AGREEMENT AND PLAN OF MERGER
BY AND AMONG
MAPLE LEAF AEROSPACE, INC.,
AEROSPACE ACQUISITION CORP.,
AEROSPACE MERGER SUB I, INC.,
TRI-STAR AEROSPACE, INC.,
AND THOSE CERTAIN STOCKHOLDERS OF
TRI-STAR AEROSPACE, INC.
EXECUTING A SIGNATURE PAGE HERETO
TABLE OF CONTENTS
SECTION PAGE
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ARTICLE 1. THE MERGER . .. . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Effects of the Merger. . . . . . . . . . . . . . . . . . . . . . 2
1.5 Articles of Incorporation; By-laws . . . . . . . . . . . . . . . 3
1.6 Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.7 Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 2. EFFECT OF THE MERGER ON THE SECURITIES
OF THE CONSTITUENT CORPORATIONS. . . . . . . . . . . . . . . . . 3
2.1 Effect on Capital Stock. . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 3. MERGER CONSIDERATION . . . . . . . . . . . . . . . . . . . . . . 4
3.1 Amount of Merger Consideration . . . . . . . . . . . . . . . . . 4
3.2 Payment of Merger Consideration. . . . . . . . . . . . . . . . . 4
3.3 Confirmation of Merger Consideration;
Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
THE COMPANY SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . 8
4.1 Organization; Corporate Power; Good Standing . . . . . . . . . 8
4.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.3 Capitalization; Subsidiaries . . . . . . . . . . . . . . . . . . 9
4.4 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.5 The Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.6 Leased Assets. . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.7 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . . 12
4.8 Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.9 Financial Information. . . . . . . . . . . . . . . . . . . . . . 13
4.10 Books and Records. . . . . . . . . . . . . . . . . . . . . . . . 14
4.11 Licenses, Permits and Authorizations . . . . . . . . . . . . . . 14
4.12 No Undisclosed Liabilities, Etc. . . . . . . . . . . . . . . . . 15
4.13 Consents and Approvals of Governmental
Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.14 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.15 Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.16 Contracts and Agreements . . . . . . . . . . . . . . . . . . . . 19
4.17 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . 19
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4.18 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . 20
4.19 No Material Adverse Change . . . . . . . . . . . . . . . . . . . 22
4.20 Title to and Condition of Assets; Encumbrances . . . . . . . . . 22
4.21 Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.22 Labor, Employment Contracts and Employee Benefit
Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.23 Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . 26
4.24 Conduct in Ordinary Course . . . . . . . . . . . . . . . . . . . 27
4.25 No Illegal Payments. . . . . . . . . . . . . . . . . . . . . . . 28
4.26 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.27 Proprietary Rights . . . . . . . . . . . . . . . . . . . . . . . 29
4.28 Interest in Customers, Etc . . . . . . . . . . . . . . . . . . . 30
4.29 Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.30 Officers and Directors; Bank Accounts. . . . . . . . . . . . . . 30
4.31 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF MAPLE LEAF . . . . . . . . . . 31
5.1 Organization; Corporate Power and Good Standing. . . . . . . . . 31
5.2 Corporate Authorization. . . . . . . . . . . . . . . . . . . . . 31
5.3 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.5 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 6. OTHER COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . 32
6.1 Access and Investigation; Confidentiality . . . . . . . . . . . 32
6.2 Agreement to Cooperate to Obtain Consents and
Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.3 Operation of the Business. . . . . . . . . . . . . . . . . . . . 34
6.4 Negative Covenant. . . . . . . . . . . . . . . . . . . . . . . . 34
6.5 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.6 No Negotiation . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.7 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . 36
6.8 Additional Agreements. . . . . . . . . . . . . . . . . . . . . . 36
6.9 Alienation of Shares . . . . . . . . . . . . . . . . . . . . . . 36
6.10 No Solicitation. . . . . . . . . . . . . . . . . . . . . . . . . 37
6.11 Access to Information. . . . . . . . . . . . . . . . . . . . . . 37
6.12 Section 338 Elections and Related Matters . . . . . . . . . . . 38
6.13 Tri-Star Canada. . . . . . . . . . . . . . . . . . . . . . . . . 40
6.14 Use of Name. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.15 Elections. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.16 Tax Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.17 Waiver of Claims Under the FBCA. . . . . . . . . . . . . . . . . 41
6.18 Liquidation of International . . . . . . . . . . . . . . . . . . 41
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ARTICLE 7. CLOSING CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . 41
7.1 Conditions to Parent's, Sub's and Merger Sub's Obligation
to Close . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.1.1 Representations and Warranties of the Company and
the Company Shareholders; Compliance with Agreement. . . 41
7.1.2 Stock Certificates . . . . . . . . . . . . . . . . . . . 42
7.1.3 Escrow Agreement . . . . . . . . . . . . . . . . . . . . 42
7.1.4 Waiver Agreements. . . . . . . . . . . . . . . . . . . . 42
7.1.5 Non-Competition Agreement. . . . . . . . . . . . . . . . 42
7.1.6 Contracts. . . . . . . . . . . . . . . . . . . . . . . . 42
7.1.7 Absence of Material Change . . . . . . . . . . . . . . . 42
7.1.8 Regulatory Approvals . . . . . . . . . . . . . . . . . 43
7.1.9 Leases . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.1.10 Consents . . . . . . . . . . . . . . . . . . . . . . . . 43
7.1.11 Resignations . . . . . . . . . . . . . . . . . . . . . . 43
7.1.12 Financing. . . . . . . . . . . . . . . . . . . . . . . . 43
7.1.13 Concurrent Closing of Aviall Transaction . . . . . . . . 44
7.1.14 Certificate of Good Standing . . . . . . . . . . . . . . 44
7.1.15 Articles of Incorporation; By-Laws . . . . . . . . . . . 44
7.1.16 Employment Contract. . . . . . . . . . . . . . . . . . . 44
7.1.17 Resolutions; Incumbency. . . . . . . . . . . . . . . . . 44
7.1.18 Opinion of Counsel . . . . . . . . . . . . . . . . . . . 44
7.1.19 FIRPTA Affidavit . . . . . . . . . . . . . . . . . . . . 44
7.1.20 Books and Records. . . . . . . . . . . . . . . . . . . . 45
7.1.21 No Injunction. . . . . . . . . . . . . . . . . . . . . . 45
7.1.22 Section 338(h) (10) Election . . . . . . . . . . . . . . 45
7.1.23 Base Amount Certificate. . . . . . . . . . . . . . . . . 45
7.1.24 Liquidation of International . . . . . . . . . . . . . . 45
7.1.25 Further Instruments. . . . . . . . . . . . . . . . . . . 45
7.2 Conditions to the Company's and the Company Shareholders'
Obligation to Close. . . . . . . . . . . . . . . . . . . . . . . 46
7.2.1 Representations and Warranties of Parent, Sub and
Merger Sub; Compliance with Agreement. . . . . . . . . . 46
7.2.2 Merger Consideration . . . . . . . . . . . . . . . . . . 46
7.2.3 Resolutions; Incumbency. . . . . . . . . . . . . . . . . 46
7.2.4 Certificate of Good Standing . . . . . . . . . . . . . . 46
7.2.5 Certificate of Incorporation; By-Laws . . . . . . . . . 46
7.2.6 Opinion of Counsel . . . . . . . . . . . . . . . . . . . 47
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SECTION PAGE
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7.2.7 Employment Contract; Stockholders' Agreement . . . . . . 47
7.2.8 Regulatory Approvals . . . . . . . . . . . . . . . . . . 47
7.3 Post-Closing Actions. . . . . . . . . . . . . . . . . . . . . . 47
7.3.1 Payment of Company Receivable. . . . . . . . . . . . . . 47
7.3.2 Purchase of XXXX and Tri-Star U.K. . . . . . . . . . . . 48
ARTICLE 8. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . 48
8.1 Indemnity by the Company Shareholders. . . . . . . . . . . . . . 48
8.2 Indemnity by Parent, Sub and Merger Sub. . . . . . . . . . . . . 49
8.3 Procedure and Payment. . . . . . . . . . . . . . . . . . . . . . 49
8.4 Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.5 Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.6 Tax Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.7 Purchase Price Adjustment. . . . . . . . . . . . . . . . . . . . 51
ARTICLE 9. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.1 Termination Date . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 10. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 52
10.1 Survival of Representations and Warranties . . . . . . . . . . . 52
10.2 Disclosure and Confidentiality . . . . . . . . . . . . . . . . . 52
10.3 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
10.4 Governing Law; Construction; Submission to Jurisdiction. . . . . 52
10.5 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
10.6 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
10.7 Completeness of Agreement. . . . . . . . . . . . . . . . . . . . 53
10.8 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
10.9 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
10.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 55
10.11 No Benefit to Others . . . . . . . . . . . . . . . . . . . . . . 55
10.12 Schedules and Headings . . . . . . . . . . . . . . . . . . . . . 56
10.13 Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . 56
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 28, 1996, by and among
MAPLE LEAF AEROSPACE, INC., a Delaware corporation ("Parent"), AEROSPACE
ACQUISITION CORP., a Delaware corporation and wholly-owned subsidiary of
Parent ("Sub"), AEROSPACE MERGER SUB I, INC., a Florida corporation and
wholly-owned subsidiary of Sub ("MERGER SUB"; Parent, Sub and Merger Sub
being herein collectively referred to as "MAPLE LEAF"), TRI-STAR AEROSPACE,
INC., a Florida corporation (the "COMPANY"), and those certain stockholders
of the Company executing a signature page hereto (the "Company Shareholders").
W I T N E S S E T H :
WHEREAS, the Company is engaged in the business of distributing aerospace
hardware and fittings in the aviation industry (the "BUSINESS") and has its
principal place of business located at 00000 Xxxx Xxxx Xxxxxx, Xxxxx, Xxxxxxxx,
00000;
WHEREAS, the Company Shareholders own an aggregate of 117,347 shares
(the "SHARES") of common stock, $.10 par value per share ("COMMON STOCK"), of
the Company, which Shares constitute, subject to the disclosures set forth in
Schedule 4.3(a), all of the issued and outstanding shares of capital stock of
the Company;
WHEREAS, the Company Shareholders and the respective Boards of Directors of
Maple Leaf have adopted resolutions approving this Agreement, pursuant to which
Merger Sub shall be merged with the Company and the Company shall become a
wholly-owned subsidiary of Sub (the "MERGER");
WHEREAS, the Company Shareholders have determined that the Merger would be
fair and in their best interests; and
WHEREAS, the Company Shareholders, the Company, Parent, Sub and Merger
Sub desire to make certain representations, warranties, covenants and
agreements in connection with the Merger and also to prescribe various
conditions to the Merger.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE 1.
THE MERGER
1.1 THE MERGER. Upon the terms and subject to the conditions set forth in
this Agreement and Plan of Merger (this "AGREEMENT"), and in accordance with the
Florida Business Corporation Act, as amended (the "FBCA"), Merger Sub shall be
merged with and into the Company at the Effective Time (as hereinafter defined).
Upon the Effective Time, the separate existence of Merger Sub shall cease,
and the Company shall continue as the surviving corporation (the "Surviving
Corporation").
1.2 CLOSING. Unless this Agreement shall have been terminated pursuant
to Article 9 and subject to the satisfaction or waiver of the conditions set
forth in Article 7, the closing of the Merger (the "CLOSING") shall take
place beginning at 9:00 a.m., New York City time, on a date mutually
acceptable to the parties not more than three business days after all
conditions to the Closing set forth in this Agreement have been satisfied or
waived, at the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 or such other time or place as the parties shall agree
(such time and date being herein referred to as the "CLOSING DATE").
1.3 EFFECTIVE TIME. The parties hereto shall file with the Secretary
of State of the State of Florida (the "SECRETARY OF STATE") on the date of
the Closing (or on such other date as Parent and the Company may agree)
articles of merger or other appropriate documents, executed in accordance
with the relevant provisions of the FBCA, and make all other filings or
recordings required under the FBCA in connection with the Merger. The Merger
shall become effective upon the filing of the articles of merger with the
Secretary of State, or at such later time as is specified in the articles of
merger (the "EFFECTIVE TIME").
1.4 EFFECTS OF THE MERGER. The Merger shall have the effects set forth
in the FBCA. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the properties, rights, privileges,
powers and franchises of the Company and Merger Sub shall vest in the
Surviving Corporation, and all debts, liabilities and duties of the Company
and Merger Sub shall become the debts, liabilities and duties of the
Surviving Corporation.
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1.5 ARTICLES OF INCORPORATION: BY-LAWS. (a) At the Effective Time,
Merger Sub's Articles of Incorporation shall be the Articles of Incorporation
of the Surviving Corporation.
(b) The By-Laws of Merger Sub as in effect at the Effective Time
shall, from and after the Effective Time, be the By-Laws of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
1.6 DIRECTORS. The directors of Merger Sub at the Effective Time
shall, from and after the Effective Time, be the directors of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
1.7 OFFICERS. At the Effective Time, the officers of Merger Sub shall
become the officers of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected
and qualified, as the case may be.
ARTICLE 2.
EFFECT OF THE MERGER ON THE SECURITIES
OF THE CONSTITUENT CORPORATIONS
2.1 EFFECT ON CAPITAL STOCK. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of Common
Stock or any shares of capital stock of Merger Sub:
(a) COMMON STOCK OF MERGER SUB. Each share of common stock of Merger
Sub issued and outstanding immediately prior to the Effective Time shall be
converted into and become one validly issued, fully paid and nonassessable share
of common stock of the Surviving Corporation.
(b) CONVERSION OF OUTSTANDING COMMON STOCK. Each share of Common
Stock issued and outstanding immediately prior to the Effective Time shall be
converted into the right to receive its allocable portion of the Merger
Consideration (as defined in Section 3.1 below), and all certificates
representing shares of Common Stock issued and outstanding immediately prior
to the Effective Time shall no longer be outstanding and shall automatically
be cancelled
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and retired and shall cease to exist, and each holder of a certificate
representing any such shares of Common Stock shall cease to have any rights
with respect thereto, except the right to receive the Merger Consideration
upon surrender of such certificate in accordance with this Agreement.
ARTICLE 3.
MERGER CONSIDERATION
3.1 AMOUNT OF MERGER CONSIDERATION. The aggregate consideration to be
received by the Company Shareholders for their Shares pursuant to the Merger
(the "MERGER CONSIDERATION") shall be an amount equal to:
(a) the FIXED MERGER CONSIDERATION which shall consist of $27,700,000
LESS an amount equal to the amount of S corporation earnings distributed by
the Company to the Company Shareholders prior to, at or in connection with
the Closing pursuant to Section 6.3(a) hereof, on a dollar-for-dollar
basis, provided that there shall be no such adjustment in respect of
distributions solely for purposes of meeting tax obligations of the Company
Shareholders pursuant to Section 6.3(a) (i) to the extent such
distributions are not made at or in connection with the Closing; and
(b) the CONTINGENT MERGER CONSIDERATION, which shall consist of
$3,000,000 and which sum shall be reduced from time to time and applied in
accordance with an Escrow Agreement, to be dated as of the Closing Date, by
and among Parent, Sub, Merger Sub, the Surviving Corporation, the Company
Shareholders and the escrow agent named therein, (the "ESCROW AGREEMENT").
