EXHIBIT 10.12
EXECUTION COPY
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STOCK PURCHASE AGREEMENT
by and between
MACQUARIE INVESTMENT HOLDINGS, INC.
EXECUTIVE AIR SUPPORT, INC.
and
THE SHAREHOLDERS
OF
EXECUTIVE AIR SUPPORT, INC.
Dated as of
April 28, 2004
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 PURCHASE AND SALE.................................................................. 1
1.1 Agreement to Sell and Purchase............................................. 1
1.2 Purchase Price............................................................. 1
1.3 Adjustments to Purchase Price.............................................. 2
1.4 Payment of Purchase Price.................................................. 3
1.5 The Closing................................................................ 5
1.6 Conduct of Closing......................................................... 5
1.7 Net Working Capital Determination.......................................... 6
1.8 Cash and Cash Equivalents Determination.................................... 8
1.9 Shareholder Representative................................................. 9
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF EACH SHAREHOLDER................................. 10
2.1 Authority Relative to the Agreement........................................ 10
2.2 Title to Stock............................................................. 10
2.3 Shareholder Authorization; Absence of Breach; Consents..................... 10
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS................................. 11
3.1 Qualification.............................................................. 11
3.2 Authorization.............................................................. 11
3.3 No Violations.............................................................. 11
3.4 Consents and Approvals..................................................... 12
3.5 Capitalization............................................................. 12
3.6 Subsidiaries............................................................... 12
3.7 Interests in Other Entities................................................ 13
3.8 Compliance with Law........................................................ 13
3.9 Litigation................................................................. 13
3.10 Insurance.................................................................. 14
3.11 Financial Statements....................................................... 14
3.12 Accounts Receivable........................................................ 14
3.13 Inventory.................................................................. 14
3.14 No Undisclosed Liabilities................................................. 14
3.15 Powers of Attorney......................................................... 15
3.16 Contracts.................................................................. 15
3.17 Bank Accounts, Etc......................................................... 16
3.18 Employees; Employee Benefit Plans.......................................... 16
3.19 Labor Matters.............................................................. 19
3.20 Property................................................................... 21
3.21 Taxes...................................................................... 23
3.22 Environmental Matters...................................................... 25
3.23 Permits.................................................................... 27
3.24 Transactions with Affiliates............................................... 27
3.25 Intellectual Property...................................................... 28
3.26 Absence of Certain Changes or Events....................................... 28
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3.27 Brokerage.................................................................. 30
3.28 Fuel Flowage............................................................... 30
ARTICLE 4 REPRESENTATION AND WARRANTIES OF PURCHASER......................................... 30
4.1 Organization............................................................... 30
4.2 Authorization.............................................................. 30
4.3 No Violations.............................................................. 31
4.4 Brokerage.................................................................. 31
ARTICLE 5 OTHER OBLIGATIONS.................................................................. 31
5.1 Conduct of Business Pending Closing........................................ 31
5.2 Access, Information and Documents.......................................... 33
5.3 Acquisition Proposals...................................................... 33
5.4 HSR Filing; Further Assurances............................................. 33
ARTICLE 6 CONDITIONS TO CLOSING; TERMINATION................................................. 34
6.1 Conditions Precedent to Obligations of Purchaser........................... 34
6.2 Conditions Precedent to the Obligations of the Shareholders................ 37
6.3 Termination................................................................ 38
ARTICLE 7 CERTAIN ADDITIONAL COVENANTS....................................................... 39
7.1 Costs, Expenses............................................................ 39
7.2 Public Announcement........................................................ 39
7.3 Mutual Covenants........................................................... 39
7.4 Tax Matters................................................................ 39
7.5 Indemnification of Directors and Officers.................................. 40
7.6 Shareholder Agreement...................................................... 41
7.7 Subsequent Transaction..................................................... 41
7.8 Updating of Disclosure Schedules........................................... 41
7.9 Atlantic Indemnification Claim............................................. 41
7.10 Additional Covenant of Certain Shareholders................................ 42
ARTICLE 8 SURVIVAL/INDEMNIFICATION........................................................... 42
8.1 Nature and Survival of Representations and Agreements...................... 42
8.2 Indemnification by Shareholders............................................ 42
8.3 Indemnification by Purchaser............................................... 45
8.4 Indemnity Procedures....................................................... 45
8.5 Exclusive Remedy........................................................... 47
8.6 Adjustments to Purchase Price.............................................. 47
ARTICLE 9 MISCELLANEOUS...................................................................... 47
9.1 Entire Agreement........................................................... 47
9.2 Notices.................................................................... 47
9.3 Successors and Assigns..................................................... 48
9.4 Arbitration................................................................ 48
9.5 Headings; Interpretation................................................... 49
9.6 Knowledge.................................................................. 49
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9.7 Further Assurances......................................................... 49
9.8 Amendment and Waiver....................................................... 49
9.9 No Other Beneficiaries..................................................... 50
9.10 Governing Law.............................................................. 50
9.11 Schedules.................................................................. 50
9.12 Additional Matters Regarding Canterbury Warrant............................ 50
9.13 Counterparts............................................................... 50
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LIST OF EXHIBITS
Exhibit A List of Shareholders
Exhibit B Escrow Agreement
Exhibit C Form of Cancellation Agreement
Exhibit D Form of Opinion of Shareholders Counsel
Exhibit E Form of Shareholder Release
Exhibit F Form of Opinion of Purchaser Counsel
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LIST OF SCHEDULES
Schedule 1.3 Excluded Funded Indebtedness
Schedule 1.7 Working Capital Determination
Schedule 3.1 Subsidiaries
Schedule 3.3 No Violations/Third Party Consents
Schedule 3.4 Governmental Consents
Schedule 3.5 Shareholders/Options/Warrants
Schedule 3.6 Subsidiaries
Schedule 3.7 Interests in Other Entities
Schedule 3.8 Compliance with Law
Schedule 3.9 Litigation
Schedule 3.10 Insurance
Schedule 3.11(a) Financial Statements
Schedule 3.11(b) Funded Indebtedness
Schedule 3.12 Accounts Receivable
Schedule 3.13 Inventory
Schedule 3.14 Undisclosed Liabilities
Schedule 3.15 Powers of Attorney
Schedule 3.16 Contracts
Schedule 3.16(b)(i) FBO Leases
Schedule 3.16(b)(ii) Terms/Renewal Periods of FBO Leases
Schedule 3.17 Bank Accounts
Schedule 3.18(a) Employees
Schedule 3.18(b) Benefit Plans
Schedule 3.18(c)(i) and (ii) Qualified Plans
Schedule 3.18(c) (vii) Multiemployer Plans
Schedule 3.18(d) Retiree Benefits
Schedule 3.18(e) Bonus Compensation
Schedule 3.19 Labor Matters
Schedule 3.20 Property
Schedule 3.21 Taxes
Schedule 3.22 Environmental Matters
Schedule 3.23 Permits
Schedule 3.24 Transactions with Affiliates
Schedule 3.25 Intellectual Property
Schedule 3.26 Absence of Certain Changes
Schedule 3.28 Fuel Flowage Statements
Schedule 6.1(m) Estoppel Letters
Schedule 8.2(b)(ii) Certain Indemnification Matters
Schedule 9.6 Certain EAS Individuals
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TABLE OF DEFINED TERMS
TERM PAGE
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Accounting Firm ................................................ 7
Affiliate....................................................... 27
Agreement ...................................................... 1
Airports ....................................................... 21
Argosy.......................................................... 50
Association..................................................... 48
Benefit Plans .................................................. 17
Business ....................................................... 11
Cancellation Agreement.......................................... 12
Canterbury...................................................... 1
Canterbury Warrant ............................................. 1
Canterbury Warrant Shares....................................... 1
CERCLA.......................................................... 25
Claims ......................................................... 1
Closing......................................................... 5
Closing Certification........................................... 2
Closing Date.................................................... 5
Closing Statement .............................................. 3
Code ........................................................... 17
Consents ....................................................... 11
Contracts ...................................................... 15
Convertible Notes .............................................. 36
Damages......................................................... 43
Disbursement Agent.............................................. 3
Disbursement Fund .............................................. 3
Effective Time ................................................. 5
Environmental Laws ............................................. 26
Environmental Notices........................................... 26
ERISA .......................................................... 16
ERISA Affiliate ................................................ 17
Escrow Agent.................................................... 3
Escrow Agreement................................................ 3
Escrow Funds.................................................... 3
Executive....................................................... 1
Executive Balance Sheet......................................... 14
FAA............................................................. 13
FBO Leases...................................................... 15
Financial Statements ........................................... 14
Funded Indebtedness............................................. 2
GAAP............................................................ 6
Governmental Entity............................................. 12
Guaranteed Obligations ......................................... 51
Guarantor ...................................................... 51
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Hazardous Substances............................................ 25
HSR Act......................................................... 12
Intellectual Property........................................... 27
Interim Balance Sheet Date ..................................... 14
Interim Financial Statements ................................... 32
IRS ............................................................ 17
Knowledge of the Shareholders .................................. 49
Leases.......................................................... 20
Option Equivalent Stock......................................... 4
Options......................................................... 12
Permit.......................................................... 26
Permits ........................................................ 26
Permitted Liens ................................................ 21
Person.......................................................... 11
Purchase Agreement ............................................. 51
Purchase Price.................................................. 1
Purchaser....................................................... 1
Purchaser Indemnified Parties .................................. 42
Qualified Plans................................................. 17
Shareholder .................................................... 1
Shareholder Representative ..................................... 9
Shareholders.................................................... 1
Shareholders' Knowledge......................................... 49
Shares ......................................................... 1
Subsequent Transaction ......................................... 41
Tax Returns..................................................... 22
Taxes........................................................... 23
Taxing Authority................................................ 22
Warrants ....................................................... 12
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "AGREEMENT"), dated as of April 28,
2004, is made by and between Macquarie Investment Holdings, Inc., a Delaware
corporation ("PURCHASER"), Executive Air Support, Inc., a Delaware corporation
("EXECUTIVE"), and all the Shareholders of Executive (individually, a
"SHAREHOLDER" and collectively, the "SHAREHOLDERS"). The Shareholders are listed
on Exhibit A to this Agreement.
Background
The Shareholders collectively own all the outstanding shares of capital
stock of Executive (collectively, the "SHARES");
Canterbury Mezzanine Capital II, L.P., a Shareholder of Executive
("CANTERBURY"), is the record owner of warrants to purchase 1,104,354 shares of
Common Stock of Executive (the "CANTERBURY WARRANT SHARES") pursuant to a
Warrant Agreement, dated December 20, 0000 (xxx "XXXXXXXXXX XXXXXXX"); and
Subject to the terms and conditions hereinafter set forth in this
Agreement, the Purchaser desires to purchase from the Shareholders, and the
Shareholders desire to sell to the Purchaser, the Shares and the Canterbury
Warrant.
Terms
In consideration of the premises and the mutual terms and covenants
contained herein, the parties hereto agree as follows:
ARTICLE 1.
PURCHASE AND SALE
1.1 Agreement to Sell and Purchase. Subject to the terms and conditions
of this Agreement, at the Closing, the Shareholders shall sell to Purchaser, and
Purchaser shall purchase from the Shareholders, the Shares and the Canterbury
Warrant, free and clear of any and all liens, claims, options, charges, pledges,
security interests, voting agreements or trusts, proxies, preemptive rights,
rights of first refusal, encumbrances or other restrictions (other than any
restrictions under federal and state securities laws) or interests of any kind
or nature whatsoever (collectively, "CLAIMS").
1.2 Purchase Price. Subject to the terms and conditions of this
Agreement, Purchaser shall pay at the Closing, an aggregate cash purchase price
in the amount of Two Hundred Seventeen Million Dollars ($217,000,000) (the
"PURCHASE PRICE"); provided, however, that the Purchase Price shall be subject
to adjustment on the date of Closing as provided in Section 1.3 of this
Agreement and subject to further adjustment after the Closing as provided in
Section 1.7 and Section 1.8 of this Agreement.
1.3 Adjustments to Purchase Price.
(a) Adjustments on the Closing Date. The Purchase Price shall be
subject to adjustment at the Closing as follows:
(i) Decreases. The Purchase Price shall be decreased as
follows:
(1) by an amount equal to the outstanding principal
of, and accrued interest on, the Funded Indebtedness (as defined below) as
of the Closing Date; and
(2) by an amount equal to the amount by which the Base
Net Working Capital exceeds the Net Working Capital estimated as of the
Closing Date pursuant to Section 1.7(c), if any.
(ii) Increases. The Purchase Price shall be decreased as
follows:
(1) by an amount equal to the amount by which the Net
Working Capital estimated as of the Closing Date pursuant to Section
1.7(c) exceeds Base Net Working Capital, if any;
(2) by an amount equal to the amount of the Cash and
Cash Equivalents of Executive estimated as of the Closing Date pursuant to
Section 1.8(a); and
(3) by an amount equal to all capital expenditures
paid by Executive on or after April 1, 2004, but prior to the Closing, for
the construction of capital improvements at its fixed base operation
located at Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx up to a maximum amount of Two
Million One Hundred Fifty Thousand Dollars ($2,150,000).
(b) Definitions. For the purposes of this Agreement, "FUNDED
INDEBTEDNESS" shall mean the aggregate amount (including the current portions
thereof) of (i) all indebtedness for money borrowed from others (whether in the
form of direct loans or capital leases) and purchase money indebtedness of
Executive or its Subsidiaries, other than the indebtedness listed in Schedule
1.3; (ii) indebtedness of the type described in clause (i) above secured by any
lien upon property owned by either Executive or its Subsidiaries, even though
Executive or its Subsidiaries has not in any manner become liable for the
payment of such indebtedness, (iii) interest expense accrued but unpaid, and all
prepayment premiums, on or relating to any of such indebtedness, (iv)
indebtedness of the type described in clause (i) above guaranteed, directly or
indirectly, by either Executive or its Subsidiaries, and (v) any purchase money
indebtedness for premiums for insurance maintained by Executive and its
Subsidiaries to the extent the outstanding balance thereof exceeds the amortized
value of the premiums. Funded Indebtedness shall not include the letters of
credit listed in Schedule 1.3 to the extent outstanding on the Closing Date.
Reference to the "Confidentiality Agreement" shall mean the letter agreement
dated November 5, 2003, between Executive Air Support, Inc, and Macquarie
Securities (USA) Inc.
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(c) Closing Certification. Executive shall deliver to Purchaser at
least two (2) days prior to the Closing its certification, duly executed by the
Chief Executive Officer and Chief Financial Officer of Executive, in form
acceptable to Purchaser ("CLOSING CERTIFICATION"), of (a) the amount of the
Funded Indebtedness as of the Closing, broken down by lender, accompanied by
pay-off statements or the functional equivalent thereof from all of the lenders
of the Funded Indebtedness in form reasonably acceptable to Purchaser, (b) a
list of all shareholders of Executive as of the Closing and the number of shares
of Common Stock and Series A Preferred Stock owned by each, (c) a list of all
holders of stock options and warrants of Executive and number and type of shares
of capital stock subject to each such stock option and warrant held by each
holder and (d) the amount of all capital expenditures paid by Executive on or
after April 1, 2004, but prior to Closing, for the construction of capital
improvements at its fixed base operation located at Midway Airport, Chicago,
Illinois.
1.4 Payment of Purchase Price.
(a) The Purchase Price shall be payable as set forth pursuant to a
closing statement (the "CLOSING STATEMENT") in a form reasonably acceptable to
Purchaser and duly executed by the Chief Executive Officer and Chief Financial
Officer of Executive which shall (i) calculate the Purchase Price as adjusted
pursuant to Section 1.3 hereof, (ii) reflect the amounts payable with respect to
the Funded Indebtedness that were deducted from the Purchase Price pursuant to
Section 1.3(a)(i)(1) hereof, and (iii) reflect the portion of the Purchase Price
payable to each Shareholder and to each holder of stock options and warrants to
satisfy the payment obligations of Executive pursuant to the Cancellation
Agreements as defined in Section 3.5.
(b) Two Million Five Hundred Thousand Dollars ($2,500,000)
(together with any interest thereon, the "ESCROW FUNDS") of the Purchase Price
shall be paid to Wachovia Bank, N.A., as Escrow Agent ("ESCROW AGENT") which
shall hold and disburse the Escrow Funds pursuant to the terms of the Escrow
Agreement in the form of Exhibit B (the "ESCROW AGREEMENT"). As set forth in the
Escrow Agreement, the Escrow Funds shall be used solely for the payment of any
amounts payable to the Purchaser under Section 1.7 or 1.8 of this Agreement and
to satisfy any indemnification obligations of the Shareholders pursuant to
Section 8.2. On the first anniversary of the Closing Date, the balance of the
Escrow Funds that have not been used to pay Purchaser under Section 1.7 or 1.8
of this Agreement or to satisfy indemnification obligations of the Shareholders
pursuant to Section 8.2, less the aggregate amount of any indemnification claims
asserted by one or more Purchaser Indemnified Parties that are pending as of the
first anniversary of the Closing Date, shall be distributed in accordance with
Section 1.4(e)(iii) to the Shareholders and the stock option and warrant
holders. If, upon resolution of all such indemnification claims pending as of
such first anniversary date, there is a positive balance of Escrow Funds, such
positive balance shall be distributed in accordance with Section 1.4(e)(iii) to
the Shareholders and the stock option and warrant holders.
(c) The amount of the Purchase Price payable to the Shareholders
and the consideration payable to the stock option and warrant holders pursuant
to the Cancellation Agreements, as defined in Section 3.5, as shown in the
Closing Statement less the Escrow Funds (such difference being referred to as
the "DISBURSEMENT FUND") shall be paid to ABS Capital Partners III, LLC to act
as the disbursement agent for the Shareholders and the stock option and warrant
holders (the "DISBURSEMENT AGENT") by wire transfer of same day funds on the
Closing
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Date to an account designated by the Disbursement Agent at least two (2)
business days prior to Closing.
(d) The Disbursement Agent shall hold such fund in trust for
the Shareholders and the stock option and warrant holders in a separate account
until its application as provided herein.
(e) The Disbursement Agent shall apply the Disbursement Fund
as follows:
(i) The Disbursement Agent shall retain One Million
Dollars ($1,000,000) to be held for disbursement
upon the instructions of the Shareholder
Representative for the payment of expenses
incurred for or on behalf of Executive, the
Shareholders or the stock option and warrant
holders for which the Shareholders are responsible
pursuant to Section 7.1 of this Agreement or, if
not so used, for distribution to the Shareholders
and the stock option and warrant holders pursuant
to Section 1.4(e)(iii) below.
(ii) Next, the holder of each share of Series A
Preferred Stock outstanding immediately prior to
the Closing shall be paid $1.81 in cash per share;
and
(iii) Next, the holders of each share of Common Stock,
each share of Series A Preferred Stock and each
share of Option Equivalent Stock (as defined in
Section 1.4(f) below) outstanding immediately
prior to the Closing shall be paid an amount per
share determined on a prorata per share basis in
the balance of the Disbursement Fund remaining
after the payments pursuant to Subsections (i) and
(ii) above. Such prorata allocation shall be
reflected in the Closing Certification. For the
purposes of this Section 1.4(e)(iii), subject to
Section 9.12 of this Agreement, Canterbury shall
be deemed to hold, in addition to any other shares
of capital stock of Executive owned by Canterbury,
a number of shares of Common Stock equal to the
number of shares of the Canterbury Warrant Shares
as if such shares were outstanding shares of
Common Stock and the payments made to Canterbury
pursuant to this Section 1.4(e)(iii) shall include
the consideration payable to Canterbury for the
purchase of the Canterbury Warrant.
(f) As used in this Agreement, the term "Option Equivalent Stock"
shall mean the result obtained by multiplying the total number of shares subject
to an outstanding employee stock option or outstanding warrant (other than the
Canterbury Warrant) by the Option Ratio (defined below) and rounding the result
to a whole number. For purposes of this Section: (i) the phrase "Option Ratio"
shall mean a fraction (A) the numerator of which shall be the amount calculated
by dividing the Adjusted Purchase Price by the Applicable Number of Shares and
reducing the result by $3.62, and (B) the denominator of which shall be the
Adjusted Purchase Price divided by the Applicable Number of Shares; (ii) the
phrase "Adjusted Purchase Price"
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shall be Purchase Price adjusted: (A) as provided in Section 1.3 of this
Agreement, (B) by decreasing the same by the product of $1.81 times the number
of Series A Preferred Shares outstanding immediately prior to Closing, and (C)
by increasing the same by $3.62 times the total number of shares subject to an
outstanding employee stock option or outstanding warrant (other than the
Canterbury Warrant) immediately prior to Closing; and (iii) the phrase
"Applicable Number of Shares" shall mean the total of each of the following
which is outstanding immediately prior to Closing: (A) each share of Common
Stock, (B) each share of Series A Preferred Stock, and (C) the total number of
shares subject to an outstanding employee stock option or outstanding warrant
(other than the Canterbury Warrant). Option Equivalent Stock shall apply to all
the outstanding employee stock options and warrants of Executive, other than the
Canterbury Warrant.
(g) Any additional Purchase Price paid to the Disbursement Agent
pursuant to Section 1.7 and Section 1.8 of this Agreement shall be distributed
by the Disbursement Agent in accordance with the provisions of Section
1.4(e)(iii) above.
1.5 The Closing. The closing of the transactions contemplated by this
Agreement (the "CLOSING") will take place on a business day selected by
Purchaser with written notice to Executive and the Shareholder Representative
that is no sooner than three (3) days and no later than five (5) days after the
day on which the last of the conditions set forth in Sections 6.1 and 6.2 (other
than those conditions which are only capable of being satisfied contemporaneous
with the Closing) is fulfilled or waived or on such other date as the parties
hereto may agree in writing (the "CLOSING DATE"), at 10:00 a.m. (local time) at
such place as the parties hereto shall mutually agree (including Closing by
facsimile transmission exchange of executed documents or signature pages
followed promptly by overnight courier of originals), and will be effective as
of the 12:01 a.m. on the Closing Date ("EFFECTIVE TIME"),
1.6 Conduct of Closing.
(a) At or prior to the Closing, Executive shall deliver to
Purchaser:
(i) The original share certificates representing the Shares
and the original certificate representing the Canterbury
Warrant, all duly endorsed for transfer by the
respective Shareholder or with appropriate stock powers
with respect thereto duly endorsed by the respective
Shareholder;
(ii) The certificates required in Section 6.1 (a) and (b)
hereof;
(iii) The opinion of counsel referred to in Section 6.1(c);
(iv) The Closing Certification duly executed by the Chief
Executive Officer and Chief Financial Officer of
Executive;
(v) The Escrow Agreement duly executed by the Shareholder
Representative, the Disbursement Agent and Executive;
and
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(vi) Any other documents and certificates contemplated by
Article 5 and Article 6 hereof to be delivered by or on
behalf of Executive, the Shareholders or the stock
option and warrant holders.
(b) At or prior to the Closing, Purchaser shall deliver to the
Shareholder Representative:
(i) The certificates referred to in Section 6.2 (a) and (b)
hereof;
(ii) The opinion of counsel referred to in Section 6.2 (c);
(iii) The Escrow Agreement duly executed by Purchaser; and
(iv) Any other documents and certificates contemplated by
Article 5 and Article 6 hereof.
(c) At or prior to the Closing, the Purchaser shall deliver to the
holders of the Funded Indebtedness the amount reflected in the pay-off
statements or the functional equivalents thereof from such holders as necessary
to pay such indebtedness in full.
(d) At or prior to the Closing, the Purchaser shall deliver to the
Escrow Agent the Escrow Funds.
(e) At or prior to the Closing, the Purchaser shall deliver to the
Disbursement Agent the Disbursement Fund.
1.7 Net Working Capital Determination.
(a) As used herein, the term "Net Working Capital" shall mean the
aggregate current assets of Executive and its Subsidiaries on a consolidated
basis (excluding all cash and cash equivalents which would otherwise be included
in current assets) minus the aggregate current liabilities of Executive and its
Subsidiaries on a consolidated basis (excluding the current portion of any
Funded Indebtedness to be paid in connection with the Closing which would
otherwise be included in current liabilities), all as determined in accordance
with generally accepted accounting principles ("GAAP") consistent with past
practice and all as determined as of the Effective Time; provided, however, that
the determination of Net Working Capital shall take into account the adjustments
and changes to current assets and current liabilities resulting from the
cancellation of the employee stock options and the warrants effective upon the
Closing and resulting from the payment of the Funded Indebtedness upon the
Closing hereunder.
(b) As used herein, the term "Base Net Working Capital" shall mean
a negative $2,599,500.
(c) At least ten (10) business days prior to Closing, Executive
shall deliver to Purchaser a reasonable estimate of Net Working Capital as of
the Effective Time, based on a balance sheet as of the last day of the most
recently ended calendar month prior to the Closing Date and containing
reasonable detail and supporting documents showing the derivation of such
estimate. Certain principles, specifications and methodologies for determining
Net Working
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Capital are specified in Schedule 1.7 and shall be used for purposes of
calculating Net Working Capital.
(d) Within ninety (90) days after the Closing, Purchaser shall
deliver to the Shareholder Representative its determination of the actual Net
Working Capital as of the Effective Time (following the same principles,
specifications and methodologies used to determine the estimated Net Working
Capital as set forth in Schedule 1.7). Each party shall have full access to the
financial books and records pertaining to Executive and its Subsidiaries to
confirm or audit the Net Working Capital computations. Should the Shareholder
Representative disagree with Purchaser's determination of Net Working Capital,
the Shareholder Representative shall notify Purchaser within thirty (30) days
after Purchaser's delivery of its determination of Net Working Capital. If the
Shareholder Representative and Purchaser fail to agree within thirty (30) days
after Shareholder Representative's delivery of notice of disagreement on the
amount of Net Working Capital, such disagreement shall be resolved in accordance
with the procedure set forth in Section 1.7(f) which shall be the sole and
exclusive remedy for resolving accounting disputes relative to the determination
of Net Working Capital.
(e) The Purchase Price shall be increased or decreased based on
whether the actual Net Working Capital as of the Effective Time (determined
pursuant to Section 1.7(d)) exceeds or is less than the estimated Net Working
Capital as of such time (determined pursuant to Section 1.7(c) hereof). If the
actual Net Working Capital as of the Effective Time (determined pursuant to
Section 1.7(d)) exceeds the estimated Net Working Capital as of such time
(determined pursuant to Section 1.7(c) hereof), then the Purchase Price shall be
increased by such difference. If the actual Net Working Capital as of the
Effective Time (determined pursuant to Section 1.7(d)) is less than the
estimated Net Working Capital as of such time (determined pursuant to Section
1.7(c) hereof), then the Purchase Price shall be decreased by such shortfall.
Within five (5) business days after the final determination of the actual Net
Working Capital as of the Effective Time, any increase in the Purchase Price
shall be paid in cash by Purchaser to the Disbursement Agent, and any decrease
in the Purchase Price shall be paid in cash to Purchaser out of the Escrow Funds
by the Escrow Agent, or, if such amount is insufficient, from the Shareholders.
(f) In the event that the Shareholder Representative and the
Purchaser are not able to agree on the actual Net Working Capital as of the
Effective Time within thirty (30) days after the Shareholder Representative's
delivery of notice of disagreement, the Shareholder Representative and the
Purchaser shall each have the right to require that such disputed determination
be submitted to Ernst & Young, LLP, or if Ernst & Young, LLP is not available
for any reason or does not maintain its independent status, such other
independent certified public accounting firm as the Shareholder Representative
and the Purchaser may then mutually agree upon in writing (the "ACCOUNTING
FIRM") for computation or verification in accordance with the provisions of this
Agreement. The Accounting Firm shall review the matters in dispute and acting as
arbitrators shall promptly decide the proper amounts of such disputed entries
(which decision shall also include a final calculation of the actual Net Working
Capital as of the Effective Time). The submission of the disputed matter to the
Accounting Firm shall be the exclusive remedy for resolving accounting disputes
relative to the determination of Net Working Capital. The Accounting Firm's
determination shall be binding upon the Shareholder
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Representative and the Purchaser. The Accounting Firm's fees and expenses shall
be borne equally by the Shareholders out of the Escrow Funds and the Purchaser.
1.8 Cash and Cash Equivalents Determination.
(a) At least ten (10) business days prior to Closing, Executive
shall deliver to Purchaser a reasonable estimate of cash and cash equivalents of
Executive and its Subsidiaries as of the Effective Time containing reasonable
detail and supporting documents showing the derivation of such estimate. The
amount of cash and cash equivalents shall be determined in accordance with GAAP,
consistent with past practice.
(b) Within ninety (90) days after the Closing, Purchaser shall
deliver to the Shareholder Representative its determination of the actual cash
and cash equivalents of Executive and its Subsidiaries as of the Effective Time
immediately prior to the consummation of the transaction contemplated by this
Agreement. Each party shall have full access to the financial books and records
pertaining to Executive and its Subsidiaries to confirm or audit the cash and
cash equivalents computations. Should the Shareholder Representative disagree
with Purchaser's determination of cash and cash equivalents, the Shareholder
Representative shall notify Purchaser within thirty (30) days after Purchaser's
delivery of its determination of the actual cash and cash equivalents of
Executive and its Subsidiaries as of the Effective Time. If the Shareholder
Representative and Purchaser fail to agree within thirty (30) days after
Shareholder Representative's delivery of notice of disagreement on the amount of
cash and cash equivalents, such disagreement shall be resolved in accordance
with the procedure set forth in Section 1.8(d) which shall be the sole and
exclusive remedy for resolving accounting disputes relative to the determination
of cash and cash equivalents of Executive and its Subsidiaries as of the
Effective Time.
(c) The Purchase Price shall be increased or decreased based on
whether the actual cash and cash equivalents of Executive and its Subsidiaries
as of the Effective Time (determined pursuant to Section 1.8(b)) exceeds or is
less than the estimated cash and cash equivalents as of such time (determined
pursuant to Section 1.8(a) hereof). If the actual cash and cash equivalents of
Executive and its Subsidiaries as of the Effective Time (determined pursuant to
Section 1.8(b)) exceeds the estimated cash and cash equivalents as of such time
(determined pursuant to Section 1.8(a) hereof), the Purchase Price shall be
increased by such difference. If the actual cash and cash equivalents of
Executive and its Subsidiaries as of the Effective Time (determined pursuant to
Section 1.8(b)) is less than the estimated cash and cash equivalents as of such
time (determined pursuant to Section 1.8(a) hereof), the Purchase Price shall be
decreased by such shortfall. Within five (5) business days after the final
determination of the actual cash and cash equivalents of Executive and its
Subsidiaries as of the Effective Time, any increase in the Purchase Price shall
be paid in cash by Purchaser to the Disbursement Agent, and any decrease in the
Purchase Price shall be paid in cash to Purchaser out of the Escrow Funds by the
Escrow Agent, or, if such amount is insufficient, from the Shareholders.
(d) In the event that the Shareholder Representative and the
Purchaser are not able to agree on the actual cash and cash equivalents of
Executive and its Subsidiaries as of the Effective Time within thirty (30) days
after the Shareholder Representative's delivery of notice of disagreement, the
Shareholder Representative and the Purchaser shall each have the right to
8
require that such disputed determination be submitted to the Accounting Firm (as
determined in accordance with Section 1.7(f)) for computation or verification in
accordance with the provisions of this Agreement. The Accounting Xxxx shall
review the matters in dispute and acting as arbitrators shall promptly decide
the proper amounts of such disputed entries (which decision shall also include a
final calculation of the actual cash and cash equivalents of Executive and its
Subsidiaries as of the Effective Time). The submission of the disputed matter to
the Accounting Firm shall be the exclusive remedy for resolving accounting
disputes relative to the determination of the amount of cash and cash
equivalents of Executive and its Subsidiaries as of the Effective Time. The
Accounting Firm's determination shall be binding upon the Shareholder
Representative and the Purchaser. The Accounting Firm's fees and expenses shall
be borne equally by the Shareholders out of the Escrow Funds and the Purchaser.
1.9 Shareholder Representative.
(a) Appointment. By execution and delivery of this Agreement, each
Shareholder, for the heirs, executors, legal representatives, successors and
assigns of each Shareholder, irrevocably constitutes and appoints ABS Capital
Partners, III, LLC (the "SHAREHOLDER REPRESENTATIVE"), as his/her/its true and
lawful agent and attorney-in-fact with full power of substitution to act in the
name, place and stead of such Shareholder with respect to all transactions
contemplated by the terms and provisions of this Agreement, and to act on behalf
of the Shareholders in any dispute, litigation or arbitration involving matters
arising as a result of or under this Agreement, and to take all actions on
behalf of the Shareholders in connection therewith.
