EXHIBIT 10(f)
CAPITAL CONTRIBUTION AGREEMENT
This Capital Contribution Agreement is entered into this 30th day of June,
1998 by and among MOBILE PULLEY MARINE SERVICES, INC., an Alabama corporation
("MPMS") and AMERICAN AERO CRANES, L.L.C., a Louisiana limited liability company
("AAC") and AERO INTERNATIONAL, L.L.C., a Louisiana limited liability company
("Aero").
WHEREAS, MPMS owns equipment, inventories, contract rights, leasehold
interests, and miscellaneous assets used in connection with the operation of
MPMS's business (the "Business"); and
WHEREAS, MPMS wishes to acquire a preferred membership interest in Aero; and
WHEREAS, the parties have agreed that if MPMS will contribute the Business to
Aero as a capital contribution in Aero, then Aero will issue Class B Preferred
Membership Interest units to MPMS and shall pay other valuable consideration
including cash and the assumption of liabilities; and
WHEREAS, Aero is the parent company of AAC, and Aero wishes for AAC to take
title to the assets contributed and to assume the aforementioned liabilities.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
SECTION 1. ASSETS TRANSFERRED; LIABILITIES ASSUMED.
1.1 Assets Transferred. MPMS agrees to transfer to AAC, as a capital
contribution to Aero, and AAC agrees to acquire from MPMS, on the terms and
conditions set forth in this Agreement, MPMS's entire right, title and interest
in, to and under the Business, as a going concern, including all of the assets
owned or used by MPMS in connection with or arising out of the Business of every
type and description, tangible and intangible, wherever located and whether or
not reflected on the books and records of MPMS (all of the assets, properties,
rights and business being hereinafter sometimes collectively referred to as the
"Assets"), including, but not limited to,
(i) All equipment relating to the Business, including the equipment
set forth on Exhibit A;
(ii) All inventory relating to the Business, including the inventory
set forth on Exhibit A;
(iii) All accounts and notes receivable relating to the Business,
including the accounts receivable set forth on Exhibit A;
(iv) All real property of the Business;
(v) All leasehold interests on real or personal property;
(vi) All proprietary information of the Business;
(vii) The benefit of all contracts, unfulfilled or outstanding
purchase orders, sales contracts, labor and employee benefit
plans, agency agreements, pricing agreements, other commitments
and engagements to which MPMS is entitled on the Effective Date
(herein defined) and that relate to the Business;
(viii) All cash and cash equivalents; and
(ix) Any goodwill associated with the Business.
1.2 Liabilities Assumed. Except for the Excluded Liabilities pursuant to
Section 2 hereof, AAC shall accept the assignment and assume responsibility of
the Business and all of its liabilities, debts and obligations, whether known or
unknown, now existing or hereafter arising, contingent or liquidated, including
without limitation, liabilities of MPMS with respect to the Business and of the
Business for the periods prior to the Effective Date and the Closing Date (the
"Assumed Liabilities").
SECTION 2. EXCLUDED ASSETS AND LIABILITIES. Excluded from this transfer and
the assignment and assumption by AAC are any assets and liabilities of MPMS
reflected on Exhibit B attached hereto. ("Excluded Assets and Liabilities").
SECTION 3. CONSIDERATION FOR CAPITAL CONTRIBUTION. In exchange for the
capital contribution by MPMS, Aero shall:
(i) issue to MPMS 240,000 duly authorized and issued units of Class B
Preferred Membership Interest Units in Aero International, L.L.C.
having an aggregate face amount of Three Million and No/100
($3,000,000.00) Dollars, described on Exhibit C attached hereto.
(ii) pay to MPMS cash in the amount of One Million and No/100
($1,000,000.00) Dollars.
(iii) assume the obligation of MPMS to the National Bank of Canada in
the amount of Two Million Two Hundred Forty-Two Thousand Four
Hundred Sixty-Seven and 61/100 ($2,242,467.61) Dollars as of
May 31, 1998.
(iv) assume all of the other Assumed Liabilities.