The Escrow Agreement shall be in form and substance reasonably acceptable
to the parties thereto and shall provide for the reduction and application
from time to time until the third anniversary of the Closing Date of the
escrow of the Contingent Merger Consideration established thereby of all
amounts required to satisfy the first $3,000,000 of Losses (as defined in
Section 8.1 below) suffered or incurred by the Surviving Corporation for
which the Company Shareholders have agreed to indemnify pursuant to clause
(iv) of Section 8.1.
3.2 PAYMENT OF MERGER CONSIDERATION. On the Closing Date, Sub and/or
Merger Sub shall:
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(a) pay an amount equal to the Fixed Merger Consideration by wire
transfer of immediately available funds to a single account designated by
Xxxxxxx X. Small, as representative of the Company Shareholders (the
"REPRESENTATIVE"), in writing not less than two (2) days prior to the Closing
Date, such payment to be allocated among the Company Shareholders in
accordance with their pro rata ownership of the Shares as set forth on
Schedule 3.2(a) hereto; and
(b) deposit $3,000,000 in escrow with the escrow agent named in the
Escrow Agreement, to be held and applied in accordance therewith.
3.3 CONFIRMATION OF MERGER CONSIDERATION; ADJUSTMENT.
(a) Within 60 days following the Closing Date, the Surviving
Corporation will prepare and deliver to the Representative a balance sheet of
the Company as at the close of business on the Closing Date (which balance
sheet shall not give effect to the concurrent acquisition by Maple Leaf of
assets of the Aerospace Business Unit of Aviall Services, Inc. and Aviall
(Canada) Ltd. (the "AVIALL ASSETS")) (the "CLOSING DATE BALANCE SHEET") and
the Adjustment Certificate described in Section 3.3(b) below; PROVIDED,
HOWEVER, that any delay by the Surviving Corporation in delivering the same
shall not impair any of its or Maple Leaf's rights under this Agreement. The
Closing Date Balance Sheet shall be audited, reported on and certified by the
Chicago, Illinois office of Xxxxxx Xxxxxxxx LLP ("Xxxxxxxx"), shall be based
upon the books and records of Company and the Subsidiaries (as defined in
Section 4.3(c) below), shall be prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a basis consistent with
that of the preceding fiscal periods, and shall present fairly the financial
position of Company and the Subsidiaries as at the Closing Date. The Company
Shareholders hereby agree to instruct and use their best efforts to cause
Xxxxx Xxxxxxxx LLP or the Tulsa, Oklahoma office of Xxxxxx Xxxxxxxx LLP to
cooperate with and assist Xxxxxxxx in preparing the Closing Date Balance
Sheet including, without limitation, with respect to disclosing their work
papers, schedules, memoranda, notes and other documents with respect to their
work for the Company. The Representative's independent public accountants
shall have the opportunity to observe the taking of inventories in connection
with the preparation of the Closing Date Balance Sheet, and to consult with
and to examine the work papers,
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schedules and other documents prepared or reviewed by Xxxxxxxx in connection
with the preparation of their report and the Adjustment Certificate.
(b) In conjunction with, and based on its determinations in,
reporting on the Closing Date Balance Sheet, Xxxxxxxx shall render and
deliver to Maple Leaf, the Surviving Corporation and the Representative a
certificate (the "ADJUSTMENT CERTIFICATE") setting forth the stockholders'
equity of the Company immediately prior to the Closing and (i) without giving
effect to the S corporation stockholder distributions contemplated by Section
6.3(a) (ii) (y) hereof and (ii) computing the reserve for the inventory asset
in connection therewith on the basis of the Company's past custom and
practice in accordance with GAAP (the "CLOSING DATE STOCKHOLDERS' EQUITY"),
which Adjustment Certificate shall show such calculation and state that such
calculation has been made in accordance with the provisions of this Section 3.3.
(c) The Representative shall have a period of 30 days after
delivery of the Closing Date Balance Sheet and the Adjustment Certificate to
present in writing to Maple Leaf and the Surviving Corporation any objections
the Company Shareholders may have to any of the matters set forth therein,
which objections shall be set forth in reasonable detail. If no objections
are raised within such 30-day period, the Closing Date Balance Sheet and the
Adjustment Certificate shall be deemed accepted and approved by the parties
and the Merger Consideration Adjustment (as defined in Section 3.3(f) below),
if any, determined thereby shall be paid in accordance with Section 3.3(f)
below within 10 days of the expiration of such 30-day period.
(d) If the Representative shall raise any objections to the
determinations made in the Closing Date Balance Sheet or the Adjustment
Certificate within the aforesaid 30-day period, the parties' respective
accountants shall attempt to resolve the matter or matters in dispute and, if
resolved, such firms shall send a joint notice to the parties stating the
manner in which the dispute was resolved and confirming or revising the
Merger Consideration Adjustment, whereupon such confirmed or revised Merger
Consideration Adjustment shall be final and binding on the parties and shall
be paid in accordance with Section 3.3(f) below within 10 days of delivery of
such joint notice. If, however, such dispute cannot be resolved by the
parties nor by their accountants within 45 days after the delivery of
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the Closing Date Balance Sheet and the Adjustment Certificate, then the
specific matters in dispute shall be submitted to either Ernst & Young LLP or
Coopers & Xxxxxxx LLP (the "DESIGNATED ACCOUNTING FIRM") or, if such firms
decline to act in such capacity, such other firm of independent public
accountants mutually acceptable to Maple Leaf, the Surviving Corporation and
the Representative, which firm shall make a final and binding determination
as to such matter or matters. The Designated Accounting Firm or such, other
accounting firm shall send its written determination of the matters in
dispute to the parties and their respective accountants, whereupon the
confirmed or revised Merger Consideration Adjustment determined by the
Designated Accounting Firm or such other independent accounting firm shall be
binding on the parties hereto and shall be paid in accordance with Section
3.3(f) below within 10 days of delivery of such written determination.
(e) The parties agree to cooperate with each other and each
other's authorized representatives and with the Designated Accounting Firm or
any other accounting firm selected by the parties in order that any and all
matters in dispute shall be resolved as soon as practicable and that a final
determination of the Merger Consideration Adjustment shall be made. Each
party shall be responsible for all fees and expenses of their own
accountants, provided that the fees and expenses of the Designated Accounting
Firm or any other accounting firm selected by the parties pursuant to Section
3.3(d) shall be paid one-half by the Surviving Corporation and one half
allocated pro rata among the Company Shareholders.
(f) The "MERGER CONSIDERATION ADJUSTMENT" shall be the amount by
which the Closing Date Stockholders' Equity determined as provided in the
preceding paragraphs is less than $25,408,053 (the "BASE AMOUNT"). The
Merger Consideration Adjustment, together with interest thereon at the rate
of 8% per annum from the Closing Date, shall be paid to the Surviving
Corporation by the Company Shareholders, on a pro rata basis in relation to
their proportionate ownership of Shares immediately prior to the Closing, by
certified or bank check payable to the order of the Surviving Corporation.
7
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND THE COMPANY SHAREHOLDERS
The Company and the Company Shareholders hereby severally represent and
warrant to Maple Leaf as follows (it being understood that all
representations and warranties made with respect to Tri-Star Inventory
Management Service, Inc., an Illinois corporation ("XXXX"), and Tri-Star
Aerospace Ltd., a corporation organized under the laws of the United Kingdom
("TRI-STAR U.K."), Tri-Star Aerospace, Inc., an Ontario corporation
("TRI-STAR CANADA"), and Tri-Star International, Inc., a Florida corporation
("INTERNATIONAL"), are being made severally to Maple Leaf only by the
shareholders of those respective corporations as disclosed on Schedule 4.3(c)):
4.1 ORGANIZATION: CORPORATE POWER: GOOD STANDING. The Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida. The Company has full corporate power and
authority to carry on the Business as now conducted and to own, lease and
operate its properties in the manner presently conducted. The Company has
full corporate power and authority to execute and deliver this Agreement and
the other agreements contemplated hereby, to perform its respective obligations
hereunder and thereunder and to consummate the transactions contemplated
hereby and thereby. The Company is qualified or licensed to do business as a
foreign corporation in the jurisdictions set forth in SCHEDULE 4.1 hereto,
which constitute all jurisdictions where its ownership or leasing of property
or the conduct of its business requires such qualification.
4.2 AUTHORIZATION. (a) The execution and delivery of this Agreement
and the other agreements contemplated hereby and the performance by the
Company of its obligations hereunder and thereunder have been duly authorized
by all necessary corporate action and no other corporate, act on the part of
the Company, its Board of Directors, or its stockholders is necessary to
authorize the execution, delivery or performance by the Company of this
Agreement or any other agreement contemplated hereby or thereby. This
Agreement has been, and the other agreements contemplated hereby and the
instruments and documents to be delivered by the Company hereunder will be,
duly executed and delivered by the Company and each constitutes the legal,
valid and
8
binding obligations of the Company and are enforceable against the Company in
accordance with their respective terms (subject to applicable bankruptcy,
reorganization, insolvency, and other similar laws relating to or affecting
the enforcement of creditors' rights generally and to the availability of
equitable remedies).
(b) Such Company Shareholder has all requisite power, authority
and legal capacity to execute and deliver this Agreement and each of the
other agreements, certificates and instruments contemplated hereby to be
executed by such Company Shareholder in connection with the consummation of
the transactions contemplated by this Agreement (collectively, the "COMPANY
SHAREHOLDER DOCUMENTS"), and to consummate the transactions contemplated
hereby and thereby. This Agreement has been, and each of the Company
Shareholder Documents will be at or prior to the Closing, duly executed and
delivered by such Company Shareholder and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto) this
Agreement constitutes, and each of the Company Shareholder Documents when so
executed and delivered will constitute, legal, valid and binding obligations
of such Company Shareholder, enforceable against such Company Shareholder in
accordance with their respective terms (subject to applicable bankruptcy,
reorganization, insolvency, and other similar laws relating to or affecting
the enforcement of creditors' rights generally and to the availability of
equitable remedies).
4.3 CAPITALIZATION; SUBSIDIARIES.
(a) The authorized capital stock of the Company consists of
200,000 shares of Common Stock, each such share entitling the holder thereof
to one vote on every matter upon which stockholders of the Company are
entitled to vote. As of the date hereof, and subject to the disclosures set
forth in SCHEDULE 4.3(a), there are 117,347 shares of Common Stock issued and
outstanding, and no shares of capital stock are held by the Company as
treasury stock. Except for the Common Stock, the Company does not have any
authorized class or series of capital stock or other equity securities. All
of the issued and outstanding shares of Common Stock were duly authorized for
issuance and are validly issued, fully paid and non-assessable. Except as
disclosed on Schedule 4.3(b), there is no existing option, warrant, call,
right, commitment or other agreement of any character to which the Company is
a party requiring, and there are no securities of
9
the Company outstanding which upon conversion or exchange would require, the
issuance, sale, repurchase, redemption or transfer of any shares of capital
stock or other equity securities of the Company or other securities
convertible into, exchangeable for or evidencing the right to subscribe for
or purchase shares of capital stock or other equity securities of the Company.
(b) Except as disclosed on Schedule 4.3(b), (i) there is no
existing option, warrant, call, right, commitment or other agreement of any
character to which such Company Shareholder is a party requiring the
issuance, sale, repurchase or transfer of any shares of capital stock or
other equity securities of the Company or other securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase shares
of capital stock or other equity securities of the Company, and (ii) neither
such Company Shareholder nor the Company is a party to any voting trust or
other voting agreement with respect to any of the shares of Common Stock or
to any agreement relating to the issuance, sale, redemption, transfer or
other disposition of the capital stock of the Company.
(c) Schedule 4.3(c) hereto sets forth the name and address of each
entity in which the Company owns a majority of the outstanding voting
securities or other equity interests or in which one or more of the Company
Shareholders own, alone or in the aggregate with other Company Shareholders
and/or the Company, all of the outstanding voting securities or other equity
interests (each, a "SUBSIDIARY" and, collectively, the "SUBSIDIARIES"; which
term shall include, without limitation, XXXX, Tri-Star U.K., Tri-Star Canada
and International), and, for each such Subsidiary, the jurisdiction in which
it is incorporated or organized, the jurisdictions, if any, in which it is
qualified to do business, the number of shares of its authorized capital
stock, the number and class of shares thereof duly issued and outstanding,
the names of all stockholders or other equity owners and the number of shares
of stock owned by each stockholder or the amount of equity owned by each
equity owner. The outstanding shares of capital stock or equity interests of
each Subsidiary are validly issued, fully paid and non-assessable, and all
such shares or other equity interests represented as being owned by Company
or by one or more of the Company Shareholders are owned by it, him, her or
them (as appropriate) free and clear of any and all Liens (as defined in
Section 4.5 below). Except as disclosed on Schedule 4.3(b), there is no
10
existing option, warrant, call, commitment or agreement requiring, and there
are no securities of any Subsidiary outstanding which upon conversion or
exchange would require, the issuance, sale, repurchase or transfer of any
shares of capital stock or other equity interests of any Subsidiary or other
securities convertible or exchangeable into shares of capital stock or other
equity interests of any Subsidiary or other equity security of any
Subsidiary. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and is duly qualified to do business and is in good standing
under the laws of each jurisdiction in which its ownership or leasing of
property or the conduct of its business requires such qualification.
4.4 NO VIOLATION. (a) Neither the execution and delivery of this
Agreement, nor the performance by the Company of its obligations hereunder
nor the consummation of the transactions contemplated hereby will (i)
violate, conflict with, result in any breach of, constitute a default under,
or result in the termination or acceleration of the Company's Articles of
Incorporation or By-Laws or the organizational documents of any Subsidiary,
or, except as disclosed on SCHEDULE 4.16, any agreement, mortgage, indenture,
license, obligation or instrument to which the Company or any of the
Subsidiaries is a party or by which the Company, any of the Subsidiaries or
any of their respective properties or assets is bound or affected; (ii) other
than the Defined Consents (as defined in Section 4.16 below), require the
consent of any other party to, or result in the creation or imposition of any
Lien upon the Company or any of the Subsidiaries or any of their respective
properties or assets under, any agreement or commitment to which the Company
or any of the Subsidiaries is a party or by which any of them or any of their
respective properties or assets are bound; or (iii) violate any law,
judgment, decree, order, regulation or rule of any court or governmental
authority to which the Company or any of the Subsidiaries is subject.
