(10.71)
Asset Purchase Agreement between Aero Services International, Inc.
and Xxxxx XX Aviation, Inc. dated May 10, 1996.
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made this
10th day of May, 1996, by and among AERO SERVICES INTERNATIONAL,
INC. ("Seller"), a Louisiana corporation with its principal
place of business at 000 Xxxxxxx-Xxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxxxx 00000, XXXXX XX AVIATION, INC. ("Purchaser"), a
Louisiana corporation with its principal place of business at
5500 Stars and Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxx 00000,
and XXXXXXX X. XXXXXXX, an individual residing at 00 Xxxxxxxxx
Xxxx, Xxxxx Xxxxxx Xxxxx, Xxx Xxxxxx 00000 ("Xxxxxxx").
W I T N E S S E T H:
WHEREAS, Seller is the owner of fixed base operations
serving the aviation industry at the New Orleans Lakefront
Airport, located in New Orleans, Louisiana (the "Airport"); and
WHEREAS, Seller was the lessee under a certain lease
agreement by and between Seller and the Board of Levee
Commissioners of the Orleans Levee District (the "Levee Board")
("Seller's FBO Lease"); and
WHEREAS, Purchaser is the owner of its own fixed base
operations serving the aviation industry at the Airport; and
WHEREAS, Purchaser is also a lessee under a lease agreement
by and between Purchaser and the Levee Board; and
WHEREAS, as of February 1, 1996, Seller and Purchaser
consolidated, for operational purposes, their fixed base
operations at the Airport; and
WHEREAS, since February 1, 1996, Purchaser has been
managing and operating the consolidated fixed base operations of
Purchaser and Seller at the Airport; and
WHEREAS, under the terms and conditions hereinafter set
forth, Purchaser desires to purchase and acquire from Seller,
and Seller desires to sell, transfer and assign to Purchaser,
all of Seller's right title and interest in and to Seller's FBO
Lease and certain of Seller's assets used in the operation of
Seller's FBO (as hereinafter defined);
NOW, THEREFORE, in consideration of the foregoing premises,
the mutual promises and covenants hereinafter set forth, and for
other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. Definitions. In addition to the terms defined
elsewhere in this Agreement, unless otherwise stated in this
Agreement, the following terms will have the meanings set forth
below:
1.1. "Assumed Obligations" has the meaning ascribed to
such term in Section 2.2 hereof.
1.2. "Cash Flow" means net income (as determined in
accordance with Generally Accepted Accounting Principles),
adjusted for non-cash income and expenses by adding to the net
income, depreciation expense, and reducing net income by Three
Thousand Dollars ($3,000) per month for corporate overhead.
1.3. "Closing" means the transfer, assignment,
conveyance and sale of the Purchased Assets from Seller to
Purchaser in exchange for the payment by Purchaser to Seller of
the Purchase Price and the assumption by Purchaser of the
Assumed Obligations, and the consummation of all other
transactions as contemplated by, and in accordance with the
terms and conditions of this Agreement.
1.4. "Closing Date" means the date on which the
Closing occurs, which shall be May 7, 1996, or such other date
as mutually agreed to by Purchaser and Seller.
1.5. "Consolidated Operations" means Seller's FBO and
Purchaser's FBO, as consolidated for operational purposes, as of
the Effective Date and as operated and maintained by Purchaser
since the Effective Date.
1.6. "Contracts" means those written agreements listed
on Schedule 1.6 hereto, entered into by Seller pertaining to
Seller's FBO.
1.7. "Effective Date" means February 1, 1996.
1.8. "Excluded Assets" means Seller's cash on hand or
on deposit, Seller's accounts receivable and those other items
listed on Schedule 1.8 hereto, which are not being sold,
transferred and assigned to Purchaser hereunder.
1.9. "F F & E" means the furniture, fixtures, and
equipment used by Seller at Seller's FBO, listed on Schedule 1.9
hereto, that are being sold, transferred and assigned to
Purchaser hereunder.
1.10. "Inventory" means the inventory, including
oil and fuel inventory, on hand at Seller's FBO as of the
Effective Date, as set forth on Schedule 1.10 hereto.
1.11. "Permitted Encumbrances" means those liens
and encumbrances affecting the Purchased Assets listed on
Schedule 1.11 hereto.
1.12. "Purchase Price" has the meaning ascribed to
such term in Section 2.3 hereto.
1.13. "Purchased Assets" means the F F & E,
Inventory, Seller's FBO Lease, and the Contracts as defined
herein, but does not include Seller's cash on hand or on deposit
or Seller's accounts receivable.
1.14. "Purchaser's FBO" means the fixed base
operations of Purchaser (including, without limitation,
Purchaser's leasehold interest and operational assets at the
Airport) as maintained and operated by Purchaser at the Airport
prior to and on the Effective Date.
1.15. "Seller's FBO" means the fixed base
operations of Seller (including, without limitation, Seller's
leasehold interest and operational assets at the Airport) as
maintained and operated by Seller at the Airport prior to the
Effective Date.
1.16. "Senior Lender" means Huntington National
Bank, a national banking institution with offices in Cincinnati,
Ohio, or such other bank or lending institution that provides
financing to Purchaser in an amount of not less than Seven
Hundred Fifty Thousand Dollars ($750,000), to be used by
Purchaser as operating capital and to retire Purchaser's current
indebtedness to Gulf Coast Bank and Trust Company, with offices
in New Orleans, Louisiana ("Gulf Coast Bank").
2. Sale and Purchase of Assets; Assumed Obligations.
2.1. On the terms and subject to the conditions set
forth in this Agreement, Purchaser hereby agrees to purchase the
Purchased Assets from Seller and Seller hereby agrees to sell,
convey, transfer, assign and set over the Purchased Assets to
Purchaser (which Purchased Assets were physically delivered to
Purchaser on the Effective Date), in their "AS IS" and "WHERE
IS" condition, free and clear of all liens and encumbrances,
except for the Permitted Encumbrances.
2.2. Purchaser hereby assumes, and expressly agrees to
pay, perform and discharge, each and all of the liabilities and
obligations shown on Schedule 2.2 hereto, together with the cost
of (and payment obligations with respect to) any and all
inventory, equipment or other assets of whatever nature and kind
delivered to the Consolidated Operations as of and after the
Effective Date, regardless of when ordered, and regardless of
whether ordered by Purchaser or Seller (collectively, the
"Assumed Obligations"). Except for the Assumed Obligations, the
Contracts and Seller's FBO Lease, each of which is expressly
assumed by Purchaser, the parties acknowledge and agree that
Purchaser does not and will not assume any responsibility or
liability whatsoever for any of Seller's other debts,
obligations, or liabilities arising at any time.
2.3. In consideration for Seller's sale, transfer,
conveyance and assignment of the Purchased Assets to Purchaser,
at the Closing, Purchaser shall pay the Purchase Price and
assume the Assumed Obligations. The Purchase Price for the
Purchased Assets shall be (i) Nine Hundred Thousand Dollars
($900,000), plus the invoice cost of all oil inventory and fuel
stored in refueler trucks at Seller's FBO as of the Effective
Date, plus thirty-five percent (35%) of Cash Flow from the
Consolidated Operations for each of February 1996 and March
1996, plus, if the Closing does not occur on or before May 15,
1996, thirty-five percent (35%) of Cash Flow from the
Consolidated Operations for April 1996 (provided, however, that
if Cash Flow from the Consolidated Operations exceeds Seven
Hundred Thousand Dollars ($700,000) for the current fiscal year
of Purchaser, then, Seller shall receive forty percent (40%) of
Cash Flow from the Consolidated Operations for each of February
1996, March 1996, and, if applicable, April 1996, with such
additional amount ("Seller's Additional Share of Cash Flow")
being due and payable by Purchaser to Seller within sixty (60)
calendar days after the last day of Purchaser's current fiscal
year). The Purchase Price shall be paid, as follows:
( a ) Three Hundred Thousand Dollars ($300,000),
plus Seller's portion of Cash Flow from the Consolidated
Operations for February 1996 (but not including Seller's
Additional Share of Cash Flow for such month, if any), plus the
invoice cost of all oil inventory and fuel stored in refueler
trucks at Seller's FBO as of the Effective Date shall be paid in
cash or by wire transfer at or prior to the Closing.