(b) Authority. The appointment of the Shareholder Representative
shall be deemed coupled with an interest and shall be irrevocable, and the
Purchaser and any other person may conclusively and absolutely rely, without
inquiry, upon any action of the Shareholder Representative on behalf of the
Shareholders in all matters in which it has been granted authority pursuant to
Section 1.9(a) above. The Shareholder Representative shall act for the
Shareholders in all matters set forth in this Agreement.
(c) Final Decision. All actions, decisions and instructions of the
Shareholder Representative taken, made or given pursuant to the authority
granted to the Shareholder Representative pursuant to Section 1.9(a) above shall
be final, conclusive and binding upon all Shareholders and all actions,
decisions and instructions of the Shareholder Representative taken, made or
given pursuant to the authority granted to such Shareholder Representative
pursuant to Section 1.9(a) shall be conclusive and binding upon all individual
Shareholders. Purchaser, its officers, directors, employees, agents and
affiliates shall be able to rely exclusively on the instructions, decisions and
actions of the Shareholder Representative.
(d) Power of Attorney. The provisions of this Section are
independent and severable, shall constitute an irrevocable power of attorney,
complete with an interest and surviving death or dissolution, granted by each
Shareholder and shall be binding upon the heirs, executors, legal
representatives, successors and assigns of each Shareholder.
9
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF EACH SHAREHOLDER
Each Shareholder, severally and not jointly, represents and warrants to
Purchaser as follows:
2.1 Authority Relative to the Agreement. This Agreement has been duly
and validly executed and delivered by the Shareholder and constitutes a valid,
legal and binding agreement of the Shareholder enforceable in accordance with
its terms, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer
and conveyance, moratorium reorganization, receivership and similar laws
relating to or affecting the enforcement of the rights and remedies of creditors
generally and (ii) principles of equity (regardless of whether considered and
applied in a proceeding in equity or at law). The other agreements to be
executed and delivered by the Shareholder pursuant to this Agreement will be
valid, legal and binding agreements of the Shareholder enforceable in accordance
with their respective terms when so executed and delivered by the Shareholder,
subject to (i) applicable bankruptcy, insolvency, fraudulent transfer and
conveyance, moratorium reorganization, receivership end similar laws relating to
or affecting the enforcement of the rights and remedies of creditors generally
and (ii) principles of equity (regardless of whether considered and applied in a
proceeding in equity or at law).
2.2 Title to Stock. The Shareholder is the unconditional sole legal,
beneficial, record and equitable owner of the number of the Shares set forth
opposite the name of such Shareholder on Exhibit A and, in the case of
Canterbury, the Canterbury Warrant except as noted in Section 9.12. The
Shareholder has not granted and is not a party to any agreement granting
preemptive rights, rights of first refusal or any similar or comparable rights
with respect to the Shares (and, in the case of Canterbury, the Canterbury
Warrant except as noted in Section 9.12), except as have been waived in this
Agreement. The Shareholder is not entering into this Agreement as a trustee of
any trust. At the Closing, each Shareholder will convey to Purchaser good and
valid title to the Shares owned by the Shareholder (and, in the case of
Canterbury, the Canterbury Warrant, free and clear of any and all Claims.
2.3 Shareholder Authorization; Absence of Breach; Consents. The
execution and delivery of this Agreement and the performance of the transactions
contemplated by this Agreement and all other instruments, agreements,
certificates and documents contemplated hereby to which the Shareholder is or
will be a party does not (i) violate any decree or judgment of any court or
governmental authority which may be applicable to the Shareholder; (ii) violate
any law, rule or regulation binding on, or any fiduciary obligation of, the
Shareholder; (iii) violate or conflict with, or result in a breach of, or
constitute a default (or an event which, with or without notice or lapse of time
or both, would constitute a default) under any of the terms, conditions, or
provisions of any material contract or other agreement, including any charter
documents or bylaws if the Shareholder is a corporation, partnership, limited
liability company or other entity, to which the Shareholder is a party, or by
which the Shareholder is bound; (iv) require the consent, approval or
authorization of any person, entity or governmental agency. The Shareholder is
not insolvent and no receiver has been appointed over any part of the
Shareholder's assets.
10
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders, jointly and severally, hereby represent and warrant to
Purchaser as follows:
3.1 Qualification. Executive and its Subsidiaries are corporations or
limited liability companies duly organized or formed, validly existing and in
good standing under the laws of their respective states of incorporation or
formation as set forth in Schedule 3.1. Executive and its Subsidiaries have all
requisite power and authority to own and operate their businesses as conducted
as of the date hereof (collectively the "BUSINESS") and to own, operate and
lease the properties and assets owned, operated or leased by Executive or its
Subsidiaries and used in the Business. Executive and its Subsidiaries are
licensed or qualified to do business as a foreign corporation and each is in
good standing in each jurisdiction in which the properties owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be qualified
would not be material to Executive or its Subsidiaries as a whole. Executive has
heretofore made available to Purchaser complete and correct copies of the
Certificates of Incorporation, Certificates of Formation, Bylaws and Operating
Agreements or similar constituent documents, as the case may be, of Executive
and its Subsidiaries as currently in effect.
3.2 Authorization. Executive has the full corporate power and authority
to enter into this Agreement and the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action on the
part of Executive. This Agreement has been duly executed and delivered by
Executive and constitutes a valid, legal and binding obligation of Executive
enforceable in accordance with its terms and conditions, subject to (i)
applicable bankruptcy, insolvency, fraudulent transfer and conveyance,
moratorium reorganization, receivership and similar laws relating to or
affecting the enforcement of the rights and remedies of creditors generally and
(ii) principles of equity (regardless of whether considered and applied in a
proceeding in equity or at law).
3.3 No Violations. Except as set forth in Schedule 3.3 or in Schedule
3.4, the execution, delivery and performance of this Agreement by Executive will
not (a) conflict with or result in any breach of any provision of the
Certificates of Incorporation, Certificates of Formation, Bylaws or Operating
Agreements or similar organizational documents of Executive or its Subsidiaries,
(b) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
amendment, termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any material note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which
Executive or its Subsidiaries are a party or by which any of them is bound or
(c) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Executive or its Subsidiaries, or their properties or assets.
Except as set forth in Schedule 3.3 or Schedule 3.4, neither Executive nor any
of its Subsidiaries is or will be required to give any notice or obtain any
consent from any person, corporation, general partnership, limited partnership,
limited liability company, proprietorship, joint venture, trust, association,
union, entity, or other form of business organization or any Governmental Entity
(as defined in Section 3.4 below) (a
11
"PERSON") whatsoever in connection with the execution of this Agreement and the
consummation of the transactions contemplated hereby.
3.4 Consents and Approvals. Except as set forth in Schedule 3.4, no
consent, approval, order or authorization of or registration, declaration or
filing with or exemption (collectively, "CONSENTS") by any court, administrative
agency or commission or other governmental authority or instrumentality, whether
local, domestic or foreign (each a "GOVERNMENTAL ENTITY"), is required by or
with respect to Executive or its Subsidiaries or the Shareholders in connection
with the execution and delivery of this Agreement by Executive, or the
consummation of the transactions contemplated hereby, except for the filing of
all required documents by Purchaser and the Shareholders, and the expiration of
all applicable waiting periods, under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR ACT").
3.5 Capitalization.
(a) The authorized capital stock of Executive consists of
30,000,000 shares of Common Stock, $.01 par value per share, of which 1,843,689
shares of the Common Stock are issued and outstanding; and 20,000,000 shares of
Preferred Stock, par value of $.01 per share, of which 18,508,784 have been
designated as Series A Preferred Stock and of which 18,508,784 shares of Series
A Preferred Stock are issued and outstanding. Except as set forth in Schedule
3.5, all of the issued and outstanding shares of Common Stock and Series A
Preferred Stock have been duly authorized and are validly issued, fully paid and
nonassessable and free of preemptive rights, were not issued in violation of the
terms of any agreement or other understanding binding upon Executive or any
other Person and were issued in compliance with applicable federal and state
securities or blue sky laws and regulations. Except for the Shares and the
outstanding employee stock options (the "OPTIONS") and the outstanding warrants
(the "WARRANTS") set forth in Schedule 3.5, which Options and Warrants shall be
exercised or terminated as of the Closing Date, there are not now and will not
be as of the Closing any other shares of capital stock of Executive issued or
outstanding nor, except as described in this Section, any options, warrants,
subscriptions, calls, rights, convertible securities or other agreements or
commitments obligating Executive or its Subsidiaries to issue, transfer, sell,
redeem, repurchase or otherwise acquire any share of its capital stock. There
are no outstanding or authorized stock appreciation, phantom stock, profit
participation or similar rights with respect to Executive or any of its
Subsidiaries. Each holder of Options and Warrants (other than the Canterbury
Warrant) marked with an asterisk in Schedule 3.5 has duly executed and delivered
to Executive a cancellation agreement in the form of Exhibit C (each a
"CANCELLATION AGREEMENT").
(b) The Shareholders owning all of the issued and outstanding
capital stock of Executive are shown on Exhibit A. Except as shown in Schedule
3.5, there are no voting trust agreements or other agreements restricting the
voting, dividend rights or disposition of any of the shares of Stock.
3.6 Subsidiaries. Schedule 3.6 contains a complete and accurate list of
each Subsidiary of Executive and sets forth for each such Subsidiary: (a) its
name and jurisdiction of incorporation or organization, (b) its authorized
capital stock or ownership interests and (c) the number of issued and
outstanding shares of capital stock or ownership interests. Executive owns
12
directly or indirectly each of the outstanding shares of capital stock (or other
ownership interests having by their terms ordinary voting power to elect a
majority of directors or others performing similar functions with respect to
such Subsidiary) of each of the Subsidiaries set forth in Schedule 3.6. Each of
the outstanding shares of capital stock (or other ownership interests) of each
of Executive's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable. All of the outstanding shares of capital stock (or other
ownership interests) of each such Subsidiary is owned, directly or indirectly,
by Executive, free and clear of all liens, pledges, security interests, claims,
or other encumbrances, except as set forth in Schedule 3.6. There are not now,
and at Closing there will not be, (a) issued or outstanding (i) any shares of
capital stock or ownership interests of any of Executive's Subsidiaries other
than shares or ownership interests owned by Executive, directly or indirectly,
or (ii) any securities convertible into or exchangeable for, or any options,
warrants, calls, subscriptions or other rights (preemptive or otherwise) to
acquire, any shares of capital stock or ownership interests of any of
Executive's Subsidiaries, or (b) any agreements or contractual commitments
obligating Executive, or restricting Executive's rights, to transfer, sell, or
vote, the capital stock or ownership interests of Executive's Subsidiaries owned
by it, directly or indirectly. For purposes of this Agreement, the definition of
"Subsidiaries" shall mean with respect to any Person, any corporation,
partnership, joint venture or other legal entity of which such Person (either
alone or through or together with any other Subsidiary), owns, directly or
indirectly, at least 50% of the stock or other equity interests the holders of
which are generally entitled to vote for the election of the board of directors
or other governing body of such corporation or other legal entity.
3.7 Interests in Other Entities. Except as set forth in Schedule 3.7,
neither Executive nor any of its Subsidiaries, directly or indirectly, has any
(a) interest in the outstanding stock or ownership interests of any corporation
or in any partnership, joint venture or other entity, other than the
Subsidiaries, or (b) agreement, understanding, contract or commitment relating
to an interest in any such entity or Executive's or any of its Subsidiaries'
investment therein.
3.8 Compliance with Law. Except as set forth in Schedule 3.8, each of
Executive and its Subsidiaries has complied in all material respects with (or,
in these instances occurring and relating solely to periods prior to the
Effective Date in which Executive or its Subsidiaries has not complied, such
compliance has been achieved, waived or resolved prior to the Effective Time
with no continuing liability or obligation of Executive or any of its
Subsidiaries), and is in compliance in all material respects with, all federal,
state, county, and local laws, regulations, and orders that are applicable to
Executive's and its Subsidiaries' Business, including, but not limited to, the
rules and regulations of the Federal Aviation Administration (the "FAA"), and
the states and municipalities in which Executive and its Subsidiaries are
located, and has timely filed with the proper authorities all material
statements and reports required by the laws, regulations, and orders to which
Executive, its Subsidiaries and their respective Businesses are subject.
3.9 Litigation. Except as described in Schedule 3.9, Executive and its
Subsidiaries have received no notice of any litigation, claim, action, suit,
proceeding or governmental investigation pending and there is no pending, or, to
the Shareholders' Knowledge, threatened litigation, claim, action, suit,
proceeding or governmental investigation against Executive or its Subsidiaries.
Executive and its Subsidiaries are not in violation of any material term of any
judgment decree, injunction or order outstanding against them.
13
3.10 Insurance.
(a) Each of Executive and its Subsidiaries maintains insurance
with respect to the Business, and Executive and its Subsidiaries are in
compliance with all requirements and provisions thereof and have not failed to
give any notice or present any claim under any such policy in a timely fashion
or in the manner or detail required by the policy.
(b) True and correct copies of all insurance policies relating to
such coverage have been made available by Executive to Purchaser. All such
policies are in full force and effect and no notice of cancellation has been
given to or received by Executive or any of its Subsidiaries with respect to any
of its insurance policies and no such policy permitted to lapse, and, except as
set forth in Schedule 3.10, no such policies are subject to any retroactive rate
or audit adjustments or coinsurance arrangements.
3.11 Financial Statements.
(a) Attached hereto as Schedule 3.11 (a) are true and complete
copies of (i) the audited consolidated balance sheets of Executive and its
Subsidiaries as of December 31, 2001, 2002 and 2003 and the related statements
of operations and cash flow for each of the fiscal years in the three
fiscal-year period ending December 31, 2003 and (ii) the unaudited consolidated
balance sheet and statements of income, changes in stockholders' equity and cash
flow of Executive and its Subsidiaries (the "EXECUTIVE BALANCE SHEET") as of and
for the two (2) month period ended February 29, 2004 (the "INTERIM BALANCE SHEET
DATE") for Executive and its Subsidiaries (collectively, including the notes
thereto, the "FINANCIAL STATEMENTS"). The Financial Statements have been
prepared in accordance with the books and records of Executive and its
Subsidiaries and present fairly the financial position and the results of
operations and cash flows of Executive and its Subsidiaries as of the dates or
for the periods set forth therein. The Financial Statements have been prepared
in accordance with GAAP, consistently applied.
(b) Schedule 3.11(b) includes a list of all Funded Indebtedness as
of the date hereof.
3.12 Accounts Receivable. Except as set forth in Schedule 3.12, each of
Executive's and its Subsidiaries' accounts receivable arose, and all accounts
receivable that will be outstanding as of the Closing Date shall have arisen,
from bona fide transactions in the ordinary course of business. The reserve for
accounts receivables set forth in the Executive Balance Sheet have been
established consistently with Executive's and its Subsidiaries' historical
accounting practice.
3.13 Inventory. Except as set forth in Schedule 3.13, Executive's and its
Subsidiaries' inventory consists of items of a quality and quantity usable and
salable in the ordinary course of business. The value of the inventory, which is
obsolete, of below standard quality or in excess of reasonably estimated usage
has been written-off or down and adequate reserves provided therefor. The values
at which Executive and its Subsidiaries' inventories carried in the Financial
Statements reflect the normal inventory valuation policy of Executive and its
Subsidiaries.
3.14 No Undisclosed Liabilities. Except as set forth in Schedule 3.14 or
expressly set forth in any of the other Schedules hereto, Executive and its
Subsidiaries have no liabilities or
14
obligations of any nature (contingent or otherwise) required by GAAP to be
disclosed on the Executive Balance Sheet, except for the liabilities or
obligations reflected or reserved against in the Executive Balance Sheet and for
current liabilities incurred in the ordinary course of business since February
29, 2004.
3.15 Powers of Attorney. Except as set forth in Schedule 3.15, neither
Executive nor any of its Subsidiaries or any of their directors or officers, has
any power of attorney with respect to Executive's and its Subsidiaries' Business
outstanding.
3.16 Contracts.
(a) Schedule 3.16 lists all of the following Contracts
("CONTRACTS") of Executive and each of its Subsidiaries:
(i) each partnership, joint venture or other similar
agreement or arrangement to which Executive or any of
its Subsidiaries is a party;
(ii) each lease of real property to which Executive or one of
its Subsidiaries is a party, including all FBO Leases
(defined below), and each lease of personal property to
which Executive or one of its subsidiaries is a party
that has rent payable after the date hereof in excess of
$100,000;
(iii) each agreement of Executive and its Subsidiaries
relating to indebtedness for borrowed money (whether
incurred, assumed, guaranteed or secured by any asset);
(iv) each contract containing covenants purporting to
materially limit the freedom of Executive or any of its
Subsidiaries to compete in any line of business or in
any geographic area;
(v) each contract that is not for the purchase, sale or
license of goods or services in the ordinary course of
business consistent with past practice;
(vi) each policy of insurance; and
(vii) each agreement which has aggregate expenditure
obligations of $150,000 or more to any Person.
(b) True and complete copies of all such Contracts have been
provided to Purchaser. True and complete copies of the lease or use agreement
with or on behalf of the airport authority relating to each fixed base operation
location of Executive and its Subsidiaries (the "FBO LEASES") are attached to
Schedule 3.16(b)(i). Each of the FBO Leases has a term and renewal period as set
forth in Schedule 3.16(b)(ii). Except as set forth in Schedule 3.16, the
Contracts are in full force and effect, are valid and binding, and enforceable
against Executive and its Subsidiaries, as applicable, and, to the Knowledge of
the Shareholders, the other parties
15
thereto in accordance with their respective terms. Neither Executive nor any of
its Subsidiaries, nor, to the Shareholders' Knowledge, any other party to any
such contract is in default in the performance of, or is not in compliance with,
any material provision of any such contract, including any minimum service
requirements under any FBO Lease and no event has occurred that with the passage
of time or the giving of notice or both would constitute a default by Executive
or any Subsidiary or, to the Shareholders' Knowledge, any other party under any
material provision thereof.
(c) Except as set forth in Schedule 3.16, the consummation of the
transactions contemplated by this Agreement would not give any party to a
Contract listed in Schedule 3.16 the right to terminate or alter the terms of
such contract.
(d) Set forth in Schedule 3.16 is a list of the twenty-five (25)
largest customers of Executive and its Subsidiaries by gallons of fuel purchased
in the 2003 calendar year at each facility where Executive or a Subsidiary has a
fixed base operation. Other than the customers set forth in Schedule 3.16, no
other customer accounted for more than five percent (5%) of the gallons of fuel
purchased by customers of Executive and its Subsidiaries taken as a whole in the
2003 calendar year. None of the customers listed in Schedule 3.16 has given
Executive or its Subsidiaries written notice that such customer intends to cease
or reduce its buying of goods or services from Executive or its Subsidiaries.
(e) Except as disclosed in Schedule 3.16, no material supplier to
or landlord of Executive or any of its Subsidiaries, including any party to the
FBO Leases, or any Governmental Entity has taken, and neither Executive nor any
of its Subsidiaries have received any written notice that, any material supplier
to or landlord of Executive or any of its Subsidiaries, including any party to
any of the FBO Leases, or any Governmental Entity contemplates taking, any steps
to terminate the business relationship of the Executive or any of its
Subsidiaries with such supplier or landlord, including any party to the FBO
Leases.
3.17 Bank Accounts, Etc. Schedule 3.17 sets forth a true, and complete
list of all bank accounts, safe deposit boxes and lock boxes of Executive and
its Subsidiaries including, with respect to each such account and lock box,
identification of all authorized signatories.
3.18 Employees; Employee Benefit Plans.
(a) Schedule 3.18(a) sets forth a complete and correct list of
each person who, as of the date set forth in Schedule 3.18(a), is employed by
Executive or any of its Subsidiaries, including each active employee and each
employee classified as inactive as a result of disability, leave of absence,
layoff, or other absence. With respect to each such person, Schedule 3.18(a)
includes the position, 2003 compensation, and the current wage rate as of the
date specified on the Schedule. Schedule 3.18(a) sets forth a listing of all
bonuses paid to management employees of Executive or any of its Subsidiaries
with respect to calendar year 2003 and all bonuses in excess of $1,000 per
individual paid to other employees of Executive or any of its Subsidiaries with
respect to calendar year 2003.
(b) Schedule 3.18(b) lists all deferred compensation, pension,
profit sharing, stock option, stock purchase, savings, group insurance and
retirement plans, and all vacation pay,
16
severance pay, incentive compensation, consulting, bonus and other employee
benefit or fringe benefit plans or arrangements, including but not limited to
all plans or programs that constitute "employee benefit plans" as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), maintained by Executive or its Subsidiaries or with respect to which
contributions are made by Executive or its Subsidiaries (including health, life
insurance and other benefit plans maintained for retirees) or with respect to
which Executive or its Subsidiaries have any current or contingent liability
(the "BENEFIT PLANS"). Schedule 3.18(b) identifies all Benefit Plans (if any)
that are "QUALIFIED PLANS". A "Qualified Plan" means those Benefit Plans
intended to qualify under Section 401(a) of the Internal Revenue Code of 1986,
as amended (the "CODE") and any trusts maintained pursuant thereto which are
intended to be exempt from federal income taxation under Section 501 of the
Code.
(c) With respect, as applicable, to Benefit Plans (provided,
however, that for the purposes of Sections 3.18(c)(iii) through (vi), inclusive,
and Section 3.18(g), the term Benefit Plan shall not include the I.A.M. National
Pension Fund listed on Schedule 3.18(b)):
(i) Except as set forth in Schedule 3.18(c)(i), neither
Executive nor any of its Subsidiaries has since January
1, 1999, maintained or contributed to a Qualified Plan
and, except to the extent accrued on the Financial
Statements, Executive and its Subsidiaries have no
unpaid material liability with respect to any Qualified
Plan required by GAAP to be reflected on the Financial
Statements.
(ii) Except as set forth in Schedule 3.18(c)(ii), neither
Executive nor any of its Subsidiaries has since January
1, 1999 sponsored, maintained, contributed to, had any
obligation to sponsor, maintain, contribute to or had
any material liability (whether actual, contingent with
respect to any of its assets, or otherwise) with respect
to any Benefit Plan subject to Section 302 of ERISA or
Section 412 of the Code or Title IV of ERISA. Except as
shown in Schedule 3.18(c)(ii), Executive and its
Subsidiaries neither have nor, since January 1, 1999,
have had any ERISA Affiliates other than each other. For
purposes of this Agreement, "ERISA AFFILIATE" shall mean
any person, trade or business, whether or not
incorporated, which together with such person would be
deemed, at any time from January 1, 1999 through the
Closing Date, to be a single employer pursuant to the
rules set forth in Section 4001 of ERISA or Section
414(b), (c), (m) or (o) of the Code.
(iii) True, correct and complete copies of all of the
following documents with respect to each Benefit Plan
have been provided to Purchaser: (1) all plan documents,
including but not limited to trust agreements, insurance
policies, service agreements and amendments thereto, (2)
the Forms 5500 and any financial statements attached
thereto for the last three plan years for each Benefit
Plan, (3) the last Internal Revenue Service ("IRS")
determination letters that covered the qualification of
each
17
Qualified Plan, and the materials submitted by
Executive to obtain those letters, (4) the most
recent summary plan descriptions and summaries of
material modifications, (5) copies of all
non-discrimination testing reports for the last three
plan years for each Benefit Plan and (6) all other
material employee communications relating to such
Benefit Plans. To the Knowledge of the Shareholders,
no officer, director, agent, representative or
employee of Executive has made any oral or written
representation which is inconsistent in any material
respect with the terms of any written Benefit Plan.
(iv) There are no pending claims or lawsuits by, against,
or relating to any Benefit Plan, and no claims or
lawsuits have been asserted or instituted relating to
any Benefit Plan, against the assets of any trust or
other funding arrangement under any such plan, by or
against Executive or any of its Subsidiaries with
respect to any Benefit Plan or by or against the plan
administrator or any fiduciary of any Benefit Plan,
and the Shareholders do not have Knowledge of any
fact that could form the basis for any such claim
(other than routine claims for benefits) or lawsuit.
(v) Each Benefit Plan has been maintained in all material
respects in accordance with its constituent documents
and with all applicable provisions of the Code, ERISA
and other laws, including federal and state
securities laws. Each Benefit Plan that is a
Qualified Plan meets the requirements of Section
401(a) of the Code.
(vi) Except to the extent that it could not reasonably be
expected to result in a liability to Purchaser,
Executive or any Subsidiary, with respect to each
Benefit Plan, there has occurred no material
non-exempt "prohibited transaction" (within the
meaning of Section 4975 of the Code) or material
transaction prohibited by Section 406 of ERISA or
material breach of any fiduciary duty described in
Section 404 of ERISA and no Benefit Plan held or
holds any stock or other security issued by Executive
or its Subsidiaries.
(vii) Executive and its Subsidiaries do not contribute to
and do not have any actual or contingent liability
with respect to any "multiemployer plan" as defined
in Section 3(37) of ERISA other than the I.A.M.
National Pension Fund, and have not incurred any
withdrawal liability with respect to any such plans
including but not limited to the I.A.M. National
Pension Fund, since January 1, 1999.
(viii) Neither Executive nor any Subsidiary has ever
maintained, contributed to or had any actual or
contingent liability to a "voluntary employees
beneficiary association" as defined on
18
Section 501(c)(9) of the Code or any other "welfare
benefit fund" as defined on Section 419(e) of the
Code and all liability with respect to any self
funded or self insured Benefit Plan has been properly
accrued on the Financial Statements to the extent
required by GAAP.
(ix) No matters are currently pending with respect to any
Benefit Plan under the Employee Plans Compliance
Resolution System maintained by the IRS or any
similar program maintained by any other governmental
entity.
(x) All contributions, premiums or other payments due
under each Benefit Plan or required by applicable law
have been made within the time due and all unpaid
amounts attributable to each Benefit Plan for any
period prior to the Closing Date will be accrued on
the books and records of Executive and its
Subsidiaries in accordance with GAAP.
(d) Except as set forth in Schedule 3.18(d), no employee,
independent contractor, or former employee (or any dependents or beneficiaries
of any such person) of Executive or any of its Subsidiaries is entitled to
receive any benefits, including, without limitation, death or medical benefits
(whether or not insured) beyond retirement or other termination of employment,
other than (1) death or retirement benefits under a Qualified Plan, (2) deferred
compensation benefits accrued as liabilities on the Financial Statements or (3)
continuation coverage mandated under Section 4980B of the Code or other
applicable law.
(e) Except as set forth in Schedule 3.18(e), neither Executive nor
any of its Subsidiaries has declared or paid or will pay any bonus compensation
in contemplation of the transactions contemplated by this Agreement.
(f) Neither Executive nor its Subsidiaries are parties to any
contract, agreement, plan or arrangement requiring them to make payments to any
person that would be a "parachute payment" (within the meaning of Section 280G
of the Code) by reason of the consummation of the transactions contemplated by
this Agreement.
(g) Each Benefit Plan is terminable at the discretion of Executive
or a Subsidiary and without cost to such entity.
(h) To the Knowledge of the Shareholders and subject to the
provisions of the existing labor union agreements listed in Schedule 3.19,
Executive and its Subsidiaries may, without cost, withdraw its employees from
the I.A.M. National Pension Fund. For purposes of this paragraph, withdrawal
liability with respect to such multiemployer plan shall be treated as a cost.
3.19 Labor Matters. Except as set forth in the correspondingly numbered
section of Schedule 3.19, with respect to employees of Executive and its
Subsidiaries:
19
(a) Executive and its Subsidiaries are and have been in material
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, including
without limitation any such laws respecting employment discrimination, workers
compensation, family and medical leave, the Immigration Reform and Control Act,
the Americans with Disabilities Act, and occupational safety and health
requirements, and have not and are not engaged in any unfair labor practice;
(b) There is not now, nor since January 1, 2000 has there been any
unfair labor practice complaint against Executive or any of its Subsidiaries
pending or to the Shareholders' Knowledge, threatened before the National Labor
Relations Board or any other comparable authority;
(c) There is not now, nor since January 1, 2000, has there been,
any labor strike, lock-out, slowdown, or work stoppage actually pending or, to
the Shareholders' Knowledge, threatened against or directly affecting Executive
or any of its Subsidiaries;
(d) No labor representation organization effort exists nor has
there been any such activity since January 1, 2000;
(e) No grievance or any arbitration proceeding arising out of or
under collective bargaining agreements is pending and, to the Shareholders'
Knowledge, no claims therefor exist or have been threatened;
(f) The employees of Executive and its Subsidiaries are not
represented by any labor union, and no collective bargaining agreement is
binding and in force against Executive or any of its Subsidiaries or currently
being negotiated by Executive or any of its Subsidiaries;
(g) Neither Executive nor its Subsidiaries is a party to an
employment agreement and, subject to the provisions of the employment agreements
listed in Schedule 3.18(b) and the labor union agreements listed in Schedule
3.19, the terms of employment of all employees of Executive and each Subsidiary
are such that their employment may be terminated at will with notice given at
any time and without liability for payment of compensation or damages;
(h) Since January 1, 2000, all individuals classified by Executive
and its Subsidiaries as "independent contractors" satisfy and have satisfied the
requirements of law to be so classified and Executive and its Subsidiaries have
fully and accurately reported the compensation paid to such independent
contractors on IRS Forms 1099 when required to do so; and
(i) No employee of Executive or any Subsidiary is currently on
leave as a result of any work related injury or accident or receiving disability
benefits under any Benefit Plan.
20
3.20 Property.
(a) Schedule 3.20 lists all oral or written leases, including the
FBO Leases, subleases, licenses, concession agreements or other use or occupancy
agreements pursuant to which Executive or its Subsidiaries lease to or from any
other party any real property, including all renewals, extensions, modifications
or supplements to any of the foregoing or substitutions for any of the foregoing
(collectively, the "LEASES"), and, if applicable, identifies each of the
municipal airports to which they relate (collectively, the "AIRPORTS").
Executive and its Subsidiaries do not own any real property.
(b) Schedule 3.20 identifies, as of the date reflected thereon all
tangible personal property and assets (other than inventory) owned or leased by
Executive or its Subsidiaries. Except as set forth in Schedule 3.20, each of
Executive and its Subsidiaries has good and marketable title to all, of tangible
and intangible property and assets owned by it, free of liens except for
statutory mechanics' and materialmen's liens and liens for Taxes (as defined in
Section 3.21(b) below) not yet due and payable (such items described therein
bring referred to as "PERMITTED LIENS") of any nature whatsoever. Executive and
its Subsidiaries own or lease all assets and properties that are used in or
necessary to the operation of the Business.
(c) Except as set forth in Schedule 3.20:
(i) All Leases are valid and in full force and effect, and
have not been assigned, modified, supplemented or
amended. Executive has provided Purchaser with true and
complete copies of all of the Leases and all amendments
thereto, and has made available to Purchaser all
material correspondence related thereto. Except as set
forth in Schedule 3.20, Executive's and its
Subsidiaries' interests under the Leases are held free
of all mortgages, liens, charges, claims, restrictions,
pledges, security interests, impositions, covenants,
conditions and other encumbrances.
(ii) Executive and its Subsidiaries have received no notice
of threatened condemnation proceedings, lawsuits or
administrative actions relating to any of the real
property or any other matters which do or may adversely
effect the current use, occupancy or value thereof and
there an no pending or, to the Shareholders' Knowledge,
threatened condemnation proceedings, lawsuits or
administrative actions relating to any of the real
property or any other matters which do or may adversely
effect the current use, occupancy or value thereof.
(iii) All facilities, buildings, improvements and other
structures located on the leased real property and all
present uses and operations of the leased real property
and the structures by Executive and its Subsidiaries,
comply in all material respects to the Knowledge of the
Shareholders with all applicable zoning, land-use,
building, fire, labor, safety, subdivision and other
governmental
21
requirements and all deed or other title covenants or
restrictions applicable thereto. Neither Executive nor
any of its Subsidiaries has received any notice that any
of the leased real property or any of the structures, or
the use, occupancy or operation thereof by Executive or
its Subsidiaries, violate any governmental requirements
or deed or other title, covenants or restrictions,
except for any violations which do not have a material
effect.
(iv) Each of Executive and its Subsidiaries has obtained all
approvals of governmental authorities (including
certificates of use and occupancy, licenses and permits)
required in connection with the construction, ownership,
use, occupation and operation of the leased real
property and the structures thereon, and all equipment
owned or used by Executive or its Subsidiaries. To the
Knowledge of the Shareholders, none of the leased real
property or any of the structures thereon are dependent
upon or benefit from any "nonconforming use" or similar
zoning classification.
