Exhibit 10.6(a)
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (the "Agreement"), dated March 4, 1999,
is between Argaman, Inc., an Isle of St. Kitts, Nevis corporation ("Seller"),
and Aviation Holdings Group, Inc., a Delaware corporation (hereinafter "AHG" or
"Buyer"). Buyer desires to acquire from Seller, and Seller is willing to
transfer to Buyer, upon the terms and conditions of this Agreement, an aggregate
of 600,000 shares of common stock that Seller owns (the "AHI Shares") in
Aviation Holdings International, Inc., a Florida corporation.
1. Transfer by Seller. In exchange for the consideration set forth
below, at Closing (as defined in paragraph 3), Seller will transfer and convey
the AHI Shares to Buyer, free and clear of all liabilities, security interests,
liens, pledges, claims and encumbrances.
2. Consideration. The aggregate consideration for the AHI Shares shall
be (i) a warrant to purchase 100,000 shares of common stock, $.001 par value per
share (the "Warrant"), of Buyer at an exercise price of $3.75 per share in
substantially the form attached hereto as Exhibit "A," and (ii) 500,000 shares
of common stock, $.0001 par value per share, of Buyer (the "AHG Shares").
3. Closing.
3.1 Time and Place. The closing for the purchase (the "Closing")
will be held at the offices of Klehr, Harrison, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
("KHHBE"), located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
on _____________, 1999 (the "Closing Date") provided that, if the Closing has
not been completed by ________________, 1999, this Agreement will terminate and
neither party will have any further obligations to the other except for any
breach of its obligations hereunder.
3.2 Delivery by Seller. At the Closing, Seller will deliver to Buyer
certificates representing the AHI Shares, duly endorsed for transfer.
3.3 Delivery by Buyer. At the Closing, Buyer shall deliver to Seller
the Warrant and certificates representing the AHG Shares.
4. Representations and Warranties by Seller. Seller represents and
warrants to Buyer as follows:
4.1 Ownership and Power to Transfer. Seller is the lawful owner, of
record and beneficially, of the AHI Shares free and clear of all liabilities,
security interests, liens, pledges, claims and encumbrances. Upon delivery of
certificates representing the AHI Shares as contemplated by this Agreement,
Buyer will acquire good title to the AHI Shares, free and clear of any
liability, security interest, lien, pledge, claim or encumbrance of any nature
whatsoever other than any restrictions on the transfer of the AHI Shares
required by the Securities Act of 1933, as amended (the "Securities Act").
4.2 Validity of the Agreement. This Agreement constitutes the
legal, valid and binding agreement of Seller enforceable against Seller in
accordance with its terms.
4.3 No Violation. Neither the execution or delivery of this
Agreement by Seller, nor the performance by Seller of any of the transactions
contemplated hereby (i) conflicts with, or constitutes a breach or default under
(a) any applicable judgment, order, writ, injunction or decree of any court or
(b) any applicable law or any applicable rule or regulation of any
administrative agency or governmental or regulatory authority or (ii) violates,
conflicts with, or constitutes a default (or an event or condition that, with
notice or lapse of time or both, would constitute a default) under, any
contract, commitment, understanding, arrangement, agreement or restriction of
any kind or character to which Seller is a party or may be bound.
4.4 Additional Representations and Warranties. The Seller
represents and warrants as follows, which representations and warranties shall
be true and correct as of the date when made and as of the Closing Date as
though made at that time:
(a) Seller is acquiring the Warrant and the AHG Shares for
its own account for investment purposes only and not with a view to the resale
or distribution thereof.
(b) Seller has not and will not, directly or indirectly,
offer, sell, transfer, assign, exchange or otherwise dispose of all or any part
of the Warrant or the AHG Shares, except in accordance with the provisions of
this Agreement and the Securities Act.
(c) Seller is acquiring the Warrant and the AHG Shares
without having relied upon any offering literature or prospectus. Seller has
such knowledge and experience in financial, business and tax matters that Seller
is capable of evaluating the merits and risks relating to Seller's investment in
the Warrant and the AHG Shares and making an investment decision with respect to
the Warrant and the AHG Shares.
(d) To the full satisfaction of Seller, Seller has been
given the opportunity to obtain information and documents relating to Buyer and
to ask questions of and receive answers from representatives of Buyer concerning
Buyer and the investment in the Warrant and the AHG Shares.
(e) Seller has adequately analyzed the risks of an
investment in the Warrant and the AHG Shares and has determined that the Warrant
and the AHG Shares are a suitable investment for Seller and that Seller is able
at this time, and in the foreseeable future, to bear the economic risk of a
total loss of its investment in Buyer.
(f) Seller is aware that there are substantial risks
attendant to an investment in the Warrant and the AHG Shares.