(b) Neither the execution and delivery of this Agreement, nor
the performance by such Company Shareholder of his or her obligations
hereunder nor the consummation of the transactions contemplated hereby will
(i) violate, conflict with, result in any breach of, constitute a default
under, or result in the termination or acceleration of any agreement,
mortgage, indenture, license, obligation or instrument to which such Company
Shareholder is a party or
11
by which such Company Shareholder or any of his or her Shares in the Company
(as disclosed on Schedule 3.2(a)) or shares in any Subsidiary (as disclosed
on Schedule 4.3(c)) is bound or affected; (ii) require the consent of any
other party to, or result in the creation or imposition of any Lien upon,
such Company Shareholder or any of his or her Shares in the Company or shares
in any Subsidiary under any agreement or commitment to which such Company
Shareholder is a party or by which such Company Shareholder is, or his or her
Shares in the Company or shares in any Subsidiary are, bound; or (iii)
violate any law, judgment, decree, order, regulation or rule of any court or
governmental authority to which such Company Shareholder is, or his or her
Shares in the Company or shares in any Subsidiary are, subject.
4.5 THE SHARES. Such Company Shareholder is the record and beneficial
owner of all of the Shares in the Company indicated as being owned by such
Company Shareholder on Schedule 3.2(a) and of all the shares of Subsidiaries
indicated as being owned by such Company Shareholder on Schedule 4.3(c), in
each case, free and clear of any and all liens, mortgages, pledges, security
interests, charges, adverse claims, encumbrances or adverse rights of any
kind (collectively, "LIENS"). Such Company Shareholder has the capacity,
power and authority to transfer, convey, assign and deliver all such shares
as provided in this Agreement and pursuant to the form of agreement attached
hereto as Schedule 7.3.2.
4.6 LEASED ASSETS. Neither the Company nor any of the Subsidiaries
owns any interest in any real property. The building, plants, structures,
fixtures and equipment leased by the Company or any of the Subsidiaries and
used in the Business are sufficient for the continued conduct of the Business
after the Closing in substantially the same manner as conducted prior to the
Closing.
4.7 ACCOUNTS RECEIVABLE. All accounts receivable, notes or other
evidences of indebtedness of any person or entity (including, without
limitation, of any officer, stockholder, employee or Affiliate of the
Company) held by the Company and the Subsidiaries (the "ACCOUNTS RECEIVABLE")
represent valid obligations arising from sales actually made or services
actually performed in the ordinary course of the Business. Unless paid prior
to the Closing Date, the Accounts Receivable are or will be as of the Closing
Date current and collectible net of the respective reserves shown on the
Financial Statements (as defined in Section 4.9) as
12
of the Closing Date, which reserves are adequate and calculated consistent
with past practice. There is no contest, claim, or right of set-off, other
than returns in the ordinary course of Business, with any obligor of an
Accounts Receivable relating to the amount or validity of such Accounts
Receivable. The Company has delivered to Parent under cover of a certificate
referencing this Section 4.7 a complete and accurate list of all Accounts
Receivable as of the end of the month preceding the date of this Agreement,
which certificate and list are hereby incorporated herein and made a part of
this Agreement.
4.8 INVENTORY. All inventory of the Company and the Subsidiaries,
whether or not reflected in the Financial Statements, consists of a quality
and quantity usable and salable in the ordinary course of the Business,
except for obsolete items and items dispositioned to scrap, all of which have
been fully reserved for in the Financial Statements or on the accounting
records of the Company as of the Closing Date, as the case may be, including
reserves (believed to be adequate) of an amount not to exceed $2,000,000 for
inventory as to which documentation and/or other evidence of traceability may
be lost, incomplete or otherwise not suitable. All inventories not written
off have been priced at the lower of cost or market on a specific
identification basis. The quantities of each item of inventory are not, in
the best estimate of the Company and the Company Shareholders, excessive, but
are reasonable in the present circumstances of the Business, after being
reserved for in the Financial Statements or on the accounting records of the
Company as of the Closing Date, as the case may be. The Company and the
Subsidiaries have at all times sold and distributed their products in
compliance with applicable law. The Company and the Subsidiaries possess,
and at Closing will possess, all documentation (as has been represented to
the Company by the source of supply) of certifications for product
conformance to applicable specifications and/or records relating to
traceability to source of supply for each item of inventory that has not been
fully reserved for on the Financial Statements as is required for the Company
and the Subsidiaries to sell or otherwise transfer all items of inventory
(for use in their intended manner of usage) in accordance with applicable law
and industry practice.
4.9 FINANCIAL INFORMATION. The Company has heretofore delivered to
Parent copies of the following financial statements (collectively, the
"FINANCIAL STATEMENTS"):
13
(a) the consolidated balance sheets of the Company as of December 31,
1995 and 1994, and the related consolidated statement of earnings,
consolidated statements of stockholders' equity and consolidated statements
of cash flow for the respective 12-month periods then ended, together with
the independent public accountants' report thereon; and
(b) the unaudited balance sheet of the Company as of July 31, 1996
(the "LATEST BALANCE SHEET") and the related income and expenses statements
and expenses for the seven month period then ended.
Each of the foregoing Financial Statements presents fairly the
financial condition and results of operations of the Company in accordance
with GAAP consistently applied throughout the periods covered thereby subject
to, for the interim Financial Statements, normal year-end adjustments (which,
individually or in the aggregate, are not material) and lack of footnotes and
other presentation items. All reserves and accrued liabilities on the
Financial Statements are to be considered fungible one with each and any
other.
4.10 BOOKS AND RECORDS. The articles of incorporation, bylaws, minutes
of meetings of the board of directors (and any committee thereof) and
stockholders, stock ledgers, tax, accounting, employee and other records,
sales documentation, files, documents and papers of the Company and each of
the Subsidiaries, copies of which have been made available to Parent, have
been maintained in accordance with sound business practices and the
requirements of Section 13(b)(2) of the Securities Exchange Act of 1934, as
amended (regardless of whether or not the Company is subject to that Section),
including the maintenance of an adequate system of internal controls.
4.11 LICENSES, PERMITS AND AUTHORIZATIONS. The Company and each of the
Subsidiaries has all material approvals, licenses and permits of all
governmental authorities and agencies necessary for the conduct of the
Business and the ownership and use of their respective properties and assets,
all of which are identified on SCHEDULE 4.11 ("PERMITS"). Neither the
Company nor any Subsidiary has received any notices to the effect that it is
not in compliance with any such Permit.
14
4.12 NO UNDISCLOSED LIABILITIES, ETC. Neither the Company nor any
Subsidiary has any debts, liabilities or obligations of any nature (whether
absolute, accrued, contingent or otherwise, and whether due or to become due)
that would be required to be set forth on a balance sheet prepared in
accordance with GAAP consistently applied, except (a) liabilities and
obligations under the Contracts (as defined in Section 4.16), (b) liabilities
and obligations to the extent reflected and accrued for or reserved against
on the Latest Balance Sheet, (c) liabilities and obligations described on
SCHEDULE 4.12, and (d) liabilities and obligations which have arisen after
the date of the Latest Balance Sheet in the ordinary course of the Business;
PROVIDED HOWEVER, that the aggregate amount of liabilities in respect of (i)
loans owing by the Company to the Company Shareholders, (ii) outstanding
amounts under the Company's revolving credit facility, (iii) amounts owing to
Massachusetts Mutual Life Insurance Co., and (iv) checks written against the
Company's bank accounts that have not cleared, shall not exceed $22,000,000.
4.13 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No consent,
approval or authorization of, notice to, or declaration, filing or
registration with, any governmental or regulatory authority is required to be
made or obtained in connection with the execution, delivery and performance
by the Company and the Company Shareholders of this Agreement and the
consummation of the transactions contemplated hereby.
4.14 LITIGATION. Except as disclosed in SCHEDULE 4.14, there is no
suit, action, proceeding or investigation pending or, to the best knowledge
of the Company and the Company Shareholders, threatened against the Company,
any of the Subsidiaries, or any of their respective assets, properties,
securities or rights, before any court, arbitrator or administrative or
governmental body.
4.15 TAX RETURNS. (a) Except as disclosed in SCHEDULE 4.15, the Company
and each Subsidiary has timely filed all Tax Returns (as defined below)
required to be filed by it, such Tax Returns are complete and correct, and
all Taxes (as defined below) due, or claimed in writing by any taxing
authority to be due, have been timely paid or provided for in the Financial
Statements of the Company and in the financial statements of each Subsidiary
in accordance with GAAP. Neither the Company nor any Subsidiary has incurred
any Tax liability for their taxable years beginning
15
January 1, 1996 other than in respect of the conduct of the business of the
Company and each Subsidiary in the ordinary course. With respect to any
period up to the Closing Date for which Tax Returns have not yet been filed,
or for which Taxes are not yet due or owing, the Company and each Subsidiary
have made (or with respect to any period after the end of the most recent
fiscal quarter will make) due and sufficient current accruals for any such
Taxes owed by the Company and each Subsidiary in their books and records in
accordance with GAAP. The Company has delivered to Parent true, correct and
complete copies of its federal and state income Tax Returns for the preceding
two taxable years, and the Company and each Subsidiary will deliver to Parent
prior to the Closing true, correct and complete copies of their federal and
state income Tax Returns for the preceding three taxable years.
(b) There are no Liens with respect to Taxes upon any of the
assets of the Company or any Subsidiary, other than Liens for Taxes which are
not yet due and payable.
(c) The Company and XXXX qualify as S corporations as defined in
Section 1361 of the Code (as defined below) and, if applicable, comparable
provisions of state or local law, and have been S corporations since January
1, 1987 and January 1, 1993, respectively. The Company filed its election to
be an S corporation on December 15, 1986, and XXXX filed its election to be
an S corporation on March 15, 1993.
(d) Except as disclosed on Schedule 4.15(d), the Tax Returns of
the Company have been examined by the Internal Revenue Service (the "IRS")
for the taxable periods ending December 31, 1989, and have been examined by
the state or local taxing authorities set forth on Schedule 4.15 for the
taxable periods shown on such schedule. The Tax Returns of the Subsidiaries
have not been examined by the IRS or, with respect to Tri-Star U.K., any
relevant foreign taxing authority, or any state or local taxing authority.
There are no outstanding agreements, waivers, or arrangements extending the
statutory period of limitation applicable to any claim for, or the period for
the collection or assessment of, Taxes due from or with respect to the
Company or any Subsidiary for any taxable period. No closing agreement
pursuant to Section 7121 of the Code or compromise pursuant to Section 7122
of the Code (or any predecessor provision) or any similar provision of any
state, local, or foreign law has been entered into by the
16
Company or any Subsidiary. No audit or other proceeding by any court,
governmental or regulatory authority is pending or, to the knowledge of the
Company and the Company Shareholders and the shareholders of each Subsidiary,
threatened with respect to any Taxes due from the Company or any Subsidiary,
or any Tax Return filed by the Company or any Subsidiary. No assessment of
Tax is proposed against the Company or any Subsidiary or any of its or their
assets.
(e) All elections made or filed by the Company or any Subsidiary
with respect to Taxes are set forth on Schedule 4.15. No consent to the
application of Section 341(f)(2) of the Code (or any predecessor provision)
has been made or filed by the Company or any Subsidiary or with respect to
any of its or their assets. None of the assets of the Company or any
Subsidiary is an asset or property that is or will be required to be treated
as being (i) owned by any person other than the Company or such Subsidiary
pursuant to the provisions of Section 168(f)(8) of the Internal Revenue Code
of 1954, as amended and in effect immediately before the enactment of the Tax
Reform Act of 1986, or (ii) "tax-exempt use property" within the meaning of
Section 168(h)(1) of the Code. Neither the Company nor any Subsidiary has
agreed to or is required to make any adjustment pursuant to Section 481(a) of
the Code (or any predecessor provision) by reason of any change in any
accounting method of the Company or any Subsidiary, and there is no
application pending with any taxing authority requesting permission for any
changes in any accounting method of the Company or any Subsidiary. To the
knowledge of the Company and the Company Shareholders and the shareholders of
each Subsidiary, the IRS has not proposed any such adjustment or change in
accounting method.
(f) Neither the Company nor any Subsidiary is or has been in
violation (or with notice or lapse of time or both, would not be in
violation) of any applicable law relating to the payment or withholding of
Taxes. The Company and the Subsidiaries have duly and timely withheld from
employee salaries, wages, and other compensation and paid over to the
appropriate taxing authorities all amounts required to be so withheld and
paid over for all periods under all applicable laws.
(g) The Company and the Subsidiaries are not parties to, are not
bound by, and are not obligated under, any Tax sharing agreement or similar
contract or arrangement.
17
(h) There is no contract, agreement, plan or arrangement covering
any person that, individually or collectively, could give rise to the payment
of any amount that would not be deductible by the Company or any Subsidiary
by reason of Section 280G of the Code.
(i) The Company has not made any distribution of S corporation
earnings to or on behalf of, or prepared or delivered any filing to the IRS
(including, without limitation, any filing on Form K-1) with respect to,
Xxxxxxx X. Xxxxxx. The last distribution of S corporation earnings made by
the Company to or on behalf of Xxxx Xxxxx was made in September, 1993 for the
period ended August 17, 1993, and the Company has not prepared or delivered
any filing to the IRS (including, without limitation, any filing on Form K-1)
with respect to Xxxx Xxxxx since September, 1993, except for one such Form K-1
in respect of fiscal year 1993 which was prepared in error and was not filed.
For purposes of this Section 4.15, any reference to the Company or any
Subsidiary shall include any corporation which merged with or into or was
liquidated into the Company or any such Subsidiary.
For purposes of this Agreement, "CODE" shall mean the Internal Revenue
Code of 1986, as amended (including without limitation any successor internal
revenue law), and the rules and regulations promulgated thereunder; "TAXES"
shall mean all taxes, charges, fees, levies, or other similar assessments,
including without limitation (a) income, gross receipts, ad valorem, premium,
excise, real property, personal property, windfall profit, sales, use,
transfer, licensing, withholding, employment, payroll, estimated and
franchise taxes imposed by the United States, any state, local, or foreign
government, or any subdivision, agency, or other similar person of the United
States, or any such government, (b) any interest, fines, penalties,
assessments, or additions to tax resulting from, attributable to, or incurred
in connection with any such tax or any contest or dispute thereof and (c) any
Taxes for which the Company or any Subsidiary is liable as a transferee or as
an indemnitor, guarantor, surety or in a similar capacity under any contract,
arrangement, understanding or commitment, whether oral or written; and "TAX
RETURNS" shall mean any report, return, statement, or other information
required to be supplied to a taxing authority in connection with Taxes.
