EXHIBIT 2.3
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement"), is made as of March 18th , 2002
(the "Effective Date") by and between Advanced Aerodynamics & Structure, Inc., a
Delaware corporation ("Buyer"), and Xxxxxx Aircraft Corporation, a New Jersey
corporation ("Seller").
RECITALS:
A. Seller is Debtor in Possession under the Bankruptcy Case
(as defined below).
B. Seller and Buyer wish to effect a sale to Buyer of the Assets
(as defined below) pursuant to Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code
(11 USC ss.101 et seq., as amended, the "Bankruptcy Code") under the terms and
provisions set forth in this Agreement.
C. This Agreement is subject to approval of the Bankruptcy Court
(as defined below) and to the establishment and implementation of bid procedures
as herein set forth.
NOW, THEREFORE, for and in consideration of the foregoing Recitals
(which form an integral part of this Agreement), and for other good and valuable
consideration, the receipt and adequacy of which is acknowledged by the parties
hereto and to each other, the parties hereto agree as follows:
AGREEMENT:
1. Definitions. The defined terms set forth below form part of
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this Agreement. Other capitalized terms used in this Agreement that are not
specifically defined herein have the meaning given to them in the Bankruptcy
Code.
Ad Valorem Taxes: past due and current ad valorem personal and real
property taxes owed by Seller to the City of Kerrville, Texas and Xxxx County,
Texas (including, without limitation, a past due claim made for City and County
- $172,299.76) and Kerrville Independent School District and Center Point
Independent School District (including, without limitation, a past due claim -
$489,493.03) (collectively, the "Taxing Authorities").
Administrative Fees: an amount equal to: (a) $148,000; plus (b) the
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lesser of: (i) the amount shown on the invoice of Seller's Counsel delivered to
Seller at Closing for attorneys' fees and costs earned and accrued between
February 1, 2002 and the Closing Date; and (ii) $75,000; plus (c) the lesser of
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(i) the amount shown on the invoice of the Committee's Counsel delivered to
Seller at Closing for attorneys' fees and costs earned and accrued between
February 1, 2002 and the Closing Date; and (ii) $45,000.
Agreement: this Agreement, together with all exhibits, schedules and
attachments hereto, and together with any amendments or modifications hereto in
writing executed by Buyer and Seller.
Allowed Amount of Unsecured Claims: The total dollar amount allowed by
the Bankruptcy Court to be claimed by all unsecured creditors of Seller in the
Bankruptcy Case.
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Asset Purchase Agreement
Assets: all real and personal, tangible and intangible property owned
by Seller as of the Effective Date including, but not limited to: the Real
Property, buildings and improvements, machinery and equipment, tools, inventory,
aircraft, licenses and permits (to the extent assignable), and Seller's interest
in the real and personal property leases described on Exhibit A (the "Assumed
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Leases"), and the contracts described on Exhibit B (the "Assumed Contracts"),
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but not including the Excluded Assets; provided, however, that notwithstanding
anything to the contrary contained in this Agreement, if, at any time prior to
the Closing Date, Buyer decides, in its reasonable discretion, that there is a
legitimate environmental or a title concern with respect to the Real Property,
then, at Buyer's option and upon written notice to Seller (which shall specify
the option chosen by Buyer), Buyer may either: (1) exclude the Real Property
from the Assets entirely (in which case Seller shall not be required to deliver
a Special Warranty Deed with respect thereto), or (2) reserve and delay, for up
to sixty (60) days following the Closing Date, its right to decide whether to
exclude the Real Property from the Assets or to require Seller to convey the
Real Property to it. If Buyer delivers written notice to Seller that it reserves
its right to choose for sixty (60) days, then Seller shall deliver the Special
Warranty Deed conveying the Real Property to Buyer within three (3) days after
receiving timely additional written notice from Buyer requesting that the Real
Property be conveyed. If Buyer fails to deliver the additional written notice
within the sixty (60) day period following the Closing Date, then Buyer shall be
conclusively presumed to have elected to exclude the Real Property from the
Assets. The provisions of this definition relating to the Real Property shall
survive the Closing but not any termination of this Agreement prior to Closing.
Assumed Liabilities: Obligations under the Assumed Leases and Assumed
Contracts, except to the extent that they include obligations under disguised
financing transactions.
Bankruptcy Case: In re: Xxxxxx Aircraft Corporation, Case No.
00-00000-X, Xxxxxx Xxxxxx Bankruptcy Court for the Western District of Texas,
San Antonio Division (the "Bankruptcy Court")
Buyer's Counsel: Xxxx Xxxxxxx Xxxxxxxx & Scripps LLP.
Closing: The consummation of the purchase and sale of the Assets as
contemplated under this Agreement. The date on which Closing occurs is the
"Closing Date."
Committee: The Official Committee of Unsecured Creditors.
Committee's Counsel: Xxxxxx Xxxxxxxxx, PA.
Creditors: The creditors of Seller.
Cure Amounts: The cure amounts in respect of the Assumed Leases and the
Assumed Contracts, as determined by order of the Bankruptcy Court, but not to
the extent that they include obligations under disguised financing transactions.
Excluded Assets: Seller's cash on hand; Seller's accounts receivable;
Seller's corporate records, and records relating to the Bankruptcy Case;
Seller's interest in any insurance policies (other than proceeds (if any)
related to casualty claims for the Assets to be sold); and except as otherwise
specifically provided herein, preference or avoidance claims or other claims
arising under the Bankruptcy Code and post-petition claims.
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Asset Purchase Agreement Page 2
Final Order: The Order will be considered "Final" upon the expiration
of ten (10) days after the date of entry of the Order, during which time no stay
of the Order has been obtained.
Order: An Order entered in the Bankruptcy Case under which the
Bankruptcy Court orders all of the Assets of Seller to be sold to Buyer free and
clear of all liens and claims.
Procedures Order: The order issued by the Bankruptcy Court on March __,
2002 adopting the bidding procedures set forth in the Procedures Motion.
Proprietary Rights: Trade secrets, copyrights, patents, trademarks,
service marks, customer lists and all similar types of intangible and/or
intellectual property owned, used contracted for and/or licensed by Seller.
Real Property: The approximately 3.37 acre tract of real property
located in the Xxxxx Abstract 114, Survey 71, in Xxxx County, Texas, as more
particularly described in a Warranty Deed, dated October 4, 1973, recorded at
Book 167, Page 346 of the Deed Records of Xxxx County, Texas, which is owned in
fee simple by Seller.
Responsible Officer: Xxxx Xxxxxx, or any other person otherwise
designated as such by the Bankruptcy Court.
Sales Tax Note: A Promissory Note in the amount of $154,488.71,
payable to the order of the Seller, substantially in the form attached hereto as
Exhibit C.
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Security Shares: The number of shares of the common stock of Buyer that
are worth, as of the Closing Date, $250,000.00, which shall be restricted as
provided in Section 14 below.
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Seller's Counsel: Xxxxxxx & Xxxxxx, Incorporated.
Shares: The number of shares of the common stock of Buyer that are
worth, as of the Closing Date, the value of the Unsecured Claims Equity Payment,
which shall be restricted as provided in Section 14 below.
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Textron Lien: Any valid, first position, enforceable liens and security
interests in the Assets that any court of competent jurisdiction determines are
held by Textron Financial Corporation.
Transfer Documents: (a) a Xxxx of Sale and Assignment and Assumption
Agreement, substantially in the form attached hereto as Exhibit D, (b) the
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Release described in Section 15(b) substantially in the form attached hereto as
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Exhibit E, (c) a Special Warranty Deed substantially in the form attached hereto
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as Exhibit F, and (d) all other transfer and conveyance documents necessary and
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appropriate to transfer, convey, sell, assign and deliver the Assets to Buyer as
required by this Agreement, including any and all documents reasonably requested
by any title company in connection with the conveyance of the Real Property to
Buyer, in the event that Buyer chooses, in its sole discretion, and at its sole
expense, to purchase a title policy covering the Real Property, and the
certificate or certificates of insurance required under Section 15(a) of this
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Agreement.
Unsecured Claims Cash Payment: The lesser of: (a) $350,000; and (b)
three and one-half percent (3.5%) of the Allowed Amount of Unsecured Claims.
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Asset Purchase Agreement Page 3
Unsecured Claims Equity Payment: The lesser of: (a) $650,000; and (b)
six and one-half percent (6.5%) of the Allowed Amount of Unsecured Claims.
Unsecured Claims Payment: The total of the Unsecured Claims Cash
Payment plus the Unsecured Claims Equity Payment, which is equal to the lesser
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of: (a) $1,000,000; and (b) ten percent (10%) of the Allowed Amount of
Unsecured Claims.
Warrant: The Warrant to purchase shares of common stock of Buyer,
substantially in the form attached hereto as Exhibit G, for the number of shares
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that when multiplied by the per share value of the common stock of Buyer as of
the Closing Date equals to $1,000,000.00.
2. Sale and Purchase. Subject to approval of the Bankruptcy Court and
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to the Final Order, Seller agrees to sell to Buyer, and Buyer agrees to purchase
from Seller, the Assets, in accordance with this Agreement.
3. Transfer; Closing. Seller shall sell, transfer, convey and deliver
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the Assets to Buyer pursuant to Section 363 of the Bankruptcy Code, free and
clear of all liens and claims, other than the Ad Valorem Taxes, and the Textron
Lien, by delivering the Transfer Documents to Buyer at Closing. Except as
otherwise provided in a writing signed by Buyer and Seller, the Closing will
take place within 10 days after the Final Order, but, except as otherwise agreed
by Buyer and Seller in writing, in no event later than April 3, 2002 (provided
however, that if the Order is timely issued but is then stayed before becoming
Final, then the Closing shall take place within 5 days following the termination
of the stay), at the offices of Seller's Counsel, at 10:00 a.m. Central Standard
Time, on the date chosen by Seller with two (2) business days' notice to Buyer.
At Closing, Buyer shall deliver the Purchase Price to Seller and Seller shall
deliver the Transfer Documents, duly executed, together with a certified copy of
the Final Order to Buyer.
