1
Exhibit 10.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") made as of the 7th
day of March, 1997, by and between INTERNATIONAL TOTAL SERVICES,
INC. ("Buyer" and/or ITS. Inc.), an Ohio corporation, and INTEX
AVIATION SERVICES, INC. a South Carolina corporation ("Seller").
WITNESSETH THAT:
----------------
WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase
from Seller, subject to the terms and conditions hereof, certain assets of
Seller.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. PURCHASE AND SALE OF ACQUIRED CONTRACTS AND ACQUIRED
----------------------------------------------------
ASSETS.
-------
Subject to the terms and conditions hereof, on the Closing Date (as
defined in Article 6), Seller shall sell, transfer and assign to Buyer, and
Buyer shall purchase and acquire from Seller, all the right, title and interest
of Seller in and to the Acquired Contracts and the Acquired Assets (as
respectively defined in Section 1.1).
1.1 ACQUIRED CONTRACTS AND ACQUIRED ASSETS. The "Acquired Contracts"
shall mean those certain Aviation Services Contracts performed by Seller as
listed on Schedule A. As used herein, "Acquired Assets" shall mean those certain
assets listed on Schedule B.
1.2 LEASE AGREEMENTS. At the Closing, Seller shall transfer to Buyer
any and all rights under Lease Agreements as reflected on Schedule C.
2
1.3 SCHEDULES EXCLUSIVE. Other than those assets specifically described
and set forth in Schedules A, B, and C to this Agreement, the parties hereto
acknowledge and agree that Seller s not transferring to Buyer under this
Agreement any other assets or rights of Seller.
1.4 ASSURANCES. After the Closing, for no further consideration, Seller
shall perform all such other acts (including without limitation the use of
Seller's reasonable efforts to obtain or achieve transfer of the Acquired
Contracts and the Acquired Assets as contemplated by this Agreement) and shall
execute, acknowledge and deliver all such assignments, transfers, consents and
other documents as Buyer or its counsel may reasonably request to vest in Buyer,
and perfect and protect Buyer's right, title and interest in, and enjoyment of,
the Acquired Contracts and the Acquired Assets. Buyer shall similarly perform
all such other actions and shall execute, acknowledge and deliver all such other
documents as Seller or its counsel may reasonably request to perfect and protect
Seller's rights under this Agreement. Seller hereby acknowledges and agrees that
the Acquired Contracts and the Acquired Assets are unique and not available on
the open market and that Buyer shall have, in addition to all other legal
remedies available to it, the right to enforce the terms of this Agreement by a
decree of specific performance. Seller shall cooperate with Buyer to the extent
Buyer may reasonably request in the defense of any proceeding seeking to
invalidate or set aside the sale and purchase of the Acquired Contracts or the
Acquired Assets.
-2-
3
1.5 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors, legal representatives
and assigns, but this Agreement may not be assigned by any party without the
prior written consent of the other party.
2. ASSUMPTION OF OBLIGATIONS AND LIABILITIES.
------------------------------------------
2.1 CONTRACTS ASSUMED. Buyer shall assume as of the Closing, and
perform when due, Seller's obligations to be performed after the Closing Date
under the following Contracts (as hereinafter defined): all the Acquired
Contracts reflected in Schedule A hereto; and all other contracts, leases and
Lease Agreements as listed on Schedules B and C hereto; all such Contracts
described in this paragraph, to the extent assumed by Buyer, being referred to
hereinafter as "Assumed Contracts". If Seller fails to obtain any consent
necessary for the assignment of any Assumed Contract to Buyer, Seller will use
reasonable efforts to obtain for, and provide to Buyer the benefits under such
Assumed Contract, including enforcement of any and all rights of Seller against
the other parties thereto.
