STOCK PURCHASE AGREEMENT dated as of January 25, 2007 between QUANTUM CARGI & AVIATION SERVICES, INC. and HARVARD HOLDINGS INTERNATIONAL, INC. relating to the purchase and sale of 39% of the Common Stock of QUANTUM CARGO & AVIATION SERVICES, INC.
dated
as
of
January
25, 2007
between
QUANTUM
CARGI & AVIATION SERVICES, INC.
and
relating
to the purchase and sale
of
39%
of
the Common Stock
of
QUANTUM
CARGO & AVIATION SERVICES, INC.
THIS
STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of January 25, 2007,
by
and between HARVARD HOLDINGS INTERNATIONAL, INC. a Delaware corporation
("Buyer") and QUANTUM CARGO & AVIATION SERVICES, INC. a Florida corporation
("Seller").
WITNESSETH
WHEREAS,
Seller, is the beneficial owner of the Shares (as defined herein) and desires
to
sell the Shares to Buyer, and Buyer desires to purchase the Shares from Seller,
upon the terms and subject to the conditions hereinafter set forth.
The
parties hereto agree as follows:
ARTICLE
1
DEFINITIONS
Section
1.01. Definitions.
(a)
The
following terms, as used herein, have the following meanings:
"Affiliate""
means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such
Person.
"Affiliated
Group" means, with respect to federal income Taxes, any affiliated group of
corporations (as defined in Section 1504(a) of the Code) of which the Company
are members and, with respect to any state, local or foreign income, franchise
or similar income-based Tax, the consolidated, combined or unitary group of
which the Company is a member.
"Balance
Sheet" means the unaudited balance sheet of the Company as of the Balance Sheet
Date.
"Balance
Sheet Date" means December 31st,
2006.
"Business"
means the business and operations of the Company as such are
conducted by the Company as of the date hereof
"Business
Day" means a day, other than Saturday, Sunday or other clay on
which
commercial banks in New York, New
York
are
required by law to close.
"Common
Stock" means the common stock, par value $1.00 per share, of the
Company.
"Company"
means QUANTUM
CARGO & AVIATION SERVICES, INC.,
a
Florida corporation.
"Company
Intellectual Propcrty Rights" means all Intellectual Property Rights owned
by,
or licensed to, the Company.
"Current
Assets" means the sum of the Company's:
(x) Accounts
Receivable, net of the Allowance for Doubtful Accounts,
(y) Spare
Parts and Supplies; and
(z) Prepaid
Expenses.
For
the
avoidance of doubt, the parties agree that "Current Assets" shall not include
any amounts included in Closing Cash.
"Current
Liabilities" means the sum of the Company's:
(w) Payables,
(x) Accrued
Salaries and Vacation Pay,
(y) Accrued
Liabilities, and
(z) Accrued
'faxes.
"ERISA"
means the Employee Retirement Income Security Act of 1974, as amended and the
rules and regulations promulgated thereunder.
"ERISA
Affiliate" means any other entity. which would be treated as a single employer
with the Company under Section 414 of the Code.
"Exchange
Act" means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
"GAAP"
means generally accepted accounting principles in the United
States.
"Governmental
Authority" shall mean any federal, state, local or foreign government or any
subdivision, agency, instrumentality, authority, department, commission, board
or bureau thereof or any federal, state, local or foreign court, tribunal or
arbitrator.
"Intellectual
Property Right" means any trademark, service xxxx, trade name, invention,
patent, trade secret, copyright, - know how (including any registrations or
applications for registration of any of the foregoing) or any other similar
type
of proprietary intellectual property right.
"Laws"
means any law, regulation, rule, order, judgment or decree of a Governmental
Authority.
"Lien"
means, with respect to any property or asset, any and all liens, encumbrances,
charges, security interests, options, mortgages, easements or pledges in respect
of such property or asset.
"Permitted
Liens" mean: (i) specific Liens reflected or reserved against in the Balance
Sheet or disclosed in the notes thereto; (ii) Taxes and general and special
assessments not in default and payable without penalty or interest or being
contested in good faith; (iii) mechanic's, materialman's, carrier's, repairer's
and other similar Liens arising or incurred in the ordinary course of business
or that are not yet due and payable or are being contested in good faith; or
(iv) Liens arising or incurred in the ordinary course of business since the
Balance Sheet Date, which individually or in the aggregate do not have a Company
Material Adverse Effect.
"Person"
means an individual, corporation, partnership, limited liability company,
association, trust or other entity or organization, including a government
or
political subdivision or an agency or instrumentality thereof.
"Real
Property" means all real property that is owned or leased by the
Company.
"SEC"
means the Securities and Exchange Commission.
"Securities
Act" means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
"Shares"
means 1,950 shares of Common Stock of Quantum Cargo & Aviation Services
inc.
"Tax"
means any federal, state, local or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental, unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever
"Tax
Audit" shall mean any notice of deficiency, proposed adjustment, adjustment,
assessment, audit, examination or other administrative or court proceeding,
suit, dispute or other claim regarding Taxes.
"Tax
Return" means any return, declaration, report, claim for refund or information
return or statement relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof
`Taxing
Authority means any governmental authority (domestic or foreign) responsible
for
the imposition of any Tax.
"Transportation
Code" means 49 U.S.C. subtitl e VIII, as amended, and any successor statute
thereto and the Federal Aviation Regulations issued or promulgated pursuant
thereto.
Section
1.02. Other
Definitional and Interpretative Provisions. Unless
specified otherwise, in this Agreement the obligations of any party consisting
of more than one Person are joint and several. The words "hereof"', "herein"
and
"hereunder" and words of like import used in this Agreement shall refer to
this
Agreement as a whole and not to any particular provision of this Agreement.
