**ASSET PURCHASE AGREEMENT**     **THIS ASSET PURCHASE AGREEMENT**(this “Agreement”) is made and entered into as of July 1, 2006,by and between **AEROTURBINE, INC.**, a Delaware corporation (“Buyer”), and **TRIAD INTERNATIONALMAINTENANCE CORPORATION,**a Delaware corporation (“Seller”).**Background Statement**     Seller is engaged in the business of providing aviation storage, maintenance, repair andoverhaul services in Goodyear, Arizona (the “Business”). Seller now desires to cease conductingthe Business and sell substantially all of the assets related to the Business. Buyer desires tobuy from Seller and Seller desires to sell to Buyer certain assets related to the Business, on theterms and conditions set forth herein.**Statement of Agreement**     In consideration of the premises and the mutual covenants herein contained, the adequacy andsufficiency of which are hereby acknowledged, the parties hereto, for themselves, their successorsand assigns, agree as follows:1. Definitions.     (a) The following capitalized terms shall have the following meanings:     “Affiliate” means (i) with respect to any Person, any other Person directly or indirectlycontrolling or controlled by or under direct or indirect common control with such specified Person,or (ii) with respect to any individual, shall also mean the spouse, parent, grandparent, child,stepchild or grandchild of such Person, or the spouse thereof, or any trust, charitable foundationor similar entity of which there are no principal beneficiaries other than such Person and/or oneor more of such relatives or any undesignated charity. For purposes of this definition, “control”of a Person means having 10% or more of the voting control of that Person or holding equitysecurities representing 10% or more of the value of such Person.     “Assignment and Assumption Agreement” means an agreement, substantially in the form ofExhibit A, attached hereto, executed by Seller and Buyer at Closing.     “Assumed Liabilities” means Seller’s obligations and liabilities under the Contractsarising on and after the Closing Date, all of which are assumed by Buyer at Closing pursuant to theAssignment and Assumption Agreement, and no others. For the avoidance of doubt, the AssumedLiabilities shall not include any liability or obligation under the Contracts with respect toclaims for acts or omissions occurring prior to the Closing Date, whether such claims are assertedbefore or after the Closing Date.     “Bill of Sale” means a bill of sale, substantially in the form of Exhibit B,attached hereto, executed by Seller and delivered to Buyer at Closing.     “Business” shall have the meaning given to it in the Background Statement.     “Closing” shall have the meaning given to it in Section 2.     “Closing Date” means the date referred to in Section 2.     “Consigned Inventory” shall have the meaning assigned to it in the ConsignmentAgreement.     “Consignment Agreement” means an agreement substantially in the form of Exhibit C, attached
 

 
hereto, executed by Seller and Buyer at Closing.     “Contracts” means those contracts and other agreements set forth on Schedule 1attached hereto and incorporated herein by reference.     “Employees” means those employees of Seller which were actively employed by Seller on June 1,2006, the names of such employees listed on Schedule 2, attached hereto and incorporatedherein by reference. “Employee” means any one of those employees individually.     “Environmental Law” means all federal, state, local, and foreign statutes,regulations, and ordinances concerning public health and safety, worker health and safety,pollution, or protection of the environment, including all those relating to the presence, use,production, generation, handling, transportation, treatment, storage, disposal, distribution,labeling, testing, processing, discharge, release, threatened release, control, or cleanup of anyhazardous materials, substances, or wastes, as such requirements are enacted and in effect on orprior to the Closing Date.     “Equipment” means the tools, equipment, machines, vehicles and similar items listed onSchedule 3, attached hereto and incorporated herein by reference.     “Excluded Assets” means the following assets of Seller: (i) cash or cash equivalents;(ii) all trade accounts receivable of Seller outstanding immediately prior to the Closing Date;(iii) all amounts owed under the Contracts for materials and/or services provided by Seller,whether provided by Seller before, on or after the Closing Date (such materials and/or services,“Seller-Performed Work”); (iv) insurance policies of Seller and claims receivable thereunder, orbonds, letters of credit or similar items or any cash surrender value in regard thereto; (v) thecorporate seals, charter documents, minute books, stock books and other similar documentspertaining to the organization of Seller; (vi) Seller’s name, trade names, trademarks, copyrights,licenses, patents (including patents pending and/or applied for), computer software or otherintellectual property of any kind whatsoever; (vii) Seller’s books, records and manuals pertainingto the Business; (viii) telephone numbers currently used by Seller; and (ix) claims or rightsagainst third parties Seller may have or hereafter acquire arising out of any matters occurringprior to the close of business on the Closing Date, including, without limitation, claims forrefunds of federal, state or local franchise, income or other taxes; (x) all inventory of Seller;and (xi) the tangible personal property listed on Schedule 4.     “Excluded Liabilities” means all liabilities or obligations of Seller not specificallylisted as Assumed Liabilities, notwithstanding any claimant’s assertion of any de facto merger orsuccessor liability theory of liability, including, without limitation, any liability for (i) aWARN Act claim with respect to the termination of employment of any employee of Seller other than aSelected Employee; (ii) the violation any Environmental Law or Release of Hazardous Substances onthe Leased Premises prior to the Closing Date; (iii) any use, sales or personal property tax owingor accrued with respect to the period up to, but not including, the Closing Date; and (iv) anyviolation of bulk sales laws.     “Governmental Authority” means any nation, province, state or other politicalsubdivision thereof, and any agency, natural person or other entity exercising executive,legislative, regulatory or administrative functions of or pertaining to government and havingjurisdiction over Buyer, Seller, the Business or any of the Purchased Assets.     “Hazardous Substance” means and include each substance identified or designated assuch under CERCLA, as well as any other substance or material meeting any one or more of thefollowing criteria: (i) it is or contains a substance designated as a hazardous waste, hazardous substance,pollutant, contaminant or toxic substance under any Environmental Law; or (ii) it is or contains,without limiting the foregoing, petroleum hydrocarbons.