( b ) Six Hundred Thousand Dollars ($600,000),
shall be paid in the form of promissory notes delivered by
Purchaser to Seller at the Closing, as follows:
(i) a promissory note, dated April 1, 1996, made
payable by Purchaser to the order of Seller in the original
principal amount of One Hundred Thousand Dollars ($100,000), in
the form attached hereto as Exhibit A (the "A Note"), which A
Note shall bear interest at the rate of eight percent (8%) per
annum from April 1, 1996 until paid; and
(ii) a promissory note, dated April 1, 1996, made
payable by Purchaser to the order of Seller in the original
principal amount of Five Hundred Thousand Dollars ($500,000.00),
in the form attached hereto as Exhibit B (the "B Note"), which
B Note, shall bear interest at the rate of nine percent (9%) per
annum from April 1, 1996 until paid.
Interest shall accrue on the outstanding principal amount
of the A Note from and after April 1, 1996, and shall be due and
payable monthly in arrears on the first (1st) day of each month,
commencing on the first (1st) day of May, 1996. The entire
outstanding principal amount of the A Note, together with all
accrued but unpaid interest and fees, shall be due and payable
on April 30, 1997, unless previously accelerated. Interest
shall accrue on the outstanding principal amount of the B Note
from and after April 1, 1996, and shall be due and payable
monthly in arrears on the first (1st) day of each month,
commencing on the first (1st) day of May, 1996. The entire
outstanding principal amount of the B Note, together with all
accrued but unpaid interest and fees, shall be due and payable
on March 31, 1999, unless previously accelerated. If, prior to
the payment in full of all principal, interest and fees due
under and account of both the A Note and the B Note
(hereinafter, referred to, collectively, as the "Notes"), (i)
Purchaser sells or otherwise disposes of all or any portion of
the Consolidated Operations, or any of the assets used in
connection therewith, except in accordance with Section 11.2
hereof, or (ii) by reason of newly issued stock, the sale of
issued and outstanding stock, or otherwise, there is a change in
ownership of Purchaser, all amounts due under and on account of
this Agreement and the Notes shall be immediately due and
payable. For the purposes of this Agreement, a "change in
ownership" of Purchaser shall occur if Xxxxxxx ceases to own at
least a majority of the issued and outstanding stock of
Purchaser.
So long as there are any amounts outstanding under the
Notes, Purchaser shall, commencing on May 1, 1996, and on the
first (1st) day of each month thereafter, pay to Seller the
additional amount of One Thousand Two Hundred Fifty Dollars
($1,250) as a fee for consulting services.
( c ) Seller's portion of Cash Flow from the
Consolidated Operations for March, 1996 (but not including
Seller's Additional Share of Cash Flow for each month) shall be
set off against the amount due to Purchaser from Seller for
Defense Fuel Sales not collected by Seller prior to the Closing
Date or paid by Seller to Purchaser at Closing.
( d ) If the Closing occurs after May 15, 1996,
Purchaser shall, on or before May 30, 1996, deliver to Seller an
amount equal to Seller's portion of Cash Flow from the
Consolidated Operations for April 1996.
( e ) Purchaser shall pay Seller's Additional Share of
Cash Flow, if any, in cash or by wire transfer, within sixty
(60) calendar days after the last day of Purchaser's current
calendar year.
2.4. For the purpose of securing Purchaser's
obligations under Section 2.3 hereof (including, without
limitation Purchaser's obligation to pay all amounts due and
owing under the Notes and Purchaser's obligation to pay Seller
Seller's portion of Cash Flow from the Consolidated Operations,
if applicable), and Purchaser's obligations under Section 15
hereof (relating to Purchaser's indemnification of Seller),
Purchaser and Seller shall enter into (i) a security agreement
in the form attached hereto as Exhibit C (the "Purchased Assets
Security Agreement"), pursuant to which Purchaser shall grant
Seller a security interest in the Purchased Assets, and (ii) a
security agreement in the form attached hereto as Exhibit D (the
Consolidated Security Agreement), pursuant to which Purchaser
shall grant Seller a security interest in all of Purchaser's
tangible and intangible personal property, including, without
limitation, furniture, fixtures, equipment, inventory, work in
process and accounts receivable. In accordance with the
Consolidated Security Agreement, the security interest granted
thereunder shall be effective on the first to occur (i) the date
on which a Senior Lender has provided financing to Purchaser as
contemplated herein, (ii) the date on which Gulf Coast Bank has
consented to Sellers second priority security interest in all
of Purchasers tangible and intangible personal property, or
(iii) the one hundred twentieth (120th) day after the Closing
Date. In accordance with the Consolidated Security Agreement,
Sellers security interest shall be subordinate in priority only
to the interest of the Senior Lender, securing an amount not to
exceed One Million Five Hundred Thousand Dollars ($1,500,000)
(the "Senior Debt"), or (ii) if no Senior Lender is in place,
Gulf Coast Bank. At such time as a Senior Lender is in place
and Seller has a second priority security interest in all of
Purchasers tangible and intangible personal property, Seller
shall release its lien under the Purchased Assets Security
Agreement. At such time as it becomes apparent that a Senior
Lender will not provide financing to Purchaser as contemplated
herein, but in all cases before one hundred twenty (120) days
after the Closing Date, Purchaser will use its best efforts to
obtain the consent of Gulf Coast Bank to Purchaser's granting
Seller a security interest in all of Purchaser's tangible and
intangible personal property as contemplated by this Section
2.4, to the effect that, should Gulf Coast Bank not be replaced
by a Senior Lender, Seller shall have a security interest in all
of Purchaser's tangible and intangible personal property, which
security interest shall be subordinate in priority only to the
interest of Gulf Coast Bank (but only to those certain assets to
which Gulf Coast Bank's security interest shall have attached
prior to the Effective Date). Under no circumstances shall Gulf
Coast Bank be granted, and under no circumstances shall there be
deemed to exist in favor of Gulf Coast Bank, a security interest
in the Purchased Assets senior in priority to Seller's security
interest in the Purchased Assets. Purchaser further
acknowledges and agrees that if Gulf Coast Bank is not replaced
by a Senior Lender within ninety (90) days after the Closing
Date, Purchaser will use its best efforts to obtain alternate
financing sufficient to satisfy and retire Purchaser's
indebtedness to Gulf Coast Bank, the effect of which shall be
that Seller's security interest in all of Purchaser's tangible
and intangible personal property shall be first in priority to
all other parties (including, without limitation, the party
providing such alternate financing). For the purpose of this
Section 2.4, "alternate financing" means financing provided by
a party other than the Senior Lender for the purpose of
satisfying and retiring the Gulf Coast Bank. Alternate
financing shall not exceed the amount required to satisfy and
retire Purchaser's indebtedness to Gulf Coast, and the party
providing alternate financing shall not be entitled to the
priorities afforded to the Senior Lender under this Agreement.