4. Consideration.
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a. In consideration for the Assets to be purchased from Seller,
Buyer agrees to deliver to Seller (the following are collectively defined to be
the "Purchase Price"): (a) $8 million, as increased in accordance with Section
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6(c) (the "Credit Bid"), which Seller acknowledges is a portion of Buyer's
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Allowed Claim in the Bankruptcy Case - Buyer shall be given credit for having
paid this amount at Closing without having to make a cash payment to Seller,
provided that, upon Closing, Buyer's Allowed Claim in the Bankruptcy Case shall
be deemed to have been reduced as provided in Section 6(d); (b) cash in the
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amount of (i) the Administrative Fees, plus, (ii) $15,000, plus (iii) the
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Unsecured Claims Cash Payment; (c) the Sales Tax Note; (d) the Shares; (e) the
Warrant; (f) assumption of the Ad Valorem Taxes; and (g) payment of the Cure
Amounts.
b. Seller agrees and understands that if the Allowed Amount of
Unsecured Claims is not finally determined by the Bankruptcy Court prior to the
Closing Date, then Buyer shall deliver the Unsecured Claims Cash Payment in the
amount of $350,000, and the number of Shares equal in value to $650,000, both of
which are to be held in trust as provided in the Final Order, with the
understanding that if the Allowed Amount of Unsecured Claims, as finally
determined by the Bankruptcy Court, is less than $10,000,000.00, then
immediately after the date of that determination, the difference between
$1,000,000 and ten percent (10%) of the
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Asset Purchase Agreement Page 4
Allowed Amount of Unsecured Claims shall be refunded to Buyer in cash and
return of stock in the same ratio as originally tendered to Seller hereunder.
5. Conditions.
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(a) The obligation of Buyer to consummate the transactions
contemplated by this Agreement is conditioned only on the occurrence of each of
the following events:
(i) On or before March 1, 2002, Seller has submitted a Motion
under Section 363 of the Bankruptcy Code for sale of the Assets to Buyer
pursuant to this Agreement ("Sale Motion") and has thereafter used its
reasonable efforts to obtain an expeditious hearing on the Sale Motion.
(ii) The Order is entered on or before March 21, 2002, subject
to extension of this date by written agreement of Buyer and Seller.
(iii) The Order becomes Final on or before March 31, 2002,
subject to extension of this date by written agreement of Buyer and Seller.
(iv) Seller complies with the terms of this Agreement,
including, without limitation, its obligation to deliver the Transaction
Documents at Closing, within ten (10) days' after written notice by Buyer to
Seller of any alleged failure to do so.
(v) Seller's representations and warranties made in this
Agreement are true and correct as of the Closing.
(b) The obligation of Seller to consummate the transactions
contemplated by this Agreement is conditioned only on the occurrence of each of
the following events:
(i) The Order is entered on or before March 21, 2002, subject
to extension of this date by written agreement of Buyer and Seller.
(ii) The Order becomes Final on or before March 31, 2002,
subject to extension of this date by written agreement of Buyer and Seller.
(iii) Buyer complies with the terms of this Agreement,
including, without limitation, its obligation to deliver the Transaction
Documents at Closing, within ten (10) days' after written notice by Seller to
Buyer of any alleged failure to do so.
(iv) Buyer's representations and warranties made in this
Agreement are true and correct as of the Closing.
6. Bankruptcy Proceedings.
(a) On February 26, 2002, Seller filed with the Bankruptcy
Court a motion outlining proposed bid procedures with respect to the sale of the
Assets (the "Procedures Motion"). The Procedures Motion provided that an offer
other than the agreement set forth herein will not be favorably considered by
Seller unless the offer: (i) includes a cash component that exceeds the amount
of the Credit Bid provided under this Agreement (or any then effective amendment
hereof) by at least $250,000.00; (ii) includes an amount comparable to the
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Asset Purchase Agreement Page 5
Unsecured Creditors Payment provided under this Agreement that exceeds the value
of the Unsecured Creditors Payment by at least 2.5%, (iii) provides for the
proposed buyer to make a cash deposit with Seller's Counsel, in trust, of
$1,000,000.00; and (iv) contains terms that are substantially similar to the
terms of the Term Sheet for Acquisition of Assets by AASI, dated February 26,
2002, by and among Seller, Buyer and the Committee (the "Term Sheet"); The
Procedures Motion also provided that if Buyer is not the successful bidder, then
so long as Buyer is then in compliance with this Agreement, Buyer shall receive
an exit fee of $200,000.00 upon termination of this Agreement (the "Exit Fee").
(b) Buyer understands and agrees that although this Agreement
may be signed by Seller, the process of sale pursuant to the Sale Motion and the
Procedures Motion creates, in essence, an auction environment and that Seller
cannot warrant or represent that, in fact, Buyer will be the successful
purchaser of the Assets, or that Buyer will acquire the Assets for the Purchase
Price, and that Buyer's sole and exclusive remedy therefor will be the Exit Fee,
the payment received on account of its Claim, and any other compensation or
reimbursement specifically authorized by the Bankruptcy Court. Seller may
negotiate with other persons regarding purchase of the Assets as required under
Procedures Order. Seller may accept an alternate bidder, but only on the terms
and conditions set forth in the Procedures Order or as otherwise expressly
required by the Bankruptcy Court, and in no event may Seller solicit or accept
alternate bids after the Final Order is entered.
(c) Immediately upon receipt of an offer by a third party to
purchase the Assets that offer is in compliance with the Procedures Order (a
"Third Party Offer"), Seller shall deliver a copy of the Third Party Offer to
Buyer, and Buyer shall have the right, prior to the date and time of the hearing
scheduled by the Bankruptcy Court to hear the Sale Motion, to send to Seller
written notice of its intent to increase its Credit Bid under this Agreement,
specifically stating the amended amount of the Credit Bid (the "Purchase Price
Increase Notice"), and upon receipt by Seller of the Purchase Price Increase
Notice, Seller and Buyer shall immediately enter into a formal amendment of this
Agreement amending the Credit Bid amount as provided in the Purchase Price
Notice Increase, but even if Seller and Buyer fail to enter into such an
amendment, this Agreement shall nonetheless be deemed to have been amended by
the Purchase Price Notice Increase, but only to the extent that it increases the
Credit Bid, and not otherwise.
(d) For purposes of the Bankruptcy Case, Buyer and Seller agree
(and the Committee accepts) that: (i) Buyer shall be deemed to have a deficiency
claim (the "Deficiency Claim") equal to the difference between $13,700,000.00,
which is the amount of Buyer's Claim in the Bankruptcy Case, and the final
Credit Bid; and (ii) Buyer shall be deemed to have an Allowed Unsecured Claim in
the Bankruptcy Case in the amount of the Deficiency Claim and shall be eligible
for voting and treatment in any plan of reorganization of Seller (a
"Reorganization Plan"); provided however, that if, but only if: (A) Closing
occurs and (B) Buyer has a right to recover any amount on the Deficiency Claim,
then upon the "Effective Date" of the Reorganization Plan, if any, Buyer's right
to recover any amount under the Deficiency Claim shall be deemed to be
subordinate to the claims of the other Unsecured Creditors for distribution
purposes. The provisions of this subsection shall survive Closing, but not any
other termination of this Agreement.
7. Representations and Warranties of Seller. Seller represents and
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warrants to Buyer as of the Effective Date, and again as of the Closing Date,
that the following statements are true and correct:
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Asset Purchase Agreement Page 6
(a) Seller is a corporation, duly organized, validly existing
and in good standing under the laws of the State of New Jersey, and is
authorized to do business under the laws of the State of Texas.
(b) Seller has full power and authority (as provided under the
Order and other applicable orders of the Bankruptcy Court) to execute and
deliver this Agreement and to perform its obligations hereunder.
(c) Neither the execution and delivery of this Agreement, nor
the Closing of the transactions contemplated hereby will, except as specifically
allowed by the Bankruptcy Court, directly or indirectly contravene, conflict
with, or result in a violation of the provisions of Seller's organizational
documents.
(d) Seller has good and marketable title to all of the Assets.
Seller has not granted any leases, and there are no other tenancies in effect
with respect to the Real Property.
(e) Except for the Ad Valorem Taxes and the Cure Amounts, and
as affected by the proceedings under the Bankruptcy Case, each of the Assumed
Leases and Assumed Contracts is in full force and effect and is valid and
enforceable in accordance with its terms, and Seller is in full compliance with
the terms of each of them, and no person has repudiated any provision thereof.
(f) Except as affected by the proceedings under the Bankruptcy
Case, Seller possesses full ownership of, or adequate and enforceable long-term
licenses or other rights to use, the Proprietary Rights.
(g) Seller has incurred no obligation or liability, contingent
or otherwise, for brokers' or finders' fees or commissions, or other similar
payments, in connection with this Agreement and the transactions contemplated
hereby.
8. Representations and Warranties of Buyer. Buyer represents and
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warrants to Seller as of the Effective Date, and again as of the Closing Date,
that the following statements are true and correct:
(a) Buyer is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware.
(b) Buyer has full power and authority (subject to the approval of
the Bankruptcy Court) to execute and deliver this Agreement and to perform its
obligations hereunder, and the transactions contemplated by this Agreement have
been duly authorized by Buyer's board of directors and/or any other necessary
party (subject to the approval of the Bankruptcy Court). All stock to be issued
by Buyer under this Agreement, and the Warrant, have been reserved for issuance
by Buyer by all required corporate action, and upon issuance in accordance with
the terms of this Agreement, shall be free of preemptive rights.
(c) Neither the execution and delivery of this Agreement, nor the
Closing of the transactions contemplated hereby will, except as specifically
allowed by the Bankruptcy Court, directly or indirectly contravene, conflict
with, or result in a violation of the provisions of Buyer's organizational
documents.
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Asset Purchase Agreement Page 7
(d) Buyer has incurred no obligation or liability, contingent
or otherwise, for brokers' or finders' fees or commissions, or other similar
payments in connection with this Agreement and the transactions contemplated
hereby.
9. Assets Conveyed "AS IS". The Assets will be sold in their present
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condition, AS IS, WHERE IS, AND WITH ALL FAULTS. Except as specifically provided
in Section 7 above, including the warranty of marketable title, Seller makes no
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warranties or representations of any nature whatsoever regarding the Assets
including, but not limited to, warranties of fitness for a particular purpose,
or of merchantability, all of which are excluded. The Assets will be transferred
as of Closing in their present condition, except for fair wear and tear, the
effect of passage of time, the effect of general economic and market conditions,
and the effect of any non-material shrinkage.
10. Maintenance. Consistent with its budget as submitted to the
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Bankruptcy Court (the "Budget"), and the limited staff currently employed by
Seller, Seller shall use its reasonable efforts to maintain its parts business,
parts inventory, and its type certificates and production certifications in
substantially their present condition. Subject to the Budget, and to the notice
and cure provisions contained in the Assumed Leases and Assumed Contracts, with
respect to each of the Assumed Leases and Assumed Contracts, Seller shall not
take or fail to take any action between the Effective Date and the Closing Date
that would cause a default, an event of default, or give any another party
thereto the right to terminate that Assumed Lease or Assumed Contract. Subject
to reasonable prior notice to Seller, Buyer shall have the right to perform
periodic inspections between the Effective Date and the Closing Date to assure
compliance by Seller with this Agreement. Furthermore, in addition to the
foregoing, with respect to the Real Property, Seller shall allow Buyer and its
agents (including, without limitation, its environmental consultants) reasonable
access to the Real Property for the purpose of conducting any environmental
studies and/or testing that Buyer deems necessary in its sole discretion.
