Exhibit 10.9


 


STOCK PURCHASE AGREEMENT


 


dated as of March 16, 2006


 


by and between


 


AERCAP, INC.


 


and


 


NICOLAS FINAZZO, ROSE ANN FINAZZO and ROBERT B. NICHOLS


with respect to all


outstanding capital stock of


AEROTURBINE, INC.


 

















 


TABLE OF CONTENTS


 


This
Table of Contents is not part of the Agreement to which it is attached but is
inserted for convenience only.


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
  No.

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I SALE OF
  SHARES AND CLOSING

  	
   

  	
  2

  
	
  1.01

  	
  Purchase and Sale

  	
   

  	
  2

  
	
  1.02

  	
  Purchase Price

  	
   

  	
  2

  
	
  1.03

  	
  Closing

  	
   

  	
  2

  
	
  1.04

  	
  Tax Payment Dividends

  	
   

  	
  2

  
	
  1.05

  	
  Further Assurances; Post-Closing Cooperation

  	
   

  	
  4

  
	
  1.06

  	
  Purchase Price Allocation

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE II
  REPRESENTATIONS AND WARRANTIES OF SELLERS

  	
   

  	
  5

  
	
  2.01

  	
  Power of Sellers

  	
   

  	
  5

  
	
  2.02

  	
  Authority

  	
   

  	
  6

  
	
  2.03

  	
  Organization of the Company

  	
   

  	
  6

  
	
  2.04

  	
  Capital Stock

  	
   

  	
  6

  
	
  2.05

  	
  Subsidiaries

  	
   

  	
  6

  
	
  2.06

  	
  Material Asset Sales

  	
   

  	
  7

  
	
  2.07

  	
  No Conflicts

  	
   

  	
  7

  
	
  2.08

  	
  Governmental Approvals and Filings

  	
   

  	
  7

  
	
  2.09

  	
  Books and Records

  	
   

  	
  8

  
	
  2.10

  	
  Financial Statements

  	
   

  	
  8

  
	
  2.11

  	
  Absence of Changes

  	
   

  	
  9

  
	
  2.12

  	
  No Undisclosed Liabilities

  	
   

  	
  11

  
	
  2.13

  	
  Taxes

  	
   

  	
  11

  
	
  2.14

  	
  Legal Proceedings

  	
   

  	
  13

  
	
  2.15

  	
  Compliance With Laws and Orders

  	
   

  	
  14

  
	
  2.16

  	
  Benefit Plans; ERISA

  	
   

  	
  14

  
	
  2.17

  	
  Real Property

  	
   

  	
  17

  
	
  2.18

  	
  Tangible Personal Property; Investment Assets

  	
   

  	
  17

  
	
  2.19

  	
  Intellectual Property Matters

  	
   

  	
  18

  
	
  2.20

  	
  Contracts

  	
   

  	
  19

  
	
  2.21

  	
  Aircraft-Related Assets and Aircraft Asset Leases

  	
   

  	
  20

  
	
  2.22

  	
  Licenses

  	
   

  	
  21

  
	
  2.23

  	
  Insurance

  	
   

  	
  21

  
	
  2.24

  	
  Affiliate Transactions

  	
   

  	
  22

  
	
  2.25

  	
  Employees; Labor Relations

  	
   

  	
  22

  
	
  2.26

  	
  Environmental Matters

  	
   

  	
  23

  
	
  2.27

  	
  Bank and Brokerage Accounts; Investment Assets

  	
   

  	
  24

  
	
  2.28

  	
  No Powers of Attorney

  	
   

  	
  24

  



 


i

















 


	
  2.29

  	
  Accounts Receivable

  	
   

  	
  24

  
	
  2.30

  	
  No Illegal Payments

  	
   

  	
  25

  
	
  2.31

  	
  Inventory

  	
   

  	
  25

  
	
  2.32

  	
  Product Liability Claims

  	
   

  	
  25

  
	
  2.33

  	
  Brokers

  	
   

  	
  26

  
	
  2.34

  	
  Disclosure

  	
   

  	
  26

  
	
  2.35

  	
  Indebtedness and Cash Position

  	
   

  	
  26

  
	
  2.36

  	
  Substantial Customers, Suppliers and Lessees

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  REPRESENTATIONS AND WARRANTIES OF PURCHASER

  	
   

  	
  27

  
	
  3.01

  	
  Organization

  	
   

  	
  27

  
	
  3.02

  	
  Authority

  	
   

  	
  27

  
	
  3.03

  	
  No Conflicts

  	
   

  	
  27

  
	
  3.04

  	
  Governmental Approvals and Filings

  	
   

  	
  27

  
	
  3.05

  	
  Legal Proceedings

  	
   

  	
  28

  
	
  3.06

  	
  Purchase for Investment

  	
   

  	
  28

  
	
  3.07

  	
  Financing

  	
   

  	
  28

  
	
  3.08

  	
  Brokers

  	
   

  	
  28

  
	
  3.09

  	
  Disclosure

  	
   

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV COVENANTS
  OF SELLERS

  	
   

  	
  28

  
	
  4.01

  	
  Regulatory and Other Approvals

  	
   

  	
  29

  
	
  4.02

  	
  HSR Filings

  	
   

  	
  29

  
	
  4.03

  	
  Investigation by Purchaser

  	
   

  	
  29

  
	
  4.04

  	
  No Solicitations

  	
   

  	
  29

  
	
  4.05

  	
  Conduct of Business

  	
   

  	
  30

  
	
  4.06

  	
  Financial Statements and Reports; Filings

  	
   

  	
  31

  
	
  4.07

  	
  Employee Matters

  	
   

  	
  31

  
	
  4.08

  	
  Certain Restrictions

  	
   

  	
  32

  
	
  4.09

  	
  Affiliate Transactions

  	
   

  	
  33

  
	
  4.10

  	
  Books and Records

  	
   

  	
  33

  
	
  4.11

  	
  Employment

  	
   

  	
  33

  
	
  4.12

  	
  Non-Competition

  	
   

  	
  33

  
	
  4.13

  	
  Notice and Cure

  	
   

  	
  33

  
	
  4.14

  	
  Fulfillment of Conditions

  	
   

  	
  34

  
	
  4.15

  	
  S Corporation Status

  	
   

  	
  34

  
	
  4.16

  	
  New Real Estate Lease

  	
   

  	
  34

  
	
  4.17

  	
  AeroTurbine Capital Shares Contribution

  	
   

  	
  34

  
	
  4.18

  	
  Sellers’ Account

  	
   

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE V COVENANTS
  OF PURCHASER

  	
   

  	
  35

  
	
  5.01

  	
  Regulatory and Other Approvals

  	
   

  	
  35

  
	
  5.02

  	
  HSR Filings

  	
   

  	
  36

  
	
  5.03

  	
  Employment

  	
   

  	
  36

  
	
  5.04

  	
  Non-Competition

  	
   

  	
  36

  
	
  5.05

  	
  Notice and Cure

  	
   

  	
  36

  



 


ii

















 


	
  5.06

  	
  Fulfillment of Conditions

  	
   

  	
  36

  
	
  5.07

  	
  New Real Estate Lease

  	
   

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI
  CONDITIONS TO OBLIGATIONS OF PURCHASER

  	
   

  	
  37

  
	
  6.01

  	
  Representations and Warranties

  	
   

  	
  37

  
	
  6.02

  	
  Performance

  	
   

  	
  37

  
	
  6.03

  	
  Certificates of Sellers

  	
   

  	
  37

  
	
  6.04

  	
  Orders and Laws

  	
   

  	
  37

  
	
  6.05

  	
  Regulatory Consents and Approvals

  	
   

  	
  37

  
	
  6.06

  	
  Third Party Consents

  	
   

  	
  38

  
	
  6.07

  	
  Resignations of Directors and Officers

  	
   

  	
  38

  
	
  6.08

  	
  Proceedings

  	
   

  	
  38

  
	
  6.09

  	
  Shareholder Equity Agreements

  	
   

  	
  38

  
	
  6.10

  	
  Employment Agreements

  	
   

  	
  38

  
	
  6.11

  	
  Non-Competition Agreement

  	
   

  	
  38

  
	
  6.12

  	
  AeroTurbine Capital Shares Contribution

  	
   

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII
  CONDITIONS TO OBLIGATIONS OF SELLERS

  	
   

  	
  38

  
	
  7.01

  	
  Representations and Warranties

  	
   

  	
  39

  
	
  7.02

  	
  Performance

  	
   

  	
  39

  
	
  7.03

  	
  Officers’ Certificates

  	
   

  	
  39

  
	
  7.04

  	
  Orders and Laws

  	
   

  	
  39

  
	
  7.05

  	
  Regulatory Consents and Approvals

  	
   

  	
  39

  
	
  7.06

  	
  Proceedings

  	
   

  	
  39

  
	
  7.07

  	
  Shareholder Equity Agreements

  	
   

  	
  39

  
	
  7.08

  	
  Employment Agreements

  	
   

  	
  40

  
	
  7.09

  	
  Release of Seller Guarantees

  	
   

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII TAX
  MATTERS AND POST-CLOSING TAXES

  	
   

  	
  40

  
	
  8.01

  	
  Tax Returns

  	
   

  	
  40

  
	
  8.02

  	
  Code §338(h)(10) Election

  	
   

  	
  41

  
	
  8.03

  	
  Tax Indemnification

  	
   

  	
  41

  
	
  8.04

  	
  Refunds

  	
   

  	
  42

  
	
  8.05

  	
  Tax Audits and Contests; Cooperation

  	
   

  	
  42

  
	
  8.06

  	
  Transfer Taxes

  	
   

  	
  43

  
	
  8.07

  	
  Exclusivity

  	
   

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX EMPLOYEE
  BENEFITS MATTERS

  	
   

  	
  44

  
	
  9.01

  	
  Employee Benefits Matters

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X SURVIVAL
  OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS

  	
   

  	
  45

  
	
  10.01

  	
  Survival of Representations, Warranties, Covenants and Agreements

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI
  INDEMNIFICATION

  	
   

  	
  45

  
	
  11.01

  	
  Tax Treatment of Indemnity Payments

  	
   

  	
  45

  



 


iii

















 


	
  11.02

  	
  Indemnification

  	
   

  	
  45

  
	
  11.03

  	
  Method of Asserting Claims

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII
  TERMINATION

  	
   

  	
  48

  
	
  12.01

  	
  Termination

  	
   

  	
  48

  
	
  12.02

  	
  Effect of Termination

  	
   

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII
  DEFINITIONS

  	
   

  	
  49

  
	
  13.01

  	
  Definitions

  	
   

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV
  MISCELLANEOUS

  	
   

  	
  57

  
	
  14.01

  	
  Notices

  	
   

  	
  57

  
	
  14.02

  	
  Entire Agreement

  	
   

  	
  59

  
	
  14.03

  	
  Expenses

  	
   

  	
  59

  
	
  14.04

  	
  Public Announcements

  	
   

  	
  59

  
	
  14.05

  	
  Confidentiality

  	
   

  	
  59

  
	
  14.06

  	
  Waiver

  	
   

  	
  60

  
	
  14.07

  	
  Amendment

  	
   

  	
  60

  
	
  14.08

  	
  No Third Party Beneficiary

  	
   

  	
  60

  
	
  14.09

  	
  No Assignment; Binding Effect

  	
   

  	
  60

  
	
  14.10

  	
  Headings

  	
   

  	
  61

  
	
  14.11

  	
  Consent to Jurisdiction

  	
   

  	
  61

  
	
  14.12

  	
  Invalid Provisions

  	
   

  	
  61

  
	
  14.13

  	
  Governing Law

  	
   

  	
  61

  
	
  14.14

  	
  Counterparts

  	
   

  	
  61

  



 


iv

















 


EXHIBITS


 




	
  EXHIBIT A

  	
  Employment
  Agreements

  
	
  EXHIBIT B

  	
  Non-Competition
  Agreement

  
	
  EXHIBIT C

  	
  Restricted
  Shares Purchase Agreement

  
	
  EXHIBIT D

  	
  Stockholders
  Agreement

  
	
  EXHIBIT E

  	
  Certificate of
  Sellers

  
	
  EXHIBIT F

  	
  Officer’s
  Certificate of Purchaser

  
	
  EXHIBIT G

  	
  Secretary’s
  Certificate of Purchaser

  






 


v

















 


This
STOCK PURCHASE AGREEMENT dated as of March 16, 2006 is made and entered into by
and between AerCap, Inc., a Delaware corporation (“Purchaser”), and Mr.
Nicolas Finazzo (“Nick”), Mrs. Rose Ann Finazzo (“Rose Ann”) and
Mr. Robert B. Nichols (“Bob”; Nick, Rose Ann and Bob, each a “Seller”,
and together, “Sellers”; and Nick and Bob, each a “Management Seller”;
and together, “Management Sellers”). 
Capitalized terms not otherwise defined herein have the meanings set
forth in Section 13.01.


 


WHEREAS,
Sellers own in the aggregate 45,000 shares of Series B common stock, $.001 par
value per share, of AeroTurbine, Inc., a Delaware corporation (the “Company”),
constituting all issued and outstanding shares of capital stock of the Company
(such shares being referred to herein as the “Shares”);


 


WHEREAS, AerCap, B.V. (“Parent”), is a limited
liability company formed and validly existing under the laws of the Netherlands
and the indirect parent and indirect owner of 100% of the authorized, issued
and outstanding common stock of Purchaser;


 


WHEREAS, as a condition to the purchase of the Shares
hereunder, (i) each Management Seller has agreed to enter into an employment
agreement with Parent and the Company substantially in the form of Exhibit A
hereto (the “Employment Agreements”) and (ii) each Seller has agreed to
enter into a non-competition agreement with Parent and the Company
substantially in the form of Exhibit B hereto (the “Non-Competition
Agreement”); 


 


WHEREAS,
Sellers desire to sell, and Purchaser desires to purchase, the Shares on the
terms and subject to the conditions set forth in this Agreement;


 


WHEREAS, upon the Closing of the purchase and sale of
the Shares pursuant to this Agreement, each Seller and each of Cerberus Fern
Holdings Ltd., Cerberus Fern Holdings II Ltd., Cerberus Fern Holdings III Ltd.
and Cerberus Fern Holdings IV Ltd., each a limited liability exempted company
incorporated under the laws of Bermuda (collectively, the “Cerberus Entities”)
will, on the Closing Date (as defined herein), enter into separate restricted
share purchase agreements, all four restricted share purchase agreements
substantially in the form of Exhibit C hereto (the “Restricted Shares
Purchase Agreement”) pursuant to which Sellers will purchase from the Cerberus
Entities six and a half percent (6.5%) of the common shares of certain entities
which hold the controlling interest in Parent; and


 


WHEREAS, upon the Closing of the purchase and sale of
the Shares pursuant to this Agreement, each Seller and the Cerberus Entities
will, on the Closing Date (as defined herein) enter into a stockholders
agreement substantially in the form of Exhibit D hereto (the “Stockholders
Agreement”; and together with the Restricted Shares Purchase Agreement, the
“Shareholder Equity Agreements”).


 


NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:


 

















 


ARTICLE
I



SALE OF SHARES AND CLOSING


 


1.01        Purchase
and Sale.  Sellers agree to sell to
Purchaser, and Purchaser agrees to purchase from Sellers, all of the right,
title and interest of Sellers in and to the Shares at the Closing on the terms
and subject to the conditions set forth in this Agreement.


 


1.02        Purchase
Price.  The aggregate purchase price
for the Shares and for the covenants of Sellers contained in the
Non-Competition Agreement (the “Purchase Price”) shall be equal to the
sum of $127,070,588 (i) plus
$1,200,000 for each full calendar month (or prorated portion thereof) occurring
during the period commencing August 1, 2005 and ending on the Closing Date (the
“Interim Period”) and (ii) plus the amount, if any, to be
paid by Purchaser to Sellers as provided for in Section 1.04 and/or minus the amount, if any, to be paid
by Sellers to Purchaser as provided for in Section 1.04.  The Purchase Price exclusive of the addition
thereto or subtraction therefrom referred in the foregoing clause (ii) is
referred to herein as the “Closing Purchase Price”.


 


1.03        Closing.  The Closing will take place at the offices of
Milbank, Tweed, Hadley and McCloy LLP, 1 Chase Manhattan Plaza, New York, New
York, 10005, or at such other place as Purchaser and Sellers mutually agree, at
10:00 A.M. local time, on the Closing Date. 
At the Closing, Purchaser will pay the Closing Purchase Price by wire
transfer of immediately available funds to such account as Sellers may
reasonably direct by written notice delivered to Purchaser at least two (2)
Business Days before the Closing Date. 
Simultaneously, Sellers will assign and transfer to Purchaser all of
Sellers’ right, title and interest in and to the Shares by delivering to
Purchaser certificates representing the Shares, in genuine and unaltered form,
duly endorsed in blank or accompanied by duly executed stock powers endorsed in
blank, with requisite stock transfer tax stamps, if any, attached.  At the Closing, there shall also be delivered
to Sellers and Purchaser the opinions, certificates and other Contracts,
documents and instruments to be delivered under Articles VI and VII.


 


1.04        Tax Payment Dividends.  


 


(a)       Sellers shall cause the Company to
prepare, in consultation with the independent accounting firm of the Company
and at the Company’s expense, and file with the relevant taxing authorities the
Company’s 2005 federal and state income tax returns.  The Company shall provide
Purchaser with a draft of the 2005 federal and state income tax returns at
least ten (10) Business Days prior to the due dates (including any extensions)
for filing such returns.  Purchaser shall
have the right to comment on the 2005 tax returns of the Company and its
Subsidiaries and those returns will be revised to reflect changes suggested by
the Purchaser unless the Company determines in good faith that Purchaser’s
suggested changes are contrary to applicable law or inconsistent with prior
practice.  A copy of such returns shall be provided to Purchaser
and Sellers not later than five (5) Business Days following the filing of such
returns.  The taxable income of the
Company shown on line 21 (and with respect to income not included on line 21,
such other line items as may be applicable) of IRS Form 1120S of such 2005
income tax returns of the Company (the “2005 Relevant Taxable Income”)
shall be used


 


2

















 


for
purposes of calculating amounts to be paid to or by Sellers or Purchaser
pursuant to this Section 1.04. 


 


(b)       Purchaser and Sellers shall
cause the Company to prepare, in consultation with the independent accounting
firm of the Company and consistent with prior practice, and file with the
relevant taxing authorities the Company’s federal and state income tax returns
for the period beginning January 1, 2006 and ending on the Closing Date (the “2006
Short Period”, and such returns, the “2006 Short Period Returns”).  A copy of the 2006 Short Period Returns shall
be provided to Purchaser and Sellers not later than five (5) Business Days
following the filing of such returns. 
The taxable income of the Company for such period (the “2006 Relevant Taxable Income”) shown on line 21(and with respect to income not included
on line 21, such other line items as may be applicable) of IRS Form
1120S of such 2006 Short Period Return, but adjusted to exclude any income, gain,
loss or deduction attributable to the Election reflected therein, shall be used
for purposes of calculating amounts to be paid to or by Sellers or Purchaser pursuant to this Section
1.04. 


 


(c)       In the event that the 2005
Relevant Taxable Income is a positive amount, then (A) Purchaser shall pay to
Sellers, on the later of the Closing Date or ten (10) Business Days following
delivery to Purchaser and Sellers of the Company’s 2005 income tax returns, the
amount, if any, by which (x) 35% (or 15% with respect to long term capital gain
items) of the 2005 Relevant Taxable Income,
which resulting amount shall be reduced by the Foreign Tax Credit Benefit (as
defined below) exceeds (y) $5,789,513 (the “Pre-Signing Dividend
Amount”) or (B) Sellers shall pay to Purchaser, within ten (10) Business
Days following delivery to Purchaser and Sellers of the Company’s 2005 income
tax returns, the amount, if any, by which (x) the Pre-Signing Dividend Amount
exceeds (y) 35% (or 15% with respect to long term capital gain items) of the 2005 Relevant Taxable Income, which resulting amount
shall be reduced by the Foreign Tax Credit Benefit for 2005.


 


(d)       In the event that the 2006
Relevant Taxable Income is a positive amount, then Purchaser shall pay to
Sellers, within ten (10) Business Days following delivery to Purchaser and
Sellers of the 2006 Short Period Returns, an amount equal to 35% (or 15% with
respect to long term capital gain items) of the 2006
Relevant Taxable Income, which amount shall be reduced by the Foreign Tax Credit
Benefit for the 2006 Short Period.


 


(e)       In the event that the 2005
Relevant Taxable Income or the 2006 Relevant Taxable Income is a negative
amount (for example, reduces the relevant gross income of Sellers for income
tax purposes), then Sellers will pay to Purchaser an amount such that (x) the
Pre-Signing Dividend Amount plus the aggregate amount, if any, paid to Sellers
pursuant to paragraph (c) and/or (d) above, minus the aggregate amount, if any,
paid by Sellers to the Purchaser pursuant to paragraph (c) above, and minus the
amount payable by Sellers to Purchaser pursuant to this paragraph (e), is equal
to, and does not exceed, (y) 35% (or 15% with respect to long term capital gain
items) of the sum of the 2005 Relevant
Taxable Income and the 2006 Relevant Taxable Income, which amount shall be
reduced by the Foreign Tax Credit Benefit for 2005 or the 2006 Short Period.


 


(f)        The Foreign Tax Credit
Benefit means, with respect to a taxable period, the amount by which the taxes
payable by Sellers in respect of such period may be reduced in


 


3

















 


respect of a credit for foreign taxes paid by the
Company or any Subsidiary (such benefit to be determined assuming the income,
gains, deductions and losses of the Company are the only items of income, gain,
deduction and loss of Sellers for the taxable period in question).