(v) Other than in the ordinary course of business, there are
no parties other than Executive or its Subsidiaries in
possession of any of the leased real property or any
portion thereof, and, other than in the ordinary course
of business, there are no leases, subleases, licenses,
concessions or other agreements, written or oral,
granting to any party or parties the right of use or
occupancy of any of the leased real property or any
portion thereof.
(vi) To the Knowledge of the Shareholders, the legal
descriptions for the real property contained in the
Leases adequately describe the leased real property
subject thereto. To the Knowledge of the Shareholders,
all structures on the leased real property are located
within the boundary lines of the leased real property
and no structures, facilities or other improvements on
any parcel adjacent to any of the leased real property
encroach onto any of the leased real property. To the
Knowledge of the Shareholders, all structural,
mechanical and other physical systems related to the
leased real property are in good operating condition and
repair, reasonable wear and tear excepted, in all
material respects.
(vii) Neither Executive nor its Subsidiaries nor their
respective landlords are in default under any of the
Leases, nor are there any state of facts which with
notice, the passage of time or both would constitute a
default by Executive or any of its Subsidiaries under
any of the Leases. Neither Executive nor any of its
Subsidiaries has received any notice of default or claim
of default by any landlord under any of the Leases.
22
(viii) Neither Executive nor any of its Subsidiaries is
required to make any capital expenditure under the
terms of the Leases.
3.21 Taxes.
(a) Executive and its Subsidiaries have timely filed with the
appropriate federal, state, local or foreign governmental authorities (each a
"TAXING AUTHORITY") any and all declarations, returns, reports, estimates,
information returns, schedules, statements or other documents filed or required
to be filed with any Taxing Authority, ("TAX RETURNS") on or before the date
hereof (taking into account any extension of time obtained or allowed for filing
such Tax Returns) (and will file all such Tax Returns required to be filed after
the date hereof through the Closing Date), and such Tax Returns are (or will be)
true, correct and complete in all material respects. Executive and its
Subsidiaries have made available to Purchaser true and complete copies of all
their Tax Returns for all periods ending on or after December 31, 2000, and all
material examination reports issued since such date by Taxing Authorities with
respect to Taxes of Executive and its Subsidiaries and statements of material
Taxes assessed since such date against Executive or its Subsidiaries that were
not shown, but were required to have been shown, on Tax Returns filed by them.
(b) Executive and its Subsidiaries have paid in full all federal,
state and local or foreign income, estimated, payroll, withholding, excise,
sales, use, real and personal property, use and occupancy, business and
occupation, mercantile, transfer, capital stock and franchise or other taxes of
any kind whatsoever (all the foregoing taxes, including interest, additions and
penalties thereon, being hereinafter collectively called ("TAXES") required to
have been paid by Executive and its Subsidiaries (whether or not shown on any
Tax Return).
(c) Except as set forth in Schedule 3.21, Executive and its
Subsidiaries have made adequate provision in the Executive Balance Sheet and
will make adequate provision in the estimated statement of Net Working Capital
described in Section 1.7(c), in accordance with GAAP, for payment of all Taxes
payable by Executive and its Subsidiaries for any taxable period or portion
thereof ending on or before the effective date of such statement, and any Tax
attribute reflected on its Tax Returns is correctly reflected in all material
respects.
(d) Except as set forth in Schedule 3.21, none of Executive or its
Subsidiaries is delinquent in the payment of any Tax or has requested or been
granted any extension of time within which to file any Tax Return which Tax
Return has not since been filed.
(e) Except as set forth in Schedule 3.21, there are no outstanding
requests for rulings or determinations in respect of any Tax or Tax attribute
pending between Executive or any of its Subsidiaries and any Taxing Authority.
(f) None of Executive or its Subsidiaries has granted any
extension or waiver of the statute of limitations period applicable to
assessment or collection of any Tax, which period (after, giving effect to such
extension or waiver) has not expired.
(g) For purposes of filing income Tax Returns and calculating
income Taxes, except as set forth in Schedule 3.21, neither Executive nor its
Subsidiaries have been a member of an affiliated, consolidated, combined or
unitary group other than one of which Executive was
23
the common parent. Except as set forth in Schedule 3.21, Executive and
Subsidiaries are not and have not been a party to any Tax allocation, Tax
sharing or similar agreement or arrangement, have no liability for or with
respect to Taxes of another Person pursuant to Treasury Regulation Section
1.1502-6 (or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise.
(h) Executive and its Subsidiaries have not received any written
notice of deficiency or assessment from any Taxing Authority with respect to
liabilities for income Taxes or any other Taxes which have not been fully paid
or finally settled. There are no mortgages, pledges, security interests,
encumbrances, liens or charges of any kind with respect to Taxes upon any of the
properties or assets of Executive or its Subsidiaries, other than liens for
Taxes not yet due and payable or that are being contested in good faith.
(i) Except as set forth in Schedule 3.21, there are no ongoing
audits relating to Taxes of Executive or any of its Subsidiaries or examinations
of any Tax Return which includes Executive or any of its Subsidiaries and no
notice of such audit or examination has been received by Executive or any of its
Subsidiaries in respect of any such future audit or examination.
(j) Executive and its Subsidiaries have not entered into nor has
there been entered into on their behalf any closing or similar agreement with
any Taxing Authority, and have not obtained any ruling or determination relating
to Taxes, that remains in effect (including, without limitation, any
requirement, incident to a change in method of accounting, to include an amount
in income for any taxable period ending after the Closing Date pursuant to
Section 481(a) of the Code or any similar provision).
(k) Executive and its Subsidiaries have received no notice of any
claims, actions, suits, proceedings, or investigations, and there are no pending
claims, actions, suits, proceedings, or investigations, with respect to
Executive or any of its Subsidiaries in respect of any Tax or Tax attribute.
(l) All monies which Executive or its Subsidiaries are required by
law to withhold from employees or other third parties have been withheld and
either timely paid to the proper governmental authority or set aside in
accounting for payment when due and accrued in the books of Executive or its
Subsidiaries. Executive and its Subsidiaries have complied with all information
reporting and backup withholding requirements.
(m) Except as set forth in Schedule 3.21, neither Executive nor
any Subsidiary is a party to any contract, agreement, plan or arrangement
covering any employee or former employee of either Executive or any of its
Subsidiaries that, individually or collectively, would obligate Executive or any
of its Subsidiaries to make a payment of any amount (or portion thereof) that
would not be deductible pursuant to Sections 280G, 404 or 162 of the Code;
provided that for purposes of determining compliance with this representation,
payments made after the Closing other than payments made pursuant to contracts,
agreements, plans or arrangements described above that are in effect as of the
time of the Closing shall not be taken into account, and the law in effect as of
the Closing Date shall be applied.
24
(n) Neither Executive nor its Subsidiaries has filed any consent
agreement under Section 341(f) of the Code or agreed to have Section 341(f)(2)
of the Code apply to any disposition of a subsection (f) asset (as defined in
Section 341(f)(4) of the Code) owned by any of them.
(o) Neither Executive nor any of its Subsidiaries is, and has not
been at any time, a "United States real property holding corporation" within the
meaning of Section 897(c)(2) of the Code.
(p) Neither Executive nor its Subsidiaries have taken any action
not in accordance with past practice that would have the effect of deferring a
measure of Tax from a period (or portion thereof) ending on or before the
Closing Date to a period (or portion thereof) beginning after the Closing Date.
Neither Executive nor its Subsidiaries have any deferred income or Tax Liability
arising out of any transaction, including without limitation, any (i)
intercompany transaction (as defined in Treasury Regulation Section 1.1502-13),
or (ii) the disposal of any property in a transaction accounted for under the
installment method pursuant to Section 453 of the Code, except to the extent
adequately reserved for on the Interim Balance Sheet.
(q) No property owned by Executive or its Subsidiaries is (i)
property required to be treated as being owned by another Person pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended
and in effect immediately prior to the enactment of the Tax Reform Act of 1986,
(ii) "tax-exempt use property" within the meaning of Section 168(h)(1) of the
Code or (iii) is "tax-exempt bond financed property" within the meaning of
Section 168(g) of the Code.
(r) None of Executive or its Subsidiaries have, in the two years
prior to the date of this Agreement, constituted either a "distributing
corporation" or a "controlled corporation" within the meaning of Section
355(a)(1)(A) of the Code in a distribution qualifying (or intended to qualify)
under Section 355 of the Code (or so much of Section 356 as relates to Section
355).
3.22 Environmental Matters.
(a) Except as set forth in Schedule 3.22:
(i) To the Knowledge of the Shareholders, Executive and each
of its Subsidiaries hold, and are in compliance in all
material respects with, all Permits, and with all
applicable federal, state and local laws, regulations,
orders, requirements, and common law relating to
pollution or protection of the environment, health, or
safety (including, without limitation, ambient air,
surface water, groundwater, land, or surface or
subsurface strata) including, without limitation, all
federal, state or local laws, regulations, orders,
requirements, and common law relating to emissions,
discharges, releases or threatened releases of petroleum
and petroleum-derived products, pollutants,
contaminants, chemicals,
25
or industrial, toxic or hazardous substances or wastes
(collectively, "HAZARDOUS SUBSTANCES"), and all federal,
state or local laws, regulations, orders, requirements,
and common law relating to the manufacture, processing,
distribution, use, treatment, storage, disposal,
transport or handling of any Hazardous Substances
including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act,
42 U.S.C. Section 9601 et seq. ("CERCLA"), the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901
et seq., the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801 et seq., and the rules and
regulations promulgated thereunder, all as amended and
supplemented from time to time, and together with any
successors thereto (all the foregoing collectively,
"ENVIRONMENTAL LAWS"), and, to the Shareholders'
Knowledge, there are no circumstances that will prevent
such compliance in the future.
(ii) Neither Executive nor any of its Subsidiaries has
received any written request for information, or has
been notified that it is a potentially responsible
party, under the CERCLA, or any similar state law with
respect to any on-site or offsite location.
(iii) No notice, notification, demand, request for
information, citation, summons, complaint or order has
been issued, no complaint has been filed, no penalty has
been assessed, no claim has been made, and no
investigation or review (collectively, "ENVIRONMENTAL
NOTICES") is pending or, to the Shareholders' Knowledge,
threatened by any Governmental Entity or other Person
with respect to any (1) alleged violation by Executive
or any of its Subsidiaries of any Environmental Law or
liability thereunder or (2) alleged failure by Executive
or any of its Subsidiaries to have any required Permit.
(iv) Other than those listed in Schedule 3.22, to the
Knowledge of the Shareholders, there have been no
discharges, emissions, spilling, leaking, pouring,
emptying, or other releases of Hazardous Substances
which are or were reportable by Executive or its
Subsidiaries under any Environmental Law.
(b) Except as set forth in Schedule 3.22, there has been no
investigation, study, audit, test, review or other analysis (including any Phase
I environmental assessments) conducted by, for, or provided to Executive or its
Subsidiaries in relation to any real property or the Business.
(c) Neither Executive nor any of its Subsidiaries is subject to
any judgment, decree, order, or consent agreement relating to compliance with
any Environmental Law, or the cleanup of Hazardous Substances under any
Environmental Law.
26
3.23 Permits.
(a) Executive and each of its Subsidiaries has obtained and holds
in full force, and Schedule 3.23 sets forth a complete and accurate list of, all
licenses, permits, certificates of authority, authorizations, approvals,
registrations, franchises, rights, orders, qualifications and similar rights or
approvals granted or issued by any governmental or regulatory authority relating
to the Business of Executive or any of its Subsidiaries (each, a "PERMIT" and
collectively, "PERMITS") that are necessary or advisable for the operation of
the Business or of any real property or equipment used therein. Executive, its
Subsidiaries and each of their employees, independent contractors or agents is
in compliance with the material terms of any such Permit.
(b) Neither Executive nor any of its Subsidiaries (1) hold any
Permit issued by the FAA or by the U.S. Department of Transportation or (2) own
or lease aircraft or (3) operate aircraft for a third party under a management
agreement or other similar arrangement.
(c) Neither Executive nor any of its Subsidiaries provide aircraft
repair or maintenance services to third parties or operate aircraft for
compensation or hire and the failure to provide aircraft repair or maintenance
service to third parties or to operate aircraft for compensation or hire does
not contravene any provision in any contract, license, permit, order, lease, or
agreement with any party and does not form the basis for termination of any
contract, license, permit, lease or agreement.
(d) Except as set forth in Schedule 3.23, neither the execution,
delivery and performance of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) result in or give to any person any
right of termination, non-renewal, cancellation, acceleration or modification in
or with respect to any such Permit, (ii) result in or give to any Person any
additional rights or entitlement to increased, additional, accelerated or
guaranteed payments under any such Permit or (iii) result in the creation or
imposition of any adverse claim upon Executive, any of its Subsidiaries or any
of their respective assets under the terms of any Permit.
(e) Except as set forth in Schedule 3.23, there is no order,
notice, rule, or directive, outstanding or, to the Knowledge of Shareholders,
any proposed order, rule notice or directive, issued by any governmental
authority against Executive or any of its Subsidiaries, nor is there now
pending, or to the Knowledge of the Shareholders, threatened, any legal or
regulatory proceeding, which could adversely affect the business or assets of
Executive or any of its Subsidiaries, or any Permit required to be obtained and
maintained by Executive or any of its Subsidiaries.
3.24 Transactions with Affiliates. Except as set forth in Schedule 3.24
since January 1, 2000 there have been no transactions, contracts, understanding
or agreements of any kind between Executive or any of its Subsidiaries and any
of their respective Affiliates (as defined below) which require disclosure in
audited financial statements prepared in accordance with GAAP and were not
disclosed. For purposes of this Agreement, "AFFILIATE" shall mean, with respect
to any Person, a Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
first mentioned Person.
27
3.25 Intellectual Property. Schedule 3.25 contains an accurate and
complete list of (a) all patents, patent applications, registered trademarks and
service marks, trademark and service xxxx applications, registered copyrights
and copyright registration applications owned or filed by Executive or any of
its Subsidiaries and (b) all material licenses and other agreements relating to
technology, know-how, software or processes used in or otherwise necessary to
the Business of Executive or any of its Subsidiaries, whether proprietary to
Executive or any of its Subsidiaries or licenses or otherwise authorized to use
by others (the items set forth in clauses (a) and (b) above are collectively
referred to herein as the "INTELLECTUAL PROPERTY"). Except as set forth in
Schedule 3.25, the patents, trademarks and the copyrights that constitute
Intellectual Property are valid, subsisting and enforceable in accordance with
their terms and conditions (subject to (i) applicable bankruptcy, insolvency,
fraudulent transfer and conveyance, moratorium, reorganization, receivership and
similar laws relating to or affecting the enforcement of the rights and remedies
of creditors generally and (ii) principles of equity (regardless of whether
considered and applied in a proceeding in equity or at law)), and the patents,
registered trademarks and services marks, and registered copyrights are duly
recorded in the name of Executive or its Subsidiaries. Except as set forth in
Schedule 3.25, no claims have been asserted by any entity or person with respect
to challenging the ownership, validity, enforceability or use of the
Intellectual Property, nor to the Shareholders' Knowledge, is there any valid
grounds for any such bona fide claims. The use or other exploitation of such
Intellectual Property by Executive and its Subsidiaries do not infringe the
rights of any other entity or person. Schedule 3.25 sets forth a true and
complete list of all license agreements between any of Executive or any of its
Subsidiaries and third-parties with respect to the use of the Intellectual
Property. To the extent Executive or any of its Subsidiaries uses any
Intellectual Property owned by a third party, Executive or Subsidiary has a
license with such third party for the use of such Intellectual Property and, to
the Knowledge of the Shareholders, is not in default under any such license.
3.26 Absence of Certain Changes or Events. From December 31, 2003 to the
date hereof, except as disclosed in Schedule 3.26 or in the Financial
Statements, or as otherwise expressly consented to in writing by Purchaser,
Executive's and its Subsidiaries' Business have been operated only in the
ordinary course of business (except as expressly contemplated by this
Agreement), and there has not been any:
(a) Change in the financial condition, assets, liabilities,
prospects, or net worth of Executive or its Subsidiaries, except changes in the
ordinary course of business, none of which, individually or in the aggregate has
been or is reasonably likely to be materially adverse to Executive or its
Subsidiaries;
(b) Sale, assignment or transfer, other than in the ordinary
course of business and consistent with past practice, of any assets of Executive
or any of its Subsidiaries;
(c) Acquisition by merger, consolidation with, purchase of
substantially all of the assets or capital stock of, or any other acquisition of
any material assets or business of, any corporation, partnership, association or
other business organization or division thereof;
(d) Change in accounting methods or practices by Executive or any
of its Subsidiaries, except as required by GAAP;
28
(e) Entry into, or termination, amendment or modification of, any
material contract, agreement, commitment, transaction, license, permit or other
instrument (including, without limitation, any borrowing, capital expenditure,
capital contribution or capital financing).
(f) Increase in salary, bonuses or other compensation payable or
to become payable to, or any advance or loan to any officer or employee of
Executive or its Subsidiaries, except in the ordinary course of business,
consistent with past practice, and neither Executive nor its Subsidiaries have
(i) entered into any Benefit Plan or Benefit Agreement, employment, severance,
or other agreements relating to compensation or fringe benefits or (ii) adopted
or changed any existing Benefit Plan or Benefit Arrangement;
(g) Casualty involving material assets of Executive's or any of
its Subsidiaries' Business, not covered by insurance, in excess of $15,000;
(h) Strike, walkout, labor trouble or any other new or continued
event, development or condition of any character which has or could materially
adversely affect the Business, properties, assets of Executive or its
Subsidiaries;
(i) Declaration, setting aside or payment of a dividend or other
distribution in respect of any of the capital stock of Executive or its
Subsidiaries, or any direct or indirect redemption, purchase or other
acquisition of any capital stock of Executive or its Subsidiaries or any rights
to purchase such capital stock or securities convertible into or exchangeable
for such capital stock;
(j) Cancellation or waiver of any right material to the operation
of Executive's or its Subsidiaries' Business or any cancellation or waiver of
any debts or claims of substantial value or any cancellation or waiver of any
debts or claims against any officer, director or employee of Executive or its
Subsidiaries;
(k) Payment, discharge or satisfaction of any liability or
obligation (whether accrued, absolute, contingent or otherwise) by Executive or
any of its Subsidiaries, other than the payment, discharge or satisfaction, in
the ordinary course of business, of liabilities or obligations shown or
reflected on the Financial Statements or incurred in the ordinary course of
business since the Interim Balance Sheet Date;
(l) Adverse change, or, to the Knowledge of the Shareholders,
threat of any adverse change, in Executive's or any of its Subsidiaries'
relations with, or any loss, or, to the Knowledge of the Shareholders, threat of
loss of, Executive's or any of its Subsidiaries' landlords, suppliers, clients
or customers, including any party to the FBO Leases or any Governmental Entity,
which, individually or in the aggregate, has been or will be materially adverse
to Executive or any of its Subsidiaries as a whole;
(m) Write-offs as uncollectible of any notes or accounts
receivable of Executive or its Subsidiaries or write-downs of the value of any
asset or inventory by Executive other than in immaterial amounts or in the
ordinary course of business consistent with past practice and at a rate no
greater than the during the six months ended on the Interim Balance Sheet Date;
29
(n) Creation, incurrence, assumption or guarantee by Executive or
its Subsidiaries of any obligations or liabilities (whether absolute, accrued,
contingent or otherwise and whether due or to become due), except in the
ordinary course of business, or any creation, incurrence, assumption or
guarantee by Executive or its Subsidiaries of any indebtedness for borrowed
money;
(o) Disposition of or failure to keep in effect any rights in, or
for the use of any patent, trademark, service xxxx, trade name or copyright, or
any disclosure to any person not an employee or other disposal of any trade
secret, process or know-how;
(p) Transaction, agreement or event (i) outside the ordinary
course of business for Executive's or any of its Subsidiaries' Business, or (ii)
inconsistent with past practice and which could have a material adverse affect
on Executive, any of its Subsidiaries or the Business; or
(q) Agreement by Executive to do any of the foregoing.
3.27 Brokerage. Executive has not made any agreement or taken any other
action which might cause anyone to become entitled to a broker's fee or
commission as a result of the transactions contemplated hereby.
3.28 Fuel Flowage. True and correct copies of Executive's and its
Subsidiaries' fuel flowage and gross receipt statements as filed with the
relevant Airport authorities for the period from January 1, 2003 through
December 31, 2003, reflecting the gallons of fuel sold by Executive and its
Subsidiaries, and revenues on which Executive and its Subsidiaries paid a
percentage fee, during such period are attached to Schedule 3.28. Such
statements accurately reflect the gallons of fuel sold and revenues earned by
Executive and its Subsidiaries during such period and were prepared in
accordance with Executive's books and records. Executive's and its Subsidiaries'
fuel sales records for each customer who purchased fuel during the period
January 1, 2004 through March 31, 2004 are also attached to Schedule 3.28. Such
fuel sales records accurately reflect the actual number of gallons sold to each
customer of Executive and its Subsidiaries during such period and the actual
prices charged by Executive and its Subsidiaries to each customer during such
period.
ARTICLE 4
REPRESENTATION AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Executive as follows:
4.1 Organization. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
4.2 Authorization. Purchaser has the full corporate power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery by Purchaser of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Purchaser. This Agreement has
been duly executed and delivered by the Purchaser and constitutes a valid, legal
and binding obligation of Purchaser, enforceable in accordance with its terms
and
30
conditions, subject to (i) applicable bankruptcy, insolvency, fraudulent
transfer and conveyance, moratorium reorganization, receivership and similar
laws relating to or affecting the enforcement of the rights and remedies of
creditors generally and (ii) principles of equity (regardless of whether
considered and applied in a proceeding in equity or at law).
4.3 No Violations. The execution, delivery and performance of this
Agreement by Purchaser, and the consummation by Purchaser of the transactions
contemplated hereby, will not (a) conflict with or result in any breach of any
provision of the Certificate of Incorporation or Bylaws of Purchaser, (b) result
in a violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of amendment, termination,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which Purchaser is a party or by which it is
bound, or (c) assuming compliance with the HSR Act, violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Purchaser, or its
properties or assets.
4.4 Brokerage. Purchaser has not made any agreement or taken any other
action which might cause anyone to become entitled to a broker's fee or
commission from Executive or the Shareholders as a result of the transactions
contemplated hereunder.
ARTICLE 5
OTHER OBLIGATIONS
5.1 Conduct of Business Pending Closing. From and after the date hereof
and pending Closing, and unless Purchaser shall otherwise consent or agree in
writing, Executive and the Shareholders covenant and agree that:
(a) Ordinary Course. The Business of Executive and its
Subsidiaries will be conducted only in the ordinary course and consistent with
past practice, including billing and collection practices and payment of
accounts payable.
(b) Preservation of Business. Executive and the Shareholders will
use commercial best efforts to preserve the business organization of Executive
and its Subsidiaries intact, to keep available the services of the present
officers and employees of Executive and its Subsidiaries, and to preserve the
goodwill of the suppliers, customers and others having business relations with
Executive and its Subsidiaries.
(c) Material Transactions. Executive will not, and will not permit
its Subsidiaries to:
(i) amend its certificate of incorporation, bylaws, or other
organizational documents;
(ii) change its authorized or issued capital stock, or other
equity interest or issue any rights or options to
acquire shares of its capital stock or other equity
interest;
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(iii) enter into any contract or commitment the performance
of which may extend beyond the Closing, except those
made in the ordinary course of business, the terms of
which are consistent with past practice and
reasonable in light of current conditions;
(iv) enter into any employment or consulting contract or
arrangement with any person which is not terminable
at will, without penalty or continuing obligation;
(v) incur, create, assume or suffer to exist any
mortgage, pledge, lien, restriction, encumbrance,
tenancy, encroachment, covenant, condition,
right-of-way, easement, claim, security interest,
charge or other matter affecting title on any of its
assets or other property, except Permitted Liens;
(vi) make, change or revoke any Tax election or make any
agreement or settlement with any Taxing Authority;
(vii) incur any debt or other obligation for money
borrowed;
(viii) loan, advance funds or make an investment in or
capital contribution to any person other than
Executive;
(ix) except as expressly contemplated in this Agreement,
take any action or permit to occur any event
described in Section 3.26;
(x) take any action or omit to take any action which will
result in a violation of any applicable law or cause
a breach of any agreements, contracts or commitments;
or
(xi) enter into any agreement, or otherwise commit, to do
any of the foregoing.
It is expressly understood, however, that Executive, at its discretion, may
elect at any time prior to the Closing to resolve its pending claim for
indemnification under the indemnification insurance policy obtained in
connection with the acquisition of Atlantic Aviation Corporation by Executive.
(d) Interim Financial Statements. Executive will deliver to
Purchaser as soon as practicable after the end of each month and the end of each
calendar quarter prior to the Closing Date, commencing with the month ended
March 31, 2004, an unaudited consolidated balance sheet as of such date and
related unaudited consolidated statements of income and cash flows for the
periods then ended for Executive and its Subsidiaries (the "INTERIM FINANCIAL
STATEMENTS"), which Interim Financial Statements shall fairly present Executive
and its Subsidiaries' financial condition, results of operations and cash flows
for the periods then ended in accordance with GAAP. Notwithstanding anything to
the contrary contained in this Agreement or the Confidentiality Agreement, the
Purchaser (and its permitted assigns) shall have the right to use and disclose
the Interim Financial Statements and related documents, together with such
information about Executive and its Subsidiaries as Purchaser (or its permitted
assign)
32
reasonably believes is required or advisable to be included therewith, in
connection with any debt or equity financing to be done by the Purchaser or any
of its Affiliates.
(e) Maintenance of Employees. Executive will use, and cause each
of its Subsidiaries to use, commercially reasonable efforts to retain all
existing employees of Executive and its Subsidiaries and will promptly notify
Purchaser of the termination of employment of any existing employee or the
receipt by Executive or any of its Subsidiaries of notice of termination of
employment of any existing employee.
(f) Insurance. Executive and its Subsidiaries shall maintain and
shall cause its Subsidiaries to maintain in full force and effect the policies
of insurance listed in Schedule 3.16, subject only to variations required by the
ordinary operations of the Business, or else will obtain, prior to the lapse of
any such policy, substantially similar coverage with insurers of recognized
standing and approved in writing by the Purchaser which approval shall not be
unreasonably withheld or delayed. Executive shall promptly advise Purchaser in
writing of any change of insurer or type of coverage in respect of the policies
listed in Schedule 3.16.
5.2 Access, Information and Documents. Executive and its Subsidiaries
will give to Purchaser and to Purchaser's counsel, accountants and other
representatives reasonable access during normal business hours to all of
Executive's and its Subsidiaries' properties, books, Tax Returns, contracts,
commitments, records, officers, personnel, accountants, customers and suppliers
and will furnish to Purchaser all such documents and copies of documents
(certified to be true copies if requested) and all information with respect to
the affairs of Executive and its Subsidiaries as Purchaser may reasonably
request. No investigation or receipt of information by Purchaser pursuant to
this Agreement shall diminish or obviate any of the representations, warranties,
covenants or agreements of Executive under this Agreement or the conditions to
the obligations of Purchaser under this Agreement.
5.3 Acquisition Proposals. From the date hereof through the Closing, the
Shareholders shall not sell or otherwise transfer any of the Shares to any other
person, and neither Executive nor its Subsidiaries, or any of their Affiliates,
officers, directors, employees, representatives or agents, shall, directly or
indirectly, solicit, initiate or participate in any way in discussions or
negotiations with, or provide any information or assistance to, any person or
group of persons (other than Purchaser) concerning any acquisition of an equity
interest in, or in a merger, consolidation, liquidation, dissolution,
disposition of assets (other than in the ordinary course of business and as
specifically permitted pursuant to this Agreement) of Executive or any of its
Subsidiaries, or any disposition of any of the Shares (other than pursuant to
the transactions contemplated by this Agreement), or assist or participate in,
facilitate or encourage any effort or attempt by any other person to do or seek
to do any of the foregoing.
5.4 HSR Filing; Further Assurances.
(a) Each of the parties hereto shall use commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate the transactions
contemplated hereby as soon as practicable. Without limiting the foregoing,
Executive and Purchaser will as promptly as practicable, but in no event later
than ten (10) days following the execution and delivery of this Agreement, file
33
with the Federal Trade Commission and the Department of Justice the notification
and report form, if any, required for the transactions contemplated hereby
pursuant to the HSR Act. Any such notification and report will be in substantial
compliance with the requirements of the HSR Act. Executive and Purchaser shall
furnish to the other such necessary information and reasonable assistance as the
other may request in connection with its preparation of any filing or submission
which is necessary under the HSR Act. Executive and Purchaser shall keep each
other apprised of the status of any communications with, and inquiries or
requests for additional information from, the Federal Trade Commission and
Department of Justice. Purchaser shall be responsible for the payment of all
filing or other fees applicable to the Notification and Report Form filed
pursuant to the HSR Act.
(b) Each party shall promptly give the other party written notice
of the existence or occurrence of any condition which would make any
representation or warranty herein contained of either party untrue as of the
date of this Agreement or any subsequent date as if made on and as of such
subsequent date (except for those representations and warranties which address
matters only as of a particular date) or which might reasonably be expected to
prevent the consummation of the transactions contemplated hereby.
(c) From and after the date hereof, Executive covenants and agrees
to cooperate with the Purchaser and shall use its commercially reasonable
efforts to take, or cause to be taken, all actions and to do or cause to be
done, all things necessary or desirable, including the making of any applicable
disclosures, under applicable law and regulation as the Purchaser may reasonably
request to take or do in connection with any restructuring or equity or debt
financing done by the Purchaser or any of its Affiliates; provided, however,
that Executive shall not be obligated to incur or pay any costs or expenses in
connection with providing such cooperation or taking or doing any such actions
or things.
ARTICLE 6
CONDITIONS TO CLOSING; TERMINATION
6.1 Conditions Precedent to Obligations of Purchaser. The obligations of
Purchaser to proceed with the Closing under this Agreement are subject to the
fulfillment prior to or at Closing of the following conditions (any one or more
of which may be waived in whole or in part by Purchaser in Purchaser's sole
discretion):
(a) Bringdown of Representations and Warranties. The
representations and warranties of the Shareholders contained in this Agreement
shall be true and correct in all material respects on and as of the time of
Closing, with the same force and effect as though such representations and
warranties had been made on, as of and with reference to such time, and
Purchaser shall have received a certificate to such effect as to the
representations and warranties contained in Article 3 of this Agreement signed
by an officer of Executive and the Shareholder Representative in form reasonably
acceptable to Purchaser.
(b) Performance and Compliance. The Shareholders and Executive
shall have performed, in all material respects, all of the covenants and
complied, with all of the provisions required by this Agreement to be performed
or complied with by them on or before the Closing,
34
and Purchaser shall have received a certificate to such effect signed by an
officer of Executive and the Shareholder Representative in form reasonably
acceptable to Purchaser.
(c) Opinion of Counsel. Purchaser shall have received from counsel
for the Shareholders and Executive an opinion dated the date of the Closing
substantially in the form set forth in Exhibit D.
(d) Satisfactory Instruments. All instruments and documents
reasonably required on the part of the Shareholders or Executive to effectuate
and consummate the transactions contemplated hereby shall be delivered to
Purchaser and shall be in form and substance reasonably satisfactory to
Purchaser and its counsel. Purchaser shall have received the original
certificates representing all of the Shares and the Canterbury Warrant, duly
endorsed in blank or with duly executed stock powers attached, and certificates
of good standing of Executive and each of its Subsidiaries, issued not earlier
than ten (10) days prior to the Closing Date, by the appropriate Governmental
Entity for the jurisdiction of its incorporation or formation.
(e) Required Consents. All required consents and approvals of
third parties, including, without limitation, all governmental departments,
agencies, authorities and commissions to the transactions contemplated hereby
shall have been obtained and no such consent or approval shall have been
conditioned upon the modification in any material respect, cancellation or
termination of any material lease, commitment, agreement, easement, right,
license, permit or authorization of Executive or any of its Subsidiaries or
shall impose on Purchaser, Executive or any of its Subsidiaries any material
condition, provision or requirement not presently imposed upon any of them or
any condition that would be materially more restrictive after the Closing than
the conditions presently imposed on Executive or any of its Subsidiaries, as the
case may be.