11. No Liabilities. Buyer is not acquiring any accounts payable of
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Seller. Further, except for the Assumed Liabilities, Buyer is not acquiring, and
will not acquire, by the consummation of the transactions contemplated by this
Agreement or otherwise, any liabilities of Seller. There will be no proration of
Ad Valorem Taxes, which shall be assumed by Buyer at Closing.
12. Termination; Failure to Close.
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(a) If: (i) any one of the conditions set forth in Section
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5(a)(i), 5(a)(ii), 5(a)(iiii) 5(b)(i), or 5(b)(ii) is not satisfied as and when
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required thereby; or (ii) an order is entered authorizing the sale of the Assets
to an entity other than Buyer, then, on the date on which the first of the
foregoing occurs, this Agreement shall terminate without any liability on the
part of Seller or Buyer to the other, provided, however, that, if applicable
under the Procedures Order, Seller shall pay to Buyer the Exit Fee.
(b) If any one of the conditions set forth Section 5(a)(iv) or
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5(a)(v) is not satisfied on or before the Closing, then Buyer has the right, but
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not the obligation, to deliver written notice to Seller that it is terminating
the Agreement, and upon delivery of that notice to Seller, this Agreement shall
immediately terminate; provided, however, that, if applicable under the
Procedures Order, Seller shall pay to Buyer the Exit Fee.
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Asset Purchase Agreement Page 8
(c) If any one of the conditions set forth in Section 5(b)(iii) or
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5(b)(iv) is not satisfied on or before the Closing, then Seller has the right,
but not the obligation, to deliver written notice to Buyer that it is
terminating the Agreement, an upon deliver of that notice to Buyer, this
Agreement shall immediately terminate; provided, however, that Seller shall
retain all rights and remedies available to Seller against the Buyer at law or
in equity, including those for breach of contract.
(d) If Seller fails to perform its obligations under this
Agreement, then Buyer shall be entitled to enforce specific performance within
the Bankruptcy Court by an appropriate adversary action.
(e) Any claim by Buyer for damages under this Agreement in
connection with a breach by Seller of the representations and warranties
contained in this Agreement shall be considered to be a claim for an
administrative expense pursuant to ss.503 of the Bankruptcy Code under the
Bankruptcy Case and, therefore, Buyer shall be barred from asserting any such
claim from and after the "Bar Date" set for asserting such claims provided by
the Bankruptcy Court in connection with the Bankruptcy Case.
13. Committee Approval. An authorized representative or agent of the
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Committee has executed this Agreement as "approved" to evidence its support of
this Agreement, including the Bankruptcy Court procedures, and by its execution
here the authorized representative hereby waives any and all rights of the
Committee (but not its individual members as creditors of the bankruptcy estate)
to challenge the provisions and/or enforceability of this Agreement as between
Buyer and Seller for all purposes, including, but not limited to the proceedings
in the Bankruptcy Case.
14. Restriction on Shares.
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(a) The Shares to be delivered by Seller at Closing shall be
restricted until the earlier of: (i) the date on which the United States
Securities and Exchange Commission approves a "no action" letter submitted to it
to the effect that the Shares may be resold pursuant to Section 1145 of the
Bankruptcy Code (the "No Action Letter"); or (ii) the date on which the resale
of the Shares has been registered with the Securities Exchange Commission or an
exemption from registration of such resale pursuant to SEC Rule 144(k) is
available. The certificates evidencing the Shares shall bear an appropriate
legend reflecting the applicable restriction, and if the No Action Letter is
issued permitting resale under Section 1145, then the Buyer shall promptly, upon
request, remove this restrictive legend from the Shares (this provisions shall
not be deemed to require removal of the restrictive legend described in
subsection 9c) below).
(b) Buyer agrees to use commercially reasonable efforts to
obtain the No Action Letter prior to the Closing Date, and in any event within
sixty (60) days following the Closing Date. If Buyer is unable to obtain the No
Action Letter on or before the Closing Date, then, in addition to the Shares to
be delivered by Seller at Closing, Buyer agrees to deliver the Security Shares
to Seller's Counsel to be held in trust for the benefit of Seller.
(i) If Buyer is unable to obtain the No Action Letter
prior to the sixty-first (61st) day after the Closing Date, then on that date,
Buyer's Counsel shall deliver the Security Shares to Seller, as its sole and
exclusive remedy for Buyer's failure to deliver the No
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Action Letter, and Buyer shall have no further obligations to obtain a No Action
Letter, nor to register the shares, nor comply with the requirements that would
permit resale of the Shares under "Rule 144" or other exemptions from
registration. Notwithstanding the foregoing sentence, if the No Action Letter is
not issued, and Buyer files a registration statement (other than a registration
statement on Form S-4 or Form S-8) within two (2) years of the Closing Date,
then to the extent not in violation of agreements of Buyer existing at the
Closing concerning registration of Buyer's stock, and to the extent not
precluded by the registration obligations under such other agreements, Buyer
shall grant the Shares "piggyback" registration rights with respect to such
registration statement. If any such registration statement has been filed in
connection with an underwritten offering, the "piggyback" registration rights
will be subject to customary underwriter cutback requirements and a requirement
that the selling shareholder become a party to the underwriting agreement. The
Security Shares, to the extent actually delivered to Seller in accordance
herewith, shall bear the same restrictions on transfer as those contained in the
Shares (including, without limitation, the restrictions set forth in subsection
(a) above, and subsection 9c) below.
(ii) If Buyer delivers the No Action Letter to Seller
prior to the sixty-first (61st) day after the Closing, then immediately upon the
delivery, Buyer's Counsel shall return the Security Shares and possession of the
certificates evidencing the Security Shares to Buyer, and Buyer shall have no
further obligations to deliver the Security Shares to Seller hereunder.
(c) In addition to the foregoing restrictions on transfer
(specifically including the prohibition on transfer of any of the Shares before
the No Action Letter is obtained), and in addition to any other legal
restrictions on the transfer of the Shares, the Shares shall also be restricted
as a matter of agreement between Buyer and Seller (and the certificates
evidencing the Shares shall bear an appropriate legend) as follows: (i) not more
than one tenth (1/10th) of the total Shares (the "Monthly Allowed Amount')
issued at Closing may be transferred during the calendar month in which the
Closing occurs and each successive calendar month that follows (each, a
"Month"); provided, however, that to the extent that less than the Monthly
Allowed Amount is transferred in any one Month, then any unsold portion of the
Monthly Allowed Amount may be transferred in any subsequent Month, such that,
after the end of the tenth (10th) Month after the Closing Date, none of the
Shares shall be subject any longer to the restrictions set forth in this
subsection. After the Shares are distributed to each of the Creditors, the
Monthly Allowed Amount shall be determined as to each Creditor on an individual
basis, and not on an aggregate basis. That is, no single Creditor may sell in
any month more than 1/10th of such Creditor's Shares plus any of such Creditor's
Shares previously released for sale hereunder that remain unsold. The provisions
of this Section 14 shall survive Closing, but not any termination of this
----------
Agreement prior to Closing. Buyer may place a legend on the Shares indicating
this restriction, but if so, shall immediately remove such legend upon request
of any party after the tenth (10th) month following the Closing Date.
15. Limited Indemnity; Release.
--------------------------
a. At Closing, Seller will provide Buyer with a limited
indemnity as to claims covered by products liability insurance (if any) carried
by Seller (the "Insurance Policies") to the extent (only) that the claims are
actually covered by that insurance and the indemnity is payable only out of
proceeds (if any) of that insurance, so that in no event would the indemnity be
paid out of retained assets of Seller; further, nothing in the indemnity will
require Seller to continue or renew its coverage beyond the current policy
expiration. Furthermore, at (or prior
--------------------------------------------------------------------------------
Asset Purchase Agreement Page 10
to) the Closing Seller shall cause the Insurance Policies to be amended to
include Buyer as an additional insured, and shall, at Closing deliver to Buyer
certificates of insurance reflecting that fact.
b. At Closing, Seller will and, by accepting Buyer's payment of the
Purchase Price hereunder does, release any and all claims and causes of action
that it (and/or its bankruptcy estate) may hold, if any (and specifically
including all avoidance actions and other choses in action under Chapter 5 of
the Bankruptcy Code owned by Seller and/or its bankruptcy estate), against
Buyer, Congress Financial Corporation, and/or any of their respective officers,
directors, agents, employees, attorneys, or affiliates acting in those
capacities, save and except those arising directly from a breach of this
Agreement by Buyer. Seller shall confirm this release in writing as of Closing.
c. Notwithstanding anything to the contrary contained in this
Agreement, including the provisions of the indemnity set forth in Section 15(a)
-------------
above, except for the Assumed Liabilities and as otherwise expressly provided in
Section 11 above, Buyer does not, and shall not as a result of the consummation
----------
of the transactions contemplated hereunder, or otherwise, assume any liability,
duty, or obligation, including, without limitation, "Claims" (as that term is
defined under ss. 101(5) of the Bankruptcy Code), claims for legal costs and
attorneys' fees, liability for bodily injury, personal injury and or property
damage (or the loss of use of property, whether or not that property has been
physically damaged or destroyed), which arises from or otherwise relates to: (i)
the Seller's operations; or (ii) any other act or omission relating to the
conduct of the Seller, including, without limitation, those that arise from or
relate to: (A) anything designed, manufactured, altered, modified, supplied
and/or sold by Seller; (B) any advisory services provided by Seller; and (C) any
obligation or duty owed by Seller. In particular, and without limitation, Buyer
does not, and shall not assume or be deemed responsible for any liability, duty,
or obligation of Seller in connection with any aircraft designed, manufactured,
modified, supplied and/or sold by Seller, including, without limitation, those
aircraft (or any part thereof) bearing any serial number through: (1) with
respect to Model J, 24-3431; (2) with respect to Model K, 25-2032, (3) with
respect to Model L, 26-0041, with respect to Model M, 27-0316, (4) with respect
to Xxxxx X, 00-0000, (5) with respect to Xxxxx X, 00-0000, and (6) with respect
to Xxxxx X, 00-0000, each of which are believed to be the highest serial number
issued to any aircraft for the relevant model produced by Seller prior to the
date of Closing, specifically including without limitation, in connection with
any Claims pursued against Seller under the litigation referred to in the
Petitioner's Motion for Relief From Automatic Stay Pursuant to 11 U.S.C.
ss.362(d), filed on March 13, 2002 with the Bankruptcy Court by the Estate of
Xxxxx X. Xxxxxxx and FHJ Aviation Inc. as petitioners.
d. The provisions of this Section 15 shall survive the Closing, but
----------
not any termination of this Agreement prior to Closing.
16. Subject to Bankruptcy Court Approval. Notwithstanding anything to
------------------------------------
contrary provided herein, this Agreement is, in all things, subject to approval
of the Bankruptcy Court and the entry of an Order, and the Order becoming a
Final Order.
