AMENDED AGREEMENT AND PLAN OF REORGANIZATION
AMENDED AGREEMENT AND PLAN OF REORGANIZATION, dated April 8, 1997, by
and among, PROFLIGHT MEDICAL RESPONSE, INC., a Colorado corporation with its
principal office at 00000 Xxxx Xxxxxxx Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 00000
(the "Purchaser"),XXXXX X. XXXXXX, XX. who resides at 00000 Xxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx 00000 (the "Shareholder"), AIR RESPONSE, INC., a New York
corporation with its principal office at Orlando Executive Airport, 000X Xxxxxxx
Xxxxxx, Xxxxxx 72, Xxxxxxx, Xxxxxxx 00000 (the "Company").
W I T N E S E T H:
WHEREAS, the Purchaser desires to acquire and the Shareholder wishes to
transfer, on the terms and subject to the conditions and in the manner reflected
below, all of the outstanding shares of capital stock of the Company; and
WHEREAS, the Purchaser is not prepared or willing to proceed with the
contemplated transaction without the support, agreements and representations of
the Company and Shareholder contained in this Agreement and is proceeding in
reliance upon such support, agreements and representations; and
WHEREAS, the Shareholder and the Company are not prepared or willing to
proceed with the contemplated transaction without the support, agreements and
representations of the Purchaser contained in this Agreement and are proceeding
in reliance upon such support, agreements and representations;
NOW, THEREFORE, the parties to this AMENDED AGREEMENT AND PLAN OF
REORGANIZATION do hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 General Construction: For Purposes hereof, except as otherwise
expressly provided:
1.1.1 Defined terms include the plural as well as the singular;
1.1.2 All accounting terms not otherwise defined have the meanings
assigned under generally accepted accounting principles;
1.1.3 All references to schedules and exhibits are to all the
schedules and exhibits attached to this Agreement; and
1.1.4 Pronouns of either qender or neuter shall include, as
appropriate, the other pronoun forms.
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1.2 Definitions: As used in this Agreement, the following terms shall have
the following definitions.
1.2.1 Affiliate: When used with respect to a person, an "affiliate" of
that person is a person controlling, controlled by, or under common control
with that person.
1.2.2 Agreement: This Amended Agreement and Plan of Reorganization,
including all of its schedules and exhibits and all other documents
specifically referred to in this Agreement that have been or are to be
delivered by a party to this Agreement to another such party in connection
with the Transaction and this Agreement and including all duly adopted
amendments, modifications, and supplements to or for this Agreement,
schedules, exhibits and other documents. Except as otherwise provided, all
schedules, other documents required to be delivered by a party to this
Agreement shall be completed or delivered 10 days prior to the Closing.
1.2.3 Audited Financial Statements: With respect to the Company,
audited financial statements for the twelve months ended May 31, 1996 and
1995.
1.2.4 Closinq: As defined in Section 9.1.
1.2.5 Closinq Date: As defined in Section 9.1.
1.2.6 Company Balance Sheet: Balance Sheet as of May 31, 1996,
included in the Audited Financial Statements.
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1.2.7 Consulting and Non-Competition Aqreement: As defined in Section
2.3.
1.2.8 EEO: Equal Employment Opportunity Act of 1972.
1.2.9 Entity: A corporation, partnership, sole proprietorship, joint
venture, or other form of organization business, whether active or formed
for the conduct of a passive.
1.2.10 ERISA: The Employee Retirement Income Security Act of 1974, as
amended and in effect at the time of execution of this Agreement.
1.2.11 GAAP: Generally accepted accounting principles, as in effect on
the date of any statement, report or determination that purports to be, or
is required to be, prepared or made in accordance with GAAP. All references
herein to financial statements prepared in accordance with GAAP shall mean
in accordance with GAAP consistently applied throughout the periods to
which reference is made.
1.2.12 Inventories: The stock of goods held by the Company from time
to time in the ordinary course of the business of the Company, in the form
in which such inventories then are held or after incorporating with other
goods or items, or the like.
1.2.13 IPO: The Purchaser's filing of an initial public offering on
Form SB-2 or other similar form with the Securities and Exchange
Commission.
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1.2.14 Liabilities: At any point in time (the "Determination Time"),
the obligations of a person or Entity, whether known or unknown, contingent
or absolute, recorded on its books or not, arising or resulting in any
obligations or way from facts, events, agreements, occurrences that existed
or transpired at a prior point in time, or resulted from the passage of
time to the Determination Time, but not including obligations accruing or
payable after the Determination Time to the extent (but arise under
benefits, or only to the extent) that such obligations (1) previously
existing agreements for services, other considerations, and (2) accrue or
become payable with respect to services benefits, or other considerations
received by the person or Entity after the Determination Time.
1.2.15 Loan: The November 1996 loan by the Purchaser to the Company
for the aggregate sum of Two Hundred Thousand ($200,000) Dollars with
interest at the rate of ten (10%) percent per annum.
1.2.16 OSHA: The Occupational Safety and Health Act of 1970.
1.2.17 Permits: Any permits, licenses, orders, approvals, franchises,
registrations, authorizations or other approvals from any federal, state,
local and foreign governmental or regulatory body or authority (public or
self-regulatory).
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1.2.18 Subsidiary: A corporation with respect which another Entity
owns, directly or indirectly, shares entitling it to elect a majority of
the Board of Directors or in which it has a majority of the equity
interest.
1.2.19 Transaction: The acquisition of all the outstanding shares of
capital stock of the Company by the Purchaser from the Shareholder, as
provided in Article II of this Agreement.
1.2.20 Unaudited Financial Statements: With respect to the Company,
financial statements for the six month periods ending November 30, 1995 and
November 30, 1996 and for the three months ended February 28, 1996 and
1997.
ARTICLE II
THE TRANSACTION
2.1 The Transaction: Subject to the terms, conditions, provisions and
limitations contained in this Agreement, the Purchaser, in reliance upon the
representations and warranties of the Shareholder and the Company made herein
and in the schedules and exhibits annexed hereto, will at the Closing, acquire
from the Shareholder and the Shareholder, in reliance upon the representations
and warranties of the Purchaser made herein and in the schedules and exhibits
annexed hereto, will at the Closing transfer, convey and assign to the
Purchaser, free and clear of any and all liens, charges or other encumbrance,
100 shares of common stock, no par value of the Company, comprising all of the
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issued and outstanding shares of capital stock of the Company and representing
his entire ownership of equity securities of the Company, in exchange for the
number of shares of common stock, par value $.001, of the Purchaser equal to an
amount of $1,500,000, as follows: In calculating the number of shares of the
value of common stock to which shareholder shall be entitled, each share of
common stock shall be the per share price to the stock is sold in the IPO. The
public at which the common Shareholder's shares will not be registered under the
Securities Act of 1933 and will be legended to that effect. The Shareholder's
shares shall be issued and delivered thirteen months from the Closing of the
IPO. It is the intention of the parties that this transaction qualify as a
reorganization within the meaning of Section 368(a)(B) of the Internal Revenue
Code of 1986, as amended.
2.2 CONSULTING AND NON COMPETITION AQREEMENTS: Prior to the Closing, the
Purchaser will enter into a consulting and non-competition agreement
with the Shareholder (the "Consulting and Non-Competition Agreement")
in the form annexed hereto as EXHIBIT 2.2 which agreement will take
effect as of the Closing Date.
2.3 RIGHT OF FIRST REFUSAL: In the event that this Agreement is not
consummated, for any reason and until the Loan is repaid, the Purchaser
shall have a right of first refusal, for a period of ninety days, after
receipt of written notice, to meet the terms of any other offer for the
common stock and/or business of the Company. In
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the event the Purchaser, in its discretion decides not to meet such
terms and the terms of the offer are subsequently changed, the
Purchaser shall be given an additional thirty days to meet the revised
terms of any said Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDER AND THE COMPANY
The Shareholder and the Company make the following representations and
warranties to the Purchaser, each of which shall be deemed material:
3.1 VALID CORPORATE EXISTENCE: OUALIFICATION: The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New York. The Company has the corporate power and authority to carry on
its business as now being conducted. The Company is duly qualified as a foreign
corporation to do business, and is in good standing in each jurisdiction where
the character of the properties owned or leased by it, or the nature of its
activities is such that the qualification as a foreign corporation in that
jurisdiction is required by law. SCHEDULE 3.1 hereto lists all jurisdictions in
which the Company is qualified to do business. Except as indicated on SCHEDULE
3.1, there is no jurisdiction in which failure to qualify would have a material
adverse effect on the Company or its assets, properties or business. A copy of
the Company's Certificate of Incorporation (certified by the
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appropriate official of the State of New York) and By-Laws and minute books
(certified by the Company's Secretary), as amended to date, which will be
delivered to the Purchaser at or prior to the Closing, are true and complete
copies of those documents as now in effect. The minute books of the Company
contain accurate records of all meetings of its Board of Directors, and
stockholders since its incorporation, and accurately reflect all transactions
referred to therein.
3.2 CAPITALIZATION: The authorized capital stock of the Company
consists of 200 shares of common stock, no par value. There is no other capital
stock authorized for issuance. As of the date hereof, there are 100 shares of
common stock validly issued and outstanding, fully paid and non-assessable and
no shares are reserved for issuance nor are there outstanding any options,
warrants, convertible instruments or other rights, agreements or commitments to
acquire common stock of the Company.
3.3 CORPORATE AUTHORITY: BINDING NATURE OF AGREEMENT: The Company has
the power to enter into this Agreement and to carry out its obligation
hereunder. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by the Board of
Directors of the Company and no other corporate proceedings on the part of the
Company are necessary to authorize the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby. This Agreement
constitutes the valid and binding obligation of the Company and is enforceable
in accordance with its terms.
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3.4 CONSENTS: Except as set forth in SCHEDULE 3.4, there are no
consents of governmental and other regulatory agencies, foreign or domestic, and
of other third parties required to be received by or on the part of the
Shareholder or the Company, to enable it to enter into and carry out this
Agreement in all material respects.