(f) HSR. All waiting periods applicable under the HSR Act shall
have expired and no action shall have been taken or threatened by the Federal
Trade Commission or the Department of Justice seeking to prohibit the
transactions contemplated hereby.
(g) Litigation. No order of any court or administrative agency
shall be in effect which restrains or prohibits the transactions contemplated
hereby or which would limit or adversely affect Purchaser's ownership or control
of Executive, any or its Subsidiaries or the Business of Executive or any of its
Subsidiaries, and there shall not have been threatened, nor shall there be
pending, any action or proceeding by or before any court or governmental agency
or other regulatory or administrative agency or commission: (i) challenging any
of the transactions contemplated by this Agreement or seeking monetary relief by
reason of the consummation of such transactions; (ii) by any present or former
owner of any capital stock or equity interest in Executive of any of its
Subsidiaries (whether through a derivative action or otherwise) against
Executive or any of its Subsidiaries or any officer, director or shareholder of
Executive or any of its Subsidiaries in his or her capacity as such; or (iii)
which could reasonably be expected to have a material adverse effect on the
business or condition (financial or otherwise) of Executive or any of its
Subsidiaries.
35
(h) No Material Adverse Change. No material adverse change in its
business, operations, properties, assets, income, cash flow, liabilities,
working capital or condition (financial or otherwise) of Executive and its
Subsidiaries, as a whole, shall have occurred since December 31, 2003.
(i) Stock Options. As of the Closing, all of the Options and
Warrants (other than the Canterbury Warrant) shall have been cancelled pursuant
to Cancellation Agreements for the consideration specified in the Cancellation
Agreements. Simultaneously with the Closing, the holders of such Options and
Warrants shall have paid to Executive the amount of all required withholding
Taxes due as a result of the cancellation of such Options and Warrants.
(j) Convertible Notes. On or before ten (10) days after date of
this Agreement, either (i) Executive and the holder of that certain Subordinated
Convertible Note dated November 7, 2000 in the original principal amount of
$100,000 payable to Xxxxx X. Xxxxxxxx and that certain Subordinated Convertible
Note dated November 7, 2000 in the original principal amount of $250,000 payable
to Xxxxxxx X. Xxxxxx (collectively, the "CONVERTIBLE NOTES") have entered into
irrevocable agreements for the payment in full of the Convertible Notes prior to
the Effective Time or (ii) the holders of the Convertible Notes have converted
the Convertible Notes in full and executed an agreement by which the holder has
become a party to this Agreement as a Shareholder.
(k) Affiliate Loans. All loans by Executive or any of its
Subsidiaries to any Affiliate, if any, shall have been repaid in full, and there
shall be no outstanding debts or obligations due from any Affiliate of
Executive, Shareholder or holder of Options or Warrants to Executive or any of
its Subsidiaries.
(l) Releases. Each of the Shareholders shall have executed and
delivered to Purchaser a release in substantially the form of Exhibit E to this
Agreement.
(m) Estoppel Letters. Purchaser shall have received duly executed
estoppel letters from the third parties to the FBO Leases addressed to
Purchaser, dated not earlier than thirty (30) days prior to the Closing Date,
stating the following: (i) the copy of the contract with such third party
attached to the estoppel letter is a true, correct and complete copy of such FBO
Lease and represents the entire agreement between the third party and Executive
or its Subsidiary, as the case may be, (ii) to the knowledge of such third party
neither the third party nor Executive or its Subsidiary, as the case may be, is
in breach or default under such FBO Lease, and, to the knowledge of such third
party, no event has occurred which, with notice or the passage of time, or both,
would constitute a breach or default, or permit termination or modification of
such FBO Lease, (iii) the third party has not repudiated any provision of such
FBO Lease, (iv) to the third party's knowledge, there are no disputes or
forbearance programs in effect as to such FBO Lease, (v) if listed in Schedule
6.1(m) or if otherwise required, the consent of the third party to the
transaction contemplated by this Agreement, including any subsequent assignment
of the capital stock of Executive to any Affiliate of Purchaser, and (vi) the
third party's current notice address.
(n) Resignations. Purchaser shall have received the written
resignations, effective as of the Closing Date, of such of the directors and
officers of Executive and its
36
Subsidiaries as are designated by Purchaser to resign, which resignations shall
include releases of liability for the benefit of Executive, its Subsidiaries,
and their respective successors and assigns.
(o) Tax Certificates. Purchaser shall have received: (i) a
properly executed Foreign Investment and Real Property Tax Act of 1980
Notification Letter, which states that Shares do not constitute "United States
real property interests" under Section 897(c) of the Code, for purposes of
satisfying Purchaser's obligations under Treasury Regulation Section
1.1445-2(c)(3) and a form of notice to the IRS in accordance with the
requirements of Treasury Regulation Section 1.897-2(h)(2), along with written
authorization for Purchaser to deliver such notice to the IRS on behalf of
Executive; and (ii) all clearance certificates or similar types of documents
which may be required by any Taxing Authority in order to relieve the Purchaser
of any obligation to withhold any portion of the Purchase Price or any
transferee liability.
(p) Additional Cancellation Agreements. On or before ten (10) days
after the date of this Agreement, the Shareholders shall have delivered to the
Purchaser Cancellation Agreements in the form of Exhibit C signed by each holder
of a stock option whose name was not marked with an asterisk in Schedule 3.5.
6.2 Conditions Precedent to the Obligations of the Shareholders. The
obligations of the Shareholders to proceed with the Closing hereunder are
subject to the fulfillment prior to or at Closing of the following conditions
(any one or more of which may be waived in whole or in part by the Shareholder
Representative in its sole discretion):
(a) Bringdown of Representations and Warranties. The
representations and warranties of Purchaser contained in this Agreement shall be
true and correct in all material respects on and as of the time of Closing, with
the same force and effect as though such representations and warranties had been
made on, as of and with reference to such time and Purchaser shall have
delivered to the Shareholders a certificate to such effect.
(b) Performance and Compliance. Purchaser shall have performed all
of the covenants and complied, in all material respects, with all the provisions
required by this Agreement to be performed or complied with by it on or before
the Closing, and Purchaser shall have delivered to the Shareholders a
certificate to such effect.
(c) Opinion of Counsel. The Shareholders shall have received from
counsel for Purchaser an opinion dated the date of Closing substantially in the
form set forth in Exhibit F.
(d) Litigation. No order of any court or administrative agency
shall be in effect which restrains or prohibits the transactions contemplated
hereby, and there shall not have been threatened, nor shall there be pending,
any action or proceeding by or before any court or governmental agency or other
regulatory or administrative agency or commission challenging any of the
transactions contemplated by this Agreement or seeking monetary relief by reason
of the consummation of such transactions.
(e) Satisfactory Instruments. All instruments and documents
required on the part of Purchaser to effectuate and consummate the transactions
contemplated hereby shall be delivered to the Shareholders.
37
(f) HSR. All waiting periods applicable under the HSR Act shall
have expired and no action shall have been taken or threatened by the Federal
Trade Commission or the Department of Justice seeking to prohibit the
transactions contemplated hereby.
6.3 Termination.
(a) When Agreement May Be Terminated. This Agreement may be
terminated at any time prior to Closing:
(i) By mutual consent of Purchaser and the Shareholder
Representative;
(ii) By Purchaser if there has been a material
misrepresentation by the Shareholders or a material
breach by the Shareholders of any of their warranties or
covenants, and such breach shall not have been cured
within 10 days after notice thereof has been delivered
by Purchaser to the Shareholder Representative (or in
any event prior to the date of Closing), or if any of
the conditions specified in Section 6.1 hereof shall not
have been fulfilled by the time required and shall not
have been waived by Purchaser;
(iii) By the Shareholder Representative, if there has been a
material misrepresentation by Purchaser, or a material
breach by Purchaser of any of its warranties or
covenants, and such breach shall not have been cured
within 10 days after notice thereof has been delivered
by the Shareholder Representative to Purchaser (or in
any event prior to the date of Closing), or if any of
the conditions specified in Section 6.2 hereof shall not
have been fulfilled by the time required and shall not
have been waived by the Shareholder Representative;
(iv) By Purchaser or the Shareholder Representative if
Closing shall not have occurred prior to August 15,
2004; provided, however, that Purchaser or the
Shareholder Representative may terminate this Agreement
pursuant to this subparagraph (iv) only if Closing shall
not have occurred by such date for a reason other than a
failure by such party to satisfy the conditions to
Closing of the other party set forth in Sections 6.1 or
6.2 hereof, as applicable that are within the control of
such party.
(b) Effect of Termination. In the event of termination of this
Agreement by either the Shareholder Representative or Purchaser, as provided
above, this Agreement shall forthwith terminate; provided, however, that the
obligations of the parties set forth in Sections 7.1 and 8.5 hereof shall
survive such termination; and, provided further, that no such termination will
relieve Purchaser, Executive or the Shareholders from liability for any breach
of any representation or warranty or the failure to perform any covenant or
agreement set forth in this Agreement prior to such termination, and, in the
event of such breach or failure to perform, the
38
parties hereto shall be entitled to exercise any and all remedies available
under law or equity in accordance with this Agreement, subject to the limitation
that, in the event such breach or failure is not the result of a knowingly or
intentional breach or failure by Executive or the Shareholders the maximum
amount of damages that Purchaser may recover as a result of any such breach by
the Shareholders or Executive shall be a total of not more than $2,000,000 and
the Purchaser shall only have recourse against Executive with respect to any
such Damages.
ARTICLE 7
CERTAIN ADDITIONAL COVENANTS
7.1 Costs, Expenses. Except as may be specified elsewhere in this
Agreement, Purchaser shall pay all costs and expenses, including legal fees and
the fees of any broker, relating to or resulting from Purchaser's negotiation,
performance of and compliance with this Agreement by Purchaser. The Shareholders
shall pay all costs and expenses, including legal fees and the fees of any
broker relating to or resulting from the negotiations, performance of, and
compliance with this Agreement by Executive and the Shareholders but only to the
extent that such cost and expense either has not been paid by Executive prior to
the Effective Time or is not included in the calculation of Net Working Capital
pursuant to Section 1.7 of this Agreement. For the purposes of this Section 7.1,
the consulting fee listed in Schedule 3.18(e) shall constitute an expense of the
Shareholders relating to this Agreement.
7.2 Public Announcement. No party hereto shall make or issue, or cause
to be made or issued, any public announcement or written statement concerning
this Agreement or the transactions contemplated hereby without the prior written
consent of the other party, except to the extent required by law or in
accordance with the rules, regulations and orders of any Governmental Entity.
7.3 Mutual Covenants. The parties mutually covenant from the date of
this Agreement to the Closing Date:
(a) to cooperate with each other in determining whether filings
are required to be made or consents required to be obtained in any jurisdiction
in connection with the consummation of the transactions contemplated by this
Agreement and in making or causing to be made any such filings promptly and in
seeking to obtain timely any such consents;
(b) to use all reasonable efforts in good faith to obtain promptly
the satisfaction of the conditions to the Closing of the transactions
contemplated herein, including, without limitation, the obtaining of all
required consents and approvals;
(c) to furnish to the other and to the other's counsel all such
information as may be reasonably required in order to effectuate the foregoing
actions; and
(d) to advise the other party promptly if such party determines
that any condition precedent to its obligations hereunder will not be satisfied
in a timely manner.
7.4 Tax Matters.
39
(a) Purchaser shall be responsible for preparing or causing to be
prepared Tax Returns for Executive and its Subsidiaries that are required to be
filed after the Effective Time.
(b) Notwithstanding any other provision of this Agreement, the
Shareholders shall not be considered to be in breach of any of their
representations or warranties under this Agreement if and to the extent any such
representation or warranty is rendered inaccurate as a result of, and the
Shareholders shall not be obligated to provide indemnification with respect to,
any Taxes or other Damages arising from, either:
(i) the filing of Tax Returns after the Effective Time
prepared in a manner that is not consistent with past
practice of Executive and its Subsidiaries (to the
extent applicable), except to the extent that treating a
specific item in a manner consistent with past practice
would not have sufficient legal support to avoid the
imposition of penalties (assuming that such treatment
were not specifically disclosed or identified in such
Tax Return in a Treasury Form 8275 or similar disclosure
statement);
(ii) the filing, after the Closing, of an amended Tax Return
amending a Tax Return filed by or with respect to
Executive or any of its Subsidiaries prior to the
Effective Time without the consent of the Shareholder
Representative, such consent not to be unreasonably
withheld, or unless such filing is required by
applicable law, or is an appropriate correlative
adjustment to a final determination of a Taxing
Authority relating to another taxable period; or
(iii) any election under Section 338 of the Code (or any
comparable provision of state, local or foreign Tax law)
made with respect to the transactions contemplated by
this Agreement.
(c) In the event that the parties disagree as to (i) whether any
Tax Return has been prepared in a manner consistent with past practice, (ii)
whether preparation of any Tax Return in a manner consistent with past practice
would have insufficient legal support to avoid the imposition of penalties, or
(iii) whether applicable law requires the filing of an amended Tax Return, the
parties shall submit the matter to the Accounting Firm, which shall resolve the
dispute. The Accounting Firm shall, within forty-five (45) days after
submission, make a determination with respect to the dispute and report such
determination to the parties in writing. The determination of the Accounting
Firm shall be conclusive and binding on the parties. The fees and expenses of
the Accounting Firm shall be borne equally by Purchaser and the Shareholders.
7.5 Indemnification of Directors and Officers. Nothing contained herein
shall be deemed or construed to waive, discharge, release or limit in any
respect whatever indemnification rights (including rights to advancement of
expenses) any present or former director, officer or employee of Executive and
its Subsidiaries in office prior to the Effective Time have under the
Certificate of Incorporation and Bylaws of Executive and any such Subsidiary in
effect on the date hereof with respect to all acts or omissions by such persons
in
40
such respective capacity on or prior to the Effective Time; provided, however
that such indemnification rights shall not apply with respect to any liability
with respect to which any such person is obligated as a Shareholder to indemnify
Purchaser under Section 8.2 of this Agreement.
7.6 Shareholder Agreement. Each of the Shareholders and Executive hereby
consents to the transfer of the Shares by the other Shareholders pursuant to the
terms of this Agreement and hereby waives and releases any rights of first
refusal or comparable rights that such Shareholder or Executive may have with
respect to such transfer under that certain Shareholders Agreement, dated as of
March 14, 2000, as amended, by and between Executive and certain shareholders of
Executive.
7.7 Subsequent Transaction. In the event that, within twelve (12) months
of the Closing Date, the Purchaser enters into a binding agreement with an
unaffiliated third party that, as of the date of this Agreement, owns or
operates general aviation fixed base operations, at multiple locations in the
United States pursuant to which the Purchaser, directly or indirectly, will
sell, transfer or convey all the equity ownership interests in Executive or all
or substantially all of the assets of Executive to such unaffiliated third party
(a "SUBSEQUENT TRANSACTION"), then Purchaser shall pay to the Shareholders an
amount equal to fifty percent (50%) of the difference between the aggregate
consideration, including the assumption of any indebtedness for borrowed money,
paid to Purchaser for the Subsequent Transaction and the Purchase Price, net of
fees, costs and expenses (other than taxes), Purchaser incurs or otherwise pays
in connection with the transactions contemplated hereby and the Subsequent
Transaction. If such aggregate consideration for the Subsequent Transaction is
less than the Purchase Price, then no payment shall be due from the Purchaser to
the Shareholders. Such payment, if any, shall be made to the Disbursement Agent
upon the closing of the Subsequent Transaction. For purposes of this Agreement,
any third party that is managed by an entity that is owned or controlled,
directly or indirectly, by Macquarie Bank Limited shall be deemed affiliated
with Purchaser.
7.8 Updating of Disclosure Schedules. The Shareholders shall notify
Purchaser of any changes, additions, or events which cause any material change
in or addition to the Schedules promptly after the Shareholders become aware of
the same by delivery of appropriate updates to all such Schedules to Purchaser.
No notification of a change or addition to a Schedule made pursuant to this
Section 7.8 shall be deemed to cure any breach of any representation or warranty
resulting from such change or addition unless Purchaser specifically agrees
thereto in writing or consummates the Closing under this Agreement after receipt
of such written notification, nor shall any such notification be considered to
constitute or give rise to a waiver by Purchaser of any condition set forth in
this Agreement, unless Purchaser specifically agrees thereto in writing or
consummates the Closing under this Agreement after receipt of such written
notification.
7.9 Atlantic Indemnification Claim. In the event that the pending
indemnification claim by Executive under the indemnification insurance policy
obtained in connection with the acquisition of Atlantic Aviation Corporation is
not settled and paid prior to the Effective Time but is thereafter resolved and
a payment made to Executive as a result thereof, Purchaser shall cause Executive
to pay to the Disbursement Agent fifty percent (50%) of the amount of such
payment after deduction of all out-of-pocket expenses incurred by Executive
after the Effective Time in connection with resolving such claim.
41
7.10 Additional Covenant of Certain Shareholders. Each Shareholder that
is not a natural person covenants and agrees that, for a period of eighteen (18)
months from the Effective Time, such Shareholder shall not dissolve, liquidate
or otherwise distribute its assets without creating and maintaining a reserve
fund for satisfaction of the indemnity obligation of such Shareholder pursuant
to Section 8.2 of this Agreement in an amount equal to the maximum individual
liability of such Shareholder under Section 8.2(b)(iv) of this Agreement
(without consideration of any exception to such limitation); provided, however,
the Shareholder shall not be obligated to maintain such reserve fund, if the
Shareholder provides to Purchaser a guaranty in form satisfactory to Purchaser
of such obligation up to such dollar amount executed by a financially viable
person or entity reasonably satisfactory to Purchaser.
ARTICLE 8
SURVIVAL/INDEMNIFICATION
8.1 Nature and Survival of Representations and Agreements. The
representations, warranties, covenants and agreements of Purchaser, Shareholders
and Executive contained in this Agreement, and all statements contained in this
Agreement or any Exhibit or Schedule hereto or any certificate, financial
statement or report or other document delivered pursuant to this Agreement or in
connection with the transactions contemplated hereby, shall be deemed to
constitute representations, warranties, covenants and agreements of the
respective party delivering the same. All such representations, warranties,
covenants and agreements, including the indemnification obligations for breaches
or failures with respect thereto, other than such representations, warranties,
covenants and agreements specifically identified in the following clause, shall
survive the Closing for a period of eighteen (18) months after the Effective
Time; provided, that, (A) the representations and warranties made in Section 2.2
(Title to Stock) and Section 3.5 (Capitalization), and Section 3.21 (Taxes), (B)
any claims based on fraud, willful misconduct or intentional misrepresentation
and (C) any matter set forth in Schedule 8.2(b)(ii) shall survive the Closing
for a period of (a) sixty (60) days after the expiration of the applicable
federal or state statute of limitations, whichever is longer, or (b) the fifth
(5th) anniversary of the Closing Date, whichever is later, and that the
representations and warranties made in Section 3.18 (Employees; Employee Benefit
Plans) and Section 3.19 (Labor Matters) shall survive for a period of three (3)
years after the Effective Time. Notwithstanding the foregoing, any matter as to
which an indemnification notice (including, without limitation, a notice
relating to a potential or contingent claim) shall have been asserted during the
applicable survival period shall continue in effect with respect to such claim
until such claim shall have been finally resolved or settled.
8.2 Indemnification by Shareholders.
(a) Extent of Indemnity. Subject to the provisions of Section
8.2(b) hereof, the Shareholders hereby agree, jointly and severally, except as
noted below, to indemnify and hold harmless Purchaser, Executive and its
Subsidiaries, and their officers, directors, shareholders, and employees (the
"PURCHASER INDEMNIFIED PARTIES") from and against: any and all Damages (as
defined below) of or to any Purchaser Indemnified Parties arising out of or
resulting from (i) any misrepresentation, breach of warranty or nonfulfillment
of any agreement on the part of the Shareholders or, at or before the Effective
Time, Executive, contained in this Agreement or in any statement or certificate
furnished or to be furnished to Purchaser pursuant hereto, and (ii) any of the
matters disclosed on Schedule 8.2(b)(ii). Provided, however,
42
notwithstanding the foregoing or any other provision of this Agreement to the
contrary, such indemnity and hold harmless obligations of the Shareholders in
favor of the Purchaser Indemnified Parties based on or arising out of a breach
of the representations and warranties of each Shareholder contained in Article 2
of this Agreement shall be several but not joint.
For purposes of this Agreement, "DAMAGES" shall mean any and all losses,
liabilities, claims, demands, damages (including any governmental penalty or
punitive damages), deficiencies, diminution in value, interest, costs and
expenses and any actions, judgments, costs and expenses (including attorneys'
fees and all other reasonable expenses incurred in investigating, preparing or
defending any litigation or proceeding commenced incident to the enforcement of
this Agreement). For purposes of calculating the amount of Damages incurred by a
party arising out of or resulting from, any breach of a representation,
warranty, covenant or agreement by the other party, the references to
materiality (or other correlative terms) shall be disregarded.
(b) Limitations.
(i) Notwithstanding anything else contained herein to the
contrary, the Shareholders' obligation to indemnify
Purchaser pursuant to Section 8.2(a) shall be
Purchaser's sole and exclusive remedy for breaches of
all matters (including breaches of representations and
warranties) relating to this Agreement and shall be
limited in amount as set forth below.
(ii) Subject to the exceptions in Section 8.2(b)(vii),
Purchaser shall not be entitled to indemnification for
any Damages pursuant to Section 8.2(a) hereof unless (x)
in the case of an individual claim, the Damages relating
to such claim exceed Twenty-Five Thousand Dollars
($25,000) (for these purposes, the parties acknowledge
and agree that any claim for Damages arising from a
single event or series of related circumstances or
transactions shall be deemed to be an individual claim)
and (y) the cumulative total of Damages for all claims
asserted pursuant to Section 8.2(a) exceeds One Million
Dollars ($1,000,000) in the aggregate; and in such case
the amount of Damages that may be recovered shall only
be the amount that such Damages exceed One Million
Dollars ($1,000,000); provided, however, that such
cumulative indemnification threshold shall not be
applicable to (A) breaches of the representations or
warranties set forth in Section 3.18 (Employees;
Employee Benefit Plans) and Section 3.21 (Taxes) and (B)
any of the matters listed in Schedule 8.2(b)(ii).
(iii) Subject to the exceptions in Section 8.2(b)(vii),
subject to the separate individual limitations
applicable to each Shareholder as set forth below, and
subject to the several and not joint nature of the
representations and warranties of each Shareholder
contained in Article 2 hereof, the aggregate amount of
Damages recoverable
43
from all Shareholders shall be Twenty Million Dollars
($20,000,000).
(iv) With respect to the amount of Damages that may be
recovered against a Shareholder with respect to each
indemnification claim, (1) the amount of each such claim
against a Shareholder shall be limited to the total
amount of such Damages of such claim multiplied by a
fraction equal to the amount of the Purchase Price less
the amount of the Fund Indebtedness that is distributed
to the Shareholder for the Shares and Option Equivalent
Stock owned by such Shareholder divided by the total
aggregate Purchase Price less the amount of the Fund
Indebtedness distributed to all Shareholders for the
Shares and Option Equivalent Stock and (2), subject to
the exceptions in Section 8.2(b)(vii), the total
aggregate liability of each Shareholder for all
indemnification claims shall be limited to Twenty
Million Dollars ($20,000,000) multiplied by the same
fraction (such percentage and the maximum
indemnification liability of each Shareholder shall be
set forth on the Closing Statement);.
(v) The amount payable by the Shareholders with respect to
any Damages for which they have an indemnification
obligation under this Section 8.2 shall be reduced by
the amount of any insurance proceeds received by
Purchaser Indemnified Parties. Purchaser, Executive and
each of its Subsidiaries shall fully pursue all
potential claims against applicable policies with
respect to Damages before recovering any portion of such
Damages from the Escrow Funds or the Shareholders;
(vi) Any Damages shall be calculated and determined net of
any tax benefit to the Purchaser or Executive resulting
from the indemnifiable event or matter; and
(vii) Notwithstanding the foregoing, the Shareholders shall be
liable for all Damages incurred by the Purchaser
Indemnified Parties arising from: (A) breaches of the
representations or warranties set forth in Section 2.2
(Title to Stock), but only on several and not joint
basis, Section 3.5 (Capitalization) and Section 3.21
(Taxes), and (B) any claims based on fraud, willful
misconduct or intentional misrepresentation without
regard to the cumulative indemnification threshold set
forth in clause (y) of Section 8.2(b)(ii), or the
aggregate limitation on indemnification set forth in
Section 8.2(b)(iii); provided, however, that, in any
such case, the total amount of Damages for which a
Shareholder shall be liable shall be the amount of the
Purchase Price distributed to the Shareholder for the
Shares and Option Equivalent Stock owned by such
Shareholder, and provided, further, however that the
provisions of
44
Subsection (1) of Section 8.2(b)(iv) shall still be
applicable in each such case.
8.3 Indemnification by Purchaser.
(a) Extent of Indemnity. Purchaser hereby agrees to indemnify and
hold harmless the Shareholders and their respective shareholders, partners,
directors, officers and employees from and against any and all damages of or to
the Shareholders arising out of or resulting from any misrepresentation, breach
of warranty or nonfulfillment of any agreement on the part of Purchaser
contained in this Agreement or in any statement or certificate furnished or to
be furnished to Executive pursuant hereto or in connection with the transactions
contemplated hereby.
(b) Limitations. Notwithstanding any provisions of this Section
8.3 to the contrary, the aggregate amount of Damages recoverable by the
Shareholders under this Section 8.3 shall be Twenty Million Dollars
($20,000,000); provided, however, that the Purchaser shall be liable for all
Damages incurred by the Shareholders arising from any claims based on fraud,
willful misconduct or intentional misrepresentation of the Purchaser without
regard to such indemnification Damages limitation.
8.4 Indemnity Procedures.
(a) Third Party Claims. In case any claim, demand or action shall
be brought by any third party including, without limitation, any governmental
authority, against a party entitled to indemnity under Section 8.2 or 8.3 above,
such party shall promptly notify the other party or parties, as the case may be,
from whom indemnity is or may be sought in writing and the indemnifying party or
parties shall assume the defense thereof, including the employment of counsel.
In addition, in case a party hereto shall become aware of any facts which could
reasonably be expected to result in any such claim, demand or action, such party
shall promptly notify the other party or parties who would be obligated to
provide indemnity hereunder with respect to such claim, demand or action, and
such other party or parties shall have the right to take such action as it or
they may deem appropriate to resolve such matter. The indemnifying party shall
have fifteen (15) days from the receipt of notice of a third party claim for
which an indemnified party is seeking indemnification under Section 8.2 or 8.3
above to notify the indemnified party (i) whether or not the indemnifying party
disputes liability to the indemnified party hereunder with respect to Damages
attributable to such third party claim and (ii) whether or not the indemnifying
party desires, at its sole cost and expense, to defend against such third party
claim. In the event that the indemnifying party timely notifies the indemnified
party that the indemnifying party does not dispute its obligation to indemnify
hereunder and desires to defend the indemnified party against such third party
claim and except as hereinafter provided, the indemnifying party shall have the
right to defend by appropriate proceedings, which proceedings shall be promptly
settled or prosecuted by the indemnifying party to a final conclusion; provided
that, unless the indemnified party otherwise agrees in writing, the indemnifying
party may not settle any matter (in whole or in part) unless such settlement
includes a complete and unconditional release of the indemnified party with
respect to claims raised in such proceeding. The indemnified party or parties
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be
45
at the expense of such indemnified party or parties, unless the employment of
such counsel has been specifically authorized by the indemnifying party or
parties. If requested by the indemnifying party, the indemnified party shall
cooperate with the indemnifying party and its counsel and use its best efforts
in contesting any such claim or, if appropriate, in making any counter-claim or
cross-complaint against the party asserting the claim, provided that the
indemnifying party will reimburse the indemnified party for reasonable expenses
incurred in so cooperating upon presentation of receipts or other evidence of
such expense. The indemnifying party and its representatives shall have full and
complete access during reasonable hours to all books, records and files of the
indemnified party expressly related to the defense of any claim undertaken by
the indemnifying party pursuant to this Section 8.4(a); provided, that, the
indemnifying party shall safeguard and maintain the confidentiality of all such
books, records and files. Notwithstanding the foregoing, if at any time, in the
reasonable opinion of the indemnified party, notice of which shall be given in
writing to the indemnifying party, any such third party claim seeks relief which
could have a material adverse effect on any indemnified party, the indemnified
party shall have the right to control or assume (as the case may be) the defense
of any such claim and the amount of any judgment or settlement and the
reasonable costs and expenses of defense shall be included as part of the
indemnification obligations of the indemnifying party hereunder. If the
indemnified party should elect to exercise such right, the indemnifying party
shall have the right to participate in, but not control, the defense of such
claim at the sole cost and expense of the indemnifying party. If the
indemnifying party elects not to defend the indemnified party against such third
party claim, whether by failure of the indemnifying party to give the
indemnified party timely notice as provided above or otherwise, then the
indemnified party, without waiving any rights against the indemnifying party,
may settle or defend against any such claim in the indemnified party's sole
discretion and the indemnified party shall be entitled to recover from the
indemnifying party the amount of any settlement or judgment and, on an ongoing
basis, all costs and expenses of the indemnified party with respect thereto,
including interest from the date such costs and expenses were incurred, subject
to the provisions of Section 8.2 or 8.3, as the case may be.
(b) Other Claims. With respect to any other claim as to which a
party shall seek indemnity from the other party, such party shall promptly
notify the other party from whom indemnity is or may be sought in writing of the
claim. The notice of claim (i) shall state in reasonable detail the nature of
the alleged liability, (ii) shall state the amount of the loss that the party
claims it is entitled to be indemnified including, if appropriate, the estimate
of the potential loss, and (iii) shall further provide a particular statement
explaining the basis of the claim and of the amount or estimate of the loss. The
indemnifying party shall have the right to take such action as it may deem
appropriate to resolve such matter; provided, however, that the indemnified
party shall have the right to participate in such matter. In the event that the
parties are ultimately unable to resolve in good faith the claim or the amount
of the loss, then the parties will arbitrate the claim.
(c) The indemnified party's failure to give reasonably prompt
notice to the indemnifying party of any actual, threatened or possible claim or
demand which may give rise to a right of indemnification hereunder, shall not
relieve the indemnifying party of any liability which it may have to the
indemnified party unless, and solely to the extent that, the failure to give
such notice materially and adversely prejudiced the indemnifying party.
46
8.5 Exclusive Remedy. The indemnification obligations of the
Shareholders and Purchaser contained in this Article 8 shall, if the Closing
occurs, be the sole and exclusive remedy of the parties hereto, their
Affiliates, successors and assigns with respect to any and all claims for
Damages sustained or incurred arising out of or relating to this Agreement or
the transactions contemplated hereby.
8.6 Adjustments to Purchase Price. Amounts payable in respect of the
indemnification obligations under Sections 8.2 and 8.3 hereof shall be treated
by the Shareholders and Purchaser as adjustments to the Purchase Price to the
extent such amounts may be properly so treated for Tax Purposes.
ARTICLE 9
MISCELLANEOUS
9.1 Entire Agreement. This Agreement and the Schedules and Exhibits
hereto, each of which is hereby incorporated herein, set forth all of the
promises, covenants, agreements, conditions, undertakings, representations and
warranties between the parties hereto with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written.
9.2 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered, telefaxed (with confirmation of transmission) or, if
mailed, when mailed by United States first-class, certified or registered mail,
postage prepaid, or by any national overnight delivery service, to the other
party at the following addresses (or at such other address as shall be given in
writing by any party to the other):
(a) if to Purchaser, to:
Macquarie Investment Holdings, Inc.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Bleach, President
Fax: 000-000-0000
With a required copy to:
Xxxx Xxxxxxx LLP
0000 Xxxxxx Xxxx., Xxxxx 0000
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
47
(b) If to Executive to:
Executive Air Support, Inc.
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
With a required copy to:
Xxxxxxxxxxx & Price, LLP
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
(c) If to the Shareholder Representative to:
ABS Capital Partners, III, LLC
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxx Xxxx
Fax: 000-000-0000
with a required copy to:
Xxxxxxxxxxx & Price, LLP
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Fax: (000)-000-0000
9.3 Successors and Assigns. Purchaser may assign this Agreement in whole
or in part to any of its Subsidiaries, to any Affiliate of Purchaser or
Macquarie Bank Limited or to any person or entity which becomes a successor in
interest (by purchase of assets or stock, or by merger or otherwise) to
Purchaser, although no such assignment shall relieve Purchaser of its
obligations hereunder. Subject to the foregoing, this Agreement, and all rights
and powers granted hereby, will bind and inure to the benefit of the parties
hereto and their respective successors and assigns.
