EXHIBIT 2
CONFIDENTIAL
STOCK PURCHASE AGREEMENT
BY AND AMONG
CYBER-CARE, INC.,
MIOA ACQUISITION COMPANY I, INC.
AIR RESPONSE NORTH, INC.,
GLOBAL AIR CHARTER, INC.,
GLOBAL AIR RESCUE, INC.,
AND
AIR RESPONSE MEDICAL TRANSPORT CORP.
AND
LOUIS R. CAPECE, JR.
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STOCK PURCHASE AGREEMENT............................................1
ARTICLE 1..............................................................1
DEFINITIONS..........................................................1
1.1 DEFINED TERMS. AS USED IN THIS AGREEMENT:...................1
ARTICLE 2..............................................................3
THE ACQUISITION......................................................3
2.1 THE ACQUISITION...............................................3
2.2 EFFECTIVE TIME................................................3
ARTICLE 3.............................................................3
ACQUISITION CONSIDERATION............................................3
3.1 PURCHASE OF STOCK.............................................3
3.2 PROMISSORY NOTE...............................................4
3.3 OPTIONS AND WARRANTS..........................................7
3.4 DELIVERY OF SHARES............................................7
3.5 RELEASE OF GUARANTEES.........................................7
3.6 FINANCING.....................................................7
3.7 CLOSING.......................................................8
ARTICLE 4..............................................................8
ADDITIONAL COVENANTS.................................................8
4.1 CONDUCT OF BUSINESS BY AIR RESPONSE ENTITIES PENDING CLOSING..8
4.2 EXPENSES......................................................8
4.3 NOTIFICATION OF CERTAIN MATTERS...............................8
4.4 PUBLIC ANNOUNCEMENTS..........................................9
4.5 CONFIDENTIALITY...............................................9
4.6 CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS...................10
4.7 INDEMNIFICATION..............................................10
4.8 MANAGEMENT AGREEMENT.........................................10
4.9 FURTHER ASSURANCES...........................................10
4.10 FILING OF TAX RETURNS........................................10
4.11 FUTURE TAX CONTESTS..........................................11
ARTICLE 5.............................................................12
REPRESENTATIONS AND WARRANTIES OF ARMT..............................12
5.1 ORGANIZATION AND AUTHORITY...................................12
5.2 CORPORATE POWER AND AUTHORITY; DUE AUTHORIZATION.............12
5.3 NO CONFLICT; REQUIRED CONSENTS...............................12
5.4 ADVISORS FEES................................................13
5.5 SURVIVAL.....................................................13
ARTICLE 5B............................................................13
ARTICLE 6.............................................................13
REPRESENTATIONS AND WARRANTIES......................................13
OF AIR RESPONSE ENTITIES AND SHAREHOLDERS...........................13
6.1 AIR RESPONSE ENTITIES SHARES.................................13
6.2 ORGANIZATION.................................................14
6.3 CAPITALIZATION...............................................14
6.4 AUTHORITY AND APPROVAL OF AGREEMENT..........................14
6.5 NO VIOLATIONS................................................15
6.6 FINANCIAL STATEMENTS.........................................15
6.7 CONDUCT SINCE DATE OF RECENT BALANCE SHEET...................15
6.8 SUBSIDIARIES.................................................16
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6.9 LIABILITIES..................................................17
6.10 TITLE TO AND CONDITION OF PROPERTIES.........................17
6.11 ACCOUNTS RECEIVABLE..........................................17
6.12 CONTRACTS AND COMMITMENTS....................................17
6.13 OFFICERS AND DIRECTORS.......................................19
6.14 LABOR MATTERS................................................19
6.15 COMPLIANCE WITH LAWS AND ORDERS..............................19
6.16 BOOKS AND RECORDS............................................21
6.17 TAX MATTERS..................................................21
6.18 REAL ESTATE..................................................22
6.19 INSURANCE....................................................22
6.20 PERSONNEL....................................................23
6.21 LITIGATION...................................................23
6.22 OTHER LIABILITIES............................................23
6.23 CONSENTS.....................................................23
6.24 JUDGMENTS....................................................23
6.25 BROKERS......................................................24
6.26 TRADE RIGHTS.................................................24
6.27 BANK ACCOUNTS................................................24
6.28 OPERATION OF AIRCRAFT........................................24
6.29 CARE, USE AND MAINTENANCE....................................25
6.30 Y2K COMPLIANT................................................25
6.31 SURVIVAL.....................................................25
6.32 DISCLOSURE...................................................25
ARTICLE 7.............................................................26
CONDITIONS TO OBLIGATION OF SHAREHOLDERS TO CLOSE...................26
7.1 REPRESENTATIONS AND WARRANTIES AT CLOSING....................26
7.2 OBLIGATIONS PERFORMED........................................26
7.3 CONSENTS AND APPROVALS.......................................26
7.4 CLOSING DELIVERIES...........................................26
7.5 NO INVESTIGATIONS OF ARMT AND ITS SUBSIDIARIES OR THEIR
BUSINESS.....................................................26
7.6 NO MATERIAL ADVERSE EFFECT...................................26
7.7 SECURITIES LAWS..............................................26
7.8 BOARD APPROVAL...............................................27
7.9 LEGALITY.....................................................27
7.10 REGULATORY MATTERS...........................................27
7.11 ADDITIONAL CLOSING CONDITIONS................................27
ARTICLE 8.............................................................27
CONDITIONS TO OBLIGATIONS OF ARMT TO CLOSE..........................27
8.1 REPRESENTATIONS AND WARRANTIES AT CLOSING....................27
8.2 OBLIGATIONS PERFORMED........................................27
8.3 CONSENTS AND APPROVALS.......................................27
8.4 CLOSING DELIVERIES...........................................28
8.5 NO INVESTIGATIONS OF AIR RESPONSE ENTITIES AND ITS BUSINESS..28
8.6 NO MATERIAL ADVERSE EFFECT...................................28
8.7 SECURITIES LAWS..............................................28
8.8 LEGALITY.....................................................28
8.9 REGULATORY MATTERS...........................................28
8.10 ADDITIONAL CLOSING CONDITIONS................................28
ARTICLE 9.............................................................29
TERMINATION.........................................................29
9.1 TERMINATION..................................................29
9.2 EFFECT OF TERMINATION........................................29
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ARTICLE 10............................................................29
MISCELLANEOUS PROVISIONS............................................29
10.1 SEVERABILITY.................................................29
10.2 MODIFICATION.................................................29
10.3 ASSIGNMENT, SURVIVAL AND BINDING AGREEMENT...................29
10.4 COUNTERPARTS.................................................30
10.5 NOTICES......................................................30
10.6 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES...............30
10.7 GOVERNING LAW; JURISDICTION..................................31
10.8 ATTORNEY'S FEES..............................................31
10.9 HEADINGS.....................................................31
10.10 INCORPORATION OF EXHIBIT, SCHEDULES AND MANAGEMENT
AGREEMENTS..................................................31
10.11 CONSTRUCTION................................................31
10.12 ARBITRATION.................................................31
ARTICLE 11............................................................31
LIMITION OF LIABILITY...............................................31
ARTICLE 12............................................................32
RELEASE OF RESTRICTIVE LEGENDS......................................32
FROM CAPECE'S STOCK.................................................32
ARTICLE 13............................................................32
ADDITIONAL PROVISION................................................32
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT, dated September 15, 2000, effective on
September 2, 2000, is by and between Cyber-Care, Inc. ("CYBER-CARE"), MIOA
Acquisition Company I Inc., (collectively "Shareholders"), and Air Response
North, Inc., Global Air Charter, Inc., Global Air Rescue, Inc. (collectively
"Air Response Entities") and Air Response Medical Transport Corp. ("ARMT")
and Louis R. Capece, Jr. ("Capece").
In consideration of the mutual covenants and agreements contained in this
Agreement, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, intending to be legally bound hereby, the
parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement:
"ACQUISITION" shall mean the acquisition of Shareholders' shares of common
stock in Air Response Entities (which accounts for 100% of Shareholders'
holdings in Air Response Entities) all upon the terms and subject to the
conditions set forth in this Agreement.
"ACQUISITION SHARES" shall have the meaning ascribed to it in Section 3.1
hereof.
"AIR RESPONSE ENTITIES SHARES" shall mean all of the issued and
outstanding shares of capital stock of Air Response Entities.
"AGREEMENT" means this Stock Exchange Agreement, and all Schedules and
Exhibits hereto.
"ASSETS" means all of the assets of Air Response Entities and its
subsidiaries, of every kind and nature.
"AUTOMATIC TERMINATION DATE" shall have the meaning ascribed to it in
Section 9.1 hereof.
"BOARD APPROVAL" shall mean Cyber-Care Board Approval.
"BUSINESS DAY" shall mean any weekday, excluding any legal holiday
observed pursuant to the United States federal law or the laws of the State of
Florida.
"CERTIFICATE(S)" shall have the meaning ascribed to it in Section 3.4
hereof.
"CLOSING" and "CLOSING DATE" shall have the meanings ascribed to such
terms in Section 3.1 hereof.
"CLOSING DOCUMENTS" means this Agreement, a management agreement and all
other documents to be executed and delivered either simultaneously herewith or
at Closing in connection with the Transactions.
"CODE" means the Internal Revenue Code of 1986, as amended.
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"CYBER-CARE BOARD APPROVAL" shall mean that the Board of Directors of
Cyber-Care, at a meeting duly called and held, has (i) determined that the
Acquisition is advisable and in the best interest of Cyber-Care and approved it,
(ii) duly approved, authorized and ratified the Acquisition and the consummation
of the Transactions and (iii) duly approved, authorized and ratified the
execution and delivery of this Agreement and each of the Closing Documents.
"CYBER-CARE SHARES" shall mean common stock of Cyber-Care, Inc. owned
and held by Louis Capece, Jr.
"EFFECTIVE TIME" shall have the meaning ascribed to it in Section 2.2
hereof.
"EXCHANGE ACT" shall mean the Securities and Exchange Act of 1934, as
amended, and all regulations promulgated pursuant thereto.
"EXCHANGE RATIO" shall have the meaning ascribed to it in Section 3.1
hereof.
"FLORIDA ACT" shall mean the Florida Business Corporations Act.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time, and applied consistently with those used in the
preparation of financial statements.
"GOVERNMENTAL AUTHORITY" shall include any and all governmental or
quasi-governmental bodies, agencies, bureaus, departments, boards, commissions,
instrumentalities or other entities having or asserting jurisdiction over any of
the parties, as applicable.
"IRS" shall mean the Internal Revenue Service.
"MANAGEMENT" shall mean the provision of services by Cyber-Care or its
designee pursuant to a Management Agreement executed by the parties.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon, or in, or
circumstances reasonably likely to result in, a material adverse change in (i)
the business, assets, liabilities, operations, results of operations, properties
(including intangible properties), regulatory status or condition (financial or
otherwise) of the specified party, (ii) the legality, validity, binding effect
or enforceability of this Agreement, or (iii) the ability of a party to perform
its respective obligations under this Agreement.
"NOTE" shall mean that certain Promissory Note as defined in Section 3.2.
"OUT-OF-POCKET COSTS" shall mean, with respect to each party, all fees,
expenses, and other costs that are directly related to the Transactions
contemplated by this Agreement.
"PERSON" means an individual, corporation, limited liability company,
limited liability partnership, limited partnership, trust, joint venture,
association or unincorporated organization or a Governmental Authority.