2.2 NON-ASSUMPTION OF LIABILITIES. Notwithstanding Section 2.1, Buyer
will not by the execution or performance of this Agreement, by the exercise of
any rights with respect to the Acquired Assets, or by any other action, assume,
become responsible for or incur any liability or obligation of any nature of
Seller, matured or unmatured, liquidated or unliquidated, fixed or contingent,
or known or unknown, and whether arising out of occurrences prior to, at or
after the Closing; and Seller shall indemnify and hold harmless Buyer, its
successors and assigns, and
-3-
4
the Acquired Assets against and from, such liabilities and obligations of Seller
and against and from any and all claims asserted, and costs and expenses
(including reasonable attorneys' fees) incurred with respect to the same;
provided, however, that Buyer shall assume all obligations of Seller remaining
unperformed on the Closing date under the Assumed Contracts. Without limiting
the generality of the foregoing, Buyer shall not assume, become responsible for
or incur any liability of obligation of any nature arising from occurrences
prior to the Closing with respect to:
(a) any liability whatsoever arising out of Seller's service
contracts;
(b) any and all tax liability prior to closing including
without limitation Federal, State, and Local Taxes, payroll and withholding
taxes, worker's compensation and unemployment taxes;
(c) any taxes (including amounts attributable to depreciation
and investment tax credit recapture) relating to or arising out of the
transactions contemplated by this Agreement;
(d) salaries and related expenses of Seller's employees prior
to the Closing Date, fees, costs, expenses, premiums, commissions and charges to
be paid by Seller as provided in Section 4.6; and
(e) any Contract with, or liability or obligation to, any
affiliate of Seller.
3. PURCHASE PRICE.
------------------
3.1 DETERMINATION OF PURCHASE PRICE. The purchase price ("Purchase
Price") for the Acquired Contracts and Acquired Assets shall be $5,141,772
provided, however, that the Purchase Price
-4-
5
shall be subject to adjustment pursuant to Section 6.3 of this Agreement.
3.2 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be payable
as follows:
(a) $2,570,886 at Closing payable to Seller;
(b) the balance due one hundred and five (105) days from the
Effective Date payable to Seller; subject to adjustment pursuant to Section 6.3
of this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF SELLER.
--------------------------------------------
Seller represents and warrants to Buyer that:
4.1 ORGANIZATION AND OWNERSHIP. Seller corporation validly exists and
is in good standing under the laws of the State of South Carolina. Seller is
qualified as a foreign corporation in each state where its activities would
require it to qualify as a foreign corporation in such State.
4.2 AUTHORITY; BINDING EFFECT. Seller has full power and authority (a)
to own the Acquired Assets and (b) to execute, deliver and perform this
Agreement and the other instruments, agreements and documents to be executed by
it hereunder, and to perform its obligations hereunder and thereunder and to
consummate the transactions provided for herein and therein. Such execution,
delivery and performance have been duly authorized by all necessary action on
the part of Seller, and do not and will not (a) contravene the Articles of
Incorporation or By-Laws of Seller; (b) result in the creation or imposition of
any security interest, lien, easement, right-of-way, charge, assessment,
encumbrance, claim, restriction or title defect of any nature whatsoever upon
any of the Acquired Assets or (c) result in any violation of any
-5-
6
law, rule or regulation applicable to Seller, the Acquired Contracts or the
Acquired Assets. Seller is not a party to, or subject to or bound by, and none
of the Acquired Assets are subject to or bound by, any judgment, injunction or
decree of any court or governmental authority which may restrict or interfere
with the performance of this Agreement, or such other instruments, agreements
and documents as are to be executed by Seller, in connection herewith on or
prior to the Closing Date. This Agreement is, and each of such other
instruments, agreements and documents will be when executed and delivered, a
valid and binding obligation of Seller.
4.3 FINANCIAL INFORMATION. Seller will deliver to Buyer prior to the
Closing, financial information to be mutually designated in the process of
Buyer's due diligence.
4.4 ACQUIRED ASSETS.
(a) TITLE. Except for those assets covered under leases to be assumed
by Buyer, Seller as of the Closing Date will convey to Buyer good title to all
the Acquired Assets and the Acquired Contracts free and clear of all title
defects and objections, security interests, liens, charges and encumbrances of
any nature whatsoever, including without limitation, leases, mortgages, deeds of
trust, security interests, pledges, liens conditional sales agreements, claims,
restrictions, reservations, covenants, encumbrances, charges, special or other
assessments, restraints on transfer or other title defect; except, however, no
warranty is given as to assignability of the Aviation Services Contracts. In
addition, no financing statement under the Uniform Commercial Code with respect
to any of the Acquired Assets has been filed in any
-6-
7
jurisdiction, and Seller has not signed any such financing statements or any
Security Agreement authorizing any secured party thereunder to file any such
financing statement, which will not be released as of the date of closing.
