC.
By: _____________________________
Name: __________________________
Title: ___________________________
AMR XXXXX, INC.
By: _____________________________
Name: __________________________
Title: ___________________________
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