1
Exhibit 2.3
-------------------------------------------------------
INVENTORY PURCHASE AGREEMENT
AMONG
KAV INVENTORY, LLC,
AVIATION SALES COMPANY
AND
AVIATION SALES DISTRIBUTION SERVICES COMPANY
-------------
SEPTEMBER 20, 2000
-------------------------------------------------------
2
INVENTORY PURCHASE AGREEMENT
This Inventory Purchase Agreement (this "Agreement") is entered into as
of September 20, 2000 among KAV Inventory, LLC, a limited liability company
organized under the laws of the state of Delaware ("KAV"), Aviation Sales
Company, a Delaware corporation ("AVS"), and Aviation Sales Distribution
Services Company, a Delaware corporation (the "Company").
RECITALS
The Company is engaged in the redistribution of aircraft engines,
aircraft parts and aircraft engine parts through sale, lease and exchange
transactions (the "Business"). Contemporaneous with the execution of this
Agreement, Xxxxxxxxx Industries, Inc., a Delaware corporation and a 50% owner of
KAV ("Xxxxxxxxx"), is entering into an asset purchase agreement with AVS and the
Company pursuant to which Xxxxxxxxx will purchase substantially all of the
Company's business, operations, properties and assets, other than the Company's
inventory being purchased hereunder. In connection therewith, KAV desires to
purchase, and the Company desires to sell, substantially all of the Company's
inventory on the terms and subject to the conditions contained in this
Agreement.
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants
and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. As used herein, the following terms shall have the
following meanings:
"Affiliate" shall have the meaning ascribed to it in Rule
12b-2 of the General Rules and Regulations promulgated under
the Exchange Act (as hereinafter defined), as in effect on the
date hereof.
"Asset Purchase Agreement" means that certain Asset Purchase
Agreement among Xxxxxxxxx, the Company and AVS, a copy of
which is attached as EXHIBIT A hereto.
"AVS Accountants" means Xxxxxx Xxxxxxxx LLP.
3
"Business Day" means any day other than a Saturday or Sunday
or a day on which commercial banks are required or authorized
to close in Miami, Florida.
"Code" means the Internal Revenue Code of 1986 as amended, or
any successor thereto, and any rules and regulations
promulgated thereunder.
"Confidential Information" means any confidential, proprietary
or non-public information relating to the Purchased Inventory,
whether written or oral, tangible or intangible, including,
without limitation, any trade secrets, know-how, information
relating to the history, condition and status, cost basis,
pricing information, the identity and background of any
customer, prospect or supplier and any other information which
is to be treated as confidential because of any obligation
owed by the Company to a third party.
"Consignment Agreement" means that certain Consignment
Agreement between KAV and Xxxxxxxxx in the form of EXHIBIT B
attached hereto.
"Contract" means any agreement, contract, lease, note,
mortgage, indenture, loan agreement, franchise agreement,
covenant, employment agreement, lease agreement, exchange
agreement, license agreement, instrument, purchase or sales
order, commitment, undertaking or obligation, in each case,
whether written or oral, express or implied.
"Cooperation Agreement" means that certain Cooperation
Agreement between Xxxxxxxxx, AVS and the Company in the form
of EXHIBIT C attached hereto.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor thereto, and any rules and
regulations promulgated thereunder.
"Familial Affiliate" with respect to any person means any
person who is a member of the immediate family of such person
or any entity in which any such person has any beneficial
interest.
"GAAP" means generally accepted accounting principles in
effect in the United States of America from time to time.
2
4
"Governmental Authority" means any nation or government, any
state, regional, local or other political subdivision thereof,
and any entity or official exercising executive, legislative,
judicial, regulatory or administrative functions of or
pertaining to government.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, or any successor thereto, and any
rules and regulations promulgated thereunder.
"Identified Customer" means (a) any customer which has
committed in writing to purchase from the Company specified
inventory within ten (10) days after such inventory is made
available for purchase by the Company, or (b) any customer
which has committed in writing to purchase from the Company
maintenance and repair services from AVS or its Affiliates for
which work will begin within ten (10) days from the date of
such commitment and will end within the thirty (30) day period
thereafter.
"Independent Accountants" means (a) Deloitte & Touche L.L.P.
or (b) if Deloitte & Touche L.L.P. is unable or unwilling to
serve or ceases to be an Independent Firm (as hereinafter
defined), any other firm of independent certified public
accountants of national reputation which has not performed
services for Xxxxxxxxx or AVS or any of their respective
Affiliates during the preceding three (3) year period (an
"Independent Firm"), which is selected by KAV and AVS (or if
they cannot agree, by the KAV Accountants and AVS
Accountants).
"IRS" means the United States Internal Revenue Service or any
successor agency, and to the extent relevant, the United
States Department of the Treasury.
"KAV Accountants" means the firm of independent certified
public accountants of national reputation which is engaged to
perform the annual audit of the financial statements of KAV.
"KAV Operating Agreement" means that certain Operating
Agreement of KAV entered into between Xxxxxxxxx and AVS in
connection with the organization of KAV.
"KAV Senior Subordinated Adjustment Notes" means those certain
Senior Subordinated Adjustment Notes issued by KAV in the form
of EXHIBIT D attached hereto in the original principal amount
determined in accordance with this Agreement and bearing
interest
3
5
at the rate of 14% per annum, which shall be senior in right
of payment to the KAV Senior Subordinated Note - A, the KAV
Senior Subordinated Note- B and the KAV Subordinated Note and
junior in right of payment to the Senior Credit Facility.
"KAV Senior Subordinated Note - A" means that certain Senior
Subordinated Note - A issued by KAV in favor of the Company in
the form of EXHIBIT E attached hereto in an original principal
amount determined in accordance with this Agreement and
bearing interest at the rate of 14% per annum, which shall be
senior in right of payment to the KAV Subordinated Note, PARRI
PASSU in right of payment to KAV Senior Subordinated Note-B
and junior in right of payment to the Senior Credit Facility
and the KAV Senior Subordinated Adjustment Note.
"KAV Senior Subordinated Note - B" means that certain Senior
Subordinated Note - B issued by KAV in favor of the Company in
the form of EXHIBIT F attached hereto in an original principal
amount determined in accordance with this Agreement and
bearing interest at the rate of 14% per annum, which shall be
senior in right of payment to the KAV Subordinated Note, PARRI
PASSU in right of payment to KAV Senior Subordinated Note-A
and junior in right of payment to the Senior Credit Facility
and the KAV Senior Subordinated Adjustment Note.
"KAV Subordinated Note" means that certain Subordinated Note
issued by KAV to the Company in the form of EXHIBIT G attached
hereto in an original principal amount determined in
accordance with this Agreement and bearing interest at the
rate of 14% per annum, which shall be junior in right of
payment to the KAV Senior Subordinated Note-A, the KAV Senior
Subordinated Note-B, Senior Credit Facility and the KAV Senior
Subordinated Adjustment Note.
"Xxxxxxxxx Accountants" means KPMG LLP.
"Knowledge" with respect to any Person means the knowledge of
any officer of such Person who has responsibility for the
day-to-day oversight of the area of operations covered by the
Section of this Agreement in which the term "Knowledge" is
used, in each case, after due and diligent inquiry.
"Legal Requirement" means any federal, state, local,
municipal, foreign, international, multinational, or other
administrative order,
4
6
decree, constitution, law, ordinance, principle of common law,
rule, regulation, statute or treaty.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, but not
limited to, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of
or agreement to give any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction in
connection with such mortgage, pledge, security interest,
encumbrance, lien or charge).
"Material Adverse Change (or Effect)," with respect to any
Person, means a change (or effect) in condition (financial or
otherwise), properties, assets, liabilities, rights,
obligations, operations or business of such Person which
change (or effect), individually or in the aggregate, is
materially adverse to such condition (financial or otherwise),
properties, assets, liabilities, rights, obligations,
operations or business.
"Orderly Liquidation Value" shall have the meaning ascribed to
it in the Senior Credit Facility.
"Ordinary Course of Business" with respect to any Person means
actions taken by such Person consistent with the past
practices of such Person in the ordinary course of the normal
day-to-day business of such Person.
"Permitted Liens" means Liens arising by operation of law,
including, without limitation, materialmen's, mechanic's,
workmen's and repairmen's Liens, in each case, securing
Assumed Liabilities (as such term is defined in the Asset
Purchase Agreement).
"Person" means an individual, partnership, corporation,
business trust, joint stock company, estate, trust,
unincorporated association, joint venture, Governmental
Authority or other entity, of whatever nature.
"SEC" means the United States Securities and Exchange
Commission.
"Senior Credit Facility" means that certain credit facility to
be made available to KAV by Bank of America, N.A.,
individually and as agent for certain other banks party
thereto, pursuant to the Bank of America Commitment Letter.
5
7
"Subsidiary of AVS" means any Person in which AVS or any
Subsidiary of AVS (i) directly or indirectly owns
(beneficially or of record) or has the power to vote fifty
percent (50%) or more of the outstanding voting stock or other
equity interests, or (ii) otherwise controls the management or
operation.
"Tax Return" means any return (including any information
return), report, statement, schedule, notice, form or other
document or information filed with or submitted to or required
to be filed with or submitted to any Governmental Authority in
connection with or with respect to the determination,
assessment, collection or payment of any Taxes or in
connection with the administration, implementation or
enforcement of or compliance with any Legal Requirements
relating to any Tax.
"Taxes" means all taxes, including, but not limited to,
income, value added, excise, property, sales, franchise,
intangible, withholding, gift, escheat, payroll, social
security and unemployment taxes, levies, assessments, tariffs,
duties (including customs duties), deficiencies or other fees,
imposed, assessed or collected by or under the authority of
any Governmental Authority, or payable pursuant to any tax
sharing agreement or other contract relating to the sharing or
payment of any such tax, levy, assessment, tariff, duty
(including customs duties), deficiency or other fee, and any
related charge or amount, including, but not limited to, any
fine, penalty, interest or additional tax.
"Threatened" means any demand or statement that has been made
in writing or any notice that has been given in writing in
connection with a claim, charge, proceeding, dispute, action
or other matter.
1.2 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificates, reports or other documents made or
delivered pursuant hereto or thereto, unless the context otherwise requires.
(b) All terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
6
8
(c) All matters of an accounting nature in connection with
this Agreement and the transactions contemplated hereby shall, except as
expressly set forth herein, be determined in accordance with GAAP applied on a
basis consistent with prior periods.
(d) As used herein, the neuter gender shall also denote the
masculine and feminine, and the masculine gender shall also denote the neuter
and feminine, where the context so permits.
(e) Whenever the words "include," "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation."
(f) Whenever this Agreement provides for a payment to be made
by any party, such payment shall be made by wire transfer of immediately
available United States funds.
(g) When a reference is made in this Agreement to an article,
section, paragraph, clause, schedule or exhibit, such reference shall be deemed
to be to this Agreement unless otherwise indicated.
ARTICLE II
PURCHASE AND SALE OF INVENTORY
2.1 PURCHASED INVENTORY. Subject to the terms and conditions of this
Agreement, the Company agrees to and will at the Closing (as hereinafter
defined) sell, convey, transfer, assign and deliver to KAV, and KAV shall
purchase, the Purchased Inventory (as hereinafter defined), free and clear of
any Liens (other than Permitted Liens), for the consideration set forth in
Section 2.3 below. For purposes of this Agreement, the Purchased Inventory shall
mean the Company's properties and assets set forth below, wherever located, as
shall exist on the Closing Date (as hereinafter defined), whether or not
appearing on the Current Balance Sheet (as hereinafter defined):
(a) all inventory of the Company existing on the Closing Date,
including without limitation, the inventory of aircraft engines, aircraft parts
and aircraft engine parts set forth on SCHEDULE 2.1(a) to the extent that any
such inventory has not been sold or otherwise disposed of by the Company
following the date hereof and prior to the Closing Date in compliance with the
terms of this Agreement; and
(b) all data, records and other documentation in any media or
medium relating to the inventory referred to in clause (a) above.
2.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary set forth
in SECTION 2.1, the Purchased Inventory shall not include the following assets
of the Company: (a) the "Purchased Assets" as that term is defined in the Asset
Purchase Agreement, and (b) the inventory and related data, records and other
documentation (in any media or medium) identified on SCHEDULE 2.2 hereto
(collectively, the "Excluded Assets").