In accordance with this Section 2.4, Purchaser shall execute and
deliver financing statements on form UCC-1 (together with
appropriate filing fees), and such other documents or
instruments reasonably requested by Seller to evidence or
effectuate the security interest herein above described. In
order to effectuate the provisions of this Section 2.4,
Purchaser shall request the Senior Lender or Gulf Coast Bank, as
the case may be, to enter into an intercreditor agreement with
Seller, addressing, among other things, their respective
priorities with respect to the collateral described herein.
2.5. Xxxxxxx shall personally guarantee and become
surety for the full and prompt payment of the Notes and the full
and prompt payment and performance of all of Purchaser's other
obligations under the Notes and the indemnification provisions
set forth in Section 14.2 of this Agreement, which guaranty and
suretyship shall be evidenced by a guaranty and suretyship
agreement in the form attached hereto as Exhibit E (the "Xxxxxxx
Guaranty"). Until such time as Aero has (i) a first priority
security interest in the Pledged Shares (as hereinafter
defined), or (ii) a perfected security interest in the Pledged
Shares subordinate only to the interest of either the Senior
Lender or Gulf Coast Bank, the Xxxxxxx Guaranty shall be
unlimited. As security for Xxxxxxx'x full and prompt
performance under the Xxxxxxx Guaranty, Xxxxxxx shall execute
and deliver a stock pledge agreement in the form attached hereto
as Exhibit F (the "Xxxxxxx Pledge Agreement"), together with a
stock power (separate from the certificate(s)) executed in
blank, pursuant to which Xxxxxxx shall pledge to Seller all of
the issued and outstanding shares of Purchaser's capital stock
standing in Xxxxxxx'x name (the "Pledged Shares"), which shall
constitute all of the issued and outstanding shares of
Purchaser's capital stock. In accordance with its terms, the
Xxxxxxx Pledge Agreement shall be effective on the first to
occur of (i) the date on which a Senior Lender has provided
financing to Purchaser, as contemplated herein, (ii) the date on
which Gulf Coast Bank has consented to Sellers second priority
security interest in the pledged shares as contemplated herein,
or (iii) the one hundred twentieth (120th) day after the Closing
Date. In accordance with the Xxxxxxx Pledge Agreement, Seller
shall have a security interest in the Pledged Shares, which
security interest shall be subordinate in priority only to the
interest of (i) the Senior Lender, and only if and to the extent
that the Senior Lender requires a security interest in the
Pledged Shares, or (ii) if no Senior Lender is in place, Gulf
Coast Bank. If a Senior Lender requiring a pledge of the
Pledged Shares is in place and Purchaser's indebtedness to Gulf
Coast Bank is satisfied and retired within one hundred twentieth
(120) days after the Closing Date, then the Xxxxxxx Pledge
Agreement shall be effective to grant Seller a security interest
in the Pledged Shares subordinate only to the interest of the
Senior Lender. If the Senior Lender does not require a pledge
of the Pledged Shares, then Seller's security interest in the
Pledged Shares shall be first in priority to all other parties,
and the stock certificate(s) evidencing the Pledged Shares,
together with the stock powers shall be delivered to the Seller.
If a Senior Lender is not in place and Purchaser's indebtedness
to Gulf Coast Bank is not satisfied and retired within one
hundred twenty (120) days after the Closing Date, Seller shall
have a security interest in the Pledged Shares which security
interest shall be subordinate in priority only to the interest
of Gulf Coast Bank. At such time as it becomes apparent that a
Senior Lender will not provide financing to Purchaser as
contemplated herein, but in all cases before one hundred twenty
(120) days after the Closing Date, Purchaser and Xxxxxxx will
use their best efforts to obtain the consent of Gulf Coast Bank
to Xxxxxxx'x pledge of the Pledged Shares to Seller as
contemplated by this Section 2.5. At such time as Seller shall
have (i) a perfected first priority security interest in the
Pledged Shares, or (ii) a perfected security interest in the
Pledged Shares subordinate only to the interest of either the
Senior Lender or Gulf Coast Bank, Seller's recourse under the
Xxxxxxx Guaranty shall be limited to Seller's remedies under the
Xxxxxxx Pledge Agreement. Xxxxxxx hereby represents and
warrants to Seller that he is the sole stockholder of Purchaser
and that no other person or entity has any options, warrants or
other rights to acquire Purchaser's stock. Xxxxxxx further
represents and warrants to Seller that, except as expressly
provided herein, there are no liens, pledges or other
encumbrances of, against, or with respect to the Pledged Shares,
and Xxxxxxx covenants and agrees that, except for the Senior
Lender, Xxxxxxx shall not grant or permit any liens, pledges or
other encumbrances of, against, or with respect to the Pledged
Shares. In order to effectuate the provisions of this Section
2.5, Purchaser shall request the Senior Lender or Gulf Coast
Bank, as the case may be, to enter into an intercreditor
agreement with Seller, addressing, among other things, their
respective priorities with respect to the Pledged Shares and the
obligation of the Senior Lender or Gulf Coast Bank, as the case
may be, to hold the certificate(s) evidencing the Pledged Shares
and to release such certificate(s) only to Seller if any amounts
remain outstanding on the Notes or under this Agreement at such
time as the Senior Lender or Gulf Coast Bank, as the case may
be, release such certificate(s).
In addition to the foregoing, until the Notes have been
paid in full Xxxxxxx hereby grants to Aero the first right and
option to purchase all or any portion of the Pledged Shares on
Xxxxxxx'x receipt of a bona fide offer from an independent third
party to purchase all or any portion of the Pledged Shares, and
Purchaser shall decide to sell same for such amount, the terms
of which right of first refusal is set forth with more
particularity in Section 17.1 hereof.
2.6. At the Closing, on receipt of the consideration
described in Section 2.3 hereof, Seller shall, as may be
appropriate, deliver to Purchaser:
(a) a general xxxx of sale conveying or assigning the F F
& E and the Inventory to Purchaser;
(b) an assignment and assumption of Seller's right and
obligations under and otherwise with respect to Seller's FBO
Lease, if necessary;
(c) an assignment and assumption of the Contracts, if
necessary;
(d) the certificate described in Section 8.3 below;
(e) a copy of resolutions adopted by the board of
directors of Seller, certified by Seller's Secretary,
authorizing the sale of the Purchased Assets and the other
transactions contemplated by this Agreement;
(f) any other documents, instruments, or agreements
reasonably necessary to effectively transfer ownership of the
Purchased Assets from Seller to Purchaser or to accomplish the
objectives of this Agreement;
(g) a covenant not to compete by Seller as provided in
Section 13 hereafter; and
(h) a check in the amount of Forty-Seven Thousand Forty
Dollars ($47,040) which amount, the parties agree, is equal to
all payments collected by Seller, since the Effective Date, on
account of defense fuel sales at the Consolidated Operations
from and after the Effective Date.
2.7. The Closing will take place at the offices of
Xxxxx III Aviation, Inc. in Cincinnati, Ohio, at 12:00 p.m.
local time on the Closing Date.
3. Seller's Representations and Warranties. Seller
warrants and represents to Purchaser, that, as of the Effective
Date:
3.1. Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Louisiana.
3.2. The execution, delivery, and performance by
Seller of this Agreement has been duly authorized by all
necessary corporate action on the part of Seller; this Agreement
is a valid and binding obligation of Seller; Seller has all
necessary corporate power, capacity, and authority to own the
Purchased Asset
s, to enter into and perform this Agreement, and
to convey the Purchased Assets to Purchaser.
3.3. All persons who execute and deliver this
Agreement, and any other agreement, document, or instrument
required by or ancillary to this Agreement, in the name and on
behalf of Seller shall be duly authorized by all necessary
corporate authority and fully competent to so execute and
deliver this Agreement and those documents, and their actions
shall bind Seller to the performance of its obligations
specified herein and therein.