17. Notices. Notices required or provided hereunder shall be in
-------
writing, shall be addressed to the recipient at the address set forth below,
including all copy addresses, shall be copied to each party (other than the
giver of the notice), including copy of recipients, and shall be set by hand
delivery (effective on delivery), facsimile (effective on receipt, provided that
the giver of the notice shall obtain telephonic confirmation of receipt), by
overnight delivery
--------------------------------------------------------------------------------
Asset Purchase Agreement Page 11
(effective on receipt) or by certified mail, return receipt requested (effective
the second business day following deposit into the United States Mail). Notice
addresses are as follows:
If to Seller: Xx. Xxxx X. Xxxxxx
Xxxxxx Aircraft Corporation USA
Xxxxx Xxxxxxxxx Field
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
And a copy to: Xx. Xxxxxx X. Xxxxx
Xxxxxxx & Xxxxxx, Inc.
000 Xxxx Xxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Buyer: Xx. X. Xxxxxx Happy
Advanced Aerodynamics & Structure, Inc.
0000 Xxxxxxxx Xxxx.
Xxxx Xxxxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xx. Xxxx Xxxxx
Xxxxxx and Xxxxx, LLP
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xx. Xxxx X. Xxxxxxxx
Xxxx, Forward, Xxxxxxxx & Scripps, LLP
000 Xxxx Xxxxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Whether to Buyer or Seller,
a Required Copy to the
Committee's Counsel:
Xx. Xxxxx Xxxxxxxx
Xxxxxx Xxxxxxxxx
000 Xxxxx Xxxxxxxx Xxxx., Xxxxx 0000
Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
18. Miscellaneous.
-------------
--------------------------------------------------------------------------------
Asset Purchase Agreement Page 12
(a) Neither Buyer nor Seller may assign its rights under this
Agreement to any party without the written consent of the other, except: (i) in
the case of Seller, as specifically provided by the Bankruptcy Court, and (ii)
in the case of Buyer, to an affiliate of Buyer; provided that any such
assignment shall not relieve Buyer of its obligations under this Agreement.
Except to the extent that assignment of this Agreement is limited by the
foregoing, this Agreement is binding on, and shall inure to the benefit of Buyer
and Seller and their respective successors and assigns.
(b) A "business day" is a day other than a Saturday, Sunday or
other day that banks in Bexar County, Texas are generally closed for their
normal banking business.
(c) Each party will be responsible for its own professional
fees and their costs in this transaction.
(d) This Agreement may be executed in one or more
counterparts, each of which, when taken together will be deemed to constitute
one and the same agreement.
(e) This Agreement represents the entire agreement and
understanding of the parties with respect to the subject matter hereof, and
supersedes all prior negotiations. Except as otherwise specifically provided
herein, this Agreement may not be amended except by a written agreement executed
by Buyer and Seller, and may be amended with or without the joinder of the
Committee; provided, however, that if the Committee does not execute any such
amendment to acknowledge their consent thereto, then the Committee's approval of
this Agreement shall not necessarily extend any amendment that is not executed
by an authorized representative of the Committee.
(f) Each of Buyer and Seller agrees to execute and deliver to
each other those other documents and to do all other acts that the other party
reasonably requests in connection with the consummation of the transactions
contemplated by this Agreement, in order to carry out the intent of this
Agreement.
(g) The Bankruptcy Court shall retain jurisdiction to resolve
any disputes that may arise under this Agreement.
(h) This Agreement shall be governed by the laws of the State
of Texas, without reference to its choice of law provisions, and where
applicable, the Bankruptcy Code.
[signatures on following page]
--------------------------------------------------------------------------------
Asset Purchase Agreement Page 13
Signature Page
to
Asset Purchase Agreement
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the Effective Date.
Buyer:
Buyer's Contact Information: ADVANCED AERODYNAMICS & STRUCTURE, INC.
--------------------------- a Delaware corporation
0000 Xxxxxxxx Xxxx.
Xxxx Xxxxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000 By: /s/ X. Xxxxxx Happy
--------------------------------------
X. Xxxxxx Happy
Executive Vice President and General
Counsel
Seller:
-------
Seller's Contact Information: XXXXXX AIRCRAFT CORPORATION,
---------------------------- a New Jersey corporation
Xxxxx Xxxxxxxxx Field
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000 By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx X. Xxxxxx, Responsible Person
APPROVED BY THE COMMITTEE on March 18, 2002:
--
THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS
By: /s/ illegible
--------------------------------------------
Name: Xxxxx [illegible]
--------------------------------------------
Title: as atty
--------------------------------------------
--------------------------------------------------------------------------------
Asset Purchase Agreement
Exhibit A
to
Asset Purchase Agreement
List of Assumed Leases
----------------------
1. Lease, dated January 10, 1963, between the City of Kerrville and the
County of Xxxx, as lessor, and Xxxxxx Aircraft, Inc., as lessee, as recorded in
Volume L, Page 598 of the Xxxx County Commissioner's Court Minutes, and in
Volume 139, Page 218 of the Xxxx County Deed Records, as amended by: (1) a Lease
Amendment, dated December 13, 1966, between the City of Kerrville and the County
of Xxxx, as lessor, and Xxxxxx Aircraft, Inc., as lessee, recorded in Volume M,
Page 416 of the Xxxx County Commissioner's Court Minutes, and in Volume 139,
Page 214 of the Xxxx County Deed Records; (2) an Assignment of Leaseholds, dated
March 25, 1969, assigning the interest of Xxxxxx Aircraft, Inc., as lessee to
Xxxxxx Aircraft Corporation, executed by Lukin Xxxxxxxxx, Esq. on, as Receiver
and Trustee in Bankruptcy of Xxxxxx Aircraft, Inc. and Xxxxxx Corporation,
recorded in Volume 137, Page 437 of the Deed Records of Xxxx County, Texas; (3)
an Amendment of Lease Agreement, dated September 29, 1970, by Aerostar Aircraft
Corporation of Texas (f/k/a Xxxxxx Corporation), as lessee, and the City of
Kerrville and the County of Xxxx acting by and through the Kerrville-Xxxx County
Joint Airport Board, as lessor, recorded in Volume 167, Page 127 of the Xxxx
County Deed Records; (4) Amendment of Lease, dated August 27, 1973, by and
between BAACT Corp. (f/k/a Aerostar Aircraft Corporation of Texas), as lessee
and the City of Kerrville and the County of Xxxx acting by and through the
Kerrville-Xxxx County Joint Airport Board, as lessor; (5) Assignment of Lease,
dated October 4, 1973, assigning the interest BAACT Corp. (f/k/a Aerostar
Aircraft Corporation of Texas), to Seller; (6) Amendment to Lease, dated
November 27, 1984, by and between Seller, as lessee, and the City of Kerrville
and the County of Xxxx acting by and through the Kerrville-Xxxx County Joint
Airport Board, as lessor; and (7) Landlord Estoppel and Access Agreement, dated
____, 1995, by and between the City of Kerrville, the County of Xxxx, the
Kerrville-Xxxx County Joint Airport Board (collectively as the lessor) and
Congress Financial Corporation, as lender, recorded in Volume 808, Page 736 of
the Xxxx County Deed Records. This Lease covers what is referred to as "Tracts
1, 2 and 3" in the Debtor's schedules in the Bankruptcy Proceeding (the
"Schedules").
2. City-County Xxxxxx Airport Lease - 1982, dated April 29, 1982, by
and between the City of Kerrville and Xxxx County, as lessor, and Seller, as
lessee, recorded in Volume 260, Page 577 of the Xxxx County Deed Records, as
amended by an Amendment to Lease, dated November 27, 1984, by and between the
City of Kerrville and Xxxx County, as lessor, and Seller, as lessee. This Lease
covers what is referred to as "Tract 4" in the Schedules.
3. Commercial Hangar Lease Agreement Among the City of Kerrville,
Texas, the County of Xxxx, Texas and Xxxxxx Aircraft Corporation, Inc., dated
August 27, 1997, by and between the City of Kerrville, Texas and the County of
Xxxx, Texas (as lessor), and Seller, as lessee. This Lease covers what is
referred to as "Tract 19" in the Schedules.
4. Lease, dated January 23, 1963, by and between the Xxxx County
Industrial and Development Foundation, Inc., as lessor and Xxxxxx Aircraft,
Inc., as lessee, as affirmed by written estoppel of lessor dated November 30,
1984, providing that Seller was then the current lessee under the lease. This
Lease covers what is referred to as "Tract 5" on the Schedules.
--------------------------------------------------------------------------------
Asset Purchase Agreement
Exhibit B
to
Asset Purchase Agreement
List of Assumed Contracts
-------------------------
Buyer and Seller agree and acknowledge that the negotiation of this Agreement
has been on a "fast track," and that even after the execution of this Agreement,
Buyer will continue to conduct due diligence activities with respect to the
executory contracts of Seller to be assumed by Buyer hereunder. Notwithstanding
anything to the contrary contained in this Agreement, Buyer reserves the sole
exclusive right and option, prior to the Closing, to delete items from this
Exhibit B, by delivering written notice to Seller of any such changes.