(b) INSURANCE. Seller has maintained a reasonable and customary program
of insurance with respect to the Acquired Assets, and the Acquired Contracts and
have insured the Acquired Assets, and the Acquired Contracts with reputable
insurance companies in such manner as may be required pursuant to any
franchises, agreements, licenses or permits applicable to the Acquired Assets,
and the Acquired Contracts.
(c) PERMITS. Schedule D hereto sets forth a complete and accurate list
of all material Permits used or held for use in connection with the conduct of
the Acquired Contracts. Except as set forth on Schedule D, Seller has all
Permits, the absence of which would have a material adverse effect on the
Acquired Contracts. Except as indicated on such schedule, all Permits listed
thereon may be freely assigned or transferred to Buyer at the Closing. To the
extent that such Permits may not be assigned, Seller shall maintain the same
until such time as Buyer obtains its own permits.
4.5 CONTRACTS. Schedule A hereto contains a true and complete list of
the Acquired Contracts being transferred to Buyer by Seller. To the best of
Seller's knowledge (i) each Assumed Contract is valid and binding upon each
party thereto and is in full force and effect and (ii) there is no default or
claim of default under any provision of any such Assumed Contract, and no event
has occurred which, with the passage of time or the giving of
-7-
8
notice (or both), would constitute a default by Seller (or, to the best of
Seller's knowledge, by any other party thereto) under any provision thereof, or
would permit modification, acceleration or termination of such Assumed Contract
by any party thereto. Neither the consummation of the transactions contemplated
hereby nor the transfer of any such Assumed Contract hereunder will constitute
such a default or event. Seller has delivered to Buyer a true, correct and
complete copy of each Assumed Contract. Seller has not received any notice that
any person intends or desires to modify, waive, amend, rescind, release, cancel
or terminate any Assumed Contract.
4.6 EMPLOYEES; LABOR RELATIONS. Schedule E contains a complete list of
wage rates and commission arrangements for all employees of Seller are employed
with respect to the Acquired Assets and the Acquired Contracts, together with
information as to any employment, consulting or other compensation contracts,
arrangements and policies, written and oral, relating to any such employees,
including without limitation any bonus, vacation or severance policies or
arrangements. Seller has paid or made provision for the payment of all salaries
and wages through the Effective Date for the benefit of such employees on
Schedule E and has complied in all material respects with all applicable laws,
rules and regulations relating to the employment of labor, including those
relating to wages, hours, collective bargaining and the payment and withholding
of taxes, and has withheld and paid to the appropriate governmental authority,
or is holding for payment not yet due to such authority, all amounts required by
law or
-8-
9
agreement to be withheld from the wages or salaries of such employees.
4.7 TAXES. Seller has filed on a timely basis all federal, state, local
and foreign tax returns, reports and declarations required to be filed by it.
Seller has paid all taxes, interest and penalties which were due pursuant to
such returns or otherwise due, levied or assessed against Seller or its Assets,
other than taxes or charges, the payment of which is not yet due (or which, if
due, is not yet delinquent or is being contested in good faith or has not been
finally determined). There is no agreement for the extension of the time of any
assessment of any tax with respect to Seller and no notice of any federal tax
lien relating to Seller has been filed against them or any of its Assets in any
jurisdiction. Seller has not had any tax deficiency or claim outstanding, and
all required deposits with respect to employees' withholding taxes have been
duly made. No examination of Seller or the Acquired Contracts or the Acquired
Assets by the Internal Revenue Service or any state, local or foreign tax
authority is currently in progress.
4.8 BROKERS AND FINDERS. Neither Seller nor any affiliate of Seller has
dealt with anyone in a fashion that would incur any broker's, finder's or
similar fees or commissions in connection with the transactions contemplated by
this Agreement.
4.9 FULL DISCLOSURE. All documents and other papers delivered by or on
behalf of Seller in connection with this Agreement are true, complete and
authentic. No representation or warranty of the Seller contained in this
Agreement contains an untrue statement of a material fact or omits to state a
material
-9-
10
fact necessary to make the statements made, in the context in which made, not
materially false or misleading.