"SCHEDULE DELIVERY DATE" shall mean the date upon which each party has
delivered each and all of their respective Schedules and Exhibits to each other,
and, in the exercise of their respective sole discretion, each has acknowledged
in writing their satisfaction with the results of their respective due diligence
investigations and their mutual consent as to the contents of the Schedules and
Exhibits to be attached hereto and the incorporation of such Schedules and
Exhibits into this Agreement, which date in
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no event shall be later than 24 hours prior to the Closing, unless otherwise
agreed to in writing by the parties.
"SEC" shall mean the U.S. Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
all regulations promulgated thereunder.
"TRANSACTIONS" means the transactions contemplated by this Agreement,
including but not limited to, the Acquisition and the Management of the Air
Response Entities by Shareholders after Closing.
ARTICLE 2
THE ACQUISITION
2.1 THE ACQUISITION.
At the Effective Time and subject to and upon the terms and conditions of
this Agreement, ARMT shall acquire from Shareholders the Air Response Entities
Shares and enter into a Management Agreement of the Air Response Entities.
2.2 EFFECTIVE TIME.
Notwithstanding the Closing Date, the Transactions contemplated by this
Agreement shall be effective as of September 2, 2000 (the "Effective Time").
ARTICLE 3
ACQUISITION CONSIDERATION
3.1 PURCHASE OF STOCK.
Subject to adjustment as hereinafter set forth or as otherwise agreed by
the parties, the manner and basis of ARMT purchasing the Air Response Entities
Shares shall be as set forth herein. In exchange for receipt of the Air Response
Entities Shares from Shareholders, ARMT shall pay to Shareholders the purchase
price of Eight Million Five Hundred Thousand Dollars ($8,500,000.00) ("Purchase
Price"), payable as follows: (a) Three Hundred Forty Five Thousand Nine Hundred
Twenty One (345,921) shares of Cyber-Care voting common stock price based upon a
price of Six Dollars, Ninety-Three and Eight-Tenths of a Cent ($ 6.938) per
share, representing a share value as of the date of closing ("Closing Date")
equal to Two Million Four Hundred Thousand Dollars ($2,400,000.00) ("Acquisition
Shares"), and (b) a Note in favor of Cyber-Care in the amount of Six Million One
Hundred Thousand Dollars ($6,100,000.00) under the terms set forth in Section
3.2 below. The Shareholders acknowledge receipt of a portion of the Purchase
Price paid in Cyber-Care Shares in the amount of 142,857 shares ("Partial
Deposit"). Such Partial Deposit, has been increased by that number of Cyber-Care
Shares required to bring the value of such deposit to One Million Dollars
($1,000,000.00) ("the Deposit"). The Deposit is non-refundable after Closing
Date. The Acquisition Shares less the Deposit shall equal the Adjusted
Acquisition Shares. After the Effective Time, all ownership interest in Air
Response Entities shall be vested in ARMT and it shall have all rights in
respect thereof and Shareholders shall not have any rights other than as set
forth herein.
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(a) Adjusted Acquisition Shares
Cyber-Care shall deposit in escrow the certificate for the Adjusted
Acquisition Shares in accordance with the Escrow Agreement attached hereto as
Exhibit 3.1 (a).
(b) Escrow Shares
In addition to the foregoing, but not as an element of the Purchase
Price, Capece shall deposit in escrow One Hundred Thousand shares of Cyber-Care
voting common stock, in accordance with the Escrow Agreement attached hereto as
Exhibit 3.1(b) (the "Escrow Shares").
3.2 DIVIDEND AND PROMISSORY NOTES.
(a) Dividend Note
ARMT shall deliver at Closing an executed note in favor of Chase
Manhattan Bank, as escrow agent for Cyber-Care shareholders an executed note,
substantially in the form attached hereto as Exhibit 3.2(a) in the amount of
$305,000, which shall bear interest at a rate of ten percent (10%) per annum and
shall have the same terms and conditions as the Note described in section
3.2(b).
(b) Promissory Note
ARMT shall deliver at Closing an executed note in favor of
Cyber-Care, substantially in the form attached hereto as Exhibit 3.2(b), in the
amount of $5,795,000.00, which shall bear interest at a rate of ten percent
(10%) per annum ("Note"). ARMT shall deliver at Closing such other documents as
reasonably requested by the Shareholders to evidence and protect their interests
and rights with respect to the Note. The Note shall be collateralized by a
general blanket pledge of all of the assets of the Air Response Entities and
shall represent a security interest in all such assets upon the terms and
conditions as set forth in this Agreement. ARMT agrees to pay the Note as set
forth below.
(c) Revolving Credit Note
ARMT shall deliver at Closing an executed note in favor of
Cyber-Care, substantially in the form attached hereto as Exhibit 3.2(c), which
shall bear interest at a rate of ten percent (10%) per annum.
(a) Payments.
ARMT shall pay or cause to be paid in immediately available funds an
amount due under the Note representing:
(i) interest only on the ninetieth (90) day after Closing,
(ii) interest only on the one hundred eightieth day (180)
after Closing,
(iii) any and all unpaid interest and all outstanding
principle on the earlier of the two hundred fortieth day
(240) after Closing ("Balloon Payment Date"), unless
extended in accordance with the terms set forth below or
the date on which ARMT receives financing for the
acquisition of the Air Response Entities.
(b) Payment Extension.
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The Balloon Payment Date may be extended upon the following terms and
conditions:
(i) Provided that ARMT is not in default on the Note or under any
of the terms and conditions in this Agreement or any agreement
referenced herein and attached hereto, and further provided
that ARMT provides written notice to Cyber-Care at least
thirty days prior to the Balloon Payment Date, and further
provided that ARMT pays to Cyber-Care on the Balloon Payment
Date principal due under the Note in the amount of One Million
Five Hundred Thousand Dollars ($1,500,000.00) in immediately
available funds, in addition to payment of all interest then
due, then Cyber-Care shall agree to extend the Balloon Payment
Date to the three hundred thirtieth (330) day after Closing
("First Balloon Extension Date").
(ii) Thereafter, provided that ARMT is not in default on the Note
or under any of the terms and conditions in this Agreement or
any agreement referenced herein and attached hereto, and
provided that ARMT provides written notice to Cyber-Care at
least thirty days prior to the First Balloon Extension Date,
and provided that ARMT pays to Cyber-Care on the First Balloon
Extension Date principal due under the Note in the amount of
One Million Five Hundred Thousand Dollars ($1,500,000.00) in
immediately available funds, in addition to payment of all
interest then due, then Cyber-Care hereby agrees to extend the
First Balloon Extension Date to the three hundred ninetieth
(390) day after Closing ("Second Balloon Extension Date").
(iii) All outstanding principal and unpaid accrued interest on the
Note shall be paid by ARMT no later than the Second Balloon
Extension Date. Failure to pay the Note in accordance with the
terms and conditions set forth herein or therein shall result
in a default on the Note.
(c) Default
(i) Upon the occurrence of a default under any of the Notes or
this Agreement, and within ten days (10) after written notice
of such default to ARMT, ARMT shall have a period of ten days
(10) to cure such default, giving notice of such cure to
Shareholders. In such case if the default is not cured within
such specified time period, then the ownership of ARMT shall
"vest" in Shareholders and the business shall be turned over
to the Shareholders ("Turn Over Date"). Capece shall cooperate
with Shareholders on any reasonable request for a two week
transition period, at the expense of Shareholders, following
the Turn Over Date. On the Turnover Date, Louis R. Capece,
Jr., Dennis Rommel, and the directors of ARMT shall have
vacated the premises of ARMT, and ARMT shall provide a
certificate to Shareholders that no tangible or intangible
property of ARMT has been removed from ARMT's premises by
Capece or Rommel, except in the ordinary course of business.
To effectuate the foregoing, ARMT shall deliver to the
Shareholders the undated written resignations of Capece,
Rommel, and the directors of
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ARMT. ARMT shall deliver to Shareholder such a resignation
regarding any directors elected or appointed after the
Closing. Shareholders agree to hold such resignations in
escrow until the Turn Over Date. At the Turn Over Date,
Shareholders are hereby authorized to date such resignations
as of the Turn Over Date and to release such resignations from
escrow.
(ii) As of the Closing Date, the value of the Air Response Entities
(Value of the Business) was determined to be Eight Million
Five Hundred Thousand Dollars ($8,500,000.00) (" First
Valuation") by agreement of the parties hereto. Such value was
determined by utilizing Earnings Before Interest, Taxes,
Depreciation and Amortization ("EBITDA") for the 12 month
period ending on August 31, 2000, or approximately $2,290,000,
multiplied by 3.71 ("Earnings Multiple").
(iii) In the event that ARMT turns over the business to the
Shareholders in accordance with this Section 3.2(c), The Value
of the Business shall be determined as of the Turn Over Date
(the Second Valuation) by utilizing EBITDA for the 12 month
period ending on last day of the month next preceding the Turn
Over Date multiplied by the Earnings Multiple.
(iv) Shareholders will maintain on behalf of Air Response for the
benefit of ARMT its current receivable financing arrangement
("DVI"). If the amount of outstanding debt for the DVI and the
Cyber-Care Funds, if any, as of the Turn Over Date are the
same or less than the amount of outstanding debt for the DVI
and the Cyber-Care Funds, if any, as of the Closing Date, the
Adjusted Acquisition Shares shall be returned to Capece and
the Escrow Shares shall be returned to Capece.
(v) If the amount of outstanding debt for the DVI, and the
Cyber-Care Funds, if any, as of the Turn Over Date is greater
than the outstanding debt for the DVI, and the Cyber-Care
Funds as of the Closing Date (the " Shortfall"), the number of
Adjusted Acquisition Shares having the value of the Shortfall
shall be retained by Cyber-Care and the remaining Adjusted
Acquisition Shares, if any, shall be returned to Capece, along
with the Escrow Shares. If the Second Shortfall is greater
than the value of the Adjusted Acquisition Shares, such number
of the Escrow Shares equaling the uncovered Second Shortfall
shall be retained by Cyber-Care, and the remainder of the
Escrow Shares, if any, shall be returned to Capece.
(vi) If the Second Valuation is the same or greater that the First
Valuation, the Escrow Shares shall be returned to Capece. If
the Second Valuation is lower than the First Valuation, (the
"Second Shortfall") the number of Escrow Shares having the
value of the Second Shortfall shall be retained by Cyber-Care
and the remaining Adjusted Acquisition Shares, if any, shall
be returned to Capece, along with the Escrow Shares. If the
Second Shortfall is greater than the value of the Adjusted
Acquisition Shares, such number of the Escrow Shares equaling
the uncovered Second Shortfall shall be retained by
Cyber-Care, and the remainder of the Escrow Shares, if any,
shall be returned to Capece.
(vii) In no event shall Capece be required to provide additional
shares or funds should the Shortfall and the Second Shortfall
have a value in excess of the Adjusted Acquisition Shares and
the Escrow Shares.
(viii) Since Capece has contributed the Acquisition Shares to the
Shareholders on behalf of ARMT, in the event the business is
turned over to the
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Shareholders in accordance with the foregoing, and in the
event there are Acquisition Shares and/or Escrow Shares to be
returned to Capece, they shall be delivered to Capece, in
Capece's name, not later than ten (10) business days after the
Second Valuation has been completed.
(ix) In the event that ARMT does not turn over the business in
accordance with this Section 3.2 (c) by the Turn Over Date and
the Shareholders have suffered damages due to the default by
ARMT of the terms and conditions of this Agreement, including
the Management Agreement or Business Plan, then the
Shareholders shall be entitled to retain all of the
Acquisition Shares and Escrow Shares as damages. This
provision shall in no way be construed to be the sole remedy
of the Shareholders against Capece or ARMT pursuant to Section
3.2(c) (ix).