7
9
2.3 PURCHASE PRICE. In full consideration for the performance by AVS
and the Company of their obligations under this Agreement (including, without
limitation, the covenants set forth in Section 6.8 below) and the covenants
contained in the Non-Competition Agreement (as hereinafter defined) and the
transfer and delivery to KAV of the Purchased Inventory, KAV agrees, subject to
the terms, conditions and limitations set forth in this Agreement, (a) to pay
the Cash Purchase Price (as hereinafter defined) in the amount set forth below,
(b) to deliver the KAV Senior Subordinated Note - A and the KAV Senior
Subordinated Note - B, each in the original principal amount set forth below,
(c) to deliver the KAV Subordinated Note in the original principal amount set
forth below and (d) if applicable, to deliver the KAV Senior Subordinated
Adjustment Notes in the original principal amounts set forth below. The Purchase
Price shall be an amount equal to ninety-one percent (91%) of the Adjusted Book
Value (as hereinafter defined) of the Purchased Inventory as of the Closing
Date. For purpose hereof, the "Adjusted Book Value" shall mean the book value of
the Purchased Inventory as determined in accordance with GAAP consistent with
past practice (other than the omission of footnotes thereto which are required
to be included therein in accordance with GAAP), including, without limitation,
the establishment of reserves in accordance with GAAP consistent with the past
policies and methodologies applied by the Company in connection with the
establishment of such reserves.
2.4 PAYMENT OF ESTIMATED PURCHASE PRICE. At least two days prior to the
Closing Date, KAV and the Company shall estimate by mutual agreement the amount
of the Purchase Price based upon the books and records of the Company (the
"Estimated Purchase Price"). At the Closing, KAV shall pay to the Company the
Estimated Purchase Price (the "Closing Date Payment") as follows:
(i) an amount equal to the maximum amount which may be
borrowed by KAV on the Closing Date under the Senior
Credit Facility to purchase the Purchased Inventory
(the "Cash Purchase Price") (which the parties
acknowledge shall not exceed seventy one percent
(71%) of the Estimated Purchase Price) in cash by
wire transfer of immediately available funds;
(ii) the KAV Senior Subordinated Note - A and the KAV
Senior Subordinated Note - B, each in the original
principal amount equal to the lesser of (a) 28.5% of
the difference between the Adjusted Book Value of the
Purchased Inventory and the amount of the Cash
Purchase Price, and (b) Twenty Million Dollars
($20,000,000); and
(iii) the KAV Subordinated Note in the original principal
amount equal to the difference between (a) the
Estimated Purchase Price, and (b) the sum of the Cash
Purchase Price, the original principal amount of the
KAV Senior Subordinated Note - A and the original
principal amount of the KAV Senior Subordinated Note
- B.
2.5 PURCHASE PRICE ADJUSTMENT.
8
10
(a) Within ninety (90) days following the Closing Date, KAV
shall prepare and deliver to AVS and the Company a certificate verified as to
accuracy by the Managers of KAV appointed by Xxxxxxxxx (the "Actual Purchase
Price Certificate") setting forth the Purchase Price (the "Actual Purchase
Price").
(b) Within sixty (60) days after the Actual Purchase Price
Certificate is delivered to AVS and the Company, AVS and the Company shall give
written notice to KAV setting forth in detail any objection to the Actual
Purchase Price reflected in the Actual Purchase Price Certificate. If AVS and
the Company shall fail to provide such notice to KAV of its objection to the
Actual Purchase Price reflected in the Actual Purchase Price Certificate, then
the determination of the Actual Purchase Price by KAV as reflected in the Actual
Purchase Price Certificate shall be final and binding on the parties hereto.
(c) If within such sixty (60) day period following delivery of
the Actual Purchase Price Certificate, AVS and the Company shall give written
notice of its objection to KAV, KAV, on the one hand, and AVS and the Company on
the other hand, shall use reasonable and good-faith efforts to resolve any such
objection within the thirty (30) day period following the receipt of the notice
of objection (the "Resolution Period"). If the parties shall reach agreement on
the objections of AVS and the Company, then the Actual Purchase Price as agreed
to by the parties shall become the Actual Purchase Price for purposes of this
Agreement. If the parties are unable to reach agreement on the objections of AVS
and the Company within the Resolution Period, then the matter shall be submitted
as soon as practicable to the Independent Accountants for determination of the
Actual Purchase Price. If the parties shall submit the determination of the
Actual Purchase Price to the Independent Accountants, then the determination of
the Independent Accountants shall be final and binding on the parties and such
amount shall become the Actual Purchase Price for purposes of the remainder of
this Agreement. The parties (and their professional advisors) shall cooperate
with one another in furtherance of determining the Actual Purchase Price, and
the parties shall make reasonably available their books and records and
technically available relevant computerized reports and reasonably available
personnel in furtherance of making such determination. In connection with the
resolution of any dispute, each party shall pay its own fees and expenses,
including, without limitation, legal, accounting and consultant fees and
expenses. The cost and expense of the Independent Accountants shall be shared
equally between KAV, on the one hand, and AVS and the Company, on the other
hand.
(d) If the Estimated Purchase Price is greater than the Actual
Purchase Price, then within five (5) Business Days following receipt of the
Actual Purchase Price Certificate or, if disputed, within five (5) Business Days
following the earlier of the date on which the parties resolve the dispute or
the date of determination of the Actual Purchase Price by the Independent
Accountants, (i) the Company shall repay to KAV (for repayment to the lenders
under the Senior Credit Facility) the difference between the Estimated Purchase
Price and the Actual Purchase Price, such amount to be repaid in cash (the "Cash
Difference"), (ii) KAV shall issue to the Company and Xxxxxxxxx the KAV Senior
Subordinated Adjustment Notes in an aggregate original principal amount equal to
the difference between (a) the Cash Difference and (b) the difference between
the Cash Purchase Price and the amount which would have been paid to the Company
at Closing
9
11
pursuant to Section 2.4(i) based upon the Adjusted Book Value utilized in
determining the Actual Purchase Price, such notes to be allocated between the
Company and Xxxxxxxxx based upon each of their respective pro rata share of the
aggregate original principal amounts of the notes referred to in Sections
2.4(ii) and (iii), (iii) each of the principal face amounts of the KAV Senior
Subordinated Note - A and the KAV Senior Subordinated Note - B shall be
decreased by an amount equal to the KAV Senior Subordinated Adjustment Note
issued to Xxxxxxxxx pursuant to (ii) above, and (iv) the principal face amount
of the KAV Subordinated Note shall be reduced by an amount equal to the
difference between the principal face amount of the KAV Senior Subordinated
Adjustment Notes issued to the Company and Xxxxxxxxx pursuant to (ii) above. If
the Company shall fail to pay such amount when due, then KAV shall have the
right (but not the obligation), in addition to any other remedies which it may
have, to deem such amount to be KAV Indemnifiable Damages in accordance with
ARTICLE IX (PROVIDED, HOWEVER, that neither the KAV Indemnification Threshold
nor the KAV Indemnification Cap shall be applicable to such amount).
(e) If the Actual Purchase Price is greater than the Estimated
Purchase Price, then within five (5) Business Days following receipt of the
Actual Purchase Price Certificate or, if disputed, within five (5) Business Days
following the earlier of the date on which the parties resolve the dispute or
the date of determination of the Actual Purchase Price by the Independent
Accountants, (i) KAV shall issue to the Company the KAV Senior Subordinated
Adjustment Note in the original principal amount equal to 72.68% of the
difference between the Adjusted Book Value utilized in determining the Actual
Purchase Price and the Adjusted Book Value utilized in determining the Estimated
Purchase Price (the "Note Difference"), and (ii) the principal face amount of
the KAV Subordinated Note shall be increased by the amount equal to (a) the
Actual Purchase Price minus the Estimated Purchase Price minus (b) the Note
Difference. If KAV shall fail to issue such notes, then the Company shall have
the right (but not the obligation), in addition to any other remedies which it
may have, to deem the principal amounts of such notes to be Company
Indemnifiable Damages in accordance with ARTICLE IX (PROVIDED, HOWEVER, that
neither the Company Indemnification Threshold nor the Company Indemnification
Cap shall be applicable to such amount).
2.6 PURCHASE PRICE ALLOCATION AND TAX RETURNS. The purchase price as
determined for tax purposes only (which includes the amount of cash and other
property paid to the Company plus liabilities assumed pursuant to this
Agreement) shall be allocated among the Purchased Inventory of the Company and
the covenants set forth in SECTION 6.8 and in the Non-Competition Agreement
below by mutual agreement of the parties and shall be reflected in a certificate
signed by the parties on the Closing Date (the "Purchase Price Allocation
Certificate") (which allocation shall be subject to adjustment by the parties
upon the determination of the Actual Closing Date Payment which is made pursuant
to SECTION 2.5). The parties agree that all Tax Returns, including, without
limitation, IRS Form 8594, shall be consistent with the allocation set forth on
the Purchase Price Allocation Certificate (as adjusted) and none of KAV, AVS and
the Company shall take any position which is inconsistent therewith.
10
12
2.7 EXCLUDED LIABILITIES. The parties expressly agree that KAV shall
not assume, agree to pay or otherwise become liable for any obligation or
liability of the Company, AVS or any other Person whatsoever.
2.8 THE CLOSING. Subject to the terms and conditions of this Agreement,
the closing of the purchase and sale of the Purchased Inventory (the "Closing")
shall take place as promptly as practicable (and in any event within seven (7)
Business Days) after satisfaction or waiver of the conditions set forth in
ARTICLES VII and VIII, at the offices of Akerman, Senterfitt & Xxxxxx, P.A., Ft.
Lauderdale, Florida, or such other time and place as the parties may otherwise
agree (the "Closing Date").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF KAV
As a material inducement to the Company and AVS to enter into this
Agreement and to consummate the transactions contemplated hereby, KAV makes the
following representations and warranties to the Company and AVS:
3.1 STATUS. KAV is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the requisite power and authority to own or lease its properties and to carry on
its business as now being conducted.
3.2 POWER AND AUTHORITY. KAV has the power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. KAV has taken all actions necessary to
authorize the execution and delivery of this Agreement, the performance of its
obligations hereunder and the consummation of the transactions contemplated
hereby.
3.3 ENFORCEABILITY. This Agreement has been duly executed and delivered
by KAV and constitutes a legal, valid and binding obligation of KAV, enforceable
against KAV in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles regardless of whether such enforceability is considered in a
proceeding at law or in equity.
3.4 NO VIOLATION. None of the execution or delivery of this Agreement
by KAV, the performance by KAV of its obligations hereunder or the consummation
by it of the transactions contemplated by this Agreement will (i) contravene any
provision of the KAV Operating Agreement and other organizational documents of
KAV, each as amended to date, (ii) violate or conflict with any law, statute,
ordinance, rule, regulation, decree, writ, injunction, judgment or order of any
Governmental Authority or of any arbitration award which is either applicable
to, binding upon or enforceable against KAV, except to the extent that such
violation or conflict would not have a
11
13
Material Adverse Effect on KAV, (iii) conflict with, result in any breach of, or
constitute a default (or an event which would, with the passage of time or the
giving of notice or both, constitute a default) under, or give rise to a right
to terminate, amend, modify, abandon or accelerate, any Contract which is
applicable to, binding upon or enforceable against KAV, (iv) result in or
require the creation or imposition of any Lien upon or with respect to any of
the property or assets of KAV or (v) require the consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, any court or tribunal or any other Person, except any SEC and other
filings required to be made by KAV and any filings required to be made by the
parties under the HSR Act, if any.
3.5 NO COMMISSIONS. KAV has not incurred any obligation for any
finder's or broker's or agent's fees or commissions or similar compensation in
connection with the transactions contemplated hereby, other than fees which will
be paid by, and are the sole obligation of, KAV.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND AVS
As a material inducement to KAV to enter into this Agreement and to
consummate the transactions contemplated hereby, the Company and AVS, jointly
and severally, make the following representations and warranties to KAV:
4.1 CORPORATE STATUS. Each of the Company and AVS is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite power and authority to own or lease its
properties and to carry on its business as now being conducted. There is no
pending or Threatened proceeding for the dissolution, liquidation, insolvency or
rehabilitation of the Company or AVS.