(g) Seller is an "accredited investor" as defined in Rule
501 of Regulation D of the Securities Act ("Regulation D") as presently in
effect and is purchasing the Warrant and the AHG Shares for its own account and
the Seller, if an entity, has not been formed for the specific purpose of
acquiring the Warrant and the AHG Shares.
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(h) Seller understands that no United States federal or
state agency or any other government or governmental agency has passed upon or
made any recommendation or endorsement of the Warrant and the AHG Shares.
(i) Seller understands that the Warrant and the AHG Shares
are being offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and
that Buyer is relying upon the truth and accuracy of, and Seller's compliance
with, the representations, warranties, and agreements, of Seller set forth
herein in order to determine the availability of such exemptions and the
eligibility of Seller to acquire the Warrant and the AHG Shares.
(j) Seller is a resident of the jurisdiction set forth
under Seller's name on the signature page hereof.
5. Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows, which representations and warranties shall be
true and correct as of the date when made and as of the Closing Date as though
made at that time:
5.1 Fees or Commissions. Buyer has not made any agreement or
taken any action which might cause anyone to become entitled to a broker's fee
or commission as a result of the transactions contemplated hereunder.
5.2 Validity of the Agreement. This Agreement constitutes the
legal, valid and binding agreement of Buyer enforceable against Buyer in
accordance with its terms.
5.3 Absence of Litigation. There is no litigation, proceeding,
claim or investigation pending or threatened, against or affecting the AHG
Shares, whether or not fully covered by insurance, nor is there any valid basis
for any such litigation, proceeding, claim or investigation.
5.4 No Violation. Neither the execution or delivery of this
Agreement by Buyer, nor the performance by Buyer of any of the transactions
contemplated hereby (i) conflicts with, or constitutes a breach or default under
(a) any applicable judgment, order, writ, injunction or decree of any court or
(b) any applicable law or any applicable rule or regulation of any
administrative agency or governmental or regulatory authority or (ii) violates,
conflicts with, or constitutes a default (or an event or condition that, with
notice or lapse of time or both, would constitute a default) under, any
contract, commitment, understanding, arrangement, agreement or restriction of
any kind or character to which Buyer is a party or may be bound.
5.5 No General Solicitation. Buyer has not conducted any
"general solicitations" as such term is defined in Rule 502(c) of Regulation D,
with respect to the AHG Shares being offered hereby.
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6. Indemnity.
6.1 Seller shall indemnify Buyer, and hold Buyer harmless from
and against, any loss, liability, claim, obligation, damage or deficiency,
including interest, penalties and reasonable attorneys fees and expenses
(collectively "Damages") arising from any misrepresentation or breach of
warranty made by Seller in this Agreement or any nonfulfillment by Seller of any
obligation on the part of Seller set forth in this Agreement.
6.2 Buyer shall indemnify Seller and hold Seller harmless from
and against any Damages arising from any misrepresentation or breach of warranty
made by Buyer in this Agreement or any nonfulfillment by Buyer of any obligation
on the part of Buyer set forth in this Agreement.
6.3 Any party which may be entitled to indemnification under
this Agreement shall give prompt notice to the indemnifying party. The
indemnifying party shall have the right, at its expense, to assume and direct
the investigation and defense of any claim, action or proceeding, including the
selection of counsel, provided any counsel selected by the indemnifying party is
reasonably satisfactory to the indemnified party. No settlement for monetary
payment which is the subject of indemnity under this Agreement shall be made
without the consent of the indemnifying party and the indemnifying party shall
have the right to direct proceedings with respect to such settlement. All
amounts to which an indemnified party may be entitled hereunder shall be
advanced by the indemnifying party as such amounts are incurred.
6.4 Remedies Cumulative. Except as expressly provided in this
Agreement, the remedies provided herein shall be cumulative and shall not
preclude assertion by any party hereto of any other rights or the seeking of any
other remedies against any other party hereto.
7. Registration Rights.
7.1 Buyer shall use its best efforts to file, as soon as
practicable after the registration statement filed by the Buyer with the U.S.
Securities and Exchange Commission in connection with the proposed public
offering of the Buyer's securities is declared effective, a registration
statement (the "Registration Statement") to register for resale under the
Securities Act, among other securities of Buyer, 100,000 of the AHG Shares and
the 100,000 shares of Buyer's common stock underlying the exercise of the
Warrant (the "Warrant Shares"). Seller shall have the right to sell up to a
maximum of 25,000 AHG Shares during each successive 90-day period subsequent to
the date the Registration Statement is declared effective by the U.S. Securities
and Exchange Commission.