18
4.16 CONTRACTS AND AGREEMENTS. Except as disclosed on SCHEDULE 4.16,
every agreement, license, lease, and contract, written or oral, to which the
Company or any of the Subsidiaries is a party or by which any of their
respective properties or assets is bound or subject and (a) that involves (i)
an annual obligation of more than $10,000 or (ii) an aggregate obligation of
more than $100,000, (b) that provides for the disclosure by the Company or
any Subsidiary of any confidential or proprietary information, or (c) that is
with an Affiliate, director or employee of the Company (the "CONTRACTS") is
in full force and effect. SCHEDULE 4.16 currently identifies certain
Contracts and, as supplemented prior to the Closing Date, will identify every
Contract and, except as disclosed on SCHEDULE 4.16 (collectively, the
"DEFINED CONSENTS"), no consent, approval or waiver of any third party or
governmental authority is required under any Contract to maintain such
Contract in full force and effect and preserve the Company's and the
Subsidiaries' rights and benefits thereunder from and after the Closing Date.
Neither the Company nor any Subsidiary nor, to the knowledge of the Company
and the Company Shareholders, any other party to any Contract is in default,
and no event has occurred which with the giving of notice or passage of time
or both would constitute a default by the Company or any Subsidiary or, to
the knowledge of the Company and the Company Shareholders, by any other party
under any Contract or obligation owed by the Company or any Subsidiary which
default would adversely affect, either individually or together with other
defaults, the operating results, condition (financial or otherwise), assets,
liabilities, properties or business prospects of the Company. The Company has
furnished to Parent accurate and complete copies of each of the Contracts
referred to in the first sentence of this Section 4.16 identified on Schedule
4.16 as of the date hereof and an accurate and complete summary of the oral
Contracts so listed and, prior to the Closing Date, will have furnished to
Parent accurate and complete copies of all Contracts referred to in the first
sentence of this Section 4.16 and an accurate and complete summary of all
oral Contracts therein referred to.
4.17 COMPLIANCE WITH LAWS. Except as disclosed on SCHEDULE 4.17, the
Company, each Subsidiary, and the manner in which they respectively operate
their business and use their properties and assets are in substantial
compliance with any applicable law, ordinance or regulation of any federal,
state or government or agency. Neither the Company nor any Subsidiary has
received any notice of any violation
19
or alleged violation from any governmental agency relating there to.
4.18 ENVIRONMENTAL MATTERS. (a) Except as disclosed on SCHEDULE 4.18:
(i) the Company and the Subsidiaries and any real property owned,
operated or leased by the Company or the Subsidiaries (collectively, the
"REAL PROPERTY") and the operations thereon, at all times so owned,
operated or leased, have been, and are, and will be as of the Closing,
in full compliance with, and have not been and are not in violation of,
or liable under, any Environmental Law (as defined below);
(ii) neither the Company nor any of the Subsidiaries is subject to
any Environmental Costs and Liabilities (as defined below) and neither have
any basis to expect that the Company or the Subsidiaries will be subject
to any Environmental Costs and Liabilities;
(iii) neither the Company nor the Subsidiaries nor any other person
for whose conduct the Company or the Subsidiaries is or may be held to be
responsible has received any actual or threatened order, notice, claim or
other communication from any governmental body or person, including, but
not limited to, the current or prior owner or operator of the Real
Property, of any actual or potential violation of, or failure to comply
with, any Environmental Law, or of any actual or threatened obligation to
undertake or bear the cost of any environmental, health, and safety
liabilities with respect to the operations of the Company and the
Subsidiaries or the Real Property;
(iv) There are no pending or, to the knowledge of the Company and the
Company Shareholders, threatened actions, proceedings, claims or
investigations against the Company or the Subsidiaries or any of the Real
Property alleging the violation of or seeking to impose liability pursuant
to any Environmental Laws and there are no pending or, to the knowledge of
the Company and the Company Shareholders, threatened Liens or other
restrictions of any nature against the Company or the Subsidiaries or any
of the Real Property resulting from or imposed pursuant to any
Environmental Law; and
20
(v) There has been no Release (as defined below) or, to the
knowledge of the Company and the Company Shareholders, threat of Release of
any Hazardous Substances (as defined below) at or from any of the Real
Property at any time at which the Company or any of the Subsidiaries owned,
operated or leased any of the Real Property or at any other locations
where any hazardous substances were generated, manufactured, refined,
transferred, produced, disposed, treated, imported, used, or processed from
by or for the Company or the Subsidiaries, or to the knowledge of the
Company and the Company Shareholders, at any property adjacent to the Real
Property, whether by the Company or any other person or entity.
(b) The Company has delivered to Parent true and complete copies
and results of any reports, studies, analyses, tests, or monitoring data
possessed or initiated by the Company or any Subsidiary pertaining to
environmental conditions in, on, or under any of the Real Property or any
Real Property formerly owned, operated or leased by the Company or concerning
compliance with Environmental Laws by the Company, the Subsidiaries or any
other person or entity for whose conduct the Company or the Subsidiaries is
or may be held responsible.
(c) For purposes of this Agreement, the following terms shall have
the following definitions: (i) "ENVIRONMENTAL COSTS AND LIABILITIES" means
any and all losses, liabilities, obligations, damages, fines, penalties,
judgments, actions, claims, costs and expenses (including, without
limitation, fees, disbursements and expenses of legal counsel, experts,
engineers and consultants and the costs of investigation and feasibility
studies and remedial action) arising from or under any Environmental Law or
order or agreement with any governmental authority or other person or entity;
(ii) "ENVIRONMENTAL LAW" means any federal, state, local, or foreign law
(including common law), statute, code, ordinance, rule, regulation or other
legal requirement relating to the environment, natural resources, public or
employee health and safety, and the regulation of, or imposition of standards
of conduct concerning Releases or threatened Releases of noises, odors, or
Hazardous Substances into the environment or otherwise relating to the
manufacture, processing, generation, distribution, use, treatment, storage,
disposal, cleanup, transport or handling of Hazardous Substances and includes,
but is not limited to, the Comprehensive Environmental Response, Compensation
and
21
Liability Act, 42 U.S.C. Section 9601 ET SEQ., the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 ET SEQ., the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 ET SEQ., the Clean Water Act, 33
U.S.C. Section 1251 ET SEQ., the Clean Air Act, 33 U.S.C. Section 2601 ET
SEQ., the Toxic Substances Control Act, 15 U.S.C. Section 2601 ET SEQ., the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136 ET
SEQ., the Oil Pollution Act of 1990, 33 U.S.C Section 2701 ET SEQ. and the
Occupational Safety and Health Act, 29 U.S.C. Section 651 ET. SEQ., as such
laws have been amended or supplemented, and the regulations promulgated
pursuant thereto, and all analogous state or local statutes; (iii) "HAZARDOUS
SUBSTANCES" means any substance, material or waste which is regulated by any
governmental authority or the United States or other national government,
including, without limitation, any material, substance or waste which is
defined as a "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "contaminant,"
"pollutant," "toxic waste" or "toxic substance" under any provision of
Environmental Law, which includes, but is not limited to, petroleum,
petroleum products, asbestos, urea formaldehyde and polychlorinated
biphenyls; (iv) "RELEASE" means any release, spill, emission, leaking,
pumping, pouring, dumping, emptying, injection, deposit, disposal, discharge,
dispersal, leaching, or migration on or into the indoor or outdoor
environment or into or out of any property.
4.19 NO MATERIAL ADVERSE CHANGE. Since May 31, 1996, there has been no
material adverse change in the assets, liabilities, condition (financial or
otherwise), operating results, employee or customer relations, business
activities or business prospects of the Company or any Subsidiary. Neither
the Company nor any Subsidiary has received any notice and neither the
Company nor any of the Company Shareholders has any knowledge or any
reasonable basis to believe that any customers intend to discontinue or
substantially diminish or change their relationship with the Company or any
Subsidiary on account of the transaction contemplated hereby or otherwise.
4.20 TITLE TO AND CONDITION OF ASSETS; ENCUMBRANCES. The Company's and
the Subsidiaries' properties and assets are in good condition and repair,
ordinary wear and tear excepted, and none of such properties or assets
requires any repair or replacement except for maintenance in the ordinary
course of the Company's and the Subsidiaries' operations. The Company and the
Subsidiaries have good and marketable
22
title to their respective properties and assets and none of such properties
or assets is subject to any Lien of any kind, except (i) those disclosed in
the Latest Balance Sheet and as set forth in SCHEDULE 4.20, and (ii) possible
minor matters that, in the aggregate, are not substantial in amount and do
not, individually or in the aggregate, detract from or interfere with the
present or intended use of any of such properties or assets or impair the
Company's or any Subsidiary's business operations in any material respect.
4.21 EMPLOYEES. Set forth on SCHEDULE 4.21 attached hereto is a true
and complete list setting forth (a) the names, current salaries of, and other
compensation payable to, the employees of the Company and the Subsidiaries,
regardless of the amount of annual compensation, (b) the names and total
annual compensation for all independent contractors who render services on a
regular basis to the Company or the Subsidiaries, or who are currently under
contract to render services to the Company or the Subsidiaries, whose current
annual compensation is $10,000 or more, and (c) the names of each employee of
the Company or the Subsidiaries, who is party to an employment,
confidentiality, non-compete or other agreement with the Company or the
Subsidiaries (true and complete copies of which have been delivered to
Parent). The Company and the Subsidiaries have not promised to any employee
orally or in writing any bonus or increase in compensation or change in any
Employee Benefit Plan (as defined in Section 4.22(a)), or creation of any new
Employee Benefit Plan, whether or not legally binding.
4.22 LABOR, EMPLOYMENT CONTRACTS AND EMPLOYEE BENEFIT PROGRAMS. (a) The
Company and the Subsidiaries have and at the Closing Date will have, no
obligations, contingent or otherwise, written or oral, under any employment
contract or Employee Benefit Plan, other than (i) those disclosed in the
Latest Balance Sheet and those listed in SCHEDULE 4.22, true and correct
copies, or descriptions of which have been delivered to Parent pursuant to
Section 4.22(g), (ii) normal salary or wage accruals, (iii) normal salesman
and management incentive compensation pursuant to the arrangements described
on Schedule 4.22 in accordance with the Company's past custom and practice,
and (iv) paid vacations, sick leave and holiday accruals in accordance with
the Company's past practice and policy which is described on Schedule 4.22.
The Company and the Subsidiaries have performed all obligations required to
be performed under all such agreements or Employee Benefit
23
Plans and are not in arrears or breach under any of the terms thereof.
"EMPLOYEE BENEFIT PLAN" means "employee benefit plan" as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended, and
regulations promulgated thereunder ("ERISA"), and any other plan, program,
arrangement, contract or agreement which the Company and the Subsidiaries has
maintained, sponsored, adopted or obligated itself under with respect to one
or more employees' or former employees' benefits, including, but not limited
to, short-term or long-term sickness or disability, bonus or incentive
compensation, stock option or equity participation plans, severance pay,
vacation pay, deferred compensation or stock purchase plans.
(b) Neither the Company nor any of the Subsidiaries is a party to
or obligated under or with respect to any collective bargaining agreements,
arrangements or contracts with any labor union or other representative of
employees or any employee benefits provided by any such agreement. No
employees of the Company or the Subsidiaries are represented by any labor
organization. No labor organization or group of employees has made a pending
demand for recognition or certification. No work stoppage, slowdown, strike,
union organizational activity, allegation, charge or complaint of employment
discrimination or other similar occurrence EXCEPT AS SET FORTH ON SCHEDULE
4.22 has occurred during the Company's or the Subsidiaries' past three
completed fiscal years, or is pending or threatened against the Company or
any of the Subsidiaries; nor does the Company or the Company's Shareholders
know any basis for any such allegation, charge, or complaint. The Company
and each of the Subsidiaries is in compliance and have complied with all
applicable laws relating to the employment of labor, including provisions
thereof relating to wages, hours, equal opportunity, the Worker Adjustment
and Retraining Notification Act of 1988 and any similar state or local "plant
closing" law, collective bargaining and the payment of Social Security taxes
and any state taxes. There are no administrative charges or court complaints
pending or, to the knowledge of the Company and the Company Shareholders,
threatened against the Company or any of the Subsidiaries before the U.S.
Equal Employment Opportunity Commission or any state, federal, Canadian or
foreign court or agency concerning alleged employment discrimination or any
other matter relating to the employment of labor. There is no unfair labor
practice charge or complaint pending or, to the knowledge of the Company and
the Company Shareholders, threatened against the Company or any of the
Subsidiaries
24
before the National Labor Relations Board or any similar state, local,
Canadian or foreign labor relations body. To the knowledge of the Company
and the Company Shareholders, the Company's and the Subsidiaries' relations
with their respective employees are good.
(c) Neither the Company nor any Subsidiary has or will have as of
the Closing Date any liability or obligation, contingent or otherwise, under
a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA. Neither
the Company nor any Subsidiary has at any time, or will have as of the
Closing Date, maintained, sponsored, adopted, contributed to, or obligated
itself in any manner, contingent or otherwise, with respect to, a defined
benefit pension plan subject to Title IV of ERISA.
(d) The Employee Benefit Plans intended to qualify under Section
401 of the Code do so qualify, and nothing has occurred and, to the knowledge
of the Company and the Company Shareholders after reasonable inquiry, nothing
will occur which would result in the loss of such qualification for any
period through the Closing Date. In addition, the Tri-Star Aerospace Inc.
Employees' Welfare Benefit Plan (the "VEBA") qualifies as a voluntary
employees' beneficiary association under Section 501(c)(9) of the Code, and
nothing has occurred and, to the knowledge of the Company and the Company
Shareholders after reasonable inquiry, nothing will occur which would result
in the VEBA having unrelated business taxable income under the Code for any
period through the Closing Date. The trustee of the VEBA may be changed by
the appropriate corporate action by the Company.
(e) All contributions and insurance premiums to or in respect of
the Employee Benefit Plans for any period ending on or before the Closing
Date have been paid in full and no Employee Benefit Plan has any accumulated
funding deficiencies or "amount of unfunded benefit liabilities" as defined
in Section 4001(a)(18) of ERISA.
(f) There has been no "reportable event" as defined in Section
4043 of ERISA with respect to any Employee Benefit Plan.
(g) True, correct and complete copies of the following documents,
with respect to each of the Employee Benefit Plans, have been delivered to
Parent by the Company: (i) plans and related trust documents, and amendments
thereto; (ii) the most recent Forms 5500; (iii) the last IRS
25
determination letter; (iv) summary plan descriptions; and (v) written
descriptions of all non-written agreements relating to the Employee Benefit
Plans.
(h) There are no pending actions, claims or lawsuits asserted or
instituted against the Employee Benefit Plans, their assets, the plan sponsor
or administrator, or against any fiduciary (other than routine benefit
claims), nor does any of the Company or the Company Shareholders have
knowledge of facts which could form the basis for any such action, claim or
lawsuit.
(i) The Employee Benefit Plans are and have been maintained in
accordance with their terms, all applicable provisions of ERISA, the Code and
all other applicable federal and state laws and regulations.