4.2 POWER AND AUTHORITY. Each of the Company and AVS has the corporate
power and authority to execute and deliver this Agreement, to perform its
respective obligations hereunder and to consummate the transactions contemplated
hereby. Each of the Company and AVS has taken all corporate action necessary to
authorize the execution and delivery of this Agreement, the performance of its
obligations hereunder and the consummation of the transactions contemplated
hereby.
4.3 ENFORCEABILITY. This Agreement has been duly executed and delivered
by each of the Company and AVS, and constitutes the legal, valid and binding
obligation of each of them, enforceable against each of them in accordance with
their terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.
12
14
4.4 SHAREHOLDERS. AVS owns beneficially and of record all of the issued
and outstanding shares of capital stock of the Company.
4.5 CORPORATE INFORMATION. SCHEDULE 4.5 contains a list of (a) any name
(including, without limitation, any assumed or fictitious name) used by the
Company and any Affiliates of the Company that owned or otherwise controlled any
portion of the Purchased Inventory during the last five (5) years (including,
but not limited to Caribe Aviation, Inc. and Aerocell Structures, Inc. and their
respective Subsidiaries), in each case, since the date of its organization (a
"Purchased Inventory Affiliate"), (b) any merger or business acquisition
undertaken by the Company since the date of its organization, (c) any principal
place of business or chief executive office maintained by the Company since the
date of its organization, (d) all other offices and places of business
maintained by the Company since the date of its organization, and (e) all other
locations where the Purchased Inventory is located.
4.6 NO VIOLATION. Except as set forth on SCHEDULE 4.6, none of the
execution or delivery of this Agreement or the Asset Purchase Agreement by the
Company or AVS, the performance by the Company or AVS of their respective
obligations hereunder or under the Asset Purchase Agreement or the consummation
by the Company or AVS of the transactions contemplated hereby or under the Asset
Purchase Agreement will (i) contravene any provision of the Certificate of
Incorporation or Bylaws (or other organizational documents), as amended to date,
of the Company or AVS, (ii) violate or conflict with any Legal Requirement or
any decree, writ, injunction, judgment or order of any Governmental Authority or
of any arbitration award which is either applicable to, binding upon or
enforceable against the Company or AVS, except to the extent such violation or
conflict would not have a Material Adverse Effect on the Company, the Business
or the Purchased Inventory, (iii) conflict with, result in any breach of, or
constitute a default (or an event which would, with the passage of time or the
giving of notice or both, constitute a default) under, or give rise to a right
to terminate, amend, modify, abandon or accelerate, any Assumed Contract (as
such term is defined in the Asset Purchase Agreement), (iv) result in or require
the creation or imposition of any Lien upon or with respect to any of the
property or assets of either the Company or AVS, or (v) require the consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority, any court or tribunal or any other Person, except any
SEC filings required to be made by the parties and any filings required to be
made by the parties under the HSR Act, if any.
4.7 SUBSIDIARIES. Except as set forth on SCHEDULE 4.7, the Company does
not own, directly or indirectly, any outstanding voting securities of or other
interests in, or control, any corporation, partnership, joint venture or other
business entity.
4.8 FINANCIAL STATEMENTS. The Company and AVS have delivered to KAV (i)
the unaudited balance sheets of the Company at December 31, 1998 and 1999 and
the related unaudited statements of income of the Company for the fiscal years
ended December 31, 1998 and 1999 (the "Annual Financial Statements"), and (ii)
the unaudited balance sheet of the Company at June 30, 2000 and the related
unaudited statement of income for the six months ended June 30, 2000 (the
"Interim Financial Statements", and together with the Annual Financial
Statements, the "Financial
13
15
Statements" (copies of which are attached to SCHEDULE 4.8 hereto). The balance
sheet of the Company dated as of June 30, 2000 included in the Interim Financial
Statements is referred to herein as the "Current Balance Sheet." The Financial
Statements fairly present the financial position of the Company at each of the
balance sheet dates and the results of operations for the periods covered
thereby, and have been prepared in accordance with GAAP consistently applied
throughout the periods indicated (other than the omission of footnotes thereto
which are required to be included therein in accordance with GAAP).
4.9 CHANGES SINCE THE CURRENT BALANCE SHEET DATE. Since the date of the
Current Balance Sheet, the Company has operated in the Ordinary Course of
Business, there has not been a Material Adverse Change in the Company or the
Business and, except as set forth on SCHEDULE 4.9, the Company has not (i) paid
any bonus to or increased the rate of compensation of any of its officers or
salaried employees other than in the Ordinary Course of Business; (ii) sold,
leased or transferred any of its properties or assets other than (x) the sale of
inventory in the Ordinary Course of Business and (y) the sale of assets other
than inventory in an aggregate amount not exceeding Two Hundred Fifty Thousand
Dollars ($250,000); (iii) made or obligated itself to make capital expenditures
in excess of One Hundred Thousand Dollars ($100,000) in the aggregate not shown
on the Current Balance Sheet (as defined in the Asset Purchase Agreement); (iv)
incurred any obligations or liabilities (including any Indebtedness) or entered
into any transaction or series of transactions outside the Ordinary Course of
Business involving in excess of One Hundred Thousand Dollars ($100,000) in the
aggregate; (v) suffered any theft, damage, destruction, casualty loss or
extraordinary loss, whether or not covered by insurance and whether or not a
timely claim was filed with respect thereto, in excess of Fifty Thousand Dollars
($50,000) in the aggregate; (vi) waived, canceled, compromised or released any
rights having a value in excess of Fifty Thousand Dollars ($50,000) in the
aggregate other than in the Ordinary Course of Business; (vii) made or adopted
any change in its accounting practice or policies; (viii) made any adjustment to
its books or records other than in respect of the conduct of its business
activities in the Ordinary Course of Business; (ix) entered into any transaction
with any Affiliate other than in the Ordinary Course of Business; (x) entered
into any employment or consulting agreement; (xi) imposed any security interest
or other Lien on any of the Purchased Inventory; (xii) made or pledged any
charitable contributions in excess of Ten Thousand Dollars ($10,000) in the
aggregate; (xiii) entered into any other transaction or, to the Knowledge of the
Company or AVS, been subject to any event which has or may have a Material
Adverse Effect on the Company, the Business or the Purchased Inventory; or (xiv)
agreed to do or authorized any of the foregoing.
4.10 LITIGATION. Except as disclosed on SCHEDULE 4.10 hereto, there is
no action, suit, or other legal or administrative proceeding or governmental
investigation pending or Threatened by or against the Company or any of the
Purchased Inventory or which relates to or questions the validity or
enforceability of this Agreement or the transactions contemplated hereby. There
are no outstanding orders, decrees or stipulations issued by any Governmental
Authority in any proceeding to which the Company is or was a party which have
not been complied with in full by the Company or which continue to impose any
material obligations on the Company or which may have a Material Adverse Effect
on the Company, the Business or the Purchased Inventory.
14
16
4.11 ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE 4.11:
(a) The Company (as defined in clause (g) below) is and has at
all times been in compliance with all Environmental Laws (as defined in clause
(g) below) governing its business, operations, properties and assets, including,
without limitation: (i) all requirements relating to the Discharge (as defined
in clause (g) below) and Handling (as defined in clause (g) below) of Hazardous
Substances (as defined in clause (g) below); (ii) all requirements relating to
notice, record keeping and reporting; (iii) all requirements relating to
obtaining and maintaining Licenses (as defined in clause (g) below) for the
ownership of its properties and assets and the operation of its business as
presently conducted, including Licenses relating to the Handling and Discharge
of Hazardous Substances; and (iv) all applicable writs, orders, judgments,
injunctions, governmental communications, decrees, informational requests or
demands issued pursuant to, or arising under, any Environmental Laws.
(b) There are no non-compliance orders, warning letters,
notices of violation (collectively "Notices"), claims, suits, actions,
judgments, penalties, fines, or administrative or judicial investigations or
proceedings pending or Threatened against or involving the Company, or its
business, operations, properties, or assets, issued by any Governmental
Authority or third party with respect to any Environmental Laws or Licenses
issued to the Company thereunder in connection with, related to or arising out
of the ownership by the Company of its properties or assets or the operations of
its business, which have not been resolved to the satisfaction of the issuing
Governmental Authority or third party in a manner that would not impose any
continuing obligation on KAV or the Company.
(c) The Company has not Handled or Discharged, nor has it
allowed or arranged for any third party to Handle or Discharge, Hazardous
Substances to, at or upon: (i) any location other than a site lawfully permitted
to receive such Hazardous Substances; (ii) any real property currently or
previously owned or operated by the Company; or (iii) any site which, pursuant
to any Environmental Laws, (x) to the Knowledge of the Company, has been placed
on the National Priorities List or its state equivalent, or (y) the United
States Environmental Protection Agency or the relevant state agency or other
Governmental Authority has notified the Company that such Governmental Authority
has proposed or is proposing to place on the National Priorities List or its
state equivalent. There has not occurred, nor is there presently occurring, a
Discharge or Threatened Discharge, of any Hazardous Substance on, into or
beneath the surface of, or adjacent to, any real property currently or
previously owned or operated by the Company in an amount requiring a notice or
report to be made to a Governmental Authority or in violation of any applicable
Environmental Laws.
(d) SCHEDULE 4.11 identifies the operations and activities,
and locations thereof, which have been conducted or are being conducted by the
Company (not including any Affiliates of the Company) on any real property
currently or previously owned or operated by the Company (not including any
Affiliates of the Company) which have involved the Handling or Discharge of
Hazardous Substances.
15
17
(e) Except as set forth in SCHEDULE 4.11, the Company does not
use, nor has it used, any Aboveground Storage Tanks (as defined in clause (e)
below) or Underground Storage Tanks (as defined in clause (e) below), and there
are not now nor have there ever been any Underground Storage Tanks beneath any
real property currently or previously owned or operated by the Company that are
required to be registered under applicable Environmental Laws.
(f) SCHEDULE 4.11 identifies (i) all environmental audits,
assessments or occupational health studies undertaken by the Company or its
agents or, to the knowledge of the Company, undertaken by any Governmental
Authority, or any third party, relating to or affecting the Company (not
including any Affiliates of the Company) or any real property currently or
previously owned or operated by the Company (not including any Affiliates of the
Company); (ii) the results of any ground, water, soil, air or asbestos
monitoring undertaken by the Company or its agents or, to the Knowledge of the
Company, undertaken by any Governmental Authority or any third party, relating
to or affecting the Company (not including any Affiliates of the Company) or any
real property currently or previously owned or operated by the Company (not
including any Affiliates of the Company) which indicate the presence of
Hazardous Substances at levels requiring a notice or report to be made to a
Governmental Authority or in violation of any applicable Environmental Laws;
(iii) all material written communications between the Company and any
Governmental Authority arising under or related to Environmental Laws; and (iv)
all outstanding citations issued under OSHA (as defined in clause (g) below), or
similar state or local statutes, laws, ordinances, codes, rules, regulations,
orders, rulings, or decrees, relating to or affecting either the Company (not
including any Affiliates of the Company) or any real property currently or
previously owned or operated by the Company (not including any Affiliates of the
Company).
(g) For purposes of this Agreement (except as otherwise set
forth below), the following terms shall have the meanings ascribed to them
below:
"Aboveground Storage Tank" shall have the meaning ascribed to
such term in Section 6901 et seq., as amended, of RCRA, or any
applicable state or local statute, law, ordinance, code, rule,
regulation, order ruling, or decree governing Aboveground Storage
Tanks.
"Company" means the Company and each of its Subsidiaries for
purposes of this SECTION 4.11.
"Discharge" means any manner of spilling, leaking, dumping,
discharging, releasing or emitting, as any of such terms may further be
defined in any Environmental Law, into any medium including, without
limitation, ground water, surface water, soil or air.