7.2 Information Regarding Sellers; Underwriting Arrangements.
(a) Seller shall furnish to Buyer such information
regarding Seller and the distribution of Seller's AHG Shares and the Warrant
Shares as Buyer may from time to time request in order to comply with the
Securities Act and the rules and regulations of the Securities and Exchange
Commission thereunder. Seller shall notify Buyer as promptly as practicable of
any inaccuracy or change in information previously furnished by Seller to Buyer
or of the happening of
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any event as a result of which any prospectus relating to the Registration
Statement contains an untrue statement of a material fact regarding Seller or
the distribution of Seller's AHG Shares and the Warrant Shares or omits to state
any material fact regarding Seller or the distribution of Seller's AHG Shares
and the Warrant Shares required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and shall promptly furnish to Buyer any additional information
required to correct or update any previously furnished information or required
so that such prospectus shall not contain, with respect to Seller or the
distribution of securities, an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(b) Seller shall, if requested by Buyer or the managing
underwriter(s) in connection with the Registration Statement, (i) subject to
Section 7.3 hereof, agree to sell its eligible AHG Shares and the Warrant Shares
on the basis provided in any underwriting arrangements entered into in
connection therewith and (ii) complete and execute all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents customary in
similar offerings.
7.3 Restrictions on Sales. Except in connection with any
registration under this Section 7, Seller shall not sell any shares of Common
Stock of AHG or securities convertible into or exercisable for Common Stock of
AHG for twelve (12) months following the Closing. In connection with any
registration under this Section 7, Seller shall not sell any shares of Common
Stock of AHG or securities convertible into or exercisable for Common Stock of
AHG, except pursuant to such registration, for the period following the
effective date of the applicable registration statement that the managing
underwriter of the offering determines is necessary to effect the offering,
which period shall not exceed 360 days.
7.4 Registration Rights Indemnification.
(a) Indemnification by Buyer. In connection with any
registration pursuant to this Section 7, Buyer shall indemnify, defend and hold
harmless Seller, each person who controls such Seller within the meaning of the
Securities Act, and each of the partners, officers, directors, employees and
agents of the foregoing in their respective capacities as such (the
"Indemnitees"), to the full extent lawful, from and against all actions, suits,
claims, proceedings, costs, damages, judgments, amounts paid in settlement and
expenses (including, without limitation, reasonable attorneys' fees and
disbursements), whether joint or several (collectively, a "Loss"), to which any
such Indemnitee may become subject under the Securities Act or any other statute
or common law, insofar as any such Loss may arise out of or be based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such securities were registered, any
preliminary, final or summary prospectus contained therein, or any amendment or
supplement thereto, or in any filing made in connection with the qualification
of the offering under blue sky or other securities laws of jurisdictions in
which the Common Stock subject to registration rights are offered ("Blue Sky
Filing"), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading and Buyer will reimburse each Indemnitee for any legal or
other expenses reasonably incurred in connection with investigating or defending
such Loss; provided, however, that such indemnification covenant shall not (i)
apply to any Loss arising out of, or based upon, any such untrue statement or
alleged untrue statement, or any such omission or alleged
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omission, if such statement or omission was made in reliance upon and in
conformity with written information furnished to Buyer by or on behalf of such
Indemnitee for use in connection with preparation of the registration statement,
any preliminary prospectus or final prospectus contained in the registration
statement, any such amendment or supplement thereto or any Blue Sky Filing or
(ii) inure to the benefit of any Indemnitee to the extent that any such Loss
arises out of such Indemnitee's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, to the person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of the securities
to such person if such statement or omission was corrected in such final
prospectus. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of any Indemnitee and shall survive the
transfer of such securities by any Indemnitee.
(b) Indemnification by the Seller. As a condition to
including any securities in any registration statement filed pursuant to this
Section 7, Buyer shall have received an undertaking satisfactory to it from the
Seller to indemnify, defend and hold harmless (in the same manner and to the
same extent as set forth in Section 7.4(a) of this Section 7) Buyer, each
director of Buyer, each officer of Buyer and each other person, if any, who
controls Buyer within the meaning of the Securities Act, with respect to any
untrue statement or alleged untrue statement in, or omission or alleged omission
from, such registration statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein or any Blue Sky Filing, or any amendment
or supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to Buyer by or on behalf of Seller for use in the
preparation of the Registration Statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement; provided, however, in
no event shall the liability of Seller under this paragraph (b) exceed the net
proceeds received by Seller (after the payment of underwriting discounts and
commissions) from the sale of its AHG Shares or Warrant Shares pursuant to the
Registration Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of Buyer or any such
director, officer or controlling person and shall survive the transfer of such
securities by Seller.