SECTION 4. ADJUSTMENTS. The operation of MPMS's business and related income
and expenses up to the close of business on the Effective Date shall be for the
account of MPMS and thereafter for the account of AAC. Expenses, including but
not limited to utilities, personal property taxes, rents, real property taxes,
wages, vacation pay, payroll taxes, and fringe benefits of employees of MPMS,
shall be prorated between MPMS and AAC as of the close of business
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on the Effective Date, the proration to be made and paid, insofar as reasonably
possible, on the Closing Date, with settlement of any remaining items to be made
within ninety (90) days following the Closing Date.
SECTION 5. The parties to this Agreement shall agree to allocate the Assets
and Units to be transferred hereunder so that filings with the Internal Revenue
Service by or with respect to each party to this Agreement shall be consistent
with one another.
SECTION 6. MPMS'S REPRESENTATIONS AND WARRANTIES. MPMS represents and
warrants to AAC as follows:
6.1 Corporate Existence. MPMS is now and on the Effective Date was and on
Closing Date will be a corporation duly organized and validly existing and in
good standing under the laws of the State of Alabama. MPMS has all requisite
corporate power and authority to own, operate and/or lease the Assets, as the
case may be, and to carry on its business as now being conducted.
6.2 Authorization. The execution, delivery, and performance of this
Agreement have been duly authorized and approved by the board of directors and
shareholders of MPMS, and this Agreement constitutes a valid and binding
Agreement of MPMS in accordance with its terms.
6.3 Financial Statements. Attached hereto as Exhibit D are MPMS's audited
financial statements for the years ended December 31, 1995, 1996 and 1997
(combined with Mobile Pulley and Machine Works, a Division of IPC Industries,
Inc.), and unaudited proforma financial statements for the five (5) month period
ended May 31, 1998 ("Financial Statements"). The Financial Statements are in
accordance with the books and records of MPMS and are true, correct, and
complete; fairly present financial conditions of MPMS and include the
Liabilities at the dates of such Financial Statements and the results of its
operations for the periods then ended; and were prepared in accordance with
generally accepted accounting principles applied on a basis consistent with
prior accounting periods. Except as described in this Agreement, since May 31,
1998 there has been no material adverse change in the financial condition of
MPMS.
6.4 Title to Assets. MPMS holds good and marketable title to the Assets,
free and clear of restrictions on or conditions to transfer or assignment, and
free and clear of liens, pledges, charges, or encumbrances.
6.5 Litigation. MPMS has no knowledge of any claim, litigation, proceeding,
or investigation pending or threatened against MPMS that might result in any
material adverse change in the Business or condition of Assets being transferred
under this Agreement.
6.6 Taxes. To the best of MPMS's knowledge, all federal, state and local tax
returns of MPMS required by applicable law to be filed have been duly filed, and
all federal, state, and local taxes, assessments and other governmental charges
or levies upon MPMS or its income, property and assets, affecting or relating to
the Business or the Assets, which are due and payable
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have been paid except any such nonpayment which is the subject of a bona fide
dispute by appropriate proceedings and for which adequate reserves have been
established and are reflected in the Financial Statements.
6.7 Material Adverse Change. To the best of MPMS's knowledge, since the date
of the most recent Financial Statements furnished herewith (i) no change in the
business, Assets, Liabilities, condition (financial or otherwise), results of
operations or business prospects of the Business has occurred that has had, or
may have, a materially adverse effect, and (ii) no event has occurred or failed
to occur which has had, or may have, a materially adverse effect.
6.8 ERISA. Each of the employee benefit plans maintained by MPMS for
employees of the Business is in substantial compliance with ERISA, and MPMS has
not received any notice asserting that any such benefit plan is not in
compliance with ERISA. No material liability to the Pension Benefit Guaranty
Corporation or to any multi-employer plan has been, or is expected by MPMS to
be, incurred by MPMS in connection with the Business.
6.9 Government Approvals; Compliance with Law. MPMS (i) has all governmental
approvals required of it to carry on the Business, including permits relating to
federal, state and local environmental laws, ordinances and regulations required
by any applicable law for it to conduct the Business, each of which is in full
force and effect, is final and not subject to review on appeal and is not the
subject of any pending or, to the knowledge of MPMS, threatened proceeding, and
(ii) is in compliance with all laws nad governmental requirements applicable to
the Business, including but not limited to all environmental laws and
occupational health and safety laws appplicable to the Business, except those
which would not have a material adverse effect on the Business or the Assets.