"Environmental Laws" means all federal, state, regional or
local statutes, laws, rules, regulations, codes, orders, plans,
injunctions, decrees, rulings, and changes or ordinances or judicial or
administrative interpretations thereof, or similar laws of foreign
jurisdictions where the Company conducts business, whether currently in
existence or hereafter enacted
16
18
or promulgated, any of which govern (or purport to govern) or relate to
pollution, protection of the environment, public health and safety, air
emissions, water discharges, hazardous or toxic substances, solid or
hazardous waste or occupational health and safety, as any of these
terms are or may be defined in such statutes, laws, rules, regulations,
codes, orders, plans, injunctions, decrees, rulings and changes or
ordinances, or judicial or administrative interpretations thereof,
including, without limitation: the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the
Superfund Amendment and Reauthorization Act of 1986, 42 U.S.C.ss.9601,
et seq. (collectively "CERCLA"); the Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act of 1976 and
subsequent Hazardous and Solid Waste Amendments of 1984, 42
U.S.C.ss.6901 et seq. (collectively "RCRA"); the Hazardous Materials
Transportation Act, as amended, 49 U.S.C.ss.1801, et seq.; the Clean
Water Act, as amended, 33 U.S.C.ss.1311, et seq.; the Clean Air Act, as
amended (42 U.S.C.ss.7401-7642); the Toxic Substances Control Act, as
amended, 15 U.S.C.ss.2601 et seq.; the Federal Insecticide, Fungicide,
and Rodenticide Act as amended, 7 U.S.C.ss.136-136y ("FIFRA"); the
Emergency Planning and Community Right-to-Know Act of 1986 as amended,
42 U.S.C.ss.11001, et seq. (Title III of XXXX) ("EPCRA"); and the
Occupational Safety and Health Act of 1970, as amended, 29
U.S.C.ss.651, et seq. ("OSHA").
"Handle" means any manner of generating, accumulating,
storing, treating, disposing of, transporting, transferring, labeling,
handling, manufacturing or using, as any of such terms may further be
defined in any Environmental Law, of any Hazardous Substances or Waste.
"Hazardous Substances" shall be construed broadly to include
any toxic or hazardous substance, material, or waste, and any other
contaminant, pollutant or constituent thereof, including without
limitation, chemicals, compounds, by-products, petroleum or petroleum
products, and polychlorinated biphenyls, the presence of which requires
investigation or remediation under any Environmental Laws or which are
or become regulated, listed or controlled by, under or pursuant to any
Environmental Laws.
"Licenses" means all licenses, certificates, permits,
approvals and registrations.
"Subsidiary" of any Person means any corporation or other
entity in which the Person directly or indirectly owns any outstanding
voting stock or equity interests.
"Underground Storage Tank" shall have the meaning ascribed to
such term in Section 6901 ET SEQ., as amended, of RCRA, or any
applicable state or local statute, law, ordinance, code, rule,
regulation, order ruling, or decree governing Underground Storage
Tanks.
17
19
4.12 GOOD TITLE TO AND CONDITION OF ASSETS. Except as set forth on
SCHEDULE 4.12, the Company has good and marketable title to all of the Purchased
Inventory. The Company will as of the Closing Date own the Purchased Inventory
free and clear of any Liens (other than Permitted Liens), with full power to
sell, transfer and assign the same to KAV free and clear of any Liens. To the
Knowledge of the Company and AVS, SCHEDULE 2.1(a) identifies the condition
(e.g., serviceable, unserviceable, overhauled or new) of each item of Purchased
Inventory.
4.13 COMPLIANCE WITH LAWS. The Company is and has been in compliance
with all laws, regulations and orders applicable to it, its properties and
assets (in each case, owned or used by it now or in the past), and its business
and operations (as conducted by it now and in the past). The Company has not
been cited, fined or otherwise notified in writing of any asserted past or
present failure to comply with any laws, regulations or orders and no proceeding
with respect to any such violation is pending or Threatened.
4.14 EMPLOYEE BENEFIT PLANS.
(a) EMPLOYEE BENEFIT PLANS. SCHEDULE 4.14 contains a true and
complete list of each employee benefit plan as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), employee
welfare benefits plan as defined in Section 3(1) of ERISA, and each deferred
compensation, stock option, stock purchase, bonus, medical, welfare, disability,
severance or termination pay, insurance or incentive plan, and each other
employee benefit plan, program, agreement or arrangement, (whether funded or
unfunded, written or oral, qualified or nonqualified), sponsored, maintained or
contributed to or required to be contributed to by the Company, AVS, any
Affiliate of AVS or by any trade or business, whether or not incorporated, that
together with the Company, AVS or any Affiliate of AVS would be deemed a "single
employer" within the meaning of Section 4001 of ERISA (a "Company ERISA
Affiliate")(the Company, AVS, any Affiliate of AVS and any Company ERISA
Affiliate are collectively referred to as the "AVS Group"), for the benefit of
any employee, terminated employee, leased employee or former leased employee,
director, officer, shareholder or independent contractor of the AVS Group (the
"Employee Benefit Plans"). SCHEDULE 4.14 identifies each plan that is an
"employee benefit plan," within the meaning of Section 3(3) of ERISA. The AVS
Group has no liability with respect to any plan, arrangement or practice of the
type described in this SECTION 4.14 other than the Employee Benefit Plans set
forth on SCHEDULE 4.14.
(b) COMPLIANCE WITH LAW. With respect to each Employee Benefit
Plan, (i) each has been administered in compliance with its terms and with all
applicable laws, including, but not limited to, ERISA and the Code, except to
the extent that there would be no Material Adverse Effect on the Company, the
Business or the Purchased Inventory; (ii) no actions, suits, claims or disputes
are pending or Threatened, except for claims for benefits in the normal course
of the Plan; (iii) no audits, inquiries, reviews, proceedings, claims, or
demands are pending with any governmental or regulatory agency; (iv) all
material reports, returns, and similar documents required to be filed with any
governmental agency or distributed to any plan participant have been duly or
timely filed or distributed; and (v) no "prohibited transaction" has occurred
within the meaning of the applicable provisions of ERISA or the Code that would
subject the Company or AVS to any liability.
18
20
(c) QUALIFIED PLANS. With respect to each Employee Benefit
Plan intended to qualify under Code Section 401(a) or 403(a), (i) the Internal
Revenue Service has issued a favorable determination letter, true and correct
copies of which have been furnished to KAV, that such plans are qualified and
exempt from federal income taxes; (ii) no such determination letter has been
revoked nor has revocation been Threatened nor has any amendment or other action
or omission occurred with respect to any such plan since the date of its most
recent determination letter or application therefor in any respect which would
adversely affect its qualification or materially increase its costs, except for
plan changes required by the Small Business Job Protection Act of 1996 and the
Tax Reform Act of 1997; (iii) no such plan has been amended in a manner that
would require security to be provided in accordance with Section 401(a)(29) of
the Code; (iv) no reportable event (within the meaning of Section 4043 of ERISA)
has occurred, other than one for which the thirty (30) day notice requirement
has been waived; (v) as of the Closing Date, the present value of all
liabilities that would be "benefit liabilities" under Section 4001(a)(16) of
ERISA if benefits described in Code Section 411(d)(6)(B) were included will not
exceed the then current fair market value of the assets of such plan (determined
using the actuarial assumptions used for the most recent actuarial valuation for
such plan); (vi) all contributions to, and payments from and with respect to
such plans, which may have been required to be made in accordance with such
plans and, when applicable, Section 302 of ERISA or Section 412 of the Code,
have been timely made; and (vii) all such contributions to the plans, and all
payments under the plans (except those to be made from a trust qualified under
Section 401(a) of the Code) and all payments with respect to the plans
(including, without limitation, PBGC (as defined below) and insurance premiums)
for any period ending before the Closing Date that are not yet, but will be,
required to be made are properly accrued and reflected on the Current Balance
Sheet.
(d) MULTIEMPLOYER PLANS. None of the Employee Benefit Plans is
a multiemployer plan, as described in Section 4001(a)(3) of ERISA.
(e) WELFARE PLANS. (i) The AVS Group is not obligated under
any employee welfare benefit plan as described in Section 3(1) of ERISA
("Welfare Plan") to provide medical or death benefits with respect to any
employee or former employee of the Company or its predecessors after termination
of employment, except as required by applicable law; (ii) the AVS Group has
complied with the notice and continuation coverage requirements of Section 4980B
of the Code and the regulations thereunder and Part 6 of Title I of ERISA
("COBRA") and has complied with the Health Insurance Portability and
Accountability Act of 1996 ("HIPAA") with respect to each Welfare Plan that is,
or was during any taxable year for which the statute of limitations on the
assessment of federal income taxes remains, open, by consent or otherwise, a
group health plan within the meaning of Section 5000(b)(1) of the Code; (iii)
AVS and the Company will be responsible for the continued compliance of COBRA
and HIPAA with respect to any Employee Benefit Plan and all current, future and
former employees of the AVS Group covered thereby; and (iv) there are no
reserves, assets, surplus or prepaid premiums under any Welfare Plan which is an
Employee Benefit Plan. Except as set forth on SCHEDULE 4.14, the consummation of
the transactions contemplated by this Agreement will not entitle any individual
to severance pay, and will not
19
21
accelerate the time of payment or vesting, or increase the amount of
compensation, due to any individual under any Employee Benefit Plan.
(f) CONTROLLED GROUP LIABILITY. Neither the AVS Group nor any
entity that would be aggregated with it under Code Section 414(b), (c), (m) or
(o), (i) has ever terminated or withdrawn from any employee benefit plan under
circumstances resulting (or expected to result) in liability to the Pension
Benefit Guaranty Corporation ("PBGC"), the fund by which the employee benefit
plan is funded, or any employee or beneficiary for whose benefit the plan is or
was maintained (other than routine claims for benefits); (ii) has any assets
subject to (or expected to be subject to) a lien for unpaid contributions to any
employee benefit plan; (iii) has failed to pay premiums to the PBGC when due;
(iv) is subject to (or expected to be subject to) an excise tax under Code
Section 4971; (v) has engaged in any transaction which would give rise to
liability under Section 4069 or Section 4212(c) of ERISA; or (vi) has violated
Code Section 4980B or Section 601 through 608 of ERISA.
(g) OTHER LIABILITIES. (i) None of the Employee Benefit Plans
obligates the Company or AVS to pay separation, severance, termination or
similar benefits solely as a result of any transaction contemplated by this
Agreement or solely as a result of a "change of control" of the Company (as such
term is defined in Section 280G of the Code); (ii) all required or discretionary
(in accordance with historical practices) payments, premiums, contributions,
reimbursements, or accruals for all periods ending prior to or as of the Closing
Date shall have been made or properly accrued on the Current Balance Sheet or
will be properly accrued on the books and records of the Company or AVS as of
the Closing Date; and (iii) none of the Employee Benefit Plans has any unfunded
liabilities which are not reflected on the Current Balance Sheet or the books
and records of the Company or AVS.
(h) Nothing expressed or implied in this Agreement shall
obligate KAV to continue to employ any of the Company's employees following the
Closing or interfere with the right of KAV to modify the position or terms of
employment of any employee that is employed by KAV following the Closing.
(i) There are no leased employees or independent contractors
within the meaning of Section 414(n) of the Code who perform services for AVS or
the Company.
(j) KAV will not suffer any loss, cost or liability as a
result of any claim that the AVS Group or any entity that would be aggregated
with the AVS Group under Code Section 414(b), (c), (m) or (o), has not complied
with the provisions of this SECTION 4.14 with respect to each Employee Benefit
Plan maintained by any such entity.
