SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (the "Agreement") is made and entered into
as of the 23rd day of January, 1998 between Hermaton Company, a Delaware
corporation ("Company"), Las Vegas Airlines, Inc., a Nevada corporation ("LVA"),
and Xxxxxx X. Xxxxxxx, Xx.
("Shareholder").
WHEREAS, the Articles of Incorporation of LVA authorize the issuance of
2,500 shares of common stock, no par value, of which 2,500 shares are
outstanding (the "LVA Common Stock"), and no shares of preferred stock;
WHEREAS, LVA is an air carrier certified under Part 135 of the
FARs; and
WHEREAS, Shareholder is the owner of the LVA Common Stock; and
WHEREAS, the Company is a public company required to file reports under
Section 13 of the Securities Exchange Act of 1934, as amended; and
WHEREAS, the Board of Directors of the Company and LVA deem it advisable
that the acquisition by the Company of 51% of the outstanding shares be effected
through the acquisition (the "Acquisition") pursuant to this Agreement; and
NOW THEREFORE, in consideration of the mutual agreements hereinafter set
forth, the parties hereto, intending to be legally bound, hereby agree as
follows:
Section 1. Definitions. Certain words and terms as used in this
Agreement shall have the meanings given to them by the definitions and
descriptions in this Section, and such definitions shall be equally applicable
to both the singular and plural forms of any of the words and terms defined
below. All accounting terms not specifically defined shall be construed in
accordance with generally accepted accounting principles.
"Affiliate" of any specified Person means (i) any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person, or (ii) any trust of which such Person is
the settlor. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings relative to the foregoing.
"Closing" has the definition set forth in Section 3.
"Closing Date" means the date on which the Closing shall take place
pursuant to Section 3 of this Agreement.
"Code" means the Internal Revenue Code of 1986, as now in effect or
hereafter amended, and as now or hereafter construed, interpreted and applied by
regulations, rulings and cases.
"Company" has the meaning set forth in the opening paragraph of this
Agreement and includes, unless the context otherwise requires, its Subsidiaries.
"Company Common Stock" means the common stock of Company, $.001
par value.
"FAA Permit" means LVA's operating authority incorporated by reference
as Exhibit 1 hereto.
"FARs" means the Federal Aviation Regulations.
"Government" means the government of the United States of America, the
government of any other nation, any political subdivision of the United States
of America or any such other nation (including, without limitation, any state,
commonwealth, territory, federal district, municipality or possession) and any
department, agency, or instrumentality thereof; and "Governmental" means of, by
or pertaining to, any Government.
"IRS" means the Internal Revenue Service.
"Lease" means any lease or other agreement (however denominated)
providing for the use by one Person of real or personal property owned by
another Person (or, the entering into such a lease or agreement).
"Xxxx" means the tradename "Las Vegas Airlines" or "Las Vegas
Airlines, Inc."
"Material" when capitalized and used in this Agreement in relation to
any Person means Material in relation to the business, financial condition, or
results of operations of such Person and its Subsidiaries, if any, taken as a
whole.
"Note" means the Promissory Note attached as Exhibit 3 hereto.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
Government.
"Plan" means any employee benefit plan, as defined in ERISA, and any
other plan, benefit or program of benefits or perquisites (other than a
Governmental plan, benefit or program) provided to one or more employees, which
is or has been established, maintained, participated in or contributed to by a
Person or a predecessor or successor of a person within the meaning of Section
414 of the Code.
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"Requirement of Law" means, for any Person, any law, rule, judgment,
regulation, order, writ, injunction or decree of any court or Government and any
decision or ruling of any arbitrator to which such Person is a party or by which
such Person or any of its assets or property is bound or affected or from which
such Person derives benefits, including without limitation, those relating to
the discharge of Materials into the environment and environmental protection,
and if such Person is a corporation, its charter documents and bylaws.
"Subsidiary" of a Person means any corporation of which at least a
majority of the outstanding stock having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation, irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency, is at the time directly or indirectly owned by such Person, by
one or more Subsidiaries of such Person, or by such Person and one or more
Subsidiaries.
Section 2. Acquisition. The Company shall acquire 51% of the
outstanding LVA Common Stock upon Closing.
Section 3. Time, Date and Place of Closing. The Closing of the
transaction contemplated by this Agreement (the "Closing") shall take place on
or before March 28, 1998.