3.3 OPTIONS AND WARRANTS.
There are no options, warrants and other securities owned by Shareholders
or their affiliates that might otherwise be converted for a capital or other
interest in Air Response Entities which are outstanding at the Effective Time.
3.4 DELIVERY OF SHARES.
At the Closing, Shareholders will deliver the Air Response Entities Shares
to ARMT duly endorsed in blank. and immediately thereafter ARMT will deliver the
Shares of ARMT to Shareholders duly endorsed in blank and Shareholders shall
immediately deliver the shares of ARMT to the Trustee under that certain
Security and Pledge Agreement of even date herewith, Exhibit 3.4.
3.5 RELEASE OF GUARANTEES.
ARMT shall use its reasonable efforts to obtain a release on commercially
reasonable terms, of the Cyber-Care guarantees on all Air Response debts within
thirty (30) days after Closing. If necessary to obtain such a release from
Textron regarding the aircraft, Capece shall offer to provide his personal
guarantee to Textron on commercially reasonable terms acceptable to Capece. In
the event the ownership of ARMT vests in Shareholders pursuant to Section 3.2
(c) (i), Shareholders will use its reasonable efforts to obtain the release of
Capece's guarantee to Textron, if any, on commercially reasonable terms, within
thirty (30) days after such vesting.
3.6 FINANCING.
Cyber-Care agrees to assist the ARMT with receivables financing
arrangements for the period commencing with Closing and terminating no later
than December 31, 2000. Cyber-Care will maintain on behalf of Air Response for
use by ARMT its current receivables financing arrangement with DVI ("DVI
Funding"). The DVI Funding amount available for use by ARMT shall not exceed Two
Million Five Hundred Thousand Dollars ($2,500,000.00). In addition to the DVI
facility, and provided that there are insufficient amounts then available
through such facility, Cyber-Care will make available to the ARMT, for use by
Air Response in accordance with the terms of the Management Agreement,
additional funding in an amount not to exceed One Million Two Hundred Thousand
Dollars ($1,200,000.00) ("Cyber-Care Funding"). The DVI Funding and the
Cyber-Care Funding shall be made available to the ARMT within three business
days after receipt by Cyber-Care of funding requests made in accordance with the
Management Agreement.
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At Closing ARMT will execute a promissory note for an amount to include
(i) the Cyber-Care inter-company debt for Air Response as of Closing plus (ii)
the amount due for the DVI Funding on account of Air Response as of Closing.
Additionally, at Closing, ARMT will execute a future advance promissory
note for (i) amounts advanced through Cyber-Care Funding plus (ii) any
additional amounts advanced through the DVI Funding on account of ARMT after the
date of Closing.
Both notes shall be collateralized by the Adjusted Acquisition Shares and
the Escrow Shares and shall be due on the earlier of (i) the Balloon Payment
Date (including any authorized extensions thereunder) or (ii) the date of
Default. Additionally, ARMT shall payoff the amount due to DVI on account of
ARMT on or before the date of termination of the DVI Funding.
3.7 CLOSING.
The closing of the Transactions (the "CLOSING") shall be effective on
September 2, 2000 and shall take place on September 15, 2000. Each of the
parties will take all such reasonable and lawful action as may be necessary or
appropriate in order to effectuate the Acquisition as promptly as possible
subject to the satisfaction of the closing conditions set forth in Articles 7
and 8. Upon Closing, each party will issue and deliver in the manner provided in
Articles 2 and 3 hereof the applicable stock certificates
ARTICLE 4
ADDITIONAL COVENANTS
4.1 CONDUCT OF BUSINESS BY AIR RESPONSE ENTITIES PENDING CLOSING.
Air Response Entities and Shareholders covenant and agree that, except as
otherwise set forth in this Agreement, between the date of this Agreement and
the Closing, if any, the business of Air Response Entities shall be conducted
only in, and neither party shall take any action except in, the ordinary course
of business and in a manner consistent with past ordinary business practice; and
Air Response Entities and Shareholders will use their commercially reasonable
efforts to preserve intact Air Response Entities' business organization, to keep
available the services of its present officers, employees and consultants and to
preserve its present relationships with customers, suppliers and other persons
with which they have significant business relations.
4.2 EXPENSES.
All of the expenses incurred by each party to this Agreement, including,
without limitation, all fees and expenses of agents, representatives, brokers,
counsel and accountants, shall be borne solely by such party.
4.3 NOTIFICATION OF CERTAIN MATTERS.
(a) ARMT shall give prompt written notice to Shareholders of the
following:
(i) the occurrence or nonoccurrence of any event whose
occurrence or nonoccurrence would be reasonably likely
to cause either (A) any representation or warranty of
ARMT contained in this Agreement to be untrue or
inaccurate in any material respect at
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any time from the date hereof to the Closing (assuming
that each representation and warranty was re-affirmed as
of each day between the date hereof and the Closing
Date, inclusive), or (B) any Material Adverse Effect; or
(ii) any material failure of ARMT or any officer, director,
employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or
satisfied by it hereunder.
(b) Shareholders shall give prompt written notice to ARMT of the
following:
(i) the occurrence or nonoccurrence of any event whose
occurrence or nonoccurrence would be reasonably likely
to cause either (A) any representation or warranty of
Shareholders or Air Response Entities contained in this
Agreement to be untrue or inaccurate in any material
respect at any time from the date hereof to the Closing
(assuming that each representation and warranty was re-
affirmed as of each day between the date hereof and the
Closing Date, inclusive); or (B) any Material Adverse
Effect;
(ii) any material failure of Shareholders, Air Response
Entities or any employee or agent thereof, to comply
with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder.
(c) Notwithstanding the foregoing, the delivery of any notice
pursuant to this Section shall not waive or release Capece, ARMT, Air Response
Entities or Shareholders, as the case may be, from their representations,
warranties, covenants or agreements under this Agreement, except as they may be
modified and approved in accordance with this Agreement.
4.4 PUBLIC ANNOUNCEMENTS.
Except for and to the extent of any public announcement or disclosures
relating to the Transactions as may be required by law, or as provided in this
Section 4.4, ARMT and Shareholders agree that until the consummation of the
Transactions or the termination of this Agreement, as the case may be, each
party will not, and will direct its directors, officers, employees,
representatives and agents who have knowledge of the Transaction not to,
disclose to any Person who is not a participant in discussions concerning the
Transactions (other than Persons whose consent is required to be obtained
hereunder), any of the terms, conditions or other facts with respect to the
Transactions.
4.5 CONFIDENTIALITY.
In connection with this Agreement, the parties may have access to
information that is nonpublic, confidential or proprietary in nature. All of
such information, in whole or in part, together with any analyses, compilations,
studies or other documents prepared by any party, which contain or otherwise
reflect any such information is hereinafter referred to as the "Information".
Each party hereby agrees that the Information will be kept confidential and
shall not, without the prior mutual written consent of the parties, be
disclosed, in any manner whatsoever, in whole or in part, and shall not be used
by any party following the termination of this Agreement. Each party agrees to
transmit the Information only to its respective employees and representatives
who need to know the Information for the purposes of evaluating the transactions
contemplated by this Agreement, and who shall agree to be bound by the terms and
conditions of this Agreement with respect to this provision. In any event, each
party shall be
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responsible for any breach of this Agreement by its respective employees or
representatives. If the transactions contemplated hereunder are not consummated,
(a) the parties shall return the Information to the other promptly upon request
and no party shall retain any copies, and (b) for a period of two years after
the execution hereof (i) neither party shall solicit or hire any employee of the
other party provided such employee is employed at the time of such solicitation
or hiring, and (ii) neither party shall solicit or lease the premise operated by
the other party. In the event any party becomes legally compelled to disclose
any of the Information, such party will provide to the other party prompt notice
so that each other party may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this Agreement. In the event that
such protective order or other remedy is not obtained, or compliance with the
provisions of this Agreement is waived, a party will furnish only that portion
of the Information which is legally required, and to the extent requested by the
other party, and at such party's expense will exercise its best efforts to
obtain a protective order or other reliable assurance that confidential
treatment will be accorded the Information. The term "Information" does not
include information which (i) was known to any party about another party prior
to its disclosure, provided that such information was lawfully obtained or
developed without violation of a confidentiality agreement, (ii) becomes
generally available to the public other than as a result of a disclosure by a
party in violation of this Agreement, or (iii) becomes available from a source
other than a party to this Agreement, if the source is not bound by a
confidentiality agreement and such source lawfully obtained such information.
4.6 CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS.
Subject to compliance with applicable law, Shareholders and ARMT will (a)
cooperate with one another (i) in promptly determining whether any filings are
required to be made or consents, approvals, permits or authorizations are
required to be obtained under any federal, state or foreign law or regulation
and (ii) in promptly making any such filings, furnishing information required in
connection therewith and seeking timely to obtain any such consents, approvals,
permits or authorization and (b) provide one another with copies of all filings
made by such party with any governmental authority in connection with this
Agreement.
4.7 INDEMNIFICATION.
At the Closing, Shareholders shall deliver an indemnification to ARMT,
substantially in the form attached hereto as Exhibit 4.7 (a) and ARMT shall
deliver an indemnification to Shareholders, substantially in the form attached
hereto as Exhibit 4.7 (b).
4.8 MANAGEMENT AGREEMENT.
At the Closing, the Shareholders and ARMT shall execute and deliver a
Management Agreement substantially in the form attached hereto as Exhibit 4.8.
4.9 FURTHER ASSURANCES.
Each party covenants and agrees that, following the Closing, it shall
cooperate with the other parties as reasonably requested and at such requesting
party's expense when such cost is more than nominal, in those matters requiring
cooperation, including but not limited to, defense of claims relating to the Air
Response Entities.
4.10 FILING OF TAX RETURNS.
(a) Shareholders shall prepare and timely file with the appropriate
authorities at its expense under the direction and control of the Shareholders
and by accountants selected by them all tax
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returns required to be filed for the Air Response Entities for taxable periods
ending on or prior to the Closing Date other than any one day Return including
only the Closing Date (the "One Day C Return"). All such Tax Returns shall be
prepared and filed in a manner reasonably consistent with prior tax returns.
(b) ARMT shall be responsible for preparing and filing all tax
returns of the Air Response Entities for Tax periods beginning before and ending
after the Closing Date ("Straddle Periods") and the One Day C Return; provided,
however, that a draft of all such tax returns shall be provided to the
Shareholders at least 20 days prior to the deadline for filing the tax return in
question, and such tax return shall be subject to the Shareholders' review and
approval, which approval shall not be unreasonably withheld or delayed.
(c) All other Tax Returns shall be filed, to the extent permitted by
applicable law, on the basis that the relevant taxable period ended as of the
Closing Date (or the date prior to the Closing Date if permitted by applicable
law), unless the relevant governmental entity will not accept a tax return filed
on that basis. To the extent any governmental entity requires the consent of the
Shareholders, ARMT or the Air Response Entities, or their Affiliates to filing
on such basis, such parties shall provide such consent. ARMT shall not, and
shall not permit the Air Response Entities to, amend any tax returns for periods
ending on or prior to the Closing Date without the Shareholders' prior written
consent.
4.11 FUTURE TAX CONTESTS.
(a) ARMT and the Shareholders shall promptly notify each other in
writing upon receipt by them or their affiliates of notice of any pending or
threatened audit or assessment with respect to federal, state and local income
taxes for any periods ending on or prior to the Closing Date. The Shareholders
shall have control of such audit and related proceedings, the costs and expenses
of which shall be borne by the Shareholders; provided, however, that the
Shareholders shall provide ARMT with written notice of any proposed settlement
or compromise of any such audit or proceedings and shall not enter into any such
settlement or compromise which could have a material adverse effect on ARMT or
the Air Response Entities without ARMT's prior written consent, which consent
shall not be unreasonably withheld.