The
captions herein are included for convenience of reference only and shall be
ignored in the construction or interpretation hereof. References to Articles,
Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and
Schedules of this
Agreement
unless otherwise specified. All Exhibits and Schedules annexed hereto or
referred to herein are hereby incorporated in and made a part of this Agreement
as if set forth in full herein. Any capitalized terms used in any Exhibit or
Schedule but not otherwise defined therein shall have the meaning as defined
in
this Agreement. Any singular term in this Agreement shall be deemed to include
the plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
to be
followed by the words "without limitation," whether or not they are in fact
followed by those words or words of like import. "Writing," "written" and
comparable terms refer to printing, typing and other means of reproducing words
(including electronic media) in a visible form. References to any Person include
the successors and permitted assigns of that Person. References from or through
any date mean, unless otherwise specified, from and including or through and
including, respectively.
ARTICLE
2
PURCHASE
AND SALE
Section
2.01. Purchase
and Sale. (a)
Upon
the terms and subject to the conditions of this Agreement, Seller agrees to
sell
to Buyer and Buyer agrees to purchase from Seller, 39% of the total equity
shares of the Company. The purchase
price (the "Purchase
Price") is $200,000 (two hundred thousand dollars) payable as per outlined
in
Exhibit 1, and consisting of $100,000 in cash and S100,000 in the common stock
of the Purchaser (200,000 shares at a price of $0.50 per share).
Section
2.02. Closing.
Upon
mutual execution of this document via electronic counterparts with original
copies to follow
(a)
Buyer
shall deliver to Seller the Purchase Price as outlined in Exhibit
(b)
Seller shall deliver to Buyer certificates for° the Shares duly endorsed or
accompanied by stock powers duly endorsed in blank, with any required transfer
stamps affixed thereto.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF TEIE SELLERS
Seller
makes the following representations and warranties to Buyer with respect to
the
Company as of the date hereof (except to the extent expressly relating to a
specific date, in which event such representation or warranty shall be made
as
of such date), which shall be unaffected by any investigation heretofore or
hereafter made by or on behalf of Buyer:
Section
3.01. Corporate
Existence and Power. The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
corporate powers required to carry on its business as now
conducted.
Section
3.02. Corporate
Authorization and Binding Effect. The
execution, delivery and performance by Seller of this Agreement, and the
consummation by each of the Sellers and the Company of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate and shareholder action by each of the Sellers and the Company. Seller
and the Company has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement and each
Related Agreement to which it is a party has been duly executed and delivered
by
Seller and the Company and, assuming due and valid authorization, execution
and
delivery thereof by Buyer, this Agreement is a valid and binding obligation
of
Seller and the Company party thereto, enforceable in accordance with its terms
and conditions.
Section
3.03. Governmental
Authorization. The
execution, delivery and performance by the Seller of this Agreement and the
consummation by the Seller of the transactions contemplated hereby require
no
action by or in respect of, or filing with, any Governmental
Authority.
Section
3.04. Noncontravention.
The
execution, delivery and performance by the Seller of this Agreement and the
consummation by Seller and the Company of the transactions contemplated hereby
and thereby do not and will not (i) contravene or conflict with the certificates
or articles of incorporation or bylaws
of
the Seller or the Company; (ii) contravene or conflict with or
constitute
a
violation of any provision of any Law binding upon or applicable to the Seller
or the Company or any of their respective properties or assets; (iii) result
in
a violation or a breach of, or constitute a default or require any consent
under
or give rise to a right of termination, cancellation or acceleration of any
right or obligation of the Company or to a loss of any benefit to which the
Company is entitled under any provision of any note, bond, mortgage, indenture,
lease, agreement, contract, obligation or other instrument to which the Company
is bound, or any license, franchise, permit or other similar authorization
held
by the Company; or (iv) result in the creation or imposition of any Lien on
any
asset of the Company, except for any Permitted Liens.
Section
3.05. Capitalization.
The
authorized capital stock of the Company consists of 5,000 (five thousand) shares
of Common Stock. There are outstanding 5,000 (five thousand) shares of Common
Stock. All outstanding shares of capital stock of the Company are duly
authorized, validly issued, fully paid, nonassessable and free from preemptive
rights. Except as set forth in this Section 3.05, there are no outstanding
(i)
shares of capital stock or other voting securities of or other ownership
interests in the Company; (ii)) securities of the Company convertible into
or
exchangeable for shares of capital stock or voting securities of or other
ownership interests in the Company; or (iii) options or other rights to acquire
from the Company, or any obligation of the Company to issue, transfer or sell,
any capital stock or voting securities of or other ownership interests in the
Company or securities convertible into or exchangeable for capital stock or
voting securities of or other ownership interests in the Company (the items
in
clauses (i), (ii) and (iii) being referred to collectively as the "Company
Securities").
There are no outstanding obligations of the Company to repurchase, redeem or
otherwise acquire any Company Securities. The Company does not have any
Subsidiaries.
Section
3.06.
Ownership of Shares. Seller
is
the record and beneficial owner of the Shares, free and clear of any
Lien,
and
will transfer and deliver to Buyer at the Closing valid title to the Shares,
free and clear of any Lien
Section
3.07. Permits;
Compliance. (a)
The
Company is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exceptions, consents, certificates, approvals,
clearances and orders of any Governmental Authority necessary for the Company
to
operate its repair and manufacturing business as currently conducted, to own,
lease and operate its properties and to carry on the Business (the "Company
hermits") and the use and operation by' the Company of its properties and the
conduct of the Business comply with the requirements and conditions of all
Company Permits.
(b)
All
of the Company Permits are valid and in full force and effect. 'fo the Knowledge
of Seller, no suspension, cancellation or limitation of any of the Company
Permits is threatened.