 


(g)       All payments made by or to
Sellers or Purchaser pursuant to this Section 1.04 shall be made by wire
transfer of immediately available funds to such account or accounts as are
designated in advance by the recipient thereof to the payor thereof.


 


(h)       Any dispute or objection by
Purchaser or Sellers as to the determination of the 2005 Relevant Taxable
Income or the 2006 Relevant Taxable Income, or the calculation of any payment
required to be made pursuant to this Section 1.04, shall be submitted to
and resolved by the Company’s independent accounting firm, whose resolution
thereof shall be final and binding on Purchaser and Sellers; provided, however,
that such calculation and payment shall be subject to subsequent adjustment
based upon final determination pursuant to any Tax audit, which Purchase and
Sellers agree shall be subject to the terms of Section 8.05 hereof.


 


(i)        To the extent Sellers are required
to report items of AeroTurbine Capital income, gain, deduction and loss on
their U.S. federal income tax returns by reason of AeroTurbine Capital being
treated as an S Corporation for U.S. federal income tax purposes, those items
that are required to be reported on Sellers’ individual tax returns shall be
included in the 2005 Relevant Taxable Income and 2006 Relevant Taxable Income
of the Company.


 


1.05        Further Assurances;
Post-Closing Cooperation.  


 


(a)       At any time or from time to
time after the Closing, Sellers shall execute and deliver to Purchaser such
other documents and instruments, provide such materials and information and
take such other actions as Purchaser may reasonably request more effectively to
vest title to the Shares in Purchaser and, to the full extent permitted by Law,
to put Purchaser in actual possession and operating control of the Company and
the Subsidiaries and their Assets and Properties and Books and Records, and
otherwise to cause Sellers to fulfill their obligations under this Agreement
and the Operative Agreements to which they are a party.


 


(b)       Following the Closing, each
party will afford the other party, its counsel and its accountants, during
normal business hours, reasonable access to the books, records and other data
relating to the Business or Condition of the Company in its possession with
respect to periods prior to the Closing and the right to make copies and
extracts therefrom, to the extent that such access may be reasonably required
by the requesting party in connection with (i) the preparation of Tax Returns,
(ii) the determination or enforcement of rights and obligations under this
Agreement, (iii) compliance with the requirements of any Governmental or
Regulatory Authority, (iv) the determination or enforcement of the rights and
obligations of any party to this Agreement or any of the Operative Agreements
or (v) in connection with any actual or threatened Action or Proceeding.  Further, each party agrees for a period extending
six (6) years after the Closing Date not to destroy or otherwise dispose of any
such books, records and other data unless such party shall first offer in
writing to surrender such books,


 


4

















 


records and other data to the other party and such
other party shall not agree in writing to take possession thereof during the
ten (10) day period after such offer is made.


 


(c)       If, in order properly to
prepare its Tax Returns, other documents or reports required to be filed with
Governmental or Regulatory Authorities or its financial statements or to
fulfill its obligations hereunder, it is necessary that a party be furnished
with additional information, documents or records relating to the Business or
Condition of the Company not referred to in paragraph (b) above, and such
information, documents or records are in the possession or control of the other
party, such other party shall use its best efforts to furnish or make available
such information, documents or records (or copies thereof) at the recipient’s
request, cost and expense.  Any
information obtained by Sellers in accordance with this paragraph shall be held
confidential by Sellers in accordance with Section 14.05.


 


1.06        Purchase Price
Allocation.  The Purchase Price shall
be allocated as follows:  $125,070,588 to
the Shares (the “Share Purchase Price”) and $2,000,000 to the
Non-Competition Agreement.  If, pursuant
to Section 8.02 herein, Purchaser determines to make an election under
Code Section 338(h)(10), Purchaser shall propose an allocation of the Share
Purchase Price (including any Company liabilities properly included in the
Purchase Price for purposes of determining the Purchase Price under Code
Section 338(h)(10)) among the assets of the Company and each Subsidiary in
accordance with Code Section 1060 and the Treasury Regulations promulgated
thereunder (and any similar provision of state, local or foreign law, as
appropriate), and shall notify Sellers of such proposed Purchase Price
allocation.  The parties shall cooperate
in good faith to agree on an allocation of the Purchase Price and once agreed
to, the allocation shall be binding on the parties (the “Allocation”).  If the parties cannot agree upon the
Allocation within 30 days of Purchaser’s delivery of its proposed allocation to
Sellers, the parties shall submit any disputes to the independent accountants
acceptable to both of the parties.  The
independent accountants shall finally and conclusively resolve any disputed
matters in accordance with Code Section 1060 within 30 days of receipt of the
submission.  Purchaser and Sellers shall
report,  and file Tax Returns (including
but not limited to Internal Revenue Service Form 8594) in all respects and for
all purposes consistent with the Allocation. 
Neither Purchaser nor Sellers shall take any position (whether in
audits, Tax Returns or otherwise) that is inconsistent with the Allocation
unless required to do so by applicable law.


 


ARTICLE
II



REPRESENTATIONS AND WARRANTIES OF SELLERS


 


Sellers,
jointly and severally, hereby represent and warrant to Purchaser as follows:


 


2.01        Power of Sellers.  Each Seller has full power and authority to
execute and deliver this Agreement and the Operative Agreements to which it is
a party and to perform its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby, including without limitation
to own, hold, sell and transfer (pursuant to this Agreement) the Shares.


 


5

















 


2.02        Authority.  This Agreement has been duly and validly
executed and delivered by each Seller and constitutes, and upon the execution
and delivery by each Seller of the Operative Agreements to which it is a party,
such Operative Agreements will constitute, legal, valid and binding obligations
of each Seller enforceable against each Seller in accordance with its terms.


 


2.03        Organization of the
Company.  The Company is a
corporation duly organized, validly existing and in good standing under the
Laws of the State of Delaware, and has full corporate power and authority to
conduct its business as and to the extent now conducted and to own, use and
lease its Assets and Properties.  Section 2.03
of the Disclosure Schedule lists all lines of business in which the Company
is participating or engaged.  The Company
is duly qualified, licensed or admitted to do business and is in good standing
in those jurisdictions specified in Section 2.03 of the Disclosure Schedule,
which are the only jurisdictions where the failure to be so qualified, licensed
or admitted to do business could reasonably be expected to have a Material
Adverse Effect.  The name of each
director and officer of the Company on the date hereof, and the position with
the Company held by each, are listed in Section 2.03 of the Disclosure
Schedule.  Sellers have prior to the
execution of this Agreement delivered to Purchaser true and complete copies of
the certificate of incorporation and by-laws of the Company as in effect on the
date hereof.


 


2.04        Capital Stock.  The authorized capital stock of the Company
consists solely of 60,000 shares of Common Stock, $.001 par value per share, of
which 15,000 shares are Series “A” Common Stock, none of which is issued or
outstanding, and 45,000 shares are Series “B” Common Stock and constitute all
the Shares.  The Shares are duly
authorized, validly issued, outstanding, fully paid and nonassessable.  Sellers own the Shares, beneficially and of
record, free and clear of all Liens except as set forth in Section 2.04 of
the Disclosure Schedule.  Except for
this Agreement and as set forth in Section 2.04 of the Disclosure Schedule,
there are no outstanding Options with respect to the Company.  The delivery of a certificate or certificates
at the Closing representing the Shares in the manner provided in Section
1.03 will transfer to Purchaser good and valid title to the Shares, free
and clear of all Liens.


 


2.05        Subsidiaries.  Section 2.05 of the Disclosure Schedule
lists the name of each Subsidiary and all lines of business in which each
Subsidiary is participating or engaged. 
Each Subsidiary is a corporation duly organized, validly existing and in
good standing under the Laws of its jurisdiction of incorporation identified in
Section 2.05 of the Disclosure Schedule, and has full corporate power
and authority to conduct its business as and to the extent now conducted and to
own, use and lease its Assets and Properties. 
Each Subsidiary is duly qualified, licensed or admitted to do business
and is in good standing in those jurisdictions specified in Section 2.05 of
the Disclosure Schedule, which are the only jurisdictions in which the
ownership, use or leasing of such Subsidiary’s Assets and Properties, or the
conduct or nature of its business, makes such qualification, licensing or
admission necessary.  Section 2.05 of
the Disclosure Schedule lists for each Subsidiary the amount of its
authorized capital stock, the amount of its outstanding capital stock and the
record owners of such outstanding capital stock.  All of the outstanding shares of capital stock
of each Subsidiary have been duly authorized and validly issued, are fully paid
and nonassessable, and are owned, beneficially and of record, by the Company or
Subsidiaries wholly owned by the Company, free and clear of all Liens.  There are no outstanding Options with respect
to any Subsidiary.  The name of each
director and officer of


 


6

















 


each Subsidiary on the
date hereof, and the position with such Subsidiary held by each, are listed in Section
2.05 of the Disclosure Schedule. 
Sellers have prior to the execution of this Agreement delivered to
Purchaser true and complete copies of the certificate or articles of
incorporation and by-laws (or other comparable corporate charter documents) of
each of the Subsidiaries as in effect on the date hereof.


 


2.06        Material Asset Sales.  Except as set forth in Section 2.06 of the
Disclosure Schedule, and except for sales of aircraft, engines and spare
parts by the Company or any Subsidiary in the ordinary course of business, (i)
since July 31, 2005, neither the Company nor any Subsidiary has effected a sale
or distribution of all or any substantial portion of its assets of and (ii)
there are no existing agreements, options, commitments or rights with, of or to
any Person to acquire any material assets or rights of the Company, any
Subsidiary or any interest therein.


 


2.07        No Conflicts.  The execution and delivery by Sellers of this
Agreement do not, and the execution and delivery by Sellers of the Operative
Agreements to which they are party, the performance by Sellers of their
obligations under this Agreement and such Operative Agreements and the
consummation of the transactions contemplated hereby and thereby will not:


 


(a)           conflict with or result
in a violation or breach of any of the terms, conditions or provisions of the
certificate or articles of incorporation or by-laws (or other comparable
corporate charter documents) of the Company or any Subsidiary; 


 


(b)           subject to obtaining
the consents, approvals and actions, making the filings and giving the notices
disclosed in Section 2.07 of the Disclosure Schedule and under the
HSR Act, conflict with or result in a violation or breach of any term or
provision of any Law or Order applicable to Sellers, the Company or any
Subsidiary or any of their respective Assets and Properties; or


 


(c)           except as disclosed in Section 2.07(c)
of the Disclosure Schedule or required under the HSR Act, (i) conflict
with or result in a violation or breach of, (ii) constitute (with or without
notice or lapse of time or both) a default under, (iii) require Sellers, the
Company or any Subsidiary to obtain any consent, approval or action of, make
any filing with or give any notice to any Person as a result or under the terms
of, (iv) result in or give to any Person any right of termination,
cancellation, acceleration or modification in or with respect to, (v) result in
or give to any Person any additional rights or entitlement to increased,
additional, accelerated or guaranteed payments under, or (vi) result in the creation
or imposition of any Lien upon Sellers, the Company or any Subsidiary or any of
their respective Assets and Properties under, any Contract or License to which
Sellers, the Company or any Subsidiary is a party or by which any of their
respective Assets and Properties are bound.


 


2.08        Governmental Approvals
and Filings.  Except as disclosed in Section 2.08
of the Disclosure Schedule and filings required under the HSR Act, no
consent, approval or action of, filing with or notice to any Governmental or Regulatory
Authority on the part of Sellers, the Company or any Subsidiary is required in
connection with the execution, delivery and performance of this Agreement or
any of the Operative Agreements or the consummation of


 


7

















 


the transactions contemplated hereby or thereby except
where the failure to obtain such consent, approval or action, make such filing
or provide such notice would not have a Material Adverse Effect.


 


2.09        Books and Records.  The minute books and other similar records of
the Company and the Subsidiaries as made available to Purchaser prior to the
execution of this Agreement contain a true and complete record, in all material
respects, of all action taken at all meetings and by all written consents in
lieu of meetings of the stockholders, the boards of directors and committees of
the boards of directors of the Company and the Subsidiaries.  The stock transfer ledgers and other similar
records of the Company and the Subsidiaries as made available to Purchaser
prior to the execution of this Agreement accurately reflect all record
transfers prior to the execution of this Agreement in the capital stock of the
Company and the Subsidiaries.  Except as
set forth in Section 2.09 of the Disclosure Schedule, neither the
Company nor any Subsidiary has any of its Books and Records recorded, stored,
maintained, operated or otherwise wholly or partly dependent upon or held by
any means (including any electronic, mechanical or photographic process,
whether computerized or not) which (including all means of access thereto and
therefrom) are not under the exclusive ownership and direct control of the
Company or a Subsidiary.


 


2.10        Financial Statements.  Prior to the execution of this Agreement,
Sellers have delivered to Purchaser true and complete copies of the following
financial statements:


 


(a)           the
audited balance sheets of the Company and its consolidated subsidiaries as of
December 31, 2003 and 2004, and the related audited consolidated statements of
operations, stockholders’ equity and cash flows for each of the fiscal years
then ended, together with a true and correct copy of the report on such audited
information by KPMG International, and all letters from such accountants with
respect to the results of such audits;


 


(b)           the
unaudited balance sheets of the Company and its consolidated subsidiaries as of
the last Business Day of March, June, September and December, 2004 and the last
Business Day of March, June and September 2005, and the related unaudited consolidated
statements of operations and stockholders’ equity for the portion of the fiscal
year then ended; and


 


(c)           the
unaudited estimated balance sheets of the Company and its consolidated
subsidiaries as of July 31, 2005, and the related unaudited estimated consolidated
statements of operations and stockholders’ equity for the portion of the fiscal
year then ended.


 


Except as set forth in the notes thereto and as
disclosed in Section 2.10 of the Disclosure Schedule, all such
financial statements (i) were prepared in accordance with GAAP, except that the
unaudited financial statements do not have footnotes, (ii) fairly present the
consolidated financial condition and results of operations of the Company and
its consolidated subsidiaries as of the respective dates thereof and for the
respective periods covered thereby, subject to normal year-end adjustments in
the case of the unaudited financial statements, and (iii) were compiled from
the Books and Records of the Company and the Subsidiaries regularly maintained
by


 


8

















 


management and used to prepare the financial
statements of the Company and the Subsidiaries in accordance with the
principles stated therein.  The Company
and the Subsidiaries have maintained their respective Books and Records in a
manner sufficient to permit the preparation of financial statements in
accordance with GAAP.  Except for those
Subsidiaries listed in Section 2.10 of the Disclosure Schedule, the
financial condition and results of operations of each Subsidiary are, and for
all periods referred to in this Section 2.10 have been, consolidated
with those of the Company.


 


2.11        Absence of Changes.  Except for the execution and delivery of this
Agreement and the transactions to take place pursuant hereto on or prior to the
Closing Date, since December 31, 2004 there has not been any event or
development which, individually or together with other such events, has had or
could reasonably be expected to have a Material Adverse Effect.  Without limiting the foregoing, except as
disclosed in Section 2.11 of the Disclosure Schedule or as
explicitly disclosed in any other Section of the Disclosure Schedule, there has
not occurred since December 31, 2004 and the date hereof:


 


(i)            any declaration, setting aside or payment
of any dividend or other distribution in respect of the capital stock of the
Company or any Subsidiary not wholly owned by the Company, or any direct or
indirect redemption, purchase or other acquisition by the Company or any
Subsidiary of any such capital stock of or any Option with respect to the
Company or any Subsidiary not wholly owned by the Company;


 


(ii)           any authorization, issuance, sale or
other disposition by the Company or any Subsidiary of any shares of capital
stock of or Option with respect to the Company or any Subsidiary, or any
modification or amendment of any right of any holder of any outstanding shares
of capital stock of or Option with respect to the Company or any Subsidiary;


 


(iii)          (x)
any increase in the salary, wages or other compensation of any officer,
employee or consultant of the Company or any Subsidiary whose annual salary is,
or after giving effect to such change would be, $100,000 or more; (y) any
establishment or modification of (A) incentive compensation arrangements, (B)
targets, goals, pools or similar provisions in respect of any fiscal year under
any Benefit Plan, employment-related Contract or other employee compensation
arrangement or (C) salary ranges, increase guidelines or similar provisions in respect
of any Benefit Plan, employment-related Contract or other employee compensation
arrangement; or (z) any adoption, entering into or becoming bound by any
Benefit Plan, employment-related Contract or collective bargaining agreement,
or amendment, modification or termination (partial or complete) of any Benefit
Plan, employment-related Contract or collective bargaining agreement, except to
the extent required by applicable Law and, in the event compliance with legal
requirements presented options, only to the extent the option which the Company
or Subsidiary reasonably believed to be the least costly was chosen;


 


(iv)           (A) incurrences by the Company or any
Subsidiary of Indebtedness in an aggregate principal amount exceeding
$1,000,000, or (B) any voluntary purchase, cancellation, prepayment or complete
or partial discharge in advance of a scheduled


 


9

















 


payment
date with respect to, or waiver of any right of the Company or any Subsidiary
under, any Indebtedness of or owing to the Company or any Subsidiary;


 


(v)           any physical damage, destruction or other
casualty loss (whether or not covered by insurance) affecting any of the plant,
real or personal property (including aircraft, engines and spare parts) or
equipment of the Company or any Subsidiary in an aggregate amount exceeding $250,000,


 


(vi)          any material change in (x) any pricing,
investment, accounting, financial reporting, inventory, credit, allowance or
Tax practice or policy of the Company or any Subsidiary, or (y) any method of
calculating any bad debt, contingency or other reserve of the Company or any
Subsidiary for accounting, financial reporting or Tax purposes, or any change
in the fiscal year of the Company or any Subsidiary;


 


(vii)         any
write-off or write-down of or any determination to write off or write down any
of the Assets and Properties of the Company or any Subsidiary in an aggregate
amount exceeding $100,000;


 


(viii)        any
acquisition or disposition of, or incurrence of a Lien (other than a Permitted
Lien) on, any Assets and Properties of the Company or any Subsidiary, other
than in the ordinary course of business consistent with past practice;


 


(ix)          any (x) amendment of the articles of
incorporation or by-laws or other comparable corporate charter documents of the
Company or any Subsidiary, (y) recapitalization, reorganization, liquidation or
dissolution of the Company or any Subsidiary or (z) merger or other business
combination involving the Company or any Subsidiary and any other Person;


 


(x)           any entering into, amendment,
modification, termination (partial or complete) or granting of a waiver under
or giving any consent with respect to (A) any Contract which is required (or
had it been in effect on the date hereof would have been required) to be
disclosed in the Disclosure Schedule pursuant to Section 2.20 or
(B) any material License held by the Company or any Subsidiary;


 


(xi)          capital expenditures or commitments for
additions to property, plant or equipment of the Company and the Subsidiaries
constituting capital assets in an amount exceeding $250,000 for each such
expenditure or commitment;


 


(xii)         expenditures
or requirements to make an expenditure on those Aircraft-Related Assets that
have a maintenance reserve tracking account which have been leased by the
Company or any Subsidiary to any third party, other than expenditures in
amounts consistent with the related maintenance reserves;


 


(xiii)        any
commencement or termination by the Company or any Subsidiary of any line of
business;


 


(xiv)        any
transaction by the Company or any Subsidiary with Sellers or Affiliate (other
than the Company or any Subsidiary) of Sellers (A) outside the ordinary
course of


 


10

















 


business
consistent with past practice or (B) other than on an arm’s-length basis, other
than pursuant to any Contract in effect since December 31, 2004 and disclosed
pursuant to Section 2.20 of the Disclosure Schedule;


 


(xv)         any entering into of a Contract to do or
engage in any of the foregoing after the date hereof; or


 


(xvi)        any
other transaction involving or development affecting the Company or any
Subsidiary outside the ordinary course of business consistent with past
practice.


 


2.12        No Undisclosed
Liabilities.  Except as reflected or
reserved against in the balance sheet included in the Audited Financial
Statements or in the notes thereto or as disclosed in Section 2.12 of
the Disclosure Schedule or any other Section of the Disclosure Schedule,
there are no Liabilities against, relating to or affecting the Company or any
Subsidiary or any of their respective Assets and Properties, other than
Liabilities (i) incurred in the ordinary course of business consistent with
past practice or (ii) which, individually or in the aggregate, are not material
to the Business or Condition of the Company.


 


2.13        Taxes.  Except as set forth in Section 2.13 of the
Disclosure Schedule:


 


(a)           The
Company has filed all Tax Returns required to be filed by applicable law prior
to the date hereof.  All such Tax Returns
were (and, as to Tax Returns not filed as of the date hereof, will be) true,
complete and correct and filed on a timely basis.  The Company (and each Subsidiary) has paid
all Taxes that are due, or claimed or asserted by any taxing authority to be
due, from the Company (or such Subsidiary) for the periods covered by the Tax
Returns.  


 


(b)           To
the Knowledge of Sellers, no jurisdiction (whether within or without the United
States) in which the Company or any Subsidiary has not filed a specific Tax
Return has asserted that the Company or such Subsidiary is required to file
such Tax Return in such jurisdiction.  Section
2.13 of the Disclosure Schedule lists all states and nations in which the
Company or any Subsidiary files any Tax Returns and indicates in the case of
income or franchise tax filings whether such filings are made on a
consolidated, combined or unitary basis and the
state allocation factors for the most recent taxable year for which filings
have been made.


 


(c)           The
Company (and each Subsidiary) has established (and until the Closing Date will
maintain) on its books and records reserves adequate to pay all Taxes not yet
due and payable and such reserves are clearly identified as reserves for
current Taxes.


 


(d)           There
are no Tax liens upon the assets of the Company (or any Subsidiary) except
liens for Taxes not yet due and payable.


 


(e)           The
Company (and each Subsidiary) has complied (and until the Closing Date will
comply) with all applicable laws, rules, and regulations relating to the
payment and withholding of Taxes (including withholding and reporting
requirements under Code §§1441 through 1464, 3401 through 3406, 6041 and 6049
and similar provisions under any other laws) and has, within the time and in
the manner prescribed by law, withheld


 


11

















 


from employee wages and paid over to the proper
governmental authorities all required amounts.