3.4. The execution of this Agreement and the
fulfillment of all its terms and conditions by Seller will not,
to the best of Seller's knowledge, materially violate, result in
a material breach of, or constitute a material default under any
agreement, instrument, statute, regulation, rule, judgment,
order or decree to which Seller is a party or by which Seller is
bound, or to which Seller may be subject.
3.5. Seller has good and marketable title to the
Purchased Assets, free and clear of all liens and encumbrances,
other than the Permitted Encumbrances.
3.6. To the best of Seller's knowledge: the Contracts,
if any, are in full force and effect and are valid, binding, and
enforceable in accordance with their terms; there are no
material defaults thereunder; and no event exists that with or
without notice or lapse of time would constitute a material
default thereunder. To the best of Seller's knowledge, the
assignment of the Contracts will not create a material default
under any agreement between Seller and any third party. As of
the Effective Date, there was, to Seller's knowledge, no
material default by Seller or any notice of termination given by
Seller existing with respect to any of the Contracts. The
Contracts constitute all of the material written agreements that
Seller has with suppliers or customers covering purchases or
sales of goods or services at Seller's FBO. On the Closing
Date, there will be no contracts to which Seller is a party and
which may be binding upon Purchaser or the Purchased Assets
other than the Contracts or contracts terminable at will by
Purchaser on the Closing Date without payment of any premium or
penalty.
3.7. To the best of Seller's knowledge, there are no
actions, suits, proceedings, or investigations in connection
with, or otherwise affecting, the Purchased Assets (whether or
not purportedly on behalf of or against Seller) pending or
threatened against or affecting Seller at law or equity or
bankruptcy, or before or by any federal, state, municipal or
other governmental department, commission, board, bureau,
agency, or instrumentality, domestic or foreign, that may result
in any adverse change in or charge against the Purchased Assets
or that would in any way interfere with the ability of Seller to
perform this Agreement. Seller has not received any notice of
violation of any laws, regulations, ordinances, or orders
applicable to the ownership or operation of the Purchased
Assets, or any applicable zoning ordinance, regulation, or other
law, order, or requirement relating to the operation or use of
the Purchased Assets by Seller, and to the knowledge of Seller
there are no such violations.
3.8. Seller has not had any material, oral or written
understanding with any third persons that would affect the
Purchased Assets or the transfer of the Purchased Assets to
Purchaser, in a manner adverse to the interests of Purchaser.
3.9. Except as set forth on Schedule 3.10 hereto,
there are no licenses, permits, or other regulatory approvals
from local, state, or federal officials that are necessary for
the operation of Seller's FBO.
3.10. All returns and reports concerning franchise
taxes, unemployment insurance, withholding and payroll taxes,
personal property taxes, Social Security, and other reports
required to have been filed by the Seller relating to the
Purchased Assets pursuant to any law or regulation have been
duly filed; and all taxes, interest and penalties relating to
the Purchased Assets that are due to any taxing authority,
federal, state, or local, with respect to any tax period
previously ended have been duly paid or arrangements have been
made to pay the same when due subsequent to the Closing Date.
There are no tax liens in favor of any governmental entity
affecting the Purchased Assets.
3.11. No representation or warranty by Seller in
this Agreement, no certification furnished to Purchaser by
Seller under this Agreement, and no Exhibit or other instrument
previously furnished or to be furnished to Purchaser by Seller
pursuant to this Agreement or in connection with the
transactions contemplated hereunder contains or will contain any
untrue statement of material fact, or omits or will omit to
state a material fact necessary to make the statements contained
herein not misleading.
4. Purchaser's Representations and Warranties. Purchaser
warrants and represents to Seller, as an inducement to Seller to
enter into and perform this Agreement, that:
4.1. Purchaser is a corporation duly organized,
validly existing, and in good standing under the laws of the
State or Louisiana.
4.2. The execution, delivery and performance by
Purchaser of this Agreement, the Notes and the Security
Agreement has been duly authorized by all necessary corporate
action on the part of Purchaser; this Agreement, the Notes and
the Security Agreement constitute the valid binding obligations
of Purchaser; Purchaser has all necessary corporate power,
capacity, and authority to own its properties, to enter into and
perform this Agreement, the Notes and the Security Agreement and
to purchase the Purchased Assets from Seller.
4.3. All persons who execute and deliver this
Agreement, and any other agreement, document or instrument
required by or ancillary to this Agreement (including, without
limitation, the Notes), in the name and on behalf of Purchaser
shall be duly authorized by all necessary corporate authority
and fully competent to so execute and deliver this Agreement and
those documents, and their action shall bind Seller to the
performance of its obligations specified herein and therein.
4.4. With the exception of Gulf Coast Bank, the
consent of which Purchaser shall use its best efforts to obtain
the execution of this Agreement, the Notes, the Security
Agreement and any other document or instrument in connection
herewith or related hereto, and the fulfillment of all of the
terms and conditions hereunder or thereunder by Purchaser will
not violate, result in a breach of, or constitute a default
under any agreement, instrument, regulation, rule, judgment,
order, or decree to which Purchaser is a party or by which
Purchaser or its properties are bound, or to which Purchaser or
its properties may be subject.
4.5. Except as set forth on Schedule 4.5 hereto
("Purchaser's Current Indebtedness"), other than trade payables
in the ordinary course of business (which, in the aggregate, do
not exceed Five Hundred Thousand Dollars ($500,000)), the Senior
Debt, and Purchaser indebtedness and obligations to Seller under
this Agreement, there exists no other indebtedness or
obligations of Purchaser.
4.6. There are no actions, suits, proceedings, or
investigations (whether or not purportedly on behalf of or
against Purchaser) pending or threatened against or affecting
Purchaser at law or equity or bankruptcy, or before any federal,
state, municipal or other governmental department, commission,
board, bureau, agency, or instrumentality, domestic or foreign,
that may result in any adversely affect Purchaser's ability to
perform hereunder or under the Notes.
4.7 The security interests in favor of Gulf Coast
Bank are as represented in Section 2.4 and Section 2.5 hereof.
4.8. Between the Effective Date and the Closing,
Purchaser has not:
(a) Entered into any contract, agreement, or
understanding affecting the Consolidated Operations, or any
portion thereof, except in the normal course of business.
(b) Except as existing prior to the Effective
Date and disclosed to Seller, created, assumed or permitted to
exist any mortgage, pledge, lien, or encumbrance affecting the
Consolidated Operations, or any portion thereof.
(c) Sold, assigned, leased, transferred, or
otherwise disposed the Consolidated Operations, or any portion
thereof.
(d) Except for trade payables in the normal
course of business, incurred any indebtedness to any third
party.
4.9. No representation or warranty by Purchaser in
this Agreement, no certification furnished to Seller by
Purchaser under this Agreement, and no Exhibit or other
instrument previously furnished or to be furnished to Seller by
Purchaser pursuant to this Agreement or in connection with the
transactions contemplated hereunder contains or will contain any
untrue statement of material fact, or omits or will omit to
state a material fact necessary to make the statements contained
herein not misleading.
5. Statement with Respect to Brokers. Each of the
parties hereto represents and warrants to the other that neither
such party nor any director, officer or agent of such party, as
the case may be, has entered into any agreement for the payment
of any brokerage or finder's fees to any person, firm or
corporation in connection with the transactions contemplated by
this Agreement, and each agrees to indemnify and hold and save
the other harmless from any such fees (including reasonable
attorneys' fees and other expenses incurred in connection with
any such claim) which may be due or asserted by reason of any
such agreement or purported agreement by the indemnifying party.