5. REPRESENTATIONS AND WARRANTIES.
-------------------------------
Buyer hereby represents and warrants to Seller that:
5.1 ORGANIZATION. Buyer is a corporation validly existing and in good
standing under the laws of the State of Ohio.
5.2 AUTHORITY; BINDING EFFECT. Buyer has full power and authority to
execute, deliver and perform this Agreement and the other instruments,
agreements and documents to be executed by it hereunder and to consummate the
transactions provided for herein and therein. Such execution, delivery and
performance have been duly authorized by all necessary action on the part of
Buyer and do not and will not (i) contravene the Articles of Incorporation or
By-Laws of Buyer, (ii) conflict with, result in a breach of, or entitle any
party (with due notice or lapse of time or both) to terminate, accelerate or
call a default with respect to any agreement or instrument to which Buyer is a
party or by which Buyer or any of its assets are bound; or (iii) result in any
violation of any law, rule or regulation applicable to Buyer. The Buyer is not a
party to or is subject to or bound by, any judgment, injunction or decree of any
court or governmental authority which may restrict or interfere with the
performance of this Agreement or such other instruments, agreements and
documents as are to be executed by Buyer in connection herewith on or prior to
the Closing Date. This Agreement is, and each of such other instruments,
agreements and documents will be when executed and delivered a valid and binding
obligation of Buyer.
-10-
11
5.3 CONSENTS. No consent, approval, authorization or order of, or
registration, qualification or filing with, any court, regulatory authority or
other governmental body is required for the execution, delivery and performance
by Buyer of this Agreement and the other instruments, agreements and documents
required or contemplated hereunder or the consummation by Buyer of the
transactions contemplated hereby and thereby. No consent of any person
(including without limitation any party to any contract, mortgage, indenture,
agreement or other arrangement to which Buyer is a party or by which it is
bound) is required for the execution, delivery and performance by Buyer of this
Agreement and such other instruments, agreements and documents or the
consummation of the transactions contemplated hereby and thereby.
5.4 BROKERS AND FINDERS. Buyer has not dealt with anyone in a fashion
that would incur any broker's, finder's or similar fees or commissions in
connection with the transactions contemplated by this Agreement.
6. CLOSING
-------
The transfers and deliveries to be made pursuant to this Agreement (the
"Closing") shall take place by facsimile or mail by March 27, 1997, or at such
other time and place as the parties shall agree; to be effective at 12:01 A.M.
on April 1, 1997 (the "Effective Date"). The date on which the Closing is to
occur is herein referred to as the "Closing Date". Time is of the essence with
respect to closing.
6.1 DELIVERIES BY SELLERS. Seller shall deliver to Buyer at the
Closing:
-11-
12
(a) Bills of sale, instruments of transfer, assignment and conveyance,
required consents thereto and other instruments in boron and substance
satisfactory to Buyer and sufficient to convey, transfer, and assign to Buyer
and effectively vest in Buyer all of Seller's right, title and interest in and
to the Acquired Contracts and the Acquired Assets;
(b) All written contracts and lease Agreements;
(c) All Permits listed on Schedule D, to the extent such Permits are
assignable;
(d) Certification that each of Seller's representations and warranties
contained in this Agreement are true and correct at and as of the Closing Date
and that the Acquired Assets shall remain on its locations; and
(e) Such other instruments and documents as may be reasonably requested
by, and in form and substance satisfactory to, Buyer and Buyer's counsel.
6.2 DELIVERIES BY BUYER.
Buyer shall deliver to Seller at the Closing:
(a) Cash in the amount required pursuant to Section 3.2; and
(b) Such other instruments and documents as may be reasonably requested
by, and in form and substance satisfactory to Seller and Seller's counsel.
6.3 POST-CLOSING ADJUSTMENT.
(a) That portion of the Purchase Price payable to Seller pursuant to
Section 3.2(b), above, shall be adjusted as follows:
(i) The actual ▇▇▇▇▇▇▇▇ generated by the Acquired
Contracts as set forth on Schedule A during the
-12-
13
three month period after the Effective Date shall be
totaled, and then divided by 3 to obtain a monthly
average. This average shall then be multiplied by 2.
(ii) This amount shall be reduced by any loss of revenue
caused by the loss of any of the Acquired Contracts
during the three month adjustment period, dollar for
dollar, to arrive at the Adjusted Purchase Price.