 


(f)            Neither
the Company nor any Subsidiary has requested (and no request has been made on
its behalf) any extension of time within which to file any Tax Return which
extension is currently effective. 
Neither the Company nor any Subsidiary has executed any outstanding
waivers or comparable consents regarding the application of the statute of
limitations for any Taxes or Tax Returns (and no extensions have been executed
on their behalf).  The statute of
limitations for the assessment of all Taxes has expired for all applicable Tax
Returns of the Company (or any Subsidiary) through December 31, 2001. 


 


(g)           No
deficiency for any Taxes has been suggested, proposed, asserted or assessed
against the Company (or any Subsidiary) that has not been resolved and paid in
full; no audits or other administrative proceedings or court proceedings are
presently pending or to the Knowledge of Sellers threatened with regard to any
Taxes or Tax Returns of the Company (or any Subsidiary); and all prior adjustments
of federal Tax liability resulting from the resolution of any audit or proposed
deficiency have been reported to appropriate state and local taxing authorities
and all resulting Taxes payable to state and local taxing authorities have been
paid.


 


(h)           There
is no power of attorney currently in force with respect to any Tax matter
involving the Company (or any Subsidiary).


 


(i)            Neither
the Company nor any Subsidiary has received any written ruling of a taxing
authority relating to Taxes, or any other written and legally binding agreement
with a taxing authority relating to Taxes.


 


(j)            The
Company has made available (or, in the case of Tax Returns to be filed on or
before the Closing Date, will make available) to Purchaser complete and
accurate copies of all Tax Returns and associated work papers filed by or on
behalf of the Company for all taxable years ending on or prior to the Closing Date.


 


(k)           No agreement as to
indemnification for, contribution to, or payment of Taxes exists between the
Company or any Subsidiary and any other Person (other than the Company or a
Subsidiary), including pursuant to any tax sharing agreement, lease agreement,
purchase or sale agreement, partnership agreement or any other agreement,
except where the Company or such Subsidiary is the beneficiary of, or Person
entitled to, such indemnification, contribution or payment.


 


(l)            Neither
the Company nor any Subsidiary has any liability for Taxes of any Person under
Treasury Regulation 1.1502-6 (or any similar provision of any state, local or
foreign law), or as a transferee or successor, or by contract or otherwise.


 


(m)          Neither
the Company nor any Subsidiary is or has been a “distributing corporation” or a
“controlled corporation” within the meaning of Code section 355.


 


12

















 


(n)           Neither
the Company nor any Subsidiary is a party to any agreement, contract, or
arrangement that would result, separately or in the aggregate, in the payment
of any “excess parachute payments” within the meaning of Code Section 280G or
in the disallowance of any deductions pursuant to Code Section 162(m).


 


(o)           No
property of the Company (or any Subsidiary) is property that the Company or any
party to this transaction is or will be required to treat as being owned by
another person pursuant to the provisions of Code Section 168(f)(8) (as in
effect prior to its amendment by the Tax Reform Act of 1986) or property
described in Code Section 168(g)(1)(A) or is “tax-exempt use property” or “tax-exempt
bond financed property” within the meaning of Code Section 168.


 


(p)           Neither
the Company nor any Subsidiary is required to include in income any adjustment
pursuant to Code §481(a) by reason of a voluntary change in accounting method
initiated by the Company (or any Subsidiary), and the Internal Revenue Service
(“IRS”) has not proposed an adjustment or change in accounting
method.  No income of the Company or any
Subsidiary that economically accrued prior to the Closing will be recognized as
taxable income after the Closing as a result of the Company or a Subsidiary
having been a party to an installment sale, an open transaction or otherwise.  


 


(q)           The
Company is qualified as an S Corporation within the meaning of Code Section
1361 and will continue to be treated as an S Corporation until the Closing
causes termination of S Corporation status pursuant to Code Section 1362(d)(2).  The Company has built-in gains attributable
to periods during which it was taxed as a C Corporation as provided in Section
2.13(q) of the Disclosure Schedule and has no other unrealized built-in
gains.  The Company has accumulated
earnings and profits attributable to periods that the Company was taxed as a C
Corporation for federal tax purposes as provided in Section 2.13(q) of the
Disclosure Schedule.  Each state in
which the Company is required to file tax returns respects the Company’s status
as an S Corporation and conforms to the federal income tax treatment of S
Corporations.


 


(r)            Neither
the Company nor any Subsidiary has participated in or cooperated with any
international boycott with in the meaning of Code section 999.


 


(s)            The
Company is not a United States real property holding corporation within the
meaning of Code section 897(c)(2).


 


(t)            The
Company (and each Subsidiary) has disclosed on its federal income Tax Return
all positions taken therein that could give rise to a substantial
understatement of federal income Tax within the meaning of Code section
6662.  Neither the Company nor any
Subsidiary has engaged in any reportable transactions that were required to be
disclosed pursuant to Treasury Regulation section 1.6011-4.


 


2.14        Legal Proceedings.  Except as disclosed in Section 2.14
of the Disclosure Schedule (with paragraph references corresponding to
those set forth below):


 


(a)           there are no Actions or
Proceedings pending or, to the Knowledge of Sellers, threatened against,
relating to or affecting Sellers, the Company or any


 


13

















 


Subsidiary or any of their respective Assets and
Properties which (i) could reasonably be expected to result in the issuance of
an Order restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any
of the Operative Agreements or otherwise result in a material diminution of the
benefits contemplated by this Agreement or any of the Operative Agreements to
Purchaser, or (ii) if determined adversely to Sellers, the Company or a
Subsidiary, could reasonably be expected to (x) result in any injunction or
other equitable relief against the Company or any Subsidiary that would
interfere in any material respect with its business or operations or (y) Losses
by the Company or any Subsidiary, individually or in the aggregate with Losses
in respect of other such Actions or Proceedings, exceeding $1,000,000;


 


(b)           there are no facts or
circumstances Known to Sellers that could reasonably be expected to give rise
to any Action or Proceeding that would be required to be disclosed pursuant to
clause (a) above; and


 


(c)           there are no Orders
outstanding against the Company or any Subsidiary.


 


Prior to the execution of this Agreement, Sellers have
delivered to Purchaser all responses of counsel for the Company and the
Subsidiaries to auditors’ requests for information delivered in connection with
the Audited Financial Statements (together with any updates provided by such
counsel) regarding Actions or Proceedings pending or threatened against,
relating to or affecting the Company or any Subsidiary.


 


2.15        Compliance With Laws
and Orders.  Except as disclosed in Section 2.15
of the Disclosure Schedule, none of Sellers, the Company or any Subsidiary
is or has at any time within the last five (5) years been, or is or has been
subject to any Action or Proceeding alleging that it is or has at any time
within the last five (5) years been, or has received any notice that it is or
has at any time within the last five (5) years been, in violation of or in
default under, in any material respect, any Law or Order applicable to the
Company or any Subsidiary or any of their respective Assets and Properties.


 


2.16        Benefit Plans; ERISA.  


 


(a)       Section 2.16(a) of the
Disclosure Schedule contains a true and complete list and description
of each of the Benefit Plans.  Neither
the Company nor any Subsidiary has scheduled or agreed upon future increases of
benefit levels (or creations of new benefits) with respect to any Benefit Plan,
and no such increases or creation of benefits have been proposed, made the
subject of representations to employees or requested or demanded by employees
under circumstances which make it reasonable to expect that such increases will
be granted.  Except as disclosed in Section 2.16(a)
of the Disclosure Schedule, no loan is outstanding between the Company or
any Subsidiary and any employee.


 


(b)       Neither the Company nor any
Subsidiary maintains or is obligated to provide benefits under any life,
medical or health plan which provides benefits to retirees or other terminated
employees other than benefit continuation rights under the Consolidated Omnibus
Budget Reconciliation of 1985, as amended. 



 


14

















 


(c)       Except as set forth in Section
2.16(c) of the Disclosure Schedule, each Benefit Plan covers only employees
who are employed by the Company or a Subsidiary (or former employees or
beneficiaries with respect to service with the Company or a Subsidiary.


 


(d)       Neither the Company, any
Subsidiary, any ERISA Affiliate nor any other corporation or organization
controlled by or under common control with any of the foregoing within the
meaning of Section 4001 of ERISA has at any time contributed to a Defined
Benefit Plan in any “multiemployer plan”, as that term is defined in Section
4001 of ERISA.


 


(e)       Each of the Benefit Plans
is, and its administration is and has been since inception, in all material
respects in compliance with, and neither the Company nor any Subsidiary has
received any claim or notice that any such Benefit Plan is not in compliance
with, all applicable Laws and Orders and prohibited transactions exemptions,
including the requirements of ERISA, the Code, the Age Discrimination in Employment
Act, the Equal Pay Act and Title VII of the Civil Rights Act of 1964.  Each Qualified Plan either has received a
favorable determination letter from the IRS, or is maintained under and substantially
in accordance with a prototype plan that is the subject of a favorable opinion
letter issued by the IRS, as to the Plan’s tax qualified status under Section
401(a) of the Code, and, to the Knowledge of Sellers, nothing has occurred that
could adversely affect the Plan’s tax qualified status.  Each Benefit Plan which is intended to
provide for the deferral of income, the reduction of salary or other
compensation or to afford other Tax benefits is in all material respects in
compliance with the applicable provisions of the Code or other Laws required in
order to provide such Tax benefits.


 


(f)        None of the Sellers, the
Company nor any Subsidiary is in default in performing any of its contractual
obligations under any of the Benefit Plans or any related trust agreement or
insurance contract.  All contributions and
other payments required to be made by Sellers, the Company or any Subsidiary to
any Benefit Plan with respect to any period ending before or at or including
the Closing Date have been made or reserves adequate for such contributions or
other payments have been or will be set aside therefor and have been or will be
reflected in Financial Statements in accordance with GAAP.  There are no outstanding liabilities of any
Benefit Plan other than liabilities for benefits to be paid to participants in
such Benefit Plan and their beneficiaries in accordance with the terms of such
Benefit Plan.


 


(g)       No event has occurred, and
there exists no condition or set of circumstances in connection with any
Benefit Plan, under which the Company or any Subsidiary, directly or indirectly
(through any indemnification agreement or otherwise), could reasonably be
expected to be subject to any material risk of liability under Section 409 of
ERISA, Section 502(i) of ERISA, Title IV of ERISA or Section 4975 of the
Code.


 


(h)       No transaction contemplated
by this Agreement will result in liability to the PBGC under Section
302(c)(ii), 4062, 4063, 4064 or 4069 of ERISA, or otherwise, with respect to
the Company, any Subsidiary, Purchaser or any corporation or organization
controlled by or under common control with any of the foregoing within the
meaning of Section 4001 of ERISA, and no event or condition exists or has
existed which could reasonably


 


15

















 


be expected to result in any such liability with
respect to Purchaser, the Company, any Subsidiary or any such corporation or
organization.


 


(i)        No benefit under any Benefit
Plan, including, without limitation, any severance or parachute payment plan or
agreement, will be established or become accelerated, vested, funded or payable
by reason of any transaction contemplated under this Agreement.


 


(j)        To the Knowledge of Sellers,
there are no pending or threatened claims by or on behalf of any Benefit Plan,
by any Person covered thereby, or otherwise, which allege violations of Law
which could reasonably be expected to result in liability on the part of
Purchaser, the Company, any Subsidiary or any fiduciary of any such Benefit
Plan, nor is there any basis for such a claim.


 


(k)       No benefit under any Benefit
Plan, including, without limitation, any severance or parachute payment plan or
agreement, will be established or become accelerated, vested, funded or payable
by reason of any transaction contemplated under this Agreement and no Benefit
Plan provides for any additional amounts to be paid with respect to any tax
imposed under Section 4999 of the Code. 
Neither the Company nor any Subsidiary have incurred any obligation to
make (or possibly make) any payments that (A) will be non-deductible under, or
would otherwise constitute a “parachute payment” within the meaning of, Section
280G of the Code (or any corresponding provision of state, local or foreign
income Tax law) or (B) are or may be subject to the imposition of an excise tax
under Section 4999 of the Code.


 


(l)        Complete and correct copies
of the following documents have been furnished to Purchaser prior to the
execution of this Agreement:


 


(i)            the Benefit Plans and any predecessor
plans referred to therein, any related trust agreements, and service provider
agreements, insurance contracts or agreements with investment managers,
including without limitation, all amendments thereto;


 


(ii)           current summary Plan descriptions of each
Benefit Plan subject to ERISA, and any similar descriptions of other Benefit
Plans, to the extent such summaries exist;


 


(iii)          the
most recently-filed Form 5500 and Schedules thereto for each Benefit Plan
subject to ERISA reporting requirements;


 


(iv)          the most recent determination or opinion
of the IRS, whichever applies, with respect to the qualified status of each
Qualified Plan;


 


(v)           the most recent accountings with respect
to any Benefit Plan funded through a trust;


 


(vi)          the most recent actuarial report of the
qualified actuary of any Subject Defined Benefit Plan or any other Benefit Plan
with respect to which actuarial valuations are conducted; and


 


(vii)         all
qualified domestic relations orders or other orders governing payments from any
Benefit Plan.


 


16

















 


2.17        Real Property.  


 


(a)       Neither the Company nor any
Subsidiary owns any real property.  Section 2.17(a)
of the Disclosure Schedule contains a true and correct list of each parcel
of real property leased by the Company or any Subsidiary.


 


(b)       Except as disclosed in Section 2.17(b)
of the Disclosure Schedule, the Company and the Subsidiaries have adequate
rights of ingress and egress with respect to the real property listed in Section 2.17(a)
of the Disclosure Schedule and all buildings, structures, facilities,
fixtures and other improvements thereon. 
To the Knowledge of Sellers, none of such real property, buildings,
structures, facilities, fixtures or other improvements, or the use thereof,
contravenes or violates any building, zoning, administrative, occupational safety
and health or other applicable Law in any material respect (whether or not
permitted on the basis of prior nonconforming use, waiver or variance).


 


(c)       The Company or a Subsidiary
has a valid and subsisting leasehold estate in and the right to quiet enjoyment
of the real properties leased by it for the full term of the lease
thereof.  Each lease referred to in
paragraph (a) above is a legal, valid and binding agreement, enforceable
in accordance with its terms, of the Company or a Subsidiary and of each other
Person that is a party thereto, and there is no, and neither the Company nor
any Subsidiary has received notice of any, default (or any condition or event
which, after notice or lapse of time or both, would constitute a default)
thereunder.  Neither the Company nor any
Subsidiary owes any brokerage commissions with respect to any such leased
space.


 


(d)       Seller has delivered to
Purchaser prior to the execution of this Agreement true and complete copies of
all leases (including any amendments and renewal letters) with respect to the
real property leased by the Company and the Subsidiaries.


 


(e)       Except as disclosed in Section 2.17(e)
of the Disclosure Schedule, the improvements on the real property
identified in Section 2.17(a) of the Disclosure Schedule are in
good operating condition and in a state of good maintenance and repair,
ordinary wear and tear excepted, are adequate and suitable for the purposes for
which they are presently being used and, to the Knowledge of Sellers, there are
no condemnation or appropriation proceedings pending or threatened against any
of such real property or the improvements thereon.


 


2.18        Tangible Personal
Property; Investment Assets.  


 


(a)       The Company or a Subsidiary
is in possession of and has good title to, or has valid leasehold interests in
or valid rights under Contract to use, all tangible personal property
(including Aircraft-Related Assets) used in or reasonably necessary for the
conduct of their business, including all tangible personal property reflected
on the balance sheet included in the Unaudited Financial Statements and
tangible personal property acquired since the Unaudited Financial Statement
Date other than property disposed of since such date in the ordinary course of
business consistent with past practice. 
All such tangible personal property is free and clear of all Liens,
other than Permitted Liens and Liens disclosed in Section 2.18(a) of
the Disclosure Schedule, and its use complies in all material respects with
all applicable Laws.


 


17

















 


(b)       Section 2.18(b) of the
Disclosure Schedule describes each Investment Asset owned by the
Company or any Subsidiary on the date hereof. 
Except as disclosed in Section 2.18(b) of the Disclosure
Schedule, all such Investment Assets are owned by the Company or a
Subsidiary free and clear of all Liens other than Permitted Liens.


 


2.19        Intellectual Property
Matters.  


 


(a)       The Company has not utilized
or does not currently utilize any patent, trademark, trade name, service mark,
copyright, software, trade secret or know-how material to the business of the
Company, except for commercial software generally
available and those listed in Section 2.19(a) of the Disclosure Schedule
(the “Intellectual Property”), all of which are owned by, or licensed
to, the Company free and clear of any liens, claims, charges or encumbrances.
The Intellectual Property constitutes all such assets, properties and rights
which are used or held for use in, or are necessary for, the conduct of the business
of the Company.


 


(b)       Except as set forth in Section
2.19(b) of the Disclosure Schedule and except for “shrink wrap” agreements
covering software, there are no royalty, commission or similar arrangements,
and no licenses, sublicenses or agreements, pertaining to any of the
Intellectual Property.


 


(c)       Except as set forth in Section
2.19(c) of the Disclosure Schedule, the Company does not infringe upon
unlawfully or wrongfully use any patent, trademark, trade name, service mark,
copyright or trade secret owned or claimed by another. No action, suit,
proceeding or investigation has been instituted or, to the Knowledge of Sellers
or the Company, threatened relating to any, patent, trademark, trade name,
service mark, copyright or trade secret formerly or currently used by the
Company.  Except as set forth in Section
2.19(c) of the Disclosure Schedule, none of the Intellectual Property is
subject to any outstanding order, decree or judgment. The Company has not
agreed to indemnify any Person for or against any infringement of or by the
Intellectual Property.


 


(d)       Except as set forth in Section
2.19(d) of the Disclosure Schedule, no present or former employee of the
Company and no other Person owns or has any proprietary, financial or other
interest, direct or indirect, in whole or in part, in any of the Intellectual
Property.  Section 2.19(d) of the
Disclosure Schedule lists all confidentiality or non-disclosure agreements
currently in force and effect in connection with the Intellectual Property to
which the Company or any of its respective employees is a party.


 


(e)       Except as set forth in Section
2.19(d) of the Disclosure Schedule, none of the Company’s Intellectual
Property is registered in, filed in or issued by the United States Copyright
Office or the United States Patent and Trademark Office, or in any offices in
the various states of the United States and any offices in other jurisdictions.


 


(f)        All Intellectual Property in
the form of computer software that is utilized by the Company in the operations
of its business is capable of processing date data between the twentieth and
twenty-first centuries, or can be rendered capable of processing such data
within 30 days by the expenditure of no more than $10,000 in the aggregate.


 


18

















 


2.20        Contracts.  


 


(a)       Section 2.20(a) of the
Disclosure Schedule (with paragraph references corresponding to those
set forth below) contains a true and complete list of each of the following
Contracts or other arrangements (true and complete copies or, if none,
reasonably complete and accurate written descriptions of which, together with
all amendments and supplements thereto and all waivers of any terms thereof,
have been delivered to Purchaser prior to the execution of this Agreement), to
which the Company or any Subsidiary is a party or by which any of their
respective Assets and Properties is bound:


 


(i)            (A) all Contracts (excluding Benefit
Plans) providing for a commitment of employment or consultation services for a
specified or unspecified term or otherwise relating to employment or the
termination of employment, the name, position and rate of compensation of each
Person party to such a Contract and the expiration date of each such Contract;
and (B) any written or unwritten representations, commitments, promises,
communications or courses of conduct (excluding Benefit Plans and any such
Contracts referred to in clause (A)) involving an obligation of the Company or
any Subsidiary to make payments in any year;


 


(ii)           all Contracts with any Person containing
any provision or covenant prohibiting or limiting the ability of the Company or
any Subsidiary to engage in any business activity or compete with any Person or
prohibiting or limiting the ability of any Person to compete with the Company
or any Subsidiary;


 


(iii)          all
partnership, joint venture, shareholders’ or other similar Contracts with any
Person;


 


(iv)          all Contracts relating to Indebtedness of
the Company or any Subsidiary in excess of $250,000;


 


(v)           all Contracts with distributors, dealers,
manufacturer’s representatives, sales agencies or franchisees;


 


(vi)          all Contracts relating to (A) the
future disposition or acquisition of any Assets and Properties, other than
dispositions or acquisitions in the ordinary course of business consistent with
past practice, and (B) any merger or other business combination;


 


(vii)         all
Contracts between or among the Company or any Subsidiary, on the one hand, and
a Seller or an Affiliate (other than the Company or any Subsidiary) of a
Seller, on the other hand;


 


(viii)        all
collective bargaining or similar labor Contracts;


 


(ix)          all Contracts that (A) limit or contain
restrictions on the ability of the Company or any Subsidiary to declare or pay
dividends on, to make any other distribution in respect of or to issue or
purchase, redeem or otherwise acquire its capital stock, to incur Indebtedness,
to incur or suffer to exist any Lien, to purchase or sell any Assets and
Properties, to change the lines of business in which it participates or engages


 


19

















 


or
to engage in any Business Combination or
(B) require the Company or any Subsidiary to maintain specified financial
ratios or levels of net worth or other indicia of financial condition;


 


(x)           all other Contracts (other than Benefit
Plans, leases listed in Section 2.21 of the Disclosure Schedule and
insurance policies listed in Section 2.23 of the Disclosure Schedule)
that involve the payment or potential payment, pursuant to the terms of any
such Contract, by or to the Company or any Subsidiary of more than $500,000 in
any twelve (12) month period;


 


(xi)          Contracts containing minimum purchase
requirements or “take or pay” provisions, or otherwise requiring the purchase
of all or a specified portion of the goods or services offered for sale by any
Person to the Company or any Subsidiary;


 


(xii)         Contracts
not otherwise listed in Section 2.20 of the Disclosure Schedule and
continuing over a period of more than six months from the date hereof and
exceeding $500,000 in value;


 


(xiii)        Contracts
containing a provision to indemnify any Person with respect to, or to assume,
any tax or environmental or product liability;


 


(xiv)        Contracts
with federal, state, local or foreign regulatory or other governmental
entities;


 


(xv)         Contracts for any charitable or political
contribution; and


 


(xvi)        all
Aircraft Asset Leases.