4.15 TAX MATTERS. All Tax Returns required to be filed on or prior to
the date hereof with respect to the Company or any of its income, properties,
franchises or operations, have been timely filed where required to be filed
(including applicable extension periods), each such Tax Return has been prepared
in compliance with all applicable laws and regulations, and all such Tax Returns
are true and accurate. All Taxes due and payable by or with respect to the
Company have been fully and
20
22
timely paid or are accrued on the Current Balance Sheet and adequate reserves or
accruals for Taxes have been provided in its books and records with respect to
any period for which Tax Returns have not yet been filed or for which Taxes are
not yet due and payable. Except as set forth on SCHEDULE 4.15: (i) no deficiency
or proposed adjustment which has not been settled or otherwise resolved for any
amount of Taxes has been asserted or assessed by any taxing authority against
the Company; (ii) the Company has not consented to extend the time in which any
Taxes may be assessed or collected by any taxing authority; (iii) the Company
has not requested or been granted an extension of the time for filing any Tax
Return to a date later than the Closing Date; (iv) there is no action, suit,
taxing authority proceeding, or audit or claim for refund now in progress,
pending or Threatened against or with respect to the Company regarding Taxes;
(v) there are no Liens for Taxes (other than for current Taxes not yet due and
payable) upon the assets of the Company; (vi) the Company is not a party to or
bound by any tax allocation or tax sharing agreement and does not have any
current or potential contractual obligation to indemnify any other Person with
respect to Taxes; (vii) there are no Taxes due or owing or which may become due
or owing by the Company for or on account of any period for which Tax Returns
have been filed, except as reflected on the Current Balance Sheet; (viii) no
claim has ever been made by a taxing authority in a jurisdiction where the
Company does not file Tax Returns that it is or may be subject to Taxes assessed
by such jurisdiction; and (ix) the Company has withheld and paid to the
appropriate Governmental Authorities all Taxes required to be withheld and paid
in connection with payments made to other parties on a timely basis and in
accordance with all applicable laws.
4.16 INSURANCE. The Company is covered by valid, outstanding and
enforceable policies of insurance issued to it by reputable insurers covering
its properties, assets and businesses against risks of the nature normally
insured against by corporations in the same or similar lines of business and in
coverage amounts typically and reasonably carried by such corporations (the
"Insurance Policies"). Such Insurance Policies are in full force and effect, and
all premiums due thereon have been paid. Through the Closing Date, each of the
Insurance Policies will be in full force and effect. None of the Insurance
Policies will lapse or terminate as a result of the transactions contemplated by
this Agreement. The Company has complied with the provisions of such Insurance
Policies, except where such failure does not have a Material Adverse Effect on
the Company, the Business or the Purchased Inventory. SCHEDULE 4.16 contains (i)
a complete and correct list of all Insurance Policies and all amendments and
riders thereto (copies of which have been provided to KAV) and (ii) a
description of each pending claim under any of the Insurance Policies for an
amount in excess of $10,000 that relates to loss or damage to the properties,
assets or businesses of any Company. The Company has not failed to give, in a
timely manner, any notice required under any of the Insurance Policies to
preserve its rights thereunder.
4.17 RELATIONSHIP WITH AFFILIATES. Except as set forth on SCHEDULE
4.17, no officer or director of the Company, nor any Familial Affiliate has any
interest in any Purchased Inventory.
4.18 ACCURACY OF INFORMATION FURNISHED BY THE COMPANY AND/OR AVS. No
written representation made or written information included in this Agreement,
including without limitation, those contained in the various Schedules and
Exhibits attached hereto, contains any untrue statement of a material fact or
omits any material fact necessary to make the information contained herein and
21
23
therein not misleading. Neither the Company nor AVS has omitted to disclose any
material fact or information about (a) the Company or any Purchased Inventory
Affiliate, (b) the Business, or (c) the Purchased Assets, in any case, that has
or could have a Material Adverse Effect on the Business or the Purchased Assets.
4.19 NO COMMISSIONS. None of AVS, the Company or any other Affiliate of
AVS has incurred any obligation for any finder's or broker's or agent's fees or
commissions or similar compensation in connection with the transactions
contemplated hereby, other than fees which will be paid by, and are the sole
obligation of AVS, the Company or any other Affiliate of AVS.
NOTWITHSTANDING ANYTHING CONTAINED IN THIS ARTICLE OR ANY OTHER
PROVISION HEREOF, IT IS THE EXPLICIT INTENT OF EACH PARTY HERETO THAT THE
COMPANY AND AVS ARE NOT MAKING ANY REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, BEYOND THOSE EXPRESSLY GIVEN IN THIS ARTICLE IV OR IN ANY
TRANSACTION DOCUMENTS, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OR
REPRESENTATION AS TO CONDITION, MERCHANTABILITY, SUITABILITY OR FITNESS FOR A
PARTICULAR PURPOSE AS TO ANY OF THE PURCHASED INVENTORY AND, EXCEPT AS EXPRESSLY
SET FORTH HEREIN AND IN THE TRANSACTION DOCUMENTS, IT IS UNDERSTOOD THAT KAV IS
PURCHASING ALL OF THE PURCHASED INVENTORY ON AN "AS-IS" AND "WHERE-IS" BASIS. It
is understood that any cost estimates, projections or other predictions
contained or referred to in the schedules attached hereto and any cost
estimates, projections or predictions or any other information contained or
referred to in other materials that have been or shall hereafter be provided to
KAV or any of its Affiliates, agents or representatives are not and shall not be
deemed to be representations or warranties of AVS or the Company.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE CLOSING
5.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE CLOSING. AVS and the
Company covenant and agree that, between the date of this Agreement and the
Closing Date, the business of the Company shall be conducted only in, and the
Company shall not take any action except in, the Ordinary Course of Business. By
way of amplification and not limitation, the Company shall not (and AVS shall
not permit the Company to), between the date of this Agreement and the Closing
Date, except as set forth in SCHEDULE 5.1, directly or indirectly, do or propose
or agree to do any of the following without the prior written consent of
Xxxxxxxxx:
(a) sell, pledge, dispose of, encumber, exchange or lease, or
authorize the sale, pledge, disposition, exchange or lease of, or grant of an
encumbrance on, any of the Purchased Inventory, except sales of inventory in the
Ordinary Course of Business;
22
24
(b) purchase any inventory having a purchase price in excess
of Twenty Thousand Dollars ($20,000) per item and One Hundred Thousand Dollars
($100,000) in the aggregate, other than for purchases of inventory for sale to
an Identified Customer;
(c) in any way modify or amend any accounting policies or
procedures used in the preparation of the Current Balance Sheet; or
(d) agree, in writing or otherwise, to take or authorize any
of the foregoing actions.
In the event that the Company shall desire to take any action covered by
subparagraph (b) above, the Company shall request the consent of KAV on any
Business Day by speaking with Zivi Nedivi, Xxxx Xxx Xxxxx and Xxxxx Xxxxxx (or
any one of them that the Company can reach) in person or by telephone at the
telephone numbers set forth in SCHEDULE 5.1(a) and simultaneously confirming
such request by e-mail to each such person at the e-mail addresses set forth on
SCHEDULE 5.1(a). In the event that none of the foregoing persons respond to a
request made pursuant to such procedures by 11:59 p.m. of the next Business Day,
KAV shall be deemed to have granted its consent to such request. In the event
that KAV shall respond to any such request (either approving or disapproving of
a proposed transaction), it shall thereafter confirm its response by return
e-mail to the sender of the e-mail request and if such response shall be a
disapproval, it shall include a reason therefor.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 FURTHER ASSURANCES. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby.
6.2 COMPLIANCE WITH COVENANTS. At the Closing, the Company and AVS
covenant and agree to deliver to KAV the certificates, opinions and other
documents required to be delivered to KAV pursuant to ARTICLE VII, and KAV
covenants and agrees to deliver to the Company the certificates and other
documents required to be delivered to the Company pursuant to ARTICLE VIII.
6.3 COOPERATION. Each of the parties agrees to use its best efforts to
cooperate with the others in the preparation and filing of all forms,
notifications, reports and information, if any, required or deemed advisable
pursuant to any law, rule or regulation (including, without limitation, any
rules or regulations of any securities exchange upon which the securities of
Xxxxxxxxx or AVS may be listed or traded) in connection with the transactions
contemplated by this Agreement, and to use its best efforts to agree jointly on
a method to overcome any objections by any Governmental Authority to any such
transactions. AVS and the Company shall, and shall cause the AVS
23
25
Accountants to cooperate with the Xxxxxxxxx Accountants and the KAV Accountants
from time to time in connection with any audit of the assets, properties and
business of KAV, including, without limitation, the execution and delivery by
AVS and the Company of customary audit representation letters.
6.4 HSR ACT AND OTHER ACTIONS. Each of the parties hereto shall (i)
make promptly (and in no event later than five (5) Business Days following the
execution of this Agreement) its respective filings, if any, and thereafter make
any other required submissions, under the HSR Act, with respect to the
transactions contemplated hereby, and shall seek early termination of the
applicable waiting period under the HSR Act, (ii) take all appropriate
reasonable actions, and do, or cause to be done, all things necessary, proper or
advisable under any applicable laws, rules and regulations and Contracts to
consummate and make effective the transactions contemplated herein, including,
without limitation, obtaining all licenses, permits, consents, approvals,
authorizations, qualifications and orders of any Governmental Authority and
parties to Contracts with the Company as are necessary for it to consummate the
transactions contemplated hereby, (iii) make on a prompt and timely basis all
governmental or regulatory notifications and filings required to be made by it
to consummate and make effective the transactions contemplated hereby, (iv)
defend all lawsuits or other legal proceedings brought against it which
challenge this Agreement or the consummation of the transactions contemplated
hereby, and (v) take all actions necessary or advisable to lift or rescind any
injunction or restraining order or other order adversely affecting its ability
to consummate the transactions contemplated hereby. The filing fees associated
with the required filings by KAV under the HSR Act shall be split between AVS
and the Company, on the one hand, and Xxxxxxxxx on the other hand.
6.5 CONFIDENTIALITY; PUBLICITY. No party hereto or their respective
Affiliates, employees, agents or representatives shall disclose to any third
party the existence of this Agreement or the subject matter or terms hereof and
no party hereto shall issue any press release or other public announcement
related to this Agreement or the transactions contemplated hereby, in each such
case, except (a) with the prior approval of the other parties, (b) if such party
believes in good faith such disclosure to be required by law or by the terms of
any listing agreement with or requirements of a securities exchange upon which
its securities may be listed or traded or (c) if such disclosure relates to any
legal proceeding involving Xxxxxxxxx, KAV, the Company or AVS; PROVIDED,
HOWEVER, that each party shall use commercially reasonable efforts to coordinate
with the other parties in making any public disclosure pursuant to clause (b) of
this sentence.
6.6 ACCESS TO INFORMATION. From the date hereof to the Closing Date,
the Company and AVS shall (and shall cause their directors, officers, employees,
auditors, counsel and agents to) afford Xxxxxxxxx and KAV and Xxxxxxxxx'x and
KAV's officers, employees, auditors, counsel and agents access during normal
business hours to their properties, offices and other facilities, to their
officers and employees and to all books and records, and shall furnish such
persons with all financial, operating and other data and information as may be
requested; provided, however, that any such access shall be arranged so as not
to interfere unnecessarily with the operation of the Business.
24
26
6.7 NOTIFICATION OF CERTAIN MATTERS. The Company and AVS shall give
prompt written notice to KAV of any information, fact or circumstance which
could cause any representation or warranty contained herein made by the Company
or AVS to be untrue or inaccurate, or any covenant, condition or agreement
contained herein applicable to it not to be complied with or satisfied. KAV
shall give prompt written notice to AVS and the Company of any information, fact
or circumstance which could cause any representation or warranty contained
herein made by KAV to be untrue or inaccurate, or any covenant, condition or
agreement contained herein applicable to it not to be complied with or
satisfied.
6.8 ADDITIONAL COVENANTS. In order to assure that KAV will realize the
benefits of the transactions contemplated hereby, each of AVS and the Company,
jointly and severally, agree that it will not, and will cause its Subsidiaries
not to at any time following the Closing Date, directly or indirectly, in any
way utilize, disclose, copy, reproduce or retain any confidential or proprietary
information or records of KAV in their possession or any Confidential
Information other than as permitted by the terms of the Cooperation Agreement
and the Consignment Agreement. The Company and AVS agree and acknowledge that
the restrictions contained in this SECTION 6.8 are reasonable in scope and
duration and are necessary to protect KAV after the Closing Date. The parties
agree and acknowledge that the breach of this SECTION 6.8 will cause irreparable
damage to KAV for which monetary damages will not be adequate, and upon breach
(or threatened breach) of any provision of this SECTION 6.8, KAV shall be
entitled to injunctive relief, specific performance or other equitable relief
without the need to post a bond or other security or prove special damages;
PROVIDED, HOWEVER, that this shall in no way limit any other remedies which KAV
may have (including, without limitation, the right to seek monetary damages). If
any provision of this SECTION 6.8, as applied to any party or to any
circumstance, is adjudged by a court to be invalid or unenforceable, the same
will in no way affect any other circumstance or the validity or enforceability
of the remainder of this Agreement. If any such provision, or any part thereof,
is held to be unenforceable because of the duration of such provision, the scope
of activity or the area covered thereby, the parties agree that the court making
such determination shall have the power to reduce the duration, scope and/or
area of such provision, and/or to delete specific words or phrases, and in its
reduced form, such provision shall then be enforceable and shall be enforced.