(iii) The Adjusted Purchase Price shall be compared to the
Purchase Price set forth in Section 3.1, above, for
the purpose of calculating the final payment to be
paid by Buyer. The final payment shall be
accompanied by a statement from Buyer providing, in
reasonable detail, the calculations used in
determining the Adjusted Purchase Price and such
final payment.
(b) Any applicable sales, liquidation or use tax shall be
borne by Seller.
(c) Any nonrecurring or nonregular offsets taken against the
monthly revenue and which relate to Seller's operations prior
to closing, shall be deducted from the balance due. Buyer
shall provide sufficient notice to Seller of any such offsets
prior to deduction.
7. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION.
---------------------------------------------
7.1 SURVIVAL. All representations, warranties, covenants, indemnities
and agreements contained in or made pursuant to this Agreement (including any
exhibit, certificate, document or statement delivered pursuant hereto) shall
survive (and not be
-13-
14
affected in any respect by) the Closing and any investigation conducted by any
party or any information which any party may have from time to time, subject to
the applicable statute of limitations.
7.2 INDEMNIFICATION.
(a) BUYER. Buyer agrees to indemnify and hold Seller harmless from, and
to reimburse Seller for, any loss, fee, cost, expense, damage, liability or
claim (including, without limitation, any and all fees, costs and expenses
whatsoever, reasonably incurred by them, or their counsel in investigating,
preparing for, defending against, or providing evidence, producing documents or
taking any other action in respect of any threatened or asserted claim) arising
out of, based upon or resulting from (i) the inaccuracy as of the Closing Date
of any representation or warranty of Buyer which is contained in or made
pursuant to this Agreement; (ii) Buyer's breach of or failure to perform any of
their covenants or agreements contained in or made pursuant to this Agreement;
(iii) any and all liability relating to the operation of "Acquired Contracts"
arising from occurrences after closing.
(b) SELLER. Seller hereby agrees to indemnify and hold Buyer harmless
from, and to reimburse Buyer for, any loss, fee, cost, expense, damage,
liability or claim (including, without limitation, any and all fees, costs and
expenses whatsoever, reasonably incurred by Buyer, or its counsel in
investigating, preparing for, defending against, or providing evidence,
producing documents or taking any other action in respect of any threatened or
asserted claim) ("Liabilities") arising out of, based upon or resulting from (i)
the inaccuracy as of the Closing Date of any representation or
-14-
15
warranty of Seller which is contained in or made pursuant to this Agreement;
(ii) Seller's breach of or failure to perform any of their covenants or
agreements to be performed after the Closing, contained in or made pursuant to
this Agreement; (iii) any and all liability arising from acts of Seller and/or
resulting from any conduct of Seller, including but not limited to violations of
Federal, State or Local laws. Proof of liability insurance for the period prior
to Closing, and thereafter, to be provided and accepted by Buyer prior to
closing; (iv) any and all liability arising from its relationship with
employees, prior to date of closing resulting from injuries and/or damages
sustained as a result of the employment relationship.
(c) Liquidation or Dissolution of Seller. The liquidation or
dissolution of Seller shall not terminate, modify or otherwise affect the rights
of Buyer to indemnification pursuant to this Section.
(e) Right of Offset. Should Buyer have the right to offset amounts
owing to the Seller hereunder against Liabilities for which Buyer is entitled to
be indemnified pursuant to Section 7.2(b), then Buyer agrees to give Seller
sufficient notice of said offset prior to taking the offset.
8. CONDUCT OF CONTORTS PENDING CLOSING.
------------------------------------
8.1 AFFIRMATIVE COVENANTS PENDING CLOSING. During the period from the
date of this Agreement to the Closing Date, Seller shall:
(a) INSPECTION OF BOOKS AND RECORDS. Afford Buyer and its authorized
representatives reasonable access to all Acquired Assets and Acquired Contracts,
files, books, records, contracts, agreements and other documents of Seller
during normal business
-15-
16
hours, permit the reasonable copying of any of the foregoing and furnish or
cause to be furnished to Buyer and its authorized representatives all financial,
commercial, operating and other information of Seller as Buyer may reasonably
request.