(c)
A
certificate of calibration or compliance for each tooling of the Company has
been duly issued pursuant to relevant federal aviation laws and is in full
force
and effect. Each tool owned by the Company is duly registered in the name of
the
Company in accordance with federal aviation laws. Each tool or machinery used
by
the Company but owned by a third party is duly registered in the name of such
third party in accordance with all applicable federal aviation laws and the
Company is authorized to use such tool under all applicable federal aviation
laws.
Section
3.08. Financial
Statements. (a)
The
unaudited consolidated balance sheets of the Company as of December 31, 2006,
and the related unaudited consolidated statements of income, cash flows and
stockholders equity for each of the years ended December 31, 2005 and 2004
(collectively, the "Financial Statements"), the financial position of the
Company as of the dates thereof and their consolidated results of operations,
cash flows and stockholders equity for the periods then ended.
Section
3.09. Books
and Records. The
books
of account, minute books and stock record books of the Company are complete
and
correct in all material respects and have been maintained in accordance with
reasonable and customary business practices. The minute books of the Company
contain records that are complete and correct in all material respects of all
meetings of, and corporate action taken by (including all actions by unanimous
written consent), the shareholders and directors of the Company since August
13,
2002, True and complete copies of all minute books and all stock record books
of
the Company have heretofore been made available to Buyer.
Section
3.10. Absence
of Certain Changes. The
Company has conducted its business in the ordinary course consistent with past
practices and there has not been:
(a) any
event, occurrence or development which has had a Company Material Adverse
Effect;
(b) any
declaration, setting aside or payment of any dividend or other distribution
with
respect to any shares of capital stock of the Company, or any repurchase,
redemption or other acquisition by the Company of any outstanding shares of
capital stock or other securities of, or other ownership interests in, the
Company;
(c) any
amendment of any material term of any outstanding security of the
Company;
(d) any
incurrence, assumption, amendment or guarantee by the Company of any
indebtedness for borrowed money, or any foreign currency, hedging, financial
derivatives or similar transactions, other than in the ordinary course of
business and consistent with past practices;
(e) any
creation or assumption by the Company of any Lien, other than Permitted Liens,
on any asset of the Company;
(f) (i)
any
making of any loan, advance or capital contribution to or investment in any
Person by the Company other than loans, advances, capital contributions or
investments made in the ordinary course of business consistent with past
practices or (ii) any amendment of the terms of any loan to executive officers
or directors;
(g) any
transaction or commitment made, or any contract or agreement entered into,
by
the Company relating to its assets or the Business (including the acquisition
or
disposition of any assets), in either ease, material to the Company, other
than
transactions and commitments in the ordinary course of business consistent
with
past practices and those contemplated by this Agreement;
(h) any
material change in any method of accounting or accounting practice by the
Company.
(i) any
payment, discharge or satisfaction of any material claim, liability or
obligation, except in the ordinary course of business or pursuant to the terms
of any Material Contract;
(j) any
material modification to a Material Contract;
(k) except
as
required under applicable law or pursuant to existing agreements, any (i) grant
of any severance or termination pay to any director, officer or employee of
the
Company, (ii) increase in compensation, bonus or other benefits payable under
any severance or retirement or termination pay policies of the Company, (iii)
entering into of any employment, deferred compensation or other similar
agreement (or any amendment to any such existing agreement) with any director,
officer or employee of the Company or (iv) adoption of any new Employee Plan
or
modification of any Employee Plan, in the case of each of clauses (i) through
(iv), other than in the ordinary course of business consistent with past
practices; or
(1)
any
disposal or lapse of any rights to the use of any Intellectual Property Right,
which would have a Company Material Adverse Effect.
Section
3.11. No
Undisclosed Material Liabilities. There
are
no liabilities or obligations of the Company of any kind, other
than:
(a) liabilities
or obligations disclosed or provided for in the Balance Sheet or the notes
thereto;
(b) liabilities
or obligations incurred in the ordinary course of business since the Balance
Sheet Date;
(c) liabilities
or obligations under this Agreement; and
(d) other
liabilities or obligations which in the aggregate would not have a Company
Material Adverse .Effect.
Section
3.12. Litigation.
As
of the
date of this Agreement, there is no judicial or administrative action, suit
or
proceeding pending, or to the Knowledge of Seller, threatened against the
Company or relating to the Business, any of the Company's properties or any
of
the officers or directors of such companies before any court or arbitrator
or
before or by any Governmental Authority that would, individually or in the
aggregate, have a Company Material Adverse Effect. The Company is not subject
to
any judgment, order or decree that would result in a Company Material Adverse
Effect.
Section
3.13. Taxes.
(a)
The
Company will also separately file all material Tax Returns that it is required
to file for each taxable period. All such Tax Returns will be filed, correct
and
complete in all material respects and will be prepared in substantial compliance
with all applicable laws and regulations. The Company will pay all material
Taxes shown or required to be shown on such separate Tax Returns.
(b) There
are
no Liens for Taxes (other than Taxes not yet due and payable) upon any of the
assets of the Company.
(c) The
Company has withheld and paid all employment, sales, use and other Taxes
required to have been withheld and paid in connection with any amounts paid
or
owing to any employee, independent contractor, creditor or other third
party.
(d) There
is
no pending or any threatened dispute or claim concerning any material Tax
liability of the Company for any taxable period during which the Company was
a
member of the Seller's Affiliated Group.
Section
3.14. Employee
Plans. The
company has provided the Buyer with all information regarding employee
compensation plans.
(a) The
Company does not presently sponsor, maintain or contribute to, and has not
in
the past sponsored, maintained or contributed to, or agreed to sponsor, maintain
or contribute to, any Pension Plan.