 


(b)       Each Contract required to be
disclosed in Section 2.20(a) of the Disclosure Schedule is in full
force and effect and constitutes a legal, valid and binding agreement,
enforceable in accordance with its terms, of each party thereto; and except as
disclosed in Section 2.20 of the Disclosure Schedule neither the
Company, any Subsidiary nor, to the Knowledge of Sellers, any other party to
such Contract is, or has received notice that it is, in violation or breach of
or default under any such Contract (or with notice or lapse of time or both,
would be in violation or breach of or default under any such Contract) in any
material respect.


 


(c)       Except as disclosed in Section
2.20(c) of the Disclosure Schedule, the Company is not now or has it ever
been a party to any contract with any governmental entity subject to price
redetermination or renegotiation.


 


2.21        Aircraft-Related Assets
and Aircraft Asset Leases.  


 


(a)       Set forth in Section
2.21(a) of the Disclosure Schedule is a true and complete list specifying (i) with
respect to each aircraft owned by the Company, the manufacturer, model,
registration marks, manufacturer’s serial number, year of manufacture, any damage
in excess of $500,000 which has either not been repaired or where such repair
has not been paid in full and, in either case, setting forth whether such costs
of repair is covered by


 


20

















 


the insurance policies set forth in Section 2.23
of the Disclosure Schedule, (ii) with respect to each engine and each
spare part with a book value of more than $25,000 owned by the Company, the
manufacturer and model, and (iii) with respect to each Aircraft Asset
Lease (A) the Aircraft-Related Assets subject to such Aircraft Asset
Lease, (B) the identity of the lessee, (C) the expiry date of the Aircraft
Asset Lease, (D) the current monthly rental (in United States dollars) and whether
it is floating or fixed, (E) any extension or termination rights and (F)
maintenance rent (if payable).


 


(b)       Except as set forth
in Section 2.21(b) of the Disclosure Schedule, the Company holds good
and marketable title to each of the Aircraft-Related Assets described in Section
2.21(a) of the Disclosure Schedule free and clear of all Liens other than
Permitted Liens and any Lien permitted pursuant to the terms of any Aircraft
Asset Lease related to such Aircraft-Related Asset (other than a Lien
attributable to the Company).


 


(c)       Except as set forth
in Section 2.21(c) of the Disclosure Schedule, no Person has an option
to purchase any Aircraft-Related Asset pursuant to an Aircraft Asset Lease or
otherwise, and no lessee has exercised an option to extend or terminate any
Aircraft Asset Lease.


 


(d)       Except as disclosed
in Section 2.21(d) of the Disclosure Schedule, there are no claims which
have been asserted against the Company arising out of any Aircraft Asset Lease.


 


2.22        Licenses.  Section 2.22 of the Disclosure Schedule
contains a true and complete list of all Licenses used in and material,
individually or in the aggregate, to the business or operations of the Company
or any Subsidiary (and all pending applications for any such Licenses), setting
forth the grantor, the grantee, the function and the expiration and renewal
date of each.  Prior to the execution of
this Agreement, Sellers have delivered to Purchaser true and complete copies of
all such Licenses.  Except as disclosed
in Section 2.22 of the Disclosure Schedule:


 


(i)            the Company and each Subsidiary owns or
validly holds all Licenses that are material, individually or in the aggregate,
to its business or operations;


 


(ii)           each License listed in Section 2.22
of the Disclosure Schedule is valid, binding and in full force and effect;
and


 


(iii)          to
the Knowledge of Sellers, neither the Company nor any Subsidiary is, or has
received any notice that it is, in default (or with the giving of notice or
lapse of time or both, would be in default) under any such License.


 


2.23        Insurance.  Section 2.23 of the Disclosure Schedule
contains a true and complete list (including the names and addresses of the
insurers, the names of the Persons to whom such policies have been issued, the
expiration dates thereof, the annual premiums and payment terms thereof,
whether it is a “claims made” or an “occurrence” policy and a brief description
of the interests insured thereby) of all liability, property, workers’
compensation, directors’ and officers’ liability and other insurance policies
currently in effect that insure the business, operations or employees of the
Company or any Subsidiary or affect or relate to the


 


21

















 


ownership, use or operation of any of the Assets and
Properties of the Company or any Subsidiary and that (i) have been issued to
the Company or any Subsidiary or (ii) have been issued to any Person (other
than the Company or any Subsidiary) for the benefit of the Company or any
Subsidiary.  The insurance coverage
provided by any of the policies described in clause (i) above will not
terminate or lapse by reason of the transactions contemplated by this
Agreement.  Each policy listed in Section 2.23
of the Disclosure Schedule is valid and binding and in full force and
effect, no premiums due thereunder have not been paid and, to the Knowledge of
Sellers, neither the Company, any Subsidiary nor the Person to whom such policy
has been issued has received any notice of cancellation or termination in
respect of any such policy or is in default thereunder.  To the Knowledge of Sellers, neither the
Company, any Subsidiary nor the Person to whom such policy has been issued has
received notice that any insurer under any policy referred to in this Section
is denying liability with respect to a claim thereunder or defending under a
reservation of rights clause.  The
current and historical policies are on commercially reasonable terms without historical
gaps in coverage and no further premiums or payments will be due after the
Closing with respect to periods prior to the Closing, except to the extent
reserved against in the Financial Statements.


 


2.24        Affiliate Transactions.  Except as disclosed in Section 2.05
or Section 2.24 of the Disclosure Schedule, (i) there are no Liabilities
between the Company or any Subsidiary, on the one hand, and a Seller or an
Affiliate (other than the Company or any Subsidiary) of a Seller, on the other,
(ii) none of Sellers or any such Affiliates provides or causes to be provided
any assets, services or facilities to the Company or any Subsidiary, (iii)
neither the Company nor any Subsidiary provides or causes to be provided any
assets, services or facilities to a Seller or any such Affiliate and (iv)
neither the Company nor any Subsidiary beneficially owns, directly or
indirectly, any Investment Assets issued by a Seller or any such
Affiliate.  Except as disclosed in Section 2.24
of the Disclosure Schedule, each of the Liabilities and transactions listed
in Section 2.24 of the Disclosure Schedule was incurred or engaged
in, as the case may be, on an arm’s-length basis.  Except as disclosed in Section 2.24 of the
Disclosure Schedule, since December 31, 2004, all settlements of
Liabilities between the Company or any Subsidiary, on the one hand, and a
Seller or any such Affiliate, on the other, have been made, and all allocations
of expenses have been applied, in the ordinary course of business consistent
with past practice.


 


2.25        Employees;
Labor Relations.


 


(a)       Section 2.25(a) of the
Disclosure Schedule contains a list of the name of each officer and
employee of the Company and the Subsidiaries whose annual base salary or wages,
plus any compensation paid or payable pursuant to any incentive, bonus or
commission arrangement, was or was reasonably likely to be, at least $250,000,
in respect of the year ended December 31, 2005 or is currently expected to
exceed such amount in respect of the year ending December 31, 2006, together
with each such person’s position or function, annual base salary or wages and
any incentive, bonus or commission compensation with respect to such person in
effect on such date.  Sellers have not
received any information that would lead them to believe that any of such
persons will or may cease to be employees of the Company because of or in
connection with the consummation of the transactions contemplated by this
Agreement.


 


22

















 


(b)       Except as disclosed in Section 2.25(b)
of the Disclosure Schedule, (i) no employee of the Company or any
Subsidiary is presently a member of a collective bargaining unit and, to the
Knowledge of Sellers, there are no threatened or contemplated attempts to
organize for collective bargaining purposes any of the employees of the Company
or any Subsidiary, and (ii) no unfair labor practice complaint or sex, age,
race or other discrimination claim has been brought during the last five (5)
years against the Company or any of the Subsidiaries before the National Labor
Relations Board, the Equal Employment Opportunity Commission or any other
Governmental or Regulatory Authority. 
Since January 1, 2001, there has been no work stoppage, strike or other
concerted action by employees of the Company or any Subsidiary.  During that period, the Company and the
Subsidiaries have complied in all material respects with all applicable Laws
relating to the employment of labor, including, without limitation those
relating to wages, hours and collective bargaining.


 


2.26        Environmental Matters.  


 


(a)       The Company has obtained,
maintains, and is in compliance with, all permits, authorizations, approvals
and consents required under Environmental Laws with respect to the operations
of the Company or any premises on which its business is operated (“Environmental
Permits”), all of which Environmental Permits shall remain vested in the
Company upon consummation of the transactions contemplated hereby.  No actions are pending, or to the knowledge
of the Company or Knowledge of Sellers, threatened, to suspend, modify, amend,
challenge, terminate or appeal any Environmental Permits.  The Company is in compliance and has at all
times complied with all Environmental Laws.


 


(b)       Neither the Company nor any
Seller has received any communication from any governmental entity or any other
Person that alleges that the Company is not in compliance with any
Environmental Law or Environmental Permits or has or could have any liability
or investigative, corrective or remedial obligations under any Environmental
Law.


 


(c)       The Company has not entered
into or agreed to any court decree or order, and is not subject to any
judgment, decree or order, relating to compliance with or any liability under
any Environmental Law or, except as described in Section 2.26(c) of the
Disclosure Schedule, to any investigation or cleanup of a Hazardous
Substance under any Environmental Law.


 


(d)       No lien, charge, interest or
encumbrance has been attached, asserted, or to the knowledge of the Company or
to the Knowledge of Sellers, threatened to or against any assets or properties
of the Company pursuant to any Environmental Law.


 


(e)       Except as described in Section
2.26(e) of the Disclosure Schedule, (i) there has been no treatment,
storage, disposal or Release of any Hazardous Substance on any current or
former property owned, operated or leased by the Company or any of its
predecessors or Affiliates, or (ii) none of the Company nor any of its
predecessors or Affiliates has treated, stored, disposed of, arranged or
permitted the disposal of, transported, handled or released any Hazardous
Substance, in each case of (i) or (ii) above, so as to give rise to a liability
or investigatory, corrective or remedial obligation under CERCLA or any other
Environmental Law.


 


23

















 


(f)        The Company has not received
a CERCLA 104(e) information request and has not been named a potentially
responsible party for any National Priorities List site under CERCLA or any
site under analogous state law or received an analogous notice or request from
any non-U.S. governmental entity, which notice, request or any resulting
inquiry or litigation has not been fully and finally resolved without
possibility of reopening.


 


(g)       Except as described in Section
2.26(g) of the Disclosure Schedule, none of the real property or facilities
owned, leased or operated by the Company contains any of the following:
(i)  above ground tanks or underground
storage tanks or any former aboveground or underground tanks that have not been
removed and all Releases remediated in accordance with all Environmental Laws;
(ii) polychlorinated biphenyls (“PCBs”) in any article, container or
equipment , (iii) asbestos containing material in any form or condition, or
(iv) any impoundments, landfills or waste disposal areas.


 


(h)       The Company and Sellers
collectively have provided to Purchaser true and complete copies of all written
environmental assessment materials and reports in their possession or control
relating to any current or former facilities or operations of the Company or
any of its predecessors.


 


2.27        Bank and Brokerage
Accounts; Investment Assets.  Section 2.27
of the Disclosure Schedule sets forth (a) a true and complete list of the
names and locations of all banks, trust companies, securities brokers and other
financial institutions at which the Company or any Subsidiary has an account or
safe deposit box or maintains a banking, custodial, trading or other similar
relationship; (b) a true and complete list and description of each such
account, box and relationship, indicating in each case the account number and
the names of the respective officers, employees, agents or other similar
representatives of the Company or any Subsidiary having signatory power with
respect thereto; and (c) a list of each Investment Asset, the name of the
record and beneficial owner thereof, the location of the certificates, if any,
therefor, the maturity date, if any, and any stock or bond powers or other
authority for transfer granted with respect thereto.


 


2.28        No Powers of Attorney.  Except as set forth in Section 2.28
of the Disclosure Schedule, neither the Company nor any Subsidiary has any
powers of attorney or comparable delegations of authority outstanding.


 


2.29        Accounts Receivable.  Except as set forth in Section 2.29
of the Disclosure Schedule, the accounts and notes receivable of the
Company and the Subsidiaries reflected on the balance sheet included in the
Unaudited Financial Statements, and all accounts and notes receivable arising
subsequent to the Unaudited Financial Statement Date, (i) arose from bona
fide sales transactions in the ordinary course of business and are
payable on ordinary trade terms, (ii) are legal, valid and binding obligations
of the respective debtors enforceable in accordance with their terms, (iii) are
not subject to any valid set-off or counterclaim, (iv) do not represent
obligations for goods sold on consignment, on approval or on a sale-or-return
basis or subject to any other repurchase or return arrangement, (v) are not
subject to fixed or potential retroactive price adjustments, rebates or similar
matters or provisions affecting the net amounts collectible or expected to be
collected in respect thereof, (vi) to the Knowledge of Sellers, are collectible
in the ordinary course of business consistent with past practice in the
aggregate recorded amounts


 


24

















 


thereof, net of any applicable reserve reflected in
the balance sheet included in the Unaudited Financial Statements and (vii) are
not the subject of any Actions or Proceedings brought by or on behalf of the
Company or any Subsidiary.  Section 2.29
of the Disclosure Schedule sets forth a description of any security
arrangements and collateral securing the repayment or other satisfaction of
receivables of the Company and the Subsidiaries.  All steps necessary to render all such
security arrangements legal, valid, binding and enforceable, and to give and
maintain for the Company or a Subsidiary, as the case may be, a perfected
security interest in the related collateral, have been taken.


 


2.30        No Illegal Payments.  The Company, any Subsidiary and, to the
Knowledge of Sellers, no Affiliate, officer, agent or employee thereof or of
Sellers has, directly or indirectly, during the past five years, on behalf of
or with respect to the Company, any Subsidiary or any Affiliate thereof, (a)
made any payment or provided any goods or services which were not legal to make
(or that would otherwise make any related Contract, License or transaction void
or voidable) or provide or which the Company, any Subsidiary or any Affiliate
thereof or any such officer, agent or employee knew or should have known were
not legal for the payee or the recipient of such goods or services to receive,
(b) received any payment or any goods or services which were not legal for the
payer or the provider (or that would otherwise make any related Contract,
License or transaction void or voidable) of such goods or services to make or
provide, (c) engaged in any material transactions or made or received any
material payments related to the Company or any Subsidiary which are not
recorded in their accounting books and records or (d) except for petty cash for
office use, had any off-book bank or cash accounts or “slush funds” related to
the Company or any Subsidiary.


 


2.31        Inventory.  Except as disclosed in the notes to the
Unaudited Financial Statements, all items included in the inventory of the
Company and the Subsidiaries are the property of the Company and the
Subsidiaries, free and clear of any Liens other than Permitted Liens, have not
been pledged as collateral, are not held by the Company or any Subsidiary on
consignment from others and conform in all material respects to all standards
applicable to such inventory or its use or sale imposed by Governmental or
Regulatory Authorities; are fit and sufficient for the purposes for which they
were procured or manufactured; could reasonably be expected to be sold in the
ordinary course of business at an amount in the aggregate not less than the
amount reflected on the balance sheet included in the Unaudited Financial Statements;
and, with respect to inventory reflected on the balance sheet included in the
Unaudited Financial Statements, reflect an aggregate (not per item or SKU)
valuation at the lower of cost or market not in excess of the valuations of
inventories computed in accordance with GAAP applied on a consistent
basis.  All inventory of the Company and
the Subsidiaries purchased after the Unaudited Financial Statement Date was
purchased in the ordinary course of business at an aggregate (not per item or
SKU) cost not exceeding market prices prevailing at the time of purchase.  All inventory of the Company and the
Subsidiaries sold after the Unaudited Financial Statement Date was sold in the
ordinary course of business at an aggregate (not per item or SKU) cost not less
than the value attributed to such inventory on the balance sheet included in
the Unaudited Financial Statements.


 


2.32        Product Liability
Claims.  Except as set forth in Section
2.32 of the Disclosure Schedule, there are, and during the past five years
there have been, no product liability claims asserted, pending or, to the
Knowledge of Sellers, threatened with respect to any


 


25

















 


products or services sold or provided by the Company
or any Subsidiary.  Except as set forth
in Section 2.32 of the Disclosure Schedule and except for credit
memoranda issued by the Company to customers in the ordinary course of
business, none of which were material individually or in the aggregate, there
are, and during the past five years there have been, no warranty claims
asserted, pending or, to the Knowledge of Sellers, threatened with respect to
any products or services sold or provided by the Company or any
Subsidiary.  Neither the Company, any
Subsidiary nor any Seller is aware of any condition, situation or set of
circumstances which could reasonably be expected to result in any such product
liability or warranty claim. 


 


2.33        Brokers.  Except for Wachovia Capital Markets, LLC,
whose fees, commissions and expenses are the sole responsibility of Sellers,
all negotiations relative to this Agreement and the transactions contemplated
hereby have been carried out by Sellers directly with Purchaser without the
intervention of any Person on behalf of any Seller or the Company in such
manner as to give rise to any valid claim by any Person against Purchaser, the
Company or any Subsidiary for a finder’s fee, brokerage commission or similar
payment.


 


2.34        Disclosure.  No representation or warranty contained in
this Agreement, and no statement contained in the Disclosure Schedule or in any
certificate, list or other writing furnished by Sellers to Purchaser pursuant
to any provision of this Agreement (including without limitation the Financial
Statements), contains any untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements herein or therein, in
the light of the circumstances under which they were made, not misleading.


 


2.35        Indebtedness and Cash
Position.  As of July 31, 2005 (i) the
consolidated Indebtedness of the Company and its Subsidiaries did not exceed
$115,500,000; (ii) the aggregate Cash held by the Company and its Subsidiaries
was not less than $493,482.  The Cash
amount described in the foregoing clause (ii) would have been capable of being
freely distributed to or used by Purchaser not later than five (5) Business
Days after July 31, 2005 if the Closing had occurred at that date, except
insofar as such distribution or use would have been restricted or limited
solely by operation of applicable Law.


 


2.36        Substantial Customers,
Suppliers and Lessees.  Section 2.36(a)
of the Disclosure Schedule lists the ten (10) largest customers of the
business and operations of the Company, on the basis of revenues for goods sold
or services provided for the most recently-completed fiscal year and the
corresponding percentage of revenue derived from each of such customers.  Section 2.36(b) of the Disclosure
Schedule lists the ten (10) largest suppliers of the business and
operations of the Company, on the basis of cost of goods or services purchased
for the most recently-completed fiscal year and the corresponding percentage of
cost incurred for each of such suppliers. 
Section 2.36(c) of the Disclosure Schedule lists the ten
(10) largest lessees of the business and operations of the Company, on the
basis of leasing revenue for goods under lease for the most recently-completed
fiscal year.  Except as disclosed in Section 2.36(d)
of the Disclosure Schedule, no such customer, supplier or lessee has ceased
or materially reduced its purchases from, use of the services of, or sales or
provision of services to the business and operations of the Company since the
Unaudited Financial Statement Date, or to the Knowledge of Sellers, has
threatened to cease or materially reduce such purchases, leases, use, sales or
provision of services after the date hereof. 
Except as disclosed in Section 2.36(e) of the


 


26

















 


Disclosure Schedule, to the
Knowledge of Sellers, no such customer, supplier or lessee is threatened with
bankruptcy or insolvency.


 


ARTICLE
III



REPRESENTATIONS AND WARRANTIES OF PURCHASER


 


Purchaser
hereby represents and warrants to Sellers as follows:


 


3.01        Organization.  Purchaser is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware.  Purchaser has full corporate power and
authority to execute and deliver this Agreement and the Operative Agreements to
which it is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby.


 


3.02        Authority.  The execution and delivery by Purchaser of
this Agreement and the Operative Agreements to which it is a party, and the performance
by Purchaser of its obligations hereunder and thereunder, have been duly and
validly authorized by the Board of Directors of Purchaser, no other corporate
action on the part of Purchaser or its stockholders being necessary.  This Agreement has been duly and validly
executed and delivered by Purchaser and constitutes, and upon the execution and
delivery by Purchaser of the Operative Agreements to which it is a party, such
Operative Agreements will constitute legal, valid and binding obligations of
Purchaser enforceable against Purchaser in accordance with their terms.


 


3.03        No Conflicts.  The execution and delivery by Purchaser of
this Agreement do not, and the execution and delivery by Purchaser of the
Operative Agreements to which it is a party, the performance by Purchaser of
its obligations under this Agreement and such Operative Agreements and the
consummation of the transactions contemplated hereby and thereby will not:


 


(a)           conflict with or result
in a violation or breach of any of the terms, conditions or provisions of the
corporate charter documents of Purchaser;


 


(b)           subject to obtaining
the consents, approvals and actions, making the filings and giving the notices
disclosed in Schedule 3.04 hereto, conflict with or result in a
violation or breach of any term or provision of any Law or Order applicable to
Purchaser or any of its Assets and Properties; or


 


(c)           except as disclosed in Schedule 3.03
hereto, (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under,
(iii) require Purchaser to obtain any consent, approval or action of, make any
filing with or give any notice to any Person as a result or under the terms of,
or (iv) result in the creation or imposition of any Lien upon Purchaser or any
of its Assets or Properties under, any Contract or License to which Purchaser
is a party or by which any of its Assets and Properties is bound.