9.4 Arbitration. All disputes under this Agreement may at the election
of the Indemnified Party, be settled by arbitration in Wilmington, Delaware,
pursuant to the rules of the American Arbitration Association (the
"ASSOCIATION") before a panel of three (3) arbitrators. Arbitration may be
commenced at any time by a party hereto giving written notice to all other
parties hereto that such dispute has been referred to arbitration. The party (or
parties) initiating
48
the arbitration shall be entitled to select one arbitrator, the other party (or
parties) shall be entitled to select one arbitrator, and the two arbitrators so
selected shall select the third arbitrator; provided, that, all three of the
arbitrators shall be selected from a list of arbitrators with expertise in
commercial disputes and/or contract interpretation maintained by the
Association. Any award rendered by the arbitrators shall be conclusive and
binding upon the parties hereto; provided, however, that any such award shall be
accompanied by a written opinion of the arbitrators giving the reasons for the
award. This provision for arbitration shall be specifically enforceable by the
parties and the decision of the arbitrator in accordance herewith shall be final
and binding and there shall be no right of appeal therefrom. Each party shall
pay its own expense of arbitration and the expenses of the arbitrators shall be
equally shared; provided, however, that if in the opinion of the arbitrators any
claim made was unreasonable, the arbitrators may assess, as part of their award,
all or any part of the arbitration expenses of the other party (including
reasonable attorneys' fees) and of the arbitrators against the party raising
such unreasonable claim, defense or objection. To the extent that arbitration
may not be legally permitted hereunder or the parties to any dispute hereunder
may not at the time of such dispute mutually agree to submit such dispute to
arbitration any party may commence a civil action in the federal district courts
in Wilmington, Delaware, and the parties agree to submit to the personal
jurisdiction of such court. Each party hereto irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any proceeding brought in the federal district courts in
Wilmington, Delaware, any claim that any proceeding brought in such a court has
been brought in an inconvenient forum, and any right to which it may be entitled
on account of its place of residence or domicile.
9.5 Headings; Interpretation. The headings preceding the text of the
sections and subsections hereof are inserted solely for convenience of reference
and shall not constitute a part of this Agreement, nor shall they affect its
meaning, construction or effect. The parties agree that any rule of law or any
legal decision that would require interpretation of any claimed ambiguities in
this Agreement against the party that drafted it has no application and is
expressly waived.
9.6 Knowledge. For purposes of this Agreement, "KNOWLEDGE OF THE
SHAREHOLDERS" "SHAREHOLDERS' KNOWLEDGE" or words of similar import, shall mean
the actual knowledge of the individuals listed in Schedule 9.6 and the knowledge
that such individuals should have acquired in performing their respective duties
as officers and/or employees of Executive and its Subsidiaries, as the case
maybe.
9.7 Further Assurances. Each party shall cooperate and take such action
as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
9.8 Amendment and Waiver. The parties may by mutual agreement amend this
Agreement in any respect, and any party, as to such party, may (a) extend the
time for the performance of any of the obligations of any other party, (b) waive
any inaccuracies in representations by any other party, (c) waive compliance by
any other party with any of the agreements contained herein and performance of
any obligations by such other party, and (d) waive the fulfillment of any
condition that is precedent to the performance by such party of any
49
of its obligations under this Agreement. To be effective, any such amendment or
waiver, must be in writing and be signed by the party against whom enforcement
of the same is sought.
9.9 No Other Beneficiaries. This Agreement is being made and entered
into solely for the benefit of Purchaser and the Shareholders, and neither
Purchaser nor the Shareholders intend hereby to create any rights in favor of
any other person as a third party beneficiary of this Agreement or otherwise.
9.10 Governing Law. This Agreement shall be governed by the laws of the
State of Delaware without regard to its principles of conflict of laws.
9.11 Schedules. References to a Schedule shall include any disclosure
expressly set forth on the face of any other Schedule which a reasonable person
would conclude is, by its terms, applicable to another Schedule, even if not
specifically cross-referenced to such other Schedule; provided, however, that
the representations and warranties of a party set forth in this Agreement shall
not be affected or deemed modified, waived or limited in any respect by the
information contained in any agreement or document listed or referenced in a
Schedule unless the reference on the face of the Schedule expressly indicates
how the agreement or document modifies or limits the scope of a representation
or warranty.
9.12 Additional Matters Regarding Canterbury Warrant. Canterbury hereby
discloses to Purchaser that it has assigned to Argosy Investment Partners, L.P.
("ARGOSY"), a Shareholder, a portion of the Canterbury Warrant representing the
right to acquire 31,553 shares of Common Stock of Executive and retained the
right to acquire the remaining 1,077,801 shares of Common Stock of Executive
subject to the Canterbury Warrant. Canterbury and Argosy have not as of the date
hereof surrendered the original certificate representing the Canterbury Warrant
and requested Executive to issue replacement warrant certificates to effectuate
such assignment. Argosy hereby agrees that Canterbury is authorized to bind its
beneficial interest in the Canterbury Warrant to be sold to the Purchaser as
provided in this Agreement and such assignment of Canterbury contained in this
Agreement shall be fully binding upon and enforceable against Argosy to the
extent of the beneficial interest of Argosy in the Canterbury Warrant. Argosy
hereby makes and hereby agrees that it shall be deemed and considered to have
made for the purposes of Article 2 of this Agreement, the same representations
and warranties as are contained in Section 2.2 of this Agreement with respect to
its beneficial interest in the right to acquire 31,553 shares of Common Stock of
Executive under the Canterbury Warrant that has been assigned to it by
Canterbury.
9.13 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument. A facsimile of this Agreement may
be executed by one or more parties hereto and an executed copy of this Agreement
may be delivered by one or more parties hereto by facsimile pursuant to which
the signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes.
[SIGNATURE PAGE FOLLOWS]
50
IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase
Agreement as of the day and year first above written.
PURCHASER EXECUTIVE
MACQUARIE INVESTMENT HOLDINGS, INC. EXECUTIVE AIR SUPPORT, INC.
By: /s/ Xxxxxx Xxxxx /s/ Xxxxxx Bleach By: /s/ Xxxxx X. Xxxxxx
---------------------------------------- ----------------------------
Xxxxxx Xxxxx, President Xxxxx X. Xxxxxx, President
Its:
----------------------------------------
Xxxxxx Bleach, Executive Director
GUARANTY
Macquarie Bank Limited ("GUARANTOR"), a __________, guarantees the full
and complete performance of all of the payment obligations of the Purchaser to
the Shareholders under and pursuant to the foregoing Stock Purchase Agreement,
dated as of April ____, 2004 (the "PURCHASE AGREEMENT") of whatsoever nature
(collectively, the "GUARANTEED OBLIGATIONS"); provided, that, Guarantor's
liability hereunder shall not exceed, and in no event shall Guarantor be
obligated to expend more than, the Purchase Price pursuant to this Guaranty and
this Guaranty shall terminate on August 31, 2004 or immediately following the
Closing, whichever occurs first, except as to any demand for performance of this
Guaranty which has been made prior to such date as to which this Guaranty shall
remain applicable. In addition, upon payment of the Purchase Price by Purchaser,
this Guaranty shall terminate. The Shareholders may waive, exchange,
subordinate, release, surrender or in any other manner deal with Purchaser
without affecting Guarantor's obligations hereunder. Guarantor waives all
notices, including notice of (i) Shareholders' acceptance of this Guaranty,
Shareholders' intention to act or any Shareholders' action hereunder; (ii) the
existence or creation of or any alteration in any of the Guaranteed Obligations;
(iii) any default by Purchaser; and (iv) the obtaining, enforcing or releasing
of any other guaranty or of any pledge, assignment or security for any of the
Guaranteed Obligations and all other notices related to the Guaranteed
Obligations. Shareholders may proceed against Guarantor without first proceeding
against Purchaser for performance of the Guaranteed Obligations and is not
required to join Purchaser in any such proceeding against Guarantor; provided,
however, as a condition precedent to the commencement of any action against
Guarantor, Shareholders shall first comply with all procedures specified in the
Purchase Agreement with respect to actions taken by the Shareholders against
Purchaser.
EXECUTED as of the 28th day of April, 2004.
Macquarie Bank Limited
/s/ Xxxxxx Bleach
By:
----------------------------------------
XXXXXX BLEACH
Name:
--------------------------------------
EXECUTIVE DIRECTOR
Title:
-------------------------------------
[SIGNATURE PAGES OF SHAREHOLDERS FOLLOW]
51
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
/s/ Xxxxx X. Xxxxxxx
--------------------------------------------
Shareholder
Name: XXXXX X. XXXXXXX
---------------------------------------
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
/s/ Xxxxx X. Xxxxxx
----------------------------------
Shareholder
Name: XXXXX X. XXXXXX
-----------------------------
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
Argosy Investment Partners, L.P.
By: Argosy Associates, L.P., its general partner
By: Argosy Associates, Inc., its general partner
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------------
Xxxx X. Xxxxxxxx, Vice President
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
/s/ Xxxxxxx X. Xxxxxxxx, President,
CD Ventures, LLC, Its General Partner
---------------------------------------------
Shareholder
Name: CD Ventures, V, L.P.
C-6
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
Bermuda Trust (Limited) as Trustee for Trident Private
Equity Fund, L.P.
By: /s/ Illegible
-------------------------------------------------
Shareholder
Name:
-----------------------------------------------
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------
Shareholder
Xxxxxxx X. Xxxxxxxx as
Name:
---------------------------------------
Attorney-in-Fact for
Xxxxx X. Xxxxxxxx
C-8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS That I, Xxxxx X. Xxxxxxxx have made,
constituted and appointed, and by these presents do make, constitute and
appoint, Xxxxxxx X. Xxxxxxxx (hereinafter "my Attorney"), my true and lawful
attorney for me and in my name and on my behalf generally to do and perform all
matters and things, transact all business, make, execute and acknowledge the
Agreement and Plan of Merger by and between EAS Acquisition, Inc. and Executive
Air Support, Inc. and all other documents and instruments which may be requisite
or proper regarding the sale of my stock in Executive Air Support, Inc., with
the same powers and to all intents and purposes with the same validity as I
could, if personally present, hereby ratifying and confirming whatsoever my
Attorney shall or may do by virtue hereof.
This Power of Attorney shall not be affected by my later disability
or incapacity at law and shall expire on April 30, 2004.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 16th
day of April, 2004.
WITNESS:
/s/ Illegible /s/ Xxxxx X. Xxxxxxxx
---------------------------------- -------------------------------------
Xxxxx X. Xxxxxxxx
COMMONWEALTH OF PENNSYLVANIA :
: SS
COUNTY OF XXXXXXX :
On this, the 16th day of April, 2004, before me, the undersigned
officer, personally appeared Xxxxx X. Xxxxxxxx known to me (or satisfactorily
proven) to be the person whose name is subscribed to the within instrument and
acknowledged that he executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxx X. Xxxxx
-----------------------------------------
Notary Public
My Commission Expires:
Notarial Seal
Xxx X. Xxxxx, Notary Public
West Sadsbury Twp., Xxxxxxx County
My Commission Expires Mar. 18, 2006
-------------------------------------------
Member Pennsylvania Association of Notaries
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
CD Venture Partners LLC
/s/ Xxxxxxx X. Xxxxxxxx, President,
CD Ventures LLC, Its General Partner
--------------------------------------------
Shareholder
Name: CDV Equity Associates, L.P.
C-9
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
ABS Capital Partners III, L.P.
--------------------------------------------------------
Shareholder
Name: /s/ Xxxxxx X. Xxxx, Xx.
--------------------------------------------------
Xxxxxx X. Xxxx, Xx.
Managing Member of ABS Partners III, L.L.C.
General Partner of ABS Capital Partners, III, L.P.
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
/s/ Xxxxxx X. Xxxxx
-------------------------------------------
Merchants Capital Partners, LP
Name: Xxxxxx X. Xxxxx
---------------------------------------
Title: Principal
--------------------------------------
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
/s/ Xxxxx Xx Xxxx /s/ Xxxxxxx Xxxxxx
--------------------------------------------
Shareholder
Name: Xxxxx Xx Xxxx Xxxxxxx Xxxxxx
---------------------------------------
Authorized Signatory Authorized Signatory
FOR AND ON BEHALF OF BANC OF BERMUDA.
(illegible) LIMITED AS CUSTODIAN FOR
(illegible) INTERNATIONAL GROWTH FUND.
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
Hare & Co.
Signature Guaranteed
Medallion Guaranteed
The Bank of New York
--------------------------------------------
Shareholder
Name: /s/ Illegible
---------------------------------------
(SG510) Executive Vice President
SECURITIES TRANSFER X0809012
AGENTS MEDALLION PROGRAM
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
/s/ Illegible
--------------------------------------------
Shareholder
Name: Illegible
---------------------------------------
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
PNC VENTURE CORP
BY XXXXX V DEL PRESTO PARTNER
--------------------------------------------
Shareholder
Name: /s/ Illegible
---------------------------------------
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
CANTERBURY MEZZANINE CAPITAL II,
L.P., as Agent and as a Lender,
By: Canterbury Capital II, L.L.C., its general
partner,
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Manager
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
XXXXX PARTNERS LP
--------------------------------------------
Shareholder
Name: /s/ Illegible
---------------------------------------
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
/s/ Xxxxxxx X. Xxxxxxxx, President, CD Ventures, LLC
----------------------------------------------------
Shareholder
Name: CD Venture Partners V, L.P. its General Partner
AP. 18
-----------------------------------------------
SIGNATURE PAGE OF SHAREHOLDER
IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.
BancBoston Capital, Inc.
/s/ Xxxx X. Xxxxxxx
--------------------------------------------
Shareholder
Name: Xxxx X. Xxxxxxx
---------------------------------------
Managing Director
EXHIBIT 10.13
USE AND OCCUPANCY AGREEMENT
BETWEEN
PAN AMERICAN WORLD AIRWAYS, INC.
AND
TEXACO, INC.
TA-191
TETERBORO AIRPORT
TABLE OF CONTENTS
Section
Number Title Page
------ ----- ----
1. Term.......................................................................... 1
2. Rights of User................................................................ 1
3. Fees to Pan American.......................................................... 2
4. Time of Payment and Computation of Amounts.................................... 2
5. Obstruction Lights............................................................ 2
6. Care, Maintenance and Repair.................................................. 3
7. Insurance..................................................................... 3
8. Indemnity, Liability Insurance................................................ 5
9. Ingress and Egress............................................................ 6
10. Various Obligations of the User............................................... 6
11. Prohibited Acts............................................................... 9
12. Rules and Regulations......................................................... 11
13. Signs......................................................................... 12
14. Construction by the User...................................................... 12
15. Assignment and Sub-Use........................................................ 12
16. Condemnation.................................................................. 13
17. Non-Discrimination............................................................ 14
18. Governmental Requirements..................................................... 15
19. Rights of Entry Reserved...................................................... 16
20. Basic Agreement............................................................... 17
21. Patents, Trademarks........................................................... 17
22. Additional Fees and Charges................................................... 17
23. Right of Re-Entry............................................................. 18
24. Surrender..................................................................... 18
25. Termination by Pan American................................................... 18
26. Survival of the Obligations of the User....................................... 20
27. Use Subsequent to Cancellation or Termination................................. 21
28. Remedies to be Non-Exclusive.................................................. 21
29. Limitation of Rights and Privileges Granted................................... 22
30. Option for Renewal............................................................ 22
31. Removal of Personal Property.................................................. 23
32. Brokerage..................................................................... 23
33. Notices....................................................................... 23
34. Construction and Application of Terms......................................... 24
35. Non-Liability of Individuals.................................................. 24
36. Abatement..................................................................... 24
37. Port Authority Consent........................................................ 24
38. Entire Agreement.............................................................. 24
Exhibit A
Consent Agreement............................................................. 1-4
2
Teterboro Airport
Use and Occupancy Agreement
TA 191
USE AND OCCUPANCY AGREEMENT
THIS AGREEMENT, made as of January 1, 1986, by and between PAN AMERICAN
WORLD AIRWAYS, INC. (hereinafter called "Pan American"), a New York Corporation,
and TEXACO, INC. (hereinafter called the "User"), a Delaware Corporation.
WITNESSETH THAT:
WHEREAS, the Port Authority of New York and New Jersey (hereinafter
called "the Port Authority") is the owner of Teterboro Airport located in the
Boroughs of Teterboro, Moonachie and Xxxxxxxxx Heights and in the Township of
Lyndhurst, County of Bergen in the State of New Jersey (hereinafter called "the
Airport"); and,
WHEREAS, Pan American is the operator of the Airport and has the right
to operate and use the Airport under an agreement between Pan American and the
Port Authority dated September 19, 1967 (hereinafter called the "Basic
Agreement"); and
WHEREAS, User by a Use and Occupancy Agreement, dated January 1, 1976,
bearing file designation TA-107, used and occupied certain premises at the
Airport; and
WHEREAS, User desires to continue to use and occupy the area at the
Airport as hereinafter described;
NOW, THEREFORE, for and in consideration of the respective promises and
mutual agreements made by the parties hereto hereinafter set forth Pan American
hereby grants to the User the right to use and occupy the areas at the Airport
shown in diagonal hatching on Exhibit A attached hereto, which exhibit is hereby
made a part hereof, together with all buildings, structures, improvements,
additions and permanent installations existing therein or thereon and
constructed and installed therein or thereon during the term of this Agreement
(hereinafter referred to as the "Space") upon the following terms and conditions
and it is hereby mutually agreed as follows:
1. Term
The term of this Agreement shall commence upon January 1, 1986
("effective date"), and, unless so terminated or extended, shall expire
on December 31, 1990.
2. Rights of User
2.1 The User shall use the Space for the storage and maintenance of
aircraft owned, leased by or operated for the User and for private
aircraft owned or leased by the elected officers and directors of the
User and for no other purpose whatsoever.
1
2.2 Nothing contained in this Agreement shall give or shall be construed or
deemed to give to the User any right to sell aviation fuel at the
Airport except under a separate agreement with Pan American for bulk
fuel storage and sale to authorized Permittees at the Airport.
2.2.1 The User shall be permitted to acquire its own petroleum products for
purposes authorized hereunder from authorized Permittees at the
Airport.
2.2.2 If at such time no Permittee at the Airport is able to supply the User
with Texaco, Inc., petroleum products then the User may supply itself
with its requirements for such petroleum products for its own use only,
provided that the User shall pay to Pan American whatever fuel fees are
applicable at the Airport at such time.
3. Fees to Pan American
3.1 The User shall pay to Pan American a basic annual fee of Two Hundred
Thousand Twenty-Two Dollars and Eighty Four Cents ($200,022.84) in
monthly installments of Sixteen Thousand Six Hundred Sixty Eight
Dollars and Fifty Seven Cents ($16,668.57) throughout the term of this
Agreement.
4. Time of Payment and Computation of Amounts
4.1 User shall pay to Pan American the monthly installments of the basic
annual fee specified in Section 3.1 in advance on the first (1st) day
of each and every month of this Agreement, provided, however, that if
this Agreement is terminated on other than the last day of a month the
last payment shall be the then effective monthly installment of the
basic annual fee prorated in the same proportion the number of days the
Agreement was effective in the last month bears to the actual number of
days in said month.
4.2 The fees specified herein shall be payable at the office of the Manager
of Teterboro Airport, 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx
00000, or at such other location as may from time to time be
substituted therefor.
5. Obstruction Lights
The User shall furnish such obstruction lights as Pan American shall
direct, of the type and design approved by Pan American, and shall
install said lights in the locations on the Space designated by Pan
American and shall maintain them in first class operating condition at
all times. The User shall furnish and install the bulbs and furnish the
electricity necessary for the operation of the said lights, and shall
operate the same in accordance with the directions of Pan American. Pan
American hereby directs that all said obstruction lights shall, until
further notice, be operated daily for a period commencing thirty (30)
minutes before sunset and ending thirty (30) minutes after sunrise and
for such other periods as may be directed or requested by the Control
Tower of the Airport.
2
6. Care, Maintenance and Repair
6.1 The User shall at its own expense at all times keep the Space and all
the User's fixtures, equipment and personal property which are located
in any parts of the Space which are open to or visible by the general
public, in a clean and orderly condition and appearance.
6.2 The User shall at its own expense repair, replace or rebuild all or any
part of the Space which may be damaged or destroyed by the acts or
omissions of the User or by those of its employees, customers, guests
or invitees or of other persons doing business with the User.
6.3 Further, the User at its own expense shall take good care of the Space,
including without limitation paved areas, fences, roofs, skylights,
steelwork, walls, partitions, floors, foundations, ceilings, columns,
windows, doors, glass of every kind, plumbing, heating, lights,
fire-protection, fire-alarm, sewerage, drainage, water-supply and
electrical systems, including all pipes, wires, lines, conduits,
equipment and fixtures and shall make all necessary structural and
nonstructural repairs and replacements and do all necessary rebuilding
and repainting, regardless of the cause or the condition requiring the
same.
6.4 In the event the User fails to commence to so repair, replace, rebuild
or paint as required above within a period of ten (10) days after
notice from Pan American so to do, or fails diligently to continue to
complete the repair, rebuilding, replacement, or painting of all the
Space required to be repaired, replaced, rebuilt or painted by the User
under the terms of this Agreement, Pan American may, at its option, and
in addition to any other remedies which may be available to it, repair,
replace, rebuild or paint all or any part of the Space included in the
said notice, and charge the cost thereof to the User, the amount of
such charge to constitute an item of additional fee.
7. Insurance
7.1 During the term of this Agreement the User shall, insure and keep
insured to the extent of One Hundred Percent (100%) of the replacement
value thereof, all buildings, structures, improvements, installations,
facilities, and fixtures now or in the future located on the Space
against such hazards and risks as may now or in the future be included
under the standard form of fire insurance policy of the State of New
Jersey and also against damage or loss by windstorm, cyclone, tornado,
hail, explosion, riot, civil commotion, aircraft, vehicles and smoke,
under the standard form of fire insurance policy of New Jersey, and the
form of extended coverage endorsement prescribed as of the effective
date of the said insurance by the rating organization having
jurisdiction, and also covering boiler and machinery hazards and risks
and also, subject to the availability thereof, covering nuclear
property losses and contamination hazards and risks in a separate
insurance policy or policies or as an additional coverage endorsement
to the aforesaid policies in the form as may now or in the future be
prescribed as of the effective date of said insurance by the rating
organization having jurisdiction.
3
7.2 The aforesaid insurance coverages and renewals thereof shall insure the
Port Authority and Pan American as their interests may appear and shall
provide that the loss, if any, shall be adjusted with Pan American and
the Port Authority and shall be payable to the Port Authority or Pan
American as their interests may appear.
7.3 In the event the Space or any part thereof shall be damaged by any
casualty against which insurance is carried pursuant to this Section,
the User shall promptly notify Pan American of such casualty, and shall
thereafter furnish to Pan American such information and data as shall
enable the parties to adjust the loss.
7.4 At least seven (7) days prior to the beginning of the term of this
Agreement, the policies or certificates representing said insurance
shall be delivered by the User to Pan American and each policy or
certificate delivered shall bear an endorsement obligating the
insurance company to furnish the Port Authority and Pan American twenty
(20) days' advance notice of the cancellation of the insurance
evidenced by said policy or certificates or of any changes or
endorsements which may be made thereon. Renewal policies or
certificates shall be delivered to Pan American at least twenty (20)
days before the expiration of the insurance which such policies are to
renew.
7.5 The aforesaid insurance shall be written by a company or companies
approved by Pan American.
7.6 To the extent that any loss is recouped by actual payment to the Port
Authority or Pan American of the proceeds of the insurance herein
referred to above, such proceeds will be paid to the User to cover its
costs of rebuilding or repairing the portion or all of the Space which
has been damaged or destroyed. Such payment will be made by Pan
American to the User in installments if requested by the User and as
work progresses provided that as to each request for payment the User
shall certify by a responsible officer or authorized representative
thereof that the amounts requested are due and payable to its
contractor for work completed. Upon completion of all the work, the
User shall certify by a responsible officer or authorized
representative that such rebuilding and repairs have been completed,
that all costs in connection therewith have been paid by the User and
said costs are fair and reasonable and said certification shall also
include an itemization of costs. Nothing herein contained shall be
deemed to release the User from any of its repair, maintenance or
rebuilding obligations under the Agreement. If the proceeds of any such
insurance paid to Pan American exceed the User's costs of rebuilding or
repair, the excess of such proceeds shall be retained by Pan American.
7.7 If there is damage or destruction to the Space covered by insurance
under this Section, the User shall promptly repair, rebuild or replace
the damaged or destroyed portion of the Space.
7.8 If the User does not so properly proceed then Pan American may repair
or rebuild and may apply such proceeds of such insurance towards such
repair, replacement and rebuilding, but no such application shall
relieve the User of its obligations under this
4
Agreement, or Pan American in its discretion may elect to relieve the
User of its obligations under this Agreement to repair, replace and
rebuild the damaged or destroyed property, and not to have said
property repaired, replaced or rebuilt and in such latter event the
entire proceeds of the insurance shall be retained by Pan American.
7.9 If, moreover, there is damage or destruction to the property covered
under this Section which occurs within the last three years of the term
of the Agreement, the obligations of the User to repair, replace or
rebuild such damaged or destroyed property shall be discharged
(provided that the insurance applicable thereto has been maintained in
full force and effect) and the entire proceeds of the insurance
applicable thereto small be retained by Pan American.
8. Indemnity, Liability Insurance
8.1 The User shall indemnify and hold harmless the Port Authority, its
Commissioners, officers, employees and representatives; and Pan
American, its subsidiaries and affiliates, their Directors, officers,
employees and agents (to include reasonable attorney and other
professional fees) from and against all claims and demands of third
persons, including, but not limited to, claims and demands for death or
personal injury or for property damage arising out of the use and
occupancy of the Space by the User or out of any other acts or
omissions of the User, its officers, employees on the Space or out of
the acts or omissions of others on the Space with the consent of the
User whether or not such claims, demands, causes of action,
liabilities, etc., are made or asserted before or against termination
or expiration of this Agreement.
8.2 In addition to the obligations set forth in the Subsection immediately
above, the User, in its own name as assured, shall maintain and pay the
premiums or the following described policies of comprehensive general
including aircraft liability insurance and automobile liability
insurance which shall cover its operations hereunder and shall be
effective throughout the term in limits not lower than the following:
8.2.1 Combined single limit of $100,000,000 for bodily injury and property
damage.
8.3 Neither the Port Authority nor Pan American shall be named as an
insured in any policy of insurance required by this Agreement, unless
the Port Authority or Pan American shall, at any time during the
effective period of this Agreement, direct otherwise in writing, in
which case the User shall cause the Port Authority and/or Pan American
to be so named.
8.4 As to any insurance required by the provisions of this Agreement to be
obtained by or at the direction of the User, a certified copy of each
of the policies or certificates evidencing the existence thereof, or
binders, together with evidence of the payment of the premium thereon,
shall be delivered to Pan American within fifteen (15) days prior to
occupancy by User of the Space. In the event any binder is delivered,
it shall be replaced within thirty (30) days by a certified copy of the
policy or a certificate. Each such copy or certificate shall contain a
valid provision or endorsement that the
5
policy may not be cancelled, terminated, changed or modified without
giving twenty (20) days' written advance notice thereof to Pan
American. A renewal policy shall be delivered to Pan American at least
twenty (20) days prior to the expiration date of each expiring policy,
except for any policy expiring after the date of expiration of the
term. If at any time any of the policies shall be or become
unsatisfactory to Pan American as to form or substance or if any of the
carriers issuing such policies shall be or become unsatisfactory to Pan
American, the User shall promptly obtain a new and satisfactory policy
in replacement.
9. Ingress and Egress
9.1 The User, its customers, its contractors, suppliers of material and
furnishers of services shall have the right of ingress and egress
between the Space and the city streets or public ways outside the
Airport by means of such pedestrian or vehicular roadways to be used in
common with others having rights of passage within the Airport, as may
from time to time be designated by Pan American for the use of the
public.
9.2 The User shall have the right of ingress and egress between the Space
and the public landing areas at the Airport by means of connecting
taxiways, to be used in common with others having rights of passage
thereon.
9.3 The use of any such roadway or taxiway shall be subject to the Rules
and Regulations of the Airport which are now in effect or which may
hereafter be promulgated for the safe and efficient operation of the
Airport. Pan American may, at any time, temporarily or permanently,
close or consent to or request the closing of, any such roadway or
taxiway and any other way at, in or near the Space presently or
hereafter used as such, so long as a reasonable means of ingress and
egress as provided above remains available to the User. The User hereby
releases and discharges the Port Authority, its Commissioners,
officers, employees and agents; Pan American, its subsidiaries, their
Directors, officers, employees and agents and all municipalities and
other governmental authorities and their respective successors and
assigns, of and from any and all claims, demands, or causes of action
which the User may now or at any time hereafter have against any of the
foregoing, arising or alleged to arise out of the closing of any
street, roadway or other area, whether within or outside the Space. The
User shall not do or permit anything to be done which will interfere
with the free access and passage of others to space adjacent to the
Space or in any streets or roadways near the Space.
10. Various Obligations of the User
10.1 The User shall conduct its operations in an orderly and proper manner
and so as not to annoy, disturb or be offensive to others at the Space
on the Airport. The User shall take all reasonable measures:
6
10.1.1 to eliminate vibrations tending to damage any equipment, structure,
building or portion of a building which is on the Space, or is a part
thereof, or is located elsewhere on the Airport, and
10.1.2 to keep the sound level of its operations as low as possible.
10.2 The User shall control the conduct, demeanor and appearance of its
employees and invitees and of those doing business with it, and upon
objection from Pan American concerning the conduct, demeanor or
appearance of any such shall immediately take all lawful steps
necessary to remove the cause of the objection. If Pan American shall
so request, the User agrees to supply and require its employees to wear
or carry badges or other suitable means of identification, which shall
be subject to the prior and continuing approval of the Manager of the
Airport.
10.3 It is the intent of the parties hereto that noise caused by aircraft
engine operation shall be held to a minimum. To this end the User will
conduct its operations in such a manner as to keep the noise produced
by aircraft engines and component parts thereof to a minimum by such
methods as are practicable, considering the extent and type of the
operations of the User. In addition, the User will employ the maximum
amount of noise arresting and noise reducing devices that are available
and economically practicable, considering the extent of the operations
of the User. In its use of the Space, the User shall take all possible
care, caution and precaution and shall use its best efforts to minimize
prop or jet blast interference to aircraft operating on or to
buildings, structures and roadways, now located on or which in the
future may be located on areas adjacent to the Space. In the event Pan
American determines that the User has not curbed the prop or jet blast
interference, the User hereby covenants and agrees to erect and
maintain at its own expense such structure or structures as may be
necessary to prevent prop or jet blast interference subject, however,
to the prior written approval of Pan American as to type, manner and
method of construction.
10.4 The User shall daily remove from the Space by means of facilities
provided by User all garbage, debris and other waste materials arising
out of or in correction with its operations hereunder, and any such not
immediately removed shall be temporarily stored in a clean and sanitary
condition in suitable garbage and waste receptacles, the same to be
made of metal and equipped with tight-fitting covers, and to be of a
design safely and properly to contain whatever material may be placed
therein, said receptacles being provided and maintained by the User.
The receptacles shall be kept covered except when filling or emptying
the same. The User shall exercise extreme care in removing such
garbage, debris and other waste materials from the Space. The manner of
such storage and removal shall be subject in all respects to the
continual approval of Pan American. No facilities of the Airport shall
be used for such removal unless with Pan American's prior consent in
writing. No such garbage, debris or other waste materials shall be or
be permitted to be thrown, discharged or disposed into or upon the
waters at or bounding the Space.
10.5 It is intended that the standards and obligations imposed by this
Section shall be maintained or complied with by the User in addition to
its compliance with all
7
applicable Federal, State and Municipal laws, ordinances and
regulations, and in the event that any of said laws, ordinances and
regulations shall be more stringent than such standards and
obligations, the User agrees that it will comply with such laws,
ordinances and regulations in its operations hereunder. Changes in such
laws or regulations are not grounds for termination of this Agreement.
