STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), is entered
into on December 11, 2002 by and among Xxxxxxx X. Gold (the "Seller"), and
Special Value Bond Fund, LLC, a Delaware limited liability company, and
Special Value Bond Fund II, LLC, a Delaware limited liability company (each a
"Buyer" and collectively the "Buyers").
RECITALS
A. The Seller owns (i) options (the "Options") which
are exercisable for 243,996 shares (the "Option Shares") of common stock,
$0.0001 par value per share (the "Common Stock"), of Pemco Aviation Group,
Inc. (the "Company") and (ii) 28,454 shares of Common Stock (the "Common
Shares," and together with the Option Shares, the "Shares").
B. The Seller intends to exercise the Options for the
purpose of selling the Common Stock underlying such Options to the Buyers.
C. The Seller desires to sell and transfer the Shares
to the Buyers, and the Buyers desire to purchase the Shares from the Seller,
subject to the terms and conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Seller and the
Buyer hereby agree as follows:
ARTICLE 1
STOCK PURCHASE AND CLOSING
1.1 Stock Purchase. At the Closing (as hereinafter
defined), subject to the terms and conditions herein contained, the Seller
shall exercise the Options and immediately following such exercise, the Seller
shall sell, convey, transfer, assign and deliver to each Buyer, and each Buyer
shall purchase and acquire, the number of shares set forth opposite its name
on Exhibit A hereto. Seller represents and warrants that the Common Shares
are, and upon exercise of the Options the Option Shares will be, owned by
Seller of record and beneficially free and clear of all claims, liens or
encumbrances of any nature whatsoever; provided, however, that 5,250 shares
are owned by the Seller, as custodian for Xxxx Gold, which shares, Seller has
the unrestricted right to sell to Buyer.
1.2 Purchase Price. As consideration for the purchase
of the Shares, at the Closing, the Buyers shall pay Seller an aggregate
purchase price of $5,993,900 for the Shares ($22.00 per Share) as follows: (A)
Fund II shall pay (i) to the Company on behalf of the Seller the exercise
price for the Options in an amount equal to $2,032,378.05 ("Exercise Price")
and (ii) to the Seller an amount equal to $1,961,523.95, and (B) Fund I shall
pay to Seller an amount
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equal to $1,999,998. The amounts paid by Fund I and Fund II directly to Seller
are referred to herein as the "Purchase Price." The Exercise Price shall be
paid by wire transfer of immediately available funds to such account or
accounts as may be designated by the Company, and the Purchase Price shall be
paid by wire transfer of immediately available funds to such account or
accounts as may be designated by the Seller. Seller shall not be obligated to
sell any of the Shares at the Closing unless Seller receives payment of the
entire Purchase Price and the Company receives payment of the entire Exercise
Price.
1.3 Closing. The closing of the exercise of the Options
and the immediately subsequent purchase and sale of the Shares (the "Closing")
shall take place at the offices of Xxxx Xxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx
00000, as soon as reasonably practicable after the Company approves the sale
of the Shares by the Seller to the Buyers, but in no event later than December
13, 2002 (the "Closing Date"), subject to satisfaction of the terms and
conditions to Closing set forth in Articles 4 and 5 hereof.
1.4 Documents to be Delivered. At the Closing, the
Seller and the Buyers shall deliver the following:
1.4.1 The Seller shall deliver to the Buyers
certificates evidencing the Shares, free and clear of any claims, liens or
encumbrances of any nature whatsoever, duly endorsed in blank for transfer or
accompanied by stock powers duly executed in blank.
1.4.2 The Buyers shall effect wire transfers of
the Purchase Price to Seller and of the Exercise Price to the Company as
provided in Section 1.2.