(b) ARMT shall be responsible for handling all tax matters relating
to the Air Response Entities, including dealing with and resolving audit issues,
for all Straddle Periods and the One Day C Return; provided, however, that (i)
ARMT shall promptly notify the Shareholders in writing as to any examination by
or disputes with any taxing authorities that relate to such periods, and (ii)
the Shareholders shall be kept informed and allowed, at their expense, to
participate therein. No tax matter for such period may be resolved without the
written consent of the Shareholders (which consent shall not be unreasonably
withheld) if the resolution of such matter would have an adverse impact on the
Shareholders, including, but not limited to, any indemnification obligations
under this Agreement.
(c) For purposes of indemnification under the Agreement, in the case
of any taxes that are imposed on a periodic basis and are payable for a Straddle
Period, the portion of such tax which relates to the portion of such taxable
period ending on the Closing Date shall (x) in the case of any taxes other than
taxes based upon or related to income or receipts, be deemed to be the amount of
such tax for the entire taxable period ending on the Closing Date and the
denominator of which is the number of days in the entire taxable period, and (y)
in the case of any tax based upon or related to income or receipts, be deemed
equal to the amount which would be payable if the relevant taxable period ended
on the Closing Date. Any credits relating to a taxable period that begins before
and ends after the Closing Date shall be taken into account as though the
relevant taxable period ended on the Closing Date. All determinations necessary
to give effect to the foregoing allocations shall be made in a manner consistent
with prior practices of the Air Response Entities. In no event shall the
Shareholders be liable for indemnification
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under this Agreement for any taxes with respect to (i) taxes due with respect to
the One Day C Return or (ii) taxes arising on account of any Section 481 of the
Code adjustments resulting from the transactions contemplated hereby.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ARMT
In order to induce Shareholders to enter into this Agreement and
consummate the Transactions, ARMT hereby represents and warrants the following
to Shareholders as of the Schedule Delivery Date, each of which representations
and warranties shall be material to and relied upon by Shareholders and shall be
deemed remade on and as of the date of the Closing Date:
5.1 ORGANIZATION AND AUTHORITY.
ARMT is a corporation duly organized and validly existing under the laws
of the State of Delaware. ARMT has all necessary corporate power and authority
to own, lease and operate its properties and conduct its business as it is
currently being conducted.
5.2 CORPORATE POWER AND AUTHORITY; DUE AUTHORIZATION.
The Board of Directors of ARMT has, on or prior to the date of this
Agreement at a meeting duly called and held and not subsequently rescinded or
modified in any way, (i) unanimously adopted this Agreement in accordance with
the laws of its state of incorporation, and (ii) taken all actions necessary to
consummate the Agreement and the transactions contemplated hereby.
ARMT has all requisite corporate power and authority to enter into this
Agreement and, subject to the Transactions contemplated hereby and the issuance
of the Acquisition Shares in connection with the Acquisition, to consummate the
Transactions contemplated hereby. The execution and delivery of this Agreement
by ARMT and the consummation by ARMT of the Transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of ARMT
and the filing of appropriate Acquisition documents, if any, as required by the
laws of its state of incorporation. This Agreement constitutes the valid and
binding obligation of ARMT enforceable against it in accordance with its terms
except as the enforceability thereof may be limited by applicable bankruptcy,
insolvency or other similar laws relating to the enforcement of creditors'
rights generally and the application of general rules of equity. The Acquisition
and all of the Transactions have been duly authorized by the Board of Directors
of ARMT.
5.3 NO CONFLICT; REQUIRED CONSENTS.
Exclusive of ARMT Board Approval and assuming the appropriate filings and
mailings are made by ARMT to effectuate the Acquisition, the execution and
delivery by ARMT of this Agreement and the Closing Documents and the
consummation by ARMT of the Transactions do not and will not, (a) require the
consent, approval or action of, or any filing or notice to, any corporation,
firm, Person or other entity or any public, governmental or judicial authority
(except for such consents, approvals, actions, filing or notices the failure of
which to make or obtain will not in the aggregate have a Material Adverse
Effect);
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(b) violate in any material respect the terms of any material instrument,
document or agreement to which ARMT is a party, or by which ARMT is bound, or be
in conflict in any material respect with, result in a material breach of or
constitute (upon the giving of notice or lapse of time or both) a material
default under any such instrument, document or agreement; (c) violate ARMT's
Articles of Incorporation or Bylaws; or (d) violate any order, writ, injunction,
decree, judgment, ruling, law, rule or regulation of any federal, state, county,
municipal, or foreign court or governmental authority applicable to ARMT.
5.4 ADVISORS FEES.
Neither ARMT nor any of its subsidiaries or any affiliate thereof has
retained or utilized the services of any advisor, broker, finder or
intermediary, or paid or agreed to pay any fee or commission to any other Person
or entity for or on account of the Transactions.
5.5 SURVIVAL.
The representations and warranties contained in this Article 5 shall
survive the Closing for a period of one year.
ARTICLE 5B
Capece, a principal of ARMT, who has been managing the Air Response
Entities since April 1, 1999, represents and warrants to the Shareholders that
he does not know of any reason why the representations and warranties of the
Shareholders hereunder are not true and correct in all material respects. This
representation and warranty is made by Capece in reliance, and conditioned, upon
the representations and warranties made by the Air Response Entities and the
Shareholders and shall survive the Closing for a period of one year.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
OF AIR RESPONSE ENTITIES AND SHAREHOLDERS
Air Response Entities and the Shareholders, jointly and severally, make
the following representations and warranties to ARMT and Capece, each of which
is true and correct, to the best of their knowledge, on the date hereof, shall
remain true and correct to and including the Effective Date, and shall survive
the Closing of the transactions provided for herein for a period of one year.
Notwithstanding anything to the contrary herein, all representations and
warranties of the Air Response Entities and the Shareholders are made in
reliance, and conditioned, upon the representations and warranties made by Louis
Capece, Jr. herein in Article 5B.
6.1 AIR RESPONSE ENTITIES SHARES.
The Shareholders are the owners of the Air Response Entities Shares free
and clear of any direct or indirect claims, liens, security interests, charges,
pledges or encumbrances of any nature whatsoever and will be free of such
claims, liens, security interests, charges, pledges or encumbrances as of the
Effective Date. All of the Air Response Entities Shares are validly issued to
the Shareholders fully paid and non-assessable. There are no existing options,
calls, rights or commitments of any character relating to the Air Response
Entities Shares or any Air Response Entities securities of any kind.
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6.2 ORGANIZATION.
(a) Air Response North, Inc. is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida,
(b) Global Air Rescue, Inc. is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, (c) Global Air
Charter, Inc. is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida, and each of the foregoing
entities is validly qualified and licensed in each jurisdiction wherein the
character of the property owned or leased by it, or the nature of its business,
makes such licensing and/or qualification necessary other than as set forth in
SCHEDULE 6.2 (A). Accurate, current and complete copies of the Articles of
Incorporation and Bylaws of the Air Response Entities are attached hereto as
SCHEDULE 6.2 (B).
6.3 CAPITALIZATION.
The authorized capital stock of (a) Air Response North, Inc. consists of
One Million (1,000,000) shares of common stock, with a par value of $0.01 per
share, of which One Thousand are issued and outstanding, (b) Global Air Rescue,
Inc. consists of 1500 shares of common stock, no par value per share, of which
1500 are issued and outstanding, (c) Global Air Charter, Inc. consists of 7500
shares of commons stock, no par value per share, of which 7500 are issued and
outstanding. No shares of capital stock or other equity securities of Air
Response Entities are issued, reserved for issuance or outstanding. All
outstanding shares of capital stock of Air Response Entities are duly
authorized, validly issued, fully paid and non-assessable and, not subject to
preemptive rights. There are no outstanding bonds, debentures, notes or other
indebtedness or other securities of Air Response Entities having the right to
vote (or convertible into, or exchangeable for, securities having the right to
vote) on any matters on which Shareholders of Air Response Entities may vote.
Except as set forth above, there are no outstanding securities, options,
warrants, calls, rights, commitments, agreements, arrangements or undertakings
of any kind to which Air Response Entities is a party or by which it is bound
obligating Air Response Entities to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other equity
securities of Air Response Entities or obligating Air Response Entities to
issue, grant, extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. There are no
outstanding contractual obligations, commitments, understandings or arrangements
of Air Response Entities to repurchase, redeem or otherwise acquire or make any
payment in respect of any shares of capital stock of Air Response Entities. A
complete list of security holders of Air Response Entities and their addresses
is attached hereto as SCHEDULE 6.3.
6.4 AUTHORITY AND APPROVAL OF AGREEMENT.
(a) The execution and delivery of this Agreement by Air Response
Entities and the Shareholders and the performance of all Air Response Entities'
and the Shareholders' obligations hereunder have been duly authorized and
approved by all requisite corporate action on the part of Air Response Entities
and the Shareholders pursuant to applicable law. Air Response Entities and the
Shareholders have the power and authority to execute and deliver this Agreement
and to perform all their obligations hereunder.
(b) This Agreement and any other documents, instruments and
agreements executed by Air Response Entities and the Shareholders in connection
herewith constitute the valid and legally binding agreements of Air Response
Entities and the Shareholders, enforceable against Air Response Entities and the
Shareholders in accordance with their terms, except that (i) enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application affecting the enforcement of the rights and
remedies of creditors; and (ii) the availability of equitable remedies may be
limited by equitable principles.
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6.5 NO VIOLATIONS.
Other than as set forth in SCHEDULE 6.5, neither the execution, delivery
nor performance of this Agreement or any other documents, instruments or
agreements executed by the Shareholders and Air Response Entities in connection
herewith, nor the consummation of the transactions contemplated hereby: (a) will
violate any statute, law, ordinance, rule or regulation (collectively, "LAWS")
or any order, writ, injunction, judgment, plan or decree (collectively,
"ORDERS") of any court, arbitrator, department, commission, board, bureau,
agency, authority, instrumentality or other body, whether federal, state,
municipal, foreign or other (collectively, "GOVERNMENT ENTITIES"), (b) will
require any authorization, consent, approval, exemption or other action by or
notice to any Government Entity; (c) subject to obtaining the consents referred
to in this Agreement, will violate or conflict with, or constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a
default) under, or will result in the termination of, or accelerate the
performance required by, or result in the creation of any Lien (as hereinafter
defined) upon any of the assets of Air Response Entities (or the Air Response
Entities Shares) under any term or provision of the Articles of Incorporation or
By-Laws of Air Response Entities or any contract, commitment, understanding,
arrangement, agreement or restriction of any kind or character to which Air
Response Entities or the Shareholders is a party or by which Air Response
Entities or the Shareholders or any of its or their assets or properties may be
bound or affected; or (d) will or could result in the loss or adverse
modification of, or the imposition of any fine or penalty with respect to, any
license, permit or franchise granted or issued to, or otherwise held by or for
the use of, Air Response Entities.