10.6 The User shall promptly observe, comply with and execute the provisions
of any and all present and future rules and regulations, requirements,
orders and directions of the National Fire Protection Association and
the Fire Insurance Organization of New Jersey or of any other board or
organization exercising or which may exercise similar functions which
may pertain or apply to the operations of the User on the Space and the
User shall, subject to and in accordance with the provisions of this
Agreement relating to construction by the User, make any and all
structural or nonstructural improvements, alterations or repairs of the
Space that may be required at any time hereafter by any such present or
future rule, regulation, requirement, order or direction. If by reason
of any failure on the part of the User to comply with the provisions of
this Section, any fire insurance, extended coverage or other insurance
rate on the Space or any part thereof, or on the Airport or any part
thereof, shall at any time be higher than it otherwise would be, then
the User shall pay to Pan American that part of all premiums paid by
Pan American which shall have been charged because of such violation or
failure by the User.
10.7 In addition to compliance by the User with all laws, ordinances,
governmental rules, regulations and orders now or at any time in effect
during the term of the use hereunder which as a matter of law are
applicable to the operation, use or maintenance by the User of the
Space or the operations of the User under this Agreement (the foregoing
not to be construed as a submission by Pan American or the Port
Authority to the application to itself of such requirements or any of
them), the User agrees that it shall conduct all its operations under
the Agreement and shall operate, use and maintain the Space in
accordance with a high standard and in such manner that there will be
at all times a minimum of air pollution, water pollution or any other
type of pollution and a minimum of noise emanating from, arising out of
or resulting from the operation, use or maintenance of the Space by the
User and from the operations of the User under this Agreement. Pan
American hereby reserves the right from time to time and at any time
during the term of the Agreement to require the User, and the User
agrees to design and construct at its sole cost and expense such
reasonable structures, fences, equipment, devices and other facilities
as may be necessary or appropriate to accomplish the objectives as set
forth in the first sentence of this paragraph. All locations, the
manner, type and method of construction and the size of any of the
foregoing shall be determined by Pan American. The User shall submit
for Pan American approval a Construction Application together with its
plans and specifications covering the required work and upon receiving
such approval shall proceed diligently to construct the same.
10.8 The obligations assumed by the User under the above paragraph shall
continue throughout the term of this Agreement and shall not be
limited, affected, impaired or in any manner modified by the fact that
Pan American or the Port Authority shall
8
have approved any Construction Application and supporting plans,
specifications and contracts covering construction work and
notwithstanding the incorporation therein of Pan American's or the Port
Authority's recommendations or requirements and notwithstanding that
Pan American and the Port Authority may have at any time during the
term of the Agreement consented to or approved any particular procedure
or method of operation which the User may have proposed, or Pan
American or the Port Authority may have itself prescribed the use of
any procedure or method. The agreement of the User to assume the
obligations under the above paragraph is a special inducement and
consideration to Pan American in entering into this Agreement with the
User.
10.9 The Port Authority has applied for and received a grant or grants of
money from the Administrator of the Federal Aviation Administration
pursuant to the Federal Airport Act of 1946 and pursuant to the Airport
and Airway Development Act of 1970 (49 U.S.C. 1701), as the same have
been amended and supplemented, and the Port Authority may in the future
apply for and receive further such grants. Pan American under its
Operating Agreement with the Port Authority for Teterboro Airport,
Dated September 19, 1967, has assumed certain obligations of the Port
Authority under the Grant Agreement and in connection therewith, the
Port Authority and Pan American may in the future undertake certain
additional obligations respecting the operation of the Airport and the
activities of contractors, lessees and permittees thereon. The
performance by the User of the promises and obligations contained in
this Agreement is therefore a special consideration and inducement to
Pan American to enter into this Agreement and the User further
covenants and agrees that if the Administrator of the Federal Aviation
Administration or any other governmental officer or body having
jurisdiction over the enforcement of the obligations of the Port
Authority and/or Pan American in connection with Federal Airport Aid,
shall make any orders, recommendations or suggestions respecting the
performance by the User will promptly comply therewith, at the time or
times when and to the extent that Pan American may direct.
10.10 The User shall be solely responsible for compliance with the provisions
of this Section and no act or omission of Pan American shall relieve
the User of such responsibility.
11. Prohibited Acts
11.1 The User shall not install, maintain, operate or permit the
installation, maintenance or operation of any restaurant, kitchen,
stand or other establishment of any type for the sale of food or of any
vending machines or device designed to dispense or sell merchandise or
services of any kind to the public, except that User may, for the
benefit of its employees, customers, guests and visitors install coin
operated vending machines or services for the dispensing and sale of
the following:
11.1.1 Hot and cold packaged foods;
11.1.2 Hot and cold beverages;
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11.1.3 Candy and chewing gum;
11.1.4 Tobacco and tobacco products;
11.1.5 Newspapers and periodicals;
11.1.6 Telephone services (pay stations)
(hereinafter called "vending machines").
11.2 If User, installs or causes to be installed vending machines on the
Space for the limited sale of merchandise or services permitted
hereunder, User shall have the right to retain the revenues derived
therefrom, provided, however, that:
11.2.1 The User shall itself, and shall also require its contractors, to
indemnify and hold harmless Pan American, its subsidiaries, their
Directors, officers, agents and employees and the Port Authority, its
Commissioners, officers, agents and employees (to include reasonable
attorney's and other professional fees) from and against all claims and
demands of third persons (including employees, (to include reasonable
attorney and other professional fees) officers and agents of Pan
American and the Port Authority) arising or alleged to arise out of the
installation, operation or maintenance of the vending machines (or
consumable obtained therefrom) or arising or alleged to arise out of
any actual or alleged infringement of any patent, trademark or
copyright or any alleged or actual unfair competition in any wise
connected with the operation of the vending machines whether or not
such claims, demands, causes of action, liabilities, etc. are made or
asserted before or after termination or expiration of this agreement.
11.3 The limited right to install, operate and maintain vending machines
granted to User herein may be terminated by Pan American at any time
during the term of this Agreement upon ninety (90) days' notice to the
User and Pan American, at any time thereafter, may substitute for the
User's vending machines other machines selling similar merchandise or
services operated by Pan American or by its permittee or concessionaire
and thereupon User shall remove its machines.
11.4 Upon installation by Pan American or by its permittee or concessionaire
of vending machines in substitution of User's vending machines, all
revenues derived therefrom shall be retained by Pan American.
11.5 Upon rendering of notice to User of termination of the right to operate
vending machines, Pan American may elect to permit User's vending
machines to remain, but in such case, User shall pay or cause to be
paid to Pan American each month for each machine upon the same basis
for the preceding month as any permittee or concessionaire of Pan
American then operating machines at the Airport for sale to the general
public of similar merchandise or rendering of similar services.
11.6 The termination by Pan American of the limited right of User to install
vending machines at the Space shall be nondiscriminatory in that
similar rights granted to
10
other Users at the Airport shall be terminated concurrently therewith,
and in the exercise of such right by Pan American User shall not be
entitled to assert any claim or institute any action or proceeding at
law or in equity to assert any claim on account thereof whether for
loss, damages or loss of revenue, consequential or otherwise.
11.7 The User shall nor overload any floor or paved area on the Space and
shall repair any floor including supporting members and any paved area
damaged by overloading.
11.8 The User shall not do or permit to be done anything which may interfere
with the effectiveness or accessibility of the utility, mechanical,
electrical, drainage and sewer systems, fire-protection system and
other systems installed or located on or in the Space.
11.9 The User shall not commit any nuisance or permit its employees or
others on the Space with its consent to commit or create or continue or
tend to create any nuisance on the Space or in or near the Airport.
11.10 The User shall not cause or permit to be caused or produced upon the
Space, to permeate the same or to emanate therefrom, any unusual,
noxious or objectionable smokes, gases, vapor or odors.
11.11.1 The User shall not do or permit to be done any act or thing upon the
Space which:
11.11.2 will invalidate or conflict with any fire insurance policies covering
the Space or any part thereof, or the Airport or any part thereof; or
11.11.3 which, in the opinion of Pan American, may constitute an extra
hazardous condition so as to increase the risks normally attendant upon
the operations permitted by this Agreement; or
11.11.4 which will increase the rate of any fire insurance, extended coverage
or other insurance on the Airport or any part thereof or upon the
contents of any building or structure thereon.
12. Rules and Regulations
12.1 User shall observe and obey and shall compel others on the Space and
those doing business with it with respect to the Space to observe and
obey such Rules and Regulations of the Airport as are now in effect or
as may be promulgated from time to time for the government and conduct
of operations of the Airport for reasons of safety, health or
preservation of property, for the good and orderly appearance of the
Space and for the safe and efficient operation and use of the Space. If
a copy of the Rules and Regulations is not attached, then Pan American
will make a copy thereof available to the User at the office of the
Manager of Teterboro Airport.
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13. Signs
13.1 Except with the prior written approval of Pan American, the User shall
not erect, maintain or display any advertising, signs, posters or
similar devices at or on the Space.
13.2 Upon demand by Pan American, the User shall remove, obliterate or paint
out any and all advertising, signs, posters and similar devices placed
by the User on the Space or elsewhere on the Airport without the prior
approval of Pan American. In the event of a failure on the part of the
User so to remove, obliterate or paint out each and every sign or piece
of advertising and so to restore the Space and the Airport, Pan
American may perform the necessary work and the User shall pay the
costs thereof to Pan American on demand.
14. Construction by the User
14.1 The User shall not erect any structures, make any improvements or do
any construction work on the Space, or install any fixtures (other than
trade fixtures, removable without material damage to the Space, any
such damage to be immediately repaired by the User) without the prior
written approval of Pan American through the medium of a construction
or alteration application and in the event any construction,
improvement, alteration, modification, addition, repair or replacement
is made without such approval, then upon reasonable notice so to do,
the User will remove the same or at the option of Pan American, cause
the same to be changed to the satisfaction of Pan American. In case of
any failure on the part of the User to comply with such notice, Pan
American may effect the removal or change and User shall pay the cost
thereof to Pan American.
14.2 Title to any construction, improvement, alteration, modification or
addition performed by User at or on the Space in accordance with a Pan
American approved construction or alteration application shall vest in
the Port Authority immediately upon completion without any further
action or notice of any kind.
15. Assignment
15.1 The User agrees that it will not grant the right of sub-use, sell,
convey, transfer, assign, mortgage or pledge this Agreement or any part
thereof or any rights granted thereby in the Agreement hereunder or any
part hereof without the prior written consent of Pan American, which
consent shall not be unreasonable withheld.
15.1.1 In the event that such right of sub-use is granted by Pan American, the
User agrees to pay to Pan American an amount equal to Fifty Percent
(50%) of any fees paid by the sub-user to the User in excess of the
fees due to Pan American under Section 3 of the Agreement.
15.2 Notwithstanding the provisions of the foregoing subsection, the User
may assign this Agreement in its entirety to any successor in interest
to the User with or into which the User may be merged or consolidated
or to any entity to whom the User has sold
12
all or substantially all of its assets, provided that each such
succeeding entity or purchaser shall execute and deliver an instrument
to Pan American in a form satisfactory to Pan American assuming the
obligations of the User under this Agreement, and provided, further,
that the User shall execute and deliver to Pan American a statement to
the effect the User's guarantee of the obligations hereunder shall
cover hereunder the obligations of each succeeding entity or purchaser.
15.3 Nothing contained herein nor the privileges of assignment or granting
the right of sub-use as set forth in Section 15.1.1 and 15.2 above
shall be or be deemed to constitute a waiver or release of liability of
the User and the User agrees that it shall at all time remain primarily
liable for all of the obligations imposed upon it as User under this
Agreement as if no assignment of or granting of right of sub-use under
this Agreement was ever made or attempted.
15.4 If the User assigns, sells, conveys, transfers, mortgages, pledges or
grants the right of sub-use under this Agreement in violation of the
foregoing provisions of this Section 15, Pan American may collect from
any assignee, sub-user or anyone who claims a right to this Agreement
or who occupies the Space or any part thereof, and shall apply the net
amount collected to the fees herein reserved; and no such collection
shall be deemed a waiver by Pan American of the covenants contained in
this Section 15 nor of acceptance by Pan American of any assignee,
sub-user, claimant or occupant nor a release of the User by Pan
American from the further performance by the User of the covenants
contained herein.
16. Condemnation
16.1 The User, in any action or proceeding instituted by any governmental
agency or agencies for the taking for a public use of any interest in
all or any part of the Space, shall not be entitled to assert any claim
to any compensation or award or part thereof made or to be made therein
or therefor, or to institute any action or proceeding or to assert any
claim against such agency or agencies or against the Port Authority or
Pan American, or its subsidiaries and affiliates for or on account of
any such taking (except the possible claim to an award for loss of the
User's removable fixtures), it being understood and agreed between Pan
American and the User that Pan American shall be entitled to all the
compensation or awards made or to be made or paid for in such taking,
free of any claim or right of the User.
16.2 In the event of a taking of the entire Space by any governmental agency
or agencies, then this Agreement shall be cancelled as of the date
possession is taken from the Port Authority by the agency or agencies,
and shall cease and expire in the same manner and with the same effect
as if the Agreement had on that date expired.
16.3 In the event that all or any portion of the Space is required by the
Port Authority to comply with any present or future governmental law,
rules, regulation, requirement, order or direction, Pan American may by
notice given to the User terminate the Agreement with respect to all or
such portion of the Space so required. Such termination shall be
effective on the date specified in the notice. The User hereby
13
agrees to deliver possession of all or such portion of Space so
required upon the effective date of such termination.
16.4 No taking by or conveyance to any governmental authority as described
above nor any delivery by the User nor taking by the Port Authority
pursuant to this subsection shall be or be construed to be a breach of
this Agreement or be made the basis of any claim by the User against
the Port Authority or Pan American or its subsidiaries and affiliates
for damages, consequential or otherwise.
16.5 In the event of a taking by any governmental agency or agencies or by
the Port Authority of a part of the Space, then use of such part only
shall, as of the date possession thereof is taken, cease and determine,
and the Fees thereafter to be paid by the User to Pan American shall be
abated as hereinafter provided from and after the date of such taking.
In the event that a substantial part shall be taken, which shall be
deemed to mean a taking so extensive that the User is unable to use or
operate the Space for the purposes expressed in this Agreement, then
the User shall have the right to be exercised within thirty (30) days
of the taking to terminate this Agreement, such termination to have the
same effect as expiration.
17. Non-Discrimination
17.1 Without limiting the generality of any of the provisions of this
Agreement, the User, for itself, its successors in interest, and
assigns, as a part of the consideration hereof, does hereby covenant
and agree as a covenant running with the land that (1) no person on the
grounds of sex, race, color, or national origin shall be excluded from
participation in, denied the benefits of, or be otherwise subjected to
discrimination in the use of the Space, (2) that in the construction of
any improvement on, over, or under the Space and the furnishing of
services thereon, no person on the grounds of race, color, or national
origin shall be excluded from participation in, denied the benefits of,
or otherwise subjected to discrimination, (3) that the User shall use
the Space in compliance with all other requirements imposed by or
pursuant to Title 49, Code of Federal Regulations, Department of
Transportation, Subtitle A, Office of the Secretary, Part 21,
nondiscrimination in Federally-assisted programs of the Department of
Transportation-Effectuation of Title VI of the Civil Rights Act of
1964, and as said Regulations may be amended, and any other present or
future laws, rules, regulations, orders or directions of the United
States of America with respect thereto which from tine to time may be
applicable to the User's operations thereat, whether by reason of
agreement between Pan American and the United States Government or
otherwise.
17.2 The User assures that it will undertake an affirmative action program
as required by 14 CFR Part 152, Subpart E, to insure that no person
shall on the grounds of race, creed, color, national origin, or sex be
excluded from participating in any employment activities covered in 14
CFR Part 152, Subpart E. The User assures that no person shall be
excluded on these grounds from participating in or receiving the
services or benefits of any program or activity covered by this
subpart. The User assures that it will require that its covered
suborganization provide assurances to the
14
User that they similarly will undertake affirmative action programs and
that they will require assurances from their suborganizations, as
required by 14 CFR Part 152, Subpart E, to the same effect.
17.3 The User shall include the provisions of the above subsections in every
agreement or concession pursuant to which any person or persons, other
than the User, operates any business or facility in or at the Space
providing services to the public and shall also include therein a
provision granting Pan American a right to take such action as the
United States may direct to enforce such covenant.
17.4 The User's noncompliance with the provisions of this Section shall
constitute a material breach of the Agreement. In the event of the
breach by the User of any of the above nondiscrimination provisions,
Pan American may take any appropriate action to enforce compliance; or
in the event such noncompliance shall continue for a period of twenty
(20) days after receipt of written notice from Pan American, Pan
American shall have the right to terminate this Agreement with the same
force and effect as a termination under the Section of the Agreement
providing for termination for default by the User in the performance or
observance of any other term or provision of the Agreement; or may
pursue such other remedies as may be provided by law; and as to any or
all of the foregoing, Pan American may take such action as the United
States may direct.
17.5 The User shall indemnify and hold harmless Pan American, its
subsidiaries and affiliates and the Port Authority (to include
reasonable attorney's and other professional fees) from any claims and
demands of third persons including the United States of America
resulting from the User's noncompliance with any of the provisions of
this Section and the User shall reimburse Pan American and the Port
Authority for any loss or expense incurred by reason of such
noncompliance, whether or not such claims, demands, causes of action,
liability, etc., are made or asserted before or after termination or
expiration of this agreement.
17.6 Nothing contained in this Section shall grant or shall be deemed to
grant to the User the right to transfer or assign the Agreement, to
make any agreement or concession of the type mentioned in this Section,
or any right to perform any construction on the Space.
18. Governmental Requirements
18.1 The User shall procure all licenses, certificates, permits or other
authorization from all governmental authorities, if any, having
jurisdiction over the User's operations at the Space which may be
necessary for the User's operations thereat.
18.2 The User shall pay all taxes, license, certification, permit and
examination fees and excise which may be assessed, levied, exacted or
imposed on the Space or operation hereunder or on the gross receipts or
income to User therefrom, and shall make all applications, reports and
returns required in connection therewith.
15
18.3 Pan American has agreed by a provision in its agreement with the Port
Authority covering the Airport to conform to the enactments,
ordinances, resolutions and regulations of various governmental
authorities having jurisdiction of the airport and of their various
departments, boards and bureaus in regard to construction and
maintenance of buildings and structures and in regard to health and
fire protection. The User shall, within forty-eight (48) hours after
its receipt of any notice of violation, warning notice, summons or
other legal process for the enforcement of any such enactment,
ordinance, resolution or regulation, deliver the same to Pan American.
Unless otherwise directed in writing by Pan American because the same
is inapplicable, the User shall conform to such enactments, ordinances,
resolutions and regulations insofar as they relate to the operations of
the User at the Space. In the event of compliance with any such
enactment, ordinance, resolution or regulation on the part of the User,
acting in good faith, commenced after such delivery to Pan American but
prior to the receipt by the User of a written direction from Pan
American, such compliance shall not constitute a breach of this
Agreement, although Pan American thereafter notifies the User to
refrain from such compliance.
18.4 The User shall promptly observe, comply with and execute the provisions
of any and all present and future governmental laws, rules,
regulations, requirements, orders and directions which may pertain or
apply to the User's operations at the Space.
18.5 The User's obligations to comply with governmental requirements are
provided herein for the purpose of assuring proper safeguards for the
protection of persons and property at the Space.
19. Rights of Entry Reserved
19.1 The Port Authority, by its officers, employees, agents, representatives
and contractors and Pan American and its subsidiaries and affiliates by
its officers, employees, agents, representatives and contractors shall
have the right at all reasonable times to enter upon the Space for the
purpose of inspecting the same, for observing the performance by the
User of its obligations under this Agreement and for the doing of any
act or thing which the Port Authority or Pan American nay be obligated
or have the right to do under this Agreement, or otherwise.
19.2 Without limiting the generality of the foregoing, Pan American, by its
officers, employees, agents, representatives and contractors and by the
employees, agents, representatives and contractors of any furnisher of
utility services in the vicinity, shall have the right, for its own
benefit, for the benefit of the User, or for the benefit of others than
the User at the Airport, to maintain existing and future utilities
systems or portions thereof on the Space, including therein, without
limitation thereto, systems for the supply of heat, water, gas, fuel,
electricity and for the furnishing of fire-alarm, fire-protection,
sprinkler, sewerage, drainage, telegraph and telephone services,
including all lines, pipes, mains, wires, conduits and equipment
connected with or appurtenant to such systems, and to enter upon the
Space at all reasonable times to make such repairs, replacements or
alterations as may, in the opinion of Pan American, be deemed necessary
or advisable and, from time to time to construct or
16
install over, in or under the Space new systems or parts thereof,
including lines, pipes, mains, wires, conduits and equipment; provided,
however, that in the exercise of such rights of repair, alteration or
new construction Pan American shall not unreasonably interfere with the
use and occupancy of the Space by the User.
19.3 The exercise of any or all of the foregoing rights by the Port
Authority, Pan American or others shall not be or be construed to be an
eviction of the User nor be made the grounds for any abatement of fees,
nor any claim or demand for damages, consequential or otherwise.
19.4 Nothing in this Section shall impose or shall be construed to impose
upon Pan American or the Port Authority any obligation so to construct
or maintain or to make repairs, replacements, alterations or additions,
or shall create any liability for any failure so to do.
20. Basic Agreement
20.1 In the event the Basic Agreement is terminated, revoked, cancelled or
expires, this Agreement shall terminate on the day preceding such date
the same as if such preceding date were the expiration date of the term
of this Agreement and such termination, revocation, cancellation or
expiration of the Basic Agreement shall not be deemed a breach of this
Agreement.
21. Patents, Trademarks
21.1 The User represents that it is the owner of or fully authorized to use
any and all services, processes, machines, articles, marks, names or
slogans used by it in its operations under or in anywise connected with
this Agreement. The User agrees to indemnify and to save and hold the
Port Authority, Pan American, its subsidiaries and affiliates, their
Commissioners, Directors, officers, employees, agents and
representatives free and harmless of and from any loss, liability,
expense, suit or claim for damages in connection with any actual or
infringement of any patent, trademark or copyright, or arising from any
alleged or actual unfair competition or other similar claim arising out
of the operations of the User under or in anywise connected with this
Agreement, whether or not such claims, demands, causes of action,
liabilities, etc., are made or asserted before or after termination or
expiration of this Agreement and to include reasonable attorney's and
other professional fees.
22. Additional Fees and Charges
22.1 If Pan American is required or elects to pay any sum or sums or incurs
any obligations or expense by reason of the failure, neglect or refusal
of the User to perform or fulfill any one or more of the conditions or
agreements contained in this Agreement, or as a result of an act or
omission of the User contrary to the said conditions and agreements,
the User agrees to pay the sum or sums so paid or the expense so
incurred, including all interest, costs, damages and penalties, and the
same may be added to any installment of Fees thereafter due hereunder,
and each and every part of the same shall be and become additional
Fees, recoverable by Pan American
17
in the same manner and with like remedies as if they were originally a
part of the Fees as set forth in the Section entitled "Fees to Pan
American" hereof.
23. Right of Re-Entry
23.1 Pan American shall, as an additional remedy upon the giving of a notice
of termination as provided in the Section entitled "Termination by Pan
American" hereof, have the right to re-enter the Space and every part
thereof upon the effective date of termination without further notice
of any kind, and may regain and resume possession either with or
without the institution of summary or any other legal proceedings or
otherwise. Such re-entry or regaining or resumption of possession,
however, shall not in any manner affect, alter or diminish any of the
obligations of the User under this Agreement, and shall in no event
constitute an acceptance of surrender.
24. Surrender
24.1 The User covenants and agrees to yield and deliver peaceably to Pan
American, possession of the Space on the date of cessation of the
Agreement, whether such cessation be by termination, expiration or
otherwise, promptly and in good condition, except for reasonable wear
which does not cause or tend to cause deterioration of the improvements
or adversely affect the efficiency or proper utilization thereof.
25. Termination by Pan American
25.1 Upon the occurrence of any of the following events or at any time
thereafter during the continuance thereof, Pan American may terminate
the rights of the User under this Agreement upon five (5) days' written
notice, such termination to be effective upon the date specified in
such notice:
25.1.1 The User shall become insolvent or shall take the benefit of any
present or future insolvency statute, or shall make a general
assignment for the benefit of creditors, or file a voluntary petition
in bankruptcy or a petition or an answer seeking an arrangement or its
reorganization or the readjustment of its indebtedness under the
federal bankruptcy laws or under any other law or statute of the United
States or of any State thereof, or consent to the appointment of a
receiver, trustee or liquidator of all or substantially all of its
property; or
25.1.2 By order of decree of a court, the User shall be adjudged bankrupt or
an order shall be made approving a petition filed by any of the
creditors or, if the User is a corporation, by any of the stockholders
of the user, seeking its reorganization or the readjustment of its
indebtedness under the federal bankruptcy laws or under any law or
statute of the United States or of any State thereof; or
25.1.3 A petition under any part of the federal bankruptcy laws or an action
under any present or future insolvency law or statute shall be filed
against the User and shall not be dismissed within thirty (30) days
after the filing thereof; or
18
25.1.4 Except as may be provided in the Section of this Agreement entitled
"Assignment," the interest of User under this Agreement shall be
transferred to, pass to or devolve upon, by operation of law or
otherwise, any other person, firm or corporation; or
25.1.5 The User, if a corporation, shall, without the prior written approval
of Pan American, become a successor or merged corporation in a merger,
a constituent corporation in a consolidation, or a corporation in
dissolution; or
25.1.6 By or pursuant to, or under authority of any legislative act,
resolution or rule, or any order or decree of any court or governmental
board, agency or officer having jurisdiction, a receiver, trustee, or
liquidator shall take possession or control of all or substantially all
of the Space of the User and such possession or control shall continue
in effect for a period of twenty (20) working days; or
25.1.7 The User shall voluntarily abandon, desert or vacate the Space or
discontinue its operations at the Airport, or, after exhausting or
abandoning any right of further appeal, the User shall be prevented for
a period of sixty (60) days by action of any governmental agency having
jurisdiction thereof, from conducting its operations at the Airport,
regardless of the fault of the User; or
25.1.8 Any lien is filed against the Space because of any act or omission of
the User and is not removed within forty-five (45) days after notice to
the User thereof; or
25.1.9 The User shall fail duly and punctually to pay the Fees or to make any
other payment required hereunder when due to Pan American and shall
persist in its failure for a period of ten (10) days following the
receipt of written notice of such default from Pan American; or
25.1.10 The User shall fail to keep, perform and observe each and every other
promise and agreement set forth in this Agreement on its part to be
kept, performed, or observed, within ten (10) days after receipt of
notice of default thereunder from Pan American (except where
fulfillment or its obligation requires activity over a period of time,
and the User shall have commenced substantially to perform whatever may
be required for fulfillment within ten (10) days after receipt of
notice and continues diligently such substantial performance without
interruption except for causes beyond its control); or
25.1.11 There shall be an occurrence of any of the events of default resulting
in termination of any other use and occupancy agreements or permits
between the User and Pan American at the Airport.
25.2 If any of the events enumerated in the above subsections of this
Section shall occur prior to the effective date of this Agreement, the
User shall not be entitled to enter into possession of the Space, and
Pan American upon the occurrence of any such event, or at any time
thereafter during the continuance thereof by twenty-four (24) hours'
notice may cancel this Agreement, such cancellation to be effective
upon the date specified in such notice.
19
25.3 No acceptance by Pan American of fees, charges, or other payments in
whole or in part for any period or periods after a default of any of
the terms, agreements and conditions hereof to be performed, kept or
observed by the User shall be deemed a waiver of any right on the part
of Pan American to terminate this Agreement.
25.4 No waiver by Pan American of any default on the part of the User in
performance of any of the terms, covenants or conditions hereof to be
performed, kept or observed by the User shall be or be construed to be
a waiver by Pan American, of any other or subsequent default in
performance of any of the valid terms, agreements and conditions.
25.5 The rights of termination described above shall be in addition to any
other rights of termination provided in this Agreement and in addition
to any rights and remedies that Pan American would have at law or in
equity consequent upon any breach of this Agreement by the User, and
the exercise by Pan American of any right of termination shall be
without prejudice to any other such rights and remedies, except that in
the event of termination pursuant to the portion of the subsection
above of this Section reading "after exhausting or abandoning any right
of further appeal, the User shall be prevented for a period of sixty
(60) days by action of any governmental agency having jurisdiction
thereof, from conducting its operations at the Airport, regardless of
the fault of the User," the sole right of Pan American shall be a right
of termination.
26. Survival of the Obligations of the User
26.1 In the event that the Agreement shall have been terminated in
accordance with a notice of termination as provided in the Section
entitled "Termination by Pan American" hereof, or in the event that Pan
American has re-entered, regained or resumed possession of the Space in
accordance with the provisions of the Section entitled "Right of
Re-Entry" hereof, all the obligations of the User under this Agreement
shall survive such termination or cancellation, re-entry, regaining or
resumption of possession and shall remain in full force and effect for
the full term of this Agreement, and the amount or amounts of damages
or deficiency shall become due and payable to Pan American to the same
extent, at the same time or times, and in the same manner as if no
termination, cancellation, re-entry, regaining or resumption of
possession had taken place. Pan American may maintain separate actions
each month to recover the damage or deficiency then due or at its
option and at any time may xxx to recover the full deficiency, for the
entire unexpired term of the Agreement.
26.2 The amount of damages for the period of time subsequent to termination
or cancellation (or re-entry, regaining or resumption of possession) on
account of the User's Fee obligations, shall be the sum of the
following:
26.2.1 The amount of the total of all installments of fees pursuant to the
Section entitled "Fees to Pan American" hereof, less the installments
thereof payable prior to the effective date of termination except that
the credit to be allowed for the installment
20
payable on the first (1st) day of the month in which the termination is
effective shall be prorated for the part of the month the Agreement
remains in effect on the basis of the total days in the month; and an
amount equal to all expenses incurred by Pan American in connection
with regaining possession, restoring the Space, acquiring a User for
the Space, legal expenses (including but not limited to attorneys'
fees), putting the Space in order including, without limitation to,
cleaning, redecorating (on failure of the User to restore), maintenance
and brokerage fees.
27. Use Subsequent to Cancellation or Termination
27.1 Pan American, upon termination or cancellation pursuant to the Section
entitled "Termination by Pan American" of this Agreement, or upon any
re-entry, regaining or resumption of possession pursuant to the Section
entitled "Right of Re-Entry" of this Agreement, may occupy the Space or
may enter into an agreement with another User and shall have the right
to permit any person, firm or corporation to enter upon the Space and
use the same. Such use may be part only of the Space or of the entire
Space or a part thereof, together with other space, and for a period of
time the same as or different from the balance of the term hereunder
remaining, and on terms and conditions the same as or different from
those set forth in this Agreement. Pan American shall also, upon said
termination or cancellation, or upon said re-entry, regaining or
resumption of possession, have the right to repair and to make
structural or other changes in the Space, including changes which alter
the character of the Space and the suitability thereof for the purposes
of the User under this Agreement, without affecting, altering or
diminishing the obligations of the User hereunder.
27.2 In the event either of use by others or of any actual use and occupancy
by Pan American, there shall be credited to the account of the User
against its survived obligations hereunder any net amount remaining
after deducting from the amount actually received from any User,
licensee, permittee or other occupier in connection with the use of the
said Space or portion thereof during the balance of the term of use and
occupancy as the same is originally stated in this Agreement, or from
the market value of the occupancy of such portion of the Space as Pan
American may itself during such period actually use and occupy, less
all expenses, costs and disbursements incurred or paid by Pan American
in connection therewith.
27.3 No such use and occupancy shall be or be construed to be an acceptance
of a surrender of the Space, nor shall such use and occupancy
constitute a waiver of any rights of Pan American hereunder. Pan
American will use its best efforts to minimize damages to User under
this Section commensurate with its obligations under the Basic
Agreement.
28. Remedies to be Non-Exclusive
28.1 Except where otherwise specifically provided, all remedies provided in
this Agreement shall be deemed cumulative and additional and not in
lieu of or exclusive of each other or of any other remedy available to
either party at law or in equity.
21
29. Limitation of Rights and Privileges Granted
29.1 No exclusive rights at the Airport are granted by this Agreement and no
greater rights or privileges with respect to the use of the Space or
any part thereof are granted or intended to be granted to the User by
this Agreement, or by any provision thereof, than the rights and
privileges expressly and specifically granted hereby.