3.5 FINANCIAL STATEMENTS: The Company, prior to the Closing Date, will
deliver to the Purchaser, the Audited Financial Statements of the Company and
the Unaudited Financial Statements of the Company. All of the historical
financial statements contained in such documents will have been prepared from
the books and records of the Company. The Audited Financial Statements will be
prepared in accordance with GAAP, and fairly and accurately reflect the
financial position and condition of the Company as at the dates and for the
periods indicated. Without limiting the foregoing, at the date of the Company
Balance Sheet, the Company will have owned each of the assets included in
preparation of the Company Balance Sheet, and the valuation of such assets in
the Company Balance Sheet will not be for more than their fair saleable value
(on an item by item basis) at that date; and the Company will have no
Liabilities other than those included in the Company Balance Sheet, nor any
Liabilities in amounts in excess of the amounts included for them in the Company
Balance Sheet. The Unaudited Financial Statements to be included in the
documents described above in this Section will be prepared in a manner
consistent with the basis of
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presentation used in the Audited Financial Statements, and fairly present the
financial position and condition of the Company as, at and for the periods
indicated, subject to normal year end adjustments, none of which will be
material. From the date hereof, through the Closing Date, the Company will
continue to prepare financial statements on the same basis that it has done so
in the past, will promptly deliver the same to the Purchaser, and agrees that
from and after such delivery, the foregoing representations will be applicable
to each financial statement so prepared and delivered. The Audited Financial
Statements for the year ended May 31, 1996 will be prepared by Staff, Michaels &
Ciampino, independent certified public accountants, whose report thereon is
included therein. The Audited Financial Statements for the year ended May 31,
1995 were prepared by Xxxxxxx, Xxxxxx & Co., independent certified public
accountants, whose report thereon is included therein.
3.6 NO UNDISCLOSED LIABILITIES: Except as set forth in the Company
Balance sheet included in the Audited Financial Statements or as set forth in
SCHEDULE 3.6, the Company has no material debts, liabilities or obligations,
known or unknown, contingent or absolute, except those arising in the ordinary
course of business of the Company and consistent with past practice.
3.7 ACTIONS SINCE THE COMPANY BALANCE SHEET: Except as set forth and
reflected in this Agreement or in SCHEDULE 3.7, since the date of the Company
Balance Sheet, the Company has not:
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3.7.1 incurred any material obligation or liability, known or unknown,
absolute or contingent, except those arising in the ordinary and usual
course of its business and those incurred in connection with the
transactions contemplated by this Agreement;
3.7.2 issued or sold. or aqreed to issue or sell any capital stock of
the Company or any securities convertible into or rights to acquire any
such capital stock or any dividend or distribution declared, set aside or
paid on any such capital stock;
3.7.3 discharged or satisfied any lien or encumbrance, except in the
ordinary and usual course of business, or paid or satisfied any liability,
absolute or contingent, other than as at the Company Balance Sheet in the
ordinary and usual course of business and those incurred by this in
connection with the transactions contemplated by this Agreement;
3.7.4 made any wage or salary increases or granted any bonuses other
than wage and salary increases and bonuses granted in accordance with its
normal salary increase and bonus policies;
3.7.5 mortgaged, pledged or subjected to any lien, pledge, charge or
other encumbrance any of its properties or assets, or permitted any of its
property or assets to be subjected to any lien or other encumbrance, except
in the ordinary and usual course of business;
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3.7.6 sold, assigned or transferred any of its properties or assets,
except in the ordinary and usual course of business;
3.7.7 entered into any transaction or course of conduct not in the
ordinary and usual course of business;
3.7.8 waived any rights of substantial value, or canceled, modified or
waived any indebtedness for borrowed money held by it, except in the
ordinary and usual course of business;
3.7.9 made any loans or advances to any person or assumed, guaranteed,
endorsed or otherwise became responsible for the obligations of any person;
or
3.7.10 incurred any indebtedness for borrowed money (except for
endorsement, for collection or deposit of negotiable instruments received
in the ordinary and usual course of business).
3.8 NO ADVERSE DEVELOPMENTS: Except as set forth in SCHEDULE 3.8, since
the date of the Company Balance Sheet, there has not been:
3.8.1 any material adverse changes in the assets, properties,
operations, financial condition or prospects of the Company;
3.8.2 any damage, destruction or loss, whether covered by insurance or
not, having a material adverse effect on the business, operations,
financial condition or prospects of the Company;
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3.8.3 any entry into or termination of any material commitment,
contract, agreement or transaction affecting the Company, including,
without limitation, any material borrowing or capital expenditure or sale
or other disposition of any material asset or assets, other than this
agreement and agreements executed in the ordinary and usual course of
business;
3.8.4 any transfer of or right granted under any material lease,
license, agreement, patent, trademark, trade name or copyright;
3.8.5 default or breach by the Company in any material respect under
any contract or Permit; or
3.8.6 any event other than in the ordinary and usual course of business
which could be reasonably expected to have a material adverse effect upon
the business of the Company, and after reasonable inquiry by the
Shareholder and the Company, they know of no development or threatened
development of a nature that is, or which could be reasonably expected to
have a materially adverse effect upon the business of the Company or upon
any of its assets, properties, operations or financial condition.
3.9 TAXES: All tax returns of the Company which are due have been duly
filed and are correct and all taxes, assessments and other governmental charges
upon the Company which are shown to be due and payable thereon have been paid.
All tax returns of the Company which become due prior to the Closing shall be
timely filed by the Company. The Company does not know of any ongoing
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tax audit, proposed tax deficiency, assessment, charge or levy against it, the
payment of which is not adequately provided for on the books of the Company. The
Company will provide to the Purchaser prior to the Closing a true and correct
copy of its tax returns for the prior three years, and any returns filed
subsequent to the date hereof.
3.10 OWNERSHIP OF ASSETS: Except as set forth on SCHEDULE 3.10(i), the
Company owns outright, and has good, marketable and insurable title to all of
its assets and properties reflected in the Company Balance Sheet except as the
same may have been disposed of in the ordinary course of business since the
Company Balance Sheet date, free and clear of all liens, mortgages, pledges,
conditional sales agreements, restrictions on transfer or other encumbrances or
charges whatsoever. The Company does not own any patents, copyrights,
trademarks, trade names or other similar intangible assets except as set forth
in SCHEDULE 3.10(ii). No other person has any ownership or similar right in, or
contractual or other right to acquire any such right in, any of the Company's
assets. The Shareholder and the Company do not know of any potential action by
any party, governmental or other and no proceedings with respect thereto have
been instituted of which the Company has notice that would materially effect the
Company's ability to use and to utilize each of such assets in its business.
SCHEDULE 3.10(iii) sets forth a listing of all aircraft owned by the Company,
including a description thereof. Each such aircraft has been maintained in
accordance with Part 135 of the regulations of
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the Federal Aviation Administration, and the Company has completely and
accurately maintained all records required by Part 135 of the regulations of the
Federal Aviation Administration for such aircraft. SCHEDULE 3.10(iv) sets forth
a listing of all records required to be maintained. The Company will provide to
the Purchaser prior to the Closing a true and correct copy of all records listed
in SCHEDULE 3.10(iv). Except as set forth on SCHEDULE 3.10(v), all properties
and other assets owned by the Company or used by the Company in the conduct of
its business are in good operating condition and repair (ordinary wear and tear
excepted), are suitable for the conduct of its business as presently conducted,
have been properly maintained, and do not require any maintenance or repairs
except for routine maintenance and repairs that are not material in nature or in
cost.
3.11 INSURANCE: Polices of fire, liability, workers compensation and
other forms of insurance maintained by the Company, which are usual and
customary in the business of the Company as to amount and scope, and are
adequate to protect the Company against any reasonably foreseeable risk of loss,
including business interruption, are listed on SCHEDULE 3.11 and identifies for
each policy, the carrier, amount of coverage, annual premium, risks covered,
placing broker or agent, and other relevant information as to each. All policies
listed on SCHEDULE 3.11 have been provided to the Purchaser prior to the
Closing. All premiums have been currently paid on such policies, and all
policies will be maintained and, if necessary, renewed through the Closing Date.
Neither the Shareholder nor the Company have
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failed to give any notice or present any claim under any such policy and there
are no claims outstanding under any such policy as to which any insurance
company is denying liability or defending under a reservation of rights clause
or otherwise. Anything to the contrary herein notwithstanding in the event any
liability insurance policy is a "claims-made" policy, prior to Closing, the
Company shall purchase an extension to the policy commonly referred to as a
"tail, which shall cover all liability claims made against the Company for a
period of five (5) years after Closing, to the extent that the Company can get
this long an extension.
3.12 LITIGATION. COMPLIANCE WITH LAW: Except as set forth in SCHEDULE
3.12, there are no pending or threatened actions, suits, proceedings or
governmental investigations or reviews relating to the Company or any of its
properties, assets or business or, to the knowledge of the Shareholder or the
Company, any order, injunction, award or decree outstanding, against the Company
or against or relating to any of its properties, assets or business; and the
Shareholder and the Company, after reasonable inquiry, knows of no basis for any
such action, suits or proceedings or any such governmental investigations,
reviews, orders, injunctions or decrees. To the knowledge of the Shareholder and
the Company, the Company is not in violation of any material law, regulation,
ordinance, order, injunction, decree, award, or other requirement of any
governmental body, court or arbitrator relating to its properties, assets or
business.
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3.13 Compliance with Instruments. etc.: The Company is not:
3.13.1 in default under any indenture, agreement or instrument to which
it is a party or by which it is bound; or
3.13.2 in violation of its Certificate of Incorporation, By-Laws or of
any applicable law.
3.14 INVENTORIES: All Inventories of the Company, whether or not
reflected in the Company Balance Sheet are of a quality and quantity usable and
salable in the ordinary course of business, except for obsolete items and items
of below standard quality, all of which in the aggregate are immaterial in
amount. Items included in such Inventories are carried on the books of the
Company, and are valued on the Company Balance Sheet, at the lower of cost or
market and, in any event, at not greater than their net realizable value, on an
item-by-item basis, after appropriate deductions for cost of completion,
marketing costs, transportation expense and allocation of overhead. To the best
knowledge of the Company, the Inventory is unadulterated and does not contain
any ingredient or substances prohibited by pertinent laws, rules or regulations
and all labels for and printed materials relating to the Inventory correctly
represent the ingredients thereto and comply with all laws, rules or regulations
pertaining to the labeling of the products comprising the Inventory. SCHEDULE
3.14 hereto includes a full and complete listing of all of the Company's
inventory, if any, for items having a value of $1,000 or more.
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3.15 PERMITS AND LICENSES: The Company has all material Permits of all
federal, state, local and foreign governmental or regulatory bodies required of
it to carry on its business as presently conducted; all such Permits are in full
force and effect, and to the knowledge of the Shareholder and the Company, after
reasonable inquiry, no suspension or cancellation of any of such Permits is
threatened and the Company is in compliance with all material requirements,
standards and procedures of the federal, state, local and foreign governmental
bodies which have issued such Permits. Schedule 3.15(i) hereto lists all Permits
held by the Company in connection with its business. All Permits listed on
SCHEDULE 3.15(i) have been provided to the Purchaser prior to the Closing. As to
any such Permit that has expired or is about to expire, the Company has promptly
applied for a renewal of the same and expects the same to be renewed in the
usual course. Except as disclosed on SCHEDULE 3.15(ii) hereto, no consent of,
approval of, or notification to the authority issuing any Permit is necessary
due to the execution of this Agreement or the consummation of the Transaction.