3.1 At Closing, Company shall purchase 1,285 shares of
LVA Common Stock from Shareholder for a purchase
price of $500,000 (the "Purchase Price") paid as
set forth in Section 4 hereof.
3.2 At Closing, the FAA Permit shall be assigned as
described in Section 7.03.
Section 4. Deliveries at Closing. The following documents
shall be delivered at Closing:
4.1 Company shall deliver a check or wire transfer in
the amount of $250,000 and the Note to
Shareholder;
4.2 LVA shall deliver to company a resolution of its
board of directors approving the transaction
contemplated by this Agreement and elect Jehu Hand
as a member of the Board of Directors of LVA; and
4.3 LVA shall deliver to Company an opinion of
counsel, in the form attached as Exhibit 4.3
hereto.
Section 5. Representations, Warranties and Covenants of
Acquirees.
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Each of Shareholder and LVA represent, warrant and covenant as follows,
jointly and severally:
5.1 Organization, etc. LVA is a corporation duly organized,
validly existing and in good standing under the laws of
the state of Nevada, has the corporate power to own its
properties and carry on its business as now being
conducted, execute and deliver this Agreement and
consummate the transactions contemplated hereby and
thereby. The copies of the Articles of Incorporation of
LVA provided to Company shall reflect all amendments made
thereto at any time prior to and as of the Closing and
are correct and complete.
5.2 Capital Stock and Related Matters. The authorized
capital stock of LVA consists of 2,500 shares of common
stock, no par value, of which 2,500 shares are issued and
outstanding, and no shares of preferred stock are
authorized. There are no options outstanding to purchase
LVA Common Stock, and no person has any preemptive right
to purchase LVA Common Stock.
5.3 Subsidiaries. LVA owns no securities of any Person.
5.4 Authorization; No Breach. The execution and delivery by
LVA of this Agreement and each of the other agreements
and transactions contemplated hereby have been duly
authorized by all necessary proceedings of the Board of
Directors LVA and, all corporate action of LVA necessary
for the authorization and consummation of the
transactions contemplated by this Agreement shall have
been taken. This Agreement and each of the other agree-
ments contemplated hereby constitute the valid and bind-
ing obligations of Acquiree enforceable against it in
accordance with their respective terms. The execution,
delivery and compliance with and performance by LVA of
this Agreement and each of the other agreements
contemplated hereby, does not and will not (i) conflict
with or result in a breach of the terms, conditions or
provisions of, (ii) constitute a default under, (iii)
result in the creation of any Material lien, security
interest, charge or encumbrance upon LVA capital stock
or assets pursuant to, (iv) give any third party the
right to accelerate any Material obligation under, (v)
result in a Material violation of, or (vi) require any
authorization, consent, approval, permit, exemption or
other action by or notice to any court or Governmental
body except with respect to the assignment of the FAA
Permit.
5.5 Taxes. LVA has timely paid (or has collected and paid
over in the case of sales, use or similar taxes) all
Material taxes, additions to tax, penalties, interest,
assessments, deposits, and other Governmental charges
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imposed by law upon it or any of its properties, tangible or
intangible assets, income, receipts, payrolls, transactions,
capital, net worth, franchises, or upon the sale, use or
delivery of any item sold by any member of LVA, other than as
may be disclosed in the Schedule of Taxes. Except as set forth
in the Schedule of Taxes, no Tax Returns have been examined by
any Governmental authority.
5.6 Litigation. There are no material pending or, to the
knowledge of LVA or Shareholder, contemplated, Material
administrative or judicial proceedings against LVA.
5.7 Trademarks, Trade Names, Patents, etc. LVA has no
knowledge of any notice or claim or other reason to
believe that the Xxxx is not valid or enforceable by LVA
or of any infringement upon or conflict with the Xxxx or
proprietary right of any third Person by the owner
thereof or any claim of a third Person alleging such
infringement or conflict, nor any knowledge of any
infringement by any third Person upon the Xxxx.
5.8 Employee Matters. LVA is in Material compliance with
Material Requirements of Law respecting employment and
employment practices, terms and conditions of employment,
and wages and hours and is not engaged in any unfair
labor practice.
5.9 Employee Benefit Plans. LVA has no Plans.
5.10 Brokers. LVA has not incurred or become liable for any
commission, fee or other similar payment to any broker, agent,
finder or other intermediary in connection with the negotiation
of this Agreement or the consummation of the transactions
contemplated hereby.