30. Option for Renewal
30.1 The User shall have the right to extend this Agreement for an
additional period of (5) years ("extended term") on the same terms and
conditions except for fees and this option, upon condition that:
30.1.1 The User shall notify Pan American of its desire to so extend this
Agreement on or before December 31, 1989; and
30.1.2 At both the date of receipt of notice to Pan American and on January 1,
1991:
30.1.3 the User shall be in possession of and occupying the Space under this
Agreement,
30.1.4 the User shall not be under notice of termination from Pan American,
and
30.1.5 the User shall not be in default in the performance of any of the
terms, covenants and agreements contained herein and to be performed by
the User.
30.2 Upon the date the option shall have become effective and throughout the
extended term User shall pay to Pan American the following fees:
30.2.1 A basic annual fee of Two Hundred Thousand Twenty Two Dollars and
Eighty Four Cents ($200,022.84) multiplied by a fraction the numerator
of which shall be all Urban Consumers of the Bureau of Labor Statistics
of the United States Department of Labor, all items, Selected Large
Cities for the New York - Northeastern New Jersey area (hereinafter
called "the CPI") as published for the month of December 1990 and the
denominator of which shall be the CPI published for the month of June
1985.
30.2.2 In computing the basic annual fee for the extended term, in no event
shall the basic annual fee be less than Two Hundred Thousand Twenty Two
Dollars and Eight Four Cents ($200,022.84).
30.2.3 The basic annual fee for the extended term as computed in Section
30.2.1 above shall be payable in equal monthly installments each and
every month throughout the extended term.
22
31. Removal of Personal Property
31.1 The User shall have the right at any time during the term of this
Agreement to remove its equipment, inventories, removable fixtures and
other personal property from the Space.
31.2 If the User shall fail to remove its property on or before the
termination or expiration of the term, Pan American may remove such
property to a public warehouse for deposit or retain the same in its
own possession, all without insurance, and sell the same at public
auction, the proceeds of which shall be applied first, to the expense
of removal, storage and sale; second, to any sums owed by the User to
Pan American, with any balance remaining to be paid to the User, but if
the expenses of such removal, storage and sale shall exceed the
proceeds of sale, the User shall pay such excess to Pan American upon
demand.
32. Brokerage
32.1 The User represents and warrants that no broker has been concerned on
its behalf in the negotiation of this Agreement and that there is no
such broker who is or may be entitled to be paid a commission in
connection therewith. The User shall indemnify and save harmless Pan
American its subsidiaries and affiliates of and from any claim for
commission or brokerage made by any such broker when such claim is
based in whole or in part upon any act or omission of the User, whether
or not such claims, demands, causes of action, liabilities, etc., are
made or asserted before or after termination or expiration of this
Agreement (to include reasonable attorney's and other professional
fees).
33. Notices
33.1 Except where expressly required or permitted herein to be oral, all
notices, requests, consents and approvals required to be given to or by
either party shall be in writing, and all such notices and requests
shall be personally delivered to the duly designated officer or
representative of such party or delivered to the office of such officer
or representative during regular business hours, or forwarded to him or
to the party at such address by certified mail.
Notices to Pan American shall be directed to:
J. Xxxxx Xxxxx
Authorized Representative
Pan Am World Services
Pan Am Building
Teterboro Airport, New Jersey 07608
23
with copy to:
Airport Manager
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, Xxx Xxxxxx 00000
Notices to User shall be directed to:
Manager, Aviation Transportation
Texaco, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
34. Construction and Application of Terms
34.1 The Section and subsection headings, if any, in this Agreement, are
inserted only as a matter of convenience and for reference and in no
way define, limit or describe the scope of intent of any provision
hereof.
35. Non-Liability of Individuals
35.1 Neither the Directors of Pan American, its subsidiaries and affiliates,
or User nor any officers, agents or employees thereof, shall be charged
personally by the other with any liability or held liable to the other
under any term or provision of this Agreement, or because of its
execution or attempted execution, or because of any breach or attempted
or alleged breach thereof.
36. Abatement
36.1 If at any time the User shall become entitled to abatement of Fees by
the provisions of this Agreement or otherwise, the abatement of Fees
shall be made on an equitable basis giving effect to the amount and
character of the Space, the use of which is denied the User as compared
with the entire Space.
37. Port Authority Consent
37.1 This Agreement shall become effective upon the execution hereof by all
parties hereto and the execution of a Consent Agreement between and
among the Port Authority, Pan American, and User.
38. Entire Agreement
38.1 This Agreement consists of the following:
Sections 1 through 38 and Exhibit A.
24
38.2 The foregoing constitutes the entire Agreement of the parties on the
subject matter hereof. It may not be changed, modified, discharged or
extended except by written instrument duly executed by Pan American and
the User. The User agrees that no representations or warranties shall
be binding upon Pan American unless expressed in writing in this
Agreement.
25
IN WITNESS WHEREOF, the parties hereto have executed these presents as of the
day and year first above written.
PAN AMERICAN WORLD AIRWAYS, INC.
ATTEST:
/s/ Illegible
------------------------------- By /s/ Xxxxx X. Xxxxx
----------------------------------
Title: Authorized Representative
------------------------------
TEXACO INC.
/s/ X. Xxxxxxxx
------------------------------------
(User)
ATTEST:
/s/ X. Xxxx
------------------------------- By General Manager
Assistant Secretary ----------------------------------
Title: Corporate Real Estate
Department
------------------------------
26
Assignment Agreement
TA-191
CONSENT AGREEMENT
THIS AGREEMENT, dated as of , 1988, by and among THE PORT AUTHORITY OF NEW
YORK AND NEW JERSEY (hereinafter called "the Port Authority") and PAN AMERICAN
WORLD AIRWAYS, INC. (hereinafter called "the Airport Operator"), and TEXACO INC,
a Delaware corporation (hereinafter called "the Assignor") and ATLANTIC AVIATION
CORPORATION, a Delaware corporation (hereinafter called "the Assignee"),
WITNESSETH, THAT:
WHEREAS, the Port Authority and the Airport Operator have heretofore entered
into an agreement dated September 19, 1967 (which agreement, as the same has
been or may be supplemented and amended, is hereinafter called "the Main
Agreement") pursuant to which the Airport Operator is operating and using
Teterboro Airport (hereinafter called "the Airport"); and
WHEREAS, the Airport Operator entered into a Use and Occupancy Agreement with
the Assignor dated January 1, 1986 designated TA-191 and the Consent Agreement
in connection therewith (which Use and Occupancy Agreement as heretofore
supplemented and amended, is hereinafter referred to as "the Agreement" and
together with the said Consent Agreement, collectively hereinafter referred to
as the "Assigned Agreements").
WHEREAS, the Assignor proposes to assign the Agreement to the Assignee in
accordance with an "Assignment Agreement", a copy of which is attached hereto
and made a part hereof and hereafter referred to as "the Assignment Agreement",
subject to the consent of the Airport Operator and the Port Authority, and the
execution of a Consent Agreement by and among the Airport Operator, the
Assignor, the Assignee and the Port Authority pursuant to and in accordance with
the terms of the Main Agreement.
NOW, THEREFORE, for and in consideration of the mutual agreements herein
contained, the Port Authority, the Airport Operator, the Assignor and the
Assignee hereby agree effective as of June 1, 1988 as follows:
1. On the terms and conditions hereinafter set forth, the Port Authority
and the Airport Operator consent to the Assignment Agreement.
2. The execution of this instrument by the Airport Operator and the Port
Authority does not constitute a representation by them that the
Assignor has performed or fulfilled every obligation required by the
Agreement; as to such matters the Assignee agrees to rely solely upon
the representations of the Assignor.
3. The Agreement shall terminate, without notice to the Assignee, on the
day preceding the date of expiration or earlier termination of the Main
Agreement, or on such earlier date as may be provided for in the
Agreement.
1
4. Neither this Consent Agreement, nor anything contained herein nor the
consent granted hereunder shall constitute or be deemed to constitute a
consent to nor shall they create an inference or implication that there
has been consent to any enlargement, variation or change in the rights,
powers and privileges granted to the Airport Operator under the Main
Agreement, nor consent to the granting or conferring of any rights,
powers or privileges to the Assignee as may be provided by the
Agreement if not granted to the Airport Operator under the Main
Agreement, nor shall the same impair or change any of the duties,
liabilities and obligations imposed on the Airport Operator under the
Main Agreement. The Assignment Agreement is an agreement between the
Assignor and the Assignee with respect to the various matters set forth
therein. Neither this Consent Agreement nor anything contained herein
nor the consent granted hereunder shall apply and pertain as between
the Airport Operator and the Port Authority, it being understood that
the terms, provisions, covenants, conditions and agreements of the Main
Agreement shall, in all respects, be controlling, effective and
determinative. The specific mention of or reference to the Port
Authority in any part of the Agreement or the Assignment Agreement
including, without limitation thereto, any mention of any consent or
approval of the Port Authority now or hereafter to be obtained, shall
not be or be deemed to create an inference that the Port Authority has
granted its consent or approval thereto under this Consent Agreement or
shall thereafter grant its consent or approval thereto or that the
subject matter as to which the consent or approval applies has been or
shall be approved or consented to in principle or in fact or that the
Port Authority's discretion pursuant to the Main Agreement as to any
such consents or approvals shall in any way be affected or impaired.
The lack of any specific reference in any provisions of the Assignment
Agreement to Port Authority approval or consent shall not be deemed to
imply that no such approval or consent is required and the Main
Agreement shall in all respects be controlling, effective and
determinative.
No provision of the Assigned Agreements including, but not limited to,
those imposing obligations on the Assignee with respect to laws, rules,
regulations, taxes, assessments and liens, shall be construed as a
submission or admission by the Port Authority that the same could or
does lawfully apply to the Port Authority, nor shall the existence of
any provision of the Assigned Agreements covering actions which shall
or may be undertaken by the Assignee or the Airport Operator be deemed
to imply or infer that Port Authority consent or approval thereto
pursuant to the Main Agreement will be given or that Port Authority
discretion with respect thereto will in any way be affected or
impaired. References in this paragraph to specific matters and
provisions shall not be construed as indicating any limitation upon the
rights of the Port Authority with respect to its discretion as to the
granting or withholding approvals or consents as to other matters and
provisions in the Assigned Agreements or the Assignment Agreement which
are not specifically referred to herein.
5. The Assignee, in its operations under or in connection with the
Assigned Agreements shall be subject to the applicable terms,
provisions, covenants and conditions of the Main Agreement. Without in
any way affecting the obligations of the Airport Operator under the
Main Agreement and under this Consent Agreement, all acts and omissions
of the Assignee shall be deemed to be acts and omissions of the Airport
Operator under the Main Agreement, but notwithstanding the foregoing
shall not constitute a breach thereof
2
if, except for causes beyond the control of the Airport Operator, it
shall have commenced to remedy said default within twenty (20) days
after receipt of notice thereof from the Port Authority and continues
diligently to pursue such remedy.
6. Neither the Assigned Agreements nor the Assignment Agreement shall be
changed, modified, discharged or extended except by written instrument
duly executed by the parties thereto and only with the express prior
written consent of the Port Authority.
7. If the Airport Operator shall at any time be in default of its
obligations under the Main Agreement to make payments to the Port
Authority, or if there shall occur at any time an event involving
insolvency, bankruptcy, arrangement or reorganization of the Airport
Operator which under the terms of the Main Agreement would constitute
an event the occurrence of which grants the Port Authority the right to
terminate the Main Agreement, and provided the same has not been cured
within the time granted therefor, if any, under the Main Agreement, the
Assignee shall on demand of the Port Authority pay directly to the Port
Authority any fee or other amount due to the Airport Operator. No such
payment shall relieve the Airport Operator from any obligations under
the Main Agreement or under this Consent Agreement but all such
payments shall be credited against the obligations of the Airport
Operator and of the Assignee for each payment or part thereof.
8. The granting of the consent hereunder by the Port Authority shall not
be or be deemed to operate as a waiver of consent to any subsequent
agreement with respect to privileges at the Airport (by the Airport
Operator or by the Assignee) or to any assignment of the Main Agreement
or the Assigned Agreements or of any rights under either of them,
whether in whole or in part.
9. In the event of any substantial default by the Assignee under any of
the provisions of this Consent Agreement and said default has not been
cured within thirty (30) days after the Port Authority has served a
notice of such default upon the Airport Operator and the Assignee, the
Port Authority shall have the right to revoke the consent granted
hereunder upon thirty (30) days' written notice to the Airport Operator
and the Assignee, but no such revocation shall be deemed to affect the
Main Agreement and the continuance thereof, it being understood,
moreover, that the foregoing shall not be deemed to affect or limit any
rights of the Port Authority under the Main Agreement or the Assigned
Agreements. In the event of the revocation of the consent hereunder as
hereinabove provided, the Airport Operator shall immediately terminate
the Agreement.
10. Reference herein to the Assignee shall mean and include the Assignee,
its officers, agents, employees and also others on the space covered by
the Agreement or on the Airport with the consent of the Assignee.
11. Neither the Commissioners of the Port Authority nor any of them, nor
any officer, agent or employee thereof shall be held personally liable
to the Airport Operator, to the Assignor or to the Assignee under any
term or provision of this Consent Agreement or because of its execution
or because of any breach or alleged breach hereof.
3
12. Neither the Directors of the Airport Operator, nor any of them, nor any
officer, agent or employee thereof shall be personally liable to the
Assignor or the Assignee under any term or provision of this Consent
Agreement or because of its execution or because of any breach or
alleged breach thereof.
4
CERTIFICATE OF SECRETARY
I, Xxxxxxxx X. Xxxxxx, XX, certify that I am the Secretary of the
corporation named in the attached agreement; that Xxxxxx X. Xxxxxx, who signed
said authorized agreement on behalf of the corporation was then the Senior Vice
President and Treasurer of said corporation; that said agreement was duly signed
for and in behalf of said corporation by authority of its governing body, and is
within the scope of its corporate powers.
/s/ Xxxxxxxx X. Xxxxxx, XX
-------------------------------------------
Xxxxxxxx X. Xxxxxx, XX
(Corporate Seal)
STATE OF DELAWARE )
) SS.
NEW CASTLE COUNTY )
On this 8th day of July, One Thousand Nine Hundred and Eighty Eight
before me, Xxxxxxxx X. Xxxx, a Notary Public in and for the County of New
Castle, State of Delaware, duly commissioned and qualified, personally appeared
Xxxxxxxx X. Xxxxxx, XX, known to me to be the person described in and whose name
is subscribed to the attached instrument, and acknowledged to me that he
executed the instrument for the purposes and consideration therein stated.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my office
seal, at my office the day and year in this certificate first written above.
/s/ Xxxxxxxx X. Xxxx
-------------------------------------------
Notary Public
My Commission Expires:
August 27, 1990
1
I, Xxxxxxxxx Xxxxxxx, certify that I am the Assistant Secretary of the
corporation named in the attached agreement; that Les Gertach who signed
said authorized agreement on behalf of the corporation was then the
__________________ of said corporation; that said agreement was duly signed for
and in behalf of said corporation by authority of its governing body, and is
within the scope of its corporate powers.
/s/ Xxxxxxxxx Xxxxxxx
-------------------------------------------
(Signature)
(Corporate Seal)
XXXXX XX XXX XXXX
XXXXXX XX XXXXXXXXXXX
Xx this 2nd day of August, One Thousand Nine Hundred and Eighty Eight
before me, Lerodie X. Xxxxxxxxx, a Notary Public in and for the County of
Westchester, State of New York, duly commissioned and qualified, personally
appeared Xxxxxxxxx Xxxxxxx, known to me to be the person described in and whose
name is subscribed to the attached instrument, and acknowledged to me that he
executed the instrument for the purposes and consideration therein stated.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my office
seal, at my office the day and year in this certificate first written above.
By: /s/ Lerodie X. Xxxxxxxxx
---------------------------------------
My Commission Expires:
March 30, 1989
1
ASSIGNMENT AGREEMENT
This Assignment Agreement made this 8th day of July, 1988, between
ATLANTIC AVIATION CORPORATION a Delaware corporation, with its principal place
of business at 000 Xxxxx XxXxxx Xxxxxxx, Xxxxxxx Xxxxxxxxxx Airport, New Castle,
Delaware 19720 ("Atlantic") and TEXACO INC., a Delaware corporation, with an
office at 0000 Xxxxxxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000 ("Texaco").
A. Texaco uses and occupies space at Teterboro Airport located in
Bergen County, New Jersey, pursuant to a Use and Occupancy Agreement with Pan
American World Airways, Inc. bearing file designation TA 191, and the Consent
Agreement in connection with the foregoing, which Use and Occupancy Agreement,
together with said Consent Agreement, are hereafter collectively referred to as
(the "Agreement").
B. Atlantic uses and occupies space at the Airport adjacent to
the space occupied by Texaco and wishes to expand the area occupied by it.
C. Texaco and Atlantic have agreed to an assignment of the
Agreement.
NOW, THEREFORE, Texaco and Atlantic agree as follows:
1. Texaco assigns to Atlantic all of its right, title and
interest in and to the Agreement, a true, correct and complete copy of which
with all amendments thereto is attached to this Assignment Agreement as Exhibit
A.
2. Atlantic accepts the assignment and agrees to perform and
observe all the terms, conditions and obligations in the Agreement which were
imposed on Texaco, as though Atlantic were the original signatory to the
Agreement, and to hold harmless and indemnify Texaco from any claims, demands or
actions brought against it by reason of the failure of Atlantic to observe and
perform the terms, conditions and obligations of the Agreement.
3. Texaco warrants that as of the date Atlantic occupies the
space that the Agreement is in full force and effect; it is not in default;
Texaco has committed no act or omission that could give rise to a default and
that all fees required to be paid have been paid through April 30, 1988.
4. This Assignment Agreement is subject to the approval of Pan
American World Airways, Inc. ("Pan American") and The Port Authority of New York
and New Jersey ("Port Authority"). Atlantic will submit the Assignment Agreement
to Pan Am for approval.
5. Texaco shall use its best efforts to vacate the space on or
prior to June 1, 1988, but Texaco shall incur no liability if for any reason it
is unable to do so.
1
IN WITNESS WHEREOF, the parties have executed this Assignment Agreement
as of the date first above written.
TEXACO INC.
ATTEST: By: /s/ Xxx Xxxxxxx
------------------------------
/s/ Xxxxxxxxx Xxxxxxx
------------------------------- Title: Manager Aviation Transport
---------------------------
Secretary
ATLANTIC AVIATION CORPORATION
ATTEST: By: /s/ Illegible
------------------------------
/s/ Xxxxxxxx X. Xxxxxx, XX
------------------------------- Title: Illegible
Secretary ---------------------------
2
CERTIFICATE OF SECRETARY
I, Xxxxxxxx X. Xxxxxx, XX, certify that I am the Secretary of the
corporation named in the attached agreement; that Xxxxxx X. Xxxxxx, who signed
said authorized agreement on behalf of the corporation was then the Senior Vice
President and Treasurer of said corporation; that said agreement was duly signed
for and in behalf of said corporation by authority of its governing body, and is
within the scope of its corporate powers.
/s/ Xxxxxxxx X. Xxxxxx, XX
-------------------------------------------
Xxxxxxxx X. Xxxxxx, XX
(Corporate Seal)
STATE OF DELAWARE )
) SS.
NEW CASTLE COUNTY )
On this 8th day of July, One Thousand Nine Hundred and Eighty Eight
before me, Xxxxxxxx X. Xxxx, a Notary Public in and for the County of New
Castle, State of Delaware, duly commissioned and qualified, personally appeared
Xxxxxxxx X. Xxxxxx, XX, known to me to be the person described in and whose name
is subscribed to the attached instrument, and acknowledged to me that he
executed the instrument for the purposes and consideration therein stated.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my office
seal, at my office the day and year in this certificate first written above.
/s/ Xxxxxxxx X. Xxxx
-------------------------------------------
Notary Public
My Commission Expires:
August 27, 1990
1
I, Xxxxxxxxx Xxxxxxx, certify that I am the Assistant Secretary of the
corporation named in the attached agreement ("Texaco Inc."); that Xxx Xxxxxxx
who signed said authorized agreement on behalf of the corporation was then the
Manager of Aviation Transport of said corporation; that said agreement was duly
signed for and in behalf of said corporation by authority of its governing body,
and is within the scope of its corporate powers.
/s/ Xxxxxxxxx Xxxxxxx
-------------------------------------------
(Signature)
(Corporate Seal)
XXXXX XX XXX XXXX
XXXXXX XX XXXXXXXXXXX
Xx this 2nd day of August, One Thousand Nine Hundred and Eighty Eight
before me, _____ X. Xxxxxxxxx, a Notary Public in and for the County of
Westchester; State of New York, duly commissioned and qualified, personally
appeared Xxxxxxxxx Xxxxxxx, known to me to be the person described in and whose
name is subscribed to the attached instrument, and acknowledged to me that he
executed the instrument for the purposes and consideration therein stated.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my office
seal, at my office the day and year in this certificate first written above.
By: /s/ Lerodie X. Xxxxxxxxx
----------------------------------------
My Commission Expires:
March 30, 1989
1
Teterboro Airport
Use & Occupancy Agreement
Agreement TA-191
Supplement No. 1
Supplement Agreement
THIS AGREEMENT, made this 23rd day of January, 1995 by and
between XXXXXXX CONTROLS WORLD SERVICES INC. (hereinafter called "Xxxxxxx
Controls"), a Florida State Corporation, and ATLANTIC AVIATION CORPORATION, a
Delaware corporation (hereinafter called "the User").
WITNESSETH, THAT:
WHEREAS, The Port Authority of New York and New Jersey
(hereinafter called "the Port Authority"), is the owner of Teterboro Airport
located in the Boroughs of Teterboro, Moonachie and Xxxxxxxxx Heights and in the
Township of Lyndhurst, County of Bergen in the State of New Jersey; and
WHEREAS, Xxxxxxx Controls is the operator of Teterboro Airport
and has the right to operate and use the Airport as successor - assignee to an
agreement between Pan American World Airways, Inc ("Pan American") and the Port
Authority dated September 19, 1967 (Basic Agreement") ; and
WHEREAS, Pan American entered into a Use and Occupancy
Agreement with Texaco, Inc. dated as of January 1, 1986 designated TA-191 and a
Consent Agreement in connection therewith (which Use and Occupancy Agreement is
hereinafter referred to as the "the Agreement"); and
WHEREAS, the Agreement was assigned to Atlantic Aviation
Corporation pursuant to an Assignment Agreement (hereinafter called the
"Assignment Agreement") between Texaco Inc. and Atlantic Aviation Corporation
dated July 8, 1988; and
WHEREAS, the User and Xxxxxxx Controls desire to amend and
extend the term of the Agreement as hereinafter provided.
NOW, THEREFORE, in consideration of the mutual agreements and
respective promises herein contained, and made by the parties hereto, it is
mutually agreed as follows:
1. Section 1 "Term: The expiration date of December 31, 1990, as
revised by Letter Renewal Notice dated September 29, 1989,
which revised the expiration date to December 31, 1995 is now
changed to read "December 30, 1999".
2. Section 3 "Fees" shall be amended by adding a new
subparagraphs 3.2 as follows:
"3.2 Beginning January 1, 1996, and continuing until December
30, 1999, the User shall pay to Xxxxxxx Controls a monthly fee
whichever is the greater of:
1
(i) Twenty Five Thousand Dollars and Zero Cents
($25,000.00); or
(ii) Sixteen Thousand Six Hundred Sixty Eight
Dollars and Fifty Cents ($16,668.50)
multiplied by a fraction, the numerator of
which shall be the CPI (as hereinafter
defined) published for the month of
December, 1995 and the denominator shall be
the CPI published for the month of June,
1985.
3. Except as provided herein, all the terms, covenants and
conditions of the Agreement remain and shall be in full force
and effect.
4. Neither the Directors of Xxxxxxx Controls, its subsidiaries
and affiliates, nor any officer or employee thereof shall be
charged personally by the user with any liability or held
liable to it under any term or provision of this Supplement,
or because of its execution or attempted execution, or because
of any breach or attempted or alleged breach thereof.
IN WITNESS WHEREOF, the parties hereto have executed these presents as of the
day and year first above written.
ATTEST: XXXXXXX CONTROLS WORLD SERVICES INC.
/s/ Illegible By: /s/ Illegible
---------------------------------- -----------------------------------
Title: Illegible Title: Vice President
----------------------------
ATTEST: ATLANTIC AVIATION CORPORATION
/s/ X.X. Xxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxx, XX
---------------------------------- -----------------------------------
Title: Illegible Title: Sr. VP
---------------------------- --------------------------------
2
CONSENT AGREEMENT
THIS AGREEMENT, dated as of January 23, 1995 by and among THE
PORT AUTHORITY OF NEW YORK AND NEW JERSEY (herein after called "The Port
Authority") and XXXXXXX CONTROLS WORLD SERVICES INC. (hereinafter called "the
Airport Operator") and ATLANTIC AVIATION CORPORATION (hereinafter called "the
User"),
WITNESSETH, THAT:
WHEREAS, the Port Authority and the Airport operator have
heretofore entered into an agreement dated September 19, 1967 (which agreement,
as the same has been or may hereafter be supplemented and amended, is
hereinafter called "the Main Agreement"), pursuant to which the Airport Operator
is operating and using Teterboro Airport (hereinafter called "the Airport"); and
WHEREAS, pursuant to and in accordance with the terms of the
Main Agreement, the Airport Operator and the User, have entered into a Use and
Occupancy Agreement dated January 1, 1986 with the consent of the Port Authority
which Use and Occupancy Agreement has been designated TA-191; and
WHEREAS, the Port Authority, the Airport Operator and the User
entered into a Consent Agreement dated as of January 1, 1986 (hereinafter called
"the Use and Occupancy Consent Agreement"), wherein the Port Authority gave its
consent to the Use and Occupancy Agreement; and
WHEREAS, the Airport Operator and the User desire to
supplement the above referenced Use and Occupancy Agreement, a copy of which
Supplement is attached hereto, made a part hereof and hereafter called "the
supplement", subject to the consent of the Port Authority and the execution of a
Consent Agreement by and among the Airport Operator, the User and the Port
Authority.
NOW, THEREFORE, for and in consideration of the covenants and
mutual agreements contained, the Port Authority, the Airport Operator and the
User hereby agree effective as of the effective date of the Supplement as
follows:
1. On the terms and condition hereinafter set forth, the Port
Authority consents to the Supplement.
2. It is hereby specifically agreed that all of the terms and
provisions of the Use and Occupancy Consent Agreement shall
apply with like effect to this consent to the Supplement as
though each and every such term and such provision were
incorporated herein.
3. Neither the Commissioner of the Port Authority nor any of
them, nor any officer, agent or employee thereof shall be held
personally liable to the Airport Operator or to the User under
any term or provision of this Consent Agreement to the
Supplement or because of its execution or because of any
breach or alleged breach hereof.
1
IN WITNESS WHEREOF, the Port Authority, the Airport Operator and the User have
executed these presents.
PORT AUTHORITY OF NEW YORK AND
NEW JERSEY
ATTEST:
/s/ Xxxx X. Xxxxxx By: /s/ Illegible
---------------------------------- -----------------------------------
Title: Acting Secretary Title: /s/ Illegible
---------------------------- --------------------------------
XXXXXXX CONTROLS WORLD SERVICES INC.
ATTEST:
/s/ Illegible By: /s/ Illegible
---------------------------------- -----------------------------------
Title: Illegible Title: Vice President
---------------------------- --------------------------------
ATLANTIC AVIATION CORPORATION
(User)
ATTEST:
/s/ X.X. Xxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxx, XX
---------------------------------- -----------------------------------
Title: Illegible Title: Sr. VP
---------------------------- --------------------------------
2
Teterboro Airport
Use & Occupancy Agreement
Agreement TA-191
Supplement No. 2
Supplement Agreement
THIS AGREEMENT, dated this 27 day of May, 1999 by and between
XXXXXXX CONTROLS WORLD SERVICES INC. (hereinafter called "Xxxxxxx Controls"), a
Florida Corporation, and ATLANTIC AVIATION CORPORATION, a Delaware corporation
(hereinafter called "the User").
WITNESSETH, THAT:
WHEREAS, The Port Authority of New York and New Jersey
(hereinafter called "the Port Authority"), is the owner of Teterboro Airport
located in the Boroughs of Teterboro, Moonachie and Xxxxxxxxx Heights and in the
Township of Lyndhurst, County of Bergen in the State of New Jersey; and
WHEREAS, Xxxxxxx Controls is the operator of Teterboro Airport
and has the right to operate and use the Airport as successor - assignee to an
agreement between Pan American World Airways, Inc ("Pan American") and the Port
Authority dated September 19, 1967 ("Basic Agreement"); and
WHEREAS, Pan American entered into a Use and Occupancy
Agreement with Texaco, Inc. dated as of January 1, 1986 and designated TA-191
and a Consent Agreement in connection therewith (which Use and Occupancy
Agreement, as the same has heretofore been supplemented or amended, and Consent
Agreement are hereinafter collectively referred to as the "Agreement"); and
WHEREAS, the Agreement was assigned to the User pursuant to an
Assignment Agreement between Texaco Inc. and the User dated July 8, 1988 and a
Consent Agreement in connection therewith (which Assignment Agreement and
Consent Agreement are hereinafter collectively called the "Assignment
Agreement"); and
WHEREAS, the User, in accordance with the terms of Supplement
No. 4 to Use and Occupancy Agreement designated TA-121, has agreed to the
demolition of the facility known as Hangar 2 and the construction of a
replacement facility; and
WHEREAS, the User and Xxxxxxx Controls desire to amend and
extend the term of the Agreement as hereinafter provided in order to provide
sufficient time to construct said replacement facility;
NOW, THEREFORE, in consideration of the mutual agreements and
respective promises herein contained and made by the parties hereto, it is
mutually agreed, effective as of the date of this Supplement, as follows:
1
1. Effective on May 31, 1999, Exhibit A to the Agreement shall be
deemed deleted and of no further effect, and reference to
"Exhibit A" in the Agreement shall be deleted and substituted
by reference "Exhibit A-1".
2. Effective on June 1, 1999, the Space under the Agreement shall
be the area set forth in hatching on Exhibit A-1, attached
hereto and made a part hereof, together with all buildings,
structures, improvements, additions and permanent
installations constructed and installed or to be constructed
and installed therein or thereon or thereunder during the
remainder of the term of this Agreement (hereinafter
collectively referred to as the "Space").
3. The parties hereby agree that the term of the Agreement shall
be extended beyond the current expiration date of December 30,
1999 to expire thirty (30) days after the completion (as
hereinafter defined) of the hangar facility as provided for in
Paragraph 3 of Supplement No. 4 to User's Use and Occupancy
Agreement bearing file No. TA-121.
4. The term "completion" shall mean the Completion Date as
defined in subsection 3.6.14 of Use and Occupancy Agreement
TA-121.
5. In the event that, upon the expiration date referenced in
Paragraph 3 above, the Space shall not be occupied by First
Aviation Services, Inc., the current user of the facility
known as Hangar 1, or if First Aviation Services, Inc. shall
have notified Xxxxxxx Controls of its intention not to occupy
Hangar 1, then, upon notice by Xxxxxxx Controls to the User
the term of the Agreement shall be extended to expire upon the
expiration date of Use and Occupancy Agreement TA-121.
6. In the event that Taxiway P at the Airport is relocated, then,
upon notice by Xxxxxxx Controls to the User that said Taxiway
has been decommissioned, Area 2 as shown on Exhibit A-1 shall
be added to and become part of the Space as herein defined.
The User shall proceed expeditiously and with all reasonable
diligence, in accordance with Section 14 of the Agreement, to
pave and construct an aircraft parking ramp on said Area 2.
7. Section 3 "Fees" shall be further amended by adding new
subparagraphs 3.3, 3.4, 3.5 and 3.6 as follows:
"3.3 Beginning on the effective date of Supplement No. 2
to the Agreement and continuing until December 31,
1999, the User shall pay to Xxxxxxx Controls a
monthly fee of Twenty-seven Thousand Nine Hundred
Thirty-three Dollars and One Cent ($27,933.01), as
detailed on Exhibit B as Area 1, attached hereto and
made a part hereof.
3.4 Effective January 1, 2000 the User shall pay to
Xxxxxxx Controls a monthly fee of Thirty-four
Thousand Two Hundred Twenty-one Dollars and
Fifty-three Cents ($34,221.53), multiplied by a
fraction, the numerator of which shall be the CPI as
published for the month of December 1999
2
and the denominator of which shall be the CPI
published for the month of December 1998. In
computing the monthly fee payable January 1, 2000 in
no event shall the monthly fee be less than
Thirty-four Thousand Two Hundred Twenty-one Dollars
and Fifty-three Cents ($34,221.53).