(b) .Labor
Matters. at the date of this Agreement:
(i) there
are
no controversies pending or threatened between the Company and any of its
employees;
(ii) the
Company has not breached in any material respect or otherwise failed to comply
in any material respect with any provision of any Collective Bargaining
Agreement applicable to persons employed by the Company, nor has any such breach
or failure been alleged, and there are no material grievances outstanding
against the Company thereunder;
(iii) there
is
no petition pending before the National Mediation Board seeking certification
or
any change in certification of a labor representative with respect to any craft
or class of employees of the Company;
(iv) there
is
no strike, slowdown, work stoppage, labor action or lockout or threat thereof,
by or with respect to any employees of the Company; and
(v) there
is
no complaint for violation of the Railway Labor Act, 45 U.S.C. § 8, as amended,
against the Company pending before any Governmental Authority.
Section
3.15. Certain
Business Practices. Neither
the Company nor any of its directors, officers employees or any other person
authorized to act on behalf of the Company has used any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful expenses relating
to political activity, made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties
or
campaigns from corporate funds, violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence
payment, kickback or other similar unlawful payment to any foreign or domestic
government official or employee from corporate funds.
Section
3.16. Environmental
Matters. (a)
Except as to matters that would not have a Company Material Adverse
Effect:
(i) no
complaint has been filed, no penalty has been assessed, and no third-party
investigation, claim, suit, proceeding or review is pending or is threatened
by
any Governmental Authority or other Person against the Company and, in each
case, alleging or relating to any violation by the Company of any Environmental
Law;
(ii) the
Company is in compliance with all Environmental Laws and has obtained and is
in
compliance with all permits, licenses, franchises, certificates, approvals
and
other similar authorizations of any Governmental Authority (collectively,
"Environmental Permits") required by I nvironmental taws to conduct the
Business;
Compliance
With Laws and Court Orders. The
Company is. in
compliance
with all, and is not under investigation with respect to applicable
Laws.
Section
3.17. Employee
Matters. The
Company is in compliance in all material respects with all applicable Laws
respecting employment and employment practices, terms, and conditions of
employment, and wages and hours and is not engaged in any unfair labor
practice.
Section
3.18. Title
to Assets; Liens. The
Company has good title to all the properties and assets reflected in the Balance
Sheet and all assets purchased by the Company since the Balance Sheet Date
free
and clear of all Liens (other than Permitted Liens). At the time of the Closing,
the assets of the Company, taken together with the rights and benefits to Buyer
arising under the Related Agreements, shall be adequate in all
material
respects to allow Buyer at such time to conduct the Business substantially
as it
is currently being conducted.
Section
3.19.
Real
Property. (a)
True
and correct copies of all leases affecting the Real Property have been made
available to Buyer. There are no proceedings, claims, disputes, or conditions
affecting any Real Property that would reasonably be expected to materially
interfere with the Company's use of such property, whether before or after
the
Closing Date, for the conduct of the Business as currently being conducted.
Neither the whole nor any portion of the Real Property is subject to any
governmental decree or order to be sold or is being condemned, expropriated,
or
otherwise taken by any public authority, nor to the Knowledge of Seller has
any
such condemnation, expropriation, or taking been proposed. All Real Property
is
leased free and clear of all Liens on such leasehold interests other than
Permitted Liens.
(b)
To
Seller's Knowledge, there is no structural defect in any of the Real Property
or
the improvements thereon.
Section
3.20. Material
Contracts. (a)
7be
Company is not a party to or bound by:
(i) any
airport lease or lease of real property providing for annual rentals of $30,000
or more;
(ii)
any
agreement for the purchase of materials, supplies, goods, services, equipment
or
other assets (other than pursuant to purchase orders made in the ordinary course
of business consistent with past practice) providing for annual payments by
the
Company of $50,000 or more;
(iii)
any
capacity purchase, alliance or similar agreement with another airline or
repair/manufacturing facility relating to the operation of the Company's tooling
for
the
benefit of such other airline or repair facility that will not be terminated
on
or prior to Closing;
(iv) any
material partnership, joint venture or other similar agreement or
arrangement;
(v)
any
agreement relating to indebtedness for borrowed money or the deferred purchase
price of property (in either case, whether incurred, assumed, guaranteed or
secured by any asset), except any such agreement with an aggregate outstanding
principal amount not exceeding $100,000;
(vi) any
agreement that limits in any material respect the freedom of the Company to
compete in any line of business, with any Person or in any area for any length
of time;
(vii) any
contract or commitment requiring, after the date hereof, the mortgage, pledge,
sale, or disposal of assets with a value in excess of $100,000 or release,
grant, or transfer of Company rights with a value in excess of $100,000;
or
(b)
Each
agreement, contract, plan, lease, arrangement or commitment required to be
disclosed pursuant to this Section (collectively, "Material Contracts") is
a
valid and binding agreement of the Company and is in full force and effect,
and
none of the Company or, to the Knowledge of Seller, any other party thereto
is
in default or breach in any respect under the terms of any such agreement,
contract, plan, lease, arrangement or commitment.
Section
3.21. Insurance.
Seller
has made available to Buyer copies of all insurance policies providing coverage
in favor of the Company or any of its properties, including "all risk" insurance
policies (collectively, the "Insurance Policies"). There are no material claims
by the Company pending under any of the Insurance Policies as to which coverage
has been questioned, denied or disputed by the underwriters of such policies
or
in respect of which such underwriters have reserved their rights. As of the
date
hereof, all Insurance Policies are in full force and effect, all premiums due
thereon have been paid and the Company is in compliance in all material respects
with the terms and provisions of the Insurance Policies.