Upon consummation of the Transaction, the Company will continue to be entitled
to all authority and benefits conferred by any such Permits and shall be
lawfully entitled to use such Permits in connection with the operations of its
business, provided the Purchaser has received, when applicable, approval for the
transfer of such permits.
3.16 TRADE NAMES: SCHEDULE 3.16 identifies each trade name, fictitious
business name, or similar name under which the Company has conducted any part of
its business since inception.
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3.17 REAL PROPERTY: The Company owns no real property and leases the
real property listed in SCHEDULE 3.17 .
3.18 INTEREST IN COMPETITOR, SUPPLIERS OR CUSTOMERS:
Except as set forth in Schedule 3.18, none of the officers, directors
or shareholders of the Company or, to the best of their knowledge, members of
their immediate families owns an interest in any person or firm which is a
competitor, supplier or customer of or to the Company or, has an existing
contractual relationship with the Company.
3.19 ACCOUNTS PAYABLE: The accounts payable reflected on the Company
Balance Sheet do, and those reflected in the most recent balance sheet included
in the Unaudited Financial Statements do, and those reflected on the books of
the Company at the time of the Closing will, reflect all amounts owed by the
Company in respect of trade accounts due and other Payables of the Company, and
the actual Liability of the Company in respect of such obligations was not and
will not be, on any of such dates, in excess of the amounts, so reflected on the
balance sheets or the books of the Company, as the case may be.
3.20 ACCOUNTS RECEIVABLE: All Accounts receivable of the Company,
whether or not reflected in the Company Balance Sheet, represent transactions in
the ordinary course of business, and are current and collectible net of any
reserves shown on such Balance Sheet (which reserves are adequate and were
calculated consistent with past practice). SCHEDULE 3.20 specifically identifies
the aging of Receivables as of December 16, 1996.
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3.21 EMPLOYEES: To their best knowledge, the Company has complied with
all laws, regulations and orders relating to the employees of its business,
including but not limited to OSHA, EEO, ERISA, and wages and hours. None of the
Company's employees is represented by any labor union or collective bargaining
agent. The Company does not maintain or make any employer contributions under
any bonus, profit sharing compensation, or other plans, agreements, trusts,
funds, or arrangements for the benefit of directors, officers or employees of,
or whose principal responsibilities relate to, the Company, and there are no
employment, consulting, severance, or indemnification arrangements, agreements,
or understandings between the Company and any current or former directors,
officers or other employees (or Affiliates thereof) of, or whose principal
responsibilities relate to, the Company. SCHEDULE 3.21 identifies all present
employees of the Company and their respective salaries. The Company is not, and
following the Closing will not be, bound by any express or implied contract or
agreement to employ, directly or as a consultant or otherwise, any person for
any specific period of time, except as set forth pursuant to the provisions
hereof.
3.22 AGREEMENTS AND OBLIGATIONS: PERFORMANCE: SCHEDULE 3.22 sets forth
a list of material agreements to which the Company is a party or is otherwise
bound. Other than these material agreements, the Company is not party to or
bound by any:
3.22.1 written or oral agreement or other contractual commitment,
understanding or obligation which
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involves aggregate payments or receipts in excess of $25,000 that cannot be
canceled on 30 days or less notice without penalty or premium or any
continuing obligation or liability;
3.22.2 contractual obligation or contractual liability of any kind to
the Shareholder which will not be canceled on or prior to the Closing
except as otherwise provided by this Agreement;
3.22.3 contract, arrangement, commitment or understanding with its
customers or any officer, employee, stockholder, director, representative
or agent thereof for the repurchase of products, sharing of fees, the
rebating of charges to such customers, bribes, kickbacks from such
customers or other similar arrangements;
3.22.4 contract for the purchase or sale of any materials, products or
supplies or for any services, which commits or will commit it for a fixed
term;
3.22.5 contract of employment with any employee not terminable at will
without penalty or premium or any continuing obligation or liability,
except as otherwise provided by this Agreement;
3.22.6 deferred compensation, bonus or incentive plan or agreement not
canceled at will without penalty or premium or any continuing obligation or
liability which will not be canceled on or prior to the Closing;
3.22.7 management or consulting agreement not terminable at will
without penalty or premium or any
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continuing obligation or liability which the Company and each such
individual agree to cancel on the Closing Date;
3.22.8 lease for real or personal property (including borrowings
thereon) license or royalty agreements;
3.22.9 union or other collective bargaining agreement;
3.22.10 agreement, commitment or understanding relating to indebtedness
for borrowed money;
3.22.11 contract which, by its terms, requires the consent of any party
thereto, to the consummation of the transactions contemplated hereby;
3.22.12 contract containing covenants limiting the freedom of the
Company to engage or compete in any line or business or with any person in
any geographical area;
3.22.13 contract or option relating to the acquisition or sale of any
business;
3.22.14 voting trust agreement or similar agreement;
3.22.15 option for the purchase of any asset, tangible or intangible;
or
3.22.16 other contract, agreement, commitment or understanding which
materially affects any of its properties, assets or business, whether
directly or indirectly, or which was entered into other than in the
ordinary course of business.
A truly and correct copy of each of the material agreements of the
Company listed in SCHEDULE 3.22 has been delivered to the Purchaser prior to the
Closing. The Company has in all material
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respects performed all material obligations required to be performed by it to
date under all agreements to which it is a party and is not in default in any
material respect under any of its agreements and has received no notice of any
default or alleged default which has not heretofore been cured or which notice
has not heretofore been withdrawn.
3.23 Cooperation with Proflight in Filing IPO: The Shareholder and the
company shall cause its officers, directors, employees, accountants and
attorneys to cooperate fully with the Purchaser in connection with the filing of
a registration statement with the Securities and Exchange Commission.
3.24 No Subsidiaries: The Company does not have any subsidiaries and
does not own directly or indirectly any equity interest in any other business or
Entity.
3.25 No Breach: Neither the execution and delivery of this Agreement
nor compliance by the Shareholder and the Company with any of the provisions
hereof nor the consummation of the transactions contemplated hereby, will:
3.25.1 violate or, alone or with notice or the passage of time, result
in the material breach or termination of, or otherwise give any contracting
party the right to terminate, or declare a default under, the terms of any
material agreement or other material document or undertaking, oral or
written to which the Company is a party or by which its properties or
assets may be bound;
3.25.2 result in the imposition of any lien, mortgage, security
interest, pledge, encumbrance, easement,
24
claim or other restriction or charge on any of the assets of the Company,
and will not alter or impair any of the assets of the Company nor the
Purchaser's ability to utilize in the same manner in which they are
currently utilized by the Company in connection with its business;
3.25.3 violate any judgment, order, injunction, decree or award
against, or binding upon, the Company or upon its properties or assets; or
3.25.4 violate any law or regulation of any jurisdiction relating to
the Company, its assets or properties.
3.26 BROKERS: All negotiations relative to this Agreement and the
Transaction contemplated hereby have been carried on directly with the Purchaser
without the intervention of any broker, finder, investment banker or other third
party. The Shareholder and the Company have not engaged, consented to, or
authorized any broker, finder, investment banker or other third party to act on
its behalf, directly or indirectly, as a broker or finder in connection with
this Agreement and the Transaction, and the Shareholder and the Company agree to
indemnify the Purchaser against, and to hold the Purchaser harmless from any
claim for brokerage or similar commission or other compensation which may be
made against the Purchaser by any third party in connection with any of the
transactions contemplated hereby which claim is based upon any action by the
Shareholder or the Company.
3.27 UNTRUE OR OMITTED FACTS: No representation, warranty, document,
certificates or other writings furnished by
25
the Shareholder or the Company in this Agreement contains any untrue statement
of a material fact, or omits to state a fact necessary in order to make such
representations, warranties or statements not materially misleading.
3.28 CUSTOMERS: During the last twelve months, (i) no customer which
accounted for more than 5% of the sales in any one of the last three fiscal
years, (ii) no customers which in the aggregate accounted for more than 10% of
the sales of the Company in any one of the last three fiscal years, and/or (iii)
no other customer of material importance to the Company, has (a) canceled,
terminated or delivered written or, to the knowledge of the Shareholder, oral
notice to the Company threatening to cancel or terminate its relationship with
the Company or (b) materially decreased or delivered written or, to the
knowledge of the Shareholder, oral notice to the Company threatening to decrease
materially its usage of the Company's services.
3.29 SHAREHOLDER'S NON-INTERFERENCE: The Shareholder agrees that from
the date hereof until five (5) years from the Closing Date, he shall not induce
or attempt to induce, or assist others in inducing or attempting to induce, any
person who was employed by the Company prior to the Closing Date and who
continues to be employed by the Company on or after the Closing Date to
terminate his or its relationship with the Company or in any other manner to
interfere with the relationship between the Company and any such person.
26
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser makes the following representations and warranties to the
Shareholder, each of which shall be deemed material:
4.1 VALID CORPORATE EXISTENCE: QUALIFICATION: The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Colorado. The Purchaser has the corporate power and authority to
carry on its business as now being conducted. The Purchaser is duly qualified as
a foreign corporation to do business, and is in good standing in each
jurisdiction where the character of the properties owned or leased by it, or the
nature of its activities is such that the qualification as a foreign corporation
in that jurisdiction is required by law. SCHEDULE 4.1 hereto lists all
jurisdiction in which the Purchaser is qualified to do business. Except as
indicated on SCHEDULE 4.1, there is no jurisdiction in which failure to qualify
would have a material adverse effect on the Purchaser or its assets, properties
or business. A copy of the Purchaser's Certificate of Incorporation (certified
by the appropriate official of the State of Colorado) and By-Laws and minute
books (certified by the Purchaser's Secretary), as amended to date, which will
be delivered to the Shareholder at or prior to the Closing, are true and
complete copies of those documents as now in effect. The minute books of the
Purchaser contain accurate records of all meetings of its Board of Directors,
and stockholders since its incorporation, and accurately reflect all
27
transactions referred to therein.
4.2 CORPORATE AUTHORITY: BINDING NATURE OF AGREEMENT: The Purchaser has
the power to enter into this Agreement and to carry out its obligation
hereunder. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by the Board of
Directors of the Purchaser and no other corporate proceedings on the part of the
Purchaser are necessary to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby. This
Agreement constitutes the valid and binding obligation of the Purchaser and is
enforceable in accordance with its terms.
4.3 CONSENTS: There are no consents of governmental and other
regulatory agencies, foreign or domestic, and of other third parties required to
be received by or on the part of the Purchaser, to enable it to enter into and
carry out this Agreement in all material respects.