6.6 FINANCIAL STATEMENTS.
Attached hereto as Schedule 6.6 are true and complete copies of the
financial statements of Air Response Entities consisting of the balance sheets
and the related statements of operations and cash flows for (i) the years ended
December 31, 1998 and December 31, 1999, (ii) the six month period ended June
30, 2000 (the "RECENT BALANCE SHEET" and the "RECENT STATEMENT OF OPERATIONS"),
and (iii) the seven month period ended July 31, 2000. Shareholders will provide,
within fifteen business days after Closing, financial statements of the Air
Response Entities for the eight month and twelve month periods ended August 31,
2000. All of such financial statements are true, complete and accurate, have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis, have been prepared in accordance with the books
and records of Air Response Entities, and fairly present, in accordance with
generally accepted accounting principles, the assets, liabilities and financial
position, and the results of operations and cash flows of Air Response Entities
as of the dates and for the years and periods indicated.
6.7 CONDUCT SINCE DATE OF RECENT BALANCE SHEET.
Except for this Agreement and as disclosed in Schedule 6.7 hereto, none of
the following has occurred since the date of the Recent Balance Sheet:
(a) NO ADVERSE CHANGE. Any material adverse change in the financial
condition, assets, liabilities, business, prospects or operations of Air
Response Entities;
(b) NO DAMAGE. Any loss, damage or destruction, whether covered by
insurance or not, affecting Air Response Entities' business or properties;
(c) NO INCREASE IN COMPENSATION. Any increase in the compensation,
salaries or wages payable or to become payable to any employee or agent of Air
Response Entities (including, without
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limitation, any increase or change pursuant to any bonus, pension, profit
sharing, retirement or other plan or commitment), or any bonus or other employee
benefit granted, made or accrued;
(d) NO LABOR DISPUTES. Any labor dispute or disturbance, other than
routine individual grievances which are not material to the business, financial
condition or results of operations of Air Response Entities.
(e) NO COMMITMENTS. Any commitment or transaction by Air Response
Entities (including, without limitation, any borrowing or capital expenditure)
other than in the ordinary course of business consistent with past practice;
(f) NO DIVIDENDS. Any declaration, setting aside, or payment of any
dividend or any other distribution in respect of Air Response Entities' capital
stock; any redemption, purchase or other acquisition by Air Response Entities of
any capital stock of Air Response Entities, or any security relating thereto; or
any other payment to any Shareholders of Air Response Entities as a Shareholder;
(g) NO DISPOSITION OF PROPERTY. Any sale, lease or other transfer or
disposition of any properties or assets of Air Response Entities, except in the
ordinary course of business;
(h) NO INDEBTEDNESS. Any indebtedness for borrowed money incurred,
assumed or guaranteed by Air Response Entities;
(i) NO LIENS. Any mortgage, pledge, lien or encumbrance made on any
of the properties or assets of Air Response Entities;
(j) NO AMENDMENT OF CONTRACTS. Any entering into, amendment or
termination by Air Response Entities of any contract, or any waiver of material
rights thereunder, other than in the ordinary course of business;
(k) LOANS AND ADVANCES. Any loan or advance (other than advances to
employees in the ordinary course of business for travel and entertainment in
accordance with past practice) to any person including, but not limited to, any
Affiliate (for purposes of this Agreement, the term "Affiliate" shall mean and
include all shareholders, directors and officers of Air Response Entities; the
spouse of any such person; any person who would be the heir or descendant of any
such person if he or she were not living; and any entity in which any of the
foregoing has a direct or indirect interest);
(l) CREDIT. Any grant of credit to any customer or distributor on
terms or in amounts more favorable than those which have been extended to such
or similar customers or distributors in the past, any other change in the terms
of any credit heretofore extended, or any other change of Air Response Entities'
policies or practices with respect to the granting of credit; or
(m) NO UNUSUAL EVENTS. Any other event or condition not in the
ordinary course of business of Air Response Entities.
6.8 SUBSIDIARIES.
None of the Air Response Entities have any subsidiaries. The Air Response
Entities do not own or control, directly or indirectly, any capital stock of any
corporation or interest in any partnership, trust or unincorporated association,
or any interest or investment in any other corporation, association or other
business entity.
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6.9 LIABILITIES.
Except as and to the extent specifically disclosed in the Recent Balance
Sheet, or in Schedule 6.9, Air Response Entities does not have any liabilities,
commitments or obligations (secured or unsecured, and whether accrued, absolute,
contingent, direct, indirect or otherwise), other than commercial liabilities
and obligations incurred since the date of the Recent Balance Sheet in the
ordinary course of business and consistent with past practice and none of which
has or will have a material adverse effect on the business, financial condition
or results of operations of Air Response Entities. Except as and to the extent
described in the Recent Balance Sheet or in Schedule 6.9, neither Air Response
Entities nor the Shareholders have knowledge of any basis for the assertion
against Air Response Entities of any liability and neither has knowledge of any
circumstances, conditions, happenings, events or arrangements, contractual or
otherwise, which may give rise to liabilities, except commercial liabilities and
obligations incurred in the ordinary course of Air Response Entities' business
and consistent with past practice.
6.10 TITLE TO AND CONDITION OF PROPERTIES.
(a) MARKETABLE TITLE. Air Response Entities has good and marketable
title to all of Air Response Entities' assets, business and properties,
including, without limitation, all such properties (tangible and intangible)
reflected in the Recent Balance Sheet, except for items disposed of in the
ordinary course of business since the date of such Recent Balance Sheet, free
and clear of all mortgages, liens, (statutory or otherwise) security interests,
claims, pledges, licenses, equities, options, conditional sales contracts,
assessments, levies, easements, covenants, reservations, restrictions,
rights-of-way, exceptions, limitations, charges or encumbrances of any nature
whatsoever (collectively, "LIENS") except those described in Schedule 6.10. None
of Air Response Entities' assets, business or properties are subject to any
restrictions with respect to the transferability thereof, except as otherwise
provided for in Schedule 6.10; and Air Response Entities' title thereto will not
be affected in any way by the transactions contemplated hereby.
(b) CONDITION. All property and assets owned, leased or otherwise
utilized by Air Response Entities, including without way of limitation, all
aircraft, engines on said aircraft and airframes of said aircraft, are in
operating condition, have been maintained consistent with the standards of the
FAA, the manufacturers, any lenders or lessors and as generally followed in the
industry and are sufficient to carry on the business of Air Response Entities as
conducted during the preceding 12 months.
6.11 ACCOUNTS RECEIVABLE.
All accounts receivable of Air Response Entities reflected on the Recent
Balance Sheet, and as incurred in the normal course of business since the date
thereof, represent arm's length sales actually made in the ordinary course of
business and are collectible (net of the reserve shown on the Recent Balance
Sheet for doubtful accounts) in the ordinary course of business Schedule 6.11
contains an aged schedule of accounts receivable which reconciles with the
accounts receivable balance as reflected in the Recent Balance Sheet.
6.12 CONTRACTS AND COMMITMENTS.
(a) REAL PROPERTY LEASES. Except as set forth in Schedule 6.12(a),
Air Response Entities has no leases of real property.
(b) PERSONAL PROPERTY LEASES. Except as set forth in Schedule
6.12(b), Air Response Entities has no leases of personal property involving
consideration or other expenditure in excess of $25,000.00 or involving
performance over a period of more than six (6) months.
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(c) PURCHASE COMMITMENTS. Air Response Entities has no purchase
commitments for inventory items or supplies that, together with amounts on hand,
constitute in excess of six (6) months normal usage.
(d) SALES COMMITMENTS. Except as set forth in Schedule 6.12(d),
attached hereto Air Response Entities has no sales contracts or commitments to
customers which aggregate in excess of $50,000.00 to any one customer (or group
of affiliated customers). Air Response Entities has no sales contracts or
commitments except those made in the ordinary course of business, at arm's
length.
(e) CONTRACTS WITH CERTAIN OTHERS. Air Response Entities has no
agreement, understanding, contract or commitment (written or oral) with any
affiliate, employee, agent, consultant, distributor or dealer that is not
cancelable by Air Response Entities on notice of not longer than 30 days without
liability, penalty or premium of any nature or kind whatsoever except as
identified in Schedule 6.12(e).
(f) POWERS OF ATTORNEY. Air Response Entities has not given a power
of attorney, which is currently in effect, to any person, firm or corporation
for any purpose whatsoever.
(g) LOAN AGREEMENTS. Except as set forth in Schedule 6.12(g), Air
Response Entities is not obligated under any loan agreement, promissory note,
letter of credit, or other evidence of indebtedness as a signatory, guarantor or
otherwise.
(h) GUARANTEES. Except as disclosed on Schedule 6.12(h), Air
Response Entities has not guaranteed the payment or performance of any person,
firm or corporation, agreed to indemnify any person or act as a surety, or
otherwise agreed to be contingent upon or secondarily liable for the obligations
of any person.
(i) GOVERNMENT CONTRACTS. Air Response Entities is not a party to
any contract with any governmental entity.
(j) BURDENSOME OR RESTRICTIVE AGREEMENTS. Air Response Entities is
not a party to nor is it bound by any agreement, deed, lease or other
instrument, which is so burdensome as to materially affect or impair the
operation of Air Response Entities. Without limiting the generality of the
foregoing, no Air Response Entity is a party to or is bound by any agreement
requiring the Air Response Entity to assign any interest in any trade secret or
proprietary information, or prohibiting or restricting the Company from
competing in any business or geographical area or soliciting customers or
otherwise restricting it from carrying on its business anywhere in the world.
(k) OTHER MATERIAL CONTRACTS. Air Response Entities has no lease,
contract or commitment of any nature involving consideration or other
expenditure in excess of $100,000.00, or involving performance over a period of
more than six (6) months, or which is otherwise individually material to the
operations of Air Response Entities, except as described in Schedule 6.12(j), or
in any other Schedule.
(l) NO DEFAULT. Air Response Entities is not in default under any
lease, contract or commitment, nor has any event or omission occurred which
through the passage of time or the giving of notice, or both, would constitute a
default thereunder or cause the acceleration of any of Air Response Entities'
obligations or result in the creation of any Lien on any of the assets owned,
used or occupied by Air Response Entities. To the best of Air Response Entities'
and the Shareholders' knowledge, no third party is in default under any lease,
contract or commitment to which Air Response Entities is a party, nor
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has any event or omission occurred which, through the passage of time or the
giving of notice, or both, would constitute a default thereunder or give rise to
an automatic termination, or the right of discretionary termination, thereof.
6.13 OFFICERS AND DIRECTORS.
Set forth on Schedule 6.13, attached hereto is a complete list of all
officers and directors of Air Response Entities, with office held, directors,
contractors and agents of the Air Response Entities, and the compensation and
all vacation and other benefits they are entitled to receive from the Company.
6.14 LABOR MATTERS.
Except as set forth on Schedule 6.14, Air Response Entities is not a party
to and no employee has made a claim for: (a) any profit sharing, pension,
retirement, deferred compensation, bonus, stock option, stock purchase,
retainer, consulting, health, welfare or incentive plan or agreement or other
employee benefit plan, whether legally binding or not; or other employee benefit
plan, whether legally binding or not; or (b) any plan providing for "fringe
benefits" to its employees, including, but not limited to, vacation, disability,
sick leave, medical, hospitalization and life insurance and other insurance
plans, or related benefits; or (c) any employment agreement. To the best of the
Air Response Entity and the Shareholders' knowledge, no former employee of the
Air Response Entity has any claim against the Company (whether under federal or
state law, any employment agreement or otherwise) on account of or for: (a)
overtime pay; (b) wages or salary for any period; (c) vacation, time-off or pay
in lieu of vacation or time-off; or (d) any violation of any statue, ordinance
or regulation relating to minimum wages or maximum hours of work. To the best of
the Air Response Entity and the Shareholders' knowledge, no person or party
(including, but not limited to, governmental agencies of any kind) has any claim
or basis for any action or proceeding against the Air Response Entity arising
out of any statute, ordinance or regulation relating to discrimination in
employment or to employment practices or occupational safety and health
standards. The Air Response Entities operate a Drug Free Workplace Program
approved by the FAA.