Section
3.22. Intellectual
Properly. (a)
No
Company Intellectual Property
Right is subject to any outstanding judgment, injunction, order, decree
or
agreement restricting the use thereof by the Company or restricting the
licensing thereof by the Company to any Person.
(b)
Except as expressly disclosed to Buyer, the Company has the sole and exclusive
right to use the Company Intellectual Property Rights, and no consent of any
third party is required for the use thereof by the Company following Closing.
To
the Knowledge of Seller, no claims have been asserted by any person challenging
the use of any Company Intellectual :Property Rights, or challenging or
questioning the validity or effectiveness of any such license or agreement.
No
additional Intellectual Property Rights other than the Company Intellectual
Property Rights are necessary or material to the conduct of the
Business.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF BUYER
Buyer
hereby makes the following representations and warranties to the Sellers as
of
the date hereof (except to the extent expressly relating to a specific date,
in
which event such representation or warranty shall be made as of such date),
which shall be unaffected by any investigation heretofore or hereafter
made.
Section
4.01. Corporate
Existence and Power. Buyer
is
a corporation duly incorporated, validly existing and in good standing under
the
laws of its jurisdiction of incorporation and has all corporate powers required
to carry on its business as now conducted.
Section
4.02. Corporate
Authorization. The
execution, delivery and performance by Buyer of
this
Agreement and each Related Agreement to which it is a party and the consummation
by Buyer of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate and shareholder action by Buyer. Buyer
has
full power and authority to execute and deliver this Agreement and to perform
its obligations hereunder. This Agreement has been duly executed and delivered
by Buyer and, assuming due and valid authorization, execution and delivery
thereof by each Seller party thereto, this Agreement is a valid and binding
obligation of Buyer, enforceable in accordance with its terms and
conditions.
Section
4.03: Governmental
Authorization. The
execution, delivery and performance by Buyer of
this
Agreement and each Related Agreement and the consummation by Buyer of the
transactions contemplated hereby and thereby require no action by or in respect
of, or filing with, any Governmental Authority
Section
4.04. Noncontravention.
The
execution, delivery and performance by Buyer of this Agreement and the
consummation by Buyer of the transactions contemplated hereby do not and will
not (i) contravene or conflict with the articles of incorporation or bylaws
of
Buyer, (ii) assuming compliance with the matters referred to in Section 4.03,
contravene or conflict with or constitute a violation of any provision
of
any
Law
binding upon or applicable to Buyer, (iii) result in a violation or a breach
of,
or constitute a default or require any consent under or give rise to a right
of
termination, cancellation or acceleration of any right or obligation of Buyer
or
to a loss of any benefit to which Buyer is entitled under any provision of
any
note, bond, mortgage, indenture, lease, agreement, contract, obligation or
other
instrument to which Buyer is bound, or any license, permit or other similar
authorization held by Buyerj.
Section
4.05. Litigation.
As of
the
date of this Agreement, there is no judicial or administrative action, suit
or
proceeding pending, or to the knowledge of Buyer, threatened against Buyer
before any Governmental Authority which in any
manner challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by this Agreement.
ARTICLE
5
COVENAN'rs
OF
TtIE
SELLERS
Each
of
the Sellers agrees that:
Section
5.01. Conduct
of the Company. Except
as
expressly contemplated by this Agreement or as otherwise consented to by Buyer
in writing, during the period from the date hereof and continuing, each of
the
Sellers shall cause the Company to:
(a) conduct
its business in the usual, regular and ordinary course consistent with past
practices;
(b) not
mortgage, pledge, sell or dispose of any assets with a value of $3,000 or more
in the aggregate, and not waive, release, grant, transfer or permit to lapse
any
Company rights of value in excess of $5,000 in the aggregate;
(c) comply
in
all material respects with all provisions of any Material Contracts to which
the
Company is a party;
(d) not
take
any action that would result in the representation set forth in Section 3.10(k)
being untrue;
(e) not
enter
into any new or amended contract, agreement, side letter or memorandum of
understanding with any unions representing employees of the
Company;
(t)
not
enter into any agreement or understanding with any other Person outside of
the
ordinary course of business consistent with past practices involving
expenditures in excess of $3,000 in the aggregate or involving terms of duration
or commitments in excess of 3 months;
(g) not
enter
into any agreement or understanding with any other Person containing any
exclusivity, non-competition or similar provisions that would materially
restrict the ability of the Company to compete;
(h) not
adopt
or propose any change in its organizational documents (including bylaws);
and
(i)
not
merge or consolidate with any other Person. Section 5.02. Access
to Information; Confidentiality.
(a) After
the
Closing, Seller will hold, and will use their best efforts to cause their
respective officers, directors, employees, accountants, counsel, consultants,
advisors and agents to hold, in confidence, unless compelled to disclose by
judicial or administrative process or by other requirements of law, all
confidential documents and information concerning the Company, except to the
extent that such information can be shown to have been (i) previously known
on a
nonconfidential basis by either Seller, (ii) in the public domain through no
fault of Sellers or their Affiliates or (iii) later lawfully acquired by any
Seller from sources other than those related to its prior ownership of the
Company. The obligation of Sellers and their Affiliates to hold any such
information in confidence shall be satisfied if they exercise the same care
with
respect to such information as they would take to preserve the confidentiality
of their own similar information.
(b) On
and
after the Closing Date, Seller will afford, promptly to Buyer and its agents
reasonable access to its books of account, financial and other records
(including accountant's work papers), information, employees and auditors to
the
extent reasonably necessary for Buyer in connection with any audit,
investigation, dispute or litigation (other than any dispute or litigation
involving either of the Sellers) relating to the Business; provided
that
any
such access by Buyer shall be conducted during normal business hours and shall
not unreasonably interfere with the conduct of the business of the Sellers,
Buyer shall bear all of the out-of-pocket costs and expenses (including
reasonable attorneys' fees, but excluding reimbursement of Seller for general
overhead, salaries and employee benefits) reasonably incurred in connection
with
the foregoing.
