Exhibit 10.2
FUNDING AND OPERATION AGREEMENT
BY AND BETWEEN Old Mission Assessment Corporation, (hereinafter "OMAC") or
its Assignee, Xxxxxxxx Aerospace Technology, Inc. (hereinafter "HAT") and
certain individuals identified as follows:
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxx (hereinafter referred to collectively or as "Individuals"
or individually as "Xxxxx," "X. X. Xxxxxxxx," "Xxxxxx" or "Xxxxxxx")
WHEREAS, HAT and Xxxxxxxx Aviation, Inc. (hereinafter "Xxxxxxxx") have entered
into a Sale of Asset Agreement (hereinafter "SAA") dated 04/15/02.
WHEREAS, Xxxxxxxx currently holds and operates an FAA repair station certificate
and has agreed to work with and contract with HAT at HAT's discretion for
Xxxxxxxx to perform required repair station services on behalf of HAT on an as
needed basis until HAT receives its FAA Certificate.
WHEREAS, Xxxxxxxx has agreed to provide a Lease/Purchase of certain equipment
and inventory as designated by HAT which will be necessary for the FAA
certification of HAT and the operation of the Repair Station by HAT, and that
said Lease/Purchase will be subject to the SAA, but in the event that closing on
the SAA does not occur by July 15, 2002, HAT may fully enforce the terms of the
Lease/Purchase, which will then become controlling and supersede the SAA and, at
such time, HAT may at its option, either purchase said inventory and equipment
for cash or continue to purchase the equipment under the fully amortized
schedule of the Lease/Purchase Agreement.
WHEREAS, OMAC and HAT desire to enter into this Agreement whereby HAT shall
operate a large jet aircraft maintenance and modification facility in Tucson, AZ
and OMAC shall make available funding for said new business. The consideration
for said funding shall be the issuance of the initial HAT shares to OMAC.
WHEREAS, the Individuals identified above will cause to have certain facility
equipment leases, inventory leases, purchase agreements, licenses, operating
certificates, contracts for new business, provisions for qualified personnel,
necessary insurance policies, operating manual employment and policy manuals and
other things necessary for the efficient and legal operation of the intended new
business. Consideration to said Individuals shall be set forth in the Corporate
records as approved by the HAT Board of Directors on or before the SAA Closing
Date in individual employment contracts with HAT. Consideration to Individuals
shall be mutually acceptable employment agreements from HAT.
WHEREAS, OMAC has caused HAT to be incorporated in the State of Delaware and has
provided initial funding of $10,000.00 to open the HAT bank account in Tucson,
AZ.
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NOW THEREFORE, the Corporate Entities and the Individuals identified above
(hereinafter collectively referred to as "the Parties"), for the consideration
described hereinafter, covenant and intend to be bound by the following
conditions, provisions, and agreements as follows:
X. XXXXXXXX AEROSPACE TECHNOLOGIES CORPORATE STRUCTURE
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a.) The Parties have agreed and will cause the following individuals
to hold the position as Directors of HAT:
1. Xxx Xxxxxx, Chairman
2. Xxxx Xxxxxx
3. Xxxxxx X. Xxxxx
b.) The Parties have agreed and will cause the following individuals
to hold the position as Officers as described below:
1. President - Xxxxxx X. Xxxxx
2. Treasurer - Xxxx Xxxxxx
3. Secretary - Xxxxxx X. Xxxxx
4. V. P. Business Development - Xxxx Xxxxxx
5. V. P. Component Overhaul - Xxxxx Xxxxxxx
6. V. P. Operations - Xxx Xxxxxxxxx
7. V. P. Contracts and Administration - Xxxx X. Xxxx
c.) The Parties have agreed and will cause the following individuals
to hold key employee positions as follows:
1. Chief Executive Officer and
General Manager - Xxxxxx X. Xxxxxxxx
2. Chief Operating Officer - Xxxx Xxxxxx
3. Director of Maintenance - Xxxx Xxxxxxx
4. Director Quality Control - Xxxxxx Xxxxxxxx
XX. FAA REPAIR STATION LICENSE
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a.) HAT shall fund the costs of obtaining the required FAA
certificates of HAT to operate the repair station facility.
b.) The Individuals will supply the required manuals, forms and other
documents required by the FAA for issuance of the License and/or
Certificate to HAT for the licenses set forth in Schedule 17.3 of the
SAA.
c.) HAT and the Individuals will hire, security check, drug test, and
document as required by the FAA, all personnel necessary for HAT to
hold said certificate at HAT's expense.
d.) The Individuals will cause and provide the other elements
necessary for the FAA certification (facility, inventory, equipment,
tools, etc.) as described below herein.