(j) Except as disclosed in SCHEDULE 4.22(j), no Employee Benefit
Plan provides retiree life or health benefits, or provides for continuing
benefits or coverage for any participant or beneficiary EXCEPT under the
Consolidated Omnibus Budged Reconciliation Act of 1974, as amended ("COBRA")
and at the individual's expense. The Company and each ERISA Affiliate have
complied with the notice and continuation requirements of Section 4908B of
the Code, COBRA, and Part 6 of Subtitle B of Title I of ERISA.
(k) Neither the execution of this Agreement nor the consummation
of the transaction contemplated hereby will (i) result in any payment
becoming due to any current, former or retired employee of the Company or any
Subsidiary under any Employee Benefit Plan, (ii) increase any benefits under
any Employee Benefit Plan, or (iii) accelerate the payment or vesting of any
such benefits.
4.23 INSURANCE POLICIES. Attached hereto as SCHEDULE 4.23 is a correct
and complete list and description, including policy numbers, names and
addresses of insurers and expiration dates, of all insurance policies owned
by the Company and the Subsidiaries, and the Company has delivered to Parent
true and complete copies of all such policies. Such policies are in full
force and effect, and the Company and the Subsidiaries are not in default
under any of them. Except as set forth on SCHEDULE 4.23, neither the Company
nor any Subsidiary has received any notice of (a) cancellation or intent to
cancel, or (b) increase or intent to increase premiums, with respect to such
insurance policies and neither the Company nor any of the Company Shareholders
26
is aware of any basis for any such action. Except as disclosed on SCHEDULE
4.23, such policies are sufficient for compliance by the Company and the
Subsidiaries with workers' compensation and all obligations under Contracts
and provide adequate coverage for the Company, all of the Subsidiaries, and
their respective properties, assets and business operations as presently
conducted.
4.24 CONDUCT IN ORDINARY COURSE. Except as set forth on SCHEDULE 4.24,
since the date of the Latest Balance Sheet, the Company and the Subsidiaries
have conducted their respective businesses only in the ordinary course of
business consistent with past custom and practice, have incurred no
liabilities other than in the ordinary course of business consistent with
past custom and practice, and there has been no:
(a) payment or increase by the Company or any of the Subsidiaries
(except in the ordinary course of business consistent with past custom and
practice) of any dividend or other distribution, bonuses, salaries, or other
compensation to any stockholder, director, officer or employee, or entry into
any employment, severance, or similar contract with any director, officer or
employee;
(b) adoption of, or increase in the payments to or benefits under,
any profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement or other employee benefit plan for or with any employees,
or direct or indirect representation or promise, oral or written, to any
person concerning any Employee Benefit Plan which is inconsistent with the
terms of such Employee Benefit Plan;
(c) damage to or destruction or loss of any asset or property of
the Company or any Subsidiary, whether or not covered by insurance, adversely
affecting the properties, assets, business, financial condition, or prospects
of the Company or any Subsidiary;
(d) entry into, termination of, or receipt of notice of
termination of any (i) employment agreement or collective bargaining
arrangement, (ii) license, distributorship, dealer, sales representative,
joint venture, credit, loan, guaranty or similar agreement, or (iii) Contract
or transaction involving a total remaining commitment by or to the Company or
any Subsidiary of at least $100,000;
27
(e) issuance of any securities or sale (other than sales of inventory in
the ordinary course of business), lease, or other disposition of any asset or
property used in the conduct of the Business, or mortgage or pledge of, or
imposition of any Lien on, any asset or property of the Company or any
Subsidiary;
(f) cancellation or waiver of any claims or rights with a value to the
Company or any Subsidiary in excess of $100,000;
(g) material change in any tax or financial accounting method used by
the Company or any Subsidiary;
(h) disclosure of confidential information of the Company or any
Subsidiary except to a person or entity that is subject to a written
agreement prohibiting such person's or entity's disclosure thereof;
(i) actual or threatened loss of customers or key personnel of the
Business having or that would have a material adverse effect on the operating
results, financial condition, business, properties or prospects of the
Business; or
(j) agreement, whether oral or written, by the Company to do any of the
foregoing.
4.25 NO ILLEGAL PAYMENTS. With respect to their respective businesses,
neither the Company, nor any Subsidiary or other Affiliate thereof, nor, to
the knowledge of the Company and the Company Shareholders, any of the
Company's or any Subsidiary's respective officers, directors, employees,
sales agents or other representatives (i) has made or committed to make any
unlawful payments, contributions, gifts, entertainment or endorsements
relating to political activity; (ii) has made or committed to make any direct
or indirect unlawful payment, contribution or gift to any domestic or foreign
governmental official or employee; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977, as amended, or any
other U.S. or applicable foreign law relating to improper payments to
governmental representatives; or (iv) made any bribe, rebate, kickback,
payoff, influence payment, unlawful contribution or other illegal payment to
any person or entity.
28
4.26 LEASES. All leases of the real and personal property leased by
the Company and any Subsidiary, including all such leases with related
parties or Affiliates, are listed on Schedule 4.26. All leases with
Affiliates and related parties are identified in Schedule 4.26 and carry
terms and conditions no less favorable in all material respects to the
Company or such Subsidiary than those which the Company or such Subsidiary
could have obtained in arm's length transactions with unrelated third
parties. The Company and any such Subsidiary enjoys peaceful and undisturbed
possession under all such leases, and all of such leases are valid and in
full force and effect and neither party is in default under any of such
leases and, to the knowledge of the Company and the Company Shareholders, no
event has occurred which with the giving of notice or the passage of time or
both could constitute a default under any of such leases. All premises
covered by such leases have sufficient access to roads and utilities for the
continued conduct of the Business in the manner presently conducted.
4.27 PROPRIETARY RIGHTS. Schedule 4.27 lists (a) all trademarks,
tradenames, copyrights, patents, and all pending applications and
registrations for the foregoing used by the Company and the Subsidiaries in
the operation of their respective businesses (the items listed on Schedule
4.27, together with all logos, know-how, trade secrets, lists of past,
present and potential customers, computer software and programs, sales data,
sales and advertising materials, scheduling and service methods, sales and
service manuals, and all licenses for the foregoing, and all other
proprietary, confidential or other similar information (in whatever form or
medium) used by the Company and the Subsidiaries in the operation of their
respective businesses, including the use of and rights to the name "Tri-Star
Aerospace", being collectively referred to herein as the "Proprietary
Rights"), and (b) all license, royalty or other agreements relating to the
Proprietary Rights, true and complete copies of which have been delivered to
Parent. The Company and/or the Subsidiaries own(s) good title to all of the
Proprietary Rights, subject to the licenses and matters set forth in Schedule
4.27, all of which are sufficient to enable the Business, as now conducted,
to be conducted without infringement of or conflict with similar rights of
others. The use of the Proprietary Rights by the Company and the Subsidiaries
does not infringe on the known rights of any person or entity and no person
or entity has asserted any such claim. To the knowledge of the Company
29
and the Company Shareholders, no person or entity infringes upon the
Proprietary Rights.
4.28 INTEREST IN CUSTOMERS, ETC. Neither the Company, nor any
Subsidiary, nor any of their respective Affiliates has any direct or indirect
interest in any competitor, supplier or customer or in any person or entity
from whom or to whom the Company or any Subsidiary leases any real or
personal property or in any other person or entity with whom the Company or
any Subsidiary has any business relationship.
4.29 WARRANTIES. Schedule 4.29 summarizes all claims outstanding,
pending or, to the knowledge of the Company and the Company Shareholders,
threatened under or for breach of any warranty relating to any products sold
or distributed by the Company or any Subsidiary. The copies of the product
warranties attached to Schedule 4.29 represent true and complete copies of
all express warranties of products sold or distributed by the Company and the
Subsidiaries. The reserves for product warranty claims on the Latest Balance
Sheet are consistent with the Company's prior practices and are adequate to
cover warranty claims against any products sold or distributed by the Company
and the Subsidiaries prior to the date thereof.
4.30 OFFICERS AND DIRECTORS: BANK ACCOUNTS. Schedule 4.30 contains a
complete and correct list of (a) the names, offices and term of office of
each director and officer of the Company and each Subsidiary and (b) and
locations of all banks in which the Company or any Subsidiary has accounts or
safe deposit boxes and the names of all persons authorized to draw thereon or
to have access thereto. Except as set forth on Schedule 4.30, no person
holds a power of attorney to act on behalf of the Company or any Subsidiary.
4.31 DISCLOSURE. Neither this Article 4 nor any writing delivered by
the Company or the Company Shareholders to Parent, Sub, Merger Sub or the
Surviving Corporation in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits a material fact
necessary to make the statements contained herein and therein, in light of
the circumstances in which they were made, not misleading. There is no
material fact which has not been disclosed to Maple Leaf which materially
adversely affects the Company, the Subsidiaries or their assets, liabilities,
financial condition, operations, operating results, business or business
prospects, or the
30
ability of the Company and the Company Shareholders to consummate the
transactions contemplated hereby.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF MAPLE LEAF
Parent, Sub and Merger Sub hereby jointly and severally represent and
warrant to the Company and the Company Shareholders as follows:
5.1 ORGANIZATION: CORPORATE POWER AND GOOD STANDING. Each of Parent and
Sub is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Merger Sub is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Florida. Each of Parent, Sub and Merger Sub has full corporate power and
authority to execute and deliver this Agreement and the other agreements
contemplated hereby, to perform its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby.
5.2 CORPORATE AUTHORIZATION. The execution and delivery of this
Agreement and the other agreements contemplated hereby and the performance by
Parent, Sub and Merger Sub of their respective obligations hereunder And
thereunder have been duly authorized by all necessary corporate action and no
other corporate act on the part of Parent, Sub or Merger Sub is necessary to
authorize the execution, delivery or performance by Parent, Sub and Merger
Sub of this Agreement or any other agreement contemplated hereby or thereby.
This Agreement has been duly executed by Parent, Sub and Merger Sub, and
constitutes, and the other agreements contemplated hereby, and the
instruments and documents to be delivered by Parent, Sub and Merger Sub
hereunder, also constitute, the legal, valid and binding obligations of
Parent, Sub and Merger Sub enforceable against Parent, Sub and Merger Sub in
accordance with their respective terms (subject to bankruptcy,
reorganization, insolvency, and other similar laws relating to or affecting
the enforcement of creditors' rights generally and to the availability of
equitable remedies).
5.3 NO VIOLATION. Neither the execution and delivery of this
Agreement, nor the performance by Parent, Sub and Merger Sub of their
respective obligations hereunder nor the consummation of the transactions
contemplated hereby (a)
31
will violate, conflict with, result in any breach of, constitute a default
under, or result in the termination or acceleration of, Parent's, Sub's or
Merger Sub's certificate or articles of incorporation or By-Laws, or any
agreement, license, obligation or instrument to which Parent, Sub or Merger
Sub is a party or by which it is bound or affected; (b) would require the
consent of any other party under any agreement or commitment to which Parent,
Sub or Merger Sub is a party, or by which Parent, Sub or Merger Sub is bound;
or (c) will violate any law, judgment, decree, order, regulation or rule of
any court or governmental authority to which Parent, Sub or Merger Sub is
subject.
5.4 LITIGATION. There is no action, suit, investigation, proceeding,
claim or other pending or, to Parent's, Sub's and Merger Sub's knowledge,
threatened against or relating to Parent, Sub or Merger Sub, or any
properties or rights of Parent, Sub or Merger Sub, before any court which
affects or seeks to affect consummation of the transactions contemplated
hereby.
5.5 DISCLOSURE. Neither this Article 5 nor any writing delivered by
Parent, Sub or Merger Sub to the Company or the Company Shareholders in
connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits a material fact necessary to make the
statements contained herein and therein, in light of the circumstances in
which they were made, not misleading. There is no material fact which has not
been disclosed to the Company and the Company Shareholders which materially
adversely affects the ability of Parent, Sub and Merger Sub to consummate the
transactions contemplated hereby.
ARTICLE 6.
OTHER COVENANTS
6.1 ACCESS AND INVESTIGATION; CONFIDENTIALITY. (a) Between the date of
this Agreement and the Closing Date, the Company and Xxxxxxx X. Small shall
afford Maple Leaf and its representatives and prospective investors and
lenders and their representatives (collectively, the "Advisors") full and
free access, upon reasonable prior notice, to, and shall furnish upon
reasonable prior request, all information concerning the Company's and the
Subsidiaries' business and properties, including but not limited to
contracts, books, records, Tax, employee benefit, financial and accounting
32
information and physical inventory. The Company and Xxxxxxx X. Small shall
also afford Maple Leaf and the Advisors the ability to inspect the Company's
and the Subsidiaries' assets and physical locations (which inspection shall
include, but not be limited to, the right, but not the obligation, to retain
one or more environmental professionals to conduct an environmental
assessment and investigation of the Real Property, which Environmental
Investigation shall include the right to conduct such tests of soil,
groundwater, surface water or air that Maple Leaf may reasonably require to
determine whether there exists an adverse environmental condition at any of
the Real Property), and to contact and interview employees and
representatives of the Company and customers of the Company to obtain
information relating to the Company's assets and business. At all times, the
Company and the Company Shareholders will use their reasonable efforts to
ensure that any such information provided to Maple Leaf or the Advisors is
accurate and complete.
(b) In connection with the foregoing due diligence investigation, Maple
Leaf agrees not to disclose to any third party (other than on a "need to
know" basis to the Advisors) any financial data, market information, supplier
or customer list or other information which is proprietary or confidential to
the Company and which is learned or acquired by Maple Leaf or the Advisors in
connection with such due diligence investigation. In the event that the
transaction contemplated hereby shall, for any reason, be terminated, Maple
Leaf and the Advisors shall return to the Company all such information and
data, and shall not retain any copies or extracts thereof.
6.2 AGREEMENT TO COOPERATE TO OBTAIN CONSENTS AND APPROVALS. The
parties hereto each hereby agree to cooperate with one another and to use all
reasonable efforts to obtain all governmental and third party consents and
approvals to the Merger and as otherwise necessary to complete the
transactions contemplated by this Agreement (including all filings, if any,
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX
Xxx")), it being understood that in exercising such reasonable efforts, no
party shall be obligated to make any payment to a third party (other than in
connection with standard filing fees and the like) or to divest any assets,
properties or operations (including, with respect to Maple Leaf, any of the
Aviall Assets). Between the date of this Agreement and the Closing Date, the
Company shall (i) cooperate with
33
Parent and Sub with respect to all filings that Maple Leaf elect to make or
are required to make in connection with the Merger, and (ii) cooperate with
Maple Leaf in obtaining all consents identified in Schedule 4.16 (including
taking all actions requested by Maple Leaf to cause early termination of any
applicable waiting period under the HSR Act).