6. Pre-Closing Covenants of Seller.
6.1. Between the Effective Date and the Closing Date,
unless otherwise provided in this Agreement, Seller will not,
without the written consent of Purchaser:
(a) Enter into any contract, agreement, or
understanding affecting Seller's FBO except in the normal and
usual course of business.
(b) Create, assume, or permit to exist any
mortgage, pledge, lien, or encumbrance affecting the Purchased
Assets that did not exist on the Effective Date hereof.
(c) Sell, assign, lease, transfer, or otherwise
dispose of any of the Purchased Assets, except in the normal and
usual course of business.
6.2. Between the date of this Agreement and the
Closing Date, Seller will:
(a) Provide Purchaser and Purchaser's
representatives with such information and records relating to,
or concerning, the Purchased Assets and the operation of,
Seller's FBO as Purchaser may reasonably request.
(b) Deliver to Purchaser true, accurate, and
complete copies of all documents, instruments, contracts, and
agreements listed on the Exhibits attached hereto that are the
responsibility of Seller.
(c) Prepare or cooperate with Purchaser in the
preparation of all documents reasonably necessary to adequately
transfer the Purchased Assets from Seller to Purchaser.
(d) Cooperate with and assist Purchaser, at
Purchaser's sole cost and expense, in any dealing Purchaser may
have with local, state, or federal officials relating to the
transfer to Purchaser from Seller, or the obtaining by
Purchaser, of any licenses, permits, or other regulatory
approvals that are necessary or desirable for the operation of
Seller's FBO.
7. Pre-Closing Covenants of Purchaser. Between the
Effective Date and the Closing Date, and after the Closing Date
with respect to the period between the Effective Date and the
Closing Date, Purchaser shall:
(a) Provide Seller and Seller's representatives
with full access during normal business hours to the all
financial books and records relating to, or concerning, the
Consolidated Operations (including, without limitation,
financial statements, income statements, statements of profit
and loss, balance sheets, and documents related to Seller's
security interests hereunder), as Seller may reasonably request;
(b) Deliver, or cause to be delivered, to Seller
true, accurate and complete copies of all documents,
instruments, contracts, and agreements listed on the Exhibits
hereto, that are the responsibility of Purchaser and/or Xxxxxxx.
(c) Prepare or cooperate with Seller in the
preparation of all documents reasonably necessary to adequately
transfer the Purchased Assets from Seller to Purchaser, secure
the performance by Purchaser of its obligations under the Notes,
and effectuate the assumption by Purchaser of the Assumed
Liabilities.
(d) Use its best efforts to preserve favorable
relationships with customers, contractors and employees and
other persons having business relationships with Purchaser
and/or Seller at the Consolidated Operations.
(e) Maintain in full force and effect insurance
policies and contracts (including, without limitation, general
liability, fire and hazard) covering the assets and operation of
the Consolidated Operations (including, without limitation, the
Purchased Assets), in such amounts and for such coverage as
shall be necessary to fully insure such assets for their full
replacement value and as is otherwise reasonable and customary
in the industry in which the Consolidated Operations are
conducted. All such insurance policies shall name Seller as an
additional insured, as its interests appear.
(f) Provide Seller with true and complete copies
of all reports of any and all judgement, docket and lien
searches conducted by or on behalf of Purchaser, whether
conducted at the request of the Senior Lender, Gulf Coast Bank,
or otherwise.
(g) Provide Seller with true and complete copies
of documents, instruments and certificates evidencing, or
otherwise related to, Purchaser's indebtedness to Gulf Coast
Bank.
(h) Provide Seller with true and complete copies
of documents, instruments and certificates evidencing, or
otherwise related to, the Senior Debt.
(i) Provide Seller with true and complete copies
of documents, instruments and certificates evidencing, or
otherwise related to, that certain Three Hundred Thousand Dollar
($300,000) personal loan made to Xxxxxxx by the Huntington
National Bank as of the Closing Date.
8. Conditions Precedent to the Obligation of Purchaser to
Close. The obligation of Purchaser to purchase the Purchased
Assets or to otherwise effect the transactions contemplated by
this Agreement on the Closing Date is subject, at the option of
Purchaser, to the satisfaction or fulfillment, on or prior to
the Closing Date, of all of the following conditions precedent
to the Closing:
8.1. The representations and warranties of Seller set
forth in this Agreement shall be true and correct in all
material respects on and as of the Effective Date.
8.2. All the terms, conditions, and covenants to be
complied with and performed by Seller on or prior to the Closing
Date shall have been complied with or performed in all material
respects.
8.3. Purchaser shall have received on the Closing Date
a certificate dated the Closing Date signed on behalf of Seller
by its Chief Executive Officer, President, or a Vice President
stating that (a) the representations and warranties of Seller
set forth in Sections 3.1, 3.2, 3.3, 3.4 and 3.5 hereof are in
all material respects true, correct, and accurate as of the
Closing Date, and (b) all of the covenants set forth in this
Agreement to be performed by Seller on or prior to the Closing
Date have been performed in all material respects.
9. Conditions Precedent to the Obligations of Seller to
Close. The obligation of Seller to sell the Purchased Assets or
to otherwise effect the transactions contemplated by this
Agreement on the Closing Date is subject, at the option of
Seller, to the satisfaction or fulfillment, on or prior to the
Closing Date, of all the following conditions precedent to the
Closing:
9.1. The representations and warranties of Purchaser
set forth in this Agreement shall be true and correct in all
material respects on and as of the Closing Date.
9.2. All of the terms, conditions, and covenants to be
complied with and performed by the Purchaser on or prior to the
Closing Date shall have been complied with and performed in all
material respects.
9.3. Seller shall have received on the Closing Date a
certificate dated the Closing Date, executed by Purchaser's
Secretary, certifying as to: (a) Purchaser's Articles of
Incorporation; (b) Purchaser's Bylaws, (c) the resolutions of
Purchaser's Board of Directors authorizing the execution and
delivery of this Agreement, the performance hereunder, and the
transactions contemplated herein (including, without limitation
the execution and delivery of the Notes and the Security
Agreement); and (d) the incumbency of officers authorized to
execute and deliver this Agreement and the other documents and
instruments executed and delivered pursuant hereto, in
connection herewith, or contemplated hereby.
9.4. Seller shall have received on the Closing Date a
certificate dated the Closing Date signed on behalf of Purchaser
by its Chief Executive Officer, President, or a Vice President
stating that all the representations and warranties of Purchaser
set forth in this Agreement are in all material respects true,
correct, and accurate as of the Closing Date, and (b) all of the
covenants set forth in this Agreement to be performed by
Purchaser on or prior to the Closing Date have been performed in
all material respects.
9.5. All consents and approvals necessary for
transfer, sale and assignment of the Purchased Assets hereunder
and for the assumption by Purchaser of the Assumed Obligations,
the Contracts and the FBO Lease, shall have been obtained.
10. Post-Closing Covenants of Seller. Seller hereby
covenants and agrees that on and after the Closing Date:
10.1. Seller will, at the request of Purchaser,
from time to time, one or more times, at Purchaser's sole cost
and expense, furnish to Purchaser all such documents,
instruments, consents, conveyances, assignments, and other
writings as shall be reasonably necessary to vest, or to
effectively confirm the vesting of, good and marketable title to
the Purchased Assets in the Purchaser, or to effectuate the
purposes of this Agreement.