 


3.04        Governmental Approvals
and Filings.  Except as disclosed in Schedule 3.04
hereto, no consent, approval or action of, filing with or notice to any


 


27

















 


Governmental or Regulatory Authority on the part of
Purchaser is required in connection with the execution, delivery and
performance of this Agreement or the Operative Agreements to which it is a
party or the consummation of the transactions contemplated hereby or thereby.


 


3.05        Legal Proceedings.  There are no Actions or Proceedings pending
or, to the knowledge of Purchaser, threatened against, relating to or affecting
Purchaser or any of its Assets and Properties which could reasonably be
expected to result in the issuance of an Order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or any of the Operative Agreements.


 


3.06        Purchase for Investment.  The Shares will be acquired by Purchaser (or,
if applicable, its assignee pursuant to Section 14.09(b)(i)) for its own
account for the purpose of investment, it being understood that the right to
dispose of such Shares shall be entirely within the discretion of Purchaser (or
such assignee, as the case may be). 
Purchaser (or such assignee, as the case may be) will refrain from transferring
or otherwise disposing of any of the Shares, or any interest therein, in such
manner as to cause Sellers to be in violation of the registration requirements
of the Securities Act of 1933, as amended, or applicable state securities or
blue sky laws.


 


3.07        Financing.  On or prior to the Closing Date, Purchaser
shall have obtained all financing, or shall otherwise have sufficient funds,
necessary for it to consummate the purchase of the Shares and the other transactions
contemplated hereby.


 


3.08        Brokers.  Except for Lehman Brothers, whose fees,
commissions and expenses are the sole responsibility of Purchaser, all
negotiations relative to this Agreement and the transactions contemplated
hereby have been carried out by Purchaser directly with Sellers without the
intervention of any Person on behalf of Purchaser in such manner as to give
rise to any valid claim by any Person against Sellers, the Company or any
Subsidiary for a finder’s fee, brokerage commission or similar payment.


 


3.09        Disclosure.  No representation or warranty contained in
this Agreement, and no statement contained in any certificate, list or other
writing furnished by Purchaser, the Cerberus Entities or Parent to Sellers
pursuant to any provision of this Agreement, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements herein or therein, in the light of the circumstances under which
they were made, not misleading.


 


ARTICLE
IV



COVENANTS OF SELLERS


 


Sellers
jointly and severally covenant and agree with Purchaser that, at all times from
and after the date hereof until the Closing and, with respect to any covenant
or agreement by its terms to be performed in whole or in part after the
Closing, for the period specified therein or, if no period is specified therein,
indefinitely, Sellers will comply with all covenants and provisions of this Article
IV, except to the extent Purchaser may otherwise consent in writing.


 


28

















 


4.01        Regulatory and Other
Approvals.  Sellers will, and will
cause the Company and the Subsidiaries to, as promptly as practicable
(a) at no additional cost or expense to Sellers except as provided in this
Agreement, take all commercially reasonable steps necessary or desirable to
obtain all consents, approvals or actions of, make all filings with and give
all notices to Governmental or Regulatory Authorities or any other Person
required of Sellers, the Company or any Subsidiary to consummate the
transactions contemplated hereby and by the Operative Agreements, including
without limitation those described in Sections 2.07 and 2.08 of the
Disclosure Schedule, (b) provide such other information and
communications to such Governmental or Regulatory Authorities or other Persons
as Purchaser or such Governmental or Regulatory Authorities or other Persons
may reasonably request in connection therewith and (c) cooperate with
Purchaser in connection with the performance of its obligations under Sections 5.01
and 5.02.  Sellers will provide
prompt notification to Purchaser when any such consent, approval, action,
filing or notice referred to in clause (a) above is obtained, taken, made or
given, as applicable, and will advise Purchaser of any communications (and,
unless precluded by Law, provide copies of any such communications that are in
writing) with any Governmental or Regulatory Authority or other Person
regarding any of the transactions contemplated by this Agreement or any of the
Operative Agreements.


 


4.02        HSR Filings.  In addition to and not in limitation of
Sellers’ covenants contained in Section 4.01, Sellers will (a) take
promptly all actions necessary to make the filings required of Sellers or their
Affiliates under the HSR Act, (b) comply at the earliest practicable date
with any request for additional information received by Sellers or their
Affiliates from the Federal Trade Commission or the Antitrust Division of the
Department of Justice pursuant to the HSR Act and (c) cooperate with
Purchaser in connection with Purchaser’s filing under the HSR Act and in
connection with resolving any investigation or other inquiry concerning the
transactions contemplated by this Agreement commenced by either the Federal
Trade Commission or the Antitrust Division of the Department of Justice or
state attorneys general.


 


4.03        Investigation by
Purchaser.  Sellers will, and will
cause the Company and the Subsidiaries to, (a) provide Purchaser and any Person
who is considering providing financing to Purchaser or Parent to finance all or
any portion of the Purchase Price and their respective officers, directors,
employees, agents, counsel, accountants, financial advisors, consultants and
other representatives (together “Representatives”) with full access,
upon reasonable prior notice and during normal business hours, to all officers,
employees, agents and accountants of the Company and the Subsidiaries and their
Assets and Properties and Books and Records, and (b) furnish Purchaser and such
other Persons with all such information and data (including without limitation
copies of Contracts, Benefit Plans and other Books and Records) concerning the
business and operations of the Company and the Subsidiaries as Purchaser or any
of such other Persons reasonably may request in connection with such
investigation.


 


4.04        No Solicitations.  Sellers will not take, nor will it permit the
Company, the Subsidiaries or any Affiliate of any Seller (or authorize or
permit any investment banker, financial advisor, attorney, accountant or other
Person retained by or acting for or on behalf of any Seller, the Company, the
Subsidiaries or any such Affiliate) to take, directly or indirectly, any action
to solicit, encourage, receive, negotiate, assist or otherwise facilitate
(including by furnishing confidential information with respect to the Company
or any Subsidiary or permitting access to the Assets and Properties and Books
and Records of the Company or any Subsidiary)


 


29

















 


any offer or inquiry from any Person concerning an
Acquisition Proposal.  If any Seller, the
Company, any Subsidiary or any such Affiliate (or any such Person acting for or
on their behalf) receives from any Person any offer, inquiry or informational
request referred to above, Sellers will promptly advise such Person, by written
notice, of the terms of this Section 4.04 and will promptly, orally
and in writing, advise Purchaser of such offer, inquiry or request and deliver
a copy of such notice to Purchaser.


 


4.05        Conduct of Business.  Sellers will cause the Company and the Subsidiaries
to conduct business only in the ordinary course consistent with past
practice.  Without limiting the
generality of the foregoing, Sellers will:


 


(a)           cause the Company and
the Subsidiaries to use commercially reasonable efforts to (i) preserve
intact the present business organization and reputation of the Company and the
Subsidiaries, (ii) keep available (subject to dismissals and retirements
in the ordinary course of business consistent with past practice) the services
of the present officers, employees and consultants of the Company and the
Subsidiaries, (iii) maintain the Assets and Properties of the Company and
the Subsidiaries in good working order and condition, ordinary wear and tear
excepted, (iv) maintain the good will of customers, suppliers, lenders and
other Persons from or to whom the Company or any Subsidiary obtains or provides
goods or services or with whom the Company or any Subsidiary otherwise has
significant business relationships and (v) continue all current sales,
marketing and promotional activities relating to the business and operations of
the Company and the Subsidiaries;


 


(b)           except to the extent
required by applicable Law, (i) cause the Books and Records to be maintained in
the usual, regular and ordinary manner, (ii) not permit any material change in
(A) any pricing, investment, accounting, financial reporting, inventory,
credit, allowance or Tax practice or policy of the Company or any Subsidiary,
or (B) any method of calculating any bad debt, contingency or other reserve of
the Company or any Subsidiary for accounting, financial reporting or Tax
purposes and (iii) not permit any change in the fiscal year of the Company or
any Subsidiary;


 


(c)           (i) use, and will cause
the Company and the Subsidiaries to use, commercially reasonable efforts to
maintain in full force and effect until the Closing substantially the same
levels of coverage as the insurance afforded under the Contracts listed in Section
2.23 of the Disclosure Schedule and (ii) cause any and all benefits under
such Contracts paid or payable (whether before or after the date of this
Agreement) with respect to the business, operations, employees or Assets and
Properties of the Company and the Subsidiaries to be paid to the Company and
the Subsidiaries; and


 


(d)           cause the Company and
the Subsidiaries to comply, in all material respects, with all Laws and Orders
applicable to the business and operations of the Company and the Subsidiaries,
and promptly following receipt thereof to give Purchaser copies of any formal
or informal notice received from any Governmental or Regulatory Authority or
other Person alleging any violation or potential violation of any such Law or
Order.


 


30














 


4.06         Financial Statements
and Reports; Filings.  


 


(a)       As promptly as practicable
and in any event no later than forty five (45) days after the end of each
fiscal quarter ending after the date hereof and before the Closing Date (other
than the fourth quarter) or ninety (90) days after the end of each fiscal year
ending after the date hereof and before the Closing Date, as the case may be,
Sellers will deliver to Purchaser true and complete copies of (in the case of
any such fiscal year) the audited and (in the case of any such fiscal quarter)
the unaudited consolidated balance sheet, and the related audited or unaudited
consolidated statements of operations, stockholders’ equity and cash flows, of
the Company and its consolidated subsidiaries, in each case as of and for the
fiscal year then ended or as of and for each such fiscal quarter and the
portion of the fiscal year then ended, as the case may be, together with the
notes, if any, relating thereto, which audited financial statements shall be
prepared on a basis consistent with the Audited Financial Statements and which
unaudited financial statements shall be prepared on a basis consistent with the
Unaudited Financial Statements.


 


(b)       As promptly as practicable,
Sellers will deliver to Purchaser true and complete copies of such other
financial statements, reports and analyses as may be prepared or received by
Sellers, the Company or any Subsidiary relating to the business or operations
of the Company or any Subsidiary or as Purchaser may otherwise reasonably
request.


 


(c)       As promptly as practicable,
Sellers will deliver copies of all License applications and other filings made
by the Company or any Subsidiary after the date hereof and before the Closing
Date with any Governmental or Regulatory Authority (other than routine,
recurring filings made in the ordinary course of business consistent with past
practice). 


 


4.07         Employee Matters.  Except as may be required by Law, Sellers
will refrain, and will cause the Company and the Subsidiaries to refrain, from
directly or indirectly:


 


(a)           making any
representation or promise, oral or written, to any officer, employee or
consultant of the Company or any Subsidiary concerning any Benefit Plan, except
for statements as to the rights or accrued benefits of any officer, employee or
consultant under the terms of any Benefit Plan or as otherwise may be required
by applicable Law;


 


(b)           making any increase in
the salary, wages or other compensation of any officer, employee or consultant
of the Company or any Subsidiary whose annual aggregate compensation is or is
expected to be or, after giving effect to such change, would or would be
expected to be, $100,000 or more;


 


(c)           adopting, entering into
or becoming bound by any Benefit Plan, employment-related Contract or collective
bargaining agreement, or amending, modifying or terminating (partially or
completely) any Benefit Plan, employment-related Contract or collective
bargaining agreement, except to the extent required by applicable Law and, in
the event compliance with legal requirements presents options, only to the
extent that the option which the Company or Subsidiary reasonably believes to
be the least costly is chosen; or


 


31

















 


(d)           establishing or
modifying any (i) incentive compensation arrangements, (ii) targets, goals,
pools or similar provisions in respect of any fiscal year under any Benefit
Plan, employment-related Contract or other employee compensation arrangement or
(iii) salary ranges, increase guidelines or similar provisions in respect of
any Benefit Plan, employment-related Contract or other employee compensation
arrangement. 


 


Sellers will cause the Company and the Subsidiaries to
administer each Benefit Plan, or cause the same to be so administered, in all
material respects in accordance with the applicable provisions of the Code,
ERISA and all other applicable Laws. 
Sellers will promptly notify Purchaser in writing of each receipt by
Sellers, the Company or any Subsidiary (and furnish Purchaser with copies) of
any notice of investigation or administrative proceeding by the IRS, Department
of Labor, PBGC or other Person involving any Benefit Plan.


 


4.08         Certain Restrictions.  Sellers will cause the Company and the
Subsidiaries to refrain from:


 


(a)           amending their articles
of incorporation or by-laws (or other comparable corporate charter documents)
or taking any action with respect to any such amendment or any
recapitalization, reorganization, liquidation or dissolution of any such
corporation;


 


(b)           authorizing, issuing,
selling or otherwise disposing of any shares of capital stock of or any Option
with respect to the Company or any Subsidiary, or modifying or amending any
right of any holder of outstanding shares of capital stock of or Option with
respect to the Company or any Subsidiary;


 


(c)           declaring, setting
aside or paying any dividend or other distribution in respect of the capital
stock of the Company or any Subsidiary not wholly owned by the Company, or
directly or indirectly redeeming, purchasing or otherwise acquiring any capital
stock of or any Option with respect to the Company or any Subsidiary not wholly
owned by the Company; 


 


(d)           acquiring or disposing
of, or incurring any Lien (other than a Permitted Lien) on, any Assets and
Properties, other than in the ordinary course of business consistent with past
practice; 


 


(e)           (i) entering into,
amending, modifying, terminating (partially or completely), granting any waiver
under or giving any consent with respect to (A) any Contract that would, if in
existence on the date of this Agreement, be required to be disclosed in the
Disclosure Schedule pursuant to Section 2.20, excluding any
Aircraft Asset Leases or (B) any material License or (ii) granting any
irrevocable powers of attorney;


 


(f)            violating, breaching
or defaulting under in any material respect, or taking or failing to take any
action that (with or without notice or lapse of time or both) would constitute
a material violation or breach of, or default under, any term or provision of
any License held or used by the Company or any Subsidiary or any Contract to
which the Company or any Subsidiary is a party or by which any of their
respective Assets and Properties is bound;


 


32

















 


(g)           (i) other than taking
advances under the Company’s existing revolving credit facility with Wachovia
Bank, N.A., incurring Indebtedness in an aggregate principal amount exceeding
$1,000,000, or (ii) voluntarily purchasing, canceling, prepaying or otherwise
providing for a complete or partial discharge in advance of a scheduled payment
date with respect to, or waiving any right of the Company or any Subsidiary
under, any Indebtedness of or owing to the Company or any Subsidiary;


 


(h)           engaging with any
Person in any merger or other business combination;


 


(i)            making capital
expenditures or commitments for additions to property, plant or equipment
constituting capital assets in amounts exceeding $1,000,000 in the aggregate
or, in the case of assets constituting Aircraft-Related Assets, exceeding
$5,000,000 individually or $20,000,000 in the aggregate;


 


(j)            making any change in
the lines of business in which they participate or are engaged;


 


(k)           writing off or writing
down any of their Assets and Properties outside the ordinary course of business
consistent with past practice; or


 


(l)            entering into any
Contract to do or engage in any of the foregoing.


 


4.09         Affiliate Transactions.  Except as set forth in Section 4.09 of the
Disclosure Schedule, immediately prior to the Closing, all Indebtedness and
other amounts owing under Contracts between a Seller or any Affiliate (other
than the Company or any Subsidiary) of a Seller, on the one hand, and the
Company or any of the Subsidiaries, on the other, will be paid in full, and
such Seller will terminate and will cause any such Affiliate to terminate each
Contract with the Company or any Subsidiary. 
Prior to the Closing, neither the Company nor any Subsidiary will enter
into any Contract or amend or modify any existing Contract, and will not engage
in any transaction outside the ordinary course of business consistent with past
practice or not on an arm’s-length basis (other than pursuant to Contracts
disclosed pursuant to Section 2.20 of the Disclosure Schedule),
with any Seller or any such Affiliate.


 


4.10         Books and Records.  On the Closing Date, Sellers will deliver or
make available to Purchaser at the offices of the Company and the Subsidiaries
all of the Books and Records, and if at any time after the Closing Sellers
discover in their possession or under their control any other Books and
Records, they will forthwith deliver such Books and Records to Purchaser.


 


4.11         Employment.  Management Sellers shall, simultaneously with
the Closing, enter into the Employment Agreements.


 


4.12         Non-Competition.  Sellers shall, simultaneously with the
Closing, enter into the Non-Competition Agreement.


 


4.13         Notice and Cure.  Sellers will notify Purchaser in writing
(where appropriate, through updates to the Disclosure Schedule) of, and
contemporaneously will provide


 


33

















 


Purchaser with true and complete copies of any and all
information or documents relating to, and will use all commercially reasonable
efforts to cure before the Closing, any event, transaction or circumstance, as
soon as practicable after it becomes Known to Sellers, occurring after the date
of this Agreement that causes or will cause any covenant or agreement of
Sellers under this Agreement to be breached or that renders or will render
untrue any representation or warranty of Sellers contained in this Agreement as
if the same were made on or as of the date of such event, transaction or
circumstance.  No notice given pursuant
to this Section shall have any effect on the representations, warranties,
covenants or agreements contained in this Agreement for purposes of determining
satisfaction of any condition contained herein or shall in any way limit
Purchaser’s right to seek indemnification under Article XI.


 


4.14         Fulfillment of
Conditions.  Sellers will execute and
deliver at the Closing each Operative Agreement that Sellers are required
hereby to execute and deliver as a condition to the Closing, will take all
commercially reasonable steps necessary or desirable and proceed diligently and
in good faith to satisfy each other condition to the obligations of Purchaser
contained in this Agreement (including without limitation, the conditions set
forth in Section 6.05 and 6.08) and will not, and will not permit
the Company or any Subsidiary to, take or fail to take any action that could
reasonably be expected to result in the nonfulfillment of any such condition.


 


4.15         S Corporation Status.  Sellers will not take any action, and will
cause the Company to refrain from taking any action, that would cause the
Company to cease to be treated as an S Corporation within the meaning of Code
Section 1361.  Sellers will not take any
action, and will ensure that the neither the Company nor any Subsidiary takes
any action, that would cause any Subsidiary to cease to qualify as either (i) a
qualified subchapter S subsidiary within the meaning of Code Section
1361(b)(3)(B), (ii) an entity the existence of which is disregarded or (iii) a
partnership with respect to which an election under Code Section 754 is in
effect.


 


4.16         New Real Estate Lease.  Sellers shall cause Enbee Capital, LLC (“Enbee”)
to negotiate in good faith with Purchaser and on an arms-length basis definitive
documentation with respect to the premises located at 2323 NW 82nd Avenue (the “New
Real Estate Lease”) (which lease shall contain customary market-based terms);
provided, however, if Enbee and Purchaser cannot agree to all
terms of the New Real Estate Lease (notwithstanding such good faith
negotiation), the current lease, as amended, between Enbee and the Company
shall remain in full force and effect, and the failure to have entered into the
New Real Estate Lease shall not be a breach of the covenant hereunder.


 


4.17         AeroTurbine Capital
Shares Contribution.  Sellers shall,
on or before the Closing, contribute all of the outstanding shares in
AeroTurbine Capital to the Company.


 


4.18         Sellers’ Account.  Each of the Management Sellers shall, for two
(2) years from and after the Closing Date, keep available not less than
$10,000,000 (i.e., $20,000,000 in the aggregate for both Management Sellers) in
Cash Equivalent Investments (as hereinafter defined) in an account of such
Management Seller (each, an “Investment Account”) in a depository institution or trust company
incorporated under the laws of the United States of America which is a
member of the Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000 (any such institution being an


 


34

















 


“Authorized Bank”), and
provide Purchaser with bank or
brokerage statements with respect to such accounts on a monthly basis.  Sellers and Purchaser further agree that upon
creation of such account, Sellers and Purchaser will execute joint signature
instructions directing the Authorized Bank not to permit, without the joint
written instructions of both Sellers and Purchaser, (i) the release or other
distribution or transfer of any funds in such account, if such release,
transfer or distribution would cause either Investment Account to be left with
Cash Equivalent Investments with an aggregate market value of less than $10,000,000,
(ii) an assignment to any Person of such account or funds contained therein or
(iii) the use of such account or funds contained therein as collateral; provided,
however, that such restrictions shall lapse and no longer be applicable
on the second anniversary of the Closing Date, irrespective of whether any
claims are then pending against Sellers by any Purchaser Indemnified
Party.  As used herein, “Cash
Equivalent Investments” means, at any time, (a) any evidence of
indebtedness maturing not more 30 days after such time, issued or guaranteed by
the United States Government or any agency thereof, (b) commercial paper,
maturing not more than 30 days from the date of issue, or corporate demand
notes, in each case rated at least A-l by Standard & Poor’s Corporation or
P-l by Moody’s Investors Service, Inc., (c) any certificate of deposit, time
deposit or banker’s acceptance, maturing not more than 30 days after such time,
or any overnight Federal Funds transaction that is issued or sold by any
Authorized Bank, (d) medium and long-term securities rated at least A- by
Standard & Poor’s Corporation, and (e) money market accounts or mutual
funds which invest exclusively in assets satisfying the foregoing
requirements.  If at any time or from
time to time the aggregate fair market value of the Cash Equivalent Investments
in either Investment Account falls below $10,000,000, the Management Seller
owning such Account shall deposit additional cash and/or Cash Equivalent
Investments to bring such aggregate fair market value to at least $10,000,000.


 


ARTICLE
V



COVENANTS OF PURCHASER


 


Purchaser
covenants and agrees with Sellers that, at all times from and after the date
hereof until the Closing, Purchaser will comply with all covenants and
provisions of this Article V, except to the extent Sellers may otherwise
consent in writing.