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     “Indemnified Party” shall have the meaning given to it in Section 16(c).     “Indemnifying Party” shall have the meaning given to it in Section 16(c).     “Information” shall have the meaning given to it in Section 10.     “Knowledge” or “known”. An individual shall be deemed to have “knowledge” ofor to have “known” a particular fact or other matter if such individual is actually aware of suchfact or other matter, without independent investigation. A corporation or other entity shall bedeemed to have “knowledge” of or to have “known” a particular fact or other matter if anyindividual who is serving as a director or officer (or in any similar capacity) of the corporationor entity, has actual knowledge of such fact or other matter, without independent investigation.     “Leased Premises” means the premises leased by LJH, Ltd. to Buyer pursuant to thatcertain Sublease Agreement dated of even date herewith.     “Person” shall mean a corporation, a partnership, a limited liability company, an association,a joint venture, an organization, a business, an individual, a trust or a government or politicalsubdivision thereof, a government agency, or any other legal entity.     “Purchase Price” shall have the meaning given to it in Section 3(b).     “Purchased Assets” shall mean the following assets of Seller: (i) the Equipment; (ii)any tangible personal property located on the Leased Premises on July 1, 2006, that is not anExcluded Asset; (iii) certain manuals, forms and records listed on Schedule 5, attachedhereto and incorporated herein by reference, and (iv) Seller’s rights and entitlements under theContracts.     “Release” means any releasing, spilling, leaking, pumping, pouring, emitting,emptying, discharging, injecting, escaping, leaching, disposing or dumping in amounts or undercircumstances that violate any Environmental Law.     “Selected Employees” means the seventy (70) Employees whose names are set forth onSchedule 6 attached hereto and incorporated herein by reference. “Selected Employee” meansany one of those Employees individually.     “Services Agreement” means an agreement, substantially in the form of ExhibitD, attached hereto, executed by Seller and Buyer at Closing.     “Transaction Documents” means this Agreement, the Assignment and Assumption Agreement,the Bill of Sale, the Services Agreement and any other document necessary or desirable toconsummate the transactions contemplated hereby.     “Transition Period” means the period of time commencing on the date hereof, up to, butnot including, the Closing Date.     “Transition Period Loss” means the difference between Seller’s Business expenses andrevenues during the Transition Period, calculated in accordance with the accounts and formula setforth on Schedule 8, attached hereto and incorporated herein by reference.     (b) Other capitalized terms may be defined elsewhere in this Agreement.2. Closing. Subject to Section 15 below, the closing of the transactionscontemplated hereby (the
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“Closing”) shall take place on or before the latest of August 4, 2006, thedate that all the conditions listed in Section 15 are satisfied or waived and the date thatSeller’s FAA 145 Repair Station Certificate will be transferred to Buyer (the “Closing Date”), atthe Leased Premises, or at such other time or place as shall be mutually satisfactory to theparties hereto. At Closing, the following documents in a form reasonably satisfactory to bothparties shall be delivered:     (a) Certificates of the Secretaries of Seller and Buyer, respectively, attaching resolutionsduly adopted by the respective Boards of Directors of Seller and Buyer authorizing the execution ofthis Agreement and consummation of the transactions contemplated hereby; and     (b) Such other documents and certificates reasonably requested by Seller or Buyer inconnection with the conveyance of the Purchased Assets and consummation of the transactionscontemplated hereby.3. Transactions at Closing.     (a) Subject to satisfaction of the other terms and conditions of this Agreement, on theClosing Date: (i) Seller shall sell, transfer, convey and deliver to Buyer, andBuyer will purchase and accept from Seller, the Purchased Assets, free andclear of all liens or other encumbrances;  (ii) Seller and Buyer shall execute and deliver to each other theAssignment and Assumption Agreement, the Consignment Agreement and the ServicesAgreement;  (iii) Seller shall execute and deliver to Buyer the Bill of Sale;  (iv) The FAA will transfer to Buyer Seller’s 145 Repair StationCertificate; and  (v) Buyer shall pay to Seller, in accordance with Section3(b) below, an amount equal to $1,400,000.00, plus the Transition PeriodLoss (the “Purchase Price”).     (b) The Purchase Price shall be payable by Buyer as follows: (i) $1,138,259.01, plus the Transition Period Loss, shall be paidat Closing via wire transfer;  (ii) $261,749.99 shall be paid by cancellation of Seller’soutstanding indebtedness to Buyer under that certain Aircraft Engine PurchaseAgreement by and between Seller and AeroTurbine, Inc., dated March 1, 2006.4. Assignment of Contracts. Subject to satisfaction of the other terms and conditions ofthis Agreement, on the Closing Date Seller and Buyer shall execute the Assignment and AssumptionAgreement, pursuant to which Seller shall assign to Buyer and Buyer shall assume and pay, dischargeand perform the rights, obligations and liabilities of Seller under the Contracts arising on or afterthe Closing Date. If any Contract is not assignable or transferable without the consent of anythird party, either by virtue of the provisions thereof or under applicable law, Seller shall useits commercially reasonable efforts to obtain such consent prior to the Closing Date and shallnotify Buyer when such consent is obtained or if such consent is not so obtained. At the requestof Buyer, Seller shall use its commercially reasonable efforts to obtain any consents requested byBuyer that were not previously obtained as soon as possible after the Closing Date and thereafterassign such contracts to Buyer, at which time such contracts shall be Contracts for all purposes.In addition, until such consents are obtained or for the life of any such contract for which aconsent cannot be