1.5 Resignation as Director. Simultaneous with the
closing of the transactions contemplated hereby, the Seller will resign as a
director of the Company, effective upon delivery of such resignation.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller represents and warrants to the Buyers that the
statements in the following sections of this Article 2 are true and correct:
2.1 No Conflicts. The execution, delivery and
performance by the Seller of this Agreement (a) will not require any
authorization, consent, approval, license, exemption of or filing or
registration with any court or any domestic or foreign nation, state,
multi-state or municipal or other governmental authority of any nature,
including any subdivision, agency, commission or authority thereof, or any
quasi-governmental body exercising any regulatory or taxing authority
hereunder (any such governmental authority, a "Governmental Body"), other than
filings with the U.S. Securities and Exchange Commission (the "SEC"), (b) will
not cause the Seller to violate or contravene any provision of law, any rule
or regulation of any Governmental Body, any order, writ, judgment, injunction,
decree, determination or award, binding upon or applicable to the Seller and
(c) will not, in any material respect, violate or be in conflict with, result
in a breach of or constitute (with or without notice or the lapse of time or
both) a default under any contract to which the Seller is a party or by which
the Seller is bound
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or affected; provided, that the Seller must obtain approval from the Company
prior to selling the Shares.
2.2 Binding Obligation. This Agreement has been duly
executed and delivered by the Seller. This Agreement constitutes a legal,
valid and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws affecting the enforcement of creditors' rights generally or
by general equitable principles.
2.3 Due Diligence. The Seller has had a reasonable
opportunity to conduct comprehensive due diligence and to ask questions of and
receive answers from the Company and its officers and directors, and all such
questions have been answered to the full satisfaction of Seller.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYERS
Each Buyer represents and warrants to the Seller that the
statements in the following sections of this Article 3 are true and correct:
3.1 Organization, Good Standing, etc. The Buyer is a
limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite power
and authority to carry on its business, to own, lease, operate and hold its
properties and assets. The Buyer has all requisite power and authority to
enter into this Agreement, to carry out and perform its obligations under the
terms of this Agreement and to consummate the transactions contemplated
hereby.
3.2 Authority. All limited liability company action on
the part of the Buyer required for the authorization, execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, has been taken.
3.3 No Conflicts. The execution, delivery and
performance by the Buyer of this Agreement (a) will not require any
authorization, consent, approval, license, exemption of or filing or
registration with any court or Governmental Body, other than filings with the
SEC (b) will not cause the Buyer to violate or contravene any provision of
law, any rule or regulation of any Governmental Body, any order, writ,
judgment, injunction, decree, determination or award, binding upon or
applicable to the Buyer or any provision of the organizational documents of
the Buyer and (c) will not, in any material respect, violate or be in conflict
with, result in a breach of or constitute (with or without notice or the lapse
of time or both) a default under any contract to which the Buyer is a party or
by which the Buyer or any of its properties, assets or rights is bound or
affected.
3.4 Binding Obligation. This Agreement has been duly
executed and delivered by the Buyer. This Agreement constitutes a legal, valid
and binding obligation of the Buyer, enforceable against the Buyer in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
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and other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles.
3.5 Purchase for Own Account. The Shares to be
purchased by the Buyer hereunder will be acquired for investment purposes for
the Buyer's own account, not as a nominee or agent, and not with a view to the
public distribution thereof within the meaning of the Securities Act of 1933,
as amended (the "1933 Act"). The Buyer also represents that it has not been
formed for the specific purpose of acquiring the Shares.
3.6 Accredited Investor Status. The Buyer is an
"accredited investor" within the meaning of Regulation D promulgated under the
1933 Act. By reason of its business and financial experience, sophistication
and knowledge, the Buyer is capable of evaluating the risks and merits of the
investment made pursuant to this Agreement. The Buyer confirms that it is able
(i) to bear the economic risk of this investment, (ii) to hold the Shares for
an indefinite period of time, and (iii) to bear a complete loss of the Buyer's
investment.