 


5.01         Regulatory and Other
Approvals.  Purchaser will as
promptly as practicable (a) take all commercially reasonable steps necessary or
desirable to obtain all consents, approvals or actions of, make all filings
with and give all notices to Governmental or Regulatory Authorities or any
other Person required of Purchaser to consummate the transactions contemplated
hereby and by the Operative Agreements, including without limitation those
described in Schedules 3.03 and 3.04 hereto, (b) provide such other
information and communications to such Governmental or Regulatory Authorities
or other Persons as Sellers or such Governmental or Regulatory Authorities or
other Persons may reasonably request in connection therewith and (c) cooperate
with Sellers, the Company and the Subsidiaries in connection with the
performance of their obligations under Sections 4.01 and 4.02.  Purchaser will provide prompt notification to
Sellers when any such consent, approval, action, filing or notice referred to
in clause (a) above is obtained, taken, made or given, as applicable, and will
advise Sellers of any communications (and, unless precluded by Law, provide
copies of any such


 


35

















 


communications that are in writing) with any
Governmental or Regulatory Authority or other Person regarding any of the
transactions contemplated by this Agreement or any of the Operative Agreements.


 


5.02         HSR Filings.  In addition to and without limiting Purchaser’s
covenants contained in Section 5.01, Purchaser shall (a) take promptly
all actions necessary to make the filings required of Purchaser or its
Affiliates under the HSR Act, (b) comply at the earliest practicable date with
any request for additional information received by Purchaser or its Affiliates
from the Federal Trade Commission or the Antitrust Division of the Department
of Justice pursuant to the HSR Act and (c) cooperate with Sellers in connection
with Sellers’ filing under the HSR Act and in connection with resolving any
investigation or other regulatory inquiry concerning the transactions
contemplated by this Agreement commenced by either the Federal Trade Commission
or the Antitrust Division of the Department of Justice or state attorneys
general.


 


5.03         Employment.  Purchaser shall, simultaneously with the
Closing, enter into the Employment Agreements.


 


5.04         Non-Competition.  Purchaser shall, simultaneously with the
Closing, enter into the Non-Competition Agreement.


 


5.05         Notice and Cure.  Purchaser shall notify Sellers in writing of,
and contemporaneously will provide Sellers with true and complete copies of any
and all information or documents relating to, and will use all commercially
reasonable efforts to cure before the Closing, any event, transaction or
circumstance, as soon as practicable after it becomes known to Purchaser,
occurring after the date of this Agreement that causes or will cause any
covenant or agreement of Purchaser under this Agreement to be breached or that
renders or will render untrue any representation or warranty of Purchaser
contained in this Agreement as if the same were made on or as of the date of
such event, transaction or circumstance. 
No notice given pursuant to this Section shall have any effect on the
representations, warranties, covenants or agreements contained in this
Agreement for purposes of determining satisfaction of any condition contained
herein or shall in any way limit Sellers’ right to seek indemnification under Article XI.


 


5.06         Fulfillment of
Conditions.  Purchaser will execute
and deliver at the Closing each Operative Agreement that Purchaser is hereby
required to execute and deliver as a condition to the Closing, will take all
commercially reasonable steps necessary or desirable and proceed diligently and
in good faith to satisfy each other condition to the obligations of Sellers
contained in this Agreement (including without limitation, the conditions set
forth in Section 6.05 and 6.08) and will not take or fail to take
any action that could reasonably be expected to result in the nonfulfillment of
any such condition.


 


5.07         New Real Estate Lease.  Purchaser shall negotiate in good faith with
Enbee and on an arms-length basis definitive documentation with respect to the
New Real Estate Lease (which lease shall contain customary market-based terms);
provided, however, if Enbee and Purchaser cannot agree to all terms of the New
Real Estate Lease (notwithstanding such good faith negotiation), the current
lease, as amended, between Enbee and the Company shall


 


36

















 


remain in full force and effect, and the failure to
have entered into the New Real Estate Lease shall not be a breach of the
covenant hereunder.


 


ARTICLE
VI



CONDITIONS TO OBLIGATIONS OF PURCHASER


 


The
obligations of Purchaser hereunder to purchase the Shares are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by Purchaser in its sole
discretion):


 


6.01         Representations and
Warranties.  Each of the
representations and warranties made by Sellers in this Agreement (other than
those made as of a specified date earlier than the Closing Date) shall be true
and correct in all material respects on and as of the Closing Date as though
such representation or warranty was made on and as of the Closing Date, and any
representation or warranty made as of a specified date earlier than the Closing
Date shall have been true and correct in all material respects on and as of
such earlier date.


 


6.02         Performance.  Sellers shall have performed and complied
with, in all material respects, each agreement, covenant and obligation
required by this Agreement to be so performed or complied with by Sellers at or
before the Closing.


 


6.03         Certificates of
Sellers.  Sellers shall have
delivered to Purchaser a certificate, dated the Closing Date and executed by
Sellers, substantially in the form and to the effect of Exhibit E
hereto.


 


6.04         Orders and Laws.  There shall not be in effect on the Closing
Date any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Operative Agreements or which could reasonably be
expected to otherwise result in a material diminution of the benefits of the
transactions contemplated by this Agreement or any of the Operative Agreements
to Purchaser, and there shall not be pending or threatened on the Closing Date
any Action or Proceeding by any Governmental or Regulatory Authority which
could reasonably be expected to result in the issuance of any such Order or the
enactment, promulgation or deemed applicability to Purchaser, the Company, any
Subsidiary or the transactions contemplated by this Agreement or any of the
Operative Agreements of any such Law.


 


6.05         Regulatory Consents
and Approvals.  All consents,
approvals and actions of, filings with and notices to any Governmental or
Regulatory Authority necessary to permit Purchaser and Sellers to perform their
obligations under this Agreement and the Operative Agreements and to consummate
the transactions contemplated hereby and thereby (a) shall have been duly
obtained, made or given, (b) shall be in form and substance reasonably
satisfactory to Purchaser, (c) shall not be subject to the satisfaction of any
condition that has not been satisfied or waived and (d) shall be in full force
and effect, and all terminations or expirations of waiting periods imposed by
any Governmental or Regulatory Authority necessary for the consummation of the
transactions contemplated by this Agreement and the Operative Agreements,
including under the HSR Act, shall have occurred.


 


37

















 


6.06         Third Party Consents.  The consents (or in lieu thereof waivers)
listed in Section 6.06 of the Disclosure Schedule, and all other
consents (or in lieu thereof waivers) to the performance by Purchaser and
Sellers of their obligations under this Agreement and the Operative Agreements
or to the consummation of the transactions contemplated hereby and thereby as
are required under any Contract to which Purchaser, Sellers, the Company or any
Subsidiary is a party or by which any of their respective Assets and Properties
are bound (a) shall have been obtained, (b) shall be in form and substance
reasonably satisfactory to Purchaser, (c) shall not be subject to the
satisfaction of any condition that has not been satisfied or waived and (d)
shall be in full force and effect, except (other than in the case of the
consents listed in Section 6.06 of the Disclosure Schedule) where
the failure to obtain any such consent (or in lieu thereof waiver) could not
reasonably be expected, individually or in the aggregate with other such
failures, to have a Material Adverse Effect or otherwise result in a material
diminution of the benefits of the transactions contemplated by this Agreement
and the Operative Agreements to Purchaser.


 


6.07         Resignations of
Directors and Officers.  Such members
of the boards of directors and such officers of the Company and the
Subsidiaries as are designated in a written notice delivered at least two (2)
Business Days prior to the Closing Date by Purchaser to Sellers shall have
tendered, effective at the Closing, their resignations as such directors and
officers.


 


6.08         Proceedings.  All proceedings to be taken on the part of
Sellers in connection with the transactions contemplated by this Agreement and
all documents incident thereto shall be reasonably satisfactory in form and
substance to Purchaser, and Purchaser shall have received copies of all such
documents and other evidences as Purchaser may reasonably request in order to
establish the consummation of such transactions and the taking of all
proceedings in connection therewith.


 


6.09         Shareholder Equity
Agreements.  Sellers shall have
entered into the Stockholders Agreement and, simultaneously with the Closing,
shall have consummated the issuance and sale of shares pursuant to the terms of
the Restricted Shares Purchase Agreement.


 


6.10         Employment Agreements.  Management Sellers shall have entered into
the Employment Agreements.


 


6.11         Non-Competition
Agreement.  Sellers shall have
entered into the Non-Competition Agreement.


 


6.12         AeroTurbine Capital
Shares Contribution.  Sellers shall
have contributed all of the outstanding shares in AeroTurbine Capital to the
Company.


 


ARTICLE
VII



CONDITIONS TO OBLIGATIONS OF SELLERS


 


The
obligations of Sellers hereunder to sell the Shares are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by Sellers in their sole
discretion):


 


38

















 


7.01         Representations and
Warranties.  Each of the
representations and warranties made by Purchaser in this Agreement shall be
true and correct in all material respects on and as of the Closing Date as
though such representation or warranty was made on and as of the Closing Date.


 


7.02         Performance.  Purchaser shall have performed and complied
with, in all material respects, each agreement, covenant and obligation
required by this Agreement to be so performed or complied with by Purchaser at
or before the Closing.


 


7.03         Officers’ Certificates.  Purchaser shall have delivered to Sellers a
certificate, dated the Closing Date and executed in the name and on behalf of
Purchaser by the Chairman of the Board, the President or any Executive or
Senior Vice President of Purchaser, substantially in the form and to the effect
of Exhibit F hereto, and a certificate, dated the Closing Date and
executed by the Secretary or any Assistant Secretary of Purchaser,
substantially in the form and to the effect of Exhibit G hereto.


 


7.04         Orders and Laws.  There shall not be in effect on the Closing
Date any Order or Law that became effective after the date of this Agreement
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any
of the Operative Agreements.


 


7.05         Regulatory Consents
and Approvals.  All consents,
approvals and actions of, filings with and notices to any Governmental or
Regulatory Authority necessary to permit Sellers and Purchaser to perform their
obligations under this Agreement and the Operative Agreements and to consummate
the transactions contemplated hereby and thereby (a) shall have been duly
obtained, made or given, (b) shall not be subject to the satisfaction of any
condition that has not been satisfied or waived and (c) shall be in full force
and effect, and all terminations or expirations of waiting periods imposed by
any Governmental or Regulatory Authority necessary for the consummation of the
transactions contemplated by this Agreement and the Operative Agreements,
including under the HSR Act, shall have occurred.


 


7.06         Proceedings.  All proceedings to be taken on the part of
Purchaser in connection with the transactions contemplated by this Agreement
and all documents incident thereto shall be reasonably satisfactory in form and
substance to Sellers, and Sellers shall have received copies of all such
documents and other evidences as Sellers may reasonably request in order to establish
the consummation of such transactions and the taking of all proceedings in
connection therewith.


 


7.07         Shareholder Equity
Agreements.  The Cerberus Entities
shall have entered into the Stockholders Agreement and, simultaneously with the
Closing, shall have consummated the issuance and sale of shares pursuant to the
terms of the Restricted Shares Purchase Agreement.


 


39

















 


7.08         Employment Agreements.  Purchaser shall have entered into the
Employment Agreements.


 


7.09         Release of Seller
Guarantees.  Wachovia Bank, N.A.
shall have released the individual guarantees of Sellers under the Company’s
existing revolving credit facility with Wachovia Bank, N.A.


 


ARTICLE
VIII



TAX MATTERS AND POST-CLOSING TAXES


 


8.01         Tax
Returns.  


 


(a)       Except as otherwise provided in Section 1.04, Sellers shall, at the
Company’s expense, prepare (or cause to be prepared) and timely file (or cause
to be timely filed) all Tax Returns of the Company or any Subsidiary that are
due (after any extensions) prior to the Closing Date and,
except to the extent reflected in or reserved against in the Financial
Statements, shall pay any Taxes due in respect of such Tax Returns.


 


(b)       Except as otherwise provided
in Section 1.04, Purchaser shall prepare (or cause to be prepared) and
file when due (or cause to be filed) all Tax Returns that are required to be
filed by or with respect to the Company after the Closing Date and shall remit
any Taxes imposed on the Company or any Subsidiary that are due in respect of
such Tax Returns.  With respect to Tax
Returns that are required to be filed by or with respect to the Company for any
tax period that begins before and ends after the Closing Date (such periods “Straddle
Periods” and such Tax Returns “Straddle Returns”), such Straddle
Returns shall be prepared in a manner consistent with past practice (unless
otherwise required by law), and Sellers shall be responsible for Taxes due in
respect of that portion of such Straddle Period that ends on the Closing Date, except to the extent reflected in or reserved against in the
Financial Statements, (“Straddle Pre-Closing Taxes”), calculated
as provided in Section 8.01(c) below. 
Purchaser shall notify Sellers of any amounts due from Sellers in
respect of any Straddle Return no later than ten (10) Business Days prior to
the date on which such Straddle Return is due, and Sellers shall remit such
payment to Purchaser no later than five (5) Business Days prior to the date
such Straddle Return is due.  Purchaser
shall deliver any Straddle Return to the Sellers for their review at least
thirty (30) days prior to the date on which such Tax Return is required to be
filed.  If a Seller disputes any item on
such Tax Return, it shall notify Purchaser of such disputed item (or items) and
the basis for its objection and Purchaser shall consider such objections in
good faith.  


 


(c)       In the case of any Taxes of
the Company or any Subsidiary that are payable with respect to Straddle
Periods, the portion of any such Taxes that are attributable to the portion of
the Straddle Period that ends on the Closing Date shall (i) in the case of
Taxes that are based upon or related to income or receipts or imposed on a
transactional basis be deemed equal to the amount that would be payable if the
Tax year or period ended on the Closing Date; and (ii) in the case of
other Taxes be allocated pro  rata per day
between the period ending on the Closing Date and the period beginning after
the Closing Date.  For


 


40

















 


purposes of clause (i) of the preceding
sentence, any exemption, deduction, credit or other item that is calculated on
an annual basis shall be allocated pro rate per day between the period ending
on the Closing Date and the period beginning after the Closing Date.  The parties hereto will, to the extent
permitted by applicable law, elect with the relevant Tax authority to treat a
portion of any Straddle Period as a short taxable period ending as of the close
of business on the Closing Date.


 


8.02         Code §338(h)(10)
Election.  At Purchaser’s request
Sellers and Purchaser shall jointly make the election described in Code
§338(h)(10) and any corresponding election under applicable state and local tax
laws (the “Elections”).  Seller
and Purchaser agree to report the transactions under this Agreement
consistently with these Elections. 
Purchaser will prepare and file all Tax Returns in connection with the
Election (“Code §338 Forms”). 
Sellers shall promptly execute and deliver to Purchaser all documentation
reasonably requested by Purchaser, including the completed Code §338
Forms.  Purchaser will compute the
adjusted grossed up basis of the assets of the Company (pursuant to applicable
Treasury Regulations) and will allocate such basis among the assets in
accordance with Section 1.06.


 


8.03         Tax Indemnification.  


 


(a)       After the Closing Date,
Sellers shall jointly and severally indemnify and hold harmless the Purchaser,
the Company and each Subsidiary from and against any and all Losses resulting
from, arising out of or relating to (i) any Taxes of the Company (or any
Subsidiary) (except to the extent reflected in or reserved against in the
Financial Statements) relating to (x) any periods ending on or before the
Closing Date and (y) that portion of any Straddle Period that ends on the
Closing Date (calculated as set forth in Section 8.01(c) above) and (ii)
without duplication of amounts included in clause (i), without regard to the
tax period to which the Tax relates, any Taxes resulting from a breach of the
representations in Section 2.13. 
The indemnity provided in the foregoing sentence shall include, without
limitation, any Tax liability arising by reason of the Company or any
Subsidiary being severally liable for any Taxes of another person pursuant to
Treasury Regulation §1.1502-6 or any analogous state, local or foreign Tax
provision, by contract as a transferee or otherwise and any Tax liability
incurred in connection with the transactions contemplated by this Agreement;
including, if determined by Purchaser, the making of an election pursuant to
Code Section 338(h)(10).  Notwithstanding
anything to the contrary contained herein, the Sellers shall be required to
indemnify the Purchaser for Taxes payable by the Company resulting from a Code
Section 338(h)(10) election on the sale to Purchaser of the Company shares only
to the extent such Taxes exceed $500,000. 
Sellers shall be responsible to determine the calculations to be
included in the relevant Tax Returns with respect to such Taxes payable by the
Company and, in their capacities as officers of the Company, shall execute and
file such Tax Returns.


 


(b)       If Purchaser determines to
make the Election pursuant to Section 8.02 above, Purchaser shall
indemnify and hold harmless Sellers from and against Taxes imposed on Sellers
equal to the excess, if any, of (x) income Taxes payable by the Sellers in
connection with the transactions contemplated by this Agreement (other than (i)
any Taxes payable by the Company in connection with the recognition of any built-in
gain that existed at the time the Company converted to S Corporation status,
which, for the avoidance of doubt, Sellers are obligated to indemnify the
Purchaser against pursuant to Section 8.03(a)), over (y) the income


 


41

















 


Taxes Sellers would have paid had the Purchaser not
determined to make the Election pursuant to Section 8.02 hereof and
Sellers were taxed on the gain realized on the sale of the Shares.  Payment by Purchaser to Sellers under this Section
8.03(b) shall be made simultaneously with Sellers’ execution of the
Elections pursuant to Section 8.02, with subsequent adjustments, if any,
based upon amended Tax Returns and/or final determination pursuant to any Tax
audit.


 


8.04         Refunds.  Sellers will be entitled to any credits and
refunds (including interest received thereon) in respect of any taxable period
prior to Closing and that portion of any Straddle Period that ends on the
Closing Date and the Company or its Subsidiaries will be entitled to any
refunds (including any interest received thereon) in respect of any other
federal, state, local or foreign Tax liability of the Company or any of its
Subsidiaries.  So long as there is no
outstanding claim for indemnification pursuant to this Article VIII or Article
XI, Purchaser shall cause any refunds allocated to Sellers pursuant to the
preceding sentence to be paid to the Sellers promptly following receipt.  If there are any outstanding claims against
the Sellers for indemnification under Articles VIII or Article XI
of this Agreement, Purchaser shall be entitled to hold such refunds in trust
pending resolution of the indemnification claim or claims and if such
indemnification claim is determined to be owing to Purchaser pursuant to the
terms of this Agreement, Purchaser may offset any refund amounts against
Sellers’ indemnification obligations hereunder. 



 


8.05         Tax Audits and
Contests; Cooperation.  


 


(a)       After the Closing, Purchaser
and Sellers shall promptly notify the other party or parties in writing of any
demand, claim or notice of the commencement of an audit received by such party
from any Tax authority or any other person with respect to Taxes for which such
other party may be liable pursuant to Section 8.03 of this Agreement; provided,
however, that a failure to give such notice will not affect such other
party’s rights to indemnification under Section 8.03, except to the
extent that such party’s ability to defend has been irreparably prejudiced by
such failure.  Such notice shall contain
factual information (to the extent known) describing the asserted Tax liability
and shall include copies of the relevant portion of any notice or other
document received from any Tax authority or any other Person in respect of any
such asserted Tax liability.  


 


(b)       At Sellers’ request,
Purchaser shall contest any asserted Tax for which Sellers may have an
indemnity obligation and shall request any Tax refund to which Sellers shall be
entitled.  If Sellers first acknowledge
their liability to Purchaser with respect to an asserted Tax, and the only Tax
that is the subject of such proceeding is a Tax for which Sellers are required
to indemnify Purchaser, Sellers shall be entitled to control the conduct,
through counsel of its own choosing at its own expense, of any audit, claim for
refund, or administrative or judicial proceeding involving any asserted Tax
liability or refund with respect to the Company or any Subsidiary (any such
audit, claim for refund, or proceeding relating to an asserted Tax liability or
Tax refund referred to herein as a “Contest”) relating to Taxes for
which Sellers have any indemnification obligation pursuant to Section 8.03
or a right to the refund pursuant to Section 8.04.  Purchaser shall have the right to control the
Contest of any Tax for which Sellers do not have control rights pursuant to the
preceding sentence.


 


42

















 


(c)       Sellers and Purchaser agree
to furnish or cause to be furnished to each other, upon request, as promptly as
practicable, such information (including access to books and records and the
Company’s and any Subsidiary’s accountants) and assistance relating to the
Company and any Subsidiary as is reasonably requested for the filing of any Tax
Returns and the preparation, prosecution, defense or conduct of any
Contest.  Sellers and Purchaser shall
reasonably cooperate with each other in the conduct of any Contest or other
proceeding involving or otherwise relating to the Company or any Subsidiary
with respect to any Tax and each shall execute and deliver such powers of
attorney and other documents as are necessary to carry out the intent of this Section 8.05.  Any information obtained under this Section 8.05
shall be kept confidential, except as may be otherwise necessary in connection
with the filing of Tax Returns or in the conduct of a Contest or other Tax
proceeding.


 


(d)       Each of Purchaser and the
Company and its Subsidiaries shall (a) use its commercially reasonable
efforts to properly retain and maintain the tax and accounting records of the
Company and Subsidiaries that relate to Tax periods for which Sellers may have
any indemnification obligations pursuant to Article VIII for six
(6) years and shall thereafter provide Sellers with written notice prior
to any destruction, abandonment or disposition of all or any portions of such
records, (b) transfer such records to Sellers upon their written request
prior to any such destruction, abandonment or disposition and (c) allow
Sellers and their respective agents and representatives, at times and dates
reasonably and mutually acceptable to the parties, to from time to time inspect
and review such records as Sellers may deem necessary or appropriate; provided,
however, that in all cases, such activities are to be conducted by Sellers
during normal business hours and at the Sellers’ sole expense.  Any information obtained under this Section 8.05
shall be kept confidential, except as may be otherwise necessary in connection
with the filing of Tax Returns or in the conduct of a Contest or other Tax
proceedings.