6.15 COMPLIANCE WITH LAWS AND ORDERS.
(a) COMPLIANCE. Except as set forth in Schedule 6.15, Air Response
Entities (including each and all of its operations, practices, properties,
contracts, agreements and assets) is in compliance with all applicable laws and
orders, including, without limitation, those applicable to aviation,
transportation, and the Environmental Laws as hereinafter defined. Except as set
forth in Schedule 6.15, Air Response Entities has not received notice of any
violation or alleged violation of, and to the best of Air Response Entities' and
the Shareholders' knowledge, is subject to no liability for violation of, any
laws or orders. All reports and returns required to be filed by Air Response
Entities with any Government Entity have been filed, and were accurate and
complete when filed. Without limiting the generality of the foregoing:
(i) The operation of Air Response Entities' business as it
is now conducted does not, nor does any condition
existing at any of its facilities, in any manner
constitute a nuisance or other tortuous interference
with the rights of any person or persons in such a
manner as to give rise to or constitute the grounds for
a suit, action, claim or demand by any such person or
persons seeking compensation or damages or seeking to
restrain, enjoin or
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otherwise prohibit any material aspect of the conduct of
such business or materially affect the manner in which
it is now conducted.
(ii) Air Response Entities has made all required payments to
its unemployment compensation reserve accounts with the
appropriate governmental departments of the states where
it is required to maintain such accounts.
(iii) Air Response Entities has timely filed, in a complete
and correct manner, all requisite claims and other
reports required to be filed in connection with all
state, federal and foreign administrative and
governmental authorities due on or before the date
hereof. There are no claims, actions, payment reviews,
or appeals pending or to the best of Air Response
Entities' and the Shareholders' knowledge, threatened
before any commission, board or agency, including,
without limitation, any intermediary or carrier, the
Federal Aviation Authority, Administrator of the Health
Care Financing Administration, the Department of
Transportation, the Department of Health and
Rehabilitative Services, or any other state or federal
agency or compliance matters, which would materially
adversely affect the business, Air Response Entities or
the consummation of the transactions contemplated
hereby.
(iv) Neither the Air Response Entities nor any person or
entity providing services for the Air Response Entities
have engaged in any activities pursuant to any statute
or governmental regulation, whether state, federal or
foreign related to: (a) the making of a false statement
or representation of a material face in any application
for any benefit or payment; (b) knowingly and willfully
making or causing to be made any false statement or
representation of a material fact for use in determining
rights to any benefit or payment; (c) failing to
disclose knowledge of the . occurrence of any event
affecting the right any benefit or payment on its, his
or her own behalf or on behalf of another, with intent
to fraudulently secure such benefit or payment; and (d)
knowingly and willfully soliciting or receiving any
remuneration, kickback, bribe or rebate, directly or
indirectly, overtly or covertly, in cash or in kind, or
offering to pay or receive such remuneration in return
for the right to any benefit or payment.
(v) Air Response Entities has filed when due any and all
material reports and other documentation and reports, if
any, required to be filed with third-party payors and
governmental agencies in compliance with applicable
contractual provisions and/or laws, regulations and
rules.
(b) LICENSES AND PERMITS. Except as set forth in Schedule 6.15(b),
attached hereto, Air Response Entities has all licenses, permits, approvals,
authorizations and consents of all Government Entities and all certification
organizations required for the conduct of the business and operation of its
facilities. All such licenses, permits, approvals, authorizations and consents
are described in Schedule 6.15(b) and are in full force and effect and will not
be affected or made subject to loss, limitation or any obligation to reapply as
a result of the transactions contemplated hereby.. Except as set forth in
Schedule
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6.15(b), Air Response Entities (including its business, operations, properties
and assets) is and has been in compliance with all such permits and licenses,
approvals, authorizations and consents.
(c) ENVIRONMENTAL MATTERS. Applicable Laws relating to pollution or
protection of the environment, including Laws relating to emissions, discharges,
generation, storage, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic, hazardous or petroleum or
petroleum-based substances or wastes ("WASTE") into the environment (including,
without limitation, ambient air, surface water, ground water, land surface or
subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Waste
including, without limitation, the Clean Water Act, the Clean Air Act, the
Resource Conservation and Recovery Act, the Toxic Substances Control Act and the
Comprehensive Environmental Response Compensation Liability Act ("CERCLA"), as
amended, and their state and local counterparts are herein collectively referred
to as the "Environmental Laws". Without limiting the generality of the foregoing
provisions of this Section, to the best of Air Response Entities' and
Shareholders' knowledge and belief, Air Response Entities is in full compliance
with all limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in the
Environmental Laws or contained in any regulations, code, plan, order, decree,
judgment, injunction, notice or demand letter issued, entered, promulgated or
approved thereunder. Except as set forth in Schedule 6.15(c), there is no
Litigation nor, to the best of Air Response Entities' and the Shareholders'
knowledge, any demand, claim, hearing or notice of violation pending or
threatened against Air Response Entities relating in any way to the
Environmental Laws or any Order issued, entered, promulgated or approved
thereunder. Except as set forth in Schedule 6.15(c) to the best of Air Response
Entities' and Shareholders' knowledge and belief there are no past, present or
future events, conditions, circumstances, activities, practices, incidents,
actions, omissions or plans which may interfere with or prevent compliance or
continued compliance with the Environmental Laws or with any Order issued,
entered, promulgated or approved thereunder, or which may give rise to any
liability, including, without limitation, liability under CERCLA or similar
state or local Laws, or otherwise form the basis of any Litigation, hearing,
notice of violation, study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or threatened release
into the environment, of any Waste.
6.16 BOOKS AND RECORDS.
With respect to all material matters occurring since the inception of Air
Response Entities which could have a material adverse effect on Air Response
Entities on or after the date hereof, the minute books and other records of Air
Response Entities contain complete and accurate records of all such material
matters, meetings and other corporate actions of its shareholders and board of
directors.
6.17 TAX MATTERS.
(a) PROVISION FOR TAXES. The provision made for taxes on the Recent
Balance Sheet is and will be sufficient for the payment of all federal, state,
foreign, county, local and other income, ad valorem, excise, profits, franchise,
occupation, property, payroll, sales, use, gross receipts and other taxes (and
any interest and penalties) and assessments, whether or not disputed, at the
date of the Recent Balance Sheet and for all years and periods prior thereto.
Since the date of the Recent Balance Sheet, Air Response Entities has not
incurred any taxes other than taxes incurred in the ordinary course of business
consistent in type and amount with past practices of Air Response Entities.
(b) TAX RETURNS FILED. Except as set forth on Schedule 6.17(b), all
federal, state, foreign, county, local and other tax returns required to be
filed by or on behalf of Air Response Entities have been timely filed and when
filed were true and correct in all material respects, and the taxes shown as due
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thereon were paid or adequately accrued. True and complete copies of all tax
returns or reports filed by Air Response Entities for each of its two (2) most
recent fiscal years have been delivered to ARMT. Air Response Entities has duly
withheld and paid all taxes, which it is required to withhold and pay relating
to salaries and other compensation heretofore paid to the employees of Air
Response Entities.
(c) TAX AUDITS. Air Response Entities has not received from the
Internal Revenue Service or from the tax authorities of any state, county, local
or other jurisdiction any notice of underpayment of taxes or other deficiency
which has not been paid nor any objection to any return or report filed by Air
Response Entities. There are outstanding no agreements or waivers extending the
statutory period of limitations applicable to any tax return or report.
(d) OTHER. Except as set forth in Schedule 6.17(d), Air Response
Entities has not (i) filed any consent or agreement under Section 341(f) of the
Internal Revenue Code of 1986, as amended (the "Code"), (ii) applied for any tax
ruling, or (iii) entered into a closing agreement with any taxing authority (iv)
filed an election under Section 338(g) or Section 338(h)(10) of the Code (nor
has a deemed election under Section 338(e) of the Code occurred), (v) made any
payments or been a party to an agreement (including this Agreement) that under
any circumstances could obligate it to make payments that will not be deductible
because of Section 280G of the Code, or (vi) been a party to any tax allocation
or tax sharing agreement. No Air Response Entity is a "United States real
property holding company: within the meaning of Section 897 of the Code.
6.18 REAL ESTATE.
Air Response Entities own no real estate and have not committed to
purchase any real estate. Air Response Entities have good leasehold interests to
all of the leaseholds described in Schedule 6.18, attached hereto, free and
clear of all mortgages, liens, encumbrances, leases, equities, claims, shares,
easements, rights-of-way, covenants, conditions and restrictions except as
otherwise described in the leasehold agreements or applicable law. Except as
stated on Schedule 6.18, no officer, director, shareholders or employee of Air
Response Entities, or any spouse, child or other relative thereof, owns directly
or indirectly, in whole or in part, any of the leaseholds described thereon.
Each of the leases described on Schedule 6.18 is a valid and binding obligation
of Air Response Entities and enforceable in accordance with its terms and
conditions, and to the best knowledge and belief of Air Response Entities and
the Shareholders, each of such leases is a valid and binding obligation of each
of the other parties thereto. Neither Air Response Entities nor, to the best
knowledge of Air Response Entities and the Shareholders, any other party to any
such lease is in default with respect to any material term or condition thereof,
nor to the best knowledge of Air Response Entities and the Shareholders, has any
event occurred which through the passage of time or the giving of notice, or
both, would constitute a default thereunder, or would cause the acceleration of
any obligation of any party thereto or the creation of a lien or encumbrance
upon any of the assets of Air Response Entities. So far as Air Response Entities
and Shareholders are aware, use of the buildings, fixtures and other
improvements described in Schedule 6.18 as presently conducted is not in
violation of any applicable building code, zoning ordinance or other law or
regulation.
6.19 INSURANCE.
True and correct copies of all policies of property, liability, aircraft
liability, workers compensation, health and other forms of insurance presently
in effect with respect to the business and properties of Air Response Entities,
have heretofore been delivered to ARMT. All such policies are valid, outstanding
and enforceable policies and provide insurance coverage for the properties,
assets and operations of Air Response Entities, of the kinds, in the amounts and
against the risks customarily maintained by organizations similarly situated;
and no such policy (nor any previous policy) provides for
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or is subject to any currently enforceable retroactive rate or premium
adjustment, loss sharing arrangement or other actual or contingent liability
arising wholly or partially out of events arising prior to the date hereof.
Schedule 6.19 indicates each policy as to which (a) the coverage limit has been
reached or (b) the total incurred losses to date equal 75% or more of the
coverage limit. No notice of cancellation or termination has been received with
respect to any such policy, and neither Air Response Entities nor the
Shareholders have knowledge of any act or omission of Air Response Entities
which could result in cancellation of any such policy prior to its scheduled
expiration date. The Air Response Entities have not been refused any insurance
with respect to any aspect of the operations of the Business nor has its
coverage been limited by any insurance carrier to which it has applied for
insurance or with which it has carried insurance during the last three years.
The Air Response Entities have been duly and timely made all claims it has been
entitled to make under each policy of insurance. There is no claim by Air
Response Entities pending under any such policies as to which coverage has been
questioned/disputed by the underwriters of such policies, and neither Air
Response Entities nor the Shareholders know of any basis for denial of any claim
under any such policy. Such policies are sufficient in all material respects for
compliance by the Air Response Entities with all requirements of law and with
the requirements of all material contracts to which any Air Response Entity is a
party.