Section 6. Representations and Warranties of Company. Company
hereby represents and warrants to Acquirees and Shareholder as
follows:
6.1 Organization, etc. Company is a corporation duly
organized, validly existing and in good standing under
the laws of the State of Delaware. Company has the
corporate power to own its properties and carry on its
business as now being conducted, execute and deliver this
Agreement and consummate the transactions contemplated
hereby and thereby. The copies of the articles of
incorporation and bylaws of Company provided to LVA and
Shareholder are correct and complete.
6.2 Capital Stock and Related Matters. The authorized
capital stock of Company consists of 20,000,000 shares
of common stock, par value $.001 per share, of which
_____ shares are issued and outstanding, and 1,000,000
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shares of preferred stock, $.001 par value per share, of
which no shares are outstanding.
6.3 Subsidiaries. Company owns no securities of any Person.
6.4 Authorization; No Breach. The execution and delivery by
Company of this Agreement and each of the other
agreements and transactions contemplated hereby have been
duly authorized by all necessary proceedings of the Board
of Directors of Company and all corporate action of
Company necessary for the authorization and consummation
of the transactions contemplated by this Agreement shall
have been taken. This Agreement and each of the other
agreements contemplated hereby constitute the valid and
binding obligations of Company enforceable against it in
accordance with their respective terms. The execution,
delivery and compliance with and performance by Company
of this Agreement and each of the other agreements
contemplated hereby, does not and will not (i) conflict
with or result in a breach of the terms, conditions or
provisions of, (ii) constitute a default under, (iii)
result in the creation of any Material lien, security
interest, charge or encumbrance upon either Company's or
any Subsidiary's capital stock or assets pursuant to,
(iv) give any third party the right to accelerate any
Material obligation under, (v) result in a Material
violation of, or (vi) require any authorization, consent,
approval, permit, exemption or other action by or notice
to any court or Governmental body, pursuant to the
articles of incorporation or bylaws of Company or its
Subsidiary or any Requirement of Law to which Company or
its Subsidiary is subject or any Contractual Obligation
or other instrument, order, judgment or decree to which
Company or its Subsidiary is subject.
6.5 Litigation. There are no material pending, or to the
knowledge of Company, contemplated, Material
administrative or judicial proceedings against Company.
6.6 Brokers. Company has not incurred or become liable for any
commission, fee or other similar payment to any broker in
connection with the negotiation of this Agreement or the
consummation of the transactions contemplated hereby.
Section 7. Certain Understandings and Agreements.
7.01. Interim Loans. Upon execution of this Agreement,
the Company shall loan to LVA $50,000 under the terms of a
Security Agreement and Promissory Note attached hereto as
Exhibit 7.01. On or before March 1, 1998 the Company and/or
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its President, Jehu Hand, will apply for and/or guarantee a loan from an
outside party in the amount of $100,000 to LVA.
7.02. LVA shall upon execution of this Agreement, and as
requested periodically from time to time, provide Company with a copy of
its financial statements, including the reviewed statements for the year
ended September 30, 1997, 1996, and 1995, and quarterly financial
information as requested by the Company. In addition, should Company
elect at its expense to commission an audit of the LVA financial
statements, LVA shall cooperate with its auditors or Company auditors in
the preparation of such audit, and shall cooperate in providing
information for the Company offering documents.
7.03. FAA Permit. Pending the Closing, LVA shall take no action
or omit to take any action which would cause the FAA Permit to be
suspended or revoked. Upon closing LVA shall assign the FAA Permit to
Company and LVA shall simultaneously grant to LVA authority to operate
under the FAA Permit.
7.04. Airline Identification. Upon execution of this
Agreement LVA shall deliver airline identification cards to
each of the following personnel of the Company:
Jehu Hand Chairman, Las Vegas Airlines, Inc. (DE)
Xxxxxxx X. Xxxxxx Vice President, Las Vegas
Airlines, Inc. (DE)
7.05. Name change. Company will change its corporate
name to "Las Vegas Airlines, Inc. (DE)."
Section 8. Conditions to Closing.
8.01. Conditions to Obligation of Shareholder and LVA.
The obligations of Shareholder and LVA under this Agreement shall
be subject to each of the following conditions:
8.01(a) Representations and Warranties of Company to be True.