6.10 Receivables. All accounts receivable forming part of the Assets (i) are
owed to MPMS and represent bona fide transactions arising out of the ordinary
course of business and not requiring any further action to make them due and
payable; (ii) are not unpaid more than 120 days after the date of the original
invoice unless set forth in writing by MPMS to AAC; (iii) are valid, legally
enforceable obligations of the respective account debtors and not subject to any
present or contigent offset, deduction or counterclaim, dispute or other defense
on the part of such account debtor; and (iv) are not subject to any liens other
than the lien of National Canada Finance Corp. in connection with MPMS's
revolving credit facility.
6.11 Plant and Equipment. The buildings, plants, structures and equipment
included in the Assets are structurally sound, are in good operating condition
and repair, and are adequate for the uses to which they are being put, and none
of such buildings, plants, structures or equipment is in need of maintenance or
repairs except for ordinary, routine maintenance and repairs that are not
material in nature or cost. The building, plants, structures and equipment
included in the Assets are sufficient for the continued conduct of the Business
after the Closing in substantially the same manner as conducted prior to the
Closing.
6.12 Insurance. All policies of insurance with respect to the Business or
the Assets are listed in Schedule 6.12 attached hereto and made a part hereof
and are in full force and effect
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and shall remain in full force and effect as of the Closing. All such policies
provide coverage on an "occurrence" basis rather than on a "claims made" basis.
6.13 Employment Agreements. No employment contract or material consulting
agreement is currently in effect with any employee of the Business that is not
terminable at will (other than agreements with the sole purpose of providing for
the confidentiality of proprietary information or assignment of inventions).
6.14 Labor Relations; Compliance. MPMS is in compliance in all respects with
all laws relating to employment, wages hours, benefits, collective bargaining,
and plant closing with respect to the Business. MPMS is not liable for the
payment of any compensation, damages, taxes, fines, penalties, or other amounts
for any failure to comply with any of the foregoing.
SECTION 7. REPRESENTATIONS OF AERO. Aero represents and warrants as follows:
7.1 Corporate Existence. Aero is a limited liability company duly
organized, validly existing, and in good standing under the laws of the State of
Louisiana. Aero has all requisite limited liability company power and authority
to enter into this Agreement and perform its obligations hereunder.
7.2 Authorization. The execution, delivery, and performance of this
Agreement has been duly authorized and approved by the members of Aero, and this
Agreement constitutes a valid and binding agreement of Aero in accordance with
its terms.
7.3 Issuance of Preferred Interest. The units of Class B Preferred
Membership Interest to be issued in accordance with this Agreement shall, at the
time of the Closing, be duly authorized and validly issued by Aero.
SECTION 8. REPRESENTATIONS OF AAC. AAC represents and warrants as follows:
8.1 Corporate Existence. AAC is a limited liability company duly organized,
validly existing, and in good standing under the laws of the State of Louisiana.
AAC has all requisite limited liability company power and authority to enter
into this Agreement and perform its obligations hereunder.
8.2 Authorization. The execution, delivery, and performance of this
Agreement has been duly authorized and approved by the members of AAC, and this
Agreement constitutes a valid and binding Agreement of AAC in accordance with
its terms.
SECTION 9. COVENANTS OF MPMS.
9.1 Access to Premises and Information. At reasonable times prior to the
Effective Date and Closing Date, MPMS will provide AAC and its representatives
with reasonable access during business hours to the assets, titles, contracts,
and records of MPMS and furnish such
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additional information concerning MPMS's business as AAC from time to time may
reasonably request.
9.2 Change of Name. MPMS will take all action necessary or appropriate to
permit AAC to legally commence use of MPMS's name on the Effective Date and
Closing Date.
9.3 Conditions and Best Efforts. MPMS will use its best efforts to
effectuate the transactions contemplated by this Agreement and to fulfill all
the conditions of the obligations of MPMS under this Agreement, and will do all
acts and things as may be required to carry out its obligations under this
Agreement and to consummate and complete this Agreement.
SECTION 10. COVENANTS OF AAC AND AERO.
10.1 Conditions and Best Efforts. AAC and Aero, respectively, will each use
its best efforts to effectuate the transactions contemplated by this Agreement
and to fulfill all the conditions of their respective obligations under this
Agreement, and shall do all acts and things as may be required to carry out
their respective obligations and to consummate this Agreement.