4.4 BROKERS: All negotiations relative to this Agreement and the
Transaction contemplated hereby have been carried on directly with the
Shareholder and the Company without the intervention of any broker, finder,
investment banker or other third party. The Purchaser has not engaged, consented
to, or authorized any broker, finder, investment banker or other third party to
act on its behalf, directly or indirectly, as a broker or finder in connection
with this Agreement and the Transaction, and the Purchaser agrees to indemnify
the Shareholder and the Company against, and to hold the Shareholder and the
Company
28
harmless from any claim for brokerage or similar commission or other
compensation which may be made against the Shareholder or the Company by any
third party in connection with any of the transactions contemplated hereby which
claim is based upon any action by the Purchaser.
ARTICLE V
COVENANTS OF THE SHAREHOLDER AND THE COMPANY
5.1. COVENANTS OF THE SHAREHOLDER AND THE COMPANY: The Shareholder and
the Company hereby each covenant to, from and after the date hereof and until
the Closing or earlier termination of this Agreement, without the prior written
consent of the Purchaser:
5.1.1 BEST EFFORTS: To take every action reasonably required of it and
use its best efforts to satisfy the conditions to closing set forth in this
Agreement and otherwise to ensure the prompt and expedient consummation of
the Transaction substantially as contemplated by this Agreement, and will
exert all reasonable efforts to cause the Transaction to be consummated,
provided in all instances that the representations and warranties of the
Purchaser in this Agreement are and remain true and accurate and that the
covenants and agreements of the Purchaser in this Agreement are satisfied
or appear capable of being satisfied and subject, at all times, to the
right and ability of the
29
directors of the Company to satisfy their fiduciary obligations.
5.1.2 ACCESS AND INFORMATION: To afford the officers, attorneys,
accountants and other authorized representatives of the Purchaser
(collectively, the "Representatives"), free and full access, during regular
business hours and upon reasonable notice, to all of its books, records,
contracts, commitments and properties (including, without limitation, tax
returns) at the Purchaser's own expense, to review, examine and investigate
the books, records and properties of the Company to determine the accuracy
of the representations and warranties made by the Shareholder and the
Company. The Shareholder and the Company shall cause its employees,
accountants and attorneys to cooperate fully with said review, examination
and investigation. The Company shall promptly furnish to the Purchaser (i)
all communications to its directors or to its shareholders, generally, (ii)
internal monthly financial statements when and as available, and (iii) all
other information concerning its business properties and personnel as the
Purchaser may reasonably request.
5.1.3 INSURANCE: To maintain in full force and effect insurance
coverage of a type and amount customary in its business, but not less than
presently in effect.
5.1.4 DISCHARGE TAXES AND INDEBTEDNESS: To pay and discharge, as they
become due, all taxes, assessments, debts, claims and other governmental or
non-governmental
30
charges lawfully imposed upon or incurred by it or the properties and
assets of the Company, except taxes, assessments, debts, claims and charges
contested in good faith in appropriate proceedings for which the Company
shall have set aside adequate reserves for the payment of such tax,
assessment, debt, claim or charge. The Company shall provide the Purchaser,
upon the Purchaser's request, evidence of payment of such taxes,
assessments, debts, claims and charges satisfactory to the Purchaser.
5.1.5 COMPLIANCE WITH AGREEMENTS: COMPLIANCE WITH LAWS: To comply with
the terms and conditions of all material agreements, commitments or
instruments to which the Shareholder or the Company is a party or by which
he or it may be bound. The Shareholder and the Company shall duly comply in
all material respect with any material laws, ordinances, rules and
regulations of any foreign, federal, state or local government or any
agency thereof, or any writ, order or decree, and conform to all valid
requirements of governmental authorities relating to the conduct of its
business, properties and assets. The Company also covenants to file all tax
returns as they become due prior to the Closing.
5.1.6 NO INDEBTEDNESS: Not to incur any obligation or liability,
absolute or contingent, except for those incurred in the ordinary and usual
course of its business or in connection with the transactions contemplated
by this Agreement.
31
5.1.7 NO DIVIDEND, RETIREMENT OR PURCHASE OF STOCK: Not to declare or
pay any dividend or distribution, in cash or otherwise, on any shares of
stock of the Company or redeem, return, purchase or otherwise acquire
directly or indirectly any shares of stock.
5.1.8 CONDUCT OF BUSINESS PRIOR TO CLOSING:
(i) to conduct its business only in the ordinary and usual course
and make no material change in any of its business practices and
policies;
(ii) to use its best efforts to preserve its business organization
intact, to keep available the services of its present employees and
consultants and to preserve its good will;
(iii) to maintain good relationships with suppliers, lenders,
creditors, employees, customers and others having business or financial
relationships with them;
(iv) it shall not (a) amend its Certificate of Incorporation or
By-Laws or (b) split, combine, or reclassify any of its outstanding
securities;
(v) it shall not (a) adopt, enter into, or amend any bonus, profit
sharing, compensation, stock option, warrant, pension, retirement,
deferred compensation, employment, severance, termination, or other
employee benefit plan, agreement, trust fund, or arrangement for the
benefit or welfare of any officer,
32
director or employee of the Company or (b) agree to any material (in
relation to historical compensation) increase in compensation payable
or to become payable to, or any increase in the contractual term of
employment of, any such employee, except in the ordinary course of
business in accordance with past practice;
(vi) it shall not sell, lease, mortgage, encumber, or otherwise
dispose of or grant any interest in any of its assets or properties
except for sales, encumbrances and other dispositions or grants in the
ordinary course of business and consistent with past practice and
except for liens for taxes not yet due or liens or encumbrances that
are not material in amount or effect and do not impair the use of the
property, or as specifically provided for or permitted in this
Agreement;
(vii) it shall not enter into, or terminate,any material
contract, agreement, commitment, or understanding;
(viii) it will not hold any meetings of its board of directors, or
any committee thereof, or of its shareholders, without giving a
representative selected by the Purchaser the option to attend the same
(although the Company may request that such representative absent
himself during that portion of any such meeting that pertains to issues
arising under
33
this Agreement); and
(ix) it shall immediately notify the Purchaser of any event or
occurrence or emergency material to, and not in the ordinary and usual
course of business.
5.1.9 NO BREACH: Not to voluntarily take any action or do anything
which will cause a breach of or default respecting its covenants,
representations or warranties set forth herein and promptly to notify the
Purchaser of any event or fact which represents or is likely to cause such
a breach or default.
5.1.10 NO SOLICITATION: From the date hereof through the Closing Date,
the Shareholder and the Company shall not, directly or indirectly, through
any officer, employee, agents, advisors, representatives or others (i)
solicit, encourage or initiate any discussions with, or negotiate or
otherwise deal with, or provide any information to any person or Entity,
other than the Purchaser and its officers, employees, agents, advisors
or representatives, concerning the Company or relating to any merger,
acquisition or purchase of all or any portion of the assets of, or any
equity interest in the Company and (ii) except with the prior written
consent of the Purchaser, disclose, directly or indirectly, to any person
any information concerning the business and properties of the Company or
afford to any person access to the properties, books or records of the
Company. The Shareholder shall immediately
34
cease and cause to be terminated any existing discussions or negotiations
with any parties other than the Purchaser conducted heretofore with respect
to the Transaction. The Company will notify the Purchaser immediately upon
receipt of any inquiry, offer or proposal relating to any of the foregoing.
None of the foregoing shall prohibit providing information to others in a
manner in keeping with the ordinary course of business of the Company or
providing information to government authorities.
5.1.11 PUBLICITY: Prior to the Closing, any written news releases by
the Company pertaining to this Agreement or the Transaction shall be
submitted to the Purchaser for review and approval prior to release by the
Company, and shall be released only in a form approved by the Purchaser,
provided, however, that such approval shall not be unreasonably withheld,
and (b) such review and approval shall not be required, if prior review and
approval would prevent the timely and accurate dissemination of such press
release as required to comply, in the judgment of counsel, with any
applicable law, rule or policy.
5.1.12 UPDATING OF SCHEDULES AND EXHIBITS: The Company and Shareholder
shall notify the Purchaser of any changes, additions or events which may
cause any change in or addition to any Schedules and Exhibits delivered by
it under this Agreement, promptly after the occurrence of the same and at
the Closing by the delivery of updates of all Schedules and Exhibits. No
notification pursuant to this
35
Section shall be deemed to cure any breach of any representation or
warranty made in this Agreement unless the Purchaser specifically agrees
thereto in writing nor shall any such notification be considered to
constitute or give rise to a waiver by the Purchaser of any condition set
forth in this Agreement.
ARTICLE VI
COVENANTS OF THE PURCHASER
6.1. COVENANTS OF THE PURCHASER: The Purchaser hereby covenants to,
from and after the date hereof and until the Closing or earlier termination of
this Agreement:
6.1.1 BEST EFFORTS: To take every action reasonably required of in and
use its best efforts to satisfy the conditions to closing set forth in this
Agreement and otherwise to ensure the prompt and expedient consummation of
the Transaction substantially as contemplated by this Agreement, and will
exert all reasonable efforts to cause the Transaction to be consummated,
provided in all instances that the representations and warranties of the
Shareholder and the Company in this Agreement are and remain true and
accurate and that the covenants and agreements of the Shareholder and the
Company in this Agreement are satisfied or appear capable of being
satisfied and subject, at all times, to the right and ability of the
directors of the Purchaser to
36
satisfy their fiduciary obligations.
6.1.2 ELECTION TO BOARD: Upon Closing, the Purchaser shall take such
action as may be necessary to cause the Board of Directors of the Purchaser
to nominate and recommend to the shareholders of the Purchaser, as members
of the Board, for so long as the shareholder owns or has rights to own,
directly or indirectly, at least 220,000 shares of common stock, at any
annual or special meeting of stockholders of the Purchaser called for the
purpose of voting on the election of directors, or by consensual action of
shareholders of the Purchaser with respect to the election of directors,
two of the Shareholder's designees.
6.1.3 REGISTRATION OF SHAREHOLDER'S SHARES: If the Purchaser, at any
time after the IPO, proposes to register any of its securities under the
Securities Act of 1933, as amended (other than in connection with capital
raising for a merger or acquisition or pursuant to Form S-4 or Form S-8 or
other comparable form), the Purchaser shall request that the managing
underwriter or sole underwriter of such underwritten public offering
include the shares of common stock of the Shareholder (the "Registrable
Securities") in such registration. If such managing underwriter agrees to
include any of the Registrable Securities in the underwritten offering, the
Purchaser shall, at such time, give prompt written notice to the
Shareholder of its intention to effect such registration and of such
Shareholders' rights under such proposed registration, and
37
upon the request of the Shareholder delivered to the Purchaser, within
twenty (20) days after giving of such notice (which request shall specify
the Registrable Securities intended to be disposed of by such Shareholder
and the intended method of disposition thereof), the Purchaser shall
include such Registrable Securities held by such Shareholder in such
registration; provided, however, that:
(i) If, at any time after giving such written notice of the Purchaser's
intention to register any of the Shareholder's Registrable Securities
and prior to the effective date of the registration statement filed in
connection with such registration, the Purchaser shall determine for
any reason not to register or to delay the registration of such
Registrable securities, at its sole election, the Purchaser may give
written notice of such determination to the Shareholder and thereupon
shall be relieved of its obligation to register any Registrable
Securities issued or issuable in connection with such registration (but
not from its obligation to pay registration expenses in connection
therewith or to register the Registrable Securities in a subsequent
registration); and, in the case of a determination to delay a
registration, shall thereupon be permitted to delay registering any
Registrable Securities for the same period as the delay in respect of
securities being registered for the Purchaser.