------------------------------------------ -------------- --------------------------------------------------------
Other Party Date Brief Description
----------- ---- -----------------
------------------------------------------ -------------- --------------------------------------------------------
Advanta Business Services Corp. 9/10/1999 Lease of wire cutter-marker
------------------------------------------ -------------- --------------------------------------------------------
Advanta Business Services Corp. 10/12/1999 Lease of IBM computer server
------------------------------------------ -------------- --------------------------------------------------------
Advanta Business Services Corp. 12/16/1996 Telephone Equipment Lease #000-0000000-000
------------------------------------------ -------------- --------------------------------------------------------
Citicorp Vendor Finance 5/1/2001 Lease of 35 Gateway computers - Acct No. 6140230
------------------------------------------ -------------- --------------------------------------------------------
Conseco Finance 9/5/2000 Lease of Gateway computers
------------------------------------------ -------------- --------------------------------------------------------
DFS Acceptance Corp. 5/5/2000 Lease of Dell computers
------------------------------------------ -------------- --------------------------------------------------------
DFS Acceptance Corp. 2/15/2001 Lease of Dell computers
------------------------------------------ -------------- --------------------------------------------------------
First Federal Leasing 8/16/1999 Lease of IBM computer server
------------------------------------------ -------------- --------------------------------------------------------
First Federal Leasing 8/10/1999 Lease of compressed air system
------------------------------------------ -------------- --------------------------------------------------------
Kronos 3/1/2000 Lease of Kronos software
------------------------------------------ -------------- --------------------------------------------------------
Kronos 3/1/2001 Lease of Kronos software upgrade
------------------------------------------ -------------- --------------------------------------------------------
Citicorp Del Lease, Inc. 5/26/1999 Lease of receiving forklift
------------------------------------------ -------------- --------------------------------------------------------
Avantex, Inc. 2/27/2001 License for computer programs and manuals
------------------------------------------ -------------- --------------------------------------------------------
DenAero Financial Corp 8/19/1999
------------------------------------------ -------------- --------------------------------------------------------
DenAero Financial Corp 9/22/1999
------------------------------------------ -------------- --------------------------------------------------------
Xxxxxx Xxxxxx Capital ??? Lease of Modular Furniture -
Lease No. 0081689-000
------------------------------------------ -------------- --------------------------------------------------------
Xxxxxx Xxxxxx Capital ??? Lease of Modular Furniture -
Lease No. 0081689-001
------------------------------------------ -------------- --------------------------------------------------------
Aerospace Systems & Technologies, Inc. 6/3/1999 Known Ice Avoidance Systems
------------------------------------------ -------------- --------------------------------------------------------
Aurora Bearing Pending Bearings
------------------------------------------ -------------- --------------------------------------------------------
Xxxxxxxx Xxxxxx Industries 5/30/2001 Trash Disposal
------------------------------------------ -------------- --------------------------------------------------------
Bild Pending Fasteners/Hardware
------------------------------------------ -------------- --------------------------------------------------------
Concorde Battery Corporation 7/12/2000 A/C Batteries
------------------------------------------ -------------- --------------------------------------------------------
Contour Composites 1/30/2001 Parts/Assembly
------------------------------------------ -------------- --------------------------------------------------------
--------------------------------------------------------------------------------
Asset Purchase Agreement
------------------------------------------ -------------- --------------------------------------------------------
Other Party Date Brief Description
----------- ---- -----------------
------------------------------------------ -------------- --------------------------------------------------------
Xxxxx Aerospace 11/1/2000 Gear Actuator
------------------------------------------ -------------- --------------------------------------------------------
Garmin International 10/14/2000 Avionics
------------------------------------------ -------------- --------------------------------------------------------
Xxxxxxxx Avionics Pending Avionics
------------------------------------------ -------------- --------------------------------------------------------
Goodyear Pending Tires
------------------------------------------ -------------- --------------------------------------------------------
Honeywell Pending Autopilot
------------------------------------------ -------------- --------------------------------------------------------
XxXxxxxx Propeller Systems 4/15/1999 Propellers
------------------------------------------ -------------- --------------------------------------------------------
Moritz Corporation 12/1/1999 Engine Monitoring
------------------------------------------ -------------- --------------------------------------------------------
Precise Flight Inc. 7/30/1999 Speed Brakes
------------------------------------------ -------------- --------------------------------------------------------
TCM Pending Engines
------------------------------------------ -------------- --------------------------------------------------------
Transtar Metals 12/1/1999 Metal
------------------------------------------ -------------- --------------------------------------------------------
TW Metals 12/1/1999 Metal
------------------------------------------ -------------- --------------------------------------------------------
Xxxxx Host 6/1/2000 Website Hosting
------------------------------------------ -------------- --------------------------------------------------------
Ensco 4/26/2000 Hazardous Materials Disposal
------------------------------------------ -------------- --------------------------------------------------------
5 Star Wireless Various Cellular Telephone Service
------------------------------------------ -------------- --------------------------------------------------------
Caprock Health Plans, Inc. 11/1/2000 Health Insurance Administration
------------------------------------------ -------------- --------------------------------------------------------
Cintas, Inc. 7/12/2000 Employee Uniforms
------------------------------------------ -------------- --------------------------------------------------------
Ernst and Young 1/19/2001 Audit and Tax Services
----------------------------------------- -------------- --------------------------------------------------------
fd2s 2/6/2001 Marketing Services
------------------------------------------ -------------- --------------------------------------------------------
Fireant 11/22/1999 Marketing Services
------------------------------------------ -------------- --------------------------------------------------------
Flight Safety International 12/1/1999 Pilot Training Services
------------------------------------------ -------------- --------------------------------------------------------
IHR 2/16/1999 Security Services
------------------------------------------ -------------- --------------------------------------------------------
itelligence 11/14/2000 Software maintenance agreement
------------------------------------------ -------------- --------------------------------------------------------
MCI Telecommunications 11/1/2000 Long distance telephone and 800 no. services
------------------------------------------ -------------- --------------------------------------------------------
Realization Services, Inc. 7/28/2001
------------------------------------------ -------------- --------------------------------------------------------
The SALT Group 11/16/2000 Tax consulting services
------------------------------------------ -------------- --------------------------------------------------------
Xxxxxxx Xxxxx 4/19/2000 FAA DER Mech Systems
------------------------------------------ -------------- --------------------------------------------------------
Workers Assistance Program 1/9/1997 Employee consulting services
------------------------------------------ -------------- --------------------------------------------------------
CACC, Inc. Telephone auditing
------------------------------------------ -------------- --------------------------------------------------------
MFG, Inc. Environmental consulting services
------------------------------------------ -------------- --------------------------------------------------------
Monterey Iron 6/8/1998 Royalty for metal recycling
------------------------------------------ -------------- --------------------------------------------------------
--------------------------------------------------------------------------------
Asset Purchase Agreement
Exhibit C
to
Asset Purchase Agreement
Form of Sales Tax Note
----------------------
Promissory Note
Date: [dated as of Closing Date]
Maker: Advanced Aerodynamics & Structure, Inc.,
a Delaware corporation
Payee: Xxxxxx Aircraft Corporation, a New Jersey
corporation
Place For Payment: Xxxxx Xxxxxxxxx Field
Xxxxxxxxx, XX 00000
Principal Amount: ONE HUNDRED FIFTY-FOUR THOUSAND FOUR HUNDRED
EIGHTY-EIGHT AND 71/100 DOLLARS ($154,488.71).
Annual Interest Rate: FOUR AND THREE QUARTERS PERCENT (4.75%); which
interest rate shall be adjusted as and when
provided by order of the United States Bankruptcy
Court for the Western District of Texas, San
Antonio Division in connection with the
following case pending before it: In re: Xxxxxx
Aircraft Corporation, Case No. 01-53433-K.
Maturity Date: On the sixth (6th) anniversary of the Date
hereof.
Terms of Payment The Principal Amount and interest are due and
(principal and interest): payable in equal monthly installments of TWO
THOUSAND FOUR HUNDRED SEVENTY AND 15/100 DOLLARS
($2,470.15) on the first (1st) day of each
month, beginning on the first day of the month
immediately succeeding the Date hereof, and
continuing until the Maturity Date, when the
entire amount of principal and accrued, unpaid
interest will be payable in full. Payments
will be applied first to accrued interest and
the remainder to reduction of the Principal
Amount.
Security for Payment: None.
Other Terms:
Maker promises to pay to the order of Payee the Principal Amount plus interest
at the Annual Interest Rate. This Note is payable at the Place for Payment and
according to the Terms of Payment. All unpaid amounts are due by the Maturity
Date. Maker may prepay this Note at any time during the term hereof by
delivering to Payee at the Place for Payment the unpaid principal balance as of
the date of prepayment plus interest earned through the date of prepayment.
If Maker defaults in the payment of this Note, Payee may declare the unpaid
principal balance and earned interest on the Note immediately due. Maker and
each surety, endorser, and guarantor waive all demand for payment, presentation
for payment, notice of intention to
--------------------------------------------------------------------------------
Asset Purchase Agreement
accelerate maturity, notice of acceleration of maturity, protest, and notice of
protest, to the extent permitted by law. Maker also promises to pay reasonable
attorney's fees and court and other costs if this Note is placed in the hands of
an attorney to collect or enforce the Note. These expenses will bear interest
from the date of advance at the Annual Interest Rate. Maker will pay Payee these
expenses and interest on demand at the Place for Payment.
Interest on the debt evidenced by this Note will not exceed the maximum rate or
amount of non-usurious interest that may be contracted for, taken, reserved,
charged, or received under law. Any interest in excess of that maximum amount
will be credited on the Principal Amount or, if the Principal Amount has been
paid, refunded. On any acceleration or required or permitted prepayment, any
excess interest will be canceled automatically as of the acceleration or
prepayment or, if the excess interest has already been paid, credited on the
Principal Amount or, if the Principal Amount has been paid, refunded. This
provision overrides any conflicting provisions in this Note and all other
instruments concerning the debt.
MAKER:
Advanced Aerodynamics & Structure, Inc.,
a Delaware corporation
By: [EXHIBIT ONLY]
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
--------------------------------------------------------------------------------
Asset Purchase Agreement
Exhibit D
to
Asset Purchase Agreement
Form of Xxxx of Sale and Assignment and Assumption Agreement
------------------------------------------------------------
XXXX OF SALE AND
----------------
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
THIS XXXX OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT (this
"Agreement") dated as of [insert closing date here], is made, executed and
delivered pursuant to that certain Asset Purchase Agreement, dated as of
____________________, [describe any amendments] (as amended, the "Purchase
Agreement"), by and between Xxxxxx Aircraft Corporation, a New Jersey
corporation, debtor-in-possession under Chapter 11 Case No. 01-53433-K, jointly
administrated, in the United States Bankruptcy Court for the District of
Delaware ("Seller") and Advanced Aerodynamics & Structure, Inc., a Delaware
corporation ("Buyer"). Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to them in the Purchase Agreement.
RECITALS
--------
WHEREAS, pursuant to the Purchase Agreement, Seller agreed to sell to
Buyer the Assets and Buyer agreed to purchase and accept the Assets and assume
the Assumed Liabilities, upon the terms and conditions set forth in the Purchase
Agreement;
WHEREAS, Seller has obtained an order of the Bankruptcy Court, dated
_______________ authorizing Seller, among other things, to sell the Assets to
Buyer upon the terms and conditions set forth in the Purchase Agreement (the
"Order"); and
WHEREAS, Buyer has assigned [some/all] of its rights, obligations and
interests to the Purchase Agreement to its affiliate, ____________________
("Assignee"), in accordance with the terms of the Purchase Agreement and
pursuant to that certain Assignment Agreement, dated as of the date hereof.
NOW, THEREFORE, in consideration of the promises, covenants and
agreements contained herein and in the Purchase Agreement and other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged and accepted), Seller, Buyer and Assignee do hereby agree as
follows:
1. Transfer of Assets. Seller, in consideration of the Purchase Price
------------------
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, does hereby transfer and assign to Assignee
forever, and Assignee hereby purchases and acquires from Seller, all of such
Seller's right, title and interest, in, to and under all of the Assets
(including, without limitation, the Assumed Contracts and the Assumed Leases
listed on Exhibit A attached hereto), free and clear of all Liens except as
---------
specifically provided in the Order.
2. Liabilities and Obligations. As of the Closing, Assignee shall
---------------------------
assume and thereafter in due course pay and fully satisfy the Assumed
Liabilities in accordance with the
--------------------------------------------------------------------------------
Asset Purchase Agreement
terms of the Purchase Agreement.