6.20 PERSONNEL.
Schedule 6.20 attached hereto contains accurate and complete information
as to names and rates of compensation of all personnel of Air Response Entities,
together with information as to any contracts with any such personnel. Air
Response Entities has no pension, profit-sharing, bonus, incentive, insurance or
other employee benefit plans in which any employees of Air Response Entities
participate, except as set forth on Schedule 6.20.
6.21 LITIGATION.
Other than as set forth in Schedule 6.21, Air Response Entities is not a
party to, the subject of, or threatened with any litigation nor to the best
knowledge of Air Response Entities and the Shareholders, is there any basis for
any litigation. Air Response Entities is not contemplating the institution of
any litigation.
6.22 OTHER LIABILITIES.
To the best of Air Response Entities' and the Shareholders' knowledge, no
claim of breach of contract, tort, product liability or other claim, contingent
or otherwise, has been asserted or threatened against Air Response Entities nor
is capable of being asserted by any employee, creditor, claimant or other person
against the Air Response Entities.. To the best of Air Response Entities' and
the Shareholders' knowledge, no event has occurred which could give rise to the
assertion of any such claim by any person.
6.23 CONSENTS.
Except as otherwise provided herein, the execution, delivery and
performance by the Shareholders of this Agreement and the consummation by the
Shareholders of the transactions contemplated hereby does not require any
consent that has not been received prior to the date hereof.
6.24 JUDGMENTS.
There are no outstanding judgments against Air Response Entities. There
are no open workers compensation claims against Air Response Entities, or to the
best of Air Response Entities' and the
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Shareholders' knowledge, any other obligation, fact or circumstance which would
give rise to any right of indemnification on the part of any current or former
Shareholders, director, officer, employee or agent of Air Response Entities, or
any heir or personal representative thereof, against Air Response Entities, or
any successor to the businesses of Air Response Entities.
6.25 BROKERS.
Except as previously disclosed in writing, neither the Shareholders nor
Air Response Entities have any liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which ARMT could become liable or obligated.
6.26 TRADE RIGHTS.
Schedule 6.26 lists all Trade Rights (as defined below) in which Air
Response Entities now has any interest, specifying whether such Trade Rights are
owned, controlled, used or held (under license or otherwise) by Air Response
Entities, and also indicating which of such Trade Rights are registered. Air
Response Entities has not granted any license or made any assignment of any
Trade Right listed on Schedule 6.26, nor does Air Response Entities pay any
royalties or other consideration for the right to use any Trade Rights of
others. As used herein, the term "Trade Rights" shall mean and include: (i) all
trademark rights, business identifiers, trade dress, service marks, trade names
and brand names, all registrations thereof and applications therefore and all
goodwill associated with the foregoing; (ii) all copyrights, copyright
registrations and copyright applications, and all other rights associated with
the foregoing and the underlying works of authorship; (iii) all patents and
patent applications, and all international proprietary rights associated
therewith; (iv) all contracts or agreements granting any right, title, license
or privilege under the intellectual property rights of any third party; (v) all
inventions, mask works and mask work registrations, know-how, discoveries,
improvements, designs, trade secrets, shop and royalty rights, employee
covenants and agreements respecting intellectual property and non-competition
and all other types of intellectual property; and (vi) all claims for
infringement or breach of any of the foregoing.
6.27 BANK ACCOUNTS.
Schedule 6.27 sets forth the names and locations of all banks, trust
companies, savings and loan associations and other financial institutions at
which Air Response Entities maintains a safe deposit box, lock box or checking,
savings, custodial or other account of any nature, the type and number of each
such account and the signatories therefor, a description of any compensating
balance arrangements, and the names of all persons authorized to draw thereon,
make withdrawals therefrom or have access thereto.
6.28 OPERATION OF AIRCRAFT.
Air Response Entities' aircraft as identified in Schedule 6.28
(hereinafter the "AIRCRAFT") have been and continue to be operated (i) in
accordance with the operating instructions of their respective FAA approved
Aircraft Flight Manual and the manufacturer's operating and maintenance
instructions; (ii) in conformity with all laws and orders which affect the
operation, use or possession of the Aircraft or the use of any airport premises
by the Aircraft, including, but not limited to, all Laws and Orders which must
be complied with in order to at all times maintain the Aircraft's Airworthiness
Certificate; (iii) in compliance with the terms, conditions and limitations of
and in the geographical areas allowed by the insurance policies referred to
herein and by Air Response Entities pilots holding any and all licenses required
under such insurance policies; (iv) in accordance with all maintenance service
plans and (v) in accordance with the operating and maintenance procedures
established by any lender, lessor or any person with whom Air Response Entities
may have contracted for the operation and/or maintenance of the Aircraft.
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6.29 CARE, USE AND MAINTENANCE.
During the periods in which Air Response Entities has owned or operated
the Aircraft, it shall have (a) maintained, serviced, repaired, overhauled and
tested; or caused the same to be done to, the Aircraft so as to keep the
Aircraft in good operating condition, state of repair and appearance, ordinary
wear and tear excepted, and in such condition as required to enable the
Airworthiness Certificate of the Aircraft to be maintained in good standing at
all times under Title 49 with the FAA or as required by any other applicable
government authority; (b) maintained all records, logs, manuals and other
material required by the FAA and Title 49 to be maintained in respect of the
Aircraft; (c) promptly furnished its lenders, lessors and others such
information as may be required to file any reports required to be filed by the
lessor (or the owner, if other than Air Response Entities) of the Aircraft with
any governmental authority (d) maintained the engines of the Aircraft in
accordance with all maintenance service plans and lender or lessor requirements
and maintain the Aircraft, the engines and the main components in accordance
with a manufacturer's approved maintenance program, (e) installed all applicable
vendor's and manufacturer's service bulletin kits received by Air Response
Entities that are required for the Aircraft, and incorporated all airworthiness
directives; (f) notified all appropriate parties of any notices or similar
documents which Air Response Entities received from the manufacturer or any
governmental agency concerning the maintenance, service, repair, overhaul,
testing or use of the Aircraft; and (g) properly maintained the Aircraft in
accordance with generally accepted customs and practices.
6.30 Y2K COMPLIANT.
Air Response Entities' equipment, computers, software, hardware, aircraft,
business and processes in which date sensitive software is utilized are year
2000 compliant such that such equipment, computers, software, hardware,
aircraft, business and processes will not experience failures, interruptions or
malfunctions in a manner that will have a material adverse effect on such
equipment, computers, software, hardware, aircraft, business and processes, Air
Response Entities and/or its business.
6.31 SURVIVAL.
The representations and warranties contained in this Article 6 shall
survive the Closing for a period of one year.
6.32 DISCLOSURE.
No representation or warranty by the Air Response Entities and/or the
Shareholders in this Agreement, nor any statement, certificate, schedule,
document or exhibit hereto furnished or to be furnished by or on behalf of the
Air Response Entities or Shareholders pursuant to this Agreement or in
connection with transactions contemplated hereby, contains or shall contain any
untrue statement of material fact or omits or shall omit a material fact
necessary to make the statements contained therein not misleading. All
statements and information contained in any certificate, instrument, disclosure,
schedule or document delivered by or on behalf of the Air Response Entities
and/or Shareholders shall be deemed representations and warranties by the Air
Response Entities and the Shareholders.
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ARTICLE 7
CONDITIONS TO OBLIGATION OF SHAREHOLDERS TO CLOSE
Each and every obligation of Shareholders under this Agreement to be
performed on or prior to the Closing shall be subject to the fulfillment, on or
prior to the Closing, of each of the following conditions, which conditions ARMT
agrees to use its reasonable best efforts to satisfy:
7.1 REPRESENTATIONS AND WARRANTIES AT CLOSING.
The representations and warranties made by ARMT in or pursuant to this
Agreement or given on its behalf hereunder shall be true and correct on and as
of the Closing Date, in each case with the same effect as though such
representations and warranties had been made or given on and as of the Closing
Date.
7.2 OBLIGATIONS PERFORMED.
ARMT shall have performed and complied with all material agreements and
conditions required by this Agreement to be performed or complied with by it
prior to or at the Closing.
7.3 CONSENTS AND APPROVALS.
ARMT shall have obtained and delivered to Shareholders the written
consents or approvals specified, or to be specified, if any, (except for such
consents or approvals as to which, in the aggregate, the failure to obtain would
not have a Material Adverse Effect) and all of such consents shall remain in
full force and effect at and as of the Closing.
7.4 CLOSING DELIVERIES.
ARMT shall have delivered to Shareholders all of the documents or
agreements contemplated hereby and/or necessary or appropriate to consummate the
Transactions, including but not limited to, an executed agreement for the
Management of the Air Response Entities by Shareholders after Closing
substantially in the form attached hereto as Exhibit 4.8, the indemnification
provided for in Section 4.7 (a).
7.5 NO INVESTIGATIONS OF ARMT AND ITS SUBSIDIARIES OR THEIR
BUSINESS.
As of the Closing Date, there shall be no, and neither ARMT nor any of its
subsidiaries shall have any knowledge of any material pending or threatened
investigation by any municipal, state or federal government agency or regulatory
body with respect to ARMT or its subsidiaries, other than such as have been
disclosed to Shareholders prior to the date hereof.
7.6 NO MATERIAL ADVERSE EFFECT.
Other than changes relating to, or resulting from, the existence of, or
the terms of, this Agreement and the Transactions contemplated hereby, ARMT
shall not have suffered since the date hereof any change that constitutes a
Material Adverse Effect.
7.7 SECURITIES LAWS.
The parties shall have complied in all material respects with all federal
and state securities laws applicable to the Transactions.
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7.8 BOARD APPROVAL.
Shareholders shall have received at Closing a Secretary's certificate
evidencing approval of the Transaction by the Board of Directors of ARMT.
7.9 LEGALITY.
No federal or state statute, rule, regulation, executive order, decree or
Injunction shall have been enacted, entered, promulgated or enforced by any
court or governmental authority which is in effect and has the effect of making
the acquisition illegal or otherwise prohibiting the consummation of the
Transaction.
7.10 REGULATORY MATTERS.
All filings shall have been made and all approvals shall have been
obtained as may be legally required pursuant to federal and state laws prior to
the consummation of the Transactions and all actions by or in respect of, or
filings with, any governmental body, agency or official or any other Person
required to permit the consummation of the Transaction.
7.11 ADDITIONAL CLOSING CONDITIONS.
Each and every one of the additional closing conditions, if any, required
of ARMT set forth in Schedule 7.11 attached hereto shall have been completed or
fulfilled, as the case may be.
ARTICLE 8
CONDITIONS TO OBLIGATIONS OF ARMT TO CLOSE
Each and every obligation of ARMT under this Agreement to be performed on
or prior to the Closing shall be subject to the fulfillment, on or prior to the
Closing, of each of the following conditions, which conditions Shareholders
agree to use their reasonable best efforts to satisfy:
8.1 REPRESENTATIONS AND WARRANTIES AT CLOSING.
The representations and warranties made by Air Response Entities and
Shareholders in or pursuant to this Agreement or given on its behalf hereunder
shall be true and correct on and as of the Closing Date, in each case with the
same effect as though such representations and warranties had been made or given
on and as of the Closing Date.
8.2 OBLIGATIONS PERFORMED.
Shareholders shall have performed and complied with all material
agreements and conditions required by this Agreement to be performed or complied
with by it prior to or at the Closing.