38
(ii) If the managing underwriter in such underwritten offering shall
advise the Purchaser that it declines to include a portion or all of
the Registrable Securities requested by the Shareholder to be included
in the registration statement, then, distribution of all or a specified
portion of the Registrable Securities shall be excluded from such
registration statement (in case of an exclusion as to a portion of such
Registrable Securities, such portion to be allocated among the
shareholders in proportion to the respective numbers of Registrable
Securities requested to be registered by each such selling
shareholder). In such event the Purchaser shall give the Shareholder
prompt notice of the number of Registrable Securities excluded.
6.1.4 REFINANCING AND INDEMNIFICATION: (a) The Purchaser agrees to use
its best efforts to have the Shareholder and all third parties released
from all guarantees and collateral given by the Shareholder in his personal
capacity and any such third parties in connection with the Aircraft & Lease
Agreement and Schedule thereto with U.S. Bancorp Leasing and Financial. In
the event such release has not occurred by the Closing, the Purchaser shall
continue to use its best efforts to obtain such release(s). In addition,
the Purchaser hereby agrees to indemnify Shareholders and any such third
party guarantors from any and all loss or damage accruing to them as a
result of any such guarantee.
39
(b) The Purchaser agrees to use its best efforts to refinance the
equipment listed in SCHEDULE 6.1.4(b), except the leased aircraft, or (ii)
obtain releases for any personal guarantors given and collateral given by
Shareholder in his personal capacity and/or any third parties, all within 15
days from the Closing, or soon thereafter as is reasonably possible from the
Closing Date until the actions described in (i) or (ii) above have occurred. The
Purchaser shall indemnify Shareholder and any such third party guarantors from
any and all loss or damage accruing to them as a result of any such guarantees.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE SHAREHOLDER AND THE COMPANY TO CLOSE
The obligation of the Shareholder and the Company to enter into and
complete the Closing is subject to the fulfillment, prior to the Closing Date,
of each of the following conditions, any one or more of which may be waived by
the Shareholder or the Company:
7.1 CONSENTS, LICENSES AND PERMITS: The Purchasers shall have obtained
all consents, licenses, permits approvals xxx authorizations and waivers of
third parties necessary for the performance by it of all of its obligations
under this Agreement.
7.2 REPRESENTATIONS AND WARRANTIES: All representations and warranties
of the Purchaser set forth in this Agreement and in any written statement or
other document delivered pursuant
40
hereto or in connection with the Transaction contemplated hereby shall be true
in all material respects as at the Closing Date, as if made at the Closing and
as of the Closing Date.
7.3 COVENANTS: The Purchaser shall have performed and complied in all
material respects with all covenants and each of its agreements and obligations
required by this Agreement to be performed or complied with prior to or at the
Closing.
7.4 NO ACTIONS: No action, suit, proceeding or investigation shall have
been instituted against the Purchaser, and be continuing before a court or by a
governmental body or agency, or shall have been threatened and be unresolved, to
restrain or to prevent or to obtain damages in respect of, the carrying out of
the transactions contemplated hereby, or which might materially affect the right
of the Company and the Shareholder in the Transaction after the Closing Date, or
which might have a materially adverse effect thereon.
7.5 CERTIFICATE: The Shareholder and the Company shall have received a
certificate dated the Closing Date, signed by the President and Secretary of the
Purchaser as to the satisfaction of the conditions contained in Sections 7.2 and
7.3.
7.6 ADDITIONAL DOCUMENTS: The Purchaser shall have delivered all such
certified resolutions, certificates and documents as the Shareholder or the
Company or its counsel may have reasonably requested, including but not limited
to a Certificate of Good Standing and Certificate of Incorporation from the
Secretary of State of Colorado, dated no earlier than fifteen (15) days prior to
the Closing Date.
41
7.7 APPROVAL OF COUNSEL: All actions, proceedings, instruments and
documents required to carry out this Agreement or incidental thereto, and all
other related legal matters, shall have been approved as to form and substance
by counsel to the Shareholder and the Company, which opinion shall be
substantially in the form of EXHIBIT 7.7.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE
OBLIGATION OF THE PURCHASER TO CLOSE
The obligation of the Purchaser to enter into and complete the Closing
is subject to the fulfillment, prior to the Closing Date, of each of the
following conditions, any one or more of which may be waived by the Shareholder
and the Purchaser:
8.1 CONSENTS, LICENSES AND PERMITS: The Shareholder and the Company
shall have obtained all consents, licenses, permits approvals and authorizations
and waivers of third parties necessary for the performance by them of all of
their obligations under this Agreement.
8.2 REPRESENTATIONS AND WARRANTIES: All representations and warranties
of the Shareholder and the Company set forth in this Agreement and in any
written statement or other document delivered pursuant hereto or in connection
with the Transaction contemplated hereby shall be true in all material respects
as at the Closing Date, as if made at the Closing and as of the Closing Date.
42
8.3 COVENANTS: The Shareholder and the Company shall have performed and
complied in all material respects with all covenants and each of its agreements
and obligations required by this Agreement to be performed or complied with
prior to or at the Closing.
8.4 NO ACTIONS: No action, suit, proceeding or investigation shall have
been instituted, and be continuing before a court or by a governmental body or
agency, or shall have been threatened and be unresolved, to restrain or to
prevent or to obtain damages in respect of, the carrying out of the transactions
contemplated hereby, or which might materially affect the right of the Purchaser
to own or to operate or control the assets, properties and business of the
Company and/or the Shareholder after the Closing Date, or which might have a
materially adverse effect thereon.
8.5 CERTIFICATE: The Purchaser shall have received a certificate dated
the Closing Date, signed by the President and Secretary of the Company as to the
satisfaction of the conditions contained in Sections 8.2 and 8.3.
8.6 ADDITIONAL DOCUMENTS: The Shareholder and the Company shall have
delivered all such certified resolutions, certificates and documents as the
Purchaser or its counsel may have reasonably requested, including but not
limited to a Certificate of Good Standing and certified Certificate of
Incorporation from the Secretary of State of New York, dated no earlier than
fifteen (15) days prior to the Closing Date.
43
8.7 APPROVAL OF COUNSEL AND ACCOUNTANTS: All actions, proceedings,
instruments and documents required to carry out this Agreement or incidental
thereto, and all other related legal matters, shall have been approved as to
form and substance by counsel to the Purchaser, which opinion shall be
substantially in the form of EXHIBIT 8.7.
8.8 CONSULTING AND NON-COMPETITIVE AGREEMENTS: The Shareholders and the
Company shall have delivered the Consulting and Non-Competition Agreement to the
Purchaser and said agreement shall take effect on the Closing Date.
8.9 FINANCIALS: The Shareholder and the Company shall have delivered
the Audited Financial Statements and the Unaudited Financial Statements to the
Purchaser which statements shall be reasonably satisfactory to the Purchaser.
ARTICLE IX
CLOSING
9.1 LOCATION AND TIME: The Closing provided for herein shall take place
at the offices of Xxxxxxx Xxxxxxxxxx Xxxxxx Xxxxx & Xxxxx, 000 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, at 9:30 a.m., the earlier of September 1, 1997, or
within 7 days of the closing date of IPO, or at such other time and place as may
be mutually agreed to by the parties hereto. The date of the Closing is referred
to in this Agreement as the "Closing Date" or the "Closing."
44
9.2 ITEMS TO BE DELIVERED BY THE SHAREHOLDER OR THE COMPANY: At the
Closing, the Shareholder and/or the Company will deliver or cause to be
delivered to the Purchaser:
9.2.1 Stock certificate and stock power for 100 shares of common stock
of the Company;
9.2.2 The Consulting and Non Competition Agreement;
9.2.3 The certificates required by Section 8.5;
9.2.4 Such other certified resolutions, documents and certificates as
are required to be delivered by the Shareholder or the Company pursuant
to the provisions of the Agreement; and
9.2.4 Bills of Sale and Assignments of the listed Agreements, as set
forth in SCHEDULE 9.2.5.
9.3 ITEMS TO BE DELIVERED BY THE PURCHASER: At the Closing, the
Purchaser will deliver or cause to be delivered to the Shareholder:
9.3.1 The certificates required by Section 7.5; and
9.3.2 Such other certified resolutions, documents and certificates as
are required to be delivered by the Purchaser pursuant to the provisions of
the Agreement.
ARTICLE X
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
10.1 SURVIVAL: Except as set forth in SCHEDULE 10.1, the parties hereto
agree that their respective representations and warranties shall survive the
execution and delivery of this Agreement and the consummation of the
transactions provided for
45
herein, for a period of six years from the Closing Date, with the exception of
those regarding taxes set forth in Section 3.8 which shall survive until the
expiration of the respective periods within which such taxes may be assessed,
notwithstanding any investigations made by any party hereto and any knowledge
which any party may have regarding a breach of a representation or warranty by
another party.
10.2 INDEMNIFICATION BY SHAREHOLDER AND THE COMPANY: The Shareholder
and the Company shall indemnify, save and keep the Purchaser, its successors and
assigns, forever harmless against and from all liabilities, demands, claims,
actions or causes of action, assessments, losses, penalties, costs, damages or
expenses, including reasonable attorneys' fees and expenses, of every kind,
nature and description, fixed or contingent, sustained or incurred by Purchaser,
its successors or assigns arising out of, resulting from, based upon or in
connection with:
10.2.1 any representation or warranty made by the Shareholder and the
Company to the Purchaser herein or any violation of agreements or covenants or
any instrument or document delivered to Purchaser in connection herewith being
incorrect in any material respect provided a claim is asserted by the Purchaser
within six (6) years of the Closing Date.
10.2.2 the failure of the Shareholder or the Company to comply with, or
the breach by Shareholder or the Company of any of the covenants and agreements
in this Agreement to be performed by Shareholder or the Company.
The Company and the Shareholder shall be obligated to indemnify
46
and hold harmless Purchaser pursuant to this Section 10.2 only to the extent
that the aggregate of all idemnifiable losses exceeds $75,000.