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obtained, Seller shall subcontract to Buyer in writing the completion of any suchcontracts at the price specified in each such contract (or an amount of the price specifiedprorated by the amount of work completed by Seller, if such Contract is a fixed price contract)without any additional mark-up and on the same terms and conditions, and Buyer shall be responsiblefor the costs and liabilities associated with the performance of any such Contracts and will beentitled to and shall receive all the revenues from any such Contracts. If subcontracting any suchContract is not permitted under the Contract, Seller and Buyer will cooperate with one another todesign a reasonable arrangement to give Buyer the benefits of and obligations under such Contract.5. Pre-Closing Conduct of Business. During the Transition Period:     (a) Seller shall conduct the Business in the ordinary course, except that (i) Seller shall beentitled to exercise its rights and perform its obligations hereunder, in accordance herewith; (ii)Seller shall consult with Buyer with respect to the allocation of Employees to projects and othertasks; (iii) Seller shall obtain Buyer’s written approval prior to entering into any new contractsfor the performance of aircraft maintenance or disassembly services at the Leased Premises or toamending any Contracts; and (iv) Seller shall obtain Buyer’s written approval prior to engaging anysubcontractor to perform aircraft maintenance or disassembly services at the Leased Premises. Inthe event that Seller makes any expenditures during the Transition Period that are not specificallylisted on Schedule 7 as a component of the Transition Period Loss, Buyer and Seller shallinclude such expenditure in the calculation of the Transition Period Loss if such expenditure wasmade in the ordinary course of the Business and falls within the categories of expenses included inthe Transition Period Loss calculation; provided, however, that Buyer may dispute, by writtennotification to Seller, that any such expenditure falls within the requirements of this Section5(a) and thereafter Buyer and Seller shall negotiate in good faith to resolve the dispute.Anything herein to the contrary notwithstanding, any expenditure of Seller not specifically listedon Schedule 7 and not otherwise qualifying for inclusion in the Transition Period Losscalculation shall be solely for Seller’s account.     (b) Seller shall account for its revenues, expenses, gains and losses in accordance with pastpractice and generally-accepted accounting practices, consistently applied.     (c) Buyer and Seller shall cooperate with each other to (i) achieve a smooth transition of theBusiness from Seller to Buyer, (ii) maximize satisfaction of Seller’s customers, (iii) minimize anyliability Seller may have with respect to the termination of its operations in Goodyear, Arizona,(iv) minimize any Transition Period Losses, (v) minimize any taxes resulting from the transactionscontemplated hereunder, and (vi) transfer Seller’s FAA Part 145 Repair Station Certificate toBuyer.6. Taxes. All ad valorem taxes on the Purchased Assets for the 2006 calendar year shall beprorated per diem on a calendar-year basis up to the Closing Date. If the amount of any such taxesis not known as of the Closing Date, such pro ration shall be based on the tax bills for the 2005calendar year, and at either party’s request, the other party shall remit any additional amount duewith respect to their pro rata share of such taxes when the actual amounts for 2006 are known.Prior to the Closing Date, Seller shall pay all ad valorem and other taxes levied with respect to the Purchased Assets or the Business for all periodsprior to 2006 and all unpaid assessments levied with respect to the Purchased Assets or theBusiness prior to the Closing Date. The Buyer shall pay all sales taxes due of as a result ofthe transactions contemplated hereunder; provided, however, that Seller and Buyer shall givereasonable assistance to the other to document any tax exemptions or other benefits available. Ifavailable, at Closing Seller will provide Buyer with a certificate from the Arizona Department ofRevenue and local taxing authority showing that there are no outstanding sales taxes (use andpersonal property), interest or penalties due.7. Seller’s Representations and Warranties. Seller represents and warrants to Buyer asfollows:
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     (a) Seller is a corporation duly incorporated, validly existing and in good standing under thelaws of its jurisdiction of incorporation and is duly qualified and in good standing to do businessas a foreign corporation in each jurisdiction in which the operation of the Business makes suchqualification necessary. Seller has the full power and authority to own and operate the PurchasedAssets and carry on the Business as such operations are now being conducted.     (b) The issued and outstanding capital stock of Seller is owned entirely by TIMCO AviationServices, Inc., a Delaware corporation, and no other Person owns or controls any other interest inSeller.     (c) Seller has the full corporate power, authority and capacity to enter into and perform itsobligations under this Agreement and to consummate the transactions contemplated herein. Theexecution, delivery and performance by Seller of this Agreement and the consummation of thetransactions contemplated herein have been duly and validly authorized and approved by allrequisite shareholder, corporate and other action on the part of Seller. This Agreement and allother agreements and documents in to be executed in connection herewith, as of the date hereof,have been duly and validly executed by Seller and each constitutes the legal, valid and bindingobligation of Seller, enforceable in accordance with its terms, except as enforceability may belimited by equitable principles or by bankruptcy, fraudulent conveyance or insolvency lawsaffecting the enforcement of creditors’ rights generally. All other agreements and documents to beexecuted in connection herewith as of the Closing Date shall have been duly and validly executed bySeller by or prior to the Closing Date, and each shall constitute the legal, valid and bindingobligation of Seller, enforceable in accordance with its terms, except as enforceability may belimited by equitable principles or by bankruptcy, fraudulent conveyance or insolvency lawseffecting the enforcement of creditors’ rights generally.     (d) Except as set forth on Schedule 8, attached hereto and incorporated herein byreference, there is no requirement applicable to Seller to make any filing with, or to obtain anypermit, authorization, consent or approval of any Governmental Authority or any other Personpursuant to applicable law, any contract or agreement, or otherwise, as a condition to the lawfulconsummation by the Seller of the transactions contemplated hereby. The execution, delivery andperformance of this Agreement by Seller will not (a) conflict with any provision of the articles ofincorporation or bylaws of Seller, (b) result in a default (or give rise to any right oftermination, cancellation or acceleration) under any of the terms, conditions or provisions of anynote, bond, mortgage, indenture, agreement, lease or other instrument or obligation relating to theBusiness and to which the Seller is a party or to which any of the Purchased Assets or Business maybe subject, (c) result in the creation of any lien or encumbrance on any of the Purchased Assetspursuant to any indenture, mortgage, deed of trust, lease, note or other agreement or instrument towhich Seller is a party, or (d) violate any law, statute, rule, regulation, order, writ, injunctionor decree of any Governmental Authority that is applicable to Seller, the Business or any of thePurchased Assets.     (e) Seller owns and has good and valid title to all tangible personal property that isincluded in the Purchased Assets and, at the Closing, shall convey to Buyer such good and validtitle, free and clear of all liens and encumbrances.     (f) Schedule 1 identifies each Contract which requires consent of a third party priorto Seller’s assignment to Buyer. Each Contract is valid, binding, in full force and effect andenforceable by Seller and each other party thereto. The execution and delivery of this Agreementby Seller and the performance of this Agreement by Seller will not relieve any other party to anyContract from its obligations or enable it to terminate any such Contract; provided that consentsto assignment are obtained under those Contracts that require consent to assignment. Seller is notnor will Seller, as a result of the sale of the Business contemplated hereby, be in default underany of the Contracts; provided that consents to assignment are obtained under those Contracts thatrequire consent to assignment. No threat or claim of default under any of the Contracts has beenmade and Seller has no Knowledge of anything that could reasonably be expected to result in a claimof default. To the Knowledge of Seller, no other party to any of the Contracts is in materialbreach,
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violation or default thereof.     (g) There are no legal, administrative, arbitration or other proceedings pending or, to theKnowledge of Seller, threatened against or relating to the Business or the Purchased Assets, norany governmental investigation pending in connection with the operation of the Business or seekingto enjoin the transactions contemplated herein.     (h) Seller has no knowledge of any unreported act, condition or Release of a RegulatedSubstance occurring on the Leased Premises during the Seller’s period of occupancy of the LeasedPremises which did constitute or may have constituted a violation of any Environmental Law.     (i) EXCEPT AS EXPRESSLY SET FORTH IN SECTIONS 7(a) – (h), SELLER IS SELLING AND BUYERIS PURCHASING THE PURCHASED ASSETS **AS IS, WHERE IS, AND WITH ALL FAULTS** AND BUYERSPECIFICALLY WAIVES, RELEASES AND DISCHARGES SELLER FROM AND SELLER SPECIFICALLY EXCLUDES ANY ANDALL OTHER WARRANTIES, REPRESENTATIONS OR GUARANTEES, EXPRESS OR IMPLIED, OF ANY KIND, NATURE ORTYPE WHATSOEVER, INCLUDING, WITHOUT LIMITATION: (i) ANY WARRANTIES OR REPRESENTATIONS, EXPRESS, IMPLIED OR ARISINGBY OPERATION OF LAW, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF CONDITION,MERCHANTABILITY, HABITABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, OR WITHRESPECT TO THE VALUE, PROFITABILITY, OR MARKETABILITY OF THE BUSINESS OR ANYOF THE PURCHASED ASSETS;  (ii) ANY WARRANTY OR REPRESENTATION WITH RESPECT TO COMPLIANCE WITHANY ENVIRONMENTAL LAWS, LAND USE LAWS, RULES, REGULATIONS, ORDERS, ORREQUIREMENTS, INCLUDING, WITHOUT LIMITATION, THOSE PERTAINING TO THE HANDLING,GENERATING, TREATING, STORING, OR DISPOSING OF ANY HAZARDOUS SUBSTANCE;     (j) Buyer has had and will have, pursuant to this Agreement, an adequate opportunity to makesuch legal, factual, and other inquiries and investigations as it deems necessary, desirable, orappropriate with respect to the assets, liabilities and Business of Seller. BUYER EXPRESSLYACKNOWLEDGES THAT IT IS SPECIFICALLY RELYING UPON SUCH INSPECTIONS AND INVESTIGATIONS IN MAKING ITSDETERMINATION TO ACQUIRE THE PURCHASED ASSETS OF SELLER. Buyer further acknowledges that it isrelying upon the conclusions and advice of its own experts, consultants, and professionals inevaluating the feasibility and desirability of the Purchased Assets for Buyer’s use, and that the availability of the rights to investigate andinspect the Purchased Assets, and Buyer’s corresponding reliance upon the results of suchinvestigations and inspections, were a material factor in the determination of the Purchase Price.Such inquiries and investigations of Buyer shall be deemed to include, but shall not be limited to,any leases and contracts pertaining to the Purchased Assets, the physical components of allportions of the Purchased Assets, the condition of the Purchased Assets. Nothing in this paragraphshall be deemed to limit the representations and warranties given by Seller in this Section 7;     (k) Buyer acknowledges and agrees that any manual of operation or procedures which it preparedin connection with its change of control application with respect to the Part 145 Repair StationCertificate currently held by Seller is the sole responsibility of Buyer, notwithstanding thatBuyer may have reviewed similar manuals maintained by Seller. Seller shall have no responsibilityfor any such manuals, the contents thereof, or Buyer’s reliance on existing manuals of Seller, andBuyer shall indemnify and hold harmless Seller and its Affiliates from any and all claims that mayhereafter be made based upon such
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manuals. Buyer shall not be entitled to rely upon the contentsof Seller’s manuals with respect to any similar manuals prepared by Buyer.8. Representations and Warranties of Buyer. Buyer represents and warrants to the Seller asfollows:     (a) Buyer is a Delaware corporation duly organized, validly existing and in good standingunder the laws of its jurisdiction of incorporation and has the requisite power and authority toown, lease and operate its properties and to carry on its business as now being conducted.     (b) Buyer has the full corporate power, authority and legal right to execute and deliver thisAgreement and to consummate the transactions contemplated hereby. The execution and delivery ofthis Agreement and the consummation of the transactions contemplated hereby have been duly andvalidly authorized by all necessary corporate action on the part of Buyer and no other proceedingson the part of Buyer are necessary to authorize this Agreement or to consummate the transactionscontemplated hereby. This Agreement has been duly and validly executed and delivered by Buyer andconstitutes the legal, valid and binding agreement of Buyer enforceable against Buyer in accordancewith its terms, except as enforcement may be limited by equitable remedies or by applicablebankruptcy, insolvency, fraudulent conveyance and similar laws affecting the rights of creditsgenerally.     (c) Except as set forth on Schedule 9, there is no requirement applicable to Buyer tomake any filing with, or to obtain any permit, authorization, consent or approval of, anyGovernmental Authority or any other Person pursuant to applicable law, any contract or agreement,or otherwise, as a condition to the lawful consummation by Buyer of the transactions contemplatedhereby, other than the filings, if any, required under the HSR Act and the expiration of thewaiting period thereunder. The execution and delivery of this Agreement by Buyer and theperformance of this Agreement by Buyer will not: (a) conflict with or result in any breach of anyprovision of the articles of incorporation or bylaws of Buyer; (b) result in a default (or giverise to any right of termination, cancellation or acceleration) under any of the terms, conditionsor provisions of any note, bond, mortgage, indenture, agreement, lease or other instrument orobligation to which Buyer is a party or by which any of their respective assets may be bound; or(c) violate any law, statute, rule, regulation, order, writ, injunction or decree of any federal,state or local Governmental Authority or agency that is applicable to Buyer.     (d) There are no legal, administrative, arbitration or other proceedings or governmentalinvestigations pending or, to the knowledge of Buyer, threatened against Buyer seeking to enjointhe transactions contemplated hereby.9. Survival of Representations and Warranties. All representations, warranties, covenantsand agreements made by Seller or Buyer in this Agreement or in any Transaction Document shall survivethe Closing for a period of four (4) years. All claims made by virtue of such representations,warranties, covenants and agreements shall be made in accordance with Section 18(h).10. Confidentiality. Each of Buyer and Seller: (i) will hold, and will use its bestefforts to cause its officers, directors, employees, lenders, accountants, representatives, agents,consultants and advisors to hold, in strict confidence all information (other than such informationas may be publicly available) furnished to the other in connection with the transactionscontemplated by this Agreement (collectively, the “Information”); and (ii) will not, without theprior written consent of the other, release or disclose any Information to any other Person, exceptto its officers, directors, employees, lenders, attorneys, accountants, representatives, agents,consultants and advisors who need to know the Information in connection with the consummation ofthe transactions contemplated by this Agreement, who are informed by it of the confidential natureof the Information, and who agree to be bound by the terms and conditions of this Section10. In the event that a party that receives Information or any Person to whom such partytransmits the Information pursuant to this Agreement becomes compelled by any court, tribunal,authority, regulatory body or stock exchange to
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disclose any of the Information, such party willprovide the other with prompt notice so that the other may seek a protective order or otherappropriate remedy or waive compliance with the provisions of this Section 10, or both. Ifthe transactions contemplated by this Agreement are not consummated, the Information will bereturned to the owner immediately upon its request therefor.11. Employees and Employee Benefits.     (a) Buyer shall offer Selected Employees employment to commence on the Closing Date atcomparable salary, wages and benefits as those provided by Seller on the date hereof and shallcontinuously employ Selected Employees on those terms for at least ninety (90) days thereafter (the“Employment Period”).     (b) During the Employment Period, Buyer shall maintain medical plans that provide to SelectedEmployees a level of benefits no less favorable than those offered to Buyer’s other employeesworking in a similar capacity at a cost to Selected Employees not materially greater than the costof the plans provided by Seller. In order to assist Buyer in meeting the requirements of thisSection 11(b), at Closing, Seller shall elect and Buyer shall reimburse Seller for COBRAcoverage for Selected Employees under Seller’s health plan for up to sixty (60) days after theClosing. Buyer shall collect from Selected Employees, through wage withholding, the premium thatSeller collected from Selected Employees prior to the Closing Date and shall remit such premiums,along with the remaining cost of such COBRA coverage to Seller within five (5) days after eachpayroll date. Within five (5) days (or any longer period that may be required by applicable law)after Buyer’s procurement of health insurance coverage for the Selected Employees, Seller shallterminate its payment of the COBRA premiums. Anything herein to the contrary notwithstanding,Buyer shall use its best efforts to obtain the above-described health plan for Selected Employeesas soon as possible after the Closing Date.12. Publicity. Buyer and Seller shall negotiate in good faith as to the text, form,content, and timing of any news release or other public announcement or disclosure concerning orrelating to the transactions contemplated hereby prior to its release for publication, and no suchrelease, announcement or disclosure shall be made without the other’s consent, subject tocompliance with all applicable laws, rules and regulations.13. Letters to Customers and Vendors. Immediately following the Closing, Seller and Buyershall prepare and send a letter to the customers and vendors of Seller advising them that certainof the assets of the Business have been sold to Buyer, that the accounts receivables and accountspayable of Seller have been retained by Seller and of such other matters as Seller and Buyer agree upon.14. Assistance with Accounts Receivable. Buyer, at no cost to Seller and at Seller’srequest, shall assist Seller in collecting accounts receivable of Seller with respect to theBusiness. The primary responsibility for the collection of such receivables shall be with Seller;however, if payments on receivables are sent to Buyer, it shall promptly account to Seller for suchreceivables. If requested by Seller, Buyer shall cooperate with Seller in assisting in thecollection of such receivables.15. Conditions Precedent to Closing.     (a) Seller’s Conditions. The following are conditions precedent to Seller’sobligation to perform in accordance with Section 3(a) above, the satisfaction of which maybe waived by Seller in writing: (i) Buyer shall have delivered to Seller the Cash Payment.  (ii) Neither party shall be subject, on the Closing Date, to anyorder, decree or injunction of a court of competent jurisdiction that enjoinsor prohibits the