 


(e)       Except with respect to a
payment made pursuant to Section 8.03(b), payment by an indemnitor of
any amount due to an indemnitee under Section 8.03 of this Agreement
shall be made within ten (10) days following written notice by the indemnitee
that payment of such amounts to the appropriate Tax authority or other
applicable third party is due by the indemnitee, provided that the
indemnitor shall not be required to make any payment earlier than five (5)
Business Days before it is due to the appropriate Tax authority or applicable
third party.  In the case of a Tax that
is contested in accordance with the provisions of Section 8.05(b)
of this Agreement, payment of such contested Tax will not be considered due
earlier than the date a “Final Determination” to such effect is made by
such Tax authority or a court.  For this
purpose, a Final Determination shall mean a settlement, compromise, or other
agreement with the relevant Tax authority, a deficiency notice with respect to
which the period for filing a petition with the Tax court or the relevant
state, local or foreign tribunal has expired or a decision of any court of
competent jurisdiction that is not subject to appeal or as to which the time
for appeal has expired.


 


8.06         Transfer Taxes.  Sellers shall pay all sales, use, transfer,
real property transfer, recording, gains, stock transfer and other similar
taxes and fees (“Transfer Taxes”) arising out of or in connection with
the transactions effected pursuant to this Agreement, and shall indemnify,
defend, and hold harmless Purchaser, the Company and each Subsidiary on an
after-Tax basis with respect to such Transfer Taxes.  Sellers shall file all necessary


 


43

















 


documentation and Tax Returns with respect to such
Transfer Taxes and shall promptly provide Purchaser with copies of such Tax
Returns and evidence of the payment of any Transfer Taxes.


 


8.07         Exclusivity.  This Article VIII shall be the sole
provision governing indemnities for Taxes under this Agreement and no provision of Article XI
(including, without limitation, the limitations set forth in Section 11.02(d))
shall in any way effect the rights of the parties under this Article VIII.


 


ARTICLE
IX



EMPLOYEE BENEFITS MATTERS


 


9.01         Employee
Benefits Matters.


 


(a)       The Purchaser shall, or
shall cause its Affiliates to, credit employees of the Company and its
Subsidiaries at the Closing (“Company Employees”) for purposes of
eligibility to participate, vesting and benefit calculation purposes (but not
for purposes of benefit accrual under any defined benefit pension plan) such
Company Employees’ service with the Company and its Subsidiaries under all
employee plans, programs or arrangements maintained by Purchaser or its
Affiliates for such Company Employees will be eligible after the Closing (each,
a “New Plan”) to the same extent such service is recognized by the
Company and its Subsidiaries immediately prior to the Closing under any Benefit
Plan in which such employees participate immediately prior to the Closing
(each, an “Old Plan”).


 


(b)       Purchaser shall cause the
terms of each New Plan to provide that: (i) each Company Employee shall be
immediately eligible to participate, without any waiting time, in any and all
New Plans to the extent coverage under such New Plan is of the same type as
provided under an Old Plan in which such Company Employee participated
immediately before the Closing; and (ii) for purposes of each New Plan
providing medical, dental, pharmaceutical and/or vision benefits to any Company
Employee, the Purchaser shall cause all pre-existing condition exclusions and
actively-at-work requirements of such New Plan to be waived for any such
employee and his or her covered dependents, unless such conditions would not
have been waived under the comparable Old Plan in which such employee
participated immediately prior to the Closing and Purchase shall cause any
eligible expenses incurred by such employee and his or her covered dependents
during the portion of the plan year of the Old Plan ending on the date such
employee’s participation in the corresponding New Plan begins to be taken into
account under such New Plan for purposes of satisfying all deductible,
coinsurance and maximum out-of-pocket requirements applicable to such employee
and his or her covered dependents for the applicable plan year as if such
amounts had been paid in accordance with such New Plan.


 


44

















 


ARTICLE
X



SURVIVAL OF REPRESENTATIONS, WARRANTIES,

COVENANTS AND AGREEMENTS


 


10.01       Survival of
Representations, Warranties, Covenants and Agreements.  Notwithstanding any right of Purchaser
(whether or not exercised) to investigate the affairs of the Company and the
Subsidiaries or any right of any party (whether or not exercised) to
investigate the accuracy of the representations and warranties of the other
party contained in this Agreement, Sellers and Purchaser have the right to rely
fully upon the representations, warranties, covenants and agreements of the
other contained in this Agreement.  The
representations, warranties, covenants and agreements of Sellers and Purchaser
contained in this Agreement will survive the Closing (a) indefinitely with
respect to (i) the representations and warranties contained in Sections 2.02,
2.04, 2.05 (but only insofar as it relates to the capital stock
of the Subsidiaries), 2.24, 2.33, 3.02 and 3.08 and
(ii) the covenants and agreements contained in Sections 1.05, 4.09,
14.03 and 14.05; (b) until sixty (60) days after the
expiration of all applicable statutes of limitation (including all periods of
extension, whether automatic or permissive) with respect to matters covered by
(i) Section 2.13 and Article VIII, (ii) (insofar as they
relate to ERISA or the Code) Section 2.16 and Article IX and (iii) Section 2.26; (c) until the
second anniversary of the Closing Date in the case of all other representations
and warranties and any covenant or agreement to be performed in whole or in
part on or prior to the Closing or (d) with respect to each other covenant
or agreement contained in this Agreement, until sixty (60) days following the
last date on which such covenant or agreement is to be performed or, if no such
date is specified, indefinitely; provided that any representation,
warranty, covenant or agreement that would otherwise terminate in accordance
with clause (b), (c) or (d) above will continue to survive if a Claim Notice or
Indemnity Notice (as applicable) shall have been timely given under Article XI
on or prior to such termination date, until the related claim for
indemnification has been satisfied or otherwise resolved as provided in Article
XI.  


 


ARTICLE
XI



INDEMNIFICATION


 


11.01       Tax Treatment of
Indemnity Payments.  It is the
intention of the parties to treat any indemnity payment made under this
Agreement as an adjustment to the Purchase Price for all federal, state, local
and foreign Tax purposes, and the parties agree to file their Tax Returns
accordingly.  


 


11.02       Indemnification.


 


(a)       Subject to
paragraph (d) of this Section and the other Sections of this Article XI,
Sellers shall jointly and severally indemnify the Purchaser Indemnified Parties
in respect of, and hold each of them harmless from and against, any and all
Losses suffered, incurred or sustained by any of them or to which any of them
becomes subject, resulting from, arising out of or relating to (i) any breach
of representation or warranty (or resulting from, arising out of or relating to
the facts, circumstances or conditions giving rise to, or constituting


 


45

















 


or underlying such breach) or (ii) nonfulfillment of
or failure to perform any covenant or agreement on the part of Sellers or a
Seller contained in this Agreement (determined in all cases as if the terms “material”
or “materially” were not included therein). 


 


(b)       Subject to the other
Sections of this Article XI, Purchaser shall indemnify Sellers
Indemnified Parties in respect of, and hold each of them harmless from and
against, any and all Losses suffered, incurred or sustained by any of them or
to which any of them becomes subject, resulting from, arising out of or
relating to any breach of representation or warranty or nonfulfillment of or
failure to perform any covenant or agreement on the part of Purchaser contained
in this Agreement.


 


(c)       Sellers shall jointly and
severally indemnify the Purchaser Indemnified Parties in respect of, and hold
each of them harmless from and against, any and all Losses suffered, incurred
or sustained by any of them or to which any of them becomes subject, resulting
from, arising out of or relating to the Sellers’ purchase of shares of the
Company from the estate of George E. Batchelor in 2003.


 


(d)       Notwithstanding anything to
the contrary contained herein, (A) no amount of indemnity shall be paid in the
case of a claim by a Purchaser Indemnified Party under Section 11.02(a)(i)
unless and until the aggregate amount of all Losses of the Purchaser
Indemnified Parties upon which valid claims are based exceeds $10,000,000 and
then Sellers shall only be responsible for indemnification of Losses in excess
of $7,500,000 and (B) the amount payable by Sellers for indemnification under
this Article XI shall be limited, in the aggregate, to $60,000,000; provided
that this paragraph (d) shall not apply to (i) a breach of a representation or
warranty contained in Section 2.02, 2.04, 2.11(i), 2.24,
2.26, 2.33, or 2.35, (ii) a breach of a covenant contained
in Section 1.05, 14.03 or 14.05 or (iii) any amount
payable by Sellers for indemnification under Section 11.02(c).


 


11.03       Method of Asserting
Claims.  All claims for
indemnification by any Indemnified Party under Section 11.02 will
be asserted and resolved as follows:


 


(a)           Unless a different
procedure is specified in Article XI, in the case of a Loss for which
indemnification is sought hereunder, the Indemnified Party shall promptly
deliver an Indemnity Notice to the Indemnifying Party; provided, however,
that no failure or delay by the Indemnified Party in the performance of the
foregoing shall reduce or otherwise affect the obligation of the Indemnifying
Party to indemnify and hold the Indemnified Party harmless, except to the
extent the Indemnified Party’s failure to give or delay in giving the required
Indemnity Notice impairs the Indemnifying Party’s ability to indemnify or
defend or to mitigate its Losses, in which case the Indemnifying Party shall
have no obligation to indemnify the Indemnified Party to the extent of Losses,
if any, caused by such failure to give or delay in giving the required
notice.  If such Losses arise out of a
claim by a third Person, the Indemnified Party must give the Indemnifying Party
a reasonable opportunity to defend the same or prosecute such action to
conclusion or settlement satisfactory to the Indemnifying Party (but only with
the consent of the Indemnified Party, which consent will not be unreasonably
withheld, in the case of any settlement that provides for any relief other than
the payment of monetary damages as to which the Indemnified Party will be indemnified
in full) at the Indemnifying Party’s sole


 


46

















 


cost and expense, and with counsel of its own
selection and with the consent of the Indemnified Party, which consent shall
not be unreasonably withheld, and the Indemnifying Party shall pay any
resulting settlements (including all associated Losses), satisfy any judgments
or comply with any decrees; provided, further, however,
that the Indemnified Party shall at all times also have the right fully to
participate in the defense at Indemnified Party’s sole cost and expense so long
as such participation occurs without hindering or impairing the defense of the
Indemnifying Party.  If the Indemnifying
Party shall, within a reasonable time after receipt of an Indemnity Notice,
fail to defend, the Indemnified Party shall have the right, but not the
obligation, and without waiving any rights against the Indemnifying Party, to
undertake the defense of, and with the consent of the Indemnifying Party (such
consent not to be withheld unreasonably), to compromise or settle the claim on
behalf, for the account, and at the risk and expense, of the Indemnifying Party
and shall be entitled to collect the amount of any settlement or judgment or
decree and all costs and expenses (including, without limitation, reasonable
attorney’s fees) in connection therewith from the Indemnifying Party.  Except as provided in the preceding sentence,
the Indemnified Party shall not compromise or settle any claim without the
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld.


 


(b)           The amount of any
Losses for which indemnification is provided under this Article XI shall
be net of any amounts recovered by the Indemnified Party under insurance
policies or from unaffiliated third parties with respect to such Losses.  If any Indemnified Party shall have received
indemnity payments hereunder and subsequently receives insurance payments or
payments from an unaffiliated third party that would have reduced the
Indemnifying Party’s indemnification obligations pursuant to the preceding
sentence, such Indemnified Party shall be required to deliver such insurance or
third party payments to the applicable Indemnifying Party.  In addition, all Losses subject to
indemnification hereunder shall be calculated net of any tax benefits which
have been actually realized by Purchaser (including those received indirectly
as the sole stockholder of the Company) or Sellers as a result thereof and
shall be calculated to include any tax imposed on the receipt of the indemnity
payment.  All indemnity payments due
under this Agreement shall be made without withholding of any nature for Taxes
except to the extent required by applicable Laws, in which case such indemnity
payments shall be “grossed up” so that the net amount received by Purchaser or
Sellers, as the case may be, will equal the full amount of indemnity due
hereunder.


 


(c)           Following
indemnification as provided for hereunder, the Indemnifying Party shall be
subrogated to all rights of the Indemnified Party with respect to all Persons
relating to the matter for which indemnification has been made.


 


47

















 


ARTICLE
XII



TERMINATION


 


12.01       Termination.  This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned:


 


(a)           at any time before the
Closing, by mutual written agreement of Sellers and Purchaser;


 


(b)           at any time before the
Closing, by Sellers, on the one hand, or Purchaser, on the other hand, in the
event (i) of a material breach hereof by the non-terminating party if such
non-terminating party fails to cure such breach within five (5) Business Days
following notification thereof by the terminating party or (ii) upon
notification of the non-terminating party by the terminating party that the
satisfaction of any condition to the terminating party’s obligations under this
Agreement becomes impossible or impracticable with the use of commercially
reasonable efforts if the failure of such condition to be satisfied is not
caused by a breach hereof by the terminating party; or


 


(c)           at any time following
the later of (i) the 90th day after the date of this Agreement, or
(ii) the 60th day after the date of the last request by the
Department of Justice or the Federal Trade Commission under the HSR Act, by
Sellers, on the one hand, or Purchaser, on the other hand, upon notification of
the non-terminating party by the terminating party if the Closing shall not
have occurred on or before such date and such failure to consummate is not
caused by a breach of this Agreement by the terminating party.


 


For purposes of this Section 12.01, Sellers
shall be considered a single party and a breach by a Seller will constitute a
breach by Sellers.


 


12.02       Effect of Termination.  If this Agreement is validly terminated
pursuant to Section 12.01, this Agreement will forthwith become null and
void, and there will be no liability or obligation on the part of Sellers or
Purchaser (or any of their respective officers, directors, employees, agents or
other representatives or Affiliates), except as provided in the next succeeding
sentence and except that the provisions with respect to expenses in Section 14.03
and confidentiality in Section 14.05 will continue to apply following
any such termination.  Notwithstanding
any other provision in this Agreement to the contrary, upon termination of this
Agreement pursuant to Section 12.01(b) or (c), Sellers will
remain liable to Purchaser for any willful or grossly negligent breach of this
Agreement by Sellers existing at the time of such termination, and Purchaser
will remain liable to Sellers for any willful or grossly negligent breach of
this Agreement by Purchaser existing at the time of such termination, and
Sellers or Purchaser may seek such remedies, including damages and fees of
attorneys, against the other with respect to any such breach as are provided in
this Agreement or as are otherwise available at Law or in equity.


 


48

















 


ARTICLE
XIII



DEFINITIONS


 


13.01       Definitions.


 


(a)       Defined Terms.  As used in this Agreement, the following
defined terms have the meanings indicated below:


 


“2005
Relevant Taxable Income” has the meaning ascribed to it in Section
1.04(a).


 


“2006
Relevant Taxable Income” has the meaning ascribed to it in Section
1.04(b).


 


“2006
Short Period” has the meaning ascribed to it in Section 1.04(b).


 


“2006
Short Period Return” has the meaning ascribed to it in Section 1.04(b).


 


“Acquisition
Proposal” means any proposal for (i) a merger or other business combination
to which the Company is a party or (ii) the direct or indirect acquisition of
any equity interest in, or a substantial portion of the assets of, the Company,
other than the transactions contemplated by this Agreement.


 


“Actions
or Proceedings” means any action, suit, proceeding, arbitration or
Governmental or Regulatory Authority investigation or audit.


 


“AeroTurbine
Capital” means AeroTurbine Capital Corp., a Florida corporation, all of the
outstanding capital stock of which is owned by the Management Sellers.


 


“Affiliate”
means any Person that directly, or indirectly through one of more
intermediaries, controls or is controlled by or is under common control with
the Person specified and, with respect to an individual, means such individual’s
immediate family members and the immediate family members of any such
individual’s immediate family members. 
For purposes of this definition, control of a Person means the power,
direct or indirect, to direct or cause the direction of the management and
policies of such Person whether by Contract or otherwise and, in any event and
without limitation of the previous sentence, any Person owning ten percent
(10%) or more of the voting securities of another Person shall be deemed to
control that Person.


 


“Agreement”
means this Stock Purchase Agreement and the Exhibits, the Disclosure Schedule
and the Schedules hereto and the certificates delivered in accordance with Sections 6.03
and 7.03, as the same shall be amended from time to time.


 


“Aircraft
Asset Lease” means any lease agreement (and all other agreements, including
any side-letters, extension agreements, assignment of warranties and option
agreements related to any such lease agreement) in respect of an aircraft or an
engine pursuant to which an aircraft or an engine is leased by the Company or
any Subsidiaries to any lessee.


 


49

















 


“Aircraft-Related
Assets” means any aircraft, any engines, any spare parts in respect
thereof, and any other assets that are specifically used in connection with the
aircraft, the engines or the spare parts.


 


“Allocation”
has the meaning ascribed to it in Section 1.06.


 


“Alternative
Transaction” has the meaning ascribed to it in Section 4.04.


 


“Assets
and Properties” of any Person means all assets and properties of every
kind, nature, character and description (whether real, personal or mixed,
whether tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including without limitation cash,
cash equivalents, Investment Assets, accounts and notes receivable, chattel
paper, documents, instruments, general intangibles, real estate, equipment,
inventory, goods and Intellectual Property.


 


“Audited
Financial Statements” means the Financial Statements for the most recent
fiscal year of the Company delivered to Purchaser pursuant to Section 2.10.


 


“Authorized
Bank” has the meaning ascribed to it in Section 4.18.


 


“Benefit
Plan” means any Plan established by the Company or any Subsidiary, or any
predecessor or Affiliate of any of the foregoing, existing at the Closing Date
or within three (3) years prior thereto, to which the Company or any Subsidiary
contributes or has contributed, under which any employee, former employee or
director of the Company or any Subsidiary or any beneficiary thereof is
covered, is eligible for coverage or has benefit rights or with respect to
which the Company or any Subsidiary has any actual or contingent liability.


 


“Books
and Records” means all files, documents, instruments, papers, books and
records relating to the Business or Condition of the Company, including without
limitation financial statements, Tax Returns and related work papers and
letters from accountants, budgets, pricing guidelines, ledgers, journals,
deeds, title policies, minute books, stock certificates and books, stock
transfer ledgers, Contracts, Licenses, customer lists, computer files and
programs, retrieval programs, operating data and plans and environmental
studies and plans.


 


“Business
Day” means a day other than Saturday, Sunday or any day on which banks
located in New York and Florida are authorized or obligated to close.


 


“Business
or Condition of the Company” means the business, condition (financial or
otherwise), results of operations, Assets and Properties and prospects of the
Company and the Subsidiaries taken as a whole.


 


“Cash”  means cash (including checks received prior
to the close of business on the relevant date, whether or not deposited or
cleared prior to the close of business on the relevant date), commercial paper,
certificates of deposit and other bank deposits, treasury bills and any other
cash equivalents.


 


“Cash Equivalent
Investments” has the meaning ascribed to it in Section 4.18.


 


50

















 


“Cerberus
Entities” has the meaning ascribed to it in the forepart of this Agreement.


 


“CERCLA”
means the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, and the rules and regulations promulgated thereunder.


 


“Claim
Notice” means written notification of a third party claim as to which
indemnity under Section 11.02 is sought by an Indemnified Party,
enclosing a copy of all papers served, if any, and specifying the nature of and
basis for such third party claim and for the Indemnified Party’s claim against
the Indemnifying Party under Section 11.02, together with the
amount or, if not then reasonably determinable, the estimated amount,
determined in good faith, of the Loss arising from such third party claim.


 


“Closing”
means the closing of the transactions contemplated by Section 1.03.


 


“Closing
Date” means (a) the fifth Business Day after the day on which the last of the
consents, approvals, actions, filings, notices or waiting periods described in
or related to the filings described in Sections 6.05 through 6.07
and Section 7.05 has been obtained, made or given or has expired,
as applicable, or (b) such other date as Purchaser and Sellers mutually agree
upon in writing.


 


“Closing
Purchase Price” has the meaning ascribed to it in Section 1.02.


 


“Code”
means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.


 


“Code
§338 Forms” has the meaning ascribed to it in Section 8.02.


 


“Company”
has the meaning ascribed to it in the forepart of this Agreement.


 


“Company
Employees” has the meaning ascribed to it in Section 9.01(a).


 


“Contest”
has the meaning ascribed to it in Section 8.05(b).


 


“Contract”
means any agreement, lease, license, evidence of Indebtedness, mortgage,
indenture, security agreement or other contract (whether written or oral).


 


“Defined
Benefit Plan” means any Plan that is subject to Part 3 of Title I
of ERISA, Section 412 of the Code or Title IV of ERISA.


 


“Disclosure
Schedule” means the record delivered to Purchaser by Sellers herewith and
dated as of the date hereof, containing all lists, descriptions, exceptions and
other information and materials as are required to be included therein by
Sellers pursuant to this Agreement.


 


“Elections”
has the meaning ascribed to it in Section 8.02.


 


51

















 


“Employment
Agreements” has the meaning ascribed to it in the forepart of this
Agreement.


 


“Enbee”
has the meaning ascribed to it in Section 4.16.


 


“Environmental
Law” means any Law or Order relating to the regulation or protection of
human health, safety or the environment or to emissions, discharges, Releases
or threatened Releases of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes into the environment (including,
without limitation, ambient air, soil, surface water, ground water, wetlands,
land or subsurface strata), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes.  


 


“Environmental
Permits” has the meaning ascribed to it in Section 2.26.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and the
rules and regulations promulgated thereunder.


 


“ERISA
Affiliate” means any Person who is in the same controlled group of
corporations or who is under common control with Sellers or, before the
Closing, the Company or any Subsidiary (within the meaning of Section 414 of
the Code).


 


“Final
Determination” has the meaning ascribed to it in Section 8.05(e).


 


“Financial
Statements” means the consolidated financial statements of the Company and
its consolidated Subsidiaries delivered to Purchaser pursuant to Section
2.10 or 4.06.


 


“Foreign Tax Credit Benefit” has the meaning
ascribed to it in Section 1.04(f).


 


“GAAP” means generally accepted accounting
principles, consistently applied throughout the specified period and in the
immediately prior comparable period.