3.4.1 In the event that Area 2 as shown on Exhibit A-1 has
become part of the Space, effective January 1, 2000
the User shall pay to Xxxxxxx Controls a total
monthly land use fee determined as follows: a total
base fee of Three Thousand Three Hundred Sixty-five
Dollars and Fifty Cents ($3,365.50) shall first be
multiplied by a fraction, the numerator of which
shall be the CPI as published for the month of
December 1999 and the denominator of which shall be
the CPI published for the month of December 1998 and
the User shall pay the product thereof on January 1,
2000 and on the first day of each and every month
thereafter . In computing the total monthly fee
payable January 1, 2000 in no event shall the monthly
fee be less than Three Thousand Three Hundred
Sixty-five Dollars and Fifty Cents ($3,365.50).
3.4.2 Effective January 1, 2001 and annually thereafter the
User shall pay to Xxxxxxx Controls a total monthly
fee for Area 1 and Area 2, if then a part of the
Space, equal to the prior year's fee multiplied by a
fraction, the numerator of which shall be the CPI as
published for the month of December of the year prior
to the affected year and the denominator of which
shall be the CPI published for the month of December
of two years prior to the affected year. In computing
the total monthly fee payable in no event shall the
monthly fee be less than the prior year's fee or be
increased by an amount greater than six percent (6%).
3.5 Xxxxxxx Controls reserves the right, at its option,
to perform a real estate appraisal of the User's
Space in the year 2009. In the event that such an
appraisal is performed, from and after January 1,
2010 the monthly fee payable by the User shall be the
greater of either (i) one twelfth of the appraised
building rate for Hangar 12 plus the appraised land
rate for the Space or (ii) the December 2009 total
monthly fee payable multiplied by a fraction, the
numerator of which shall be the CPI as published for
the month of December 2009 and the denominator of
which shall be the CPI published for the month of
December 2008. In the event that the fee calculated
in accordance with (ii) above is fifteen percent
(15%) or higher than that calculated in accordance
with (i) above, then the monthly fee payable
effective January 1, 2010 would be the greater of (a)
the fee payable January 2000 adjusted annually by 1/2
of the change in the CPI or (b) the rate calculated
per (i) above.
3.5.1 In the event that a real estate appraisal of the
User's Space is not performed in the year 2009,
effective January 1, 2010 the User shall pay to
Xxxxxxx Controls a total monthly fee equal to the fee
payable December 2009 multiplied by a fraction, the
numerator of which shall be the CPI as
3
published for the month of December 2009 and the
denominator of which shall be the CPI published for
the month of December 2008. In computing the total
monthly fee payable in no event shall the monthly fee
be less than the prior year's fee or be increased by
an amount greater than six percent (6%).
3.6 Effective January 1, 2011 and annually thereafter the
User shall pay to Xxxxxxx Controls a total monthly
fee equal to the prior year's fee multiplied by a
fraction, the numerator of which shall be the CPI as
published for the month of December of the year prior
to the affected year and the denominator of which
shall be the CPI published for the month of December
of two years prior to the effected year. In computing
the total monthly fee payable in no event shall the
monthly fee be less than the prior year's fee or be
increased by an amount greater than six percent
(6%)."
8. (a) The following Subsection 10.11 shall be added to Section
10 "Various Obligations of the User":
"10.11 The following terms shall have the following
respective meanings as used herein:
10.11.1 "Environmental Damages" shall mean any one or more of
the following: (i) the presence on, about or under
the Space of any Hazardous Substance, as hereinafter
defined, and/or (ii) the disposal, release or
threatened release of any Hazardous Substance from
the Space, and/or (iii) an Off-Space Hazardous
Substance, as hereinafter defined, and/or (iv) any
personal injury (including wrongful death) or
property damage arising out of or related to such
Hazardous Substances, and/or (v) the violation of any
Environmental Requirements, as hereinafter defined,
pertaining to such Hazardous Substances or Off-Space
Hazardous Substances, the Space and/or the activities
thereon.
10.11.2 "Environmental Requirements" and "Environmental
Requirement" shall mean all applicable present and
future laws, statues, enactments, resolutions,
regulations, rules, ordinances, codes, licenses,
permits, orders (including agreed upon consent
orders), approvals, plans, authorizations,
concessions, franchises, requirements and similar
items, of all Governmental Agencies, and all
applicable judicial, administrative, and regulatory
decrees, judgments, and orders relating to the
protection of human health or the environment, and in
the event that there shall be more than one
compliance standard, as among the various
Governmental Agencies, the standard for any of the
foregoing to be that which requires the lowest level
of a Hazardous Substance taking into account the
nature and intended use of the Space, the foregoing
to include without limitation:
4
(a) All requirements pertaining to reporting,
licensing, permitting, investigation and remediation
of emissions, discharges, releases, or threatened
releases of Hazardous Substances into the air,
surface water, groundwater, or land, or relating to
the manufacture, processing, distribution, use
treatment, storage, disposal, transport, or handling
of Hazardous Substances; and
(b) All environmental requirements pertaining to the
protection of the health and safety of employees or
the public.
10.11.4 "Hazardous Substances" and "Hazardous Substance"
shall mean and include without limitation any
pollutant, contaminant, toxic or hazardous waste,
dangerous substance, potentially dangerous substance,
noxious substance, toxic substance, flammable,
explosive or radioactive material, urea formaldehyde
foam insulation, asbestos, polychlorinated biphenyls
(PCBs), chemicals known to cause cancer or
reproductive toxicity, petroleum and petroleum
products and other substances which have been or in
the future shall be declared to be hazardous or
toxic, or the removal of which have been or in the
future shall be required, or the manufacture,
preparation, production, generation, use,
maintenance, treatment, storage, transfer, handling,
or ownership of which have been or in the future
shall be restricted, prohibited, regulated or
penalized by any Environmental Requirement.
10.11.5 "Off-Premises Hazardous Substance" shall mean the
presence of any Hazardous Substance in, about or
under property at the Airport other than the Space as
a result of the User's use and occupancy of the
Space, whether by migration, release, discharge or
any other manner, it being understood that the User
shall have the burden of proof to establish that any
migration of a Hazardous Substance from the Space was
not a result of the User's use and occupancy of the
Space.
(b) The User, prior to the execution of this Agreement, had
thoroughly examined the Space and determined it to be suitable
for the User's operations hereunder and the User restates and
continues said determination in connection with the extension
hereunder. Except as otherwise provided herein, the User
hereby agrees to assume all responsibility for any and all
risks, costs and expenses of any kind whatsoever caused by,
arising out of or in connection with the condition of the
Space whether any aspect of such condition existed prior to,
on or after the effective date of the letting of the Space,
including, without limitation, all Environmental Requirements
and Environmental Damages, as herein defined and all soil
remediation to the extent required under Environmental
Requirements, including but not limited to, remediation which
may be required as a result of discovery of any contaminants
while performing test borings or in the performance of any
construction work, and to indemnify and hold harmless the Port
Authority and Xxxxxxx Controls with respect to third party
claims for Section 8 of this Agreement TA 191, as amended.
Notwithstanding the foregoing, the
5
User shall be responsible for the removal of and remediation
of Hazardous Substances placed, or permitted or caused to be
placed, on, in or under the Space by the User or by its
employees, agents, contractors, or others using or occupying
the Space under this Agreement.
9. Port Authority's Additional Rights to Recapture or Accommodate
Others on Portions of User's Ramp Space
The User acknowledges that the Airport serves the
transportation needs of the public and that the Public
Aircraft Facilities should be utilized to the fullest extent
possible with airport users afforded fair and reasonable
access. The User also acknowledges that the following
subsections provide that if the User does not utilize its
facilities to the level set forth in stated performance
criteria such underutilized facilities may be either
recaptured by the Port Authority or required to be offered by
the User to another user in accordance with the following:
9.1 It is hereby agreed that, commencing either one year after the
effective date of the addition of Area 2 to the Space, or
January 1, 2002, whichever occurs earlier and which will be
known as the "Start Date", and for each and every calendar
year thereafter, the Port Authority may ascertain the User's
percentage share (hereinafter referred to as the "User's
Current Fuel Share") of the total aircraft fuel gallons sold
(hereinafter referred to as "Total Current Fuel Dispensed") at
the Airport for the preceding calendar year. The fuel
dispensed by the User for the year preceding the Start Date
and the year preceding each and every calendar year thereafter
during which such calculation is made shall be known as the
"User's Current Fuel Dispensed". The User's Current Fuel Share
shall be calculated by dividing the User's Current Fuel
Dispensed by the Total Current Fuel Dispensed preceding the
year during which such calculation is made. The User's Current
Fuel Share for calendar year 1998 shall hereinafter be defined
as "the Base Year Fuel Share" and is shown below:
Teterboro Airport User Fuel Share in 1998
---------------------- ------------------
Atlantic Aviation Corporation 17.8%
First Aviation Services, Inc. 16.5%
Jet Aviation of America, Inc. 34.4%
General Aviation Aircraft Services, Inc. (doing 17.0%
business as Million Air-Teterboro
Signature Flight Support-New Jersey, Inc. 14.3%
9.2 As of the Start Date and as of January 1 of each succeeding
calendar year, in the event that the User's Current Fuel Share
for the respective preceding calendar year is determined to be
at least twelve and one-half percent (12.5%) less than the
User's Base Year Fuel Share, the Port Authority shall have the
right but not the obligation, upon two (2) month's written
notice to the User, to require the User and the User hereby
agrees to make ramp space in Area 2 (hereinafter called
"Accommodation Space") available to other users, sub-users or
the Port Authority
6
in useable increments as directed by the Port Authority in the
manner and amount and to the extent set forth below:
Percentage of the User's
Current Fuel Share Divided by Ramp Space to be Made
User's Base Year Fuel Share Available in Area 2
--------------------------- -------------------
87.5% (12.5% reduction or greater) Up to 20.0% of Total
75.0% (25% reduction or greater) Up to 50.0% of Total
50.0% (50% reduction or greater) Up to 100.0% of Total
9.3 In the event the User is so notified by the Port Authority it
shall either (a) enter into a sub-use and occupancy agreement
with another user as determined by the Port Authority or (b)
enter into a surrender agreement as directed by the Port
Authority. Any such sub-use and occupancy agreement shall be
subject to the prior and continuing approval of the Port
Authority and the execution by and among the User, the
Sub-user, the Airport Operator, and the Port Authority of a
Consent Agreement in form satisfactory to the Port Authority.
Moreover, and without limiting the forgoing, the User shall
provide any and all information to the Airport Operator as may
be requested by the Airport Operator from time to time as to
all aspects of its accommodation of a Sub-user hereunder.
Nothing contained herein shall in any way affect the
discretion of the Airport Operator or the Port Authority in
granting or withholding its consent to a sub-use and occupancy
agreement.
9.4 The failure of the Port Authority to exercise its right under
this Section during any year in which it may have such a right
shall not affect, waive or limit its rights to exercise such
right in any subsequent year during any period of
underutilization. In no event will the Accommodation Space
exceed the percentages set forth above.
9.5 The User shall make such ramp space available during the
period set forth in the aforesaid notice. The Port Authority
shall consider a request by the User to restore the
Accommodation Space to the User when the User's Current Fuel
Share shall have returned to within twelve and one-half
percent (12.5%) or less of the User's Base Year Fuel Share,
provided the Accommodation Space is not then covered by a
sub-use or other agreement or at such other time as the Port
Authority deems it is in the best interest of the Airport to
restore the Accommodation Space to the User.
9.6 The User agrees that all handling, sublease, sub-use and
occupancy agreements shall be reasonable and at
non-discriminatory rates, fees and charges and shall be based
on the recovery by the User of a pro rata score share of the
User's costs of (1) operation and maintenance, (2) services
provided, and (3) the User's fees and investment in the
Accommodation Space.
10. Except as provided herein, all the terms, covenants and
conditions of the Agreement remain and shall be in full force
and effect.
7
11. Neither the Directors of Xxxxxxx Controls, its subsidiaries
and affiliates, nor any officer or employee thereof shall be
charged personally by the User with any liability or held
liable to it under any term or provision of this Supplement,
or because of its execution or attempted execution, or because
of any breach or attempted or alleged breach thereof.
IN WITNESS WHEREOF, the parties hereto have executed these presents as of the
day and year first above written.
ATTEST: XXXXXXX CONTROLS WORLD SERVICES INC.
/s/ Xxxxx Xxxxxx By: /s/ Illegible
---------------------------------- -----------------------------------
Title: Admin. Assistant Title: Vice President
---------------------------- --------------------------------
ATTEST: ATLANTIC AVIATION CORPORATION
/s/ Xxxxxxxx X. Xxxx By: /s/ XX Xxxxxxxxxx
---------------------------------- -----------------------------------
Title: Secretary Title: President
---------------------------- --------------------------------
8
CONSENT AGREEMENT
THIS AGREEMENT, dated as of May 27, 1999 by and among THE PORT
AUTHORITY OF NEW YORK AND NEW JERSEY (hereinafter called "The Port Authority")
and XXXXXXX CONTROLS WORLD SERVICES INC. (hereinafter called "the Airport
Operator") and ATLANTIC AVIATION CORPORATION (hereinafter called "the User"),
WITNESSETH, THAT:
WHEREAS, the Port Authority and the Airport Operator have
heretofore entered into an agreement dated September 19, 1967 (which agreement,
as the same has been or may hereafter be supplemented and amended, is
hereinafter called "the Main Agreement"), pursuant to which the Airport Operator
is operating and using Teterboro Airport (hereinafter called "the Airport"); and
WHEREAS, pursuant to and in accordance with the terms of the
Main Agreement, the Airport Operator and the User, have entered into a Use and
Occupancy Agreement dated January 1, 1986 and is hereinafter called the "Use and
Occupancy Agreement" which Use and Occupancy Agreement has been designated
TA-191; and
WHEREAS, the Port Authority, the Airport Operator and the User
entered into a Consent Agreement dated as of January 1, 1986 (hereinafter called
"the Use and Occupancy Consent Agreement"), wherein the Port Authority gave its
consent to the Use and Occupancy Agreement; and
WHEREAS, the Airport Operator and the User desire to
supplement the above referenced Use and Occupancy Agreement, a copy of which
Supplement is attached hereto, made a part hereof and hereinafter called "the
Supplement", subject to the consent of the Port Authority and the execution of a
Consent Agreement by and among the Airport Operator, the User and the Port
Authority;
NOW, THEREFORE, for and in consideration of the covenants and
mutual agreements hereinafter contained, the Port Authority, the Airport
Operator and the User hereby agree, effective as of the effective date of the
Supplement, as follows:
1. On the terms and condition hereinafter set forth, the Port
Authority consents to the Supplement.
2. (a) If the Main Agreement shall terminate (whether through the
expiration of its term or by earlier termination as provided
in the Main Agreement) before the expiration date of the Use
and Occupancy Agreement, the Use and Occupancy Agreement shall
terminate as hereinafter provided and, if the User is in
occupancy and using the Space, the Port Authority or a
successor airport operator selected by the Port Authority
shall enter into a use and occupancy agreement with the User
covering the use and occupancy of the Space, with the term
thereof commencing as of the expiration or earlier termination
of the Use and Occupancy Agreement, the permitted uses of the
Space, the fees and charges thereunder being as set forth in
the Use and Occupancy Agreement, and on substantially the same
remaining
1
terms and conditions as set forth in the Use and Occupancy
Agreement and such additional terms as may be necessary or
appropriate.
(b) Any successor airport operator that may be selected by the
Port Authority shall be required to assume all Port Authority
obligations hereunder and under any successor use and
occupancy agreement and relieve the Port Authority of same.
(c) In the event the User has commenced the construction work
set forth in Paragraph 3 to Supplement 3 to User's Use and
Occupancy Agreement TA-121, the expiration date of December
30, 1999, as referenced in Section 1, "Term" of said Agreement
shall be changed to expire, unless sooner terminated in
accordance with said Agreement, thirty (30) days after
completion of said construction. In the event that, upon the
expiration date referenced above, the Space shall not be
occupied by First Aviation Services, Inc., or if First
Aviation Services, Inc. shall have notified the Airport
Operator of its intention not to occupy Hangar 1 at the
Airport, the term of the Agreement shall be changed to expire
on the day before the Twentieth (20th) Year Anniversary of the
completion of the construction as provided for in Paragraph 3
and 10 of said Agreement TA-121, whichever occurs last.
3. Neither this Consent Agreement, nor anything contained herein
nor the consent granted hereunder shall constitute or be
deemed to constitute a consent to nor shall they create an
inference or implication that there has been consent to any
enlargement, variation or change in the rights, powers and
privileges granted to the Airport Operator under the Main
Agreement, nor consent to the granting or conferring of any
rights, powers or privileges to the User as may be provided by
the Use and Occupancy Agreement or the Supplement if not
granted to the Airport Operator under the Main Agreement, nor
shall the same impair or change any of the duties, liabilities
and obligations imposed on the Airport Operator under the Main
Agreement. The Use and Occupancy Agreement and the Supplement
are agreements between the Airport Operator and the User with
respect to the various matters set forth therein. Neither this
Consent Agreement nor anything contained herein nor the
consent granted hereunder shall constitute an agreement
between the Port Authority and the Airport Operator that the
provisions of the Use and Occupancy Agreement or the
Supplement shall apply and pertain as between the Airport
Operator and the Port Authority, it being understood that the
terms, provisions, covenants, conditions and agreements of the
Main Agreement shall, in all respects, be controlling,
effective and determinative. The specific mention of or
reference to the Port Authority in any part of the Use and
Occupancy Agreement or the Supplement, including, without
limitation thereto, any mention of any consent or approval of
the Port Authority now or hereafter to be obtained, shall not
be or be deemed to create an inference that the Port Authority
has granted its consent or approval thereto under this Consent
Agreement or shall thereafter grant its consent or approval
thereto or that the subject matter as to which the consent or
approval applies has been or shall be approved or consented to
in principle or in fact or that the Port Authority's
2
discretion pursuant to the Main Agreement as to any such
consents or approvals shall in any way be affected or
impaired. The lack of any specific reference in any provisions
of the Use and Occupancy Agreement or the Supplement to Port
Authority approval or consent shall not be deemed to imply
that no such approval or consent is required and the Main
Agreement shall, in all respects, be controlling, effective
and determinative.
4. No provision of the Use and Occupancy Agreement or the
Supplement including, but not limited to, those imposing
obligations on the User with respect to laws, rules,
regulations, taxes, assessments and liens, shall be construed
as a submission or admission by the Port Authority that the
same could or does lawfully apply to the Port Authority, nor
shall the existence of any provision of the Use and Occupancy
Agreement or the Supplement covering actions which shall or
may be undertaken by the User or the Airport Operator
including, but not limited to, construction on the Space
covered by the Use and Occupancy Agreement or the Supplement,
be deemed to imply or infer that Port Authority consent or
approval thereto pursuant to the Main Agreement will be given
or that Port Authority discretion with respect thereto will in
any way be affected or impaired. References in this paragraph
to specific matters and provisions shall not be construed as
indicating any limitation upon the rights of the Port
Authority with respect to its discretion as to the granting or
withholding approvals or consents as to other matters and
provisions in the Use and Occupancy Agreement or the
Supplement which are not specifically referred to herein.
5. The User, in its operations under or in connection with the
Use and Occupancy Agreement or the Supplement and in its
occupancy of the Space covered by the Use and Occupancy
Agreement or the Supplement, shall be subject to the
applicable terms, provisions, covenants and conditions of the
Main Agreement. Without in any way affecting the obligations
of the Airport Operator under the Main Agreement and under
this Consent Agreement, all acts and omissions of the User
shall be deemed to be acts and omissions of the Airport
Operator under the Main Agreement, but notwithstanding the
foregoing, the Airport Operator shall not be or be deemed to
be in default of the Main Agreement to the extent that any of
the foregoing shall constitute a breach thereof if, except for
causes beyond the control of the Airport Operator, it shall
have commenced to remedy said default within twenty (20) days
after receipt of notice thereof from the Port Authority and
continues diligently to pursue such remedy.
6. The Use and Occupancy Agreement or the Supplement shall not be
changed, modified, discharged or extended except by written
instrument duly executed by the parties thereto and only with
the express prior written consent of the Port Authority.
7. If the Airport Operator shall at any time be in default of its
obligations under the Main Agreement to make payments to the
Port Authority, or if there shall occur at any time an event
involving insolvency, bankruptcy, arrangement or
reorganization of the Airport Operator which under the terms
of the Main
3
Agreement would constitute an event the occurrence of which
grants the Port Authority the right to terminate the Main
Agreement, and provided the same has not been cured within the
time granted therefor, if any, under the Main Agreement, the
User shall on demand of the Port Authority pay directly to the
Port Authority any fee or other amount due to the Airport
Operator. No such payment shall relieve the Airport Operator
from any obligations under the Main Agreement or under this
Consent Agreement but all such payments shall be credited
against the obligations of the Airport Operator and of the
User for each payment or part thereof.
8. The granting of the consent hereunder by the Port Authority
shall not be or be deemed to operate as a waiver of consent to
any subsequent agreement with respect to the use or occupancy
of space at the Airport (by the Airport Operator or by the
User) or to any assignment of the Main Agreement or the Use
and Occupancy Agreement or the Supplement or of any rights
under any of them, whether in whole or in part.
9. In the event of any default by the User under any of the
provisions of this Consent Agreement and said default has not
been cured within thirty (30) days (or such longer period as
is required in the reasonable opinion of the Port Authority,
to correct such default, provided the User promptly commences
and diligently continues to effectuate a cure) after the Port
Authority has served a notice of such default upon the Airport
Operator and the User, the Port Authority shall have the right
to revoke the consent granted hereunder upon thirty (30) days'
written notice to the Airport Operator and the User, but no
such revocation shall be deemed to affect the Main Agreement
and the continuance thereof, it being understood, moreover,
that the foregoing shall not be deemed to affect or limit any
rights of the Port Authority under the Main Agreement. In the
event of the revocation of the consent hereunder as
hereinabove provided, the Airport Operator shall immediately
terminate the Use and Occupancy Agreement.
10. Reference herein to the User shall mean and include the User,
its officers, agents, employees and also others on the Space
covered by the Use and Occupancy Agreement or the Supplement
or elsewhere on the Airport with the consent of the User.
11. Neither the Commissioners of the Port Authority nor any of
them, nor any officer, agent or employee thereof shall be held
personally liable to the Airport Operator or to the User under
any term of provision of this Consent Agreement or because of
its execution or because of any breach or alleged breach
hereof.
4
IN WITNESS WHEREOF, the Port Authority, the Airport Operator and the User have
executed these presents.
PORT AUTHORITY OF NEW YORK AND
NEW JERSEY
ATTEST:
/s/ Xxxxx Xxxxxxx By: /s/ X. Xxxxx
---------------------------------- -----------------------------------
Title: Assistant Secretary Title: Aviation Director
---------------------------- --------------------------------
XXXXXXX CONTROLS WORLD SERVICES INC.
ATTEST:
/s/ Xxxxx Xxxxxx By: /s/ Illegible
---------------------------------- -----------------------------------
Title: Admin. Assistant Title: Vice President
---------------------------- --------------------------------
ATLANTIC AVIATION CORPORATION
(User)
ATTEST:
/s/ Illegible By: /s/ XX Xxxxxxxxxx
---------------------------------- -----------------------------------
Title: Secretary Title: President
---------------------------- --------------------------------
5
EXECUTION COPY
CLOSING LETTER AGREEMENT
This Closing Letter Agreement is entered into as of July 29, 2004, by and
between North America Capital Holding Company, a Delaware corporation
("Purchaser"), Executive Air Support, Inc., a Delaware corporation
("Executive"), and ABS Capital Partners III, L.P., a Delaware limited
partnership, as the Shareholder Representative under that certain Stock Purchase
Agreement by and between Macquarie Investment Holdings, Inc., a Delaware
corporation, Executive and the stockholders of Executive, dated as of April 28,
2004, as assigned to Purchaser (the "Stock Purchase Agreement").
Now, therefore, in consideration of the mutual promises and agreements set
forth herein, the parties agree as follows:
1. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Stock Purchase Agreement.
2. Executive has paid the Port Authority of New York and New Jersey (the
"Port Authority") the sum of Five Hundred Thousand Dollars ($500,000.00) as the
payment (the "Consent Fee") required by the Port Authority to receive an
estoppel letter in the form provided to the Port Authority and previously
approved by Purchaser, which estoppel letter is a condition precedent to the
Purchaser's obligation to consummate the Closing pursuant to Section 6.1(m) of
the Stock Purchase Agreement. The full amount of such payment is reducing
Executive's cash and cash equivalents as of the Effective Time for purposes of
determining any adjustment to the Purchase Price under Section 1.8 of the Stock
Purchase Agreement. At the Closing, as reflected on the Closing Statement, the
Purchase Price paid by Purchaser is being increased by Two Hundred Fifty
Thousand Dollars ($250,000.00) to reflect the parties' agreement to split the
cost of the Consent Fee. In addition, the Shareholders shall indemnify the
Purchaser Indemnified Parties for one-half (1/2) of any payments(s) required by
the Department of Transportation of the State of New York to receive an estoppel
letter with respect to Executive's operations at Republic Airport, Farmingdale,
New York; provided, that, in no event shall the Shareholders be liable under the
foregoing clause for more than Two Hundred Fifty Thousand Dollars ($250,000.00);
and provided, further, that such indemnification obligation shall not be subject
to the limitations set forth in Section 8.2(b)(ii) of the Stock Purchase
Agreement.
3. The parties acknowledge that it is impractical to obtain pay-off
statements or the functional equivalents thereof from the holders of the Funded
Indebtedness set forth on Exhibit A hereto prior to the Closing as contemplated
by Section 1.3(c) of the Stock Purchase Agreement. Accordingly, the parties
agree that payment of such Funded Indebtedness by the Purchaser to such holders
at or prior to the Closing shall not be a condition precedent to the Closing,
but the Purchase Price shall be reduced by an amount equal to the outstanding
principal of, and accrued interest on, such Funded Indebtedness as of the
Closing Date.
4. In addition to the indemnification obligations set forth in Article 8
of the Stock Purchase Agreement and notwithstanding anything to the contrary set
forth in the Stock Purchase Agreement, the Shareholders shall, jointly and
severally, indemnify and hold harmless the
1
Purchaser Indemnified Parties from and against any and all Damages, except as
expressly limited herein, of or to any Purchaser Indemnified Parties arising out
of or resulting from:
(a) any and all benefits accrued or required to be accrued under the
General Aviation Corporation Retirement Plan (the "GAC 401(k) Plan") as of the
Closing Date, and all other Damages incurred in connection with, resulting from
or arising out of, directly or indirectly (whether or not involving a third
party claim), the GAC 401(k) Plan with respect to acts or omissions prior to the
Effective Time including, but not limited to:
(i) the failure of General Aviation, LLC ("GAC") to adopt timely
either a "GUST" amendment within the meaning of Section 12.03 of Revenue
Procedure 2003-44 or an "EGTRRA good faith amendment" within the meaning of
Section 4.10 of IRS Revenue Procedure 2003-44 for the GAC 401(k) Plan;
(ii) the failure of GAC to file timely with the IRS a Form 5500 with
respect to the GAC 401(k) Plan for the 2002 calendar year; or
(iii) the failure of GAC to have performed an independent financial
audit of the GAC 401(k) Plan for the 2002 calendar year and included such audit
with the Form 5500 with respect to the GAC 401(k) Plan for the 2002 calendar
year, as filed with the IRS; and
(b) the failure of Executive or GAC to have satisfied in full any amounts
specified in the estoppel letter attached hereto as Exhibit B which are finally
determined to be due and owing to the City of New Orleans arising out of or
resulting from operations at the New Orleans International Airport prior to the
Closing;
(c) the termination or surrender of, and the failure of EAS or the
Subsidiaries to have maintained, the FCC licenses listed on Exhibit C hereto;
(d) any action or threatened action by the Town of Babylon regarding
construction of a hanger facility for Talon Air Services, LLC on premises leased
by Flightways of Long Island, Inc., at Republic Airport, Farmingdale, New York;
and
(e) Taxes incurred as a result of the mergers or dissolutions of the
Subsidiaries identified with an asterisk (*) on Schedule 3.1; provided, that,
the loss or diminution of any net operating losses (NOLs) of such Subsidiaries
shall not be deemed to be Damages for these purposes.
Purchaser covenants and agrees to use commercially reasonable efforts to
mitigate "Damages" under this paragraph 4, which efforts shall include causing
Executive to duly pursue all indemnification rights from the former owners of
GAC under the Member Interests Purchase Agreement dated December 17, 2003, as
amended, between Executive and such former owners. The indemnification
obligations set forth in this paragraph 4 shall survive the Closing for a
period of (i) sixty (60) days after the expiration of the applicable federal or
state statute of limitations, whichever is longer, or (ii) five (5) years after
the Closing, whichever is later. The indemnification obligations set forth in
this paragraph 4 shall be subject to the limitations set
2
forth in Section 8.2 of the Stock Purchase Agreement, other than the limitation
set forth in Section 8.2(b)(ii)(y) of the Stock Purchase Agreement which shall
not apply.
5. The parties hereby further amend the Stock Purchase Agreement as
follows:
(a) all references to "ABS Capital Partners, III, LLC" are replaced with
"ABS Capital Partners III, L.P.";
(b) the following paragraph is added as Section 1.9(e):
"Purchaser covenants and agrees to provide the Shareholder Representative
reasonable access to information of and concerning any Claim (provided such
access is not restricted or precluded by law, regulation or any agreement to
which Purchaser is bound, or would otherwise adversely affect Purchaser's
right to assert a legal privilege with respect thereto) and shall cause its
officers and employees to cooperate with the Shareholder Representative in
performing its duties and exercising its rights hereunder. The Shareholder
Representative shall treat all such information as confidential information
and not disclose any such information to anyone (except to the Shareholder
Representative's attorneys, accountants or other advisers, to the arbitrators
appointed to resolve disputes, and on a need-to-know basis to other
individuals who agree to keep such information confidential)."
(c) Section 3.5(a) is amended to change the number disclosed for
Executive's issued and outstanding shares of Common Stock from 1,843,689 to
1,895,684.
6. The parties acknowledge and agree that any post-Closing adjustments
to the Purchase Price based on Executive's and its Subsidiaries' Net Working
Capital and Cash and Cash Equivalents as of the Effective Time shall be
determined in a manner that is consistent with Exhibit D hereto and calculated
as of July 31, 2004; provided, however, such determination shall not take into
account any charges, dividends or distributions, outside the ordinary course of
business, effected by Executive after the Closing.
7. In the event of any conflict between any provision of this Closing
Letter Agreement and any provision of the Stock Purchase Agreement, such
provision of this Closing Letter Agreement shall prevail.
8. This Closing Letter Agreement may be executed by facsimile
transmission and in one or more counterparts, each of which shall be deemed an
original but all of which together will constitute one and the same instrument.
This Closing Letter Agreement shall be governed by and construed in accordance
with the domestic laws of the State of Delaware, without giving effect to any
choice or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
3
In witness whereof, the parties have executed this Closing Letter
Agreement as of the date written above.
NORTH AMERICA CAPITAL HOLDING COMPANY
By:
-------------------------
Name: Xxxxxx Bleach
Title: President
By: /s/ Xxxxxxxxxxx Xxxxxx
-------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: Vice President
EXECUTIVE AIR SUPPORT, INC.
By:
-------------------------
Name: Xxxxx X. Xxxxxx
Title: President
ABS CAPITAL PARTNERS III, L.P.
as the Shareholder Representative
By: ABS Partners III, L.L.C.
Its General Partner
By:
-------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Managing Member
4
In witness whereof, the parties have executed this Closing Letter
Agreement as of the date written above.
NORTH AMERICA CAPITAL HOLDING COMPANY
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
EXECUTIVE AIR SUPPORT, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
ABS CAPITAL PARTNERS III, L.P.
as the Shareholder Representative
By: ABS Partners III, L.L.C.
Its General Partner
By:
-------------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Managing Member
4
In witness whereof, the parties have executed this Closing Letter Agreement
as of the date written above.
NORTH AMERICA CAPITAL HOLDING COMPANY
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
EXECUTIVE AIR SUPPORT, INC.
By:
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
ABS CAPITAL PARTNERS III, L.P.
as the Shareholder Representative
By: ABS Partners III, L.L.C.
Its General Partner
By: /s/ Xxxxxx X. Xxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Managing Member
4