10.2. Any amounts received by Seller on account of
Defense Fuel Sales at the Consolidated Operations, which amounts
have not been (i) collected by Seller prior to the Closing Date,
and paid to Purchaser at Closing, or (ii) set off against
Sellers portion of Cash Flow from the Consolidated Operations
for March 1996 in accordance with Section 2.3 (c) hereof
(Subsequent Defense Fuels Collections), shall be allocated
between Seller and Purchaser on a pro rata basis in accordance
with the following:
Purchaser's Share of Subsequent Defense
Defense Fuel Sales not remitted at closing less March, 1996 Cash Flow
Fund Collections = Defense Fuel Sales not remitted at closing
The Purchaser's Share of Subsequent Defense Fund Collections
shall be paid to Purchaser by Seller within five (5) business
days of the Sellers receipt of such amounts with the remaining
portion of such amounts to be retained by Seller. This practice
will continue until an amount equal to all amounts collected by
Seller on accounts of Defense Fuel Sales but not paid to
Purchaser at Closing, or set off against Sellers portion of
Cash Flow from the Consolidated Operations for March 1996, shall
have been forwarded to Purchaser.
11. Post-Closing Covenants of Purchaser. Purchaser and
Xxxxxxx hereby covenant and agree that on and after the Closing
Date:
11.1. Purchaser and Xxxxxxx, as the case may be,
will, at the request of Seller, from time to time, one or more
times, at Seller's sole cost and expense (except for filing fees
for (i) the renewal of UCC financing statements or (ii) the
filing or recording of other security instruments which fees
shall be borne by Purchaser), furnish to Seller all such
documents, instruments, consents, conveyances, assignments, and
other writings as shall be reasonably necessary to evidence or
effectuate the transactions contemplated herein, including,
without limitation the obligations of Purchaser and Xxxxxxx, as
the case may be, under and with respect to the Notes, the
Security Agreement, the Xxxxxxx Guaranty, the Xxxxxxx Pledge
Agreement and the Assumed Obligations.
11.2. Until the Notes have been paid in full,
Purchaser shall not, without Seller's prior written consent:
(a) Take or enter into any of the following
actions if the expenditure, commitment or obligation with
respect thereto shall exceed Fifty Thousand Dollars ($50,000)
per year, for any single item or for all items listed in this
Section 11.2(a) in the aggregate (excluding amounts owing to
Seller under the Notes): (i) any capital expenditure, lease,
lease-purchase or other contractual obligation, the termination
of any existing or undertaking of any new or expanded business
or project, or source of revenue, or other business activity,
involving the expenditure or commitment to expend by Purchaser,
(ii) any increase in the Senior Debt or modification of the
Senior Loan Documents, and, with the exclusion of the Notes and
the other obligations expressly contemplated herein, the
incurring or securing of any indebtedness (hereby defined to
include all obligations, contingent or otherwise, which in
accordance with generally accepted accounting principles should
be classified on Purchaser's balance sheet as liabilities,
including but not limited to indebtedness for monies due, debts
incurred, monies borrowed, guarantees, endorsements and other
contingent obligations), and (iii) any bonuses to Purchaser's
officers, directors or employees;
(b) With the exclusion of security interests
granted to Seller and the existing security interest of the
Senior Lender under the Senior Loan Documents, grant or permit
any mortgage, pledge or encumbrance of a material part of the
assets or accounts receivable of the Purchaser (including,
without limitation, the Purchased Assets);
(c) Sell, transfer, convey, assign or otherwise
dispose of any assets of Purchaser (including, without
limitation, the Purchased Assets) having a fair market value of
more than Ten Thousand Dollars ($10,000) per year, other than
sales in the ordinary course of business;
(d) Sell, transfer, convey, encumber, retire,
purchase or repurchase, issue, or authorize the issuance of
capital stock of the Purchaser, or declare or pay of any
dividend or distribution thereon or by reason thereof, or effect
any change in the rights of the authorized and/or issued capital
stock (including treasury shares) of Purchaser;
(e) Merge or consolidate with any other entity;
(f) On the occurrence and during the continuance
of a default hereunder or under the Notes, enter into of any
employment contracts with Purchaser's officers or other
employees (other than oral contracts terminable at will or on
notice not exceeding ninety (90) days), or enter into any agency
or commission contracts with Purchaser's independent contractors
or consultants;
(g) On the occurrence and during the continuance
of a default hereunder or under the Notes, establish or increase
the benefits of any deferred compensation, profit sharing,
health care (including mental health or physical illness), stock
option, pension or retirement arrangement or plan;
(h) Establish, dissolve or liquidate any
subsidiary, or transfer to any affiliate or subsidiary any
assets of Purchaser having a value in excess of Fifty Thousand
Dollars ($50,000) for any single item, or in the aggregate;
(i) Settle of any litigation in which Purchaser
is a party if the amount in dispute in such litigation is Fifty
Thousand Dollars ($50,000) or more; and
(j) Until such time as Purchaser obtains
financing from a Senior Lender, the aggregate indebtedness of
Purchaser, except for trade payables in the ordinary courses of
business, shall not exceed Seven Hundred Fifty Thousand Dollars
($750,000).
11.3. Until the Notes have been paid in full,
Purchaser shall:
(a) Provide Seller and Seller's representatives
with full access, at Seller's expense, during normal business
hours to all financial books and records relating to, or
concerning, the Consolidated Operations (including, without
limitation, financial statements, income statements, statements
of profit and loss, balance sheets, and documents related to
Seller's security interests hereunder), as Seller may reasonably
request, but not more than quarterly, except during such periods
as Seller shall be entitled (or, in accordance with this
Agreement, may elect) to receive Sellers portion of Cash Flow
from the Consolidated Operations during which xxxx Xxxxxx shall
be entitled to such information on a monthly basis;
(b) Use its best efforts to preserve favorable
relationships with customers, contractors and employees and
other persons having business relationships with Purchaser
and/or Seller at the Consolidated Operations;
(c) Maintain in full force and effect insurance
policies and contracts (including, without limitation, general
liability, fire and hazard) covering the assets and operation of
the Consolidated Operations, in such amounts and for such
coverage as shall be necessary to fully insure such assets for
their full replacement value and as is otherwise reasonable and
customary in the industry in which the Consolidated Operations
are conducted. All such insurance policies shall name Seller as
an additional insured, as its interests appear;
(d) Pay and perform, when due, all obligations
to Senior Lender under, or otherwise with respect to, the Senior
Debt;
(e) Pay and perform, when due, all obligations
to Gulf Coast Bank;
(f) Pay and perform, when due, any and all
obligations for money owed; and
(g) Perform all obligations (including, without
limitation, all payment obligations), and keep all covenants
under and otherwise with respect to the then current lease with
the Levee Board for the Consolidated Operations or any other
operations or leasehold interest of Purchaser at the Airport.
11.4. Within ten (10) days after the Closing Date,
Purchaser and Xxxxxxx shall demonstrate to Sellers reasonable
satisfaction that the security interests in favor of Gulf Coast
Bank described in Section 2.4 and Section 2.5 hereof are as
represented therein.
11.5. As soon as the same are available, Purchaser
shall provide Seller with true and correct copies of all
documents and instruments evidencing, or otherwise related to,
the Senior Debt (the "Senior Loan Documents").
12. Survival of Warranties, Representations and Covenants.
Each of the representations, warranties, and covenants made by
Seller and Purchaser contained in this Agreement shall survive
the Closing.