Section
5.03. Notices
of Certain Events. From
the
date hereof, Seller shall promptly notify Buyer of:
(a) any
actions, suits, claims, investigations or proceedings (i) commenced against
the
Company or (ii) in respect of which the Company has an indemnification
obligation and as to which Seller has Knowledge that, if pending on the date
of
this Agreement, would have been required to have been disclosed pursuant to
Section 3.12;
(b) any
material agreement or litigation, or consent or order of the FAA or
D0"1,,
related
to the Company (other than those that apply generally to air carriers or
companies in the airline industry); and
(c) any
incidents or accidents occurring on or after the date hereof involving any
property owned or operated by the Company that has resulted or would reasonably
be expected to result in casualty damages or losses in excess of
$20,000.
ARTICIJE
6
COVENANTS
OF BUYER
Buyer
agrees that:
Section
6.01. Confidentiality.
Prior
to
the Closing Date and after any termination of this Agreement, Buyer and its
Affiliates will hold, and will use their best efforts to cause their respective
officers, directors, employees, accountants, counsel, consultants, advisors
and
agents to hold, in confidence all confidential documents and information
concerning the Company furnished to Buyer or its Affiliates in connection with
the transaction contemplated by this Agreement.
Section
6.02. I
rademarks;
Tradenames. Buyer
shall not permit the Company to use any of the marks or names of Seller that
the
parties agree shall belong to Seller after closing.
ARTICLE
7
COVENANTS
OF BUYER AND THE SELLERS
Buyer
and
the Sellers agree that:
Section
7.01. Best
Efforts; Further Assurances. (a)
Subject to the terms and conditions of this Agreement, Buyer and the Sellers
will use their best efforts to take, or cause to be taken, all actions and
to
do, or cause to be done, all things necessary or desirable under applicable
laws
and regulations to consummate the transactions contemplated by this Agreement.
Seller and Buyer shall, and the Sellers shall cause the Company prior to the
Closing, and Buyer shall cause the Company after the Closing, to execute and
deliver such other documents, certificates, agreements and other writings and
to
take such other actions as may be necessary or desirable in order to consummate
or implement expeditiously the transactions contemplated by this
Agreement.
Section
7.02. Public
Announcements. The
parties agree to consult with each other before issuing any press release or
making any public statement with respect to this Agreement or the transactions
contemplated hereby and, except for any press releases and public announcements
the making of which may be required by applicable law or any listing agreement
with any national securities exchange, will not issue any such press release
or
make any such public statement prior tosuch consultation..
Section
7.03 Operational
Agreement. Both
parties agree that within 90 days of closing an operational partnership
agreement shall be in place, inclusive of employment agreements for principal
officers of the Seller. Buyer and Seller have to date negotiated most of the
terms of the agreement and will use their best faith efforts to complete and
ratify said agreement. In the event of a failure to
complete
an agreement Seller retains the right to purchase the shares sold to the Buyer
for an equal amount of consideration expended by the Buyer.
ARTICLE
8
BMPI,OYEE
BENEFITS
Section
8.01. Employee
Benefits. (a)
Nothing herein shall be construed to require the Company or Buyer to continue
after Closing the employment of any Company employee or to otherwise interfere
with the Company's right to terminate any such employees at any time after
Closing.
(b)
Following the Closing Date, except to the extent otherwise prohibited by
applicable law, each employee of the Company shall receive service credit for
purposes of eligibility to participate and vesting (but not for benefit accrual
purposes) for all periods of employment with the Company and its Affiliates
and
predecessors thereto prior to the Closing Date under any employee benefit plan
of Buyer or its Affiliates in which such employee is eligible to participate
after the Closing Date, to the extent such credit existed immediately prior
to
the Closing Date under the corresponding Employee Plan maintained by the
Company.
ARTICL1
9
CONDITIONS
TO CLOSING
Section
9.01. Conditions
to Obligations of Buyer and the Sellers. The
obligations of Buyer and the Sellers to consummate the Closing are subject
to
the satisfaction of the following conditions:
(a) no
provision of any Law shall prohibit the consummation of the
Closing;
(b) there
shall not be in effect any Law enacted, enforced, promulgated, issued or deemed
applicable to the transactions contemplated hereby of any Governmental Authority
that makes illegal or otherwise materially restrains or prohibits the
consummation of the transactions contemplated hereby.
Section
9.02. Conditions
to Obligation of Buyer. The
obligation of Buyer to consummate the Closing is subject to the satisfaction
of
the following further conditions:
(a)
the
Seller shall have performed or complied with in all material respects all of
the
covenants and agreements required to be performed by it on or prior to the
Closing Date under this Agreement, and the representations and warranties of
the
Seller set forth in this Agreement shall be true at and as of the Closing Date
as if made at and as of such time (except as to any representation or warranty
which speaks as of a specific date, which must be true as of such
date;
(b) there
shall not have occurred any Company Material Adverse Effect after the date
hereof which is continuing on the Closing Date;
(c) Buyer
shall have received all documents it may reasonably request relating to the
existence of the Seller and the authority of the Seller for this Agreement,
all
in form and substance reasonably satisfactory to Buyer; and
Section
9.03. Conditions
to Obligation of the Sellers. The
obligation of the Sellers to consummate the Closing is subject to satisfaction
of the following further conditions.