10.3 INDEMNIFICATION BY THE PURCHASER: The Purchaser shall indemnify,
save and keep the Shareholder and the Company, their successors and assigns,
forever harmless against and from all liabilities, demands, claims, actions or
causes of action, assessments, losses, penalties, costs, damages or expenses,
including reasonable attorneys' fees and expenses, of every kind, nature and
description, fixed or contingent, sustained or incurred by Shareholder and the
Company, its successors or assigns arising out of, resulting from, based upon or
in connection with:
10.3.1 any representation or warranty made by Purchaser to Shareholder
or the Company herein or any violation of agreements or covenants or any
instrument or document delivered to Shareholder and the Company in connection
herewith being incorrect in any material respect provided a claim is asserted by
Shareholder or the Company within six (6) years of the Closing Date.
10.3.2 the failure of the Purchaser to comply with, or the breach by
the Purchaser of any of the covenants and agreements in this Agreement to be
performed by the Purchaser;
10.4 DEFENSE OF CLAIMS: A party entitled to indemnification hereunder
(an "Indemnified Party") agrees to notify each party required to indemnity
hereunder (an "Indemnifying Party") with reasonable promptness of any claim
asserted against it in respect
47
of which any Indemnifying Party may be liable under this Agreement, which
notification shall be accompanied by a written statement setting forth the basis
of such claim and the manner of calculation thereof. An Indemnifying Party shall
have the right to defend any such claim at its or his own expense and with
counsel of its or his choice; provided, however, that such counsel shall have
been approved by the Indemnified Party prior to engagement, which approval shall
not be unreasonably withheld or delayed; and provided further, that the
Indemnified Party may participate in such defense, if it so chooses, with its
own counsel and at its own expense.
10.5 RIGHTS WITHOUT PREJUDICE: The rights of the parties under this
Article X are without prejudice to any other rights or remedies that it may have
by reason of this Agreement or as otherwise provided by law.
ARTICLE XI
TERMINATION AND WAIVER
11.1 TERMINATION: This Agreement and the Transaction may be terminated
at any time prior to the Closing:
11.1.1 By mutual consent of the Company and the Purchaser;
11.1.2 By the Company if any of the conditions set forth in
Article VII, and by the Purchaser if any of the conditions set forth in Article
VIII hereof, shall not have been fulfilled on or prior to the Closing date, or
shall become
48
incapable of fulfillment, and shall not have been waived. In the event this
agreement is terminated as described above, this Agreement shall be void and of
no force and effect.
11.2 REPAYMENT OF LOAN: In the event this Agreement is terminated for
any reason, the parties recognize that the terms of the Loan shall remain in
effect.
11.3 REMEDIES:
11.3.1 If the Shareholder and/or the Company defaults under the
Agreement prior to Closing, the Shareholder and the Company recognize that
the Purchaser will suffer irreparable damages and that it will be
difficult, if not impossible, to compute the Purchaser's actual damages.
The parties, therefore agree, that the Shareholder and the Company's
obligations hereunder shall be subject to a decree for specific performance
by any court of competent jurisdiction. The rights set forth in this
Section 11.3.1 shall be in addition to, and not in lieu of, any other
rights and remedies available to the Purchaser at law or in equity.
11.3.2 If the Purchaser defaults under the Agreement prior to Closing,
the parties recognize that the terms of the Loan shall remain in effect.
11.4 WAIVER: Any condition to the performance of the Company,
Shareholder and the Purchaser which legally may be waived on or prior to the
Closing Date may be waived at any time by the party entitled to the benefit
thereof by action taken or authorized by an instrument in writing executed by
the relevant party or parties. The failure of any party at any time or times
49
to require performance of any provision hereof shall in no manner affect the
right of such party as a later time to enforce the same. No waiver by any party
of the breach of any term, covenant, representation or warranty contained in
this Agreement as a condition to such party's obligations hereunder shall
release or affect any liability resulting from such breach, and no waiver of any
nature, whether by conduct or otherwise, in any one or more instances, shall be
deemed to be or construed as further or continuing waiver of any such condition
or of any breach of any other term, covenant, representation or warranty of this
Agreement.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 EXPENSES: Each of the parties hereto shall bear his or its own
expenses in connection herewith, including any expenses incurred if the proposed
transaction is abandoned at any time prior to the consummation thereof.
12.2 CONFIDENTIAL INFORMATION: Each party agrees that such party and
its representatives will hold in strict confidence all information and documents
received from the other parties and, if the transactions herein contemplated
shall not be consummated, each party will continue to hold such information and
documents in strict confidence and will return to such other parties all such
documents (including the exhibits attached to this Agreement) then in such
receiving party's possession without retaining copies thereof; provided,
however, that each party's
50
obligations under this Section 12.2 to maintain such confidentiality shall not
apply to any information or documents that are in the public domain at the time
furnished by the others or that become in the public domain thereafter through
any means other than as a result of any act of the receiving party or of its
agents, officers, directors or stockholders which constitutes a breach of this
Agreement, or that are required by applicable law to be disclosed or which the
Purchaser furnishes to its attorneys, accountants, underwriters or other persons
it deems necessary or advisable in connection with the preparation of its IPO.
The parties agree that the remedy at law for any breach of this Section 12.2
will be inadequate and a non-breaching party will be entitled to injunctive
relief to compel the breaching party to perform or refrain from action required
or prohibited hereunder.
12.3 MODIFICATION, TERMINATION OR WAIVER: This Agreement may be
amended, modified, superseded or terminated, and any of the terms, covenants,
representations, warranties or conditions hereof may be waived, but only by a
written instrument executed by the party waiving compliance. The failure of any
party at any time or times to require performance of any provisions hereof shall
in no manner affect the right of such party at a later time to enforce the same.
12.4 NOTICES: All notices, requests, demands and communications under
or in respect hereof shall be deemed to have been duly given and made if in
writing (including fax) if delivered by hand or certified mail (airmail if
51
dispatched to a foreign country) to the party concerned at its address appearing
below or sent by fax to the number and with a copy as below indicated. Service
shall be deemed to be effective: so far as delivery by hand is concerned when
handed to the recipient or left at the recipient's address; by post two days
after posting (seven days if sent to a foreign country); by fax on the same day
as dispatch and receipt is confirmed. The said addresses and fax numbers are as
follows:
If to Shareholder and Company:
Xxxxx X. Xxxxxx, Xx.
00000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Tel.: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxxxx X. Xxxxxx, Xx., Esq.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
Tel.: 000-000-0000
Fax: 000-000-0000
If to Purchaser:
Xxxxx X. Xxxxxxxxx
Proflight Medical Response, Inc.
00000 Xxxx Xxxxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Tel.: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxxx X. Xxxxx, Esq.
Xxxxxxx Xxxxxxxxxx Xxxxxx Xxxxx & Xxxxx
Two Grand Central Tower
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel.: 000-000-0000
Fax.: 212-956--6852
52
The parties may change the persons, addresses and fax numbers to which the
notices or other communications are to be sent by giving written notice of any
such change in the manner provided herein for giving notice.
12.5 BINDING EFFECT AND ASSIGNMENT: This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the parties
hereto; provided, however, that no assignment of any rights or delegation of any
obligations provided for herein may be made by any party without the express
written consent of the other parties.
12.6 ENTIRE AGREEMENT: This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof.
12.7 SCHEDULES AND EXHIBITS: All schedules and exhibits annexed hereto
and the documents and instruments referred to herein or required to be delivered
simultaneously herewith or at the Closing are expressly made a part of this
Agreement as fully as though completely set forth herein, and all references to
this Agreement herein or in any of such schedules, exhibits, documents, or
instruments shall be deemed to refer to and include all such schedules,
exhibits, documents and instruments.
12.8 GOVERNING LAW: This Agreement shall be governed by, and construed
in accordance with the laws of the State of Colorado applicable to agreements
made and to be performed entirely within that State, excluding the choice of law
rules
53
thereof.
12.9 COUNTERPARTS: This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but which together shall constitute
one and the same instrument.
12.10 SECTION HEADINGS: The section headings contained in this
Agreement are inserted for conveniences of reference only and shall not affect
the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this
agreement as of the day and year first above written.
AIR RESPONSE, INC.
By: /s/ Xxxxx X. Xxxxxx, Xx.
----------------------------------
Xxxxx X. Xxxxxx, Xx.,
President
/s/ Xxxxx X. Xxxxxx, Xx.
----------------------------------
Xxxxx X. Xxxxxx, Xx.
PROFLIGHT MEDICAL RESPONSE,
INC.
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Xxxxx X. Xxxxxxxxx,
President
54
SCHEDULE 3.1
Valid Corporate Existence; Qualification
New York
SCHEDULE 3.4
Consents
None except see schedule 3.15(ii).
SCHEDULE 3.6
No Undisclosed Liabilities
None
SCHEDULE 3.7
Actions Since the Company Balance Sheet
3.7.1 The Company may have refinanced some or all of its Aircraft since the date
of the Company Balance Sheet.
3.7.9 The Company has made loans to Shareholder, some or all of which may have
been made subsequent to the date of the Company Balance Sheet.
SCHEDULE 3.8
No Adverse Developments
3.8.3 See Schedule 3.7.1
SCHEDULE 3.9
Taxes
The time for filing the New York State and Federal Tax Returns for the fiscal
year ended May 31, 1996 has been extended to February 15, 1996. It is expected
that the amount due, if any, will be minimal.
SCHEDULE 3.10
Ownership of Assets
3.10.(i) All of the Company's Aircraft are subject to liens to be specifically
identified within 30 days, except for the Aircraft identified in 7, below, which
is leased from U.S. BanCorp pursuant to a lease agreement dated June 27, 1996.
3.10.(iii) The following aircraft, except for the Aircraft identified in 7,
below, are owned by the Company:
1. 1972 Mitsubishi XX-x-00, Xxxxxxxxxxxx Xx. X0000X, Xxxxxx
Xx. 000.
2. 1976 Cessna 000X, Xxxxxxxxxxxx Xx. X00000, Xxxxxx Xx.
000X0000.
3. 1976 Piper PA-31-350, Registration No. N621PG, Serial
No. 00-0000000.
4. Cessna 000X, Xxxxxxxxxxxx Xx. X000XX, Xxxxxx Xx.
000X0000.
5. 1967 Xxxx Jet 24, Registration No. N777-MR, Serial No.
24-142.
6. Xxxx Xxx 00, Xxxxxxxxxxxx Xx. X000XX, Xxxxxx Xx. 000.
7. Xxxx Jet 25B, Registration No. N700FC, Serial No. 082.
SCHEDULE 3.12
Litigation
First Presidential Corporation v. Air Response, Inc. and Louis ("Xxxxx") Xxxxxx;
Cause No. 216,285; (Xxxxxx County, Texas)
Attached are copies of:
ORDER SUSTAINING OBJECTION OF DEFENDANT LOUIS ("XXXXX") XXXXXX TO PERSONAL
JURISDICTION AND DISMISSING CASE dated 5/20/94
Letter from Xxxxxxx X. Xxxxxxx. Esq. ("Xxxxxxx") to Staff, Maiklels, and
Ciampino, P.C. dated September 12, 1994.