(b) OPERATION OF CONTRACTS. Keep each of the Assumed Contracts in full
force and effect without modification or amendment and conduct the Acquired
Contracts in compliance with all applicable laws, rules and regulations,
maintain its books of account and records in a manner consistent with past
practice, prepare properly and file on or prior to the due date thereof all tax
returns or reports required by any jurisdiction and pay all taxes due for any
period ending prior to or at the Closing Date, and exercise due diligence in
safeguarding, repairing, replacing and maintaining the Acquired Assets.
(c) PRESERVATION OF ORGANIZATION. Use its best efforts (without making
any commitment on behalf of Buyer) to preserve the Assumed Contracts intact and
to preserve its relationship with employees, agents, suppliers, customers and
others having contracts relations with it.
8.2 NEGATIVE COVENANTS PENDING CLOSING. From and after the date of this
Agreement until the Closing Date, except with the prior written approval of the
Buyer, Seller shall not:
(a) GENERAL. Carry on the Acquired Contracts other than in the usual
and ordinary course.
(b) SALES OR PURCHASES OF PROPERTY. Seller shall in no way diminish or
waste the assets made a party of this Agreement and to be assumed by Buyer.
-16-
17
(c) INSURANCE. Fail to carry at all times between the date hereof and
the Closing Date insurance in accordance with Section 4.4(c).
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
--------------------------------------------
The obligations of Buyer to be performed at the Closing shall be
subject to the satisfaction at or before the Closing of all of the following
conditions (unless waived by Buyer in writing):
9.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Seller set forth in Article 4 of this Agreement shall have been true and
correct in all respects when made and shall be true and correct in all respects
at and as of the Closing Date as though such representations and warranties were
made at and as of such date.
9.2 PERFORMANCE. Seller shall have, in all material respects, performed
and complied with, or caused the performance of and compliance with, all
obligations under this Agreement which are to be performed or complied with by
it or on its behalf at or prior to the Closing.
9.3 CERTIFICATES. Seller shall have delivered to Buyer at the closing,
a Certificate of its President to the effect that the conditions set forth in
this Article 9 have been satisfied.
9.4 LITIGATION. There shall be no pending or threatened claim,
litigation, action, suit, proceeding, investigation or inquiry, judicial or
administrative (i) which, if adversely determined, would materially and
adversely affect the Acquired Assets, or the Acquired Contracts; or (ii) which
has been brought or threatened for the purpose of enjoining or preventing the
consummation of this Agreement or the transactions contemplated
-17-
18
hereby, which otherwise claims that this Agreement or the consummation of the
transactions contemplated hereby is improper or which asserts that Buyer would
be liable as a transferee of the Acquired Assets to any creditor or creditors of
Seller or any affiliate of Seller.
9.5 NO MATERIAL ADVERSE EFFECT. Neither the Acquired Contracts nor the
Acquired Assets shall have been materially adversely affected as a result of any
change, occurrence, circumstance, condition, loss, damage or destruction
(whether or not covered by insurance) of any character, or any combination
thereof, and there shall exist no change, occurrence, circumstance, condition,
loss, damage or destruction (whether or not covered by insurance) of any
character, or any combination thereof, which might reasonably be expected to
result in any such material adverse effect. In the event any loss, damage,
condemnation, or destruction with respect to the Acquired Contracts or the
Acquired Assets should occur and, notwithstanding such occurrence, the
transactions contemplated by this Agreement are consummated, any insurance
recovery or condemnation award, or the right of Seller thereto, in respect of
any such loss, damage condemnation or destruction, shall be paid, or assigned,
as the case may be, to Buyer at the Closing as part of the Acquired Assets, or
as promptly thereafter as practical.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER.
----------------------------------------------
The obligations of Seller to be performed at the Closing shall be
subject to the satisfaction at or before the Closing of the following
conditions:
-18-
19
10.1 REPRESENTATIONS AND WARRANTIES. Buyer's representations and
warranties contained in Article 5 of this Agreement shall have been true and
correct in all respects when made and shall be true and correct in all respects
at and as of the Closing Date as though such representations and warranties were
made at and as of such date.
10.2 PERFORMANCE. Buyer shall have, in all material respects, performed
and complied with, or caused the performance of and compliance with, its
obligations under this Agreement which are to be performed or complied with by
it or on its behalf at or prior to the Closing.