8.3 CONSENTS AND APPROVALS.
Shareholders shall have obtained and delivered to ARMT the written
consents or approvals specified, or to be specified, including but not limited
to, the approval of the Board of Directors of Cyber-
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Care, Inc., the approval of its legal and financial advisors, and an acceptable
fairness opinion on the Transaction, (except for such consents or approvals as
to which, in the aggregate, the failure to obtain would not have a Material
Adverse Effect) and all of such consents shall remain in full force and effect
at and as of the Closing.
8.4 CLOSING DELIVERIES.
Shareholders shall have delivered to ARMT each of the following, together
with any additional items which ARMT may reasonably request to effect the
Transaction:
(a) certificate(s) evidencing the ownership of the Air Response
Entities shares;
(b) the indemnification as provided for in Section 4.7; and
(c) any other documents or agreements contemplated hereby and/or
necessary or appropriate to consummate the Transactions.
8.5 NO INVESTIGATIONS OF AIR RESPONSE ENTITIES AND ITS BUSINESS.
As of the Closing Date, there shall be no, and Shareholders shall have no
knowledge of any material pending or threatened investigation by any municipal,
state or federal government agency or regulatory body with respect to
Shareholders, Air Response Entities or their Assets or the business of Air
Response Entities, other than such as have been disclosed to ARMT prior to the
date hereof.
8.6 NO MATERIAL ADVERSE EFFECT.
Air Response Entities shall not have suffered any change that constitutes
a Material Adverse Effect.
8.7 SECURITIES LAWS.
The parties shall have complied with all federal and state securities laws
applicable to the Transactions.
8.8 LEGALITY.
No federal or state statute, rule, regulation, executive order, decree or
injunction shall have been enacted, entered, promulgated or enforced by any
court or governmental authority which is in effect and has the effect of making
the acquisition illegal or otherwise prohibiting the consummation of the
transactions.
8.9 REGULATORY MATTERS.
All filings shall have been made and all approvals shall have been
obtained as may be legally required pursuant to federal and state laws prior to
the consummation of the Transactions and all actions by or in respect of, or
filings with, any governmental body, agency or official or any other Person
required to permit the consummation of the Transactions.
8.10 ADDITIONAL CLOSING CONDITIONS.
Each and every one of the additional closing conditions, if any, required
of Shareholders set forth in Schedule 8.10 attached hereto shall have been
completed or fulfilled, as the case may be.
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ARTICLE 9
TERMINATION
9.1 TERMINATION.
(a) This Agreement may be terminated by mutual written consent of
Shareholders and ARMT at any time before the Closing Date.
(b) This Agreement may be terminated by the Shareholders at any time
before the Closing Date in the event that it does not obtain the consents set
forth herein.
(c) This Agreement may be terminated by the Shareholders in the
event that ARMT does not close by September 30, 2000.
9.2 EFFECT OF TERMINATION.
In the event this Agreement is terminated pursuant to:
(a) Section 9.1(a), no party shall have any obligations to the other
hereunder except for those with respect to confidentiality and the return of any
confidential information which shall remain in effect. Shareholders shall retain
the Deposit.
(b) Section 9.1(b), no party shall have any obligations to the other
hereunder except for those with respect to confidentiality and the return of any
confidential information which shall remain in effect. Shareholders shall return
the Deposit within ten days of the date of such termination.
(c) Section 9.1(c), no party shall have any obligations to the other
hereunder except for those with respect to confidentiality and the return of any
confidential information which shall remain in effect. Shareholders shall retain
the Deposit.
ARTICLE 10
MISCELLANEOUS PROVISIONS
10.1 SEVERABILITY.
If any provision of this Agreement is prohibited by the laws of any
jurisdiction as those laws apply to this Agreement, that provision shall be
ineffective to the extent of such prohibition and/or shall be modified to
conform with such laws, without invalidating the remaining provisions hereto.
10.2 MODIFICATION.
This Agreement may not be changed or modified except in writing
specifically referring to this Agreement and signed by each of the parties
hereto.
10.3 ASSIGNMENT, SURVIVAL AND BINDING AGREEMENT.
This Agreement may not be assigned by either party without the prior
written consent of the other party. The terms and conditions hereof shall
survive the Closing as provided in this Agreement and shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns.
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10.4 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
10.5 NOTICES.
All notices, requests, demands, claims and other communication hereunder
will be in writing. Any notice, request, demand, claim, or other communication
hereunder shall be deemed duly given on the date noted on the receipt as
delivered or refused if sent by overnight express or registered or certified
mail, return receipt requested, postage prepaid and on the date of delivery if
sent by courier, and addressed to the intended recipient as set forth below:
If to ARMT:
Air Response Medical Transport Corp.
7211 South Peoria Street, Suite 200
Englewood, Colorado 80112
Attn: President
If to Capece:
Louis R. Capece, Jr.
10845 Bayshore Drive
Windermere, Florida 34786
If to Shareholders:
Cyber-Care, Inc.
1903 S. Congress Ave., Suite 400
Boynton Beach, FL 33426
Attn: Michael F. Morrell
With a Copy to:
Cyber-Care, Inc.
1903 S. Congress Ave., Suite 400
Boynton Beach, FL 33426
Attn: Daniel W. Bivins, Jr
or at such other address as any party hereto notifies the other parties hereof
in writing.
10.6 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES.
This Agreement, together with the Exhibits and Schedules attached hereto,
constitutes the entire agreement and supersedes any and all other prior
agreements and undertakings, both written and oral, among the parties, or any of
them, with respect to the subject matter hereof and, except as otherwise
expressly provided in this Agreement, is not intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder. No provision of
this Agreement shall be construed against any
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party on the ground that such party drafted the provision or caused it to be
drafted or the provision contains a covenant of such party.
10.7 GOVERNING LAW; JURISDICTION.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Florida, excluding those relating to
conflicts of laws.
10.8 ATTORNEY'S FEES.
In any action between the parties to enforce any of the terms of this
Agreement, the prevailing party shall be entitled to recover reasonable
expenses, including reasonable attorney's fees.
10.9 HEADINGS.
The section headings contained in this Agreement and the Schedules and
Exhibits attached hereto are inserted for convenience only and shall not affect
in any way the meaning or interpretation of this Agreement.
10.10 INCORPORATION OF EXHIBIT, SCHEDULES AND MANAGEMENT AGREEMENTS.
The Exhibits, Schedules and Management Agreement identified in this
Agreement are incorporated in this Agreement by reference and made a part
hereof.
10.11 CONSTRUCTION.
Within this Agreement, the singular shall include the plural and the
plural shall include the singular and any gender shall include all other
genders, all as the meaning and context of this Agreement shall require. The
parties hereto have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring
any party hereto by virtue of the authorship of any of the provisions of this
Agreement.
10.12 ARBITRATION.
All disputes arising in connection with or out of this Agreement shall be
finally then settled by binding arbitration by three (3) arbitrators in Palm
Beach County, Florida, pursuant to the rules of the American Arbitration
Association.
ARTICLE 11
LIMITION OF LIABILITY
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, ABSENT CAPECE'S
FRAUD OR WILLFUL MISCONDUCT, CAPECE SHALL HAVE NO LIABILITY UNDER THIS AGREEMENT
OR ARISING FROM THIS AGREEMENT OR ANY OTHER DOCUMENT RELATED TO THIS AGREEMENT,
INCLUDING, BUT NOT LIMITED TO THE EXHIBITS TO THIS AGREEMENT, OR OTHERWISE, IN
EXCESS OF THE VALUE OF THE
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ACQUISITION SHARES LESS THE DEPOSIT, (WHICH DEPOSIT WILL BE RETAINED BY
SHAREHOLDERS IN ANY EVENT) PLUS THE ESCROW SHARES.
ARTICLE 12
RELEASE OF RESTRICTIVE LEGENDS
FROM CAPECE'S STOCK
Capece owns a substantial number of shares of Cyber-Care voting common stock.
The certificate(s) for such shares bears a restrictive legend (the "Legend")
which is no longer applicable. As an inducement by Cyber-Care to persuade Capece
to enter into this Agreement, Cyber-Care hereby agrees that it will cause to be
processed, commencing January 1, 2001, and for the next Twenty Four (24) Months,
the removal of such Legend within twenty one (21) calendar days of its receipt
of a request by Capece on up to Forty Thousand (40,000) Shares per month. Such
request shall be transmitted by facsimile to the office of the Secretary of
Cyber-Care, Inc.. together with properly completed Form 144 sale documentation
by a nationally recognized brokerage firm . In the event Cyber-Care, Inc. fails
for any reason to so process a properly submitted transaction within such twenty
one (21) calendar day period, Cyber-Care hereby submits to the jurisdiction of
any court of competent jurisdiction in the State of Florida wherein Capece shall
be entitled to have the court order Cyber-Care to remove such Legend from all of
Capece's certificates for Cyber-Care stock and to deliver all such share
certificates to Capece immediately. Further, Cyber-Care hereby admits and agrees
that Capece may be financially damaged by Cyber Care's failure to deliver share
certificates in a timely manner as specified herein and waives any defense for
such failure to timely deliver of any such share certificates, the damages for
which, if not agreed upon with Capece and paid by Cyber-Care within fifteen (15)
calendar days of Capece's demand for payment thereof, will be determined and
enforced by arbitration pursuant to Section 10.12. Cyber-Care understands that
Capece will be using the proceeds from some of such stock for the payment of
taxes. Should any failure to timely deliver one or more of such certificates to
Capece cause Capece to incur interest and penalties regarding any such taxes,
Cyber-Care shall be liable to Capece for such interest and penalties. If
Cyber-Care and Capece are unable to agree upon the amount due Capece as damages
for such interest and penalties within fifteen (15) calendar days of Capece's
demand for payment thereof, the amount shall be determined and enforced through
the Arbitration process referred to in Section 10.12. If Cyber-Care and Capece
agree upon an amount for such damages, such amount shall be paid to Capece
within five (5) days of such agreement. The rights of Capece and the obligations
of Cyber-Care in this Article 12 stand-alone. In no event, even including an
alleged breach or breach of the Agreement by ARMT and/or Capece, will Cyber-Care
ever have any right to refuse to honor its obligations under this Article 12. As
of January 1, 2003 there shall be no limitation on the number of shares which
Capece may sell.
ARTICLE 13
ADDITIONAL PROVISION
Chris Doscher assisted Cyber-Care in facilitating this transaction. For his
assistance, Cyber-Care is obligated to transfer to Doscher Five Thousand (5000)
shares of new voting common stock of Cyber-Care.
[The remainder of this page is intentionally blank.]
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representative as of the day and year first above written.
AIR RESPONSE NORTH, INC.
By: /s/ DANIEL W. BIVINS, JR.
Name: Daniel W. Bivins, Jr.
Title: Attorney in Fact
GLOBAL AIR RESCUE, INC.
By: /s/ DANIEL W. BIVINS, JR.
Name: Daniel W. Bivins, Jr.
Title: Attorney in Fact
GLOBAL AIR CHARTER, INC.
By: /s/ DANIEL W. BIVINS, JR.
Name: Daniel W. Bivins, Jr.
Title: Attorney in Fact
MIOA Acquisition Company I, Inc.
By: /s/ DANIEL W. BIVINS, JR.
Name: Daniel W. Bivins, Jr.
Title: Attorney in Fact
AIR RESPONSE MEDICAL TRANSPORT CORP.
By: /s/ LOUIS R. CAPECE, JR.
Name: Louis R. Capece, Jr.
Title: Chairman
/s/ LOUIS R. CAPECE, JR.
Louis R. Capece, Jr.
CYBER-CARE, INC.
By: /s/ DANIEL W. BIVINS, JR.
Name: Daniel W. Bivins, Jr.
Title: General Counsel & Sr. VP
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