SECTION 11. CONDITIONS PRECEDENT TO AAC'S AND AERO'S OBLIGATIONS. The
obligation of AAC to acquire the Assets and assume the Assumed Liabilities and
of Aero to deliver a certificate of ownership of the Class B Preferred
Membership Interest described in Section 3 is subject to the fulfillment, prior
to or at the Closing Date, of each of the following conditions, any one or
portion of which may be waived in writing by AAC and Aero:
11.1 Representations, Warranties, and Covenants of MPMS. All
representations and warranties made in this Agreement by MPMS shall be true as
of the Effective Date and Closing Date as fully as though such representations
and warranties had been made on and as of the Effective Date and Closing Date,
and MPMS shall not have violated or shall not have failed to perform in
accordance with any covenant contained in this Agreement.
11.2 Conditions of the Business. There shall have been no material adverse
change in the manner of operation of MPMS's business prior to the Effective Date
and Closing Date.
11.3 No Suits or Actions. At the Effective Date and Closing Date, no suit,
action, or other proceeding shall have been threatened or instituted to
restrain, enjoin, or otherwise prevent the consummation of this Agreement or the
contemplated transactions.
11.4 Delivery of Assets. The obligations of IPC described in Subsection 17.2
shall have been fulfilled.
SECTION 12. CONDITIONS PRECEDENT TO OBLIGATIONS OF MPMS. The obligations of
MPMS to consummate the transactions contemplated by this Agreement are subject
to the fulfillment, prior to or at the Effective Date and Closing Date, of each
of the following conditions, any one or a portion of which may be waived in
writing by MPMS;
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12.1 Representations, Warranties. and Covenants of AAC. All representations
and warranties made in this Agreement by AAC and Aero shall be true as of the
Effective Date and Closing Date as fully as though such representations and
warranties had been made on and as of the Effective Date and Closing Date, and
neither AAC nor Aero have violated or shall not have failed to perform in
accordance with any covenant contained in this Agreement.
12.2 Delivery of Consideration. The obligations of AAC and Aero described in
Subsection 17.3 shall have been fulfilled.
SECTION 13. AAC'S AND AERO'S ACCEPTANCE. AAC and Aero represents and
acknowledge that they have entered into this Agreement on the basis of their own
examination, personal knowledge, and opinion of the value of the Business. AAC
and Aero have not relied on any representations made by MPMS other than those
specified in this Agreement. AAC and Aero further acknowledge that MPMS has not
made any agreement or promise to repair or improve any of the leasehold
improvements, equipment, or other personal property being transferred under this
Agreement, and that AAC takes all such property in the condition existing on the
date of this Agreement, except as otherwise provided in this Agreement.
SECTION 14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in this Agreement shall survive the Closing of this
Agreement.
SECTION 15. MPMS'S INDEMNIFICATION. MPMS acknowledges that all events
with respect to the Business from the close of business on and after the
Effective Date and, have been and shall be for the account of Aero and AAC.
MPMS hereby agrees to indemnify and hold Aero and AAC, its successors, and
assigns harmless from and against any and all claims, liabilities, and
obligations of every kind and description, contingent or otherwise, arising out
of or related to the operation of the Business prior to the close of business on
the day of the Effective Date, except for claims, liabilities, and obligations
of MPMS expressly assumed by Aero and AAC under this Agreement or paid by
insurance maintained by MPMS or AAC.
SECTION 16. AERO'S AND AAC'S INDEMNIFICATION. Aero and AAC acknowledge
that all events with respect to the Business from the close of business on and
after the Effective Date are, have been, and shall be for the account of Aero
and AAC. Aero and AAC hereby agree to defend, indemnify, and hold harmless MPMS
and their successor from and against any and all claims, liabilities, and
obligations of every kind and description arising out of or related to the
operation of the Business following Closing (except, as to events between the
Effective Date and the Closing, those arising out of the wanton or intentional
acts of MPMS) or arising out of AAC's or Aero's failure to perform obligations
of MPMS assigned to and assumed by AAC or Aero pursuant to this Agreement.
SECTION 17. CLOSING.