13. Noncompetition Agreement. In addition to and
contingent upon the sale of the Purchased Assets by Seller to
Purchaser on the Closing Date as provided in this Agreement, and
in consideration of the mutual benefits accruing hereunder and
contingent on Purchaser making all payments required at Closing
and under the Notes on a timely basis, and complying in all
material respects with its other obligations under this
Agreement, Seller agrees that, for a period of two (2) years
after the Closing Date, neither Seller, nor any subsidiary of
Seller, shall participate, directly or indirectly, as an owner,
principal, shareholder, partner, trustee, fiduciary, or in any
such similar capacity in any activity directly competitive with
Purchaser's conduct of the Consolidated Operations at the
Airport using the Purchased Assets, within a twenty-five (25)
mile radius of the Airport (the "Restricted Territory"). This
agreement not to compete shall include the agreement of Seller
not to (A) request any customers of Purchaser to curtail or
cancel their business with Purchaser at the Consolidated
Operations at the Airport, (B) induce, or attempt to influence,
any employee of Purchaser to terminate employment with Purchaser
or to enter into any employment or business relationship with
any other person or entity (including Seller), or (C) to
interfere with or disrupt any of Purchaser's relationships with
suppliers.
14. Indemnification.
14.1. Seller covenants and agrees to indemnify and
save and hold Purchaser harmless at all times after the Closing
in respect of any and all claims, liabilities, loss, cost,
damage and expense, including reasonable attorneys' fees and
expenses (collectively, "Damages") arising from, by reason of or
in connection with (i) any untruth, breach or inaccuracy in any
material respect of any representation or warranty of Seller set
forth in this Agreement or in any certificate or other
instrument provided by Seller pursuant to this Agreement and
(ii) any breach or failure to perform with respect to any
covenant of Seller under this Agreement. No claim will be made
or recovery had for any matter of which Purchaser had actual or
constructive knowledge on the Closing Date.
14.2. Purchaser covenants and agrees to indemnify
and save and hold Seller harmless at all times after the Closing
in respect of any and all claims, liabilities, loss, cost,
damage and expense, including reasonable attorneys' fees and
expenses (collectively, "Damages") arising from, by reason of or
in connection with (i) any untruth, breach or inaccuracy in any
material respect of any representation or warranty of Purchaser
set forth in this Agreement or in any certificate or other
instrument provided by Seller pursuant to this Agreement and
(ii) any breach or failure to perform with respect to any
obligation or covenant Purchaser under this Agreement. No claim
will be made or recovery had for any matter of which Seller had
actual or constructive knowledge on the Closing Date.
14.3. Promptly after receipt by an indemnified
party under Section 14.1 or 14.2 of notice of the commencement
of any action in or before any court or administrative agency (a
"Proceeding") against it, such indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying
party under such Section, give notice to the indemnifying party
of the commencement thereof, but the failure so to notify the
indemnifying party shall not relieve the indemnifying party of
any liability that it may have to any indemnified party except
to the extent the indemnifying party demonstrates that the
defense of such action is prejudiced thereby. In case any such
Proceeding shall be brought against an indemnified party and it
shall give notice to the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish (unless the
indemnifying party is also a party to such Proceeding and the
indemnified party determines in good faith that joint
representation would be inappropriate), to assume the defense
thereof with counsel satisfactory to such indemnified party 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
under such Section 14.1 or 14.2, as the case may be, for any
fees of other counsel or any other expenses with respect to the
defense of such Proceeding, in each case subsequently incurred
by such indemnified party in connection with the defense
thereof, other that reasonable costs of investigation. If an
indemnifying party assumes the defense of such a Proceeding, (a)
no compromise or settlement thereof may be effected by the
indemnifying party without the indemnified party's consent
unless (i) there is no finding or admission of any violation of
legal requirements applicable to the indemnified party or the
Consolidated Operations under federal, state or local laws
and/or regulations or any violation of the rights of any person,
and no effect on any other claims that may be made against the
indemnified party and (ii) the sole relief provided is monetary
damages that are paid in full by the indemnifying party and (b)
the indemnifying party shall have no liability with respect to
any compromise or settlement thereof effected without its prior
written consent, which consent shall not be unreasonably
withheld. If notice is given to an indemnifying party or the
commencement of any Proceeding and it does not, within ten (10)
days after the indemnified party's notice is given, give notice
to the indemnified party of its election to assume the defense
thereof, the indemnifying party shall be bound by any
determination made in such Proceeding or any compromise or
settlement thereof effected by the indemnified party.
Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability
that a Proceeding may adversely affect it or its affiliates
other than as a result of monetary damages, such indemnified
party may, by notice to the indemnifying party, assume the
exclusive right to defend, compromise or settle such Proceeding,
but the indemnifying party shall not be bound by any
determination of a Proceeding so defended or any compromise or
settlement thereof effected without its prior written consent,
which consent shall not be unreasonably withheld.
15. Condition of the Seller's FBO and Purchased Assets;
Independent Investigation. Prior to the date of this Agreement,
Purchaser has had complete freedom of access to Seller's FBO and
all of Seller's books, records, contracts, agreements related to
the ownership, operation and maintenance of the Seller's FBO, as
well as to Seller's personnel involved with the ownership,
operation and maintenance of the Seller's FBO. During the
period from the Effective Date of this Agreement to the Closing
Date or termination of this Agreement, Purchaser shall be given
continued access to Seller's FBO, the Purchased Assets, the
Contracts, and all books and records relating thereto, all as
part of the Consolidated Operations maintained and operated by
Purchaser. In making the decision to enter into this Agreement
and to consummate the transactions contemplated hereby,
Purchaser has relied, and may rely, only on Seller's express
representations and warranties set forth in this Agreement, and
Purchaser has not relied, and may not rely, on any other
representations, warranties, or statements by Seller, its
offices, directors or employees or on the representations,
warranties or statements of any other person or entity. As to
all other matters not described herein, Purchaser has relied and
will rely solely on the basis of its own independent
investigation of Seller's FBO and the Purchased Assets,
including, without limitation, the condition of the Purchased
Assets and the physical and environmental condition of Seller's
FBO. PURCHASER ACKNOWLEDGES THAT SELLER HAS NOT MADE, AND
SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES ANY OTHER
REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, RELATING TO THE PHYSICAL CONDITION OF THE PURCHASED
ASSETS AND THE OTHER REAL AND PERSONAL PROPERTY CONSTITUTING
SELLER'S FBO (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED OR
EXPRESS WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE) AND FURTHER, PURCHASER ACCEPTS ALL OF THE PURCHASED
ASSETS IN THEIR "AS IS" AND "WHERE IS" CONDITION.
16. Seller's Damages on Purchaser's Breach. On
Purchaser's default in payment of any amount due under the Notes
(which default is not cured within the period provided in the
Notes), Seller may elect, in its sole and absolute discretion,
in lieu of the payments due under the Notes for each month
during which such payment default continues, to receive from
Purchaser (and, on such election by Seller, Purchaser shall be
obligated to pay to Seller) an amount equal to thirty-five
percent (35%) of Cash Flow from the Consolidated Operations for
each month during which such default continues, such amount to
be paid within fifteen (15) after the last day of each such
month; provided, however, that if Cash Flow from the
Consolidated Operations exceeds Seven Hundred Thousand Dollars
($700,000) for the fiscal year of Purchaser in which such
default occurs, then Seller shall receive (in the aggregate
taking into account the thirty-five percent (35%) of Cash Flow
herein above referenced) forty percent (40%) of Cash Flow from
the Consolidated Operations for each month that Purchaser was in
default in such fiscal year and Seller made the election
described in this Section 16, all such amounts being due and
payable within sixty (60) calendar days after the last day such
fiscal year.