 


“Governmental
or Regulatory Authority” means any court, tribunal, arbitrator, authority,
agency, commission, official or other instrumentality of the United States, any
foreign country or any domestic or foreign state, county, city or other
political subdivision.


 


“Hazardous
Material” means (A) any petroleum or petroleum products, radioactive
materials, asbestos in any form or condition, urea formaldehyde foam insulation
and polychlorinated biphenyls (PCBs); (B) any other chemicals or other
materials, substances or wastes which are now or hereafter become defined as or
included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous
materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic
substances,” “toxic pollutants” or words of similar import under any
Environmental Law; and (C) any other chemical or other material, substance or
waste, exposure to which is now or hereafter prohibited, limited or regulated
by any Governmental or Regulatory Authority under any Environmental Law or with
respect to which liability or standards of conduct are imposed under an
Environmental Law.


 


52

















 


“HSR
Act” means Section 7A of the Clayton Act (Title II of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended) and the rules and regulations
promulgated thereunder.


 


“Indebtedness”
of any Person means all obligations of such Person (i) for borrowed money, (ii)
evidenced by notes, bonds, debentures or similar instruments, (iii) for the
deferred purchase price of goods or services (other than trade payables or
accruals incurred in the ordinary course of business), (iv) under capital
leases and (v) in the nature of guarantees of the obligations described in
clauses (i) through (iv) above of any other Person.


 


“Indemnified
Party” means any Person claiming indemnification under any provision of Article
XI.


 


“Indemnifying
Party” means any Person against whom a claim for indemnification is being
asserted under any provision of Article XI.


 


“Indemnity
Notice” means written notification pursuant to Section 11.03(b) of a
claim for indemnity under Article XI by an Indemnified Party, specifying
the nature of and basis for such claim, together with the amount or, if not
then reasonably determinable, the estimated amount, determined in good faith,
of the Loss arising from such claim.


 


“Intellectual
Property” means all patents and patent rights, trademarks and trademark
rights, trade names and trade name rights, service marks and service mark
rights, service names and service name rights, brand names, inventions,
processes, formulae, copyrights and copyright rights, trade dress, business and
product names, logos, slogans, trade secrets, industrial models, processes,
designs, methodologies, computer programs (including all source codes) and
related documentation, technical information, manufacturing, engineering and
technical drawings, know-how and all pending applications for and registrations
of patents, trademarks, service marks and copyrights.


 


“Interim
Period” has the meaning ascribed to it in Section 1.02.


 


“Investment
Account” has the meaning ascribed to it in Section 4.18.


 


“Investment
Assets” means all debentures, notes and other evidences of Indebtedness,
stocks, securities (including rights to purchase and securities convertible
into or exchangeable for other securities), interests in joint ventures and
general and limited partnerships, mortgage loans and other investment or
portfolio assets owned of record or beneficially by the Company or any
Subsidiary and issued by any Person other than the Company or any Subsidiary
(other than trade receivables generated in the ordinary course of business of
the Company and the Subsidiaries).


 


“IRS”
means the United States Internal Revenue Service.


 


“Knowledge
of Sellers” or “Known to Sellers” means the knowledge of any Seller.


 


53

















 


“Laws”
means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.


 


“Liabilities”
means all Indebtedness, obligations and other liabilities of a Person (whether
absolute, accrued, contingent, fixed or otherwise, or whether due or to become
due and whether known or unkown).


 


“Licenses”
means all licenses, permits, certificates of authority, authorizations,
approvals, registrations, franchises and similar consents granted or issued by
any Governmental or Regulatory Authority.


 


“Liens”
means any mortgage, pledge, assessment, security interest, lease, lien, adverse
claim, levy, charge or other encumbrance of any kind, or any conditional sale
Contract, title retention Contract or other Contract to give any of the
foregoing.


 


“Loss”
means any and all direct or indirect damages, fines, fees, penalties,
deficiencies, losses and expenses (including without limitation interest, court
costs, fees of attorneys, accountants and other experts or other expenses of
litigation or other proceedings or of any claim, default or assessment) and
shall include any decrease in the value of the Shares due to a Loss suffered by
or in the Company or any Subsidiary to the Purchaser. 


 


“Material
Adverse Effect” means any circumstance, change in or effect on the Company
or any Subsidiary that, individually or in the aggregate with all other circumstances,
changes in or effects on the Company or any Subsidiary, is or is reasonably
likely to be materially adverse to the business, operations, assets or
liabilities (including, without limitation, contingent liabilities), customer
or supplier relationships, results of operations or the condition (financial or
otherwise) of the Company and the Subsidiaries taken as a whole; provided,
however, that “Material Adverse Effect” shall not include any event,
circumstance, change or effect arising out of or attributable to general
economic conditions or events, circumstances, changes or effects affecting the
securities markets generally or the industry in which the Company operates.


 


“New
Plan” has the meaning ascribed to it in Section 9.01(a).


 


“New
Real Estate Lease” has the meaning ascribed to it in Section 4.16.


 


“Non-Competition
Agreement” has the meaning ascribed to it in the forepart of this
Agreement.


 


“NPL”
means the National Priorities List under CERCLA.


 


“Obligor”
has the meaning ascribed to it in Section 2.21.


 


“Old
Plan” has the meaning ascribed to it in Section 9.01(a).


 


54

















 


“Operative
Agreements” means the Shareholder Equity Agreements, Non-Competition
Agreement and any support or other agreements to be entered into in connection
with the transaction.


 


“Option”
with respect to any Person means any security, right, subscription, warrant,
option, “phantom” stock right or other Contract that gives the right to (i)
purchase or otherwise receive or be issued any shares of capital stock of such
Person or any security of any kind convertible into or exchangeable or
exercisable for any shares of capital stock of such Person or (ii) receive or
exercise any benefits or rights similar to any rights enjoyed by or accruing to
the holder of shares of capital stock of such Person, including any rights to
participate in the equity or income of such Person or to participate in or
direct the election of any directors or officers of such Person or the manner
in which any shares of capital stock of such Person are voted.


 


“Order”
means any writ, judgment, decree, injunction or similar order of any
Governmental or Regulatory Authority (in each such case whether preliminary or
final). 


 


“Parent”
has the meaning ascribed to it in the forepart of this Agreement.


 


“PCBs”
has the meaning ascribed to it in Section 2.26.


 


“PBGC”
means the Pension Benefit Guaranty Corporation established under ERISA.


 


“Pension
Benefit Plan” means each Benefit Plan which is a pension benefit plan
within the meaning of Section 3(2) of ERISA.


 


“Permitted
Lien” means (i) any Lien for Taxes, assessments and governmental charges
not yet due or delinquent or being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance
with GAAP, (ii) any Lien arising in the ordinary course of business by
operation of Law with respect to a Liability that is not yet due or delinquent,
(iii) any minor imperfection of title or similar Lien which individually or in
the aggregate with other such Liens does not materially impair the value of the
property subject to such Lien or the use of such property in the conduct of the
business of the Company or any Subsidiary, and (iv) Liens and deposits incurred
in the ordinary course to secure obligations under workers’ compensation Laws
or similar legislation or other Liens required by Law to secure public or
statutory obligations.


 


“Person”
means any natural person, corporation, limited liability company, general
partnership, limited partnership, proprietorship, other business organization,
trust, union, association or Governmental or Regulatory Authority.


 


“Plan”
means any bonus, incentive compensation, deferred compensation, change in
control, retention, pension, profit sharing, retirement, stock purchase, stock
option, stock ownership, stock appreciation rights, phantom stock, leave of
absence, layoff, vacation, day or dependent care, legal services, cafeteria,
life, health, accident, disability, workmen’s compensation or other insurance,
severance, separation or other employee benefit plan, practice,


 


55

















 


policy or arrangement of any kind, whether written or
oral, including, but not limited to, any “employee benefit plan” within the
meaning of Section 3(3) of ERISA.


 


“Pre-Signing
Dividend Amount” has the meaning ascribed to it in Section 1.04(c).


 


“Purchase
Price” has the meaning ascribed to it in Section 1.02.


 


“Purchaser”
has the meaning ascribed to it in the forepart of this Agreement.


 


“Purchaser
Indemnified Parties” means Purchaser and its officers, directors,
employees, agents and Affiliates (including the Company).


 


“Qualified
Plan” means each Benefit Plan which is intended to qualify under
Section 401 of the Code.


 


“Release(s)”
means any release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration into the indoor or
outdoor environment, including, without limitation, the movement of Hazardous
Materials through ambient air, soil, surface water, ground water, wetlands,
land or subsurface strata.


 


“Representatives”
has the meaning ascribed to it in Section 4.03.


 


“Restricted
Shares Purchase Agreement” has the meaning ascribed to it in the forepart
of this Agreement.


 


“Scheduled
Payments” has the meaning ascribed to it in Section 2.21.


 


“Seller”
and “Sellers” has the meaning ascribed to it in the forepart of this
Agreement.


 


“Sellers
Indemnified Parties” means Sellers and its officers, directors, employees,
agents and Affiliates.


 


“Shareholder
Equity Agreements” has the meaning ascribed to it in the forepart of this
Agreement.


 


“Share
Purchase Price” has the meaning ascribed to it in Section 1.06.


 


“Shares”
has the meaning ascribed to it in the forepart of this Agreement.


 


“Stockholders
Agreement” has the meaning ascribed to it in the forepart of this
Agreement.


 


“Straddle
Periods” has the meaning ascribed to it in Section 8.01(b).


 


“Straddle
Pre-Closing Taxes” has the meaning ascribed to it in Section 8.01(b).


 


“Straddle
Returns” has the meaning ascribed to it in Section 8.01(b).


 


56

















 


“Subsidiary”
means any Person in which the Company, directly or indirectly through
Subsidiaries or otherwise, beneficially owns more than fifty percent (50%) of
either the equity interests in, or the voting control of, such Person.  For purposes of representations and
warranties under this Agreement, AeroTurbine Capital shall be deemed to be a
Subsidiary of the Company.


 


“Tax
Returns” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof, including, where
permitted or required, combined or consolidated returns for any group of
entities that include the Company or any Subsidiary.


 


“Taxes”
means any federal, state, local, or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Code §59A), customs duties,
capital stock, franchise, profits, withholding (including on non-resident
shareholders of S corporations), social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, unclaimed
property or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not and any expenses incurred in
connection with the determination, settlement or litigation of any Tax
liability.


 


“Transfer
Taxes” has the meaning ascribed to it in Section 8.06.


 


“Unaudited
Financial Statement Date” means the last day of the most recent fiscal
quarter of the Company for which Financial Statements are delivered to
Purchaser pursuant to Section 2.10.


 


“Unaudited
Financial Statements” means the Financial Statements for the most recent
fiscal quarter of the Company delivered to Purchaser pursuant to Section 2.10.


 


(b)       Construction of Certain Terms
and Phrases.  Unless the
context of this Agreement otherwise requires, (i) words of any gender include
each other gender; (ii) words using the singular or plural number also include
the plural or singular number, respectively; (iii) the terms “hereof,” “herein,”
“hereby” and derivative or similar words refer to this entire Agreement;
(iv) the terms “Article” or “Section” refer to the specified Article or
Section of this Agreement; and (v) the phrases “ordinary course of business”
and “ordinary course of business consistent with past practice” refer to the
business and practice of the Company or a Subsidiary.  Whenever this Agreement refers to a number of
days, such number shall refer to calendar days unless Business Days are
specified.  All accounting terms used
herein and not expressly defined herein shall have the meanings given to them
under GAAP.


 


ARTICLE
XIV



MISCELLANEOUS


 


14.01       Notices.  All notices, requests and other
communications hereunder must be in writing and will be deemed to have been
duly given only if delivered personally or by


 


57

















 


facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:


 


If to
Purchaser, to:


 


AerCap,
Inc.

100 N.E. Third Avenue, Suite 800


Ft.
Lauderdale, Florida, 33301, USA


Facsimile
No.:  (954) 760-7716


 


with a
copy to:


 


AerCap,
B.V.

Evert van de Beekstraat 312

1118 CX SCHIPHOL Airport

The Netherlands


 


and


 


Cerberus
Capital Management, L.P.

299 Park Avenue

New York, New York 10171

Attn:  Robert G. Warden


 


Milbank,
Tweed, Hadley and McCloy LLP

1 Chase Manhattan Plaza

New York, New York 10005

Facsimile No.:  (212) 822-5171

Attn:  Alexander M. Kaye, Esq.


 


If to
Sellers, to:


 


Mr.
Nicolas Finazzo, Mrs. Rose Ann Finazzo or Mr. Robert B. Nichols

AeroTurbine, Inc.

2323 N.W. 82nd Avenue

Miami, Florida 33122-1512

Facsimile No.:  (305) 406-3065


 


with a
copy to:


 


Stearns
Weaver Miller Weissler Alhadeff & Sitterson, P.A.

150 West Flagler Street, Suite 2200


Miami,
Florida 33130

Facsimile No.:  (305) 789-3395

Attn:  Stuart D. Ames, Esq.


 


All such notices, requests and other communications
will (i) if delivered personally to the address as provided in this
Section, be deemed given upon delivery, (ii) if delivered by facsimile


 


58

















 


transmission to the facsimile number as provided in
this Section, be deemed given upon receipt, and (iii) if delivered by mail
in the manner described above to the address as provided in this Section, be
deemed given upon receipt (in each case regardless of whether such notice,
request or other communication is received by any other Person to whom a copy
of such notice, request or other communication is to be delivered pursuant to
this Section).  Any party from time to
time may change its address, facsimile number or other information for the
purpose of notices to that party by giving notice specifying such change to the
other party hereto.


 


14.02       Entire Agreement.  This Agreement and the Operative Agreements
supersede all prior discussions and agreements between the parties with respect
to the subject matter hereof and thereof, including without limitation that
certain letter of intent between AerCap, B.V., Nicolas Finazzo and Robert B.
Nichols dated as of November 24, 2005 and confidentiality agreement between
AerCap, B.V. and Wachovia Capital Markets, LLC dated September 2, 2005, and
contain the sole and entire agreement between the parties hereto with respect
to the subject matter hereof and thereof.


 


14.03       Expenses.  Except as otherwise expressly provided in
this Agreement (including without limitation as provided in Section 12.02),
whether or not the transactions contemplated hereby are consummated, each party
will pay its own costs and expenses, and Sellers shall pay the costs and
expenses of the Company and the Subsidiaries, incurred in connection with the
negotiation, execution and closing of this Agreement and the Operative
Agreements and the transactions contemplated hereby and thereby.  Notwithstanding the foregoing, Purchaser
shall pay the entire filing fee for the Premerger Notification and Report Form
under the HSR Act.


 


14.04       Public Announcements.  At all times at or before the Closing,
Sellers and Purchaser will not, and Sellers will not permit the Company to,
issue or make any reports, statements or releases to the public or generally to
the employees, customers, suppliers or other Persons to whom the Company and
the Subsidiaries sell goods or provide services or with whom the Company and
the Subsidiaries otherwise have significant business relationships with respect
to this Agreement or the transactions contemplated hereby without the consent
of the other, which consent shall not be unreasonably withheld.  If either party is unable to obtain the
approval of its public report, statement or release from the other party and
such report, statement or release is, in the opinion of legal counsel to such
party, required by Law in order to discharge such party’s disclosure
obligations, then such party may make or issue the legally required report,
statement or release and promptly furnish the other party with a copy
thereof.  Sellers and Purchaser will also
obtain the other party’s prior approval of any press release to be issued
immediately following the Closing announcing the consummation of the
transactions contemplated by this Agreement. 
Without limiting the generality of the foregoing, none of the parties to
this Agreement or the Company shall make any public disclosure of the Purchase
Price or the Closing Purchase Price without the prior written consent of the
other parties hereto unless such disclosure is required by applicable Laws and
then only to the extent so required.  If
any Affiliate of Purchaser or Parent makes any disclosure which Purchaser is not
permitted to make hereunder, Purchaser shall be deemed to have breached the
covenant contained in this Section.


 


14.05       Confidentiality.  Each party hereto will hold, and will use its
best efforts to cause its Affiliates, and their respective Representatives to
hold, in strict confidence from any


 


59

















 


Person (other than any such Affiliate or
Representative) all documents and information provided to such party by another
party to this Agreement or such other party’s Representatives, unless (i)
compelled to disclose by judicial or administrative process (including without
limitation in connection with obtaining the necessary approvals of this
Agreement and the transactions contemplated hereby of Governmental or
Regulatory Authorities) or by other requirements of Law or (ii) disclosed in an
Action or Proceeding brought by a party hereto in pursuit of its rights or in
the exercise of its remedies hereunder, all documents and information
concerning the other party or any of its Affiliates furnished to it by the
other party or such other party’s Representatives in connection with this
Agreement or the transactions contemplated hereby, except to the extent that
such documents or information can be shown to have been (a) previously known by
the party receiving such documents or information, (b) in the public domain
(either prior to or after the furnishing of such documents or information
hereunder) through no fault of such receiving party or (c) later acquired by
the receiving party from another source if the receiving party is not aware
that such source is under an obligation to another party hereto to keep such
documents and information confidential; provided that following the
Closing the foregoing restrictions will not apply to Purchaser’s use of
documents and information concerning the Company and the Subsidiaries furnished
by Sellers hereunder.  In the event the
transactions contemplated hereby are not consummated, upon the request of the
other party, each party hereto will, and will cause its Affiliates, any Person
who has provided, or who is considering providing, financing to such party and
their respective Representatives to, promptly (and in no event later than five
(5) Business Days after such request) redeliver or cause to be redelivered all
copies of documents and information furnished by the other party in connection
with this Agreement or the transactions contemplated hereby and destroy or
cause to be destroyed all notes, memoranda, summaries, analyses, compilations
and other writings related thereto or based thereon prepared by the party
furnished such documents and information or its Representatives.


 


14.06       Waiver.  Any term or condition of this Agreement may
be waived at any time by the party that is entitled to the benefit thereof, but
no such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition.  No waiver by any party of any term or
condition of this Agreement, in any one or more instances, shall be deemed to
be or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion.  All
remedies, either under this Agreement or by Law or otherwise afforded, will be
cumulative and not alternative.


 


14.07       Amendment.  This Agreement may be amended, supplemented
or modified only by a written instrument duly executed by or on behalf of each
party hereto.


 


14.08       No Third Party
Beneficiary.  The terms and
provisions of this Agreement are intended solely for the benefit of each party
hereto and their respective successors or permitted assigns, and it is not the
intention of the parties to confer third-party beneficiary rights upon any
other Person other than any Person entitled to indemnity under Article XI.


 


14.09       No Assignment; Binding
Effect.  Neither this Agreement nor
any right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void, except (a) for assignments and transfers by operation of
Law and (b) that Purchaser may assign this Agreement


 


60

















 


or any or all of its rights, interests and obligations
hereunder (including without limitation its rights under Article XI)
to (i) a wholly-owned subsidiary, provided that any such subsidiary agrees in
writing to be bound by all of the terms, conditions and provisions contained
herein, (ii) any post-Closing purchaser of all of the issued and outstanding
stock of the Company or a substantial part of its assets or (iii) any financial
institution providing purchase money or other financing to Purchaser or the
Company from time to time as collateral security for such financing, but no such
assignment referred to in clause (i) or (ii) shall relieve Purchaser of
its obligations hereunder.  Subject to
the preceding sentence, this Agreement is binding upon, inures to the benefit
of and is enforceable by the parties hereto and their respective successors and
assigns.


 


14.10       Headings.  The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.


 


14.11       Consent to Jurisdiction.  Each
party hereby irrevocably submits to the exclusive jurisdiction of any federal
court located in the Borough of Manhattan in the City and State of New York or
any New York state court located in the Borough of Manhattan in the City of New
York in any such action, suit or proceeding arising out of or relating to this
Agreement or any of the Operative Agreements or any of the transactions
contemplated hereby or thereby, and agrees that any such action, suit or
proceeding shall be brought only in such court, provided, however,
that such consent to jurisdiction is solely for the purpose referred to in this
Section 14.11 and shall not be deemed to be a general submission to
the jurisdiction of said courts or in the State of New York other than for such
purpose.  Each party hereby irrevocably
waives, to the fullest extent permitted by Law, (i) trial by jury and (ii) any
objection that it may now or hereafter have to the laying of the venue of any
such action, suit or proceeding brought in such a court and any claim that any
such action, suit or proceeding brought in such a court has been brought in an
inconvenient forum.


 


14.12       Invalid Provisions.  If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future Law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
and (c) the remaining provisions of this Agreement will remain in full force
and effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom.


 


14.13       Governing Law.  This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York applicable to a
Contract executed and performed in such State, without giving effect to the
conflicts of laws principles thereof.


 


14.14       Counterparts.  This Agreement may be executed in any number
of counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.


 


[Signatures are on the next page]


 


61

















 


IN
WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officer of each party hereto as of the date first above
written.


 


	
   

  	
  AERCAP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Laura B.
  Showalter

  
	
   

  	
   

  	
  Name:  Laura B. Showalter

  
	
   

  	
   

  	
  Title:  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Nicolas Finazzo

  
	
   

  	
  NICOLAS FINAZZO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Rose Ann Finazzo

  
	
   

  	
  ROSE ANN FINAZZO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Robert B. Nichols

  
	
   

  	
  ROBERT B. NICHOLS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AERCAP, B.V.

  
	
   

  	
   

  
	
   

  	
  AerCap, B.V. hereby guarantees the due and

  punctual performance and discharge of all of

  Purchaser’s obligations under this Agreement.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Israel Padron

  
	
   

  	
   

  	
  Name:  Israel Padron

  
	
   

  	
   

  	
  Title:
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wouter M.
  den Dikken

  
	
   

  	
   

  	
  Name:  Wouter M. den Dikken

  
	
   

  	
   

  	
  Title:  Authorized Signatory

  



 


62