The representations and warranties of Company herein contained shall be
true in all Material respects at the Closing with the same effect as
though made at such time. Company shall have performed in all Material
respects all obligations and complied in all Material respects, to its
actual knowledge, with all covenants and conditions required by this
Agreement to be performed or complied with by it at or prior to the
Closing, including without limitation those described in Section 7
hereof.
8.01(b) No Legal Proceedings. No injunction or restraining
order shall be in effect, and no action or proceeding shall have been
instituted and, at what would otherwise have been the Closing, remain
pending before a court to restrain or prohibit the transactions
contemplated by this Agreement.
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8.01(c) Statutory Requirements. All statutory requirements for
the valid consummation by Company of the transactions contemplated by
this Agreement shall have been fulfilled. All authorizations, consents
and approvals of all governments and other Persons required to be
obtained in order to permit consummation by Company of the transactions
contemplated by this Agreement, to continue unimpaired in all Material
respects immediately following the Closing shall have been obtained.
8.01(d) Closing Documents. Company shall have
executed and delivered all documents required to be executed
and delivered by Company pursuant to this Agreement.
8.02. Conditions to Obligations of Company. The
obligations of Company under this Agreement shall be subject to the
following conditions:
8.02(a) Representations and Warranties of Shareholder and LVA
to be True. The representations and warranties of Shareholder and LVA
herein contained shall be true in all Material respects as of the
Closing, and shall have the same effect as though made at the Closing;
Shareholder and LVA shall have performed in all Material respects all
obligations and complied in all Material respects, to its knowledge,
with all covenants and conditions required by this Agreement to be
performed or complied with by it prior to the Closing, including without
limitation those described in Section 7.
8.02(b) No Legal Proceedings. No injunction or restraining
order shall be in effect prohibiting this Agreement, and no action or
proceeding shall have been instituted and, at what would otherwise have
been the Closing, remain pending before the court to restrain or
prohibit the transactions contemplated by this Agreement.
8.02(c) Statutory and Other Requirements. All statutory
requirements for the valid consummation by Shareholder and LVA of the
transactions contemplated by this Agreement shall have been fulfilled;
all authorizations, consents and approvals of all Governmental agencies
and authorities required to be obtained in order to permit consummation
by Shareholder and LVA of the transactions contemplated by this
Agreement shall have been obtained.
8.02(d) Closing Documents. Each of Shareholder and
LVA shall have executed and delivered all documents required
to be executed and delivered by LVA and Shareholder pursuant
to this Agreement.
8.03. Termination of Agreement. Anything herein to the
contrary notwithstanding, this Agreement, may be terminated at any
time before the Closing as follows and in no other manner;
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8.03(a) Mutual Consent. By mutual consent of the
parties.
8.03(b) Expiration Date. By either Company or LVA
if the Closing shall not have taken place by March 28, 1998, which
date may be extended by mutual agreement of the parties.
8.04. Payment of Expenses; Waiver of Conditions. In the
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event that this Agreement shall be terminated pursuant to Section
8.03 all obligations of the parties under this Agreement shall
terminate and there shall be no liability of any party to the
other. Each party hereto will pay all costs and expenses incident
to its negotiation and preparation of this Agreement and
performance of and compliance with all agreements and conditions
contained herein or therein on its part to be performed or complied
with, including the fees, expenses and disbursements of counsel.
If any of the conditions specified in Section 8.01 hereof has not
been satisfied, LVA and Shareholder may nevertheless at the joint
election of LVA and Shareholder proceed with the transactions
contemplated hereby and if any of the conditions specified in
Section 8.02 hereof has not been satisfied, Company may
nevertheless at their joint election proceed with the transactions
contemplated hereby. In the event that the Closing shall be
consummated, each party hereto will pay all of its costs and
expenses in connection therewith.
Section 9. General.
9.1 Successors. Each and all of the provisions of this Agreement
shall be binding upon and inure to the benefit of the parties
hereto, and their respective heirs, legal representatives,
successors and assigns. Neither this Agreement, nor any rights
herein granted may be assigned, transferred or encumbered by
any party.
9.2 Survival of Representations and Warranties. The respective
representations and warranties of Company and Acquiree
contained herein shall survive for two years following the
Closing.