3. Assets Conveyed "AS IS". The Assets are hereby conveyed in their
-----------------------
present condition, AS IS, WHERE IS, AND WITH ALL FAULTS. Except for the warranty
of marketable title, Seller makes no warranties or representations of any nature
whatsoever regarding the Assets including, but not limited to, warranties of
fitness for a particular purpose, or of merchantability, all of which are
excluded.
4. Further Assurances; Power of Attorney. In accordance with, and as
-------------------------------------
more specifically set forth in, the Purchase Agreement, Seller shall, from time
to time after the delivery of this Agreement, at Assignee's request and without
further consideration, take all steps reasonably necessary to give Assignee, or
its permitted successors and assigns, all rights, title, interest and
possession, as applicable, to the Transferred Assets and to execute and deliver
any and all documents, instruments and certificates to evidence the same. In
addition, Seller hereby irrevocably constitutes and appoints Assignee and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Seller and in the name of such Seller, or in its own name,
from time to time in the Assignee's discretion, for the purpose of carrying out
the terms of this Agreement, to take any and all appropriate action and to
execute and deliver any and all documents and instruments which may be necessary
and desirable to accomplish the purposes of this Agreement and the transactions
contemplated hereby.
5. Severability. If any provision of this Agreement or the application
------------
of any such provision to any person or circumstance shall be held invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof.
6. Conflicts with Purchase Agreement. To the extent there is a
---------------------------------
conflict between the terms and provisions of this Agreement and the Purchase
Agreement, the terms and provisions of the Purchase Agreement will govern.
7. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.
[The remainder of this page intentionally left blank.]
--------------------------------------------------------------------------------
Asset Purchase Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Xxxx of Sale
and Assignment and Assumption Agreement to be duly executed as of the day and
year first written above.
Buyer:
-----
ADVANCED AERODYNAMICS & STRUCTURE, INC.
a Delaware corporation
By: [EXHIBIT ONLY]
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
Assignee:
--------
--------------------------------------------
a Delaware corporation
By: [EXHIBIT ONLY]
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
Seller:
------
XXXXXX AIRCRAFT CORPORATION,
a New Jersey corporation
By: [EXHIBIT ONLY]
-----------------------------------
Xxxx X. Xxxxxx, Responsible Person
--------------------------------------------------------------------------------
Asset Purchase Agreement
Exhibit E
to
Asset Purchase Agreement
Form of Release
---------------
GENERAL GLOBAL RELEASE OF ALL CLAIMS
This General Global Release of All Claims ("Release") is made by Xxxxxx
Aircraft Corporation, a New Jersey corporation ("Xxxxxx") for the benefit of
Advanced Aerodynamics & Structure, Inc., a Delaware corporation and those
persons in privity with it as named or identified herein (all collectively
referred to as "AASI"), and is delivered to AASI in connection with the Asset
Purchase Agreement, dated March ____, 2002, by and between Xxxxxx, as seller,
and AASI, as buyer (the "Purchase Agreement").
WHEREAS, Xxxxxx is the Debtor-in-Possession under the Bankruptcy Case
(as defined below). For purposes of this Release, the "Bankruptcy Case" is
defined as In re: Xxxxxx Aircraft Corporation, Case No. 00-00000-X, Xxxxxx
Xxxxxx Bankruptcy Court for the Western District of Texas, San Antonio Division
(the "Bankruptcy Court").
WHEREAS, Section 15(b) of the Purchase Agreement provides that at
-------------
Closing (as defined in the Purchase Agreement), Xxxxxx is to release AASI from
certain claims, and in accordance therewith, Xxxxxx is required to provide to
AASI this Release in order to verify the terms of the release provided for in
Section 15(b);
-------------
NOW, THEREFORE, as a material inducement to AASI to consummate the
transaction contemplated in the Purchase Agreement, and in consideration of the
payments and promises delivered by AASI at the Closing under the Purchase
Agreement and further in exchange of other valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Xxxxxx hereby releases, acquits
and forever discharges AASI, and to the extent acting in his, her or its
capacity of officer, director, employee, consultant or agent of AASI or any of
its affiliates, each of Xxxxxx Happy, Xxx Xxxxxx, Xxxx Xxxxxx, Xxxx Comfort, Xxx
Xxxxxxxx, Balfour Advisors, L.L.P., Xxxxxxxxxxx Xxxxxxx, Xxxx Robinewetz,
Solomon Obosbul, LH Financial Services Corp., Xxxxxx and Xxxxx, LLP, Xxxxxxx
Xxxxxx, Xxxx Xxxxx, Xxxxxxxx Xxxxx, Xxxx, Forward, Xxxxxxxx & Scripps, LLP,
their owners, predecessors, successors, assigns, agents, directors, officers,
employees, former employees, representatives, attorneys, divisions, parents,
subsidiaries, affiliates, and all persons acting by, through, under or in
concert with any of them, (the "Releasees") from any and all complaints, Claims,
controversies, demands, rights, disputes, and causes of action of any nature
whatsoever, known or unknown, asserted or unasserted, accrued or not accrued,
and whether or not arising out of, or in any way related to Xxxxxx'x Bankruptcy
Case, which Xxxxxx and all those claiming by, through or under Xxxxxx may have
or claim to have against any of the Releasees (the "Released Claims"). The
definition of Released Claims includes, but is not limited to, any claim or
cause of action under 11 U.S.C. ss.544, 547 and 548 and any other statutory
or common law cause of action, whether in tort, contract or in equity.
Other terms:
1. Definition of Claims: As used in this Release, the term "Claims"
--------------------
means any and all liabilities, obligations, claims, actions, demands, causes of
action, suits, counterclaims,
--------------------------------------------------------------------------------
Asset Purchase Agreement
defenses, debts, sums of money due or owed, costs, expenses, damages, attorney
fees, accounts, covenants, contracts, agreements, arrangements, promises,
obligations, warranties, trespasses, torts, injuries and losses, of whatever
kind or character, whether known or unknown, anticipated or unanticipated,
suspected or unsuspected, absolute, fixed, conditional, or contingent, matured
or unmatured, liquidated or unliquidated in amount, due or to become due, and
whether arising by contract, tort or otherwise, which any releasing party or
parties may have, or have had, against each other which existed on or before the
effective date of this Release and that was or could have been asserted or made
in any way related to Xxxxxx'x Bankruptcy Case.
2. Obligations under Asset Purchase Agreement. Notwithstanding anything
------------------------------------------
to the contrary contained herein, the term "Released Claims" shall not apply to,
and this Release shall not be deemed effective with respect to any and all
claims arising directly from a breach by AASI of its obligations under: (a) the
Purchase Agreement; and/or (b) any documents executed by AASI in connection with
the Closing (as defined under the Purchase Agreement) of the transactions
contemplated by the Purchase Agreement. Furthermore, this Release shall not
operate to bar any defense of Xxxxxx under the Purchase Agreement.
3. Effective Time of Release. This Release set forth herein shall
-------------------------
become effective and binding upon Xxxxxx as of the date hereof.
4. Agreements. Xxxxxx understands and agrees: (a) that the
----------
consideration for this Release is contractual and not a mere recital, and (b)
that this Release is binding upon Xxxxxx, its heirs, successors, and assigns,
and all persons and entities claiming by or through Xxxxxx, and inures to the
benefit of AASI, its heirs, successors, and assigns, and all persons and
entities claiming by or through AASI.
5. Ownership of Claims. Xxxxxx warrants and represents that it is
-------------------
currently the owner of all Claims it has released herein, and that the same have
not been assigned, pledged or made subject to any contract to or with any other
person or entity.
6. Miscellaneous.
-------------
(a) Entire Release. This Release constitutes the entire
--------------
understanding and agreement between the Parties with respect to the
matters set forth herein and supersedes all previous statements,
promises, or representations between the Parties. This Release can be
amended, supplemented or changed only by written instrument signed by
both Xxxxxx and all Releasees.
(b) Governing Law. This Release shall be governed by, and construed
-------------
in accordance with the laws of the State of Texas.
(c) Further Assurances. Xxxxxx further agrees that, upon request by
------------------
Releasees, it shall do such further acts and deeds and shall execute,
acknowledge, deliver and record such other documents and instruments as
may be reasonably necessary from time to time to evidence, confirm or
carry out the intent and purpose of this Release.
(d) Lawful Authority. The person executing on behalf of Xxxxxx
----------------
hereby personally represents and warrants to AASI that he or she has
been fully authorized to
--------------------------------------------------------------------------------
Asset Purchase Agreement
execute and deliver this Release on behalf of such entity pursuant to a
duly adopted resolution or other binding authority.
(e) No Waiver. No consent or waiver expressed or implied by any
---------
beneficiary of this Release to or of any breach or default by any
party to this Release in the performance by such other party of its or
his obligations hereunder shall be deemed or construed to be a consent
or waiver to or of any breach or default of any other party of the same
or any subsequent obligations hereunder. Failure on the part of any
party to this Release to complain of any act or failure to act of any
party to this Release or to declare such part in default, irrespective
of how long such failure continues, shall not constitute a waiver by
the non-defaulting parties of their rights hereunder.
(f) Severability. If any nonmaterial provision of this Release is
------------
held to be unlawful, invalid or unenforceable under present or future
laws effective during the term hereof, such provision shall be fully
severable, and this Release shall be construed and enforced without
giving effect to such unlawful, invalid or unenforceable, nonmaterial
provision.
(g) Representation by Counsel. Xxxxxx acknowledges that it has been
-------------------------
represented by independent counsel of its own selection throughout the
negotiations which preceded the execution and delivery of this Release.
Furthermore, Xxxxxx and its counsel, has had adequate opportunity to
make, and has made, whatever investigation or inquiry that has been
deemed necessary or desirable in connection with the subject matter of
this Release prior to its or his execution and delivery.
(h) Facsimile Copies. Facsimile and counterpart copies of this
----------------
Release and the signatures of the parties hereto shall be deemed to be
originals for all purposes.
[signature on following page]
--------------------------------------------------------------------------------
Asset Purchase Agreement
Signature Page
to
General Global Release of All Claims
SIGNED this _____ day of ____________________, 2002.
XXXXXX AIRCRAFT CORPORATION,
a New Jersey corporation
By: [Exhibit Only]
----------------------------------
Xxxx X. Xxxxxx, Responsible Person
STATE OF TEXAS ss.
ss.
COUNTY OF ___________ ss.
Before me, a Notary Public, on this day personally appeared Xxxx X. Xxxxxx,
known to me to be the person and Responsible Person whose name is subscribed to
the foregoing instrument and acknowledged to me that the same was the act of
XXXXXX AIRCRAFT CORPORATION, a New Jersey corporation, and that he has executed
the same on behalf of the corporation for the purposes and consideration therein
expressed, and in the capacity therein stated.