3.7 Restricted Securities. The Buyer understands that
the Shares are characterized as "restricted securities" under the 1933 Act
inasmuch as they are being acquired from the Seller in a transaction not
involving a public offering and that under the 1933 Act and applicable
regulations thereunder such securities may be resold without registration
under the 1933 Act only in certain limited circumstances. In this connection,
the Buyer represents that it is familiar with Rule 144 promulgated under the
1933 Act, as presently in effect, and understands the resale limitations
imposed thereby and by the 0000 Xxx.
3.8 Due Diligence and No Solicitation. The Buyer has
had a reasonable opportunity to conduct comprehensive due diligence and to ask
questions of and receive answers from the Company and its officers and
directors, and all such questions have been answered to the full satisfaction
of the Buyer. At no time was the Buyer presented with or solicited by any
leaflet, public promotional meeting, circular, newspaper or magazine article,
radio or television advertisement or any other form of general advertising.
3.9 Financial Wherewithal. The Buyer presently has and
will have at the Closing all funds or financing in place necessary to pay and
deliver to the Seller the Purchase Price and to the Company the Exercise
Price.
ARTICLE 4
SELLER'S CONDITIONS TO CLOSING
The obligation of the Seller to sell the Shares to the
Buyers at the Closing is subject to the fulfillment at the Closing of the
following conditions:
4.1 Company Approval. The Company shall have approved
the sale of the Shares by the Seller to the Buyers and shall have issued the
Option Shares to the Seller pursuant to the Seller's exercise of the Options.
4.2 Purchase Price. The Seller shall have received the
Purchase Price and the Company shall have received the Exercise Price as
provided in Section 1.2.
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4.3 Representations and Warranties. The
representations, warranties and agreements of the Buyers contained in Article
3 of this Agreement shall be true and correct in all material respects at and
as of the Closing as though then made, and the Buyers shall have performed and
complied with all conditions required by this Agreement to be performed and
complied with by them on or prior to the Closing Date.
4.4 Legal Investment. On the Closing Date, the purchase
of the Shares by the Buyers shall be permitted by the laws and regulations of
each jurisdiction to which the Buyers are subject.
4.5 No Actions Pending. There shall be no suit, action,
investigation, inquiry or other proceeding by any Governmental Body or other
person or entity pending or threatened which questions the validity or
legality of the transactions contemplated by this Agreement or which questions
the ability of the Seller to exercise the Options to purchase the Option
Shares or to sell the Shares to the Buyers or the ability of the Buyers to
purchase the Shares from the Seller.
4.6 Consulting Agreement. The Company shall have
entered into a Consulting Agreement with the Conquer Creek Holdings, Inc.,
substantially in the form attached hereto as Exhibit B.
4.7 Release. The Company shall have executed a Mutual
General Release, substantially in the form attached hereto as Exhibit C.
ARTICLE 5
BUYERS' CONDITIONS TO CLOSING
The obligation of the Buyers to purchase the Shares from the
Seller at the Closing is subject to the fulfillment at the Closing of the
following conditions:
5.1 Company Approval. The Company shall have approved the
sale of the Shares by the Seller to the Buyers and shall have issued the Option
Shares to the Seller pursuant to the Seller's exercise of the Options.
5.2 Certificates. The Seller shall have delivered to
the Buyers certificates evidencing the Shares, along with a stock power, as
provided in Section 1.4.1.
5.3 Representations and Warranties. The
representations, warranties and agreements of the Seller contained in Article
2 of this Agreement shall be true and correct in all material respects at and
as of the Closing as though then made, and the Seller shall have performed and
complied with all conditions required by this Agreement to be performed and
complied with by it on or prior to the Closing Date.
5.4 Legal Investment. On the Closing Date, the purchase
of the Shares by the Buyers shall be permitted by the laws and regulations of
each jurisdiction to which the Buyers are subject.