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   consummation of this Agreement or the transactionscontemplated hereby, nor shall there be pending a suit or proceeding by anyGovernmental Authority that seeks injunctive or other relief in connection withthis Agreement or the transactions contemplated hereby.  (iii) All representations and warranties of Buyer contained in theTransaction Documents shall be true and correct in all material respects as ofthe Closing Date as though made as of such date (except as otherwisecontemplated by this Agreement). Buyer shall have performed and complied inall material respects with all covenants and agreements contained in thisAgreement required to be performed and complied with by it at or prior to theClosing Date. The Seller shall have received a certificate to the matters setforth in this subparagraph signed on behalf of Buyer by its Chief ExecutiveOfficer.  (iv) All documents required to have been executed and/or deliveredby Buyer to the Seller, and all actions required to have been taken by Buyer,at or prior to the Closing Date, shall have been delivered or taken.  (v) Seller shall have received from Buyer copies, certified by itsSecretary or an Assistant Secretary, of resolutions of Buyer’s board ofdirectors authorizing the execution, delivery and performance of this Agreementand all instruments and documents to be delivered in connection herewith andthe transactions contemplated hereby.     (b) Buyer’s Conditions. The following are conditions precedent to Buyer’s obligationto perform in accordance with Section 3(a) above, the satisfaction of which may be waivedby Buyer in writing: (i) Seller shall have performed and provided to Buyer the resultsof an internal audit of the Business’ FAA compliance and corrected anydeficiencies to Buyer’s reasonable satisfaction.  (ii) All Excluded Assets, other than Consigned Inventory, shall havebeen removed from the Leased Premises at Seller’s sole expense and Seller shall haveforeclosed upon any abandoned aircraft located at the Leased Premises;provided, however, that Buyer may notify Seller at any time prior to Closingthat Buyer desires that Seller remove from the Leased Premises any tangiblepersonal property not listed on Schedule 3 or 4, and Seller shall removesuch personal property at Seller’s expense within fourteen (14) days aftersuch notification.  (iii) Neither party shall be subject, on the Closing Date, to anyorder, decree or injunction of a court of competent jurisdiction that enjoinsor prohibits the consummation of this Agreement or the transactionscontemplated hereby, nor shall there be pending a suit or proceeding by anyGovernmental Authority that seeks injunctive or other relief in connection withthis Agreement or the transactions contemplated hereby.  (iv) All representations and warranties of Seller contained in theTransaction Documents shall be true and correct as of the Closing Date asthough made as of such date (except as otherwise contemplated by thisAgreement). Seller shall have performed and complied in all material respectswith all covenants and agreements contained in this Agreement required to beperformed and complied with by it at or prior to the Closing Date. Buyer shallhave received a certificate to the matters set forth in this subparagraphsigned by the Chief Executive Officer of Seller.
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 (v) All documents required to have been delivered by Seller toBuyer, and all actions required to have been taken by Seller, at or prior tothe Closing Date, shall have been delivered or taken.  (vi) Buyer shall have received from Seller copies, certified by itsSecretary or an Assistant Secretary, of resolutions adopted on behalf of Sellerauthorizing the execution, delivery and performance of this Agreement and allinstruments and documents to be delivered in connection herewith and thetransactions contemplated hereby.  (vii) Buyer shall have received such other documents, opinions andcertificates that it has reasonably requested in connection with the conveyanceof the Purchased Assets and the consummation of the other transactionscontemplated hereby.  (viii) Buyer shall have received reasonably satisfactory evidence that Seller’ssenior lenders have consented to Seller’s sale of the Purchased Assets and havereleased any and all liens on or other security interests in the PurchasedAssets.16. Indemnifications.     (a) Subject to the conditions below, Seller shall indemnify and hold harmless Buyer and itsshareholders, officers, directors and employees from and against and in respect of any and alldamages, losses, diminution of value, or expenses suffered or incurred by any such party (whetheras a result of third party or other claims (whether valid or not), demands, suits, causes ofaction, proceedings, investigations, judgments or liabilities or otherwise), including costs ofinvestigation and defense and reasonable attorneys’ fees (“Claims”) assessed, incurred or sustainedby or against any of them with respect to or arising out of (i) any breach of the representationsor warranties of Seller set forth herein or in any Transaction Document, (ii) any Excluded Liabilities, and (iii) any breach or otherfailure to perform any covenant, agreement or obligation of the Seller set forth herein or in anyTransaction Document if such breach or other failure is not cured within any applicable cureperiod, provided, however, Seller shall not be obligated to indemnify or hold harmless Buyer to theextent the claim giving rise to such obligation is caused or occasioned by the negligence of Buyeror by Buyer’s breach of this Agreement.     (b) Subject to the conditions below, Buyer shall indemnify and hold harmless Seller and itsshareholders, officers, directors and employees, against and in respect of any and all Claimsassessed or incurred or sustained by or against any of them, with respect to or arising out of (i)any breach of the representations or warranties of the Buyer set forth herein or in any TransactionDocument; (ii) any breach or other failure to perform any covenant, agreement or obligation of theBuyer set forth herein or in any Transaction Document, (iii) any of the Assumed Liabilities; and(iv) any liability for the violation any Environmental Law or Release of Hazardous Substances onthe Leased Premises on or after the Closing Date, provided, however, Buyer shall not be obligatedto indemnify or hold harmless Seller to the extent the claim giving rise to such obligation iscaused or occasioned by the negligence of Seller or by the Sellers’ breach of the Agreement.     (c) If any Person shall claim indemnification hereunder arising from any claim or demand of athird party, the party seeking indemnification (the “Indemnified Party”) shall promptly notify theparty or parties from whom indemnification is sought (the “Indemnifying Party”) in writing of thebasis for such claim or demand setting forth the nature of the claim or demand in reasonabledetail. The failure of the Indemnified Party to so notify the Indemnifying Party shall not relievethe Indemnifying Party of any indemnification obligation hereunder except to the extent theIndemnifying Party demonstrates that the defense of such claim or demand is materially prejudicedby the failure to give such notice.