10.3 CERTIFICATES. Buyer shall have delivered to Seller at the closing,
a Certificate of its President to the effect that the conditions set forth in
this Article 10 have been satisfied.
10.4 LITIGATION. At the Closing, there is no pending or threatened
claim, litigation, action, suit, proceeding, judicial or administrative against
Buyer for the purpose of enjoining or preventing the consummation of this
Agreement or otherwise claiming that this Agreement or the consummation hereof
is improper.
11. MISCELLANEOUS PROVISIONS AND AGREEMENTS.
----------------------------------------
11.1 TRANSFER AND OTHER EXPENSES. Seller shall pay all costs incurred,
whether at or subsequent to the Closing, in connection with transferring the
Acquired Contracts and the Acquired Assets to Buyer as contemplated in this
Agreement, including, without limitation, all sales, use, and other transfer
taxes.
11.2 ACCESS TO RECORDS AND PERSONNEL. After the Closing, Buyer shall
provide Seller with access at reasonable times and upon reasonable prior notice
to such documents and records acquired by
-19-
20
Buyer hereunder as are necessary for Seller's tax, accounting or legal purposes.
11.3 CONDUCT FOLLOWING CLOSING.
(a) Buyer shall have no obligation to employ any existing
employees of Seller prior to, at or after the Closing.
(b) Seller warrants that it will not hire any present Seller
employee retained by Buyer for a period of one year from the
date of Closing.
(c) Buyer warrants that it will in no way use or maintain the
name "Intex Aviation Services" following the 90-day
period after the Effective Date. During said 90-day
period, Seller hereby grants to Buyer a nontransferable,
nonexclusive license to use the Intex name. Said license
shall automatically terminate at the end of the 90-day
period after the Effective Date. Buyer shall indemnify
Seller from any liability arising from the use of the
Intex name.
(d) At its discretion, Buyer will retain any and all personnel and
management at the existing account locations, and their
regional offices, including the general manager of the
operations. Seller assumes responsibility for any accrued
benefits for its employees or termination obligations.
(e) Buyer and Seller shall enter into a Noncompetition
Agreement in the form attached hereto as Exhibit A.
11.4 NOTICES. All notices, requests, demands and other communications
made hereunder shall be in writing and shall be deemed duly given when
personally delivered, sent by facsimile or
-20-
21
sent by registered or certified mail, postage prepaid, as follows, or to such
other address or person as any party may designate by notice to the other party:
If to Seller:
Intex Aviation Services, I nc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Dr.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer:
ITS, Inc.
Crown Centre
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Legal Department
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
11.5 AMENDMENTS. This Agreement cannot be changed or terminated orally
and no waiver of compliance with any provision or condition hereof and no
consent provided for herein shall be effective unless evidenced by an instrument
in writing duly executed by Seller and Buyer.
11.6 ENTIRE AGREEMENT; CAPTIONS; COUNTERPARTS. This Agreement and the
Exhibits attached hereto, the Schedules delivered pursuant hereto and the other
writings specifically identified herein or contemplated hereby contain the
agreement among the parties hereto with respect to the transactions contemplated
herein and supersede all previous written or oral negotiations, commitments and
writings. The Section headings of this Agreement are for convenience of
reference only and do not form a party hereof and do not in any way modify,
interpret or construe the intentions of the parties. This Agreement may be
executed in two or more counterparts, and all such counterparts shall constitute
one and the same instrument.
-21-
22
11.7 APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Ohio.
11.8 SEC AUDIT. Because of Buyer's impending Initial Public Offering
(IPO) the Securities and Exchange Commission (SEC) may require an audit of this
transaction and Seller's last three years of financial statements. Should this
occur, Seller agrees to cooperate with the Buyer in conducting the audit and
will use all reasonable efforts to obtain any and all information required by
Buyer in completing the audit and complying with all SEC requirements. Buyer
shall bear all costs associated with the audit or complying with all SEC
requirements.
(The rest of this page is intentionally left blank.)
-22-
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
BUYER: INTERNATIONAL TOTAL SERVICES, INC.
(AN OHIO CORPORATION)
By:________________________________
Its: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President and CEO
Witness:____________________________
SELLER: INTEX AVIATION SERVICES, INC.
(A SOUTH CAROLINA CORPORATION)
By:_________________________________
Its:________________________________
Witness:____________________________
-23-