AVS and the Company hereby agree that KAV may assign, without limitation, the
foregoing restrictive covenants to any successor to or Affiliate of KAV.
6.9 NO OTHER DISCUSSIONS. From the date hereof until the Closing Date,
neither the Company or AVS nor any of their respective Affiliates, employees,
agents representatives shall (a) solicit, encourage, consider or accept any
offer from any Person to acquire all or any portion of the assets (other than in
the case of inventory, in the Ordinary Course of Business) of or any interest in
the Company, (b) participate in any negotiations or discussions with any other
Person concerning the sale of all or any portion of the assets (other than in
the case of inventory, in the Ordinary Course of Business) of or any interest in
the Company, (c) provide any non-public information about the Company (other
than to the Company's lenders or advisors or KAV and its agents and consultants
as provided herein), (d) enter into any agreement or commitment (whether or not
binding) with respect to any of the foregoing, or (e) otherwise cooperate in any
way with, or assist, facilitate or encourage any effort by any other person
seeking to acquire all or any portion of the assets (other
25
27
than in the case of inventory, in the Ordinary Course of Business) of or any
interest in the Company. The Company and AVS shall immediately notify KAV in
writing of any such inquiry or proposal which any of the Company or AVS may
receive with respect to the foregoing transactions, including the terms and
identity of the inquirer or offeror.
6.10 DELIVERY OF PURCHASED INVENTORY RECEIVED AFTER CLOSING. From and
after the Closing, KAV shall have the right and authority to collect, for the
account of KAV, all items which shall be transferred or are intended to be
transferred to KAV as part of the Purchased Inventory as provided in this
Agreement. Each of the Company and AVS agree that they will transfer or deliver
to KAV, promptly after the receipt thereof, any Purchased Inventory which AVS or
the Company receives after the Closing Date.
6.11 KAV APPOINTED ATTORNEY FOR THE COMPANY. Effective at the Closing
Date, the Company hereby constitutes and appoints KAV and its successors and
assigns, its true and lawful attorney, in the name of the Company but for the
benefit and at the expense of KAV to take any and all actions which KAV may deem
necessary in order to provide for KAV the benefits of any of the Purchased
Inventory if (i) the Company shall be party to any merger transaction in which
it is not the surviving corporation; (ii) the Company shall be liquidated or
dissolved; (iii) any court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee, liquidator or
conservator of the Company or the whole or any substantial part of the
properties of the Company or approve a petition filed against the Company
seeking liquidation, reorganization or arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute of the United
States or any state, or if there is commenced against the Company any proceeding
or petition seeking reorganization, arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute of the United
States or any state, or (iv) it shall be required to comply with any Legal
Requirement; PROVIDED, HOWEVER, KAV shall not exercise any such
power-of-attorney unless it shall have first requested that the Company or any
successor thereto take such actions and five (5) Business Days shall have passed
without such actions having been taken. The Company acknowledges that the
foregoing powers are coupled with an interest and shall be irrevocable. KAV
shall be entitled to retain for its own account any amounts collected pursuant
to the foregoing powers, including any amounts payable as interest and penalties
in respect thereof.
6.12 EXECUTION OF FURTHER DOCUMENTS. The Company and AVS shall from and
after the Closing execute, acknowledge and deliver all such further deeds, bills
of sale, assignments, transfers, conveyances, powers of attorney and assurances
as may be requested by KAV to convey and transfer to and vest in KAV and protect
its right, title and interest in all of the Purchased Inventory and to carry out
the transactions contemplated by this Agreement.
6.13 EXECUTION OF NON-COMPETITION AGREEMENT. Prior to or at Closing,
KAV, Xxxxxxxxx, the Company and AVS shall enter into that certain
Non-Competition Agreement in the form attached hereto as EXHIBIT H.
26
28
6.14 TRANSFER OF AFFILIATE INVENTORY. Prior to or at Closing, AVS shall
cause (a) Caribe Aviation, Inc. and its Subsidiaries to transfer to the Company
the inventory set forth on SCHEDULE 6.14(a), and (b) Aerocell Structures, Inc.
and its Subsidiaries to transfer to the Company the inventory set forth on
SCHEDULE 6.14(b).
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF KAV
The obligations of KAV to effect the transactions contemplated hereby
shall be subject to the fulfillment at or prior to the Closing Date of the
following conditions, any or all of which may be waived in whole or in part in
writing by KAV:
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of the Company and AVS contained
in this Agreement shall be true and correct at and as of the Closing Date with
the same force and effect as though made at and as of that time except (i) for
changes specifically permitted by or disclosed on any schedule to this
Agreement, and (ii) that those representations and warranties which address
matters only as of a particular date shall remain true and correct as of such
date. The Company and AVS shall have performed and complied with all of their
respective obligations required by this Agreement to be performed or complied
with at or prior to the Closing Date. The Company and AVS shall have delivered
to KAV a certificate, dated as of the Closing Date, duly signed by their
respective President and Chief Financial Officer, certifying that such
representations and warranties are true and correct and that all such
obligations have been performed and complied with.
7.2 NO MATERIAL ADVERSE CHANGE OR DESTRUCTION OF PURCHASED INVENTORY.
Between the date hereof and the Closing Date, (i) there shall have been no
Material Adverse Change to the Purchased Inventory, and (ii) none of the
Purchased Inventory shall have been damaged by fire, flood, casualty, act of God
or the public enemy or other cause (regardless of insurance coverage for such
damage), which damage may have a Material Adverse Effect on the Purchased
Inventory taken as a whole thereon, and there shall have been delivered to KAV a
certificate to that effect, dated the Closing Date and duly signed by their
respective President and Chief Financial Officer to that effect.
7.3 CORPORATE CERTIFICATE. The Company and AVS shall have delivered to
KAV (i) copies of the Certificate of Incorporation and Bylaws of each of the
Company and AVS as in effect immediately prior to the Closing Date, (ii) copies
of resolutions adopted by the Board of Directors and the shareholders of the
Company, and by the Board of Directors of AVS, authorizing the transactions
contemplated by this Agreement, and (iii) a certificate of good standing for the
Company and AVS issued by the Secretary of State of the State of Delaware as of
a date not more than ten (10) Business Days prior to the Closing Date, certified
in the case of subsections (i) and (ii) of this Section as of the Closing Date
by their respective Secretary, as applicable, as being true, correct and
complete.
27
29
7.4 OPINION OF COUNSEL. KAV shall have received an opinion, dated as of
the Closing Date, from counsel for the Company and AVS addressed to KAV,
Xxxxxxxxx and the lenders party to the Senior Credit Facility in the form
attached hereto as EXHIBIT I.
7.5 CONSENTS. The Company, AVS and KAV shall each have received
consents to the transactions contemplated hereby and waivers of rights to
terminate or modify any of their respective rights or obligations from any
Person from whom such consent or waiver is required under the HSR Act or any
other Legal Requirement.
7.6 NO ADVERSE LITIGATION. There shall not be pending any action or
proceeding by or before any court or other governmental body which shall seek to
restrain, prohibit, invalidate or collect damages arising out of the
transactions contemplated hereby.
7.7 HSR ACT WAITING PERIOD. Any applicable HSR Act waiting period shall
have expired or been terminated.
7.8 CONSIGNMENT AGREEMENT. The Consignment Agreement shall have been
executed and delivered by Xxxxxxxxx.
7.9 DELIVERY OF PURCHASED INVENTORY. The Company shall have duly
executed and delivered to KAV a Xxxx of Sale and Assignment and such other
instruments of transfer of title as are reasonably necessary in the opinion of
KAV to transfer to KAV good and marketable title to the Purchased Inventory, in
each case, in form and substance satisfactory to KAV, and shall deliver to KAV
immediate possession of the Purchased Inventory free and clear of any Liens
(other than Permitted Liens).
7.10 ASSET PURCHASE AGREEMENT. The transactions contemplated by the
Asset Purchase Agreement shall have been consummated contemporaneously with the
transactions contemplated hereby.
7.11 PURCHASE PRICE ALLOCATION CERTIFICATE. The Company shall have
executed and delivered to KAV a Purchase Price Allocation Certificate which
complies with SECTION 2.6 and is reasonably acceptable to KAV.
7.12 KAV FINANCING. KAV shall have consummated the loan transaction
with Bank of America upon the terms set forth in the commitment letter attached
hereto as EXHIBIT J (the "Bank of America Commitment Letter") and such other
terms and conditions as shall be reasonably acceptable to AVS and Xxxxxxxxx.
7.13 TRANSFER OF AFFILIATE INVENTORY. The Company shall provide KAV
evidence that the transfers of inventory contemplated in SECTION 6.14 shall have
been consummated.
7.14 NON-COMPETITION AGREEMENT. The Non-Competition Agreement shall
have been executed and delivered by Xxxxxxxxx, AVS and the Company.
28
30
7.15 DEALER REGISTRATION/SALES TAX EXEMPTION. KAV shall have registered
as a dealer (or equivalent) in the States of Florida, Oklahoma and Texas and
delivered to the Company a valid resale certificate or other evidence of
exemption from sales tax for the purchase of the Purchased Inventory.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF
THE COMPANY AND AVS
The obligations of the Company and AVS to effect the transactions
contemplated hereby shall be subject to the fulfillment at or prior to the
Closing Date of the following conditions, any or all of which may be waived in
whole or in part in writing by the Company or AVS:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of KAV contained in this
Agreement shall be true and correct at and as of the Closing Date with the same
force and effect as though made at and as of that time except (i) for changes
specifically permitted by or disclosed pursuant to this Agreement, and (ii) that
those representations and warranties which address matters only as of a
particular date shall remain true and correct as of such date. KAV shall have
performed and complied with all of its obligations required by this Agreement to
be performed or complied with by it at or prior to the Closing Date. KAV shall
have delivered to the Company a certificate, dated as of the Closing Date, and
signed by its President and Chief Financial Officer, certifying that such
representations and warranties are true and correct and that all such
obligations have been complied with and performed.
8.2 CORPORATE CERTIFICATE. KAV shall have delivered to the Company and
AVS (i) copies of resolutions adopted by the Members of KAV authorizing the
transactions contemplated by this Agreement, and (ii) a certificate of good
standing for KAV issued by the Secretary of State of the State of Delaware as of
a date not more than ten (10) Business Days prior to the Closing Date, certified
in the case of subsection (i) of this Section as of the Closing Date by the
Secretary of KAV as being true, correct and complete.
8.3 PURCHASE PRICE. KAV shall have paid to the Company the Closing Date
Payment.
8.4 NO ADVERSE LITIGATION. There shall not be pending any action or
proceeding by or before any court or other governmental body, other than those
set forth on SCHEDULE 8.4, which shall seek to restrain, prohibit, invalidate or
collect damages arising out of the transactions contemplated hereby.
8.5 HSR ACT WAITING PERIOD. Any applicable HSR Act waiting period shall
have expired or been terminated.
29
31
8.6 ASSET PURCHASE AGREEMENT. The transactions contemplated by the
Asset Purchase Agreement shall have been consummated contemporaneously with the
transactions contemplated hereby.
8.7 CONSENT OF AVS SENIOR LENDERS. AVS shall have received any consent
required to be obtained from its lenders under (a) that certain Fourth Amended
and Restated Credit Agreement dated May 31, 2000, as amended, between AVS and
Citicorp USA, Inc., as Agent, and (b) that certain Participation Agreement dated
as of December 17, 1998, as amended, by and among AVS, as construction agent,
AVS, as lessee, First Security Bank, National Association, not individually,
except as expressly stated therein, but solely as Owner trustee under the
Aviation Sales Trust 1998-1, the various banks and other lending institutions
which parties thereto from time to time, as the holders, and the various banks
and other lending institutions which are parties thereto from time to time, as
the lenders, and NationsBank, National Association, as Administrative Agent for
the lenders, as amended.