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     (d) If any legal proceeding or action is brought by a third party against an Indemnified Partyand the Indemnified Party gives notice to the Indemnifying Party pursuant to Section 16(c)above, the Indemnifying Party will be entitled to participate in such proceeding and, to theextent that it wishes, to assume the defense of such proceeding if (i) the Indemnifying Partyprovides written notice to the Indemnified Party that the Indemnifying Party intends to undertakesuch defense and the Indemnifying Party will indemnify the Indemnified Party against all claims forindemnification resulting from or relating to such third party claim, (ii) the Indemnifying Partyprovides to the Indemnified Party evidence acceptable to the Indemnified Party that theIndemnifying Party will have the financial resources to defend against the third party claim and tofulfill its indemnification obligations hereunder, (iii) the Indemnifying Party conducts thedefense of the third party claim actively and diligently with counsel reasonably satisfactory tothe Indemnified Party, and (iv) if the Indemnifying Party is a party to the proceeding, jointrepresentation would not be inappropriate. The Indemnified Party shall, in its sole discretion,have the right to employ separate additional counsel (who may be selected by the Indemnified Partyin its sole discretion) in any such action and to participate in the defense thereof, and the feesand expenses of such additional counsel shall be paid by such Indemnified Party. The IndemnifiedParty shall fully cooperate with the Indemnifying Party and its counsel in the defense orcompromise of such claim or demand, provided that all out-of-pocket expenses incurred byIndemnified Party shall be paid by the Indemnifying Party (except as aforesaid).     (e) If the Indemnifying Party assumes the defense of a proceeding, (i) no compromise orsettlement of such claims may be effected by the Indemnifying Party without the Indemnified Party’sconsent unless (A) there is no finding or admission of any violation of law or any violation of therights of any Person and no effect on any other claims that may be made against the IndemnifiedParty, and (B) the sole relief provided is monetary damages that are paid in full by theIndemnifying Party; and (ii) the Indemnified Party will have no liability with respect to anycompromise or settlement of such claims effected without its consent. Should one or more but not all of the Indemnifying Partiesagree to defend any such third party claim, the Indemnifying Party or parties not participating inthe defense of the claim shall be bound by the acts and agreements of the other or others.     (f) If (i) notice is given to the Indemnifying Party of the commencement of any proceeding andthe Indemnifying Party does not, within ten (10) days after the Indemnified Party’s notice isgiven, give notice to the Indemnified Party of its election to assume the defense of suchproceeding, (ii) any of the conditions set forth in clauses (i)-(iv) of Section 16(d) abovebecome unsatisfied, or (iii) an Indemnified Party determines in good faith that there is areasonable probability that a proceeding may adversely affect it other than as a result of monetarydamages for which it would be entitled to indemnification under this Agreement, the IndemnifiedParty will (upon further notice to the Indemnifying Party) have the right to undertake the defense,compromise or settlement of such claim, provided that the Indemnifying Party will reimburse theIndemnified Party promptly and periodically for the costs of defending against the third partyclaim (including reasonable attorneys’ fees and expenses) and the Indemnifying Party will remainresponsible for any indemnifiable amounts arising from or related to such third party claim to thefullest extent provided in this Section 16. The Indemnifying Party may elect toparticipate in such proceedings, negotiations or defense at any time at its own expense.     (g) If any party shall claim indemnification hereunder for any claim other than third partyclaims, the Indemnified Party shall promptly notify the Indemnifying Party in writing of the basisfor such claim setting forth the nature and amount of the damages resulting from such claim. TheIndemnifying Party shall give written notice of any disagreement with such claim within fifteen(15) days following receipt of Indemnified Party’s notice of the claim, specifying in reasonabledetail the nature and extent of such disagreement.     (h) Interest. Interest shall accrue on the unpaid amount of all indemnification obligationsactually paid by the Indemnified Party hereunder at the Prime Rate, such interest to be calculatedbased on
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the actual number of days elapsed from the date each indemnification obligation becomesdue and owing until paid in full and based on a 365-day year. For the purposes of this Agreement,“Prime Rate” shall mean the per annum interest rate publicly announced from time to time byTheWallStreetJournal as its prime rate of interest.     (i) Consequential and Other Damages**. EXCEPT AS OTHERWISE SET FORTH HEREIN, NEITHERPARTY SHALL BE LIABLE TO THE OTHER, FOR SPECIAL, INCIDENTAL, RESULTANT, CONSEQUENTIAL OR EXEMPLARYDAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, CLAIMS FOR LOST REVENUES, LOST PROFITS AND/ORLOSS OF PROSPECTIVE ECONOMIC ADVANTAGE, RESULTING FROM ANY PERFORMANCE OR FAILURE TO PERFORM OROTHERWISE ARISING UNDER THIS AGREEMENT.**17. Termination. This Agreement may be terminated:     (a) At any time by mutual consent of Seller and Buyer;     (b) By either Buyer or Seller if the Closing hereunder has not taken place on or before August11, 2006;     (c) By Seller if all the conditions in Section 15(a) have not been satisfied or waivedby the Closing Date;     (d) By Buyer if all the conditions set forth in Section 15(b) have not been satisfiedor waived by the Closing Date;In the event of termination of this Agreement by either Seller or Buyer in accordance herewith andabandonment of the transactions contemplated here pursuant to this Section, prompt written noticethereof shall be given to the other parties, and this Agreement shall terminate and thetransactions contemplated hereby shall be abandoned, without further action by any of the partieshereto. If this Agreement is terminated as provided herein: (i) None of the parties hereto nor any of their partners,directors, officers, shareholders, employees, agents, or Affiliates shall haveany liability or further obligation to the other parties or any of theirpartners, directors, officers, shareholders, employees, agents, or Affiliatespursuant to this Agreement with respect to which termination has occurred;provided, however, that if such termination was the result of any party’sbreach of any representation, warranty, covenant or other provision of thisAgreement, or an act or omission that resulted in the breach of anyrepresentation, warranty, covenant or other provision of this Agreement, theother party may seek any remedy at law or in equity to which they may beentitled for the violation or breach of this Agreement against the party whobreached such representation, warranty or other provision; and  (ii) The parties hereto shall continue to be bound by the provisionsof Sections 10, 12, 16, 17, 18(b) and 18(h).18. Miscellaneous Provisions.     (a) Each of Seller and Buyer represent and warrant to the other that no broker, finder orother Person is entitled to any brokerage fees, commissions or finder’s fees in connection with thetransactions contemplated hereby by reason of any action taken by the party making suchrepresentation