Letters from Xxxxxxx to Xxxxxxx X. Xxxxxx, Xx., Esq. dated February 22 and May
17, 1995.
Additional information will be supplied prior to Closing.
[LETTERHEAD OF XXXXXXX X. XXXXXXX]
May 17, 1995
Xx. Xxxxxxx X. Xxxxxx, Xx. Esquire
Xxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
VIA FAX #315/000-0000
RE: First Presidential Corporation
v. Air Response, Inc., and
Xxxxxx ("Xxxxx") Xxxxxx; Cause
NO. 216,285; (Xxxxxx County,
Texas)
Dear Xx. Xxxxxx:
The status of the above lawsuit has not changed since my previous
correspondence regarding the status dated February 22, 1995. A copy of that
correspondence is forwarded along with this fax. The inactivity does not
necessarily mean that the case will go away. Additionally, I am forwarding a
copy of the order which dismissed Xx. Xxxxxx in his individual capacity from the
lawsuit.
Please let me know if you have any further questions.
Sincerely,
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
COG/sg
cc: Air Response, Inc.
[LETTERHEAD OF XXXXXXX X. XXXXXXX]
February 22, 1995
Xx. Xxxxxxx X. Xxxxxx, Xx. Esquire
Xxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
VIA FAX & REGULAR MAIL
RE: First Presidential Corporation
v. Air Response, Inc., and
Xxxxxx ("Xxxxx") Xxxxxx; Cause
NO. 216,285; (Xxxxxx County,
Texas)
Dear Xx. Xxxxxx:
I am writing you regarding the status of the above referenced lawsuit.
I am enclosing a copy of a status letter I previously sent regarding this case.
There has been very little activity in the months since this letters was sent.
Please let me know if you need any additional information.
Sincerely,
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
COG/sg
cc: Xxx Xxxxx
Air Response, Inc.
[LETTERHEAD OF XXXXXXX X. XXXXXXX]
September 12, 1994
Staff, Maikels, and Ciampino, P.C.
00 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
VIA FEDERAL EXPRESS
RE: First Presidential Corporation
v. Air Response, Inc., and
Xxxxxx ("Xxxxx") Xxxxxx; Cause
NO. 216,285; (Xxxxxx County,
Texas)
TO WHOM IT MAY CONCERN:
I am in receipt of a request by Air Response, Inc. that you be
furnished information about the lawsuit in Texas in which I represent Air
Response, Inc.
I. PENDING LITIGATION
A. Nature of the Litigation: The case is styled First Presidential
Corporation v. Air Response, Inc. It is pending in the County Court at Law
Number Two of Xxxxxx County, Texas. It has been given cause number 216,285. This
lawsuit arose out of a transaction occurring in early 1991 in which Air Reponse,
Inc. purchased an Mu-2 airplane from First Presidential Corporation for
approximately $300,000.00. As part of the transaction Air Response conveyed to
First Presidential a Cessna 421A airplane, a separate zero time engine and
miscellaneous parts for the Cessna airplane.
First Presidential filed this lawsuit against Air Response, Inc. in
March 1993. First Presidential's chief allegation is that the zero time engine
was not in fact a zero time engine. First Presidential has alleged several
alternative theories of recovery, i.e., common law fraud, negligent
misrepresentation, breach of contract, breach of warranty and a violation of the
Texas Deceptive Trade Practices-Consumer Protection Act. First Presidential
claims that it has been damaged in the amount of the value of the zero time
engine (approximately $30,000.00) and lost profits (approximately $70,000.00).
Additionally, First Presidential has alleged it is entitled to additional
damages, attorney's fees and costs of court. Air Response, Inc. has denied all
allegations of First Presidential.
[Letterhead of Xxxxxxx X. Xxxxxxx]
September 12, 1994
Staff, Maikels and Ciampino, P.C.
00 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
VIA FEDERAL EXPRESS
RE: First Presidential Corporation v. Air
Response, Inc. and Louis ("Xxxxx")
Xxxxxx; Cause No. 216,285; (Xxxxxx
County, Texas)
TO WHOM IT MAY CONCERN:
I am in receipt of a request by Air Response, Inc. that you be
furnished information about the lawsuit pending in Texas in which I represent
Air Response, Inc.
I. PENDING LITIGATION
A. Nature of the Litigation: The case is styled First Presidential
Corporation v. Air Response, Inc. It is pending in the County Court at Law
Number Two of Xxxxxx County, Texas. It has been given cause number 216,285. This
lawsuit arose out of a transaction occurring in early 1991 in which Air
Response, Inc. purchased an Mu-2 airplane from First Presidential Corporation
for approximately $300,000.00. As part of the transaction Air Response conveyed
to First Presidential a Cessna 421A airplane, a separate zero time engine and
miscellaneous parts for the Cessna airplane.
First Presidential filed this lawsuit against Air Response, Inc. in
March 1993. First Presidential's chief allegation is that the zero time engine
was not in fact a zero time engine. First Presidential has alleged several
alternative theories of recovery, i.e., common law fraud, negligent
misrepresentation, breach of contract, breach of warranty and a violation of the
Texas Deceptive Trade Practices-Consumer Protection Act. First Presidential
claims that it has been damaged in the amount of the value of the zero time
engine (approximately $30,000.00) and lost profits (approximately $70,000.00).
Additionally, First Presidential has alleged it is entitled to additional
damages, attorney's fees and costs of court. Air Response, Inc. has denied all
allegations of First Presidential.
Xx. Xxx Xxxxx
Vice President
Air Response, Inc.
September 9, 1994
Page 2
Staff, Maikels and Ciampino, P.C.
September 12, 1994
Page -2-
B. Progress of the Case: Air Response, Inc. initially denied that Texas
courts had jurisdiction to resolve this dispute. A hearing was held in May 1994
on this issue. The court determined that it does have jurisdiction over Air
Response, Inc. The parties have engaged in limited discovery such as responding
to requests for documents and answering interrogatories. No trial date had been
set and it will be several months before a trial date should be set. The
discovery that has been done is very limited and numerous depositions will need
to be taken by both parties before they can be ready for trial.
C. Management's Response to Litigation: Air Response, Inc. has
contested this case vigorously from the beginning because management of Air
Response, Inc. believes that this lawsuit is nothing more than a shakedown
attempt by First Presidential Corporation to recover money out of a transaction
in which First Presidential received the bulk of the consideration. Obviously if
Air Response were able to resolve the case by settlement for an amount which was
equivalent to the cost of defending the lawsuit, the undersigned would recommend
to management of Air Response to seriously consider such an offer. At this time
it is not possible to resolve the case for cost of defense.
D. Evaluation of Likelihood of an Unfavorable Outcome: As within any
lawsuit it is always extremely difficult to state a predicted outcome of the
case. In this case I do not believe that the outcome of a trial on the merits
would be unfavorable to Air Response, Inc. Nevertheless, there is always the
possibility that a case can be lost regardless of how meritorious your defense
is, or how strong your evidence is. In a jury trial no one can accurately
predict the outcome of a case. Additionally, there may be other factors that are
discovered during depositions of the parties, expert witnesses, and third party
witnesses that may affect the outcome of the case.
II. UNASSERTED CLAIMS AND ASSESSMENTS
In my opinion there are no claims that can be made by First
Presidential against Air Response, Inc. that have not already been asserted in
this lawsuit. Although the claims made by First Presidential may vary, I do not
believe that there exists any possible claim that has been unasserted by First
Presidential.
Xx. Xxx Xxxxx
Vice President
Air Response, Inc.
September 9, 1994
Page 3
Staff, Maikels and Ciampino, P.C.
September 12, 1994
Page -3-
III. TIME FRAME OF RESPONSE
This response to your auditors includes all matters of which I am aware
that existed as of May 31, 1994 through the date of this response. Any
limitations or qualifications regarding matters requested by your auditors are
identified in the previous portions of this letter along with the reasons for
such limitations.
IV. INDEBTEDNESS
As of the date of this response, Air Response, Inc. is indebted to me
for legal fees and expenses in the amount of $5,600.98 for services rendered
through September 1, 1994.
I hope this letter is sufficient for your auditors. If you or they have
any questions, please do not hesitate to contact me.
Sincerely,
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
COG/sg
Enclosures
cc: Air Response, Inc.
FIRST PRESIDENTIAL CORPORATION 'SS' IN THE COUNTY COURT
'SS'
V. 'SS' AT LAW NUMBER TWO
'SS'
AIR RESPONSE, INC. and 'SS'
LOUIS ("XXXXX") XXXXXX 'SS' XXXXXX COUNTY, TEXAS
ORDER SUSTAINING OBJECTION OF DEFENDANT LOUIS
("XXXXX") XXXXXX TO PERSONAL JURISDICTION AND DISMISSING CASE
On the 2nd day of May, 1994, a hearing was held on the special
appearance of Defendant Louis ("Xxxxx") Xxxxxx filed in this case pursuant to
Rule 120a of the Texas Rules of Civil Procedure. Defendant Xxxxxx filed a
special appearance pursuant to Rule 120a in which he objected to the
jurisdiction of this court over his person.
After considering the pleadings, the affidavits and attachments filed
by the parties, the responses of the parties to discovery, and the oral
testimony and exhibits admitted at the hearing, this Court finds that it has no
personal jurisdiction over Louis ("Xxxxx") Xxxxxx. Defendant Xxxxxx'x objection
to jurisdiction should therefore be sustained and the case against him should be
dismissed. It is accordingly
ORDERED, ADJUDGED and DECREED that the objection to jurisdiction filed
pursuant to Rule 120a by Louis ("Xxxxx") Xxxxxx is hereby sustained; that
Plaintiff's case against Louis ("Xxxxx") Xxxxxx is hereby dismissed for lack of
personal jurisdiction; that costs of court are hereby taxed against Plaintiff,
for which execution shall issue if not timely paid.
/s/ J. XXXXX XXXXXXXX
J. XXXXX XXXXXXXX
PRESIDING JUDGE
5/20/94
1
SCHEDULE 3.14
Inventory
To be supplied before the Closing.
SCHEDULE 3.15(i)
List of Permits
New York State Department of Health Certificate of Ambulance Operating
Authority to Response Medical Transport Service, Inc. for Xxxxxxxxxx, Schoharie
and Herkimer Counties, including a fixed wing variance. Approval to transfer
this permit is required.
Federal Aviation Authority Part 135 Certificate. Approval for operation
under this permit subsequent to the Closing is required.
New York State Department of Taxation and Finance - Sales Tax
Certificate of Authority, Identification Number 00-0000000. Approval of this
permit may be required.