Given under my hand and seal of office this ____ day of
____________________, 2002.
-------------------------------------------
Notary Public in and for the State of Texas
(SEAL)
CONSENTED TO BY THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS:
By: ____________________________
Name: ____________________________
Title: ____________________________
--------------------------------------------------------------------------------
Asset Purchase Agreement
Exhibit F
to
Asset Purchase Agreement
Form of Special Warranty Deed
-----------------------------
Special Warranty Deed
Date: [date of Closing]
Xxxxxx Aircraft Corporation,
Grantor: a New Jersey corporation
Grantor's Mailing Address: Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxx Xxxxxx, XX 00000
Grantee: Advanced Aerodynamics & Structure, Inc.,
a Delaware corporation [If assigned by
Buyer - Assignee's name should go here
instead]
Grantee's Mailing Address: 0000 Xxxxxxxx Xxxx.
Xxxx Xxxxx Xxxxxxx, XX 00000
Consideration: TEN AND NO/100 DOLLARS ($10.00) and
other good and valuable consideration,
the receipt and sufficiency of which is
hereby acknowledged.
Property (including any improvements): [to be filled in at closing - based on
title commitment description]
Reservations from Conveyance: None.
Exceptions to Conveyance and Warranty: See Exhibit "A" attached hereto.
-----------
Grantor, for the Consideration and subject to the Exceptions to
Conveyance (the "Permitted Exceptions"), grants, sells, and conveys to Grantee
--------------------
the Property, together with all and singular the rights and appurtenances
thereto in any way belonging, to have and to hold it to Grantee and Grantee's
successors and assigns forever. Except as to the Permitted Exceptions, Grantor
binds Grantor and Grantor's successors to warrant and forever defend all and
singular the Property to Grantee and Grantee's successors and assigns against
every person whomsoever lawfully claiming or to claim the same or any part
thereof when the claim is by, through, or under Grantor, but not otherwise.
When the context requires, singular nouns and pronouns include the
plural.
--------------------------------------------------------------------------------
Asset Purchase Agreement
GRANTOR:
XXXXXX AIRCRAFT CORPORATION,
a New Jersey corporation
By: [EXHIBIT ONLY]
-----------------------------------
Xxxx X. Xxxxxx, Responsible Person
STATE OF TEXAS ss.
ss.
COUNTY OF ________ ss.
This instrument was acknowledged before me this _____ day of
______________, 20____, by Xxxx X. Xxxxxx, Responsible Person of XXXXXX AIRCRAFT
CORPORATION, a New Jersey corporation, on behalf of said corporation.
-----------------------------------
Notary Public, State of Texas
[NOTARY STAMP]
--------------------------------------------------------------------------------
Asset Purchase Agreement
Exhibit A
to
Special Warranty Deed
List of Permitted Exceptions
----------------------------
[to be filled in at closing based on title commitment]
--------------------------------------------------------------------------------
Asset Purchase Agreement
Exhibit G
to
Asset Purchase Agreement
Form of Warrant
---------------
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO ADVANCED AERODYNAMICS & STRUCTURES, INC. THAT
SUCH REGISTRATION IS NOT REQUIRED.
Right to Purchase _________ shares of
Common Stock of Advanced Aerodynamics &
Structures, Inc. (subject to adjustment
as provided herein)
COMMON STOCK PURCHASE WARRANT
No. ____ Issue Date: ______________, 2002
ADVANCED AERODYNAMICS & STRUCTURES, INC., a corporation organized under the laws
of the State of Delaware (the "Company"), hereby certifies that, for value
received, ________________________________________ (the "Holder"), or assigns,
is entitled, subject to the terms set forth below, to purchase from the Company
from and after the Issue Date of this Warrant and at any time or from time to
time before 5:00 p.m., California time, through two years from the later of (i)
_______________ or (ii) the Effective Date of a Plan of Reorganization for
Xxxxxx Aircraft Company, a subsidiary of the Company, but in no event later than
August 31, 2004 (the "Expiration Date"), up to ___________ fully paid and
nonassessable shares of Common Stock (as hereinafter defined), $.0001 par value
per share, of the Company. The shares of Common Stock purchaseable hereunder
shall have a per share purchase price of $.45. The aforedescribed purchase price
per share, as adjusted from time to time as herein provided, is referred to
herein as the "Purchase Price". The number and character of such shares of
Common Stock and the Purchase Price are subject to adjustment as provided
herein.
As used herein the following terms, unless the context otherwise requires, have
the following respective meanings:
(a) The term "Company" shall include Advanced Aerodynamics &
Structures, Inc. and any corporation which shall succeed or assume the
obligations of Advanced Aerodynamics & Structures, Inc. hereunder.
(b) The term "Common Stock" includes (a) the Company's Class A Common
Stock, $.0001 par value per share, as authorized on the date of the Subscription
Agreement referred to in Section 9 hereof, (b) any other capital stock of any
class or classes (however designated) of the Company, authorized on or after
such date, the holders of which shall have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends and
liquidating dividends after the payment of dividends and distributions on any
shares entitled to
--------------------------------------------------------------------------------
Asset Purchase Agreement
preference, and the holders of which shall ordinarily, in the absence of
contingencies, be entitled to vote for the election of a majority of
directors of the Company (even if the right so to vote has been suspended by the
happening of such a contingency) and (c) any other securities into which or for
which any of the securities described in (a) or (b) may be converted or
exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
of assets or otherwise.
(c) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.
1. Exercise of Warrant.
-------------------
1.1. Number of Shares Issuable upon Exercise. From and after the date hereof
---------------------------------------
through and including the Expiration Date, the holder hereof shall be entitled
to receive, upon exercise of this Warrant in whole in accordance with the terms
of subsection 1.2 or upon exercise of this Warrant in part in accordance with
subsection 1.3, shares of Common Stock of the Company, subject to adjustment
pursuant to Section 4.
1.2. Full Exercise. This Warrant may be exercised in full by the holder hereof
-------------
by delivery of an original or facsimile copy of the form of subscription
attached as Exhibit A hereto (the "Subscription Form") duly executed by such
holder and surrender of the original Warrant within seven (7) days of exercise,
to the Company at its principal office or at the office of its Warrant Agent (as
provided hereinafter), accompanied by payment, in cash, wire transfer or by
certified or official bank check payable to the order of the Company, in the
amount obtained by multiplying the number of shares of Common Stock for which
this Warrant is then exercisable by the Purchase Price then in effect.
1.3. Partial Exercise. This Warrant may be exercised in part (but not for a
----------------
fractional share) by surrender of this Warrant in the manner and at the place
provided in subsection 1.2 except that the amount payable by the holder on such
partial exercise shall be the amount obtained by multiplying (a) the number of
shares of Common Stock designated by the holder in the Subscription Form by (b)
the Purchase Price then in effect. On any such partial exercise, the Company, at
its expense, will forthwith issue and deliver to or upon the order of the holder
hereof a new Warrant of like tenor, in the name of the holder hereof or as such
holder (upon payment by such holder of any applicable transfer taxes) may
request, the number of shares of Common Stock for which such Warrant may still
be exercised.
1.4. Fair Market Value. Fair Market Value of a share of Common Stock as of a
particular date (the "Determination Date") shall mean the Fair Market Value of a
share of the Company's Common Stock. Fair Market Value of a share of Common
Stock as of a Determination Date shall mean:
(a) If the Company's Common Stock is traded on an exchange or is quoted on
the National Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ") National Market System or the NASDAQ SmallCap Market, then the
closing or last sale price, respectively, reported for the last business day
immediately preceding the Determination Date.
--------------------------------------------------------------------------------
Asset Purchase Agreement
(b) If the Company's Common Stock is not traded on an exchange or on the
NASDAQ National Market System or the NASDAQ SmallCap Market but is traded in
the over-the-counter market, then the mean of the closing bid and asked prices
reported for the last business day immediately preceding the Determination Date.
(c) Except as provided in clause (d) below, if the Company's Common
Stock is not publicly traded, then as the Holder and the Company agree or in the
absence of agreement by arbitration in accordance with the rules then standing
of the American Arbitration Association, before a single arbitrator to be chosen
from a panel of persons qualified by education and training to pass on the
matter to be decided.
(d) If the Determination Date is the date of a liquidation, dissolution
or winding up, or any event deemed to be a liquidation, dissolution or winding
up pursuant to the Company's charter, then all amounts to be payable per share
to holders of the Common Stock pursuant to the charter in the event of such
liquidation, dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Stock in liquidation under the charter, assuming
for the purposes of this clause (d) that all of the shares of Common Stock then
issuable upon exercise of all of the Warrants are outstanding at the
Determination Date.
1.5. Company Acknowledgment. The Company will, at the time of the exercise of
----------------------
the Warrant, upon the request of the holder hereof acknowledge in writing its
continuing obligation to afford to such holder any rights to which such holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such holder any such rights.
1.6. Trustee for Warrant Holders. In the event that a bank or trust company
---------------------------
shall have been appointed as trustee for the holders of the Warrants pursuant to
Subsection 3.2, such bank or trust company shall have all the powers and duties
of a warrant agent (as hereinafter described) and shall accept, in its own name
for the account of the Company or such successor person as may be entitled
thereto, all amounts otherwise payable to the Company or such successor, as the
case may be, on exercise of this Warrant pursuant to this Section 1.
2.1 Delivery of Stock Certificates, etc. on Exercise. The Company agrees that
------------------------------------------------
the shares of Common Stock purchased upon exercise of this Warrant shall be
deemed to be issued to the holder hereof as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within seven (7) days thereafter, the Company at its expense (including
the payment by it of any applicable issue taxes) will cause to be issued in the
name of and delivered to the holder hereof, or as such holder (upon payment by
such holder of any applicable transfer taxes) may direct in compliance with
applicable securities laws, a certificate or certificates for the number of duly
and validly issued, fully paid and nonassessable shares of Common Stock (or
Other Securities) to which such holder shall be entitled on such exercise, plus,
in lieu of any fractional share to which such holder would otherwise be
entitled, cash equal to such fraction multiplied by the then Fair Market Value
of one full share, together with any other stock or other securities and
property (including cash, where applicable) to which such holder is entitled
upon such exercise pursuant to Section 1 or otherwise.
--------------------------------------------------------------------------------
Asset Purchase Agreement
2.2. Cashless Exercise.
-----------------
(a) Payment may be made either in (i) cash or by certified or official
bank check payable to the order of the Company equal to the applicable aggregate
Purchase Price, (ii) by delivery of Warrants, Common Stock and/or Common Stock
receivable upon exercise of the Warrants in accordance with Section (b) below or
(iii) by a combination of any of the foregoing methods, for the number of Common
Shares specified in such form (as such exercise number shall be adjusted to
reflect any adjustment in the total number of shares of Common Stock issuable to
the holder per the terms of this Warrant) and the holder shall thereupon be
entitled to receive the number of duly authorized, validly issued, fully-paid
and non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.