(a) Buyer
shall have performed or complied with in all material respects all of the
covenants and agreements required to be performed by it on or prior to the
Closing Date under this Agreement, and the representations and warranties of
Buyer set forth in this Agreement shall be true at and as of the Closing Date
as
if made at and as of such time (except as to any representation or warranty
which speaks as of a specific date, which must be true as of such date);
and
(b) the
Seller shall have received all documents it may reasonably request relating
to
the existence of Buyer and the authority of Buyer for this Agreement, all in
form and substance reasonably satisfactory to the Sellers.
ARTICLE
10
SURVIVAL;
INDEMNIFICATION
Section
10.01. Survival.
Except
as
specifically set forth below, the representations and warranties of the parties
hereto contained in this Agreement or in any certificate or other writing
delivered pursuant hereto or in connection herewith shall survive the Closing
until the first anniversary of the Closing Date. The covenants and agreements
of
the parties hereto contained in this Agreement or in any certificate or other
writing delivered pursuant hereto or in connection herewith shall survive the
Closing indefinitely or for the shorter period explicitly specified therein,
except that for such covenants and agreements that survive for such shorter
period, breaches thereof shall survive indefinitely or until the latest date
permitted by law. Notwithstanding the preceding sentences, any breach of
representation, warranty, covenant or agreement in respect of which indemnity
may be sought under this Agreement shall survive the time at which it would
otherwise terminate pursuant to the preceding sentences, if notice of the
inaccuracy
or breach thereof giving rise to such right of indemnity shall have
been
given to
the party against whom such indemnity may be sought prior to such
time.
Section
10.02. Indemni/icotion.
(a)Effective
at and after the Closing, Seller hereby indemnities Buyer and its Affiliates
against and agrees to hold each of them harmless from any and all damage, loss
and expense (including reasonable expenses of investigation and reasonable
attorneys' fees and expenses and any fines or penalties imposed) actually
suffered by Buyer or any of its Affiliates arising out of
any misrepresentation or breach of representation or warranty (each such
misrepresentation and breach, a "Warranty each") or breach of covenant or
agreement made or to be performed by the Sellers pursuant to this
Agreement.
(b)
Effective at and after the Closing, Buyer hereby indemnifies Seller and its
Affiliates against and agrees to hold each of them harmless from any and all
Damages actually suffered by Seller or any of its Affiliates arising out of
any
Warranty Breach or breach of covenant or agreement made or to be performed
by
Buyer pursuant to this Agreement.
Section
10.03. Procedures.
(a)
The
party seeking indemnification under Section 10.02 (the "Indemnified Party")
agrees to give prompt notice to the party against whom indemnity is sought
(the
"Indemnifying
Party") of the assertion of any claim, or the commencement of any suit, action
or proceeding ("Claim") in respect of which indemnity may be sought under such
Section and will provide the Indemnifying Party such information with respect
thereto that the Indemnifying Party may reasonably request. The failure to
so
notify the Indemnifying Panty shall not relieve the Indemnifying Party of its
obligations hereunder, except to the extent such failure shall have adversely
affected the Indemnifying Party.
(b) The
Indemnifying Party shall be entitled to participate in the defense of any Claim
asserted by any third party ("Third Party Claim") and, subject to the
limitations set forth in this Section, shall be entitled to assume the control
of and appoint lead counsel for such defense, in each case at its
expense.j
(c) If
the
Indemnifying Party shall assume the control of the defense of any Third Party
Claim in accordance with the provisions of this Section 10.03, (i) the
Indemnifying Party shall obtain the prior written'consent of the Indemnified
Party (which shall not be unreasonably withheld, delayed or conditioned) before
entering into any settlement of such Third Party Claim, but only if the
settlement does not release the Indemnified Party from all liabilities and
obligations with respect to such Third Party Claim or if the settlement imposes
injunctive or other equitable relief against the Indemnified Party, and (ii)
the
Indemnified Party shall be entitled to participate in the defense of such Third
Party Claim and to employ separate counsel of its choice for
such
purpose. The fees and expenses of such separate counsel shall be paid by the
Indemnified Party. The Indemnifying Party shall have no indemnification
obligations with respect to any Third Party Claim that shall be settled by
the
indemnified Party without the prior written consent of the Indemnifying Party,
which consent shall not be unreasonably withheld, delayed or
conditioned.
(d) Each
party shall cooperate, and cause their respective Affiliates to cooperate,
in
the defense or prosecution of any Third Party Claim and shall furnish or cause
to be furnished such records, information and testimony, and attend such
conferences, discovery proceedings, hearings, trials or appeals, as may
be
reasonably requested in connection therewith. The Indemnified Party shall keep
the Indemnifying Party fully informed of the defense of any Third Party Claim
conducted by such Indemnified Party.
(e)
Each
Indemnified Party shall use reasonable efforts to collect any amounts available
under insurance coverage, or from any other Person alleged to be responsible,
for any Damages payable under Section 10.02.
Section
10.04. Knowledge.
Notwithstanding
anything in this Agreement to the contrary, the rights of the parties to
indemnification based on the representations and warranties set forth in this
Agreement shall not be affected by any investigation conducted with respect
to,
or any knowledge acquired (or capable of being acquired) about the accuracy
or
inaccuracy of or compliance with, any such representation or
warranty.
ARTICLE
11
TERMINA'T'ION
Section
11.01. Grounds
for Termination. 'phis
Agreement
may be terminated at any time prior to the Closing:
(a) by
mutual
written agreement of Seller and Buyer;
(b) by
either
Seller or Buyer if consummation of the transactions contemplated hereby would
violate any nonappealable final order, decree or judgment of any Governmental
Authority having competent jurisdiction; or
(c) by
Buyer
if (i) Seller shall have filed a petition for relief under the Bankruptcy Code
prior to the Closing or (ii) an involuntary petition for relief under the
Bankruptcy Code is filed against Seller prior to the Closing by any party other
than (x) Buyer or its Affiliates or (y) any Person acting at the direction
of or
in concert with Buyer or its Affiliates and such petition is not dismissed
prior
to the Closing;
The
party
desiring to terminate this Agreement pursuant to clauses of this Section 1
1.01
shall give notice of such termination to the other party.