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5.5 No Actions Pending. There shall be no suit, action,
investigation, inquiry or other proceeding by any Governmental Body or other
person or entity pending or threatened which questions the validity or
legality of the transactions contemplated by this Agreement or which questions
the ability of the Seller to exercise the Options to purchase the Option
Shares or to sell the Shares to the Buyers or the ability of the Buyers to
purchase the Shares from the Seller.
5.6 Release. The Seller shall have executed a Mutual
General Release, substantially in the form attached hereto as Exhibit C.
ARTICLE 6
TERMINATION
6.1 Termination. This Agreement may be terminated
before the Closing occurs only as follows:
6.1.1 By written agreement of the Seller and the
Buyers; or
6.1.2 By either of the Seller or the Buyers, by
notice to the other, if the Closing shall not have occurred on or before
December 13, 2002, provided that the party seeking such termination is not
then in default of its closing conditions herein.
6.2 No Further Liability. If this Agreement is
terminated by either or both of the Seller and the Buyers pursuant to this
Article 6, neither party shall have any further obligation or liability under
this Agreement, other than by reason of a breach or default by a party
hereunder.
ARTICLE 7
MISCELLANEOUS
7.1 Further Assurances. Following the Closing, the
Seller and the Buyers, promptly after request of the other party, will take
all appropriate action and execute all documents, instruments or conveyances
of any kind which may be reasonably necessary or advisable to carry out any of
the provisions hereof.
7.2 Assignments. Neither this Agreement nor any of the
rights or obligations hereunder may be assigned by the Seller without the
prior written consent of the Buyers, or by the Buyers without the prior
written consent of the Seller. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, and no other person shall have any right,
benefit or obligation hereunder.
7.3 Notices. Unless otherwise provided herein, any
notice, request, instruction or other document to be given hereunder by any
party to the other shall be in writing and delivered in person or by courier,
telegraphed, telexed or by facsimile transmission or mailed
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by certified mail, postage prepaid, return receipt requested (such mailed
notice to be effective on the date receipt is acknowledged), as follows:
If to the Seller: Xxxxxxx X. Gold
0000 Xxxxxx Xxxx, #0
Xxxx Xxxxxx Xxx 000
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
If to the Buyers: Special Value Bond Fund, LLC
Special Value Bond Fund II, LLC
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Facsimile No.: (000)000-0000
or to such other place and with such other copies as either party may
designate as to itself by written notice to the others.
7.4 Counterparts. This Agreement may be executed in two
or more counterparts, and all such counterparts shall be deemed an original,
shall be construed together and shall constitute one and the same instrument.
7.5 Choice of Law. This Agreement shall be construed,
interpreted and the rights of the parties shall be determined in accordance
with the internal laws of the State of New York, without regard to the
conflict of law principles thereof.
7.6 Entire Agreement; Amendments and Waivers. This
Agreement constitutes the entire agreement among the parties pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties. No
supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
7.7 Headings. The headings of the Articles and Sections
herein are inserted for convenience of reference only and are not intended to
be a part of or to affect the meaning or interpretation of this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year above written.
SELLER: BUYERS:
SPECIAL VALUE BOND FUND, LLC,
a Delaware limited liability company
/s/ Xxxxxxx X. Gold By: SVIM/MSM, LLC
-------------------------- Its: Managing Member
XXXXXXX X. GOLD
By: Xxxxxxxxxx & Co., LLC
Its: Managing Member
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxxxxx
Its: Managing Member
SPECIAL VALUE BOND FUND II , LLC,
a Delaware limited liability company
By: SVIM/MSM II, LLC
Its: Managing Member
By: Xxxxxxxxxx & Co., LLC
Its: Managing Member
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxxxxx
Its: Managing Member
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EXHIBIT A
BUYER NUMBER OF SHARES PURCHASED PURCHASE PRICE
----- -------------------------- --------------
Special Value Bond Fund, LLC 90,909 $1,999,998
Special Value Bond Fund II, LLC 181,541 3,993,902
----------
$5,993,900
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