From time to time Company performs services for Air Response South,
Inc. and during such times may operate under permits held by Air Response South,
Inc.
SCHEDULE 3.15(ii)
Permits, Consent, etc.
New York State Department of Health Certificate of Ambulance Operating
Authority to Response Medical Transport Service, Inc. for Xxxxxxxxxx, Schoharie
and Herkimer Counties, including a fixed wing variance. Approval to transfer
this permit is required.
Federal Aviation Authority Part 135 Certificate. Approval to transfer
this permit is required.
From time to time Company performs services for Air Response South,
Inc. and during such times may operate under permits held by Air Response South,
Inc. Approval to transfer those permits is required.
See Schedule 3.15(i) regarding the Sales Tax Certificate of Authority.
SCHEDULE 3.16
Trade Names
None
SCHEDULE 3.18
Interest in Competitor, Suppliers or Customers
From time to time, the Company receives services from Response Aviation, Inc.,
Response Medical Transport Services, Inc. and provides services to Air Response
South, Inc., all of which are solely owned by Shareholder.
SCHEDULE 3.2O
Accounts Receivable Aging
See attached.
AGED RECEIVABLES REPORT
12/16/96
NUMBER LAST NAME FIRST NAME CURRENT 30-60 DAYS 60-90 DAYS 91+ DAYS TOTAL
------ --------- ---------- ------- ---------- ---------- -------- -----
1557 XXXXX XXXXX 10400.00 0.00 0.00 0.00 10400.00
1549 XXXX XXXXX 15200.00 0.00 0.00 0.00 15200.00
0000 XXXXXX XXXXXXX 13100.00 0.00 0.00 0.00 13100.00
1531 XXXXXXXX XXXX 5200.00 0.00 0.00 0.00 5200.00
1375 XXXXXX XXXXXXX 0.00 0.00 3660.00 0.00 3660.00
1401 NORTH XXXX 0.00 0.00 10000.00 0.00 10000.00
1570 O'XXXXXX XXXXXX 4450.00 0.00 0.00 0.00 4450.00
1861 XXXXXX XXXXX 0.00 0.00 550.00 0.00 550.00
1563 PASCORELLA XXXXXX 4454.00 0.00 0.00 0.00 4450.00
1315 XXXXX XXXXXXX 0.00 0.00 0.00 5900.00 5900.00
1188 XXXXXXX XXXXXXX 0.00 0.00 0.00 5800.00 5800.00
1518 PRISONER 4450.00 0.00 0.00 0.00 4450.00
1521 PRISONER 5490.00 0.00 0.00 0.00 5490.00
1525 PRISONER 7288.00 0.00 0.00 0.00 7288.00
1498 PROCUREMENT ORGAN 0.00 1178.00 0.00 0.00 1178.00
5800 PROFLIGHT 17000.00 0.00 0.00 0.00 17000.00
1270 XXXXXXX XXXXXXX 0.00 0.00 0.00 3890.00 3890.00
1319 XXXXXXXX XXXXXXX 0.00 0.00 0.00 75.96 75.96
1561 XXXXXXXX VIRGINIA 5200.00 0.00 0.00 0.00 5200.00
1551 XXXXXXXXX LLADESLDA 4480.00 0.00 0.00 0.00 4480.00
1373 XXXXXXXX XXXXXXX 0.00 0.00 7498.00 0.00 7498.00
1567 XXXXXXXXXXX XXXX 8612.00 0.00 0.00 0.00 8612.00
501 XXXXXXXXXX XXXXXX 0.00 0.00 0.00 6860.00 6860.00
1103 XXXXXXXX XXXXXXX 0.00 0.00 0.00 264.70 264.70
1293 XXXXXXXXXX XXXXX 0.00 0.00 0.00 4100.00 4100.00
1444 XXXXX XXXXX 0.00 12650.00 0.00 0.00 12650.00
1458 XXXXXXXX XXXXXX 0.00 5252.00 0.00 0.00 5252.00
1548 XXXXX XXXXXXX 6800.00 0.00 0.00 0.00 6800.00
445 STARFLIGHT AVIATION 0.00 16600.00 0.00 0.00 16600.00
2900 SUNCOAST CHARTER 0.00 0.00 0.00 2262.00 2262.00
1493 XXXXXX XXXXXX 0.00 11880.00 0.00 0.00 11880.00
0000 XXXXXXX XXXXX 6225.00 0.00 0.00 0.00 6225.00
1181 XXXXXX XXXXXX 0.00 0.00 0.00 3360.00 3360.00
1085 XXXXXXX XXXXXX 0.00 0.00 0.00 907.00 907.00
1900 TRANSNORTH 0.00 0.00 3100.00 0.00 3100.00
0000 XXXXXX XXXXXXX 4850.00 0.00 0.00 0.00 4850.00
1501 XXXXXX XXXXXX 0.00 3600.00 0.00 0.00 3600.00
--------- --------- -------- -------- ---------
TOTAL DOLLARS 282663.00 168578.00 85712.00 67605.86 604558.86
(2)
AGED RECEIVABLES REPORT
12/16/96
FLAG DESCRIPTION CURRENT 30-60 DAYS 60-90 DAYS 91+ DAYS TOTAL
---- ----------- ------- ---------- ---------- -------- -----
B BROKER TRIPS 24540.00 0.00 0.00 0.00 24540.00
C COMMERICAL INSURANCE 17516.00 0.00 0.00 0.00 17516.00
D PRIVATE PAY 37200.00 0.00 0.00 0.00 37200.00
B1 BROKER 0-15 65060.00 8400.00 0.00 0.00 73460.00
C1 COMMERCIAL 0-15 111489.00 69430.00 0.00 0.00 180919.00
P1 PRIVATE PAY 0-15 26858.00 1178.00 550.00 0.00 28586.00
B2 BROKER 15-30 0.00 27500.00 0.00 0.00 27500.00
C2 COMMERCIAL INS. 15-30 0.00 27742.00 15104.00 0.00 42846.00
P2 PRIVATE PAY 15-30 0.00 34328.00 0.00 340.66 34668.66
B3 BROKER 30-45 0.00 0.00 7600.00 20762.00 28362.00
C3 COMMERCIAL INS. 30-45 0.00 0.00 62458.00 41685.00 104143.00
D3 MEDICAID CLAIMS 30-45 0.00 0.00 0.00 4100.00 4100.00
P3 PRIVATE PAY 30-45 0.00 0.00 0.00 718.20 718.20
---------- ---------- --------- --------- ----------
TOTALS 282663.00 168576.00 85712.00 67605.86 604558.86
(3)
SCHEDULE 3.17
Real Property
This is inaccurate and incomplete. To be updated prior to Closing.
Company is party to a Lease dated as of June 1, 1994 with Response Aviation,
Inc. for Company's use of hangar and office facilities at the Xxxxxx County, New
York airport.
Use of office space in Nelliston, New York
Hangar in Kentucky. Is it ARS?
SCHEDULE 3.20
Accounts Receivable Aging
See attached.
SCHEDULE 3.21
Employees
See attached. It will be updated prior to Closing.
AIR RESPONSE INC.
EMPLOYEE LIST
Active Employees Only
11/21/96
Employee Name Employee ID Title
------------- ----------- -----
XXXXX, XXXXX 129520684 Nurse
XXXXXX, XXXX X. 056440576 Nurse
BLOCK, XXXX X. 089608047 Nurse
XXXXXXXX, XXXXX 117609330 Mechanic
XXXXXX, XXX 106441638 Mechanic
CRISTIANO, XXXXXX X. 101542637 Pilot
XXXXXXXX, XXXXXX 406826809 Nurse
XXXXXX, XXXXX 172482724 Pilot
XXXX, XXXXX 088505824 Nurse
XXXXXXX, XXXXX X. 032480657 Nurse
XXXXXX, XXXXXXX X. 184460837 Pilot
XXXXXXX, XXXXXXXX 267370956 Nurse
XXXXX, A. XXXXXX 101564390 Paramedic
XXXXX, DR JOHN 067408927 Physician
XXXXXXXXX, XXXX X. 071548609 Respiratory Therapist
GROW MD, XXXXXX 403725520 Physician
XXXXXX, XXXX 407069695 Nurse
XXXXXXX, XXXXX X. 100383297 Nurse
XXXXXXXX, XXXXXX X. 405023647 Nurse
XXXX, XXXXXX X. 083609104 Paramedic
XXXXXXXX, XXXXXX X. 075447868 Mechanic
XXXX, XXXXXXX X. 091409934 Pilot
XXXX, XXXXXXX X. XXXX Pilot
XXXXXX, XXXXX X. 122500859 Nurse
XXX, XXX XXXX 213781628 Nurse
AIR RESPONSE INC.
EMPLOYEE LIST
Active Employees Only
11/21/96
Employee Name Employee ID Title
------------- ----------- -----
XXXXXXXX, XXX 402980597 Pilot
XXXXXXXX, XXXXX X. 346543097 Nurse
XXXXXX, XXXXXXXXX X. 295423287 Office
XXXXXX, XXX X. 063369350 Paramedic
XXXXX, XXXX X. 049669218 Paramedic
XXXXX, XXXX 271640686 Pilot
MOYES, XXXX XXXXX Pilot
RAGHAVAN MD, KRISHAN 121704367 Physician
RINAKI, XXXXXX 111529572 Nurse
XXXXXXX, XXXXX 049565531 Nurse
XXXXXXXX, XXXX X. 053489586 Nurse
XXXXXXX, XXXXXXX X. 122587552 Paramedic
XXXXXX, XXXXXXX X. 078462455 Mechanic
XXXXX, XXXXX X. 065606591 Nurse
XXXXXX, XXXXX X. 327463674 Nurse
XXXXXXX, XXXXX X. 087666727 Nurse
THOMSON JR., XXXXXXX X. 113688856 Nurse
XXXXXXXXXXX, XXXXXXXX 406213990 Nurse
XXXXXXXX, XXXXXX X. 034302278 Nurse
XXXXX, XXXXX X. 073480847 Nurse
WORTH, XXXXXXX 122489648 Nurse
XXXXX, XXXX X. 407314331 Nurse
SCHEDULE 3.22
Agreements and Obligations; Performance
None
All Aircraft Financing Agreements. A lease agreement covering one Aircraft.
This Schedule will be revised within 30 days to include those documents.
SCHEDULE 4.1
Colorado
SCHEDULE 6.1.4
Guarantees
All of the Aircraft financing agreements are personally guaranteed by
Shareholder, and in some instances, by third parties.
The lease of the Aircraft identified as #7 in Schedule 3.10 is personally
guaranteed by Shareholder, and in some instances, by third parties.
Any additional similar guarantees for other obligations of the Company will be
disclosed within thirty days.