8.8 PURCHASE PRICE ALLOCATION CERTIFICATE. KAV shall have executed and
delivered to the Company a Purchase Price Allocation Certificate which complies
with SECTION 2.6 and is reasonably acceptable to the Company.
ARTICLE IX
INDEMNIFICATION
9.1 AGREEMENT BY THE COMPANY AND AVS TO INDEMNIFY. The Company and AVS,
jointly and severally, agree to indemnify and hold KAV and each of its officers,
managers, members, employees, attorneys and Affiliates (each an "KAV Indemnified
Party" and collectively the "KAV Indemnified Parties") harmless from and against
the aggregate of all expenses, losses, costs, deficiencies, liabilities and
damages (including, without limitation, counsel and paralegal fees and expenses)
incurred or suffered by any of the KAV Indemnified Parties arising out of or
resulting from (i) any breach of a representation or warranty made by the
Company and AVS (or either of them) in or pursuant to this Agreement (including
the schedules hereto and any certificates executed and delivered by the Company
or AVS (or either of them) pursuant hereto or in connection herewith), (ii) any
breach of a covenant or agreement made by the Company and AVS (or either of
them) in or pursuant to this Agreement, (iii) any inaccuracy in any statement
made by the Company or AVS in any certificate, instrument or other document
delivered by the Company or AVS pursuant to or in connection with this
Agreement, (iv) any liabilities of AVS or the Company (whether or not disclosed
in this Agreement or disclosed, referenced or incorporated by reference in any
of the schedules hereto), including without limitation, any liability for Taxes
(collectively, "KAV Indemnifiable Damages"). Notwithstanding the foregoing
provisions or anything contained herein to the contrary, no claim for KAV
Indemnifiable Damages shall be asserted by the KAV Indemnified Parties until the
aggregate of all KAV Indemnifiable Damages (including, without limitation,
arising from a breach of the representations and warranties contained in the
last sentence of SECTION 4.12) exceeds Five Hundred Thousand Dollars ($500,000)
(the "KAV Indemnification Threshold"), at
30
32
which time the KAV Indemnified Parties shall be entitled to the aggregate amount
by which the KAV Indemnifiable Damages exceeds Five Hundred Thousand Dollars
($500,000). Notwithstanding the foregoing provisions or anything contained
herein to the contrary, no claim for KAV Indemnifiable Damages arising from a
breach of the representations and warranties of the Company and AVS contained in
the last sentence of SECTION 4.12 shall be asserted by the KAV Indemnified
Parties until the aggregate of all KAV Indemnifiable Damages arising from
breaches thereof exceeds Five Hundred Thousand Dollars ($500,000) ("KAV
Condition Indemnification Threshold"), at which time the KAV Indemnified Parties
shall only be entitled to the aggregate amount by which the KAV Indemnifiable
Damages arising from a breach of the representations and warranties contained in
the last sentence of SECTION 4.12 exceeds Five Hundred Thousand Dollars
($500,000). Notwithstanding anything to the contrary set forth herein, the total
KAV Indemnifiable Damages for which the Company and AVS, in the aggregate, shall
be liable hereunder shall not exceed the Purchase Price (the "KAV
Indemnification Cap"). Notwithstanding anything to the contrary set forth
herein, the KAV Indemnification Threshold, the KAV Condition Indemnification
Threshold and the KAV Indemnification Cap shall not apply and there shall be no
limitation or restriction whatsoever on the liability of the Company or AVS
under this Article IX for KAV Indemnifiable Damages with respect to any claim
relating to or arising from any one or more of the following: (i) any KAV
Indemnifiable Damages arising under subsections (ii) or (iv) of this SECTION 9.1
above, (ii) a breach of any covenant or agreement of the Company or AVS, (iii) a
breach of any one or more of the representations or warranties set forth in
SECTION 4.1, SECTION 4.2, SECTION 4.3, SECTION 4.11, the first two sentences of
SECTION 4.12 or in SECTION 4.15, or (iv) any act of fraud in connection with the
execution, delivery or performance of this Agreement, including, without
limitation, any fraudulent representation or warranty made in or pursuant to
this Agreement.
9.2 AGREEMENT BY KAV TO INDEMNIFY. KAV agrees to indemnify and hold the
Company and AVS and their respective officers, directors, shareholders,
employees, attorneys and Affiliates (each a "Company Indemnified Party" and
together the "Company Indemnified Parties") harmless from and against the
aggregate of all expenses, losses, costs, deficiencies, liabilities and damages
(including, without limitation, reasonable counsel and paralegal fees and
expenses) incurred or suffered by any of the Company Indemnified Parties arising
out of or resulting from (i) any breach of a representation or warranty made by
KAV in or pursuant to this Agreement (including the schedules hereto and any
certificates executed and delivered by KAV pursuant to or in connection
herewith), (ii) any breach of a covenant or agreement made by KAV in or pursuant
to this Agreement, and (iii) any inaccuracy in any statement made by KAV in any
certificate, instrument or other document executed and delivered by KAV pursuant
to or in connection with this Agreement (collectively, "Company Indemnifiable
Damages"). Notwithstanding the foregoing provisions or anything contained herein
to the contrary, (a) no claim for Company Indemnifiable Damages shall be
asserted by the Company Indemnified Parties until the aggregate of all Company
Indemnifiable Damages exceeds Five Hundred Thousand Dollars ($500,000) (the
"Company Indemnification Threshold"), at which time the Company Indemnified
Parties shall be entitled to the aggregate amount by which the Company
Indemnifiable Damages exceeds Five Hundred Thousand Dollars ($500,000).
Notwithstanding anything to the contrary set forth herein, the total Company
Indemnifiable Damages for which KAV shall be liable hereunder shall not exceed
the Purchase Price (the "Company Indemnification Cap"). Notwithstanding anything
to the contrary set forth herein,
31
33
the Company Indemnification Threshold and the Company Indemnification Cap shall
not apply and there shall be no limitation or restriction whatsoever on the
liability of KAV under this Article IX for Company Indemnifiable Damages with
respect to any claim relating to or arising from any one or more of the
following: (i) any Company Indemnifiable Damages arising under subsection (ii)
of this SECTION 9.2 above, (ii) a breach of any covenant or agreement by KAV
contained in this Agreement, (iii) a breach of any one or more of the
representations or warranties set forth in SECTION 3.1, SECTION 3.2 or SECTION
3.3, or (iv) any act of fraud in connection with the execution, delivery or
performance of this Agreement including, without limitation, any fraudulent
representation or warranty made in or pursuant to this Agreement.
9.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the parties in this Agreement or pursuant
hereto shall survive the closing of the transactions contemplated hereby as
follows: (i) the representations and warranties made by KAV in SECTION 3.1,
SECTION 3.2 and SECTION 3.3 shall survive indefinitely, (ii) the representations
and warranties made by AVS and the Company in SECTION 4.1, SECTION 4.2, SECTION
4.3, SECTION 4.12 and SECTION 4.15 shall survive indefinitely, and (iii) all
other representations and warranties shall expire on the last day of the
twenty-first (21st) full calendar month following the Closing Date; PROVIDED,
HOWEVER, that in the case of SECTION 9.3(iii), if any Person shall acquire all
of the issued and outstanding shares of capital stock of AVS or AVS shall merge
with any Person other than an Affiliate of AVS in a transaction in which AVS is
not the surviving entity on or prior to the last day of the eighteenth (18th)
full calendar month following the Closing Date, the representations and
warranties covered by SECTION 9.3(iii) shall expire on the later of (i) the last
day of the eighteenth (18th) full calendar month following the Closing Date, or
(ii) the thirty-first (31st) day following written notice of the consummation of
such a transaction is provided to KAV by AVS. Notwithstanding any knowledge of
facts determined or determinable by any party by investigation, each party shall
have the right to fully rely on the representations, warranties, covenants and
agreements of the other parties contained in this Agreement or in any other
documents or papers delivered in connection herewith. Each representation,
warranty, covenant and agreement of the parties contained in this Agreement is
independent of each other representation, warranty, covenant and agreement. No
claim for the recovery of any KAV Indemnifiable Damages or Company Indemnifiable
Damages with respect to the representations and warranties in this Agreement may
be asserted by any of the parties after such representations and warranties
shall expire in accordance with the terms of this Agreement; PROVIDED, HOWEVER,
that claims for KAV Indemnifiable Damages or Company Indemnifiable Damages first
asserted with reasonable specificity within the applicable period shall not
thereafter be barred.
9.4 THIRD PARTY ACTIONS.
(a) For the purpose of this SECTION 9.4, the term
"Indemnifiable Damages" means KAV Indemnifiable Damages or Company Indemnifiable
Damages, as the context requires, the term "Indemnified Party" means the KAV
Indemnified Parties or the Company Indemnified Parties, as the context requires,
and the term "Indemnifying Party" means the party (KAV or the Company or AVS)
against whom a claim for Indemnifiable Damages is to be made.
32
34
(b) If any claim or action shall be commenced or asserted
against an Indemnified Party which, if successful, could give rise to
Indemnifiable Damages, the Indemnified Party shall give the Indemnifying Party
prompt written notice of such claim or action (provided that the failure to give
such notice shall not relieve the Indemnifying Party of its indemnification
obligations except where, and solely to the extent that, the failure to provide
such notice actually and materially prejudices the rights of the Indemnifying
Party). Upon receipt of written notice of any such claim or action, the
Indemnifying Party shall have the option to assume the defense thereof by
providing written notice of such election to the Indemnified Party within ten
(10) Business Days after receipt of written notice of any such claim or action
(an "Indemnification Notice"). If the Indemnifying Party shall elect to assume
the defense of any claim or action by the delivery of an Indemnification Notice
within such ten (10) Business Day period, then, subject to the terms set forth
below, (i) the Indemnifying Party shall have the right to assume and control the
defense of the claim or action , (ii) the Indemnified Party may at its own cost
and expense participate in (but not control) the defense thereof, and (iii) the
Indemnifying Party shall be fully responsible (with no reservation of rights)
for all Indemnifiable Damages relating to the claim or action. If the
Indemnifying Party states in an Indemnification Notice that it will not assume
the defense of the claim or action, or if the Indemnifying Party fails to
provide the Indemnified Party with an Indemnification Notice within such ten
(10) Business Day period, then (i) the Indemnified Party shall have the right to
assume and control the defense of the claim or action, (ii) the Indemnifying
Party may at its own cost and expense participate in (but not control) the
defense thereof, and (iii) the Indemnifying Party shall be responsible for any
Indemnifiable Damages (including, without limitation, the costs incurred by the
Indemnified Party in the defense thereof) relating to the claim or action
subject to and in accordance with the terms and conditions set forth in this
Agreement. If the Indemnifying Party provides, within such ten (10) Business Day
period, an Indemnification Notice stating that it shall assume the defense of
the claim or action, then the Indemnifying Party shall, at its own cost and
expense, diligently defend such claim or action, and the Indemnifying Party will
not be liable to the Indemnified Party pursuant to the provisions of SECTIONS
9.1 or 9.2 for any related counsel and paralegal fees and expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation, unless (i) the defendants in any action
include both the Indemnified Party and the Indemnifying Party and there is a
conflict of interest as reasonably determined by counsel for the Indemnifying
Party which would prevent such counsel from also representing the Indemnified
Party, (ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of the commencement of the action, or shall have
failed to diligently defend such action, or (iii) the Indemnifying Party has
authorized the employment of counsel for the Indemnified Party at the expense of
the Indemnifying Party. Notwithstanding anything to the contrary in this SECTION
9.4, the Indemnifying Party shall have no right to settle or compromise any
action for which it has assumed the defense to the extent the settlement or
compromise provides for any injunctive or other equitable relief against the
Indemnified Party or otherwise provides for any continuing obligations of any
nature against the Indemnified Party or loss of rights of the Indemnified Party,
and nothing stated in this SECTION 9.4 shall otherwise affect the Indemnifying
Party's obligation to pay the Indemnified Party all Indemnifiable Damages (other
than such related counsel and paralegal fees and expenses) pursuant to SECTION
9.1 or SECTION 9.2. With respect to any such third party action, the parties
agree to provide each other with all material information that they
33
35
request relating to the handling of such matter. The parties shall reasonably
cooperate with one another in furtherance of resolving any claims for which
indemnification is sought hereunder. No Indemnified Party shall settle,
compromise, pay or discharge, any Indemnifiable Claim without the prior written
consent of the Indemnifying Party, so long as the Indemnifying Party is
diligently defending same in accordance with this SECTION 9.4. An Indemnified
Party shall not unreasonably withhold its consent to a settlement of a matter.