6.3 OPERATION OF THE BUSINESS. Between the date of this Agreement and
the Closing Date, the Company shall, and the Company and the Company
Shareholders shall cause the Company and each Subsidiary, as appropriate, to:
(a) conduct the Business only in the ordinary course of business
(consistent with past custom and practice) without the prior consent of
Parent, except that the Company may (i) make uniform distributions of S
corporation earnings to the Company Shareholders for purposes of meeting
income tax obligations as to the Company, XXXX and International consistent
with past custom and practice; (ii) immediately prior to and in conjunction
with the Closing (x) repay to the Company Shareholders all loans owing by the
Company to the Company Shareholders in an aggregate principal amount not to
exceed $1,500,000, and (y) make a distribution to the Company Shareholders in
the amount of $16,473,974, PLUS an amount equal to S corporation earnings
from April 1, 1996 to the Closing Date, MINUS the amount of any S corporation
earnings distributed to the Company Shareholders to meet income tax
obligations as provided in clause (i) above; and (iii) enter into such
transactions as are contemplated as conditions to Closing and which
transactions are to take place on the Closing Date in connection therewith;
(b) use its best efforts to preserve intact the current business
organization of the Company and each Subsidiary, keep available the services
of the current officers, employees, and agents of the Company and each
Subsidiary, and maintain the relations and good will with suppliers,
customers, landlords, creditors, employees, agents, and others having
business relationships with the Company and each Subsidiary; and
(c) confer with Parent and Sub concerning operational and financial
matters of a material nature.
6.4 NEGATIVE COVENANT. Except as otherwise expressly permitted by this
Agreement, between the date of this Agreement and the Closing Date, the
Company shall not, and
34
the Company and the Company Shareholders shall cause the Company and each
Subsidiary not to, without the prior consent of Parent, take any affirmative
action, or fail to take any reasonable action within their or its control, as
a result of which any of the changes or events listed in Section 4.24 is
likely to occur; PROVIDED, HOWEVER, that the Company may borrow funds to
finance the payment of shareholder loans referred to in Section 6.3 above.
6.5 NOTIFICATION. (a) Between the date of this Agreement and the
Closing Date, the Company and the Company Shareholders agree that each will
promptly notify Parent in writing if such party becomes aware of any fact or
condition that causes or constitutes a breach of any of the representations
and warranties of the Company or the Company Shareholders as of the date of
this Agreement, or if such party becomes aware of the occurrence after the
date of this Agreement of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or constitute a breach of any
such representation or warranty had such representation or warranty been made
as of the time of occurrence or discovery of such fact or condition. During
the same period, the Company and/or the Company Shareholders will promptly
notify Parent of the occurrence of any breach of any covenant of the Company
or the Company Shareholders in this Article 6 or of the occurrence of any
event that may make the satisfaction of the conditions in Article 7
impossible or unlikely.
(b) Between the date of this Agreement and the Closing Date, Parent
agrees that it will promptly notify the Company and the Representative in
writing if Parent becomes aware of any fact or condition that causes or
constitutes a breach of any of the representations and warranties of Maple
Leaf as of the date of this Agreement, or if Parent becomes aware of the
occurrence after the date of this Agreement of any fact or condition that
would (except as expressly contemplated by this Agreement) cause or
constitute a breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or
discovery of such fact or condition. During the same period, Parent will
promptly notify the Company and the Representative of the occurrence of any
breach of any covenant of Maple Leaf in this Article 6 or of the occurrence
of any event that may make the satisfaction of the conditions in Article 7
impossible or unlikely.
35
6.6 NO NEGOTIATION. Until such time, if any, as this Agreement is
terminated pursuant to its terms, the Company and each Company Shareholder
hereby agrees with Maple Leaf that neither the Company nor such Company
Shareholder, nor any of their respective Affiliates, officers, directors,
shareholders or employees, nor any investment banker, attorney, accountant or
other representative retained by any of them, shall, directly or indirectly,
solicit offers from, negotiate with, or in any manner encourage, discuss with
the offer or, or accept any proposal of any other person or entity relating
to the acquisition of the capital stock, assets or business of the Company or
any Subsidiary, in whole or in part, whether directly or indirectly, through
purchase, merger, consolidation or otherwise (other than sales of inventory
in the ordinary course). The Company will immediately notify Parent in the
event that the Company receives any such proposal or learns of any person's
or entity's interest in making any such proposal.
6.7 FURTHER ASSURANCES. The parties hereto hereby agree that, from
time to time, whether before or after the Closing Date, each of them will,
and will cause their respective Affiliates to, execute and deliver such
further instruments of conveyance and transfer and take such other action as
may be necessary to carry out the purposes and intents hereof. No party to
this Agreement shall take, or permit any of its Affiliates or representatives
to take, any actions which are inconsistent with the purposes and intentions
of this Agreement.
6.8 ADDITIONAL AGREEMENTS. The Company Shareholders shall, from time to
time after the Closing, upon the request of Parent, Sub, Merger Sub, or the
Surviving Corporation, perform, execute and deliver, or cause to be
performed, executed, and delivered, all such further acts and instruments as
may be required for the better assigning, transferring, granting, conveying,
assuring and confirming to the Surviving Corporation the rights, assets and
properties of the Company and each Subsidiary.
6.9 ALIENATION OF SHARES. Xxxxxxx X. Small agrees not to sell,
transfer, pledge, encumber or otherwise dispose of any Shares in the Company
or any shares in any Subsidiary owned by him between the date of the
Agreement and the Closing. Each of the other Company Shareholders agrees not
to sell, transfer, pledge, encumber or otherwise dispose of any of the Shares
in the Company or any shares in any Subsidiary, respectively, owned by them
between the date of
36
the Agreement and the Closing, except to a person or entity who shall agree
to be bound by the terms of this Agreement (including, without limitation, as
to the Company Shareholders' representations and warranties, covenants and
indemnification obligations) and execute and deliver to Parent, Sub and
Merger Sub a counterpart hereof.
6.10 NO SOLICITATION. (a) In the event the Closing is not effected,
Parent and Sub agree that neither they nor their agents will, for a period of
two years from the last date that the parties hereto, or any of them,
terminate the proposed transaction, directly or indirectly solicit for
employment any person who is employed by the Company on the date of this
Agreement; PROVIDED that Parent, Sub and their agents shall not be prohibited
from soliciting the employment of any such person (i) following any complete
termination of such person's employment with the Company, or (ii) who may
respond to a general advertisement for employment published by Parent or Sub
which is not specifically targeted at the employees of the Company.
(b) In the event the Closing is not effected, the Company agrees that
it will not, for a period of two years from the last date that the parties
hereto, or any of them, terminate the proposed transaction, directly or
indirectly solicit for employment any person who is or becomes employed by
Parent or Sub following the date of this Agreement; PROVIDED that the Company
shall not be prohibited from soliciting the employment of any such person (i)
following any complete termination of such person's employment with Parent or
Sub, or (ii) who may respond to a general advertisement for employment
published by the Company which is not specifically targeted at the employees
of Parent or Sub.
6.11 ACCESS TO INFORMATION. The Company Shareholders, the shareholders
of each Subsidiary and Parent will provide to each other, and Parent will
cause the Surviving Corporation to provide to the Company Shareholders and
the shareholders of each Subsidiary, full access, at any reasonable time and
from time to time, at the business location at which the books and records
are maintained, after the Closing Date, to such Tax data of the Company and
the Subsidiaries as the Company Shareholders, the shareholders of each
Subsidiary or Parent, as the case may be, may from time to time reasonably
request and will furnish, and request the independent accountants and legal
counsel of the Company Shareholders, the shareholders of
37
each Subsidiary, Parent or the Company to furnish to the Company
Shareholders, the shareholders of each Subsidiary or Parent, as the case may
be, such additional Tax and other information and documents in the possession
of such persons as the Company Shareholders, the shareholders of each
Subsidiary or Parent may from time to time reasonably request. In
particular, the Company Shareholders and the shareholders of each Subsidiary
will provide to Parent, to the extent. requested by Parent, true and complete
copies of all separate Tax Returns (and related workpapers) of the Company
and the Subsidiaries. Any examination of such books and records by the
Company Shareholders, the shareholders of each Subsidiary or Parent shall be
free of charge, but shall be at the expense of the requesting party.
6.12 SECTION 338 ELECTIONS AND RELATED MATTERS.
(a) Parent may elect, at Parent's sole option, to file an election
under Section 338(h) (10) of the Code and under any comparable provisions of
state or local law with respect to the purchase of the stock of the Company
and XXXX (the "Election"). Each of the shareholders of the Company and XXXX
shall, at the request of Parent, execute the appropriate IRS forms that are
required to make the Election (E.Q., Form 8023-A). If the Election is made,
each of such shareholders and Parent shall report, in connection with the
determination of income, franchise or other Taxes measured by net income, the
transactions being undertaken pursuant to this Agreement in a manner
consistent with the Election. In addition, if the Election is made, the
determination of the fair market value of the assets and the allocation of
the purchase price of the stock of the Company and XXXX (within the meaning
of Section 338(h) (10) of the Code and the Treasury Regulations promulgated
thereunder) shall be determined and allocated in accordance with Schedule
6.12 attached hereto. Parent and the shareholders of the Company and XXXX
shall file all Tax returns, as may be required, in a manner consistent with
such allocation and values.
(b) Parent shall notify the shareholders of the Company and XXXX in
writing of its intention to file the Election no later than ten days prior to
January 15, 1997 (the "Election Notice") and, upon delivery of the Election
Notice, Parent shall be obligated to make the Election on or before March 15,
1997.
(c) Within 60 days after the execution of this Agreement, the
shareholders of the Company and XXXX shall
38
provide Parent with a computation of the aggregate adjusted tax basis of the
assets of the Company and XXXX as of the opening of business on the first day
of the then current taxable year of the Company and XXXX (the "Asset Basis").
The Asset Basis shall be based on the Tax Returns and books and records (to
the extent not inconsistent with such Tax Returns) of the Company and XXXX.
(d) On the Closing Date, the shareholders of the Company and XXXX shall
deposit five copies of an Internal Revenue Service Form 8023-A, completed as
reasonably agreed by the parties in conformity with Schedule 6.12 hereto and
duly executed by such shareholders (the "Election Forms") with Parent.
(e) Parent shall be responsible for the preparation and filing of all
forms and documents required in connection with the Election. In connection
with the Election Notice, Parent shall provide the shareholders of the
Company and XXXX with copies of (i) any necessary corrections, amendments or
supplements to such Form 8023-A as reasonably agreed to by the parties or as
necessary to conform the allocation of the purchase price to Schedule 6.12
hereto, (ii) all attachments required to be filed therewith pursuant to
applicable Treasury Regulations, and (iii) any comparable forms and
attachments with respect to any applicable state or local elections being
made pursuant to the Election. At the request of Parent, the shareholders of
the Company and XXXX shall execute and deliver to Parent within 10 days of
receipt of the Election Notice such documents or forms as are required by any
tax laws to complete properly the Election. The shareholders of the Company
and XXXX and Parent shall cooperate fully with each other and make available
to each other such Tax data and other information as may be reasonably
required by such shareholders or Parent in order to timely file the Election
and any other required statements or schedules. The shareholders of the
Company and XXXX shall promptly execute and deliver to the Parent any
amendments subsequent to the filing of the Election to Form 8023-A (and any
comparable state and local forms) and attachments which are required to be
filed under applicable law and are reasonably requested by Parent.
(f) The shareholders of the Company and XXXX shall comply with all of
the requirements of Section 338(h) (10) of the Code and the Treasury
Regulations thereunder. Such shareholders shall take no action which is
39
inconsistent with the requirements for filing the Election under the Code and
the applicable Treasury Regulations.
(g) To the extent permitted by state and local laws, the principles and
procedures of this Section shall also apply with respect to a Section 338(h)
(10) election or equivalent or comparable provision under state or local law,
including, without limitation, an election under Section 338(g) of the Code
or equivalent or comparable provision under state or local law. The
shareholders of the Company and XXXX covenant and agree that, to the extent
that an election similar to a Section 338(h) (10) election under the Code is
optional under any state or local law, if so directed by Parent, such
shareholders shall join in any such election as designated by Parent in the
Election Notice.
6.13 TRI-STAR CANADA. Prior to the Closing, the Company shall wind down
and terminate the business operations of Tri-Star Canada.
6.14 USE OF NAME. The Company Shareholders hereby agree that, upon the
consummation of the transactions contemplated hereby, Parent and the
Surviving Corporation shall have the sole right to the use of the name
"Tri-Star Aerospace" and the Company Shareholders shall not, and shall not
cause or permit any of their Affiliates to, use such name or any variation or
simulation thereof in any business activity.
6.15 ELECTIONS. The Company Shareholders and the shareholders of XXXX
and Tri-Star U.K. will cause the Company and each Subsidiary to refrain from
making, filing, or entering into any election, consent, or agreement
described in Section 4.15(e) hereof with respect to the Company, any
Subsidiary or any of their assets.
6.16 TAX CLAIMS. The Company and each Subsidiary shall, and the
shareholders of the Company and each Subsidiary shall cause the Company and
each Subsidiary to, notify Parent immediately upon the commencement of any
claim, audit, examination or other proposed change or adjustment by any
taxing authority with respect to the Company or any Subsidiary. The Company
shall not, and the Company Shareholders and the shareholders of each
Subsidiary shall cause the Company and each Subsidiary not to, settle or
enter into any agreement with respect to any such claim, audit, examination,
change or adjustment without the consent of Parent.
40
6.17 WAIVER OF CLAIMS UNDER THE FBCA. By his or her execution hereof,
each Company Shareholder acknowledges and agrees (a) to the fairness of the
Merger Consideration and (b) that he or she will not assert any claim or
right under, and hereby irrevocably waives any claims with respect to, the
dissenting stockholder provisions of the FBCA in connection with the
transactions contemplated hereby.
6.18 LIQUIDATION OF INTERNATIONAL. Immediately prior to and in
conjunction with the Closing, the Company and the other shareholders of
International shall cause International to liquidate and to distribute in
liquidation to each of the shareholders of International (including the
Company) their pro rata shares of the net assets of International (including
each shareholder's pro rata portion of the net account receivable owed to
International by the Company) and of obligations shown as dividends payable
on a certain Current Status of Financial Condition dated 8/27/96 in the
aggregate sum of $558,942. Notwithstanding anything to the contrary in this
Agreement, the Company and the other shareholders of International shall
cause International not to pay any dividend or other distribution to or on
behalf of its stockholders other than the distribution in liquidation
described in the immediately preceding sentence.
ARTICLE 7.
CLOSING CONDITIONS
7.1 CONDITIONS TO PARENT'S, SUB'S AND MERGER SUB'S OBLIGATION TO CLOSE.
The obligations of Parent, Sub and Merger Sub hereunder shall be subject to
the fulfillment (or written waiver) on or before the Closing Date of each of
the following conditions and delivery of the following:
7.1.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE COMPANY
SHAREHOLDERS; COMPLIANCE WITH AGREEMENT. The representations and
warranties of the Company, the Company Shareholders and the shareholders
of the Subsidiaries in this Agreement shall be true and correct in all
respects on and as of the Closing Date with the same effect as though all
such representations and warranties had been made as of such date. Each
and all of the covenants and agreements of the Company and/or the Company
Shareholders and the shareholders of the Subsidiaries to be performed by
any or all of them at or before the Closing shall have been performed. The
Company shall deliver to Parent, Sub and Merger Sub a
41
certificate of its President and Secretary or Assistant Secretary, and
each of the Company Shareholders and the shareholders of the Subsidiaries
shall deliver to Parent, Sub and Merger Sub a certificate executed by such
Company Shareholder or Subsidiary shareholder, in each case, dated the
Closing Date, to that effect.