17. Miscellaneous.
17.1. Right of First Refusal to Purchase. In the
event Purchaser shall receive from a third party at any time
before the Notes are paid in full a bona fide offer (the "Third
Party Offer") to purchase the Consolidated Operations, or any
portion thereof, including without limitation, the Purchased
Assets (the "Offered Assets") at a specified price, whether such
price be first fixed by Purchaser or the third party, and
Purchaser shall decide to sell same for such amount, Purchaser
shall promptly give to Seller notice of the terms of such Third
Party Offer and of Purchaser's willingness to sell for the price
offered, and Seller shall have the first refusal and privilege
(which will hereafter be referred to as an "option") of
purchasing said Offered Assets at the price and under the terms
set forth in the Third Party Offer; such option to be exercised
by Seller's notifying Purchaser in writing, within ten (10) days
after Seller receives such notice from Purchaser, that it will
purchase said Offered Assets for the amount and under the terms
specified in the Third Party Offer; provided, however, that,
unless Seller shall agree to the contrary, the closing of any
purchase by Seller pursuant to this Section 17.1 shall occur not
later than sixty (60) days after Seller's notice to Purchaser of
Seller's determination to exercise its option hereunder.
In the event Seller shall not give Purchaser
notice, within said ten (10) day period, of its election to
purchase for the amount and under the terms specified in the
Third Party Offer, Purchaser may thereafter sell the said
Offered Assets to the party making the Third Party Offer. If
for any reason the said Offered Assets are not sold to the party
making the Third Party Offer, for the purchase price and under
the terms and conditions set forth therein, within one hundred
(120) days from Seller's receipt of notice of the Third Party
Offer hereunder, the restrictions set forth in this Section 17
shall again apply to any proposed sale of the Consolidated
Operations, or any portion thereof, by Purchaser to any
subsequent potential bona fide purchaser, including, without
limitation the party having made the expired Third Party Offer.
The giving by Seller of the notice of the
exercise of any purchase option herein before granted shall fix
or determine the right of Seller to purchase the Offered Assets
included in the option which Seller elects to exercise, and the
obligation of Purchaser to sell the same on the same terms and
conditions set out in the bona fide Third Party Offer; provided,
however, that the closing of any purchase by Seller pursuant to
this Section 17.1 shall be not later than sixty (60) days after
Seller's notice to Purchaser of Seller's determination to
exercise its option hereunder.
On the sale by Purchaser of all or part of the
Consolidated Operations, including the assets comprising the
Consolidated Operations, the Notes shall become immediately due
and payable.
17.2. Entire Agreement. This Agreement, together
with the Schedules and executed Exhibits hereto, embodies the
entire agreement and understanding of the parties hereto and
supersedes all previous agreements, arrangements, and
understandings concerning the subject of this Agreement.
17.3. Amendments. No amendment to this Agreement,
no waiver of compliance with any provision or condition hereof,
and no consent provided for herein will be effective unless
evidenced by an instrument in writing executed by the
appropriate party or parties. No waiver by any party of any
condition or other breach of any term, covenant, representation,
or warranty contained in this Agreement in any one or more
instances shall be deemed to be or construed as a waiver of any
other condition or of the breach of any other term,
representation, covenant, or warranty contained in this
Agreement.
17.4. Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties
hereto and their successors and assigns. Neither party may
assign its right or delegate its obligations hereunder without
the prior written consent of the other party, which consent
shall not be unreasonably withheld. The foregoing
notwithstanding, Seller may assign the Notes, and its right to
receive payment thereunder, together with the security therefor,
without the prior written consent of Purchaser.
17.5. Notices. Any notice or other communication
required or permitted to be given to the parties hereto shall be
in writing and shall be deemed to have been given if hand-
delivered, or mailed by certified or registered mail, return
receipt requested, first class postage prepaid, or by telephone
facsimile addressed as follows:
if to Seller:
Aero Services International, Inc.
000 Xxxxxxx-Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xx. Xxxxx Xxxxxxx
FAX (000) 000-0000
with copy to:
Xxxxxx Xxxxxxx Xxxxxx & Xxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxxxxxx X. Xxxxxxx, Esq.
FAX (000) 000-0000
if to Purchaser:
Xxxxx XX Aviation, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xx. Xxx Xxxxxxx
FAX (000) 000-0000
with copy to:
Simon, Peragine, Xxxxx & Xxxxxxxx, L.L.P.
30th Floor Energy Centre
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxx X. Xxxxx, Esq.
FAX (000) 000-0000
or at such other address or FAX number as the parties hereto may
from time to time designate in writing.
17.6. Expense of Sale. Each of Seller and
Purchaser shall each bear its own expenses in connection with
the negotiation and consummation of this Agreement.
17.7. Risk of Loss of Undelivered Assets. If and
to the extent that any of the Purchased Assets have not been
delivered to Purchaser prior to the Closing, the risk of
ownership and loss of such undelivered assets, if any, and only
those assets, shall belong to Seller through Closing.
17.8. Senior Debt; Effect of Default with Respect
to Senior Lender, Gulf Coast Bank, or Otherwise. Purchaser
shall assure, and the Senior Loan Documents shall require, that
the Senior Lender provide Seller with copies of any and all
notices of default by Purchaser under or with respect to the
Senior Debt. Purchaser's default under any of its obligations
to Senior Lender, Gulf Coast Bank (other than a covenant default
to Gulf Coast Bank that may be occasioned exclusively by the
granting of the security interest to Seller under Section 2.4 or
Section 2.5 hereof), or otherwise with respect to monies owed,
or under the then current lease with the Levee Board shall
constitute a default by Purchaser under this Agreement.
17.9. Captions. Captions and section headings
contained in this Agreement are for convenience only, do not
form a part of this Agreement, and do not define, restrict, or
expand the text to which they refer.
17.10. Governing Law. This Agreement shall be
governed by and constructed and enforced in accordance with the
internal laws of the State of Louisiana.
17.11. Consent to Jurisdiction. For the purposes
of any action or proceeding arising out of or based on this
Agreement, the other documents and instruments executed in
connection herewith, and/or transactions contemplated herein,
Purchaser and Seller hereby irrevocably submit to the
jurisdiction of the courts of the State of Louisiana and of the
United States District Court for the Eastern District of
Louisiana.
17.12. Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be
an original, but such counterparts together shall constitute one
and the same instrument.
17.13. Recitals Incorporated. The recitals
appearing before Section 1 of this Agreement constitute a
material part of this Agreement, and are expressly incorporated
herein by reference.
17.14. Allocation of Purchase Price. The Purchase
Price shall be allocated among the Purchased Assets as set forth
in Schedule 17.14 hereto, and Purchaser shall file the
appropriate documents or forms with the United States Internal
Revenue Service reflecting the same.
17.15. Non-Monetary Default. On the failure of
either party hereto to observe, perform or keep any of its
covenants or obligations under this Agreement (other than a
payment default hereunder or under the Notes, which payment
default shall be subject to the applicable cure provisions of
this Agreement and the Notes), or should any representation or
warranty of such party prove to be untrue (collectively a "Non-
Monetary Default"), which Non-Monetary Default is not cured
within thirty (30) days after written notice thereof from the
non-breaching party, the breaching party shall be in default
hereunder. The foregoing notwithstanding, if a Non-Monetary
Default cannot be cured within the said thirty (30) day cure
period, but the breaching party demonstrates to the reasonable
satisfaction of the non-breaching party that the breaching party
is using its best efforts to cure such Non-Monetary Default, the
cure period for such Non-Monetary Default shall be extended for
an additional thirty (30) days.
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have executed this Agreement on the day, month,
and year first above written.
Witness/Attest: AERO SERVICES INTERNATIONAL, INC.
B. R. Xxxxxx By: X. X. Xxxxx
Its: Chairman & CEO
XXXXX XX AVIATION, INC.
Xxxxx Xxxx By: Xxxxxxx X. Xxxxxxx
Its: President
Xxxxx Xxxx Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Sole Stockholder of Xxxxx XX Aviation, Inc.