17.1 Time and Place. This Agreement shall be closed at the offices of Xxxxx
and Xxxxx, L.L.P., Xxx Xx. Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxx at 8:30
a.m. on June 30, 1998, or at such other time as the parties may agree in
writing. If Closing has not occurred on or prior to August 31, 1998, then any
party may elect to terminate this Agreement. If, however, the
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Closing has not occurred because of a breach of contract by one or more parties,
the breaching party or parties shall remain liable for breach of contract.
17.2 Obligations of MPMS at the Closing. At the Closing and coincidentally
with the performance by AAC and Aero of their obligations described in Section
17.3, MPMS shall deliver to AAC and Aero the following:
(a) Executed original counterpart of an Assignment and Assumption
Agreement conveying all MPMS's right, title and interest to the Assets;
(b) Certified copy of resolution of MPMS's Board of Directors
authorizing the transfer of the Assets and the consummation of the transaction
contemplated by this Agreement; and
17.3 Obligations of AAC and Aero at the Closing. At the Closing and
coincidentally with the performance by MPMS of its obligations described in
Section 17.2:
(a) Aero shall execute and deliver a certificate of ownership of
240,000 units of Class B Preferred Membership Interest in Aero described in
Section 3 (the "Preferred Membership Interest Certificate").
(b) Aero shall deliver to MPMS the cash sum as set forth in Section 3.
(c) AAC and Aero shall each deliver a certified copy of unanimous
consent of all its members authorizing the transfer of the Assets, the issuance
of the Preferred Membership Interest Certificate and the consummation of the
transactions contemplated by this Agreement.
(d) AAC shall execute and deliver an original counterpart of the
Assignment and Assumption Agreement.
SECTION 18. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.
18.1 Books and Records. This transfer includes the books of account and
records of MPMS's business. However, MPMS or its agents shall have access to
such books and records and may make copies thereof. AAC will exercise reasonable
care in the safekeeping of such records. MPMS shall retain its general ledger
but shall make it available for inspection by AAC from time to time upon
reasonable request.
SECTION 19. MISCELLANEOUS PROVISIONS.
19.1 Effective Date. The Effective Date of this Agreement shall be May 31,
1998. All parties have agreed to this Effective Date, in part to avoid post-
closing adjustments necessary to accommodate the period after the effect of the
Financial Statements.
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19.2 Amendment and Modification. Subject to applicable law, this Agreement
may be amended, modified, or supplemented only by a written agreement signed by
all of the parties hereto.
19.3 Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State of Alabama.
19.4 Titles and Captions. All section titles or captions contained in this
Agreement are for convenience only and shall not be deemed part of the context
nor affect the interpretation of this Agreement.
19.5 Pronouns and Plurals. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the person or persons may require.
19.6 Entire Agreement. This Agreement contains the entire understanding
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement. Any
amendments to this Agreement must be in writing and signed by the party against
whom enforcement of that amendment is sought.
19.7 Agreement Binding. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
19.8 Further Action. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purpose of the Agreement.
19.9 Counterparts. This Agreement may be executed in several counterparts
and all so executed shall constitute one Agreement, binding on all the parties
hereto even though all the parties are not signatories to the original or the
same counterpart.
19.10 Parties in Interest. Nothing herein shall be construed to be to the
benefit of any third party, nor is it intended that any provision shall be for
the benefit of any third party.
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19.11 Savings Clause. If any provision of this Agreement, or the application
of such provision to any person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those as to which it is held invalid, shall not be
affected thereby.
AMERICAN AERO CRANES, L.L.C. MOBILE PULLEY MARINE SERVICES,
a Louisiana limited liability company INC., an Alabama corporation
By: /s/ W. Xxxxxx XxXxxxxx By: /s/ Xxxxxxx X. Xxxx, Xx.
---------------------- ------------------------
W. Xxxxxx XxXxxxxx Xxxxxxx X. Xxxx, Xx.
President and CEO Chairman and CEO
AERO INTERNATIONAL, L.L.C.
a Louisiana limited liability company
By: /s/ Xxxxx X. Xxxxx, Xx.
-----------------------
Xxxxx X. Xxxxx, Xx.
Executive Vice President
Attached Exhibits: A - Assets
B - Excluded Assets and Liabilities
C - Preferred Interest Designation
D - Financial Statements
Attached Schedules: 6.12 Insurance Certificates
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