7.1.2 STOCK CERTIFICATES. The Company Shareholders and the
shareholders of each Subsidiary shall have surrendered to Parent the stock
certificates representing all of the Shares of Common Stock of the Company
and all shares of stock of the Subsidiaries, duly endorsed in blank, or,
with respect to uncertificated shares of XXXX, appropriate instruments of
transfer of ownership with respect thereto.
7.1.3 ESCROW AGREEMENT. Receipt by Parent of a fully executed copy
of the Escrow Agreement in form and substance reasonably acceptable to the
parties thereto.
7.1.4 WAIVER AGREEMENTS. Receipt by Parent of fully executed copies
of waiver agreements pursuant to which all persons with contractual or
statutory rights of indemnification against or from the Company agree to
waive such rights as against the Surviving Corporation, such waiver
agreements to be in form and substance reasonably acceptable to the parties
thereto.
7.1.5 NON-COMPETITION AGREEMENT. Receipt by Parent of fully
executed Non-Competition Agreements between Parent, Sub, the Surviving
Corporation and each of Xxxxx X. Xxxxxx and Xxxx X. Xxxxxxxxx, in form and
substance reasonably acceptable to the parties thereto, providing that each
of Messrs. Xxxxxx and Xxxxxxxxx agree not to compete with the business of
the Surviving Corporation in the United States for a period of two years
from the Closing Date.
7.1.6 CONTRACTS. All of the Company's material contracts listed on
Schedule 7.1.6 attached hereto and made a part hereof shall remain in
substantial force and effect, it being understood that changes to such
contracts not materially adverse to the Surviving Corporation and the
Subsidiaries as a whole shall satisfy this condition.
7.1.7 ABSENCE OF MATERIAL CHANGE. The absence of any material
adverse change in the assets, liabilities,
42
condition (financial or otherwise), operating results, business or
business prospects of the Company, except for those referred to in
Section 6.3(a) hereof, occurring between the date hereof and the Closing
Date.
7.1.8 REGULATORY APPROVALS. Receipt by Parent, Sub, Merger Sub, the
Company and the Company Shareholders of all regulatory approvals necessary
for consummation of the Merger, including, if applicable, the expiration
(or early termination) of waiting periods under the HSR Act, and
satisfaction of all other applicable legal requirements.
7.1.9 LEASES. With respect to the leases set forth on Schedule
7.1.9, receipt by Parent of written consents of the respective lessors
thereunder providing for continued occupancy by the Surviving Corporation
until at least December 31, 1997.
7.1.10 CONSENTS. Receipt by Parent of copies of all written consents,
including the Defined Consents, required for the Merger, shall have been
received by Parent, Sub and Merger Sub and must be in full force and
effect.
7.1.11 RESIGNATIONS. Receipt by Parent of written resignations of
each officer and director of the Company and any Subsidiary, and amended
authorized signatory resolutions for each bank account of the Company and
each Subsidiary, in each case, as requested by Parent, together with a
statement of the aggregate amount of all outstanding checks under any such
bank account.
7.1.12 FINANCING. (a) Parent, Sub and Merger Sub shall have received
financing from one or more financial institutions on terms and conditions
acceptable to them in their sole discretion in an amount sufficient, in
their sole discretion, to consummate the transactions contemplated under
this Agreement, the concurrent acquisition of the Aviall Assets, and to
provide adequate working capital to operate the business of the Surviving
Corporation thereafter, and (b) Parent shall have received a fully
executed copy of (i) the Subscription Agreement of an S corporation to be
formed by Xxxxxxx X. Small subscribing for shares of Parent, in form and
substance reasonably acceptable to the parties thereto, together
43
with payment of the subscription price specified therein in immediately
available funds, and (ii) a Stockholders' Agreement among Parent and its
stockholders in form and substance reasonably acceptable to the parties
thereto.
7.1.13 CONCURRENT CLOSING OF AVIALL TRANSACTION. The closing,
concurrently with or immediately following the Closing, of the acquisition
by Parent or an Affiliate of Parent of the Aviall Assets pursuant to that
certain Asset Purchase Agreement among Parent, Aviall Services, Inc. and
Aviall (Canada) Ltd.
7.1.14 CERTIFICATE OF GOOD STANDING. Receipt by Parent of a
Certificate of Good Standing with respect to the Company issued by the
Office of the Secretary of State of the State of Florida and dated not
more than ten (10) days prior to the Closing Date.
7.1.15 ARTICLES OF INCORPORATION; BY-LAWS. Receipt by Parent of
copies of the Articles of Incorporation of the Company certified by the
Secretary of State of the State of Florida and ByLaws of the Company,
certified by the Secretary or Assistant Secretary of the Company.
7.1.16 EMPLOYMENT CONTRACT. Receipt by Parent of a fully executed
copy of an employment contract between Parent and Xxxxxxx X. Small in form
and substance reasonably acceptable to the parties thereto.
7.1.17 RESOLUTIONS; INCUMBENCY. Receipt by Parent of a copy of
resolutions adopted by the Board of Directors and stockholders of the
Company authorizing the execution and delivery of this Agreement and each
document to be executed by the Company and consummation of the
transactions contemplated hereby, in each case certified by the Secretary
or Assistant Secretary of the Company, together with customary
certifications as to the incumbency of relevant officers thereof.
7.1.18 OPINION OF COUNSEL. Receipt by Maple Leaf of an opinion of
XxXxxxx Xxxxx & Xxxxx, counsel for the Company and the Company
Shareholders, in form and substance reasonably acceptable to Maple Leaf.
7.1.19 FIRPTA AFFIDAVIT. Each Company Shareholder and the
shareholders of XXXX and Tri-Star
44
U.K. shall have provided Parent with an affidavit of non-foreign status
that complies with Treasury Regulation Section 1.1445 promulgated pursuant
to the Code.
7.1.20 BOOKS AND RECORDS. Delivery to Maple Leaf of the books and
records described in Section 4.10.
7.1.21 NO INJUNCTION. At the Closing Date there shall be no
injunction, restraining order or decree, or pending or threatened
litigation, of any nature of any court, governmental authority of
competent jurisdiction or other third party that is in effect that
threatens, restrains, prohibits, or seeks to enjoin the consummation of
the transactions contemplated hereby.
7.1.22 SECTION 338(h) (10) ELECTION. Each Company Shareholder and
the shareholders of XXXX shall have delivered to Parent five (5) executed
copies of IRS Form 8023-A completed pursuant to Section 6.12 and in
conformity with the allocation of the purchase price set forth on Schedule
6.12 hereto, and such other documentation as shall be necessary to make a
valid election under Section 338(h) (10) of the Code with respect to the
Merger and the acquisition of the Company and XXXX pursuant hereto.
7.1.23 BASE AMOUNT CERTIFICATE. Receipt by Parent of a certificate
of the President and the Chief Financial Officer of the Company certifying
as to the Company's belief that its stockholders' equity as at the Closing
Date, after giving effect to the transactions contemplated by Section
6.3(a) hereof, is not less than the Base Amount (as defined in Section
3.3(f)).
7.1.24 LIQUIDATION OF INTERNATIONAL. The Company and the other
shareholders of International shall have caused the liquidation of
International as described in Section 6.18.
7.1.25 FURTHER INSTRUMENTS. Receipt by Maple Leaf of such further
instruments of assignment, conveyance or transfer or other documents of
further assurance as Parent, Sub or Merger Sub may reasonably request in
connection with the Merger.
45
7.2 CONDITIONS TO THE COMPANY'S AND THE COMPANY SHAREHOLDERS'
OBLIGATION TO CLOSE. The obligations of the Company and the Company
Shareholders hereunder shall be subject to the fulfillment (or written
waiver) on or before the Closing Date of each of the following conditions and
delivery of the following:
7.2.1 REPRESENTATIONS AND WARRANTIES OF PARENT, SUB AND MERGER SUB;
COMPLIANCE WITH AGREEMENT. The representations and warranties of Parent,
Sub and Merger Sub in this Agreement shall be true and correct in all
respects on and as of the Closing Date with the same effect as though all
such representations and warranties had been made as of such date. Each
and all of the agreements of Parent, Sub and Merger Sub, to be performed
at or before the Closing shall have been performed. Each of Parent, Sub
and Merger Sub shall deliver to the Company and the Representative a
certificate of its President and Secretary, dated the Closing Date, to
that effect.
7.2.2 MERGER CONSIDERATION. Payment of the Fixed Merger
Consideration in the manner set forth in Section 3.2(a).
7.2.3 RESOLUTIONS; INCUMBENCY. Receipt by the Company and the
Company Shareholders of a copy of resolutions adopted by the Board of
Directors of each of Parent, Sub and Merger Sub authorizing the execution
and delivery of this Agreement and each document to be executed by Parent,
Sub and Merger Sub, respectively, and the consummation of the transactions
contemplated hereby, in each case, certified by the Secretary of Parent,
Sub and Merger Sub, respectively, together with customary certifications
as to the incumbency of relevant officers thereof.
7.2.4 CERTIFICATE OF GOOD STANDING. Receipt by the Company and the
Company Shareholders of a Certificate of Good Standing of (a) Parent and
Sub issued by the Office of the Secretary of State of the State of
Delaware and (b) Merger Sub issued by the Office of the Secretary of
State of the State of Florida, in each case, dated not more than ten
(10) days prior to the Closing Date.
7.2.5 CERTIFICATE OF INCORPORATION; BY-LAWS. Receipt by the Company
and the Company Shareholders of
46
copies of (a) the Certificate of Incorporation of each of Parent and Sub
certified by the Secretary of State of the State of Delaware, (b) the
Articles of Incorporation of Merger Sub certified by the Secretary of
State of the State of Florida, and (c) the ByLaws of Parent, Sub and
Merger Sub certified by their respective Secretaries.
7.2.6 OPINION OF COUNSEL. Receipt by the Company and the Company
Shareholders of an opinion of Xxxxxxxx & Xxx, PLC, counsel for Parent, Sub
and Merger Sub, in form and substance reasonably acceptable to the Company
and the Representative.
7.2.7 EMPLOYMENT CONTRACT; STOCKHOLDERS' AGREEMENT. Receipt by
Xxxxxxx X. Small of a fully executed copy of (i) an employment contract
between Parent and Xxxxxxx X. Small in form and substance reasonably
acceptable to the parties thereto, and (ii) a Stockholders' Agreement among
Parent and its stockholders in form and substance reasonably acceptable to
the parties thereto.
7.2.8 REGULATORY APPROVALS. Receipt by the Company, the Company
Shareholders, Parent, Sub and Merger Sub of all regulatory approvals
necessary for consummation of the Merger, including, if applicable, the
expiration (or early termination) of waiting periods under the HSR Act, and
satisfaction of all other applicable legal requirements.
7.3 POST-CLOSING ACTIONS. The following actions shall take place
immediately following, and in conjunction with, the Closing:
7.3.1 PAYMENT OF COMPANY RECEIVABLE. The Surviving Corporation
shall pay to the former shareholders of International (other than the
Company): (i) the obligations shown as dividends payable to minority for
1994 and 1995 on a certain Current Status of Financial Condition dated
8/27/96 in the aggregate sum of $145,083 (which sum is part of, and shall
be deemed paid upon payment of, the Fixed Merger Consideration), and (ii)
in full satisfaction thereof, the outstanding balance (but not more than
$1,121,972) of that portion of the net account receivable (which previously
was owed by the Company to International) that, as a result of the
liquidation of International
47
described in Section 6.18, is then owed directly to the former shareholders
of International (other than the Company).
7.3.2 PURCHASE OF XXXX AND TRI-STAR U.K. Sub and each shareholder
of XXXX and Tri-Star U.K. shall execute an agreement, in form and substance
reasonably acceptable to the parties thereto, whereby Sub shall acquire all
of the outstanding shares of XXXX and Tri-Star U.K. for no consideration in
addition to the Merger Consideration.
ARTICLE 8.
INDEMNIFICATION
8.1 INDEMNITY BY THE COMPANY SHAREHOLDERS. Without limitation of any
other provision of this Agreement or any other rights and remedies available
to Parent, Sub, Merger Sub or the Surviving Corporation at law or in equity,
the Company Shareholders severally covenant and agree to indemnify, defend
and hold harmless Parent, Sub, Merger Sub, the Surviving Corporation, and
their respective successors, assigns, Affiliates, directors, officers,
stockholders, partners, employees and agents (the "ACQUIROR INDEMNIFIED
PARTIES") from and against any and all liabilities, losses, claims, demands,
damages, judgments, interest, penalties, fines, costs and expenses (including
reasonable attorneys' and accountants' fees and expenses) (collectively
"LOSSES") arising out of, in connection with, relating to or resulting from
(i) a breach by the Company or such Company Shareholder of any of the
representations and warranties or covenants made by it, him, her or them, as
appropriate, in this Agreement and/or in the documents delivered in
connection herewith; (ii) claims, lawsuits, actions, proceedings, obligations
and other liabilities under any of the Employee Benefit Plans, and claims,
lawsuits, actions, proceedings, and other liabilities of any current or
former employee of, or applicant for employment with, the Company or any
Subsidiary, or any beneficiary or executor of the estate of any of the
foregoing, arising out of events, acts or inactions occurring on or before
the Closing; (iii) claims, lawsuits, actions, proceedings, and other
liabilities arising out of the conduct of the Company's or any Subsidiary's
business, or their leasing, ownership or use of their properties or assets,
or any transaction entered into by any of them, or any liability for or in
respect of Taxes, in each case, for, attributable to or in respect of periods
48
ending on or before the Closing; PROVIDED, HOWEVER, that with respect to
claims under clauses (i), (ii) and (iii), the Company Shareholders shall be
obligated hereunder only to the extent that such Losses (A) (with the
exception of Losses suffered as a result of a breach of the representations
and warranties set forth in Section 4.15(i), which shall be paid without
deductible) exceed $300,000 in the aggregate and do not exceed $30,500,000 in
the aggregate and as to each Company Shareholder his or her proportionate
share of the Merger Consideration, PROVIDED that such monetary limitations
shall not apply to Losses arising out of fraud, intentional misrepresentation
or intentional breach of any covenant, (B) are not covered by insurance (to
the extent the Acquiror Indemnified Party actually receives the proceeds of
any insurance payment in respect thereof), (C) are not specifically disclosed
in this Agreement or the schedules thereto, (D) have not been provided for in
the Latest Balance Sheet, and (E) have not been incurred in the ordinary
course of the Business, consistent with past custom and practice, since the
date of the Latest Balance Sheet; and (iv) the pending lawsuits between the
Company and Messrs. Rourke and Xxxxx, respectively, as more specifically set
forth on Schedule 4.14 hereto and any other adverse claim (or corporate acts
undertaken to eliminate any such claim) asserted by or on behalf of such
persons with respect to (1) the Company Shareholders' ownership of all of the
Shares or (2) the ownership by the persons listed on Schedule 4.3(c) of all
the shares of XXXX.