(c) Notices of Claims. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim hereunder, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action, provided that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Section 7.4(c) unless the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, the indemnifying
party shall be entitled to participate in and, unless a conflict of interest
between such indemnified and indemnifying parties exists in respect of such
claim, to assume the defense thereof, jointly with any other indemnifying party
similarly notified to the extent that the indemnifying party may wish, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof. In the event that the
indemnifying party advises an indemnified party that it will contest a claim for
indemnification hereunder, or fails, within 30 days of receipt of any
indemnification notice
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to notify, in writing, such person of its election to defend, settle or
compromise any action, proceeding or claim (or discontinues its defense at any
time after it commences such defense), then the indemnified party may, at its
option, defend, settle or otherwise compromise or pay such action or claim with
the consent of the indemnifying party, which consent shall not be unreasonably
withheld. The indemnified party shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such action or claim
by the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party that relates to such
action or claim. The indemnifying party shall keep the indemnified party fully
apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend
any such action or claim, then the indemnified party shall be entitled to
participate in such defense with counsel of its choice at its sole cost and
expense. If the indemnifying party does not assume such defense, the indemnified
party shall keep the indemnifying party apprised at all times as is reasonably
practicable as to the status of the defense. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its written consent; provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the consent of the indemnified party (not to be unreasonably
withheld), consent to entry of any judgment or enter into any settlement that
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation.
8. Miscellaneous Terms and Conditions.
8.1 Other Transactions. Prior to Closing, Seller shall not, and
shall not permit any party on Seller's behalf to, directly or indirectly,
encourage, solicit, initiate or participate in discussions or negotiations with,
or provide any information or assistance to, any corporation, partnership,
person or other entity or group (other than Buyer and Buyer's representatives)
concerning any merger, sale of securities, sale of substantial assets or similar
transactions involving AHI, Jet Aviation Trading, Inc. or the Seller.
8.2 Confidentiality. Seller and Buyer shall hold, and shall cause
their respective consultants and advisors to hold, in strict confidence, unless
compelled to disclose by judicial or administrative process or by other
requirements of law, all documents and information concerning the other parties
furnished to it by any other party or its representatives in connection with the
transactions contemplated by this Agreement (except to the extent that such
information shall be shown to have been (a) previously known by the party to
which it was furnished, (b) in the public domain through no fault of such party
or (c) later lawfully acquired from other sources by the party to which it was
furnished), and each party shall not release or disclose such information to any
other person, except its auditors, attorneys, financial advisors, bankers and
other consultants and advisors in connection with the transactions contemplated
by this Agreement. Each party shall be deemed to have satisfied its obligation
to hold confidential information concerning or supplied by the other party if it
exercises the same care as it takes to preserve confidentiality for its own
similar information.
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8.3 Execution of Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties hereto and delivered to each of the other parties
hereto.
8.4 Entire Agreement. This Agreement represents the entire
understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
and understandings heretofore made and shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, successors and
assigns.
8.5 Governing Law. This Agreement will be governed by the laws
of the State of Delaware in the United States.
8.6 Notices. All notices and other communications between the
parties shall be in writing and shall be deemed to have been given if mailed
first-class, postage prepaid to the address set forth below or such other
address as Seller or Buyer may give the other for such purpose:
If to Buyer: Aviation Holdings Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Klehr, Harrison, ▇▇▇▇▇▇,
Branzburg & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Seller: Argaman, Inc.
c/o MSA Trust Company Ltd.
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
8.7 Further Assurances. Prior to and following the Closing, at
the request of either party, the other party or parties shall deliver any
further instruments of transfer and take all reasonable actions as may be
necessary or appropriate to (i) effectuate the conveyance of the AHI Shares and
the AHG Shares as contemplated hereby and (ii) effectuate any of the other
transactions contemplated by this Agreement.
8.8 Specific Performance. Seller and Buyer acknowledge that,
in view of the uniqueness of the Company's business, Buyer would not have an
adequate remedy at law for money damages in the event that this Agreement were
not performed in accordance with its terms, and therefore agree that Buyer shall
be entitled to specific enforcement of the terms hereof in addition to any other
remedy to which it may be entitled, at law or in equity.
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8.9 Participation of KHHBE. The Seller acknowledges that KHHBE
has represented and continues to represent AHG with respect to the transactions
contemplated by this Agreement, that KHHBE has not rendered any advice to Seller
with respect to same, and that Seller has had the opportunity to seek advice of
counsel with respect to the risks and merits of the transactions contemplated by
this Agreement including, but not limited to, any federal or state tax
consequences associated with the exchange of AHI Shares for the AHG Shares.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have executed this Agreement as of the date first written above.
SELLER: BUYER:
ARGAMAN, INC. AVIATION HOLDINGS GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------- -----------------------------
Name: Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Title: President
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