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III. TUCSON AIRPORT AUTHORITY LEASE
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a.) The Individuals shall negotiate and provide a minimum five year
lease on the +22 acre facility located at 0000 X. Xxxx, Xxxxxx, AZ.,
including existing improvements, which lease shall be between the
Tucson Airport Authority (hereinafter "TAA") and HAT, in a form of
lease with terms which are acceptable to HAT.
b.) A further contingency to the closing of this Agreement shall be an
acceptable opinion from a qualified law firm pertaining to potential
environmental liabilities of the property.
IV. EMPLOYMENT, POLICY AND PROCEDURES MANUALS
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a.) The Individuals shall provide and implement for HAT manuals for
employment, policy, procedures and operations set forth as required by
FAA regulations. The Individuals shall also provide and implement for
HAT manuals for employment, policy, procedures and operations as
required by the state and other regulatory agencies.
b.) All such manuals will be of content and quality to provide for the
economical and efficient operation for HAT.
V. NEW BUSINESS MAINTENANCE CONTRACTS
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a.) The Individuals shall use their best efforts on a full time basis
to provide to HAT new business in a billable schedule that conforms to
the minimum projections and growth schedule provided by HAT attached
hereto as Exhibit A (Minimum Income Projection). It is expected by the
Parties that new business and income will far exceed the MIP.
VI. CCI ASSET ACQUISITION BY HAT
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a.) It is the intention of HAT to purchase the assets of the business
known as Complete Controls, Inc. ("CCI") with capital or other
instruments.
b.) Said capital may be from the funding made available by OMAC as
described below herein, or by funds generated from HAT operations,
sale of stock or other instruments approved by the HAT Board of
Directors.
c.) Said acquisition is contingent upon a satisfactory agreement
between HAT and CCI, and HAT obtaining an acceptable lease for the CCI
premises from TAA.
d.) Upon completion of the CCI acquisition by HAT, the assets and
facilities of CCI may be merged by HAT with HAT's repair stations
operations.
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e.) Upon completion of the CCI acquisition by HAT, Xxxxxxx will be
appointed as "V. P. Component Overhaul" and will participate with the
consideration and benefits approved by the Board of Directors of HAT
on terms similar to the compensation provided to the other
Individuals. In the event that CCI acquisition is not completed for
whatever reason, Xxxxxxx will not be considered as an "Individual"
herein.
f.) The CCI acquisition is not a contingency for the rest of the terms
of this Agreement.
VII. FUNDING BY OMAC
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a.) In consideration of the above and the issuance of 64.8% of the
issued shares of HAT to OMAC, OMAC agrees to make available to HAT a
minimum of $1,500,000 as needed for operations and expansion of HAT's
intended Business Plan, as agreed upon and on terms acceptable to HAT
and OMAC.
b.) Said intended Business Plan includes the acquisition of the CCI
assets, facility improvements to both the initial HAT leasehold and,
if acquired, to the CCI leasehold, and other expenditures necessary
and applicable to effectuate the HAT Business Plan.
c.) This $1,500,000.00 funding by OMAC (which is to include in the
calculation thereof all of OMAC's reasonable legal fees, marketing
expenses, travel and other costs incurred by OMAC in its transactions
with HAT) may be converted to a promissory note in favor of OMAC from
HAT as approved by the HAT Board of Directors, in the event that OMAC
and HAT determine and agree that a public offering of HAT is
beneficial and appropriate to the Parties.
d) This OMAC funding is anticipated to be in the form of $500,000.00
cash in the first 30 days of operation after the Closing of this
Agreement as set forth in Section X, herein ("Closing") or after May
1, 2002, and as needed thereafter as determined by HAT's Board of
Directors, and the Schedule and Applications of Funds attached herein,
subject to approval by OMAC.
e) OMAC shall have no liability or responsibility whatsoever for the
business operations of HAT. OMAC's responsibilities and liabilities
under this Agreement are limited only to its funding obligations under
this Section IX, which funding obligations are in exchange for OMAC
receiving the issuance of its shares in HAT.
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VIII. CONDITIONS PRECEDENT AND CLOSING DATE
-------------------------------------
a.) Upon the completion of the following conditions precedent, the
parties agree to schedule a Closing Date which will be within three
(3) business days after the last of the following conditions precedent
are completed in a manner satisfactory to HAT and OMAC:
1. Execution of the SAA and this Agreement;
2. Adoption of the HAT By-Laws and corporate resolutions,
ratified by the HAT shareholders, which detail the Individuals'
compensation and employment contracts;
3. The issuance of the FAA aviation repair station certificate to
HAT;
4. The execution of an acceptable lease by and between the Tucson
Airport Authority and HAT for the 22 acre leasehold at 0000 X.
Xxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000;
5. The implementation of the HAT corporate structure by
appropriate Corporate documents;
6. Sufficient required personnel acceptable to HAT to begin
operations by HAT;
8. The execution by HAT of the new business contracts as
represented by Xxxx Xxxxxx.
b.) OMAC, at its option and discretion may continue to fund HAT as
OMAC deems necessary to bridge HAT's operational requirements through
to Closing.