Section
11.02. };'/feet
of
Termination. If
this
.Agreement is terminated as permitted by Section 11..01, such termination shall
be without liability of any party (or any stockholder, director, officer,
.employee, agent, consultant or representative of such party) to any other
party
to this
Agreement;
provided that if such termination shall result from either party's willful
(i)
failure to fulfill a condition to the performance of the obligations of the
other party, (ii) failure to perform a covenant set forth in this Agreement
or
(iii) breach of any representation or warranty or agreement contained herein,
such failing or breaching party shall be fully liable for any and all Damages
incurred or suffered
by
the
other party as a result of such failure or breach. The provisions of Section
6.01, 12.03, 12.05, 12.06 and 12.07 shall survive any termination hereof
pursuant to Section 11.01.
ARTICLE
12
MISCELLANEOUS
Section
12.01. Notices.
All
notices and other communications hereunder shall be in writing (including
facsimile transmission, with confirmation of receipt) and shall be deemed to
have been duly given (i) when delivered personally or by facsimile, (ii) when
received by the addressee, if sent by Express Mail, Federal Express or other
express delivery service (receipt requested), or (iii) three business days
after
being sent by registered or certified mail, return receipt requested, in each
case to the other party at the following addresses (or to such other address
for
a party as shall be specified by like notice, provided that notices of a change
of address shall be effective only upon receipt thereof):
if
to
Buyer to:
HARVARD
HOLDINGS INTERNATIONAL, INC. 0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx 00000
FAX
x0
(000) 000-0000
if
to
Seller to:
QUANTUM
CARGO & AVIATION SERVICES 0000 XX 00xx'
Xxx
Xxx
0-X
Xxxxxxxx
Xxxxxxx, Xxxxxxx 00000
FAX
+l
(000) 000-0000
;
provided
that
any
communication by facsimile shall be confirmed by a copy sent via overnight
mail
to the physical address of the recipient set forth above. .All such notices,
requests and other communications shall be deemed received on. the date of
receipt by the recipient thereof if received prior to 5 p.m. in the place of
receipt and such .day
is a
Business Day in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding Business Day in the place of receipt.
Section
12.02. Amendments
and Waivers. (a)
Any
provision of this Agreement may be amended or waived only if such _amendment
or
waiver is in writing and is signed, in the case of an amendment, by each party
to this Agreement, or in the case of a waiver, by the party against whom the
waiver is to be effective.
(b)
No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein
provided
shall be cumulative and not exclusive of any rights or remedies
provided
by
law.
Section
12.03. Expenses.
Except
as
otherwise provided herein, all costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or
expense.
Section
12.04. Successors
and Assigns. The
provisions of this Agreement shall be binding upon and inure to the benefit
of
the parties hereto and their respective successors and assigns; provided that
no
party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of each other party
hereto.
Section
12.05. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the law of
the
State of Georgia, without regard to the conflicts of law rules of such
state.
Section
12.06. Jurisdiction.
The
parties hereto agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter
arising
out of
or in connection with, this Agreement or the transactions contemplated hereby
shall be brought in the United States District Court for the Southern District.
In any such suit, action or proceeding each party irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter
have
to the laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding brought in any such court
has
been brought in an inconvenient forum.
Section
12.07.
WAIVER
OF .IURY TRIAL. EACH
OF
TILE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY ANI) ALL RIGHT' TO TRIAL
BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELA`ITbD TO THIS AGREEMENT
OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
Section
12.08. . Counterparts;
Effectiveness; I hind-Party Beneficiaries. This
Agreement may be signed in any number of counterparts, each of which shall
be an
original, with. the same effect as if the signatures thereto and hereto were
upon the same instrument. No provision of this Agreement is intended to
confer
any rights, benefits, remedies, obligations or liabilities hereunder upon
any
Person
other than. the parties hereto and their respective successors and
assigns.
Section
12.09. Entire
Agreement. This Agreement
(including the Schedules and Exhibits hereto), the Confidentiality Agreement
and
the Related Agreements
constitute the entire agreement between the parties with respect to the
subject
matter of this Agreement and supersedes all prior agreements and understandings,
both oral and written, between the parties with respect to the subject matter
of
this Agreement.
Section
12.10. Severability.
If
any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated so long as the economic and legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such a determination, the parties shall negotiate
in
good faith to modify this Agreement so as to effect the original intent of
the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated
to
the fullest extent possible.
IN
WITNESS WI1EREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
| |
|
|
| By: | /s/ Xxxxxx X. Xxxxxxx | |
|
Xxxxxx B. Xxxxxxx |
||
| Title: Chairman & CEO HARVARD HOLDINGS INTERNATIONAL, INC. | ||
| |
|
|
| Date: | By: | /s/ Nan ~: KiniL. Xxxxxx |
|
Xxx ~: KiniL. Merced |
||
| Title: President QUANTUM CARGO & AVIATION SERVICES, INC. | ||
Aknowledgements
State
of Florida
County
of Broward
The
foregoing instrument was acknowledged before me this
day
of
Exhibit
1
Payment
Schedule
|
Upon
Execution of the agreement
|
200,000
Shares of If II Stock
|
|
March
30'h
2006
|
$25,000.00
|
|
June
30`1'
2006
|
$50,000.00
|
|
September
30th
2006
|
$25,000.00
|