8.2 INDEMNITY BY PARENT, SUB AND MERGER SUB. Without limitation of any
other provision of this Agreement, Parent, Sub and Merger Sub covenant and
agree to indemnify, defend and hold harmless the Company Shareholders from
all liabilities, losses, claims, demands, damages, judgments, interest,
penalties, fines, costs and expenses (including reasonable attorneys' and
accountants' fees and expenses) arising out of, or in connection with, or
relating to a breach by Parent, Sub or Merger Sub of any of the
representations and warranties or covenants made by them in this Agreement
and/or in the documents delivered in connection herewith.
8.3 PROCEDURE AND PAYMENT. If, after the Closing Date, either the
Company Shareholders, on the one hand, or the Acquiror Indemnified Parties,
on the other hand, ("INDEMNITEE") shall receive notice of any third-party
claim or alleged third-party claim asserting the existence of any matter of a
nature as to which the Indemnitee has been
49
indemnified against under this Article 8 by the other party hereto
("INDEMNITOR"), Indemnitee shall promptly notify Indemnitor in writing with
respect thereto; provided that any delay or failure by Indemnitee to provide
such notice shall not impair or affect its rights hereunder or the obligation
of Indemnitor with respect to such claim except to the extent Indemnitor can
demonstrate that it was actually prejudiced by Indemnitee's delay in giving
or failure to give such notice. Indemnitor shall have the right to defend
against any such third-party claim (other than any claim in respect of
Taxes), provided that (i) Indemnitor shall, within ten (10) days after the
giving of such notice by Indemnitee, notify Indemnitee that it disputes such
claim, give reasons therefor, and that Indemnitor will, at its own cost and
expense, defend the same, and (ii) such defense is instituted and
continuously maintained in good faith by Indemnitor. In such event the
defense may, if necessary, be maintained in the name of Indemnitee.
Indemnitee may, if it so elects, designate its own counsel to participate
with the counsel selected by Indemnitor in the conduct of such defense.
Indemnitor shall not permit any Lien or execution to attach to the assets of
the Indemnitee as a result of such claim, and the Indemnitor shall provide
such bonds or deposits as shall be necessary to prevent the same. In any
event Indemnitee shall be kept fully advised as to the status of such
defense. If Indemnitor shall be given notice of a claim as aforesaid and
shall fail to notify Indemnitee of its election to defend such claim within
the time and as prescribed herein, or after having so elected to defend such
claim shall fail to institute and maintain such defense in accordance with
the foregoing, or if such defense shall be unsuccessful then, in any such
event, the Indemnitor shall fully satisfy and discharge the claim within ten
(10) days after notice from Indemnitee requesting Indemnitor to do so.
8.4 OTHER CLAIMS. In the event one party hereunder should have a claim
for indemnification that does not involve a claim or demand being asserted by
a third party, the party seeking indemnification shall promptly send notice
of such claim to the party from whom indemnification is sought. If the
latter disputes such claim, such dispute shall be resolved, to the extent
possible, by agreement of the parties.
8.5 SUBROGATION. The rights of any Indemnitor shall be subrogated to
any rights of action which the Indemnitee may have against any other person
or entity with respect to
50
any matter giving rise to a claim for indemnification hereunder.
8.6 TAX CLAIMS. From and after the Closing, Parent or an Affiliate of
Parent shall have the sole right to represent the Company and each Subsidiary
in any Tax audit or administrative or court proceeding relating to Taxes of
the Company or any Subsidiary. Parent or such Affiliate shall not enter into
any settlement or closing or other agreement with respect to Taxes for which
a claim for indemnification will be made by the Acquiror Indemnified Parties
without the consent of the Representative, which consent will not be
unreasonably withheld.
8.7 PURCHASE PRICE ADJUSTMENT. The Company Shareholders and Parent
agree that any indemnity payment made under this Article 8 will be treated by
the parties on their respective Tax Returns as an adjustment to the purchase
price. If, notwithstanding such treatment by the parties, any indemnity
payment is determined by any taxing authority to be subject to Tax payable by
the Acquiror Indemnified Parties, the Company Shareholders also shall
indemnify the Acquiror Indemnified Parties for any increase in Tax liability
that is imposed on and paid by the Acquiror Indemnified Parties by reason of
the receipt of such indemnity payment. An indemnity payment otherwise due and
payable under this Article 8 shall be decreased (but not below zero) to take
into account any Tax benefit realized by the Indemnitee.
ARTICLE 9.
TERMINATION
9.1 TERMINATION DATE. In the event that the Closing has not occurred
on or before September 16, 1996, the rights, duties and obligations of the
parties under this Agreement, with the exception of (i) the obligations of
Parent and Sub under Section 6.1(b) and the parties' agreements set forth in
Sections 10.2 and 10.6, and (ii) a party's right to pursue all remedies
available to it for any breach by another party, shall be terminated, unless
the parties agree in writing to extend such date.
51
ARTICLE 10.
MISCELLANEOUS
10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except as provided in
the following sentence, the respective representations and warranties of each
party contained in this Agreement and in any instrument of sale, assignment,
conveyance and transfer executed and delivered pursuant to this Agreement
shall survive the Closing until the later of (i) eighteen months following
the Closing Date or (ii) April 30, 1998. Notwithstanding the foregoing, the
representations and warranties set forth in Section 4.15(i) shall survive the
Closing until the expiration of the relevant Tax statute of limitations
applicable to the third full taxable year ending after the Closing Date of
Parent, any subsidiary or affiliate of Parent or any combination thereof.
10.2 DISCLOSURE AND CONFIDENTIALITY. (a) The parties agree to hold the
terms and conditions of this Agreement, and all other agreements contemplated
herein (including the Letter of Intent dated May 30, 1996), in strict
confidence and not to make any disclosure with respect thereto, publicly or
privately, other than as jointly agreed by the parties. If a party is
required to make any such disclosure by applicable law or stock exchange
rules or regulations, it must first provide to the other party the content of
the proposed disclosure, the reasons that such disclosure is required by law
or stock exchange rules or regulations, and the time and place that the
disclosure will be made; provided that the other party shall have the right
to review and comment on such proposed disclosure statement prior to its
release.
10.3 BROKERS. Each party warrants to the other that it has not
employed or used the services of any broker or finder in connection with the
transaction contemplated by this Agreement except that Parent has used the
services of Equitable Securities Corporation and Parent shall pay all fees
and expenses due to Equitable Securities Corporation. Each party agrees to
indemnify and hold the other party harmless from any loss or damage arising
from any claim made by any broker or finder allegedly based on the actions of
such indemnifying party.
10.4 GOVERNING LAW; CONSTRUCTION; SUBMISSION TO JURISDICTION. This
Agreement and the rights and obligations of the parties hereunder shall be
governed by, construed and
52
enforced in accordance with the laws of the State of Delaware without giving
effect to conflicts of law provisions. The parties hereto hereby irrevocably
submit to the exclusive jurisdiction of any federal or state court located
within the State of Delaware over any dispute arising out of or relating to
this Agreement or any of the transactions contemplated hereby and each party
hereby irrevocably agrees that all claims in respect of such dispute or any
suit, action or proceeding related thereto may be heard and determined in
such courts. The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now or hereafter
have to the laying of venue of any such dispute brought in such court or any
defense of inconvenient forum for the maintenance of such dispute. Each of
the parties hereto agrees that a judgment in any such dispute may be enforced
in other jurisdictions by suit on the judgment or in any other manner
provided by law. Each of the parties hereto hereby consents to process being
served by any party to this Agreement in any suit, action or proceeding by
the mailing of a copy thereof in accordance with the provisions of Section
10.9.
10.5 AMENDMENTS. Subject to the applicable provisions of the FBCA, at
any time prior to the Effective Time, this Agreement may be modified or
amended by the Company, Parent, Sub and Merger Sub by written agreement
executed and delivered by their respective duly authorized officers;
PROVIDED, HOWEVER, that no amendment shall be made which pursuant to the FBCA
requires the approval of the Company Shareholders without such approval.
Subject to the preceding sentence, any provision of this Agreement may be
amended or waived, provided that any such amendment or waiver shall only be
binding on a party if set forth in a writing executed by such party.
10.6 EXPENSES. Except as set forth in Sections 3.3 and Article 8
hereof, each party hereto shall pay its own fees and expenses incurred in
connection with this transaction.
10.7 COMPLETENESS OF AGREEMENT. This Agreement, the Schedules, and
Exhibits hereto and the other documents referred to or provided for herein
represent the entire agreement among the parties with respect to the subject
matter hereof, and shall not be modified or affected by any offer, proposal,
statement or representation, oral or
53
written, made by or for any party in connection with the negotiation of the
terms hereof.
10.8 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, personal
representatives, heirs and assigns, but neither this Agreement nor any of the
rights hereunder shall be assigned by any party hereto without the prior
written consent of the other party, provided that the Company and the Company
Shareholders hereby consent to the assignment by Parent, Sub and/or Merger
Sub of the rights and benefits hereunder of Parent, Sub and/or Merger Sub as
security for borrowings, or to any Affiliates of Parent.
10.9 NOTICES. Any notice, request, demand, waiver, consent, or other
communication required or permitted hereunder shall be in writing and shall
be deemed given when actually delivered, as follows:
(i) If to Parent
Sub or Merger
Sub to: Maple Leaf Aerospace, Inc.
0000 Xxxxxxxxxx
Xxxxx Xxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx,
President
With copies
(which shall
not constitute
notice) to: Xxxxxxxx & Xxx, PLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx I. N. XxXxxxxx, Esq.
With copies
(which shall
not constitute
notice) to: Odyssey Partners, L.P.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mr. Xxxxxxx Xxxxxx
- and -
54
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Simeon Gold, Esq.
(ii) If to
the Company to: Tri-Star Aerospace, Inc.
00000 Xxxx Xxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Small, President
With a copy to: XxXxxxx Xxxxx & Xxxxx
000 Xxxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: G. Xxxx Xxxxxxxx, Xx., Esq.
(iii) If to the
Representative,
to: Xx. Xxxxxxx X. Small
c/o Tri-Star Aerospace, Inc.
00000 Xxxx Xxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
(iv) If to a
Company
Shareholder to: Such Company Shareholder's address set forth on the
signature pages hereto.
With a copy to: XxXxxxx Xxxxx & Xxxxx at its address set forth above.
Notices may be delivered to such other person or address as a party may
furnish to the other parties in writing.
10.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and shall become
effective when one or more counterparts have been signed by each of the
parties hereto and delivered to the other.
10.11 NO BENEFIT TO OTHERS. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and their respective successors, personal representatives,
heirs, and permitted assigns, and they shall not be construed as conferring
any rights on any other persons, including without limitation, any employees
of the Company.
55
10.12 SCHEDULES AND HEADINGS. The information set forth in the
Schedules hereto is deemed to have been disclosed for all purposes of this
Agreement and is incorporated herein and made a part of this Agreement. The
headings contained in this Agreement are inserted for convenience only and
shall not constitute a part hereof.
10.13 CERTAIN DEFINITIONS. As used in this Agreement, "Affiliate"
shall mean, with respect to any person or entity, any other person or entity
controlling, controlled by or under common control with, in each case,
through the ownership of securities, by contract or otherwise, the first
mentioned person or entity.
[signature pages follow]
56
IN WITNESS WHEREOF, the parties hereto have, as appropriate, executed or
caused this Agreement to be duly executed by their duly authorized
representatives, as of the day and year first above written.
[PARENT]
MAPLE LEAF AEROSPACE INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxxxxxx, President
By: /s/ Xxxxxxxx Xxxxx
--------------------------------------------
Xxxxxxxx Xxxxx, Vice President
[SUB]
AEROSPACE ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxxxxxx, President
By: /s/ Xxxxxxxx Xxxxx
--------------------------------------------
Xxxxxxxx Xxxxx, Vice President
[MERGER SUB]
AEROSPACE MERGER SUB I, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxxxxxx, President
By: /s/ Xxxxxxxx Xxxxx
--------------------------------------------
Xxxxxxxx Xxxxx, Vice President
[THE COMPANY]
TRI-STAR AEROSPACE, INC.
By: /s/ Xxxxxxx X. Small
--------------------------------------------
Xxxxxxx X. Small, President
57
[THE COMPANY SHAREHOLDERS]
/s/ Xxxxxxx Xxxxxxxxx
---------------------------------------------
Xxxxxxx Xxxxxxxxx
Address: c/o Tri-Star Aerospace, Inc.
0000 Xxxxxxxxx 00xx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------------------
Xxxxxx X. Xxxxxxxx
Address: c/o Tri-Star Aerospace, Inc.
0000 Xxxxxxxxx 00xx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
/s/ Xxxx X. XxXxxxxx
---------------------------------------------
Xxxx X. XxXxxxxx
Address: 0000 Xxxxxx Xxxx
Xxxx Xxxxx, Xxxxx 00000
/s/ Xxxxx X. Xxxxxx
---------------------------------------------
Xxxxx X. Xxxxxx
Address: 00000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
/s/ Xxxxxxx X. Xxxxxxx, Xx.
---------------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
Address: X.X. Xxx 0000
Xxxxx Xxxxxxx, Xxxxxxx 00000
/s/ Xxx X. Xxxxx
---------------------------------------------
Xxx X. Xxxxx
Address: c/o Tri-Star Aerospace, Inc.
00000 Xxxx Xxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
/s/ Xxxxx X. Xxxxxx
---------------------------------------------
Xxxxx X. Xxxxxx
Address: c/o Tri-Star Aerospace, Inc.
0000 Xxxxxxxxx 00xx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
58
/s/ Xxxx X. Xxxxxxxxx
---------------------------------------------
Xxxx X. Xxxxxxxxx
Address: 0000 Xxxxx 000xx Xxxxx
Xxxxx X-000
Xxxx, Xxxxxxxxxx 00000
/s/ Xxxxxx Xxxxxxxx
---------------------------------------------
Xxxxxx Xxxxxxxx
Address: 00000 Xxxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, XX 00000
/s/ Xxxxx X. Small
---------------------------------------------
Xxxxx X. Small
Address: c/o Tri-Star Aerospace, Inc.
00000 Xxxx Xxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
/s/ Xxxxxxx X. Small
---------------------------------------------
Xxxxxxx X. Small
Address: c/o Tri-Star Aerospace, Inc.
00000 Xxxx Xxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
59