9.5 REMEDIES CUMULATIVE. The remedies provided herein shall be
cumulative and shall not preclude any indemnified party from asserting any other
right, or seeking any other remedies against any indemnifying party.
ARTICLE X
TERMINATION
10.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing Date:
(a) by mutual written consent of all of the parties; or
(b) by KAV in the event of a material breach by the Company or
AVS of any provision of this Agreement which material breach is not cured within
thirty (30) days of the delivery to the Company and AVS of written notice
thereof from KAV or which breach by its nature cannot be cured prior to Closing;
or
(c) by the Company and AVS in the event of a material breach
by KAV of any provision of this Agreement which material breach is not cured
within thirty (30) days of the delivery to KAV of written notice thereof from
the Company and AVS or which breach by its nature cannot be cured prior to
Closing; or
(d) by any party in the event that the Closing shall not have
occurred on or prior to the sixtieth (60th) day following the date of this
Agreement; PROVIDED, HOWEVER, that the failure of the Closing to occur by such
date shall not have been the result of the failure of the party seeking to
terminate this Agreement to perform or fulfill any of its obligations hereunder;
and PROVIDED FURTHER that any party shall have the right to extend such date for
up to an additional thirty (30) days upon written notice to the other parties in
the event that the only then-unsatisfied condition to Closing is the receipt of
one or more consents required to be delivered pursuant to SECTION 7.5 or the
expiration or termination of any applicable HSR Act waiting period as required
pursuant to SECTIONS 7.7 and 8.5.
This Agreement shall automatically terminate without action by any party if the
Asset Purchase Agreement shall terminate or be terminated for any reason.
34
36
10.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement pursuant to SECTION 10.1, this Agreement shall forthwith become void
and of no further force and effect and the parties shall be released from any
and all obligations and liabilities hereunder; PROVIDED, HOWEVER, that (a)
nothing herein shall relieve any party from liability for fraud or any act in
the nature of fraud committed in connection with any of its representations,
warranties, covenants or agreements set forth in this Agreement, and (b) nothing
herein shall relieve any party from any liability for any breach or violation
hereof.
ARTICLE XI
GENERAL PROVISIONS
11.1 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other addresses or telecopy numbers which such party shall designate
in writing to the other party):
(a) IF TO KAV TO:
Xxxxxxxxx Industries, Inc.
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Zivi X. Xxxxxx, President
Telecopy: (000) 000-0000
AND TO:
Aviation Sales Company
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxx, Chairman
Telecopy: (000) 000-0000
WITH A COPY TO:
Akerman, Senterfitt & Xxxxxx, P.A.
000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. March, Esq.
Telecopy: (000) 000-0000
35
37
AND TO:
Xxxxx & Xxxxxx
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: J. Xxxxxxx Xxxxx, Esq.
Telecopy: (000) 000-0000
(b) IF TO THE COMPANY AND/OR AVS TO:
Aviation Sales Company
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxx, Chairman
Telecopy: (000) 000-0000
WITH A COPY TO:
Xxxxx & Xxxxxx
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: J. Xxxxxxx Xxxxx, Esq.
Telecopy: (000) 000-0000
Notice shall be deemed given on the date sent if sent by facsimile transmission
and on the date delivered (or the date of refusal of delivery) if sent by
overnight delivery or certified or registered mail.
11.2 ENTIRE AGREEMENT. This Agreement (including the exhibits and
schedules attached hereto) and the other documents delivered pursuant hereto and
thereto contains the entire understanding of the parties in respect of its
subject matter and supersedes all prior agreements and understandings (oral or
written) between or among the parties with respect to such subject matter. The
exhibits and schedules constitute a part of the document to which they are
attached as though set forth in full thereon. Notwithstanding anything to the
contrary in this Agreement, any matter, fact, event or other information
expressly and specifically set forth in any Schedule attached to this Agreement
shall be deemed disclosed in all Schedules to this Agreement.
11.3 EXPENSES.
(a) Except as otherwise provided herein, AVS shall pay the
fees and expenses incurred by it and the Company, including accounting and
counsel fees, incurred in connection with this Agreement and the transactions
contemplated hereby, and KAV shall pay its own fees and expenses, including
accounting and counsel fees, incurred in connection with this Agreement and the
transactions contemplated hereby.
36
38
(b) The parties acknowledge that while KAV is obligated to
make certain payments hereunder, the ability of KAV to make such payments will
be limited by certain covenants contained in the Senior Credit Facility.
11.4 AMENDMENT; WAIVER. This Agreement may not be modified, amended,
supplemented, canceled or discharged, except by written instrument executed by
all parties. No failure to exercise, and no delay in exercising, any right,
power or privilege under this Agreement shall operate as a waiver, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
the exercise of any other right, power or privilege. No waiver of any breach of
any provision shall be deemed to be a waiver of any preceding or succeeding
breach of the same or any other provision, nor shall any waiver be implied from
any course of dealing between the parties. No extension of time for performance
of any obligations or other acts hereunder or under any other agreement shall be
deemed to be an extension of the time for performance of any other obligations
or any other acts. Except as otherwise provided herein, the rights and remedies
of the parties under this Agreement are in addition to all other rights and
remedies, at law or equity, which they may have against each other.
11.5 BINDING EFFECT; ASSIGNMENT. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective heirs, executors, personal representatives, trustees, guardians,
attorneys-in-fact, successors and assigns. Nothing expressed or implied herein
shall be construed to give any other person any legal or equitable rights
hereunder. Except as expressly provided herein, no party may assign any of its
rights or delegate any of its obligations under this Agreement without the prior
written consent of the non-assigning or non-delegating parties; PROVIDED,
HOWEVER, that notwithstanding anything to the contrary contained in this
Agreement, KAV may assign any or all of its rights and privileges under this
Agreement to its lenders from time to time, without the consent of the Company
or AVS, provided that any such assignee shall take such assignment subject to
all of the terms, conditions and limitations set forth in the Agreement.
Notwithstanding anything to the contrary set forth herein, Xxxxxxxxx shall be an
intended third party beneficiary of this Agreement and shall be entitled to
enforce any rights granted to it or KAV under this Agreement if it were a party
hereto; PROVIDED, HOWEVER, that such rights are subject to and subordinate to
the rights of the agent and the lenders as collateral assignees under the Senior
Credit Facility.
11.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which taken together
shall constitute one and the same instrument.
11.7 INTERPRETATION. Any reference made in this Agreement to an
article, section, paragraph, clause, schedule or exhibit shall be deemed to be
to the referenced article, section, paragraph, clause, schedule or exhibit of
this Agreement unless otherwise indicated. The headings contained in this
Agreement and on the exhibits and schedules hereto are for reference purposes
only and shall in no way affect in any way the meaning or interpretation of this
Agreement or the exhibits or schedules hereto. Time shall be of the essence in
this Agreement.
37
39
11.8 SEVERABILITY. If any word, phrase, sentence, clause, section,
subsection or provision of this Agreement as applied to any party or to any
circumstance is adjudged by a court to be invalid or unenforceable, the same
will in no way affect any other circumstance or the validity or enforceability
of any other word, phrase, sentence, clause, section, subsection or provision of
this Agreement. If any provision of this Agreement, or any part thereof, is held
to be unenforceable because of the duration of such provision or the area
covered thereby or otherwise, the parties agree that the court making such
determination shall have the power to reduce the duration and/or area of such
provision, and/or to delete specific words or phrases, and in its reduced form,
such provision shall then be enforceable and shall be enforced.
11.9 GOVERNING LAW; JURISDICTION. This Agreement shall be construed in
accordance with and governed for all purposes by the laws of the State of
Florida applicable to contracts executed and to be wholly performed within such
State. Any suit, action or proceeding against KAV, the Company or AVS arising
out of, or with respect to, this Agreement or any judgment entered by any court
in respect thereof shall be brought in the courts of Broward County, Florida or
in the U.S. District Court for the Southern District of Florida and each party
hereby irrevocably (a) accepts and consents to the exclusive personal
jurisdiction of such courts for the purpose of any suit, action or proceeding,
(b) waives, to the fullest extent permitted by law, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any judgment entered by any
court in respect thereof brought in such courts, (c) waives any claim that any
suit, action or proceedings brought in such courts has been brought in an
inconvenient forum, and (d) agrees that service of process, summons, notice or
document by U.S. registered mail in accordance with this Agreement shall be
effective service of process for any action, suit or proceeding brought against
a party in any such court.
11.10 ARM'S LENGTH NEGOTIATIONS. Each party hereto expressly agrees
that (a) before executing this Agreement, it has fully informed itself of the
terms, contents, conditions and effects of this Agreement; (b) it has relied
solely and completely upon its own judgment in executing this Agreement; (c) it
has had the opportunity to seek and has obtained the advice of counsel before
executing this Agreement; (d) it has acted voluntarily and of its own free will
in executing this Agreement; (e) it is not acting under duress, whether economic
or physical, in executing this Agreement; and (f) this Agreement is the result
of arm's length negotiations conducted by and among the parties and their
respective counsel.
38
40
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
KAV INVENTORY, LLC, a limited liability
company organized under the laws of the
State of Delaware
By: /s/ Zivi X. Xxxxxx
-------------------------------------
Zivi X. Xxxxxx, Manager
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Xxxxx Xxxxxx, Manager
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Xxxxxx Xxxxxxx, Manager
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Xxxxxxx Xxxxx, Manager
AVIATION SALES COMPANY, a Delaware
corporation
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Xxxx X. Xxxxx
Chairman and Chief Executive Officer
AVIATION SALES DISTRIBUTION
SERVICES COMPANY, a Delaware corporation
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Xxxxxx Xxxxxxx
President
39
41
JOINDER
Xxxxxxxxx Industries, Inc. hereby joins in the foregoing Inventory Purchase
Agreement solely for purpose of agreeing to be bound by the provisions expressly
applicable to it and agrees that its consent shall not be required for any
amendment of the Inventory Purchase Agreement unless such amendment affects any
provision expressly applicable to it.
XXXXXXXXX INDUSTRIES, INC.
By: /s/ Zivi X. Xxxxxx
--------------------------------------
Zivi X. Xxxxxx
President and Chief Executive Officer
40
42
LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Asset Purchase Agreement
Exhibit B Form of Consignment Agreement
Exhibit C Form of Cooperation Agreement
Exhibit D Form of KAV Senior Subordinated Adjustment Note
Exhibit E Form of KAV Senior Subordinated Note - A
Exhibit F Form of KAV Senior Subordinated Note - B
Exhibit G Form of Subordinated Note
Exhibit H Form of Non-Competition Agreement
Exhibit I Form of Opinion of Seller's Counsel
Exhibit J KAV/Bank of America Commitment Letter
Schedule 2.1(a) Purchased Inventory and Condition
Schedule 2.2 Excluded Assets
Schedule 4.5 Corporate Information
Schedule 4.6 Violations
Schedule 4.7 Subsidiaries
Schedule 4.8 Financial Statements
Schedule 4.9 Changes Since the Current Balance Sheet Date
Schedule 4.10 Litigation
Schedule 4.11 Environmental Matters
Schedule 4.12 Title and Condition of Assets
Schedule 4.14 Employee Benefit Plans
Schedule 4.15 Tax Matters
Schedule 4.16 Insurance Policies
Schedule 4.17 Affiliated Transactions
Schedule 5.1 Conduct of Business Pending the Acquisition
Schedule 5.1(a) Contact Telephone Numbers and E-Mail Addresses
Schedule 6.14(a) Transferred Caribe Inventory
Schedule 6.14(b) Transferred Aerocell Inventory
Schedule 8.4 No Adverse Litigation