IX. MISCELLANEOUS
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1. Liabilities Not Assumed. HAT shall not be responsible or liable for
any liabilities whatsoever of Xxxxxxxx incurred or accrued prior to the Closing,
including but not limited to work in progress.
2. Notices. Any notices permitted or required under this Agreement
shall be deemed given upon the date of personal delivery or when received by
trackable overnight carrier, addressed to X.X. Xxxxxxxx, Xxxxxx or Xxxxxxx at:
0000 X. Xxxx Xxxxxx
Xxxxxx, XX 00000
addressed to HAT, OMAC or Xxxxx at:
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OMAC
Attention: Xxxxxx Xxxxxx
000 X. Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
With copies to:
Xxx X. Xxxxxx
0000 X. Xxxxx Xxxx., Xxxxx #0
Xxxxxxxx Xxxxx, XX 00000
and
Xxxxx X. Xxxxxxxx, Esquire
Werb & Xxxxxxxx
000 Xxxxxxxx Xxxxxx
00xx xxxxx
Xxxxxxxxxx, XX 00000
or at any other address as any party may, from time to time, designate by notice
given in compliance with this section.
4. Time. Time is of the essence of this Agreement.
5. Survival. Any of the terms and covenants contained in this
Agreement which require the performance of either party after the Closing shall
survive the Closing and delivery of the deed.
6. Waiver. Failure of any party at any time to require performance of
any provision of this Agreement shall not limit the party's right to enforce the
provision, nor shall any waiver of any breach of any provision be a waiver of
any succeeding breach of any provision or a waiver of the provision itself for
any other provision.
7. Assignment. Only OMAC may assign this Agreement without
authorization from any other party. No assignment of this Agreement shall be
permissible by any party, except OMAC, without the written consent of all the
other parties.
8. Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
9. Venue. The parties to this Agreement agree that any action on this
Agreement shall be brought in a court of competent jurisdiction located in New
Castle County, Delaware.
10. Attorney Fees. In the event an arbitration, suit or action is
brought by any party under this Agreement to enforce any of its terms, or in any
appeal therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys' fees to be fixed by the arbitrator, trial court and/or
appellate court.
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11. Presumption. This Agreement or any section thereof shall not be
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.
12. Computation of Time. In computing any period of time pursuant to
this Agreement, the day of the act, event or default from which the designated
period of time begins to run shall be included, unless it is a Saturday, Sunday
or a legal holiday, in which event the period shall begin to run on the next day
which is not a Saturday, Sunday or a legal holiday, in which event the period
shall run until the end of the next day thereafter which is not a Saturday,
Sunday or legal holiday.
13. Titles and Captions. All article, section and paragraph titles or
captions contained in this Agreement are for convenience only and shall not be
deemed part of the context nor affect the interpretation of this Agreement.
14. Pronouns and Plurals. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular or plural
as the identity of the Person or Persons may require.
15. Entire Agreement. This Agreement contains the entire understanding
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement.
16. Prior Agreements. This document is the entire, final and complete
agreement of the parties and supersedes and replaces all prior or existing
written and oral agreements (including any xxxxxxx money agreement) between the
parties or their representatives relating to the Property.
17. Modifications Must Be in Writing. This Agreement may not be
changed orally. All modifications of this Agreement must be in writing and must
have be signed by each party.
18. Agreement Binding. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
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19. Further Action. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of this Agreement.
20. Good Faith, Cooperation and Due Diligence. The parties hereto
covenant, warrant and represent to each other good faith, complete cooperation,
due diligence and honesty in fact in the performance of all obligations of the
parties pursuant to this Agreement. All promises and covenants are mutual and
dependent.
21. Counterparts. This Agreement may be executed in several
counterparts and all so executed shall constitute one Agreement, binding on all
the parties hereto even though all the parties are not signatories to the
original or the same counterpart.
22. Facsimile Signatures. Facsimile transmission of any signed
original document, and the retransmission of any signed facsimile transmission,
shall be the same as delivery of the original signed document. At the request of
any party, a party shall confirm documents with a facsimile transmitted
signature by signing an original document.
23. Parties in Interest. Nothing herein shall be construed to be to
the benefit of any third party, nor is it intended that any provision shall be
for the benefit of any third party.
24. Savings Clause. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
WHEREFORE the parties do hereby set their hand and seal this 15th day of April,
2002:
INDIVIDUALS:
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by Xxxxxx X. Xxxxx
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by Xxxxxx X. Xxxxxxxx
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by Xxxx Xxxxxx
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by Xxxxx Xxxxxxx
OLD MISSION ASSESSMENT CORPORATION
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by Xxxxxx Xxxxxx, President
XXXXXXXX AEROSPACE TECHNOLOGIES, INC.
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by Xxxxxx X. Xxxxx, President
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