(b) Notwithstanding any provisions herein to the contrary, if the Fair
Market Value of one share of Common Stock is greater than the Purchase Price (at
the date of calculation as set forth below), in lieu of exercising this Warrant
for cash, the holder may elect to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof being cancelled) by
surrender of this Warrant at the principal office of the Company together with
the properly endorsed Subscription Form in which event the Company shall issue
to the holder a number of shares of Common Stock computed using the following
formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued
to the holder
Y = the number of shares of Common Stock
purchasable under the Warrant or, if only a
portion of the Warrant is being exercised,
the portion of the Warrant being exercised
(at the date of such calculation)
A = the Fair Market Value of one share of the
Company's Common Stock (at the date of such
calculation)
B = Purchase Price (as adjusted to the date of such
calculation)
3. Adjustment for Reorganization, Consolidation, Merger, etc.
----------------------------------------------------------
3.1. Reorganization, Consolidation, Merger, etc. In case at any time or from
-------------------------------------------
time to time, the Company shall (a) effect a reorganization, (b) consolidate
with or merge into any other person or (c) transfer all or substantially all of
its properties or assets to any other person under any plan or arrangement
contemplating the dissolution of the Company, then, in each such case, as a
condition to the consummation of such a transaction, proper and adequate
provision shall be made by the Company whereby the holder of this Warrant, on
the exercise hereof as provided in Section 1, at any time after the consummation
of such reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock (or
Other Securities) issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such holder had so
exercised this Warrant, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 4.
--------------------------------------------------------------------------------
Asset Purchase Agreement
3.2. Dissolution. In the event of any dissolution of the Company following the
-----------
transfer of all or substantially all of its properties or assets, the Company,
prior to such dissolution, shall at its expense deliver or cause to be delivered
the stock and other securities and property (including cash, where applicable)
receivable by the holders of the Warrants after the effective date of such
dissolution pursuant to this Section 3 to a bank or trust company having its
principal office in New York, NY, as trustee for the holder or holders of the
Warrants.
3.3. Continuation of Terms. Upon any reorganization, consolidation, merger or
---------------------
transfer (and any dissolution following any transfer) referred to in this
Section 3, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 4. In the
event this Warrant does not continue in full force and effect after the
consummation of the transaction described in this Section 3, then only in such
event will the Company's securities and property (including cash, where
applicable) receivable by the holders of the Warrants be delivered to the
Trustee as contemplated by Section 3.2.
4. Extraordinary Events Regarding Common Stock. In the event that the Company
-------------------------------------------
shall (a) issue additional shares of the Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its outstanding shares
of Common Stock or (c) combine its outstanding shares of the Common Stock into a
smaller number of shares of the Common Stock, then, in each such event, the
Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 4. The number
of shares of Common Stock that the holder of this Warrant shall thereafter, on
the exercise hereof as provided in Section 1, be entitled to receive shall be
increased or decreased to a number determined by multiplying the number of
shares of Common Stock that would otherwise (but for the provisions of this
Section 4) be issuable on such exercise by a fraction of which (a) the numerator
is the Purchase Price that would otherwise (but for the provisions of this
Section 4) be in effect, and (b) the denominator is the Purchase Price in effect
on the date of such exercise.
5. Certificate as to Adjustments. In each case of any adjustment or readjustment
-----------------------------
in the shares of Common Stock (or Other Securities) issuable on the exercise of
the Warrants, the Company at its expense will promptly cause its Chief Financial
Officer or other appropriate designee to compute such adjustment or readjustment
in accordance with the terms of the Warrant and prepare a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding and (c) the Purchase Price and the
number of shares of Common Stock to be
--------------------------------------------------------------------------------
Asset Purchase Agreement
received upon exercise of this Warrant, in effect immediately prior to such
adjustment or readjustment and as adjusted or readjusted as provided in this
Warrant. The Company will forthwith mail a copy of each such certificate to the
holder of the Warrant and any Warrant Agent of the Company (appointed pursuant
to Section 12 hereof).
6. Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial
---------------------------------------------------------------------
Statements. From and after forty-five (45) days after the Issue Date of this
----------
Warrant, the Company will at all times reserve and keep available, solely for
issuance and delivery on the exercise of the Warrants, all shares of Common
Stock (or Other Securities) from time to time issuable on the exercise of the
Warrant. This Warrant entitles the holder hereof to receive copies of all
financial and other information distributed or required to be distributed to the
holders of the Company's Common Stock.
7. Assignment; Exchange of Warrant. Subject to compliance with applicable
-------------------------------
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a "Transferor") with respect to any
or all of the Shares. On the surrender for exchange of this Warrant, with the
Transferor's endorsement in the form of Exhibit B attached hereto (the
"Transferor Endorsement Form") and together with evidence reasonably
satisfactory to the Company demonstrating compliance with applicable securities
laws, the Company at its expense, but with payment by the Transferor of any
applicable transfer taxes) will issue and deliver to or on the order of the
Transferor thereof a new Warrant or Warrants of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a "Transferee"), calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or faces
of the Warrant so surrendered by the Transferor.
8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the
----------------------
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction of this Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
9. Registration. This Warrant has been issued without registration under the
------------
Securities Act of 1933, as amended, in accordance with Section 1145 of the
United States Bankruptcy Code. Following the issuance of a "no action letter" by
the staff of the Securities and Exchange Commission to the effect that this
Warrant and the underlying shares may be resold without registration under the
Securities Act of 1933, the legend set forth on the face of this Warrant will be
removed upon request of the Warrant Holder.
10. Call Option. The Company shall have the option to "call" the Warrants (the
-----------
"Warrant Call"), in accordance with and governed by the following:
(a) The Company shall exercise the Warrant Call by giving to each Warrant
Holder a written notice of call (the "Call Notice") during the period in which
the Warrant Call may be exercised.
(b) Unless otherwise agreed to by the Holder of this Warrant, the Call
Notice must be given to all Warrant Holders who receive Warrants similar to this
Warrant (in terms of exercise price and other principal terms) on or about the
same issue date as this Warrant in
--------------------------------------------------------------------------------
Asset Purchase Agreement
proportion to the amounts of Common Stock which can be purchased by the
respective Warrant Holders in accordance with the respective Warrant held by
each.
(c) The Company may give a Call Notice if and only if the closing sale
price of the Common Stock, as reported on the NASD OTC Bulletin Board, NASDAQ
National Market, NASDAQ SmallCap Market, American Stock Exchange or New York
Stock Exchange (whichever of the foregoing is, at the time, the principal
trading exchange or market for the Common Stock (the "Principal Market")), of if
not then trading on a Principal Market, such other principal market or exchange
where the Common Stock is listed or traded, for each of the ten (10) trading
days prior to but not including the date of the Call Notice (the "Lookback
Period") is at least $.90 and the average daily trading volume of the Common
Stock during the Lookback Period is not less than twenty-five thousand (25,000)
Common Shares.
(d) The respective Warrant Holders shall exercise their Warrant rights
and purchase the appropriate Warrant Shares and pay for same within fourteen
(14) business days of the date of the Call Notice. If the Warrant Holder fails
to timely pay the funds or deliver the Warrant Shares issued upon cashless
exercise required by the Warrant Call, the Company may elect to cancel a
corresponding amount of this Warrant.
11. Warrant Agent. The Company may, by written notice to the each holder of the
-------------
Warrant, appoint an agent for the purpose of issuing Common Stock (or Other
Securities) on the exercise of this Warrant pursuant to Section 1, exchanging
this Warrant pursuant to Section 7, and replacing this Warrant pursuant to
Section 8, or any of the foregoing, and thereafter any such issuance, exchange
or replacement, as the case may be, shall be made at such office by such agent.
12. Transfer on the Company's Books. Until this Warrant is transferred on the
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books of the Company, the Company may treat the registered holder hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
13. Notices. All notices and other communications from the Company to the holder
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of this Warrant shall be mailed by first class registered or certified mail,
postage prepaid, at such address as may have been furnished to the Company in
writing by such holder or, until any such holder furnishes to the Company an
address, then to, and at the address of, the last holder of this Warrant who has
so furnished an address to the Company.
14. Miscellaneous. This Warrant and any term hereof may be changed, waived,
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discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of California. Any dispute relating to this Warrant shall
be adjudicated in Los Angeles County in the State of California. The headings in
this Warrant are for purposes of reference only, and shall not limit or
otherwise affect any of the terms hereof. The invalidity or unenforceability of
any provision hereof shall in no way affect the validity or enforceability of
any other provision.
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Asset Purchase Agreement
IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.
ADVANCED AERODYNAMICS & STRUCTURES, INC.
By:
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Xxx Xxxxxx, Chief Executive Officer
Witness:
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Asset Purchase Agreement
Exhibit A
to Warrant
FORM OF SUBSCRIPTION
(to be signed only on exercise of Warrant)
TO: Advanced Aerodynamics & Structures, Inc.
The undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable box):
___ ________ shares of the Common Stock covered by such Warrant; or
___ the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in Section 2.
The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box or boxes):
___ $__________ in lawful money of the United States; and/or
___ the cancellation of such portion of the attached Warrant as is exercisable
for a total of _______ shares of Common Stock (using a Fair Market Value of
$_______ per share for purposes of this calculation); and/or
___ the cancellation of such number of shares of Common Stock as is necessary,
in accordance with the formula set forth in Section 2, to exercise this Warrant
with respect to the maximum number of shares of Common Stock purchasable
pursuant to the cashless exercise procedure set forth in Section 2.
The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to __________________________________ whose address
is _________________________________.
The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act"), or pursuant to an exemption from
registration under the Securities Act.
Dated:___________________ __________________________________________
(Signature must conform to name of holder
as specified on the face of the Warrant)
__________________________________________
__________________________________________
(Address)
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Asset Purchase Agreement
Exhibit B
to Warrant
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers unto
the person(s) named below under the heading "Transferees" the right represented
by the within Warrant to purchase the percentage and number of shares of Common
Stock of Advanced Aerodynamics & Structures, Inc. to which the within Warrant
relates specified under the headings "Percentage Transferred" and "Number
Transferred," respectively, opposite the name(s) of such person(s) and appoints
each such person Attorney to transfer its respective right on the books of
Advanced Aerodynamics & Structures, Inc. with full power of substitution in the
premises.
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Transferees Percentage Transferred Number Transferred
----------- ---------------------- ------------------
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Dated: ______________, ___________ _________________________________________
(Signature must conform to name of holder
as specified on the face of the warrant)
Signed in the presence of:
__________________________ _________________________________________
(Name)
_________________________________________
(address)
_________________________________________
_________________________________________
ACCEPTED AND AGREED: (address)
[TRANSFEREE]
__________________________
(Name)
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Asset Purchase Agreement