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     (b) Except as otherwise provided herein, all costs and expenses incurred in connection withthis Agreement, the other Transaction Documents and the transactions contemplated hereby andthereby will be paid by the party incurring such costs and expenses.     (c) Subject to the terms and conditions of this Agreement, each of the parties hereto will useall reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done,all things necessary, proper or advisable under applicable laws and regulations to consummate andmake effective the sale of the Purchased Assets pursuant to this Agreement. From time to timeafter the Closing Date, without further consideration, Seller will execute and deliver suchdocuments to Buyer as Buyer may reasonably request in order to more effectively vest in Buyer goodtitle to the Purchased Assets. From time to time after the Closing Date, without furtherconsideration, Buyer will execute and deliver such documents to Seller as they may reasonablyrequest in order to consummate the sale of the Purchased Assets pursuant to this Agreement.     (d) This Agreement may not be amended, modified or supplemented except by written agreementexecuted by Seller and Buyer.     (e) Except as otherwise provided in this Agreement, any failure of any of the parties tocomply with any obligation, representation, warranty, covenant, agreement or condition herein maybe waived by the party entitled to the benefits thereof only by a written instrument signed by theparty granting such waiver, but such waiver or failure to insist upon strict compliance with suchobligation, representation, warranty, covenant, agreement or condition shall not operate as awaiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permitsconsent by or on behalf of any party hereto, such consent shall be given in writing in a mannerconsistent with the requirements for a waiver of compliance as set forth in this Section18(e).     (f) All notices and other communications hereunder shall be in writing and shall be deemedgiven when delivered by hand or by facsimile transmission or mailed by registered or certified mail(return receipt requested), postage prepaid, to the parties at the following addresses (or at suchother address for a party as shall be specified by like notice; provided that notices of a changeof address shall be effective only upon receipt thereof):       (i) If to Seller, to:         Triad International Maintenance Corporation    623 Radar Road    Greensboro, North Carolina 27410    Facsimile: (336) 665-9508    Attention: Chief Executive Officer         With a copy to:         TIMCO Aviation Services, Inc.    623 Radar Road    Greensboro, North Carolina    Facsimile: (336) 665-9014    Attention: Chief Legal Officer       (ii) If to Buyer, to:         AeroTurbine, Inc.
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         2323 N.W. 82nd Ave.    Miami, Florida 33122-1522    Facsimile: (305) 590-2695    Attention: Nicolas Finazzo     (g) This Agreement and all of the provisions hereof shall be binding upon and inure to thebenefit of the parties hereto and their respective successors and permitted assigns. ThisAgreement and the rights, interests or obligations hereunder, may be assigned in whole or in partby Buyer to any person or entity without the prior written consent of Seller, provided, that, suchassignment shall not relieve Buyer of its obligations hereunder. All agreements, covenants,representations, warranties and other terms and provisions of this Agreement shall inure to thebenefit of and be enforceable by any such assignee. Seller shall not have the right to assign thisAgreement in whole or in part.     (h) The execution, interpretation and performance of this Agreement shall be governed by theinternal laws and judicial decisions of the State of New York, without regard to itsconflicts-of-laws principles. SELLER AND BUYER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURYTRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHERTRANSACTION DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN, INCLUDING CONTRACTCLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW, STATUTORY, LEGAL OR EQUITABLECLAIMS. SELLER AND BUYER REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATIONWITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTENCONSENT TO A TRIAL BY THE COURT.     (i) This Agreement may be executed in one or more counterparts, each of which shall be deemedan original, but all of which together shall constitute one and the same instrument.     (j) The article and section headings contained in this Agreement are solely for the purpose ofreference, are not part of the agreement of the parties and shall not in any way affect the meaningor interpretation of this Agreement.     (k) This Agreement, including the Schedules and Exhibits hereto and the other TransactionDocuments delivered pursuant to this Agreement, embody the entire agreement and understanding ofthe parties hereto in respect of the subject matter hereof. The Schedules, Exhibits and the otherTransaction Documents are an integral part of this Agreement and are incorporated by referenceherein. Each party hereto acknowledges to the other that it has not made any, and makes no,promises, representations, warranties, covenants or undertakings, other than those expressly setforth herein. This Agreement supersedes all prior agreements and understandings between theparties with respect to the transactions contemplated by this Agreement.     (l) Buyer waives compliance by Seller with respect to any bulk sales or other transfer lawsapplicable to the transactions contemplated hereunder. Seller shall indemnify and hold Buyerharmless from and against any and all losses, claims, costs, charges, and expenses arising out ofor resulting from noncompliance by Seller or Buyer with respect to any bulk sales laws or transferlaws applicable to the transactions contemplated hereunder.**[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]**
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     **IN WITNESS WHEREOF**, each of the parties hereto has caused this Agreement to be executed by itsduly authorized officer as of the date first set forth above.      **TRIAD INTERNATIONAL MAINTENANCE CORPORATION**