9.3 Governing Law. Except where the laws of another jurisdiction
are mandatorily applicable, this Agreement and the legal
relations among the parties hereto shall be governed by and
construed in accordance with the laws of the State of Nevada.
9.4 Headings. The descriptive headings of the sections and
subsections of this Agreement are inserted for convenience only
and do not constitute a part of this Agreement. They do not
define, limit, construe or describe the scope or intent of the
provision of this Agreement.
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9.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which, when executed by a party hereto,
shall be deemed an original and all of which together shall be
deemed one and the same agreement.
9.6 Reliance Upon Representations and Warranties.
Notwithstanding any right of any party hereto to fully
to investigate the affairs of any other party, the
parties hereto may rely upon the representations,
warranties and covenants made to it in this Agreement and
on the accuracy of any certificate, any schedule attached
hereto (collectively, the "Disclosure Schedules"),
exhibit or other document given or delivered to it
pursuant to this Agreement. Further, knowledge by an
agent of any party hereto of any facts not otherwise
disclosed in this Agreement the Disclosure Schedules
shall not constitute a defense to any claim for
misrepresentation, breach of any warranty, agreement, or
covenant under this Agreement, or the Disclosure
Schedules. No representations or warranties have been
made by or on behalf of any Person to induce any party
to enter into this Agreement or to abide by or consummate
the transactions contemplated by this Agreement, except
representations and warranties expressly set forth herein
or in the Disclosure Schedules or in any certificate,
exhibit or other document delivered in connection with
or pursuant to this Agreement. No representations or
warranties of any kind have been made by any
representative or agent of the parties hereto.
9.7 Waiver. No purported waiver by any party of any default
by any other party of any term, covenant or condition
contained herein shall be deemed to be a waiver of such
term, covenant or condition unless the waiver is in
writing and signed by the waiving party. No such waiver
shall in any event be deemed a waiver of any subsequent
default under the same or any other term, covenant or
condition contained herein.
9.8 Notices. Any consent, waiver, notice, demand, request
or other instrument required or permitted to be given
under this Agreement shall be in writing and shall be
deemed to have been properly given when delivered in
person or sent by certified or registered United States
mail, return receipt requested, postage prepaid,
addressed:
If to Company: Hermaton Company
00000 Xxxx Xxxxx Xxxxxx Xx., #000
Xxxx Xxxxx, Xxxxxxxxxx 00000
If to LVA
or Shareholder: Xxxxxx X. Xxxxxxx, Xx.
00
Xxxxx Xxx Xxxxx Xxx Xxxxxxxx
Xxx Xxxxx, XX ________
copy to: __________________________
==========================
9.9 Entire Agreement. This Agreement, as from time to time
amended, together with the schedules attached hereto and
any certificate, exhibit or other document given or
delivered pursuant hereto, sets forth the entire
understanding among the parties concerning the subject
matter of this Agreement and incorporates all prior
negotiations and understandings. There are no covenants,
promises, agreements, conditions or understandings,
either oral or written, between them relating to the
subject matter of this Agreement other than those set
forth herein. No alteration, amendment, change or
addition to this Agreement shall be binding upon any
party unless in writing and signed by the party to be
charged.
9.10 No Partnership. Nothing contained in this Agreement will
be deemed or construed by the parties hereto or by any
third person to create the relationship of principal and
agent or partnership or joint venture.
9.11 Partial Invalidity. If any term, covenant or condition
in this Agreement or the application thereof to any
Person or circumstance shall be invalid or unenforceable,
the remainder of this Agreement or the application of
such term, covenant or condition to Persons or
circumstances, other than those as to which it is held
invalid, shall be unaffected thereby and each term,
covenant or condition of this Agreement shall be valid
and enforced to the fullest extent permitted by law.
9.12 Joint Preparation. This Agreement is to be deemed to have been
prepared jointly by the parties hereto and any uncertainty or
ambiguity existing herein, if any, shall not be interpreted
against any party, but shall be interpreted according to the
application of the rules of interpretation for arm's length
agreements.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their authorized officers as of the date and year first above
written.
HERMATON COMPANY LAS VEGAS AIRLINES, INC.
By: By:
Name:Jehu Hand Name:Xxxxxx X. Xxxxxxx, Xx.
Title: President Title: President
SHAREHOLDER
Xxxxxx X. Xxxxxxx, Xx.
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